MyState Ltd is aiming to stop a decline in its loan portfolio by putting more resources into broker distribution. The banking and wealth management group is upgrading its application processing technology, making its pricing more competitive and appointing more relationship managers to work with brokers.On Friday, MyState reported net profit of A$14.8 million for the six months to December - an increase of two per cent over the previous corresponding period.The banking division, which is made up of MyState Financial and The Rock Building Society, made a net profit of $12.7 million for the half - up 0.7 per cent on the previous corresponding period.The value of the group's loan portfolio fell by 1.3 per cent, down from $3 billion at June 30 last year to $2.9 billion at the end of December.MyState's managing director, John Gilbert, said in a media release: "Lower demand for credit has had an impact on the group's loan portfolio, which together with borrowers accelerating their repayments, has led to a contraction in the loan book."The net interest margin rose from 2.52 per cent in December 2012 to 2.57 per cent at the end of the latest half.Gilbert said the group was able to reduce its cost of funds; it raised $322 million through an issue of residential mortgage-backed securities in November.The bank implemented a new core banking system in November. Gilbert said the new system would underpin the growth of the banking business, with improvements in productivity and enhanced products and services.