A slump in the business lending margin and a concession that the group was willing to write new loans at less than the cost of capital provided a focus for the full year results briefing for National Australia Bank yesterday.NAB for the first time disclosed an explicit net interest margin for business banking of 1.92 per cent at the end of September 2015, a decline of 19 basis points. Of this, 14 bps out of 19 bps was put down to a decline in "lending margin".This is the result of NAB chasing the market on pricing to recover market share and to protect its preferred status as sector leader in the segment.Craig Drummond, group executive, finance at NAB, said the bank would "do some front book business periodically that is below the cost of capital … but we will get above the cost of capital."You've got to be in a position to meet the market, and meet the market we will," he said.The same thinking applies at the lower end of the market, according to Andrew Thorburn, the bank's managing director."From the point of view of losing market share in small and medium business lending, which is NAB heartland, we wanted to turn that around," Thorburn said."We are just much more competitive on price in the business market than we were."NAB can point to a greatly improved credit quality on business loans, with loans 90 days or more past due, or impaired, down to 0.9 per cent at September 2015, less than half the ratio of 2.02 per cent a year earlier. The flow of new impaired assets also halved, at a group level, to A$673 million.