One piece of good news for ANZ investors, amid all yesterday's gloom, is that the group has been able to increase its net interest margin.ANZ reported the lowest margin of the big five banks in the March half of 1.91 per cent, compared with St George's 1.92 per cent, Westpac's 2.05, Commonwealth's 2.12 and NAB's 2.36 per cent.It also suffered the biggest fall in margin, down 31 basis points. All the banks had trouble passing on their higher funding costs but ANZ's margin compression was particularly pronounced.The bank's chief financial officer Peter Marriott reported yesterday that the margin had climbed back to 2.03 per cent in the June quarter. This was due to repricing of loans to keep pace with rising funding costs. Marriott said: "We would hope the net interest margin tracks up a little bit as repricing comes through. "We have to expect further volatility in terms of funding costs. We will have to continue to pass that on. "We have to manage that but we feel we are on top of it at the moment."ANZ yesterday forecast that, for the full year, profit before provisions would be up about eight per cent on the 2007 full-year result. But provisions in the second half will be around $1.2 billion, up from $980 million in the first half. Higher provisions will result in a fall in earnings per share of around 20 to 25 per cent.The collective provision will be reset to above one per cent of credit risk weighted assets. The collective provision will be around $375 million (compared to $376 million in the first half).Individual provisions will be around $850 million (compared to $604 million in the first half). The bank said credits that have deteriorated include the payments company Bill Express, securities lending clients and commercial property clients.A further $160 million will be deducted from income to adjust for the fall in the value of US corporate credit intermediation trades. This was the credit exposure linked to a now CCC-rated monoline insurer and on which ANZ back in February first took a write down of around $200 million. ANZ continues to contend that it is likely to write back these provisions over time as the underlying loans mature.ANZ said it will maintain (and thus, for once, not increase) its full-year dividend. The bank is likely to underwrite the dividend. The bank said it will also convert the StEPS hybrid into ordinary shares.