Commonwealth Bank will wear the squeeze on its interest margins from more expensive term-funding the bank's chief executive told an investor briefing yesterday.CBA released its third-quarter trading update yesterday. It said unaudited cash earnings for the quarter were A$1.75 billion.The bank has thus reported a cash profit of, or close to, $1.75 billion for five quarters in a row, a result that implies that profit is in decline when viewed as a return on assets.Ian Narev, CEO of CBA, told the briefing that "we will absolutely resist the urge to fund shorter to prop up the margin in the near term."We need solid term-funding. You incur higher term funding costs. That's just life."CBA said in the update that margins had declined in the retail bank over the third quarter, while margins in the business bank were "prudently managed".In New Zealand, margins were "steady", at ASB.Chief financial officer David Craig said the bank continued to aim for growth in operating income and operating profit that was roughly equal for the financial year, a target consistent with that set at the half-year."If we get that outcome, that will be good," Craig said.Narev said that CBA was fully provided for in its exposure to the failure of the construction arm of the St Hillier's group, which entered administration this week (not that he named the client directly).He did say that media reports on the size of the exposure were "significantly off the mark".One piece of data Narev did want to share was a further lift in the bank's ratings of customer satisfaction. On the Roy Morgan Research monitor, CBA has now reached second place in the rankings (among major banks), displacing ANZ.The bank says it will continue with trading updates for the first and third quarters, a practice Westpac has said it will discontinue.