NAB's interim report, released yesterday, provides the first opportunity to see how the bank is going with the repositioning of its Australian retail operation as a low-cost customer friendly alternative to the other big banks. So far, there are not too many runs on the board.NAB's personal banking division reported cash earnings of $317 million for the March half, down 32 per cent on the September half result and down 22 per cent on the previous corresponding period.The division's cost to income ratio blew out from 47.5 per cent last September to 55 per cent in the latest half and its net interest margin dropped from 2.64 to 2.34 per cent over the same period.Last year the bank scrapped exception fees, such as overdrawn account charges, on personal accounts. It also dropped the monthly account fees for most retail customers. And it had a policy of keeping its variable mortgage rate below its rivals.The move to cut fees cost the bank $100 million of revenue in the half.The bank achieved a little over system growth (1.1 times) in home loans for the half and increased market share from 12.8 per cent in September to 13.2 per cent.However, much of that increase in share was due to the addition of the Challenger back book (re-branded Advantedge) to its mortgage portfolio.Share of household deposits increased from 13.1 per cent in September to 13.4 per cent in the latest half.Clyne said there were some positive developments. "We are above system growth in mortgages for the first time in five years."There has been a 42 per cent reduction in customer complaints since March last year. Customer satisfaction levels have increased.There has been a 22 per cent decrease in transaction account closures and a 32 per cent increase in transaction account openings compared to the March half last year. The bank's view is that: "These highlights demonstrate that the strategic decisions made are addressing the concerns of our customers, are improving their experience and will drive revenue growth over the longer term."Aggressive deposit competition may be coming to an end.NAB chief executive Cameron Clyne said the intense competition for retail deposits may be abating. Clyne said: "It is a zero sum game. We are all fighting for the same dollar."NAB's online subsidiary, UBank, was one of a number of groups offering high-yield online accounts that did not increase their deposit rates after the Reserve Bank's April cash rate increase.Clyne said: "We have a competitive offer. Deposit growth was above system for the half. That is a good sign."