National Australia Bank chief executive Cameron Clyne says the bank got the balance right when it decided to pass on only 20 basis points of the 25 basis cut in the cash rate in November.Speaking at the bank's annual general meeting in Adelaide yesterday, Clyne said: "Our decision in December to pass on the Reserve Bank rate cut in full and our decision in November to pass on 20 basis points carefully balanced the needs of all our stakeholders, our customers and our shareholders."The simple fact is that it is costing us more to acquire the funds that we lend to people for their mortgages."Clyne said the bank faced a tough year in 2012, with weak demand for consumer and business finance, high funding costs and new regulatory requirements to meet.NAB chairman Michael Chaney backed up his CEO, saying it was disappointing that politicians saw it as being in their interests to use banks as a political football.Chaney said: "One of the things anyone involved with an Australian bank today finds frustrating is the extraordinary amount of comment and criticism that occurs whenever variable mortgage interest rates are adjusted."During the year market volatility returned to levels not seen since the depths of the global financial crisis."The volatile overseas markets and new global banking regulatory requirements have pushed up the cost of funds and the current instability in Europe presents us with additional pressures in the wholesale term funding markets."Chaney said that bank earnings, looked at on the basis of return on equity, were not excessively high and there was no basis for describing them as super-profits.