ASB Bank warded off the negative impact on margins from rising deposit rates by maintaining a funding mix that relies significantly on money market deposits.In the bank's March 2010 trading update Commonwealth Bank had indicated that price competition for retail deposits continued to have a negative impact on margins for ASB. However, financials for the nine months to March 2010 show ASB managed to maintain its net interest margin.ASB reported net interest earnings of NZ$761 million, compared with NZ$712 million in the same period a year earlier. Net interest rose as the 20 per cent fall in interest income was more than offset by nearly 27 per cent drop in interest expense.ASB held NZ$19 billion of money market deposits at March 31.  This compared with customer deposits of NZ$31.4 billion and another NZ$7 billion from other banks, mainly loans from CBA.Net profit during the nine-month period, however, fell sharply for ASB to NZ$96 million from NZ$336 million but much of that  was due to a sharp fall in other income, and an increase in tax expense during the recent period from settlement of a tax case with the Inland Revenue Department.ASB's impairment losses increased by just NZ$6 million to NZ$133 million. While collective provisions fell due to write off some bad debt, individually assessed provisions rose by NZ$11 million.In one sign of the beginnings of a turnaround in the cycle, ASB's total provisions for impairment loss fell to NZ$318 million in March, compared with NZ$340 million at the start of the nine-month period.