There was more bad news from the big Australian banks yesterday, when Westpac reported that its stressed exposures rose in the June quarter and its cost of funds increased.Westpac's stressed exposures, which include watchlist and substandard loans, loans past due by 90 days or more and impaired loans, increased by 12 basis points to 1.15 per cent of total committed exposures in the June quarter.Since the September quarter last year, when the ratio of stressed exposures to total exposures was 0.99 per cent, the increase has been 16 bps.This marks a change in the stressed exposure trend, which had been improving since 2009.Westpac said in a regulatory disclosure that it had experienced higher mortgage delinquencies in Western Australia, Queensland and South Australia.The proportion of delinquent Australian mortgages (past due by 90 days or more) has grown from 45 bps of the portfolio in September last year to 55 bps in March and 64 bps in June.The bank said there was increasing stress among business banking customers in mining regions and in the New Zealand dairy industry.The bank said its cost of funds had increased by ten to 20 bps over the past 12 months. Terms deposit spreads and short-term wholesale funding spreads have both increased this year.