State-run banks remained under stress in the December quarter as high interest rates and the economic slowdown continued to bog down corporate borrowers. While this led to a deterioration of the banks' asset quality, higher provisioning expenses and muted loan and deposit growth impacted profitability. Five of the biggest state-controlled lenders — State Bank of India, Bank of Baroda%, Punjab National Bank, Canara Bank and Bank of India — together witnessed a 14 per cent growth in loans and 13 per cent growth in deposits in the third quarter. The net interest margin, the yield on advances over cost of deposits, declined about 30 basis points, compared with the year-ago period.

Source - http://economictimes.indiatimes.com