The Globe and Mail reports in its Friday, July 17, edition that the big banks have cut their prime lending rates by a total of 0.3 percentage point (or 30 basis points) this year, trailing the Bank of Canada's 0.5-percentage-point cut to its key interest rate over the same period. The Globe's David Berman writes that for the banks, moving out of step with the BOC is likely a good thing. He says due to falling interest rates and a flat yield curve, the banks have been struggling in recent years to generate much of a spread between their borrowing costs and their lending profits. This net interest margin, or NIM, is currently hovering around 2.5 per cent for personal and commercial banking operations, falling from more than 3 per cent a decade ago. Shrinking margins can put pressure on bank profit, especially when growth in consumer credit is also subsiding. However, with the banks now taking the BOC rate cuts as more of a guideline than a directive, their margins may be about to improve, says RBC analyst Darko Mihelic -- especially when the BOC starts raising rates. Mr. Mihelic sees banks boosting their NIMs by an average of five basis points next year.