IN TRULY hospitable fashion, the dear old Australian Bankers Association saw fit to describe your correspondent as ''inaccurate'' the other day in response to a story we had penned about bank profit margins.

The critique from the cartel's peak body presented a most fine opportunity. It was akin to a gilt-embossed invitation on designer stationery: ''Dear Sir, you are cordially invited to give us a shellacking at the earliest opportunity.'' The bankers said we had singled out ''covered bonds'' as a source of funding whose ''spread compression'' over the past year had been, in the words of a Westpac note to institutional clients, ''an extraordinary performance''. Our story did not recognise the ''pressures'' in other sources of funding, they said.

Illustration: Michael Mucci.

Indeed this new source of funding, covered bonds, made possible by a kindly and somewhat furtive act of Parliament a year ago, had performed extraordinarily. But so had all forms of funding, be they deposits, hybrids, bonds or cash.

The banks, you see, have a conundrum. They are rolling in it. While they did their usual Oliver Twist routine and held a bit back at every Reserve Bank rate cut over the past year or so, their blended cost of funds has been dropping dramatically. How can they possibly spin it now? It's tough out there? Surely the ''wholesale funding pressures'' line is passe. Surely there is no place to turn but the dependable ''Australia needs a strong banking sector'' angle.