Clients interest rate agreed on Loans incl. the Costs of funds for the Bank and the Margin. This should reflect the Borrowers risk (usually derived per internal Bank rating scale and transformed into Probability of Default) and received collateral for this financing (materialized through Loss-given Default). The Margin is main element for generating the interest revenues for the Bank, except for other cross-sells benefits.  So therefore, it is subject to tough negotiations with Client in order to come-up with better (lower) pricing for Borrower and to win the deal over the competing banks.