Australia's major banks, many of which own New Zealand's banks, face increased risks and bad debts, a global ratings senior analyst warns.
Fitch ratings director Andrea Jaehne said the lack of competition in Australasian banking could allow the big four banks to mitigate their rising risks by gouging customers more.
She said she would not call Australia's banking system safe and solid.
The banks' grip on about 79 percent of residential loans in Australia gave them extremely good pricing power and the leverage to simply raise mortgage rates or fees, or cut deposit rates, if they got into some financial trouble.
Fitch's latest peer review canvassed several rising risks for the Australian banks, led by the prospect of a hard landing for China's economy.
The big four banks include National Australia Bank (NAB), Commonwealth Bank (CBA), Australia and New Zealand Banking Group (ANZ), and Westpac (WBC).