US credit ratings agency out with a report on Australian banks 26 May 2016

  • remain solid but asset quality expected to come under gradual pressure
  • asset quality is expected to gradually weaken from potential further stress in resources-related sectors and regions
  • banks are increasingly well capitalized to absorb any adverse shocks, with majors having raised a little over AUD 19bln of capital in 2015
  • liquidity has stabilized at much higher level, following the implementation of the Basel liquidity coverage ratio

"We expect gradual pressure on asset quality will be exerted by multiple headwinds, even as the declining interest rate environment and stable employment conditions continue to act as factors supporting loan repayments," However, the banks are well capitalized to absorb any losses, and are expected to continue to improve their capital positions further."

"Meanwhile, the increased use of wholesale funding reflects the greater issuance by the banks of longer-dated securities", Their funding mix may also shift further to long-term wholesale debt, as the incoming Basel Net Stable Funding Ratio (NSFR) regime ascribes greater value to debt funding with longer tenors."

Further detail here