Ratings agency S&P Global said New Zealand’s four major Australian-owned banks would continue to dominate the local banking industry, regardless of any initiatives stemming from the Commerce Commission inquiry.

The major banks are well positioned to sustain their superiority, S&P said.

“This is despite the subdued operating and lending environment, which nevertheless remains competitive, particularly around mortgage pricing,” the agency said.

The CBA-owned ASB, NAB-owned Bank of NZ, Westpac and ANZ - have a combined market share of more than 85 per cent.

S&P said New Zealand banks’ profitability supports the stability of the country’s financial system.

“Any initiatives introduced by the competition regulator as part of a recently established inquiry will not materially affect the major banks’ market positions nor their profitability,” S&P said.

In June, the Government announced that the Commerce Commission would look into the banking sector, with a focus on profits and fees, after calls from the National Party, the Green Party, and the Reserve Bank.

New Zealand’s banks made a record $7.18 billion last year - a net profit after tax that was $1b higher than the year prior, according to KPMG’s Financial Institutions Performance Survey.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.