Australia's big four banks should not have to raise additional capital to meet the Reserve Bank's proposed capital requirements, S&P Global Ratings said.
The Reserve Bank is consulting on a proposal to lift the minimum common equity requirement to 16 per cent of risk-weighted assets from 8.5 per cent currentlyfor the four major banks.
As it stands, the equity held by the banks averages about 12 per cent.
The banking sector has put up stiff resistance to the Reserve Bank's proposals, saying the moves will increase the cost of mortgages.
But S&P said the proposals should not impact on the availability of credit.
S&P had previously estimated that the big four need to raise their tier-1 capital by about 47 per cent to achieve a buffer of 1 per cent above the proposed RBNZ capital requirements, creating significant imposts on their Australian parents.
But S&P said it had now assessed the impact of the proposal on the four major banks from another angle -- by taking into account Australian Prudential Regulation Authority's APRA's capital requirements for their subsidiaries in New Zealand.
"On that basis, we estimate that none of the Australian major banks should need to raise additional capital to meet the requirements under the RBNZ proposal," S&P said.
"Consequently, we expect that availability of credit in New Zealand should remain largely undiminished although customer segments that require increased regulatory capital may find it harder or more expensive to obtain funding from banks," it said.
"Also, the four major New Zealand banks' reported return on equity would substantively decline due to the need to hold higher capital at the subsidiary level," S&P said.
The International Monetary Fund said this week that the Reserve Bank's proposals were overdue.
"In general principles, we think the proposal is right. A substantial increase is needed," said Thomas Helbling, division chief in the IMF's Asia and Pacific department.
"The principle of having a substantial increase in capital is commensurate with some of the elevated systemic risk in New Zealand's banking system."
The IMF said those risks are tied to the dominance of the four large banks with similar concentrated exposure to mortgages, business models and funding structures.
The banking community has staunchly opposed the proposals.
Shareholders will not "take this on the chin", Westpac chairman Lindsay Maxsted has said.
The NZ Bankers Association has called on the Reserve Bank to reconsider, pointing to analysis by former Treasury Secretary Dr Graham Scott they could cost households, businesses and our economy around $1.8 billion a year.
Early this month, The Australian quoted Westpac chairman Lindsay Maxsted as saying that his shareholders will not "take this on the chin" - that the outcome will be higher interest rates, less lending, or less investment in New Zealand. "All those things are in play," Maxsted told the paper.
Westpac has estimated the moves could cost the industry $25 billion across five years. KPMG estimates New Zealand banks made a collective net profit of $5.7b last year.
New Zealand's banking system has assets worth $530b.
