Chief executives of prominent small banks have welcomed Labor's policy backflip to save mortgage brokers but asked it to go further to protect competition, by maintaining bipartisan support for a bill that should trigger new capital raisings to allow mutuals to invest more aggressively to challenge the major banks.

With Bank of Queensland, Bendigo and Adelaide Bank and MyState Bank all reporting soft trading results over the past fortnight, it does not appear the Hayne commission has been the fillip for banking competition some thought it might be. The Customer Owned Banking Association is calling on both sides of politics to continue to drive policy in support of competition, including the Mutual Reforms Bill which will allow mutuals to raise Tier 1 capital to fund growth.