Three of the country’s four largest banks are on track to disappoint when they give financial updates next month, with profit margins set to tumble further as they refinance $100 billion of ultra-cheap funding, brokers at Citi have warned.

The Reserve Bank handed out some $188 billion in cheap financing to lenders from 2021 to 2022 to boost credit access and bolster the economy during the COVID-19 pandemic. Interest on the facility was pegged at the cash rate, fuelling an intensely competitive period as the banks battled to win customers while their funding costs were low.