A correction in bank stocks may have further damage to inflict on share prices as analysts contemplate lowering their earnings projections to capture the toll of official interest rate cuts on bank profits.

The S&P/ASX 200 Financials Index sank 7.5 per cent last week, its worst five-day result since March 2020. Bendigo and Adelaide Bank sank 18.5 per cent, National Australia Bank 14.4 per cent, Westpac 10.6 per cent, Commonwealth Bank 8.3 per cent and ANZ 8 per cent. A correction is defined as a drop of 10 per cent from any peak.