Funding metrics for the "Big Four" Australian banks are expected to stabilize after over a decade of improvement, Fitch Ratings said in a report on Tuesday.

The four major Australian banks are Australia and New Zealand Banking Group (ASX:ANZ, NZE:ANZ), Commonwealth Bank of Australia (ASX:CBA), National Australia Bank (ASX:NAB) and Westpac Banking (ASX:WBC, NZE:WBC).

The proportion of deposits at the banks rose to around 65% to 75% of total funding from around 50%, resulting in a large drop in the loan/customer deposit ratios.

The banks continue to rely on offshore wholesale funding markets to make up much of the deposit funding shortfall, which is expected to be more expensive during periods of stress compared with domestic market funding.

The liquidity coverage ratios and net stable funding ratios of the four banks are expected to normalize after being elevated since 2020 due to central bank funding programs. The banks' strong domestic franchises also bolster their funding resilience during periods of stress.

The funding and liquidity score of "a" for all four banks remains the weakest aspect of their standalone credit profiles, the ratings firm added.