Four big Australian banks that are just behind their New Zealand counterpart will have to compete with each other for funds. And all the banks are preparing themselves for the fight as both the countries have to face heavily indebted foreign governments.

This comes even while the banks in question were able to post record profits during 2010 and also showed earnings growth.

Latest financial have shown that Westpac was able to create history in Australia after posting a net profit of A$6.3 billion ($8.46 billion).

Post this, the combined profits of all the four banks went up to A$21 billion in 2010.

As these banks emerge from the economic crisis there has been a decline in bad debts which led to the impressive performance.

But that should not stop warning bells from ringing as experts and analysts believe that funding is going to be a problem because of its rising costs.

This is definitely going to take a toll on the margins the four big banks- Commonwealth Bank of Australia, Westpac, ANZ Banking Group and National Australia Bank.

Besides that, the banks will have to continue to refinance their debt because of higher post-GFC rates.