New Zealand's major banks will continue to dominate the domestic market through strong franchises and pricing power. A report by Fitch Ratings' on the banks asserts that they share common rating drivers due to their similar business models. "We believe there is an extremely high likelihood of support from their banks' respective Australian parents, if required, due to closely aligned strategies and management integration," Fitch noted. The agency expects the performance of NZMBs to remain robust over the next 12 months, but the banks will stay challenged by slower profit growth due to intense competition, relatively high household indebtedness, lower fee revenue and high investment in technology and efficiency measures.The capitalisation of NZMBs is sound relative to international peers and is likely to remain stable in the short term. However, Fitch expects higher capital requirements in the longer term following the regulator's review of the regulatory capital framework. "The funding profiles of NZMBs are stable, but are more reliant on offshore wholesale funding relative to global peers, reflecting the lack of deposits in the domestic market," Fitch added.