Investment support for listed Australian banks is wavering as equity analysts continue to talk down the near-term growth prospects of the sector.Morgan Stanley analysts Richard Wiles and Andrei Stadnik this week confirmed their negative outlook on the industry, arguing there was little valuation support for the major banks and regionals.The analysts are recommending that institutional clients reduce their exposures to CBA, NAB, Bendigo Bank and Bank of Queensland."We have a negative stance on the major banks as they have come to the end of a super cycle and now face a difficult transition, which features a combination of both operating headwinds and regulatory risks," they told clients in a research update."We see fundamental change in the mortgage market, modest growth prospects, downward pressure on returns, weaker capital generation, elevated payout ratios and increased political and regulatory scrutiny."In our view, there is little valuation support and we expect structural and cyclical headwinds to returns on equity and growth to drive a further de-rating."Wiles and Stadnik observed that CBA had not generated earnings per share growth since 2014 and they expect that trend to continue over the next two years.They suspect CBA scrip could soon suffer another de-rating due to lower housing growth and a lack of strategic clarity within the bank.Morgan Stanley is even more downbeat about the earnings outlook for National Australia Bank."We believe NAB's business mix, reinvestment burden, elevated payout ratio and below-peer capital position leave it vulnerable to the operating and regulatory challenges for Australian banks," clients were told."Re-rated trading multiples are hard to justify given weak revenue and earnings growth and a falling return on equity."Regional banks are unlikely to benefit from the problems weighing on CBA and NAB.Wiles and Stadnik are particularly downcast about Bank of Queensland's earnings prospects, which is currently trading on a multiple of eleven times forecast earnings."We believe the margin tide is turning and Bank of Queensland is particularly exposed," they told clients."Capital looks strong, but the need to invest in digital and uncertainty on final capital requirements reduces the scope for capital management."Trading multiples are not cheap."The analysts are less bearish about ANZ, which they say has more scope than its peers to navigate the challenges facing the sector."It offers a more diversified business mix, a commitment to lower costs, an improved risk profile, ongoing capital management options … and below-peer trading multiples," they said.Morgan Stanley expects margin contraction to emerge as a dominant theme in the sector over the next two years.They expect the average net interest margin for the major banks to slide below two per cent in 2019.NAB's margin is expected to deteriorate the most. Morgan Stanley expects the bank's NIM to taper from the 1.87 per cent level reported for the March half to 1.82 per cent by the end of September next year.