Claims about higher funding costs by Australia’s big four have met with scepticism from an unlikely source - a large French bank, Societe Generale.

Tokyo-based Societe Generale Asia Pacific head of interest rate strategy Christian Carrillo said it was "almost mathematically impossible" that total funding costs for Australian banks were rising, as the sector argued this month, using it as a motive to lift mortgage rates independently of a Reserve Bank.

"The claim that the recent increase in mortgage rates is due to higher funding costs is very dubious" ... Christian Carillo. Illustration: Karl Hilzinger

"The claim that the recent increase in mortgage rates is due to higher funding costs is very dubious," he said in a research note. "The mortgage hikes seem aimed at protecting their high profit margins."

Australia's major banks have lifted mortgage customers by between 6 and 10 basis point after the RBA shocked the market earlier this month by keeping the cash rate at 4.25 per cent. The banks have insisted that the cost of funds needed to keep lending into the economy were rising, driven in part by the volatility associated with the European debt crisis. The unpopular out-of-cycle rate rises followed announcements of job cuts by ANZ Bank and Westpac, further inflaming opinion about the banks.