Moody's Investors Service has lowered its outlook on Australia's banks to negative from stable, warning of sluggish profit growth due to slow wage increases, record-low interest rates, strong lending competition and rising household debt.

The agency said the banks, whose credit ratings are among the highest in the world, could be hurt by an increase in problem loans among mining companies and households in mining-dependent states.

Moody's action came after Standard & Poor's in July also placed major Australian banks' AA- ratings on negative outlook, in a signal that a downgrade was possible.

Both agencies rate the banks one rung below the highest, triple-A, investment grade. A downgrade would make financing more expensive for banks at a time when regulators want them to put aside more cash to weather any repeat of the global financial crisis.

Australia's highly profitable "Big Four" banks - National Australia Bank, ANZ Banking Group, Westpac and Commonwealth Bank - emerged from the financial crisis relatively unscathed but are facing questions over their capital levels, slowing earnings growth and rising bad debts.

National Australia Bank, ANZ and Commonwealth acknowledged Moody's action on Friday, but noted in separate statements that the rating agency had reaffirmed their 'Aa2' credit rating.