The budget just wiped another $8 billion in value from Australia's major banks

Photo: Scott Barbour/Allsport

Australia’s major banks extended yesterday’s losses in early trade today with another $8 billion wiped out from their market valuation after the budget last night imposed a levy, which Treasury hopes will raise $6.2 billion over four years.

The slump comes on top of the more than $10 billion market cap loss on Tuesday as speculation on the introduction of the tax grew.

The biggest losers in the federal budget, Australia‚Äôs five largest banks — ANZ, CBA, NAB, Westpac and Macquarie — will likely see their profits eroded by between 2.5% to 6%, along with a drop in return on equity from the levy, bank analysts said.

While they can elect to raise mortgage rates like before to protect margins and profit, this time around it will be difficult. The competition commission will monitor mortgage pricing until mid 2018 and the lenders will need to explain rate movements.

A short while ago, Westpac led today’s losses, dropping 2%. CBA was down 1.7%, ANZ slipped 1.2%, NAB fell 1.8% and Macquarie dropped 1.8%. The benchmark S&P/ASX200 index slid 0.3%

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.