He reportedly added that consolidation among local banks would not progress unless second-tier players merge to create a new pillar to challenge the so-called Big Four banks. Competition policies prohibit the big four from merging with each other.

At the height of the global financial crisis, investors had scrambled to help Australian banks cut their exposure to offshore funding. Norris said this is starting to wane.

"There's a pool of hot money that churns through the banks and, in the end, materially does not change any bank's market share position," he was quoted to have said.

CBA uses deposits to support 58 to 59 of its loan book. Norris said that that the bank expects credit demand to rise towards the end of 2010 as the Australian economy picks up.