Financial analysts at Macquarie have kept their ‘underweight’ rating on the Australian bank sector, citing continuous revenue and expense challenges.

They note that ANZ Group (ASX:ANZ) and Westpac continue to grow their share of the mortgage market, while Commonwealth Bank of Australia (ASX:CBA) has seen a decrease in its mortgage market share.

Macquarie also commented that the mortgage spreads remained stable, with Westpac posing as the most competitive.

One of the major challenges to the banks' profit margins in fiscal 2024, according to Macquarie, is the tough competition in the deposit arena and a changing mix.

They also foresee ongoing revenue challenges due to margin compression on both mortgages and deposits.

At present, the local financial sub-index is showing a decrease of 0.9%.

ANZ Group (ASX:ANZ), as part of Australian banking sector, is a public company that provides a variety of banking and financial products and services.