I am currently not holding any positions on Australian banks. My inclination is to be short the banks. With interest rates rising outside Australia and the high level of wholesales funding Australian banks rely on, net interest margins are being squeezed. With the Aussie Dollar rising too, it is hard to see the Reserve Bank raising interest rates just yet - we could even see one more rate cut which is bad for bank margins too. And then I have a wary eye on the property market - if this corrects, banks will be squeezed from asset valuations.
If I could buy put options at a reasonable price and far out enough in time, I would go short that way. Shorting the stock is expensive because of the high dividend yield one has to pay away to the people one borrows stock from