There is nothing obvious that will break investors' love of the big banks despite possibly relatively low returns compared with most other shares in the market, according to Nikko Asset Management Australia's head of equities Brad Potter.

He and his fellow analysts at Nikko expect the Reserve Bank of Australia to make at least one cut to interest rates and potentially two before June.

This will depress returns for banks in a competitive market, but share prices should be maintained around current levels as investors will have even more reason to buy banks for their high dividend yields and relatively stable outlook.

The prognosis came as Commonwealth Bank of Australia shares surged and touched $90 for the first time on Friday morning. They closed at $88.76 on Thursday.

Mr Potter said the halving of the oil price, and a lower Australian dollar would also be a "powerful" force driving more dollars into consumers' pockets and ultimately company profits.

"Banks and industrials should [report] high, single-digit earnings-per-share growth," he told Nikko's annual market outlook briefing on Thursday.

This would be a repeat of financial 2014, when bank stocks rise 8 per cent, despite being dragged down by uncertainty over the outcome from the Murray financial system inquiry. Industrial stocks recorded 11 per cent growth, property trusts 27 per cent, while resources declined 16 per cent.

Share prices at the banks have stayed stubbornly expensive as retail and self-managed super fund (SMSF) investors continue to see them as a safe bet.

"Really they are expensive on virtually all measures," he said. "They are overearning quite substantially," with much of it coming from low, bad and doubtful debts rather than loan growth. The paradox, however, is that 40 to 50 per cent of the money flowing into passive or indexed funds finds its way into banks because of their perceived safety and high dividends. Mr Potter could see nothing that would change this.

In December, the Murray inquiry recommended Australian banks be required to raise capital levels to the top quartile globally, and that the biggest banks hold minimum capital levels against mortgages, lowering their earnings and potentially reducing returns to investors.

"Thirty cents in every dollar invested by passive or index funds goes into banks," Mr Potter said.

"Another thing that's been holding up the banks' valuation is the common wisdom that SMSFs are invested in about six stocks -– the banks, Telstra and Wesfarmers. I don't see that changing any time soon," he said.

"That's the paradox. I don't see anything untoward for the banks. There is no big bad debt coming. They just look a bit expensive, but there is good yields and there is a lot of money still going into them.

"So I am not sure what actually cracks the banks – there may just be a relative return [reduction] – the banks may be up 4 to 5 per cent and the market 10 to 11 per cent, rather than any large crash in prices."