South Australia's decision to introduce a state-based bank levy on the Big Four banks and Macquarie Group means "Pandora's Box is officially open" and other states are likely to follow, banking analysts say.

The introduction of the levy, which comes just a month after the federal government introduced a 6 basis point levy on the same five banks, has been slammed by Commonwealth Bank, Westpac, ANZ and NAB, with ANZ chief Shayne Elliott describing it as an"opportunistic and ill-considered cash grabs".

But UBS analyst Jonathan Mott said the banks are likely to face higher taxes across the banking sector and said the South Australian levy was "an outcome many investors had feared".

The South Australian levy will shave 0.2 per cent off the banks' earnings but the hit could be bigger if other states were to follow. Paul Rovere

"As suspected the recent announcement of the Federal Bank Levy has already led to higher taxes on the banks. This is consistent with experiences overseas, such as in UK where the bank levy was raised on nine occasions," Mr Mott said.

"We believe it is possible the other states may follow SA's lead and introduce further levies on the banks.