Banks are warning they will try to pass on some of the government’s $6.2 billion bank levy to their millions of customers, with Westpac slamming the move as a “stealth tax” that will also hit shareholders and finance workers.

As most bank shares slumped further on Wednesday, Westpac, Commonwealth Bank and National Australia Bank signalled they may defy the government, and attempt to pass on the cost of the levy to depositors and borrowers. ANZ Bank and Macquarie Group – the other banks to pay the tax – said it was too early to determine the financial impact of the 0.06 percentage point tax on bank borrowings.

Market analysts have also suggested banks will be able to partly offset the levy by passing it on to customers, though shareholders will have to wear some of the pain.

After being blindsided by the tax – that the government says will help with budget repair and enhance competition – banks reacted angrily to the levy, which is equal to about 5 per cent of affected banks’ profits.

Brian Hartzer, Westpac’s chief executive, lashed out at the levy by arguing it would affect all bank customers, and that it would hinder efforts to make the banking system more resilient to future financial shocks.

“There is no ‘magic pudding’. The cost of any new tax is ultimately borne by shareholders, borrowers, depositors, and employees,” Mr Hartzer said

Commonwealth Bank chief Ian Narev also said customers, shareholders, or both, would feel the sting from the tax. Senior bank executives will seek further detail from Treasury officials on how the tax will work at a meeting in Sydney on Thursday.

“As with the many recent new regulatory imposts, we need to take some time to work through the implications. This is particularly so, given the lack of detail and the absence of any consultation,” Mr Narev said.

“However, as every business owner or employee knows, every extra cost needs to be borne by customers or shareholders, or a combination of both.”

NAB chief Andrew Thorburn predicted the tax would affect “millions of everyday Australians”, including staff, customers, and shareholders.

“A tax cannot be absorbed. This tax is borne by these people. It is not possible to impose a tax without an impact on people, and therefore the wider community,” Mr Thorburn said.

In a media release, ANZ highlighted the need for banks and Parliament to bridge the obvious divide between them in the long-term interests of the Australian economy.

“While the banking industry has made itself an easy political target, the industry is taking action to significantly improve its relationship with customers and the community.” said ANZ chief executive Shayne Elliott.

“It is now time for all our leaders to move on from populist bank bashing so we can work constructively with Parliament and policy makers on how we can best support the Australian economy.”

Anticipating banks would seek to pass on the levy, the budget included funding for the competition watchdog to run a year-long inquiry into mortgage pricing, and analysts say this extra scrutiny could make it harder for banks to offset the cost.

David Walker, portfolio manager at Clime Asset Management, predicted banks would pass on the levy “eventually”, but it would be tougher for banks to offset than other increases in their costs.

“The political environment for passing on this is more difficult than it is for passing on garden variety increases in wholesale funding costs,” Mr Walker said.

The surprise measure, which will only be paid by the big four banks and Macquarie, is welcome news to smaller lenders, who have long argued they are disadvantaged by the assumption the major lenders are “too big to fail”, which cuts the large banks’ cost of funds.

Shares in Bendigo and Adelaide Bank jumped 3.9 per cent on Wednesday, while Bank of Queensland rose 3.6 per cent and Suncorp was up 2.8 per cent.

Regal Funds Management senior analyst Omkar Joshi said the levy would act as a further drag on banks’ returns, at the same time as revenue growth was weak and banks were being forced to cut costs.

While banks have previously passed on higher costs by pushing up mortgage rates, there is a risk that further rate hikes may pressure some borrowers and lead to higher defaults.

“I think shareholders have to wear some of it. Customers will have to wear some of it, but it’s not something they can simply pass straight through to customers,” Mr Joshi said.

Fitch Ratings said the levy would have a “negative” but “manageable” impact on banks. While the tax would not immediately affect the lenders’ credit ratings, Fitch said it could force banks to compete more fiercely for retail deposits, which are excluded from the tax.

Mr Hartzer acknowledged other countries – such as Britain – had similar taxes on banks but said these were introduced following the global financial crisis, when these governments had taken direct ownership stakes in ailing banks. In contrast, Australia’s banks had their borrowing guaranteed by the government during the crisis.

“No taxpayer funds have been used to prop up the Australian banks. In addition, international jurisdictions that apply measures such as this already have much lower corporate tax rates than Australia – for example, in the UK the corporate tax rate is 20 per cent,” Mr Hartzer said.

CBA shares closed 0.4 per cent lower, Westpac and NAB shares were down 0.7 per cent, and Macquarie Group shares fell 0.6 per cent. ANZ shares bucked the trend, rising 0.8 per cent.