Way back in 1999, National Australia Bank shares soared through the $30 mark and its market capitalisation was more than double its Big Four rivals.

Today, the stock touched a seven year low of $25.36 after Friday’s extraordinary 13% slump following that shock $830 million provision on CDO exposures. Angry analysts are waiting for CEO John Stewart to be shown the door and some investors in last week’s bond issue want their money back.

By midday, NAB shares were down another 55c at $26.01, but it was fellow Melbourne-based Big Four bank ANZ which stole all the headlines this morning with this four page press release and eight page trading update which amounted to yet another profit downgrade.

The market slaughtered the stock by 13.2% at one point before it stabilised to be 10.3% weaker for the day at $15.82.

Whilst NAB got crushed for coming back with a much bigger write-down two months after the first crack, this is the third time ANZ has fronted investors reaching an overall increase in bad debt provisions for the year of $1.6 billion. No wonder the stock has now halved from the peak last October.

There was this two page effort on April 7 and the following four pages on February 18. After 10 months in the job, CEO Mike Smith clearly needs to get a grip of the mess he inherited from John McFarlane who had never even heard of Opes Prime, even though at one point the exposure peaked at $1.9 billion, making it the bank’s second biggest loan after BHP-Billiton.

That’s five different downgrade announcements in Melbourne from NAB and ANZ over the past six months and not a peep out of Sydney from Westpac and Commonwealth Bank, which clearly have far superior risk management and financial comprehension skills.

Melbourne has long surrendered the title of Australia’s financial capital to Sydney, but these are dark days for the southern capital.

Based on Friday’s closing prices, CommBank’s market capitalisation of $57.35 billion was a record $12.4 billion more than NAB’s $44.95 billion.

Indeed, NAB was desperately close to slipping to number three as Westpac was capitalised at $41.85 billion on Friday and based on St George’s value of $15.3 billion, even after today’s 6% slide, if the merger proceeds it will be line ball with CommBank at the top.

Having almost gone broke in 1992, the Westpac recovery is an extraordinary story, but the emerging picture will be of two dominant and well run Sydney-based banks and two smaller accident prone Melbourne rivals.