The head of Australia’s largest regional lender says current banking regulations have left it “having to fight with one hand tied behind our back” compared to the big four banks.

Bendigo and Adelaide Bank chief executive Mike Hirst says regulations put in place since the global financial crisis have put smaller lenders at a disadvantage compared to their larger counterparts.

“Size is a powerful ally in any endeavour. In banking in Australia it provides larger players with funding and regulatory advantages that ultimately restrict consumer choice,” he told shareholders at the bank’s annual general meeting on Monday.

“It should be obvious that the impost of regulation is more acute the smaller an institutions is, simply because there is a certain fixed cost of regulation that is diluted depending on how many transactions it is spread across”

His statements were backed by the bank’s chairman Robert Johanson, who said regulations that required banks to hold greater levels of capital and imposed more stringent controls on deposit takers had led to a greater concentration in the financial services sector.

“The position of the major banks is now quite dominant even as they compete vigorously between themselves,” he said.

“They enjoy some very significant competitive advantages.”

Mr Hirst said he hoped the Abbott government’s planned financial services inquiry would consider ways to level the playing field for smaller lenders.

He said the review could consider providing “a hierarchy of priorities” for regulations to ensure banking resources were best targeted to address the greatest problems.