A projected cut in the dividend at National Australia Bank and also Westpac is off the table, for now, according to a report compiled by UBS sell-side analysts Jonathan Mott and Rachel Bentvelzen late last week.The wave in home loan repricing that kicked off before Christmas - and validated over New Year by smaller lenders - was prime factor behind an "improved environment" for Australian banks, the analysts said."The headwinds facing the Aussie banks are well known," Mott and Bentvelzen wrote, yet "many of these headwinds have eased." They listed the mortgage repricing, the pick up in investment property lending, banks becoming "more comfortable" with meeting the net stable funding ratio, a revised view on asset quality (which they said "appears to have stabilised given the bounce in commodity prices and fewer 'single name' impairments" over recent months) and, lastly, a longer timeframe for APRA's consideration of a local version of Basel 4 capital requirements.UBS believes a malleable approach to thinking about industry capital is taking hold among investors."We believe the market now appears overly relaxed on capital. The direction of capital ratios remains higher, only the timing has been pushed out," the UBS analysts wrote. This fosters a rethink on the prior UBS house view of a cut in dividends at big banks."Given the longer time frame until the announcement of higher capital ratios, banks ongoing work to 'optimise' their risk weighted assets and the desire of retail investors to not have their dividends cut, we believe the bank boards are now more likely to look through very high payout ratios and continue to pay elevated dividends."