Sydney, February 27, 2026, 17:03 AEDT — After-hours
- Westpac ends lower on the day, even as the broader market notched another record close.
- Interest-rate expectations are back driving the tape for big banks.
- Next catalysts include Australia’s GDP data next week and the RBA’s mid-March policy decision.
Westpac Banking Corp (WBC.AX) shares ended Friday down 0.4% at A$42.54, after trading between A$43.08 and A$42.44. About 7.2 million shares changed hands. 1
The dip came as Australia’s S&P/ASX 200 closed up 0.25% at 9,198.60, a record, but traders stayed jumpy about where rates land and how long they stay there. AMP’s Shane Oliver said, “The rotation from tech to non-tech continues,” and the blog flagged Australia’s fourth-quarter GDP numbers on March 4 as the next big domestic read. APRA figures showed household deposits at authorised deposit-taking institutions (ADIs) hit a record A$1.72 trillion in January, a datapoint banks watch closely when funding gets competitive. 2
The rate argument sharpened this week after January inflation held at 3.8%. Paul Bloxham, HSBC’s chief economist for Australia and New Zealand, said “the monthly trimmed mean showed still-strong underlying inflation” — the trimmed mean is a gauge that strips out the biggest price swings to track underlying pressure. 3
Reserve Bank of Australia Governor Michele Bullock urged patience, saying policy calls were harder with the economy “close to balance” and inflation high but not accelerating. The same data pushed markets to narrow the odds of a May hike, Reuters reported. 4
Currency markets have moved with the same theme. The Australian dollar is up more than 6% so far this year and has been the best-performing G10 unit, helped by expectations the RBA stays hawkish — leaning toward higher rates, Reuters said. Carol Kong, a currency strategist at Commonwealth Bank of Australia, said it was “conceivable” the Aussie could add “one or two more” U.S. cents, and she expects only one more 25-basis-point hike this year; a basis point is 0.01 percentage point. 5
Offshore, the mood has been less settled. Reuters flagged fresh caution around high valuations in AI-linked tech stocks and lingering Middle East tensions, and Westpac Group senior economist Mantas Vanagas wrote that “AI and geopolitics remained front and centre for financial markets.” 6
For Westpac, the near-term trade still reads like a rates proxy. Higher rates can widen net interest margins — the spread between what a bank earns on loans and pays on deposits — but they can also cool credit demand and lift stress in weaker pockets of the book.
Investors also keep an eye on the plumbing: deposits, pricing, and whether banks have to pay up to hold funding as households shift cash around. A savings pile can help, right up until it forces a price war.
But the setup is fragile. A soft GDP print, or a sudden global risk-off turn, can hit bank stocks quickly by reviving worries about slower growth and higher loan losses.
The next hard marker is the RBA’s March 16–17 meeting, with the decision due at 2:30 p.m. on March 17 and a media conference at 3:30 p.m. 7
