Sydney, March 5, 2026, 17:24 (AEDT)
- Australian stocks ended a two-session losing streak, with Westpac climbing 0.9% in afternoon trade.
- Australia’s economy expanded 0.8% in the fourth quarter. Households, though, put more into savings, so the rate debate isn’t settled yet.
- Westpac economists pointed to a packed March, with fresh inflation numbers and an RBA call both on the docket.
Westpac Banking Corp (WBC.AX) picked up 0.9% to A$41.50 by 3:30 p.m. AEDT on Thursday, with the S&P/ASX 200 up 0.48% at 8,944 and on track to break a three-session losing streak. National Australia Bank advanced 1.59%. 1
This shift is significant—Australia’s heavyweight banks anchor the market. Their movements tend to drag the index along for the ride.
Investors are eyeing the next move for interest rates. For banks, there’s a chance of fatter net interest margins—essentially, pocketing more from loans than they shell out for deposits—if rates climb. That edge, though, depends on borrowers sticking around.
Australia’s economy expanded 0.8% in the December quarter, with annual growth hitting 2.6%—the fastest clip in nearly three years. The household saving ratio edged up to 6.9%, according to Wednesday’s data. “While stronger growth may seem like positive news, the result will be a concern” for the Reserve Bank of Australia, Deloitte Access Economics partner Stephen Smith said. IG’s Tony Sycamore saw it differently: the data, he noted, suggest “Aussies are channelling extra income into savings rather than spending.” 2
Westpac economist Illiana Jain, in a morning note, pointed out the national accounts are backing up the view that the economy’s moved into its upswing phase. Still, she highlighted an unexpected slowdown in consumer spending for Q4. Improved risk appetite overseas, the note added, is likely to feed through to Australian trade. 3
Westpac’s economists pointed to a packed March line-up: the Reserve Bank’s policy decision comes March 17, followed by February’s labour force numbers on March 19, and the monthly CPI release set for March 25. The calendar also features the Westpac–Melbourne Institute consumer sentiment survey on March 10.
Westpac, holding the spot as Australia’s third-biggest bank by market value, posted an unaudited net profit of A$1.9 billion for the first quarter in February. The results were fueled by A$12 billion in fresh deposits and A$22 billion in new lending, but the core net interest margin edged down three basis points to 1.79%. “We are optimistic on the outlook for the economy and expect demand for both business and household credit to remain resilient,” chief executive Anthony Miller said. 4
Banks remain locked in a race for home loans and deposits, and aggressive pricing isn’t letting up just because growth stays solid. Westpac, for its part, will be watching the next jobs and household spending numbers just as closely as the headline GDP figure.
Risks are tangled up this time—households face higher rates and rising fuel costs, and bad debts, once low, start inching higher. Should that play out, banks might see earnings stall, loan books notwithstanding.
Westpac wraps up its financial half-year on March 31, and the bank’s financial calendar pegs May 5 for both interim results and a dividend call. 5
Right now, it’s the rate path and consumer pullback—same focus as earlier in the week. Westpac is caught right between those two themes.
