Sydney, June 17, 2026, 03:10 (AEST)
- Shares of Westpac Banking Corporation gained 1.22% to A$35.75, topping a steady S&P/ASX 200. Intelligent Investor
- The RBA kept its cash rate steady at 4.35%. The central bank also said another hike is still possible. Reserve Bank of Australia
Westpac Banking Corporation rose on Tuesday as buyers moved back into the big Australian banks after the Reserve Bank of Australia held rates steady. Shares last traded at A$35.75, up 43 cents or 1.22%. The broader S&P/ASX 200 was little changed at 8,917.70, up just 0.04%. Trading stayed choppy, but financial stocks gained with investors seeing the RBA’s pause as short-term relief for banks and mortgage borrowers. Intelligent Investor
Westpac is exposed to rate decisions since banks feel swings in the cash rate in their loans, deposits and credit levels. The RBA kept the cash rate at 4.35% after three hikes earlier this year, warning inflation is still high and rates may need to rise again. Higher rates can help net interest margin—what banks make on loans versus pay on deposits—but can pressure borrowers and push up bad debt risk if growth stalls. Reserve Bank of Australia
Westpac economists pointed to another rate hike as a risk for markets. Chief Economist Luci Ellis said after the move the RBA had “explicitly signalled that further hikes remain on the table.” She said Westpac still sees more cash-rate rises ahead if trimmed mean inflation holds up. That outlook sends mixed signals for investors—a higher rate can boost bank revenue, but it also means weaker credit growth and more stress on households. WestPacIQ
Westpac’s bull case is built on its dividend and some ongoing operating strength. The bank reported a half-year net profit of A$3.5 billion, excluding notable items. It kept its interim dividend at 77 cents per share. CEO Anthony Miller called it “solid operating momentum.” The payout is set for June 26. But the next major event is Westpac’s third-quarter update on August 10, when investors will watch for new numbers on margins, loan growth, costs and credit quality. Westpac
Westpac’s valuation is under the microscope. Shares are up from their recent lows, but analyst sentiment is still cautious. Investing.com data lists a “Sell” call from 14 analysts, with a 12-month price target averaging A$33.45—that’s below where the stock trades now. This doesn’t put Westpac out of reach for investors focused on franked dividends, but it does mean the stock screens as fully valued or a little risky, not cheap. The main question for the bank now: can it hold margins and keep a lid on bad debts if the RBA goes for another rate hike over a long pause? Investing
