SYDNEY, March 13, 2026, 08:40 AEDT
- Westpac ended Thursday’s session at A$40.54 on the ASX, shaving off 1.19%. 1
- Economists at Westpac, NAB, and CBA have shifted their forecasts, now tipping the RBA for a rate hike on March 17. 2
- Shares are still trading under the A$42.13 all-time high reached following Westpac’s Feb. 13 quarterly update. 3
Westpac Banking Corp dropped 1.19% Thursday, settling at A$40.54. The stock continues to pull back from its all-time high of A$42.13 reached just a month back, as traders braced for another Australian rate increase and dumped shares across sectors, spooked by oil rushing toward $100 a barrel. 1
This drop hits Westpac at a tricky moment. The bank bumped up variable home loan rates by 0.25 percentage point from Feb. 17, following the Reserve Bank of Australia’s recent decision. Consumer boss Carolyn McCann warned the hike could “add pressure to household budgets.” Margins might get a lift if there’s another increase, but borrowers would feel the pinch even more. 4
On Wednesday, economists at Westpac, National Australia Bank, and Commonwealth Bank of Australia switched their forecasts, now seeing the RBA hiking the cash rate March 17. Traders’ bets shifted as well, with pricing reflecting about a 75% chance the central bank will go for a 25-basis-point move—each basis point equaling one-hundredth of a percentage point. 2
Belinda Allen, who leads Australian economics at CBA, put it bluntly: “the balance of probabilities has shifted.” Over at Deutsche Bank, chief economist Phil O’Donaghoe called a rate hike his “base case.” 2
Westpac chief economist Luci Ellis laid it out in a Wednesday note: the bank now sees 25 basis point hikes coming in both March and May, pushing the cash rate up to 4.35%. Ellis argued the RBA will be pressured to respond to oil-fueled headline inflation—even if that surge doesn’t last. 5
New figures out of the bank show household spending is already coming off the boil. Westpac economist Neha Sharma, in a Wednesday note, pointed to a slowdown in quarterly spending growth to roughly 1.0%. Domestic transactions lagged even further, clocking in at 0.7%—their slowest since last May. Sharma flagged the risk of more softening ahead if the RBA delivers another rate hike. 6
Just four weeks back, Westpac was touting strong credit demand as its unaudited first-quarter net profit climbed to A$1.9 billion, fueled by steady gains in both loans and deposits. CEO Anthony Miller sounded upbeat, calling the economic outlook “optimistic.” That same day, the stock surged 2.8% to a record A$42.13—even as the key net interest margin, which tracks the difference between loan income and deposit costs, edged down 3 basis points to 1.79%. Commonwealth Bank, the bigger competitor, had also delivered a record half-year result. 3
The risk swings both directions here. Ellis flagged that if the war wraps up quickly, or if things slow down at home, the March move might not get a follow-up in May. O’Donaghoe, on the other hand, sees a scenario where any intensification of the conflict could force the RBA to hold off. Westpac shares, for now, are straddling the line between those two views as the market looks ahead. 5
Coming up, investors have their eyes on two key events: the RBA’s call on March 17, and Westpac’s March 26 update on its UNITE transformation. Both will signal whether the bank can stick close to last month’s highs as rate conditions get bumpier. 2
