Sydney, Jan 12, 2026, 17:16 AEDT — After-hours
- Westpac edged up slightly, with gains in bank shares pushing the broader market higher.
- The lender introduced a disaster relief package to support customers affected by the Victorian bushfires.
- The sector now looks ahead to rates and a Westpac update due in mid-February as its next hurdles.
Westpac Banking Corp (WBC.AX) shares rose 0.5% to close at A$38.08 on Monday, having fluctuated between A$37.72 and A$38.41 during the session. The stock remains roughly 2% lower year to date in 2026. 1
The shift was minor, but the timing is crucial. Australian bank stocks now serve as a fast gauge for rates, funding expenses, and the intensity of competition among lenders for home loans.
Investors watching Westpac are fixated on just two issues. Will the net interest margin—the difference between what the bank earns on loans versus what it pays on deposits—stay steady? And can bad debts remain under control as budgets get tighter?
The broader market edged higher on Monday. The S&P/ASX 200 closed 0.48% up at 8,759.4. National Australia Bank gained 1.3%, while Westpac, ANZ, and Commonwealth Bank also saw gains. 2
Westpac announced a disaster relief package on Saturday to help customers hit by the Victorian bushfires. The offer includes allowing some home-loan customers to defer repayments for up to three months. “Westpac stands ready to support customers affected by the Victorian bushfires,” said retail banking general manager Damien MacRae.
These packages rarely serve as a clear earnings catalyst right away. Still, they can shift sentiment since deferrals and hardship aid often hint at where arrears may emerge down the line.
Some investors are starting to turn against the big banks. In a Livewire Markets round-up on Monday, Tim Carleton from Auscap Asset Management called the majors a long-standing “cosy oligopoly” and flagged increased competition in the mortgage market. 3
Rates remain a quiet force behind daily trading moves. The Reserve Bank of Australia’s cash rate target, which sets the tone for short-term borrowing, stands at 3.60%. Its next policy decision is due on Feb. 3.
The downside scenario is clear. Should rate expectations shift toward tighter policy, funding costs could climb and loan demand might falter. Lenders chasing volume by slashing mortgage rates risk squeezing margins, even if credit losses stay in check.
