Sydney, Jan 14, 2026, 17:41 AEDT — After-hours
Shares of Westpac Banking Corp (WBC.AX) slipped 0.6% to close at A$38.28 on Wednesday, dragging along Australia’s major banks despite the broader market holding firm. Commonwealth Bank (CBA.AX) dropped 1.3%, National Australia Bank (NAB.AX) slid 1.1%, and ANZ Group (ANZ.AX) lost 0.3%.
This matters since banks straddle the divide between inflation pressures and consumer demand. Even minor tweaks to interest-rate outlooks can quickly reshape forecasts for lending growth, loan quality, and funding expenses.
A Westpac-Melbourne Institute survey revealed consumer sentiment dropped 1.7% in January to 92.9, slipping below the 100 mark and indicating more pessimists than optimists. Westpac economist Matthew Hassan pointed to “a sharp turn in interest rate expectations” as the key driver. After three rate cuts last year brought the Reserve Bank of Australia’s cash rate to 3.6%, the RBA has hinted the easing phase might be over. Meanwhile, Commonwealth Bank and NAB have both suggested a rate hike could come as soon as next month. (Reuters)
The S&P/ASX 200 inched up 0.1% to 8,820, ABC’s market blog reports. ANZ Research maintains its view that the cash rate will hold at 3.60% “for an extended period,” though it warns the “risks of a rate hike in early 2026 have risen.” (ABC)
Energy shares supported gains in the benchmark while banks slipped. Westpac fell roughly 1.7% by mid-afternoon, with the financials sector down 1.29%, according to Market Index data, though late buying narrowed those losses. (Market Index)
Westpac’s high-frequency card data showed consumers were still spending, though there was a noticeable dip around year-end. In a Jan. 13 Card Tracker note, Hassan pointed out the weekly index hit a record but probably “overstates strength” due to tricky seasonal adjustments during Christmas and New Year. Card activity climbed 2.3% in the December quarter, pushing annual growth up to 7.2%. (Westpaciq)
That said, bank bulls face the danger that “rate jitters” turn into a full-blown tightening cycle. Rising mortgage rates could pinch borrowers, drag down credit growth, and push up bad debts—despite a temporary boost to margins.
The next local inflation figure is just around the corner. The statistics bureau will release its full monthly consumer price index for December on Jan. 28 — a report that could shift market expectations for the next cash rate move. (Australian Bureau of Statistics)
Next up is the February policy meeting. The RBA will announce its monetary policy decision on Feb. 3 at 2:30 p.m. AEDT, a crucial moment for bank stocks like Westpac as February kicks off. (Gov)
