SYDNEY, July 17, 2026, 09:07 AEST
- Westpac ended the week at A$36.63, rising 1.05% over seven days.
- According to preliminary estimates, two 25-basis point increases would boost annualised NIM by approximately 2 basis points.
- June employment figures are due July 23, with June CPI scheduled for release on July 29.
Westpac Banking Corporation ASX:WBC rose 1.05% over the past week. However, according to Westpac economists, their base case of two rate hikes might recover just half of the recent drop in its core margin.
This is significant since increased rates tend to boost deposit economics. However, Westpac’s disclosures indicate the advantage could materialise gradually.
Every increase of 25 basis points contributes approximately one basis point to the annualised net interest margin. If there are two such adjustments, that would amount to about two basis points, based on an initial mechanical calculation.
Core NIM declined by four basis points to 1.78% during the first half, double the expected increase. Westpac additionally highlights a timing drag of 0.2 basis points for each rate hike.
At 09:07 AEST, the ASX cash market remained in pre-open. Westpac closed on Thursday at A$36.63, gaining 0.14%.
Gains in financial stocks kept the market steady on Thursday, while resource sector declines left the S&P/ASX 200 unchanged at 8,840.70.
| Company or index | July 16 close | Day | Seven-day |
|---|---|---|---|
| Westpac Banking Corporation ASX:WBC | A$36.63 | up 0.14% | gained 1.05% over the week |
| Commonwealth Bank of Australia ASX:CBA | A$173.13 | rose 1.84% | advanced 2.94% for the week |
| ANZ Group Holdings Limited ASX:ANZ | A$36.21 | added 0.72% | improved by 0.95% in the past seven days |
| National Australia Bank Limited ASX:NAB | A$39.76 | increased 1.25% | edged up 0.43% over seven days |
| S&P/ASX 200 | 8,840.70 | unchanged | gained 0.89% in the week |
Westpac outperformed the index by 0.16 percentage points. CBA was the top performer among the banks, climbing 2.94% for the week. The index return is calculated from its closing values on July 9 and July 16.
Westpac reported a statutory profit of A$3.414 billion for the first half, marking a 5% decline from the previous period. Non-AAS profit, excluding notable items, slipped 1% to A$3.483 billion. Revenue decreased by 2%. Pre-provision profit increased by 4%.
Credit costs increased, with the impairment charge rising to an annualised 10 basis points of average loans, compared to four previously. Stressed exposures, however, declined to 1.16% of total committed exposure. Mortgage arrears of 90 days or more stood at 0.57%.
Westpac chief economist Luci Ellis said on July 10 that confidence in an August cash rate hike from the RBA had strengthened. She still expects a second move in September as her main scenario, but noted this is now less certain.
The Reserve Bank of Australia left its cash rate unchanged at 4.35% in June, saying additional rises could still occur if required. With three hikes already implemented this year, financial conditions have tightened.
The initial test next week will be June employment data, set for release on July 23 at 11:30 AEST. The June CPI report comes out on July 29. Both readings arrive ahead of the RBA’s meeting on August 10–11.
Risks: Margins could increase further with quicker deposit repricing or higher loan growth. Conversely, provisions might rise if employment weakens, housing stress intensifies, or another energy shock occurs.
For investors, interest rates alone do not tell the full story. Earnings results are still driven by deposit pricing and credit costs.
