Sydney, Feb 25, 2026, 17:07 AEDT — Market closed.
- National Australia Bank finished Wednesday 1.5% higher at A$49.10.
- Australia’s core inflation for January came in above expectations, pushing up the chances for a rate hike in the months ahead.
- Attention shifts to the RBA’s comments expected late Wednesday, with NAB’s May results and dividend schedule also on the radar.
National Australia Bank Ltd finished up 1.5%, settling at A$49.10 after moving in a range from A$48.33 to A$49.12.
Investors responded to a hotter-than-expected January inflation print out of Australia, prompting traders to ramp up bets the Reserve Bank of Australia could hike rates again by May. That’s significant for banks, given their sensitivity to shifts in the rate outlook—it shapes loan pricing, funding expenses and credit appetite.
The consumer price index (CPI) tracks household inflation across the country, while traders keep a close eye on the “trimmed mean” — that’s the version that strips out the sharpest price moves to highlight underlying trends. HSBC chief economist Paul Bloxham pointed out the latest monthly CPI “surprised the market modestly to the upside”, though he emphasized the RBA remains openly skeptical, saying it has “not much faith” in the monthly figure for now. ABC News
Bloxham maintains his main scenario is for the RBA to hike rates in Q3 2026, but he’s not ruling out the chance it happens sooner. Over at Westpac, senior economist Justin Smirk pointed to rents as the major variable, calling attention to his team’s focus: “closely watching rents” for any shift in momentum. ABC News
NAB holders are weighing if higher rates can keep boosting sector earnings, or if they’ll start hurting, as loan growth slows and bad debts creep up. With bank shares already looking pricey after their climb, that trade-off is front and center.
Macquarie and Morgan Stanley analysts are signaling that the big four banks might not deliver the outsized returns investors have enjoyed recently. Price-to-earnings ratios sit near their highest levels in years, and a tighter RBA could trigger sector de-ratings, they say. Both brokers favor NAB, according to the note, but warn that valuations across the banks look fragile if rate expectations climb further.
Here’s the risk: a faster-than-expected economic slowdown, and loan losses could jump from their current lows. Investors, in that case, usually mark down bank earnings. Margin pressure can make a comeback fast, too, as competition on deposits ramps up and squeezes the spread between lending and funding costs.
NAB is scheduled to release its half-year results on May 4, according to the bank’s published dates. The interim dividend goes ex on May 7, with payment due July 2.
Traders are bracing for any hints of change from the RBA ahead of the next ASX session. Governor Michele Bullock is set to speak on Wednesday evening, and eyes are already on the bank’s upcoming decision slated for March 17. Australia’s latest inflation data will follow on March 25.
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