Sydney, Feb 3, 2026, 17:26 AEDT — Market closed
- Shares of National Australia Bank closed roughly 0.2% higher at A$43.04, slipping back from their peak earlier in the session.
- The RBA raised its cash rate by 25 basis points to 3.85%, shifting the earnings outlook for banks.
- Next up: NAB’s first-quarter trading update arrives Feb. 18.
Shares of National Australia Bank edged up 0.2% to close at A$43.04 on Tuesday, after fluctuating between A$42.93 and A$43.65 during the session. The Commonwealth Bank of Australia climbed 1.1%, Westpac Banking Corporation added 1.0%, and ANZ Group Holdings held steady. The S&P/ASX 200 index ended the day 0.9% higher. (Investing.com Australia)
The late surge is significant as the Reserve Bank of Australia has resumed tightening, lifting its cash rate by 25 basis points to 3.85%—the first increase in two years. The central bank pointed to faster-than-anticipated growth and inflation expected to remain above target for a while. (Reuters)
The question around bank stocks is back: higher rates can boost net interest margins—the difference between loan income and deposit costs—but they also risk pressuring borrowers and slowing credit demand. The RBA, in its latest quarterly policy report, raised growth and inflation forecasts, factoring in 60 basis points of rate hikes this year. It sees trimmed-mean inflation hitting 3.7% by June, with core inflation only easing to 2.6% by mid-2028. (Reuters)
The rate move sent the Australian dollar climbing roughly 0.8%, reaching about 70.05 U.S. cents, according to the Australian Broadcasting Corporation. David Bassanese of Betashares described the hike as “the first and hopefully only rate hike,” while Abhijit Surya from Capital Economics warned that a “far more hawkish” tone could signal additional tightening ahead. (ABC News)
UBS gave NAB a boost on Monday, upgrading the stock to Buy. The bank’s solid hold on business banking and the potential for structural growth in business lending underpin the move. Analyst John Storey and his team said, “This anchors our upgrade to Buy.” UBS also set a 12-month price target of A$47, flagging Tier 1 capital and the business banking loan book’s performance under rising rates as key factors to watch. (Livewire Markets)
Investors now want solid evidence, not just talk. Margins will hinge on deposit pricing and mortgage competition, while cost increases and credit quality will determine how much of the rate boost actually hits the bottom line.
Since the market is closed, the next major event for the stock is NAB’s first-quarter trading update set for Feb. 18, per the bank’s financial calendar. (NAB)
The downside is clear-cut. Should rates climb more quickly than anticipated — hitting small businesses and household budgets hard — bad-debt charges could spike. Any boost to margins might be swallowed up by pricier funding and fiercer competition for deposits.
Traders approach Wednesday juggling two timelines: the rate path outlined in the RBA’s latest forecasts and the Feb. 18 update, where lending growth, margin trends, and early credit stress signals will come under scrutiny.
