Westpac Banking Corporation shares are heading into Christmas with two storylines pulling in opposite directions: a strong run over the past year that has lifted the stock toward the top of its 52‑week range, and a drumbeat of analyst caution that—on average—still points to downside from current levels.
Because Christmas Day (25 December) is a public holiday in Australia, the latest “today” price context for Westpac (ASX: WBC) is anchored to the last ASX close before the holiday break. Westpac ended that session at A$39.14. [1]
Below is what’s driving Westpac stock as of 25.12.2025, based on the most recent company updates, market reporting, and current consensus forecasts.
Westpac share price today: where WBC stock sits heading into the Christmas break
Westpac shares last closed at A$39.14 (ASX: WBC). [2]
On a trailing basis, the stock has delivered a strong 12‑month move (FT data shows a +20.69% one‑year change). [3]
The broader market backdrop going into the holiday shutdown was mixed. On the final session before the break, Australia’s ASX 200 slipped to 8,763 in thin trading ahead of the four‑day market pause, with big banks among the drags cited in market coverage. [4]
For global investors, Westpac also trades in the US via ADRs (NYSE: WBK), but the primary price discovery is still on the ASX for most institutions tracking the name. [5]
The FY25 result set the baseline for Westpac stock (and for analyst models)
Westpac’s most important “anchor” for valuation heading into 2026 remains its FY25 full‑year result (year ended 30 September 2025).
Reuters reported that Westpac’s net profit after tax slipped to A$6.99 billion (down from A$7.11 billion), while also beating Visible Alpha’s A$6.83 billion consensus estimate. [6]
Operationally, the release highlighted several investor‑sensitive data points:
- Net interest margin (NIM) edged down 1 basis point to 1.94%, underlining the intensity of competition in mortgages and deposits. [7]
- Operating expenses rose 9% to A$11.9 billion, inflated by one‑off restructuring costs alongside ongoing tech/transformation spend and wage growth. [8]
- Asset quality indicators improved: 90‑day+ home‑loan arrears fell to 0.83% from 1.05%, and the share of loans showing “stress” eased to 1.36% of total lending. [9]
- The home‑lending book was reported at A$497 billion, up 5% year‑on‑year. [10]
Westpac also signaled a macro‑aware stance on growth, saying it expected credit growth to moderate through 2025 before stabilising in 2026, while noting strong employment and accumulated savings were helping to limit arrears and defaults. [11]
For investors, the subtext is clear: the “bad debts spike” narrative never really arrived in force in 2025—but margin pressure and cost inflation are doing their own slow, grinding kind of damage to bank‑stock enthusiasm.
Westpac dividend: what income investors just got paid (and what it implies)
For dividend‑focused holders, Westpac’s FY25 outcome included:
- A final dividend of 77 Australian cents per share, with the full‑year dividend at A$1.53 (Reuters reported a 76% payout ratio, slightly higher than the prior year). [12]
- Westpac’s own dividend disclosure shows the final ordinary dividend was paid on 19 December 2025, and it was 100% franked. [13]
Using the FY25 full‑year dividend (A$1.53) against the last close (A$39.14) implies a rough trailing cash yield of ~3.9% (before considering franking credits). The franking component can materially change the effective yield for eligible Australian taxpayers, but the market tends to debate “dividend sustainability” in cash terms first, then taxes later. [14]
Westpac also published details of its DRP mechanics: the plan price was set using a 15‑trading‑day VWAP period beginning 12 November 2025, with no discount, producing a DRP market price of A$38.09. [15]
Interest rates are the gravity well: why the RBA path matters so much to WBC
Bank earnings are basically a “rates and credit” business with extra steps. That’s why Westpac stock is highly sensitive to any shift in expectations around the Reserve Bank of Australia (RBA).
Two late‑December signals matter as investors process Westpac’s outlook into 2026:
1) Westpac economics reportedly pulled back on rate‑cut expectations
An ABC markets live blog reported that Westpac backtracked on its forecast of two cuts and was now forecasting the RBA to stay on hold through 2026—part of a broader scramble among major bank economics teams to update cash‑rate calls ahead of next year. [16]
2) The RBA itself kept the “next move could be up” framing alive
Reuters reported that RBA board minutes indicated members saw a risk the next rate move could be a hike in 2026, with the cash rate held at 3.60% and policymakers watching for whether inflation declines as forecast. Reuters also flagged key upcoming macro milestones: Australia’s quarterly CPI due 29 January, then the RBA decision on 3 February. [17]
For Westpac shareholders, the practical translation is this:
- Higher‑for‑longer rates can support asset yields, but they also raise competition for deposits and can squeeze NIM if banks have to “pay up” for funding.
- A hold‑through‑2026 scenario can reduce the immediate fear of a sharp credit deterioration, but it can also keep mortgage volumes and consumer appetite more subdued—especially if real incomes don’t improve.
This is one reason “resilient earnings” and “margin pressure” keep showing up in the same analyst sentences. They’re both true at the same time, which is maddeningly on‑brand for banking.
Governance, scams, and regulation: the non‑NIM headlines investors can’t ignore
Westpac’s stock narrative isn’t only mortgages and margins. Several headline risks and reputational themes remain current going into 2026.
AGM vote protest and scam-prevention spending
Reuters reported that Westpac director Peter Nash was reelected, but about 40% of investors voted against his reelection amid backlash over his ties to the ASX during a period of operational/regulatory upheaval. [18]
In the same AGM reporting, Reuters said CEO Anthony Miller urged stronger action from social media firms (including Meta) to curb scams, stating Westpac had spent more than A$500 million over the past five years on scam and fraud prevention. [19]
Why does this matter to stockholders? Because scams are not just a PR problem—they can become a cost line, a regulatory flashpoint, and a customer churn issue.
A court penalty tied to RAMS home‑loan misconduct
Reuters reported that Australia’s Federal Court imposed a A$20 million (US$13 million) penalty on Westpac unit RAMS Financial Group over misconduct in arranging home loans, including use of falsified payslips and issues involving unlicensed referrers. Reuters also reported Westpac said the penalty was provisioned and included in its FY25 half‑year results. [20]
Capital relief from APRA
On the capital side, Reuters reported that APRA removed a A$500 million capital add‑on that had been in place since 2020; Reuters said Westpac estimated its CET1 ratio would increase by 17 basis points due to a A$6.25 billion reduction in risk‑weighted assets. [21]
Capital matters because it shapes the room Westpac has for dividends, buybacks, and balance‑sheet growth—even if the bank’s management remains cautious.
Westpac stock forecast: what analysts are projecting as of 25.12.2025
Here’s where the story gets spicy: Westpac shares are near the upper end of the past year’s trading band, yet consensus targets still sit below the market.
Consensus rating and price target
Investing.com’s consensus snapshot (polling the prior three months) shows:
- Overall consensus: “Sell”
- 0 Buy, 5 Hold, 8 Sell
- Average 12‑month price target: 33.928 (listed as ~‑13.32% downside)
- Target range shown: low 30.5, high 40, with 13 analysts cited [22]
MarketScreener’s consensus figures align closely, also listing an average around A$33.93 with an “Underperform” view and a similar A$30.50–A$40.00 spread. [23]
A key broker move: JPMorgan upgrades to Neutral
One widely circulated broker note came from JPMorgan, reported by Investing.com: JPMorgan upgraded Westpac from Underweight to Neutral and raised its price target to A$36.00 from A$30.80. [24]
That report also flagged the tug‑of‑war inside the model:
- JPMorgan sees more severe NIM pressure than peers over the next 18 months due to faster “earn‑through” of the higher‑rate environment. [25]
- At the same time, it framed sector earnings resilience as attractive relative to tougher conditions elsewhere, while acknowledging Westpac was “by no means cheap” at about 19x FY26 estimated P/E (per the report). [26]
In plain English: the market is paying up for stability, but analysts don’t love paying up for stability when the medium‑term earnings growth outlook is muted.
What to watch next for Westpac (ASX: WBC) as 2026 begins
With Christmas Day here and markets paused, the next “tell” for Westpac stock will come from a familiar set of catalysts:
1) The next Westpac results date
Westpac’s investor calendar lists First Quarter Results on 13 February 2026. [27]
For bank stocks, quarterly updates are less about headline profit and more about: margin trajectory, arrears, cost discipline, and mortgage competition.
2) RBA + inflation data
The late‑January CPI print and early‑February RBA decision are likely to be market‑moving for all the big banks, particularly if “hold” turns into “hike risk” again. [28]
3) Mortgage competition and channel mix
Westpac has been explicit about the intensely competitive home‑loan market and its desire to improve service and adjust channel mix (including efforts to reduce reliance on brokers to lift margins), per Reuters reporting around the FY25 result. [29]
4) Capital management and “surplus” debate
APRA’s removal of the capital add‑on adds oxygen to the “could Westpac return more capital?” discussion—though actual decisions depend on management posture, credit outlook, and regulatory mood. [30]
Bottom line on 25.12.2025: Westpac stock is priced for stability—analysts want a better entry point
As of 25 December 2025, Westpac (ASX: WBC) is in a classic bank‑stock standoff:
- The share price is strong versus a year ago, and the dividend remains meaningful. [31]
- Credit quality metrics reported for FY25 looked steadier than many feared, but margin and cost pressure remain central risks. [32]
- Meanwhile, consensus price targets (around A$33.93) imply downside versus the last close, even as some brokers have moderated earlier bearish calls (e.g., JPMorgan’s move to Neutral). [33]
- Macro uncertainty is still the boss fight: Westpac economists shifting to a “hold through 2026” call sits alongside RBA minutes that keep “next move could be up” on the table. [34]
References
1. markets.ft.markitdigital.com, 2. markets.ft.markitdigital.com, 3. markets.ft.markitdigital.com, 4. www.abc.net.au, 5. www.investing.com, 6. www.reuters.com, 7. www.reuters.com, 8. www.reuters.com, 9. www.reuters.com, 10. www.reuters.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.westpac.com.au, 14. www.reuters.com, 15. www.westpac.com.au, 16. www.abc.net.au, 17. www.reuters.com, 18. www.reuters.com, 19. www.reuters.com, 20. www.reuters.com, 21. www.reuters.com, 22. www.investing.com, 23. www.marketscreener.com, 24. www.investing.com, 25. www.investing.com, 26. www.investing.com, 27. www.westpac.com.au, 28. www.reuters.com, 29. www.reuters.com, 30. www.reuters.com, 31. markets.ft.markitdigital.com, 32. www.reuters.com, 33. www.investing.com, 34. www.abc.net.au
