Westpac share price today (ASX: WBC): RBA minutes reshape rate outlook as buyback, dividend and analyst forecasts collide

Westpac Banking Corporation shares were higher on Tuesday as Australia’s big banks helped lift the broader market into a pre‑holiday rally. By mid‑afternoon AEDT, Westpac (ASX: WBC) was up about 1.2% to around A$39.21, broadly in line with a strong session for the ASX 200.

But the day’s bounce is only the surface story. Underneath it sits a busier mix of catalysts investors are weighing as 2025 closes out: a central bank that’s sounding less “cut-friendly” than markets once hoped, an on‑market buyback still chewing through shares, a fully franked dividend that keeps yield hunters interested, and a set of analyst targets that—on average—sit below where the stock is currently trading.

Here’s what’s driving Westpac stock on 23 December 2025, and what investors are watching next.

Westpac stock rises with the banks—while rate expectations shift again

The immediate price action on Tuesday looked like a classic “banks lead, index follows” session. Westpac was among the gainers in the major lenders, as the ASX 200 climbed more than 1% in afternoon trade.

The more interesting part is why bank stocks have stayed resilient in recent weeks even as the interest‑rate narrative has become more complicated. Minutes released today from the Reserve Bank of Australia’s (RBA) December Monetary Policy Board meeting show officials actively debating whether policy is still restrictive—and noting that markets have shifted sharply from expecting further easing to seeing the next move as potentially up. ^[1]

For bank investors, that’s a double-edged sword:

Higher-for-longer (or higher-again) rates can support lending margins in some parts of the book.
But they can also squeeze borrowers, increase arrears, and intensify competition as banks fight for high-quality customers.

What the RBA minutes mean for Westpac and other bank stocks

The RBA minutes (from the 8–9 December meeting) explicitly describe a meaningful repricing in Australian interest-rate expectations. Members noted that markets had moved “from pricing in a further 25 bp cut… by the end of 2026 to pricing in a 25 bp increase,” responding to RBA communication and inflation, labour market and GDP data that were interpreted as “capacity constraints and inflationary pressures” building. ^[2]

The minutes also highlighted a few bank-relevant details:

The inaugural full monthly CPI release showed headline inflation rising to 3.8% year‑to‑October, with upside risk to near‑term underlying inflation. ^[3]
Household credit growth has picked up, particularly investor housing credit, which the RBA notes tends to respond more to rate cuts than owner‑occupier borrowing. ^[4]
Officials observed that incoming data reduced confidence that policy was still “a little restrictive,” implying the debate is no longer “how soon do we cut again?” but “are we already near neutral—and what happens if inflation sticks?” ^[5]

In short: the macro backdrop that bank investors enjoyed earlier in 2025—when rate cuts were the clean base case—has become messier. That uncertainty often shows up in bank valuations first, because “rate path + credit quality” is the core equation.

Westpac’s own rate outlook: “On hold” in 2026, but risks both ways

Westpac’s economics team has been framing 2026 as a year where the cash rate could plausibly stay unchanged, with risks on both sides of the distribution. In a December note, Westpac IQ argued the RBA could be on hold through 2026, reflecting sticky inflation risks and an economy that may not be slowing enough to justify further easing. ^[6]

For equity investors, the practical takeaway isn’t whether a specific cut/hike happens in a specific month—it’s that the tail risks have grown:

If inflation surprises higher: bank stocks can hold up if margins improve, but credit risk rises.
If growth slows sharply: credit risk rises, and the market may start discounting weaker loan growth and fee pools.

Buyback watch: Westpac keeps shrinking the share count

One of the most concrete “support beams” under Westpac stock into year‑end has been capital return.

The program size and timeline

Westpac disclosed that it intends to buy back up to A$3.5 billion of fully paid ordinary shares via an on‑market buyback, with the buyback running until 10 November 2026 (proposed start date 25 November 2025). ^[7]

How much has been bought back so far?

In its daily buy-back notification dated 19 December 2025, Westpac reported 88,723,655 shares had been bought back before the prior day, and 50,000 shares were bought back on the prior day (18 December 2025). ^[8]

The same disclosure reported total consideration paid before the prior day of about A$2.48 billion, with A$1.9125 million paid for the 50,000 shares bought on 18 December (at A$38.25). ^[9]

Today’s ASX filing: cancellation of bought-back shares

On 23 December 2025, Westpac lodged an ASX Appendix 3H stating 50,000 ordinary shares ceased due to “cancellation pursuant to an on‑market buy‑back,” with the cessation occurring on 22 December 2025. ^[10]

Buybacks matter for Westpac’s stock narrative because they can:

mechanically lift earnings per share by reducing the share count,
signal confidence in capital strength,
and provide incremental demand in the market—particularly useful in choppy macro periods.

Westpac’s own reporting has previously pointed to buybacks as a contributor to per‑share outcomes, with its chairman noting that execution of the share buyback added to earnings per share in FY2025. ^[11]

Dividends and capital: why yield still pulls investors toward WBC

In its FY2025 full‑year results material, Westpac reported:

Statutory net profit:A$6.9 billion
Net profit excluding notable items:A$7.0 billion
CET1 capital ratio:12.5%
Full-year ordinary dividends:153 cents per share, fully franked
The bank stated the final dividend was 77 cents per share. ^[12]

Westpac’s dividend information page confirms that the 2025 final ordinary dividend (announced 3 November 2025) was 77 cents per share, paid 19 December 2025, and 100% franked (with Australian franking credits at a 30% tax rate), with New Zealand imputation credits also attaching. ^[13]

And for investors tracking the calendar, Westpac’s financial calendar lists:

Final dividend payable: 19 December 2025
First quarter results: 13 February 2026
Interim results and dividend announcement: 5 May 2026 ^[14]

That combination—fully franked dividends + buyback + strong regulatory capital—helps explain why the stock can remain supported even when analysts argue valuation has become stretched.

Fundamentals check: margins, costs, competition and the “RAMS” simplification

Margin and credit quality signals

Westpac’s FY2025 materials showed net interest margin (NIM) around 1.95% (excluding notable items), with low impairment charges highlighted in the period. ^[15]

Reuters’ reporting on the FY2025 result pointed to intense competition in home lending pressuring profitability and noted Westpac’s net interest margin around 1.94%, alongside commentary that strong employment and household savings helped limit loan defaults, with home-loan arrears over 90 days reported at 0.83%. ^[16]

Costs and restructuring

Westpac’s FY2025 reporting referenced a restructuring charge of A$273 million supporting its “Fit for Growth” program and noted expense growth alongside continued investment (including technology). ^[17]
Reuters also highlighted the restructuring charge context ahead of results. ^[18]

The RAMS loan book sale

A major strategic move in 2025 has been simplifying the mortgage footprint. Reuters reported that Westpac announced the sale of its A$21.4 billion RAMS mortgage portfolio to a consortium including Pepper Money, KKR and PIMCO, with completion expected in 2H26 subject to approvals. ^[19]

Investors typically like simplification trades—but they also want to see what replaces the earnings base and whether execution risk (systems integration, customer retention, cost take-out) stays contained.

Analyst forecasts: consensus targets point below today’s price

Here’s where the market mood gets spicy.

On Investing.com’s consensus snapshot, Westpac’s overall analyst consensus is listed as “Sell”, based on a recent poll window, with 0 Buy, 5 Hold, 8 Sell. The page lists an average 12‑month price target of about A$33.93, versus a quoted price around A$39.25, implying roughly -13.55% downside. ^[20]

The same Investing.com page shows a 52‑week trading range roughly A$28 to A$41, which places Westpac near the upper end of its annual range on today’s pricing. ^[21]

Fintel’s compiled forecast also shows an average one‑year price target around $34.74, with a forecast range from $28.28 to $42.00 (as presented on its page). ^[22]

It’s worth reading those targets properly: “average target below spot” doesn’t automatically mean “sell now.” It often means the market is paying up for qualities analysts discount more heavily—like defensive dividends, buyback support, or relative safety in uncertain macro conditions.

But the valuation gap is real, and it sets up 2026 as a year where Westpac may need to earn its multiple via execution and cost discipline, not just yield.

Risks investors are pricing (or ignoring) into year-end

Even when a stock is rising, the risk ledger still exists. For Westpac, the major ones investors keep circling are:

1) Regulatory and conduct headlines

Reuters reported in October that a Westpac unit was hit with a A$20 million Federal Court penalty linked to home-loan misconduct involving compliance failures. ^[23]
These events rarely break a major bank on their own—but they can pressure trust, governance scores, and regulatory scrutiny.

2) Governance, reputational pressure and “non-financial risk”

At Westpac’s annual meeting, Reuters reported a large protest vote against director Peter Nash (around 40% against his re‑election), and also noted CEO commentary pushing for a bigger role from social media firms in scam prevention, alongside Westpac’s investment in scam controls. ^[24]

3) New Zealand capital rule changes

For the Australian-owned banks operating in New Zealand (including Westpac’s NZ business), Reuters reported the Reserve Bank of New Zealand will lower some capital requirements for the largest banks (with implementation not until 2028). That could affect funding costs and lending economics over time—though it’s not an immediate P&L event. ^[25]

What to watch next for Westpac stock

With dividend season (for FY2025) now largely behind the stock and buybacks continuing, the next big potential catalysts are scheduled and macro-driven:

13 February 2026: Westpac first‑quarter results update (per company calendar). ^[26]
Ongoing market repricing of the RBA path, especially as investors get more read-through from monthly CPI and the next quarterly CPI prints. ^[27]
Evidence that Westpac can keep cost growth under control while executing its simplification and technology programs. ^[28]
Whether mortgage competition eases enough to stabilise margins, or stays intense into 2026. ^[29]

Bottom line on 23 December 2025

Westpac stock is ending 2025 with momentum: the share price is hovering around the A$39 area as banks rise with the market, and a continuing on‑market buyback provides a steady, mechanical tailwind. ^[30]

At the same time, the macro narrative is becoming less straightforward. The RBA minutes show the policy conversation has shifted, with markets no longer confidently pricing “more cuts,” and inflation dynamics still in play. ^[31]

That combination is exactly why the push-pull is so visible in analyst work: dividends and buybacks argue for resilience, while consensus targets argue the stock may already be priced for a fairly optimistic outcome. ^[32]