CBA, NAB, WBC & ANZ - How big four banks performed after RBA’s rate hike

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  • On Tuesday, the RBA announced a 25-basis-point increase in interest rates to 35 basis points.
  • Banking stocks witnessed increased volatility right after the interest rate hike decision.
  • Changes in interest rates should be taken into account during analysis but should not be use as a sole criterion for investing.

Finally, the Reserve Bank of Australia (RBA) has made its move to bump up interest rates for the first time in 11 years. In a meeting on Tuesday, the RBA announced to increase interest rates by 25 basis points to 35 basis points, which came as a little bit of surprise for the market.

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Although, there were wide speculations about an imminent rate hike in light of soaring inflation, the increase of 25 basis points was higher than the expected rate hike of 15 basis points, leading the market to close in the red. Let us have a look at big four banks and how they fared after the RBA’s move.

Read More: Three ASX fixed income ETFs to explore as rate hikes loom

  1. Commonwealth Bank of Australia (ASX:CBA)

Headquartered in Sydney, Commonwealth Bank of Australia is the largest listed Australian bank, and has a market capitalisation of AU$175.7 billion with a total of 1.7 billion issued shares. The bank clocked a profit of AU$10.18 billion in FY21 over the revenue of AU$24.49 billion. Currently, CBA shares are trading at a dividend yield of 3.64%.

CBA shares ended today’s session on a negative note, falling 0.69% to AU$102.26 by closing. Also, the stock hit a low of 101.57 – which was the lowest level after 15 March 2022. This year, the stock has almost traded flat so far, delivering a slightly negative return of 0.24% till 3 May 2022.

  1. National Australia Bank (ASX:NAB)

The second bank on the list, National Australia Bank is headquartered in Melbourne and has a market capitalisation of AU$104.01 billion with a total of 3.21 billion issued shares. The bank has recorded a revenue of AU$16.96 billion in FY21 and a profit of 6.36 billion. NAB shares are trading at a decent dividend yield of 3.92%.

Today, NAB shares opened gapped down at AU$32.12 and closed the session after a seesaw ride at AU$32.11, losing 0.65% for the day. The volume for the day stood at 3.12 million shares.

  1. Westpac Banking Corporation (ASX:WBC)

Westpac Banking Corporation is a AU$83.6 billion financial institution based in Sydney and has a total of 3.5 billion shares on issue. The bank reported net earnings of AU$5.45 billion on a revenue of AU$21.45 billion in FY21. WBC shares are trading at a lucrative dividend yield of 4.94%.

WBC shares slid at the open, just like other major banks and fell to a low of AU$23.65 in early trade. However, after depicting intraday volatility amid rate hike, the stock pared all of its day’s loss and closed the session 0.08% up at AU$23.9 on 3 May 2022.

  1. Australia and New Zealand Banking Group Limited (ASX:ANZ)

The last stock on our list is ANZ, which is a Melbourne-based banking and financial institution, having a market capitalisation of AU$76.2 billion, making it the smallest of the big four banks. It clocked a net revenue of AU$19.11 billion in FY21 and a profit of AU$6.16 billion in the same year. Its shares are trading at a dividend yield of 5.2%, highest among the big four banks.

ANZ shares opened the session at AU$27.12 and fell to the low of AU$26.97 during the session. However, after the RBA’s rate hike decision, the stock saw a decent buying interest, closing at just 0.15% down today, compared to a -0.65% opening.

Bottom Line

The RBA has made its much-anticipated move to start increasing interest rates to put a leash on soaring inflation. Although, major banking stocks saw increased intraday volatility after rate hike (which is expected), but some banks also witnessed investors’ interest after the RBA’s decision.

It should be noted that changes in interest rates are good to supplement your analysis but should not be use as a sole criterion for investing.

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