The Westpac Banking Corp (ASX: WBC) share price is closing on its pre-pandemic highs. Can the Westpac share price surpass this?
WBC share price
Westpac raises interest rates
The big four bank has decided to lift its two-year and three-year fixed rates by 10 basis points or 0.1%.
This will apply to all its regional banking brands including St George, BankSA, Bank of Melbourne and RAMS.
This follows Commonwealth Bank of Australia (ASX: CBA) increasing its three-year and four-year fixed rate by 5 basis points or 0.5% last month.
According to the Australian Financial Review, experts believe the rises are likely tied to the conclusion of the Reserve Bank’s term funding facility in three weeks.
What does this mean for Westpac?
Higher interest rates ultimately mean higher margins for Westpac and fellow banks.
These are solid signs of the interest rate cycle potentially turning, which should be monitored closely.
Another thing to watch out for is PayPal’s (NASDAQ: PYPL) release of its credit card offering, which aims to compete away market share from the big banks.
The rise in interest rates should be factored in any valuation. You may want to check out these 2 techniques to value Westpac shares.
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