Following an upbeat review of financial stability, Australian financial stocks saw as much as a 1.6% increase.

This represents the most substantial intra-day percentage gain since June 28.

Despite high rates of inflation and interest rates, the majority of Australian borrowers managed to service their debts, according to the financial stability review conducted by the Reserve Bank of Australia (RBA).

It was also mentioned in the review that banks are in a good position to manage an increase in loan defaults.

Interestingly, the RBA left the key policy rate at an 11-year high of 4.10% for a 4th consecutive month on Tuesday.

Despite the upward trend, the sub-index lost over 0.4% for the week.

In individual stocks, the Commonwealth Bank of Australia (ASX:CBA), National Australia Bank (ASX:NAB), and Westpac Banking Corp (ASX:WBC) each experienced a surge of over 1.5%.

QBE Insurance (ASX:QBE) and Medibank Private (ASX:MPL) also saw significant gains on the sub-index, with both advancing by over 2.5%.

However, as of last closing, AXFJ has experienced a downturn of 2.5% this year.

The Commonwealth Bank of Australia is a multinational banking corporation that offers a variety of financial services.