January 08, 2025 (MLN): Pakistani banks led the ranking of Asia-Pacific (APAC) lenders with the best performing stocks in 2024, according to S&P Global Market Intelligence data.

Several banks from the region's developing economies outperformed those in traditional powerhouse nations in terms of total returns.

Four Pakistan based banks, led by United Bank Ltd, secured positions in the top 10 rankings.

United Bank, with a market capitalization of $1.68 billion, achieved a total stock return of 159.7%, earning it the second spot among the region's best-performing bank stocks.

It lagged Indonesia's Bank Artha Graha Internasional Tbk, which boasts a market capitalization of $270 million and achieved total returns of 193.2% over the year, according to the data.

Japan was the only country with multiple lenders in the top 10 best performers, while the remaining spots were taken by one bank each from Indonesia, Vietnam, Bangladesh and the Philippines.

The ranking focused on Asia Pacific banks with market capitalizations above $100mn as of December 31.

According to the data, small-cap banks dominated the list, with just six of the top 15 performers surpassing a market cap of $1bn.

Many Pakistani banks recovered from an earlier share price slump that came amid the nation's weakening economy and surging inflation, among other factors.

Pakistan's economy recovered in the second half of 2024, helped by a funding program by the International Monetary Fund (IMF).

The government's adoption of tight fiscal and monetary policies under the umbrella of the IMF, along with timely external payments amid a smooth transition of government, led to a rebound in the local stock market.

Awais Ashraf, director of research at AKD Securities Ltd, previously shared this insight with Market Intelligence.

Nonetheless, reform implementation remains critical for continued economic recovery and poverty reduction, the World Bank said Oct 10, 2024.

Japan's SBI Sumishin Net Bank Ltd ranked third among banks in the region with the highest total returns, while Rakuten Bank Ltd was seventh, according to the Market Intelligence data.

Japanese companies, including banks, have benefited from monetary policy normalization after the nation's central bank ended its experiment with negative interest rates in March 2024.

Meanwhile, relatively slow economic growth in China and India weighed on the share prices of banks in Asia-Pacific's two major growth engines.

No lenders in mainland China or India made the top 15 best performers list.

Mainland China's Jilin Jiutai Rural Commercial Bank Corp Ltd had the worst performance by total returns in 2024, dropping 52.9%, according to Market Intelligence data. 

Following it on the worst performers list were Indonesia's PT Bank Neo Commerce Tbk, which had a 50% fall, and PT Allo Bank Indonesia Tbk, with a 45.7% decline.

India's RBL Bank Ltd, IndusInd Bank Ltd, Ujjivan Small Finance Bank Ltd, Equitas Small Finance Bank Ltd and ESAF Small Finance Bank were among the 10 biggest losers, with total returns down between 43.1% and 38.0%, data show.

Indian banks are expected to face continued earnings pressure amid headwinds such as subdued credit growth and the country's economic slowdown.

The Reserve Bank of India projects its GDP growth rate at 6.6% for the fiscal year 2024–25, compared to 8.2% in the prior fiscal year.

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Posted on: 2025-01-08T17:14:49+05:00