Pakistani banks demonstrated exceptional performance in 2024, leading the Asia-Pacific (APAC) region with some of the best-performing stocks, according to data from S&P Global Market Intelligence. Four banks from Pakistan secured positions in the top 10 rankings, showcasing the resilience and strength of the country’s banking sector amid global economic challenges.
United Bank Limited (UBL) stood out with a total stock return of 159.7%, earning it the second spot among the region’s top-performing bank stocks. UBL’s market capitalization of $1.68 billion underscores its significance in the financial landscape. The bank was outperformed only by Indonesia’s Bank Artha Graha Internasional Tbk, which achieved a total return of 193.2% with a market capitalization of $270 million.
Pakistani banks benefited significantly from the country’s economic recovery in the latter half of 2024. After enduring a period of economic instability marked by inflation and declining investor confidence, Pakistan turned the corner with the help of an International Monetary Fund (IMF) funding program. The implementation of stringent fiscal and monetary policies, coupled with timely external payments and a smooth government transition, contributed to a rebound in the local stock market. Many banks that had previously experienced share price slumps recovered strongly, reflecting improved macroeconomic conditions.
The resilience of Pakistani banks in 2024 was a bright spot for the region. While Japan was the only country with multiple entries in the top 10, including SBI Sumishin Net Bank Ltd and Rakuten Bank Ltd, other high performers came from Vietnam, Bangladesh, and the Philippines. Notably, no lenders from China or India made the top-performing list.
Mainland China’s Jilin Jiutai Rural Commercial Bank Corp Ltd recorded the worst stock performance in the region, with total returns falling by 52.9%. Other underperformers included Indonesia’s PT Bank Neo Commerce Tbk and PT Allo Bank Indonesia Tbk, with declines of 50% and 45.7%, respectively. Indian banks such as RBL Bank Ltd and IndusInd Bank Ltd also struggled, with total returns dropping between 38.0% and 43.1%.
China’s slowing economic growth and India’s subdued credit activity further weighed on their banking sectors. The Reserve Bank of India projected GDP growth at 6.6% for the fiscal year 2024–25, down from 8.2% in the previous fiscal year, reflecting broader economic challenges.
In contrast, Pakistan’s banking sector capitalized on the country’s improving economic fundamentals. According to Awais Ashraf, director of research at AKD Securities Ltd, sustained economic reforms are essential for maintaining this recovery and reducing poverty. The World Bank also emphasized the importance of continued reform implementation to ensure long-term stability and growth.
The APAC rankings, which focused on banks with market capitalizations above $100 million as of December 31, 2024, revealed that small-cap banks dominated the list. Only six of the top 15 performers surpassed a market capitalization of $1 billion, highlighting the ability of smaller institutions to navigate challenging environments effectively.
Pakistani banks’ performance reflects their resilience in a competitive and volatile financial landscape. Their success underscores the potential of emerging markets to drive regional growth, even as larger economies like China and India face economic headwinds. The recovery of Pakistan’s banking sector not only highlights the importance of adaptive strategies and investor confidence but also reinforces the critical role of macroeconomic stability in achieving sustained success.