Pakistani banks emerged as the leaders in the Asia-Pacific (APAC) region for 2024, recording the strongest stock performance among regional lenders, according to data from S&P Global Market Intelligence. This achievement highlights the remarkable recovery and resilience of Pakistan’s financial sector amid challenging economic conditions.
Four banks from Pakistan secured spots in the top 10 rankings of the region’s best-performing bank stocks, led by United Bank Ltd (UBL). UBL, with a market capitalization of $1.68 billion, posted an impressive total stock return of 159.7%, earning it the second position on the list. The top spot was claimed by Indonesia’s Bank Artha Graha Internasional Tbk, which achieved total returns of 193.2% with a market capitalization of $270 million.
Japan was the only country with multiple banks in the top 10, while the remaining positions were occupied by one bank each from Indonesia, Vietnam, Bangladesh, and the Philippines. Notably, no banks from China or India made it to the top 15 performers, indicating a shift in the dynamics of regional financial markets.
The rankings, based on market capitalizations of over $100 million as of December 31, 2024, revealed a dominance of small-cap banks. Only six of the top 15 performers surpassed a market capitalization of $1 billion. This trend underscores the strength of emerging economies like Pakistan in driving regional financial growth.
Pakistani banks’ exceptional performance is largely attributed to the country’s economic recovery in the latter half of 2024. This recovery was fueled by a funding program from the International Monetary Fund (IMF) and the government’s implementation of tight fiscal and monetary policies. Timely external payments and a smooth political transition further bolstered investor confidence, leading to a rebound in the local stock market.
According to Awais Ashraf, director of research at AKD Securities Ltd, the IMF program and government measures played a pivotal role in stabilizing Pakistan’s financial sector. However, the World Bank emphasized in its October 2024 report that continued reform implementation remains critical for sustained recovery and poverty alleviation.
Meanwhile, Japanese banks also demonstrated strong performance, benefiting from the country’s monetary policy normalization following the end of its negative interest rate experiment in March 2024. SBI Sumishin Net Bank Ltd ranked third among the region’s best performers, while Rakuten Bank Ltd secured the seventh spot.
Conversely, banks in major growth economies like China and India struggled, with no lenders from either country making the top 15 list. Mainland China’s Jilin Jiutai Rural Commercial Bank Corp Ltd recorded the worst performance, with total returns down 52.9%. Similarly, several Indian banks, including RBL Bank Ltd and IndusInd Bank Ltd, faced significant declines in stock performance due to subdued credit growth and slowing economic momentum.
As Pakistan’s banking sector continues to outshine its regional counterparts, its success underscores the potential of targeted economic policies and robust financial management in driving sustainable growth. The performance of Pakistani banks not only highlights their resilience but also signals the emergence of new financial powerhouses in the Asia-Pacific region.