Four Pakistani banks rank among Asia-Pacific’s top 10 performers for 2024

KARACHI: According to a report from S&P Global Intelligence, four Pakistani banks have been recognized among the top 10 best-performing financial institutions in the Asia-Pacific region for 2024.

United Bank, boasting a market capitalization of $1.68 billion, achieved a remarkable total stock return of 159.7 percent, placing it second overall. It ranked just behind Indonesia’s PT Bank Artha Graha Internasional Tbk, which posted total returns of 193.2 percent and has a market cap of $270 million.

Following United Bank, the National Bank of Pakistan reported a return of 108.4 percent, while Bank Alfalah Limited and Bank of Punjab also featured in the top 10 with returns of 107.1 percent and 98.4 percent respectively. Additionally, Allied Bank Ltd (ABL) and Habib Metropolitan Bank Ltd secured the 14th and 15th positions, with returns of 94.5 percent and 93.2 percent, respectively.

The strong performance of these Pakistani banks has been attributed to a recovery in the nation’s economy during the latter half of 2024, largely supported by an International Monetary Fund (IMF) funding program. This economic resurgence coincided with rising inflation and a rebound in share prices, significantly benefiting the banking sector.

Japan was the only country with multiple banks appearing in the top 10, while other spots were occupied by one bank each from Indonesia, Vietnam, Bangladesh, and the Philippines. The analysis included Asia-Pacific banks with a market capitalization exceeding $100 million as of December 31, revealing that small-cap banks predominantly filled the list, with only six of the top 15 having market values above $1 billion.

Furthermore, the report highlighted that Pakistani banks have transitioned into blue-chip stocks as the Pakistan Stock Exchange (PSX) reached record highs in the final quarter of 2024.

On the other hand, slower economic growth in China and India negatively affected bank stocks in those nations. Seven Indian lenders, including RBL Bank Limited and IndusInd Bank Limited, were identified among the 15 worst-performing banks, reporting total returns that dipped between 38 percent and 43.1 percent, respectively. Challenges for Indian banks have stemmed from sluggish credit growth and a downturn in economic activity, with the Reserve Bank of India projecting a GDP growth rate of 6.6 percent for 2024–25, down from 8.2 percent in the previous fiscal year.