Loan growth bolsters profits. High-yield loans offset cooling performance.
The maximal net interest margin (NIM) dynamic enjoyed by banks in the Asia-Pacific (APAC) region in 2023 tailed off in some countries last year,
most notably in Australia where NIM fell a combined 7 basis points (bps) for the big four banks and continued its seemingly relentless contraction in China, breaking below 1.8% for the big six lenders as supply side boosts failed to meet commensurate demand and profits were squeezed.
A massive consolidation of China’s rural lenders last year revealed underlying systemic stain even though government regulators relaxed the treatment of non-performing loans, providing sectoral relief.
Japan’s monetary tightening allowed its banks to buck the NIM reversal trend and its three mega-banks produced record profits as margins surged.
Profit boosts in compensation for the region’s NIM peak were found via loan growth, fee and commission income, pushing up cash account to savings account (CASA) ratios, reducing funding costs through debt capital market issuance and beefing up returns on equity (ROE) via share buybacks. Fintech boosted low-cost customer onboarding last year and AI enriched the customer experience even though their full-scale impact on cost-to-income rations failed to emerge.
Regional Winner
Wee Ee Cheong, Deputy Chairman and CEO, UOB
Best Bank in Asia-Pacific | UOB
UOB‘s 2022 acquisition of Citigroup’s consumer banking business in Indonesia, Malaysia, Thailand and Vietnam was a masterstroke of regional positioning. It built on an already solid decades-long presence in those countries and helped boost the bank’s regional customer base to 8.4 million.
The bank’s wide geographic reach presents a massive cross-sell opportunity. For example, it is the biggest Visa and Mastercard issuer in Southeast Asia and grew its cross card fees by 18% last year.
Meanwhile, UOB’s wealth management division had a stand-out year, with income rising 30% and its digitally enabled customer base growing 9% with 80% of its customers transacting digitally. The bank has a 30% cross-border “scan-to-pay” market share and 60% of the peer-to-peer payment market; transaction value in these markets rose a healthy 42% last year.
A measure of UOB’s reputation, market savvy and the quest for optimal funding was evident by its October 2024 high-profile return to the Panda bond market via a 5 billion Chinese yuan ($688.2 million) three-year, that represented the largest size achieved in that market by a Southeast Asian issuer.
Country, Territory and District Winners
Afghanistan | AIB
Afghanistan International Bank (AIB) is the country’s largest commercial bank and the only lender in Afghanistan with international clearing ability across all countries. The bank operates as a wholesale lender-focused on murabaha financing in compliance with Shariah principles – with a client base comprising multilateral organisations and NGOs, UN-affiliated entities, embassies, foreign military forces, and Afghan government institutions. Comprehensive after-tax profit in 2024 was 1.35 billion Afghan afghanis ($18.6 million) for a 4% YoY gain.
Australia | CBA
Commonwealth Bank of Australia (CBA)’s NIM rose 2bps last year to 2% , the highest among its peers in Australasia. Return on average equity was 13.1% the highest in the sector. The bank reduced loan impairment charges by 23% as household income rose due to fiscal easing. Cost-to-income was the lowest among peers at 45.4%. After-tax profit was AU$9.4 billion ($6 billion), versus nearly AU $10 billion in 2023.
Azerbaijan | ABB
The International Bank of Azerbaijan (ABB), the country’s largest bank – owning 26% of sector assets and 23% of sector loans – was upgraded by Fitch Ratings last October by one notch to BB, with a positive outlook, accompanied by a one-notch upgrade of the bank’s Viability Ratings to BB.
Bangladesh | CITY BANK
It was a torrid year for Bangladesh, which saw the country’s prime minister deposed amid widespread chaos. Yet, City Bank chalked up a stellar performance marked by some digital milestones, including the launch of CityGo, the country’s first near field communications – enabled wearable payment device, CityLive, the firs mobile app for corporate internet banking, and virtual debit and prepaid cards.
The bank now handles around 80% of transactions directly and has made inclusivity strides via lending to women entrepreneurs and through use of agents to serve the rural community. SME lending to women accounts for 26% of the loan book.
Brunei Darussalam | BIBD
Bank Islam Brunei Darussalam (BIBD) is Brunei’s largest and best-capitalised bank, boasting 10.4 billion Bruneian dollars ($7.9 billion) in assets as of December 2023. The bank has executed large-scale investments in fintech, sustainable finance, and regional partnerships in recent years. BIBD dominates the personal and home financing market with a 60% share, ensuring that it plays a pivotal role in driving national economic growth and meeting the goals of Brunei Vision 2035.
Cambodia | ABA BANK
In Cambodia, ABA Bank, the country’s largest commercial lender, once again excelled by all measures. The bank grew total assets by 20.2% to $13 billion and pulled in $338 million profit for a 22.2% YoY gain, making it the country’s most profitable commercial bank for the fourth year in a row and delivering 14.5% ROE to shareholders. The ABA Mobile and ABA Merchant apps are ubiquitous in Cambodia, where cashless transactions are becoming the norm. It also added an eye-popping 1 million new ABA Mobile users in 2024, for 4.2 million users of the app.
China | CCB
China Construction Bank (CCB) delivered some solid metrics in 2024 against a challenging onshore industry backdrop marked by sluggish loan demand, crimped NIM, and burst of China’s real estate bubble.
At CCB, NIM contracted 2 bps to 1.52 bps at the end of the third quarter, while asset and liability growth was steady, and capital adequacy was healthy, overall (19.35%) and at the tier 1 level (14.1%). Annualised weighted return on equity (ROE) booked a solid 11%, and the cost-to-income ratio came in at the svelte 25.25% on the back of management rationalisation. Despite all this, annual profit was up an anemic 0.65%.
Hong Kong | HSBC
“We are creating a simple, more agile, focused bank built on our core strengths,” said the new HSBC Group CEO Georges Elhedery in February, announcing the release of the banks’ annual results. The bank’s $2 billion gain in pretax profit to $32.3 billion reflects the proactive strategy of his predecessor, Noel Quinn.
Revenues were strong in Wealth and Personal Banking and Global Banking and Markets. Constant currency revenue, excluding notable items, rose by $2.9 billion to $67.4 billion. An accounting. move to position the banks’ commercial surplus to the trading book resulted in a 10 bp decline in NIM to 1.56%. ROE was 13.6%
India | STATE BANK OF INDIA
The largest commercial bank in India, the State Bank of India (SBI) dominates in assets, deposits, branches, customers, and employees. It leads the competition in financial metrics: $840 billion in assets, $50 billion in tier 1 capital, a 22% return on capital.
Some 92% of SBI’s transactions are digital, and its digital agenda has been anchored on its YONO app. The app has 81.3 million registered users, of whom 3.7 million were added in FY2025.
YoY profit in the fourth quarter of 2024 rose 84%, boosted by 13.4% credit growth across key segments, including SMEs, foreign branches, agriculture, corporates, and retail. Net interest income rose 4%, while employee expenses fell 17%.
Indonesia | BANK MANDIRI
Bank Mandiri (BM) is Indonesia’s largest bank by assets – some $147 billion on a consolidated basis last year, delivered a five-year compound annual growht rate is assets of 14.1%, one of the fastest rates in the region.
BM’s loan portfolio surged by 19.5% last year to over $101.2 billion, underpinned by the banks’ robust ecosystem. This includes large wholesale clients and a 35 million customer retail clients serviced via the Omnipresent Distribution Network strategy, which provides online and offline contact and facilitates efficient product cross-selling. In 2024, ecosystem analysis contributed to 10% of commercial loan growth and SME lending rose 25% while NPLs dropped to 1.2%.
Japan | SMBC
Sumitomo Mitsui Banking Corporation (SMBC), like its Japanese megabank peers MUFG and Mizuho, benefited from monetary tightening by the Bank of Japan (BoJ) last year, scoring a 43.3% profit surge in the nine months to September, booking nearly ¥1.2 trillion ($8.1 billion). All three of the megabanks scored record annual earnings thanks to the BoJ’s scrapping negative interest rate in March 2024.
Growth was delivered across all business units—retail, whole- sale, global, and global markets – for a solid 7% ROE, based on rising NIM and fees. SMBC was impressed with forward-looking risk management strategies and canny principal trading, which brought in ¥83 billion of stock market portfolio gains.
Kazakhstan | FORTE BANK
Kazakhstan’s ForteBank booked impressive data across a range of measures last year. Net profit surged by 37.7%, assets by 25.7%, loan portfolio by 32.1%, and deposits by 26.8%. Consumer lending remained the bank’s core business, followed by lending across the corporate sector.
Kyrgyzstan | DEMIR Bank
In Kyrgyzstan, DemirBank last year successfully negotiated the delicate challenge of the sanctions regime faced by its Russian neighbour, enjoying no relations with sanctioned banks. DemirBank has around a 9.2% market share in Kyrgyzstan. Its relatively small asset base of $770 million allows for a robust growth dynamic, as evidenced in the superlative 38% growth in DemirBank’s gross loan portfolio last year, way surpassing the market’s average 17% growth and garnished by the lowest NPL ratio in the domestic banking sector—just 1.8%.
Macau | ICBC MACAU
At ICBC Macau, profit surged 136%, albeit from a low base after 2023’s 97% decline. The bank continues to enjoy a cost-to- income ratio of just 29%. Macau’s banking industry remained under pressure in 2024. Still, ICBC managed to grow assets and remains the former colony’s leading banking franchise focusing on developing regions, including the Guangdong-Hong Kong Greater Bay Area and the Yangtze River Delta.
Malaysia | UOB MALAYSIA
UOB Malaysia (UOBM) is the largest foreign bank operating in Malaysia and has impressive franchises: from retail banking, where UOBM’s presence was strengthened by parent UOB’s 2022 acquisition of Citi’s consumer banking business in Malaysia; to wholesale banking – specifically financial supply chain management, wealth management, and residential mortgages.
UOBM’s total assets have grown at an impressive annual 7% clip over the past three years, bringing them to 160 billion Malaysian ringgit ($36.3 billion). Highlights on the balance sheet include a 10% rise in trade finance last year, a 93% expansion of sustainable financing, and 12% growth in the bank’s credit card business.
Mongolia | XAC BANK
Mongolia’s XacBank secured a hefty $236 million in senior loans from leading development finance institutions last year, help- ing it achieve a one-notch rating upgrade from Moody’s (to B2 stable) and Fitch (to B+). The rat- ing agencies cite the bank’s robust loan portfolio growth, low NPL ratio—just 2.2% in the first half of 2024—and solid capital adequacy ratio (CAR) of 19.2% as the reasons for the upgrades. ROE and profit growth were a hearty 25.6% and 20.3%, respectively.
Myanmar | UAB BANK
In Myanmar, uab bank has demonstrated a commitment to innovation in recent years. Via the ability of customers to use their mobile phones to make ATM cash withdrawals, uab became the country’s first “paperless” bank. In 2024, the bank tied up with Manulife and KBZMs to offer bancassurance, a one-stop offering combining banking and insurance. Such savvy cross-sells propelled the bottom line and had profits surging 39.3% and ROE up at 23.2%, a nearly 7% gain com- pared to 2023.
Nepal | GLOBAL IME BANK
Nepal’s banking sector was lackluster in 2024, with profits dropping 4.6% in the first half. Retail-focused Global IME Bank avoided the downturn, posting a 49.5% profit gain for the second quarter of FY2024, which began in October. NPLs rose to nearly 4.7%, although impairment charges declined by 46%. Fees earned from the bank’s consumer and SME client base, account- ing for over half of Global IME’s loan portfolio, rose by 17.3%.
New Zealand | ANZ NEW ZEALAND
New Zealand’s banking sector faced headwinds in 2024, thanks to a restrictive cash policy rate and moribund economic growth. ANZ New Zealand (ANZ NZ) bested the competition last year in the face of rising costs and reduced revenue: Expenses rose 6%, while revenue gained an anemic 1%, albeit with the positive gloss of a 4% rise in home lending—in which it commands a dominant market share—and a 7% rise in funds under management.
“As interest rates come down, inflation is controlled and businesses feel more confident, there is a sense of cautious optimism surrounding New Zealand’s economic future,” said Antonia Watson, CEO of ANZ NZ, in last November’s earnings report.
Pakistan | MEEZAN BANK
Pakistan’s Meezan Bank reaped the rewards of building a strong Islamic franchise. Shariah-compliant financing contributed to the bank’s 27% after-tax profit gain in 2024 and frothy investment portfolio performance. Operating expenses were up, but increased fee and commission income and securities gains filled the gap.
Philippines | BDO
The Philippines’ BDO Unibank delivered the highest full- year net income in the country’s history last year – a barnstorming 82 billion Philippine pesos ($1.4 billion) for a 12% YoY gain, delivering over 15.1% ROE thanks to its strong performance. NPLs were just over 1.8%, substantially below the domestic industry’s nearly 3.3%, and net interest and non-interest income grew 8%.
The CAR was enhanced by issuing BDO’s second and third ASEAN sustainability bonds of 63.3 billion pesos and 55.7 billion pesos in January and July 2024, respectively, with funds earmarked for sustainable projects within the Philippines.
Singapore | DBS
Piyush Gupta is retiring this year after 16 years as CEO of Singapore’s DBS. It is fitting that after engineering the bank’s rise to top status in APAC, thanks in recent years to a full-blooded embrace of digital technology, he goes out with a bang, having last year delivered record total income for the bank – a heady 22.3 billion Singapore dollars ($17 billion) resulting in an 11% net profit gain to SG$11.4 billion, another record, while its ROE reached 18%.
South Korea | HANA BANK
South Korea’s Hana Bank booked a record, over 3.7 trillion South Korean won ($2.6 billion) net income in 2024, a year- on-year (YoY) gain of 9.3%. This stellar result allowed Hana to buy back and cancel 400 billion won, its largest buy back. ROE rose by 17 bps to 9.12%, and NIM increased by 5 bps to 1.46%.
The bank rode a 59% surge in fee income last year, with 41.5% provided by the investment banking franchise and 40% by the group’s securities division. Hana’s corporate and household loan book also climbed by 5.9%, and the nonperforming loan (NPL) ratio was a minuscule 0.3%. NPL coverage was a solid 182%, backed by a 16.3% tier 1 capital ratio.
Sri Lanka | COMMERCIAL BANK OF CEYLON
Sri Lanka’s largest privately owned lender, Commercial Bank of Ceylon (CBC), entered a new era last year via the appointment of a new chairman and deputy chairman: industry veterans Sharhan Muhseen and Raja Senanayake, respectively. Under their leadership, CBC raised over 22.5 billion Sri Lankan rupees ($75.4 million) via rights and debenture issuances in 2024, each oversubscribed and the largest in its asset class from a Sri Lankan financial institution.
The bank’s performance underscores Sri Lanka’s return to relative normalcy after the political and financial turbulence of recent years. In 2024, CBC’s outstanding metrics were over 128.3% after-tax profit growth, 17% CAR, and a lean 31.5% cost-to-income ratio, a nearly 5% YoY decline.
Taiwan | CTBC
In Taiwan, CTBC ’s core franchise is focused on midsize and large corporations, high net worth individuals (HNWIs) and families, and the mass-market segment in the country’s retail banking sector. The bank also supports small and midsize enterprises (SMEs) via its subsidiary, Tokyo Star Bank.
CTBC delivered an 18% growth in profit last year of 62.8 billion Taiwan new dollars ($1.9 billion) and a solid 13.1% ROE, leading the local industry in revenue, profit, and capital scale.
Thailand | BANGKOK BANK
In Thailand, Bangkok Bank bested its peers last year, again enjoying a dominant market share in deposits and loans of 18.4% and 17.7%, respectively. Total CAR was a comfortable 20.4%, income rose 5% to generate 8.6% profit growth, and ROE was a solid 8.3% for the year. The bank is one of the largest regional banks in Southeast Asia by total assets and has a network that spans 14 economies, from members of the Association of Southeast Asian Nations (ASEAN), to Japan, China, the US and UK. The bank supports Thai companies seeking to expand across the region and inter- nationally, as well as foreign entities doing business in Thailand.
Uzbekistan | NBU
The National Bank of Uzbekistan (NBU) emerged triumphant last year in a domestic banking sector beset by woes. Nine lenders reported losses, while industry profits declined by 50%, mainly due to rising NPLs. NBU booked the highest profit in the domestic industry, over 1.7 trillion Uzbekistani sums ($131 million).
Vietnam | TECHCOMBANK
Techcombank’s 2024 suc- cess in Vietnam can best be told in its stock-price performance, which rose 60% last year against a 6% fall in the MSCI Vietnam Index. That move reflects a solid business model that includes the country’s top real estate franchise, a 50% market share of the country’s HNWIs, the top credit card franchise, and primary bond market leadership.
