Pakistani banks shine in comparison with Asia-Pacific peers
Pakistani banks have outperformed some of the Asia-Pacific region’s largest
financial institutions in Q3 2025, delivering exceptional stock returns amid a
sustained rally in the Pakistan Stock Exchange (PSX) and a marked rebound in
investor confidence.
Banks dominate regional rankings
According to S&P Global Market Intelligence, the Bank of Punjab led all
Asia-Pacific banks with market capitalizations above $100 million, posting a 176.4%
total return in the quarter. The Bank of Khyber followed closely with 108.2%,
underscoring Pakistan’s strong showing at the top of the regional leaderboard.
Other local institutions, including the National Bank of Pakistan, JS Bank, Askari
Bank, and Habib Bank Ltd., also ranked among the top 15 performers across the
region.
Market momentum supports sector
growth
The banking sector’s surge paralleled a robust five-month rally in the KSE-100
Index, which advanced 11% in July and 11.4% in September, driven by renewed
investor optimism. This recovery followed the resolution of a border conflict
with India in May and improving diplomatic ties with the United States,
highlighted by several high-level meetings between Pakistani leaders and U.S.
President Donald Trump.
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Regional comparison: Pakistan surges as peers struggle
While Pakistan’s banks soared, many regional counterparts lagged.
Indonesia’s PT Allo Bank Indonesia and Vietnam’s Prosperity JSCB delivered
strong returns of 89.2% and 68.1%, respectively.
In contrast, several Chinese and Indian banks posted weak results. Bank of
Jiujiang and China Everbright Bank faced profitability pressures, contributing
to seven Chinese banks appearing among the bottom 15 performers. Indian
institutions, including IndusInd Bank and Bajaj Holdings, also struggled, while
Bangladesh’s Midland Bank, last quarter’s top performer, tumbled to third-worst
with a -20.9% return. The poorest performer overall was Indonesia’s PT Bank
Nationalnobu, which fell 31.9%.
Drivers behind Pakistan’s outperformance
Analysts attribute the strong performance of Pakistani banks to expectations
of monetary easing, currency stabilization, and improved governance following
elections. With equities still trading at attractive P/E ratios, Pakistan
remains appealing to investors seeking undervalued, high-growth opportunities.
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Outlook
Pakistan’s banking sector not only held its ground but led the entire
Asia-Pacific region in Q3 2025. Should macroeconomic stability persist,
analysts believe this momentum could pave the way for a sustained bull run in
the months ahead.
Source:
Techjuice