Pakistani banking stocks top Asia-Pacific rankings

Seven Pakistani banking stocks were ranked among the top performers in the Asia-Pacific region in 2025, supported by a combination of low fundamental valuations, improving profitability, a relatively high interest rate environment, balance sheet cleaning and renewed investor confidence in Pakistan’s macroeconomic outlook during the year.

Pakistani banking stocks were led by Bank of Punjab (BOP), National Bank of Pakistan (NBP), Askari Bank Limited and Bank of Khyber in the top four positions, according to data compiled by S&P Global Market Intelligence. It is followed by United Bank Limited (UBL), Bank Makramah Limited and Faysal Bank at different positions in a list of 15 banks.

According to data on Asia Pacific’s best-performing bank stocks based on total shareholder return as of December 31, 2025, BOP recorded the highest return at 333.8%, followed by NBP with gains of 301.3%. Askari Bank ranked third among Pakistani lenders with a return of 194.2%. The figures highlight a strong performance by Pakistani lenders compared to their peers in the Asia-Pacific region during the year.

“The performance reflects a combination of low fundamental valuations, improving profitability, high interest rates, balance sheet cleaning and a better investment climate for Pakistan’s macroeconomic outlook in 2025,” Ali Najib, Deputy Head of Trading at Arif Habib Limited, told The Express Tribune. He added that smaller and medium-sized banks have generally outperformed larger ones as part of a valuation reassessment cycle.

The list also included several Japanese regional banks, which posted triple-digit returns despite relatively small market capitalizations. Their performance was largely driven by expectations of monetary policy normalization, improvement in net interest margins and restructuring efforts in Japan’s regional banking sector.
The strong performance of banking stocks coincided with a broader rally in Pakistan’s stock market. The benchmark KSE-100 gained 52% in rupee terms in 2025, while total market capitalization on the Pakistan Stock Exchange rose 39% to Rs 19.7 trillion, or about $70 billion.

According to Topline Securities, the banking sector remained in focus for investors due to valuation coverage, increase in net interest income and capital gains recorded by some banks. In its Pakistan Strategy 2025 report, Topline identified commercial banks as one of the best performing large-cap sectors, along with cement and fertilizers.

On a sectoral basis, the capitalization of listed banks grew by 85% during the year, compared to 81% growth in cement and 57% in fertilizers. Topline noted that earnings growth, the resumption of dividends and stronger balance sheets supported performance at selected banks.

While the Asia-Pacific data puts Pakistan’s banks at the top of the 2025 performance rankings, analysts caution that the rally reflects a recovery from lows rather than a definitive reassessment based on structural reforms. The key test for the sector will be its ability to maintain profitability and asset quality as interest rates decline and macroeconomic risks re-emerge.