As economic activities almost touched pre-COVID-19 levels in 2021, most of the top 20 APAC banks posted substantial growth in their revenue stream. The aggregate revenue jumped 11.4% to US$1.5 trillion, reveals GlobalData, a leading data and analytics company.

China continues to lead the list of the top 20 APAC banks based on revenue with 13 banking institutions, followed by Japan (3), South Korea (3), and India (1).

There were 14 banks, which reported double-digit revenue growth, of which 12 were from China. The notable performers were Postal Savings Bank of China (PSBC), China Merchants Bank (CMB), and China Construction Bank (CCB), which reported more than 15% growth.

PSBC’s impressive growth was on account of 8.5% growth in interest income, 29.4% rise in fee and commission income, and 45% increase in net gains on investment securities. CMB and CCB also reported growth in their interest income, fee and commission income, net trading gain, and net gain arising from investment securities.

Parth Vala, Company Profiles Analyst at GlobalData, comments: “Over the past year, Chinese banking sector’s outstanding balance of loans to micro and small enterprises grew by 17% from CNY42.7 trillion to CNY50 trillion. The assets of large commercial banks went up by about 8% annually. Growing loan book along with stable asset quality (NPL of 1.7%) enabled the sector register a net profit of CNY2.2 trillion, reflecting an annual increase of 12.6%.”

The non-Chinese top performers that reported double-digit growth were Mizuho Financial and KB Financial. Mizuho Financial’s revenue grew by 13.2% on the back of 23.2% rise in interest income and 162% growth in trading income.

KB Financial’s revenue growth was driven by 5% rise in its interest income on account of about 8% growth in its loan book. This was further bolstered by 22.5% growth in net fee & commission income, which was mainly driven by credit card fees on the back of growth in consumption. Surge in brokerage income and enhanced investment banking activities considering record level of stock market also drove the bank’s revenue growth.

On the other hand, Hana Financial reported a decline of 11.3% in its revenue, which was mostly driven by decline in income from non-interest activities including net loss on financial instruments designated as measured at FVTPL, 70% drop in net gain on financial instruments measured at FVOCI, loss on derivative assets used for hedging, and 87% fall in gain on foreign currencies transactions.

Vala concludes: “2022 has brought its own new challenges with rapidly changing geopolitical landscape, increasing supply chain constrains, rise in energy prices, and stringent lockdown in China. With these headwinds, the top APAC banks are likely to find it difficult to maintain the recovery that they achieved in 2021.”