The State of APAC Banks 2023

Summary

Banks across the Asia-Pacific region delivered a resilient performance in 2022, even as rising interest rates, shifting borrower preferences, and mounting technology costs reshaped the competitive landscape from China to Australia, India, and Southeast Asia. Chinese banks retained their position as the region's most profitable by revenue, while markets like India and the Philippines posted standout earnings momentum on the back of credit growth and post-acquisition synergies.

Interest rate hikes by regional central banks produced sharply divergent outcomes for net interest margins, boosting banks in markets with strong credit demand while squeezing others facing falling home loan margins and a shift toward fixed-rate lending. In response, banks are increasingly building fee-based revenue through banking-as-a-service partnerships, embedded finance, and marketplace models that reduce reliance on interest income alone.

Technology investment has become a defining differentiator, with ICT spending as a share of revenue climbing sharply across the region even as banks work to bring down their cost-to-serve. Capital buffers, loan-to-deposit ratios, and return-on-equity trends round out a picture of an industry balancing near-term profitability against the scale of transformation still required to compete with digital-native challengers.

• Markets covered: China, India, Australia, the Philippines, and other APAC economies
• Covers revenue growth, net interest margins, fee income, ICT spending, and capital adequacy across 41 banks

Which APAC banks are converting rising technology spend into a genuine competitive edge rather than just higher costs?