Asian Banks: Key themes for Asian Banks

UBS publishes a report on key themes for Asian Banks, structured around two questions: 1) whether the "safety" trade will continue to work for Asian banks, and 2) whether AI can deliver what technology never could. A scorecard ranks the major Asian banking markets, with Malaysia, Vietnam and Hong Kong scoring highest. Re-rating contributed about 75% of Asian banks' 2025 total returns, supported by FX appreciation and the chase for dividend yields. The relative P/B valuation gap between 2025 leaders and laggards now shows the leaders at an 18% discount, close to 3 standard deviations above the historical mean, making the trade far less appealing today. On AI, two decades of efficiency gains have only partially offset structural revenue pressure, and recent technology investments have delivered mixed cost savings;