State Bank of India suffered the largest decline in market capitalization among the biggest lenders in the Asia-Pacific region in the first quarter, dragged by a short seller's attack on the Adani Group and an overall weaker sentiment for the financial sector.
India's biggest lender by assets ranked 14th among the region's biggest 20 banks at the end of the first quarter, down three notches from the prior quarter, after its market cap fell 14.66% to $56.92 billion, according to data compiled by S&P Global Market Intelligence.
State Bank of India, majority owned by the Indian government, said its exposure to Gautam Adani's infrastructure-to-energy conglomerate was less than 1%. An analysis of the financial metrics of banks with known exposure to the Adani Group supports their assertion that any fallout from the group's troubles does not pose any significant credit profile risk to Indian banking.
Japan's Mitsubishi UFJ Financial Group Inc., too, logged a double-digit decline in market capitalization during the January-to-March quarter, though it retained its eighth slot on the list with a market cap of $75.58 billion as of March 31.
More than two-thirds of the region's largest banks logged declines in market capitalization during the three months ended March 31, according to Market Intelligence data, as the failures of Silicon Valley Bank and Signature Bank and the government-sponsored takeover of Credit Suisse Group AG by UBS Group AG rattled investors in the financial sector across the globe.
Chinese banks retain top slots
Chinese banks continued to sit atop the list of largest Asia-Pacific banks in the first quarter, with Industrial and Commercial Bank of China Ltd. leading the pack with a market cap of $221.27 billion as of March 31. In addition to ICBC, four other banks from China logged increases in market cap during the first quarter: China Construction Bank Corp., Agricultural Bank of China Ltd., Bank of China Ltd. and Bank of Communications Co. Ltd., the Market Intelligence data show.
Chinese lenders are relatively lesser exposed to the global banking industry and have gained from a recovery in lending as the world's second-biggest economy emerges from the COVID-19 pandemic.
In total, Chinese banks occupied eight slots on the Top 20 list, while Australia had the second-most banks with four, and India took third with three banks. Two banks each from Japan and Indonesia made it to the list, while DBS Group Holdings Ltd. was the only Singaporean lender to feature on the list.
China's Bank of Communications improved its standing on the list by four notches after its market cap rose 9.42% to $51.23 billion as of March 31. DBS Group rose two notches up on the list to number 11, while Bank of China, National Australia Bank Ltd. and Sumitomo Mitsui Financial Group Inc. each improved one notch from the previous quarter.