Chinese banks climb as HDFC Bank sinks in Q1 2026 rankings

Agricultural Bank of China rose 36.5% on stimulus and infrastructure support.

Asian banks remained prominent in global banking rankings in the first quarter of 2026, although performance across the region was mixed as Chinese lenders advanced, whilst India's HDFC Bank recorded one of the steepest declines.

Chinese state-owned banks strengthened their positions, with Agricultural Bank of China increasing its market capitalisation by 36.5% and China Construction Bank rising 31.4%, supported by government stimulus measures and infrastructure spending, according to GlobalData. 

China Merchants Bank was the only major Chinese lender to post a decline, falling 2.3% amidst regulatory uncertainty affecting private-sector lenders.

In contrast, India's HDFC Bank suffered the sharpest drop in the global rankings, falling from fifth place to 23rd. 

The lender faced investor concerns over a post-merger loan-to-deposit ratio nearing 100%, whilst the resignation of chairman Atanu Chakraborty in March 2026 over "differences over values and ethics" further weighed on sentiment. 

HDFC Bank's shares fell 10% over three trading sessions, whilst foreign investors withdrew more than $7.4m (₹70,990 crore) from Indian equities during the month.

Despite the gains by some Asian lenders, the world's most valuable bank remained JPMorgan Chase, which reported a market capitalisation of $793.4b as of 31 March, up 16.8% from a year earlier. 

The bank's performance was supported by record trading revenue, a $20b technology budget and its diversified banking operations.

Global banking rankings shifted significantly during the quarter, driven by deregulation in the United States, strong gains amongst European banks and continued momentum in investment banking.

European banks recorded some of the strongest increases in market value. The EURO STOXX Banks Index rose 76% in 2025, its best performance on record, whilst Banco Santander gained 56.4%, BBVA rose 51.9%, and UniCredit increased 19.0%.

According to GlobalData, European lenders benefited from a steepening yield curve, interest rate normalisation by the European Central Bank and a weaker US dollar through most of 2025. Santander's exposure to Latin America and BBVA's focus on emerging markets also supported investor demand.

In the US, deregulation helped lift banking stocks, with the country's six largest banks adding a combined $600b in market value during 2025. 

The Trump administration's revised Basel III framework released an estimated $87.7b in capital across the banking system, enabling lenders to increase share buybacks and lending activity.

Goldman Sachs gained 47.8% after completing its exit from consumer banking and focusing on trading and wealth management. 

Citigroup rose 49.9% following a major restructuring programme under chief executive Jane Fraser, which included reducing management layers from 13 to eight and cutting 20,000 jobs.

Morgan Stanley also reported strong performance, with its wealth management division attracting $122b in new assets during the fourth quarter of 2025.

GlobalData said valuations recorded at the end of March have since come under pressure following President Donald Trump's "Liberation Day" tariff announcement. Citigroup shares fell 13%, and Goldman Sachs declined 11% within days.

The outlook has also been affected by a stronger US dollar, which has rebounded nearly 4% from its January low to a 10-month high above 100.64 on the DXY index after falling more than 9% in 2025.

GlobalData attributed the move to the US-Iran conflict, which has effectively closed the Strait of Hormuz, pushing energy prices higher and raising inflation concerns. 

Markets now expect the US Federal Reserve to keep interest rates unchanged until at least December 2026.

The firm said a stronger dollar could erode some of the factors that supported European banks' outperformance in 2025, whilst higher oil prices may place additional pressure on major energy-importing economies such as Japan and India. 

It added that banks which strengthened their capital positions and clarified their long-term strategies during 2025 are likely to be better placed to navigate the changing market environment.