Indian banks among Asia Pacific's worst-performing banks

Sri Lank and Bangladesh lead the list.

Sri Lankan and Bangladeshi banks led the rankings of 15 top-performing Asia-Pacific bank stocks in the three months ended Sept. 30, while the list of laggards was heavily dominated by Indian banks.

According to a report from SNL Financial, Colombo, Sri Lanka-based Seylan Bank Plc was the best-performing bank during the third quarter, with a total return of 35.26%. Also on the list of 15 top performers were four other Sri Lankan banks and three Bangladeshi companies.

In the past several years, Seylan Bank's asset quality has improved significantly. The bank's nonperforming loan ratio dropped to 10.9% as of June 30 from its peak of 29.7% in 2009, according to Fitch Ratings.

Fitch recently affirmed the bank's national long-term rating at A-(lka), citing a high likelihood of extraordinary state support for the company, based on its systemic importance.

Following Sri Lanka and Bangladesh, Indonesia contributed two entries to the list. Bandung, Indonesia-based PT Bank Nusantara Parahyangan Tbk ranked fourth with a total return of 26.35%.

The other Indonesian bank, Jakarta-based PT Bank Rakyat Indonesia Agroniaga Tbk, is relatively cheap, with a price-to-tangible book ratio of 89.49%.

The largest bank by market value among the top 15 performers is Beijing-based Bank of Beijing Co. Ltd., which has a market capitalization of US$13.9 billion. The stock is also among the most inexpensive on the list, currently trading at 98.11% of its tangible book value.

Apart from these banks, one bank from each of Japan, Thailand, Pakistan and Taiwan were included on the list.

Here's more from SNL Financial:

On the other end of the rankings, 12 of the 15 worst-performing Asia-Pacific banks were Indian. Mumbai-based IDBI Bank Ltd. led the pack with a negative total return of 44.27% during the three months ended Sept. 30. The bank reported a 65.4% year-over-year drop in net income for the quarter ended June 30. The bank also faced an inquiry by the Central Bureau of Investigation over 9.5 billion Indian rupees of loans to troubled Kingfisher Airlines.

IDBI Bank is the cheapest stock on either end of the rankings. The bank's shares trade at 42.3% of its tangible book value, although the stock is not alone in trading at a low valuation among Indian banks.

The price-to-tangible book ratios of shares of the 12 Indian banks, all owned by the government, range from 42.3% to 73.6%.

Mumbai-based Bank of India is the largest company by assets on the list with total assets of US$96.44 billion as of March 31.

The bank reported a 16.44% decline in net profit for the quarter ended June 30 from the year-ago quarter, while the situation at other state-owned Indian banks was similar as they struggled with deteriorating asset quality and profitability.

The National Stock Exchange of India's CNX PSU Bank index dropped 13.0% in the third quarter.

The three non-Indian banks on the list include Jakarta-based PT Bank of India Indonesia Tbk, a majority-owned subsidiary of Bank of India.

The other entries are Makati City, Philippines-based Philippine Bank of Communications and Caloocan, Philippines-based Philippine Business Bank Inc.