Banks curb expansion into capital-heavy businesses

Retail banking participation fell to 9% in this year’s survey.

Asia-Pacific (APAC) financial firms are planning further regional expansion, but banks are expected to remain selective about businesses that require heavy use of their balance sheets.

Most intend to build on existing businesses rather than make large moves into unfamiliar markets. 

Two-thirds plan to increase the scale of current operations, 63% plan to broaden their products and services, and 31% expect to enter new markets, according to the ASIFMA 2026 APAC Capital Markets Survey, conducted with KPMG.

For banking businesses, expansion is more measured. Commercial banking, investment banking, custody and commodities each ranked at about 25% amongst the product and service lines respondents intend to expand. 

The survey said these businesses require more balance-sheet capacity or depend heavily on client relationships, making firms more selective about committing capital. 

Investment banking nevertheless accounted for a larger share of respondents’ existing activities this year, rising five percentage points to 43%. 

Commercial, corporate and institutional banking increased to 34%, whilst prime brokerage rose six points to 34%. Retail banking fell to 9%. 

The survey covered 34 ASIFMA members from the buy and sell sides. This year, 60% of respondents were sell-side firms, compared with 40% from the buy side.  

About 66% of respondents said they planned to expand in APAC over the next three years, up from 59% last year and 40% in 2023/24. 

Singapore remains the main regional expansion target, cited by 47% of respondents, followed by Hong Kong SAR and South Korea at 44% each. 

Chinese Mainland and Japan were at 41%, whilst Australia, India and Taiwan were at 38%. South Korea recorded the biggest increase, from 21% in 2025 to 44% this year. Interest in Mainland China has fallen from 88% in 2021 to about 41%. 

Banks are also looking at regulated digital assets as a way to improve settlement and balance-sheet efficiency. 

The survey ranked tokenised financial assets and stablecoins amongst the digital products with the most commercial value. 

Respondents said regulatory certainty and a clear business case were the main conditions needed before making larger investments in digital assets, each cited by 26%, whilst 19% pointed to risk management, governance and compliance requirements.