ASX 200 financial shares outperformed their peers in FY25, with the S&P/ASX 200 Financials Index soaring 24.45% in value.
If we add dividend income, the sector's total gross return was 29.39%. This made financials the best performer of the 11 market sectors.
By comparison, the benchmark S&P/ASX 200 Index (ASX: XJO) lifted 9.97% and provided total gross returns of 13.81% over the year.
After all the hype over Commonwealth Bank of Australia (ASX: CBA) shares and their seemingly unstoppable northward trajectory, you may assume the big four bank made the list of the top five ASX 200 financial stocks of the year.
But it ain't the case.
Here are the outperforming ASX 200 financial shares of FY25 for price growth.
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Best 5 ASX 200 financial shares of FY25
1. Generation Development Group Ltd (ASX: GDG)
ASX 200 small-cap financial share, Generation Development Group, leapt 114% to close at $5.50 on 30 June.
Generation Development Group is a market leader in retirement and investment solutions, including bonds.
Blackwattle Small Cap Quality Fund portfolio managers Robert Hawkesford and Daniel Broeren see further tailwinds ahead.
The analysts say superannuation tax reform is now likely, which would make investment bonds more attractive.
They're also positive about Generation Development's new strategic alliance with US global asset management giant, Blackrock.
Hawkesford and Broeren said:
Despite the recent share price run, we still see plenty more upside as GDG capitalises on the structural tailwinds of managed account penetration, superannuation tax reform and the retirement income covenant.
2. Zip Co Ltd (ASX: ZIP)
Zip is a key player in the global buy now, pay later payments industry.
The Zip share price rose by 110% to finish the year at $3.07 per share.
This company has turned itself around over recent years after shifting its focus from mass-global network growth to profitability.
Last month, the ASX 200 financial share ripped on upgraded earnings guidance for FY25.
Zip now expects to deliver cash earnings before tax and depreciation (EBTDA) of at least $160 million.
The prior guidance was at least $153 million.
The company also said its FY25 earnings are tracking within its two-year target ranges.
3. Hub24 Ltd (ASX: HUB)
HUB24 operates an investment and superannuation platform.
The Hub24 share price rose by 92% to finish the year at $89.17 per share.
Today, the ASX 200 financial share hit a new all-time high of $96.21.
Tony Paterno from Ord Minnett has a sell rating on this ASX 200 financial share — find out why.
4. Insignia Financial Ltd (ASX: IFL)
The Insignia share price ascended 59% to close at $3.63 per share on 30 June.
The financial services company was pursued by two takeover suitors in FY25 — Bain Capital Private Equity and CC Capital Partners.
Bain pulled out in May, with Insignia saying this was due to "macro uncertainty caused by the volatility in global capital markets".
Insignia Financial is still in discussions with CC Capital Partners and issued an update on this last week.
Insignia said:
CC Capital has informed Insignia Financial that it continues to actively work towards making a binding bid for the company. Specifically, CC Capital is finalising financing and investment committee approvals, a process that is expected to be completed in the next two weeks.
Investors were pleased by the update, with the ASX 200 financial stock lifting 5% on the news.
5. Netwealth Group Ltd (ASX: NWL)
Netwealth operates a wealth management business and provides superannuation and investment administration platforms.
Netwealth shares lifted 52% to close at $33.59 per share on 30 June.
The Netwealth share price has since gone further, rising to a record high of $35.10 today.
Paterno also has a sell rating on this ASX 200 financial share.
What about CBA shares?
CBA shares rose by 45% to finish the year at $185 on 30 June.
The CBA share price hit a record high of $192 per share a few days earlier.
It was the 7th best-performing ASX 200 financial share overall.
