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What are ASX financial shares?
ASX-listed companies that offer loans, savings, insurance, and money management or financial services are known as ASX financial shares. They include a range of banking, insurance, asset management, and share brokerage businesses.
The financial sector is one of the most significant on the Australian Securities Exchange (ASX), playing a central role in the health of the broader economy. From everyday consumer lending to complex capital markets activity, ASX-listed financial companies touch almost every corner of Australian economic life. Their scale and diversity make them a cornerstone consideration for many Australian investors building a long-term portfolio.
While bank shares constitute a significant component of the ASX financial sector, the Australian share market lists many other financial services firms. These include insurance companies, stock market operators, and brokerage firms. The sector also encompasses fast-growing fintech businesses, asset managers overseeing billions in superannuation and private wealth, and specialist lenders serving niche markets across Australia and beyond. In this article, we take a look at financial services firms other than banks and consider why they may be worth adding to your portfolio.
Why invest in them?
An investment in ASX financial shares can provide investors with diversification, dividend income, and the potential for long-term capital growth.
The breadth of the financial sector means it comprises several sub-sectors, each subject to different influences that can impact bottom lines.
Although economic forces affect each sub-sector differently, most financial shares tend to be cyclical. They perform favourably when the economy grows and typically do less well in economic downturns. This means ASX financial shares can be sensitive to economic cycles, resulting in share price volatility.
However, as the financial industry is one of the most critical components of developed economies, investing in this sector can be particularly rewarding.
Companies involved in wealth management and the stock market benefit from strong equity markets with substantial volumes of initial public offerings (IPOs). With the second half of 2026 shaping up to be an active period for ASX listings, driven by a backlog of companies that delayed IPOs in prior years, this sub-sector is well positioned to benefit.
Insurers also benefit from strong economies and stock markets. This is because insurers invest the money they receive from premiums, and the returns earned on these investments generate a significant proportion of insurance company incomes.
The sustained period of elevated interest rates also continues to benefit certain financial stocks. Higher rates allow lenders to earn more on their yielding assets, while insurers that frequently hold fixed-interest securities to back their policies can generate stronger returns on those holdings, helping to support profits.
Top financial stocks on the ASX
There are more than 400 companies listed in the financials sector of the ASX. You can invest in individual Australian finance companies or the sector as a whole via an exchange-traded fund (ETF).
The following three companies are some of Australia's most highly valued financial stocks (based on market capitalisation from high to low).
| Top ASX financial stocks | Company description |
| QBE Insurance Group Ltd (ASX: QBE) | A multinational insurance company headquartered in Sydney that provides a range of insurance and reinsurance services to individuals, businesses, and organisations worldwide |
| Insurance Australia Group Ltd (ASX: IAG) | One of the largest general insurance companies in Australia and New Zealand providing a wide range of general insurance products |
| ASX Ltd (ASX: ASX) | Operates the Australian Stock Exchange as a clearing house, payments systems facilitator, and market operator |
QBE Insurance Group
International insurer and reinsurer QBE offers one of the broadest product ranges in Australia. It offers all major general insurance lines to cover personal and commercial risks.
Products include home and contents, motor and travel insurance, and commercial insurance coverage for everything from cargo ships to wineries. At an international level, QBE covers various assets, including airports, air fleets, container ports, and construction activities.
QBE delivered a strong full year 2025 result, reporting a 21% lift in statutory net profit after tax (NPAT) to US$2,157 million. Funds under management jumped 17% to US$35.8 billion, driven by premium growth and robust investment returns. The combined operating ratio improved, with net catastrophe costs coming in well below the group's allowance, reflecting disciplined underwriting and portfolio optimisation efforts.
The Board declared a final dividend of 78 Australian cents per share, bringing the full year dividend to 109 Australian cents per share, up 25% on the prior year, representing a payout ratio of 50% of adjusted net profit after tax. The increased payout reflects the Board's confidence in the strength of QBE's balance sheet and its outlook for continued returns.
Insurance Australia Group
Insurance Australia Group is behind some of Australia and New Zealand's most trusted insurance brands, providing a broad range of general insurance products to protect homes, lifestyles, and businesses. Its portfolio includes well-known brands such as NRMA Insurance, CGU, SGIO, SGIC and WFI. IAG has also been expanding through acquisition, completing the purchase of 90% of RACQ's insurance business in September 2025 for $855 million, adding approximately $1.3 billion in gross written premium to its portfolio.
IAG reported a strong full year FY25 result, with NPAT rising 51.3% year on year to $1.36 billion. Insurance profit grew 21.2% to $1.74 billion, driven by an 8% increase in net earned premiums. Natural perils costs came in $195 million below allowance, contributing meaningfully to the result.
The Board declared a full year FY25 dividend of 31 cents per share, up 14.8% on the prior year. Looking further ahead, IAG has outlined its Ambition 2030 strategy, targeting more than $25 billion in gross written premiums and over 11 million customers, underpinned by technology investment and AI adoption.
ASX
ASX is the company behind the Australian Securities Exchange. It acts as a market operator, clearing house, and payments systems facilitator, offering listings, trading, clearing, settlement, technology, data, and post-trade services across asset classes including equities, fixed income, commodities, and energy.
ASX reported operating revenue of $1.11 billion for FY25, up 7%, with underlying net profit after tax rising 7.5% to $510 million, driven by growth across its Markets, Technology and Data, and Securities and Payments divisions. The result came despite elevated expenses, with the company responding to an ASIC inquiry into its governance and risk management practices. The Board declared a fully franked final dividend of 112.1 cents per share, bringing total FY25 dividends to 223.3 cents per share, up 7.4%.
Looking ahead, ASX flagged that costs in FY26 are expected to rise further as it responds to the ASIC inquiry, with total expense growth guided at between 14% and 19%. However, the company continues to pursue margin expansion over the medium term, with interest rate derivatives trading volumes reaching record levels in early 2026 amid heightened macroeconomic and geopolitical volatility.
What to look for when buying ASX financial shares
The right ASX financial shares can help grow your wealth, so it is worth taking your time when assessing a potential investment in this sector. Share investing involves risk, so it is imperative you understand your financial goals and investment strategy.
Don't be afraid to get advice if you need it. Stay across the performance of the economy and financial market, and be aware of how changes can impact the financial outlook of shares in the finance sector.
Keep up to date with announcements by the Reserve Bank of Australia, which sets the cash rate from which other economic interest rates are set. Research and compare companies in the sector you are considering buying shares in.
Keep track of companies you are interested in and review their performance regularly. Consider how a company you are interested in might contribute to your share portfolio.
Pros and cons of investing in financial shares
There are benefits to investing in the financial sector, including:
- A healthy economy requires a healthy financial sector to provide the services that keep non-financial businesses running. As the economy expands, more people and businesses require financial services, which can lead to increased revenue and profitability for financial firms.
- Regulatory oversight can provide transparency and stability, with regulatory measures aiming to ensure the soundness and integrity of financial institutions.
The disadvantages of investing in financial shares include:
- Financial shares tend to be cyclical – they perform well when the economy is growing and tend to do less well in economic downturns. This means ASX financial shares can be sensitive to economic cycles, resulting in share price volatility.
- Regulation can be costly – a change in the amount or type of regulation of financial companies can impact institutions' profitability and operations.
Are ASX financial shares a good investment?
ASX financial shares can provide an investor with valuable diversification benefits, dividends, and the potential for capital growth. Whether ASX financial stocks are a good investment depends on whether they align with your investing profile and goals. Whether a particular investment is right for you depends on your financial situation and risk tolerance.
Financial stocks tend to be cyclical, with performance varying depending on economic cycles. For this reason, ASX financial shares may be more suitable for an investor with a longer time horizon. This provides time to ride out economic downturns and benefit from subsequent growth periods.
Before making an investment decision about any financial product, you should consider the advice of your financial adviser or seek financial advice if required.
