Asia-Pacific financial institutions will face a turbulent 2025 due to expected market volatility stemming from US policy changes, S&P Global Ratings said in a Monday release.

Although ratings should remain relatively stable for most of the region's financial institutions this year, an interconnected global market poses risks and complexity, the rating agency said.

S&P credit analyst Gavin Gunning said predicting the knock-on effects from increased uncertainty and volatility has become difficult, but the potential for profound direct impacts remains.

Sovereign rating changes could directly impact bank ratings, given support for systemically important banks in 16 of the 19 banking systems covered by S&P.

Furthermore, potential market volatility could hit non-systemically important institutions, which are less likely to receive state support.