Mainland shares were within sight of a two-month high of 2,344 points after trading above the 2,300 level for the entire session.
Financials led the rally with Founder Securities up 3 percent and China Pacific Insurance Company rising 1.5 percent.
Three of China's largest banks have posted weak 2012 net profit this week but investors are cheering the fact that bad-loan ratios declined overall as lenders cut their exposure to non-performing loans.
"The worst is probably over. We see pressure on the net interest margin side but the sense is that non-performing loans are not going to get a lot worse in 2013," said Timothy Wong of DBS Group Research on "Cash Flow."
Oz Resources Rebound
Iron ore miners led gains in Sydney with Fortescue Metals rallying 4.4 percent after JP Morgan upgraded the firm to overweight from neutral. This sparked a sector-wide rally with Atlas Iron advancing 0.9 percent.
Shares of QBE rallied 3.7 percent after its chief executive said that Australia's largest insurer by market value would exit unprofitable businesses.
(Read More: Are Aussie Stocks Headed for a Correction?)
The index finished below the 5,000 mark for the sixth straight session and one expert warned of further difficulties down the road for Australian investors.
"It's been easy until now to make money. You could buy everything that was paying a dividend but from now on, it's going to be much harder. You're going to have to find the businesses that perform and you'll see a lot more differential between the performance of different stocks out there," said Steve Johnson, CIO of investing research publication Intelligent Investor.