Key Takeaways
- Deposits in Pakistani banks increased by 16% year-on-year to Rs. 40.8 trillion in September 2026.
- Bank lending rose 14.3% year-on-year to Rs. 15.4 trillion, growing faster than deposits.
- The advances-to-deposits ratio improved to 37.7% in September 2026 from 37% in August.
Pakistan’s banks witnessed a significant surge in deposits, with figures reaching Rs. 40.8 trillion in September 2026, marking a 16% year-on-year (YoY) increase from the same period last year. This growth, according to State Bank of Pakistan (SBP) data compiled by Arif Habib Limited, reflects a robust financial sector, with deposits rising from Rs. 35.2 trillion in September 2025.
On a month-on-month (MoM) basis, deposits grew by 4% from Rs. 39.2 trillion in August, adding approximately Rs. 1.6 trillion in a single month. This rapid increase in deposits has been a key factor in the overall financial health of the banking sector, with the SBP noting that bank deposits had risen 12.3% to Rs. 35.2 trillion in September 2025.
Bank lending also saw a substantial rise, increasing by 14.3% YoY to Rs. 15.4 trillion, compared to Rs. 13.5 trillion in September 2025. This growth in lending outpaced the increase in deposits, with lending growing 6% from Rs. 14.5 trillion in August. The advances-to-deposits ratio (ADR) improved to 37.7% in September 2026 from 37% in August, though it was still 54 basis points lower than the 38.2% recorded a year earlier.
Investments by banks, however, showed a different trend, with a 12.1% YoY increase to Rs. 40.1 trillion. Despite this growth, investments fell 2.5% from Rs. 41.2 trillion in August. The investment-to-deposits ratio (IDR) dropped to 98.3%, down 342 basis points YoY and 664 basis points MoM, indicating a shift in the banks' investment strategies.
These figures highlight the dynamic nature of Pakistan’s banking sector, with both deposits and lending showing strong growth. The SBP’s data underscores the resilience and adaptability of the financial institutions, as they navigate through economic challenges and opportunities.
The surge in bank lending and deposits suggests a growing confidence among depositors and borrowers, potentially driving economic growth. However, the decrease in the investment-to-deposits ratio may indicate that banks are focusing more on lending than on investments, which could have implications for the broader economy.
The SBP’s data also reveals that while the banking sector is robust, there is still room for improvement. The advances-to-deposits ratio, while improved, is still lower than the previous year, suggesting that banks may need to balance their lending and investment strategies more effectively to support sustainable growth.
