Pakistan’s banking sector continued to grow steadily, with Bank Deposits increasing by 12.3% year-on-year to reach Rs. 35.2 trillion in September 2025, according to data released by Arif Habib Ltd. The rise shows ongoing confidence in the banking system despite economic challenges and high interest rates.
Alongside deposits, advances also climbed by 9.4%, reaching Rs. 13.5 trillion during the same period. This growth reflects sustained demand for credit, even though borrowing costs remain elevated. Analysts believe that businesses are continuing to seek financing to manage operations and expansion, though banks remain cautious in lending.
The report also highlighted a significant rise in investments, which jumped 16.7% to Rs. 35.8 trillion, compared to Rs. 30.7 trillion in the same month last year. This increase was largely driven by banks’ growing preference for risk-free government securities, which offer stable returns amid uncertain economic conditions.
The Advances-to-Deposits Ratio (ADR) stood at 38.2% in September 2025, slightly lower than 39.3% a year earlier. This suggests a minor slowdown in lending activity. Meanwhile, the Investments-to-Deposits Ratio (IDR) rose to 101.7%, up 377 basis points year-on-year, showing that banks are channeling more funds into government papers instead of private sector loans.
On a month-on-month basis, Bank Deposits increased by 2.2%, while advances grew by 2.0%. However, investments dipped slightly by 1.3% compared to August 2025, likely due to seasonal adjustments and changes in treasury placements.
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Overall, the steady rise in Bank Deposits reflects strong liquidity in the financial sector. The data indicates that Pakistan’s banks are maintaining a balanced approach between lending and investing, focusing on stability and low-risk returns amid a challenging economic environment.
