Pakistan’s bank deposits surge 14.1% to PKR 35.5 trillion in June

Pakistan’s banking sector posted a robust 14.1% year-on-year (YoY) growth in total deposits, reaching PKR 35.5 trillion by the end of June 2025, up from PKR 31.1 trillion in June 2024, according to the latest data released by the State Bank of Pakistan (SBP).

The growth in deposits reflects continued expansion in the financial sector’s liquidity base amid relatively stable macroeconomic conditions.

Meanwhile, bank advances rose by 8.7% YoY to PKR 13.5 trillion (June 2024: PKR 12.4 trillion), indicating modest credit growth in the real economy. However, the increase in banking sector investments significantly outpaced advances, soaring by 21.2% YoY to PKR 36.6 trillion from PKR 30.2 trillion a year earlier.

Key Ratios:

• Advance-to-Deposit Ratio (ADR): 38.1% in June 2025, down 186 basis points (bps) YoY and 172bps month-on-month (MoM).
• Investment-to-Deposit Ratio (IDR): 103.0%, up 608bps YoY but down 282bps MoM.

Analyst Commentary:

“The banking sector continues to favor government bonds over private sector lending, which is evident from the sharp rise in investments and the decline in ADR,” said an analyst . “This trend reflects risk aversion in the lending landscape, as banks opt for government papers that offer attractive returns amid uncertain credit conditions.”

He added that the persistent decline in the ADR suggests muted private sector credit demand or tighter lending standards, while the rising IDR underscores the sector’s growing reliance on risk-free assets to deploy surplus liquidity.

Another banking analyst, elaborated that : “With real interest rates stabilizing and inflation moderating, deposit mobilization remains strong.

However, the divergence between deposit and credit growth signals a cautious lending environment, possibly linked to lingering structural issues in key sectors.”

Looking ahead, analysts expect credit growth to gradually pick up in H2 2025 if macroeconomic reforms stay on course and policy rates ease.