Pakistan’s banking sector saw a notable increase in total deposits during December 2025, with scheduled banks holding Rs37.43 trillion, reflecting a 5.8% rise from Rs35.38 trillion at the end of November. When compared to the same month last year, deposits have surged 23.6% from Rs30.28 trillion, highlighting sustained growth in the country’s deposit base, according to data released by the central bank.
Alongside deposit growth, total advances by banks also rose during the month. December saw advances increase by 10.9% to Rs14.88 trillion compared to Rs13.42 trillion in November. However, when compared year-on-year, advances remain lower than the Rs16.01 trillion recorded in December 2024, indicating a moderation in credit growth over the past year.
The combined effect of moderate deposit momentum and a strong monthly inflow of advances led to a rise in the Advances to Deposits Ratio (ADR), which reached 39.8%—an increase of 182 basis points from the previous month. The ADR reflects the proportion of deposits being utilized as loans and is a key indicator of banking sector liquidity and lending activity.
Investments by banks also recorded growth, albeit at a slower pace. Total investments increased 3.2% month-on-month to Rs37.91 trillion, while annual growth was substantial at 30.1% compared to December 2024. Despite the increase in investment levels, the Investment to Deposit Ratio (IDR) declined by 254 basis points month-on-month to 101.3%, though it increased by 509 basis points compared to the previous year, signaling a rising emphasis on investment deployment relative to deposits over the long term.
The data indicates that banks are continuing to mobilize deposits effectively, while also balancing advances and investments to maintain liquidity and compliance with regulatory requirements. The moderation in advances over the year highlights the cautious lending approach adopted by banks amid economic uncertainties, even as investments continue to expand, reflecting opportunities for relatively safe returns.
Central bank analysts note that the combined trends of deposit growth, credit expansion, and investment management reflect ongoing adjustments within the banking sector to optimize liquidity, profitability, and risk. The increase in ADR suggests an uptick in lending activity on a monthly basis, while the stable IDR points to sustained deployment of resources into investment instruments to generate returns.
Overall, the banking sector’s December performance demonstrates resilience in deposit mobilization, cautious lending, and strategic investment allocation. These trends are closely monitored by regulators and investors as indicators of sector stability, credit availability, and financial health in Pakistan’s evolving economic landscape.
With deposits reaching record levels, continued oversight on advances and investment deployment will be critical for maintaining balance in liquidity, promoting lending growth, and ensuring that banks continue to support both economic activity and capital market development.
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