Banking sector advance-to-deposit ratio rebounds to 39.8% in December 2025

The banking sector’s gross Advance-to-Deposit Ratio (ADR) rose to 39.8% in December 2025, reversing a recent downward trend, according to data released by Arif Habib Limited on Thursday.

The brokerage firm said ADR increased from 37.9% in November 2025, marking a month-on-month rise of 182 basis points. On a year-on-year basis, however, ADR remained lower by 1,311 basis points compared with 52.9% recorded in December 2024.

The Investment-to-Deposit Ratio (IDR) declined to 101.3% in December from 103.8% in November, a fall of 254 basis points on a monthly basis. Year-on-year, IDR was higher by 509 basis points, compared with 96.2% in December 2024.

According to the brokerage, the increase in IDR on an annual basis suggests banks continue to channel a significant portion of deposits into government securities, reflecting attractive yields and subdued private sector credit demand.

Banking sector deposits recorded strong growth, rising 23.6% year-on-year and 5.8% month-on-month to Rs37.4 trillion in December 2025.

Investments grew at a faster pace than both deposits and advances, increasing 30.1% year-on-year to Rs37.9 trillion.

Advances stood at Rs14.9 trillion in December, posting a month-on-month increase of 10.9%, while remaining 7.1% lower on a year-on-year basis.