Bank deposits surge 23.6% YoY to Rs37.4 trillion in December 2025

Banking sector deposits rose 23.6% year-on-year in December 2025 to Rs37.43 trillion, marking the second-highest growth on record, supported by higher remittances through formal channels and government-led digitisation efforts, according to data released by the State Bank of Pakistan (SBP).

Deposits increased from Rs30.28 trillion a year earlier and posted a 5.8% month-on-month rise. Analysts attributed the strong expansion to a sustained shift toward documented inflows and digital payments. 

According to AKD Securities, higher remittances via official channels and documentation measures to broaden the tax base were the main drivers.

Despite the deposit growth, bank lending remained muted. Advances stood at Rs14.88 trillion in December, down 7.1% year-on-year, though up 10.9% from November. The advance-to-deposit ratio eased to 39.8% in December from 52.9% a year earlier, and rose modestly from 37.9% in November.

In contrast, bank investments increased 30.1% year-on-year to Rs37.91 trillion, with a 3.2% month-on-month gain. The investment-to-deposit ratio climbed to 101.3% in December from 96.2% a year earlier, although it edged down from 103.8% in November, indicating continued preference for government securities.

The data followed the central bank’s decision earlier this week to keep the policy rate unchanged at 10.5% while cutting the cash reserve requirement to 5.0% from 6.0% on a fortnightly average basis and lowering the daily minimum maintenance requirement to 3.0% from 4.0%.

Brokerage estimates suggest the CRR cut could release about Rs313 billion into the banking system. However, analysts cautioned that the impact on private sector credit may be limited, noting that the released liquidity equals about 2.2% of total industry advances and that banks continue to rely on borrowings to invest in government securities.