KARACHI: Pakistan’s Islamic banking sector expanded during 2025, increasing its share in the country’s financial system with assets reaching nearly 23 percent of the overall banking industry and financing accounting for about 38 percent, according to the State Bank of Pakistan.
Data released in the central bank’s Islamic Banking Bulletin showed that Islamic Banking Institutions (IBIs) continued to grow during the year, strengthening their presence in the financial sector.
Islamic banking assets increased by Rs3.4 trillion during 2025 to reach Rs14.467 trillion by the end of December, compared with Rs11.070 trillion in December 2024.
From a market share perspective, Islamic banking assets represented 22.9 percent of the overall banking industry, while deposits accounted for 27.8 percent. The sector’s share in total financing rose to 38.1 percent, while its share in investments stood at 16.9 percent.
An analysis of the asset structure showed that net financing made up 39.1 percent of Islamic banking assets, while net investments accounted for 45.7 percent. The growth in assets was largely driven by a sharp increase in financing activity.
