The State Bank of Pakistan (SBP) has unveiled the Mid-Year Performance Review of the Banking Sector for 2025.
The Review covers the performance and soundness of the banking sector for the period from January to June 2025 (H1CY25). It also briefly discusses the performance of financial markets as well as the results of the Systemic Risk Survey (SRS), which represents the views of independent experts about key current and potential future risks to financial stability.
The Review highlights that banks managed to grow their asset base by 11 per cent in H1CY25. Investments in government securities primarily supported the asset growth, reflecting the government’s needs from the banking sector.
Advances observed contraction across both public and private sectors. Nonetheless, fixed investment advances to SMEs continued to grow. On the funding side, deposits grew at an impressive pace of 17.7 per cent, leading to a decline in banks’ reliance on borrowings.
The Review notes that the credit risk of the banking sector remained contained. Non-performing loans of the sector declined during the period under review. However, due to contraction in advances, the gross NPLs to loans ratio marginally deteriorated to 7.4 per cent in June 2025.
NPLs:
Nonetheless, as the banks hold a higher stock of provisions for loan losses, the net NPLs to net Loans ratio clocked at negative 0.5 per cent, reflecting muted risks on a net basis. The earnings of the sector remained steady, backed by rising volumes of earning assets.
Accordingly, the Return on Asset (ROA) and Return on Equity (ROE) remained steady at 1.3 per cent (1.3 per cent in December 2024) and 21.3 per cent (21.5 per cent in December 2024), respectively. The solvency position of the banking sector also remained strong as the Capital Adequacy Ratio (CAR) improved to 21.4 per cent (20.6 per cent in December 2024) and was well above the minimum regulatory requirement.
The latest stress test results reveal that CAR of the banking sector is expected to remain comfortably above the minimum regulatory requirement of 11.5 per cent under both baseline as well as hypothetically severe stressed macro-financial scenarios over the two-year forecast horizon.
 has unveiled the Mid-Year Performance Review of the Banking Sector for 2025.){kind=link}
[…] State Bank of Pakistan (SBP) yesterday unveiled the Mid-Year Performance Review of the Banking Sector. It covers the performance and soundness of the banking sector for the period […]