Pakistan banking sector remains resilient in H1CY26: SBP

According to Business Recorder, the State Bank of Pakistan (SBP) reported on Monday that the banking sector kept its performance and strength through the first half of calendar 2026. Its balance sheet grew 9.1 per cent, mainly because banks put more money into government securities, while advances rose in both public and private segments. Banks also collected Rs3.673 trillion in additional deposits over the same period.

The central bank saw no serious threat to financial stability from credit risk during the period. The non-performing loan ratio fell to 5.5 per cent in June 2026 from 6.1 per cent in December 2025, while provisioning coverage rose to 110.2 per cent from 107.7 per cent. The capital adequacy ratio stood at 19.6 per cent in H1CY26, which indicates that solvency remained strong.

Profitability eased, with return on assets slipping to 1.1 per cent in June 2026 from 1.3 per cent a year earlier and return on equity falling to 19 per cent from 21.3 per cent. The SBP's stress tests suggested that large systemically important banks should stay solvent even under severe shocks over a two-year horizon. Equity market stress increased during the half, largely because of unfavourable geopolitical events in the Middle East, while currency and money markets were calmer.