SBP flags stronger banking resilience, 9.1% balance sheet growth in H1CY26

The State Bank of Pakistan reported that the banking sector's balance sheet grew 9.1% to Rs68,997 billion in the first half of CY26, according to its Mid-Year Performance Review. Most of the increase came from higher holdings of government securities, which accounted for 79.4% of the rise, while lending contributed 8.7%. Investments now make up 63.3% of total assets, up from 61.8% in December 2025.

Within government securities, Market Treasury Bills recorded the largest increase, adding Rs2,943bn and lifting their share to 20.1% by June 2026. Gross advances rose only 2.9% over the half, compared with a 15.2% contraction a year earlier. The gross NPL ratio fell to 5.5% from 6.1%, while provisioning coverage improved to 110.2%.

After-tax profit reached Rs370 billion against Rs365bn a year earlier, but the cost-to-income ratio climbed to 49.9% and return on equity eased to 19.0%. The capital adequacy ratio moderated to 19.6%, yet the SBP said the sector remained solvent under its latest macro stress tests. Liquidity coverage and net stable funding ratios stayed well above the 100% regulatory threshold.