The banking sector’s gross Advance-to-Deposit Ratio (ADR) rose to 39.8 percent in December 2025, up from 37.9 percent in November 2025, despite a small drop in advances (loans) during the period.
On a year-on-year basis, ADR remained significantly lower, down 1,311 basis points from 52.9 percent in December 2024.
Loans (advances) stood at Rs. 14.9 trillion in December 2025, registering a 10.9 percent month-on-month increase, but remained 7.1 percent lower on a year-on-year basis.
The banking sector’s Investment-to-Deposit Ratio (IDR) declined to 101.3 percent in December 2025, compared to 103.8 percent in November 2025. Despite the sequential drop, IDR was 509 basis points higher year-on-year, up from 96.2 percent in December 2024.
According to Arif Habib Limited (AHL), the higher annual IDR suggests that banks continue to allocate a larger share of deposits toward government securities, amid attractive yields, subdued private-sector credit demand, and cautious lending conditions.
Banking sector deposits recorded a 23.6 percent year-on-year and 5.8 percent month-on-month uptick to Rs. 37.4 trillion in December 2025.
Investments expanded more than both deposits and advances, increasing 30.1 percent year-on-year to Rs. 37.9 trillion.
Zia saqlain