Pakistan’s banking sector recorded a modest uptick in deposit returns in February 2026, even as lending rates continued to decline.

Data released by the State Bank of Pakistan shows the weighted average return on deposits rose by 7 basis points to 5.04 percent in February, compared to 4.97 percent in January.

However, on a year-on-year basis, deposit returns remained subdued, declining by 42 basis points from 5.46 percent recorded in the same month last year.

Meanwhile, the weighted average lending rate across scheduled banks fell to 11.02 percent, marking a drop of 37 basis points from the previous month and a sharper decline of 139 basis points compared to February 2025.

As a result, the banking spread—the gap between lending and deposit rates—narrowed significantly to 5.98 percent in February, down from 6.41 percent in January.

In real terms, lending rates eased to 8.12 percent from 8.36 percent a month earlier, reflecting easing inflationary pressures. At the same time, real deposit returns slipped to 1.94 percent from 2.14 percent, highlighting continued pressure on savers despite the marginal increase in nominal returns.