Pakistan’s Islamic banking industry is projected to maintain strong expansion, with total assets expected to reach Rs18–19 trillion by December 2026, up from Rs14.47 trillion in December 2025, according to industry projections shared during a media briefing hosted by Meezan Bank.
The briefing was addressed by Ahmed Ali Siddiqui, Group Head Consumer Finance; Farhan Ul Haq Usmani, Head of Shariah Audit; and Muhammad Raza, Group Head General Services & Customer Support Group. The session outlined market trends, regulatory developments, and the future outlook for Islamic banking in Pakistan.
Industry estimates suggest Islamic banking deposits could rise to Rs13.5–14.5 trillion by end-2026, compared with Rs11.04 trillion a year earlier. The sector’s share of total banking assets is projected to increase to 25–27%, up from 22.9%, while its share in total banking deposits is expected to grow to 30–32% from 27.8%.
Islamic financing is also forecast to expand, with the financing portfolio projected to reach Rs7.0–7.8 trillion by December 2026, compared with Rs5.65 trillion in 2025, reflecting rising demand for Shariah-compliant financing across consumer, SME, agriculture, corporate, and public-sector segments.
Speakers said the sector’s growth is being driven by increasing customer preference for Islamic financial products, supportive regulatory policies, expanding branch networks, higher Sukuk issuance, and Pakistan’s broader transition toward a Riba-free banking framework.
Over the past five years, Islamic banking has recorded sustained growth. Total assets increased from Rs5.27 trillion in December 2021 to Rs14.47 trillion by December 2025, while deposits rose from Rs3.62 trillion to Rs11.04 trillion during the same period. The Islamic financing portfolio expanded from Rs2.35 trillion to Rs5.65 trillion.
According to the projections, Islamic banking assets grew 23.1% in 2024 and 30.7% in 2025, indicating strong underlying demand and rising public confidence in Shariah-compliant banking services.
Branch expansion remains a key growth factor, with the Islamic banking network expected to reach 7,300–7,800 branches nationwide by December 2026, compared with more than 6,700 branches in 2025. Digital banking channels are also expected to play a growing role in improving access to Islamic financial services and supporting financial inclusion.
Industry participants noted that Pakistan’s transition target toward Islamic banking by 2027–2028 is likely to accelerate sector transformation, prompting both dedicated Islamic banks and conventional banks operating Islamic windows to expand offerings and customer outreach.
The briefing also highlighted that rising sovereign Islamic financing requirements and continued Sukuk issuance are strengthening the country’s Islamic finance ecosystem, while growing public trust is supporting deposit mobilisation and retail banking growth.
If current trends continue, Islamic banking assets could exceed Rs25 trillion by 2028, reinforcing Pakistan’s position among the fastest-growing Islamic banking markets globally.
Officials said the December 2026 figures represent indicative industry projections based on prevailing trends and may vary depending on economic, regulatory, and market conditions.
