Islamic banking continued to expand in Pakistan during the first half of 2026, with Islamic banks increasing their share of the country’s total banking assets and deposits, according to the State Bank of Pakistan’s (SBP) Mid-Year Performance Review of the Banking Sector.
Islamic banking institutions grew by 13 percent during January to June 2026, compared with 11.5 percent growth in the same period last year.
Their share of total banking assets increased to 23.7 percent by the end of June from 22.9 percent in December 2025.
Their share of total deposits also rose to 29.2 percent from 27.8 percent over the same period.
The growth was supported by both full-fledged Islamic banks and conventional banks expanding their Islamic banking operations through dedicated branches and windows.
The broader banking sector also grew during the first half of the year. Total deposits increased by 9.3 percent to Rs. 43,332 billion, while the banking sector’s total balance sheet grew by 9.1 percent to Rs. 68,997 billion.
The figures show that Islamic banking is growing faster than the overall banking sector and taking a larger share of Pakistan’s financial market.
The increase also reflects growing demand for Shariah-compliant banking products as more banks expand their Islamic banking services.
