The State Bank of Pakistan (SBP) has stated that the country’s banking sector is now better prepared to handle economic shocks, following significant growth and improved financial stability in 2025.
According to the SBP’s latest Financial Stability Review (FSR) 2025, Pakistan’s financial sector expanded by 15.1% over the past year. This growth was supported by a rise in bank deposits, a decline in non-performing loans, and stronger capital positions across financial institutions.
The central bank noted that the overall financial system remained resilient despite global economic uncertainties. Key indicators also improved, with the assets-to-GDP ratio reaching 67.1%, reflecting increased financial depth and reduced systemic risks.
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The review covered a wide range of financial entities, including commercial banks, microfinance institutions, development finance institutions, insurance companies, and capital markets. It highlighted that stability across these sectors contributed to a more robust financial ecosystem.
SBP also pointed out that Pakistan’s macroeconomic conditions showed improvement during 2025, with inflation easing into the target range and overall economic activity gaining momentum. These developments helped strengthen confidence in the banking system and its ability to absorb potential external or domestic shocks.
The findings suggest that Pakistan’s financial sector is entering a more stable phase, with enhanced resilience expected to support economic growth and safeguard against future uncertainties.
