Pakistan’s banking sector has delivered a rare and broad-based success story for small investors at the Pakistan Stock Exchange.
The Pakistan Banks’ Association has welcomed the inclusion of seven Pakistani banks among the top 15 Asia-Pacific banks for 2025. These rankings were compiled by a global financial intelligence platform. However, the real victory lies beyond institutional recognition.
Small Investors Reap Historic Gains
The rally directly benefitted small shareholders holding more than 1.5 billion shares at the PSX. As a result, value creation reached the grassroots level of the capital market.
According to the Pakistan Banks’ Association, this scale of participation makes the achievement exceptional. It confirms that wealth creation was not limited to a narrow investor base. Therefore, everyday investors emerged as the true owners of this success.
Strong Performers Across Banking Segments
United Bank Limited led the sector by market capitalisation. It also demonstrated that scale and strong returns can coexist.
Meanwhile, public sector banks delivered historic results. The Bank of Punjab topped the entire Asia-Pacific ranking in total percentage returns. It was followed by the National Bank of Pakistan and the Bank of Khyber.
This performance highlights improved governance and effective oversight. Strategic alignment between regulators and management also played a critical role.
In addition, Bank Makramah completed a notable turnaround. Askari Bank also strengthened its position, uplifting a wide shareholder base.
Within Islamic banking, Faysal Bank set a new benchmark. Its returns reinforced confidence in the Shariah-compliant banking model.
Banking Growth Fuels the Real Economy
PBA leadership noted that such widespread shareholder value creation remains rare in the banking sector. Even so, this growth occurred alongside meaningful economic impact.
During FY25, private sector credit expanded by Rs 1.1 trillion. This figure marked a sharp rise compared to FY24. Both working capital and fixed investment loans increased significantly.
SME financing also showed strong momentum. The SME borrower base grew by 57 percent, while lending volumes doubled within two years.
Meanwhile, agricultural credit rebounded after years of decline. Borrowers increased to nearly three million, while disbursements reached PKR 2.58 trillion, the highest on record. Digital platforms such as Zarkhez-e supported this expansion.
Clarifying Credit Flow Misconceptions
The association also addressed inaccurate reporting on credit trends in FY26. Contrary to claims of contraction, private sector credit grew by Rs 654 billion by December.
The total private sector loan book expanded by 6.75 percent during July–December FY26. This growth continued despite fiscal crowding pressures.
Banks simultaneously financed Rs 1.95 trillion in government borrowing. Even so, lending to priority sectors remained intact.
Looking Ahead
The Pakistan Banks’ Association reaffirmed its commitment to inclusive growth. The sector aims to continue rewarding small investors while expanding financial access nationwide.
Ultimately, the banking sector remains a central pillar of Pakistan’s economic recovery.
