Karachi: Pakistan's banking sector has experienced a notable increase in profitability, with a 4 percent year-on-year rise to PKR 483 billion in calendar year 2025, driven by significant deposit growth and an expanding asset base. The growth in profitability comes even as net interest margins (NIMs) faced compression due to monetary easing measures.

According to AKD Securities Limited, the banking sector's asset book expanded substantially in 2025, showing a 48 percent year-on-year growth in sector investments. This expansion was primarily funded by the robust deposit growth that the banks experienced. Despite the contraction in NIMs, the higher average asset book contributed positively to net interest income (NII) growth.

The report also highlights an improvement in payouts during 2025, underpinned by strong capitalization ratios, a stable currency outlook, and the effects of monetary easing. This improved financial performance demonstrates the resilience and adaptability of Pakistan's banking sector in navigating a changing economic landscape.