Bank deposit rate rises by 24bps in April

May 18, 2026 (MLN): Pakistan’s banking sector witnessed a modest uptick in deposit returns during April 2026, though savers continued to face negative real returns amid persistent inflationary pressures, according to the latest official data.

The weighted average deposit rate rose by 24 basis points (bps) to 4.85% in April, compared to 4.61% in March. However, on a year-on-year basis, returns on deposits plunged sharply by 850bps from 13.35% recorded in the same month last year.

Meanwhile, the weighted average lending rate charged by scheduled banks increased by 30bps on a monthly basis to 11.75% in April. Despite the monthly rise, lending rates remained 102bps lower compared to April 2025.

As a result, the banking spread, the difference between lending and deposit rates, widened slightly to 690bps in April from 684bps in the previous month, indicating continued pressure on depositors despite improving margins for banks.

After adjusting for inflation, the real deposit rate remained in negative territory at minus 0.86% in April, deteriorating from minus 0.21% in March. However, it was marginally better than the minus 0.96% recorded a year earlier.

In contrast, the real lending rate eased to 6.04% in April from 6.63% in the preceding month and 6.91% in April 2025, reflecting a gradual moderation in borrowing costs in real terms.

The latest trend suggests that while banks are marginally increasing payouts to depositors, the pace remains insufficient to offset inflation, leaving household savings under pressure even as banking sector profitability indicators remain relatively firm.

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