Islamic banking assets set to hit Rs19tr by 2026

May 19, 2026 (MLN): Pakistan’s Islamic banking sector is expected to sustain its strong growth trajectory, with total assets projected to rise to Rs18–19 trillion by December 2026, compared to Rs14.47tr by December 2025, according to industry estimates presented at a media briefing hosted by Meezan Bank in Karachi.

The briefing was addressed by senior executives including Ahmed Ali Siddiqui, Group Head Consumer Finance; Farhan Ul Haq Usmani, Head Shariah Audit; and Muhammad Raza, Group Head General Services & Customer Support Group. The session focused on raising awareness of Islamic banking’s performance, regulatory developments, and future growth outlook in Pakistan.

According to projections shared during the session, Islamic banking deposits are expected to increase to Rs13.5–14.5tr by December 2026, up from Rs11.04tr in December 2025.

The sector’s share in total banking assets is forecast to rise to 25–27%, compared with 22.9% previously, while its share in total deposits is expected to climb to 30–32% from 27.8%.

The Islamic financing portfolio is also projected to expand significantly to Rs7.0–7.8tr by December 2026, compared with Rs5.65tr a year earlier, driven by rising demand across consumer, SME, agriculture, corporate, and government-linked financing segments.

Speakers highlighted that the sector has maintained consistent expansion over the past five years.

Islamic banking assets increased from Rs5.27tr in December 2021 to Rs14.47tr in December 2025, while deposits rose from Rs3.62tr to Rs11.04tr over the same period.

Financing volumes also nearly doubled from Rs2.35tr to Rs5.65tr.

The sector recorded robust annual growth, with assets rising 23.1% in CY24 and 30.7% in CY25, showing rising customer confidence, regulatory support, and increasing adoption of Shariah-compliant financial products.

Branch network expansion remains a key driver of growth, with Islamic banking branches projected to reach 7,300–7,800 by December 2026, compared with over 6,700 branches in 2025.

Industry participants also expect digital banking channels to play a greater role in improving access and financial inclusion across the country.

Stakeholders noted that Pakistan’s broader transition target toward Islamic banking by 2027–2028 is likely to accelerate sector-wide transformation, encouraging both full-fledged Islamic banks and conventional banks with Islamic windows to expand their offerings.

Growing sovereign Islamic financing needs and Sukuk issuances are also deepening the Islamic finance ecosystem, while increasing public trust is supporting deposit mobilization and retail expansion.

By 2026, Islamic banking is expected to account for nearly one-third of total banking deposits, surpass Rs18–19 trillion in assets, and expand further into digital banking, SME financing, agriculture, and consumer credit segments.

Industry officials emphasized that the projections are indicative and based on current trends, and actual outcomes may vary depending on regulatory, economic, and market conditions.

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