Islamic Banking Assets Projected to Reach Rs18–19 Trillion by December 2026!

Pakistan’s Islamic banking industry is expected to maintain its strong growth momentum, with total assets projected to reach Rs18–19 trillion by December 2026, compared with Rs14.47 trillion by December 2025, according to industry estimates shared during a media briefing held by Meezan Bank in Karachi.

The briefing was addressed by Ahmed Ali Siddiqui, Group Head Consumer Finance, Meezan Bank, Farhan Ul Haq Usmani, Head Shariah Audit, Meezan Bank and Muhammad Raza, Group Head General Services & Customer Support Group. The session was aimed at creating greater awareness and understanding of Islamic banking, its market performance, regulatory direction, and future growth outlook in Pakistan.

According to the projections shared during the briefing, Islamic banking deposits are expected to increase to Rs13.5–14.5 trillion by December 2026, compared with Rs11.04 trillion by December 2025. The sector’s share in total banking assets is likely to rise to 25–27% by the end of 2026 from 22.9% in December 2025, while its share in total banking deposits is expected to increase to 30–32% from 27.8% during the same period.

The Islamic financing portfolio is also projected to grow to Rs7.0–7.8 trillion by December 2026, compared with Rs5.65 trillion in December 2025, reflecting rising demand for Shariah-compliant financing across consumer, SME, agriculture, corporate and government-linked segments.

Speakers at the briefing highlighted that Islamic banking continues to expand at a strong pace in Pakistan, supported by rising customer preference, regulatory momentum, branch expansion, wider institutional adoption, growing Sukuk activity, and the country’s broader transition toward a Riba-free banking framework.

The sector has shown consistent expansion over the last five years. Islamic banking assets increased from Rs5.27 trillion in December 2021 to Rs 14.47 trillion by December 2025, while deposits rose from Rs3.62 trillion to Rs11.04 trillion during the same period. The Islamic financing portfolio also expanded from Rs2.35 trillion in December 2021 to Rs5.65 trillion by December 2025.

The briefing noted that Islamic banking assets grew by 23.1% in CY24 and 30.7% in CY25, reflecting strong underlying demand and increasing customer confidence in Shariah-compliant banking products and services.

Branch network expansion remains another key driver of growth. The Islamic banking branch network is projected to reach 7,300–7,800 branches by December 2026, compared with more than 6,700 branches by December 2025, further strengthening financial inclusion across the country. Speakers also noted that digital banking channels are expected to play an increasingly important role in expanding access to Islamic financial services.

Industry participants believe Pakistan’s transition target toward Islamic banking by 2027/2028 will continue to accelerate sector-wide transformation, encouraging both full-fledged Islamic banks and conventional banks with Islamic windows to expand their product offerings and customer outreach.

The briefing also underlined that large sovereign Islamic financing requirements and Sukuk issuances are deepening Pakistan’s Islamic finance ecosystem, while growing public trust in Shariah-compliant banking is driving deposit mobilisation and retail growth.

By the end of 2026, Islamic banking is expected to approach nearly one-third of total banking deposits, cross Rs18–19 trillion in assets, and further expand its footprint across digital banking, SME finance, agriculture finance and consumer finance.

If the current growth trajectory continues, Islamic banking assets in Pakistan could exceed Rs25 trillion by 2028, strengthening the country’s position among the fastest-growing Islamic banking markets globally.

Speakers said that December 2026 figures are indicative industry projections based on current trends and available data. Actual outcomes may vary depending on regulatory, economic, market and other factors.