The Pakistan Stock Exchange data as of June 30, 2026 shows clear sectoral concentration. Five banks feature prominently among the top 10 companies by market capitalization. They collectively command approximately PKR 3,383 billion. This represents 43.3 percent of the top 10 aggregate market cap of around PKR 7,806 billion.
Notable valuations include United Bank Limited at PKR 1,121 billion, Meezan Bank at PKR 930 billion, MCB Bank at PKR 481 billion, Habib Bank Limited at PKR 429 billion, and National Bank of
Pakistan at PKR 422 billion. This dominance reflects deeper structural preferences in the economy.
Over the past three years banks have posted robust earnings. Elevated policy rates supported healthy net interest margins. A surge in remittances provided low-cost deposits and generated substantial forex conversion spreads. Many recipients have limited awareness of competitive rates. The sector has consistently delivered attractive dividend yields. These often outperformed broader market returns during volatile periods. This combination has made banking stocks a preferred safe haven for investors.
Despite recent monetary easing the Advance to Deposit Ratio remained modest at 39.8 percent as of December 2025. Private sector credit recorded a recovery with net off-take of Rs 934.1 billion during July to March FY26. This reflected around 12 percent year-on-year growth. Yet private sector credit still hovers at only around 11 percent of GDP. This is one of the lowest levels regionally. Banks continue to channel substantial liquidity into government securities. They prioritize safety and attractive risk free returns.
Constrained private lending limits capital investment across the economy. Agriculture, particularly cotton, continues to underperform. Arrivals in the 2025/26 season are around 5 to 5.5 million bales against a potential of 8 to 10 plus million. This is due to climate challenges, pests, and low yields. The situation directly impacts the textile sector. This is Pakistan’s largest export earner. It increases import dependence and pressures margins. Foreign direct investment has been selective and volatile. Some inflows occurred in power and financials. Momentum remains insufficient.
The IT along with IT enabled services sector remains a bright spot. Exports reached approximately 3.8 billion dollars in FY25. This marked around 19 percent year on year growth. The sector sustains strong double digit growth into FY26. This highlights Pakistan’s potential in knowledge based industries.
The banking sector’s resilience provides a veneer of economic stability. The current model raises serious concerns about its growth orientation. Investors and banks remain reluctant to channel capital aggressively into agriculture and industry. They favour safe assets and remittances driven earnings instead. For a country like Pakistan with a young growing population and significant development needs consistent GDP growth above 6 percent is mandatory. It is essential to create jobs, alleviate poverty, and build long-term resilience. Relying primarily on banking sector expansion and niche services like IT will not deliver the required broad based investment led growth.
Urgent policy action is needed. This includes fiscal consolidation to reduce crowding out, reforms to improve the credit environment especially for SMEs and productive sectors, agricultural modernization, and targeted incentives for industrial and export diversification. Only then can Pakistan move from fragile stability to inclusive, sustainable, and high quality economic growth.
Copyright Business Recorder, 2026
The writer is a Fellow Member of the Institute of Cost and Management Accountants of Pakistan (ICMAP), financial analyst, and commentator on macroeconomic and capital market issues
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