The banking sector’s gross Advance-to-Deposit Ratio (ADR) maintained its downward trajectory, clocking in at 38% as of June 2025.
The banking sector’s ADR stood at 38.1% as of June 2025, down from 39.8% recorded in May 2025, reflecting a decrease of 172 basis points (bps), stated brokerage house Arif Habib Limited (AHL) on Tuesday.
On a yearly basis, the ADR was down 186bps, compared to 40% in June 2024.
Meanwhile, the banking sector’s Investment-to-Deposit Ratio (IDR) lowered to 103% in June 2025, as compared to 105.8% in May 2025, registering a decline of 282bps. However, on a year-on-year basis (YoY), IDR was up 608bps, compared to 96.9% in June 2024.
The increase in IDR indicates that banks are heavily investing in government instruments, possibly due to attractive yields, low credit appetite, or limited private sector demand.
As per the data, the banking sector’s deposits saw strong growth both YoY (14.1%) and month-on-month (MoM) (8.5%), rising to Rs35.5 trillion in June 2025.
Investments grew faster than both deposits and advances YoY (21.2%), clocking in at Rs36.6 trillion in June 2025.
Advances (loans) stood at Rs13.5 trillion in June 2025, registering moderate growth of 8.7% YoY and 3.8% MoM, showing some revival in credit demand.
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