During the first quarter of 2026 as per the State Bank of Pakistan report, the Islamic banking industry in Pakistan continued its growth momentum, further strengthening its position within the broader financial system. As of end-March 2026, Islamic Banking Institutions (IBIs) in our country consist of seven full-fledged Islamic Banks (IBs) including newly licensed Digital Bank i.e. Raqami Islamic Digital Bank Limited and 16 conventional banks with an addition of Mashreq Bank Pakistan Limited offering Shariah-compliant services through dedicated Islamic Banking Branches (IBBs). In the first quarter of 2026, the industry witnessed a net addition of 112 branches, marking a quarterly growth of 1.5 percent and raising the total IBB network to 7,674 branches by March 2026. The branches of IBIs are spread across 145 districts, underscoring the sector’s consistent geographic footprint and its growing role in promoting financial inclusion and further strengthening public access to Shariah-compliant financial services.
| Pakistan: Islamic Banking (Amount in PKR Billion) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Mar-25 | Dec 25 | Mar-26 | Mar-25 | Dec 25 | Mar-26 | Mar-25 | Dec 25 | Mar-26 | |
| Particulars | Islamic Banking Industry Progress | Percent Growth (YoY) | Share in Overall Banking Industry (%) | ||||||
| Assets | 11,510 | 14,467 | 14,659 | 24.6 | 30.7 | 27.4 | 21.1 | 22.9 | 23.0 |
| Deposits | 8,419 | 11,037 | 11,299 | 22.5 | 39.6 | 34.2 | 25.4 | 27.8 | 28.5 |
| Investments (Net) | 5,422 | 6,605 | 7,081 | 23.1 | 32.4 | 30.6 | 16.4 | 16.9 | 17.7 |
| Financing (Net) | 4,020 | 5,654 | 5,581 | 23.4 | 40.0 | 38.8 | 30.5 | 38.1 | 38.2 |
| Number of Islamic Banking Institutions | 21 | 22 | 23 | – | – | 9.5 | – | – | – |
| Number of Branches** | 6,093 | 7,562 | 7,674 | 19.4 | 25.7 | 25.9 | – | – | – |
| Number of Islamic Banking Windows | 2,651 | 2,931 | 3,473 | 38.4 | 30.1 | 31.0 | – | – | – |
| * The numbers include data of Digital Banks. | |||||||||
| **Number includes sub-branches | |||||||||
| Source: Data submitted by banks under quarterly Reporting Chart of Accounts (RCOA) | |||||||||
Statistics showed that the total assets of IBIs grew by Rs 192 billion to reach Rs 14,659 billion, while deposits grew by Rs 262 billion, standing at Rs 11,299 billion as of March 2026. On a quarter-on-quarter (QoQ) basis, however, assets and deposits recorded modest growth of 1.3 percent and 2.4 percent, respectively. The financing portfolio witnessed a marginal QoQ fall of 1.3 percent, settling at Rs 5,581 billion, while net investments grew by 7.2 percent to Rs 7,081 billion. This trend reflects growing demand for Shariah-compliant investment avenues, contributing to the sector’s overall financial depth.
| Global Islamic Finance | ||
|---|---|---|
| In 2026 Global Islamic finance assets are on track to cross $6 trillion, driven by rapid double-digit growth, core dominance in the GCC and Southeast Asia, and expanding frontiers in Africa. | ||
| Market Size And Growth | ||
| Total Assets: Approaching $6 trillion worldwide by late 2026, up from $4.4–$5.2 trillion in previous cycles. | Growth Rate: Maintaining a strong year-on-year expansion pace of roughly 14.9 percent, outpacing many conventional banking sectors. | Sukuk Markets: Outstanding global Sukuk volumes continue to scale past $1 trillion, supported by strong sovereign and green/sustainable issuances. |
| Regional Hubs And Concentration | ||
| GCC and Asia: The Gulf Cooperation Council (GCC) and East Asia-Pacific (Malaysia, Indonesia) hold over 75 percent of total asset share, with Saudi Arabia, Iran, and Malaysia acting as anchor markets. | Emerging Frontiers: Africa is emerging as a fast-growing frontier with nations like Ethiopia, Uganda, and Somalia exploring formal frameworks in 2026. | Global Integration: Major institutions like Standard Chartered Saadiq and CIMB Islamic are shifting the ecosystem from regional liquidity pools to globally connected, digital capital corridors. |
In terms of market share, the officials of SBP recorded that the Islamic banking assets constituted 23.0 percent of the assets of banking industry, while deposits accounted for a higher share of 28.5 percent. The sector’s contribution to total financing reached at 38.2 percent, with investments representing 17.7 percent of the industry’s overall portfolio, reflecting its continued expansion. Collectively, these indicators demonstrate the sector’s sustained growth and its increasing integration into our country’s financial landscape. The steady improvement across major performance metrics, along with a growing branch network, reflects both the sector’s resilience and the rising preference among consumers for Islamic banking services.