Best Islamic bank: Allied Bank
Allied Bank makes a strong case for best Islamic bank in Pakistan in 2025 on the back of rapid scale-up, solid profitability, rigorous Shariah governance and measurable customer impact across all segments.
Its Islamic banking franchise expanded significantly, with total assets growing from PKR156 billion in December 2024 to PKR361 billion by December 2025, a 131% increase. Islamic financing assets rose from PKR32 billion to PKR99 billion, up 209%, while investments expanded from PKR105 billion to PKR229 billion, driven by a diversified sukuk portfolio supporting stable, Shariah-compliant income.
On the liability side, deposits increased from PKR110 billion to PKR213 billion, a 94% rise, reflecting strong customer confidence and effective mobilisation under mudarabah-based structures. Net assets grew 27% to PKR33 billion, while the bank maintained profitability of PKR7.8 billion, despite a declining policy rate environment, underlining the resilience of its Islamic banking model.
Governance remains a core strength, supported by an independent Shariah Board, structured quarterly oversight, a comprehensive Shariah governance framework and a formal purification mechanism ensuring full compliance and transparency of income.
Performance was broad-based across segments. Retail deposits rose 137% to PKR98.4 billion, while corporate financing increased from PKR29 billion to PKR95 billion, alongside 67% growth in corporate deposits to PKR114.2 billion. The bank also supported major corporates and strategic national transactions, reinforcing its economic role.
Best Islamic digital bank: BankIslami
In Pakistan, BankIslami set the standard for Shariah‑compliant digital banking during the review period, delivering a transformation that is national in scale and measurable in impact. During 2025, the bank processed close to a trillion Pakistani rupees in digital transactions, with Q4 being the strongest quarter in its history and reflecting close to 30% quarter‑on‑quarter growth.
What distinguishes BankIslami’s performance is not volume alone but the coherence of its digital strategy. Rather than layering incremental upgrades, the bank executed a synchronised transformation across customer channels, payments infrastructure, analytics and operating governance. This has produced a digitally native operating model in which more than two-thirds of customer interactions are digital‑first, while maintaining Shariah integrity at scale.
Targeted enhancements to transaction limits unlocked high‑value use-cases across Pakistan’s payments ecosystem. Fund transfers, Raast (instant) and IBFT (inter-bank) limits were raised to PKR2 million, while bill and utility payments were extended up to PKR25 million and PKR1 million respectively. Within weeks, customers executed thousands of high‑value transfers in the PKR500,000-PKR2 million range, and IBFT volumes doubled month‑on‑month, signalling strong trust in the bank’s digital infrastructure.
Engagement metrics underline the durability of this shift. In 4Q25, BankIslami recorded consistent month‑on‑month growth in seven‑day active users, indicating platform reliance rather than episodic use.
By embedding digital banking as a core enabler of Islamic finance, rather than a peripheral channel, BankIslami has built a profitable and future‑ready franchise. In Pakistan, it stands out for combining scale, Shariah compliance and sustained customer engagement in a way few peers can match.
Best Islamic project finance house: HBL
Habib Bank Limited (HBL) stands out as Pakistan’s best Islamic project finance house in 2025 on the strength of its execution capability, leadership roles and consistent delivery of complex Shariah-compliant project financings across key sectors.
During the review period, HBL delivered a focused pipeline of Islamic project finance transactions totalling approximately $220 million across two syndicated facilities. Despite a relatively concentrated deal flow at the market level, the bank demonstrated strong origination and execution capability by taking lead roles in both transactions, reinforcing its position at the forefront of Islamic project finance in Pakistan.
A key differentiator is HBL’s role as mandated lead adviser, arranger and structuring bank, highlighting its ability to manage transactions end-to-end from structuring to syndication and financial close. This full-cycle execution capability is particularly important in complex project finance, where structuring expertise and stakeholder coordination are critical.
HBL’s involvement in landmark infrastructure transactions further underscores its leadership. The bank played a central role in financing one of Pakistan’s first data-centre developments, demonstrating its ability to support new sectors and first-of-their-kind projects. Its capacity to structure hybrid financing solutions combining Islamic and conventional elements enabled broader lender participation and ensured bankability.
In parallel, HBL maintained strong execution in industrial project financing, acting as exclusive lead arranger and structuring adviser on key transactions. Its ability to design robust financing structures, mobilise syndicates and align funding with project-specific risks and requirements highlights its technical expertise and market credibility.
Best Islamic structured finance house: HBL
Habib Bank Limited (HBL) demonstrates a market‑leading position in Islamic structured finance in Pakistan through a combination of scale, innovation and consistent execution across a diverse transaction pipeline.
Throughout the 2025 coverage period, the bank participated in several Islamic investment banking transactions with a total value of approximately $4.9 billion, reflecting volume leadership and sustained client demand for its structuring capabilities.
HBL’s strength lies in its ability to originate and deliver complex, multi‑layered financing solutions across sectors. It acted in lead or exclusive roles on large, syndicated project finance facilities, including transactions for Sky47 Limited and Sapphire Chemicals, where it served as mandated lead adviser, arranger and structuring agent. These mandates highlight HBL’s ability to coordinate multi-bank syndicates while delivering tailored Shariah-compliant structures aligned with project requirements.
The bank also shows depth in capital markets execution through a broad suite of sukuk issuances, ranging from retail listed instruments to multiple short-term sukuk programmes for corporates such as K-Electric, PTCL and Lucky Electric. These transactions underline HBL’s strong distribution capability, repeat client relationships and ability to access bank and non-bank liquidity pools.
Importantly, HBL emphasises exclusive lead mandates, reinforcing its role as a primary structurer and adviser rather than a participant. Its focus on private-sector issuance further demonstrates its ability to structure bankable, market-driven solutions without reliance on sovereign support, requiring stronger credit analysis and investor placement expertise.
Best Islamic transaction bank: Bank Alfalah Islamic
Bank Alfalah Islamic wins Pakistan’s best Islamic transaction bank for building one of the country’s most comprehensive Shariah-compliant franchises, combining rapid growth in trade finance, cash management and supply chain finance (SCF) with a clear focus on digital transformation.
At a time when many Islamic banking propositions remain product-led, Bank Alfalah Islamic has focused on creating an integrated transaction banking platform that enables corporates to manage payments, liquidity and trade activities through fully Shariah-compliant structures.
Its strategy is built around murabaha, musharakah and wakala solutions, supported by significant investment in technology and process automation. The results have been notable. Trade finance throughput increased by ~80% from 2023 to 2025, while the number of trade clients increased by ~35%. During the same period, cash management throughput doubled.
A defining feature of the bank’s performance has been its commitment to digitising Islamic transaction banking. Through Bank Alfalah Transact (BAT), its Shariah-compliant digital banking platform, the bank has migrated more than 350 Islamic corporate clients to a modern digital environment, improving efficiency and reducing operational friction. It also introduced an end-to-end automated real-time gross settlement (RTGS) process that delivers real-time central bank reference numbers, improving transparency and reducing manual intervention.
The bank has pursued a similar strategy in trade finance. Dedicated Islamic trade workflows enable clients to initiate letters of credit and financing requests digitally, reducing reliance on relationship managers and accelerating turnaround times. These capabilities have helped establish a stronger digital ecosystem for Islamic corporate banking in Pakistan while supporting continued growth in transaction volumes. Beyond trade and payments, Bank Alfalah Islamic has expanded its SCF offering, increasing the number of participating anchors and suppliers. Shariah-compliant investment and liquidity solutions, including mudarabah deposits, wakala investment accounts and Islamic term deposits complement a growing offering.
Best sukuk house: HBL
Habib Bank Limited (HBL) demonstrated clear leadership in Pakistan’s sukuk market in 2025 through its consistent execution, innovation in structuring and strong support for private sector issuers. The bank maintained a dominant position in the investment banking landscape, driven by high transaction activity, extensive client coverage and its ability to deliver complex Shariah-compliant financing solutions across sectors.
A key differentiator was HBL’s focus on originating and executing sukuk transactions for private-sector clients without reliance on sovereign guarantees. This required advanced structuring expertise and robust investor distribution capabilities, reinforcing the bank’s credibility as a trusted arranger in a challenging operating environment.
HBL also stood out for its role in bringing innovative sukuk structures to the market. It successfully introduced landmark transactions, including first-of-their-kind instruments that expanded the domestic investor base and enhanced accessibility, particularly through retail-oriented offerings. These transactions required extensive regulatory engagement, bespoke structuring approaches and close coordination with multiple stakeholders, demonstrating the bank’s technical depth and execution capability.
The bank’s end-to-end involvement – from advisory and structuring to placement and agency roles – enabled it to deliver comprehensive solutions tailored to client needs. Its ability to navigate regulatory complexities, secure necessary approvals and ensure successful placement underscores its leadership in the sukuk space.
Overall, HBL’s combination of market leadership, innovation and consistent delivery of complex sukuk transactions positions it as the standout sukuk house in Pakistan for 2025.
Best Islamic project finance deal: UBL
ICL Power (Private) Limited PKR3 billion Islamic syndicated term-finance facility and syndicated letter-of-credit facility
In August 2025, United Bank Limited (UBL) acted as mandated lead adviser and arranger for ICL Power (Private) Limited (IPL), arranging a syndicated term-finance facility and syndicated letter-of-credit facility for the firm.
The financing was in two tranches: an Islamic tranche of PKR3 billion, and a conventional tranche of PKR2.5 billion, for a total facility of PKR5.5 billion. The Islamic tranche utilises a diminishing musharakah sale and leaseback structure, with a tenor of up to six years (door-to-door), inclusive of a 2.5-year grace period. The facility will finance the development of a 37.2MW biomass co-generation plant that will help IPL shift from a power-intensive industrial process towards captive renewable energy.
Best Islamic local currency deal: UBL
Deodar/Engro Connect PKR133 billion syndicated Islamic finance facilities
In May 2025, United Bank Limited (UBL) acted as mandated lead advisory and arranger, security agent, accounts bank and facility agent for syndicated Islamic term and working-capital finance facilities to finance the acquisition of Deodar by Engro Connect from Pakistan Mobile Communications Limited (Jazz).
The facilities comprised a syndicated term finance facility of PKR79 billion for Deodar, a syndicated working-capital facility of PKR20 billion for Deodar, and a syndicated term-finance facility of PKR34 billion for Engro Connect. UBL structured the deal with strong cashflow engineering and execution sophistication: the transaction included a detailed waterfall, collection-account structure, debt service reserve account (DSRA), staged security release and pricing step-down linked to debt service coverage ratio (DSCR) performance. The 12-year tenor on the term finance, with a four-year grace period, is also well-aligned to infrastructure cashflows and asset life, backed by a long-term tower agreement with Jazz.
As well as channelling Islamic liquidity into telecom infrastructure, the acquisition of Deodar’s 10,617 telecom towers will help Engro to create a scaled national tower company (TowerCo) platform with major market share.
