Karachi October 28 2022: Faysal Bank Limited (FBL) achieved the landmark of PKR 1.0 trillion mark in total assets as a result of strong deposit mobilization and borrowings.
“As per the Bank’s strategic plan, the Bank has applied to SBP for issuance of Islamic banking license vide letter FCU-BTP/003/2022 dated October 18, 2022. The Bank is left with only one conventional branch which will be converted before year end. Looking ahead, the Bank is geared up for a more challenging economic outlook marked by turbulent market conditions and inflationary pressures” says Banks Chairman Farooq Rahmatullah Khan.
The Bank will continue to invest in network expansion and is planning to open another 57 branches till the end of this year taking the branch network to 700. The Bank will continue to work towards bringing efficiencies, increasing deposit growth, and improving quality of customer service. Alongside investment in branch infrastructure, the Bank is focused on providing innovative digital solutions and will continue to invest in modern technologies to improve digital offerings and customer experience.
The Board of Directors, in their meeting held on October 27, 2022 declared an interim cash dividend of Rs. 5.5 per share (55%) for the nine months ended September 30, 2022
Current Accounts momentum built over last several quarters continued and has reached PKR 274 billion, 27% growth over December 2021. Total deposits increased by 13% over December 2021 and reached PKR 725 billion, improving market share from 3.1% in December 2021 to 3.2% in September 2022. Current Account (CA) mix improved to 38% from 33% at December 2021 and CASA mix improved to 80% from 75% at December 2021.
FBL’s net advances increased by 18% to PKR 468 billion, with the ADR improving from 61% in December 2021 to 65% at September 2022. The Bank continued to generate liquidity from borrowings and invested in Sukuks, as a result investments have increased by 15% and have reached PKR 412 billion.
On a standalone basis, FBL has continued to deliver a strong performance in the nine months of 2022 with a record Profit Before Tax (PBT) of PKR 15.0 billion, 51% higher than the PKR 9.9 billion in the corresponding period last year. FBL has achieved the highest ever quarterly PBT growth of PKR 6.3 billion in Q3’22. However, the increase in Profit After Tax (PAT) is restricted to 26% from PKR 6.1 billion in 9m’21 to PKR 7.7 billion in 9m’22 due to excessive and retrospective tax measures announced in the Federal Budget.
The Bank continued to deliver on growth objectives and has increased the total revenue by 33% over 9m’21 to PKR 33.6 billion. Net markup income has reached PKR 26.9 billion in 9m’22, with a growth of 42% year on year underpinned by strong balance sheet expansion and improvement in overall spreads. Robust growth in current deposits of 81 billion (13%) YoY and increase in the average benchmark rate helped improving the overall spreads. Non markup income grew by 3% over corresponding period last year and is at PKR 6.6 billion in 9m’22. The growth in non-markup income was undermined due to loss on securities; excluding it, the growth in non-markup income is at 33%.
Non markup expenses of the bank have increased by 27% over 9m’21 on the back of very high inflation, PKR devaluation against USD and increase in branch network. However, the cost to income ratio has improved from 60% in 9m’21 to 57% in 9m’22. Net provision for 9m’22 reflected reversal of PKR 0.7 billion against a charge of PKR 0.2 billion in the corresponding period last year. The NPL ratio continued to reduce and is at 4.6% with total coverage at 89.5%.
Bank Profile
FBL was incorporated in Pakistan on October 3, 1994 as a public limited company and its shares are listed on Pakistan Stock Exchange. FBL offers a wide range of modern banking services to all customer segments, i.e., Retail, Small & Medium Sized Enterprises, Commercial, Agri-based, and Corporate. The Bank’s footprint spreads over 246 cities across the country with 643 branches. In line with FBL’s strategy of transforming into an Islamic Bank, 99.8% branches are offering dedicated sharia-compliant banking services.
Holding Company
Ithmaar Bank B.S.C (closed), a banking entity regulated by the Central Bank of Bahrain, is the parent company holding directly and indirectly 66.78% (2021: 66.78%) of the Bank’s shares. Ithmaar Bank B.S.C. (closed) is a wholly owned subsidiary of Ithmaar Holdings B.S.C. Dar AlMaal Al-Islami Trust (DMIT) is the holding entity of Ithmaar Holding B.S.C. and the ultimate parent of the Bank. DMIT was formed by an indenture under the laws of the Commonwealth of The Bahamas for the purpose of conducting business affairs in conformity with Islamic law, principles, and traditions
