PACRA Maintains Entity Ratings of Faysal Bank Limited | Positive Outlook

Faysal Bank Limited ("FBL" or the "Bank") has emerged as a leading franchise in Pakistan’s Islamic banking sector. Its name reflects its ambition to lead in the rapidly expanding domain of Islamic finance. Under the current management—which successfully oversaw the seamless transformation from a conventional to a fully Islamic bank—FBL has continued to solidify its position as the country's premier Islamic financial institution. Hence, the Bank has been assigned a Positive Outlook; which reflects its future business prospects and growth proposition. The management has a focused marketing strategy, innovative campaigns, and strategic partnerships, all of which have enhanced the Bank’s modern, accessible, and Shariah-compliant brand identity. For 2025, the Bank has earmarked an additional PKR 12.4 billion in capex to support strategic priorities, aimed at ensuring sustained operational resilience and future growth. A major technological milestone was achieved with the successful upgrade of the Core Banking System (CBS9), significantly improving system performance, scalability, and functionality. On the digital front, FBL reaffirmed its commitment to innovation, positioning itself as the #MostInnovativeIslamicBank. Its flagship mobile platform, Faysal DigiBank, recorded a 35% increase in transaction volumes, processing over PKR 1.5 trillion. Advanced features such as Tap-to-Pay have effectively transformed smartphones into digital wallets, enhancing user convenience. The Bank’s remittance business also delivered exceptional results, registering a 71% year-on-year (YoY) growth—more than double the industry’s 31% increase. In treasury operations, FBL proactively repositioned its GOP Ijara Sukuk portfolio amid a declining interest rate environment, enhancing accrual income by shifting focus toward long-term instruments. The agriculture financing portfolio also demonstrated meaningful progress, advancing financial inclusion across rural areas. Asset quality remained stable, with the non-performing loan (NPL) ratio improving to 3.6% from 3.8% the previous year, supported by growth in financing. Total coverage now stands at a robust 101.2%. Despite being a medium-sized bank with a market share of approximately 3.4% (CY23: 3.7%), FBL delivered a strong overall performance across key metrics. Total deposits stood at PKR 1,044 billion, with CASA improving to 85% (CY23: 75%) while strengthening the funding base. Gross financing grew by 12.3% to PKR 674.9 billion, driven by increased lending in the power, gas, pharma, and chemical sectors. Despite increase in total expenses on the back on inflation and an expanding branch network, Profit Before Tax (PBT) reached a record PKR 50.4 billion (up 21.7%), while Profit After Tax (PAT) stood at PKR 23.0 billion (up 14.9%), slightly constrained by an increase in the effective tax rate from 49% to 54%. The Bank’s equity stood at PKR 108 billion, and the Capital Adequacy Ratio (CAR) remained strong at 16.5%, well above the regulatory minimum of 12.5%.
Going forward, the Bank’s strong foundation and strategic growth focus will remain key to delivering sustained performance and creating long-term value—both essential to the assigned rating. Maintaining asset quality will also be critical.

About the Entity
FBL's shareholding is dominated by Ihtmaar Bank B.S.C holds 66.78% shares. The remaining belong to the general public and are divided among directors, CEO, Banks, and DFIs. Ithmaar Holdings B.S.C. and its subsidiaries are engaged in a wide range of shariah compliant financial services including retail, commercial, investment banking, private banking, takaful and real estate development. A mix of seasoned bankers and businessmen with both domestic and foreign expertise make up the eleven-member BoD, which also includes the Chairman. Since May 2017, Mr. Yousaf Hussain has served as the company's CEO and president. He is a seasoned banker with over 27 years of experience, the majority of which was gained with ABN AMRO.