A review of Faysal Bank Limited performance during 20

Faysal Bank Limited (FABL) held its analyst briefing where the management discussed key highlights of CY20 result and shared the progress of the bank relating to conversion into an Islamic bank.

• During CY20, the bank posted net markup income of PKR24,543mn up by 16.2%YoY, non-markup income increased by 14.8%YoY. Earning for the year improved by 7.7%YoY as EPS reached to PKR 4.29/sh from PKR 3.

98/sh.

• Bank recorded hefty increase in provisioning of 2.94x in CY20, as provision charge for the year went up to PKR 2,254mn from PKR 766mn in CY19. Although, overall provisioning charges augmented however specific provision reduced, mainly due to write-offs occurred during the year.

• Growth in Islamic advances for the year was recorded at 59.8%, whereas, Islamic deposits increased by 45.9%. The bank has recently launched “Faysal Islami Noor Card” the first of its kind, a replacement of conventional credit card.

• FABL is also taking initiatives to offer low cost housing under “Faysal Tabeer”, and also managed alliance with Zameen.com to provide real estate advisory to consumers.

• At present the FABL has 650 branches our of which 500 are offering Islamic banking. The bank expects 80% of balance sheet to represent Islamic banking assets and liabilities by the end of CY23.

• The management expects a growth of 17%YoY in deposits, as it looks forward to add PKR 90-95bn new deposits. Bank will aim to maintain ADR at 65%, NPLs have declined to 7.7% in CY20 from 9.1% in CY19.

• The management expects an interest rate revision within the year as the gap between inflation and policy rates widens.

Courtesy- Spectrum Securities Limited

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