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Lahore, December 27, 2019 (PPI-OT): Faysal Bank Limited (FABL) continued its focus on growth while maintaining its relative positioning among peer banks. The bank has an enduring emphasis on CASA deposits, prudent deployment of assets for better yields and carefully planned loan book growth. The bank has a continued focus on operational efficiency and despite an increase in its branch network, the bank was able to keep costs under control.
These initiatives have supported the bank’s profitability and provided a cushion against risk absorption capacity. The management is cognizant of dynamic competition in the industry and is taking steps to strengthen FABL’s positioning amongst medium-sized banks operating in Pakistan. FABL’s conversion into Islamic banking is a medium-term plan, which is being rolled out as envisaged. The banks’ capital adequacy has seen substantial improvement, gradually over the years.
Meanwhile, the ratings recognize FABL’s association with a foreign business group (Dar Al Maal Al-Islami Trust). There was deterioration in the asset quality as FABL booked PKR 3.6bln of NPLs, it must be sustained. FABL remains a highly capitalized commercial bank with a common equity tier 1 (CET1) ratio of 16.5% as at end-Sep19.
The ratings are dependent on the Bank’s ability to sustain improvement in its financial profile. This is important since most peer banks have gained in terms of their size and profitability matrix in recent years. Any material weakening in asset quality, in turn, putting pressure on the Bank’s profitability and risk absorption capacity may have negative implications for the ratings.
For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com