Ithmaar Bank, a Bahrain-based investment bank with global reach, announced that its subsidiary Faysal Bank Limited Pakistan (FBL), registered a rise in operating profits from US$66.05 million in 2005, to US$74.35 million at the end of 2006. Net profit rose from US$51.8 million to US$54.6 million for the year ended December 31, 2006.
No less than 19 new branches were opened by FBL in its home country Pakistan during 2006, bringing the total number to 75 and augmenting its market share in the process. The full service bank consolidated its leading position, investing heavily in new technologies that will help drive future growth, in a year which saw it make an aggressive push into the booming Pakistani market.
“FBL enjoyed another robust year in 2006, allowing us to focus on long-term plans which will put the Bank in an ideal position to fully capitalize on Pakistan’s very positive future outlook,” said FBL President and CEO Farook Bengali.
“As predicted, operating expenses rose significantly in 2006 as a result of our expansion strategy and the implementation of the first phase of a new core banking system that is expected to be fully in place by the end of 2007. These costs were very much planned for and are expected to reap strong dividends in the years to come,” he said.
The Bank moved its Head Office to the newly built Faysal House in Karachi in June while its Central Region Office also moved to a new purpose-built facility in Lahore towards the end of the year.
The year 2006 is also notable for several large scale corporate and investment banking deals, which confirmed FBL’s position as a regional leader.
“We successfully executed a number of important financing facilities, including the largest ever US-Pakistani joint venture in the textile sector for export oriented projects worth US$34.4 million,” continued Bengali.
“FBL was also the Lead Advisor and Arranger for a US$377 million syndicated financing facility for Messers Fatima Fertilizer Company Limited, the largest ever debt finance transaction in Pakistan,” he said.
Total assets swelled by 5pc in 2006 from US$1.8 billion to US$1.9 billion, with financing volume rising by US$155.7 million, partly funded by inter-transfers from the Islamic deposits and investments accounts. Deposits inched up by 0.6% from US$1.23 billion to US$ 1.24 billion.
Return on equity rose to 23.3% in 2006, up from the 21.3% in 2005. Return on assets stood at 2.78%, slightly up on the 2005-end figure.
“To achieve cost efficiency, the deposit mix has been reshuffled with average deposits in 2006 being higher than last year. Further, FBL is in the process of issuing Tier II capital, with US$12.3 million already having been raised through a Pre-IPO of TFCs, pending SECP/ stock exchange approvals,” explained Bengali.
About Faysal Bank Limited
Faysal Bank Limited started operations in Pakistan in 1987 as a branch of Faysal Islamic Bank of Bahrain and became a locally incorporated Pakistani bank in 1995 under its present name. The Bank offers a full range of banking services, including consumer, corporate and investment facilities. Its widespread and ever-growing network of branches across the four provinces of the country and Azad Kashmir, serve a rapidly growing customer base.
