Fat topline growth may be a thing of the past for banks considering lower asset yields on offer. That said, banks have alternate avenues to keep the profit healthy and Faysal Bank Limited (FABL) seems to be doing just that, and smartly. FABL unlike many its peers, is not a shy lender, as evident by its relatively higher than peer ADR.

Balance sheet numbers are still awaited - the1HCY15 numbers hint that FABL too, like many others, found a good parking lot in government papers. The yields maybe low, but are risk free, and prudence is what most banks are looking for in times of thin spreads and stringent deposit return requirement. FABL has banked its strategy on correcting its deposit mix and an improved CASA was the just result by the end of 1HCY15. Although CASA is on the mend, FABL surely still has some catching up to do on this front.

Cross sell is one of FABL's core strengths and that shows in its non mark-up income as well, which ballooned significantly during the period, mainly at the back of gain on sale of securities. FABL prides itself on cost efficiencies and the work done on the administrative cost front is nothing short of exemplary, resulting in a much improved cost to income ratio. No wonder the profits have gone up by as much as they have.

On the advances side, FABL would do good to continue the cleaning drive as the NPLs, although receding; appear to be on a touch higher side. As government continues to show borrowing appetite, parking excess funds would not be an issue. The focus meanwhile appears to remain on further rationalizing cost of deposits, especially when yields dry up and non mark-up income does not contribute as much in the future.