KARACHI: The management of Faysal Bank Limited has aimed to enhance its assets value up to Rs 1 trillion by end of 2022 to be the second Islamic bank in Pakistan to achieve this mark.
Speaking at the media roundtable recently, Chief Financial Officer Syed Majid Ali said the bank will likely to achieve the size of the balance sheet up to Rs one trillion by end of 2022. At present, the bank’s assets of Islamic banking reached Rs865 billion in July whereas the assets of Rs134 billion will be converted into Islamic from conventional as per the guidelines of the State Bank of Pakistan (SBP).
He briefed the media that the bank’s deposit size surged to Rs694 billion which is nearly 94 percent Islamic, as the bank converted 0.5 million deposits since 2015 as per its conversion plan from conventional to Islamic banking. Besides, the share of Islamic banking in financing and investment of the overall value of Rs753 billion reached 93 percent and 79 percent respectively by end of July.
He said the banking company has received approval from its board of directors to apply for the license of the Islamic bank which will be granted by the banking regulator by December 2022.
Faysal Bank Limited will operate as a full-fledged Islamic bank from 2023 as its management has converted its more than 90 percent operations into Islamic banking.
The conversion of Faysal Bank Limited from the conventional banking system to Sharia-compliant will be a unique example not only in Pakistan but in worldwide considering its size of assets and operations, he added.
“We have been requested to share the experience of the conversion as the study by different universities which will also be considered as the model for various financial institutions having plans for conversion in the mode of operations,” the CFO said.
The State Bank of Pakistan (SBP) extended its full support to the bank’s management in line with its conversion plans, he said adding that the conversion of Faysal Bank from conventional to Islamic banking will be the biggest transition in the world.
Muhammad Faisal Sheikh, Head of Islamic Banking, Faysal Bank Limited, said the bank’s management of Faysal Bank is working to expand the branch network of Faysal Bank Limited to 700 with the establishment of new branches in different cities.
At present, the bank is operating with 638 Islamic branches and one conventional banking branch which will be converted to Islamic and 61 new branches will be established in the remaining period of 2022.
The bank set up 359 Islamic branches and converted 210 branches of conventional banking into Islamic. Faysal Bank will be the second biggest full-fledged Islamic bank.
Muhammad Faisal Shaikh, Head of Islamic Banking, said that the growth of Islamic banking in Pakistan has outpaced the growth of conventional banking mainly because of the preference of Pakistani customers for Islamic banking over interest-based banking.
He also said that Faysal Bank Limited introduced a wide range of financial products in Pakistan which are alternatives to what interest-based banks are offering in Pakistan, hence the bank’s products are the customers’ choice ultimately.
The housing finance of the Islamic bank constitutes nearly 60 percent share in the overall banking industry in spite of the fact that Islamic banking attained over 20 percent share in the overall banking system of the country, he mentioned.
Copyright Business Recorder, 2022