Faysal Bank has converted 50 percent of its conventional banking operations into Islamic mode in line with its transformation plan to become a full-fledged Islamic Bank in the next few years.
According to the financial report, the bank has enhanced its number of Islamic branches to 205 out of a total of 410 branches in 2018, with gradual conversion of operations from the top level to branch level.
Faysal Bank Limited is pursuing a well-defined strategy for expansion in branch network with a focus on mobilization of core revenue streams, technological advancements to support customer service, assets growth, cost efficiency and transformation to Islamic banking, the report said.
The investors, board of directors, and the management has decided to convert the bank’s operators into a full-fledged Islamic bank and the leadership is working towards this direction steadily despite various challenges and issues including availability of the human resource, availability of sites and competition.
The bank has added 50 branches in 2017 and 2018 based on the Sharia banking system. The bank planned to set up branches with Islamic banking operations only. The addition included new branches and conversion of branches operation upon conventional banking system.
The bank is in the process of developing its five-year strategy. Apart from enhancing the core profitability, this strategy will focus on expansion in geographical reach, digital banking and the bank’s conversion to a full-fledged Islamic banking institution, the report said.
Experts of the industry said that the transformation of the banking system from conventional to Islamic system at Faysal bank is slower than expected and could be done at a faster pace.
However, the bank is sticking with its strategy to maintain its growth in profitability and operations in parallel with a transformation of banking mode from conventional to Islamic.
It booked a profit of Rs. 3.58 billion in the three quarters of 2018 with a slight drop of 6 percent compared to the same period of previous year. The profit for the whole year is likely to better when it will be announced.
It is pertinent to mention here that Faysal Bank Limited will be the first bank in Pakistan to convert its complete conventional banking business into Islamic mode. Previously, the board of Summit Bank planned for the same transformation but it revised its strategy to get merged in Sindh Bank later.