PACRA Upgrades the Entity Ratings of Faysal Bank Limited

The ratings upgrade reflects Faysal Bank Limited's (“FABL” or the “Bank”) stable financial profile, supported by a strong trajectory in Islamic banking following its successful transition into a full-fledged Islamic bank. This transformation has reinforced FABL’s emerging position as one of the country’s leading Islamic financial institutions. Building on this progress, the Bank has focused on strengthening its marketing strategy, executing innovative campaigns, and forging strategic partnerships, all of which have enhanced its brand identity. The management has also prioritized the strengthening of the Bank’s balance sheet through improved asset quality, enhanced operational efficiency, and optimization of deposit costs. Concurrently, FABL has continued to advance its digital platforms, upgrade IT infrastructure, and further fortify its risk management framework. The Bank’s transformative approach to digital banking has positioned it as a frontrunner not only within the Islamic banking segment but also as a key digital innovator across the broader banking industry. During FY25, FABL recorded substantial growth in digital transaction volumes, processing payments exceeding PKR 3 trillion. Retail Banking also delivered strong performance, with total deposits surpassing PKR 1.4 trillion—a 36.7% increase over Dec’24—while market share improved from 3.5% to 3.8%. Current accounts grew robustly as well, reaching PKR 536 billion, up 31.3% from Dec’24.
Overall, the Bank delivered a solid performance in 2025, maintaining strong returns. During CY25, it sustained resilient topline momentum, with total income reported at PKR 99 billion (CY24: PKR 98 billion). Net spreads stood at PKR 69.6 billion, with margin compression partially offset by robust growth in current deposits of PKR 127 billion (32%), further strengthening the Bank’s low-cost funding base. Non-funded income remained a key contributor to revenue, reaching PKR 29.4 billion in 2025. Fee income grew by 22.7%, primarily driven by higher trade-related income, card fees, and branch banking income, while FX income maintained strong momentum with a growth of 46.7%. The Bank’s net financing portfolio grew by 37.6% to PKR 872 billion as of Dec’25, with market share increasing from 4.2% to 6.1%. While the industry’s ADR stood at 37.5%, the Bank’s ADR improved to 61.1% at Dec’25 (Dec’24: 60.7%) – a hallmark of the management’s philosophy. Lending adds value to the economy while providing sustainability to the Bank over the longer horizon. Concurrently, enhancements in the risk management framework led to a reduction in the infection ratio to 2.3% (Dec’24: 3.6%). As a result, the Capital Adequacy Ratio (CAR) declined to 14.04% from 16.54% in the previous year, primarily due to balance sheet expansion; however, it remains comfortably above the minimum regulatory requirement for 2025. The Bank is also planning to issue Tier-II capital to strengthen its capitalization and support business growth.
Going forward, the Bank’s strong foundation and strategic growth focus will remain key to delivering sustained performance and creating long-term value—both essential to the assigned rating. Maintaining asset quality will also be critical.

About the Entity
Ithmaar Bank B.S.C (closed), a wholly owned subsidiary of Ithmaar Holdings B.S.C, is the parent company of the Bank, holding directly and indirectly 66.78% (2024: 66.78%) of its shareholding. Dar Al-Maal Al-Islami Trust (DMIT), the ultimate parent, serves as the holding company of Ithmaar Holdings B.S.C. The remaining shareholding is held by the general public and is distributed among directors, the CEO, banks, and DFIs. The eleven-member Board of Directors, including the Chairman, comprises a balanced mix of seasoned bankers and businessmen with both local and international experience.