March 30, 2022 (MLN): The shareholders of Faysal Bank Limited (FABL), in their meeting held today, resolved to authorize the Board of Directors of the bank to do all the necessary acts, deeds and things, for obtaining an Islamic Banking License from the State Bank of Pakistan and surrender its conventional banking license, company’s filing on bourse showed today.

“In order to empower, enable and facilitate the Bank to complete its conversion from a Conventional Bank to Islamic Bank the Board of Directors of the Bank be and hereby is authorized to take all the necessary decisions and acts for compliance with Shariah guidelines such as but not limited to conversion of different portfolios, businesses, capacity building, and income purification mechanism etc. as it may deem necessary towards the conversion and do all the necessary acts, deeds and things, which may be required under the relevant laws and regulations for obtaining an Islamic Banking License from the State Bank of Pakistan and surrender its conventional banking license and the Board may further delegate its powers and authorities to the management as it may deem appropriate,” the notice read.

Updating on the Islamic conversion in the recent analyst briefing, the management apprised that 67% of the total deposits were Islamic while 89% of the total advances now comprise Islamic loans, a report by JS Global quoted.

The management is optimistic that Islamic banking will contribute around 80% of the balance sheet by 2023. The management expects 85%-90% of profitability contributed by Shariah operations during CY22, while around 85% of the Deposit size is likely to convert
to Islamic banking by Jun-2022., it added.

The Management also indicated that a board meeting is planned in April 2022 to discuss the progress of conversion and decide if the bank is
prepared to apply for an Islamic banking license.

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