FABL all set to con­vert into a full-fledged Is­lamic lender

The Pak Banker - - FRONT PAGE -

Ja­hangir Hayat

Faysal Bank (FABL) is all set to con­vert into a fullfledged Is­lamic lender in or­der to ful­fill a long stand­ing de­mand from its Bahrain based ma­jor­ity share­holder Ith­maar Bank to con­sol­i­date its busi­ness lines, sources said.

FABL at present has an Is­lamic bank­ing win­dow with 53 stand-alone branches. Its con­ver­sion would make its re­main­ing 216 branches also Is­lamic. As per CEO of FABL, the con­ver­sion of bank would ma­te­ri­al­ize in a few weeks.

Pre­vi­ously, the own­er­ship of FABL was trans­ferred to Iht­maar, an Is­lamic re­tail based bank, with a 67% stake in FABL. A re­port said Iht­maar wants to ob­tain up to $35 mn in sav­ings from a fi­nan­cial turn­around plan af­ter post­ing a net loss of 29.9 mn di­nars i.e. $79.3 mn in CY13, against a loss of 10.1 mil­lion di­nars in CY12.

Ex­perts said Ith­maar will in­crease its con­trol of FABL by adding two more mem­bers to its board, thus reach­ing a to­tal of five mem­bers out of eight, in­clud­ing its pres­i­dent and chief ex­ec­u­tive. Ith­maar now holds a legacy port­fo­lio of 7 con­ven­tional as­sets af­ter it un­der­went a con­ver­sion of its own in 2010, from a con­ven­tional in­vest­ment bank into an Is­lamic bank­ing en­tity. From Is­lamic bank per­spec­tive, since 2010, Iht­maar has re­solved is­sues per­tain­ing to 14 con­ven­tional as­sets, with its Sharia board grant­ing it a grace pe­riod to di­vest hold­ings or make them sharia-com­pli­ant, a re­port said.

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