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