Faysal Bank Posts Highest Ever Annual Profit in 2023

Faysal Bank Limited (PSX: FABL) continued its strong profitability trend, with its net profit reaching Rs. 20.2 billion in 2023, marking a 77% increase compared to the previous year. According to the financial results, Pakistan’s second-biggest Islamic bank recorded a profit of over Rs. 20 billion in 2023 which stood at Rs. 11.4 billion in 2022, showing a whopping increase of Rs. 8.81 billion. According to Arif Habib Limited, this is FABL’s highest-ever profit after tax, fueled by a surge in profit earned spurred by a 600 bps hike in interest rates during the year. This jump in overall earnings was mainly on the back of growth in total income. Net Profit Earned by the bank clocked in at Rs. 21.9 billion during 4QCY23, increasing 68 percent YoY and 19 percent QoQ. With this, the total net profit earned in CY23 went up to Rs. 71.1 billion, marking a 78 percent YoY jump. Profit earned saw a jump of 81 percent during CY23 while profit expensed was up by 83 percent. Net Foreign Income (NFI) depicted an increase of 127 percent YoY | 129 percent QoQ during 4QCY23, taking CY23’s total to Rs. 13.1 billion (+37 percent YoY). This jump in NFI during CY23 was primarily due to higher fee and commission income which posted a jump of 30 percent YoY, clocking in at Rs. 9.4 billion. Moreover, FX income too was significantly up 67 percent in CY23, reaching Rs. 4.8 billion. However, FABL posted a loss on securities of Rs. 1.8 billion as compared to a loss of Rs. 1.5 billion recorded in SPLY. FABL booked provisioning reversals of Rs. 2.8 billion during 4QCY23 (4QCY22 reversals: Rs. 204 million) depicting a significant jump of 13x on a YoY basis. This takes the total provisioning to Rs. 1.2 billion during CY23 (CY22 reversals: Rs. 940 million). The bank’s OPEX increased 55 percent YoY in 4QCY23 clocking in at Rs. 13 billion (4QCY22: Rs. 8.3 billion). With this, Cost/Income stood at 47.2 percent in 4QCY23 against 54 percent same period last year. The effective tax rate was set at 54 percent during 4QCY23 compared to 51 percent SPLY. With this, the effective tax for CY23 stood at 52 percent (CY22: 50 percent). FABL reported earnings per share (EPS) of Rs. 13.34 for 2023 compared to an EPS of Rs. 7.54 in SPLY. Mian Muhammad Younis, Chairman of Faysal Bank on this occasion said: “This significant milestone marks a reaffirmation of trust and confidence reposed in us by our customers.” He added that “We look forward to continuing this journey of excellence, innovation, and best in class Shariah Compliant Islamic Banking, ensuring a positive impact on all our stakeholders.” Yousaf Hussain, President & CEO of Faysal Bank said: “We are grateful for the unwavering support from all our stakeholders, which has been a driving force behind this unprecedented journey of growth of Faysal Bank. It is our aspiration to not only sustain this momentum but to elevate Faysal Bank to the pinnacle of excellence in Islamic Banking whist focusing on our strong and growing customer base and through our customer centric products and services.” Besides the result, FABL announced a final cash dividend of Rs. 2 per share of Rs. 10 each for CY23. This is in addition to the 10 percent interim cash dividend for the second quarter ended June 30, 2023, and the 10 percent dividend for the third quarter ended September 30, 2023, already paid to shareholders.