Dec 29 - Jan 04, 2003

Faysal Bank is a well-known name in the banking sector in Pakistan. Operations in Pakistan started in 1987 as a branch of Faysal Islamic Bank of Bahrain E.C. In 1994, the sponsors who have great faith in the local market, to show their renewed commitment, incorporated the bank as a Pakistani company retaining 60 percent of the ownership. The sponsors-various organisations of Dar Al Mal Al Islami (the holding entity) including Shamil Bank Bahrain E.C., have time and again shown their confidence in and commitment to Faysal Bank and Pakistan in practical terms.

Faysal Bank Limited over the years has emerged as a strong and versatile institution amongst private banks in the country. Its strength is evident from its paid up capital and reserves in excess of Rs. 5.4 billion and balance sheet size of over Rs. 41 billion (figures as per unaudited accounts dated 30/9/03). The Bank has been rated AA- for the medium and long term and Al for the short term, ratings that denote stability and growth.

The mission statement of Faysal Bank Limited is "the introduction of a just and equitable financial system by being a world class multi-purpose financial institution, providing a range of specialised services, working on Shariah principles". Keeping within this context, the Bank has developed into a full service financial institution offering consumer, retail, corporate, commercial and investment banking products and services.

Faysal Bank has played a significant role in the development and introduction of Islamic banking concepts within Pakistan. In fact, it was the very first bank to do so. It has provided the template upon which others have built.

Over the years, Faysal Bank has been introducing many asset and liability products, all with the idea to promote Shariah compatible practices in banking. The local currency profit bearing deposit products are all based on profit and loss computations. All savings accounts at Faysal Bank pay profit on daily balance basis rather than on the minimum balance of the month basis resulting in higher absolute profit amounts. The Bank offers its current account holders a host of free services that makes this account one of the most profitable in the market. Moreover the Bank's major thrust is on improving service standards and to providing customers with a combination of pure return with smooth and efficient delivery and as many business conveniences as the Bank can offer.

On the deployment side, the Bank invests its funds in Shariah approved modes of financing, mainly Morabaha (cost-plus financing), Ijara (lease) and Musharaka (profit sharing). The Bank has also entered into Modaraba financing whereby it is a direct investor in a manufacturing concern. While still relying somewhat on the Morabaha, Faysal Bank is actively exploring many innovative financing modes based on Shariah compatibility. Unit trusts, commercial paper, term finance certificates, preference shares, modaraba are just some of the avenues the Bank is looking into to solve its customers financing needs.

During 2003, Faysal Bank Limited, in collaboration with its group company (and wholly owned subsidiary of Dar Al Maal Al Islami Trust) Islamic Investment Company of the Gulf (Bahamas) Limited (who will bring extensive international experience in the fund management industry) and Akeel Karim Dhedhi Securities (Pvt.) Limited (which is among the leading brokerage house in Pakistan along with it's extensive research department) joined hands to sponsor an asset management company in Pakistan, namely Faysal Asset Management Limited (FAML). This step will help Faysal Bank in providing a unique opportunity to general investors, including its own depositors, for investing in a pool of well diversified portfolio funds which will generate adequate return with growth prospects to its unit holders.

The Bank not only caters to corporate clientele but also offers commercial banking services to small businesses and consumer banking services to individual customers. For the consumer market, Faysal Bank has car and housing finance products. The Bank also offers financing for household durables such as generators and other expensive items.

The problems facing the country's economy are many and complex. So also are those facing Faysal Bank in its effort to keep a balance between its desire to comply with the true spirit of Shariah and at the same time remain profitable. It is source of pride for Faysal Bank that in the face of many odds, it has not lost sight of its mission and commitment to Islamic Banking. The Bank, on a regular basis, revisits its portfolio and individual products, both asset and liability, to identify gaps and ways of filling them with new or improved Shariah compatible systems.

Faysal Bank has instituted a vigorous staff training programme that not only covers the operational and management aspects of banking but also aspects related to Islamic Banking. In accordance with the Mission of the Bank, the training at Faysal Bank aims at producing efficient, prudent and progressive Islamic Bankers.

During 2003, Faysal Bank opened 16 new branches bringing its total branches to 39. The network is forever-growing and new branches being opened to bring the Bank closer to its markets. Faysal Bank branches are all designed and organised keeping the customer in mind. The physical layout, the service centres, the transactional procedures all aim at making the customer welcome while providing efficient service.

The year 2003, proved a year of extraordinary profits for Faysal Bank. In its September quarter accounts, the Bank shows a pre tax profit of Rs. 2.4 billion (3 quarter profit). Earning per share on Faysal Bank shares as on September 30, 2003 works out to Rs. 7.41. Based on its half year results, the bank even paid an interim dividend of Rs. 2.50 per share to its shareholders.