⚡ Flash Summary

Faysal Bank Limited (FABL) reported its unaudited financial results for the third quarter ended September 30, 2025. The bank’s profit before tax decreased by 15.3% to PKR 32.8 billion, while profit after tax declined by 24.0% to PKR 15.0 billion. Earnings per share (EPS) also decreased by 24.0%, from PKR 13.02 to PKR 9.89. The bank’s total assets increased by 8.1% to PKR 1,688.7 billion, driven by strong deposit mobilization, with total deposits increasing by 22.1% to PKR 1.3 trillion.

📌 Key Takeaways

• Total revenue decreased by 3.1% YoY to PKR 70.2 billion due to lower policy rates and the introduction of Minimum Deposit Rate (MDR). 📉
• Non-fund income grew strongly by 47.2% to PKR 18.1 billion, driven by fee income (+26.1%) and foreign exchange income (+71.1%). ⬆️
• The net gain on securities witnessed a jump of 219.7% compared to the same period last year. 🚀
• Total expenses increased by 18.6% YoY due to inflation and expanded branch network. ⬆️
• Net reversal of provisions of PKR 4.2 billion compared to PKR 1.4 billion in September 2024. ↩️
• NPL ratio improved to 2.9% compared to 3.6% as of Dec’24, and the total coverage ratio stands at 96.8%. ✅
• Total assets reached PKR 1.7 trillion, driven by strong deposit mobilization. ⬆️
• Current Accounts grew 29.4% over December 2024, reaching PKR 528 billion. ⬆️
• Total deposits increased by 22.1% to PKR 1.3 trillion. ⬆️
• Current Account (CA) mix improved to 41.4% from 39.1% in December 2024, and CASA ratio improved to 87.0% from 85.5%. ⬆️
• Net financing increased by 14.5% to PKR 726 billion, but ADR moderated to 56.9% from 60.7% in December 2024. ⬆️, ⬇️
• Investments increased by 3.9% to PKR 704 billion. ⬆️
• Interim cash dividend of Rs 1.50 per share (15%) declared, bringing the total dividend for the period to Rs 4.50 (same as 2024). 💰

🎯 Investment Thesis

Given the reduced profitability and the challenging macroeconomic environment, I recommend a HOLD rating for Faysal Bank. While the bank has shown resilience in deposit mobilization and asset quality, the decline in earnings and increasing tax rate are concerning. A further understanding of strategic initiatives by the management and their impact is needed.