۔ مز پآ ماا تآ آ ُ
© Faysal Bank Islami 2022. All Rights Reserved.
Table of Contents
Chairman's Message
Organisational Overview and External Environment
Corporate DNA
Corporate Information
Ownership structure
Products & Services
Our Network
Competitive Landscape
SWOT
Value Chain & Business Model
History of Major Events
Major events during the year
Significant changes from prior years
Governance
Board of Directors' - Profiles
Senior Management - Profiles Shariah Board - Profiles
Senior Management & Internal Committees Organisational Structure
Board Committees and Terms of Reference Board Meetings and Attendance
Role of the Board of Directors
Annual Evaluation of the BOD Directors' Orientation Directors' Training
Oversight over Internal Controls & Systems Remuneration Policy Disclosures
Policy for security clearance of foreign directors Governance Practices Exceeding Legal Requirements Diversity, Equity & Inclusion
Conflict of Interest Related Party Transactions
Policy for safety records of the company IT Governance Policy
Whistle blowing policy
Human resource management policies Business Continuity Management Enterprise Resource Planning (ERP)
External Search Consultancy for Directors selection
Corporate Social Responsibility
CSR Statement
Social and Environmental Responsibility Policy
Performance & Position
Six Year Financial Summary Financial Ratios
DuPont Analysis
Quarterly Performance review Highlights
Sensitivity Analysis due to Foreign Currency Fluctuations Methods and assumptions used in compiling the indicators Share Price Sensitivity Analysis
Business Rationale for Major Capital Expenditure
Outlook
Forward Looking Statement
Sources of Information & assumptions used for Projections & Forecasts
How the performance of the Bank meets the disclosures made in 2021
Response to Critical Challenges and Uncertainties
04 Strategy & Resource Allocation
Objectives, Actions & KPIs | 114 | ||
08 | Significant changes in objectives & strategies | 115 | |
10 | Stakeholder Relationship and Engagement | ||
12 | 118 | ||
13 | Identification of key stakeholders | ||
Stakeholders Engagement Process and Frequency | 118 | ||
26 | |||
28 | Investor Relation Section on Corporate Website | 118 | |
30 | Steps to Encourage Minority Shareholders Participation in AGM | 120 | |
32 | Investors' grievance policy | 120 | |
35 | Summary of Analyst Briefing | 120 | |
38 | Issues Raised in Last AGM | 121 | |
39 | |||
Statement of Value Added | 122 | ||
42 | Risk and Opportunity | 126 | |
49 | Risks and Opportunity Report | ||
58 | Sources of Risks & Opportunities | 127 | |
60 | |||
62 | Corporate Governance | ||
64 | Report of the Board Audit and Corporate Governance Committee | 130 | |
68 | |||
Auditors Review Report on Compliance | |||
70 | |||
71 | with Code of Corporate Governance | 132 | |
71 | Statement of Compliance with Code of Corporate Governance | 133 | |
72 | |||
Shariah Advisor Report | 136 | ||
72 | |||
74 | Statement on Internal Controls | 143 | |
76 | Authorization of Financial Statements by the Board of Directors | 143 | |
76 | |||
77 | Unconsolidated | ||
78 | Directors' Report | 146 | |
78 | |||
Auditors Report to the Members | 173 | ||
79 | Unconsolidated Statement of Financial Position | 178 | |
79 | |||
Unconsolidated Profit and Loss Account | 179 | ||
82 | |||
Unconsolidated Statement of Comprehensive Income | 180 | ||
83 | |||
Unconsolidated Statement of Changes in Equity | 181 | ||
83 | |||
84 | Unconsolidated Cash Flow Statement | 182 | |
84 | Notes to the Unconsolidated Financial Statements | 183 | |
Annexures | 258 | ||
88 | Consolidated | ||
89 | |||
Directors' Report | 282 | ||
Auditors Report to the Members | 289 | ||
92 | Consolidated Statement of Financial Position | 293 | |
93 | Consolidated Profit and Loss Account | 294 | |
102 | Consolidated Statement of Comprehensive Income | 295 | |
103 | Consolidated Statement of Changes in Equity | 296 | |
104 | |||
Consolidated Cash Flow Statement | 297 | ||
106 | |||
Notes to the Consolidated Financial Statements | 298 | ||
106 | |||
Annexures | 378 | ||
106 | |||
107 | Other Information | ||
110 | Consumer Grievances | Mechanism | 402 |
Combined Pattern of CDC and Physical Shareholding | 403 | ||
110 | Pattern of Shareholding | 405 | |
Code of Conduct | 406 | ||
Jama Punji | 407 | ||
111 | Notice of the 28th Annual General Meeting | 408 | |
Forms of Proxy | 415 | ||
111 | |||
Key Message from the Chairman
Dear Stakeholders,
On behalf of the Board of Directors of Faysal Bank, it gives me immense pleasure to present our Annual Report and audited financial statements for the year ended December 31, 2022. While we look back on the past three decades with pride, we also look forward with optimism to the next three decades and beyond. On behalf of the Board and myself, I would like to voice our sincere thanks and utmost gratitude for your unwavering support to the Bank.
I trust our report will provide you with an in-depth understanding of the Bank as well as the strategies that enabled us to successfully navigate through these challenging times and emerge stronger and more resilient.
75 years of Pakistan and 35 years of FBL presence in Pakistan The year 2022 marked the Platinum Jubilee of Pakistan's independence. Our journey started 75 years ago with the motto of "Kalma-e-Tayyaba"in which we promised that we will build this country as a prodigious Islamic democratic country of the Muslim world. In the last 75 years, though the country has faced serious economic and socioeconomic problems, it has come a long way being the only Islamic nuclear power state.
FBL takes pride in playing a significant role to establish a viable Islamic financial system in the country. The team of FBL, by converting the bank into a full-fledged Islamic Bank, has made history, which will be considered as a benchmark for Pakistan's
banking industry. FBL conversion has provided a perfect road map to convert Pakistan's financial structure on Islamic system as per the vision put forward by the Government of Pakistan.
Largest conversion of a Conventional Bank into an Islamic Bank It is indeed an incredibly special occasion for us, as FBL celebrates its commendable conversion to a full-fledgedIslamic bank. Alhamdulilah, with the grace of the All-Mighty,the unwavering vision of the Board, the dedication of the management and the determination of the employees, the Bank has successfully pulled a one-of-a-kindfeat: the largest global conversion of a Conventional Bank into an Islamic Bank.
Looking back at our Financial Performance in 2022
FBL delivered solid financial results for 2022, reporting 38% increase in net profit to Rs. 11.2 billion. FBL has achieved several milestones including the landmark of Rs. 1.1 trillion in balance sheet footings with deposit market share increasing to 3.5%.
People are our asset
It goes without saying that our staff is our most valuable asset. They are not only the face of our organization, but also determine our performance. During the year, the Bank continued to invest in their training and development as we firmly believe in developing capabilities from within the organization. The trainings were more emphasized on Islamic Banking courses to upscale the knowledge and reinforce our commitment towards the conversion while also providing career growth to staff.
Embracing Technology
Adoption of modern technology is critical in today's world, and the increasing rate of digitization is visible in Pakistan across all sectors; and banks are no exceptions. FBL is investing in innovation to ensure that the customers have a seamless banking experience. The Bank's focus on enhancing its digital offerings has led to, not only growth in onboarding of new customers on digital channels, but also increase in transaction volumes. Customers can now fulfill their basic banking needs through WhatsApp Banking without having to login to the mobile banking Application. All these initiatives are part of our commitment to provide best service to customers. We are committed to incorporate modern processes and technologies into our operations and services to achieve higher levels of customer satisfaction.
Contribution in Corporate Social Responsibility (CSR) Corporate Social Responsibility programs have a significant impact on society while leveraging an organization's strengths. FBL has always been committed to support initiatives in the areas of education, professional development of youth, health, and poverty alleviation. We are committed to carrying out our CSR activities for the benefit of society and in 2022 our overall philanthropic contributions were Rs. 88 million.
Awards for our excellent performance
FBL has received awards during 2022 from distinguished national and international organizations namely, 'Best Bank of the Year 2021' amongst mid-size banks of the country by Chartered Financial Analyst (CFA) Society Pakistan; 'Best Islamic Retail Bank in Pakistan 2022' at Islamic Retail Bank Awards (IRBA) organized by Cambridge IFA. All these recognitions and awards are testament to the strategic brilliance of our Board of Directors, Senior Management and the hard work and perseverance of our employees. This shows FBL is on track to achieve the vision of being a premier Islamic Bank in Pakistan and contributing significantly to the economy.
Positioned for a better future
Considering the current situation, it seems that 2023 is going to be another challenging year. While uncertainties persist, we see opportunity in change, and value in innovating for the future. We are committed to strengthen our market position by focusing on asset quality, innovation in product development, offering personalized services and mobilizing core deposits. During the year we opened 94 branches taking the branch network to 700 and we will continue to open more branches in coming years.
Heartfelt thanks
With each passing year, we increasingly recognize just how important our stakeholders are to our sustainable growth journey. I would like to thank all our stakeholders for their continued trust and confidence on the Bank.
I would like to express my gratitude to the State Bank of Pakistan and the Securities & Exchange Commission of Pakistan for their continued support and guidance.
I would also like to express my gratitude to our shareholders, members of our Shariah Board and my fellow Board members as well as all members of the Faysal Bank team who worked untiringly to achieve the desired goals of the Bank.
Yours sincerely,
Farooq Rahmatullah Khan
Chairman of the Board
Dated: February 23, 2023
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Faysal Bank Ltd. published this content on 07 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 March 2023 06:32:03 UTC.