Bahrain’s Ithmaar Bank, which owns 67% stake in Pakistan-based Faysal Bank (FBL), is, reportedly, planning to convert FBL into a full-fledged Islamic bank, with an aim to consolidate its business lines.
The move by Ithmaar Bank is part of its turnaround plan to generate $35m in savings, following $79.3m of losses incurred in 2013.
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The conversion process, which is subject to shareholder and regulatory approvals, will see FBL add its 216 banking branches to Islamic banking portfolio, which already has 53 branches in Pakistan.
Ithmaar Bank CEO, Ahmed Abdul Rahim, was quoted by Reuters as saying that FBL is in discussion with the State Bank of Pakistan on the conversion of the entire operations of FBL to sharia-compliant banking.
"At this stage, the exact timeline for the conversion cannot be ascertained, but it is expected to take between two to three years," Rahim added.
According to the country’s regulators, the branch network of Islamic bank, which currently has around 1,200 branches, will double and its market share will increase from 10% now to 15% by 2018.
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