Faysal Bank (PSX: FABL), a fully Islamic bank since January 2023, published its results for the three and nine months to 30 September 2026 on 22 October 2026. Figures below are for the bank on its own (unconsolidated) unless marked as group figures.
The headline: a profit after tax of Rs 5.16 bn, or Rs 3.40 a share, for July to September, up 3.3% from Rs 5.00 bn (Rs 3.29) a year earlier. For the nine months, profit rose 1.1% to Rs 15.17 bn (Rs 10.00 a share against Rs 9.89). The board declared a third interim cash dividend of Rs 1.50 a share (15%), taking the nine-month payout to Rs 4.50, the same as last year.
The quarter in numbers
| Rs M | Jul to Sep 2026 | Jul to Sep 2025 | Change |
|---|---|---|---|
| Profit / return earned | 45,146 | 40,911 | +10.4% |
| Profit / return expensed | (25,910) | (23,263) | +11.4% |
| Net spread | 19,236 | 17,649 | +9.0% |
| Fee and commission income | 3,624 | 2,996 | +21.0% |
| Foreign exchange income | 2,447 | 2,127 | +15.0% |
| Gain on securities | 476 | 2,330 | −79.6% |
| Total other income | 6,535 | 7,538 | −13.3% |
| Operating expenses and other charges | (15,649) | (14,931) | +4.8% |
| Profit before credit loss allowance | 10,122 | 10,256 | −1.3% |
| Credit loss allowance, net reversal | 640 | 690 | similar |
| Profit before tax | 10,761 | 10,946 | −1.7% |
| Tax (effective rate 52.0% against 54.3%) | (5,600) | (5,948) | −5.9% |
| Profit after tax | 5,162 | 4,998 | +3.3% |
| Earnings per share, Rs | 3.40 | 3.29 | +3.3% |
Total other income also includes dividend income, derivatives, a Rs 124 M loss on derecognising financing held at amortised cost (Rs 83 M a year earlier) and other income.
What drove the result
Core income held up. Net spread, the Islamic bank’s equivalent of net interest income, rose 9% in the quarter to Rs 19.2 bn. Over nine months it was flat at Rs 52.3 bn against Rs 52.1 bn, despite a lower policy rate than in the first nine months of 2025. The bank credits growth in current accounts, which carry no profit cost, for offsetting the squeeze on margins.
Fees and foreign exchange grew, trading gains did not. Fee income rose 21% in the quarter and 17% to Rs 11.1 bn for nine months; foreign exchange income rose 15% in the quarter and 19% for nine months. Gains on securities, however, fell to Rs 0.48 bn from Rs 2.33 bn a year earlier, so total other income was 13% lower in the quarter. For nine months the picture is better: capital gains were Rs 3.9 bn, up 51%, and non-funded income rose 23% to Rs 22.3 bn, because most of this year’s gains were booked in the first half.
Costs rose, but slower than last year’s base. Expenses rose 4.8% in the quarter and 7.3% for nine months to Rs 44.6 bn, which the bank puts down to inflation and business growth. Profit before provisions was about level with a year ago in the quarter and up 4.7% for nine months.
Provisions and tax. The bank again released credit loss allowances, Rs 640 M in the quarter against Rs 690 M a year earlier. For nine months the release was Rs 1.3 bn against Rs 4.2 bn, which is why nine-month pre-tax profit fell 4.6% even as profit before provisions rose. A lower effective tax rate, 52% against 54% in the quarter, turned a small fall in pre-tax profit into a 3% rise after tax.
Asset quality steady. The infection ratio stayed at 2.4% and coverage rose to 92.6%.
The balance sheet
- Deposits up, cheaper mix. Deposits grew 9.3% in nine months to Rs 1,560 bn. Current accounts rose 20% to over Rs 642 bn, lifting their share of deposits to 41.2% from 37.5%, and the CASA ratio to 85.2% from 81.9%.
- Financing down, investments up. Net financing fell 10.4% to Rs 781 bn while investments rose 23.2% to Rs 782 bn. The advance to deposit ratio fell to 50.1% from 61.1%.
- Capital stable. Total assets were Rs 1,879 bn, up 5.9%. The capital adequacy ratio was 14.7%, and the bank issued a Rs 7 bn Tier II sukuk during the period. Net assets were Rs 116.4 bn.
- Ratings. PACRA upgraded the long-term rating to AA+ from AA this year; VIS also rates the bank AA+.
Dividend
The Rs 1.50 interim is the third this year after Rs 1.50 for each of the first two quarters. Book closure runs from 5 to 7 November 2026, so the shares should trade ex-dividend from 4 November. Including the Rs 2.00 final for 2025, dividends over the last 12 months come to Rs 6.50 a share.
Valuation snapshot
At the 28 October close of Rs 91.19:
| Measure | Value |
|---|---|
| Earnings per share, last 12 months (October 2025 to September 2026, the bank) | about Rs 14.4 |
| Price to earnings | about 6.3 times |
| Book value per share (the bank) | about Rs 76.7, so price to book of about 1.19 |
| Dividend yield, last 12 months (Rs 6.50) | about 7.1% |
| Market value (1.52 billion shares) | about Rs 138 bn |
| Share price, last 52 weeks | low Rs 75.94, high Rs 104.18 |
The stock is about 12% below its 52-week high. It trades at a modest premium to book value, a little over 6 times earnings and with a dividend yield above 7%, while profit growth this year has been close to flat.
What to watch next
- Net spread. Whether growth in current accounts keeps offsetting lower rates, as it did in the third quarter.
- Trading gains. Capital gains drove much of the first-half growth in other income; the third quarter showed how quickly that line can shrink.
- Financing. The loan book shrank by a tenth while investments grew. A turn back to financing growth would show up in the advance to deposit ratio.
- Provision releases. These are smaller than last year; a switch to charges would weigh on profit.
- The final dividend for 2026. The final for 2025 was Rs 2.00 a share.
The bottom line
Faysal Bank’s quarter was steady rather than strong. Core income from its deposit base and financing book grew, fees and foreign exchange income grew faster, and asset quality held, but a sharp drop in trading gains and higher costs left pre-tax profit slightly lower; a lower tax rate delivered the 3% rise after tax. The dividend run rate is unchanged at Rs 1.50 a quarter.
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Source: Faysal Bank Limited, third quarter report for the nine months ended 30 September 2026 (directors’ review and unaudited unconsolidated condensed interim financial statements). October to December 2025 profit is derived from the 2025 annual result less the nine-month figure. Prices from the PSX data portal. Twelve-month, per-share and valuation figures are our calculations. This article is for education and information only and is not investment advice.