Lahore: First National Bank Modaraba (FNBM) has released its quarterly progress report for the period ending September 2026, addressing the challenges it faces in resuming its business operations following the suspension of its trading certificates by the Pakistan Stock Exchange (PSX) in April 2018. The report, dated October 2, 2026, outlines the steps being taken to rectify non-compliance issues that led to the suspension.

According to the report, FNBM's trading certificates were suspended due to losses arising from provisioning against Non-Performing Loans (NPLs), which exceeded the regulatory threshold of 50% of its paid-up capital. This non-compliance triggered action from the Securities & Exchange Commission of Pakistan (SECP), which filed a winding-up petition under the Modaraba Companies and Modaraba (Floatation and Control) Ordinance 1980.

The accumulated losses, primarily a result of provisioning for NPLs, have been a significant concern. However, provisioning is not a permanent loss; it is expected to be reversible as recoveries progress. FNBM has noted that all legal recovery suits against non-performing customers have been decreed in its favor, and active recovery efforts are underway through Banking Courts.

According to information available from the Pakistan Stock Exchange (PSX), FNBM has achieved cash recoveries from NPLs through court-awarded decrees and out-of-court settlements. Despite posting net operating profits from FY 2021 to FY 2024, these recoveries have not been sufficient to offset the accumulated losses, mainly due to the accrual of finance costs from a facility obtained from National Bank of Pakistan (NBP).

FNBM's board and management are conducting a strategic review and have proposed a revival plan to NBP, the sponsoring bank. The management is optimistic that, with the approval and implementation of this plan, the company will resume operations. The plan anticipates further cash recoveries from NPLs and restructuring of the outstanding finance facility to comply with the regulatory threshold within two years.

In parallel, FNBM has appealed to the Modaraba Tribunal in Lahore to have the winding-up petition set aside, seeking an opportunity to negotiate with SECP for an amicable resolution. The outcome of this legal process is still pending, with hopes for a favorable decision that would benefit stakeholders, particularly the certificate holders.