Six banks obtain incurred a blended loss of Tk352 crore within the July-September quarter, exposing their wretched monetary health after being freed from the lend a hand watch over of the controversial S Alam Community.
This represents a stark distinction to the Tk331.58 crore profit the Sharia-basically based lenders reported within the identical quarter closing year.
Moreover, the non-public-sector lenders – First Security Islami Bank, World Islami Bank, Islami Bank, Social Islami Bank (SIBL), and Union Bank – confronted rep running money crises at some level of the quarter.
Insiders at these banks published that at some level of S Alam Community’s lend a hand watch over, a mountainous replacement of irregularities in loan disbursements happened, basically benefiting the conglomerate.
Following the appointment of a original Bangladesh Bank governor, tighter oversight measures were applied, curbing S Alam’s affect by restricting the boards of these banks, they added.
Investigations by the central bank published that S Alam Community had syphoned off considerable funds from these banks, violating regulations. These irregularities led to a upward push in classified loans, forcing the banks to allocate increased provisions, which within the break resulted in monetary losses, the insiders extra acknowledged.
Analysts obtain identified that such malpractices obtain eroded investor self belief, extra undermining self-discipline within the banking sector. In consequence, four of the six banks are literally trading below their face achieve of Tk10, with handiest Islami Bank and Al-Arafah Islami Bank trading above face achieve.
Per the Dhaka Stock Replace (DSE), as of Thursday’s (28 November) conclude, First Security Islami Bank shares were priced at Tk5.80, World Islami Bank at Tk5.20, Social Islami Bank at Tk9.10, and Union Bank at Tk5.20. Meanwhile, Islami Bank shares closed at Tk52.40, and Al-Arafah Islami Bank at Tk19.60.
Islami Bank
Islami Bank Bangladesh incurred a loss of Tk89 crore within the July-September quarter, marking an unheard of occasion for the nation’s most attention-grabbing non-public lender in over three a protracted time of its operation.
Its consolidated loss per fragment at some level of the quarter stood at Tk0.55.
In an announcement, the bank attributed the loss to an construct bigger in entire provisions against investments – loans and advances – when put next with the identical duration a year within the past.
On 22 August, Islami Bank used to be freed from the grip of S Alam Community after unprejudiced about seven years, with the Bangladesh Bank appointing a original five-member board of directors to oversee its operations.
Per sources from the central bank and paperwork from Islami Bank, as of 18 August 2024, the bank’s entire loan portfolio amounted to Tk1.5 lakh crore, whereas entire deposits stood at Tk1,fifty three,274 crore. Of these loans, Tk74,972 crore – constituting half of the entire loans – used to be diagnosed as benefiting the S Alam Community.
Union Bank
The Shariah-compliant Union Bank has incurred a loss of Tk80 crore between July and September attributable to “low profitability,” in step with a achieve-sensitive assertion.
Union Bank extended Tk17,229 crore in loans to 247 entities affiliated with the S Alam Community, making up 64% of the bank’s entire lending, principally unsecured, in step with a recent Bangladesh Bank inspection account.
Within the course of this time, the bank reported a loss per fragment of Tk0.77, whereas it had earnings of Tk0.52 a year within the past.
SIBL
SIBL reported a loss of Tk29 crore within the third quarter of this year, in step with the bank’s assertion.
As per the monetary account, its consolidated loss per fragment stood at Tk0.37 at some level of the quarter, whereas the earnings per fragment were Tk0.43 at the identical time a year within the past.
The bank is also tormented by a severe money crunch as its rep running money drift per fragment became destructive at Tk37.56 at some level of the January-September duration.
Al-Arafah Islami Bank
The bank incurred a loss of Tk46 crore within the July-September quarter.
Per its achieve-sensitive assertion, its loss per fragment at some level of the quarter used to be Tk0.41.
The bank acknowledged within the assertion that it incurred losses in July-September as entire provision against funding increased when put next with the old corresponding duration.
First Security Islami Bank
The bank reported a loss of Tk31.31 crore within the third quarter of this year, in step with the bank’s assertion.
As per the monetary account, its consolidated loss per fragment stood at Tk0.26 at some level of the quarter, whereas the earnings per fragment were Tk0.31 at the identical time a year within the past.
The bank is also suffering a severe money crunch as their rep running money drift per fragment became destructive at Tk27.16 at some level of the January-September duration.
The bank acknowledged it incurred losses mainly attributable to an construct bigger in profit charges on deposits and placements from banks and monetary institutions.
World Islami Bank
It incurred a loss of Tk57 crore in three months by September attributable to conserving increased provisions against classified loans.
Per the bank assertion, its loss per fragment stood at Tk0.55 at some level of the quarter.
Besides, its rep asset achieve per fragment became destructive at Tk9.14 at the cease of September.
