Islami Bank share price hits lowest in six years

Islami Bank’s share prices hit Tk19.50 on Monday, the lowest point in six years, as soaring bad loans and a management crisis continued to erode depositors and investors’ confidence.

The share prices fell over 5.3% before trading closed at the Dhaka Stock Exchange (DSE) on Monday, dropping below the Tk20 psychological benchmark for the first time since 2020, in a testament to the crisis in the country’s biggest private bank.

Some sources attributed the fall to the gradual exposure of investments and bad loans linked to the S Alam Group, which was allied with the ousted Awami League regime.

Investment returns have declined sharply, while expenses on profit returns for depositors have risen.

However, the bank has been operating without a board of directors since June owing to disagreements between a group of investors and the central bank, and the management crisis has also contributed to a reduction in confidence.

The financial conditions in the bank improved significantly under the interim government, and after-tax net profit even hit Tk79 in the first nine months last year.

In contrast, after-tax net earnings records showed a loss of Tk3,303 crore in the first nine months of this year.

Furthermore, the bank’s net asset value has nearly halved from last year. As of 30 September this year, the bank’s net asset value (NAV) stood at Tk3,584 crore, down from Tk6,963 crore in the same period last year.

On a consolidated basis, net asset value fell to Tk3,806.05 crore from Tk7,161.06 crore in the corresponding period of the previous year.