Islami Bank has decided to increase its authorised capital from Tk 20 billion to Tk 100 billion. The decision was taken at a meeting of the bank’s board of directors held on 4 November.
As a listed company, the bank informed its shareholders of the decision through the stock exchanges yesterday, Thursday.
Speaking on condition of anonymity about the decision to increase the bank's capital, a senior bank official told Prothom Alo, “The bank has fallen into a capital crisis due to irregularities by the S Alam Group. We are therefore trying to bring a foreign strategic investor on board by increasing the authorised capital. The recommendation to raise the capital came from Bangladesh Bank. We hope Bangladesh Bank will approve our decision.”
According to the announcement made by Islami Bank to the Dhaka Stock Exchange (DSE), the decision to increase authorised capital will be implemented through necessary amendments to the bank’s memorandum of association.
It will take effect subject to approval from Bangladesh Bank and other regulatory authorities, as well as final approval by shareholders at an extraordinary general meeting.
It is learnt that Islami Bank Bangladesh posted a net loss of Tk 33.03 billion after tax in the first nine months (January-September) of the current calendar year.
In contrast, the bank had earned a profit of around Tk 790 million in the first nine months of the previous year. The bank also incurred a loss of Tk 19.76 billion in the first quarter (July-September) of the 2026-27 fiscal year.
According to the bank’s data, its asset value has fallen by nearly half due to the huge losses. As of 30 September, the bank’s net asset value (NAV) stood at Tk 35.84 billion, compared with Tk 69.63 billion during the same period last year. As a result, its net asset value per share has also declined.
Islami Bank, which is facing a financial crisis, has been unable to pay any dividends to its shareholders since 2023. As a result, the bank is now classified in the Z category as a low-grade company on the stock market.
The S Alam Group of Chattogram took control of Islami Bank in 2017. Since then, the group has withdrawn nearly Tk 1 trillion from the bank through loans taken in its own name and under other names. All of those loans have now become defaulted.
The S Alam Group lost control of the bank after the Awami League government was ousted in the mass uprising on 5 August 2024. During the interim government’s tenure, independent directors were given responsibility for running the bank. Bangladesh Bank has now taken over its management.