Auditors doubtful over ICB Islamic Bank’s survival ability

The financial health of ICB Islamic Bank has been negative for a long spell of time, which is a major concern for the future prospect of the lender.

This was the evaluation of an audit firm which had audited the lender’s financial report for 2022.

The auditors also raised their concerns over the lender’s ability to continue as a going concern.

The bank’s cumulative loss was just under Tk 1,949 crore, with a net loss of Tk 25.2 crore till 2022.

According to a report the auditor submitted to the Dhaka Stock Exchange (DSE) on Wednesday, the bank’s capital adequacy ratio is 138.91 per cent, significantly higher than the minimum requirement of 12.50 per cent and its negative equity till 2022 was Tk 1230 crore.

As on December 31, 2022, the bank’s aggregate profit-paying deposits were Tk 802.4 crore, and its profit-earning investments were Tk 127 crore.

Moreover, 84.34 per cent of the bank’s investments are classified.

As a result, the auditor has raised concern over the bank’s ability to continue as a going concern.

ICB Islamic Bank failed to declare dividends for many years due to deepening losses.

The bank’s net asset value (NAV) per share was negative Tk 18.51, while its earnings per share (EPS) were negative Tk 0.38 for 2022. The bank’s shares remained stuck at the floor of Tk 5.40 since August 10, 2022.

Despite financial troubles, the bank managed to decrease its losses by 35 per cent year-over-year in 2022.

For the first time in its history, the lender turned a profit of Tk 10 crore in the April–June quarter in 2022.

ICB Islamic Bank started its journey in 1987 as Al-Baraka Bank, and in 2004, it started operating as a scheduled commercial bank under the name Oriental Bank.

In 2006, the Bangladesh Bank dissolved the board of directors of Oriental Bank after detecting massive corruption, taking full control of the bank to safeguard the interests of depositors.

In 2007, the central bank floated a tender to sell the majority of the bank’s shares, with the Swiss ICB Group winning the bid. The bank was renamed ICB Islamic Bank in 2008. The bank got listed on the DSE in 1990.

Sponsor-directors own 52.76 per cent stake in the bank, while the government owns 0.17 per cent, institutional investors 21.61 per cent, and the general public 25.46 per cent.