ICB Faces Significant Losses After Bank Mergers
Amidst a challenging financial landscape characterized by erratic capital markets and lackluster investment opportunities, the state-owned Investment Corporation of Bangladesh (ICB) has encountered another setback. Approximately Tk 140 million in investments from five banks has been lost following a merger.
Sources indicate that ICB invested around Tk 120 million in shares across five banks, with Export-Import Bank having the largest share of about Tk 8 billion. The total investment, including subsidiaries, reached approximately Tk 140 million.
Bangladesh Bank’s decision to merge five banks—First Security Islamic Bank, Global Islamic Bank, Social Islamic Bank, Export-Import Bank, and Union Bank—resulted in the paid-up capital being reduced to zero under the Bank Resolution Ordinance, 2025.
This action effectively rendered the value of shares in these banks worthless, leading to a complete loss of ICB’s investments alongside those of other shareholders.
A senior official from ICB stated, “We’re already under financial strain due to the weak capital market situation. This merger has resulted in an additional loss of Tk 140 million. Since the paid-up capital is now declared zero, the share values have plummeted to zero as well.” They also noted that officials chose not to sell shares in these banks, despite having the option to do so even at a loss. Consequently, a show cause notice was issued to them during the last board meeting.
Another individual commented on the board’s decision-making process, mentioning that investment matters fall under the Portfolio Management Committee’s authority, implying that such decisions should be made collectively. “There’s no room for individual decision-making here. Market prices dropped so quickly that many stocks lost significant value before the Committee had a chance to react,” they added.
Struggles of ICB
Investment Corporation of Bangladesh, once a profitable institution, reported a staggering loss of Tk 1,213.86 crore for 2024-25, marking the first such occurrence in its history. Due to these considerable losses, the government entity decided not to distribute dividends to shareholders for the first time since its establishment in 1976.
The extensive losses have been attributed to increased provisions for fixed deposit receipts (FDRs) held by struggling non-banking financial institutions (NBFIs), diminished investment portfolios stemming from volatile capital markets over the past year, and substantial borrowings for capital market investments.
ICB continues to experience mounting pressure from high provisions and interest payments on loans sourced from various government banks, resulting in a significant decline in core operating profits amid market turmoil, as many investments have lost value dramatically.
According to the FY25 annual report, operating profit decreased by 21% year-on-year to Tk 713 million, down from Tk 908.16 million the previous year. Key income avenues—including dividend income, capital gains, and service charges—dropped in FY25 compared to the earlier period.
Dividends and capital gains amounted to Tk 357.27 million, while fees and service charges were Tk 206.71 million and Tk 148.64 million, respectively, compared to Tk 384 million, Tk 363.61 million, and Tk 157 million the year before.
ICB also disbursed Tk 941 million in interest on deposits and loans, with Tk 758 million going towards fixed deposit interest. Managing Director Niranjan Chandra Debnath pointed to higher provisions for investments, portfolio erosion due to market inactivity, and increased interest expenses on bank loans as the primary reasons behind the significant losses.
The investment bank has also allocated Tk 920 million in FDRs with 10 NBFIs and two banks, though these funds have remained stagnant for years as these institutions grapple with survival.
