Islami Bank incurs highest ever Tk1,316cr loss in H1

IFIC Bank reports Tk1,668cr loss as asset quality crisis erodes financial strength.

Islami Bank Bangladesh, one of the country’s largest private sector lenders, reported a record consolidated loss of Tk1,316.48 crore for the first half of 2026, reversing a profit recorded in the same period last year.

The bank had posted a consolidated profit of Tk67.40 crore in January-June 2025. At the end of June 2026, its consolidated loss per share (EPS) stood at Tk8.10. The bank disclosed the financial results today (29 July) following a meeting of its board of directors at its headquarters.

The latest loss marks a sharp deterioration from its recent financial performance. According to its annual reports, Islami Bank remained profitable over the past five years, posting profits of Tk136.34 crore in 2025, Tk108.78 crore in 2024 and Tk635.33 crore in 2023, its highest profit during the period.

The bank had already incurred a loss of Tk288 crore in the first quarter of 2026. According to its price-sensitive information, Tk1,028.26 crore of the total consolidated loss came in the April-June second quarter.

On a standalone basis, excluding subsidiaries, Islami Bank reported a loss of Tk1,326.81 crore in the first half, with EPS falling to Tk8.24.

The bank attributed the losses mainly to higher Profit Paid on Deposits (PPD) expenses, lower investment income due to rising non-performing investments and reduced income from placements with other banks.

A senior Islami Bank official told The Business Standard that the losses were largely driven by poor recovery from loans taken by S Alam Group through alleged irregularities. “We are not receiving any recovery from those loans, while we still have to pay full profits to depositors,” he said.

The official said the bank has Tk1.62 lakh crore in deposits, but recovery is possible from only around Tk60,000 crore. “Nearly Tk1 lakh crore is largely tied to loans taken through S Alam’s loan irregularities, with no recovery so far,” he added.

He said the crisis could ease if Bangladesh Bank’s planned asset management company acquires the bad assets or allows S Alam-linked loans to be separated from the bank’s balance sheet through a special arrangement.

The official added that the bank received nearly Tk500 crore in new deposits in two days, and a new board from Bangladesh Bank could further restore customer confidence and attract corporate deposits.

Acting Managing Director Md Altaf Hossain said the bank’s large investment exposure to a major group was generating no income, while depositors’ profits still had to be paid.

He added that under Shariah banking rules, unrealised income is kept as suspense income rather than recognised as earnings. Recovery of such income in the future could significantly boost the bank’s profits, he said.

Asset deterioration wipes out IFIC Bank’s positive NAV

IFIC Bank PLC reported a consolidated net loss of Tk1,668.24 crore in the first half of 2026, as worsening asset quality severely affected its financial performance.

According to the bank’s price-sensitive information released after a board meeting yesterday, its consolidated loss per share (EPS) widened to Tk8.68 for January-June 2026, compared with Tk5.87 in the same period last year.

The downturn deepened in the second quarter, with the bank posting a consolidated negative EPS of Tk4.20 during April-June 2026, compared with Tk3.27 in the corresponding period of 2025.

The losses also eroded the bank’s asset base, pushing its consolidated net asset value (NAV) per share into negative territory at minus Tk3.69 as of 30 June 2026. A year earlier, the bank’s NAV per share stood at a positive Tk12.34.

IFIC Bank attributed the sharp decline in EPS and cash flows to mounting operating losses and a significant deterioration in asset quality.