ICB in freefall: Tk5,000cr portfolio wiped out, loans choking the institution

Highlights:

• ICB faces collapse after reckless borrowing and overpriced share purchases
• Losses exceed Tk1,200 crore amid severe portfolio value erosion
• Officials say manipulators used ICB to dump inflated shares
• Debt ballooned to Tk12,000+ crore, overwhelming income with interest
• Weak, high-priced investments from 2015–17 caused major long-term losses
• ICB now seeks Tk13,000 crore government support to survive

For decades, it was the one state financial institution that rarely stumbled - steady, profitable, almost boring in its reliability. But that old image of the Investment Corporation of Bangladesh (ICB) now stands shattered.

What was once the government's most trusted market stabiliser is now fighting for its own survival - dragged down by reckless borrowing, disastrous bets on overpriced stocks, and a staggering erosion of asset value that has wiped out the gains of an entire generation of prudent investing.

The numbers tell a story of collapse.

 A record Tk1,214 crore loss in FY25. Another Tk151 crore has already gone in the first quarter of FY26. And behind it all, a portfolio so battered that Tk5,000 crore in value has simply evaporated.

This is the inside tale of how a profit-churning institution spiralled into its worst financial crisis - its balance sheet bleeding, its credibility in tatters, and its top officials openly admitting that ICB, in its current form, may not survive.

ICB Chairman Abu Ahmed was blunt in his assessment, warning that ICB "cannot survive in its current form." He said that previous boards borrowed heavily and bought overpriced shares to serve "vested interests."

"Market manipulators used ICB as a 'pump and dump outlet,' offloading shares at inflated prices before the market collapsed," he told The Business Standard (TBS).

Also, the borrowing was so aggressive that it exceeded the Bangladesh Bank's single-party exposure limit. Sonali Bank, for instance, had to seek the return of Tk375 crore that breached the cap.

Infograph: TBS

ICB Managing Director Niranjan Chandra Debnath told TBS that the losses stemmed from increased provisioning, severe portfolio erosion, and rising interest costs on earlier high-rate loans. 

He said that monthly interest payments on the institution's heavy bank loans now stand at a staggering Tk90 crore.

Analysts and ICB staff agree the crisis stems from decisions taken by former boards and portfolio managers, some of whom allegedly colluded with market manipulators to sell inflated shares to ICB before exiting the market.

Faruq Ahmad Siddiqi, former chairman of BSEC, said, "ICB is the biggest market influencer in the capital market, and the state-owned institution holds the largest fund in the market. The institution has been investing in the capital market for a long time. But, it does not seem that there is any accountability regarding its share trading, nor does it seem that there is any authority to oversee these matters."

He suggested that there should be an investigation into where it invests, why it invests, and whether it has any conflict of interest.

Faruq said, "It also needs to be examined whether ICB officials purchase shares in collusion with market manipulators, and whether information about which shares they are investing in is leaked to the market."

When his attention was drawn to the significant losses on shares purchased in ICB's portfolio, he said, "This has happened due to the purchase of weak or high-priced shares because of a lack of transparency and accountability. It needs to be investigated why they invested in those particular shares."

Key examples of value destruction

An egregious example of value destruction is that of Renata shares. An investment of about Tk900 crore, with some shares bought at Tk1,480 each, now trades at Tk389. This represents an erosion of Tk521crore.

ICB also said that about 94% of ICB's total income is now spent on servicing loan interest

The fall in Ifad Autos is another example. ICB spent Tk265.28 crore in 2014, buying shares at an average price of Tk95.07. By 13 November, the stock traded at Tk19.20, resulting in a loss of Tk211 crore.

Portfolio analysis shows most of this erosion involves shares purchased between 2015 and 2017. Attempts to average down costs by buying more shares ultimately failed as the market continued its decline.

ICB's woes extend beyond the secondary market; the corporation cannot recover over Tk1,000 crore (including interest) in fixed deposits placed with one bank and ten non-bank financial institutions, as the funds have not been returned despite reaching maturity.

How a profitable firm sank into losses

Data shows ICB earned an average net profit of around Tk400 crore annually between FY10 and FY18, including Tk416 crore in FY18. Profit then plunged 85% the following year to Tk60 crore. 

Over the six years to FY24, annual profit averaged just Tk81 crore. The corporation ended FY25 with a net loss of Tk1,214 crore.

ICB Managing Director Niranjan Chandra Debnath acknowledged that the corporation's losses were driven by higher provisioning requirements, deep portfolio erosion, and mounting interest payments on previously taken high-cost loans. He also said the institution had borrowed heavily from several banks to support the capital market.

Debnath explained that weak market activity had reduced capital gains, while many listed companies were paying lower dividends, putting further strain on the portfolio. 

He said ICB has submitted short, medium, and long-term plans to the government, stressing that repaying high-interest bank loans is now the most urgent priority.

Debt trap: Tk12,000 crore in loans

Records show that ICB's total loans were at Tk5,734 crore on 30 June 2015. The figure rose by Tk2,475 crore within a year, reaching Tk8,201 crore. Borrowing peaked in FY20 when the total jumped to a record Tk13,456 crore.

Total bank borrowing stood at Tk7,125 crore at the end of June 2025. ICB received Tk3,000 crore in low-cost loans from Bangladesh Bank under a government guarantee, using Tk2,000 crore to repay high-interest debt.

An ICB official told TBS that borrowing for market investment increased interest costs while purchases of weak shares dragged the portfolio into deeper losses. 

He said income had fallen and loan repayments had become difficult. "Some portfolio managers at the time had turned ICB into a 'parking station' for shares held by market manipulators."

94% earnings spent on interest payments 

In August, in the presence of Financial Institutions Division Secretary Nazma Mobarek, ICB presented its overall financial situation.

The presentation stated that as of 30 June this year, total liabilities stood at Tk13,030 crore, of which loans accounted for Tk12,027 crore. Outstanding interest against these loans amounted to Tk1,003 crore as of March 2025.

Among the loans, term deposits totalled Tk7,125 crore, demand loans taken from the Bangladesh Bank amounted to Tk3,000 crore, Tk1,019 crore was raised through the issuance of ICB subordinated bonds, Tk807 crore came from the Capital Market Stabilisation Fund, and Tk15 crore was taken as short-term deposits from Rupali Bank.

ICB also said that about 94% of ICB's total income is now spent on servicing loan interest. The presentation noted that a decade ago, the institution spent less than half of its income on interest payments.

ICB, now trapped by the debts it took to invest in the capital market, is seeking Tk13,000 crore in government support to survive the crisis.

The corporation has already received Tk3,000 crore from Bangladesh Bank under a state guarantee. It used Tk2,000 crore to repay high-interest loans and invested the remaining Tk1,000 crore in the market.

According to ICB's calculations, that Tk1,000 crore investment generated Tk50 crore in profit by March.

Fingers pointed at officials

Staff familiar with the matter said high-interest loans and overpriced investments in fragile companies created the burden. They believe the former board and portfolio managers borrowed without due scrutiny and triggered the crisis by investing recklessly.

Iftikhar-uz-Zaman, who served as managing director in 2016 and 2017, did not answer phone calls seeking comment.

During the same period, from July 2016 to 19 August 2017, assistant general manager Habibur Rahman oversaw portfolio management. 

An internal review found that about Tk2,900 crore in shares was purchased under his watch. Those stocks are now worth Tk1,300 crore, reflecting Tk1,600 crore in erosion.

Habibur Rahman has since been promoted to General Manager (Accounts) and remains a member of the Portfolio Management Committee by virtue of his position.

Habibur, who is currently the General Manager (Finance), told TBS that the investments during that period were made based on the committee's decisions. "As the capital market failed to gain momentum, the share prices declined," he claimed.

"ICB could not sell shares at a loss. That's why, even after prices fell, the shares were not sold."

The Chairman of ICB acknowledged that some officials who pursued personal interests are now retired, while others are under investigation by the Anti-Corruption Commission.