First Security Islami Bank reports Tk55,920cr in classified loans

First Security Islami Bank has reported that its total classified loans stood at Tk55,920 crore at the end of 2024, accounting for a staggering 92% of its total loan disbursement.

The bank also disclosed a provision shortfall of Tk47,862 crore as of 31 December 2024, which led its board of directors to forgo declaring any dividend for the year.

According to a bank's disclosure filed on the Dhaka Stock Exchange (DSE) yesterday, a sharp decline in profit and its failure to meet the required provision levels under Bangladesh Bank's policy were the main reasons behind the decision. 

The central bank's strict guidelines bar banks from declaring dividends if they fail to maintain adequate provisions against loans or have taken deferral facilities.

Following the disclosure, the bank's share price fell by 2.63% to close at Tk3.70 today.

The massive classified loan burden pushed the bank into a consolidated loss of Tk298 crore for 2024, with a loss per share of Tk3.35. Losses deepened further in the first quarter of 2025 (January-March), with a consolidated loss of Tk1,049 crore and a per-share loss of Tk4.76.

Earlier in August last year, the Bangladesh Bank dissolved the board of directors of the First Security Islami Bank and formed a new five-member board.

The bank had been controlled by the S Alam Group, a business conglomerate with a history of alleged irregularities and corruption.

S Alam Group is alleged to have engaged in irregularities and corrupt practices within the bank, particularly in the areas of recruitment and loan disbursement. Following the allegations, the central bank dissolved the First Security Islami Bank's board.