Global Islami Bank incurs Tk1,308cr loss in 2024

Infographic: TBS

After posting substantial losses in 2023, Global Islami Bank, a private sector lender which was under the management of S Alam Group during the Awami League government's tenure, has now reported a Tk1,308 crore loss for 2024, driven by a sharp rise in classified loans.

Just three years after raising funds from the capital market through stock exchange listing, the lender has failed to declare any dividend for 2024.

Since its listing in 2022, the bank has paid 5% cash and 5% stock dividends to shareholders in that year. It also recommended the same for 2023, but that dividend is yet to be approved at the annual general meeting (AGM).

In a stock exchange filing yesterday (10 July), the bank reported a loss per share of Tk12.62 for 2024, following a Tk21.79 loss per share in 2023.

It also reported a negative net asset value (NAV) per share of Tk21.77, and a net operating cash flow per share of Tk4.75, compared to negative Tk9.14 and Tk0.16, respectively, in the previous year.

The bank has scheduled its AGM for the 2024 financials on 21 September, to be held in a hybrid format, with physical attendance at Kurmitola Golf Club in Dhaka Cantonment. The record date to identify shareholders has been set for 31 July.

Accounting manipulation in 2023

Global Islami Bank—then under the control of the controversial S Alam Group—had shown a profit of Tk128 crore in its 2023 financial report. However, a re-audit of the same financials later revealed a staggering loss of Tk2,259 crore.

Interestingly, both the original audit and the re-audit were conducted by the same firm: Shafiq Basak & Co., Chartered Accountants. The only difference? One was done during the Awami League government's tenure, and the other after its fall.

In the initial report, the bank reported earnings per share (EPS) of Tk1.30. But following the restatement, EPS was revised to a loss of Tk21.79 per share, as published on the Dhaka Stock Exchange (DSE) website on Wednesday (9 July).

Based on the original (now discredited) report, the bank had declared a 5% cash and 5% stock dividend.

However, since the fall of the Awami League government, the bank has not been able to hold its annual general meeting (AGM), and as a result, the declared dividends remain unapproved and undistributed.

According to the bank's 2023 financial report, Global Islami Bank reported classified loans of Tk342.72 crore — just 2.61% of its total loan portfolio. The total loans disbursed that year stood at Tk13,141 crore.

But the re-audited report paints a very different picture, revealing a much higher volume of non-performing loans (NPLs).

The bank's board was restructured in August last year.

Mohammed Nurul Amin, the bank's independent director and current chairman of the board, has blown the whistle on the scandal.

He told TBS that not only was the 2023 report manipulated, but serious irregularities also exist in the financial statements of previous years.

"There has been statistical corruption in the bank's financials," Amin said. "The actual volume of NPLs was concealed. Loans that should have been classified as defaulted were kept as regular accounts to show lower defaults and inflated profits."

While the bank officially reported an NPL ratio of under 3% in 2023, Amin revealed that the real figure had ballooned to between 87% and 90% by 2024.

This alarming discrepancy suggests a bank on the verge of collapse—its troubles hidden behind a polished, misleading annual report.

Global Islami Bank raised Tk425 crore from the stock market through an IPO in 2022. The Bangladesh Securities and Exchange Commission (BSEC) approved the capital raising in June 2022. 

Although the bank issued shares at a face value of Tk10, its current share price stands at only Tk3.30. Due to its failure to hold the AGM, the company's shares are now trading under the Z category.

According to the bank's "Use of Proceeds" plan, the raised capital was allocated as follows: Tk100 crore for investment in SMEs, Tk268.50 crore for investment in government securities/bonds, Tk50 crore for investment in listed securities/listed bonds, and Tk6.50 crore for IPO expenses.

Most of the funds have already been spent, but the allocation for estimated IPO expenses remained slightly unutilised.

That is why the bank decided to transfer the remaining amount of Tk32 lakh to the investment in SME, subject to approval of the shareholders, BSEC and other regulatory authorities.

It also decided to extend the deadline for utilising the remaining IPO proceeds by an additional 24 months, until November 2026.