ICB faces Tk3,459cr provision shortfall as investment losses deepen

The Investment Corporation of Bangladesh (ICB) is grappling with a massive provision shortfall of Tk3,459 crore, underscoring the worsening financial health of the state-owned investment bank at a time amid persistent instability in the capital market. 

The figure, disclosed in the audited financial statements for FY25, prepared by Basu Banerjee Nath and Co and Anil Salam Idris and Co, signals a mounting financial burden for an institution once considered the strongest pillar of the country's stock market.

The audit report put ICB's total investment portfolio at Tk14,983 crore on a cost basis. But based on market value, the portfolio shrank by Tk4,665 crore to Tk10,318 crore. 

Against this erosion, ICB was required to maintain a provision of Tk4,665 crore, but it has so far set aside only Tk1,380 crore. 

In its financial statement, the corporation acknowledged that the shortfall represented 24.41% of its total investment in securities as of 30 June 2025, expressing hope that improving market conditions could gradually narrow the gap.

The Bangladesh Securities and Exchange Commission (BSEC) has extended the deadline for adjusting the shortfall until 31 December 2025, giving the corporation additional time to rebuild its financial buffers.

Once regarded as a reliable stabiliser in times of market stress, ICB incurred a loss of Tk1.212.86 crore in FY25, the largest in its history. The losses are attributed to poor investment decisions in fragile non-bank financial institutions, the sharp erosion in its capital market holdings amid prolonged volatility, and the burden of high-cost bank borrowings taken for investment purposes.

This unprecedented loss has forced ICB to skip dividend payments for the first time since its inception in 1976. 

The financial strain has persisted into the current fiscal year. In the July–September quarter of FY26, ICB posted a consolidated loss of Tk156 crore, significantly higher than the loss in the same quarter of the previous year. 

By the end of September 2025, its consolidated loss per share stood at Tk1.80, reflecting deepening financial pressure.

For an institution that has long played a pivotal role in providing liquidity, rescuing weak stocks during downturns, and cushioning market shocks, the magnitude of losses and shortfall raises serious concerns about its ability to live up to its mandate. 

Analysts say that unless the capital market experiences a sustained recovery and ICB undertakes aggressive restructuring of its portfolio, the shortfall could persist well beyond the extended deadline.

ICB's share price edged up slightly, closing 0.51% higher at Tk39.50 on Thursday.