Islami Bank enters DSE's weekly gainer list
Islami Bank Bangladesh Ltd – one of the country's leading banks that recently came under fire due to alleged lending irregularities and a liquidity crisis – has entered the weekly gainer list of the Dhaka Stock Exchange (DSE).
It comes at a time when the shares of 32 of the 34 listed banks are stuck at the floor price, and One Bank's shares closed 4.23% lower at Tk11.30 in the outgoing week.
According to the DSE, the Shariah-based lender secured the ninth spot on the list of the top ten gainers for the last week with a 0.61% rise in its share prices.
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Its shares closed at Tk33.40 on Thursday, and the turnover throughout the week was valued at Tk1.64 crore.
As Islami Bank came under discussion regarding alleged lending irregularities in November last year, its shares priced at Tk33. However, the reported irregularities did not impact much on its share prices.
According to market insiders, although the increase in the bank's share price is small, it has secured a place in the DSE's gainer list for the first time since 2017.
Seeking anonymity, a senior official at one of the top brokerage firms said the bank was under some pressure due to alleged loan irregularities. Besides, it fell suffered a liquidity crisis due to increased deposit withdrawals. From there, the bank has turned around with its own efforts and with the help of the Bangladesh Bank.
According to sources at the central bank, following reported lending irregularities, the Islami Bank faced a huge withdrawal pressure in the October-December quarter, leading to a cash shortfall.
But depositors returned subsequently in January, said the central bank official, adding that the comeback is reflected in bank's excess liquidity.
Besides, the Bangladesh Bank has introduced the Sukuk Bond Facility, Islamic Banks Liquidity Facility, and Mudaraba Liquidity Support to help Islami banks.
Until December, Investment Corporation of Bangladesh's Deputy Managing Director, Kamal Hossain Gazi, was serving the bank as a director.
And with ICB stepping down from the bank's board, the sponsor-directors' joint shareholding of Islami Bank has come down from 55.06% to 52.98%.
Listed in 1985, the bank's operating income rose 15% to Tk3,666 crore in the first nine months of 2022. But net profit grew by just 2% to Tk437 crore as provisioning against operating expenses and debt increased.
And the bank has been paying a 10% cash dividend to shareholders since 2016.
