ICB's debt trap: How a profitable firm sank into losses
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
Data shows the Investment Corporation of Bangladesh (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.
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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.
