How ONE Bank hides Tk995cr loss through provision deferral
In a qualified opinion, the auditor revealed that as of December 2024, the bank maintained a total provision of Tk1,447.62 crore– comprising Tk53.81 crore for unclassified loans and Tk1,393.81 crore for classified loans and advances
ONE Bank, a private sector lender, reported an 11.30% profit growth in 2024, posting a net profit after tax of Tk127.97 crore. However, according to its external auditor, the bank would have actually incurred a massive net loss of Tk995.43 crore if it had made full provisioning as required by the central bank.
In a qualified opinion, the auditor revealed that as of December 2024, the bank maintained a total provision of Tk1,447.62 crore – comprising Tk53.81 crore for unclassified loans and Tk1,393.81 crore for classified loans and advances.
According to a Bangladesh Bank directive issued on 29 April 2024, the required provision against loans and advances was Tk3,345.07 crore. This left a shortfall of Tk1,797.45 crore, which the bank did not recognize in its financial statements.
The non-recognition of this shortfall was permitted under a Bangladesh Bank letter dated 21 May 2024, which allowed the bank to defer the required provision.
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The auditor stated that had the full provision been recognised without deferment, the bank would have reported a net loss after tax of Tk995.43 crore. In that case, the loss per share would have been Tk9.34, and the net worth would have dropped to Tk1,223.29 crore – compared to the reported earnings per share (EPS) of Tk1.20 and total net worth of Tk2,345.41 crore.
The significant gap between the reported profit and actual financial obligations raises concerns about transparency and the bank's true financial health, according to market analysts.
Attempts to contact the bank's secretary, John Sarkar, for comment were unsuccessful, as he did not respond to the call.
The share price of the bank closed at Tk6.90 on the Dhaka Stock Exchange on Thursday.
Despite the current financial challenges, the Board of Directors has approved the issuance of ONE Bank Subordinated Bond VI, which will carry a floating interest rate. This issuance is subject to approval from the relevant regulatory authorities.
The bank plans to raise Tk600 crore through a private placement of this bond, which will have a tenure of seven years.
The proceeds from this bond will be classified as Tier-II Capital. This initiative aims to strengthen the bank's capital base in line with Bangladesh Bank's Risk-Based Capital Adequacy Guidelines, aligned with the Basel III regulatory framework.
In 2024, ONE Bank's net interest income rose to Tk608 crore, up from Tk452 crore in the previous year.
In the first quarter (January to March) of 2025, the private sector lender reported a net profit of Tk64 crore, compared to Tk41 crore in the same period of the previous year.
However, the bank's net interest income during Q1 2025 declined to Tk78 crore, down from Tk130 crore in the corresponding quarter of the previous year.
Meanwhile, its investment income more than doubled, reaching Tk202 crore in Q1 2025, compared to Tk102 crore a year earlier.
The bank's earnings per share (EPS) also increased to Tk0.60, up from Tk0.38 in the same period of the previous year. Its net asset value per share stood at Tk22.32 at the end of March 2025.
As of 31 December 2024, ONE Bank operated a total of 112 branches, including 2 Islamic banking branches. The bank also had 45 sub-branches, 19 collection booths, and 177 ATM booths across the country.
In addition, the bank maintained two offshore banking units – one located in Dhaka and the other in Chattogram.
ONE Bank also has two subsidiary companies: ONE Securities Limited and ONE Investments Limited.
