Union Bank's Tk25,794cr record loss pushes asset value deep into red 

Union Bank PLC, once tightly controlled by the scam-ridden S Alam Group, has posted a staggering loss of Tk25,794 crore for 2024 – a collapse analysts describe as the single largest annual loss ever recorded by any bank in Bangladesh.

The audited figures, disclosed to the Dhaka Stock Exchange today, reveal the scale of damage caused by years of concealed toxic lending and financial manipulation.

The loss pushed the bank's net asset value deep into negative territory, effectively wiping out almost all shareholder equity and raising serious questions about its solvency.

According to the insiders in the Union Bank, the bank's loss per share surged to Tk248.91 in 2024, up from Tk2.82 a year earlier, as reported in the audit conducted by Syful Shamsul Alam & Co under direct instruction from the Bangladesh Bank.

The erosion of capital dragged Union Bank's net asset value per share to a negative Tk237.44 – equivalent to Tk24,600 crore in negative shareholder equity. In 2023, the NAV per share had stood at a positive Tk11.66.

Banking analysts say a negative NAV of this magnitude is a textbook indicator of insolvency. It means the bank's liabilities far exceed its assets, leaving the institution unable to cover depositor obligations even if its entire asset base were liquidated. 

For shareholders, the bank's equity is effectively worthless.

The bank's operating cash flow also deteriorated sharply. Its net operating cash flow per share fell to negative Tk22.09, around Tk2,290 crore, almost 80 times deeper than the previous year. 

Negative cash flow at this scale suggests the bank is burning far more cash on interest expenses, deposit costs and administrative overhead than it is able to generate from lending or investment activities.

Union Bank has yet to publish its full audited annual report for 2024. However, its September 2024 quarterly disclosure showed Tk27,876 crore in outstanding loans and Tk28,718 crore in total liabilities.

Infograph: TBS

Humayun Kabir, the bank's former managing director who joined in March 2025 and later resigned after an administrator was appointed, told The Business Standard that non-performing loans exceeded 97% during his tenure. 

He said auditors may have calculated massive provisioning requirements that resulted in the record-breaking loss, but declined to comment on the final audit outcome.

Mohammad Abul Hashem, administrator of Union Bank, told TBS, "We identified the actual loss considering all required provisions against bad loans and investments as the bank is going to merge."

Hidden lending comes to light

The scale of the collapse follows a series of revelations after the fall of the Sheikh Hasina government in August 2024. 

A Bangladesh Bank investigation confirmed that Union Bank, licensed in 2013 under political influence, had long concealed its true financial condition. 

For years, it artificially suppressed default rates while funnelling extraordinary volumes of loans to S Alam Group and its affiliates.

Regulators found that S Alam Group directly and indirectly borrowed Tk20,634 crore from the bank through 283 companies, accounting for 72% of Union Bank's total lending. Most of these loans remain unpaid.

The crisis deepened when the new board challenged the 2023 audit – which had falsely shown Tk160 crore profit and recommended a 5% cash dividend. A re-audit revealed the bank actually incurred a Tk288 crore loss that year, underscoring the scale of manipulation under previous management.

Earlier this month, the Bangladesh Bank declared Union Bank ineffective and appointed an administrator, announcing that it will be merged with four other Islamic banks – Social Islami Bank, Exim Bank, First Security Islami Bank and Global Islami Bank. Trading of the bank's shares remains suspended on the stock exchanges.

In the merger announcement event on 5 November, Bangladesh Bank Governor Ahsan H Mansur has said the shares held by sponsor directors and general shareholders of the five Islamic banks are now valued at zero.

"Shareholders will not get compensation as net asset value against Tk10 face value became a negative maximum Tk450 of each bank," he explained.