First Security Islami Bank suffers Tk3,750cr loss in nine months of 2025 

First Security Islami Bank, once closely linked to the scandal-hit S Alam Group, has plunged into one of the worst financial collapses in Bangladesh's banking history, posting an unprecedented loss of Tk3,750 crore in the January-September period of 2025. 

The staggering deficit, disclosed in the bank's latest filings to the Dhaka Stock Exchange (DSE), underscores the scale of damage caused by years of concealed toxic lending, reckless governance, and systemic manipulation that went unchecked for more than a decade.

The third quarter (July-September) alone accounted for Tk2,060 crore in losses, a dramatic reversal from the Tk31 crore profit recorded during the same quarter of the previous year. 

On a consolidated basis, the bank's loss per share stood at Tk31.04 for the nine-month period, while the July-September quarter alone generated a loss per share of Tk17.04. 

The erosion of profitability has been accompanied by a complete collapse of asset value. According to the disclosure, the bank's consolidated net asset value (NAV) per share dropped to negative Tk14.65, compared to a positive Tk20.66 during the same period a year earlier. 

Its total NAV now stands at negative Tk1,770 crore, meaning all shareholder equity has effectively been wiped out.

Banking analysts say a negative NAV of this size leaves no doubt about the bank's insolvency, as its liabilities now exceed its assets by a wide margin. Even a full liquidation of the lender's asset base would fail to cover depositor claims, while shareholders have been left holding equity that is essentially worthless.

Liquidity stress intensifies

The bank's operational health has deteriorated just as sharply. Its net operating cash flow has sunk to negative Tk2,880 crore, signalling an acute cash crisis. 

The negative cash flow indicates that First Security Islami Bank is spending far more on interest expenses, deposit servicing, and administrative costs than it earns from lending and investment operations.

With the bank's loan book already crippled by defaults and revenue streams shrinking, analysts say its liquidity strain has reached "an unsustainable level".

The seeds of the collapse were already visible in the bank's 2024 audited report, which revealed that the bank's non-performing loans (NPLs) had skyrocketed to Tk55,920 crore – an astonishing 92% of its total loan portfolio. 

The bank also reported a provision shortfall of Tk47,862 crore at the end of that year, forcing the board to decide against declaring any dividend for shareholders. 

Although the third-quarter report of 2025 did not include updated NPL figures, banking experts believe the situation has likely worsened further.

Bangladesh Bank steps in

In early November, Bangladesh Bank declared First Security Islami Bank inactive, dissolved its board and appointed an administrator. This action came alongside the regulator's announcement that the bank would be merged with four other Islamic banks – Social Islami Bank, Exim Bank, Union Bank, and Global Islami Bank – all of which had also been struggling. 

Bangladesh Bank Governor Ahsan H Mansur stated at the merger announcement that the sponsor and general shareholders of the five banks would receive no compensation, as the net asset value per Tk10 of face-value share had fallen as low as negative Tk450 in some cases.

Share trading of First Security Islami Bank has since been suspended on both stock exchanges. 

Before trading was halted, the bank's stock had closed at Tk1.90 per share, giving it a market capitalisation of just Tk229 crore, far below the scale of losses the institution is currently carrying.

Analysts said the ongoing merger process is expected to reshape the Islamic banking landscape, but for depositors and shareholders of First Security Islami Bank, the damage has already been done.