Why ICB Asset funds skip dividends despite earnings rebound in FY26

ICB Asset Management Company, a subsidiary of the Investment Corporation of Bangladesh (ICB), has skipped dividend payouts for seven of its managed mutual funds for the third consecutive year despite a significant earnings rebound in FY26.

The trustee committee declared zero dividends for the seven funds at a meeting on Sunday, leaving their unitholders without payouts for another year.

The funds had previously skipped dividends amid weak earnings caused by volatility in the capital market. However, the ICB AMCL First Agrani Bank Mutual Fund declared a 4% dividend after posting a profit and maintaining positive retained earnings, according to ICB officials.

They said losses accumulated in previous years had left the retained earnings of the other funds negative, limiting their ability to distribute dividends despite improved earnings in FY26.

The domestic stock market remained volatile in recent years due to various factors, including national elections and geopolitical tensions, the officials said. Although the market recovered towards the end of FY26, generating capital gains for the funds, much of those gains remained unrealised and did not generate sufficient cash flow.

"As the funds had negative retained earnings due to previous losses, they were not in a position to pay dividends even after adjusting for this year's improved earnings," an ICB official said.

Meanwhile, the zero-dividend declarations triggered heavy selling of the funds' units. According to Dhaka Stock Exchange (DSE) data, their unit prices fell by 4% to 7% following the announcements.

ICB Asset Management approved the financial statements of eight of its 10 closed-end mutual funds that follow the fiscal-year cycle. Most of the funds recorded a sharp earnings recovery in FY26, according to ICB data, compared with the previous year when seven incurred losses and only one posted a profit.

The earnings rebound came as the broader stock market staged a strong recovery in FY26. The benchmark DSEX index rose 19% during the fiscal year to 5,762 points, its strongest annual performance in years, amid market reforms and renewed investor confidence.

The DSEX gained 924 points during the year, while the blue-chip DS30 index rose 20%, or 363 points, to 2,178. Total market capitalisation increased by Tk36,421 crore, or 5.49%, to Tk6.98 lakh crore.

ICB Asset Management currently manages 15 mutual funds – 10 closed-end and five open-end – with the eight closed-end funds having a combined size of Tk803 crore.

Fund performance

ICB AMCL Second Mutual Fund, with a fund size of Tk50 crore, posted a profit of Tk1.47 per unit in FY26, compared with a loss of Tk0.15 per unit in FY25.

ICB Employees Provident Mutual Fund One, with a fund size of Tk75 crore, reported a profit of Tk1.12 per unit, reversing a Tk0.23 per-unit loss in FY25.

Prime Bank 1st ICB AMCL Mutual Fund posted a profit of Tk1.17 per unit, while Phoenix Finance 1st Mutual Fund and ICB AMCL Third NRB Mutual Fund reported profits of Tk1.64 and Tk1.40 per unit, respectively.

IFIL Islamic Mutual Fund-1 recorded a profit of Tk0.96 per unit, while ICB AMCL Sonali Bank 1st Mutual Fund posted Tk1.12 per unit.

The ICB AMCL First Agrani Bank Mutual Fund, with a fund size of Tk100 crore, reported a profit of Tk1.35 per unit, up from Tk0.36 per unit in FY25, enabling it to declare a 4% dividend.