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The audit firm of the entangled ICB Islamic Bank has raised a red flag as financial indicators of the lender have remained negative for long.
The bank suffered a net loss of Tk 252 million in 2022. Hence, the accumulated loss of the bank stood at nearly Tk 19.49 billion, said the auditor of the bank -- Shafiq Basak & Co -- in a filing with the DSE on Wednesday.
Negative equity amounts to Tk 12.31 billion as of December 2022 and the capital adequacy ratio (138.91) per cent while the minimum is 12.50 per cent.
The aggregate of profit-paying deposits is Tk 80.24 billion and the profit-earning investments Tk 1.27 billion as of 31 December 2022.
Overall, 84.34 per cent of the investments of the bank are classified.
"These events or conditions, along with other matters, indicate that a material uncertainty exists that may cast significant doubt on the bank's ability to continue as a going concern," said the auditor.
Owing to the deepening losses, the bank failed to declare dividends for many years. Its shares have been transacted at far below the face value of Tk 10 each for years.
The stock price has been languishing at the floor of Tk 5.40 since August 10 last year.
ICB Islamic Bank got listed on the DSE in 1990.
The bank's loss has decreased by 35 per cent year-on-year in 2022 as the lender managed to make a profit of Tk 100 million for the first time in its history in the April-June quarter of 2022.
Muhammad Shafiq Bin Abdullah, managing director & CEO of ICB Islamic Bank, at the time said, "Right now, we are emphasising on fee-based incomes like letters of credit (LC), and earnest money financing (EMF), and we have earned a lot from these types of investments which will continue for the upcoming years to support our solid income."
He said that apart from product diversification, the bank recovered bad loans partially through sole efforts by the management, which also "helped us to post a profit for the first time in April-June quarter".
ICB Islamic Bank started its journey back in 1987 when it was operating under the moniker Al-Baraka Bank. Then in 2004, it started as a scheduled commercial bank under a new name -- Oriental Bank.
In June 2006, the Bangladesh Bank (BB) dissolved the board of directors of Oriental Bank after detecting massive corruption. To safeguard the interest of depositors, the central bank took over full control of the bank.
Then in August 2007, the central bank floated a tender to sell the majority of the bank's shares. Two bidders participated in the tender, with Swiss ICB Group walking away with the stake. The bank was renamed ICB Islamic Bank in 2008.
Sponsor-directors own 52.76 per cent shares of the bank while the government owns 0.17 per cent, institutional investors 21.61 per cent, and general public 25.46 per cent as of March 31.
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