Muhammad Ayub Ali :
In the July-September quarter of this year, Shariah-based banks in Bangladesh collectively incurred losses totaling Tk 750 crore as provisions for non-performing loans increased. Despite tightened measures by the central bank to ensure adequate provisioning, Islamic banks continue to experience negative cash flows.
Among the loss-making banks, Exim Bank reported a loss of Tk 566 crore, Islami Bank incurred Tk 89 crore, Al-Arafah Islami Bank Tk 47 crore, SIBL Tk 29 crore, and ICB Islamic Bank Tk 19 crore.
According to unaudited financial reports, Exim Bank’s consolidated loss per share reached Tk 2.77 for the first nine months of 2024. For the same period last year, Exim Bank reported an earnings per share of Tk 0.37, while this year’s third quarter saw a consolidated loss per share of Tk 3.91.
Notably, Islami Bank Bangladesh PLC reported a Tk 89 crore loss for the July-September quarter of 2024, contrasting with a Tk 94 crore profit in the same period of 2023. Dhaka Stock Exchange (DSE) disclosures reveal that Islami Bank’s loss per share was Tk 0.55 in the July-September quarter, compared to earnings per share of Tk 0.59 the previous year.
According to the bank’s statement, this decline in earnings per share is attributed to higher provisioning requirements against investments compared to the previous period.
Al-Arafah Islami Bank reported a loss per share of Tk 0.41, down from a profit per share of Tk 0.39 during the same quarter in the previous financial year. SIBL posted a Tk 29.86 crore loss in the third quarter, contrasting with a Tk 57 crore net income a year ago. Its basic loss per share from continuing operations was Tk 0.37, compared to earnings per share of Tk 0.43 in the same period the previous year.
ICB Islamic Bank, in the third quarter, recorded a consolidated loss per share of Tk 0.29, up from Tk 0.17 in the corresponding period last year. For the first three quarters of the year, ICB Islamic Bank’s cumulative loss per share reached Tk 0.71, compared to Tk 0.56 in the same period last year.
Industry observers, including Saiful Islam, president of the DSE Brokers Association, have noted that some Chattogram-based business groups, particularly the S Alam Group, have leveraged Islamic banks for substantial loans, contributing to their current financial strains.
Following a student-led movement in July-August, the central bank reconstituted the boards of some Islamic banks and extended assurances to support their recovery. While a turnaround is anticipated, it may take time for these banks to stabilize fully.
