Islami Bank Bangladesh PLC has decided to recover about Tk聽10,000 crore of loans by selling shares held by controversial S Alam Group, said the bank鈥檚 chairman, Obayed Ullah Al Masud, on Monday.
He made the statement at a press conference held at the Bangladesh Bank head office in the capital Dhaka on the day.
Bangladesh Bank governor Ahsan H Mansur was also present in the press conference.
Obayed Ullah said that the bank currently faced a gap of about Tk聽20,000 crore between its investments and deposits.
This deficit will be addressed through the sales of S Alam Group鈥檚 shares and by issuing new shares to raise an additional Tk聽10,000 crore.
Dhaka Stock Exchange data, however, show that Islami Bank鈥檚 total market capitalisation stood at Tk聽9,000 crore on Monday.
The value of the shares (80 per cent) held by S Alam Group was significantly lower than the estimated Tk聽10,000 crore.
Obayed Ullah revealed that the S Alam Group had withdrawn about Tk聽80,000 crore from 17 branches of the bank. The Group also damaged the bank鈥檚 relationships with international banks, he said.
The exact degree of damages would be revealed after the completion of the bank鈥檚 forensic audit by December, he said.
He said that steps were being taken to bring back former Saudi investor Al Rajhi Group and involve the International Finance Corporation to restore the private sector commercial bank鈥檚 credibility, adding that the bank would approach them in January 2025.
The ownership structure of Islami Bank underwent significant changes in 2017, leading to a gradual exit of foreign investors.
The bank鈥檚 foreign shareholding reduced from over 50 per cent to 13 per cent. High-profile foreign shareholders, including Islamic Development Bank and Dubai Islamic Bank, divested them of their shares in Islami Bank Bangladesh after the S Alam Group took control of the bank.
Bangladesh Bank governor Ahsan H Mansur at the press conference assured that depositors鈥� funds would be safeguarded, emphasising the central bank鈥檚 commitment to stabilising troubled banks.
Besides, he stressed that no business entity would be allowed to collapse, as they are considered national assets integral to the country鈥檚 investment, production and supply chains.
He said that legal actions were underway against individuals and businesses implicated in irregularities.
Obayed Ullah claimed that the bank鈥檚 operation was improving, citing a Tk聽5,000-crore deposit growth over the three months and a rise in remittance inflows.
The bank has paused approving new loans as part of its recovery efforts, he said.