City Group, one of Bangladesh's leading conglomerates and the owner of the popular 'TEER' brand, is currently facing significant financial and operational challenges. Following the death of its founder in 2023, the group experienced a leadership transition at a critical time. Simultaneously, the depreciation of the Bangladeshi taka against the US dollar reportedly resulted in foreign exchange losses of around Tk 25 billion (2,500 crore), placing additional pressure on its financial position.
The situation has been further aggravated by prolonged gas shortages, which have disrupted production at several industrial units. With investments of nearly Tk 140 billion in various manufacturing facilities financed by banks, the group has reportedly been incurring substantial losses due to underutilised production capacity.
Against this backdrop, 36 banks with a combined exposure of approximately Tk 266 billion have adopted a coordinated recovery and support framework. The mechanism resembles a "waterfall" structure commonly used in syndicated financing arrangements. Under the proposed model, all sales proceeds of the group will be closely monitored through designated banking channels. Around 80 per cent of the sales revenue will be recycled as working capital to facilitate the import of raw materials, maintain production, and support business continuity. The remaining 20 per cent will be utilized for gradual loan adjustment and debt recovery.
This approach reflects a pragmatic balance between safeguarding the banking sector's interests and preserving a major industrial enterprise. Allowing the group to continue operations increases the likelihood of recovering outstanding loans while protecting employment, industrial output, and supply chains.
Given the rising non-performing loans (NPLs) in the banking sector, such collaborative restructuring efforts deserve policy support. Government agencies, regulators, and financial institutions should work together to ensure effective implementation and oversight. If executed successfully, this model could become a valuable example of corporate rehabilitation in Bangladesh, creating a win-win outcome for both lenders and the broader economy.
Md. Zakaria
FAVP & Credit Analyst
CRM-CMSME Division
NCC Bank PLC, Head Office