The Bangladesh Bank has reconstituted the board of ICB Islamic Bank by appointing three independent directors in a fresh move to strengthen governance and oversight at the struggling lender.
The central bank issued the directive through a letter last week, the bank said in a regulatory filing on Monday.
The newly appointed independent directors are AKM Ehsan, former executive director of the central bank; Muhammad Hafizur Rahman, partner at KM Hasan and Co Chartered Accountants; and Mahmudul Amin Masud, former deputy managing director of Agrani Bank.
The latest intervention comes as the Shariah-based bank continues to grapple with severe financial distress marked by mounting losses, weak governance and a fragile balance sheet.
The inclusion of former senior central bank officials and experienced banking and accounting professionals is expected to improve oversight, compliance and risk management practices at the bank, according to market analysts.
Following the disclosure, the stock of ICB Islamic Bank surged 2.7 per cent to Tk 3.85 per share on Monday on the Dhaka Stock Exchange, despite the overall market closing in the red.
ICB Islamic Bank has long been under regulatory scrutiny due to persistent irregularities. The bank's financial health has deteriorated sharply over time. It is now burdened with a substantial capital shortfall, inadequate provisioning, a high volume of classified investments and an acute liquidity crunch.
By the end of 2025, its accumulated losses exceeded Tk 21 billion, underscoring a prolonged inability to return to profitability.
Key financial indicators also paint a bleak picture. The bank's net asset value per share stood at negative Tk 21.48 in September 2025, worsening from negative Tk 20.07 a year earlier. The bank is yet to disclose its 2025 financial results.
Nearly 91 per cent of its investments had been classified by the end of 2024 - one of the highest ratios among banks - highlighting severe asset quality deterioration.
The bank's auditor has also raised serious concerns, noting that the bank's capital adequacy ratio plunged to around negative 172 per cent, far below the regulatory requirement of a minimum 12.50 per cent.
"These conditions indicate material uncertainty that may cast significant doubt on the bank's ability to continue as a going concern," the auditor warned.
Bank officials attribute part of the crisis to legacy issues inherited from its predecessor. The institution has been struggling since the mid-2000s, when massive irregularities first surfaced.
In 2006, the central bank dissolved the board following corruption findings and took direct control. Later, in 2007, a majority stake was sold to Switzerland-based investors, and the bank was rebranded as ICB Islamic Bank in 2008.
Despite multiple interventions over the years, efforts to revive the lender have largely failed.
The erosion of the share price over the years, meanwhile, has pushed its market capitalisation down to Tk 1.73 billion, significantly lower than the company's paid-up capital of Tk 6.64 billion.
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