FE REPORT
The Bangladesh Bank (BB) has appointed an administrator at the problem-ridden ICB Islamic Bank in a fresh move to safeguard depositors and investors and restore governance at the lending institution.
Mamunur Rahman, an executive director of the central bank, has been assigned as administrator, according to a disclosure filed with the stock exchanges on Tuesday.
The latest intervention comes as the Shariah-based bank continues to grapple with a severe financial crisis induced by mounting losses, weak governance, and a fragile balance sheet.
ICB Islamic Bank has long been under regulatory scrutiny due to persistent irregularities. In April last year, the central bank dissolved its board, citing serious deficiencies in management and governance.
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 had exceeded Tk 21 billion, underscoring a prolonged failure to return to profitability.
Nearly 91 per cent of its investments were classified by the end of 2024-one of the highest ratios in the country-highlighting severe asset quality deterioration.
Its auditor has raised serious concerns, noting that the bank's capital adequacy ratio plunged to negative 172 per cent, far below the regulatory minimum of 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 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 the revelation of corrupt practices 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 bank's irrecoverable state surfaced at a time when the BB's plan for mergers between weak and strong banks made headlines in 2024. Most well-performing banks did not want to take on the liabilities of weak banks.
Former central bank governor Ahsan H. Mansur earlier argued that the bank should be liquidated rather than kept afloat.
"Allowing the bank to continue operations will only increase the eventual burden. Sooner or later, the government will have to compensate depositors," he said.
The bank's financial bleeding is reflected in its stock performance. Its share price has remained far below the face value of Tk 10 for years, closing at Tk 2.80 on Tuesday.
The market price erosion has pushed its market capitalisation down to Tk 1.86 billion, significantly lower than its paid-up capital of Tk 6.64 billion.
With the appointment of an administrator, the central bank appears to be tightening oversight once again. However, analysts say that without a decisive restructuring plan, including possible liquidation or merger, the bank's recovery prospects remain slim.
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