The state-run Investment Corporation of Bangladesh (ICB) is in the red for the nine months through March of FY24, having counted a loss as high as Tk 3 billion for higher interest rates and scanty gains from the capital market.
Its income in the form of dividends and capital gains shrank by nearly 35 per cent year-on-year in July-March FY24.
ICB earned Tk 1.29 billion in interest income in the first nine months of FY24 but bore Tk 6.75 billion as interest expense. There was a net interest loss of Tk 5.47 billion during the period.
Usually, the investment bank earns enough from the equity market in dividends and capital gains to bridge the interest gap.
But this time the scenario was different. After the withdrawal of floor price in January, the DSE index went down by more than 4 per cent by the end of March.
ICB had been expecting a recovery from its losses after the removal of price restriction.
From July to March FY23, ICB earned Tk 5.65 billion in dividends and capital gains. That was reduced to Tk 3.68 billion in the same period of FY24.
Income from capital gains fell 63 per cent in the nine months through March FY24, compared to the same period a year earlier.
Though ICB had been able to reduce their operating expenses in July-March FY24 by more than 10 per cent year-on-year, it had no positive impact on the financial results.
Provision against non-performing assets jumped more than 30 times to Tk 0.6 billion during the nine-month period, compared to the same period of the previous year.
Professor Dr. Suborna Barua, chairman of ICB, told the FE, "We are trying very hard. If we get the support of Tk 50 billion from the government and if the capital market turns around, we will recover very soon."
Listed in 1977, the investment bank's stock dropped 1.38 per cent to close at Tk 49.90 per share on the Dhaka Stock Exchange on Monday.
farhan.fardaus@gmail.com