While corporate shareholders of Islami Bank Bangladesh are selling off their entire holdings, institutional and foreign investors are grabbing these shares in the block market.
Three corporate shareholders of the bank sold off their stakes last month.
Among them, Uniglobe Business Resources sold 75.20 million shares, Kingsway Endeavors 70.80 million and Armada Spinning Mills 32.36 million shares of the lender.
Market insiders said these little known companies are concerns of Chattogram-based S Alam Group.
The directorship of Uniglobe Business, Kingsway Endeavors and Armada Spinning Mills has been withdrawn from the bank, according to a disclosure posted on the Dhaka Stock Exchange's website on Monday.
In May, another corporate shareholder of the bank, Investment Corporation of Bangladesh, sold out its entire holding of 33.47 million shares of Islami Bank.
The stake held by shareholders-directors has fallen by 13.16 per cent as four corporate shareholders gave up directorship of the bank.
As a result, Islami Bank's shareholding by sponsor-directors came down to 41.90 per cent at the end of June, from 55.06 per cent in December last year.
The bank's share is currently trading at Tk 32.60 each. The total market value of its shares is about Tk 6.90 billion at the current price.
The state-run ICB withdrew its directorship in May.
ICB Managing Director Md Abul Hossain could not name the buyer of the shares that the ICB sold on the block board.
"The sell-buy is part of regular operations in the stock market. ICB requires money to distribute dividends for the outgoing fiscal year," he said.
Meanwhile, the United Arab Emirates-based BTA Wealth Management reportedly purchased above 34 million shares of the lender in the block market in May.
Also, JMC Builders, a concern of S Alam Group, bought 2.01 per cent, or 32.36 million shares of the bank, almost equivalent to the shares sold by Armada Spinning Mills, in June.
Ahsanul Alam, son of S Alam Group Chairman Mohammed Saiful Alam, has been appointed as shareholder director of the bank as a nominee of JMC Builders.
Currently, he is serving Islami Bank Bangladesh as its chairman.
Islami Bank Bangladesh witnessed a massive change in its board and management towards the end of 2016. The board's chairman and managing director along with a number of directors were replaced overnight.
The representative appointed by Armada Spinning became the chairman of the bank at that time. Armada Spinning, a concern of the business giant S Alam Group, was one of the largest shareholders of the bank at the time of the change of ownership.
Several other independent directors joined the board as well, mainly coming from different entities of S Alam Group. Foreigners started leaving the bank soon after the plan for a changeover became public.
After the change of ownership, the bank fell into a major financial crisis due to mismanagement and internal conflicts. The chairman appointed by S Alam Group resigned, and the bank curtailed its lending activities due to a lack of funds.
Prof Md Nazmul Hassan was the last representative of Armada Spinning in the bank's board.
Meanwhile, a large number of shares of Islami Bank Bangladesh have changed hands in the block market in the last three months.
Several stockbrokers said the shares had been exchanged among the institutions related to the group owned by the bank.
However, the bank's shares are not trading much in the last two months in the main market due to the floor price -- Tk 32.60.
"We have to wait for a few more days to know whether there is any change in the board of directors," said a stockbroker.
Islami Bank's profit dropped 32 per cent year-on-year to Tk 571 million in the January-March quarter this year.
It made Tk 6.16 billion in profit in 2022 and disbursed 10 per cent cash dividend for the year.
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