Islami Bank Bangladesh PLC has planned to increase its authorised capital fivefold to Tk10,000 crore from the existing Tk2,000 crore, amid mounting financial pressure, a sharp quarterly loss and a high volume of non-performing investments.
The Shariah-based lender disclosed the proposal to Dhaka Stock Exchange (DSE) on Thursday, saying the move would require amendments to its Memorandum and Articles of Association. The proposed increase will be subject to approval from Bangladesh Bank (BB), other relevant regulatory authorities and shareholders’ consent.
Authorised capital represents the maximum amount of share capital a company is legally permitted to issue. However, an increase in authorised capital does not automatically mean the bank will raise fresh funds immediately.
The move comes at a challenging time for the bank, which reported a consolidated loss of Tk1,970 crore in the July-September quarter of 2026, compared with a profit of Tk32 crore in the corresponding period of the previous year. Its consolidated loss per share stood at Tk12.24 during the quarter, against earnings per share (EPS) of Tk0.20 a year earlier.
In its financial disclosure, the bank attributed the sharp deterioration in profitability mainly to lower investment income. It acknowledged that classified and non-performing investments remained high, largely due to the embezzlement of funds by connected parties involving large legacy exposures. Increased cost of deposits also weighed on profitability, as profit payments on deposits rose despite a decline in the deposit base at the end of the reporting period.
The bank said it had undertaken several measures in line with recent BB guidance to strengthen its capital base and asset quality, accelerate investment recovery and improve income generation. It expects these initiatives to contribute positively to future earnings and earnings per share.
However, the proposed increase in authorised capital alone will not address the bank’s underlying financial weaknesses. The effectiveness of recovery efforts, improvement in asset quality and the ability to restore sustainable income growth will remain critical to its financial turnaround.
Meanwhile, Islami Bank shares fell 1.40 per cent to Tk21.80 on the DSE on Thursday.
