ICB Paying the Price for Wrong Investment Decisions

Once a profitable state-owned investment institution, the Investment Corporation of Bangladesh (ICB) has now turned into a loss-making entity. Established to invest in the stock market, the organisation has gradually lost its investment capacity and is now virtually a sick institution.

Poor investment decisions have forced ICB to maintain high security provisions, resulting in massive losses. At the same time, uncertainty has grown over the recovery of deposits placed in weak banks and financial institutions. In this situation, the institution has been surviving on successive government loans.

Record Loss in the Last Fiscal Year

In the 2024–25 fiscal year, ICB incurred a record loss of Tk 1,214 crore, with a loss per share of Tk 14. As a result, the organisation did not declare any dividend for its shareholders marking the first time in its history that it failed to pay dividends.

In the first quarter of the current 2025–26 fiscal year, ICB has already reported a loss of Tk 151 crore.
An analysis of financial data shows that ICB made a net profit of Tk 115.33 crore in the 2020–21 fiscal year, which increased to Tk 144.58 crore in 2021–22. However, net profit fell sharply to Tk 77.58 crore in 2022–23 and remained unchanged at Tk 77.58 crore in the 2023–24 fiscal year.

Deposits Trapped in Weak Banks and Financial Institutions
ICB has deposits worth nearly Tk 1,000 crore in weak banks and financial institutions. Despite repeated notices, most of the deposits have not been recovered. Seven of the institutions where ICB has placed funds are now on the verge of closure, creating serious uncertainty over the recovery of these deposits.

According to ICB’s financial statements, the organisation has deposited Tk 928.45 crore as Fixed Deposit Receipts (FDRs) with one bank and ten financial institutions. Of this amount, Tk 162.21 crore is deposited with Padma Bank, while Tk 766.24 crore is placed with ten weak financial institutions.

Bangladesh Bank has recently initiated steps to shut down nine financial institutions, and ICB has deposits in seven of them amounting to Tk 452.42 crore.

Market analysts say irregularities, mismanagement and the burden of non-performing loans have pushed many financial institutions into an existential crisis, leaving them unable to return depositors’ money.

Breakdown of Deposits
ICB’s financial reports show that Tk 162.21 crore is deposited with private commercial bank Padma Bank. Among financial institutions, the highest deposit Tk 191.60 crore is with International Leasing and Financial Services.
Other major deposits include Tk 74.22 crore with Fareast Finance, Tk 56.94 crore with FAS Finance, and Tk 50.12 crore with Aviva Finance Limited.

Among institutions listed for closure, ICB has deposits of Tk 47.29 crore with Premier Leasing, Tk 25 crore with People’s Leasing, and Tk 7.23 crore with Prime Finance.

Chairman’s Explanation
ICB Chairman Professor Abu Ahmed told Banik Barta that the deposits were placed in weak banks and financial institutions mainly to earn higher interest rates.

“Those who made the decisions argued that these were once good companies. Now they are collapsing. Until recently, these amounts were shown as receivables. We have now seen that nine financial institutions are set to be closed. Once decisions are taken, the government may either provide shares or return the deposits,” he said. Referring to meetings with the concerned institutions, he added, “We held many meetings regarding the recovery of the deposits. Sometimes small amounts were returned, sometimes nothing. Most institutions returned nothing. Over the past two years, some have started repaying small amounts to regularise their position. Ideally, these deposits should have been withdrawn earlier, and placing funds in such institutions was not the right decision.”

Asked whether there were any irregularities in keeping deposits in those institutions, he said, “Their argument is that the deposits were placed in listed companies for profit. From that perspective, I do not see any irregularity. It is not possible for me to assess this, nor is it my responsibility. If there were irregularities, the relevant authorities can investigate.”

Government Loans to Keep ICB Afloat

Amid the crisis, ICB sought Tk 10,000 crore in government support. In November last year, however, the government approved a loan of Tk 1,000 crore with several conditions.

The loan is to be kept in a separate account and repaid over ten years, including a one-year grace period. It carries an interest rate of 5 percent and must be repaid in semi-annual instalments.

The government has stipulated that the funds cannot be used for any purpose other than approved expenditure heads. As the Government of Bangladesh is the guarantor, it will have to settle the liability if ICB fails to repay the loan.

Earlier, in November 2024, ICB received another Tk 3,000 crore loan from a special fund, also guaranteed by the government. Although the full Tk 10,000 crore sought was not approved, ICB officials believe the Tk 1,000 crore loan will help ease its liquidity crisis to some extent.

Experts Call for Accountability and Reform

Experts say restoring ICB’s financial health will require accountability for faulty investment decisions, clear investment policies, and stronger monitoring mechanisms.

Al Amin, Associate Professor of the Department of Accounting at the University of Dhaka and a member of the Capital Market Reform Taskforce, told Banijjo Protidin that the government must properly assess the situation and formulate a clear investment policy.

“There should be clear guidelines on what types of shares ICB can invest in. Board members must be held accountable for buying shares at inflated prices, why those decisions were taken and whether any vested interests were involved. A separate monitoring cell should oversee these issues. At the same time, a strong research team is needed to analyse investment prospects beforehand. Without these reforms, no matter how much incentive or special support the government provides, it will remain insufficient in the face of market realities,” he said.