Islami Bank's Shares Fall Below Tk20 for the First Time Since 2020 as Losses Mount

Islami Bank Bangladesh's shares closed at Tk19.50 on Sunday, a drop of 5.34 percent that pushed the country's largest private bank below the Tk20 mark for the first time since 2020. The slide capped a brutal stretch for a lender that was once the crown jewel of Bangladesh's Islamic banking sector, and it came days after the bank disclosed a nine month loss that investors had been bracing for but still found hard to absorb.

Key takeaways

• Islami Bank's share price fell 5.34 percent to Tk19.50, its lowest level since 2020 and far below the Tk64 peak it hit in September 2024.
• The bank posted a consolidated loss of roughly Tk3,286 crore for the first nine months of 2026, compared with a Tk100 crore profit in the same period last year.
• Classified loans jumped 44 percent to Tk94,322 crore, about 51 percent of the entire loan book.
• Required loan loss provisions stood at Tk92,537.57 crore, but the bank had set aside only Tk7,922.41 crore, a shortfall of more than Tk84,000 crore.

A six year low, and a market that has stopped waiting for good news

Tk19.50 is not just a bad day on the Dhaka Stock Exchange. It is the lowest Islami Bank has traded at since 2020, and it leaves the bank's market value at around Tk3,139 crore, roughly Tk7,000 crore below where it stood at its September 2024 peak of Tk64 a share. For a bank that controls one of the largest branch networks and deposit bases in the country, that is a strikingly thin market valuation, and it reflects just how far investor confidence has fallen since regulators began unwinding the ownership structure that controlled the bank for nearly a decade.

Trading desks in Motijheel have grown used to Islami Bank headlines by now, but Sunday's close still stood out because it came with a number attached: a nine month loss of about Tk3,286 crore on a consolidated basis, with a standalone loss of Tk3,302.57 crore and a single July to September quarterly loss of Tk1,970.18 crore. A year earlier, over the same nine months, the bank had managed a modest profit of around Tk100 crore. The swing from profit to multi thousand crore loss in a single year is one of the sharpest reversals any listed Bangladeshi bank has reported in recent memory.

Where the losses are actually coming from

Islami Bank's own disclosures point to two main drivers. The bank says investment income, the profit it earns on financing and investment activities under Islamic banking rules, has fallen sharply because of classified investments, the Islamic banking equivalent of non performing loans, and what it describes as fund embezzlement carried out by connected parties. On top of that, the bank is paying out more in profit to depositors than it is earning from its asset base, a mismatch that squeezes earnings from both directions.

The scale of the bad asset problem becomes clearer in the bank's 2025 annual report. Classified loans rose 44 percent year on year to Tk94,322 crore, which works out to 51 percent of the bank's entire loan portfolio, up from 42.36 percent in 2024. In plain terms, more than half of every taka Islami Bank has lent out is now considered at risk of not being repaid in full. Bangladesh Bank's own provisioning rules required the bank to set aside Tk92,537.57 crore against those bad assets. It had actually provisioned just Tk7,922.41 crore, leaving a shortfall above Tk84,000 crore that effectively sits as an unrecognised hole in the bank's balance sheet.

"The surge in bad loans traces back to exposures that were concealed for years under the previous ownership," a senior bank official said, speaking on condition of anonymity, pointing to financing tied to the S Alam Group, which took control of Islami Bank in 2017.

Metric	2025 (9 months)	2026 (9 months)
Consolidated profit or loss	Profit of about Tk100 crore	Loss of about Tk3,286 crore
Classified loans (share of loan book)	42.36 percent	51 percent
Classified loans (amount)	Roughly Tk65,500 crore	Tk94,322 crore
Required provisions	Not disclosed in this report	Tk92,537.57 crore
Provisions actually held	Not disclosed in this report	Tk7,922.41 crore

From S Alam's bank to the state's problem child

Islami Bank's troubles are inseparable from the rise and fall of the S Alam Group, the conglomerate that took effective control of the bank in 2017 and, according to Bangladesh Bank's own findings after the political transition of 2024, used its grip on the lender's board to channel enormous sums of financing to related companies with little regard for repayment capacity. Bangladesh Bank dissolved Islami Bank's board in June 2026 and installed an administrator to run the institution directly, with an acting managing director handling day to day operations. That intervention was meant to stop the bleeding and start the cleanup. What Sunday's numbers show is that the cleanup is still uncovering losses that had been hidden rather than resolved.

This is part of a wider pattern playing out across several banks that were effectively captured by politically connected owners before 2024, where central bank administrators have had to work through years of concealed exposure before the real state of a bank's books becomes visible. The process is painful for existing shareholders, whose stock keeps resetting to new lows as fresh disclosures emerge, but regulators have generally argued it is necessary before any credible recapitalisation or merger can happen. For readers tracking Bangladesh's broader bank FDR rates, it is worth noting that banks under this kind of administrator led restructuring often price deposits more aggressively to retain liquidity, even as their equity keeps falling.

What it means for you

If you hold Islami Bank shares, the honest answer is that the fundamentals have not stabilised yet, and a bank still finding tens of thousands of crore taka in unprovisioned bad loans is not a bank where the bottom has clearly been reached. If you are a depositor, your money is not in the same position as a shareholder's. Bangladesh Bank's administrator led oversight is specifically aimed at keeping a systemically important bank functioning for depositors even while its equity holders absorb the losses, and deposit insurance and central bank backstops exist precisely for situations like this. Businesses and individuals who rely on Islami Bank for day to day banking should watch for any changes in service levels or account terms as the administrator continues restructuring, but there is no indication that depositor access is currently at risk.

For investors more broadly, Islami Bank's slide is a reminder that Bangladesh's banking sector clean up is far from finished. Several other banks that changed hands or came under administrator control over the past two years are working through similar legacy problems, and their share prices have moved in similarly unpredictable ways as new disclosures land. Anyone comparing bank stocks on the Dhaka Stock Exchange right now is, in effect, also trying to judge how much bad news from the old ownership era is still left to surface.

The bottom line

Islami Bank's fall below Tk20 is less a single day story than a marker of how deep the bank's problems still run, more than two years after the political changes that unseated its former controlling shareholder. With classified loans above half the loan book and provisions covering less than a tenth of what regulators say is required, the bank's path back to stability looks long, even as its administrator works to keep the institution running for its depositors in the meantime.