Bangladesh Finance financial analysis: negative equity, -31.96% CAR, 13.75% NPL and negative net interest income (Oct 2026)

Investment considerations: equity of minus BDT 5.32bn, net interest income of minus BDT 1.06bn and 13.75% classified loans in 2025

Bangladesh Finance PLC (DSE: BDFINANCE), named Bangladesh Finance Limited until 15-Jun-2025, is a non-bank financial institution (NBFI) licensed by Bangladesh Bank and governed by the Finance Company Act, 2023 [1 p.344] [6]. It lends to businesses and households through lease finance, term finance and housing finance, funds itself with term deposits and bank borrowings, and owns two capital-market subsidiaries, Bangladesh Finance Securities Limited and Bangladesh Finance Capital Limited [1 p.391] [1 p.376]. It operates seven branches, all in Bangladesh [1 p.363]. At 31-Dec-2025 the company (solo) had loans of BDT 13,230.0m, deposits of BDT 8,538.6m, borrowings of BDT 3,250.4m and shareholders' equity of minus BDT 5,322.7m [1 p.355].

Under the decision tree of our NBFI sector format, negative equity places the company in the stressed variant, so this note leads with a going-concern check. The filings show three things at once. First, the balance sheet: equity turned from BDT 1,912.0m at Dec-2023 to minus BDT 5,425.5m at Dec-2024 after a BDT 7,050.0m provision charge, and stayed below zero in 2025 [1 p.143]. Second, the margin: interest income fell in every year of the 2020-2025 series, from BDT 1,659.5m to BDT 356.5m, while interest expense was BDT 1,415.0m in 2025, so net interest income has been negative since 2024 [2 p.145] [1 p.143]. Third, the profit: the 2025 profit after tax of BDT 143.1m came after a net provision write-back of BDT 1,376.7m, and the H1 2026 consolidated profit came after a net tax benefit [1 p.357] [3 p.1]. Against that, the auditor's opinion on the 2025 accounts is unmodified, the company reports a provision surplus of BDT 788.7m against its required provisions, and Alpha Credit Rating kept a long-term rating of AA [1 p.344] [1 p.382] [6].

Business model: lease, term and housing finance of BDT 13.2bn, 44% to industry, plus brokerage and merchant-bank subsidiaries

The company earns interest on three loan products. In 2025 interest on term finance was BDT 127.2m, on housing finance BDT 89.4m and on lease finance BDT 40.2m, after BDT 519.3m of interest was moved to the suspense account; a further BDT 99.7m came from fixed deposits and other placements with banks and NBFIs [1 p.391]. By sector, industry was 44.16% of loans at Dec-2025 (textiles 13.59%, iron, steel and engineering 11.58%), housing 18.16%, trade and commerce 14.21% and financial corporations 10.64% [1 p.381]. Dhaka division held 72.78% of loans and Chattogram 26.87% [1 p.381].

The segment note lists four reporting segments: conventional business, the Islamic wing, Bangladesh Finance Securities Limited (brokerage) and Bangladesh Finance Capital Limited (merchant banking) [1 p.376]. The subsidiaries add brokerage and margin-lending income to the consolidated accounts: consolidated interest income in 2025 was BDT 437.1m, of which BDT 67.3m came from the securities subsidiary and BDT 13.3m from the capital subsidiary [1 p.391]. The company holds BDT 849.9m of investment in subsidiaries in other assets and BDT 140.0m of preference shares issued by them [1 p.383] [1 p.379].

Over 2020-2025 the loan book moved within a narrow range, from BDT 12,843.7m to a peak of BDT 14,024.3m in 2024 and back to BDT 13,230.0m in 2025, while deposits peaked at BDT 9,862.4m in 2022 and fell in each year after [2 p.145] [1 p.143]. Profit after tax was BDT 225.8m in 2020 and BDT 268.2m in 2021, the highest in the series; the company then reported losses of BDT 1,060.0m in 2023 and BDT 7,345.0m in 2024 [2 p.145] [1 p.143]. In its 2024 dividend announcement the board said the loss 'resulted mainly from substantial provisions made for stressed loans, leases, and advances, as per Bangladesh Bank's regulatory guidance', with further provisions against negative equity in margin loans, investments in shares and private placements [6].

Going-concern check: unmodified opinion with an emphasis of matter, equity of minus BDT 5.32bn and CAR of -31.96%

The auditor, Snehasish Mahmud & Co. (partner Sukanta Bhattacharjee, FCA), signed the 2025 report on 29-Apr-2026 [1 p.348]. Its opinion paragraph reads: 'In our opinion, the accompanying consolidated financial statements of the Group and separate financial statements of the Company give a true and fair view of the consolidated financial position of the Group and separate financial position of the Company as at 31 December 2025' [1 p.344]. The emphasis of matter reads: 'We draw attention to Note 2.4 to the Financial Statements, which describes that the Financial Statements for the year ended 31 December 2025 have been prepared on a going concern basis, despite the group having negative equity of BDT 5,471.48 million except non-controlling interest as of that date. As further explained in Note 2.4, the management has provided its justification as to why the Financial Statements have been prepared following going concern basis despite significant accumulated losses. Our opinion is not modified in respect of this matter.' [1 p.344]

The 2024 report carried a similar paragraph from the same firm: 'We draw attention to Note 2.4 in the financial statements, which indicates that the group incurred a net loss BDT 7,833.15 million during the year ended December 31, 2024 and, as of that date, the group's equity has been negative by an amount of BDT 5,655.93 million' [2 p.358]. Under 'Other Matters' in the 2025 report the auditor states that it also audited the two subsidiaries and 'expressed an unmodified opinion' on them [1 p.347]. In note 2.4 the board says the company formulated a capital management plan, including a 7-year financial projection, and a liquidity management plan, and that 'no material uncertainty exists that would cast significant doubt on the Company's ability to continue as a going concern' [1 p.363] [1 p.364]. The projection itself is not printed in the pages read.

Two of the tests use the company's own statements. Cash and cash equivalents at Dec-2025 were BDT 1,323.7m, of which BDT 1,187.6m was balances with banks and financial institutions; BDT 637.5m of those balances were marked 'Encumbered' and BDT 550.1m 'Unencumbered' [1 p.359] [1 p.378]. Deposits falling due within one month were BDT 426.9m and within one to three months BDT 1,110.0m [1 p.386]. Interest payable on borrowings and deposits rose from BDT 439.2m to BDT 681.5m during 2025, while interest paid in cash was 82.9% of the interest expense booked [1 p.386] [1 p.359] [12].

Line items: interest income down to BDT 356m with 67% of loan interest suspended, interest expense of BDT 1.42bn

Interest income: printed interest income fell from BDT 1,659.5m in 2020 to BDT 356.5m in 2025, the lowest in the series, while the loan book was BDT 13,230.0m at the end of 2025 against BDT 12,843.7m at the end of 2020 [2 p.145] [1 p.143]. The notes show where the gap sits. Gross interest on loans and leases was BDT 776.2m in 2025 and BDT 1,852.6m in 2024; of these, BDT 519.3m and BDT 1,233.1m were transferred to the interest suspense account, so the amount recognised was BDT 256.8m and BDT 619.5m [1 p.391]. The accounting policy says interest on loans classified as special mention, sub-standard, doubtful or bad is not recognised as income but transferred to interest suspense [1 p.372]. On our calculation, recognised interest income was 2.38% of average interest-earning assets in 2025 against 10.73% in 2021 [12].

Interest expense: interest paid on deposits was BDT 1,055.6m in 2025 (BDT 1,037.3m in 2024) and on borrowings BDT 358.0m (BDT 391.8m), for a total of BDT 1,415.0m [1 p.391]. The company's 'Cost of Fund' line rose from 10.36% in 2024 to 11.69% in 2025 [1 p.402]. Interest expense was 70.3% of interest income in 2020 and 396.9% in 2025 [12]. Net interest income was minus BDT 707.3m in 2024 and minus BDT 1,058.5m in 2025 [1 p.357]. On 2025 year-end deposits and borrowings of BDT 11,789.0m, 1pp of funding cost equals about BDT 118m of interest a year (derived arithmetic) [12].

Other income: income from investment in securities fell from BDT 82.0m in 2024 to BDT 1.1m in 2025 and other operating income from BDT 43.5m to BDT 15.2m, so non-interest income was BDT 16.3m, the lowest in the 2020-2025 series [1 p.357] [1 p.143]. The directors' report gives a realised gain on shares of BDT 1.05m (solo) and a realised loss of BDT 482.24m (consolidated) in 2025 [1 p.136]. In 2026 the consolidated picture changed: H1 2026 income from investment was BDT 127.0m against BDT 5.5m in H1 2025 [3 p.1], and the company attributed its higher 2026 EPS to 'higher realized capital gains from investments in securities and the reversal of excess provisions' [6].

Operating expenses: total operating expenses were BDT 302.6m in 2025 against BDT 289.7m in 2024; salaries and allowances, BDT 212.3m, were 70.2% of the total [1 p.357] [12]. Operating expenses have been between BDT 244m and BDT 306m since 2021 [1 p.40]. With total operating income negative, the printed cost-to-income ratio was -29.03% in 2025 and is not a usable measure [1 p.40].

Provisions: the P&L line 'General provisions for Unclassified Investment' was a charge of BDT 6,612.1m in 2024 and a credit of BDT 1,775.0m in 2025; specific provisions for classified loans were BDT 121.3m and BDT 150.7m, provisions for other assets BDT 254.3m and BDT 330.9m, and provisions for investment in securities BDT 62.3m and minus BDT 83.3m [1 p.357]. Net, the 2025 provision line was a credit of BDT 1,376.7m, which turned a loss before provision of BDT 1,344.8m into a profit before tax of BDT 31.9m [1 p.357]. Note 6.7 states that 'total provision of Tk. 1,293,443,894 was released through successful recovery initiatives and the rescheduling of loan and lease accounts under the policy support of Bangladesh Bank' [1 p.382].

Tax: the company booked a deferred tax benefit of BDT 114.9m and a current tax charge of BDT 3.7m in 2025, a net benefit of BDT 111.2m, so profit after tax (BDT 143.1m) was higher than profit before tax (BDT 31.9m) [1 p.357]. Deferred tax assets were BDT 790.2m at Dec-2025 against BDT 674.9m a year earlier [1 p.384].

Asset quality: classified loans 13.75%, SMA 6.45%, and BDT 4.71bn of required provision for 'stressed' loans

Classification: at Dec-2025, standard loans were BDT 10,556.5m (79.79%), special-mention loans BDT 853.9m (6.45%), sub-standard BDT 82.3m, doubtful BDT 13.3m and bad/loss BDT 1,724.1m (13.03%) [1 p.381]. Classified loans were therefore BDT 1,819.6m, 13.75% of the book, against BDT 1,298.6m (9.26%) at Dec-2024 [1 p.381] [1 p.402]. The printed ratio was 3.22% in 2020 and 2.54% in 2021 [2 p.145]. The classification rules applied are those of DFIM Circular No. 04 of 26-Jul-2021, cited by the auditor as the basis for provisioning [1 p.345].

Provisions required versus kept: note 6.7 sets out what the company was required to hold. At Dec-2025 the requirement was BDT 1,109.2m for loans and lease finance under the classification rules, BDT 4,714.6m for 'Stressed Loans, Lease and Investments', BDT 85.7m for rescheduled loans and BDT 590.7m for other assets, a total of BDT 6,500.1m; the company held BDT 7,288.8m, a surplus of BDT 788.7m [1 p.382]. A year earlier the stressed-loan requirement was BDT 6,465.1m of a BDT 7,381.8m total [1 p.382]. The note says that 'As per the guidance of Bangladesh Bank, Bangladesh Finance has provided additional provisions for stressed Loan, Lease and Investments for preventing further deterioration and potential defaults' [1 p.382]. The filing does not list the stressed accounts or the Bangladesh Bank instruction behind the requirement in the pages read.

Coverage and net exposure: loan provisions of BDT 6,698.1m and interest suspense on loans of BDT 2,344.8m together were BDT 9,042.8m at Dec-2025 [1 p.382]. Deducting both from gross loans leaves BDT 4,187m of loans net of provisions and suspense, against BDT 3,805m a year earlier [12]. Total provisions maintained as printed in the Annexure (unclassified plus classified lines, which include provision for other assets) were 55.1% of loans in 2025 against 2.8% in 2021; on loan provisions alone (BDT 6,698.1m) the 2025 figure is 50.6% [1 p.143] [1 p.382] [12]. The interest suspense account (including BDT 131.2m on the ILFSL deposit) rose from BDT 723.5m at the start of 2024 to BDT 2,475.9m at Dec-2025, with BDT 519.3m added in 2025 and no recoveries recorded from it [1 p.387].

Write-offs: BDT 182.1m of loans were written off in 2025, taking cumulative written-off loans to BDT 796.3m; BDT 26.8m has been realised in total against loans previously written off [1 p.383]. Loans due by directors or officers were BDT 51.2m (BDT 57.5m in 2024), and loans to companies in which directors have an interest were nil [1 p.382].

Funding: BDT 8.54bn of deposits, 25.5% from banks and NBFIs, and BDT 3.25bn of borrowings at an 11.69% cost of fund

Deposits: deposits and other accounts were BDT 8,538.6m at Dec-2025 [1 p.386]. General term deposits were BDT 5,702.3m and scheme deposits BDT 574.0m; term deposits from other banks were BDT 2,077.5m and from NBFIs BDT 100.0m, together 25.5% of deposits [1 p.386] [12]. Bank depositors at Dec-2025 were Agrani Bank (BDT 900.0m), Janata Bank (BDT 550.0m), Modhumoti Bank (BDT 270.0m), South Bangla Agriculture and Commerce Bank (BDT 200.0m) and Sonali Bank (BDT 177.5m), each unchanged from Dec-2024 (the five named amounts sum to BDT 2,097.5m, BDT 20.0m more than the printed Dec-2025 total of BDT 2,077.5m; the filing does not reconcile the difference); Agrani, Janata and Sonali together held 19.1% of deposits [1 p.386] [12]. Deposits from Bay Leasing (BDT 90.2m) and Hajj Finance (BDT 47.5m) at Dec-2024 were nil at Dec-2025, and the company's own FDRs with the same two NBFIs were also nil [1 p.386] [1 p.379].

Directors and their related concerns held BDT 154.2m of deposits in 32 accounts at Dec-2025, 1.8% of total deposits [1 p.397] [12]. Deposits were BDT 8,616.4m in 2020, peaked at BDT 9,862.4m in 2022 and have fallen in each year since [2 p.145] [1 p.143]. By remaining maturity, BDT 2,817.7m of deposits fell due within one year and BDT 5,720.8m after one year [1 p.386] [12].

Borrowings: borrowings from banks, financial institutions and agents were BDT 3,250.4m at Dec-2025 against BDT 3,795.2m a year earlier [1 p.385]. They comprised Bangladesh Bank SME refinance of BDT 755.6m, JICA SME refinance of BDT 26.9m, term loans from banks of BDT 738.1m, short-term loans from banks of BDT 506.3m, short-term borrowing of BDT 1,073.0m and call loans of BDT 150.5m [1 p.385]. Term loans included BDT 235.8m from Mercantile Bank and BDT 125.1m from Southeast Bank that were not on the Dec-2024 list [1 p.385]. Interest paid on borrowings fell from BDT 391.8m to BDT 358.0m [1 p.391].

Ratios: CAR from 18.26% (2021) to -31.96% (2025), NPL from 2.54% to 13.75%, interest expense 3.97x interest income

The ratio history splits into two periods. In 2020-2022 net interest income was positive (BDT 493.4m, 511.0m and 378.5m), capital adequacy was between 16.57% and 18.26%, and the printed NPL ratio was between 2.54% and 5.56% [2 p.145]. From 2023 the provision charge rose to BDT 970.5m and then BDT 7,050.0m, capital adequacy fell to 10.68% and then to -33.81%, and equity per share went from BDT 10.16 to BDT -28.82 [1 p.143] [1 p.40]. Return on equity is not meaningful once equity is negative; return on average assets (derived) was 1.64% in 2021, -40.14% in 2024 and 0.79% in 2025 [12].

Capital: Tier-1 capital was BDT 2,631.9m in 2022, BDT 1,385.1m in 2023 and minus BDT 5,805.8m in 2025; with risk-weighted assets of BDT 16,779.8m, the capital deficit against the 10% requirement was BDT 7,041.3m [1 p.143] [1 p.330]. Paid-up capital has been BDT 1,882.4m since the 2021 bonus issue; no shares were issued in 2022-2025 [1 p.389]. Credit cost (provision charge over average loans, derived) was 50.65% in 2024 and -10.10% in 2025, when the charge was a net credit [12].

2026 results: H1 net interest income minus BDT 485m, loss before tax BDT 197m, profit after a BDT 221m tax benefit

The H1 2026 consolidated statements show the same pattern as 2025. Interest income was BDT 262.4m against BDT 566.8m in H1 2025, interest paid BDT 747.8m against BDT 775.7m, and net interest income minus BDT 485.4m against minus BDT 208.8m [3 p.1]. Income from investment rose to BDT 127.0m from BDT 5.5m and commission and brokerage to BDT 24.6m from BDT 11.5m [3 p.1]. Profit before provision was minus BDT 514.6m; net provision write-backs of BDT 317.5m left a loss before tax of BDT 197.1m, and a net tax benefit of BDT 221.1m (deferred tax benefit BDT 234.7m) produced profit after tax of BDT 23.9m [3 p.1]. Profit attributable to shareholders was BDT 42.9m (EPS BDT 0.23); the non-controlling interest's share was a loss of BDT 18.9m [3 p.1].

For the third quarter, the company announced on DSE on 29-Oct-2026 consolidated EPS of BDT 0.37 for July-September 2026 against BDT 0.45 a year earlier, BDT 0.60 for January-September 2026 against BDT 0.57, and a consolidated NAV per share of BDT -28.47 at 30-Sep-2026 against BDT -29.07 at Dec-2025 [6]. It gave as reasons 'higher realized capital gains from investments in securities and the reversal of excess provisions against loans, leases, and investments' [6]. The full Q3 2026 statements are not in our filings corpus (MISSING FILING), so the Q3 line items are not shown.

The H1 2026 balance sheet shows consolidated loans of BDT 13,536.0m (BDT 13,864.2m at Dec-2025), deposits of BDT 8,640.6m and borrowings of BDT 4,137.7m; consolidated shareholders' equity was minus BDT 5,428.6m [3 p.1].

Peers: classified loans 13.75% vs 68.21% (Phoenix) and 5.95% (United); cost of fund 11.69% vs 11.57% and 9.24%

We compare the company with two Bangladesh NBFIs whose 2025 annual reports print the same Bangladesh Bank highlights table: Phoenix Finance and Investments, another lender with negative equity, and United Finance, which has positive capital [4 p.144] [5 p.211]. Before the numbers, the audit opinions. Phoenix Finance's auditor, Mahamud Sabuj & Co., gave a qualified opinion ('except for the effects given in the Basis for Qualified Opinion'), on the classification of a jointly owned building, and added a section headed 'Material Uncertainty Related to Going Concern' that cites a net loss of BDT 3,392.6m, net assets of minus BDT 16,995.6m and a net liquidity gap of BDT 16,881.2m [4 p.95]. United Finance's auditor gave an unmodified opinion that the statements 'give a true and fair view' [5 p.326]. Bangladesh Finance's opinion is unmodified with an emphasis of matter on the going-concern basis, which differs from a material-uncertainty paragraph [1 p.344].

On the printed lines, Bangladesh Finance's classified-loan ratio of 13.75% sits between United Finance's 5.95% and Phoenix Finance's 68.21% [1 p.402] [5 p.211] [4 p.144]. Its cost of fund of 11.69% was 0.12pp above Phoenix (11.57%) and 2.45pp above United (9.24%) [12]. Its capital adequacy ratio of -31.96% compares with -108.81% at Phoenix and 18.45% at United [1 p.143] [4 p.140] [5 p.40]. Within these three, Bangladesh Finance and United Finance reported a profit after tax for 2025 (BDT 143.1m and BDT 198.0m) and Phoenix reported a loss of BDT 3,392.6m [1 p.402] [5 p.211] [4 p.144]. Phoenix Finance's profit and loss account also shows negative net interest income, minus BDT 1,908.6m in 2025 [4 p.107].

Cash and balance sheet: cash interest of BDT 891m, operating cash flow minus BDT 249m and a fully provided BDT 200m ILFSL deposit

Cash flow: the cash-flow statement shows interest received of BDT 890.6m in 2025 against BDT 1,955.0m in 2024, and interest paid of BDT 1,172.8m against BDT 1,134.6m [1 p.359]. Interest received in cash was 2.50 times the interest income booked in 2025; the filing does not split cash interest between current-year interest and collections of amounts previously held in suspense [12]. Cash used in operations before working-capital changes was BDT 542.4m; net loan repayments by customers of BDT 794.3m and a net repayment of short-term loans of BDT 578.7m were the largest working-capital items, and net cash from operating activities was minus BDT 248.5m (NOCFPS BDT -1.32) [1 p.359]. Cash and cash equivalents fell from BDT 1,629.1m to BDT 1,323.7m [1 p.359].

Placements and investments: balances with banks and NBFIs were BDT 1,187.6m, of which FDRs with banks BDT 637.5m (Rupali Bank BDT 500.0m, Jamuna Bank BDT 84.5m, Citizens Bank BDT 53.0m) and FDRs with NBFIs BDT 431.2m (IIDFC BDT 100.0m and ILFSL BDT 331.2m) [1 p.379]. The note on ILFSL says the company 'placed Term Deposits amounting to Tk. 200,000,000 with International Leasing & Financial Services Ltd. (ILFSL) during the years 2017 and 2018', suspended interest recognition from 2020, transferred BDT 131.2m to interest suspense and 'recognized a full provision against the outstanding investment of Tk. 200,000,000' [1 p.379]. Investments in securities were BDT 297.0m: quoted shares BDT 147.0m (insurance shares at cost BDT 128.6m against a market value of BDT 141.0m), unquoted shares BDT 10.0m and preference shares of the two subsidiaries BDT 140.0m [1 p.379].

Other assets and fixed assets: other assets of BDT 1,768.6m included BDT 849.9m invested in the subsidiaries and BDT 898.7m of receivables, advances and deposits; provision for other assets rose from BDT 259.8m to BDT 590.7m in 2025 and includes BDT 176.5m against equity investments in subsidiaries [1 p.383] [1 p.387] [1 p.382]. Fixed assets of BDT 679.6m include a 50% stake in a building at 64 Motijheel, revalued to BDT 629.4m in 2023 against an acquisition cost of BDT 52.9m; the revaluation surplus in equity was BDT 483.0m [1 p.383]. The balance sheet shows no contingent liabilities or off-balance-sheet commitments [1 p.356].

Governance and capital actions: Z category since April 2025, no dividend for three years, sponsors at 18.89%

Ownership: sponsors and directors held 35.55m shares (18.89%) at Dec-2025 against 57.43m (30.51%) at Dec-2024; institutions held 26.01% and the general public 55.10% across 8,756 shareholders [1 p.303]. The largest holding is Anwar Ispat Ltd with 14.22m shares (7.56%), followed by Mr. Imtiyaj Yousuf (4.35%), Mehmud Industries (Pvt.) Ltd. (3.79%) and Anwar Silk Mills Ltd. (2.02%), each a director or represented by a nominated director [1 p.305]. The filing pages read do not explain the fall in the sponsor/director holding; the capital note's Sponsor Shareholders Group line (BDT 355.6m, 35.56m shares) matches the 18.89% on p.303, but within its General Shareholders Group sub-split an 'Investors Account' line of BDT 574.3m equals the Dec-2024 sponsor amount and the sub-lines do not add to the BDT 1,526.8m group total [1 p.389] [1 p.303].

Board and management: the managing director and CEO is Md. Kyser Hamid; the 2025 statements were signed by directors Md. Rokonuzzaman, FCA, Md. Asaduzzaman Khan and Iqbal Uddin Ahmed [1 p.356]. The board appointed Kazi Rafiqul Hassan as an independent director on 17-Apr-2025 and reappointed Mahfuza Khanam on 17-Jul-2025; the board met seven times in 2025 [1 p.136]. The Q2 2026 statements were signed by an acting chairman [3 p.1].

DSE news over the 24 months to 1-Nov-2026 records the following capital-market actions [6]. On 20-Apr-2025 DSE announced the move to the Z category from the A category with effect from 21-Apr-2025 'as the company has failed to declare any dividend for a period of 2 (two) consecutive years', and the same day asked brokers and merchant bankers 'to abstain from providing loan facilities to purchase securities' of the company. The head office moved to Bangladesh Finance Tower, 64 Motijheel, from 26-Jan-2025. DSE approved the name change to Bangladesh Finance PLC from 15-Jun-2025. The company answered DSE price queries on 7-Aug-2025 and 14-Sep-2025 saying there was no undisclosed price-sensitive information. Alpha Credit Rating kept the AA / ST-2 rating with a stable outlook in postings on 14-Aug-2025 and 29-Jun-2026. The auditor's emphasis of matter on the 2024 and 2025 accounts was disseminated on 17-May-2025 and 24-May-2026. The 24-month archive contains no board approval of capital expenditure, expansion, a rights issue or a merger.

For FY2025 the board said it did not recommend a dividend 'in view of the net loss and negative equity on a consolidated basis' [1 p.136]. Note 44 adds that the company returned to profitability in 2025 'primarily driven by successful recovery initiatives and the rescheduling of loan and lease accounts under the policy support of Bangladesh Bank, resulting in the reversal of provisions' [1 p.397].

Regulation: DFIM provisioning rules, a 10% capital minimum and the 2025 NBFI wind-up that includes ILFSL

The NBFI wind-up: The Business Standard reported on 1-Dec-2025 that the Bangladesh Bank board had cleared the way to liquidate nine NBFIs, International Leasing among them, and on 15-Jan-2026 that individual depositors of the nine would get their principal while institutions would be paid from asset recoveries [7] [8]. Both reports are from the same outlet. Bangladesh Finance is not among the nine named [7]. Its exposure to it is the BDT 200.0m ILFSL deposit, which is fully provided [1 p.379].

Rules that set the company's numbers: provisioning follows DFIM Circular No. 04 of 26-Jul-2021 [1 p.345]; the cash reserve ratio is 1.5% and the statutory liquidity requirement 5% (including CRR) of average demand and time liabilities [1 p.378]; and minimum capital adequacy is 10% of risk-weighted assets [1 p.330]. Note 6.7 shows a special general provision for unclassified loans 'availing deferral benefits' under DFIM circular letter no. 33 of 19-Dec-2021, on BDT 4,121.2m of loans at 2% [1 p.381].

LDC graduation: the UN General Assembly adopted the move of Bangladesh's LDC graduation from 24-Nov-2026 to 24-Nov-2029 on 29-Oct-2026 in New York (30-Oct in Dhaka) [9] [10]. The filings read do not link any of the company's lines to graduation.

What's next: FY2026 results in late April 2027 (inferred), Q1 2027 in mid-May (inferred), LDC graduation 24-Nov-2029

Q3 2026 results were announced on 29-Oct-2026 and are covered above. No board-meeting date for the next results has been notified on DSE [6]. The dates below are inferred from the two most recent precedents, using board-meeting dates, not DSE post dates.

Signposts in the FY2026 accounts, with the Dec-2025 levels: the classified-loan ratio (13.75%) and special-mention loans (BDT 853.9m); the provision requirement for stressed loans (BDT 4,714.6m) and the surplus (BDT 788.7m); interest suspense on loans (BDT 2,344.8m); equity (minus BDT 5,322.7m) and capital adequacy (-31.96%); and the balance of BDT 2,077.5m of bank deposits [1 p.381] [1 p.382] [1 p.355] [1 p.143] [1 p.386]. Note 2.4 of that report is the place where any figures for the capital management plan would appear [1 p.363].

Risks: negative net interest income, stressed-loan migration, one-off write-backs and bank-deposit concentration

Each risk is tied to the line it moves. For scale, 2025 loss before provision was BDT 1,344.8m, total provisions maintained BDT 7,288.8m and solo equity minus BDT 5,322.7m [1 p.357] [1 p.382] [1 p.355].

Key questions: net interest income, interest suspense, stressed loans, the capital plan and bank deposits

FAQ

Is Bangladesh Finance's equity negative?

Yes. Solo shareholders' equity was minus BDT 5,322.7m at 31-Dec-2025 and minus BDT 5,425.5m at Dec-2024; consolidated NAV per share was BDT -28.47 at 30-Sep-2026 [1 p.355] [6].

What did the auditor say about the 2025 accounts?

Snehasish Mahmud & Co. gave an unmodified opinion with an emphasis of matter drawing attention to note 2.4, under which the statements were prepared on a going-concern basis 'despite the group having negative equity of BDT 5,471.48 million except non-controlling interest' [1 p.344].

What is Bangladesh Finance's NPL ratio?

Classified loans were 13.75% of loans at Dec-2025 (BDT 1,819.6m of BDT 13,230.0m), up from 9.26% at Dec-2024 [1 p.381] [1 p.402].

Why was BDFINANCE profitable in 2025?

The company attributes the 2025 profit to recovery and rescheduling under Bangladesh Bank policy support, which led to provision reversals; the P&L shows a BDT 1,775.0m reversal of general provisions while net interest income was minus BDT 1,058.5m [1 p.397] [1 p.357].

Does Bangladesh Finance pay a dividend?

No dividend was declared for 2023, 2024 or 2025; DSE moved the shares to the Z category from 21-Apr-2025 for failing to declare a dividend for two consecutive years [6] [1 p.40].

Does Bangladesh Finance have money in failed NBFIs?

It has BDT 200.0m of term deposits with International Leasing and Financial Services, one of the nine NBFIs selected for liquidation; the deposit is fully provided and BDT 131.2m of interest is held in suspense [1 p.379] [7].

Which results does this report use?

Audited 2025 statements with 2024 comparatives, the five-year tables in the 2024 and 2025 reports (2020-2025), the unaudited H1 2026 consolidated statements, and the Q1 and Q3 2026 figures announced on DSE. The model will be updated when the next statements are filed.

Sources

1. Bangladesh Finance PLC Annual Report 2025 (audited consolidated and separate statements, year to 31-Dec-2025) · link · accessed 2026-11-01
2. Bangladesh Finance Limited Annual Report 2024 (five-year table 2020-2024, auditor's report on 2024) · link · accessed 2026-11-01
3. Bangladesh Finance PLC Q2 consolidated financial statements 2026 (unaudited, half year to 30-Jun-2026) · link · accessed 2026-11-01
4. Phoenix Finance and Investments Limited Annual Report 2025 (peer) · link · accessed 2026-11-01
5. United Finance PLC Annual Report 2025 (peer) · link · accessed 2026-11-01
6. DSE news archive for BDFINANCE, 31-Oct-2024 to 1-Nov-2026 (results, dividends, category change, rating, name change, board meetings) · link · accessed 2026-11-01
7. The Business Standard, 'BB board clears path for NBFI liquidation, process begins in 2 weeks' (1-Dec-2025) · link · accessed 2026-11-01
8. The Business Standard, 'Individual depositors of 9 NBFIs to get full principal, no interest, after liquidation' (15-Jan-2026) · link · accessed 2026-11-01
9. The Daily Star, 'Bangladesh gets 3 more years for LDC graduation' (30-Oct-2026) · link · accessed 2026-11-01
10. The Business Standard, 'Bangladesh gets 3 more years before LDC graduation' (30-Oct-2026) · link · accessed 2026-11-01
11. AnalystBro price data (TradingView feed): DSE:BDFINANCE daily, weekly and monthly bars to 1-Nov-2026 · link · accessed 2026-11-01
12. AnalystBro model for this report (workbook tabs below) · link · accessed 2026-11-01