ICB financial analysis: BDT 32.8bn unprovided portfolio loss, two loss years, state funding (Oct 2026)

Investment considerations: state money is propping up a balance sheet whose portfolio hole exceeds its equity

Investment Corporation of Bangladesh (ICB) is a state-owned investment bank set up by ordinance in 1976 and now governed by the ICB Act 2014 [1 p.14]. It holds one of the largest share portfolios on the Dhaka Stock Exchange, BDT 149.8bn at cost at June 2025, which is 75% of its total assets [1 p.1] [12]. It funds that portfolio mostly with term deposits from banks, NBFIs and other institutions, a subordinated bond held by four state banks, and since 2024 with Bangladesh Bank and government money [1 p.36] [1 p.37]. It also lends on margin to investors, manages unit funds and mutual funds through ICB Asset Management, does merchant banking through ICB Capital Management and broking through ICB Securities Trading [1 p.14].

The business works only when the market rises. ICB pays more interest than it earns on every taka of loans and deposits, so net interest income has been negative in all eight years we cover, from BDT -4.7bn in FY2018 to BDT -8.0bn in FY2025 [12]. Dividends and capital gains on the portfolio have to cover that gap and the costs. They did until FY2024. In FY2025 capital gains fell to BDT 2.1bn and provisions rose to BDT 8.0bn, and the corporation lost BDT 12.1bn, its first loss [1 p.3]. It lost another BDT 5.9bn in the nine months to March 2026 [2 p.3], and the board announced a full-year FY2026 loss of BDT 6.5bn (EPS BDT -7.52) and no dividend for the second year, which moved the shares to the Z category on 29 October 2026 [7] [10].

Business: a leveraged state share portfolio with a market-support mandate

Mandate. ICB was created to develop the capital market by mobilising savings and widening the investor base [1 p.14]. Its own activities are margin lending to 'operative investors', advances against unit and mutual fund certificates, lease finance, management of the ICB Unit Fund and investor accounts, bank guarantees, and buying debentures and bonds [1 p.14]. Under the 2000 restructuring with the Asian Development Bank's Capital Market Development Program, merchant banking, fund management and broking moved into three subsidiaries [1 p.14].

Market-support role. ICB is the state's buyer of last resort on the DSE. ICB officials told The Business Standard that it repeatedly borrowed from state-owned banks to buy shares and steady the market at the direction of the government and regulators, and that this contributed to its debt trap [9]. The numbers show it: portfolio cost rose from BDT 115.2bn in FY2018 to BDT 145.6bn in FY2020 and has not fallen since, while capital gains, which require selling, fell from BDT 8.9bn (FY2021) to BDT 2.1bn (FY2025) [12]. In FY2025 ICB bought BDT 35.7bn of securities and sold BDT 27.7bn [1 p.6]; the BDT 30bn BB fund received after August 2024 was used partly (BDT 10bn) to invest in the market [8].

How the story changed. In FY2018 a rising market gave ICB BDT 8.0bn of capital gains and a BDT 4.2bn profit [6 p.210]. Since then three things went wrong at once. First, the market fell: the portfolio's unrealised loss went from BDT 13.4bn (9.6% of cost) in June 2022 to BDT 44.2bn (31.3%) in June 2024 [4 p.32] [1 p.31]. Second, ICB had placed fixed deposits with NBFIs that failed; Bangladesh Bank estimates the provision needed on FDRs with 10 NBFIs and Padma Bank at BDT 9.28bn, which ICB now holds in full [1 p.38]. Third, its own loans soured: bad/loss loans rose from BDT 6.9bn to BDT 18.6bn in FY2025 [1 p.33].

Line items: BDT 9.4bn of interest against BDT 1.4bn earned; capital gains fell to BDT 2.1bn

Interest income. Interest income fell every year, from BDT 3.59bn in FY2018 to BDT 1.37bn in FY2025 [12]. Lease and debenture books ran off, bond interest fell from BDT 569m to BDT 398m in FY2025, and interest on bank deposits fell from BDT 788m to BDT 337m as FDRs in failed NBFIs stopped paying: ICB now holds BDT 1.82bn of interest suspense on FDRs [1 p.43] [1 p.37]. Margin-loan interest booked was only BDT 221m on BDT 11.0bn of margin loans, because interest on classified accounts goes to suspense (BDT 1.54bn added in FY2025) [1 p.43] [1 p.39].

Interest expense. ICB paid BDT 9.42bn in FY2025: BDT 7.58bn on term deposits, BDT 943m on the subordinated bond, BDT 786m on short-term loans (mainly the new BB demand loan) and BDT 100m on the government PKKB loan [1 p.43]. The cost of funds was 8.1% of average funding in FY2025, against 6.6% in FY2022 [12]. History-based sensitivity: on FY2025's BDT 120bn of average-to-closing funding, each 1pp of funding cost moved interest expense by about BDT 1.2bn, which is more than the year's fee income [12]. In 9M FY2026 interest paid still rose 31% to BDT 9.15bn as deposits repriced and accrued interest on the BB and government loans came through [2 p.3].

Dividends. Dividend income has been BDT 3.6-4.3bn a year, a yield of about 2.5% on average portfolio cost in FY2025 against 3.0% in FY2021 [12]. The largest sector exposures at cost are pharmaceuticals (BDT 25.0bn), fuel and power (BDT 21.4bn), engineering (BDT 18.1bn) and banks (BDT 14.7bn) [1 p.30]. Dividends fell 20% in 9M FY2026 to BDT 2.36bn [2 p.3], as bank and NBFI holdings paid less.

Capital gains. This is the swing line: BDT 8.0bn in FY2018, BDT 8.9bn in FY2021, then BDT 2.1bn in FY2025 and BDT 672m in 9M FY2026 [12] [2 p.3]. ICB books gains only on what it sells, at cost, so in a falling market it can only realise gains on the few holdings still above cost. As a share of average portfolio cost, gains fell from 6.2% (FY2021) to 1.4% (FY2025) [12].

Fees. Fees of BDT 1.49bn in FY2025 came mainly from fund management (BDT 906m, ICB Asset Management), brokerage (BDT 302m, ICB Securities), custodian fees (BDT 97m) and trustee fees (BDT 133m) [1 p.43]. They peaked at BDT 2.27bn in FY2022 with market turnover [12].

Costs, provisions and tax. Operating expenses are stable at BDT 1.5-2.0bn; salaries are 62% [1 p.3]. Provisions are the line that turned a weak year into a large loss: BDT 5.86bn against other assets (FDR exposures), BDT 1.96bn against loans (margin loans and bond purchases), and BDT 110m for a disputed VAT claim on fees [1 p.45] [1 p.38]. Tax is charged even in loss years because Bangladesh's minimum taxes apply to dividends, capital gains and turnover: FY2025 current tax was BDT 1.10bn and deferred tax another BDT 608m as the tax-loss asset was written down [1 p.3] [1 p.36]; 9M FY2026 tax was BDT 589m on a pre-tax loss [2 p.3] [2 p.25].

Portfolio: 31% below cost, and the BDT 32.8bn unprovided loss is larger than equity

ICB carries shares at cost, not market, with Bangladesh Bank's 'no objection' [4 p.16]. It is meant to provide for any fall below cost, but the securities regulator has repeatedly extended the deadline; the latest letter cited in the FY2025 accounts extends it to 31 December 2025 or the corresponding financial year [1 p.31].

The size of the gap. At June 2025 the consolidated portfolio cost BDT 149.8bn and had a market value of BDT 103.2bn, an unrealised loss of BDT 46.6bn (31.1% of cost). Against that ICB held a reserve for diminution of BDT 7.9bn and an investment provision of BDT 5.9bn, leaving BDT 32.8bn unprovided [1 p.31]. Consolidated equity was BDT 32.5bn [1 p.1], so equity after the shortfall was BDT -0.4bn (BDT -0.42 a share) [12]. Two years earlier the shortfall was BDT 5.7bn, and in June 2022 the provision was fully covered [3 p.37] [4 p.32].

Where the loss sits. In the solo listed book, ordinary shares cost BDT 124.6bn and had a market value of BDT 74.8bn at June 2025, a 40% loss [1 p.30]. The deepest sector losses at cost were NBFIs (BDT 5.08bn cost, BDT 1.82bn market), engineering (BDT 18.1bn, BDT 8.7bn), fuel and power (BDT 21.4bn, BDT 12.9bn), and cement (BDT 9.5bn, BDT 5.2bn) [1 p.30]. ICB's BDT 850m capital in Padma Bank is valued at nil [1 p.30]. Unit funds and mutual funds cost BDT 8.4bn and had a market value of BDT 6.5bn [1 p.30].

After June 2025. The solo shortfall rose from BDT 34.6bn to BDT 40.6bn by March 2026 as the solo portfolio's market value fell to BDT 94.3bn against a cost of BDT 145.4bn [2 p.13]. ICB put the unrealised loss at about BDT 55bn and the portfolio's value at about BDT 86bn in December 2025 [9]. ICB's FY2026 accounts (not yet in our corpus) are the first under a new portfolio valuation policy reported by the press; the reported NAV of BDT 30.26 suggests the loss was not taken through equity in full [7].

Margin loans and other credit: classified loans 72% of the book, provisions on the security-shortfall basis

Margin loans. Consolidated margin loans were BDT 11.0bn at June 2025, BDT 2.5bn at ICB itself and the rest at ICB Capital Management and ICB Securities [1 p.31]. The book grew in FY2025 although only BDT 5.4bn was recovered against BDT 4.7bn disbursed, because BDT 2.1bn of interest was accrued and BDT 2.0bn of it written off against a 'rebate facility' [1 p.31]. Margin-loan provision was BDT 3.14bn, 28.5% of the book [1 p.38] [12]. ICB provides on margin loans under its own 'Margin Loan Provision Policy-2005', approved by Bangladesh Bank [1 p.18].

Other loans. Bond purchases (BDT 9.4bn) and debenture purchases (BDT 1.5bn) are booked as loans; the bond-purchase provision rose from BDT 291m to BDT 1.97bn in FY2025 [1 p.32] [1 p.38]. Staff loans, mostly house-building, are BDT 4.1bn [1 p.33]. Classified loans rose to BDT 19.4bn (71.6% of loans) from BDT 7.9bn (31.7%); provision held covers 29.1% of them, or 55.8% with interest suspense [12]. The accounts state that the required loan provision of BDT 3.31bn (solo) is fully met, under BD rules that set provision on the shortfall of security value [1 p.38]. Recovery of classified loans was 15.5% in FY2025 [1 p.34].

Funding: a BDT 30bn BB loan and BDT 17.9bn of government money replaced fleeing deposits

Funding mix. Until 2024 ICB funded itself with term deposits, BDT 88.9bn at June 2024, 60% from banks and NBFIs [1 p.37]. In FY2025 BDT 29.5bn of deposits were encashed and BDT 12.5bn added [1 p.37], and the gap was filled by a BDT 30bn Bangladesh Bank demand loan [1 p.36]. At June 2025 BDT 36.6bn of deposits were 'payable on demand' and liabilities due within three months exceeded assets due in that time by BDT 60.3bn [1 p.37] [1 p.13].

Government support. The BB fund was lent under an 18-month government guarantee granted in 2024 that expired on 15 May 2026; the facility has matured unpaid and ICB has asked the finance ministry to extend the guarantee to 12 March 2029 [8]. Separately the government lent BDT 10bn at 4% [8]; the government loan line rose from BDT 8.1bn to BDT 17.9bn in 9M FY2026 [2 p.1]. The subordinated bond of BDT 10.2bn is held by Agrani (BDT 5.0bn), Janata, Sonali and Rupali [1 p.37], and state banks and Sadharan Bima are both ICB directors and depositors [2 p.24]. ICB's recovery plan seeks BDT 100bn more of low-cost funding (BDT 70bn to repay dear loans, BDT 30bn for the market) and a conversion of state-bank debt into equity or preference shares [9].

Subsidiaries: BDT 550m of profit and BDT 10.9bn of net assets, a third of group equity

ICB owns almost all of three subsidiaries [1 p.42]. ICB Asset Management PLC manages mutual funds and earned BDT 486m in FY2025 on net assets of BDT 5.24bn. ICB Capital Management, the merchant bank, earned BDT 60m on BDT 4.63bn. ICB Securities Trading, the broker, earned BDT 4m on BDT 1.06bn after a BDT 39m loss in FY2024 [1 p.42].

Materiality. Their combined profit of BDT 550m compares with a group loss of BDT 12.1bn, so they do not change the group result. Their net assets of BDT 10.9bn are 34% of consolidated equity [12], and ICB carries them at BDT 2.56bn cost in its solo accounts [1 p.30], so they are a hidden reserve at solo level. ICB also lends to them (BDT 1.71bn at June 2025) and guarantees ICB Securities' BDT 500m DSE obligation [1 p.33] [1 p.42]. ICB Capital and ICB Securities carry most of the BDT 8.5bn of margin loans outside the parent [1 p.31].

Ratios: income covered interest only 0.90x in FY2025, ROE -31%

Returns. ROE was between 0.7% and 3.2% in FY2019-24, well below the cost of the deposits that fund it, and -31.3% in FY2025 [12]. ROA was under 1% in every profitable year [12]. These are the returns of a balance sheet whose income depends on selling shares, not on lending spreads.

Coverage. Total income from interest, dividends, gains and fees covered interest paid 2.0x in FY2018 and 2.0x in FY2022, but only 1.2x in FY2024 and 0.90x in FY2025 [12]. Market income (dividends plus gains) has been 62-75% of gross income in every year [12].

Leverage. Equity was 22-24% of assets in FY2020-24 and 16.3% in FY2025 [12]. On the market value of the portfolio, adjusted equity was about nil at June 2025 [12]. NAV per share was BDT 51.95 (June 2024), BDT 37.45 (June 2025), BDT 30.68 (March 2026) and BDT 30.26 (June 2026, announced) [1 p.46] [2 p.2] [7].

Cash. Operating cash flow of BDT 8.9bn in FY2025 includes BDT 26.8bn of new long-term debt and BDT -16.9bn of deposit outflows, which ICB classifies as operating; before those changes, operating cash flow was BDT -1.77bn [1 p.6]. In 9M FY2026 it was BDT -6.47bn before changes in operating assets and liabilities, mainly because interest paid in cash was BDT 10.6bn [2 p.5].

Peers. ICB has no listed peer with the same mandate: Bangladesh's other listed financials are banks and NBFIs that earn a lending spread, and no other listed company runs a state market-support portfolio. We therefore compare ICB only with its own history; any NBFI comparison on ROE or NPL would not be like for like.

Latest results: 9M FY2026 loss doubled to BDT 5.9bn on interest costs; full-year loss BDT 6.5bn announced

Nine months to March 2026. The loss doubled to BDT 5.89bn (EPS BDT -6.79) from BDT 2.79bn [2 p.3]. Provisions fell from BDT 1.26bn to BDT 135m, but net interest income worsened from BDT -5.73bn to BDT -8.07bn, capital gains fell from BDT 2.02bn to BDT 672m and dividends from BDT 2.95bn to BDT 2.36bn [2 p.3]. The third quarter alone lost BDT 2.77bn [2 p.3]. The board then announced a full-year loss of BDT 6.53bn, so the June 2026 quarter lost about BDT 0.64bn on that announcement [7] [12].

Governance and payout: state-bank board, no dividend for two years, Z category

Ownership and board. ICB is state-owned [7]; its directors include representatives of Sonali Bank, Agrani Bank, Janata Bank, Bangladesh Development Bank and Sadharan Bima Corporation, which are also its depositors and lenders [2 p.24]. The chairman in FY2025-26 is Prof. Abu Ahmed and the managing director Niranjan Chandra Debnath [2 p.3]. The FY2025 accounts were audited jointly by Anil Salam Idris & Co. and Basu Banerjee Nath & Co. [1 p.2]; the audit report itself is not in the statements we hold, so we cannot quote the opinion or any emphasis of matter (gap).

Payout. ICB paid cash dividends of 11% (FY2021), 5% plus 5% stock (FY2022), 2.5% plus 2.5% stock (FY2023) and 2% (FY2024), and nothing for FY2025 or FY2026 [3 p.5] [1 p.5] [7]. The payout ratio on reported EPS was 27-77% while profits lasted [12]. With accumulated losses of BDT 16.1bn at March 2026 [2 p.1], ICB cannot pay a dividend out of retained earnings until those losses are recovered, and the Z-category rule will keep the shares there until it does [7].

What's next: the FY2026 accounts, the BB guarantee and a possible debt-to-equity swap

Risks: the market, the end of forbearance and the cost of state money

The risks below are tied to the line each one moves. The common thread is that ICB's income and equity both move with the share market, while its interest bill does not.

Key questions: the FY2026 accounts and the state's next step decide what equity holders own

ICB at BDT 32.9 has a market value of BDT 28.5bn and trades at 1.09x the announced June 2026 NAV of BDT 30.26 [11] [7]. At June 2025 the corresponding NAV was BDT 37.45 and the NAV after the unprovided portfolio loss was BDT -0.42 [12]. These are facts about the price and the book, not a view on either.

FAQ

Why did ICB make a loss?

Interest paid (BDT 9.4bn) far exceeds interest earned (BDT 1.4bn), capital gains fell to BDT 2.1bn, and BDT 8.0bn of provisions were charged in FY2025, mostly on FDRs in failed NBFIs and on loans [1 p.3] [1 p.45].

How big is ICB's unrealised portfolio loss?

BDT 46.6bn at June 2025 (cost BDT 149.8bn, market BDT 103.2bn), of which BDT 32.8bn was not provided [1 p.31].

Did ICB pay a dividend for FY2025 or FY2026?

No. The shares moved to the Z category on 29-Oct-2026 [7].

What support has the government given?

A BDT 30bn Bangladesh Bank loan under government guarantee and BDT 10bn of government money; the government loan line was BDT 17.9bn at March 2026 [8] [2 p.1].

What are ICB's subsidiaries?

ICB Asset Management, ICB Capital Management and ICB Securities Trading; together they earned BDT 550m in FY2025 [1 p.42].

Which results does this report use?

Audited accounts FY2019-FY2025 (with FY2018 comparatives) and the unaudited 9M FY2026 statements. FY2026 full-year figures are as announced; the FY2026 statements are not yet in our corpus.

Sources

1. ICB consolidated and separate financial statements, year to 30-Jun-2025 (audited) · link · accessed 2026-10-31
2. ICB unaudited financial statements, nine months to 31-Mar-2026 (Q3 FY2026) · link · accessed 2026-10-31
3. ICB consolidated financial statements, year to 30-Jun-2023 · link · accessed 2026-10-31
4. ICB consolidated financial statements, year to 30-Jun-2022 · link · accessed 2026-10-31
5. ICB consolidated financial statements, year to 30-Jun-2021 · link · accessed 2026-10-31
6. ICB Annual Report 2018-19 (year to 30-Jun-2019) · link · accessed 2026-10-31
7. The Business Standard, 'ICB downgraded to Z category after failing to declare dividends for two consecutive years' (29-Oct-2026) · link · accessed 2026-10-31
8. The Business Standard, 'ICB fails to repay Tk3,000cr BB fund, seeks 3-year guarantee extension' (4-Jul-2026) · link · accessed 2026-10-31
9. The Business Standard, 'ICB at 50: State investment bank charts recovery plan to tackle crisis' (30-Sep-2026) · link · accessed 2026-10-31
10. DSE announcements via AnalystBro events feed (FY2026 board meeting 28-Oct-2026, no dividend, record date 18-Nov-2026, AGM 5-Dec-2026) · link · accessed 2026-10-31
11. AnalystBro price data (TradingView feed): DSE:ICB daily bars to 29-Oct-2026 · link · accessed 2026-10-31
12. AnalystBro model for this report (workbook tabs below) · link · accessed 2026-10-31