Islamic Finance and Investment financial analysis: 46% classified investments, deferred provisions and going-concern uncertainty (Oct 2026)

Investment considerations: 46.29% classified investments, BDT 620.7m of deferred provision and total capital of BDT 168.9m with BDT 1,000.0m required

Islamic Finance and Investment PLC (DSE: ISLAMICFIN), named Islamic Finance & Investment Limited until 28-Nov-2024, is a finance company incorporated on 27-Feb-2001 that started business on 19-Apr-2001 and listed on the Dhaka Stock Exchange on 07-Dec-2005 [1 p.17] [21]. Its own profile describes it as 'the first Islamic Shariah-based Non-Bank Financial Institution in the country' [1 p.35]. It finances clients through lease, HPSM and Bai Muajjal products, funds itself mainly through Mudaraba Term Deposits, and reports on a company basis with no parent, subsidiary or associated company listed in its pattern of shareholding [1 p.23] [1 p.123] [1 p.86]. At 31-Dec-2025 it reported General Investment of BDT 8,653.9m, Deposits and Other Accounts of BDT 6,854.6m, borrowings of BDT 162.5m and Total Shareholders' Equity of BDT 334.2m [1 p.123].

Our NBFI sector format sends a finance company with a capital deficit, a deferred provision shortfall and an auditor's going-concern paragraph to its stressed variant, so this note opens with the regulatory capital position and the audit report. The filings set out four facts. First, asset quality: classified general investments rose from BDT 495.1m (4.00%) at Dec-2021 to BDT 5,577.2m at Dec-2024 and were BDT 4,006.1m at Dec-2025 [4 p.151] [2 p.143] [1 p.157]. Second, provisions: the company carries part of its required provision under a Bangladesh Bank deferral letter dated 25-Jun-2024 [1 p.157] [1 p.158]. Third, capital: Tier-I capital was BDT 84.4m and total capital BDT 168.9m, with required capital of BDT 1,000.0m and a printed deficiency of BDT 831.1m [1 p.166]. Fourth, earnings: net investment income was minus BDT 79.9m in 2025, and profit before tax of BDT 77.5m followed a total provision line of minus BDT 341.4m [1 p.125].

Business model: Shariah-based lease, HPSM and Bai Muajjal finance; disbursement of BDT 395m in 2025 and BDT 2,256m in 2021

The company runs Shariah-based financing through three products in its disbursement table: Lease, HPSM and Bai Muajjal [1 p.23]. Disbursements totalled BDT 2,256m in 2021, BDT 1,641m in 2022, BDT 365m in 2023, BDT 199m in 2024 and BDT 395m in 2025; lease disbursement was BDT 0 in 2024 and 2025 [1 p.23]. Sanctions were BDT 2,573m in 2021, BDT 272m in 2024 and BDT 380m in 2025 [1 p.22]. Outstanding investment fell in each year of the 2021-2025 series, from BDT 12,368m to BDT 8,654m [1 p.22].

The branch network listed in the milestones comprises the Principal Branch and branches in Chittagong, Bogra, Narayanganj, Uttara, Nayabazar, Gazipur and Chowmuhani [1 p.17]. Investments due by directors or executives were BDT 44.4m and investments due by companies in which directors are interested BDT 110.1m at Dec-2025 [1 p.158]. The related-party statement lists eight facilities with a total outstanding of BDT 110,848,291, including BDT 59,332,098 to Eastern Ashulia Limited (director named: Liaquat Hossain Moghul, status SMA) and BDT 36,895,490 in two facilities to Swisstex Packaging & Accessories Ltd (director named: Shibbir Mahmud, status STD) [1 p.178].

Capital and going concern: Tier-I BDT 84.4m, CAR 1.75%, deficiency BDT 831.1m and an auditor's material uncertainty

Note 13.04 sets the regulatory test: under the Finance Company Act, 2023 and DFIM Circular No. 5, minimum paid-up capital is BDT 100 crore, and 'the sum of paid up capital and reserves shall not be less than the minimum capital required under the Risk - Based Assets of the company' [1 p.166]. At Dec-2025 Tier-I capital was BDT 84,432,569: paid-up capital of BDT 1,403.3m, share premium of BDT 0.7m, statutory reserve of BDT 512.5m and other reserve of BDT 68.0m, less retained earnings of minus BDT 1,900.1m [1 p.166]. Tier-II eligible capital was capped at the Tier-I amount, BDT 84,432,569, after an applicable deduction of BDT 153.7m; the note states that general provision of Tk. 11.32 crore and asset revaluation reserve of Tk. 12.49 crore would otherwise total Tk. 23.81 crore [1 p.166] [1 p.167]. Total capital was BDT 168.9m, required capital BDT 1,000.0m and the deficiency BDT 831.1m; the capital adequacy ratio in note 13.05 was 1.75% (0.51% at Dec-2024) on risk-weighted assets of BDT 9,624.8m [1 p.166] [1 p.167].

The company writes that, under the deferral, the provision 'has not been deducted from Tier-1 (Core Capital)' [1 p.167]. Total Shareholders' Equity of BDT 334.2m at Dec-2025 includes the Assets Revaluation Reserve of BDT 249.8m [1 p.123] [1 p.118]. The DSE-announced NAV per share moved from BDT 2.38 at Dec-2025 to BDT 1.46 at Mar-2026 and BDT 2.33 at Jun-2026, and was BDT (0.22) at Sep-2026 [21]. On going concern, the company's note says 'has adequate resources to continue its operation for foreseeable future' and that 'the directors continue to adopt going concern basis' [1 p.136]. The MD and CFO declaration dated 23-Jun-2026 states that 'there exists no material uncertainty related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern' [1 p.72]; the auditor's report dated 25-Jun-2026 includes a material uncertainty related to going concern [1 p.118] [1 p.122]. The company is not among the nine NBFIs named for initial liquidation in The Business Standard report of 1-Dec-2025 [22].

Audit report: unmodified opinion with two emphasis-of-matter paragraphs, a going-concern material uncertainty and three key audit matters

Zoha Zaman Kabir Rashid & Co. (Md. Iqbal Hossain FCA, Senior Partner) signed the 2025 report on 25-Jun-2026 [1 p.122]. The opinion paragraph reads: "In our opinion, the accompanying financial statements give a true and fair view of financial position of Islamic Finance and Investment PLC as at 31 December 2025 and of its financial performance for the year then ended in accordance with International Accounting Standards (IAS), International Financial Reporting Standards (IFRSs) and comply with the Finance Company Act, 2023, the Rules and Regulations issued by Bangladesh Bank, the Companies Act,1994 and other applicable Laws and Regulations." [1 p.117]

Basis for Opinion: "We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of Islamic Finance and Investment PLC (the 'Company') in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code and The Institute of Chartered Accountants of Bangladesh (ICAB) Bye Laws. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion." [1 p.117]

Emphasis of Matters, first paragraph: "We draw attention to Note 12.02 to the financial statements regarding the Company's provision shortfall against General Investments (Loans, Leases and Advances). As per the Quick Summary Report issued by Bangladesh Bank on 21 May 2026 and Bangladesh Bank letter reference no. DFIM(C) 1054/13/2024-2050 dated 25 June 2024, the Company was granted a regulatory deferral facility in respect of a provision shortfall amounting to BDT 155.18 crore. Under this facility, the deferred provision is required to be recognized in equal installments of BDT 31.04 crore per annum over the period from 2023 to 2027. As at 31 December 2025, the Company's outstanding General Investments (Loans, Leases and Advances) amounted to BDT 8,653,935,917, against which the required provision was BDT 2,531,402,473. The Company maintained a provision of BDT 1,910,661,278, resulting in a provision shortfall of BDT 620,741,195. The Company has availed itself of the aforesaid regulatory deferral facility, and the remaining shortfall is expected to be adjusted over the balance of the deferral period up to 2027 in accordance with the approval granted by Bangladesh Bank. During the year, consequent upon the adjustment of the deferred provision facility, the Company recognized a write back of provision amounting to BDT 343,935,550 in the Statement of Profit or Loss. As a result, the total provision maintained against General Investments (Loans, Leases and Advances) decreased from BDT 2,255,611,100 as at December 31, 2024 to BDT 1,910,661,278 as at December 31, 2025. This write back has correspondingly increased the Company's reported profit for the year." [1 p.117]

Emphasis of Matters, second paragraph: "As per Finance Company Act 2023 and Bangladesh Bank's DFIM Circular No. 5 dated 24 July 2011, the minimum paid-up capital of a financial institution should be BDT 100 crore. However, it is also specified that the sum of paid-up capital and reserves must not be less than the minimum capital required under the Risk-Based Assets of the company, as determined by the Bangladesh Bank. During the year ended December 31, 2025, the total capital of the company is reported as BDT 168,865,139 and Required capital based on risk weighted assets is BDT 1,000,000,000. As a result, the company currently has a shortfall of BDT (831,134,861) in meeting the minimum capital requirement set by the regulatory authorities." The report continues: "Our opinion is not modified in respect of this matter." [1 p.118]

Material Uncertainty Related to Going Concern: "Without modifying our opinion, we would draw attention to Note 2.06. As at 31 December 2025, the Company had accumulated losses of Tk. 1,900,064,813 and a capital deficit of Tk. (831,134,861) against the minimum capital requirement prescribed by Bangladesh Bank. Although the Company reported a profit after tax of Tk. 54,774,256 during the year, its accumulated losses continue to adversely affect its capital position. Furthermore, the Company's shareholders' equity of Tk. 334,215,910 includes an Assets Revaluation Reserve of Tk. 249,783,341. These conditions indicate the existence of uncertainties that may affect the Company's ability to continue as a going concern. The Company's ability to continue its operations will depend on the successful implementation of management's plans to strengthen its capital base, improve financial performance, and achieve sustainable profitability while meeting the regulatory capital requirements prescribed by Bangladesh Bank." [1 p.118]

Key audit matter 1, 'Measurement of provision for General Investment (Loans, Leases and Advances)', risk: "The process for estimating the provision for Investment (Loans, Lease and Advances) portfolio associated with credit risk is significant and complex. For the individual analysis, these provisions consider the estimates of future business performance, and the market value of collateral provided for credit transactions. For the collective analysis, these provisions are manually processed that deals with voluminous databases, assumptions and calculations for the provision estimates of complex design and implementation. At year end of 2025 the Company reported total gross leases, loans and advances (Investments) of BDT 8,653,935,917 (2024: BDT 9,522,483,955) and it represents 75.90% of total assets. Provision for leases, loans and advances is of BDT 1,910,661,278 (2024: BDT 2,255,611,100)." [1 p.118] [1 p.119]

Key audit matter 1, response: "We tested the design and operating effectiveness of key controls focusing on the following: • Tested the credit appraisal, loan disbursement procedures, monitoring and provisioning process; • Identification of loss events, including early warning and default warning indicators; • Reviewed quarterly Classification of Loans (CL); Our substantive procedures in relation to the provision for loans and advances portfolio comprised the following: • Reviewed the adequacy of the companies general and specific provisions in line with Bangladesh Bank guidelines; • Assessed the methodologies on which the provision amounts based, recalculated the provisions and tested the completeness and accuracy of the underlying information; • Assessed the appropriateness and presentation of disclosures against relevant accounting standards and Bangladesh Bank guidelines; and • Finally compared the amount of loan provision and loan classification disclosed in the financial statements with the quick summary report prepared by Bangladesh Bank. We have verified as compliance of Bangladesh Bank instructions. However, due to the current uncertainty of the overall economic situation both in Bangladesh and Globally there are inherent risk that the judgment applied by management in assessing recoverability of interest income may be different than the actual situation in future." The matter refers to "See note no 07 & 12.02 to the financial statements" [1 p.118] [1 p.119]

Key audit matter 2, 'Legal and regulatory matters', risk: "We focused on this area because the company operates in a legal and regulatory environment that is exposed to significant litigation and similar risks arising from disputes and regulatory proceedings such matters are subject to many uncertainties and the outcome may be difficult to predict. These uncertainties inherently affect the amount and timing of potential outflows with respect to the provisions which have been established and others contingent liabilities. Overall, the legal provisions represent the company's best estimate for existing legal matters that have a probable and estimable impact on the company's financial position." Response: "We obtained understanding, evaluated the design and tested the operational effectiveness of the company's key controls over the legal provision and contingencies process. We enquired to those charged with governance to obtain their view on the status of all significant litigation and regulatory matters. We assessed the methodologies on which the provision amounts are based, recalculated the provisions, and tested the completeness and accuracy of the underlying information. We also assessed the company's provisions and contingent liabilities disclosure." [1 p.119]

Key audit matter 3, 'IT systems and controls', risk: "Our audit procedures have a focus on IT systems and controls due to the pervasive nature and complexity of the IT environment; the large volume of transactions processed in numerous locations daily and the reliance on automated and IT dependent manual controls." Response: "We tested the design and operating effectiveness of the Company's IT access controls over the information systems that are critical to financial reporting. We tested IT general controls (logical access, changes management and aspects of IT operational controls). This included testing that requests for access to systems were appropriately reviewed and authorized. We tested the Company's periodic review of access rights and reviewed requests for changes to systems for appropriate approval and authorization. We considered the control environment relating to various interfaces, configuration and other application layer controls identified as key to our audit." [1 p.120]

In the legal and regulatory section the auditor reports that 'the Company has complied with relevant laws pertaining to capital, reserve, and net worth, cash and liquid assets except for Regulatory Capital' and that 'adequate provisions have been made as per letter reference no. DFIM(C) 1054/13/2024-2050 dated 25 June 2024' [1 p.122]. The company's response, in the directors' report: management placed the emphasis-of-matter issues before the 378th board meeting held on 25-Jun-2026, and 'the Board of Directors advised the Management to take necessary steps to mitigate the issues mentioned in the emphasis of matter paragraph' [1 p.55] [1 p.56]. The FY2024 report by the same firm carried emphasis-of-matter paragraphs on a BDT 93.11 crore deferred provision shortfall, 58.57% classified investments, a capital shortfall and a NAV per share of BDT 0.20 [2 p.116]. The FY2023 report carried a 'Matter of Emphasis' on a BDT 155.18 crore shortfall, Bad & Loss of 80.78% of classified investment, negative EPS and the absence of an actuarial valuation for gratuity [3 p.113] [3 p.114].

Line items: profit paid 1.11 times profit on investment, net investment income minus BDT 79.9m and a BDT 343.9m write-back

Profit on investment fell in each year from BDT 1,652.4m in 2021 to BDT 721.1m in 2025 [4 p.130] [1 p.125]. Profit paid on deposits and borrowings was BDT 1,116.6m in 2021, BDT 868.0m in 2022, BDT 764.0m in 2023, BDT 815.8m in 2024 and BDT 801.1m in 2025 [4 p.130] [3 p.123] [2 p.123] [1 p.125]. Profit paid was 67.6% of profit on investment in 2021, 95.5% in 2024 and 111.1% in 2025, and net investment income was BDT 535.8m, BDT 38.6m and minus BDT 79.9m in those years [29]. Profit credited to the suspense account was BDT 592.4m in 2025 (BDT 437.2m in 2024), and BDT 470.8m was recovered from suspense in 2025 [1 p.165]. The suspense balance was BDT 566.2m at Dec-2025 [1 p.165].

Other income lines in 2025: income from investment in securities was minus BDT 1.2m (BDT 15.5m in 2021), commission, exchange and brokerage BDT 1.2m and other operating income BDT 5.5m [1 p.125] [4 p.130]. Total operating expenses were BDT 189.4m in 2025, of which salaries and allowances were BDT 136.6m; operating expenses were BDT 177.4m in 2021 and peaked at BDT 214.7m in 2023 [1 p.125] [2 p.123] [4 p.130]. Cost-to-income was 31.3% in 2021 and 400.7% in 2024, and n/a in 2025 (total operating income negative) [29].

Provision for loans and advances was BDT 113.8m in 2021, BDT 161.4m in 2022, BDT 310.4m in 2023 and BDT 1,534.2m in 2024, and minus BDT 343.9m in 2025 [4 p.130] [3 p.123] [2 p.123] [1 p.125]. Note 12.02 shows provision made during the year on unclassified investments of minus BDT 5.3m in 2025 [1 p.164]. The directors' report states that the 2025 profit 'was primarily driven by the reversal of provisions against General Investment following successful recovery efforts, the rescheduling of investment accounts under regulatory policy support, and a provision deferral permitted by Bangladesh Bank' [1 p.54]. Provision for taxation was BDT 22.7m in 2025 on profit before tax of BDT 77.5m, and BDT 22.2m in 2024 on a loss before tax of BDT 1,693.0m [1 p.125].

Asset quality: Bad & Loss of BDT 3,609.6m, SMA of 6.73% and provision maintained at 75.5% of required

Note 7.09 classifies General Investments of BDT 8,653.9m at Dec-2025 into Standard-Non SME BDT 3,543.6m, Standard-SME BDT 522.0m, SMA BDT 582.3m, Sub-standard BDT 305.2m, Doubtful BDT 91.3m and Bad & Loss BDT 3,609.6m [1 p.157]. Classified investments were 4.00% of investment in 2021, 9.87% in 2022, 34.20% in 2023, 58.57% in 2024 and 46.29% in 2025, recomputed from the printed classification tables [29]. SMA was 6.73% of investments at Dec-2025 (12.69% at Dec-2024) [29]. The large-loan disclosure lists five customers with BDT 222.0m outstanding at Dec-2025 and a 'Classified amount thereon' of BDT 1,233.3m [1 p.157].

Note 7.10 computes the required provision at the Bangladesh Bank rates: 1% on Standard-Non SME, 0.25% on Standard-SME, 2% special provision, 5% on non-SME SMA, 20% on non-SME sub-standard, 50% on non-SME doubtful and 100% on Bad & Loss [1 p.157]. Total provision required was BDT 2,531.4m and maintained BDT 1,910.7m, a shortfall of BDT 620.7m (BDT 931.1m at Dec-2024) [1 p.157]. The company's note reads: 'In 2023, Bangladesh Bank approved a five-year deferral facility for the additional provision of Tk. 155.18 crore required for the year 2023, vide Letter Ref. No. DFIM(C)1054/13/2024-2050 dated 25 June 2024. Accordingly, the Financial Statements for the year ended 31 December 2025 have been prepared by maintaining a provision of Tk. 191.07 crore, while the remaining Tk. 62.07 crore has been deferred which is scheduled to be adjusted in 2026 & 2027 in accordance with the approved deferral facility.' [1 p.158] Provision maintained was 75.5% of required and 47.7% of classified investments at Dec-2025 [29]. Provision kept against Bad/Loss was BDT 1,661.4m, 46.0% of the Bad & Loss balance [1 p.159] [29]. Cumulative written-off investments were BDT 40.3m [1 p.159].

Funding: deposits of BDT 6,854.6m, 27.4% from five banks and FIs, and borrowings of BDT 162.5m

Deposits and Other Accounts were BDT 6,854.6m at Dec-2025: Mudaraba Term Deposits BDT 6,539.9m, lease deposits BDT 14.3m and deposits under schemes BDT 300.4m [1 p.161]. Within the Mudaraba Term Deposits, deposits received from banks and FIs were BDT 1,881.4m (27.4% of deposits): Islami Bank Bangladesh PLC. BDT 784.5m, Al Arafah Islami Bank PLC. BDT 500.0m, Social Islami Bank PLC. BDT 421.9m, Agrani Bank PLC. BDT 90.0m and Hajj Finance Company Ltd. BDT 85.0m [1 p.161]. All bank and FI deposits were repayable within one year at Dec-2025 [1 p.161]. Deposits fell in each year from BDT 13,164.0m in 2021 to BDT 6,854.6m in 2025 [4 p.128] [1 p.123]. The largest scheme was the Pension Deposit Scheme at BDT 161.4m [1 p.162].

Borrowings of BDT 162.5m comprised Bangladesh Bank SME refinance of BDT 33.3m, a HPSM General borrowing from AIBPLC of BDT 49.2m and the Mudaraba Redeemable Subordinate Bond of BDT 80.0m held by Agrani Bank (32 units) [1 p.160] [1 p.161]. On the asset side, balances with other banks and FIs were BDT 1,179.7m, including Mudaraba Term Deposits of BDT 530.0m with Al-Arafah Islami Bank, BDT 429.0m with Social Islami Bank, BDT 85.0m with Hajj Finance and BDT 63.5m with Mercantile Bank [1 p.151]. Investment was 1.26 times deposits at Dec-2025 (0.94 times at Dec-2021) [29].

Ratios: equity at 2.93% of assets, investment 1.26 times deposits and three printings of the 2025 capital adequacy ratio

Return on average equity (derived) was 2.0% in 2022, -12.2% in 2023, -193.6% in 2024 and 30.2% in 2025; the 2025 figure is on average equity of BDT 181.2m [29]. Return on average assets (derived) was 0.47% in 2025 and -13.39% in 2024 [29]. Net investment income over average total assets was 2.92% in 2022 and -0.68% in 2025 [29]. Equity to total assets was 12.15% in 2021, 0.23% in 2024 and 2.93% in 2025 [29]. Book value per share (derived on 140.33m shares) was BDT 15.31 in 2021 and BDT 2.38 in 2025; the company prints NAVPS of BDT 15.31 and BDT 2.38 [1 p.22] [29].

The annual report prints the capital adequacy ratio in three places with different 2025 values: 1.75% in the directors' report and in note 13.05, and -0.81% in the five-year 'Financial Ratio' table [1 p.21] [1 p.167] [1 p.23]. The same report prints 'NPL %' for 2025 of 58.57% in the directors' report and 46.29% in 'Performance at a Glance'; note 7.09 gives classified investments of BDT 4,006.1m on BDT 8,653.9m [1 p.21] [1 p.22] [1 p.157]. These and other printed conflicts are listed in Exhibit 20.

2026 results: H1 net loss of BDT 8.0m, nine-month EPS of BDT (2.61) and NAV per share of BDT (0.22) at September

For January-June 2026 the unaudited statements show profit on investment of BDT 318.7m and profit paid of BDT 388.4m, net investment income of minus BDT 69.7m and total operating expenses of BDT 86.8m [11 p.1]. Provision for loans and advances was minus BDT 143.8m and provision for diminution in value of investments minus BDT 16.8m, giving profit before tax of BDT 3.7m and, after tax of BDT 11.7m, a net loss of BDT 8.0m [11 p.1]. For April-June 2026 the net profit after tax was BDT 121.9m, after a provision for loans and advances of minus BDT 155.2m [11 p.1]. At 30-Jun-2026 General Investment was BDT 8,283.2m, Deposits and Other Accounts BDT 6,588.4m and Total Shareholders' Equity BDT 327.3m [11 p.1].

The Q3 2026 figures were announced on DSE on 29-Oct-2026 after the board meeting of 28-Oct-2026: EPS of BDT (2.55) for July-September 2026 and BDT (2.61) for January-September 2026, NOCFPS of BDT 1.53 and NAV per share of BDT (0.22) at 30-Sep-2026 [21]. The company's explanation, as posted: 'This decline in EPS was primarily driven by the recognition of provisions against classified investment accounts and the reversal of income related to the settlement of defaulted accounts. Income was further impacted by reduction in the overall investment portfolio.' [21] MISSING FILING: the Q3 2026 statements are not in the corpus at 1-Nov-2026.

Peers: printed classified ratios of 46.29%, 5.95%, 9.88% and 13.75%; capital deficits at ISLAMICFIN and Bangladesh Finance

The peer set is the NBFIs with published AnalystBro analysis notes and audited 2025 annual reports in the corpus; all figures are company basis from each peer's own 2025 report, under each company's printed label [25] [26] [27]. United Finance describes its business as 'lease finance for acquiring assets for industrial and commercial use, term loans for meeting long term funding requirement, short-term working capital solutions and home loans' [18 p.337]. National Housing Finance states that its main objectives are 'financing the acquisition, construction, development and purchase of houses, plots, apartments, real estates, commercial spaces, etc.' [19 p.131]. Bangladesh Finance is printed as 'a Non-Banking Financial Institution engaged in lease, loan and investment financing operations' [20 p.362]. Audit opinions on the 2025 accounts: United Finance unmodified [18 p.326]; National Housing Finance unmodified [19 p.119]; Bangladesh Finance unmodified with an emphasis of matter on going concern [20 p.344].

Printed classified ratios for 2025: ISLAMICFIN 46.29% ('NPL %'), United Finance 5.95% ('Percentage of classified lease, loans and advances against total leases, loans and advances'), National Housing Finance 9.88% ('% of Classified loans against total loans and advances') and Bangladesh Finance 13.75% ('NPLs to total Loans and Advances') [1 p.22] [18 p.211] [19 p.166] [20 p.143]. Printed capital surplus or deficit: ISLAMICFIN BDT (831.1)m, United Finance BDT 1,604.2m, National Housing Finance BDT 1,196.1m and Bangladesh Finance BDT (7,041.3)m [1 p.166] [18 p.211] [19 p.166] [20 p.143]. Loans to deposits (derived) were 1.26x, 1.71x, 1.13x and 1.55x in the same order; United Finance's deposit figure is its printed 'Total Term deposits' [29].

Governance: six managing-director changes in 20 months, Z category since July 2025 and no dividend for three years

The board profiles in the 2025 report list seven directors: S. M. Bakhtiar Alam (Chairman), Abul Quasem Haider (Vice Chairman), Mostanser Billa (Vice Chairman), Asgar Haider (Director), and independent directors Mrs. Shayema Akter FCA, Dr. Daulatunnaher khanam and Shafiqul Mawla [1 p.30] [1 p.31] [1 p.32] [1 p.33] [1 p.34]. Abul Quasem Haider is described as 'one of the founder of "Youth Group"' and founder Chairman of Islamic Finance and Investment PLC; Annexure D lists him as Chairman of Youth Spinning Mills Ltd., Youth Hatchery & Agro Ltd., Youth Real Estate Ltd. and Multimode Resource Ltd. [1 p.31] [1 p.179]. Mostanser Billa is listed as Managing Director of Youth Spinning Mills Ltd. and a director of International Holdings Ltd.; Asgar Haider as a director of Comfit Composite Knit, Shahjibazar Power Co. Ltd. and Patromax Refineary Ltd. [1 p.179]. S. M. Bakhtiar Alam is the founder of Prophecy Furnishers Limited and a member of the Board of Trustee of Eastern University [1 p.30]. DSE posted his election as Chairman on 19-Oct-2025 [21]. The directors' report states that the tenure of independent director Irteza Reza Chowdhury expired on 04-Jan-2026 [1 p.55].

The 2025 attendance annexure lists nine directors for 16 board meetings: S. M. Bakhtiar Alam 06, Abul Quasem Haider 16, Mostanser Billa 16, K.B.M. Moin Uddin Chisty 10, Anis Salahuddin Ahmad 05, Mrs. Julia Rahman 13, Asgar Haider 07, Irteza Reza Chowdhury 13 and Mrs. Shayema Akter 15 [1 p.85]. Its notes state that S. M. Bakhtiar Alam was appointed on 25-Sep-2025, that K.B.M. Moin Uddin Chisty left the board on 24-Aug-2025, that Irteza Reza Chowdhury was reappointed on 21-Sep-2025, that leave of absence was granted to directors who could not attend, and that the 371st board meeting fee was not paid 'because restriction of Bangladesh Bank 3rd meeting of the month' [1 p.85]. Meeting fees totalled BDT 1,110,000 (board BDT 950,000, audit committee BDT 140,000, risk management committee BDT 20,000); the P&L shows directors' fees of BDT 1,685,000 [1 p.85] [1 p.125]. The company states that under DFIM Circular No. 01 of 29-Feb-2024 a finance company 'can only form three subcommittees of the Board', and that the audit committee performs the role of the nomination and remuneration committee under DFIM Circular Letter No. 18 of 21-May-2024 [1 p.55] [1 p.56].

Committees as printed in the 2025 report: Executive Committee of Mostanser Billa (Chairman), S. M. Bakhtiar Alam, Asgar Haider and Dr. Daulatunnaher khanam; Audit Committee of Mrs. Shayema Akter FCA (Chairman), Abul Quasem Haider and Shafiqul Mawla; Risk Management Committee of Abul Quasem Haider (Chairman), S. M. Bakhtiar Alam, Mostanser Billa, Mrs. Shayema Akter FCA and Shafiqul Mawla [1 p.37] [1 p.38]. The audit committee schedule lists its members at 31-Dec-2025 as Mrs. Shayema Akter, FCA (Chairman), Janab Abul Quasem Haider and Janab Irteza Reza Chowdhury, and its five 2025 meetings on 24-Feb, 30-Jun, 28-Jul, 16-Oct and 08-Dec-2025 [1 p.180]. Attendance at those five meetings per Annexure-I: Abul Quasem Haider 01, Mostanser Billa 04, K.B.M. Moin Uddin Chisty 03, Irteza Reza Chowdhury 02 and Mrs. Shayema Akter 04; risk management committee: one meeting, attended by K.B.M. Moin Uddin Chisty and Asgar Haider [1 p.85]. The executive committee columns show no meetings in 2025 [1 p.85]. The audit committee's tasks in 2025 included a 'Special Investigation Report on A.N.M Ferdous Alam, SO, Principal Branch (Ex.)' [1 p.180]; note 9.02 records a fund embezzlement of Tk. 1,10,40,224.00 identified in 2025, of which Tk. 88,94,079.00 was recovered and the balance fully provided [1 p.160].

Key management at the date of the report: Mohammed Mosharaf Hossain, Managing Director (Current Charge) from 01-Apr-2026; Mohammad Rashedul Islam ACA, Chief Financial Officer; Imteeaz Ahmed, Company Secretary (Current Charge); and Md. Sajedur Rahman, Head of Internal Control & Compliance (HICC); none holds shares [1 p.35] [1 p.86]. DSE posts record the managing director's office changing hands in 2025-2026: Md. Taufikul Hakim (current charge from 16-Jan-2025), Md. Nurul Azim (appointed from 06-Apr-2025), Md. Taufikul Hakim (current charge from 03-Feb-2026), Mohammed Mosharaf Hossain (current charge from 01-Apr-2026), Md. Taufikul Hakim (current charge from 01-Aug-2026) and Mohammed Khorshed Alam (appointed from 30-Aug-2026 after Bangladesh Bank approval dated 25-Aug-2026) [21]. Md. Abdul Hannan was appointed Company Secretary from 07-Sep-2026 [21].

The BSEC corporate governance compliance report (Annexure-C, pp.74-84 of the report, read page by page from the images) marks no condition 'Not complied'; several conditions are marked 'Not applicable', 'N/A' or 'DO', including the NRC conditions, with the remark that the audit committee performs the NRC's role [1 p.74] [1 p.80] [1 p.81]. The annexure's heading reads 'Status of Compliance with the Corporate Governance Code (CGC) as on December 31, 2024.' and its condition 1(1) remark states a board of '08 (Eight) members including Two (02) Independent Director', naming Mrs. Shayema Akter FCA and Janab Irteza Reza Chowdhury [1 p.74]. The compliance certificate by Jasmin & Associates, dated 13-Aug-2026, states that the company complied with the code 'except as stated in the remarks column in Annexure-C' [1 p.73]. The Bangladesh Bank good-governance statement (Annexure-III) marks each listed item 'Complied' [1 p.87]. The directors' report states that IFIPLC 'is in complete compliance of all applicable laws and regulations' [1 p.54]; the auditor reports compliance with laws on capital 'except for Regulatory Capital' [1 p.122].

Shareholding at Dec-2025: sponsors 32.83%, institutions 24.22% and general public 42.95% of 140,326,670 shares; no shareholder holds 10% or more [1 p.165] [1 p.86]. Directors' holdings: S.M. Bakhtiar Alam 28,08,789, Abul Quasem Haider 30,43,690, Mostanser Billa 28,10,921 and Asgar Haider 28,36,335 shares; the independent directors are shown with 'None' [1 p.86]. DSE posted that Abul Quasem Haider completed a purchase of 2,00,000 shares, confirmed on 03-Nov-2025 [21]. The board recommended no dividend for 2023, 2024 or 2025; DSE moved the shares to the Z category from 03-Jul-2025 for failing 'to declare any dividend for a period of 2 (two) consecutive years', and margin loans to purchase the shares were barred from 03-Jul-2025 [1 p.23] [21]. Emerging Credit Rating Limited assigned a surveillance rating of BBB (long term) and ST-4 (short term) with a developing outlook, posted on 24-Sep-2025 [21]. The board approved a valuation of land and buildings on 21-Dec-2025 showing market value after revaluation of BDT 581,615,102; net book value before revaluation was BDT 276,798,590 [21].

What's next: FY2026 accounts between 14-Mar and 30-Jun-2027 (inferred) and the 2026-2027 adjustment of BDT 620.7m of deferred provision

Q3 2026 results were announced on 29-Oct-2026 and are covered above. No board-meeting date for the FY2026 accounts or for Q1 2027 has been notified on DSE [21]. The 25th AGM was held, per its notice, on 24-Sep-2026 (passed); DSE posted no outcome by 2-Nov-2026, so the vote on the re-election of Abul Quasem Haider and Mostanser Billa and on the appointment of Kazi Zahir Khan & Co. as auditor for 2026 is unknown [1 p.18] [1 p.55] [1 p.56] [21]. The last credit rating posted on DSE was on 24-Sep-2025; that date has passed in 2026 with no new rating notice [21].

Precedents for the annual-results board are the auditor's report dates for FY2016-FY2022 (09-Apr-2017, 14-Mar-2018, 20-Mar-2019, 09-Jun-2020, 11-Apr-2021, 08-May-2022, 11-May-2023) and the board-meeting dates for FY2023-FY2025 (30-Jun-2024 statement date, 30-Jun-2025 and 25-Jun-2026 boards) [10 p.93] [9 p.88] [8 p.151] [7 p.98] [6 p.114] [5 p.163] [4 p.127] [3 p.120] [21]. The range covering all ten is 14-Mar-2027 to 30-Jun-2027 (inferred, 10 years); the outliers are the March dates of 2018 and 2019, and the three most recent precedents give a narrower range of 24-Jun-2027 to 30-Jun-2027. For Q1 results the precedents are 09-May-2018 and 11-May-2019 (board authorisation dates in the Q1 statements), 08-May-2022 and 11-May-2023 (statement signing dates), 30-Jun-2024 (statement date) and the boards of 30-Jun-2025 and 25-Jun-2026 [17 p.6] [16 p.6] [15 p.2] [14 p.3] [13 p.2] [12 p.1] [21]. The range covering all seven is 06-May-2027 to 30-Jun-2027 (inferred, 7 years); four precedents (2018, 2019, 2022, 2023) fall on 08-11 May and three (2024-2026) on 25-30 June; the three most recent give 24-Jun-2027 to 30-Jun-2027. AGM precedents from the AGM notices are 24-May-2017, 25-Apr-2018, 05-May-2019, 24-Jun-2021, 29-Jun-2022, 26-Jun-2023, 22-Aug-2024, 28-Aug-2025 and 24-Sep-2026 [10 p.14] [9 p.5] [8 p.15] [6 p.12] [5 p.14] [4 p.15] [3 p.14] [2 p.18] [1 p.18]; no AGM notice was found in the 2019 report. The range covering all nine is 25-Apr-2027 to 26-Sep-2027 (inferred, 9 years); the outliers are the April and May AGMs of 2017-2019, and the three most recent (22-Aug to 24-Sep) give a narrower range of 22-Aug-2027 to 26-Sep-2027. All range ends fall on DSE business days; Fridays and Saturdays are excluded.

Bangladesh's LDC graduation date is 24-Nov-2029; the UN General Assembly adopted it on 29-Oct-2026 [23] [24]. The filings do not link it to any line item.

Risks: deferred provision, capital deficiency, Bad & Loss of BDT 3.6bn and short-dated bank deposits

The risk table lists items the filings disclose, with the evidence and the figures. The 'line it moves' column reads 'None disclosed' unless a filing quote links the item to a line [1 p.117] [1 p.118] [1 p.158].

Key questions: the deferred provision charge, the capital plan, recoveries, the funding margin and bank deposits

Key questions, each with the filing line that answers it. How much of the deferred provision is charged in FY2026, and through which line? Note 7.10 and note 12.02 of the FY2026 report give the required and maintained figures [1 p.157] [1 p.164]. What is the capital plan? The auditor's going-concern paragraph refers to 'management's plans to strengthen its capital base' [1 p.118]; note 2.06 of the next report is the place to read them. How much classified investment is recovered or rescheduled? Note 7.11(a) gives the movement in classified investments, BDT (1,571.1)m in 2025 [1 p.158]. How does profit paid compare with profit on investment? The P&L lines were BDT 801.1m and BDT 721.1m in 2025 [1 p.125]. Do the bank and FI depositors roll over? Note 11.01.01 lists five depositors with BDT 1,881.4m, all due within one year [1 p.161].

FAQ

Is Islamic Finance and Investment's equity positive?

Total Shareholders' Equity was BDT 334.2m at 31-Dec-2025, including an Assets Revaluation Reserve of BDT 249.8m; the DSE-announced NAV per share was BDT (0.22) at 30-Sep-2026 [1 p.123] [21].

What did the auditor say about the 2025 accounts?

Zoha Zaman Kabir Rashid & Co. gave an unmodified opinion with two emphasis-of-matter paragraphs (the deferred provision shortfall and the capital shortfall) and a material uncertainty related to going concern [1 p.117] [1 p.118].

What is the NPL ratio?

Classified general investments were BDT 4,006.1m of BDT 8,653.9m at Dec-2025, 46.29% recomputed; the report prints 46.29% on one page and 58.57% on another [1 p.157] [1 p.22] [1 p.21].

Why was there a profit in 2025?

The directors' report attributes it to provision reversals after recoveries, rescheduling under policy support and the Bangladesh Bank deferral; the P&L shows a BDT 343.9m write-back of provision for loans and advances [1 p.54] [1 p.125].

Does the company pay a dividend?

No dividend was recommended for 2023, 2024 or 2025, and the directors' report states that the company is restricted from declaring dividends until the deferred provision is fully adjusted [1 p.23] [1 p.55].

Is ISLAMICFIN on the NBFI liquidation list?

It is not among the nine NBFIs named in The Business Standard's report of 1-Dec-2025 [22].

Which results does this report use?

Audited statements for 2021-2025, the unaudited H1 2026 statements and the Q1 and Q3 2026 figures announced on DSE. The Q3 2026 statements are not in the corpus at 1-Nov-2026.

Sources

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