The Islami Bank Bangladesh PLC plans to sell its shares seized by Bangladesh Bank soon after the fall of the Bangladesh Awami League-led government, shares largely belonging to S Alam Group.
Newly-appointed Islami Bank Chairman Obayed Ullah Al Masud made the disclosure as part of the stolen money recovery strategy at a press conference at the central bank premises on Monday.
The bank wants to raise Tk20,000 crore to maintain its balance sheet - the gap between investments and deposits -- by selling off S Alam Group’s shares for Tk10,000 crore, and issuing new shares worth another Tk10,000 crore.
Bangladesh Bank (BB) Governor Dr Ahsan H Mansur said that they were taking action against individuals, not companies like S Alam Group and Beximco in particular, as these companies are considered national assets.
Masud said: “Islami Bank has a gap of Tk20,000 crore between investments and deposits. This gap will be mitigated by selling the shares held by the S Alam Group and issuing new shares.”
“S Alam Group has shares worth Tk1,600 crore in face value, which have a market price of nearly Tk10,000 crore, since the current price of each share price at the Dhaka Stock Exchange is now at Tk60,” he explained.
Tk80,000 crore was taken from 17 branches of Islami Bank by S Alam Group. Not only did they take the money, but also destroyed the bank's relationship with international banks, he further said.
However, S Alam Group’s shares were seized by Bangladesh Bank soon after the fall of the Sheikh Hasina government on August 5 last.
The remaining Tk10,000 crore will be raised through issuing new shares, the Islami Bank chairman said.
Regarding Islami Bank's current status, the newly-appointed IBBPLC chairman said: “Islami Bank is improving and deposits have increased by about Tk5,000 crore in three months. Expatriate income is also rising. New investments remain stopped. Three officers are being appointed at 2,700 agent points of the bank. They can play a role in raising bank deposits.”
“Besides, efforts are being made to bring back the old investor, a Saudi company Alrajhi Bank. Efforts will be made to include IFC as well,” he added.
After the change of ownership in 2017, foreign investors started to sell shares in Islami Bank Bangladesh Limited.
More than 50% of Islami Bank was owned by foreigners before S Alam Group took control, but now that has come down to 13%.
BB initiatives
Regarding Islami Bank, Governor Ahsan H Mansur said: “The inclusion of previous foreign investors will increase the bank’s credibility.”
Stating that some banks are doing well after the political change, the governor said that Islami Bank, a large private bank, has also turned around.
Legal action would be taken against the S Alam Group chairman and other officials for their alleged crimes in the banking sector, he stated.
Mansur also said that Bangladesh Bank will not shut down companies such as S Alam Group and Beximco.
He made it clear that the central bank will look after the interests of the bank customers first. No bank will be closed and the country will not run without those working for the institution. Therefore, employees of an organization cannot be let go from their jobs.
The central bank is assisting banks in their reformation progress, but liquidity support will not be given to all banks at once, Mansur added.