Islamic Bank Worldwide Requests Extension to Utilize Remaining IPO Funds
In a series of significant developments, Global Islami Bank has been navigating through a challenging period.
The bank reported a loss of approximately Tk1,717 crore in the first half of 2025, with a per-share loss of Tk16.56. This disappointing result followed a loss of Tk1,308 crore in 2024, where the bank also decided not to pay any dividends to its shareholders.
The bank's share price dropped by 3.57% to close at Tk2.70 on Wednesday, reflecting the market's response to these financial setbacks.
The financial troubles may have contributed to the delay in utilizing the IPO funds. Originally, Tk425 crore was raised through the bank's Initial Public Offering in 2022. Of this, Tk100 crore was allocated for SME investments, Tk268.5 crore for government securities and bonds, Tk50 crore for listed securities and bonds, and Tk6.5 crore for IPO-related expenses. However, Tk73.82 crore of the IPO funds remain unspent as of the filing of the statement on the Dhaka Stock Exchange (DSE).
The bank has requested regulatory approval to extend the deadline for using its unused IPO proceeds of Tk74 crore until November 2026. This extension was approved at the bank's 11th Annual General Meeting (AGM) held on 19 August.
The delay in utilizing the IPO funds is attributed to the absence of sufficient potential investors in the SME sector, volatile conditions in the capital market, the Russia-Ukraine war, political unrest in Bangladesh, and conflicts in the Middle East.
In a bid to rectify its financials, the bank's board was dissolved under the new political regime in August 2024 and replaced with five independent directors. A special audit by the Bangladesh Bank and the bank itself revealed balance sheet manipulation, where it falsely reported a net profit of Tk128 crore for 2023. The reconstituted board subsequently revoked the declared dividend of 5% cash and 5% stock dividend.
Despite these challenges, Global Islami Bank managed to make a profit of Tk80 crore in the same period of 2024, with an earnings per share (EPS) of Tk0.97.
The Bangladesh Securities and Exchange Commission (BSEC) granted permission for the bank to extend the deadline for utilizing the unutilized IPO funds of Tk 74 crore until November 2026. Additionally, Tk31.98 lakh, originally earmarked for IPO expenses, will be transferred to the "Investment in SME" head, subject to approval from the BSEC and other relevant regulators.
As Global Islami Bank continues to face these challenges, it is working towards rectifying its financial situation and utilizing its IPO funds effectively to secure a stable future.
Read also:
- President von der Leyen's address at the Fourth Renewable Hydrogen Summit, delivered remotely
- Unveiling Innovation in Propulsion: A Deep Dive into the Advantages and Obstacles of Magnetic Engines
- Intensified farm machinery emissions posing challenges to China's net-zero targets
- EU Fuel Ban Alerts Mercedes Boss of Potential Crisis
