Union Bank has posted a record Tk 25,794 crore loss for 2024, the highest annual loss ever reported by a bank in the country, driven mainly by massive provision adjustments against its huge stock of defaulted loans.
The bank had reported a loss of only Tk 292 crore in 2023.
The bank, long controlled by the controversial S Alam Group, saw its earnings per share fall to a Tk 249-loss in 2024 from a Tk 2.82-profit a year earlier, according to data published on the Dhaka Stock Exchange on Tuesday.
The Bangladesh Bank dissolved the boards of five troubled shariah-based banks, including Union Bank, on November 6 and appointed administrators as part of an ongoing merger process.
Union Bank administrator Mohammad Abul Hashem told 抖阴精品 that the 2024 loss mainly reflected a provision shortfall of Tk 23,700 crore.
He said that the new management chose to disclose the real financial position in line with accounting standards and central bank rules.
All provisioning gaps tied to non-performing loans were adjusted as required by the Bangladesh Bank, he said.
Regulatory requirements mandate banks to maintain provisions ranging from 0.5 to 5 per cent for standard loans.
However, for classified loans, the required provisions rise to 20 per cent for substandard loans, 50 per cent for doubtful loans and 100 per cent for bad or loss-category loans.
By March 2025, Union Bank鈥檚 non-performing loans climbed to Tk 25,302 crore, or 90 per cent of its loan portfolio of Tk 28,174 crore.
BB officials said that S Alam Group withdrew about Tk 18,000 crore from Union Bank through named and anonymous accounts while controlling seven banks in total.
They said that the group drained about Tk 2 lakh crore from the banking sector, contributing to the collapse of multiple banks.
After the political transition on August 5, 2024, the Bangladesh Bank restructured boards of these banks, removing the group鈥檚 influence.
Former managing director ABM Mokammel Hoque, in office since 2020, played a key role on behalf of the group, officials said.
Despite serious irregularities at the bank, the Bangladesh Securities and Exchange Commission allowed Union Bank to raise Tk 428 crore through an IPO.
Listed in January 2022, its share price never exceeded the face value of Tk 10. Before trading was suspended on November 6, the shares closed at Tk 1.5.
Because of the bank鈥檚 critical condition, the Bangladesh Bank moved to merge five liquidity-starved Islamic banks into a single entity, to be named Sammilito Islami Bank PLC.
The new bank will have a planned paid up capital base of Tk 35,000 crore, with the government contributing Tk 20,000 crore.
The remaining Tk 15,000 crore will come from converting depositors鈥� funds into shares.
