IFIC Bank has no equity of its own

IFIC Bank PLC is facing a deepening financial crisis as its liabilities exceed its assets and the burden of defaulted loans continues to erode its actual income. The bank is also failing to generate sufficient cash from its regular operations. The combined pressures have pushed the listed bank’s negative equity beyond Tk 1,000 crore. This means its shareholders have no equity left.

One of the main reasons behind the bank’s current crisis is the burden of defaulted loans. A substantial amount of the bank’s money remains tied up because borrowers have failed to repay their loans. As a result, these loans are no longer generating regular interest income. Instead, unpaid interest has to be kept in suspense. At the same time, the bank faces increasing pressure to maintain the required provisions against defaulted loans. This is negatively affecting both its income and capital. Consequently, declining interest income is increasing losses while the quality of its assets continues to deteriorate. The prolonged failure to recover defaulted loans is deepening the bank’s financial crisis.

The bank incurred a loss of Tk 16.6964 billion in the first six months of this year. Its loss during the same period last year was Tk 11.2846 billion. This means its losses increased by more than Tk 5.41 billion in one year. As a result, its loss per share rose from Tk 5.87 to Tk 8.69.

The most alarming development is that the bank’s total liabilities now exceed its total assets. As of June 30, 2026, its total liabilities stood at approximately Tk 598.9929 billion. In contrast, its total assets amounted to approximately Tk 588.0062 billion. This means liabilities exceeded assets by around Tk 10.99 billion. Consequently, the bank’s shareholders’ equity has turned negative.

The core business of a bank is to earn interest by lending money. However, this core business has suffered a major setback. In the first six months of 2026, the bank recorded net interest income of negative Tk 15.3450 billion. The deficit during the same period last year was approximately Tk 9.69 billion. This means the shortfall in net interest income increased by around Tk 5.65 billion in one year.

The quality of the bank’s loans has also raised serious concerns. According to its financial statements, deterioration in asset quality has pushed the bank into losses. This indicates that declining business income is not the only reason behind the losses. Deteriorating asset quality has also emerged as a major contributing factor.

Meanwhile, interest on loans that the bank has been unable to recover continues to accumulate. As of June 30, 2026, the amount of interest held in suspense stood at Tk 43.4054 billion. The figure was Tk 37.3381 billion as of December 31, 2025. Suspended interest increased by approximately Tk 6.07 billion in just six months.

The crisis is not limited to losses reported on paper. The bank is also facing a major cash flow problem. During the first six months of 2026, its cash flow from operating activities turned negative at Tk 8.2224 billion. In contrast, cash flow from operating activities was positive at approximately Tk 9.6330 billion during the same period last year. This indicates a significant deterioration in the bank’s cash flow position over one year.

The impact of the decline in operating cash flow is also evident in cash flow per share. During the same period last year, cash flow from operating activities per share stood at Tk 5.01. In the first six months of 2026, it fell to negative Tk 4.28. This indicates significant pressure on the bank’s ability to generate cash through its business operations.

Meanwhile, the bank has had to maintain substantial provisions against loans. As of June 30, 2026, total provisions against loans and advances stood at approximately Tk 10.2339 billion. Of this amount, specific provisions against classified loans accounted for approximately Tk 7.9290 billion.

Attempts were made to contact the bank’s Chairman, Md. Mehmud Husain, and Managing Director, Syed Mansur Mustafa, for comments on these issues, but no response was received. Messages were also sent through WhatsApp, but there was no reply.