Social Islami Bank PLC has reported a record loss of Tk1,704 crore for the first nine months of 2025, the worst in its history, as soaring interest expenses and provisioning requirements severely eroded its profitability.
Since its listing in 2000, the Shariah-based private lender has never suffered such a massive loss, although it had posted a Tk101 crore loss in 2024.
With the latest figures, the bank's accumulated losses or retained earnings turned negative, reaching Tk1,809 crore at the end of September, according to its quarterly financial statements.
The statement further showed that the bank paid substantially more in interest on deposits and borrowings than it earned from investments and lending. Including income from shares, brokerage commissions, and other sources, it incurred an operating loss of Tk648 crore.
After accounting for operating expenses and provisioning, the total loss widened to Tk1,704.48 crore, translating into a per-share loss of Tk15.28.
However, during the same period of 2024, the bank had made a profit of Tk51.16 crore.
During the January-September period, Social Islami Bank paid Tk2,444 crore in interest, which is 32% higher compared to the same time of the previous year. Of this, Tk1,552 crore went to depositors and Tk891 crore to settle borrowing costs.
Its provisioning against loans and advances also surged to Tk401 crore from Tk48.5 crore a year earlier.
As a result, the bank's net cash flow from operating activities plunged to a negative Tk3,776 crore, with per-share cash flow standing at Tk33.12 in the red at the end of September 2025.
An official, requesting anonymity, told The Business Standard that the bank has been struggling due to sharply rising funding costs. "The loss mainly stemmed from higher interest expenses on deposits and borrowings amid elevated market rates," the official said.
Massive quarterly loss
As per its statement, at the end of first half of 2025, the bank had reported a loss of Tk469 crore with loss per share of Tk4.33, but losses skyrocketed in the July-September quarter as interest expenses and provisioning jumped abnormally.
Its net loss for the third quarter alone stood at Tk1,235 crore, with a per-share loss of Tk10.94 – compared to Tk28.98 crore in losses during the same period of 2024.
In the July-September quarter, interest payments rose 82% year-on-year to Tk1,165 crore, while provisioning soared to Tk391 crore from just Tk5.75 crore a year earlier.
Financial troubles
Social Islami Bank is among five troubled banks – alongside First Security Islami Bank, Union Bank, Global Islami Bank, and Exim Bank – that are now in the process of being merged into a single entity.
Founded in 1995, the bank operates 180 branches, 236 sub-branches, and 375 agent banking outlets across the country. It also has subsidiaries – Social Islami Bank Securities, Social Islami Investment Limited, and Social Islami Foundation Hospital.
Since 2017, the bank has been under the control of the S Alam Group – a business conglomerate accused of irregularities and corruption in recruitment and loan disbursement.
Following widespread allegations, Bangladesh Bank dissolved the bank's board in August 2024 and formed a new five-member board.
Due to its financial losses, SIBL did not declare any dividend for 2024. The bank's audited statements showed a provision shortfall of Tk20,994 crore as of 31 December 2024, which led the board to withhold any dividend declaration.
According to the 2024 audit, its classified investments jumped more than thirteenfold year-on-year to Tk23,633 crore. The bank was required to maintain Tk22,360 crore in provisions but set aside only Tk1,366 crore.
Yesterday, the bank's shares closed at Tk3.20 each on the Dhaka Stock Exchange.