Islami Bank clarification, our reply

Islami Bank Bangladesh has sent a clarification of a news titled “Islami Bank: Profit falls as bad debts rise,” published in The Daily Star on Friday.

The bank says its profit for the first six months of the year has not decreased. Its operating profit in June increased about Tk 220 crore from a year earlier. However, due to default of some rescheduled and restructured loans of 2016, the bank's provisioning requirement for the Jan-Jun period of 2017 increased comparatively. This has affected profit after tax and provisioning and earnings per share have slightly decreased. Appropriate measures have been taken to overcome the situation.

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Islami Bank disputed its aggressive lending, as stated in the report. Since it is a Shariah-compliant bank, it cannot invest in different interest-based treasury bonds like other traditional banks. As a result, the liquidity balance of the bank was about Tk 5,700 crore on June. The surplus liquidity was invested in the country's most preferred and productive sector by complying with all the banking rules and regulations. As a result, the bank's investment-deposit ratio increased to 89.44 percent in June, which was within the maximum limit of 90 percent authorised by the Bangladesh Bank.

Our reply

The report was made based on the bank's half-yearly statement that was approved at its 487th audit committee meeting. We stand by our report.