Islami Bank has announced plans to raise Tk 20,000 crore, including Tk 10,000 crore from selling S Alam Group’s stake and the rest through new share issuance. Questions loom over the feasibility of this target, given the financial sector’s fragility and political uncertainties. Market calculations suggest that even if S Alam’s alleged 80% stake—valued at Tk 6,700 crore—is sold, achieving Tk 10,000 crore would require doubling the market price. The bank’s chairman plans to invite former foreign shareholders, such as IFC and Al-Rajhi Saudi Group, to reinvest by January. However, doubts persist about foreign investors’ willingness to return, given past governance issues since S Alam’s controversial takeover in 2017.
Experts highlighted significant challenges, including the lack of depth in the stock market and low investor confidence. They recommended alternative strategies such as reducing lending, issuing bonds, and leveraging past goodwill to attract deposits. The bank recently secured approval to issue a Tk 500 crore subordinated bond, but analysts noted this amount is insufficient for its needs.
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