Now IDB pulls out of Islami Bank directorship

The Islamic Development Bank (IDB), a multilateral development finance institution focused on Islamic finance, has withdrawn its directorship from Islami Bank Bangladesh Limited.

The IDB withdrew its representative from the board of directors of Islami Bank, according to the bank's latest monthly shareholding report.

However, the Saudi-based finance institution has not sold its shares yet.

The IDB has been engaged with the country's largest private sector lender since its inception in 1983 through acquiring placement shares and holding directorship on the bank's board by sending its representative.

Mohammad Al-Midani served as the last representative.

In 2018, IDB sold 8.69 crore shares of the bank after the massive change in the board in 2017. Islami Bank's other foreign partner, Kuwait Finance House, also sold out its holdings.

Arabsas Travel and Tourist Agency, another Saudi-based company, sold its entire holding of 9.99% shares in Islami Bank through the Chittagong Stock Exchange last month.

In July, Arabsas Travel withdrew its director from the board of the bank. Before the withdrawal, Musaid Abdullah A Al-Rajhi served as the director of Islami Bank for a long time on behalf of the Saudi firm.

Besides, in July, Islami Bank appointed Abu Sayeed Mohammad Quasem, nominated by Armada Spinning Mills, Showkat Hossain, nominated by Kingsway Endeavors, and Jamal Mostafa Chowdhury, nominated by Uniglobe Business Resources, as shareholder directors.

The three organisations jointly hold 11.07% shares of Islami Bank.

In June, three companies withdrew their directorships from the bank. At the time, Professor Nazmul Hasan, Professor Salim Uddin and Major General (retd) Abdul Matin were the nominee directors of these three companies on the board of the bank.

Earlier in the same month, Ahsanul Alam, son of S Alam Group Chairman Saiful Alam Masood, was appointed a shareholder director of the bank as a nominee of JMC Builders.

At present, Islami Bank has one foreign director named Yousif Abdullah A Al-Rajhi nominated by the Saudi Arabia-based Al-Rajhi Co. He is serving as vice-chairman in the bank.

As of 30 September, sponsors and directors hold 40.88% shares of Islami Bank, which was 42.98% a month ago. Local sponsors and directors hold 30.93% shares of the bank and foreign directors have 9.94% shares.

Other than foreign directors, foreign investors have 26.59% shares in the bank.

Meanwhile, in the first half of this year, Islami Bank's net profit was Tk343 crore, which was 1.36% higher than in the previous year at the same time.

The bank faced a severe net operating cash flow crisis in the period January-June 2023.

It said in its half yearly financial statement that the net operating cash flow per share (NOCFPS) had significantly decreased mainly due to less deposit mobilisation from customers by Tk2,541 crore and a decrease of placement from other banks by Tk7,380 crore.

However, the bank has Tk17,410 crore as cash.