Islami Bank stock trading halted

Shares of Islami Bank Bangladesh PLC soared 32 percent over the past three consecutive trading days. Today, the stock hit the upper circuit limit of 10 percent and trading was halted due to a shortage of sellers following the government's announcement of support for the bank.

The bank's shares had been on a downward trend since the Bangladesh Securities and Exchange Commission withdrew the floor price on June 8.

Meanwhile, protests by depositors against the appointment of chairman Md Khurshid Alam further accelerated the decline. As a result, the stock fell around 19 percent in just two days through June 10.

The share price began rebounding on June 11 and the next day Bangladesh Bank governor announced that the central bank would provide full support to the bank. It has already extended Tk 2,500 crore in liquidity support.

Additionally, on June 14, Bangladesh Bank dissolved the entire board of directors of Islami Bank Bangladesh PLC, including its chairman, amid an acute liquidity crisis triggered by massive deposit withdrawals, protests, political controversy and warnings from bankers about wider repercussions.

Islami Bank currently holds the largest volume of non-performing loans (NPLs) in the banking sector, amounting to Tk 95,629 crore, or 50.88 percent of its total outstanding loans.

The bank declared a 10 percent cash dividend for shareholders in 2023 but did not pay any dividend in the following two years. As a result, its stock was downgraded to the Z category.