B Mirror Report: The government has granted the state-owned Investment Corporation of Bangladesh (ICB) an additional three years to repay its Tk 30 billion loan borrowed from Bangladesh Bank, aiming to preserve stability in the country’s capital market. The extension, however, comes with a set of strict conditions.

According to a letter issued by the Financial Institutions Division (FID) under the Ministry of Finance, the government’s sovereign guarantee against the loan has been extended until 2029 with retrospective effect from May 13, 2026. ICB must fully repay the Tk 30 billion principal within the extended period, while all other terms and conditions of the original loan agreement remain unchanged.

ICB was originally scheduled to repay the loan in May this year but failed to do so due to severe liquidity constraints. The corporation subsequently sought additional time, arguing that immediate repayment would force it to liquidate a significant portion of its stock market holdings, potentially destabilizing the market.

The FID said the extension is intended primarily to safeguard market stability. During the extended repayment period, the division will closely monitor ICB’s investment activities, share transactions, and portfolio restructuring.

As part of the conditions, ICB has been directed to reduce administrative and operating expenses, lower its rising interest costs, and prepare a time-bound, practical business recovery plan to address its capital shortfall. The implementation of the recovery plan will be reviewed regularly by the government.

The corporation has also been instructed to submit quarterly reports to both the Finance Division and the Financial Institutions Division detailing its liquidity position, stock market investments, and progress in preparing for loan repayment. In addition, ICB must coordinate with Bangladesh Bank to finalize a revised repayment schedule for government approval.

ICB is currently facing a significant capital deficit due to the prolonged downturn in the stock market. According to the corporation, the market value of its investment portfolio declined from about Tk 125 billion to approximately Tk 80 billion by the end of December 2025, creating a capital shortfall of around Tk 55.06 billion.

The corporation has also failed to pay nearly Tk 12 billion in interest on loans borrowed from state-owned banks. Once a highly profitable institutional investor in the capital market, ICB has now been posting consecutive losses.

ICB officials said the current board has introduced major governance reforms following allegations of irregularities in previous years. Oversight of the portfolio management committee has been strengthened, purchases through the block market have been halted, and investment decisions are now reviewed daily, with reports submitted to the board every 15 days. Officials claim these measures have helped reduce investment losses.

Despite these reforms, ICB officials say the institution requires additional low-cost financing from the government to restore financial stability. They noted that while annual operating expenses amount to only Tk 1-1.2 billion, annual interest payments alone stand at nearly Tk 10 billion, making recovery difficult without cheaper funding.

According to ICB’s financial statements, income from capital gains, dividends, and associate companies is currently insufficient to cover interest expenses. Additional provisions for investments and operating costs have further widened its losses.

After posting a record loss of Tk 12.13 billion in the 2024-25 fiscal year, ICB incurred another Tk 5.88 billion in losses during the first nine months of FY2025-26. Although the final quarter’s financial results have yet to be published, officials expect the corporation to remain in the red for the full fiscal year.