BM Desk: Al-Arafah Islami Bank, a stock market listed company, lost more than Tk 391 crore in 2024. However, instead of showing a deficit, the bank officials displayed a false profit. This was disclosed in the auditor’s audit report.

According to the auditor, the company held provisions or reserves of Tk 568 crore 28 lakh against loans and contingent liabilities issued during the first nine months of 2024 (January-September). However, the amount of that reserve has been lowered to Tk 373 crore 41 lakh in the full-year or 12-month annual financial report. That is, the reserves have been cut by Tk 194 crore 87 lakh. As a result, decreasing those reserves has increased profits. But there has been no improvement in the recovery of the loans given by the company.

According to Bangladesh Bank directives dated April 29, Al-Arafah Bank required a reserve of Tk 635.84 crore for loans, off-balance sheet, and other reasons. However, the bank has accumulated Tk 237.11 crore for these reasons. In this scenario, the reserve deficiency amounts to Tk 398.72 crore.

The auditor stated that Bangladesh Bank informed the bank, in a letter dated May 21, that it would be unable to pay dividends owing to the business slump. However, the bank’s financial accounts indicate a profit of Tk 74.42 crore. However, if the bank had established full reserves instead of profit, it would have lost Tk 391.28 crore.

It’s worth noting that Al-Arafah Islami Bank, which went public in 1998, has a paid-up capital of Tk 1,151.69 crore. Investors from various stock market classes (excluding entrepreneurs/directors) own 84.89 percent. On Sunday (June 15), the company’s share price stood at Tk 17.40.