Islami Bank, a publicly listed company on the stock market, has come under regulatory scrutiny for allegedly reporting artificial profits in 2024 by not setting aside the required provisions for its operations. By doing so, the bank has triggered a legal obligation to distribute dividends, which it failed to fulfill—putting it at risk of penal action.

Despite showing profits, Islami Bank’s board has decided not to declare any dividend for shareholders. Instead, they plan to retain 100% of the profit as retained earnings. As per the rules, this move attracts an additional 10% tax on the retained profit.

According to the 2018–19 budget provisions, listed companies must distribute at least 30% of their profits as dividends. If a company fails to do so, it must pay a 10% tax on the entire retained amount.

In 2024, Islami Bank posted a net profit of Tk 109.48 crore, which translates to Earnings Per Share (EPS) of Tk 0.68. Despite this, the bank declared no dividend, meaning the entire profit will go into retained earnings. As a result, Islami Bank now faces an extra tax liability of Tk 10.95 crore (10% of retained profit).

Notably, the bank’s profit in 2024 dropped by 83% compared to the previous year. In 2023, its EPS was Tk 3.95, which plummeted to Tk 0.68 in 2024.

Islami Bank was listed on the stock exchange in 1985. Its paid-up capital stands at Tk 1,609.99 crore, with 99.81% of shares held by general investors (excluding sponsors/directors). As of Wednesday, October 1, the bank’s share price stood at Tk 41.20.