B Mirror Report: The Investment Corporation of Bangladesh (ICB) is facing mounting financial pressure, with officials warning that its operations will be difficult to sustain without immediate fiscal and policy support from the government.

According to internal assessments, the state-run investment body is trapped in a severe debt cycle, burdened by high interest payments, illiquid assets, and continued losses. ICB currently pays around 12 percent interest on borrowed funds, resulting in annual interest expenses of about Tk 10 billion nearly ten times its operating cost of Tk 1 billion.

Officials said the corporation has been unable to liquidate its investment portfolio due to a prolonged downturn in the capital market. ICB Chairman Prof Abu Ahmed noted that many previously purchased “junk stocks” have virtually no buyers, making loan repayment through asset sales unfeasible.

ICB Managing Director Niranjan Chandra Debnath said the institution cannot recover without breaking the debt cycle through government policy and financial support. He added that a combination of low-cost funding and structural reforms is essential for stabilization.

The financial strain has already resulted in record losses. In FY25, ICB posted its first-ever annual loss of Tk 12.14 billion, driven by high loan-loss provisioning, weak market performance, and heavy interest expenses. The situation has further deteriorated in FY26, with losses reaching Tk 1.54 billion in the first quarter alone.

ICB is also facing losses of more than Tk 12.05 billion due to its inability to recover funds invested in fixed deposit receipts (FDRs) with 12 troubled financial institutions, including several non-bank financial institutions and two private banks under financial stress or liquidation.

The crisis has also impacted state-owned banks such as Sonali Bank, Janata Bank, and Agrani Bank, which are exposed to ICB loans and now face higher provisioning requirements due to delayed repayments.

To address the situation, ICB is preparing proposals for the finance ministry, including a plan to convert debt owed to state entities into equity and secure fresh low-cost government funding. Officials estimate that around Tk 130 billion may be required to settle outstanding liabilities and interest payments.

Alongside financial restructuring, ICB is also planning initiatives for capital market development, following recent directives from the finance minister.

Meanwhile, the institution has begun internal reforms to strengthen governance and prevent irregularities. The current board has restricted investments to “A” category stocks with strong fundamentals and banned block trades, following allegations of past misconduct and overpriced acquisitions.

Chairman Prof Abu Ahmed said internal investigations revealed that earlier investments were often made under external pressure and through irregular dealings. He added that findings of past mismanagement will be submitted to the government as part of efforts to secure support.

Officials emphasized that without government backing, ICB’s financial recovery remains highly uncertain.