B Mirror Report: Listed private lender One Bank PLC could have posted a massive loss in 2025 instead of the reported profit if it had recognized required loan-loss provisions in line with Bangladesh Bank regulations, according to observations made by its external auditor.
In its audit report for the year ended December 31, 2025, Mahamud Sabuj & Co., Chartered Accountants, through partner Modassar Ahmed Siddique FCA, highlighted four key concerns under an “Emphasis of Matter” paragraph.
One Bank reported a net profit after tax of Tk 216.8 million, shareholders’ equity of Tk 23.37 billion, earnings per share (EPS) of Tk 0.20, and net asset value (NAV) per share of Tk 21.92 for 2025.
However, the auditor noted that the bank did not recognize the required Tk 39.03 billion provision against loans and advances, as stipulated under applicable Bangladesh Bank BRPD circulars.
According to the auditor, had the full provision been recognized, the bank’s reported profit would have turned into a net loss of Tk 33.40 billion. Shareholders’ equity would have declined from Tk 23.37 billion to a negative Tk 10.25 billion, after considering a deferred tax asset adjustment of Tk 5.41 billion.
Similarly, EPS would have fallen from Tk 0.20 to negative Tk 31.34, while NAV per share would have dropped from Tk 21.92 to negative Tk 9.62.
The bank’s financial statements disclosed that, under a letter issued by Bangladesh Bank on April 30, 2026, recognition of the Tk 39.03 billion provision was temporarily suspended.
The auditor further warned that if the required provision had been recognized, One Bank’s equity would have fallen below the minimum paid-up capital requirement of Tk 5 billion under the Bank Company Act, 1991 (amended up to June 15, 2023), putting the bank below the legal minimum capital threshold.
The audit report also raised concerns regarding loan classification and provisioning practices. Under Bangladesh Bank’s BRPD Circular No. 15 dated November 27, 2024, banks may classify loans more conservatively based on qualitative assessments and must transfer accrued interest on substandard and doubtful loans to an Interest Suspense Account rather than recognizing it as income.
According to the auditor, One Bank kept certain loans and advances in the unclassified category despite indicators suggesting they warranted adverse classification. As a result, interest income from these loans was recognized in earnings instead of being transferred to suspense accounts.
The auditor said the precise amount of such interest income could not be determined because necessary information was not provided by the bank. Nevertheless, it estimated that the amount could run into several hundred crore taka, implying that reported interest income, profits and shareholders’ equity may have been materially overstated.
The auditor also objected to the bank’s capital adequacy ratio (CAR) disclosures. Under BRPD Circular No. 18 of December 21, 2014, banks are required to maintain a minimum total capital ratio, including the capital conservation buffer, of 12.50 percent on both solo and consolidated bases.
At the end of 2025, One Bank reported a CAR of 11.12 percent on a solo basis and 11.33 percent on a consolidated basis, both below the regulatory minimum.
While maintaining an unmodified audit opinion, the auditor drew the attention of investors, regulators and stakeholders to these issues, raising serious questions about One Bank’s actual financial condition, provisioning practices, loan classification and capital adequacy.
