ICB marks 50 years with a plan to ease debt pressure and rebuild its finances
Bdbusinessdaily.com – The Investment Corporation of Bangladesh is entering its 50th year with a recovery strategy designed to address severe liquidity strain, large accumulated losses and an increasingly costly debt burden. The state-owned institution, long associated with industrial financing and the development of Bangladesh’s mutual fund sector, is preparing short-, medium- and long-range measures to restore financial stability.
The proposed roadmap is expected to be presented at ICB’s golden jubilee programme today. Finance Minister Amir Khosru Mahmud Chowdhury, senior government representatives and capital market regulators are scheduled to attend the event.
ICB’s financial position has deteriorated during an extended period of weakness and volatility in the capital market. Lower capital gains and dividend returns have reduced income, while the expense of servicing bank loans has expanded sharply. What was once a profitable public institution that contributed to government revenue is now facing a substantial financial turnaround challenge.
Losses and borrowing have climbed sharply
Financial statements show that ICB’s accumulated loss reached Tk1,608 crore by March 2026. This figure includes a record Tk1,213 crore loss in FY25, followed by a Tk588 crore loss during the first nine months of FY26.
The institution’s borrowing has grown dramatically over the past decade and a half. Outstanding bank loans stood at roughly Tk14,000 crore in December 2025, compared with Tk2,341 crore in FY11. Over the same period, annual interest payments increased from Tk185 crore to Tk1,101 crore, placing sustained pressure on earnings and cash flow.
Its investment portfolio has also lost considerable value. Unrealised losses were around Tk5,507 crore in December, while the portfolio itself was valued at approximately Tk8,600 crore. Such unrealised losses do not necessarily become final losses unless the investments are sold, but they weaken the balance sheet and limit flexibility when an institution needs to raise funds or reduce debt.
A senior ICB official said the corporation had repeatedly borrowed from state-owned banks to invest in the market and help support it after directions from the government and regulators. The approach was intended to provide market support, but the accumulated financing cost became increasingly difficult to manage as investment returns weakened.
“This has eventually pushed ICB into a debt trap, with mounting interest costs coming at a time when market volatility has eroded capital gains, dividend income and overall revenue,” the official said.
Short-term funding proposal targets costly loans
Under the immediate phase of its recovery programme, ICB plans to seek Tk10,000 crore in low-cost funding. The institution aims to use the money to reduce liquidity stress, lower interest expenses and strengthen its overall financial position.
Of that proposed amount, Tk7,000 crore would be allocated to repaying expensive existing loans. Replacing higher-cost debt with cheaper financing could reduce the interest burden that has become one of ICB’s largest financial constraints. The remaining Tk3,000 crore would be directed toward the secondary market, where ICB expects to generate trading income.
The corporation has already received Tk4,000 crore in low-cost government funding. Part of this support has been used to settle outstanding loans, while another portion has gone into capital-market investment. The early use of the funds reflects the two immediate priorities within the plan: relieving debt pressure and maintaining participation in the market.
For ICB, the effectiveness of this stage will depend on whether lower funding costs produce enough breathing room to prevent further erosion of its financial base. Reducing interest payments may improve cash flow, but the institution will also need more dependable investment income if it is to move beyond short-term support.
Debt-to-equity conversion forms the medium-term approach
The medium-term part of the plan focuses on repairing the balance sheet through changes to ICB’s capital structure. One proposed measure is the conversion of institutional liabilities owed to state-owned banks and financial institutions into equity holdings. This would reduce the need for immediate loan repayment and shift part of the burden from debt to ownership capital.
ICB also intends to issue fixed-yield preference shares to institutional lenders. Preference shares can provide investors with a predetermined return while allowing the issuer to replace shorter-term repayment obligations with longer-term capital. In ICB’s case, the proposal is intended to reduce the mismatch between its debt commitments and the time needed for investments to recover value or produce returns.
These measures would not eliminate the underlying market risks facing ICB, but they could alter the pace and structure of its obligations. A balance sheet carrying less high-cost, short-term debt would give the institution more scope to manage investment holdings without the same degree of immediate repayment pressure.
Long-term strategy seeks a broader and more sustainable model
Over the longer term, ICB plans to diversify income, update its operations and infrastructure, and expand its investment-product offerings. The goal is to develop a business model less dependent on a narrow set of market gains and dividend flows.
The importance of that objective is clear from ICB’s recent experience. When market conditions deteriorate, an institution with heavy borrowing and concentrated exposure can face a double setback: investment income declines at the same time financing expenses continue to rise. Broader revenue sources and improved operational capacity could help reduce that vulnerability over time.
ICB’s recovery effort therefore combines financial restructuring with a proposed shift in how it generates income. The short-term programme concentrates on liquidity and interest costs. The medium-term measures seek to reshape liabilities. The longer-term agenda is intended to make the institution more resilient through modernisation and a wider range of investment activities.
As it reaches its half-century milestone, ICB faces a difficult test. Its future recovery will rest on the execution of the funding plan, the response of lenders and policymakers, and the ability of its investments to perform in a capital market that has remained under pressure. The roadmap signals an effort to move the corporation away from escalating debt costs and toward a more durable financial footing.
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