Union Bank’s Tk 25,794 Crore Loss Marks a Historic Collapse

Union Bank PLC, once tightly controlled by the scandal-ridden S Alam Group, has posted an alarming loss of Tk 25,794 crore for 2024, marking the single largest annual loss ever recorded by any bank in Bangladesh. Analysts are describing this as a catastrophic collapse, with years of hidden bad loans and financial mismanagement finally coming to light.

The audited figures released today reveal that the loss has pushed Union Bank’s net asset value (NAV) deep into negative territory, effectively wiping out nearly all of its shareholders’ equity. This financial meltdown raises serious questions about the bank’s ability to remain solvent, with experts warning that it may soon face bankruptcy.

The loss per share for 2024 surged to Tk 248.91, a dramatic rise from just Tk 2.82 in the previous year. The bank’s net asset value per share plummeted to a negative Tk 237.44, which translates to a staggering Tk 24,600 crore in negative shareholder equity. In 2023, the NAV per share had stood at a positive Tk 11.66.

Banking analysts say such a negative NAV is a textbook indicator of insolvency. It means the bank’s liabilities far exceed its assets, leaving the institution unable to meet depositor obligations, even if it liquidated all of its assets.

Moreover, Union Bank’s cash flow has also suffered. Its net operating cash flow per share fell to a negative Tk 22.09, representing a sharp decline of almost 80 times compared to the previous year. This negative cash flow suggests that the bank is haemorrhaging cash due to high interest expenses, deposit costs, and administrative overheads.

Union Bank has yet to publish its full audited annual report for 2024, but its quarterly disclosure for September 2024 revealed outstanding loans of Tk 27,876 crore and total liabilities of Tk 28,718 crore.

Humayun Kabir, the bank’s former managing director, who joined in March 2025 but later resigned after an administrator was appointed, revealed that during his tenure, non-performing loans exceeded 97%. He noted that the massive provisioning required may have led to the record-breaking loss, although he declined to comment on the final audit result.

In a statement, Mohammad Abul Hashem, the administrator appointed by Bangladesh Bank, confirmed that the actual loss had been identified following the necessary provisions against bad loans and investments, as the bank is set to merge with others.

The Crisis Unfolds: Hidden Lending Exposed

The true scale of the collapse became evident after the fall of the Sheikh Hasina government in August 2024. A Bangladesh Bank investigation uncovered that Union Bank, which was licensed in 2013 under political influence, had long concealed its true financial position. It was found that the bank had been suppressing default rates artificially while channelling massive loans to S Alam Group and its affiliates.

Regulators discovered that the S Alam Group and its subsidiaries had borrowed Tk 20,634 crore from the bank through 283 companies, making up 72% of Union Bank’s total lending. Most of these loans remain unpaid, contributing to the financial disaster.

The situation worsened when the new board questioned the 2023 audit, which had falsely reported a profit of Tk 160 crore and recommended a 5% cash dividend. A subsequent re-audit revealed a loss of Tk 288 crore for the same year, exposing the extent of the financial manipulation under the previous management.

In early November, Bangladesh Bank declared Union Bank ineffective and appointed an administrator, announcing that the bank would merge with four other Islamic banks—Social Islami Bank, Exim Bank, First Security Islami Bank, and Global Islami Bank. Trading in the bank’s shares remains suspended on the stock exchange.

At a press conference on November 5, Bangladesh Bank Governor Ahsan H Mansur explained that the shares held by the sponsor directors and general shareholders of the five Islamic banks are now valued at zero. He further added that shareholders will not receive any compensation, as the net asset value of the shares has fallen to negative, with a maximum value of Tk 450 each, compared to their Tk 10 face value.

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