Kathmandu. Union Bank of India, one of the troubled banks in the country, has reported a record loss of Rs 25,790 crore for 2024. This is the highest annual loss recorded by any bank in Bangladesh.
The bank’s disclosure on the Dhaka Stock Exchange website on Monday showed earnings per share (EPS) of -248.9, up from -Rs. 2.82 in FY23. The bank had a loss of Rs 292 crore that year.
No other bank in the country has come close to this level of financial loss. Janata Bank reported the second-highest loss in the sector at Rs 3,066 crore last year, while AB Bank, National Bank and Global Islamic Bank reported losses of over Rs 1,000 crore each.
After the collapse of the Sheikh Hasina-led government in August 2024, the scale of the crisis in the banking sector became apparent. After the political shift, investigations had unearthed huge loan irregularities in banks linked to the S Alam Group owned by Saiful Alam.
As of March 2024, Union Bank accounted for Rs 25,303 crore of the country’s Rs 420,335 crore bad loans, most of which were concentrated in Chittagong.
Nearly half of the Rs 1,036 crore paid-up capital was received from general investors, the bank’s financial structure is now in disrepair. As of 2023, its deposit base stood at Rs 22,558 crore, much of which is now at risk.
This has had a serious impact on ordinary depositors.
TAG_OPEN_span_22 This is the story of the downfall of Union Bank:
}
According to a report in the Dhaka Tribune, Union Bank came under the control of the S Alam Group in 2013. The Ace Alam Group is one of the business groups that has benefited most from the government led by ousted Bangladeshi Prime Minister Shesh Hasina. In 2020, Saiful Alam’s son, Ahsanul Alam, became the chairman of the bank, making him the youngest person to hold such a post in the field. Prior to that, he served as vice president and led the bank’s executive committee.
After he took the helm, he misused bank loans extensively. He used the savings collected from the public to lend money to big companies of private interest. Most of them were loss-making companies.
After the change of government, the Bangladesh Bank ordered forensic audits with the support of the Asian Development Bank on several banks suspected of serious irregularities. A review by reputed British accounting firm KPMG exposed extreme mismanagement at Union Bank, which included a non-performing loan ratio of 97.8 per cent as of September 2024.
Later, using the Bank Resolution Ordinance 2025, the central bank proceeded to merge Union Bank with four other troubled lenders.
The banking regulator has said that the shareholders of the banks selected for the merger will not receive any compensation. Trading in shares of banks on the Dhaka Stock Exchange has been suspended. Prior to the suspension, the shares of Union Bank were last traded at Rs 1.5 per share.
