Union Bank PLC has reported a record loss of Tk 25,794 crore for the financial year ending 31 December 2024 — the highest-ever loss recorded by any single bank in Bangladesh.
According to the price-sensitive information published on the Dhaka Stock Exchange (DSE) website on Tuesday, the bank’s loss per share has risen to Tk 248.91, compared to Tk 2.82 a year earlier. As a result, the bank’s net asset value per share has dropped to a negative Tk 237.44.
Large-Scale Irregularities Behind the Crisis
A Bangladesh Bank report indicates that around Tk 28,000 crore was disbursed from Union Bank in the form of loans issued under various names. The central bank’s findings suggest that several former senior officials, including members of previous management, were involved in approving and facilitating these loans without proper scrutiny.
Some officials reportedly left the country following the change in government, while others connected to the irregular loan activities still remain under investigation.
98% Loan Default Rate
The massive withdrawal of funds has left Union Bank with nearly 98% non-performing loans, placing the institution in a severe liquidity crisis. Due to the shortage of recoverable assets, the bank has struggled to return deposits to its customers.
Union Bank is also burdened with liabilities related to short-term deposits received from other banks and institutions, putting further pressure on its financial stability.
Bangladesh Bank Steps In
Following the financial collapse, Bangladesh Bank dissolved the bank’s previous board and appointed an administrator as part of a broader restructuring initiative. Union Bank is one of the institutions being considered for merger under the central bank’s five-bank consolidation program aimed at stabilizing the sector.
Bangladesh Bank has also provided liquidity support at various times to help the bank continue operating, although the recovery process remains slow.
Depositor Refund Process Begins
According to central bank officials, steps have been initiated to refund general depositors’ money. Initially, refunds will be made for accounts with balances up to Tk 200,000. A formal notification (gazette) detailing the full refund mechanism will be issued later.
Record Loss in Banking History
Industry insiders note that this is the largest-ever loss reported by any individual bank in Bangladesh. Following the declaration of the bank as non-operational earlier this month, the DSE suspended trading of Union Bank shares until further notice.
