Bangladesh Mutual Funds Skip Dividends Amidst DSE Surge

Eight closed-end mutual funds in Bangladesh have withheld dividends for their unitholders for the fiscal year ending June 30, 2026. This decision comes despite the Dhaka Stock Exchange’s main index recording an 18 percent increase over the same period.

ICB Chairman Abu Ahmed attributed this primarily to significant past losses stemming from a prior market downturn and ongoing provisioning requirements.

Funds Withholding Dividends

• ICB AMCL Sonali Bank Limited 1st Mutual Fund
• SEML FBLSL Growth Fund
• Prime Bank 1st ICB AMCL Mutual Fund
• ICB AMCL Third NRB Mutual Fund
• ICB AMCL Second Mutual Fund
• IFIL Islamic Mutual Fund-1
• ICB Employees Provident MF 1: Scheme 1
• Phoenix Finance 1st Mutual Fund

Seven of these funds are managed by ICB Asset Management, with Strategic Equity Management Limited overseeing one.

Market Downturn and Provisioning

Ahmed explained that these funds were launched during a period of high stock market valuation, followed by a sharp decline that severely impacted their investment values. Despite a subsequent market recovery, the funds have not fully recouped these initial losses.

Furthermore, these entities are mandated to set aside provisions for previous losses, even when currently generating profits, which restricts dividend distribution. Ahmed acknowledged that the funds were not optimally managed during the downturn.

Waiver Request and Contrasting Payouts

In response, ICB has formally requested a one-year waiver from the provisioning requirements under IFRS 9 from the Bangladesh Securities and Exchange Commission (BSEC). Ahmed believes even a partial waiver would enable dividend payments, given the funds’ recent profitability.

Conversely, other funds have successfully declared dividends. Reliance One distributed 10 percent, while ICB AMCL First Agrani Bank Mutual Fund issued 4 percent.