Padma Life fund deficit deepens to Tk327cr as financial distress persists

The insurer posted a deficit of Tk8.51 crore in its life revenue account during January-June 2026.

Padma Islami Life Insurance’s life fund deficit widened to Tk327.20 crore as of 30 June 2026, highlighting the insurer’s fragile financial position and keeping its stock in the “Z” category.

According to a price-sensitive statement filed with the Dhaka Stock Exchange today (30 August), the insurer posted a deficit of Tk8.51 crore in its life revenue account during January-June 2026, a significant improvement from the Tk15 crore deficit recorded in the same period a year earlier.

Despite the narrower six-month deficit, the insurer’s cumulative losses continued to erode its life fund, pushing the balance further into negative territory. The life fund deficit stood at Tk327.20 crore at the end of June 2026, compared with Tk307 crore a year earlier.

The insurer’s financial performance also remained under pressure in the April-June quarter. During the three months, expenses and claims exceeded income by Tk3.56 crore, although this was lower than the Tk6.53 crore deficit recorded in the same quarter of the previous year.

The continued deterioration in the insurer’s financial position also weighed on investor sentiment. Padma Life’s share price fell 2.35% to Tk16.60 on Sunday.

The company’s weak financial position has also kept shareholders from receiving returns. Its board has recommended no dividend for 2025, meaning the insurer will make no distribution to shareholders for the year.

Padma Life has not paid any dividend since 2021, when it declared a 2% cash dividend.

The insurer, which was listed on the Dhaka Stock Exchange in 2012, saw its financial position deteriorate sharply after S Alam Group took over the company in 2018. Since then, mounting deficits, persistent financial weakness and governance concerns have pushed the insurer into the “Z” category.

The company is scheduled to hold its Annual General Meeting on 17 September at Padma Life Tower in Dhaka, where shareholders will consider the company’s financial performance and the board’s dividend recommendation.

Source: The Business Standard