The external auditor of United Commercial Bank PLC (UCB) has raised serious concerns over the bank’s financial health, highlighting a provision shortfall of nearly Tk 5,595 crore and a significant capital deficit in its audit report for the year ended December 31, 2025.

According to a disclosure published by the Dhaka Stock Exchange (DSE) on Tuesday, the auditor issued a qualified opinion on UCB’s financial statements, citing inadequate provisions against classified loans and other assets.

The audit report said UCB’s total loans and advances stood at Tk 61,789.01 crore at the end of 2025, including classified loans amounting to Tk 9,576.23 crore. Against the required provision of Tk 7,679.42 crore, the bank maintained only Tk 2,524.38 crore, leaving a shortfall of Tk 5,155.04 crore.

The auditor also identified a provision shortfall of Tk 439.89 crore against other assets, including an impairment loss of Tk 438.02 crore related to UCB Fintech Company Limited, a subsidiary in which UCB holds a 99.99 percent stake.

The report noted that despite the subsidiary incurring cumulative losses of Tk 438.02 crore, no impairment loss was recognized in the bank’s standalone financial statements.

However, the auditor noted that Bangladesh Bank allowed the bank to finalize its 2025 financial statements without adjusting the total provision shortfall of Tk 5,594.93 crore.

The report further revealed that UCB faced a reported capital shortfall of Tk 2,659.64 crore against the Basel III requirement as of December 31, 2025. Had the full provision shortfall been recognized, the capital deficit would have widened to Tk 5,975.52 crore.

The auditor also said the bank’s Capital to Risk-Weighted Assets Ratio (CRAR) stood at 8.42 percent, well below the regulatory requirement of 12.50 percent. Without regulatory forbearance and after accounting for the identified provision gaps, UCB would have posted an aggregate loss of Tk 3,278.88 crore and its CRAR would have dropped to just 0.93 percent on a standalone basis.

In an emphasis of matter paragraph, the auditor drew attention to Tk 196.88 crore in fixed deposits placed with several non-bank financial institutions (NBFIs), of which Tk 155.48 crore had matured long ago and were considered doubtful of recovery. No provision was maintained against these deposits, resulting in an additional provision shortfall of Tk 155.48 crore.

The auditor nevertheless stated that its opinion was not modified in respect of the matters highlighted under the emphasis of matter section.