What is the ruling on the profits resulting from the previous transaction, given that the loss is greater than the profit?

The questioner : We entered into several commercial transactions of this kind in the past; some yielded profits and some yielded losses, and the total of the losses and profits resulted in a net loss. So the question now is: do we get rid of the profits we made, where the loss is greater than them, by giving them away as charity or something like that, or do we simply stop working in this type of trade and have no realized profit at all?

The Shaykh : Your question now contains two questions.

The questioner: Yes.

The Shaykh : Is that so?

The questioner : By Allah, perhaps...

The Shaykh : No, certainly, and I will separate the two questions for you from your words. The first question is that you made a profit and suffered a loss. The second question is: should you stop dealing in this type of transaction? The answer is yes, you must stop dealing in this type of transaction. And the answer to the first matter is that the profit you made is riba (usury or interest), and its expiation is not the loss you suffered. Rather, you must give away that profit, which is riba, and spend it on public facilities, not give it as charity to people, even if they are poor and needy. This is the answer to your two questions. First, you should stop this type of dealing, and second, it is obligatory for you to give away those profits and spend them on public facilities, not on specific individuals among the poor and needy. I hope the answer was also clear?

The questioner : Yes, it was also clear.

The Shaykh : Is there anything else?

The questioner : May Allah reward you with good, O our Shaykh. In another simple question...