Introduction to Mercantile Bank Ltd.

Mercantile Bank Limited was incorporated in Bangladesh as a public limited company with limited liability
under the Bank Companies Act, 1991 on 20 th May 1999 and commenced commercial operation on 02 June
1999. MBL now is one of the most renowned banks in the private sector. The commercial banking activities
of the Bank are encompasses a wide range of services including accepting deposits, making loans,
discounting bills, conducting money transfer and foreign exchange transactions, and performing other
related services such as safe keeping, collecting, issuing guarantee, acceptances and letters of credit.
Mercantile Bank Ltd. is committed to provide high quality services to its constituents through different
financial products and profitable utilization of fund and contribute to the growth of GDP of the country by
financing trade and commerce, helping industrialization, boosting export, creating employment
opportunities for the educated youth and encouraging micro-credit leading to poverty alleviation and
improving the quality of life of the people and thereby contributing to the overall socio-economic
development of the country.

Corporate Information
Date of Incorporation                       : 20th May 1999
Inauguration of 1st Branch                : 02 June 1999, Main Branch, At Dilkusha.
Commencement of Business             : 02 June 1999
Authorized Capital                            : Tk. 1,200.00 million
  Paid-up Capital                                : Tk. 999.26 million
Capital Adequacy                             : 10.39 % (Tier-I: 9.29%, Tier-II: 1.10%)
  Deposit             : Tk. 25,727.43 million
  Investment                                      : Tk. 3,517.68 million
Export Business                               : Tk. 24,108.57 million
  Import Business                               : Tk. 33,271.90 million (14,852 letter of credit)
Foreign Remittance                          : Tk. 679.10 million
Number of Branches                        : 29
Number of Shareholder                    : 5,199 (Sponsors 53.04%, FI’s 11.44%, General Public 33.10%)
Manpower   : 663
Banking apps : Q-cash
Website : www.mblbd.com

Vision, Mission, Objectives & and Core Values

Vision Statement: Would make finest corporate citizen.

Mission Statement: Will become most caring, focused for equitable growth based on diversified
deployment of resources, and nevertheless would remain healthy and gainfully profitable bank.

Objectives

Strategic objectives:

1. To achieve positive economic value added (EVA) each year.

2. To be market leader in product innovation.
3. To be one of the top three financial institutions in Bangladesh in terms of cost efficiency.
4. To be one of the top five financial institutions in Bangladesh in terms of market segments we serve.
 Final Objectives: To achieve a return on shareholder’s equity of 20% or more, on average.

Core Values

For the customers: Providing with caring services by being innovative in the development of new banking
products and services.

For the shareholders: Maximize wealth of Bank.

For the employees: Respecting worth and dignity of individual employees devoting their energies for the
progress of the Bank.

For the community: Strengthening the corporate values and taking environment and social risks and reward
into account.

Organizational Goals

Expanding network
Investing in people and technology
Allocating funds to maximize returns
Shouldering corporate social responsibility
Instituting best corporate governance practices
Implementing Basel II in due course

Capital

The authorized share capital of Mercantile Bank Ltd. was Tk. 800.00 million when the bank started its
operation. The paid-up capital of the bank was Tk. 245.00 million. Now at the end of year 2005 authorized
capital is raised to 1200.00 million (12,000,000 ordinary shares of Tk. 100 each) and the paid up capital Tk
999.27. The Bank went for issue of shares on Octover, 2003 and its shares are listed with both Dhaka Stock
Exchange and Chittagong Stock Exchange. During 2004, 7,994,125 ordinary shares of Tk. 100 each were
issued; up to year 2006 9,992,656 ordinary shares were issued, subscribed and fully paid up.

Particulars of Fully Paid-up Share Capital:

No. of Shares (%)

Sponsor 5,542,594 55.46
Financial Institutions 1,142,722 11.44
General Public 3,307,340 33.10

Comparative position of Capital Structure of last 3 Years given below:

Year(Taka In Millions)
Particulars
2015 2016 2017
A. Core Capital
  a) Paid-up Capital 1,199.12 999.26 799.41
  b) Statutory Reserve 625.21 532.55 391.88
  c) Retained Earnings 138.89 251.69 205.38
  d) Dividend Equalizations Fund 45.68 45.68 45.68
    Sub Total 2,008.90 1,829.18 1,442.35
B. Supplementary Capital
  e) General Provision 275.80 214.34 173.14
  f) Exchange Equalization Account 2.32 2.32 2.32
    Sub Total 278.12 216.66 175.46
Total Capital 2,287.02 2,045.85 1,617.81

  Performance Record of MBL 

MBL is showing a very excellent growth in mobilizing deposit, making loans and advances and in export-
import businesses. The growth in deposit mobilization is due to introduction of a number of attractive
deposit schemes for the small and medium savers. The percentage of non-performing loan (NPL) become
steady around 4.10 % for the last three years, this ratio is acceptable in the context of overall banking sector
performance. Bank has made full provision required for the NPL.

Financial Data from 2013 to 2018 is given below:

YEAR &(Taka In Millions)

Particulars
2013 2014 2015 2016 2017 30.06.18 (P)
Authorized Capital 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00
Paid-up Capital 276.85 319.77 639.53 799.41 999.27 1199.11
Total Equity (Tier-I) 527.18 593.10 1,129.77 1,442.35 1,829.19 2,008.90
Total Capital (Tier-I & II) 596.44 684.56 1,235.23 1,617.81 2,045.85 2,072.68
Total Deposit(including bill
12,234.70 15,150.42 16,285.19 22,385.19 25,727.43 27,986.67
payable)
Total Loans and Advances 6,707.42 8,896.19 10,775.95 17,669.29 21,857.05 26,228.63
Non-performing loans
5.16 37.49 444.02 726.17 905.74 –
(NPL)
% of NPL of total loans and
0.08% 0.42% 4.12% 4.11% 4.14% –
advances
Provision for classified loans 1.30 12.30 145.30 342.80 523.00 –
Total Foreign Exchange
23,033.90 26,986.10 36,105.40 46,407.50 58,059.57 39,502.90
Business
a) Import 12,268.00 15,112.50 20,380.80 28,325.20 33,271.90 21,876.80
b) Export 10,457.50 11,377.30 15,250.60 17,411.00 24,108.57 16,341.80
c) Remittance 308.40 496.30 474.00 671.30 679.10 1,284.30
Return on Equity 43.58% 40.05% 22.49% 21.91% 21.12%
No. of Foreign
145 215 240 255 266 –
correspondents

Operating Results

The Bank earned handsome amount of profit every year since it’s commence its business. Net profit before
tax of the Bank as on 31st December 2005 was Taka 386.83 million as against Taka 312.58 million during
the preceding year. In the last five months of the current year bank have earned Tk. 229.68 million (if
annualized Tk. 459.36 million) after tax profit. If the same trend continues for the rest of the year bank
would earn Tk. 459.36 million. The chart below shows how different parameters of income statement
changed over the years.

Analysis of income at different periods

YEAR & (Taka in Millions)

  2011 2012 2013 2014 2015 2016 2017 30.06.18
Interest
86.18 490.85 964.59 1281.19 1588.67 2120.82 2720.38 1532.58
Income
Interest 62.47 364.95 700.99 923.11 1115.82 1509.00 1987.16 1224.74
 Expense
Net income 23.71 125.90 263.60 358.08 472.85 611.82 733.22 307.84
income 28.65 178.40 304.31 311.11 401.05 596.85 752.13 697.50
expense 32.21 112.17 163.75 207.95 298.58 386.91 518.12 313.95
Profit Aft.
6.88 97.06 214.96 256.54 215.91 312.58 386.83 229.68
Tax

Branch Network

The number of branches of the Bank stood at 31 at the end of 2017 of which 22 branches are located at
major trade centre’s

 Human Resources Development

The Bank Believes in professional excellence and considers its working force as its most valuable asset and
basis of its efficiency and strength. So The Bank has set up Training institute for providing training facilities
to its executives/officers.

Manpower Position Of Last 6 Years

Category 2013 2014 2015 2016 2017 20

All Category 219 305 363 492 544 663
Total Branch 10 14 15 20 25 29
Per branch Employee 22 22 24 25 22 23

Risk Management

The prime objective of risk management is that Bank takes well-calculate business risks while safeguarding
the Bank’s Capital, its financial resources and profitability from various risks.

MBL and Social Responsibility

As corporate citizen MBL have already established Mercantile Bank Foundation in which the Bank
contributed 1% of operating profit or Tk. 4.00 million each year. MBL have been awarding 8 eminent
personalities of the country each year since 2002 for the outstanding contribution in their respective fields.
MBL also assists the handicapped artist, litterateur and distressed people in their medical treatment.

Information Technology

Banking operations of the branches have been computerized to minimize costs and risks and to optimize
benefits and increase overall efficiency for improved services. Bank has installed Reuters Screen for smooth
operation of foreign currency dealings. The Bank has already introduced VISA debit and credit cards.

Conclusion

Mercantile Bank Ltd. is one of the most potential Banks in the banking sector. It has a large portfolio with
huge assets to meet up its liabilities and the management of this bank is equipped with the expert bankers
and managers in all level of management. MBL is able to quickly adapt with the changes in the
environment. The financial performance over the year was also very sound. There every possibility that this
progress of MBL will continue and could overcome its limitation to produce good result in future

Source: 1. https://en.wikipedia.org/wiki/Mercantile_Bank_Limited,_Bangladesh
2. http://www.mblbd.com/home/about