Mercantile Bank maintains good reputation amid turmoil

The banking sector is currently going through one of its worst times. People are suffering, with some even failing to withdraw their own money, causing immense distress.

However, Mercantile Bank stands as an exception in this situation, according to Mati Ul Hasan, the managing director of the private lender.

"Mercantile Bank has been able to maintain its reputation in this situation. People still have trust in us. We are able to repay depositors on time," Hasan said in an interview with The Daily Star.

The private commercial bank is going to celebrate its 26th anniversary today.

"We have around 200 branches and sub-branches. At no point have we heard of any of our branches facing issues where a depositor was affected, and that is a significant achievement."

Mercantile Bank was established on June 2, 1999. Now the lender offers banking services through a total of 152 branches and 47 sub-branches, 200 ATM booths, and 188 agent banking outlets.

The lender is conducting correspondent banking with 618 foreign banks. Till December of last year, total deposits at the bank stood at Tk 34,272.42 crore, while advances and loans amounted to Tk 30,002.51 crore.

Mentioning the bank's lending strategy, the managing director said its focus is to gradually shift from corporate lending to small and medium enterprises.

"At present, SMEs account for 13 percent of our loans, and we aim to increase it to at least 25 percent by 2025. In addition, our focus on retail has been relatively low, but we are also planning to expand in that area."

In 2024, loan disbursement to SMEs and agricultural sectors increased by 121.5 percent and 22.5 percent respectively compared to 2023. Mentioning the previous year's performance, he said there was growth in deposits, but lending was intentionally kept a bit low.

"This was a planned decision to ensure that we had the capacity to absorb both external and internal economic shocks. In that context, our foreign trade business remained stable. Although there was a temporary US dollar crisis, we managed to overcome it."

Speaking about challenges faced by the bank, Hasan said there is pressure on everyone given the current circumstances. He added that it could be noticed through both qualitative and quantitative judgment.

"We were more or less able to manage the quantitative judgment, but this year, what has happened is that the qualitative judgment has put pressure on us," the Mercantile Bank MD said.

"Many loans are being classified as 'by name, by identified quality' -- which implies there is risk involved -- and we are required to keep provisions against those. However, we have not issued any loans that are unidentified."

Following the political transition in August last year, the business environment has seen a shift towards reforms aimed at promoting transparency, democratic processes, and improving the overall climate for businesses.

Mercantile Bank was established on June 2, 1999. Now the lender offers banking services through a total of 152 branches and 47 sub-branches

Addressing technological development and digital banking, Hasan said the bank's biggest asset is that it has the latest software from the United Kingdom.

He said this is a major asset because, in the future, as banking becomes more software-driven and digital, the bank will be capable of launching any new product digitally, he added.

"Many banks have started offering nano loans through mobile financial services like bKash, and we are also trying to develop such products. Ultimately, banking is heading in that direction — and that's where it's going."

Mentioning popular products for the new generation, he said the bank has a good product specifically designed for startups.

"For example, if someone finishes their studies and wants to do something as an entrepreneur -- if I see that the person has determination, some form of security, innovation, and a solid idea -- we provide them with loans of up to Tk 25 lakh."

He added that the bank is offering financing options for those involved in outsourcing or IT freelancing. Anyone can apply and there is no collateral required.

However, they must have relevant education, certifications, and the necessary capacity or skills. "This is a great opportunity for the new generation," he said.

"We have a product called 'Rainbow', through which 16 types of services can be provided. You can get these services from home. This is something unique to our bank.

"So, one of our market assets is that we have all types of products. Every product that exists in the Bangladeshi banking industry — we have it. In terms of digitalisation, if you look at the top five banks leading in digitisation and compare their products with ours, you'll see that we have products of the same standard."

Mercantile Bank promotes financial inclusion through several avenues, including digital banking platforms, agent banking, and sub-branch services, aiming to bring unbanked individuals into the formal financial system.

"We also focus on specific initiatives like 'MBL Nari Sanchaya Prokolpo' for women and SME financing. In 2016, Mercantile Bank established the 'Financial Inclusion Department' under the Agriculture Credit Division."

The private commercial bank is also focusing on agent banking and offers Islamic banking products.

"We have different wings and one main branch dedicated to Islamic banking. Through this main branch, we can offer Islamic products and services to any branch across the country. This is an advantage — any person from the market can now access Islamic banking facilities.

"We have all types of products in our basket so that people can benefit from them. Our goal is to ensure that our services reach people even in the most remote areas.

"All the products of Mercantile Bank are doing well, and the bank is now trying to reduce system costs.

"One of our advantages — our plus points — is that our board does not interfere in management operations. I still believe that our bank's board members want the bank to remain secure and stable."

The bank received the 23rd ICAB National Award, the "Elite Quality Recognition Award 2021" from J.P. Morgan, the lender's "MBL MyCash Limited" was awarded the "Most Loved Brand Award" by Bangladesh Brand Forum, and it was also recognized as a large taxpayer institution by the Large Taxpayer Unit of the National Board of Revenue.