Chapter 2: Overview of Mercantile Bank Ltd.

(MBL)
2.1 Background of Mercantile Bank Ltd:
Mercantile Bank Limited (MBL) was established by a group of perceptive investors of aiming
significant contribution to the financial system for sustainable economic growth of Bangladesh.
Since its inception in June 2,1999, the Bank has created a credible brand impression and achieved
its customers trust and loyalty. MBL renders customer services with evolving technology by the
cluster professionals and also working for innovative and need based banking product and services.
Public confidence is of utmost importance for the development of banking industry in Bangladesh.
Keeping that in mind, MBL ensures a culture of good corporate governance to thrive. MBL
promotes greater efficiency, accountability and transparency in its business decision. Another
crucial step of MBL is to synchronize the attitudes, belief and culture in accordance with the needs
of our human resources, clients, stakeholders and the overall financial system of Bangladesh. The
Bank serves a large customer base comprising individuals and institutions through a network of
138 branches supplemented by 162 ATMs in 51 districts and are powered by a team of 2,305
employees. The Bank holds an international credit rating of B1 with a Stable Outlook from
Moody’s. The Bank also holds a local credit rating of AA with a Stable Outlook from Emerging
Credit Rating Limited (ECRL). In addition to providing all ranges of banking services, MBL is
also providing other services through its 2 subsidiary companies,2 Off-shore Banking Units,
Internet Banking & Mobile Banking. The bank gives special emphasis on Export, Import, Trade
Finance, SME Finance, Retail Credit and Finance to women Entrepreneurs. To provide clientele
services in respect of International Trade it has established wide correspondent banking
relationship with local and foreign banks covering major trade and financial centers at home and
abroad. With the passage of time it has expanded its number of branches and variety of services
along with its core business of taking deposits and granting loans. Rising trend of the bank’s
profitability over the last 13 years is also materialized. The MBL is committed to the delivery of
the superior shareholders’ value.
MBL is running with the “efficiency is our strength” and their logo holds a remark” Banglar Bank”.

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2.2 Corporate Profile
Mercantile Bank Limited incorporated as a public limited company on May 20, 1999.
Subsequently, it commenced business on June 02, 1999 to carry out all kinds of banking businesses
in and outside Bangladesh. MBL enlisted in Dhaka Stock Exchange (DSE) and Chittagong Stock
Exchange (CSE) on February 16, 2004 and February 26, 2004 respectively. MBL is the output of
some visionary entrepreneurs’ dream of contributing directly to the economy by catering various
banking needs to all segments of people living home and abroad.

Registered Name Mercantile Bank Limited

Legal Status Public Limited Company
Incorporation No. C-37775 (2075)/99
Bangladesh Bank License No. BL/DA/6289/99
Date of Incorporation May 20, 1999

Date of Commencement of Business June 02, 1999

Registered Head Office 61, Dilkusha Commercial Area, Dhaka-1000, Bangladesh

Swift Code MBLBBDDH
Telephone 880-2-9559333, 9553892
Fax 880-2-9561213
Website www.mblbd.com
Contact Center 16225
Credit Rating (Local) AA
Credit Rating (International) B1
Accounting Year End December 31
Syful Shamsul Alam & Co., Chartered Accountants
Auditor
Ahmed Zaker & Co., Chartered Accountants
Tax Advisor K M Hasan & Co., Chartered Accountants

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2.3 Vision, Mission & Values
2.3.1 Vision:
Would make finest corporate citizen.

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

2.3.3 Core values

1. Customer delight: Customer satisfaction pervades all our activities. We appreciate that
Customer’s satisfaction is critical for our success.
2. Innovation: Spurring innovation for reinforcement of our business. Origination and
materialization of change management for attainment of perfection and we believe change
is always constant.
3. Ethical Values: We continue to be responsible, ethical, sincere and transparent in our
thoughts and actions.

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 4. Caring for Human Resources: Realization of latent potentialities of employees,
respecting individual worth and dignity to ensure smooth career progression as well as
welfare orientation in Human Resources management policy and practices.
5. Commitment: We always keep high on the agenda our commitment towards valued
depositors as their trustworthy custodian and to maintain the same spirit for all other
stakeholders.
6. Socially Responsible: Constant endeavor to act and respond in a socially responsible
manner keeping in mind society and our country. To care for our environment.
7. Shareholders Value: Creation and Maximization of values for our shareholders.

2.4 Strategic Objectives

 To increase shareholders’ value.
 To achieve economic value addition.
 To be market leader in product innovation.
 To be one of the top three financial institutions in Bangladesh in terms of efficiency.
 To be one of the top five financial institutions in Bangladesh in terms of market share in
all significant market segments they serve.

2.5 Strategic Framework

2.5.1 Deposits Strategies
 Quarterly basis deposit campaigns throughout the year for low cost and no cost deposit.
 Cross Selling of different products and services including retail to corporate customers.
 Taping different government agencies e.g. Foreign Missions, Ministry of Religious Affairs
for Hajj deposits, Ministry of Planning for EGP, Ministry of ICT for a2i, Roads &
Highways, LGED, Bangladesh Bridge Authority etc, and also other different corporate
houses, e.g. Foreign Air Lines, Telecom companies etc. and maintaining regular intense
social interaction with different segments of the society.
 Collections of different utility bill from DPDC, DESCO, PDB, BREB, WZPDCL, BTCL,
WASA, Titas Gas Distribution Company Ltd., Karnafhuli Gas Distribution Company Ltd,
Bakhrabad Gas Distribution Company Ltd, Sundarban Gas Company Ltd, Jalalabad Gas

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 transmission and Distribution System Ltd, Paschimanchal Gas Company Ltd, Pre-paid
meter Card recharge etc.
 Exploiting the growing rural deposit basket by setting- up smaller size low cost rural
branches.
 Offering cash management services, i.e. collection of institutional accounts.
 Collection of premium of both Life and Non-life insurances.
 Exploiting mobile banking services “MYCash” for small size deposit and utility bill
collection.
 School Banking.
2.5.2 Loans & Advances Strategies
 Focus on Good rating Company
 Remodeling on concentration of segment wise loan.
 Focus on retail business
 Backward linkage industries to be targeted to provide a good source of SME business
through availing the benefit of supply chain management
 New emerging sectors like ICT, Sector, Energy & Power Sector, Health care sector, Light
Engineering, Tourism Industry, Ceramic Sector, to be more emphasized
 Special attention will be given to expand SME credit portfolio to achieve relatively higher
yields and also to reduce adverse effects of large volume defaults.
 Risk Management techniques should apply to ensure strong internal control over business
operation.
 Identifying probable problem accounts through Early Warning System (‘EWS’) and taking
appropriate care of those and formulating exit plan, where necessary.
 Disbursement of loan to high yield generating business segments commensurate with
calculative risk and maintain high quality asset portfolio.
 Existing thrust sectors like agro based industries, leather, frozen food, textile industry to
be more focused
 Agri-business sectors like sugar, edible oil, wheat, rice, maze, dal, peas, Food & Beverage
to be more focused.
 Encouraging young entrepreneurs (Start-ups) through a new product “Udayan”

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2.5.3 Import & Export Strategies
 Marketing for not only established business houses but also the potential clients having
strong entrepreneurship spirit to grow.
 Arranging credit lines for foreign currency from international agencies to facilitate
international trade business particularly import clients at a competitive rate and the country
as a whole will get benefit of building foreign exchange reserve.
 Garments sector will be more focused where tested and potential clients will be in the
portfolio basket under the regime of calculative risk return trade-off. Emerging ship
building and ship breaking sectors will explore new opportunities which the Bank will tap
for increasing international trade.
 Industries having backward linkage will yield better opportunity and reduce risk exposure.
 Focusing on service export sectors like IT, Education and Health Care sector.

2.6 Organizational Goals:

Each and every organization has a goal and the goal of MBL is become top class profitable bank
in the Bangladesh. Providing the high service quality and establishing relationships it will be the
world- class organization that helps its customers to keep their money safe and grow successful. It
cans develop the appropriate management structure, system and procedures and also plan best
recruitment system, training and orientation plan.

2.7 Management Information System:

In 1999 MBL is established and it emphasizes on the use of improved technology. It started the
online operating system and new banking software flexible under the new developing process. For
that MBL is giving international standards services. And now they use the Dubai based software
which help to fastest banking system in the world.

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2.8 Features of Mercantile Bank Ltd
There are so many reasons behind the better performance of MBL than any other newly established
banks:

 Highly qualified and efficient professionals manage the bank.

 MBL has established a core Research & Planning Division with efficient persons.

 The computerized operation systems in all branches of MBL have provided the frequent
and prompt customer service.
 The strict leadership along with the supervision of efficient management directs all the
Branches.
 The inner environment and teamwork, of all branches in MBL motivated all.

 MBL has become a member of the SWIFT system expedite foreign trade transaction.

 MBL has become introduced some scheme for the purpose of saving of low-income
people which are not available in other banks like ―Family Maintenance Deposit
(FMD), ―Personal Loan Scheme, ―Car Loan Scheme etc.
 The bank offers attractive saving rate than other financial institutes.

 MBL provides loan to the customers at lower interest with easy and flexible condition
than the others do.
 The Bank is always guided their potential customers by giving valuable advises.

2.9 Future Orientation

Future Orientation:
The curtains are falling on the year 2018 and for our economy it was yet again a roller coaster ride
of achievements and disappointments. The year 2019 would be characterized by ample
opportunities and challenges ahead.

Major Challenges:
1. Overall spread in banking industry narrowed down in 2018. If the trend continues, the
profitability of the bank may reduce.

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 2. Bangladesh has been ranked 176th according to ‘Doing Business Report’ conducted by the
World Bank in 2018 compared to 177th in 2017 which may create negative impression for
local and foreign investors.
3. For much of the last decade, igniting private investment and job creation, has remained one
of the toughest challenges for policymakers.
4. The challenge of cracking down on loan defaulters will remain a big one in 2019.
5. Fierce competition for new banks

Opportunities:
1. For starters, Bangladesh is well on its way to graduating out of the United Nation’s LDC
status and entering the league of developing countries in 2024.
2. Inflation remained comfortably below 6 percent while GDP growth was recorded at a
whopping 7.9 percent, driven primarily by the manufacturing sector.
3. Remittance inflows, which suffered in the recent past, rebounded strongly in FY2017-18
growing by 17.3 percent, helping keep foreign exchange reserves well above USD 30
billion.
4. Bangladesh exports will be significantly increased due to the US-China trade war.
5. Bangladesh could be able to tap huge amount of foreign direct investment (FDI), especially
in the special economic zones.

2.10 Achievements
May 20, 1999 Incorporation of the Bank
June 02, 1999 Commencement of Business
October 29, 2000 Opening of 10th Branch
July 03, 2002 Opening of 15th Branch
June 30, 2003 Publication of Prospectus for IPO
October 21-22, 2003 Subscription for Shares
December 24, 2003 Opening of 20th Branch
February 16, 2004 Listed in Dhaka Stock Exchange

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February 26, 2004 Listed in Chittagong Stock Exchange
December 29, 2004 Opening of 25th Branch
December 05, 2006 Opening of 30th Branch
December 17, 2007 Opening of 40th Branch
November 24, 2008 Opening of 42nd Branch
June 06, 2009 Mercantile Bank Brokerage House
Operation
October 22, 2009 Opening of 45th Branch
December 30, 2009 Opening of 50th Branch
August 02, 2010 Opening of 55th Branch
December 30, 2010 Opening of 65th Branch
September 14, 2011 Seperate Operation of Mercantile Bank
Securities Ltd. (MBSL)
December 06, 2011 Mercantile Exchange House (UK) Limited
December 29, 2011 Opening of 75th Branch
September 20, 2012 Opening of Mercantile Exchange House
(UK) Limited, London Branch
December 27, 2012 Opening of 86th Branch
December 29, 2013 Opening of 91th Branch
December 29, 2014 Opening of 100th Branch
December 31, 2015 Opening of 109th Branch
December 22, 2016 Opening of 119th Branch
December 28, 2017 Opening of 129th Branch
December 27, 2018 Opening of 138th Branch

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2.11 Products & Services of Mercantile Bank
MBL has launched a number of financial products and services since its inception. These products
and services are categorized in five sectors i.e. Retail Banking, Corporate Banking, SME Banking,
Foreign Trade Business & E-banking.
2.11.1 Deposit Products
 Current Deposit (CD) Accounts
 Savings Bank Deposit (SB) Accounts
 Special Notice Deposit (SND)
 Fixed Deposit Receipt (FDR
 Scheme Deposits
 Monthly Saving Scheme (MSS)
 Double Benefit Deposit Scheme (DBDS)
 Family Maintenance Deposit Scheme (FMDS)
 Quarterly Benefit Deposit Scheme (QBDS)
 1.5 Times Benefit Deposit Scheme (1.5TBDS)
 Advance Benefit Deposit Scheme (ABDS)
 Education Planning Deposit Scheme (EPDS)
 Super Benefit Deposit Scheme (SBDS)

 School Banking

2.11.2 Loans & Advances

Retail Loans

 Home Loan

 Cottage Loan

 Car Loan

 Personal Loan

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  House Furnishing Loan

 Doctor’s Loan

 Education Loan

 Secured Over Draft (SOD)

 Refinance Scheme for Green Product/Initiatives

 Krishi / Polli Loan

Corporate Loans
 Short Term Finance
 Long Term Finance
 Real Estate Finance
 Import Finance/Trade Finance
 Work Order Financing/Construction Business
 Earnest Money Financing Scheme- SOD (EMF)
 Bid Bond
 Performance Guarantee (PG)Advance Payment Guarantee (APG)Shipping
Guarantee
 Customs Guarantee
 SOD (WO)
 Export Finance (Pre-Shipment Credit/Finance)
 Export Cash Credit (Hypothecation /Pledge)
 Export Cash Credit Against Trust Receipt
 Advance Against Anticipatory Letter of Credit
 Back to Back Letter of Credit
 Packing Credit
 SOD (Export)
 Post-Shipment Credit/Finance

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  Negotiation of Export Documents (FDBP)
 Purchase of Documents against DP or DA Bills
 Structured Finance
 Project Finance
 Syndication
SME Financing
 CHAKA (Term Loan)
 SAMRIDDHI (Continuous Loan)
 MOUSUMI (Short Term Seasonal Loan)
 ANANNYA (Women Entrepreneur’s Loan)
 SANCHALOK (A mix of Term, Time & Continuous Loan)
 UNMESH (Trade Finance)
 UDAYAN (Start-up financing for the young entrepreneurs)
 FACTORING OF RECEIVALBES

Agriculture Loan
 NABANNO (Krishi / Polli Loan)
 SHAKTI (ETP / Bio-Gas / Solar Energy Loan)

2.11.3 MBL Card

 Debit Card
 Credit Card (Local Card, International Card, Dual Currency Card)
 MBL Pre-Paid Card (Student Card, Hajj Card, Travel card)

2.11.4 Other Services

 Online Banking
 Mobile Banking (MyCash)
 Internet Banking
 Off-Shore Banking
 NRB Banking

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 SMS Banking
 Locker Service
 Utility Bills Pay Service
 ATM Booth Services
 Cash Deposit Machine (CDM) Service

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