We have a very clear vision for the Mercantile Bank
Limited: to be the finest corporate citizen. This is an
enduring, long term vision. At MBL, we aspire to excel
at securing and enhancing the financial well-being of
people, business and communities. Our strategy to
achieve our long-term vision is built around a customerfocused
culture comprising people who thrive on
providing outstanding service, a strong balance sheet,
globally tested applications of technology, and a focus
on productivity and efficiency.
In 2014, Bangladesh economy could have performed
better had it not been for the lack of investorâ€™s eagerness
resulting from political uncertainty, financial scams,
a general downturn in asset quality, and rise in Nonperforming
Loans. Banks were faced with a situation
where liability growth mismatched with asset growth.
Despite these, however the economy achieved a GDP
growth of 6.12% in fiscal year 2014.
Amid this, we adopted a strategy of consolidation, by
reducing costs in various fronts including liability cost,
focusing on existing business, increase of our asset base,
managing classification of accounts to keep the growth
momentum. I am happy to share with you that despite
difficult times, the overall performance of MBL was
steady. During the year, we focused on few key financial
indicators. These are maintaining capital adequacy,
focusing on quality of assets, managing classification, recovery of non-performing loans and broadening low and
no cost deposit base. These ensured risk, return trade-off
in our banking operations. The operating profit of the Bank
edged up to BDT 4.41 billion during the year 2014, from
BDT 4.26 in 2013. The profit growth momentum bears the
testimony that despite challenges, we performed well in
terms of our financial result by achieving targets almost
in all sectors of our banking operations. We maintained
substantial reserves to strengthen the capital base of the
Bank despite continued pressure on interest margins,
exchange earnings, and provisioning requirements.
We have kept our NPL ratio at 5.10 percent through our
prudent asset quality management control and policies,
ethical business practices, and strong corporate governance.
During the year, we have emphasized on restructuring our
deposit mix with a view to keeping down the cost of fund
and at the same time grow a sustainable deposit base by
reducing dependence on price sensitive corporate deposits.
Total deposits stood at BDT 140.48 billion, Loans and
Advances at other hand BDT 117.06 billion at the end of 2014,
registering a growth of 12.77% and 19.83% respectively.
Bankâ€™s Cost of deposit reduced to 8.26% in 2014, from
8.93%. Total Shareholdersâ€™ Equity increased to BDT 13.52
billion in 2014 experiencing 7.51% growth over that of 2013.
MBL also made noteworthy contribution in facilitating Export
and Import business. During the year Exports was BDT 78.35 billion while import was BDT 107.09 billion. During
2014, Bankâ€™s inward foreign currency remittance stood at
BDT 18.21 billion, a growth of over 46%.
We continue to strengthen our capital funding and liquidity
position and we are well poised to meet future regulatory
requirements. We issued subordinate debt bond of BDT
3.00 billion, which leveraged our balance sheet and our
capital stood at 19.10 billion and Capital Adequacy Ratio
(CAR) at 12.95%.
Technological transformation was a key strategic priority
for the Bank and in 2014, we embarked on the project of
implementation of our Core Banking Solution "TEMENOS
T24"- a world class proven technology platform. We are
investing in industry-leading online and Mobile Financial
Services. Our investment in growth areas, including
Agriculture, SME, and Green Banking is rising. Our
objective is to take MBL to global standards and cater to
ever changing customer needs.
As part of Green Banking, MBL is supporting loans
to environment friendly proposals and refraining from
projects which are non-compliant. We have established
a separate Green Banking unit and various measures
have been adopted to increase investment in this sector.
Our encouragement on financing ETP or water treatment
plants in existing Textiles and Readymade Garments
continued, and we are seeking investments in Renewable
Energy and Energy Efficiency sectors.
We are continuously expanding our network across the
country for attaining geographical and demographic
dividend. At the end of 2014, we had 100 branches and
two subsidiaries i.e. Mercantile Bank Securities Limited
with 7 branches and Mercantile Exchange House (UK)
Limited at London, United Kingdom. At the end of 2014,
we have as many as 127 ATM booths and 20 Cash
Deposit Machines (CDM) at different important hubs
across the country. We intend to keep increasing the
number of branches of MBL as well other new products of
Alternate Delivery Channels across the country in 2015.
We believe that employees are key in delivering results.
We are focused on building a culture that encourages
people to be responsible and accountable, and where
leadership is demonstrated at every level of the
organization. Our training centre is well equipped and
organized where the focus is continuous learning. We
have a committed, passionate and skilled workforce and
an excellent customer base, and we are continuously
agile to the fact that we want to make every customersâ€™
experience with us delightful.
MBL believes that, true success does not consist in profit
maximization, but in doing something good for the less
privileged. With a view to fulfilling our Corporate Social
Responsibilities (CSR) activities, MBL has established a
Foundation named Mercantile Bank Foundation in 2000
to carry out various benevolent and charitable activities.
"Mercantile Bank Abdul Jalil Education Scholarship"
provides financial assistance to poor and meritorious
students across Bangladesh. On its founding anniversary
2nd June each year, MBL awards few personalities of
the society for their outstanding contribution in fields of
Education, Healthcare, Culture, Liberation War based
Research, Bengali Language and Literature, Economy
and Economic Research, Commerce and Industry,
Journalism, Sports, Agriculture based Research and Development, and Science and Technology. Financial
assistance in health sectors, assisting the victims of
natural disasters, development of sports, and distribution
of warm clothing in winter months, sponsorship programs
for the mentally and physically challenged are some of
the CSR activities which Mercantile Bank Foundation
conducts each year.
2014 was a challenging year for the banking industry of
Bangladesh, and hopefully 2015 will be an active year
for the business and economy. The Banking industry is
becoming increasingly competitive. Modern and hi-tech
business is replacing conventional banking. Banks are
handling similar financial products. Hence, customer
delight, differentiation in products and delivery, efficient
management and meaningful governance will make the
difference in achieving sustainable growth and remaining
ahead of competition.
In this ever changing competitive environment we will
pursue a strategy to give what the customer wants, to
manage risks particularly credit risk, maintain strong
capital and liquidity, and manage costs at optimum levels.
All these will drive progress. We hope to curve our niche
and edge on our competitive advantages.
Tackling uncertainty and unexpected challenges of the
economy, coupled with rising tends into classification
meeting expectations of diverse services and demand for
lowering of interest rate on the asset side and raising
interest rate on liability side will be the major factors in
determining and positioning of banks in 2015 and beyond.
We are hopeful of managing these challenges well.
On behalf of management of the Bank, I express my
appreciation and thanks to the Government of the
Peopleâ€™s Republic of Bangladesh, Governor and other
officials of Bangladesh Bank, Bangladesh Securities
and Exchange Commission (BSEC), Dhaka Stock
Exchange (DSE), Chittagong Stock Exchange (CSE) and
Registrar of Joint Stock Companies and Firms for their
continuous help and assistance, valuable guidelines and
co-operation provided to the Bank from time to time. I am
also very much thankful to all my colleagues in the Bank
for their profuse help and efforts to attain the corporate
vision, mission and strategic objectives by upholding our
ingrained institutional core values. I acknowledge my debt
and gratitude to the respected members of the Board for
their valuable and judicious policy support to navigate
this institution in the right direction for taking it to a higher
place of sustainable growth with competitive edge.
The Bank is well positioned for the future and I am
confident that we have the ability to continue to deliver
superior long term performance for our customers,
our shareholders, our people and the communities in
which we operate. Thank you again for your support
this year. Your management team will continue to
work hard to ensure that Mercantile Bank remains
strong and successful.
We all look forward to building a sound, sustainable