In 2007, Mercantile Bank Limited remained at the forefront of the banking industry of Bangladesh, in the face of challenges of intense competition, on going reforms in the banking industry and a more challenging business and economic environment confronting its customers. The Bank continues to play an important supportive role in the government's drive to strengthen the rural economy as the driver of the future economic development of Bangladesh. Although I have been absenting since long, but I feel honored, delighted and take the opportunity to present the Bank’s performance during the year 2007 and its future prospects.

Mercantile Bank Limited continued its expansion program during the year ended as on December 31,2007. Its core lending and deposit-taking businesses have increased significantly. Rising trend of Bank’s profitability over the last 8 years is also materialized. Earning Per Share (EPS) of the Bank stood at BDT 36.06 in 2007 with Return on Equity (ROE) reaching to 18.19% as against 21.48% in 2006. The consistent and strong financial performance of the Bank continued to be underpinned by the strong asset quality of the Bank. Gross NPA ratio of the Bank reduced from 3.79% in 2006 to 2.80% in 2007.

Mercantile Bank Limited is fully committed to the delivery of superior shareholders’ value. Initiative ranging from having more efficient capital structures and improving return on equity, pursuing a high dividend payout policy to the pursuit of excellence corporate governance have been undertaken with a view to enhancing superior shareholders value. With an unbroken profitability track record of 8 years since Mercantile Bank started operation despite devastating flood and economic upheavals after 1/11 underpinning the investors` confidence.

We do believe that we have differentiated ourselves from other banks through our products and services. We are banking for the people to fulfill their needs conceptualizing product and services to meet their aspiration and expectations. We are proud to have exemplified the true concept as ‘Banglar Bank’.

I believe, the magic of success of the Bank, is teamwork. The team of executives and officers of the Bank must be commended for their dynamism, motivation and dedication to the Bank. I appreciate the continuous strive of the Senior Management team to achieve the corporate goal of the Bank. Pursued Human Resources policy of the Bank is focused on recruitment, training and development. The human capital of the Bank has continuously been nurtured and proactively managed to bring out the best.

Our vision is to take the Bank as far as possible to all segments of population and accordingly we have designed our product line. Our banking philosophy is not to ‘carry coal to the new castle'. We want to make credits available to the poor people. Our activities are aimed at multifaceted growth where our people from all economic strata will enjoy the benefits of better living standard, dignity of labor and self worth. Our Corporate Social Responsibility (CSR) functions are also being carried out on the same philosophy, that profit earning is not the only objective of the Bank. We feel a strong obligation to the society. Supporting education, sports and culture and Bank’s donation to recent flood and cyclone victims were quite significant in our CSR initiatives.

We have married the concepts of IT to the human interface, which we believe is vital in looking ahead at working with the people. We have put a lot of money in IT. Our online banking or any time and anywhere banking, SMS services, ATM services, Credit and Debit Card, Prepaid Card and introducing SWIFT for facilitating International Trade have gained popularity among the customers. Meanwhile we have been more focused on SME, which are recognized worldwide as engines for achieving high and sustainable economic growth and are critically important prerequisites for triggering an exit from endemic poverty and socio-economic deprivation. Through SME banking, the Bank is trying to build up entrepreneurs especially from women. For 2008 and beyond we have the following priorities: Investing in People and ‘Integrated Banking Software’, Expanding Networks, Consolidation, Allocating Funds to maximize returns, shouldering CSR, instituting best Corporate Governance practices, and above all, implementation of BASEL II in due course.

I am a firm believer of teamwork and feel that a loyal and motivated team can produce extra ordinary results. To achieve this objective, we need excellence of efforts, both of ourselves and of our workforce, in a concerted and harmonious manner. We are also committed to the performance culture where recognition, promotion and rewards are based on individual merit and demonstrated performance.

The Bank earned operating revenue of BDT 1,385.15 million before Tax and Provisions in 2007, registering a growth of 17.51% over the previous year. The after tax and provision operating revenue stood at BDT 540.50 million in 2007, registering a growth of 9.36% over the previous year.

I am thankful to the directors and the sponsors for unstinted support received from them. I also appreciate their proactive role, being aligned to my vision for managing the Board during my long absence.

I express my heartfelt gratitude to all the shareholders of the Bank, as they remained unshaken in their conviction of Bank’s ability to give them the desired results and to keep the Bank on its rightful path.

I also wish to thank our valued business partners for their cooperation and support throughout the year. It is actually the customer who have made things happen for us and given us the impetus to move forward.

I wish to express my deep appreciation to the entire Management team of the Bank for their untiring commitment, dedication and loyalty in contributing to the continuing success of the Bank.

On behalf of the Board, I would also like to thank the Governor and other officials of Bangladesh Bank, Chairman of Securities and Exchange Commission (SEC), Chairman and other officials of Dhaka Stock Exchange (DSE), Chairman and other officials of Chittagong Stock Exchange (CSE) and all other regulatory authorities for their invaluable advice, guidance and support.

Md. Abdul Jalil