Mercantile Bank PLC.’s unwavering commitment to excellence has resulted in an unprecedented operating profit of BDT 7,138.89 million, despite the formidable challenges faced by the banking industry. This remarkable feat was made possible thanks to the tireless efforts and unwavering dedication of all employees, as well as the exemplary support of our Board of Directors. I extend my heartfelt gratitude and congratulations to each and every stakeholder of Mercantile Bank Limited. for this incredible achievement.



Dear Fellow Stakeholders


MBPLC. ’s performance this year is a testament to our unwavering commitment to customer-centricity and rigorous execution. By ensuring quality service to customers, we experienced healthy growth in deposit and lending volumes across household and business segments. This growth, in turn, boosted our operating performance and hence ensured sustainable profitability. This was aided by prudent management and diversified portfolio. Notably, our balance sheet remained robust while maintaining a competitive capital position that enabled us to support existing and prospective businesses while delivering sustainable returns to shareholders. MBPLC. ’s unwavering focus on excellence leaves us in a position of strength to navigate the ever-evolving economic landscape with poise.


2022: Navigating Challenging Economic Headwinds and Impacts on Bangladesh’s Banking Industry


At the outset of 2022, Bangladesh’s economic landscape appeared to be in high spirits, with the inauguration of the Padma Bridge, Dhaka Metro Rail, and the country achieving 100% electrification. The export sector had been booming, further reinforcing this optimism. However, just when the world was recovering from the pandemic, the world took a sharp turn for the worse, with the beginning of the war between Russia and Ukraine. Its adverse effects became apparent in the second quarter of 2022. Like the whole world, Bangladesh was not spared either. Remittances, which had sustained the economy through the worst of the pandemic, suffered a sharp decline. Foreign exchange reserves, a source of confidence in recent years, plummeted, resulting in a domino effect that caused the value of the Taka to reach unprecedented lows.

At the outset of 2022, Bangladesh’s economic landscape appeared to be in high spirits, with the inauguration of the Padma Bridge, Dhaka Metro Rail, and the country achieving 100% electrification. The export sector had been booming, further reinforcing this optimism. However, just when the world was recovering from the pandemic, the world took a sharp turn for the worse, with the beginning of the war between Russia and Ukraine.


During these tough times one must appreciate the measures taken by Bangladesh Bank to support the Banks and overall economy. The monetary policy is one of these steps and thus we must examine Bangladesh Bank’s monetary policy for FY23, formulated to counter inflationary pressure from pandemic-induced expansionary fiscal policies and supply-side disruptions due to the Russia-Ukraine conflict. The policy discourages unproductive financial flows and supports long-term growth aspirations by facilitating funds to productive sectors. Measures such as increasing repo rate, quantitative tightening, refinancing/pre-financing lines, and continued stimulus package support have been implemented. The policy aims to contain inflation and exchange rate pressures while supporting economic recovery through cautious credit programs.

Bangladesh Bank responded to exchange rate pressure during H1FY23 by implementing various policy measures, including BDT depreciation by 11.28%, selling foreign currencies to banks, limiting luxury and non-essential imports, reducing operational expenses, facilitating remittance repatriation and cash incentives through mobile financial services, and waiving transfer fees for expatriate remitters. Other measures included monitoring foreign exchange dealings, reducing export retention quotas, and increasing interest rates on non-resident foreign currency deposits and export development fund loans.

Available data shows a 10.58% increase in external demand (measured by export receipts) during July-December 2022, compared to 28.41% growth in the same period last year. Internal demand, measured partly by import payments, decreased by 2.20% during the same period this year, compared to a 54.47% increase last year. Consumer credit grew by 26.70% in September 2022, up from 22.90% in the same period last year, indicating robust internal demand. Private and public sector investment activities remained strong, as shown by a 12.76% increase in private sector credit in December 2022 (compared to 10.68% last year) and a 7.42% growth in medium and large-scale manufacturing output during July-September 2022 (compared to 9.13% last year).

During H1FY23, domestic commodity prices rose significantly, leading to an increase in headline inflation. However, the CPI-based point-to-point headline inflation has been decreasing over the last five months due to declining food inflation, although core inflation continues to increase.


Driving Sustainable Growth and Achieving Strategic Objectives in 2022

Despite these challenges, our focus on sustainability and strong fundamentals has allowed us to achieve our objectives of maximizing shareholder value and maintaining a steady dividend payout ratio. Our Capital to Risk weighted Aseet Ratio (CRAR) has remained a strong point for the Bank, standing at 14.35% as of December 31, 2022; improving from last year’s figure of 14.09%. This provides us with a cushion against unforeseen risks and safeguards shareholder wealth.

As previously mentioned, Bangladesh faced a foreign exchange reserve crisis in 2022, resulting in reduced imports. Mercantile Bank acted responsibly and ensured that imports were kept at a manageable level to avoid further pressure on the country’s foreign currency reserves. However, we excelled in exports and remittances, with total exports at BDT 209,222.50 million and foreign remittances at BDT 68,272.90 million, showing an increase of 27% and 67% respectively compared to last year. In contrast, imports decreased by 8% due to the Bank’s effort to in line with Govt. endeavor to curtail the outflow of US dollars. Mercantile Bank remains committed to the country’s interests and the significant increase in exports and remittances resulting in more USD inflows is a testament to our dedication.

Mercantile Bank’s 2022 performance was marked by successful strategy execution and achievement of strategic objectives. This resulted in strong financial performance, business momentum, and balance sheet growth. The Bank generated operating profit of Tk. 7,138.89 million with a growth of 16.7% last year, while net profit reached Tk. 2,202.58 million as the Bank as the emphasis was more on building long term sustainability. Growth in net non-interest income was a key driver, with costs of customer deposits decreasing by 8 basis points, due to an improved deposit mix. The ratio of high, low and no cost deposits was 54%:27%:19% in 2022 compared to 62%:24%:14% last year. The increase in income has ensured a more favorable Cost-income ratio for 2022 as compared to last year.

Mercantile Bank Limited has already started full-fledged Islamic Banking and has quickly become one of the top players in the market, with a total liability portfolio of BDT. 8,012.27 million and investment portfolio of BDT. 5,386.78 million. We have further strengthened our position by opening a dedicated Islamic Banking Branch in Dilkhusha, Motijheel. The Bank has maintained a satisfactory and steady credit rating of AA for long-term and ST-2 for short-term.

MBPLC has a strong corporate governance culture with structures and policies in place to manage risks and opportunities. This approach ensures competent management oversight towards achieving our goals and sustainability agenda. Our commitment to effective governance also fosters a positive working environment for our people. We strive to create a workplace where employees can thrive and reach their full potential. Our engagement remains high, and we prioritize building critical skills for the future by reimagining our talent identification, attraction, development, and retention strategies.

MBPLC takes a holistic view of conducting business by integrating environmental and social factors to positively impact people’s lives. This approach has enabled us to build a sustainable business over the years. We acknowledge our responsibilities not only towards our stakeholders but also towards the broader communities we operate in. We have set clear strategic objectives for each of our sustainability focus areas to drive our efforts in achieving our sustainability goals.

In 2022, MBPLC. has achieved significant recognition and accolades from local and international organizations. We are proud to have received the ‘South Asian Business Excellence Award-2022’ under the ‘Best Bank in the Private Sector’ category from the South Asian Partnership Summit. We were also awarded the 3rd prize for Best Presented Annual Report (Private Sector Banks) and 3rd prizes in Corporate Governance and Integrated Reporting categories at the 22nd ICAB National Award. These achievements reflect our unwavering commitment to excellence and we will continue to strive towards delivering superior value to all our stakeholders.


Prioritizing Customer Support and Technology-Based Services in 2023

In 2023, our priority is to build upon our strong foundation and move forward with renewed enthusiasm. Our short-term focus is to provide support to our customers through our distribution points, including branches, sub-branches, and agent banking outlets. We will work towards optimizing resource allocation and improving the efficiency and productivity of these points. Our commitment is to extend technology-based services to reach every individual and bring more unbanked people into the banking network.

Gratitude to Our Team, Board, and Regulatory Authorities

As we conclude another successful year, I am in awe of the dedication and passion displayed by the MBPLC team in upholding our vision, mission, and strategic objectives while staying true to our core values. The unwavering support and wise decisions from our dynamic Board of Directors have helped us emerge as the best corporate citizen, and we extend our heartfelt gratitude to them.

We are also grateful for the continuous guidance and support from our regulatory authorities, including Bangladesh Bank, NBR, BSEC, DSE, CSE, FRC and RJSC&F. We could not have achieved these milestones without their unwavering support and guidance.

As we move forward, we are excited to take on new challenges and embrace new opportunities. We will continue to work tirelessly to provide our customers with the best banking experience possible, reaching out to every individual and bringing more unbanked people into the banking network.

I am confident that with the same dedication and commitment, we will continue to soar to greater heights and achieve greater success in the coming years. Thank you all for your hard work, support, and dedication. May our journey ahead be nothing short of magical.


Wishing you all the best.
Md. Quamrul Islam Chowdhury
Managing Director & CEO

What you want? don't worry, contact us