We want to be among the top 10 banks in next 4 years: Mercantile Bank MD

On its 26th anniversary, Mercantile Bank is focusing on digital transformation in the new year. At the same time, the bank is prioritising the CMSME and agriculture sectors in its loan portfolio alongside corporate finance. The bank is also offering startup loans for the new generation. With a healthy liquidity position, it has even provided liquidity support to weaker banks. In an interview with The Business Standard's Tonmoy Modak, Managing Director Mati ul Hasan discusses the bank's journey and future plans.

The past year has been marked by political and economic instability in Bangladesh. How has Mercantile Bank fared during this period?

The first three to four months of the fiscal year were indeed unstable. The banking sector also suffered due to the financial crimes that occurred in the sector earlier. However, that bleeding has since stopped, and now even weaker banks are able to return customer deposits.

We remained unaffected by the crisis, partly because we avoided risky financing. Despite facing various pressures, we were able to keep the bank in a strong position. Currently, we have 152 branches, 47 sub-branches, and 188 agent banking outlets. Not a single one of them has faced a situation where a customer had to return empty-handed due to unavailability of their deposits.

Deposit growth in the banking sector is not very high at present. How has Mercantile Bank performed?

Our deposit growth is satisfactory. For the past few years, we have maintained a consistent growth trend. In 2024 as well, we achieved a growth rate above the sector's average. For 2025, we set a target to collect Tk4,000 crore in new deposits, and in the first five months alone, we've already secured nearly Tk2,000 crore.

Along with low deposit growth, we're seeing sluggish credit growth. How has Mercantile Bank performed, and which credit products are you focusing on?

When credit growth slows in the overall economy, it naturally impacts us too. Reduced imports and investment in capital machinery have contributed to the slowdown.

Mercantile Bank has been corporate-focused since its inception. Yet, with the goal of financially including marginalised groups and reviving the economy, we've also been actively supporting CMSME and agriculture sectors. 

Considering customer demand, we've launched tailored products like Chaka, Ononna (women entrepreneur loan), Samriddhi, Moushumi, Sonchalok, Unmesh, Udayan and Nabanno for agricultural loans. In 2024, our SME and agriculture lending rose by 121.5% and 22.5% respectively compared to 2023. In 2025, we've set a target for SME loans to make up 25% of total disbursement. Mercantile Bank achieved 102% of the agriculture loan budget set by Bangladesh Bank for FY2023–2024.

Non-performing loans (NPLs) have become a major concern. What is your strategy for reducing them?

According to the financial review of the 2024 annual report, the pressure of NPLs has increased. We are managing this by leveraging our long-term relationships across various sectors.

However, we face no capital shortfall, which strengthens our position going forward. Our Recovery Division – comprising the Special Assets & Management Department, Monitoring & Early Alert Department, and Central Law Department – is working to convert non-performing loans into performing ones.

Our senior management is leading continuous monitoring efforts. Where applicable, legal measures are being taken, and we are engaging with customers to recover debts through negotiation, rescheduling, and maintaining the quality of loans.

Digital transformation is sweeping the global banking industry. What is Mercantile Bank's approach?

In the future, we plan to introduce new and innovative digital banking products. We've already made significant investments in technology. To ensure uninterrupted IT service, we've developed a dedicated IT infrastructure at our own building, MBL Centre, in Dhanmondi.

Through our mobile app MBL-Rainbow, we're offering 16 services – comparable to what the top digital banks in Bangladesh provide. We aim to continue this drive so that people across all parts of Bangladesh can access banking services.

Beyond digital upgrades, are there any specific plans for the younger generation?

Yes, we offer startup loans to educated youth—with or without collateral. If someone approaches us with a new idea and we find it viable upon assessment, we provide loans. We already have several success stories. One such example is an app-based service for domestic helpers – now a successful business that started with our support. These successes inspire us to continue financing the younger generation.

Additionally, freelancers working for international clients can also approach us if they need financial support.

What are Mercantile Bank's future plans on its 26th anniversary?

Based on our 25 years of experience, our main goal is to place Mercantile Bank among the top 10 banks in Bangladesh within the next 4 years. We plan to create a strong framework of centralised and digitised banking services.

We'll also strengthen loan recovery efforts to reinforce our financial foundation and maintain asset quality. By aligning with global standards, we aim to build a skilled and smart workforce through state-of-the-art training.

To contribute to national economic development, we will continue to prioritise large, small, and medium industries, agriculture, foreign trade, infrastructure development, and women's empowerment.