Mercantile Bank is stepping into its 22nd year of journey today (June 2). The third-generation bank is not doing anythingmarking its 21st anniversary because of the pandemic. Md Quamrul IslamChowdhury, managing director and chief executive officer of the bank, recently discussed withThe Business Standard's ShafayatHossain his plan and strategy to run better operations inthe pandemic and post-pandemic time.
TBS: Amidthe pandemic, you are going to start another new year's journey.What do you think? Will the journey be smooth or tough?
It cannot be said that the journey will not be so smooth, but we are always optimistic. We hope the third-generation bank has a large number of employees and state-of-the-art technology for operating digital banking that can help the bank to go forward facing all kind of impediments. We are planning everything in a new way and this year we are giving up our regular event – young bankers appreciation award and Mercantile Bank GunijonSommanona – considering coronavirus pandemic.
TBS: In the last 21 years, how was your business? And in the very recent times, howdid coronavirus pandemic impactyour banking business?
Mercantile Bank was established as a third-generation bank aiming significant contribution to the financial system for sustainable economic growth in Bangladesh. Since its inception, it has been playing a vital role in the development of trade and business in this country by providing credit for businesses and at the same time collecting money as deposits from general public through different types of depository incentives. Agriculture is the main sector of our economy. In order to facilitate agricultural activities and promote small and medium enterprises, our bank is financing these two sectors directly as well as through partnerships with NGOs. We have taken a number of new projects to consolidate contribution in promoting the country's trade and business.Our bank also exhibits quality financing while facilitating import and export trade.
The bank handled a total of Tk18,465 crore of import and Tk16,315.23 crore of export trade last year.We are proud to be one of the largest taxpayers in the country.We have become an important source of revenue for the government of Bangladesh. In 2019, the bank made provisions of Tk520.93 crore for corporate tax.
Bangladesh will face chain effects of Covid-19 pandemic due to the economy's exposure to the global system. The country's exports, imports and remittances have already fallen and forecast for the next few months is not encouraging either. Our bank is also facing the decrease in export, import and remittance as a short-term effect. However, the actual business effect will depend on how long this pandemic persists and how financial regulators and leaders worldwide devise policies and strategies to address the issue. The World Bank has already forecast a fall in economic growth to two to three percent in fiscal year 2019-2020 and 1.2-2.9 percent in 2020-21.
Preparations to offset economic effects of Covid-19 are underway in Bangladesh. The government has announced a number of stimulus packages to support industries, financial and farm sectors and vulnerable groups and thus help the economy rebound. We are taking supportive steps as per the direction of the Bangladesh Bank.
TBS: This pandemic has already changed business operations. Many banks and financial institutions are thinking howthey can utilise maximum output of digitisation and customers are changing their behaviour patterns. Even products like health and safety, and services like e-commerce took a big place. Are you thinking about these changes for setting priorities in the lending sector?
First of all, we prioritise health sector to invest money. Mercantile Bank will establish a modern hospital soon. Moreover, the bank will prioritise health sector for lending. If any entrepreneur wants to establish a new hospital or want to extend existing projects, Mercantile Bank will provide loan at a low interest rate.
TBS: What are the bank's present activities regarding stimulus packages declared by the government? How many applications did you receiveand what is the status of disbursement?
The world economy is facing systematic risk because of this virus pandemic. So, the threat imposed by the Covid-19 pandemic therefore needs a systematic approachin which the restrictions, states of lockdown and exit strategies will all balance public health, and societaland economic needs. Countries are forced to confront hard choices of balancing the needs to save lives and to save livelihoods. The government has already announced some stimulus packages to help the economy recover from the fallout. I am optimistic that impact of pandemic will be minimised by the end of 2020 if we all work efficiently both domestically and internationally in a coordinated manner.
TBS: What is the strength of Mercantile Bank that can help to face any challenges like this pandemic or other disasters?
With the slogan"Efficiency is our strength", Mercantile Bank started its journey on June 2, 1999. From the beginning, the bank has created a credible brand impression and achieved its customers' trust and loyalty. It is rated by international rating agency Moody's that reflects its good profitability, well-matched maturity profile, modest asset quality and solvency profile. The bank serves a large customer base comprising individuals and institutions through a network of 149 branches supplemented by 181 ATM booths and 20 cash deposit machines powered by the combination of a skilled human resources team and state-of-the-art technology to serve unbanked and underbanked sections of the society. In addition to providing all ranges of banking services, it is also providing other services through its two subsidiary companies, two off-shore banking units, internet banking and mobile banking. It is going to start its agent banking and "Islamic Banking Window Operation" in the name of Taqwa. Moreover, it is now in the process of establishing two new subsidiary companies: MBL Asset Management Limited and MBL MyCash Limited. We have a centralised contact centre to provide banking services to customers' doorstep on a 24/7 basis through 16225.
The Mercantile Bank Foundation (MBF) began operations in 2000 with a view to enforcing the Bangladesh Bank's guidelines for carrying out broader Corporate Social Responsibility (CSR) activity. MBF has been undertaking a range of activities over the past 21 years with the sole purpose of helping its target people to improve the quality of life. More than 2,000 stafffamilies get support from MBL. It is contributing to employment creation by creating quality manpower.
Mercantile Bank has been awarded "Certificates of Merit" at the ICAB awards for best presented annual report 2018, which testifies to our commitment for promoting transparency vis-a-vis our multiple stakeholders. Furthermore, in recognition of our unwavering commitment towards best customer service, CSR activities and overall good governance, our bank was awarded "National Productivity and Quality Excellence Award2016" by National Productivity Organisation (NPO) under the Ministry of Industries. The bank introduced "MBL Young Bankers Appreciation Award"for the young talented private commercial bankers in 2018. Basically, the aim of this award is to inspire young bankers and make them more professional.
TBS: What is the latest financial status of MBL this year compared to the corresponding period of previous year?
Mercantile Bank has become one of the leading financial institutions and maintained satisfactory growth across its all business units. But recently, some indicators are showing decreasing trend due to coronavirus pandemic. At the end of April 2020, total deposits of the bank stood at Tk25,008.37 crore compared to Tk23,720.97 crore in April 2019. The growth rate of deposit is 5.43 percent. In the same period, total loans and advances of the bank stood at Tk23,595.06 crore against Tk22,355.32 crore at the end of April 2019. The bank recorded a 5.55 percent growth in loan and advances. Export growth has fallen by 20.19 percent in April 2020 compared to April 2019. Import growth is also negative. It decreased by 15.86 percent in April 2020 compared to previous year. Inward remittance growth of the same period fell by 61.31 percent compared to that of April 2019.