Mercantile Bank Limited (MBL) has taken a series of measures to become one of the country's top five financial institutions in the near future in terms of market share, its top executive has said.
As part of the moves, the third-generation private commercial bank (PCB) has already adopted a 10-point strategic plan including restructuring its deposit-mix, reducing operating expenditures without hampering the quality of services, flourishing Islamic banking activities and reinforcing offshore banking operations.
"To implement these plans, we have been incessantly aligning and realigning our strategies and business plans every year," Md. Quamrul Islam Chowdhury, managing director (MD) and chief executive officer (CEO) of MBL, said in an exclusive interview with the FE recently ahead of the bank's 22nd founding anniversary.
MBL started its journey on June 02, 1999 with a slogan 'Efficiency is our strength.'
" There were successes and challenges in this 22 year long journey," the MD said.
Being a forward looking bank, MBL is always focusing on finding and providing innovative and FinTech-based financial products and services towards their valued customers, Mr. Chowdhury explained. "We always strive to render global standard digital services."
FinTech is the new technology and innovation that aims to compete with traditional financial methods in the delivery of financial services using smartphones or internet.
MBL has already introduced a centralized banking system-Temenos-T24, mobile banking services-MYCASH, e-KYC and mobile banking application-RAINBOW- to ensure quality services for its clients.
"MBL has started its journey with a view to making a significant contribution to the financial system for sustainable economic growth of Bangladesh," the CEO said while explaining the bank's contributions to development of the country's trade and businesses.
Since its inception, MBL has created a credible brand impression and achieved its customers' trust and loyalty, according to Mr. Chowdhury. "We also play a strong role in mobilizing resources and facilitating foreign business."
Besides, MBL is implementing an effective strategic plan for flourishing the agriculture and cottage, micro, small and medium enterprises (CMSMEs) sector of Bangladesh, he added. "We've undertaken an extensive programme to increase credit exposure in the SME sector."
Currently, MBL offers a large number of CMSME products and services aiming to facilitate the ongoing financial inclusion initiatives across the country through bringing unbanked people into the banking network.
"We've already formulated an effective strategic plan for development of socioeconomic condition in addition to enhancement of shareholder's value," Mr. Chowdhury, a 38-year experienced commercial banker, said while replying to a query.
The senior banker also said MBL has played a crucial role in implementing the Covid-19 related stimulus packages announced by the government in order to sustain export-oriented industries, provide working capital to affected-large industries and services, cottage, micro, small and medium enterprises across the country.
The government has so far announced a total of 23 stimulus packages worth Tk 1.24 trillion to offset the shock of the Covid-19 pandemic in various sectors of the country.
The packages, equivalent to 4.44 per cent of the country's GDP (gross domestic product), are being implemented under the supervision of the central bank and the ministry of finance.
The senior banker also talked about different issues like possible future extra challenges in the country's banking sector as the asset quality, capital and profitability are likely to deteriorate mainly due to the ongoing Covid-19 pandemic.
"Our banking sector is overburdened with a higher volume of non-performing loans (NPLs)," the CEO said, adding that the pandemic is likely to worsen the situation.
"We've been able to manage the adversity of initial pandemic with timely and effective policy support from the government as well as the central bank, but it should be kept in mind that the situation will worsen if the pandemic prolongs and we fail to assess it on time," the senior banker explained.
He also believes that the country's banking sector will curve down the adverse impact of the pandemic with positive and continuous policy support from the regulators.
MBL has already taken different initiatives including rigid credit discipline and streamlined the recovery drives to reduce the volume of NPLs, according to the CEO. "Curbing down the NPL ratio is always costly but to make our credit portfolio healthy-right now I have no other choices left."
The senior banker has also expressed the hope that PCBs will make a healthy profit in 2021 by arresting further deterioration of NPL status.
Though the pandemic creates an unstable and uncertain outlook for the country's banking sector, political stability as well as timely policy support will minimize the adverse effect on down the line, the CEO explained.
About strengthening corporate governance particularly in the PCBs, Mr. Chowdhury said good corporate governance is one of the main catalysts for effective functioning of the banking sector.
"Good corporate governance encompasses a high standard of accountability, fairness, transparency and independence for performance at all levels to ensure and achieve excellence through professionalism, social responsiveness, sound business practices and optimum efficiency," he noted.
This in turn enables the banks to maintain a high level of business ethics to maximize the shareholders' value and protect their interest, according to the CEO.
"At MBL, our commitment to corporate governance is a journey of continuous improvement towards achieving the highest standards of governance along with taking into account the development in the regulatory, business and internal workplace environment," he said while replying to another query.
Regarding fund management, the senior banker said MBL has formulated fund management strategies in consideration with latest micro and macro-economic variables.
MBL has already taken different initiatives including formulating proper management strategies for timely identification of gaps in interest mismatch for different types of assets and liabilities to ensure fund management properly, according to the CEO.
Currently, Mercantile Bank serves a large customer base comprising individuals and institutions through a network of 150 branches across the country.
Besides, the PCB is providing services to the clients through 185 ATM (automated teller machine) booths along with 20 cash deposit machines in different parts of Bangladesh.
Like other banks, MBL has already set up 108 agent banking outlets along with five sub-branches to provide better services to its clients.
Mercantile Bank started 'Islamic Banking Window operation' at its 45 branches in the name of Taqwa.
On the other hand, Mercantile Bank Foundation (MBF) has started operations since 2000 with a view to enforcing the BB's guidelines for carrying out broader Corporate Social Responsibility (CSR) activities through the Foundation.
The private bank has been undertaking a range of activities over the past 22 years with the sole purpose of helping its target people to improve their quality of life.