Mercantile Bank aims to be among top 10 digital banks in three years

Mercantile Bank aspires to be among the top 10 digital commercial banks in the country in the next three years to serve the fast-growing tech-savvy population in the industry.

Keeping the future banking demand of the Gen-Z population in mind, the commercial lender intensifies its focus on bringing cutting-edge technology to provide banking services in a way the targeted clients love to have.

Apart from that, the conventional bank, which entered the industry on June 2, 1999, enhanced its efforts on cash recovery to take the non-performing loan (NPL) buildup below 7.0 per cent within the next three years.

The bank's new Managing Director Mati Ul Hasan shared his future plans of action in an exclusive interview with The Financial Express recently, ahead of the lender's 26th anniversary that it is celebrating today.

He said Mercantile Bank has made significant investments in technology, matching the market demand. To ensure uninterrupted information technology (IT) services, it has set up IT infrastructure at its own building, MBL Centre, in the capital's Dhanmondi.

With the digital app MBL-Rainbow, the bank can provide 16 services to customers, which are on a par with those offered by the top digital banks in Bangladesh, said Mr Hasan.

He said they plan to bring the bank into a totally centralised form by 2025 and develop it into a completely updated technology-based institution.

"We want to see ourselves among the top 10 digital commercial banks in the country in the next three years," the seasoned banker said.

About the priority areas in the coming days, the managing director having 41 years of banking experience said the main goal of the bank is to accelerate the pace of the country's economy by bringing the whole population under the scope of banking services.

For that purpose, he said, the bank's priority areas will be strengthening classified loan recovery and ensuring efficient bank fund management to deal with the existing risks in the financial sector.

At the same time, he said, the bank will give top priority to the agriculture and small and medium enterprise (SME) sectors for loan disbursement as part of bringing marginalised communities under the scope of banking services through sub-branches and agent banking.

When his attention was drawn to the market-determined exchange rate launched recently by the banking regulator, he hailed the decision, saying it is also expected to encourage exports and remittances.

These inflows are then converted into the country's currency and can be used to build up foreign exchange reserves. The central bank has approved a market stabilisation fund of $500 million, which has not been utilised, but the exchange market is stable, according to him.

Regarding the NPL buildup, Mr Hasan said in the financial review of the 2024 annual report, NPLs suddenly increased in financial institutions using qualitative judgment and the bank is also trying to reduce the burden of such loans.

Various sectors have suffered at different times for logical reasons and they have to classify them as per the bank rules and despite keeping full provisions against those, the capital base is strong, he said.

"We have no capital shortfall, which will play a strong role in running the business in the future. We want to bring NPL down below 7.0 per cent in the next three years by intensifying our efforts on cash recovery," the bank's top executive said.

Since its inception, the bank has been providing banking services through its 152 branches, 47 sub-branches, 46 Islamic banking windows, 200 automated teller machines (ATMs), and 188 agent banking outlets.

The bank has deposits of Tk 343 billion, and loans and advances of Tk 300 billion. Its import and export portfolio size is Tk 283 billion and Tk 199 billion, respectively.

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