MBL Annual Report 2020

OVERVIEW
Annual Report 2020 1

CONSOLIDATING PROGRESS
STRENGTHENING FUTURE
Forging ahead with great momentum is always good but not the
only aim of any financial institution. Rather sustainability must
be attached with the growth for making the future stronger than
others. This can be tested only when the going gets tough and
the institution is able to withstand it by consolidating the progress
achieved over the past years.
The COVID-19 pandemic has hit the worldwide economy not even
sparing the developing economies like Bangladesh. Amidst Govt.
holidays (shutdowns) and limited openings, the economic growth
has come down quite a lot. But, having sustainability in the core
of its business, Mercantile Bank Limited (MBL) has been able to
weather the storm quite appreciably.
December 29, 2017
Opening of 129th Branch
December 29, 2014

Opening
of 100th Branch
September 20, 2012

Opening of Mercantile Exchange
House (UK) Limited,
London Branch
December 06, 2011

Opening of Mercantile
Exchange House (UK) Limited
September 14, 2011

Separate Operation of
Mercantile Bank Securities
Limited (MBSL)
March 20, 2011
Commencement of Operation
of Offshore Banking Unit
December 30, 2009

Opening of
50th Branch
June 06, 2009

Mercantile Bank Brokerage
House Operation
February 26, 2004

Listed in
Chittagong Stock Exchange
February 16, 2004

Listed in
Dhaka Stock Exchange
October 21-22, 2003

Subscription
for Shares
June 30, 2003

Publication
of Prospectus for IPO
June 02, 1999

Commencement
of Business
May 20, 1999

Incorporation
of the Bank
2 Mercantile Bank Limited

OVERVIEW
October 03, 2018

Inauguration of ‘MBL Contact Center’
June 02, 2018

Launch of ‘MBL Young Bankers’
Appreciation Award 2018’
May 11, 2018

Moody’s assigns first-time
B1 ratings to Mercantile Bank Ltd.
April 18, 2018

Achieved National Productivity
and Quality Excellence Award- 2016
November 29, 2018

Incorporated MBL Asset
Management Limited, a subsidiary of
Mercantile Bank Limited (MBL)
December 24, 2018

MBL achieved ‘Certificate of Merit’ under
the category of Corporate Governance
Disclosure in 18th ICAB National Award
August 05, 2019
Obtained permission for
Agent Banking from Bangladesh Bank
August 21, 2019

Obtained permission for Islamic
Banking Window operation from
Bangladesh Bank
November 30, 2019

MBL achieved ‘Certificate of Merit’ in
19th ICAB National Awards for Best
Presented Annual Reports 2018
June 21, 2020
Inauguration of Agent Banking
Outlets
June 29, 2020

Inauguration of Islamic Banking
Window Operation ‘Taqwa’
November 26, 2020

Achieved 20th ICAB National Award for
Best Presented Annual Report-2019 (3rd
Prize) under Private Commercial Bank
Category and ‘Certificate of Merit’ under the
Corporate Governance Disclosure.
December 4, 2020
Mercantile Bank joins FCI- the Global
Representative Body for Factoring
and Financing as associate member
December 24, 2020
Inauguration of 150th Branch

PERFORMANCE
AT A GLANCE 2020
MBL Highlights
BDT in million unless otherwise specified
Balance Sheet Size
2020 GROWTH 2019
330,785.56 4.56% 316,363.47

Paid-up Capital
2020 GROWTH 2019
9,840.16 5.00% 9,371.58

Shareholders’ Equity
2020 GROWTH 2019
22,101.78 5.71% 20,908.29

Loans and Advances
2020 GROWTH 2019
248,994.39 5.11% 236,890.45

OVERVIEW
Total Off Balance Sheet
2020 GROWTH 2019
108,112.30 6.00% 101,993.74

Interest Earning Assets
2020 GROWTH 2019
302,164.54 3.77% 291,195.32

Non-Interest Earnings Assets
2020 GROWTH 2019
28,621.02 13.72% 25,168.15

Market Capitalization
2020 GROWTH 2019
12,497.01 1.02% 12,370.38

Overview
Letter of Transmittal 8
Notice of the 22nd Annual General Meeting 9
Introduction of our Integrated Reporting 10
About Mercantile Bank Limited 13
Vision, Mission, & Core Values 16
Business Ethics 17
Code of Conduct 18
Strategic Objectives & Corporate Philosophy 19
Corporate Priorities 20
Corporate Profile 21
Corporate Organogram 22
Awards & Recognition 24
Sponsors of the Bank 26
Directors’ Profile 28
Corporate Structure 35
We Mourn 36
Our Pride 38
Message from the Chairman 40
Top Management Team 45
Message from Managing Director & CEO 46
Senior Management Team Profile 51
Heads of Divisions, Departments, Units 56
& Cells at Head Office
Divisions, Departments, Units 58
& Cells at Head Office
Regional Offices & Mercantile Bank Training 59
Institute (MBTI)
Branches Network 60
Heads of Branches 61
Celebration of Bangabandhu Sheikh Mujibur 75
Rahman’s Birth Centenary
Key Events 2020 76
Five Years' Performance 80
Horizontal & Vertical Analysis 85
DuPont Analysis 89
Segment Analysis 90
Directors’ Report
World Economy 92
Bangladesh Economy 95
Banking Industry 97
Business Review 99
Review of Subsidiaries Performance 107
Divisional Overview 108 Certificate of Compliance 277
Subsidiary Overview Compliance Report on BSEC Notification 278

on Corporate Governance
Mercantile Bank Securities Limited 136
Compliance of Meeting & Remuneration 291
Mercantile Exchange House (UK) Limited 142
Report of the Audit Committee 293
MBL Asset Management Limited 144
CEO & CFO’s Declaration to the Board 295
MBL MyCash Limited 148
Chief Financial Officer (CFO)’s Review 296
Integrated Report
Financial Statements
Roadmap to Integrated Report 150
Independent Auditor’s Report 301
Strategic Framework 151
to the Shareholders of Mercantile Bank Limited
Strategic Focus 2021 155
Consolidated Financial Statements 306
SWOT Analysis 156
Solo Financial Statements 313
Business Model 157
Notes to the Financial Statements 320
Value Creation Activities 158
Financial Statements 401
Risk Management Report of Off-shore Banking Division
Board Risk Management 161 Financial Statements of Islamic Banking 407
Committee (BRMC) Report
Financial Statements of Subsidiaries
Chief Risk Officer’s Review on Risk Management 164
Independent Auditor’s Report to the Shareholders 415
Risk Management Report 167 of Mercantile Bank Securities Limited
Report on Risk Based Capital (BASEL-III) 179 Financial Statements 417
Non-performing Loan (NPL) Management 200 of Mercantile Bank Securities Limited
Independent Auditor’s Report to the Shareholders 438
Sustainability Analysis
of MBL Asset Management Limited
Sustainable Banking Highlights-2020 203
Triple Bottom Line 203 of MBL Asset Management Limited
Report Parameter 204 Directors’ Report 453
Strategic Focus for Sustainability 2021 205 of Mercantile Exchange House (UK) Limited
Products & Services 209 Accountants’ Report 454

of Mercantile Exchange House (UK) Limited
Stakeholder Engagement 211
Material Aspect 214
of Mercantile Exchange House (UK) Limited
Environmental Performance 215
Supplementary
Economic Impact Report 219
Abbreviations 460
Contribution to National Exchequer 221
Proxy Form 463
Mercantile Bank Foundation and CSR Activities 222
Human Resource Management Report 228
Responding to COVID-19 Challenges 237
Customer Satisfaction 238
Market Performance 241
Grievance Redressal 246
Corporate Governance
Letter from the Board of Directors Presented 248
by the Company Secretary
Corporate Governance Report 249
Shariah Governance 276
LETTER
OF TRANSMITTAL
All Shareholders of Mercantile Bank Limited,

Bangladesh Bank,
Bangladesh Securities and Exchange Commission,
The Registrar of Joint Stock Companies and Firms,
Dhaka Stock Exchange Limited,
Chittagong Stock Exchange Limited and
All other stakeholders
Dear Sir(s),
Annual Report of Mercantile Bank Limited for the year ended December 31, 2020
We are pleased to present before you Mercantile Bank Limited’s Annual Report, 2020 along with the audited Financial
Statements (Consolidated and Solo) as at and for the year ended 31 December, 2020 for your kind information and
record.
Financial Statements of ‘The Bank’ comprises of Mercantile Bank Limited’s main operation, Off-shore Banking Unit (OBU)
and Islamic Banking operation which presented separately whereas Consolidated Financial Statements comprise of ‘The
Bank’ and those of its subsidiaries- Mercantile Bank Securities Limited (MBSL), Mercantile Exchange House (UK) Limited
and MBL Asset Management Limited presented separately. Analyses in this report are based on the financials of ‘The
Bank’ unless explicitly mentioned otherwise.
Yours sincerely,
Abu Asghar G. Haruni

SVP & Company Secretary
Notice of the 22nd Annual General Meeting
Notice is hereby given to all members of Mercantile Bank Limited (the “Company”) that the 22nd Annual General Meeting (AGM) of the
members i.e., shareholders of the Company will be held on Wednesday, April 28, 2021 at 11:00 am virtually by using digital platform
through the link https://mbl.bdvirtualagm.com (in pursuance with BSEC Order No. SEC/SRMIC/94-231/25, dated 08 July 2020 and BSEC
Order No. SEC/SRMIC/94-231/91 dated 31 March, 2021) to transact the following businesses and to adopt necessary resolutions:
Agenda:
1. To receive, consider and adopt the Audited Financial Statements for the year ended December 31, 2020, Reports of the Auditors’
and Directors’ thereon;
2. To declare Dividend for the year ended December 31, 2020 as recommended by the Board of Directors;
3. To elect/re-elect Directors of the Bank;
4. To appoint External Auditors of the Company for the term until conclusion of the next Annual General Meeting and to fix up their
remuneration;
5. To appoint Corporate Governance Compliance Auditors of the Company for the term until conclusion of the next Annual General
Meeting and to fix up their remuneration;
6. To approve Mercantile Bank Perpetual Bond up to BDT 700.00 Crore;
By order of the Board
Dated: April 06, 2021 Abu Asghar G. Haruni

Dhaka, Bangladesh Company Secretary
Notes:
a) The “Record Date” was Monday, April 05, 2021. The shareholders, whose name appeared on the Register of members of the Bank
or in the Depository (CDBL) on the Record Date are eligible to attend the 22nd AGM and entitled to the dividend, as approved.
b) Shareholders entitled to attend and vote at this virtual AGM may appoint a proxy to attend and vote. The “Proxy Form”, duly filled,
signed and stamped at BDT 20 must be sent through email to share@mblbd.com not later than 48 hours before commencement
of the AGM.
c) Annual Report-2020 alongwith Attendance Slip and Proxy Form, and Notice of the 22nd AGM are being sent to all the members
by courier service / post / email address available as per CDBL record. Members may also collect the Annual Report & Proxy Form
from the registered office of the company or from the website of the company, i.e. www.mblbd.com.
d) Concerned Depository participants (DP) / Stock Brokers are requested to provide us with a list of their margin loan holders who
hold MBL shares, as on record date with the details of Shareholders’ name, BO ID, shareholding position, cash dividend receivable,
tax rate etc., within April 15, 2021, along with the name of the contact person to the Share Department of the Company and also soft
copy of the same at share@mblbd.com, otherwise dividends will be paid to bank accounts of the members whose name would
appear on the ‘Record Date’. The DP / Stock Brokers are requested to provide us with their Bank Account name & number, routing
number etc., to mentioned email address for receiving the dividends of their margin loan holders.
e) The shareholders will join the virtual AGM through the link https://mbl.bdvirtualagm.com. The shareholders will be able to submit
their questions/comments electronically before 24 (twenty-four) hours of commencement of the AGM through this link and also
during the Annual General Meeting. In order to login for the virtual AGM, the shareholders need to click on the link and provide
their 16 digit Beneficiary Owners (BO) account number or Folio number, name of shareholders, their number of shares and
mobile number or email ID. Mercantile Bank Limited emphasizes on maintaining transparency and highest corporate governance
throughout this process and conduction of the AGM using the digital platform during this pandemics of COVID-19 when social
distancing is the highest priority to ensure health and safety for its shareholders and other stakeholders.
f) Shareholders are requested to login to the system prior to starting of the meeting at 10.30 am on April 28, 2021 Wednesday. The
online (real time) or e-voting option shall be opened before 24 hours prior to start of general meeting and shall remain open up to
the closure of general meeting. For any IT related guidance and help with the login process the respected members may contact
at +8802 9559333, +8802 9559352 or visit www.mblbd.com website.
INTRODUCTION
OF OUR INTEGRATED REPORTING
Continuous effort for better disclosure and various capitals in value generation process that
includes sustainability impacts with comparatives and
This Integrated Annual Report portrays the Bank
forecasts where applicable. The report also continued to
and its subsidiaries performance in spite of facing uphold greater corporate transparency during our twenty
unprecedented COVID-19 pandemic challenges in two years business journey, which has led us to be better
the landscape of economic, environmental and social integrated thinkers in generating the required value to our
context. The report also encompasses corporate key stakeholders. In addition, it has been tried to bridge
strategy, analysis, discussion on operational and financial applicable regulatory frameworks for Mercantile Bank and
performance and initiatives and impacts pertaining to its subsidiaries with other additional voluntary disclosures
sustainability. Moreover, the report explains the progress such as those from the International Integrated Reporting
of Mercantile Bank Limited in terms of business model Council (IIRC) and the Global Reporting Initiative (GRI).
Snapshot of reporting framework
Integrated Reporting
International Integrated Reporting Council’s (IIRC) Integrated Reporting <IR> Framework
Financial Reporting
International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs)
First Schedule (Sec-38) of the Bank Companies Act, 1991 (as amended up to 2018),
BRPD Circular #14 dated 25 June 2003 issued by Bangladesh Bank
Notification of Financial Statements No. BSEC/CMRRCD/2006-158/Admin/81 dated 20 June, 2018
The Financial Reporting Act, 2015
The Companies Act, 1994 and amendment thereon

Securities and Exchange ordinance 1969, Bangladesh Securities and Exchange Rules 1987, Bangladesh
Securities and Exchange Commission Act 1993, Bangladesh Securities and Exchange Commission IPO Rules
2006, Any other directives, orders and circulars issued by Bangladesh Securities and Exchange Commission.
Dhaka Stock Exchange (DSE) Listing Regulations, 2015, Chittagong Stock Exchange (CSE) (Listing)
Regulations, 2015 and Central depository Bangladesh Limited (CDBL) rules & regulations.
Corporate Governance Code No. BSEC/CMRRCD/2006-158/Admin/80 dated 3 June, 2018 issued by
Bangladesh Securities and Exchange Commission (BSEC).
BSEC’s Directive on Dividend Distribution and management of Unpaid and Unclaimed Dividend dated 14
January, 2021
BSEC’s Directive on Digital Platform for Conducting AGM or EGM dated 31 March, 2021
Sustainability Reporting
Global Reporting Initiatives (GRI) standards.

UN Sustainability Development Goals (SDGs)

OVERVIEW
Other Regulatory Framework
The Banking Companies Act, 1991(amendment till 2018).
Bangladesh Bank Circulars and Guidelines.
The Companies Act, 1994 and amendment thereon
The Income Tax Ordinance, 1984 and amendment thereon; Income Tax Rules, 1984
The VAT and Supplementary Duty Act, 2012 and amendment thereon; The VAT and Supplementary Duty
Rules, 2016
Statutory Regulatory Order (SRO) and General Order (GO) of National Board of Revenue (NBR).
Bangladesh Labor Act, 2006 (amendment 2013).
Other applicable laws and regulations.
Our integrated business model Financial Capital, Human Capital, Institutional Capital,
The past glorious 22 years journey have given the Intellectual Capital, Social & Relationship Capital and
opportunity and the time to gain a wealth of experience, Natural capital and subjecting them through a streamlined
acquire and fine tune skill sets and focus our attention core business process and various support activities
towards integrated thinking. The report reflects the associated with MBL’s business, to derive sustainable
process of value creation, by using the six forms of capital: wealth for its key stakeholders.
MBL’s
Capital
Financial Human Institutional Intellectual Social & Natural

Capital Capital Capital Capital Relationship Capital
Capital
Reporting period critical importance to our stakeholders. The structure

of the report has been further developed as part of our
The report covers the period from 1 January, 2020 to 31 continuous focus on improving communication to our
December, 2020. stakeholders.
Comparability Availability of the annual integrated report

All the information presented in this report is on the The hard copies of the Annual Report 2020 have been
same basis as the 2019 report in terms of the entities sent to all the shareholders, prior to holding the Annual
covered, the measurement methods applied and time General Meeting, giving due period of notice. Moreover,
frames used. The information provided covers all material for the benefit of all stakeholders, the report has been
matters relating to business strategy, risk and areas of made available in the website http://www.mblbd.com

EXTERNAL ASSURANCE
SL Description of Report External Assurance
MABS & J Partners

01. MBL Financial Statements Audit Report
Chartered Accountants
K M Hasan & Co.

02 MBSL Financial Statements Audit Report
Jahan & Co.
Mercantile Exchange House (UK) Limited
03 Chartered Management Accountants,
Financial Statements Audit Report
UK
MBL Asset Management Limited Financial Hawlader Maria & Co
04.
Statements Audit Report Chartered Accountants
Suraiya Parveen & Associates

05. Corporate Governance Certification
Chartered Secretaries
Provident Fund Financial Statements K M Hasan & Co.

06.
Audit Report Chartered Accountants
Khan Wahab & Co.,

07. MBL Sub-ordinate Bond-I Certification
Ahmed Zaker & Co.

08. MBL Sub-ordinate Bond-II Certification
Emerging Credit Rating Limited

(ECRL)
09. Entity Credit Rating
Moody’s
FEEDBACK AND FURTHER INFORMATION AND SUGGESTIONS
We have strived to respond to your comments and suggestions received during the previous financial year. We welcome
your comments and suggestions on this Integrated Report. For further information and comment you may contact with:
Office of the CFO,

Mercantile Bank Limited,
Head Office, Dhaka.
RESPONSIBILITY FOR THE INTEGRITY OF THE ANNUAL REPORT, 2020
I acknowledge the integrity of the disclosures contained in the Integrated Report which includes coverage on our
sustainability efforts and impacts. The Report comprises of an overview and about our profile that outlines our business
model and the value generation process along with the Management Discussion and Analysis that consists of the overall
business analysis, strategy and the six capital progress reports and disclosures pertaining to stewardship. All these
reports should be read in conjunction with the Audited Financial Statements and other reports given in the Financial
Reports section of the Annual Report. The Board through its delegated authority to the Chief Financial Officer governed
the preparation and presentation aspects of the Integrated Annual Report. I affirm that the Integrated Annual Report
presented herewith has been prepared in accordance with applicable regulatory framework.
Tapash Chandra Paul, PhD

Chief Financial Officer

OVERVIEW
ABOUT
MERCANTILE BANK LIMITED
Journey Towards Consolidating Progress working for innovative and need based banking product
and services. Public confidence is of outmost importance
Mercantile Bank Limited (MBL) was established by a group for the development of banking industry in Bangladesh.
of perceptive investors of aiming significant contribution
Keeping that in mind, MBL ensures a culture of good
to the financial system for sustainable economic growth
corporate governance to thrive. MBL promotes greater
of Bangladesh. Since its inception in June 2, 1999, the
efficiency, accountability and transparency in its business
Bank has created a credible brand impression and
achieved its customers trust and loyalty. The Bank has decision. Another crucial step of MBL is to synchronize
been driven by a bold transformation strategy, dynamic the attitudes, belief and culture in accordance with the
leadership and decisive management interventions which needs of our human resources, clients, stakeholders and
have afforded it a strong platform to capture emerging the overall financial system of Bangladesh. The Bank
opportunities. MBL renders customer services with serves a large customer base comprising individuals and
evolving technology by the cluster professionals and also institutions through a network of:
150 185 20 101 25 02 03
Branches Own ATMs Cash Deposit Agent Banking Islamic Banking Off-shore Subsidiaries
Machines (CDMs) Outlets Windows Banking Units
MBL was enlisted in Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) on February 16, 2004 and
February 26, 2004 respectively.
Principal Activities International/Dual cards with various up-to-date facilities.

Mercantile Bank has started centralized ‘MBL Contact
MBL has been able to establish itself as a leading third Center’ to provide banking services to customers’
generation private commercial bank by dint of its prudent doorstep on 24/7 basis.
policy guidelines coupled with proper execution, wider
range of banking products and admirable customer Ensuring Resilience
services. The core activities of the Bank are to provide all
At the very beginning of 2020, no-one could have
kinds of commercial banking services including Deposits
predicted the ways in which the COVID-19 pandemic
Mobilization, Corporate Banking, SME and Consumer has initiated a global shift in societal, economic and
Businesses, Discounting bills, Foreign Exchange Business, business norms. In this crisis moment, Mercantile Bank
Off Shore Banking, Treasury function, Card business, Limited has been able to respond successfully and
Mobile Banking (MyCash), Internet Banking, Locker reshape its workforce norms and culture to come out
Service and Islamic Banking etc. MBL caters card services stronger than before. The Bank has formulated some
to its customers by VISA dual prepaid card, Credit Card, effective strategies in timely and responsive manner and
Debit card, Agent Banking, VISA Medical Card, VISA implemented these to adjust to the ‘new normal’ from old
International Student Card, VISA Dual Hajj Card and operational paradigms.

During the year, MBL ensures better resilience through following key initiatives:
Accelerating digital Reviewing and Implementing Policy Rendering customer

transformation redesigning operating Measures of Bangladesh services through following
models Bank in response to the WHO and DGHS COVID-19
COVID-19 Pandemic guidelines.
Sustainable Business Practices
The unprecedented COVID-19 crisis has brought business model to ensure a strong balance sheet position
unbearable distress to human life all over the world. even amidst the volatile macroeconomic environment.
Despite facing this crisis, MBL demonstrates strong Meanwhile MBL strives to become a competitive market
commitment to implement sustainable business
player through continuous and ongoing investment
practices. Hence, it formulates business strategies in
in systems, processes and governance mechanism to
consideration with UN Sustainable Development Goals
create a solid foundation to improve performance and the
(SDGs) and focus robustly on asset growth is underpinned
by a solid business strategy that ensures its operations quality of service. To achieve these aspirations, MBL aims
are managed safely, reliably and optimally. At the same to build a pool value-driven, high performing employees
time MBL is committed to improve the resilience of its who are a true embodiment of MBL’s vision.
6,948.46 4,693.04 303.41

(BDT in Million) (BDT in Million) (BDT in Million)
ECONOMIC VALUE DEPOSITED TO COMMUNITY

DISTRIBUTED GOVERNMENT ENGAGEMENT
EXCHEQUER

OVERVIEW
Credit Rating
Emerging Credit Rating Limited (ECRL) has affirmed Mercantile Bank Limited as the following ratings with “Stable
Outlook”.
Rating
Date of Rating Validity
Long Term Short Term
22 May, 2019 22 May, 2020 AA ST-2
22 May, 2020 22 May, 2021 AA ST-2
MBL has been assigned B2 rating by Moody’s, a renowned global rating agency.
Affiliations and membership
Dhaka Stock Exchange Chittagong Stock Society for Worldwide International Chamber of
Limited (DSE) Exchange Limited (CSE) Interbank Financial Commerce Bangladesh
Telecommunication Limited (ICCB)
Association of Bankers, The Institute of Bankers Bangladesh Institute of Primary Dealers Bangladesh
Bangladesh Limited (ABB) Bangladesh (IBB) Bank Management (BIBM) Limited (PDBL)
Bangladesh Association Bangladesh Foreign Exchange Bangladesh Association Factor Chain

of Banks (BAB) Dealer Association (BAFEDA) of Publicly Listed International (FCI)
Companies (BAPLC)

VISION, MISSION
& CORE VALUES
Our Vision
Would make finest corporate citizen.
Our Mission
Will become most caring, focused for equitable growth based on diversified deployment of resources and nevertheless would
remain healthy and gainfully profitable bank.
Core Values
Our seven core values are the foundation of our culture, our brand and our business strategy. These Core values embody who
we are as a company, guide our decisions and inspire us to go ahead.
Customer Delight Innovation Ethical Values

Customer satisfaction pervades all our Spurring innovation for reinforcement We continue to be responsible, ethical,
activities. We appreciate that Customer’s of our business. Origination and sincere and transparent in our thoughts
satisfaction is critical for our success. materialization of change management and actions.
for attainment of perfection and we
believe change is always constant
Caring for Human Resources Commitment Socially Responsible

Realization of latent potentialities We always keep high on the agenda Constant endeavor to act and respond
of employees, respecting individual of our commitment towards valued in a socially responsible manner keeping
worth and dignity to ensure smooth depositors as their trustworthy in mind society and our country.To care
career progression as well as welfare custodian and to maintain the same for our environment.
orientation in Human Resources spirit for all other stakeholders.
Management policy and practices.
Shareholders Value
Creation and Maximization of values
for our shareholders.

OVERVIEW
BUSINESS
ETHICS
MBL believes that business ethics practices provide a foundation for the stability
and sustainable growth of the bank, and supports the bank’s efforts in achieving its
stipulated goals. The bank therefore encourages all parties to conduct business and
perform their duties in accordance with business ethics practices.
The bank conducts its business in The bank complies with various In conducting business, the bank adheres
accordance with the law and regulations standards which are generally to Bangladesh Bank’s instructions while
set by the central bank and other acceptable for conducting the setting interest rates of deposits and
regulatory authorities. The bank does not banking business and always refrain loans. It also keeps our interest spread
finance in any project, detrimental to the from doing aggressive business while (difference between interest rate charged
community or country and thus prohibited extending credit facilities. on loans and interest rate paid on
by the credit policy of the bank. deposits) at or below 3% as advised by
Bangladesh Bank.
The bank offers quality services to its The bank keeps and safeguards To continue and increase CSR
customers with the principles of warm the information of its customers in activities.
friendship and mutual support. The bank confidential and does not disclose such
applies only those charges/fees that are confidential information to others unless
disclosed by the schedule of charges of with the consent of the customers or as
the bank. required by the law.
To remain compliant in the spirit of law

and industry practice.

CODE
OF CONDUCT
Salient features of MBL employees’ code of conduct:
Comply with the Show courtesy and Maintain strict Not accept any outside Not engage directly
various rules, attention to the secrecy of the affairs employment, honorary or indirectly in any
regulations and customers, fellow of the Bank and the or stipendiary, or commercial business,
policies framed colleagues and serve customers. undertake part-time industry or other
by the Bank and the Bank honestly, work in any office of business pursuits or as
other Regulating sincerely, diligently profit without prior agent of others.
Authorities. and with utmost care. written permission
of the competent
authority.
Not absent from duty, Not make any personal Not accept or permit Not participate in Not make or permit
nor leave the station representation to any member of his/her gambling and betting any member of his/
without first obtaining any director of the family to accept any gift or any such activities. her family to make,
the permission of the Board or any outside or subscriptions from a any investment likely
competent authority authority, to intervene constituent of the Bank, to embarrass or
in writing. on his/her behalf in any person likely to have influence him/her in
any matter. dealings with the Bank, discharging official
a subordinate employee duties.
or a candidate for
employment in the Bank.
Not invest money in Not do any activity Not take part directly
the business of the which may undermine in any political activity
Bank’s clients. the prestige or and in any election
image of the Bank or to parliament or
making/ joining any any local authority
organization which is in Bangladesh or
not permitted. elsewhere.

OVERVIEW
STRATEGIC
OBJECTIVES
To increase To achieve To be market To be one of the To be one of the

shareholders’ economic value leader in product top three financial top five financial
value. addition. innovation. institutions in institutions in
Bangladesh Bangladesh
in terms of in terms of
efficiency. market share in
all significant
segments we
serve.
CORPORATE
PHILOSOPHY
Our customers, employees and shareholders are we are constantly developing innovative and
equally important to us. We want to achieve strong technologically advanced products and services
corporate growth through FINANCIAL INCLUSION. that satisfy our customer needs. We offer cutting
We provide solutions at a minimum cost based on edge compensation package and good work
a high level of satisfaction of all segments of our environment to our employees. We never forget our
customers, thus also contributing to the prosperity shareholders to make them pleased with financial
of our employees and shareholders. With a firm well-being and increase their shares value. This has
commitment to provide better customer services, given us a path to the growth and progress.

CORPORATE
PRIORITIES
Ensure customer Enlarge customers Manage credit Mitigate different Strengthen Internal
satisfaction by freedom by risk by diversified risks through Control and
meeting their designing need loan portfolio efficient risk Compliance (ICC)
understanding based banking with emphasis management system to establish
demands with products and on SME, Retail techniques. a very systematic
excellent customer services. and Agriculture and effective
services. financing. compliant culture.
Combination of Focus on green Corporate clients To be transparent, To introduce

skilled human banking by credit rating to accountable and effective products
resources and ensuring eco remain compliant trustworthy in all and services
state-of-art friendly financing. in terms of aspects of our for achieving
technology in regulatory capital banking activities. Sustainable
providing banking requirements. Development
services. Goals (SDGS).

OVERVIEW
CORPORATE
PROFILE
Registered Name Mercantile Bank Limited
Legal Status Public Limited Company
Incorporation No. C-37775 (2075)/99
Date of Incorporation May 20, 1999
Date of Commencement of Business June 02, 1999
Registered & Head Office 61, Dilkusha Commercial Area, Dhaka-1000, Bangladesh
Authorized Capital BDT 12,000 million
Number of Employees 2,428
Number of Branches 150
Number of AD Branches 22
Number of ATM 185
Number of CDMs 20
Swift Code MBLBBDDH
Web www.mblbd.com
Email it@mblbd.com
Fax 880-2-9561213
Telephone 880-2-9559333, 9553892
Accounting Year End December 31
MABS & J Partners

Auditor
Tax Advisor K M Hasan & Co.
Name of Subsidiary Companies Mercantile Bank Securities Limited
MBL Asset Management Limited
MBL MyCash LImited (in the process of finalization)

CORPORATE
ORGANOGRAM
Board of
Directors
Executive
Committee
Company Board
Secretary Audit
(CS) Cell
• Board Managing Director

Division & CEO
• Share
Department
Chief Risk Chief Small Business

DMD
Officer (CRO) Officer (CSBO)
• Human Resources • Credit Risk Management • Corporate Banking

Division Division Division
• Treasury Division (Front Structured Finance • Agriculture Credit
Office) Division
Supply Chain Finance
• Corporate Affairs Division • Research & Planning
• Special Asset Division
• MBL Training Institute
Management Division
• Islamic Banking Division
• Monitoring & Early Alert
Division
• Central Law Division
• Credit Administration
Division
• Risk Management
Division
• Sustainable Finance Unit
• ICT Security Unit
• RMG Monitoring Cell

OVERVIEW
Risk Management Audit

Committee Committee
Audit Unit
Chief Anti Money

Chief Operating
Laundering & Chief Financial
Officer (COO) &
Compliance Officer Officer (CFO)
Head of ICCD
(CAMLCO)
• Mobile Banking • International Division • Regional Offices & • Financial

Division CTPC all other Branches Administration
• IT Division (Operations Only) Division
• Offshore Banking
Digital Banking & • MIS Division • General Services
Division Division
Innovation • Central Clearing
Department • Branches Division • Treasury Mid Office
Department
• Card & ADC Division • NRB Division
• Compliance Unit
• Consumer & Retail • General Banking
Banking Division • Monitoring Unit
Division
• SME Financing • AML & CFT Division
Division
• Treasury Back Office
• Agent Banking
Division
• Institutional Liability
Marketing
Department
• Public Relations
Department

AWARDS &
RECOGNITION
Since its inception, Mercantile Bank has created a credible brand impression nurtured with
the visionary leadership style of our late founder Chairman, Md. Abdul Jalil, with a view
to aiming significant contribution towards Bangladesh economy. The Bank has ensured
customer satisfaction; build up stakeholders’ confidence, community engagement, regulatory
compliance and good governance which are well supported by its compliance status. The effect
is more evident than ever a bank with a clean image, excellent reputation, firm structure and
a competent and committed team. MBL is now all set to focus more on the growth trajectory,
with an unyielding attitude towards upholding the notions, upon which the organization has
been built. During the year 2020, the Bank has demonstrated more resilience in spite of facing
COVID-19 pandemic in addition to other macro-economic variables.
2020
‘20th ICAB National Award 2019’
Mercantile Bank Limited has achieved 3rd prize (jointly) under

category of Private Banking sector in the prestigious 20th ICAB
National Award for Best Presented Annual Reports 2019.
‘Certificate of Merit’ under category of Corporate

Governance
Mercantile Bank Limited has also achieved ‘Certificate of Merit’

under category of Corporate Governance in the ‘20th ICAB National
Award 2019’.

OVERVIEW
Mercantile Bank achieved

‘Daily Industry Best rated
bank Award 2020’
2019
Mercantile Bank Limited achieved ‘Remittance Award 2019’ from ‘Center ‘Bangladesh Brand Forum Award 2019’ as most loved Brand-MyCash
for NRB’.
Mercantile Bank achieved ‘Certificate of Merit’ for the category of

Private Bank in 19th ICAB National Award for Best Presented Annual
Report 2018.
National Productivity and

Quality Excellence Award-2016
Dhaka WASA has awarded Mercantile Bank Limited as the recognition

of one of the highest bill collecting banks.

SPONSORS
OF THE BANK
Md. Abdul Jalil Shamsur Rahman Khan Md. Anwarul Haque

Founder Chairman (Deceased) (Deceased)
Dr. Toufique Rahman Chowdhury Golam Faruk Ahmed Alhaj S.M. Shakil Akhter
(Deceased)
Engr. Mohd. Monsuruzzaman Md. Mizanur Rahman Chowdhury Alhaj Tara Meah Khan
(Deceased)
Subrota Narayan Roy Md. Shahidul Ahsan Jamshed R Khan

(Deceased)
Bilkis Begum Al-Haj Akram Hossain (Humayun) Md. Tabibul Huq

(Deceased)

OVERVIEW
A. S. M. Feroz Alam M. Amanullah Md. Abdul Hannan
Mohd. Selim Feroza Begum S. M. Shafiqul Islam (Mamun)

(Deceased)
A.K.M. Shaheed Reza Nargis Anwar Md. Nasiruddin Choudhury
Mohammed Salam Hossain Jalaluddin Ahmed Yeamin Morshed Alam, MP
Morzina Khan Monzu Md. Shahabuddin Alam

DIRECTORS’
PROFILE
Morshed Alam, MP
Chairman
Mr. Morshed Alam, MP is one of the most eminent 06. Bengal Flexipak Limited – Chairman
business icons of present time in the country. With 07. Bengal Polymer Wares Limited – Chairman
perception and technical expertise, he has become a
08. Bengal Plastic Pipes Limited – Chairman
leading entrepreneur of Bangladesh. He has been the
Member of Parliament of 10th & 11th National Parliament 09. Romania Food & Beverage Limited – Chairman
representing the constituency of 269, Noakhali-2 10. Power Utility Bangladesh Limited – Chairman
(Senbagh-Sonaimuri). He was declared CIP for the Fiscal 11. Hamilton Metal Corporation Limited – Chairman
Year of 1996-1997, 1999-2000, 2008-2009 & 2010-2011 12. Bengal Feed & Fisheries Limited – Chairman
(Export) by the Ministry of Commerce, Government of
13. Designer Fashion Limited – Chairman
the People’s Republic of Bangladesh for his remarkable
contribution in the business arena. He is also recipient of 14. Bengal Retails Limited - Chairman
Prime Minister’s National Export Trophy - Gold during the 15. Bengal Renewable Energy Limited – Chairman
FY 2013-2014, 2012-2013, 2011-2012, 2006-2007, 2000- 16. Linnex Technologies Limited – Chairman
2001, Prime Minister’s National Export Trophy – Silver 17. Euphoria Apparels Limited – Chairman
during the FY 2013-2014, 2012-2013, 2010-2011, 2009-
18. Bengal Cement Limited – Chairman
2010, Prime Minister’s National Export Trophy - Bronze
during the FY 2010-2011, “Best Enterprise Award 2007” 19. Bengal Structure Development Limited – Chairman
(Awarded by DHL / The Daily Star). 20. Bengal Hotel and Resort Limited – Chairman
He is the founder of Bengal Group of Industries which Besides, he is the member of trustee board of The
consists of as following; People’s University of Bangladesh and Director of
Mercantile Bank Securities Limited. He was the Chairman
01. Bengal Windsor Thermoplastics Limited – Chairman of Board of Directors of Mercantile Bank Limited during
02. Bengal Media Corporation Limited (Rtv) – Chairman the year 2013-2014. Being a philanthropist, he founded
03. Bengal Plastics Limited – Chairman Morshed Alam High School at Nateswar, Noakhali and is
04. Bengal Poly Paper Sack Limited – Chairman a life donor member of Kazi Nagar Madrasa and Bazra
05. Bengal Adhesive & Chemical Products High School at Noakhali and Motijheel Ideal High School,
Limited – Chairman Dhaka.

OVERVIEW
Al-Haj Akram Hossain (Humayun) M. Amanullah

Vice Chairman Vice Chairman
Al-Haj Akram Hossain (Humayun) was born on July 1, Mr. M. Amanullah, the founder of the conglomerate, Aman Group
of Companies, is a very respected and distinguished industrialist in
1952 in a respectable Muslim family of Dagonbhuiyan, Bangladesh. His business acumen has lead to the successful launch
Feni. He is a commerce graduate and one of the known of many, diversified businesses, under the umbrella of Aman Group of
Companies and he holds the position of Chairman of the group.
Freedom Fighters of Bangladesh Liberation War. He has
Born and brought up in a business family, Mr. M. Amanullah started
established himself as an icon in the business sector pursuing his own business endeavors since 1968. He introduced Arena
of the country with global reputation of being reliable Industries Limited, engaged in industrial contract-packaging and
Mousumi Enterprises Limited and Arena Consumer Products Limited, for
in various business sectors. He is the Chairman and
distribution and manufacturing of consumer products. He introduced the
Managing Director of FARS group and Vice Chairman India-Bangladesh joint venture, HRI BD, in the field of cosmetic industry
of Mercantile Bank Limited. He was the Chairman of and holds the position of Chairman of the leading manufacturer of
Hair Care products in Bangladesh. He also introduced Arena Securities
Mercantile Bank Limited for the period of 2015-2016. Limited in the financial sector and is the current chairman of Dayton
Holdings Ltd, which are members of Dhaka Stock Exchange and
He is the founder of Rajapur High School & College, registered as corporate houses for operation in the capital market of the
country. In the textile sector Mr. Amanullah set up a manufacturing unit
Al-Haj Shamsul Hoque Miah Adarsha Academy, Khaja in the name of Aman Spinning Mills Limited, which manufactures 100%
Ahmed Bidda Niketon. He was also the Founder export oriented carded yarn & leading the sector as one of the top value
added yarn suppliers. He is one of the Directors of “Amader Shomoy’, a
President of Bangladesh Paper Importers Association, top circulating daily print media in Bangladesh. He is one of the founders,
Former General Secretary of Bangladesh Paper Ex Chairman & present Advisor of the publicly listed company Global
Insurance Limited, and serves as an advisor of Desh General Insurance
Merchants Association and Founder President of Company Limited. He is the past Chairman of Mercantile Bank Limited
Greater Noakhali Paper Merchants Samobay Somittee. and contributed heavily towards the efficiency optimization of Mercantile
He is also the Chairman of Managing Committee of Bank during his tenure. He held the position of Chairman of Mercantile
Bank Foundation during the year 2019-20.
Rajapur High School and College, Al Haj Shamsul Hoque
Mr. M. Amanullah is also recognized for his contribution to the community
Miah Adarsha Academy and Sindurpur Rowshan Ulum and to the nation in the field of education. He is the past Chairman of the
Wadudia Madrasha. He is the founder member and Vice Board of Trustees of Presidency University, Dhaka. He is also the founder
president of Gulshan North Club. For his contribution to the society as a
President of Board of Trustee of Feni University and philanthropist, Mr. Amanullah established “Aman Group Foundation” as
Life Member of Feni Heart Foundation, Feni Diabetic his initiative towards social responsibilities. For this act, he was honored
several times by the Govt. and other organizations. He was awarded the
Somittee, Officers Club, Feni, Feni Somittee, Dhaka, ‘Sarojini Naidu Gold Medal Award’ in 2000, C.R. Das Gold Medal Award
and Founder Member of All Community Club, Dhaka. in 2002 and the Atish Dipankar Scholar Congress Award in 2004 for his
extraordinary contribution in various sectors of Bangladesh. He has been
Apart from the aforementioned affiliations, he is also declared CIP, Commercially Important Person, for many years for his
General Body Member of FBCCI, Bangladesh. significant contribution to the country’s export trade sector.

Md. Anwarul Haque A. S. M. Feroz Alam
Chairman, Executive Committee & Director
Risk Management Committee
Mr. Md. Anwarul Haque was born on January 03, 1951 in Mr. A. S. M. Feroz Alam was born on December 01, 1960
a respected Muslim family in Dhaka. He is a renowned in a respectable Muslim family of Patuakhali. He is a
businessman of the country. He obtained the B.Sc. renowned businessman of the country.
Eng (Civil) Degree from BUET and engaged himself
in business for last 45 years in different sectors like He has traveled about 65 countries for business
Construction, Real Estate, Export & Import and Trading. purpose. He is the Chairman of Bengal Trading Limited
His business affiliation is versatile and diversified. He (Japan). He is the Sponsor Shareholder of Premier
is the Managing Director of Living Plus Limited. He is Leasing & Finance Limited and Chairman of Premier
a Director of Holiday Travels Limited, Premier Leasing Leasing Securities Limited. He was also the Chairman
Securities Limited and Mercantile Bank Securities of Premier Leasing & Finance Limited. He is also
Limited. He is also Director of Securities Broking Founder of Saheda Gafur Ibrahim General Hospital,
& Management Limited. He is a Shareholder & Ex- Kalaiya, Patuakhali.
Chairman of Global Insurance Limited and Sponsor
Shareholder of Premier Leasing & Finance Limited.
His association with the above mentioned well-
reputed organization makes him a forward looking and
progressive-businessman who has already reached an
enviable height. Furthermore, he has deep affinity and
also attachment with various socio-cultural activities
like Gulshan Club Limited, Dhanmondi Club Limited and
Uttara Model Club Limited.

OVERVIEW
Md. Abdul Hannan A. K. M. Shaheed Reza

Director Director
Mr. Md. Abdul Hannan was born on 27th July, 1962 in Mr. A.K.M. Shaheed Reza is an entrepreneur and renowned
a respectable Muslim family at Faridgonj, Chandpur. businessman of the country. By dint of perseverance and
talent, he established himself as a far-sighted and well-
He is one of the leading businessmen of the country, known industrialist and business personality. Among his
especially in export of readymade garments. establishments, Textile and Readymade Garments are the
prime sectors. With new zeal for creation, he has also spread his
He is the Chairman & Managing Director of Dabster step into the arena of mass media. He has praiseworthy pioneer
role in social service and benevolent works of the society.
& Associates Limited, Reu Fashion Limited, ZHAS
Mr. Reza is the Chairman of Reza Group. He was the elected
Garments Limited, M.H. Trading and Murad Apparels President of Feni Chamber of Commerce and Industry and
Limited. He is Director of Eastern University of also Director of The Federation of Bangladesh Chamber of
Bangladesh and Pan Pacific Hospital Limited. He is Commerce and Industry (FBCCI), the apex body of business
community of Bangladesh. He was the Chairman of Global
also the Chairman of the Trustee Board of Sholla Insurance Limited. He has been declared CIP by the Ministry
A. Ali School & College, Faridgonj, Chandpur. His of Commerce, People’s Republic of Bangladesh. He is currently
contributions towards the society are quite remarkable. holding the position of the Chairman of Mercantile Bank
Foundation.
Mr. Reza is associated with number of educational and social
institutions. He has been working as Chairman of the Managing
Committee of Dhalia High School, Bagerhat High School of
Feni district for a pretty long time. Apart from these, he has
massive role for the overall development of infrastructural and
educational environment of some other educational institutions.
He is the founder of Progati Balika Bidda Neketan and Nurul-
Rawnak Diabetics health care centre, Rajnagor, Feni. He is the
life member of Feni Diabetic Association and Vice President of
Heart Foundation, Feni. He is also the Trustee Member and Vice
President of Feni University. Many meritorious poor students
are availing opportunity for getting higher education regularly
through his donation.
Around 30 years of experience in establishing export-oriented
industries put Mr. Reza on the peak of success and his excellency
in corporate management is also exemplary. His experience in
textile and readymade garments will be a guideline for future
generation. Active role of Mr. Reza in enforcing compliance in
fast growing Banking sector will encourage pushing the sector
forward.
Mr. A.K.M. Shaheed Reza after completion of Post Graduation
degree in Management started his career as a Banker in 1986.
But creative aptitude did not allow him to confine in the
services. Ultimately, he quitted the job in 1993 and started his
journey as a business entrepreneur. During this short period he
proved himself as a successful business family of the country.

Md. Nasiruddin Choudhury Alhaj Mosharref Hossain
Director Director
Mr. Md. Nasiruddin Choudhury is a businessman and Alhaj Mosharref Hossain was born on January 07, 1940
entrepreneur of the country. His versatile and diversified in a respectable Muslim family at Chhagalnaya, Feni. He
business affiliation and keen perception in construction had his schooling in the local educational institutions.
and real estate has made him a leading businessperson.
After obtaining B. Sc. Engg (Civil) degree from BUET, Alhaj Mosharref Hossain is one of the leading
he is engaged in business for almost 44 years. His businessmen of the country, especially in trading.
affiliations mainly consist of construction, real-estate, He is the Proprietor of M.H. Traders, a renowned
export and import, trading and travel business. business house engaged in paper trading. Apart from
being a businessman of repute he is also a prominent
Md. Nasiruddin Choudhury is the Managing Director of personality in Bangladesh. He is also a Director of
Technocon Limited, a renowned construction company Toka Ink (BD) Limited. He is the Founder and Director
at home & abroad and also a partner of Techno-Con. He of Hossainya Hefje Quaran Madrasa & Atimkhana,
is the Chairman of Premier Leasing Securities Broking Chhagalnaya, Feni
Limited, Holiday Travels Limited and was the Chairman
of Mercantile Bank Securities Limited. He is a sponsor
shareholder of Premier Leasing & Finance Limited and
shareholder of Delta Hospital Limited.
His contributions toward socio-cultural and professional

activities are quite remarkable. He is a fellow of Institute
of Engineers, Bangladesh, donor member of Gulshan
Club Limited, life member of Dhaka Club Limited,
Dhanmondi Club Limited, Uttara Model Club Limited
and BUET Graduates Club Limited.

OVERVIEW
M. A. Khan Belal Dr. Md. Rezaul Kabir

Director Independent Director
Mr. M.A. Khan Belal was born on 2nd November, 1958 in a Dr. Md. Rezaul Kabir was appointed as an Independent
respectable Muslim family of Begumgonj, Noakhali. Mr. Director of Mercantile Bank Limited in October 2020.
Belal obtained M.Sc (Chemistry) from Dhaka University. He is an Associate Professor of Finance and Coordinator
of the MBA Program at the Institute of Business
Mr. Belal has a high academic background and Administration (IBA), University of Dhaka. Before that he
commendable experience in the field of Trade, Industry, was the Coordinator of IBA’s Executive MBA Program.
Shipping, Banking and other businesses in Bangladesh. He was awarded both his MSc and PhD degrees by
Shamrat Group of Companies Limited is one of the Aston University, United Kingdom. He completed his
leading Group of Companies in Bangladesh and he doctoral degree under the prestigious ‘Commonwealth
is the Chairman of the Group. He is the Chairman of Scholarship and Fellowship Plan’. He has successfully
Mercantile Bank Securities limited. undertaken consultancy assignments on a wide range
of management issues. A few of his clients include Skills
Mr. Belal always remain engaged himself with various
for Employment Investment Program (SEIP), Ministry of
social, cultural, educational and religious organizations.
Finance; Access to Information (a2i) Program, Prime
He is the founder of Gopal Pur Foundation, Al-Haj Aman
Minister’s Office; Police Reform Program (PRP), Ministry
Ullah Khan Ideal Kindergarten and Al-Haj Aman Ullah
of Home Affairs.
Khan Hafezee Madrasha. He is also the Chairman of
Podi Para Fazil Madrasha, Kachihata Dakhil Madrasha He worked as a sessional lecturer at Aston University,
and K.M Bohumukhi Mohila Alim Madrasha. Mr. Belal United Kingdom for almost two years. He was also a
was the Chairman of Gopal Pur Ali Haider High School Visiting Scholar at Queen’s University Belfast, United
and Ex-executive Member of the Siddheswari University Kingdom. He has been relentless in his pursuit to
College. He is also the Vice President of Noakhali remain up-to-date with the latest knowledge and
Zilla Samity, Executive Member of the Mohammedan research in his field and has participated in many
Sporting Club, Dhaka, Member of the Dhaka Club training programs, workshops and conferences in
Limited and also the Member of the Noakhali Club. He different countries around the world.
assumed the office of Region Chairman of the Lions
Club of Dhaka Premier Dist 315-B1, Chairman Mannikka
Nagar Dhakil Mohila Madrasha. Mr. Belal is also Advisor,
Begumgonj Jubo Kallyan Samity, Advisor, Tulachara
Manob Kallyan Club and President, Gopal Pur Ali Haider
High School Ex- Student Kalyan Parishad.
Mr. Belal donates in various sectors like orphanages,

School, Mosque, Madrasha, Sports etc.

Md. Quamrul Islam Chowdhury
Managing Director & CEO
Mr. Md. Quamrul Islam Chowdhury is the Managing

Director and CEO of Mercantile Bank Limited. He was
the Additional Managing Director of the same bank.
He joined Mercantile Bank Limited in February 2001

and was posted as Branch Incumbent of Khatungonj
Branch, Chittagong. He served as Head of Agrabad
Branch, Chittagong, Zonal Head of Chittagong Region
and Head of Main Branch, Dhaka.
He started his banking career in National Bank Limited

in 1983 as Probationary Officer. Mr. Chowdhury later
joined NCCBL holding position of Senior Asstt. Vice
President and Branch In-Charge of Jubilee Road
Branch, Chittagong.
Mr. Chowdhury obtained Master’s degree in Marketing

from Dhaka University. He is highly committed and
successful banker especially in exploring business
opportunities and providing creative solutions for the
difficulties in banking operations. He has a wide range
of experience in International Trade, Card & Retail
Banking and Mobile Financial Services. He converged
training program, seminar & workshop in both home
and abroad viz: USA, Japan, India, Hong Kong, Malaysia,
Singapore etc.

OVERVIEW
CORPORATE
STRUCTURE
Mercantile Bank Limited and its subsidiaries
MERCANTILE
BANK LIMITED
Conventional Off-shore Agent Islamic

Banking Banking Banking Banking
SUBSIDIARY
COMPANIES
Mercantile Bank Mercantile Exchange MBL Asset MBL MyCash

Securities Limited House (UK) Limited Management Limited Limited*
* in the process of finalization

WE
MOURN
Our deepest condolence on the departure of our beloved ones
Md. Abdul Jalil

Founder Chairman
January 21, 1941 - March 6, 2013

OVERVIEW
Md. Tabibul Huq Golam Faruk Ahmed Dr. Matiur Rahman

August 19, 1952 – June 23, 2014 April 7, 1953 – January 26, 2013 January 11, 1946 – September 13, 2012
Shamsur Rahman Khan Alhaj Tara Meah Khan Jamshed R Khan

January 25, 1933 – January 2, 2012 August 30, 1931 - March 16, 2010 July 10, 1943 – August 30, 2008
Mohd. Selim
December 20, 1952- June 26, 2020

OUR
PRIDE
Former Chairmen
Md. Abdul Jalil Alhaj Mosharref Hossain M. Amanullah

Founder Chairman
Morshed Alam, MP Al-Haj Akram Hossain (Humayun) Md. Shahidul Ahsan
A.K.M. Shaheed Reza

OVERVIEW
Former Managing Director & CEOs Former Chief Advisor
M. Taheruddin Shah Md. Nurul Alam Lutfar Rahman Sarkar

Former Governor of Bangladesh Bank
Dewan Mujibur Rahman A.K.M. Shahidul Haque
M. Ehsanul Haque Kazi Masihur Rahman

MESSAGE
FROM THE CHAIRMAN
Morshed Alam, MP
Chairman

OVERVIEW
2020 was a year that

confronted the world
with health, social and
economic challenges
that we could hardly
have imagined. At the
same time, our banking
industry faced the
unprecedented challenge
of implementing the single
digit interest rate from
April 1, 2020 as declared
by Bangladesh Bank.
Dear Stakeholders
AS-SALAMU-ALAIKUM
It’s an honor for me to welcome you all to the 22nd Annual
General Meeting of Mercantile Bank Limited. On behalf
of the Board of Directors, it is my privilege to present the
Annual Report of Mercantile Bank Limited for the year
2020.
2020 was a year that confronted the world with health,

social and economic challenges that we could hardly
have imagined. At the same time, our banking industry
faced the unprecedented challenge of implementing the
single digit interest rate from April 1, 2020 as declared by
Bangladesh Bank.
However, we mastered these twin challenges better

than expected. We are in line with our strategic plan. We

achieved the most of our objectives over the past year. inclusivity and diversity. Such credit facilities and deposit
We recorded an operating profit of 3,947.74 million and mobilization has been made easier to access through
net profit of 2,161.32 million BDT. In other words, we have our efforts to increase our footprint across the country,
been able to more than offset the significant strains of the improving our reach to all through our network of 150
pandemic and ongoing burdens relating to single digit branches, with the opening of 2 (two) more branches this
interest rate implementation. year. Besides, since inauguration in 2020 Mercantile Bank
has expanded its Islamic Banking Window Operations’
2020 for MBL: A resilient performance in the ‘Taqwa’ in its 25 branches at present with the aim to serve
face of crisis the customers who prefer Islami Shariah Based Banking.
We have launched 101 (One Hundred and one) Agent
MBL was focused on maximizing revenue generation, to
Outlets in different places across the country to bring the
identify new business and cementing strong relation with
unbanked population under the banking umbrella.
existing clientele. We experienced steady growth in our
lending volumes which resulted in loans and advances Risk management is ingrained in our culture. We consider,
growing buoyantly by 5.11% year-on-year. In contrast, the in addition to being a threat, risk can turn out to be a real
deposit base fell slightly, decreasing by 3.86% year-on- competitive differentiator if it is managed in a thoughtful
year. In the backdrop of declining market interest rates, way. In line with our business aspirations, we manage
we were conservative in the mobilization of deposits that risk in an open, transparent and disciplined way. Our
were deemed relatively more costly than other sources risk management approach and policies are regularly
of funding available, and hence, we were able to access reviewed and updated to account for changes in the
less costly sources of funding through borrowings on Bank’s business strategies and the external landscape,
the strength of our brand with financial stability and notably spanning legal and regulatory stipulations.
integrity. Our core business of lending remained the main
source of revenue for the Bank, contributing 81.08% to Corporate social responsibility is an integral part of
gross revenue while the non-fund based income being our mainstream business. We want to grow with our
the other main source of revenue came primarily from surroundings particularly with the people who are
fee and commission, trading in shares and the receipt of underprivileged and lack of proper support. Mercantile
dividends. Bank Foundation started its noble operation in 2000.
It is our great pleasure that our Bank spent BDT 304.11
We have experienced 4.56% growth in total assets which million in 2020 for CSR activities. Scholarship to poor
stood at BDT 330,785.56 million as at the reporting date, and meritorious students is one of our most focused CSR
mainly driven by the growth in loans and advances. We initiatives. So far, 856 students have been awarded with
were cautious about the increasing credit risk and took the scholarships. This year we have spent BDT 150 million
steps to strengthen our recovery process to mitigate the for supporting cold, COVID-19 and flood affected people.
impact on asset quality. As a result, the non-performing
ratio moved downward to 4.72%. Our people are the backbone of our business and main
driving force of the MBL brand. The commitment to our
We were very much vigilant to comply with Bangladesh employee is a continuous and ongoing process. Our aim
Bank’s instruction. As a result, our Advance Deposit (AD) is to create an environment where our employees stay
ratio was 84.30% as on December 31, 2020. We have motivated, empowered and feel recognized for their
been gradually scaling our total capital base to facilitate work which enables them to learn and grow with the
the business growth. Presently Capital to Risk Weighted company. In 2020, we recruited 72 new employees who
Assets Ratio (CRAR) is 13.61% where Tire-1 capital ratio is will enrich our diverse workforce. We have also worked
8.67% (Including Buffer) and Tire-2 Capital ratio is 4.94%. for grooming the professional bankers in the industries.
We have introduced “MBL Young Banker Appreciation
We continue to reward our shareholders with healthy
Award ‘’ since 2017 for recognizing young talented private
dividend payout. In the last year we have been paid an
commercial bankers. A total of 10 young bankers were
industry remarkable dividend 11% cash and 5% stock
awarded since then.
dividend. I am glad to announce that the Board has
proposed a 10% cash and 5% stock dividend for this year. MBL achieved ICAB National Award (2nd runner up)
This will be gradually improving through our continuous for Best Presented Accounts and Reports for the year
effort. 2019 and also received ‘Certificates of Merit’ under
corporate governance category which testifies to our
Progress on track despite the pandemic commitment for promoting transparency vis-à-vis our
multiple stakeholders. Furthermore, in recognition of our
The expansion strategy we undertook during the last
unwavering commitment towards best customer service,
two decades has been fruitful towards achieving our
CSR activities and overall good governance, our Bank was
sustainability goals. We have extended credit facilities
awarded “National Productivity and Quality Excellence
to our clientele based on the sustainability precepts of

OVERVIEW
Award- 2016” by National Productivity Organization (NPO) Honorable Governor and other officials of Bangladesh
under the Ministry of Industries of the Government of the Bank, Bangladesh Securities and Exchange Commission,
People’s Republic of Bangladesh. Dhaka Stock Exchange, Chittagong Stock Exchange,
respected Shareholders, valued Customers, Patrons and
Outlook: on track for sustainable profitability well-wishers for keeping their faith on us. I sincerely extend
my thanks to MABS & J Partners, Chartered Accountants
Challenges will continue to emerge during 2021, not
for carrying out the external audit professionally and
least because the fight against the pandemic continues.
advising us on various compliance issues. I would also
Nevertheless, we expect economic activity to return
like to express my gratitude to our Managing Director &
in many markets that are important for our business,
CEO and the Senior Management team for their ongoing
especially with the roll out of vaccination programmes.
commitment to deliver our strategy every day. I also
We had a strong start to 2021 and we continue to expect
thank my fellow board members for their contributions
our revenues to increase year-on-year as industry
to guiding the bank and wise counsel. This Bank exists
volumes and volatility normalize. This is expected to result
in marginally higher bank’s revenues year-on-year before because of its 4,765 dedicated employees including
growth resumes in 2022 in line with our projections. At the support staff who work every day to add value to our
same time, we expect loan loss provisions to decrease 1.14 million plus clients. I am grateful for their ongoing
slightly in 2021 and to decline further in 2022. commitment to embracing change, ensuring MBL leads
to the competition while living a strongly ethical culture.
And we continue to see opportunities for the coming
years. We are well positioned for an economic We have entered 2021 with a more positive outlook as the
environment which is on the verge of graduation to a year has marked the country’s 50 years as an independent
middle income country. Even when the economy is facing nation as well as the birth centennial of the father of the
major upheavals due to the current pandemic situation nation. Against all odds I am excited by the opportunities
banking sectors are being called on to support and help we have to contribute to the strong growth track of our
shape its recovery. We are ideally positioned to do so and country and to help improve the lives of all citizens.
to benefit from the process of recovery.
Our aim is to achieve sustainably and to remain firmly

Best regards,
committed to our plans. To do so, we must continue along
this path, the path towards a bank that is sustainably
profitable and that is even better positioned for our
clients, the economy and society.
Appreciating the Tireless Efforts
On behalf of the Board, I would like to thank the Morshed Alam, MP

Government of the People’s Republic of Bangladesh, Chairman

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OVERVIEW
TOP MANAGEMENT
TEAM

Mati Ul Hasan
Additional Managing Director & CRO
G.W.M. Mortaza
Deputy Managing Director
Md. Zakir Hossain

Deputy Managing Director & COO
Adil Raihan
Deputy Managing Director & CSBO
Shamim Ahmed
Deputy Managing Director & CAMLCO

MESSAGE FROM
MANAGING DIRECTOR & CEO


OVERVIEW
The Govt. declared

special holidays from
the last week of March
till the end of May,
2020 initially. In this
period, the economy
had literally come to
a standstill. Although,
banks were open but to
a very limited extend.
Dear Stakeholders
AS-SALAMU-ALAIKUM
Against the backdrop of Covid-19 breakout in china in
December 2019 and possible single digit interest rate
implementation plan doing the rounds; the year 2020,
though the year was full of uncertainties with regard to
life and livelihood caused by Covid-19, started as the year
of consolidation for Mercantile Bank Limited (MBL). At
the start of the year, MBL set out to nurture the portfolio
in hand rather than going for too much expansion in
business. Later from April 1, 2020, the Government did
go on to implement the single digit interest rate. The
bank has always prioritized the concept of sustainability
and thus on that note the year 2020 had begun. With
unprecedented challenges in the year 2020, like all the
other great banking companies, Mercantile Bank Limited
(MBL) found a way to persevere through. From the very
beginning, MBL has constantly challenged the status
quo and strived for even greater levels of excellence
by asking the hard questions and adapting. And adapt

we did, by complying with all the regulatory norms set 2007-09 as the pandemic stalled almost all sectors of the
out during this pandemic period by various regulatory economy because of the rapid contagion. So deep is the
authorities, by maintaining adequate provision to ensure plunge in global output that the global economic growth
adequate capital base, we have been able to successfully contracted by 4.3 percent. The pandemic severely
weather this storm relatively unscathed given the return weakened global trade, consumption, services, and the
generated for our shareholders. labor market in both developed and emerging markets.
Global trade contracted by nearly 3.5 percent (year over
The first case of Covid-19 was detected in Bangladesh
year) in the first quarter, reflecting weak demand, collapse
in the month of March, 2020 and then in the later
in cross-border tourism, supply chain disruptions, and
days, the cases kept on increasing. This confronted the
supply dislocations triggered by shutdowns across the
Government with a conundrum that no other before it
world. Inflation in Bangladesh has decreased to 5.29%
had to face. That is to make sure that the spread of the
in December 2020 from 5.57% in January 2020 as the
virus be halted. The Govt. declared special holidays from
overall economy has slowed down during the year 2020.
the last week of March till the end of May, 2020 initially. In
this period, the economy had literally come to a standstill. Bangladesh’s government and Bangladesh Bank (BB)
Although, banks were open but to a very limited extend. In undertook a range of coordinated fiscal, monetary,
this situation, Mercantile Bank Limited came forward and and macro-prudential policy actions which included
provided services to its customers through digitalization stimulus packages and easy credit availability in order
as well as conventional means so that the customers can to cushion the Bangladesh’s economy from the fallout
fulfill their banking needs. from the pandemic. The overriding objectives of these
To understand how the pandemic has affected policy measures are to minimize the negative impacts
Bangladesh as well as other South Asian economies, one of the pandemic and to bring economic activities
has to look at various publications by the Bangladesh back to the pre-COVID-19 level. These policy measures
Bank. Some of the highlights of these reports project are expected to make financing conditions easy for
the scenarios. COVID-19 pandemic continued to spread investors, entrepreneurs, and corporate bodies who now
and impacted Bangladesh economy since March 2020, can access more favorable financing sources to resume
reflecting a sharp decline in growth rate of real gross their business in full swing. It is likely that the economy
domestic product (GDP) to 5.24 percent in FY20 as will recuperate from lost investment and consumption
compared to a record high of 8.15 percent growth in FY19 and bounce back to the economic growth momentum
. Likewise, other South Asian countries are not exception observed in the last decade. In most of the policy
as being affected by COVID-19, slowing down their measures, Banks have been in the forefront of all the
economic growth as well. In response to combat against economic activities i.e. disbursement of stimulus package
the possible economic disruptions because of the that has been declared by the Bangladesh Government.
pandemic, South Asian countries including Bangladesh As the facilities will be funded from banks’ own source,
have taken extensive fiscal measures depending on their Bangladesh bank has set the ‘Advance Deposit Ratio
own capacities. The economic growth of Bangladesh (ADR)’ at a higher rate than usual.
decelerated to 5.24 percent in FY20 from 8.15 percent in
FY19 in the aftermath of the economic slowdown caused Mercantile Bank is committed to serve the nation so that
by a government-declared lockdown for around two the country can recover from this Covid-19 situation. For
months in the first half of FY20 to prevent the contagion that it has been working tirelessly to disburse the stimulus
of COVID-19 pandemic. The domestic demand, which package that has been assigned to the bank. The Govt.
comprised of consumption and investment, moderated has already declared a stimulus package of Tk. 50,000
to 4.23 percent and 6.71 percent respectively in FY20 from million for the Agriculture sector. The bank has realized
4.33 percent and 8.44 percent respectively in FY19 but the that agriculture will play one of the most crucial roles in
external demand (exports) drastically contracted in FY20 overcoming the financial crisis. That is why, although the
as a consequence of unprecedented, negative growth of central bank has given a timeline of upto March 31, 2021
the global economy. Unfortunately, the economic growth to disburse Tk. 700 millions, we have already disbursed
of the European Union and the USA turned from positive Tk. 486.5 million upto December, 2020 which constitutes
in 2019 to negative in 2020 owing to severely restricted about 70% of the target achieved. We are confident
economic activities and diminished demand caused that in the rest of the time remaining, we will be able to
by the rampant spread of the pandemic through these fulfill our target and contribute significantly in recovery
regions to which Bangladesh tended to export more than of the sector in which most of the country’s workforce
80 percent of its ready-made garments RMG. In the first is employed. Also in the financial inclusion as well, the
half of 2020, global economic activities suffered a faster bank has disbursed Tk. 260.6 million, which is quite high
and deeper contraction than in the financial crisis of compared to overall statistics.

OVERVIEW
About a quarter of the population work in the SME Sector the month of May, 2017 and applies to annual reporting
of the country and during the Covid-19 this sector was periods beginning on or after 1 January, 2023. The Banks
hit quite badly. That is why Govt. allocated Tk. 200,000 can adopt this standard earlier. MBL has not yet assessed
million to this sector. Although only about a quarter of in potential impact of IFRS 17 on its financial statements.
the total stimulus package has been disbursed by all the Apart from this, there are no other standards that are
financial institutions combined, Mercantile Bank Limited not effective and that would be expected to have a
has been one of the better performing banks by disbursing material impact on the bank in the current or future
Tk. 2,019.4 million of its’ allocated Tk. 3,220 million, which reporting periods. The bank has registered a profit that
constitutes about 63% of the target achieved. is competitive, build a strong base for itself for any future
turmoil, improved its’ capital base at a level which is quite
The sectors mentioned above were the worst affected
higher than required by the regulators. It is important
sectors during the Covid-19 pandemic and comprises of
to note that 2020 has been a tough year for the whole
people who are not rich. As a result, by extending more
banking industry. Covid-19 pandemic coupled with a bar
support to these sectors Mercantile Bank Limited has
of 9% in the loan interest rate has made the situation
lived upto its’ reputation of being the bank for the people
really tough for all the financial institutions. That is why,
of Bangladesh.
we are happy to be able to curtail the interest expenses
Despite the tough situations posed and the obligations which is Tk. 16,732.2 million upto December 2020 as
put forth by the central bank, the Bank was always compared to 18,116.2 million on 2019. The less interest
focused on providing maximum returns while ensuring expense has been made possible because of the more
sustainability. While doing so, MBL has not strayed away favorable deposit mix. The bank was able to reduce its’
from complying with all the applicable accounting the high cost deposit percentage and increase the No
policies. Bank like the past years has complied with all and low cost deposit percentage. As a result of it, we
the accounting policies. There have been no significant have been able to reduce the Cost of Deposit from 6.92%
changes in accounting policies compared to last year. to 5.32% . This reduction has allowed the bank to maintain
We would like to mention that IFRS 17 was introduced in a favorable Interest rate spread.
Interest Expenses (BDT in Million) Cost of Deposit
18,116.20 6.47% 6.92%

16,277.03 16,732.20
6.12%
2018 2019 2020 2018 2019 2020
In the case of Loans & Advances, it has increased to Tk. 248,994.4 million in 2020 from 236,890.4 million in 2019 marking
a 5.11% increase from last year. In spite of the increase in loan the NPL (Non performing Loan) ratio actually improved from
4.86% in 2019 to 4.72% in 2020.
Loan Amount (BDT in Million) Non-Performing Loan Ratio

248,994.38
236,890.45 4.82% 4.86% 4.72%
224,230.61
2018 2019 2020 2018 2019 2020

In 2020, the Bank has registered a steady performance named ‘MBL Rainbow’ has been added, which will make
in terms of foreign business. The Import Business of the the banking more customer friendly and digitalized which
Bank stood at Tk. 172,773.5 million whereas the Export is in line with the country’s goal of becoming ’Digital
stood at Tk. 135,418.1 million. The fact that, we have Bangladesh’. With this facility, the customers will be able
been able to achieve 86% of our target in Import and perform contactless banking more efficiently which is the
85% of our target in export is quite remarkable under need of the hour currently.
the prevailing economic situation. During the year under
review, the Bank also handled remittance business of Tk. In spite of the Govt. holidays and overall slowdown in
30,893.0 million. the economy, MBL has not stopped expansion of its
operation. During the year, MBL has opened 02 (Two) new
We are committed to maintain a strong capital base to branches. But, we have been able to expand our services
support business expansion, provide a cushion against to different parts of the country through 101 agent
unforeseen risks, safeguard shareholder wealth and banking outlets. Along with this, we are going to open 10
foster investor confidence. The policy allows taking Sub-branch in various part of the country. This will help us
advantage of emerging opportunities and invests further in reaching more unbanked population which has always
in the core business to enhance shareholder returns. been a target of the Bank. Along with traditional banking
The Bank’s capital management framework includes a services, Bank has opened an Islamic banking window
capital adequacy assessment process to ensure that named ‘Taqwa’ to cater the needs of the customers who
the Company can mitigate current and future risks and are willing to get Shariah based banking service.
achieve its strategic objectives. We maintained capital
to total risk weighted asset (CRAR) consistently over In 2020, Mercantile Bank Limited received some notable
the period above the threshold of minimum capital awards and recognition from various authorities.
requirement. MBL’s CRAR was 13.61% as on 31 December Mercantile Bank Limited has been awarded jointly the
2020 against the required MCR of 12.5% (Including capital 3rd (Third) prize for Best Presented Annual Reports
conservation buffer). Award under the banking sector (private) category,
and Certificate of Merit under Corporate Governance
Banks are always prone to risks. Bangladesh bank has Disclosure Award in 20th ICAB National Award based on
provided the banks with guidelines addressing the risks the Annual report of 2019.
and ways to mitigate these risks. One of the risks that need
quite an attention is the cyber security risk. Due to current I would like to thank the MBL team for their passion and
advancement in digitalization, this needs more attention effort to attain the corporate vision, mission and strategic
than ever before. Realizing this, MBL has a dedicated ‘ICT objectives at the same time ensuring that our core value
Security Unit’ from September, 2019 to specially look after remains consistent. My sincere note of gratitude goes
the threats arising from cyber activities. The department to our dynamic Board of Directors for their valuable and
conducts quizzes quite a few times in a year. This way judicious policy support and timely decisions to steer the
all the employees get educated about the recent cyber Bank for being the best corporate citizen.
security issues and that helps prevent any kind of cyber
Lastly, on behalf of my team, I would like to express
threat that may face the bank.
my sincere gratitude and acknowledgement, to all our
During the year ended 2020, all the financial indicators regulatory authorities such as Bangladesh Bank, NBR,
of the bank i.e. EPS, portfolio growth, profit growth, NPL BSEC, DSE, CSE and RJSC&F for their continuous support
etc achieved stable positions. The EPS and NAV stands and guidelines from time to time.
at BDT 2.20 and 22.46 respectively. The Bank has uplifted
to the rating of ‘B2’ from Moody’s from ‘B3’ the previous
year. The Bank also holds a local credit rating of ‘AA’ with a Wishing you all the best.
Stable Outlook from Emerging Credit Rating Limited.
MBL provides various kinds of Alternate Delivery Channels

like ATM, Debit Card/ Credit Card, Mobile Banking &
Internet Banking services and many new customer centric
products. The Bank has been trying to reach more and
more people through its network of 150 Branches, 185 Md. Quamrul Islam Chowdhury
ATMs and 20 CDMs Along with these, a digital platform Managing Director & CEO

OVERVIEW
SENIOR MANAGEMENT
TEAM PROFILE

Mr. Md. Quamrul Islam Chowdhury is the Managing Director and CEO of
Mercantile Bank Limited. He was the Additional Managing Director of the
same bank.
He joined Mercantile Bank Limited in February 2001 and was posted as

Branch Incumbent of Khatungonj Branch, Chittagong. He served as Head of
Agrabad Branch, Chittagong, Zonal Head of Chittagong Region and Head
of Main Branch, Dhaka.
He started his banking career in National Bank Limited in 1983 as Probationary

Officer. Mr. Chowdhury later joined NCCBL holding position of Senior Asstt.
Vice President and Branch In-Charge of Jubilee Road Branch, Chittagong.
Mr. Chowdhury obtained Master’s degree in Marketing from Dhaka University.

He is highly committed and successful banker especially in exploring
business opportunities and providing creative solutions for the difficulties
in banking operations. He has a wide range of experience in International
Trade, Card & Retail Banking and Mobile Financial Services. He converged
training program, seminar & workshop in both home and abroad viz: USA,
Japan, India, Hong Kong, Malaysia, Singapore etc.
Mati Ul Hasan
Additional Managing Director & CRO
Mr. Mati Ul Hasan is the Additional Managing Director and CRO of Mercantile
Bank Limited. Over 37 years of experience in the financial sector, he has
been working in Mercantile Bank since 2014. He joined IFIC Bank in 1st April,
1984 as Probationary Officer. He has experience of 10 years in oversees
operation of IFIC Bank Limited in Pakistan and 2 years in Nepal Bangladesh
Bank Limited, Nepal (Joint Venture of IFIC Bank Limited). He was the Head
of overseas branches in Pakistan and DMD in Nepal, Head of Branch of Local
Office at IFIC Bank Limited, Motijheel, Dhaka. He completed B.S.S. (Hons)
in Economics from Dhaka University and Masters in Bank Management. He
is a Diplomaed Associate of Institute of Bankers, Bangladesh (DAIBB) and
Associate Member of Institute of Bankers- Pakistan.

G.W.M. Mortaza
Mr. Mortaza has over 36 years of banking experience with BSB, BASIC,
EBL, Trust, Dutch Bangla, The City, Bank Asia, BCBL in different capacities.
His expertise ranges from Corporate Banking, Foreign Exchange, Credit
Functions, Special Asset Management, Branch Banking Operations and
Credit Administration. He had schooling from Mirzapur Cadet College
and did his M.Com (Finance), and MBA from IBA, University of Dhaka. Mr.
Mortaza was awarded by the Rotary International, USA as an outstanding
young professional from Bangladesh and had an on-the-job training in
different Banks in Virginia & Tennessee, USA. Further, he was recognized by
the South Asia Enterprise Development Facility (SEDF), a concern of IFC/
World Bank and assigned as one of their resource persons as a Trainer in
different banks on Core Risk Management on behalf of Bangladesh Bank.
Md. Zakir Hossain

Deputy Managing Director and COO
Mr. Md. Zakir Hossain is a seasoned banker with over 27 years of experience
in the banking industry of Bangladesh. He has been serving MBL since it’s
inception in various capacity and positions at Branch and Head Office.
He was the Head of 3 (three) leading Branches including Main Branch of
the Bank and Head of Corporate Banking Division. As DMD & DCBO he
supervised 4 (four) Divisions i.e. Corporate Banking Division, Agriculture
Credit Division, Research & Planning Division and Islamic Banking Division
of the Bank. At Present, he is the Chief Operating Officer (COO) of the
Bank. He has experience of working as a member of the committee for
Review of Credit Risk Management Guidelines and of the committee for
formulation of Guidelines for Internal Credit Risk Rating (ICRR) System of
Bangladesh Bank. Mr. Zakir is a Finance graduate from University of Dhaka
with major in Banking.
Adil Raihan
Deputy Managing Director & CSBO
Mr. Adil Raihan has over 22 years of experience in Banks and Financial
Institution including ANZ Grindlays Bank, Standard Chartered Bank Ltd,
GPS Finance company (BD) Ltd, Prime Bank Ltd, The Premier Bank Ltd,
One Bank Ltd and Bank Asia Ltd. He played the role of Customer Service
Manager, Assistant General Manager & Head of Credit & Marketing, Head
of Retail Banking & Cards, Head of Mobile Financial Service, Agent Banking,
Cards, Alternative Banking Channels & Project Management and Head of
Information Technology & Channel Banking. He completed graduation and
post graduation from India.

OVERVIEW
Shamim Ahmed
Deputy Managing Director and CAMLCO
Mr. Shamim Ahmed has over 28 years experience in the Banks including United
Commercial Bank Ltd and Prime Bank Ltd. He is with Mercantile Bank Limited
since June, 1999. He completed his B.Sc. (Hons), M.Sc. in Statistics from
University of Dhaka. He has specific expertise on Foreign Trade, Treasury, AML
& CFT Banking Operations and branch banking. He is selected as a Trainer for
outreach training program on “Foreign Exchange Risk Management” designed
for the ‘Training of Trainers’ arranged by Bangladesh Bank Training Institute and
South Asia Enterprise Development Facility (SEDF). He participated in a good
number of training program at home and abroad in International Trade & Foreign
Exchange, AML & CFT, Credit, Banking operations etc.
Md. Mahmood Alam Chowdhury

Senior Executive Vice President
Head of Special Asset Management Division
Mr. Md. Mahmood Alam Chowdhury possesses more than 32 years of experience
on the banking sector. He has special expertise on credit assessment, legal
aspects for setting up of terms and conditions and documentation, innovative
ideas, leadership etc. After completion of his post graduation in History from the
University of Dhaka he started his banking career from National Bank Limited as
Probationary Officer in 1988. Before joining in Mercantile Bank Limited on June 01,
1999 he also worked for NCCBL and then Prime Bank Limited. During the period
Mr. Chowdhury gathered his experience both in branch and head office banking
at different capacity. In Mercantile Bank Limited he assumed the responsibilities
of Head of Human Resources Division, Head of Central Law Division, Head of Audit
& Inspection Division, Head of Public Relations Division, Head of Branches and
Marketing Division, Head of Main Branch, Banani Branch, Kawran Bazar Branch and
Engineers’ Institution Branch. He attended professional training program in and
abroad on Banking Operations, Industrial Project Finance, Credit and in Foreign
Trade. He was a professional hockey player in Dhaka First Division Hockey League.
He travelled to India, Thailand, Malaysia, Germany, France etc.
A.K.M. Atiqur Rahman

Senior Executive Vice President and CTO
With more than 25 years banking experience, Mr. A.K.M. Atiqur Rahman is an IT
Specialist who has proven his competencies and given policy formulation to IT
Division of the Bank over the years. He has also diversified his career contributing
to risk management, mobile banking, agent banking, contact center, card
operation, and information management technology. He had contributed 3 years
in Pubali Bank as an Analyst Programmer in his early career. He was graduated
in Computer Science & Technology (from Indiana State University, USA) and
MBA in Management. He had received job exposure and formal training on IT
and Management practice, Leadership, IS Audit, Electronic Certification System,
Database, Programming, Troubleshooting etc. from home and abroad. He had
contributed successfully in the completion of several infrastructure migrations
and led the SWIFT, BACH, EFT, RTGS, Digital platform with mission critical projects.
Led the roll out plan to convert legacy system to true centralized system across the
bank including process re-engineering. Optimized and managed the technology
network in a manner that delivers high efficiency with sufficient resilience, security
and manages costs effectively. He had analyzed and identified real needs of the
organization and selected ideal solutions, also initiated in-house developments in
a timely manner to help increase operational efficiency.

Ashim Kumar Saha
Head of Treasury Division
Mr. Ashim Kumar Saha has completed Post-Graduation in Accounting from

University of Dhaka. Over 29 years of experience in the banking sector, Mr.
Ashim Kumar Saha has expertise on Government Securities, Local & Foreign
Currency Management, ALM Analysis and Risk Management. He is also
expertise in private bonds and equity market. He started banking career in
1990 with Uttara Bank Limited as Probationary Officer. He worked at NCC
Bank Ltd for 20 years. During the tenure of NCC Bank Ltd, he worked in
Financial Administration Division and thereafter taking the responsibility of
Treasury Division Front Office. On 10th August 2016, he joined Mercantile
Bank Ltd as Senior Executive Vice President and Head of Treasury. He is
serving as the Member Secretary of ALM, Investment Committee and
member of SMT, Credit Committee, etc. He is also instrumental in integrating
the entire Treasury Operation with in- house IT solutions.
He has attained different professional training programs and workshop in

USA, India, Thailand, Malaysia, Sri Lanka, Hong Kong, Japan & Indonesia
vastly for developing bonds and equity market in Bangladesh. He is a
Convener, Technical committee of PDBL. He is a member, Technical
committee of BAFEDA. He is a Registered Income Tax Practitioner.
Shah Md. Sohel Khurshid

Head of Corporate Banking Division
Mr. Shah Md. Sohel Khurshid with 29 years banking experience has
expertise in the area of General Banking, Import, Export, Corporate &
Retail Credit and SME financing at Branch & Head Office level. He joined
as Probationary Officer in United Commercial Bank Limited on September
16, 1991. In April, 1997, he joined Dhaka Bank Limited. He has been
working for Mercantile Bank Limited from December 1999. He completed
BSS, MSS and MBA. He attended a good number of Training & Workshop
programs on almost all windows of banking both home and abroad. He
travelled many countries like India, Malaysia, Germany, France, Nederland,
Switzerland, Thailand, Singapore and Vietnam.

OVERVIEW
Mohammad Iqbal Rezwan

Senior Executive Vice President & DCRO
Head of Human Resource Division
Mr. Mohammad Iqbal Rezwan has 24 years of professional exposure in

banking industry in various capacities. He started his banking career in Arab
Bangladesh Bank as Probationary Officer in 1994. He also served in different
banks like HSBC, Premier Bank, Trust Bank holding important positions
in different Branches and Head Office. Mr. Rezwan has been serving
Mercantile Bank Limited as Head of HR Division since 13th December, 2015.
Mr. Rezwan did his Honors and Masters in Economics from Chittagong
University. Later on, completed Masters in Bank Management (MBM) from
University of Science and Technology, Chittagong. Besides, Mr. Mohammad
Iqbal Rezwan is an alumnus of the Economics Department of the University
of Chittagong. He attended numerous seminars, workshops and training
programs at home and abroad.

Mr. Tapash Chandra Paul, PhD has more than 2 (two) decades of diversified
experience in Banking Sector. He has sound academic track record. Having
completed his B.Com (Hon’s) & M. Com from University of Dhaka and
obtained MBA from reputed university, Mr. Paul was also awarded PhD for
his contribution in Research work on Strategic Management of Commercial
Banks in Bangladesh. He has attended a good number of training courses,
workshops & seminars/webinars at home & abroad. He is a regular trainer
at the Mercantile Bank Training Institute and the training institutes of other
Banks/FIs. He delivers both nationally & internationally as a keynote speaker
in the field of Finance, Banking, and Economics & Risk Management.
He writes insightful and informative articles regularly on Banking and
Economics in the widely circulated National dailies.

HEAD OF
DIVISIONS

OVERVIEW

DIVISIONS
DEPARTMENTS, UNITS & CELLS AT HEAD OFFICE
Risk Management Division RMG Monitoring Cell

Mati Ul Hasan, AMD & CRO K. M. Anowarul Islam, VP
Internal Control & Compliance Division General Banking Division

Md. Zakir Hossain, DMD & COO Muhammad Khorshed Alam, VP
Special Asset Management Division Treasury Back Office

Md. Mahmood Alam Chowdhury, SEVP Muhammad Sharif-ur-Rahman, VP
Information Technology Division General Services Division

A. K. M. Atiqur Rahman, SEVP & CTO Md. Gias Uddin, VP
Treasury Division (Front Office) Branches Division

Ashim Kumar Saha, SEVP Mohammad Hossain, VP
Corporate Banking Division International Division

Shah Md. Sohel Khurshid, SEVP S. M. Mahbubul Alam, VP
Human Resources Division Compliance Unit

Mohammad Iqbal Rezwan, SEVP & DCRO Md. Abul Kashem, FVP
Corporate Affairs Division Monitoring Unit

Ahsanul Haq Chowdhury, EVP Syed Tariqul Islam, FVP
Credit Administration Division Central Clearing Department

Md. Ata Rabbani Chowdhury, EVP Md. Almasuddin Ahmed, FVP
Research & Planning Division NRB Division

Abu Syed Md. Mohiuddin, SVP Md. Toriqul Islam, FVP
Central Law Division Digital Banking & Innovation Department

Md. Moshaddeque Hossain, SVP Noor Mohammad Shafi Kamal, FVP
Board Division & Share Department Off-Shore Banking Division (OBD)

Abu Asghar G. Haruni, SVP Md. Faruk Hossain, FVP
Audit Unit Agent Banking Division

Md. Enayet Ullah, SVP Darpan Kanti Roy, FVP
Card & ADC Division Islamic Banking Division

Md. Abu Sakin, SVP Mohammad Mijanur Rahman Sharker, FVP
Agriculture Credit Division Financial Administration Division

Liaquat Fazlur Rashid, SVP Abhijit Kumar Saha, FCA, Head of Division
Consumer & Retail Banking Division Treasury Mid Office

Md. Ashiqur Rahman, SVP Mohammad Zahid Hafiz Khan, AVP
Credit Risk Management Division & SFU Intitutional Liability Marketing Department
Shamim Ahmed, SVP Tapon James Rozario, AVP
Board Audit Cell ICT Security Unit

Md. Nurul Alam, VP Md. Faisal Hossain, AVP
AML & CFT Division Mobile Banking Division

Md. Nasim Alam, VP Md. Abdul Aziz, FAVP
SME Financing Division MBL Contact Center

Basudeb Paul, VP Aneek Rahman, SEO
MIS Division
Mohammad Faruque Ahmmed, VP

OVERVIEW
REGIONAL
OFFICES
Chattogram Regional Office, Chattogram North Bengal Regional Office, Bogura Cumilla Noakhali Regional Office, Feni
Mishkat Arcade (Level-1) Zamzam Tower, Jaleswaritola, 361, S.S.K Road, Rajnagar Complex,
21/1, Agrabad C/A, Chattogram Kalibari Moor, Bogura Sadar, Feni Sadar, Feni - 3900
Phone: 031-2529445 (ZH), 716421, Bogura - 5800 Phone: 01713-193961, 01701-209793
723181, 721772 Phone: 01701-209794, 051-71002 Regional Head: Md. Mahfuzul Karim, VP
Fax: 88-031-2529445 Regional Head: A.S.M. Zakir Hossain, SVP
Regional Head: Jashim Uddin, SVP
MERCANTILE BANK
TRAINING INSTITUTE (MBTI)
Mercantile Bank Training Institute

Swadesh Tower, 41/6 Purana Paltan,
Dhaka-1000
Phone: 7174016
Fax: 88-02-9571096
Principal: Javed Tariq

BRANCH
NETWORK
RANGPUR
SYLHET
B a y o f B e n g a l

OVERVIEW
HEADS OF
BRANCHES
Dhaka Region
Main Branch Dhanmondi Branch

Mia Amanullah Bhaban, Sima Blossom, House- 03,
Road- 16 (New), 27 (Old)
63 Dilkusha C/A, Dhaka-1000
Dhanmondi R/A, Dhaka -1209
Phone: 02-9571618, 9559333 Phone: 02-5815384,
Mobile: 01711535950 9130500, 9142691
HOB: Md. Abdul Halim, EVP Mobile: 01711-409191,
01711-546396
Fax: 88-02-58151844
HOB: Farid Ahmed, SVP
Kawran Bazar Branch Joypara Branch

Dhaka Trade Centre Samabay Super Market
99 Kazi Nazrul Islam Avenue Joypara Bazar, Dohar, Dhaka
Kawran Bazar, Dhaka- 1215 Phone: 02-7768163
Phone: 02-8189613, 5815687 Mobile: 01711-535949
Mobile: 01730-320284 (HOB) Fax: 88-02-7768193
Fax: 88-02-58156870 HOB: Md Abdul Mannan, VP
HOB: A B M Eradul Islam, EVP
Banani Branch Board Bazar Branch

Ahsan Tower, Mansur Super Market
56 Kemal Ataturk Avenue, (1st & 2nd Floor)
Banani, Dhaka-1213 Board Bazar, Gazipur
Phone: 02-9821962 Phone: 02-9293639, 9291604
02-9821639-40 Mobile: 01713-044846 (HOB)
Mobile: 01713-083617 Fax: 88-02-9291660
Fax: 88-02-9821046 HOB: Md. Akram Hossain, FVP
HOB: Md. Fakhruzzaman
Chowdhury, SVP
Nayabazar Branch Mohakhali Branch

25/1 Zinda Bahar (1st Lane) Green Delta Aims Tower
Nayabazar, Dhaka-1100 51-52 Mohakhali C/ A,
Phone: 02-57390869, Dhaka-1212
57393827 Phone: 02-9863215, 9891520,
Mobile: 01713-199827 9888346
Fax: 02-57393655 Mobile: 01713-068127,
HOB: Md.Humayun Kabir, VP 01711-409191
Fax: 88-02-9895797
HOB: Md. Abdul Awal, EVP
Mirpur Branch
Razia Plaza, 184 Senpara Ashulia Branch
Parbata Bhuiyan Commercial Complex
Begum Rokeya Sarani Jamgora Chowrasta,
Mirpur-10, Dhaka- 1216 Ashulia, Savar, Dhaka
Phone: 02-9014582, 9008852 Phone: 02-7788758, 7790491
Mobile: 01755-502191 Mobile: 01708-490257,
Fax: 88-02-8034577 01711-535948 (HOB)
HOB: Mohammad Fax: 88-02-7790708
Nuruzzaman Chowdhury, FVP HOB: Md. Abul Bashar Khan, VP

Uttara Branch Elephant Road Branch
House- 10/A, Road- 7/D, Osman Plaza, 75 Elephant Road,
Sector- 9, Uttara Model Town, Dhaka-1205
Uttara, Dhaka -1230 Phone: 02-9614542, 9677364
Phone: 02-48931729,
Mobile: 01713-066599,
48958244, 48958177,
48955879 01713-248730
Mobile: 01787-681253 Fax: 88-02-9669458
01711-546396 HOB: Lutful Haidar
HOB: Abu Yusuf Md.Abdullah Chowdhury, EVP
Haroon, SVP
Motijheel Branch Satmasjid Road Branch

Malek Mansion House- 39/A, Road- 14/A,
128 Motijheel C/A, Dhaka-1000 Satmasjid Road
Phone: 02-9561178, 9586944-5 Dhanmondi, Dhaka-1209
Mobile: 01713-044832 Phone: 02-9141148, 9129335
Fax: 02-9586946 Mobile: 01755-533149
HOB: Md. Abul Bashar, EVP Fax: 88-02-9139183
HOB: Md. Moniar Rahman, EVP
Konabari Branch Gulshan Branch

Motiur Rahman Plaza, Konabari Hosna Center, (1st floor),
Bus Stand House no. 106 Gulshan
Konabari, Joydevpur, Gazipur Avenue, Gulshan, Dhaka-1212
Phone: 02-9298485 Phone: 02-55068965-6,
Mobile: 01777-764999 55068969
01713-199822 Mobile: 01713-063586
Fax: 88-02-9298486 Fax: 88-02-55068967
HOB: Md. Abul Kashem HOB: Md. Jamal Hossain, EVP
Khandaker, FVP
Hemayetpur Branch Bijoynagar Branch

Hatem Ali Complex, Singair Akram Centre, Purana Paltan (old)
Road, Hemayetpur, Savar, 212 S.S. Nazrul Islam Sarani (New)
Dhaka-1340 Dhaka- 1000
Phone: +880-02-44065050 Phone: 02-47118741-42
Mobile: 01713-452995 (HOB) Mobile: 01713-048906 (HOB)
01730-452979 Fax: 88-02-47118680
HOB: Md. Mokbul Hossain, FVP HOB: Fayazur Rahman Biswas,
SVP
Moghbazar Branch Bhojeshwar Bazar Branch

217/A, Noor Bhandari, Khan Tower
Dommino Benvenito, Bhojeswar Bazar,
Outer Circular Road Naria, Shariatpur
Moghbazar, Ramna, Dhaka. Mobile: 01713-384497 (HOB),
Phone: 02-8333017, 01730-048067
8316279, 8333016 HOB: Monjour Ahmed, SEO
Mobile: 01713-068194 (HOB)
Fax: 02-8333018
HOB: Md. Rezaul Karim, VP
Green Road Branch Engineers’ Institution Branch

151/6, Gazi Tower, IEB Bhaban,
Green Road, Dhaka 8/A, Ramna, Dhaka-1000
Phone: 02-8157266, Phone: 02-47110651
9136809, 9136822 Mobile: +01819-252228 (HOB)
Mobile: 01730-013453 (HOB) Fax: 88-02-47110610
Fax: 88-02-9114108 HOB: Lopita Mannan, VP
HOB: Md. Farid Uddin Ahmed
Bhuiyan, SVP

OVERVIEW
Darus Salam Road Branch Pragati Sarani Branch

Holding-2/A, Darus Salam Green Orlando, 42/4 Pragati
Road, Mirpur-1, Dhaka-1216 Sarani, Baridhara, Dhaka-1212
Phone: 02-9035044 Phone: 02-8411503, 8411501-2
Mobile: 01730-328681 (HOB) Mobile: 01714-094446
Fax: 88-02-8035529 Fax: 88-02-8411504
HOB: A.K.M Saifuddin Masuk, VP HOB: Md. Shahidul Alam, VP
Narayanganj Branch Demra SME/Krishi Branch

H R Plaza, 64 (Old), 90 (New) Matuail New Market Bhaban,
Bangabandhu Road, Konapara, Demra, Dhaka
Narayanganj Phone: 02-7559708,
Phone: 02-7648241, 7648243 02-7542911
Fax: 88-02-7648244 Fax: 88-02-2752904
HOB: Md. Shahadat HOB: Md. Sana Ullah, FVP
Hossain Khan, VP
Mymensingh Branch Aganagar Branch

Momen Tower Choto Masjid Road
65 Choto Bazar, Mymensingh (Ispahani), Aganagar
Phone: 091-63313, 63326 South Keranigonj, Dhaka-1310
Mobile: 01787-660381 (HOB) Phone: 02-7763658, 7763657
Fax: 88-091-63316 Mobile: 01714-104936 (HOB)
HOB: Shampad Kumar Fax: 88-02-7763659
Chanda, AVP HOB: Dilip Chandra Das, FVP
Dholaikhal Branch Ring Road Branch

Chishti Bhaban, Choice A J Golden Tower,
72, Lalmohon Shaha Street, 2/1 Ring Road, Shyamoli,
Dholaikhal, Dhaka-1100 Dhaka-1207
Phone: 02-9560286, 9564529 Phone: 02-9103329,
Mobile: 01730-709985 (HOB) 9131972
Fax: 88-02-7117927 Mobile: 01730-373896 (HOB)
HOB: Syed Ezazur Rahman, VP Fax: 88-02-9103330
HOB: Paritosh Kumar Dhar, FVP
Damudya Branch Imamganj Branch

Synthia Plaza, 318 Main Road, Mohammad Hossain Complex
Damudya Bazar, 3 Moulvibazar Road,
Damudya, Shariatpur Calkbazar, Dhaka-1211
Phone: 06023-56204 Phone: 02-57312970,
Mobile: 01755-533146 (HOB) 57312821, 57312861
Fax: 88-06023-56201 Mobile: 01713-199812(HOB)
HOB: Mohammad Fax: 88-02-57312943
Moniruzzaman, PO HOB: Md Zillur Rahman, VP
Rampura Branch Kishoreganj Branch

Circle Almas Height 573, M M Shopping Complex
375, DIT Road, Gouranga Bazar, Kishoreganj
West Rampura, Dhaka- 1219 Phone: 0941-51016, 51018
Phone: 02-8333697, 8333703 Mobile: 01755-637381 (HOB)
Mobile: 01819-407600(HOB) Fax: 88-0941-51017
Fax: 88-02-8322797 HOB: Md. Mehboob
HOB: Zareen Ahmed, SVP Hossain Khan, AVP

Bhulta Branch Sakhipur Branch
Haji A. Aziz Super Market Shipa Super Market
Bhulta, Rupganj, Narayanganj Sakhipur Bazar,
Phone: 01755-637388-9 Sakhipur, Tangail
Mobile: 01713-199817 (HOB) Phone: 09232-56274
HOB: Mohammad Salah Mobile: 01755-587439 (HOB)
Uddin, VP Fax: 88-09232-56273
HOB: Mohd. Zulfikar Haider, FVP
International Airport Road Atibazar Branch

Branch Haji Edu Market
A R A Mansion, Ati Bazar Union, Shakta
77-78 Airport Road Keraniganj, Dhaka.
Amtali, Mahakhali C/A, Dhaka-1212 Phone: 02-55103289,
Phone: 02-9857368, 9757480 55103290
Fax: 88-02-9857435 HOB: Md. Shamsul Alam
HOB: Al Mansur, VP Siddique, FVP
Nawabpur Road Branch Velanagar Branch

NBC Tower, Khadiza Mansion,
24-25, Nawabpur Road Jailkhanamoor,
Wari, Dhaka Velanagar, Narsingdi.
Phone: 9592126, 9592125 Phone: 02-9452497-8
Mobile: 01714-118293 (HOB) Fax: 880-2-9452499
Fax: 880-2-9592127 Mobile: 01713-279558 (HOB)
HOB: Mohammad Khabir HOB: Md. Bashir Ahmed, FAVP
Hossain, FVP
Abdullahpur Bazar Branch Madanpur Branch

Tajimuddin Plaza, Kalakandi Akota Somabay Market
Abdullahpur Bus stand Madanpur, Bandar,
South Keraniganj, Dhaka. Narayanganj.
Mobile: 01755-632919 (HoB), Mobile: 01777-759525 (HOB),
01777-792509 01777-759526
HOB: Abul Kalam Azad, FVP HOB: Mohammad Jahangir
Alam, AVP
Jhitka Bazar Branch Donia Branch

City Plaza, Jhitka Bazar, 661, Donia Road, Purba
Harirampur, Manikgonj Dholaipar, Jatrabari, Dhaka
Mob: 01713-369357 (HoB) Phone: 02-7443306
Phone: 02-7729192 Mobile: 01755-618140
Fax: 02-7729193 Fax: 02-7443308
HOB: Kishor Ray, FAVP HOB: Abul Basar Muhammad
Zakir Hossain, AVP
Gareeb-E-Newaz Branch Gazipur Chowrasta Branch

22, Gareeb-E-Newaz Avenue, Shah Jilani Tower, Tangail Road,
Sector# 13, Uttara, Dhaka. Gazipur Chowrasta,
Mobile: 01730-453497 Gazipur Sadar, Gazipur
Phone: 02-7911434, 7914444 Phone: 02-49261245, 49261243
Fax: 88-02-7911434 Mobile: 01709-633758 (HOB)
HOB: Abul Kashem Fax: 880-2-49261399
Mohammad Fazlul Hoque, VP HOB: Mirza Yahia Uddin
Ahmed, FVP

OVERVIEW
Baipail Branch Madaripur Branch

Zahir Plaza, Baipail 137 & 138/1, Monohar Putti,
North Gazirchat, Shanirvar, Puran Bazar,
Dhamsona Union, Ashulia, Sadar Thana, Madaripur
Savar, Dhaka Phone: 0661 - 62885 (HOB)
Phone: 02-7789322 (PABX) 0661 - 62898 (PABX),
Mobile: 01709 652410 01717-698283
Fax: 88-02-7789321 Fax: 0661 - 62884
HOB: Md. Salahuddin Khan, FVP HOB: H.M. Shah Alam, PO
Asad Gate Branch Shimrail Branch

Dream by Icon, Holding # S. M. Tower
2/4 ,Block-A Mohammadpur Holding No: B-11/1
Housing Estate Mirpur Road, Siddirganj, Narayangonj
Dhaka-1207 Mobile: 01708-454391 (HOB)
Phone: 02-9115320, 9114350 PABX: 7691562, 7691563
Mobile: 01708-454399 HOB: Asif Ahmed Porag, FAVP
Fax: 02-9115360
HOB: A T M Monjurul Karim, VP
Goshairhat Branch Gorai Branch

Hazi Super Market S. M. Mansion, Gorai
Mitrasen potti Hatuvanga Road,
Goshairhat, Shariatpur Mirzapur, Tangail
Phone: 06024-75216, 75219 Phone: 01708-454393
Mobile: 01708-454392 PABX: 01708-494133
HOB: Mohammad Shahidul HOB: Ardhendu Sen, FAVP
Alam, SEO
Gouripur Branch Netrokona Branch

Razu Plaza, Gouripur, A Rashid Market, Holding #
Ashulia, Savar, Dhaka 0703-00, Mukterpara Sarak,
Phone: 01708-454394 Netrokona.
PABX: 01708-494132 Mobile: 01701-209780,
HOB: Mohammed Samaun PABX: 095162687,
Mollah, FAVP 095162686 (Direct)
HOB: A K M Mahbubur
Rahman, FAVP
Tejgaon Gulshan Link Road Manikganj Branch

Branch City Center, Holding#16,
Impetus Center, Holding # 242/B, Manikganj Bus Stand, Dhaka-
Bir Uttam Mir Shawkat Ali Road Aricha Mahasarak, Manikganj.
(Tejgaon Gulshan Link Road), Phone: 01701-209786, 02-
Tejgaon Industrial Area, Dhaka. 7720370, 7720329
Phone: 02-8878937, 8878936 HOB: Bikash Kumar Biswas, FAVP
Mobile: 01713-423763 (HoB),
01701-209784
HOB: Md. Showkat Hossain, FVP
Nawabganj Branch Barodi Bazar Branch

Sajeda Complex, Vill- Barodi Plaza, Mouza &
Kashimpur, Union - Kolakopa, Union - Barodi, Sonargaon,
Upzilla - Nawabgonj, Dhaka. Narayanganj
Phone: HoB: 01816-550686, Phone: HoB: 01713-013782,
09612-142334 09612142337,
GB Incharge: 01716-881097 GB Incharge: 01816-099967
HOB: Md. Abu Nasir Shofiur HOB: Md. Ahaduzzaman, PO
Rahman Bhuiyan, FAVP

Rajbari Branch Arambag Branch
Khorshed Plaza, Holding - 190 Inner Circular Road
240, College Road, Rajbari Motijheel, Dhaka-1000
Municipality, Rajbari Phone: 02-09612142343
Phone: HoB: 01713-013797, Mobile: 01713-013799
09612142340, HOB: Partha Sarkar, FVP
GB Incharge: 01962-420525
HOB: Md. Abul Kalam Azad,
AVP
Aftab Nagar Branch Bhedarganj Branch

Power Grid Company of High School Road
Bangladesh Ltd. Bhedarganj, Shariatpur
Head Office (1st Floor) Mobile: 01713-048879
Jahurul Islam City, Avenue-3 HOB: Mohammad Israfil Khan,
DNCC, Dhaka-1212. PO
Phone: 02-09612142344
Mobile: 01713-048869
HOB: Md. Aminul Islam, VP
Shariatpur Branch Nikunja Branch

Italy Plaza, Holding No - 845, DSE Tower (Level-1), Holding
Sadar Road, Ward No - 03, # 46, Kobi Faruque Sarani,
Shariatpur Municipality, Road-21, Nikunja-2, Khilkhet,
Shariatpur Dhaka-1229
Phone: 09612142346 Phone: 02-09612142354
Mobile: 01713048886 (HoB), Mobile: 01711-991388
09612142346 (Branch) HOB: Faruque Ahmed, AVP
HOB: Moniruzzaman Khan,
FAVP
Chattagram Region
Agrabad Branch Khatunganj Branch

Mishkat Arcade 599 Ramjoy Mohajan Lane
21/1 Agrabad C/A, Double Khatunganj, Chattogram
Morring, Chattogram Phone: 031-626101,
Phone: 031-716421, 723181 626102, 031-622751
Fax: 88-031-716459 Fax: 88-031-635514
HOB: Mesbah Uddin Ahamed, HOB: Mohammad Nizamul
SVP Hoque, SVP
Jubilee Road Branch Madam Bibir Hat Branch

Kamal Chamber (2nd Floor) S.A. Tower, Madambibir Hat
61 Jubilee Road, Kotwali, Bhatiary, Shitakund,
Chattogram Chattogram
Phone: 031-621018, 624819 Phone: 031-2780465,
Mobile: 01713-384485 Mobile: 01730-076127
Fax: 88-031-626072 01755-564372
HOB: Sardar Mohammad Fax: 031- 2780686
Zobayar, VP HOB: Abul Hasan Mohammad
Masum Billah, AVP

OVERVIEW
Jhilongja Branch O R Nizam Road Branch

Hotel Sea Palace 191, CDA Avenue
Kalatoli Road, Cox’s Bazar Commercial View Complex
Phone: 0341-62234 East Nasirabad, Chattogram
Mobile: 01713-103662 (HOB) Phone: 031-657512, 2550876
Fax: 88-0341-63734 Mobile: 01713-103663 (HOB)
HOB: Md. Meharub Hossain Fax: 88-031-2550877
Khan, AVP HOB: Anupam Kumar Paul, VP
Sheikh Mujib Road Branch Chattogram EPZ Branch

304, Sheikh Mujib Road, S. A. Tower, Airport Road,
Chattogram South Halishahar, Bandar,
Phone: 031-2514236, 2524126-7 Chattogram
Mobile: 01755-651980 (HOB) Phone: 031-740682-3, 742217
Fax: 88-031-2514235 Mobile: 01730-318185 (HOB)
HOB: Moynul Qasem Fax: 88-031-740684
Chowdhury, FVP HOB: M. Nazrul Islam, AVP
Patiya SME/Krishi Branch Rangamati Branch

Rahman Mansion Hotel Green Castle, 1 Pathor
1284/1 Club Road, Ghata, Reserve Bazar,
Patiya, Chattogram Rangamati-4500
Phone: 03035-56185 Phone: 0351-61267-8
Fax: 88-03035-56579 Fax: 88-0351-61275
HOB: Shyamal Kanti Barua, HOB: Ranjit Bahadur Roy, FAVP
FAVP
A K Khan Moor Branch Patherhat Branch

Anjuman Tower, A K Khan S M Shopping Center,
Moor, Chattogram (1st & 2nd Floor)
Phone: 031-2773367-69 Pather Hat,Noapara, Raozan,
Mobile: 01755-533140 (HOB) Chattogram
Fax: 88-031-2773368 Phone: 031- 2573351
HOB: Mohammad Nazmul Mobile: 01755-637384 (HOB)
Hasan, AVP Fax: 88-031- 2573352
HOB: Mohammad Nuruddin
Chowdhury, FAVP
Khulshi Branch Baraiyarhat Branch

“Salam Heights” Feroza Saleha Center
Zakir Hossain Road, Asian Highway
South Khulshi, Chattogram. (Shantirhat Road)
Phone: 031-612258, 031-612257 Baraiyarhat Paurashava
Mobile: 01713-048095 (HoB) P.S: Jorarganj, Mirsharai
Fax: 031-612259 Chattogram
HOB: Suraya Nasrin, VP Phone: 01709 – 652417,
01709-652414
HOB: Abu Ahsan, FAVP
Sadarghat Branch Access Road Branch

Humayun Heights, Amin Tower, Holding # 601/722
Holding no. 70 Agrabad Access Road, Hali
Sadarghat Road, Sadarghat Sahar, Chattogram.
Chattogram Phone: 031-723926-8,
Phone: 01708-454397, 01713-161483 (HoB),
031-633291-2 01701-209787 (Br.)
HOB: Nizam Uddin Md. HOB: Anwar Hossain , VP
Mamun, FAVP

Cumilla-Noakhali Region
Chowmuhani Branch Feni Branch

Morshed Alam Complex, Kazi Plaza, 105,
Railgate, Chowmuhani, S. S. Kaiser Road
Begumganj, Noakhali Feni Sadar, Feni
Phone: 0321-52960 Phone: 0331-63558, 63559
Fax: 0321-52966 Fax: 88-0331-63557
HOB: Mahbub Jamil, FVP HOB: Md. Shahadat Hossain,
FVP
Comilla Branch Dagonbhuiyan Branch

1042/945 Jhawtala, Comilla. Mizan Tower, 273,
Phone: 081-65275, 65276 Basurhat Road
Mobile: 01713-384498 (HOB) Dagonbhuiyan, Feni
HOB: Mohammed Mamunur Phone: 03323-79105
Rashid, AVP Mobile: 01730-328684 (HOB)
Fax: 88-03323-79106
HOB: Mr. Monowar Hossain, PO
Faridganj Branch Amishapara SME/Krishi Branch

Saima Abdullah Plaza Mosharaf Complex
Chandra Road, Faridganj Maddha Bazar, Amishapara
Bazar, Chandpur Shonaimuri, Noakhali
Phone: 08422-64378 Mobile: 01819-234889 (HOB),
Mobile: 01812-314077 (HOB) 01730-340792 (Br)
Fax: 08422-64377 HOB: Md. Mizanur Rahman, FVP
HOB: Kamrul Islam Zabed, FVP
Rajnagar SME/Krishi Branch Banglabazar Branch

Balua Chowmuhani, Baroichatal, Banglabazar,
Dhalia, Rajnagar Begumganj, Noakhali.
Feni Sadar, Feni. Phone: 0321-53305, 56631
Phone: 0331-73782, 73783 Mobile: 01711-186030(HOB)
Mobile: 01730-340793 (HOB) Fax: 88-0321-53164
Fax: 88-0331-73784 HOB: Md. Mozammel Hossain,
HOB: Md. Ziaul Karim, PO AVP
Maijdee Court Branch Ashuganj Branch

Honey Dew Point, Aziz Plaza (1st & 2nd Floor),
10 Abdul Malek Ukil West Bazar,Char Chartola,
Sarak, Maijdee Court, Noakhali Ashuganj, Brahmanbaria.
Phone: 0321-71710 Phone: 08528-74592
Mobile: 01730-709983(HOB) Mobile: 01755-533145 (HOB)
Fax: 88-0321-71712 Fax: 08528-74593
HOB: Mohammad Mamunul HOB: Ahsan Sikder, FAVP
Haque, AVP

OVERVIEW
Korais Munshi Bazar Branch Lakshmipur Branch

Mamun Super Market R B Tower, Thana Road,
Korais Munshi Bazar, Laxmipur Sadar, Laxmipur
Somaspur, Dagonbhuiyan, Feni Phone: 0381-62390, 62389
Mobile: 01819-104282(HoB), (HoB)
01711-486615 Mobile: 01713-369352 (HoB)
HOB: Mohammad Shafiqul Fax: 0381-62391
Islam, SEO HOB: H.S. Shahreer, FAVP
Chandpur Branch Bazra Bazar Branch

285,Techno Hannan Complex, Babul Shopping Complex,
1st floor, Hazi Mohasin Road, Islamgonj Bazara, Bazra,
Sadar, Chandpur. Sonaimuri, Noakhali.
Phone: 0841-66511-12 Phone: 0321-51374, Ext. 101,
Mobile: 01713-369354, Mobile: 01713-369358,
01715024353, 01708515398 01717135339.
Fax: 880-841-66513 Fax: 880-321-51375
HOB: Md. Murad Hossain HOB: Abul Hasnat Muhammad
Chow. , AVP Zaber, PO
Samir Munshir Hat Branch Suaganj Bazar Branch

Patowary Market Noor Mansion, Puratan Road,
Samir Munshir Hat, 6 No. Suaganj Bazar, Cumilla
Kabilpur Union Phone: 01709-652411,
Senbug, Noakhali 01701-209798 (HOB)
Mobile: 01709 - 633759 (HOB) HOB: Rajon Saha, FAVP
01709 - 652415 (Branch)
HOB: Mohammad Zia Uddin,
FAVP
Subarnachar Branch Kankirhat Branch

Haris Chowdhury Bazar R. K. Chowdhury Shopping
West Char Jubili, Complex, Kankirhat,
PO+PS: Char Jabbar Senbag, Noakhali
Subarnachar, Noakhali. Phone: 01708-454390,
Phone: 01912-078637 (HOB) 01708-494131
Mobile: 01815-918790 HOB: Nizam Uddin, PO
HOB: Nizam Uddin, SEO
Mandari Bazar Branch Udoy Shadur Hat Branch

Kamalur Rahim Super Market, Malek Bhaban,Ramanandi,
Mandari Bazar Union-1 No. Charmatua,
Chandragonj, Laxmipur Sadar, Noakhali.
Phone: 0381-62377, 62375 Phone: HOB: 01819319027,
Mobile: 01708-454396 01708490258,
HOB: Mohammed Kalu Mia, HOB: M. M. Fazle Rabbee,
FAVP FAVP
Chitoishi Bazar Branch Chandragonj Branch

Rokeya Super Market, Matrichaya Bhaban,
Chitoishi, Chitoishi Purbo Vill- Deopara, Afzal Road,
Union Parisad, Shahrasti, Chandragonj Union Parishad,
Chandpur. Thana- Chandragonj,
Phone: 01815-918790 (HoB), District- Lakshmipur.
01701-209782 (Br) Phone: 0382-581196-7
HOB: Mohammad Shamsul Mobile: 01735-749912
Haque, SEO HOB: A S M Mohiuddin, SEO

Munshirhat Branch Kabirhat Branch
Patwary Tower, Main Road, Fuad Centre, Holding - 37,
Fatehpur, Munshirhat Hospital Road, Kabirhat
Fulgazi, Feni. Municipality,Noakhali.
Phone: 01701-209789, Phone: HoB: 01713-013790,
01708-494137 09612142336,
HOB: Zia Uddin Ahmed, PO GB Incharge: 01676-286089
HOB: Fazlul Huq, PO
Chhagalnaiya Branch Chandina Branch

Sofura Arcade, 1340/1341, Alhaj Abdul Hamid Member
College Road, Chhagalnaiya Market, Chandina, Cumilla.
Municipality, Feni. Mobile: 01713-048874
Phone: HoB: 01713-013792, HOB: Gautam Chandra
09612142341, Debnath, PO
HOB: Md. Zahid Hossain, PO
Hajiganj Branch Rahimanagar Branch

Canada Tower Shahjalal Shopping Complex
Chanpur-Cumilla Highway Road North Union Parishad
Haziganj, Chandpur Kochua, Chandpur
Mobile: 01713-048876 Mobile: 01713-048900
HOB: Robel Ahmed, PO HOB: Mohammad Lokman
Hossain, PO
Senbag Branch
DK Plaza, Upazila Road
Senbag, Noakhali
Mobile: 01713-048870
HOB: Md. Zahir Alam, PO
North Bengal Region
Rajshahi Branch Naogaon Branch

ZODIAC Plaza, Shaheb Bazar J.R. Super Market,
(Zero Point), Rajshahi Old Bus Stand, Main Road,
Phone: 0721-771214, 772261 Chakdev, Naogaon
Mobile: 01711-419079 (HOB) Phone: 0741-63331,
Fax: 88-0721-771215 61981, 61982
HOB: Md. Abdul Matin, VP Mobile: 01711-392766
Fax: 88-0741-63230
HOB: Abdullah Al Mahmood, VP

OVERVIEW
Rangpur Branch Bogura Branch

Press Club Complex Biponi Borogola, Tinpotti,
Bitan (1st Floor) Bogura Sadar, Bogura
Station Road, Rangpur. Phone: 051-69840
Phone: 0521-51324, 51299 Mobile: 01713-044835 (HOB)
Mobile: 01713-201636, Fax: 88-051-69190
01755-500543 HOB: Md. Alauddin, FVP
Fax: 88-0521-51110
HOB: Md. Hazrat Ali, FVP
Sapahar Branch Dinajpur Branch

Saha Mansion, Dinajpur Plaza, Goneshtola
Sapahar Bazar, Main Road, Dinajpur Sadar, Dinajpur
Sapahar, Naogaon Phone: 0531-61217,
Phone: 07432-74081 66912(HOB)
Fax: 07432-74080 01730-047971(HOB)
HOB: Sarwar Md. Mahbub Fax: 88-0531-61218
Murshed, AVP HOB: Md. Mamunur Rashid, VP
Chapainawabganj Branch Thakurgaon Branch

65-67 Jhilim Road (1st & 2nd Afsar Uddin Chowdhury Plaza
Floor), Boro Indara More College Road, Asrampara,
Chapainawabgonj Sadar, Thakurgaon
Chapainawabgonj. Phone: 0561-61368
Phone: 0781-51719, 51720 Mobile: 01755-533143
Mobile: 01713-365090 Fax: 88-0561-61367
Fax: 88-0781-51707 HOB: Abu Ala Md. Mazharul
HOB: A.H.M. Kawsarul Islam, FVP Islam, AVP
Sheesha Hat Branch Nilphamari Branch

Main Road, Sheesha Hat, Bari Plaza, Bara Masjid Road,
Porsa, Naogaon Nilphamari
Phone: 01932-710888 Phone: 0551-62007
Mobile: 01755-501879 Mobile: 01755-533144 (HOB)
HOB: Shah Md. Mizanur Fax: 88-0551-62008
Rahman, FVP HOB: Md. Arafat Mostofa, FVP
Debiganj Branch Nazipur Branch

Holding no. 1892, Haque Plaza, Noor Market, Harirampur
Debigonj, Panchagarh . Nazipur,Patnitala, Naogaon
Phone: 05654-56151 Phone: 07428-63293
Mobile: 01755-533147 Mobile: 01755-637386
Fax: 88-05654-56152 Fax: 88-07428-63294
HOB: H. M. A Razzaque, AVP HOB: Md. Ruhul Amin Siddiqui,
FVP
Niamatpur Branch Gobindaganj Branch

Girls Plaza, 216 Balahore Anowara Super Market
Niamatpur Sadar, Naogaon Gobindaganj, Gaibandha
Phone: 07427-56257 Phone: 05423-75083, 75387
Mobile: 01755-637385 Mobile: 01755-637387 (HOB)
Fax: 88-07427-56256 Fax: 880-05423-75168
HOB: Md. Abdur Razzak, AVP HOB: Md. Hasnat-E-Rabbi FAVP

Pabna Branch Lalmonirhat Branch
Munshi Complex, Shahan Shopping Complex
Hazi Abdul Gani Sarak, Holding No: 0369-00,
Boro Bazar, Pabna Puran Bazar
Phone: 0731-63356 Lalmonirhat Sadar,
Mobile: 01755-632918 Lalmonirhat
Fax: 88-0731-63354 Phone: 01708-454395
HOB: Md. Shafiqul Islam, FAVP PABX: 0591-62189, 62190
HOB: Md. Toufiqul Islam, FAVP
Natore Branch Ishwardi Branch

Julekha Complex Center Point, Holding#
Holding No.81, 283/257, Pabna-Ishwardi Main
Dhaka Road, Alaipur Road, Ishwardi, Pabna.
Natore Sadar, Natore Phone: 07326-64768
Phone: 0771-61740 Mobile: 01701-209788,
Mobile: 01708-454398 (HoB) 01733-779974
HOB: Milon Kumar Sarker, AVP HOB: Md. Nazrul Islam, FAVP
Sirajganj Branch Kalai Branch

Matam Tower, Holding - 50, Samad Talukder Shopping
S S Road, Sirajganj Complex, Holding - 0048/01,
Municipality, Sadar, Sirajganj Joypurhat Mokamtola C &
Phone: HoB: 01713-013776, B Road, Kalai Municipality,
09612142335, Joypurhat.
GB Incharge: 01717-575137 Phone: HoB: 01713-013794,
HOB: Md. Kamrul Hasan, FAVP 09612142342
HOB: Md. Ali Martuza, PO
Syedpur Branch
Holding No-66,
Shaheed Dr. Zohrul Haque
Sarak, Ward No.-11, Syedpur
Pourosobha, PS-Syedpur,
District-Nilphamary
Phone: 09612142353,
01711013504
HOB: Mr. Syeed Abdullah-Al-
Mahdi, FAVP
Greater Khulna Region
Khulna Branch Jassore Branch

Rupsha Plaza, A. Ali Complex,
73, KDA Avenue C/A, 45 R. N. Road, Jashore
Sonadanga, Khulna Phone: 0421-62933
Phone: 041-813561, 813562 Mobile: 01713-0328683
Mobile: 01713-453018, Fax: 88-0421-65392
01713-400641 HOB: Md. Monjur Hossain, FVP
Fax: 41-813563
HOB: Altamash Al-Masood
Jamali, VP

OVERVIEW
Kushtia Branch Chuadanga Branch

A. Hamid Market, N. S. Road Malik Tower, Holding# 43 &
Holding no. 1, WARD no. 03, 107 Borobazar,Shahid Abul
Kushtia-7000 Kashem Sarak, Chuadanga.
Phone: 0761-63641, 63871
Phone: 071-72411, 72412
Mobile: 01716-704544
Mobile: 01713-199807 Fax: 88-0761-63761
Fax: 88-071-72413 HOB: Md. Atiur Rahman Khan,
HOB: Belal Ahmed Rony, FAVP FAVP
Jhenaidah Branch Satkhira Branch

Sultan Market, Holding - 31, Haji Market
Huseyn Shaheed Suhrawardy South Polashpole
Road, Jhenaidah Municipality, Satkhira Sadar, Satkhira
Jhenaidah Mobile: 01713-0489902
Phone: HoB: 01713-013781, HOB: Md. Shahan Shah Alam,
09612142338, FAVP
HOB: Md. Touhiduzzaman, PO
Greater Barisal Region
Barishal Branch Patuakhali Branch

141 Sadar Road, Barishal-8200 151-152, Ashrab Noor Mansion,
Phone: 0431-2176209 Natun Bazar, Patuakhali Sadar,
Mobile: 01713-384496, Patuakhali-8600
01713-386879 Phone: 0441-62979
Fax: 88-0431-2176208 Mobile: 01730-340790
HOB: Golam Moula, VP Fax: 880-441-62971
HOB: Md. Masudur Rahman
FAVP
Bhola Branch Jhalakathi Branch

Karnaphuli Complex, House # Al - Marjan,
3373, Sadar Road, Bhola. 30, Kumarpatti, Jhalakathi
Phone: 0491-62721-2 Mobile: 01777-759524
Mobile: 01755-637382 (HOB) Phone: 0498-62911, 62947
Fax: 0491-62720 Fax: 0498-62948
HOB: Masum Iqbal, AVP HOB: Md. Mosleh Uddin, FAVP
Kalaiya Branch Khepupara Branch

Shimon Plaza Kalaiya Union, Society Super Market, Notun
Bauphal, Patuakhali Bazar Sarak, Khepupara,
Phone: 04422-56166, Kolapara, Patuakhali
04422-56221 Mobile: 01701-209785,
Mobile: 01713-369359 (HoB) 01718-439798
Fax: 880- 4422-56375 Phone: 04425-56610, 56611
HOB: Moudud Ahmed, FAVP HOB: Ashikul Islam, PO

Mathbaria Branch
Samabay Bank Limited
Authority Building, Mathbaria
Patharghata Road,
Mathbaria, Pirojpur
Phone: HoB: 01713-013786,
09612142339,
HOB: Md. Faruque Sikder,
FAVP
Greater Sylhet Region
Sylhet Branch Moulvibazar Branch

Raisot Tower 152/2 Court Road
Laldighirpar, Sylhet Moulvibazar Sadar,
Phone: 0821-723650, 723651 Moulvibazar
Phone: 0861-62871, 62872
Mobile: 01713-386896
Mobile: 01713-068126
HOB: Debojyoti Majumder, VP
Fax: 88-0861-62873
HOB: Md. Rezaul Haque
Chowdhury, VP
Beanibazar Branch Nabigonj SME/ Krishi Branch

Zaman Plaza Skylite Tower, Sherpur Road,
Beanibazar, Sylhet Nabigonj, Habigonj
Phone: 08223-56180 Phone: 08328-56307
Mobile: 01713-384495, Mobile: 01730-320814
01777-767920 Fax: 880-8328-56306
Fax: 88-08223-56181 HOB: Alomoy Roy, FAVP
HOB: Md. Badrul Islam, FAVP
Sunamganj Branch Subidbazar Branch

Zaman Complex 16, Prantik, Subid Bazar, Sylhet
Arpin Nagar, (Old Bus Stand) Phone: 0821-728371, 728372
52-01, Sunamgonj Mobile: 01730-452924
Phone: 0871-61277-8 Fax: 88- 0821-728373
Mobile: 01755-533148 (HOB) HOB: Hasan Quedrotul
Fax: 880-871-61280 Ferdoush Chowdhury, AVP
HOB: Ahmedur Rahman, FAVP
Goala Bazar Branch

Bhutu Babu Super Market
Goala Bazar, Osmaninagor
Balagonj, Sylhet
Mobile: 01713-048904
HOB: Syed Murshed Ali, PO

OVERVIEW
CELEBRATION OF
BANGABANDHU SHEIKH MUJIBUR RAHMAN’S
BIRTH CENTENARY
Mercantile Bank Limited
donated BDT 50 million to
Bangabandhu Memorial Trust
Bangabandhu Memorial
Trust commemorating the
birth centenary celebration
of the Father of the Nation
Bangabandhu Sheikh Mujibur
Rahman. A. S. M. Feroz Alam,
Sponsor Director of Mercantile
Bank Limited, handed over the
cheque to Prime Minister Sheikh
Hasina at Gonobhaban on
January 06, 2020.
Mercantile Bank Inaugurated ‘Mujib Corner’

Mercantile Bank Limited launched ‘Mujib Corner’ at its Head Office to mark the centenary of the birth
of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman. Bank’s chairman Morshed Alam, MP
inaugurated the ‘Mujib Corner’ on 12 March, 2020.
Mercantile Bank celebrated ‘Birth Centenary of Bangabandhu Sheikh Mujibur Rahman’

Mercantile Bank Limited arranged a rally in front of its Head Office with the presence of all executives &
officers to celebrate the Birth Centenary of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman
on 18 March, 2020.

KEY
EVENTS 2020
FEBRUARY
Mercantile Bank organized
a daylong Seminar titled
“Agriculture & Rural Credit” at
its Training Institute in Dhaka.
MARCH
Mercantile Bank Celebrated International Women’s Day
Mercantile Bank Limited celebrated International Women’s Day-2020 with a warm bean feast at Fars Hotel
& Resorts in Dhaka on 08 March, 2020.

OVERVIEW
APRIL
the Prime Minister’s Relief
Fund for fighting against
Corona Virus.
JUNE
The 21st Annual General
Meeting of Mercantile Bank
Limited was held virtually on
June 24, 2020.

has launched Shariah
complied Islamic Banking
Window service named
‘TAQWA’. Morshed Alam,
MP chairman of the bank
inaugurated this service
on 29th June, 2020 in a
virtual ceremony.

SEPTEMBER
Mercantile Bank and
PrimaDollar signed MoU
Mercantile Bank Limited (MBL) signed
Memorandum of Understanding
(MoU) with PrimaDollar, UK to
facilitate Fintech based Export
Factoring services to the customers
of MBL exporting under Open
Account credit terms on September
21, 2020. Under Export Factoring,
exporters of MBL may be eligible to
receive up to 95% of the deferred
value of the goods on sight basis
from PrimaDollar, UK.
NOVEMBER
Mercantile Bank organized
a virtual workshop on
Monitoring and Compliance
Issues of Ready Made
Garments (RMG) Industry
on November 12, 2020.

and Northern Electricity
Supply Company Limited
signed an Agreement
Mercantile Bank Limited has signed an
agreement with Northern Electricity
Supply Company Limited (NESCO).
As per the agreement, Mercantile
Bank will facilitate the collection of
Electricity bill from the customers of
Northern Electricity Supply Company
Limited through Real Time Online
Banking System, Mobile Financial
Service “MyCash”, Digital Banking App
(MBL Rainbow), Agent Banking and
other delivery channels.

OVERVIEW
Mercantile Bank Training

Institute Organized Virtual
Workshop On Sustainable
Finance under Green
Banking November 28,
2020.
DECEMBER
Mercantile Bank Ltd. joined
FCI as Associate Member
Mercantile Bank Limited (MBL)

has become Associate Member
of FCI (previously known as Factor
Chain International FCI); the Global
Representative Body for Factoring and
Financing of Open Account Domestic
and International Trade Receivables.
Inaugurated 150th Branch at Nikunja, Dhaka on 24 December, 2020

FIVE YEARS’
PERFORMANCE
Particulars 2020 2019 2018 2017 2016

BALANCE SHEET MATRIX
Authorized Capital 12,000.00 12,000.00 12,000.00 12,000.00 12,000.00
Paid-up Capital 9,840.16 9,371.58 8,149.20 7,761.15 7,391.57
Shareholders' Equity 22,101.78 20,908.29 18,683.55 17,584.02 16,809.61
Deposits * 252,817.40 262,961.05 243,643.42 220,516.63 165,257.45
Loans and Advances 248,994.39 236,890.45 224,230.61 199,660.72 150,912.52
Investments 48,953.71 49,755.98 38,977.94 34,772.14 32,920.69
Fixed Assets 3,093.34 3,142.45 3,288.45 3,057.50 3,175.03
Total Assets 330,785.56 316,363.47 291,385.64 260,169.93 204,127.47
Total Off Balance Sheet Items 108,112.30 101,993.74 104,569.47 112,379.02 81,697.78
Interest Earning Assets 302,164.54 291,195.32 267,358.90 238,681.52 169,784.40
Non-Interest Earnings Assets 28,621.02 25,144.25 24,026.74 21,488.40 34,343.10
INCOME STATEMENT MATIX
Interest Income ** 23,348.45 26,716.80 23,759.83 19,101.30 16,769.12
Interest Expenses 16,732.22 18,116.16 16,277.03 12,897.32 10,750.30
Net Interest Income 6,616.23 8,600.64 7,482.80 6,203.98 6,018.82
Non-Interest Income 3,927.34 4,575.36 4,357.71 5,650.33 4,076.48
Non-Interest Expenses 6,595.83 5,820.26 5,494.93 5,283.74 5,658.87
Net Non-Interest Income (2,668.49) (1,244.90) (1,137.22) 366.59 (1,582.38)
Total Income 27,275.79 31,292.16 28,117.54 24,751.63 20,845.60
Total Expenditure 23,328.05 23,936.42 21,771.96 18,181.06 16,409.17
Profit before Provision and Tax 3,947.74 7,355.74 6,345.58 6,570.57 4,436.43
Provision for Loans and Advances & Other 1,236.41 3,875.25 1,994.63 2,252.85 949.08
Provision
Profit after Provision before Tax 2,711.32 3,480.49 4,350.95 4,317.73 3,487.35
Porvision for tax including deferred tax 550.00 1,305.00 1,350.00 1,300.00 1,260.00
Profit after Tax 2,161.32 2,175.49 3,000.95 3,017.73 2,227.35
FOREIGN EXCHANGE BUSINESS
Import 172,773.50 184,650.00 196,389.70 190,753.60 139,766.40
Export 135,418.10 163,152.30 158,307.70 134,752.90 113,035.20
Remittance (Inward) 30,893.00 35,239.10 35,943.00 29,976.40 24,048.20
CAPITAL MEASURES
Total Risk Weighted Assets 245,486.43 236,412.62 221,984.99 206,080.14 171,704.24
Core Capital (Tier I) 21,284.49 20,098.89 17,950.97 16,299.02 14,330.00
Supplementary Capital (Tier II) 12,135.01 12,800.94 11,535.32 8,282.36 8,037.17
Total Capital/Regulatory Capital 33,419.50 32,899.83 29,486.29 24,581.38 22,367.17
Capital Surplus/ (Deficit) 2,733.70 3,348.25 3,128.17 1,397.36 4,123.59
Core Capital (Tier I) to RWA 8.67% 8.50% 8.09% 7.91% 8.35%
Supplementary Capital (Tier II) to RWA 4.94% 5.41% 5.20% 4.02% 4.68%
Total Capital Adequacy Ratio 13.61% 13.92% 13.28% 11.93% 13.03%

OVERVIEW

Particulars 2020 2019 2018 2017 2016
CREDIT QUALITY
Non-performing Loans (NPLs) 11,751.16 11,502.61 10,802.43 7,564.72 7,745.88
Provision for Unclassified Loan 6,847.42 7,614.30 5,627.49 4,584.18 3,916.60
Provision for classified Loan 4,882.58 4,519.98 4,763.91 3,967.46 3,117.14
Provision for Contingent Liabilities 988.60 986.63 998.56 1,079.90 793.14
NPLs to total Loans and Advances 4.72% 4.86% 4.82% 3.79% 5.13%
INVESTORS INFORMATION
Market price per share (BDT) 12.70 13.20 18.00 26.40 15.10
No. of Shares Outstanding (Million) 984.02 937.15 814.92 776.11 739.16
Earning per Share (BDT) 2.20 2.32 3.68 3.70 3.01
Dividend ***15.00% 16.00% 15.00% 22.00% 20.00%
Cash ***10.00% 11.00% 0.00% 17.00% 15.00%
Stock ***5.00% 5.00% 15.00% 5.00% 5.00%
Dividend Payout Ratio 68.29% 68.92% 40.73% 59.46% 66.37%
Market Capitalization 12,497.01 12,370.38 14,668.56 20,489.30 11,161.32
Book Value per Share 22.46 22.31 22.93 22.66 22.74
Market Value Book Value multiple 0.57 0.59 0.78 1.17 0.66
Price Earning Multiple (Times) 5.78 5.69 4.89 7.14 5.01
OPERATING PROFIT RATIO
Net Interest Margin (NIM) 2.69% 3.12% 2.98% 2.92% 3.43%
Net Non-interest Margin -0.91% -0.45% -0.45% 0.17% -0.90%
Earning base in Assets (average) 91.69% 91.91% 91.05% 91.53% 90.61%
Credit Deposit Ratio 84.30% 84.10% 86.30% 84.25% 91.32%
Cost of Deposit 6.12% 6.92% 6.47% 5.85% 6.25%
Yield on Loans and Advances 8.29% 10.22% 9.59% 9.06% 10.37%
Spread 2.17% 3.30% 3.12% 3.21% 4.12%
Return on Average Assets 0.73% 0.78% 1.09% 1.30% 1.15%
Return on Average Equity 10.05% 10.99% 16.55% 17.55% 13.78%
Equity Multiple (Times) 14.97 15.13 15.60 14.80 12.14
PERFORMANCE RATIO
Profit per Employee 1.63 3.04 2.75 3.00 2.17
Operating Profit as % of Working Fund 1.19% 2.33% 2.18% 2.53% 2.17%
Net Interest Income as % of Working Fund 2.38% 2.72% 2.57% 2.38% 2.95%
Burden Coverage 59.54% 78.61% 79.30% 106.94% 72.04%
Burden 40.46% 21.39% 20.70% -6.94% 27.96%
Ratio to Fees Income 20.93% 22.39% 20.14% 21.97% 18.54%
Salary Exp. to total Operating Exp. 46.15% 41.74% 44.72% 47.39% 43.84%
Salary Exp. To Fees Income 137.96% 82.35% 103.06% 96.13% 132.52%
Cost Income /Efficiency Ratio 55.83% 44.17% 46.41% 44.57% 56.05%
OTHER INFORMATION
No. of Branches 150 148 138 129 119
No. of Employees 2,428 2,418 2,305 2,192 2,043
No. of Correspondence Relationship 624 614 635 640 641
* Deposit amount includes Deposits and other accounts, Refinance against EDF from BB and adjusting account credit
balance shown on Financial Statements
** Interest Income includes interest income and interest on investment shown on Financial Statements
*** Proposed dividend for the year 2020

Deposits & Advances (BDT in Million) Import & Export (BDT in Million)
236,890.45
248,994.39
184,650.00
243,643.42
199,660.72
262,961.05
190,753.60
220,516.63
139,766.40
224,230.61
196,389.70
252,817.40
158,307.70
134,752.90
165,257.45
113,035.20
163,152.30
172,773.50
150,912.52
135,418.10
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Remittance (BDT in million) Total Assets ( BDT in Million)
35,943.00 330,785.56
35,239.10 316,363.47
30,893.00 291,385.64
29,976.40
260,169.93
24,048.20
204,127.47
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
No. of Branches No.of Employees
148 150 2,428

2,418
138
129
119 2,305
2,192
2,043
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Total Capital/Regulatory Capital (BDT in Million) Capital to Risk Weighted Assests Ratio (CRAR)
32,899.83 33,419.50 13.28% 13.92%

13.03% 13.61%
29,486.29 11.93%
24,581.38
22,367.17
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

OVERVIEW
Earning per Share (EPS) (BDT) Net Assets Value Per Share (NAVP) (BDT)
3.70 3.68 22.74 22.93

22.66
3.01
22.46
2.32 22.31
2.20
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Total Shareholders' Equity (BDT in Million) Market price per share (BDT)
22,101.78 26.40
20,908.29
18,683.55
17,584.02
16,809.61
18.00
15.10
13.20
12.70
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Return on Average Equity(ROE) Profit before provision and Tax (BDT in Million)
17.55% 7,355.74
16.55%
6,570.57
6,345.58
13.78%
10.99%
10.05% 4,436.43
3,947.74
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Profit after Tax (PAT) (BDT in Million) Fixed Assets (BDT in Million)
3,017.73 3,000.95 3,175.03 3,288.45

3,142.45
3,057.50 3,093.34
2,227.35 2,175.49
2,161.32
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

Net Interest Margin (NIM) Price Earning Multiple (Times)
3.43% 7.14
2.98% 3.12%
2.92% 5.78
2.69% 5.69
5.01 4.89
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Return on Average Assets (ROA) Advance Deposit Ratio (ADR)
1.30% 91.32%
84.25% 86.30% 84.30%
1.15%
1.09% 84.10%
0.78%
0.73%
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Operaing Profit as % of Working Fund
2.53%
2.33%
2.17% 2.18%
1.19%
2016 2017 2018 2019 2020

OVERVIEW
HORIZONTAL
& VERTICAL ANALYSIS
Horizontal Analysis
For the last five years’ Balance sheet
2020 2019 2018 2017 2016

PROPERTY AND ASSETS
Cash 124.03% 134.26% 124.81% 125.43% 100.00%
In hand (including foreign currencies) 136.88% 147.22% 134.61% 116.43% 100.00%
"Balance with Bangladesh Bank and its agent bank (including
121.98% 132.18% 123.25% 126.87% 100.00%
foreign currencues) (including foreign currencies)"
Balance with other banks and financial institutions 125.03% 32.95% 70.17% 23.22% 100.00%
In Bangladesh 19.85% 28.99% 21.26% 18.04% 100.00%
Outside Bangladesh 1093.24% 69.38% 520.42% 70.94% 100.00%
Money at Call and short notice 100.00% 100.00% 100.00% 100.00% 100.00%
Investments 148.70% 151.14% 118.40% 105.62% 100.00%
Government 179.50% 182.84% 136.90% 120.97% 100.00%
Others 62.27% 62.18% 66.49% 62.55% 100.00%
Loans and advances/investments 164.99% 156.97% 148.58% 132.30% 100.00%
Loans, cash credits, overdrafts, etc. 172.79% 162.98% 150.79% 130.75% 100.00%
Bills purchased and discounted 82.60% 93.49% 125.29% 148.71% 100.00%
Fixed assets including premises, furniture and fixtures 97.43% 98.97% 103.57% 96.30% 100.00%
Other assets 881.80% 761.13% 615.34% 561.69% 100.00%
Non- banking assets 100.00% 100.00% 0.00% 0.00% 0.00%
Total assets 162.05% 154.98% 142.75% 127.45% 100.00%
LIABILITIES AND CAPITAL
Liabilities
Borrowings from other banks, financial institutions and agents 432.43% 234.25% 228.09% 183.83% 100.00%
Subordinated non-convertible bonds 120.00% 140.00% 160.00% 80.00% 100.00%
Deposits and other accounts 157.14% 158.65% 147.30% 133.98% 100.00%
Current accounts and other accounts 170.29% 138.98% 137.57% 141.44% 100.00%
Bills payable 168.10% 125.76% 121.37% 107.12% 100.00%
Savings bank deposits 166.11% 143.93% 129.22% 117.53% 100.00%
Fixed deposits 253.58% 316.34% 287.11% 209.53% 100.00%
Deposits under schemes 93.09% 85.35% 79.33% 92.63% 100.00%
Other liabilities 111.93% 118.42% 92.21% 76.58% 100.00%
164.79% 157.73% 145.58% 129.50% 100.00%
Total liabilities and Shareholders’ equity
Total Shareholders’ equity 131.48% 124.38% 111.15% 104.61% 100.00%
Paid up capital 133.13% 126.79% 110.25% 105.00% 100.00%
Statutory reserve 154.54% 144.59% 131.82% 115.85% 100.00%
General reserve 100.00% 100.00% 100.00% 100.00% 0.00%
Other reserve 33.32% 30.73% 29.32% 53.30% 100.00%
Retained earnings 96.22% 98.19% 80.51% 111.44% 100.00%
Total liabilities and Shareholders’ equity 162.05% 154.98% 142.75% 127.45% 100.00%
Horizontal Analysis (Balance Sheet):
Horizontal Analysis on Balance Sheet refers to the analysis of growth of each component of balance sheet items from the base period.
Here base period is considered the year 2016 giving a value of 100% and after that period value above 100% means positive growth
and below 100% means negative growth compared to base year.Here,assets,liabilities and shareholder’ equity are showing consistent
growth over the last five years which symbolize sustainable balance sheet growth of the bank as a whole.

Horizontal Analysis
For the Profit & Loss Account
2020 2019 2018 2017 2016

Operating Income
Interest income 140.55% 167.32% 147.75% 118.02% 100.00%
Interest paid on deposits, borrowings, etc. 155.64% 168.52% 151.41% 119.97% 100.00%
Net interest Income 87.24% 163.11% 134.81% 111.13% 100.00%
Investment income 135.74% 125.57% 116.71% 113.18% 100.00%
Commission, exchange and brokerage 117.87% 157.63% 127.38% 139.16% 100.00%
Other operating income 72.41% 67.18% 84.19% 113.40% 100.00%
Total operating income 78.13% 81.33% 117.29% 117.42% 100.00%
Salaries and allowances 122.74% 97.85% 98.81% 100.76% 100.00%
Rent, Taxes, Insurance, Electricity, etc. 61.79% 58.35% 127.15% 108.01% 100.00%
Legal expenses 251.10% 372.62% 285.48% 182.20% 100.00%
Postage, Stamp, Telecommunication, etc. 102.19% 105.19% 111.91% 97.28% 100.00%
Stationery, Printing, Advertisements, etc 142.31% 148.45% 165.81% 106.47% 100.00%
Managing Director's salary and fees 115.00% 115.92% 155.10% 141.74% 100.00%
Director's fees 94.41% 97.07% 81.52% 89.94% 100.00%
Auditors’ fees 131.25% 81.25% 159.78% 168.01% 100.00%
Depreciation and Repair of Fixed Assets 236.83% 237.11% 117.29% 100.64% 100.00%
Other expenses 100.33% 91.80% 73.05% 75.59% 100.00%
Total operating expenses 116.56% 102.85% 97.10% 93.37% 100.00%
Profit / (loss) before provision 88.98% 165.80% 143.03% 148.10% 100.00%
Provision for loans and advances
Provision against Unclassified Loans (General provision) 89.09% 1641.63% 490.50% 313.82% 100.00%
Provision against Classified Loans (Specific provision) 61.83% 19.22% 182.32% 232.10% 100.00%
Provision for off-balance sheet items 1.11% -6.75% -46.03% 162.29% 100.00%
Other provisions 100.00% 0.00% 100.00% 0.00% 0.00%
Total provision 130.28% 408.32% 210.17% 237.37% 100.00%
Total profit / (loss) before taxes 77.75% 99.80% 124.76% 123.81% 100.00%
Provision for taxation
Current tax 44.93% 106.46% 110.98% 107.08% 100.00%
Deferred tax 377.38% 854.74% 1104.94% 1120.37% 100.00%
Net profit after taxation 97.03% 97.67% 134.73% 135.48% 100.00%
Horizontal Analysis(Profit and Loss Statement):
Horizontal Analysis on Profit and Loss Statement refers to the analysis of growth of each component of income statement items
from the base period.Here base period is considered the year 2016 giving value 100% and after that period value above 100% means
positive growth and below 100% means negative growth compared to base year. The above table shows that total operating income,
exoenses and operating profit of MBL are growing cinsistently over the periods.

OVERVIEW
Vertical Analysis
For the Balance sheet
2020 2019 2018 2017 2016

PROPERTY AND ASSETS
Cash 4.69% 5.30% 5.35% 6.03% 6.12%
In hand (including foreign currencies) 0.71% 0.80% 0.80% 0.77% 0.84%
Balance with Bangladesh Bank and its agent bank (including
3.97% 4.50% 4.56% 5.26% 5.28%
foreign currencues) (including foreign currencies)
Balance with other banks and financial institutions 1.34% 0.37% 0.85% 0.32% 1.73%
In Bangladesh 0.19% 0.29% 0.23% 0.22% 1.56%
Outside Bangladesh 1.15% 0.08% 0.62% 0.09% 0.17%
Money at call and on short notice 0.08% 0.12% 0.05% 0.04% 0.00%
Investments 14.80% 15.73% 13.38% 13.37% 16.13%
Government 13.17% 14.03% 11.40% 11.29% 11.89%
Others 1.63% 1.70% 1.97% 2.08% 4.24%
Loans and advances 75.27% 74.88% 76.95% 76.74% 73.93%
Loans, cash credits, overdrafts, etc. 72.02% 71.02% 71.35% 69.29% 67.54%
Bills purchased and discounted 3.26% 3.85% 5.61% 7.46% 6.39%
Fixed assets including premises, furniture and fixtures 0.94% 0.99% 1.13% 1.18% 1.56%
Other assets 2.89% 2.60% 2.29% 2.34% 0.53%
Non- banking assets 0.01% 0.01% 0.00% 0.00% 0.00%
Total assets 100.00% 100.00% 100.00% 100.00% 100.00%
Liabilities
Borrowings from other banks, financial institutions and agents 11.51% 6.52% 6.89% 6.22% 4.31%
Subordinated non-convertible bonds 1.09% 1.33% 1.65% 0.92% 1.47%
Deposits and other accounts 74.15% 78.27% 78.90% 80.38% 76.46%
Current accounts and other accounts 18.02% 15.38% 16.53% 19.03% 17.16%
Bills payable 1.23% 0.96% 1.01% 1.00% 1.19%
Savings bank deposits 8.34% 7.55% 7.36% 7.50% 8.13%
Fixed deposits 28.19% 36.77% 36.24% 29.62% 18.02%
Deposits under schemes 18.36% 17.60% 17.77% 23.23% 31.97%
Other liabilities 6.57% 7.27% 6.15% 5.72% 9.52%
Total liabilities 93.32% 93.39% 93.59% 93.24% 91.77%
Capital/Shareholders’ equity
Total Shareholders’ equity 6.68% 6.61% 6.41% 6.76% 8.23%
Paid up capital 2.97% 2.96% 2.80% 2.98% 3.62%
Statutory reserve 2.55% 2.49% 2.47% 2.43% 2.67%
General reserve 0.47% 0.44% 0.48% 0.19% 0.00%
Other reserve 0.24% 0.24% 0.24% 0.50% 1.19%
Retained earnings 0.45% 0.48% 0.43% 0.66% 0.75%
Total liabilities and Shareholders’ equity 100.00% 100.00% 100.00% 100.00% 100.00%
Vertical Analysis (Balance Sheet):
Vertical Analysis on Balance sheet refers to the components of balance sheet items as a % of total Assets over the periods which
would be termed as common sizing of balance sheet.In assest side,Loans and advances(75.27%) and investment(14.80%) holds major
portion.Investment decreased insignificantly on other investemnt portfolio where Loan and advances had a consistency growth
except year 2016 in line with growth of overall industry.In liability side,deposit holds major portion(74.15%) and shows a consistant
trend over the last five years as per overall industry deposit trend.

Vertical Analysis
For the Profit and Loss Statement
2020 2019 2018 2017 2016

Operating Income
Interest income 71.08% 73.76% 72.49% 65.78% 66.18%
Interest paid on deposits, borrowings, etc. 61.34% 57.89% 57.89% 52.11% 51.57%
Net interest Income 9.74% 15.87% 14.60% 13.67% 14.60%
Investment income 15.17% 12.24% 12.66% 13.94% 14.63%
Commission, exchange and brokerage 8.09% 9.43% 8.48% 10.52% 8.98%
Other operating income 5.65% 4.57% 6.38% 9.76% 10.22%
Total operating income 38.66% 42.11% 42.11% 47.89% 48.43%
Salaries and allowances 11.11% 7.72% 8.68% 10.05% 11.94%
Rent, Taxes, Insurance, Electricity, etc. 1.42% 1.17% 2.83% 2.73% 3.24%
Legal expenses 0.08% 0.10% 0.09% 0.06% 0.07%
Postage, Stamp, Telecommunication, etc. 0.24% 0.21% 0.25% 0.25% 0.29%
Stationery, Printing, Advertisements, etc 0.93% 0.85% 1.06% 0.77% 0.91%
Managing Director's salary and fees 0.05% 0.04% 0.06% 0.07% 0.08%
Director's fees 0.02% 0.02% 0.01% 0.02% 0.02%
Auditors’ fees 0.00% 0.00% 0.01% 0.01% 0.01%
Depreciation and Repair of Fixed Assets 3.28% 2.86% 1.57% 1.54% 1.82%
Other expenses 7.05% 5.63% 4.98% 5.86% 6.95%
Total operating expenses 24.18% 18.60% 19.54% 21.35% 25.35%
Profit / (loss) before provision 14.47% 23.51% 22.57% 26.55% 23.08%
Provision for loans and advances
Provision against Unclassified Loans (General provision) 0.69% 11.16% 3.71% 2.70% 1.02%
Provision against Classified Loans (Specific provision) 1.27% 0.34% 3.63% 5.25% 2.68%
Provision for off-balance sheet items 0.01% -0.04% -0.29% 1.16% 0.85%
Other provisions 2.56% 0.92% 0.04% 0.00% 0.00%
Total provision 4.53% 12.38% 7.09% 9.10% 4.55%
Total profit / (loss) before taxes 9.94% 11.12% 15.47% 17.44% 18.53%
Provision for taxation
Current tax 2.08% 4.30% 4.99% 5.47% 6.07%
Deferred tax -0.07% -0.13% -0.19% 0.00% -0.02%
Net profit after taxation 7.92% 6.95% 10.67% 11.97% 12.49%
Vertical Analysis (Profit and Loss Statement):
Vertical Analysis on Profit and Loss Statement refers to the components of income statement items as a % of total income over
the periods which would be termed as common sizing of income statement.In income side,interest income(71.08%), income from
investment (15.17)% and comission,exchange and brokarage (8.09%) hold major portion. Income from investment also increased
accordingly in 2020. Provision for unclassified loan decreased in current year due to Bangladesh Bank instruction for COVID-19
Secnario. Operating expenses as a % of total income in constant over the periods except year 2020.

OVERVIEW
DUPONT ANALYSIS
A BROADER VIEW OF MBL’S RETURN ON EQUITY (ROE)
MBL’s ROE has been decomposed in this section in terms of Net Profit Margin, Asset
Turnover, and Financial Leverage which allows its investors to focus on the key metrics
of financial performance individually. In addition, 5 factors model has been applied
by decomposing Net profit margin to operating profit margin, effect of non-operating
items and tax effects.
ROE
2020 : 10.05%
2019 : 10.99%
Net Profit Margin Total Asset Turnover Financial Leverage

2020: 7.92% 2020: 0.0843 2020: 15.0465
2019: 6.95% 2019: 0.1030 2019: 15.3504
Operating Profit Margin Effect of Non-Operating Items Tax Effect

2020: 18.86% 2020:0.6868 2020: 0.7971
2019: 23.51% 2019: 0.4732 2019: 0.6251
Figure: DuPont Analysis
DuPont analysis breaks ROE into its constituent of operating profit margin and increase of two other
components to determine which of these factors are components, i.e. effect of non-operating items and tax
most responsible for changes in ROE. effect) resulted in moderate decrease of net profit margin
to 7.92% in 2020 compared to 6.95% of last year.
Net Profit Margin
Net profit margin consists of three important components Total Asset Turnover
namely operating profit margin, effects on non-operating
Total assets turnover was lower than previous year due to
items and tax effects as mentioned in second level break
optimum utilization of assets.
down. Operating profit margin has dropped to 18.86% in
2020 from 23.51% in 2019 due to significant decrease of
Financial Leverage
net interest income by 47% for implementing single digit
interest rate and pervasive effect of COVID-19 pandemic. During the year 2020, the Bank kept optimum level of
Effects of non-operating items have increased to 0.6868 financial leverage ratio in consideration with stabilizing
from 0.4732 in comparison with previous year. Moreover, earnings, favorable tax treatment and proportionate risks.
Tax effect raised to 0.7971 from 0.6251 in 2020. The Hence, MBL’s financial leverage slightly decreased to
combined effects of these three components (decrease 15.0465 from last year’s 15.3504

SEGMENT
ANALYSIS
Total Assets Position Total Assets Position (BDT in Million)

3.87% 1.68%
Particulars 2020 2019
0.18%
Mercantile Bank Limited 330,785.56 291,385.65
Islami Banking Window 614.36 -
Off-shore Banking Unit 13,596.81 12,998.34

94.26%
Mercantile Bank Securities Limited 5,907.71 591.34
Mercantile Bank Limited Islami Banking Window Off-shore Banking Unit
Mercantile Bank Securities Limited Mercantile Exchange House (UK) Ltd. Mercantiel Exchange House (UK) Ltd. 15.56 14.55
Profit before tax Profit before tax (BDT in Million)

-1% 3%
11%
Mercantile Bank Limited 2,711.32 4,059.83
Off-shore Banking Unit 359.62 291.10
Islami Banking Window (16.85) -
Mercantile Bank Securities Limited 99.17 (65.05)

86%
Mercantiel Exchange House (UK) Ltd. (6.07) (1.61)
Mercantile Bank Securities Limited Mercantiel Exchange House (UK) Ltd. 3,147.18 4,284.27
(BDT in Million)
Commission, Other
Interest Investment
Operating Revenue exchange & Operating Total Income
Income Income
Brokerage Income
Mercantile Bank Limited 18,787.91 4,139.01 2,124.70 1,538.97 26,590.59
Islami Banking Window - - - - -
Off-shore Banking Unit 600.28 - 81.64 3.27 685.20
Mercantile Bank Securities Limited - - - 220.56 220.56
Mercantiel Exchange House (UK) Ltd. - - - 17.69 17.69
Total Operating Revenue 27,514.05
Operating Revenue
2% 1%
0%
Details Segment Analysis has

been illustrated in ‘Segment
Reporting’ to the Financial
Statements 2020 of Mercantile
97%
Bank Limited. (Page no. 412-413)
Mercantile Bank Securities Limited Mercantile Exchange House (UK) Ltd.

Directors’ Report

WORLD
ECONOMY 2020
A Pandemic like no other
A once-in-a-century crisis—a Great Disruption unleashed term impacts. Limited fiscal space and high levels of
by a viral pandemic—hit the world economy in 2020. The public debt constrained the ability of many developing
pandemic spread like a forest fire, reaching every corner countries to roll out sufficiently large stimulus packages.
of the world, infecting more than 90 million and killing
close to 2 million people worldwide. For several months, The pandemic has exposed the systemic vulnerability
uncertainties and panic paralyzed most economic of the world economy. It has also shown that
activities in both developed and developing economies. sustainable development—promoting inclusive and
Trade and tourism came to a grinding halt, while job equitable growth, reducing inequality and enhancing
and output losses exceeded levels seen in any previous environmental sustainability—can provide safeguards
crisis. In a matter of months, the number of people living and resilience against future crisis. There is clearly no
in poverty increased sharply, while income and wealth sustainable development without resilience and there is
inequality trended towards new highs. Governments no resilience without sustainable development. Building
around the world responded rapidly—and boldly—to economic, social and environmental resilience must
stem the health and economic contagion of the crisis. guide the recovery from the crisis. Economic resilience
Fiscal and monetary stimulus packages were quickly with new fiscal and debt sustainability frameworks,
rolled out to save the economy. The crisis responses, societal resilience with universal social protection
however, entailed difficult choices between saving lives schemes and climate resilience with greater investments
and saving livelihoods, between speed of delivery and in the green economy must be the building blocks of a
efficiency, and between short-term costs and long- resilient recovery.
6% or more
3% - 6%
0-3%
3% - 0
less than -3%
No data
Figure: World map by GDP growth in 2020
This will also require a stronger and more effective countries in Europe and several states of the United States
multilateral system which can complement and of America imposed early on during the outbreak. Output
reinforce—not undermine—national efforts to put the in developed economies is estimated to have shrunk by
world firmly on the trajectory of sustainable development. 5.6 per cent in 2020, with growth projected to recover to
4.0 per cent in 2021. A renewed outbreak, however, set
Plummeting World Economic Growth
off new lockdown measures in the third quarter of 2020
World gross product fell by an estimated 4.3 per cent in in many countries in Europe, making a quick recovery
2020—the sharpest contraction of global output since the more unlikely. The developing countries experienced a
Great Depression. In contrast, world output had shrunk relatively less severe contraction, with output shrinking
by 1.7 per cent during the ‘Great Recession’ in 2009. by 2.5 per cent in 2020. Their economies are projected
The pandemic clearly hit the developed economies the to grow by 5.7 per cent in 2021. The least developed
hardest, given the strict lockdown measures that many countries (LDCs) saw their gross domestic product (GDP)

Directors’ Report
shrink by 1.3 per cent in 2020, with growth expected to and facilitate transactions within networks and between
reach 4.9 per cent in 2021. The countries in Latin America firms and customers. New technologies, such as 3D
and the Caribbean and South Asia experienced the printing and additive manufacturing, have the potential
sharpest declines. In contrast, the economies in East Asia to fundamentally alter business models and redefine
fared relatively better than those in all other developing comparative advantage by facilitating scale-independent
regions, with GDP expanding by 1 per cent in 2020. On
efficient production and bringing production systems
the back of China’s quick - and robust - recovery, the
closer to consumers. In the medium term, such
East Asian economies are forecast to grow by 6.4 per
developments could support reshoring trends by
cent in 2021. The economies of the Group of Twenty
increasing the competitiveness of previously non-
(G20)—which account for nearly 80 per cent of world
output—contracted by 4.1 per cent, mirroring the overall competitive production locations and by encouraging a
performance of the world economy. Only China, among shift from the traditional model of economies of scale of
G20 members, managed to register positive growth in large plants serving global markets to networks of smaller,
2020. It will remain critical that the G20 economies return more flexible and geographically distributed plants.
to the trajectory of growth, not only to lift the rest of the Moreover, digitalization and emerging technologies,
world economies but also to make the world economy including artificial intelligence and machine learning,
more resilient to future shocks. are also transforming service delivery worldwide. They
will increasingly facilitate the cross-border exchange
Short-term pain, long-term scars
of health, education and other services, reinforcing the
The pandemic will likely transform consumer behaviour growing importance of services in global trade and
and economic structures. It is unlikely that in-person development.
interactions will quickly return to pre-crisis levels even
if millions are inoculated against COVID-19. Remote South Asia: this former champion will have to
work will likely become the new norm for many service find its way back to growth
sector jobs. Meetings and conferences may remain
largely digital, reducing demand for business travel- The pandemic and the global economic crisis have
related services. Consumer spending will increasingly consequently left deep marks on South Asia, turning this
move online. Leisure and entertainment will also become former growth champion into the worst performing region
increasingly digital, replacing brick-and-mortar venues in 2020. Regional economic growth fell dramatically from
for retail and entertainment. These shifts will likely reduce 3.1 per cent in 2019 to -8.6 per cent in 2020, a far cry
local government revenues and adversely impact the from the 5.1 per cent growth predicted in 2019. Without
delivery of basic services—health, sanitation, education, exception, all economies in the region have been badly
transportation and public safety—in urban centres hit by the crisis, whose impacts have been amplified and
worldwide. These shifts, already under way before the accelerated by existing vulnerabilities. Poorly organized
pandemic, will profoundly impact the trajectory of
labour markets and the absence of a reliable social safety
sustainable development in the future. Furthermore,
net prevented Governments from implementing the
the pace of digitalization, automation and robotization
effective restrictions needed to contain the spread of the
will likely accelerate during the post-pandemic period,
as businesses will pursue resilience and safeguards pandemic, while fiscal constraints and limited economic
against shocks to labour supply. Accelerated and more diversification restricted Governments’ manoeuvring
widespread automation and digitalization will likely make space. Higher price inflation due to COVID-19-induced
many job losses permanent. While automation and supply constraints limited the space required for monetary
innovation typically increase the productivity of workers policy to make up for the shortfall. India’s economic growth
and firms that can embrace new technologies, they also has fallen from 4.7 per cent in 2019 to -9.6 per cent in 2020,
displace less productive workers and firms. as lockdowns and other containment efforts slashed
domestic consumption without halting the spread of the
Digitalization is transforming manufacturing
disease, despite drastic fiscal and monetary stimulus.
and service delivery worldwide
Economic growth in Pakistan, which was already in the
Across the globe, COVID-19 has created rapidly growing grip of an ongoing twin fiscal and balance-of-payments
demand for digital services, accelerating ongoing crisis, has fallen from 0.3 per cent in 2019 to -2.7 per cent
digital transformation. With lockdowns and movement in 2020. Maldives, meanwhile, took a brutal hit from the
restrictions in place, operating digitally has been the near standstill in international tourism, erasing more than
only viable option for many firms to stay in business a fifth of its output in 2020 compared with the previous
and government agencies to perform their functions. year. Even Bangladesh, the fastest growing economy in
Digital processes are becoming ever more embedded in the region, has seen economic growth fall, although this
production and trade as information and communication
was cushioned somewhat by a recovery in trade and
technology (ICT) services control business processes
remittances in the second half of the year.

Economic growth in South Asia in 2021 will be insufficient, will experience economic growth ranging from 3.1 per
at 6.9 per cent, to make up for the losses of 2020, as cent (Sri Lanka) to 7.3 per cent (India).
pandemic hotspots re-emerge and, increasingly, the
ability of Governments to deal with the multitude of The recovery is subject, however, to significant risks. The
forecasts assume effective containment of the virus in
challenges becomes exhausted. While trade, remittances
South Asia and the rest of the world including no further
and investment are expected to pick up in 2021, as much
lockdowns in 2021, resurgence of global trade, and the
of the global economy moves towards recovery from
effective continuation of fiscal stimulus and containment
the widespread lockdown, investment and domestic
efforts in South Asia and other regions. Failure of any or
consumption in many South Asian countries will
all of these baseline assumptions to materialize could
nevertheless remain subdued owing to the continuing
plunge the region deeper into crisis. Opportunities exist
threat of the pandemic and the scarring effects of the as well but they are less likely and would be less impactful
crisis. Regional economic growth for 2022 is forecast than the downside risks. The development of new
at 5.3 per cent, which would allow South Asia to finally growth sectors, aided by targeted fiscal stimulus and the
exceed its 2019 economic output, albeit only marginally. disruptive effects of the crisis, could propel South Asia’s
On the other hand, South Asian countries that are development trajectory and allow the region to make
relatively more exposed to global economic conditions, up lost ground much more quickly. A forceful global
such as Bangladesh and Maldives with their high share of commitment to counter the negative consequences of
foreign trade and Nepal with its dependence on tourism the pandemic, particularly in developing countries, could
and remittances, will enjoy a stronger rebound, of about also allow the region to build back better and stronger and
10 per cent growth in 2021. Other countries in the region regain its position as the global development champion.

Directors’ Report
BANGLADESH
ECONOMY
Over the past decade Bangladesh’s economic growth Sectoral Growth

has steadily increased from 6 percent to 8 percent.
The global novel Coronavirus (COVID-19) pandemic According to the provisional estimate of BBS, the growth
has adversely affected the economy of Bangladesh. of agriculture sector has slowed to 3.11 percent in the
According to the provisional estimates of the Bangladesh FY2019-20, from 3.92 percent in FY2018-19. During the
Bureau of Statistics (BBS), GDP growth in FY2019-20 same period, industry sector grew by 6.48 percent, which
stood at 5.24 percent, compared to 8.15 percent in the was 12.68 percent in the previous fiscal year. The service
previous fiscal year. Growth in export and import in sector grew by 5.32 percent in FY2019-20 compared
FY2019-20 is negative. However, remittance inflows grew to 6.78 percent in the previous fiscal year. Within the
by 10.87 percent has reduced the current account deficit broad agriculture sector, the growth rate of agriculture
compared to the previous fiscal year. At the same time,
and forestry sector decelerated from 3.15 percent to
the increase in capital and financial account inflows has
2.08 percent in FY2019-20. In addition, growth in fishing
led to a surplus in the overall balance of payments. As
sector slowed slightly to 6.10 percent from 6.21 percent
a result, the foreign exchange reserves have increased
of previous fiscal year. The contribution of the broad
significantly. During this period, a marginal depreciation
in exchange rate of Taka with the US dollar is being agricultural sector to the GDP stood at 13.35 percent in
observed. To keep the country’s economy afloat in the face FY2019-20 against 13.65 percent in the previous fiscal
of the ongoing Coronavirus pandemic, extra spending on year. Of the 4 sectors of the broad industrial sector,
healthcare, emergency humanitarian assistance has been growth in the manufacturing (large and medium scale
materialised. The government has already announced a and small scale) has slowed down significantly. According
financial package of about Tk. 1.2 lakh crore for economic to provisional estimate, the growth of large and medium
recovery. Some of the notable activities of this package enterprises and small scale industries in GDP stood at 5.47
are: create special funds for export oriented industries; and 7.78 percent respectively in FY2019-20, compared
provide working capital facilities to the affected industry to 14.84 percent and 10.95 percent in the previous fiscal
and service sector organisations; provide working capital year. The growth of the construction sector stood at 9.06
facilities to small (including cottage industries) and percent as compared to 10.25 percent over the previous
medium industrial enterprises; increase the benefits fiscal year. Overall, the contribution of the broad industry
of the Export Development Fund; increase coverage of
sector stood at 35.36 percent in FY2019-20, as compared
social security; direct cash transfer to targeted people,
to 35.00 percent in the previous fiscal year. Among the
formulate various funds for the agricultural sector. As well
broad service sector, wholesale and retail trade; hotels
as financial incentives, various activities including policy
support such as reduction of import duty on COVID-19 and restaurants; transport, storage and communication;
related products, policy support to increase liquidity in financial intermediations; real estate and renting and
the banking sector has been provided. As a result of this business activities; health and social works etc. have
initiatives and lifting of holidays the economy has started decelerated significantly (about 1 to 3.1 percent) compared
to recover and thus the Asian Development Bank (ADB to FY2018-19. The contribution of broad service sector to
predicts that in 2021 Bangladesh will top the growth rate the GDP stood at 51.30 percent in FY2019-20, which was
among the SAARC countries. 51.35 percent in the previous fiscal year.
8.00%
7.50%
6.40%
5.80% 6.20%
4.00%
3.20% 3.50%
12.68%
6.48%
3.92%
5.32%
6.78%
3.11%
Afghanistan
Bangladesh
Bhutan
India
Maldives
Nepal
Pakistan
Sri Lanka
Agriculture Industry Service
FY 2019-20 FY 2018-19
Figure: ADB forecast of GDP growth in SAARC countries for 2021 Figure: Comparison of sector wise growth in FY 2019-20 and FY 2018-19

Inflation US$ 32.72 billion. It is noteworthy that remittances have
recently gone up to a record US$ 43.17 billion as on 31
In FY2018-19, the average CPI inflation was 5.48 percent, December, 2020.
remained within the target (5.50%) and 0.30 percent
lower than the previous fiscal year. Food inflation for Export
FY2018-19 decreased to 5.51 percent from 7.13 percent
in FY2017-18, while non-food inflation increased to 5.43 The economic activities came to stagnant due to the
percent from 3.73 percent of previous fiscal year. In COVID-19 pandemic, which also affected country’s foreign
FY2019-20, the inflation rate stood at 5.65 percent, which trade. The total export earnings for FY2018-19 stood at
is slightly higher than the target (5.50%). In this case, food US$ 40,535.04 million, which is 10.55 percent higher than
inflation increased to 5.56 percent and non-food inflation the previous fiscal year. Total export earnings in FY2019-
stood at 5.85 percent. The Coronavirus (COVID-19) has 20 stood at US$ 33,674.09 million, down 16.93 percent
slowed global economic activity and reduced inflation from the previous fiscal year. On month-to-month basis,
globally. However, the pandemic could ignite world food export growth in March 2020 declined by 18.21 percent
production and disruption of supply chain. Therefore, over the same month of the previous fiscal year due to
food inflation is likely to increase in the coming months. the coronavirus outbreak. In June 2020, export earnings
declined by only 2.50 percent compared to the same
month of the previous fiscal year. Some of the products
Inflation Rate (Last 3 Financial years)
that have been able to sustain growth during this period
are: frozen fish (17.99%), pharmaceuticals (4.49%),
5.78%
handicraft (2.86%), raw jute and jute products (8.10%).
On the other hand, growth in the readymade garments
5.65% sector slowed to 18.12 percent.
Import
5.48% The total import payment (C&F) for FY2018- 19 stood at

59,914.70 million, up 1.78 percent from the previous fiscal
year. Imports in FY2019-20 stood at US$ 54,784.70 million,
2017-18 2018-19 2019-20 down 8.56 percent over the previous fiscal year. Of this,
imports of food grains and consumer goods increased by
7.76 percent and 5.38 percent, respectively, while imports
Exchange Rate of intermediate commodities and capital goods declined
by 5.05 percent and 23.92 percent respectively.
In FY2018-19, the weighted average exchange rate of the
taka against the US dollar deprecated by 2.35 percent Remittance
compared to the previous fiscal year and stood at Tk.
84.03. In FY2019-20, the interbank weighted average In FY2018-19, remittance inflows increased by 9.60
exchange rate of taka against US$ depreciated by 0.9 percent over the previous fiscal year to US$ 16,419.63
percent and stood at 84.60. million. In FY2019-20, remittance inflows stood at US$
18,205.01 million, an increase of 10.87 percent over the
Foreign Exchange Reserve previous fiscal year. The lion’s share of remittances
comes from Middle Eastern countries. In this regard,
The surplus in the overall balance helped to maintain during FY2019-20, Saudi Arabia (22.06%), the United Arab
the foreign exchange reserve up. On 30 June 2020, the Emirates (13.58%) and the United States (13.21%) topped
foreign exchange reserves reached US$ 36.04 billion. the list. In this regard, remittance from United States has
On 30 June 2019, the foreign exchange reserve was shown a significant growth.

Directors’ Report
BANKING INDUSTRY
IN 2020
The performance of the banking sector of Bangladesh has credit, market and operational risks that a bank might be
been largely affected by the COVID-19 pandemic situation exposed to during its normal course of business. Under
for the last four months of FY20. Almost all the large Basel-III, banks in Bangladesh are instructed to maintain
financial markets around the world have been extremely the Minimum Capital Requirement (MCR) at 10.0 percent
impaired due to the lockdown aiming at hindering the of the Risk Weighted Assets (RWA) or BDT 4.0 billion as
escalation of pandemic. Bangladesh has also lost huge capital, whichever is higher. The aggregate amount of
export earnings and its pace of internal production has regulatory capital of the banking sector was BDT 1211.35
been reduced significantly due to 66 (sixty six) days billion as on 31 December 2019 which increased to BDT
long countrywide lockdown. Both the internal and 1267.09 billion at the end of June 2020. When it comes
external situations of the financial market have created to, Capital to Risk weighted Assets Ratio by type of
enormous pressure on the banking sector. Despite these, Banks, the State owned Commercial banks (SCB) have
all scheduled banks of the country remained operational been consistently poor apart from 2018 with lower than
for specified time in every working day during the required CRAR whereas Private Commercial Banks (PCB)
lockdown period to provide regular banking services to and Foreign Commercial Banks (FCB) have maintained
their customers. Moreover, to help the scheduled banks quite good CRAR.
and non-bank financial institutions (NBFIs) to survive in
this critical situation and to continue their contribution
in revamping the country’s economy, Bangladesh Bank
(BB) has announced a series of policies and prudential 25.40% 25.90%
23.30% 24.50% 24.40%
measures from the very beginning of the pandemic
situation. These include but not limited to, re-fixation of
the regulatory liquidity ratios to ensure additional liquidity 12.40% 12.20% 12.80%
13.60% 13.30%
in the banking sector, issuance of sufficient prudential
guidelines to maintain proper office environment in
10.30%
the banks for continuing the business activities in a 7.00%
5.90% 6.90%
limited scale as well as compensation package for the 5%
employees as frontline workers during the lock down 2016 2017 2018 2019 2020 (June)
period, easing of foreign trade and foreign currency
FCBs PCBs SCBs
transaction regulations, temporary relaxation in the loan
classification policy, modeling and implementation of Figure: Capital to Risk Weighted Assets Ratio (CRAR) by Type of Banks
the Govt. stimulus packages for different segments of (Source: DOS, BB)
the economy and refinance schemes to provide liquidity
support to those packages and introduction of special The most important indicator to demonstrate the asset
fund for capital market investment, etc. Furthermore, quality is the ratio of gross Non-Performing Loans (NPLs)
the pre-announced ceiling of lending rate was also to total loans and net NPLs to net total loans. At the end
introduced from April 01, 2020. As a part of supervisory of December 2019, the gross NPL ratio of the banking
activities, regular and special on-site inspections have sector stood at 9.32 percent. FCBs had the lowest and
been conducted throughout the year. The performance SCBs had the highest gross NPL ratio. FCBs’ gross NPL
of the Risk Management Committee at the board level of ratio was 5.74 percent, whereas those of SCBs and PCBs
banks is also being evaluated regularly. Special monitoring were 23.86 and 5.78 percent respectively at the end of
has been continued by BB to oversee the liquidity level of December 2019. It is important to note that the ratio of
the banking sector which results in a sufficient and strong gross NPLs to total loans and advances indicates a mixed
level of aggregate liquidity at the end of FY20. Besides, trend in the banking sector during the period from 2011
BB continues its efforts to reduce overall NPLs of the to June 2020. NPL ratio of the banking sector was 6.1
banking sector. At the end of FY20, the overall NPL ratio percent in 2011. But the ratio sharply increased to 10.0
and Capital to Risk weighted Asset Ratio (CRAR) stood at percent in 2012 mainly due to adaptation of new loan
9.56 percent and 11.63 percent respectively. classification policy. From 2013, a fluctuating trend of
NPL ratio was observed and it was 9.32 percent as on 31
Capital adequacy focuses on the overall position of
December 2019. At the end of June 2020, NPL ratio of the
bank’s capital and the protection of the depositors and
banking sector stood at 9.16 percent. Comparatively poor
other creditors from potential losses that a bank might
assessment and inadequate follow-up and supervision
incur. It helps banks to absorb possible losses due to

of the loans have eventually resulted into the current Although various indicators are used to determine
situation of poor asset quality of SCBs and SBs. However, earnings and profitability, the most representative and
various measures (i.e. strengthening of recovery unit and widely used ones are return on assets (ROA), return on
special recovery program) for increasing recovery against equity (ROE) and net interest margin (NIM). Earnings
non-performing loans have been taken by the banks. as measured by ROA and ROE differ among the bank
Besides, several policy initiatives regarding restructuring, categories. It is important to note that the ROA of the SCBs
rescheduling, recovery, one time exit and write-off of and SBs were always less than the industry average ROA.
classified loans have also been taken by Bangladesh Bank On the other hand, after showing an increasing trend from
to reduce NPLs. 2012 to 2016, ROA of PCBs has gradually declined in the
recent years. Though ROA of FCBs showed a decreasing
trend from 2014 to 2018 but it always remained in a strong
position. ROA of the banking sector stood at 0.42 percent
in June 2020.
Banks are going to face substantial pressure originating

from an ever-bulging defaulted loans in the next years as
the regulatory support in this particular area is due to expire
9.60%
by the end of this calendar year, bankers and experts say.

6.50%
5.90%
5.80%
5.50%
The banks were not allowed to classify loans adversely

4.90%
5.70%
5.50%
4.60%
7%
23.90%
26.50%
22.70%
30%
25%
until December 31, 2020, in line with the BB’s directives.

Experts, however, advised the banks to assess upfront
the risk appetite for both customers and sectors. Such
2016 2017 2018 2019 2020 an assessment will help better adjust risks that might be
created after the end of Bangladesh Bank’s policy support
SCBs PCBs FCBs
intended to help businesses overcome the adverse effects
Figure: Ratio of Gross NPLs to Total Loans by type of Banks of the Covid-19 pandemic, they noted, saying 2021-22 will
(Source: BRPD, BB) be more challenging years for the banks.

Directors’ Report
BUSINESS
REVIEW
Deposits & Deposit Mix
The major challenge faced by the Bank during Deposit Mix 2020
2020 was to bring down the cost of deposit for
2%
implementation of single digit loan interest rate as
13%
per Bangladesh Bank’s instruction. To do so, we have
emphasized on restructuring our deposit mix with a 11%
view to keeping down the cost of funds as well as to 25%
build up the sustainable deposit base by reducing our
11%
dependence on big chunk corporate deposits. As a
result, high cost deposits dropped significantly by 38%
10.48% and Low Cost and No Cost deposit grew by Deposit Under Schemes Fixed Deposits Savings Deposits
Current Deposits& other accounts Short Notice Deposits Bills Payable
23.55% and 15.44% respectively. At the end of 2020
total deposits of the Bank stood at BDT 245,265.71
BDT in Million
million as compared to BDT 247,624.47 million of 2019.
Deposit Mix Dec-20 Dec-19 Growth
However, we are endeavoring to make our deposit
High Cost Deposit 154,004.70 172,034.15 -10.48%
products even more attractive to the prospective
clienteles by ensuring delivering superior and value Low Cost Deposit 60,926.75 49,313.61 23.55%
adding customer services. No Cost Deposit 30,334.27 26,276.71 15.44%

Total 245,265.71 247,624.47
Deposit Mix BDT in Million Deposit Mix-2020
12%
2020 2019
Type
Volume % Volume %
Deposit Under 63%

60,745.94 24.8 55,695.38 22.5
Schemes
25%
Fixed Deposits 93,258.75 38.0 116,338.77 47.0
High Cost Deposit Low Cost Deposit No Cost Deposit

Savings Deposits 27,577.42 11.2 23,894.40 9.7
Loans and Advances
Current Deposits
26,263.19 10.7 23,231.08 9.4
& other accounts Total loans and advances of the Bank stood at BDT
Short Notice 248,994.39 million as on December 31, 2020 against
33,349.33 3.6 25,419.21 10.3
Deposits that of BDT 236,890.38 million at the end of 2019. The
Bank recorded a 5.11% growth in loans and advances.
Bills Payable 4,071.08 1.7 3,045.63 1.2 Major sectors where the Bank extended credit includes
trade and commerce, garments industries, large and
Total 245,265.71 100 247,624.47 100 medium scale industries, construction, agriculture and
related sectors, hospital and medical Services, transport,
pharmaceuticals etc. Besides, the Bank continued its
support to Small and Medium Enterprises (SMEs) and
expanded credit facilities to them through its SME
Financing Division.

Sector Wise Loans & Advances Mix BDT in Million
Sectors Dec-20 % Dec-19 %
Education (School/College, University, Research institute) 326.26 0.13 326.95 0.14
Health 2,268.87 0.91 246.28 0.1
Agriculture 11,124.86 4.47 3,988.29 1.68

Commodities (Sugar/ Edible Oil/ Wheat/ Rice/ Dal/ Peas/
12,620.85 5.07 19,646.37 8.29
Maize etc), Food & Beverage
Trade Finance 35,204.74 14.14 36,648.56 15.47
Transport 1,535.20 0.62 1,216.53 0.51
Shipping 9,874.17 3.97 146.66 0.06
Textile (Excluding IDBP) 14,928.37 6 11,250.39 4.75
Textile (IDBP) 832.23 0.33 1,804.69 0.76
Readymade Garments (RMG) [excluding IDBP] 48,059.97 19.3 42,935.27 18.12
Readymade Garments (RMG) [IDBP] 67.362 0.03 276.41 0.12
Tele communication 923.93 0.37 941.61 0.4
IT & Computer/Trade 378.59 0.15 368.48 0.16
Power & Fuel 2,861.77 1.15 7,633.70 3.22
Real Estate 7,736.39 3.11 7,708.73 3.25
Cement 1,296.75 0.52 1,085.58 0.46
Chemicals 2,344.05 0.94 4,463.61 1.88
Leather & Leather products 4,669.17 1.88 4,418.41 1.87
Plastic & Plastic products 919.42 0.37 1,055.02 0.45
Electrical & Electronic goods 3,724.00 1.5 4,537.80 1.92
Paper & Packaging 4,846.12 1.95 5,142.11 2.17
Jute & Jute products 3,484.64 1.4 3,184.60 1.35
Glass & Glass products 0.009 - 0.01 -
Ceramics (Table ware, Sanitary ware, Tiles etc.) 1,182.31 0.47 1,114.34 0.47
Iron & Steel 10,548.79 4.24 20,279.39 8.56
Engineering & Construction 7,572.01 3.04 7,313.01 3.09
Contractor Finance 4,766.49 1.91 4,046.99 1.71
Capital Market Intermediaries 810.06 0.33 623.61 0.26
Backward Linkage 4,148.63 1.67 3,895.94 1.64
Non Bank Financial Institution (NBFI) 8,770.58 3.52 9,049.27 3.82
Service (Hotel, Restaurant, Travelling, Tickets, etc.) 1,649.63 0.66 1,658.30 0.7
Others 39,518.14 15.87 29,883.48 12.62
Total 248,994.39 100 236,890.38 100

Directors’ Report
Import Trade Remittance BDT in Million
35,239.10
Like before, this year also MBL has exhibited quality 30,893.00
financing while facilitating import trade. As international
trade had halted during some time in 2020 due to the
impact of COVID-19, the Bank’s import business dropped
by 6% to BDT 172,773.50 million compared to BDT
184,650.00 million of the year 2019. The Bank is engaged
in opening Letter of Credit in different sectors including
2019 2020
machineries, garments & accessories, wheat, sugar,
CDSO, vegetable oil, cement clinkers, hot roll steel, raw
cotton, ships-breaking industries etc. Review of Divisional Performance
MBL has several business divisions. Detail overview of

Import BDT in Million
business divisions during 2020 has been presented in a
184,650.00
172,773.50 separate segment under ‘Divisional Overview’.
Operating Performance
MBL continued to keep pace in delivering growth in

every aspect of its operating performance during the
year 2020, which faced dual challenge of implementing
single digit interest rate and COVID-19 impact. The
2019 2020
bank strengthened its focus on cost optimization and
improving operating efficiency, a balanced approach that
Export Trade
has enabled us to upgrade its capabilities to respond to
The Bank’s export business dropped by 17% to BDT market needs and prepare it to become the best Bank in
135,413.00 in 2020 as against BDT 163,152.30 million of Bangladesh. Its relentless focus on customer needs and
the year 2019 due to COVID-19 impact. The focal point our stakeholder expectations has made us competitive in
of our export financing was the garment industry, the the banking industry. The low interest rate environment,
lone driving force of the economy of Bangladesh and slow growth environment of the previous years has made
the single biggest source of foreign exchange and the Bank vigilant. The banking industry is facing an unusual
employment provider of the country. Other notable items combination of circumstances that are giving special
were jute & jute goods, leather, handicrafts, tea, frozen impetus to its drive for efficiency. The Bank is cautious of
food & fish products. its strategies as margins on loan operations have been
driven down in the industry due to significant amount of
bad loans. Customer of the Bank preferences in terms
Export BDT in Million
of banking products and services are also changing
163,152.30 and the Bank has particularly focused on the channels
135,413.00 that are used to access these products. The Bank has
invested our resources into acquiring technology to
provide better services and reduce security risks. Added
to these pressures is the cost of being compliant with
enhanced regulatory requirements of Bangladesh Bank.
The Bank’s carefully executed efficiency initiatives under
2019 2020
these exceptional pressures have enabled it to achieve
significant results, our revenue stream and asset base are
Foreign Remittance growing while overhead costs are growing at a slower
rate. The key operating performance indicators are
The Bank experienced a slight 12% fall in inward depicted below:
remittance collection due to the impact of COVID-19. In
2020, the bank handled a total inward foreign remittance Financial Performance Analysis- Profitability
of BDT 30,893.00 million compared to BDT 35,239.10
Net interest income of the Bank fell sharply for the
million in 2019. During the time, we have strengthened
impact of implementation of single digit interest rate
our relationships with various global money transfer
during 2020. As a result, during the year operating profit
companies.

of the bank stood to BDT 3,947.73 million as compared Interest Income BDT in Million
to BDT 7,355.75 million in the year 2019. Large amount
of provision set aside during 2019 helped the bank as a 23,081.81
cushion during the earning volatility in 2020. As a result,
19,388.19
Net profit after tax of the Bank slightly decreased to BDT
2,161.32 million in 2020 compared to 2,175.50 in 2019.
Net Profit BDT in Million
2,175.50
2,161.32
2019 2020
Operating Expenses
Operating expenses increased by 13.33% year-on-year

to BDT 6,595.83 million in 2020 consistent with the
business expansion and resources hunting. Salaries and
employee benefits increased to BDT 3,030.84 million and
2019 2020
represented 45.95% of the total operating expenses in
2020. Office administration and establishment expenses
Total Income
mainly include rent on premises, taxes, electricity, legal
Gross Income of the Bank dropped to BDT 27,275.79 million expenses, insurance, security printing and stationery,
registering a 12.84% fall in the year 2020 in comparison to postage and telecommunication. The growth of office
2019 mainly due to the impact of low interest rate. The administration and establishment expenses was driven by
decrease in the income stream was largely attributable to higher transaction volumes, opening new branches and
the implementation of single digit interest rate since April growth in employment. The bank was able to maintain its
2020. Besides, fees based income contributed lightly cost per employee and administration and establishment
towards positive growth of profit. During the year 2020, expenses per branch within the budgeted levels for the
MBL focused on sound portfolio management and kept last five years consecutively. MBL firmly believes that the
down cost of fund at optimum level. continuous reminders and awareness will generate solid
business growth.
BDT in Million
Particulars 2020 2019 Operating Expenses BDT in Million
Interest Income 19,388.19 23,081.81
6,595.83
Investment Income 4,139.01 3,828.90
5,820.26
Commission, Exchange and 2,206.34 2,950.70
Brokerage
Other Operating Income 1,542.24 1,430.75
Total Income 27,275.79 31,292.16
Interest Income
Total interest income fell sharply by 16.00% year-on-year

to BDT 19,388.19 million in 2020 with stable business 2019 2020
volumes but falling rates. All the major businesses
segments such as Corporate Banking, Retail Banking, Net Interest Margin (NIM)
SME Banking, Cards Operation and Treasury faced the
impact of the falling interest rate. MBL managed its risk Net Interest Income (NIM) dropped by 46.51% to BDT
and return considering top down and bottom up line 2,655.97 million in 2020 with a stable 5.11% growth of loan
approach. volumes despite of having a lot of challenges for interest
on loan and advances throughout the year. Total interest
earnings assets increased by 3.77% year-on-year to BDT
302,164.54 million while net interest margin (net interest
income as percentage of average earnings assets)
decreased by 13.73% as of December 2020.

Directors’ Report
Earning Assets BDT in Million Balance Sheet Size BDT in Million
302,164.54
291,186.80
330,785.56
316,363.47
291,385.64
260,169.926
204,127.47
2016 2017 2018 2019 2020

2019 2020
Non-Interest Income BDT in Million

Loans & Advances
Other operating income (i.e. total income other than
interest income i.e. investment income, commission, 248,994.39
236,890.45
exchange and brokerage, other operating income) 224,230.61
decreased 3.93% and stood at BDT 7,887.87 million during 199,660.72
the year 2020. While Investment income grew by 8.10%
against the last year.
150,912.52
Non Interest Income BDT in Million
8,210.36
7,887.87 2016 2017 2018 2019 2020
Liabilities
Total liabilities increased by 4.48% year-on-year to BDT

308,683.78 million in 2020. Borrowing from other banks
financial institutions and agents balance increased by
84.61% to BDT 38,071.69 million and non-convertible
Subordinated bond decreased by 14.29% to BDT 3,600
million.
2019 2020
Financial Position Analysis Deposit
Asset Portfolio It is the quantum of deposits placed by customers in the

Bank through Current, Savings, SND, Scheme Deposits,
The Bank has a healthy Balance sheet size with BDT and Term Deposits i.e. FDR etc accounts. Total deposits
330,785.56 million assets base as on 31 December 2020. stood at BDT 245,265.71 million in 2020 from BDT
Loans and advances contribute major part i.e. 75.27% of 247,624.47 million of 2019.
total assets. Investments stand the second largest part
i.e. 14.80% of total assets. Deposits BDT in Million
The core earning assets of the Bank are Loans and

Advances and Investment. The credit portfolio of the 262,961.05
252,817.40
243,643.42
Bank experienced a constant growth of 5.11% in 2020
220,516.63
over 2019. Government investment consists of Treasury
bills & Bonds quantum of government securities holding
increased by 1.86% over 2019.
165,257.45
Funded Business of the Bank as on December 31,
2020 stood at BDT 248,994.39 million whereas non-
funded business stood at BDT 108,112.30 million for the 2016 2017 2018 2019 2020
same time period.

Capital Credit Rating
MBL is committed to maintain a strong capital base to Emerging Credit Rating Limited (ECRL) has reaffirmed
support business expansion, provide a cushion against the long term rating of MBL to ‘AA’ and short term rating
unforeseen risks, safeguard shareholder wealth and to ‘ST-2’ based on its financial up to December 31, 2019
foster investor confidence. The policy allows taking and other qualitative and quantitative information up to
advantage of emerging opportunities and invests further the date of rating. ECRL also placed the Bank with ‘Stable
in the core business to enhance shareholder returns. The Outlook’.
Bank’s capital management framework includes a capital
adequacy assessment process to ensure that it can In addition, Moody’s has assigned ‘B2’ rating to MBL.
mitigate current and future risks and achieve its strategic
Contribution to National Exchequer
objectives.
As a corporate entity, MBL pays tax and VAT on its own
Market Performance Analysis
income according to prevailing laws of the country.
Shareholder Equity By this way, the Bank has contributed extensively to the
government’s revenue. During the year 2020, The Bank
Total Shareholders’ Equity increased to BDT 22,101.78 contributed an amount of Tk. 4,693.04 million toward
million in 2020 from BDT 20,908.29 million in the previous national exchequer in the form of tax and VAT on its
year. earnings. Besides the Bank deducts tax, vat, excise duties
etc. from various payments and deposits the same to
Shareholders' Equity BDT in Million government exchequer.
22,101.78
20,908.29 Status of Asset Quality
The non-performing loan (NPL) ratio of the Bank

deceased to 4.72% as of 2020, a little bit improvement
from 4.86% at the end of 2019 and well below the
industry average. A comprehensive and prudent process
is adopted by the Bank from loan origination, approval
through disbursement up to timely recovery, which has
helped to maintain the NPL at below industry average.
Precise diversification of the portfolio and avoidance of
2019 2020 over- concentration on any one sector have also helped
maintain the quality of the loan portfolio. Provision has
Dividend
been charged against classified loans & advances to
The Board of Directors is continuously making efforts profit and loss account for BDT 345.93 million for 2020.
to uphold and protect the interests of all categories of
shareholders as well as to ensure stable growth of the NPL Ratio
bank. In order to maintain a satisfactory capital adequacy 4.86%
ratio of the bank, the Board has recommended a 15% 4.72%
(10% cash & 5% stock) dividend for the year ended 31
December 2020, subject to the approval at the 22nd
Annual General Meeting.
Dividend
22%
2020 2019
20%
16% Internal Control System
Internal control systems are designed, implemented and

15% 15%
maintained by the Mercantile Bank Limited (MBL) in order
to provide reasonable assurance to fulfill the objectives
that is, reliability of financial reporting, efficiency and
2016 2017 2018 2019 2020
effectiveness of operations, compliance with laws and

regulations and risk assessment of material misstatement.

Directors’ Report
The major components of MBL’s internal control include •• Disclosure on Executives (Top 5 salaried
control environment, Bank’s risk assessment process, employees of the company, other than the
information system (including the related business Directors, CEO, Company Secretary, CFO and
processes, control activities relevant to the audit, Head of Internal Audit). Shareholders holding
relevant to financial reporting, and communication) and ten percent (10%) or more voting interest in the
monitoring of controls. Further has been discussed in company (name wise details).
“Corporate Governance” segment of this Annual Report.
•• Shareholders holding ten percent (10%) or
Risk Management more voting interest in the company (name wise
details).
The Board Risk Management Committee (BRMC) reviews
and monitors the overall risk management system of •• Disclosure on the appointment/ re-appointment of
the Bank and updates the Board from time to time. directors the Bank:
In addition, it has been emphasized to follow DOS
• Brief resumes of the directors,
Circular No.04, ‘Risk Management Guidelines for Banks’
issued by Bangladesh Bank dated 8 October, 2018. • Nature of expertise in specific functional areas,
Risk management functions are subject to continuous
scrutiny of ICCD and supervision of RMD to ensure • Names of companies in which the person also
appropriateness and integrity of the risk management holds the directorship and the membership of
mechanism. The risk management system of MBL has committees of the board.
been described in “Risk Management Report” section of
ToR/Code of Conduct
this annual report. Also the major areas focused by BRMC
in 2020 have been presented in “Board Risk Management The Board of Directors of Mercantile Bank Limited
Committee (BRMC) Report” section of this annual report. has adopted all the policies, guidelines, circulars etc.
(issued from time to time by Bangladesh Bank) as its
Financial Reporting
Terms of Reference (ToR) and/or Code of Conduct and
Appropriate accounting policies have been consistently therefore separate documents like (i) Code of Conduct
applied in preparation of the financial statements and for Board Members, (ii) ToR for Audit Committee, (iii)
that the accounting estimates are based on reasonable ToR for Chairman and (iv) ToR for Managing Director &
and prudent judgment. International Accounting CEO have not been framed/laid down by the Board. The
Standards (IAS)/ Bangladesh Accounting Standards Directors have complied with such Code of Conduct/
(BAS)/ International Financial Reporting Standards ToR. A separate Report on ‘Corporate Governance’ has
(IFRS)/ Bangladesh Financial Reporting Standard (BFRS), also been furnished with this Annual Report.
as applicable in Bangladesh, have been followed in
preparation of the financial statements and any departure Going Concern Basis
there-from has been adequately disclosed.
Going concern is one of the fundamental assumptions in
Supportive Disclosure accounting on the basis of which financial statements are
prepared. Financial statements are prepared assuming
•• It is hereby confirmed that proper disclosures have
that a business entity will continue to operate in the
been made in Annual Report regarding:
foreseeable future without the need or intention on the part
•• Basis for related party transactions. of management to liquidate the entity or to significantly
curtail its operational activities. It is the responsibility of the
•• Remuneration to directors including independent
management of a bank to determine whether the going
directors.
concern assumption is appropriate in the preparation
•• The number of Board meetings held during the year of financial statements. The management of MBL has
and attendance by each director. calculated all the ratios related to the maintenance of
•• The pattern of shareholding by: regulatory capital & liquidity such as CRAR, LCR, NSFR,
Leverage ratio, CRR & SLR and assessed adequacy of bank’s
•• Parent/Subsidiary/ Associated Companies and liquidity as per structured liquidity profile, and has performed
other related parties (name wise details). stress testing to determine bank’s shock absorbent capacity
•• Directors, Chief Executive Officer, Company in different distress scenario. All the ratios and results thus
Secretary, and Chief Financial Officer, Head calculated reveal that MBL is running well above the level
of Internal Audit and their spouses and minor of different parameters set by the respective guidelines of
children (name wise details). Bangladesh Bank.

Branch Network rural areas has provided the lower income group an
access to the modern banking system and prompt
At the end of 2020, the number of branches of receipt of remittances. MBL has been providing its
the Bank reached to 150. The Bank has 185 ATMs ‘Islamic Banking Window’ services in 25 branches as
for facilitate cash withdrawal 24/7. The branches of December 2020. Besides, MBL has expanded its
are located at major trade centers as well as at the footprint with 101 agent banking outlets in different
rural areas of the country. Expansion of branches at locations throughout the country.
150
Branches
101
Agent
185
ATMS
Banking
Outlets
Correspondent Relationship
MBL has been maintaining widespread correspondent Wells Fargo Bank NA, Standard Chartered Bank, MUFG
banking relationship around the globe. As on December Bank, Mizuho Corporate Bank Ltd., HSBC, Mashreq Bank
31, 2020 MBL maintained Relationship Management Psc, Habib American Bank, Habib Bank AG Zurich, UBAF,
Application (RMA) with 624 top ranked and best rated Unicredito Italiano Spa, Swed Bank AB, Nordea Bank
banks in 61 (Sixty One) countries across the world. AB, Banca UBAE S.P.A., Bank Muscat, Emirates NBD and
Currently, we are enjoying Credit Limit of almost USD 950 United Bank Limited. Besides, we maintained 24 (twenty
million from various renowned banks across the world. four) Nostro Accounts in major currencies of the world as
Major foreign Correspondent Banks of MBL includes but on December 31, 2020.
not limited to Commerzbank AG, JP Morgan Chase Bank,
Correspondance Relationship with
61 Countries 624 Banks
Minority Interest
Minority shareholders have been protected from abusive actions by, or in the interest of, controlling shareholders
acting either directly or indirectly and have effective means of redress.

Directors’ Report
Review of Subsidiaries Performance
Mercantile Exchange House (UK) Limited of the country. At present, MYCash has more than 0.57
million customers and 25,000 agents where “Utility Bill
With permission from Bangladesh Bank and registration of Payment” and “Corporate Payment Collection” (B2B)
Financial Services Authority, UK, MBL stretched its business are the key transaction drivers. Besides providing basic
in UK through its fully owned subsidiary named ‘Mercantile mobile financial services, MYCash system is integrated
Exchange House (UK) Limited’ to facilitate fast and reliable with different service providers to make value added
medium to remit the hard- earned money of expatriates service available to their customers. Last year MYCash
to home. Mercantile Exchange House (UK) Ltd. has been was nominated as one of the most loved MFS brand of
carrying out remittance business since 2011 in UK. Besides, the country by Bangladesh Brand Forum through the
they are also engaged in promoting different products and research conducted by Nielsen Bangladesh.
services of Mercantile Bank Ltd. in UK market. Details have
been discussed in ‘Subsidiary Overview’ segment. Outlook 2021
Mercantile Bank Securities Limited After a pandemic like no other, and after incurring an
extraordinarily large loss of lives and livelihoods, the
Mercantile Bank Securities Limited is developed to provide world will strive to pick up the pieces and move on
higher, better and diversified services to a wide range of in 2021. Thanks to the tireless work of scientists and
customers. MBSL is offering high quality products and healthcare professionals, both treatments and cures will
services at a competitive rate. Mercantile Bank Securities characterize 2021.
Limited (MBSL) was formed on 27 June 2010, to deal with
stock dealing and broking. As a subsidiary it started its In Bangladesh, GDP growth was estimated to have reached
separate operation from 14 September, 2011. At present, 5.24% in 2020 despite the global effect of the COVID-19
pandemic according to Bangladesh Bureau of Statistics
MBSL has 7 branches. Mercantile Bank Securities Limited (BBS) data. It is forecasted to pick up to 6.8% in 2021. The
offers full-fledged international standard brokerage post-pandemic global economic recovery and the private
service with margin loan facility. Details have been consumption boosted by strong remittance flows from the
discussed in ‘Subsidiary Overview’ segment. Bangladeshi expatriates around the world are expected to
MBL Asset Management Limited be the key drivers of growth in 2021. The country’s most
immediate challenge is related to the economic, social and
MBL Asset Management Limited (MBL AML) has been public health impacts of the COVID-19 pandemic. We are
incorporated its operations since November 29, 2018 still expecting a pick-up in activity in 2021.
as a new subsidiary company of Mercantile Bank. The
company has licensed by Bangladesh Securities and Of course, that depends on the domestic economy
Exchange Commission (BSEC) in January 30, 2020. starting to recover. But there is so much uncertainty and
MBL AML is regulated under Bangladesh Securities and it is very difficult to ascertain with precision the recovery’s
Exchange Commission (Mutual Fund) Rules 2001. Details speed or extent. We still expect that the country would
have been discussed in ‘Subsidiary Overview’ segment. quickly come back to previous growth rates, if global
economic conditions are supportive.
Off-shore Banking
Acknowledgements
At present Mercantile Bank Limited is operating two
Off-shore Banking Units, as a separate business unit in My gratitude goes to the Government of the People’s
compliance with the Rules and Guidelines of Bangladesh Republic of Bangladesh, Officials of Bangladesh Bank,
Bank. The Bank commenced operation at these units officials of Bangladesh Securities and Exchange
through its Gulshan Branch, Dhaka and Chittagong EPZ Commission, Dhaka Stock Exchange, Chittagong Stock
Branch, Chittagong on July 04, 2010. As on December Exchange and National Board of Revenue. Specially,
31, 2020 total exposure of OBUs increased to USD 149.86 we owe a great debt to the officials of the Central Bank
million from USD 141.68 million on December 31, 2019. for their advice and guidance throughout the year and
However, net profit of OBU slightly decreased to USD to our external auditors for their valuable feedback. I
4.24 million equivalent BDT 376.93 million during the year also express my sincere gratitude to my colleagues for
2020 as compared to that of USD 4.44 million equivalent their commitment and dedication towards achieving a
BDT 376.93 million in 2019. common goal. Last but not the least, my whole-hearted
appreciation goes to our shareholders and customers for
Mobile Banking their continued support and for believing in us.
Mercantile Bank Limited has started its Mobile Banking On behalf of the Board of Directors,
operation in 2012 with the vision to be one of the leading
Service Providers of the country. Later on, the Bank has
re-branded its Mobile financial Service as ‘MYCash’.
Being one of the Pioneers in the industry, MYCash has Morshed Alam, MP
transaction connectivity with every telecom operator Chairman

Divisional Overview
CORPORATE BANKING
DIVISION
The Corporate Banking Division acts as ‘Gateway’ for the Corporate business
KEY INFORMATION
proposals. Branches send their corporate business proposals to CBD. After
2020
analyzing a proposal (CBD) prepares a summary of the merit/feasibility of the
proposal and places it to the Credit Risk Management (CRM). CBD designs
its credit portfolio matching with the risk appetite statement of the bank and Corporate deals with
prominent groups
formulate strategic plans for business growth. It is pertinent to note that though
Branches are working as the business collecting agent CBD also deploy its
efforts to collect corporate business centrally.
32
Total Portfolio
Products & Services
•• Project Finance in the form of BDT 203,630.87 million
Term Loan
Hire Purchase
Lease Finance
Sanctioned to corporate entities for long term infrastructure & industrial

projects as well as BMRE of an existing Project.
•• Working Capital Finance in the form of
Demand Loan
Continuous Loan
Short Term Loan
To corporate entities engaged in manufacturing, service and trading for

domestic consumption and/or export business.
Corporate Loan (BDT in Million)
203,630.87
182,848.92 191,715.34
168,428.21
111,766.19
2016 2017 2018 2019 2020

Major Activities in 2020
To support the economy and to offset the economic for different sectors & beneficiaries declared by the
losses caused by COVID-19 pandemic CBD played a Government.
significant role for distributing financial stimulus package
Processed 83 nos proposals Processed 220 nos proposal Took Major role for processing CBD also played vital role
amounting Tk. 4,574.10 of Tk. 9,305.90 million to interest subsidy for 2 months for the process of allocating
million for disbursement to Industrial & Service sector (April & May, 2020) interest total interest amount in
facilitate wages & salaries of under financial stimulus amount for the loans and income account and/
workers of export oriented package at subsidize interest advances as on 31.03.2020 suspense account for the
industries for months April, rate of 4.5% as declared by of all customers declared accounts availed extension/
May, Jun, July-2020. Government of Bangladesh. by Govt. considering deferral facility against
the COVID-19 induced their loans and advances
inconvenience. Also, played a observing BRPD’s related
vital role for providing deferral circulars.
facility to customers as per
BRPD circulars.
Outlook 2021
In the Year 2020 due to Covid-19 pandemic coupled of existing credit limits of good corporate customers
with reduction of interest rate on funded facilities @ and emphasize on IT based/E-Commerce business as
9.00%p.a. as per govt. directives, fee based and interest this sector has been growing faster due to COVID-19
income of the bank has been affected severely. pandemic situation. CBD will concentrate on hunting
of prospective corporate customers of various sectors
Taking in view the present economic situation, in the to ensure diversified credit portfolio and to reduce
year 2021 CBD will focus on fee based income and credit concentration.
find out maximum Avenue of non-funded business to
increase fee based income. CBD is committed to ensure quality asset portfolio
matching with risk appetite and thus sustainable
CBD will take initiative to ensure maximum utilization growth in quality income of the Bank.

Divisional Overview
CONSUMER & RETAIL BANKING

DIVISION
Credit Risk Management team mainly analyzes the proposals received from all
branches across the country and places those enumerating applicants’ 5Cs KEY INFORMATION
along with SWOT analysis before the Senior Management to seek approvals. 2020
Liability Sales Wing consists of total 150 trained members, who are attached
with different branches across the country; hunt Current Account & Savings
Account (CASA) from individual customers. Besides this team also cross sells Total Portfolio
asset products like Car Loan, Home Loan, Personal Loan and House Furnishing
Loan to salaried and business persons. Recovery Team takes care of the
special assets under the division. Team members monitor repayment of the BDT 7,178.02 million
customers and communicate with branches and respective customers for
recovery and regularization of non-performing loans.
% of CL in the Portfolio
The organogram of the division consists of three wings- 1.98%

Credit Risk No. of Files Approved In 2020
Management Wing Sales Wing Recovery Wing
11,767
Products
Amount Approved In 2020
Asset Products Liability Products

BDT 5,475.50 million
Home Loan Savings Account

Cottage Loan Current Account Nos. of CASA Opened in 2020
Car Loan SND Account
Personal Loan Fixed Deposit Account 22,571
Secured Overdraft (SOD) Digun Briddhi Amanat Prokolpo (DBAP)
Education Loan Masik Munafa Amanat Prokolpo (MMAP) Nos. of Debit card sold by Sales
Doctor’s Loan Masik Sanchaya Prokolpo (MSP) Team in 2020
House Furnishing Loan MBL Bonus Sanchay Hishab
8,119
Key Activities Performed in 2020
Developed an own Access Database Management System.
Total nos. of 16,174 scheme & FDR accounts opened by the Sales Team.
Outlook 2021
• Arranging a CASA campaign with a target of one lac accounts for the year 2021
• Commencement of Sales through Agent Banking
• Processing of Islami Banking Products
• Execution of MoU with different corporate bodies to offer Retail Products of MBL.

CARD
DIVISION
MBL started card operation in 2002 and ATM operation in 2004 by

participating in a Local Network Q-Cash consortium aiming to extend KEY INFORMATION
modern banking facilities to its customers. In 2006 MBL became the principal 2020
member of Visa International and started issuing Visa cards. MBL has been
operating 185 ATMs attached with Branches and different important locations
Numbers of Card holders
all over the country along with 20 CDMs (Cash Deposit Machine).
281,969
Core Competencies of Card Division
Total Outstanding
SimplepPay Facility
Large ATM network BDT 465.48 million
24/7 contact center
Strong Branch Network Operating Profit
Large Partnership with 1,400 outlets for Home appliances
Discount facility at 850 outlets BDT 85.94 million
Numbers of Transaction
New Products / Key Activities in 2020
Fund transfer facilities from card to digital payment wallet :

1.76 million
MBL Rainbow, My Cash, bKash, Nagad etc.

Partnering with retail chains- Agora, Shwapno, Meena & Prince Bazar.
Dual Interface ( EVM chip with NFC) contact less card will be
introduced soon
Products of Card Division
Local, International and Dual Credit Cards

Local, International & Dual currency Prepaid Cards
MBL Visa Medical Card
MBL Visa International Student card
MBL Visa Virtual card
Outlook 2021
• Introduction of cash less transaction gateway

• Batter customer facility with alternative payment medium.
• MBL has targeted to increase the Debit/Credit/Prepaid Cards to 0.325 million
• To issue credit cards with special facilities for corporate people under
specific terms and conditions
• MBL is going to introduce Int’l Debit Cards whereas cardholders will enjoy
drawing facilities from current/savings accounts for cash, purchase &
E-Commerce

Divisional Overview
SME FINANCING
DIVISION
MBL SME Finance Division has started its operation from 3rd September, 2006
with a view to providing financing solutions for the SME customers across the KEY INFORMATION
country with the purview of prudential guidelines of Bangladesh Bank for SME 2020
Financing. MBL has undertaken extensive program to increase credit exposure
in the SME sector. A dedicated team is working at Head Office to process all
activities to help branches related to file preparation, document collation, site Number of Clients
visit, verification, credit approval, credit monitoring and recovery and credit
administration. Consequently, the SME portfolio of the bank has increased
notably over the last five years. As such, SME Financing Division is contributing
7,042
in the sustainable growth of the bank.
Total Portfolio
Core Competencies of SME Finance
Women Entrepreneurs Loan

Easy Loan Lower Approval Strong Branch Strong Credit Disbursement
Processing Authority Network Team
5.79%
in SME Portfolio
Key Activities in 2020 SME Loan outstanding
30,249.20 32,207.30 32,330.60

28,663.40
Lunching of “FACTORING OF RECEIVABLES” product.
In 2020, BDT 920 million refinance Facility received from Bangladesh Bank 14,540.00
Participating in ADB Fund, JICA Fund, EGBMP

Disbursement in stimulus fund Taka 2,016 million.
Participating Banker –SME Women Entrepreneurs Conference 2016 2017 2018 2019 2020
Products & Services of SME Finance
CHAKA ÒPvKvÓ (Term Loan)

ANANNYA ÒAbb¨vÓ (Women Entrepreneur’s Loan)
SAMRIDDHI Òmg„w×Ó (Continuous Loan)
MOUSUMI Ò†gŠmygxÓ (Short Term Single Payment Seasonal Loan)
SANCHALAK ÒmÂvjKÓ (A mix of term, time & continuous credit)
UNMESH ÒD‡b¥lÓ (Trade Finance)
UDAYAN ÒD`qbÓ (Start-up Financing for the young entrepreneurs)
FACTORING OF RECEIVABLES
Outlook 2021
• The Management of the Bank has prioritized more to expand the portfolio
in the SME segment.
• BDT 37,000 Million disbursement target.

AGRICULTURE CREDIT
DIVISION
The growth of agriculture and the welfare of farmers have been given high
priority nationally in order to create a Bangladesh free of hunger and poverty. KEY INFORMATION
In this light of vision MBL has initiated Agriculture Credit Department in 2010; 2020
then named as Agriculture Credit Division in 2016.
Number of Clients
Core Competencies of Agriculture Credit Division
Efficient Loan Evaluation

1,348
Well-built Branch Support
Experienced Credit Team Total Portfolio
Taka 4,772.50 million
Ways to Reach Clients

Loan Disbursement
Directly to farmers (Individual/Group-wise)/Concerns
To farmers through partnership with MFIs/NGOs (MRA Certified only)
To farmers through Contract Farming with reputed Companies
2,956.66
in FY 2020-2021
(Upto 31.12.2020)
Stimulus Package for COVID-19
Disbursement under stimulus package BDT 486.50 Millions.
Products & Services of Agriculture Credit Division
Short Term Loan [Agri]: For finance directly to farmers.

SOD (Gen) [Agri]: For meeting up working capital requirement.
CC (Hypo) [Agri]: For meeting up working capital requirement.
Term Loan [Agri]: For fixed assets development of the agricultural
farm as well as to finance in NGO/MFIs.
Fiscal Year Wise Achievement

[Fig. BDT in Million]
Fiscal Year Target fixed by BB Disbursed Amount Achievement
2014-2015 1,900.00 1,900.68 100.36%
2015-2016 2,050.00 2,260.84 110.65%
2016-2017 2,200.00 3,350.38 152.45%
2017-2018 2,830.00 3,010.68 106.60%
2018-2019 3,540.00 3,790.07 107.06%
2019-2020 4,010.00 2,670.96 66.82%
2020-2021**
4,230.00 2,950.66 69.90%
(Up to Dec’20)
Note: *Due to outbreak of Novel Corona Virus (COVID- 19) pandemic, we have achieved 66.82% of
ascertained target.
**69.90% of target has already achieved in first six (06) months of 2020-2021 fiscal year.

Divisional Overview
Sector –wise Loan Portfolio as on 31.12.2021

BDT in Million
Particulars Amount
Crop 2,431.60
Livestock 767.10
Fishery 920.70
Horticulture 6.00
Agriculture & Irrigation Equipment 88.00
Poverty Alleviation 58.90
Others 500.20
Total 4,772.5
Outlook 2021
• To be a proud partner of ensuring food and nutrition security of Bangladesh.

• Tk. 4,230.00 Million disbursement target.

FINANCIAL INCLUSION
DEPARTMENT
At the aim to uphold the living standard of marginal people and also to KEY INFORMATION
bring them under formal financial services, a department namely `Financial
2020
Inclusion Department’ under Agriculture Credit Division, Head Office was
formed in the year 2016. As per Bangladesh Bank’s directives MBL is extending
credit facilities to 10 Taka account holders under financial inclusion scheme Number of Clients
of Bangladesh Bank.
92
Core Competencies of Agriculture Credit Division
Total Portfolio
Proper monitoring
Periodical visit BDT 39.30 million
Justified evaluation
Disbursement in 2020
Ways to Reach Clients BDT 32.92 million

Year wise
Directly to farmers Disbursement
To farmers through partnership with MFIs/NGOs
Fig. Taka in Million
32.92
Stimulus Package for COVID-19
BDT 260.60 millions Disbursed under stimulus package

23.82
21.55
19.93
Products & Services
Time Loan [FIS]

5.01
Term Loan [FIS] 2.21
Year-wise Achievement BDT in Million

2015 2016 2017 2018 2019 2020
Fiscal Year BDT in Million Disbursed Amount Achievement
2015 2.00 2.21 110.50%
2016 5.00 5.01 100.20% CL
2017 18.00 19.93 110.72%
2018
2019
20.00
21.50
21.55
23.82
107.75%
110.81%
0.07%
2020 31.50 32.92 104.52%
Outlook 2021
• Extend the target amount under Financial Inclusion Scheme during the
year.
• Maximum utilization of disbursement amount to the clients.

Divisional Overview
TREASURY
DIVISION
Mercantile Bank Limited has an integrated and well staffed Treasury Division,
which is capable of providing all sorts of Treasury solutions through wide KEY INFORMATION
range of Treasury products available in the market. Maintaining regulatory 2020
requirements and managing bank’s funds, day-to-day liquidity, interest rate
risk, exchange rate risk, investment portfolio etc are the daily treasury activities.
Operating Profit
Core Competencies of Treasury Division BDT 2,173.60 million
One of the primary dealers Banks among the PCBs

Contribution of Treasury
Competent and Separate Treasury Front, Back and Mid Office. in Bank’s Aggregate Profit
Active ALM Desk within Treasury Front Office
55.96%
52.79%
39.35%
Oparating Context in 2020
37.92%
34.55%
The bank rate has been reduced from 5% to 4%.
The REPO rates & reverse REPO rates has been reduced to 4.75% &
4.00% from 6.00% & 4.75% respectively.
2016 2017 2018 2019 2020
The CRR requirement for the conventional banks has also been reset
to 4.00% from 5.50%.
The ALM desk has arranged 14 ALCO meetings.
The investment committee has arranged 04 nos. of meeting.
Services of Treasury Division
Active participation and revenue generation in

Money Market
Fixed Income & Capital Market Securities and
Foreign Exchange Market
The ALM Desk provides balance sheet strategy, economic & market
outlook and ensures maximum profitability within optimum level of risk.
Outlook 2021
• Enhanced & Active bonding of Business & ALM

• Liquidity in local currency & foreign exchange market will be persisting as
like 2020.
• To control the inflation will be a challenging issue for the policy makers.
• After pandemic situation, business may have positive impact on the
earnings of the financial sector

INTERNATIONAL
DIVISION (ID)
Being a third generation private commercial bank, Mercantile Bank Limited
(MBL) has surpassed many first generation and second generation private
KEY INFORMATION
commercial banks in terms of foreign trade transactions. Market share of 2020
around 4% of country’s total foreign trade transactions bears the testimony of
its strong position in foreign trade. Over the years International Division of the
Market Share of Country’s
Bank has established sturdy correspondent banking network with top-ranked
Total Foreign Trade Business
and best-rated foreign banks across the globe, arranged sufficient amount
of credit line (both funded and non funded) to meet the LC advising, adding
confirmation and bill discounting need of our customers. 4%
Total LC Opened
Operational landscape of International Division

36,511
FI and Compliance
Return submission to Bangladesh Bank Foreign LC to Local LC
Refinance scheme of Bangladesh Bank

EDF
49:51
Cash Incentive Total Import

Green Transformation Fund (GTF)
Long Term Finance Facility etc.
BDT 172,774 million
Vessel Tracking Service Total Export
Factoring Services
Arranging Credit Report
BDT 135,413 million
Total Remittance
BDT 32,713 million

2,341
2,307
New Affiliations: Joins Factor

2,175
CHAIN INTERNATIONAL (FCI).

2,037
1,922
1,887
1780
Foreign Correspondence with

1,629
1,597
624 banks
1440
61 Countries
950
USD Million
440
448
386
Credit Line
380
320
Nostro Accounts
2016 2017
Import
2018
Export
2019
Remittance
2020
24
in 7 countries
Fig: MBL’s International Business volume Trend in Million USD.

Divisional Overview
OFF-SHORE BANKING
DIVISION (OBD)
Mercantile Bank Limited commenced the operations of Off-shore Banking business
on July 04, 2010 in compliance with the Rules and Guidelines of Bangladesh Bank KEY INFORMATION
under their permission through opening Gulshan and Chittagong EPZ Off-shore 2020
Banking Units (OBU). These two units have been continuing their business under
supervision of Head office, Offshore Banking Division. Though OBUs are located in
Gulshan Branch and CEPZ Branch, they have been operating as separate unit from Total exposure
the inception maintaining their own accounts relating to Off-shore Banking business.
At present Off-shore Banking Units of Mercantile Bank has been renamed and
relocated following Bangladesh Bank’s instruction:
USD 149.86 million
(Equivalent to
•• Offshore Banking Division, Head Office
••
••
Principal Off-shore Banking Unit, Head Office
Agrabad Off-shore Banking Unit
BDT 12,707.86 million)
OBU Profit Million USD OBU Exposure Million USD

Net Profit
181.4
144.91 149.86
4.24
5.14
4.44 141.68
4.24 109.17
3.47 USD million
2.68
41.05 (Equivalent to
0.851 13.82
359.62
1.97
BDT million)
2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020
Centralized Trade Processing Center (CTPC) Total Branches under CTPC

Centralized Trade Processing Center (CTPC) started its operation under
International Division on June 02, 2016 with a view to facilitating trade
finance business need of customers of Non AD branches.
28
CTPC handled total 1,448 number of Import LC amounting BDT 11,595.70
million as compared to 1,641 number of import LC amounting BDT 6,985.50 Operations
million in the year 2019.
SWIFT Operation 1,448

Import LC
MBL appointed ‘Nelito System Limited’ as SWIFT Service Bureau to avail SWIFT
related all services in the year 2019. (Value
SWIFT Service Up gradation in 2020

•• SWIFT Alliance Access to version 7.4.54 from 7.3.5
BDT 11,595.70 Million)
•• SWIFT gpi
In 2021, the bank will make some technological changes so that the bank can
comply with the SWIFT CSP (Customer Securities Program).
Outlook 2021
During the first Five Months of FY2020-21 total Import in Bangladesh experienced
negative growth of 8.81% and Export of Bangladesh Economy registered very
insignificant growth of only 0.93%. This dismal performance of International Trade
was mostly caused by worldwide lockdown due to Covid-19 pandemic. However,
invention of vaccination and mass use of that gives us hope of light at the end of
dark tunnel. If the 2nd wave of Covid-19 do not penetrate to that level and vaccination
becomes effective foreign trade transaction of the economy will be vibrant again.
Keeping this at mind, we are upbeat to overcome the downturn in foreign trade
in the year 2021 by dint of our strong foreign trade customer base, efficient and
effective customer services and strong correspondent banking network.

NON-RESIDENT BUSINESS (NRB)
DIVISION
NRB Division of the Bank was formed in 2009 aiming to focus on serving
the emerging needs of the Non Resident Bangladeshi expatriates KEY INFORMATION
living and residing abroad to ensure quality remittance service to the 2020
beneficiaries in Bangladesh.
Exchange House Arrangment

Core Competencies of NRB Division
A dedicated experienced team.

32
Drawing arrangement with 32 world reputed exchange houses.
Volume of Remittances
Opportunity to route remittances from approximately more than 200
countries of the world
Depute MBL officials at the counter of exchange houses in
BDT 308,930 million
different countries
Key Activities in 2020

USD 3,640 million
Countrywise Remittance 2020 Contribution to National

0% Remittance Growth
17%
14%
1.67%
3%
4%
9% 48%
3% 2%
Qatar Italy UK UAE USA Oman Bahrain Global Others
Services of NRB Division
Account Transfer
Cash Over the Counter
Account Opening for the NRBs
Savings Account
MSS (Monthly Savings Scheme)Account
Fixed Deposit Account
Foreign Currency Account etc.
Purchasing of Bond
Wage Earners’ Development Bond
US Dollar Premium/Investment Bond etc.
Outlook 2021
• API operation for real time remittance services

• Superior customer service
• Ensuring due diligence and zero tolerance on AML issues
• Introducing remittance services in the agent locations of the Bank.

Divisional Overview
CREDIT RISK MANAGEMENT

DIVISION
MBL has a diversified credit portfolio with investment in various economic

sectors. To manage this credit portfolio MBL has an efficient Credit Risk KEY INFORMATION
Management Process and a dedicated division named Credit Risk Management 2020
Division (CRMD). Responsibilities of CRMD are structured such that decisions
are taken close to ground realities, while enforcing robust reviews and
challenge of regulations, performance, risk framework and strategic plans. The No of Credit Proposals
Sanctioned
Head of CRM under the supervision of the Chief Risk Officer (CRO) manages
the bank’s entire corporate credit portfolio.
A team of well-experienced bankers led by the Managing Director & CEO

1,027
(Funded & Non-funded)
of Mercantile Bank Limited is engaged in monitoring the credit risk and
adherence to agreed controls. Mercantile Bank Limited manages credit
risk in line with norms set by the Central Bank and through bank’s adapted Amount of Sanctioned
processes & policies relating to the pre-sanction and post-sanction stages
of credit approval.
BDT 206,371.40
million
Policy, Procedures & Guidelines
(Funded & Non-funded)
CRM Division is engaged in periodic revision and continual standardization of
the Credit Policy of the Bank in commensurate with the “Guidelines on Credit
Risk Management (CRM) for Banks”, “Guidelines on Environment and Social Syndication Finance
Risk Management (ESRM) for Banks and Financial Institutions in Bangladesh”
& “Internal Credit Risk Rating System” of Bangladesh Bank and circulars of
Bangladesh Bank. For obtaining comprehensive and reliable survey report on
02
Projects
the collateral securities, CRM Division prepared Policy for Valuation of Security.
CRM Division is continually engaged in augmenting the overall Asset quality
and contributing to the growth and success of the bank. Credit Policy Revised &
Updated
Directional guidelines that

Strategic Focus will improve the risk
management culture
Maintain a diversified portfolio as per regulatory guidelines by
Divisional segregation of
prudentially managing the risk of the asset portfolio in terms
duties and responsibilities
of concentration to any industry, sector or individual customer.
Specified the lending
Maximize bank’s risk-adjusted rate of return by maintaining credit risk target market
exposure within acceptable parameters
Specified the
Maintain the quality of the credit portfolio by minimizing the non- prohibited lending
performing loans
Set policy for Single
Ensure that business profiles and plans are consistent with risk Borrower Exposure
appetite.
Set policy for
Ensure that exposures to any customer/group are within the Large Loans
regulatory guidelines and bank’s adapted credit policy.
Mitigate the identified risks with appropriate measures/ initiatives,

proper disclosures and collection of relevant applicable supporting
documents.
Ensure compliance of all regulatory norms/guidelines.

Products and services
Funded Credit Facility
• CC (Hypo) • LTR (Loan against Trust • Lease Finance (LF)

Receipt)
• SOD (G) or OD (G) • Hire Purchase (HP)
• PC (Packing Credit.)
• SOD(WO) • Term Loan
• ECC (Export Cash Credit)
• SOD- Earnest Money • House Building Loan
Financing Scheme (EMFS)
• IDBP (Inland Documentary Bill (Commercial)
Purchase)
under e- tendering • Loan(General) or Loan (G)
• FDBP(F) (Foreign
• SOD(FO) Documentary Bills Purchase)
• Syndication Loan &
Structured Finance
• Loan(FO) • FBP (Foreign Bills Purchase)
• Employee’s House Building
• Time Loan • IBP (Inland Bills Purchase) Loan
• Short Term Loan • Loan Against EDF • Car Loan for the Executives
Non Funded Credit
•• Letter of Credit (L/C)

•• ABP (Accepted Bills for Payment)
•• Bank Guarantee (BG)
Meeting COVID-19 Pandemic
•• CRMD sanctioned BDT 457.40 crore to the 83 numbers •• CRMD also sanctioned BDT 473.19 crore to 122
of export oriented customers under ‘financial stimulus numbers of industrial and service sector organizations
package’ declared by the government to mitigate as Working Capital finance to mitigate probable
probable adverse economic impact due to breakout economic impact due to breakout of Novel Corona
of Novel Corona Virus (COVID-19). Virus (COVID-19) under Stimulus Package of
Bangladesh Bank named “Working Capital under
Stimulus Package”.
Outlook 2021
In the eve of the overall turmoil in the financial sector, driven by sluggish credit growth across the world due to breakout
of Novel Corona Virus (COVID-19), we expect the year 2021 to continue to be a very challenging one too from a CRM
perspective. CRM Division intends to implement robust processes to mitigate all the risk measures instructed by the
Central Bank and internally designed by the Bank for lowering the percentage of NPL as well as to maintain a better
quality Asset Portfolio that will ultimately yield to maximize profit for the bank. Moreover, in 2021, CRMD will continue to
weather the challenge to maximize bank’s interest income in a low interest rate environment.

Divisional Overview
SPECIAL ASSET MANAGEMENT

DIVISION
Special Asset Management Division (SAMD) has been working for monitoring,
recovery and regularization of the loans which became irregular and non- KEY INFORMATION
performing. Objective of the Division is to keep the irregular and non- 2020
performing loan assets regular by close monitoring, recovery and rescheduling
thus makes considerable contribution in the profit and growth of the bank.
NPL Reduction
Activities of the Division are being supervised by the Additional Managing
Director & CRO of the bank.
to 4.72%
from 4.86%
Core Competencies
Recovery/Regularization
Continuous Monitoring (onsite/offsite)
(partially and fully)
Strategy formulation of Loan Accounts
Third party Debt collection agent
Strong negotiation skill 12,765
BDT 28,902 million
Key Activities in 2020 Recovery by Debt

collection agents
All out efforts given for Recovery
Rigorous monitoring BDT 3 million
Meeting with Senior Management, Cluster Heads, Divisional Heads
and Branch Heads. Loan Rescheduling Accounts
39
Units of Special Assets Management BDT 1714 million
Monitoring and Early Alert Department

Recovery Department
Central Collection Department
Outlook 2021
• We will enable the business process and structure to facilitate the NPL
Management.
• SAMD will extend all-out effort for recovery / regularization of Non
Performing Loans for 2021.

MOBILE BANKING
DIVISION
Mercantile Bank has started it’s Mobile Banking operation since 2012. The Bank
has branded its Mobile Banking Service as ‘MYCash’. MYCash is a fast, secure KEY INFORMATION
and affordable way to send and receive money. In addition to ‘send and receive 2020
money’ it provides a total eco-system where people can utilize the best use of
money. It is providing financial inclusion to many Bangladeshis who don’t have
Total Customers
access to traditional banking services.
over 57 million
Core Competencies of Mobile Banking Division
Agent outlets
Post Pandemic most demandable fin-tech
Fin-tech knowledge
One of the most Loved Brand over 25,000
24/7 contact center 16225
Rapid Turnaround time
Transaction Amount (in BDT)
10,418,335,734

7,351,051,136
6,605,135,969
5,057,362,518
4,175,885,956
Salary disbursement servicess various types of Export oriented organizations.

Credit Card holders of Mercantile Bank Limited can pay their monthly
bill through MYCash during pandemic period 2016 2017 2018 2019 2020
Utility bill collection from 11 more Palli Bidyut Samity

Started Fund transfer from American Express Card to MYCash
Utility Bill payment collection from the countrywide BTS Towers of
Banglalink Digital Communications Limited
Product & Services of MYCASH
Cash-in/Cash out
P2P
Fund Transfer
Airtime Top-up
Utility Bill Payment
Merchant Payment
Online/E-commerce Payment
Salary Disbursement
Business to Business payment
Outlook 2021
• MyCash has planned to acquire new active customer base through

different marketing initiatives.
• We will be concentrating on payment collection which includes Business
to Business, Utility Bill payment collection and Merchant payment
collection.
• In order to achieve sustainable business growth new innovative product
feature will be added for maintaining customer confidence and reliability.

Divisional Overview
MBL AGENT
BANKING
Overview
Agent Banking provides secured financial services at the doorstep of the unbanked people of Bangladesh as a part of financial
inclusion for empowerment. MBL has been working to reach every corner of the country through strong Agent Banking
network. To bring unbanked people under the umbrella of financial inclusion of Bangladesh, it is a great solution.
Core Competencies of MBL Agent Banking
Enthusiastic workforce
Experienced marketing team
Major Activities in 2020
Coverage 8 divisions & 36 districts.

100 new agent outlets opened in 2020 COVID-19 pandemic
Total number of accounts: 4,528
Total amount of deposits: BDT 73.44 million
Products & Services of MBL Agent Banking
Account Opening Cash Deposit & Withdrawal Savings & Current Account Fund Transfer
Opening (AB to AB)
DPS FDR Bill Payment Remittance
Stipend Account MYCash Services
Outlook 2021
• Total Outlet Target: 300 by the end of 2021 • Total Remittance Target: Tk.300.00 millions
• Total Account No. Target: 50,000 • Total 30 corporate salary disbursement
• Total Deposit Target: Tk.600.00 millions • Total 20 company bill payment by Agent Banking Division

ISLAMIC BANKING
DIVISION
Overview
Alhamdulillah, Mercantile Bank has started its 'Islamic Banking Operations’ ‘Taqwa’ since 29 June, 2020 with the aim
to serve the customers who prefer Islami Shariah Based Banking and committed to Islamic lifestyles. Keeping the ever
increasing interest of the largest community in mind, the Board of Directors of MBL has decided to go for Islamic Banking
operations and has taken formal permission from Bangladesh Bank for Islamic banking window operations.
Core Competencies
Dedicated & skilled personnel

Well trained in Islamic Banking
Key Information in 2020
Total number of accounts: 1,363

Total amount of Deposit: Tk.631.00 million
Deposit Products and Schemes
Al-Wadiah Current Account

Mudaraba Savings Account
Mudaraba Special Notice Deposit Account
Mudaraba Term Deposit Account
Mudaraba Masik Sanchaya Prokolpo
Mudaraba Masik Munafa Amanat Prokolpo
Mudaraba Digun Briddhi Amanat Prokolpo
Investment Products
Short Term Finance

Bai-Murabaha
Bai-Muajjal
Bai-Salam
Musharaka
Quard
Long Term Finance
Hire-Purchase under Shirkatul Melk (HPSM)
Outlook 2021
• Real Time online banking between Islamic Banking Window & Conventional branches
• Total Deposit Target: Tk.3,000.00 million
• Total Investment Target: Tk.2,700.00 million

Divisional Overview
INTERNAL CONTROL
AND COMPLIANCE DIVISION
Mercantile Bank Ltd. has established adequate internal control systems based
on a robust framework of policies, processes and risk management practices. KEY INFORMATION
These controls identify and mitigate various risks by ensuring effectiveness and 2020
efficiency of operations, adequacy and reliability of financial controls, compliance
with applicable laws and regulations.
Bank has Board approved
ICC Guidelines in
accordance with the latest
Bangladesh Bank ICC
Key Activities in 2020 Guidelines-2016.
Audit Unit Conducted- ICC Division comprises

Risk Based Audit (RBA) on 86 Branches where planned was 90 of three units as per ICC
Branches. Guidelines of Bangladesh
Bank such as – a) Audit
Risk Based Audit (RBA) on 14 Divisions where planned was 08 Unit, b) Compliance Unit
Divisions. and c) Monitoring Unit.
Other Inspection/Investigation on 63 different issues.
Monitoring Unit Reviewed- A Deputy Managing
Director is the Head of ICC
Balancing of 326 different Head of Accounts. Division.
1133 Employee Salary Accounts.
501 Loan Documentation Check lists. Bank’s ICC Division
comprises of 27 officials
294 Quarterly Operation Reports.
including expert in
149 Half Yearly Self-Assessment Report of Branches on AML & business and technology.
CFT activities.
Compliance Unit: ICC Division prepares Half
Yearly Self-Assessment
Reviewed 422 Risk Based Audit (RBA) Reports of Branches and
of Anti Fraud Internal
Divisions.
Controls Report & Annual
Forwarded 101 compliance reports to Bangladesh Bank against Integrated Health Report
Comprehensive, FEX Comprehensive Reports, Surprise and accordingly submits
Inspection Reports, Head Office Inspection Report and Core to Bangladesh Bank.
Risk Inspection Reports
Outlook 2021
More emphasis will be given on different compliance issues both internal and
external. As part of this-
• Audit Plan of the Bank for the year 2021 has been prepared for:
Risk Based Audit (RBA) on 100 Branches and 15 Divisions of Head office.
The Branches will be audited before or after transferring the Head of Branches.
Other Inspection/Investigation will be conducted as on when required.
• Required number of review will be conducted by Monitoring Unit on different issues.
• Required number of follow-up reports or compliance report will be issued favoring

Branches or Divisions of the Head Office or Bangladesh Bank.

ANTI MONEY LAUNDERING
AND COMBATING FINANCING OF TERRORISM
Mercantile Bank Limited (MBL) pays special attention on Anti Money Laundering
and Combating Financing of Terrorism. AML & CFT Division of MBL conducts KEY INFORMATION
its Anti Money Laundering and anti terrorism financing activities on the basis of 2020
Money Laundering Prevention Act- 2012 (Amended in 2015) and Anti Terrorism
Act (ATA) – 2009 (Amended in 2012 & 2013), guidelines, circulars issued by
Number of STR in 2020
Bangladesh Financial Intelligence Unit (BFIU) in order to achieve the national goal
of zero tolerance against money laundering and terrorist financing.
98
Compliance Structure Number of CTR in 2020
Central Compliance Committee (CCC);

Chief Anti Money Laundering Compliance Officer (CAMLCO);
374,444
AML & CFT Division;
Number of Employees
Branch Compliance Committee (BCC); Trained in 2020
Branch Anti Money Laundering Compliance Officer (BAMLCO);
960
Major Activities Developed
‘GUIDELINES FOR
Comply with Bangladesh Bank inspection on AML & CFT; PREVENTION OF TRADE
Follow-up branches’ activities on AML & CFT for 100% adherence of BASED MONEY LAUNDERING’
compliance;
Create awareness and trained-up branch officials of the Bank for
AML & CFT compliance;
Issue necessary instructions/ guidance regarding AML / CFT for branches;
Communicate with regulatory bodies for any compliance issues of
the Bank;
Create awareness for mass people we upload leaflets containing
different AML & CFT related issues in our website
Outlook 2021
• To implement e-KYC in the Bank;

• To arrange AML/CFT summit for all Head of Branches and Head of
Divisions;
• To review and update the Customer Acceptance Policy;
• To ensure proper compliance with all the instructions of the regulatory
bodies;
• To provide training to officers who have not yet received training on AML
& CFT or who received the training in two years ago;
• Upgradation of the rating of the Bank by BFIU based on anti- money
laundering and counter terrorism financing activities;
• As part of monitoring AML/CFT activities of branches AML & CFT division has
set target for conducting AML system check of 60(sixty) branches this year.

Divisional Overview
GENERAL SERVICES
DIVISION
General Services Division (GSD) is a very vital functional division of the

Bank. All officials are working tirelessly to achieve institutional goal through KEY INFORMATION
infrastructure development of the Bank and providing all sorts of logistic 2020
supports and services to Branches, Different divisions/Units of head office,
Sub-Branches (Uposhakha), ATM Booths (onsite/offsite). Purchase Department
has been formed under the Division with an aim to procure goods and services Establishment of (11ft x 7ft)
in an efficient and cost effective manner. Inventory Management System has LFD video wall
been adopted by the Division through Inventory & Requisition Management for monitoring of
System (IRMS) for automation of stationery items.
150
branches & all offsite ATM
Core Competencies of General Services Division (GSD)
Infrastructure
A Group of skilled Engineer (Civil, EEE, Mechanical, ECE,CSE) development for
Technically Sound officials
Full time technician (Electromechanical equipments)
25
Islamic Banking Windows

Successfully completed
decoration works of
Scrutinizing the requisition submitted by the Branches/Divisions to
assess actual demand.
Ensuring proper use and timely repairing & servicing of procured
goods and services to ensure maximum output
150th
Branch (Nikunja Branch)
Procurement of goods, services and works of high quality with
competitive price by stipulating terms and conditions of contract
Pool fleet management of
that safeguard interest of the Bank.
Support & Services from GSD

65
vehicles
Decoration renovation of interior works.
Different Repair & Maintenance works.
Procurements of IT & Non –IT equipments
Pool Vehicle Support
Inventory Management
Printing Stationery (Including security items)
Insurance of Locker
Store management
Outlook 2021
• Successful completion of all the works of ‘MBL Centre’.

• Providing logistics supports for successful opening of upcoming 20 Sub-
branches.
• Providing logistics supports for successful opening of upcoming
Branches.

BRANCHES
DIVISION
In order to achieve the goal of the organization, Branches Division is also working
with others in its own areas. The Division acts at the fore-front of business KEY INFORMATION
expansion operations of the Bank by conducting feasibility studies, area & 2020
premises selection of Branches/business centers & finally by obtaining license
from Bangladesh Bank & executing lease agreement with the landowners. The
During the pandemic
Division also looks after the cases regarding premises shifting, rent revision,
situation of Corona Virus
renewal of rental agreement etc. From March, 2020 the country is witnessing
(COVID-19) from March
a major outbreak of Corona Virus (COVID-19) due to which the Government 2020, the economy of the
resorted to lockdown at severely affected zones and declared general holiday country was projected to
from March 26, 2020 to May 30, 2020. As part of reducing the operating go through a dry spell for a
expense of the Bank, branch expansion program was slow down and the Bank prolonged uncertain period.
finally opened only one Branch in 2020 as our 150th Branch at Nikunja, Dhaka. Considering the sluggish
economic forecast and
Presently, Branches Division made feasibility studies to unbanked areas across to protect the interest of
the country and focused on opening Uposhakha with a view to opened up a Mercantile Bank Limited,
new horizon of banking, taking the Banking services to the doorsteps of people the Division managed 98
and bring more unbanked and underprivileged population under service landowners of our Branch
premises to reduce the
coverage of the Bank. In this connection, we have already obtained permission
monthly rent
for 08 sub branches and prepared to spread the Uposhakha network across
the country. In course of materializing expansion program taken by the
Management, the Division engages manpower of various enterprises, opens
avenues of earnings and thereby contributes in its own way in running the @10-20%
and total estimated savings
wheel of economy of the country.
from branch premises was
BDT 1.77 crore

(approximately).

Divisional Overview
CENTRAL CLEARING
DEPARTMENT (CCD)
Central Clearing Department (CCD) consists with BACPS, BEFTN and RTGS
system. Central Clearing Department’s core objective is to establish modern and KEY INFORMATION
efficient interbank payments, clearing and settlement system. Central Clearing 2020
Department (CCD) endeavors for promoting new payments through Clearing,
BEFTN and RTGS settlement systems to ease financial transactions ensuring
Performance for the Year
circulation of money within all scheduled Bank. Fully integrated with CBS in all
(includes all BACPS,
units are the key features of CCD with several customized automation, employee
BEFTN, RTGS)
friendly system modules and end to end dual authentication enabled in system
for better experience.
Total Outward Transaction
for 2020 (Nos)
Core Competencies
1,724,801
Bangladesh Automatic Cheque Processing System (BACPS)
Bangladesh Electronic Funds Transfer Network (BEFTN) Total Outward Amount
for 2020 (Nos)
Real-Time Gross Settlement (RTGS)
Key Activities performed in 2020

Total Inward Transaction
Successfully integrated Agent Banking, Uposhakha at BACPS,BEFTN for 2020 (Nos)
& RTGS system
Reduce the man power due to system integration and automation. 1,086,213
Successfully introduce BEFTN channel at Digital Banking (MBL
Rainbow app). Total Inward Amount
for 2020 (Nos)
Outward Items Inward Items
3% 3%
Taka 1,395,728.10
million
70% 61% 36%

27%
BACPS BEFTN RTGS BACPS BEFTN RTGS
Outlook 2021
• Introduce FC at BACPS and BEFTN system.

• A newer version of core banking software Temenos T-24 (R-19) integrated
with BACPS,BEFTN & RTGS system
• Attract more customers for paperless banking through BEFTN, RTGS &
Digital Banking (MBL Rainbow).
• Arrange training and workshop to build awareness and to prevent fraud &
fraudulent activities.

MBL CONTACT
CENTER
Since October 03, 2018. MBL Contact Center is continuing to grow in complexity
as it moves from handling customers’ queries such as transaction details or KEY INFORMATION
account balance, to addressing more complex of issues like transaction dispute, 2020
interest calculation of credit card or card activation.
Customer Served
Core Competencies of MBL Contact Center

215,039
Robust solution with call recording facility
Processed Request
Service level monitoring dashboard
State of the art technology.
encryption strategy to make our recorded calls more secured
58,000
Outbound Call
Key Activities in 2020 38,032

Inbound and Outbound services for all customers
Product wise Call Comparison
Launched Agent Banking Support Services
Launched Islamic Banking Support Services
Launched Digital Banking (MBL Rainbow) Support Services
44%
23%
10%
31%
15%
51%
18%
8%
Successfully modified Contact Center E-Matrix System
Credit Card Debit Card Gen. Banking My Cash
Enhanced Card Related Services Year 2019 Year 2020
Arranged trainings on new products and services
Services of Contact Center
Account Related Services

Retail Loan Related Services
Card Services
Remittance Related Services
Value Added Services (VAS)
MyCash Related Services
Islamic Banking Services
Agent Banking Services
Digital Banking Services (MBL Rainbow)
Customers Complaint Management
Outlook 2021
• Introduction of versatile IVR (Interactive Voice Chatbot), Chabot and email

services.
• Virtual Contact Centers, initiate Virtual IVR, Green PIN and TPIN services .

Divisional Overview
RESEARCH & PLANNING

DIVISION
Excellence in banking operation depends largely on a well equipped and efficient

Research and Planning. In this highly competitive industry, a Bank has to explore KEY INFORMATION
new or improved avenues of products and services, line of businesses in order 2020
to consolidate and make upswing in its growth cycle. This is where the role of
Research and Planning come into play and contribute for the greater interest of the
New Product Development
bank. Sensing the significance of Research and Development activities in banking,
for conventional
MBL has established a core Research and Planning Division (RPD) furnished with
skilled persons from the very inception of the Bank.
MBL Prabasi
Sanchaya Hishab
Core Competencies of Research & Planning Division

MBL Prabasi
Masik Sanchaya Prokolpo
Discipline Specific Conceptual Knowledge
Research Skill
Introduced three scheme
Communication Skill deposit products for Islamic
Banking Windows
Professionalism
Mudaraba Masik
Sanchaya Prokolpo,
Key Activities in 2020 Mudaraba Masik Munafa

Amanat Prokolpo
Upgraded bank’s Website
Mudaraba Digun Briddhi
Conducted Customer Satisfaction & Market Survey Amanat Prokolpo
Conducted 10 research works
Banking Industry Studies activity
Publication Activity: MBL Insight, Agragatir Pothe
Services of Research & Planning Division
New Product Development

Sector wise review, Peer Bank Review
Maintenance of MBL Website
Performance Award of Branches
Market research
Review & Re-engineering of existing Products
Outlook 2021
• Modify PPG of loan products (If required)

• Prepare & publish brochure including MBL’s product & services
• Preparing Islamic Banking products;
• Branch feasibility study
• Banking industry analysis
• Conduct customers’ satisfaction and their expectation from the bank.

ICT SECURITY
UNIT
Information Security is a continuous process/activity not a once off exercise

to protect and prevent unintended or unauthorized access, use, disclosure, KEY INFORMATION
disruption, modification, perusal, inspection, recording or destruction of 2020
information and related technologies and also ensure acceptable level
of security establishing security standards and controls against threats,
Cyber Defenders:
vulnerabilities, attacks and frauds. It also includes protection from unplanned
events and natural disasters. More than
•• Information Security preserves the Confidentiality, Integrity and Availability

as critical success factors.
60%
Officials
•• Information Security is the most critical facilitator for today’s business, not
an obstacle. Cyber Awareness:
•• Information Security does not get rid of accessing information rather

it assures the conformity, safety and reliability of storing and access to
information.
15
Sessions
Information security is everybody’s responsibility and it’s impossible without Cyber Quiz Program:
users’ awareness.
ICT Security Risks 80%

Achieved Certificate
Information & Communication Technology Security Risk is considered as one
of the core six risks as per Bangladesh Bank Risk Management guidelines. ICT
Simulated Phishing:
Security Unit works on three pillars: People, Process, and Technological Risks.
key initiatives taken by ICT security unit of MBL are:
•• Minimizing People Risks
2 Times
•• Building Human Firewall
ICT Risk Assessment:
•• Simulation of Phishing Attack
••
••
Celebration of Cyber Security Awareness Week October 2020
Minimizing ICT Process Risks
10
Business Solutions
•• Minimizing Information Technological Risks
National Cyber Drill:
•• IT Business Continuity Management
Achieved
•• Achievement in 1st National Cyber Drill 2020
7th
position in FIs
Outlook 2021
In view of the inception of the ICT Security Unit in MBL an outlook to form
and establish a Secure Operations Center in MBL has been projected. The
Secure Operations Center will be a Cyber Fusion Center envisaging state
of the art systems such as Security Information and Event Management
(SIEM), Privileged Access Management (PAM), Data Loss Prevention (DLP),
Anti-Advanced Persistent Threats (A-APT), User behavior Analysis (UBA) and
Network Behavior Analysis (NBA). MBL has also projected to become ISO
27001:2013 complaint Information Security Management System (ISMS)
and maintain world standard in managing Information Security activities.
Bangladesh Bank also advised to all the banks to obtain ISO 27001 and PCI
DSS certification. With that the Outlook of 2021 with bring about a bright and
vibrant future for MBL.

Subsidiary Overview

MERCANTILE BANK
SECURITIES LIMITED (MBSL)
Mercantile Bank Securities Limited (MBSL) is a subsidiary of Mercantile Bank Limited

which offers full-fledged international standard brokerage service with margin loan
facility. MBSL is also a full service Depository Participant (DP) of Central Depository
Bangladesh Ltd. (CDBL). The brokerage service is designed to provide customers with
necessary support profitably in the stock market.
MBSL is dedicated to provide high level of professional are comprehensive in nature, including brokerage, margin
and personalized services to its domestic and loan, CDBL facilities, and research and custodian needs
international clients at a reasonable cost. MBSL’s services of customers.
MBSL at a glance:
Name of the Company : Mercantile Bank Securities Limited (MBSL)
Legal Status : Incorporated as a Private Limited Company with the Registrar of Joint Stock
Companies & Firms (RJSC) & Wholly Owned Subsidiary Company of Mercantile
Bank Limited
Authorized Capital : BDT 5,000.00 Million
Paid up Capital : BDT 3,600.00 Million
Address of Registered Office : Shawdesh Tower (3rd floor), 41/6 Purana Paltan, Dhaka-1000.
Telephone : 02-47119084, 47119074, 47119085, 47118885
Fax : 02-47111256
Email address : mblbhd@gmail.com
Website : www.mbslbd.com
Total Number of Workstations : 45
Total Number of DSE Workstations : 35
Total Number of CSE Workstations : 10
No. of Authorized Representatives : 37
No. of Branches : 06
Year End : December 31
Auditor of the Company : K. M. HASAN & CO., Chartered Accountants
Number of Clients : 6,674
MBSL’s Milestone
Date of DSE CSE Stock broker / Dealer Date of DP registration

Incorporation Membership # 224 Membership # 140 license of CSE Certificate
June 27, 2010 December 05, 2010 December 30, 2010 August 25, 2011 September 14, 2011

Subsidiary Overview
MISSION VISION To be one of the most compliant and customer oriented brokerage service provider, with priorities in
creation of long term and well informed investors which will contribute to the development of the capital
market and eventually to the economy of the country.
To become the best Securities House with a strong brand and enhancing value for the entire stakeholder
through excellence in performance and good governance.
We aspire to be one of the most compliant and customer oriented company, our priorities lie in creation of
long term and well informed investors which will contribute to the development of the capital market and
eventually to the economy of the country. Our Mission statement are as follows:
To be the Pioneer, not follower;
To be Compliant in every respect ;
Knowledge Based Brokerage Service;
Offer wide array of products and services that differentiate and excite all customer segments;
Be the “Employer of choice” by offering an environment where people excel and leaders are created;
Continuously challenge processes and platforms to enhance effectiveness and efficiency;
Promote innovation and automation with a view to guaranteeing and enhancing excellence in service;
Ensure respect for community, good governance and compliance in everything we do;
We will deliver service excellence to all our customers, both internal and external;
We will ensure to maximize shareholder’s value;
We will constantly challenge our systems, procedures and training to maintain a cohesive and
professional team in achieving service excellence;
We will create an enabling environment and embrace a team based culture where people will excel.
KEY STRENGTH
Skilled and knowledgeable employees of Mercantile Bank Securities Limited.

Realize the reputation of Mercantile Bank as wholly owned subsidiary of Mercantile Bank.
Sophisticated tools and financial analysis.
Highly complained operating system.
One of the most preferred brands
Dedicated trader for every investor
Secured custodianship of your asset
Deposit & withdrawal through BEFTN
High quality services at acceptable cost
Research and market insights for better investment decision.
One of the most preferred brands
Dedicated trader for every investor
Secured custodianship of your asset
Deposit & withdrawal through BEFTN
High quality services at acceptable cost
Research and market insights for better investment decision

List of Board of Directors
M.A. Khan Belal Engr. Mohd. Monsuruzzaman Md. Nasiruddin Choudhury Morshed Alam, MP
Chairman Vice Chairman Director Director
Alhaj Akram Hossain (Humayun) Mirazul Ahsan A.S.M. Feroz Alam Md. Anwarul Haque
Director Director Director Director
M. Amanullah Dr. Toufique Rahman Chowdhury Ms. Bilkis Begum Ms. Israt Jahan
Ms. Farida Begum Rakim Reza Rousseau Subrota Narayan Roy Md. Anwar Hossain
Md. Nurer Rahman Dr. Md. Rezaul Kabir Md. Quamrul Islam Chowdhury K.M. Kutub Uddin Romel
Independent Director Independent Director MD & CEO, MBL CEO (CC)

Subsidiary Overview
FUNCTIONS OF MERCANTILE BANK SECURITIES

LIMITED: Research and Publication:
Since the establishment of the company as a wholly
Daily price information Market Overview, Daily
owned subsidiary of The Mercantile Bank Limited,
Fact Sheet
Mercantile Bank Securities Limited is engaged in different
Monthly report
functions to provide the promising services to its existing
and potential clients and stakeholders. It has developed Industry/Corporate research report
a disciplined approach toward providing capital market Industry/Corporate research report
services, including beneficial owner accounts opening Free access to our company research reports
and maintaining, margin lone providing and with the through our web-site
research and publication. The main functions operated Half yearly political and economic update
by Mercantile Bank Securities Limited are as follows:
CDBL Services as full service Depository Value Added Services:

Participant:
Daily portfolio services through email
Bo (Beneficial Owner) accounts opening and
maintenance Daily trade confirmation through SMS service
Dematerialization and Re-materialization

CLIENT DATABASE:
Transfers and multiple accounts movement
Pledging, un-pledging and confiscation MBSL has a big client base of around 6,674 active
Lending and borrowing accounts in trade. Both Individual and institutional clients
are maintaining their account with MBSL. Moreover it
Corporate events announcement enquiry
has a good number of Foreign and NRB clients who have
(Cash and non-Cash).
sizable portfolio investment.
Sales and Brokerage Services:

Brokerage services for Intuitional PRODUCTS:
Clients:
Direct Trading Account
Foreign Fund Managers Margin Trading Account
Insurance Companies Non Resident Investors Taka Account (NITA)
Banks and Financial Institution
Trust
Corporation
MAJOR ACTIVITIES IN 2020
Brokerage Service for retail (Individual) Clients
Provide Margin lone at competitive interest rate •• Through in year 2020 Mercantile Bank Securities
Limited develop a well-organized website to make
International and Domestic Placement of
them more accessible to their existing and potential
Securities
clients. In addition they should introduce online
Brokerage Services Trade Execution Dhaka and trading facilities for their clients.
Chittagong Stock Exchange Limited
Pre-IPO private placement opportunities
•• Mercantile Bank Securities Limited introduce investor
awareness program to produce wise and educated
through Merchant Banks
investor. In this way both the clients and house will
Appointment of dedicated and skilled sales
be benefitted.
representative
Opportunities for trading in different financial •• Mercantile Bank Securities Limited give more
instruments emphasize on the research and publications in
2020. And MBSL are confirmed that research and
publications are available to the clients.
Custodial Services:
•• Branch offices are monitored by the management of
the Mercantile Bank Securities Limited and we visit to
Mercantile Bank Securities Limited have an
the branch office to have a look on the office.
exclusive arrangement for clients to keep their
shares in safe custody in our vault •• In 2020 the new branch in Nikunjo is work in progress
Safe Deepings of securities with maintained all rules & regulations.

•• Mercantile Bank Securities Limited arranges seminar •• Mercantile Bank Securities Limited took effective
and workshop with the different stakeholder of this initiative to make the all employees up to date about
organization about the investment of capital market necessary rules and regulation about the capital
to get the feedback from the clients. market of Bangladesh.
FINANCIAL HIGHLIGHTS
BDT in Million
Particulars 2016 2017 2018 2019 2020
Income Statement
Operating Income 138.60 221.37 171.43 156.51 205.63
Operating Expenses 55.11 95.10 144.23 16.02 26.62
Gross Profit 83.49 126.27 27.20 140.49 179.01
Operating Profit/(Loss) 31.82 69.94 (28.90 ) 76.08 124.24
Profit/(Loss) Before Provision and Income Tax 62.91 96.35 (.029) 101.70 139.16
Profit/(Loss) Before Income Tax 27.91 31.35 (66.22) 63.50 99.16
Net Profit After Income Tax 0.52 5.24 (77.53) 42.45 73.62
Balance Sheet
Total Assets 6,561.47 5,947.14 5,913.40 56,80.36 5,907.70
Paid Up Capital 3,600.00 3,600.00 3,600.00 3600.00 3600.00
Total Equity 3,634.87 3,640.10 3,562.58 3,605.03 3,678.65
Total Liabilities 2,926.60 2,307.04 2,350.81 2,075.32 2,229.05
Total Equity and Liabilities 6,561.47 5,947.14 5,913.40 5,672.88 5,907.70
Graphical presentation BDT in Million
Profit Before Provision and Income Tax Total Assets
139.16
101.7 6561.47
96.35
62.91
5947.14 5913.4 5907.7

5680.36
-0.029
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020

Subsidiary Overview
Branch Network
Mirpur Branch Sylhet Branch

Razia Plaza (4Th Floor) Al-Hamra Shopping City (5Th
Rokeya Sarani,184 Senpara Floor)
Parbata, Mirpur-10 1052-00, Zindabazar
Dhaka-1216. Sylhet-3100
Ph # 88-02-9014640 Phone # 0821-711565
Fax # 88-02-9014680 Fax # 0821-711571
Hob: Md. Abdul Motin Hob: Sumit Deb Roy
Uttara Branch Khulna Branch

House # 22, Sonargaon Rupsha Plaza (2Nd Floor)
Janapath, Sector # 9, Uttara
73 K.d.a Avenue, C/A
Dhaka-1230
Sonadanga, Khulna-9100.
Phone # 88-02-8959047, 88-
Phone # 041-731396
02-8962945
Fax # 88-02-8961798 Fax # 88-041-731397
Hob: Syed Akm Fazley Rabbi Hob: A.T.M. Salahuddin
Sat Masjid Road Branch Agrabad Branch

Mbl Center, Holding # 82/A,
Mishkat Arcade (1St Floor),
Road No. 08/A , Ward # 15,
Satmasjid Road, Dhanmondi 21/1, Agrabad C/A,Chattogram.
R/A, Dhaka
Phone # 88-02-9126872 Phone # 031-721865
Fax # 02-9128541
Fax # 031-716459
Hob: Yasin Humayun
Chowdhory Hob: Abdur Rahim Chowdhury
OUTLOOK 2021:
•• Growth in turnover
Achieve at least 2.5% of total market share during the year.
•• Increasing number of clients
At least 20% growth of existing client base.
•• Branches in different region of Bangladesh
Opening new branches/digital booths /extension office in different location or region of Bangladesh.
•• New technology
To ensure smooth operation and constant usage, order transmission and other customer service we are planning
to introduce online trading facility and acquire own OMS (Order Management System) for better trade execution.
•• Most experienced working force
MBSL has a reputation to recruit the most experienced personal to do its job done.
•• Simple margin loan facility
Maintaining all rules & regulations we will continue to offer margin loan facilities to the investors with attractive
rates.
•• Enhancing commission based income
We will offer reduce commission rates for large investors to enhance commission based income.

MERCANTILE
EXCHANGE HOUSE (UK) LIMITED
Overview: unskilled. Considering the geo-economics importance

of UK, Mercantile Bank Ltd intended to extend their
Usually United Kingdom is considered as one of the services to United Kingdom aiming to enter into not
potential economic hubs of the world. This market has only to United Kingdom but also the potential European
the mechanism of affecting international trade and economic area.
finance in various aspects. There are a good number
of Bangladeshi Expatriates living and residing in United Mercantile Exchange House (UK) Limited commenced
Kingdom. Currently, there are more than half a million its operation on December 06, 2011 in United Kingdom
of Bangladeshis who live in United Kingdom. These complying all sorts of regulatory formalities in UK and
expatriates include scholars, professionals, skilled and Bangladesh.
Mission and vision
Our mission is to provide superior quality our vision is to ascertain such quality services
remittance services to the Bangladeshi through wider network in home and abroad with
Expatriates living and residing in United a dedicated team of service providers where the
Kingdom and their beneficiaries in Bangladesh customers can find themselves comfortable of
in sustainable manner whereas receiving remittance services from our network
Board of Directors position in parent company, the Honorable Chairman of

Board of Directors and MD & CEO of Parent Company i.e.
The Board of Mercantile Exchange House (UK) is
Mercantile Bank Ltd. along with other director will be the
comprised with four directors. Among these four
directors, three from the parent company and another Members of Board of Directors of Mercantile Exchange
one from United Kingdom having UK nationality as per House (UK) Ltd. The members of Board of Directors of
prevailing regulations in United Kingdom. By virtue of their Mercantile Exchange House (UK) Ltd. are given as follows:
Morshed Alam, MP A.S.M. Feroz Alam
Md. Quamrul Islam Cowdhury Abul Kalam Azad

Subsidiary Overview
Products and Services Bank owned Exchange Houses introduced remittance

business in London during 2011-2012. But due to regulatory
Mercantile Exchange House (UK) Ltd. is not merely an embargo, non-availability of MSB (Money Service Business)
Exchange House for remittance business, rather it Account, excessive operating costs, increased rent & rates
act as one of the most potential business hubs of the and not acquiring expected amount of business many of
Bank in London. Because, it not only offers remittance the exchange houses wrapped up their business and left
services but also provides currency exchange service United Kingdom. Mercantile Exchange House (UK) Ltd. set
their strategies in a way to keep the operation continued
i.e. bureau de change, promoting other products of
with minimum costs. Besides, the location of it’s London
the Bank among the Expatriates as well as promoting
branch is one of the most important factor that helps
government owned financial instruments among to be with the current market. It is located at one of the
the expatriates in United Kingdom. As a part of their prime locations at Whitechapel area where Bangladeshis
activities, they usually open a good number of Savings roam very frequently.
and scheme account with different branches in
Bangladesh.The following services are offered to the Major Activities
Bangladeshi Expatriates living in United Kingdom:
Mercantile Exchange House (UK) Ltd. is one of the
subsidiary of Mercantile Bank Limited operates in United
One stop remittance services to Bangladesh Kingdom with a view to introduce banking products and
services among the Bangladeshi Expatriates. Remittance
plays as an indispensable part of entering into UK market.
Account Transfer
Through excellent remittance service, the Exchange
Transfer through Cash Over the Counter House has created it’s own trustworthiness among
the stakeholders. The Exchange House usually offers
Remittance Services along with Bureau De Change i.e.
Currency Exchange Service (Bureau De
Currency Exchange services.
Change)
Outlook 2021
Opening of different types of accounts Due to COVID 19 scenario and contemporary issues in
United Kingdom and all over the world, we could not
Savings Account perform accordingly. Even we had to keep the branch
closed for most of the time of the year. We believe that
Foreign Currency Account
the year 2021 will be the year to get back. We will be able
MSS (Monthly Savings Scheme) Account to secure substantial volume of business that will lead
Fixed Deposit Account the exchange house to ascertain desired profit for the
year 2021. For attaining the desired goal, we have already
set some strategies for such accomplishment. We are
Assist the expatriates in purchasing different planning to achieve the followings in the year 2021:
Govt. Instruments
•• Having business account i.e. MSB (Money Service
Wage Earners’ Development Bond (WEDB) Business) Account with reputed Banks in United
US Dollar Bond etc. Kingdom so that the operating costs can be kept as
minimum.
Performance •• Opening of Expenses Account
Due to devastating COVID-19 pandemic, we could not •• Introducing app based online business platform so
operate our branch properly in 2020 due to nationwide that the customers can easily transact irrespective of
lock down in different phases. In the year 2020, we routed their physical presence.
6,425 numbers of transactions worth of Tk. 45.8 Crore •• To make the branch profitable by achieving targeted
equivalent to GBP4.17 Million through Mercantile Exchange transactions.
House (UK) Ltd. Despite the challenges of carrying out
business in London, Mercantile Exchange House (UK) Ltd. •• Opening of Bank Account for securing low cost
is still under operation. Initially there were 12 Bangladeshi deposits.
London Branch Contact Person Mr. Md. Shahin Ahmed

108 White Chapel Road Mr. Sher Mahmud Saika Manager Customer Service Officer
London E1 1JD Cell : +44 (0) 7867484755 Cell : +44 (0) 7506 959 463
United Kingdom Tel : 020 3638 1919 Tel : 020 3638 1919
www.meukltd.co.uk Email : sher@mblbd.com, Email : sh.ahmed@mblbd.com,
londonmblex@gmail.com londonmblex@gmail.com

MBL ASSET
MANAGEMENT LIMITED
MBL Asset Management Limited (MBL AML) is one of We are specialized in Mutual Fund, Provident Fund,
the newly form subsidiaries of Mercantile Bank Limited Institutional portfolio management and Corporate
has started its business for Asset Management and Advisory service. MBL Asset Management Limited
Alternative Fund Management in November 29, 2018 is committed to provide fund management service
through Certificate of Incorporation # C-148633/2018 by investment professionals including CFA charter
with RJSC. The company has licensed by Bangladesh holder with considerable fund management expertise.
Securities and Exchange Commission (BSEC) in January Our investments in stocks are based on earnings
30, 2020 as Asset Management Company. MBL AML is expectations, attractive valuations, major economic
regulated under Bangladesh Securities and Exchange indicators and various other technical, fundamental
Commission (Mutual Fund) Rules 2001. indicators and factors.
MBL Asset Management Limited’s Profile:
01. Registered Name MBL Asset Management Limited (MBL AML)

02. Incorporation No. C-148633/2018
03. Date of Incorporation November 29, 2018
04. Registered & Head Office 61, Dilkusha Commercial Area,
Dhaka-1000, Bangladesh
05. BSEC Registration Code BSEC/ Asset Management/ 2020/45
06. Authorized Capital BDT 200 million
07. Accounting Year End 31 December

08. Auditor Howlader Maria & Co., Chartered Accountants
Milestone
March 12, 2018 January 30, 2020

Bangladesh Bank has approved to Awarded Asset Management
form subsidiary in the name of Company Registration Certificate
MBL Asset Management Limited to from BSEC
provide Asset Management services.
2018 2018 2020 2020
November 29, 2018 October 20, 2020

Emerged as a Private Limited Appointed as Asset Manager of
Company through Certificate of Mercantile Bank Unit Fund by
Incorporation # C-148633/2018 sponsor.

Subsidiary Overview
Board of Directors
Mr.Rakim Reza Rousseau Mr.Mati Ul Hasan Mr. Shimon Inamori Ms.Nafisa Saima
Chairman Vice Chairman, Nominated by MBL Director Director
Mrs.Nargis Anwar Mr. Shamsul Alam Mr. Tahrin Aman Mr. Ahmed Hossain
Nominated by Living Plus Ltd Nominated by Arena Industries Ltd
Mrs. Jahanara Irin Mr. Md. Rushaed Ahsan Mr.Shahriar Arefin Alam Mr. Md. Forhad Hossain
Mr. G. W. M. Mortaza Mr. Adil Raihan Mr. Mohammad Samir Uddin,

Director, Nominated by MBL Director, Nominated by MBL CFA
Chief Executive Officer

Operating Environment
MBL Asset Management Limited provide Mutual Fund, Provident Fund, Institutional portfolio management and Corporate
Advisory service with professional fund management team. We furnished our fund management team with Chief
Executive Officer, First Assistant Vice President and Executive Officer. Organization motivate and satisfy all employee
with fair and equitable reward policies. Our Employees are dedicated, loyal to achieve goals and comply with regulations.
Our Board members are consist of individual and institution with strong track record of performance and reputation.
They provide direction to the management for the growth and development of the organization by providing best Fund
Management services to investors.
Products and services Offered
Mutual Fund Management
We manage Mutual Fund by full Chartered Financial Analyst (CFA) and experienced professionals who has already proven
track record in fund management. Mutual fund is a professionally managed fund that pools money from investors and
invests the fund in a certain type of portfolio of stocks, bonds and other securities. Mutual fund allows an investor to
diversify his investment in a simple and cost-effective way to minimize the risk of investment. Professional portfolio
managers and analysts analyse industry, sector and market information as well as evaluate companies and securities to
make buy and sell decisions. We manage-
Mutual Fund
Closed-End Mutual Fund Open-End Mutual Fund

Close-ended mutual fund is traded on exchange at its Net Asset Open-ended mutual fund is traded daily based on the orders of
Value (NAV) but its capital unit is fixed. This fund neither issues portfolio managers at the Net Asset Value (NAV). The NAV of the fund
securities after Initial Public Offering (IPO) nor redeems before is determined regularly at the end of each week The fund sponsors
the specified period of the term. The value of close-ended issue securities if there is any purchase demand as well as redeem
mutual fund is determined by the supply and demand of fund. securities if there is any sale demand. So, the number of securities
under open-ended mutual fund is unlimited.
Institutional Portfolio Management
Institutional investors with different and unique investment objective seek special financial solutions. Keeping that in
mind we provide specialized service in accordance with their requirement.
•• We ensure professional expertise and maintain proper asset combination for our institutional clients.
•• We provide our clients with customized investment solution and tailored financial services to materialize their
financial goal.
We assure special control of our investors over their fund. Our team of professionals helps them to understand the
dynamics more closely and effectively.
Corporate Advisory Service
MBL Asset Management Limited as Asset Manager, provides corporate advisory services. Many private companies who
are thinking to issue equity or debt securities need such corporate advisory support. They need the following service(s)
which MBL Asset Management Limited proudly provide(s):
•• Provide advice and support to raise funds by issuing corporate bond.
•• Provide advice and support to raise funds by issuing equity.
•• Provide advice to restructure the balance sheet to reduce the cost of capital at minimum level.
•• Provide appraisal and valuation of private company

Subsidiary Overview
Key Information
The key financial indicators of the company as on December 31, 2020 are shown below:
Amount in BDT
20,00,00,000.00 10,00,00,000.00 10,46,57.221.00 24,63,000.00
Authorised Capital Paid up Capital Total Shareholder’s Total Liabilities

Equity
10,71,20,222 33,14,238.00 0.33 10.46
Total Assets Net profit after tax EPS NAV
Major Activities
The Major activities of the company are to manage Mutual Fund, institutional Portfolio,and provident fund and to provide
corporate advisory services. Mercantile Bank Limited, sponsor of Mercantile Bank Unit Fund, has appointed MBL Asset
Management Limited as Asset Manager of “Mercantile Bank Unit Fund”. The initial fund size will be Tk.50,00,00,000.00
(Fifty crore) only and sponsor will contribute at least 10% of initial fund size.
Outlook 2021
MBL Asset Management Limited will focus on providing asset management service to the valued individual as well as
institutional investors. MBL Asset Management Company believes in identifying & delivering financial goals through
devoted and customized financial solutions by deep understanding and specialized domain knowledge through a
dedicated and expert team. MBL Asset Management will be involved in Mutual Fund, and Alternative Fund Management.
We are identified our strategic priority for the coming years.
Initiation of Mercantile Bank Unit Fund:

Name of the fund : Mercantile Bank Unit Fund
Sponsor : Mercantile Bank Limited
Proposed size : BDT 500 million divided into 50,000,000 shares
Sponsor Participation : BDT 50.00 million (10% of initial fund size)
Fund manager : MBL Asset Management Limited
Initiation of Fund Management License: Our application for Fund Management License is under examination of
Bangladesh Securities and Exchange Commission. It is expected that we will be rewarded by Fund Management License
soon that will facilitate us to Manage Alternative Fund.
Talent acquire and retention: Professional fund managers are prerequisite for generating return for investors. As
Asset Manager and Fund Manager we have a plan to set up Fund Management team by investment professionals with
considerable fund management expertise. We also have retention plan of talent employees by fair, unique and equitable
reward policies.
Business expansion by Innovative products: There is a plan to introduce innovative financial products for the customer
along with mutual fund management like discretionary portfolio management, corporate advisory service to raise fund
by issuing debt and equity instruments.

MBL MYCASH
LIMITED
The mobile banking service of Mercantile Bank Limited is branded as “MyCash” and it
aims to connect with the country’s unbanked population. Being one of the early movers
of the industry, MyCash has network connectivity with every telecom operator of the
country. Utilizing the country wide mobile phone connectivity, MyCash intends to
reach every single door of the country with its wide range of services.
In compliance with the new Mobile

Financial Services guidelines
issued by the Bangladesh Bank
on 30 July, 2018; Mercantile
Bank obtained NOC from
Bangladesh Bank on 13 January,
2019 for formation of a subsidiary
company with an aim to provide
its Mobile Financial Services to the
large population of the country
in more convenient manner.
Mercantile Bank Limited formed
100% owned subsidiary company
in the name of MBL MyCash
Limited as a private company
limited by shares incorporated on
July 03, 2019 with the Registrar of
Joint Stock Companies and Firms,
Bangladesh.
Details of MyCash have been

discussed at ‘’Divisional Overview”
of this report.


ROADMAP TO
INTEGRATED REPORT
MBL prepares its integrated report to provide all necessary information for offering
appropriate information to shareholders and other stakeholders. This report is equipped
on the basis of interlinking all kinds of data sets. Hence, the integrated report reflects
MBL’s value creation processes through its six capital, strategy and resource allocation,
materiality discussions and stakeholder engagement.
The roadmap below outlines the steps taken by MBL on the road to integrated reporting:
Defining MBL's Value Creation Strategy and Future

Business Model Activities Resource Orientation
Allocation
Adapting better business process
This integrated report provides a full, concise and balanced picture of MBL’s overall performance that helps investors
and other stakeholders to understand and assess the bank’s ability to create and sustain value in the short, medium and
long term.
Mapping MBL’s Integrated Report
Social and
Network Capital Intellectual Capital
discussed in discussed in
'Sustainability 'Divisional Overview'.
Report'
'Natural Capital'
discussed in
"Sustainability Report'
Institutional
Capital discussed
in 'About Mercantile
Bank Limited',
'Divisional Overview'
and 'Subsidiary
Overview'.
Financial Capital
discussed in
"Directors' Report'
Human Capital
discussed in
'Human Manage-
ment Report'.

STRATEGIC
FRAMEWORK
DEPOSIT STRATEGIES Through all these, the Bank has maintained a good credit
rating locally and internationally over the years, been able
Deposit is the blood of any bank. For collecting quality to keep good customer faith while returning customers’
deposit, MBL has formulated several strategies. The
money, ensured strong corporate governance practices
objective of MBL has always been to maintain a quality
for transparency, accountability and fairness, ensured a
deposit pool while maintaining a very competitive deposit
mix. Here, quality deposit refers to the source of deposit strong branch network with state of the art IT platform.
being unquestionable. MBL has certainly been able to do In the future days, the Bank wants to use all of these as
that as the bank has secured ‘one of the Top five spots’ in tools to implement the deposit strategies. Moreover, in
the country’s banking sector when it comes to meeting order to ensure better customer services, the Bank has
global standard in following Anti Money Laundering efficient employees over the country under dynamic and
(AML) guidelines. While keeping the percentage level of experience Board of Directors and Top Management.
No-cost and Low-cost deposit to optimum will ensure
that the Bank can maintain a very competitive deposit The main tools with which MBL is looking to implement
mix which will certainly ensure higher profitability. the deposit strategies are as follows:
BETTER DIFFERENTIATED ROBUST EFFICIENT MAINTAIN STATE-OF-THE-ART

CUSTOMER PRODUCTS CORPORATE EMPLOYEES CONSISTENT TECHNOLOGY
SERVICES AND GOVERNANCE CREDIT
SERVICES PRACTICES RATING
LOCALLY &
INTERNATIONALLY
The following strategies will be followed to ensure quality City Corporation, employee of garments industries,
deposit can be procured while maintaining a competitive employee of leather and footwear industries,
deposit mix: government grants from ministry of religious affairs
for rehabilitation of distressed people, students of
•• Cross Selling of different Products including Retail to
school, street urchin and working children, grants
Corporate Customers.
from Hindu Religious Kallyan Trust for distressed
•• Collections of utility bill from DPDC, DESCO, PDB, people, Ila affected people, blind and all kinds of
BREB, BTCL. WASA. Our Branches have given special disabled people, etc.
efforts for collecting these bills. Along with the
branches, platforms like ‘My Cash’ and Kiosks are
•• We have entered into agreements for collection of
Utility bills with most of the Utility Service Providers
being used to ensure smooth collection.
under Real Time Online Banking System, Mobile
•• Quarterly Basis Deposit Campaign throughout year Financial Services “MyCash”, Internet Banking and
for ‘Low Cost’ and ‘No Cost’ Deposit. Other Delivery Channels, such as BTCL, DESCO,
DPDC, Dhaka WASA, TITAS Gas, WZPDCL, BRTA,
•• Opening Bank Accounts of minimum balances for
Karnaphuli Gas Distribution Company Ltd., Bakhrabad
BDT10.00 (Ten), 50.00 (Fifty) and 100.00 (Hundred)
Gas Distribution Company Ltd., Sundarban Gas
with our branches for serving underprivileged people
Company Ltd., Dhaka South City Corporation
who are financially excluded such as farmer, freedom
Ltd., Dhaka North City Corporation, Jalalabad Gas
fighter, small jibon bima policy owner, marginal
Transmission & Distribution System Ltd., Bangladesh
income man and woman, privileged people under
Rural Electrification Board, Third Wave Technology
national services program, beneficiary under social
Ltd. “Nagad”, etc
security facilities, cleaners of north and south Dhaka

Mercantile Bank Limited signed an agreement with Chattagram WASA. As per the agreement, Mercantile Bank will facilitate the collection of Water and
Sewerage bill from the customers of CWASA through Real Time Online Banking System.
•• We have signed an agreement with Life Insurance •• Maintain Different Brokerage Houses Accounts with
Companies for collection of Premium through our branches.
Real Time Online Banking System, Mobile Financial •• Monitoring of the Collection Accounts for ensuring
Services “MyCash” and Other Delivery Channels smooth operation.
like National Life Insurance Company Ltd., Rupali
Life Insurance Company Limited, Zenith Islami Life •• Exploiting Mobile Banking Services “MyCash” for
Insurance Ltd., Meghna Life Insurance Company collection of Utilities Bills.
Ltd., etc. •• Special emphasis is given on the application of
Digital Technologies to realize Digital Bangladesh
•• Enlistment and renewal of General Insurances (Non-
Vision 2021.
Life) with our Bank as approved insurer for yearly.
•• As part of our bank’s strategy, we are providing “ONE
•• Taping Different Government agencies e.g.
STOP UTILITY BILL COLLECTION SERVICE” since
Ministry of Religious Affairs for Pre-registration and we have entered into agreement for collection of
Registration of Haj fees, Ministry of Planning for Utility Bills with most of the Utility Service providers
participation the Tender Schedule/Document under under Real time online Banking System, Mobile
e-GP, Ministry of ICT for using a2i payment gateway Financial Services “MyCash” such as BTCL, DESCO,
for collection Utilities, Roads & Highway, LGED, DPDC, Dhaka WASA, TITAS Gas, Pre-Registration and
Bangladesh Bridge Authority, etc, and also Other Registration Fees of Hajj, KGDCL, and BRTA. Next, we
Different Corporate Houses, e.g. Foreign Air Lines, will provide DSCC, DNCC, BGCL, SGCL, etc.
Telecom Companies, etc. and maintaining regular
intense social interaction with different segments of ADVANCES STRATEGIES
the society.
It is a fundamental precept of banking everywhere that
•• Exploiting the growing rural deposit basket by advances are made to customers in reliance on his
setting- up smaller size low cost rural branches. promise to repay, rather than the security held by the
banker. Although all lending involves some degree of
•• Offering cash management services, i.e. Collection risks, to minimize this risk MBL has develop sound and
of Institutional accounts and effective use of EFTN safe lending policies where selection of borrower are
Service, Collection Booth, to ensure fast & secure clearly define.
cash service such as BREB Booth at Velanagar,
Narsingdi, Notre Dame University Campus, Shah Ali
•• Focus on Good rating Company
College, Majid Zarina Foundation, etc. •• Remodeling on concentration of segment wise loan.

•• Focus on retail business IMPORT & EXPORT STRATEGIES

•• Backward linkage industries to be targeted to provide Mercantile Bank Limited is one of the leading private
a good source of SME business through availing the commercial banks in Bangladesh with a strong existence
benefit of supply chain management in the foreign exchange market. The Bank has retained
•• New emerging sectors like ICT Sector, Energy & its dominance as a market leader in buying and selling
Power Sector, Health care sector, Light Engineering, of foreign exchange and dealing with huge volume of
Tourism Industry, Ceramic Sector, to be more Export and Import business.
emphasized. •• Marketing for not only established business
•• Special attention will be given to expand SME credit houses but also the potential clients having strong
portfolio to achieve relatively higher yields and also entrepreneurship spirit to grow.
to reduce adverse effects of large volume defaults. •• Arranging credit lines for foreign currency from
•• Risk Management techniques should apply to ensure international agencies to facilitate international trade
strong internal control over business operation. business particularly import clients at a competitive
rate and the country as a whole will get benefit of
•• Identifying probable problem accounts through Early
building foreign exchange reserve.
Warning System (‘EWS’) and taking appropriate care
of those and formulating exit plan, where necessary. •• Garments sector will be more focused where tested
and potential clients will be in the portfolio basket
•• Disbursement of loan to high yield generating
under the regime of calculative risk return trade-off.
business segments commensurate with calculative
risk and maintain high quality asset portfolio. •• Emerging ship building and ship breaking sectors will
explore new opportunities which the Bank will tap for
•• Existing thrust sectors like agro based industries,
increasing international trade.
leather, frozen food, textile industry to be more
focused •• Industries having backward linkage will yield better
opportunity and reduce risk exposure.
•• Agri-business sectors like sugar, edible oil, wheat,
rice, maze, dal, peas, Food & Beverage to be more •• Focusing on service export sectors like IT, Education
focused. and Health Care sector.
Mercantile Bank organized a special training Course for its export clients on EXP Issue and Reporting of Duplicate EXP in Bangladesh Bank Online Export
Monitoring System (OEMS).

REMITTANCE STRATEGIES
Remittance has become an important aspect for the developing countries like Bangladesh for socio-economic progress.
It is the second-highest source of foreign currency earnings for Bangladesh, following the ready-made garments industry.
MBL will look to tap into this huge inflow of remittance. For that-
The Bank has fully The Bank has already MBL has already Our top Management
owned subsidiary taken effective initiatives maintained partnership has taken up this matter
named “Mercantile to provide smooth with various worldwide seriously and has gone
Exchange House service at the branch remittance service on to do extensive
(UK) Ltd.” in London, level to the remittance providers and the Bank marketing in this regard
United Kingdom. This customers. will look to further outside of the country
subsidiary renders the continue and enhance to tap into this inflow.
best remittance services the relationship with
to the expatriates living them to provide more
and working in UK smooth service.
During the year 2020, Mercantile Bank Limited signed an agreement with Gulf Exchange Company, Qatar, one of the most reputed and oldest money
transfer companies in State of Qatar. As a result of this agreement, Bangladeshi expatriates living in Qatar can send their hard earned money through Gulf
Exchange Company, Qatar to the relatives of them in Bangladesh to receive their remittances at any branch of the bank in a safe, legal and easy way.

STRATEGIC
FOCUS 2021
Remodeling Deposit Mix. Flourishing Islamic Banking Prudent NPL management.

Window operations.
Reduction of operating Carving out Mobile Effective control on

expenses. Financial Services as early alerts & monitoring
extensive revenue stream. accounts.
Increase of Non Funded Thriving Agent Banking Effective follow up for

Business and Enhancement Division and Sub Branches. disposal of legal cases
of fee based income. against NPL.
Accommodating new Reinforcing Off-shore All-out efforts for Recovery

corporate and SME clients. Banking Division. of NPL.
Focusing on Consumer & Retail Burgeoning MBL Asset Developing Human

Banking and SME Financing Management Limited. Resources.
to reduce dependency on
Corporate Loan.
Revamping Card Business. Acquiring more Non- Ensuring regulatory

banking Assets compliance.

SWOT
ANALYSIS
Opportunities Strengths
• Exploring new avenues of business • 22 years of Banking Experiences with Strong Brand Value
• Cross-selling of products and services • Equipped with state-of-art-Data Center.
• Digital transformation • Digital Banking facilities: MBL Rainbow, My Cash.
• Financial Inclusion • Eminent and experienced Board of Directors
• Favorable macro-economic indicators • Pool of efficient and skilled human resources
• Mega development work ongoing and • Wide range of branch & ATM network with agent
upcoming. banking outlets as well as sub-branches.
• Wide range of competitive products and services
(Conventional & Islamic) to meet the demand of
various classes of customers.
• Strong Financial Position to meet all sorts of liabilities.
• High-quality credit rating over the years
• Strict ethical and moral
• Huge Market share.
Threats Weaknesses
• COVID-19 pandemic. • Credit concentration.
• Single Digit Interest Rate. • Lack of full-automation in respect of different
• Entry of new banks. in-house report generation
• Lack of stability in the capital market. • Poor recovery from Non-performing loan
• Cyber security.
• Exchange rate fluctuation

BUSINESS
MODEL
VISION, MISSION & VALUES
CAPITAL VALUE CREATION

INPUTS PROCESS STAKEHOLDERS
STRATEGY
ECONOMIC IMPACTS
FINANCIAL
CAPITAL
OUTCOMES
HUMAN
CAPITAL
CAPITAL TRANSFORMATION
SOCIAL IMPACTS
INSTITUTIONAL
CAPITAL CORE
BUSINESS
OPERATIONS
INTELLECTUAL
CAPITAL OUTPUTS
SOCIAL & ENVIRONMENTAL

RELATIONSHIP
CAPITAL
IMPACTS
CORPORATE
GOVERNANCE & RISK
NATURAL
CAPITAL MANAGEMENT
STRATEGIC IMPERATIVES
DIGITAL
ENSURING TRANSFORMATION
A YEAR OF CUSTOMER OPERATIONAL
ASSET IN THE CONTEXT
CONSOLIDATION CENTRICITY EXCELLENCE
QUALITY OF STATE OF
ART TECHNOLOGY

VALUE CREATION
ACTIVITIES
Indicator for
Capital 2019
Value Derived
Shareholders Fund BDT 20,908.29 million

Borrowings from other banks,
financial institutions and agents BDT 20,623.05 million
Financial Capital Subordinated Bond BDT 4,200.00 million
Deposits and other Accounts BDT 247,624.47 million
Number of employee 2,418

Number of New Recruits 201
Salaries and allowances
including MD & CEO BDT 2,429.44 million
Human Capital Profit per Employee BDT 3.04 million
% of return to Job after
availing maternity leave 100%
Branch net work 148

Number of ATMs 181
Number of CDM 20
Institutional Capital
Number of Agent Banking Outlets 1
Number of Training Courses 154

Training Expenses BDT 8.35 million
Financial support for
Intellectual Capital COVID-19 infected employees -
Community Investment BDT 156.77 million

Payment to Suppliers BDT 265.78 million
Payment to Government Exchequer BDT 5,209.27 million
Social and network
Capital
Resources Consumption
(Lighting, gas & water) BDT 102.59 million
Printing & Stationery Expenses BDT 94.50 million
Computer Expenses BDT 95.50 million
Natural Capital Nursery & Plantation BDT 1.70 million
Activities undertaken to Create 2020

Increasing business volumes prudently through robust and
efficient financial intermediation and maturity transformation, BDT 38,071.69 million
thereby strengthening the leadership position. BDT 3,600 million
2,428
Enriching career development 72
Reinforcing performance management and appraisals BDT 3,043.93 million
BDT 1.63 million
100%
150
Optimum amount of investment in capital expenditure 185
20
101
93
BDT 1.41 million
Arranging right training program for employee development
BDT 15 million
Pursuing Sustainable Development Goals (SDGs) for Community BDT 303.41 million
Welfare BDT 254.78 million
BDT 94.57 million

Reducing paper consumption and recycling
BDT 104.88 million
Increasing usage of renewable energy
BDT 81.59 million
Switching to energy-efficient appliances.
BDT 1.26 million
Risk Management Report
BOARD RISK MANAGEMENT COMMITTEE

(BRMC) REPORT
The Risk Management Committee (RMC) of the Board of Directors of the Bank oversees
the overall risk management atmosphere to ensure sound risk management of
the Bank. The objective of this committee is to reduce probable risk arising during
implementation of policies & strategies. One of the key functions of the committee
is to supervise the overall risk management activities of the Bank in view to ensure
establishing appropriate risk management culture into the Bank.
Composition of Risk Management Committee
As per Bank Company Act 1991 (Amendment up to 2018) and Bangladesh Bank’s BRPD Circular no. 11, dated 27 October
2013, Bank reformed the ‘Risk Management Committee of the Board of Directors’. As on 31.12.2020 the composition of
Risk Management Committee is as follows:
SL No. Name Status with Bank Status with RMC
1. Mr. Md. Anwarul Haque Director Chairman
2. Al-Haj Akram Hossain (Humayun) Director Member
3. Mr. Md. Nasiruddin Choudhury Director Member
4. Mr. M. A. Khan Belal Director Member
Participation of Non-Member •• Ensuring compliance of BB instructions regarding

implementation of core risk management;
The Managing Director & CEO and Additional Managing
Director & CRO of the Bank attend the meetings of RMC •• Ensuring formulation and review of risk appetite as
of the Bank along with other pertinent members of the well as its’ limits and recommending those to the
management as desired by the committee. Board of Directors for their review and approval;
Roles and Responsibilities of the Committee

•• Approving adequate record keeping, reporting
system and ensuring the appropriate usage;
Terms of reference for ‘Board Risk Management
•• Holding at least 4 meetings in a year (preferably once
Committee (BRMC)’ are guided by Risk Management
in every quarter) and more, if necessary;
Guidelines and associated latest circulars of Bangladesh
Bank. Key roles and responsibilities of BRMC of MBL are •• Analyzing all existing and probable risk issues in
enumerated below- the meeting, taking appropriate decisions for risk
mitigation, incorporating the same in the meeting
•• Formulating and reviewing (at least annually) risk
minutes and ensuring follow up of the decisions for
management policies and strategies for sound risk
management of the Bank; proper implementation;
•• Monitoring implementation of risk management •• Submitting proposal, suggestions & summary of

policies & process to ensure effective prevention and BRMC meetings to the Board of Directors at least on
control measures; quarterly basis;
•• Ensuring construction of adequate organizational •• Complying the instructions issued from time to time
structure for managing risks within the Bank; by the regulatory bodies;
•• Supervising the activities of Executive Risk •• Ensuring appropriate knowledge, experience, and
Management Committee (ERMC) of Mercantile Bank expertise of lower-level managers and staff involved
Limited; in risk management;

•• Ensuring sufficient & efficient staff resources for Risk •• Assessing overall effectiveness of risk management
Management Division; functions of the Bank on yearly basis.
•• Establishing standards of ethics and integrity for staff
and enforcing these standards;
Meetings of the Committee held during the year 2020
Five meetings of the Risk Management Committee of the Board of Directors were held during the year 2020, details of
which are as follows:
Meeting no. & Date Focused Points
Detail information regarding ‘Risk Management Report’ as of November 2019 of the Bank was
placed before the committee & risk issues were categorically analyzed by the members and
advised management to take initiatives for risk mitigation in few cases.
Environment & Social Risk Management (ESRM) Guideline of MBL was placed before the BRMC.
The committee acknowledged the guideline and advised to place the same before the Board of
32nd RMC meeting Directors (BoD) for final approval.
held on 16 January
2020 Quarterly report of restructured syndicated Term Loan liability of Jamuna Builders Limited (Lead
arranger & Agent: Janata Bank Limited) for the quarter ended as on December 2019 was submitted
before the committee for their kind perusal.
Bank’s ‘Credit Policy (Revised-2020)’ was submitted for approval. The committee acknowledged
the changes & justification for changes made in the policy and advised to place before the Board
of Directors (BoD) after incorporating necessary amendments in some parts of the policy.
Meeting no. Focused Points
Information regarding ‘Stress Testing’ as of December 2019 was placed before the committee in
view to discuss the different shock absorbing capacity of the Bank & noted accordingly after detail
discussion.
33rd RMC meeting Detail information regarding ‘Comprehensive Risk Management Report’ as of December 2019 of
held on 8 March the Bank was placed before the committee & key risk issues were categorically analyzed by the
2020 members. The committee advised management to take initiatives for risk mitigation in few cases.
The ‘Risk Appetite Statement’ of the Bank for the year 2020 was submitted before the committee
for their kind perusal and approval. The committee acknowledged & advised to place the same
before the Board of Directors (BoD) for final approval.
Detail information regarding ‘Risk Management Report’ as of May 2020 of the Bank was placed
before the committee & risk issues were categorically analyzed by the members. The committee
advised management to take initiatives for risk mitigation in few cases.
Information regarding ‘Stress Testing’ as of March 2020 was placed before the committee in view
to discuss the different shock absorbing capacity of the Bank & noted accordingly after detail
34th RMC meeting discussion.
held on 27 July
Detail information regarding ‘Internal Capital Adequacy Assessment Process (ICAAP)’ documents,
2020
December 2019 under Supervisory Review Process (SRP) i.e. pillar 2 of Basel III was placed before
the committee & risk issues were categorically analyzed by the members. The committee advised
to place the same before the Board of Directors (BoD) for final approval.
Quarterly report of restructured syndicated Term Loan liability of Jamuna Builders
Limited (Lead arranger & Agent: Janata Bank Limited) for the quarter ended on June
2020 was submitted before the committee for their kind perusal.

Reformation of ‘Executive Risk Management Committee (ERMC)’ of the Bank was placed before
the committee & approved accordingly.
Information regarding ‘Comprehensive Risk Management Rating’ as of December 2019 was

placed before committee for information. The committee discussed various issues regarding
the rating elaborately.
Information regarding ‘Comprehensive Risk Management Report’ as of June 2020 of the Bank was
placed before the committee & key risk issues were categorically analyzed by the members. The
committee advised management to take initiatives for risk mitigation in few cases.
Detail information regarding ‘Risk Management Report’ as of August 2020 of the Bank was
35th RMC meeting
held on 27 October placed before the committee & risk issues were categorically analyzed by the members.
2020 The committee advised management to take initiatives for risk mitigation in few cases.
Information regarding ‘Stress Testing’ as of June 2020 was placed before the committee
in view to discuss the different shock absorbing capacity of the Bank.
Quarterly report of restructured syndicated Term Loan liability of Jamuna Builders

Limited (Lead arranger & Agent: Janata Bank Limited) for the quarter ended on
September 2020 was submitted before the committee for their kind perusal. The
committee advised to place before the next meeting of Board of Directors (BoD).
The ‘Revised Risk Appetite Statement’ of the Bank for the year 2020 was submitted
before the committee for their kind perusal and approval. The committee
acknowledged & advised to place the same before the Board of Directors (BoD).
Information regarding Stress Testing as of September-2020 was placed before the committee
in view to discuss the different shock absorbing capacity of the Bank & noted accordingly after
detail discussion.
Detail information regarding Risk Management Report-September’2020, October‘2020

36th RMC meeting and November’2020 of the Bank were placed before the committee & risk issues were
held on 23 categorically analyzed by the members. The committee advised management to take
December 2020 initiatives for risk mitigation.
Special Inspection Report on Supervisory Review Evaluation Process (SREP) of Bangladesh Bank
on Internal Capital Adequacy Assessment Process (ICAAP) documents of the Bank as of 31/12/2019
was placed before the committee and after critical analysis of the aforesaid report, the committee
urged to improve the Core Risk Rating as well as advised to ensure compliance of Bangladesh
Bank’s recommendation.
Md. Anwarul Haque

Chairman
Risk Management Committee

CHIEF RISK OFFICER’S REVIEW
ON RISK MANAGEMENT
Mati Ul Hasan
Additional Managing Director and
Chief Risk Officer (CRO)

Globalizations of financial markets, shifting of business

model, development of technology, and Covid-19
Effective Risk pandemic are enhancing the frequency and complexity
of risks inherent in banking activities. These factors are
Management affecting business environment quite frequently which
are exposing banking industries to new risk. Moreover,
empowers a Bank during the pandemic, the competition among the banks
has increased and new services & technology platform
with the essential have been introduced. As a result, risk in the banking
industry has increased remarkably as compared to
tools to identify and earlier time. Now it is indispensable to ensure effective

risk management practice within the Bank to conduct
mitigate potential
business successfully and to maintain financial stability in
the banking sector.
risks. Besides, it In 2020, Covid-19 unexpectedly ranked top of list and the
global economy including Bangladesh has been affected
provides a Bank with due to this outbreak. Consequently, the banking sector
throughout the world underwent a vulnerable situation.
a basis upon which it Overall business operation and profitability of the bank
have been adversely affected. The resulting lockdowns
can undertake sound in multiple countries caused serious disruption in Export
and Import business. Investment appetite in business
decision-making. sector showed negative trend and this scenario would be
continued in current year also.
Otherwise, absence In 2021, our top most challenges shall be to maintain

healthy capital, to maintain quality asset portfolio, to
of risk management, increase non-interest earning businesses, and to avail low
cost & no cost deposits so that the cost of funds could
Banks would face be reduced. And the desired spread can be achieved to
make healthy profit growth. We address this year as ‘Year
losses. of Recovery and Compliance’.
To face the on-going challenges Bank has adopted

several prudential measures on risk management.
The core concept of our risk management is to
ensure profitability and safety of the Bank. Our risk
management approach includes minimizing undue
concentrations of exposure; limiting potential losses
from unusual events and ensuring the sustainable
growth of profitability. In addition, we kept our special
attention on credit risk, market risk and operational risk
during this pandemic situation.

Bank has a well-structured risk management model which is based on three lines
of defense that are independent of each other. Each line of defense is executed by
different organizational units.
The Board and Senior Management regularly review the challenge in all aspect of banking activities like
and monitor the risk profile of the Bank. They always previous year. Bank’s risk management activities will
take strategic decisions emphasizing good corporate centre on managing default risk prudently and managing
governance to protect the interests of the Shareholders asset-liability efficiently to achieve its target under
and other Stakeholders. To protect our profit growth, challenging business environment. Among other areas of
we are focusing to reduce cost of deposit and cost of risk, we will extend our main focus on addressing credit
operation. We introduced task force for NPL management. risk, operational risk, NPL management, technological
Last year, we maintained a healthy capital position in line innovation, regulatory compliance, etc.
with Basel III.
We are prepared to face the upcoming banking
We are committed to help the government to tackle the challenges to ensure sustainability in 2021. We expect
pandemic and build resilience. We provided loans and growth in our business and profitability. We are focusing
advances under financial stimulus packages declared by on rationalizing the deposit mix to reduce cost of deposit.
government; Refinance Scheme for Pre-Shipment Credit; At the same time we will focus on recovery to reduce
Refinance scheme for providing working capital loan in loan loss provisions. To attract new generation clients
large industrial and service sector; and Special Working we introduced digital banking. This year, we will expand
Capital facility for CMSME sector under Financial Incentive our network through Islamic Banking Window, Mobile
package to mitigate negative impact of COVID-19 on Banking, Agent Banking, and Sub-Branch to include the
economy. To mitigate HR risk during the pandemic, bank unbanked people under one umbrella of MBL family. We
accepted policies such as work at home, rotational duty, will boost up the awareness among the employees on
Quarantine leave. AML & CFT issues and overall Risk Management practice
within the Bank. The main focus in 2021 is to help Bank
Bank is strengthening its foothold, both in terms of state in achieving its objectives by proper risk management
of art technology and customer centric products. We are within the Bank. We must place out Bank’s position at
upgrading our Core Banking Solutions (CBS) Temenos honourable level for our clients, economy and society.
T-24 to version R-19 which ensures real time integrated
banking services. To manage cyber security, Bank formats
an ICT Security Unit. We established Tier 3 data centre
(redundant and dual-powered servers).
Outlook 2021
-----------------------------------------
In 2021, the global economy will continue to be volatile Mati Ul Hasan
and under stress due to ongoing pandemic situation. Additional Managing Director and
Consequently, banking industry in Bangladesh will face Chief Risk Officer (CRO)

RISK MANAGEMENT
REPORT
Strengthening Risk Management Environment of MBL in 2020
MBL continuously developing the overall risk management existing guidelines; introduce new risk management
sphere keeping in mind the ever changing external and tools; awareness building; adoption of new technology
internal obligations and requirements. We believe that, etc. are part of it. Some of these elements we aimed to
it should be an ongoing process in the organization. strengthen the Risk Management Environment in 2020:
Modifying our risk management framework by reviewing
Issued a guideline for Reviewed & Updated Reviewed ‘Risk Appetite Initiative taken to issue
‘Prevention of Trade the ‘Credit Policy’ of the Statement’ & internal limit ‘Perpetual Bond of
Based Money Laundering’ Bank for better credit for different credit, market BDT 700.00 crore’ and
‘Subordinated Bond of
risk management in line and operation indicators BDT 500.00 crore’ to
with organization goal & considering the impact of strengthen the Capital
regulatory compliance COVID-19 pandemic base of the Bank
Introduced paperless Initiation of online ‘Risk Arranged different Incorporated ‘Risk

e-KYC system for Digital Management Reporting training programs and Register’ with Board
Onboarding in view portal’ for accuracy & knowledge sharing approved Management
to reduce fraud and timely reporting and in view to achieve Action Trigger (MAT)
operational excellence real-time monitoring risk competencies in
different areas of Risk
issues
Management
MBL Risk Management Strategy
MBL’s vision ‘would make finest corporate citizen’ management in executing the overall strategic
underlines our cooperative roots and emphasizes business plan. The Risk Management Strategy
our dedication to satisfy our stakeholders. The focuses on the following objectives:
Risk Management strategy is to support the
Support current Ensure Helps to achieve Protect MBL’s Make healthy

business model profitability and solid Balance identity & risk-return
growth Sheet reputation decisions in line
with strategic
objectives
Figure: Risk Management Strategy of MBL

MBL Risk Management Process
We in MBL navigate the risk management process in managers instinctively look for risks and be aware of the
holistic approach rather a separate isolated operation. It impact while making any decision. It should contain:
is definitely dynamic in nature and should operate in full
•• Risk Awareness
swing in view to get the result-oriented risk management
process. Thus our process must be pragmatic and •• Risk Identification
verified across all parts of the Bank. We continuously •• Risk Measure
thrive to build a sound risk culture where every risk
•• Assign Risk Manager for Accountability
Communication Consolation & Identification of Assessing of Risks Measurement &

regarding Risk Establishment of Key Risks Treatment of Risks
Issues
Risk Areas
Review of Risks
Figure: MBL Risk Management Process
MBL Risk Management Framework

We have developed the framework to be more prudent with a holistic view to embrace all risks guided by the
and forward-looking which follows the functional operational guidelines and directives of the regulators.
hierarchy to govern and establish controlled environment. The framework is rigid in nature but flexible in functionality
Our Risk Management Framework is multidimensional to confirm that, the Bank has a robust streamlined risk
and considered as an integral part of the organizational assessment and escalation process in place. Developing
structure. The framework allows to build a strong risk policies, processes and methodologies are the key
culture from the strategic level to operational level. To be here to promote a risk-conscious culture and enable
a vigilant, risk mitigating bank, MBL built this framework sustainability.
Board Risk Management Committee- Strategic Level
Executing Risk Management Committee-

Management Level
Risk
Governance
Risk Management Division & Risk Manager-
Risk
Appetite Operational Level
Key Risk Risk

Indicators & Measurement, Risk Based
Risk Core Risk Mitigation Monitoring & Audit
Culture Management Tools Reporting
Figure: MBL Risk Management Framework

Risk Governance
Risk governance refers to the institutions, rules, dimension is where the board has regular involvement
conventions, processes and mechanisms by which in managing key risk issues, and risk management
decisions about risks are taken and implemented. It responsibilities are proportionate to the risks assumed at
covers the questions about what risk management a particular level or unit. It also analyses and formulates
responsibilities lie at what levels and the ways the board risk management strategies to avoid and/or reduce the
influences risk-related decisions; and the role, structure, human and economic costs caused by disasters.
and staffing of risk organization. A good practice in this
MBL Risk governance follows a three-lines-of-defense model
Business and operation units of the institution have in place effective processes to identify,
assess, measure, monitor, mitigate, and report on their risks
First Line of
Defense Each unit operates in accordance with the risk policies and delegated mandates
Appropriate Internal Control framework put in place to ensure effective and efficient operations,
including: adequate control of risks; prudent conduct of business; reliability of financial and
non-financial information reported or disclosed (both internally and externally) and compliance
Second Line of
Defense with laws, regulations, supervisory requirements, and the institution’s internal policies and
procedures
Bank’s internal audit which performs independent periodic reviews of the first two lines of
defense, provides assurance and informs strengths and potential weaknesses of the two first
Third Line of
Defense lines
In the first line of defense the units are responsible for function and compliance function, and should cover the
having skills, operating procedures, systems, and controls whole organization, including the activities of all business,
in place to ensure their compliance with risk policies and support, and control units. The risk management unit,
mandates. headed by a Chief Risk Officer has the responsibility for
recommending and monitoring the bank’s risk appetite
In the same manner, the second line of defense has and policies, and for following up and reporting on risk
Internal Control framework that encompasses risk control related issues across all risk types.
Risk Management Committees
Committee Objectives Represented by

BRMC •• Formulating and reviewing (at least annually) Chairman: Mr. Md. Anwarul Haque
risk management policies and strategies for
sound risk management; Members: Al-Haj Akram Hossain (Humayun),
Mr. Md. Nasiruddin Choudhury and
•• Monitoring implementation of risk Mr. M. A. Khan Belal
management policies & process to ensure
effective prevention and control measures;
•• Ensuring construction of adequate
organizational structure for managing risks
within the bank;

Committee Objectives Represented by
ERMC •• Identifying, measuring and managing Bank’s Chairman: Chief Risk Officer (CRO)
existing and potential risks;
Members: Deputy Chief Risk Officer, Chief
•• Reviewing risks involved in new products Financial Officer, Head of ICCD, SAMD, ITD,
and activities; Treasury Division, CBD, CAD, R&P Division, CRMD,
•• Implementing the decisions of BRMC and MISD, SME Financing Division, AML& CFT Division,
board; GBD and ID
•• Determining risk appetite, limits in line with

strategic planning;
SRP Team Implementation of SRP of the Bank Chairman: Managing Director
Members: Additional Managing Director, Deputy

Chief Risk Officer, Chief Financial Officer, Head of
CBD, ID, ITD, ICCD, CRMD, Treasury Division, AML
and CFT Division, SAM Division, SME Financing
Division and MIS Division
BASEL Implementation of Basel Accord in Bank Chairman: Additional Managing Director & CRO
Implementation
Unit Members: Deputy Chief Risk Officer, Chief
Financial Officer, Head of ICCD, ITD, Treasury
Division, CRMD and ID
Responsibilities of Board Risk Management •• Holding monthly meetings on risk report;

Committee (BRMC)-Strategic Level: •• Take Steps for risk mitigation and follow up the same;
•• Formulating and reviewing risk management policies •• Submission of proposals, suggestions and summary
and strategies; of ERMC to MD & CEO;
•• Monitoring implementation of risk management •• Implement the decision of Board of Directors &
policies & process; BRMC regarding risk management;
•• Ensuring construction of adequate organizational •• Assess the requirement of adequate capital in line
structure; with the risk exposure;
•• Supervising the activities of Executive Risk •• Establish risk appetite limit in accordance with the
Management Committee (ERMC); bank’s strategic target;
•• Ensuring compliance of BB instructions regarding •• Formulation of risk policies, process & methodology;
implementation of core risk management; •• Arrangement of Annual Risk Conference.
•• Ensuring formulation and review of risk appetite,
limits and recommending these to Board of Directors Functions of Risk Management Division & Risk
for their review and approval; Manager-Operational Level:
•• Analyzing all existing and probable risk issues, •• Updating & Upgrading Risk Manage Systems of the
taking appropriate decisions for risk mitigation, Bank;
incorporating the same and ensuring follow up; •• Risk Identification, record in the risk register and
•• Complying with instructions issued from time to time assign risk manager;
by the regulatory body; •• Mitigation process of various risks and their
•• Ensuring sufficient & efficient staff resources for RMD; supervision;
•• Establishing standards of ethics and integrity for staff •• Timely reporting to regulatory authorities, BRMC,
and enforcing these standards. ERMC & SRP Team;
•• Hold Meeting as per regulatory requirement;
Responsibilities of Executive Risk Management
Committee (ERMC)-Management Level: •• Establish intra-bank & inter-bank effective
communication & liaison in view to achieve industry-
•• Identify, measure and manage bank’s existing and best-practice.
any risk may evolve in future;

Risk Culture Management in different seminars focusing on to

gain hand-full experiences and up to date industry
The overall Risk Management framework is highly practices.
influenced by the tone set by the Bank. It is the Risk
Culture that nurture in every sphere of MBL. The Risk •• Centralized Decision Making: The Executive Risk
Culture of MBL stands on: Management Committee is held responsible for the
review, approval and monitoring of transactions and
•• Pronouncement from Top: Unambiguous and the related risk exposures. The committee includes
steady directives from the leaders on risk behavior the business line heads and senior risk officers in this
expectations and the importance of MBL’ values. process for ensuring effectiveness.
•• Accountability: All MBL employees in every business
Risk Appetite
function are held accountable for risk ownership and
their actions in accordance with the Three Lines of MBL has formulated its Risk Appetite framework which
Defense structure. includes Risk Appetite, Risk Tolerance, Risk Limit and it’s
•• Reporting: Every single Risk Meters and thresholds measures. Application of such held to ensure the Bank
are monitored on a regular intervals as well as stays within the appropriate risk borders. MBL considered
maintaining online & real-time reporting dashboard it as a practice where risk capital is allocated effectively
which disseminate as per the requirement of and risk limits are set as per the strategic point of view.
regulatory authorities and Board & Executive Risk The Risk Appetite of Bank has prepared & reviewed
Management Committee of the Bank. by the Executive Risk Management Committee and
consequently approved by the BRMC & Board of Directors
•• Training: In view to reinforce the Risk Culture, MBL of the Bank. MBL reviewed this statement twice in 2020 in
provides effective and engaging training session response to the impact of COVID-19 pandemic.
for all levels of employees. Participation of Top
Risk
Tolerance
Risk appetite is the level Risk tolerance is the Ceiling of risk exposure
and type of risk bank is able acceptable range of Bank is willing to accept
and willing to assume in variation around the
its exposures and business risk appetite
activities
Risk Risk
Appetite Limit
Risk Appetite:
Risk Appetite Criteria Appetite Position 2020

Credit Risk
Top-20 borrower-wise credit concentration funded in % of total loans and advances 17.31% 17.92%
Gross NPL to total loans(%) 3.72% 4.72%
Recovery against classified loan(%) 18.78% 4.17%
Overdue export bills (payable and receivable) to total loans(%) 1.20% 0.44%
Rescheduled loans to total loans(%) 2.46% 0.69%
Restructured loans to total loans(%) 2.19% 2.75%
Written off loan to total NPLs(%) 5.16% 8.81%

Risk Appetite Criteria Appetite Position 2020
Market Risk
Impact on net interest income(NII) due to 1% adverse change in interest rate(In Million) (435) (379)
Exchange rate shock to operating income(In Million) 136 22
Liquidity Risk
Top-10 deposit suppliers to total deposit (%) 17.50% 14.93%
Commitment limit (In Million) 155,000 147,866
Operational Risk
Expected operational loss as % of operating income 0.00% 0.00%
Capital Management
CRAR 13.00% 13.61%
CRAR after combined minor shock 10.25% 10.78%
CRAR after combined minor credit shock 11.00% 11.13%
Core Risks & its Management

Banking is a risk bearing industry and there are numerous disasters etc. Identification, measurement &mitigation of
risks in its day to day activities. Risks can come from risks and acquiring strength to cover these risks are the
various sources including uncertainty in national mandatory issues to be maintained in the Bank. Various
&international markets, threats from project failures, risks and their mitigation technique and monitoring
liquidity crisis, legal liabilities, operational default, ICT mechanism are as follows:
risk, AML & CFT issues, natural crisis and environmental
Credit Risk Market Risk Liquidity Risk
Operational Risk ICC Risk AML Risk
ICT Risk HR Risk Environmental &

Climate Change Risk

Credit Risk Liquidity Risk
Generally ‘Loans and Advances’ are the largest and Liquidity risk refers to the ability of a bank to access cash
most obvious source of credit risk. It may arise from to meet funding obligations. This occurs when a bank
either an inability or an unwillingness of the borrower has many short term liabilities and not enough short-term
to pay in the pre-committed contracted manner. It assets. Obligations include allowing customers to take
refers to the risk that a lender may not receive the out their deposits. If a bank delays providing cash for a
owed principal and interest, which results in an few of their customer for a day, other depositors may rush
interruption of cash flows and increased costs for to take out their deposits as they lose confidence in the
collection. Moreover, Bank has to maintain provision bank. This further lowers the bank’s ability to provide funds
and capital against credit risk that affects the and leads to a bank run. The main objective of managing
profitability of the Bank. liquidity risk is to maintain sufficient liquid assets.
Moreover during Covid-19 pandemic, capital and liquidity
Due to Covid-19 pandemic quickly spread across become scarce. It becomes very important to deploy
the world, most of the business industries’ growth capital to the most productive business line. The reliability
in Bangladesh were highly impacted such oil & gas, and accuracy of ratio such as LCR, NSFR, Leverage, CRAR
aviation, hotels, retail, RMG, transportation, food and are crucial to capital and liquidity deployment decisions
beverage etc. Consequently, the business, asset quality of the management.
and profitability of the Bank had also been affected. In
MBL, Credit risk is managed through a framework set Operational Risk
by credit policies and procedures established by the
Board of Directors in line with BB guidelines. The credit Operational risk is a broad concept which focuses on the
policy clearly outlined the bank’s view of business risks arising from the people, technology and processes
development priorities and the terms & conditions through which a company operates. It is defined as the
that should be applicable for credits to be approved. risk of unexpected losses due to physical catastrophe,
We uses a wide range of credit mitigation techniques technical failure and human error in the operation of a
in order to reduce specific counterparty credit risk, bank, including fraud, failure of management, internal
such as Risk Appetite, Management Action Trigger process errors and unforeseeable external events.
(MAT), Single borrower exposure limit, Environmental Failure to properly manage operational risk can result in
risk rating, Collateral security coverage, Stress testing, a misstatement of a bank’s risk profile and expose the
Transition matrix etc. bank to significant losses. Operational risks are actively
managed and controlled by policies, procedures, limits
Market Risk and controls including areas such as Legal, Compliance,
IT, Information Security, business continuity plan and
Market risk is defined as the risk of loses from adverse sustainability.
movements in market price. Market risks include Interest
Rate Risk, Foreign Exchange Risk and Equity Risk. Increasing Internal Control and Compliance (ICC) Risk
the Market risks, increase the capital requirement of the
Bank. Moreover, it affects the profitability of the Bank. Effective ICC system has become essential in order to
Last year, bank is negatively affected as traded financial boost effective risk management practices and to ensure
instrument has lost value, resulting in further losses for smooth performance of the bank. It involves everything
bank due to Covid-19 crisis. that controls risks to a Bank. Internal control is defined
as an accounting and auditing process for assuring
•• Interest Rate Risk arises due to changes in market achievement of an organization’s objectives in operational
interest rates. Interest rate risk management effectiveness &efficiency, reliable financial reporting,
strategies of the Bank include Market Trend Analysis, and compliance with laws, regulations and policies.
Interest Rate Sensitivity Analysis, and Gap Analysis. Compliance risk refers to the current or prospective risk
•• Foreign Exchange Rate Risk arises from the potential to earnings and capital arising from violations or non-
change in earnings resulted from exchange rate compliance with laws, rules, regulations, agreements,
fluctuations, adverse exchange positioning/ prescribed practices, or ethical standards. In order to
holding and market volatility. All foreign exchange mitigate ICC risk, our ‘Internal Control and Compliance
transactions are revaluation at Mark-to-Market basis Division comprises of three units as per guidelines of BB
in conformity with BB Guidelines. such as Audit Unit, Compliance Unit and Monitoring Unit.
•• Equity risk is defined as losses due to changes in Money Laundering Risk

market price of equity held by the bank. To measure
and identify the risk, mark to market valuations of the Money Laundering (ML) is one of the immense risks in the
share investment portfolios are made. To mitigate banking institutions. It has a major impact on a country’s
equity risk, our Investment Policy also emphasizes on economy as a whole hampering the social, economic,
portfolio diversification. political, and cultural development of a society. We

consider Money Laundering and Terrorist Financing Risk their responsibilities and thus keep the business from
not only a compliance requirement of the regulatory operating at full efficiency. It involves risks around
bodies but also as one of its core business values. The improper employee management; employee behavior;
Board of Directors and the Management of the Bank are theft, sabotage or fraud-forgery; unexpected temporary
firmly committed to combat Money Laundering activities. leave; poor employee management practices; death
Our ML activities are being undertaken to ensure that we & disability of the employee; employee turnover etc.
meet all regulatory standards. Last year, Bank introduced To mitigate HR risk during the Covid-19 pandemic, the
a guideline for prevention of ‘Trade Based Money bank accepted policies work at home, rotational duty,
Laundering’ approved by the Board of directors. To Quarantine leave and financial support to Covid-19
increase the efficiency and effectiveness of the officers affected employees. Generally, we consider the following
on AML & CFT issue, we have been arranged training issue to reduce the HR risk of the Bank:
program and total 961 officials have been trained.
•• Assessing Risks
Information and Communication Technology •• Workforce planning
(ICT) Risk
•• Proper hiring practices
ICT risk consists of Information and Communication •• Succession planning
Technology related events and conditions that could
potentially impact the business. It can occur with •• Job rotation
both uncertain frequency & magnitude and it creates •• Ethics and behavior of the Employee
challenges in meeting strategic goals & objectives.
Day by day the banking industry has changed the way •• Training & development
of providing services to their customers and ICT has
MBL Risk Management Tools:
brought this momentous transformation. Overall banking
industries are becoming more vulnerable to cyber threats •• Guidelines: MBL has a full-fledged guidelines duly
due to the increasing reliance on computers, networks, approved by the Board of Directors of the Bank
programs and data globally. Mercantile Bank is in good and considered to be one of the key tool for risk
position and always vigilant to protect the customers’ trust management of the Bank. It ensure the Bank has
placed on us by strengthening cyber security measures. appropriate knowledge of every single risk issues
Bank procured and implemented state of the art and state the measurement and mitigation way out.
technology in its data centre and Disaster Recovery Site. It is reviewed periodically and approved by the Board
The network system of the Bank has been reconfigured of Directors of the Bank.
with latest technologies for highest availability, efficiency
and security.
•• Process: The approved activities and functions in
response to identifying, assessing, documenting,
Environmental and Climate Change Risk recording, reporting, controlling of core risks.
•• Standards: MBL adopts industry best practice and
Environmental and Climate change Risk refers to the
formulate basis in respect of approved guidelines
uncertainty or probability of losses that originates from
and policies under the purview of Risk Management
any adverse environmental or climate change events
Division.
(natural or manmade)and/or the non-compliance of the
prevailing national environmental regulations. This risk •• Policies: MBL introduce industry best practice and
can hamper the business stability of the borrowers in regulatory requirement in the same place while
respect of both- i) profitability and ii) reputation. We are formulating policies & procedures. It is guided by
always vigilant to manage Environmental and Climate the limit set in the risk appetite and controlled by the
change risks. Bank has Board approved ‘Environmental approved guidelines of the Bank. Different manuals
and Social Risk Management’ guidelines. To evaluate and management level policies are reviewed by
these risks, we use sector Environmental Due Diligence ERMC or other key risk committees and approved by
(EDD) check list specified in Guidelines on Environmental Board of Directors of the Bank.
Risk Management (ERM) issued by BB.
•• Stress Testing: Stress Testing is a risk management
Human Resources (HR) Risk technique used to evaluate the potential effects on
an institution’s financial condition based on a set
Bank is service oriented organization where human of assumptions that measures how much capital is
intervention is essential for service delivery effectively needed to absorb any losses in different stressed
and efficiently and duly. HR risks are arises from fulfilling situations.

Risk Heat Map of MBL and environmental risks are addressed without delay to
avoid severe impact. The following Heat Map is helpful
We critically analyze the major and plausible risk issues
for risk managers and concerned committees to get a
faced by MBL throughout the year and based on that-we
glimpse on our position and make the plan accordingly.
position a total number of 11 risks which have 27 specific
It is to be noted here that, the Risk Heat Map is reviewed
risks. In MBL, we strive to lessen the impact by the way of
periodically by Risk Management Division.
applying enhanced due diligence. Unprecedented events
Sl. Risk Category Specific Risk Risk Position

Default Risk Critical
1 Credit Risk Recovery Risk Medium
Concentration Risk High
Funding Liquidity Risk Low
2 Liquidity Risk
Market Liquidity Risk Medium
Interest rate shock Medium
3 Market Risk
Equity shock Low
People Risk High
Process Risk Low
4 Operation Risk
System Risk Medium
External Risk High
Quality of Customer Service Medium
5 Reputation Risk Penalty or fine Low
Negative media report Low
Documentation Error High
6 Residual Risk
Valuation Error Medium
Un-responded entries Medium
7 Settlement Risk
Non-repatriation Medium
Strategy Positioning Risk Low
8 Strategic Risk
Implementation Risk Low
System Failure Risk Medium
9 Technology Risk Information Security Risk High
Business Continuity Risk Low
Compliance Risk High
10 Legal Risk
AML/CFT Risk Medium
Environmental Risk Rating (ERR) Medium
11 Env. & Social Risk
Social Risk Medium
Risk Heat-Map
Risk Positioning in Heat Map
Number of risks per each impact/likelihood scenario
Severe 2 1 Critical 4% 1
Major 3 3 1 1 High 22% 6
Impact Moderate 3 3 3 1 Medium 44% 12
Minor 2 1 2 1 Low 30% 8
Insignificant Total 100% 27

Almost
Rare Unlikely Possible Likely
Certain
Likelihood

Risk Measurement & Monitoring the Bank’s risk exposure, health and the performance of
the portfolios whether in line with approved limit or not.
MBL uses different models for different purposes which
includes tracking of transaction or event, estimate Risk Based Audit
the value, measuring the risk exposure, determine
•• MBL adopts Risk Based Audit (RBA) side by side of
the risk rating and set parameters for risk issues. For
the general internal audit throughout the year.
quantifications, MBL uses different risk mythologies
(VAR, Gap Analysis, Duration Analysis, HHI, Gini, SEI, SI, •• MBL considers RBA as an effective tool for sound risk
Sensitivity Analysis, Industry outlook etc.) which is in line management practice within the Bank.
with the risk management framework and includes sound •• RBA assist the Risk Managers of the Bank to align and
risk measurement and judgment. re-align their functions as per the risk management
plan of the Bank.
MBL incessantly monitors the business activities
in contrast with the approved limit and raise flag Way Forward for better risk management
accordingly where necessary. The issues are monitored environment:
and communicated with the ERMC, SRP Team and BRMC
periodically. For effectiveness, MBL has formulated a •• Formulation of term based strategies on specific
new online Risk MIS for monitoring, establish control and goal and agenda
measurement to provide timely generation of reports •• Close supervision of core risk issues and raise risk
on financial condition, operating performance and risk flag on time
exposure of the Bank.
•• Assign Risk Manager as per approved Risk Appetite
Risk Reporting Statement
In accordance with the requirement of regulatory

•• Initiation of real-time digitized platform for monitoring
of risk limit
compliance and meet up internal consumption MBL
caters diverse reports through different statements and •• Contribute to the bottom-line of the Bank by the way
reports. These reports provide a clear projection about of providing risk adjusted result
the portfolios and risk profile of the Bank. ERMC, SRP
•• Managing dashboard for SMT, ERMC & BRMC for
Team ALCO & BRMC use these information to understand
review of Risk Appetite & Core Risk Management.
Disclosure of Stress Testing Report
Changes Changes Changes

CRAR CRAR CRAR
in CRAR in CRAR in CRAR
Individual Shocks after after after
(Minor (Moderate (Major
Shock (%) Shock (%) Shock (%)
Shock) Shock) Shock)
Performing loan directly downgraded to
-0.50 13.11 -1.52 12.09 -2.56 11.05
B/L :Sectoral Concentration 1
Performing loan directly downgraded to
-0.39 13.23 -1.17 12.44 -1.96 11.65
B/L :Sectoral Concentration 2
Increase in NPLs due to default of Top
-4.46 9.15 -7.57 6.04 -8.15 5.46
large loan borrowers
Negative Shift in NPLs categories -0.50 13.12 -1.08 12.53 -1.74 11.87
Decrease in the FSV of the Collateral -0.31 13.31 -0.62 13.00 -1.24 12.37
Increase in NPLs -1.67 11.95 -5.42 8.19 -10.27 3.34
Interest Rate -0.16 13.45 -0.33 13.28 -0.49 13.12
FEX : Currency Appreciation -0.01 13.61 -0.02 13.60 -0.02 13.59
Equity Shock -0.19 13.42 -0.38 13.23 -0.76 12.85
Combined Shock -2.83 10.78 -7.85 5.77 -14.54 -0.92

Outlook of MBL Risk Management Report-2020 under pillar-3 of BASEL-III illustrates other material risks
which have impact on earrings, capital, management
MBL periodically furnish Risk Management Reports for action plan and shareholder’s value.
the requirement of Bangladesh Bank and internal risk
management. The report is prepared monthly to record Credit Risk
81 risks related to Credit, Market, Operation, Liquidity,
MBL assess the credit portfolio in multidimensional
Reputation, Strategy and Human Resources. The report
view point to get the health result. An effective credit
submitted to Bangladesh Bank for all the months except
management process starts from credit application to
June & December within 30 days following the month- recovery works rigidly to be in line with risk appetite limit
end. A Comprehensive Risk Management Report (CRMR) of the Bank.
is submitted on June & December. ERMC review these
reports thoroughly and recommend action plans to the Credit Concentration
concerned division for risk-mitigation of identified risk
In view to assess the concentration of credit portfolio MBL,
issues and also follow-up the implementation status of
sector-wise exposure, geographical exposure, group wise
the same. The following issues are depicted here out of
exposure and Top borrower exposure are considered.
above risk related issues to get a quick view of MBL risk
Focusing on diversification of credit portfolio is key as it is
management outcome.
closely related to bank’s health and capital. MBL assesses
The subsequent report on Risk Based Capital-Requirement concentration risk in ICAAP document under Pillar-2.
Sector wise allocation of loans and advances of MBL BDT in Million

Particulars YTD'20 % YTD'19 %
Agriculture, Fishing, and Forestry 4,773 1.92% 3,988 1.68%
Industry Loan 159,081 63.89% 146,240 61.73%
Trade & Commerce 35,303 14.18% 36,649 15.47%
Construction 17,246 6.93% 16,086 6.79%
Transport 1,352 0.54% 1,217 0.51%
Consumer financing 7,644 3.07% 7,570 3.20%
Loans to financial institutions 10,393 4.17% 11,820 4.99%
Miscellaneous 13,202 5.31% 13,320 5.62%
Total 248,994 100% 236,890 100%
Geographical Concentration BDT in Million

Name of Area YTD'20 % YTD'19 %
Dhaka 184,911 74.26% 173,525 73.25%
Chattagram 40,046 16.08% 39,984 16.88%
Rajshahi 13,815 5.55% 13,705 5.79%
Sylhet 1,141 0.46% 1,151 0.49%
Khulna 2,195 0.88% 2,049 0.87%
Rangpur 3,785 1.52% 3,626 1.53%
Barisal 2,665 1.07% 2,468 1.04%
Mymensingh 436 0.18% 382 0.16%
Total 248,994 100% 236,890 100%
Top-20 borrower concentration

BDT in Million
Particulars YTD'20 YTD'19
Top-20 Borrower Funded Loan 44,614 37,696
% of Total Loans and advances 18% 16%

BDT In Million
Top-20 Borrower Funded Loan to Total Loan YTD'20 YTD'19
Status of classifications
18%
16% SMA 2,773 2,224
SS 1,229 1,295
DF 1,826 410
Bad and Loss 8,696 9,798
Total CL 11,751 11,503
Total loans and advances 248,994 236,890
NPL Ratio 4.72% 4.86%
2020 2019 Liquidity Risk
NPL Status of MBL Making the assumption of future need of fund is an

important aspect while measuring liquidity risk of the Bank.
NPL management is top priority for MBL as it has It has direct relationship with the bank’s reputation and
severe impact on profitability and capital management enable bank to make investment and/or advance decision
parameter. Continuous efforts are on-going side by side which secure profitability. Major liquidity risks are monitored
of different specific agendas throughout the year. MBL through assessing the Deposit Mix, Liquid Assets to short
Managed to curve down the ratio in the year 2020. term liabilities, Liquidity Coverage Ratio (LCR), Net Stable
Funding Ratio (NSFR), Advance Deposit Ratio etc.
Deposit Mix
BDT in Million
Category of deposits YTD'20 % YTD'19 %
Current Deposit 12,033 5% 8,900 4%
Short Term Deposit 33,350 14% 25,419 10%
Savings Deposit 27,578 11% 23,894 9%
Fixed Deposit 93,259 38% 116,339 46%
Scheme Deposit 60,746 25% 55,695 22%
Other deposit 18,322 7% 22,139 9%
Total Deposit 245,287 100% 252,386 100%
Category of Deposits Maintenance of CRR & SLR

BDT in Million
7% 5%
Particulars YTD'20 YTD'19
Total time and demand liabilities 262,744 246,223
25%
Required CRR 10,316 13,542
Maintained CRR 11,759 13,860
14% Excess/Shortfall of CRR 1,443 318
Required SLR 34,123 32,009
Maintained SLR 47,555 47,564
38% Excess/Shortfall of SLR 13,432 15,555
11%
LCR & NSFR

Current Deposit Short Term Deposit
BDT in Million
Savings Deposit Fixed Deposit Particulars YTD'20 YTD'19
Scheme Deposit Other Deposit Liquidity Coverage Ratio (LCR) 141.93% 149.43%
Net Stable Funding Ratio (NSFR) 106.66% 110.03%

REPORT ON
RISK BASED CAPITAL (BASEL III)
Basel III is a global, voluntary regulatory framework on Bank Capital adequacy, Stress testing and market liquidity
risk. It is intended to strengthen bank capital requirements by increasing bank liquidity and decreasing bank
leverage. Basel III addresses an internationally agreed set of measures developed by the Basel Committee on
Banking Supervision in response to the financial crisis of 2007-09. The measures aim to strengthen the regulation,
supervision and risk management within the banking industry. Mainly, it seeks to improve the banking sector’s
ability to deal with financial stress, improve risk management, and strengthen the banks’ transparency. The Basel III
principle stands on the following three pillars-
BASEL III
PILLAR-1 PILLAR-2 PILLAR-3
MINIMUM CAPITAL SUPERVISORY REVIEW MARKET

REQUIREMENT (MCR) PROCESS (SRP) DISCIPLINE
In line with International standard, Bangladesh Bank vides Disclosure Framework

its BRPD Circular no. 18 dated December 21, 2014 issued
‘Guidelines on Risk Based Capital Adequacy’ for Banking In accordance with the Bangladesh Bank directions,
sector in Bangladesh. Basel III is not merely a reporting Mercantile Bank developed a set of formal disclosure
system rather it is a risk management technique for framework approved by the Board of Directors of the
the Bank. Consequence the above Mercantile Bank has Bank which includes the ‘Qualitative and Quantitative
also put special attention to implement Basel III inside Disclosures’. The ‘Qualitative Disclosures’ will provide a
the Bank. In view of the above MBL has formed “Basel general summary of Bank’s risk management objectives
Implementation Unit” as per Bangladesh Bank guidelines and policies, reporting system and definitions. And the
which is under a supervisory committee includes top ‘Quantitative Disclosures’ are made on the basis of both
management of the Bank. Bank has also formed a Solo and Consolidated audited financial statements of
Supervisory Review Process (SRP) team to participate Mercantile Bank and its subsidiaries as at and for the
the dialogue with the Supervisory Review Evaluation year ended 31 December 2020.
Process (SREP) team of Bangladesh Bank for measuring
Timely and consistent implementation of Basel III is
the adequate capital requirement.
fundamental to a sound and accurately functioning
banking system that is able to support economic
As a part of Basel III compliance, Pillar III: Market Discipline
recovery and growth on a sustainable basis. In line
is formulated with a view to establish more transparent
with the Bangladesh Bank guidelines, following
and more disciplined financial market so that stakeholders
detailed qualitative and quantitative disclosures are
can assess the overall position of a bank regarding provided covering Scope of Application, Capital
holding of assets and to identify the risks relating to the Structure, Capital Adequacy, Credit Risk, Equity
assets and capital adequacy to meet probable loss of Position, Interest Rate Risk, Market Risk, Operational
assets. Bangladesh Bank has specified the standard of risk, Liquidity Ratio, Leverage Ratio, Remuneration of
disclosure framework through guidelines. the Bank etc.

Consistency and validation Reporting Standards (IFRS) adopted by the Institute
of Chartered Accountants of Bangladesh (ICAB) and
Mercantile Bank believes that the information of this related circulars/instructions issued by Bangladesh
disclosure does not conflict with requirements under Bank from time to time. Besides, Bank complied with
accounting standards as set by Bangladesh Bank from the requirements of rules and regulations from various
time to time. Information presented in the ‘Quantitative regulatory authorities including Government bodies,
Disclosures’ section can easily be verified and validated BSEC, DSE and CSE.
with corresponding information presented in the
consolidated and solo audited financial statements Under Minimum Capital Requirement, Bank use
of MBL available on the website of the Bank. The following specified approaches/ methodologies for
financial statements of the Bank have been prepared measuring the various risks such as Credit Risk, Market
in accordance with the Banking Companies Act Risk, Operational Risk as per Basel III guidelines (Ref:
1991 (amended in 2018) and International Financial BRPD circular no.18, dated December 21, 2014)-
Credit Risk Market Risk Operational Risk

Standardized Approach Standardized Approach Basic Indicator Approach
The disclosure is prepared once a year. It is also made available for the stakeholders as a link titled ‘Disclosures on Risk
Based Capital (Basel III)’ on the home page of the Bank’s website (www.mblbd.com).
a) Scope of application
Qualitative Disclosures
(a) The name of the corporate Mercantile Bank Limited (MBL)
entity in the group to which
the guidelines applies.
(b) An outline of difference in MBL stated its journey on May 20, 1999 and commenced its business on
the basis of consolidation June 02, 1999 as a public limited company in Bangladesh. It was listed in DSE
for accounting and and CSE on February 16, 2004 and February 26, 2004 respectively.
regulatory purposes, with
a brief description of the MBL has 150 branches as on December 31, 2020. The Bank has Off-shore
entities within the group (a) Banking, Islamic Banking Windrows operation, Agent Banking, Mobile
that are fully consolidated; Banking. The cardinal activities of the Bank are to serve commercial banking
(b) that are given a services to its customers.
deduction treatment;
The Bank has 3 (Three) subsidiaries namely ‘Mercantile Bank Securities
and (c) that are neither
Limited’, ‘Mercantile Exchange House (UK) Limited’ and ‘MBL Asset
consolidated nor deducted
Management Limited’.
(e.g. where the investment
is risk-weighted). Mercantile Bank Securities Limited
Mercantile Bank Securities Limited (MBSL) formed on 27 June 2010 and

started its commercial operation from 14 September 2011 through obtaining
stock dealer and broker license from Bangladesh Securities and Exchange
Commission (BSEC). The main operation of the subsidiary is to buy and sell
off securities listed with Dhaka and Chittagong stock exchange or approved
by BSEC for open market operation for its customer. Margin loan facility is
also extended to its customers against their equity.

Mercantile Exchange House (UK) Limited, a fully owned subsidiary company

of MBL incorporated as private limited company with companies for England
and Wales under registration no. 07456837 dated December 01, 2010.
The company commenced its business operation on December 06, 2011.
Mercantile Exchange House is committed to provide faster, easier and safer
remittance services to the Bangladeshi expatriate living and working in UK.
MBL Asset Management Limited, a subsidiary of Mercantile Bank

Limited, started its operation under Bangladesh Securities and Exchange
Commission (Mutual Fund) Rules, 2001. The company commenced its
business operation on January 30, 2020. The core objectives of the
company are to carry on the business of management of mutual fund,
asset management, portfolio management, capital market operation, issue
manager, financial intermediary services and other related services in
Bangladesh and overseas.
(c) Any restriction, or other Not applicable
major impediments,
on transfer of funds or
regulatory capital within
the group.
(d) The aggregate amount of Not applicable.
surplus capital of insurance
subsidiaries (whether
deducted or subjected
to an alternative method)
included in the capital of
the consolidated group.
b) Capital Structure
(a) Summary information on The regulatory capital under Basel III is composed of;
the terms and conditions
•• Tier-1 (going-concern capital) and
of the main features of
all capital instruments, •• Tier-2 (gone-concern capital)
especially in the case of
capital instruments eligible Tier-1 capital is composed of;
for inclusion in CET 1, (a) Common Equity Tier-1 (CET-1) and
Additional Tier 1 and Tier 2.
(b) Additional Tier-1 (AT-1)
Conditions set by BB for maintaining Regulatory Capital are as below;

•• Common Equity Tier-1 of at least 4.50% of the total RWA.
•• Tier-1 capital will be at least 6.00% of the total RWA.
•• Minimum CRAR of 10% of the total RWA.
•• Additional Tier-1 capital can be admitted maximum up to 1.5% of the total
RWA or 33.33% of CET-1, whichever is higher.
•• Tier-2 Capital can be admitted maximum up to 4.0% of the total RWA or
88.89% of CET-1, whichever is higher.

•• In addition to minimum CRAR, Capital Conservation Buffer (CCB) is being
introduced which maintained in the form of CET-1 from year 2015.
•• In order to arrive at the eligible regulatory capital for the purpose of calculating
CRAR, banks are required to make some regulatory adjustments/ deductions
from Tier-1 and Tier-2 Capital.
Quantitative Disclosures BDT in Crore

Particulars Solo Consolidated
Tier-1 Capital
A Common Equity Tier-1 Capital (CET-1)
Fully Paid Up Capital 984.02 984.02
Non-repayable Share Premium account 0.00 0.00
Statutory Reserve 842.13 842.13
General Reserve 155.00 155.00
Retained Earning 148.05 153.01
Dividend Equalization Account 4.57 4.57
Minority Interest in Subsidiaries 0.00 9.71
Others (If any item approved by Bangladesh Bank) 0.00 0.00
Sub-Total (A) 2,133.77 2,148.44
Regulatory Adjustments/Deductions from CET-1 5.32 5.32
Total Common Equity Tier-1 Capital (CET-1) 2,128.45 2,143.12
B Additional Tier-1 Capital (AT-1) 0.00 0.00
Total Tier 1 Capital (A+B) 2,128.45 2,143.12
Tier-2 Capital
General Provision 853.50 853.50
Subordinated Debt/Instruments 360.00 360.00
Revaluation Reserves (as on 31 December, 2014) 0.00 0.00
Total Tier-2 capital 1,213.50 1,213.50
Total Eligible Capital (Tier-1+Tier-2) 3,341.95 3,356.62
(c) Regulatory Adjustments/Deductions from Capital

Regulatory Adjustments/Deductions from CET-1 Capital
Shortfall in provisions required against investment in Share 5.32 5.32
(Quoted Share excluding director Equity Shares)
Regulatory Adjustments/Deductions from Tier-2 Capital
50% of Revaluation Reserves for Fixed assets, Securities & Equity 0.00 0.00
(phase-in deductions as per Basel III guideline)
(d ) Total Eligible Capital

Total Tier-1 Capital (CET-1 Capital + AT-1 Capital) 2,128.45 2,143.12
Total Tier-2 capital 1,213.50 1,213.50
Total Eligible Capital (Tier-1 + Tier-2) 3,341.95 3,356.62

Capital composition (solo basis)
64%
36%
Tier-1 Capital Tier-2 Capital
c) Capital Adequacy
(a) A summary discussion of MBL has adopted Standardized Approach for computation of Capital
the Bank’s approach to Charge for Credit Risk and Market Risk while Basic Indicator Approach
assessing the adequacy for Operational Risk. Total Risk Weighted Assets (RWA) of the Bank is
of its capital to support determined by multiplying the capital charge for market risk and operational
current and future risk by the reciprocal of the minimum CRAR ratio i.e. 10% as on December
activities. 2020 and adding the resulting figures to the sum of risk weighted assets
for Credit Risk. Total RWA is then used as denominator while total Eligible
Regulatory Capital as on numerator to derive Capital to Risk weighted assets
Ratio (CRAR) i.e.
Total Eligible Regulatory Capital x 100

CRAR =
Credit RWA + Market RWA + Operational RWA
The Bank’s CRAR on the basis of Solo and Consolidated are 13.61% and
13.59% respectively against minimum requirement with CCF of 12.50% as on
December 31, 2020. MBL’s policy is to manage and maintain its capital at an
adequate level to raise its CRAR well above than minimum requirement in
line with Basel III. Ultimate goal of the capital management process of MBL is
to ensure that the Bank maintains its capital base at a level to absorb all the
material risks. The Bank also ensures that the capital levels comply with all
regulatory requirements.
Quantitative Disclosures (BDT in Crore)

(b) Capital Requirement for Credit Risk 2,130.89 2,142.38
(c) Capital Requirement for Market Risk 72.18 72.18
(d) Capital Requirement for Operational Risk 251.79 255.16
(e) Individual Capital Ratio
Capital to Risk Weighted Assets Ratio (CRAR) 13.61% 13.59%
CET-1 Capital to RWA Ratio 8.67% 8.68%
Total Tier-1 Capital to RWA Ratio 8.67% 8.68%
Tier-2 Capital to RWA Ratio 4.94% 4.91%
(f) Capital Conservation Buffer 2.50% 2.50%
(g) Available Capital under Pillar 2 Requirement 273.37 269.47

Capital to Risk Weighted Assests Ratio (CRAR)
8.50% 8.67%
4.94%
4.00%
Required (12.50%) Maintained (13.61%)

Tier-1 Tier-2
d) Credit Risk
(a) The general qualitative disclosure requirement with respect to credit risk, including:
i) Definition of past due and As per guideline of Bangladesh Bank, All Loans and Advances are grouped
impaired (for accounting into 4 (four) categories namely- Continuous Loan, Demand Loan, Fixed
purposes); Term Loan and Short-Term Agricultural Credit & Micro Credit for the
purpose of classification.
Continuous Loan (only for CMSE) will be classified as:
Sub-standard- if it is past due/overdue for a period of 06 (six) months or
beyond but less than 18 (eighteen) months.
Doubtful- if it is past due/overdue for a period of 18 (eighteen) months or
beyond but less than 30 (thirty) months
Bad/Loss- if it is past due/overdue for a period of 30 (thirty) months or
beyond.
Continuous Loan (other than CMSE) will be classified as:
Sub-standard- if it is past due/overdue for a period of 03 (three) months or
beyond but less than 09 (nine) months.
Doubtful- if it is past due/overdue for a period of 09 (nine) months or
beyond but less than 12 (twelve) months
Bad/Loss- if it is past due/overdue for a period of 12 (twelve) months or beyond.
Demand Loan (only for CMSE) will be classified as:
Sub-standard- if it is past due/overdue for a period of 06 (six) months or
beyond but not over 18 (eighteen) months.
Doubtful- if it is past due/overdue for a period of 18 (eighteen) months or
beyond but not over 30 (thirty) months.
Bad/Loss- if it is past due/overdue for a period of 30 (thirty) months or
beyond.
Demand Loan (other than CMSE) will be classified as:
Sub-standard- if it is past due/overdue for a period of 03 (three) months or
beyond but not over 09 (nine) months.
Doubtful- if it remains past due/overdue for a period of 09 (nine) months or
beyond but not over 12 (twelve) months.
Bad/Loss- if it remains past due/overdue for a period of 12 (twelve) months
or beyond.
Fixed Term Loan (only for CMSE) will be classified as:
Sub-standard- If Fixed Term Loan or any installment(s) remain past due /
overdue for a period of 6(six) months or beyond but less than 18 (eighteen)
months.

Doubtful- If Fixed Term Loan or any installment(s) remain past due /overdue
for a period of 18 (eighteen) months or beyond but less than 30 (thirty) months.
Bad/Loss- If Fixed Term Loan or any installment(s) remain past due /overdue
for a period of 30 (thirty) months or beyond.
Fixed Term Loan (other than CMSE) will be classified as:
Sub-standard- If Fixed Term Loan or any installment(s) remain past due /
overdue for a period of 3(three) months or beyond but less than 9 (nine)
months.
Doubtful- If Fixed Term Loan or any installment(s) remain past due /overdue
for a period of 9 (nine) months or beyond but less than 12 (twelve) months.
Bad/Loss- If Fixed Term Loan or any installment(s) remain past due /overdue
for a period of 12 (twelve) months or beyond.
Short-Term Agricultural Credit & Micro Credit:
Sub-standard- If the irregular status continues, after a period of 12 (twelve)
months the credit will be classified as Sub-standard.
Doubtful- If the irregular status continues, after a period of 36 (thirty Six)
months the credit will be classified as Doubtful.
Bad/Loss- If the irregular status continues, after a period of 60 (sixty) months
the credit will be classified as Bad/loss.
A Continuous Loan, Demand Loan or a Term Loan which will remain past due/
overdue for a period of 02 (two) months or more, will be put into the Special
Mention Account (SMA).
ii) Description of approaches As per Bangladesh Bank’s guideline, MBL maintains General and Specific
followed for specific and provision in the following way:
general allowances and
statistical methods;
Particulars Rate (%)
General provision on all unclassified loans/SMA of Small and 0.25%
Medium Enterprise (SME)
General provision against all unclassified loans/SMA (other 1%
than loans under Consumer Financing, Loans to Brokerage
House, Merchant Banks, Stock Dealers etc., Special Mention
Account as well as SME Financing.)
General provision on the unclassified/SMA amount for 2%
Consumer Financing (other than Housing Finance and Loans
for professionals to set up business)
General provision on the unclassified/SMA amount for 2%
Housing Finance and Loans for professionals to set up
business under consumer financing scheme
General provision on the unclassified/SMA amount for Loans 2%
to Brokerage House, Merchant Banks, Stock Dealers, etc.
General provision on the Off-Balance sheet exposures 1%
Specific Provision for classified Continuous, Demand and
Fixed Term Loans:
Substandard (for CSME) 5%
Substandard (other than CSME) 20%
Doubtful (for CSME) 20%
Doubtful (other than CSME) 50%
Bad/Loss (for all kind of loan) 100%
Specific Provision for Short-Term Agricultural and Micro-
Credits
All credits except 'Bad/Loss' 5%
Bad/Loss 100%

iii) Discussion of the Bank’s The Bank has adopted numerous strategies to manages its credit risk
credit risk management including:
policy
•• Creating credit risk awareness culture
•• Approved credit policy by the Board of Directors
•• Separate credit risk management division
•• Formation of law and recovery division
•• Formation of Recovery Team with Senior Executives
•• Independent internal audit and direct access to Board/Audi committee
•• Credit quality and portfolio diversification
•• Early warning system
•• Provision and suspension of interest
•• Scientific lending and credit approval process
•• Counterparty credit rating
•• Strong NPL management system
(b) Total gross credit risk Total Gross Credit Risk exposures broken down by major types of credit
exposures broken down exposure as on December, 2020 is as under:
by major types of credit Particulars BDT in Crore
exposure.
Term Loan 8,525.42
Time Loan 1,887.96
Packing Credit 227.08
Loan against Trust Receipt (LTR) 678.48
Lease Finance 139.01
EDF Loan 1,715.10
Loan General 17.93
House Building Loan 561.32
Hire Purchase 1,334.60
Payment Against Documents (PAD) 16.45
Cash Credit (Hypo) 1,076.08
Overdraft 2,938.92
Home Loan Scheme Refinance 0.09
Personal Loan 34.06
Consumer Credit Scheme 0.52
Consumer Finance 235.56
Staff Loan 86.46
Credit Card 46.55
Small and Medium Enterprise (SME) Loan 3,233.06
Agricultural Credit 477.25
Working Capital under Stim Package 589.90
Other Credit Scheme 0.28
Quard (Islamic Banking) 0.02
Bill Purchased and Discounted-Inland 265.24
Bill Purchased and Discounted-Foreign 812.12
Total 24,899.44

(c) Geographical distribution Geographical Distribution of total exposure as on December, 2020 is as under:
of exposure, broken down Particulars BDT in Crore
in significant areas by major
Urban
types of credit exposure
Dhaka 18,093.06
Chittagong 3,557.76
Rajshahi 1,267.29
Sylhet 100.19
Khulna 219.45
Rangpur 361.18
Barisal 251.04
Mymensingh 43.58
Sub-Total (A) 23,893.57
Rural
Dhaka 398.11
Chittagong 446.88
Rajshahi 114.21
Sylhet 13.88
Khulna -
Rangpur 17.29
Barisal 15.50
Mymensingh -
Sub-Total (B) 1,005.87
Grand Total (A+B) 24,899.44
Geographical distribution of total exposure
1.52%
1.07%
0.88% 0.18%
0.46%
5.55%
16.08%
74.26%
Dhaka Chittagong Rajshahi Sylhet

Khulna Rangpur Barisal Mymensingh
(d) Industry or counterparty type Industry or counterparty type distribution of exposures, broken down by
distribution of exposures, major types of credit exposure:
broken down by major types Particulars BDT in Crore
of credit exposure Education (School/College, University, Research institute) 33.20
Health 21.19
Agriculture 477.25
Commodities (Sugar/ Edible Oil/ Wheat/ Rice/ Dal/ Peas/ 1,958.01
Maize etc), Food & Beverage
Trade Finance 3,530.21
Transport 135.16
Shipping 14.41
Textile (Excluding IDBP) 1,580.72
Textile (IDBP) 83.22

Readymade Garments (RMG) [excluding IDBP] 4,976.19
Readymade Garments (RMG) [IDBP] 6.74
Tele communication 92.39
IT & Computer/Trade 33.43
Power & Fuel 725.80
Real Estate 773.64
Cement 129.68
Chemicals 440.59
Leather & Leather products 470.93
Plastic & Plastic products 91.94
Electrical & Electronic goods 372.40
Paper & Packaging 487.00
Jute & Jute products 348.46
Glass & Glass products 0.00
Ceramics (Table ware, Sanitary ware, Tiles etc.) 118.23
Iron & Steel 2,193.62
Engineering & Construction 757.20
Contractor Finance 483.91
Capital Market Intermediaries 81.01
Backward Linkage 418.97
Consumer & Retail Product 764.37
NBFI 892.50
Service (Hotel, Restaurant, Travelling, Tickets, etc.) 165.25
Others 2,241.82
Total 24,899.44
(e) Residual contractual maturity Residual contractual maturity breakdown of total exposure as on
breakdown of the whole December, 2020 is as under:
portfolio, broken down Repayable on Demand 4,492.51
by major types of credit Not more than 3 (three) months 3,699.41
exposure
More than 3 (three) Months but not more than 1 (one) year 6,639.92
More than 1 (one) year but not more than 5 (five) years 5,347.90
More than 5 (five) years 4,719.71
Total 24,899.44
(f) By major industry and counter party type:
i) Amount of impaired loans Impaired Loan under 4 (four) broad categories as on December 31, 2020
and if available, past due is as under:
loans, provided separately Particulars BDT in Crore
Continuous Loan 283.61
Demand Loan 335.97
Term Loan 554.95
Short Term Agro Credit and Micro Credit 0.59
Total 1,175.12
ii) Specific and general According to Bangladesh Bank’s guideline, Specific and general provisions
provisions; and made as on December 31, 2020 is as under:
Particulars BDT in Crore
General Provision (including SMA & OBU) 754.64
Specific Provision (SS, DF, Bad/Loss) 488.26
Provision for Off-balance Sheet Exposure 98.86

iii) Charges for specific During the year 2020 following provisions were made on un classified,
allowances and charge-offs classified and off-balance sheet exposure as per Bangladesh Bank’s
during the periods guideline:
Particulars BDT in Crore
Provision against Un Classified Loans 88.85
Provision against Classified Loans 34.59
Other Provision (Off Balance Sheet Items) 0.20
(g) Gross non-performing assets Gross non-performing assets as on December 31, 2020 is as under
(NPAs): Particulars BDT in Crore
Gross non-performing assets (NPAs):
Non-performing Assets (NPAs) to Outstanding Loans & 4.72%
Advances
Movement of Non Performing Assets
Opening balance 1,150.26
Increase/(decrease) 24.85
Closing Balance 1,175.12
Movement of specific provisions for NPAs
Opening balance 451.99
Recoveries of amount from pre-written off 1.67
Provisions made during the period 34.59
Write-off 0.00
Write-back of excess provisions 0.00
Closing Balance 488.26
e) Equities: Disclosure for Banking Book Positions

(a) Differentiation between MBL’s total equity share holding comprises of two purposes i.e. capital
holdings on which capital gain and other strategic reason like equity participation and investment
gains are expected and those diversification. MBL is the director of IDLC finances Ltd. and sole purpose of
taken under other objectives such investment is not capital gain, rather maintain relationship as well as
including for relationship and diversify its investment portfolio.
strategic reasons. Investment in equity securities are broadly fall under 2 categories:
•• Quoted Securities
•• (traded in the secondary market; trading book assets)
•• Unquoted Securities
•• (not traded in secondary market; banking book assets)
Discussion of important Quoted shares are recorded at cost prices and after every quarter end if
policies covering the valuation the total cost of entire portfolio is higher than the market value, provision is
and accounting of equity maintained to the extent of differential amount of cost and market value of the
holdings in the banking book. portfolio as per terms and condition of regulatory authority. On the other hand,
This includes the accounting unquoted share is valued at cost price or book value as per latest audited
techniques and valuation accounts.
methodologies used, including
key assumptions and practices
affecting valuation as well
as significant changes in the
practices.

Quantitative Disclosures
(BDT in Crore)
Particulars Solo Consolidate

(b) Value disclosed in the balance sheet of investment, as well as the fair value of those investments; for quoted
securities, a comparison to publicly quoted share values where the share price is materially different from fair
value.
•• Quoted shares 55.78 55.78
•• Un Quoted shares 106.77 106.77
(c) The cumulative realized gain (losses) arising from sales and liquidations in
the reporting periods.
•• Realized gain (losses) from equity investments 0.12 0.12
(d) Total unrealized gains (losses) 102.85 102.85
Total latent revaluation gains (losses) 0.00 0.00
Any amount of the above included in tier 2 Capital 0.00 0.00
(e) Market value of investment in equities as on December 31, 2020 158.62 158.62
Specific Risk- Capital Requirement is 10% of the said value 15.86 15.86
Market value of investment in equities as on December 31, 2020 158.62 158.62
General Risk- Capital Requirement is 10% of the said value 15.86 15.86
f) Interest rate risk in the banking book (IRRBB)

(a) The general qualitative Interest rate risk in the banking book arises from mismatches between the future
disclosure requirement yield of an assets and their funding cost. Assets Liability Committee (ALCO)
including the nature of monitors the interest rate movement on a regular basis. MBL measure the
IRRBB and key assumptions, Interest Rate Risk by calculating Duration Gap i.e. positive Duration Gap affects
including assumptions bank’s profitability adversely with the increment of interest rate and negative
regarding loan prepayments Duration Gap increase the bank’s profitability with the reduction of interest rate.
and behavior of non-maturity
deposits, and frequency of
IRRBB measurement.
(b) The increase (decline) in Increase of Interest Rate will affect the Bank in the following ways:
earnings or economic value Minor Moderate Major
( or relevant measure used Particulars
Shock Shock Shock
by management) for upward
Magnitude of Shock 1% 2% 3%
and downward rate shocks
according to management’s Duration Gap (Years) 0.96 0.96 0.96
method for measuring IRRBB, Total Regulatory Capital (BDT in Cr.) 3,341.95 3,341.95 3,341.95
broken down by currency (as
Risk Weighted Assets (BDT in Cr.) 24,548.64 24,548.64 24,548.64
relevant)
CRAR 13.61% 13.61% 13.61%
Revised Capital (After Shock) 3,039.09 2,736.24 2,433.38
Revised RWA 23,723.04 23,723.04 23,723.04
Revised CRAR (%) 12.81% 11.53% 10.26%

g) Market Risk
(a) Views of BOD on trading/ Market Risk is the possibility of losing assets in balance sheet and off-balance
investment activities sheet positions arising out of volatility in market variables i.e. interest rate,
exchange rate and price. Total capital requirement for MBL against its market
risk is the sum of the following
i) Interest Rate risk
ii) Equity position risk
iii) Foreign Exchange risk
iv) Commodity risk
All the Market Risk related policies/guidelines are duly approved by BOD. The
BOD sets limit, review and update the compliance on regular basis aiming to
mitigate the Market risk.
Methods used to measure In order to calculate the market risk for trading book purposes the Bank uses
Market risk Standardized (rule based) Approach where capital charge for interest rate risk,
price and foreign exchange risk is determined separately. For instance, MBL’s
total market risk is calculated as below:
i) Capital Charge for interest Rate Risk = Capital Charge for Specific Risk +
Capital Charge for General Market Risk.
ii) Capital Charge for Equity Position Risk = Capital Charge for Specific Risk +
Capital Charge for General Market Risk.
iii) Capital Charge for Foreign Exchange Risk = Capital Charge for General
Market Risk.
iv) Capital Charge for Commodity Position Risk = Capital Charge for General
Market Risk.
Market Risk Management Treasury Division and International Division manage the Market Risk with the
system help of Asset Liability Committee (ALCO) and Asset Liability Management
(ALM) Desk.
Policies and Processes for Policy for managing Market Risk has been set out by the Board of Directors
mitigating market risk of the Bank where clear instructions has been given on Loan Deposit
Ratio, Whole Sale Borrowing Guidelines, Medium Term Funding, Maximum
Cumulative Outflow, Liquidity Contingency Plan, Local Regulatory Compliance,
Recommendation / Action Plan etc. Furthermore, special emphasis has been
put on the following issues for mitigating market risk:
Interest Rate Risk Management

Treasury Division reviews the risks of changes in income of the Bank as a result
of movements in market interest rates. In the normal course of business, the
Bank tries to minimize the mismatches between the duration of interest rate
sensitive assets and liabilities. Effective Interest Rate Risk Management is done
as under:
Market Analysis
Market analysis over interest rate movements are reviewed by the Treasury
Division of the Bank. The type and level of mismatch interest rate risk of the
Bank is managed and monitored from two perspectives, being an economic
value perspective and an earning perspective.

Gap Analysis
ALCO has established guidelines in line with central Bank’s policy for the
management of assets and liabilities, monitoring and minimizing interest rate
risks at an acceptable level. ALCO in its regular monthly meeting analyzes
Interest Rate Sensitivity by computing GAP i.e. the difference between Rate
Sensitive Assets and Rate Sensitive Liability and take decision of enhancing or
reducing the GAP according to prevailing market situation aiming to mitigate
interest rate risk.
Foreign Exchange Risk Management
Risk arising from potential change in earnings resulted from exchange rate
fluctuations, adverse exchange positioning or change in the market prices
are considered as Foreign Exchange Risk. Treasury and International Division
manage this risk in the following fashion:
Continuous Supervision
Bank’s Treasury Division manages and controls day-to-day trading activities
under the supervision of ALCO that ensures continuous monitoring of the
level of assumed risks. Treasury Division monitors the foreign exchange price
changes and Back Office of the Treasury Division verifies the deals and passes
the entries in the books of account.
Treasury Back Office separated from Treasury Front Office
Treasury Back Office is conducting its operation in separate locations apart
from the Treasury Front Office. Treasury Back Office is responsible for currency
transactions, deal verification, limit monitoring and settlement of transactions
independently. Treasury Back Office gathers the market rates from an
independent source other than dealers of the same organization, which helps
to avoid any conflict of interest.
Mark-to-Market Method for Approved Securities and Foreign Exchange
Revaluation
All foreign exchange reserves and balances along with approved securities
are revalued at Mark-to-Market method according to Bangladesh Bank’s
guidelines. Such valuations are made after specific time interval as prescribed
by Bangladesh bank.
Nostro Accounts
Nostro accounts are maintained by the Bank with various currencies and
countries. These Accounts are operated by the International Division of the
Bank. All Nostro accounts are reconciled on monthly basis. The management
reviews outstanding entry beyond 30 days for settlement purpose.
Equity Risk Management
Equity Risk is the risk of loss due to adverse change in market price of equities
held by the Bank. Equity Risk is managed by the following fashion:
Investment Portfolio Valuation
Mark-to-Market valuations of the share investment portfolio is followed in
measuring and identifying risk. Mark-to-Market valuation is done against a
predetermined cut loss limit.
Diversified Investment to minimize Equity Risk
MBL minimizes the Equity Risks by Portfolio diversification as per investment
policy of the Bank.
Margin Accounts are monitored very closely
Where Margin loan is allowed, security of investment, liquidity of securities,
reliability of earnings and risk factors are considered and handled
professionally.

(BDT in Crore)
Capital requirement for: Particulars Solo Consolidate
Interest Rate Risk 3.17 3.17
Equity Position Risk 31.72 31.72
Foreign Exchange Risk 37.29 37.29
Commodity Risk 0.00 0.00
Total Capital Requirement for Market Risk 72.19 72.19
h) Operational Risk
(a) Views of BOD on system to All the policies/guidelines including Internal Control and Compliances and
reduce Operational Risk Board audit are duly approved by BOD. Audit Committee of the Board directly
oversees the activities of internal control and compliances aiming to check all
types of lapses and irregularities inherent with operational activities of the Bank
and thereby may create a notable downfall risk for the Bank.
Operational risk includes legal risk, but excludes strategic and reputation risk.
Operational Risk includes:
Transaction processing
Operation control
Technology and systems
Risks of physical and logical security
Unique risk arises due to outsourcing
Performance gap of The BOD of the Bank is always keen to provide a competitive, attractive and
executives and staffs handsome remuneration package for its employees. Besides, the recruitment
policy of the Bank always emphasizes on sorting out fresh graduate from
the reputed universities and nurtures them until transformation to a ‘Human
Capital’ of highest quality. Besides, the Bank’s name and fame as top tier
Bank of the country acts as moral boosting factor for the employees. An
accommodating, welcoming, co-operative and congenial work atmosphere
motivates its employees to act as a family towards achievement of goal. As
such, there exists no performance gap in the Bank.
Potential external events No potential external events have been detected yet at the time of reporting of
the capital accord
Policies and processes for Operational Risks results from inadequate or failed internal process, people
mitigating operational risk and systems or from external events. Within the Bank, Operational Risk may
arise from negligence and dishonesty of the employees, lack of management
supervision, inadequate operational control, lack of physical security, poor
technology, lack of automation, non- compliance of regulatory requirements,
internal and external fraud etc. Operational Risk Management Framework
has been designed to provide a sound and well-controlled operational
environment and thereby mitigate the degree of operational risk.
Approach for calculating Operational Risk is defined as the risk of loss resulting from inadequate or
capital charge for operational failed internal processes, people and system or from external events. The Bank
risk use Basic Indicator Approach for calculating capital charge against operational
risk i.e. 15% of average positive annual gross income of the Bank over the last
three years.
(BDT in Crore)
(b) Particulars Solo Consolidate
Capital requirements for Operational Risk 251.79 255.16

i) Liquidity Ratio
Views of BOD on system to Board of Directors of the Bank always has been giving utmost importance to
reduce Liquidity Risk minimize the liquidity risk of the bank. In order to reduce liquidity risk strict
maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Reserve
(SLR) are also being emphasized on a regular basis.
Apart from these as a part of Basel-III requirement Liquidity Coverage Ratio
(LCR) and Net Stable Funding Ratio (NSFR) are also maintained under the
guidance and sharp insight of our honorable Board of Directors.
Methods used to measure In order to measure liquidity risk various methods are being used which are as
Liquidity Risk follows:
•• GAP analysis is being done regularly that deals with the mismatch of
assets and liabilities in different time buckets like 0-30 days, 31-90 days,
91-180 days, 181-270 days, 271-365 days and beyond 1 year. In our monthly
ALCO paper we show this GAP analysis based on which different strategic
decisions are taken in order to reduce liquidity risk that may arise due to the
mismatch between assets and liabilities.
•• Cash flow forecasting is another technique to measure liquidity risk that
may arise due to future cash flow mismatch. In our monthly ALCO paper
we show this cash flow forecasting.
Liquidity Risk Management As a part of liquidity risk management system we have board approved
System liquidity contingency plan. In this liquidity contingency plan we have
incorporated all the strategic decision to tackle any sort of liquidity crisis.
As per the Bangladesh Bank ALM guideline this liquidity contingency plan is
reviewed annually which is approved by the Board of Directors.
Policies and processes for We have board approved policies for mitigating liquidity risk. This policy is
mitigating Liquidity Risk reviewed annually and placed before the Board of Directors for their kind
approval.
(BDT in Crore)
Liquidity Coverage Ratio (LCR) 141.93%
Net Stable Funding Ratio (NSFR) 106.66%
Stock of High quality liquid assets 5,917.01
Total net cash outflows over the next 30 calendar days 4,168.96
Available amount of stable funding 26,000.08
Required amount of stable funding 24,377.45
j) Leverage Ratio
(a) Views of BOD on system to Leverage is an inherent and essential part of modern banking business. In
reduce excessive leverage other words, banks are highly leveraged organizations which facilitate leverage
for others. Leverage, in simple terms, it is the extent to which a bank funds its
assets with borrowings rather than capital. More debt relative to capital means
a higher level of leverage.
Banks have a range of financial incentives to operate with high leverage.
But it creates risk when it crosses a certain point. Therefore, the board views
that sound prudential controls are needed to ensure that the organization
maintains a balance between its debt and equity. The board also believes
that the bank should maintain its leverage ratio on and above the regulatory
requirements which will eventually increase the public confidence on the
organization.

Policies and processes for The leverage ratio is a non risk based approach to the measurement of leverage.
mitigating excessive on and The ratio acts as a ‘backstop’ against the risk-based capital requirements and
off balance sheet leverage is also designed to constrain excess leverage. The leverage ratio is intended to
achieve the following objectives:
a) Constrain the build-up of leverage in the bank
b) Reinforce the risk based requirements with an easy to understand and a
non-risk based measure.
Under Basel III, the Bank has to maintain a minimum Tier 1 Leverage ratio of 3%
is being prescribed both at solo and consolidated level.
To manage excessive leverage, the bank follows all regulatory requirements
for capital, liquidity, commitment, Advance Deposit Ratio (ADR), Maximum
Cumulative Outflow (MCO), large exposures as well as risk management which
are eventually reinforcing standards set by Bangladesh Bank. The aim is to
ensure that the high leverage inherent in banking business models is carefully
and prudently managed.
Approach for Calculating Leverage ratio refers to the ratio between Bank’s Tier 1 capital (as numerator)
exposure and total exposure (as denominator). Total exposure includes both balance
sheet exposures and off-balance sheet exposures after related deductions.
Tier-1 Capital (after related deductions)

Leverage Ratio =
Total Exposure (after related deductions)
The capital measure for the leverage ratio is based on the Tier 1 capital after
related deductions.
The exposure measure for the leverage ratio follows the accounting measure
of exposure. In order to measure the exposure consistently with financial
accounts, the followings
are applied by the bank:
•• On balance sheet, non-derivative exposures will be net of specific provisions
and valuation adjustments.
•• Physical or financial collateral, guarantee or credit risk mitigation purchased
is not considered to reduce on-balance sheet exposure.
•• Netting of loans and deposits is not considered.
•• Off-balance sheet (OBS) items are calculated by applying a uniform
100% credit conversion factor (CCF). For any commitments that are
unconditionally cancellable at any time by the bank without prior notice, a
CCF of 10% is applied.
(BDT in Crore)
Leverage Ratio 5.62% 5.64%
On balance sheet exposure 32,590.30 32,782.66
Off balance sheet exposure 5,254.48 5,254.48
Total exposure (After deduction from On and Off balance sheet exposure) 37,839.46 38,031.81

k) Remuneration
(a) Information relating to Human Resources Division (HRD), Head Office of the Bank oversees the
the bodies that oversee remuneration and the Division is directly supervising by the Managing Director
remuneration. of the Bank. The Board of Director/Executive Committee of the Bank approves
remuneration policy from time to time. The Human Resources Division
comprises of 9 officials (3-executives and 6 officers) including Divisional Head.
The Bank does not take any external consultants in preparing remuneration
policy.
The remuneration policy applied to all employees of the Bank and ensures
equal pay scale in a same grade of the employees. Remuneration Committee
of the Bank also oversees its three subsidiaries i.e. Mercantile Bank Securities
Limited (MBSL), MBL Exchange House (UK) Limited and MBL Asset
Management Limited.
Following senior management or employees of the Bank are considered as
material risk takers, such as;
Designation No of Employee No. of Employee
Managing Director & CEO 1
Additional Managing Director 1
Deputy Managing Director 5
Senior Executive Vice President 6
Executive Vice President 9
Senior Vice President 22
Besides all head of business units (Branches/Divisions) are also considered as
material risk takers.
(b) Information relating to the Mercantile Bank has a flexible compensation & benefits system that helps
design and structure of ensure pay equity, is linked with performance of the employees. All employees
remuneration processes. of our Bank are paid competitive remuneration package. The structure and
level of remuneration are reviewed time to time based on performance of the
Bank and inflationing effects of the living standard.
The pay scale for employees is approved by the Board of directors of the Bank.
Following features have in pay scale:
•• Basic Pay
•• House Rent
•• Medical Allowance
•• Conveyance Allowance
•• House Maintenance
•• Utility
•• Leave Fare Assistance
•• Contribution to PF
•• Overtime for Drivers
Besides the pay scale, employees of the Bank are entitled to get various
financial benefits while on job as well as at the time of their retirement.
During the past year, the Bank review its remuneration policy and following
changes were made-
•• Salary and other benefits have been enhanced.
•• Car Allowances for Executives of the Bank have been enhanced.
•• Charge allowances for HoB have been enhanced.
•• Charge allowances for MOP of the Branches have been introduced newly.

(c) Description of the ways in The following key risks have been taken into account when implementing
which current and future risks remuneration measures-
are taken into account in the
•• Economic condition of the Country
remuneration processes.
•• Performance of the Bank
•• Market Survey with peer Banks
•• Employee turnover
•• Employee Retention
(d) Description of the ways in Now Banking industries become very competitive. In the Banking sector
which the bank seeks to performance plays a vital role on determining someone’s remuneration.
link performance during a Performance appraisal is closely linked to other HR processes like helps to
performance measurement identify the training and development needs, promotions, incentives, etc. The
period with levels of focus of the performance assessment is measuring and improving the actual
remuneration. performance of the employee and also the future potential of the employee. Its
aim is to measure what an employee does.
The Bank has one set of Performance Appraisal Form (PAF) to evaluate the all
categories officials of the Bank. The PAF has 3 (three) parts;
Part-A: Basic information & Business development performance
Part-B: Measurable Performance Rating
Part-C: Comments of the Reporting Officer, Comments of the Supervisor of
the Reporting Officer and Score sheet
Shortly, Bank is going to introduce Key Performance Indicator (KPI) for
measurement the performance of all employees, Branches and Divisions.
On the basis of grade of an individual of the Performance Appraisal Report, the
Bank takes decision in allowing yearly benefits.
At present the Bank does not consider such type of adjustment.
(e) Description of the ways in Mercantile Bank Limited has a flexible compensation and benefits system
which the bank seek to adjust that ensures equally pay. All employees of our Bank are paid competitive
remuneration to take account remuneration package. The structure and level of remuneration are
of longer-term performance. reviewed time to time based on the economic condition of the country
and performance of the Bank. Financial benefits as per Board approved
Human Resource Policy are as under, which ensure long term profitability of
employees over short terms profitability.
Following measures have been taken since the inception of the Bank for long
term performance of the employees of the Bank.
1. Provident Fund.
A Provident Fund namely “Mercantile Bank Employees Provident Fund” has
created to provide long term benefit to the employees of the Bank. Mercantile
Bank Limited contributes to the provident fund monthly a sum equal to the
subscription of each member. The amount standing to the credit of a member
shall payable to him/her in full including Bank contribution and interest
accumulated thereon, as per specification laid down in the “MBL Employees
Provident Fund”.
2. Gratuity Fund.
As a part of motivating the employees of the Bank, we have the rules for
Gratuity namely “Mercantile Bank Limited Employees Gratuity Fund”. As
per rules; Gratuity is admissible to all full time employees of the Bank as per
specification for the basis for benefit.
3. Welfare Fund.
There is an welfare fund in our Bank namely “Mercantile Bank Limited
Employees Welfare Fund”. All the members of the fund is entitled to get benefit
according to rules laid down in the welfare fund.

Besides that, the benefit from the scheme will also provide to the spouses of
the employees. The fund subscribed by monthly contribution of the member
employees and Bank also contribute to the fund from time to time.
Employee welfare fund has formulated to substitute group insurance coverage
of the employees. So the Bank contributes to the fund from time to time to
substitute group insurance coverage of the employees.
Our employees get the following benefits from welfare fund:
1. Death benefit,
2. Retirement benefit,
3. Disability benefit,
4. Medical bill reimbursement facilities and
5. Stipend to the children of our employees who have meritorious result in
their academic attainment.
6. Maternity bill reimbursement for our female employees.
Beside that our female employees also get maternity leave for 06 (Six) months
and all the employees can also avail study leave for maximum 03 years for
higher studies.
(f) Description of the MBL’s compensation and benefits strategy has been devised to foster
different forms of variable high performance culture keeping market competitiveness in mind. Our
remuneration that the bank management strategy is a multi-pronged one; that includes compelling
utilizes and the rationale for employee value proposition with a competitive reward package. Our total
using these different forms. rewards strategy has evolved with our business transformation and basic pay
is benchmarked against the market to ensure competitiveness. The Bank offers
satisfactory financial and nonfinancial benefits for the employees of the Bank
to ensure a better life style. Such as-
•• Attractive compensation package
•• Annual Increment
•• Fair Promotion
•• Festival and Incentive Bonus
•• TA, DA Policy
•• Rewards
•• Gratuity Benefit
•• Provident Fund Benefit
•• Disability Benefit
•• Leave Fare Assistance
•• Car Loan & Car Allowance for executives
•• Employee House Building Loan Scheme
•• Telephone policy for employees
•• Welfare fund for employees
•• Retirement Benefits
•• Career growth opportunities
•• Training and workshop (home and abroad)
•• Favorable work environment
•• Health care facilities
•• Loan facilities at a privileged rate etc.

(g) Number of meetings Meeting regarding overseeing the remuneration was held on need basis.
held by the main body
overseeing remuneration
during the financial year
and remuneration paid to its
member.
(h) Number of employees 117 employees having received variable remuneration award during the
having received a variable financial year.
remuneration award during
the financial year.
Number and total amount of There are 3 incentive bonuses and 2 festival bonuses are awarded during the
guaranteed bonuses awarded financial year.
during the financial year.
Number and total amount of Nil
sign-on awards made during
the financial year.
Number and total amount of Nil
severance payments made
during the financial year.
(i) Total amount of outstanding Nil
deferred remuneration, split
into cash, shares and share-
linked instruments and other
forms.
Total amount of deferred Nil
remuneration paid out in the
financial year.
(j) Breakdown of amount of Breakdown of amount of remuneration awards for the financial year 2020;
remuneration awards for the (BDT in Crore)
financial year to show:
Basic salary 146.21
•• fixed and variable.
Allowances 74.63
•• deferred and non-
Bonus 69.55
deferred.
Provision for Gratuity 24.00
•• different forms used (cash,
Provident fund contribution 14.00
shares and share linked
instruments, other forms). Total 328.39
Nil
Bank Account Transfer
(k) Quantitative information about employees’ exposure to implicit (eg fluctuations in the value of shares or
performance units) and explicit adjustments (eg claw backs or similar reversals or downward revaluations of
awards) of deferred remuneration and retained remuneration:
Total amount of outstanding Nil
deferred remuneration
and retained remuneration
exposed to ex post explicit
and/or implicit adjustments.
Total amount of reductions Nil
due to ex post explicit
adjustments.
Total amount of reductions Nil
due to ex post implicit
adjustments.

NON-PERFORMING LOAN (NPL)
MANAGEMENT
Industry Scenario of NPL the overdue account, monitoring on the branches by

the department continues.
Overall Economy of Bangladesh has taken a blow due to the
Covid-19 pandemic. The Banking industry is no exception to •• M&EAD monitors the expired L/Cs and PAD accounts
this. Over the last few years, the banking industry has been for adjustment of the same. M&EAD also provides a
suffering from Non-performing Loans (NPL). The Profit of the list of expired Bank Guarantees to the Branches for
Banking industry has got hampered due to this NPL. Now, reversal of the same before each quarter-ends to
on top of all the prevailing problems that the industry was keep the off balance sheet portfolio clean.
already facing, in 2020 the COVID-19 has created an added Performance of Monitoring & Early Alert Department
burden. Bangladesh Bank has allowed moratorium period (M&EAD) over the last 05 (five) years-
which has helped the banks to curtail the NPL somewhat.
But, the upcoming days will be more challenging.
Number of Loan Amount
Year
NPL Management Process Regularization (BDT in million)
2020 12,765 28,902.40
SAMD put its all-out effort in order to make considerable
contribution to the asset based Bank’s Profitability. It tries 2019 27,067 77,903.8
to reduce the NPL and also tries to keep the loan portfolio 2018 9,887 30,871.1
of the bank healthy. Top-most priority of the SAMD is to
2017 8,998 14,226.2
recovery from the NPL and the regularization of NPL by
way of rescheduling. 2016 18,940 24,017.5
Mercantile Bank always put collective effort to overcome its b) Recovery Department (RD)
challenges in managing the overdue and non-performing •• RD is also working under SAMD and gives the top
loans. With the Special Asset Management Division and the most priority for recovery of NPLs. RD puts their all-
Branches, All Divisions of Head Office, Cluster Heads, Senior out effort for recovery/regularizations of NPLs.
Management worked together to keep the loan portfolio
of the bank healthy. At the same time effective oversight of •• RD maintains all the files of the Branches which became
the Honorable Board of Directors towards the growth has classified and for recovery/regularization it takes all
accomplished MBL to such a feat. possible steps with the co-operation of the Branches.
Working area of the Special Asset Management

•• RD meets with the customer along with the Branch
official to know the problems in repayment of the
Division (SAMD) segregated into 3(three) departments
loans, find out a solution for recovery/regularization
for arresting /restricting the increasing of NPL and to
through Rescheduling/ Restructuring/ Full & Final
regularize/reduce the NPL of the Bank through recovery
Settlement with waiver facility (reasonable ground,
and rescheduling of the loan accounts.
if any) and takes approval of the action plan of
a) Monitoring & Early Alert Department (M&EAD) recovery/regularization of the loan account from the
competent authority of the bank and communicate
•• M&EAD is working as a wing of SAMD of the Bank with
the same to the concerned.
an objective to restrict deterioration of overdue and
special mention account towards non performing •• Intense follow-up and monitoring through frequent
loan accounts. customer visits by the Cluster Head(s)/RD officials is
the key to efficient and effective recovery system.
•• In order to achieve the goal, the M&EAD is working
to keep a loan limit regular, sends a sweet reminder •• Policies, guidelines and procedures are continuously
with a list of accounts going to be expired within reviewed and updated and taking further action
next (02) months to alert the Branches for taking regarding recovery/regularization of the NPL. A
necessary steps to get renewal of the loan limit from continuous effort is being provided to identify routes
the concerned sanctioning authority at Head Office to recovery and routes to exit from problem
as well as to renew the credit limits which fall within
the Branch delegation.
•• As per Bangladesh Bank’s Guidelines/Circular(s), MBL,
in regular course of business, takes necessary steps
•• M&EAD determine the overdue and SMA accounts to write off bad debts where all possible recovery
at the beginning of each month as Early Alert efforts have been exhausted including taking legal
Accounts, try to understand the causes of overdue actions and for which the Bank has already provided
from the branch management through telephonic full provision– it is those loans which would have,
discussion and advise accordingly for recovery of otherwise, only been used to present the Banks
the overdue. Thereafter till recovery/regularization of balance sheet chubbier.

Performance of Recovery Department (RD) over the last % of Classified Loan

05 (five) years-
Number of Loan Amount 5.13%

Year 4.82% 4.86%
Regularization (BDT in million) 3.79%
4.72%
2020 39 17,142.00
2019 191 154,619.00
2018 39 29,371.00
2017 52 39,264.00
2016 80 30,446.00
2016 2017 2018 2019 2020
c) Central Collection Department (CCD)
•• CCD is the another wing of SAMD and working for Cash Recovery during 2020
recovery of some non-performing loans (SS/DF/BL/
BLW) including SMA upto Tk. 2.50 million of SME, Retail •• From Written of : Tk. 16.66 million
and Agri segments through 3rd Party Debt Collection
Movement of Write-offs
Agency under guideline(s)/Circular(s) of the Bank.
During the years 2020 & 2019, the movement of written–
•• The CCD appoints/engages the Recovery Agent
and monitors their works to recover the classified off accounts is as under:
loans within the justified/given time frame with the (BDT in million)
approval of the competent authority. Particulars 2020 2019
•• CCD contacts with the Branches after end of the each Opening Balance 5,445.70 3,202.37
quarter for collection of fresh list of NPLs which appear Add: Addition during the 1,035.25 2,248.42
to be not possible to recover by the branches. Those year
loans are handed over to the 3rd Party Debt Collection
Less: Collection/Reduction 16.66 5.09
Agents. At present 10 (ten) 3rd Party Debt Collection
during the year
Agents are performing for recovery of NPLs.
Closing Balance 6,464.29 5,445.70
•• Performance of Central Collection Department
(CCD) over the last 05 (five) years- Strategic Outlook for NPL Management in 2021
Recovery from NPL by 3rd Party The following steps are being made for recovery of NPL:
Year Debt Collection Agent
(BDT in million)
•• Special Asset Management Division of Head Office
is working for recovery/regularization of classified
2020 3.00
loans.
2019 9.60
2018 6.60 •• Classified loan accounts have been segregated in
2017 7.20 the basis of securities and the present condition

of business and actions (such as rescheduling,
2016 22.20
legal steps, and interest waiver) are being taken
Classification Status of Credit Portfolio accordingly.
The NPL position at the year ended on 31.12.2020 of MBL •• All branches have been structured into clusters
is Tk. 11,751.16 million and in percentage it is 4.72%. A and Cluster Heads supervise the branches as per
Comparative position is mentioned here: direction of the Additional Managing Director of the
bank.
Total Classified Loan (CL) (BDT in Million)
•• Regular meeting are being held between Branch
Status 2020 2019 2018 Managers and Regional Heads for up to date position
SS 1,229.06 1,294.75 368.69 of recovery/regularization of classified/SMA loans.
DF 1,825.91 409.97 1,186.14
•• Specific targets have been assigned to Branches in
BL 8,696.19 9,797.89 9,247.60
2021 for ensuring Recovery from NPL and Written-off
Total 11,751.16 11,502.61 10,802.43 loan Accounts.

SUSTAINABLE BANKING
HIGHLIGHTS 2020
7,731,981 nos 105,239 nos 7,154 Man hours

SMS Alerts sent to E-Statements sent invested in Training
the Customers to Customers (Both Physical &
Virtual)
1,510.2 Million BDT 303.41 Million 61 Branches powered

Investments in Community by Solar Energy of
renewable energy and Investment 55.85 KW
environment-friendly
projects
TRIPLE
BOTTOM LINE:
PEOPLE PLANET PROFIT
MBL always plays a dynamic role MBL always focuses on green Being the year of world
in contributing to the society finance in the year 2020 our pandemic, In the year 2020
through different CSR program. loan portfolio stood at operating profit generated
Details has been illustrated in Taka 1,510 million. Taka. 3,947 million.
our CSR report and Corporate
Governance Report.

REPORT
PARAMETER
Reporting Date of the most recent Reporting cycle

period previous report
Annual
January 1, 2020 to December 31, Sustainability Analysis Chapter of
2020 MBL Annual Report 2019
Feedback and further Disclosure External assurance

information and suggestions
GRI Standards: Core Option Under management consideration
We welcome any feedback on this
sustainability report. For further
information and comments, please
contact Sustainability Reporting
Team of the Bank.
“We Support
the Global
Compact”

STRATEGIC FOCUS
FOR SUSTAINABILITY-2021
Banking Operation align with SDG

Financial Inclusion through Agent Banking, Sub-Branch, Digital Banking
Better and Faster Customer Service
Exploring the Area of Green Financing
Exploring the Area of Green Financing: digital Banking MBL create a sound financial inclusion
process in the industry where un-bank people will come
Mercantile Bank Ltd. encourages green banking to the banking net. And avail all facility of the Government
financing to achieve its long-term strategic goal being and other organization.
a green friendly bank where every decision is to be
made with regard to both financial and environmental Banking Operation align with SDG'S
considerations. Green banking schemes for the Bank
include electronic & paperless banking, efficient energy Business strategy of MBL is consistent with contribute
usage, green house gas emissions reduction, carbon to individuals’ needs and society’s goals, as expressed
footprint mapping for the bank, environmentally friendly in the Sustainable Development Goals. MBL believes
finance and renewable energy sector investment etc. including its Board and employees have a comprehensive
understanding of the SDGs. In this regards analysis of
Batter and faster customer services portfolio focus areas, products or services to clients and
customers are consistent with the SDGs. This will likely
In a banking industry our competitors are only a click
require banks to proactively seek to increase finance
away, batter and faster customer services can make
in green and socially responsible sectors and decrease
differentiate with competitor. Today’s customers have
investment in non-aligned sectors.
access to an endless amount of information about every
competitor. So creating customer confidence with The UN Sustainable Development Goals (SDGs), adhered
instant support can help us to go in a long path way. We to by more than 190 countries, identified 17 key global
are concentrating on it by time to time reviewing product
issues. Bangladesh is one of the signatories of this. MBL is
customer demand.
in a process of managing relationships with stakeholders
Financial Inclusion through Agent Banking, Sub- in the context of the world’s foremost sustainability
Branch, Digital Banking challenges and committed towards these goals and is
helping to achieve them through its business activities
Through introduction of Agent Banking, Sub-branch and and community investment program.

MBL APPROACH TO SDGS:
"End poverty in all its Partners with NGO

forms everywhere." Coverage of 50 districts
101 Agent Banking Outlets.
Sub-Branch
Digital Banking
“End hunger, achieve food Employment generation

security and improved Fresh Job opening
nutrition, and promote
Internship
sustainable agriculture”
“Ensure healthy lives and Financing at pharmaceutical industries and

diagnostic center.
promote well-being for all
at all ages.” Medical retainer at Head office
Discounted diagnostic facilities.
Day care center.
“Ensure inclusive Scholarship program

and equitable quality MBL Young Banker Appreciation Award
education and promote
Donation to School & College
lifelong learning
opportunities for all.”
“Achieve gender equality 23.04% Female representation in Executive &

Officer
and empower all women
and girls.” Special Loan & Deposit Product.
“Ensure availability and Specially procured filtered mineral water.

sustainable management of Loan for Water Treatment Plan.
water and sanitation for all.”

“Ensure access to Solar/renewable finance

affordable, reliable, 61 Solar Power Branch 55.85kw
sustainable and modern
Use of day light
energy for all.”
Use of Energy efficient Bulb
“Promote sustained, To show due respect to each other

inclusive and sustainable Corporate banking, consumer and retail
economic growth, full and banking, SME financing and agri banking.
productive employment
and decent work for all.”
“Build resilient “UDAYAN” loan product for start-up business

infrastructure, promote “MBL Rainbow” Apps for digital Banking.
inclusive and sustainable
QR code introduction
industrialization, and
foster innovation” E-KYC implementation
“Reduce inequality within To show due respect to each other

and among countries.”
“Make cities and human Loan given to ECO Friendly Project

settlements inclusive, safe, Reduction of Pollution
resilient, and sustainable.”
“Ensure sustainable Solar/renewable finance

consumption and 61 Solar Power Branch 55.85kw
production patterns.”
Use of day light
Use of Energy efficient Bulb

MBL APPROACH TO SDGS:
“Take urgent action to Effluent Treatment Plant (ETP) & Hybrid

Hoffman Kiln (HHK).
combat climate change
and its impacts by Climate risk fund.
regulating emissions and Urban Building Safety Project under JICA/
promoting developments Bangladesh Bank Refinancing Scheme.
in renewable energy.”
“Conserve and sustainably Loan given to ECO Friendly Project

use the oceans, seas Reduction of Pollution
and marine resources for
sustainable development”
“Protect, restore and promote Loan given to ECO Friendly Project

sustainable use of terrestrial
Reduction of Pollution
ecosystems, sustainably
manage forests, combat
desertification, and halt and
reverse land degradation and
halt biodiversity loss.”
“Promote peaceful and Good governance

inclusive societies for
Strong business ethics
sustainable development,
provide access to justice
for all and build effective,
accountable and inclusive
institutions at all levels.”
“Strengthen the means Relationship with the Government, local and

international organizations.
of implementation and
revitalize the global
partnership for sustainable
development.’’

OUR WIDE RANGE OF

PRODUCTS & SERVICES
MBL offers a wide range of products and services in consideration with the customer demands in a more
effective manner.
MBL Prabasi Masik Sanchaya Prokolpo

Current Deposit (CD) Accounts (gvwmK cÖevmx mÂq cÖKí)
MBL Prabasi Sanchaya Hisab
(cÖevmx mÂq wnmve)
Savings Bank Deposit (SB) Accounts
SME Financing
Special Notice Deposit (SND) CHAKA (Term Loan)
SAMRIDDHI (Continuous Loan)

Fixed Deposit Receipt (FDR)
MOUSUMI (Short Term Seasonal Loan)
ANANNYA (Women Entrepreneur’s Loan)

Scheme Deposits
SANCHALAK (A mix of Term, Time & Continuous Loan)
Masik Sanchaya Prokolpo (MSP)
(gvwmK mÂq cÖKí) UNMESH (Foreign Trade Finance)
Digun Briddhi Amanat Prokolpo (DBAP) UDAYAN (Start-up financing for the young entrepreneurs)
(wØ¸Y e„w× AvgvbZ cÖKí)
FACTORING OF RECEIVALBLES
Masik Munafa Amanat Prokolpo (MMAP)
(gvwmK gybvdv AvgvbZ cÖKí) Retail Loans
Poribar Surokkha Amanat Prokolpo (PSAP) Home Loan
(cwievi myiÿv AvgvbZ cÖKí)
Cottage Loan
Aporajita Masik Munafa Prokolpo (AMMP)
Car Loan
(AcivwRZv gvwmK gybvdv cÖKí)
Personal Loan
Troi-Masik Munafa Amanat Prokolpo (TMAP)
(ˆÎgvwmK gybvdv AvgvbZ cÖKí) House Furnishing Loan
Super Munafa Amanat Prokolpo (SMAP) Doctor’s Loan

(gybvdv AvgvbZ cÖKí) Education Loan
Shikha Porikolpona Sanchaya Prokolpo (SPSP) Secured Over Draft (SOD)
(wkÿv cwiKíbv mÂq cÖKí) Refinance Scheme for Green Product/Initiatives
Dergun Briddhi Amanat Prokolpo (1.5TBAP)
Corporate Loans
(†ò¸b e„w× AvgvbZ cÖKí)
Short Term Finance
Agrim Munafa Amanat Prokolpo (AMAP)
(AMÖxg gybvdv AvgvbZ cÖKí) Long Tern Finance
Real Estate Finance
Bishes Sanchaya Prokolpo (BSP)
Import Finance/Trade Finance
(we‡kl mÂq cÖKí)
Work Order Financing/Construction Business
Pension ebong Poribar Support Prokolpo (PPSP)
•• Earnest Money Financing Scheme- SOD
(†cbkb Ges cwievi mv‡cvU© cÖKí) (EMF)
Others: •• Bid Bond
Non Chequeable Savings Bank Account (NSB A/C) •• Performance Guarantee (PG)
School Banking
•• Advance Payment Guarantee (APG)
Savings Bank Account for MSS
•• Shipping Guarantee

•• Customs Guarantee
•• SOD (WO) Islamic Banking
Export Finance (Pre-Shipment Credit/Finance) Deposit Products and Schemes
•• Export Cash Credit (Hypothecation/ •• Al-Wadiah Current Account
Pledge)
•• Mudaraba Savings Account
•• Export Cash Credit Against Trust Receipt
•• Mudaraba Special Notice Deposit Account
•• Advance Against Anticipatory Letter of
Credit •• Mudaraba Term Deposit Account
•• Back to Back Letter of Credit •• Mudaraba Masik Sanchaya Prokolpo
•• Packing Credit •• Mudaraba Masik Munafa Amanat Prokolpo
•• SOD (Export) •• Mudaraba Digun Briddhi Amanat Prokolpo
Post-Shipment Credit/Finance Investment Products
•• Negotiation of Export Documents (FDBP) •• Bai-Murabaha
•• Purchase of Documents against DP or DA
•• Bai-Muajjal
Bills
Structured Finance
•• Bai-Salam
•• Project Finance •• Musharaka

•• Syndication •• Quard
Long Term investment Finance
Agriculture Loan/ Financial inclusion

•• Hire-Purchase under Shirkatul Melk (HPSM)
NABANNO (Krishi/Polli Loan)

Other Services
SAKTI (ETP/Bio-Gas/Solar Energy Loan)
Online Banking
MBL Card products Mobile Banking (MyCash)
MBL Visa Debit Card Internet Banking

MBL VISA Credit Card
Off-Shore Banking
Types:
NRB Banking
•• Local Credit Card
•• International Credit Card SMS Banking
•• Dual Credit Card Locker Service

Categories:
Utility Bills Pay Service
•• Platinum Card
ATM Booth Services
•• Gold Card
•• Classic Card Cash Deposit Machine (CDM) Service
MBL VISA Prepaid Cards
•• MBL VISA Medical Card
•• MBL VISA International Student Card
•• MBL VISA Virtual Card
•• MBL Hajj Prepaid Card
•• Supplementary Card
For more information please visit

www.mblbd.com

STAKEHOLDER
ENGAGEMENT
Stakeholder engagement includes gathering and sharing information, dealing with

concerns and grievances from stakeholders, measuring the impact and importance
of different stakeholder groups, communicating back and forth through various
methods, and more. Maintaining an open and constructive dialogue with stakeholders
is essential for business. It's how we understand community expectations, identify
issues and discover opportunities to improve. Communication and understanding are
keys to any successful business, especially one with as many diverse stakeholders as
ours. By continually engaging with our wide range of stakeholders we can understand
what is expected of us, identify issues and discover opportunities to improve. In all
interactions with stakeholders, we are committed to being respectful, responsive, open
and authentic in our engagement on issues of mutual importance.
Our key stakeholders include:
Local
Communities Customers
Shareholders/ Employees
investors
MBL’S
STAKEHOLDERS
Business
Subsidiaries
Partners
Government
Board &
& Regulatory
Management
Authority

We value constructive feedback and engagement with a wide range of stakeholders. We take on board their feedback,
information and analysis to assist in the determination of ‘materiality’. Most recent engagements of MBL are shown in
the table below:
MBL’s Stakeholder Engagement Mechanism at a glance

Key issues and Concerns
Stakeholder Ways of Interaction Value Addition for MBL
for Stakeholders
•• Customer hotline 16225 •• Customers Queries, •• Affordability of banking, fees and interest
(24/7) Complaints and •• Reaching out to customers by widening
•• Customer Relationship suggestions our geographic footprint in terms of
Customers Management •• Good return from establishing a larger number of branches
•• Multi-channel engagement, deposits and SME centers /Agent banking/Sub-
including face-to-face •• Fast service delivery branch.
customer engagement with excellence •• Transforming existing branches/ unit
•• Customer workshops •• Product varieties offices to cater to diversified customer
requirements
•• Customer feedback catering market
channels (in-branch, email, demand •• Continuously innovating new products
contact centre, social •• Online banking and operational processes for reinforcing
media) solutions with customer benefit
•• Ongoing market research secured transactions, •• ALCO sits every month to decide pricing
and product innovation privacy and and rates based on market analyses
•• Customer Service
confidentiality •• All network nodes are run by online core
Enhancement Program & •• Ensuring better and banking system (CBS)
Complaints Management uniform services to •• E-products like SMS banking, EGP service,
Cell the customers E- commerce, E- payment solution,
•• Media campaigns/ •• Customer internet banking
advertisements interactions and •• Front desks and relationship managers
suggestions
•• Website information ensure fast and high quality service
updates delivery following one to one relationship
•• Proper actions are taken of customers
complaints if any service goes against the
customer service policy of the Bank
•• Quarterly/Half yearly •• Talents and •• 7,154 man hours training for human capital
Strategic Business performances in 2020 both physical & Virtual platform.
conferences physically/ Development •• Salary package adjusted in line with
Employees
virtual platform •• Regular training for market competitiveness and inflation
•• Training, workshops and updated rules & •• Work life balance
orientation program, regulation
•• Yearly performance bonus for employee
internal meeting, group •• Inflation adjustment motivation
emails in pay package
•• Intranet circulation planning •• Well set KPIs for performance and
inherent quality analysis
through MBL Web Portal •• Job description
(HRD Circular, Information setting as per •• All sorts of safety measures such as fire
Circular and Instruction individual skill extinguishers, separate stairs are available
Circular) Performance driven and smoke free premise
•• Physical fitness, Future career progression
Leadership Development •• Healthy working
Program, safe and clean environment and
working environment Policy formulation
•• Newsletter in the name of for safe working
‘MBL insight’ atmosphere
•• Future Leadership
Development
Program & Sports
Tournament

Key issues and Concerns

Stakeholder Ways of Interaction Value Addition for MBL
for Stakeholders
•• Policies formulation •• Goals and Strategic •• Review of market and environment before
•• Implementation of new focuses are based setting its strategic priorities ensuring
strategies considering on local business proper representation from subsidiaries
economic and business environment for transference.
Subsidiaries & regulatory
environment.
requirement
•• One-on-one meetings •• Proper compliance •• We ensure proper compliance and timely
•• Adhering to all local with laws & reporting to government bodies and
regulations and circulars regulations regulators
Government issued by Bangladesh Bank •• Timely reporting as •• Contributed Tk.4,693.04 million to
&
Regulatory
•• Strict ethics & compliance per requirement National Exchequer which significantly
Authority
with applicable laws, rules •• Timely payment of contributed to Government’s revenue
and regulations income tax and VAT collection
•• Directives, notifications, accurately •• Enhanced transparency

and guidelines
•• Meetings and discussions
with Board and Senior
Management
•• Submission of necessary
reports, returns and
statements
•• Decisions based on •• Governance •• At least one board meeting in every
financial and business principles, policies month, frequent executive committee
delegation of different & procedures meeting, audit committee meeting etc.
Board & levels formulation. •• Board members meet management on
Management •• Major decisions must be •• Strategic focus & value various occasions like annual & semi-
placed to board for creation, Strategic annual business conferences, bank’s
approval business planning anniversary celebration.
Procurement management, •• Fair trade, fair •• Free from any bias or coercion from
training and communication enlistment, influencing quarters
•• Sustainable and stable •• Fair play & competition to award work order.
Business growth of the bank •• Timely payment to vendors.
Partners
AGM, EGM, annual & semiannual •• Healthy return on •• Maintained attractive plough back ratio
report, ZOOM meeting, investments and •• Timely payment of debt with stated return
publishing quarterly financials, stable dividend policy
•• Established risk management culture
Shareholders/
announcement to DSE & CSE, •• Growing earnings
Press Conference and media •• Transparency & integrity in financial reporting
Investors •• Sound governance
releases, credit rating and PSI in
and risk management, •• Maintained consistent ratings through
newspapers financial commitments
ratings of the bank
based on overall •• Each queries of the investors meet up through
financial performances our share department efficiently and fairly
Promoting financial inclusion •• Provide banking facility •• Strongly consider environmental and social
both for banked and unbanked to geographically impact and restrain from adverse impact
people, CSR contribution- dispersed poor upon society
Local Scholarship to poor meritorious segment of the society •• Target segment is under-developed and
Communities students •• Benefit economy by under-privileged people
poverty reduction •• Services to old citizen, widow and disable
through banking beneficiaries
services to rural poor
people •• Significant contribution to education,
health, disaster management, art & culture,
•• Support under environmental and sports sector
privileged people
through Social Safety
Net programs

MATERIAL
ASPECT
Material Aspect Boundaries inside the Organization Boundaries outside the Organization
Introduce Agent Banking, Sub- Overall economy will have a positive vibe
Financial Inclusion
branch for unbanked people through augmenting economic activities
Reduction of Carbon emission and the

Energy Consumption Use of Solar and Natural Light
national GHG will be reduced
Environment Friendly Investments Encourage green investment Increase overall environment
Community Investment Ensure sustainable balanced growth Overall development of our society
Enhancement of human capital

Customer will be benefited through
HR Development through training, job rotation and
updated services
future leader development program

ENVIRONMENTAL
PERFORMANCE
Sustainable Environmental Management forms a part In continuance of our commitment to sustainability,
of Mercantile Bank’s strategy and business model. We Mercantile Bank took careful measures and implemented
understand that the true cost of waste is not just in its apt systems to enable us comply with all environmental
disposal – it encompasses the inefficient and unnecessary and social regulations relating to our banking activities and
use of resources like energy and water. Hence, we are operations. We continued to work towards improving our
committed to a clean environment and the fight against
sustainability programs and reducing our environmental
climate change. This commitment is reflected in certain
footprints.
aspects of our business process, such as analysis of the
social and environmental risks of our financing activities,
Paper Consumption
and measurement of our environmental footprint.
Across the Bank, we have automated almost all of our
Environmental awareness amongst employees at all levels
has been a key driver for the successful implementation processes, thereby, reducing the need to print. However,
of all our action plans. Furthermore, sharing of information if there is a need to print, we have ensured that eco-
at all levels with employees, business partners, regulatory printing practices are adopted. We also ensured that all
authorities and the public in general has further strengthened paper stationeries used in printing internal memos are re-
our resolve on responsible environmental stewardship. used, where possible.
Step # 1 Measure Output

Step # 2 Offset Paper Usage
Step # 3 Track the Impact
Also, transactions through our mobile and electronic resulted in substantial cost-savings. A total of 31,552.
banking platforms have increased significantly amongst Reams of paper was consumed in 2020, equivalent to
our customers. These approaches have significantly 101,603 kg (Assuming 3.20 kg per ream).
reduced our paper purchase by 32.35% and have

Conserving natural resources to help protect the planet 2020
BDT in million (Decrease) %
ELECTRICITY (6.64) -7.49%

WATER BILL (0.37) -5.60%
NATURAL GAS (0.03) -7.89%
GENERATOR
FUEL (1.63) -28.95%
PAPER
CONSUMPTION (9.41) -15.71%
MBL has developed a software for inventory to the GSD (General Service Department) concerned
management “Namely MBL-iRSM” where every officials where all requisition meticulously reviewed and
department has to create his departmental stationery approved accordingly. As a result MBL can have a good
uses, upon which departmental senior gradually control over stationery consumption.
approves it in to the system after that it will be notify
Solar Powered Branches
We have already installed solar panels in our 61 branches out 150 branches located at different urban and rural areas
where total available capacity of electricity is almost 55.85 KW.
Energy Savings
MBL ensures the maximum usage of natural daylight to reduce the energy consumption substantially in contrast with
other mainstream constructions. Moreover, energy savings bulbs consist of one third of the total lighting system. As a
result, more than 35% electricity i.e. Tk.664,000 is saved using the daylight throughout the MBL and its branches. E-mail
correspondence has been the focus of both internal and external communications with an aim to reduce the paper
consumption.

Energy Consumption BDT in Million
Type 2020 2019 2018

Electricity 82.05 88.69 88.36
Water Bill 6.24 6.61 6.59
Natural Gas 0.35 0.38 0.38
Generator Fuel 4.00 5.63 5.61
Other Utility Bills 1.47 1.27 1.27
Banking through SMS
SMS Banking service provides instant notification about clients’ transactions as and when it happens. It helps them to
keep a watch on their accounts with a round the clock service. Every debit or credit in their accounts over a limit desired
by them is intimated by SMS. MBL SMS Banking services offer basic banking services to customers for a very little use of
energy. In 2020, a total of 7,731,981 text messages were sent by MBL in response to customer’s transaction debit or credit.
This has enabled MBL to send and its customers to get their account information by using little energy compared to the
traditional way of getting account information by visiting branches.
Million Taka
Cost of Conventional Cost of Green Banking

Instruments Quantity
Practice Concept
1 E- Statement 105,239 0.10 Nil
2 SMS Alert 7,731,981 8.29 0.050
3 E- Fund Transfer 1825 0.0009 Nil
4 Digital Attendance 2,428 0.000785 Nil
5 E-Mail Correspondence 985,549 0.99 Nil
Net Savings Taka 6.62 Million
Financing Renewable Energy and Carbon offset Projects
During the year 2020, our total outstanding balances on green finance stood at Taka 1,510.2 million, where during the last
year it was BDT 808.7 million.

Water Efficiency effective initiatives for proper disposal and management
of paper, plastic, glass and can waste at its head office
Water is essential to our operations. We also take very and annexes. Since its commencement, we have attained
seriously our responsibility to carefully manage our water a significant reduction in the amount of waste generated
resources. Over the course of the year, we took significant that goes to landfills in these locations. This reduction was
steps to optimize our water consumption. Throughout the achieved through our aggressive awareness campaigns
Bank, we aim to halve our water usage in the coming years. on various platforms. Another contributor is the proven
We will continue to work towards improving our sustainability effectiveness of our onsite recycling bins, which
programs and reducing our environmental impact. encourage and enable the appropriate sorting of waste at
the source. We are looking to reduce our environmental
Diesel consumption
pollution in the coming years; as such, we are expanding
We used a total of 61,491 liters of diesel in the reporting the recycling initiative to our branches nationwide.
year. We are currently exploring other cleaner and greener
Compliance with Environmental Laws and
alternative means of power generation in order to reduce
Regulation
our diesel consumption further in the coming years.
Mercantile Bank did not suffer any fines, sanctions,
Solid Waste Management
penalties, queries – financial or nonfinancial– owing to
Over the years, the Bank has adopted sustainable waste non-compliance with environmental laws and regulations
management practices. In 2020, Mercantile Bank took prevailing in Bangladesh.
AWARENESS STICKER

ECONOMIC IMPACT
REPORT
An Economic Impact Report (EIR) examines the effect of an event on the economy in a
specified area, ranging from a single neighborhood to the entire globe. An economic
impact analysis attempts to measure or estimate the changes in economic activities in a
specified region, caused by a specific business, organization, policy, program, project,
activity, or other economic event. The effect that an event, policy change or market
trend will have on economic factors such as interest rates, consumer confidence, stock
market activity, or unemployment. Events such as regulatory changes, supply shortages
or natural disasters can have a significant economic impact due to the way that they
affect business activities.
We continue to change in MBL; we believe we can (BDT in Crore)

become the Bank of choice for all of our customers
and clients. Our approach delivers broader economic
benefits and more valuable services to our stake holders
in a unique way.
3,289.98
3,341.95
Capital Adequacy
3,068.58
2,955.16
2019
MBL is maintaining a strong capital base. Total eligible 2020
capital of the Bank stood at BDT 3,341.95 Crore (Solo
Total Eligible Capital Minimum Capital
Basis) as on December 2020 which is well above the Requirement (MCR)
minimum requirement of BDT 3,068.58 Crore as on the
same date. Capital Adequacy Ratio was 13.61% as on VALUE ADDED STATEMENT
December 2020 as compared to minimum requirement (BDT in million)
of 12.5% as per Basel III including buffer.
Particulars Dec-20 Dec-19
(BDT in crore)
Income from Banking
27,275.79 31,292.96
Services
Particulars Dec-20 Dec-19
Less: Cost of services &
-19,090.91 -20,547.04
Tier-1 2,128.45 2,009.89 Supplies
Value added by Banking
8,184.88 10,745.92
Tier-2 1,213.50 1,280.09 Services
Provision for loans &
Total Eligible Capital 3,341.95 3,289.98 (1,236.41) (3,875.25)
off – balance sheet items
Total Risk Weighted Assets Total 6,948.47 6,870.67
24,548.64 23,641.26
(RWA)
(BDT in Million)
Capital to Risk Weighted
13.61% 13.92%
Assets Ratio (CRAR) 6,948.47
6,870.67
Tier-1 Capital to RWA 8.67% 8.50%
Tier-2 Capital to RWA 4.94% 5.42%
Minimum Capital
3,068.58 2,955.16
Requirement (MCR)
Surplus/(Deficit) 273.37 334.83

2019 2020

Distribution of value addition
(BDT in Million)
Year 2020 Year 2019
Particulars
Amount % Amount %
To Employees & Directors 3,035.44 43.56 2,434.17 35.43
To Statutory Reserve 542.26 7.78 696.1 10.13
To General Reserve 150.0 2.15 - 0.00
To Government as Income Tax 550.00 7.89 1,305.00 18.99
To Expansion & Growth
Community Investment 303.41 4.35 156.77 2.28
Depreciation 811.19 11.64 799.23 11.63
Retained Earning 1576.16 22.62 1479.4 21.53
Total 6,968.46 100 6,870.67 100
Distribution of value addition

(BDT in Million)
22.62% Particulars
2020 2019
Total cost of average equity (b) 2,757.43 2,565.75
11.64%
Economic Value Addition (a-b) 640.31 3,485.01
4.35%
43.56%
7.89%
7.78% Invested Fund by Shareholders
2.15% (Amount in Million)
To Employees & Directors To Statutory Reserve To General Reserve
Particulars
To Government as Income Tax To Community Investment
2020 2019
Depreciation Retained Earning Shareholders' Equity 22,101.78 20,908.29
Add: Cumulative provision for 12,718.59 13,120.92
Economic Value Added Statement loans and advances and off-
balance sheet exposure
Economic Value Added (EVA) attempts to capture the true
economic profit of a company. EVA is an estimate of the Total Shareholders' Equity 34,820.37 34,029.21
amount by which earnings exceed or fall short of required Average Shareholders' Equity 34,424.79 32,031.78
minimum return for shareholders at comparable risks.
EVA is calculated by deducting the cost of equity capital
employed from the post-tax profit plus provision for loans Market Value Added Statement
and advances. Companies which earn higher returns
Market value added statement shows the difference
than cost of capital create value. Therefore, Shareholders/
between the total market value of the Bank and the capital
Equity providers are always conscious about their return
on capital invested. As a commercial banking company, contributed by shareholders i.e. total Book value of equity.
MBL is deeply concerned for delivering higher value to its A high Market Value Added indicates that the company
Shareholders/Equity providers. has created substantial wealth for the equity holders. The
share market value of the Bank stood at BDT 12,497.01
(BDT in Million) million whereas the book value of the share stood at
Particulars BDT 22,101.78.35 million resulting a negative Market Value
2020 2019
Added of BDT 9,604.77 million as on December 31, 2020.
Profit After Tax 2,161.32 2,175.50
Add: Provision for loans and 1,236.41 3,875.25
advances and off-balance No of Shares BDT in
Particulars Per Share
sheet exposure during the year Outstanding Million
Total Earnings (a) 3,397.74 6,050.75 Market value 984,016,217 12.70 12,497.01
Average cost of equity (based 8.01% 8.01%
on weighted average rate of 10 Book value 984,016,217 22.46 22,101.78
year’s treasury bond issued by
the Government of Bangladesh) Market value added -9,604.77
plus 2% risk premium

Market value added 2020 Contribution to National Exchequer
As a corporate entity, MBL pays tax and VAT on its own

22,101.78 income according to prevailing laws of the country. By
this way, the Bank has contributed extensively to the
government efforts in collection of revenue. During the
12,497.01
year, Bank has contributed an amount of Tk.4,693.06
million toward national exchequer in shape of tax and VAT
on its earnings. Besides the Bank deducts tax, vat, excise
duties etc. from various payments and deposits the same
to government exchequer.
Market value Book value
Market value added 2019 (BDT in Million)
20,908.00 Particulars Dec-20 Dec-19
Income Tax Payment on 1,160.63 1,487.14

Bank’s earnings
12,370.49
Income tax, VAT and Excise 3,449.54 3,627.12
duty deducted at source
from various payment and
services by the Bank
Income tax payment by the 82.87 95.01
employees
Market value Book value Total Payment 4,693.04 5,209.27
Though the financial performance of the Bank was

sound during the year 2020, depressed capital market
performance caused to negative Market Value Added. 2%
Payment of Dividends
MBL has continued to pay substantial dividends to its

74%
shareholders while ploughing back sufficient profits to 25%
fund growth and capital adequacy requirements. This
prudent dividend policy has contributed in building the
Bank’s shareholders’ funds to satisfactory levels and is
considered as one of the major funding sources of the
Direct Tax Paid by Bank Indirect Tax Paid by Bank
Bank’s rapid expansion. Income Tax Paid by Employee
Considering the performance of the Bank over the past

year, the Board of MBL has proposed 10% Cash and 5%
Stock dividend for the year 2020.
Dividend Payment History
16%
15% 15%
2018 2019 2020

MERCANTILE BANK
FOUNDATION
Mercantile Bank Foundation has begun operations organized, standardized, and sustainable manner.
since 2000 with a view to enforcing Bangladesh Bank’s
guidelines for carrying out broader Corporate Social MBF has been undertaking a range of activities over the
Responsibility (CSR) activity through the Foundation. The past twenty one years with the sole purpose of helping its
Foundation currently performs CSR programs in a more target people to improve the quality of life.
Provide facilities for treatment Initiatives in increasing social Distributions of blankets among
through hospitals, clinics, medical wellbeing and poverty alleviation the needy & depressed people
and eye camps
Provide/render monetary and/or other Providing scholarships to poor, Promoting educational, science,
assistance/help for the rehabilitation well-deserved students social and other related charitable
of people affected by natural and activities
other disasters
CORPORATE SOCIAL RESPONSIBILITY (CSR)

MBL’S CSR ACTIVITIES
Corporate Social Responsibility (CSR) has been an
inherited and inbuilt element of its culture from the
day the bank was founded. However it is not charity
but it is a core business strategy of an organization. MBL CSR
Always we presume to contribute to the community Activities
through different projects, but our main focus is to
help millions of underprivileged children and poor
people in Bangladesh. Bank promotes CSR activities,
apart from its own fund, through Mercantile Bank
Foundation, which acts as a helping hand to the
distressed people of the country. Investment in CSR
programs is always supported and encouraged by
the Board of Directors. Areas of CSR activities are
Education, Health & Medical research, Community
outreach, Disaster Management, Arts & culture and
development of Sports.

Donation for Societal improvement by CSR in Matrix:
(BDT in Million)
CSR Initiatives Donation %

Education 23.89 7.86%
Health 61.28 20.15%
Disaster Management 164.3 54.03%
Cultural Welfare 50 16.44%
Others 4.64 1.53%
Total 304.11 100.00%
Education
Mercantile Bank Abdul Jalil Education Scholarship
Education Scholarship program is an explicit expression of MBL’s motive towards building the nation through
extending hands of assistance to the future generation of the country. In this circumstance, Mercantile Bank
Foundation launched a Scholarship program in the name and style, “Mercantile Bank Abdul Jalil Education
Scholarship” for the meritorious and poor students across the country under the category of J.S.C, S.S.C and
H.S.C. In 2020, MBL awarded scholarship worth BDT 13.10 million among 856 poor & meritorious students who
passed in 2019. The details information of the education scholarship program is as under:
Category Scholarship Amount (BDT In Million)) No. of Beneficiary Tenure
J.S.C. 3.87 323 1 Year
S.S.C. 4.90 327 1 Year
H.S.C. 4.32 206 1 Year
Total 13.10 856
2020 2019
BDT 13.10 million BDT 15.56 million

856 Beneficiaries of Students 1,013 Beneficiaries of Students
Health and Medical Assistance

From the beginning, Bank provides financial support to different medical and health institutions. Apart from
institutional support, the Bank also provides financial assistance to individuals for their treatments. In 2020,
Bank contributed BDT 61.28 million to different individuals and hospitals.
2020 2019
BDT 61.28 million BDT 1.51 million

110 Beneficiaries individual & Institutions 108 Beneficiaries individual & Institutions

Abdul Jalil Hemodialysis Unit
Abdul Jalil Hemodialysis Unit is one of the parts of Mercantile Bank Foundation. There have a large number of
kidney failure patient at Naogaon district. But there was not available any treatment facilities in this area. So
insolvent people could not afford to come, especially, Dhaka for treatment. In this consideration Mercantile
Bank Foundation established Abdul Jalil Hemodialysis Unit at Naogaon Sadar Hospital in 2012.
Image of Abdul Jalil Hemodialysis Unit
Disaster Management
Blankets donation
MBL has donated 75,000 Pieces blanket to Prime Minister’s Relief and welfare fund for clod affected people as
part of Corporate Social Responsibility.
Chairman of Mercatile Bank Limited Mr. Morshed Alam, MP handed over blanket to Prime Minister’s Relief and welfare Fund.
MBL also distributed 125,000 Pieces blanket among the distressed people of the cold affected areas of the
country through its Branches.
Donation to Prime Minister’s Relief & Welfare Fund
Mercantile Bank Limited donated total amount of BDT 150.00 (One hundred fifty) million for Bangabandhu
Memorial Trust, assistance for COVID-19 affected people and Flood affected people to Prime Minister’s Relief &
Welfare Fund as part of Corporate Social Responsibility of the Bank.

Mercantile Bank Limited donated BDT 50.00 million to Bangabandhu Memorial Trust commemorating the birth centenary celebration of the
Father of the Nation Bangabandhu Sheikh Mujibur Rahman. A. S. M. Feroz Alam, Sponsor Director of Mercantile Bank Limited handed over the
cheque to the Honorable Prime Minister Sheikh Hasina at Gonobhaban on 06 January 2020. Finance Minister A.H.M. Mustafa Kamal, BAB’s
Chairman along with other representatives from several banks were present on the occasion.
Mr. Md. Quamrul Islam Chowdhury, MD & CEO of Mercantile Bank Limited handed over a cheque for Taka 50 million to the Prime Minister’s Relief
& Welfare Fund for flood affected people.

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Mercantile Bank Limited donated an amount of Taka 50 million to the Prime Minister’s Relief Fund against Corona virus. It is initiated as a part
of Mercantile Bank’s CSR activities to Prime Minister’s activities to prevent Corona virus. Mercantile Bank’s authority handed over the check to
Bangladesh Association of Bank’s (BAB) today.
Donation to Society for the Welfare of Autistics (SWAC)
Mercantile Bank Limited donated BDT 1 million to the Society for the Welfare of Autistic Children (SWAC) as part
of Corporate Social Responsibility of the Bank.

Donation to Child Day Care Centre
MBL has donated BDT 0.40 Million to child Day Care Centre of Privates Banks, Motijheel Dhaka
Image of Day Care Center at Motijheel contribute by Mercantile Bank Limited
The Arts: preserving cultural heritage and sponsoring the performing arts
Arts & Culture
Mercantile Bank always supports promotion of art and culture. As a recognized benefactor of culture, MBL
takes some non-profit initiatives every year. Cultural institutions have been donated to organize cultural events
in different times. Moreover, the Bank supports the writers, musicians and other performers in their inventive
and creative activities. As earlier, in 2020 MBL contributed to organize and celebrate different cultural and
traditional festivals.
Traditional Games and Sports
MBL always encourages the development of games and sports of the country. In different times, the Bank
has contributed to organize a variety of traditional games and sports. In 2020, Bank contributed to different
institutions/clubs to arrange games and sports.

HUMAN RESOURCE MANAGEMENT
REPORT 2020
MERCANTILE BANK LIMITED HR OVERVIEW DIVISIONAL OVERVIEW
MBL is focused on equal importance to its customers, Mercantile Bank’s Human Resource Management Division
employees and shareholders. To hire and retain qualified is responsible for Human Resource Planning, Staffing,
human resources according to need of the Bank, is Developing and Retaining of entire workforce of the Bank.
one of the important aspects. Thus realization of talent
MBL philosophy toward Human Capital: Caring for
potentialities of employees, respecting individual worth human resources is one of our core values. MBL views its
and dignity to ensure smooth career progress as well employees as Human Capital and believes that they are
as welfare orientation in Human Resource Policy and the key components to achieve its core objectives. MBL
practice have been emphasized. Mercantile Bank Limited priorities on corporate culture, excellent pay package and
is continuing its journey with 150 branches all over the other benefits. MBL emphasizes to improve the personal
country, with 4765 dedicated workforce. skills through intensive training and developments.
Challenges we face Responses we made

Ensuring work life balance •• Assigning work that are achievable
•• Standard working hour
Ensuring proper succession planning •• Necessary Training & Development opportunities
•• Delegation of authorities and responsibilities
Improving employee retention •• Blend of internal sources, external hires based on:
Recruitment of expertise employees
Process improvement
Ensuring employee motivation •• Attractive Pay scale, benefit packages, employee engagement,
recognition & fair promotion policy
Enhancing per employee performance •• Linking performance with reward
HR Focuses:
Talent acquisition and Succession Planning Training and Employee performance

retention Development measurement
Employee evaluation & Employee engagement & Work life balance Respect and Recognition
Promotion Job Satisfaction
Career Management & Succession planning in developing talent to replace executive, leadership or
MBL: There is a great opportunity for freshers as other key employees when they transfer to another role,
well as experience bankers for build-up their career leave the company, retire or die. MBL Human Resources
in Mercantile Bank Limited and in its subsidiaries. Division is the key driver in the planning of succession in
Succession planning in MBL includes the process of its different layers of position.

MBL follows four “E” approaches in Succession Planning
E (Experience): Considers E (Education): Emphasis on

previous experiences for various educational backgrounds
lateral entries according to need
E (Ethics): With a view E (Exposure): Opportunity to

to be the finest citizen interact with Senior Management
OPERATING ENVIRONMENT the organizational vision efficiently and effectively.

HR Division equips organization’s employees through
As all we know, COVID 19 hit the world economy severely proper induction, orientation, training and development,
and squeezed the growth drastically. Even in this challenge assignment. MBL HRD focuses on nurturing the skills and
environment, Mercantile Bank Limited has given reward competencies of the employees at various levels to meet
in the form of promotion to 214 employees, recruited current needs and expectations of the customers as well
several senior experienced bankers and expanded its as to develop themselves for future leadership. Finding
business by inaugurating MBL Islamic Banking Window, the right employees, developing, rewarding and retaining
MBL Agent Banking Division, Digital Banking & Innovation them are some of our highest priorities.
Department.
Main functions of Human Resources Division are
Human Resource Management Division deals with
organization’s most valuable assets – the people working •• Workforce planning
there, who individually and collectively contributes to •• Recruitment, Selection of fresh and experience
the achievement of objectives of the business. HRM candidates
function is converting invisible resources into visible
resources through ensuring proper utilization of working •• Recruitment of Outsourced, Contractual employees
force and ensuring proper working environment within •• Induction and orientation
the organization. To ensure proper working environment,
HRM Division is always concern with the employees’ job •• Joining, Transfer & Posting
security, job satisfaction, compensation package and •• Training and Development
other motivational factors.
•• Promotion and Reward
Technological, economic, geopolitical, demographic and
environmental forces are shaping how banking activities
•• Benefits administration
will be done. Thus MBL is doing its banking activities •• Performance appraisal
more openly, transparently, real-time, secured and deeply
integrated into customers’ lives and institutional clients
•• Separation Process (Termination, Resignation, Retirement)
operations. •• HR Database Management
MAJOR ACTIVITIES OF THE DIVISION •• Empowering Business Delegation
HR Division’s main function is to ensure availability of

•• Management of Pay and Allowances
right people at the right place at the right time to achieve •• Conducting Disciplinary Action

Auxiliary functions are
Main focus of MBL Human Resource Planning is systematically reviewing human resources requirement to ensure that
the required number of workforce with the required skills is available as and when needed. Main indicators of MBL
Human Resource Planning are:
•• Confirmation, increment of employees •• Formulating Corporate Organogram

•• Maintenance of Biometric Attendance of the employees •• HR Automation
•• Employee Leave Management •• Job rotation policy
•• Return, Statement, Report to various regulatory authorities •• Internship placement

MBL Human Resource Planning
Main focus of MBL Human Resource Planning is systematically reviewing human resources requirement to ensure that
the required number of workforce with the required skills is available as and when needed. Main indicators of MBL
Human Resource Planning are:
Efficient workforce is available to be

deployed in the Bank to meet forecast work Promote equal employment opportunity.
demand
The opportunity for appropriate career

Employee job satisfaction.
development.
Relevant Human Resources Information

Ensure employee health, well-being and
System is available to inform the
healthy working environment.
management decision making.
MBL Human Resource Recruitment and 7. Specific Competency Training: Various operational
Selection Process training is arranged to build up necessary
competencies and to gain operational Excellencies.
MBL Management is committed to provide equal
8. MBL Employees’ Performance Appraisal: which
employment opportunity to all as well as in identifying the
includes-
unique strengths of each individual which brings to the
roles they carry out and the self development. •• Recognize the efforts and contribution of
current staff.
MBL Human Resource Development Strategy:
•• Reward staff directly linked to performance.
1. Orientation for fresh employees: MBL HRD arranges
orientation program for fresh recruited workforce. •• Motivate staff to improved performance.
2. Product Training: The product training is provided •• Orientation of staff towards goal achievement.
like deposit product training, loan product training, •• Attract quality employees with an effective
and product operational training to help the related performance management system.
staff to learn more about the products those are
providing by the Bank. EMPLOYEE PERFORMANCE MEASUREMENT
3. Skill training: The Bank provides a lot of skill related The main purpose of Human Resource Management is to
training e.g. credit workshop, sales and negotiation create and to keep balance between the Bank’s mission,
skills, project management, etc. to enhance skill of vission and the interests of the employees. HRD’s activities
the staff in particular aspects. always ensure that:
4. On job training: Staff members are continuously •• Skilled people are available in the Bank to meet
involved in the learning process in the form of on-job forecast work demands.
training. Thus a lot of on-job training opportunities and
•• The Bank’s structure provides with opportunity for
job rotation to increase staff’s exposure are providing.
appropriate career development.
5. Self-learning: The bank provides various opportunities
•• Relevant workforce data is readily available to inform
for employees self-learning such as study leave, management for decision making.
provides financial rewards for Banking Diploma,
CDCS, CSDG, CAMS and various professional MBL always emphasizes on safe and healthy working
certifications. environment. The Bank always emphasizes on the safety,
wellbeing of its staff and communities.
6. Management Development Training and conference:
In this training program, the employees are Our fight against COVID-19
given strategic perspectives and business goals,
management goals and patron focus abilities to The COVID-19 pandemic is causing an unprecedented
better understand and manage their jobs. disruption to the world economy. The pandemic has also

hit our country’s economy and jeopardized impressive 13. Formed a Quick Response Team.
achievement in economic development. In this period, to
14. The Central Quick Response Team was also advised
overcome the situation, our Bank always tries to provide the Head of Branches to remove the guest chair
better service to its customers by keeping the Branch open from all the desks and also advised to maintain social
with maintaining all safety measures against COVID-19. distance with the customers.
Mercantile Bank Limited is always concerned about the
15. Everyone entering the Branch must wear mask.
employee’s health safety and to protect employees from
COVID-19, all possible safety measures have been taken 16. No mask, No Service slogan was introduced.
by the Bank and also employees are being instructed to 17. As per guidelines of the Central Quick Response
attend office by maintaining proper personal safety and Team; the PPE, Hand Sanitizer, Mask, Hand Gloves
hygiene measures. The following safety measured has and other necessary equipment have already been
been taken by the Bank against COVID-19: distributed to Branches.
1. Establishing Coronavirus Front Desk at entrance of 18. Medical Retainer had to attend the office for 03
Head Office. days in a week to help our officials for any health
assistance in this crisis moment.
2. Ensuring using of Hand Sanitizer while entry.
19. Bank has taken the following measures for quick
3. Checking body temperature of everybody before recovery of the infected employees:
entering Head Office.
a) Our Medical Retainer maintained regular
4. Rationing visitors entry into Head Office. communications with the infected employees
for medical support.
5. Ensuring Premise Disinfection / Deep Cleaning:
Especially door handles, table tops, keypads of ATM b) The Quick Response Team has followed up
booths etc is doing in a regular basis. their health condition time to time. The Quick
Response also sent food for them in their critical
6. Attendance / Access Control: All Offices were time.
advised to maintain Register Book for attendance
c) Every COVID-19 infected employees have got a
purpose during this time.
fruit basket as a gift from the MD & CEO of the
7. Head Office Floor Doors was kept open during the Bank.
office hours. d) A policy was included in welfare fund for financial
8. Providing gloves & Masks, Hand Wash/ Sanitizer to all support of COVID-19 infected employees.
employees.
At present almost all of the COVID-19 infected employees’
9. Sanitization for Bank Vehicles. health condition are stable and tested negative for
Coronavirus. Tk.1.50 crore was already disbursed as
10. Food or any other external delivery by vendors to the
financial support for the COVID-19 infected employees of
employees in Bank’s Head Office was banned. the Bank.
11. Detection of any Corona Virus affected/exposed
Strategic Focus
Official(s)/Staff(s):
Mercantile Bank believes that human resources are main
In case of detection of any Coronavirus affected official(s)/
catalysts. Main strategic focus of Bank’s HR Division is
Staff(s), he or she will be sent to Quarantine Leave.
empowering business and its people who drive it. Hire,
And the employees who already associated with
Train, Retain of employees are our motto. MBL’s Human
him was sent for quarantine leave. Moreover, Head Resource Management strategy is related with goals,
of Divisions/ Regional Heads/Branches keep close mission and vision of the Bank.
contact with them over phone and they can join
office after getting medical clearance from the The Bank’s aim is to create an environment where
competent authority. Human Resources Division employees stay motivated, empowered and feel
recognized for their works. In 2020, the Bank recruited a
ensured the compliance.
good number of new employees. We started 2020 with
12. Official Correspondence through Email and File positive changes to our socio-economic landscape and
Share rather sending hard copies. renewed hope for higher levels of inclusive growth.

MBL’s main strategic focuses are
Optimum utilization of Human Evaluate HR capability Better work culture

Resource in the Bank in global context
Estimate Bank’s future HR
To achieve competitive advantage Realizing excellence through
requirements
and superior profitability human resources
Determine the tools required for
HR can make a direct impact on Today’s talent, Tomorrow’s
employees to complete the job
MBL’s growth success
Implement the Human Resource
Ensure best HR practices Increasing our competitive
Management Strategy
advantage by aligning strategy
with people and culture.
Develop a thorough understanding Evaluation and corrective
of Bank’s objectives action
Performance measurement system in MBL •• Arrangement of Sports Events
Performance Appraisal in MBL is a part of career •• Provide good health coverage for all employees
development which consists of regular reviews •• Encourage employee training, workshops, and
of employee performance. Other aspects are education
considered, such as organizational citizenship behavior,
accomplishments, potential for future improvement,
•• Team-Building Exercises
strengths and weaknesses, etc. Performance Appraisal Respect and Recognition
has been conducted annually through obtaining
Annual Confidential Report (ACR). MBL will move to MBL respects the rights of employees and believes
Key Performance Indicator [KPI] based performance in providing them a safe and conducive working
measurement of the employees soon. environment. MBL endeavors to provide satisfaction with
working conditions and remunerations, heal and safety,
Employee evaluation & rewards in MBL opportunity to contribute to society.
MBL declares promotion every year for eligible Officers Fostering health and safety in MBL
and Executives which motivates, inspires and helps to
develop themselves for greater achievement of the 1. Neat and clean work place
individual and organizational goals. Promotions are made 2. Green Banking
on the basis of “Merit - Cum- Seniority”.
3. Proper cooling system.
Work life balance 4. Ensuring pure drinking water
MBL always concern for maintaining proper work life 5. Leave plan of the employees
balance. Both employees themselves and the Bank
6. In house Medical treatment
contribute to maintain work life balance.
7. No excess pressure of works
•• Employees complete their assigned job in time
8. First Aid Box
•• MBL provides Maternity leave to female employees
with medical allowance 9. Day care center for the employees children.
•• Encourage Vacations Diversity of Workforce in MBL

•• Provide Leave Fare Assistance to the employees
MBL has a diversified work force and meets the challenges
•• Diversified work force of work force diversities in the following ways:
•• Childcare Services •• Functional orientation
•• Arrangement of Picnic •• Treat each employee as an individual

•• Making corporate hierarchy 2. Region wise employee distribution in 2020
•• Job specifications & Job designing
No. of Percentage to
Division
•• By developing Policies and Practices Employees Total
Dhaka 1640 67.55%
•• Formulating Code of conduct
Chattogram 410 16.89%
•• Non-discrimination policy Sylhet 60 2.47%
•• Compensation and benefits policy Rajshahi 128 5.27%
Barishal 60 2.47%
•• Zero-Tolerance Policy
Khulna 52 2.14%
Employees’ leave management in MBL Rangpur 64 2.64%
Mymensingh 14 0.57%
MBL has a leave policy under which employees avail Total 2428 100.00%
various leaves depending on their requirement. Such
leaves are: Casual Leave, Sick Leave, Privilege Leave, 3. Employee diversities of MBL as per Head Office &
Quarantine Leave, Maternity Leave, Mandatory / Branches Comparison in 2020
Compulsory Leave, Study Leave, Leave without Pay where
applicable. Recently Web Based Leave Management No. of Employees
system has been implemented. Office
Female Male Total % as to total
Maternity Leave Head Office 90 474 564 23.23%
Branches 485 1379 1864 76.77%
The competent authority of the Bank grants to a female
Total 575 1853 2428 100.00%
employee, maternity leave with full pay for a maximum
period of six months according to policies formulated by
Head office Branches
Bangladesh Bank.
23.23%
Human Resource Management Information
System
Human Resource Management Information System is

a data base that ensures all employee records in a data
base purposefully and systematically. MBL uses a robust 76.77%
database management system that ensures pinpoint
accuracy and enterprise-level security for our data that
helps management to take prompt decision. In our Head office Branches
data base, we keep the records of Employee personnel
details such as address, date of birth, job title, length
of service, salary, recruitment details and qualifications 4. Maternity Leave statistics
both academic and professional held, timesheets and
training courses attended, leave availed. Employees job Particulars 2019 2020
related data base such as salary, confirmation, increment, Maternity Leave Availed 54 52
promotion, transfer, biometric attendance, bonus, tax, Return to job 54 52
leave faire assistance, training related data base, etc. % of Return to Job 100% 100%
HUMAN RESOURCES STATISTICS

5. Segment of the Employee by age in 2020
1. Human Resources at a glance in MBL as on
31.12.2020:
1167
Employment Nature Male Female Total

734
Regular 1864 564 2428
Contractual 176 47 223 380
Outsource 2084 30 2114 147
Total 4124 641 4765
20 years-below 30 years-below 40 years-below 50 years and

30 years 40 years 50 years above
6. Diversity of employees according to Designation, 8. Year wise financial assistance to employees from
Female & Male 2020 welfare fund
Sl Designation Female Male Total Benefit & 2019 2020

Sl Number of Amount in Number of Amount in
1 Managing Director & CEO 1 1 Bill
Beneficiaries BDT Beneficiaries BDT
2 Additional Managing Director 1 1 Retirement
1 5 46,50,000.00 3 26,00,000.00
Benefit
3 Deputy Managing Director 5 5 2 Medical Bill 230 81,09,312.00 169 60,39,564.00
Senior Executive Vice Maternity

3 37 10,90,155.00 26 7,55,944.00
4 6 6 Bill
President
4 Stipend 230 20,40,000.00 239 44,57,000.00
5 Executive Vice President 9 9 Death
5 2 15,00,000.00 1 7,00,000.00
Benefit
6 Senior Vice President 2 20 22 Special
6 5 22,50,000.00 2 4,00,000.00
Benefit
7 Vice President 5 49 54
Incentive for
7 344 1,18,23,416.00
8 First Vice President 2 83 85 [COVID 19]
Total 1,96,39,467.00 2,67,75,924.00
9 Assistant Vice President 11 74 85
10 First Assistant Vice President 29 176 205 9. Year wise financial assistance to outsources
employees from welfare fund:
11 Principal Officer 48 202 250
12 Senior Executive Officer 72 198 270 2019 2020

Benefit &
Sl Number of Amount in Number of Amount in
13 Executive Officer 139 396 535 Bill
Beneficiaries BDT Beneficiaries BDT
14 Officer 125 207 332
1 Medical Bill 129 20,89,060.00 142 23,10,896.00
15 Assistant Officer 107 305 412 Maternity
2 3 50,910.00 2 36,975.00
Bill
16 Management Trainee Officer 3 22 25
3 Stipend 104 7,50,000.00 138 20,49,500.00
17 Trainee Assistant Officer 23 50 73
Death
4 3 9,00,000.00 8 24,00,000.00
18 Driver 22 22 Benefit
Special
5 1 2,80,000.00
19 Electrician 2 2 Benefit
Incentive for
6 32 6,80,000.00
20 Contractual 9 25 34 [COVID 19]
Total 575 1853 2428 Total 37,89,970.00 77,57,371.00
7. Employee position by Gender in MBL in 2020 10. Employee training related statistics in 2020:
Position Female Male Total Training Total Course Total

Total
Category Conducted Participants
Executives 20 250 270
Local- MBTI 43 2098 270
Non-Executives 555 1603 2158 Local- Outside
48 95 2158
MBTI
Total 575 1853 2428
Foreign 2 7
11. Year wise recruitment statistics in MBL:

11%
Categories 2018 2019 2020
Fresh [TAO, MTO] 177 172 54
Experience Bankers 17 17 10
89%
Contractual 15 12 8
Total 209 201 72

Executives Non-Executives

Human Resource Accounting 2020
BDT in million
DEPOSITS PER
EMPLOYEE
101.02
LOANS AND ADVANCES/INVESTMENT
PER EMPLOYEE
102.55
OPERATING PROFIT
PER EMPLOYEE
1.63
TOTAL VALUE OF HUMAN CAPITAL
AS PER PRESENT VALUE OF FUTURE
18,589.79
EARNINGS MODEL
(LEV AND SCHWARTZ)
Human Resources Management Division •• To visualize the vision & objectives of the Bank.
Outlook 2021 •• Optimum utilization of human resources of the Bank.
MBL strongly believes that “Our employees are our asset”. As •• Completion of HR Automation and software up-
all we know, COVID 19 hit the world economy severely and gradation.
squeezed the growth drastically. Even in this challenging •• Succession planning to create future leaders for the Bank.
environment, Mercantile Bank has given promotion 214 •• Broaden appropriate training and learning program
employees, recruited several senior experienced bankers to upgrade the human resources of the Bank in a
and expanded its business by inaugurating MBL Islamic global standard through using digital platform.
Banking Windows, MBL Agent Banking Outlets, Digital •• To implement KPI [Key Performance Indicators]
Banking Services, MBL Asset Management Limited. Main based performance evaluation for all employees.
outlook of HRD 2021 will be as follows:
MBL has entered into 2021 with a more positive outlook.
•• HRD will remain attentive to develop inter-personnel MBL HRD believes that all employees may contribute to
skill of each employee. the strong growth track of the Bank to survive strongly.

RESPONDING TO
COVID-19 CHALLENGES
MBL’s key activities for responding COVID-19 challenges
24/7 Support of a Full Formation of ‘Quick Moral Support from Financial support for
Time Doctor. Response Team’ MD & CEO by giving COVID -19 affected
for fighting against a fruit baskets to Employees & Staff (Both
COVID-19. COVID-19 tested positive Hospitalization and
employees. isolation.
Special Incentive given Leave during isolation Minimum staff deployed By Rotation Office.
for Employees & Staff for period not deducted for customer services
COVID-19 as per directive from employees’ as per Bangladesh Bank
of the Bangladesh Bank. personal allocation. Instruction.
Routinely disinfection Maintain WHO Guideline After initially testing

of work place by the for COVID-19 during positive for COVID-19,
professional. office time. rejoin office after testing
2 times at an interval 7
days.
•• 417 employees.
Total Fruit baskets distributed to
•• Provided Financial Supports to 344 permanent employees & 32 support staff for being COVID-19 infected.
Disinfection activities at MBL office premises Temperature assessment and sanitization activities Awareness sticker

CUSTOMER
SATISFACTION
MBL, as a truly customer centric bank, always gives interactions with branch employees or calls into
paramount importance to provide better customer contact center “16225”
experiences with fast and efficient transaction
With a view to bringing continuous improvement in the
processing, easy access to relevant information and quality of customer services and strengthening the corporate
personalized service- across channels, from ATMs, governance structure, MBL has already constituted Customer
enriched websites and mobile apps to face-to-face Service & Complaints Management Cell at head office.
Objectives of the of Customer satisfaction
Identifying Brand Measuring Ways of

Strength Customer Development
Satisfaction
Key Activities for Better Customer Service
Arranged training Prepared the guidelines Prepared & distributed 4 Conducted survey on 10
program through for “Customer Services booklets to the branches: Islamic Banking windows
Mercantile Bank Training and Compliant I. Code of Conduct in respect of Customer
Institute (MBTI) for the Management” Service.
II. Customer Charter
officials of the branches
for hassle free/smooth III. Service Standard
Customer Services and IV. Customer
Complaint Management Awareness Program
efficiently

MBL organized a day long training course titled “Customer Service and Complaint Management on 10.02.2020. Md. Quamrul Islam Chowdhury, Managing
Director & CEO of the bank, inaugurated the training.
Customer Charter
MBL has designed its “Customer Charter” to make the Customer Charter are available on request to all
conscious the customers about their general rights, customers at all branches, own ATM booths and at MBL's
obligations, grievance approach process and thereby web site: http://www.mblbd.com.
help customers taking their own decision. Copies of
Customer Awareness Program

MBL performs the following activities as a part of Customer Awareness Program:
a. MBL publishes or declares b. MBL arranges meeting, c. During the year 2020, MBL
customers alert and seminar, workshop or any provided training program
precautionary message, other non-formal programs to its 119 employees in title
guidelines etc. on products periodically to convey of “maximizing
and services time to time awareness message and Customer Satisfaction
through brochures, leaflets alert tips to the customers
and advertisement in relating to banking products
communication channels and services.
on general banking, on
Internet banking, on loan and
advances, on local and foreign
remittances etc.

MBL Complaint Resolution Process:
Acknowledgment Screening of Departmental Appeal and Response and

complaints actions for review closure
resolution
Availability of Customer Complaints Cell:
Customer may easily raise their complaints to our dedicated desk Central Customer Services & Complaints Management
Cell (CCS & CMS), Head Office physically or the following email address:complaint@mblbd.com

MARKET
PERFORMANCE
The capital market of Bangladesh is considered have undertaken a good number of initiatives
to be one of the emerging markets in the to meet Bangladesh’s development financing
context of the global financial system. The requirements with a particular focus on
market has immense potential for country’s developing long term infrastructure financing
industrialization, development of infrastructure
in particular and economic growth in general. The and strengthening financial stability through
extent of volatility in the capital market is more promotion of capital market. After taking
pronounced in Bangladesh than elsewhere in necessary steps Bangladesh Capital Market
the world. The government and the Bangladesh witnessed ups & down trend throughout the
Securities and Ex-change Commission (BSEC) year in 2020.
Investor - Relationship Capital Value Building Process
Maximizing Investor Returns
Capital Compliance to Investor Regulations & Investor

Investment Respecting Rights
Reporting Transparency
Investor Decision Making

Stock Exchange Listing
Mercantile Bank Limited is listed in Dhaka Stock Exchange (DSE) and Chattagram Stock Exchange (CSE) since 2004.
Stock exchange code for Mercantile Bank Limited share is “MERCANBANK”.
Shareholders’ Information
MBL’s Investor Base
MBL’s investor base currently comprises of 984,016,217 voting shares distributed among sponsor/director, general public,
institutions and a few foreign investors as given below. The total number of shareholders is 23,080. In 2019 whereas last
year total number of shareholders was 24,435.
Analysis of Shareholders
Sl. As at December 31, 2020 As at December 31, 2019

Particulars
No. No. of Shares Held % No. of Shares Held %
1 Sponsor / Director 351,036,061 35.67% 372,811,021 39.78%
2 General Public 377,841,464 38.40% 346,659,377 36.99%
3 Institution 211,577,414 21.50% 159,226,488 16.99%
4 Foreign 43,561,278 4.43% 58,461,416 6.24%
Total : 984,016,217 100.00% 937,158,302 100.00%

Share Trading
According to Dhaka Stock Exchange, the Share trading of Mercantile Bank are-
Particulars 2020 2019 2018 2017 2016

No. of transactions 52,444 74,418 118,881 173,691 37,476
No. of shares traded 258,245,865 268,665,334 443,827,306 1,002,634,884 222,406,717
Value of shares traded (Tk. Million) 3,140.88 4,387.70 8,830.51 22,408.14 2,780.02
Financial Calendar Announced On

Audited consolidated results for the year ended 31 December 2019 22-03-2020
Unaudited consolidated results for the 1st quarter (Q1) ended 31 March 2020 15-06-2020
Unaudited consolidated results for the 2nd quarter (Q2) ended 30 June 2020 27-07-2020
Unaudited consolidated results for the 3rd quarter (Q3) ended 30 September 2020 27-10-2020
Distribution of Dividend Details

Dividend (Cash - Stock) 11% Cash & 5% Stock
Announcement Date March 22, 2020
Record Date June 02, 2020
Distribution Date (General Share Holders): Stock Dividend July 6, 2020
Cash Dividend June 25, 2020
Distribution Date (Sponsor Share Holders): Stock Dividend July 6, 2020
Cash Dividend October 01, 2020
Notice of 21th Annual General Meeting June 04, 2020
21th Annual General Meeting June 24, 2020
Stock Detailed
Particulars DSE CSE

Stock Symbol MERCANBANK MERCANBANK
Scrip Code 11128 22023
Listing Year with DSE & CSE 2004 2004
Market Category A A
Electronic Share Yes Yes
Market Lot (Nos.) 1 1
Face Value (Taka) 10 10
Total Number of Shares (31-12-2020) 984,016,217 984,016,217
Year End Closing Price on December 31, 2020 is Tk. 12.70 DSE Trading Days in 2020: 208
Market Share
(Amount in Million)
Year 2020 2019 2018 2017 2016 2015
Market Capitalization 12,497.01 11,433.33 14,668.56 20,489.42 11,161.32 7,909.01
Market Capitalizationa (Miilion in BDT)
20,489.42
14,668.56
12,497.01
11,433.33 11,161.32
7,909.01
2020 2019 2018 2017 2016 2015

Market Price of Share-2020 Per Share value in Taka
Monthly Highest & Lowest Price in Taka in CSE Monthly Highest & Lowest Price in Taka in DSE
13.5
13.5
13.6
13.8
13.3
13.2
13.5
12.9
12.9
12.7
12.8
12.8
13.1
12.9
12.8
13
12.7
11.9
11.8
12.2
10.6
10.6
12.1
12
11.6
12
12
11.6
11.7
11.2
11.4
11.6
11.3
11
11.5
11.4
10.6
10.6
10.6
9.9
10.6
10.6
10.6
10
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Highest Lowest Highest Lowest
The Pattern of Shareholding
a) Parent or Subsidiary or Associated Companies and other related parties (name-wise details) : Nil
b) Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal
Audit & Compliance and their spouses and minor children (name-wise details);
Name of the Directors, their spouse & As at December 31, 2020 As at December 31, 2019
SL
minor children Shares held % Shares held %
i. Directors
Morshed Alam, MP 24,506,619 2.49% 23,339,638 2.49%
1 Spouse: Bilkis Nahar 334,623 0.03% 318,689 0.03%
Minor Children : Nil Nil Nil Nil
Al-haj Akram Hossain (Humayun) 21,357,210 2.17% 20,340,200 2.17%
2 Spouse: Ferdousi Begum 2,461,832 0.25% 2,344,602 0.25%
M. Amanullah 24,241,164 2.46% 23,086,824 2.46%
3 Spouse: Tazneen Aman 1,100,000 0.11% 377,000 0.04%
Md. Anwarul Haque 22,181,134 2.25% 21,124,890 2.25%
4 Spouse: Nargis Anwar 2,041,933 0.21% 1,944,699 0.21%
A.S.M. Feroz Alam 30,807,198 3.13% 29,340,189 3.13%
5 Spouse: Yoko Inamori Nil Nil Nil Nil
Md. Abdul Hannan 22,496,873 2.29% 21,425,595 2.29%
6 Spouse: Israt Jahan 3,055,220 0.31% 2,909,734 0.31%
A.K.M. Shaheed Reza 48,384,697 4.92% 47,509,237 5.07%
7 Spouse: Zobeda Begum 253,128 0.03% 241,075 0.03%
Md. Nasiruddin Choudhury 19,734,107 2.01% 18,794,389 2.01%
8 Spouse: Khaleda Shahzadi 492,947 0.05% 469,474 0.05%
Al-haj Mosharref Hossain 23,552,881 2.39% 22,431,316 2.39%
9 Spouse: Feroza Begum 3,118,325 0.32% 2,969,834 0.32%
M.A. Khan Belal 19,756,537 2.01% 18,815,751 2.01%
10 Spouse: Morzina Khan Monzu 432,088 0.04% 411,513 0.04%
Dr. Md. Rezaul Kabir Nil Nil Nil Nil
11 Spouse: Dr. Ismat Rahman Nil Nil Nil Nil

As at December 31, 2020 As at December 31, 2019
SL Designation
Shares held % Shares held %
ii. Nil Nil Nil Nil
MD & CEO
Spouse / Minor Children of MD & CEO Nil Nil Nil Nil
iii. Nil Nil Nil Nil
Company Secretary
Spouse / Minor Children of CS Nil Nil Nil Nil
iv. Nil Nil Nil Nil
CFO
Spouse / Minor Children of CFO Nil Nil Nil Nil
Md. Zakir Hossain
v. Nil Nil Nil Nil
DMD & HIAC
Spouse / Minor Children of DMD & HIAC Nil Nil Nil Nil
c) Executives [top 5 (five) salaried employees of the company, other than the Directors, Chief
Executive Officer, Company Secretary, Chief Financial Officer and Head of Internal Audit]
As at December 31, 2020 As at December 31, 2019

Sl Designation
Shares held % Shares held %
Mati Ul Hasan
1 Nil Nil Nil Nil
AMD & CRO
G.W.M Mortaza
2 Nil Nil Nil Nil
Adil Raihan
3 Nil Nil Nil Nil
Shamim Ahmed
4 Nil Nil Nil Nil
Md. Mahmood Alam Chowdhury
5 Nil Nil Nil Nil
d) Shareholders holding ten percent (10%) or Year wise summary of unclaimed Cash Dividend
more voting interest in the company (name-
wise details): Nil Sl. No. Year Unclaimed Cash Dividend (Tk.)
1 2003-2011 1,856,099.11
2 2012 4,564,215.11
Dividend Distribution Policy 3 2013 14,338,115.25
4 2014 8,921,056.60
As per BSEC Directive No. BSEC/CMRRCD/2021-386/03 5 2015 8,957,537.45
Dated: 14 January 2021, Dividend Distribution Policy has
6 2016 10,179,505.54
been discussed in note 2.10.7 to the financial statements
of Mercantile Bank Limited. 7 2017 10,482,128.73
8 2018 19,128.79
Unclaimed Dividend 9 2019 10,884,376.04
Following tables show unclaimed (Cash &Stock) dividend
Total amount 70,202,162.61
up to 2019:

Year wise summary of unclaimed Stock Dividend
Sl. No. Year Unclaimed Stock Dividend Remarks

1 2003 29,250
2 2004 33,410
3 2005 36,590
4 2006 33,650
5 2007 31,520
6 2008 49,580
7 2009 68,040
8 2010 19,412 Right share issued
9 2010 68,090
10 2011 91,991
11 2012 39,384
12 2013 64,449
13 2014 - No Stock Dividend declared
14 2015 - No Stock Dividend declared
15 2016 31,298
16 2017 32,791
17 2018 103,694
18 2019 39,594
Total 772,743
Market share
Deposit Growrh Loan Growrh

13.50% 12.43%
5.11%
1.90% 2.18%
1.72% 1.84%
-0.95%
Country Growth MBL Growth MBL Market MBL Market Country Growth MBL Growth MBL Market MBL Market
(2020 Over 2019) (2020 Over 2019) sahre 2020 sahre 2019 (2020 Over 2019) (2020 Over 2019) sahre 2020 sahre 2019
Annual Report 2020 and other information about MBL may be accessed on MBL’s website www.mblbd.com. MBL
provides copies of Annual Reports to the Bangladesh Securities and Exchange Commission (BSEC), Bangladesh Bank,
Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) for their reference. Respectable stakeholders may
read them at their public reference room or library.
Shareholders’ Inquiries
Share Department
Head Office
61 Dilkusha Commercial Area
Dhaka-1000
PABX: 02 9559333 Ext. 209
Email: share@mblbd.com

GRIEVANCE
REDRESSAL
Mercantile Bank Limited strongly believes in holding the stakeholders in a smooth and engaging partnership. We are
proactively following the redressal policy of high quality stakeholders to manage all forms of concerns, disputes in an
accessible and fair manner. Mercantile Bank Limited strongly believes that every shareholder receives equitable treatment.
We resolve every concern of shareholders on a priority basis and have dedicated ourselves to providing the correct process
to address the grievance of shareholders within the time frame provided by the Bank.
Shareholder’s Perspective
Communicate to
Queries/ Review all concerned shareholder
MBL's redress system deals with the Complaints/ quarries and after redressal by
grievance raise by give feedback
following: shareholder accordingly
share department
Receiving complaints for non-receipt of

dividend payment,
Customers’ Perspective
Transfer of shares from suspense account to
BO account of shareholders. Customers are among Bank’s key stakeholders. As per
our Customer Service Policy and Customer Acceptance
Grievance for not receiving the Annual Report.
Policy (CAP), we are very mindful of the demand of
Clarification of all price sensitive telephone
customers and are always ready to serve them our best.
information
Like investors, we also address queries and complaints
Questions and clarifications about recent from our customers through our appropriate department,
or upcoming price sensitive records over division or unit. General Banking Division (GBD) is centrally
telephone etc.
responsible for all complaints resolve.
Employees’ Perspective
MBL Shareholders redressal process:
Employees are the Bank’s principal resource, human
capital. We’re committed to providing our employees with a
Investor/shareholder grievances must be
comfortable work environment to enrich their productivity.
handled with respect and in a timely manner.
We have different Grievance Resolution Policy and Women
Communicate to the shareholders for Anti-Harassment Policy to address problematic problems in
collection of the dividend payment. the workplace and create a healthy and gender responsive
Revalidate the dividend warrants upon working environment. Our Department of Human Resources
demand. takes the necessary steps to redress if any adverse situation
Correction of bank account details while arises. We did not receive any substantial complaints about
sending dividends through BEFTN system our employees in 2020.
Re issue of dividend warrants, in case of failure

Redressal point for Shareholders
to send dividend through BEFTN system
Issue shareholding certificate, dividend Mercantile Bank Limited
certificate as and when necessary E-mail or Share Department
letter must be sent to all investors who have
61 Dilkusha Commercial Area, Dhaka-1000
complained in writing
PABX: 02 9559333 Ext. 212, 113, 520
Request for e-TIN number in case of cash
dividend. Email: share@mblbd.com


LETTER FROM THE BOARD OF
DIRECTORS PRESENTED
BY THE COMPANY SECRETARY
Dear Valued Shareholders,
It is our immense pleasure to present the Corporate Governance Report of Mercantile Bank Limited (MBL) on behalf of
the Board of Directors for the year ended December 31, 2020.
Stance towards Corporate Governance
At Mercantile Bank Limited, our commitment to corporate governance is a journey of continuous prudent as well as
timely improvements towards achieving the highest standards of governance by taking into account the developments
in the regulatory, business and internal workplace environments alike. This stance of our Board, Management and all the
employees across the Bank enables us to ensure that the organization carries out its business in a responsible manner
leading to long-term sustainability of the Bank. Our take on governance which is a one beyond a mere ticking of boxes
is showcased by this report.
Outline of the Corporate Governance Report
The report portrays how the Board of MBL discharged their governance duties effectively with meticulous compliance
of applicable regulatory framework during the year under review. In this regard, the key Corporate Governance rules
applying to MBL are the Corporate Governance Code Notification No BSEC/CMRRCD/2006-158/207/Admin/80 dated
3 June, 2018 issued by Bangladesh Securities and Exchange Commission (BSEC) in exercise of the power conferred by
section 2CC of the Securities and Exchange Ordinance, 1969 (XVII of 1969), BRPD Circular no. 11 dated October 27, 2013;
issued by Bangladesh Bank, Bangladesh Secretarial Standards (BSS) issued by the Institute of Chartered Secretaries
of Bangladesh (ICSB) and the global best practices applicable for Banks. The said compliances are also reviewed and
certified by the independent auditors, M/s. Suraiya Parveen & Associates, Chartered Secretaries, Financial & Management
Consultants and opined through Certificate of Compliance to the Shareholders as per requirement of BSEC guidelines.
However, the Corporate Governance Report along with the compliance status is enclosed with our Annual Report 2020.
In addition, the report demonstrates the overall responsibilities of Board which include setting the MBL’s strategies,
overseeing, and supporting management in their day-to-day running of the business, performance monitoring and
being safeguard interest of shareholders.
Adopting best industry practices
Our aim is to raise corporate governance standards to a level that is at par with global standards and ultimately contribute
to the development of Bangladesh economy. Hence, we continue to refine our corporate governance policies in a
continuous manner and looks to benchmark the best practices followed by national and international organization and
regulatory bodies.
We welcome engagement with our stakeholders and look forward to your valuable feedback in order to continue our
commitment to further improve on our corporate governance philosophy on a continuing basis.
On behalf of the Board
Sincerely,

Company Secretary

CORPORATE GOVERNANCE
REPORT
Overview: philosophy. In implementing the framework for long

term value creation, MBL has established a foundation
During the year 2020, the Bank continues to maintain of governance excellence which fortifies its information
the highest level of standards in corporate governance. gathering and decision making capabilities, enables it to
This is to a large extent driven by the Board of Directors discharge its duties towards its stakeholders with utmost
and the Senior Management Team. Most importantly,
responsibility. MBL gives utmost importance to key
it is driven by the strong values that lie at the core of
parameters of corporate governance such as Board system
MBL’s culture. MBL also strongly believe that such high
and its independence, function of Board sub-committees,
standards allow the Bank to earn the respect and trust
fair financial reporting, disclosure and compliance, and
of the stakeholders which translates into sustainable
consistency of shareholders value enhancement.
growth in the share value.
As a locally incorporated Bank, MBL’s Corporate
Corporate Governance Benchmarks
Governance framework has been developed and
MBL believes that measures to implement good corporate enhanced based on the basic principles and best
governance must be in place and ingrained in the Bank’s practices outlined in the following:
Regulatory Benchmarks on Corporate Governance Internal Benchmarks on Corporate Governance

The Bank Company Act, 1991 (amended up to 2018) Vision, Mission, Strategic Objectives, Core values, Business
Ethics & Corporate Philosophy
Relevant provision/clause of Companies Act 1994 Articles of Association
Corporate Governance Code Notification No. BSEC/ Code of Conduct
CMRRCD/2006-158/207/Admin/80 dated 3 June, 2018 issued by
Bangladesh Securities and Exchange Commission
Listing Regulations of Dhaka Stock Exchange and Chittagong Stock Board and Board Sub Committee Terms of Reference (ToR)
Exchange
Bangladesh Bank BRPD Circular no. 11 dated October 27, 2013 Internal Circulars
Other relevant circulars, directions and guidelines published by Internal Policies
Bangladesh Bank
Corporate governance principles for Bank published by Bank for Manuals
International Settlements (BIS)
G20/OECD Principles of Corporate Governance Guidelines
Local and Global best practices
Four Pillars of MBL’s Corporate Governance ensure and achieve excellence through professionalism,
social responsiveness, sound business practices
MBL’s philosophy on Corporate Governance is to bestow and optimum efficiency. This in turn enables MBL to
a high standard of accountability, fairness, transparency maintain a high level of business ethics to maximize the
and independence for performance at all levels and to shareholders’ value and to protect their interest.
Accountability Fairness Transparency Independence
•• Ensure that •• Protect •• Ensure timely, •• Procedures and

management is Shareholders rights accurate structures are
accountable to the disclosure on all in place so as to
•• Treat all material matters, minimize, or avoid
Board shareholders including the completely conflicts
•• Ensure that the including minorities financial situation, of interest
equitably performance,
Board is accountable ownership •• Independent
•• Provide effective re- and corporate Directors i.e. free
dress for violations governance from the influence
of others

Highlights of Corporate Governance 2020
Reformation of Pursuing Well-organised 21st Healthy Dividend Reviewing &

Director of the appropriate board Annual General Declaration of approval of the
Board procedures Meeting conducted 15% (proposed) banks policies,
procedures,
key matrics and
realigning them as
& when necessary
in line with the
MBL’s strategic plan.
Governance Structure of Mercantile Bank Limited
Approval Appointment
Shareholders External Audittor
Bangladesh Bank
Recommendation Board of Directors
Risk Management
Company Secretary (CS) Board Audit Cell Executive Committee Audit Committee
Committee
• Board Division Managing Director & CEO

• Share Department
• Human Resources Division Chief Risk DMD Chief Small Business Chief Anti Money Chief Operating Chief Financial
• Treasury Division (Front Office) Officer Officer (CSBO) Laundering & Officer (COO) & Officer (CFO)
(CRO) Compliance Officer Head of ICCD
• Corporate Affairs Division
(CAMLCO)
• MBL Training Institute
External Auditor Appointment Delegation Responsible to
Board of Directors a balanced mix of attributes to the Board, and facilitates

broad deliberations and independent judgment in the
The Board of MBL comprises of 12 (twelve) elected Board decision-making process.
of Directors including the ex-officio Managing Director
& CEO of a high caliber with diverse backgrounds and Indeed, Board of MBL is well structured with a Chairman,
two Vice Chairmen and one Independent Director. Mr.
experience. All the Directors of MBL possess a wide array
Morshed Alam, MP is the Chairman, Al-Haj Akram Hossain
of knowledge and understanding of both macroeconomic
(Humayun) and Mr. M. Amanullah are the Vice Chairmen
and microeconomic factors affecting the Bank, domestic of the Board. The Chairman and 10 (ten) other Directors
and international professional experience, operational are Non-Executive Directors from which one (one) is
experience, and financial, legal, entrepreneurial & Banking Independent Director and the CEO (Managing Director)
skills. Their mix of skills, knowledge and expertise bring is an Executive Director.
Sl Date of First Date of Last Interval(s) Between Each

Name of the Director Status with the Bank
No. Appointment Appointment Subsequent Appointment
Chairman 28/05/2006 - 30/03/2009,
1 Mr. Morshed Alam, MP 29/05/1999 26/06/2019
Non-executive Director 28/03/2012 - 26/04/2013
Al-haj Akram Hossain Vice Chairman
2 29/05/1999 20/05/2018 02/08/2003 - 10/06/2008
(Humayun) Non-executive Director
Vice Chairman
3 Mr. M. Amanullah 29/05/1999 05/07/2020 18/05/2005 - 30/03/2009
Non-executive Director

Sl Date of First Date of Last Interval(s) Between Each

Name of the Director Status with the Bank
No. Appointment Appointment Subsequent Appointment
Chairman, Executive
Committee & Risk
4 Mr. Md. Anwarul Haque 29/05/1999 20/05/2018 18/05/2005 - 29/03/2008
Management Committee
14/06/2004 - 30/05/2007,
5 Mr. A.S.M. Feroz Alam Non-executive Director 29/05/1999 22/07/2020
30/03/2017 - 28/03/2018
6 Mr. Md. Abdul Hannan Non-executive Director 29/05/1999 26/06/2019 18/05/2005 - 26/04/2013
7 Mr. A.K.M. Shaheed Reza Non-executive Director 26/09/2000 05/07/2020 27/04/2013 - 24/06/2014
Mr. Md. Nasiruddin
8 Non-executive Director 26/09/2000 26/06/2019 15/7/2012 - 25/06/2019
Choudhury
28/05/2006 - 30/03/2009,
9 Al-haj Mosharref Hossain Non-executive Director 05/01/2003 05/07/2020 28/03/2012 - 26/04/2015,
30/03/2017 - 28/03/2018
10 Mr. M.A. Khan Belal Non-executive Director 30/03/2008 26/06/2019 15/7/2012 - 25/06/2019
Independent Director
11 Dr. Md. Rezaul Kabir 29/09/2020
Mr. Md. Quamrul Islam MD & CEO
12 24/02/2019
Chowdhury Executive Director
1.1 MBL’s Policy on Appointment of Directors •• Approving the strategic direction of the Bank;
All the Directors except independent Director and the •• Appointing and determining the duration,
CEO were elected by the shareholders of the company remuneration of the MD & CEO;
and the CEO is appointed by the Board of Directors
with the approval of the Bangladesh Bank. Independent
•• Evaluating the performance of the MD & CEO;
Director is appointed by the Board and approved by the •• Succession planning for the Board, MD & CEO and
shareholders in the AGM. Bank’s Top Management Team,
MBL always complies with the direction of the regulatory •• Determining Bank’s dividend policy and capital
authorities regarding the appointment of Directors. structure;
Directors are appointed in compliance with BRPD Circular
no. 11 dated October 27, 2013 issued by Bangladesh •• Approving Bank’s risk management strategy,
Bank, Corporate Governance Code Notification No framework and monitoring their effectiveness;
BSEC/CMRRCD/2006-158/207/Admin/80 dated 3 June,
2018 issued by Bangladesh Securities and Exchange
•• Considering the social, ethical and environmental
impact as part of strategy formulation.
Commission (BSEC), relevant provisions/clauses of
Companies Act, 1994, Bank Company Act, 1991 (amended 1.1.2 Code of Conduct for the Board of Directors
up to 2018), Articles of Association of the Bank and
other applicable regulatory frameworks. With regards to The Board of Directors follows a code of conduct which
nomination, removal and casual vacancy of the Directors, was adopted to provide guidance to Directors to perform
Bank follows all relevant rules and regulations of the their duties in an honest, responsible and business like
respective regulatory bodies. The members of the Board manner and within the scope of their authority, has said
are elected each year in the Annual General Meeting for in the laws of country as well as Memorandum and
(AGM) by the Shareholders of the Bank. Articles of Association of the Bank.
1.1.1 Roles and Responsibilities of MBL’s Board of 1.1.3 Retirement and Re-election of Directors
Directors
According to Section 91(2) of the Companies Act 1994
The business and affairs of the Bank are managed under and clause 106, 107, and 108 of the Articles of Association
the direction and oversight of the Board, which also has of the Bank, 04 Directors retired before the 21st Annual
the responsibility to periodically review and approve the General Meeting (AGM) held on June 24, 2020 and all
overall strategies, business, organization and significant of the retiring Directors were eligible for re-election as
policies of the Bank. The Board also sets the Bank’s core Director at the AGM.
values, adopts proper standards to ensure that Bank
operates with integrity, and complies with the relevant S l .
Name of Directors Mode of Change
rules and regulations. No.
1 Mr. M. Amanullah Retired and Re-elected
Key responsibilities in summary are: 2 Mr. A.K.M. Shaheed Reza Retired and Re-elected
•• Overseeing the sound and prudent management of 3 Al-haj Mosharref Hossain Retired and Re-elected
the Bank; 4 Mr. A.S.M. Feroz Alam Retired and Re-elected

In addition, some other changes in Directorship during 1.3 Board Effectiveness
the year were as follows:
MBL’s Board plays a fiduciary role for setting the strategic
Sl. Name of Date of
Remarks direction and long-term goals of the company. The
no. Directors Change
1 Dr. Md. 16/08/2020 Office of the Director vacated as Board’s responsibilities include decision-making on major
Rahmat he completed his 2nd tenor as business strategies; appointment and confirmation of the
Ullah Independent Director of the Bank
Bank’s leaders; approval on big funding and investment
2 Dr. Md. 29/09/2020 Bangladesh Bank accorded
Rezaul approval for appointment as proposals, annual budget and financial plans; and reviews
Kabir Independent Director of the Bank to ensure MBL’s long-term success for the benefit of the
3 Dr. Md. 04/10/2020 Dr. Md. Hamid Ullah Bhuiyan has stakeholders. The Board assures that effective policies
Hamid been appointed as the Chairman
Ullah of Financial Reporting Council, are in place and sound decisions are made to ensure
Bhuiyan Bangladesh (FRC) by the Govt. of MBL’s smooth operation. Regular meeting of the Board is
Peoples’ Republic of Bangladesh.
That’s why Office of the Director held, at least once in a month. In 2020, 22 (twenty two)
vacated. Board Meetings were held. At these meetings, the Board
reviews the Company’s financial performance, corporate
1.2 Adequate representation of non – executive strategy, business plans, potential strategic acquisitions
Directors or alliances, strategic or significant operational issues and
As per guideline of regulatory bodies, Mercantile Bank significant matters attended to by Board committees. The
maintains adequate representation of non-executive Board also reviews the Company’s long term corporate
Directors in the Board. The Managing Director is the only strategy and business plans and budget, including
Executive Director in the Board of Directors of the Bank.
principal issues and challenges.
All other Directors are non-executive Directors.
MBL’s Board effectiveness has been greatly enhanced
1
through: careful forward planning of Board-related
activities; Board meetings being run in an efficient
1 manner; regular assessments of Board performance;
having a Board succession plan; and the effective use of
sub-committees (Executive Committee, Audit Committee
10
and Risk Management Committee).
Non-executive Director Non-executive independent Director The Board of MBL has structured and operated in such a
Executive Director (Ex officio MD & CEO) way so that it can meet its strategic objectives efficiently.
Composition Structure
Diversity Strong & ethical leadership
Broad range of skills & experience Three sub-committee
Appropriate balance of independence
MBL’S
BOARD
Boardroom Dynamics EFFECTIVENESS Governance Practices
Open dialogues & debates Oversight of Management
performance
Access to management & Board/Management
information Focus succession planning
on reputation Candid self-evaluations
1.4 Independence of non-executive Directors None of the Directors of the Board, except the Managing
from day to day operations Director & Chief Executive Officer, directly get involved
in the supervision of Senior Management Team or any
All Directors are responsible for bringing independent other executive duties and day-to-day operations of
judgment on issues of strategy, performance, resources MBL; rather, they provide their strategic direction and
and standard of business conduct. Non-Executive guidance to the management in the meeting of the
Directors are responsible for providing independent Board and its committees.
judgment on the proposals made by the Managing
Director & Chief Executive Officer.
1.5 Different position of the Chairman and the Board of Directors subject to obtaining permission from
Chief Executive Officer Bangladesh Bank.
The functional responsibilities of the Chairman of the 1.6 Roles and responsibilities of the Chairman
Board and of the Managing Director & CEO are kept
separate and independent of each other. The Chairman The Board elects one of the Non-executive Directors as
of the Bank is elected by the Directors of the Bank and Chairman. Present Chairman is Mr. Morshed Alam, MP
the Managing Director & CEO is appointed by the who became Chairman on July 04, 2019.
Roles and Responsibilities of the Chairman

Leadership to the Board The Chairman provides leadership to the Board, ensures that the Board works effectively and
discharges its responsibilities and ensures that all key and appropriate issues are discussed by the
Board in a timely manner.
Oversight of the affairs of MBL Sometimes the Chairman conducts on-site inspection of Bank-branch or financing activities
under the purview of the oversight responsibilities of the Board. He has the right to call for
any information relating to Bank’s operation for investigation into any such affairs and thereby
submit such information or investigation report to the meeting of the Board or to the Executive
Committee and, if considered necessary, with the approval of the Board, he may adopt pragmatic
initiatives with reference to the set rules through the MD & CEO. Besides, any complaint raised
against the CEO is required to be apprised to Bangladesh Bank through the Board along with the
statement of the MD & CEO.
Clear, concise and focused The Chairman is primarily responsible for drawing up and approving the agenda for each Board
Agenda setting meeting, taking into account where appropriate, any matters proposed by the other Directors
for inclusion in the agenda. The Chairman may delegate the drawing up of the agenda to the
Company Secretary.
Ensure all Directors properly The Chairman ensures that all Directors are properly briefed on issues arising at Board Meetings
briefed and also ensures that Directors receive adequate information in a timely manner.
Active Contribution The Chairman encourages all Directors to make a full and active contribution to the Board’s affairs
and take the lead to ensure that the Board acts in the best interests of the Bank.
In addition, the Chairman facilitates the effective contribution of Non-executive Directors in

particular and ensures constructive relations between Executive and Non-executive Directors.
Effective communication with The Chairman ensures that appropriate steps are taken to maintain effective communication with
shareholders shareholders and that the views of shareholders are communicated to the Board.
1.6.1 Independence of Independent Directors reviewed as part of the Board’s annual assessment. In
addition, evaluation of the Board also takes place at the
Mercantile Bank complied with relevant guidelines of AGM by the Shareholders.
Bangladesh Bank circulars, rules and regulations of the
Bank Companies Act, 1991 (amended up to 2018) and 1.8 Annual Evaluation of the Managing Director
guidelines of Bangladesh Securities and Exchange & CEO by the Board
Commission regarding composition of its Board of
Directors. While appointing new Directors Mercantile Bank Managing Director & CEO’s performance is evaluated
emphasizes the mix of knowledge, skills, experience and annually through aligning with business strategies of
perception. The Directors are elected by the shareholders MBL. Targets are set at the beginning of every financial
in AGM. In case of nomination, removal, casual vacancy year by the Board which is in line with the short- medium-
and alternate Directors, Mercantile Bank follows all and long-term objectives of MBL. Then performance is
relevant rules and regulations. The Bank’s non-executive evaluated at the end of financial year. The CEO is also
Directors are independent of management and free from evaluated on an annual basis and is also given Key
day to day business of the bank. Performance Indicators (KPI’s) for the years ahead.
MBL Board of Directors clearly defined and approved
1.7 Annual Appraisal of the Board’s Performance the roles, responsibilities and duties of Chief Executive
Officer (CEO).
The Board members have always taken decisions that
have benefitted the Bank as a whole and they have At the end of each financial year, the Board evaluates the
always performed their duties accordingly. The Board set targets and the actual performance Key evaluation
conducts an annual assessment of the performance indicators for CEO as well as Management i.e. Profitability,
and effectiveness of the Board as a whole and of its Yearly budget achievement, NPL ratio, Return on Equity,
Committees and individual Directors. Performance of Return on Assets, Earning per Share, Capital Adequacy
each Committee of the Board is initially discussed and Ratio, CAMELS Rating etc. are the common ones which
reviewed within each Committee and then subsequently are reviewed by Board of Directors on monthly basis.

Distribution of time spent in Board Meeting regulations issued by the regulatory authorities; so that
they could effectively discharge the responsibilities as a
Distribution of time spent in Board Meeting Director of the Bank.
25%
10%
To assist Board members for formulating right strategies
and effective plans for exploring both internal and
external opportunities and challenges.
25%
For this purpose, training at home and abroad especially
on the Corporate Governance is encouraged by the
20% Board. As such, whenever opportunities arise, Bank
20%
utilizes the same to train and orient its members.
Strategic Planning Performance Monitoring
Governance and Risk Management
1.10 Financial Acumen, Accounting Knowledge
Financial Reporting Processand Internal Controls Others
The Board as a collective is well-equipped to guide

1.9 Policy on Training of Board of Directors and Expertise ofstrategy
Directors
the business and of MBL in an efficient
Mercantile Bank is fully committed to maintain highest way.
standards of Corporate Governance and professionalism.
Most of the Directors of the Bank are on the Board for The Board of Directors of MBL comprises of members
many years. They have acquired enough knowledge and who have optimal mix of skills, expertise and experience
acumen to lead the Bank well to the path of progress. in finance, economics, management, business
administration, marketing and law etc. Majority of
Every Director is given appropriate induction when first
appointed to the Board with regard to the affairs of the other Directors are either successful entrepreneurs or
Bank and laws and regulations applicable to the Bank. seasoned professionals, are also well conversant in the
Further, MBL has developed its training policy in order to field of business, economics and administration. Board
attain following objectives; of Directors of MBL can devise the appropriate policy
for the growth of the Bank while having expertise skills,
To empower and equip the Board with skills and attitudes ability to perceive matters in a bigger perspective and
required to perform their challenging tasks and play their
adequate independence to review the management in
role in a transparent, objective and ethical manner as per
a sensible manner. Members of the Board also possess
the best corporate governance practices.
experience in finance and banking thus there is sufficient
To keep update related to Banking business such as financial acumen and knowledge within the Board to
relevant laws, policy guidelines, circulars, rules and offer guidance on matters of finance.
No. of Directors
Skill Category Explanation
1 2 3 4 5 6 7 8 9 10 11 12
Entrepreneurship,
Being successful entrepreneurs and
Business Leadership &
industrial undertaking
Development
Development and oversight of
Strategy
execution of strategic objectives
Financial services Corporate, Retail and SME banking
Experience experience
Accounting, internal and external
reporting, audit, capital markets
Financial Acumen
and funding, able to assess the
effectiveness of financial controls
Oversight of risk frameworks and
Risk Management practices which identify and manage
key risks
Development of and investment in IT
Information
infrastructure, adaptation to digital
Technology change and innovation
Corporate
Governance Commitment to the highest standards
and systems of governance
Oversight of operations and

Legal and Compliance obligations in a highly-complex and
regulated environment

1.10.1 Length of Professional Experience independent judgment to bear on the issues and
decisions at hand.
All members of MBL’s Board are extensively accomplished
in their respective fields and have professional experience 2.0 Board Committee
of over 30 years.
To increase efficiency and allow deeper focus in specific
1.11 Board meeting areas, Board established following three specialized
Board committees in line with BRPD Circular No. 11 dated
The Board normally meets on monthly basis, and the
27 October, 2013;
meeting dates are scheduled well in advance to enable
the Directors to plan ahead. When required, the Board i. Executive Committee
meet on ad hoc basis to consider urgent matters. ii. Audit Committee and
Mercantile Bank as per requirement of BSEC conduct
Board Meetings and record the minutes of the meetings iii. Risk Management Committee.
as well as keep the required books and records in line
The committees are created and mandated by the Board.
with the provisions of the relevant Bangladesh Secretarial
Each committee has specified roles and responsibilities
Standards (BSS) as adopted by Institute of Chartered
that set out in line with Bangladesh Bank, Bangladesh
Secretaries of Bangladesh (ICSB).
Securities and Exchange Commission (BSEC) and other
In addition, the Board considers strategic matters at each regulatory guidelines.
Board meeting, the Board also discusses our strategic
plan and approves Bank’s overall strategic direction on an 2.1 Executive Committee
annual basis.
The Executive Committee (EC) of the Board of MBL has
The Board also conducts a half year review of Bank’s been formed with the members of the Board to continue
strategy. The Board conducts workshops on specific the urgent and daily or routine works between the intervals
subjects relevant to our business throughout the year. of two Board meetings. Executive Committee performs
Board meetings are characterized by robust exchanges according to their terms of reference determined by the
of views, with Directors bringing their experience and Board of Directors.
Appointment and Composition of the Executive Committee (EC)
i. Members of the committee has been nominated by the Board of Directors from themselves;
ii. The executive committee has been comprised of following 07 (Seven) members;
Status with the Status with the Educational Meeting

Sl. no. Name
Bank Committee Qualification Attendance
B. Sc. Engg. (Civil),
1 Mr. Md. Anwarul Haque Director Chairman 34/34
BUET
2 Mr. A.S.M. Feroz Alam Director Member Graduate 28/32
3 Mr. M. Amanullah Director Member Graduate 33/33
4 Mr. Md. Abdul Hannan Director Member Engineer 34/34
5 Mr. A.K.M. Shaheed Reza Director Member M.Com 33/33
6 Al-haj Mosharref Hossain Director Member Graduate 32/33
7 Mr. M.A. Khan Belal Director Member M.Sc. (Chemistry) (DU) 23/23
iii. Company secretary of the Bank is the secretary of the Executive Committee.

Qualifications of the Member of Audit BSEC/CMRRCD/2006-158/207/Admin/80 dated 3 June,
Committee 2018 issued by Bangladesh Securities and Exchange
Commission (BSEC), DSE & CSE listing regulations,
Bank’s own policies, procedures, manuals and other best
and Expertiseofofthe
All members Directors
Audit Committee
practice corporate governance guidelines and standards.
are suitably qualified and having expert
knowledge of Finance, Banking, Management,
Audit Committee takes up the responsibilities to supervise
Economics, Accounting and Law.
the management and control of various risk factors
coming up from Banking operation. The Committee work
•• Integrity, dedication, and opportunity to spare time
to strengthen the internal control system and to act as a
in the functions of committee have been considered
connecting force between internal and external auditors
while nominating a Director to the committee ;
in order to bring a disciplined Banking operation. Audit
ii. Each member is capable of making valuable and Committee reviews the financial reporting process,
effective contributions in the functioning of the accounting policies & principles, hiring of external
committee; auditors, significant related party transaction, the system
of internal control and management, the audit process,
iii. To perform his role effectively each committee compliance with laws and regulations, and its own codes
member has adequate understanding of the of business conduct.
detailed responsibilities of the committee
membership as well as the Bank’s business, Internal Audit activity investigation/retain
operations and its risks and external counsel
iv. All members of the audit committee of the Board The Audit Committee established terms and guidelines
of MBL are “financially literate” and they have so that it could function effectively and smoothly. These
extensive knowledge and expertise in the field terms and guidelines were created to define the roles and
of Finance, Banking, Management, Economics, responsibilities of the Audit Committee. The Committee
Accounting and Law. is also empowered to investigate/enquiry employees and
retain external counsel when required.
Our Independent Director, Dr. Md. Rezaul Kabir was
appointed as an Independent Director of Mercantile Bank Members are Non-Executive Directors
Limited in September 2020. He is an Associate Professor
of Finance and Coordinator of the MBA Program at the All members of the Audit Committee are Non-executive
Institute of Business Administration (IBA), University Directors. No executive of the Bank is eligible to become a
of Dhaka. Before that he was the Coordinator of IBA’s member of the Audit Committee. In addition, no member
Executive MBA Program. He was awarded both his MSc of Executive Committee has been nominated as the
and PhD degrees by Aston University, United Kingdom. member of the Audit Committee.
He completed his doctoral degree under the prestigious
‘Commonwealth Scholarship and Fellowship Plan’. He has Head of Internal Control & Compliance Division’s
successfully undertaken consultancy assignments on a Access to Audit Committee
wide range of management issues. A few of his clients
MBL’s ICCD has a broad scope of work to investigate at
include Skills for Employment Investment Program (SEIP),
all levels. Audit Unit under ICCD is independent from
Ministry of Finance; Access to Information (a2i) Program,
the Management with a direct access to the Board of
Prime Minister’s Office; Police Reform Program (PRP),
Directors and the Audit Committee of the Board. ICCD
Ministry of Home Affairs.
has the authority to propose initiatives and changes
He worked as a seasonal lecturer at Aston University, directly to the Board of Directors. Accordingly, The Board
United Kingdom for almost two years. He was also a of Directors formulates policy for the Bank.
Visiting Scholar at Queen’s University Belfast, United
Kingdom. He has been relentless in his pursuit to remain Recommendation for appointment of External
up-to-date with the latest knowledge and research in his Auditors
field and has participated in many training programs,
The Audit Committee does an extensive review on the
workshops and conferences in different countries around
audit work done by the auditors after the audited financial
the world.
statements have been signed. The Audit Committee
Terms of Reference (ToR) for Audit Committee evaluates the performance of auditors extensively and
ensures that there were no threats to independence or
The ToR of the Audit Committee of MBL has been any other issues with the auditors. The Audit Committee
specified in line with the provisions of BRPD Circular scrutinizes the applications of the auditors and
No. 11 dated 27 October 2013 issued by Bangladesh recommends for appointment/reappointment of auditors
Bank, Corporate Governance Code Notification No for the next year.

Meetings of the Audit Committee to committee members well in advance before each
meeting;
•• The Audit Committee has conducted 8 (eight)
meetings during the year 2020 and has detailed
•• All decisions/observations of the committee are
noted in minutes and
discussions and reviewed session with the Head of
ICC, Head of Internal Audit, External Auditors regarding •• The Audit Committee instructed the management to
their findings, observations and suggestions with follow those suggestions and monitored accordingly
corrective measures on the related areas and on other from time to time.
issues of Bank affairs that need improvement;
Roles and Responsibilities of Audit Committee
•• The quorum of the meeting of the Audit Committee
is constituted in presence of either two members or In compliance with BRPD Circular No. 11 dated 27 October
two third of the members of the Audit Committee, 2013 issued by Bangladesh Bank, Corporate Governance
whichever is higher, where presence of an Code Notification No BSEC/CMRRCD/2006-158/207/
independent Director is a must;
Admin/80 dated 3 June, 2018 issued by Bangladesh
•• To ensure active participation and contribution by Securities and Exchange Commission (BSEC), the role of
the members, a detailed memorandum is distributed Audit Committee of the Board of MBL is following:
Others Financial
Reporting
AUDIT
Compliance COMMITTEE Internal
Audit
ROLE
External Internal
Audit Control
Audit Committee Role on Financial Reporting including approval of the Internal Audit and
Compliance Plan and reviewing of the Internal
•• Overseeing the financial reporting process;
Audit and Compliance Report;
•• Reviewing the audited financial statements with
•• Reviewing the adequacy of internal audit function;
management and the external auditors to ensure
that the financial statements are fairly presented in •• Guiding and reviewing “Internal Audit Process and
conformity with the accounting standards set by the Procedure”;
regulatory authority in all material aspects;
•• Monitoring whether internal audit working
•• Meeting with management and the external auditors independently from the management;
to review the
financial statements before their
•• Reviewing the activities and organizational structure
finalization;
of the internal audit function and ensure that no
•• Discussing with management the MBL’s major financial unjustified restrictions or limitations are made;
risk exposures and the steps that management has
•• Reviewing whether the findings and
taken to monitor and control such exposures;
recommendations made by the internal auditors are
•• Guiding Bank’s management in view of optimum duly considered by the management or not;
usage and allocation of financial resources.
•• Encompasses the examination and evaluation of the
adequacy and effectiveness of MBL system of internal
Audit Committee Role on Internal Audit
controls, risk management procedures, governance
•• Monitoring Internal Audit and Compliance processes and the quality of performance in carrying
process to ensure that it is adequately resourced, out assigned responsibilities

Audit Committee Role on establishing Internal being correctly administered throughout the Bank. The
Control Audit Committee is committed that internal controls are
well conceived, properly administered and satisfactorily
•• Reviewing the measures taken by the management
monitored by the Bank in 2020.
for building a suitable Management Information
System (MIS) including computerization system and Audit committee Role in compliance with laws
its applications; and regulations
•• Regarding the reports relating to fraud, forgery,
There are several regulatory authorities, primarily
deficiencies in internal control or other similar
issues detected by internal and external auditors Bangladesh Bank, who are associated with the Bank’s
and inspectors of the regulatory authority and place operation and performance. MBL is obliged to act
it before the Board after reviewing the corrective in accordance with applicable laws and regulations.
measures taken by the management; The Audit Committee supervises and guarantees the
Board, that the Bank obeys all the applicable laws, rules
•• Evaluating whether management is setting the and regulations of various regulatory authorities. The
appropriate compliance culture by communicating Audit Committee takes all measures to ensure that
the importance of internal control and the
MBL complies with all laws and regulations and that all
management of risk and ensuring that all employees
statutory dues are being settled timely.
have understanding of their roles and responsibilities;
•• Reviewing internal control strategies recommended Involvement of Audit committee in the external
by internal and external auditors have been audit function
implemented by the management;
The Audit Committee analyses the audited financial
•• Reviewing the existing risk management procedures for statements with management and the external auditors
ensuring an effective internal check and control system. to ensure that the Company’s financial statements are
objectively presented in compliance with the relevant
Review of Audit Committee on Internal Control International Financial Reporting Standards (IFRS) and
The Internal Audit Unit under ICCD of the Bank reviews Internal Accounting Standards (IAS) in all substantial
the internal control systems of the Bank and ensures that aspects, based on its review and consultations with
internal controls are considered properly managed and management and the external auditors. External Auditors’
satisfactorily supervised. The Internal Audit Unit reviews are requested to attend the Audit Committee meeting
internal controls throughout all divisions/branches of where Financial Statements of MBL is placed for review
the Bank and then reports to the Audit Committee on and recommendation. The Committee also implements
their findings. The Audit Committee then reviews the an annual assessment of the efficiency of the Company’s
report submitted by the Internal Audit Unit and provides Internal Audit function and certifies that Internal Audit has
feedback on the lapses found. The Audit Committee also sufficient resources to accomplish its duties. The Audit
guides the Internal Audit Unit on how to properly monitor Committee has quite a few roles regarding the external
internal control and ensure that internal controls are audit functions:
INVOLVEMENT OF AUDIT COMMITEE

IN EXTERNAL AUDIT FUNCTIONS
Reviewing the Reviewing and Recoomendation

Effective Ensuring
External approving for Appointment/
Co-ordination Independence
Auditor's finding Non-audit works re-appointment

1. Ensuring effective coordination of external responsible that the independence of the external
audit function: It is important that there is open auditors is not comprised under any circumstance.
communication between the auditor and the
audit committee to ensure the best use of their 5. Recommending external auditor for appointment/
resources. This communication also aids in reappointment: The Audit Committee does an
assessing the auditor’s performance. The quality extensive review on the audit work done by the
of communications also provides opportunities to auditors after the audited financial statements
assess the auditor’s performance. The auditors should have been signed. The Audit Committee evaluates
correspond with the audit committee as noteworthy the auditors on a very detailed level, and ensures
issues develop. Such communications will emphasis that there were no threats to independence or any
other issues with the auditors. The Audit Committee
on the key accounting or auditing issues that, in
scrutinizes the applications of the auditors and
the auditor’s finding, give rise to a greater risk of
recommends for appointment/reappointment for
material misstatement of the financial statements,
the next year/AGM.
as well as any questions or concerns of the Audit
Committee. Through proper communication, the Involvement of Audit committee in selecting
Audit Committee ensures the effective coordination appropriate accounting policies
of the external audit function.
The Audit Committee shall support the Board of Directors
2. Ensuring independence of external auditors: in certifying that the financial statements reflect a
The auditor of MBL must be independent. Audit true and fair view of the company and is maintaining a
committee is familiar with the statutory and good supervising system within the Bank. The Board
regulatory independence requirements for auditors. delegates the duty to the Audit Committee to decide
The technical competency of the auditor alone is on the appropriate accounting policies that are in line
not appropriate to ensure a high-quality audit. The with applicable accounting standards like International
auditor also must exercise a high level of objectivity Accounting Standards (IAS) and International Financial
and professional skepticism. The Audit Committee’s Reporting Standards (IFRS), as per requirements
interactions with the auditor during the audit provide under Financial Reporting Act, 2015 and circulars,
numerous opportunities to evaluate whether the guidelines, policies, notifications and requirements
auditor demonstrated integrity, objectivity and from Bangladesh Bank and Bangladesh Securities and
professional skepticism. Exchange Commission (BSEC) as well as other regulatory
authorities. After choosing the appropriate accounting
3. Reviewing the external auditors’ findings in policies, the Audit Committee recommends the Board
order to be satisfied that appropriate action is concerning implementation of the selected accounting
being taken: There are many reviews that happen guidelines. The Board subsequently accepts the selected
throughout the entire process during the Audit accounting policies for implementation.
Committee meetings held. The Audit Committee
extensively reviews all findings of the external Audit committee’s involvement in the review of
auditors and ensures that management is informed annual and interim financial reports
and is taking action for resolving any discrepancies.
Before the financial statements are signed, the audit In compliance with the Condition-5 of Corporate
Governance Code Notification No BSEC/
committee reviews all the findings and ensures that
CMRRCD/2006-158/207/Admin/80 dated 3 June,
they are satisfied with the actions that management
2018 issued by Bangladesh Securities and Exchange
has taken.
Commission (BSEC) Corporate Governance guideline
4. Reviewing and approving non-audit work assigned of BSEC, the Audit Committee reviews along with the
to the external auditor and ensuring that such management, the quarterly and half yearly financial
work does not compromise the independence statements before submission to the Board for approval.
of the external auditor: External auditors should The Audit Committee always ensures that the financial
not carry out work that does not relate directly to statements reflect a true and fair view of the company
the discharge of audit functions, if it would impair and analyzes the financials for any discrepancies.
the auditors’ independence, or might give rise to
Reliability of management information used for
a reasonable perception that their independence
computation in financials
could be impaired. The Audit Committee must
ensure that external auditors do not undertake any The Audit committee ensures that the management
work that might compromise their independence. information used for computation in the financials is true
If any work is being done by the external auditors, and fair. In order to ensure reliability of the information,
the Audit Committee must approve before the the Audit Committee always holds extensive meeting
work commences. In short, the Audit Committee is with management regarding issues of the financial

statements. The Audit Committee queries management c. suspected infringement of laws, regulatory
on issues that they find material to the financial compliances including securities related laws,
statements and makes sure that management has a rules and regulations; and
proper response to their queries. The Audit Committee
is able to understand the reliability of the information d. any other matter which the Audit Committee
used for computation in the financials through meetings deems necessary is disclosed to the Board.
with management. Management always assures that the
information presented is true and fair and that all the 2.3 Risk Management Committee
information is derived from the system of the Bank.
To play an effective role in mitigating impending risks
Reporting of the Audit Committee arising out from strategies and policies formulated by
the Board and to carry out the responsibilities efficiently,
i. The Audit Committee reports on its activities to the a risk management committee has been formed in line
Board. with BRPD Circular no. 11 dated October 27, 2013 issued
by Bangladesh Bank. After identifying and assessing
ii. The Audit Committee immediately reports to the several risk factors like credit risks, foreign exchange
Board on the following findings, if any: risks, internal control and compliance risks, money
a. reports on conflicts of interests; laundering risks, information and communication risks,
management risks, interest risks, liquidity risks etc.;
b. suspected or presumed fraud or irregularity or the risk management committee scrutinizes whether
material defect identified in the internal audit appropriate risk management measures are being put
and compliance process or in the financial in place and applied and whether adequate capital and
statements; provision is being maintained against the risks identified.
Appointment and Composition
i. Members of the committee are nominated by the Board of Directors from themselves;
ii. The Risk Management Committee comprises of following 04 (four) members;
Sl. Status with the Status with the Educational Meeting

Name
no. Bank Committee Qualification Attendance
1 Mr. Md. Anwarul Haque Director Chairman B. Sc. Engg. (Civil), BUET 5/5
2 Al-haj Akram Hossain (Humayun) Vice Chairman Member Graduate 5/5
3 Mr. Md. Nasiruddin Choudhury Director Member B. Sc. Engg. (Civil), BUET 3/5
4 Mr. M.A. Khan Belal Director Member M.Sc. (Chemistry) (DU) 5/5
iii. Company secretary of the Bank is the secretary of the Risk Management Committee.
Roles and Responsibilities of the Risk managing risk within the Bank. The Risk Management
Management Committee: Committee supervises formation of separate
management level committees and monitors
i) Risk identification & control policy : their activities for the compliance of instructions
of lending risk, foreign exchange transaction risk,
Formulation and implementation of appropriate
internal control & compliance risk, money laundering
strategies for risk assessment and its control is the
risk, information & communication risk including
responsibility of Risk Management Committee. Risk
other risk related guidelines.
Management Committee monitors risk management
policies & methods and amend it if necessary. The iii) Analysis and approval of Risk Management
committee reviews the risk management process to policy:
ensure effective prevention and control measures.
Risk management policies & guidelines of the
ii) Construction of organizational structure: Bank are reviewed annually by the committee. The
committee proposes amendments if necessary and
The responsibility of Risk Management Committee send it to the Board of Directors for their approval.
is to ensure an adequate organizational structure for Besides, other limits including lending limit should

be reviewed at least once annually and should be proper functioning of the Board and its Committees. The
amended, if necessary. Company Secretary is responsible for advising the Board
on governance matters and ensuring compliance with
iv) Storage of data & Reporting system: Board and Board Committee Charters and procedures.
The Company Secretary is appointed and removed by
Adequate record keeping & reporting system the Board.
developed by the MBL management is approved by
the risk management committee. The committee 3.02 Role of Chief Financial Officer (CFO)
ensures proper use of the system. The committee
minutes its proposal, suggestions & summary in a A Chief Financial Officer (CFO) is responsible for
specific format & inform the Board of Directors. managing the financial actions of a company. CFO
oversees all the financial operations of the organization,
v) Monitoring the implementation of overall
including accounting, financial reporting, tax, business
Risk Management Policy:
control. CFO manages all aspects of financial matters
Risk Management Committee monitors proper and decision making. Basically, the CFO directs a
implementation of overall risk management policies. company’s financial goals, objectives and budgets.
They monitor whether proper steps have been taken He also advises the Board of Directors on the kind of
to mitigate all risks including lending risk, market risk, actions to be adopted in upholding the high levels
and management risk. of financial control and reporting. Key responsibility
and overall financial health of the Bank is separately
vi) Other responsibilities:
disclosed in CFO’s statement.
1. Committee’s decision and suggestions are
submitted to the Board of Directors quarterly in 3.03 Role of Head of Internal Audit and
short form; Compliance
2. Complies instructions issued time to time by the The Head of Internal Audit and Compliance (HIAC)
controlling body; is responsible for Bank’s strategic risk-based internal
audit plan and managing the internal audit function
3. Internal & external auditors submit respective in accordance with Bank’s internal audit charter.
evaluation report whenever required by the Responsibilities include providing reasonable
committee. assurance on the effectiveness of the organization’s
risk management and the strength of internal controls.
Meetings: The position assesses organization-wide compliance
with Bank’s internal policies and procedures, laws and
1. The Risk Management Committee held 05 (five) regulations, contractual terms and conditions. The Head
meetings during the year 2020. of Internal Audit reports directly to the Audit Committee
of Bank’s Board of Directors.
2. The committee invites Managing Director and
CEO, Chief Risk Officer and any other Officer to its 3.04 Attendance of CEO, CFO, CS & HIAC in
meetings, if it deems necessary; Board Meeting
3. To ensure active participation and contribution by The CEO, CS, CFO & HIAC of the Bank attend the meetings
the members, a detailed memorandum is distributed of Board of Directors. As per BSEC they are not attending
to committee members well in advance before each the meeting which involve consideration of an agenda
meeting; item relating to their personal matters. In addition, they
are not entitled for any remuneration for attending such
4. All decisions/observations of the committee are meetings of the Board of Directors.
noted in minutes.
4.00 Governance of Board of Directors of
3.00 Directors’ Report on Compliance with Best Subsidiary Company
Practices on Corporate Governance:
In group concept, Mercantile Bank Limited is parent
The status of compliance of corporate governance guidelines company with having following three subsidiary companies
issued by Bangladesh Bank has been presented in later part
of this report. Suraiya Parveen & Associates, Chartered  Mercantile Bank Securities Limited, incorporated in
Secretaries, Financial & Management Consultants, duly Bangladesh – 98.61% owned
certified the compliance status of corporate governance
guidelines and issued a report.  Mercantile Exchange House (UK) Limited,
incorporated in United Kingdom - 100% owned
3.01 Role of Company Secretary
 MBL Asset Management Limited, incorporated in
The Company Secretary of the Bank provides advice and Bangladesh – 56.00% owned
support to the Board, and is accountable to the Board, •• The Board of the parent company is aware of the
through the Chairman, for all matters relating to the material risks and issues that might affect both the

bank as a whole and its subsidiaries. It exercises •• The Board establishes such an internal control system
adequate oversight over subsidiaries while so that the internal audit process can be conducted
respecting the independent legal and governance independently from the management.
responsibilities that might apply to its subsidiary
•• It reviews the reports submitted by its audit
Boards. In order to fulfill its responsibilities, the Board
committee at quarterly rests regarding compliance
of the parent company;
of recommendations made in internal and external
•• established a group structure (including the legal audit reports and the Bangladesh Bank inspection
entity and business structure) and a governance reports.
framework with clearly defined roles and
5.1 Internal Control and Audit Function
responsibilities, including those at the parent
Compliance
company level and those at the subsidiary level;
•• define an appropriate subsidiary Board and To ensure good governance in the Bank management
management structure to contribute to the effective it is essential to have specific internal control. A strong
oversight of businesses and subsidiaries, which takes internal control system can ensure the achievement of
into account the different risks; Banks’ goals and objectives with long term profitability.
It also helps to comply with rules and regulation as well
•• to which the group, its businesses and its subsidiaries as policies and to minimize the financial and reputational
are exposed; assess whether the group’s corporate losses. To carries out the analysis and independent
governance framework includes adequate policies, appraisal of the adequacy and effectiveness of the
processes and controls and addresses risks across Bank’s risk management framework and internal control
the business and legal entity structures; environment, MBL has been designed and formed
an effective control system namely Internal Control
•• ensure the group’s corporate governance framework and Compliance Division (ICCD). ICCD continually
includes appropriate processes and controls to recognizes and assesses all the material risks that could
identify and address potential intergroup conflicts adversely affect the achievement of the Bank’s goals.
of interest, such as those arising from intergroup The risk assessment by internal control focuses more on
transactions; compliance with regulatory requirements, social, ethical
and environmental risks that affect the Banking industry.
•• approve policies and clear strategies for establishing
It ensures reliable financial and managerial information
new structures and legal entities, and ensure that they that promote better strategic decision for the Bank.
are consistent with the policies and interests of the
group complied all regulatory requirement regarding 5.2 Key features of Internal Control System of
monitor and review of subsidiary companies; MBL
•• have sufficient resources to monitor compliance The entire system of internal control helps MBL to
of subsidiaries with all applicable legal, regulatory establish an environment which does not encourage
and governance requirements; and maintain an corruptibility as well as fraudulent activities. Following are
effective relationship with regulator and, through the key features of internal control system:
the subsidiary Board or direct contact, with the
regulators of all subsidiaries. Internal Control Process
The details information of parent companies Board is
given in separate part of this Annual Integrated Report.
5.00 Directors’ responsibility to establish Monitoring

appropriate system of internal control
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In line with the Bank Company Act, 1991 (amended up to

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policies for the Bank company, for risk management, Risk Assessment
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implementation. The Directors acknowledge their overall

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responsibility for the Bank’s systems of internal control for

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Control Environment
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establishing efficiency, effectiveness, reliability, timeliness,

completeness and compliance with applicable laws and
regulations. Along with Board of Directors internal control 5.2.1 Control Environment
is affected by the senior management, audit committee
and all level of personnel. The Board of Directors along with Senior Management
Team of MBL establishes the tone at the top regarding the
•• The Board is vigilant on the internal control system of importance of internal control including expected standards
the Bank in order to attain and maintain satisfactory
of conduct. Management reinforces expectations at the
qualitative standard of its loan and investment
various levels of MBL. The control environment comprises
portfolio.

the integrity and ethical values of MBL; the parameters of duties is not practical, management selects and
enabling the Board of Directors to carry out its governance develops alternative control activities.
oversight responsibilities; the organizational structure and
assignment of authority and responsibility; the process for For the Control Activities component:
attracting, developing, and retaining competent employees;
1. MBL selects and develops control activities
and the rigor around performance measures, incentives,
that contribute to the mitigation of risks to the
and rewards to drive accountability for performance. The
achievement of objectives to acceptable levels.
resulting control environment has a pervasive impact on the
overall system of internal control. 2. MBL selects and develops general control activities
over technology to support the achievement of
MBL has adopted five (5) principles for the
objectives.
Control Environment component:
3. MBL deploys control activities through specific
1. MBL being an organization demonstrates a strong
policies that establish what is expected and in
commitment to integrity and ethical values.
procedures that put policies into action.
2. The Board of Directors of MBL demonstrates
5.2.4 Monitoring activities and correcting
independence from management and exercises
deficiencies
oversight of the development and performance of
internal control. Monitoring of key risks is a part of the Bank as well as
periodic evaluations by the business lines and internal
3. Management establishes, with Board oversight,
audit. Bank’s internal control system is monitored and
structures, reporting lines, and appropriate
deficiencies are corrected in an ongoing basis.
authorities and responsibilities in the pursuit of
objectives. MBL has adopted following two principles in respect of
monitoring activities:
4. MBL demonstrates a commitment to attract, develop,
and retain competent employees in alignment with 1. MBL selects, develops, and performs ongoing and
objectives. or separate evaluations to ascertain whether the
components of internal control are present and
5. MBL holds its employees accountable for their
functioning.
internal control responsibilities in the pursuit of
objectives. 2. MBL evaluates and communicates internal control
deficiencies in a timely manner to those parties
5.2.2 Risk assessment
responsible for taking corrective action, including
An effective internal control system requires that the senior management and the Board of Directors, as
material risks are being recognized and continually appropriate.
assessed. This assessment should cover all risks facing
5.2.5 Information and communication
the Bank. Risks facing by a Bank are credit risk, country
risk and transfer risk, market risk, interest rate risk, liquidity MBL has adopted following three (3) principles in respect
risk, operational risk, legal risk and reputational risk etc. of information and communication to carry out its internal
Internal controls may need to be revised to appropriately control responsibilities to support the achievement of its
address any new or previously uncontrolled risk. objectives:
5.2.3 Control Activities 1. MBL obtains or generates and uses relevant, quality
information to support the functioning of internal
Control activities of MBL have been established with a
control in a timely manner.
view to mitigating risks. Control activities are performed
at all levels of MBL, at various stages within business 2. MBL internally communicates information, including
processes, and over the technology environment. objectives and responsibilities for internal control,
They may be preventive or detective in nature and may necessary to support the functioning of internal
encompass a range of manual and automated activities control.
such as authorizations and approvals, verifications,
reconciliations, and busi-ness performance reviews. 3. MBL communicates with external parties regarding
Segregation of duties is typically built into the selection matters affecting the functioning of internal control.
and development of control activities. Where segregation

The manner in which Internal Control System is monitored by the Board, Audit Committee or Senior
Management:
Fundamental functions of Internal

Audit: independent assurance that
Internal Audit Function MBL’s risk management, governance
and internal control processes are
operating effectively.
AUDIT External Audit Function Board Audit

FUNCTION
Central Bank’s inspection Information Technology (IT) Audit
5.3 Audit Function The Board and senior management contribute to the
effectiveness of the internal audit function by:
In the case of financial audits, a set of financial
statements are said to be true and fair when they are •• providing the function with full and unconditional
free of material misstatements - a concept influenced access to any records, file data and physical
by both quantitative (numerical) and qualitative factors. properties of the Bank, including access to
Traditionally, audits were mainly associated with gaining management information systems and records and
information about financial systems and the financial the minutes of all consultative and decision-making
records of a company or a business. However, recent bodies;
auditing has begun to include non-financial subject •• requiring the function to independently assess the
areas, such as safety, security, information systems effectiveness and efficiency of the internal control,
performance, and environmental concerns. risk management and governance systems and
processes;
5.3.1 Internal Audit Function
•• requiring internal auditors to adhere to national and
Principal of internal audit function: The internal audit international professional standards, such as those
function should provide independent assurance to the established by the Institute of Internal Auditors;
Board and should support Board and senior management
in promoting an effective governance process and the
•• requiring that audit staff collectively have or
can access knowledge, skills and resources
long-term soundness of the Bank.
commensurate with the business activities and risks
5.3.2 Fundamental Audit Function of the Bank;
An effective and efficient internal audit function

•• requiring timely and effective correction of audit
issues by senior management; and
constitutes the third line of defense in the system of
internal control. It provides an independent assurance •• requiring the function to perform a periodic
to the Board of Directors and senior management on the assessment of the Bank’s overall risk governance
quality and effectiveness of a Bank’s internal control, risk framework, including but not limited to an
management and governance systems and processes, assessment of:
thereby helping the Board and senior management •• the effectiveness of the risk management and
protect their organization and its reputation. The internal compliance functions;
audit function has a clear mandate, be accountable to
the Board and be independent of the audited activities. •• the quality of risk reporting to the Board and
senior management; and
It has sufficient standing, skills, resources and authority
within the Bank to enable the auditors to carry out their •• the effectiveness of the Bank’s system of internal
assignments effectively and objectively. controls.

The Board and senior management promote the Bank’s Inspection Team exchanges their views with the
independence of the internal audit function by ensuring Bank’s Auditors regarding Financial Operation, Treasury
that: Operation, IT Operation, and various process of the audit.
•• internal audit reports are provided to the Board or its Inspection report of the Central Bank is reviewed by
audit committee without management filtering and the Board of Directors and corrective actions are taken
that the internal auditors have direct access to the regarding lapses mentioned in the report.
Board or the Board’s audit committee; 5.6 Review of the adequacy of the system of
•• the head of the internal audit function’s primary internal controls by Director
reporting line is to the Board (or its audit committee), MBL’s Board of Directors has established a management
which is also responsible for the selection, oversight structure that clearly defines roles, responsibilities and
of the performance and, if necessary, dismissal of reporting lines for Internal Control and Compliance. The
the head of this function;
Board of Directors is committed to managing risk and
•• if the chief audit executive is removed from his or her to controlling its business and financial activities in a
position, this should be disclosed publicly. The Bank manner which enables it to maximize profitable business
should also discuss the reasons for such removal opportunities, avoid or reduce risks which can cause
with its supervisor. loss or reputational damage, ensure compliance with
5.3.4 Board Audit applicable laws and regulations, and enhance resilience
to external events.
In order to review the business performance of the Bank,
MBL has formed a separate Audit Cell, namely, Board The effectiveness of the Bank’s internal control system is
Audit Cell. The Cell reviews the compliance status of reviewed regularly by the Board, its Committees, Bank’s
Policy Guidelines of the Board of Directors of the Bank management, and Bank’s internal audit. Bank’s internal
and also of the regulators. Board Audit Cell visits the audit monitors compliance with policies and standards
Branches and Other Divisions of the Bank for verification and the effectiveness of internal control structures
and inspection purpose. across the Bank through its program of business audits.
Related party transactions are enclosed in the Notes of
5.3.5 Information Technology (IT) Audit the Financial Statements. Lending to the members of the
MBL is fully dependent on Information Technology, and a Board or Controlling Shareholders is strictly prohibited
number of inherent risks such as data collapse, data loss, by the Bank Memorandum and Articles of Association
data modification, unauthorized access to data etc may since inception. MBL’s Board of Directors, in discharging
arise within the Bank. MBL service delivery is designed its responsibilities for effective internal control system
on IT platform. IT Audit Team follows the prescribed within the Bank has formulated internal control policies
guidelines, solves the unsettled issues and also suggests and procedures.
to the higher Management for needful action. IT
6.0 Disclosure of the identification of risks both
Audit Team has been formed as per the Central Bank’s
internally and externally
Guidelines to identify the intrinsic risks and manage those
risks in an effective and efficient manner. The sophistication of the Bank’s risk management and
internal control infrastructure keep pace with changes to
5.4 External Audit Function
the Bank’s risk profile, to the external risk landscape and
Appointment of External Auditors in industry practice. Risk identification encompasses all
MABS & J Partners, Chartered Accountants have been material risks to the Bank, on- and off-balance sheet and
appointed as the External Auditors of the Bank in the on a group wise, portfolio-wise and business-line level. In
21st AGM of the Shareholders. They audited the Financial order to perform effective risk assessments, the Board
Statements of the Bank namely, Balance Sheet, Profit and senior management, including the CRO, regularly and
and Loss Account, Cash Flow Statement, Statement on an ad hoc basis, evaluate the risks faced by the Bank
of Changes in Equity, Statement of Liquidity Analysis and its overall risk profile. The risk assessment process
and explanatory notes to financial statements. External includes ongoing analysis of existing risks as well as the
Auditors were entitled to require from the Bank’s officers identification of new or emerging risks. Risks captured
and employees such information and explanation as they from all organizational units. Risk identification and
thought necessary for the performance of their duties measurement include both quantitative and qualitative
as External Auditors. Bank employees provided them elements. Risk measurements also include qualitative,
accurate, timely information and explanations as and Bank-wide views of risk relative to the Bank’s external
when required by the External Auditors. operating environment.
5.5 Bangladesh Bank’s Inspection The core risk areas of Bank are:
Bangladesh Bank conducts comprehensive inspection 1. Credit Risk
at Head Office and Branches of the Bank. Central
2. Asset and Liability/Balance Sheet Risk

3. Foreign Exchange Risk (CRO), with sufficient stature, independence, resources
and access to the Board and Board risk management
4. Internal Control and Compliance Risk
committee.
5. Money laundering Risk
Key activities of the risk management function
6. Information and Communication Technology
include:
Security Risk
•• Setting targets for capital ratios and capital
Banking companies in Bangladesh, while conducting
composition
day-today operations, may face some other risks both
internally and externally: •• Managing the balance sheet
•• Credit risk also includes concentration risk, country •• Managing the funding structure
risk, transfer risk, and settlement risk
•• Determining general principles for measuring,
•• Market risk (including interest rate risk in the Banking managing and reporting of Bank’s risk
book, foreign exchange risk and equity market risk)
•• Developing risk policies for business units
•• Liquidity Risk
•• Determining the overall investment strategy
•• Operational Risk
•• Identifying, monitoring and managing the Bank’s
•• Strategic Risk current and potential operational risk exposures
•• Reputation Risk •• Handling “critical risks” (risks that require follow-up
and further reporting)
6.1 Risk Communication
•• Following up on reviews by Internal Audit and
A strong risk culture promote risk awareness and encourage informing the Board through Audit Committee of
open communication and challenge about risk-taking unusual circumstances
across the Bank as well as vertically to and from the Board
and senior management. Senior management actively
•• Preparing management information on issues such
as IT security, physical security, business continuity
communicate and consult with the control functions
and compliance.
on management’s major plans and activities to control
functions so that they can effectively discharge their Risk managers are work closely with individual business
responsibilities. Information on overall and specific risks are units; the risk management function is sufficiently
communicated to the Board and senior management in independent of the business units and not be involved
timely, accurately and understandable way to take decisions
in revenue generation. This independence is an essential
by them to minimize such risks effectively.
component of an effective risk management function,
Risk reporting to the management, Board and regulator as is having access to all business lines that have the
are made carefully so that Bank-wide, individual portfolio potential to generate material risk to the Bank as well as
and all other risks in a concise and meaningfully to relevant risk-bearing subsidiaries and affiliates. The
identified and reported properly. Reporting accurately risk management function has a sufficient number of
communicate risk exposures and results of stress tests or employees who possess the requisite experience and
scenario analyses and provoke a robust discussion of, for qualifications, including market and product knowledge
example, the Bank’s current and prospective exposures as well as command of risk disciplines. Staff has the
(particularly under stressed scenarios), risk/return ability and willingness to effectively challenge business
relationships and risk appetite and limits. operations regarding all aspects of risk arising from the
Bank’s activities.
Our Risk reporting systems is dynamic, comprehensive
and accurate, and draws on a range of underlying 6.3 Role of the Chief Risk Officer (CRO)
assumptions in line with Basel III guideline and Bangladesh
Bank has the CRO with high designated position,
Bank guidance. We communicated Market Discipline
Additional Managing Director. The CRO is primarily
statement under Pillar III of Basel III in our websites along
responsible for overseeing the development and
with Annual Integrated Report. All other material risk that
implementation of the Bank’s risk management function.
effect Bank is also disclosed in separate Risk Management
This includes the ongoing strengthening of staff skills
report of this Annual Integrated Report.
and enhancements to risk management systems,
6.2 Disclosure of the strategies adopted to policies, processes, quantitative models and reports as
manage and mitigate risk necessary to ensure that the Bank’s risk management
capabilities are sufficiently robust and effective to fully
MBL has an effective independent risk management support its strategic objectives and all of its risk-taking
function, under the direction of a Chief Risk Officer activities. The CRO is responsible for supporting the

Board in its engagement with and oversight of the 7.01 Disclosure of statement of Ethics and
development of the Bank’s risk appetite and RAS and for compliance
translating the risk appetite into a risk limits structure.
The CRO, together with management, actively engaged Mercantile Bank is always committed to establishing
the highest level of business compliance and ethical
in monitoring performance relative to risk taking and risk
standard. The Bank has an “Employee Code of Ethics
limit adherence.
and Business Conduct”- a framework of ethical behavior
6.4 Internal Control on key Risks of the Bank and for all the employees of the organization. The leaders/
managers are required to exemplify the highest standards
Risk Management Policies
of conduct and ethical behavior. The leaders/managers
The Statement on Risk Management and Internal Control are expected to:
provides an overview of the state of internal controls •• Lead according to Mercantile Bank standards of
within the Bank. There exists risk in every transactions of a ethical conduct, in both words and actions
Bank. The effectiveness of risk management and internal
•• Create and maintain an environment where
controls is crucial in financial sector. Bangladesh Bank
employees feel comfortable asking questions or
has identified six Core Risks and provided guidelines to reporting concerns
identify and thereafter minimize the risks. The Board of
Directors of the Bank formulated policies for identifying, •• Be diligent in enforcing the Bank’s ethical standards
measuring and controlling the risks involved with Banking and taking appropriate action if violation occur
activities. The Board makes sure that employees have •• Contact the Human Resources Division when in
been assigned responsibilities for managing risks, and need of assistance
proper training has been provided to enable them to
understand and identify risks as well.
7.02 Integrity
The ‘Employee Code of Ethics and Business Conduct’

6.5 Management Review & Responsibility
starts with the phrase “Uncompromising integrity”.
Bank has approved Organizational Structure with clear Employees of Mercantile Bank are judged not only in
terms of competencies, but also with their integrity. The
functional separation and segregation of functioning
reputation and continued success of Mercantile Bank
authorities. This ensures Core Risk Management practice
largely depend on a shared commitment to the core value
and compliance across the Bank. The Bank is governed by
of integrity. Respecting this value is the responsibility of
the rules, regulations, guidelines, directions and policies
each and every member of the organization.
as applicable for the Banking business and operations.
MBL has formed a number of designated committees 7.03 Avoiding conflict of interest
entrusted with specific objectives under the leadership of
Managing Director & CEO of the Bank. As per Bangladesh Conflicts of interest may arise as a result of the various
activities and roles of the Bank (e.g. where the Bank
Bank Guidelines, Senior Management Team (SMT) is
extends loans to a firm while its proprietary trading
the main body of management and decision making in
function buys and sells securities issued by that firm), or
the Bank. Besides, there are Asset Liability Committee
between the interests of the Bank or its customers and
(ALCO), Basel III Implementation Unit, Risk Management
those of the Bank’s Board members or senior managers
Committee, ICAAP Preparation Committee, Management (e.g. where the Bank enters into a business relationship
Reporting System (MRS) Committee, Share Investment with an entity in which one of the Bank’s Board members
Committee, Credit Assessment Committee, Purchase has a financial interest). Conflicts of interest may also
Committee, etc. are supporting the Bank’s management arise when a Bank is part of a broader group. For example,
in discharging its duties efficiently and effectively. where the Bank is part of a group, reporting lines and
information flows between the Banks, its parent company
7.00 Ethics and Compliance and/or other subsidiaries can lead to the emergence of
conflicts of interest (e.g. sharing of potential proprietary,
Bank’s senior management is responsible for establishing confidential or otherwise sensitive information from
a compliance policy that contains the basic principles different entities or pressure to conduct business on
to be approved by the Board and explains the main a non-arm’s length basis). MBL Board oversees the
processes by which compliance risks are to be identified implementation and operation of policies to identify
and managed through all levels of the organization. The potential conflicts of interest. To avoid conflict of interest
Board and management are accountable for the Bank’s and also to make accountable the Bank has already taken
compliance, the compliance function has an important the following measures:
role in supporting corporate values, policies and
•• Loan to the Directors is restricted subject to full filing
processes that help ensure that the Bank acts responsibly certain terms and conditions of regulatory guidelines.
and fulfils all applicable obligations.

•• If there is any related party transaction, the fall within the definition of ‘Related Party’ as contained in
management discloses the matter in the Annual IAS 24 (Related Party Disclosures) and relevant provisions
Report and it is also approved by the general of Bank Company Act 1991 (amended up to 2018) and
shareholders in AGM. Bangladesh Bank BRPD Circular No. 14 dated 25 June
2003. The Board approves all related party transactions
•• Executive committee of the Board can approve loan
and ensures that these transactions with the Company are
to anyone up to a limited portion.
undertaken on an arm’s length basis. The Audit Committee
•• Audit committee regularly reviews the financial and reviewed all material related party transactions and kept
other related statements and gives recommendation the Board informed of such transactions.
to the management regarding any changes in policy
and also presents to the Board for further evaluation. 7.08 Communication of the statement of
ethics and business practices to all Directors
•• Board of Directors’ approval is needed for loan re- and employees:
scheduling.
MBL has a ‘Code of Conduct’ – a framework of ethical
7.04 Compliance with the laws and regulations behavior for all the employees of the organization.
Mercantile Bank maintains its reputation as a law-abiding The Board of Directors also follows a code of conduct
organization and a good corporate citizen. It complies which was adopted to provide guidance to Directors
with all the prevailing laws and regulations of the country. to perform their duty in an honest, responsible and
Employees are trained and guided to conduct business in businesslike manner and within the scope of their
compliant manner. The policy and procedures regarding authority, as said for in the laws of country as well as
Mercantile Bank’s business process are prepared in Memorandum and Articles of Association of the Bank.
adherence to the applicable laws and regulations. The code of conduct for Board of Directors states that:
7.05 Compliance with Bangladesh Secretarial •• The members of the Board of Directors discharge
Standards (BSS) issued by Institute of Chartered their duties professionally, with due diligence and to
Secretaries of Bangladesh (ICSB) the best of their abilities.
Mercantile Bank has conducted its Board meetings in •• The members act honestly in good faith and in the
line with the provisions of the Bangladesh Secretarial best interest of the stakeholders.
Standards (BSS)-1: Secretarial Standard on Meetings of •• The members do not make improper use of
the Board of Directors, general meeting in line with the information and offensive advantage of the position
provisions of BSS-2: Secretarial Standard on General as Director.
Meetings, record the minutes of the meetings in line
with the provisions of BSS-3: Minutes and declared the •• Confidential information acquired by the members
dividend in line with the provisions of BSS-4: Secretarial in the course of exercise of Directorial duties remain
Standard on Dividend adopted by the Institute of the property of the company.
Chartered Secretaries of Bangladesh (ICSB). •• Members make every effort to attend all Board and
committee meeting during their tenure to maximize
7.06 Compliance with BB guidelines for
effectiveness of the Board/ committee meetings,
contribution of individual Directors are monitored
To ensure good governance i.e. corporate governance and appraised on an annual basis.
in Bank management, Bangladesh Bank (BB) issued four •• All others code of conduct set by the Bangladesh
Circulars covering broad areas as follows: Bank, Bangladesh Securities and Exchange
Commission and other regulatory bodies are
1. BRPD Circular No.11 dated 27 October 2013: Formation followed strictly.
and responsibilities of Board of Directors (BoD).
2. BRPD Circular Letter No. 18 dated 27 October 2013:

Appointment and responsibilities of Chief Executive Accountability
Officer (CEO).
3. BRPD Circular Letter No. 19 dated 27 October 2013:

Contractual appointment of Advisor and Consultant. Financial Good
Reporting Confidentiality Relationship
4. BRPD Circular Letter No. 2 dated 7 February 2018:
Compliance of Bank Company Act (Amendment 2018).
7.07 Related Party Transaction Disclosure

of Material Procurement
Facts and Payment
The Bank in its ordinary course of business undertook
financial transactions with some entities or persons that

Accountability Accountability in Disclosure of Material Facts
The Board provides shareholders with quarterly All material facts are disclosed to the Stakeholders for
and annual financial results. In presenting these taking their timely economic decisions. Material but non-
statements, the Board aims to provide shareholders public information is not divulged that may adversely
with a balanced and understandable assessment of the affect the business of the Bank or create regulatory
Bank’s performance and position with a commentary breach or legal complication. Material public information
at the date of announcement of the competitive is disclosed through the Audited Annual Report, Un-
conditions within the industry in which it operates. The audited Half-yearly and Quarterly Report, Quarterly
Management provides all Directors periodically with Bulletin (MBL Bulletin) etc., and other forms of print
accounts and detailed reports on the Bank’s financial and electronic media. All related party transactions are
performance and related matters prior to each Board reviewed regularly by the internal auditors and a report
meeting. The Directors may at any time seek further on the reviews conducted is submitted to the Audit
information from and discuss with the Management on Committee for their monitoring.
the Bank’s operations and performance. Compliance
Department with direct reporting line to the Risk Accountability in Maintaining Confidentiality of
Management Committee is set up to ensure compliance Information
with legislative and regulatory requirements. The Board
Information of the customers, prospective customers,
believes in conducting itself in ways that will deliver
suppliers, shareholders and employees is kept confidential.
maximum sustainable value to all shareholders.
Information is used solely for corporate purposes and
never to be discussed with or divulged to unauthorized
The Board’s commitment to establish high level
people including family, friends and acquaintances.
of ethics and compliance within the organization
Examples of confidential information broadly include: (a)
The Board of Directors have always been committed to customer’s account or business details, (b) shareholder’
establishing a high level of ethics and compliance among holding or transaction details, (c) employees’ job records,
all employees of the organization. They have always pay perquisites, benefits tax issues etc. (d) suppliers’
encouraged management to ensure that everyone price, sales strategy etc. (e) Internal documents like
maintains a high ethical standard within the Bank. The strategy papers, Product Program Guidelines (PPG) etc.
Board guides management on principles that should be
adopted and followed by everyone in the Bank.
Fulfillment of pertinent Rules and Regulations
MBL runs its business activities in full compliance

MBL’s Board of Directors Responsibilities in preparing
Financial Statements with relevant rules, regulations and guidelines. While
conducting its operation, MBL follows strictly Bank
MBL Board of Directors ensure that no information that Companies Act, 1991, The Companies Act, 1994, Central
is false, misleading and incomplete or would lead to Bank’s Guidelines, Securities and Exchange Rules-1987,
mistrust by the public, customers or other stakeholders Dhaka and Chittagong Stock Exchange Listing
are published. The Board also ensures that any monetary Regulations, Bangladesh Accounting Standards (BAS),
transaction done with the customers and other Bangladesh Financial Reporting Systems (BFRS), IAS/IFRS
stakeholders are recorded and done under the Bank’s guidelines, SAFA & CAPA guidelines, BIS and UCPDC and
established rules and in a transparent manner. MBL’s other ICC rules.
Board of Directors ensures that qualified personnel
having professional and academic knowledge in Effective Anti-Money laundering and anti-
the area of cost and financial accounting prepares terrorism program
Financial Statements in accordance with Generally
Money Laundering, fraud & corruption have become very
Accepted Accounting Principles (GAAP), International
Accounting Standards (IASs), International Financial important issues in recent years. To battle and mitigate
Reporting Standards (IFRSs), Bangladesh Bank’s the problems of money laundering and terrorism,
Circulars, Schedule of Bank Companies Act of 1991, Management of MBL has formed Anti Money Laundering
the Companies Act-1994, the Securities and Exchange Department which seeks to prevent any misuse of
Rules-1987 and other applicable laws and regulations. In the financial system for the purpose of offences that
preparing Financial Statements, the Board of Directors might jeopardize the asset and reputation of Bank. The
ensures suitable accounting policies, accounting Bank has also nominated Chief Anti Money Laundering
judgments and estimations. It also ensures the highest Compliance Officer (CAMLCO) who attends the CAMLCO
standards in preparation, reporting and disclosure of Conference every year organized by Bangladesh Bank
accounting and financial information to the Regulators and Branch Anti Money Laundering Compliance Officers
and to the Stakeholders of the Bank. (BAMLCO) at Branches, who independently would make

the Bank compliant on AML matters. AML Department Effective Whistle blowing
arranges and conducts AML workshops in order to train
all the employees of the Bank to meet up our regulatory MBL has an effective Whistle blowing Policy
requirement and most of the employees obtained whereby employees entitled to raise concerns in
confidence about the malpractices in the bank.
AML and CFT (Combating Financing Terrorism) related
training.
This helps prevent disasters ranging from customer
Effective Anti-Fraud Programs mistreatment to huge financial loss. MBL is committed
to the highest standards of good governance, openness,
The Internal Control & Compliance Division (ICCD) of transparency, honesty, integrity and accountability. This
MBL always engage in examination of whether any fraud
whistle blowing policy document explains procedure for
forgery or irregularities is going on in the Bank. The
reporting any misconduct to the designated officials so
ICCD also conducts special audit or investigations as
that appropriate remedial action can be taken. This policy
instructed by the Board or Audit Committee of the Bank.
The ICCD submits reports upon the observations they is designed to enable Directors, all employees, including
detect throughout their audit to the Audit Committee at temporary staff, to raise any serious concerns internally
a regular interval. with high level of confidentiality and immunity.
MBL Approaches towards whistle blowing:
Recognizing employees Getting the right culture Training and support Quick response
are vigilant
Better information to Training Promoting a policy Protect the confidentiality

make decisions and and making sure it is easily of a whistleblower
control risk accessible and support
Establishment of hot line for reporting by Financial Integrity & Customer Services Department
irregularities (Customer Services Division), Bangladesh Bank.
MBL is committed to recognize the right of its customer 08.00 Remuneration Committee
and stakeholders to complain when feeling dissatisfied
with the service of the Bank. MBL undertakes to resolve 08.01 Appropriate practice/disclosure:
any complaints about irregularities and to prevent similar
On existence of a remuneration committee, disclosure
complaints from occurring. Any issue brought to the
should be made on the following areas:
attention is treated in a confidential manner, and discussed
only with the people who need to be involved. In this •• The roles of the members of the committee
connection, MBL strictly follows the ‘Guidelines for Customer •• The composition of the remuneration committee
Services and Complaint Management’ (June 2014) issued
•• Disclosure of number of meetings and work performed

Disclosure should be as follows: •• Developing, recommending and reviewing annually

the company’s human resources and training policies
Disclosure of the charter (roles and responsibilities)
of Remuneration committee Disclosure the composition of the Remuneration
Committee:
As per Bangladesh Bank BRPD Circular no. 11 dated
October 27, 2013, every Bank have to form three Since the Bank is restricted by Bangladesh Bank to have
committee in addition to the Board of Directors i.e. 1(one) more than three sub-committees of the Board, the Board
executive committee, 1(one) audit committee and 1(one) time to time reviews and enhances the remuneration
risk management committee. The mentioned circular packages of the employees.
also restricted to form any other permanent, temporary
or sub- committee except the above mentioned three Disclosures of key policies with regard to
committees. Hence, the Board of Directors of MBL remuneration of Directors, senior management
reviews employees’ remuneration along with fringe and employees
benefit based on inflation, market trend, employee
All employees including the Senior Management
satisfaction etc. Usually they make to proposition to the
employees are paid competitive remuneration package.
Board which is then reviewed and validated by special
policy committee of the Board. After incorporating their The structure and level of remuneration are reviewed time
recommendations the compensation / remuneration to time based on Bank’s performance and affordability.
decisions are approved by the Board. The main work The remuneration also stresses on ensuring internal and
includes presenting recommendations to the Board external pay equity.
regarding remuneration, compensation packages of
Disclosure of number of meetings
Management, incentive schemes and retirement benefits.
They also assist the Board of Directors to ensure that all Meeting regarding overseeing the remuneration related
employees are remunerated fairly and get performance policy by the Managing Director and CEO, Deputy
based compensation by ensuring effective remuneration Managing Directors and other Heads of Division was held
policy; procedures and practices aligned with the Banks’ on need basis at a regular interval throughout the year.
strategy and applied consistency for all employee levels. So, if any remuneration related issue needs committee’s
Salaries and allowances of MBL are very competitive in attention, it is placed as agenda for necessary review.
comparison with other Banks operating in the market. However, if required, the meeting is held on need basis
The roles and responsibilities of the committee are to review and discuss any remuneration related issue
the followings: exclusively.
•• Reviewing the effectiveness of remuneration policy 8.02 Activities of the Remuneration Committee
to ensure that whether the Board’s set objectives and
expectations are being met The major activities of the Remuneration Committee are
given below:
•• Ensuring that an effective remuneration policy,
procedure and practice are in place, aligned with 1. Formulating Human Resources (HR) Policies i.e. “HR
the Bank’s strategy, and is applied consistently for all
Manual” of the Bank.
employee levels
2. Recruitment, promotion and remuneration process
•• Ensuring that the structure and mix of fixed and
variable pay and other elements are in alignment of top executives (Up to two-level below the rank of
with the overall business objectives Managing Director & CEO) as per Bangladesh Bank
Circular (BRPD Circular No.11 dated 27 October 2013).
•• Guiding and giving suggestion to HR team during
preparation and review of any policy or process 3. Other than the above as mentioned in (2), all
related to compensation and benefits appointments, promotions and fixing remuneration
are made by the Managing Director & CEO as
•• Ensuring that all benefits, including retirement
authorized by the Board.
benefits and other financial arrangements, are
justified, appropriately valued and promoting the 4. Conducting periodic Salary Survey to determine
performance based reward and recognition etc.
MBL’s competitive position with peer Banks in the
•• Identifying MBL’s needs for employees at different industry. Based on the Survey Result, Board approves
levels and determine their selection, transfer or required adjustments to existing benefit packages
replacement and promotion criteria; and for the employees of the Bank.

8.03 Disclosure of Remuneration of Directors, development programs to fine tune their skills and
Chairman, Chief Executive and Senior Executives knowledge.
The Directors of the Board are paid only honorarium for 9.03 Merit based recruitment
attending Board or Committee meetings. For attending
the Board Meeting, Audit Committee Meeting, Executive In order to set our business up for success over
Committee Meeting and Risk Management Committee the long term, MBL recognizes the importance
Meeting, the Directors receive an honorarium of Tk. of attracting and retaining the best talent. MBL
8,000.00 each. However, in management level no recruits fresh graduates from different academic
remuneration was given for any meeting. backgrounds of renowned universities, which act as
a source of creativity. Fresh graduates are recruited
During 2020, the expenditures incurred related to through comprehensive written test and Viva voce.
Directors were Tk. 45.97 Lac for Directors’ fee and MBL also recruits experienced Bankers from the
in the year 2019 were Tk. 47.27 Lac. On the other industry having sound Banking knowledge and
hand, the Managing Director is paid salary and expertise. As a part of MBL’s investments in Human
allowances as fixed by the Bangladesh Bank. Total Capital, it has formulated Human Resources Policy
remuneration to Managing Director and CEO for including a strategic imperative for recruiting the
the year 2020 is Tk. 130.87 Lac and in the year 2019 best people from the society.
was Tk. 131.91 Lac.
9.04 Performance Appraisal System
09. Human Capital
The performance appraisal is the process of assessing
Human capital may act as a fundamental pillar to acquire employee performance by way of comparing present
success in different magnitude. Developing human performance with already established standards which
capital requires creating and cultivating environments have been already communicated to employees,
in which human beings can rapidly learn and apply new subsequently providing feedback to employees about
ideas, competencies, skills, behaviors and attitudes. their performance level for the purpose of improving
their performance as needed by the organization. The
09.01 Human Resource Development and
performance appraisal system of MBL is an annual
Management
process which includes:
MBL considers its employees as the most precious •• Assessment of the financial or non-financial targets;
capital of the organization that play the crucial role in •• Assessment of the competencies of the individual in
materializing the mission, vision, goals and objectives achieving the content of the job;
of the Bank. To ensure long term sustainability, MBL has
a special focus on skill and merit based recruitment and
•• Assessment of overall performance.
selection process, highly competitive remuneration 9.05 Promotion, reward and motivation
package, adequate training and development
programs, career growth with succession planning, As efficiency is our strength, the Board of Directors of
high performance culture and pleasant working our Bank approved and enacted various motivational
atmosphere. benefits and policies besides regular pay scale in order to
ensure maximum efficiency of employees for maximizing
09.02 Succession planning
job satisfaction. We declare promotion every year for our
Succession planning is a process whereby an organization eligible executives and officers which motivates, inspires
ensures that employees are recruited and developed to and helps to develop themselves for greater achievement
fill each key role within the company. Through succession of the individual and organizational goals.
planning process, MBL recruits superior employees,
9.06 Training and Development
develop their knowledge, skills, and abilities, and prepare
them for advancement or promotion into ever more MBL has a strong focus on imparting training towards
challenging roles. Most importantly, our future leader enhancement of the skills and competencies of the
development program is designed to develop highly employees to take over the challenge of modern Banking.
qualified managers and future leaders for the Bank. The Bank has established ‘Mercantile Bank Training
This program provides exposures of various operational Institute (MBTI)’, run by experienced and talented faculty
settings and helps them acquire required knowledge members. MBTI has brought all the employees of the
and skills to become the successful leaders. With the Bank to the training net. We believe that, trained, skillful,
proven experiences, these juniors will move to the senior experienced employees are the most important strategic
management positions in future. They will also have resource in a more competitive business environment.
a clear career progression and receive an extensive Employees are given on-the-desk training so that they

can carry out their deskwork confidently remaining if they have any work related grievance. In Mercantile
compliant. As well, classroom trainings are also arranged Bank Limited there is formal procedure to address
for the employees to make them up-to-date with the the employee grievance and counseling. Time to
changing requirements. time competent authority also counsels employees
as part of its job as people’s advocate. Whenever
9.07 Grievance management and counseling:
any grievance is received from any employee of the
Since employee’s behavior affects work discipline, Bank, the management of the Bank takes the matter
HR Division always encourages employees to report promptly for:
Frame up Proper Open Decision

enquiry teams, investigation & Hearing according to
if necessary Enquiry HR policy
Beside that an employee on whom any disciplinary and operation of Bank accounts for payment of
action is imposed may prefer an appeal to the competent dividend, redemption of paper shares and the listing
authority of the Bank and the appeal need to be made of securities on stock exchanges etc. Press releases,
for review of the decision within the specific time period. interim and final results announcements, interim and
Thus, we have a participative and collaborative grievance annual reports, and other information of interest to
handling procedure which is very much democratic in shareholders are uploaded to Company’s corporate
nature. website www.mblbd.com. Half Yearly and Annual
Reports of the Bank are also sent to shareholders within
09.08 Organizational Chart: MBL Organogram mirrors the the respective deadlines stipulated by the regulatory
internal structure of the company. It has been designed bodies.
to emphasize on the roles, work responsibilities and
reporting relationships, lines of communication within For Shareholders’ Inquiries
the organization for ensuring good governance. Share Department
10.00 Communication with Shareholders and Head Office
Stakeholders 61 Dilkusha Commercial Area
•• Maintaining a website by MBL: MBL has an Dhaka-1000
official website linked with the website of the stock Web: www.mblbd.com
exchange. The Bank has been maintaining the •• Information Access: Prior to each Board meeting,
website functional from the date of listing. MBL the Bank Management provides the Board with
has made available the detailed disclosures on its
information relevant to matters on the agenda
website as required under the listing regulations of
for the Board meeting. The Management also
the concerned stock exchange(s).
provides adequate information in their regular
•• Communication with Shareholders: While reports pertaining to operational issues, financial
maintaining investors’ relation, proper communication performance and any affairs that require the attention
and equitable treatment of every shareholder are of the Board. Such reports enable the Directors to be
given the highest priority by MBL. MBL always share aware of key issues pertaining to financial statements,
information to the concern party and publish integrated internal controls, compliance and risk management
operational and financial output and takes initiative of the Company. A risk management dashBoard that
to enrich the ability of future assessment of Bank of summarizes the main risks and key risk indicators
shareholders. The Share Department of the Bank plays is presented during the Board meeting to facilitate
an instrumental role to make effective communication the oversight function by the Board. In respect of
with its shareholders and other stakeholders. budgets, material variances between the projection
Shareholders and other stakeholders of the Bank may and actual results are explained in the salient reports
contact to this Department during office hour for any circulated to the Board members. Monthly and
sort of information and queries. Common services quarterly reports are provided to Directors. The
include but not limited to allow or rejection of transfer Board has separate and independent access to the
or transmission of shares, issue of duplicate certificates, Senior Management and the Company Secretary at
allotment of shares issued from time to time, opening all times. Procedures are also in place for Directors

and Board Committees, where necessary, to seek Communication with Stakeholders
independent professional advice at the Company’s
expense.
•• Communication with Employees: MBL Board of
Directors and the senior management of the Bank
•• Policy on ensuring participation of shareholders always maintain communication with the employees
at AGM: The Bank strongly encourages and supports to enhance mutual understanding and promote
shareholder participation at its AGM. The Bank sends cooperation at all levels. They discuss matters such
out the Notice of the Meeting on a timely basis to as safety and the work environment, as well as
provide ample time for shareholders to receive and broader issues relating to staff welfare.
review the Notice and reply with their attendance.
MBL publishes notice of AGM in daily newspapers •• Communication with the General Public: MBL’s
with necessary details to ensure effective and website www.mblbd.com serve as an easy access
efficient participation of shareholders in AGM within for key information source for business, financials
reasonable time-frame. The AGM normally takes and other relevant information about the businesses
place in a well known place and at convenient time. of the Bank. MBL always provides quarterly and half-
Annual Reports are circulated as per the provision of annually financial statements and Annual Report
Companies Act 1994, so that shareholders would get to provide balanced and clear assessment of its
sufficient time to go through the report and freely performance for the general public.
provide their valuable comments and suggestions in
the AGM. A registered shareholder who is unable to
•• Investors Friendly Essentials: MBL has better
attend may choose 1 proxy to attend and vote on his capital adequacy, good asset quality, steady
behalf. As the authentication of shareholder identity financial performance, comfortable liquidity, strong
information and the integrity of the information market position and experienced Management, so
transmitted still remain a concern, the Bank has investment in it is reliable. Since inception, MBL is
decided, for the time being, not to implement voting declaring good dividends for the investors. MBL is
in absentia by mail, email or fax. also a Corporate Shareholder of IDLC Finance Ltd.
The Company advocates fair and equitable treatment to 11.00 Environmental and Social Obligations
all shareholders. All price-sensitive information is timely
disclosed publicly. Shareholders are given the opportunity MBL’s policies and practices relating to environmental
to participate effectively in and vote at general meetings and social obligation:
of shareholders and they are informed of the rules,
MBL assumes the responsibilities to act in the best long-
including voting rights and procedure that governs such
term interests of its beneficiaries. In this fiduciary role,
general meetings of shareholders. Shareholders are
MBL believes that environmental, social, and corporate
entitled to attend and vote at the AGM by person or proxy.
governance (ESG) issues can affect the performance of
•• Redressal of Shareholders Complaints: Any its own business portfolio.
complaint, received at AGM or throughout the year,
related to transfer and transmission of shares, non- In this connection, MBL also recognizes that applying
receipt of Annual Reports, and dividend timely and following principles may better align with broader
other share related matter is resolved lawfully in time. objectives of society;
1 MBL incorporates ESG issues into its business portfolio and decision-making processes.
2 MBL incorporates ESG issues into its corporate governance practices.
3 MBL seeks appropriate disclosure on ESG issues.
4 MBL promotes acceptance and implementation of the Principles within the industry.
5 MBL works together to enhance its effectiveness in implementing the Principles.
6 MBL reports on its activities and progress towards implementing the Principles.

Our approaches towards environmental and social obligation are depicted below:
Economy
Business Growth
Environment Society
Sustainable Use of Resources Good Quality of Life
In recent years, the issue of climatic change is Necessary steps have been adopted including green
being addressed seriously all over the world. MBL financing, creating awareness to turn our Bank as a ‘Green
concentrates on environment preservation by Bank’. General description of MBL’s policies and practices
financing Projects in the field of renewable energy, relating to environmental and social obligation has been
organic agriculture across the entire value chain presented in “Sustainability Report” and “Corporate
including health food shops and environment Social Responsibility” sections of this Annual Report.
technology such as recycling companies and nature
Specific activities undertaken by MBL in
conservation projects.
pursuance of these policies and practices:
MBL always encourages financing projects which take
MBL always has been focused and active regarding
care of following points:
Banks activities for the betterment of the environment.
(a) Sustainable development and use of renewable Corporate Office of MBL has been designed to utilize
natural resources maximum usage of natural lights, which reduces
energy consumption substantially compared to other
(b)
Protection of human health, bio-diversity, conventional building. Around a third of the bulbs being
occupational health and safety, efficient production, used in this office are of energy savings type. We are
delivery and use of energy saving around 40% electricity (used for lighting purpose)
by using the day light in our Corporate Office. More
(c) Pollution prevention and waste minimization. activities are described in Sustainability Report segment.

SHARIAH
GOVERNANCE
MBL Shariah Supervisory Committee
MBL has established an independent Shariah Supervisory Committee of

five (05) members to ensure greater transparency and accountability to the
Islamic Banking.
All Members of Shariah Supervisory Committee

•• experienced and knowledgeable persons in Islamic Jurisprudence.
•• Committed to ensure Shariah Governance
Members of MBL Shariah Supervisory Committee
Sl. Name Role
1 Mr. Morshed Alam, MP Chairman
2 Mr. Al-Haj Akram Hossain Humayun Member
3 Mr. A. K. M. Shaheed Reza Member
4 Mr. M. A. Khan Belal Member
5 Maulana Shah Mohammad Wali Ullah Member
Key Activities 2020

Approval of Bye-laws Approval of various Approval of Profit Approval of Schedule Approval of Corporate
of Shariah Supervisory types of Mudaraba Sharing Ratio for of Charges for Islamic Investment Proposals.
Committee (SSC) Deposit and Mudaraba Depositors Banking Operations.
Investment Product at 65:35 ratio among
Program Guidelines the Shaheb Al-
(PPG). Maal (Depositors) &
Mudarib (Bank) under
weightage method.

CERTIFICATE OF COMPLIANCE
TO THE SHAREHOLDERS OF MERCANTILE BANK LIMITED

COMPLIANCE REPORT
ON BSEC NOTIFICATION ON CORPORATE GOVERNANCE
Annexure-C
[As per condition No. 1(5)(xxvii)]
Status of compliance with the conditions imposed by the Commission’s Notification No. SEC/
CMRRCD/2006-158/207/Admin/80, dated 3 June 2018 issued under section 2CC of the Securities
and Exchange Ordinance, 1969:
(Report under Condition No. 9)
Compliance Status
Condition
Title Not Remarks
No. Complied
complied
1. Board of Directors:
1(1) Size of the Board of Directors : √ There were 11 (eleven) members in the
Board of the Bank as on December
The total number of members of a company’s Board of 31, 2020
Directors shall not be less than 5 (five) and more than 20
(twenty).
1(2) Independent Directors
All companies shall have effective representation of

independent directors on their Boards, so that the Board,
as a group, includes core competencies considered
relevant in the context of each company; for this
purpose, the companies shall comply with the following:-
1(2)(a) At least one-fifth (1/5) of the total number of directors √ There was 1 (one) Independent
in the company’s Board shall be independent directors; Director in the Board of the Bank on
any fraction shall be considered to the next integer or 31.12.2020. Process of appointment
whole number for calculating number of independent of another Independent Director
was ongoing and BSEC accorded
director(s);
approval for appointment of
another Independent Director on
20.01.2021. Meanwhile Bangladesh
Bank accorded the said approval on
02/02/2021.
Relevant Provision of the Banking
Companies Act, 1991 (amended upto
2018):
Quote
Sec.-15:9: Notwithstanding
anything contained in any other
law for the time being in force or
in memorandum of association or
article of association of any banking
company, after expiration of 1 (One)
year on the commencement of this
Act, no banking company shall have
directors not exceeding 20 (twenty) in
total including 3 (three) independent
directors. Provided that, if the number
of directors of a bank company is
less than 20 (twenty), the number
of independent directors shall be
minimum 2 (two).
Unquote

Compliance Status
Condition
Title Not Remarks
No. Complied
complied
1(2)(b) Independent director” means a Director
1(2)(b)(i) who either does not hold any share in the company or √ Independent Directors have
holds less than one percent (1%) shares of the total paid- submitted declarations about their
up shares of the company; compliances.
1(2)(b)(ii) who is not a sponsor of the company or is not connected √ Do
with the company’s any sponsor or director or nominated
director or shareholder of the company or any of its
associates, sister concerns, subsidiaries and parents
or holding entities who holds one percent (1%) or more
shares of the total paid-up shares of the company on
the basis of family relationship and his or her family
members also shall not hold above mentioned shares in
the company:
Provided that spouse, son, daughter, father, mother,

brother, sister, son-in-law and daughter-in-law shall be
considered as family members;
1(2)(b)(iii) who has not been an executive of the company in √ Do
immediately preceding 2 (two) financial years;
1(2)(b)(iv) who does not have any other relationship, whether √ Do
pecuniary or otherwise, with the company or its
subsidiary or associated companies;
1(2)(b)(v) who is not a member or TREC (Trading Right Entitlement √ Do
Certificate) holder, director or officer of any stock
exchange;
1(2)(b)(vi) who is not a shareholder, director excepting independent √ Do
director or officer of any member or TREC holder of
stock exchange or an intermediary of the capital market;
1(2)(b) who is not a partner or an executive or was not a partner √ Do
(vii) or an executive during the preceding 3 (three) years
of the concerned company’s statutory audit firm or
audit firm engaged in internal audit services or audit
firm conducting special audit or professional certifying
compliance of this Code;
1(2)(b) who is not independent director in more than 5 (five) √ Do
(viii) listed companies;
1(2)(b)(ix) who has not been convicted by a court of competent √ Do
jurisdiction as a defaulter in payment of any loan or any
advance to a bank or a Non-Bank Financial Institution
(NBFI); and
1(2)(b)(x) who has not been convicted for a criminal offence √ Do
involving moral turpitude;
1(2)(c) The independent director(s) shall be appointed by the √ The appointments of Dr. Md. Rezaul
Board and approved by the shareholders in the Annual Kabir & Dr. Gazi Mohammad Hasan
General Meeting (AGM); Jamil will be placed for approval in the
upcoming 22nd AGM.
1(2)(d) The post of independent director(s) cannot remain √
vacant for more than 90 (ninety) days; and
1(2)(e) The tenure of office of an independent director shall be √ Independent directors of the Bank are
for a period of 3 (three) years, which may be extended for in their regular term of office.
1 (one) tenure only:
Provided that a former independent director may be

considered for reappointment for another tenure after
a time gap of one tenure, i.e., three years from his or her
completion of consecutive two tenures [i.e. six years]:
Provided further that the independent director shall not

be subject to retirement by rotation as per the Condition
no. 18 of Companies Act, 1994.
Explanation: For the purpose of counting tenure or term

of independent director, any partial term of tenure shall
be deemed to be a full tenure.

Compliance Status
Condition
Title Not Remarks
No. Complied
complied
1(3) Qualification of Independent Director :
1(3)(a) Independent director shall be a knowledgeable individual √ The qualification and background of
with integrity who is able to ensure compliance with Independent Directors justify their
financial laws, regulatory requirements and corporate capabilities to ensure mentioned
laws and can make meaningful contribution to the compliances.
business;
1(3)(b) Independent director shall have following qualifications:
1(3)(b)(i) Business Leader who is or was a promoter or director of None
an unlisted company having minimum paid-up capital of
Tk.100.00 million or any listed company or a member of
any national or international chamber of commerce or
business association; or
1(3)(b)(ii) Corporate Leader who is or was a top level executive not None
lower than Chief Executive Officer or Managing Director
or Deputy Managing Director or Chief Financial Officer
or Head of Finance or Accounts or Company Secretary
or Head of Internal Audit and Compliance or Head of
Legal Service or a candidate with equivalent position of
an unlisted company having minimum paid-up capital of
Tk.100.00 million or of a listed company; or
Explanation: Top level executive includes Managing

Director (MD) or Chief Executive Officer (CEO), Additional
or Deputy Managing Director (AMD or DMD), Chief
Operating Officer (COO), Chief Financial Officer (CFO),
Company Secretary (CS), Head of Internal Audit and
Compliance (HIAC), Head of Administration and Human
Resources or equivalent positions and same level or
ranked or salaried officials of the company.
1(3)(b)(iii) Former official of government or statutory or None
autonomous or regulatory body in the position not
below 5th Grade of the national pay scale, who has at
least educational background of bachelor degree in
economics or commerce or business or Law; or
1(3)(b)(iv) University Teacher who has educational background in √ Dr. Md. Rezaul Kabir is an Associate
Economics or Commerce or Business Studies or Law; or Professor of Institute of Business
Administration (IBA), University of
Dhaka.
Dr. Gazi Mohammad Hasan Jamil

is a Professor in the Department of
Finance, University of Dhaka.
1(3)(b)(v) Professional who is or was an advocate practicing at least None
in the High Court Division of Bangladesh Supreme Court
or a Chartered Accountant or Cost and Management
Accountant or Chartered Financial Analyst or Chartered
Certified Accountant or Certified Public Accountant
or Chartered Management Accountant or Chartered
Secretary or equivalent qualification;
1(3)(c) The independent director shall have at least 10 (ten) √ Both the Independent Directors
years of experiences in any field mentioned in clause (b); have more than 10 years of working
experiences each in their respective
fields.
1(3)(d) In special cases, the above qualifications or experiences None
may be relaxed subject to prior approval of the
Commission.
1(4) Duality of Chairperson of the Board of Directors and Managing Director or Chief Executive Officer.
1(4)(a) The positions of the Chairperson of the Board and √ The Chairman of the Board and
the Managing Director (MD) and/or Chief Executive MD & CEO of the Bank are different
Officer (CEO) of the company shall be filled by different individuals.
individuals;
1(4)(b) The Managing Director (MD) and/or Chief Executive √ MD & CEO of the Bank is not
Officer (CEO) of a listed company shall not hold the same holding any such position in another
position in another listed company; company.

Compliance Status
Condition
Title Not Remarks
No. Complied
complied
1(4)(c) The Chairperson of the Board shall be elected from √ All members of the Board including
among the non-executive directors of the company; the Chairman are non-executive
directors.
1(4)(d) The Board shall clearly define respective roles and √ The Board have clearly defined
responsibilities of the Chairperson and the Managing respective roles & responsibilities of
Director and/or Chief Executive Officer; the Chairman and MD & CEO of the
Bank.
1(4)(e) In the absence of the Chairperson of the Board, the None No such situation arisen in the
remaining members may elect one of themselves from reporting year.
non-executive directors as Chairperson for that particular
Board’s meeting; the reason of absence of the regular
Chairperson shall be duly recorded in the minutes.
1(5) The Directors’ Report to Shareholders
The Board of the company shall include the following
additional statements or disclosures in the Directors’
Report prepared under section 184 of the Companies
Act, 1994 (Act No. XVIII of 1994):
1(5)(i) An industry outlook and possible future developments in √ Included in the Directors’ Report part
the industry of this Annual Report.
1(5)(ii) The segment-wise or product-wise performance; √ Do
1(5)(iii) Risks and concerns including internal and external risk √ Do
factors, threat to sustainability and negative impact on
environment, if any;
1(5)(iv) A discussion on Cost of Goods sold, Gross Profit Margin √ Being a Bank, Interest Income, Interest
and Net Profit Margin, where applicable; Expenses and Profit Margins were
discussed.
1(5)(v) A discussion on continuity of any extraordinary activities None No such situation arisen in the
and their implications (gain or loss); reporting year.
1(5)(vi) A detailed discussion on related party transactions along √ Included in the Directors’ Report part
with a statement showing amount, nature of related of this Annual Report.
party, nature of transactions and basis of transactions of
all related party transactions;
1(5)(vii) A statement of utilization of proceeds raised through None No such situation arisen in the
public issues, rights issues and/or any other instruments; reporting year.
1(5)(viii) An explanation if the financial results deteriorate after None No such situation arisen in the
the company goes for Initial Public Offering (IPO), Repeat reporting year.
Public Offering (RPO), Rights Share Offer, Direct Listing,
etc.;
1(5)(ix) An explanation on any significant variance that occurs None No such situation arisen in the
between Quarterly Financial performances and Annual reporting year.
Financial Statements;
1(5)(x) A statement of remuneration paid to the directors √ Included in the Directors’ Report part
including independent directors; of this Annual Report.
1(5)(xi) A statement that the financial statements prepared by √ Do
the management of the issuer company present fairly its
state of affairs, the result of its operations, cash flows and
changes in equity;
1(5)(xii) A statement that proper books of account of the issuer √ Do
company have been maintained;
1(5)(xiii) A statement that appropriate accounting policies have √ Do
been consistently applied in preparation of the financial
statements and that the accounting estimates are based
on reasonable and prudent judgment;
1(5)(xiv) A statement that International Accounting Standards √ Do
(IAS) or International Financial Reporting Standards
(IFRS), as applicable in Bangladesh, have been followed
in preparation of the financial statements and any
departure there from has been adequately disclosed;
1(5)(xv) A statement that the system of internal control is sound √ Do
in design and has been effectively implemented and
monitored;

Compliance Status
Condition
Title Not Remarks
No. Complied
complied
1(5)(xvi) A statement that minority shareholders have been √ Do
protected from abusive actions by, or in the interest
of, controlling shareholders acting either directly or
indirectly and have effective means of redress;
1(5)(xvii) A statement that there is no significant doubt upon the √ Do
issuer company’s ability to continue as a going concern,
if the issuer company is not considered to be a going
concern, the fact along with reasons there of shall be
disclosed;
1(5)(xviii) An explanation that significant deviations from the last None No such situation arisen in the
year’s operating results of the issuer company shall be reporting year.
highlighted and the reasons thereof shall be explained;
1(5)(xix) A statement where key operating and financial data of at √ Included in the Directors’ Report part
least preceding 5 (five) years shall be summarized of this Annual Report.
1(5)(xx) An explanation on the reasons if the issuer company has None MBL has declared 10% cash & 5%
not declared dividend (cash or stock) for the year; stock dividend for the year ended
2020.
1(5)(xxi) Board’s statement to the effect that no bonus share or None No such situation arisen in the
stock dividend has been or shall be declared as interim reporting year.
dividend;
1(5)(xxii) The total number of Board meetings held during the year √ Included in this Annual Report.
and attendance by each director;
1(5)(xxiii) A report on the pattern of shareholding disclosing the √ Do
aggregate number of shares (along with name-wise
details where stated below) held by:-
1(5)(xxiii) Parent or Subsidiary or Associated Companies and other √ Do
(a) related parties (name-wise details);
1(5)(xxiii) Directors, Chief Executive Officer, Company Secretary, √ Do
(b) Chief Financial Officer, Head of Internal Audit and
Compliance and their spouses and minor children
(name-wise details);
1(5)(xxiii) Executives; and √ Do
(c)
Explanation: For the purpose of this clause, the
expression “executive” means top 5 (five) salaried
employees of the company, other than the Directors,
Chief Executive Officer, Company Secretary, Chief
Financial Officer and Head of Internal Audit and
Compliance.
1(5)(xxiii) Shareholders holding ten percent (10%) or more voting √ Do
(d) interest in the company (name-wise details);
1(5)(xxiv) In case of the appointment or reappointment of a director, a disclosure on the following information to the
shareholders:
1(5)(xxiv) a brief resume of the director; √ Included in this Annual Report
(a)
1(5)(xxiv) nature of his or her expertise in specific functional areas; √ Do
(b) and
1(5)(xxiv) names of companies in which the person also holds the √ Do
(c) directorship and the membership of committees of the
Board;
1(5)(xxv) A Management’s Discussion and Analysis signed by CEO
or MD presenting detailed analysis of the company’s
position and operations along with a brief discussion
of changes in the financial statements, among others,
focusing on:
1(5)(xxv) accounting policies and estimation for preparation of √ Included in this Annual Report
(a) financial statements;
1(5)(xxv) changes in accounting policies and estimation, if any, √ Do
(b) clearly describing the effect on financial performance
or results and financial position as well as cash flows in
absolute figure for such changes;

Compliance Status
Condition
Title Not Remarks
No. Complied
complied
1(5)(xxv) comparative analysis (including effects of inflation) of √ Do
(c) financial performance or results and financial position
as well as cash flows for current financial year with
immediate preceding five years explaining reasons
thereof;
1(5)(xxv) compare such financial performance or results and √ Do
(d) financial position as well as cash flows with the peer
industry scenario;
1(5)(xxv) briefly explain the financial and economic scenario of the √ Do
(e) country and the globe;
1(5)(xxv) risks and concerns issues related to the financial √ Do
(f) statements, explaining such risk and concerns mitigation
plan of the company; and
1(5)(xxv) future plan or projection or forecast for company’s √ Do
(g) operation, performance and financial position, with
justification thereof, i.e., actual position shall be explained
to the shareholders in the next AGM;
1(5)(xxvi) Declaration or certification by the CEO and the CFO to √ Do
the Board as required under condition No. 3(3) shall be
disclosed as per Annexure-A; and
1(5)(xxvii) The report as well as certificate regarding compliance of √ Do
conditions of this Code as required under condition No.
9 shall be disclosed as per Annexure-B and Annexure-C.
1(6) Meetings of the Board of Directors Total 22 meetings of Board held in
the Year 2020 & all minutes, required
The company shall conduct its Board meetings and books & records are well maintained &
record the minutes of the meetings as well as keep preserved.
required books and records in line with the provisions
of the relevant Bangladesh Secretarial Standards (BSS)
as adopted by the Institute of Chartered Secretaries of
Bangladesh (ICSB) in so far as those standards are not
inconsistent with any condition of this Code.
1(7) Code of Conduct for the Chairperson, other Board members and Chief Executive Officer
1(7)(a) The Board shall lay down a code of conduct, based Bangladesh Bank, the primary
on the recommendation of the Nomination and regulator of Banks, has informed us
Remuneration Committee (NRC) at condition No. 6, for that they will instruct Banks in this
the Chairperson of the Board, other board members and issue after reconciling the matters
Chief Executive Officer of the company; with BSEC.
1(7)(b) The code of conduct as determined by the NRC shall be Do
posted on the website of the company including, among
others, prudent conduct and behavior; confidentiality;
conflict of interest; compliance with laws, rules and
regulations; prohibition of insider trading; relationship
with environment, employees, customers and suppliers;
and independency.
2 Governance of Board of Directors of Subsidiary Company
2(a) Provisions relating to the composition of the Board of √
the holding company shall be made applicable to the
composition of the Board of the subsidiary company;
2(b) At least 1 (one) independent director on the Board of the √
holding company shall be a director on the Board of the
subsidiary company;
2(c) The minutes of the Board meeting of the subsidiary √
company shall be placed for review at the following
Board meeting of the holding company;
2(d) The minutes of the respective Board meeting of the √
holding company shall state that they have reviewed the
affairs of the subsidiary company also;
2(e) The Audit Committee of the holding company shall √
also review the financial statements, in particular the
investments made by the subsidiary company.

Compliance Status
Condition
Title Not Remarks
No. Complied
complied
3 Managing Director (MD) or Chief Executive Officer (CEO), Chief Financial Officer (CFO), Head of Internal Audit and
Compliance (HIAC) and Company Secretary (CS)
3(1) Appointment
3(1)(a) The Board shall appoint a Managing Director (MD) or √ The positions of MD & CEO, CS, CFO
Chief Executive Officer (CEO), a Company Secretary and HIAC are appointed by the Board.
(CS), a Chief Financial Officer (CFO) and a Head of
Internal Audit and Compliance (HIAC);
3(1)(b) The positions of the Managing Director (MD) or Chief √ The positions of MD & CEO, CS,
Executive Officer (CEO), Company Secretary (CS), Chief CFO and HIAC are filled by different
Financial Officer (CFO) and Head of Internal Audit and individuals.
Compliance (HIAC) shall be filled by different individuals;
3(1)(c) The MD or CEO, CS, CFO and HIAC of a listed company √ MD & CEO, CS, CFO and HIAC of
shall not hold any executive position in any other the Bank are not holding any such
company at the same time; position in any other company at the
same time.
3(1)(d) The Board shall clearly define respective roles, √ Roles, responsibilities & duties of
responsibilities and duties of the CFO, the HIAC and CFO, the HIAC and the CS are clearly
defined by the Board.
the CS;
3(1)(e) The MD or CEO, CS, CFO and HIAC shall not be removed √ No such situation arisen in the
from their position without approval of the Board as well reporting year.
as immediate dissemination to the Commission and
stock exchange(s).
3(2) Requirement to attend Board of Directors’ Meetings √ The MD & CEO, CS, CFO and HIAC
participate in Board meetings.
The MD or CEO, CS, CFO and HIAC of the company shall
attend the meetings of the Board. Provided that the CS,
CFO and/or the HIAC shall not attend such part of a
meeting of the Board which involves consideration of an
agenda item relating to their personal matters.
3(3) Duties of Managing Director (MD) or Chief Executive Officer (CEO) and Chief Financial Officer (CFO)
3(3)(a) The MD or CEO and CFO shall certify to the Board that √ Included in this Annual Report
they have reviewed financial statements for the year and
that to the best of their knowledge and belief:
3(3)(a)(i) these statements do not contain any materially √ Do
untrue statement or omit any material fact or contain
statements that might be misleading; and
3(3)(a)(ii) these statements together present a true and fair view of √ Do
the company’s affairs and are in compliance with existing
accounting standards and applicable laws;
3(3)(b) The MD or CEO and CFO shall also certify that there are, √ Do
to the best of knowledge and belief, no transactions
entered into by the company during the year which are
fraudulent, illegal or in violation of the code of conduct
for the company’s Board or its members;
3(3)(c) The certification of the MD or CEO and CFO shall be √ Do
disclosed in the Annual Report.
4 Board of Directors’ Committee :
For ensuring good governance in the company, the Board shall have at least following sub-committees
4(i) Audit Committee; and Audit Committee of the Board of
Directors has been formed as per
guidelines of BSEC.
4(ii) Nomination and Remuneration Committee. Bangladesh Bank, the primary regulator
of Banks, has informed us that they
will instruct Banks in this issue after
reconciling the matters with BSEC.
5 Audit Committee
5(1) Responsibility to the Board of Directors
5(1)(a) The company shall have an Audit Committee as a √ Audit Committee is established as
subcommittee of the Board; per BSEC guidelines.

Compliance Status
Condition
Title Not Remarks
No. Complied
complied
5(1)(b) The Audit Committee shall assist the Board in ensuring √ The Audit Committee discharges
that the financial statements reflect true and fair view their responsibility as per given
of the state of affairs of the company and in ensuring a
guidelines.
good monitoring system within the business;
5(1)(c) The Audit Committee shall be responsible to the Board; √ The duties of the Audit
the duties of the Audit Committee shall be clearly set committee are clearly defined in
forth in writing.
the Guideline for Audit committee
as per BSEC’s guidelines.
5(2) Constitution of the Audit Committee
5(2)(a) The Audit Committee shall be composed of at least 3 √ Audit Committee comprises of 03
(three) members; members.
5(2)(b) The Board shall appoint members of the Audit √ All the Directors of the Bank are non-
Committee who shall be non-executive directors of the executive Directors.
company excepting Chairperson of the Board and shall
include at least 1 (one) independent director;
5(2)(c) All members of the audit committee should be √ The profiles of the members
“financially literate” and at least 1 (one) member shall demonstrate their capabilities as
have accounting or related financial management such.
background and 10 (ten) years of such experience;
Explanation: The term “financially literate” means the

ability to read and understand the financial statements
like statement of financial position, statement of
comprehensive income, statement of changes in
equity and cash flows statement and a person will be
considered to have accounting or related financial
management expertise if he or she possesses
professional qualification or Accounting or Finance
graduate with at least 10 (ten) years of corporate
management or professional experiences.
5(2)(d) When the term of service of any Committee √ No such situation arisen in the
member expires or there is any circumstance reporting year.
causing any Committee member to be unable to
hold office before expiration of the term of service,
thus making the number of the Committee
members to be lower than the prescribed number
of 3 (three) persons, the Board shall appoint the
new Committee member to fill up the vacancy
immediately or not later than 1 (one) month from
the date of vacancy in the Committee to ensure
continuity of the performance of work of the Audit
Committee;
5(2)(e) The company secretary shall act as the secretary of the √ The CS in practice act as the
Committee; secretary of the Audit Committee.
5(2)(f) The quorum of the Audit Committee meeting shall not √ The quorum of all the meetings of the
constitute without at least 1 (one) independent director. Audit Committee were duly filled up.
5(3) Chairperson of the Audit Committee
5.3.a The Board shall select 1 (one) member of the Audit √
Committee to be Chairperson of the Audit Committee,
who shall be an independent director;
5.3.b In the absence of the Chairperson of the Audit √
Committee, the remaining members may elect one of
themselves as Chairperson for that particular meeting,
in that case there shall be no problem of constituting a
quorum as required under condition No. 5(4)(b) and the
reason of absence of the regular Chairperson shall be
duly recorded in the minutes.

Compliance Status
Condition
Title Not Remarks
No. Complied
complied
5.3.c Chairperson of the Audit Committee shall remain present √ The Chairperson of the Audit
in the Annual General Meeting (AGM): Committee was present in the AGM
held in 2020.
Provided that in absence of Chairperson of the
Audit Committee, any other member from the Audit
Committee shall be selected to be present in the annual
general meeting (AGM) and reason for absence of the
Chairperson of the Audit Committee shall be recorded in
the minutes of the AGM.
5.4 Meeting of the Audit Committee
5.4.a The Audit Committee shall conduct at least its four √ Total 8 meetings of Audit Committee
meetings in a financial year: held in the Year 2020.
Provided that any emergency meeting in addition to
regular meeting may be convened at the request of any
one of the members of the Committee;
5.4.b The quorum of the meeting of the Audit Committee shall be √ The quorum of all the meetings of the
constituted in presence of either two members or two-third Audit Committee were duly filled up.
of the members of the Audit Committee, whichever is higher,
where presence of an independent director is a must.
5.5 Role of Audit Committee
The Audit Committee shall:

5.5.a Oversee the financial reporting process; √ The Audit Committee performs as per
BSEC’s guidelines.
5.5.b Monitor choice of accounting policies and principles; √ Do
5.5.c Monitor Internal Audit and Compliance process to ensure √ Do
that it is adequately resourced, including approval of the
Internal Audit and Compliance Plan and review of the
Internal Audit and Compliance Report;
5.5.d Oversee hiring and performance of external auditors; √ Do
5.5.e Hold meeting with the external or statutory auditors √ Do
for review of the annual financial statements before
submission to the Board for approval or adoption;
5.5.f Review along with the management, the annual financial √ Do
statements before submission to the Board for approval;
5.5.g Review along with the management, the quarterly and √ Do
half yearly financial statements before submission to the
Board for approval;
5.5.h Review the adequacy of internal audit function; √ Do
5.5.i Review the Management’s Discussion and Analysis √ Do
before disclosing in the Annual Report;
5.5.j Review statement of all related party transactions √ Do
submitted by the management;
5.5.k Review Management Letters or Letter of Internal Control √ Do
weakness issued by statutory auditors;
5.5.l Oversee the determination of audit fees based on scope √ Do
and magnitude, level of expertise deployed and time
required for effective audit and evaluate the performance
of external auditors; and

Compliance Status
Condition
Title Not Remarks
No. Complied
complied
5.5.m Oversee whether the proceeds raised through Initial Public √ No such situation arisen in the
Offering (IPO) or Repeat Public Offering (RPO) or Rights Share reporting year.
Offer have been utilized as per the purposes stated in relevant
offer document or prospectus approved by the Commission:
Provided that the management shall disclose to the Audit
Committee about the uses or applications of the proceeds
by major category (capital expenditure, sales and marketing
expenses, working capital, etc.), on a quarterly basis, as a part
of their quarterly declaration of financial results:
Provided further that on an annual basis, the company
shall prepare a statement of the proceeds utilized for the
purposes other than those stated in the offer document
or prospectus for publication in the Annual Report along
with the comments of the Audit Committee.
5.6 Reporting of the Audit Committee
5.6.a Reporting to the Board of Directors
5.6.a.i The Audit Committee shall report on its activities to the √ The Audit Committee performs as per
Board. BSEC’s guidelines.
5.6.a.ii The Audit Committee shall immediately report to the
Board on the following findings, if any:
5.6.a.ii.a report on conflicts of interests None No such situation arisen in the
reporting year.
5.6.a.ii.b suspected or presumed fraud or irregularity or material None Do
defect identified in the internal audit and compliance
process or in the financial statements;
5.6.a.ii.c suspected infringement of laws, regulatory compliances None Do
including securities related laws, rules and regulations;
and
5.6.a.ii.d any other matter which the Audit Committee deems None Do
necessary shall be disclosed to the Board immediately;
5.6.b Reporting to the Authorities
If the Audit Committee has reported to the Board None No such situation arisen in the
about anything which has material impact on the reporting year.
financial condition and results of operation and has
discussed with the Board and the management that any
rectification is necessary and if the Audit Committee
finds that such rectification has been unreasonably
ignored, the Audit Committee shall report such finding
to the Commission, upon reporting of such matters to
the Board for three times or completion of a period of 6
(six) months from the date of first reporting to the Board,
whichever is earlier.
5.7 Reporting to the Shareholders and General Investors
Report on activities carried out by the Audit Committee, √ Activities of the Audit Committee are
including any report made to the Board under condition reported on the Annual Report.
No. 5(6)(a)(ii) above during the year, shall be signed by
the Chairperson of the Audit Committee and disclosed in
the annual report of the issuer company.
6 Nomination and Remuneration Committee (NRC).
6.1 Responsibility to the Board of Directors
6.1.a The company shall have a Nomination and Remuneration Bangladesh Bank, the primary
Committee (NRC) as a sub-committee of the Board regulator of Banks, has informed us
that they will instruct Banks in this
issue after reconciling the matters
with BSEC.
6.1.b The NRC shall assist the Board in formulation of Do
the nomination criteria or policy for determining
qualifications, positive attributes, experiences and
independence of directors and top level executive
as well as a policy for formal process of considering
remuneration of directors, top level executive;

Compliance Status
Condition
Title Not Remarks
No. Complied
complied
6.1.c The Terms of Reference (ToR) of the NRC shall be clearly Do
set forth in writing covering the areas stated at the
condition No. 6(5)(b).
6.2 Constitution of the NRC
6.2.a The Committee shall comprise of at least three members Bangladesh Bank, the primary
including an independent director; regulator of Banks, has informed us
with BSEC.
6.2.b All members of the Committee shall be non-executive Do
directors;
6.2.c Members of the Committee shall be nominated and Do
appointed by the Board;
6.2.d The Board shall have authority to remove and appoint Do
any member of the Committee;
6.2.e In case of death, resignation, disqualification, or removal Do
of any member of the Committee or in any other cases
of vacancies, the board shall fill the vacancy within 180
(one hundred eighty) days of occurring such vacancy in
the Committee;
6.2.f The Chairperson of the Committee may appoint or co- Do
opt any external expert and/or member(s) of staff to the
Committee as advisor who shall be non-voting member,
if the Chairperson feels that advice or suggestion from
such external expert and/or member(s) of staff shall be
required or valuable for the Committee;
6.2.g The company secretary shall act as the secretary of the Do
Committee;
6.2.h The quorum of the NRC meeting shall not constitute Do
without attendance of at least an independent director;
6.2.i No member of the NRC shall receive, either directly Do
or indirectly, any remuneration for any advisory or
consultancy role or otherwise, other than Director’s fees
or honorarium from the company.
6.3 Chairperson of the NRC
6.3.a The Board shall select 1 (one) member of the NRC to Bangladesh Bank, the primary
be Chairperson of the Committee, who shall be an regulator of Banks, has informed us
independent director; that they will instruct Banks in this
with BSEC.
6.3.b In the absence of the Chairperson of the NRC, the Do
remaining members may elect one of themselves as
Chairperson for that particular meeting, the reason
of absence of the regular Chairperson shall be duly
recorded in the minutes;
6.3.c The Chairperson of the NRC shall attend the annual Do
general meeting (AGM) to answer the queries of the
shareholders:
Provided that in absence of Chairperson of the NRC,

any other member from the NRC shall be selected to
be present in the annual general meeting (AGM) for
answering the shareholder’s queries and reason for
absence of the Chairperson of the NRC shall be recorded
in the minutes of the AGM.
6.4 Meeting of the NRC
6.4.a The NRC shall conduct at least one meeting in a financial Bangladesh Bank, the primary
year; regulator of Banks, has informed us
with BSEC.

Compliance Status
Condition
Title Not Remarks
No. Complied
complied
6.4.b The Chairperson of the NRC may convene any emergency Do
meeting upon request by any member of the NRC;
6.4.c The quorum of the meeting of the NRC shall be Do
constituted in presence of either two members or two
third of the members of the Committee, whichever is
higher, where presence of an independent director is
must as required under condition No. 6(2)(h);
6.4.d The proceedings of each meeting of the NRC shall duly Do
be recorded in the minutes and such minutes shall be
confirmed in the next meeting of the NRC.
6.5 Role of the NRC
6.5.a NRC shall be independent and responsible or Bangladesh Bank, the primary
accountable to the Board and to the shareholders; regulator of Banks, has informed us
with BSEC.
6.5.b NRC shall oversee, among others, the following matters Do
and make report with recommendation to the Board:
6.5.b.i formulating the criteria for determining qualifications, Do
positive attributes and independence of a director and
recommend a policy to the Board, relating to the
remuneration of the directors, top level executive,
considering the following:
6.5.b.i.a the level and composition of remuneration is reasonable Do
and sufficient to attract, retain and motivate suitable
directors to run the company successfully;
6.5.b.i.b the relationship of remuneration to performance is clear Do
and meets appropriate performance benchmarks; and
6.5.b.i.c remuneration to directors, top level executive involves a Do
balance between fixed and incentive pay reflecting short
and long-term performance objectives appropriate to
the working of the company and its goals;
6.5.b.ii devising a policy on Board’s diversity taking into Do
consideration age, gender, experience, ethnicity,
educational background and nationality;
6.5.b.iii identifying persons who are qualified to become Do
directors and who may be appointed in top level
executive position in accordance with the criteria laid
down, and recommend their appointment and removal
to the Board;
6.5.b.iv formulating the criteria for evaluation of performance of Do
independent directors and the Board;
6.5.b.v identifying the company’s needs for employees at Do
different levels and determine their selection, transfer or
replacement and promotion criteria; and
6.5.b.vi developing, recommending and reviewing annually the Do
company’s human resources and training policies;
6.5.c The company shall disclose the nomination and Do
remuneration policy and the evaluation criteria and
activities of NRC during the year at a glance in its annual
report.
7 External or Statutory Auditors
7.1 The issuer company shall not engage its external or
statutory auditors to perform the following services of
the company, namely:-
7.1.i Appraisal or valuation services or fairness opinions; √ External or statutory auditors provided
declaration that they are not engaged
in any of the tasks, issues, and matters
prohibited by this Guideline.
7.1.ii Financial information systems design and √ Do
implementation;

Compliance Status
Condition
Title Not Remarks
No. Complied
complied
7.1.iii Book-keeping or other services related to the accounting √ Do
records or financial statements;
7.1.iv Broker-dealer services; √ Do
7.1.v Actuarial services; √ Do
7.1.vi Internal audit services or special audit services; √ Do
7.1.vii Any service that the Audit Committee determines; √ Do
7.1.viii Audit or certification services on compliance of √ Do
corporate governance as required under condition No.
9(1); and
7.1.ix Any other service that creates conflict of interest. √ Do
7.2 No partner or employees of the external audit firms √ Do
shall possess any share of the company they audit at
least during the tenure of their audit assignment of that
company; his or her family members also shall not hold
any shares in the said company:
Provided that spouse, son, daughter, father, mother,

brother, sister, son-in-law and daughter-in-law shall be
considered as family members.
7.3 Representative of external or statutory auditors shall √ Representative of external or statutory
remain present in the Shareholders’ Meeting (Annual auditors were present in the 21st AGM
General Meeting or Extraordinary General Meeting) to held in 2020.
answer the queries of the shareholders.
8 Maintaining a website by the Company
8.1 The company shall have an official website linked with √ The address of official website of the
the website of the stock exchange Bank is www.mblbd.com & it’s already
linked with websites of DSE & CSE.
8.2 The company shall keep the website functional from the √ The website is functional since
date of listing. inception of the Bank.
8.3 The company shall make available the detailed √ Detailed disclosures required as per
disclosures on its website as required under the listing listing regulations are available on
regulations of the concerned stock exchange(s). the “Investors’ Relation” part of the
website.
9 Reporting and Compliance of Corporate Governance
9.1 The company shall obtain a certificate from a practicing √ Included in this Annual Report
Professional Accountant or Secretary (Chartered
Accountant or Cost and Management Accountant or
Chartered Secretary) other than its statutory auditors
or audit firm on yearly basis regarding compliance
of conditions of Corporate Governance Code of the
Commission and shall such certificate shall be disclosed
in the Annual Report.
Explanation: “Chartered Accountant” means Chartered

Accountant as defined in the Bangladesh Chartered
Accountants Order, 1973 (President’s Order No. 2 of 1973);
“Cost and Management Accountant” means Cost and
Management Accountant as defined in the Cost and
Management Accountants Ordinance, 1977 (Ordinance
No. LIII of 1977); “Chartered Secretary” means Chartered
Secretary as defined in the Chartered Secretaries Act,
2010
9.2 The professional who will provide the certificate on √ Approval for Appointment of
compliance of this Corporate Governance Code shall Corporate Governance compliance
be appointed by the shareholders in the annual general Auditor will be placed in the 22nd
meeting. AGM.
9.3 The directors of the company shall state, in accordance √ Included in this Annual Report
with the Annexure-C attached, in the directors’ report
whether the company has complied with these
conditions or not.

COMPLIANCE OF MEETING
& REMUNERATION
Board Meeting held during the year 2020 and attendance of each Director
Total no. of Applicable for mentioned member

No. Director's Name Designation meeting held
during the year Meeting held Present Absent Remuneration
1 Mr. Morshed Alam, M.P Chairman 22 22 0 168,000
2 Al-Haj Akram Hossain(Humayun) Vice Chairman 22 21 1 160,000
3 Mr. Mohd. Selim * Vice Chairman 11 9 2 72,000
4 Mr. M. Amanullah Vice Chairman 21 21 0 168,000
5 Mr. Md. Anwarul Haque Chairman, 22 22 0 168,000
Executive
Committee &
Risk
Management
Committee
6 Mr. A.S.M. Feroz Alam Director 20 19 1 152,000
22
7 Mr. Md. Abdul Hannan Director 22 22 0 168,000
8 Mr. A.K.M. Shaheed Reza Director 21 20 1 160,000
9 Mr. Md. Nasiruddin Choudhury Director 22 12 10 96,000
10 Al-haj Mosharref Hossain Director 21 21 0 168,000
11 Mr. M.A. Khan Belal Director 22 21 1 160,000
12 Dr. Md. Rezaul Kabir** Independent 6 5 1 40,000
Director
13 Dr. Md. Hamid Ullah Bhuiyan*** Independent 16 15 1 112,000
Director
14 Dr. Md. Rahmat Ullah**** Independent 14 14 0 104,000
Director
Dircetors who could not attend meeting were granted leave of absence by the present members of the committee.
Note:
* Mohd. Selim died on 26.06.2020
** Approval for appointment of Dr. Md. Rezaul Kabir as Director of MBL was accorded by BB on 29.09.2020
*** Dr. Md. Hamid Ullah Bhuiyan Continued as Independent Director of Bank up to 04.10.2020
**** Dr. Md. Rahmat Ullah Continued as Independent Director of Bank up to 16.08.2020
Executive Committee (EC) Meeting held during the year 2020 and attendance of each Director
Total no.
of meeting Applicable for mentioned member
No. Director's Name Designation held of the
committee
1 Mr. Md. Anwarul Haque Chairman 34 34 0 272,000.00
2 Mr. A.S.M. Feroz Alam Member 32 28 4 224,000.00
3 Mr. M. Amanullah Member 33 33 0 264,000.00
4 Mr. Md. Abdul Hannan Member 34 34 34 0 272,000.00
5 Mr. A.K.M. Shaheed Reza Member 33 33 0 264,000.00
6 Al-haj Mosharref Hossain Member 33 32 1 256,000.00
7 Mr. M.A. Khan Belal* Member 23 23 0 184,000.00
Members who could not attend meeting were granted leave of absence by the present members of the committee.
Note:
* Appointed as member of Executive Committee on 22.03.2020

Audit Committee (AC) Meeting held during the year 2020 and attendance of each Director
Total no.
committee
1 Dr. Md. Rahmat Ullah* Chairman 6 6 - 48,000
2 Al-Haj Akram Hossain(Humayun) Member 8 7 1 56,000
3 Mr. Md. Nasiruddin Choudhury Member 8 4 4 32,000
4 Dr. Md. Rezaul Kabir** Member 8 2 2 - 16,000
5 Mr. M.A. Khan Belal*** Member 2 2 - 16,000
6 Dr. Md. Hamid Ullah Bhuiyan**** Member 6 6 - 48,000
7 Mr.Mohd. Selim***** Member 2 1 1 8,000
Note:
* Continued as member of Audit Committee up to 16.08.2020
** Appointed as member of Audit Committee on 14.10.2020
***Continued as member of Audit Committee up to 22.03.2020
****Continued as member of Audit Committee up to 04.10.2020
***** Mohd. Selim died on 26.06.2020
Risk Management Committee (RMC) Meeting held during the year 2020 and attendance of
each Director
Total no.
committee
1 Mr. Md. Anwarul Haque Chairman 5 5 - 40,000.00
2 Al-Haj Akram Hossain(Humayun) Member 5 5 - 40,000.00
3 Mr. Mohd. Selim * Member 5 2 2 - 16,000.00
4 Mr. Md. Nasiruddin Choudhury Member 5 3 2 24,000.00
5 Mr. M.A. Khan Belal Member 5 5 - 40,000.00

Note:
* Mohd. Selim died on 26.06.2020
N.B. In addition to the above, Tk. 40,000/- has been paid to the Members of Shariah Supervisory Committee (SSC) of
Mercantile Bank Limited Islamic Banking Window against 1st Meeting of the Committee held on 17.05.2020.

REPORT OF THE AUDIT COMMITTEE
Audit Committee is an operating committee of a company’s Board of Directors, assisting

the board to fulfill its oversight responsibilities in areas such as an entity’s financial
reporting, internal control systems, risk management systems and the internal and
external audit functions. For ensuring good governance in the Bank, Mercantile Bank
Limited has an Audit Committee as a sub-committee of the Board. The Audit Committee
of Mercantile Bank Limited has been formed and its roles and responsibilities were
defined in line with the notification on Corporate Governance issued by BSEC on 03
June 2018 and Bangladesh Bank BRPD Circular No. 11 dated 27 October 2013. The Audit
Committee assists the Board in ensuring that the financial statements reflect true and
fair view of the state of affairs of the company and in ensuring a good monitoring
system within the business.
Audit Committee Composition and Qualifications respectively in compliance with the Bangladesh Bank
direction. The Committee is comprised of 3 (three)
The Audit Committee of the Board of Directors of MBL members including 1 (one) Independent Director and
was reconstituted in the 345th and 372nd meetings of they are not members of Executive Committee. The
the Board held on July 04, 2019 and October 14, 2020 composition of Audit Committee is as follows:
Name Status Position Educational Qualification Meeting Attendance

Al-haj Akram Hossain (Humayun) Vice Chairman Member Graduate 7/8
Mr. Md. Nasiruddin Choudhury Director Member B. Sc. Engg. (Civil), BUET 4/8
Dr. Md. Rezaul Kabir Independent Director Member M. Sc., PhD 2/2
The Company Secretary of the Bank is the Secretary of for review of the annual financial statements before
the Board Audit Committee. The quorum of the Audit submission to the Board for approval or adoption;
Committee meeting do not constitute without at least
•• Review along with the management, the quarterly
one independent director.
and half yearly financial statements before
Roles and Responsibilities of the Audit Committee submission to the Board for approval;
•• Review the adequacy of internal audit function;
In compliance with Bangladesh Bank BRPD Circular and
BSEC’s Corporate Governance Guidelines, the Audit •• Review the Management’s Discussion and Analysis
Committee is mainly responsible for the following: before disclosing in the Annual Report;
•• Oversee the financial reporting process; •• Review statement of all related party transactions
submitted by the management;
•• Monitor choice of accounting policies and principles;
•• Review Management Letters or Letter of Internal
•• Monitor Internal Audit and Compliance process to
Control weakness issued by statutory auditors; and
ensure that it is adequately resourced, including
approval of the Internal Audit and Compliance Plan and •• Oversee whether the proceeds raised through Initial
review of the Internal Audit and Compliance Report; Public Offering (IPO) or Repeat Public Offering (RPO)
or Rights Share Offer have been utilized as per the
•• Oversee hiring and performance of external auditors;
purposes stated in relevant offer document or
•• Hold meeting with the external or statutory auditors prospectus approved by the Commission.

Reporting of the Audit Committee 2. Reporting to the Authorities
1. Reporting to the Board of Directors There had not been any occurrence in the Bank that
All activities of Audit Committee were reported to the required reporting to the relevant authorities by the
Board and the Board closely reviewed and ratified Bank’s Audit Committee.
them. The Audit Committee reports to the Board on Meetings of the Audit Committee and Major
the following findings, if any –
focused Areas
•• Report on conflicts of interests;
Bangladesh Bank suggested Banks to hold at least 4 (four)
•• Suspected or presumed fraud or irregularity or meetings in a year. The Audit Committee of MBL held 8
material defect identified in the internal audit and (eight) meetings in 2020 and had detailed discussions and
compliance process or in the financial statements; review sessions with the Head of Audit, Head of Internal
•• Suspected infringement of laws, regulatory Control & Compliance, External Auditors regarding their
compliances including securities related laws, rules findings and remedial suggestions on various issues that
and regulations; and need improvement. The Audit Committee instructed
•• Any other matter which the Audit Committee deems management to follow those remedial suggestions and
necessary, to discuss to the Board immediately; monitored accordingly. Meeting dates are as follows:
Sl No. Meeting Date of Meeting

1 194th Audit Committee Meeting 20 January 2020
2 195th Audit Committee Meeting 22 March 2020
3 196th Audit Committee Meeting 17 May 2020
4 197th Audit Committee Meeting 15 June 2020
5 198th Audit Committee Meeting 27 July 2020
6 199th Audit Committee Meeting 13 August 2020
7 200th Audit Committee Meeting 27 October 2020
8 201st Audit Committee Meeting 27 December 2020
In the meetings, among other things, the following •• Reviewed the internal audit reports of Branches/
issues were evaluated/reviewed/discussed and provided Divisions with a focus on all major areas of
guidelines and necessary instructions: housekeeping particularly day to day operational
activities, inter branch adjustment accounts, arrears
Evaluation/Review/Discussion of policy formulation & in the balancing of the books, un-reconciled entries
implementations: in inter-bank accounts and frauds.
•• Time Bound Action Plan under Self Assessment of •• Reviewed implementation status of report submitted
Anti-Fraud Internal Controls. earlier of the Branches/Divisions through respective
•• Reviewed Health Report of the Bank for the year 2019. Cluster Head on continuous basis.
•• Position of Non-Performing Loans and Advances. •• Reviewed Compliance on observations,

recommendations and decisions of the Audit
•• Evaluation/Review/Discussion of financial related Committee Meetings.
matters, compliances and disclosures:
•• Reviewed the investigation reports tabled during
•• Reviewed the yearly, quarterly and half yearly audited/ the year and ensured appropriate remedial actions/
unaudited financial statements along with Balance measures were taken.
Sheet, Profit & Loss Accounts, Cash Flow Statements,
Changes in Equity, Liquidity Statements and notes of •• Discussed the observations relating to inspection
the Bank and discussed with Management and the reports of Bangladesh Bank and compliance thereof.
external auditors prior to submission to the Board of
Directors for their approval.
•• Suggested preventive measures for internal control
lapses those were arisen during the period of inspection.
•• Reviewed with the external auditors about the result of
their audit findings and management letter together
with Management’s response to their findings.
•• Evaluated the performance of external auditors
and make the necessary recommendations for
appointment/re-appointment of External Auditors of
the Bank and to fix their remuneration. Al-haj Akram Hossain (Humayun)
•• Evaluation of internal audit reports and compliances there Vice Chairman and Member
against Branches and Divisions at Head Office level: Audit Committee

CEO & CFO’S DECLARATION

TO THE BOARD
11 March, 2021
The Board of Directors

61, Dilkusha C/A
Dhaka-1000.
Subject: Declaration on Financial Statements for the year ended on 31 December, 2020.
Dear Sirs,
Pursuant to the condition No. 1(5) (xxvi) imposed vide the Commission’s Notification No. BSEC/CMRRCD/2006-158/207/
Admin/80 Dated 03 June, 2018 under section 2CC of the Securities and Exchange Ordinance, 1969, we do hereby
declare that:
(1) The Financial Statements of Mercantile Bank Limited for the year ended on 31 December, 2020 have been prepared
in compliance with International Accounting Standards (IAS) or International Financial Reporting Standards (IFRS),
as applicable in the Bangladesh and any departure there from has been adequately disclosed;
(2) The estimates and judgments related to the financial statements were made on a prudent and reasonable basis, in
order for the financial statements to reveal a true and fair view;
(3) The form and substance of transactions and the Bank’s state of affairs have been reasonably and fairly presented in
its financial statements;
(4) To ensure above, the Bank has taken proper and adequate care in installing a system of internal control and
maintenance of accounting records;
(5) Our internal auditors have conducted periodic audits to provide reasonable assurance that the established policies
and procedures of the Bank were consistently followed; and
(6) The management’s use of the going concern basis of accounting in preparing the financial statements is appropriate
and there exists no material uncertainty related to events or conditions that may cast significant doubt on the Bank’s
ability to continue as a going concern.
In this regard, we also certify that:

(i) We have reviewed the financial statements for the year ended on 31 December, 2020 and that to the best of our
knowledge and belief:
(a) these statements do not contain any materially untrue statement or omit any material fact or contain statements
that might be misleading;
(b) these statements collectively present true and fair view of the Bank’s affairs and are in compliance with existing
accounting standards and applicable laws.
(ii) There are, to the best of knowledge and belief, no transactions entered into by the Bank during the year which are
fraudulent, illegal or in violation of the code of conduct for the Bank’s Board of Directors or its members.
Tapash Chandra Paul, PhD Md. Quamrul Islam Chowdhury

Chief Financial Officer (CFO) Managing Director & Chief Executive Officer

CHIEF FINANCIAL OFFICER (CFO)’S
REVIEW


During the year, Dear Stakeholders,
banking industry A Year of Consolidation
The year 2020 was a remarkably difficult year for the

of the country world following the devastating health and economic
crisis caused by COVID-19.Governments worldwide have
experienced a narrow imposed widespread closures, lock-down, isolation and
restrictions of movement of domestic and international
interest rate spread transports in order to contain the spread of the virus
which has triggered the deepest global recession since
due to Bangladesh World War II. Bangladesh economy has also adversely
affected as all major sectors witnessed a lower growth
Bank’s direction of due to negative impacts of COVID-19.
implementing single Mercantile Bank has responded this unprecedented crisis

through formulating and implementing some effective
digit interest rate strategies in timely and efficient manner. The bank’s
efforts during the year were focused on strengthening
with effective from resilience through developing its asset quality, prudent
investment decision, efficient risk management, ensuring
01 April 2020. As a regulatory compliance, augmenting the capital base and
capitalizing on its investments in digitalization to deliver a
result, net interest differentiated customer experience and quality earnings
growth. Whilst positioning the Bank for sustained growth
income of the bank over the long-term, the momentum has paved the way to
focus on credit growth especially in the diversified sector.
dropped dramatically Review of Financial Results
to BDT 2,655.97 million Net Interest Income
in 2020 from BDT During the year, banking industry of the country
experienced a narrow interest rate spread due to
4,965.65 million in Bangladesh Bank’s direction of implementing single digit
interest rate with effective from 01 April 2020. As a result,
2019 in terms of 47% net interest income of the bank dropped dramatically to
BDT 2,655.97 million in 2020 from BDT 4,965.65 million in
compared to the 2019 in terms of 47% compared to the previous year.
previous year. Non-Interest Income
Non-interest Income declined marginally by 4% in

comparison with that of previous year due to sharp fall
of commission, exchange and brokerage income by 25%
for shrinkage of foreign exchange business induced by
COVID-19 pandemic.

Non-interest Expenses Capital Adequacy
Non-interest expenses raised moderately to BDT 6,595.83 The bank’s confirmed its strong commitment through
million in 2020 from BDT 5,820.26 million in 2019 or 13% maintaining adequate Capital to Risk Weighted Assets
compared to previous year accounting for significant Ratio (CRAR) at 13.61% against the requirement of 12.5%
increase of salaries and allowances by 25%. Apart for the year 2020.
from this, the bank has demonstrated its prudent cost
management in other operating expenses. Asset Quality
Net Profit after Tax NPL ratio of MBL declined to 4.72% in 2020 from 4.86%
in 2019 which is considerably below the industry average
During the year, the bank experienced a slight decrease rate. To further curb the NPL, MBL rigorously monitors
in Net Profit after Tax to BDT 2,161.32 million from BDT its client’s position, adequate follow up, supervision and
2,175.850 million after maintaining adequate provision. reconsideration of its strategies accordingly.
Earnings and Profitability Effective liquidity management
The Bank’s ROE stood at 10.05% in 2020 from 10.99% in The ADR for the bank was 84.30% at year end 2020,
2019 due to increasing its equity base through paying 5% reflecting a strong and stable funding base supporting
Stock Dividend for the year 2019. On the other hand, the the bank’s growing loan portfolio. Moreover, MBL’s
Bank’s ROA stood at 0.67% in 2020 from 0.72% in 2019. funding base benefited from structural improvements in
its balance sheet, and the net stable funding ratio at the
Strengthening Financial Position year-end stood at 106.66% compared to 110.03% in 2019.
The bank maintained a liquidity coverage ratio of 141.93%
In 2020, total assets of the bank stood at BDT 330,785.56
as at year-end 2020, comfortably above regulatory
million showing an increase of 4.56% over the total assets
requirements and improved greatly from 149.43% at the
in 2019. Deposits continued to be the main sources of
year-end 2019.
funds of the bank in 2020 and it constituted 74.15% of the
total amount of liability and shareholders’ equity in 2020. Returns to Shareholders and Other Value Creation
Total shareholders’ equity of the banks was BDT 22,101.78 Activities
million at the end of December 2020 which was BDT
20,908.29 million in 2019. MBL has always been committed to delivering consistent
value to the shareholders. This year, the Board has
proposed a 15% dividend (10% cash & 5% stock) for
Total Assets (BDT in Million)
approval at the forthcoming annual general meeting. The
Bank continued to create value for its shareholders with
an Earnings per Share (EPS) of BDT 2.20 in 2020, and a
330,785.56 Net Asset Value Per Share (NAVPS) of BDT 22.46. During
316,363.47
291,385.64
the year 2020, MBL also contributed BDT 4,693.04 million
to the national exchequer in the form of income tax
260,169.93
payment on bank’s earnings, tax deducted at source, VAT
deducted at source and excise duty.
204,127.47 Digital transformation
2016 2017 2018 2019 2020 One area where the bank sought to improve its
competitive edge was through digital Leadership.
Accelerating ongoing investments in technology, the
CRAR (%) Bank achieved some key milestones in 2020. The launch
of “MBL Rainbow” is an example that demonstrates
13.92% its ability to leverage on digital innovation to provide
superior customer experience on par with global
13.28% 13.61% standards. Admittedly up to now, the Bank’s technology-
13.03% led innovations have focused predominantly on serving
the more tech-savvy customers.
Reinforcing the Bank’s commitment to become digital

to the core, MBL increased its reliance on automation to
11.93%
drive the ongoing transformation of its internal process
architecture.
2016 2017 2018 2019 2020

Regulatory Compliance
Being a Bank, timely and effective implementation of

regulatory requirements are necessary to safeguard
the interests of all stakeholders. Hence, Mercantile Bank
Limited is always committed to strictly comply with all
applicable regulations.
Shaping a Successful Future
Although the future remains challenging, we are cautiously

optimistic that we would navigate the challenges to
shape a successful future delivering increased value to
all our stakeholders.
Our consistent and disciplined approach to managing

risk, our unwavering commitment to regulatory
compliance; strong employee engagement; a long-
standing investment in recruiting; developing and
retaining talented people; and a trusted brand will
continue to anchor everything we do.
Moreover, ongoing COVID-19 pandemic still poses tough

socio-economic challenges all over the world. With a
view to facing the pandemic challenges, Mercantile Bank
Limited has formulated diversified business strategies
for ensuring better sustainability and resilience. It is
hoped that with the combined efforts of all stakeholders,
Mercantile Bank Limited will be able to become finest
corporate citizen in the country.


Independent Auditor’s Report

To the Shareholders of Mercantile Bank Limited
Report on the Audit of the Consolidated and Separate Basis for Opinion
We conducted our audit in accordance with International
Opinion Standards on Auditing (ISAs). Our responsibilities under
those standards are further described in the Auditors’
We have audited the consolidated financial statements of Responsibilities for the Audit of the Consolidated and
Mercantile Bank Limited and its subsidiaries (the “Group”) Separate Financial Statements section of our report. We are
as well as the separate financial statements of Mercantile independent of the Group and the Bank in accordance with
Bank Limited (the “Bank”), which comprise the consolidated the International Ethics Standards Board for Accountants’
and separate balance sheets as at 31 December 2020 and Code of Ethics for Professional Accountants (IESBA Code),
the consolidated and separate profit and loss accounts, guidelines issued by Bangladesh Bank and rules and
consolidated and separate cash flow statements, and regulations issued by Bangladesh Securities and Exchange
consolidated and separate statements of changes in equity Commission (BSEC), and we have fulfilled our other ethical
for the year then ended, and notes to the consolidated responsibilities in accordance with the IESBA Code and the
and separate financial statements, including a summary of Institute of Chartered Accountants of Bangladesh (ICAB) Bye
significant accounting policies. Laws. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
In our opinion, the accompanying consolidated financial
statements of the Group and separate financial statements of Key Audit Matters
the Bank give a true and fair view of the consolidated balance
sheet of the Group and the separate balance sheet of the Bank Key audit matters are those matters that, in our professional
as at 31 December 2020, and of its consolidated and separate judgment, were of most significance in our audit of the
profit and loss accounts, its consolidated and separate cash consolidated and separate financial statements for the year
flow statements, and its consolidated and separate statements 2020. These matters were addressed in the context of our
of changes in equity for the year then ended in accordance audit of the consolidated and separate financial statements
with International Financial Reporting Standards (IFRSs) as as a whole, and in forming our opinion thereon, and we do not
explained in note # 2.0. provide a separate opinion on these matters. For each matter
below our description of how our audit addressed the matters
provided in that context.
1. Measurement of Provision for Loans and Advances

Risk Our response to the risk
The process for estimating the provision for loans and advances We tested the design and operating effectiveness of key controls
portfolio associated with credit risk is significant and complex. focusing on the following:
For the individual analysis, these provisions consider the Tested the credit appraisal, loan disbursement procedures,
estimates of future business performance and the market value monitoring and provisioning process;
of collateral provided for credit transactions. Identification of loss events, including early warning and
For the collective analysis, these provisions are manually default warning indicators;
processed that deals with voluminous databases, assumptions Reviewed quarterly classification of loans (CL);
and calculations for the provision estimates of complex design Our substantive procedures in relation to the provision for loans
and implementation. and advances portfolio comprised the following:
At year end the Group and the Bank reported total gross loans Reviewed the adequacy of the companies general and
and advances of BDT 252,664.33 million (2019: BDT 240,468.61 specific provisions;
million) and 248,994.39 million (2019: BDT 236,890.45 million)
Assessed the methodologies on which the provision
and provision for loans and advances of BDT 11,770.00 million
amounts based, recalculated the provisions and tested the
(2019: BDT 12,154.28 million) and 11,730.00 million (2019: BDT
completeness and accuracy of the underlying information;
12,134.28 million) respectively.
Finally assessed the appropriateness and presentation of
disclosures against relevant accounting standards and
Bangladesh Bank guidelines.
See note # 2.2.3, 7, 13, 13.5 and 13.5.1 (a & b) to the financial statements.
2. Measurement of Deferred Tax Assets
The Bank reports net deferred tax assets (DTA) amounting to We obtained an understanding, evaluated the design and tested
BDT 143.30 million (2019: BDT 124.96 million). the operational effectiveness of the Group’s key controls over
the recognition and measurement of DTAs and the assumptions
Significant judgment is required in relation to deferred tax used in estimating the Group’s future taxable income.
assets as their recoverability is dependent on forecasts of future
We also assessed the completeness and accuracy of the data
profitability over a number of years.
used for the estimations of future taxable income.
We involved tax specialists to assess key assumptions, controls,
recognition and measurement of DTA’s.
disclosures against IAS 12 Income Tax.
See note # 2.6.2.2, 13, 13.4.2 and 13.4.2 (a) to the financial statements.
3. Recognition and subsequent measurement of IFRS 16 Leases
IFRS 16 Leases became effective for annual reporting beginning We assessed the design and implementation of key controls
on or after 01 January 2019 which replaced the existing standard pertaining to the determination of the IFRS 16 Leases impact on
IAS 17 Leases. The application of the lease standard resulted in the financial statements of the bank;
the recognition and subsequent measurement, a right-of-use
Assessed the appropriateness of the incremental borrowing
(ROU) asset at BDT 933.99 million (net present value) (2019:
rate;
BDT 1,234.65 million) and lease liabilities at BDT 743.38 million
(2019: BDT 1,007.22 million). Assessed the correctness of the underlying lease data by
agreeing to original contract and checked the accurateness of
We measured the implementation and subsequent measurement
the IFRS 16 calculations through recalculation of the expected
of IFRS 16 Leases as a key audit matter, as the balances recorded
IFRS 16 adjustment and;
are material, management had to apply several judgments and
estimates such as lease period, incremental borrowing rate, Assessed the disclosures given in the financial statements.
measurement basis among others and consider a significant
data analysis to summarize the lease information used in their
lease calculation model.
See note # 2.2.9, 9, 13, 21 and 33 to the financial statements.
4. Valuation of Treasury Bill, Treasury Bond
The classification and measurement of T-Bill and T-Bond require We assessed the processes and controls put in place by
judgment and complex estimates. In the absence of a quoted the Group to identify and confirm the existence of financial
price in an active market, the fair value of T-Bills and T-Bonds investments.
is determined using complex valuation techniques which may
We obtained an understanding, evaluated the design and tested
take into consideration direct or indirect unobservable market
the operating effectiveness of the key controls over the financial
data and complex pricing models which require an elevated
investment valuation processes, including controls over market
level of judgment.
data inputs into valuation models, model governance, and
valuation adjustments.
We tested a sample of the valuation models and the inputs
used in those models, using a variety of techniques, including
comparing inputs to available market data.
disclosures against relevant accounting standards and
Bangladesh Bank guidelines.
See note # 2.2.2, 6, and 16 (B&C) to the financial statements
5. Carrying Value of Investments in Subsidiaries by the Bank
The Bank has invested in equity shares of its subsidiary namely We have reviewed Management’s analysis of impairment
Mercantile Bank Securities Limited, MBL Asset Management assessment and recoverable value calculation of subsidiaries in
Limited and Mercantile Exchange House UK Limited. As at 31 accordance with IAS 36.
December 2020 the total carrying value of this investment is
BDT 3,645.31 million (2019: BDT 3,644.17 million).
In particular, our discussions with the Management were
focused on the continued appropriateness of the value in use
The Bank is required to conduct impairment test of investment model, the key assumptions used in the model, the reasonably
in subsidiaries when indication exists. The impairment testing possible alternative assumptions, particularly where they had
is considered to be a key audit matter due to complexity and the most impact on the value in use calculation.
judgments required in determining assumptions used to
estimate recoverable amount which is higher of fair value less
cost of sales and value in use. Management has conducted
impairment assessment of its subsidiaries namely Mercantile
Bank Securities Limited, MBL Asset Management Limited and
Mercantile Exchange House UK Limited in accordance with
IAS 36 as there is no impairment indication for investment in
subsidiaries.

See note # 2.2.2 and 9 to the financial statements.

6. Legal and Regulatory Matters
We focused on this area because the Bank and its subsidiaries We obtained an understanding, evaluated the design and tested
(the “Group”) operate in a legal and regulatory environment the operational effectiveness of the Group’s key controls over
that is exposed to significant litigation and similar risks arising the legal provision and contingencies process.
from disputes and regulatory proceedings. Such matters are
We enquired to those charged with governance to obtain their
subject to many uncertainties and the outcome may be difficult
view on the status of all significant litigation and regulatory
to predict.
matters.
We enquired of the Group’s internal legal counsel for all
These uncertainties inherently affect the amount and timing of significant litigation and regulatory matters and inspected
potential outflows with respect to the provisions which have internal notes and reports. We also received formal confirmations
been established and other contingent liabilities. from external counsel.
We assessed the methodologies on which the provision
amounts are based, recalculated the provisions, and tested the
Overall, the legal provision represents the Group’s best estimate
completeness and accuracy of the underlying information.
for existing legal matters that have a probable and estimable
impact on the Group’s financial position. We also assessed the Group’s provisions and contingent
liabilities disclosure.
7. IT Systems and Controls
Our audit procedures have a focus on IT systems and We tested the design and operating effectiveness of the Group’s
controls due to the pervasive nature and complexity of the IT IT access controls over the information systems that are critical
environment, the large volume of transactions processed in to financial reporting. We tested IT general controls (logical
numerous locations daily and the reliance on automated and IT access, changes management and aspects of IT operational
dependent manual controls. controls). This included testing that requests for access to
systems were appropriately reviewed and authorized. We tested
Our areas of audit focus included user access management,
the Group’s periodic review of access rights. We inspected
developer access to the production environment and changes
requests of changes to systems for appropriate approval and
to the IT environment. These are key to ensuring IT dependent
authorization.
and application based controls are operating effectively.
We considered the control environment relating to various
interfaces, configuration and other application layer controls
identified as key to our audit. Where deficiencies were
identified, we tested compensating controls or performed
alternate procedures.
In addition, we understood where relevant, changes were made
to the IT landscape during the audit period and tested those
changes that had a significant impact on financial reporting.
See note # 2.13.8 to the financial statements.
Other Matter financial statements, our responsibility is to read the other

information identified above when it becomes available
The financial statements of the Bank as at and for the year and, in doing so, consider whether the other information is
ended 31 December 2019 were audited by another auditor materially inconsistent with the consolidated and separate
who expressed an unmodified opinion on those statements financial statements or our knowledge obtained in the audit,
on 17 May 2020. or otherwise appears to be materially misstated.
Other Information If, based on the work we have performed, on the other
Management is responsible for the other information. The information obtained prior to the date of this audit report, we
other information comprises all of the information included in conclude that there is a material misstatement of this other
the Annual Report other than the consolidated and separate information; we are required to report that fact. We have
financial statements and our auditors’ report thereon. The nothing to report in this regard.
Annual Report is expected to be made available to us after the Responsibilities of Management and Those Charged with
date of this auditor’s report. Governance for the Consolidated and Separate Financial
Our opinion on the consolidated and separate financial Statements and Internal Controls
statements does not cover the other information and we do Management is responsible for the preparation and fair
not express any form of assurance conclusion thereon. presentation of the consolidated financial statements of the
In connection with our audit of the consolidated and separate Group and also separate financial statements of the Bank in
accordance with IFRSs as explained in note 2.1.1, and for such

internal control as management determines is necessary to may cast significant doubt on the Group’s and the Bank’s
enable the preparation of consolidated and separate financial ability to continue as a going concern. If we conclude
statements that are free from material misstatement, whether that a material uncertainty exists, we are required to draw
due to fraud or error. The Bank Company Act, 1991 (as attention in our auditors’ report to the related disclosures
amended up to date), and the Bangladesh Bank regulations in the consolidated and separate financial statements or,
require the management to ensure effective internal audit, if such disclosures are inadequate, to modify our opinion.
internal control and risk management functions of the Group Our conclusions are based on the audit evidence
and the Bank. The Management is also required to make a self- obtained up to the date of our auditors’ report. However,
assessment on the effectiveness of anti-fraud internal controls future events or conditions may cause the Group and the
and report to Bangladesh Bank on instances of fraud and Bank to cease to continue as a going concern.
forgeries.
Evaluate the overall presentation, structure and content
In preparing the consolidated and separate financial of the consolidated and separate financial statements,
statements, management is responsible for assessing the including the disclosures, and whether the consolidated
Group’s and the Bank’s ability to continue as a going concern, and separate financial statements represent the
disclosing, as applicable, matters related to going concern underlying transactions and events in a manner that
and using the going concern basis of accounting unless achieves fair presentation.
management either intends to liquidate the Group and the
Bank or to cease operations, or has no realistic alternative but Obtain sufficient appropriate audit evidence regarding
to do so. the financial information of the entities or business
activities within the Group to express an opinion on the
Those charged with governance are responsible for overseeing consolidated financial statements. We are responsible for
the Group’s and the Bank’s financial reporting process. the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
Auditor’s Responsibilities for the Audit of the Consolidated
and Separate Financial Statements We communicate with those charged with governance
regarding, among other matters, the planned scope and
Our objectives are to obtain reasonable assurance about timing of the audit and significant audit findings, including
whether the consolidated and separate financial statements any significant deficiencies in internal control that we identify
as a whole are free from material misstatement, whether due during our audit.
to fraud or error, and to issue an auditors’ report that includes
our opinion. Reasonable assurance is a high level of assurance, We also provide those charged with governance with a
but is not a guarantee that an audit conducted in accordance statement that we have complied with relevant ethical
with ISAs will always detect a material misstatement when it requirements regarding independence, and to communicate
exists. Misstatements can arise from fraud or error and are with them all relationships and other matters that may
considered material if, individually or in the aggregate, they reasonably be thought to bear on our independence, and
could reasonably be expected to influence the economic where applicable, related safeguards.
decisions of users taken on the basis of these consolidated
and separate financial statements. From the matters communicated with those charged with
governance, we determine those matters that were of most
As part of an audit in accordance with ISAs, we exercise significance in the audit of the consolidated and separate
professional judgment and maintain professional skepticism financial statements of the current period and are therefore the
throughout the audit. We also: key audit matters. We describe these matters in our auditors’
report unless law or regulation precludes public disclosure
Identify and assess the risks of material misstatement about the matter or when, in extremely rare circumstances,
of the consolidated and separate financial statements, we determine that a matter should not be communicated in
whether due to fraud or error, design and perform audit our report because the adverse consequences of doing so
procedures responsive to those risks, and obtain audit would reasonably be expected to outweigh the public interest
evidence that is sufficient and appropriate to provide a benefits of such communication.
basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for Report on other Legal and Regulatory Requirements
one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the In accordance with the Companies Act, 1994, the Securities
override of internal control. and Exchange Rules, 1987, the Banking Companies Act, 1991
and the rules and regulations issued by Bangladesh Bank, we
Obtain an understanding of internal control relevant to also report that:
the audit in order to design audit procedures that are
appropriate in the circumstances. I) we have obtained all the information and explanations
which to the best of our knowledge and belief were
Evaluate the appropriateness of accounting policies used necessary for the purpose of our audit and made due
and the reasonableness of accounting estimates and verification thereof;
related disclosures made by management.
II) to the extent noted during the course of our audit
Conclude on the appropriateness of management’s use work performed on the basis stated under the Auditor’s
of the going concern basis of accounting and, based Responsibilities for the Audit of the Consolidated and
on the audit evidence obtained, whether a material Separate Financial Statements section in forming the
uncertainty exists related to events or conditions that above opinion on the consolidated financial statements

of the Group and the separate financial statements of v) the records and statements submitted by the branches
the Bank and considering the reports of the Management have been properly maintained and consolidated in the
to Bangladesh Bank on anti-fraud internal controls and financial statements;
instances of fraud and forgeries as stated under the
Management’s Responsibility for the financial statements vi) the consolidated balance sheet and consolidated profit
and internal control: and loss account together with the annexed notes dealt
with by the report are in agreement with the books of
a) internal audit, internal control and risk management account and returns;
arrangements of the Group and the Bank as
disclosed in the financial statements appeared to be vii) the expenditures incurred were for the purpose of the
materially adequate; Bank’s business for the year;
b) nothing has come to our attention regarding viii) the consolidated financial statements of the Group and
material instances of forgery or irregularity or the separate financial statements of the Bank have been
administrative error and exception or anything drawn up in conformity with prevailing rules, regulations
detrimental committed by employees of the Group and accounting standards as well as related guidance
and its related entities other than matters disclosed issued by Bangladesh Bank;
in note 2.13.7 to the financial statements; ix) adequate provisions have been made for loans and
iii) financial statements of the Bank’s subsidiaries namely, advances, other assets and off-balance sheet items
Mercantile Bank Securities Limited have been audited by which are in our opinion, doubtful of recovery;
K. M. Hasan & Co., Chartered Accountants, MBL Asset x) the information and explanations required by us have
Management Limited have been audited by Howlader been received and found satisfactory;
Maria & Co., Chartered Accountants, and Mercantile
Exchange House (UK) Limited have been audited by xi) we have reviewed over 80% of the risk weighted assets of
Jahan & Co., Chartered Management Accountants (UK) the Bank and spent over 3,800 person hours; and
have been properly reflected in the consolidated financial
xii) capital to Risk-weighted Asset Ratio (CRAR) as required
statements;
by Bangladesh Bank has been maintained adequately
iv) in our opinion, proper books of account as required by during the year.
law have been kept by the Group and Bank so far as it
appeared from our examination of those books;
Signed for & on behalf of

MABS & J Partners
Nasir Uddin Ahmed, FCA, FCS, CGMA, ACMA (UK)

Senior Partner
Dhaka, ICAB Enrollment No.: 535
Date: March 11, 2021 DVC No.: 2103140535AS539851

Mercantile Bank Limited and its Subsidiaries
Consolidated Balance Sheet
As at 31 December 2020
Amount in BDT
Notes
Dec-20 Dec-19
PROPERTY AND ASSETS

Cash 3(a) 15,504,631,849 16,788,776,795
Cash in hand (Including foreign currency) 2,358,522,405 2,542,948,612
Balance with Bangladesh Bank & its agent bank(s) (including foreign currency) 13,146,109,444 14,245,828,183
Balance with other banks and financial institutions 4(a) 4,608,619,568 1,289,207,319
In Bangladesh 819,204,984 1,048,738,016
Outside Bangladesh 3,789,414,584 240,469,302
Money at call on short notice 5(a) 248,100,000 365,000,000
Investments 6(a) 50,212,438,830 50,806,920,206

Government 43,568,206,447 44,377,626,068
Others 6,644,232,383 6,429,294,138
Loans and Advances/investments 7(a) 252,664,334,599 240,468,606,394

Loans, Cash Credit, Overdraft etc/investments 241,890,767,377 228,274,889,981
Bills purchased and discounted 10,773,567,222 12,193,716,412
Fixed assets including premises, furniture and fixtures 8(a) 3,109,472,273 3,161,428,865
Other assets 9(a) 6,090,377,750 4,820,161,703
Non- banking assets 10(a) 25,304,394 23,905,709
Total Assets 332,463,279,263 317,724,006,990

Liabilities
Borrowings from other banks, financial institutions and agents 11(a) 38,200,004,834 20,623,045,320
Non-convertible Subordinated Bond 11.6a 3,600,000,000 4,200,000,000
Deposits and other Accounts 245,220,244,052 247,606,440,443

Current/ Al-wadeeah current accounts and other accounts 12.1(a) 59,567,054,150 48,632,260,233
Bills Payable 12.2(a) 4,071,078,095 3,045,627,717
Savings Bank/Mudaraba savings bank deposits 12.3(a) 27,577,416,714 23,894,395,453
Fixed deposits/Mudaraba fixed deposits 12.4(a) 93,258,753,354 116,338,773,679
Deposit under schemes/Mudaraba deposit schemes 12.5(a) 60,745,941,739 55,695,383,360
Other Liabilities 13(a) 23,194,498,983 24,354,823,662

Total Liabilities 310,214,747,869 296,784,309,424
Capital/Shareholders' Equity 22,151,389,824 20,889,627,692

Paid up Capital 14.1 9,840,162,170 9,371,583,020
Statutory Reserve 15(a) 8,421,348,098 7,879,083,376
General Reserve 15.1 1,550,000,000 1,400,000,000
Other Reserve 16(a) 809,785,853 746,752,530
Surplus in Profit & Loss Account 17(a) 1,530,093,703 1,492,208,765
Non Controlling Interest 17(b) 97,141,570 50,069,875

Total Shareholders' Equity 22,248,531,394 20,939,697,566
Total Liabilities & Shareholders' Equity 332,463,279,263 317,724,006,990


Consolidated Balance Sheet (Continued)
Amount in BDT
Notes
Dec-20 Dec-19
OFF-BALANCE SHEET ITEMS
Contingent liabilities
Acceptances and Endorsements 18.1 47,860,347,450 49,314,711,103

Letters of Guarantee 18.2 16,343,993,142 14,781,461,873
Irrevocable Letters of Credit 18.3 38,149,959,661 31,099,559,466
Bills for Collection 18.4 5,757,995,305 6,798,004,286
Other Contingent Liabilities 18.5 - -
Total 108,112,295,558 101,993,736,728
Other commitments
Documentary credits and short term trade related transactions - -

Forward assets purchased and forward deposits placed - -
Undrawn note issuance and revolving underwriting facilities - -
Undrawn formal standby facilities, credit lines and other commitments - -
Total - -
Total Off-Balance Sheet Items including contingent liabilities 108,112,295,558 101,993,736,728
Net Asset Value Per Share (NAVPS) 36(a) 22.61 22.34
The annexed notes form an integral part of these consolidated financial statements.
Managing Director and CEO Director Director Chairman
This is the Consolidated Balance Sheet referred to in our separate report of even date.

MABS & J Partners

Senior Partner

Consolidated Profit & Loss Account
For the year ended 31 December 2020
Amount in BDT
Notes
Dec-20 Dec-19
Interest income/Profit on investment 20(a) 19,470,821,039 23,155,095,356
Interest/Profit Paid on deposits, borrowings etc. 21(a) 16,736,879,584 18,120,004,540
Net interest income 2,733,941,455 5,035,090,817
Investment income 22(a) 4,164,011,945 3,855,632,752
Commission, exchange and brokerage 23(a) 2,311,566,216 3,037,426,557
Other operating income 24(a) 1,572,521,076 1,460,306,486
8,048,099,237 8,353,365,795
Total operating income 10,782,040,692 13,388,456,611
Salaries and allowances 25(a) 3,070,462,045 2,455,289,533
Rent, taxes, insurances, electricity etc. 26(a) 402,389,563 391,187,402
Legal expenses 27(a) 22,321,950 33,217,400
Postage, stamps, telecommunication etc. 28(a) 66,432,549 68,538,394
Stationery, Printings, Advertisements etc. 29(a) 255,793,497 267,038,211
Chief Executive's salary and fees 30(a) 13,087,517 13,191,210
Directors' fees 31(a) 5,706,100 5,502,200
Auditors' fees 32(a) 1,903,928 1,257,146
Depreciation and repair of bank's assets 33(a) 898,546,442 900,436,039
Other expenses 34(a) 1,960,509,681 1,789,485,101
Total operating expenses 6,697,153,272 5,925,142,636
Profit/(Loss) before provision 4,084,887,420 7,463,313,975
Provision for loans and advances/investments including Off Balance Sheet items 13.5(a) 577,413,227 3,607,813,043
Other provision 13.3.1(a) 699,000,000 305,642,102
Total provision 1,276,413,227 3,913,455,145
Total Profit/(Loss) before Taxes 2,808,474,193 3,549,858,830
Provision for Current Tax 13.4.1(a) 594,737,133 1,368,333,012
Provision for Deferred Tax 13.4.2(a) (17,594,591) (41,035,528)
577,142,542 1,327,297,484
Net Profit after Taxation 2,231,331,651 2,222,561,346
Appropriations
Statutory Reserve 15 542,264,723 696,099,371
General Reserve 15.1 150,000,000 -
692,264,723 696,099,371
Retained surplus 1,539,066,928 1,526,461,975
Net profit after Tax attributable to:
Equity holders of Mercantile Bank Ltd. 1,535,995,233 1,525,872,338
Non Controlling Interest 17(b).1 3,071,695 589,637
1,539,066,928 1,526,461,975
Consolidated Earnings Per Share (EPS) 35(a) 2.26 2.26
This is the Consolidated Profit and Loss Account referred to in our separate report of even date.
MABS & J Partners

Senior Partner

Consolidated Cash Flow Statement
Amount in BDT
Notes
Dec-20 Dec-19
A) Cash flows from operating activities
(166,778,710) 7,286,861,244
Interest received 16,204,610,269 22,903,261,977
Interest paid (13,253,615,805) (12,984,431,606)
Dividends receipts 176,256,492 189,595,363
Fees and commission received 1,173,142,859 1,385,282,720
Recoveries on loans previously written off 16,668,695 5,160,882
Payment to the employees (3,070,462,045) (2,455,289,533)
Payment to suppliers (255,793,497) (267,038,211)
Income taxes paid (1,157,585,678) (1,489,680,348)
Received from other operating activities 6,697,384,899 6,776,144,245
Exchange gain 1,138,423,358 1,652,143,837
Other operating income 5,558,961,541 5,124,000,408
Payment for other operating activities (2,393,735,204) (2,465,608,452)
Rent, taxes, insurances and electricity (375,757,760) (368,885,420)
Legal expenses (22,321,950) (33,217,400)
Postage, stamps and telecommunication (66,030,920) (67,916,889)
Auditors' fees (1,903,928) (1,257,146)
Repair and maintenance (82,921,303) (95,952,393)
Chief Executive's salary and fees (13,087,517) (13,191,210)
Directors' fees (5,706,100) (5,502,200)
Other expenses (1,826,005,726) (1,879,685,795)
Operating profit before changes in operating assets & liabilities 4,136,870,985 11,597,397,037
(Increase)/ decrease in operating assets and liabilities (11,386,308,584) (24,075,355,953)
Trading securities 809,419,621 (11,150,643,315)
Loans and advances to other banks - -
Loans and advances to customer (12,195,728,205) (12,924,712,638)
Other assets (Item-wise) (1,267,430,310) (1,557,492,493)
Income generating other assets:
Investment in shares of subsidiary companies
Investment in Shares of subsidiary company (In Bangladesh) Mercantile Bank (18,419,076) (15,229,314)
Securities Limited
Investment in Shares of subsidiary company (In Bangladesh) MBL Asset - (56,000,000)
Management Limited
Investment in Shares of subsidiary company (outside Bangladesh) Mercantile 56,006,966 34,198,778
Exchange House (UK) Limited
In Bangladesh (Mercantile Bank OBU Unit) - -
Islamic-Conv. Adjustment Account - -
Non-Income generating other assets:
Stationery, stamps,printing materials in stock etc (2,804,895) 1,661,681
Advance rent and advertisement - 275,802,460
Interest accued on investment but not collected,commission and brokerage (1,926,809,167) 86,821,658
receivable on shares and debenture and other income receivable
Security deposit 73,435 (743,960)
Preliminery, formation and organization expenses, renovation/development (406,861,508) (63,250,307)
expenses and prepaid expenses
Branch adjustment 517,983,346 (224,638,769)
Suspense Account 211,738,691 (360,559,720)
Right Of Use (ROU) Assets as per IFRS-16 300,661,898 (1,234,650,000)
Clearing adjustment account 1,000,000 (905,000)
12,612,286,693 16,115,550,229
Deposit from other banks 17,576,959,514 438,182,942

Consolidated Cash Flow Statement (Continued)
Amount in BDT
Notes
Dec-20 Dec-19
Deposit from customers (2,386,196,390) 17,728,105,088
Other liabilities (2,578,476,431) (2,050,737,800)
Net cash flows from operating activities 4,095,418,784 2,080,098,820
B) Cash flows from investing activities
Brokerage House customer account - -
(Purchase)/ sale of property, plant and equipment (251,570,382) (242,872,493)
(Purchase)/sale of shares (19,266,442) 10,908,423
(Purchase)/sale of bond 20,000,000 406,000,000
Other investment (7,883,522) (1,130,328,888)
Net cash flows from investing activities (258,720,346) (956,292,958)
C) Cash flows from financing activities
Receipts from issue of loan capital and debt Securities - -
Payments for redemption of loan capital and debt securities (600,000,000) (600,000,000)
Paid for Interest on Subordinated bond (291,531,411) (372,891,780)
Received by issue of right share - -
Dividend paid (1,030,874,132) -
Net cash flows from financing activities (1,922,405,543) (972,891,780)
Net increase/(decrease) in cash & cash equivalent (A+B+C) 1,914,292,895 150,914,082
Effects of Exchange rate changes on cash and cash equivalents 3,927,408 20,959,898
Cash and cash equivalent at beginning of the year 18,446,754,714 18,274,880,733
Cash and cash equivalent at the end of the year 20,364,975,017 18,446,754,714
Net Operating Cash Flow Per Share (NOCFPS) 37(a) 4.16 2.22
Cash and cash equivalents at end of the year
Cash in hand (Including foreign currencies) 3(a) 2,358,522,405 2,542,948,612
Balance with Bangladesh Bank & its agent bank(s) (including foreign currencies) 3(a) 13,146,109,444 14,245,828,183
Balance with other banks and financial institutions 4(a) 4,608,619,568 1,289,207,319
Prize Bonds 6.2 (b) 3,623,600 3,770,600
Money at call on short notice 5(a) 248,100,000 365,000,000
20,364,975,017 18,446,754,714

This is the Consolidated Cash Flow Statement referred to in our separate report of even date.
MABS & J Partners

Senior Partner

Consolidated Statement of Changes in Equity
Amount in BDT
Other Reserve Surplus
Revaluation Non
Paid-up Statutory General Dividend Adjustment Net Balance
Particulars Surplus for Total Controlling Grand Total
Capital Reserve reserve Equalization for Approved of Other Profit/(loss)
Fixed Assets/ Interest
Fund Securities Reserve
Other
A B C D E F G=(D+E+F) H I=(A+B+C+G+H) J K=(I+J)
Balance as at 1 January 2020 9,371,583,020 7,879,083,376 1,400,000,000 45,680,250 33,554,616 667,517,664 746,752,530 1,492,208,765 20,889,627,692 50,069,875 20,939,697,566
Changes in accounting policy - - - - - - - - - - -
Statutory reserve - 542,264,723 - - - - - (542,264,723) - - -
General reserve - - 150,000,000 - - - - (150,000,000) - -
Market adjustment of approved
- - - - 61,634,638 - 61,634,638 - 61,634,638 - 61,634,638
securities (HTM)
Surplus/deficit on account of
- - - - 1,398,685 1,398,685 - 1,398,685 - 1,398,685
revaluation/Reserve of properties/others
- - - - - - - - - - -
revaluation of investments
Currency transaction difference - - - - - - - (1,728,709) (1,728,709) - (1,728,709)
Net gains and losses not recognised
- - - - - - - -
in Income Statement
Net profit for the year after taxation - - - - - - 2,231,331,651 2,231,331,651 47,071,695 2,278,403,346
Transfer - - - - - - - - - -
Issuance of bonus shares 468,579,150 - - - - - - (468,579,150) - - -
Bonus share premium - - - - - - - - -
Cash dividend - - - - - - - (1,030,874,132) (1,030,874,132) - (1,030,874,132)
Dividend equalization fund - - - - - - - - - - -
Non controlling share capital/profit - - - - - - - - - - -
Issue of right share - - - - - - - - - -
Balance as at 31 December 2020 9,840,162,170 8,421,348,099 1,550,000,000 45,680,250 95,189,254 668,916,349 809,785,853 1,530,093,703 22,151,389,825 97,141,570 22,248,531,394
Balance as at 31 December 2019 9,371,583,020 7,879,083,376 1,400,000,000 45,680,250 33,554,616 667,517,664 746,752,530 1,492,208,765 20,889,627,692 50,069,875 20,939,697,566

MABS & J Partners
Managing Director and CEO Director Director Chairman Chartered Accountants
Annual Report 2020

This is the Consolidated Statement of Changes in Equity referred to in our separate report of even date.
311
Dhaka,
Date: March 11, 2021
Senior Partner
ICAB Enrollment No.: 535
DVC No.: 2103140535AS539851
312
Consolidated Liquidity Statement
Asset and Liability Maturity Analysis
Amount in BDT
Up to 1 1-3 3-12 1-5 More than
Particulars Total
Month Months Months Years 5 years
Assets:

Cash in hand 2,357,875,786 2,848,625,444 646,620 - 10,297,484,000 15,504,631,849
Balance with other banks and financial institutions 70,562,575 448,162,255 4,089,894,737 - - 4,608,619,568
Money at call and short notice 248,100,000 - - - - 248,100,000
Investments 1,346,410,676 3,174,305,414 10,165,252,216 5,424,538,159 30,101,932,367 50,212,438,830
Loans and advances/investments 44,925,055,321 36,994,088,807 70,069,132,315 53,478,950,953 47,197,107,203 252,664,334,599
Fixed assets including premises, furniture and fixtures - - 419,305,982 2,690,166,291 - 3,109,472,273
Other assets 1,166,929,670 3,200,115,572 408,037,160 181,500,000 1,133,795,348 6,090,377,750
Non-banking assets - - - 25,304,394 - 25,304,394
Total Assets 50,114,934,027 46,665,297,492 85,152,269,029 61,800,459,797 88,730,318,918 332,463,279,263
Liabilities:
Borrowing from Bangladesh Bank, other banks, financial
4,250,000,000 - 33,950,004,834 - - 38,200,004,834
institutions and agents
Deposits (Conventional and Islamic banking) 37,250,449,160 42,650,750,260 44,620,458,782 35,250,456,785 81,377,050,970 241,149,165,957
Other accounts 4,071,078,095 - - - - 4,071,078,095
Non-convertible Subordinated Bond - - - - 3,600,000,000 3,600,000,000
Provision and other liabilities - 28,083,786 151,576,210 23,014,838,986 23,194,498,983
Total Liabilities 45,571,527,255 42,678,834,046 78,722,039,826 58,265,295,771 84,977,050,970 310,214,747,869
Net Liquidity Gap 4,543,406,772 3,986,463,446 6,430,229,203 3,535,164,026 3,753,267,947 22,248,531,394

Balance Sheet
Amount in BDT
Notes
Dec-20 Dec-19
PROPERTY AND ASSETS

Cash 3 15,503,985,230 16,781,921,933
Cash in hand (Including foreign currencies) 3.1 2,357,875,786 2,536,093,750
Balance with Bangladesh Bank & its agent bank(s) (including foreign currencies) 3.2 13,146,109,444 14,245,828,183
Balance with other banks and financial institutions 4 4,422,150,627 1,165,342,631
In Bangladesh 4.1 633,208,207 924,873,328
Outside Bangladesh 4.2 3,788,942,420 240,469,302
Money at call on short notice 5 248,100,000 365,000,000
Investments 6 48,953,712,794 49,755,982,451
Government 6.4 43,568,206,447 44,377,626,068
Others 6.5 5,385,506,347 5,378,356,383
Loans and Advances/investments 7 248,994,385,876 236,890,448,333
Loans, Cash Credit, Overdraft etc/investments 7.A 238,220,818,654 224,696,731,920
Bills purchased and discounted 7.B 10,773,567,222 12,193,716,412
Fixed assets including premises, furniture and fixtures 8 3,093,340,880 3,142,445,869
Other assets 9 9,544,580,938 8,238,422,004
Non- banking assets 10 25,304,394 23,905,709
Total Assets 330,785,560,739 316,363,468,930

Liabilities
Borrowings from other banks, financial institutions and agents 11 38,071,686,698 20,623,045,320
Non-convertible Subordinated Bond 11.6 3,600,000,000 4,200,000,000
Deposits and other Accounts 12 245,265,709,354 247,624,472,715
Current/ Al-wadeeah current accounts and other accounts 12.1 59,612,519,452 48,650,292,506
Bills Payable 12.2 4,071,078,095 3,045,627,717
Savings Bank/Mudaraba savings bank deposits 12.3 27,577,416,714 23,894,395,453
Fixed deposits/Mudaraba fixed deposits 12.4 93,258,753,354 116,338,773,679
Deposit under schemes/Mudaraba deposit schemes 12.5 60,745,941,739 55,695,383,360
Other Liabilities 13 21,746,387,607 23,007,656,618
Total Liabilities 308,683,783,660 295,455,174,652
Capital/Shareholders' Equity
Paid up capital 14.1 9,840,162,170 9,371,583,020
Statutory reserve 15 8,421,348,098 7,879,083,376
General reserve 15.1 1,550,000,000 1,400,000,000
Other reserve 16 809,785,853 746,752,530
Surplus in Profit & Loss Account 17 1,480,480,958 1,510,875,350
Total shareholders' Equity 22,101,777,079 20,908,294,277
Total Liabilities & Shareholders' Equity 330,785,560,739 316,363,468,930

Balance Sheet (Continued)
Amount in BDT
Notes
Dec-20 Dec-19
OFF-BALANCE SHEET ITEMS
Contingent liabilities
Acceptances and Endorsements 18.1 47,860,347,450 49,314,711,103

Letters of Guarantee 18.2 16,343,993,142 14,781,461,873
Irrevocable Letters of Credit 18.3 38,149,959,661 31,099,559,466
Bills for Collection 18.4 5,757,995,305 6,798,004,286
Other Contingent Liabilities 18.5 - -
Total 108,112,295,558 101,993,736,728
Other commitments
Documentary credits and short term trade related transactions - -

Forward assets purchased and forward deposits placed - -
Undrawn note issuance and revolving underwriting facilities - -
Undrawn formal standby facilities, credit lines and other commitments - -
Total - -
Total Off-Balance Sheet items including contingent liabilities 108,112,295,558 101,993,736,728
Net Asset Value Per Share (NAVPS) 36 22.46 22.31
The annexed notes form an integral part of these financial statements.
This is the Balance Sheet referred to in our separate report of even date.

MABS & J Partners

Senior Partner


Profit and Loss Account
Amount in BDT
Notes
Dec-20 Dec-19
Interest income/Profit on investment 20 19,388,194,360 23,081,814,816
Interest/Profit Paid on deposits, borrowings etc. 21 16,732,221,730 18,116,167,297
Net interest income 2,655,972,630 4,965,647,519
Investment income 22 4,139,008,020 3,828,901,293
Commission, exchange and brokerage 23 2,206,344,726 2,950,703,441
Other operating income 24 1,542,241,824 1,430,754,400
7,887,594,570 8,210,359,134
Total operating income 10,543,567,200 13,176,006,653
Salaries and allowances 25 3,030,838,637 2,416,251,526
Rent, taxes, insurances, electricity etc. 26 386,933,811 365,373,181
Legal expenses 27 21,443,663 31,821,336
Postage, stamps, telecommunication etc. 28 64,596,037 66,492,547
Stationery, Printings, Advertisements etc. 29 254,787,054 265,782,748
Chief Executive's Salary and fees 30 13,087,517 13,191,210
Directors' fees 31 4,597,600 4,727,200
Auditors' fees 32 1,207,500 747,500
Depreciation and repair of bank's assets 33 894,112,670 895,185,906
Other expenses 34 1,924,225,870 1,760,682,601
Total operating expenses 6,595,830,359 5,820,255,754
Profit/(Loss) before provision 3,947,736,841 7,355,750,899
Provision for loans and advances/investments including Off Balance Sheet items 13.5 537,413,227 3,587,813,043
Other provision 13.2.1(VI) 699,000,000 287,441,000
Total provision 1,236,413,227 3,875,254,043
Total profit/(Loss) before taxes 2,711,323,613 3,480,496,856
Provision for Current Tax 13.4.1 568,340,435 1,346,540,534
Provision for Deferred Tax 13.4.2 (18,340,435) (41,540,535)
550,000,000 1,305,000,000
Net profit after taxation 2,161,323,613 2,175,496,856
Appropriations
Statutory reserve 15 542,264,723 696,099,371
General reserve 15.1 150,000,000 -
692,264,723 696,099,371
Retained surplus 1,469,058,890 1,479,397,485
Earnings per share (EPS) 35 2.20 2.21
This is the Profit and Loss Account referred to in our separate report of even date.

MABS & J Partners

Senior Partner
Cash Flow Statement
Amount in BDT
Notes
Dec-20 Dec-19
A) Cash flows from operating activities
(323,266,582) 7,139,178,183
Interest received 16,121,983,590 22,829,981,437
Interest paid (13,248,957,951) (12,980,594,363)
Fees and commission received 1,053,993,961 1,266,749,486
Recoveries on loans previously written off 16,668,695 5,160,882
Payment to the employees (3,030,838,637) (2,416,251,526)
Payment to suppliers (254,787,054) (265,782,748)
Income taxes paid (1,157,585,678) (1,489,680,348)
Received from other operating activities 6,643,830,430 6,735,513,694
Exchange gain 1,140,152,066 1,667,796,831
Payment for other operating activities (2,337,475,915) (2,407,012,674)
Rent, taxes, insurances and electricity (360,302,008) (343,071,199)
Legal expenses (21,443,663) (31,821,336)
Postage, stamps and telecommunication (64,194,408) (65,871,041)
Auditors' fees (57,500) (747,500)
Repair and maintenance (82,921,303) (95,952,393)
Chief Executive's Salary and fees (13,087,517) (13,191,210)
Directors' fees (4,597,600) (4,727,200)
Other expenses (1,790,871,916) (1,851,630,794)
Operating profit before changes in operating assets and liabilities 3,983,087,933 11,467,679,203
(Increase)/ decrease in operating assets and liabilities (11,294,517,923) (23,810,478,775)
Trading securities 809,419,621 (11,150,643,315)
Loans and advances to other banks - -
Loans and advances to customers (12,103,937,544) (12,659,835,460)
Other assets (Item-wise) (1,306,158,934) (1,577,990,665)
Investment in shares of subsidiary companies
Investment in Shares of subsidiary company (In Bangladesh) Mercantile Bank - -
Securities Ltd.
Investment in Shares of subsidiary company (In Bangladesh) MBL Asset - (56,000,000)
Management Ltd.
Investment in Shares of subsidiary company (outside Bangladesh) Mercantile (1,140,734) (1,528,708)
Exchange House (UK) Ltd.
In Bangladesh (Mercantile Bank OBU Unit) - -
Non-Income generating other assets:
Stationery, stamps,printing materials in stock etc (2,804,895) 1,661,681
Advance rent and advertisement - 275,802,460
Interest accued on investment but not collected,commission and brokerage (1,926,809,167) 86,821,658
Security deposit 73,435 (743,960)
Preliminery, formation and organization expenses, renovation/development (406,861,508) (63,250,307)
Branch adjustment 517,983,346 (224,638,769)
Suspense Account 211,738,691 (360,559,720)
Right of Use (ROU) Assets as per IFRS-16 300,661,898 (1,234,650,000)
Clearing adjustment account 1,000,000 (905,000)
12,657,405,068 15,933,307,633
Deposit from other banks 17,448,641,379 542,255,163


Cash Flow Statement (Continued)
Amount in BDT
Notes
Dec-20 Dec-19
Deposit from customers (2,358,763,361) 17,717,147,159
Other liabilities (2,432,472,950) (2,326,094,689)
Net Cash flows from operating activities 4,039,816,143 2,012,517,395
B) Cash flows from investing activities
Purchase/sale of property, plant and equipment (250,635,042) (247,372,317)
Purchase/sale of shares (19,266,442) 10,908,423
Purchase/sale of bond 20,000,000 406,000,000
Other investment activities (7,883,522) (1,130,328,888)
Net cash flows from investing activities (257,785,006) (960,792,782)
C) Cash flows from financing activities
Receipts from Issue of loan capital and debt securities - -
Payments for redemption of loan capital and debt securities (600,000,000) (600,000,000)
Paid for Interest on Subordinated bond (291,531,411) (372,891,780)
Received by issue of right share - -
Dividend paid (1,030,874,132) -
Net cash flows from financing activities (1,922,405,543) (972,891,780)
Net increase/(decrease)in cash & cash equivalent (A+B+C) 1,859,625,594 78,832,834
Effects of Exchange rate changes on cash and cash equivalents 2,198,699 5,306,905
Cash and cash equivalent at the beginning of the year 18,316,035,164 18,231,895,425
Cash and cash equivalent at the end of the year 20,177,859,457 18,316,035,164
Net Operating Cash Flow Per Share (NOCFPS) 37 4.11 2.15
Cash and cash equivalents at end of the year
Cash in hand (Including foreign currencies) 3.1 2,357,875,786 2,536,093,750
Balance with Bangladesh Bank & its agent bank(s) (including foreign currencies) 3.2 13,146,109,444 14,245,828,183
Balance with other banks and financial institutions 4 4,422,150,627 1,165,342,631
Prize Bonds 6.2 (b) 3,623,600 3,770,600
Money at call on short notice 5 248,100,000 365,000,000
20,177,859,457 18,316,035,164
This is the Cash Flow Statement referred to in our separate report of even date.

MABS & J Partners

Senior Partner

318
Statement of Changes in Equity
Amount in BDT
Other reserve
Revaluation
Statutory General Dividend Adjustment Net balance Surplus profit/
Paid-up capital surplus for Total
Particulars reserve reserve Equalization for Approved of other (loss)
Fixed assets/
Fund Securities reserve
Other
A B C D E F G=D+E+F H H=A+B+C+G+H

Balance as at 1 January 2020 9,371,583,020 7,879,083,376 1,400,000,000 45,680,250 33,554,616 667,517,664 746,752,530 1,510,875,350 20,908,294,277
Changes in accounting policy - - - - - - - -
Transfer from income of OBU - - - -
Statutory reserve - 542,264,723 - - - - - (542,264,723) -
General reserve - - 150,000,000 - - - - (150,000,000) -
Market adjustment of approved
- - - - - - - - -
securities (HTM)
- - - - - 1,398,685 1,398,685 - 1,398,685
revaluation/Reserve of properties
- - - - 61,634,637 - 61,634,637 - 61,634,637
revaluation of investments
Currency transaction difference - - - - - - - -
Net gains and losses not recognised - - - - - -
in the income statement - - - - - - - -
Net profit for the year after taxation - - - - - - 2,161,323,613 2,161,323,613
Transfer - - - - - - - - -
Issuance of bonus share 468,579,150 - - - - - - (468,579,150) -
Bonus share premium - - - - - - - - -
Cash dividend - - - - - - - (1,030,874,132) (1,030,874,132)
Dividend equalization fund - - - - - - - - -
Issue of right share - - - - - - - - -
Balance as at 31 December 2020 9,840,162,170 8,421,348,099 1,550,000,000 45,680,250 95,189,253 668,916,349 809,785,853 1,480,480,958 22,101,777,079
Balance as at 31 December 2019 9,371,583,020 7,879,083,376 1,400,000,000 45,680,250 33,554,616 667,517,664 746,752,530 1,510,875,350 20,908,294,277
MABS & J Partners
Managing Director and CEO Director Director Chairman Chartered Accountants
This is the Statement of Changes in Equity referred to in our separate report of even date.
Dhaka,
Senior Partner
ICAB Enrollment No.: 535
DVC No.: 2103140535AS539851
Liquidity Statement
Asset and Liability Maturity Analysis
Amount in BDT
Particulars Total
Assets:
Cash in hand 2,357,875,786 2,848,625,444 - - 10,297,484,000 15,503,985,230
Balance with other banks and financial institutions 70,562,575 448,162,255 3,903,425,797 - - 4,422,150,627
Money at call and short notice 248,100,000 - - - - 248,100,000
Investments 1,346,410,676 3,174,305,414 8,906,526,179 5,424,538,159 30,101,932,367 48,953,712,794
Loans and advances/investments 44,925,055,321 36,994,088,807 66,399,183,592 53,478,950,953 47,197,107,203 248,994,385,876
Fixed assets including premises, furniture and fixtures - - 419,305,982 2,674,034,898 - 3,093,340,880
Other assets 1,166,929,670 3,200,115,572 408,037,160 181,500,000 4,587,998,536 9,544,580,938
Non-banking assets - - - 25,304,394 - 25,304,394
Total assets 50,114,934,027 46,665,297,492 80,036,478,710 61,784,328,404 92,184,522,106 330,785,560,739
Liabilities:
Borrowing from Bangladesh Bank, other banks, financial
4,250,000,000 - 33,821,686,698 - - 38,071,686,698
institutions and agents
Deposits 37,250,449,160 42,650,750,260 44,620,458,782 35,250,456,785 81,422,516,272 241,194,631,259
Other accounts 4,071,078,095 - - - - 4,071,078,095
Non-convertible Subordinated Bond - - 3,600,000,000 3,600,000,000
Provision and other liabilities - 28,083,786 151,576,210 21,566,727,611 - 21,746,387,607
Total liabilities 45,571,527,255 42,678,834,046 78,593,721,690 56,817,184,396 85,022,516,272 308,683,783,660
Net Liquidity Gap 4,543,406,772 3,986,463,446 1,442,757,019 4,967,144,008 7,162,005,834 22,101,777,079
Annual Report 2020

319
Notes to the Financial Statements
As at and for the year ended 31 December, 2020
1.0 Legal Status & Nature of the Bank
Mercantile Bank Limited (“the Bank”) is one of the third generation Private Commercial Banks (PCBs) incorporated in
Bangladesh as a Public Company, Limited by shares under the Companies Act 1994 on 20 May, 1999 and subsequently
obtained Banking operation license from Bangladesh Bank under the Bank Company Act, 1991 as amended in 2018.
The bank commenced its commercial operation on 2 June, 1999. Afterward, the Bank went for public issue of shares
in the year 2003 and its shares are listed with Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE). At
present, the Bank has 150 Branches, 101 agent banking outlets, 185 own Automated Teller Machines (ATMs), 20 Cash
Deposit Machines (CDMs), 2 Off-shore Banking Units (OBU) and 25 Islamic Banking Windows. The Bank has 3 subsidiary
companies namely Mercantile Bank Securities Ltd. (MBSL), MBL Asset Management Limited and Mercantile Exchange
House (UK) Limited as on 31 December, 2020. Apart, the establishment of another one subsidiary- namely MBL MyCash
Limited is in the process of finalization. The registered office of the bank is situated at 61, Dilkusha C/A, Dhaka-1000,
Bangladesh.
1.1 Principal Activities
MBL has been able to establish itself as a leading third generation private commercial bank by dint of its prudent policy
guidelines coupled with proper execution, wider range of banking products and admirable customer services. The core
activities of the Bank are to provide all kinds of commercial banking services including Deposits Mobilization, Corporate
Banking, SME and Consumer Businesses, Discounting bills, Foreign Exchange Business, Off Shore Banking, Treasury
function, Card business, Mobile Banking (MyCash), Internet Banking, Locker Service agent banking and Islamic Banking
etc. MBL caters card services to its customers by VISA dual prepaid card, Credit Card, Debit card, VISA Medical Card,
VISA International Student Card, VISA Dual Hajj Card and International/Dual cards with various up-to-date facilities.
Mercantile Bank has started centralized ‘MBL Contact Center’ to provide banking services to customers’ doorstep on
24/7 basis through 16225.
1.2 Off-shore Banking Unit (OBU)
The Offshore Banking Unit commenced its commercial operation on 20th March 2011 after obtaining permission from
Bangladesh Bank vide letter no. BRPD (P-3)744(114)/2010-1743, dated May 04, 2010. The Bank has also got approval
as per BRPD circular # 2, dated 25 February 2019. At present, the bank has 2 (two) units in operation in Bangladesh
under supervision of Offshore Banking Division at Head Office. The Offshore Banking Units are governed by the rules
and guidelines of Bangladesh Bank. The principal activities of the units are to provide all kinds of commercial banking
services to its customers in foreign currencies as per guideline and instructions set out by the Bangladesh Bank. Separate
Financial Statements of Offshore Banking Division has been drawn up in Annexure-G.
1.3 Mobile Banking Division
The Bank obtained the permission for conducting Mobile Banking Operation under reference letter # DCMPS/
PSD/37(D)/2011-753, dated 2 November, 2011 of Bangladesh Bank. The main activities of the mobile banking services
are to deliver a wide range of financial products and services through mobile phone in the brand of MYCash within the
applicable rules & regulations and guidelines of Bangladesh Bank. MYCash is a customer centric mobile financial service
with a combination of convenient and secured services to ‘Make Life Easy’.
It could be noted that the process of transforming Bank’s Mobile Banking Division to a separate subsidiary company for
rendering better Mobile Financial Services (MFS) to a wide range of customers in the name of ‘MBL MyCash Limited’.
1.4 Islamic Banking Division
Mercantile Bank Ltd. started its Islamic banking operations through ‘Window’ mechanism as per Bangladesh Bank
approval. Mercantile Bank Islamic Banking, the brand name of the operation is “Taqwa” in operation through 25 (Twenty
Five) Islamic banking windows.
Core issue of Islamic Banking is avoidance of interest and compliance of Sharia in its business process & practice. In
addition to the Sharia guidelines, Mercantile Bank Islamic banking operations are strictly complied with the Bangladesh
Bank instructions regarding Islamic banking operations and adheres to the followings:
Completely Separate Fund management.
Separate book-keeping, Profit & Loss Account by Islamic banking Software of Bank’s CBS (T24).
Investments are made from the Islamic banking deposits only.
Profit distributions are executed as per approved weightage table.
A separate Balance-sheet and Profits & Loss account are shown in the Annexure-H, of this report. The figures appears in
the Annexure have been incorporated in the related heads of financial statement as per accounting standards.
1.5 Agent Banking Division
The bank has started agent banking operation in 2019 with a view to reach unbanked population particularly in the
geographically dispersed area and offer banking services to potential customers who are currently out of traditional


banking periphery. MBL has launched agent banking service with 1 outlet in 2019, which is now 101 across the country
with all new customers. This service includes offering all types of deposit accounts and other banking transactions
including bill payments, inward foreign remittance payment, fund transfer etc.
1.6 Subsidiaries of the Bank
The Bank has 3 (three) subsidiaries as follows:
Country of Controlling interest of

Name of the Subsidiaries Principal activities
incorporation Mercantile Bank Ltd.
Mercantile Bank Securities Limited Trading securities Bangladesh 98.61%
Assets Management,
MBL Asset Management Limited Bangladesh 56.00%
Capital Market Operation
Financial services UK 100%
Detail as presented in note no. 1.4.1 to 1.4.3
1.6.1 Mercantile Bank Securities Limited
Mercantile Bank Securities Limited (MBSL) was founded in 2010 and started its commercial operation on 14 September,
2011. MBSL has been licensed from Bangladesh Securities and Exchange Commission (BSEC) with a view to carrying
out Stock Broker & Dealer business in the capital market and other diversified services to a wide range of customers.
MBSL has high quality products and services at a competitive rate. Having seats in both Dhaka Stock Exchange Limited
(TREC no. 224) and Chittagong Stock Exchange Limited (TREC no. 140), MBSL has become a trusted name to most of the
Institutional investors & retail investors in Bangladesh.
MBSL offers full-fledged international standard brokerage service with margin loan facility. It is also a full service
Depository Participant (DP) of Central Depository Bangladesh Ltd. (CDBL). MBSL is dedicated to provide high level of
professional and personalized services to its clients at a reasonable cost. MBSL’s services are comprehensive in nature,
including brokerage, margin loan, CDBL facilities, and research and custodian needs of customers. The Head Office of
MBSL is situated at Shawdesh Tower, 41/6 Purana Palton, Dhaka-1000. The Financial Statements of the Company are
shown in Annexure-I.
1.6.2 Mercantile Exchange House (UK) Limited
Mercantile Exchange House (UK) Limited was incorporated as private limited company with Companies of England and
Wales under registration no. 07456837 on 1 December 2010. The company is a wholly owned subsidiary company of
Mercantile Bank Limited incorporated in Bangladesh, which is also the ultimate holding company. Earlier on 17 September
2010, Mercantile Bank Limited got the permission from Bangladesh Bank for opening a fully owned subsidiary in UK.
Mercantile Exchange House (UK) Limited obtained Anti-Money Laundering registration on 21 February 2011 which was
issued by HM Customs and Excise of the Government of UK.
The company got registration from Financial Services Authority (FSA) on 7 October 2010 as Small Payment Institution to
carry out business under Payment Services Regulations 2009. The company started its commercial operation in London,
UK on 20 September 2012. The Head Office of Mercantile Exchange House (UK) Limited is situated at 108 Whitechapel
Road, London E1 1JD, UK. The Financial Statements of the company are shown in Annexure-k.
1.6.3 MBL Asset Management Limited
MBL Asset Management Limited was incorporated on 29, November 2018 to carry out asset management business,
capital market operation, equity investment etc. It has been registered vide code: BSEC/Assets Manager/2020/45 dated
30, January 2020 to run full-fledged business operations. Registered office is located at 61, Dilkusha Commercial Area,
Motijheel, Dhaka. The Financial Statements of the company are shown in Annexure-j.
2.0 Basis of Preparation of Financial Statements & Other Significant Accounting Policies
2.1 Basis of Accounting
2.1.1 Statement of Compliance
The financial statements of the Bank and its subsidiaries have been prepared for the year ended on 31 December, 2020
on a going concern basis in accordance with the First Schedule (Sec-38) of the Bank Companies Act, 1991 (as amended
up to 2018), BRPD Circular #14 dated 25 June 2003, other Bangladesh Bank circulars, International Accounting Standards
(IASs) & International Financial Reporting Standards (IFRSs) adopted by the Financial Reporting Council of Bangladesh
(FRC), etc.
The Bank has complied with the requirements of following laws and regulations from various Government bodies:
I. The Bank Company Act, 1991(amendment till 2018).
II. The Companies Act, 1994 and amendment thereon.
III. Circulars, Regulations and Guidelines issued by Bangladesh Bank time to time.

IV. Securities and Exchange Ordinance 1969, Bangladesh Securities and Exchange Rules 1987, Bangladesh Securities
and Exchange Commission Act 1993, Bangladesh Securities and Exchange Commission IPO Rules 2006, Gazette
Notification (No. BSEC/CMRRCD/2006-158/208/Admin/81 Dated: 20 June 2018) on Financial Reporting and
Disclosure, Any other directives, Orders and Circulars issued by Bangladesh Securities and Exchange Commission
(BSEC).
V. Dhaka Stock Exchange (DSE) Listing Regulations, 2015, Chittagong Stock Exchange (CSE) (Listing) Regulations, 2015
and Central Depository Bangladesh Limited (CDBL) rules & regulations.
VI. The Income Tax Ordinance, 1984 and Finance Act 2020.
VII. Statutory Regulatory Orders (SROs), General Orders, Notifications issued by NBR time to time
VIII. The VAT and Supplementary Duty Act, 2012 and amendment thereon; The VAT and Supplementary Duty Rules 2016.
IX. The Financial Reporting Act, 2015.
In cases where the requirements of Bangladesh Bank differ with those of other regulatory authorities and IAS/IFRS,
the guidelines of the Bangladesh Bank have been applied in preparing these financial statements. The requirements
of accounting standards as per IAS/IFRS that have been departed to comply with Bangladesh Bank requirements are
disclosed in detail in Note - 2.18 as per the provision of Para 20 of IAS – 1 (Presentation of Financial Statements).
2.1.2 Presentation of financial statements
The presentation of the financial statements has been made as per the requirements of BRPD Circular No 14, dated 25
June, 2003 issued by Bangladesh Bank.
2.1.3 Basis of measurement
The financial statements have been prepared on a historical cost convention, except for the following material items;
Application of Accounting Referred

Items Basis of Measurement
Standards Note No:
Financial Investments Fair Value IAS-32, IFRS-7, IFRS-9, IFRS-13 2.2.2
Freehold Land Stated at Revalued Amount IAS 16, IFRS-13 16.00 (C)
No adjustment has been made for inflationary factors affecting the financial statements. The accounting policies referred
in IAS 8 unless it contradicts with local laws and regulations have been consistently followed by the bank, as appropriate.
2.1.4 Basis of Consolidation
The Consolidated Financial Statements include the financial statements of Mercantile Bank Limited, Off-shore Banking
Units and its subsidiaries- Mercantile Bank Securities Limited, MBL Asset Management Limited and Mercantile Exchange
House (UK) Limited, prepared at the end of the year as on 31 December, 2020. The Consolidated Financial Statements
have been prepared in accordance with IAS 27 “Separate Financial Statements” and IFRS-10 “Consolidated Financial
Statements”.
Subsidiaries
Subsidiaries are all entities over which the bank has the power to govern the financial and operating policies generally
accompanying a shareholding of more than one half of the voting rights. A parent of a subsidiary should present
consolidated financial statements according to IAS 27 “Separate financial statements” and IFRS 10 “Consolidated
Financial Statements”. The financial statements of subsidiary are included in the consolidated financial statements from
the date that control effectively commences until the date that the control effectively ceases. The conversion policy of
subsidiary companies is given below:
Particulars Price Mercantile Exchange House (UK) Ltd.

For Assets & Liabilities Closing Price £1 =114.4085 BDT
For Income & Expenses Average Price £1= 111.8448 BDT
Preparation of Consolidated Financial Statements
Consolidated Financial Statements have been prepared by using uniform accounting policies for like transactions and
other events in similar circumstances.
All intra-group transactions, balances, income and expenses are eliminated on consolidation. Profit and loss resulting
from transactions between groups is also eliminated on consolidation.
2.1.5 Use of Estimates & Judgments
The preparation of financial statements in conformity with International Financial Reporting Standards (IFRS) requires
management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities,


revenue and expenses. It also requires disclosures of contingent assets and liabilities at the date of the financial
statements. Provisions and accrued expenses are recognized in the financial statement in line with the IAS 37 “Provisions,
Contingent Liabilities and Contingent Assets” when-
the Bank has a legal or constructive obligation as a result of past event.
It is probable that an outflow of economic benefit will be required to settle the obligation.
a reliable estimate can be made of the amount of the obligation.
The estimates and associated assumptions are based on historical experience and various other factors that are believed
to be reasonable under the circumstances, the result of which form the basis of making the judgments about carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
estimates.
Significant areas are where management requiring the use of estimate and judgment
Useful life of depreciable assets.
Provision for leases, loans, advances and investments for future impairment.
Provision for Gratuity Fund.
Right of Use of Assets
Lease Liabilities
Revaluation of Land
However, the estimates and underlying assumptions are reviewed on an ongoing basis and the revision is recognized in
the year in which the estimates are revised.
Changes in accounting estimates
Changes are reflected in the assumptions when they occur in accordance with IAS 8, Accounting Policies, and Changes
in Accounting Estimates & Errors. During the year, the bank has not adopted any change of accounting estimates and
consistency applies same accounting estimates of the previous year.
2.1.6 Foreign Currency Transactions and Translations
i) Functional and Presentation Currency
The Bank has determined Bangladesh Taka (BDT) as functional currency. Moreover, functional currency for Off-shore
banking unit is US Dollar (USD) and Mercantile Exchange House (UK) Limited is Pound Sterling (GBP).
The financial statements of Bank and its subsidiaries are presented in Bangladesh Taka (BDT) except as indicated above;
financial information has been rounded off to the nearest Taka.
ii) Foreign Currency translation
Transactions in foreign currencies are converted into equivalent BDT applying the ruling rates on the dates of transaction
as per IAS-21,” The Effects of Changes in Foreign Exchange Rates”. Foreign currencies balances held in US dollar are
converted into BDT at weighted average rate of interbank market as determined by Bangladesh Bank on the closing date
of every month. Balance held in foreign currency other than US dollar are converted into equivalent US dollar at buying
rates of New York closing of the previous day and converted into BDT equivalent.
Foreign currencies are translated into BDT at the following rates as on 31 December, 2020:
Currency BDT
USD 1= 84.8004
GBP 1= 114.4085
EURO 1= 103.7830
JYEN 1= 0.8178
Other foreign currency related transactions have been converted by using the rate of exchange prevailing on the dates
of such transactions.
iii) Commitments
Commitments for outstanding forwarded foreign exchange contracts disclosed in these financial statements are
translated at contracted rates. Contingent commitments for letter of credits and letter of guarantees denominated in
foreign currencies are expressed in BDT terms at the rates of exchange prevailing on the balance sheet date.

iv) Translation gains or losses
The resulting exchange transactions gains or losses are included in the profit or loss account, except those arising on the
translation of net investment in foreign subsidiary.
v) Foreign operation
The results and financial position of the Bank’s operation whose functional currency is not Bangladeshi Taka are translated
into Bangladeshi Taka as follows:
a) Assets and liabilities are translated at the exchange rate prevailing at the balance sheet date;
b) Income and expenses in the income statement are translated at an average rate approximating the exchange rates
at the year end;
c) Resulting exchange differences are recognized as a separate component of equity;
d) As per IAS 21, “Foreign Currency Transactions”, foreign currency denominated non-monetary items of OBUs are
translated at historical rate, as the OBUs are considered as an integral part of the Bank’s operation not a foreign
operation due to specific regulations governing the OBU and unique nature.
2.1.7 Going concern
Going concern is one of the fundamental assumptions in accounting on the basis of which all the financial statements
are prepared. The financial statements of the Bank have been prepared assuming that a business entity will continue
to operate in the foreseeable future without the need or intention on the part of management to liquidate the entity or
to significantly restrain its operational activities. Therefore, it is assumed that the entity will realize its assets and settle
its obligations in the normal course of the business. It is the responsibility of the management of the bank to determine
whether the going concern assumption is appropriate in the preparation of financial statements.
Going Concern Due to COVID-19: Going Concern has become a concern for extensive financial impact over the
organizations due to worldwide COVID -19 pandemic. It is visible that many of the financial and non-financial organizations
have closed down their operation from different part of the world. But in our country Government has taken some
effective initiatives immediately like declaration different stimulus package for different sector. Hence, our overall
economy has stood in a steady position. Moreover, the Management of the Bank has cautiously formulated business
strategies in consideration with COVID-19 induced challenges and implemented the same for building the Bank more
resilient. Therefore any material uncertainty has not been posed due to the impacts of the COVID – 19 that may cast
significant doubt on Bank's ability to continue as a going concern.
2.1.8 Materiality and aggregation
Each material item as considered by management significant has been presented separately in financial statements. No
amount has been set off unless the bank has a legal right to set off the amounts and intends to settle on net basis. Income
and expenditures are presented on a net basis only when permitted by the relevant accounting standards.
2.1.9 Consistency
In accordance with the IFRS framework for the presentation of financial statements together with IAS 1 and IAS 8, the bank
applies the accounting disclosure principles consistently from one year to the next. In case of selecting and applying
new accounting policies, changes in accounting policies applied and correction of errors, the amounts involved are
accounted for and disclosed retrospectively in accordance with the requirement of IAS 8.
2.1.10 Comparative figures
Comparative information has been disclosed in respect of the year ended 31 December, 2020 for all numerical data in
the financial statements and also the narrative and descriptive information when it is relevant for better understanding of
the current year’s financial statements. Previous years have been rearranged whenever considered necessary to ensure
comparability with the current year.
2.1.11 Statement of Cash Flows
The statement of cash flows has been prepared in accordance with the guideline of BRPD Circular # 14, dated 25 June
2003 issued by the Banking Regulation and Policy Department of Bangladesh Bank which is a combination of direct and
indirect methods. In addition to BRPD Circular 14, dated 25 June 2003 as stated, MBL also follows IAS-7 for areas not
covered in the above circular.
2.1.12 Branch accounting
The bank has 150 branches as on 31 December, 2020. Accounts of the branches are maintained at the Branch level, and
consolidated through the “Temenos T24” Core Banking Software (CBS) automatically in head office from which these
accounts are drawn up.


2.1.13 Liquidity Statement
The liquidity statement of assets and liabilities has been prepared in accordance with the residual maturity grouping
as on 31 December 2020 under the presented format of BRPD Circular # 14 dated 25 June 2003. MBL has prepared its
liquidity statement on following basis:
Items On the basis of

Balance with other Banks and financial institutions, money at call
a. maturity term
and short notice, etc.
b. Investments respective maturity
c. Loans and advances/ investments repayment schedules
d. Fixed assets useful lives
e. Other assets realizations/ amortizations
f. Borrowing from other banks, financial institutions and agents etc. maturities/ repayment terms
Maturity term and past trend of withdrawal
g. Deposits and other accounts
by the depositors.
h. Other long term liability Maturity term
i. Provisions and other liabilities payments/ adjustments schedule
2.1.14 Reporting Period
These financial statements cover from 1 January, 2020 to 31 December, 2020.
2.1.15 Events after the reporting period (IAS 10)
Events after the reporting period refer those events, which could be favorable or unfavorable, that occur between the
end of the reporting period and the date that the financial statements are authorized for issue.
2.2 Assets & Basis of their Valuation
2.2.1 Cash & Cash Equivalents
Cash and cash equivalents include notes and coins in hand, unrestricted balances held with Bangladesh Bank and highly
liquid financial assets which are subject to insignificant risk of changes in their fair value and are used by the Bank for its
short term commitments.
2.2.2 Investments
All investment securities are initially recognized at cost, being fair value of the consideration given, including acquisition
charges associated with the investment. Premiums are amortized and discounts accredited, using the effective
yield method is taken to discount income as per IAS 32 “Financial Instruments: Presentations” and IFRS 9 “Financial
Instruments”. Details of investment in shares/securities are given in. The valuation methods of investments include:
Please see Annexure-C.
Held To Maturity (HTM)
HTM consist the Government approved securities in the mode of Treasury bond & Bills which are classified as per
Bangladesh Bank DOS Circular # 5, dated 26 May 2008 and DOS Circular # 5, dated 28 January 2009. These securities
bear fixed coupon payments and are revalued annually on amortized cost method as directed by Bangladesh Bank. The
change in revaluation of the securities is reflected in the Changes in Equity Statement. Please see Annexure-D.
Held For Trading (HFT)
Investments classified in this category are acquired principally for the purpose of selling or repurchasing in short-trading
or if designated as such by the management. After initial recognition, investments are measured at fair value and any
change in the fair value is recognized in the statement of income for the period in which it arises. These investments
are subsequently measured at present value as per the Bangladesh Bank Guideline. Investments in securities have been
revalued as mark-to-market as at 30 December, 2020 and have been shown in the equity. Please see Annexure- D.
REPO and reverse REPO
The Bank has been recording transactions of REPO and reverse REPO following DOS circular no. 6 dated 15 July 2010 of
BB. In case of REPO of both coupon and non-coupon bearing (Treasury Bill) securities, the Bank adjusts the revaluation
reserve account for HFT securities and stops the weekly revaluation (if the revaluation date falls within the REPO period)
of the same security. For interest bearing security, the Bank does not accrue interest during REPO period.

Investment in Listed Securities
These securities are bought and held primarily for the purpose of selling them in future or held for dividend income.
These are valued and reported at market price as per Bangladesh Bank’s guidelines. Booking of provision for Investment
in securities (gain /loss net off basis) are made as per DOS Circular No. 4 dated 24 November 2011.
Investment in Unlisted Securities
Investment in unlisted securities is reported at cost under cost method or NAV if audited financial statements are
available. The required Adjustments are given for any shortage of book value over cost in determining the carrying
amount of investment in unlisted securities.
All investments are stated as per following basis:
Initial Measurement after initial

Investment Class Recording of changes
Recognition recognition
Increase or decrease in value to
Govt. T-bills/bonds- Held to Amortized cost at each
Cost equity and profit & Loss account
Maturity (HTM) period end
respectively.
Fair Value (Weekly revalued Loss to profit & loss account, Gain to
Govt. T-bills/bonds- Held for
Cost at Fair Market value through Revaluation Reserve through Profit &
Trading (HFT)
MTM valuation process) Loss Account.
Loss (gain net off) to Profit & Loss
Lower of Cost or Market
Shares (Quoted) Cost account but no unrealized gain
Value (overall portfolio)
booking.
Lower of Cost or Net Asset Loss to profit & Loss account but no
Share (Unquoted) Cost
value (NAV) unrealized gain booking.
Prize Bond Cost Cost N/A
Investments in Subsidiaries
The Bank recognizes investment in subsidiaries under cost method in the group financial statements in accordance
with IAS 27, “Consolidated and Separate Financial Statements”, IFRS 3 “Business Combination”, IAS 36 “Impairment of
Assets”, IFRS 10, “Consolidated Financial Statements” and IFRS 12, “Disclosure of Interests in Other Entities” . Accordingly,
investments in subsidiaries are stated in the Bank’s balance sheet at cost, less impairment losses (if any).
Offsetting Financial Instruments
Financial assets and financial liabilities are offset and the net amount reported in the balance sheet when there is a legally
enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset
and settle the liability simultaneously as per IFRS 7 “Financial Instruments: Disclosures”.
2.2.3 Loans & Advances/ investments
a. Loans and Advances/investments are stated in the balance sheet on gross basis.
b. Interest/profit is calculated on a daily product basis but charged and accounted for quarterly on accrual basis.
Interest/profit on classified loans and advances is kept in suspense account as per Bangladesh Bank instructions and
such interest/profit is not accounted for as income until realized from borrowers. Interest/ profit is not charged on
bad and loss loans/investment as per guidelines of Bangladesh Bank. Records of such interest/profit amounts are
kept in separate accounts.
c. Commission and discounts on bills purchased and discounted are recognized at the time of realization.
d. Provision for loans and advances/investment is made on the basis of period-end review by the management following
instructions contained in Bangladesh Bank BRPD Circular no. 7 dated 6 December 2005, BRPD Circular no. 14 dated
23 September 2012, BRPD Circular no. 19 dated 27 December 2012, BRPD Circular no. 5 dated 29 May 2013, BRPD
Circular no. 16 dated 18 November 2014. BRPD Circular no. 8 dated 2 August 2015, BRPD Circular no. 13 dated 15 Jun
2020, BRPD Circular no. 16 dated 21 July 2020, BRPD Circular no. 17 dated 28 September 2020, BRPD Circular Letter
No. 52 dated 20 October 2020, BRPD Circular Letter No. 56 dated 10 December, 2020, BRPD Circular Letter No. 63
dated 31 December, 2020. Provisions and interest suspense are separately shown under other liabilities as per First
Schedule of Bank Company Act 1991 (amended up to 2018).The rates of provision for loans and advances are given
below:


Rate of Provision for Unclassified Loans and Advances/Investments
Unclassified loans under Small and Medium Enterprise Financing (SMEF) 0.25% 0.25%
Unclassified loans under Housing Finance (HF) 1% 1%
Unclassified loans under Loans for Professionals (LP) to set up business under
2% 2%
Consumer Financing
Unclassified loans under Consumer Financing (CF) other than Housing Finance and
2% 5%
loans for professionals
Unclassified loans under Credit Cards 2% 2%
Unclassified loans to Brokerage House, Merchant Banking, Stock dealers’ etc. 2% 2%
All unclassified loans other than loans under Small and Medium Enterprise Financing
(SMEF), Housing Finance (HF), Loans for Professionals (LP) Consumer Financing (CF),
1% 1%
Loan to Brokerage House, Merchant Banking, Stock Dealers’ etc. and short-term
agricultural and micro-credit scheme
Unclassified loans under short-term agricultural and micro-credit scheme 1% 1%
Special General Provision under COVID-19 1% -
Off-balance Sheet exposures:
Acceptances and endorsements 1% 1%
Letters of Guarantee
Counter Guarantee rating-1 - -
Counter Guarantee rating-2 0.50% 0.50%
Counter Guarantee rating-3 or 4 0.75% 0.75%
Counter Guarantee rating- other 1% 1%
Irrevocable Letters of Credit 1% 1%
Bills for Collection - -
Forward Contracts 1% 1%
Undrawn formal standby facilities, credit lines and other commitments 1% 1%
In accordance with BRPD Circular no. 05 dated 29 May, 2013, the rate of provision on the outstanding amount of loans
kept in the ‘Special Mention Account’ will be the same as the rates stated above depending on the types of loans and
advances.
Rate of provision for Classified Loans and Advances/Investments

Specific Provision on Sub-standard loans and advances (SS) 20% 20%
Specific Provision on Doubtful loans and advances (DF) 50% 50%
Specific Provision on Bad/Loss loans and advances (BL) 100% 100%
Rate of provision for cottage, micro, small and medium enterprise (CMSME)

Specific Provision on Sub-standard loans and advances (SS) under CMSME 5% 20%
Specific Provision on Doubtful loans and advances (DF) under CMSME 20% 50%
Specific Provision on Bad/Loss loans and advances (BL) under CMSME 100% 100%

Rate for provision for Short-term Agricultural and Micro-credits

Specific Provision on Substandard (SS) 5% 5%
Specific Provision on Doubtful (DF) 5% 5%
Specific Provision on Bad/Loss (BL) 100% 100%
e. Loans and advances/investment are written off to the extent that (i) there is no realistic prospect of recovery, (ii)
and against which legal cases are pending as per guidelines of Bangladesh Bank. These write off; however, will
not undermine/affect the claim amount against the borrower. Detailed memorandum records for all such write off
accounts are meticulously maintained and followed up.
f. Amounts receivable on Credit Cards are included in advances to customers at the amounts expected to be recovered.
g. General Provision against all unclassified Credit Card Loans under Consumer Financing: BRPD Circular No-12 dated
20 August, 2017and BRPD Circular No-47 dated 28 September 2020.
h. Provision for Short-term Agricultural and Micro-Credits: BRPD Circular No-15 dated 27 September, 2017.
2.2.4 Fixed Assets including premises, furniture and fixtures (Property, Plant & Equipment)
a. Recognition and Measurement
All fixed assets are stated at cost less accumulated depreciation as per IAS 16 “Property Plant and Equipment” except
Land. Land is initially measured at cost and then recognized at revalued amount.
The cost of an item of property, plant and equipment is recognizes as an asset if- it is probable that future economic
benefits associated with the item will flow to the entity; and the cost of the item can be measured reliably.
The cost of the items of property, plant and equipment comprises:
i) its purchase price, including import duties and non refundable purchase tax, after deducting trade discount and
rebates.
ii) Any cost directly attributable to bringing the asset to the location and condition necessary for it to be capable of
operating in the manner intended by management.
iii) The initial estimate of the cost of dismantling and removing the item and restoring the site on which it is located,
the obligation for which an entity incurs either when the item is acquired or as consequence of having used the item
during a particular year of purpose other than to produce during that year.
Subsequent costs
Subsequent costs of enhancement of existing assets are recognized as a separate asset, only when it is probable that
future economic benefits associated with the item will flow to the bank and the cost of the item can be measured reliably.
All other repairs and maintenance are charged to the profit and loss account during the financial year in which they are
incurred.
b. Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are
assessed and if a component has a useful life that is different from the remainder of that asset, that component is
depreciated separately.
Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of
an item of property, plant and equipment. Land is not depreciated.
The rates at which property, plant and equipment are depreciated for current and comparative year are as follows:
Category of Assets Estimated useful lives (Years) Rate

Land and Land Development Nil Nil
Building 40 2.5%
Furniture and Fixtures 10 10%
Office Equipment 5 20%
Vehicles 5 20%
Books 5 20%
For addition to property, plant and equipment; depreciation is charged from the month of capitalization and no
depreciation is charged in the month of disposal.


c. Disposal of Fixed Assets
The cost and accumulated depreciation of disposed assets are eliminated from the fixed assets schedule and gains or
losses on disposal of an item of property, plant and equipment are to be determined by comparing the proceeds from
disposal with the carrying amount of the property, plant and equipment disposed off. Profit or (loss) if any is accounted
for in “Other Operating Income” head.
d. Revaluation
The fair value of land and building usually refers its market value. This value is determined by appraisal, normally
undertaken by professionally qualified experts. The fair value of items of plant and equipment is usually their market
value, determined by appraisal. The frequency of revaluation depends upon the movements in the fair value of the items
of property, plant and equipment being revalued.
Increases in the carrying amount as a result of revaluation are credited to shareholders equity under the heading of
revaluation surplus. Decreases in the carrying amount as a result of revaluation are recognized as an expense. However,
a revaluation decrease is charged directly against any related revaluation surplus to the extent that the decrease does
not exceed the amount held in the revaluation surplus in respect of same assets.
e. Capital work in progress (CWIP)
Costs incurred but if the related asset is yet not ready or available to use are recognized as capital work in progress and
disclosed as a part of fixed assets. Once the underlying asset is ready and available to use then it has been transferred
to fixed assets stated at cost. These are expenses of a capital nature directly incurred in the construction of building,
system development, awaiting capitalization. However, no depreciation is calculated on CWIP.
f. Borrowing costs
As per IAS 23, Borrowing Costs that are directly attributable to the acquisition, construction or production of qualifying
assets have been capitalized as part of the cost of the assets.
2.2.5 Intangible Assets
a. Recognition and Measurement
Intangible asset is an identifiable non-monetary asset without physical substance. An intangible asset is recognized if it
is probable that the future economic benefits that are attributable to the assets will flow to the entity and the cost of the
asset can be measured reliably in accordance with IAS 38 “Intangible Assets”.
b. Subsequent expenditure
Subsequent expenditure on intangible asset is capitalized only when it increases the future economic benefits embodied
in the specific assets to which it relates. All other expenditure is expensed as incurred.
Software
Software represents the value of computer application software licensed for use of the Bank, other than software applied
to the operation software system of computers. Intangible assets are carried at its cost less accumulated amortization
and any impairment losses.
Initial cost comprises of license fees paid at the time of purchase and other directly attributable expenditure that are
incurred in customizing the software for its intended use.
Software is amortized using the straight line method over the estimated useful life of 5 (five) years commencing from
date of the application. Software is available for use over the best estimate of its useful economic life.
2.2.6 Assets Revaluation Reserve
The Bank has revalued assets in 2011 by an independent valuation firm as per IAS 16 “Property, Plant & Equipment”.
2.2.7 Impairment of Assets
As per IAS 36 “Impairment of Assets” an asset is impaired when its carrying amount exceeds its recoverable amount. The
Bank assesses at the end of each reporting year whether there is any indication that an asset may be impaired and/ or
whenever events or charges in circumstances indicate that the carrying value of the assets may not be recovered. If any
such indication exists, the Bank makes an estimate of the recoverable amount of the assets. The carrying amount of the
asset is reduced to its recoverable amount, if the recoverable amount is less than its carrying amount and impairment
losses are recognized in the profit and loss account.
2.2.8 Other Assets
Other assets of the Bank include all balance sheet items which are not covered specifically in other areas of the
supervisory activity and such items may be insignificant in terms of overall financial condition of the Bank. Provisions for
other assets (if any) are guided by the BRPD Circular No. 14 dated 25 June, 2001.

2.2.9 Lease
IFRS 16 Leases defines a lease as “A Contract, or part of a contract, that conveys the right to use an asset for a period
of time in exchange for consideration.” The Bank follows IFRS 16 which has been effective from 01 January, 2019 for the
recognition, measurement, presentation and disclosure of leases.
IFRS 16 has a significant impact on the lessee’s accounting for lease contracts whereby Right of Use Assets and Lease
Liability were recorded for all leases under the scope of IFRS 16 (whether finance or operating leases). The adoption
of this standard requires significant management judgement in the determination of lease term i.e. whether extension
or termination options available to the lessee are likely to be exercised and entities had to exercise judgement based
on their business needs to assess the likelihood of exercising these options. As a result of the COVID - 19 outbreaks,
assumptions like reassessment and modification of lease have been considered for IFRS 16.
2.2.10 Receivables
The Bank recognizes receivables when there is a contractual right to receive cash or in form of another financial asset
from another entity.
2.2.11 Non- Banking Assets
Non-banking assets were acquired due to failure of borrowers to repay the loan in time taken against mortgaged property.
The Bank was awarded absolute ownership on few mortgaged properties (mostly land) through the verdict of the
honourable court under section 33(7) of the Artharin Adalat Act 2003. The value of the properties has been recognized
in the financial statements on the basis of third party valuation and reported as non income generating assets.Party wise
details (including possession date) of the properties are separately presented in note-10 and Annexure –D1.
2.2.12 Reconciliation of Inter- bank & Inter- branch Account
Accounts with regard to inter-bank (in Bangladesh and outside Bangladesh) are reconciled regularly and there are no
material differences, which may affect the financial statements significantly. Un-reconciled entries/ balances in inter-
branch transactions as on the reporting date are not material.
2.3 Borrowings from Other Banks, Financial Institutions & Agents
Borrowings include call deposits, Bangladesh Bank refinance, other banks borrowings, off-shore banking unit. The
amounts are recognized at the repayable amount. Interest expenses on these amounts are charge to the profit or loss
account.
2.4 Non-Convertible Subordinated Bond
The Bank has issued 7 (Seven) years term subordinated bond during the year 2014 for BDT 3,000,000,000 to raise
subordinated debt as part of the Tier-II Regulatory Capital following “Guideline on Risk Based Capital Adequacy” through
Bangladesh Bank approval letter # BRPD (BIC) 661/14B (P)/ 2014, dated 15 April 2014. The Bank has further issued 7
(Seven) years term 2nd subordinated bond during the year 2018 for BDT 3,000,000,000 to raise subordinated debt as
part of the Tier-II Regulatory Capital following “Guideline on Risk Based Capital Adequacy (Revised Regulatory Capital
Framework for banks in line with BASEL III)” vide BRPD Circular No- 18 dated December 21, 2014 through Bangladesh
Bank approval letter # BRPD (BFIS) 661/14B(P)/2018-3835 dated June 07,2018 and Bangladesh Securities and Exchange
Commission approval letter # BSEC/CI/CPLC/DS-210/2018/347 dated May 21,2018.
2.5 Deposits & Other Accounts
Deposits and other accounts include non-interest bearing current deposits redeemable at call, interest bearing short-
term deposits, savings deposits and fixed deposits which are initially measured at the consideration received. These
items are subsequently measured and accounted for the gross value of the outstanding balance in accordance with the
contractual agreements with the counterparties.
2.6 Basis for Valuation of Liabilities & Provisions
2.6.1 Benefits to Employees
The retirement benefits accrued for the employees of the Bank as on reporting date have been accounted for in
accordance with the provisions of IAS 19 "Employee Benefit". Bases of enumerating the retirement benefit schemes
operated by the Bank are outlined below:
Provident Fund (Defined Contribution Plan)
Provident fund benefits are given to the permanent employees' of the Bank in accordance with Bank's service rules.
Accordingly, a trust deed and provident fund rules were prepared. The Commissioner of Income Tax, Taxes Zone -3,
Dhaka has approved the Provident Fund as a recognized provident fund within the meaning of section 2(52), read with
the provisions of part - B of the First Schedule of Income Tax Ordinance 1984.
The recognition took effect from 2 June 1999. The Fund is operated by a Board of Trustees consisting of six members (3
members from the management side and other 3 members from the Board of Directors including Managing Director) of
the Bank. All confirmed employees of the Bank are continuing their contribution @10% of their basic salary as subscription
to the Fund. The Bank also similarly contributes equal amount of the employees' contribution. Interest earned from the
investments is credited to the members' account on period basis.
Gratuity Fund (Defined Benefit Plan)
The Bank has started providing Gratuity fund, which was approved by the National Board of Revenue on 5 October 2006.
The Fund is operated by a Board of Trustees consisting of 7 (seven) members of whom 3 members are from the Board of
Directors including Managing Director of the Bank.


Employees of the bank are entitled to gratuity benefit at the following amount:
Duration of continuous and

Entitlement
confirmed service
Up to 10 years 01 (One) month ‘basic’ pay for each completed year of service.
For the first 10 years, 01 (one) month’s basic for each completed year.
From 11th year to 25th year, 02 (two) months ‘basic’ pay for each completed year
From 11 year and above of service.
Total entitlement maximum of 40(forty) months ‘basic’ pay.
The actuarial valuation has not yet been made to assess the adequacy of the liabilities provided for the scheme.
Welfare Fund
Mercantile Bank Limited Employees' Welfare Fund is subscribed by monthly contribution of the employees. The Bank also
contributes to the Fund from time to time. The Fund has been established to provide coverage in the event of accidental
death or permanent disabilities, a portion of retirement benefit & stipend to the employees’ children. Disbursement from
the fund is done as per prescribed rules of employees' Welfare Fund.
Incentive Bonus
Mercantile Bank Limited has good practice to motivate employees through offering “Incentive Bonus” depending on
performance of Banks Profit.
2.6.2 Taxation
Income tax on profit for the year comprises current and deferred tax and is based on the applicable tax law in
Bangladesh. It is recognized in the income statement as tax expense.
2.6.2.1 Current Tax
Provision for current income tax has been made @ 37.5% as prescribed in the Finance Act 2020 on the accounting profit
made by the Bank after considering some of the add backs to income and disallowances of expenditure as per income
tax laws.
2.6.2.2 Deferred Tax
The Bank accounted for deferred tax as per IAS 12 "Income Taxes". Deferred tax is accounted for using the comprehensive
tax balance sheet method. It is generated by temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and their tax base.
Deferred tax assets, including those related to the tax effects of income tax losses and credits available to be carried
forward, are recognized only to the extent that it is probable that future taxable profits will be available against which the
deductible temporary differences or unused tax losses and credits can be utilized.
Deferred tax liabilities are recognized for all taxable temporary differences. They are also recognized for taxable temporary
differences arising on investments and it is probable that temporary differences will not reverse in the foreseeable future.
Deferred tax assets associated with these interests are recognized only to the extent that it is probable that the temporary
difference will reverse in the foreseeable future and there will be sufficient taxable profits against which to utilize the
benefits of the temporary difference.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the
asset and liability giving rise to them are realized or settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the reporting date. The measurement reflects the tax consequences that would follow from
the manner in which the bank, at the reporting date, recovers or settles the carrying amount of its assets and liabilities.
2.6.3 Off- Balance Sheet Items & Provisions
Off-balance sheet items have been disclosed under contingent liabilities and other commitments as per Bangladesh
Bank guidelines, BRPD Circular No. 13 dated 18 October 2018, BRPD Circular # 10, dated 18 September 2007, BRPD
Circular # 14, dated 23 September 2012, and BRPD Circular No-07 21 June 2018 Banks are required to maintain provision
@1% against off-balance sheet exposures (L/C and Guarantee) effective from December 2008. However, in reference to
the BRPD circular No.07, dated 21 June 2018, it was instructed that banks will not to maintain any provision relating to
the Bills for collection. Further, it was also instructed that Banks will not have to maintain any provision against counter
guarantee of government/Multilateral Development Bank (MDB)/International Bank provided that the counter guarantee
issuing Multilateral Development Bank (MDB)/International Bank has to have Bangladesh Bank rating grade-1 equivalent
outlined in the Guidelines on Risk based Capital adequacy (Revised Regulatory Capital framework for banks in line with
Basel III).
2.6.4 Provisions for Nostro Accounts
As per instruction contained in the Circular letter No. FEPD (FEMO)/ 01/ 2005-677, dated 13 September 2005 issued by
Foreign Exchange Policy Department of Bangladesh Bank, Bank is required to make provision regarding the un-reconciled
debit balance of Nostro account as on the reporting date in these financials.

2.7 Share Capital
Ordinary shares are classified as capital/ shareholders’ equity which has no contractual obligation to transfer cash or
other financial assets.
2.7.1 Authorized capital
Authorized capital is the maximum amount of share capital that the Bank is authorized by its Memorandum and Articles
of Association. Details of which are shown in Note 14.
2.7.2 Paid up capital
Paid up capital represents total amount of shareholder capital that has been paid in full by the ordinary shareholders.
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to vote at
shareholders’ meetings. In the event of a winding-up of the Bank, ordinary shareholders rank after all other shareholders
and creditors and are fully entitled to any residual proceeds of liquidation. Details of which are shown in Note 14.3
2.8 Statutory Reserve
As per the provision of section 24 of the Bank Company Act 1991 (as amended up to 2018), the Bank requires to transfer
20% of its current year profit before tax to reserve until such reserve equals to its paid up capital. Accordingly, Bank has
transferred requisite portion of current year profit to the statutory reserve account.
2.9 Non-Controlling Interest
Non-Controlling Interests are measured at their proportionate share of the acquires identifiable net assets at the date
of acquisition as per Para 19 of IFRS 3 “Business Combinations”. The company presents the non-controlling interests in
the consolidated balance sheet within equity, separately from the equity of the owners of parent as per Para 22 of IFRS
10 “Consolidated Financial Statements”. Changes in Group’s interest in a subsidiary that do not result in a loss of control
are accounted for as equity transaction as per Para 23 of IFRS 10 “Consolidated Financial Statements”. The company
attributes the profit and loss to the owners of the parent and to the non-controlling interests even if the results in the non-
controlling interest having a deficit balance as per provision of Para B94 of IFRS 10 “Consolidated Financial Statements”.
When the proportion of the equity held by the non-controlling interests changes, the company adjusted the carrying
amounts of the controlling and non-controlling interests to reflect the changes in their relative interests in the subsidiary
and recognized directly in equity for any difference between the amount by which the non-controlling interests are
adjusted and the fair value of the consideration paid or received, and attribute it to the owners of the parent by as per
provision of Para B96 of IFRS 10 “Consolidated Financial Statements”.
Further details about non-controlling interest are given in Note -17 of Financial Statements.
2.10 Revenue Recognition
In line with IFRS 15 revenue and disclosure in the financial statements the income of the bank has been recognized as
follows.
2.10.1 Interest Income
Interest on loans and advances is calculated on daily product basis, but charged and accounted for on quarterly basis.
Interest on loans and advances ceases to be taken into income when such advances fall under classification. It is then
kept in interest suspense account. Interest on classified loans and advances is accounted for on a cash receipt basis.
Profit on investment (Islamic Banking)
Mark-up on investment is taken into income account proportionately from Unearned Income account. Income/
compensation on classified investments is transferred to compensation/suspense account instead of income account
2.10.2 Interest /Profit Paid & Other Expenses
Interest paid on borrowing and other deposits (conventional banking)
Interest paid and other expenses are recognized on accrual basis.
Profit paid on deposits (Islamic Banking)
Profit paid to mudaraba deposits is recognized on accrual basis according to Investment Income Sharing Ratio (ISR)
applied through commensurating appropriate weightage.
Other operating expenses
All other operating expenses are provided for in the books of the account on accrual basis according to the IAS 1
“Presentation of Financial Statements”.
2.10.3 Investment Income
Interest income on investments is recognized on accrual basis using effective interest rate as per IAS 18 “Revenue”.
Capital gains on investments in shares are recognized as income and credited to investment income in the profit and loss
statement as per IAS 39 “Financial Instruments: Recognition and Measurements”. Capital Gains are recognized when
these are realized.


2.10.4 Fees & Commission Income
Fees and Commission income arising on services provided by the Bank are recognized when those are realized.
Commission charged to customers on letters of credit and letters of guarantee is credited to income as per terms and
conditions of Letter of Credit or Letter of Guarantee in the books of accounts.
2.10.5 Dividend Income on Shares
Dividend income on shares is recognized during the year in which it is declared and right to receive is established.
2.10.6 Rebate to good borrower
As per BRPD Circular No 6 dated 19 March, 2015 and BRPD Circular No 3 dated 16 February, 2016 Banks are required to
provide 10% interest rebate to the good borrower subject to some qualifying criteria. The bank has a policy to provide
the rebate to the customer accordingly.
2.10.7 Dividend Distribution Policy
The Bank formulates its Dividend Distribution Policy in accordance with the directives of Bangladesh Securities and
Exchange Commission (BSEC) as per reference no. BSEC/CMRRCD/2021-386/03 dated. 14 January 2021.
As the major strategic objective of the Bank is to increase shareholders’ value by pursuing ethical practices in the
conduct of its business and maintaining high standard of disclosure and transparency; the Board, management and
other functionaries have distinctly demarcated roles in achieving the corporate goals. The dividend for each year is
recommended by the Board at its discretion for declaration by the shareholders in Annual General Meeting as per the
Policy guidelines, after taking into account of Bangladesh Bank instruction regarding dividend distribution, financial
performance of the Bank, its future plans, internal and external factors, Dividend payout trends, Tax implications, Cost
of raising funds from alternate sources of capital, Corporate actions including expansion plans and investment in
subsidiaries/associates of the Bank, Shareholder expectations and statutory restrictions, etc. The Bank also utilizes the
retained earnings in a manner which is beneficial to the interest of the Bank and its stakeholders, including, but not
limited to ensuring maintenance of a healthy level of capital adequacy ratios, meeting the Bank’s future business growth
/ expansion and strategic plans or such other purpose the Board may deem fit from time to time in the interest of the
Bank and its stakeholders. Moreover, Mercantile Bank Limited ensures timely adoption of any directives and circulars
prescribed by Bangladesh Securities and Exchange Commission, Dhaka Stock Exchange Limited, Chittagong Stock
Exchange Limited regarding dividend distribution and management from time to time.
Dividend Payments
Final Dividend of the Bank and its subsidiaries is recognized only when the shareholders’ right to receive payment is
established and when it is approved by the shareholders in the AGM
2.10.8 Revenue Recognition as per IFRS 15: Revenue from Contracts with Customers
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It
replaces existing recognition guidance, IAS 18 “Revenue”.
Based on preliminary assessment the Mercantile Bank has determined that IFRS 15 has no material impact on its financial
statements. The impact of IFRS 15 will vary depending on a bank’s existing accounting policies and the nature and mix of
its products. Areas most affected could include, but are not limited to, credit cards and loyalty schemes, commissions,
advisory contracts and bundled products. There might not be significant changes in how banks account for revenue, but
all banks will need to review their contracts to ascertain how the new standard applies to their particular circumstances.
Hence, Mercantile Bank herein should also consider how they will comply with the new disclosures required by IFRS 15.
This standard IRFS 15 contains principles that a bank will apply to determine the amount and timing of revenue. The
underlying principle is for a bank to recognize revenue as it renders services to customers at an amount that the entity
expects to be entitled to in exchange for those services. The bank will apply a five-step approach:
Step 1: Identify the contract(s) with the customer.
Step 2: Identify the separate performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to separate performance obligations.
Step 5: Recognize revenue when (or as) each performance obligation is satisfied.
Bank’s revenue has been significantly affected as a result of implementation of single digit interest rate and the reduced
economic activity following the steps taken to control the COVID – 19. Hence, management has considered the both
effects in case of revenue estimates for ongoing and future contracts with customers falling within the scope of “IFRS
15 - Revenue from Contracts with Customers”.
2.11 MBL Foundation
Mercantile Bank Limited performs its Corporate Social Responsibilities and other voluntary and charitable activities as

per the guidelines of Bangladesh Bank and other regulatory frameworks for the welfare of society through Mercantile
Bank Limited Foundation since 2000.
2.12 Operating Segments
Segmental information is presented in respect of Mercantile Bank Limited and its subsidiary. Business segments report
consists of products and services whose risks and returns are different from those of other business segments. These
segments comprise main operations of Commercial Banking including Off-shore Banking Units, Islamic Banking Window
Operation, Mercantile Bank Securities Limited; MBL Assts Managements Limited and Mercantile Exchange House (UK)
Ltd. Geographical segments report consists of products and services within a particular economic environment where
risks and returns are different from those of other economic environments. Inter-segment transactions are generally
based on inter-branch fund transfer measures as determined by the management. Income, expenses, assets and
liabilities are specifically identified with individual segments.
2.13 Risk Management
The risk of Mercantile Bank Limited is defined as the possibility of losses, financial or otherwise. The risk management
of the Bank covers core risk areas of banking viz. credit risk, liquidity risk, market risk that includes foreign exchange
risk, interest rate risk, equity risk, operational risk and reputation risk arising from money laundering incidences. The
prime objective of the risk management is that the Bank evaluates and takes well calculative business risks and thereby
safeguarding the Bank’s capital, its financial resources and profitability from various business risks through its own
measures and through implementing Risk Management Guidelines issued by Bangladesh Bank through DOS Circular No.
4 dated 08 October, 2018 and following some of the best practices as under:
Core Risk Management
BRPD Circulars No.17 dated 7 October 2003 and BRPD Circular No. 4 dated 5 March 2007 require banks to put in place an
effective risk management system. The risk management system of the bank covers the following risk area:
2.13.1 Credit Risk
Credit risk arises mainly from lending, trade finance, and leasing and treasury businesses. This can be described as
potential loss arising from the failure of a counter party to perform as per contractual agreement with the Bank. The
failure may result from unwillingness of the counter party or decline in his/ her financial condition. Therefore, the Bank’s
credit risk management activities have been designed to address all these issues.
The Bank has segregated duties of the officers/ executives involved in credit related activities. A separate Corporate
Division has been formed at Head Office, which is entrusted with the duties of maintaining effective relationship with
the customers, marketing of credit products, exploring new business opportunities, etc. Moreover, credit approval;
administration, monitoring and recovery functions have been segregated.
For this purpose, three separate units have been formed within the Credit Division. These are (a) Credit Risk Management
Unit (b) Credit Administration Unit and (c) Credit Monitoring and Recovery Unit. Credit Risk Management Unit is
entrusted with the duties of maintaining asset quality, assessing risk in lending to a particular customer, sanctioning
credit, formulating policy/ strategy for lending operation, etc. Adequate provision has been made on classified loans.
A thorough assessment is done before sanction of any credit facility at Credit Risk Management Unit. The risk assessment
includes borrower risk analysis, financial analysis, industry analysis, historical performance of the customer, security
of the proposed credit facility, etc. The assessment process starts at Corporate Division by the Relationship Manager
/ Officer and ends at Credit Risk Management Unit when it is approved/ declined by the competent authority. Credit
approval authority has been delegated to the individual executives. Proposals beyond their delegation are approved/
declined by the Executive Committee and/ or the Management of the Bank.
In determining Single borrower / large loan limit, the instructions of Bangladesh Bank are strictly followed. Internal audit
is conducted at periodical intervals to ensure compliance of Bank’s and Regulatory policies. Loans are classified as per
Bangladesh Bank’s guidelines.
2.13.2 Liquidity Risk/ Assets Liability Management
The objective of liquidity risk management is to ensure that all foreseeable funding commitments and deposit withdrawals
can be met when due. To this end, the Bank is maintaining a diversified and stable funding base comprising of core
retail and corporate deposits and institutional balance. Management of liquidity and funding is carried out by Treasury
Department under approved policy guidelines which is formulated in line with “Managing Core Risks in Banking: Asset-
Liability Management” policy issued by Bangladesh Bank. Treasury front office is supported by a very structured Mid
Office and Back Office. Asset Liability Committee (ALCO) monitors the Liquidity Management on a regular basis. A
written contingency plan is in place to manage crisis situation.
2.13.3 Market Risk
Market risk is the possibility of loss arising from changes in the value of a financial instrument as a result of changes in
market variables such as interest rates, exchange rates and commodity prices.
Foreign Exchange Risk
Foreign exchange risk is defined as the potential change in earnings due to change in market prices. The foreign


exchange risk of the Bank is minimal as all the transactions are carried out on behalf of the customers against underlying
L/C commitments and other remittance requirements. No foreign exchange dealing on Bank's account was conducted
during the year.
Treasury Department independently conducts the transactions and the back office of treasury is responsible for
verification of the deals and passing of their entries in the books of account. All foreign exchange transactions are
revalued at Mark-to-Market rate as determined by Bangladesh Bank at the month-end. All Nostro accounts are reconciled
on a monthly basis and the management for its settlement reviews outstanding entry beyond 30 days. The position
maintained by the bank at the end of day was within the stipulated limit prescribed by the Bangladesh Bank.
Interest Rate Risk
Interest rate risk may arise either from trading portfolio and non-trading portfolio. The trading portfolio of the Bank
consists of Government Treasury Bills and Treasury Bonds with maturity varied from 1 to 20 years. The short-term
movement in interest rate is negligible or nil. Interest rate risk of non-trading business arises from mismatches between
the future yield of an asset and its funding cost. Asset Liability Committee (ALCO) monitors the interest rate movement
on a regular basis.
2.13.4 Operational Risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from
external events. Operational risks in the Bank are managed through a comprehensive and well-articulated internal
control framework. Material losses are regularly analyzed by cause and actions are taken to improve system and controls
to prevent recurrence in the future.
Bank has restructured Internal Control and Compliance Division (ICCD) headed by a senior level executive in light of Core
Risk guidelines of Bangladesh Bank. As a tool of Internal Control, the Audit and inspection teams undertake periodic
and special audit and inspection on the branches and departments/ divisions of Head Office in order to sort out the
weaknesses and defects in the control process and report to the management for taking corrective measures to protect
the interests of the Bank.
The Compliance & Monitoring Units ensure timely and proper compliance of all regulatory instructions and internal
policies and procedures in the day-to-day operation of the Bank by way of using various control tools. They assess the
operational risk and take appropriate measures to mitigate the same for smooth operation of the Bank. ICC Division
reports serious non-compliances detected by internal and external auditors with up-to-date compliance position i.e.
large financial risk exposures, control weaknesses etc. to the Audit Committee of the Board for review and taking
appropriate measures.
The ICC division also ensures the clear definition of organizational structure, appropriate assignment, accountability and
delegation of authorities to functional management to create control and compliance culture within organization with
the active guidance and supervision of senior management and Board of Directors.
2.13.5 Reputation Risk Arising from Money Laundering Incidences
Money laundering risk is defined as the loss of reputation and expenses incurred as penalty for being negligent in
prevention of money laundering. For mitigating the risks, the Bank has a designated Chief Compliance Officer at Head
Office and Compliance Officers at branches, who independently review the transactions of the accounts to verify
suspicious transactions. Manuals for prevention of money laundering have been established and transaction profile has
been introduced. Training is continuously given to all the category of Officers and Executives for developing awareness
and skill for identifying suspicious activities/ transactions.
2.13.6 Internal Control & Compliance Risk
To ensure the integrity of liquidity risk management process, Bank has adequate internal controls. These are an integral
part of the Bank's overall system of internal control. An effective system of internal control for liquidity risk includes:
a strong control environment;

an adequate process for identifying and evaluating liquidity risk;
the establishment of control activities such as policies and procedures;
adequate information systems; and
Continual review of adherence to established policies and procedures.
Our all aspects of the internal control system are effective, including those aspects that are not directly part of the risk
management process. The system is evaluated and reviewed regularly by the Management.
Internal Audit
The Bank's compliance risk management system is subject to implementation by the senior management and a qualified
compliance officer/ staff and reviewed by an effective and comprehensive internal audit function.
Compliance risk included in the risk assessment methodology of the internal audit function and an audit program that
covers the adequacy and effectiveness of the Bank’s compliance function established, including testing of controls
commensurate with the perceived level of risk.

This principle implies that the compliance function and the internal audit function separate to ensure that the activities
of the compliance function are subject to independent review. However, the audit function keep the head of compliance
informed of any audit findings related to compliance.
2.13.7 Fraud and Forgeries
Fraud Detection and Management Process: Internal Audit (IA) team conducts surprise audit on all branches and
departments/ divisions of the Head Office at least once in a year. While auditing branches and offices, the IA team
thoroughly checks the operational activities of the branches/ offices including transactions in various accounts and search
for any irregularities occurred in those accounts. IA team also monitors the staff accounts and if necessary investigate
the suspicious transactions and report the same to the management. IA team also conducts investigation into specific
allegations and submits report to the management for action. Senior management of the bank also conduct regular visit
to branches and advise the branch officials to comply with all the regulatory instructions, policies and procedures of the
Bank. Proper financial impact has been given in the books of accounts of the Bank as well as appropriate action has been
taken for any financial irregularities due to fraud or forgery.
2.13.8 Information Technology Risk
Information and Communication Technology (ICT) is the major resource for fueling business ideas and innovations. At
the same time, Information & Communication Technology Security Risk is being considered as one of the major/core
risks for financial industry. Hence, Information and related technology inevitably needs to be suitably protected through
ensuring acceptable level of Information Security to ensure business continuity, minimize business risk, and maximize
return on investments and to help the business to gain a competitive edge/advantage and opportunities.
ICT Security Policy of MBL is prepared in line with the latest ICT Security Guideline of Bangladesh Bank.
Vulnerability Assessment and Penetration Testing (VAPT) has been conducted regularly.
Unauthorized application/software is strictly prohibited to use in MBL.
Unique username and password are assigned to each user to all systems.
Accesses to specific services or modules are limited based on user rights and defined user roles.
‘’Committed to Build Human Firewall’’ is being set as objective of ICT Security Unit.
Interactive and progressive activities like simulated phishing attack, Cyber Awareness Session and Quizzes are
conducted regularly to minimize internal threats and protect data privacy & breach.
Administrative Privileges are defined based on mandatory need basis only.
Public facing services like Internet Banking, Digital app, Mobile Banking, Card Systems have additional layer of
security like multi-factor authentication, SMS, E-mail alerts, etc.
MBL has standard BCP and DRP and cyber incident management team.
2.14 Earnings per Share
The company calculates Earnings per Share (EPS) in accordance with IAS 33 “Earnings per Share” which has been shown
on the face of the Profit and Loss account and the computation of EPS is elaborated in Note-35.
Basic Earnings per Share
Basic earnings per share have been calculated in accordance with IAS 33 "Earnings per Share" which has been shown on
the face of the profit and loss account. This has been calculated by dividing the basic earnings by the weighted average
number of ordinary shares outstanding during the year.
Diluted Earnings per Share
Diluted earnings per share are calculated as dilution has been occurred during the year.
2.15 Directors’ responsibility on financial statements
The Board of Directors’ responsibility is the preparation & presentation of financial statements.
2.16 Memorandum items
Memorandum items are maintained to have control over all items of importance and for such transactions where the
Bank has only a business responsibility and no legal commitment. Stock of travelers’ cheque, savings certificates, wage
earners bonds and other are fallen under the memorandum items.


2.17 Compliance report on International Accounting Standards (IASs) and International Financial Reporting Standards
(IFRSs)
The Financial Reporting Council of Bangladesh (FRC) is the sole authority for adoption of International Accounting
Standards (IASs) and International Financial Reporting Standards (IFRSs). While preparing the financial statements,
Mercantile Bank Limited applied most of IASs and IFRSs as adopted by the FRC. Details are given below:
Name of the IAS IAS No Status

Presentation of Financial Statements 1 Applied*
Inventories 2 N/A
Statement of Cash Flows 7 Applied*
Accounting Policies, Changes in Accounting Estimates & Errors 8 Applied
Events after the Reporting Period 10 Applied
Construction Contracts 11 N/A
Income Taxes 12 Applied
Property, Plant & Equipment 16 Applied
Employee Benefits 19 Applied
Accounting for Government Grants & Disclosure of Government Assistance 20 N/A
The Effects of Changes in Foreign Exchange Rates 21 Applied
Borrowing Costs 23 Applied
Related Party Disclosures 24 Applied
Accounting & Reporting by Retirement Benefit Plans 26 Applied
Consolidated & Separate Financial Statements 27 Applied
Investments in Associates 28 N/A
Interests in Joint Ventures 31 N/A
Financial Instruments: Presentation 32 Applied*
Earnings per Share 33 Applied
Interim Financial Reporting 34 Applied
Impairment of Assets 36 Applied
Provisions, Contingent Liabilities & Contingent Assets 37 Applied
Intangible Assets 38 Applied
Investment Property 40 Applied
Agriculture 41 N/A
Name of the IFRS IFRS No Status

First- time Adoption 1 N/A
Share- based Payment 2 N/A
Business Combinations 3 N/A
Insurance Contracts 4 N/A
Non- current Assets Held for Sale & Discontinued Operations 5 N/A
Exploration for & Evaluation of Mineral Resources 6 N/A
Financial Instruments: Disclosures 7 Applied*
Operating Segments 8 Applied
Financial Instruments 9 Applied*
Consolidated Financial Statements 10 Applied
Joint Arrangement 11 N/A
Disclosure of Interest in Other Entities 12 Applied*
Fair Value Measurement 13 Applied
Regulatory Deferral Accounts 14 N/A
Revenue from contracts with customers 15 Applied
Leases 16 Applied*
*In order to comply with certain specific rules and recognitions of the local Central Bank (Bangladesh Bank) which are
different to IAS/IFRS, local laws and regulation will be prevailed.
2.18 Departures from IAS/IFRS
The consolidated financial statements of the Bank as at and for the year ended 31 December, 2020 have been prepared

under the historical cost convention except investments and in accordance with the “first schedule” (section 38) of the
Bank Companies Act 1991 as amended by Bangladesh Bank (the Central Bank of Bangladesh ) through BRPD Circular No.
14 dated 25 June 2003, other Bangladesh Bank Circulars, International Accounting Standards, International Financial
Reporting Standards (IFRSs), the Companies Act 1994, the Securities and exchange Rules 1987, Dhaka and Chittagong
Stock Exchange’s listing regulations. In case, any requirement of provisions and circulars issued by Bangladesh Bank
differ with those of other regulatory authorities, the provisions and circulars issued by Bangladesh Bank shall prevail.
As such the Bank has departed from those contradictory requirements of IFRSs in order to comply with the rules and
regulations of Bangladesh Bank which are disclosed below:
I) Presentation of Financial Statements
IFRS:
As per ‘IAS 1-Presentation of Financial Statements’ shall comprise statement of financial position, comprehensive
income statement, changes in equity, cash flow statement, adequate notes comprising summary of accounting policies
and other explanatory information. As per para 60 of ‘IAS 1-Presentation of Financial Statements’, the entity shall also
present current and non-current assets and liabilities as separate classifications in its statement of financial position.
Bangladesh Bank:
The presentation of the financial statements in prescribed format (i.e. balance sheet, profit and loss account, cash flow
statement, statement of changes in equity, liquidity statement) and certain disclosures therein are guided by the First
Schedule (section 38) of the Bank Company Act 1991 (amendment up to 2018) and BRPD circular no. 14 dated 25 June
2003 and subsequent guidelines of BB. In the prescribed format there is no option to present assets and liabilities under
current and non-current classifications.
II) Investments in equity instruments (shares, mutual funds, etc.)
IFRS:
Financial Instruments, classification and measurement of investment in shares and securities will depend on how these
are managed (the entity’s business model) and their contractual cash flow characteristics. Based on these factors it
would generally fall either under “at fair value through profit and loss account” or under “at fair value through other
comprehensive income” where any change in the fair value (as measured in accordance with IFRS 13) at the year-end is
taken to profit and loss account or other comprehensive income respectively.
Bangladesh Bank:
As per Banking Regulation & Policy Department of Bangladesh Bank (BRPD) circular no. 14 dated 25 June 2003,
investments in quoted and unquoted shares are revalued on the bases of year end market price and net assets value
(NAV) of last audited balance sheet respectively. As per another instruction issued by Department of Off-site Supervision
of Bangladesh Bank (DOS) circular letter no. 3 dated 12 March 2015, investment in mutual fund (closed-end) is revalued
'at lower of cost and (higher of market value and 85% of NAV)'. As such, provision is made for any loss arising from
diminution in value of investments (portfolio basis); otherwise investments are recognized at costs.
III) Revaluation gain/(loss) on government securities
IFRS:
As per requirement of IFRS 9 where securities will fall under the category of fair value through profit or loss account,
any change in the fair value of assets is recognised through the profit and loss account. Where securities are measured
'at fair value through other comprehensive income' then gains or losses shall be recognised in other comprehensive
income (OCI), except for impairment gains or losses and foreign exchange gains and losses. The loss allowance arise
from impairment shall be recognised in OCI and shall not reduce the carrying amount of financial assets in the Financial
Position. Securities designated as amortised cost are measured at effective interest rate method and interest income is
recognised through the profit and loss account.
Bangladesh Bank:
According to DOS circular no. 5 dated 26 May 2008 and subsequent clarification issue through DOS circular no. 5
dated 28 January 2009, amortisation loss is charged to profit and loss account, mark-to-market loss on revaluation of
government securities (T - bills/T - bonds) categorised as held for trading (HFT) is charged to profit and loss account, but
any unrealised gain on such revaluation is recognised to revaluation reserve account. T - bills/T - bonds designated as
held to maturity (HTM) are measured at amortised cost but interest income/gain is recognised through equity.
IV) Provision on loans and advances/Investments
IFRS:
As per IFRS 9 an entity shall recognise an impairment allowance on loans and advances based on expected credit losses.
At each reporting date, an entity shall measure the impairment allowance for loans and advances at an amount equal to
the lifetime expected credit losses if the credit risk on these loans and advances has increased significantly since initial
recognition whether assessed on an individual or collective basis considering all reasonable information, including that
which is forward-looking. For those loans and advances for which the credit risk has not increased significantly since


initial recognition, at each reporting date, an entity shall measure the impairment allowance at an amount equal to 12
months expected credit losses
Bangladesh Bank:
As per BRPD circular no. 14 dated 23 September 2012, BRPD circular no. 19 dated 27 December 2012, BRPD circular
no. 16 dated 18 November 2014 and BRPD circular no. 8 dated 2 August 2015, a general provision @ 0.25% to 5% under
different categories of unclassified loans (standard/SMA loans) should be maintained regardless of objective evidence
of impairment. And specific provision for sub-standard/doubtful/bad-loss loans should be made at 20%, 50% and 100%
respectively on loans net off eligible securities (if any). Also, a general provision @ 0.5% - 1% should be provided for
certain off-balance sheet exposures. Such provision policies are not specifically in line with those prescribed by IFRS 9.
V) Other comprehensive income
IFRS:
As per ‘IAS 1- Presentation of Financial Statements’ Other Comprehensive Income (OCI) is a component of financial
statements or the elements of OCI are to be included in a single Other Comprehensive Income statement.
Bangladesh Bank:
Bangladesh Bank has issued templates for financial statements which would strictly be followed by all banks. The
templates of financial statements issued by Bangladesh Bank neither include Other Comprehensive Income nor are
the elements of Other Comprehensive Income allowed to be included in a single Other Comprehensive Income (OCI)
Statement. As such the Bank does not prepare the other comprehensive income statement. However, elements of OCI,
if any, are shown in the statements of changes in equity.
VI) Financial guarantees
IFRS:
As per IFRS 9, financial guarantees are contracts that require an entity to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the terms of
the instrument. Financial guarantee liabilities are recognised initially at their fair value and is amortised over the life of
the instrument. Any such liability is subsequently carried at the higher of this amortised amount and the present value of
any expected payment when a payment under the guarantee has become probable. Financial guarantees are prescribed
to be included within other liabilities
Bangladesh Bank:
As per BRPD circular no. 14 dated 25 June 2003, financial guarantees such as LC & LG should be treated as off balance
sheet items. No liability is recognised for such guarantee except the cash margin. However, a general provision @ 0.5%
-1% is provided against such guarantees.
VII) Repo & Reserve Repo transaction
IFRS:
When an entity sells a financial asset and simultaneously enters into an agreement to repurchase asset (or a similar asset)
at a fixed price on a future date (repo or stock lending), the arrangement is treated as a loan and the underlying asset
continues to be recognized in the entry’s financial statements. The difference between selling price and repurchase price
is treated as interest expense. Same rule applies to the opposite side of the transaction (reverse repo).
Bangladesh Bank:
As per DOS Circular letter No. 6 dated 15 July 2010 and subsequent clarification in Dos circular no. 2 dated 23 January
2013, when a bank sells a financial asset and simultaneously enters into an agreement to repurchase the asset (or similar
asset) at a fixed price on a future date (repo or stock lending), the arrangement is accounted for as a normal sales
transactions and the financial assets are derecognized in the seller’s book and recognized in the buyer’s book.
However, as per DMD circular letter No. 7 dated 29 July 2012, non primary dealer banks are eligible to participate in
the Assured Liquidity Support (ALS) programme, whereby such banks may enter collateralized repo arrangements with
Bangladesh Bank. Here the selling bank accounts for the arrangement as a loan, thereby continuing to recognize the
asset.
VIII) Cash and cash equivalents
IFRS:
Cash and cash equivalent items should be reported as cash item as per ‘IAS 7- Statement of Cash Flows’.
Bangladesh Bank:
Some cash and cash equivalent items such as money at call and on short notice, treasury bills, Bangladesh Bank bills and
prize bond are not shown as cash and cash equivalents. Money at call and on short notice presented on the face of the

balance sheet, and treasury bills, prize bonds are shown in investments.
IX) Non banking assets
IFRS:
No indication of Non-banking asset is found in any IFRS.
Bangladesh Bank:
As per BRPD circular no. 14 dated 25 June 2003, there must exist a face item named Non-banking asset.
X) Cash flow statement
IFRS:
As per ‘IAS 7- Statement of Cash Flows’ The Cash flow statement can be prepared using either the direct method or the
indirect method. The presentation is selected to present these cash flows in a manner that is most appropriate for the
business or industry. The method selected is applied consistently.
Bangladesh Bank:
As per BRPD circular no. 14 dated 25 June 2003, cash flow is the mixture of direct and indirect methods.
XI) Balance with Bangladesh Bank (Cash Reserve Requirement)
IFRS:
Balance with Bangladesh Bank should be treated as other asset as it is not available for use in day to day operations as
per ‘IAS 7- Statement of Cash Flows’.
Bangladesh Bank:
Balance with Bangladesh Bank is treated as cash and cash equivalents.
XII) Presentation of intangible asset
IFRS:
An intangible asset must be identified and recognized. And the disclosure must be given as per ‘IAS 38-Intangible
Assets’.
Bangladesh Bank:
There is no regulation for intangible assets in BRPD circular no.14 dated 25 June 2003.
XIII) Off balance sheet items
IFRS:
There is no concept of off-balance sheet items in any IFRS; hence there is no requirement for disclosure of off-balance
sheet items on the face of the balance sheet.
Bangladesh Bank:
As per BRPD circular no.14 dated 25 June 2003, off balance sheet items (e.g. Letter of credit, Letter of guarantee etc.)
must be disclosed separately on the face of the balance sheet.
XIV) Loans and advances net of provision
IFRS:
Loans and advances should be presented net of provisions.
Bangladesh Bank:
As per BRPD circular no.14 dated 25 June 2003, provision on loans and advances are presented separately as liability and
cannot be netted off against loans and advances.
[Also refer to Note-2.17 Compliance of International Accounting Standards (IASs) and International Financial Reporting
Standards (IFRSs)]
2.19 Approval of financial statements
The Board of Directors’ approved the financial statements for year ended 31 December, 2020 on March 11, 2021.


2.20 Component of Financial Statements
As per IAS 1 “Presentation of Financial Statements” and as recommended in the BRPD Circular # 14, dated 25 June 2003
issued by the Banking Regulation and Policy Department of Bangladesh Bank the Financial Statement includes;
a) Balance Sheet (Statement of Financial Position);
b) Profit & Loss account (Statement of Profit or Loss & Other Comprehensive Income);
c) Statement of Changes in Equity;
d) Statement of Cash Flows;
e) Liquidity Statement;
f) Significant Accounting Policies & Explanatories and
g) Notes to the Financial Statements.
2.21 Implementation of BASEL-III
Basel III refers to the latest capital and liquidity standards prescribed by the Bank for International Settlements (BIS).
Bangladesh has entered into the Basel III regime from January 1, 2015. Bangladesh Bank (BB) has amended its capital
standard based on Basel II and circulated new regulatory capital and liquidity guidelines in line with Basel III of BIS. The
Basel III reform measures aim to improve the banking sector's ability to absorb shocks arising from financial and economic
stress thus reducing the risk of spillover from the financial sector to the real economy, improve risk management and
strengthen banks' transparency and disclosures. The new capital and liquidity standards have great implications for banks.
With a view to facilitating the way of implementation of BASEL-III, the bank has formed “Basel Implementation Unit”.
A supervisory committee includes top management of the bank overseeing the unit. The bank has also formed a
Supervisory Review Process (SRP team) to participate the dialogue with the Supervisory Review Evaluation Process
(SREP) team of Bangladesh Bank for measuring the adequate capital requirement.
2.22 Rating
Emerging Credit Rating Limited (ECRL), on the basis of Financial Statements has rated Mercantile Bank Limited. ECRL
rated the Mercantile Bank Limited to “AA” (Pronounced as Double A) in the long term. The above gradation has been done
in consideration with its financial viability and consequent improvement in asset quality, capital adequacy, stable source
of fund, diversified product lines etc. Financial institutions rated in this category are adjudged the financial institution
that is subservient to have high safety to timely repayment of financial obligations. It means Bank rated in the category
is adjudged to be of high quality, offer higher safety and have high credit quality. This level of rating indicate a corporate
entity a sound credit profile and without significant problems. Risks are modest and may vary slightly from time to time
because of economic conditions. ECRL rated the Mercantile Bank Limited to ST-2 in the short term. This rate shows High
Grade of the Bank it indicates high certainty of timely payment. Liquidity factors are strong and supported by good
fundamental protection factors. Risk factors are very small. Both long-term and short-term rating is valid for one year i.e.
from 22 May, 2020 to 21 May, 2021.
Summary of Credit Rating:
Term Rating Indication
Indicates a very strong ability to repay principal and pay interest on a timely basis, with
Long-term AA
limited increment risk compared to issues rated in the highest category.
While the degree of safety regarding timely repayment of principal and payment of
Short-term ST-2
interest is strong, the relative degree of safety is not as high as issues rated ST-1.
In addition to above, Mercantile Bank Ltd has been assigned B2 by Moody’s.
2.23 General
Figures appearing in the Financial Statements have been rounded off to the nearest Taka.

Amount in BDT
Dec-20 Dec-19
3 Cash
Conventional and Islamic banking
Cash in hand (including foreign currencies) 3.1 2,357,875,786 2,536,093,750
Balance with Bangladesh Bank & its agent bank(s)
3.2 13,146,109,444 14,245,828,183
(including foreign currency)
15,503,985,230 16,781,921,933
3.1 Cash in hand (including foreign currencies)
In local currency 2,326,567,537 2,510,350,185
In foreign currency 31,308,249 25,743,565
2,357,875,786 2,536,093,750
3.2 Balance with Bangladesh Bank & its agent bank(s) (including foreign currency)
Bangladesh Bank
In local currency 11,322,317,272 13,482,516,019
In foreign currencies 3.2.a 1,506,176,166 299,426,605
12,828,493,438 13,781,942,624
Agent banks(s)
Sonali Bank Limited. - Local Currency 317,616,005 463,885,559
13,146,109,444 14,245,828,183
3.2.a Balance with Bangladesh Bank in Foreign Currencies
Balance as on Exchange Rate

Currencies
31 Dec-20 (Average of BDT)
USD 17,661,248.09 84.8004 1,497,680,903 291,016,004
GBP 32,097.64 114.4085 3,672,243 1,313,226
EURO 46,468.72 103.783 4,822,663 7,097,035
JPY 437.00 0.8178 357 339
1,506,176,166 299,426,605
3.3 Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR)
Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) have been maintained on the basis of total time and
demand liabilities of the Bank in accordance with the Section 33 of the Bank Company Act, 1991 and clause (1) of Article
36 of Bangladesh Bank Order,1972 (as amended up to 2018). As per MPD Circular # 1 dated 23 June 2014, the required
Statutory Liquidity Ratio (SLR) is to be maintained at 13% for Conventional Banking and as per Bangladesh Bank Letter
No.: DOS/(SR)1153/120-A/2020-2081, dated on 09.08.2020,Islamic Banking is required to be maintained 5.5% for in the
form of securities which include Treasury Bills, Government Treasury Bonds, Bangladesh Bank Bills and Other Securities
approved by Bangladesh Bank such as:T&T Bonds, balance held with Sonali Bank Limited., cash in hand including
vault and balance of FC clearing account maintained with Bangladesh Bank. Now, Bangladesh Bank Monetary Policy
Department has refixed Cash Reserve Requirement vide MPD Circular # 3 dated 09 April 2020. at 4% on bi- weekly
average basis with a provision of minimum 3.5% on daily basis ( effective from 15 April, 2020) .Both reserves are
maintained by the Conventional and Islamic banking with surplus, which are as shown below;
Amount in BDT
Dec-20 Dec-19
a-i ) Cash Reserve Ratio (CRR): 4% of average demand and time liabilities:
Conventional Banking
Required Reserve 10,297,484,000 13,542,287,000
Actual reserve held with Bangladesh Bank 11,691,661,130 13,860,424,810
Surplus on CRR 1,394,177,130 318,137,810


Amount in BDT
Dec-20 Dec-19
a-ii) Cash Reserve Ratio (CRR): 4% of average demand and time liabilities:
Islamic Banking
Required Reserve 18,177,000 -
Actual reserve held with Bangladesh Bank 67,200,000 -
Surplus on CRR 49,023,000 -
b-i) Statutory Liquidity Ratio (SLR): 13% of average demand and time liabilities:
Conventional Banking
Required reserve 34,097,681,000 32,009,044,000
Actual reserve held with Bangladesh Bank 47,448,204,630 47,563,935,150
Surplus on SLR 13,350,523,630 15,554,891,150
b-ii) Statutory Liquidity Ratio (SLR): 5.5% of average demand and time liabilities:
Islamic Banking
Required reserve 24,993,000 -
Actual reserve held with Bangladesh Bank 106,885,700 -
Surplus on SLR 81,892,700 -
3.4 Held for Statutory Liquidity Ratio

a-i). Conventional banking
Cash in hand 2,343,213,086 2,536,093,750
Surplus of CRR 1,394,177,130 318,137,810
Balance with Sonali Bank as an agent of BB 317,616,005 463,885,566
Held for Trading (HFT) 3,529,087,919 9,514,096,393
Held to Maturity (HTM) 39,860,486,890 34,727,951,031
Other Securities 3,623,600 3,770,600
47,448,204,630 47,563,935,150
a-ii). Islamic banking
Cash in hand 14,662,700 -
Surplus of CRR 49,023,000 -
Balance with Sonali Bank as an agent of BB - -
Held for Trading (HFT) 30,000,000 -
Held to Maturity (HTM) - -
Other Securities 13,200,000 -
106,885,700 -
3.5 Maturity grouping of cash
Maturity-wise groupings (inside and outside Bangladesh)
Payable on demand 15,503,985,230 16,781,921,933
Up to 1(one) month - -
Over 1(one) month but not more than 3 (three) months - -
Over 3 (three) months but not more than 1 (one) year - -
Over 1 (one) year but not more than 5 (five) years - -
Over 5 (five) years - -
15,503,985,230 16,781,921,933
3(a) Consolidated Cash
Cash in hand (Including foreign currencies)
Mercantile Bank Limited 2,357,875,786 2,536,093,750
Mercantile Bank Securities Limited 117,242 175,666
MBL Asset Management Limited 467 -
Mercantile Exchange House (UK) Limited 528,910 6,679,196
2,358,522,405 2,542,948,612

Amount in BDT
Dec-20 Dec-19
Balance with Bangladesh Bank and its agent bank. (Including foreign currencies)

Mercantile Bank Securities Limited - -
MBL Asset Management Limited - -
Mercantile Exchange House (UK) Limited - -
13,146,109,444 14,245,828,183
15,504,631,849 16,788,776,795
4. Balance with other banks and financial institutions
4.1 In Bangladesh
Current accounts
Sonali Bank Limited 829,909 1,200,085
Agrani Bank Limited 469,649 788,745
Janata Bank Limited 49,362,268 58,884,279
Pubali Bank Limited - 7,618,150
United Commercial Bank Limited 307,851 341,938
Standard Bank Limited 2,000,000 2,000,000
Bangladesh Commerce Bank Limited 1,000,000 996,225
NRB Commercial Bank Limited 9,341,074 -
NRB Bank Limited 4,750,019 -
Al Arafah Islami Bank Limited 2,500,000 2,500,000
National Bank Limited 1,804 2,865
Sub-Total Current Deposit 70,562,575 74,332,287
Short-Notice Deposits accounts

Standard Chartered (VISA settlement) 11,195,059 3,388,464
Trust Bank Limited (Q-CASH settlement ) (134,296,513) 21,777,979
National Bank Limited 1,113,915 1,264,078
Arab Bangladesh Bank Limited 1,821 1,821
Agrani Bank Limited 36,422,237 59,095,066
South East Bank Limited 4,237,658 5,340,250
Community Bank Bangladesh Limited 150,000,000 -
Shahjalal Islami Bank Limited 100,000 -
Islami Bank Limited 2,108,413 6,815
70,882,589 90,874,472
Off-shore Banking Unit 306,717,091 229,659,548
Sub-Total Short-Notice Deposit 448,162,255 394,866,307
Financial institutions
PFI Securities Limited 1,503 1,503
IIDFC Finance Limited 20,000,000 20,000,000
Bay Leasing and Investment Limited 100,000,000 120,000,000
Meridian Finance & Investment Limited 65,000,000 90,000,000
Uttara Finance Limited - 300,000,000
Sub-Total Financial Institutions 185,045,952 530,007,021
Total 633,208,207 924,873,328


Amount in BDT
Dec-20 Dec-19
4.2 Outside Bangladesh (Nostro accounts)

Currency / Rate
Standard Chartered Bank, New York USD / 84.8004 122,643,546 2,292,252
Mashreq Bank, New York USD / 84.8004 1,988,709,475 1,956,456
Wells Fargo Bank, New York USD / 84.8004 974,952,019 34,397,346
Commerzbank, Frankfurt USD / 84.8004 36,202,762 12,420,166
Standard Chartered Bank ,London GBP /114.4085 5,534,995 63,194,168
The Bank of Tokyo Mitsubishi Limited., Tokyo Japanees Yen/0.8178 1,719,737 630,661
Arab Bangladesh Bank Limited., Mumbai ACU/USD-84.8004 61,309,443 3,517,430
Commerzbank, Frankfurt EURO /103.7830 7,800,145 2,588,202
Standard Chartered Bank, Frankfurt EURO /103.7830 20,496,817 31,771,432
Hatton National Bank, Colombo ACU/USD-84.8004 1,601,134 2,643,925
Bank of Bhutan, Phuentsholing ACU/USD-84.8004 698,168 7,188,098
United Bank of India, Kolkata ACU/USD-84.8004 15,572,935 2,534,262
Sonali Bank, Kolkata ACU/USD-84.8004 37,254 1,070,775
Nepal BD Bank Limited., Kathmandu ACU/USD-84.8004 100,181 189,358
Standard Chartered Bank, Mumbai ACU/USD-84.8004 33,950,819 25,661,715
Meezan Bank Ltd.Karachi,(Former HSBC,Karachi ) ACU/USD-84.8004 27,464,744 18,336,922
ICICI, Mumbai ACU/USD-84.8004 11,779,293 3,977,098
Habib Bank AG Zurich Swiss Franc /95.5982 1,396,791 806,495
Mashreq Bank, Mumbai ACU/USD-84.8004 11,588,169 3,227,974
Habib American Bank USD / 84.8004 263,436,459 8,769,297
JP Morgan Chase Bank NY USD / 84.8004 61,335,317 3,315,013
Habib Metropolitan Bank ACU/USD-84.8004 50,396,148 3,217,351
AXIS Bank Limited ACU/USD-84.8004 24,419,261 2,833,252
Mashreq Bank Dubai Dirham/AED-23.0866 65,796,810 3,929,652
Sub-Total Outside Bangladesh (Nostro accounts) 3,788,942,420 240,469,302
Grand Total (Note 4.1 & Note 4.2) 4,422,150,627 1,165,342,631
Remaining maturity grouping of balance with other banks and financial
4.3
Institutions (inside and outside Bangladesh)
Payable on demand 448,162,255 394,866,307
Up to 1 (one) month - -
Over 1 (one) month but not more than 3 (three) months 3,788,942,420 240,469,302
Over 3 (three) months but not more than 1 (one) year 185,045,952 530,007,021
Over 1 (one) year but not more than 5 (five) years - -
Over 5 (five) years - -
4,422,150,627 1,165,342,630
4(a) Consolidated Balance with Other Banks and Financial Institutions
In Bangladesh
Mercantile Bank Limited 633,208,207 924,873,328
Mercantile Bank Securities Limited 371,357,195 253,919,539
MBL Asset Management Limited 18,762,329 -
1,023,327,732 1,178,792,868
Inter Company Transaction (204,122,749) (130,054,851)
819,204,984 1,048,738,016

Amount in BDT
Dec-20 Dec-19
Outside Bangladesh (Nostro Accounts)

Mercantile Bank Limited 3,788,942,420 240,469,302
Mercantile Exchange House (UK) Limited 472,164 -
3,789,414,584 240,469,302
4,608,619,568 1,289,207,319
5. Money at call on short notice
Bank:
- -
Financial Institution:
FAS Finance & Investment Limited 145,000,000 145,000,000
Reliance Finance Limited - 110,000,000
International Leasing & Financial Services Limited 103,100,000 110,000,000
248,100,000 365,000,000
248,100,000 365,000,000
5(a) Consolidated money at call on short notice
248,100,000 365,000,000
6. Investments
Government Securities (Note- 6.1) 43,568,206,447 44,377,626,068
Other investments (Note- 6.5) 5,385,506,347 5,378,356,383
48,953,712,794 49,755,982,451
6.1 Government Securities: Classified as per Bangladesh Bank circular

Conventional banking
Held for trading (HFT) 3,529,087,919 9,514,096,393
Held to maturity (HTM) 39,860,486,884 34,727,951,031
Other securities 135,431,644 135,578,644
43,525,006,447 44,377,626,068
Islamic banking
Islamic Banking (BGIIB-6 Months, SUKUK-5 Years) Bond 43,200,000 -
43,200,000 -
43,568,206,447 44,377,626,068
6.2 Government Securities: Classified as per nature

a) Government securities:
14 days Treasury Bill - 1,997,638,365
91 days BB Bills 1,142,787,076 4,040,565,381
182 days BB Bills 600,982,930 2,421,623,186
364 days BB Bills 1,349,262,551 944,094,701
3,093,032,557 9,403,921,632


Amount in BDT
Dec-20 Dec-19
b) Government bonds:
2 Years Treasury Bond 2,333,056,450 1,827,722,869
Prize Bonds 3,623,600 3,770,600
40,431,973,890 34,973,704,436
Total (a+b) 43,525,006,447 44,377,626,068
Islamic banking
a) Islamic Banking Bond:
Islamic Banking BGIIB Bond for 6 Months 30,000,000 -
Islamic Banking SUKUK Bond for 5 Years 13,200,000 -
43,200,000 -
Total 43,568,206,447 44,377,626,068
Note:- Value of securities as on 31 December 2020 are also adjusted with the
values determined by mark-to-market method.
6.3 Government Securities: Maturity grouping wise
Payable on demand 3,623,600 3,770,600
Up to 1 (one) month 1,342,787,076 3,090,396,766
Over 1 (one) month but not more than 3 (three) months 3,174,305,414 493,695,502
Over 3 (three) months but not more than 1 (one) year 3,521,019,832 6,823,102,232
Over 1 (one) year but not more than 5 (five) years 5,424,538,159 7,311,932,828
Over 5 (five) years 30,101,932,367 26,654,728,140
43,568,206,447 44,377,626,068
6.4 Government securities: Aging as per Bangladesh Bank Circular
A. Held for Trading (HFT) securities
14 days Treasury Bills - 1,997,638,365
91 days Treasury Bills 1,142,787,076 4,040,565,381
182 days Treasury Bills 600,982,930 2,421,623,186
364 days Treasury Bills 1,349,262,551 944,094,701
2 Years Treasury Bond 41,717,135 -
5 Years Treasury Bond 112,256,804 -
10 Years Treasury Bond 48,179,221 3,887,704
3,529,087,919 9,514,096,393
B. Held to Maturity (HTM) securities
39,860,486,884 34,727,951,031

Amount in BDT
Dec-20 Dec-19
C. Other Securities
* Encumbered Treasury Bond (20 years)-lien with Bangladesh Bank 131,808,044 131,808,044
Prize Bonds 3,623,600 3,770,600
135,431,644 135,578,644
Total (A+B+C)) 43,525,006,447 44,377,626,068

Islamic banking
A. Islamic Banking (BGIIB-6 Months, SUKUK-5 Years) Bond 43,200,000 -
43,200,000 -
Total 43,568,206,447 44,377,626,068
* Encumbered Treasury Bond (20 years) : Tk. 131,808,044, ISIN No.BD0929201202, which are lien with Bangladesh Bank
for TT discounting purpose till 23.12.2029
6.5 Others Investments

A. Investment in shares:
a) Quoted:
IDLC Finance Limited 233,135,524 233,135,524
MBL 1st Mutual Fund 200,000,000 200,000,000
Bangladesh Export Import Company Limited (BEXIMCO) 30,947,879 30,947,879
Lanka Bangla Finance Limited 25,177,922 25,177,922
RAK Ceramics (Bangladesh) Limited 12,980,620 12,980,620
ITCL (IT consultants Limited) 10,000,000 10,000,000
Prime Finance & Investment Limited 8,517,764 8,517,764
National Bank Limited 5,729,116 5,729,116
Titas Gas Transmission & Dist. Co. Limited 5,082,290 4,706,629
Navana CNG Limited 3,488,726 3,488,726
Uttara Bank Limited 1,792,193 1,792,193
Advent Pharmaceuticals Limited - 2,840
Ring Shine Textile 12,242 1,135,989
Genexil - 3,403
Esquire Knit Limited 245,025 470,025
New Line Clothing Limited - 40,011
Runner Automobile Limited 282,927 282,927
SilCophl Limited 33,169 39,798
Square Pharma 8,522,080 -
Crystal Insurance Limited 108,790 -
Robi Axiata Limited 1,311,880 -
Mobil Jamuna 397,082 -
Ashugonj Power Station Company Limited 10,000,000 -
Copper Tech - 47,420
557,765,229 538,498,787


Amount in BDT
Dec-20 Dec-19
b) Unquoted:
Bangladesh Fixed Income Special Purpose Vehicle (BFISPV) 1,000,000,000 1,000,000,000
Central Counter 37,500,000 37,500,000
SWIFT 8,102,228 5,218,706
Central Depository Bangladesh Limited (CDBL) 5,138,890 5,138,890
Ashugonj Power Station Company Limited - 10,000,000
Lubra Bangladesh Limited 10,000,000 -
Market Stabilization Fund Asset Management Company Limited 2,000,000 2,000,000
Energypac 5,000,000 -
1,067,741,118 1,059,857,596
Total-A: (a+b) 1,625,506,347 1,598,356,383
Market price of quoted shares (Annexure-C) 1,586,224,109 1,138,530,549
Gain/(Loss) arises (Annexure-C) 1,028,458,881 600,031,762
B. Investment in Subordinated Bond
Southeast Bank Subordinated Bond 50,000,000 100,000,000
Eastern Bank Subordinated Bond 100,000,000 150,000,000
Exim Bank Subordinated Bond 100,000,000 150,000,000
Prime Bank Subordinated Bond 100,000,000 150,000,000
Bank Asia Subordinated Bond 200,000,000 300,000,000
Jamuna Bank Subordinated Bond - 300,000,000
United Commercial Bank Subordinated Bond 200,000,000 300,000,000
Al-Arafa Islami Bank Subordinated Bond 100,000,000 150,000,000
Trust Bank Subordinated Bond 60,000,000 80,000,000
SIBL 2nd Mudaraba Subordinated Bond 150,000,000 200,000,000
The City Bank 2nd Mudaraba Subordinated Bond 400,000,000 400,000,000
First Security Islami 2nd Mudaraba 160,000,000 200,000,000
United Commercial Bank 3rd Subordinated Bond 160,000,000 200,000,000
Standard Bank Ltd Subordinated Bond 280,000,000 350,000,000
Prime Bank Ltd 3rd Subordinated Bond 500,000,000 500,000,000
FSIBL Mudaraba 3rd Subordinated Bond 250,000,000 250,000,000
Standard Bank Ltd 3rd Subordinated Bond 200,000,000 -
Southeast Bank 4th Subordinated Bond 750,000,000 -
Total (B) 3,760,000,000 3,780,000,000
Grand Total (A+B) 5,385,506,347 5,378,356,383
6.6 REPO & Reverse REPO Transctions during the period ended on 31 December 2020
As per Bangladesh Bank DOS Circular No.-06 Dated: 15 July 2010 regarding of REPO and reverse REPO.
(a) (i) Disclosures regarding outstanding REPO as on 31 December 2020

Amount (1st
SL No. Counterparty name Agreement date Reversal date leg cash
consideration)
Nil
Total -

(a) (ii) Disclosures regarding outstanding Reverse REPO as on 31 December 2020:
Amount (1st
Counterparty name Agreement date Reversal date leg cash
consideration)
NIL
(b) Disclosure regarding overall transaction of REPO and Reverse REPO
Minimum Maximum Daily average

Counterparty name outstanding during outstanding outstanding
the year during the year during the year
Security sold under Repo

I) with Bangladesh Bank 510,000,000 17,314,387,199 2,002,309,862
ii) with other Banks & FIs 245,962,250 4,459,783,658 432,665,761
Security repurchased under Reverse Repo
I) From Bangladesh Bank - - -
ii) From other Banks & FIs - - -
Amount in BDT
Dec-20 Dec-19
6(a) Consolidated Investment
Investment - Government Securities
43,568,206,447 44,377,626,068
Other Investments
Mercantile Bank Securities Limited 1,173,148,701 1,050,937,755
6,644,232,383 6,429,294,138
Inter company transaction - -
6,644,232,383 6,429,294,138
50,212,438,830 50,806,920,206
7. Loans and Advances/investments

7.A Loans, Cash Credit and Overdraft etc/investments (Note-7.2) 238,220,818,654 224,696,731,920
7.B Bills Purchased and Discounted (Note-7.B(i)) 10,773,567,222 12,193,716,412
248,994,385,876 236,890,448,333
7.1 Maturity grouping of loans and advances/investments
Repayable on demand 44,925,055,321 38,976,004,972
Not more than 3 (three) months 36,994,088,807 30,559,327,406
More than 3 (three) months but not more than 1 (one) year 66,399,183,592 72,788,169,320
More than 1 (one) year but not more than 5 (five) years 53,478,950,953 44,113,454,889
More than 5 (five) years 47,197,107,203 50,453,491,746
248,994,385,876 236,890,448,333


Amount in BDT
Dec-20 Dec-19
7.2 Loans, Cash Credit, Overdraft etc/investments

I.a.) Within Bangladesh:
Term Loan 85,254,173,121 79,386,741,840
Time Loan 18,879,619,727 19,459,547,160
Packing Credit 2,270,789,998 2,608,412,524
Loan Against Trust Receipt (LTR) 6,784,802,088 8,140,788,954
Lease Finance 1,390,083,373 1,188,621,827
EDF Loan 17,151,020,439 11,213,342,176
Loan General 179,322,856 181,630,066
House Building Loan 5,613,178,605 5,684,581,449
Hire Purchase 13,345,961,003 12,234,662,626
Payment Against Documents (PAD) 164,492,510 429,902,195
Cash Credit (Hypo) 10,760,751,252 11,577,681,783
Overdraft 29,389,196,808 32,119,976,278
Home Loan Scheme Refinance 882,543 1,351,450
Personal Loan 340,596,424 324,822,247
Consumers Credit Schemes 5,171,062 5,195,905
Consumers Finance 2,355,613,758 2,370,844,621
Staff Loan 864,603,234 1,087,210,602
Credit Card 465,480,937 482,484,704
Small and Medium Enterprise(SME) Loan 32,330,592,370 32,207,287,592
Agricultural Credit 4,772,508,432 3,988,294,147
Working Capital Under Stim Package Cor 5,899,009,018 -
Other Credit Schemes 2,768,947 3,351,775
238,220,618,504 224,696,731,920
I.b). Islamic Banking
Quard 200,150 -
200,150 -
238,220,818,654 224,696,731,920
II) Outside Bangladesh: - -
Total A (I+II) 238,220,818,654 224,696,731,920
7.3 Loans and Advances/investments: Significant Concentration

Advances to allied concerns of directors - -
Advances to Managing Director & Chief Executive and other Senior
- -
executives
Advances to customers' group 70,452,363,615 64,048,695,099
Industry-wise 177,677,419,027 171,754,542,632
Staff loan 864,603,234 1,087,210,602
248,994,385,876 236,890,448,333

Figures in Lac
Dec-20 Dec-19
7.4 Loans and Advances/investments: Sector wise
Education (School/College, University, Research institute) 3,320 3,269
Health 2,119 2,463
Agriculture 47,725 39,883
Commodities (Sugar/ Edible Oil/ Wheat/ Rice/ Dal/ Peas/ Maize etc), Food & Beverage 195,801 196,464
Trade Finance 353,021 366,486
Transport 13,516 12,165
Shipping 1,441 1,467
Textile (Excluding IDBP) 158,072 112,504
Textile (IDBP) 8,322 18,047
Readymade Garments (RMG) [excluding IDBP] 497,619 429,353
Readymade Garments (RMG) [IDBP] 674 2,764
Tele communication 9,239 9,416
IT & Computer/Trade 3,343 3,685
Power & Fuel 72,580 76,337
Real Estate 77,364 77,087
Cement 12,968 10,856
Chemicals 44,059 44,636
Leather & Leather products 47,093 44,184
Plastic & Plastic products 9,194 10,550
Electrical & Electronic goods 37,240 45,378
Paper & Packaging 48,700 51,421
Jute & Jute products 34,846 31,846
Glass & Glass products 0.09 0.09
Ceramics (Table ware, Sanitary ware, Tiles etc.) 11,823 11,143
Iron & Steel 219,362 202,794
Engineering & Construction 75,720 73,130
Contractor Finance 48,391 40,470
Capital Market Intermediaries 8,101 6,236
Backward Linkage 41,897 38,959
Consumer & Retail Products 76,437 81,100
Non Bank Financial Institution (NBFI) 89,250 90,493
Service (Hotel, Restaurant, Travelling, Tickets, etc.) 16,525 16,583
Others 224,182 217,734
2,489,944 2,368,904
Amount in BDT
Dec-20 Dec-19
7.5 Loans and Advances/investments: Geographical location-wise
Urban:
Dhaka Division 180,930,625,402 169,410,506,413
Chattogram Division 35,577,641,438 34,716,599,219
Rajshahi Division 12,672,938,789 12,523,315,370
Sylhet Division 1,001,925,589 1,014,552,982
Khulna Division 2,194,543,320 2,049,260,040
Rangpur Division 3,611,826,669 3,462,592,463
Barisal Division 2,510,399,904 2,352,279,925
Mymensingh Division 435,815,826 383,558,445
Sub-total Urban 238,935,716,936 225,912,664,857


Amount in BDT
Dec-20 Dec-19
Loans and Advances/investments: Geographical location-wise

Rural:
Dhaka Division 3,981,051,317 4,114,347,486
Chattogram Division 4,468,756,131 5,265,637,081
Rajshahi Division 1,142,126,262 1,181,778,633
Sylhet Division 138,834,543 136,359,797
Rangpur Division 172,881,357 163,823,930
Barisal Division 155,019,331 115,836,549
Sub-total Rural 10,058,668,940 10,977,783,475
Total 248,994,385,876 236,890,448,333
7.6 Loans & advances/investments classified as per Bangladesh Bank circular

Unclassified 237,243,222,240 225,387,834,686
Sub-standard 1,229,062,875 1,294,751,252
Doubtful 1,825,911,198 409,975,654
Bad Loss 8,696,189,563 9,797,886,742
248,994,385,876 236,890,448,333
Details of Loans and advances/investments as follows: (Figure in thousand)
Status of Loans and advances/ Dec-20 Dec-19

investments Mix % Outstanding Mix % Outstanding
Unclassified Loans and advances/
investments :
Unclassified (including staff loan) 94.17% 234,469,934 94.21% 223,163,495
Special Mention Account 1.11% 2,773,289 0.94% 2,224,340
Total Unclassified loans and
95.28% 237,243,222 95.14% 225,387,835
advances/investments :
Classified Loans and advances/investments :
Sub-standard 0.49% 1,229,063 0.55% 1,294,751
Doubtful 0.73% 1,825,911 0.17% 409,976
Bad/loss 3.49% 8,696,190 4.14% 9,797,887
Total classified Loans and
4.72% 11,751,164 4.86% 11,502,614
Total Loans and advances/
100% 248,994,386 100% 236,890,448
investments :
Amount in BDT
Dec-20 Dec-19
7.7 Base for provision
SMA 2,773,288,636 2,224,339,691
Base for provision
Sub-standard 577,530,360 611,867,247
Doubtful 987,088,557 147,126,922
Bad Loss 4,348,564,147 4,324,940,152
5,913,183,063 5,083,934,321

Amount in BDT
Dec-20 Dec-19
7.8 Required provision for Loans and advances/investments

General provision (including SMA) 6,712,018,512 7,458,402,000
OBU 135,400,000 155,900,000
Sub-Total 6,847,418,512 7,614,302,000
Specific provision (classified loans and advances/investments)
Sub-standard 104,304,978 121,706,259
Doubtful 429,708,912 73,334,588
Bad/ Loss 4,348,564,147 4,324,940,152
Sub-Total 4,882,578,037 4,519,981,000
Grand Total 11,729,996,549 12,134,283,000
Provision Required for December 2020 11,729,996,549 12,134,283,000

Provision maintained (Note-13.5.1) 11,729,996,549 12,134,283,000
Excess/(short) provision - -
Provision for loans and advances/investments (Figure in thousand)

Status of loans and advances/ Outstanding Provision %
Base for Provision Provision
investments Amount (BDT) Amount (BDT)
Unclassified loans and advances/
investments :
Unclassified ( SMEF) 29,521,081 29,521,081 0.25% 113,218
Unclassified (other credit) 187,698,775 187,698,775 1% 5,988,356
Unclassified (OBU) 12,707,917 12,707,917 1% 135,400
Unclassified ( HF, LP & BH/MBS/
2,674,364 2,674,364 1%-2% 31,905
SDS against share)
Unclassified (other than HF, LP &
957,839 957,839 2%-5% 19,157
short term agri. Loan)
Agri Loan/Short term Agri & Micro
45,759 45,759 1% 458
Credit
Unclassified ( staff loan) 864,197 - - -
Special Mention Account 2,773,289 2,773,289 0.25% -100% 558,924
Total unclassified Loans and
237,243,221 236,379,024 6,847,418
Classified Loans and advances/
investments :
Sub - standard:
a) Short Term Agri. Credit 3,865 3,073 5% 154
b) Others 1,225,198 574,457 5%-20% 104,151
Total Sub - standard 1,229,063 577,530 104,305
Doubtful:
a) Short Term Agri. Credit 645 497 5%-100% 102
b) Others 1,825,267 986,591 20%-50% 429,607
Total Doubtful 1,825,912 987,088 429,709
Bad/ loss 8,696,190 4,348,564 100% 4,348,564
Total Classified loans and
11,751,164 5,913,182 4,882,578
Total Loans and advances/
248,994,386 242,292,206 11,729,996
investments :


7.9 Provision for off-balance sheet exposures
Particulars of off-balance sheet Rate 1% Provision

Amount Base for provision
exposures Amount (BDT) Amount (BDT)
Acceptances and endorsements
47,860,347,450 47,860,347,450 478,603,475
less margin
Letter of guarantee less margin 16,343,993,142 16,343,993,142 163,439,931
Letter of credit less margin 38,149,959,661 34,655,198,729 346,551,987
Bills for collection 5,757,995,305 - -
Other contingent liabilities - - -
Required provision on Off-balance
108,112,295,558 98,859,539,322 988,595,393 988,595,393
exposures
Total Provision maintained
988,595,393
(Note-13.3)
Excess/(short) provision -
Amount in BDT
Dec-20 Dec-19
7.10 Particulars of loans and advances/investments
i) Loans considered good in respect of which the banking company is fully
236,378,619,005 224,300,624,083
secured;
ii) Loans considered good against which the banking company holds no security
- -
other than the debtor's personal guarantee;
iii) Loans considered good secured by the personal undertakings of one or more
26,908,141,985 27,483,024,469
parties in addition to the personal guarantee of the debtor;
iv) Loans adversely classified; provision not maintained thereagainst; - -
263,286,760,990 251,783,648,552
v) Loans due by directors or officers of the banking company or any of these
864,603,234 1,087,210,602
either separately or jointly with any other persons; (Staff Loan)
vi) Loans due from companies or firms in which the directors of the banking
company have interests as directors, partners or managing agents or in case - -
of private companies as members;
vii) Maximum total amount of advance including temporary advance made at
any time during the year to directors or managers or officers of the banking
864,603,234 1,087,210,602
companies or any of them either separately or jointly with any other person;
(Staff Loan)
viii) Maximum total amount of advances, including temporary advances granted
during the year to the companies or firms in which the directors of the
- -
banking company have interests as directors, partners or managing agents or
in the case of private companies as members;
ix) Due from banking companies; - -
x) Amount of classified loan on which interest has not been charged, should be
11,751,163,637 11,502,613,647
mentioned as follows:
a. Decrease/increase in provision, amount of loan written off and amount
realised against loan previously written off;
Movement of classified loans and advances
Opening balance 01 January 2020 11,502,613,647 10,802,432,171
Increase/(decrease) during the year 248,549,990 700,181,476
11,751,163,637 11,502,613,647
b. Amount of provision kept against loan classified as 'bad/loss' on the date of
4,348,564,147 4,324,940,152
preparing the balance sheet;
c. Interest creditable to the Interest Suspense a/c; 5,946,882,827 4,992,975,024

Amount in BDT
Dec-20 Dec-19
xi) Cumulative amount of the written off loan and the amount written off during
the Current year:
Opening Balance 5,445,695,560 3,202,368,251
Amount written off during the year 1,035,254,916 2,248,416,793
Amount Recovered / Adjustment (16,655,109) (5,089,484)
Cumulative Balance 6,464,295,367 5,445,695,560
7.11 Suits filed by the Bank Branch:
As of the responding date, the Bank filed lawsuit against recovery of its
defaulted loans and advances as under:
Name of the Branch:
Main Branch 4,037,326,085 4,010,042,052
Dhanmondi Branch 1,655,221,362 1,646,396,627
Motijheel Branch 174,849,786 173,381,671
Nayabazar Branch 483,176,711 425,241,044
Kawran Bazar 755,534,451 386,551,182
Rajshahi Branch 48,594,536 48,594,536
Noagaon Branch 1,060,431,000 1,061,343,819
Agrabad Branch 6,581,575,840 5,344,972,904
Sylhet Branch 95,648,639 95,648,639
Cumilla Branch 38,438,670 38,438,670
Khatungonj Branch 1,541,013,000 1,541,013,000
Sapahar Branch 5,186,081 5,186,081
Jubliee Road Branch 564,754 564,754
Banani Branch 1,601,975,204 1,234,039,577
Uttara Branch 7,746,464 7,746,464
O R Nizam Road Branch 8,305,632 8,544,354
Madam Bibi Hat Branch 1,813,790,602 1,813,790,602
Mogh Bazar Branch 171,650,401 81,250,652
Faridgonj Branch 10,329,263 10,329,263
Khulna Branch - 3,233,742
Rangpur Branch 55,565,735 55,565,735
Sk.Mujib Road Branch 318,852,000 318,852,000
Elephant Road Branch 35,836,164 34,080,792
Darus Salam Road Branch 18,593,327 18,593,327
Bijoynagar Branch 66,469,628 42,644,374
Joypara Branch 29,233,045 16,190,512
Aganar Branch 762,226 537,510
Patiya Branch 2,100,000 2,100,000
Satmasjid Road Branch 326,793,000 296,378,633
Dinajpur Branch 28,888,762 24,827,000
Ashulia Branch 11,834,753 1,861,958
International Airport Road Branch 52,803,168 52,803,168
Chowmuhani Branch 117,938,632 73,165,000
A.K. Khan Moor Branch 1,424,368 1,424,368
Kushtia Branch 8,678,298 8,678,298
Moulvibazar Branch 15,608,717 15,608,717
Sunamgonj Branch 22,699,394 18,895,995
Beanibazar Branch 30,002,628 30,002,628
Gulshan Branch 6,230,949 6,230,949
Dholaikhal Branch 54,366,504 54,366,504


Amount in BDT
Dec-20 Dec-19
Nilphamari Branch 9,503,656 9,433,656
Nabigonj Branch 7,286,774 675,070
Hemayetpur Branch 1,746,190 1,746,190
Bogura Branch 208,476,677 205,990,621
Chattogam EPZ Branch 30,187,299 30,187,299
Madanpur Branch 1,163,618 1,163,618
Chapainawabgonj Branch 24,981,000 23,936,000
Patuakhali Branch - 509,000
Amishapara Branch 3,539,320 3,539,320
Engineer Institution Branch 2,058,416 2,058,416
Narayanganj Branch 501,181,071 395,248,085
Chandpur Branch 17,993,000 17,993,000
Patherhat Branch 10,781,704 10,782,000
Chuadanga Branch 19,491,000 -
Sudibbazar Branch 1,089,000 -
Mymensing Branch 91,000 -
Jhilongja Branch 197,760,747 -
Accss Road Branch 91,346,700 -
Shishahat Branch 9,661,394 -
Rajnagar Krishi Branch 5,536,823 -
Maijdee Court Branch 11,647,788 -
Bhulta Branch 66,920,138 -
Mirpur Branch 711,825,889 -
Ring Road Branch 10,918,477 -
Rampura Branch 27,845,400 -
Jashore Branch 18,419,133 -
Barishal Branch 1,482,856 -
Baraiyarhat Branch 6,001,947 -
23,294,976,799 19,712,379,378
7.12 Listing of assets pledged as security/ collaterals

Nature of the secured assets:
Fixed assets 187,242,692,557 171,627,765,336
Cash & quasi-cash 28,940,970,888 32,582,549,118
Others 39,616,058,590 39,511,694,959
255,799,722,035 243,722,009,413
7.13 Nature wise loans & advances/investments

Continuous 60,655,773,809 65,735,299,895
Demand Loan 69,531,663,191 62,997,068,293
Term Loans up to 5 ( five) years 71,609,841,672 57,704,588,741
Term Loans above 5 (five) years 46,806,952,584 49,997,361,910
Term Loans above 5 (five) years - Staff Loan 390,154,620 456,129,493
248,994,385,876 236,890,448,333
7.14 Loan and advances/investments allowed to each customer exceeding 10% of Bank's total capital
As per BRPD Circular 02, dated 16 January 2014 issued by Bangladesh Bank, disclosure on large loan i.e. loan sanctioned
to any individual or enterprise or any organization of a group amounting to 10% or more of the Bank’s total capital and
classified amount therein and measures taken for recovery of such loan have been furnished as under:

Amount in BDT
Dec-20 Dec-19
Total Capital 33,419,503,836 32,899,828,701

Total Loans and Advances/investments (Funded) 66,259,759,605 72,047,844,152
No. of customers 30 34
Classified amount thereon Nil Nil
Measures taken for recovery of classified loans/investments N/A N/A
7.15 Details of large loans and advances/investments

Single Borrower Exposure Limit has been calculated on the basis of total eligible capital as on 31 December 2020
according to BRPD Circular 02, dated 16 January 2014. Number of clients with outstanding amount exceeding 10% of
total capital of the Bank is 30. Total capital of the Bank was BDT. 3,341.95 crore as at 31 December 2020.
Outstanding (BDT)
SL # Name of Clients Total (BDT) Branch
Funded Non-Funded
1 Abul Khair Group 1,026,300,000 7,502,400,000 8,528,700,000 Agrabad
2 ACI Group 2,618,698,538 2,070,323,709 4,689,022,248 Banani
3 Azmat Group 1,073,588,132 1,251,838,275 2,325,426,408 Main
4 BSRM Group 855,600,000 3,385,300,000 4,240,900,000 Jubilee Road
5 City Group 306,900,000 3,217,300,000 3,524,200,000 Main
Comprehensive and Metro, Dhanmondi /
6 1,842,500,000 455,600,000 2,298,100,000
Montaha / Venetto Ceramics Green Road
7 Deshbandhu Group 5,510,300,000 109,966,000 5,620,266,000 Motijheel
International Airport
8 Energypac Group 2,048,100,000 2,920,700,000 4,968,800,000
Rd.
9 GPH Group 1,042,300,000 3,464,100,000 4,506,400,000 Khatungonj
International Leasing & Financial Banani/Elephant
10 4,421,697,249 - 4,421,697,249
Services Ltd. Road
11 Interstoff Group 2,654,436,000 442,649,000 3,097,085,000 Dhanmondi/Main
12 Jamuna Group 2,197,800,000 5,532,700,000 7,730,500,000 Main
13 Jamuna Industrial Agro Group 3,185,600,000 1,320,500,000 4,506,100,000 Rajshahi
14 KDS Group 1,435,100,000 2,197,800,000 3,632,900,000 Khatungonj
15 Labib Group 4,555,500,000 6,947,800,000 11,503,300,000 Mohakhali
16 Max Group 716,600,000 2,071,200,000 2,787,800,000 Main/Mohakhali
17 Meghna Group 637,200,000 4,582,400,000 5,219,600,000 Main
18 MNR Group 1,357,561,782 546,948,000 1,904,509,782 Gulshan
19 Natural Group 813,700,000 2,248,694,209 3,062,394,209 Main
20 Nitol Niloy Group 3,221,800,000 231,400,000 3,453,200,000 Mohakhali
21 Orion Group (Power Sector) 5,656,800,000 3,730,900,000 9,387,700,000 Main
Engineers
Power Grid Company of Institution /
22 - 10,188,300,000 10,188,300,000
Bangladesh Ltd. (Power Sector) Rampura/
Aftabnagar
23 Pran RFL Group 763,600,000 2,568,900,000 3,332,500,000 Motijheel
Motijheel/
24 Rahimafrooz Group 2,965,700,000 680,400,000 3,646,100,000 Moghbazar/
Mohakhali/gulshan
25 Rising Group 1,734,784,620 1,583,812,243 3,318,596,863 Banani
26 S. Alam Group 2,552,000,000 1,541,700,000 4,093,700,000 Khatungonj
27 Sajeeb Group 2,842,800,000 133,000,000 2,975,800,000 Green Road
28 Silver Composite Textile Mills Ltd. 2,830,776,000 315,610,000 3,146,386,000 Gulshan
29 SQ Group 4,184,259,501 1,843,996,000 6,028,255,501 Gulshan
30 Utah Group 1,207,757,783 1,930,154,164 3,137,911,947 Main
Total 66,259,759,605 75,016,391,601 141,276,151,205


Amount in BDT
Dec-20 Dec-19
7.16 Net loans, advances and leases/ investment

Gross performing loans, advances and leases/ investment (Note-7) 248,994,385,876 236,890,448,333
Non-performing loans, advances and leases/ investment (Note-7.10(X)) (11,751,163,637) (11,502,613,647)
Provision for loans, advances and leases/ investment (Note-13.5.1) (11,729,996,549) (12,134,283,000)
(23,481,160,186) (23,636,896,647)
225,513,225,691 213,253,551,686
7.17 Loans and advances/investments: Broad categories
Loans and advances/investments (7.17.1) 172,232,383,334 153,789,756,813
Cash credits (7.17.2) 29,842,175,863 31,790,527,058
Overdraft (7.17.3) 34,568,144,112 37,400,434,916
Bill Purchased and discounted (7.17.4) 10,955,398,267 12,686,285,854
Leases/investments (7.17.5) 1,396,284,300 1,223,443,691
In Bangladesh 248,994,385,876 236,890,448,333
Outside Bangladesh - -
Total Loans and advances /investments 248,994,385,876 236,890,448,333
7.17.1 Loans and advances/investments: Residual maturity grouping
More than 1 (one) year but not more than 5 (five) years 51,878,371,227 40,126,697,576
More than 5 (five) years 47,194,479,704 50,450,993,360
172,232,383,334 153,789,756,813
7.17.2 Cash credit : Residual maturity grouping
More than 1 (one) year but not more than 5 (five) years 244,991,179 657,375,640
More than 5 (five) years - -
29,842,175,863 31,790,527,058
7.17.3 Overdraft: Residual maturity grouping
More than 1 (one) year but not more than 5 (five) years 56,515,646 2,209,685,733
More than 5 (five) years - -
34,568,144,112 37,400,434,916
7.17.4 Bills discounted and purchased: Remaining maturity grouping
Payable within 1 (one) month 2,266,965,594 3,642,393,086
Over 1 (one) month but less than 3 (three) months 8,370,613,399 8,614,109,541
Over 3 (three) months but less than 6 (six) months 317,819,274 429,783,227
6 months or more - -
10,955,398,267 12,686,285,854
7.17.5 Leases / investments: Residual maturity grouping
Lease rental receivable within 1 year 94,583,900 101,249,707
Above 1 year but within 5 years 1,299,072,900 1,119,695,940
Above 5 years 2,627,500 2,498,044
Total lease rental receivable 1,396,284,300 1,223,443,691
Unearned interest receivable - -
1,396,284,300 1,223,443,691

7.18 Loan and advances/investments related with large loan restructuring
The bank has participated syndication loan of Jamuna Builders Limited with lead arranger of Janata Bank Limited.
In addition, these loans have been restructured as large loan restructuring complied with BRPD circular # 4 dated
January 29, 2015. Details are given below :
BDT in Lac
Outstanding as on Total Provision
Nature of facility Amount Validity CL Status
31.12.2020 kept
Syndication
Term Loan 4,271.28 30-Jun-27 4,959.18 99.18 SMA
(Restructured)
Amount in BDT
Dec-20 Dec-19
7.B Bills Purchased and Discounted:
7.B.(i). Bill discounted and purchased exclude Government Treasury bills:
Payable in Bangladesh 2,652,368,054 4,501,404,976
Payable outside Bangladesh 8,121,199,168 7,692,311,436
10,773,567,222 12,193,716,412
7.B.(ii). Remaining maturity grouping of Bills discounted and purchased

Payable within 1 (one) month 6,588,282,044 5,533,222,283
Over 1 (one) month but less than 3 (three) months 3,563,518,109 5,793,677,902
Over 3 (three) months but less than 6 (six) months 621,767,069 866,816,227
6 months or more - -
10,773,567,222 12,193,716,412
7(a) Consolidated Loans and advances/investments
Loans and advances/investments
242,394,416,950 228,898,498,749
Inter company transactions (503,649,573) (623,608,768)
241,890,767,377 228,274,889,981
Bills Purchased and discounted
10,773,567,222 12,193,716,412
Inter company transaction - -
10,773,567,222 12,193,716,412
Total 252,664,334,599 240,468,606,394
Fixed assets including premises, Furniture and Fixtures-at cost less
8.
Accumulated Depreciation (Annexure-A)
Freehold properties
Land & land development 1,341,807,978 1,341,807,978
Building 905,083,679 932,907,814
Furniture & fixtures 419,293,254 444,516,621
Office equipment 379,366,863 356,284,920
Vehicles 47,776,378 66,892,198
Books 12,727 36,337
Total 3,093,340,880 3,142,445,869


Amount in BDT
Dec-20 Dec-19
8(a). Consolidated Fixed assets including premises, furniture and fixtures

MBL Asset Management Limited 400,247 -
Mercantile Exchange House (UK) Limited 6,374,956 7,135,070
3,109,472,273 3,161,428,865
9 Other Assets: (Annexure-E)
Convetional and Islamic banking
Other assets should be classified under the following categories:
Investment in Shares of subsidiary company (In Bangladesh) Mercantile Bank
3,550,000,000 3,550,000,000
Securities Ltd.
Investment in Shares of subsidiary company (In Bangladesh) MBL Asset
56,000,000 56,000,000
Management Ltd.
Investment in Shares of subsidiary company (outside Bangladesh) Mercantile
39,311,270 38,170,536
Exchange House (UK) Ltd.
Mercantile Bank OBU Unit 4,864,732,746 4,198,770,211

No-Income generating other assets:
Stationery, stamps,printing materials in stock etc. 28,512,872 25,707,977
** Advance rent and advertisement - -
Interest accued on investment but not collected,commission and brokerage
3,277,864,960 1,351,055,794
receivable on shares and debenture and other income receivable (Note 9.1);
Security deposit 8,699,164 8,772,599
Preliminary, formation and organization expenses, renovation/development
634,980,302 228,118,794
expenses and prepaid expenses (Note-9.2)
Branch adjustment 174,884,670 692,868,015
Suspense Account (Note 9.3) 840,339,598 1,052,078,289
Right Of Use (ROU) Assets as per IFRS-16 933,988,102 1,234,650,000
Silver - -
Clearing adjustment account - 1,000,000
14,409,313,684 12,437,192,215
Inter company transaction(OBU) (4,864,732,746) (4,198,770,211)
9,544,580,938 8,238,422,004
Advance rent upto December 2020 Tk.19.06 crore has been considered with
**
Right of Use (ROU) Assets as per IFRS 16
Interest accued on investment but not collected, commission and
9.1 brokerage receivable on shares and debenture and other income
receivable:
Accrued interest (Note-9.1.1) 3,266,210,770 1,337,862,107
Other accruals (Note - 9.1.2) 11,654,190 13,193,687
3,277,864,960 1,351,055,794
9.1.1 Accrued interest
Interest Receivable on Investment 1,157,263,849 1,086,028,728
Interest Receivable on Loan & Advances 1,887,194,115 27,207,753
Interest Receivable on OBU 221,752,806 224,625,626
3,266,210,770 1,337,862,107

Amount in BDT
Dec-20 Dec-19
9.1.2 Other accruals

Fees receivable 10,339,202 10,850,220
Dividend receivable on share 1,314,988 1,034,762
Discount receivable - 1,173,974
Protested bills - -
Other receivables - 134,731
11,654,190 13,193,687

9.2
expenses and prepaid expenses:
MBL Center (Development Expenses on Head Office Building) 601,922,183 172,572,797
Prepaid insurance premium 11,961,932 11,285,962
Others Prepaid expenditure 21,096,187 44,260,034
634,980,302 228,118,794
9.3 Suspense Account

Advance against TA/DA - 476,331
Encashment of PSP/BSP/WEDB 420,196,998 267,030,628
Others 420,142,600 784,571,330
840,339,598 1,052,078,289
9.4 Un-reconciled Branch Adjustments- Mercantile Bank General Account

This Note represents outstanding inter-branch and Head Office transactions (Net) originated but yet to be responded.
However, the un-reconciled entries of 31 December 2020 (upto-date position 01.01.2021 )are narrated below:
Figures in Thousand
No of entries Amount No of entries Amount
Particulars
Debit Credit
Up to 3 months - - - -
Over 3 months but within 6 months - - - -
Over 6 months but within 1 year - - - -
Over 1 year but within 5 years 4 444,871 - -
4 444,871 - -
Amount in BDT
Dec-20 Dec-19
9(a) Consolidated other assets
Mercantile Bank Limited. 9,544,580,938 8,238,422,004
Mercantile Bank Securities Limited. 180,131,532 161,712,456
9,735,276,640 8,407,919,859
Inter company transaction (3,644,898,890) (3,587,758,156)
6,090,377,750 4,820,161,703


10. Non-banking assets
The Bank was awarded absolute ownership on few mortgaged properties through the verdict of honorable court under
section 33(7) of the Artharin Adalat Act 2003. These were recorded as non banking assets. Following are the details:
Amount in BDT
Dec-20 Dec-19
Name of
SL Asset detsils Entitlement Date Market Value Market Value
Parties
a) 44 decimal land at Mouza- Gosai
Gobindapur, P.S: Baliakandi, Dist: Rajbari;
Global
b) 6.66 decimal land at Mouza- Gosai
1 Business 30-Apr-15 500,000 500,000
Gobindapur, P.S: Baliakandi, Dist: Rajbari.
Associates
Previously owned by A.T.M Shamim Ul
Alam and A.T.M Shafiqul Alam at present
Mercantile Bank Limited.
a) RM of 17.50 decimal land along with
Semipacca building under Mouza Loar
Shahara, PS. Dhaka Cantonment, Dist.
Dhaka. Previously owned by Md. Ali Azam
Khan, Solaiman Khan, Khorshed Alam Khan,
Mrs. Kohonoor Akhter, Rasheda Begum,
Sheuli Akhter and Fatema Begum at present
b) RM of 170.50 decimal land at Dist.

Madaripur, PS. – Shibchar, Mouza Shamail.
SS Trading
2 Previously owned by Shamimul Islam Siraj 05-Aug-13 4,262,500 4,262,500
Corporation
and shariar Farid at present Mercantile Bank
Limited.
c) RM of 375.00 decimal land at Dist.

Madaripur, PS Shibchar, Mouza- Choto
Chowdhurir Bill and Shamail. Previously
owned by Sheba Fish Feeds Limited
represented by Anwarul Haq, Md. Ashraful
Islam Taluqder, Shahariar Farid and
Shamimul Islam Siraj at present Mercantile
Bank Limited.
Dohar Seed
Company, RM (3rd party) of land 16.25 Decimal at
Bhatara, Gulshan, Dhaka. Previously owned
3 Prop.: Md. by Mr. Md. Syed Hossain Imam and Mr. 25-Nov-08 3,939,394 3,939,394
Advocate Mozaffar Ali at present Mercantile Bank
Abdus Limited.
Sobhan
Shahinoor
Enterprise,
a). 2.56 Katha Land with semi
4 pucca building at Badda; 20-Jul-06 3,400,800 -
Prop: Mr.
b). 10 Katha Land at Badda.
Md. Mojibur
Rahman
Sarker Traders
a) 21.86 decimal land at , Naogaon.
5 Sushant 22-Jun-10 983,700 2,985,815
Sarker
RM of decimal 43.73 decimal land (10.75
decimal land at Mouza-Mohanonda Khali, PS-
Poba, Dist-Rajshahi and 33.00 decimal land
at Mouza-Sundolpur, PS-Poba, Dist.-Rajshahi)
6 Taj Enterprise 07-Jul-15 1,976,000 1,976,000
Previously owned by 1) Md. Abu Sayed, 2)
Md. Taijul Islam, 3) Md. Akram Ali and 4) Mr.
Emran Ali at present Mercantile Bank Limited.
RM of 261.75 decimal land (256.5 decimal
land at Mouza-Bagdhani, PS-Poba, Dist.-
M/S Sayed Rajshahi and 5.25 decimal land at Mouza-
7 24-May-15 10,242,000 10,242,000
Traders Nowhata, PS-Poba, Dist.-Rajshahi. Previously
owned by Md. Esaruddin at present
Total 25,304,394 23,905,709

Amount in BDT
Dec-20 Dec-19
10(a). Non- banking assets

25,304,394 23,905,709
11 Borrowings from other banks, financial institutions and agents

In Bangladesh (Note 11.1) 38,071,686,698 20,623,045,320
38,071,686,698 20,623,045,320
11.1 In Bangladesh - Interest bearing

A. Money at Call (11.1a): - -
- -
B. Other Borrowings:
Bangladesh Bank Refinance (11.1b) 25,596,244,935 12,307,554,422
Bangladesh Bank Pre-finance against RMG - 108,823,813
Borrowing from Bangladesh Bank - -
Other Bank Borrowings (11.1c) 4,250,000,000 -
Off-shore Banking Unit 13,090,174,509 12,405,437,296
42,936,419,444 24,821,815,531
Inter company transaction (4,864,732,746) (4,198,770,211)
Other Borrowings 38,071,686,698 20,623,045,320
Total- In Bangladesh 38,071,686,698 20,623,045,320
11.1a Money at Call - -

- -
11.1b Bangladesh Bank Refinance

Refinance for Women Ent. SME 392,973,750 226,004,083
Refinance for Home Loan 8,313,044 10,849,600
Refinance for SME 163,827 163,827
Refinance against SMEDP-2 104,432,000 8,727,000
Refinance against StimulusFund 6,667,608,982 -
Refinance for ETP 22,567,127 36,049,839
Refinance against EDF from BB 16,853,963,691 10,413,649,774
Refinance Against Brick Kil 70,142,864 75,785,720
Refinance Against Fin. Incl SC(FIS) 64,254,703 18,735,953
Refinance for Agro Processing Ind 441,352,625 648,312,500
FC Account Against BB Refinance 970,472,322 869,276,125
25,596,244,935 12,307,554,422
11.1c Other Bank Borrowings

Uttara Bank Limited 2,500,000,000 -
Mutual Trust Bank Limited 600,000,000 -
Pubali Bank Limited 1,150,000,000 -
4,250,000,000 -


Amount in BDT
Dec-20 Dec-19
11.2 Outside Bangladesh - -

Total Borrowings from other banks, financial institutions and agents
38,071,686,698 20,623,045,320
(N-11.1+11.2)
Borrowings from other banks, financial institutions and agents: Security
11.3
wise grouping
Secured borrowings 25,596,244,935 12,416,378,235
Unsecured borrowings 12,475,441,763 8,206,667,085
38,071,686,698 20,623,045,320
Borrowings from other banks, financial institutions and agents: Nature of
11.4
repayment
Others 25,596,244,935 12,416,378,235
38,071,686,698 20,623,045,320
Borrowings from other banks, financial institutions and agents: Maturity
11.5
grouping
Repayable within 1 month - -
Over 1 months but within 6 months - -
Over 6 months but within 1 year - -
Over 1 year but within 5 years 25,596,244,935 12,416,378,235
Over 5 year but within 10 years - -
Over 10 (ten) years - -
38,071,686,698 20,623,045,320
11(a) Consolidated borrowings from other banks, financial institutions

Inside Bangladesh
38,703,654,407 21,246,654,088
Consolidated borrowings from other banks, financial institutions
Outside Bangladesh
Mercantile Bank Limited - -
- -
38,703,654,407 21,246,654,088
Inter company transaction (503,649,573) (623,608,768)
Total- Consolidated borrowings from other banks, financial institutions 38,200,004,834 20,623,045,320

Amount in BDT
Dec-20 Dec-19
Coupon Rate
11.6 Non-convertible Subordinated Bond 12.00% 200,000,000 400,000,000
BRAC Bank Limited 12.00% 100,000,000 200,000,000
ONE Bank Limited 12.00% 90,000,000 180,000,000
NRBC Bank Limited 12.00% 60,000,000 120,000,000
Dhaka Bank Limited 12.00% 40,000,000 80,000,000
NRB Bank Limited 12.00% 20,000,000 40,000,000
Pubali Bank Limited 12.00% 60,000,000 120,000,000
IDLC Finance Limited 12.00% 20,000,000 40,000,000
United Finance Limited 12.00% 10,000,000 20,000,000
National Life Insurance Company Limited 10.50% 1,000,000,000 1,000,000,000
Janata Bank Limited 10.50% 1,000,000,000 1,000,000,000
Agrani Bank Limited 10.50% 1,000,000,000 1,000,000,000
Sonali Bank Limited 3,600,000,000 4,200,000,000
11.6a Consolidated Non-convertible Subordinated Bond

3,600,000,000 4,200,000,000
12. Deposits and other accounts:

A. Deposits received from Banks : 5,614,118,619 8,202,663,648
Payable on demand (Note- A-1) 17,110,842 4,752,272
Time Deposits (Note - A-2 ) 5,597,007,777 8,197,911,376
B. Other than Bank: 239,651,590,735 239,421,809,067

Payable on demand (Note- B-1) 32,619,724,273 28,148,678,450
Time Deposits (Note - B-2 ) 207,031,866,462 211,273,130,617
Total Payable on Demand Deposits (Note- A-1 & B-1) 32,636,835,115 28,153,430,722
Total Time Deposits (Note -A-2 & B-2 ) 212,628,874,239 219,471,041,993
245,265,709,354 247,624,472,715
A. Deposits received from Banks:

Term deposit 1,200,000,000 8,115,000,000
Current deposit 17,110,842 4,752,272
Special Notice deposits 4,397,007,777 82,911,376
Saving deposits - -
5,614,118,619 8,202,663,648
A-1 Payable on demand

Current deposits 17,110,842 4,752,272
Saving deposits (9%) - (A) - -
17,110,842 4,752,272


Amount in BDT
Dec-20 Dec-19
A-2 Time deposits

Saving deposits (91%) - (A) - -
Term deposit 1,200,000,000 8,115,000,000
Special Notice deposits 4,397,007,777 82,911,376
5,597,007,777 8,197,911,376
Maturity Analysis (Deposits received from Banks):

Repayable on demand 17,110,842 4,752,272
Repayable within 1 month 4,397,007,777 82,911,376
Over 1 months but within 6 months 1,200,000,000 8,115,000,000
Unclaimed deposits 10 (ten) years and above - -
5,614,118,619 8,202,663,648
B. Other than Bank:
B-1 Payable on demand:

Current deposits 11,996,781,540 8,895,243,133
Saving deposits (9%) - (Note 12.3) 2,481,967,504 2,150,495,591
Foreign currency deposits (non interest bearing ) 1,667,435,765 1,699,341,115
Bills payable (Note-12.2) 4,071,078,095 3,045,627,717
Sundry deposits (Note - 12.1.1) 5,896,526,096 6,475,287,274
Foreign currency held against Back to Back L/C 6,505,935,272 5,882,683,620
32,619,724,273 28,148,678,450
B- 2 Time deposits:
Saving deposits (91%) - (Note-12.3) 25,095,449,209 21,743,899,862
Fixed deposits (Note-12.4) 92,058,753,354 108,223,773,679
Special Notice deposits 28,952,321,366 25,336,298,292
Deposits under schemes (Note-12.5) 60,745,941,739 55,695,383,360
Non-resident taka deposit 89,098,355 161,183,297
Deposit under Q-cash 11,563,986 112,592,126
Deposit under Agent Banking 78,738,453 -
207,031,866,462 211,273,130,617
Maturity Analysis (Deposits received from other than Banks):

Repayable within 1 month 42,650,252,500 40,625,120,780
Over 6 months but within 1 year 36,800,785,458 35,852,654,125
239,651,590,734 239,421,809,067

Amount in BDT
Dec-20 Dec-19
12.1 Current/Al-wadeeah current accounts and other accounts

Current deposits 12,013,892,382 8,899,995,405
Special Notice deposits 33,349,329,143 25,419,209,668
Foreign currency deposits 1,667,435,765 1,699,341,115
Deposit under Q-cash & My cash 11,563,986 112,592,126
Deposit under Agent Banking 78,738,453 -
Non-resident taka deposits 89,098,355 161,183,297
Sundry deposit (Notes 12.1.1) 5,896,526,096 6,475,287,274
Foreign currency held against Back to Back L/C 6,505,935,272 5,882,683,620
59,612,519,452 48,650,292,506
12.1.1 Details of sundry deposit

Sundry Creditors 391,561,872 343,742,870
Withholding Tax - IT 335,737,745 352,969,268
Withholding Tax - Excise Duty 220,811,512 167,163,511
Withholding Tax - VAT 50,769,315 47,030,214
Margin on Letter of Guarantee 758,790,483 728,853,046
Margin on L/C 1,809,822,589 2,503,604,596
Margin on FDBP/IDBP 93,029 181,776
Margin on Inward bill collection 13,644,885 1,065,819
Other Margin Account 16,651,844 11,212,577
Sale proceeds of PSP/BSP 3,200,000 3,300,000
Advance deposit against lease rent 6,116,300 17,678,300
Security deposit 31,923,326 27,249,454
Export bill agency commission 10,282,065 11,498,241
Export bill reserve margin 220,581,017 203,551,402
Other sundry deposit 2,026,540,115 2,056,186,202
5,896,526,096 6,475,287,274
12.2 Bills payable

Demand Draft 3,014,740 3,043,740
Security deposit receipt 2,776,950 2,776,950
Pay Order 4,054,829,742 3,029,732,920
Pay Slip 10,456,663 10,074,107
4,071,078,095 3,045,627,717
Maturity wise Grouping Bills Payable
Repayable on demand - -
Over 1 months but within 6 months 2,776,950 2,776,950
4,071,078,095 3,045,627,717


Amount in BDT
Dec-20 Dec-19
12.3 Savings Bank/Mudaraba savings bank deposits

As per BRPD Circular No. 03 of 07 July 1997, total saving bank deposits
amount is distributed into:
9% of total Savings Bank deposits (Demand deposits) 2,481,967,504 2,150,495,591
91% of total Savings Bank deposits (Time deposits) 25,095,449,209 21,743,899,862
27,577,416,714 23,894,395,453
12.4 Fixed deposits/Mudaraba fixed deposits
Customer deposits (Note 12 B-2) 92,058,753,354 108,223,773,679
Deposits received from Banks-Term deposit (Note-12 A-2) 1,200,000,000 8,115,000,000
93,258,753,354 116,338,773,679
12.4.1 Fixed deposits/Mudaraba fixed deposits - maturity wise Grouping
Repayable within 1 month - -
Over 1 months but within 6 months 1,003,619,906 951,369,286
Over 6 months but within 1 year 27,459,082,041 27,602,713,734
Over 5 year but within 10 years 80,000,758 26,781,109
93,258,753,354 116,338,773,679
12.5 Deposit under schemes/Mudaraba deposit schemes
Monthly Savings Scheme 38,339,686,147 35,581,536,766
Double Benefit Deposit Scheme 14,142,985,031 14,368,715,599
Family Maintenance Deposit Scheme 1,535,800,000 1,339,200,000
Special Savings Scheme 395,100,991 364,754,062
Pension and Family Support Scheme 382,001,093 254,350,982
Quarterly Benefit Deposit Scheme 83,800,000 26,050,000
One & Half Time Benefit Scheme 49,607,303 52,573,132
Super Benefit Scheme 5,805,971,942 3,699,265,000
Education Planning Deposit Scheme 10,989,232 8,937,819
60,745,941,739 55,695,383,360
12(a) Consolidated deposits and other accounts
12.1(a) Current/Al-wadeeah current accounts and other accounts
Deposits Received from Banks
5,614,118,619 8,202,663,648
Other than Bank
54,157,058,279 40,559,651,437
Inter Company Transaction (204,122,749) (130,054,851)
53,952,935,531 40,429,596,585
59,567,054,150 48,632,260,233
12.2(a) Bills Payable
4,071,078,095 3,045,627,717
Amount in BDT
Dec-20 Dec-19
Maturity wise Grouping Bills Payable

Over 1 months but within 6 months 2,776,950 2,776,950
4,071,078,095 3,045,627,717
12.3(a) Savings Bank/Mudaraba savings bank deposits
27,577,416,714 23,894,395,453
12.4(a) Fixed deposits/Mudaraba fixed deposits
93,258,753,354 116,338,773,679
12.4.1(a) Fixed deposits/Mudaraba fixed deposits - Maturity wise Grouping
Over 6 months but within 1 year 1,083,620,664 978,150,395
93,258,753,354 116,338,773,679
12.5(a) Deposit under schemes/Mudaraba deposit schemes
60,745,941,739 55,695,383,360
13. Other liabilities
Provision for Gratuity Fund (Note-13.1) - -
Provision for MBL Foundation 13.1A - -
Provision for Fixed Assets (Note-13.2) 85,000,000 85,000,000
Other Provision (Note-13.2.1) 898,941,000 299,941,000
Provision for Off Balance Sheet Items (Note-13.3) 988,595,393 986,633,130
Provision for Incentive Bonus 26,933,786 30,305,286
Provision for Current Tax less advance Tax (Note-13.4.1) (1,916,510,806) (1,327,265,563)
Provision for Deferred Tax (Note-13.4.2) (143,304,533) (124,964,099)
Provision for Loans and Advances/investments (Note-13.5.1) 11,729,996,549 12,134,283,000
Leasehold Liabilities IFRS-16 743,375,517 1,007,223,897
Adjusting Account Credit (Note-13.6) 3,385,327,874 4,922,924,942
Interest Suspense Account (Note-13.7) 5,946,882,827 4,992,975,024
Provision for Audit fees 1,150,000 600,000
21,746,387,607 23,007,656,618


Amount in BDT
Dec-20 Dec-19
13.1 Provision for Gratuity Fund

Beginning of the year - -
Add. During the year 240,000,000 150,000,000
240,000,000 150,000,000
Transferred to Savings Account (Gratuity Fund) 240,000,000 150,000,000
- -
13.1A Provision for MBL Foundation:
Beginning of the year - 20,000,000
Add. During the year 30,000,000 30,000,000
Less. Adjustment during the year - 20,000,000
30,000,000 30,000,000
Transferred to Savings Account ( MBL Foundation) 30,000,000 30,000,000
- -
13.2 Provision for Fixed Assets
Provision held at the beginning of the year 85,000,000 85,000,000
Provision made during the year - -
85,000,000 85,000,000
A Land is included under freehold properties- land (Note-8), located at Gulshan, Plot# 3, Block# CWN (C), Gulshan
Avenue, Gulshan, Dhaka-1212, Municipality Holding# 105, Gulshan Avenue, Gulshan. Area of land is 1 bigha 2 chattaks
purchased in the year 2005 for Bank’s own use as per decision of the Board of Directors in its 73rd meeting held on 23
August 2005. The land is under litigation and possession of the land is yet to be taken. In this connection a provision
has been made as per Bangladesh Bank’s instruction.
Provision was made for land as per instruction of Bangladesh Bank vide letter no. DBI-1(vigilance) / 5050 (15)/ 2006-
400, 20 March 2006.
13.2.1 Other Provision
I. Provision for Protested Bill :
Provision held at the beginning of the year agt.Protested Bill - 47,562
Add. During the year - -
Less. Transfer to Retained Earning - (47,562)
- -
II. Provision for Other Asset
Provision held at the beginning of the year 285,441,000 -
Add.Provision made during the year against Other Asset - 285,441,000
Less: Adjusted during the year (100,000,000)
185,441,000 285,441,000
III. Provision for Climate risk fund
Provision made during the year - 1,000,000
3,500,000 3,500,000
IV. Provision for Good Borrower rebate
Provision made during the year - 1,000,000
11,000,000 11,000,000
V. Special General Provision COVID-19
Provision held at the beginning of the year - -
Provision made during the year 699,000,000 -
As per BRPD Circular Letter No.56, dated on 10th December 2020 699,000,000 -
Total (I+II+III+IV+V) 898,941,000 299,941,000

Amount in BDT
Dec-20 Dec-19
VI. Other Provision made during the year

Other Asset - 285,441,000
Climate risk fund - 1,000,000
Good Borrower rebate - 1,000,000
Special General Provision COVID-19 699,000,000 -
699,000,000 287,441,000
13.3 Provision for Off Balance Sheet Items
Provision made during the year 1,962,263 (11,933,758)
988,595,393 986,633,130
13.3 (a) Consolidated current year provision for off-balance sheet
Mercantile Bank Limited 1,962,263 (11,933,758)
1,962,263 (11,933,758)
13.3.1 (a) Consolidated current year other provision
Mercantile Bank Securities Limited - 18,201,102
699,000,000 305,642,102
13.4 Provision for Income Tax
Current tax liabilities for the current and prior year have been measured at the amount expected to be paid to (recovered
from) the taxation authorities, using the tax rates and tax law that have been enacted or substantively enacted by the
Balance Sheet date (IAS 12 “Income Taxes” ; Para 46).
Advance tax
Opening Advance Tax 16,639,779,006 15,796,615,773
Adjustment during the year (7,321,948,628) (646,517,115)
Tax paid during the year Under 64, ITO Ordinance 1984 1,157,585,678 1,489,680,348
10,475,416,056 16,639,779,006
Provision for Tax
Opening Provision of Tax 15,337,257,020 14,637,233,601
Provision made during the year 568,340,435 1,346,540,534
8,583,648,827 15,337,257,020
Tax liabilities/(Assets) (1,891,767,229) (1,302,521,986)
13.4.1 Current Tax liabilities/(Assets)
Opening Tax Liabilities 15,312,513,443 14,612,490,024
Provision made during the year 568,340,435 1,346,540,534
8,558,905,250 15,312,513,443
Total Advance tax paid (10,475,416,056) (16,639,779,006)
(1,916,510,806) (1,327,265,563)
13.4.2 Deferred Tax liabilities/(Assets)
Opening Deferred Tax (124,964,099) (83,423,564)
Provision made during the year (18,340,435) (41,540,535)
(143,304,533) (124,964,099)


13.4.2.1 As per BRPD Circular # 11 Dated: 12 December 2011 regarding accounting for Deferred Tax policy are as follows:
(Deductible)/ Deferred Tax

Carrying
Particulars Tax Base Taxable Temporary (Asset )/ Liability
Amount
Differences (@37.5%)
Fixed Assets 1,751,532,898 2,133,678,321 (382,145,423) (143,304,534)
Deferred Tax (Assets)/Liabilities as on 31.12.2020 (143,304,534)
Deferred Tax (Assets)/Liabilities as on 31.12.2019 (124,964,099)
Deferred Tax (Income)/Expenses (18,340,435)
Amount in BDT
Dec-20 Dec-19
13.4.1(a) Consolidated curent year tax provision
Mercantile Bank Limited 568,340,435 1,346,540,534
Mercantile Exchange House (UK) Limited - 48,351
594,737,133 1,368,333,012
13.4.2(a) Consolidated deferred tax curent year provision
Mercantile Bank Limited (18,340,435) (41,540,535)
(17,594,591) (41,035,528)
13.5 Provision made for loans & advances/investments including off-balance sheet
Provision against Un Classified Loans/investments 189,522,623 3,492,235,969
Provision against Classified Loans/investments 345,928,342 107,510,832
Other Provision (Off-Balance Sheet Items) (Note-13.3) 1,962,263 (11,933,758)
537,413,227 3,587,813,043
13.5(a) Provision made for loans & advances/investments including off-balance sheet items
Mercantile Bank Limited 537,413,227 3,587,813,043
577,413,227 3,607,813,043
13.5.1 Provision for loans and advances/investments
a. Provision against Classified Loans/investments (Specific Provision) 4,882,578,037 4,519,981,000
b. Provision against Unclassified Loans/investments (General Provision) 6,847,418,512 7,614,302,000
11,729,996,549 12,134,283,000
Movement of Provision against Classified Loans and Advances/investments
a
(Specific Provision)
Provision held at the beginning of the year 4,519,981,000 4,763,914,091
Fully Provided Debts written off (356,604,804)
Recoveries of amounts previously written off 16,668,695 5,160,882
Specific Provision for the year - -
Recoveries and Provisions no longer required - -
Net Charge to Profit and Loss Account 345,928,342 107,510,832
Provision held at the end of the year 4,882,578,037 4,519,981,000

Amount in BDT
Dec-20 Dec-19
b. Provision against Unclassified Loans/investments (General Provision)

Provision held at the beginning of the year 7,614,302,000 5,627,616,903
Fully Provided Debts written off (956,406,111) (1,505,550,872)
Adjustment during the year - -
Addition during the year 189,522,623 3,492,235,969
6,847,418,512 7,614,302,000
Provision at the end of the year (a+b) 11,729,996,549 12,134,283,000
13.5.1(a) Consolidated Provision for Loans and Advances/investments
11,769,996,549 12,154,283,000
13.6 Adjusting Account Credit
Interest Payable 3,084,609,073 4,630,352,384
Other payable 300,718,801 292,572,558
3,385,327,874 4,922,924,942
13.7 Interest Suspense Account
Opening balance 4,992,975,024 3,858,594,068
Amount transferred during the year 2,085,574,803 3,830,339,118
7,078,549,827 7,688,933,186
Amount recovered and waive during the year 1,052,818,195 2,309,697,046
Amount written off during the year 78,848,805 386,261,116
(1,131,667,000) (2,695,958,162)
Balance at the end of the year 5,946,882,827 4,992,975,024
13(a) Consolidated Other Liabilities
23,194,498,983 24,354,823,662
14. Capital
Authorized capital
1200,000,000 Ordinary shares of BDT 10 each 12,000,000,000 12,000,000,000
14.1 Issued, Subscribed and Fully Paid-up Capital
Total 984,016,217 Ordinary shares of BDT 10 each were issued, subscribed and fully paid up as at 31 December 2020.
Opening balance 9,371,583,020 8,149,202,630
Issued for cash - -
Right shares - -
Issued for other than cash ( Bonus shares) 468,579,150 1,222,380,390
Closing balance 9,840,162,170 9,371,583,020
Issued for cash 245,000,000 245,000,000

IPO 319,765,000 319,765,000
Right shares 1,438,942,300 1,438,942,300
Bonus shares 7,836,454,870 7,367,875,720
9,840,162,170 9,371,583,020


14.2 History of Paid-up capital
Accounting year Declaration No. of shares Value in capital (BDT) Cumulative (BDT)
1999 Initial 24,500,000 245,000,000 245,000,000
2000 Bonus 3,185,000 31,850,000 276,850,000
2001 Bonus 2,768,500 27,685,000 304,535,000
2002 Bonus 1,523,000 15,230,000 319,765,000
2003 IPO 31,976,500 319,765,000 639,530,000
2003 Bonus 15,988,250 159,882,500 799,412,500
2004 Bonus 19,985,310 199,853,100 999,265,600
2005 Bonus 19,985,310 199,853,100 1,199,118,700
2006 Bonus 29,977,960 299,779,600 1,498,898,300
2007 Bonus 29,977,960 299,779,600 1,798,677,900
2008 Bonus 35,973,550 359,735,500 2,158,413,400
2009 Bonus 47,485,090 474,850,900 2,633,264,300
2010 Right Share 143,894,230 1,438,942,300 4,072,206,600
2010 Bonus 89,588,540 895,885,400 4,968,092,000
2011 Bonus 114,266,116 1,142,661,160 6,110,753,160
2012 Bonus 48,886,025 488,860,250 6,599,613,410
2013 Bonus 79,195,360 791,953,600 7,391,567,010
2014 - - 7,391,567,010
2015 - - 7,391,567,010
2016 Bonus 36,957,836 369,578,360 7,761,145,370
2017 Bonus 38,805,726 388,057,260 8,149,202,630
2018 Bonus 122,238,039 1,222,380,390 9,371,583,020
2019 Bonus 46,857,915 468,579,150 9,840,162,170
Total 984,016,217 9,840,162,170 -
14.3 Particulars of Fully Paid-up Share Capital
Dec-20 Dec-19 Dec-20 Dec-19

No. of Shares (%)
Sponsor 351,036,061 372,811,021 35.67% 39.78%
Financial Institutions 211,577,414 159,226,488 21.50% 16.99%
General Public 377,841,464 346,659,377 38.40% 36.99%
Foreign 43,561,278 58,461,416 4.43% 6.24%
984,016,217 937,158,302 100.00% 100.00%
14.4 Classification of Shareholders by Holding as on 31 December 2020
No. of Shareholder No. of Shares held ( % ) of Holdings
1 to 499 Shares 5,559 972,218 0.10%

500 to 5,000 Shares 10,973 22,513,839 2.29%
5,001 to 10,000 Shares 2,471 18,084,059 1.84%
10,001 to 20,000 Shares 1,723 24,643,515 2.50%
20,001 to 30,000 Shares 646 15,876,513 1.61%
30,001 to 40,000 Shares 335 11,667,379 1.19%
40,001 to 50,000 Shares 231 10,611,167 1.08%
50,001 to 100,000 Shares 488 35,594,300 3.62%
100,001 to 1,000,000 Shares 531 146,478,112 14.89%
1,000,001 to 99999999 Shares 123 697,575,115 70.89%
23,080 984,016,217 100.00%

Amount in BDT
Dec-20 Dec-19
14.5 Capital to Risk Weighted Asset Ratio (CRAR)-under BASEL-III

Tier – I Capital (Going Concern Capital)
a) Common Equity Tier I (CET-I)
Paid up Capital 9,840,162,170 9,371,583,020
Statutory Reserve 8,421,348,098 7,879,083,376
Retained Earnings 1,480,480,958 1,510,875,350
General Reserve 1,550,000,000 1,400,000,000
Dividend Equalization Fund 45,680,250 45,680,250
21,337,671,476 20,207,221,996
Regulatory Adjustment from CET-I (53,181,545) (108,328,425)
21,284,489,932 20,098,893,571
b) Additional Tier-I (AT-I) - -
Tier-I Capital (a+b) 21,284,489,932 20,098,893,571
Tier-II Capital (Gone Concern Capital)
General Provision 8,535,013,904 8,600,935,130
Exchange Equalization Account - -
Revaluation Reserve for Fixed Assets - 321,805,978
Revaluation Reserve for Equity Investment - -
Non-convertible Subordinated Bond 3,600,000,000 4,200,000,000
Revaluation Reserve for Securities - 223,908,457
12,135,013,904 13,346,649,565
Regulatory Adjustments from Tier-II Capital - (545,714,435)
Tire-II Capital 12,135,013,904 12,800,935,130
A. Total Capital 33,419,503,836 32,899,828,701
B. Total Risk Weighted Assets (RWA) 245,486,434,312 236,412,615,295
C. Minimum Capital Requirement (MCR) 30,685,804,289 29,551,576,912
D. Surplus/ (Deficiency) (A-C) 2,733,699,547 3,348,251,789
Capital to Risk Weighted Asset Ratio (CRAR) 13.61% 13.92%
Dec-20 Dec-19
Capital Requirement
% Required % Held % Required % Held
Tier -I Capital (Going-Concern
6.17% 6.00%
Capital)
Capital Conservation Buffer 2.50% 2.50%
Tier -II Capital (Gone-Concern
4.94% 5.42%
Capital)
12.50% 13.61% 12.50% 13.92%
Amount in BDT
Dec-20 Dec-19
14.6 Capital to Risk Weighted Asset Ratio (CRAR)-under BASEL-III
There remains a surplus of BDT. 2,733,699,547 on capital and reserve fund of the Bank as per requirement of section 13A
of Bank Companies Act, 1991 and BRPD circular # 9, dated 31 December 2020 respectively details of which are placed
below :
(a) Minimum Capital Requirement (MCR) 30,685,804,289 29,551,576,912
(b) Actual Capital: 33,419,503,836 32,899,828,701
i) Tier I Capital (Going-Concern Capital) 21,284,489,932 20,098,893,571
ii) Tier-II Capital (Gone -Concern Capital) 12,135,013,904 13,346,649,565


Amount in BDT
Dec-20 Dec-19
General provision 8,535,013,904 8,600,935,130

Exchange Equalization Account - -
Revaluation Reserve for Fixed Assets - 321,805,978
Revaluation Reserve for equity Investment - -
Non-convertible Subordinated Bond 3,600,000,000 4,200,000,000
Revaluation Reserve for securities - 223,908,457
Regulatory Adjustments from Tier-II Capital - (545,714,435)
Surplus/ (Deficiency) (b-a) 2,733,699,547 3,348,251,789
15. Statutory Reserve

Opening balance 7,879,083,376 7,182,984,005
Addition during the year 542,264,723 696,099,371
Closing balance 8,421,348,098 7,879,083,376
This has been made according to Sec. 24 of Bank Company Act, 1991 and shall be maintained until it equals to Paid-up
Capital.
15(a) Consolidated Statutory Reserve
Mercantile Bank Limited. 8,421,348,098 7,879,083,376
8,421,348,098 7,879,083,376
15.1 General reserve
Opening balance 1,400,000,000 1,400,000,000
Transferred during the year 150,000,000 -
Closing balance 1,550,000,000 1,400,000,000
16. Other reserves
A. Dividend Equalization Fund
Opening balance 45,680,250 45,680,250
Addition during the year - -
Closing balance 45,680,250 45,680,250
B. Adjustment for Approved Securities HTM
Opening balance 8,687,652 938,767
Last years adjustment - 7,748,885
Adjustment during the year 14,367,513 -
Closing balance 23,055,166 8,687,652
C. Reserve from revaluation
HFT securities 72,134,088 24,866,964
** Revaluation Reserve for Fixed Assets 643,611,955 643,611,955
715,746,043 668,478,919
** Fixed assets of the Bank specially land & land development was revalued by a professional valuation firm M/s Jarip O
Paridarshan. The Gain was arisen from such revaluation was duly accounted for in the year 2011 as per IAS 16.
D. Reserve against non-banking assets
Opening balance 23,905,709 -
* Addition during the year 3,400,800 23,905,709
Disposal during the year (2,002,115) -
Closing balance 25,304,394 23,905,709
* The Bank was awarded absolute ownership on few mortgaged properties through the verdict of honorable court under
section 33(7) of the Artharin Adalat Act 2003. These were recorded as non banking assets. (Shown as Annexure- D1)
Total Other reserves (A+B+C+D) 809,785,853 746,752,530

Amount in BDT
Dec-20 Dec-19
16(a) Consolidated other reserves
809,785,853 746,752,530
17. Retained earnings (Surplus in Profit & Loss Account ):
Opening balance 1,510,875,350 1,238,810,693
Less. Cash dividend 1,030,874,132 -
Less. Stock dividend 468,579,150 1,222,380,390
Transfer to Suspense - 5,000,000
Transfer from Provision for Incentive Bonus - 20,000,000
Transfer from Other Provision - 47,562
Retained earnings (opening balance adjusted) 11,422,068 31,477,865
Profit before income tax 2,711,323,613 3,480,496,856
2,722,745,682 3,511,974,721
General reserve 150,000,000 -
Statutory reserve 542,264,723 696,099,371
2,030,480,959 2,815,875,350
Provision for income current tax 568,340,435 1,346,540,534
1,462,140,524 1,469,334,816
Provision for deferred tax (18,340,435) (41,540,535)
Closing balance 1,480,480,958 1,510,875,350
17.(A) Retained surplus
Opening Retained Earning 11,422,068 31,477,865
Add. Addition during the year 1,469,058,890 1,479,397,486
Closing balance 1,480,480,958 1,510,875,350
17.1 Consolidated retained earnings last year
Mercantile Bank Securities Limited 5,030,900 (37,422,933)
Mercantile Exchange House (UK) Limited (23,627,610) (29,433,336)
(7,174,642) (35,378,404)
17(a).1 Consolidated retained earnings Current year
Mercantile Exchange House (UK) Limited (6,927,468) 5,805,726
1,540,409,914 1,527,657,045
17(a) Consolidated Surplus in Profit and Loss Account
Mercantile Exchange House (UK) Limited (30,555,078) (23,627,610)
1,533,235,272 1,492,278,640
Share of profit (17(b).1) (3,141,570) (69,875)
1,530,093,703 1,492,208,765


Amount in BDT
Dec-20 Dec-19
17(a).1A Controlling Interest

a) Mercantile Bank Securities Limited
Opening balance for MBSL 4,961,029 (36,903,168)
Addition during the period for MBSL 72,598,750 41,864,196
77,559,778 4,961,029
b) MBL Asset Management Limited
Opening balance for MBL Asset Management Limited - -
Addition during the year for MBL Asset Management Limited 2,608,044 -
2,608,044 -
Closing balance 80,167,822 4,961,029

17(b) Non Controlling Interest
Non controlling share capital for MBSL 50,000,000 50,000,000
Share of profit for MBSL (17(b).1) 1,092,392 69,875
51,092,392 50,069,875
Non controlling share capital for MBL Asset Management Limited 44,000,000 -
Share of profit for MBL Asset Management Limited (17(b).1) 2,049,177 -
46,049,177 -
Closing balance 97,141,570 50,069,875
17(b).1 Non Controlling Interest
Opening balance for MBSL 69,875 (519,762)
Non controlling share capital for MBSL 1,022,518 589,637
1,092,392 69,875
Opening balance for MBL Asset Management Limited - -
Non controlling share capital for MBL Asset Management Limited 2,049,177 -
2,049,177 -
Closing balance 3,141,570 69,875
18.A(1) Cash and cash equivalent
Cash 15,503,985,230 16,781,921,933
Balance with other Banks and Financial Institutions 4,422,150,627 1,165,342,631
Prize Bonds 3,623,600 3,770,600
Money at call on short notice 248,100,000 365,000,000
20,177,859,457 18,316,035,164
18.A(2) Consolidated cash and cash equivalent
Cash 15,504,631,849 16,788,776,795
Balance with other Banks and Financial Institutions 4,608,619,568 1,289,207,319
Prize Bonds 3,623,600 3,770,600
Money at call on short notice 248,100,000 365,000,000
20,364,975,017 18,446,754,714

Amount in BDT
Dec-20 Dec-19
18 Contingent liabilities
18.1 Acceptance and endorsements
Back to Back Bills 9,564,467,316 12,458,431,185
Banker's Liabilities PAD (EDF) 38,295,880,134 36,856,279,917
47,860,347,450 49,314,711,103
18.2 Letter of guarantees
Money for which the Bank is contingently liable in respect of guarantees are
given favoring:
Directors - -
Government 71,878,362 70,278,361
Bank and other Financial Institutions 372,880,734 250,000,000
Others ( Note-18.2.1) 15,899,234,047 14,461,183,512
16,343,993,142 14,781,461,873
18.2.1 Letter of guarantees others
Local 13,276,265,834 12,115,979,650
Foreign 2,622,968,213 2,345,203,862
15,899,234,047 14,461,183,512
18.3 Letter of credit
Inland 1,581,929,445 1,454,969,771
General 25,876,948,282 19,353,478,963
Back to Back L/C 10,691,081,934 10,291,110,732
38,149,959,661 31,099,559,466
18.4 Bills for collection
Outward Bills for Collection 2,637,582,327 3,460,417,595
Outward Foreign Bills for Collection 3,120,412,977 3,337,586,692
Outward Foreign Bills Lodge - -
5,757,995,305 6,798,004,286
18.5 Other Contingent Liabilities - -
- -
Total Contingent liabilities 108,112,295,558 101,993,736,728
19 Income Statement Amount in BDT
Conventional and Islamic banking Jan-20 to Dec-20 Jan-19 to Dec-19
Income/Profit:
Interest, discount and similar income 23,348,452,654 26,716,805,688
Dividend income 177,571,480 190,630,125
Fees, commission and brokerage 1,063,993,961 1,277,599,706
Gain less losses arising from dealing securities 292,850,835 115,903,958
Gain less losses arising from investment securities 1,178,246 3,280,296
Gain less losses arising from dealing in foreign currencies 1,142,350,765 1,673,103,735
Income from non-banking assets - -
Sub. Total 27,275,788,930 31,292,173,950


Amount in BDT
Jan-20 to Dec-20 Jan-19 to Dec-19
Expenses:
Interest/profit, fees and commission 16,732,221,730 18,116,167,297
Losses on Ioans and advances/investments - -
Administrative expenses 3,048,523,754 2,434,169,936
Other operating expenses 2,736,115,239 2,586,854,506
Depreciation on banking assets 811,191,366 799,231,312
Sub. Total 23,328,052,090 23,936,423,051
Operating profit before provision 3,947,736,841 7,355,750,899
20 Interest income/Profit on investment
Interest from Banks & other Financial Institutions (Note-20.1) 97,429,791 241,864,725
Interest from F.C. Clearing Account 93,295,996 162,311,982
Interest/profit from Loans and Advances/investments (Note-20.2) 19,197,468,573 22,677,638,108
19,388,194,360 23,081,814,816
20.1 Interest received from Banks & other Financial Institutions
Interest from money at call and short notice 63,378,718 166,841,044
Interest from other Banks 33,677,624 75,023,681
Interest from Reverse REPO 373,449 -
97,429,791 241,864,725
20.2 Interest/profit from loans and advances/investments
Loan General 5,472,569 6,820,427
Term Loan 6,044,231,652 5,043,738,074
Time Loan 1,730,641,005 2,758,348,361
Loan Against Trust Receipt 758,220,709 1,108,854,794
Packing Credit 212,244,357 211,761,777
Lease Finance 135,707,900 123,725,355
Hire Purchase 1,275,848,310 1,300,266,620
Payment Against Documents 34,808,473 80,596,873
Cash Credit (Hypo) 958,495,735 1,553,922,104
Overdraft 2,877,734,420 3,799,927,068
Consumers Credit 230,172,168 285,309,522
House Building Loan 540,278,272 675,021,395
Staff Loan 54,310,115 64,254,272
EDF Loan 225,703,353 388,566,211
Bill Purchase and Discounted 932,932,668 1,282,359,876
SME 2,793,557,396 3,603,896,410
Agricultural Credit 355,947,034 346,809,813
Personal Loan 30,833,896 43,064,656
Other Credit Schemes 328,542 394,500
19,197,468,573 22,677,638,108
20(a) Consolidated 'Interest income/Profit on investment
19,470,821,039 23,155,095,356
Inter Company Transaction - -
19,470,821,039 23,155,095,356

Amount in BDT
21 Interest/Profit Paid on deposits, borrowings etc.

Interest/profit on Deposits 15,457,150,927 16,877,776,041
* Interest paid on lease 83,316,164 50,335,822
Interest on Refinance BB 80,428,040 71,803,796
Interest on Secondary Treasury Bill Purchased 122,469,192 27,219,266
Interest on Subordinated Bonds 398,654,706 505,220,550
Interest on Borrowings 590,202,702 583,811,821
16,732,221,730 18,116,167,297
Interest paid on lease has been calculated for the year December 2020 as per
*
IFRS-16
21(a) Consolidated Interest/Profit Paid on deposits, borrowings etc.
16,736,879,584 18,120,004,540
Inter Company Transaction - -
16,736,879,584 18,120,004,540
22 Investment income
Interest on Investments (Note-A) 3,960,258,294 3,634,990,872
Income on Investment in Shares (Note-B) 178,749,726 193,910,421
4,139,008,020 3,828,901,293
A Interest on Investments
Interest on Treasury Bills 504,052,443 320,285,604
Interest on Treasury Bonds 3,121,477,588 2,885,316,171
Interest on Bangladesh Bank Bill - -
Interest on Subordinated Bond 332,400,857 408,492,050
Interest on SWAP 2,327,405 20,897,047
3,960,258,294 3,634,990,872
B Income on Investment in Shares
Gain on sale of shares 1,178,246 3,280,296
Dividend on shares 177,571,480 190,630,125
178,749,726 193,910,421
22(a) Consolidated Investment Income
4,164,011,945 3,855,632,752
23 Commission, exchange & brokerage
Commission 1,063,993,961 1,277,599,706
Exchange (Note-23.1) 1,142,350,765 1,673,103,735
2,206,344,726 2,950,703,441
Commission income arises on services provided by the Bank and recognized on a cash receipt basis. Commission
charged to customers on letter of credits and letter of guarantees are credited to income at the time of effecting the
transactions.


Amount in BDT
23.1 Exchange
Gains arising from dealing securities - -
Losses on dealing securities -
Gains arising from investment securities - -
Losses on investing in securities - -
Gains arising from foreign trade business 1,142,350,765 1,673,103,735
Losses on foreign trading - -
1,142,350,765 1,673,103,735
23(a) Consolidated Commission, Exchange & Brokerage
2,311,566,216 3,037,426,557
24 Other Operating Income
Charges on L/C 405,828,419 449,481,129
Services & Other Charges 225,072,822 201,529,699
Income from rent of locker/property 8,285,703 7,973,666
On Line client fees 99,471,822 100,612,945
ATM card 53,286,238 53,615,240
VISA card 103,698,965 120,226,371
Co-brand services 8,175,847 5,772,606
Gain on sale and revaluation of securities 292,850,835 115,903,958
Gain on sale on assets 1,955,502 5,481,582
Miscellaneous earnings (Note-24.1) 343,615,669 370,157,204
1,542,241,824 1,430,754,400
24.1 Miscellaneous earnings
Postage cost recovery 5,638,566 10,607,511
SWIFT cost recovery 88,026,164 103,445,417
Foreign correspondence cost recovery 129,032,800 133,073,057
Others 120,918,140 123,031,219
343,615,669 370,157,204
24(a) Consolidated Other Operating Income
1,572,521,076 1,460,306,486
25 Salaries and Allowances
Basic salary 1,454,971,555 1,282,558,659
Bonus (Festival and incentive) 693,294,432 262,042,055
Bank's contribution to employees provident fund 139,274,858 119,452,937
House rent allowances 500,628,746 459,755,755
Conveyance allowance 61,351,108 59,194,023
Medical allowance 141,248,357 125,307,142
Dearness allowance 4,387,480 105,045,685
Overtime allowance 508,000 566,500
Other allowances 35,174,103 2,328,770
3,030,838,637 2,416,251,526

Amount in BDT
25(a) Consolidated Salaries and Allowances

3,070,462,045 2,455,289,533
26 Rent, Taxes, Insurance, Lightings etc
* Office rent - -
Rates, taxes & excise duty and VAT on rent 74,452,211 73,344,365
Insurance 217,915,909 189,441,859
Lighting, gas & water 94,565,691 102,586,957
386,933,811 365,373,181
* Right Of Use (ROU) Assets as per under IFRS-16 has been calculated for the year December 2020 considering monthly
rental expenses.
26(a) Consolidated Rent, Taxes, Insurance, Lightings etc
402,389,563 391,187,402
27 Legal Expenses
Legal fees & charges 12,075,638 21,220,542
Stamps, notary public expenses, registration fees & other fees etc. 9,368,024 10,600,795
21,443,663 31,821,336
27(a) Consolidated Legal Expenses
Mercantile Exchange House (UK) Limited 631,140 728,797
22,321,950 33,217,400
28 Postage, stamps, telecommunication etc.
Postal Charges 291,405 742,892
Courier Charges 5,867,460 5,813,824
Stamp & Cartridge Paper Cost 199,398 358,131
Telephone Bill 10,705,846 14,024,123
Mobile Phone Bill 234,209 317,273
FAX Charges - 459
Telex Charge 130,277 505,013
Internet Charges 4,377,671 1,790,979
BACH Charge 2,139,996 1,585,166
SWIFT 10,064,228 11,056,593
Reuters 3,427,516 1,101,096
Online Connection Fees 27,158,031 29,196,998
64,596,037 66,492,547


Amount in BDT
28(a) Consolidated Postage, stamps, telecommunication etc.

66,432,549 68,538,394
29 Stationary, Printing and Advertisements
Conventional and Islamic banking 104,883,751 94,497,158
Printing & stationery 68,311,755 75,781,129
Advertisement 81,591,549 95,504,461
Computer expenses 254,787,054 265,782,748
29(a) Consolidated Stationary, Printing and Advertisements
255,793,497 267,038,211
30 Chief Executive's salary and fees
Basic Salary 7,161,379 7,364,573
Allowances 3,000,000 2,991,072
Bonus (Festival and Incentive) 2,210,000 2,100,000
Bank's contribution to Provident fund 716,138 735,565
13,087,517 13,191,210
30(a) Consolidated Chief Executive's salary and fees
13,087,517 13,191,210
31 Directors' Fees
Conventional and Islamic banking 4,192,000 4,208,000
Director fees 405,600 519,200
VAT on director fees 4,597,600 4,727,200
Fees of the Directors is Taka 8,000 per meeting as per BRPD Circular Letter no.11 Dated 04 October 2015.No other
financial benefits are extended to Board of Directors [as per section 18(1) of the Banking Company Act (Amendment)
2018] excluding above fees.
31(a) Consolidated Directors' Fees
Mercantile Bank Securities Limited 1,012,500 775,000
5,706,100 5,502,200
32 Auditors' fees
External Audit fee/CGC fees 1,207,500 747,500
1,207,500 747,500
32(a) Consolidated Auditors' Fees
Mercantile Bank Limited 1,207,500 747,500
MBL Asset Management Limited 25,000 394,646
1,903,928 1,257,146

Amount in BDT
33 Depreciation and Repair of Fixed Assets

Depreciation on fixed assets (Note-33.1) 299,641,366 387,681,312
* Depreciation of ROU (Right Of Use) assets as per under IFRS-16 511,550,000 411,550,000
Repairs & Maintenance (Note-33.2) 82,921,303 95,954,593
894,112,670 895,185,906
* Depreciation of ROU (Right Of Use) assets has been calculated for the year December 2020 as per IFRS-16 (Annexure -A)
33.1 Depreciation on fixed assets (Annexure -A)
Free hold property 299,641,366 387,681,312
299,641,366 387,681,312
33.2 Repair of Fixed Assets
Repairs & Maintenance 82,921,303 95,954,593
82,921,303 95,954,593
33 (a) Consolidated Depreciation and Repair of Fixed Assets
MBL Asset Management Limited 3,461,496 4,677,097
953,812 573,037
898,546,442 900,436,039
34 Other Expenses
Bank charges 10,797,683 7,023,223
Donation 283,412,057 156,772,608
Car expenses 181,909,972 168,620,186
Training expenses 1,414,419 8,354,874
Supporting Staff Salary 400,439,246 373,701,900
Subscription 8,529,887 12,472,631
Entertainment expenses 48,132,706 55,203,708
Travelling expenses 13,341,777 37,688,032
Conveyance, carriage & freight 8,123,908 11,339,760
Business development 29,506,656 44,556,580
Liveries & uniforms 5,340,318 3,251,732
Medical expenses 2,236,911 1,228,482
Newspapers and magazines 952,083 1,855,995
House Attendance Allowance 602,525 798,215
Professional service fees 2,572,027 7,211,051
Q-cash/ATM cards/VISA cards 43,077,241 41,803,639
House furnishing 7,526,392 8,174,954
Leave Encashment & Leave Fare Assistance (LFA) 571,070,035 467,503,818
Gratuity 140,000,000 150,000,000
Loss on sale of assets 559 268,154
Loss on sale of securities 1,746,277 11,463,778.28
Loss on market adjustment (Securities) 79,065,420 83,043,339
Mobile banking 24,002,869 22,827,813
Credit Rating Fees 3,401,612 1,344,313
Miscellaneous expenses (Note-34.1) 57,023,291 84,173,819
1,924,225,870 1,760,682,601
34.1 Miscellaneous expenses

Laundry & cleaning 6,770,692 5,065,781
Photograph & Photocopy 638,229 785,978
Cash carrying charge 14,908,053 13,859,398


Amount in BDT
Nursery & Plantation 1,264,423 1,700,397

Cash incentive 1,987,184 2,439,122
Sundry expenses 31,454,711 60,323,143
57,023,291 84,173,819
34 (a) Consolidated Other Expenses
1,960,509,681 1,789,485,101
Amount in BDT
Dec-20 Dec-19
35 Earnings per Share (EPS)
Net profit after tax (Earnings Attributable to ordinary shareholders) 2,161,323,613 2,175,496,856
Number of Ordinary Shares outstanding in the year 984,016,217 984,016,217
Average no. of share outstanding 984,016,217 984,016,217
Earnings per Share (EPS) 2.20 2.21
35 (a) Consolidated Earnings Per Share (EPS)
Consolidated net profit after tax 2,231,331,651 2,222,561,346
Less: Non Controlling Interest 3,071,695 589,637
Profit attributable to ordinary equity holders of the parent entity 2,228,259,956 2,221,971,709
Number of share outstanding 984,016,217 984,016,217
Consolidated Earnings per Share (EPS) 2.26 2.26
Disclouser as per Bangladesh Securities and Exchange Commission notification reference no. BSEC/
*
CMRRCD/2006-158/208/Admin/81, dated on 20 June 2018.
36 Calculation of Net Asset Value Per Share (NAVPS)
Number of Share outstanding 984,016,217 937,158,302
Net Asset Value (NAV) per share 22.46 22.31
36 (a) Calculation of Consolidated Net Asset Value Per Share (NAVPS)
Net Asset Value (NAV) per share 22.61 22.34
37 Calculation of Net Operating Cash Flow Per Share (NOCFPS)

Net Operating Cash Flow Per Share (NOCFPS) 4.11 2.15
37 (a) Calculation of Consolidated Net Operating Cash Flow Per Share (NOCFPS)
Net Operating Cash Flow Per Share (NOCFPS) 4.16 2.22
37.1 Reconciliation of Net Profit after tax with Cash flows from Operating Activities (Solo)
Net profit after taxation 2,161,323,613 2,175,496,856
Adjustment to reconcile net income to net cash provided by operating activities
Interest Income (3,266,210,770) (251,833,379)
Interest Expense 3,483,263,779 5,135,572,934
Fees and commission income (10,000,000) (10,850,220)

Amount in BDT
Dec-20 Dec-19
Payment to the employees - -
Income taxes paid (607,585,678) (184,680,348)
Other Operating Income (163,101,483) (192,084,852)
Other Operating Expenses 972,728,753 731,208,806
Provision for Loans & Advances/Investments/Other Assets 1,236,413,227 3,875,254,043
Operating Profit before changes in Operating Assets and Liabilities 1,821,764,320 9,292,182,346
Increase/(Decrease) in operating assets & liabilities

Net Investment in trading securities 809,419,621 (11,150,643,315)
Loan & Advance to Customers (12,103,937,544) (12,659,835,460)
Other Assets (1,306,158,934) (1,577,990,665)
Deposits from other Bank 17,448,641,379 542,255,163
Deposits from customers (2,358,763,361) 17,717,147,159
Other Liabilities (2,432,472,950) (2,326,094,689)
56,728,211 (9,455,161,807)
Net Cash Flows from Operating activities 4,039,816,144 2,012,517,395

38 Number of Employees
The number of employees engaged for the entire year who received a total remuneration of BDT 36,000 or above were 2428
Break-up of No. of employees as per salary range wise

Range of Salary No of employees
Tk. 0.00 to Tk. 20,000 11
Tk 20,001 to Tk. 50,000 536
Tk. 50,001 to Tk. 1,00,000 1032
Tk. 100,001 to Tk. 2,00,000 768
Tk. 2,00,001 and above 81
Total 2428
39 Related Party Disclosure
39.1 Name of Directors and their interest in the Bank and different entities-shown in Annexure - B.


39.2 Significant contracts where Bank is a party and herein Directors have interest:
Nature of contract Name of Director & related by Remarks

Lease agreement with Mr. Md. Shahidul Mr. Md. Shahidul Ahsan, Sponsor and The Lease Agreement was approved
Ahsan, Sponsor and Ex-Director of the Ex-Director of the Bank. by the Bangladesh Bank vide letter no
Bank to take rent 12th,13th, 14th & 15th BRPD(P-3)745(44)/2006-3776 dated:
floor(13600sft) of Swadesh Tower for 22.11.2006 and upon expiry on 03.04.2020
Head Office use only. the Lease Agreement was renewed on
09.08.2020 and subsequently informed
to Bangladesh Bank vide letter ref: MBL/
GSD/2020/943, dated: 17.08.2020.
Lease agreement with Arena Industries Mr. M. Amanullah, Director of the The lease agreement was approved by the
Ltd. represented by Mr. Tahsin Aman, Bank, father of Mr. Tahsin Aman, Bangladesh Bank vide its letter no. BRPD (P-
Director of the said company, for 02 Director of Arena Industries Ltd. 3)745(44)/2019-3668 dated 14.05.2019.
suits no. 9/A & 9/B on 9th floor of Eunoos
Trade Centre for Head Office use only.
Lease agreement with Mr. Md. Mr. Md. Shahabuddin Alam, Sponsor The lease agreement was approved by
Shahabuddin Alam, Sponsor and Ex- and Ex-Director of the Bank. the Bangladesh Bank vide its letter no
Director of the Bank to take rent of our BRPD (P-3)745(44)/2009-2706 dated
CEPZ Branch, Chattogram. 29.07.2009 and later renewed vide letter
no. BRPD(P-3)/745(44)/2019-8030 dated
09.10.2019.
Lease agreement with “M.A. Hannan Mr. Md. Abdul Hannan, Director Initially the agreement was executed by Mr.
Education & Human Resource of the Bank & Chairman of “M.A. Md. Abdul Hannan (former landowner) after
Development Trust” to take rent of our Hannan Education & Human Resource getting approval from Bangladesh Bank vide
Faridgonj Branch, Chandpur. Development Trust”. its letter no. BRPD(P-3)745(44)/2009-4159
dated 10.11.2009. But, later on Mr. Md.
Abdul Hannan transferred ownership of the
property in favor of “M.A. Hannan Education
& Human Resource Development Trust”
with approval of Bangladesh Bank vide its
letter no. BRPD/(p-3)/745(44)/2017-2543 dt.
24.04.2017.
Lease agreement with Mr. Md. Shahidul Mr. Md. Shahidul Ahsan, Ex-Director The lease agreement was approved by the
Ahsan, Sponsor and Ex-Director of of the Bank. Bangladesh Bank vide its letter no. BRPD
the Bank for 2nd, 8th, 9th & 10th floor (P-3)745(44)/2010-313 dated 31.01.2010.
(13600sft) of Swadesh Tower for Head
Office use only.
Lease agreement with (1) Mr. A. K. M. Mr. A. K. M. Shaheed Reza, Director of The lease agreement was approved by
Shaheed Reza (Director of the Bank), (2) f the Bank, Mr. Shawket Reza (brother the Bangladesh Bank vide its letter no.
Mr. Shawket Reza, (3) Ms. Tahamina Afroz of Mr. A.K.M Shaheed Reza) and Ms. BRPD (P-3)745(44)2010-1202, dated
to take rent of our Rajnagar Branch, Feni. Tahamina Afroz (sister of Mr. A.K.M 31.03.2010 and later renewed vide letter
Shaheed Reza). no. BRPD(P-3)/745(44)/2016-7735 dated
22.11.2016.
Lease agreement with Mr. Md. Baharul Mr. Md. Shahidul Ahsan, Sponsor and The lease agreement was approved
Ahsan to take rent of our Bangla Bazar Ex-Director of the Bank (Brother of Mr. by the Bangladesh Bank vide its letter
Branch, Noakhali. Md. Baharul Ahsan). no. BRPD(P-3)745(44)/2010-1814 dated
06.05.2010 and later renewed vide letter
no. BRPD(P-3)/745(44)/2016-7735 dated
22.11.2016.
Lease agreement with Mr. Mohd. Selim, Mr. Mohd. Selim (Deceased) Sponsor, The lease agreement was approved
Director (Deceased), Sponsor, Ex- Ex- Director & Ex-Vice Chairman of the by the Bangladesh Bank vide its letter
Director & Vice Chairman of the Board of Bank. no. BRPD(P-3)745(44)/2011-3456 dated
Director of the Bank to take rent of our 25.09.2011 and later renewed vide letter
Damudya Branch, Shariatpur. no. BRPD(P-3)/745(44)/2017-6532 dated
05.10.2017.
Lease agreement with Mr. Alhaj Akram Mr. Alhaj Akram Hossain (Humayun), The lease agreement was approved
Hossain (Humayun), Director & Vice Director & Vice Chairman of the of the by the Bangladesh Bank vide its letter
Chairman of the Bank for ATM Booth at Bank. no. BRPD(P-3)745(44)/2011-3455 dated
Bijoynagar Branch, Dhaka. 25.09.2011.
Lease agreement with Mr. Md. Shahidul Mr. Md. Shahidul Ahsan, Sponsor and The lease agreement was approved
Ahsan, Sponsor and Ex-Director of the Ex-Director of the Bank. by the Bangladesh Bank vide its letter
Bank for ATM Booth at Swadesh Tower, no. BRPD(P-3)745(44)/2011-3888 dated
Dhaka 20.10.2011.
Lease agreement with Mr. Md. Abdul Mr. Md. Abdul Hannan, Director of the The lease agreement was approved by
Hannan, Director of the Bank for ATM Bank. the Bangladesh Bank vide its letter no.
Booth at Faridgonj branch, Chandpur. BRPD(P-3)745(44)/2011-4574 dated 01.12.2011.

Nature of contract Name of Director & related by Remarks
Lease agreement with Mr. Shawket Reza Mr. A. K. M. Shaheed Reza, Director The lease agreement was approved
for ATM Booth at Gorat, Ashulia, Savar, of the Bank & brother of Mr. Shawket by the Bangladesh Bank vide its letter
Dhaka. Reza. no. BRPD(P-3)745(44)/2012-2215 dated
28.05.2012.
Lease agreement with Mr. Md. Abdul Mr. Md. Abdul Hannan, Director of the The lease agreement was executed with
Hannan, Director of the Bank for Bank. approval of the Board in 265th meeting dated
ATM Booth at Murad Apparels, South 21.09.2015 as per Bangladesh Bank guideline
Gouripur, Ashulia, Savar, Dhaka. vide BRPD circular letter no # 02 dated
13.01.2015.
Lease agreement with Mr. M. Amanullah, Mr. M. Amanullah, Director of the The lease agreement was approved
Director & Vice Chairman of the Bank Bank. by the Bangladesh Bank vide its letter
for ATM Booth at Zirabo Ashulia, Savar, no. BRPD(P-3)745(44)/2012-3497 dated
Dhaka. 27.08.2012.
Lease agreement to be executed with Mr. Mr. Md. Shahabuddin Alam, Sponsor The lease agreement was approved by the
Md. Shahabuddin Alam, Sponsor and Ex- and Ex-Director of the Bank. Bangladesh Bank vide its letter no. BRPD
Director of the Bank for Central Godown (P-3)745(44)/2013-1121 dated 24.10.2013
for Chittagong City. and later renewed vide letter no. BRPD (P-
3)745(44)/2020-2640 dated 04.03.2020.
Lease agreement with “M.A. Hannan Mr. Md. Abdul Hannan, Director Initially the agreement was executed by Mr.
Education & Human Resource of the Bank & Chairman of “M.A. Md. Abdul Hannan (former landowner) after
Development Trust” to take rent of our Hannan Education & Human Resource getting approval from the Bangladesh Bank
Chandpur Branch. Development Trust”. vide its letter no. BRPD(P-3)745(44)/2014-5723
dated 03.09.2014. But, later on Mr. Md.
Abdul Hannan transferred ownership of the
property in favor of “M.A. Hannan Education
& Human Resource Development Trust”
with approval of Bangladesh Bank vide its
letter no. BRPD/(p-3)/745(44)/2017-3157
dt. 25.05.2017. Later the Lease Agreement
renewed as per Bangladesh Bank approval
vide it letter no. BRPD(P-3)/745(44)2020-9835
dated 18.11.2020.
Lease agreement with Mr. A.S.M. Feroz Mr. A.S.M. Feroz Alam, Sponsor and The lease agreement was approved by the
Alam, Sponsor & Director of the Bank Director of the Bank. Bangladesh Bank vide its letter no. BRPD
to take rent of our Kalaiya Branch, (P-3)745(44)/2014-7845 dated 10.12.2014.
Patuakhali. Later the Lease Agreement renewed as per
Bangladesh Bank approval vide its letter
no. BRPD(P-3)/745(44)2020-10968 dated
15.12.2020.
Lease agreement with Mr. M. Amanullah, Mr. M. Amanullah, Director & Vice The lease agreement was approved
Director & Vice Chairman of the Bank to Chairman of the Bank. by the Bangladesh Bank vide its letter
take rent of our Donia Branch. no. BRPD(P-3)745(44)/2014-3575 dated
11.06.2014.
Lease agreement with Mr. Morshed Alam Mr. Morshed Alam M.P., Director & The lease agreement was approved by
M.P., Director & Chairman of the Board of Chairman of the Board of Directors of the Bangladesh Bank vide its letter no.
Directors of the Bank to take rent of our the Bank. BRPD(P-3)/745(44)/2015-17268 dated
Chowmuhoni Branch, Noakhali. 22.11.2015.
Lease agreement with Mr. Md. Abdul Mr. Md. Abdul Hannan, Director of the The lease agreement was approved by the
Hannan, Director of the Bank to take rent Bank. Bangladesh Bank vide its letter no. BRPD
of our Arambagh Branch, Dhaka. (P-3)/745(44)/2019-1979 dated 07.03.2019.
Lease agreement with Mr. Md. Abdul Mr. Md. Abdul Hannan, Director of the The lease agreement was executed with
Hannan, Director of the Bank for ATM Bank. approval of the Board in 345th meeting
Booth at Arambagh Branch, Motijheel, dated 04.07.2019 as per Bangladesh Bank
Dhaka. guidline vide BRPD circular letter no.02,dated
13.01.2015.
Lease agreement with (1) Mr. A.K.M Mr. A.K.M Shaheed Reza (Director of The lease agreement was approved
Shaheed Reza, (2) Mr. Shawket Reza, (3) the Bank), Mr. Shawket Reza (brother by Bangladesh Bank vide its letter no.
Mrs. Zobeda Begum & (4) Mrs. Nahid of Mr. A.K.M Shaheed Reza), Mrs. BRPD(P-3)/745(44)/2018-1685 dated
Reza to take rent of our Cumilla Noakhali Zobeda Begum (wife of Mr. A.K.M 05.03.2018.
Regional Office, Feni. Shaheed Reza), & Mrs. Nahid Reza
(wife of Mr. Shawket Reza)


39.3 Shares issued to Directors & Executives without consideration or exercisable at discount: Nil
39.4 Related Party Transaction:
Amount as on
Transaction with related Party Nature of transaction
31.12.2020
Mercantile Bank Securities Limited Loan (SOD) 503,649,573
39.5 Compensation of Key management personnel: Refer to note 30

39.6 Lending Policies to related Parties :
Lending to related parties is effected as requirements of Section 27 (1) of Bank Companies Act 1991
39.7 Loan and Advances to Directors and their related concern : Nil
Business other than Banking business with any related concern of the Directors as per Section 18 (2) of Bank Companies
39.8
Act 1991 : Nil
39.9 Investments in the Securities of Directors and their related concern : Nil
40 Reconciliation of Inter-Bank/Books of Accounts

Books of Accounts with regards to inter-bank (in Bangladesh and outside Bangladesh) are reconciled and there are no
material differences, which may affect the financial statements significantly.
41 LAND UNDER LITIGATION
A Land is included under free hold properties - land (Note-8), located at Gulshan, Plot # 3, Block # CWN (C), Gulshan Avenue,
Gulshan, Dhaka-1212, Municipality Holding # 105, Gulshan Avenue, Gulshan. Area of land is 1 bigha 2 chattaks purchased in
the year 2005 for Bank's own use as per decision of the Board of Directors in its 73rd meeting held on August 23, 2005. The
land is under litigation and possession of the land is yet to be taken. In this connection a provision has been made as per
Bangladesh Bank's instruction (Note-13.2).
42 STATEMENT OF LIQUIDITY
The Liquidity Statement has been prepared in accordance with the remaining maturity grouping of the value of the assets and
liabilities as on 31 December 2020 and under the guidelines of Bangladesh Bank BRPD Circular No.14 dated June 25, 2003.
43 RESTATEMENTS
Wherever considered necessary, Previous year's figures have been rearranged for the purpose of comparison with current
year's presentation without any impact on the profit and value of assets and liabilities as reported in the Financial Statements.
44 Events after the reporting Period
As per IAS 10 “Events after the Reporting Period” are those events favorable and unfavorable, that occurs between the end of
the reporting period and the date when financial statements are authorized for issue. Two types of events can be identified:
Those that provide evidence of conditions that existed at the end of the reporting period (adjusting events after balance
sheet date); and
Those are indicative of conditions that arose after the reporting period (Non-adjusting events after balance sheet date).
(a) The Board of Directors of the company in its meeting held on March 11, 2021 approved the financial statements of
the company for the year ended 31 December 2020 and authorized the same for the issue. The Board of Directors also
recommended 10% Cash and 5% Stock dividend for shareholders only for the year ended 31 December 2020 subject to
approval in the next Annual General Meeting.
(b) There is no other significant event that has occurred between the Balance sheet date and the date when the financial
statements were authorized for issue by the Board of Directors.
Dhaka,

Fixed Assets schedule as at 31 December 2020
392
Annexure-A (Solo)
A. Freehold Property:
Cost Accumulated Depreciation
Additions/ Written down
Sales Rate Adjustment
Particulars Balance as on 1 Revaluation Balance as at Balance as on 1 Charge for Balance as at value at 31 Dec
during the (%) on during
January 2020 during the 31 Dec 2020 January 2020 the year 31 Dec 2020 2020
year the year
year
Land 1,341,807,978 - - 1,341,807,978 Nill - - - - 1,341,807,978

Building 1,118,516,344 - - 1,118,516,344 2.5% 185,608,530 27,824,136 - 213,432,665 905,083,679
Furniture & Fixtures 1,021,739,420 53,063,451 189,504 1,074,613,367 10% 577,222,799 78,250,831 153,517 655,320,113 419,293,254
Office Equipment & Computer
1,338,428,438 76,349,541 11,379,589 1,403,398,391 20% 1,054,388,322 110,594,216 11,366,245 1,153,616,292 249,782,098
Equipment
Vehicles 181,976,090 3,766,888 1,556,800 184,186,178 20% 115,083,891 22,882,706 1,556,797 136,409,800 47,776,378
Books 833,527 - - 833,527 20% 797,190 23,610 - 820,799 12,728
Sub-total 5,003,301,798 133,179,880 13,125,893 5,123,355,785 1,933,100,732 239,575,498 13,076,560 2,159,599,670 2,963,756,115
B. Intangible asset:
Adjustment Rate Balance as on Adjustment
Particulars Balance as on 1 Revaluation Balance as at Charge for Balance s at value at
on during (%) 1 January on during
January 2020 during 31 Dec 2020 the year 31 Dec 2020 31 Dec 2020
the year 2020 the year
the year
Software 495,805,184 117,405,829 - 613,211,013 20% 423,560,380 60,065,868 - 483,626,249 129,584,764
Sub-total 495,805,184 117,405,829 - 613,211,013 423,560,380 60,065,868 - 483,626,249 129,584,764
Balance as at 31 Dec-20: Total (A+B) 5,499,106,982 250,585,709 13,125,893 5,736,566,798 2,356,661,112 299,641,366 13,076,560 2,643,225,918 3,093,340,880
Balance as at 31 Dec'19 5,290,201,444 244,520,963 35,615,425 5,499,106,982 2,001,743,871 387,681,312 32,764,071 2,356,661,112 3,142,445,869
Right Of Use (ROU) Assets as per IFRS-16

Adjustment Rate Balance as on Adjustment Balance
Particulars Balance as on Revaluation Balance as at Charge value at
on during (%) 1 January on during as at
1 January 2020 during the 31 Dec 2020 for the year 31 Dec 2020
the year 2020 the year 31 Dec 2020
year
Right Of Use (ROU) Assets as per
1,646,200,000 210,888,102 - 1,857,088,102 25% 411,550,000 511,550,000 - 923,100,000 933,988,102
IFRS-16
Total 1,646,200,000 210,888,102 - 1,857,088,102 411,550,000 511,550,000 - 923,100,000 933,988,102
Name of the Directors and their Interest in the Bank and other different entities
Annexure-B
Position (as proprietor,

Nature and Value of
No. of Shares held in Bank Name of Firms/Companies in which interested partner, director,
Sl. interest in the firm/
Name and address Designation as proprietor, partner, director, managing agent, managing agent,
No. companies in which
guarantor, employee etc. guarantor, employee
interested
etc.)
31.12.2020 31.12.2019
1 2 3 4 5 6 7
01. MR. MORSHED ALAM, MP Chairman 24,506,619 23,339,638 1. Bengal Windsor Thermoplastics Limited Chairman 11.17%
House no. 12/A, Road no. 63, 2. Bengal Media Corporation Limited Chairman 18.00%
Gulshan-2, 3. Bengal Plastics Limited Chairman 37.50%
Dhaka-1213. 4. Bengal Poly and Paper Sack Limited Chairman 8.19%
5. Bengal Adhesive & Chemical Products Limited Chairman 25.00%
6. Bengal Flexipak Limited Chairman 30.00%
7. Bengal Polymer Wares Limited Chairman 26.00%
8. Bengal Plastic Pipes Limited Chairman 20.00%
9. Romania Food and Beverage Limited Chairman 18.00%
10. Power Utility Bangladesh Limited Chairman 37.00%
11. Hamilton Metal Corporation Limited Chairman 42.00%
12. Bengal Feed & Fisheries Limited Chairman 39.97%
13. Designer Fashion Limited Chairman 20.53%
14. Bengal Retails Limited Chairman 15.00%
15. Bengal Renewable Energy Limited Chairman 15.00%
16. Linnex Technologies Limited Chairman 25.00%
17. Euphoria Apparels Limited Chairman 20.00%
18. Bengal Cement Limited Chairman 12.00%
19. Bengal Structure Development Limited Chairman 50.00%
20. Bengal Hotels and Resorts Limited Chairman 60.10%
21. Mercantile Bank Securities Limited Sponsor Director 0.056%
02. AL-HAJ AKRAM HOSSAIN Sponsor 21,357,210 20,340,200 1. Akram Traders Proprietor 100.00%
(HUMAYUN) Director 2. FARS Holding & Associates Limited Managing Director 25.00%
2/C, Purana Paltan, 3. FARS Hotels & Resorts Limited Managing Director 25.00%
Dhaka. 4. Mercantile Bank Securities Limited Sponsor Director 0.056%
03. MR. M. AMANULLAH Sponsor 24,241,164 23,086,824 1. Aman Spinning Mills Limited Chairman 20.00%
House No.06, Road No. 80, Director 2. Mousumi Enterprises Limited Chairman & MD 50.00%
Gulshan-2, 3. Arena Securities Limited Chairman 10.00%
Dhaka. 4. Arena Industries Limited Chairman & MD 25.00%
5. Arena Consumer Products Limited Chairman 25.00%
6. Daily Amader Shomoy Sponsor Director 10.00%
Annual Report 2020

393
Annexure-B (Cont.)
394
Nature and Value of
interested
etc.)
31.12.2020 31.12.2019
1 2 3 4 5 6 7
04. MR. MD. ANWARUL HAQUE Sponsor 22,181,134 21,124,890 1. Living Plus Limited Managing Director 32.00%
Apartment-4-A, House-45, Director 2. Holiday Travels Limited Director 35.00%

Road-15/A, 3. Premier Leasing & Finance Limited Sponsor Shareholder 0.02%
Dhanmondi R/A, 4. Premier Leasing Securities Limited Director 0.001%
Dhaka. 5. Premier Leasing Securities Broking Limited Director ---
7. Global Insurance Limited Shareholder 0.01%
05. MR. A. S. M. FEROZ ALAM Sponsor 30,807,198 29,340,189 1. Premier Leasing & Finance Limited Sponsor Shareholder 6.09%
Flat no. 08, House no. 211 Director 2. Premier Leasing Securities Limited Chairman 0.001%
Road no. 7, Bashundhara R/A 3. Bengal Trading Limited (Tokyo) Chairman 100.00%
Dhaka 4. Mercantile Bank Securities Limited Sponsor Director 0.056%
5. Saheda Gafur Ibrahim General Hospital Founder Chairman ---
06. MR. MD. ABDUL HANNAN Sponsor 22,496,873 21,425,595 1. Dabster & Associates Limited Chairman 90.00%
190 Arambag, Inner Circular Director 2. Reu Fashion Limited Chairman 50.00%
Road, 3. M.H. Trading Proprietor 100.00%
Dhaka. 4. Murad Apparels Limited Chairman 70.00%
5. Unnayan Engineers & Associates Proprietor 100.00%
6. Unnayan Housing Limited Managing Director 50.00%
7. Global Insurance Limited Shareholder 0.01%
8. Pan Pacific Hospital Limited Director 5.00%
9. Eastern University Director ---
07. MR. A.K.M. SHAHEED REZA Sponsor 48,384,697 47,509,237 1. Allure Apparels Limited Chairman 40.00%
“Surjamukhi” Director 2. Fashion Plus Limited Chairman 30.00%
House no. 2, Road no. 11 3. Reza Fabrics Limited Chairman 25.00%
Sector- 14, Uttara Model Town, 4. Global Insurance Limited Shareholder 0.08%
Dhaka 5. Fashion Exports Proprietor 100.00%
6. Reza Fashions Limited Chairman 25.00%
7. National Credit Ratings Limited Vice Chairman 7.00%
8. Padma Bleaching & Dying Limited Chairman 25.00%
9. Padma Weaving Limited Chairman 25.00%
10. Padma Yarn Mills Limited Chairman 25.00%
11. The Daily Observer Director 7.00%
12. Bangla Radio FM 95.2 Owner 100.00%
13. Mercantile Bank Securities Limited Sponsor 0.056%
14. Reza Dresses Limited Chairman 20.00%
15. Reza Communications Limited Chairman 20.00%
Annexure-B (Cont.)

Nature and Value of
interested
etc.)
31.12.2020 31.12.2019
1 2 3 4 5 6 7
08. MR. MD. NASIRUDDIN Sponsor 19,734,107 18,794,389 1. Technocon Limited Managing Director 80.00%
CHOUDHURY Director 2. Techno-Con Partner 50.00%
‘Kalpaneer’ (Apartment no. 3A), 3. Holiday Travels Limited Chairman 35.00%
House no. 35, Road no. 10/A, 4. Delta Hospital Limited Shareholder 2.15%
Dhanmondi R/A, 5. Premier Leasing & Finance Limited Sponsor shareholder 2.05%
Dhaka-1209. 6. Premier Leasing Securities Broking Limited Chairman ---
7. Mercantile Bank Securities Limited Director 0.056%
8. Premier Leasing Securities Limited Director 0.106%
09. ALHAJ MOSHARREF HOSSAIN Director 23,552,881 22,431,316 1. M/s. M.H. Traders Proprietor 100.00%
1/1 Folder Street, Wari, 2. Toka Ink (BD) Limited Director 5.00%
Dhaka. 3. Eastern Paper House Partner 50.00%
4. Hossain Traders Proprietor 100.00%
5. Mercantile Bank Securities Limited Sponsor 0.056%
10. MR. M. A. KHAN BELAL Director 19,756,537 18,815,751 1. Shamrat Prince Spinning Mills Limited Chairman 50%
26/B, Topkhana Road, 4/B Eastern 2. Shamrat Cold Storage Limited Managing Director 50%
Housing Apartment, Shahbag, 3. Shamrat Ice & Fish Processing Plant Proprietor 100%
Dhaka-1000. 4. Shamrat Commercial Company Limited Managing Director 50%
5. Shandhya Hotel (Residential) Proprietor 100%
6. Shamrat Shipping Lines Proprietor 100%
7. Shamrat Commercial Enterprise Proprietor 100%
8. Morzina Money Changer Proprietor 100%
9. B.M.S Travels Proprietor 100%
10. Shamrat Electronics Managing Partner 50%
11. Prince Trade International Proprietor 100%
12. Shamrat Agro Limited Chairman 35%
13. Shamrat Feed Limited Chairman 35%
14. B.S.P. Corporation Proprietor 100%
15. Zamzam LP Gas Limited Managing Director 40%
16. Mercantile Bank Securities Limited Chairman 0.056%
11. DR. MD. REZAUL KABIR Independent --- --- --- --- ---
Associate Professor Director ---
Coordinator, MBA Program
Institute of Business
Administration (IBA)
University of Dhaka
Dhaka-1000.
Annual Report 2020

395
Investment in Shares/Securities
396
Annexure-C
A. Quoted Share
Closing
Type of Total market value Unrealize Gain/
SL Name of the Company Face Value No of Shares Avg. cost Total cost price
Shares as on 31.12.20 (Loss)
31.12.20
1 Bangladesh Export Import Company Ltd. Quoted 10.00 360,334 85.89 30,947,879 57.00 20,539,038 (10,408,841)
2 Esquire Knit Composite Ltd. Quoted 10.00 5,445 45.00 245,025 26.30 143,204 (101,822)
3 IDLC Finance Ltd. Quoted 10.00 20,737,791 11.24 233,135,524 63.40 1,314,775,949 1,081,640,425
4 IT Consultants Ltd. Quoted 10.00 1,478,076 6.77 10,000,000 32.10 47,446,240 37,446,240

5 LankaBangla Finance Ltd. Quoted 10.00 567,609 44.36 25,177,922 31.40 17,822,923 (7,354,999)
6 Navana CNG Ltd. Quoted 10.00 31,464 110.88 3,488,726 37.10 1,167,314 (2,321,411)
7 National Bank Ltd. Quoted 10.00 327,514 17.49 5,729,116 7.00 2,292,598 (3,436,518)
8 Prime Finance & Investment Ltd. Quoted 10.00 65,956 129.14 8,517,764 12.60 831,046 (7,686,718)
9 RAK Ceramics (Bangladesh) Ltd. Quoted 10.00 127,717 101.64 12,980,620 26.10 3,333,414 (9,647,207)
10 Runner Automobiles Ltd. Quoted 10.00 3,961 71.43 282,927 50.90 201,615 (81,312)
11 Silco Pharmaceuticals Ltd. Quoted 10.00 3,648 9.09 33,169 24.00 87,552 54,383
12 Titas Gas Transmission & Dist. Co. Ltd. Quoted 10.00 69,770 72.84 5,082,290 30.80 2,148,916 (2,933,374)
13 Uttara Bank Ltd. Quoted 10.00 43,642 41.07 1,792,193 24.00 1,047,408 (744,785)
14 Ring Shine Textiles Ltd. Quoted 10.00 1,306 9.37 12,242 6.40 8,358 (3,884)
15 Square Pharmaceuticals Ltd Quoted 10.00 42,000 202.91 8,522,080 219.50 9,219,000 696,920
16 Crystal Insurance Co.Ltd Quoted 10.00 10,879 10.00 108,790 39.40 428,633 319,843
17 Robi Axiata Ltd Quoted 10.00 131,188 10.00 1,311,880 29.80 3,909,402 2,597,522
18 MJL Bangladesh Ltd. Quoted 10.00 5,000 79.42 397,082 76.90 384,500 (12,582)
19 Ashugonj Power Station Co.Ltd (Bond) Quoted 5,000.00 2,000 5,000.00 10,000,000 5,218.50 10,437,000 437,000
Total of Shares (a) 357,765,229 1,436,224,109 1,078,458,881
20 MBL 1st Mutual Fund Quoted 10.00 20,000,000 10.00 200,000,000 7.50 150,000,000 (50,000,000)
Total of Mutual Fund (b) 200,000,000 150,000,000 (50,000,000)
Sub Total (a+b+c) 557,765,229 1,586,224,109 1,028,458,881
B. Un-Quoted Share
Type of Face No of
SL Name of the Company Avg. cost Total cost
Shares Value Shares
1 SWIFT Un-Quoted 26 311,624.17 8,102,228
2 Central Depository Bangladesh Limited (CDBL) Un-Quoted 10.00 1,142,362 4.50 5,138,890
3 Central Counterpaty BD Limited Un-Quoted 3,750,000 10.00 37,500,000
10.00
4 Market Stabilization Fund Asset Management Company Limited Un-Quoted 10.00 200,000 10.00 2,000,000
5 *Lub-rref (BD) Ltd Un-Quoted 10.00 200,000 50.00 10,000,000
6 *Enerypac Power Generation Ltd Un-Quoted 10.00 125,000 40.00 5,000,000
7 Bangladesh Fixed Income Special Purpose Vehicle Un-Quoted 1,000,000,000
Sub Total (B) 1,067,741,118
Grand Total (A+B) 1,625,506,347
*Invested in IPO but trade yet to be started

Adjustment for Approved Securities HTM:

Annexure-D
As per Bangladesh Bank's DOS Circular Letter # 5 dated May 26, 2008 all Government Securities holding by scheduled banks
with effect from July 1, 2008 must be segregated into HTM (Held to Maturity) and HFT ( Held for Trading). HTM securities are to
be amortized at the end of each year and any increase/decrease due such amortization is to be adjusted in the changes in equity
system. HFT securities are to be revalued weekly as per Mark to Market method. Any increase/decrease due to such valuation
(Mark to Market) can not be taken into Profit & Loss account untill sale or maturity rather the same is to be transferred to Reserve
for Revaluation Accounts .
(Amount in BDT)
Market Adjustment on Approved Securities HTM

Balance as on Januray 1, 2020 8,687,652
Less : Adjustment due to Bond Maturity -
Add. Adjustment of Amortization of HTM secutrities 14,367,513
Balance as on 31 December 2020 23,055,166
Reserve for Revaluation (for HFT securities)
Balance as on January 1, 2020 24,866,964

Add adjustment during the year in Mark to market Method on Treasury Bond 31,892,441
Add adjustment during the year in Mark to market Method on Treasury Bill 1,283,593,923
Less adjustment due to Maturity,sale & Repo Treasury Bond 1,050,418
Less adjustment due to Maturity,MTM, sale & Repo Treasury Bill 1,267,168,822
Balance as on 31 December 2020 72,134,087.088
(Market adjustment on Treasury Bond is reported as per DOS circular no.220 Dated. 8 December ,2010.)

398
Certificate obtained by Mercantile Bank Ltd.
under section 33(7) of Artha Rin Adalat Ain, 2003
Non-banking assets: As at 31 December 2020
Annexure-D1
Amount in BDT.
Entitement
SL. Branch Name of Borrower Asset Detailes Market Value
Date

Legal Status
a) 44 decimal land at Mouza- Gosai Gobindapur, P.S: Baliakandi,

Global Business Associates Physical possession
Dist: Rajbari;
1 Banani Branch A.T.M. Shamim-Ul Alam 30-Apr-15 500,000 of the property in
b) 6.66 decimal land at Mouza- Gosai Gobindapur, P.S: Baliakandi,
(Proprietor) under Bank's control
Dist: Rajbari.
SS Trading Corporation a) RM of 17.50 decimal land along with Semipacca building under
Shamimul Islam Siraj. Mouza Loar Shahara, PS. Dhaka Cantonment, Dist. Dhaka.
Physical possession
Banani Branch b) RM of 170.50 decimal land at Dist. Madaripur, PS. – Shibchar,
2 05-Aug-13 4,262,500 of the property in
Mouza Shamail.
under Bank's control
c) RM of 375.00 decimal land at Dist. Madaripur, PS Shibchar,
Mouza- Choto Chowdhurir Bill and Shamail.
Dohar Seed Company,Prop.: Physical possession
3 Kawran Bazar Branch Md. Advocate Abdus RM (3rd party) of land 16.25 Decimal at Bhatara, Gulshan, Dhaka. 25-Nov-08 3,939,394 of the property in
Sobhan under Bank's control
Physical possession
Shahinoor Enterprise, Prop: a). 2.56 Katha Land with semi pucca building at Badda;
4 Main Branch 20-Jul-06 3,400,800 of the property in
Mr. Md. Mojibur Rahman b). 10 Katha Land at Badda.
Sarker Traders Physical possession

5 Naogaon Branch Sushant Sarker a) 21.86 decimal land at Naogaon. 22-Jun-10 983,700 of the property in
RM of decimal 43.73 decimal land (10.75 decimal land at Mouza- Physical possession
6 Rajshahi Branch Taj Enterprise Mohanonda Khali, PS-Poba, Dist-Rajshahi and 33.00 decimal land at 07-Jul-15 1,976,000 of the property in
Mouza-Sundolpur, PS-Poba, Dist.-Rajshahi) under Bank's control
RM of 261.75 decimal land (256.5 decimal land at Mouza-Bagdhani, Physical possession

7 Rajshahi Branch M/S Sayed Traders PS-Poba, Dist.-Rajshahi and 5.25 decimal land at Mouza-Nowhata, PS- 24-May-15 10,242,000 of the property in
Poba, Dist.-Rajshahi) under Bank's control
Total 25,304,394
Maturity Analysis of Other Assets
Annexure-E
(Amount in Taka)
Particulars Total
1 2 3 4 5 6 7
Other assets should be classified under the following categories:
Income generating other asset:
Investment in shares of subsidiary companies(In Bangladesh) Mercantile
- - - - 3,550,000,000 3,550,000,000
Bank Securities Limited
Investment in shares of subsidiary companies(outside Bangladesh)
- - - - 39,311,270 39,311,270
Mercantile Bank OBU Unit 4,864,732,746 - - - - 4,864,732,746
MBL Asset Management Limited 56,000,000 56,000,000
No-Income generating other asset: -
Stationery, stamps,printing materials in stock etc 9,045,000 8,045,000 11,422,872 - - 28,512,872
Advance rent and advertisement - - - - -
Interest accued on investment but not collected,commission and brokerage
983,000,000 2,294,864,960 - - 3,277,864,960
Security deposit - - - - 8,699,164 8,699,164
329,422,734 305,557,568 - 634,980,302
Branch adjustment 174,884,670 - - - - 174,884,670
Suspense Account - 567,782,878 91,056,720 181,500,000 - 840,339,598
Right Of Use (ROU) Assets as per IFRS-16 - - - - 933,988,102 933,988,102
Silver - - - - - -
Clearing adjustment account - - - - - -
Intra company transaction (OBU) (4,864,732,746) - - - - (4,864,732,746)
Total amount in taka 1,166,929,670 3,200,115,572 408,037,160 181,500,000 4,587,998,536 9,544,580,938
Annual Report 2020

399
Highlights of Mercantile Bank Limited
Annexure-F
(BDT in crore)
SL # Particulars 31.12.2020 31.12.2019 31.12.2018 31.12.2017 31.12.2016
1 Paid-up Capital 984.02 937.16 814.92 776.11 739.16
2 Total Capital Fund 3,341.95 3,289.98 2,948.63 2,458.14 2,236.72
3 Capital Surplus / deficit 273.37 334.83 312.82 139.74 412.36
4 Total Assets 33,078.56 31,636.35 29,138.56 26,016.99 20,412.75
5 Total Deposits 24,526.57 24,762.45 22,990.73 22,051.66 15,608.58
6 Total Loans and Advances 24,899.44 23,689.04 22,423.06 19,966.07 15,091.25
7 Total Contingent Liabilities and Commitments 10,811.23 10,199.37 10,456.95 11,475.71 8,169.78
8 Credit Deposit Ratio (in %) 84.30% 84.10% 86.30% 84.25% 85.15%
Percentage of Classified Loans against Total
9 4.72% 4.86% 4.82% 3.79% 5.13%
Loans and Advances (in %)
10 Profit after Tax and Provision 216.13 217.55 300.09 301.77 222.74
11 Amount of Classified Loans during the year 1,175.12 1,150.26 1,080.24 756.47 774.59
12 Provision kept against classified Loans 488.26 452.00 476.39 396.75 311.71
13 Provision Surplus - - - - 0.40
14 Cost of Fund (in %) 5.66% 6.35% 6.06% 5.38% 5.72%
15 Interest Earning Assets 30,216.45 29,119.53 26,735.89 22,969.87 16,978.44
16 Non-interest Earning Assets 2,862.10 2,516.82 2,402.68 3,047.12 3,434.31
17 Return on Equity (ROE) (in %) 10.05% 10.99% 16.55% 17.55% 13.78%
18 Return on Assets (ROA) (in %) 0.67% 0.72% 1.09% 1.30% 1.15%
19 Income from Investment 413.90 382.89 355.89 345.11 293.19
20 Earning Per Share (Tk.) 2.20 2.32 3.68 3.89 3.70
22 Net Income Per Share (Tk) 2.20 2.32 3.68 3.89 3.70
23 Return on investment (ROI) 8.39% 8.63% 9.65% 9.01% 8.91%
24 Net assets value per share (NAVPS) 22.46 22.31 22.93 22.66 22.74
25 Cost of deposit (%) 6.12% 6.92% 6.47% 5.85% 6.25%
26 Price Earning Ratio 5.78 Times 5.69 Times 4.89Times 6.79 Times 5 Times


Offshore Banking Division
Balance Sheet
As on December 31, 2020 Annexure-G
December-2020 December-2019
Particulars Notes
USD Taka (84.8004) USD Taka (84.9000)
Property and Assets:
Cash: - - - -
Cash in Hand - - - -
Balance with Bangladesh Bank
Balance with other Banks and
4
Financial Institutions
In Bangladesh 7,857,684.36 666,334,777 7,144,745.31 606,588,877
Outside Bangladesh 3,370.85 285,849 12,147.75 1,031,344
Money at Call and Short Notice:

Investments
Loans and Advances: 5

Loans, Cash Credit, Overdraft etc. 2,315,672.78 196,369,978 2,213,496.64 187,925,865
Time Loans 5,482,583.46 464,925,270 5,451,841.10 462,861,309
Term Loans 57,034,781.02 4,836,572,244 58,631,858.73 4,977,844,806
Bills Purchased & Discounted 85,023,763.01 7,210,049,113 75,383,256.89 6,400,038,510
Fixed Assets including premises,
6 1,961.62 166,346 685.97 58,239
furniture and fixtures
Other Assets 7 2,619,163.03 222,106,073 2,649,160.75 224,913,748
Non-Banking Assets
Total Assets: 160,338,980.13 13,596,809,650 151,487,193.14 12,861,262,698
Liabilities and Capital :
Liabilities:
Borrowings from Banks, Financial
8 154,364,537.30 13,090,174,509 146,118,224.92 12,405,437,296
institutions and Agents
- - - -
Deposit and Other Accounts: - - - -
Current Deposits and Other Accounts 9 - - 24.75 2,101
Fixed Deposits - - - -
Term Deposits 10 - - - -
Other Liabilities 11 1,733,688.23 147,017,455 929,257.62 78,893,972
Total Liabilities 156,098,225.53 13,237,191,964 147,047,507.29 12,484,333,369
Capital/Shareholders' Equity:
Retained Earnings carried forward from
previous year
Surplus in Profit & Loss Account 4,240,754.60 359,617,686 4,439,685.85 376,929,329
Total Liabilities and Shareholders'
160,338,980.13 13,596,809,650 151,487,193.14 12,861,262,698
Equity:
Off-Balance Sheet Items
Other Commitments:
Corporate Import Commitment under
12 19,314,745.75 1,637,898,165 17,873,856.81 1,517,490,443
Contract

For the Year Ended on December 31, 2020
Particulars Notes
USD Taka (84.8004) USD Taka (84.9000)
Interest Income 13 7,078,750.88 600,280,906 8,122,549.42 689,604,446
Less: Interest paid on Deposits,
14 3,656,667.28 310,086,848 4,204,794.26 356,987,033
Borrowings etc.
Net Interest Income 3,422,083.60 290,194,058 3,917,755.16 332,617,413
Investment Income
Commision, Exchange and Brokerage 962,788.86 81,644,880 657,117.96 55,789,315
Other Operating Income 15 36,760.00 3,117,263 24,995.00 2,122,076
Miscellaneous Earnings 1,831.48 155,310 14,855.38 1,261,222
Adjustment for Exchange Rate
- - - -
Fluctuation
Total Operating Income 4,423,463.94 375,111,511 4,614,723.50 391,790,026
Salary and Allowances 16 179,912.54 15,256,655 170,816.42 14,416,899

Rent, Taxes, Insurances, Electricity etc. - - - -
Postage, Stamps, Telecommunication
85.06 7,213 12.72 1,080
etc.
Depreciation and repair of Fixed Assets 17 993.86 84,280 406.00 34,469
Other Expenses-Fees For Nostro
1,717.88 145,677 3,802.51 322,833
Aaccount
Adjustment for Exchange Rate
18 - - - 85,416
Fluctuation
Profit Before Provision 4,240,754.60 359,617,686 4,439,685.85 376,929,329
Provision against Classified Loans
Provision against Unclassified Loans
Other Provision
Total Provision
Total Profit before Taxes 4,240,754.60 359,617,686 4,439,685.85 376,929,329
Provision for Taxation
Net Profit after Taxation 4,240,754.60 359,617,686 4,439,685.85 376,929,329
** Provisions would be calculated with central operation
*** Taxes would be calculated with central operation


For The Year Ended on December 31, 2020
1 Mercantile Bank Limited is operating two Off-Shore Banking units as a separate business unit under the Rules and Guidelines
of Bangladesh Bank as per the permission vide letter no. BRPD(P-3)744(114)/2010-1743 dated May 04, 2010. The Bank
commenced operation of these units from July 04, 2010. The permission has already been revalided by Bangladesh Bank
vide their letter BRPD(P-3)744(114)/2020-1654 dated February 12, 2020. Name and location of existing OBUs has been
changed based on approval from Bangladesh Bank vide their letter BRPD(P-3)745(44)/2020-1655 dated February 12, 2020
and renamed the OBUs as Principal Offshore Banking Unit (Principal OBU) at Head Office, Dhaka and Agrabad Offshore
Banking Unit (Agrabad OBU), Chattogram.
2 Significant Accounting Policy
Basis of Accounting:
The Unit maintains its accounting records in USD form which accounts are prepared according to the Bank Companies
Act 1991, Bangladesh Financial Reporting Standards (BFRS), Bangladesh Accounting Standards (BAS) and other applicable
directives issued by Bangladesh Bank.
3 Common Expenses:
a. Establishment expenses have not been separately accounted for in the Financial Statements.
b. Provision for taxation, loans & advances and Off-Balance Sheet items have not been separately accounted for in the
c. These are accounted for consolidation in the central accounts of Mercantile Bank Limited
USD Taka (84.8004) USD Taka (84.9000)
Balance with other Banks and Financial
4
Institutions
In Bangladesh 7,857,684.36 666,334,777 7,144,745.31 606,588,877
[Profit of OBU accumulated
[Profit of OBU accumulated
in Balance with ID. The above
in Balance with ID. The above
figure includes profit for 2020.
figure includes profit for 2019.
After transfer of profit (USD
After transfer of profit to Parent
4,240,754.60) to Parent Bank,
Bank, Balance with other bank is
Balance with other bank is
2,705,059.46 (HO OBU 929,075.51,
3,616,929.76 (Principal OBU
Gulshan OBU 1,749,717.36 and
3,448,767.63 and Agrabad OBU
CEPZ OBU 26,266.59)].
168,162.13)].
Outside Bangladesh (With JP Morgan Chase
3,370.85 285,849 12,147.75 1,031,344
Bank, NY)
7,861,055.21 666,620,626 7,156,893.06 607,620,221
5 Loans & Advances

Loans, Cash credit etc.
Overdrafts 2,315,672.78 196,369,978 2,213,496.64 187,925,865
Time Loans 5,482,583.46 464,925,270 5,451,841.10 462,861,309
Term Loans 57,034,781.02 4,836,572,244 58,631,858.73 4,977,844,806
Bill Purchased and Discounted (Export) 7,332,124.25 621,767,069 10,209,849.55 866,816,227
Bill Purchased and Discounted (Foreign) 77,691,638.76 6,588,282,044 65,173,407.34 5,533,222,283
149,856,800.27 12,707,916,605 141,680,453.36 12,028,670,490

Fixed Assets including Premises, Furniture and
6
Fixtures
Software - - - -
Computer, Printer & Peripherals 831.53 70,514 313.45 26,612
Air Conditioner 1130.09 95,832 - -
Furniture & Fixture - - 372.52 31,627
1,961.62 166,346 685.97 58,239

USD Taka (84.8004) USD Taka (84.9000)
7 Other Assets
Interest Receivable 2,614,997.17 221,752,806 2,645,767.09 224,625,626
Prepaid Expense (House Furnishing Allowance) 165.86 14,065 245.86 20,874.00
Prepaid Expense (Mobile Set Purchase) - - 147.80 12,548.00
Fees Receivable (Rebate of Nostro Account) 4,000.00 339,202 3,000.00 254,700.00
2,619,163.03 222,106,073 2,649,160.75 224,913,748
Borrowing from other Banks, Financial

8
Institutions and Agents
In Bangladesh
Mercantile Bank Limited (Own Borrowing) 57,366,860.84 4,864,732,746 49,455,479.52 4,198,770,211
Other Banks in Bangladesh - - 8,000,000.00 679,200,000.00
Outside Bangladesh (Foreign Bank) 96,997,676.46 8,225,441,763 88,662,745.40 7,527,467,085
154,364,537.30 13,090,174,509 146,118,224.92 12,405,437,296

Borrowing from Local Banks in Bangladesh
8.1
through Treasury Division
BRAC Bank Ltd. - - 5,000,000 424,500,000
Jamuna Bank Ltd. - - 3,000,000 254,700,000
- - 8,000,000 679,200,000
Ageing of Borrowing from Local Banks in
8.2
Bangladesh as on 31.12.2020
Ageing 0-1 Month >01-03 Month >03-06 Month Total
USD -
BDT
- - -
(84.9500)
9 Deposit and Other Accounts:
Current Deposit
Fixed Deposit
Foreign Currency Deposit FCAD (Gen) - - 24.75 2,101
- - 24.75 2,101
10 Term Deposits and Other Accounts:

Term Deposits procured from various local Banks
in BD:
Rupali Bank Ltd. - - - -
- - - -
11 Other Liabilities
Accrued Interest
Payable to Head Office
Intt. Payable on Borrowing/Adjusting A/C Cr. 1,255,515.51 106,468,217 929,257.62 78,893,972
Intt. Suspense A/C 478,172.72 40,549,238
1,733,688.23 147,017,455 929,257.62 78,893,972
12 Off-Balance Sheet Items

Corporate Import Commitment favoring BHF
Bank, Germany on behalf of GPH Ispat Ltd.
19,314,745.75 1,637,898,165 17,873,856.81 1,517,490,443
under Export Credit Agency (ECA) through
Syndication under lead arrangement of UCBL.


USD Taka (84.8004) USD Taka (84.9000)
13 Interest Income
Interest on Advances 7,078,750.88 600,280,906 8,122,549.42 689,604,446
Interest on Money at Call and Short Notice
Interest on fund placement with Head Office
Interest on foreign Currency Balances
7,078,750.88 600,280,906 8,122,549.42 689,604,446
14 Interest paid on Deposit, Borrowings etc.

Interest on Deposit
Interest paid on Borrowings from own Bank 604,888.68 51,294,802 692,151.98 58,763,703
Interest paid on Borrowings from Other Banks 3,051,778.60 258,792,046 3,512,642.28 298,223,330
Interest on REPO
3,656,667.28 310,086,848 4,204,794.26 356,987,033

Investment Income
Commission, Exchange Gain & Brokerage
962,788.86 81,644,880 657,117.96 55,789,315
(Arrangement Fee)
Other Operating Income/Foreign Correspon.
36,760.00 3,117,263 24,995.00 2,122,076
Charge
Miscellaneous Earnings 1,831.48 155,310 14,855.38 1,261,222
1,001,380.34 84,917,453 696,968.34 59,172,613
USD (Taka at Actual) USD (Taka at Actual)

Salary and Allowances, Rent, Taxes, Insurances,
16
Electricity etc.
Basic Salary 78,429.46 6,650,850 72,148.54 6,096,282
House Rent 28,105.62 2,383,368 28,780.41 2,431,800
Medical Allowances 8,722.80 739,697 8,713.34 736,450
Conveyance Allowance 2,650.82 224,791 3,099.48 261,700
House Maintenance Allowances - - 2,778.89 233,775
Utility Services - - 2,778.87 233,775
Provident Fund 7,843.00 665,090 7,235.01 611,328
Car Allowances 8,483.06 719,367 4,305.65 349,903
Leave Fare Assistance 30,219.19 2,562,599 26,876.61 2,270,500
Bonus 14,287.14 1,211,555 12,959.55 1,095,000
Other Allowance (Allowance for Leave Days &
678.72 57,556 - -
Nobobarso)
Telephone Bill 400.01 33,921 881.68 74,521
Newspaper Bill 12.72 1,079 50.46 4,248
House Furnishing Allowances 80.00 6,784 207.93 17,617
179,912.54 15,256,655 170,816.42 14,416,899
17 Depriciation on fixed Assets

Software - - -
Computer, Printer & Peripherals 993.86 84,280 340.00 28,866
Furniture & Fixture - - 66.00 5,603
993.86 84,280 406.00 34,469

18 Different expenditure such as salary & allowances, telephone bill, newspaper bill, bonus, postal charge etc are paid by BDT
which are booked at Our OBU books of accounts by converting in to USD using prevelling exchange rate at the date when
such expenditure encured. As a result, difference arises due to exchange rate fluctuation. Details are enumarated below:
USD Taka at Actual USD Taka at Actual
A Salary and Allowances 179,912.54 15,256,655 170,816.42 14,416,899
Salary and Allowances at BDT using
B 15,256,655 14,502,315
conversion rate as on B/S Date.
Difference (Effect for Exchange Rate
(A-B) 0 (85,416)
Fluctuation)
* Provision will be calculated with the central accounts

* Taxes are computed with the central operation
* Depreciation has been charged @ 20% on Office Equipments & Machineries and @10% p.a. on Fixtures and furniture.


Islamic Banking
Balance Sheet
As at 31 December 2020 Annexure-H
31.12.2020 31.12.2019
Notes
Taka Taka
PROPERTY AND ASSETS
Cash 1
Cash in hand (including foreign currencies) 1.1 14,662,696
Balance with Bangladesh Bank and its agent bank(s) (including foreign currencies) 1.2 67,200,000
81,862,696
Balance with other banks and financial institutions 2
In Bangladesh 2.1 200,000 -
- -
Placement with banks and other financial institution - -
Investments in Shares and Securities 3
Government 3.1 43,200,000 -
Others - -
- -
Investments 4
General Investments etc. 4.1 200,150 -
Bills purchased and discounted - -
- -
Fixed assets including premises 5 9,505,524 -
Other assets 6 479,393,347
Non-banking assets -
-
Total Assets: 614,361,716
Liabilities:
Placement from banks and other financial institutions - -
Deposits and other accounts:
Al-wadeeah Current Accounts and Other Deposit Accounts 8,963,260
Mudaraba Savings Deposits 22,604,871
Mudaraba Term Deposits 556,264,869
Other Mudaraba Deposits 37,911,038
Bills Payable -
625,744,039 -
Other liabilities 7 5,470,560 -
Total Liabilities: 631,214,599 -
Capital/Shareholders' Equity
Paid up Capital
Foreign Currency Translation Difference
Statutory Reserve -
Other Reserve
Retained Earnings (16,852,883)
Total Shareholders' Equity (16,852,883)
Total Liabilities and Shareholders' Equity 614,361,716 -

Islamic Banking
For the period from 29 June 2020 to 31 December 2020
29 June 2020
to 31 December 31.12.2019
Notes 2020
Taka Taka
Investment Income - -
Profit paid on deposits 10,320,603 -
Net Investment Income (10,320,603) -
Income from investments in Shares/Securities - -
Commission, exchange and brokerage - -
Other operating income 8 41,116 -
41,116 -
Total operating income (10,279,488) -
Salaries and allowances 9 4,744,045 -
Rent, taxes, insurance, electricity, etc. 12,000 -
Legal expenses 93,550 -
Postage, stamps, telecommunications, etc. 4,502 -
Stationery, printing, advertisement etc. 270,434 -
Chief Executive's Salary & Fees - -
Directors' Fees and Expenses 10 136,000 -
Shariah SupervisoryCommittee's Fees ad Expenses - -
Auditors' Fees - -
Changes in Investment Losses - -
Depreciation and repair to bank's assets 11 482,694 -
Zakat Expenses - -
Other expenses 12 830,170 -
Total operating expenses 6,573,395 -
Profit/(Loss) before provision (16,852,883) -
Provision for loans & advances / Investments - -
Provision for Diminution in value of Investment - -
Other provision - -
- -
Total Profit/(Loss) before Taxes (16,852,883) -


Islamic Banking
29 June 2020
Notes 2020
Taka Taka
1 Cash
Cash in hand (including foreign currencies) 1.1 14,662,696 -
Balance with Bangladesh Bank & its agent bank(s) (including foreign currency) 1.2 67,200,000 -
81,862,696 -
1.1 Cash in hand (including foreign currencies):
In local currency 14,662,696 -
In foreign currency - -
14,662,696 -
1.2 Balance with Bangladesh Bank & its agent bank(s) (including foreign currency)
In local currency 67,200,000 -
In foreign currency - -
67,200,000 -
2 Balance with other banks and financial institutions
In Bangladesh 2.1 200,000 -
Outside Bangladesh -
200,000 -
2.1 In Bangladesh
with Islami Bank Bangladesh Ltd 100,000 -
with Shahjalal Islami Bangladesh Ltd 100,000 -
200,000 -
Placement with banks and other financial institution, Investments in
3
Shares and Securities
Government 3.1 43,200,000 -
Others - -
43,200,000 -
3.1 Government
BGIIB 30,000,000 -
SUKUK 13,200,000 -
43,200,000 -
Fixed assets including premises, Furniture and Fixtures-at cost less
5
Accumulated Depreciation (Annexure-A):
Furniture & Fixture 751,701 -
Office equipment 8,753,823 -
9,505,524 -
6 Other Asset
Printing Stationery 299,175 -
Security Papers 570,650 -
Branch Adjustments 478,523,521 -
479,393,346 -
7 Other Liabilities
Total Other Liability 7.1 5,470,560 -

29 June 2020
Notes 2020
Taka Taka
5,470,560 -
7.1 Profit payable on mudaraba deposit
Profit payable on Mudaraba SB A/C 114,288 -
Profit payable on Mudaraba Term Deposit A/C 4,845,649 -
Profit payable on Mudaraba Scheme Deposit A/C 510,623 -
5,470,560 -
Service Charge & Fee 41,116 -
41,116 -
9 Salaries and allowances:
Basic Salary 2,180,355 -
Bonus 369,000 -
Bank Contribution to Provident Fund 218,035 -
House Rent 699,497 -
Conveyance Allowance 45,000 -
Medical Allowance 222,778 -
Special Allowance 300,757 -
Car Allowance 705,323 -
Other Allowance 3,300 -
4,744,045 -
10 Directors' Fees and Expenses

Directors' Fees 136000 -
136,000 -
11 Depreciation and repair to bank's assets
Depreciation on Fixed asset (Annexure-A) 339,694 -
Repair Furnitur & Fixture 137,600 -
Repair Office Equipment 5,400 -
482,694 -
12 Other Expense
Refreshment 40,552 -
Local Conveyance 2,610 -
Leave Fare Assistance 786,758 -
Laundry & Cleaning 250 -
830,170 -

Islamic Banking Division
Schedule of Property, Plant and Equipment
Annexure-A
Amount in Taka
Cost Depreciation
Written
Adjustment/ Adjustment/ Down
Particulars Rate % Balance Charged Balance
Balance as on Addition During Disposal Balance as on Disposal Value as on
as on during the as on
01.01.2020 the period during the 31.12.2020 during the 31.12.2020
01.01.2020 period 31.12.2020
period period
Furniture & Fixture - 776,118 - 751,701 10% - 24,417 - 24,417 751,701
Office Equipment - 9,069,100 - 8,753,823 20% - 315,277 - 315,277 8,753,823
As at 31 December 2020 - 9,845,218 - 9,505,524 - - 339,694 - 339,694 9,505,524
As at 31 December 2019 - - - - - - - - - -
Annual Report 2020

411
412
Segment Reporting
The Bank reports its operations under the following business segments as per International Financial Reporting Standarads (IFRS) 8 ‘’ Operating Segment”
Amount in Taka
Mercantile Bank Limited and
its Subsidiaries
Outside Inter
Inside Bangladesh Inside Bangladesh Total
Particulars Bangladesh company
Consolidated
MBL Asset transaction
Conventional Islamic Off Banking Inter

Total MBSL Management UK
Banking Banking Unit (OBU) company
Ltd.
Property and Assets
Cash in hand 15,422,122,534 81,862,696 - - 15,503,985,230 117,242 467 528,910 - 15,504,631,849
Balance with other banks
4,114,947,687 200,000 666,620,626 (359,617,686) 4,422,150,627 371,357,195 18,762,329 472,164 (204,122,749) 4,608,619,568
and financial institutions
Money at call and short
248,100,000 - - 248,100,000 - - - - 248,100,000
notice
Investments 48,910,512,794 43,200,000 - - 48,953,712,794 1,173,148,701 85,577,335 - - 50,212,438,830
Loans and Advances/
236,286,269,121 200,150 12,707,916,605 - 248,994,385,876 4,173,598,296 - (503,649,573) 252,664,334,599
investments
Fixed assets including
premises, furniture and 3,083,669,010 9,505,524 166,346 3,093,340,880 9,356,190 400,247 6,374,956 - 3,109,472,273
fixtures
Other assets 13,707,814,265 479,393,346 222,106,073 (4,864,732,746) 9,544,580,938 180,131,532 2,379,843 8,184,326 (3,644,898,890) 6,090,377,750
Non- banking assets 25,304,394 - - 25,304,394 - - - 25,304,394
Total Property and
321,798,739,805 614,361,716 13,596,809,650 (5,224,350,432) 330,785,560,739 5,907,709,157 107,120,222 15,560,357 (4,352,671,211) 332,463,279,263
Assets
Liabilities and Capital
Liabilities
Borrowings from other
banks, financial institu- 29,846,244,935 - 13,090,174,509 (4,864,732,746) 38,071,686,698 631,967,708 - - (503,649,573) 38,200,004,834
tions and agents
Subordinated bond 3,600,000,000 - - 3,600,000,000 - - - - 3,600,000,000
Deposits and other
244,639,967,011 625,744,039 - (1,696) 245,265,709,354 158,657,447 - (204,122,749) 245,220,244,052
accounts
Other Liabilities 21,593,899,592 5,470,560 147,017,455 21,746,387,607 1,438,431,831 2,463,000 7,216,545 - 23,194,498,983
Total Liabilities 299,680,111,538 631,214,599 13,237,191,964 (4,864,734,442) 308,683,783,660 2,229,056,986 2,463,000 7,216,545 (707,772,321) 310,214,747,869
Total shareholders' equity 22,118,628,266 (16,852,883) 359,617,686 (359,615,990) 22,101,777,079 3,678,652,171 104,657,221 8,343,812 (3,644,898,890) 22,248,531,393
Total Liabilities &
321,798,739,804 614,361,716 13,596,809,650 (5,224,350,432) 330,785,560,739 5,907,709,155 107,120,222 15,560,357 (4,352,671,211) 332,463,279,263
Shareholders' Equity
Segment Reporting
The Bank reports its operations under the following business segments as per International Financial Reporting Standarads (IFRS) 8 ‘’ Operating Segment”
Amount in Taka
Mercantile Bank Limited and
its Subsidiaries
Outside
Inside Bangladesh Inside Bangladesh Inter
Bangladesh Total
Particulars MBL Asset company
Consolidated
Conventional Islamic Off Banking Inter Management transaction
Total MBSL UK
Banking Banking Unit (OBU) company Ltd.
Interest income 18,787,913,454 - 600,280,906 19,388,194,360 77,066,610 5,560,069 - - 19,470,821,039

Less: Interest paid on
16,411,814,279 10,320,603 310,086,848 16,732,221,730 4,657,853 - - - 16,736,879,584
deposits, borrowings etc.
Net interest income 2,376,099,175 (10,320,603) 290,194,058 - 2,655,972,630 72,408,757 5,560,069 - - 2,733,941,455
Investment income 4,139,008,020 - - 4,139,008,020 24,837,175 166,750 - - 4,164,011,945

Commission, exchange
2,124,699,846 - 81,644,880 2,206,344,726 93,605,202 - 11,616,288 - 2,311,566,216
and brokerage
Other operating income 1,538,928,136 41,116 3,272,573 1,542,241,824 25,055,541 - 5,223,711 - 1,572,521,076
7,802,636,001 41,116 84,917,453 - 7,887,594,570 143,497,918 166,750 16,840,000 - 8,048,099,237
Total operating income 10,178,735,177 (10,279,488) 375,111,511 - 10,543,567,200 215,906,674 5,726,819 16,840,000 - 10,782,040,692
Salaries and allowances 3,014,219,243 4,744,045 11,875,350 3,030,838,637 29,465,782 152,661 10,004,965 - 3,070,462,045
Rent, taxes, insurances,
386,921,811 12,000 - 386,933,811 8,259,099 - 7,196,654 - 402,389,563
electricity etc.
Legal expenses 21,350,113 93,550 - 21,443,663 3,779 243,368 631,140 - 22,321,950
Postage, stamps,
64,584,322 4,502 7,213 64,596,037 1,691,897 - 144,615 - 66,432,549
telecommunication etc.
Stationery, printings,
254,516,620 270,434 - 254,787,054 557,887 68,619 379,937 - 255,793,497
advertisements etc.
Chief Executive's salary
13,087,517 - 13,087,517 - - - - 13,087,517
and fees
Directors' fees 4,461,600 136,000 - 4,597,600 1,012,500 96,000 - - 5,706,100
Auditors' fees 1,207,500 - 1,207,500 115,000 25,000 556,428 - 1,903,928
Depreciation and repair
893,545,695 482,694 84,280 894,112,670 3,461,496 18,463 953,812 - 898,546,442
to Bank's assets
Other expenses 1,919,868,718 830,170 3,526,983 1,924,225,870 32,171,169 212,725 3,899,916 - 1,960,509,681
Total operating
6,573,763,139 6,573,395 15,493,825 - 6,595,830,359 76,738,609 816,836 23,767,467 - 6,697,153,272
expenses
Profit/(loss) before
3,604,972,038 (16,852,883) 359,617,686 - 3,947,736,841 139,168,066 4,909,982 (6,927,468) - 4,084,887,421
provision
Provision for loans and

advances including off 537,413,227 537,413,227 40,000,000 - - - 577,413,227
Balance Sheet items
Other provision 699,000,000 699,000,000 - - - - 699,000,000
Total provision 1,236,413,227 - - - 1,236,413,227 40,000,000 - - - 1,276,413,227
Total profit/(loss) before
Annual Report 2020

2,368,558,810 (16,852,883) 359,617,686 - 2,711,323,613 99,168,066 4,909,982 (6,927,468) - 2,808,474,193
taxes
Provision for Current tax 568,340,435 568,340,435 24,800,954 1,595,744 - - 594,737,133

413
Provision for Deferred Tax (18,340,435) (18,340,435) 745,844 - - - (17,594,591)
550,000,000 - - - 550,000,000 25,546,798 1,595,744 - - 577,142,542
Net profit after taxation 1,818,558,810 (16,852,883) 359,617,686 - 2,161,323,613 73,621,268 3,314,238 (6,927,468) - 2,231,331,651
Annual Report 2019
Annexure-H
Independent Auditor’s Report to The Shareholders
INDEPENDENT of
AUDITOR’S REPORT TO
Mercantile Bank SecuritiesOF
THE SHAREHOLDERS Limited
Mercantile Bank Securities Limited Annexure-I
Report on the audit of the Financial Statements
Report on the audit of the Financial Statements 1994, the Securities and Exchange Rules 1987 and other
applicable Laws and Regulation and for such internal control
Opinion Opinion and our auditor’s report thereon. The Those charged with governance
as to
annual report is expected management
be made aredetermines
responsibleis for
necessary to enable the
overseeing
We have audited the financial
We have audited the of
statements financial statements
Mercantile Bank Mercantile
ofauditor’s preparation
available to us after the date of thisof financial statements
the Company’s that are
financial free from material
reporting
report. process.
Securities Limited, which comprise
Bank Securities Limited, which comprise the statement of misstatement, whether due to fraud or error.
the statement of financial position Our opinion on the financial Auditor’s Responsibilities
financial position as at 31 December 2020,
as at 31 December 2019, and the and the statement
statements does not coverIn preparing
the other thefor financial
the audit statements,
of the financialmanagement is
of profit or loss and other
statement comprehensive
of profit income,
or loss and other statement
information and we do not express statements
comprehensive income, statement of responsible for assessing
any form of assurance conclusion
the Company’s ability to continue
of changes in equityinand statement of cashofflows for the year
changes equity and statement thereon. as a going concern, Our disclosing,
objectives asareapplicable,
to obtainmatters related
then ended, cash
and notes to the
flows for the financial
year then statements,
ended, including a
and notes to the financial statements, to going concern
In connection with our audit of the
and using
reasonable the about
assurance goingwhether
concern basis of
summary of including
significant accounting policies. the financial statements as a whole
a summary of significant financial statements, ouraccounting unless
responsibility aremanagement either
free from material intends to liquidate the
misstatement,
accounting policies. is to read the other information and, in
In our opinion, the accompanying financial statements give company or to cease operations,
whether due to fraudor has no realistic
or error, and to alternative
doing so, consider whether the other issue an auditor’s report that includes
In our opinion, the accompanying
a true and fair view, in all material respects, ofinformation
the financial but
is materially in to do so.
consistent our opinion. Reasonable assurance is
financial statements give a true and with the financial statements of our
position of the company
fair view, as at 31
in all material December
respects, of the 2020, and of its a high level of assurance, but is not
knowledge obtained in Those charged
the audit or with governance
a guarantee areaudit
that an responsible
conductedfor overseeing
financial performance andofits
financial position thecash
companyflows
as atfor the year then
otherwise appears to be materially
31 December 2019, and of its financial the Company’s financial reporting
in accordance process.
with International
ended in accordance
performancewith and International
its cash flows Financial
for Reporting
misstated. Standards on Auditing (ISAs) will
always detect a material misstatement
Standards (IFRSs).
the year then ended in accordance Auditor’s Responsibilities for the audit of the financial
when it exists. Misstatements can
with International Financial Reporting Responsibilities ofstatements
arise from fraud or error and are
We conducted our audit
Standards (IFRSs). in accordance with Management International of Those considered.
Charged with Governance for
Standards onWe Auditing (ISAs). Our
conducted our responsibilities
audit in under those Our objectives are to obtain reasonable assurance about
the Financial Statements As part of an audit in accordance
standards areaccordance
further described with in the Auditor’s Responsibilities
International whether the financial statements
with ISAs, we exerciseas aprofessional
whole are free from
Standards on Auditing (ISAs). Our
for the Auditresponsibilities
of the Financial Statements
under those standards section of our report.
Management of material
Mercantile misstatement,
Bank judgement whether due
and maintain to fraud or error, and to
professional
Securities Limited is responsible for skepticism throughout the audit. We
We are independent
are furtherof the Company
described in accordance
in the Auditor’s with the issue an auditor’salso:
report that includes our opinion. Reasonable
Responsibilities for the Audit of the the preparation and fair presentation
InternationalFinancial
Ethics Standards Board of Accountants’
Statements section of our of the Code assurance isina high level of assurance, but is not a guarantee
Identify and assess the risks of
of Ethics for report.
Professional
We areAccountants
independent of (IESBA
the Code) together with that
accordance an audit conducted
International in accordance with International
material misstatement of the
Company in accordance with the Financial Reporting Standards
with the ethical requirements that are relevant to(IFRSs), our audit of Standards
the Companies Act 1994, on Auditing (ISAs)
financial will alwayswhether
statements, detect a material
International Ethics Standards Board
the FinancialofStatements
Accountants’in CodeBangladesh,
of Ethicsand for wethe
have fulfilled and Exchange
Securities Rules when due
misstatement to fraud or error, designed
it exists. Misstatements can arise from
1987 and other applicable Laws and and performed audit procedures
our other ethical responsibilities
Professional Accountants in accordance
(IESBA with these fraud or error and areresponsive
considered. to those risks, and
Code) together with the ethical Regulation and for such internal
requirements and the IESBA
requirements Code.
that are Wetobelieve
relevant our that theasaudit
control management determines is obtain audit evidence that is
As preparation
part of an auditsufficient
in accordance with ISAs,to we exercise
and appropriate
evidence weaudit
haveofobtained is sufficient
the Financial and appropriate to
Statements necessary to enable the
provide a basis for our opinion.
in Bangladesh, and we have fulfilled of financial statements professional
that are freejudgment and maintain professional skepticism
provide a basis for our opinion. from material misstatement, whether The risk of not detecting a
our other ethical responsibilities in
due to fraud or error.
throughout the audit.material
We also: misstatement resulting
accordance with these requirements
Other Information
ant the IESBA Code. We believe that In preparing the financial statements,
from fraud is higher than for
the audit evidence we have obtained

Identify and assess
one the risks offrom
resulting material
error,misstatement
as of
management is responsible for fraud may involve collusion,
“Management is is responsible
sufficient and for the otherto information.
appropriate assessing Thethe Company’stheability
financial statements, whether due to fraud or error,
forgery, intentional omissions,
provide acomprises
basis for ourall
opinion. in theas a going designed
concern, and performed audit procedures
other information of the information
to continue misrepresentations, or theresponsive to
disclosing, as applicable, matters
Annual Report other
Other than the financial statements
Information relatedand our concern and
to going those
usingrisks, andoverride
obtainofaudit
internal control. that is sufficient
evidence
auditor’s report thereon. The annual report is expected the going to and appropriateObtained
be basis of accounting
concern to provide an a basis for ourofopinion. The
understanding
Management is responsible for
unless management either intends internal control relevant to the
made available
the to us after
other the date The
information. of this auditor’s report.
other risk of not detecting a material misstatement resulting
to liquidate the company or to audit in order to design audit
cease operations, or has nofrom fraud is higher than forasone resultingin from error,
information comprises all of the
realistic procedure that appropriate
Our opinioninformation
on the financial
in the statements
Annual Report does not cover the
other than the financial statements
alternative but to do so. as fraud may the involve collusion,
circumstances, forgery,
but not for the intentional
other information and we do not express any form of assurance purpose of expressing an opinion
omissions, misrepresentations, or the override of internal
conclusion thereon.
control.
In connection with our audit of the financial statements, our
Obtained an understanding of internal control relevant
responsibility is to read the other information and, in doing
to the audit in order to design audit procedure that as
so, consider whether the other information is materially in
appropriate in the circumstances, but not for the purpose
consistent with the financial statements of our knowledge
of expressing an opinion on the effectiveness of the
obtained in the audit or otherwise appears to be materially
company’s internal control.
misstated.
Evaluate the appropriateness of accounting policies used
Responsibilities of Management of Those Charged with
and the reasonableness of accounting estimates and
Governance for the Financial Statements
Management of Mercantile Bank Securities Limited is
Conclude on the appropriateness of management’s use
responsible for the preparation and fair presentation of
of the going concern basis of accounting and, based
the Financial Statements in accordance with International
on the audit evidence obtained, whether a material
Financial Reporting Standards (IFRSs), the Companies Act
uncertainty exists related to events or conditions that

Annual Report 2019
Annexure-H
may cast significant doubt on the company’s ability
INDEPENDENT AUDITOR’S We alsoREPORT
provide those
TO charged with governance with a
to continue as a going concern. If we conclude that statement that we have complied with relevant ethical
THE SHAREHOLDERS OF Mercantile Bank Securities Limited
a material uncertainty exists, we are required
Report on the drawof the requirements
toaudit regarding independence, and to communicate
attention in our auditor’s report to the related disclosures with them all relationships and other matters that may
in the financial
Opinion statements or, if such disclosures are report
and our auditor’s reasonably be thought
thereon. The to bear with
Those charged on our independence, and
governance
inadequate, to the date of our auditor’s
We have audited the financial
report. However,
annual where
report is expected applicable,
to be made related
are safeguards.
responsible for overseeing
available to us after the date of this the Company’s financial reporting
future events or conditions
statements may cause
of Mercantile Bank the company to
auditor’s report. Report on Other Legal and Regulatory Requirements
process.
cease toSecurities
continueLimited, which
as a going comprise
concern.
the statement of financial position Our opinion on the financial Auditor’s Responsibilities
as at 31 December 2019, and the In accordance
the other withforthe Companies
audit of Act the1994 and the Securities
Evaluatestatement
the overall presentation, structure
of profit or loss and other and content
statements does not cover the financial
information and we do andnot
Exchange
express Rules 1987, We also report the following:
statements
of the financial
comprehensivestatements, including
income, statement of theany
disclosures,
form of assurance conclusion
changes in equity and statement of
and whether the financial statements represent thereon. the (a) we have obtained all the information
Our objectives and explanations
are to obtain
cash flows for the year then ended,
reasonable assurance about whether
underlying transactions and statements,
events in a In manner thatwith our audit
which to the thebest of our knowledge and belief were
and notes to the financial connection of the financial statements as a whole
achievesincluding
fair presentation.
a summary of significant financial statements, our responsibility
necessary for arethe
freepurposes of our
from material audit and made due
misstatement,
accounting policies. is to read the other information and, in whether due to fraud or error, and to
doing so, consider whetherverification
the other thereof;
Obtain Insufficient appropriate
our opinion, audit evidence
the accompanying regarding issue an auditor’s report that includes
information is materially in consistent our opinion. Reasonable assurance is
the financial information of the entities with
financial statements give a true and or business (b) in our
the financial statements opinion,
of our proper
a high level books of account
of assurance, as required by
but is not
fair view, in all material respects, of the
activities within the company to
financial position of the company as at
express an opinion
knowledge obtained in the audit
law have
or
been kept
a guaranteeby the
thatcompany so far
an audit conducted as it appeared
otherwise appears to be materially in accordance with International
on the financial
31 December statements.
2019, and ofWe are responsible
its financial for the
misstated. from our examination of those books;
Standards on Auditing (ISAs) will
performance
direction, supervision andand
its performance
cash flows for of the audit. We
always detect a material misstatement
the year then ended in accordance
remain solely responsible for our audit opinion. (c) the statement when of itfinancial position andcan
exists. Misstatements statement of
with International Financial Reporting Responsibilities of
Standards (IFRSs). Management of Those profit or loss and
arise other comprehensive
from fraud or error andincome
are dealt with
considered.
We communicate with those charged with Charged governance
with Governance by the
forreport are in agreement with the books of account;
We conducted our audit in
regarding, among other with
accordance matters,International
the plannedthe
scope and Statements
Financial and As part of an audit in accordance
with ISAs, we exercise professional
timing of the audit and significant and findings, including any
Standards on Auditing (ISAs). Our
Management of Mercantile Bank judgement and maintain professional
responsibilities under those standards
significant deficiencies in internal control. ThatSecurities
we identify (d) the expenditure incurred was for the purposes of the
skepticism throughout the audit. We
are further described in the Auditor’s Limited is responsible for
during our audit.
Responsibilities for the Audit of the the preparation and fair company’s
presentation business.
also:
Financial Statements section of our of the Financial Statements in
accordance with International Identify and assess the risks of
report. We are independent of the
Financial Reporting Standards material misstatement of the
Company in accordance with the
(IFRSs), the Companies Act 1994, financial statements, whether
International Ethics Standards Board
the Securities and Exchange Rules due to fraud or error, designed
of Accountants’ Code of Ethics for
1987 and other applicable Laws and and performed audit procedures
Professional Accountants (IESBA
Regulation and for such internal responsive to those risks, and
Code) together with the ethical
control as management determines is obtain audit evidence that is
requirements that are relevant to our
necessary to enable the preparation sufficient and appropriate to
audit of the Financial Statements
of financial statements that are free provide a basis for our opinion.
in Bangladesh, and we have fulfilled
from material misstatement, whether The risk of not detecting a
our other ethical responsibilities in
due to fraud or error. material misstatement resulting
accordance with these requirements
from fraud is higher than for
ant the IESBA Code. We believe that In preparing the financial statements,
Place: Dhaka,the
Bangladesh
audit evidence we have obtained management is responsible for
Hedayet
one resulting from Ullah
error, FCA
as
fraud may involve collusion,
Dated: 09 March 2021
is sufficient and appropriate to assessing the Company’s ability Chartered Accountants
forgery, intentional omissions,
provide a basis for our opinion. to continue as a going concern, DVC: 2103110281AS966054
misrepresentations, or the
disclosing, as applicable, matters override of internal control.
Other Information related to going concern and using
the going concern basis of accounting Obtained an understanding of
Management is responsible for
unless management either intends internal control relevant to the
the other information. The other
to liquidate the company or to audit in order to design audit
information comprises all of the
cease operations, or has no realistic procedure that as appropriate in
information in the Annual Report
alternative but to do so. the circumstances, but not for the
other than the financial statements
purpose of expressing an opinion

Mercantile Bank Securities Limited

Statement of Financial Position
2020 2019
ASSETS Notes
Taka Taka
Current Assets
Cash and Bank Balances 3 371,474,437 254,095,206
Accounts Receivable from Exchange, Depository and CCP 4 - -
Accounts Receivable from Securities Trading 5 3,419,450 10,901,344
Receivable from Margin Clients 6 4,173,598,295 4,201,766,829
Receivable from Other Clients 7 - -
Receivable from Securities Dealer (if subsidiary) 8 - -
Receivable Arises from Short Sale 9 - -
Proprietary Positions in Securities & Specified Investments 10 372,502,023 383,437,800
Proprietary Positions in Strategic Investments 11 133,146,723 -
Total Current Assets 5,054,140,928 4,850,201,179
Non-Current Assets
Other Assets Arising from 12 9,000 9,000
Advance /Investments in Associated Undertaking (Long Term) 13 1,229,000 1,276,000
Property, Plant and Equipment 14 9,356,190 11,847,926
Value of Investment in Exchange (against Membership Value) 15 667,499,955 667,499,955
Other Long Term Assets 16 - -
Advance Income Tax 17 175,474,082 149,526,112
Total Non-Current Assets 853,568,227 830,158,993
Total Assets 5,907,709,155 5,680,360,172
EQUITY AND LIABILITIES
Liability
Current Liabilities
Payable to Clients 18 158,657,449 112,022,579
Short Term Borrowing from Bank 19 503,649,573 623,608,768
Amounts Payable to Clearing House/Exchanges/Depository etc 20 26,868,764 3,140,763
Other Liabilities and Provisions 21 1,411,563,066 1,336,557,162
Total Current Liabilities 2,100,738,852 2,075,329,272
Non-Current Liabilities
Long Term Loan Liabilities (Other than Current Portion Amount) 22 128,318,135 -
Total Non-current Liabilities 128,318,135 -
Shareholders' Equity
Share Capital 23 3,600,000,000 3,600,000,000
Retained Earnings 24 78,652,168 5,030,900
Total Equity 3,678,652,168 3,605,030,900
Total Equity and Liabilities 5,907,709,155 5,680,360,172
The financial statements should be read in conjunction with the annexed notes and were approved by the Board of Directors on
09 March 2021 and were signed on its behalf by:
For and on behalf of Board of Directors of Mercantile Bank Securities Limited.
Chief Executive Officer (CC) Director Director
Signed in terms of our separate report of even date annexed.
Place: Dhaka, Bangladesh Hedayet Ullah FCA

Dated: 09 March 2021 Chartered Accountants
DVC: 2103110281AS966054

Statement of Profit or Loss and Other Comprehensive Income
For the year ended on 31 December 2020
2020 2019
ASSETS Notes
Taka Taka
Operating Income 25 205,638,774 156,510,064
Less: Operating Expenses 26 26,624,850 16,021,002
Gross Profit/(Loss) 179,013,924 140,489,062
Less: Administrative and General Expenses 27 54,771,612 64,407,524
Operating Profit/(Loss) 124,242,312 76,081,538
Add: Other Income 28 14,925,754 25,626,689
Profit/(Loss) Before Provision and Income Tax 139,168,066 101,708,227
Less: Provision for Margin Loan 21.2 40,000,000 20,000,000
Provision for Unrealised Loss 21.5 - 18,201,102
Profit/(Loss) Before Income Tax 99,168,066 63,507,125
Less: Provision for Income Tax
Current Tax 21.3 24,800,954 21,744,127
Deferred Tax 21.1 745,844 (690,835)
Net Profit/(Loss) After Income Tax 73,621,268 42,453,833
Add: Other Comprehensive Income - -
Total Comprehensive Income/(Loss) 73,621,268 42,453,833
The financial statements should be read in conjunction with the annexed notes and were approved by the Board of Directors on
09 March 2021 and were signed on its behalf by:
Hedayet Ullah FCA

Place: Dhaka, Bangladesh Chartered Accountants
Dated: 09 March 2021 DVC: 2103110281AS966054


Amount in Taka
Particulars Share Capital Retained Earnings Total
Balance as at 01 January 2020 3,600,000,000 5,030,900 3,605,030,900
Net Profit/(Loss) for the year - 73,621,268 73,621,268
Balance as at 31 December 2020 3,600,000,000 78,652,168 3,678,652,168

Amount in Taka
Particulars Share Capital Retained Earnings Total
Balance as at 01 January 2019 3,600,000,000 (37,422,933) 3,562,577,067
Net profit/(Loss) for the year - 42,453,833 42,453,833
Balance as at 31 December 2019 3,600,000,000 5,030,900 3,605,030,901
Hedayet Ullah FCA

Place: Dhaka, Bangladesh Chartered Accountants

Statement of Cash Flows
2020 2019
Taka Taka
A. Cash flows from Operating activities:
Net Profit Before Income Tax 99,168,066 63,507,125
Add: Depreciation 2,913,331 3,961,858
Less: Profit on sale of Property, Plant and Equipment 5,887 -
Loss on Sale of Strategic Investment in Shares (DSE) - -
Operating Profit before Changes in Operating Assets and Liabilities 102,075,510 67,468,983
Increase/Decrease in Operating Assets and Liabilities

(Increase) / Decrease in Operating Assets 35,697,428 (8,285,658)
Increase / (Decrease) in Operating Liabilities 119,821,978 27,507,042
Income Tax paid (25,947,970) (15,618,456)
Net cash flows from Operating activities 231,646,945 71,071,911
B. Cash flows from Investing activities:

Acquisition of Property, Plant and Equipment (421,608) (2,026,703)
Disposal of Property, Plant and Equipment 5,900 1,163,769
Investment in Dealer Account & Strategic Investments (122,210,946) (42,367,133)
Cash proceed from sale of Strategic Investment in Shares (DSE) - -
Net cash used in Investing activities (122,626,654) (43,230,067)
C. Cash flows from Financing activities:

Proceeds/(Payments) from Short Term Business Liabilities (119,959,195) (219,972,930)
Proceeds/(Payments) Long Term Loan Liabilities 128,318,135 (104,072,221)
Net cash used in financing activities 8,358,940 (324,045,150)
Net surplus in cash and bank balance for the year (A+B+C) 117,379,231 (296,203,306)
Cash & Bank Balance at the beginning of the year 254,095,206 550,298,512
Cash & Bank Balance as at 31 December 2020 371,474,437 254,095,206
Cash & Bank Balance :

Cash in Hand 117,242 175,666
Cash at Bank 186,403,079 130,054,851
Investment in FDR 184,661,865 109,679,912
Cash at Trading Accounts (Stock Dealer A/C) 292,252 14,184,776
371,474,437 254,095,206
Place: Dhaka, Bangladesh



Notes, comprising a summary of significant accounting policies
and other explanatory notes
1. The Company and its Activities
1.1 Legal status and nature of the company

Mercantile Bank Securities Limited was incorporated vide Reg. # C-85413/10 dated as 27 June 2010 as a private limited
company under the Companies Act 1994. The registered office of the company is at Shwadesh Tower (3rd Floor), 41/6
Purana Paltan, Dhaka-1000, Bangladesh. Its to facilitate development of sound capital market and to provide higher,
better and diversified services to a wide range of customer. MBSL is offering high quality products and services at a
competitive rate.
Mercantile Bank Securities Limited offers full-fledged international standard brokerage service with margin loan facility.
MBSL is also a full service Depository Participant (DP) of Central Depository Bangladesh Limited (CDBL). The brokerage
service is designed to provide customer with necessary support and profitability in the stock market. The company
obtained DSE Membership on 04 September 2011 and CSE Membership on 25 September 2011 and started it's operation
on 14 September 2011.
2.0 Significant Accounting Policies:
2.1 Basis of Presentation of Financial Statements

The financial statements have been prepared on a going concern basis applying accrual basis of accounting except
for statement of cash flows in accordance with and in compliance with International Financial Reporting Standards
(IFRS), the Companies Act 1994, Securities and Exchange Rules 1987, Securities and Exchange Act 1993, conditions and
regulations issued by the Bangladesh Securities and Exchange Commission (BSEC), Schedule-B reference no. BSEC/
CMRRCD/2017-357/221/Admin/89 Date: 29 May 2019 and other applicable laws and regulations. Statement of Cash Flows
is prepared in accordance with International Accounting Standard (IAS) 7: "Statement of Cash Flows" and the cash flows
from operating activities are presented under the indirect method as prescribed by the Securities and Exchange Rules,
1987.
2.2 Basis of Measurement
The financial statements have been prepared based on historical cost convention basis. The accounting policies, unless
otherwise stated, have been consistently applied by the Company and are consistent with those of the previous year.
2.3 Use of Estimates and Judgments
The preparation of financial statements requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenue and expenses. It also requires disclosures of contingent assets and liabilities at the
date of the financial statements. Provisions and accrued expenses are recognized in the financial statements in line with
the International Accounting Standard (IAS) 37 “Provisions, Contingent Liabilities and Contingent Assets” when - The
Company has a legal or constructive obligation as a result of past event.
i) it is probable that an outflow of economic benefit will be required to settle the obligation.
ii) a reliable estimate can be made for the amount of the obligation.
The estimates and associated assumptions are based on historical experience and various other factors that are believed
to be reasonable under the circumstances, the result of which form the basis of making the judgments about carrying
values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
estimates.
However, the estimates and underlying assumptions are reviewed on an ongoing basis and the revision is recognized in
the period in which the estimates are revised.
2.4 Components of Financial Statements
The financial statements referred to here comprises:
a) Statement of Financial Position as at 31 December 2020.
b) Statement of Profit or Loss and Other Comprehensive Income for the year ended on 31 December 2020.
c) Statement of changes in Equity for the year ended on 31 December 2020.
d) Statement of Cash Flows for the year ended on 31 December 2020 and
Notes, comprising a summary of significant accounting policies and other explanatory notes as at and for the
e)
year ended on 31 December 2020.

2.5 Statement of Cash Flows
Statement of Cash Flows is prepared in accordance with International Accounting Standard (IAS) 7: "Statement of
Cash Flows" and the cash flows from operating activities are presented under the indirect method as prescribed by the
Securities and Exchange Rules, 1987.
2.6 Going Concern
The Company has adequate resources to continue in operation for foreseeable future. For this reasons the directors
continue to adopt going concern basis in preparing the financial statements. The current credit facilities and adequate
resources of the Company provide sufficient funds to meet the present requirements of its existing businesses and
operations.
2.7 Recognition and measurement of financial assets
A financial asset or financial liability is classified as held for trading if it is acquired or incurred principally for the purpose
of selling or repurchasing it in the near term.
2.8 Revenue Recognition
Revenue is recognized only when it is probable that the economic benefits associated with the transaction will flow to
the enterprise and in accordance with the International Financial Reporting Standard (IFRS) 15 “Revenue from Contracts
with Customers”:
a. Brokerage Commission
Brokerage commission is recognized as income when selling or buying order is signed and trade is executed.
b. Interest Income from Margin Loan

Interest income from margin loan is recognized on accrual basis. Such income is calculated on daily margin loan balance
of the respective clients. Income is recognized on Quarterly basis.
c. Dividend income and gain/ (loss) on sale of marketable securities
Dividend income is recognized when cash dividend receive is established whereas profit or loss arising from the sale of
securities is accounted for only when shares are sold in the market and profit is realized or loss is incurred.
2.9 Cash and Bank Balances
Cash and Bank Balances include cash in hand and cash at bank which are held and are available for use by the Company
without any restriction. There is insignificant risk of change in the value of the above items.
2.9.1 Investment in Fixed Deposit Receipt (FDR)
Investment in Fixed Deposit Receipt (FDR) Tk. 23,019,572 kept in Peoples Leasing and Financial Service Limited which
remained uncollectable due to liquidity crisis of the company and honorable high court has appointed liquidator for
liquidation of Peoples Leasing and Financial Service Limited. The honorable high court has also ordered the liquidator
to submit report to court.
2.10 Property, Plant & Equipment
Fixed assets are recorded at cost and have limited useful lives (except land). All expenses incurred for the purpose of
acquiring, installing and bringing the fixed assets into its present location for intended use have to be capitalized and
included in the cost of the fixed assets.
2.11 Depreciation
Depreciation is calculated on the cost of fixed assets in order to write off such amounts over the estimated useful lives
of such assets. The rates of depreciation used on a straight-line method are as follows:
Name Of Assets Rate of Depreciation
Vehicles 20%
Computer Equipment & Machineries 20%
Furniture & Fixtures 10%
Software 20%
2.12 Investment in Shares

Investment in quoted shares (or shares held for sale) and unquoted shares are initially recognized at cost plus transaction
costs that are directly attributable to the acquisition of the shares. After initial recognition, investment in quoted shares
has been revalued at cost at reporting date. Net of unrealized gain and loss has not been recognized in the Statement of
Profit or Loss and Other Comprehensive Income.


2.13 Advance, deposits and prepayments
Advances are initially measured at cost. After initial recognition, advances are carried at cost less deductions, adjustments
or charges to other account heads such as property, plant and equipment, inventory, etc.
2.14 Advance Income Tax
The amount of advance income tax is mainly deduction at sources by DSE & CSE on daily transactions of broker & dealer
operation. Tax deduction on interest income and dividend income are also included here.
2.15 Provision against unrealized loss in shares purchased as dealer and Margin Loan
As per Bangladesh Securities and Exchange Commission Order No. BSEC/SRI/Policy/3/2020/68 dated on 12 January
2020, the company kept 37.65% Provision against Unrealized Loss in Securities of 2020.
2.16 Provision for current Tax
Provision for current tax is made in accordance with the provision of Income Tax Ordinance, 1984 and subsequent
amendments made thereto from time to time.
2.17 Provision for expenses
Provision for expenses is recognized when the Company has a present obligation as a result of a past event and it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligations and
reliable estimate of the amount can be made.
2.18 Provision against Margin Loan
As per circular no. BSEC/SRI/Policy/3/2020/68 dated on 12 January 2020, Mercantile Bank Securities Limited has created
Tk. 40,000,000 provision against negative equity on margin loan amount at the end of the year due to fluctuating
situation in the capital market.
2.19 Related Party Disclosures
As per IAS 24 “Related Party Disclosures”, a related party is a person or entity that is related to the entity (i.e. Mercantile
Bank Securities Limited) that is preparing its financial statements. Related party transaction is a transfer of resources,
services, or obligations between a reporting entity and a related party, regardless of whether a price is charged as per
IAS 24.
Related parties include the company's directors, key management personnel, associates, companies under common
directorship etc. as per IAS 24 “Related Party Disclosures”. All transactions involving related parties arising in the normal
course of business are conducted at arm’s length at normal commercial rates on the same terms and conditions as third
party transactions using valuation modes, as admissible.
2.20 Events after the balance sheet date
Events after the balance sheet date that provide additional information about the company's position at the balance
sheet date are reflected in the financial statements. Events after the balance sheet date that are not adjusting event are
disclosed in the notes when material.
2.21 Management' responsibility on financial statements
The management of the company is responsible for the preparation and presentation of these financial statements.
2.22 Reporting period
These financial statements cover period from 1 January 2020 to 31 December 2020.
2.23 Authorisation for issue
These financial statements are authorised for issue by the Board of Directors of the company on 09 March 2021.
2.24 GENERAL
i) These notes form an integral part of the annexed financial statements and accordingly are to be read in
conjunction therewith.
ii) Previous year's figures have been re-arranged/re-grouped where necessary to conform to the current year's
financial presentation.
iii) Figures in these notes and annexed financial statements have been rounded off to the nearest taka.

2020 2019
Taka Taka
3 Cash and Bank Balances
Cash in Hand 117,242 175,666

Bank Balances at Mercantile Bank Limited, Main Branch (Note 3.1) 185,573,690 130,054,851
Bank Balances at One Bank Limited, Principle Branch (Note 3.2) 1,121,641 14,184,776
Investment in FDR (Note 3.3) 184,661,865 109,679,912
371,474,437 254,095,206
3.1 Bank Balances at Mercantile Bank Limited, Main Branch Account No.
Company's operational account (MBSL Income
0002230 3,253,434 1,032,517
Expenditure A/C)
Account for clients (MBSL Consolidated Customers A/C) 0002437 171,772,080 128,976,952
IPO account (Public Issue Application A/C) 0002558 5,871,400 41,382
Strategic Investment account (Mercantile Bank Securities Ltd.) 9818578 4,676,776 4,000
185,573,690 130,054,851
3.2 Bank Balances at One Bank Limited, Principle Branch Account No.
Trading Accounts for Stock Dealer (Mercantile Bank
0000663 292,252 4,987,449
Securities Ltd.)
Settlement account (Mercantile Bank Securities Ltd.) 0000616 829,389 9,197,327
1,121,641 14,184,776
3.3 Investment in FDR FDR No.
Meridian Finance & Investment Ltd. 89902 40,000,000 50,000,000

People's Leasing & Financial Services Ltd. 21000001663 23,019,572 23,019,572
Mercantile Bank Limited 0362709 34,740,360 32,926,025
Mercantile Bank Limited 0363832 1,418,183 1,330,000
Mercantile Bank Limited 0364069 - 2,404,315
Mercantile Bank Limited 0364297 15,202,500 -
184,661,865 109,679,912
A schedule of Investment in FDR is given in “Annexure-D”.
4 Accounts Receivable from Exchange, Depository and CCP

Mandatory - -
Excess over mandatory - -
Cash Deposits with Exchanges (as Margin/Security)(mandatory/Excess) - -
Mandatory - -
Cash deposit with Clearing House (As margin)(mandatory/Excess) - -
Mandatory - -
Cash Deposit with depository (as per rule) (mandatory/Excess) - -
- -


2020 2019
Taka Taka
5 Accounts Receivable from securities Trading
Receivable from DSE (Note-5.1) 999,553 8,016,686

Receivable from CSE (Note-5.2) - -
Receivable from Stock-Broker/Stock- Dealer - -
Receivable from Merchant Banker - -
Receivable from Selling Agents - -
Receivable from others (Accrued Interest of FDR) - Annexure D 2,419,897 2,884,658
3,419,450 10,901,344
5.1 Receivable from DSE

Receivable against A, B, G & N category - 6,325,141
Receivable against Z category 999,553 1,691,545
Receivable against DVP category - -
999,553 8,016,686
5.2 Receivable from CSE

Receivable against A, B, G & N category - -
Receivable against Z category - -
Receivable against DVP category - -
- -
6 Receivable from Margin Clients

Receivable from Clients having no margin or full erosion of clients' equity (e.g.
3,439,415,572 3,628,681,005
no equity against debit balance)
Receivable from Clients fall under force sale condition (e.g. equity is between
38,653,782 125,432,273
100% and 125%of DB
Receivable from Clients fall under margin call (e.g. equity is > 125% of DB but <
115,119,578 9,291,221
150% of DB)
Receivable from regular margin clients (e.g. equity is>150% of debt balance)
580,409,363 438,362,329
Clients
4,173,598,295 4,201,766,829
7 Receivable from Other Clients

Receivable after Securities Trading - -
Receivable Arise from Fee, Commission & Charge - -
- -
8 Receivable from Securities Dealer (if subsidiary) - -
9 Receivable Arises from Short Sale - -
10 Proprietary Position in Securities & Other Investment

Investment in Dealer A/C at Cost (Note- 10.1) 357,502,023 383,437,800
Own Subscription in IPOs but not yet allotted (Note-10.2) 15,000,000 -
372,502,023 383,437,800
Investment in Dealer A/C at Cost Value 357,502,023 383,437,800

Investment in Dealer A/C at Market Value 285,268,693 247,467,389
Unrealized (Gain)/Loss 72,233,330 135,970,411
10.1 Investment in Dealer A/C at Cost Value

Value of "A" Category Instruments 356,019,439 379,386,458
Value of "B/G/N" Category Instruments 1,482,584 4,051,342
Value of "Z" Category Instruments - -
357,502,023 383,437,800

2020 2019
Taka Taka
10.2 Own Subscription in IPOs but not yet allotted
Energypac Power Generation Limited 15,000,000 -
15,000,000 -
11 Proprietary Positions in Strategic Investments

Position in Strategic Investment A/C at Cost Value 103,775,083 -
Balance Available to Purchase Shares 29,371,641 -
133,146,723 -
Position in Strategic Investment A/C at Cost Value 103,775,085 -

Position in Strategic Investment A/C at Market Value 105,930,692 -
Unrealized (Gain)/Loss (2,155,607) -
12 Other Assets Arising from

Receivable against Advisory Fees, Commission, etc - -
Prepaid Expenses LFA 9,000 9,000
Security Deposit - -
9,000 9,000
13 Advance /Investments in Associated Undertaking (Long Term)

Advance to Subsidiaries - -
Advance to Associated Companies - -
Advance to Director's & Staffs - -
Other Advances 1,229,000 1,276,000
1,229,000 1,276,000
14 Property, Plant and Equipment

Fixed Assets (net off depreciation & amortization):
Land & Land Development - -
Building & Other Securities - -
Other Tangible Assets:
Vehicle 15,000 35,000
Furniture & Fixture 7,788,362 9,237,209
Computer Equipment & Machineries 1,484,837 2,416,675
9,288,198 11,688,885
Intangible Assets :
Software 67,991 159,042
Goodwill, Patents & other Intangible Assets - -
67,991 159,042
9,356,190 11,847,926
A schedule of Property, Plant and Equipment is given in Annexure-A.
15 Value of Investment in Exchange (Against Membership Value)

Dhaka Stock Exchange Ltd. (Note 15.1) 487,499,955 487,499,955
Chittagong Stock Exchange Ltd. (Note 15.2) 180,000,000 180,000,000
667,499,955 667,499,955


2020 2019
Taka Taka
15.1 Dhaka Stock Exchange Ltd.
Opening Balance 487,499,955 487,499,955
Add: Investment made during the year - -
487,499,955 487,499,955
Less: Sales during the year - -
Closing Balance 487,499,955 487,499,955
As per the provision of the Exchange Demutualization Act, 2013 and in accordance with the Bangladesh Securities and
Exchange Commission (BSEC) approved Demutualization Scheme, Dhaka Stock Exchange allotted 7,215,106 ordinary
Shares of Taka 10 each and Trading Right Entitlement Certificate (TREC) in favor of the company against the membership
of DSE. Out of the total 7,215,106 Shares DSE transferred and credited 2,886,042 shares directly to Company’s BO Account
and rest 4,329,064 shares were credited to the “Demutualization Blocked Account” maintained by the DSE. Later DSE
have transferred 25% shares to Chinese Consortium-Strategic Partner of DSE by taking over 25% shares of TREC holders.
As such Mercantile Bank Securities Limited sold 1,803,777 shares at Tk. 21 per share amount in Tk. 37,879,317, but the cost
value of Tk. 90 per share amount in Tk. 162,500,045, however realized loss amount in Tk.124,620,728.
15.2 Chittagong Stock Exchange Ltd.
Opening Balance 180,000,000 180,000,000
Add: Investment made during the year - -
180,000,000 180,000,000
Less: Sale/ Recovery during the year - -
Closing Balance 180,000,000 180,000,000
As per the provision of the Exchange Demutualization Act, 2013 and in accordance with the Bangladesh Securities
and Exchange Commission (BSEC) approved Demutualization Scheme, Chittagong Stock Exchange allotted 4,287,330
ordinary Shares of Taka 10 each and Trading Right Entitlement Certificate (TREC) in favor of the company against
the membership of CSE. Out of the total 4,287,330 Shares CSE transferred and credited 1,714,932 shares directly to
Company’s BO Account and rest 2,572,398 shares were credited to the “Demutualization Blocked Account” maintained
by the CSE.
16 Other Long Term Assets
Long Term Investments - -

Long Term Prepayments & Deposit - -
Deferred Tax Assets - -
Others - -
- -
17 Advance Income Tax

Opening Balance 149,526,112 133,907,655
Add: Advance Income Tax Paid During The Year 5,505,004 -
155,031,116 133,907,655
Add: Tax Deducted at Source During The Year 16,033,872 8,669,301
171,064,987 142,576,956
Add: Tax Deducted at Source Against Bank Interest & Others 4,409,095 6,949,155
175,474,082 149,526,112
Advance Income Tax Tk. 25,947,970 which includes TDS deducted from DSE & CSE TK. 15,064,006, TDS deducted from
bank interest & dividend income in dealer account TK. 4,491,213, TDS deducted from FDR Tk. 887,747, AIT paid for car Tk.
20,000, Tk. 4,795,365 for payment of income tax u/s -74 for assessment year 2020-21 and Tk. 689,639 for payment of
income tax u/s -75 for assessment year 2020-21.
18 Payable to Clients
General Client 139,789,189 73,462,531
Margin Client 18,868,260 38,560,048
158,657,449 112,022,579

2020 2019
Taka Taka
19 Short Term Borrowing from Bank
The terms and conditions of the loan taken from Mercantile Bank Ltd. are as follows:
Nature of facility : SOD General (Renewal)

: To provide liquidity of MBSL & to meet day to day operational expenses
Purpose
in the business.
Facility Amount : Tk. 60 Core
Rate of Interest : Nil
Tenor of the facility : One year
: Usual charge documents of the bank and undated chequed covering the
Security
credit limit
20 Amounts payable to clearing house/Exchanges/Depository etc
Payable to Exchanges 22,913,408 -
Payable to clearing house - -
Payable to depository 3,954,669 3,140,763
Payable to brokers 687 -
26,868,764 3,140,763
21 Other Liabilities and Provisions :

Accruals & Accounts Payable - -
Deffered Tax and Other Deffered Liabilities (Note 21.1) 1,250,851 505,007
Provision for Margin Loan (Note 21.2) 222,900,000 182,900,000
Provision for Gratuity, PF & Others 19,244,378 16,840,721
Provision for Income Tax (Note 21.3) 152,042,383 127,241,429
Interest Suspense Against Margin Loan (Note 21.4) 972,685,083 976,280,208
Provision for Unrealized Loss (Note 21.5) 27,194,082 27,194,082
Liabilities for Expenses (Incentive Bonus) 3,363,779 5,461,129
Sundry Deposit 2,418 13,130
Fractional Dividend of Clients 51,253 29,166
Audit Fees Payable 115,000 86,250
VAT Payable - -
Others 12,713,840 6,040
1,411,563,066 1,336,557,162
21.1 Deffered Tax Liability

Deferred tax liability has been recognized in accordance with the provisions of IAS 12: Income Taxes, is arrived at as
follows:
Opening balance 505,007 1,195,842
Addition/(deduction) during the year charged in P&L 745,844 (690,835)
21.2 Provision for Margin Loan

Opening Balance 182,900,000 162,900,000
Add: Provision made during the year 40,000,000 20,000,000
222,900,000 182,900,000
Less : Adjusted during the year - -
Closing Balance 222,900,000 182,900,000


As on 31 December 2020 our negative equity stood as Tk. 2,513,851,664 against outstanding loan Tk. 3,439,415,572 and
the market value of share is 925,563,908. If the market value of share goes up then negative equity will be reduced.
The Bangladesh Securities and Exchange Commission vide its Instruction no. BSEC/SRI/Policy/3/2020/68 dated on 12
January 2020 allowed the stock broker to provide the loss on margin loan in 5 quarters in equal amount (20%) beginning
from December 2020 to December 2021. However, MBSL has maintained a lump sum amount of Tk. 40,000,000 as
provision for margin loan till December 2020. In addition, the company has balance of Tk. 972,685,082 being interest on
margin loan to interest suspense account as mentioned under Note - 21.4.
2020 2019
Taka Taka
21.3 Provision for Income Tax
Opening Balance 127,241,429 105,497,302
Add: Advance Income Tax Paid - -
127,241,429 105,497,302
Add: Provision made during the year 24,800,954 21,744,127
Closing Balance 152,042,383 127,241,429
TDS final settlement 20,442,967 15,618,456
Provision for Income Tax is Tk. 24,800,954 under regular tax.
21.4 Interest Suspense Against Margin Loan

Opening Balance 976,280,208 988,249,066
Add: Transfer made during the year - -
976,280,208 988,249,066
Less : Adjusted during the year 3,595,126 11,968,858
Closing Balance 972,685,083 976,280,208
21.5 Provision for Unrealized Loss

Opening balance 27,194,082 8,992,981
Add: Provision made during the year - 18,201,102
27,194,082 27,194,082
Less: Adjusted during the year - -
Closing Balance 27,194,082 27,194,082
Mercantile Bank Securities Limited has created provision for compensating loss which is incurred due to decrease in
market price of shares which is less than cost price.
As Per Bangladesh Securities and Exchange Commission Instruction no. BSEC/SRI/Policy/3/2020/68 dated on 12
January 2020, the company kept 37.65% Provision amount in tk. 27,194,082 for Unrealized Loss in company’s Own
Portfolio Account. The total unrealized loss of Tk. 72,233,330 as on 31 December 2020 arrived at as under:
Marginable (67,011,503) (134,801,553)
Non Marginable (5,221,827) (1,168,858)
Total Unrealized Loss (72,233,330) (135,970,411)
22 Long Term Loan Liabilities (Other than Current Portion Amount)

ICB Pronodona Fund
Investment Corporation Of Bangladesh (ICB) 128,318,135 -

128,318,135 -
The terms and conditions of the loan taken from Investment Corporation of Bangladesh (ICB) are as follows:
Nature of facility : Fixed

: To provide liquidity of MBSL & to meet affected small investors in the
Purpose
capital market .
Facility Amount : Tk. 168,600,000
Rate of Interest : 4%
Tenor of the facility : 06 Feb 2020 to 31 December 2022
: Usual charge documents of the bank and post dated Twelve (12)
Security
chequed covering the credit limit.
2020 2019
Taka Taka
23 Share Capital
Authorized Capital
500,000,000 Ordinary Shares @ Tk. 10 each 5,000,000,000 5,000,000,000
Issued, Subscribed and Fully Paid-up Capital
Total 360,000,000 Ordinary Shares of Tk. 10 each 3,600,000,000 3,600,000,000

Sl # Name of the Shareholders No. of Shares
1 Mercantile Bank Limited 355,000,000 3,550,000,000 3,550,000,000
2 Subrota Narayan Roy 200,000 2,000,000 2,000,000
3 Ms. Bilkis Begum 200,000 2,000,000 2,000,000
4 A. S. M. Feroz Alam 200,000 2,000,000 2,000,000
5 Mohd. Selim 200,000 2,000,000 2,000,000
6 M. A. Khan Belal 200,000 2,000,000 2,000,000
7 Md. Abdul Jalil 200,000 2,000,000 2,000,000
8 Md. Anwarul Haque 200,000 2,000,000 2,000,000
9 Dr. Toufique Rahman Chowdhury 200,000 2,000,000 2,000,000
10 Golam Faruk Ahmed 200,000 2,000,000 2,000,000
11 Engr. Mohd. Monsuruzzaman 200,000 2,000,000 2,000,000
12 Md. Mizanur Rahman Chowdhury 200,000 2,000,000 2,000,000
13 M.S. Ahsan 200,000 2,000,000 2,000,000
14 Alhaj. Akram Hussain 200,000 2,000,000 2,000,000
15 Md. Tabibul Huq 200,000 2,000,000 2,000,000
16 M. Amanullah 200,000 2,000,000 2,000,000
17 S. M. Shafiqul Islam 200,000 2,000,000 2,000,000
18 A. K. M. Shaheed Reza 200,000 2,000,000 2,000,000
19 Md. Nasiruddin Choudhury 200,000 2,000,000 2,000,000
20 A. F. M. Bahauddin 200,000 2,000,000 2,000,000
21 Morshed Alam 200,000 2,000,000 2,000,000
22 Md. Shahabuddin Alam 200,000 2,000,000 2,000,000
23 Syed Muhammed Abbdul Mannan 200,000 2,000,000 2,000,000
24 Israt Jahan 200,000 2,000,000 2,000,000
25 Sakina Khatun 200,000 2,000,000 2,000,000
26 Anwar Hossain 200,000 2,000,000 2,000,000
360,000,000 3,600,000,000 3,600,000,000
24 Retained Earnings
Opening Balance 5,030,900 (37,422,933)
Net profit/(loss) during the year 73,621,268 42,453,833
78,652,168 5,030,900
Adjustment during the year - -
Closing Balance 78,652,168 5,030,900


2020 2019
Taka Taka
25 Operating Income
Brokerage Commission DSE & CSE 93,535,407 55,991,410
Account Opening Fees 137,800 63,600
BO Account Maintenance Fees 306,050 293,100
Interest on Margin Loan 77,066,610 73,280,541
Account Closing Fees 75,537 30,659
IPO Commission 69,795 64,295
Cheque Dishonor Fees 27,000 55,000
Dividend Income DSE & CSE 4,849,330 7,421,728
Dividend Income from Dealer A/C 12,593,499 13,105,695
Capital Gain from Dealer A/C 5,256,067 6,204,036
Fraction sale proceeds from Dealer A/C 217 -
Dividend Income from Strategic Investment ICB - 4747 2,138,280 -
Capital Gain from Strategic Investment ICB - 4747 9,583,182 -
205,638,774 156,510,064
26 Operating Expenses
Howla Charge DSE & CSE 1,962 400
Laga Charge DSE & CSE 7,488,941 4,321,029
CDBL Charges 3,516,522 2,223,518
Audit Fees 115,000 115,000
Directors Fees 1,012,500 775,000
Bank Charges 18,476 16,892
Interest on ICB Pronodona Fund 4,657,853 3,837,243
DSE, CSE Fees & Others 2,338,006 676,258
Loss on Sale of Shares (Negative equity clients) 73,806 93,805
Loss on Margin Interest Reverse 4,488,452 -
Depreciation 2,913,331 3,961,857
26,624,850 16,021,002
27 Administrative and General Expenses

Salaries & Allowances (Note- 27.1) 38,193,897 35,890,947
Rent, Taxes, VAT, Insurances, Electricity etc. 8,259,099 18,442,239
Postage, Stamps, Telecommunication etc. 1,691,897 1,930,269
Printing & Stationery 557,887 511,764
Repairs and Maintenances 548,165 715,240
Legal & Consultancy Fees 3,779 667,266
Loss on Sale of Fixed Assets - 979,169
Miscellaneous 96,588 123,831
Refreshment 935,172 1,271,285
Utility Expenses 331,106 258,988
Fuel Costs 217,455 362,750
Excise Duty 244,500 273,500
Travel Expenses 209,590 352,978
Investor Awareness Program 3,000,000 2,400,000
PSSL Uniform - 111,766
Business Development Expense 482,478 115,532
54,771,612 64,407,524

2020 2019
Taka Taka
27.1 Salaries & Allowances
Basic Salary 16,838,673 15,034,164
Off Day, Closing & Other Allowance 342,050 328,980
Bonus 2,789,800 2,830,850
House Rent 5,196,862 4,916,500
Conveyance Allowances 1,148,586 1,222,500
Medical Allowances 1,463,109 1,611,833
House Maintenance Allowances 192,000 447,267
Utilities Allowance 192,000 447,267
PF Contribution 1,644,752 1,502,937
Leave Fare Assistance 5,057,750 4,273,200
Security & Cleaner 3,328,315 3,275,449
38,193,897 35,890,947
28 Other Income
Bank Interest 4,910,745 25,520,189

Bank Interest Income From 4747 688,436 -
Bank Interest Income From 3420 605,751 -
Interest Income From FDR 8,412,713 -
Miscellaneous Earnings 308,109 106,500
14,925,754 25,626,689
29 Related Party Disclosures

The following amounts are related to Mercantile Bank Limited (MBL) which is the parent company of Mercantile Bank
Securities Limited (MBSL).
Received from related Party
Bank Overdraft MBL Parent Company 503,649,573 623,608,768

503,649,573 623,608,768
30 Events After the Reporting Period

i) The Board of Directors in its meeting held on 09 March 2021 approved the financial statements of the company for
the year ended 31 December 2020 and authorized the same for issue.
ii) No material events occurred after the date of statement of financial position, non-disclosure of which could affect
the ability of the users of these financial statements to make appropriate evaluation.


Schedule of Property, Plant and Equipment
Annexure- A
Amount in Taka
Cost Depreciation
Adjustment/ Written Down
Balance Addition Balance Rate Adjustment/ Balance
Particulars Disposal Balance as on Charged During Value as on
as on during the as on % Disposal during as on
during the 01.01.2020 the year 31.12.2020
01.01.2020 year 31.12.2020 the year 31.12.2020
year
Vehicle 100,000 - 100,000 20% 65,000 20,000 - 85,000 15,000
Furniture & Fixture 17,025,429 21,683 - 17,047,112 10% 7,788,220 1,470,530 - 9,258,750 7,788,362
Computer Equipment & Machineries 16,854,228 399,925 460,742 16,793,411 20% 14,437,552 1,331,751 460,729 15,308,574 1,484,837
Software 455,250 - - 455,250 20% 296,208 91,050 - 387,259 67,991
As at 31 December 2020 34,434,907 421,608 460,742 34,395,773 22,586,981 2,913,331 460,729 25,039,583 9,356,190
As at 31 December 2019 39,582,406 2,026,703 7,174,202 34,434,907 24,635,555 3,961,858 6,010,433 22,586,981 11,847,926
Annual Report 2020

433
434
Statement of Investment in Shares
Annexure- B
Amount in Taka
Quoted Rate
Number of Total Market Value Unrealized
Sl # Name of the Companies Category Average Costs Total Cost per share as on
Shares as on 31.12.2020 Gain/(Loss)
31.12.2020

Marginable
1 ADVENT A 64,680 29.54 1,910,469 22.80 1,474,704 (435,765)
2 AMANFEED A 49,291 49.16 2,423,291 29.90 1,473,801 (949,490)
3 ARGONDENIM A 231,525 32.05 7,420,049 19.70 4,561,043 (2,859,007)
4 BARKAPOWER A 321,000 31.44 10,092,126 25.70 8,249,700 (1,842,426)
5 BBSCABLES A 97,460 63.56 6,194,283 54.80 5,340,808 (853,475)
6 CITYBANK A 144,400 31.78 4,588,664 24.80 3,581,120 (1,007,544)
7 CONFIDCEM A 15,000 108.85 1,632,724 121.30 1,819,500 186,776
8 DHAKABANK A 358,312 16.23 5,816,051 11.90 4,263,913 (1,552,138)
9 DOREENPWR A 100,000 57.14 5,714,283 61.00 6,100,000 385,718
10 ESQUIRENIT A 30,890 44.59 1,377,378 26.30 812,407 (564,971)
11 GP A 55,000 401.42 22,078,150 347.10 19,090,500 (2,987,650)
12 IDLC A 2,325,000 81.52 189,534,858 63.40 147,405,000 (42,129,858)
13 IFADAUTOS A 22,440 106.70 2,394,294 47.20 1,059,168 (1,335,126)
14 JAMUNAOIL A 29,550 196.11 5,795,106 165.50 4,890,525 (904,581)
15 LHBL A 150,000 53.74 8,061,230 47.80 7,170,000 (891,230)
16 MJLBD A 52,500 99.22 5,209,088 76.90 4,037,250 (1,171,838)
17 MPETROLEUM A 39,000 223.88 8,731,188 198.00 7,722,000 (1,009,188)
18 RINGSHINE A 131,995 9.37 1,237,293 6.40 844,768 (392,525)
19 RUNNERAUTO A 100,000 46.13 4,613,454 50.90 5,090,000 476,546
20 SPCL A 85,513 129.66 11,087,385 73.30 6,268,103 (4,819,282)
21 SQURPHARMA A 104,086 219.18 22,813,890 219.50 22,846,877 32,987
22 TITASGAS A 50,000 78.55 3,927,433 30.80 1,540,000 (2,387,433)
Total Value of "A" Category Instruments 332,652,689 265,641,186 (67,011,503)
Annexure- B
Amount in Taka
Quoted Rate
31.12.2020
1 AAMRANET A 24,380 60.75 1,481,117 45.20 1,101,976 (379,141)
2 ACIFORMULA A 17,000 179.00 3,043,079 118.10 2,007,700 (1,035,379)
3 CRYSTALINS N 10,878 10.00 108,780 39.40 428,593 319,813
4 INTRACO A 105,000 17.44 1,831,598 18.70 1,963,500 131,902
5 OIMEX A 138,176 31.22 4,313,990 24.30 3,357,677 (956,313)
6 ROBI N 135,604 10.00 1,356,040 29.80 4,040,999 2,684,959
7 SEAPEARL B 1,865 9.53 17,764 79.10 147,522 129,757
8 SHASHADNIM A 121,275 55.25 6,700,930 21.60 2,619,540 (4,081,390)
9 UNIQUEHRL A 100,000 59.96 5,996,038 39.60 3,960,000 (2,036,038)
Total Value of "B/G/N" Category Instruments 24,849,334 19,627,507 (5,221,827)
357,502,023 285,268,693 (72,233,330)
Annual Report 2020

435
436
Annexure- C
Amount in Taka
Quoted Rate
31.12.2020

Marginable
1 BATBC A 4,130 1,142.47 4,718,413 1,180.80 4,876,704 158,291
2 EHL A 121,000 48.00 5,807,850 41.30 4,997,300 (810,550)
3 IBP A 19,135 18.82 360,086 19.10 365,479 5,393
4 JAMUNAOIL A 46,208 151.45 6,998,302 165.50 7,647,424 649,122
5 LINDEBD A 2,861 1,220.33 3,491,350 1,281.10 3,665,227 173,877
6 MJLBD A 92,300 78.45 7,241,254 76.90 7,097,870 (143,384)
7 NATLIFEINS A 17,100 263.22 4,501,012 254.50 4,351,950 (149,062)
8 PADMAOIL A 8,736 186.51 1,629,371 205.10 1,791,754 162,382
9 RENATA A 13,900 952.79 13,243,836 1,106.90 15,385,910 2,142,074
10 SINGERBD A 107,000 173.38 18,551,641 175.60 18,789,200 237,559
11 SQURPHARMA A 89,250 203.72 18,182,262 219.50 19,590,375 1,408,113
12 SUMITPOWER A 160,000 43.59 6,973,745 38.90 6,224,000 (749,745)
13 TITASGAS A 100,000 36.14 3,613,514 30.80 3,080,000 (533,514)
14 UTTARABANK A 50,000 23.72 1,185,889 24.00 1,200,000 14,111
Total Value of "A" Category Instruments 96,498,526 99,063,192 2,564,666
1 GHAIL A 200,000 18.14 3,627,719 16.70 3,340,000 (287,719)

2 STANDBANKL A 425,000 8.59 3,648,841 8.30 3,527,500 (121,341)
Total Value of "B/G/N" Category Instruments 7,276,560 6,867,500 (409,060)
103,775,085 105,930,692 2,155,607
Schedule of Investment
Annexure- D
Amount in Taka
Beginning Balance Addition during the Year Encash during the Year
SL. Interest Income Bank Charge Closing
Purchased from A/C No. FDR No. Accrued Rate of Day Length
NO. Principal Principal Excise Principal Interest Balance
Interest Interest Considered Months Cash Accrued Total TDS
duty
1 Meridian Finance Not Applicable 89902 50,000,000 2,496,575 - 9.00% 131 7M 5,765,625 1,292,055 4,561,104 576,563 25,000 10,000,000 5,164,063 40,000,000
2 People's leasing Not Applicable 21000001663 23,019,572 - - 0.00% - N/A - - - - - - - 23,019,572
3 Mercantile Bank Ltd. 110141124531746 0362709 32,926,025 351,812 - 5.50% 65 3M 2,015,928 340,265 2,004,381 201,593 - - - 34,740,360
4 Mercantile Bank Ltd. 110141229036015 0363832 1,330,000 34,689 - 6.00% 120 6M 97,981 27,975 91,267 9,798 - - - 1,418,183
5 Mercantile Bank Ltd. 110141230107104 0364069 2,404,315 1,581 - 5.50% - 3M 149,733 - 148,152 14,931 5,500 2,404,315 129,301 (0)
6 Mercantile Bank Ltd. 110141030643931 0364123 - - 7,506,250 5.50% - 3M 246,566 - 246,566 24,657 3,000 7,506,250 218,909 0.00
7 Mercantile Bank Ltd. 110141131822322 0364297 - - 15,000,000 5.50% 72 3M 225,000 164,937 389,937 22,500 - - - 15,202,500
12 Mercantile Bank Ltd. 110141132403927 0364434 - - 10,000,000 5.50% 87 3M - 131,096 131,096 - - - - 10,000,000
17 Mercantile Bank Ltd. 110141132904087 0364561 - - 10,000,000 5.50% - 3M - - - - 3,000 10,000,000 - -
18 Mercantile Bank Ltd. 110141132921472 0364565 - - 10,000,000 5.50% - 3M - - - - 3,000 10,000,000 - -
Total 109,679,912 2,884,658 112,506,250 900 8,813,333 2,419,897 8,348,572 881,291 39,500 39,910,565 5,512,273 184,661,865
Annual Report 2020

437
Independent Auditor’s Report to the shareholders of
Annexure- J
Report on Audit of Financial Statements material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
Opinion
assurance is high level of assurance, but is not a guarantee
We have audited the financial statements of MBL Asset that an audit conducted in accordance with IASs will always
Management Limited (the company), which comprise the detect a material misstatement when it exists. Misstatement
statement of financial position as at December 31, 2020, can arise from fraud or error and are considered material if,
and the statement of profit or loss and other comprehensive individually or in the aggregate, they could reasonably be
income, statement of changes in equity, and statement of expected to influence the economic decisions of users taken
cash flows for the year then ended, and notes to the financial on the basis of these financial statements.
statements, including a summary of significant accounting
policies.
As part of an audit in accordance with ISAs, we exercise
In our opinion the accompanying financial statements give a
professional judgment and maintain professional skepticism
true and fair view of the financial position of the company as at
throughout the audit.
December 31, 2020 and its financial performance and its cash
flows for the year then ended, in accordance with International We also:
Financial Reporting Standards (IFRSs) the Companies Act
Identify and assess the risk of material misstatement of
1994 and other applicable laws and regulations.
the financial statements, whether due to fraud or error,
Basis of Opinion design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient
We conducted audit in accordance with International
and appropriate to provide a basis for our opinion. The
Standards on Auditing (ISAs). Our responsibilities under
risk of not detecting a material misstatement resulting
those standards are further described in the ‘Auditor’s
from fraud is higher than for one resulting from error, as
Responsibilities for the Audit of the Financial Statements’
fraud may involve collusion, forgery, intentional omission,
section of our report. We independent of the company in
misrepresentation, or the override of internal control.
accordance with the ethical requirement that are relevant to
our audit of the financial statements in Bangladesh, and we Obtain and understanding of internal control relevant
have fulfilled our ethical responsibilities in accordance with to the audit in order to design audit procedures that are
these requirements. We believe that the audit evidence we appropriate in the circumstances, but not for the purpose
have obtain is sufficient and appropriate to provide a basis for of expressing an opinion on the effectiveness of the
our opinion. company’s internal control.
Responsibilities of Management and Those Charged with Evaluate the appropriateness of accounting policies used
Governance for the Financial Statements and the reasonableness of accounting estimates and
Management is responsible for the preparation of financial
statements that give a true and fair view in accordance Conclude on the appropriateness of management’s use
with IFRSs, and for such internal control as management of the going concern basis of accounting and, based
determines is necessary to enable the preparation of financial on the audit evidence obtained, whether a material
statements that are free from material misstatement, whether uncertainty exists related to events or conditions that
due to fraud or error. may cast significant doubt on the company’s ability
to continue as a going concern. If we conclude that
In preparing the financial statements, management is
a material uncertainty exists, we are required to draw
responsible for assessing the company’s ability to continue
attention in our auditor’s report to the related disclosures
as a going concern, disclosing, as applicable, matters related
in the financial statements or, if such disclosures are
to going concern and using the going concern basis of
inadequate, to modify our opinion. Our conclusion is
accounting unless management either intend to liquidate the
based on the audit evidence obtained up to the date of
company or to cease operations, or has no realistic alternative
our auditor’s report. However, future events or conditions
but to do so.
may cause the company to cease to continue as a going
Those charged with governance are responsible for overseeing concern.
the company’s financial reporting process.
Evaluate the overall presentation, structure and content
Auditor’s Responsibilities for the Audit of the Financial of the financial statements, including the disclosures,
Statements and whether the financial statements represent the
underlying transections and events in a manner that
Our objectives are to obtain reasonable assurance about gives a true and fair view.
whether the financial statements as a whole are free from

We communicate with those charged with governance which to the best of our knowledge and belief were
regarding, among other matters, the planned scope and necessary for the purpose of our audit and made due
timing of the audit and significant audit findings, including verification thereof;
any significant deficiencies in internal control that we identify
b) In our opinion, proper books of account as required by
during our audit.
law have been kept by the company so far as it appeared
Report on Other Legal and Regulatory Requirements from our examination of those books; and
In accordance with the Company’s Act 1994, we also report C) The statement of financial position and statement of
the followings: profit or loss and other comprehensive income dealt with
by the report are in agreement with the books of account.
a) We have obtained all the information and explanation
Maria Howlader FCA

Enrollment No. 1063
Howlader Maria & Co.,
Place: Dhaka Chartered Accountants

As at December 31, 2020
Amounts in BDT
Particulars Notes As at As at
December 31, 2020 December 31, 2019
Assets
(A) Non-current assets
Property, Plant & Equipment 4.00 400,247 -
Total 400,247 -
(B) Current assets
Fixed deposit 5.00 72,395,984

Investment in listed securities 6.00 13,181,351
Advance, Deposit and Prepayments 7.00 690,907 260,624
Accounts Receivable 8.00 1,688,936 -
Cash and cash equivalents 9.00 18,762,796 102,319,003
Total 106,719,975 102,579,627
(A+B) Total assets 107,120,222 102,579,627
Equity and liabilities
(C) Equity
Share capital 10.00 100,000,000 100,000,000
Retained earnings 4,657,221 1,342,983
Total 104,657,221 101,342,983
(D) Liabilities
Non-current liabilities - -
Current liabilities
Provision for expenses 11.00 514,979 513,500
Provision for income tax 12.00 1,908,021 723,144
Accounts payables 13.00 40,000 -
Total 2,463,000 1,236,644
(C+D) Total equity & liabilities 107,120,222 102,579,627
The financial statement should be read in conjunction with the accompanying notes.
Chairman Vice Chairman CEO



Statement of Profit or Loss and Other Comprehensive Income
For the year ended at December 31, 2020
Amounts in BDT
Particulars Notes November 30, 2018
For the year ended
to December 31,
December 31, 2020
2019
Operating income - -
Operating expenses 14.00 (816,836) (540,110)
Operating profit/ (loss) (816,836) (540,110)
Other income 15.00 5,726,819 2,606,237

Profit before income tax 4,909,983 2,066,127
Provision for income tax (1,595,744) (723,144)
Net profit after tax 3,314,238 1,342,983


For the year ended December 31, 2020
Amounts in BDT
Particulars
Share Capital Retained earnings Total
Opening balance 100,000,000 1,342,983 101,342,983
Changes during the year
Addition during the year - - -
Net profit after tax - 3,314,238 3,314,238
Total 100,000,000 4,657,221 104,657,221
For the period ended from November 29, 2018 to December 31, 2019
Amounts in BDT
Particulars
Share Capital Retained earnings Total
Opening balance - - -
Changes during the year
Addition 100,000,000 1,342,983 101,342,983
Net profit after tax - - -
Total 100,000,000 1,342,983 101,342,983



Statement of Cash Flows
For the year ended at December 31, 2020
Amounts in BDT
Particulars November 30, 2018
For the year ended
to December 31,
December 31, 2020
2019
Cash Flow from Operating Activities:
Net profit/ (loss) after tax 3,314,238 1,342,983
Adjustments for non-cash items
Depreciation Expense 18,463 -
(Increase)/ decrease in current assets
(Increase)/ decrease in advance, deposit & Prepayments (430,283) (260,624)
(Increase)/ decrease in accounts receivables (1,688,936) -
Increase/ (decrease) in current liabilities
Increase/ (decrease) in provision for expense 1,479 513,500
Increase/ (decrease) in provision for income tax 1,184,877 723,144
Increase/ (decrease) in accounts payables 40,000 -
A. Net Cash Flow from Operating Activities 2,439,839 2,319,003
Cash Flow from Investing Activities

Acquisition of non-current assets (418,710) -
Investment in listed securities at cost (13,181,351)
Fixed deposit (72,395,984) -
B. Net Cash Used by Investing Activities (85,996,045) -
Cash Flow from Financing Activities

Increase/ (decrease) in share capital - 100,000,000
C. Net Cash Flow from Financing Activities - 100,000,000
D. Surplus/ (Deficit) in Cash & Cash Equivalents (A+B+C) (83,556,207) 102,319,003

Cash & cash equivalents at beginning of the year 102,319,003 -
E. Cash & cash equivalents at end of the year 18,762,796 102,319,003


1.0 Company and its activities
1.01 Legal status of the company
MBL Asset Management Limited was incorporated with the Registration of Joint Stock Companies and Firms Bangladesh,
vide registration no: C-148633/2018 dated: November 29, 2018 as a private company, limited by shares under the
Companies Act, 1994 (ACT XVIII of 1994). MBL Asset Management Limited obtained license from Bangladesh Securities
Exchange Commission on January 30, 2020, vide registration code BSEC/Asset Management/ 2020/ 45 to operate as
a full-fledged asset management company. The registered office of the company is at 61, Dilkusha Commercial Area,
Motijheel, Dhaka-1000.
1.02 Principal activities of the company
MBL Asset Management Limited provides high standard of professional services to its individual and institutional clients.
The company’s principal activities include the business of management of mutual fund, asset management, portfolio
management, capital market operation, issue manager, financial intermediary services, and other related services.
i. To manage the assets of any trusts or fund of any type and/ or character and hold, acquire, sell or deal with such
assets of any trust as relevant rules;
ii. To render portfolio management services for institutional clients;
iii. To render corporate advisory services, etc.
2.00 Basis of preparation and significant accounting policies
2.01 Statement of compliance
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), the
Companies Act 1994 and other applicable laws and regulations.
2.02 Other regulatory compliance
As required, MBL Asset Management Limited also complies with the applicable provisions of the following major laws/
statuses;
Income Tax Ordinance, 1994;
Income Tax Rules, 1994;
Negotiable Instrument Act, 1881;
Securities and Exchange Rules, 1987;
Securities and Exchange Commission Act, 1993;
Securities and Exchange Commission (Mutual Fund) Rules, 2001;
Value Added Tax and Supplementary Duty Act, 2012;
Value Added Tax and Supplementary Duty Rules, 2016;
Other applicable laws and regulations.
2.03 Basis of measurement
These financial statements have been prepared on going concern basis under the historical cost convention in
accordance with International Financial Reporting Standards.
2.04 Components of Financial Statements
Statement of financial position

Statement of profit or loss and other comprehensive income
Statement of change in equity
Statement of cash flows
Notes to the financial statements
Annexes
2.05 Functional and presentational currency
The financial statements are presented in Bangladesh Taka (BDT) which is the functional currency of the company. The
amounts in these financial statements have been rounded off to the nearest integer.
2.06 Accounting Year
Accounting and reporting year starting from January 1, 2020 to December 31, 2020 covering 12 months of period.


2.07 Going concern basis
The company has adequate resources to continue in operation for the foreseeable future. For this reason, the directors
continue to adopt going concern basis in preparing the financial statements.
3.00 Significant accounting policies
3.01 Basis of accounting
The financial statements have been prepared under the historical cost convention and after due compliance with the
International Financial Reporting Standards (IFRS), the Companies Act, 1994 and other applicable laws and regulations.
3.02 Financial Instruments
3.02.1 Accounts payable and other payables
Accounts payable and other payables are recognized when its contractual obligations arising from past events are
certain and the settlement of which is expected to result in an outflow from the group of resources embodying economic
benefits.
3.02.2 Fixed deposit
Surplus funds invest as FDR for short time of period to ensure best value of money.
3.02.3 Investment in marketable securities
Investment in marketable securities are initially measured at cost which has been revalued at quoted price as per IFRS 9
Financial Instruments which has resulted in unrealized gain.
3.02.4 Cash and cash equivalents
Cash and cash equivalents comprise cash balance and bank deposits.
3.03 Taxation
Made provision for income tax expenses as per IAS 12: Income Taxes @ 32.5% as applicable for NBFI.
3.03.1 Current tax
Provision for income tax is made on the basis of company’s computation based on the best estimate of taxable profit in
accordance with the Income Tax Ordinance, 1984.
3.04 Provisions
A provision is recognized in the accounts when the Company has legal or constructive obligations as a result of the past
event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate
can be made.
3.05 Statement of Cash Flow
The cash flows statement is prepared in the indirect method as prescribed in IAS 7 Statement of cash flows.
3.06 Event after the reporting date
Event after the reporting date that provide additional information about the company’s position at the reporting date
are reflected in the financial statements. Events after the reporting date that are not adjusting event are disclosed in the
notes.
3.07 Application of International Financial Reporting Standards (IFRS)
The Financial Statements have been prepared in compliance with the guideline set out in IASs and IFRSs as adopted
by Financial Reporting Council (FRC), Bangladesh and applicable in Bangladesh. Mercantile Bank Asset Management
Limited has applied the following IAS and IFRS:
Name of IAS and IFRS IAS and IFRS Status

Presentation of Financial Statements IAS 1 Applied
Statements of Cash Flow IAS 7 Applied
Accounting Policies, Changes in Accounting Estimates and Errors IAS 8 Applied
Events After the Reporting Period IAS 10 Applied
Income Taxes IAS 12 Applied
Related Party Disclosures IAS 24 Applied
Provisions, Contingent Liabilities and Contingent Assets IAS 37 Applied
Revenue from Contracts with Customers IFRS15 Applied

November
December 31, 30, 2018 to
Particulars Note 2020 December 31,
2019
Amounts in BDT Amounts in BDT
4.00 Property, Plant & Equipment
Furniture and fixtures 4.01 274,073 -
Office equipment 4.02 126,174 -
Closing balance 400,247 -
4.01 Furniture and fixtures
At cost 283,524 -
Less Acc Depreciation (9,451) -
Net book value 274,073 -
4.02 Office equipment
At cost 135,186 -
Less Acc Depreciation (9,012) -
Net book value 126,174 -
5.00 Fixed deposit
FDR A/C 7121 51,575,000 -
FDR A/C 7219 20,820,984 -
Total from fixed deposit 72,395,984 -
6.00 Investment in listed securities

Investment in listed securities at cost 13,181,351 -
Total 13,181,351 -
(As there are no unrealized loss in investment in listed securities at cost, creating provision for loss is not necessary)
7.00 Advance, Deposit and Prepayments

AIT deducted on interest income:
Opening balance 260,624 -
AIT on FDR 7.01 311,831 -
AIT in interest income 85,103 260,624
AIT in dividend income 33,350
Total 690,907 260,624
7.01 AIT on FDR
AIT paid from FDR A/C: 7121 175,000 -
Total 311,831 -
8.00 Accounts Receivable
Interest income receivable
Interest income receivable FDR A/C 7121 15.01 1,414,015 -
Interest income receivable FDR A/C 7219 15.02 176,721 -
Dividend income receivable 98,200
Closing Balance 1,688,936 -
9.00 Cash and cash equivalents
Cash in hand 467 -
Cash at bank:
MBL SND A/C -8751 18,549,059 102,319,003
Mercantile Bank Securities Limited 213,271 -
Total 18,762,796 102,319,003


November
2019
Share Capital
Authorized capital 200,000,000 200,000,000
Authorized share capital is BDT 200,000,000 (Twenty crore) which is divided
into 20,000,000 (Two crore) ordinary shares of BDT 10.00 each
10.00 Paid-up Capital Annex 01 100,000,000 100,000,000
Paid-up share capital is BDT 100,000,000 (Ten crore) which is
divided into 10,000,000 (One crore) ordinary shares of BDT 10.00
each paid in full.
11.00 Provision for expenses
Preliminary expenses - 150,000
Office rent - 120,000
Salary and allowances - 180,000
Utility - 6,000
Audit fees - 57,500
Provision for other expenses 1,479
Closing balance 514,979 513,500
12.00 Provision for income tax
Current tax:
Income tax paid during the year (410,867) -
Provision for income tax 1,595,744 723,144
13.00 Accounts payables
Salary and allowance payable 15,000 -
Audit fees payable 25,000 -
Closing balance 40,000 -
14.00 Operating expenses
Preliminary expenses - 150,000
General and administrative expenses 816,836 390,110
Total 816,836 540,110
14.01 General and administrative expenses
Office rent* - 120,000
Service charge of office premises* - -
Salary and allowances 152,661 180,000
Utility 6,000 6,000
Audit fees 25,000 57,500
Bank charge 1,955 1,610
Excise duty 18,000 25,000
Other fees and renewal fees 243,368 -
Conveyance 8,880 -
Director honorarium 96,000 -
Newspaper publication expense 129,371 -
Depreciation expenses 18,463 -
Printing and stationary 68,619
Refreshment 48,519 -
Closing balance 816,836 390,110
* Office rent and service charge of office premises are waved by the lessor due to pandemic sutation for the period
from January 01, 2020 to December 31, 2020.

November
2019
15.00 Other income
Income from investment in listed securities
Dividend income 166,750 -
Interest income:
Interest income from MBL SND A/C -8751 851,026 2,606,237
Interest income from FDR A/C 6824 456,102 -
Interest income from FDR A/C 7121 15.01 3,164,015 -
Interest income from FDR A/C 7219 15.02 1,088,926 -
Total 5,726,819 2,606,237
15.01 Interest income from FDR A/C 7121

Interest income received 1,750,000 -
Add: Gross accrued income 1,414,015 -
Total 3,164,015 -
15.02 Interest income from FDR A/C 7219

Interest income received 912,205 -
Add: Gross accrued income 176,721 -
Total 1,088,926 -

Shareholding position
Annex 1
Sl No. Name of the subscriber No. of subscribed shares Value per share Total share value Payment status
1 Mercantile Bank Limited 5,600,000 10 56,000,000 Bank Deposit
2 Rakim Reza Rousseau 400,000 10 4,000,000 Bank Deposit
3 Living Plus Limited 400,000 10 4,000,000 Bank Deposit
4 Shamsul Alam 400,000 10 4,000,000 Bank Deposit
5 Arena Industries Limited 400,000 10 4,000,000 Bank Deposit
6 Nafisa Saima 400,000 10 4,000,000 Bank Deposit
7 Shimon Inamori 400,000 10 4,000,000 Bank Deposit
8 Ahmed Hossain 400,000 10 4,000,000 Bank Deposit
9 Jahanara Irin 400,000 10 4,000,000 Bank Deposit
10 Rushaed Ahsan 400,000 10 4,000,000 Bank Deposit
11 Sahariar Arefin Alam 400,000 10 4,000,000 Bank Deposit
12 Md. Forhad Hossain 400,000 10 4,000,000 Bank Deposit
Total 10,000,000 100,000,000
Annual Report 2020

449
450
Fixed Asset Schedule
Annex 2
Cost Depreciation
Opening Opening Closing Net book value of
Addition at cost Total value Dep Dep charge for
Sl. No Details of Assets Balance at balance of acc accumulated assets

during the year at cost Rate the year
Cost Dep depreciation (c - iv)
(a) (b) (c = a+b) (i) (iii) (iv = i+iii)
1 Furniture & Fixtures - 283,524 283,524 10% - 9,451 9,451 274,073
2 Office Equipment - 135,186 135,186 20% - 9,012 9,012 126,174
Total 418,710 418,710 - 18,463 18,463 400,247


Members of board of directors
Annex 3
SL No. Name Designation
1 Mr. Rakim Reza Rousseau Chairman

2 Mr. Mati Ul Hasan Vice Chairman
Nominated by Mercantile Bank Ltd.
3 Entity Name : Living Plus Limited Director
Represented by : Mrs. Nargis Anwar
4 Mr. Shamsul Alam Director
5 Entity Name: Arena Industries Limited Director
Represented by : Mr. Tahrin Aman
6 Ms. Nafisa Saima Director
7 Mr. Shimon Inamori Director
8 Mr. Ahmed Hossain Director
9 Mrs. Jahanara Irin Director
10 Mr. Md. Rushaed Ahsan Director
11 Mr. Sahariar Arefin Alam Director
12 Mr. Md. Forhad Hossain Director

13 Mr. G. W. M. Mortaza Director

14 Mr. Adil Raihan Director

MERCANTILE EXCHANGE HOUSE (UK) LIMITED
Company Information
For the year ended 31 December 2020 Annexure-K
Morshed Alam, MP
A. S. M. Feroz Alam
Directors
Md Quamrul Islam Chowdhury
Abul Kalam Azad
Registered Number 07456837

108 WHITECHAPEL ROAD
LONDON
Registered Office
E1 1JD
Jahan & Co
Chartered Management Accountants
Accountants 22 Osborn Street
London
E1 6TD
Bankers Barclays Bank


Directors’ Report
The directors present their annual report and the financial statements for the year ended 31 December 2020
Principal activities
Principal activity of the company during the financial year was of financial intermediation.
Directors
The directors who served the company throughout the year were as follows:
Morshed Alam (from 29/07/2019)
A. S. M. Feroz Alam (from 29/07/2019)
Md Quamrul Islam Chowdhury (from 13/03/2019)
Khoyruzzaman Khan (from 27/02/2019 to 12/03/2020)
Abul Kalam Azad (from 24/06/2020)
Statement of directors’ responsibilities
The directors are responsible for preparing the directors’ report and the financial statements in accordance with applicable law
and regulation.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have
elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the
company for that period. In preparing these financial statements, the directors are required to
select suitable accounting policies and then apply them consistently
make judgments and accounting estimates that are reasonable and prudent
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue
in business
The directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the
financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the
company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.
This report was approved by the board and signed on its behalf by:
Morshed Alam A. S. M. Feroz Alam Md Quamrul Islam Chowdhury Abul Kalam Azad
Date approved: 11 January 2021

Accountants & Management Consultants
Accountants’ Report
In order to assist you to fulfil your duties under Companies Act 2006, we have prepared for your approval the accounts of
MERCANTILE EXCHANGE HOUSE (UK) LIMITED for the year ended 31 December 2020 which comprise the Statement of
Comprehensive Income, the Statement of Financial Position and related notes from the company’s accounting records and from
information and explanations you have given us.
As a practising member of the Chartered Institute of Management Accountants, we are subject to its ethical and other professional
requirements which are detailed at CIMA’s website.
This report is made solely to the member of MERCANTILE EXCHANGE HOUSE (UK) LIMITED, as a body, in accordance with the
terms of our engagement letter. Our work has been undertaken solely to prepare for your approval the accounts of MERCANTILE
EXCHANGE HOUSE (UK) LIMITED and state those matters that we have agreed to state to the Board of MERCANTILE EXCHANGE
HOUSE (UK) LIMITED, as a body, in this report in accordance with the requirements of the Chartered Institute of Management
Accountants and as detailed at its website. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than MERCANTILE EXCHANGE HOUSE (UK) LIMITED and its members as a body for our work or for this report.
It is your duty to ensure that MERCANTILE EXCHANGE HOUSE (UK) LIMITED has kept adequate accounting records and to prepare
statutory accounts that give a true and fair view of the assets, liabilities, financial position and Loss of MERCANTILE EXCHANGE
HOUSE (UK) LIMITED. You consider that MERCANTILE EXCHANGE HOUSE (UK) LIMITED is exempt from the statutory audit
requirement for the year.
We have not been instructed to carry out an audit or a review of the accounts of MERCANTILE EXCHANGE HOUSE (UK) LIMITED.
For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you
have given to us and we do not, therefore, express any opinion on the statutory accounts.
Matters to consider
-Trade Debtors balance of £46524 is subject to further confirmation and audit from the management of the company.
Jahan & Co
22 Osborn Street
London
E1 6TD
11 January 2021


Income Statement
2020 2019
Note
£ £
Turnover 141,124 320,223
Gross profit 141,124 320,223
Selling and distribution costs (2,900) (5,537)
Administrative expenses (209,604) (250,786)
Other operating income 2 17,069 -
Operating profit/(loss) 3 (54311) 63,900
Profit/(Loss) on ordinary activities before taxation (54,311) 63,900
Tax on profit on ordinary activities 5 - (438)
Profit/(Loss) for the financial year (54,311) 63,462

2020 2019
Note
£ £
Fixed assets
Tangible fixed assets 6 55,721 64,249
55,721 64,249
Current assets
Debtors: amounts falling due within one year 7 59,036 57,605
Debtors: amounts falling due after one year 8 12,500 12,500
Cash at bank and in hand 8,750 60,144
80,286 130,249
Creditors: amount falling due within one year 9 (63,077) (67,257)
Net current assets 17,209 62,992
Total assets less current liabilities 72,930 127,241

Net assets 72,930 127,241
Capital and reserves
Called up share capital 10 340,000 340,000
Profit and loss account 11 (267,270) (212,759)
Shareholders funds 72,930 127,241
For the year ended 31 December 2020 the company was entitled to exemption from audit under Section 477 of the Companies Act
2006 relating to small companies.
Directors’ responsibilities:
1. The members have not required the company to obtain an audit of its accounts for the year in question in accordance with Section 476
2. The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to
accounting records and the preparation of accounts
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small
companies regime of Part 15 of the Companies Act 2006.
The financial statements were approved by the board of directors on 11 January 2021 and were signed on its behalf by:
Morshed Alam A. S. M. Feroz Alam Md Quamrul Islam Chowdhury Abul Kalam Azad

Equity share Retained

Total
capital Earnings
£ £ £
At 01 January 2019 340,000 (276,221) 63,779
Profit for the year 63,462 63,462
Total comprehensive income for the year - 63,462 63,462
Total investments by and distributions to owners - - -
At 31 December 2019 340,000 (212,759) 127,241
At 01 January 2020 340,000 (212,759) 127,241
Profit for the year (54,311) (54,311)
Total comprehensive income for the year - (54,311) (54,311)
Total investments by and distributions to owners - - -
At 31 December 2020 340,000 (267,070) 72,930


General Information
MERCANTILE EXCHANGE HOUSE (UK) LIMITED is a private company, limited by shares , registered in England and Wales ,
registration number 07456837 , registration address 108 WHITECHAPEL ROAD, LONDON, E1 1JD.
1. Accounting policies
Significant accounting policies
The accounts have been prepared under the historical cost convention and in accordance with FRS 102, the financial
reporting standard applicable in the UK and Republic of Ireland (as applied to small entities by Section 1A of the standard)
Turnover
Turnover comprises the invoiced value of goods and services supplied by the company, net of Value Added Tax and trade
discounts.
Government grants
Government grants received are credited to deferred income. Grants towards capital expenditure are released to the income
statement over the expected useful life of the assets. Grants received towards revenue expenditure are released to the
income statement as the related expenditure is incurred.
Foreign currencies
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rate of exchange ruling at
the statement of financial position date. Transactions in foreign currencies are recorded at the rate ruling at the date of the
transaction. All foreign exchange differences are included to the income statement.
Tangible fixed assets
Tangible fixed assets, other than leasehold land & building, are stated at cost or valuation less depreciation and any provision
for impairment. Depreciation is provided at rates calculated to write off the cost or valuation of fixed assets, less their
estimated residual value, over their expected useful lives on the following basis:
Fixtures and Fittings 5% Reducing Balance
Land and Buildings 0% Reducing Balance
2020 2019
£ £
2. Other operating income
Government Grants 17,069 -
17,069 -
3. Operating profit/(loss)
The operating profit/(loss) is stated after charging:
Depreciation of tangible fixed assets 8,528 3,095
4. Average number of employees

Average number of employees during the year was 5 (2019 : 6)
5. Tax on profit on ordinary activities
UK Corporation Tax - 438
- 438

6. Tangible fixed assets
cost or valuation
Fixtures and Land and

Total
Cost or valuation Fittings Buildings
£ £ £
At 01 January 2020 78,800 4,098 82,898
Additions - - -
Disposals - - -
At 31 December 2020 78,800 4,098 82,898
Depreciation
At 01 January 2020 18,649 - 18,649
Charge for year 8,528 - 8,528
On disposals - - -
At 31 December 2020 27,177 - 27,177
Net book values
Closing balance as at 31 December 2020 51,623 4,098 55,721
Opening balance as at 01 January 2020 60,151 4,098 64,249
The net book value of Land and Buildings includes £4,098(2020 £4,098) in respect of assets leased under finance
leases or hire purchase contracts.
2020 2019
£ £
7. Debtors: amounts falling due within one year
Trade Debtors 46,524 53,094
Prepayments & Accrued Income 7,114 218
Other Debtors 5,398 4,293
59,036 57,605
8. Debtors: amounts falling due after one year

Other Debtors 12,500 12,500
12,500 12,500
9. Creditors: amount falling due within one year

Trade Creditors 6,700 -
Amounts Owed to Group Undertakings - 52,000
Corporation Tax 438 438
PAYE & Social Security 1,059 -
Accrued Expenses 39,479 12,499
Other Creditors 15,267 2,320
Pension Scheme 134 -
63,077 67,257
10. Share Capital

Allotted, called up and fully paid
340,000 Class A shares of £1.00 each 340,000 340,000
340,000 340,000
11. Profit and loss account

Balance at 01 January 2020 (212,759)
Loss for the year (54,311)
Balance at 31 December 2020 (267,070)
12. Cash in hand and bank

Total Cash in hand is £4623 (2019 - £15557) and cash at bank is £4127 (2019 - £44587)


Detailed Income Statement
2020 2019
£ £
Turnover
Remittance Commissions 75,946 173,451
ATM Commissions 554 2,680
Exchange Gains 34,041 106,253
Bureau De Change Gains 1,501 8,967
Rental Income 29,082 28,872
141,124 320,223
Gross profit 141,124 320,223
Selling and distribution costs
Advertising 2,900 5,537
(2,900) (5,537)
Administrative expenses
Wages & Salaries 86,735 95,691
Pension Contributions 2,719 4,179
Staff Training 12 2,202
Staff Welfare 538 1,816
Accountancy Fees 4,975 3,575
Legal and Professional Fees (Allowable) 5,620 5,790
Cleaning of Premises 842 1,325
Water, Gas & Electricity 7,325 6,615
Rent & Rates 55,313 58,782
Security Costs 287 346
General Travel Expenses 403 576
Bank Charges 30,948 56,968
Depreciation Charge: Fixtures & Fittings 8,528 3,095
Fees & Subscriptions 1,839 1,520
General Insurance 1,707 1,384
Computer Expenses - 260
Repairs & Renewals - 2,096
Stationery & Postage 497 1,200
Telephone, Fax & Internet 1,293 1,047
Compliance 23 812
Meeting Expenses - 1,507
Other operating income (209,604) (250,786)
Government Grants 17,069 -
17,069 -
Operating profit/(loss) (54,311) 63,900
Profit/(Loss) on ordinary activities before taxation (54,311) 63,900
Tax on profit on ordinary activities
UK Corporation Tax - 438
- (438)
Profit/(Loss) for the financial year (54,311) 63,462

ABBREVIATIONS
AC Audit Committee
ALCO Asset Liability Committee
ATM Automated Teller Machine
BB Bangladesh Bank
BRPD Banking Regulation and Policy Department
CDM Cash Deposit Machine
CRR Cash Reserve Ratio
CRAR Capital to Risk Weighted Assets Ratio
CSR Corporate Social Responsibility
EC Executive Committee
EPS Earning Per Share
EVA Economic Value Added
GDP Gross Domestic Product
ICAB Institute of Chartered Accountants of Bangladesh
ICAAP Internal Capital Adequacy Assessment Process
ICCD Internal Control & Compliance Division
IAS International Account Standard
IFRS International Financial Reporting Standard
IT Information Technology
LC Letter of Credit
MBL Mercantile Bank Limited
MBSL Mercantile Bank Securities Limited
NAV Net Assets Value
NPL Non performing Loan
NIM Net Interest Margin
NRB Non Resident Business
OBU Offshore Banking Unit
PCBs Private Commercial Banks
ROA Return on Assets
ROE Return on Equity
SAM Special Assets Management
SME Small and Medium Enterprise
SLR Statutory Liquidity Ratio

OVERVIEW
NOTE

PROXY FORM
I/we, ………………………………………………………………………………………………………………………………………
of …………………………………………………………………………………………………………………………………………
being a member of Mercantile Bank Limited do hereby appoint ………..…………………………………………………………………
of …………………………………………………………………………………………………………………………………………
as Proxy / Attorney in my absence to attend and vote for me and on my behalf at the 22nd Annual General Meeting of the Company
to be held on April 28, 2021 at 11.00 a.m. virtually by using digital platform through the link https://mbl.bdvirtualagm.com and at any
adjournment thereof.
As witness my hand this ……………………………………………………day of ……………………………… 2021.
Revenue Stamp
Signature of Member Signature of Proxy
of Tk. 20
Folio No. ……………………………………………
BO No.
Note:
1. The “Proxy Form”, duly filled, signed and stamped at BDT 20 must be sent through email to share@mblbd.com not later than 48 hours before commencement of the AGM.
2. Signature of the shareholders should agree with the specimen signature registered with the Company and Depository Register.
ATTENDANCE SLIP
I hereby record my attendance at the 22nd Annual General Meeting of the Company being held on April 28, 2021 at 11.00 a.m. virtually
by using digital platform through the link https://mbl.bdvirtualagm.com
Name of the member / Proxy , ……………………………………………………………………………………………………………..
Folio No. ……………………………………………
BO No.
Signature

MBL Annual Report 2020

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OVERVIEW

Annual Report 2020 1

December 29, 2014

September 20, 2012

December 06, 2011

September 14, 2011

December 30, 2009

June 06, 2009

February 26, 2004

February 16, 2004

October 21-22, 2003

June 30, 2003

June 02, 1999

May 20, 1999

2 Mercantile Bank Limited

October 03, 2018

June 02, 2018

May 11, 2018

April 18, 2018

November 29, 2018

December 24, 2018

August 21, 2019

November 30, 2019

June 29, 2020

November 26, 2020

Annual Report 2020 3

Balance Sheet Size

2020 GROWTH 2019

330,785.56 4.56% 316,363.47

2020 GROWTH 2019

9,840.16 5.00% 9,371.58

2020 GROWTH 2019

22,101.78 5.71% 20,908.29

2020 GROWTH 2019

248,994.39 5.11% 236,890.45

4 Mercantile Bank Limited

Total Off Balance Sheet

2020 GROWTH 2019

108,112.30 6.00% 101,993.74

2020 GROWTH 2019

302,164.54 3.77% 291,195.32

2020 GROWTH 2019

28,621.02 13.72% 25,168.15

2020 GROWTH 2019

12,497.01 1.02% 12,370.38

Annual Report 2020 5

Subsidiary Overview Compliance Report on BSEC Notification 278

Products & Services 209 Accountants’ Report 454

All Shareholders of Mercantile Bank Limited,

Abu Asghar G. Haruni

By order of the Board

Dated: April 06, 2021 Abu Asghar G. Haruni

Snapshot of reporting framework

International Integrated Reporting Council’s (IIRC) Integrated Reporting <IR> Framework

The Companies Act, 1994 and amendment thereon

Global Reporting Initiatives (GRI) standards.

10 Mercantile Bank Limited

Other Regulatory Framework

The Banking Companies Act, 1991(amendment till 2018).

Bangladesh Bank Circulars and Guidelines.

The Companies Act, 1994 and amendment thereon

Bangladesh Labor Act, 2006 (amendment 2013).

Other applicable laws and regulations.

Financial Human Institutional Intellectual Social & Natural