Sustainability Analysis SUSTAINABLE BANKING

202 Mercantile Bank Limited

203Annual Report 2020

Sustainability Analysis

SUSTAINABLE BANKINGHIGHLIGHTS 2020

7,731,981 nos SMS Alerts sent to

the Customers

105,239 nos E-Statements sent

to Customers

7,154 Man hours invested in Training

(Both Physical & Virtual)

1,510.2 Million Investments in

renewable energy and environment-friendly

projects

BDT 303.41 MillionCommunity Investment

61 Branches powered by Solar Energy of

55.85 KW

TRIPLE BOTTOM LINE:

PEOPLE

MBL always plays a dynamic role in contributing to the society

through different CSR program. Details has been illustrated in our CSR report and Corporate

Governance Report.

PLANET

MBL always focuses on green finance in the year 2020 our

loan portfolio stood at Taka 1,510 million.

PROFIT

Being the year of world pandemic, In the year 2020 operating profit generated

Taka. 3,947 million.


REPORTPARAMETER

Reporting period

January 1, 2020 to December 31, 2020

Date of the most recent previous report

Sustainability Analysis Chapter of MBL Annual Report 2019

Reporting cycle

Annual

Feedback and further information and suggestions

We welcome any feedback on this sustainability report. For further

information and comments, please contact Sustainability Reporting

Team of the Bank.

Disclosure

GRI Standards: Core Option

External assurance

Under management consideration

“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:

Mercantile Bank Ltd. encourages green banking financing to achieve its long-term strategic goal being a green friendly bank where every decision is to be made with regard to both financial and environmental considerations. Green banking schemes for the Bank include electronic & paperless banking, efficient energy usage, green house gas emissions reduction, carbon footprint mapping for the bank, environmentally friendly finance and renewable energy sector investment etc.

Batter and faster customer services

In a banking industry our competitors are only a click away, batter and faster customer services can make differentiate with competitor. Today’s customers have access to an endless amount of information about every competitor. So creating customer confidence with instant support can help us to go in a long path way. We are concentrating on it by time to time reviewing product customer demand.

Financial Inclusion through Agent Banking, Sub-Branch, Digital Banking

Through introduction of Agent Banking, Sub-branch and

digital Banking MBL create a sound financial inclusion process in the industry where un-bank people will come to the banking net. And avail all facility of the Government and other organization.

Banking Operation align with SDG'S

Business strategy of MBL is consistent with contribute to individuals’ needs and society’s goals, as expressed in the Sustainable Development Goals. MBL believes including its Board and employees have a comprehensive understanding of the SDGs. In this regards analysis of portfolio focus areas, products or services to clients and customers are consistent with the SDGs. This will likely require banks to proactively seek to increase finance in green and socially responsible sectors and decrease investment in non-aligned sectors.

The UN Sustainable Development Goals (SDGs), adhered to by more than 190 countries, identified 17 key global issues. Bangladesh is one of the signatories of this. MBL is in a process of managing relationships with stakeholders in the context of the world’s foremost sustainability challenges and committed towards these goals and is helping to achieve them through its business activities and community investment program.


MBL APPROACH TO SDGS:

"End poverty in all its forms everywhere."

“End hunger, achieve food security and improved nutrition, and promote sustainable agriculture”

“Ensure healthy lives and promote well-being for all at all ages.”

“Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.”

“Achieve gender equality and empower all women and girls.”

“Ensure availability and sustainable management of water and sanitation for all.”

Partners with NGO

Coverage of 50 districts

101 Agent Banking Outlets.

Sub-Branch

Digital Banking

Employment generation

Fresh Job opening

Internship

Financing at pharmaceutical industries and diagnostic center.

Medical retainer at Head office

Discounted diagnostic facilities.

Day care center.

Scholarship program

MBL Young Banker Appreciation Award

Donation to School & College

23.04% Female representation in Executive & Officer

Special Loan & Deposit Product.

Specially procured filtered mineral water.

Loan for Water Treatment Plan.

https://en.wikipedia.org/wiki/Hunger#Global_initiatives_to_end_hunger

https://en.wikipedia.org/wiki/Food_security

https://en.wikipedia.org/wiki/Food_security

https://en.wikipedia.org/wiki/Sustainable_agriculture



“Ensure access to affordable, reliable, sustainable and modern energy for all.”

“Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.”

“Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation”

“Reduce inequality within and among countries.”

“Make cities and human settlements inclusive, safe, resilient, and sustainable.”

“Ensure sustainable consumption and production patterns.”

Solar/renewable finance

61 Solar Power Branch 55.85kw

Use of day light

Use of Energy efficient Bulb

To show due respect to each other

Corporate banking, consumer and retail banking, SME financing and agri banking.

“UDAYAN” loan product for start-up business

“MBL Rainbow” Apps for digital Banking.

QR code introduction

E-KYC implementation

To show due respect to each other

Loan given to ECO Friendly Project

Reduction of Pollution

Solar/renewable finance

61 Solar Power Branch 55.85kw

Use of day light

Use of Energy efficient Bulb


MBL APPROACH TO SDGS:

“Take urgent action to combat climate change and its impacts by regulating emissions and promoting developments in renewable energy.”

“Conserve and sustainably use the oceans, seas and marine resources for sustainable development”

“Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss.”

“Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.”

“Strengthen the means of implementation and revitalize the global partnership for sustainable development.’’

Effluent Treatment Plant (ETP) & Hybrid Hoffman Kiln (HHK).

Climate risk fund.

Urban Building Safety Project under JICA/Bangladesh Bank Refinancing Scheme.





Good governance

Strong business ethics

Relationship with the Government, local and international organizations.



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.

Current Deposit (CD) Accounts

Savings Bank Deposit (SB) Accounts

Special Notice Deposit (SND)

Fixed Deposit Receipt (FDR)

Scheme Deposits

Masik Sanchaya Prokolpo (MSP)(gvwmK mÂq cÖKí)

Digun Briddhi Amanat Prokolpo (DBAP)(wØ¸Y e„w× AvgvbZ cÖKí)

Masik Munafa Amanat Prokolpo (MMAP)(gvwmK gybvdv AvgvbZ cÖKí)

Poribar Surokkha Amanat Prokolpo (PSAP) (cwievi myiÿv AvgvbZ cÖKí)

Aporajita Masik Munafa Prokolpo (AMMP)(AcivwRZv gvwmK gybvdv cÖKí)

Troi-Masik Munafa Amanat Prokolpo (TMAP)(ˆÎgvwmK gybvdv AvgvbZ cÖKí)

Super Munafa Amanat Prokolpo (SMAP)(gybvdv AvgvbZ cÖKí)

Shikha Porikolpona Sanchaya Prokolpo (SPSP)(wkÿv cwiKíbv mÂq cÖKí)

Dergun Briddhi Amanat Prokolpo (1.5TBAP)(†`o¸b e„w× AvgvbZ cÖKí)

Agrim Munafa Amanat Prokolpo (AMAP)(AMÖxg gybvdv AvgvbZ cÖKí)

Bishes Sanchaya Prokolpo (BSP)(we‡kl mÂq cÖKí)

Pension ebong Poribar Support Prokolpo (PPSP)

(†cbkb Ges cwievi mv‡cvU© cÖKí)

Others:Non Chequeable Savings Bank Account (NSB A/C)School BankingSavings Bank Account for MSS

Corporate Loans

Short Term Finance

Long Tern Finance

Real Estate Finance

Import Finance/Trade Finance

Work Order Financing/Construction Business

• Earnest Money Financing Scheme- SOD (EMF)

• Bid Bond

• Performance Guarantee (PG)

• Advance Payment Guarantee (APG)

• Shipping Guarantee

SME Financing

CHAKA (Term Loan)

SAMRIDDHI (Continuous Loan)

MOUSUMI (Short Term Seasonal Loan)

ANANNYA (Women Entrepreneur’s Loan)

SANCHALAK (A mix of Term, Time & Continuous Loan)

UNMESH (Foreign Trade Finance)

UDAYAN (Start-up financing for the young entrepreneurs)

FACTORING OF RECEIVALBLES

Retail Loans

Home Loan

Cottage Loan

Car Loan

Personal Loan

House Furnishing Loan

Doctor’s Loan

Education Loan

Secured Over Draft (SOD)

Refinance Scheme for Green Product/Initiatives

MBL Prabasi Masik Sanchaya Prokolpo(gvwmK cÖevmx mÂq cÖKí)MBL Prabasi Sanchaya Hisab(cÖevmx mÂq wnmve)


Agriculture Loan/ Financial inclusion

NABANNO (Krishi/Polli Loan)

SAKTI (ETP/Bio-Gas/Solar Energy Loan)

MBL Card products

MBL Visa Debit Card

MBL VISA Credit Card

Types:

• Local Credit Card

• International Credit Card

• Dual Credit Card

Categories:

• Platinum Card

• Gold Card

• Classic Card

MBL VISA Prepaid Cards

• MBL VISA Medical Card

• MBL VISA International Student Card

• MBL VISA Virtual Card

• MBL Hajj Prepaid Card

• Supplementary Card

Islamic Banking

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

• Bai-Murabaha

• Bai-Muajjal

• Bai-Salam

• Musharaka

• Quard

Long Term investment Finance

• Hire-Purchase under Shirkatul Melk (HPSM)

Other Services

Online Banking

Mobile Banking (MyCash)

Internet Banking

Off-Shore Banking

NRB Banking

SMS Banking

Locker Service

Utility Bills Pay Service

ATM Booth Services

Cash Deposit Machine (CDM) Service

• Customs Guarantee • SOD (WO)

Export Finance (Pre-Shipment Credit/Finance) • Export Cash Credit (Hypothecation/

Pledge) • Export Cash Credit Against Trust Receipt • Advance Against Anticipatory Letter of

Credit • Back to Back Letter of Credit • Packing Credit • SOD (Export)

Post-Shipment Credit/Finance • Negotiation of Export Documents (FDBP) • Purchase of Documents against DP or DA

BillsStructured Finance

• Project Finance • Syndication

For more information please visit

www.mblbd.com



STAKEHOLDERENGAGEMENT

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.

LocalCommunities

STAKEHOLDERS

MBL’S

Customers

Employees

Subsidiaries

Government& Regulatory

Authority

Board &Management

BusinessPartners

Shareholders/investors

Our key stakeholders include:


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

Stakeholder Ways of Interaction Key issues and Concerns for Stakeholders Value Addition for MBL

Customers

• Customer hotline 16225 (24/7)

• Customer Relationship Management

• Multi-channel engagement, including face-to-face customer engagement

• Customer workshops

• Customer feedback channels (in-branch, email, contact centre, social media)

• Ongoing market research and product innovation

• Customer Service Enhancement Program & Complaints Management Cell

• Media campaigns/ advertisements

• Website information updates

• Customers Queries, Complaints and suggestions

• Good return from deposits

• Fast service delivery with excellence

• Product varieties catering market demand

• Online banking solutions with secured transactions, privacy and confidentiality

• Ensuring better and uniform services to the customers

• Customer interactions and suggestions

• Affordability of banking, fees and interest

• Reaching out to customers by widening our geographic footprint in terms of establishing a larger number of branches and SME centers /Agent banking/Sub-branch.

• Transforming existing branches/ unit offices to cater to diversified customer requirements

• Continuously innovating new products and operational processes for reinforcing customer benefit

• ALCO sits every month to decide pricing and rates based on market analyses

• All network nodes are run by online core banking system (CBS)

• E-products like SMS banking, EGP service, E- commerce, E- payment solution, internet banking

• Front desks and relationship managers ensure fast and high quality service 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

Employees

• Quarterly/Half yearly Strategic Business conferences physically/virtual platform

• Training, workshops and orientation program, internal meeting, group emails

• Intranet circulation through MBL Web Portal (HRD Circular, Information Circular and Instruction Circular)

• Physical fitness, Future Leadership Development Program, safe and clean working environment

• Newsletter in the name of ‘MBL insight’

• Talents and performances Development

• Regular training for updated rules & regulation

• Inflation adjustment in pay package planning

• Job description setting as per individual skill Performance driven career progression

• Healthy working environment and Policy formulation for safe working atmosphere

• Future Leadership Development Program & Sports Tournament

• 7,154 man hours training for human capital in 2020 both physical & Virtual platform.

• Salary package adjusted in line with market competitiveness and inflation

• Work life balance

• Yearly performance bonus for employee motivation

• Well set KPIs for performance and inherent quality analysis

• All sorts of safety measures such as fire extinguishers, separate stairs are available and smoke free premise



Stakeholder Ways of Interaction Key issues and Concerns for Stakeholders Value Addition for MBL

Subsidiaries

• Policies formulation

• Implementation of new strategies considering economic and business environment.

• Goals and Strategic focuses are based on local business environment & regulatory requirement

• Review of market and environment before setting its strategic priorities ensuring proper representation from subsidiaries for transference.

Government &

Regulatory Authority

• One-on-one meetings

• Adhering to all local regulations and circulars issued by Bangladesh Bank

• Strict ethics & compliance with applicable laws, rules and regulations

• Directives, notifications, and guidelines

• Meetings and discussions with Board and Senior Management

• Submission of necessary reports, returns and statements

• Proper compliance with laws & regulations

• Timely reporting as per requirement

• Timely payment of income tax and VAT accurately

• We ensure proper compliance and timely reporting to government bodies and regulators

• Contributed Tk.4,693.04 million to National Exchequer which significantly contributed to Government’s revenue collection

• Enhanced transparency

Board & Management

• Decisions based on financial and business delegation of different levels

• Major decisions must be placed to board for approval

• Governance principles, policies & procedures formulation.

• Strategic focus & value creation, Strategic business planning

• At least one board meeting in every month, frequent executive committee meeting, audit committee meeting etc.

• Board members meet management on various occasions like annual & semiannual business conferences, bank’s anniversary celebration.

Business Partners

Procurement management,

training and communication

• Fair trade, fair enlistment,

• Sustainable and stable growth of the bank

• Free from any bias or coercion from influencing quarters

• Fair play & competition to award work order.

• Timely payment to vendors.

Shareholders/ Investors

AGM, EGM, annual & semiannual report, ZOOM meeting, publishing quarterly financials, announcement to DSE & CSE, Press Conference and media releases, credit rating and PSI in newspapers

• Healthy return on investments and stable dividend policy

• Growing earnings

• Sound governance and risk management, ratings of the bank based on overall financial performances

• Maintained attractive plough back ratio

• Timely payment of debt with stated return

• Established risk management culture

• Transparency & integrity in financial reporting

• Maintained consistent ratings through financial commitments

• Each queries of the investors meet up through our share department efficiently and fairly

Local Communities

Promoting financial inclusion both for banked and unbanked people, CSR contribution- Scholarship to poor meritorious students

• Provide banking facility to geographically dispersed poor segment of the society

• Benefit economy by poverty reduction through banking services to rural poor people

• Support under privileged people through Social Safety Net programs

• Strongly consider environmental and social impact and restrain from adverse impact upon society

• Target segment is under-developed and under-privileged people

• Services to old citizen, widow and disable beneficiaries

• Significant contribution to education, health, disaster management, art & culture, environmental and sports sector


MATERIALASPECT

Material Aspect Boundaries inside the Organization Boundaries outside the Organization

Financial Inclusion Introduce Agent Banking, Sub-branch for unbanked people

Overall economy will have a positive vibe through augmenting economic activities

Energy Consumption Use of Solar and Natural LightReduction of Carbon emission and the

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

HR Development Enhancement of human capital

through training, job rotation and future leader development program

Customer will be benefited through updated services



ENVIRONMENTALPERFORMANCE

Sustainable Environmental Management forms a part of Mercantile Bank’s strategy and business model. We understand that the true cost of waste is not just in its disposal – it encompasses the inefficient and unnecessary use of resources like energy and water. Hence, we are committed to a clean environment and the fight against climate change. This commitment is reflected in certain aspects of our business process, such as analysis of the social and environmental risks of our financing activities, and measurement of our environmental footprint.

Environmental awareness amongst employees at all levels has been a key driver for the successful implementation of all our action plans. Furthermore, sharing of information at all levels with employees, business partners, regulatory authorities and the public in general has further strengthened our resolve on responsible environmental stewardship.

In continuance of our commitment to sustainability, Mercantile Bank took careful measures and implemented apt systems to enable us comply with all environmental and social regulations relating to our banking activities and operations. We continued to work towards improving our sustainability programs and reducing our environmental footprints.

Paper Consumption

Across the Bank, we have automated almost all of our processes, thereby, reducing the need to print. However, if there is a need to print, we have ensured that eco-printing practices are adopted. We also ensured that all paper stationeries used in printing internal memos are re-used, where possible.

Also, transactions through our mobile and electronic banking platforms have increased significantly amongst our customers. These approaches have significantly reduced our paper purchase by 32.35% and have

resulted in substantial cost-savings. A total of 31,552. Reams of paper was consumed in 2020, equivalent to 101,603 kg (Assuming 3.20 kg per ream).

Step # 1 Measure Output

Step # 2 O�set Paper Usage

Step # 3 Track the Impact


MBL has developed a software for inventory management “Namely MBL-iRSM” where every department has to create his departmental stationery uses, upon which departmental senior gradually approves it in to the system after that it will be notify

to the GSD (General Service Department) concerned officials where all requisition meticulously reviewed and approved accordingly. As a result MBL can have a good control over stationery consumption.

ELECTRICITY

WATER BILL

NATURAL GAS

GENERATOR FUEL

PAPER CONSUMPTION

(6.64)

(0.37)

(0.03)(1.63)

(9.41)

-7.49%

-5.60%

-7.89%-28.95%

-15.71%

BDT in million (Decrease) %

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.

Conserving natural resources to help protect the planet 2020



Energy Consumption BDT in Million

Type 2020 2019 2018Electricity 82.05 88.69 88.36Water Bill 6.24 6.61 6.59Natural Gas 0.35 0.38 0.38Generator Fuel 4.00 5.63 5.61Other 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

Instruments Quantity Cost of Conventional Practice

Cost of Green Banking 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

Water is essential to our operations. We also take very seriously our responsibility to carefully manage our water resources. Over the course of the year, we took significant steps to optimize our water consumption. Throughout the Bank, we aim to halve our water usage in the coming years. We will continue to work towards improving our sustainability programs and reducing our environmental impact.

Diesel consumption

We used a total of 61,491 liters of diesel in the reporting year. We are currently exploring other cleaner and greener alternative means of power generation in order to reduce our diesel consumption further in the coming years.

Solid Waste Management

Over the years, the Bank has adopted sustainable waste management practices. In 2020, Mercantile Bank took

effective initiatives for proper disposal and management of paper, plastic, glass and can waste at its head office and annexes. Since its commencement, we have attained a significant reduction in the amount of waste generated that goes to landfills in these locations. This reduction was achieved through our aggressive awareness campaigns on various platforms. Another contributor is the proven effectiveness of our onsite recycling bins, which encourage and enable the appropriate sorting of waste at the source. We are looking to reduce our environmental pollution in the coming years; as such, we are expanding the recycling initiative to our branches nationwide.

Compliance with Environmental Laws and Regulation

Mercantile Bank did not suffer any fines, sanctions, penalties, queries – financial or nonfinancial– owing to non-compliance with environmental laws and regulations prevailing in Bangladesh.

AWARENESS STICKER



ECONOMIC IMPACTREPORT

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 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.

Capital Adequacy

MBL is maintaining a strong capital base. Total eligible capital of the Bank stood at BDT 3,341.95 Crore (Solo Basis) as on December 2020 which is well above the minimum requirement of BDT 3,068.58 Crore as on the same date. Capital Adequacy Ratio was 13.61% as on December 2020 as compared to minimum requirement of 12.5% as per Basel III including buffer.

Particulars Dec-20 Dec-19

Tier-1 2,128.45 2,009.89

Tier-2 1,213.50 1,280.09

Total Eligible Capital 3,341.95 3,289.98

Total Risk Weighted Assets (RWA) 24,548.64 23,641.26

Capital to Risk Weighted Assets Ratio (CRAR) 13.61% 13.92%

Tier-1 Capital to RWA 8.67% 8.50%

Tier-2 Capital to RWA 4.94% 5.42%

Minimum Capital Requirement (MCR) 3,068.58 2,955.16

Surplus/(Deficit) 273.37 334.83


Income from Banking Services 27,275.79 31,292.96

Less: Cost of services & Supplies -19,090.91 -20,547.04

Value added by Banking Services 8,184.88 10,745.92

Provision for loans & off – balance sheet items (1,236.41) (3,875.25)

Total 6,948.47 6,870.67

(BDT in Crore)

Total Eligible Capital

2019

Minimum CapitalRequirement (MCR)

20202,95

5.16

3,0

68.5

8

3,28

9.98

3,34

1.95

(BDT in Million)

2019

6,870.67

2020

6,948.47

VALUE ADDED STATEMENT

(BDT in crore)

(BDT in million)


Particulars Year 2020 Year 2019

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

Particulars (Amount in Million)

2020 2019

Shareholders' Equity 22,101.78 20,908.29

Add: Cumulative provision for loans and advances and off-balance sheet exposure

12,718.59 13,120.92

Total Shareholders' Equity 34,820.37 34,029.21

Average Shareholders' Equity 34,424.79 32,031.78

Particulars No of Shares Outstanding Per Share BDT in

Million

Market value 984,016,217 12.70 12,497.01

Book value 984,016,217 22.46 22,101.78

Market value added -9,604.77

(BDT in Million)Distribution of value addition

Distribution of value addition

To Government as Income Tax To Community InvestmentDepreciation Retained Earning

To Employees & Directors To Statutory Reserve To General Reserve

22.62%

11.64%

4.35%7.89%

2.15%

43.56%

7.78%

Economic Value Added Statement

Economic Value Added (EVA) attempts to capture the true economic profit of a company. EVA is an estimate of the amount by which earnings exceed or fall short of required 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 and advances. Companies which earn higher returns than cost of capital create value. Therefore, Shareholders/Equity providers are always conscious about their return on capital invested. As a commercial banking company, MBL is deeply concerned for delivering higher value to its Shareholders/Equity providers.

Particulars(BDT in Million)

2020 2019

Profit After Tax 2,161.32 2,175.50

Add: Provision for loans and advances and off-balance sheet exposure during the year

1,236.41 3,875.25

Total Earnings (a) 3,397.74 6,050.75

Average cost of equity (based on weighted average rate of 10 year’s treasury bond issued by the Government of Bangladesh) plus 2% risk premium

8.01% 8.01%

Market Value Added Statement

Market value added statement shows the difference between the total market value of the Bank and the capital contributed by shareholders i.e. total Book value of equity. A high Market Value Added indicates that the company has created substantial wealth for the equity holders. The share market value of the Bank stood at BDT 12,497.01 million whereas the book value of the share stood at BDT 22,101.78.35 million resulting a negative Market Value Added of BDT 9,604.77 million as on December 31, 2020.

Invested Fund by Shareholders

Particulars(BDT in Million)

2020 2019

Total cost of average equity (b) 2,757.43 2,565.75

Economic Value Addition (a-b) 640.31 3,485.01



Market value

12,497.01

Book value

22,101.78

Market value added 2020

Market value

12,370.49

Book value

20,908.00

Market value added 2019

Though the financial performance of the Bank was sound during the year 2020, depressed capital market performance caused to negative Market Value Added.

Payment of Dividends

MBL has continued to pay substantial dividends to its shareholders while ploughing back sufficient profits to 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 Bank’s rapid expansion.

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.

Contribution to National Exchequer

As a corporate entity, MBL pays tax and VAT on its own 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 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.


Income Tax Payment on Bank’s earnings

1,160.63 1,487.14

Income tax, VAT and Excise duty deducted at source from various payment and services by the Bank

3,449.54 3,627.12

Income tax payment by the employees

82.87 95.01

Total Payment 4,693.04 5,209.27

(BDT in Million)

Direct Tax Paid by Bank Indirect Tax Paid by Bank

Income Tax Paid by Employee

2%

74%25%

15%16%

15%

2018 2019 2020

Dividend Payment History


MERCANTILE BANKFOUNDATION

Mercantile Bank Foundation has begun operations since 2000 with a view to enforcing Bangladesh Bank’s guidelines for carrying out broader Corporate Social Responsibility (CSR) activity through the Foundation. The Foundation currently performs CSR programs in a more

organized, standardized, and sustainable manner.

MBF has been undertaking a range of activities over the past twenty one years with the sole purpose of helping its target people to improve the quality of life.

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. Always we presume to contribute to the community 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.

Provide facilities for treatment through hospitals, clinics, medical

and eye camps

Initiatives in increasing social wellbeing and poverty alleviation

Distributions of blankets among the needy & depressed people

Provide/render monetary and/or other assistance/help for the rehabilitation

of people affected by natural and other disasters

Providing scholarships to poor, well-deserved students

Promoting educational, science, social and other related charitable

activities

CORPORATE SOCIAL RESPONSIBILITY (CSR)MBL’S CSR ACTIVITIES

MBL CSRActivities



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

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.

BDT 13.10 million 856 Beneficiaries of Students

BDT 61.28 million 110 Beneficiaries individual & Institutions

BDT 15.56 million 1,013 Beneficiaries of Students

BDT 1.51 million 108 Beneficiaries individual & Institutions

2020

2020

2019

2019


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.

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.

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.

Image of Abdul Jalil Hemodialysis Unit



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.


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.

cÖKvk: e„n¯úwZevi, 02 GwcÖj 2020 c„ôv: 07

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

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.

Image of Day Care Center at Motijheel contribute by Mercantile Bank Limited


HUMAN RESOURCE MANAGEMENTREPORT 2020

MERCANTILE BANK LIMITED HR OVERVIEW

MBL is focused on equal importance to its customers, employees and shareholders. To hire and retain qualified human resources according to need of the Bank, is one of the important aspects. Thus realization of talent potentialities of employees, respecting individual worth and dignity to ensure smooth career progress as well as welfare orientation in Human Resource Policy and practice have been emphasized. Mercantile Bank Limited is continuing its journey with 150 branches all over the country, with 4765 dedicated workforce.

DIVISIONAL OVERVIEW

Mercantile Bank’s Human Resource Management Division is responsible for Human Resource Planning, Staffing, Developing and Retaining of entire workforce of the Bank.

MBL philosophy toward Human Capital: Caring for human resources is one of our core values. MBL views its employees as Human Capital and believes that they are the key components to achieve its core objectives. MBL priorities on corporate culture, excellent pay package and other benefits. MBL emphasizes to improve the personal skills through intensive training and developments.

Challenges we face Responses we madeEnsuring work life balance • Assigning work that are achievable

• Standard working hourEnsuring proper succession planning • Necessary Training & Development opportunities

• Delegation of authorities and responsibilitiesImproving 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 retention

Succession Planning Training and Development

Employee performance measurement

Employee evaluation & Promotion

Employee engagement & Job Satisfaction

Work life balance Respect and Recognition

Career Management & Succession planning in MBL: There is a great opportunity for freshers as well as experience bankers for build-up their career in Mercantile Bank Limited and in its subsidiaries. Succession planning in MBL includes the process of

developing talent to replace executive, leadership or other key employees when they transfer to another role, leave the company, retire or die. MBL Human Resources Division is the key driver in the planning of succession in its different layers of position.



MBL follows four “E” approaches in Succession Planning

OPERATING ENVIRONMENT

As all we know, COVID 19 hit the world economy severely and squeezed the growth drastically. Even in this challenge environment, Mercantile Bank Limited has given reward in the form of promotion to 214 employees, recruited several senior experienced bankers and expanded its business by inaugurating MBL Islamic Banking Window, MBL Agent Banking Division, Digital Banking & Innovation Department.

Human Resource Management Division deals with organization’s most valuable assets – the people working there, who individually and collectively contributes to the achievement of objectives of the business. HRM function is converting invisible resources into visible resources through ensuring proper utilization of working force and ensuring proper working environment within the organization. To ensure proper working environment, HRM Division is always concern with the employees’ job security, job satisfaction, compensation package and other motivational factors.

Technological, economic, geopolitical, demographic and environmental forces are shaping how banking activities will be done. Thus MBL is doing its banking activities more openly, transparently, real-time, secured and deeply integrated into customers’ lives and institutional clients operations.

MAJOR ACTIVITIES OF THE DIVISION

HR Division’s main function is to ensure availability of right people at the right place at the right time to achieve

the organizational vision efficiently and effectively. HR Division equips organization’s employees through proper induction, orientation, training and development, assignment. MBL HRD focuses on nurturing the skills and competencies of the employees at various levels to meet current needs and expectations of the customers as well as to develop themselves for future leadership. Finding the right employees, developing, rewarding and retaining them are some of our highest priorities.

Main functions of Human Resources Division are • Workforce planning

• Recruitment, Selection of fresh and experience candidates

• Recruitment of Outsourced, Contractual employees

• Induction and orientation

• Joining, Transfer & Posting

• Training and Development

• Promotion and Reward

• Benefits administration

• Performance appraisal

• Separation Process (Termination, Resignation, Retirement)

• HR Database Management

• Empowering Business Delegation

• Management of Pay and Allowances

• Conducting Disciplinary Action

E (Education): Emphasis on various educational backgrounds according to need

E (Exposure): Opportunity to interact with Senior Management

E (Experience): Considers previous experiences for

lateral entries

E (Ethics): With a viewto be the finest citizen


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

• Maintenance of Biometric Attendance of the employees

• Employee Leave Management

• Return, Statement, Report to various regulatory authorities

• Formulating Corporate Organogram

• HR Automation

• Job rotation policy

• 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 demand

Promote equal employment opportunity.

The opportunity for appropriate career development.

Employee job satisfaction.

Relevant Human Resources Information System is available to inform the management decision making.

Ensure employee health, well-being and healthy working environment.

MBL Human Resource Recruitment and Selection Process

MBL Management is committed to provide equal employment opportunity to all as well as in identifying the unique strengths of each individual which brings to the roles they carry out and the self development.

MBL Human Resource Development Strategy:

1. Orientation for fresh employees: MBL HRD arranges orientation program for fresh recruited workforce.

2. Product Training: The product training is provided like deposit product training, loan product training, and product operational training to help the related staff to learn more about the products those are providing by the Bank.

3. Skill training: The Bank provides a lot of skill related training e.g. credit workshop, sales and negotiation skills, project management, etc. to enhance skill of the staff in particular aspects.

4. On job training: Staff members are continuously involved in the learning process in the form of on-job training. Thus a lot of on-job training opportunities and job rotation to increase staff’s exposure are providing.

5. Self-learning: The bank provides various opportunities for employees self-learning such as study leave, provides financial rewards for Banking Diploma, CDCS, CSDG, CAMS and various professional certifications.

6. Management Development Training and conference: In this training program, the employees are given strategic perspectives and business goals, management goals and patron focus abilities to better understand and manage their jobs.

7. Specific Competency Training: Various operational training is arranged to build up necessary competencies and to gain operational Excellencies.

8. MBL Employees’ Performance Appraisal: which includes-

• Recognize the efforts and contribution of current staff.

• Reward staff directly linked to performance.

• Motivate staff to improved performance.

• Orientation of staff towards goal achievement.

• Attract quality employees with an effective performance management system.

EMPLOYEE PERFORMANCE MEASUREMENT

The main purpose of Human Resource Management is to create and to keep balance between the Bank’s mission, vission and the interests of the employees. HRD’s activities always ensure that:

• Skilled people are available in the Bank to meet forecast work demands.

• The Bank’s structure provides with opportunity for appropriate career development.

• Relevant workforce data is readily available to inform management for decision making.

MBL always emphasizes on safe and healthy working environment. The Bank always emphasizes on the safety, wellbeing of its staff and communities.

Our fight against COVID-19

The COVID-19 pandemic is causing an unprecedented disruption to the world economy. The pandemic has also


hit our country’s economy and jeopardized impressive achievement in economic development. In this period, to overcome the situation, our Bank always tries to provide better service to its customers by keeping the Branch open with maintaining all safety measures against COVID-19. Mercantile Bank Limited is always concerned about the employee’s health safety and to protect employees from COVID-19, all possible safety measures have been taken by the Bank and also employees are being instructed to attend office by maintaining proper personal safety and hygiene measures. The following safety measured has been taken by the Bank against COVID-19:

1. Establishing Coronavirus Front Desk at entrance of Head Office.

2. Ensuring using of Hand Sanitizer while entry.

3. Checking body temperature of everybody before entering Head Office.

4. Rationing visitors entry into Head Office.

5. Ensuring Premise Disinfection / Deep Cleaning: Especially door handles, table tops, keypads of ATM booths etc is doing in a regular basis.

6. Attendance / Access Control: All Offices were advised to maintain Register Book for attendance purpose during this time.

7. Head Office Floor Doors was kept open during the office hours.

8. Providing gloves & Masks, Hand Wash/ Sanitizer to all employees.

9. Sanitization for Bank Vehicles.

10. Food or any other external delivery by vendors to the employees in Bank’s Head Office was banned.

11. Detection of any Corona Virus affected/exposed Official(s)/Staff(s):

In case of detection of any Coronavirus affected official(s)/ Staff(s), he or she will be sent to Quarantine Leave. And the employees who already associated with him was sent for quarantine leave. Moreover, Head of Divisions/ Regional Heads/Branches keep close contact with them over phone and they can join office after getting medical clearance from the competent authority. Human Resources Division ensured the compliance.

12. Official Correspondence through Email and File Share rather sending hard copies.

13. Formed a Quick Response Team.

14. The Central Quick Response Team was also advised the Head of Branches to remove the guest chair from all the desks and also advised to maintain social distance with the customers.

15. Everyone entering the Branch must wear mask.

16. No mask, No Service slogan was introduced.

17. As per guidelines of the Central Quick Response Team; the PPE, Hand Sanitizer, Mask, Hand Gloves and other necessary equipment have already been distributed to Branches.

18. Medical Retainer had to attend the office for 03 days in a week to help our officials for any health assistance in this crisis moment.

19. Bank has taken the following measures for quick recovery of the infected employees:

a) Our Medical Retainer maintained regular communications with the infected employees for medical support.

b) The Quick Response Team has followed up their health condition time to time. The Quick Response also sent food for them in their critical time.

c) Every COVID-19 infected employees have got a fruit basket as a gift from the MD & CEO of the Bank.

d) A policy was included in welfare fund for financial support of COVID-19 infected employees.

At present almost all of the COVID-19 infected employees’ health condition are stable and tested negative for Coronavirus. Tk.1.50 crore was already disbursed as financial support for the COVID-19 infected employees of the Bank.

Strategic Focus

Mercantile Bank believes that human resources are main catalysts. Main strategic focus of Bank’s HR Division is empowering business and its people who drive it. Hire, Train, Retain of employees are our motto. MBL’s Human Resource Management strategy is related with goals, mission and vision of the Bank.

The Bank’s aim is to create an environment where employees stay motivated, empowered and feel recognized for their works. In 2020, the Bank recruited a good number of new employees. We started 2020 with positive changes to our socio-economic landscape and renewed hope for higher levels of inclusive growth.



MBL’s main strategic focuses are

Optimum utilization of Human Resource in the Bank in global context

Better work cultureEvaluate HR capability

HR can make a direct impact on MBL’s growth

Today’s talent, Tomorrow’s success

Determine the tools required for employees to complete the job

To achieve competitive advantage and superior profitability

Realizing excellence through human resources

Estimate Bank’s future HR requirements

Develop a thorough understanding of Bank’s objectives

Evaluation and corrective action

Ensure best HR practices Increasing our competitive advantage by aligning strategy with people and culture.

Implement the Human Resource Management Strategy

Performance measurement system in MBL

Performance Appraisal in MBL is a part of career development which consists of regular reviews of employee performance. Other aspects are considered, such as organizational citizenship behavior, accomplishments, potential for future improvement, strengths and weaknesses, etc. Performance Appraisal has been conducted annually through obtaining Annual Confidential Report (ACR). MBL will move to Key Performance Indicator [KPI] based performance measurement of the employees soon.

Employee evaluation & rewards in MBL

MBL declares promotion every year for eligible Officers and Executives which motivates, inspires and helps to develop themselves for greater achievement of the individual and organizational goals. Promotions are made on the basis of “Merit - Cum- Seniority”.

Work life balance

MBL always concern for maintaining proper work life balance. Both employees themselves and the Bank contribute to maintain work life balance.

• Employees complete their assigned job in time

• MBL provides Maternity leave to female employees with medical allowance

• Encourage Vacations

• Provide Leave Fare Assistance to the employees

• Diversified work force

• Childcare Services

• Arrangement of Picnic

• Arrangement of Sports Events

• Provide good health coverage for all employees

• Encourage employee training, workshops, and education

• Team-Building Exercises

Respect and Recognition

MBL respects the rights of employees and believes in providing them a safe and conducive working environment. MBL endeavors to provide satisfaction with working conditions and remunerations, heal and safety, opportunity to contribute to society.

Fostering health and safety in MBL

1. Neat and clean work place

2. Green Banking

3. Proper cooling system.

4. Ensuring pure drinking water

5. Leave plan of the employees

6. In house Medical treatment

7. No excess pressure of works

8. First Aid Box

9. Day care center for the employees children.

Diversity of Workforce in MBL

MBL has a diversified work force and meets the challenges of work force diversities in the following ways:

• Functional orientation

• Treat each employee as an individual


• Making corporate hierarchy

• Job specifications & Job designing

• By developing Policies and Practices

• Formulating Code of conduct

• Non-discrimination policy

• Compensation and benefits policy

• Zero-Tolerance Policy

Employees’ leave management in MBL

MBL has a leave policy under which employees avail various leaves depending on their requirement. Such leaves are: Casual Leave, Sick Leave, Privilege Leave, Quarantine Leave, Maternity Leave, Mandatory / Compulsory Leave, Study Leave, Leave without Pay where applicable. Recently Web Based Leave Management system has been implemented.

Maternity Leave

The competent authority of the Bank grants to a female employee, maternity leave with full pay for a maximum period of six months according to policies formulated by Bangladesh Bank.

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 database management system that ensures pinpoint accuracy and enterprise-level security for our data that helps management to take prompt decision. In our 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 both academic and professional held, timesheets and training courses attended, leave availed. Employees job related data base such as salary, confirmation, increment, promotion, transfer, biometric attendance, bonus, tax, leave faire assistance, training related data base, etc.

HUMAN RESOURCES STATISTICS

1. Human Resources at a glance in MBL as on 31.12.2020:

Employment Nature Male Female Total

Regular 1864 564 2428

Contractual 176 47 223

Outsource 2084 30 2114

Total 4124 641 4765

2. Region wise employee distribution in 2020

Division No. of Employees

Percentage to Total

Dhaka 1640 67.55%Chattogram 410 16.89%Sylhet 60 2.47%Rajshahi 128 5.27%Barishal 60 2.47%Khulna 52 2.14%Rangpur 64 2.64%Mymensingh 14 0.57%Total 2428 100.00%

3. Employee diversities of MBL as per Head Office & Branches Comparison in 2020

OfficeNo. of Employees

Female Male Total % as to totalHead Office 90 474 564 23.23%

Branches 485 1379 1864 76.77%

Total 575 1853 2428 100.00%

76.77%

23.23%

Head office Branches

Head o�ice Branches

4. Maternity Leave statistics

Particulars 2019 2020Maternity Leave Availed 54 52Return to job 54 52% of Return to Job 100% 100%

5. Segment of the Employee by age in 2020

380

1167

734

147

20 years-below30 years



50 years andabove



6. Diversity of employees according to Designation, Female & Male 2020

Sl Designation Female Male Total

1 Managing Director & CEO 1 1

2 Additional Managing Director 1 1

3 Deputy Managing Director 5 5

4Senior Executive Vice President

6 6

5 Executive Vice President 9 9

6 Senior Vice President 2 20 22

7 Vice President 5 49 54

8 First Vice President 2 83 85

9 Assistant Vice President 11 74 85

10 First Assistant Vice President 29 176 205

11 Principal Officer 48 202 250

12 Senior Executive Officer 72 198 270

13 Executive Officer 139 396 535

14 Officer 125 207 332

15 Assistant Officer 107 305 412

16 Management Trainee Officer 3 22 25

17 Trainee Assistant Officer 23 50 73

18 Driver 22 22

19 Electrician 2 2

20 Contractual 9 25 34

Total 575 1853 2428

7. Employee position by Gender in MBL in 2020

Position Female Male Total

Executives 20 250 270

Non-Executives 555 1603 2158

Total 575 1853 2428

89%

11%

Executives Non-Executives

8. Year wise financial assistance to employees from welfare fund

SlBenefit &

Bill

2019 2020Number of

BeneficiariesAmount in

BDTNumber of Beneficiaries

Amount in BDT

1 Retirement Benefit 5 46,50,000.00 3 26,00,000.00

2 Medical Bill 230 81,09,312.00 169 60,39,564.00

3 Maternity Bill 37 10,90,155.00 26 7,55,944.00

4 Stipend 230 20,40,000.00 239 44,57,000.00

5 Death Benefit 2 15,00,000.00 1 7,00,000.00

6 Special Benefit 5 22,50,000.00 2 4,00,000.00

7 Incentive for [COVID 19] 344 1,18,23,416.00

Total 1,96,39,467.00 2,67,75,924.00

9. Year wise financial assistance to outsources employees from welfare fund:

SlBenefit &

Bill

2019 2020Number of

BeneficiariesAmount in

BDTNumber of Beneficiaries

Amount in BDT

1 Medical Bill 129 20,89,060.00 142 23,10,896.00

2 Maternity Bill 3 50,910.00 2 36,975.00

3 Stipend 104 7,50,000.00 138 20,49,500.00

4 Death Benefit 3 9,00,000.00 8 24,00,000.00

5 Special Benefit 1 2,80,000.00

6 Incentive for [COVID 19] 32 6,80,000.00

Total 37,89,970.00 77,57,371.00

10. Employee training related statistics in 2020:

Training Category

Total Course Conducted

Total Participants Total

Local- MBTI 43 2098 270

Local- Outside MBTI

48 95 2158

Foreign 2 7

11. Year wise recruitment statistics in MBL:

Categories 2018 2019 2020

Fresh [TAO, MTO] 177 172 54

Experience Bankers 17 17 10

Contractual 15 12 8

Total 209 201 72


Human Resources Management Division Outlook 2021MBL strongly believes that “Our employees are our asset”. As all we know, COVID 19 hit the world economy severely and squeezed the growth drastically. Even in this challenging environment, Mercantile Bank has given promotion 214 employees, recruited several senior experienced bankers and expanded its business by inaugurating MBL Islamic Banking Windows, MBL Agent Banking Outlets, Digital Banking Services, MBL Asset Management Limited. Main outlook of HRD 2021 will be as follows:

• HRD will remain attentive to develop inter-personnel skill of each employee.

• To visualize the vision & objectives of the Bank.

• Optimum utilization of human resources of the Bank.

• Completion of HR Automation and software up-gradation.

• Succession planning to create future leaders for the Bank.

• Broaden appropriate training and learning program to upgrade the human resources of the Bank in a global standard through using digital platform.

• To implement KPI [Key Performance Indicators] based performance evaluation for all employees.

MBL has entered into 2021 with a more positive outlook. MBL HRD believes that all employees may contribute to the strong growth track of the Bank to survive strongly.

Human Resource Accounting 2020

DEPOSITS PER EMPLOYEE

LOANS AND ADVANCES/INVESTMENT PER EMPLOYEE

OPERATING PROFIT PER EMPLOYEE

TOTAL VALUE OF HUMAN CAPITAL AS PER PRESENT VALUE OF FUTURE EARNINGS MODEL (LEV AND SCHWARTZ)

101.02

102.55

1.63

18,589.79

BDT in million



RESPONDING TOCOVID-19 CHALLENGES

MBL’s key activities for responding COVID-19 challenges

24/7 Support of a Full Time Doctor.

Formation of ‘Quick Response Team’

for fighting against COVID-19.

Moral Support from MD & CEO by giving

a fruit baskets to COVID-19 tested positive

employees.

Financial support for COVID -19 affected

Employees & Staff (Both Hospitalization and

isolation.

Special Incentive given for Employees & Staff for COVID-19 as per directive of the Bangladesh Bank.

Leave during isolation period not deducted

from employees’ personal allocation.

Minimum staff deployed for customer services

as per Bangladesh Bank Instruction.

By Rotation Office.

Routinely disinfection of work place by the

professional.

Maintain WHO Guideline for COVID-19 during

office time.

After initially testing positive for COVID-19,

rejoin office after testing 2 times at an interval 7

days.

• Total Fruit baskets distributed to 417 employees.

• 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


CUSTOMERSATISFACTION

MBL, as a truly customer centric bank, always gives paramount importance to provide better customer experiences with fast and efficient transaction processing, easy access to relevant information and personalized service- across channels, from ATMs, enriched websites and mobile apps to face-to-face

interactions with branch employees or calls into contact center “16225”

With a view to bringing continuous improvement in the quality of customer services and strengthening the corporate governance structure, MBL has already constituted Customer Service & Complaints Management Cell at head office.

Objectives of the of Customer satisfaction

Key Activities for Better Customer Service

Identifying Brand Strength

Measuring Customer

Satisfaction

Ways of Development

Arranged training program through

Mercantile Bank Training Institute (MBTI) for the

officials of the branches for hassle free/smooth Customer Services and Complaint Management

efficiently

Prepared the guidelines for “Customer Services

and Compliant Management”

Prepared & distributed 4 booklets to the branches:

I. Code of Conduct

II. Customer Charter

III. Service Standard

IV. Customer Awareness Program

Conducted survey on 10 Islamic Banking windows in respect of Customer

Service.



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.

MBL has designed its “Customer Charter” to make conscious the customers about their general rights, obligations, grievance approach process and thereby help customers taking their own decision. Copies of

the Customer Charter are available on request to all customers at all branches, own ATM booths and at MBL's web site: http://www.mblbd.com.

MBL performs the following activities as a part of Customer Awareness Program:

Customer Charter

a. MBL publishes or declares customers alert and

precautionary message, guidelines etc. on products and services time to time

through brochures, leaflets and advertisement in

communication channels on general banking, on

Internet banking, on loan and advances, on local and foreign

remittances etc.

b. MBL arranges meeting, seminar, workshop or any

other non-formal programs periodically to convey

awareness message and alert tips to the customers

relating to banking products and services.

c. During the year 2020, MBL provided training program to its 119 employees in title

of “maximizing Customer Satisfaction

Customer Awareness Program


MBL Complaint Resolution Process:

Acknowledgment Screening of complaints

Departmental actions for resolution

Response and closure

Appeal and review

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:[email protected]



MARKETPERFORMANCE

The capital market of Bangladesh is considered to be one of the emerging markets in the context of the global financial system. The market has immense potential for country’s industrialization, development of infrastructure in particular and economic growth in general. The extent of volatility in the capital market is more pronounced in Bangladesh than elsewhere in the world. The government and the Bangladesh Securities and Ex-change Commission (BSEC)

have undertaken a good number of initiatives to meet Bangladesh’s development financing requirements with a particular focus on developing long term infrastructure financing and strengthening financial stability through promotion of capital market. After taking necessary steps Bangladesh Capital Market witnessed ups & down trend throughout the year in 2020.

Investor - Relationship Capital Value Building Process

Capital Investment Investor

Maximizing Investor Returns

Compliance to Investor Regulations &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. No. Particulars

As at December 31, 2020 As at December 31, 2019

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 TradingAccording to Dhaka Stock Exchange, the Share trading of Mercantile Bank are-

Particulars 2020 2019 2018 2017 2016No. 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 OnAudited consolidated results for the year ended 31 December 2019 22-03-2020Unaudited consolidated results for the 1st quarter (Q1) ended 31 March 2020 15-06-2020Unaudited consolidated results for the 2nd quarter (Q2) ended 30 June 2020 27-07-2020Unaudited consolidated results for the 3rd quarter (Q3) ended 30 September 2020 27-10-2020

Distribution of Dividend DetailsDividend (Cash - Stock) 11% Cash & 5% StockAnnouncement Date March 22, 2020Record Date June 02, 2020Distribution Date (General Share Holders): Stock Dividend Cash Dividend

July 6, 2020June 25, 2020

Distribution Date (Sponsor Share Holders): Stock Dividend Cash Dividend

July 6, 2020October 01, 2020

Notice of 21th Annual General Meeting June 04, 202021th Annual General Meeting June 24, 2020

Stock Detailed

Particulars DSE CSEStock Symbol MERCANBANK MERCANBANKScrip Code 11128 22023Listing Year with DSE & CSE 2004 2004Market Category A AElectronic Share Yes YesMarket Lot (Nos.) 1 1Face Value (Taka) 10 10Total 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

Year 2020 2019 2018 2017 2016 2015Market Capitalization 12,497.01 11,433.33 14,668.56 20,489.42 11,161.32 7,909.01

(Amount in Million)

Market Capitalizationa (Miilion in BDT)

2020 2019 2018 2017 2016 2015

12,497.01 11,433.33

14,668.5620,489.42

11,161.327,909.01



LowestHighest

Monthly Highest & Lowest Price in Taka in CSEJa

n

Feb

Mar

Apr

May Jun Jul

Aug Se

p

Oct

Nov

Dec

13.3

13.5

12.7

11.8 11.9

10.6

13.5

13.2

12.9

12.9

12.8

11.2

11.4

9.9

11

10.6

10.6

10.6 11

.6 12.1

11.6 12

LowestHighest

Monthly Highest & Lowest Price in Taka in DSE

13.6

13.5

12.8

12.7

12.2

10.6

13.8

13.1

13 12.9

12.8

11.3

11.4

10

11.5

10.6

10.6

10.6

11.6

12

11.7 12

Jan

Feb

Mar

Apr

May Jun Jul

Aug Se

p

Oct

Nov

Dec

Market Price of Share-2020 Per Share value in Taka

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);

SL Name of the Directors, their spouse & minor children

As at December 31, 2020 As at December 31, 2019

Shares held % Shares held %i. Directors

1Morshed Alam, MP 24,506,619 2.49% 23,339,638 2.49%Spouse: Bilkis Nahar 334,623 0.03% 318,689 0.03%Minor Children : Nil Nil Nil Nil

2Al-haj Akram Hossain (Humayun) 21,357,210 2.17% 20,340,200 2.17%Spouse: Ferdousi Begum 2,461,832 0.25% 2,344,602 0.25%Minor Children : Nil Nil Nil Nil

3M. Amanullah 24,241,164 2.46% 23,086,824 2.46%Spouse: Tazneen Aman 1,100,000 0.11% 377,000 0.04%Minor Children : Nil Nil Nil Nil

4Md. Anwarul Haque 22,181,134 2.25% 21,124,890 2.25%Spouse: Nargis Anwar 2,041,933 0.21% 1,944,699 0.21%Minor Children : Nil Nil Nil Nil

5A.S.M. Feroz Alam 30,807,198 3.13% 29,340,189 3.13%Spouse: Yoko Inamori Nil Nil Nil NilMinor Children : Nil Nil Nil Nil

6Md. Abdul Hannan 22,496,873 2.29% 21,425,595 2.29%Spouse: Israt Jahan 3,055,220 0.31% 2,909,734 0.31%Minor Children : Nil Nil Nil Nil

7A.K.M. Shaheed Reza 48,384,697 4.92% 47,509,237 5.07%Spouse: Zobeda Begum 253,128 0.03% 241,075 0.03%Minor Children : Nil Nil Nil Nil

8Md. Nasiruddin Choudhury 19,734,107 2.01% 18,794,389 2.01%Spouse: Khaleda Shahzadi 492,947 0.05% 469,474 0.05%Minor Children : Nil Nil Nil Nil

9Al-haj Mosharref Hossain 23,552,881 2.39% 22,431,316 2.39%Spouse: Feroza Begum 3,118,325 0.32% 2,969,834 0.32%Minor Children : Nil Nil Nil Nil

10M.A. Khan Belal 19,756,537 2.01% 18,815,751 2.01%Spouse: Morzina Khan Monzu 432,088 0.04% 411,513 0.04%Minor Children : Nil Nil Nil Nil

11Dr. Md. Rezaul Kabir Nil Nil Nil NilSpouse: Dr. Ismat Rahman Nil Nil Nil NilMinor Children : Nil Nil Nil Nil


SL DesignationAs at December 31, 2020 As at December 31, 2019

Shares held % Shares held %

ii.Md. Quamrul Islam Chowdhury MD & CEO

Nil Nil Nil Nil

Spouse / Minor Children of MD & CEO Nil Nil Nil Nil

iii.Abu Asghar G. Haruni Company Secretary

Nil Nil Nil Nil

Spouse / Minor Children of CS Nil Nil Nil Nil

iv.Tapash Chandra Paul, PhD CFO

Nil Nil Nil Nil

Spouse / Minor Children of CFO Nil Nil Nil Nil

v.Md. Zakir Hossain DMD & HIAC

Nil Nil Nil Nil

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]

Sl DesignationAs at December 31, 2020 As at December 31, 2019

Shares held % Shares held %

1Mati Ul Hasan AMD & CRO

Nil Nil Nil Nil

2G.W.M Mortaza Deputy Managing Director

Nil Nil Nil Nil

3Adil Raihan Deputy Managing Director

Nil Nil Nil Nil

4Shamim Ahmed Deputy Managing Director

Nil Nil Nil Nil

5Md. Mahmood Alam Chowdhury Senior Executive Vice President

Nil Nil Nil Nil

d) Shareholders holding ten percent (10%) or more voting interest in the company (name-wise details): Nil

Dividend Distribution Policy

As per BSEC Directive No. BSEC/CMRRCD/2021-386/03 Dated: 14 January 2021, Dividend Distribution Policy has been discussed in note 2.10.7 to the financial statements of Mercantile Bank Limited.

Unclaimed DividendFollowing tables show unclaimed (Cash &Stock) dividend up to 2019:

Year wise summary of unclaimed Cash Dividend

Sl. No. Year Unclaimed Cash Dividend (Tk.)

1 2003-2011 1,856,099.11 2 2012 4,564,215.11 3 2013 14,338,115.25 4 2014 8,921,056.60 5 2015 8,957,537.45 6 2016 10,179,505.54 7 2017 10,482,128.73 8 2018 19,128.79 9 2019 10,884,376.04 Total amount 70,202,162.61



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’ InquiriesShare DepartmentMercantile Bank LimitedHead Office61 Dilkusha Commercial AreaDhaka-1000PABX: 02 9559333 Ext. 209Email: [email protected]

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 issued9 2010 68,090 10 2011 91,991 11 2012 39,384 12 2013 64,449 13 2014 - No Stock Dividend declared14 2015 - No Stock Dividend declared15 2016 31,298 16 2017 32,791 17 2018 103,694 18 2019 39,594

Total 772,743

Market share

Deposit Growrh

Country Growth (2020 Over 2019)

13.50%

MBL Growth (2020 Over 2019)

-0.95%

MBL Marketsahre 2020

1.90%


2.18%

Loan Growrh

Country Growth (2020 Over 2019)

12.43%

MBL Growth (2020 Over 2019)

5.11%


1.72%


1.84%


GRIEVANCEREDRESSAL

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.

MBL's redress system deals with the following:

Receiving complaints for non-receipt of dividend payment,

Transfer of shares from suspense account to BO account of shareholders.

Grievance for not receiving the Annual Report.

Clarification of all price sensitive telephone information

Questions and clarifications about recent or upcoming price sensitive records over telephone etc.

MBL Shareholders redressal process:

Investor/shareholder grievances must be handled with respect and in a timely manner.

Communicate to the shareholders for collection of the dividend payment.

Revalidate the dividend warrants upon demand.

Correction of bank account details while sending dividends through BEFTN system

Re issue of dividend warrants, in case of failure to send dividend through BEFTN system

Issue shareholding certificate, dividend certificate as and when necessary E-mail or letter must be sent to all investors who have complained in writing

Request for e-TIN number in case of cash dividend.

Shareholder’s Perspective

Customers’ Perspective

Customers are among Bank’s key stakeholders. As per our Customer Service Policy and Customer Acceptance Policy (CAP), we are very mindful of the demand of customers and are always ready to serve them our best. Like investors, we also address queries and complaints from our customers through our appropriate department, division or unit. General Banking Division (GBD) is centrally responsible for all complaints resolve.

Employees’ Perspective

Employees are the Bank’s principal resource, human capital. We’re committed to providing our employees with a comfortable work environment to enrich their productivity. We have different Grievance Resolution Policy and Women Anti-Harassment Policy to address problematic problems in the workplace and create a healthy and gender responsive working environment. Our Department of Human Resources takes the necessary steps to redress if any adverse situation arises. We did not receive any substantial complaints about our employees in 2020.

Redressal point for Shareholders

Mercantile Bank LimitedShare Department

61 Dilkusha Commercial Area, Dhaka-1000

PABX: 02 9559333 Ext. 212, 113, 520

Email: [email protected]

Communicate to concerned shareholder

after redressal by share department

Review all quarries and give feedback

accordingly

Queries/ Complaints/

grievance raise by shareholder