Mercantile Bank incurs loss in Q2 as interest income plummets

Mercantile Bank PLC, a listed private commercial lender, has reported a consolidated net loss for the second quarter of 2026, driven by a dramatic collapse in its net interest income and deteriorating cash flows.

According to the bank's un-audited financial statements for the April-June period, the consolidated net loss stood at Tk7.70 crore. This marks a sharp reversal from the corresponding quarter in 2025, when the bank posted a healthy net profit of Tk108 crore. 

Consequently, the loss per share for the quarter reached Tk0.07, a steep fall from the earnings per share (EPS) of Tk0.98 recorded a year earlier.

The bank's performance for the first half of the year (January-June) was equally subdued. While it managed to remain technically in the black with a consolidated net profit of Tk24.78 crore for the six-month period, this figure is a staggering 88% lower than the Tk201 crore profit reported in the first half of 2025. The half-yearly EPS settled at a mere Tk0.22, compared to Tk1.82 in the prior year.

Financial analysts point to the bank's core operations as the primary source of distress. Its net interest income – the difference between interest earned on loans and paid on deposits – plummeted by 69% to settle at Tk111 crore. 

Furthermore, the bank's liquidity position saw a significant squeeze, with the consolidated net operating cash flow per share (NOCFPS) dropping by 79% to Tk0.74 at the end of June.

As of 30 June 2026, the bank's consolidated net asset value (NAV) per share stood at Tk24.30.

Mercantile Bank is currently trading in the 'Z' (junk) category on the stock exchanges, a relegation triggered by its failure to declare any dividends for two consecutive years. 

On Thursday (30 July), the bank's shares closed at Tk7.50 on the Dhaka Stock Exchange, continuing to trade well below their face value of Tk10.