The auditor of Mercantile Bank PLC has flagged a significant provision shortfall of BDT 2,139.31 crore in the bank's 2025 financial statements, raising concerns over its capital adequacy position, according to a disclosure published by Dhaka Stock Exchange on Wednesday.

In an “Emphasis of Matter” paragraph included in the Auditor's Report for the year ended December 31, 2025, the auditor drew attention to the bank's classified loan situation and its inability to maintain the full required provisioning.

The bank reported total loans and advances of BDT 28,593.56 crore, of which BDT 4,342.07 crore were classified, translating to a non-performing loan (NPL) ratio of 15.19 percent.

Against a total required provision of BDT 3,390.23 crore, the bank maintained only BDT 1,250.92 crore, leaving a shortfall of BDT 2,139.31 crore.

The auditor further noted that the bank's Capital to Risk-weighted Asset Ratio (CRAR) stood at 12.52 percent, only marginally above the regulatory minimum, and that this figure was computed without accounting for the provision shortfall. Had the shortfall been recognised, the CRAR would have fallen below the required threshold.

Bangladesh Bank, through a letter dated April 29, 2026, permitted the bank to finalise its 2025 financial statements without recognising the shortfall, citing the absence of adequate profit.

The regulatory forbearance was granted on three conditions: no declaration of dividends, enhanced market disclosures, and a board-approved, time-bound plan to address the provision and capital gaps.