Bank Mandiri Persero Tbk PT : Operating Profit Up 13.3%

About this update from Pt Bank Mandiri (persero) Tbk

Home » Corporate News News Release - Rabu, 3 Agustus, 2016 Jakarta, 3 August 2016 - Bank Mandiri recorded growth in first-half pre-provision operating profit of Rp 19.3 trillion, up 13.3% compared with Rp 17.1 trillion during the same period last year. Bank Mandiri Vice CEO Sulaiman A. Arianto said the increase in operating profit was underpinned by growth in operating income of 13.6% to Rp 34.98 trillion, primarily driven by an increase in net interest and premiums income of 13.3% to Rp 25.8 trillion and growth in fee-based income of 14.5% to Rp 9.2 trillion. In addition, during the same period the Company also successfully reduced interest expenses by 9.3% on an annualized basis, in line with the increased share of low-cost funds in the Company's capital structure. 'We are thankful for this achievement as it demonstrates that Bank Mandiri continues to manage the productivity of its assets and transactional business well amid the challenges posed by the economic slowdown, both domestically and internationally, as well as the company's initiatives in support of the government's program to gradually reduce interest rates' said Sulaiman during a press conference at the Investor Day event in Jakarta on Wednesday (3 August) In addition, Sulaiman said, Bank Mandiri has taken anticipatory measures to ensure that the company will continue to grow in a sound and sustainable manner, despite the adverse impacts of the ongoing economic slowdown on the national banking system. These measures included the setting aside of sufficient reserves to strengthen the structure of the Bank's productive assets and anticipate an increase in non-performing loans (NPL) in the banking industry going ahead. He said that in the second quarter of 2016, the bank had set aside provisions amounting to Rp 9.9 trillion, up Rp 4.0 trillion from the same period last year. 'On the back of this increased provisioning, in the second quarter of this year we recorded a net profit of Rp 7.08 trillion, down 28.7% from the same period last year. Nevertheless, we are optimistic that with the steps we are taking, Bank Mandiri will continue to strengthen the foundation's of its financial structure in order to continue to grow in a sustainable manner and be ready to face the challenges that lie ahead,' said Sulaiman. In addition, he said, Bank Mandiri has taken precautionary measures to ensure that the company will continue to grow in a sound and sustainable manner going ahead, and be able to optimally manage problem loans. These measures include strengthening the risk function, tightening risk acceptance criteria (RAC), and optimizing restructuring and recovery efforts for the resolution of non-performing loans in a more focused, quicker and more comprehensive manner. At the same time, public trust in Bank Mandiri continues to grow, as shown by an increase in third-party funds to Rp 691.4 trillion as of the end of June 2016, up from Rp 654.9 trillion at the same time last year. Of the said Rp 691.4 trillion in third-party funds, total low cost funds (checking and savings) amounted to Rp 439.4 trillion, primarily driven by an increase in savings deposits of Rp 37.1 trillion to Rp 273.6 trillion. As part of its efforts to increase deposits through enhanced transaction convenience, Bank Mandiri continues to develop its branch, electronic, and other networks. As of the end of June 2016, Bank Mandiri operated 2,472 branches, 2,159 micro units, and 17,461 ATMs throughout the country. Lending Bank Mandiri successfully maintained its intermediation function to various business segments in Indonesia amid volatile economic conditions, including lending to the micro segment, which displayed the highest annual growth rate of all segments, up 15.9% from Rp 39.7 trillion in the second quarter of 2015 to Rp 46 trillion during the same period this year. During the past year, Bank Mandiri has provided gross additional loans (bank only) of Rp 96.0 trillion. This figure is derived from loan disbursements of Rp 231.9 trillion, less installments of Rp 135.9 trillion. Of the total of Rp 547.0 trillion provided by Bank Mandiri in loans (bank only), 86.1% consisted of productive loans, including financing for the infrastructure sector and micro, small and medium enterprises (MSMEs). In tandem with the realization of the government's infrastructure development program, as of the end of June 2016 Bank Mandiri had committed to a lending limit of Rp 89.9 trillion for the infrastructure sector. Despite difficult domestic and regional economic conditions, this figure was higher than that for the same period the previous year, which amounted to Rp 75 trillion. Bank Mandiri also participates in the distribution of special financing under the government's People's Business Loan (KUR) guarantee scheme. As of the end of June 2016, the number of Bank Mandiri KUR customers stood at more than 630.5 thousand based on a total lending limit of Rp 29.0 trillion. 'This achievement reflects our commitment to helping accelerate national economic development and improve people's welfare,' said Sulaiman. Regional Expansion Bank Mandiri continues to sustainably expand its business by focusing on the development of prospective sectors, both domestically and in the Southeast Asian region. To support this strategy, the company is currently preparing a platform for inorganic growth overseas. Sulaiman said that Bank Mandiri currently has offices in Hong Kong, Singapore, Shanghai, London, Cayman Islands and Dili, as well as a representative office in Malaysia. 'We are presently reviewing the possibilities for expanding our business to three other ASEAN countries -- the Philippines, Vietnam and Myanmar,' he said. Bank Mandiri, continued Sulaiman, believes that the prospects in these three countries are excellent and consequently various business opportunities in the three countries will be explored. As part of its expansion drive, Bank Mandiri will work with local partners who know the market conditions in the relevant countries. 'We will form a team to assess the prospects and opportunities in the Philippines, Vietnam and Myanmar,' he said.

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