PT Bank Mandiri, the country's biggest state-owned, is targeting net profit of Rp 6.9 trillion (US$736 million) this year, or an increase of 15 percent from last year, by taking up projects already in the pipeline.
"The shareholders' meeting agreed that this year Mandiri would target Rp 6.9 trillion to Rp 7 trillion in net profit," State-Owned Enterprises Minister Mustafa Abubakar said Friday in Jakarta.
Last year, Mandiri made Rp 6 trillion in net profit, up from Rp 5.31 trillion in 2008. To reach its 2010 target, the bank is eyeing 20 percent growth in credit, Mustafa said.
He added he was optimistic Mandiri could follow through, given that the Indonesian banking sector had improved by 80 percent.
Mustafa also said Mandiri planned to apply for a full banking license in Malaysia to tap the country's large reserve of migrant workers from Indonesia.
It aims to capitalize on the $2 billion sent home each year by Indonesians working on plantations and factories in Malaysia, he said.
Mandiri currently has branches in Hong Kong, Singapore, Timor Leste, the Cayman Islands and London, and an office in Shanghai.
Mustafa said the bank had also restructured debt owed by state airline PT Garuda Indonesia Airways.
"This is a very good achievement; the loan has been accomplished by win-win solution," Mustafa said.
Garuda previously took out a loan of Rp 3.7 trillion from Mandiri. The bank has acquired 10.6 percent of shares of Garuda under a debt-to-share conversion agreement.
The deal turned 95 percent of Garuda's debt, or Rp 967 billion, into mandatory convertible bonds (MCB).
The remaining Rp 50 billion of the principal is to be paid in cash to the bank, company sources told The Jakarta Post.
Besides Mandiri, the Indonesian government owns three other banks: BNI, BRI and BTN.
The State-Owned Enterprises Ministry expects the net profit of all these lenders to grow by 21.68 percent this year, after the ministry took in Rp 16.03 trillion in 2009.
"We expect to get Rp 19.5 trillion in net profit in 2010," Mustafa said at an outlook seminar two weeks ago.
He said the capital expenditure target for the sector was Rp 2.5 trillion, or up 111.3 percent from Rp 1.18 trillion in 2009.
