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Mandiri first-half net profit up 37.8 percent
PT Bank Mandiri (BMRI), Indonesia's biggest bank by assets, announced Friday a 37
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T Bank Mandiri (BMRI), Indonesia's biggest bank by assets, announced Friday a 37.8 percent increase in first-half net profit to Rp 4.3 trillion (US$ 477.3 million) due to strong lending and fee-based income.
"A significant increase in our operational profit is one of the factors of the net profit increase, but the main drivers are strong growth in lending, net interest income and fee-based income," finance and strategy director Pahala N. Mansury said.
Bank Mandiri's lending grew by 20 percent to Rp 218 trillion, which was "more than the 18 percent market growth", Pahala said, driving the bank's total assets up 12 percent to Rp 402.1 trillion.
Despite strong growth in lending, Mandiri's capital adequacy ratio (CAR) is in the safe zone at 14.5 percent, Pahala added, expressing optimism that the figure could increase to about 16 percent after the bank's planned rights issue.
Bank Mandiri is eyeing a Rp 7 trillion rights issue in December or February next year at the latest, which was approved by the government earlier this month.
Strong growth in lending helped the bank's net interest income grow by 8.2 percent to Rp 9.39 trillion, while fee-based income sharply increased by 40.7 percent to Rp 3.66 trillion.
Bank Mandiri deposits also grew 13.8 percent to Rp 326.6 trillion in the first quarter.
The rate of Bank Mandiri's gross non-performing loans remained manageable at 2.54 percent, almost half of last year's 4.78 percent.
"We have set a target to reach less than 4 percent for gross non-performing loans in 2014 as well as increasing market capitalization at Rp 225 trillion rupiah in the same year," said president director Zulkifli Zaini, who was recently appointed to lead the bank last month after former director Agus Martowardojo became the country's finance minister.
Indonesia's economic expansion is forecast to accelerate to 5.9 percent this year, Agus said July 8, as rising demand for loans among consumers and small- and medium-scale companies in the world's fourth-most populous nation bolsters growth.
The bank's shares closed at Rp 6,100 on Friday, up 1.67 percent, or Rp 100 from the previous close at Rp 6,000. Shares of Bank Mandiri have risen 30 percent so far this year, outperforming the broader Indonesia composite index, which is up 20 percent.
Bank Mandiri currently has a market capitalization of Rp 125 trillion. (est)
