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tate owned Bank Mandiri, the largest Indonesian bank in terms of assets, is optimistic that its newly opened branch in Shanghai, China will be able provide renminbi financing services within three years as required by the local banking authority so that it will also be able to increase its local customer base.

Bank Mandiri president Zulkifli Zaini said in Shanghai on Friday that the new branch, which began its operation in November last year, was now only allowed to carry out transactions in US dollars.

“The new branch can provide banking services in renminbi, if it is able to post profits in two consecutive years within three years of operation,” Zulkifli told a press conference before the grand opening of the new branch in Shanghai on Friday.

Zulkifli said if the new branch could provide renminbi financing services, it would be better able to take advantage of the growing local currency financing.

“Although our main mission is to help Indonesian companies and support Chinese companies’ exports to Indonesia, providing renminbi financing will be quite important for our future growth here,” he added.

With the inauguration of the new office in Shanghai, Bank Mandiri is the only Indonesian bank that has a full branch office in China. The Shanghai branch augments the bank’s existing overseas network, which consists of offices in Hong Kong, Singapore, Timor Leste, Malaysia, the Cayman Islands and the UK.

Mandiri’s presence in China started with the establishment of a representative office in Pudong, Shanghai in 2003. But in August last year, the bank was allowed to open a full branch. To date, Bank Mandiri Shanghai has recorded assets of US$48.22 million. The bank expects to increase the number to about US$120 million at the end of this year.

Zulkifli said that with the opening of the new branch, Mandiri would be able to further support the expansion of Indonesian companies to a major world financial capital and would also back the Indonesian government’s export promotion program by providing banking services in trade and other businesses.

“Through our Shanghai branch, we will develop new business opportunities with Chinese companies and companies from other Asian countries that wish to trade or invest in Indonesia, or vice versa, “Zulkifli said.

He said that the Shanghai branch focused on international banking, including trade services, trade financing, project financing and treasury transactions involving existing Bank Mandiri customers, particularly those that have trade links with China and other Asian countries.

Zulkifli said that if the new branch could perform well, there would be the possibility for Bank Mandiri to open another branch in China, such as in Beijing or in the country’s other cities.

Zulkifli added that Bank Mandiri was committed to supporting growing trade activities between Indonesia and China, and to strengthening economic cooperation between the two countries. Data from the Indonesian Trade Ministry shows that trade with China has grown from $18.2 billion in 2007 to $49.15 billion at the end of last year, with non-oil and gas trade accounting for the lion’s share of trade. This means that trade between China and Indonesia has grown by an average of 28.42 percent per annum over the last four years, making China as Indonesia’s biggest trading partner.

Zulkifli explained that to date Bank Mandiri as a market leader had made a significant contribution to Indonesia’s international trade, including trade with China. This was evident from the company’s results in the first quarter of 2012, which showed that the bank had provided $22.47 billion in international trade finance, an increase of 21 percent over the same period last year. Bank Mandiri’s market share at the end last year stood at 26.5 percent for export transactions and 26.4 percent for import transactions. These figures exclude domestic letters of credit (L/Cs).

In addition to China, Mandiri has also secured a permit to operate in Malaysia but is unable to begin its full services due to large capital requirements, branch limitations and automated teller machine (ATM) installment restrictions.

“The Malaysian banking authority has promised to ease restrictions so that we can operate a full banking service in the country,” he said. “They previously promised to relax the limitations in March, but no realization has so far been made. We are still waiting,” he added.