T

he country largest lender by assets PT Bank Mandiri has seen a greater contribution from its subsidiaries, helping the company’s net profits to surge by 26.6 percent last year.

Mandiri president director Zulkifli Zaini said on Monday that the bank’s subsidiaries — comprising sharia lender Bank Syariah Mandiri, insurer AXA-Mandiri Financial Services, Bali-focused lender Bank Sinar Harapan Bali, securities company Mandiri Sekuritas, and financing firm Mandiri Tunas Finance — reported a combined Rp 2.07 trillion (US$213 million) in net profits last year.

This was a 32.9 percent surge compared to Rp 1.56 trillion a year earlier and around a fivefold jump compared to Rp 401 billion in 2009.

“We saw good achievements by subsidiaries last year with their total net profits now accounting for 13.4 percent of Mandiri’s total net profits,” Zulkifli said on Monday.

Publicly listed Mandiri reaped Rp 15.5 trillion in net profits in 2012, robust growth compared to the
Rp 12.2 trillion recorded in the same period last year. The main contributor of the increase was net interest income, which touched Rp 29.69 trillion last year, a 25.9 percent increase year-on-year.

“Our interest income increased due to credit disbursement. We also performed a shift in lending to the retail sector with higher interest rates from the corporate sector with lower rates,” Zulkifli said.

Mandiri’s lending grew 23.7 percent to Rp 388.8 trillion last year.

Finance director Pahala N. Mansury said that Mandiri itself, excluding subsidiaries, reported 24.8 percent higher lending.

“If we combine all loans to the retail sector, for the first time it accounted for more than 30 percent of Mandiri’s total lending in 2012,” Pahala said.

Mandiri’s corporate loans grew 18.9 percent to Rp 126.3 trillion, commercial loans 27.3 percent to Rp 102.7 trillion and the business banking division’s lending rose 27.3 percent to Rp 38.4 trillion last year. Meanwhile, micro loans jumped 62.4 percent to Rp 19 trillion and consumer financing rose 22.4 percent to Rp 47.7 trillion.

Fee-based income only inched up 2.4 percent to Rp 12.24 trillion, largely because the bank, through its subsidiary Mandiri Sekuritas, no longer enjoys the trading of shares in Garuda Indonesia.

Mandiri Sekuritas sold last year the unsold shares of Garuda Indonesia from an IPO in 2011.

Zulkifli said that Mandiri expected an increase of between 20 and 22 percent in lending this year. He said that the target was lower compared to last year’s achievement due to a more competitive market.

“The banking industry’s LDR [loan to deposit ratio] is above 85 percent. It means all banks will likely boost lending, which will result in competition related to third-party funds,” Zulkifli said.

Shares in Mandiri (BMRI) closed at Rp 9,750 apiece on Monday, a 2.09 percent increase compared to
Friday’s close.