B

ank Mandiri is looking to post Rp 149.03 trillion (US$15.35 billion) in corporate loans by year-end, an 18 percent increase from 2012, consisting of loans for infrastructure, consumer goods and plantation sectors, its executive says.

According to Mandiri corporate banking managing director Fransisca Nelwan Mok, the Master Plan for Acceleration and Expansion of Indonesia'€™s Economic Development (MP3EI) is one of the main considerations for the state-owned bank in setting its targets this year.

'€œThere are so many projects right now, especially related to MP3EI. They range from telecommunications to toll roads. State-owned infrastructure companies are also performing well these days,'€ she said in Jakarta on Monday.

Projects linked to energy, transportation, consumer goods and plantation sectors are also expected to support the target. Although the plantation sector was suffering a downturn, she said, the bank still had high hopes for the business, citing the vast plantation area.

'€œIt is true that prices of some commodities are declining, but the sector is actually still promising because production volumes continue to increase,'€ Fransisca added.

At the moment, publicly listed Mandiri has about 200 corporate clients in its lending business. Last year, corporate loans amounted to Rp 126.3 trillion.

The top three sectors in corporate loans disbursements were plantations, manufacturing and food and beverage. Its non-performing loan (NPL) ratio, the ratio of bad loans, stood at 1.4 percent, below the 5 percent threshold set by the central bank. Mandiri executive vice president for corporate banking Kartini Sally said that the bank expected the growth of its total corporate deposits would be at a higher rate than that for loans.

'€œWe expect the deposits to grow by at least 30 percent,'€ she said.

With such target, it is estimated that Mandiri will reach around Rp 81.9 trillion in total corporate deposits by year-end. In total, the bank has between 400 and 500 corporate clients, most of which are local companies.

According to Mandiri finance and strategy managing director Pahala N. Mansury, to help reach the growth targets in corporate banking, Mandiri will continue to improve its information technology system.

This year, it sets aside between $120 million and $130 million in capital expenditure (capex) specifically for IT investments, up from $85 million in 2012.

'€œWe plan to allocate the same capex amount for IT in the next two to three years. That way we can also maintain our internet banking business,'€ he said.

Meanwhile, to expand its multinational company network, Mandiri plans to establish special Japan and South Korean desks, which will handle businesses with companies from those countries. Pahala said that the bank was working to come up with specific services for the desks. At least by 2014, they would have fully operational, he added.

Mandiri signed a memorandum of understanding (MoU) with South Korea'€™s largest bank, KB Kookmin Bank, in Seoul, South Korea, last week. Both banks agreed to partner in five business areas; structured finance and syndication loan, treasury, cash management, trade finance and remittance.

Mandiri deputy president director Riswinandi said that the MoU was expected to boost business between the two countries and expand Mandiri'€™s coverage in South Korea.

Mandiri does not have an office in South Korea. Its foreign offices are in Dili, Hong Kong, Shanghai, London and the Cayman Islands.