Publicly listed lender Bank Mandiri (BMRI) expects a sharp increase in use of its remittance service from Indonesian migrant workers this year following the recent signing of partnerships with several foreign and local agencies.

Setiyo Wibowo, Mandiri senior vice president for consumer deposits, said that the bank expected remittance transactions to grow by between 20 and 30 percent this year. '€œThis is actually a conservative growth target because we are still waiting to see how our new partnerships will work out commercially this year,'€ he said on Tuesday.

By setting 20 to 30 percent growth targets, the state lender hopes to see the value of remittances from migrant workers surge to at least US$46.72 million. It expects to book fee-based income of about Rp 84 billion ($6.53 million) from this year'€™s remittance service.

According to data from the bank, last year Mandiri saw a total transaction value of $38.94 million in remittances, with fee-based income of about Rp 70 billion. More than half of the transactions were generated from incoming remittances from overseas workers.

Setiyo said that part of this year'€™s growth would come from new partnerships signed in Hong Kong and South Korea.

Mandiri recently sealed an agreement with convenience store operator 7-Eleven to provide remittance facilities for workers at the latter'€™s outlets in Hong Kong.

'€œMost of them are only familiar with informal financial outlets, so we are reaching out to them through this partnership,'€ he said.

Data shows that Hong Kong already makes Mandiri'€™s top-three list of places of origin in terms of incoming retail remittance transactions, along with the Middle East and Malaysia.

Hong Kong '€” as revealed by the January economic and financial statistics (SEKI) published by Bank Indonesia '€” was also listed in the top five places of origin for incoming retail remittances from migrant workers in 2014.

The other four places were Malaysia, Saudi Arabia, Taiwan and the Americas.

Setiyo said it would evaluate the business model in Hong Kong within the next six months before implementing the same model elsewhere. '€œIt may be easier to offer the services using a retailer'€™s outlets, but we'€™ll see,'€ he added.

In South Korea, Mandiri has established a similar remittance partnership with Kookmin Bank as well. '€œWe have not seen that many transactions coming from South Korea because it is still at an early stage,'€ he said.

Another discussion is underway in Taiwan that will enable Mandiri to penetrate the remittance
market, but Setiyo declined to reveal more details, merely saying that discussions would be complete this year.

Meanwhile, in Indonesia, the lender is looking to widen its remittance scope by using the branch offices of PT Pegadaian after it signed a cooperation agreement with the state pawn broker on Tuesday.

At present, Pegadaian operates more than 5,000 branches and outlets across the country. With the addition of Pegadaian, Mandiri now has two domestic partners, the other being PT Pos Indonesia.

Mandiri booked fee-based income of Rp 15.1 trillion last year, an increase of 3.9 percent on the previous year. Total consolidated net profits rose to Rp 19.9 trillion from Rp 18.2 trillion in 2013.

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