Thanks to the strategy, Bank Mandiri’s KLN have managed to book pre-tax profits of Rp 1.562 trillion (US$111.2 million) by the end of 2020, 19 percent growth year on year (yoy) despite being overshadowed by the global uncertainties brought about by the COVID-19 pandemic.

According to Bank Mandiri’s treasury and international banking director Panji Irawan, the achievement contributed to the highest pre-tax profits for the last five years, which booked average growth of 30 percent in the period.

The positive performance was largely contributed by the fee-based income, which recorded an average growth of 32 percent to US$45.3 million in 2020, from US$10.9 in 2015. Meanwhile, the net interest income increased on average by 10 percent to US$81.3 million in 2020 from US$49.5 million in 2015.

“Apart from the comprehensive understanding of international business on the part of corporate customers, the good performance of Bank Mandiri’s KLN for the last five years is also the result of strategic collaboration among various units in the central bank, and also among the respective KLN, including with subsidiaries,” Panji remarked.

Currently, Bank Mandiri operates KLN in Singapore, Hong Kong, the Cayman Islands, Shanghai, Timor Leste, the United Kingdom and Malaysia.

Panji revealed that the bank’s KLN network managed to maintain their productive asset quality through a strategy that provides credit under tight selection, which was also the bank KLN’s positive achievement. Thanks to the strategy, the bank’s non-performing loan ratio could be reduced from 1.42 percent 2015 to 0.38 percent in 2020.

“We are eager to meet all customer needs in developing their business overseas in order that they can access a greater global market and thrive more quickly. For that reason, we have set our focus on the Indonesia-related global trading companies, global syndications and supply chain Indonesia-linked customers, especially for customers that run businesses in the locations covered by Bank Mandiri’s KLN network,” he said.

He went on to say that the service was strengthened by developing the Mandiri Cash Management digital service across the KLN, which customers or customer networks overseas can take advantage of and in this way customers feel safe and comfortable in making transactions with Bank Mandiri.

Panji added that on top of corporate customers, Bank Mandiri has also developed special services for individual high net worth customers who are domiciled or work overseas. These can be conducted by offering wealth management services in Bank Mandiri Singapore under the Individual Customer Cash Management scheme.

“In order to support customer funding and investment overseas, currently we operate two subsidiaries in Singapore, namely Mandiri Securities Singapore and Mandiri Investment Management Singapore. All of our international networks are well connected and this way, we can provide an optimal service,” Panji said.

Remittance service

Apart from the global trade-related services, Bank Mandiri’s KLN also have a relatively good market share in regard to the remittance service, especially remittances conducted by Indonesian migrant workers overseas, who transfer their money to Indonesia. 

Providing ease for Indonesian migrant workers overseas in regard to remittances has become one of Bank Mandiri’s KLN business focuses, particularly the one operating Malaysia, Singapore and Hong Kong.  

“Beside transactions in the branch offices, the process of money transfer to Indonesia is increasingly made easier, for example, through the electronic network and collaboration with local retail merchants,” Panji said.

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