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Bank Mandiri achieves net profit of over Rp 55.1 trillion in 2023 fiscal year
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In a public presentation held on Wednesday, Bank Mandiri announced a 2023 net profit of over Rp 55.1 trillion, its largest since the bank’s establishment 25 years ago.
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ith a consistent business strategy that focuses on ecosystem-based business growth supported by digitalization, Bank Mandiri has successfully navigated through 2023 by achieving considerable performance growth. The company recorded a net profit of Rp 55.1 trillion for the year, a 33.7 percent year-on-year (yoy) increase.
It is the bank’s largest profit since its establishment 25 years ago. Darmawan Junaidi, president director of Bank Mandiri, said the milestone performance aligned with Indonesia’s economic conditions, which remained resilient in the face of volatility in 2023.
"Despite the various challenges in 2023, Indonesia's economic conditions remained resilient due to increased household consumption, investment and well-maintained inflation. On the fiscal side, there is still ample room for Indonesia's performance to continue supporting the economy," Darmawan said in Jakarta on Wednesday.
He said this aligned with Bank Mandiri's strategy, which generated sustainable business growth. Throughout 2023, Bank Mandiri had managed to enhance business volume growth across all segments and strengthen its efficiency.
The consolidated total assets of Bank Mandiri were Rp 2,174.2 trillion at the end of 2023, up 9.12 percent yoy from the previous year's Rp 1,992.5 trillion. This increase is attributable to the realization of Bank Mandiri's loan disbursement in 2023, which amounted to Rp 1,398.1 trillion, growing by 16.3 percent annually, surpassing the industrial credit growth of 10.38 percent yoy.
Considerable credit growth occurred in all segments, and was notably dominated by corporate credit, which was Rp 490 trillion at the end of 2023, up 18.3 percent yoy. Additionally, commercial credit also displayed positive performance, with the highest growth among segments at 21.2 percent yoy, for a value of Rp 238 trillion at the end of 2023.
"In maintaining economic growth momentum, Bank Mandiri is committed to jointly promoting economic sustainability in potential sectors in each region, including the [small and medium enterprise (SME)] and Micro segments," noted Darmawan
The SME segment grew by a commendable 14 percent yoy, reaching Rp 77 trillion, while the micro segment grew by 10.4 percent yoy, for a year-end figure of 168 trillion.
This growth was accompanied by continuously improving asset quality. By the end of 2023, Bank Mandiri's bank-only non-performing loan (NPL) ratio decreased by 86 basis points (bps) yoy to 1.02 percent. Despite the relative NPL decrease, the company maintains a conservative NPL coverage ratio of 384 percent.
"Bank Mandiri's financial performance throughout 2023 shows a positive and on-track momentum. Coupled with mature cautionary principles, evident in the continuously improving asset quality, we are optimistic that in 2024, the performance growth space is still open." added Darmawan.
Digitalization-driven efficiency
This intermediary function is complemented by consolidated time deposit (DPK) growth of 5.78 percent yoy, amounting to Rp 1,577 trillion in 2023. Darmawan added that DPK growth was driven by a 7.05 percent annual increase in low-cost funds, supported by 7.92 percent yoy growth in demand deposits to Rp 585 trillion and a 6.19 percent yoy increase in savings to Rp 587 trillion.
This growth also contributed to the continuous increase in the composition of low-cost funds, reaching 74.3 percent on a consolidated basis and 79.4 percent on a bank-only basis, contributing to maintaining the level of the bank's cost of funds (CoF) at a low 1.75 percent.
"The increase in low-cost funds is inseparable from Bank Mandiri's digital initiatives throughout 2023. By the end of 2023, the bank-only CASA ratio had reached a record-high of 79.4 percent," Darmawan said.
He mentioned that in recent years, Bank Mandiri had been one of the most active banks in Indonesia in developing technology-based banking products and services to meet the needs of customers and the public, with many of these initiatives yielding impressive results.
Through a series of innovations in the last year, the Super App Livin’ by Mandiri has been downloaded more than 37 million times since its launch in October 2021 and has facilitated more than 2.8 billion transactions throughout 2023. The transaction value of Livin’ by Mandiri in 2023 alone exceeded Rp 3,271 trillion, up 32.32 percent from the previous year.
During the same period, the Wholesale Digital Super Platform Kopra by Mandiri successfully managed transactions worth Rp 19,100 trillion. This comprehensive digital super platform can serve various transaction needs anywhere and anytime for various customer segments, from corporate customers to SME customers.
"We specifically continue to improve the functions and benefits of Livin’ and Kopra by Mandiri as solutions that can meet all customer needs, both financial and non-financial. Livin’ and Kopra are now also accessible to customers abroad, meaning there are no more time and place constraints; customers can manage their transaction needs anytime and anywhere," added Darmawan.
All the positive performance and initiatives undertaken by Bank Mandiri in 2023 are reflected in the performance of Bank Mandiri's stock, which was up 21.9 percent yoy as of December 2023, surpassing the growth of the Composite Stock Price Index (IHSG) by 6.2 percent yoy.
"Good financial performance and increasing investor confidence are the main factors contributing to the improvement in Bank Mandiri's stock performance in 2023," he commented.
In addition to recording positive financial performance, as an agent of development, Bank Mandiri continues its commitment to contributing to national development and supporting a sustainable ecosystem. This commitment is manifested through the implementation of Bank Mandiri's three ESG pillars: Sustainable Banking, Sustainable Operation and Sustainability Beyond Banking.
As of the end of December 2023, Bank Mandiri's total sustainable portfolio was Rp 264 trillion, with an increasing market share. Of this amount, the green portfolio was Rp 129 trillion, up 21.4 percent yoy, and the social portfolio was Rp 135 trillion, increasing 10.6 percent from the previous year.
Overall, Bank Mandiri's sustainable portfolio increased by 15.4 percent from 2022.
"Green financing has been directed toward focusing on sustainable sectors, such as renewable energy, including hydroelectric power, geothermal, transportation, to the electric vehicle ecosystem from upstream to downstream. The increase in the renewable energy sector in 2023 is quite significant, reaching 58.2 percent yoy from 2022," said Darmawan.
Bank Mandiri also consistently supports the transition toward the goal of net-zero emissions (NZE) by 2060. In line with this, Bank Mandiri has an ESG Desk as the point of contact for customers, especially in the wholesale segment, where they provide sustainable financing solutions such as Green Loans, Sustainability-Linked Loans and corporate-in-transition financing, as well as acting as an advisor for the company.
