This growth, which exceeded the banking industry average of 12.36 percent yoy as of June 2024, has helped Bank Mandiri meet consolidated net profit growth of 5.23 percent yoy to Rp 26.6 trillion at the end of Q2 2024.

Bank Mandiri president director Darmawan Junaidi said the state-owned lender’s exceeding the banking industry average for credit growth was inseparable from Indonesia’s steadfast economic development amid the dynamics of the global economy.

Following this achievement were improvements in asset quality, in line with Bank Mandiri's implementation of sustainable, systemic, logical and measurable prudential principle.

"To encourage credit growth, Bank Mandiri is focusing on expanding the ecosystem and optimizing potential in each region in order to achieve maximum results according to the needs of communities and customers," Darmawan said.

Bank Mandiri also managed to achieve optimal growth rate in consolidated credit across all segments. The largest contributor was loan extensions to the corporate segment, reaching Rp 561 trillion in Q2 2024, up 29.7 percent yoy from Rp433 trillion in the previous year.

In addition, the commercial segment recorded an increase of 21.7 percent yoy to Rp 262 trillion, while the micro, small and medium enterprise (MSME) segment grew 6.3 percent yoy to Rp 127 trillion and the consumer segment grew 9.02 percent yoy to Rp 116 trillion.

Credit distribution also boosted Bank Mandiri's asset acquisition as it reached Rp 2.258 quadrillion on a consolidated basis at the end of June 2024, marking annual growth of 15 percent.

"In the future, Bank Mandiri will continue to innovate and transform to provide better services. Through proper business mapping, we are confident that Bank Mandiri will continue to grow and develop into a superior and competitive bank at the regional and global levels," Darmawan said.

Meanwhile, Bank Mandiri's Q2 2024 profit was supported by interest income growth at a healthy rate of 12.5 percent yoy. In the same period, the lender booked Rp 19.41 trillion in non-interest income, marking growth of 5.74 percent yoy. The growth in non-interest income was driven by positive growth of 26.4 percent yoy in recurring fees from digital transactions via Livin' by Mandiri.

Darmawan added that the bank’s positive performance was inseparable from the contribution of its subsidiaries’ performance.

"On a consolidated basis, Bank Mandiri's subsidiaries were able to record a net profit of Rp 5.7 trillion, up about 10 percent from previous year, with Rp2.98 trillion of it was noted as net profit contribution to Bank Mandiri in the second quarter of 2024."

Maintaining asset quality

Amid uncertainties in the world economy and high credit demand, Bank Mandiri has remained consistent in maintaining asset quality by implementing the prudential principle.

Armed with decades of experience as Indonesia’s largest corporate bank and long-term transformation of its business processes, Bank Mandiri has been able to maintain credit quality.

This is reflected in its bank-only nonperforming loans (NPLs), which had declined to 1.01 percent as of June 2024. This is an improvement of 52 basis points (bps) compared to 1.53 percent in June 2023.

Darmawan noted that in maintaining asset quality, Bank Mandiri had maintained sufficient reserves also, recording an optimal level of 332 percent in its bank-only NPL coverage ratio as of June 2024.

Its disciplined approach to risk management allowed Bank Mandiri to maintain bank-only cost of credit (CoC) at 0.86 percent as of June 2024, an improvement from the 0.98 percent recorded in June 2023.

"This achievement is the result of Bank Mandiri's highly prudent and conservative initiative in maintaining its level of asset quality," said Darmawan.

Enhancing transformation

The intermediary function of Bank Mandiri is balanced by 15.4 percent yoy growth in consolidated third-party funds (DPK) to Rp 1.651 quadrillion in Q2 2024.

According to Darmawan, this was driven primarily by an annual increase of 17.9 percent in low-cost funds, supported by 23 percent yoy growth in current accounts to Rp 612 trillion as well as 13.4 percent yoy growth in savings to Rp 626 trillion.

The growth also helped drive a continued increase in low-cost funds, or the current account savings accounts (CASA) ratio, to 79.7 percent on a bank-only basis, the highest level in the bank's history. In turn, this achievement contributed to maintaining bank-only cost of funds (CoF) at a low level of 2.08 percent.

"The growth in low-cost fund placements at Bank Mandiri cannot be separated from the ongoing digital transformation with a focus on innovation, to produce the best service for customers," said Darmawan.

Through a series of innovations until mid-2024, Livin' by Mandiri has served more than 26 million customers at home and abroad to mark a yoy increase of 35 percent. The Bank Mandiri's flagship super app has booked 1.8 billion transactions until June 2024, with a transaction value of more than Rp 1.883 quadrillion, up 25 percent from the same period in 2023.

Meanwhile, wholesale financial services platform Kopra by Mandiri managed 610 million transactions in Q2 2024 with a transaction value of Rp 10 quadrillion. The digital platform provides various transaction services, anywhere and at any time for various types of businesses, from corporations to small and medium enterprises (SMEs).

"We specifically continue to improve the functions and benefits of Livin' and Kopra by Mandiri as solutions that can meet all kinds of customer needs, both financial and nonfinancial. Livin’ and Kopra can now also be enjoyed by customers abroad, meaning there are no more restrictions on either time or place, so customers can manage their transactions anytime and anywhere,'' Darmawan said.