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Bank Syariah Mandiri recovers profit through restructuring
Amid a high non-performing financing (NPF) ratio, Bank Syariah Mandiri (BSM) has recovered performance, translating to an increase in its net income to Rp 290 billion (US$22 million) in 2015.
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A bank officer talks to a customer at a Bank Syariah Mandiri branch in Central Jakarta recently. The biggest lender by assets in the country has managed to recover its 2015 profits after restructuring its non-performing financing. (The Jakarta Post/Jerry Adiguna)
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mid a high non-performing financing (NPF) ratio, Bank Syariah Mandiri (BSM) has recovered performance, translating to an increase in its net income to Rp 290 billion (US$22 million) in 2015.
President director Agus Sudianto acknowledged that the lender experienced poor performance in 2014 as its net income dropped to only Rp 72 billion. Burdened by bad financing, its margin was slashed by 8 percent.
However, he continued, the biggest Islamic bank in Indonesia by assets has restructured many of its non-performing loans and made Rp 423 billion in cash recovery. The margin grew 16.23 percent, from 2014 to 2015.
"The loan restructuring is to get the bank ready for the 2016-2020 corporate plan. We accomplished the change in 2015. The Rp 423 billion cost recovery also exceeded our target of Rp 400 billion," Agus said in Jakarta on Wednesday.
At the same time, he further said, the company prevented the cost of human resources from ballooning through its efficiency program, with costs growing only by 0.74 percent. It was significantly lower than to the 14 percent increase in 2014.
Director of finance Agus Dwi Handaya explained that microfinance registered an outstanding performance with a 54 percent increase in 2015 to Rp 3.5 trillion. For 2016, the bank aimed for more microfinancing through its branchless banking service to reach remote areas, aside from infrastructure financing.
"Since the government funds the infrastructure, then it is relatively safe. But, we will follow our parent company [Bank Mandiri]. If Bank Mandiri wins an infrastructure project, we will join in the financing," Dwi told thejakartapost.com. (ags)
