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Mandiri passes BRI as RI’s largest bank
Bank Mandiri has become the largest lender in Indonesia after incorporating the assets of Bank Syariah Indonesia.
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State-owned publicly listed Bank Mandiri has become the largest lender in Indonesia after booking double-digit asset growth, overtaking state-owned publicly listed Bank Rakyat Indonesia (BRI).
Assets of Bank Mandiri totaled Rp 1.58 quadrillion (US$110.56 billion) in March, up 20 percent from a year earlier, according to a press release from the lender, which is traded on the local bourse under the ticker symbol BMRI. The growth was largely a result of the consolidation of the newly-established Bank Syariah Indonesia (BSI).
“This significant asset growth is supported mainly by the successful merger of Bank Mandiri Syariah and two sharia bank subsidiaries of other state-owned banks to form Bank Syariah Indonesia and become a subsidiary of Bank Mandiri,” Bank Mandiri president director Darmawan Junaidi was quoted in the release as saying in late April.
With assets totaling Rp 1.41 quadrillion, BRI now finds itself in second place, ahead of Bank Central Asia (BCA), Bank Negara Indonesia (BNI) and Bank Tabungan Negara (BTN).
BRI, whose stock is identified by the ticker symbol BBRI, had overtaken Bank Mandiri as the country’s largest bank in terms of assets in 2017 and had maintained the lead until this year. BCA, the largest private lender, which is traded under the ticker symbol BBCA, has remained in third place for at least five years, followed by BNI and BTN.
The quality of assets in the banking industry has been declining as the COVID-19 pandemic forced lenders and borrowers to restructure loans, while the government has relaxed the classification of nonperforming loans (NPL). The loans-at-risk (LAR) ratio was recorded at 23.8 percent in February while the gross non-performing-loan (NPL) ratio was 3.17 percent in March, according to data from Bank Mandiri and the Financial Services Authority (OJK).
Read also: Indonesian banks' results reflect deteriorating assets, but hopes remain: Experts
Sucor Sekuritas analyst Edward Lowis noted that the recent asset growth at Mandiri was limited to a financial statement matter and said he therefore expected the banking industry to continue business as usual.
“For this year, the asset growth is expected to be modest,” Edward told The Jakarta Post in a phone interview on Friday, adding it was forecast to grow by between 5 and 6 percent.
“I think BRI and Mandiri will remain in balance in terms of assets, as assets and loans, both from corporate as well as micro, small and medium enterprises, are still growing in line without one outperforming the other.”
Bank Mandiri has forecast 5 percent growth in national loan disbursement this year on the back of an expected economic recovery. BRI is expecting its loan disbursement to rise by 7 percent and BCA by between 4 and 6 percent.
Read also: Banks expect loan disbursement to rebound this year
Although loan disbursement was expected to expand this year, the banking industry faces a risk from volatility in the rupiah exchange rate against the United States dollar and commodity prices, said analysts at credit rating firm Moody’s Investor Service.
“Our assessment on credit conditions incorporates the asset risks to banks associated with volatility in currency and commodity prices, given the country’s reliance on external funding and commodity exports, respectively,” the analysts said in an analysis published on May 19.
“Also, Indonesian banks have sizable exposure to micro, small and medium-sized businesses that tend to be more vulnerable to economic downturns than their larger counterparts.”
