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Bank Mandiri books 12% Q1 loan growth
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T
he total value of loans granted by state-owned lender Bank Mandiri in the first quarter of this year grew 12.36 percent from the same period the year before to some Rp 1.2 quadrillion (US$80.85 billion), well on track to meet the bank’s annual loan growth target of between 10 and 12 percent.
More than half of Mandiri’s loans in the first quarter went to corporations or corporate subsidiaries. Loans to corporations grew 5.2 percent year-on-year (yoy) to Rp 396.2 trillion and loans to subsidiaries grew 20.7 percent yoy to Rp 278.3 trillion.
Loans to individuals, which comprise around 8 percent of the bank’s portfolio, grew by 10.8 percent yoy to Rp 103.8 trillion in the first quarter.
Darmawan Junaidi, president director of Bank Mandiri, said the hike in loan disbursement was closely related to the recovery of the Indonesian economy.
"[Through the growth,] Bank Mandiri emphasizes its role as a development agent that can give an optimum contribution to the country's economy," Darmawan said in a statement on Tuesday.
Read also: Major Indonesian banks hit loan brake after last year's frenzy
The bank also saw improvement in its loan quality, with non-performing loans (NPLs) dropping to 1.7 percent this March from the 2.74 percent in the same period last year.
Its loan at risk (LaR), which includes both restructured loans and nonperforming loans (NPL), fell by more than 5 percentage points to 11.3 percent this first quarter compared to same period last year.
Bank Mandiri said most borrowers were already able to make payments, including those impacted by COVID-19 pandemic.
In line with its improved credit performance, Bank Mandiri’s net profit increased by 25.2 percent to Rp 12.6 trillion this first quarter.
According to the company's presentation, the bank made an adjustment by offering special rate deposits to secure more liquidity, but it said the net interest margin (NIM) could be kept at 5.4 percent, which fell within its guidance for this year at between 5.3 and 5.6 percent.
Mandiri’s third-party funds, which largely consists of time deposits and savings, grew 9.62 percent yoy to Rp 1.39 quadrillion this first quarter.
Read also: Jokowi asks banks to support downstream financing
Despite having ample liquidity, Bank Mandiri completed on April 4 the issuance of a US$300 million corporate bond with an interest rate of 5.5 percent per annum with a three-year tenor.
According to Darmawan, the bank would use the proceeds to support its operations and provide liquidity in foreign currency.
"The market is in a favorable situation [for us], so issuing bonds is still our main option [if necessary]," Darmawan said at a media briefing on Tuesday.
Bank Mandiri's digital banking app Livin also posted a 45 percent increase in the number of transactions to almost 600 million, with more than 25 million registered users.
The bank plans to launch a buy now, pay later (BNPL) scheme, as well as an option to create secondary accounts that can cater for conventional, sharia and foreign currency, in the app before the end of this quarter.
