Bank Mandiri posts 27% increase in 2003 profit<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
The net profit of state-owned Bank Mandiri, the country's
\nlargest bank in terms of assets, skyrocketed by 27.9 percent last
\nyear, despite a 19 percent decline in revenue from interest.<\/p>\n
The bank said on Wednesday it posted an audited net profit of
\nRp 4.6 trillion (US$541 million) last year, up from Rp 3.58
\ntrillion in 2002; although its income from interest dropped to Rp
\n25.55 trillion from Rp 31.87 trillion. It did not elaborate on
\nwhy this income had declined.<\/p>\n
A summary of its financial report attributed the surge in
\nprofit to the lower cost of funds, thanks to a sharp decline in
\nthe central bank's benchmark interest rate.<\/p>\n
Mandiri said that expenses for interest were down to Rp 17.55
\ntrillion last year from Rp 25.01 trillion in 2002.<\/p>\n
An increase in the bank's non-interest income, from fees,
\ncommissions, foreign exchange gains and sales of securities also
\nlifted the bank's profit. Non-interest income surged by 3.1
\npercent to Rp 3.74 trillion from Rp 3.63 trillion.<\/p>\n
The bank's capital adequacy ratio rose to 27.7 percent last
\nyear from 23.4 percent in 2002, while return on equity fell to
\n23.6 percent from 26.2 percent.<\/p>\n
The bank said its third-party funds declined 2.9 percent to Rp
\n178.8 trillion, as part of its attempt to reduce its costs.<\/p>\n
However, demand deposits had surged by 17.4 percent to Rp 38.2
\ntrillion, savings leapt 38 percent to Rp 41.3 trillion and time
\ndeposits increased by 18.3 percent to Rp 99.3 trillion.<\/p>\n
During last year, the bank has disbursed Rp 10.5 trillion of
\nlending funds, up by 16.1 percent to Rp 75.9 trillion of its
\ntotal lending. The lending was mostly channeled to the commercial
\nand consumer sectors last year.<\/p>\n
Lending to the corporate sector made up 52 percent of the
\nbank's total lending portfolio, while lending to non-corporate
\nsector accounted the remaining 48 percent. In 2002, corporate
\nlending reached 63 percent of the bank's total lending, while
\nnon-corporate lending accounted for only 37 percent.<\/p>\n
Mandiri also reported that its gross non-performing loans rose
\nto 8.6 percent last year from 7.3 percent in 2002, as it had to
\nspare a provision to cover bad loans belonging to pulp and paper
\ncompany PT Kiani Kertas. The bank bought the loan from the
\nIndonesian Bank Restructuring Agency in 2001.<\/p>\n
The bank had to provide the 139 percent provision to cover the
\nNPL exposure, or Rp 3.4 trillion, which is higher than the
\nmaximum requirement set by the central bank, the bank said.<\/p>\n
The bank plans to allocate 50 percent, or Rp 65 per share, of
\nits net profit for dividend payments. The allocation will be
\napproved during its annual shareholders meeting in May.<\/p>\n
The government hopes to sell 20 percent of its shares in
\nMandiri this year through a private placement, after selling a 20
\npercent stake through an initial public offering in the middle of
\nlast year.<\/p>",
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