Bank Mandiri books 3Q net profit of Rp 1.1 trillion

JAKARTA (JP): The country's largest bank, state-owned Bank Mandiri reported on Thursday a consolidated net profit of Rp 1.1 trillion (about US$199 million at the current rate).

It said that assets had risen to Rp 233 trillion as of September from Rp 225 trillion as of December last year.

The bank was established in July 1999, through a merger of four state banks: Bank Bumi Daya (BBD), Bank Dagang Negara (BDN), Bank Expor Impor (Bank Exim) and Bank Pembangunan Indonesia (Bapindo).

"We are very pleased with the financial performance we have been able to achieve to date," president of Mandiri E.C.W. Neloe said.

Following the economic crisis, most banks have yet to fully recover as constraints in their legal lending limits hamper their ability to raise profits.

Bank Mandiri said that its CAR level as of Sept. 30, was 25.8 percent, far higher than the minimum CAR of 4 percent set by the government.

CAR measures the ratio of banks' assets against their risk weighted credits. The more loans are channeled, the more assets banks must have to maintain a healthy CAR level.

Banks must maintain a minimum capital adequacy ratio (CAR) of 4 percent this year and 8 percent next year.

Bank Mandiri said that nonperforming loans in September declined to Rp 21.3 trillion from Rp 31.2 trillion in December.

"The September position, however, does not fully reflect all the credit restructuring completed to date," the bank added.

By the end of September, Bank Mandiri said, it had restructured 85 percent of its nonperforming loans.

"Accordingly, nonperforming loans vis-a-vis total loans are projected to decline from 51 percent in September 2000, to 22 percent by December 2000, and down to 3 percent by the end of 2001," the bank said.

Bank Mandiri further said that most of the branches of the former four banks were now part of an integrated network ahead of initial schedules.

"Ninety percent of Bank Mandiri's activities are now on-line on one IT (information technology) platform, with full integration expected in March 2001," it said.

Because of better operation efficiency, Bank Mandiri is also able to achieve a competitive cost to income ratio of 37.6 percent, according to the bank.

But Neloe said that much work remains to be done to further strengthen Bank Mandiri and improve its competitiveness and customer service.

He said that the bank was planning to float its shares in the stock market sometime in the fourth quarter of next year.

The bank's goal was to become financially stronger to help clients rebuild their businesses, he said.

"We are particularly committed to supporting export activities, which are experiencing good growth and which in turn are essential for a broad-based economic recovery," he said.

The bank had said earlier that as of September, it had channeled some Rp 600 billion in export financing for small and medium size companies.

Bank Mandiri estimated that by the end of this year it would have channeled a total of Rp 1.2 trillion to Rp 1.3 trillion. (bkm)