Bank Mandiri forecasts profits to triple in 2000
Bank Mandiri forecasts profits to triple in 2000
JAKARTA (JP): The state's newly established Bank Mandiri
expects to triple its profits from about Rp 400 billion this year
to around Rp 1.2 trillion in 2000, according to the bank's
president and chief executive, Robby Djohan.
The bank's assets, however, were predicted to grow by only 10
percent next year.
"We can't expect the assets to grow faster because it will
need a lot of capital to do so. We don't have that much capital,"
he told reporters on Thursday on the sidelines of an investment
seminar.
He said Bank Mandiri's liquidity would probably not be enough
to allow the bank's assets to grow more than 10 percent.
Bank Mandiri was formed last October to merge four state
banks: Bank Export Import Indonesia, Bank Pembangunan Indonesia,
Bank Bumi Daya and Bank Dagang Negara.
The legal merger itself is scheduled to take place at the end
of the month with all the four banks handing over their assets to
Bank Mandiri.
Bank Mandiri would then undergo recapitalization, which will
be funded by the government. The government has allocated some Rp
137.8 trillion to fund the recapitalization program of several
troubled banks.
The profit estimate for Bank Mandiri, which will also take
over the corporate-lending portfolio of state-owned Bank Rakyat
Indonesia, is based on the latest balance sheets of the merged
banks.
Robby said the government was expected to begin recapitalizing
the bank later this month and finalize the program by the end of
the year.
He said the recapitalization would occur gradually.
"I want to recapitalize the bank only when it is ready. There
are certain areas that still need improvement," he said.
He said areas that still needed to be restructured include the
bank's investment portfolio, branch management, human resources
and organizations.
"Hopefully, the restructuring of all these things will be done
by the end of this year. Then I can say that the bank is ready
for total recapitalization," he said.
He said Bank Mandiri would concentrate on being a retail bank
with priorities in particular sectors, including fee-based income
and pre-finance.
"Retail banking is going to be very important and I think it
will probably pick up," he said.
He said the bank was ready to offer loans to eligible indebted
companies currently trapped by bad debts to help them accelerate
the recovery process.
According to Robby, Bank Mandiri currently handles around Rp
40 trillion worth of non-performing loans taken out by a number
of indebted companies. (cst)