Bank Mandiri to market mutual funds

Bank Mandiri to market mutual funds

Zakki Hakim, The Jakarta Post, Jakarta

Securities firm PT Mandiri Sekuritas, a subsidiary of the giant
state Bank Mandiri, plans to launch a total of Rp 20 trillion
(about US$2.3 billion) worth of mutual funds, a senior bank
official has said.

Bank Mandiri senior executive vice president of treasury and
international operations Clemento Escano said that the bank would
become the marketing agent for the mutual fund.

He told The Jakarta Post on Tuesday that the bank targeted
about Rp 5 trillion worth of mutual funds to be marketed by the
end of this year.

Most of the funds will be invested in bank recapitalization
bonds.

The domestic mutual funds industry has been booming since last
year as a growing number of banks, seeking an alternative source
of fee-based income, offer depositors an investment option which
could enjoy a tax break on interest earned from investing in bank
recapitalization bonds.

But the Bank Mandiri official said that the bank would not
guarantee the yield of the mutual funds in compliance with Bank
Indonesia regulations as that would create a risk for the bank.

Meanwhile, Mandiri Sekuritas vice president Denny R. Thaher
said that the mutual funds would be marketed mainly to Bank
Mandiri's corporate clients.

The planned mutual funds will be the largest on the market so
far. Previously, Bank Panin and Bank Danamon had each brought in
some Rp 10 trillion from selling mutual funds within a 10 to 17-
month period.

According to data from the Capital Market Supervisory Agency
(Bapepam), the size of the mutual fund industry's net assets last
year had reached Rp 46.62 trillion, or nearly a 500 percent jump
from the level in 2001.