Mandiri books 14 percent increase in 2004 profit
The Jakarta Post, Jakarta
Bank Mandiri, the country's largest lender in terms of assets, booked a 14.6 percent increase in its 2004 net profit, thanks to its lending expansion.
Publicly listed Mandiri boosted its lending portfolio last year to Rp 94.4 trillion (about US$1.3 billion), a 24.3 percent increase from a year before, boosting its net profit to Rp 5.26 trillion.
The increased volume of loans, together with a higher net interest margin of 4.3 percent compared to 3.3 percent in 2003, helped boost the bank's net interest income -- revenue from borrowers minus interest paid to depositors -- to Rp 9.5 trillion last year.
Mandiri's loan growth also resulted in last year's higher loan-to-deposit ratio rising to 54 percent from 43 percent in 2003.
The bank also reached its target of reducing corporate loans to less than 50 percent of its total loans. Corporate loans grew by only 10.9 percent as against consumer loan growth of 125.9 percent.
Mandiri also reported a capital adequacy ratio of 25.3 percent and declining nonperforming loans of 7.1 percent. Both figures are common indicators for measuring a bank's financial health.
Along with efforts to maintain its performance, the bank is also strengthening its commitment toward fighting bribery by signing a supervision agreement with a non-governmental organization.
Mandiri's president director E.C.W. Neloe signed recently a memorandum of understanding on an integrity pact with the Transparency International-Indonesia (TII).
Under the pact, the bank and TII will jointly develop sound mechanisms on supervision, complaints and reports, conflict resolutions and a reward-and-punishment system, as well as a witness protection scheme to create a more transparent and antibribery business environment.
The pact is the first in the country's banking business and is hoped to trigger similar implementation in the future, Neloe said in a statement.
TII is a local affiliation of the Berlin-based TI -- an international organization that focuses on fighting bribery and corruption.