Mandiri posts strong profit in first half

Mandiri posts strong profit in first half

The Jakarta Post, Jakarta

Bank Mandiri, the country's largest lender by assets, said on
Monday it had posted a 37.2 percent increase in its net profit in
the first semester this year as compared to the same period last
year.

The publicly listed bank's after-tax profit reached Rp 3.1
trillion (some US$330 million) as of June, up from Rp 2.2
trillion in the same period in 2003, the company said.

The net profit increase was largely because of a 36.7 percent
rise in net interest income -- the margin a bank receives between
interest expenses paid to depositors and interest revenue it gets
from creditors.

Mandiri, along with most banks here, is enjoying hefty
interest earnings in line with a declining trend in the Bank
Indonesia's benchmark interest rate (SBI). Banks in Indonesia
generally adjust their deposit rate downwards in line with the
SBI faster than they decrease their lending rates.

Mandiri's net interest income stood at Rp 5 trillion in the
first half of this year, up from Rp 3.6 trillion for the same
period last year.

Other crucial indicators that gauged a bank's financial health
were also encouraging, the statement said.

The bank's capital adequacy ratio (CAR) was at 27.5 percent,
far above the 8 percent minimum requirement set by the central
bank. However, its non-performing loans (NPLs) rose from 7.3
percent in the first semester 2003 to 8.2 percent as of June this
year.

CAR compares a bank's capital with its risked-weighted assets
including loans.

As of June, Mandiri boasted total assets of Rp 234.7 trillion,
including Rp 102.3 trillion worth of government bonds.