Mandiri set for 2nd BOD reshuffle in 7 months

Mandiri set for 2nd BOD reshuffle in 7 months

Soraya Permatasari, Bloomberg/Jakarta

PT Bank Mandiri, Indonesia's largest lender, may have its board of directors shuffled at a shareholders' meeting on Dec. 21, seven months after the government replaced its management following a lending probe.

The government, which owns 69 percent of the lender, proposed the plan for a change in management on Nov. 30, Mandiri spokesman Ekoputro Adijayanto said in a telephone interview in Jakarta on Wednesday.

"They didn't say why they want the management change to be included in the agenda for the shareholders' meeting," he said.

The replacement plan comes at a time when the lender is planning to set up a company to manage and sell bad loans, which rose to 25 percent of its total lending in the third quarter from 7.5 percent a year earlier. The government overhauled management at the bank in May after the attorney-general started a probe into Rp 1 trillion (US$101 million) of loans at Mandiri.

The government replaced Bank Mandiri's President Director E.C.W. Neloe with Agus Martowardojo, who was moved from PT Bank Permata, Indonesia's seventh-largest lender.

Non-performing loans at Jakarta-based Bank Mandiri rose after the central bank, Bank Indonesia, tightened rules on loan classification this year. Indonesia is cleaning up its banking industry as it tries to recoup Rp 450 trillion it spent to rescue banks after the 1997 Asian financial crisis.

Mandiri, which means self-reliance in the Indonesian language, was formed by merging four state banks -- PT Bank Bumi Daya, PT Bank Dagang Negara, PT Bank Ekspor Impor Indonesia and PT Bank Pembangunan Indonesia -- in July 1999.