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.