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Robust growth in Mandiri lending, profits
Ika Krismantari , The Jakarta Post , Jakarta | Fri, 10/31/2008 9:53 AM | Business
Bank Mandiri, the nation's largest lender by assets, posted a 24.4 percent growth in net profits after the first nine months of the year compared to a year earlier, thanks to robust lending and an increase in fee-based revenues.
The bank booked Rp 3.9 trillion (around US$366 million) in net profits from January to September, from Rp 3.1 trillion posted in the same period last year.
Vice president Wayan Agus Mertayasa told a media briefing that the growth in profits was attributed in particular to a substantial rise in lending. It rose 34 percent to Rp 162.8 trillion as of the end of September, from a year earlier at Rp 121.7 trillion.
The 20.5 percent rise in fee-based revenue to Rp 3.123 trillion also contributed to the growth in profits, Wayan added.
Despite the rapid growth in lending, Wayan said the bank remained prudent as evident in the low level of 0.6 percent in non performing loans (NPLs), a big reduction from 3.3 percent from the previous year.
Wayan however acknowledged that lending would slow down towards the end of the year and perhaps into next year, as banks would be more selective to minimize risks while the global financial crisis would be drying up liquidity.
The bank would even encourage its customers to exchange their dollar holdings with the rupiah to help retain enough liquidity at the bank, Wayan said.
Still, the bank is upbeat that full-year lending growth would not go below the targeted 18 percent despite the current economic conditions.
Mandiri shares at the Indonesia stock exchange rose 9.2 percent to close at Rp 1,300. Bloomberg said that the stock had declined 63 percent this year, compared with the 57 percent slide in the Composite index.
Meanwhile, Bank Permata, included in the country's 10 largest banks by assets, also reported that net profits for the first nine months went up, reaching Rp 389.9 billion, a rise of 3.4 percent.
Loans grew 37 percent to reach Rp 33.7 trillion on an unaudited consolidated basis, said president director Stewart D. Hall.
In this challenging global market, the bank remains committed to safeguarding stakeholders' interests and to the delivery of the best service without compromising prudent banking principles."
The Bank's key financial performance ratios remained at healthy levels. It ended the period with a capital adequacy ratio (CAR) of 11.2 percent, higher than Bank Indonesia minimum requirement of 8 percent.
NPL ratio was also down from 2.2 percent at the end of September 2007 to 0.7 percent at the end of September 2008.
Permata shares closed unchanged at Rp 500.
