Asia: Bank Mandiri expects sharp drop in bad loans

Bank Mandiri, the state-owned bank, has announced that it plans to cut its bad loan provisions to approximately 16 to 18 trillion rupiahs this year. In order to cut bad debt Bank Mandiri plans to increase asset sales and undergo some restructuring, according to the bank’s CEO Kartika Wirjoatmodjo.

Wirjoatmodjo expects better risk management and debt collection systems of gross non-performing loans, which are the sum of borrowed money upon which the debtor has not made his scheduled payments for at least 90 days, to decrease to 3% from 4% in 2016. Similarly, the tax amnesty scheme for nine months from midway through 2016 to the start of 2017 by the Indonesian government is expected to help. From this scheme, Bank Mandiri saw inflows of more than 30 trillion rupiahs. Wirjoatmodjo believes funds obtained from Indonesia’s tax amnesty scheme will also help the bank as it was able to convert some of these funds to assets and bonds.

According to RFi Group data, Bank Mandiri comes up second as the most important bank to companies in Indonesia whose annual revenue is USD 10 million or above.


Source: RFi Group – Commercial Banking Council (H1 2016)

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