State owned bank, Bank Mandiri is increasing its restructuring and asset sales to reduce bad loans and cut its provisions for bad loans this year. At the end of 2016, 24.6 trillion rupiah is used for these provisions, more than twice the 12 trillion rupiah a year ago. The bank aims to cut its bad loan provisions to approximately 16 to 18 trillion rupiah this year.
At the end of 2016, 24.6 trillion rupiah is used for these provisions...The bank aims to cut its bad loan provisions to approximately 16 to 18 trillion rupiah this year.
Gross non-performing loans, the sum of borrowed money upon which the debtor has not made his scheduled payments for at least 90 days, is expected to fall from 4% in 2016 to 3% of the total loan this year. This will be achieved through better risk management and debt collection system.
Bank Mandiri is also positive about the market for crude palm oil, a commodity which is used to make soaps and chocolates. While the European Parliament calls for a restriction in the use of the commodity, the bank’s clients are increasingly serving the needs of other markets such as India and Africa and diversifying their exports.
Palm has the potential to be part of a large range of retail and consumer businesses and Bank Mandiri plans to step up its lending to the small-scale farmers in this market.
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)