Moody's Downgrades Outlook, Bank Mandiri Strengthens Liquidity and Capital

JAKARTA - PT Bank Mandiri (Persero) Tbk. (BMRI) reiterated its commitment to strengthen its mitigation steps against various external risks in the future.

For information, Moody's Ratings revised the outlook for five major banks in Indonesia from stable to negative, including Bank Mandiri.

Bank Mandiri Corporate Secretary Adhika Vista explained that the rating agency's assessment of the banking sector is influenced by a number of factors, such as macroeconomic conditions, exchange rate movements, and the fundamentals of each bank.

"This is also a reminder for Bank Mandiri to anticipate external dynamics to maintain fundamentals sustainably," he said in a statement, February 12.

He added that in facing these challenges, Bank Mandiri will strengthen liquidity and capital management, as well as maintain the quality of financing.

In addition, Adhika said the company remained committed to running a disciplined risk management and continuing its sustainable growth strategy in line with regulator policies.

He added that Bank Mandiri is also a strategic partner of the government in maintaining the stability of the financial system and encouraging national economic growth.

Previously, Moody's downgraded the credit outlook of five major banks in Indonesia from stable to negative.

Moody's analyst, Clarabelle Tan, stated that the decision was in line with the negative outlook on the Indonesian government's credit rating at the Baa2 level, which reflects the increased risk to policy credibility.

He assessed that the risk was seen from the reduced certainty and consistency in the policy formulation process, as well as policy communication which was considered less effective in the past year.

Clarabelle added that if this condition continues, the trend of declining credit ratings can undermine the credibility of Indonesia's policies, which have been the foundation of strong economic growth, as well as maintaining macroeconomic, fiscal, and financial system stability.

Nevertheless, Moody's still considers the resilience of the Indonesian economy in its assessment, because structural factors such as solid natural resource wealth and demographics are considered capable of supporting stable and sustainable growth in gross domestic product (GDP).