Intensively Carrying Out Digital Transformation, Bank Mandiri Prints A Net Profit Of IDR 28.03 Trillion In 2021

President Director of Bank Mandiri, Darmawan Junaidi. (Photo: Doc. Bank Mandiri)

JAKARTA - PT Bank Mandiri Tbk has succeeded in scoring business growth through the implementation of a consistent business strategy by optimizing digital transformation. As a result, throughout 2021, the company managed to record a net profit of IDR 28.03 trillion, growing 66.8 percent year on year (yoy).

President Director of Bank Mandiri Darmawan Junaidi explained that the significant performance achievement was in line with the national economic recovery supported by cross-sectoral government policies and the effective handling of COVID-19 to stimulate the domestic economy.

"Throughout 2021, Bank Mandiri has actively implemented digital transformation to achieve a long-term strategy and generate sustainable business growth," said Darmawan at Bank Mandiri's 2021 Performance Expose in Jakarta, Thursday, January 27.

According to him, the net profit growth was supported by the optimization of the company's intermediation function in line with positive economic growth.

It was noted that until the end of 2021, the company's credit rate on a consolidated basis was able to grow positively by 8.86 percent yoy to IDR 1,050.16 trillion, higher than the industrial credit growth of 5.2 percent yoy.

When broken down by segment, corporate loans are still one of the growth drivers with the realization reaching IDR370 trillion or growing by 8 percent yoy on a consolidated basis. Meanwhile, commercial credit recorded the highest growth in 2021 by 9.7 percent yoy to Rp. 174 trillion.

"In maintaining the momentum of economic growth, Bank Mandiri is committed to jointly encouraging economic revival in potential sectors in each region, including MSMEs," he explained.

It was noted that throughout 2021, Bank Mandiri's MSME lending continued to record a significant increase of 15 percent on an annual basis with the realization value exceeding Rp. 103.5 trillion. Growth on the MSME credit side is also supported by the efforts of the government and regulators through optimizing the distribution of People's Business Credit (KUR).

As a result, the realization of Bank Mandiri's KUR distribution managed to meet the target set by the Government in 2021 of IDR 35 trillion to more than 371 thousand debtors. In line with the government's mandate, Bank Mandiri's KUR distribution was mainly channeled to productive sectors such as agriculture, amounting to Rp.

This growth was also offset by asset quality which improved on a bank only basis. As of the end of 2021, Bank Mandiri's NPL ratio managed to decline by 48 bps yoy to the level of 2.81 percent. Although the NPL is relatively declining, the company continues to increase the reserve ratio or coverage ratio by 2,662 bps on an annual basis to 261.5 percent.

Credit restructuring affected by COVID-19 also continues to show a sloping trend in line with the momentum of economic growth. As of the end of December 2021, the total credit restructuring affected by COVID-19 (bank only) at Bank Mandiri was IDR 69.7 trillion, this position decreased compared to conditions at the end of 2020 which reached IDR 93.3 trillion.

"As a measure to anticipate the potential decline in credit quality, we continue to maintain the formation of reserves. As of the end of December 2021, Bank Mandiri has recorded CKPN costs of Rp. 13.9 trillion with the NPL coverage ratio at an adequate level," added Darmawan.

This intermediation function was also offset by strong growth in third party funds, which was 12.8 percent yoy on a consolidated basis to Rp1,291.18 trillion, higher than the growth in industrial deposits of 12.2 percent yoy.

Darmawan added that the growth in deposits was mainly supported by an increase in low-cost funds (CASA) on a consolidated basis of 19.8 percent yoy which also contributed to maintaining the Cost of Fund (CoF) at 1.71 percent on a consolidated basis, so that Bank Mandiri's CASA ratio (consolidated) increased by 407 basis points (bps) on an annual basis to 69.7 percent.

This increase in the CASA ratio was contributed by a consolidated growth in savings funds which increased by 12.8 percent yoy from Rp. last year.

The continued growth of CASA and loan disbursement also contributed to the growth of Bank Mandiri's assets on a consolidated basis in 2021 to IDR 1,726 trillion, growing 11.9 percent higher than the previous year's period.