Optimizing Sustainable Business, Bank Mandiri Optimistic For Solid Performance With 3 Sharpening Strategies

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

JAKARTA - PT Bank Mandiri Tbk (BMRI) is committed to continuing to provide optimal service and performance, while continuing to prioritize business growth with good quality. In the second quarter of 2021, business growth and profitability continued to show improved performance, when compared to the same period last year.

In terms of business growth, Bank Mandiri recorded a consolidated loan growth of 16.4 percent year on year (yoy) to Rp 1,014.3 trillion. This growth was supported by the wholesale banking segment which recorded a growth of 7.13 percent yoy to Rp534.2 trillion at the end of the second quarter of 2021.

Meanwhile, financing to the MSME segment recorded an increase of 20.1 percent yoy to Rp. 98.3 trillion until the second quarter of 2021. This growth was also offset by a fairly well-maintained credit quality with a gross NPL ratio of 3.08 percent, down 21 bps yoy.

In terms of collecting third party funds (DPK), Bank Mandiri's TPF on a consolidated basis until the second quarter of 2021 grew 19.73 percent yoy to Rp1,169.2 trillion, with a composition of low-cost funds of 68.49 percent. The growth of low-cost funds was mainly driven by the growth of demand deposits (bank only) of 40.9 percent yoy in the second quarter of 2021.

Bank Mandiri's success in maintaining the growth trend of low-cost funds has also helped reduce the cost of funds or Bank Mandiri's cost of funds (CoF) year to date (bank only) to 1.71 percent, down from the level of 2.53 percent at the end of last year.

Bank Mandiri's solid financial performance at the end of the second quarter of 2021 was also seen in the achievement of the company's net profit which grew 21.45 percent to Rp. 12.5 trillion, which was mainly supported by growth in net interest income of 21.50 percent to Rp. 35.16 trillion, as well as growth in service-based income (fee-based income) by 17.27 percent to Rp15.94 trillion.

"We view this growth trend as a positive signal that demand is still there and is expected to continue to increase. However, we will remain vigilant in executing business plans going forward," said Bank Mandiri President Director Darmawan Junaidi in a written statement, Monday 30 August.

To optimize sustainable business growth, Bank Mandiri has sharpened its strategy, in which this strategy is certainly in line with the prospects for economic growth in Indonesia which is starting to show positive performance, reflected in economic growth in the second quarter of 2021 of 7.07 percent.

Three business focus

Darmawan emphasized that there are three focuses in sharpening the company's business. First, the integration of wholesale and retail businesses by maximizing the potential of the value chain in the wholesale customer ecosystem.

Second, optimizing business potential and leading sectors in the region as well as lending prudently to targeted customers by taking into account sectors that still have potential and faster recovery so as to produce credit quality that is quite good.

Third, Bank Mandiri will accelerate digital by developing digital solutions, process improvements, channel modernization, and increasing core banking capabilities.

"Through this strategy, Bank Mandiri is optimistic that bank-only loans will be able to grow 6-7 percent yoy by the end of 2021, of course, while still prioritizing quality growth," he added.

One of these commitments is realized through the distribution of People's Business Credit (KUR), which is the government's flagship program to provide access for MSMEs to financing. Bank Mandiri has distributed KUR of Rp. 19.68 trillion at the end of the first half of this year or 63.5 percent of the 2021 target. , with the number of recipients of more than 200 thousand MSME debtors with good quality maintained.

Then in the credit restructuring program affected by the pandemic, Bank Mandiri has given approval for the restructuring of debtors affected by the pandemic, namely to more than 548 thousand debtors with an approval value of Rp. 126.5 trillion. From this value, until June 2021, the total debt balance for COVID-19 restructuring is IDR 96.5 trillion, of which 62 percent of the total restructuring debtors are MSME business actors.

Not only that, Bank Mandiri's innovation and digital acceleration have also produced positive results. The digitization of services through the Livin' by Mandiri application until June 2021 recorded 7.8 million users, an increase of 45 percent from the previous year period.

Of this amount, Livin' by Mandiri financial transactions recorded an increase of 65 percent yoy to 434.9 million transactions with a transaction value of Rp728.9 trillion as of June 2021.

Aware of the vast potential of digital finance, Bank Mandiri in 2021 is currently developing digital solutions to encourage the growth of customer digital transactions by providing digital convenience solutions for both company and individual needs.