The state-owned lender Bank Mandiri reported Rp3.8 trillion in net profit in the first quarter of 2016 thanks to increases in net interest income and fee-based income.
The countrys largest bank in asset recorded a 19.1 percent in increase in net premium and net interest income to Rp13. trillion and 8 percent rise in fee-based income to Rp4.2 trillion.
President Director of the bank Kartika Wirjoatmodjo said the increase in net interest income and fee-based jacked up operating income that surged 16.3 percent on-year to Rp17.2 trillion.
The increase in income contributed to 15.9 percent growth in operating profit to Rp9.3 trillion, Kartika said here on Sunday.
“Productivity of assets, liability and transaction business have been well managed amid the domestic and global economic slowdown,” he said.
The liquidity of the bank was marked with the increase in third party funds held by the bank to Rp655.1 trillion in the first three mo9nths of the year, he said.
Around 62 percent or Rp406.5 trillion of the third party funds were in giro and savings . Savings dominated the cheap fund growing Rp18.2 trillion to Rp248.8 trillion.
Its outstanding credits totaled Rp574.7 trillion by the end of the first quarter of the year, and 85.7 percent of the credits were categorized as productive credits, Kartika said.
Infrastructure credits totaled Rp46.42 trillion and credits for micro, small and medium enterprises (UMKM) reached Rp74.6 trillion.
Its people credit facility called KUR reached Rp3.7 trillion or 28 percent of the whole years target of Rp13 trillion with 466,000 recipients in the first quarter of the year.
Earlier a bank director Tardi said the target set for this year is more than quadrupling the target of only Rp3.2 trillion in 2015.
The bank has established more small branch offices in the regions to facilitate disbursement of KURs for micro, small and medium enterprises.
The small branch office would bring the bank closer to small depositors, Tardi said.
In 2016, Bank Mandiri hopes to increase the number of its small branch offices to around 400 units all over the country.
By April 2016, at least 26 new units have been in operation and by September the remaining 374 units are expected to be ready for operation.
With the additional branch offices, the bank hopes to expand its market among the small and medium enterprises, which have proved more resistant to economic crisis.
The small and medium enterprises provide a potential market for banking business in the country, banking observers have said.
Currently, Bank Mandiri has 3,021 outlets including 600 units of kiosk all over the country.
Bank Mandiri also has 17,000 agents for financial services without office for inclusive finance in various areas in the country.
They include 8,759 individual agents and the rest institutional agents .
In 2015, the bank reported a better-than-expected net profit but its bad loans crept up partly due to its exposure to the commodities sector.
The bank posted a net profit of Rp20.3 trillion in 2015, or about 2 percent higher than in 2014.
Its outstanding credits surged 12.4 percent to Rp595.5 trillion.
Growth in net profit was the smallest in a decade, as the bank stepped up provisions. But the lenders 2015 profit was still higher than the average forecast of Rp19.59 trillion.
Its gross non-performing loans (NPL) rose to 2.60 percent of total loans by the end of 2015, from 2.15 percent in the previous year.
Gross NPL is predicted to be around 2.5 percent to 3 percent in 2016, Kartika has said.
