Bank Mandiri’s interest margin upper target 'challenging' to attain

Loan growth momentum could pick up in the second half of 2025.

Bank Mandiri is expected to see net interest margin (NIM) pressure in Q2 as cost of fund remain elevated.

It will be “challenging” for Indonesia’s largest bank by asset size to achieve the higher range of its NIM guidance of 5% to 5.2% in 2025, said UOB Kay Hian analyst Posmarito Pakpahan.

Its five-month performance reflects this: interest expenses rose by 8.9% month-on-month (MoM) in May 2025, and 36.1% year-on-year (YoY). This surge in funding costs offset its strong loan growth of 13.6% YoY, resulting in just a 4.2% YoY increase in net interest income, Pakpahan said.

Loan growth could pick up in the second half of 2025 as liquidity improves.

“We believe loan growth momentum could pick up in H2 2025, supported by expectation of a more accommodative liquidity environment from higher fiscal disbursement and accommodative measures by Bank Indonesia,” Pakpahan said.