Bank Mandiri slated for lower interest margins in 2025: analyst

But asset quality will improve thanks to new retail loans having better quality.

Bank Mandiri is expected to log a lower net interest margin (NIM) in 2025, according to a report by UOB Kay Hian.

The Indonesian bank reported a NIM of 5.15% in 2024, whilst UOBKH expects the bank’s 2025 NIM to be 4 basis points (bp) lower at 5.1%.

This will still fall within management’s guidance of a 5% to 5.2% NIM in 2025.

UOBKH has lowered its 2025 net profit estimates for Bank Mandiri by 7% on the back of lower NIM assumptions.Loan growth in 2025 may just be 1%, reports UOBKH analyst Posmarito Pakpahan.

Bank Mandiri’s net profit dropped 11% quarter-on-quarter (QoQ) and 13.9% year-on-year (YoY) to IDR13.7t, on the back of its operating expenses jumping 36.4%.

Its loans grew 19.5% YoY in 2024, and is expected to expand between 10%-12% in 2025 amidst tight liquidity.

The bank’s management believes that its liquidity in 2025 will be better on higher government spending, and that its deposits could grow above the industry average.

Non-performing loans (NPL) ratio is 1.12%, whilst loan at risk (LaR) ratio is 6.76%. NPL coverage is at 271% as of December 2024.

Asset quality will improve thanks to new retail loan growth, with UOBKH noting that new retail loans have better asset quality compared to legacy retail loans.