Bank Mandiri's retail fee income grows faster than the balance sheet

Fee income grew 21% in FY12.

According to Barclays Research, Mandiri continued to deliver strong performance on CASA mobilization and higher transaction based fee income generation. Its CASA growth at 23% y/y was above the system (19% y/y) and CASA ratio improved to 65% from 61% in 2011.

Here's more from Barclays:

Mandiri's fee income from retail transactions and third-party product sales also continued to grow faster than the balance sheet (21% y/y growth in FY12 fee income compared to 15% balance sheet growth).

Mandiri continued with its strategy to increase the mix of higher-yielding segments in its loan portfolio. Its micro loan portfolio showed strong growth (62%, y/y). Other higher yielding segments (consumer, small and commercial loans) also delivered robust growth (26%, y/y), taking the share of these segments in the loan mix to 54% from 51% in 2011.

Slipped on opex growth: Mandiri's PPOP for Q4 was below our estimates, mainly on account of higher opex. The bank booked Rp389bn (7% of opex) in Q4 for performance-related benefits for employees. Management has indicated that Rp200bn is one-time expense related to incentives given to retain employees, but Rp189bn is recurring. We are revising our opex growth forecasts to reflect higher employee costs.

Lower credit costs: PAT, however, was above our estimates, as higher upgrades (Rp490bn), particularly in corporate segment (Rp316bn) led to lower credit costs.