Mandiri 1H 2010 profit up 38% to $477mln

Indonesia approved $775.19mln rights issue between December and February increased optimism for growth.

PT Bank Mandiri (BMRI), Indonesia's biggest bank by assets, announced Friday a 37.8 percent increase in first-half net profit to Rp 4.3 trillion (US$ 477.3 million) due to strong lending and fee-based income.

"A significant increase in our operational profit is one of the factors of the net profit increase, but the main drivers are strong growth in lending, net interest income and fee-based income," finance and strategy director Pahala N. Mansury said.

Bank Mandiri's lending grew by 20 percent to Rp 218 trillion ($24.14 milion), which was "more than the 18 percent market growth", Pahala said, driving the bank's total assets up 12 percent to Rp 402.1 trillion ($44.52 million).

Despite strong growth in lending, Mandiri's capital adequacy ratio (CAR) is in the safe zone at 14.5 percent, Pahala added, expressing optimism that the figure could increase to about 16 percent after the bank's planned rights issue.

Bank Mandiri is eyeing a Rp 7 trillion ($775.19 million) rights issue in December or February next year at the latest, which was approved by the government earlier this month.

Strong growth in lending helped the bank's net interest income grow by 8.2 percent to Rp 9.39 trillion ($1.03 billion), while fee-based income sharply increased by 40.7 percent to Rp 3.66 trillion ($405.31 million).

View the full story in the Jakarta Post.