WHOLESALE BANKING | Cesar Tordesillas, Indonesia

Subsidiaries help lift Mandiri profits

Bank Mandiri’s subsidiary business units contributed 12.73 percent to the group’s overall net profit in 2011 with a net profit of Rp. 1.56 trillion or US$170 million.


The bank expects the trend to persist in the years to come.

Mandiri president director Zulkifli Zaini revealed that the subsidiaries have more than doubled their share in the group’s net profits in the past two years from Rp 401 billion in 2009, he said.

Mandiri’s subsidiary business units comprise sharia lender Bank Syariah Mandiri, insurer AXA-Mandiri Financial Services, Bali-focused lender Bank Sinar Harapan Bali, investment bank Mandiri Sekuritas, and financing firm Mandiri Tunas Finance.

“We expect that this year our subsidiaries’ contribution will reach about Rp 2 trillion,” said Zulkifli, in reference to an expected 28.2 percent increase in the subsidiaries’ combined net profit growth.

Mandiri’s consolidated net profits soared 32.8 percent to Rp 12.25 trillion last year thanks to a 27.7 percent increase in lending to Rp 314.4 trillion.

“The [net profit growth] is mainly supported by a surge in fee-based income,” Zulkifli said, citing a 37.1 percent surge in fee-based income to Rp 12 trillion last year.

AXA-Mandiri’s 228 percent surge in premium income to Rp 1.82 trillion helped boost the group’s consolidated net interest income  by 11.6 percent to Rp 21.78 trillion. Bank Indonesia’s unaudited financial report on Mandiri shows that the bank’s NII, excluding its subsidiaries, grew only 6.04 percent to Rp 19.15 trillion last year.

“That stems from a decline in our government recapitalization bond yield, lower lending rates also contributed to the slight increase in NII,” Mandiri chief financial officer Pahala N. Mansury said.

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