Quantcast
Sunday , May 28 2017
Breaking News
Home / International Customs / Indonesia / Indonesia’s Bank Mandiri posts lowest annual profit
Indonesia’s Bank Mandiri posts lowest annual profit

Indonesia’s Bank Mandiri posts lowest annual profit

JAKARTA: Indonesia’s biggest bank by assets, Bank Mandiri, posted on Tuesday (14/02) a 32 percent drop in its 2016 net profit to the lowest in five years mainly due to an increase in provisions for bad loans.

State-controlled Mandiri delivered a net profit of Rp 13.8 trillion ($1.04 billion) for the full year ended Dec. 31, versus Rp 20.3 trillion a year earlier. That was the weakest figure since 2011, according to Thomson Reuters data. Mandiri’s net profit also came below an average estimate of Rp 15.7 trillion by 20 analysts.

The bank’s provisions at the end of 2016 stood at 24.6 trillion rupiah, more than double the 12.0 trillion rupiah a year earlier. Gross non-performing loans (NPL) stood at 4.0 percent, the highest since 2008, Thomson Reuters data showed. The rise in NPL started in the commodities sector but has spread to the consumer-related businesses, Mandiri CEO Kartika Wirjoatmodjo told reporters.

“We see that 2017 will still be challenging. The weakness is not fully over, although the cash flow of our customers is more stable,” Wirjoatmodjo said.

Mandiri’s earnings this year are expected to be supported by an improving economy and higher commodity prices, the CEO added.