Photo by Mandiri Sekuritas

JAKARTA (TheInsiderStories) – State controlled lender PT Bank Mandiri (IDX: BMRI) aimed to raise fresh funds by issuing bonds worth Rp3.5 trillion (approx. US$250 million) in third quarter this year.

Bank Mandiri Director of Treasury and International Banking Darmawan Junaidi said the bond issuance is intended to meet the required recovery plan due to its designation of systematically important banks.

Junaidi said the bank is optimist that the offering will attract buyers amid a sell-off sweeping emerging markets as foreign investors dump riskier assets amid a rally in US dollar and Treasury yields.

The Indonesia’s central bank failing to stem the slide in the currency to a two-year low, expectations on accelerating rate hike by the US Federal Reserve, triggering a selloff in the nation’s stocks and bonds.

Djunaidi expects the central bank will continue to increase rates to curb an exodus of investors from the country’s stocks and bonds.

“Currently, the liquidity in the market is decreasing due to global volatility, we project markets to remain volatile until June as investors bet on the pace and timing of Federal Reserve policy tightening,” said Djunaidi on Thursday (25/5).

The second-largest bank by assets reported a 44 per cent jump in quarterly net profit as it slashed provisions for bad loans andwhile fee-based income climbed.

Mandiri’s first-quarter net profit stood at Rp5.9 trillion rupiah ($425 million), up from Rp4.1 trillion a year ago.

Mandiri lowered its provisioning costs by 29 per cent from a year earlier, while net interest income rose by 3.2 per cent and fee-based income rose nearly 15 per cent.

The gross non-performing loan (NPL) ratio, a measure of bad loans, stood at 3.32 per cent at the end of the first quarter compared to 3.98 per cent a year earlier.

The bank was under pressure last year to tackle bad debts after the company posted its worst profit in five years in 2016. It slashed provisioning costs by 35 per cent in 2017.

 

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