Bank Mandiri's Office (Photo: The Insider Stories)

JAKARTA (TheInsiderStories) – The largest state-owned lender PT Bank Mandiri Tbk (IDX:BMRI) booked net profit of Rp20 trillion (US$1.4 billion) in 2017, increased by 53 per cent growth from the previous year.

This achievement is an improvement in Bank Mandiri’s performance after posting 32.1 per cent YoY decrease in earnings in 2016.

President Director of Bank Mandiri Kartika Wirjoatmodjo said the increase in profit is contributed from the increase in fee based income and operational cost control. During 2017, Bank Mandiri’s fee-based income rose 14.72 per cent YoY to Rp 21 trillion. While the operational cost can be reduced only up 7.38 per cent YoY.

These operational costs can be reduced because of a decrease in reserves of 41 per cent YoY to Rp 13.2 trillion.

The increase in profit is contributed by two segments. “That is the corporate and retail segment,” Wirjoatmodjo told reporters Wednesday (31/1).

In terms of the intermediary function, throughout 2017 Bank Mandiri has disbursed Rp 644 trillion of credit, up 8.7 per cent YoY. Bank Mandiri’s single digit loan increase and focus on low-risk retail segment. It makes Bank Mandiri’s net interest income fell 1.7 per cent YoY to Rp 44.8 trillion.

In terms of loan quality in 2017, Bank Mandiri recorded one of the improvements indicated by the decrease of reserve ratio to 142 per cent from 143 per cent.