JAKARTA (TheInsiderStories) - One of the largest financial company in Indonesia, PT Bank Mandiri Tbk (IDX: BMRI), has completed the issuance of the Euro Medium Term Notes (EMTN) of US$300 million with an interest rate of 2 percent with five years of tenure. The issuance is part of the company’ EMTN issuance program with a principal amount up to $2 billion in several years.
Of the total principal amount of program, the lender has issued $1.25 million in 2020 and possible to releases up to $750 million in this year. Acting as joint lead managers in this transaction are Deutsche Bank AG, Singapore Branch, The Hongkong and Shanghai Banking Corporation Ltd., and Mandiri Securities Pte. Ltd.
In this month, the lender has released green bond worth of $300 million also with five-year tenor and a coupon rate of 2.00 percent. The notes received rating Baa2 from Moody’s and BBB- from Fitch. Director of Bank Mandiri, Panji Irawan, explained that the issuance of the green bond was part of the implementation of the Sustainable Finance Action Plan to met the International Capital Market Association standards.
Earlier, CEO of the state bank, Darmawan Junaidi, said in this year his office will focus to strengthening the subsidiaries performance. He hope the state firm loans could grow up to 6 percent as a group and will remain focused on the wholesale banking and corporate segment until 2024.
During 2020, Bank Mandiri‘ net profit dropped 37.71 percent from Rp27.48 trillion to Rp17.1 trillion. The decline was due to an increase in the allowance for impairment losses to Rp 22.89 trillion from Rp11.89 trillion in 2019. This is in line with the skyrocketing of non-performing loans from 2.33 percent in 2019 to 3.09 percent in 2020.
The net interest income and net premiums also fell 5.27 percent to Rp58.02 trillion. However, fee-based income increased 4.92 percent to 28.69 trillion. He also reported, total lending of the lender contracted 1.61 percent in annual basis, although still better than the 2.41 percent contraction experienced by the issuer.
This year, Bank Mandiri wants to expand the businesses, especially in digital sector. He quite optimistic that Mandiri Digital are able to meet the various needs of corporate and retail customer. The lender has introduced Livin by Mandiri as a refinement of the Mandiri Online apps and is expected to become a super app that utilizes an artificial intelligence approach.
With these development, he targeting, total loans of the bank could grow in the middle single digit range in 2021. Junaidi stated, there are several sectors starting to recover, such as food and beverage, telecommunications, agriculture, and trade. The net interest margin is estimating around 4.6 to 4.8 percent.
In this year, the Financial Service Authority (FSA) estimated that banking loans to grow around 7.5 percent in this year based on the business plans of the lenders. The third party deposit its also expecting to arise by 11 percent in 2021 compared to previous year.
According to the chairman, Wimboh Santoso, said to support this year targets, the agency has prepared various strategic policies. He also reported, total loans of the banks was contracted 2.41 percent in 2020 caused of the COVID-19 pandemic. In 2020, he was revised down the Indonesian bank credit growth from initial targets to grow 11 percent.
He was optimistic that bank’ bad loans still be maintained in the range of under 3 percent inline with the implementation of the debt restructuring. The latest Banking Survey conducted by Bank Indonesia pointed out the declining of new loan growth in the second quarter (2Q) of 2020, with the weighted net balance of demand for new loans deteriorating significantly to minus 33.9 percent compared with 23.7 percent in the previous period and 78.3 percent in the 2Q of 2019.
Written by Editorial Staff, Email: theinsiderstories@gmail.com