JAKARTA (TheInsiderStories) – One of the largest bank in Indonesia, PT Bank Mandiri Tbk (IDX: BMRI) in the process to releases Euro Medium Term Notes (EMTN) in this month, said the company on Monday (04/12). Of the total principal amount of the EMTN issuances of $2 billion, the lender has issued $1.25 million in 2020 and possible to releases up to $750 million in this year.
According to management in a disclosure information today, the roadshow of the Eurobond has ran since April 9. Today, the lender has obtained $300 million through the issuance of sustainability bond which will be used to finance green and social projects. The green bond has a five-year tenor with a coupon of 2.00 percent.
The notes received rating Baa2 from Moody’s and BBB- from Fitch. Deutsche Bank, HSBC and PT Mandiri Sekuritas helped the company to release the notes. The 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.
Recently, the CEO of Bank Mandiri, Darmawan Junaidi, reported the net profit of the company dropped 37.71 percent during 2020 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 Bank Mandiri.
This year, the company 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 Bank Mandiri 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.
Even though its slowing down, he is optimistic that bank loans will gradually improve and start normal again at the beginning of 2021. 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.
-updated on 7 p.m.
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