Bank Mandiri reports a profit in contrast to BRI's decline
Bank Mandiri has reported a 10.5% annual increase in its bank-only net profits to Rp 8.59tn ($645.12mn) over the first five months of the 2015 due to a surge in its lending portfolio, which rose 13% yoy. In contrast and despite increases in both net interest and fee-based incomes, Bank Rakyat Indonesia (BRI) has suffered a 6.9% yoy decline in its net profit to Rp 9.1tn ($684.2mn).  The unaudited data does show a significant increase in provisions, up 38% from last year to Rp 362tn ($272.2mn).  BRI has declined to comment on the results.
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Linkedin Tassia Sipahutar (The Jakarta Post) Jakarta ● Fri, June 26, 2015

State lenders Bank Mandiri and Bank Rakyat Indonesia (BRI) reported contrasting profit results in May, according to their latest unaudited financial data.



While Mandiri recorded a year-on-year (yoy) increase in its bank-only net profits during the first five months of 2015, BRI reportedly saw a yoy decline in the same period.



Mandiri, now the country's largest bank by assets, recorded a 10.5 percent annual increase in its bank-only net profits to Rp 8.59 trillion (US$645.12 million) during the first five months of 2015, according to data obtained by The Jakarta Post.



The growth in net profit was backed by a surge in its lending portfolio, which rose 13 percent yoy to Rp 540.9 trillion in May.



Mandiri president director Budi Gunadi Sadikin previously said the lender had reaped satisfactory results, which he claimed were 'above the industry on average' despite the cooling economy.



'This is not the time to jack up loans aggressively. We managed to boost our loans at a safe rate that is still within the growth projection set by financial regulators,' he said.



The banking industry's growth projection for 2015 is, as reported before, set at between 15 and 17 percent.



Budi said Mandiri was also able to maintain 'manageable' costs during the period, resulting in a net interest margin (NIM) that fell only slightly to 5.8 percent in May from 5.9 percent a year before.



In third-party funds (DPK) or customer funds, Mandiri reaped around Rp 626.13 trillion from January to May, a 15.2 percent rise from the same period in 2014.



A majority of the DPK figure was still dominated by cheap funds ' consisting of savings and demand deposits ' which climbed 13.1 percent yoy.



According to Budi, Mandiri will keep its non-performing loan coverage ratio at above 100 percent to cope with possible quality deterioration in its lending portfolio for the remainder of the year. As of May, the coverage stood at 141.6 percent.



Meanwhile, BRI reportedly suffered a 6.9 percent yoy decline in its net profit to Rp 9.1 trillion in May, despite recording increases in both its net interest and fee-based incomes, according to the bank's data.



From January to May, BRI's net interest income grew 11 percent to Rp 22.55 trillion, while its fee-based income rose 26 percent to Rp 4.25 trillion from the previous year.



The unaudited data show that BRI ' which remains the most profitable lender ' allocated a significant increase in its provisions, up 38 percent from last year to Rp 3.62 trillion.



Its average NIM during the five-month period also fell to 7.3 percent from 8.2 percent posted in the same period in 2014.



In terms of lending, the bank saw its total loans grow at an annual pace of 9 percent to Rp 489.69 trillion, while its DPK increased 15 percent year-on-year to Rp 546.51 trillion.



BRI finance director Haru Koesmahargyo declined to comment on the results, saying that he would wait until the end of the first half to offer an explanation.



Mandiri and BRI are both listed on the Indonesia Stock Exchange (IDX). On Thursday, Mandiri's shares ' offered as 'BMRI' ' rose by 1 percent to Rp 10,000 apiece from a day before, while those of BRI ' under the 'BBRI' code ' fell 1 percent to Rp 10,200 per share.