CLSA Bank Mandiri (BMRI IJ)

Bank Mandiri (BMRI IJ)

Our analyst Nico has prepared a note on Bank Mandiri (BMRI IJ) which presented at our Vegas forum yesterday (note attached).

Having seen its nonperforming loans carved-out during a post-Asia Crisis recapitalisation in 1999‚ the bank's balance sheet remains underutilised with a loan/deposit ratio (LDR) of 63%‚ while government bonds account for 29% of total assets. Recent loan restructuring and recovery efforts have also helped reduce Mandiri's gross non-performing loan ratio to below 5% from a peak of 25% in 2005. Improving asset utilisation‚ coupled with declining nonperforming loans‚ should continue to improve the bank's profitability over the next few years.

Feedback from the Forum
The focus was on what they've achieved since the merger with 3 other banks, and their business goals out to 2012.
Market share is now an impressive 25% in corp lending and corp deposits.
Corp loans made up nearly all of the asset mix just after the merger but now Retail lending makes up 25% of the total.
They now have the highest asset quality as measured by the lowest NPLs in the industry, the highest NIMs, and the lowest cost structure.
Loan growth in 2008 was impressively high (Corp +38%, Commercial +57%, International lending +32%, Consumer +35%.)

For the future they see Indonesia GDP growing 6-7% normalized and +4 or 5% GDP growth this year. Targeted annual loan growth figures for 2007-2012 are: (Corp +9%, Commercial +17%, Consumer +18%).