BMRI 2015

More focus in Micro and retail banking

Background

Bank mandiri is a state owned bank in Indonesia that has been a biggest banking at Indonesia since monetary crisis of 1998. There were more than ten banks which were merged become one giant bank. They consisted of bank  bumi daya, bank bali,bank dagang Negara and etc. 

Mandiri has many subsidiaries such as mandiri tunas finance, bank sinar harapan bali,Bank Syariah mandiri, mandiri securities, Asuransi jiwa in health, Mandiri axa general insurance, Bank mandiri Europe limited,mandiri international remittance sendirian berhad and etc. They generally has linked synergy with others state owned company such as Pos Indonesia, BPJS and etc.

Bank mandiri was recognized as a banking company which concerned in giving loan for corporate segment, now, the company seemed to change its strategy to capture higher margin. The biggest revenue in 2014 of the company was contributed by micro & retail banking segment. There was over than 30 trillion rupiah of interest income from the sector.

Based on its annual report the company put three core of strategy to advance micro and retail segment, it consist of wholesale transaction, retail payment and retail financing.

Bank Mandiri is a state owned company that is owned by the government of Indonesia (60%) and public (40%). The company is under command of ministry of BUMN, all decisions and strategies are directed by ministry of BUMN. If Bank Mandiri is likely transformed in to retail banking, it will compete with another bank that is owned by government, BRI. The micro and retail segments are ruled by BRI, it has been the market leader for the segment in last decades.

In 2014 the interest income of the company was 62,637,942 million rupiah which was 24 % higher than interest income of 2013. The net interest margin dropped as the interest rate of central bank was relatively high; the bank has to provide higher interest rate for its customer of deposit. As the result of that, the ratio of interest income to net loan in 2014 was 15.2 % which was higher than same ratio in 2013 that was at 13.7 %.

The biggest contributor of interest income in 2014 was achieved by micro and retail segment that was amounted to IDR 20,653,671 million. The corporate segment was only able to generate interest income amounted to IDR 12,018,419 million. In the same year company’s loan to deposit ratio was 79.4 % (Net loan / Deposit ratio) that was likely lower than LDR in 2013 which was 81%. The company may expand more credit in 2014.