Indonesia’s Bank Mandiri eyes acquisitions in Philippines, Myanmar

Photo By: Bank Mandiri

Indonesia’s PT Bank Mandiri Tbk will raise its provisions to 18-20 trillion rupiah ($1.4-$1.5 billion) for 2016 from 11 trillion rupiah a year earlier, as bad loans spread beyond the commodities sector, its CEO told Reuters on Sunday.

Non-performing loans rose to 3.86 percent of total lending at the end of the second quarter, from 2.43 percent a year ago, and will likely start recovering significantly only towards the end of 2017, said Kartika Wirjoatmodjo, CEO of Indonesia’s biggest bank by assets.

“In the next two, three, four quarters, our provisions would indeed be quite big,” Wirjoatmodjo said on the sidelines of a Mandiri event. “For existing creditors who have a high level of debt, their cash flow is not enough yet to repay it.”

Mandiri is “proactively” restructuring loans that it considers to be at the risk of default, and expects provisions to dip to 14-16 trillion rupiah next year, said Wirjoatmodjo, a former CEO of Indonesia Deposit Insurance Corp.

Bad loans in Indonesia’s mining sector nearly doubled in July from a year earlier, data from the financial regulator showed, as sluggish demand and oversupply hurt the ability of miners of commodities ranging from coal to copper to service their debt.

Debt woes have extended to other sectors, including consumer and property, Wirjoatmodjo said, adding that mid-sized businesses now appear more vulnerable even as big corporations are showing an improvement in their risk management.

Indonesia’s central bank on Thursday surprisingly cut its benchmark interest rate for a sixth time this year, in an effort to spur growth in Southeast Asia’s biggest economy.

State-controlled Mandiri is also setting its sights on regional growth, with plans to invest at least 300 million ringgit ($72 million) to open 10 to 12 branches in neighbouring Malaysia over the next three years, Wirjoatmodjo said.

In August, Indonesia and Malaysia agreed to give their banks greater access to each other’s markets as part of wider integration efforts among Southeast Asian nations.

Mandiri is also exploring acquisition opportunities in the Philippines and Myanmar, Wirjoatmodjo said, but declined to give more details.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.