Bank Mandiri to reduce the NPLs

JAKARTA. Bank Mandiri plans to reduce the non-performing loan (NPL) rate of Bank Mandiri by limiting the credit allocation through its regional offices.

To date, a regional office of Bank Mandiri is allowed to agree on a credit allocation at maximum Rp 250 billion per customer. Starting from March 2017, the regional office of Bank Mandiri can only allocate credit at maximum only Ro 10 billion per customer.

The management of Bank Madiri expects that this strategy can reduce the NPL rate, as well as prevent the potentials of NPLs in the future. As information, the NPL rate of Bank Mandiri has increased from 2.92% in 2015 to 3.96% in 2016.

The NPLs were mainly contributed by the commercial sector credit. President Director of Bank Mandiri Kartika Wirjoatmodjo said that Bank Mandiri had allocated as much as Rp 160 trillion commercial credits to the company in the middle segment. In 2016, the NPL rate of the commercial credit from this segment has sharply increased from 2.86% in 2015 to 9.32% .

The NPL has affected to the performance of Bank Mandiri. Last year, Bank Mandiri’s profits had dropped by 32.1% to Rp 13.8 trillion.

Corporate Secretary of Bank Mandiri Rohan Hafas said, the bank does not set target of the growth in credit allocation at the segment of commercial credits. “We are targeting a 0% growth in commercial credit in 2017,” Rohan told KONTAN, Thursday (23/2).

Aside of limiting the authority of its regional offices, Bank Mandiri will intensify the monitoring over credit allocations to commodity and mining sectors, as well as over their supporting industries.

Bank Mandiri is also ready to bring some cases related to the NPLs to the court. To date, Bank Mandiri have filed some cases related to the seven debtors to the court. Some of the cases might be settled through the mechanism of the postponement of debt payment obligations (PKPU).

Law practitioner Ignatius Andy said, PKPU is an alternative solution to protect the debtors, who still have good intentions to settle their problems related to the NPLs.
(Muhammad Farid/Translator)

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