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THE GIST
NEWS AND FEATURES
Global Philippines Fine Living
INSIGHTS
INVESTMENT STRATEGY
Economy Stocks Bonds Currencies
THE BASICS
Investment Tips Explainers Retirement
WEBINARS
2024 Mid-Year Economi Briefing, economic growth in the Philippines
2024 Mid-Year Economic Briefing: Navigating the Easing Cycle
June 21, 2024
Investing with Love
Investing with Love: A Mother’s Guide to Putting Money to Work
May 15, 2024
retirement-ss-3
Investor Series: An Introduction to Estate Planning
September 1, 2023
View All Webinars
DOWNLOADS
economy-ss-8
Inflation Update: Weak demand softens shocks
July 4, 2025 DOWNLOAD
948 x 535 px AdobeStock_433552847
Economic Updates
Monthly Economic Update: Fed cuts incoming   
June 30, 2025 DOWNLOAD
equities-3may23-2
Consensus Pricing
Consensus Pricing – June 2025
June 25, 2025 DOWNLOAD
View all Reports
Bonds Market Movements Top Picks Issuer List
  • Top Picks
  • Bank Mandiri
Bonds

Bank Mandiri

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Fundamental View

AS OF 17 Jun 2025
  • Bank Mandiri (Mandiri) is the largest state-owned bank in Indonesia with 60% government ownership. We therefore expect a very high likelihood of government support in times of need.

  • Mandiri’s strength had been its large corporate loan portfolio, which has allowed the bank to book lower credit costs compared to its peers over the pandemic. Mandiri is well capitalised in line with the other Indonesian banks that have relatively high CET1 ratios in the region, though we expect this to be reduced by higher dividend payouts over time.

Business Description

AS OF 17 Jun 2025
  • Bank Mandiri was established as a result of the mergers of four state-owned banks, Bank Bumi Daya, Bank Dagang Negara, Bank Ekspor Impor Indonesia, and Bank Pembangunan Indonesia, in the late 1990s. The bank was first listed in Indonesia Stock Exchange in 2003.
  • The Indonesian government holds a 60% stake in the bank. Foreign investors have a 32% shareholding while domestic investors have another 8%.
  • Corporates accounted for 36% of total loans, consumer for 7%, micro & payroll for 12%, SME for 5%, commercial for 18% and subsidiaries 22% at March 2025.

Risk & Catalysts

AS OF 17 Jun 2025
  • Funding cost pressure from the tight liquidity environment remains a headwind, so NIM and loan growth will hence be a challenge this year.

  • While Indonesia’s growth is projected at a reasonable ~5% in 2025 and could pickup over the medium term under the Prabowo administration, shifting macro sentiment towards Indonesia over growth slowdown, weak state finances and policy uncertainty under the Prabowo administration could weigh on spreads.

  • We see governance risks as increased with the move of SOE banks including Mandiri to Danantara; we expect the payout of higher dividends to fund policies of the current administration. However, we are comfortable with the CET1 ratio dropping over time to the 14-16% range of other APAC banks.

  • Asset quality has trended better than peers due to its loan book and growth focus being predominantly on large corporates. We see the probability of more state directed lending to projects that may not be the most commercially viable, but the effects would take a few years to play out.

Key Metric

AS OF 17 Jun 2025
IDR bn FY21 FY22 FY23 FY24 1Q25
PPP ROA 3.5% 3.9% 4.1% 3.8% 3.6%
ROA 1.7% 2.2% 2.6% 2.4% 2.2%
ROE 14.2% 19.0% 22.4% 20.5% 19.6%
Equity/Assets 11.9% 11.5% 12.0% 11.7% 10.3%
CET1 Ratio 18.4% 18.6% 20.8% 19.6% 17.3%
NPL Ratio 2.72% 1.92% 1.19% 1.12% 1.17%
Provisions/Average Loans 1.98% 1.41% 0.79% 0.77% 0.87%
LDR 81% 81% 89% 98% 96%
Scroll to view columns right arrow

CreditSight View Comment

AS OF 26 Jun 2025

Mandiri is the biggest bank in Indonesia by assets and is 60% government owned. It has weathered the pandemic relatively well as more than 1/3 of the bank’s loan book consists of large corporates, which is a strength in a volatile market, but it is turning to more balanced growth across segments in FY25. Funding cost pressure from the tight liquidity environment remains a headwind and loan growth will hence be a challenge this year. However, fundamentals remain sound; we like Mandiri because of its more resilient asset quality than peers, strong capital and overall healthy profitability. We expect higher dividend payouts to reduce capital ratios over time but are comfortable with a 14-16% CET1 ratio. We move Mandiri back to M/P from O/P following the sharp tightening in senior spreads.

Recommendation Reviewed: June 26, 2025

Recommendation Changed: June 26, 2025

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