The increase in net income was sustained by a net interest income of Rp40.5 trillion in September, up 4.2 percent (yoy) and commission-based revenue, which reached Rp18.75 trillion, up 11.4 percent (yoy), said Bank Mandiri Deputy Managing Director Sulaiman Arif Arianto in Jakarta at a press conference on Wednesday.
But the company must "sacrifice" the Net Interest Margin (NIM), which fell from 5.86 percent to 5.76 percent.
On the other hand, Sulaiman said revenue was boosted because it helped reduce the ratio of non-performing loans (Non-Performing Loans), which fell 74 basis points to 3.01 percent.
"The decline in the NPL ratio was primarily driven by the company`s policy of continuing restructuring, in addition to closely monitoring the potential of the debtor`s business, so that it could help debtors fulfill their obligations," said Sulaiman.
With the decline in NPLs, Bank Mandiri also recorded a decrease in provisioning costs due to non-performing loans of 10.3 percent.
The increase in Bank Mandiri`s revenue came from lending, which grew 13.8 percent to Rp781 trillion, with details of 77.5 percent being productive loans and 22.5 percent being consumer loans.
Even though the credit was quite aggressive, Mandiri noted the slackening growth of Third Party Funds (TPF). Mandiri`s third party funds until the third quarter of 2018 grew 9.2 percent to Rp831.2 trillion.
The portion of low-cost funds (savings and demand deposits) reached 64.46 percent of the total deposits, the rest are expensive funds or deposits.
With these loans and deposits, Bank Mandiri`s total assets as of September collected Rp1.173 trillion, up 8.8 percent from the same period the previous year. Net Interest Margin (NIM) of Mandiri fell from 5.86 percent to 5.76 percent.
Reporting by Indra Arief Pribadi
Editing by Andi Abdussalam