Indonesia's Bank Mandiri to open remittance unit in Malaysia

JAKARTA, Sept 11 Thu Sep 10, 2009 9:07pm EDT

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JAKARTA, Sept 11 (Reuters) - Indonesia's Bank Mandiri (BMRI.JK) will open a new branch in Kuala Lumpur dedicated to collecting remittances from the millions of Indonesians working in Malaysia, a senior executive said late on Thursday.

Thomas Arifin, Director for International Banking, said the new branch would help Mandiri, Indonesia's biggest bank, increase its fee-based income.

"The bank will initially cover millions of Indonesian workers who are working in Malaysia by progressively extending the number of outlets," Arifin said in a text message sent to Reuters.

Indonesians working abroad, mainly Malaysia, Singapore and the Middle East, sent home about $8.2 billion in remittances in 2008, according to the state agency in charge of migrant workers.

However, remittances are expected to drop as much as 10 percent this year as firms lay off workers because of tougher economic conditions.

Shares in Bank Mandiri gained 3.4 percent on Thursday, outperforming the broader market .JKSE which rose 1.2 percent. (Reporting by Tyagita Silka; Editing by Sara Webb)

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