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UPDATE 1-Indonesia's Mandiri H1 profit up 16 pct, flags slowing loans growth
July 24, 2014 / 11:41 AM / 3 years ago

UPDATE 1-Indonesia's Mandiri H1 profit up 16 pct, flags slowing loans growth

2 Min Read

(Adds comment from Mandiri, details from other banks)

JAKARTA, July 24 (Reuters) - PT Bank Mandiri Tbk, Indonesia's biggest lender by assets, reported a rise of 16 percent in first-half net profit, but flagged smaller loan growth this year, particularly in the mining and coal sectors.

Indonesian banks, especially small and medium lenders, are facing tight liquidity and rising competition even as Southeast Asia's largest economy is slowing, largely because of declining commodities prices.

Mandiri expects loans to increase by 15 percent to 17 percent this year, President Director Budi Gunadi Sadikin told reporters on Thursday. The bank posted loan growth of nearly 22 percent in 2013.

"There needs to be more liquidity added here, especially in the banking system, if the Indonesian economy is to grow over 6 percent," Sadikin said.

"The lowest (loan) growth is happening in the mining and coal sectors. It's about 3 percent year-on-year."

Mandiri reported on Thursday net profit of 9.6 trillion rupiah ($830.1 million) for the six months ended June versus 8.3 trillion rupiah a year earlier, boosted by stronger net interest income and fee-based income.

PT Bank Central Asia Tbk, Indonesia's largest bank by market value, expects its loans to grow 8 percent to 10 percent this year, lower than its initial target of 13 percent to 15 percent, President Director Jahja Setiaatmadja told reporters on Wednesday.

PT Bank Rakyat Indonesia Tbk said this month it plans to issue bonds worth 3 trillion rupiah next year to overcome the tight liquidity in the sector. (Reporting by Fathiyah Dahrul and Kanupriya Kapoor; Writing by Eveline Danubrata; Editing by Clarence Fernandez)

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