Bank Mandiri 2012 Net Income Gains 27% as Micro Financing Jumps

PT Bank Mandiri, Indonesia’s biggest bank by assets, said 2012 net income rose 27 percent from a year earlier spurred by micro-finance lending.

Net income increased to 15.5 trillion rupiah ($1.6 billion) from 12.2 trillion rupiah in 2011, exceeding the 14.7 trillion rupiah median estimate of 27 analysts in a Bloomberg News survey. Lending gained 23.7 percent to 388.8 trillion rupiah with micro financing posting the highest growth, the bank said in a statement distributed to reporters in Jakarta today.

“Mandiri can’t rely only on corporate loans, they have to play in the micro and consumer sectors,” Syaiful Adrian, a bank analyst at PT Ciptadana Securities, said by telephone in Jakarta today before the earnings announcement. “The micro financing market isn’t saturated at all, the cake is big enough for all.”

Boosting micro financing will enable Jakarta-based Mandiri to tap into rising domestic consumption in the world’s fourth-most populous nation. Southeast Asia’s biggest economy expanded 6.11 percent in the three months through December, holding above a 6 percent pace for nine quarters. PT Bank Rakyat Indonesia, the third-largest lender by assets, reported earnings on Jan. 31 that beat analysts’ estimates as it focused on micro lending.

Private spending accounted for 55 percent of Indonesia’s economy in the fourth quarter, government data show. The central bank has kept its benchmark interest rate at a record low of 5.75 percent over the past year, encouraging consumers to spend. Indonesia’s domestic auto sales rose 23 percent to 1.1 million units last year, PT Astra International, the nation’s largest auto retailer, said Jan. 14. In 2009, Mandiri bought 51 percent of automotive financing company PT Tunas Financindo Sarana, the former unit of auto retailer PT Tunas Ridean.

Mandiri’s lending in the micro financing segment jumped 62 percent in 2012 with the number of its micro financing customers rising to 315,400 from 189,000 in 2011, the bank said today.