Mandiri Sees Faster Loan Growth as Tax Amnesty Boosts Liquidity
Jakarta. Bank Mandiri, Indonesia's largest lender by assets, is confident that proceeds from the government's flagship tax amnesty program will help it exceed its loan target this year.
Mandiri now expects loan growth to match last year's pace of between 12 percent and 12.5 percent, up from its previous target of 11 percent, corporate secretary Rohan Hafas said on Friday (23/09).
The lender cut the target by 2 percentage point earlier this year over concerns that low liquidity and a weak economy would hamper its ability expand loan disbursement.
Mandiri saw Rp 5.8 trillion ($444 million) in repatriated funds and penalty fees under the tax amnesty program enter its balance sheet in September alone, further easing its liquidity concerns after it managed to raise Rp 5 trillion from a bond issuance in August.
"[The loans] can increase, although not significantly," Rohan said, as quoted by Antaranews.com.
Rohan said the lender's corporate loans – which amounted to more than Rp 300 billion – can grow by as much as 20 percent by the end of this year from a year ago, driven by demand for loans in the infrastructure sector.
The lender has committed Rp 92 trillion in loans for infrastructure construction in the archipelago in the first eight months of this year, up 40 percent from a year ago, he said. He added that Rp 49.4 trillion of the commitment has already been disbursed.
Mandiri's consumer loans are also poised for double-digit growth, Rohan said, but the lender's commercial loans, which are allocated to small and medium business, would only expand by 6 percent this year.
"We are holding back a bit on commercial loans, because this segment is still slowing down," Rohan said. He added that the segment also contributed most of the lender's bad loans in the first half of this year.
The central bank expects total loan growth of between 7 percent and 9 percent, slowing from 10 percent last year, as growing levels of bad debt could force lenders to be more careful in disbursing loans, Bank Indonesia Governor Agus Martowardojo said.
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