Bank Mandiri Set for Expansion in Vietnam and the Philippines
Jakarta. Bank Mandiri, Indonesia's second-largest lender by assets, is mulling over a plan to acquire banks in the Philippines and Vietnam as part of a regional expansion drive, the bank's president director Kartika Wirjoatmodjo said on Thursday.
The lender has long sought to become a more dominant player in Southeast Asia, rivaling the likes of Singapore's DBS or Malaysia's Maybank and CIMB, but has been facing regulatory and business roadblocks at home.
"We had a plan to expand to those countries, but our nonperforming loan has been high [in the past few years]. We will try again at the end of 2019 or 2020 and look for more opportunities," Kartika said.
Mandiri is likely to make its first Southeast Asian expansion in the Philippines since it has already been vetting two lenders there.
The bank wants its nonperforming loan to stay at 2.5 percent of its total loan this year and go down to at least 2 percent next year. At these levels, Mandiri is confident enough to embark on overseas acquisitions since it will be able to set aside more capital for expansion instead of covering for losses.
Mandiri has set its eyes on a medium-sized bank and a couple of small banks in the Philippines, Kartika said, but has yet to decide to whether it will acquire one or two banks in the end.
"Based on our experience in Malaysia and Singapore, a new bank takes a long time to grow, so we prefer [acquisitions]," Kartika said.
In the Philippines, Mandiri will focus on the retail segment and on growing the consumer segment.
Kartika said Indonesia's Financial Services Authority has been working on implementing the Asean Banking Integration Framework with their Philippine counterparts and has helped a lot to simplify things for banks who want to expand overseas.
Kartika was reluctant to reveal the size of the investment the bank is preparing for its expansion in the Philippines and Vietnam.
"We still haven't decided on the number," he said.