Jakarta (ANTARA News) - State lender Bank Mandiri saw its net profit plunging by up to 32.1 percent to Rp13.8 trillion in 2016 from Rp20.3 trillion in 2015. The net profit fell, as the bank set aside its operating income to raise its provisions for loan loss coverage, following the rising ratio of non-performing loans (NPLs) to total gross loans, Bank Mandiri President Director Kartika Wirjoatmodjo said in a press briefing here on Tuesday. The provisions for loan loss coverage ratio against NPLs rose to 125 percent, as the ratio of NPLs to total gross loans increased by 1.4 percent to 4 percent in 2016 from 2.6 percent in 2015, he added. "We put much of the income into the provisions. Before we put it in the provisions, our pre-provision operational profit (PPOP) stood at Rp43.3 trillion," he stated. With the NPLs rising 4 percent, Bank Mandiri has set aside Rp24.6 trillion of its funds for loan loss provisions, he noted. After all, the bank recorded positive growth for all of last year, he remarked. In 2016, the bank channeled credits worth Rp662 trillion, up 11.2 percent from a year earlier, while third-party fund placement in the bank reached Rp762.5 trillion, up 12.7 percent from the previous year.(*)
Bank Mandiri, Indonesia's largest bank, has seen its net profit decrease by a dramatic 32.1% YoY. In 2015, the state lender logged a IDR20.3tn ($1.6bn) net profit, but only recorded IDR13.8tn for 2016. The bank's net profit fell as it set aside operating income to raise its provisions for loan loss coverage, according to the lender's President Director Kartika Wirjoatmodjo. This follows the rising ratio of non-performing loans to total gross loans.