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UPDATE 1-Indonesia's Bank Mandiri posts lowest annual profit in 5 years on provisions
February 14, 2017 / 10:08 AM / 7 months ago

UPDATE 1-Indonesia's Bank Mandiri posts lowest annual profit in 5 years on provisions

* 2016 profit 13.8 trln rupiah vs 20.3 trln a year ago

* Provisions more than double to 24.6 trln rupiah

* Gross NPL at 4.0 pct, highest since 2008 (Adds comment from CEO, details)

By Cindy Silviana and Eveline Danubrata

JAKARTA, Feb 14 (Reuters) - Indonesia’s biggest bank by assets, PT Bank Mandiri Tbk, posted on Tuesday a 32 percent drop in its 2016 net profit to the lowest in five years mainly due to an increase in provisions for bad loans.

State-controlled Mandiri delivered a net profit of 13.8 trillion rupiah ($1.04 billion) for the full year ended Dec. 31, versus 20.3 trillion rupiah a year earlier. That was the weakest figure since 2011, according to Thomson Reuters data.

Mandiri’s net profit also came below an average estimate of 15.7 trillion rupiah by 20 analysts.

The bank’s provisions at the end of 2016 stood at 24.6 trillion rupiah, more than double the 12.0 trillion rupiah a year earlier. Gross non-performing loans (NPL) stood at 4.0 percent, the highest since 2008, Thomson Reuters data showed.

The rise in NPL started in the commodities sector but has spread to the consumer-related businesses, Mandiri CEO Kartika Wirjoatmodjo told reporters.

“We see that 2017 will still be challenging. The weakness is not fully over, although the cash flow of our customers is more stable,” Wirjoatmodjo said.

Mandiri’s earnings this year are expected to be supported by an improving economy and higher commodity prices, the CEO added. ($1 = 13,325.00 rupiah) (Reporting by Cindy Silviana; Additional reporting by Gaurav Dogra in Bengaluru, writing by Eveline Danubrata; Editing by Himani Sarkar)

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