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UPDATE 1-Indonesia Mandiri optimistic on 22 pct loan growth

Thu May 29, 2008 1:57pm IST
 
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JAKARTA, May 29 (Reuters) - Indonesia's largest lender, PT Bank Mandiri Tbk (BMRI.JK: Quote, Profile, Research), said on Thursday it was optimistic it will achieve 22 percent loan growth in 2008, despite higher inflation and rates, thanks to a strong natural resources sector.

Some analysts expect loan growth in the country's banking sector to slow down this year as higher inflation is expected to push up interest rates, after the government raised subsidised fuel prices by around 30 percent last week.

"Generally, Indonesia's economy will face high inflation, between 11-12 percent due to an increase in fuel prices. We are also anticipating higher interest rates," Agus Martowardojo, Mandiri's president director, told reporters.

"However, our natural resources sector is good. So, we are optimistic that we can achieve the 22 percent loan growth target."

Last year, the state-owned bank's loans grew 17.7 percent to 138.5 trillion rupiah ($14.90 billion), slower than the overall industry's loan growth of 25.5 percent in 2007.

The central bank expects the country's banking sector, which has total assets of around $200 billion, to grow around 20 percent this year.

Indonesia is home to some of the world's major mines and is a key producer of major commodities such as palm oil, rubber, tin and coal.

The country's natural resources sector has been reaping the benefit of high commodity prices and shares of mining and agriculture companies have performed strongly this year despite a weak stock market.

The Indonesia composite index .JKSE has fallen by more than 11 percent so far this year but the agriculture sub-index and mining sub index have risen by 7 percent and 3.5 percent respectively. ($1 = 9,325 rupiah) (Reporting by Nury Sybli, writing by Harry Suhartono, editing by Sugita Katyal)

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