Bank Mandiri Tbk (BMRI)’s net profit at the end of this year is estimated to be lower than last year’s net profit of 20.33 trillion IDR. This is due to the increase in provision by 63% to 17 trillion to 18 trillion IDR in anticipation of the 3.8% gross non-performing loan (NPL) by June 2016. However, CIMB Securities recommended Buy with a target price of Rp 10,900, taking the deterioration of asset quality into account.
Kartika Wirjoatmodjo, President Director of Bank Mandiri, said gross NPL in the third quarter will be down by restructuring efforts, provisioning and write off a number of NPL. “The write-off value is estimated to be 7.5 trillion IDR, just like last year,” says Kartika. BMRI’s performance will revive again in 2017 after a number of asset quality improvements.
Patricia Sumampouw, an analyst at CIMB Securities, said BMRI’s net profit in the first half of 2016 fell by 28.7% to Rp 7.1 trillion, reflecting 34% -36% of the company’s projected 2016 net income. The increase in provision in the first half, of 147% yoy, also caused the cost of fund to increase by 3.4% in June 2016 compared to the 1.6% of June 2015. (*)
Add Comment