ASEAN KEY DESTINATIONS
Mandiri to draw down US$880 million from CDB loan
State-owned lender Bank Mandiri is in the process of drawing down a portion of its loan commitment from the China Development Bank (CDB) that will be disbursed to infrastructure projects in Indonesia.
Mandiri corporate secretary Rohan Hafas said the bank had submitted a proposal to draw down at least US$880 million of the total $1 billion commited to the Indonesian bank by the CDB earlier this year.
“We have a number of infrastructure projects in our pipeline [to make use of] that amount and some of our debtors have already proposed credit disbursements. We have applied to the CDB to act on that,” he told reporters on Friday.
Rohan said the eventual disbursement of the total loan would depend on the progress of the projects, which would be contingent on the situation on the ground.
In September, Mandiri, along with state-owned lenders Bank Rakyat Indonesia (BRI) and Bank Negara Indonesia (BNI) secured loan commitments totaling $3 billion from the CDB to finance infrastructure development in Indonesia.
The loan agreement was signed in Beijing, China, by the president directors of the three banks and CDB vice chairman Zheng Zhijie, witnessed by State-Owned Enterprises Minister Rini Soemarno and the chair of the Chinese National Development and Reform Committee, Xu Shaoshi.
The agreement allows the three banks to obtain $1 billion each over a 10 year tenure, with 30 percent of the drawdown amount being in Chinese yuan and required to be spent on finance infrastructure projects and trade, especially between the two countries.
Mandiri president director Budi Gunadi Sadikin said the allocation of Mandiri’s CDB loans would be fully toward new infrastructure projects, including in the oil and gas sector.
Budi said the bank had seen rising loan disbursements from its debtors lately, with most of them going to infrastructure projects as well as working capital.
“We predict that our loan growth will stand at about 13 percent by the end of this year, as we expected,” Budi said.
This prediction for loan growth by the end of 2015 is higher than Mandiri’s 10.7 percent lending increase, to Rp 560.6 trillion ($40.27 billion) as of September, which was not enough to drive up earnings amid a 126.4 percent surge in net provisions for loan losses, taking them to Rp 8.49 trillion by the end September.
Mandiri, which is the country’s largest lender by assets, reported that its net profit grew by 0.9 percent year-on-year (yoy) as of September to Rp 14.58 trillion.
Next year, Rohan said the bank would continue to focus on channeling its loans to infrastructure projects as then prospects for the country’s economic growth would be better, adding that “many infrastructure projects that were commenced last year have started to show progress”.
Rohan said the bank expected that the bureaucratic process, such as tenders and procurement, would be completed early next year, so loan demands would start to emerge immediately.
However, Rohan said the bank would also maintain its cautious approach to some sectors as global and domestic challenges linger in the economy.
“We have set a loan growth target of around 15 percent to 17 percent next year,” Rohan said.
Also on Friday, the bank’s extraordinary shareholders meeting approved the appointment of Wimboh Santoso as its new president commissioner replacing Darmin Nasution, who was appointed by the President as coordinating economic minister. -
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