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Mandiri reaps Rp 2.6 trillion from issuance of NCDs
State lender Bank Mandiri has reaped Rp 2.6 trillion (US$197.18 million) worth of fresh funds from the issuance of negotiable certificates of deposit (NCDs) in the local capital market, data from the Indonesian Central Securities Depository (KSEI) shows.
According to the data, Mandiri has issued five series of NCDs, with maturity periods ranging from six to 18 months. The A series will mature after six months, carry an 8 percent discount rate and generate Rp 848 billion in funds.
The B series will mature after nine months, offer an 8.1 percent rate and generate Rp 440 billion. The C series will be due after 367 days, carry an 8.5 percent rate and generate Rp 987 billion, the largest amount of funds of all the series.
Meanwhile, the D series will mature within the next 15 months, carry an 8.65 percent rate and its issuance will result in Rp 175 billion-worth of funds.
The last series, E, offers the highest rate at 8.75 percent, will mature after 18 months and generate Rp 150 billion.
It was Mandiri’s first NCD issuance this year and all series were jointly arranged by PT Mandiri Sekuritas and PT BCA Sekuritas.
Mandiri treasury and markets director Pahala N. Mansury previously said the NCD issuance was part of the bank’s effort to raise between Rp 8 trillion and Rp 10 trillion of fresh funds from the capital market.
“We have stated that within our RBB [banking business plan] for 2015, our focus is on gathering rupiah-denominated funds to secure liquidity, including from NCDs,” he said.
Mandiri’s liquidity — reflected by a loan-to-deposit ratio (LDR) measurement — stood at 83.8 percent by the end of the first quarter. It expects to maintain the ratio within the 85-90 percent range throughout the year.
Pahala said the decision to enter the capital market was also part of Mandiri’s attempt to diversify its funding sources, which were dominated by short-term deposits.
After the NCD issuance is completed, the publicly listed Mandiri will look to the issuance of other instruments, such as mortgage-backed securities (KIK-EBA) and bonds.
It initially targeted to generate Rp 1 trillion from KIK-EBA in the first half of this year, but pushed the plan to the second half of the year as it made the NCD its first priority.
Meanwhile, prior to Mandiri’s NCD issuance, state-owned lender Bank Rakyat Indonesia (BRI) raised around Rp 1.88 trillion from its second NCD issuance. It carried out the first issuance in 2014, when it booked Rp 790 billion.
“We will do this regularly. Next year, we hope to raise around Rp 2 trillion in funds from the NCD,” BRI finance director Haru Koesmahargyo said, adding that the issuance was expected to intensify BRI’s presence in the capital market.
Mandiri’s consolidated net profit in the first quarter this year rose by 4.3 percent to Rp 5.14 trillion year on year.
The figure was far lower than the annual growth rate, which reached 14.4 percent in the first quarter of 2014.
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