Local Branch Network We continued to expand the branch network, opening fifty Operations The branches function as our primary Point of Service and

In order to enhance service quality, Bank Mandiri has received ISO 9001–2000 certification in: • Incomingoutgoing transfer, RTGS, transfer investigations, tele-transmission and other services. • Clearing Processing in Jakarta City Operations JCO. • Provision of Security Services in Bank Mandiri Head Office. • Document Management files and expedition. 2004 Performance The strategies adopted by the Distribution Network Directorate in 2004 had positive impact on the growth of Bank Mandiri’s businesses. Management targets achieved include the following:

1. Local Branch Network We continued to expand the branch network, opening fifty

new offices consisting of nineteen sub-branches and thirty- one cash outlets. We also set up an additional nineteen service delivery points consisting of nine mobile cash outlets and ten payment points. Existing branches were optimized through the upgrading of eighteen branches nine cash outlets, three mobile cash outlets and one payment point were elevated to supporting branches; two mobile cash outlets and three payment points were converted to cash outlets and downgrading two branch offices to sub-branches. In addition, six new outlets for Priority Banking were opened. For ex-Jakarta regions, we also developed twenty-three new community branches. Outlet 2002 2003 2004 Branch 241 129 127 Supporting Branch Office 247 382 416 Cash Outlets 196 219 246 Total 687 730 789 By end of December 2004, Bank Mandiri’s branch network comprised a total of 789 outlets. In addition, the Bank maintained 84 mobile cash outlets and 228 payment points.

2. Operations The branches function as our primary Point of Service and

Sales. Following from the centralization of all processing functions at the City Operations level—including trade services processing—each outlet has been enabled to provide services to all customers corporate, commercial, and consumer. The centralization of trade services LC processing export, import and SKBDN in eleven Bill Processing Centers BPCs has been followed by the implementation of Straight-Through Processing STP for Trade Services and Bank Guarantees. This system of centralized administration supports more accurate reporting and facilitates more comprehensive risk management. In addition to the trade services systems, in 2004 Bank Mandiri implemented a new treasury transaction system named OPICS which can support dealing, settlement and treasury transaction analysis using STP in order to accelerate verification, authorization, risk analysis and liquidity analysis. We implemented STP and arranged for exceptional collaboration with several Correspondent Banks to accelerate incomingoutgoing payments. As a result, we can execute all foreign exchange incoming transfers within certain nominal values and unlimited nominal amounts for US dollars only from several banks to our customers on the same day. To support this approach, we introduced a ”Service Excellence” program with the objective to motivate our staff to deliver consistently excellent service to customers, build a new service culture within Bank Mandiri and monitor service quality at the branch level in collaboration with an independent third party. Through this program, the Bank was awarded third place in the Customer Service Championship by the State Ministry for State-Owned Enterprises MSOE during National Customer Day in 2004. In order to maintain our service quality, in December 2004 Bank Mandiri was awarded the ISO 9001-2000 certification for Quality Management in Domestic and International Payment including IncomingOutgoing Transfer, Real Time Gross Settlement RTGS, Transfer Investigation, Tele-transmission Distribution Networks, Operations Subsidiaries 69 and Other Services and Clearing Processing in Jakarta City Operation JCO. In order to sustain our operations for the above services, Bank Mandiri has set up a Disaster Recovery Center DRC to provide operational backup in the event of a disaster at the head offices. During 2004, we continued to improve our operational backup system to ensure business continuity in the case of a disaster.

3. Procurement and Fixed Assets