SECURITIES continued GOVERNMENT RECAPITALIZATION BONDS GOVERNMENT RECAPITALIZATION BONDS continued

PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Six Months Ended June 30, 2006 Unaudited and 2005 Audited Expressed in millions of Rupiah, unless otherwise stated 37

6. SECURITIES continued

g. Movements of Allowance for Possible Losses on Securities: 2006 2005 Balance at beginning of period 1,209,034 1,144,502 Provisionreversal during the period Note 37 44,733 98,547 Recoveries - 3,000 Others 31,739 26,286 Balance at end of period 1,132,562 1,219,763 Includes effect of foreign exchange translation. Management believes that the allowance for possible losses on securities is adequate.

7. GOVERNMENT RECAPITALIZATION BONDS

Government Recapitalization Bonds consist of bonds issued by the Government in connection with its Recapitalization Program, acquired from primary and secondary markets with details as follows: 2006 2005 Trading, fair value 2,340,011 2,435,779 Available for sale, fair value 28,903,515 29,005,706 Held to maturity, at cost 61,094,598 61,094,598 92,338,124 92,536,083 Based on maturities, the Government Recapitalization Bonds are as follows: 2006 2005 Trading: Less than 1 year 1,487,297 1,898 1 - 5 years 258,908 1,634,013 5 - 10 years 593,806 799,868 2,340,011 2,435,779 PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Six Months Ended June 30, 2006 Unaudited and 2005 Audited Expressed in millions of Rupiah, unless otherwise stated 38

7. GOVERNMENT RECAPITALIZATION BONDS continued

Based on maturities, the Government Recapitalization Bonds are as follows: continued 2006 2005 Available for sale: 1 - 5 years 1,472,643 1,395,013 5 - 10 years 14,296,628 12,044,046 Over 10 years 13,134,244 15,566,647 28,903,515 29,005,706 Held to maturity: 1 - 5 years 1,350,000 1,350,000 5 - 10 years 8,302,832 1,505,329 Over 10 years 51,441,766 58,239,269 61,094,598 61,094,598 92,338,124 92,536,083 The details of Government Recapitalization Bonds are as follows: 2006 Trading Interest Rates Maturity Frequency of Nominal per Annum Fair Value Dates Interest Payment Fixed rate bonds 584,106 12.25- 629,744 07152007- 6 months 14.28 12152013 Variable rate bonds 1,711,361 3-month SBI 1,710,237 10252006- 3 months 06252011 2,295,467 2,340,011 Available for sale Interest Rates Maturity Frequency of Nominal Per Annum Fair Value Dates Interest Payment Fixed rate bonds 1,797,659 13.15- 1,928,189 06152009- 6 months 15.58 12152013 Variable rate bonds 21,660,085 3-month SBI 26,975,326 09252007- 3 months 07252020 23,457,744 28,903,515 PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Six Months Ended June 30, 2006 Unaudited and 2005 Audited Expressed in millions of Rupiah, unless otherwise stated 39

7. GOVERNMENT RECAPITALIZATION BONDS continued