INTEREST EXPENSE 2004 06 Full Audited Financial Statements w Notes

PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS June 30, 2004 and 2003, and April 30, 2003 Expressed in millions of Rupiah, unless otherwise stated 123

37. INTEREST EXPENSE

This account represents interest expense incurred on the following: For the 6-month For the 6-month For the 2-month For the 4-month period ended period ended period ended period ended June 30, 2004 June 30, 2003 June 30, 2003 April 30, 2003 Time deposits 2,759,166 7,718,370 2,408,869 5,309,501 Saving deposits 1,001,838 1,310,068 431,767 878,301 Demand deposits 555,850 670,390 220,468 449,922 Fund borrowings 184,724 305,343 92,922 212,421 Securities issued 163,717 71,026 45,289 25,737 Subordinated loans 165,974 198,982 63,586 135,396 Loan capital 16,280 14,703 4,460 10,243 Others 44,529 67,577 9,511 58,066 4,892,078 10,356,459 3,276,872 7,079,587 Included in interest expense from time and savings deposits is syariah expense for the six-month period ended June 30, 2004, two-month period ended June 30, 2003, and for the four-month period ended April 30, 2003 amounting to Rp113,468, Rp22,641 and Rp39,492, respectively. 38. OTHER FINANCING EXPENSES Other financing expenses amounting to Rp39,914, Rp18,201 and Rp31,335 for the six-month period ended June 30, 2004, two-month period ended June 30, 2003, and the four-month period ended April 30, 2003, respectively, comprised mainly of gifts and prizes for maintaining the Bank’s depositors. 39. PROVISIONREVERSAL OF ALLOWANCE FOR POSSIBLE LOSSES ON EARNING ASSETS This account consists of the following: For the 6-month For the 6-month For the 2-month For the 4-month period ended period ended period ended period ended June 30, 2004 June 30, 2003 June 30, 2003 April 30, 2003 Provisionreversal of allowance for possible losses on: Current accounts with other banks Note 6e 1,429 4,372 4,265 107 Placements with other banks Note 7g 8,985 16,475 6,436 22,911 Securities Note 8h 30,714 8,203 2,953 5,250 Trade documents and other facilities Note 10d 1,823 151,520 109,201 42,319 Derivative receivables Note 12 5,000 8,251 7,679 572 Loans Note 13B.j 80,307 753,371 150,092 603,279 Acceptances receivable Note 14d 18,074 45,391 25,139 20,252 Investments in shares of stock Note 15c 6,540 30,336 4,861 35,197 106,724 563,425 29,074 534,351 PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS June 30, 2004 and 2003, and April 30, 2003 Expressed in millions of Rupiah, unless otherwise stated 124

40. GAINSLOSSES FROM INCREASEDECREASE IN VALUE OF SECURITIES AND GOVERN- MENT RECAPITALIZATION BONDS