PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31, 2006 With Comparative Figures For 2005
Expressed in millions of Rupiah, unless otherwise stated
45
10. DERIVATIVE RECEIVABLES AND PAYABLES
As of December 31, 2006, a summary of derivative transactions is as follows:
Notional Amount Fair Value
Derivative Derivative
Transactions Contract
Note 2k
Receivables Payables
Third parties
Foreign Exchange Related 1. Forward-buy
US Dollar
314,493 308,027
17 6,483
Others 398,874
389,757 4,028
13,145 2. Forward-sell
US Dollar
75,158 74,350
819 11
Others 90,661
91,551 248
1,138 3. Swap-buy
US Dollar
1,179,910 1,173,632
95 6,373
Others 1,069,095
1,080,094 13,319
2,320 4.
Swap - sell US
Dollar 3,446,550
3,054,153 392,467
70 Others
49,967 49,697
296 26
5. Option - buy US Dollar
- 406
406 -
Others -
1,218 1,218
- 6. Option - sell
US Dollar -
408 -
408 Others
- 930
- 930
Interest Rate Related 1. Swap - interest rate
US Dollar
- 62,095
- 62,095
Other -
7,411 -
7,411 2.
Forward Rate Agreement US
Dollar -
2,487 2,074
413 Total
414,987 100,823 Less: Allowance for possible losses
4,260 -
410,727 100,823
Interest Rate Swaps On April 17, 2003 Bank Mandiri entered into interest rate swap agreements with counterparty banks with
nominal values amounting to US125,000,000 full amount and US175,000,000 full amount, respectively. The underlying transaction is the Bank’s US300,000,000 full amount fixed interest rate
Medium-Term Note MTN issued in April 2003 Note 24. Under this transaction, the Bank receives semi- annual fixed interest at the rate of 7.00 per annum and pays semi-annual floating interest at the rate of
six-month Libor + 3.37 per annum until the maturity of the Note on April 22, 2008. The six-month Libor interest is stated in arrears. These transactions qualify as hedging for accounting purposes.
The background and purpose of the issuance of the hedging instruments are related to interest rate risk management, whereby the Bank’s positive foreign currency interest rate gap position is exposed to
downward trends in interest rates in the following five years. The Bank decided to convert its MTN’s fixed interest rate into floating interest rates in order to mitigate the risks of a decrease in net interest margin. As
of December 31, 2006 and 2005, losses amounting to Rp51,512 and Rp86,039 as a result of the hedging fair value calculation have been offset against the gain from decrease of the MTNs, a hedged item,
based on the fair value calculation Note 24.
PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Year Ended December 31, 2006 With Comparative Figures For 2005
Expressed in millions of Rupiah, unless otherwise stated
46
10. DERIVATIVE RECEIVABLES AND PAYABLES continued
