Foreign Currency New Branding as Visual Sign of the Transformation Process

AVERAGE BASE LENDING RATE INTEREST INCOME FROM GOVERNMENT BONDS BASE LENDING RATE RUPIAH BASE LENDING RATE VALUTA ASING COMPOSITION OF INTEREST INCOME FROM GOVERNMENT BONDS FOR YEAR 2006 AND 2007 COMPOSITION OF INTEREST INCOME FROM GOVERNMENT BONDS FOR YEAR 2006 AND 2007 Interest yields on foreign currency loans increased in 2007 to 7.1, compared to 4.7 in 2006, while yields declined for Rupiah denominated loans from 13.0 to 12.3, even as the one-month SBI rate dropped considerably, to 8 by the end 2007 from 9.75 a year earlier. The average volume of Rupiah and foreign currency increased concurrently. The average volume of Rupiah loans increased from Rp69,968 billion to Rp73,617 billion, while the average volume of foreign currency loans increased from Rp29,970 billion to Rp35,097 billion. Our average Base Lending Rates for both Rupiah and foreign currency loans were lower at the end of 2007 across all segments from the equivalent rates in 2006. Interest income from Government Bonds decreased by 31.6 from Rp10,841 billion in 2006 to Rp7,418 billion in 2007, resulting from the drop in the 3-month SBI rate which serves as the benchmark for our variable-rate bonds. The composition of our Government Bond portfolio at the end of 2007 comprised 3.1 fixed-rate bonds and 96.9 variable-rate bonds. The yield from our Government Bond portfolio decrease from 11.8 in 2006 to 7.8 in 2007. At the same time, our average portfolio of Government Bonds fell slightly, from Rp91,591 billion in 2006 to Rp90,202 billion in 2007. Interest rates for the fixed-rate bond portfolio ranged from 9.00 - 15.58, while our variable-rate bonds pay the 3-month SBI rate. Interest income derived from Government Bonds as a percentage of total interest income declined from 41.3 in 2006 to 31.0 in 2007. Interest income from loans accounted for 52.8 of total interest income for 2007, an increase from 43.1 in 2006 At year end, roughly 6.4 of Rupiah loans were non-performing, while the comparable figure for foreign currency loans stood at 14.5. Interest received from loans classified as category 4 doubtful or 5 loss must be booked as principal repayment rather than interest income. Segment 2006 2007 Corporate 12.49 8.99 Commercial 13.35 9.96 Small 14.28 10.65 Micro 19.51 18.44 Consumer 14.51 11.10 Segment 2006 2007 Corporate 6.23 5.78 Commercial 6.48 6.02 Small 6.96 6.59 Portfolio 2006 2007 Trading 176 73 Available 3,221 2,175 Held to Maturity 7,444 5,170 Total 10,841 7,418 Interest Rate 2006 2007 Fixed-Rate 497 324 Variable-Rate 10,344 7,094 Total 10,841 7,418 Rp Billion 42 2007 Annual Report PT Bank Mandiri Tbk. Rp Billion Management’s Discussion and Analysis of Financial Statements and Operating Results