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
160
61. ECONOMIC CONDITIONS continued
In response to these conditions, Bank Mandiri and its subsidiaries have implemented and or continue to implement the following actions:
a. Conduct an Initial Public Offering. b. Implement Enterprise Mandiri Advance System e-MAS.
c. Improve the extent and variety of channels of distribution. d. Improve various product features.
e. Improve soures of funds, including issuing bonds and increasing interest income from reprofiling of
Government recapitalization bonds. f. Restructure non-performing loans.
g. Overcome liquidity risk by rolling over offshore borrowings, increasing retail funding and maintaining major customers by offering competitive interest rates and services.
h. Efficiency improvement measures, as follows: i. Rationalizing the number of employees.
ii. Optimizing office networking and extending retail credits. iii. Redesigning branch operations.
iv. Controlling overhead costs throught improved monitoring mechanisms. v. Designing and effective organizational structure.
i. Improve products and service quality to meet customers’ needs.
j. Improve human resoures quality by developing a leadership training program with INSEAD and by
providing more effective, efficient and timely training delivery e-Learning. The accompanying consolidated financial statements include the effects of the adverse economic
conditions to the extent they can be determined and estimated. It is not possible to determine the future effects a continuation of the adverse economic conditions may have on Bank Mandiri’s and its
Subsidiaries’ liquidity, earnings and realization of their earning assets, including the effects from their customers, creditors, shareholders and other stakeholders. The ultimate effect of these uncertainties
on the stated amounts of assets and liabilities at the balance sheet date cannot presently be determined. Related effects will be reported in the consolidated financial statements as they become
known and can be estimated.
62. GOVERNMENT GUARANTEE OF OBLIGATIONS OF LOCALLY INCORPORATED BANKS
Based on the Decree of the Minister of Finance No. 26KMK.0171998 dated January 28, 1998, which was replaced by the Minister of Finance’s Decree No. 179KMK.0172000 dated May 26, 2000, the
Government of the Republic of Indonesia is guaranteeing certain obligations of locally incorporated banks namely demand deposits, savings, time deposits and deposits on call, bonds, marketable securities,
inter-bank placements, fund borrowings, currency swap and contingent liabilities such as bank guarantees, standby letters of credit and other liabilities, excluding subordinated loans and amounts due
to directors, commissioners and related parties. Based on Joint Decrees of the Directors of Bank Indonesia and Head of IBRA No. 3246KEPDIR and
No. 181BPPN0599 dated May 14, 1999, the guarantee period is automatically extended, unless otherwise i.e. that within six months from the maturity of this guarantee, IBRA decides not to extend its
maturity. In 2001, the joint decrees of the Directors of Bank Indonesia and the Head of IBRA were replaced by BI regulation No. 37PBI2001 and the Decree of the Head of IBRA No. 1035BPPN0401.
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
161
62. GOVERNMENT GUARANTEE OF OBLIGATIONS OF LOCALLY INCORPORATED BANKS continued
