Annual Report
2013
PT Bank Mandiri Persero Tbk.
institutional banking
5. The greater part of these loans went to the electricity, gas and water, processing and inancial services sectors. In 2013, the Directorate of Institutional Banking successfully captured a number major transactions related to
the inancing of strategic areas of the economy, such as airport and seaport infrastructure, with the value of inancing commitments being respectively Rp 2.4 trillion and Rp 1, 5 trillion.
6. As regards non-interest income, Fee-Based Income at the Directorate of Institutional Banking reached Rp 153 billion. This achievement was supported by the Bank’s wholesale transaction strategy and was dominated by the
contribution from Bank Guarantee, Trade Finance and Managed Loan products.
In 2013, the Directorate of Institutional Banking successfully executed a number of projects focused on channeling state budget funds, government assistance, especially in the education sector, the and oil gas industries, namely:
1. State Treasury Budget System SPAN
State budget realization spending, particularly in respect of personnel expenditure, capital expenditure and procurement expenditure – total state budget funds channeled through Bank Mandiri until the end of
December 2013 amounted to Rp 274.4 trillion, meaning that 43.5 of state budget spending a total of Rp 568.9 trillion was channeled through Bank Mandiri in 2013.
2. Education sector projects, namely:
-
State University Combined Student Selection Process SBMPTN
The Directorate of Institutional Banking successfully continued the tradition of Bank Mandiri acting as the sole partner bank for the SBMPTN process over 6 consecutive years 2008-2013 by providing cash
management solutions to state higher education institutes..
-
State Islamic University Student Selection Process SNCA-PTAIN
The SNCA-PTAIN is a national selection process carried out in an integrated manner by all UIN IAIN STAIN throughout Indonesia under the coordination of the Directorate General of Islamic Education at the Ministry
of Religious Afairs.
-
Distribution ‘Bidik Misi’
In 2013, Bank Mandiri was the sole bank selected to channel ‘Bidik Misi’ assistance funds to students.
-
Teachers’ Allowances
This refers to allowances paid by the Government Ministry of National Education to teachers on a quarterly semiannual basis, depending on the type of allowance. The Directorate of Institutional Banking played a
key role in ensuring that the allowances were channeled through Bank Mandiri.
3. Temporary Direct Social Assistance BLSM
Bank Mandiri was entrusted with the job of channeling BLSM to target households so as to compensate for the increase in fuel prices in 2013. In doing so, the Bank collaborated with PT Pos. The total value of BLSM funds that
were channeled through Bank Mandiri amounted to Rp 9.3 Trillion.
4. Oil Gas Sector
Bank Mandiri facilitated goods and services procurement transactions by Production Sharing Contractors K3S, and managed Abandonment and Site Restoration ASR funds. Up to the end of September 2013, Bank Mandiri
managed Giro ASR funds for 14 working areas worth a total of Rp 14.12 trillion.
To complement the portfolio of products ofered as part of the one-stop inancial services concept, the Directorate of Institutional Banking also oversees the Mandiri Financial Institution Pension Fund Mandiri DPLK, which
provides deined contribution pension plans for both Bank Mandiri staf and employees. Mandiri DPLK features ive 5 investment packages with 8 eight investment choices, namely, Money Market Investments, Fixed Income
Investments, Equity Investments with a choice of Stocks – Money Market Investments and Stocks-Fixed Income Investments, Combination Investments with a choice of Combination 1 or 2, and Shariah Investments with a
Annual Report
2013
PT Bank Mandiri Persero Tbk.
choice of Shariah-Money Market Investments or Shariah-Fixed Income Investments. As of the end of 2013 Mandiri DPLK had a total of 20,993 customers and a total of Rp 209.9 billion under management.
STRATEGIES AND PLANS FOR 2014
To support the smooth operation of the Directorate of Institutional Banking’s business processes, business development in 2014 will be focused on the following:
1.
Increasing Funds and Boosting Fee-Based Income
Growth in funds will be achieved from two 2 sources. First, organic growth based on the GDP growth assumption for 2014. This will involve a strategy of strengthening relationships, as well as competitive pricing
and participation in tenders.
Second, Initiative Transactional growth, that is, boosting funds from wholesale transaction banking through
the implementation of strategies for improving the transactional side through wholesale transaction banking involving major customers. Wholesale Transaction Banking will be supported by innovatitive approaches,
including the development of new products and new processes so as to secure new customers and new business.
2.
Maintaining Credit Quality
Credit growth will be focused on three 3 issues. First, maintaining credit quality so that the NPL ratio is maintained at 0. This will involve the following strategies:
a. Selecting customers client projects and preparing Credit Analysis Notes based on prudential principles
having regard to the customer’s inancial situation. b. Monitoring borrowers using the Wallet Tool Watch List and Collectibility Review regularly every 3 months
and on an incidental basis on-the-spot reviews. c. Maintaining good relationships with borrowers so that their inancial situations can be properly monitored.
Second, focusing on the provision of facilities to selected sectors that generate value chain business that can generate funds through transactions, and Third, improving the value chains of anchor clients.
3.
Support for Government Schemes
The Directorate of Institutional Banking will continue to encourage the implementation of government schemes in 2014, including the BPJS Kesehatan and Ketenagakerjaan scheme, and to channel assistance under
Government subsidy schemes in collaboration with PT POS. In addition, Bank Mandiri will continue to support programs in the education sector and the SPAN scheme.
4.
Employee and Leadership Development
In addition to growting the business through the implementation of strategic initiatives, it is also very important to build the organization’s capacity to produce the best talent. This is done through a variety of Human Capital
Development programs. In 2013, Human Capital Development focused on enhancing leadership, engagement and productivity.
institutional banking
Annual Report
2013
PT Bank Mandiri Persero Tbk.
corporate banking
In the midst of uncertain global economic conditions, the Corporate Banking business continued to see strong growth. In line with Bank Mandiri’s business development, in April 2013 we conducted a rebalancing and
realignment so as to improve customer management. The realignment was carried out based on a remapping of Ministry, State Institution and State Enterprise customers so as to make the preparation and execution of business
strategies more focused and comprehensive in nature.
To permit accurate comparisons, we have taken April 2013 as the basis for assessing growth in the Corporate Banking segment. Various Corporate Banking key performance indicators up to end December 2013 indicate good
results, including growth in low-cost funds of 39.8 to Rp 37.58 trillion, Fee-Based Income of Rp 923 billion, credit growth of 19.9 to Rp 138.78 trillion, and a Margin Contribution of Rp 4.95 trillion. Our achievements in 2013 may
be summarized as follows:
a. Business Operations
The Corporate Banking Directorate engages in three main business activities: collecting funds, extending credit and generating fee-based income. In carrying out its business operations, the Directorate of Corporate Banking
focuses on wholesale transaction banking by providing solutions that are capable of enhancing customer transactions. As regards the collection of funds, the Directorate of Corporate Banking successfully collected Rp
74.1 trillion, an increase of 19.7 compared to April 2013, when the equivalent igure was Rp 61.8 trillion. The said funds consisted of low-cost funds checking and savings amounting to Rp 37.6 trillion and time deposits
of Rp 36.5 trillion. Meanwhile, lending by the Directorate of Corporate Banking amounted to Rp 138.78 trillion, while the NPL ratio was maintained at 1.36. The Directorate of Corporate Banking also generated Rp 923
billion in fee-based income, consisting of trade inance fees of Rp 325 billion, bank guarantee fees of Rp 155 billion, syndicated loan fees of Rp130 billion and administration fees of Rp 313 billion.
b. Revenue
Corporate Banking’s main source of revenue is from its assets spread, which total revenue from this source amounting to Rp 3,389 billion, which accounted for 64 of the total revenue generated by Corporate Banking
Rp 5,295 billion. Revenue from the liabilities spread and fee-based income totaled Rp 1,906 billion. Through Bank Mandiri’s wholesale transaction banking strategy, it is expected that the revenue contribution derived
from the asset spread will decline, while that from the liabilities spread and fee-based income will increase.
“The Directorate of Corporate Banking, which is responsible for managing the corporate sector, successfully recorded a margin
contribution of Rp 4.95 trillion, which was generated by 5 groups at Head Oice and the 3 overseas oices that are managed by the
Directorate of Corporate Banking, namely, Singapore, Hong Kong and Shanghai.”
Annual Report
2013
PT Bank Mandiri Persero Tbk.
Realization takes Remapping into account Excluding Insurance Premiums
Loans Rp Trillion
106,25 126,26
138,78
Deposits Rp Trillion
55,25 61,42
74,08
Net Interest Income Rp Trillion
3,53 4,76
4,35
Overhead Expense Rp Billion
297,13 360,07
413,82
NPL
2,11 1,41
1,36
Loan Yield
9,74 4,14
8,50 4,89
8,90 4,27
Valas Rupiah
Valas Rupiah
Cost of Liabilities
5,13 0,27
3,73 0,34
4,18 0,36
corporate banking
2011
2011
2011 2011
2011 2011
2011
2011 2012
2012
2012 2012
2012 2012
2012
2012
2013
2013
2013 2013
2013 2013
2013
2013
3,18 4,89
4,95
Contribution Margin Rp Trillion
0,76 0,83
0,92
2011 2012
Fee-Based Income Rp Trillion
2013
c. Proitability
The total Margin Contribution of the Directorate of Corporate Banking amounted to Rp 4.95 Trillion, which was generated by 5 Groups in Head Oice Rp 4.76 and 3 Overseas Oices -- Singapore, Hong Kong and Shanghai
Rp 187 billion. In line with Bank Mandiri’s vision of being the best bank in ASEAN, the Bank must be able to expand the business of its overseas branches so as to produce signiicant contribution margins.
The achievements of the Directorate of Corporate Banking are closely linked to the 5 main strategies that were applied consistently during 2013, namely:
First, focusing on targeted customers, namely, 150 Top Groups, Multi National Companies MNCs, and SOEs that
operate in selected industry sectors, including Infrastructure, Telecommunications, Oil Gas, and Plantations. Lending to the road, transport and power sectors in 2013 grew 39.3 YoY, while lending to the telecommunications
sector grew 110.1 YoY, oil gas sector by 174.8 YoY, and plantations by Rp 35.8 trillion or 29.1.
Annual Report
2013
PT Bank Mandiri Persero Tbk.
corporate banking
Second, increased efectiveness of Account Plan execution for Bank Mandiri’s Top 100 Corporate Clients including
Corporate Banking’s Anchor Clients. The purpose of the Account Plan program, which is part of our customer- focused strategy, is to increase the quality and sustainability of the Bank’s revenue through holistic, long-term, and
mutually supportive and beneicial relationships with selected clients. The success of the Account Plan program is evident from such criteria as share of wallet, share of mind, and signiicant cross-selling, especially in the case
of transactional banking products cash management, trade, foreign exchange, as well as customer value chain business.
Third, providing solutions so as to achieve a one stop-service for customer in conducting banking transactions, and
adjusting business processes in order to accelerate the execution of Account Plans in an integrated manner with other relevant units.
Fourth, optimizing synergies with Mandiri Sekuritas so as to facilitate customer access to inancing sources in the
capital markets. Conversely, Mandiri Sekuritas can refer customers to Bank Mandiri for banking facilities. Through such synergies, customers can access solutions that provide added value to their inancials.
Fifth, growing the businesses of our Overseas Oices KLN. This strategy is focused on Indonesian-Related
Companies and involves the ofering of products and services such as loans, funding, trade inance, and treasury services.
As one example of the implementation of the Bank Mandiri grand strategy in Singapore, we have established a Structured Trade Finance Department that specializes in providing tailor-made inancing solutions. In addition, Bank
Mandiri Singapore focuses on the provision of services to Wealth Management Group customers.
STRATEGIES AND PLANS FOR 2014
One of the main pillars of the Bank Mandiri 2010-2014 Corporate Plan is wholesale transaction banking, with the key objective of this strategy being an increase in low cost funds and fee-based income derived from customer
transactions. Accordingly, Corporate Banking in 2014 will further hone the wholesale transaction banking strategy in a number of areas.
The principal strategies that will be applied in 2014 are as follows:
First, increasing the collection of low-cost funds through both an intensiication and extensiication. Intensiication
involves an increase in the number of transactions with existing clients in such a way as to ensure that all customer funds and value chains go through Bank Mandiri. To that end, every account holder needs to be aware of the
pattern of customer inlows outlows so that relevant products can be ofered. Meanwhile, extensiication refers to eforts to increase the number of new corporate accounts, particular new accounts belonging to corporate business
clients that are in the company tree, which actively engage in transactions and which may be expected to continue depositing funds with Bank Mandiri on a sustainable basis.
Annual Report
2013
PT Bank Mandiri Persero Tbk.
corporate banking
Second, after our success with the Top 100 Groups, including 68 Corporate Banking anchor clients, in 2014 Bank
Mandiri will strengthen the implementation of the Account Plan Program so as to expand it to 134 Anchor Clients and enhance the organizational structure for managing the 68 Anchor Clients that are under the auspices of
Corporate Banking. With the expansion and strengthening of the organizational structure, it is expected that customers will increasingly feel the beneit of a comprehensive range of services and the added value provided by
Bank Mandiri.
Third, a bundling strategy for MCM and e-forex products so as to encourage an increase in the average balance
of Low Cost Funds. In addition, such bundling will encourage growth in forex volume and fees, including the alignment of KPI with Treasury, both in terms of volume and fee income.
Fourth, strengthening alliances with subsidiaries, particularly Mandiri Sekuritas in ofering capital market
opportunities to corporate banking customers, including bonds, MTNs, IPOs, Right Issues, and advisory and arranger services. In addition, Bank Mandiri may also ofer pre IPO inancing product bundling. Based on this strategy, it is
expected that Mandiri Sekuritas and Corporate Banking will be able to provide a comprehensive suite of inancing solutions that meet our customers’ requirements.
Fifth, Further honing the Overseas Oice strategy: Bank Mandiri has a vision of being the Indonesia representative
as an ASEAN Qualiied Bank AQB. This will be achieved through the application of a “Follow The Trade, Follow The People” strategy and enhanced focus on Asian markets, in accordance with the characteristics and strengths of the
business of each Overseas Oice.
Strengthening Human Capital Capabilities to Support Wholesale Banking Strategy
To support the wholesale transaction banking strategy, strategic acceleration is being conducted in the human capital ield. This is focused on two main aspects: strengthening organizational structure and enhancing
competencies.
The provision of knowledge and understanding of business models, industry outlook and industry potential so as to support the expansion of wholesale banking is carried out through the Industry Knowledge Program, which focuses
on 10 types of industries in a comprehensive manner from upstream to downstream.
Looking ahead, the challenges faced by the Corporate Banking Directorate will become increasingly complex. Consequently, improvements will need to be made on an ongoing basis. The role played by Corporate Banking in
the management of wholesale banking will continue to be honed and strengthened in terms both of infrastructure and capacity.
Annual Report
2013
PT Bank Mandiri Persero Tbk.
RESULTS AND ACHIEVEMENTS OF THE DIRECTORATE OF COMMERCIAL BANKING IN 2013
As a directorate that plays a strategic role in the business of Wholesale Transaction Banking and Retail Financing businesses, the Directorate of Commercial Business Banking consistently applies strategic themes that ofer ”Total
Solutions” for the Commercial Banking segment and ”Quick and Easy” solutions for Business Banking customers. ”Total Solutions” means providing the best solutions based on customer needs, supported by the stability provided
by our e-Channel system, with the aim of generating low-cost funds and fee-based income from low risk products. Meanwhile, we are able to provide ”Quick Easy” solutions thanks to our extensive branch network and easy
processes, with the principal goal being to improve margins on high yield products.
The year 2013 represented the ”Proitability Building” stage, as part of which our strategies focused on market- facing initiatives. To that end, the initiatives that were undertaken focused on developing the marketing skills of
Relationship Managers RM in a comprehensive manner through structured coaching and training programs. This stage represented a continuation of the ”Capacity Capability Building” stage in 2011 and 2012, during which time
strategic initiatives were undertaken that emphasized infrastructure strengthening, including the opening of new branches and improvements to our IT infrastructure.
The disciplined implementation of our primary focuses during 2013 resulted in considerable progress. In the Transaction the Cash Management, Trade Finance and Bank Guarantee BG businesses all showed quite rapid
growth. Cash Management volume increased 47 to Rp 2.231 trillion, Trade Finance grew 25 to Rp 195.9 Trillion, and BG volume grew 14 to Rp 52.6 trillion. The increase in business volume boosted Fee-Based Income to Rp
1.6 trillion, an increase of 45 over the previous year. Meanwhile, in Retail Financing business, Business Banking lending increased by 21 from 2012 to Rp 46.5 Trillion. The increase in lending in the high yield segment boosted
CBB business volumes loans and deposits by 23 to Rp 269.0 trillion. The growth in FBI and business volumes increased CBB’s Margin Contribution to Rp 10.6 trillion, 14 higher than in 2012.
FINANCIAL INITIATIVE AND PERFORMANCE IN 2013
The year 2013 was one that was marked by quite onerous business challenges as the global economy struggled to recover from the crisis. Meanwhile, CBB aggressively targeted business growth both on the asset and liabilities
sides. The main strategy pursued was to market credit while at the same time maintaining quality, balanced by the marketing of transaction products so as to boost the growth of low cost funds and help ensure the maintenance of
our NIM. The program pursued to realize our strategies are as described below:
commercial business banking
“The provision of credit by the Directorate of Commercial Business Banking, which manages the commercial and business segments, also increased signiicantly with
realized gross expansion amounting to Rp 89.6 trillion, consisting of gross expansion in commercial lending of Rp 70.5 trillion and gross expansion in Business Banking
of Rp 19.1 trillion. Gross expansion in lending to new customers in the commercial segment amounted to Rp 16.9 trillion and Rp 5.8 trillion in the business segment.”
Annual Report
2013
PT Bank Mandiri Persero Tbk.
commercial business banking
Net Interest Income Rp Trillion
4,52 7,72
10,15
Overhead Expense Rp Billion
0,74 1,03
1,60
2011 2011
2012 2012
2013 2013
Fee-Based Income Rp Billion
840 970
1.225
Contribution Margin Rp Trillion
5,06 7,87
10,59
Includes joint management of customers formerly managed by CBB Directorate and which were transferred to the MRB Directorate in 2013
1. Low Cost Funds Enhancement Program CASA
