PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2016 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
216
59. CUSTODIAL SERVICES AND TRUST OPERATIONS continued
Trust Operations continued Both Bank Mandiri’s Trust operations and Custodial Services have received Quality Certification ISO
9001:2008.
Trust A trustee services including managing customer’s assets portfolio the settlor based on a written
agreement between the Bank as the Trustee and customer’s for the benefits of beneficiary. Bank Mandiri has obtained the license principle and confirmation letter for the Trustee services based on
Bank Indonesia’s Letter No.1530DPB1PB1-1 dated April 26, 2013 and No.1532DPB1PB1-1 date August 28, 2013.
Functions of independent trust service are:
a. “Paying Agent” which receive and transfer money andor funds, and record cash in and cash out for and on behalf of the clients the settlor.
b. “Investment Agency” involve in placing, converting, and administering the placement of funds for and on behalf of the clients the settlor.
The trust service provided by the Bank is also include managing customers from various segments, including oil gas company, corporate and commercial, non-profit organization customers for activities
among others distribution of gas sales results, sale and purchaseacquisition of companies, and pooling of funds for foreign aid.
60. CHANNELING LOANS
Channeling loans based on sources of funds and economic sectors are as follows unaudited:
December 31, December 31, 2016
2015
Government: Agriculture
322,887 415,740
Manufacturing 14,543
14,543 337,430
430,283
Bank Mandiri has been appointed to administer the loans received by the Government of the Republic of Indonesia in various currencies from several bilateral and multilateral financial institutions to finance the
Government’s projects through State Owned Enterprises, Region Owned Enterprises and Regional Governments, such as: Asian Development Bank, Banque Français Credit National, Barclays, BNP
Paribas, BNP Paribas CAI Belgium, Calyon BNP Paribas, CDC NES, Export Finance and Insurance Corporation EFIC Australia, IDA, International Bank for Reconstruction and Development, Japan Bank
for International Cooperation, Kreditanstalt Fur Wiederaufbau, Nederland Urban Sector Loan De Nederlanse Inveseringsbank voor Ontwikkelingslanden NV, Switzerland Government, RDI - KI, Spain,
U.B Denmark, US Export Import Bank and Overseas Economic Cooperation Fund.However, based on the Regulation of the Ministry of Finance No. 40PMK.052015 dated March 6, 2015 stated starting
October 1, 2015 management administration of overseas loans are governed by the Ministry of Finance, resulting all of the loans governed by the administrative bank being taken over by the Ministry of
Finance. Channeling loans are not included in the consolidated statement of financial position as the credit risk is
not borne by the Bank and its Subsidiaries. Bank Mandiri’s responsibilities under the above arrangements include, among others, collections from borrowers and payments to the Government of
principal, interest and other charges and the maintenance of loan documentation. As compensation, Bank Mandiri receives banking fee which varies from 0.05 - 0.50 from the average of outstanding
loan balance in one year.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2016 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
217
61. RISK MANAGEMENT
Bank Mandiri segregates independent risk management function based on the requirement of Bank Indonesias regulation and international best practices. Bank Mandiri adopts the Enterprise Risk
Management ERM concept as comprehensive and integrated risk management strategy which in line with Banks business process and operational needs. ERM implementation will give value added to the
Bank and stakeholders. ERM is a risk management process embedded in the business strategies and operations that are
integrated into daily decision making processes. With ERM, the Bank establishes a systematic and comprehensive risk management framework credit risk, market risk and operational risk by connecting
the capital management and business processes to risks. In addition, ERM also applies consolidated risk management to the subsidiaries, which will be implemented gradually to maximise the effectiveness
of bank’s supervision and value creation to the Bank based on Bank Indonesia Regulation No. 86PBI2006 dated January 30, 2006 and Financial Services Authority FSA Regulation
No. 17POJK.032014 regarding implementation of risk management integrated for financial conglomerates which coverage throughout the financial industry.
The Bank’s risk management framework is based on FSA Regulation No. 18POJK.032016 regarding Risk Management Implementation for Commercial Banks. The Bank’s risk management framework is
stated in the Bank Mandiri Risk Management Policy BMRMP, which consists of several policies as the guideline to the business growth and as a business enabler to ensure the Bank conduct prudential
principle by examining the risk management performance process identification - measurement - monitoring - risk mitigation for all organisation levels.
Active supervision by the Board of Directors and the Board of Commissioners on risk management activities, directly and indirectly, are implemented through the establishment of committees at the level
of the Board of Commissioners which are Risk Monitoring Committee, Integrated Governance Committee, Renumeration and Nomination Committee and Audit Committee. The Executive Committee
under the supervision of the Board of Directors consists of Asset Liability Committee ALCO, Risk Management Committee RMC, Integrated Risk Management Committee IRC, Capital Subsidiaries
Committee CSC, Business Committee, Information Technology Committee ITC, Human Capital Policy Committee HCPC, Policy Procedure Committee PPC dan Credit Committee.
From 9 Executive Committees, there are 4 committees that are directly involves in risk management, i.e RMC, IRC, ALCO and PPC. RMC is the committee that discuss and recommends policy and procedures
as well as monitoring risks profile and managing all the Banks risks. Integrated IRC is the committee that provide recommendation on the integrated risk management policy including the application of risk
management
in subsidiaries.
IRC is
based on
the application
of FSA
Regulation No. 17POJK.032014 regarding integrated risk management. IRC has members from subsidaries and
discuss as well as recommends the policy and application of integrated risk management. ALCO is the committee that manages Banks asset and liability management, interest rate and liquidity and other
areas that are related to the asset and liability management of the Bank. PPC is the committee that discuss and recommends the adjustment or improvement in the Banks policy and procedures.
Committees under Board of Commissioners including Risk Monitoring Committee, Integrated Governance Committee and Audit Committee, which has the task and responsibility to perform review
and evaluation on policy and execution of Banks risk management, as well as providing inputs and recommendation to the Board of Commissioners in their monitoring tasks.
Operationally, the related Directorate with risk management is divided into two big parts, there are 1 credit approval as part of the four-eye principles, located at the Wholesale Risk Directorate and Retail
Risk Directorate and 2 Independent Risk Management that is located in the Risk Management Directorate and Risk Management Compliance Directorate. Risk Management Compliance is
headed by a Director that is responsible towards the Board of Director and also a member of the Integrated Risk Management Committee, and Policy Procedure Committee. The bank has also
established a Risk Management Working Unit under the Risk Management Compliance. The Risk Management Compliance Directorate is divided into 3 three groups, that is the Credit Portfolio Risk
Group that is related to Credit Risk and portfolio and Risk Management integration through ERM, Market Risk Group and Operational Risk Group that is related to market risk, liquidity risk, and operational risk.