2003 Q4 Analysts Meeting

(1)

PT Bank Mandiri (Persero)

Tbk

.

(2)

Bank Mandiri Overview

Operating Highlights & Financial Performance

FY 2003

(3)

27.9 4,586

3,586

Profit After Tax

42.5% 35.4%

LDR

27.7% 23.4%

Total CAR

19.4% 15.2%

Tier 1 CAR

139.1% 190.4%

NPL Provisions / NPLs

40.4% 42.8%

Cost to Income(1)

23.6% 26.2%

RoE – after tax (p.a.)

2.8% 2.3%

RoA - before tax (p.a.)

41.3 1,020

722

Book Value/Share (Rp) (3)

27.9 229

179

EPS (Rp) (3)

8.6% 7.3%

Gross NPL / Total Loans

3.4% 2.9%

NIM (p.a.)

(2.9) 178,811

184,114

Customer Deposits

(0.4) 249,436

250,395

Total Assets

(17.4) 122,907

148,846

Government Bonds

16.1 75,943

65,417

Gross Loans

% Change

Dec 2003 Dec 2002

IDR tn / %

Key Balance Sheet Items and Financial Ratios

(1) (G&A and employee expenses) / (Net Interest Income + Other Operating Income) (2) Bank only

(4)

Full Year Loan Growth of 16.1% is Generating Stronger LDR

44.6

41.2 42.3 43.0 44.5

49.2

42.5

48.3 48.3 50.4

58.7

65.4 68.7 66.8

72.6 75.9

26.5% 26.3% 28.3% _25.3% 27.5%

35.4% 36.1%

40.4%

42.5%

0 20 40 60 80 100

Q1 '00 Q2 '00 Q3 '00 Q4 '00 Q1 '01 Q2 '01 Q3 '01 Q4 '01 Q1 '02 Q2 '02 Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03

0% 10% 20% 30% 40% 50%

Loans LDR

Loans, Rp. Trillion

LDR Ratio

8.7 1.7

2.6

(7.7) 3.4 10.6 (13.6) 13.7 (0.1) 4.4 13.1 14.7 5.0 (2.7) 4.6

Growth (%)

Consolidated Quarterly Data

*

(5)

2,054

63,941

73,311

14,390

1,467 1,499

Beg. Balance

Net New Loans

F/X Impact Repayments Loans Written Off

End Balance

Q4 Loan Origination Remains Sound

IDR tn

Total Loan Growth (12 Mo. ‘03) – Bank Only

Additional loans totaling Rp. 16.99 trillion have been approved through 31 December 2003 but have not yet been drawn down, compared to Rp. 10.39 trillion as of 31 December 2002

1,067

43,401

46,177 4,190

371 78

27,134 27,080

Beg. Balance

Net New Loans

F/X Impact Repayments Loans Written Off

End Balance Total Loan Growth (Q4 ‘03) – Bank Only

(Rp Loans)

(Rp Loans) (FX Loans)

(FX Loans)

+22.5%

+14.7%

+5.9%

(6)

1.5 42.7 22.9 1.41.6 41.8 25.6 3.1 31.4 3.7 40.2 22.2 40.6 22.6 38.2

0

5

10

15

20

25

30

35

40

45 Corporate

Commercial

Consumer

Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03

-4.5%

Loan Portfolio Growth is Well Diversified

As of Dec. 2003; Non-consolidated numbers

Loan by Customer Type – Bank Only IDR tn

5.1%

42.8%

52.1%

Share of Loan Book, Jan - Dec 2003

34.7% 2.3%

62.9%

Rp 2.9 trillion of the loan book (or 4.0%) reallocated from Corporate to Commercial in Q4 based upon customer GAS

Target loan mix by 2004 (originally 2007)

¾Corporate: 50%

¾Non-Corporate: 50%

Strong Consumer Loan Growth across a range of products

+146.7% YTD Growth NA 814,906 -Credit Cards (9.2%) 493,548 543,363 Cash Collateral Loans 503.8% 328,020 54,326 Collateralized Personal Loans 18,316 2,509 1,801,984 282,705 Dec 2003 (23.2%) 3,269 Car Loans* Unsecured Loans Unsecured Employee Loans Mortgages Growth % Dec 2002 NA -142.1% 744,360 109.3% 135,074 +41.0%

(7)

Loan Portfolio Analysis

Breakdown By Sector, December 2003(1)

(1) As of Dec 2003; Non-consolidated numbers Hotels

1.5%

Agriculture 12.9%

Business Services

6.3%

Transportation 6.2%

Mfg - Chemicals 11.0% Mfg - F&B

7.7% Mfg - P&P

5.4% Mfg - Others

4.2% Mfg - Cement

4.2%

Mfg - Wood 3.9%

Trading & Restaurant

10.2%

Construction 5.7% Transport.,

Comms. 6%

Mining 3.6%

Others 9.6% No sector accounts for more than

13% of total loans

Minimizing exposure to problem sectors including

¾Textiles (7.5%)

¾Plywood (3.9%)

¾Hotels (1.5%)

Focusing on growth sectors including:

¾Agriculture

¾Fisheries

(8)

0% 20% 40% 60% 80% 100%

Q1 '00 Q2 '00 Q3 '00 Q4 '00 Q1 '01 Q2 '01 Q3 '01 Q4 '01 Q1 '02 Q2 '02 Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03

- Loss - Doubtful - Substandard - Special Mention - Pass

19.8%

9.8%

7.3% 8.8%

15.0% 24.8%

26.2% 35.7%

0% 20% 40% 60% 80% 100%

NPL % Cat 2 %

NPLs

& Cat. 2 as

of Total Loans

Loan Collectibility (Bank Only) shows Decline in Category 2

Loans by Collectibility (%

(9)

NPL Movement - Consolidated

8.6%

7.3%

9.7%

19.8%

146.7%

129.5%

82.3%

139.1%

190.4%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% Q1 ' 0 0 Q2 ' 0 0 Q3 ' 0 0 Q4 ' 0 0 Q1 ' 0 1 Q2 ' 0 1 Q3 ' 0 1 Q4 ' 0 1 Q1 ' 0 2 Q2 ' 0 2 Q3 ' 0 2 Q4 ' 0 2 Q1 ' 0 3 Q2 ' 0 3 Q3 ' 0 3 Q4 ' 0 3 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200% 220% 240% 260%

Gross NPL Ratio Net NPL Ratio Prov / NPL

NPL Ratio

rovisioning Coverage

Asset Quality

Conservative provisioning

¾ 139% coverage of NPLs as of Dec 31

2003

¾ Mandiri provisioning policy results in

Rp. 3.4 tr. in excess of BI requirement

Rigorous restructuring and recovery

¾ Through Q4 2003, IDR 1.24 tn of

written-off loans and IDR 1.47 tn of NPLs have been recovered

NPL Breakdown by Customer Segment

50% 15% 3 15% 5% 2 100% 2% Mandiri Policy 100% 50% 1% BI Requirement 5 4 1 By Collectibility 4.90% 0.18 Consumer Total Commercial Corporate

(Bank Only) NPLs (Rp Tr) NPL Ratio (%)

8.84% 6.48 10.99% 3.45 7.46%* 2.85*

(10)

**Q4 2003 Loan Detail*: Loans downgraded to NPL**

Profile of Loans Downgraded to NPL in Q4 – Bank Only

Comm Corp

Mfg - P&P Mfg - Cement Trading Mfg - Txtl Mfg - Oth

Other Agri

USD IDR

Invest WC

IBRA

Restructured

1st Time

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

GAS Sector Currency Purpose History

* Corporate & Commercial Loans Only

61% from Corporate borrowers

Largest downgrades by sector:

¾ Manufacturing of Pulp & Paper

¾ Manufacturing of Cement, Bricks & Ceramics

¾ Trading, Hotels & Restaurants

59% were US Dollar loans

86% were for Investment loans

59% were loans purchased from IBRA, while 30% were previously restructured

1st _{time downgrades from Hotels, Other}

Mfg, Transportation & Business Services sectors

Rp 3.2 trillion in loans (4.4% of total loans) were downgraded to NPL in Q4, including Rp 1.7 trillion for Kiani Kertas . At the same time Rp 1.0 trillion were upgraded from NPL to

performing. Of the Corporate and Commercial Loans downgraded in Q4:

(11)

Q4 2003 Movement in Category 1 and 2 Loans

50,060

3,344 243

1,965

6,488 2,404

55,849

Beg. Bal. D/ G t o 2 U/ G f rom 2

D/ G t o NPL

U/ G f rom NPL

Net Disburse.

FX Impact End Bal.

Category 1 Loan Movements – Bank Only IDR bn

Category 2 Loan Movements – Bank Only

21 307

797 1,238

6,488

2,404 15,179

10,983

Beg. Bal. Cat. 1 D/G U/G to 1 D/G to NPL NPL U/G Net Disburse.

FX Impact End Bal.

*Includes downgrade of Kiani Kertas loan of Rp. 1.7 tr

(12)

**Q4 2003 Loan Detail*: Category 2 Loans**

Category 2 Loan Profile – Bank Only

Current

1 Day < 30 Days

31-60 61+

Comm Corp

Mfg-Textle Agri

Trading Mfg-Chem

Mfg-Cem Mfg-Wood Bus. Serv.

Others

IDR USD Other

Invest. WC

Restructured

No History

IBRA

IBRA Restruct.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Days Aging GAS Sector Currency Purpose History

* Corporate & Commercial Loans Only

69% are current or 1 day overdue

55% are to Commercial customers

Primary sectors in Category 2 are:

¾ Textile Manufacturing

¾ Agriculture

¾ Trading

51% are Rupiah loans

61% are Investment loans

64% are Restructured loans Rp 10.98 trillion in loans were in Category 2 in Q4, or 15.0% of total loans. Of the Corporate & Commercial Loans in Special Mention in Q4:

(13)

2003 Movement in Restructured Loans

25,598

23,987

487

910

370

156

Beg. Bal. New Rest ruct uring

Repayment Writ e-Of f s Ot hers* End Bal.

Q4 2003 Restructured Loan Movements IDR bn

FY 2003 Restructured Loan Movements

29,542

23,987

1,878

1,761

2,424

508

Beg. Bal. New Rest ruct uring

Repayment Writ e-Of f s Ot hers* End Bal.

(14)

**Q4 2003 Loan Detail*: Restructured Loans**

Restructured Loan Profile – Bank Only

USD

2 3 4 5

Corp Comm

Agri Mfg-Chem

Mfg-Textle Mfg-Cem

Other Mfg - Others

Trading Mfg-P&P Mfg-F&B

Bus. Servs.

IDR

EUR

Invest. WC

No Change D/G to NPL U/G to PL

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Category GAS Sector Currency Purpose Movement

* Corporate & Commercial Loans Only

90% are performing

65% are to Corporate customers

Primary sectors are:

¾ Agriculture

¾ Manufacturing

•Chemicals

•Textiles

•Cement

•Other

56% are Rupiah loans

57% are Investment loans

4% were downgraded from Performing, while 2.5% were upgraded to Performing in Q4

96% are pre-merger loans

Rp 23.99 trillion in restructured loans remained in Q4, or 32.7% of total

loans. Of the Corporate & Commercial Restructured Loans in Q4:

(15)

**Q4 2003 Loan Detail*: Non-Performing Loans**

Non-Performing Loan Profile – Bank Only

* Corporate & Commercial Loans Only

55% are to Commercial customers

Primary sectors are:

¾ Manufacturing

•Pulp & Paper

•Textiles

•Cement

•Other

¾ Agriculture

¾ Trading, Hotel & Restaurant

57% are Rupiah loans

69% are Investment loans

38% were previously restructured, while 37% were loans purchased from IBRA

Rp 6.48 trillion in NPLs remained in Q4, or 8.8% of total loans. Of the Corporate & Commercial NPLs in Q4:

Comm Corp

Mfg-P&P Trading

Others Agri Mfg-Others

Mfg-Text Mfg-Cem Soc. Services

IDR USD

Invest WC

Restruct 1st Time

IBRA IBRA Restr

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

(16)

Recap Bond Portfolio

Portfolio Sales as of Dec 2003 (IDR bn)

100.0% 122.9 70.1 51.4 1.4 Total 100.0% 9.0 85.1 28.8 Total 57.0% 41.9% 1.1% % of Total

7.3% 9.0 -Hedge Bonds 69.3% 59.7 24.1 1.3 Variable Rate 23.4% 1.4 27.3 0.1 Fixed Rate

% of Total HTM

Available for Sale Trading

At Fair Value,

Dec 2003 (IDR tn)

177.4 176.9 153.5 _148.8 123.0 4.0 1.0 15.8 24.5 0 40 80 120 160 200

1999 2000 2001 2002 2003 0 5 10 15 20 25 30 Recap Bonds Bond Sales

Bond Portfolio Movement (Fair Value), 1999 - 2003

Rupiah (Trillions) 425 1,868 149 Realized Profit Unrealized Profit Bonds Sold IDR bn (285) (52) 1,513 4,707 24,505 1,025 Q4 ‘03 2003 2002

(17)

0% 20% 40% 60% 80% 100%

Q1 '00 Q2 '00 Q3 '00 Q4 '00 Q1 '01 Q2 '01 Q3 '01 Q4 '01 Q1 '02 Q2 '02 Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '04

Government Bond Loans Other Assets

60.6%

34.1%

74.1%

68.2% 67.8%

63.6% 75.4% 74.7%

74.9%

29.9% 22.1%

19.3% 19.0%

18.1% 19.0%

19.8%

0% 20% 40% 60% 80% 100%

Int. from Bonds Int. from Loans

As a

of Total Interest Income

Growing Contribution from Loans vs. Bonds – Bank Only

Total Assets (

(18)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Q1 '00 Q2 '00 Q3 '00 Q4 '00 Q1 '01 Q2 '01 Q3 '01 Q4 '01 Q1 '02 Q2 '02 Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03

Rp Savings Deposits Rp Demand Deposits FX Demand Deposits Rp Time Deposits FX Time Deposits

Funding Mix Improves

Deposit Analysis – Bank Only

Deposits by Type

48.7%

44.6% 46.4%

53.7%

51.7%

57.3% _56.2%

61.5%

0.0% 7.5% 15.0% 22.5% 30.0% 37.5% 45.0% 52.5% 60.0% 67.5% 75.0%

Deposits by Customer

177.7 173.1

176.9 163.0

154.6 170.0

152.9

148.1 189.8 186.4 182.6 183.6 183.3 186.3 183.0 176.2

Deposit Total (Rp Tr)

(19)

Savings Deposit Growth Generating a Better Funding Mix

40.5 18.0 22.1 29.6 15.3 22.8% 11.0% 11.7% 16.2% 10.3% 15.9% 0 5 10 15 20 25 30 35 40 45 Q1 '00

Q2 '0 0 Q3

'00 Q4 '0

0 Q1 '0

1 Q2

'01 Q3 '0

1 Q4

'01 Q1 '0

2 Q2

'02 Q3

'02 Q4 '0

2 Q1

'03 Q2

'03 Q3 '0

3 Q4 '03 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Savings Deposits % of Deposits National Share

Savings Deposits, Rp. Trillion

3.7% 6.1% 6.9% 2.7% 5.1% 10.6% 9.5% 8.1% 5.4% 10.8% 15.9% 13.8% 11.6% 6.6% 17.3% 15.1% 13.0% 9.9% _8.4% 17.2% 0.0% 2.5% 5.0% 7.5% 10.0% 12.5% 15.0% 17.5% 20.0% Jan ' 0 2 Ma r ' 0 2 Ma y '0 2 Jul '0 2 Sep '0 2 No v '0 2 Jan ' 0 3 Ma r ' 0 3 Ma y '0 3 Jul '0 3 Sep '0 3 No v '0 3

Rp Time Deposits

Rp Savings Deposits

Rp Demand Deposits

Savings Deposit Growth Average Monthly Rupiah Deposit Costs

(20)

106.4 725.2 385.9 679.2 1069.4 61.8 281.6 695.2 158.7 51.8 26.6 0.0 50.0 100.0 150.0 200.0

Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03

0 300 600 900 1,200 SMS Subscribers SMS Transactions Call Center Trans.

ATM, Credit Card and Phone Banking Growth

268,706 12,925 26,154 52,224 94,183 158,958 226,223 271,764 98,004 2,709 6,270 12,201 25,429 41,744 62,551 88,310 0 100,000 200,000 300,000 400,000 500,000

Q1 '00 Q2 '00 Q3 '00 Q4 '00 Q1 '01 Q2 '01 Q3 '01 Q4 '01 Q1 '02 Q2 '02 Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03

0 20,000 40,000 60,000 80,000 100,000

Avg Daily Volume Avg Daily Value

Avg. Daily Transaction

Volume

Avg. Daily Transaction

Value (Rp. Millions)

ATM Network Average Daily Transaction Volume and Value

Mandiri Visa Card Holders and Receivables Phone Banking Subscribers & Transactions

275.4 225.7 245.3 275.3

338.2 567.5 747.9 814.9 645.9 823.2 0 100 200 300 400 500

Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03

0 200 400 600 800 1,000 Cards (000s) Receivables (Rp Bn)

Cards I s s ued ( 0 00s)

Receivables (Rp Bn)

bscribe

rs (00

(21)

44.0 _42.3 _42.6 47.0

51.3 51.6

58.1 61.0 _56.1

64.3

72.5

77.8 79.5

89.5 91.9

15.1 _14.6 15.1 15.4 17.8 16.8 18.4 17.0

20.7 21.0 25.0

25.5

13.3 13.3

9.7

0 20 40 60 80 100

Q2 '00

Q3 '00

Q4 '00

Q1 '01

Q2 '01

Q3 '01

Q4 '01

Q1 '02

Q2 '02

Q3 '02

Q4 '02

Q1 '03

Q2 '03

Q3 '03

Q4 '03

RWA Total Capital

26.1%

31.4% 31.3% 32.2%

28.5% 29.3%

26.4%

29.3% 29.8%

23.4%

26.6%

27.9%

8 .0% 8 .0% 8 .0% 8 .0% 8 .0% 8 .0% 8 .0% 8 .0% 8 .0% 8 .0% 8 .0% 8 .0% 8 .0% 8 .0% 8 .00%

28.6% 27.7%

26.4%

5% 10% 15% 20% 25% 30% 35% CAR BI Min Req

A Strong Capital Base to Support Growth

RWA/Total Capital, Rp. Trillion

(22)

= Interest Spread _{= Net Interest Margins}

Maintaining Margins Despite a Fluctuating Interest Rate

Cost of F

s & Yi

eld o n Earnin g Assets – B ank On ly

All figures - Bank Only

6% 2.5%

0% 2._4% 2._5% 3.0% 3.0%

9% 2.

9% 2.9%

4% 2._8% 3._0% 3.3% 3.3%

3. 7% 0. 8% 0. 8% 1. 8% 2.

2% 1._1% 1.5% 1.7% 2.2%

1% 2._0% _2.

5% 2. 2% 2. 2% 2. 5% 3. 2% 3. 2% 0% 2% 4% 6% 8% 10% 12% 14% Q1 '00 Q2 '00 Q3 '00 Q4 '00 Q1 '01 Q2 '01 Q3 '01 Q4 '01 Q1 '02 Q2 '02 Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03 11.3% 10.9% 11.9% 13.0%

12.4% 12.6% 12.8% 13.0%

13.9% 13.6% 13.5%

13.0% 11.8% _11.5% 10.4% 9.5% 10.5% 10.1% 10.1%

10.8% 11.2% 11.1% 11.1% 10.8%

11.8% 11.6% 11.0% 10.8% 9.6% 9.1% 7.2% 6.3% 0% 2% 4% 6% 8% 10% 12% 14%

(23)

46 57 89

135

89 162 112

173 180

339

150 190

302 282

101

294

172 236

258

250

395

115

178 16

327

102 101

0 150 300 450 600 750

Q1 '00

Q2 '00

Q3 '00

Q4 '00

Q1 '01

Q2 '01

Q3 '01

Q4 '01

Q1 '02

Q2 '02

Q3 '02

Q4 '02

Q1 '03

Q2 '03

Q3 '03

Q4 '03

Other Non-Interest Income

Non-Loan Related Fees & Commissions

IDR bn

(24)

379 276 359 336 319 433 259

736

360 487 490

723

387 470 561

733

370

325 211 294

293 417 327 402 457 409 485 476 394 380 666 957 -500 1,000 1,500 2,000 2,500 Q1 '00 Q2 '00 Q3 '00 Q4 '00 Q1 '01 Q2 '01 Q3 '01 Q4 '01 Q1 '02 Q2 '02 Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03 G&A Expenses Personnel Expenses

Overhead Spending Remains Under Control Despite Heavy

Investment in Brand & IT Platform

25.9% 41.8% 38.9% 42.5% 36.9% 34.4% 28.2% 27.0% 33.8% 70.5% 44.9% 45.8% 40.8%40.0% 37.1% 37.1% 31.1% 39.9% 42.8% _40.4%

0%

15%

30%

45%

60%

75%

Cost to Income Ratio

Annual Avg

Overhead Expenses (Rp.Billion)

Cost to In

(25)

35.7%36.4%41.2% 49.2%52.7% 61.3%62.5% 73.3% 82.6%90.5% Ma n d ir i Da n a m o n BN I C it iba nk BC A BR I Pe rm a ta BT N BI I Li pp o 906 634 474

297 _{295 291 275}

194 192 186

C it iba nk Ma n d ir i BN I BC A Da n a m o n BT N BR I Li pp o BI I Pe rm a ta 9,972 7,5137,351 5,905 4,951 3,6213,4383,136 2,4162,368 Man d ir i BN I C it ibank BT N BC

A _BII

Li ppo Pe rm a ta Da n a m o n BR I 3,956 3,754 3,1072,930 1,726 1,5571,468 1,347 1,102 1,138 Ma n d ir i Pe rm a ta BN I C it iba nk Da n a m o n BT N BR I Li pp o BC

A _BII

Scale Brings Efficiency Advantage Over Our Competitors

Bank Only, As of September 2003

Revenue/ Employee (Rp Mn) Cost/ Income (%) Loans/ Employee (Rp Mn) Deposits/ Employee (Rp Mn) 389.4 285.1

100.5 90.0 86.9 82.0 49.9

29.3 25.1 18.8

C it iba nk Ma n d ir i BC A BN I BR I Da n a m o n BT N Pe rm a

ta _BII

Pre Tax Income/Employee (Rp Mn)

1.2 1.5

2 2.1 2.3

2.4 2.7 3.4 3.7 4.2 Ma n d ir i BN I BT N BC A Pe rm a ta Da n a m o n BI I Li pp o C it iba

nk _BRI

Cost/Assets (%)

(26)

3,357

4,145

3,514

5,332

1,454 260

114

2,021

2,072

0 1,500 3,000 4,500 6,000 7,500

2000 2001 2002 2003

Gain on Sale/Value of Securities FX Gain

Core Earnings

Pre-Provision Operating Profit

IDR bn

(27)

Consistent Improvement in Profitability: FY PAT of Rp 4.586 tr

472 ₃₀₈

1,168

1,549

290 1,300

602

690

967 1,017

1,528

(410)

645

799

819

829

-500 500 1,500 2,500 3,500 4,500 5,500

2000

2001

2002

2003

Q1 PAT Q2 PAT Q3 PAT Q4 PAT

Profit after Tax

Return on Equity

IDR bn

8.1%

21.5%

26.2%

24.0%

0.0% 2.5% 5.0% 7.5% 10.0% 12.5% 15.0% 17.5% 20.0% 22.5% 25.0% 27.5%

(28)

Potential Upsides

Written-off Loans

Aggregate of IDR 20.4 tn (US$ 2.42 bn) in written-off loans as of end-December 2003, with significant recoveries on-going:

¾ 2001: IDR 2.0 tn (US$ 224 mn)

¾ 2002: IDR 1.1 tn (US$ 123 mn)

¾ 2003: IDR 1.2 tn (US$ 147 mn)

Property Revaluation

Property revalued by Rp. 3.0 trillion in our June accounts

Based upon a valuation by Vigers as of June 2003, an additional Rp. 2.8 trillion remains un-booked

Conservative Provisioning

Conservative provisioning policy resulted in allowances on loans exceeding BI’s minimum requirements

¾ As of 31 December 2003, excess provisions totaled IDR 3.4 tn (US$ 404 mn)

Loan Collateral Undervalued

Collateral values on NPLs are generally not included for provisioning purposes due to outdated valuations

(29)

Corporate Actions

Dividend Policy

50% Dividend payment policy maintained Based upon Full Year EPS of Rp 229:

: : :

Rp 65

¾ Final Dividend expected after approval from AGM scheduled for May 2004

Rp 50

¾ Less Interim Dividend paid in Dec 2003

Rp 115

(30)

Additional Prudential Supervision Requirements

Ratios/Benchmarks

Ratios/Benchmarks Dec 2003_{Dec 2003}

Secondary Reserve

CETA (Annualized)

Interest Expenses to Total Assets (Annualized)

8.2%

2.17%

6.90%

Corporate : Non.Corporate

Corporate : Non.Corporate 52 : 48_{52 : 48}

Requirement

12%

1.5%

7.5%

50 : 50 End of 2004

50 : 50

End of 2004

Jan 2004 (Unaudited)

10.8%

2.49%

4.69%

52 : 48

1. Secondary Reserve

(SBI+Placement in Other Banks+Current Account with Other Banks+Marketable Securities (AFS+Trading) excluding Government Bonds) / Total Assets

2. Core Earning to Total Assets Ratio (CETA)

(NII + Other Operating Income (excluding Forex Gain/Loss and Gain from Incline in Value and Sale of Securities) – Other Operating Expenses (excluding Provision)) / Total Assets

3. Corporate : Non Corporate

Corporate = Gross Annual Sales (GAS) > Rp.300 billion.

Non Corporate = Commercial (GAS <=Rp.300 billion) + Consumer Loan

≤

≥

(31)

In Conclusion

Better Asset Mix

Better Liability Mix

Retail Banking Growing

Margins Improving

Scale Provides Cost Efficiency Advantage

Transformation in Corporate Governance, Risk

Management and Corporate Culture Continues

(32)

Bank Mandiri Financial Summary

(33)

Summary P&L Information – Full Year 2003

(82.4) 0.1 218 0.5 1,238 Non Operating Income

(76.5) (0.1)

(320) (0.5)

(1,359) Other Operating Expenses

21.0 2.8

7,032 2.3

5,811 Net Income Before Tax

4.4 (0.8)

(2,151) (0.8)

(2,060) G & A Expenses

12.6 (0.7) (1,764) (0.6) (1,566) Personnel Expenses (24.9) (0.3) (704) (0.4) (937) Provisions, Net 27.9% 1.8 4,586 1.0 3,586 Net Income After Tax

49.0 2.7

6,814 1.8

4,573 Profit from Operations

2.5 0.8

2,072 0.8

2,021 Gain from Increase in Value & Sale of

Bonds 108.2 0.7 1,674 0.3 804 Other Operating Income

16.7 3.1

8,007 2.7

6,862 Net Interest Income

(29.8) (6.9) (17,550) (9.9) (25,017) Interest Expense (19.8) 10.0 25,557 12.6 31,879 Interest Income % Change % of Av.Assets Rp (Billions) % of Av.Assets* Rp (Billions) FY 2003 FY 2002

(34)

Summary P&L Information – Fourth Quarter 2003

NA (0.1) (75) 1.5 965 Non Operating Income

NA 0.2

137 (1.1)

(728) Other Operating Expenses

8.4 3.1

1,946 2.8

1,795 Net Income Before Tax

1.4 (1.2)

(733) (1.1)

(723) G & A Expenses

3.7 (0.6) (394) (0.6) (380) Personnel Expenses NA 0.2 152 (0.1) (64) Gain from Increase in Value & Sale of

Bonds (49.5) 0.2 161 0.5 319 Provisions, Net 2.5 1.3 819 1.3 799 Net Income After Tax

143.5 3.2

2,021 1.3

830 Profit from Operations

(28.4) 0.8

525 1.1

733 Other Operating Income

29.9 3.4

2,173 2.6

1,673 Net Interest Income

(40.6) (5.2) (3,306) (8.8) (5,568) Interest Expense (24.3) 8.6 5,479 11.4 7,241 Interest Income % Change % of Av.Assets Rp (Billions) % of Av.Assets* Rp (Billions) Q4 2003 Q4 2002

(35)

Bank Mandiri’s Credit Ratings

B3 Long Term Bank Deposits

B B+

Long Term Local Currency Debt Bank Mandiri Ratings

B B2

B Long Term Foreign Currency Debt

Stable Stable

Stable Outlook

Sovereign Ratings

Stable Long Term Local Currency Outlook

B3 Long Term Bank Deposits

B B2

B Long Term Foreign Currency Debt

Stable Positive

Long Term Foreign Currency Outlook

B+ B+

Long Term Local Currency Debt

B B

Short Term Foreign Currency Debt

Fitch Moody’s

(36)

Bank Mandiri Additional Information

(37)

• Active Credit Portfolio Management • Active Capital Allocation Management • Credit Scoring (SME)

• Credit Card Scorecard • Risk Based Pricing

• Risk Adjusted Performance Measurement (RAPM) • Operational Risk Management Tools

• ORM Information System

• Implement Middle Office Solution as an integrated VaR engine

• Use Sendero as an ALM analysis tool

• Implement EIS to update management of risk profile thus enable better strategic decision

• Implement LPS to provide a more transparent risk profile using stochastic analysis

Implementation of “Four-Eyes Principle”

Improvement of credit policies (credit process, authority level, etc.)

Customer Rating System (Corporate segment)

Consumer Scorecard

Portfolio Management

Operational Risk Management Policy

Acquisition of new Middle Office Solution (Mysis) for Market Risk

End-phase implementation of ALM engine (Sendero)

Development of Executive Information System for Market Risk (EIS-Sendero)

Ongoing Commitment To Strengthen Risk Management …

Development To Date

Development To Date Future Action Plan_{Future Action Plan}

(38)

… And Human Resources Capabilities & Corporate Culture

Description

Description 2001₂₀₀₁ 2002₂₀₀₂

Number of Employees

Number of Employees 17,20417,204 17,73517,735

2003 2003

18,397

a. Warning 1st degree

a. Warning 1st degree 191₁₉₁ 191₁₉₁ 226₂₂₆

b. Warning 2nd degree

b. Warning 2nd degree 91₉₁ 92₉₂ 95₉₅

c. Dismissal

c. Dismissal 73₇₃ 67₆₇ 53₅₃

Violations & Sanctions:

• Optimize human & intellectual capital by treating, leading, developing and managing people as strategic assets / strategic partners and impose strict sanctions on violations of company policies and frauds

• HRD initiatives, ie.: Job Grading, Competency Based Performance Management System etc. • Training initiatives, ie.: Officer/Staff Development Program, E-Learning etc.

(39)

Customer Satisfaction Index Towards Overall Service (Savings Product)

Significant Progress in Creating a Dominant Retail Bank

62% 68%

79%

2000 2002 2003

Savings Deposits (Rp Tn)

Number of Credit Cards (‘000)

Consumer Assets Portfolio (Rp Tn)

125

240

338

2001 2002 2003

Taken over in 2003

29.6 22.1

40.5

2001 2002 2003

1.5 0.9

3.7

(40)

White-paper Milestones Progressing as Expected

Action Plan Deliverable Time-line Status

1. Appointment of independent Board of

Commissioners with capital market expertise 2. Completion of quasi re-organisation

3. Completion of new IT infrastructure roll-out 4. Development of divestment master plan for

subsidiaries, affiliated companies and fixed assets

5. Refinement of quality control and internal audit 6. Refinement of credit policies

7. Refinement of credit risk, operational risk and market risk management

8. Improvement in funding mix

9. Enhancement in written-off loan collection

Appointed by Shareholders meeting

Decision by Shareholders meeting

IT rolled-out at every branches Master-plan

New manual Decline in fraud New manual

Improved credit quality New Manual

Improved NPL

Improved cost of funds Improved collection

Sep '03

Dec'03 Dec '03

Dec'03

Dec'03 On-going

Dec '04 On-going

Dec '04 On-going On-going On-going

Continuous Update In-progress In-progress In-progress In-progress

5

(41)

Detailed Status on Ongoing Initiatives (1)

Action Plan

5. Refinement of quality control and internal audit

6. Refinement of credit policies

7. Refinement of credit risk, operational risk and market risk management

8. Improvement in funding mix

9. Enhancement in written-off loan collection

Detailed Status

• Continuous update on audit manual (every half year) to maintain ISO 9001:2000 certification

• Continuous socialization of GCG principles and fraud method to mitigate future event

• Risk-Based Audit has been implemented

• Policy on customer rating and consumer scorecard has been developed • Policy on new credit process and authority level has been developed (for

every segments)

• Continuous development on various policies, ie. portfolio mgmt., pricing, restructuring

• Diagnosed risk management practices and developed Action Plan to omit the gaps between existing practices and Central Bank requirements

• Acquired risk management engines (Mysis, EIS-Sendero) to improve and to get more accurate analysis

• Improve risk management manual as Central Bank required. • Develop credit scoring for SME & credit card

• Implemented credit rating & consumer scorecard • Implemented operational risk tools

• Composition of expensive funds (time deposit) to total funds has declined from 66% in 2002 to 56% by the end of 2003

• Policy to allow bank to cease collection (partially) on written-off loan is being developed

• In 2003, collection on written-off loan achieved Rp. 1.2 trillion (exceeding target)

(42)

Bank Mandiri Additional Loan Movement

Detail

(43)

Q4 2003 Loan Movement, Performing & Non-Performing Loans

104 3,651

3,201

1,041

65,239

66,832

Beg. Balance

U/G from NPL

D/G to NPL Net Disburse.

FX Impact End Balance

Performing Loan Movements - Bank Only IDR bn

Non-Performing Loan Movements – Bank Only

6,479

1,041 5,243

3,201

504

371

1,067

Beg. Balance

U/G to PL D/G from PL

Disburse. CollectionsWrite-Offs FX Impact End Balance

*Includes downgrade of Kiani Kertas loan of Rp. 1.7 tr

(44)

FY 2003 Loan Movement, Performing & Non-Performing Loans

349 12,246

4,554

1,286

59,214

66,832

Beg. Balance

U/ G f rom NPL

D/ G t o NPL Net Disburse.

FX Impact End Balance

Performing Loan Movements - Bank Only IDR bn

Non-Performing Loan Movements – Bank Only

6,479 1,286

4,727

4,554

2,144

1,467

2,054

139

Beg. Balance

U/G to PL D/G from PL

Disburse. Collections Wrie-Offs FX Impact End Balance

*Includes downgrade of Kiani Kertas loan of Rp. 1.7 tr

(45)

FY 2003 Movement in Category 1 and 2 Loans

43,102

898

12,480 259

2,413

6,133 2,814

55,849

Beg. Bal. D/ G t o 2 U/ G f rom 2

D/ G t o NPL

U/ G f rom NPL

Net Disburse.

FX Impact End Bal.

Category 1 Loan Movements – Bank Only IDR bn

Category 2 Loan Movements – Bank Only

461 234

1,027 2,142

6,133

2,814 16,113

10,983

Beg. Bal. Cat. 1 D/G U/G to 1 D/G to NPL NPL U/G Net Disburse.

FX Impact End Bal.

(1)

White-paper Milestones Progressing as Expected

Action Plan

Deliverable

Time-line

Status

1. Appointment of independent Board of

Commissioners with capital market expertise

2. Completion of quasi re-organisation

3. Completion of new IT infrastructure roll-out

4. Development of divestment master plan for

subsidiaries, affiliated companies and fixed

assets

5. Refinement of quality control and internal audit

6. Refinement of credit policies

7. Refinement of credit risk, operational risk and

market risk management

8. Improvement in funding mix

9. Enhancement in written-off loan collection

Appointed by Shareholders

meeting

Decision by Shareholders

meeting

IT rolled-out at every branches

Master-plan

New manual

Decline in fraud

New manual

Improved credit quality

New Manual

Improved NPL

Improved cost of funds

Improved collection

Sep '03

Dec'03

Dec '03

Dec'03

On-going

Dec '04

On-going

Dec '04

On-going

Continuous

Update

In-progress

5

(2)

Detailed Status on Ongoing Initiatives (1)

Action Plan

5. Refinement of quality control and internal audit

6. Refinement of credit policies

7. Refinement of credit risk, operational risk and

market risk management

8. Improvement in funding mix

9. Enhancement in written-off loan collection

Detailed Status