This strong net profit growth came on the back of robust loan growth, a surge in Bank Mandiri's fee-based income and a decline in its NPL ratio during the January-June 2017 period. In a statement released on Wednesday (19/07) Bank Mandiri President Director Kartika Wirjoatmodjo expressed his gratefulness for the latest corporate earnings and added it proves that Bank Mandiri's efforts to improve its business since last year have delivered a significant result. However, due to the persistent degree of economic uncertainty around the globe there could be some unstable credit demand in second half of the year.

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Ahmad Siddik Badruddin, Bank Mandiri's Director of Risk Management and Compliance, said "good loan growth" was particularly recorded in the oil palm plantations, construction, as well as food and beverage sectors. Meanwhile, the bank has been more cautious and selective in the metal trading and textile sectors.

Bank Mandiri's net interest income (the difference between the revenue that is generated from the bank's assets and the expenses associated with paying out its liabilities) expanded by 6 percent (y/y) to IDR 25.7 trillion in the first half of 2017, while its non-interest income (income from fees, commissions and foreign exchange gains) grew by 18.5 percent (y/y) to IDR 10.8 trillion.

Its gross NPL ratio narrowed from 3.86 percent in January-June 2017 to 3.82 percent period in the same period one year earlier, while Bank Mandiri's net NPL shrank to 1.44 percent from 1.53 percent over the same period.

Bank Mandiri's total outstanding loans reached IDR 682 trillion in the first half of 2017, up 11.6 percent (y/y) from outstanding loans in the same period last year. This growth was particularly attributed to strong growth in consumer loans and micro-loans.

Earlier, it was reported that Bank Mandiri plans to convert its existing branch in Singapore into a full branch. Singapore is the city state where most of offshore assets were declared under Indonesia's tax amnesty program that ran between mid-July 2016 and 31 March 2017. The full branch in the city-state would open up opportunities to target those Indonesian clients who opt for private banking services in Singapore.

So far this year shares of Bank Mandiri, listed on the Indonesia Stock Exchange in Jakarta, have risen nearly 16 percent.

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