Bank Mandiri Presentation prepared for the. Q Analysts Meeting Jakarta, Nov. 24

Transcription

1 Bank Mandiri Presentation prepared for the Q Analysts Meeting Jakarta, Nov. 24 0

2 2,000 Share Price Movement since IPO, Rp/Share 1,200 Description Shareholders as of 30 September 2004 Investors Shares % 1,800 1,600 1,400 1, DOMESTIC 1. Government 2. Retail 3. Employees 1 7,906 17,411 14,000,000, ,240, ,601, % 1.58% 1.12% 1, Pension Funds 82 59,974, % 1, Assurance/Banks 27 65,104, % BMRI JCI Institutional 7. Mutual Funds Total INTERNATIONAL , ,886,446 45,949,500 14,914,756, % 0.23% 74.22% Retail 45 18,386, % 0 11Jul 8Aug 8Sep 7Oct 4Nov 9Dec 13Jan 12Feb 12Mar 14Apr 13May 14Jun 13Jul 10Aug 8Sep 8Oct 5Nov 0 2. Institutional Total TOTAL ,046 5,160,986,054 5,179,372,054 20,094,129, % 25.78% % from: BMRI JCI IPO 177.8% 87.5% YTD 82.8% 38.6% 69

3 Bank Mandiri Presentation Contents Overview Page # Q Summary P&L 3 Key Balance Sheet Items & Financial Ratios 4 Quarterly Loan Growth & LDR 5 Q3 Loan Movement 6 Q3 Downgrades to NPL 7 Loan Portfolio Growth by Business 8 Q3 Consumer Loan Portfolio Details 9 Quarterly Asset Quality & Provisioning 10 Recap Bond Portfolio Summary & Movement 11 Quarterly Asset Mix & Interest Source 12 Quarterly Funding Mix 13 Quarterly Savings Deposits & Funding Rates 14 Quarterly Capital Structure 15 Quarterly Net Interest Margins and Spread 16 Quarterly NonInterest Operating Income 17 Quarterly Overhead Spending 18 Industry Efficiency Comparison 19 Annual Core Earnings Analysis 20 Quarterly Profitability 21 Potential Upsides 22 Corporate Actions 23 Conclusion 24 Financial Summary Page # Summary NineMonth Balance Sheet 26 Summary Quarterly Balance Sheet 27 Summary Quarterly P&L 28 Recap Bond Portfolio Detail 29 Bank Mandiri Credit Ratings 30 Reconciliation to IFRS (H1 2004) 31 Loan Movement & Portfolio Detail Q3 NPL Analysis Category 2 Loan Analysis Restructured Loan Analysis Q3 Loan Portfolio Detail Analysis Additional Information Consumer Banking Details Bank Syariah Mandiri Details Mandiri Sekuritas Details 51 Operational Loss Details 52 Bank Mandiri at a Glance Senior Management and Organization Structure Staff and Network Growth 56 International Recognition 57 Q Audited Financials 1

4 Bank Mandiri Overview Operating Highlights & Financial Performance Q

5 Summary P&L Information 9 Months Months Months 2004 YoY Change Rp (Billions) % of Av.Assets* Rp (Billions) % of Av.Assets (%) Interest Income 20, , (28.5) Interest Expense (14,244) (7.5) (7,235) (4.0) (49.2) Net Interest Income 5, , Other Operating Income 1, , Gain from Increase in Value & Sale of Bonds 1, , (16.8) Provisions, Net (865) (0.5) (171) (0.1) (80.3) Personnel Expenses (1,323) (0.7) (1,679) (0.9) 26.9 G & A Expenses (1,465) (0.8) (1,954) (1.1) 33.4 Other Operating Expenses** (457) (0.2) (462) (0.3) 1.1 Profit from Operations 4, , Non Operating Income (88.7) Net Income Before Tax 5, , Net Income After Tax 3, , * % of Average Assets on an annualized basis ** primarily premiums paid under the blanket guarantee scheme 3

6 Key Balance Sheet Items and Financial Ratios IDR billion / % 9 Mo FY Mo YoY Change (%) YTD Change (%) Gross Loans 72,569 75,943 87, Government Bonds 131, ,907 93,954 (28.5) (23.6) Total Assets 251, , ,542 (6.2) (5.6) Customer Deposits 179, , ,145 (6.3) (6.0) Total Equity 21,889 20,395 23, RoA before tax (p.a.) 2.7% 2.8% 3.5% RoE after tax (p.a.) 26.2% 23.6% Cost to Income (1) 39.9% 40.4% 26.5% 40.6% NIM (p.a.) 3.3% 3.4% 4.4% LDR 40.4% 42.5% 51.8% Gross NPL / Total Loans 7.3% 8.6% 7.2% Provisions / NPLs 181.4% 139.1% Tier 1 CAR (2) 19.0% 19.4% Total CAR (2) 27.9% 27.7% 132.0% 19.3% 26.6% EPS (Rp) Book Value/Share (Rp) 1,094 1,020 1, (1) (G&A and employee expenses) / (Net Interest Income + Other Operating Income), excluding bond gains (2) Bank only 4

7 Loan growth 5.8% in Q3; LDR reached 51.8% Consolidated Quarterly Data Loans (Rp tn) LDR (%) 26.5% 26.3% 28.3% 25.3% 27.5% % 42.5% 44.6%47.9% 40.4% % 36.1% * 66.8 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 Q1 '04 Q2 '04 Q3 '04 QoQ Growth (%) 38.1% 35.3% 42.3% 32.5% 23.6% YoY Growth (%) 23.2% 19.4% 19.9% 16.1% 12.4% 11.8% 8.5% 3.4% 0.5% 13.7% 4.4% 10.6% 13.1% 14.7% 8.7% 7.2% 2.5% 2.6% 5.0% 4.6%1.1% 5.8% 1.7% 0.3% 0.1% 2.7% 7.7% 13.6% * Note: Includes IBRA loan purchases of Rp 5 tr 5

8 Q Loan Movement, Performing & NonPerforming Loans Performing Loan Movements Bank Only NonPerforming Loan Movements Bank Only IDR bn ,245 70, ,109 6, ,094 Beg. Balance U/G from NPL D/G to NPL Net Disburse. FX Impact End Balance Beg. Balance U/G to PL D/G from PL Disburse. CollectionsWriteOffs FX Impact End Balance 6

9 Q Loan Detail*: Analysis of NPL and PL changes Q # Q # Loan Background Value (Rp bn) DG to NPL UG to PL Net Value (Rp bn) DG to NPL UG to PL Net Corporate Loans Restructured 14, % 5.9% 14, % 0.2% IBRA 3,633 3, % 17.3% 4.0% PreMerger 1, PostMerger 17, % 0.4% 20, % 0.3% Overseas 2, % 4.4% 1, % 1.3% Total 39, % 2.5% 41, % 1.7% 0.3% Commercial Loans Restructured 7, % 1.7% 2.7% 6, % 7.8% 7.7% IBRA 1, % 8.1% 2.7% 1, % 3.8% 0.2% PreMerger 3, % 2.6% 0.4% % 0.3% 0.8% PostMerger 20, % 2.1% 3.6% 24, % 1.5% 3.5% Overseas Total 33, % 2.3% 2.7% 33, % 2.8% 1.1% Total Loans Restructured 21, % 0.6% 4.8% 21, % 2.3% 2.3% IBRA 5, % 2.1% 0.7% 5, % 14.2% 3.1% PreMerger 4, % 1.8% 0.3% 1, % 0.1% 0.5% PostMerger 38, % 1.2% 2.1% 45, % 0.8% 2.1% Overseas 2, % 4.4% 1, % 1.3% Total 72, % 1.1% 2.6% 74, % 2.2% 0.3% # % downgrades and upgrades are annualized figures * Corporate & Commercial Loans Only 7

10 Consumer loan growth balancing the segment mix Loans by Customer Segment (Rp tn) Bank Only Loan Segment Details Bank Only Corporate By Segment (Bank only) Loans (Rp tn) Corp Comm Cons Total YOY Growth (%) % of Portfolio 0.7% 51.1% 30.2% 40.9% 110.0% 8.0% 15.4% 100% Commercial NonPerforming Loans by Segment NPLs (Rp tn) Consumer NPLs (%) 7.77% 8.11% 2.58% On target for loan mix by end % Corporate: 50% Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03 Q1 '04 Q2 '04 Q3 '04 NonCorporate: 50% As of September. 2004; Nonconsolidated numbers 8

11 Consumer Loan Portfolio Detail in Q3 Quarterly Consumer Loan Balances by Type (Rp bn) Sep 2003 Dec 2003 Jun 2004 Sep 2004 YoY Growth (%) YTD QoQ Mortgages , % 257.5% 54.4% Payroll Loans 1, , , , % 6.1% 0.5% Collateralized Personal Loans , , % 491.2% 83.2% Cash Collateral Loans % 3.3% 6.3% Credit Cards , % 39.4% 21.6% Unsecured Loans % 68.3% 31.1% Total Consumer # 3, , , , % 74.8% 29.4% #Other minor categories are not detailed but included in the totals *Car Loans channeled through finance companies = Rp 1.83 tn 9

12 Maintaining conservative provisioning NPL Movement Consolidated Provisioning Details 62.2% Provisioning Policy Performing Loans NonPerforming Loans 190.4% Collectibility BI Req. 1 1% 2 5% 3 15% 4 50% 5 100% 82.3% Q1 ' % 129.5% 139.1% 132.0% 19.8% 9.7% 7.3% 8.6% 7.2% 1.8% Q3 '00 Q1 '01 Q3 '01 Q1 '02 Q3 '02 Q1 '03 Q3 '03 Q1 '04 Q3 '04 Gross NPL Ratio Net NPL Ratio Prov / NPL BMRI Policy 2% 15% 50% As of 30 September 04: Total Provisions/NPL coverage = 132.0% Collateral values not deducted for Categories 3,4 and 5 Net NPL Ratio = (Gross NPLs Provisions against Categories 3,4 & 5) / Total Loans Provisions excess to BI requirements = Rp 2.9 tn Restructuring during Q3 04: Loans Restructured = Rp 94 bn NPL Collections = Rp 175 bn 100% 10

13 Recap Bond Portfolio At Fair Value, Sept 2004 (Rp tn) Trading (Mark to Market*) AFS (Mark to Market # ) HTM (Nominal Value) Total % of Total Fixed Rate % Variable Rate % Hedge Bonds % Total % of Total 1.7% 28.5% 69.8% Rupiah (Trillions) Bond Portfolio Movement (Fair Value), 1999 Q Bond Sales Recap Bonds Q1 '04 Q2 '04 Q3 ' Portfolio Sales as of September 2004 (Rp bn) IDR bn Bonds Sold Realized Profit Unrealized Profit ,505 1,868 (52) Q , Q2 04 5, * Mark to Market impacts Profit # Mark to Market impacts Equity Q3 04 8, (2) 9Mo 04 31,174 1,

14 Growing Contribution from Loans vs. Bonds Bank Only 280 Int. from Bonds Int. from Loans Total Assets (Rp tn) % 19.8% 75.4% 74.7% 19.0% 18.1% 74.1% 19.0% 68.2% 67.8% 19.3% 22.1% 63.6% 29.9% 60.6% 48.5% 47.4% 45.5% 42.3% 44.2% 41.6% 34.1% As a % of Total Interest Income 0 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 Q1 '04 Q2 '04 Q3 '04 Government Bonds Loans Other Assets 12

15 Funding Mix Improves Deposit Analysis Bank Only 200 Retail Deposits (%) LowCost Deposits (%) 180 Deposits by Type (Rp tn) % 47.8% 26.8% 44.6% 32.9% 46.4% 32.1% 53.7% 31.4% 51.7% 32.1% 57.3% 56.2% 33.8% 37.0% 61.5% 62.0% 65.7% 62.6% 53.4% 48.6% 50.9% 44.5% As a % of Total Deposits % 20 0 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 Q1 '04 Q2 '04 Q3 '04 Rp Savings Deposits Rp Demand Deposits FX Demand Deposits Rp Time Deposits FX Time Deposits 13

16 Savings Deposit Growth Generating a Better Funding Mix Savings Deposit Growth Average Monthly Rupiah Deposit Costs (%) Savings Deposits (Rp tn) As % of Total Deposits National Share of Savings Deposits (%) % % 11.2% 11.5% 15.2% 11.9% 10.3% 10.0% 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 Q1 '04 Q2 '04 Q3 ' % 16.8% 27.4% 16.2% 17.3% 15.9% 17.2% 13.8% 15.1% 11.6% 13.0% Demand Deposits Savings Time Deposits 1 Mo. SBIs 10.8% 10.6% 9.9% 8.4% 9.5% 7.4% 8.1% 7.3% 7.4% SBI 6.9% 7.1% 6.6% 6.0%6.1% TD 6.1% 4.4% 5.1% 5.4% 4.8% 5.0% SD 3.7% 3.7%3.6%3.6% DD 2.7% Jan '02 Apr '02 Jul '02 Oct '02 Jan '03 Apr '03 Jul '03 Oct '03 Jan '04 Apr '04 Jul '04 14

17 High CAR maintained through strong internal capital generation CAR BI Min Req 31.4% 31.3% 30.7% 29.3% 29.8% 29.3% 28.5% 29.8% 28.6% 27.9% 27.7% 27.5% 26.1% 26.1% 26.4% 26.6% 26.6% % 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 Q1 '04 Q2 '04 Q3 '04 RWA (Rp tn) Total Capital (Rp tn) 15

18 Margins normalizing as bond yields decline All figures Bank Only 11.3% 10.9% 11.9% 0.8% 0.8% 1.8% 13.0%12.3% 12.6%12.8%13.0% 13.9% 13.6% 13.5% 13.0% 2.2% 1.7% 1.5% 1.1% 2.2% 2.5% 2.0% 2.1% 2.2% 11.8% 11.5% 11.8% 10.4% 11.6% 10.8% 11.2% 11.1%11.1% 10.8% 11.0% 10.8% 9.5% 9.3% 10.5% 10.1%10.1% 8.8% 9.6% 8.4% 9.1% Spread Yield on Assets 7.2% NIM Cost of Funds 6.3% 5.1% 4.6% 4.6% 2.5% 2.2% 3.2% 3.2% 3.8% 4.2% 4.2% 4.0% 4.5% 4.7% 3.7% 3.3% 3.3% 3.0% 2.8% 3.4% 2.9% 2.9% 3.9% 3.0% 3.0% 2.5% 2.4% 3.0% 2.5% 2.6% 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 Q1 '04 Q2 '04 Q3 '04 16

19 Rising nonloan related fees & commissions Nonloan related fees & commissions Details of Q & 2004 % of Operating Income* 10.5% 9.6% 11.5% Q (Rp302 bn) Admin Fees 31.6% LCs & Guarantees 18% Credit Cards 1.4% Transfers etal 4.5% 2.3% 46 Q1 ' % 4.9% 4.1% Q3 ' Q1 '01 Q3 '01 4.8% Q1 '02 6.3% Q3 ' % Q1 ' Q3 '03 *NonLoan related fees & commissions/total Operating Income 7.2% Q1 '04 Q3 '04 Others 34.5% Q (Rp395 bn) Admin Fees 32.3% Others* 22.4% Fees from Subs. 9.9% Fees from Subs. 9.9% LCs & Guarantees 23.3% Credit Cards 5.7% Transfers etal 6.4% *Others include Custodian & Trustee fees, Syndication, Mutual Funds, Payment Points, etc. 17

20 Efficiency ratios maintained despite salary adjustments and higher G&A expenses Cost to Income Ratio* (%) Annual Avg (%) 48.8% 39.9% 42.5% 40.4% 40.3% 37.1% 42.8% 33.7% 33.8% 34.4% 38.9% 40.0% 31.1% 36.9% % 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 Q1 '04 Q2 '04 Q3 '04 G&A Expenses (Rp bn) Personnel Expenses (Rp bn) *Excluding Bond gains 18

21 Scale maintains efficiency advantage over competitors Bank Only, As of September , % 63.7% 5,870 5, % 4, % 38.6% 41.6% 41.9% 42.9% 3,717 3, , , % 19 Mandiri BCA BNI BTN Permata Lippo BII Danamon BRI Mandiri Danamon BCA BRI BNI BTN Permata BII Lippo Danamon Mandiri BNI BCA BRI BTN BII Permata Lippo 4,215 3,754 Loans/ Employee (Rp Mn) 2,962 2,282 1,947 1,870 1,682 1, Revenue/ Employee* (Rp Mn) % 2.5% 2.8% 3.4% 3.6% 4.3% 4.6% 5.1% Mandiri BTN BNI Permata Danamon BRI BCA BII Lippo Mandiri BNI BTN BRI BCA Danamon BII Permata Lippo Mandiri BCA Danamon BTN Lippo Permata BNI BII 8,445 Deposits/ Employee (Rp Mn) 433 Pre Tax Income/Employee* (Rp Mn) Cost/ Income (p.a.) (%) 6.7% BRI Cost/Assets* (%) * Annualized Industry Average

22 9Month 2004 core earnings 27.7% above 9Month 2003 IDR bn 7,500 Gain on Sale/Value of Securities PreProvision Operating Profit 6,000 4,500 3,000 1,500 1,454 3,357 FX Gain Core Earnings 260 4,145 2,021 3,514 Q4 9 mo. 2, ,792 3,540 1, , Mo. '04 20

23 9 Mo. PAT of Rp 4,481 bn is an increase of 19.0% YOY RoE After Tax (Annualized) 26.2% 24.0% 26.5% 21.5% % , (410) 799 1, , ,408 1,528 1, ,549 1, Q1 PAT Q2 PAT Q3 PAT Q4 PAT 21

24 Potential Upsides Writtenoff Loans Property Revaluation Aggregate of IDR tn (US$ 2.42 bn) in writtenoff loans as of end September 2004, with significant recoveries ongoing: 2001: IDR 2.0 tn (US$ 224 mn) 2002: IDR 1.1 tn (US$ 123 mn) 2003: IDR 1.2 tn (US$ 147 mn) YTD: IDR 0.64 tn (US$ 70.5 mn) Q1 04: IDR 0.19 tn (US$ 22 mn) Q2 04: IDR 0.19 tn (US$ 20 mn) Q3 04: IDR 0.26 tn (US$ 29 mn) Property revalued by Rp. 3.0 trillion in our June 2003 accounts Based upon a valuation by Vigers as of June 2003, an additional Rp. 2.8 trillion remains unbooked Conservative Provisioning Conservative provisioning policy resulted in allowances on loans exceeding BI s minimum requirements As of 30 September 2004, excess provisions totaled IDR tn (US$ 317 mn) Loan Collateral Undervalued Collateral values on NPLs are generally not included for provisioning purposes due to outdated valuations 22

25 Corporate Actions Interim Dividend Payment Payment of Interim dividend as follows: Rp 60 per share Payable on 30 December 2004 Cum dividend Regular Market 16 December 2004 Cash Market 21 December 2004 Ex dividend Regular Market 17 December 2004 Cash Market 22 December 2004 Recording Date 21 December

26 In Conclusion Asset mix continues to improve Liability mix continues to improve Retail banking continues to grow (now on the asset side) Transformation in corporate governance, risk management and corporate culture continues 24

27 Bank Mandiri Financial Summary 25

28 Summary 9Month Balance Sheet: 30 Sep., 31 Dec. 03 & 30 Sept 04 Q3 03 Q4 03 Q3 04 YoY Rp (trillions) Rp (trillions) Rp (trillions) USD (billions)# Rp % Change Total Assets (6.2) Cash & Placements w/bi Current Accounts & Placements w/other Banks (34.0) Securities Net Government Bonds (28.5) Trading (34.9) AFS (1.1) HTM (35.6) Loans Performing Loans NonPerforming Loans Allowances (9.6) (9.1) (8.3) (0.90) (14.3) Loans Net Total Deposits NonBank (6.3) Demand Deposits Savings Deposits Certificate & Time Deposits (24.9) Shareholders Equity # USD1 = Rp9,

29 Summary Quarterly Balance Sheet: 31 Mar, 30 Jun. & 30 Sept 04 Q1 04 Q2 04 Q3 04 QoQ Rp (trillions) Rp (trillions) Rp (trillions) USD (billions)# Rp % Change Total Assets Cash & Placements w/bi Current Accounts & Placements w/other Banks (30.9) Securities Net Government Bonds (8.1) Trading AFS (19.7) HTM (2.8) Loans Performing Loans NonPerforming Loans (7.7) Allowances (8.9) (8.8) (8.3) (0.90) (6.3) Loans Net Total Deposits NonBank (2.0) Demand Deposits (0.6) Savings Deposits Certificate & Time Deposits (6.8) Shareholders Equity # USD1 = Rp9,

30 Summary P&L Information Q Q Q QoQ Change Rp (Billions) % of Av.Assets* Rp (Billions) % of Av.Assets (%) Interest Income 4, , (5.9) Interest Expense (2,309) (3.9) (2,304) (3.9) (0.2) Net Interest Income 2, , (11.4) Other Operating Income Gain from Increase in Value & Sale of Bonds Provisions, Net (78) (0.1) (151.7) Personnel Expenses (555) (0.9) (597) (1.0) 7.6 G & A Expenses (670) (1.1) (763) (1.3) 13.9 Other Operating Expenses** (148) (0.2) (145) (0.2) (2.0) Profit from Operations 1, , (7.0) Non Operating Income (6) (0.0) (150.0) Net Income Before Tax 1, , (6.6) Net Income After Tax 1, , * % of Average Assets on an annualized basis ** primarily premiums paid under the blanket guarantee scheme 28

31 Recap Bond Portfolio Details 30 September 2004 Bank Only (Stated in Rp Millions) 29

32 Bank Mandiri s Credit Ratings S&P Moody s Fitch Sovereign Ratings Outlook Positive Stable Stable Long Term Bank Deposits B3 Long Term Foreign Currency Debt B B2 B Long Term Local Currency Debt B+ B Bank Mandiri Ratings Long Term Foreign Currency Outlook Positive Stable Long Term Bank Deposits B3 Long Term Foreign Currency Debt B B2 B Short Term Foreign Currency Debt B B Long Term Local Currency Outlook Positive Long Term Local Currency Debt B+ B+ 30

33 Audited Reconciliation to IFRS FY 01 FY 02 FY 03 H1 03 H1 04 Rp (Billions) Rp (Billions) Rp (Billions) Rp (Billions) Rp (Billions) Net profit under Indonesian GAAP 2,746 3,586 4,586 2,239 3,073 IFRS Adjustments Allow. for possible losses on earning assets (662) (669) 112 Allow. for possible losses on commitments & contingencies 351 (77) 104 1, Change in fair value of derivatives (52) Employee benefits 10 (94) (17) 4 Accretion on deferred inc. arising from loan purchase from IBRA 55 (2) Derecognition of revaluation of premises & equipment Derecognition of allowances (995) Securities & Gov. Bond (trading portfolio) 293 Deferred income taxes (184) 2 81 (146) (77) Net Adjustment 430 (6) (188) Net profit in accordance with IFRS 3,176 3,580 4,398 2,580 3,251 IFRS = International Financial Reporting Standards 31

34 Bank Mandiri Additional Loan Movement & Portfolio Detail 32

35 Q Loan Detail*: Downgrades to NPL Loan Profile: Q3 Corp & Comm Downgrades to NPL (Rp 474 bn) Bank Only 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Corporate Commercial Restr Oth<5% Other Other Hotels TradeOth IBRA USD MfgText Trans Bus Serv Retail WC MfgChem MfgOth Organic IDR Agri Invest. GAS Backgrnd Sector Currency Purpose Downgrades to NPL in Corporate and Commercial loans totaled Rp 474 billion (0.6% of total loans) in Q3. Of these downgraded loans: 38.6% were less than 90 days overdue, including 14.2% which were still current on interest payments 68.6% were Commercial borrowers 29.7% were loans purchased from IBRA 0.3% were previously restructured Largest downgrades by sector: Agriculture Other Manufacturing Chemical Manufacturing 67.1% were Rupiah loans 23.9% were Investment loans 1 st time downgrades from Agriculture, Chemical Mfg & Retail * Corporate & Commercial Loans Only 33

36 Q Loan Detail*: NonPerforming Loans Loan Profile: Q3 Corp & Comm NPLs (Rp 5.9 tn) Bank Only 100% Oth<5% 90% TradeOth Other Export Rp 5.9 trillion in Corporate & Commercial NPLs remained in Q3, or 7.3% of total loans. Of these NPLs in Q3: 80% 70% 60% 50% 40% 30% 20% Corporate Commercial Restr IBRA Organic MfgNmetal Retail MfgText Trans MfgOth Agri MfgP&P USD IDR WC Invest. 54.5% are to Corporate customers 53.5% are Investment loans Primary sectors are: Manufacturing Pulp & Paper Textiles Agriculture Transportation Retail 55.3% are Rupiah loans 32.7% were previously restructured 36.7% were loans purchased from IBRA 10% 0% GAS Backgrnd Sector Currency Purpose * Corporate & Commercial Loans Only 34

37 100% 80% Cat. 2 as% of Total Loans 35 Movement in Special Mention Loans, Q1 00 Q % 60% 80% 60% 40% 20% 0% 40% 35.7% 26.2% 24.8% 15.0% 14.5% 12.8% 12.1% 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 Q1 '04 Q2 '04 Q3 '04 5 Loss 4 Doubtful 3 Substandard 2 Special Mention 1 Pass 20% Cat 2 % 0% Loans by Collectibility Bank Only (%)

38 Q Movement in Category 1 and 2 Loans Category 1 Loan Movements (Rp bn) Bank Only Category 2 Loan Movements (Rp bn) Bank Only ,392 60,994 1,787 1, ,971 1,716 9, ,853 1, Beg. Bal. D/G to 2 U/G from 2 D/ G t o NPL U/ G f rom NPL Net Disburse. FX Impact End Bal. Beg. Bal. Cat. 1 D/G U/G to 1 D/G to NPL NPL U/G Net Disburse. FX Impact End Bal. 36

39 Q Loan Detail*: New Downgrades to Category 2 Loan Profile: Q3 Corp & Comm Downgrades to Cat. 2 loans (Rp 1.64 tn) Bank Only 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Corporate Commercial < 30 1 Day Current Oth<5% Bus Serv Trading Trans Mf goth Constr Mf gwood USD IDR Other Export WC Invest. Restr IBRA Organic Rp 1.64 trillion in Corporate & Commercial loans were downgraded to Category 2 in Q3, or 2.0% of total loans. Of these downgrades to Special Mention Loans in Q3: 66.0% are to Commercial customers 26.7% are current or 1 day overdue Primary sectors in Category 2 are: Wood Manufacturing Construction Transportation Trading 58.3% are Rupiah loans 59.2% are Investment loans 3.2% are Restructured loans 28.2% were purchased from IBRA 0% GAS Days Aging Sector Currency Purpose Backgrnd * Corporate & Commercial Loans Only 37

40 Q Loan Detail*: Category 2 Loans Loan Profile: Q3 Corp & Comm Category 2 Loans (Rp 9.3 tn) Bank Only 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Corporate Commercia GAS < 30 1 Day Current Days Aging Oth<5% Constr Trans Bus Serv Mf gwood Trading MfgNmetal Mf goth Agri Mf gtext USD IDR Other Synd Export WC Invest. Restr IBRA Organic UG to PL NCPL New Bal. 1 to 2 Sector Currency Purpose Backgrnd Move. Rp 9.3 trillion in Corporate & Commercial loans were in Category 2 in Q2, or 11.5% of total loans. Of these Special Mention loans in Q2: 40.1% are Corporate customers 54.9% are current or 1 day overdue Primary sectors in Category 2 are: Textile Manufacturing Agriculture Trading, Hotels & Restaurants NonMetal Mining 55.0% are Rupiah loans 47.4% are Investment loans 61.5% are Restructured loans 29.6% were purchased from IBRA 77.8% saw no change in collectibility * Corporate & Commercial Loans Only 38

41 Other WriteOffs Repayments Restructuring Balance 21,632 22,258 Q3 '04 Deduct Add Q2 '04 39 Movement in Restructured Loans, 1999 Q3 04 IDR bn 22,640 23,987 29,542 25,123 27,423 Deduct Add Q1 '04 Deduct Add 2003 Deduct Add 2002 Deduct Add 2001 Deduct Add 2000 Deduct Add 10, *Others includes partial payments, FX impacts, and fluctuation in Working Capital facilities

42 Q Loan Detail*: Restructured Loans Loan Profile: Q3 Corp & Comm Restructured Loans (Rp 21.6 tn) Bank Only 100% 90% 80% 70% 60% 50% 40% 30% 20% < 30 Current Oth<5% MfgF&B Bus Serv Trading MfgP&P MfgNmetal MfgText Mf gchem Agri USD IDR Program Export Synd WC Invest. Corporate Commercia NPLNC PLNC Rp 21.6 trillion in restructured Corporate & Commercial loans remained in Q3, or 26.6% of total loans. Of Restructured Loans in Q3: 91.0% are performing 69.3% are to Corporate customers Primary sectors are: Agriculture Manufacturing Chemicals Textiles NonMetal Processing Pulp & Paper Trading & Hotels Business Services 53.0% are Rupiah loans 31.1% are Investment loans 10% MfgOth 3.0% improved in collectibility 0.5% deteriorated in collectibility 0% Collect. Cat. 2 Aging Sector Currency Purpose GAS Movement * Corporate & Commercial Loans Only 40

43 Loan Portfolio Sector Analysis Breakdown By Sector, September 2004 (1) No sector accounts for more than 11% of total loans Minimizing exposure to problem sectors including Distribution 3.8% Hotels 3.8% Others 7.3% MfgOth* 12.5% Textiles (6.5%) Retail 4.1% MfgF&B 10.4% Plywood (4.1%) MfgWood 4.1% Hotels & Restaurants (3.8%) Focusing on growth sectors including: Agriculture Mining 4.5% Trans 4.7% Agri 9.9% Natural Resources MfgP&P 5.5% MfgText 6.5% Constr 6.8% Bus Serv 7.2% MfgChem 9.0% (1) Nonconsolidated numbers * Each sector < 4% 41

44 Q Loan Detail: Corporate Loans Loan Profile: Q3 Corporate Loans Only (Rp 41.5 tn) 100% 90% 80% 70% 60% 50% 40% 30% 20% < 30 Current Oth<5% Bus Serv Mining Agri MfgText Trading MfgP&P MfgChem MfgOth USD IDR Other Export Synd WC Invest. Restructure IBRA Restr. Organic IBRA NPLNC PLNC Rp 41.5 trillion in loans were in the Corporate portfolio in Q3, or 51.1% of total loans. Of the Corporate Loans in Q3: 92.2% are performing loans 9.0% are in Category % of Category 2 loans are current in interest payments Primary sectors in Corporate are: Food & Beverage Mfg Chemical Mfg Pulp & Paper Mfg Trading, Hotels & Restaurants 45.5% are Rupiah loans 40.7% are Investment loans 10% 0% MfgF&B 2 to 1 1 to 2 New Bal. 35.9% are Restructured loans 9.4% were purchased from IBRA Collect. Cat. 2 Aging Sector Currency Purpose Backgrnd Movement 42

45 Q Loan Detail: Commercial Loans Loan Profile: Q3 Commercial Loans Only (Rp 33.3 tn) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% < 30 1 Day Current Collect. Cat. 2 Aging Oth<5% MfgChem MfgWood MfgText Trans Constr Bus Serv Agri MfgOth Trading USD IDR Other Export Program WC Invest. Restructured IBRA Restr. IBRA Organic NPL NPLNC DG to NPL PLNC 2 to 1 1 to 2 New Bal. Sector Currency Purpose Backgrnd Movement Rp 33.3 trillion in loans were in Commercial portfolio in Q3, or 40.9% of total loans. Of the Commercial Loans in Q3: 91.9% are performing 16.8% are in Category % of Category 2 loans are current in interest payments Primary sectors in Commercial are: Agriculture Trading Business Services Construction 76.8% are Rupiah loans 36.3% are Investment loans 19.7% are Restructured loans 3.7% were purchased from IBRA 43

46 Q Loan Detail*: Rupiah Loans Loan Profile: Q3 Corp & Comm Rupiah Loans (Rp 44.4 tn) Bank Only 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% < 30 1 Day Current Oth<5% MfgNmetal TradeOth Trans Retail Constr Bus Serv Agri MfgF&B MfgOth Corporate Commercia Other Export Program WC Invest. Restr IBRA Organic NPLNC DG to NPL PLNC 2 to 1 1 to 2 New Bal. Collect Cat 2 Aging Sector Business Purpose Backgrnd Move Rp 44.4 trillion in loans were Rupiah denominated in Q3, or 54.6% of total loans. Of the Rupiah Loans in Q3: 92.6% are performing loans 11.5% are in Category % of Category 2 loans are current in interest payments Primary sectors in Corporate are: Construction Agriculture Food & Beverage Mfg Business Services 42.5% are Corporate loans 28.4% are Investment loans 25.5% are Restructured loans 2.5% were purchased from IBRA * Corporate & Commercial Loans Only 44

47 Q Loan Detail*: Foreign Currency Loans Loan Profile: Q3 Corp & Comm FX Loans (Rp 30.4 tn) Bank Only 100% 90% 80% 70% 60% 50% 40% 30% 20% < 30 Current Oth<5% MfgWood Constr Agri Trading MfgText Mining MfgP&P MfgOth Corporate Commercia Synd Export WC Invest. Restr IBRA Organic NPLNC PLNC Rp30.4 trillion in loans were foreign currency denominated in Q3, or 37.3% of total loans. Of the FX Loans in Q3: 91.3% are performing loans 13.8% are in Category % of Category 2 loans are current in interest payments Primary sectors in Corporate are: Manufacturing of Chemicals Textiles & Leather Pulp & Paper Mining Trading, Hotels & Restaurants 74.5% are Corporate loans 53.8% are Investment loans 10% 0% MfgChem 2 to 1 1 to 2 New Bal. Collect Cat 2 Aging Sector Business Purpose Backgrnd Move 33.5% are Restructured loans 13.5% were purchased from IBRA * Corporate & Commercial Loans Only 45

48 Electronic banking channels rapidly expanding ATM Average Daily Transaction Volume and Value Other Transaction Services Avg Daily Volume (000) Avg Daily Value (Rp Mn) 184, ,259 Debit Cards Issued* (000) SMS Subs. (000) SMS Trans. (000) Internet Bank. Subs. (000) Call Center Trans. (000) 1,114 1,356 1,774 1,800 2,709 6,270 12, , , ,004 88,310 62, Q1 '00Q3 '00Q1 '01Q3 '01Q1 '02Q3 '02Q1 '03Q3 '03Q1 '04Q3 ' ,069 1, Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03 Q1 '04 Q2 '04 Q3 '04 * Debit Cards reintroduced in Jan

49 Credit Card business expanding Mandiri Visa Card Holders and EOQ Receivables Cards (000s) Receivables (Rp Bn) Transferred from GE , Visa Card Monthly Sales by Type of Transaction (Rp Billion) Transfer Balance Cash Advance Retail Q4 '02 Q1 '03 Q2 '03 Q3 '03 Q4 '03 Q1 '04 Q2 '04 Q3 '04 Jan '04 Feb '04 Mar '04 Apr '04 May '04 Jun '04 Jul '04 Aug '04 Sep '04 47

50 Credit Card portfolio quality improving Mandiri Visa Card Delinquency Rates (%) Monthly Chargeoffs, NPLs & Recoveries (Rp Billion) 21.3% 19.3% 16.8% 30 DPD Rp 90 DPD Rp 30 DPD Cards 90 DPD Cards NPLs (90+DPD) WriteOffs Recoveries 13.3% 12.7% 7.8% 12.1% 11.5% 7.3% 10.7% 13.0% 10.8% 7.0% 7.4% 9.5% 3.9% 5.8% 6.3% 3.1% 5.8% 9.1% 8.2% 7.7% 7.1% 5.4% 2.5% 4.6% 5.1% 4.0% 4.8% 3.7% 2.2% 2.4% 4.5% 2.1% 3.4% Jan '04 Feb '04 Mar '04 Apr '04 May '04 Jun '04 Jul '04 Aug '04 Sep '04 Jan '04 Feb '04 Mar '04 Apr '04 May '04 Jun '04 Jul '04 Aug '04 Sep '04 48

51 Bank Syariah Mandiri Branch Network & Customer Growth Third Party Deposits by Type (Rp Billions) Branches Customers (000s) Time Deposit Savings Demand Deposit , Mo. '04 1,578 1, Mo. '04 49

52 Bank Syariah Mandiri Financial Highlights (Rp Billions) Selected Financial Ratios (%) Total Earning Assets 3rd Party Funds Total Financing Extended Net Profit Sharing 5,537 5,054 LDR ROA CAR ROE 17.6% 99.1% PAT 200 3, , % 63.2% 74.6% 66.1% 2, % 91 2,163 1, ,141 1, Mo. '04 4.4% 39.3% 3.6% 3.3% 3.6% 20.9% 2.4% 10.9% 1.0% Mo. '04 50

53 Mandiri Sekuritas Marketable Securities Portfolio Breakdown (Rp Billion) Financial Performance (Rp Billion) Other Mutual Funds Corporate Bonds Shares Govt. Recap Bonds 161,913 47,920 Assets Equity Profit Operating Income Operating Expense 170 1,542 Trading Gains 440,914 2, , ,328 1, ,602 64, ,957 67, ,544 18,410 27, Mo. ' Mo. '04 51

54 Compliance & Discipline Disciplinary Actions Taken (# of Employees) & Total Potential Operational Losses All Sources Recent Significant Fraud Proceedings Notification Warning Termination Potential Losses (Rp Bn) Branch/Year: Jakarta Tanjung Priok, 2002 Employee: ex Officer (CSO) Potential Losses: Rp b Recovered: Rp 2.0b + assets Court Judgment: 17 year jail term Rp 10b penalty Repayment of Rp 40b Currently on appeal to the Supreme Court Q Branch/Year: Jakarta Prapatan, 2002 Employee: ex Spoke Manager Potential Losses: Rp 120b Recovered: Rp 40.3b + assets Court Judgment: 15 year jail term Rp 5.1b penalty Repayment of Rp 77b Currently on appeal to the Supreme Court Branch/Year: Pontianak, 2002 Employee: ex Hub Outlet Manager Potential Losses: Rp 95.8b Recovered: Rp 95.7b Court Judgment: 4 year jail term Rp 200m penalty No appeal 52

55 Bank Mandiri at a Glance 53

56 Bank Mandiri s Managing Directors and SEVPs (Standing, left to right) E. C. W. Neloe President & CEO Lee, Kuan Keat CFO & SEVP, Finance & Strategy Nimrod Sitorus Managing Director & SEVP Corporate Secretary, HR & Compliance I Wayan Agus Mertayasa Managing Director & SEVP Risk Management (Sitting, right to left) I Wayan Pugeg Deputy President Director & COO Zulkifli Zaini Managing Director & SEVP Distribution Network Omar Sjawaldy Anwar Managing Director & SEVP Consumer Banking Johanes Bambang Kendarto Managing Director & SEVP Treasury & International Ventje Rahardjo Managing Director & SEVP Commercial Banking Andreas E. Susetyo CTO & SEVP Information Technology M. Sholeh Tasripan Managing Director & SEVP Corporate Banking 54

57 Organization Chart 55

58 Staffing and Distribution Network Growth 19,606 19,299 18,807 18,397 18,016 17,735 1,184 17, H1 '04 Q3 ' ,160 4,000 4,716 5,033 5, H1 '04 Q3 ' H1 '04 Q3 ' ,559 2,022 2,071 2, H1 '04 Q3 '04 Employees ATM Network Domestic Branch Network ATMLink Network

59 Internationally Recognized as Indonesia s leading Bank Best Domestic Commercial Bank 2004 Best Domestic Bank 2003, 2004 Best Domestic Commercial Bank 2002, 2003, 2004 Best Local Bank 2001, 2002, 2003, 2004 Bank of the Year, Indonesia 2001, 2002, 2003, 2004 Best Indonesian Bank 2001, 2002, 2003 Best Trade Finance Bank Southeast Asia 2004 Best Trade Finance Bank 2001, 2002, 2003,

60 Bank Mandiri Reviewed Financial Statements Q

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70 Presentation Notes 68

71 BROKERAGE ANALYST TELEPHONE ABN AMRO Asia Securities Indonesia Manoj Nanwani BAHANA SECURITIES Mirza Adityaswara CLSA LIMITED Ervin Hardiman CS FIRST BOSTON Bill Stacey DANAREKSA SECURITIES Kim Kwie Sjamsudin DBS VICKERS SECURITIES Ferry Hartoyo DEUTSCHE VERDHANA SECURITIES Raymond Kosasih FOXPITT, KELTON Hugh Lee G.K. GOH INDONESIA Tjandra Lienandjaja J.P. MORGAN ASIA Rizal Prasetijo KIM ENG SECURITIES Mardesiana MACQUARIE SECURITIES INDONESIA Liny Halim MANDIRI SEKURITAS Darmawan Halim MERRILL LYNCH Arief Koeswanto MORGAN STANLEY DEAN WITTER Jenny Ma UBS Joshua Tanja The equity analysts listed above actively follow Bank Mandiri, but not all have issued research reports or formally instituted coverage. 70

72 71 For Additional Information: Please refer to our website at Or Contact: Nimrod Sitorus Corporate Secretary Tel: (6221) Fax: (6221) Jonathan Zax Head of Investor Relations Tel: (6221) Fax: (6221)