Earnings call transcript: Bank Mandiri Q3 2025 sees profit dip, digital growth

PT Bank Mandiri (Persero) Tbk, with a market capitalization of $25.17 billion, reported its Q3 2025 earnings, revealing a net profit decline of 9.2% year-on-year to IDR 37.7 billion, while net interest income grew by 4.9%. The company’s stock price fell by 1.76% to IDR 4,550 following the announcement. According to InvestingPro analysis, the stock appears undervalued, currently trading at an attractive P/E ratio of 7.77x. Despite the profit drop, Bank Mandiri’s digital initiatives and loan growth outpaced industry averages, signaling a strategic pivot towards digital platforms and sustainable banking. InvestingPro data reveals the company has maintained strong revenue growth of 5.67% over the last twelve months, with 8 additional exclusive insights available to subscribers.

Key Takeaways

• Net profit decreased by 9.2% year-on-year to IDR 37.7 billion.
• Digital platform users grew significantly, with new launches bolstering customer engagement.
• Loan growth of 11% surpasses the industry average of 7.69%.
• Stock price fell by 1.76% post-earnings announcement.

Company Performance

Bank Mandiri demonstrated resilience in its loan portfolio, which grew by 11% year-on-year to IDR 1,764 billion, outperforming the industry average loan growth of 7.69%. The bank’s focus on digital transformation is evident with the launch of platforms like Livin’, which has attracted 70,000 users. Despite these advances, the net profit decline reflects ongoing challenges in managing operational costs, which rose by 25.3% year-on-year.

Financial Highlights

• Revenue: Not specified in detail.
• Net profit: IDR 37.7 billion, down 9.2% year-on-year.
• Net interest income: Increased by 4.9% year-on-year.
• Non-interest income: Increased by 7.97% to IDR 33.2 billion.
• Net Interest Margin (NIM): 4.89%.

Outlook & Guidance

Bank Mandiri maintains a positive outlook with expectations of loan growth around 8.9% year-on-year and NIM guidance between 4.8% and 5.4%. The bank anticipates improved profitability in Q4 2025 and aims for a return on equity (ROE) of 20% in the near future. The company currently offers an impressive dividend yield of 10.84% and has raised its dividend for four consecutive years, according to InvestingPro analysis. For deeper insights into Bank Mandiri’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. Revenue forecasts for FY 2025 and FY 2026 are USD 9,362.46 million and USD 10,259.15 million, respectively.

Executive Commentary

Ahmad Badruddin, Risk Director, stated, "We are executing our strategy to become the Indonesia Sustainability Champion," emphasizing the bank’s commitment to sustainable banking practices. CFO Mouda Pita expressed confidence in maintaining healthy asset quality through 2025.

Risks and Challenges

• Rising operational expenses, which increased by 25.3% year-on-year.
• Maintaining competitive advantage in digital banking amid rapid technological advancements.
• Potential macroeconomic pressures affecting loan and deposit growth.

Q&A

During the Q&A session, analysts inquired about the IDR 55 trillion liquidity injection and the bank’s dividend payout ratio, which is expected to be around 60%. Executives also discussed strategies for operational expense normalization and the performance of digital platforms.

Bank Mandiri’s Q3 2025 earnings reflect a strategic focus on digital growth and sustainability, despite the challenges of rising operational costs and a declining net profit. The bank remains optimistic about its future performance, supported by strong loan growth and digital platform expansion. With an overall Financial Health score of FAIR from InvestingPro and consistent dividend payments for 23 consecutive years, the bank demonstrates resilience in maintaining shareholder value while pursuing growth opportunities.

Full transcript - Bank Mandiri Persero Tbk PT (BMRI) Q3 2025:

Laurensius Teiseran, Executive Director, PT Bank Mandiri (Persero) Tbk: Good evening, everyone, and welcome to PT Bank Mandiri (Persero) Tbk’s third quarter for the five-figure operating planning. Thank you all for taking the time to join us today. My name is Laurensius Teiseran, and I’m the Executive Director. Joining with me this evening are Mouda Pita, our CFO, Dr. Kim, our Operations Director, and Ahmad Badruddin is our Risk Director. Before we get started, please feel free to download both our presentation materials and financial statements. They’re available on the investor relations webpage of Bank Mandiri. After the presentation, we’ll open the floor for the questions. You’re welcome to raise your hand through Zoom, and we’ll take the questions one by one. If you prefer, you can also send your questions in the chat box or email, which we’ll help you address as many as possible during the session or a follow-up afterward.

When asking a question, please remember to mention your name and the city you’re interviewing for the questions. Once again, thank you for being here, and I would like to hand over the presentation to Mouda Pita, our CFO, so that can be delivered.

Mouda Pita, CFO, PT Bank Mandiri (Persero) Tbk: Thank you, Ahmad. I will now begin the presentation with a brief overview of the macroeconomic and management in PT Bank Mandiri (Persero) Tbk. As of September 25, the economy remained relatively stable in the third quarter, with GDP growth expected at around 5%, supported by stronger investment activity. During the quarter, Indonesia maintained its growth rate at 10%, delivering a total pre-shoring cut of 0.75% between June and September, bringing the bear market down to 4.75%. We expect the bank to maintain their profit strength, with one additional rate cut anticipated before the end of the year. For the performance metrics, we continue to outperform the industry in loan growth, with a retention of 11.6% year-on-year versus the industry growth of 7.69%.

On the deposit side, we saw an improvement in the liquidity in the environment reflected in the industry deposit growth of 8.5% year-on-year, while our deposit grew strongly at 12.3% year-on-year. The improvement is driven by Indonesian profit points in management and accelerated government spending during the period. Lastly, despite ongoing macroeconomic pressures, our asset quality remained robust, with NPL ratio at 1.03%, well below the industry average of 2.28% in September 2020. Now, we will move on to discuss the key pricing challenges during the quarter. Up until September 25, we observed that the loan improvements were much to perform, supported by a more optimized deposit pricing mechanism. Our asset quality also remained resilient despite ongoing macroeconomic pressures, reflecting prudent risk management and continued improvement in the FDI formation. We also delivered strong monetary income.

The growth during this quarter supported by a recurring fixed growth of 23.6% quarter on quarter and recently increased growth of 24.4% quarter on quarter, further strengthening our revenue. On the balance side, we saw strong unknown yield environment coming from consecutive loan pricing and a declining debt market environment, while our ability to price higher yielding loans remained limited due to monthly funding costs and liquidity conditions that allow us to maintain stability. Retail loan growth remained modest, with 5% year-on-year growth in 2025. Hopefully, the recovery will maintain a prudent stance amidst short-term retail economic conditions. We expect retail loan growth to improve in the fourth quarter, although the growth will remain selective and focused on spending-based strategies. OpEx growth remains elevated, continuing from the previous period due to the form of the adjustment.

However, our internal NDPLC initiative of maintaining consolidated OpEx growth stable at 25% year-on-year with a consolidated cost-to-usage ratio maintained at 44.6%. As a result, in September 2025, our consolidated loan growth grew by 11% year-on-year, above our guidance level. Our net interest margin also made it within our guidance level, with September 2025 at 4.89%. Our market sharing remained ample with current level at 73 basis points, better than our guidance of 80 to 100 basis points. As of September 2025, we recorded a solid consolidated loan growth of 11% year-on-year, supported by an accelerating quarterly increase of 3.71%. The expansion was primarily driven by goods and services, which is 14.7% year-on-year, while retail loan growth remained modest at 4.65% year-on-year. During the quarter, corporate funds grew strongly by 3.19% quarter-on-quarter, followed by commercial loans at 1.92% year-on-year.

Growth, which is reflected in, was directed towards the meal sector, particularly energy and water, downstream related to nursery and telecommunication, in line with our commitment to support sustainable economic growth. Given the soft macro environment, we have the biggest impact risk growth in the broad and retail segment to focus on our strategic portfolio. In the retail segment, we are focusing on the BTG retail segment, with micro end-to-end growth at 2.89% year-on-year, and was increased by 0.78% year-on-year. Meanwhile, we continue to prudently manage our exposure in our loans, negative 3% year-on-year, FM loans negative 1.7% year-on-year, and payroll loans negative 0.5% year-on-year as part of our growth strategy under current macro conditions. Going forward, we expect retail disbursements to gradually improve in the fourth quarter of 2025, supported by stronger demand equity, while maintaining a tighter focus on ecosystem management segments.

According to the 2026, we expect slightly stronger overall loan growth, driven by improvement in macro segments, stronger expectations in the health sector, and better financing along key value chains. Now, let us move on to profit and loss metrics of the day. Overall, in September 2025, our net profit reached IDR 37.7 billion, down by 9.2% year-on-year, while PTOB demand stories at 51.9%, down by 7.4% year-on-year. Our net interest income helped us encourage growth of 4.90% year-on-year. Non-interest income increased 7.97% to IDR 33.2 billion, and revenue grew by 4.79% year-on-year, despite OpEx growth of 25.3% year-on-year. On the lending side, we maintained a decent baseline. Our consolidated loan portfolio grew by 11% year-on-year to IDR 1,764 billion. In parallel, we continued to strengthen liquidity with capital deposit rising 5.90% year-on-year to IDR 1,305 billion, supported by fixed stability.

Increased liquidity is contributed to our core basis points higher in total deposits compared to the previous quarter, bringing it down to 2.40%. On the other hand, loan yields stood at 7.67%, resulting in a revenue of 4.89% in September 2025. Cash deficit remained a key sign. Cost of care improved to 17.25%, reinforcing asset quality and overall balance sheet resilience. Growth to retail markets was at 2.02%, while economically keeping performance at 18.4%, underscoring our consistent ability to deliver healthy and sustainable returns amidst a challenging operating environment. Next is our margin performance. Our NIM remained resilient through the third quarter of 2025. As of September, NIM stood at 4.89%, which is not too stable compared to the 4.92% in the previous quarter, despite some pressure from the media.

Loan debt margin declined to 8.96%, mainly due to increased competition in retail segments and a broader decline in cash flow. The cost analysis of the environment still continues, but our monthly figure stood at 8.21% in September 2025. Our cost of loans improved, with 9/1/2025 at 2.43% from 2.46% in the first half of 2025. The improvement continued as our monthly September 2025 cost of loans stood at 2.33%, supported by better deposit risk management and a reduction in retail deposits. While we continue to see soft loan yields, the operating profit trajectory of our cost of loans should support the margin stability for the remainder of the year. Consequently, we expect NIM during this period to maintain our 4.8% up to 5.4% year-on-year guidance range.

Going forward in 2026, we see additional loans from cost of loan improvements, as rate normalization progressed and asset-related deposits continue to strengthen our funding base. Liquidity conditions also show signs of stabilization, providing a supporting backdrop for NIM performance. We remain encouraged by the ongoing improvement in funding costs and are continuously optimistic that when yields raise or reverse, there would definitely be a price potential for NIM next year. Let’s answer on non-interest income and deductible spending. On September 25, total non-interest income grew by 7.97% year-on-year, driven by strong treasury income and recurring income from both digital and non-digital channels, which delivered double-digit growth. We expect the non-interest income growth trends to strengthen further toward year-end, supported by sustained momentum in recurring income and the realization of our public of retail plans.

Approximately 40% of total full-year cash income is expected to be realized in the fourth quarter of 2025, paralleling from the 2020 segment. Looking ahead to 2026, we anticipate continued solid growth in non-interest income, suggested by the monetization of our digital initiatives, particularly from LinkedIn and Webex. This development is expected to serve as an incremental growth driver beyond the recurring PPE, reinforcing our long-term focus on digital ecosystem value proposition. On the cost side, we saw an improvement in OpEx, as operating expense growth declined by 1.34% year-on-year. This reflects our active ME20 network and the gradual normalization of operational activities, resulting in our consolidated share to remain reasonable at 44.67% in 9/1/2025. Overall, share and OpEx growth are expected to remain on the current level for the remainder of the year.

With normalization underway, we expect OpEx growth to decline to a slightly lower ratio, while share is projected to normalize to the 42% range on consolidated basis. As of September 2025, loan average improved slightly to 6.48%, while personal credit remained stable at 73 basis points, reflecting a decent growth and well-managed portfolio. Loan average remained strong at 44.7% on a consolidated basis and 42.5% on rate only, both above pre-COVID levels, providing a solid loan against non-credit rate. Our NPL coverage also remained robust, with debt-only coverage at 271% and consolidated float rate at 243% as of September 25. We remain confident in sustaining healthy asset quality through 2025, supported by continued improvement in rate and payroll formation as of September 25. Ladies and gentlemen, allow me to walk you through our consolidated financial highlights.

As stated earlier, our loan portfolio grew by 11% year-on-year, supported by stronger loan debt credits in the first quarter, resulting in an overall asset growth of 4.3% year-on-year. On the lending side, the total deposit increased 13% year-on-year, outpacing the industry deposit growth of 8.61%. Our asset growth remained solid, with 5.97% year-on-year, while current deposit grew by 32.8% year-on-year, to support our sustainable liquidity strategy. Looking ahead, our 2025 loan growth remained on track within the guidance range, supported by ongoing growth in the total segment and steady recovery in the 2020 segment. Entering 2026, we anticipate a more supportive demand environment in 2025, reflecting market recovery momentum, accelerated government investment, and more accommodative liquidity and rate environment. Now, moving to the P&L side, total interest income grew by 10.5% year-on-year, with interest expense growth of 22.2% year-on-year, resulting in a maintained NIM growth of 4.20% year-on-year.

Our non-interest income grew by 7.97% year-on-year, supported by growth recurring in non-currency, bringing total ROE growth to 4.78% year-on-year. On the cost of excess, the debt limitation operating expense increased 25.4% year-on-year, leading to a 7.42% year-on-year decline in the PPOP. Bottom line, our 9/1/25 net profit declined by 10.2% year-on-year to IDR 37.7 trillion. Looking ahead, we expect profitability to improve gradually to quarter by quarter margins, encouraging non-interest income, and normalizing cost growth. With this factor, we remain confident that our ROE will improve, progressively moving toward the 20% target in the near future. We maintain our upper quarter-wide guidance for the year 2025. We maintain our monthly guidance at 8.9% year-on-year, supported by expectations of stronger loan demand in the remainder of the year, underpinned by higher government spending and allowing the industry to continue to build its politics and spend.

We are optimizing our portfolio and increase profitability by expanding investment loans relative to working capital loans. In addition, we continue to align loan growth with deposit expansion through our loan-to-loan deposit strategy, ensuring prudent liquidity management. Our focus remains on the ecosystem management segment, and second, consistent with our internal portfolio guidelines. With improving cost of loans in 9/1/25, with expectations of further system-wide liquidity enhancement, we anticipate NIM to grow near within our guidance range. On asset quality, we expect net NPL to continue to decline, supported by our prudent approach in the retail segment and our valuation growth strategy. According to the portfolio, we expect cost of value to remain ample for 2025. Now, I would like to hand the presentation to Pak Danis, our Risk Director, to explain more about the asset quality. Please have a seat.

Danis, Director, PT Bank Mandiri (Persero) Tbk: Thank you for your notice, ladies and gentlemen. We will now move to compare the numbers on our asset quality as of September 2025. In addition, we have our consistent loan growth strategy, assessed asset quality remaining resilient, reflecting decent growth rate amidst the trending macro and growth. In September 2025, loan average improved to 6.48%, supported by selective growth in specific sectors within the wholesale segment, driving targeted expansion through our ecosystem management and retailing. Going forward, we expect asset quality to stabilize at around 7.7% year-on-year, within the allocation management of the wholesale and retail segment. We remain well positioned with consolidated loan average of 44.7%, remaining NPL coverage ratio of 233%, with a net of 5 macro engineers percentage. Consequently, our asset quality has increased to 0.73% in September to our four-year guidance.

Moving ahead, we are confident in maintaining our ecosystem value and achieving our global consumer demand and the spirit of our monetary strategy, which drives our quality growth. Lastly, let us discuss our capital deficit management. As of September 2025, the monetary risk capital deficit ratio of 1 improved to 19%, primarily reflecting a higher compliance and increase of ISO. We can also begin to maintain cost and key volume in the range of 18% to 20% range from the year to the next term, while maintaining capital expenses in sustainable growth. Now, I would like to ask Ahmad Badruddin, our Risk Director, to continue to take the question on our digital and ESG performance. Please come to me.

Ahmad Badruddin, Risk Director, PT Bank Mandiri (Persero) Tbk: Thank you, Danis. I think what we’ve had here for the last week can be too vague where we started to align some of the directions that have been mentioned by Mouda Pita, in particular, one where we are driving all the transactional capabilities through all the new initiatives. The first one that I’m going to update is the performance of Livin’. We’re very encouraged to say that we have a convenient position looking at the primary network to all our retail transactions. The important piece online is the double-digit growth throughout the transactional platform for retail clients. I can see that the users are continuing to grow toward double-digit, with users approaching 70,000. Partly that’s related to transactional frequency and value. You can follow that from the bottom numbers, our clients are highly engaged.

In my view, with numbers that are north of 90%, touching in some cases close to 100%, this is almost zero in the way we drive the transactional platform. I think towards the end, as Lisa mentioned earlier, the actual gain for this is going to be equal to all these analyses, where we can see eight of the external saving analyses already linked to Livin’. More importantly, we can see the strong growth in two ways, as you can see on the chart. Next, just since from a new perspective, we have pretty much built strong use cases and features so that we can answer all the expertise, statements, and milestones. It really has become the spot for daily drive for our clients. It’s the model on the left that we’ve seen before and also have grown positions to become a strong transaction capability to gain significant traction.

I’m just going to name a few here where the QR payments, for example, has likely surprised ourselves where the growth has been phenomenal from where we were before to where we are today, even this year. It has been about 27X. Livin’ Market has taken off. We have seen a 4.5% growth. Major funds continue to respond with our investment capabilities and our responses. It’s quite important on the retail lending side, and we see also as an analyticist, we see how too that’s going to be growing significantly through our ecosystem. Cross-border references, we are probably one of the most complete. It’s grown significantly higher, almost 500, with almost complete currencies that can serve the broad currencies that we have served our clients. Next, I think you know where the slide is underrated for some clients, and what we are currently involved in.

If we break down the client base that we have, what’s really driving the CFD income is obviously digital transactions, hence the features that we build. You can see that as declines grow stronger, the users, as we move to the right, with what we call from the committed, consistent, and export side, we can see that the more they are more engaged with us, they become more committed, and they drive the NPI strongly. This is for us building this super app, and it’s to continue to push so we can see more committed clients that are using the app to support their company and will continue to strongly to the CFD income that we continue to see double-digit growth since the launch of the platform. Next, I’m just going to move to the other side, what we’ve discussed earlier, as being regional for the end users.

Now, we’re going to move to a little merchant where on the other side of the middle of the users, these are the merchants. As we know, Indonesia has a well-timed that has about 60% to 70% of the digital in Indonesia. A little merchant since the launch in June 2023, we have now touched 300 users. This is actually complementing the range that we have in the middle of our users. Now, we’ve moved to merchants to provide the right solutions, and the cost onboarding, free subscription, now real-time settlement, so that for micro-players, they can see their money is really in their accounts so that payment is done.

The activities have decreased significantly, as you see in these two charts, but more importantly, I think now we can confidently say that the transactions have doubled, almost doubled at this point, more than X of our existing industry services that we have opened in the market. This is showing great traction for our merchant side, which is where we are gradually leveraging the ecosystem. Next, I’m going to move to our two outside. This is our platform for corporates. The same way that we’ve been Livin’, we have become the largest retail platform in the country. More than the last, I think, we are touching almost IDR 19,500 trillion in the nine months, and this is continuing the double-digit growth as well. The current account balances continue to grow for our wholesale players. Next, again, I think similar concept to Nike and our concept to LinkedIn.

What we want to drive is going to be the engagement in a similar fashion that we’ve been living. Hopefully, after LinkedIn, we have the same concept and use cases and the experience that we built. What’s quite important to note here is the more engagement we see, i.e., what we call the highly engaged clients that we have, the balances that we see are significantly higher. Hence, this platform is going to continue to improve, where we’re going to look for balances with high engagement. We have a complete set of platform where we provide liquidity management, project collection, even now, it’s a recording platform. I fully believe, as we’ve reported before, our corporate platform has been benchmarked to the best Google platforms that are offered by those banks.

Next, I think the last launch or launch of features that we did were these are two important products where, in our current launch, clients can do some deposit creation itself without even accessing the bank. If there’s a need for more comparison, check in with deposits. You know, there’s a new group that we see strongly here. Clients can do it straight away. This is going to be very seamless and easy to create to support our clients. Next, we’re going to pull you back again, linking all of the different platforms that we have with. Imagine our wholesale, as you all know, as we can, we are a wholesale player with 24/7 all the way down to people’s site.

We have the ability now to do that on a full-time with merchant, where all of our smaller merchants can actually be linked to the larger corporate for their needs. For example, if they have a CC, they can do their offerings and payments there. LinkedIn and YouTube and even merchant, again, these are being combined, and you can even push for different invoices and all that, get to different merchants. Similarly, WhatsApp to LinkedIn users, you can do connections and all that. What we’re really saying here is all of our platforms that we’ve built, we have different access. They’re within a platform where we can see the usage for our clients to make their usability increase easy. Next, I’m going to show that I think, you know, we’re going to talk about technology. We’re also talking about AI. We have progressed very strongly. We run certain technical data.

We have quite a different data record. We have very different data scientists that we have mentioned before. Those data scientists are driving three things in the bank: productivity improvement, company growth, and the correct management. These are the right use cases that AI, machine learning, and data analytics are driving. What is quite important, we’ve been recognized externally, where our investment to AI and machine learning has been aligned with the practices and adopted. That would be the end of my update for this call. I’m going to move quickly now to ESG. ESG has been a core key for the bank, and what’s important, I’m going to also update that we have been recognized by the international stakeholders, especially for our ratings, such as analytics, where we have significantly improved the rating from previously meaningful rating from 7.6.

As far as the support is concerned, down to a 9.5, which is on-trend rating. That means, I think, in a span of a very short period of time, with our consistently executing strategy, we have today become the lowest ESG rating compared to all the other clients in Indonesia. You can see from the chart. We are executing, obviously, using our strategy where we want to be consistent with our vision to become the Indonesia Sustainability Champion. That framework, we execute it through sustainable banking, sustainable operations, and sustainability in joint banking, and governance, obviously. You can tell that, in the last, all these activities where we’ve done, that’s what’s the vision to lowering the risks to a low score now. Next, please have a brief touch in some of the sustainable banking perspective. My name is Mr. Mithra.

Our sustainable asset growth and portfolio has shown a strong 8.4% year-on-year increase to IDR 320 trillion. That’s a high for the new portfolio, which is showing a very strong uptake of 4%, closing trailing higher. This is again our commitment to improving the ESG portfolio of the bank. The clean portfolio, bank-by-yearly actually holds even the least in the green portfolio as compared to the three other banks represented on the board. As far as the green portfolio as well, our market share is the highest. I’m just going to move quickly to the last page. We want to say that from the sustainability of operations and sustainability in joint banking, we continue to drive improvement, and not only that, but also on the gender and diversification, we remain committed to delivering all the commitments that we have put up before.

With joint banking, we have absolutely in line with our SDGs for sustainable goals. We have committed with the promotion of the inclusivity using all the digital capabilities that we have in the corporate market. That would be the end of my presentation. I’m going to back to slides for the benefits, and thank you.

Laurensius Teiseran, Executive Director, PT Bank Mandiri (Persero) Tbk: Great. Thank you, and thank you to all the speakers for the opening. We’re now moving to the Q&A section. I know some of you are going to type the questions in the chat box that we created. You can ask the questions live as well. There are several questions coming from, I think, Jason Morgan. I’ll ask if you could ask the questions. I’ll be briefing you. Thank you so much.

Hi. Yeah, thanks for allowing me to ask questions. The first question is on the liquidity that came in. How much was lent out of?

Yeah, can you hear me well now, Lau?

Yes, I can.

All right. Great. The IDR 55 trillion liquidity that came into the bank, how much was lent out? The remaining which was not lent out, where has that money been deployed? That’s the first question. I’ll go one by one.

Okay. The IDR 55 trillion liquidity injection right now as a status on agreement is set at the full outstanding. We can use the IDR 55 trillion to dismiss our loan right now. The duration of this IDR 55 trillion is, usually our finance says that it will be six months, and we grant it as a deposit on-call. Deposit on-call is on the deposit for criteria in our report on the fund. This is the reason why our time deposit increased significantly as this report was done. The risk is around 3.3%, which is more than 3% if we have a risk level is 86 months from the MMA. The liquidity injection, we already disbursed around 70% of, the 50% already disbursed, and the majority goes to the real sector, which is including energy, electricity, photograph protection, and the brand.

Right. When you say deposit on-call, are you receiving any interest on that, or you’re not receiving any interest on that?

That’s what it stands for, so I will actually receive, on-call $10,000. I do have to talk about the loans. Basically, that’s actually a big market, which is actually in the 70% of the disbursed. There’s a checking that is still sitting in the balance sheet with the bank. It’s been 3.8% across the funds, which is not a bad thing considering that we have a lot of corporate rates that are actually testing us. That means we’ve hired a company for 8%.

I understand that. You are paying 3.8% on that, but that money, where have you kept it? The 30%, which is not lent out.

No.

Let’s say about IDR 20 trillion.

Yeah. It’s not a huge thing. It’s not that we can afford it. We actually do have a significant amount of marginal interest to move that money to. Technically, yes, we need to talk about more. We are constantly trying to make it as much as possible so that the liquidity doesn’t sit on negative carries.

Right. Hopefully, you are unwinding some of the higher cost deposit. Okay, thanks for that.

Yeah, we are.

Yeah, yeah. Makes sense. Thanks. Thanks for that disclosure on the September month-to-date yield and cost. That is very useful. Second question.

The question is, what’s the margin for our digital marketing market share in terms of September?

Yeah.

I can speak now instead of that in the slide.

Thanks. Second is on LDR. If I look at your NSFR number, that has already gone down to 110. If I look at last 5-10 quarters, 109% NSFR is where you tend to bottom. The question is, can LDR move up meaningfully from here, or probably not by, let’s say, for December quarter?

By December, our guidance is around 93%. In September, we want to make it about 100%. The reason why we want to keep 93% is because we want to balance between the liquidity condition and the cost of funds. The IDR 55 trillion can reflect. We can use the IDR 55 trillion, for your 3.8%, to replace our pre-carry deposit. We still want to maintain 93% by the end of this year.

Great. Thanks, Ibu. Last one, the NPL coverage guidance is for 230%. Shall we assume that you will use the excess loan loss reserves and get NPL coverage ratio down to 230% by the end of this year?

230% is on the, this is the longer term. Our guidance is, in terms of cost of credit, we want to make it 80 up to 100%. If we, sorry, go ahead. 80 up to 100 deployment. Based on our assessments, we do not expect any surprise on the NPL side by the end of this year. We can maintain the current level by the end of this year, which is about 250%. Yeah, about 250% higher.

Great. Thank you, Ibu.

I guess 80 up to 150 points.

Yeah, thanks. Those are the only questions.

Thank you. Yeah, I think there’s a question in the chat box from EOB Sebastian on the question about the IDR 55 trillion initial liquidity. I think that’s the one answer to that question. Let’s see if that’s the end. Okay. I think there was an extra follow-up question as regard to the IDR 55 trillion liquidity disbursement. That’s something that we’re not going to change, our temporary criteria. Maybe you can update that one in the update on the slide.

Yeah. In terms of the exercise and honorary expansion, there is no change. We still focus on our length of portfolio guidelines and our risk assessment also. What is the difference this time? By the IDR 55 trillion that are already in our balance sheet, the liquidity injection can lower our cost of funds. It helps our strong loan growth.

Great. Thank you. I think we have a question coming from Jayden Vantarakis and Marcus from Macquarie. If you could please pass the question live, that would be appreciated. Thank you.

Speaker 1: Hi, Lau. Hi, management team. Can you hear me okay?

Laurensius Teiseran, Executive Director, PT Bank Mandiri (Persero) Tbk: Yes, we can hear you.

Speaker 1: Okay. Great. Thank you very much for the opportunity. I just wanted to understand a little bit better on the quarter-on-quarter movement in the operating expenses. It looks like there was quite a large pickup in employee-related, both at the bank and the subsidiaries, and the promotion expenses were down. It looks like the overall cost was sort of stable. Can you give us some background as to why the employee expenses were taken at this time? What’s your view on absolute costs as we get into the year-end and also early next year? Will we see the normalization we talked about last time? Thanks very much.

Our Q1Q, yeah, we did, we do a lot of, as you said, the equity clients. Remember that the Q number is one time. The number is, on the first time. After, quarter on quarter, month on month, we will normalize all of the costs in terms of import.

Laurensius Teiseran, Executive Director, PT Bank Mandiri (Persero) Tbk: Yeah. Maybe just to add, you know, within, basically, if you look at the quarterly trend, Jason, you’ll see that there is, if somebody can give it here to the other trend, you’ll see that there is a Q1Q growth on the personal expense, but, you know, okay, we’ll update the Q1Q growth on the personal expense to up to 7.8%. They’ll also decline in the NPA and other expense, 80% and 45% Q1Q. This, something that I mentioned is related to the one-off. The one-off that essentially came from usually capitalized costs across, you know, a certain period of time that needs to be rationalized entirely in 2025. In the second quarter, a bit of that came from Q&A and other expense. In the third quarter, there is part of that coming from, you know, the personal expenses.

In general, you know, we would suggest to look at the nine months from the fall and the term to at the end of the year, where we want to keep the total OPEX growth of 25% stable up until the end of the year. This will normalize next year, which means that the OPEX growth next year can be cut to zero or up to negative depending on the situation. OPEX will be, you know, will be down by 24 in 2024. We’ll be happy in terms of growth in 2026.

Speaker 1: Thank you very much, Lau. That’s clear. 25% through to the rest of the year, and then we’re seeing some normalization. Thanks for the guidance.

Laurensius Teiseran, Executive Director, PT Bank Mandiri (Persero) Tbk: Thank you. We have a question coming from Linda from Main Stream. If you could please pass the question live so that we can proceed. Thank you.

Yeah. Yeah. Hello. Thank you, Board of Management, and Lau. I just want to ask with regards to KDMP. I know there are still a lot of unclarity. It’s not as yet clear, but I just want to know whether you have any inkling with regards to the disbursement timing, as well as the borrowing rates and the cost of fund and the cost of credits. Yeah, as there are a bit of noises on the ground with regards to that. Thank you.

Thank you, Linda, for that question. Unfortunately, I guess it’s related to KDMP at the moment. It’s still under discussion. We’ll wait and see the development of the progress and discussion with regards to the KDMP, and we’ll update the list when that comes in detail and finalize the format of the program.

Sorry, just to follow up on that, for this year, is there any direction so far?

No. Direction in terms of?

In terms of the amount disbursed that has to be disbursed for this year?

There’s a direction to discuss and get a dialogue regarding the program, and what’s in the context of disbursement and, you know, risk assessment and all other events and basics that are discussed. All of that is a part of the still undergoing discussion that we mentioned earlier.

Okay. Thank you, Lau. I’ll just wait for your updates then. Thank you, Board of Management and Lau.

Thank you. We are waiting for you as well as we can finalize all that this morning. Thanks. Making sure, I think we have a question from the inside. Melissa, can you answer directly?

Speaker 7: Hi. Thank you very much for taking my questions. I just have two questions. Firstly, on your margins. We saw some news article regarding government want for you to push down in terms of lower loan yields. I think they talk about at the BI meeting as well for the transmission to happen. They also talk about certain sectors where if you cut the yield, you can have lower in terms of your triple R.

Laurensius Teiseran, Executive Director, PT Bank Mandiri (Persero) Tbk: We’re able to hear the questions here on the next sheet.

Speaker 7: Okay. Can I try again? Can you hear me?

Laurensius Teiseran, Executive Director, PT Bank Mandiri (Persero) Tbk: Yes, we can. Yes.

Speaker 7: Okay. In terms of margins, how do you think of it given government’s push to lower the loan yield, as they inject the liquidity? Secondly, there’s also articles out regarding, like, you know, if you lower loan yields for certain segments, you get triple R relief. How would that, you think, impact your NIM going forward? Are you able to control it with lowering deposit costs at a much faster pace? In my second question, in terms of your dividend, I guess, you know, if we look at your numbers, in terms of your net income today, it’s down. We know that you won’t be paying out as much as you did last year given that that’s not, you know, that’s that kind of capital-consumptive.

In fact, what do you think you have to do in terms of your payout range this year, so we can get a sense of where DPS will be.

Laurensius Teiseran, Executive Director, PT Bank Mandiri (Persero) Tbk: The second question was about dividends. That also just improving?

Speaker 7: Yes, dividend. In terms of your dividend payout ratio for this year, given your net profit is in decline.

Laurensius Teiseran, Executive Director, PT Bank Mandiri (Persero) Tbk: I think the main argument is that one of the reasons is that we need to be cautious and conservative in setting up a range, which I think is 4.8%. We want to hold that deferred range because we still want to be also conservative here. I think the main one that we have is that a big region, not really the function of being forced to bring down yield, but just that way. For instance, for the corporate segment, we are faced with a roll of the benchmark rate. That is a control that will pretty much come back to as yield of our corporate rate. The other thing is that our regional book, the macro part of, you know, will dictate the importance of that type of competitive environment to be able to take over yield.

I think that we are pretty confident to see an improvement of cost of funds. We have a big hope that we actually do see that, overall increases and also the, you know, the really sense of the rate is going to take effect. That will help the cost of funds that we are actually seeing cost of funds increase. The main concern that I have is for what is actually going on to be a set of big regional. I think we would prefer to see a stable new trend either direction. I think we’re hoping that the range that we’re typically facing currently is essentially the range that we want to keep at the moment with the corporate and inside. As regard to the dividend, we believe that our comfort level for dividends is 60% payout ratio.

That’s doable, and we would like to get that into our shareholders. There’s also another element of dividend that we are actually considering, and that is interest rate. We would like to set some assessed global standards and also global practices regarding dividend payment, and we believe that, potentially, as we move forward, interest dividends should be actually a way to also compensate more on the business. That’s something that’s going to work out. As regard to dividend payout and all that, we are comfortable with 60% payout ratio because 60% is the same percentage that we would only want to keep. That is something that we would like to propose to our shareholder. Obviously, at the end of the day, different things will be highly dependent on the requests of most of our shareholders.

Speaker 7: Can I just also check if share buyback can be an option for you?

Laurensius Teiseran, Executive Director, PT Bank Mandiri (Persero) Tbk: We have a share buyback approved in the previous CCN March 2025. That has been applied all the way to 2026 March. Yes, absolutely. Share buyback is still part of our, it’s still on the table and still there for us to execute.

Speaker 7: All right. Thank you.

Laurensius Teiseran, Executive Director, PT Bank Mandiri (Persero) Tbk: Thank you. I think I’m going to open for one last question from Calvin Schroeders. If you can answer a question live, that would be appreciated. Thank you.

Speaker 9: Hello?

Can you hear me?

Laurensius Teiseran, Executive Director, PT Bank Mandiri (Persero) Tbk: Yes, we can hear you.

I was just wondering, just to get a sense of the color for the cost of fund, how big the wholesale, your wholesale deposits with a rate above 3.8%, was prior to the IDR 55 trillion placement from the government?

The overall cost of funds is IDR 7,000 as a result of this additional injection of equity, which we use as momentum to reassess, do business, and renegotiate the existing balance of deposits that we had that earlier set at such a rate, contributing to the change in our existing deposits so far. As regard to what is the goal of higher than 0.8% cost of fund deposits that we have to do, is that. We will get it to you, Calvin. I’m sure we’ll get that email across all the participants today, and we’ll have to double-check those.

Okay. Perfect. Thank you very much.

Thank you, Calvin.

Speaker 9: Thank you. With this last question from Calvin, that is the end of the PACRS meeting. Thank you very much. If there are further questions, feel free to email and reach the investment-making team who will do our best to sponsor a person as soon as possible. Thank you, everyone. If it’s up to date.

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