Jakarta (ANTARA News) - State-owned lender Bank Mandiri saw its net profit surging 49.5 percent to Rp20.6 trillion last year due to a drop in non-performing loans and a rise in commission-based income.
"Admittedly, interest income did not give (significant contribution) due to a shortfall in interest rate. But profit rose due to a drop in reserve cost and a rise in non-interest income," Bank Mandiri President Director Kartika Wirjoatmodojo said in a press conference here on Tuesday.
The banks profit grew minus 32.1 percent in 2016.
The 2017 profit was particularly contributed by net interest income (NII) which grew 0.6 percent to Rp54.8 trillion and fee based income which rose 16.4 percent to Rp23.3 trillion.
The banks NPLs also fell by 0.54 percent from 4 percent in 2016 to 3.46 percent in 2017. As a result, reserve cost dropped to Rp16 trillion from Rp24.6 trillion, thereby raising the banks income.
"The total amount of credits extended until the end of last year reached Rp729.5 trillion, up by 10.2 percent year-on-year, with productive financing contributing 74.7 percent of the total portfolio," he said.
The banks cost of fund also declined to 2.73 percent in 2017 from 2.93 percent a year earlier.
Source: ANTARA News