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Bank Mandiri to tackle bad loans, eyes expansion in Southeast Asia

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Bank Mandiri to tackle bad loans, eyes expansion in Southeast Asia

PT Bank Mandiri(Persero) Tbk will focus on tackling bad loans in 2016 as it chartsits expansion plans in Southeast Asia, Bloomberg News reported March 30, citingCEO Kartika Wirjoatmodjo.

The bank's NPLs will peak at around 3.5% of total credit in 2016,up from the prior year's peak of 2.5%, Wirjoatmodjo said. He noted that the bankis still notching up bad debt from the commercial sector, while those from commoditiesare already accounted for. The CEO expects the bank's bad debt ratio to stand atbelow 3% by the end of 2016.

Meanwhile, Bank Mandiri is seeking regulatory approval to in Singapore and Malaysia.The bank wants to obtain a license to conduct business in capital markets in Singapore,bolster offshore deposits from Indonesians living in the city and explore opportunitiesin private banking, Wirjoatmodjo said. In Malaysia, the Indonesian lender is planningto initially open between 10 and 15 branches and focus on remittance operations,he added.

Bank Mandiri is also interested in entering the Vietnamese andPhilippine markets, the CEO said.

Aside from organic growth, the bank is open to domestic and overseasacquisitions. Wirjoatmodjo believes the next three years are an opportune time fordeals as the owners of some banks look to unload their stakes due to tougher capitalrequirements.

The CEO said he also plans to diversify the bank's funding basefrom short-term and local-currency financing. Moreover, the bank aims to raise upto US$1 billion in 2016, either overseas in U.S. dollars or by selling rupiah bondsdomestically.