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Business

New Bank Mandiri CEO faces challenging times

Bank Mandiri's new CEO Kartika Wirjoatmodjo, right, with his predecessor, Budi Sadikin
Bank Mandiri's new CEO Kartika Wirjoatmodjo, right, with his predecessor, Budi Sadikin

JAKARTA -- Kartika Wirjoatmodjo, 42, was appointed as the new president and CEO of Bank Mandiri, Indonesia's largest lender by assets, in a shareholders' meeting on Monday. His predecessor Budi Sadikin, who has led the bank since 2013, had completed his 10-year term, the limit set on Mandiri's board of directors.

     Wirjoatmodjo has held top positions in domestic financial institutions -- as the managing director of Mandiri Sekuritas, Mandiri's brokerage unit, and the CEO of Indonesia Deposit Insurance Corp. He was appointed Bank Mandiri's director of finance and strategy last year.

     In a press conference on Monday, Wirjoatmodjo said he wants to grow Mandiri into a bank that will be competitive regionally. Mandiri has only a handful of branches outside of Indonesia, and its outstanding loans of 595 trillion rupiah ($47.6 billion) as of December pales in comparison with its Singaporean and Malaysian counterparts.

     "If we look at maybe the next five years, we want a substantial presence in the regional market," he said, and added that the bank is working with financial authorities to open more branches in nearby countries.

     In the near term, Wirjoatmodjo faces the task of weathering a slowing economy that has deteriorated Mandiri's loan quality. Surging loan provisions pulled its profit growth down to just 2% in 2015. "The economy is still quite challenging, so we need to be cautious in terms of the quality of credit," he said.

     Indonesian banks are also facing increasing pressure from the government and financial regulators to reduce lending rates -- which are among the highest in Southeast Asia -- to stimulate the economy. The calls have grown louder due to a slowdown in Indonesia's economic growth, as well as the upcoming financial integration of the Association of Southeast Asian Nations, which aims to harmonize rules and lower barriers in the region's financial markets by 2020.

     The four state-owned banks, including Mandiri, in particular have been encouraged to integrate its operations to increase efficiency so that it can bring down rates. On Monday, the lenders collectively launched an electronic toll road payment card.

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