Mochamad Billy Rizaldy (29120558)

YP-64B
Accounting Mid Test

PT. Bank Mandiri (Persero) Tbk : PERFORMANCE EVALUATION

Bank Mandiri was established on 2 October 1998, as part of the bank restructuring program of
the Government of Indonesia. In July 1999, four state-owned banks - Bank Bumi Daya, Bank
Dagang Negara, Bank Exim and Bapindo - were amalgamated into Bank Mandiri. The history of
these four banks can be traced back to over 140 years, and together they had contributed to
thebeginning of the Indonesian banking sector. With the influence of the current global
economic developments, which could lead to economic competition is very tight so it requires
other factors that support the strengthening of the economic structure so that the economy of a
country must be strong in the face of global economic competition. The Purpose of this research
is to analyze whether there is significant difference on financial performance of PT. Bank
Mandiri (Persero) Tbk during 2019.

Performance Evaluation
To ensure that the source (input) has been used effective and efficient in order to achieve
company goals, it is necessary to measure management performance. According to Stout (1993:
33), quoted from LAN and BPKP (2000), performance evaluation is a process of recording and
measuring the achievement of activities in the direction of achieving the mission through the
results displayed in the form of products, services, or a process. Performance evaluation is
needed to determine the achievement of predetermined targets. In measuring the performance of
an organization or company, a comprehensive, accurate, reliable performance evaluation system
that covers all aspects of the bank is needed, taking into account all environmental & internal
factors needed for long-term sustainability, growth, development and management of
competitive advantage against banks in the short term and in the long term.
Balance Scorecard
At present there are still many companies that measure their performance based solely on their
financial benchmarks. Performance measurement systems that are based on the size of financial
statements only focus on past performance and short-term strategy views. Top management
needs more than traditional financial measures to do business well. The success of a business in
the long term is determined by its performance, which directly depends not only on the
formulation and application of the right laws, but also from management strategies.
Global Economic Analysis
Global economic challenges throughout 2019 are
quite immense. The International Monetary Fund (IMF) estimates that the global economy will
only grow 3.0%, which is the lowest growth since the 2008 crisis. The deteriorating trade
relations between the United States (US) -China have a major impact on world economic
activity. The realization of economic growth, both developed and developing countries
throughout Quarter I - Quarter III continued to slowdown.
Economic growth in the United States throughout 2019 slowed from 2.7 (YoY) in the First
Quarter to only 2.1% (YoY) in Quarter III. In the same period of economic growth in the
Eurozone, the growth slowed from 1.4% (YoY) to 1.2% (YoY). In developing countries, the
Chinese economy also showed a significant slowdown from 6.6% (YoY) in 2018 to only 6.1%
(YoY) in 2019, which becomes the lowest economic growth in the last 29 (twenty nine) years .
Slowing down of global economic growth throughout 2019 also has an impact on commodity
demand which tends to stagnate as demand levels weaken. The average daily price of oil for
Brent types in 2019 dropped to USD64.2 per barrel, from USD71.1 per barrel. This is also
experienced by global commodity prices that become a mainstay for Indonesia, namely coal and
palm oil. The average daily price of coal and palm oil also declined, respectively to USD 524.7
and USD 77.0 per metric ton, from USD 559.5 and USD 107.2 per metric ton in 2018. This also
had an impact on the economies of commodity- producing countries such as Indonesia.

Domestic Economic Analysis

In the midst of the enormous challenges of the global economy, Indonesia can still maintain quite
good growth. The Indonesian economy grew by 5.02% (YoY) in Q3 / 2019, tending to weaken
compared to growth in Q3 / 2018 of 5.17% (YoY), due to weakening global economic growth
and prices stagnant commodity. For the record, Indonesia's economic achievements are relatively
better compared to other emerging market countries, i.e. China is slowing from 6.50% (YoY) to
6.00% (YoY), while India has fallen sharply from 7.00% (YoY) ) to 4.55% (YoY). The
maintained economic growth is supported by household consumption which is still quite strong
in line with the maintained inflation condition below 3.5%, the upper target set by Bank
Indonesia.
The stable inflation rate was driven by the controlled component of food prices in line with
maintained productivity and distribution of domestic food stock. Inflation control is also
supported by the government's strong commitment to maintain inflation in the prices of goods
regulated by the government, such as fuel and energy prices. The active role of the Government
and Bank Indonesia (BI) in coordinating with the Regional Government in maintaining inflation
has also improved.

Analysis of Banking Industry

In the midst of the challenges of global dynamics that continue to have an impact on the
economy both nationally and domestically, the banking performance still showed quite good
growth with financial stability maintained along with an improved intermediation function and
controlled credit risk. The Capital Adequacy Ratio (CAR) of banks in September 2019 is still
quite
high reaching 23.28% and banking liquidity is also quite good, reflected in the ratio of Liquid
Equipment to Deposits (AL / DPK) which reaches 19.43%. In addition, the gross low quality
credit ratio (Non Performing Loan / NPL) reached 2.66% (gross) and 1.18% (net) as well as bank
credit growth (Including loans distributed to other banks) reaching 7.84%. The growth of Third
Party Funds reached 7.47% driven by Giro growth which reached 8.45%, Savings reached
6.53%, and Deposits reached 7.60%, in addition the banking LDR ratio was quite tight reaching
94.34% in September 2019 .
At the end of Quarter III 2019, total economic financing grew by 7.4% (YoY), slowing
compared to the previous quarter's growth of 10.6% (YoY). The slowdown was influenced
mainly by commercial bank lending, with
the highest market share of 57%, which grew slowly in Quarter III 2019. Meanwhile, financing
sourced from the capital market grew by 7.54%. The continued weakening growth of non-
financial corporate economic financing is influenced by limited demand in line with the lack of
strong business confidence.
The Indonesian banking industry recorded a good performance with the quality of banking assets
that will be maintained amid fluctuations in the exchange rate. Besides. Indonesia's economic
growth in September 2019 reached 5.02% due to slowing credit growth due to global economic
uncertainty that affected commodity prices and lending.

Analysis of Bank Mandiri Position in the Banking Industry

Bank Mandiri’s Performance Over The National Banking Industry As Per September 2019

Source: Financial Report and Indonesia Banking Statistic (SPI) as per September 2019

Table of Comparison of Bank Mandiri Ratios compared to Industry Position September 2018
Source: September 2019 Financial Report and Indonesian Banking Statistics (SPI) September 2019
Based on PBI No.20 / 4 / PBI / 2018 dated March 29, 2018, the mention of Loan to Funding Ratio (LFR) changed to Macroprudential Intermediation Ratio (RIM) *) Bank Mandiri
used RIM, and the Banking Industry used LFR data

Bank Mandiri's net profit growth in September 2019 was better than the growth of the banking
industry's net profit. On a consolidated basis, Bank Mandiri's net profit in the third quarter of
2019 reached IDR 20.25 trillion or grew by 11.93% (YoY), higher than the national banking net
profit growth which only grew by 6.65% (YoY). This was supported by the growth of net
interest income which was also higher than the net interest income of the banking industry,
which were recorded at 6.45% (YoY) and 3.41% (YoY).

Bank Mandiri loans in the third quarter of 2019 on a consolidated basis grew by 7.78% (YoY),
while national banking credit growth in the same period grew by 7.84% (YoY). Total loans
disbursed by Bank Mandiri
on a consolidated basis until the third quarter of 2019 reached IDR 841.86 trillion, or 15.09% of
the total bank lending in Indonesia. In addition, the growth of the company's Third Party Funds
(DPK) on a consolidated basis as of September 2019 grew by 7.22% (YoY), meanwhile, the
growth of the national banking deposits in the same period was 7.47% (YoY).

Bank Mandiri's liquidity conditions in the period September 2019 are still maintained with a
Macroprudential Intermediation Ratio (bank only) of 91.72%, down 105 bps from the same
period a year earlier. Meanwhile, the liquidity of the national banking industry experienced
tightening with LDR in the third quarter of 2019 reaching 94.34%, up 25 bps from the same
period a year earlier.
In terms of credit quality, Bank Mandiri's NPL was still better than the national banking NPL.
Bank Mandiri's NPL showed a decline since 2018. Until September 2019, Bank Mandiri's NPL
was recorded down by 43 bps in the same period the previous year to 2.61%, while the national
banking NPL was recorded at 2.66% in September 2019. Improving ratio Bank Mandiri's NPL is
caused by the improvement of credit quality in almost all business segments and strengthening
credit risk management.
Company Strategy

During 2019, Bank Mandiri was in the final phase of the Phase III transformation to achieve
aspirations in 2020 to Indonesia’s Best, ASEAN Prominent. In challenging economic conditions
and an increasingly fierce competition map, Bank Mandiri conducts a number of business
strategies with a focus on:
a) Strengthening business lines which are the initial core competencies, namely by:
1. Growing wholesale credit above market growth with a focus on penetration in anchor
customers and selected industry sectors.
2. Increasing fee based income and wholesale CASA through improvements to
transaction banking services, cash management, foreign exchange, and capital markets.

b) b. Building and strengthening new core competencies, namely by:

1. Encouraging the growth of retail CASA through e-channels and Bank At Work
initiatives by utilizing the power of relationships, value chains, and derivatives from
wholesale customers.
2. Accelerating growth in the consumer lending business, particularly in mortgages and
auto loans through streamlining business processes and cross-selling.
3. Increasing the penetration of Micro Credit especially KSM based on payroll loans and
productive microcredit such as KUM and KUR.
4. Maintaining market share in the Small and Medium Enterprises (SME) segment.
5. Credit Card expansion through increasing the number of new cards, streamlining
business processes and product bundling.

c) Strengthening Fundamental, namely by:

1. Reducing the cost efficiency ratio through digitization.
2. Increasing network productivity through improving business processes and utilizing
analytics.
3. Reducing the level of NPL through strengthening the early warning system, managing
problem loans, and credit business processes.
Marketing Strategy

To maintain and increase the level of preference and awareness of Bank Mandiri products and to
continue the campaign that has been running since 2018, the marketing strategies adopted
include:
1. Integrated campaigns for the Bank's main products by communicating the benefits derived
from varioustransactions carried out with these products, both through campaigns in the media
and through events.

2. Communication proposition "It's Mandiri Time" is always displayed in each ad to

continue inviting customers to remember and use Mandiri.

3. The focus of the campaign is on the millennial and business segments through
campaigns that convey the daily needs of A-Z that can be met by Mandiri products with
millennial influencers.
 4. Strategic cooperation in terms of branding, with PT MRT Jakarta, as well as loyalty
programs in the form of fiestapoin or discount programs or the presence of special offers
are also carried out either through direct offers of product use (for example discounts,
cashback or gifts) or through cooperation with other parties such as for example concert
events and events related to hobbies and millennial lifestyle.

5. Activation and innovation on social media also continue to be carried out

simultaneously with campaigns that are run on conventional media above the line and
below the line.

Corporate Rating 2019

Company Analysis Report

Company Analysys Report

Table of Financial Highlights

Table of Financial Highlights
Conclusion

In 2019, PT Bank Mandiri (Persero) Tbk (BMRI) managed to record net profit growth of 9.9%.
President Director of Bank Mandiri, Royke Tumilaar claimed that the growth was the largest
among all large banks in Southeast Asia.

"Bank Mandiri's profit in 2019 was the largest among large banks in Southeast Asia, because it
grew by 9.9%," Royke said in front of thousands of audiences at the 2020 Mandiri Investment
Forum (MIF) at the Fairmont Hotel Jakarta on Wednesday (5/2).

The second largest bank in Indonesia recorded a net profit of Rp 27.5 trillion, 9.9% higher than
the figure recorded in 2018 (Rp 25.02 trillion). The company's performance was supported by
loan disbursement which rose by 10.7%, from Rp 820 trillion in 2018 to Rp 907 trillion.

Royke added that Bank Mandiri's profit growth was also supported by the fact that it managed to
maintain its capital adequacy ratio (CAR) at 23%, its non-performing loans (NPL) at 2.77%, and
its net interest margin (NIM) at 5.26%.
Strong Balance Sheet