JAKARTA. PT Bank Mandiri (Persero) Tbk (BMRI) has prepared 200% in reserves until the end of the year to anticipate loan risks due to the coronavirus (COVID-19) pandemic.
According to Bank Mandiri Risk Management Director Ahmad Siddik Badruddin, the amount is higher than the company's June reserves, which had a 195% coverage ratio against non-performing loans (NPLs).
He estimates that the company's NPL by the end of the year will reach 3.5%-3.6%. As of June 2020, Bank Mandiri's NPL was recorded at 3.28%, up from 2.59% in June 2019.
"To anticipate any possible loan risk, our CKPN coverage will be maintained at 200%," Mr Badruddin said recently as quoted from Kontan.co.id.
Banks are increasing reserves to anticipate loan risks despite loan restructuring relaxation for debtors affected by the COVID-19 pandemic, and as such net NPL ratio dropped to 1.12% in July from 1.13% in June, according to the Financial Services Authority (OJK). (AM/MS)