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Southeast Asia

Bank Mandiri: Big and active

In its 20-year history, Bank Mandiri has transformed itself into Indonesia's best government-owned lender ‒ the domestic trailblazer is one to watch in the region.

Kartika Wirjoatmodjo_780

Kartika Wirjoatmodjo, Mandiri: a domestic trailblazer

It’s hard to believe that Kartika Wirjoatmodjo is only 46 years old. It must be true of course – when Asiamoney met the chief executive of Bank Mandiri in July, his office was filled to bursting with flowers, cards daubed with smiley faces, and helium balloons emblazoned with the number in question and the legend ‘Happy birthday!’.

Yet it’s worth mentioning right off the bat that ‘Pak Tiko’, as Wirjoatmodjo is known to the bank’s 38,500 staff, was only half-way through high school when this publication was launched.

In the 30 years since, he has packed in a couple of lifetimes’ worth of financial, corporate and governmental experience, yet he still manages to look remarkably chipper and fresh-faced.

Like Jamie Dimon at JPMorgan Chase, it’s hard to imagine Bank Mandiri without Wirjoatmodjo. He was there in 1998 when, as a consultant at PwC, he helped to create Mandiri by, in the words of a Jakarta analyst, “rolling together four crappy mid-sized banks to create one very large and very crappy bank.”

Mandiri could, probably should, have drifted into debt and obscurity, its obituary delayed every few years by a reluctant state bailout. Instead, it transformed itself, slowly and steadily, into Indonesia’s best government-owned lender.

Domestic trailblazer

It’s big and active – no one lends more each year to a wider range of corporates and retail customers – with a vast branch network, an impressive roster of digital services, and the kind of institutional patience one needs when conducting the kind of long-term project lending an infrastructure-poor country desperately needs.

It’s also a domestic trailblazer, as Wirjoatmodjo is happy to point out: the first Indonesian bank to issue securities globally, to issue komodo bonds, to underwrite international credit, to launch [in 2018] infrastructure-based mutual funds.

“There’s a lot of innovation here,” he says. “We have to be part of the future.”

Wirjoatmodjo joined the bank full-time in 2003, only to leave in 2008 to help the government find a buyer for the ailing Bank Century, then return in 2016 as CEO, just in time to help Mandiri tackle sliding profits and a wobbly share price.

Yet you wouldn’t know it to talk to him – there’s a surprising lack of corporate ego.

He doesn’t mention the fact that non-performing loans have fallen every year since his return, declining to 2.75% at the end of 2018, from 3.46% a year earlier, or that net income jumped 21% in 2018, and by 11% on an annualized basis in the first half of 2019. Instead, he focuses on Bank Mandiri’s achievements, and where it is going.



[Bank Mandiri] is big and active... with a vast branch network, an impressive roster of digital services, and the kind of institutional patience one needs


“We’re top two or three in every market – consumer and auto loans, mortgages, securities, asset management,” he says. “Our chief focus is still corporate banking, where the market is improving along with our product range. We want to improve in cross-selling and in payroll-based lending, one of our fastest-growing services.”

Respect for the chief executive is in plentiful supply. Analysts describe him variously as “very smart and direct”, a “natural problem-solver”, and someone “who doesn’t dance around problems [but] gets his teeth stuck into them”.

He isn’t afraid to discuss the bank’s concerns for the future, notably dealing with clients stuck in the 20th Century.

“70% of the economy is still the old economy, and most customers aren’t so much different to [the way they were in] 1998, in terms of their business, risk profile, the fraud issues that come up,” he says. “But I can handle it in a smooth and comfortable way, because I’ve seen and done it all.”

That’s no small matter, given that he’s now in charge of some very senior managers who once outranked him. Is managing down easier or harder than managing up?

“At Mandiri, I have to deal with very different people: 20% to 30% of staff are older, legacy people, so I need to have a range of management styles,” he replies. “In Indonesia, the key thing is how you develop skillsets at different levels. But I’m doing OK.”

Digital future

And looking ahead, is Bank Mandiri ready for a more nimble, digital future? He points to a virtual credit card the bank is set to launch with online retailer Tokopedia, and LinkAja, a centralized QR code payment platform that went live in March 2019, uniting four of the country’s big state lenders, including Mandiri.

“I see fintech as something we need to collaborate with,” he says. “We have to be part of the new digital ecosystem; we cannot afford not to change.”

What about Wirjoatmodjo himself? He’s still a young man, albeit one implicitly trusted in the highest circles of government. Does he see himself as governor of Bank Indonesia, or seeking higher office?

He smiles.

“My job at Bank Mandiri is not done yet,” he says. “We need two or three years to get to where we want to be. The key for me is that I always want to make a difference. You ask if hypothetically speaking, I have aspirations to do a government job? Well, if I can contribute, then why not?”



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