Bank Mandiri mitigates liquidity risk exposure through implementation of crisis management unit
Through establishment of its own business command centre, Bank Mandiri has managed to maintained its US dollar LDR limit at a satisfactory level. January 07, 2013 | Foo Boon PingWith assets of more than $60 billion, Bank Mandiri is Indonesia’s largest bank. It has an extensive network that comprises some 1,170 retail branches, 6,496 ATM machines and 1,480 micro banking outlets serving 9.5 million account holders throughout Indonesia. The past year has seen tremendous growth across many segments of the bank’s business and operations. In priority banking, it expanded its network to a total of 47 priority banking outlets and 60 priority lounges. Its treasury and financial institution business recorded $42.1 billion in FX transactions with customers and interbank FX transactions of $82.8 billion. Fee revenue reached $342 million. In corporate banking, business volume saw double-digit growth to reach over $15 billion. Credit volume hit $9.5 billion. Bank Mandiri employs effective liquidity risk monitoring Figure 1. Difference in USD LDR achievements before and after implementation of BCC Even as it expands its business significantly in the year, the bank has continued to make significant improvements to its business processes and the quality of its risk management. Early this year, the Asian Banker recognised Bank Mandiri for its achievement in liquidity risk management. Bank Mandiri has established several units dedicated to the management of risks, and has a robust integrated enterprise risk management system in place. With the implementation of the business command centre (BCC), both the level of liquid assets to total deposits and short term borrowings ratio improved, and average US dollar loan-to-deposit ratio (LDR) for the year dropped by 3% to 85%. The bank recorded healthy liquidity ratios—with an increase of only 1% Tier 1 capital ratios compared to year 2012, low LDR for 2011, and high liquid assets as a proportion of total deposits and short term borrowings. <... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Indonesia, Operational Risk, Risk and RegulationIndonesia,Oprisk,Risk and Regulation, Indonesia,Operational Risk,Risk and Regulation, Keywords:Bank Mandiri, Liquidity Risk, BCC, ERM, LDR Bank Mandiri, Liquidity Risk, BCC, ERM, LDR
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