S&P: Mandiri Persero unchanged

Standard & Poor's said PT Bank Mandiri Persero's (foreign currency B+/positive/B, local currency BB-/stable/B) higher regulatory gross NPLs in its first-half results are not expected to have an immediate impact on the ratings on the bank.

For the first half of 2005, the bank's regulatory NPLs rose to 24.6% of total loans from 17.8% in the first quarter, the agency noted.

With a new management team in place since May, the bank moved toward full compliance with the central bank's new asset quality guidelines for commercial banks and Mandiri's level of NPLs is expected to stabilize going forward, as its new senior management team focuses on working out and resolving problem loans, the agency said.

Nevertheless, any unexpected significant weakening of the bank's financial profile, in particular its loan quality, which would be more reflective of underlying deterioration of its borrowers' financial position and, in turn, its profitability, could have rating implications, S&P added.

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