Loan Growth Beat Its Own Guidance - Deposits Didn't Keep Up
Bank Mandiri's Q1 2023 post asked where Rp108 trillion in deposits went in three months; the H1 2023 post tracked the bank-only Loan-to-Deposit Ratio» (LDR) climbing from 78.17% at the end of 2022 to 86.30% by June. This is Mandiri's nine-month 2023 published financial statement (period ended September 30, 2023) - and the deposit side of that story actually improved this quarter: consolidated deposits grew from Rp1,430.13 trillion at the end of H1 to Rp1,451.71 trillion at the end of Q3, a genuine sequential recovery. And the bank-only LDR still climbed anyway - to 87.64%, up from 86.30% in June and now nearly ten full points above where it started the year.
The reason is simple once you look at the other side of the ratio: bank-only loans grew Rp83.4 trillion over the same nine months (to Rp1,016.04 trillion, +8.94% since December), while bank-only deposits are still Rp42.4 trillion below their December 2022 level (Rp1,150.73 trillion vs Rp1,193.16 trillion, -3.56%) despite the Q3 rebound. Consolidated loan growth actually ran ahead of Mandiri's own 2023 guidance range - management's own presentation puts nine-month loan growth at 12.7% YoY against a stated guidance band of 10.0%-12.0%, and flags "Corporate & Selective Retail segments" as the driver. The LDR climb three quarters running isn't a seasonal blip anymore - it's what happens when a bank keeps growing its loan book faster than its deposit base, guidance be damned (see Beyond the Usual for how that shows up in the bank's off-balance-sheet commitments too).
The other half of this quarter's real story sits below the headline asset-quality numbers: consolidated gross NPL» and Loan at Risk» both kept improving, but that consolidated read masks a widening split between Wholesale and Retail asset quality - see Wholesale Got Cleaner, Retail Didn't below for the segment-level numbers.
The Prescription
Mandiri's edge is still balance-sheet scale funding a corporate and state-linked book, and this quarter is the clearest evidence yet that the edge is working exactly as intended - Wholesale Banking's NPL balance nearly halving YoY while Corporate loan yields reprice upward in a tightening-rate environment is a genuinely strong outcome. The operational move worth making explicit: Mandiri should publish the internal segment income-statement breakdown it disclosed for H1 2023 (see the H1 2023 post) every quarter, not just when the underlying filing happens to include it. This quarter's document doesn't repeat that segment P&L table, which means a reader can see that Retail's NPL balance is still rising (from the bank-only asset-quality slides) but can't see whether Retail's profit contribution is still shrinking as a result - the one data point that would confirm or refute whether H1's finding was a one-off or an ongoing trend is simply missing this quarter, and that's a disclosure gap Mandiri controls, not a regulatory one.
What it should stop doing: treating deposit growth as something that will simply resolve itself once rates stabilize. Three consecutive quarters of bank-only deposits sitting below their December 2022 starting point, even with a genuine Q3 rebound, is long enough to stop calling it a seasonal pattern. If loan growth keeps beating guidance while deposits keep lagging, LDR keeps climbing regardless of how healthy the loan book underneath it is - and a bank funding loan growth this aggressively against a shrinking deposit base is a liquidity posture worth actively managing, not just monitoring.
Key Financial Metrics
9M 2023 vs 9M 2022 (P&L, consolidated), and September 30, 2023 vs December 31, 2022 (balance sheet, consolidated)
FX: IDR 15,474 = USD 1 (September 28, 2023 close, last trading day of the month); IDR 15,567.50 = USD 1 (December 31, 2022 close, per the bank's own year-end reference rate disclosure cited in the H1 2023 post); IDR 15,175.20 = USD 1 (September 29, 2022 close).
| Metric | 9M 2023 (IDR) | 9M 2023 (USD) | 9M 2022 (IDR) | YoY |
|---|---|---|---|---|
| Net interest, sharia & premium income, net ("Net Revenue" equivalent) | Rp73,450,328M | ~$4.75B | Rp65,983,536M | ✅ +11.3% |
| Operating Income (profit from operations) | Rp53,201,532M | ~$3.44B | Rp42,170,887M | ✅ +26.2% |
| Net Income (attributable to owners) | Rp39,063,543M | ~$2.52B | Rp30,652,786M | ✅ +27.4% |
| EPS (basic, nine-month period) | Rp418.54 | ~$0.027 | Rp328.57 (restated) | ✅ +27.4% |
Unlike the H1 2023 post, where the 1:2 stock split landing mid-period made EPS fall even as profit rose, this quarter's filing shows the 9M 2022 comparative EPS already restated for the split - so EPS growth tracks net income growth cleanly this time, with no mechanical distortion to explain (see Beyond the Usual).
| Balance sheet metric | Sep 30, 2023 (IDR) | Sep 30, 2023 (USD) | Dec 31, 2022 (IDR) | Change since Dec 2022 |
|---|---|---|---|---|
| Total Assets | Rp2,006,939,146M | ~$129.7B | Rp1,992,544,687M | ➖ +0.7% |
| Loans (gross, Kredit) | Rp1,280,914,677M | ~$82.8B | Rp1,172,599,882M | ✅ +9.2% |
| Total Deposits (Giro + Tabungan + Deposito, incl. sharia) | Rp1,451,708,125M | ~$93.8B | Rp1,490,844,592M | ⚠️ -2.6% |
| Total Liabilities | Rp1,763,629,598M | ~$114.0B | Rp1,762,865,901M | ➖ +0.04% |
| Total Equity (attributable to owners) | Rp243,309,548M | ~$15.7B | Rp229,678,786M | ✅ +5.9% |
Operating cash flow for the nine months was approximately negative Rp121.10 trillion (~-$7.83B; against about Rp1.95 trillion of fixed- and intangible-asset capex) - continuing the same deposit-outflow-and-loan-growth mechanics flagged in the Q1 2023 and H1 2023 posts, and a larger cumulative negative than H1's own -Rp106.25 trillion, consistent with loan growth continuing to outpace deposit growth through Q3. Total cash at period-end is Rp187,125,728M (~$12.09B), down from Rp274,889,544M at the start of the year. Total equity attributable to owners grew a healthy 5.9% since December - a cleaner read than H1's near-flat 0.6% growth, since this nine-month window no longer has the FY2022 cash dividend payment (already fully reflected in H1's equity base) eating into the period's profit contribution.
Loan growth beating its own guidance while deposits stay below their starting point isn't free - it shows up as a bank-only LDR that's climbed almost ten points in nine months. See Loan Growth Beat Its Own Guidance above for why that's becoming structural rather than seasonal.
Key Operational Metrics
Bank-only ratios are from the bank's own filed Statements of Financial Ratios (Sep 2023 vs Sep 2022); consolidated ratios are from the bank's own 9M 2023 results presentation, except where marked "computed" (derived directly from the filed consolidated balance sheet)
- Loan-to-Deposit Ratio (LDR) - bank-only: 87.64%, up from 83.18% a year earlier and continuing the climb the Q1 2023 post first flagged (78.17% Dec 2022 → 86.30% Jun 2023 → 87.64% Sep 2023). Consolidated: 88.23% (computed: Rp1,280,914,677M loans ÷ Rp1,451,708,125M deposits).
- CASA» ratio - bank-only: 78.78%, up from 77.64% at December 31, 2022 (computed directly from the filed balance sheet) and up slightly from 78.22% at H1. Consolidated: 73.73% (computed: Rp1,070,317,420M demand + saving deposits ÷ Rp1,451,708,125M total deposits).
- NIM» - bank-only: 5.35%, up from 5.12% a year earlier. Consolidated (per the bank's own presentation): 5.59%, up from 5.42% a year earlier.
- NPL» ratio - gross: bank-only 1.36% (down from 2.26% a year earlier); consolidated 1.49% (down from 2.24% a year earlier, per the bank's own presentation) - continuing the multi-quarter improvement flagged in every prior post, though see Loan Growth Beat Its Own Guidance above and Beyond the Usual below for why the consolidated number alone doesn't tell the whole story.
- NPL ratio - net: bank-only 0.32%, up from 0.31% a year earlier - the small divergence from the gross ratio's improvement the H1 2023 post first noticed is still there, though still narrow enough not to be alarming on its own.
- NPL Coverage: consolidated 299%, up from 268% a year earlier but down slightly from H1's 304% - still a very high coverage level, the small QoQ dip isn't evidence of reserve release.
- CAR (capital adequacy)»: bank-only 20.68%, up from 19.32% a year earlier.
- ROA - after tax: bank-only 3.85% (up from 3.40% a year earlier); consolidated 2.60% (up from 2.29% a year earlier, per the bank's own presentation).
- ROE - after tax: bank-only 26.34% (up from 23.28% a year earlier); consolidated 22.5% (up from 20.0% a year earlier, per the bank's own presentation; PATMI over average equity excluding minority interest, the bank's own formula, per its presentation footnote).
- Cost-to-Income Ratio» (CIR): bank-only 33.94%, improved from 35.82% a year earlier.
- Operating Expenses to Operating Income (BOPO): bank-only 52.92%, improved from 55.59% a year earlier.
- Cost of Credit: consolidated 0.96% (annualized, per the bank's own presentation), sharply improved from 1.46% a year earlier and already below the full-year 2022 level of 1.44% - impairment for financial assets (consolidated P&L) fell 21.5% YoY to Rp9,072,764M.
- Loan at Risk (LaR) ratio: consolidated 9.79%, down from 13.4% a year earlier (per the bank's own presentation) - the broadest asset-quality measure continuing its multi-quarter improvement (11.9% at FY2022 → 10.3% at H1 2023 → 9.79% at 9M 2023).
- Restructured Covid-era loans (bank-only): Rp83.31 trillion against gross bank-only loans of Rp1,016.04 trillion - 8.20% of the bank-only loan book, continuing the decline the FY2022 post (10.9%) and Q1 2023 post (10.0%) both tracked. A year earlier the same bank-only total stood at Rp115.65 trillion, so the absolute Rupiah amount has fallen more than a quarter (-27.9%) even as the loan book grew - a routine metric update at this point rather than a fresh finding.
- Off-balance-sheet commitments and contingencies: approximately Rp362.58 trillion (consolidated), about 18.06% of total consolidated assets, computed the same way as the FY2022 (17.5%), Q1 2023 (18.44%), and H1 2023 (18.70%) posts - a small pullback from H1's peak but still above where the backfill started; tracked here rather than as its own Beyond the Usual item now that it's a routine quarterly update.
- Not available in this filing: an internal segment income-statement breakdown (disclosed for H1 2023, not repeated this quarter - see The Prescription above), and no earnings call transcript was issued alongside this quarter's results.
Wholesale Got Cleaner, Retail Didn't - Even Without a Segment P&L Table
The segment income-statement gap flagged in The Prescription above still leaves plenty to work with: the results presentation discloses bank-only NPL balances and ratios by segment, and non-interest income growth by segment, which is enough to see where asset quality is actually moving even without a profit figure attached to each line.
Wholesale Banking: NPL Balance Nearly Halved
Wholesale Banking's NPL balance fell from Rp15.9 trillion (September 2022) to Rp8.6 trillion (September 2023) - a 45.9% decline, driven by steady write-offs (Rp1.5-3.1 trillion per quarter) and controlled new downgrades that stayed well below the collection and write-off pace every quarter this year. Bank-only NPL ratios by segment as of September 2023 show Corporate Banking at just 0.82% and Commercial Banking at 2.24% (split between 1.67% for "new" commercial exposure and a much higher 6.96% for "legacy" commercial exposure still being worked down) - both segments still healthy overall, with the legacy-commercial subset the one line worth watching if it doesn't keep shrinking.
Retail Banking: NPL Balance Kept Climbing Every Quarter
Retail Banking's NPL balance moved the opposite direction: Rp4.4 trillion (September 2022) → Rp4.1 trillion (December 2022) → Rp4.4 trillion (March 2023) → Rp5.0 trillion (June 2023) → Rp5.2 trillion (September 2023) - up every quarter since March, and now 18% above where it stood a year ago. Bank-only NPL ratios by product line show Micro at 1.33% and Consumer at 2.09%, both above the bank-only blended NPL ratio of 1.36%. This lines up directly with the H1 2023 post's finding that Retail's segment impairment charge nearly quadrupled YoY in H1 - the Rupiah balance data here shows that wasn't a one-half event; the bad-loan balance kept growing into Q3 too, even as the consolidated ratio it sits inside kept improving because the denominator (total loans) and the other segments' numerators both got so much healthier.
Non-Interest Income by Business Unit: Micro and Commercial Led, Treasury Lagged Again
Bank-only non-interest income growth by business unit for the nine months: Micro +31.0% YoY, Commercial +18.0%, Consumer +12.9%, SME +12.3%, Corporate +5.7% - and Treasury -18.6% YoY, the only segment shown with a decline. This is a smaller, non-interest-income-only echo of the much larger interest-margin squeeze the H1 2023 post documented in Treasury & International Banking's segment profit (down 73.9% YoY in H1); the fee-income trend suggests Treasury is still the one segment moving against the grain.
Mandiri Shares Are Up Nearly 96% Over Two Years - Most of the Gain Came in the Last Two Months
The FY2022 post and H1 2023 post already covered the bulk of the 2021-2023 recovery rally. Shares closed at Rp6,025 on September 29, 2023, the last trading day of the quarter - no further stock split has occurred since the 1:2 split that took effect April 6, 2023 (covered in the H1 2023 post), so this is the actual nominal price quoted on the exchange, not a split-adjusted figure. That's a +21.4% move from the split-adjusted Rp4,962.5 close on December 30, 2022, and the two-year window from September 2021 (Rp3,075, split-adjusted) to September 2023 is a +95.9% move - meaningfully larger than the +76.3% two-year figure the H1 post reported just three months earlier, because most of this quarter's gain was concentrated late: shares moved from Rp5,200 at the end of June to Rp6,025 by the end of September, a +15.9% move in two months alone, faster than the rest of the year combined. Nothing in this quarter's own filed documents explains that acceleration - the strong nine-month results reported here were disclosed alongside the price, not ahead of it - so it's presented here as a fact about the stock's own trading history for this window, not attributed to a specific cause.
Beyond the Usual
Related-party lending is still only disclosed on the narrow bank-only basis this quarter
The H1 2023 post found that "related-party lending," previously treated as a rounding error, is actually 17.53% of the consolidated loan book once the accounting standard's full BUMN-wide related-party definition is used - a definitional gap, not a data error, since Mandiri's controlling shareholder is the state. This quarter's filed statement only discloses the narrower bank-only figure again: loans and financing provided to related parties (management, pension funds, and true corporate affiliates, not the full state-owned-enterprise population) total Rp5.66 trillion, just 0.56% of the bank-only loan book - consistent with the "rounding error"-sized figures the FY2022 and Q1 2023 posts originally cited, and not evidence the broader 17.53% figure has changed, just that this quarter's document doesn't disclose it either way.
EPS growth now tracks net income growth cleanly - the stock-split comparative has been restated
The H1 2023 post explained why basic EPS fell 16.8% YoY in H1 even as net income rose 24.9%, purely because the weighted-average share count used for EPS jumped mid-period when the April 2023 stock split took effect. This quarter's filing shows the September 2022 comparative EPS figure explicitly marked as restated for the stock split (Rp328.57, with a footnote noting the restatement) - so nine-month EPS growth of 27.4% now tracks net income growth of 27.4% almost exactly, with no share-count mechanic distorting the comparison. It's a small, genuinely interesting piece of disclosure housekeeping: the bank's own comparative figures caught up to the split within two quarters.
Target Valuation Range
Market cap Rp562.33 trillion (~$36.34B), ~2.3x P/B, ~11.3x P/E. Bottom line: Mandiri still looks fairly valued against its own profitability - a trailing P/E of roughly 11.3x and P/B of roughly 2.3x for a bank running a 22.5% annualized consolidated ROE is a modest re-rating from the H1 2023 read (10.5x P/E, 2.1x P/B), consistent with a stock that's risen faster than trailing earnings this quarter rather than a change in the underlying business.
Using trailing-twelve-month net income (FY2022's Rp41.17 trillion, less 9M 2022's Rp30.65 trillion, plus this period's Rp39.06 trillion, for TTM net income of Rp49.58 trillion) and the post-split share count of 93,333,333,332:
| Market cap → book value | Q3 2023 |
|---|---|
| Share price (period-end) | Rp6,025 |
| Shares outstanding | 93,333,333,332 |
| Market capitalization | Rp562.33 trillion (~$36.34B) |
| Total equity (book value) | Rp243,309,548M |
| Book value per share | Rp2,606.53 |
| Peer-multiple sanity check | Q2 2023 | Q3 2023 | Change |
|---|---|---|---|
| P/B | 2.1x | 2.3x | up |
| P/E | 10.5x | 11.3x | up |
P/E (TTM): ~11.3x, using TTM EPS of approximately Rp531.23, against the Rp6,025 close on September 29, 2023. P/B: ~2.3x, using book value per share of approximately Rp2,606.53 (Rp243,309,548M total equity attributable to owners ÷ 93,333,333,332 shares). Market capitalization: approximately Rp562.33 trillion (~$36.34B). Both multiples remain below BBCA's historical multiples on a similar ROE profile (~18x P/E, ~3.3x P/B in its earliest backfilled quarters - see BCA's Q1 2016 post, directional context rather than a same-period read). A full DCF still isn't included here - four quarters of Mandiri's own trailing data (FY2022, Q1, H1, and this quarter) is closer to a real annual cycle, but still doesn't cover a full Q4, which for a bank often carries its own seasonal loan-growth push; the peer-multiple read remains the honest valuation lens until that Q4 data point is on record.
PT Bank Mandiri (Persero) Tbk's 9M 2023 published consolidated and individual financial statements ("Laporan Keuangan Konsolidasian dan Individual"), for the nine-month period ended September 30, 2023, and Bank Mandiri's own 3Q 2023 results presentation, both via Bank Mandiri's investor relations page.