Investor Update on Covid19 Impact
and Mitigation Strategies – 2nd Edition
April 28th, 2020

Supporting Employees, Communities and Customers During Covid19
Employees

Communities

Customers

1. Work Safety Policy
Social distancing, work from home policy, businesstravel restrictions, building entrance procedures,
required to wear protective equipments, health checks &employee isolation.

1. Mandirian Love Indonesia
Directors and employees voluntarily set aside theirsalaries to be given to groups of people who losttheir income due to Covid19 pandemic.

1. Accelerate & Improve Digital Services Offerings
Launch online onboarding for savings account opening
and waive charges for several online transactions.

2. Communication Program for Education & CSR
Socialization with regards to virus prevention & CSR
programs in various media.

2. Loan Moratorium
Loans < Rp 10 Bn (micro, consumer and SME), areprioritized for moratorium allowing deferral of principal
and interest payment up to 12 months. We also help
clients with loan > Rp 10 Bn for restructuring if theirbusinesses are impacted by Covid19.

2. Employee Facility Program
Lunch, supplement, hand sanitizer & thermogun,transportation, official residence / hotel for Split
Operation employee will be provided. Bereavement andscholarship will be provided for families of victims of theCOVID19 pandemic.
3. Health Check Services
Standby health clinic, 24 hours ambulance services andcollaborations with Inhealth hospitals.
4. Assistance of Exposed Employees
The Covid19 monitoring team helps employees to obtain
hospital services, monitor employees’ health andprovide counseling & psychologist services.

5. Establishing Media Center in Human CapitalSocialization, communications via Podcast, campaigns,
spiritual programs and employee information services.
6. In-class Digital Training
Virtual classroom, e-learning & podcast.

3. Assistance for Hospital and Medical Personnel
Providing logistics (basic needs and vitamins),
medical health equipments, (APD, masks, gloves,hand sanitizers), and compensation for doctors andnurses.
4. Sanitation and Prevention from Covid19
Providing antiseptics, disinfectants, sinks, supplies(masks, handgloves, sanitizers), and basic needs suchas rice and etc.
5. SOE First Response Task Force Coordinator
Established disaster task force centres in several
cities to monitor hospitals’ needs & aid distributions.
6. Insurance Protection for Health Workers
AXA Mandiri Insurance provides insurance protection
to 35,000 referral hospital medical workers with amaximum coverage value of Rp 1 Tn.

3. Credit Card Relaxation
Lower interest rate cap on credit card from 2.5% to2%/month, lower minimum payments from 10% to 5%
and late payment penalties from 3% or max Rp 150,000
to 1% or max Rp 100,000.
4. Educating Bank Mandiri’s Customers
Published educational content in order to optimized echannel services utilization during social restriction.
5. Working Capital Support
Loan disbursement is prioritized to support existingcustomers with good fundamental and need working
capital to survive during Covid19 crisis.
2

Summary of Regulatory Relaxation Related to Financials
Topic
Loan classification &restructuring

Before Relaxation•••

Asset quality classification for loan < Rp 10 Bn uses 1
pillar (payment punctuality)
After restructuring, loan is classified under Current
category
Relaxation is temporary until March 2021

Performing restructured loan is •classified in Stage 2 loan
Additional loan loss provision is •required

Performing restructured loans due to Covid19 could
remain in Stage 1 loan
Additional loan loss provision is not mandatory, unlessthe borrower’s condition continues to worsen

Marketable securities MTM valuation is mandatory using •mark-to-market (MTM ) latest market pricevaluation•Until September 2020, MTM valuation uses price as ofMarch 31st 2020 for government securities andcorporate securities whose fundamentals remain good
For corporate securities with enough evidence of
higher inherent risk, MTM valuation uses fair valueassessmentIFRS 9 (PSAK 71)
Implementation••

Asset quality classification &restructuring follows OJK rule(three pillars assessment)

After Relaxation•3

Eligibility for Covid-related Restructuring
Combining general criteria stipulated in POJK No 11/POJK.03/2020 and Bank Mandiri’s internal criteria
WHOLESALE
Corporate & Commercial
Sectors

Borrower’sCriteria• Tourism, Hotel, Restaurant & Accommodation, Transportations, Warehouses, Agriculture & Forestry Trading, Mining, Construction, Trading, Multifinance, F&Bs,
Pharmaceuticals, Fertilizers & Pesticides and Other Sectors which are directly and indirectly impacted by Covid19 and determined by Credit Recovery andCredit Risk teams• Decline in revenue or cash flow due to Covid19 outbreak• Borrowers affected by:• the ban on air traffic and tourist flow
• significant decline in exports/imports volume due to disrupted supply chains and trading activities• the delay in infrastructure developments due to disruption in supply, manpower and machineries from countries impacted by Covid19• government’s policies in the wake of Covid19• Borrowers with currency mismatch between IDR revenue and FX liabilities/expense
RETAILSME• Outstanding loan is within 90
days past due
Borrower’s
Criteria

Sectors

ConsumerMortgage
AutoCredit CardKSM• Outstanding loan is within 30 days past due• Borrowers are:(i) confirmed positive for Covid19, or(ii) experiencing decrease in revenue due to the impact of Covid19• For mortgage and auto loans, only borrowers who have been borrowing for 3
months at minimum

Micro(KUM + KUR)
• Outstanding loan is within 90
days past due• Tourism, Hotel, Restaurant & Accommodation, Transportations, Warehouses, Agriculture & Forestry Trading, Mining, Construction, Trading, Financial Services,
Pharmaceutical, Textile, Automotive, Creative Services and Other Sectors which are determined by respective Business Unit Head4

Progress of Covid19 Related-Loan Restructuring•

As of 24 April 2020, we have received a pipeline for restructuring requests from our customers amounting to Rp 58 Tn.

Group

Segment

Ending Loan Balance
Eligible foras of 31 Dec 2019 Restructuring*)(Rp Tn)(Rp Tn)Eligible for
Restructuring/Ending Loan Balance(%)

Restructuring
Pipeline(Rp Tn)RestructuringPipeline/
Ending Loan
Balance(%)

Corporate

364.8

46.3

12.7%

19.4

5.3%

Commercial

151.6

18.7

12.3%

14.1

9.3%

Total Wholesale

516.4

65.0

12.6%

33.5

6.5%

SME

58.7

27.4

46.7%

10.2

17.4%

Micro productive: KUM & KUR

46.7

33.2

71.1%

8.3

17.8%

Micro: Salary Based Loan (KSM)

76.2

6.5

8.5%

1.0

1.3%

Consumer

94.3

18.9

20.1%

4.9

5.2%

Total Retail

276.0

86.0

31.2%

24.5

8.9%

Total Bank-Only

792.4

151.0

19.1%

58.0

7.3%

Wholesale

Retail*) for wholesale segment, the eligible loan for restructuring is based on regulator criteria and after we seek confirmation from each respective borrower. For retail, its is purely from our assessment.

5

Daily Trend of Restructuring Pipeline
Restructuring Pipeline by Segment*)(Rp Tn)
56.7

45.1
39.9

46.1

46.1

5.0

48.8

48.1
3.5
0.5

0.5
0.4

0.5
0.4

3.1
0.4

5.7

5.7

5.7

36.2
9.0

8.6

9.1

9.1

9.1

8.8

15.0

16.2
12.3

6.7

7.2

7.6

8.2

4.4
1.0

6.7

7.3

9.5

16.0

16.0

16.0

14.414.5

13.9

16.1

14.5

14.5

14.5

14.4

15.1

15.1

15-Apr

16-Apr

17-Apr

18-Apr

19-Apr20-Apr

21-Apr

22-Apr

7.6

8.2

8.5

8.5

8.7

07-Apr

08-Apr

09-Apr

10-Apr

11-Apr

12-Apr

13-Apr

14-AprCommercial

SME

Micro (KUM & KUR)

Micro (KSM)

4.6
1.0

4.9

1.0

7.8

8.3

9.8

10.2

13.9

14.1

19.7

19.4

23-Apr

24-Apr

9.6

15.1

7.2

*)Consumer segment excludes Automotive Loan

4.0
0.9

15.1

6.7

Corporate

9.3

51.3

8.7

8.5

8.5

6.0

50.8

58.0

Consumer6Sectoral Breakdown of Wholesale Loan Eligible for Covid19 Restructuring•As of 24 April 2020, total wholesale loan that are eligible for Covid19 Restructuring is Rp 65 Tn.

Industry Sectors

Eligible forRestructuring*)(Rp Tn)CORPORATE
Construction - Infrastructure
Property - Landed House
Metal Mining
Construction - Non Infrastructure
Air Transportation
Land Transportation
Property - Investment
Oil & Gas
MiningHotel, Restaurant & Accommodation
OthersTOTAL

Industry Sectors

Eligible forRestructuring*)(Rp Tn)COMMERCIAL
21.0
6.6
2.9
2.5
2.4
2.2
1.7
1.51.5
1.2
2.7
46.3

Property - Investment
Hotel, Restaurant & Accommodation
TextileFinancial Services
Metal Trading
Construction - Non Infrastructure
RubberFertilizer & Pesticide
Agriculture & Forestry Trading
Water Transportation
Others
Total

4.5
2.7
1.1
1.1
1.1
0.9
0.9
0.7
0.7
0.6
4.4
18.7*)Covid19 restructuring eligibility is based on general criteria, such as borrowers whose: (1) industry sector is vulnerable, (2) cash flow situation is deteriorating, (3) business is adversely

impacted by Government’s action related to Covid19, (4) disruption in supply chain, (5) liabilities is in FX with currency mismatch; and after we seek confirmation from borrower

7

Conservative Accounting Policy
Loan Moratorium
12Interest Income AccrualSegment

Interest Income Accrual

Corporate

Selective +/- 50%

Commercial

Very Selective +/- 25%

Retail0%

Loan Loss Provision• Despite of Stage 1 Classification, we are still going tobook an additional provision using our best
judgment, to reflect high degree of economic
uncertainties ofCovid19 outcome after loan
moratorium period ends.
• NPL and LaR coverage to remain elevated.

•Conservative accounting policy is the right approach when uncertainties are very high• No one could predict when Covid19 ends
• Even after it ends, restarting business is more straightforward than restarting consumption in the economy•

Regulatory relaxation related to accounting policy (loan restructuring and classification) are only until March 2021•

It is important not to delay potential problems and to have a clean start after the pandemic ends

8

Sound Liquidity Position•••

We expect deposit growth to outstrip loan growth from March 2020
onwards, providing additional liquidity buffer.
To be prudent in terms of liquidity management during Covid19
outbreak, we increase our internal minimum safety level of excess
liquidity.

Even after dividend payment and IFRS 9 one-off adjustment in 1Q20,
our CET1 ratio is still at a healthy level. At this stage, we are notplanning for capital raising and are still committed to pay dividend.

Total CAR(Bank Only)

1.1%

Tier 2
Profit YTD

CET 1(Equiv. to Tier 1)

LCR & NSFR
167.4%

117.1%

4Q18

174.4%

116.6%

1Q19

179.2%

173.4%

116.2%

120.8%

LCR

NSFR

2Q19

3Q19

21.4%

20.3%

Dec-19177.7%

116.6%

4Q19Dividend(Rp 16.5 Tn) &IFRS 9 adj.
(Rp 19.6 Tn net ofDTA*)

Now

168.8%

113.0%

1Q20

CET 1 (Rp Tn)

179.1

Tier 2 (Rp Tn)

9.7

RWA (Rp Tn)

882.8*IFRS 9 one-off adjustment’s impact to Loan Loss Provision was Rp 24.2 Tn; andthe net impact to Equity after 19% Deferred Tax Asset (DTA) was Rp 19.6 Tn

9Conclusion

*****
*

Smooth banking operation with minimal disruption

Active monitoring by performing sensitivity analysis on our portfolio and will take precautionary action
accordingly, such as exposure management and proactive restructuring

Comfortable with overall liquidity positions and continue to monitor conditions through liquidity stress test
for both local and foreign currencies

Conservative accounting policy related to interest accrual and loan loss provision

We remain focus on asset quality and liquidity over growth to minimize the impact from Covid19 outbreak10

Thank You