Bank Mandiri to allocate 1/3 of profits for dividends

Bank Mandiri will allocate 35 percent of its net profits for dividends, amid dividend cuts by other state-run lenders.

Bank Rakyat Indonesia has cut its dividend payout ratio to 20 percent, while Bank Negara Indonesia and Bank Tabungan Negara have cut their ratios to 30 percent.

“Although the 35 percent level of dividend payments is higher than other state lenders, Bank Mandiri remains optimistic that it can grow according to plan over the next five years,” the bank said in a statement sent to reporters on Monday after an annual shareholders meeting in Jakarta.

Bankers and Bank Indonesia  officials have called on the State-Owned Enterprises Ministry, as the controlling stakeholder of state banks, to reduce lender dividend payout ratios to boost capitalization to extend more loans.

At the meeting, Mandiri shareholders agreed to a Rp-2.8 trillionor US$327.6 million dividend payout, representing a Rp 138.27 per share payment.

The state-run lender paid out a Rp 412.43 interim dividend at the end of 2010, booking Rp 9.22 trillion in net profits in 2010, up 28.8 percent from 2009.