Fitch affirms Bank Mandiri

Fitch Ratings said it affirmed all the ratings of Indonesia-based Bank Mandiri including the BB- long-term foreign- and local-currency issuer default ratings, B short-term rating, AA(idn) national long-term rating, D individual rating and 4 support rating. The outlook is stable.

The agency said the affirmation reflects Bank Mandiri's still significant asset quality weaknesses. The bank's non-performing loans appear to have stabilized, but remained at a very high 26.4% of the bank's gross loans for the first half of the year. While Fitch recognizes the stepping-up of loan recovery efforts under the new management team, the agency said it remains generally cautious given the legal constraints of the operating environment in Indonesia and recent deterioration in the bank's commercial lending book, which reflects a still-evolving credit culture.

The ratings also take into account the bank's adequate capitalization, considerable size and franchise and government ownership, Fitch said.

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