Introduction to Bank Mandiri’s Leadership Shake-Up
The Indonesian state-owned lender, Bank Mandiri, has recently undergone a significant leadership restructuring. This change affects both the Board of Commissioners (BoC) and the Board of Directors (BoD). The move comes as state-owned banks face increasing pressure due to slowing financial performance. This slowdown is largely attributed to the banking industry’s loan disbursement slowdown and the growing burden of government-mandated programs.
Leadership Changes at Bank Mandiri
At an extraordinary general shareholders meeting held on August 4, Bank Mandiri announced several key appointments. Riduan, formerly the deputy president director, has been promoted to replace Darmawan Junaidi as president director. Additionally, Henry Panjaitan, previously the business director at PT Jaminan Kredit Indonesia (Jamkrindo), will take over Riduan’s former position. Other notable changes include the appointment of Timothy Utama as operations director, replacing Toni E.B. Subari, and Sunarto Xie stepping into Timothy’s previous role as information technology director. Furthermore, Zulkifli Zaini, who served as president director from 2010 to 2013, has been recalled to serve as an independent commissioner.
Impact of the Leadership Change
This marks the second significant change in Bank Mandiri’s leadership this year, following a similar meeting in March. The latest reshuffle is particularly noteworthy as it cut short Darmawan Junaidi’s second term as president director to less than five months, making it one of the shortest tenures in the bank’s recent history. This abrupt change signals growing dissatisfaction with the bank’s performance in the first half of 2025, mirroring broader concerns across the Association of State-Owned Banks (Himbara).
Performance of State-Owned Banks
Bank Negara Indonesia (BNI) and Bank Rakyat Indonesia (BRI) both recorded year-on-year declines in net income in the first half of 2025. BNI saw a 5.6 percent decline to Rp 10.1 trillion, while BRI experienced an 11.5 percent decline to Rp 26.27 trillion. This downward trend is consistent with the overall performance of Himbara, which saw its collective net income growth plummet from 22.86 percent year-on-year in 2023 to just 2.08 percent in 2024, and then shrink by 11.26 percent year-on-year to Rp 31.34 trillion in the first quarter of 2025.
Loan Disbursement and Industry Challenges
According to data from the Financial Services Authority (OJK), undisbursed loans at Himbara banks rose by 15.64 percent year-on-year to Rp 470.39 trillion as of May 2025. Meanwhile, disbursed loan growth slowed to 8.26 percent year-on-year in the same period, reaching Rp 3.69 quadrillion. This decline was slightly below the industry average of 8.43 percent, indicating a cooling of credit expansion. Industry-wide loan growth has also declined, from 10.27 percent in January to 7.77 percent in June, representing the slowest pace since March 2022.
Comparison with Private Banks
Despite the challenges faced by state-owned banks, some private lenders have continued to perform well. Bank Central Asia (BCA), a major private bank, posted an 8 percent net income growth to Rp 29 trillion in the first half of 2025. Similarly, Bank Permata recorded a 7.6 percent increase to Rp 1.6 trillion during the same period. These performances contrast with the struggling state-owned banks, highlighting the disparity in the banking sector.
Conclusion
The recent leadership shake-up at Bank Mandiri reflects the broader challenges faced by state-owned banks in Indonesia. The slowing financial performance, coupled with the decline in loan disbursement and the burden of government-mandated programs, has put significant pressure on these institutions. As the banking industry continues to navigate these challenges, it will be crucial for state-owned banks to adapt and improve their performance to remain competitive, especially when compared to their private sector counterparts.
