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Case
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Reference no. 303-083-1
Published by: INSEAD
Published in: 2003

Abstract

This is part of a case series. In the midst of Indonesia's financial and economic crisis, Bank Mandiri was formed on 2 October, 1998 as a holding company for four state banks. Like most other banks in Indonesia during the Asian financial crisis, these four banks were insolvent. Bank Mandiri was recapitalised at a cost to the Indonesian government of IDR175.3 trillion (USD17 billion approximately), one of the biggest recapitalisations for a single bank in Asia. The bank subsequently underwent a massive restructuring, encompassing a reduction of around 8,000 personnel, the closure of about 200 branches, drastic reductions in the amount of non-performing loans on its books and the wholesale creation of new systems of credit risk management, corporate governance and compliance.
Location:
Industry:
Size:
The largest (and state-owned) bank of Indonesia, assets USD25 billion, 17,000 employees
Other setting(s):
Late 1998 to early 2002

About

Abstract

This is part of a case series. In the midst of Indonesia's financial and economic crisis, Bank Mandiri was formed on 2 October, 1998 as a holding company for four state banks. Like most other banks in Indonesia during the Asian financial crisis, these four banks were insolvent. Bank Mandiri was recapitalised at a cost to the Indonesian government of IDR175.3 trillion (USD17 billion approximately), one of the biggest recapitalisations for a single bank in Asia. The bank subsequently underwent a massive restructuring, encompassing a reduction of around 8,000 personnel, the closure of about 200 branches, drastic reductions in the amount of non-performing loans on its books and the wholesale creation of new systems of credit risk management, corporate governance and compliance.

Settings

Location:
Industry:
Size:
The largest (and state-owned) bank of Indonesia, assets USD25 billion, 17,000 employees
Other setting(s):
Late 1998 to early 2002

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