Net interest income and PPOP both weakened in Q2 compared to Q1.

Bank Mandiri faces net interest margin (NIM) pressure and intensifying competition, according to UOB Kay Hian (UOBKH).

The Indonesian bank’s earnings grew 24.4% year-on-year (YoY) in H1 2026, but net interest income and pre-provisioning operating profit (PPOP) weakened in Q2 compared to Q1 amidst ongoing margin compression, said UOBKH analyst Posmarito Pakpahan.

“Looking ahead, earnings growth is likely to normalise amid persistent NIM pressure

from tighter system liquidity and intensifying funding competition,” Pakpahan said.

The evolving role of state-owned enterprises (SOE) banks in supporting government policy could increase uncertainty over Bank Mandiri’s long-term profitability and capital allocation, Pakpahan said.

“We also remain watchful of the Agrinas loan programme as repayments begin in

Q3 2026, which should provide greater clarity on its underlying credit risk,” he said.

Competition is another risk for the bank, with UOBKH noting that current account and savings account (CASA) only rose by 5.7% YoY in Q2, whilst time deposits surged 54.4% YoY.