Agus Martowardojo: Aiming to Make Dominant Multi-specialist Bank

On Aug. 6, Business Review magazine named Bank Mandiri president director Agus Martowardojo “Best CEO 2007″. This is not the first time Agus has received an award of this kind. Last year, Asiamoney journal named himIndonesian Executive” and The Asian Banker presented him with the “Leadership Achievement Award”.

He deserved these awards because he has successfully rebuilt the image of Man-diri, which once had a bad reputation but is now recognized as Indonesia’s largest and most trustworthy bank.

Within just one year of assuming the position of president director, he raised the operational profit of Bank Mandiri from Rp 1.5 trillion in 2005 to Rp 1.61 trillion by the third quarter of 2006. A similar increase could be seen in the bank’s after-tax profit, namely from Rp 0.6 trillion in 2005 to Rp 1.5 trillion by November 2006. Up to the second quarter of 2007, meanwhile, Mandiri’s net profit rose further to Rp 2.140 trillion.

It is also thanks to Agus that Mandiri drastically lowered its level of bad debts from 13.9 percent in the second quarter of 2006 to 3.9 percent by the second quarter of 2007. For this year, the management of the bank has projected a credit growth of up to Rp 116.1 trillion while its fee-based income will be pushed up to Rp 2.85 trillion.

In fact, when he was appointed Mandiri president director on May 16, 2005, many circles doubted his capability, especially because Mandiri was at the time involved in various cases, ranging from poor corporate performance to bad debts amounting to trillions of rupiah. Agus, however, is not a novice banker. He has a lot of experience in the banking industry.

The first thing he did when he took over the helm was to identify problems that Mandiri was facing. Then, he slowly applied his strategy to solve these problems. This strategy proved to be effective as all the problems were gradually solved. The skeptics were proven wrong, and Agus received kudos for his achievements.

Agus was able to achieve all this thanks to hard work. In his opinion, building a solid team based on professionalism, transparency and harmonious relations is vital and must be done to build a financially sound company, especially given the fact that Bank Mandiri is a merger of four state banksBank Dagang Negara, Bank Bumi Daya, Bank Ekspor Impor Indonesia and Bank Pembangunan Indonesia. As a merger bank, human resources constituted top priority. One of the efforts made to improve the skills of human resources was the establishment of a Learning Center.

“Internal revamping, which is known as a transformation process, continues to be conducted simultaneously, starting from pro-fessional development of human resources and the stipulation of work ethos to the re-ordering of services to customers and the revamping of every product and service,” said Agus, who began his banking career at Bank of America, Jakarta.

Currently, Bank Mandiri employees 21,504 people in 924 branch offices across the country and six overseas representative offices. As the top official at Indonesia’s largest bank, Agus demands that employees contribute their utmost to the bank. “If the company prospers, employees will enjoy the fruit.why you must work enthusiastically, with utmost dedication and sincerity,” he always tells the bank’s employees.

Communication also plays an important role in the company’s management. This is connected to the bank’s target. Therefore, Agus insists on harmonious, two-way communication between the board of directors and employees and vice versa, so that there are open lines between top management and “bottom management”. This, said Agus, who is an ardent swimmer, enables members of management at all levels to correct one another. is not only the board of directors’ policy regarding subordinates that matters, but also information from subordinates for the board of directors also must be heeded. This is called the control function and shows how far the management can draw up policies that can protect all employees,” he said.

One thing that Agus has built is manifested in a series of restructuring and the development of a Strategic Business Unit (SBU)-based organization. His achievement in this respect is apparent in the various activities to market and promote the bank’s products and services – such as in Corporate Banking, Treasury and International, Commercial Banking, Consumer Finance and Retail Banking and Micro Banking – have enabled Bank Mandiri to maintain its superiority over other banks.

“We have an opportunity to improve our business through strategic alliances, cross-selling and the implementation of client service teams. This synergetic strategy allows room for potential future growth of our business,” said Agus.

Like other banks, Bank Mandiri also provides comprehensive financial solutions to private and state-owned companies, commercial undertakings, small and micro enterprises and consumer customers.

“To serve with the heart” is the bank’s mantra to achieve service excellence that satisfies customers so that eventually the company’s mission of “Mandiri, the bank of choice” can be translated into reality. “It is my goal to see Mandiri become the largest and most trustworthy bank in Southeast Asia and a dominant multi-specialist bank,” stressed Agus. (Burhan Abe)

The Jakarta Post, October 31, 2007