...High credit costs. Outlook: Stable The stable outlook on PT Bank Mandiri (Persero) reflects our expectation that the bank will maintain its strong market position and funding and liquidity profile over the next 12-18 months. We would upgrade Mandiri if we see a sustained improvement in its asset quality, possibly through a decline in stressed loans (especially in the commercial segment) and moderation in credit costs. We may also raise the rating if the bank's risk-adjusted capital (RAC) ratio increases beyond 10% sustainably. We may lower our assessment of Mandiri's stand-alone credit profile (SACP) if the bank's asset quality deteriorates substantially over the next 12 months. Given the improvement in Mandiri's asset quality in recent quarters, such deterioration is not our base-case scenario. Moreover, based on government support for the bank, we don't see the rating going down over the next 24 months because the SACP needs to decline by at least three notches for that to happen provided...
