Strong franchise as the largest bank in the country. Adequate capitalization. Adequate underlying profitability. Weak asset quality. Operating in a high-risk economic environment. The ratings on Indonesia's PT Bank Mandiri (Persero) reflect the bank's adequate underlying profitability and capitalization, and its good liquidity. These are, however, counterbalanced by the bank's weakened asset quality. The ratings also acknowledge Bank Mandiri's franchise as the largest bank in the Indonesian banking system with its majority government ownership. Nevertheless, Bank Mandiri's operations remain subjected to the volatility associated with operating in a high-risk, developing economic environment. The quality of the bank's loan portfolio has improved, although it remained weak in comparison with regional peers. As at September 2007, the bank's NPLs in absolute terms
