• January 25, 2016
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PT Bank Negara Indonesia's credit up by 17.5%

Jakarta --  PT  Bank  Negara  Indonesia  (Persero)  Tbk  (BNI)  in  2015 successfully optimized its intermediary function by branching out to numerous business segments in Indonesia amid a less conducive economic climate. Corporate credit channeling grew 17.5% to Rp 326.1 trillion compared to Rp 277.6 trillion in 2014.

The credit increase was supported by a third-party fund growth of 18.0% from Rp 313.9 trillion (2014) to Rp 370.4 trillion  and Capital Adequacy  Ratio  (CAR)  to  19.5%  compared to the preceding year at 16.2%. Thus, corporate assets in 2015 grew up to 22.1% to Rp 508.6 trillion compared to 2014 with Rp 416.6 trillion.

BNI CEO Achmad Baiquni says, BNI’s success in completing its business acceleration and optimization of opportunities in multiple potential economic sectors is key to BNI’s performance growth throughout 2015. “We are grateful that amid a challenging economic predicament, BNI’s performance in 2015 continued to become more robust. We are also pleased that BNI’s credit and third-part funds showed growth that exceeded the banking industry average by directing consistent attention to risk management, which showed improvement,” Baiquni says during an exposḗ for BNI’s 2015 performance in Jakarta, Monday (1/25/16).

Credit Growth
BNI’s credit chanelling in 2015 experienced growth across multiple segments, be it business banking (Corporations, State-owned Enterprises, Small and Medium Enterprises) to consumer. Credit to business banking grew 15.3% to Rp 231.1 trillion compared to 2014 with Rp 200.4 trillion. The composition of the loans comprise: Small and medium Enterprises (28.6%); Corporations (24.6%), State-owned Enterprises (17.7%) and financing for subsidiaries and overseas branches (11.5%).

One of the largest portions of the credit increase throughout 2015 was channeled to State- owned enterprises, a commitment of the bank to support the government’s priority projects especially those in the infrastructure sector such as toll roads, constructions, electrical engineering and minerals and gas. BNI will continue to support the acceleration of strategic sectors in order to buff up the national economic fundamentals. BNI’s participation in financing these strategic sectors was also very effective and produced a positive impact on the bank.

In the consumer segment, BNI managed to sustain the momentum of credit growth of 10.6% to Rp 57.5 trillion compared to 2014 with Rp 52.0 trillion. Home ownership loans through BNI Griya booked the largest contribution at 60.2%, followed by credit cards 17.0%, other consumer credits 15.8% and Flexi 6.8%. BNI’s credit card segment continued to be the market leader with 1.7 million credit card ownerships.

Starting  August  to  December  2015,  BNI  extended  people’s  business  credit  (Kredit  Usaha Rakyat (KUR)) of Rp 3.0 trillion, a majority of which was retail credit capped at Rp 25 million-500 million. A majority of the businesses which received the credit facility were in the trade sector. The strengthening KUR was BNI’s effort in kickstarting the economy, especially in propelling micro businesses which were subject to the strains of a slowing economy.

BNI’s credit growth, which was relatively high, kept a steady tab on controlled credit risk management. This is reflected on the Gross Non Performing Loan level of 2.7% and Nett NPL of 0.9%. In alignment with BNI’s conservative and pro-active policies, the credit ratio coverage was maintained at the 140.4% level.

“The global and domestic economic conditions will continue to be highly challenging, therefore BNI  will  be  very prudent.  The  high  credit  ratio  coverage  is  part  of  BNI’s  undertakings  in employing a business strategy that is conservative,” Baiquni explains.

Current Account and Savings Account on the Rise
In an attempt to support business efficiency, BNI has managed to maintain Current Account Savings Account (CASA) in the third-party fund structure at the 61.1% level. The third-party fund growth of up to 18% in 2015 was an extension of BNI’s efforts to expand its network and transaction facilities in various regions in Indonesia.

In 2015, BNI opened 71 branches and cash offices, added 2,000 ATMs and operated 40,000 new EDC machines. BNI’s total savings customers reached 17 million customers.

CASA growth supplied a competitive benefit for the bank to assume an intermediary role more efficiently.  As  evidenced  by  a  balanced  level  of  credit growth  and  third  party  funds,  BNI managed to maintain its Loan to Deposit Ratio (LDR) at the level of 87.8%.

Net Interest Income Up 12.3%
The total net interest income in 2015 went up 12.3% to Rp 25.6 trillion compared to 2014 with Rp 22.8 trillion. While fee-based climbed from Rp 6.9 trillion to Rp 7.3 trillion. Fee-based income is derived from various business segments such as ATM payment transactions which grew 45.5%, trade financing 44.4%, and bancassurance which increased 37.7%.

BNI’s success in generating CASA and conducting cost of funds efficiency has kept the nett interest margin (NIM) at the level of 6.4%. Meanwhile with a controlled and efficient strategy and business management, in 2015 BNI booked a profit before provisions of 10.4% to Rp 18.7 trillion compared to 2014 with Rp 16.9 trillion.

“The growth of profit before provisions reflected BNI’s business solid growth. Efforts to buff up BNI’s  business  will  continue  to  be  conducted to  allow the  company’s  long  term  business strategy to be optimized and sustained, “ Baiquni says.

As  part  of  the  company’s  initiatives  in  risk  management,  in  2015  BNI”s  credit  provision increased 101.4%, or equivalent to Rp 7.3 trillion. The policy affected the bank’s nett profit which reached RP 9.1 trillion, a downward slide of 15.9% compared to 2014 with Rp 10.8 trillion.

2016 Optimism
Starting the year 2016, BNI is optimistic that the economy will restore its strength. Although several business sectors will be exposed to a number of challenges such as the minerals and gas sector as well as the commodity sector, opportunites for growth remain wide open in sectors such as infrastructure, micro and medium business and consumer.

As a state-owned enterprise, BNI will continue to strive to ramp up productive sectors and push the public’s buying power so it will gain strength. This in turn will become one of the keys in pushing Indonesia’s economic growth which is pegged at 5.0%- 5.5%, stronger than the realization in 2015.

In 2016 BNI will enhance the synergy and business optimization among the subsidiaries  under BNI Group. This strategic move is expected to improve the cohesiveness and sturdiness of the foundation for the entire business group. In 2015, the company’s subsidiaries’ total profit grew 64.1% to Rp 438 billion.

“BNI Group is a massive asset and has uncharted growth potential. We believe that with better synergy, the entire business potential of BNI Group can grow and expand optimally to achieve the  company’s  vision  as  a  financial  institution  which  reigns  supreme  in  service  and performance,” Baiquni says.

Re-disseminated by The Asian Banker