PT Bank Negara Indonesia (Persero) Tbk. or BNI managed to close 2022 by scoring an impressive performance and managed to exceed market consensus. This is reflected in the consolidated net profit of Rp 18.31 trillion, a significant growth of 68% Year-on-Year (YoY), and the highest net profit in BNI's history.
This excellent performance was realized through the hard work of all BNI people in implementing the strategic policies set, in the midst of the 2022 economic recovery period and efforts to ensure that the company's transformation agenda continues to run in accordance with the blueprint.
The total loans disbursed in 2022 reached Rp 646.19 trillion, growing above the company's initial target of 10.9% YoY, followed by a Net Interest Margin (NIM) maintained at 4.8%. Healthy loan growth was supported by business expansion from top-tier debtors and derivative businesses from the debtors' value chain.
In terms of liquidity, BNI managed to record strong Current Account Saving Account (CASA) growth of 10.1% YoY, resulting from the company's strategy to build transaction-based CASA, through the provision of comprehensive and reliable financial and transaction solutions.
Fee-based income (FBI) growth was recorded at 8.7% YoY to Rp 14.8 trillion. This was achieved by shifting the pattern of FBI growth to support the government's efforts to reduce transfer fees through the BI Fast program in line with the downward trend in interbank transfer transactions.
BNI has innovatively managed to grow non-interest income that provides value-added for customers. For example, in retail banking, the bill payment feature currently contributes more than Rp 300 billion to revenue, or grew by 18% YoY.
In addition, in Business Banking segment, BNI has been increasingly active in facilitating syndications and was able to contribute nearly Rp 1 trillion to non-interest income, up 100% compared to last year.
This positive performance resulted in Pre-provisioning Operating Profit (PPOP) of Rp 34.4 trillion or grew 10.8% YoY. In addition, the efforts to improve credit quality through effective credit policies were able to reduce the NPL ratio by 90 basis points (bps) on an annualized basis to 2.8%.
The number of loans restructured with Covid stimulus also continued to decline in value to IDR 49.6 trillion or equivalent to 7.8% of total loans. The decline in the last quarter mainly came from sectors most affected by the pandemic such as restaurants, hotels, textiles and construction, indicating that debtors' businesses in these sectors are recovering. This positive trend in asset quality has also led to lower provision for impairment losses, resulting in Cost of Credit improving from 3.3% in the previous year to 1.9%.
"The strong growth of PPOP followed by improvements in asset quality has enabled us to close 2022 with encouraging achievements. This net profit is the highest in history and is above market expectations," said BNI CEO Royke Tumilaar in Jakarta, Tuesday (24/1/2023).
Digital Initiative
Regarding digitization, BNI Deputy President Director Adi Sulistyowati said that BNI focuses on working on customer business potential in every aspect, by consistently improving digital capabilities to develop various digital financial solutions that suit customer needs.
From the retail segment, the number of BNI Mobile Banking users in 2022 reached 13.6 million, growing 26.1% YoY, followed by a transaction value that grew by 30.4% YoY to Rp 802 trillion, far exceeding transactions at ATMs of Rp 676 trillion, with the number of transactions reaching 597 million or growing 37.6% YoY.
This figure shows that BNI customers continue to shift their transactions from conventional platforms to digital platforms. This is in line with BNI's strategy to make BNI Mobile Banking a One Stop Financial Solutions for customers.
From the Wholesale Banking segment, BNI has BNIDirect to support business transactions of customers and non-individual debtors digitally and is able to fulfill all client needs in one integrated portal.
Throughout 2022, the number of BNIDirect users grew 24.9% YoY to 100,000 users, followed by transaction volume growth of 47% YoY or equivalent to Rp 6,168 trillion, with the number of transactions also increasing 18.4% YoY or reaching 764 million transactions.
Still from Digital Transformation, the company plans to transform the acquired Bank Mayora in 2022 to become a digital bank that focuses on the MSME segment. At the General Meeting of Shareholders (GMS) of Bank Mayora held on 6 January 2023, it has appointed new management which is a combination of professionals and experts with backgrounds in banking, start-up business, and financial technology.
"The appointment of Bank Mayora's new management is expected to strengthen the company's management structure in transforming the digital bank as a leading and leading provider of digital-based integrated financial solutions for MSMEs in Indonesia," she said.
Blue Chip Corporations Support Credit Growth
BNI Finance Director Novita Widya Anggraini explained that BNI's credit growth of 10.9% YoY exceeded the guidance set by the company at the beginning of 2022, which was in the range of 7% to 10%.
"This growth was achieved amid BNI's efforts to transform and focus on building a healthy credit portfolio through expansion to top tier debtors in each industry and region," said Novita.
The Business Banking sector posted a growth of 10.3% YoY to Rp 532.2 trillion. The growth of the segment was driven by the Blue Chip Corporate segment which grew 28.9% YoY to Rp 232.7 trillion; the Large Commercial segment increased 29.9% YoY to IDR 53.1 trillion; the small segment, especially People's Business Credit (KUR) which grew 19.8% YoY to Rp 52.7 trillion.
In the meantime, in the Consumer Banking sector, Payroll Loans are still the focus with growth of 20.3% YoY to Rp 43.1 trillion, followed by House Ownership Loans which grew 7.9% YoY to Rp 53.5 trillion. Overall, consumer loans grew 11.2% YoY to Rp 110.1 trillion.
Furthermore, BNI also sees that debtors affected by the pandemic continue to recover. This has a positive impact on the credit restructuring portfolio due to Covid-19, which until the end of 2022 remained Rp 49.6 trillion, down 31.2% YoY. The Loan At Risk (LaR) ratio also improved to 16%, compared to 2021 which was at 23.3%.
"Of course for this year, we are targeting even better asset quality. We are very happy that most of the debtors affected by Covid-19 have begun to recover and prepare for expansion," she said.
BNI has learned many lessons on how to improve business efficiency from the pandemic. Throughout 2022, the general operating and admin costs barely increased, growing by only 1%. Armed with this general operating cost efficiency, BNI had the opportunity to build Human Capital capabilities by increasing personnel costs by 11%, or almost 2 times the inflation rate.
This increase was mainly in the areas such as investment in employee training and variable remuneration to encourage the performance and enthusiasm of BNI employees to provide the best service to customers. Nevertheless, BNI still maintain business efficiency as reflected in the cost-to-income ratio of 42.6%, an improvement of 70 bps compared to last year.
BNI's Commitment to Sustainable Finance
BNI Risk Management Director David Pirzada disclosed, As a pioneer of Green Banking and a driving force in implementing Sustainable Finance in Indonesia, the company is committed to internalizing the principles of sustainable finance in the company's values, work culture, corporate strategy, operational policies, and operational systems and procedures.
One of these commitments is realized in BNI's Sustainable Portfolio for environmentally friendly sectors. Throughout 2022 financing in the Sustainable Business Activity Category (KKUB) reached Rp 182.9 trillion or 28.5% of BNI's total credit portfolio.
This Sustainable Portfolio is mainly provided for the needs of community social economic development through small segment financing of Rp 123.2 trillion; environmentally friendly business management and biological natural resources of Rp 19.7 trillion; new and renewable energy of Rp 10.9 trillion; financing for pollution prevention of Rp 4 trillion; and other Sustainable Portfolio of Rp 25.1 trillion.
BNI is also committed to developing sustainable business practices in line with the global agenda. BNI has started to proactively introduce Sustainability Linked Loan (SLL), where one of the main aspects of SLL is to provide incentives for customers to improve ESG aspects of their business.
Throughout 2022, BNI has channelled SLL amounting to USD 355 million or the equivalent of Rp 5.3 trillion which was channelled to top tier debtors in priority industrial sectors, such as Fast-Moving Consumer Goods and manufacturing.
"We also offer attractive pricing as an incentive for debtors to improve the achievement of ESG aspects in their business within the agreed timeframe. In the long term, we want to continue to scale up these initiatives to become the bank with the best ESG practices in Indonesia," David said.
Stock Performance and Focus of 2023
Corporate & International Banking Director Silvano Rumantir conveyed, BNI's stock price at the end of 2022 recorded an increase of 36.7% YoY, much higher than the increase in the LQ-45 stock price of 0.7% YoY. This growth was despite the Composite Stock Price Index (CSPI) which moved quite volatile in 2022 and was colored by the dynamics of geopolitical conditions, commodity prices, and the monetary policies of world central banks in conducting rate adjustments.
BNI has the commitment to continue to achieve healthy and sustainable profitability so as to provide optimal value for all stakeholders, especially shareholders. Although global economic conditions are still challenging, BNI believes Indonesia's condition is much better than other countries.
"We see many opportunities in 2023 that we can capture. For this reason, the company's transformation efforts this year will focus on several areas such as developing transaction solutions and ecosystems to meet customer needs," Silvano said.
There are seven strategic policies that will be the focus in 2023. First, BNI develops transaction & ecosystem solutions to meet customer needs. Second, develops technology infrastructure and digital innovation through data driven based on analytics, customer experience, and expanding partnerships.
Third, BNI focuses on increasing CASA and sustainable FBI. Fourth, BNI increases business expansion in the corporate top tier as well as priority sectors, value chains, and cross selling by prioritizing risk culture.
Fifth, the company continues the transformation of Human Capital, Culture, and Operations so that it is more agile and lean in supporting the business. Sixth, the company strengthens its international business network to support global market penetration. Seventh, BNI also optimizes the synergy of the BNI Group in strengthening the position of its subsidiaries.
"Guided by these seven strategic policies, we believe and are optimistic that we will score even better performance in 2023," he concluded. (*)