Jakarta, 22 January 2020 --- The credit performance of PT Bank Negara Indonesia (Persero) Tbk or BNI in 2019 is inseparable from the toughness of its international business which is carried out by BNI overseas branches. The Business of Credit Distribution or digital services that produce Fee Based Income (FBI) collected by BNI overseas branches, together make a significant contribution to the overall BNI business. BNI's international business contributed to lending that grew to Rp 41.65 trillion, plus FBI deposits which contributed 27.4% of BNI's total non-interest income.
The International Business of PT Bank Negara Indonesia (Persero) Tbk or BNI is more reliable and become the main distinguishing element between BNI and banks based on other corporate financing in Indonesia. BNI is not only a corporate bank that serves local customers, but also local customers who are moving into global businesses.
Of all BNI corporate customers, as many as 15-25% of them are global business people. For this reason, the presence of BNI overseas branches is needed to fulfill the transaction needs of BNI customers playing globally. Thus, the existence of BNI overseas branches is To Follow the Customer and Follow the Trade.
The presence of overseas branches also has a positive impact on Indonesia in order to facilitate foreign exchange earnings. BNI overseas branches have recorded profits, so there is a new source of foreign exchange for Indonesia, namely tax. The capabilities of BNI overseas branches can also extend credit to Indonesian exporters, and in this way, there is certainty of foreign exchange generated from foreign trade.
BNI is optimistic that it is on the right track in developing its international business. This can be seen from the growth in asset CAGR in the 2014 - 2019 period which reached 20.6% per year. In the same period, loans extended grew by a CAGR of 30.7% per year, and a growth of an FBI CAGR of 8.6% per year. In the past 5 years, BNI's overseas branches recorded a growth in profit before tax (EBT) of 45.5% per year.
The performance of BNI overseas branch offices in 2019 showed encouraging developments. Loans disbursed through BNI's overseas branches grew 9.9% year on year (yoy) from Rp 38.59 trillion in 2018 to Rp 42.39 trillion at the end of 2019.
Regarding funding, BNI's overseas branch offices are now increasingly independent because funding dependence from the head office is decreasing. Where before 2014, 80% of funding sources for BNI overseas branches still came from the head office in Jakarta. In 2019, only 40% will remain.
In the midst of challenging economic conditions, BNI's business machinery remained resilient throughout 2019. This was indicated by credit growth of 8.6% yoy, from Rp 512.78 trillion at the end of 2018 to Rp 556.77 trillion at the end of 2019. BNI's credit growth is still above the industry's credit growth of 6.5% until October 2019.
With this credit growth, BNI recorded a Net Interest Income (NII) of Rp 36.6 trillion at the end of 2019 or grew 3.3% compared to the same period in 2018 of Rp 35.45 trillion. The growth of NII was able to maintain ROE at 14% at the end of 2019.
BNI loans were channeled to the Small Credit Segment which in December 2019 grew 14.2% to Rp 75.4 trillion from Rp 66.06 trillion in December 2018. Significant growth occurred in the distribution of People's Business Credit (KUR) which increased from Rp 16 trillion in 2018 to Rp 17.7 trillion at the end of 2019. The distribution of KUR BNI was awarded as the best KUR distributor bank in 2019 from the Coordinating Ministry for Economy.
In order to support the expansion of small loans, BNI increased the number of outlets given the authority to be able to channel small loans. Previously in 2017, the number of outlets that could distribute small loans was only 197 outlets, now it has reached 289 outlets throughout Indonesia.
BNI also noted that lending grew into the Consumer Credit Segment, which amounted to 7.7% yoy over 2018 to Rp 85.87 trillion. Where Unsecured Loans are still the main contributor to BNI's consumer credit growth, which grew 11.7% yoy to Rp 2.7 trillion. BNI also focuses on home ownership lending or BNI Griya because the composition of this loan to total Consumer Loans reaches 51.4% or reaches Rp 44 trillion. BNI Griya grew 8.3% yoy thanks to various improvements that have been made including expansion of the millennial in line with government programs.
BNI loans are also channeled to the Corporate Credit Segment which grew 9.8% yoy. Corporate loans are mainly channeled to the manufacturing business sector, as well as electricity, gas and water. Infrastructure loans are still one of the priorities in growing loans for this corporate business segment, one of which is the toll road project. BNI's toll road financing is focused on toll roads with high LHR levels, namely especially toll roads in Java.
BNI's business continues to run with the support of non-interest income or FBI, which was recorded at Rp 11.36 trillion or growing 18.1% over the same period in 2018 of Rp 9.62 trillion. The growth of the FBI was supported by a growth of recurring fees of 17.7% yoy. Around 27.4% of the FBI collected was derived from BNI's international business activities through BNI overseas branches.
The increase in FBI was contributed by growth in the Consumer Banking Segment, namely the commission from debit card management which grew 39.6%; account management commissions, up 16.3% yoy; ATM commission increased by 13.2% yoy; and credit card business commissions grew 10.6% yoy. The FBI was also supported by activities in Business Banking Segment that generated commissions from securities which grew 86.9% yoy; syndicated loan commission grew 56.8% yoy; and trade finance commission which increased 4.8% yoy.
The accumulation of NII and FBI mentioned above led BNI to successfully reap Operational Profit before Reserving (PPOP) at the end of 2019 of Rp 28.32 trillion or grew 5.0% yoy, and posted a net profit of Rp 15.38 trillion or an increase of 2, 5% compared to the previous period of Rp. 15.02 trillion.
Third-Party Funds (DPK)
BNI's business growth is supported by the growth of low-cost third-party funds (DPK) in 2019. BNI's DPK at the end of 2019 was collected at Rp 614.31 trillion or grew 6.1% compared to the same period in 2018 of Rp 578.78 trillion. These DPKs were mainly supported by 22.3% yoy current account growth. The cheap funds collected improved BNI's CASA ratio to 66.6%. The improvement in CASA has caused BNI to maintain the cost of funds maintained at the level of 3.2%.
Various attempts were made to encourage the growth of CASA, namely increasing the number of branchless banking from 112,000 to 157,000 Agen46. Increasing the number of accounts is also a source of increase in CASA. At the end of 2018, the number of accounts was still 43.5 million, but by the end of 2019 it had increased to 46.6 million.
Agen46 is an extension of BNI in providing banking services to people who have limited access to BNI outlets. Agen46 is a symbol of the success of the Smart Practice Program initiated by the Financial Services Authority (OJK), which has been carried out by BNI so far.
This achievement was also strengthened by CAR which improved from 18.5% to 19.7%, making it very feasible to sustain BNI's business growth going forward. Efficiency initiatives continue to run well and are expected to be reflected in an increase in Cost to Income Ratio, which will be maintained at the level of 43% -44%. This was also due to BNI's success in maintaining stable Operational Cost (OPEX) growth at the level of 8.7%.
At the end of 2019, BNI recorded total assets of Rp 845.61 trillion, growing 4.6% yoy compared to the end of 2018 which reached Rp 808.57 trillion. BNI's asset growth far exceeds asset growth in the banking industry which reached 5.9% yoy as of October 2019.
Contribution of the five Subsidiaries to BNI performance grew by 33,3% yoy. Subsidiaries’ performance succeeded in contributing 11.6% of the profit obtained by the BNI Group.
For more information, please contact:
Corporate Secretary BNI