26/01/2024. PT Bank Negara Indonesia (Persero) Tbk or BNI succeeded in posting positive and sustainable performance as the transformation program progressed over the last three years.
Through this transformation program, the company consistently encourages strengthening its business structure so that it is better prepared to face future economic dynamics and challenges. The results are also reflected in the company's profitability level which continues to increase, as can be seen from the Return on Equity (ROE) ratio.
BNI recorded an ROE of 15.2% in 2023, an increase of 120 basis points from 14% in 2019. This achievement was achieved amidst the value of capital or equity continuing to increase, thereby reflecting the increase in the company's level of profitability.
These positive results were obtained from fundamental improvements, including the contribution of fee-based income, operational efficiency and asset quality. Throughout the 2020-2023 period, BNI was able to record an average credit growth of 7.9% per year.
Credit growth mainly came from the low-risk prospective segment. This segment resulted in a reduction in the risk profile as reflected in the RWA (Risk Weighted Assets) for credit risk which fell from 82% in 2019 to 73% in 2023.
BNI President Director Royke Tumilaar said that improving asset quality was carried out as a strategic step to ensure the company's business remained sustainable in the long term amidst the ever-changing dynamics of the global economy.
"The transformation of the last three years has been a turning point that has strengthened BNI's commercial base. We consider this transformation program as more than merely an initiative. This is a big step that marks our dedication and commitment to continue growing, developing and adapting to changes at the national and global levels," he said.
Royke also said that BNI intends to improve ROE to 20% by 2028. The rise in ROE will be accomplished by consistently recording excellent credit growth from the consumer, corporate, and MSME groups, ensuring that asset quality remains healthy in the long run.
Company profitability will also be driven by increased business productivity, operational efficiency and the contribution of subsidiary companies. To make this happen, increasing HR capabilities and optimizing technology are critical enablers. The three-year-long transformation also lays the groundwork for expanding HR and IT capabilities.
"Our future agenda is to expand digitization of business processes, develop a more advanced transaction banking platform, branch transformation, and increase the business scale of subsidiary companies, which will enable BNI to have a superior value proposition and customer engagement," explained Royke.
Focus on Performance Strengthening
BNI Finance Director Novita Widya Anggraini said, in the midst of various external challenges in 2023, especially related to increasing geopolitical risks, high inflation and global interest rates, especially in the United States, and the economic slowdown in China, BNI was taking strategic steps to maintain performance remains solid and provides optimal returns for shareholders.
Credit throughout 2023 grew by 7.6% Year on Year (YoY), reaching IDR 695 trillion, driven by expansion in low-risk segments, namely blue chip corporations, both private and state-owned, consumer credit and subsidiary companies. Private blue chip corporations grew 14.3% YoY, blue chip state-owned companies grew 11.8% YoY, consumer credit grew 13.6% YoY, and subsidiary companies grew 134% YoY.
As for the Subsidiary Company's contribution was supported by the strengthening of sustainable performance in line with the ongoing transformation of Subsidiary Companies such as BNI Finance and Hibank.
BNI Finance was refocusing its business to consumer segment financing, so that it could complete product choices.