Improve Performance, BNI Prepares 4 Strategic Steps

BNI Director of Human Capital & Compliance Mucharom. (Photo: Special)

PT Bank Negara Indonesia Tbk (BBNI) has prepared four strategic steps to maintain solid performance and provide optimal income amid global economic developments related to increasing geopolitical risks, high bond yields in the United States, and the economic slowdown in China.

BNI's Human Capital & Compliance Director Mucharom said that BNI has four strategic steps that are a priority in maintaining solid performance and providing optimal income for shareholders.

Mucharom said that BNI optimizes the competitive advantage in the form of the largest Foreign Office Network (KLN) compared to other domestic banks.

KLN plays a role in providing facilities to customer business groups operating abroad, as well as suppliers and buyers from BNI Headquarters debtors.

Then, the company is also increasingly actively participating in top tier syndicated loans, financing special supply chain financing schemes and serving the needs of individual customers, especially Diaspora.

In addition to a strong global network, BNI's domestic business continues to grow consistently. We continue to improve the efficiency of business processes. The Company also made various breakthroughs and strengthened the branchless or agency business model through Agent46 spread throughout Indonesia," he explained in the Public Expose Live 2023, Monday, November 27.

Second, Mucharom said, the company remains disciplined in diversifying credit with a focus on a healthy business segment, including targeting the leading corporate segment or blue-chip company.

As of September 2023, credit from the private corporate segment grew 8.7 percent year to date (ytd) to IDR 251.6 trillion, followed by the consumer segment which grew 9.1 percent (ytd), and the entertainment segment which is the direct value chain from corporate customers, grew 0.6 percent (ytd) to IDR 57.4 trillion.

Furthermore, loans disbursed to SOEs also increased by 6.9 percent (ytd), from IDR 91.6 trillion in December 2022 to IDR 97.9 trillion in September 2023, mainly distributed to SOEs that carry out strategic functions such as PLN, Pertamina and Bulog, as well as several other SOEs including Pegadaian and Jasa Marga.

Mucharom added that BNI will continue to improve the healthy third party fund (DPK) structure.

As for September 2023, the composition of the DPK that we collected was dominated by CASA or Giro and savings amounted to 69 percent.

"In the midst of the current trend of increasing interest rates, the cost of third party funds for BNI is recorded at around 2 percent, which is structurally still lower than before the pandemic which was above 3 percent," he explained.

Mucharom said, this is supported by digital channel services, so as to be able to increase transaction-based CASA from customers in a sustainable manner so that BNI liquidity is maintained to meet credit expansion needs.

Fourth, the company continues to prioritize prudent risk management.

In addition to the improved NPL and LAR indicators, the NPL coverage ratio as of September 2023 has reached 325 percent, an increase from December last year of 278 percent.

"The company is also able to maintain the Capital Adequacy Ratio (CAR) at an adequate level at 21.9 percent as of September 2023, well above the regulator's minimum limit of 13.8 percent," he explained.

The quality of assets also continues to improve, as can be seen from the decline in the Non Performing Loan (NPL) ratio as of September 2023 which was at the level of 2.3 percent improved compared to the same period last year of 3.0 percent.

In addition, the Loan at Risk (LAR) ratio, which is at 19.3 percent in September 2022, has shown an improvement to 14.4 percent in September this year.

Mucharom said the high NPL coverage ratio and CAR provides a solid fundamental picture of BNI as a foundation in anticipating the risks of future economic turmoil.

"BNI is committed to continuing to book quality growth in order to produce optimal returns for shareholders in the long term. With various strategies to strengthen fundamental performance, the company encourages Return on Equity (ROE) to be able to move up to a more positive level in the future," he said.

As of September 2023, ROE BNI has reached 15.5 percent, an increase of 30 bps (yoy).

In an effort to achieve a more optimal level of profitability, Mucharom set a ROE target of 18 percent by 2025.