By Implement Good Corporate Governance Bank Banten Presents Credit Risk Management

President Director of Bank Banten, Agus Syabarrudin (dock. Banten Bank)

JAKARTA - PT Bank Pembangunan Daerah Banten Tbk. is serious about improving good corporate governance. The implementation of good corporate governance (GCG) is carried out through risk management as well as the implementation of financial accounting standards (PSAK) and interpretation of financial accounting standards (ISAK).

President Director of Bank Banten Agus Syabarrudin said, as of January 1, 2020, Bank Banten has implemented PSAK No. 71 on Financial Instruments governing credit loss expectation methods. This is done in improving the quality of information including important points about reserves for impairment of financial assets in the form of receivables, loans, or credit (CKPN).

"This new standard of accounting calculation fundamentally changes the method of calculating and providing loss reserves due to the company's bad credit and this also makes our GCG better", Agus said in his official statement, Friday, April 9.

Based on the Audit Results of Bank Banten Financial Report in 2020, Bank Banten recorded an increase in CKPN of IDR 691.6 billion from IDR 126.95 billion at the end of 2019 to IDR 821.5 billion at the end of 2020.

At the same time, the solvency of Bank Banten also improved with the increasing ratio of Minimum Capital Provision Obligation (KPMM) from 9.01 percent in 2019 to 34.75 percent in 2020.

"With the increasing capital indicators, bank Banten has a better ability to manage risk and support the continuation of business as one of the regional development banks", he explained.

He added that based on Indonesian Banking Statistics (SPI) data, the average KPMM of Conventional Commercial Banks as of December 2020 is 23.89 percent. Thus, in general, the capital performance of Bank Banten is above the industry average.

"The implementation of PSAK 71 is a tangible manifestation of our seriousness in improving the implementation of governance and ensuring that Bank Banten always meets the standards and regulations applicable in the banking sector", he added.

In addition to improving governance and capital, he continued that BEKS has also reduced general and administrative expenses by 2.02 percent, from IDR 179.26 billion in 2019 to IDR 175.63 billion in 2020, and cut labor expenses by 8.03 percent, from IDR 129.40 billion in 2019 to IDR 119.00 billion in 2020.

"We hope that, with a better financial structure, Bank Banten will become one of the leading and trusted regional development banks", he concluded.