What do more than 30 million customers of THE best bank in have in Common? the support of over personnel

1,769 ATMs More than 5,400 Operating Units ANNUAL REPORT 2008

OVER 50 PRODUCTS AND SERVICES EXPERIENCE OF 113 YEARS

SERVING CUSTOMERS FROM ALL WALKS OF LIFE Table of Contents

01 BRI in Brief and Milestones 88 Institutional Business 02 Vision, Mission, Objective & Company 90 International Business And Treasury Values 94 Risk Management 04 Financial Highlights 100 Human Resources Management 05 Information to Shareholders 104 Information Technology 11 Ratings of BRI in 2008 106 Network and Services 12 2008 Significant Events 108 Corporate Social Responsibility 14 Awards 2008 114 Profile of the Board of Commissioners 15 Thirty Million Customers of BRI, 118 Profile of the Board of Directors Growing and Prospering Over Time 123 Senior Managers 18 Report of the President Commissioner 125 Products and Services 21 Board of Commissioners 126 Networks 22 Report of the Board of Directors 128 BRI Network and Addresses 29 Board of Directors 144 Statement of Responsibility for Financial 30 Organisational Structure Reporting 34 Comparative Data between BRI and the 147 Financial Statements National Banking Sector 273 Subsidiary Company 36 Management Discussion and Analysis 274 Corporate Information of the Company’s Results of Operations 275 Contact Address and Financial Condition 44 Report on Corporate Governance 72 Press Release 2008 73 Corespondence with the in 2008 76 Business Target Achievements in 2008 76 Micro, Small and Medium Sized Business 82 Consumer Business 86 Commercial Business BRI in Brief and Milestones

1. Annual Report 2008 Bank Rakyat Indonesia

PT Bank Rakyat Indonesia (Persero) Tbk. (“BRI” or the On November 10, 2003, BRI became a publicly held “Bank”) is one of the largest and oldest banks in Indonesia, company with the listing of 30% of its shares in what is founded on 16 December 1895. now the Indonesia Stock Exchange (IDX), with the ticker code of BBRI, which is currently part of the LQ45 equity Starting from an association that managed simple saving- index, making it one of the shares that are included in the and-loan fund of a Mosque for the local community, a measurement of the IDX composite shares price index, the small financial firm by the name of De Poerwokertosche Composite Index (JCI). Hulp en Spaarbank der Inlandsche Hoofden was formed on that date in Purwokerto, Central Java, as the embryo During the past two years, through the committed efforts that would eventually evolve into Bank Rakyat Indonesia. and aggressive marketing programs throughout BRI’s vastly extensive branch network, BRI was able to grow Over time, the small firm that was the brainchild of Raden rapidly in terms of total assets, loans outstanding, third Aria Wiriaatmadja continued to flourish, meeting the party funds, profit from operations, with assets quality that needs of the community. Over the course of its existence, are well-maintained. the name of the firm had been changed several times, from the Hulp-en Spaarbank der Inlandsche Bestuurs As of 31 December 2008, the BRI’s customer base Ambtenareen to De Poerwokertosche Hulp Spaar-en reached approximately 30 million accounts that comprised Landbouw Credietbank (Volksbank), Centrale Kas Voor of individual customers, micro and small-scale businesses, Volkscredietwesen Algemene in 1912 and Algemene medium to large-scale businesses, and private as well as Volkscredietbank (AVB) in 1934. During the Japanese government institutions. The growth of credit was 41.36% occupation, AVB was changed into Syomin Ginko. in 2008, whereas third party funds grew by 21.70%. As at year-end 2008, BRI had more than 5,400 Operating Upon the independence of Indonesia, the Indonesian Units that comprised of Regional Offices, Branch Offices, Government changed the name back into Bank Rakyat Sub-branch Offices, Cash Offices, and BRI Units (Micro Indonesia (taken from Volksbank) on 22 February 1946. Outlets). In several of its Branch Offices, BRI also provides Based on Government Regulation No. 1 of 1946, BRI the BRI Priority service for preferred customers. became the first state-owned bank of the Government of the Republic of Indonesia. For its electronic banking network, BRI currently operates a proprietary network of 1,796 ATM plus more than 35,000 As a state-owned bank, BRI played a central role in ATM through the ATM LINK, ATM Bersama and ATM pursuing the vision of the government to develop the rural Prima networks, as well as the 24-hour phone banking and economy. In 1960, the government changed the name SMS Banking services. of BRI into Bank Koperasi Tani dan Nelayan (Farms and Fisheries Cooperative Bank). Pursuant to Law No. 21 of As of 31 December 2008, the 1968, the government restored the name of Bank Rakyat held 56.79% shares of BRI with the remaining shares Indonesia which by then had become a commercial bank, held by public investors. The shares capitalisation of BRI and pursuant to the Banking Law No. 7 of 1992, BRI as at year-end 2008 was Rp55.85 trillion, accounting for changed its name and legal entity into PT Bank Rakyat approximately 5.56% of the total market capitalization of Indonesia (Persero). With a focus on the Micro, Small the Indonesia Stock Exchange. and Medium Enterprise (MSME) segment, BRI has since inspired others to the MSME economic sector as the backbone of the national economy. Vision, Mission, Objective & Company Values

2. Annual Report 2008 Bank Rakyat Indonesia

Vision To Become a Leading Commercial Bank that Always Prioritises Customer Satisfaction

Mission To achieve the vision, BRI has decided on three missions that have to be undertaken, namely: • BRI provides the best banking operation by prioritising services for Micro, Small and Medium Businesses in order to support people’s economy. • BRI offers premium services to customers through a network that are spread all over Indonesia and supported by professional human resources who implement Good Corporate Governance. • BRI creates value and produces optimal benefits to all stakeholders. 3. Annual Report 2008 Bank Rakyat Indonesia

Corporate Cultures Business Strategy BRI espouses the corporate values that form the BRI has formulated the Bank’s Business Plan for foundation for the thinking, action and behaviour of the period of 2009-2011, as parts of its long-term every individual at BRI, inherent in a corporate culture development plan. The business strategy of BRI in the and projecting a solid and strong character of the Bank. short and medium term is broken down as follows: These values are integrity, professionalism, customer • The business development of BRI that is supported satisfaction, leadership, and respect for the individual. by the increase in the quantity and quality of professional personnel, product features, services, As a publicly held company, BRI is fully committed and the support of an information technology to comply with all prevailing laws and regulations system that is reliable and for the following pertaining to banking and the capital markets. This applications: has induced BRI to always champion the cause - The growth of credit that focuses on the for prudential banking as well as the interests of financing of the MSME sectors while still stakeholders. adhering to prudential banking principles. - The growth of third party funds that are This commitment is also manifested in the form of dominated by low-cost funding with a minimum Corporate Governance as follows: composition 60%. • Intensifying the program to instil awareness of risk • Instilling a risk-aware culture and implementing a and a culture of compliance for every employee at micro management system that is effective among all BRI Operating Units. all the Operating Units of BRI. • Intensifying improvements to service quality in all • Strengthening of the Banks equity base to support Operating Units; business growth. • Extrapolating and monitoring each progress made • Expanding the service networks by adding Branch by the bank into an activities log book that are Offices, Sub-Branch Offices, Cash Offices, BRI easily measurable and accountable for all Operating Units as well as electronic channels, such as the Units; Automated Teller Machines (ATM), Cash Deposit • Implementing a policy of rewards and punishments Machines (CDM) and Electronic Data Capture that is firm and just. (EDC) in order to extend the reach of services. • Enhancing the marketing communications for each product and service category in line with the corporate marketing strategy such that BRI will also be able to increase its sales and create the corporate image of BRI in the public minds. Financial Highlights

4. Annual Report 2008 Bank Rakyat Indonesia

(in trillion Rupiah, except earnings per share)

2008 2007 2006 2005 2004 Balance Sheets Total Assets 246.07 203.74 154.76 122.78 107.04 Total Earning Assets 228.78 169.09 139.04 111.48 97.96 Loans – Gross 161.11 113.97 90.28 75.53 62.37 Government Recapitalisation Bonds 16.35 18.22 18.45 17.72 22.69 Third Party Funds 201.54 165.60 124.47 97.05 82.40 - Demand Deposits 39.92 37.16 27.86 17.38 13.36 - Savings 88.08 72.30 58.31 49.37 44.57 - Time Deposits 73.54 56.14 38.30 30.29 24.47 Other Interest Bearing Liabilities 7.60 6.26 6.04 5.60 6.38 Equity 22.36 19.44 16.88 13.35 12.45

Profit/Loss Interest Income: - With Government Recap Bonds Interest 28.10 23.24 21.07 17.25 15.53 - Without Government Recap Bonds Interest 26.15 21.22 18.73 15.08 12.69 Net Interest Income - With Government Recap Bonds Interest 19.65 16.70 13.77 12.43 11.26 - Without Government Recap Bonds Interest 17.70 14.68 11.43 10.25 8.41 Other Operating Income 2.54 1.82 1.51 0.73 1.45 Other Operating Expenses (11.00) (9.02) (7.65) (7.44) (6.09) Total Provision for Possible Losses (2.84) (1.94) (1.85) (0.40) (1.33) Income Before Tax 8.82 7.78 5.91 5.61 5.73 Net Income 5.96 4.84 4.26 3.81 3.63 Earnings per Share (Rp) 497.00 403.64 355.62 307.00 307.00

Financial Ratio (in percentage) Capital Capital Adequacy Ratio (CAR) 13.18 15.84 18.82 15.29 16.19 Fixed Assets to Capital 24.13 26.14 29.03 32.11 31.73 Earning Assets Non-Performing Earning Assets 2.18 2.22 3.06 3.20 2.76 Non-Performing Loans (NPL) 2.80 3.44 4.81 4.68 4.19 Allowance for Possible Losses for Earning Assets 3.75 4.05 4.80 4.85 5.28 Compliance for Allowance for 150.20 161.20 155.97 176.62 225.24 Possible Losses for Earning Assets Profitability ROA (Return on Assets) 4.18 4.61 4.36 5.04 5.77 ROE (Return on Equity) 34.50 31.64 33.75 38.00 42.76 NIM (Net Interest Margin) 10.18 10.86 11.16 12.18 12.16 Operating Expenses/Operating Income 72.65 69.80 74.38 70.83 68.86 Liquidity LDR (Loan to Deposit Ratio) 79.93 68.80 72.53 77.83 75.69 Compliance Violation on Legal Lending Limit (LLL) - Related Parties 0.00 0.00 0.00 0.00 0.00 - Third Parties 0.00 0.00 0.00 0.00 0.00 Excess of Legal Lending Limit (LLL) - Related Parties 0.00 0.00 0.00 0.00 0.00 - Third Parties 0.00 0.00 0.00 0.00 0.00 Statutory Reserve 5.57 22.09 12.34 9.55 9.39 Net Open Position 13.55 7.90 5.41 5.23 10.77

Note: • Including market risk since 2004 • Year 2007 : Balance Sheet is a consolidated financial statement with subsidiary (PT Bank Jasa Arta) • Year 2008 : Balance Sheet and Profit-and-Loss data are consolidated with those of PT Bank Syariah BRI (formerly PT Bank Jasa Arta) Information to Shareholders

5. Annual Report 2008 Bank Rakyat Indonesia

BRI’s Share Performance in 2008 In 2008, in line with the collapse of the world’s stock 50.58% from 2,731.51 on 2 January 2008 to 1,355.41 markets due to the global financial crisis, BRI shares, on 30 December 2008. Throughout 2008, the price of which opened at Rp7,400.00 per share and closed the BRI share moved in a broad range, reaching its peak of year at Rp4,575.00 per share, declined by 38.18%. Rp7,800.00 on 9 January and 14 January 2008, and its However, this declined was still below that of the lowest level of Rp2,400.00 on 21 November 2008. Jakarta Composite Index, which felt by as much as

Movement of Price and Transaction Volume of BRI Shares in 2008

90,000,000 9,000

80,000,000 8,000

70,000,000 7,000

60,000,000 6,000

50,000,000 5,000

40,000,000 4,000

30,000,000 3,000

20,000,000 2,000

10,000,000 1,000

0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Volume (left) Price (right)

Quarterly Share Price

Share Price Number Transaction Transaction Market of Shares Frequency Calendar Year Volume Value Cap Open High Low Close Outstanding (times) (share) (Rp trillion) (Rp trillion) (Rp) (Rp) (Rp) (Rp) (share)

2007 5,150 8,700 4,400 7,400 12,317,800,500 3,352,241,000 103,589 19.93 90.27 Quarter I 5,150 5,450 4,400 5,050 12,287,616,500 857,282,500 28,704 4.29 61.46 Quarter II 5,050 6,500 5,050 5,750 12,303,602,500 796,783,500 21,851 4.47 70.07 Quarter III 5,750 7,050 5,100 6,600 12,309,493,500 960,342,500 24,154 5.56 80.47 Quarter IV 6,600 8,700 6,600 7,400 12,317,800,500 737,832,500 28,880 5.61 90.27

2008 7,400 7,800 2,400 4,575 12,325,299,500 4,735,576,500 230,412 23.9 55.85 Quarter I 7,400 7,800 5,250 6,300 12,318,935,500 736,724,500 31,385 4.98 76.87 Quarter II 6,300 6,950 4,650 5,100 12,319,892,000 1,204,170,500 55,078 6.76 62.23 Quarter III 5,100 6,450 4,575 5,400 12,322,809,000 1,120,328,500 52,644 6.20 65.91 Quarter IV 5,400 6,325 2,400 4,575 12,325,299,500 1,674,353,000 91,305 5.96 55.85 6. Annual Report 2008 Bank Rakyat Indonesia

Dividend Policy and Sandjaja, and gave full release and discharge In the Annual General Meeting of Shareholders (AGMS) (acquit et de charge) to the Board of Directors and 2008, the amount of cash dividends paid out for the Board of Commissioners for their management the accounting year of 2007 was set at Rp2,419.00 and supervision during the financial year ending billion or Rp196.34 per share, which was paid to the 31 December 2007 provided that their actions are shareholders on 7 July 2008. not categorized as a criminal act and are reflected in the Company’s financial report. Cash dividends in 2007 increased by 13.63% from those of 2006, which amounted to Rp2,128.78 billion 2. Report on the Partnership and Community or Rp173.04 per share. The dividend payout ratio for Development Program (Program Kemitraan dan 2007 was 50% of net profit. Bina Lingkungan/PKBL) for the financial year ending 2007 which had been audited by the Public BRI Dividend Payments Accounting Firm of Herman Dody Tanumihardja & Rekan and gave full release and discharge

Dividend Dividend (acquit et de charge) to the Board of Directors and Accounting Net Income Dividend per Payout (Rp Billion) (Rp Billion) Year Share (Rp) Ratio (%) Board of Commissioners for their management

2003 2,579 990.47* 84.19 75.01 and supervision of the PKBL, provided that their 2004 3,633 1,816.61 152.93 50.00 actions are not categorized as a criminal act and 2005 3,808 1,904.29 156.18 50.00 are reflected in the Company’s reports on the 2006 4,257 2,128.78 173.04 50.00 2007 4,838 2,419.00 196.34 50.00 Partnership and Community Development Program.

*) from the net income of second semester (1 July 2003 - 31 December 2003) amounting to Rp1.32 trillion, first semester profit was capitalized into equity.

Second Agenda 1. To determine the appropriation of net profit of Shareholder Information the Company for the period of 1 January to 31 December 2007 as follows: Corporate Action of 2008 - 50% or Rp2,419,000,552,302 will be The BRI Annual General Meeting of Shareholders distributed as cash dividends to the (AGMS), held on Monday, 26 May 2008, have decided shareholders in accordance with the prevailing the following issues: regulations. With the MSOP phase I, II and III, provided that stock options from the MSOP phase I, II and III have all been exercised First Agenda before or on the date at which the shares can Approved and Ratified: be included in cum dividend shares, with a 1. The Bank’s 2007 Annual Report which includes the minimum cash dividend per share of Rp195,82. report of the Board of Directors, the supervisory - 20% or Rp967,600,220,921 will be for the duties of the Board of Commissioners and the Company’s general reserves pursuant to Law Financial Statements for the year ending 31 No 40 of 2007 on Limited Liability Company. December 2007 which had been audited by the - 20% or Rp967,600,220,921 will be for the Public Accounting Firm of Prasetyo, Sarwoko Company’s specified reserves. 7. Annual Report 2008 Bank Rakyat Indonesia

- 4% or Rp193,520,044,184 will be for the Fourth Agenda Community Development Program (Program 1. To appoint the Public Accounting Firm of Bina Lingkungan) Purwantono, Sarwoko & Sandjaja to audit the - 6% or Rp290,280,066,276.31 will be allocated Company’s financial statements for the financial to Retained Earnings. year ending 31 December 2008, and to grant 2. To grant the rights and authorities to the Board the authority to the Board of Commissioners to of Directors to determine the schedule and the determine the fees of the Public Accountants and procedure of cash dividend payments for the other requirements in accordance with prevailing year 2007 in accordance with prevailing laws and regulations. regulations. 2. To appoint the Public Accounting Firm of Herman Dody Tanumihardja & Rekan to audit the financial statements on the PKBL for the financial year Third Agenda ending 31 December 2008, and to grant the 1. Ratified the Tantiem (Bonus) for the Board of authority to the Board of Directors to determine Directors, the Board of Commissioners and the the fees of the Public Accountants and other Secretary of the Board of Commissioners for the requirements in accordance with prevailing year ending 31 December 2007, amounting to regulations. 0.81% of the net profit for said financial year which 3. To grant Power of Attorney: will be paid from the allowance for Tantiem in the - To the Board of Commissioners to year 2007 based on the Indonesian Accounting appoint another Public Accounting Firm in Standard no. 24. The authority to distribute place of the appointed Public Accounting Firm the Tantiem will be determined by the holder of to audit the Company’s financial statements Dwiwarna series A share (Golden Share). Tax of the for the year 2008 including fees and other Tantiem will be paid by tantiem’s receivers. requirements in accordance with prevailing 2. Ratified an increase of salary/honorarium for the regulations should the appointed Public Board of Directors, the Board of Commissioners Accounting Firm could not perform its audit and the Secretary of the Board of Commissioners, duties for whatever reasons. amounting to 21.95% of the salary/honorarium - To the Board of Directors to appoint another which had been ratified in the General Meeting of Public Accounting Firm in place of the Shareholders on 22 May 2007, rounding up to the appointed Public Accounting Firm to audit nearest million. The proportion of salary/honorarium the Company’s PKBL financial statements for the Directors, the President Commissioner, the for the year 2008 including fees and other Commissioners and the Secretary of the Board of requirements in accordance with prevailing Commissioners are 90%, 40%, 36% and 15% of regulations should the appointed Public the salary of the President Director, respectively, Accounting Firm could not perform its audit effective 1 January 2008. duties for whatever reasons.

8. Annual Report 2008 Bank Rakyat Indonesia

Fifth Agenda Chronology of Share Listing To give the authority to the Board of Commissioners Shares issued by BRI are the Dwiwarna Series A Share to approve additional paid-up capital of the (Golden Share) and the Series B Shares. Bank BRI Company with regards to the exercise of the only issues 1 (one) Golden Share possessed by the Management Stock Option Plan (MSOP) that had Republic of Indonesia, which is not transferable to any been decided on the Company’s General Meeting other party. of Shareholders. The special rights granted to the holder of the Golden Share are: Sixth Agenda 1. Nominate members of the Board of Directors and/ a. To approve all changes in the Company’s Articles or members of the Board of Commissioners of the of Association including but not limited to the Company. amendment of Law No. 40/2007 on Limited Liability 2. Approve the appointment and termination of Company and Bapepam-LK’s Regulation No. IX.J.I members of the Board of Directors and/or the on the principles of the Articles of Association Board of Commissioners. of Company’s that undertake public offering of 3. Approve amendments to the Articles of Association, equities and public listed companies. including changes in capital. b. With respect to the above changes in the Articles 4. Approve the consolidation, merger, acquisition and of Association, to give the power and authority to spin off of the Company, bankruptcy filing, and the the Board of Directors collectively or individually liquidation of the Company, and/or using substitute rights to ask for the approval of, 5. Request report and explanation on certain issues and report the changes in the Company’s Articles from the Board of Directors and the Board of of Association to, the relevant authorities, and Commissioners with due consideration to prevailing subsequently state and arrange the amendments, rules and regulations, especially those of the Capital changes or improvement needed with authentic Market. notarial deed before a notary, if required by the relevant authorities and/or prevailing laws and By virtue of the Decree of the Chairman of the Capital regulations, to make or request the making Market Supervisory Agency No. S-2646/PM/2003 of, and sign all of the certificates, letters and dated 31 October 2003, the Statement of Registration documents needed, being present before the by BRI in the event of its Initial Public Offering of Shares relevant authorities, submitting a request to the became effective. The IPO pertained to the offering relevant authorities or reporting the above matters of 2,047,060,000 (two billion forty-seven million and to the relevant authorities pursuant to the laws and sixty thousand) of Series B Shares, which represent regulations and undertake all necessary steps that the divested shares of the Republic of Indonesia, in are deemed useful in connection with the changes addition to 1,764,705,000 (one billion seven hundred in the Company’s Articles of Association. sixty-four million seven hundred and five thousand) of newly issued Series B Shares by the Company, at a nominal value of Rp500 (five hundred rupiah) per share. 9. Annual Report 2008 Bank Rakyat Indonesia

The shares began to be traded on 10 November 2003; Stock Exchange No. Kep‑305/BEJ/07‑2004. The and were simultaneously listed on the Jakarta and vesting period for all MSOPs were up to one year after stock exchanges. the commencement date. MSOP I and MSOP II could be exercised at any time following the vesting period, Subsequently, options on over subscription amounting up until the maturity date of each MSOP phase. to 381,176,000 Series B Shares and over allotment amounting to 571,764,000 Series B Shares, both The exercised MSOP shares up to 31 December 2008, belonging to the Republic of Indonesia (divestments) amounted to 560,594,500 shares. at the strike price of Rp875 (eight hundred seventy-five Shares rupiah) per share had been exercised on 10 November Number of Shares Shares Exercised 2003 and 3 December 2003, respectively. MSOP MSOP Exercised Exercised up to end of Phases Shares in 2007 in 2008 2008 (share) (share) (share) Management Stock Option Program (MSOP) (share) Phase I 235,294,100 230,201,000 798,000 230,999,000 In the Extraordinary General Meeting of Shareholders Phase II 235,294,100 225,734,000 1,207,500 226,941,500 on 3 October 2003, the Company decided to carry Phase III 117,647,050 97,160,500 5,493,500 102,654,000 out a Management Stock Option Program (MSOP). Total 588,235,250 553,095,500 7,499,000 560,594,500 In this program the number of stock issued reached 588,235,250 with the following allocation: The exercise period of MSOP I ended on 9 November 2008. As at the end of the exercise period, a total of Number of Phases Date of 4.3 million shares had not been exercised. Shares Exercise Price of Percentage Option MSOP per Share MSOP Issuance (share) Specific to the exercise of Phase III of the MSOP, which Phase I 235,294,100 40% 10 Nov 2003 Rp962.50 runs until the end of 2008, the details are as follows: Phase II 235,294,100 40% 10 Nov 2004 Rp1,750.00

Phase III 117,647,050 20% 10 Nov 2005 Pursuant to Bapepam-LK Number Periods of Exercised of Shares Exercise Period & IDX MSOP III Price (Rp) Exercised (share) Total 588,235,250 Period 1 15 Nov - 27 Dec 2006 4,450 76,478,000 Period 2 8 Jun - 19 Jul 2007 5,188 13,581,000 MSOP Execution Period 3 15 Nov - 19 Jul 2007 6,385 7,939,000 The MSOP was executed in 3 (three) phases: MSOP I, Period 4 10 Jul - 14 Aug 2008 4,572 2,828,500 Period 5 3 Dec - 24 Dec 2008 2,907 1,827,500 MSOP II and MSOP III. The execution of MSOP I and MSOP II were based on earlier Capital Market Supervisory Board and JSX (now IDX) regulations; while MSOP III was based on the Regulation of the Capital Market Supervisory Board No. IX.D.4 and Regulation on Securities Listing Procedures No. 1‑A Attachment. The Decree of the Board of Directors of the Jakarta 10. Annual Report 2008 Bank Rakyat Indonesia

Shares Ownership Compared to 2007, as at year-end 2007, the number of BRI’s shares outstanding increased by 0.061%, from 12.32 billion to 12.33 billion shares. The increase was attributed to the subscription of additional shares from the exercise of the MSOP during the year. Along with the increased number of outstanding shares, there was a dilution of the Government shareholding of BRI, from 56.83% as at year-end 2007 to 56.79% at year-end 2008.

Share Ownership of BRI

Category of Number of Shareholders Number of Shares Percentage Shareholders 2008 2007 2008 2007 2008 2007

The Government of the 1 1 7,000,000,000 7,000,000,000 56.79% 56.83% Republic of Indonesia

Public 10,574 8,845 5,325,299,500 5,317,800,500 43.21% 43.17% Domestic Investor 9,943 8,331 1,129,266,422 762,530,967 9.16% 6.19% Individual 3,988 2,201 66,975,650 50,852,650 0.54% 0.41% Employee 5,529 5,755 86,169,500 87,260,000 0.70% 0.71% Regional Government 1 1 159,000 159,000 0.00% 0.00% Institution 425 374 975,962,272 624,259,317 7.92% 5.07% Foreign Investor 631 514 4,196,033,078 4,555,269,533 34.04% 36.98% Individual 25 9 1,778,000 287,000 0.01% 0.00% Institution 606 505 4,194,255,078 4,554,982,533 34.03% 36.98%

Total 10,575 8,846 12,325,299,500 12,317,800,500 100% 100%

Note: In 2008 there were no public shareholders that held more than 5% of BRI shares.

Use of the Proceeds from Initial Public Offering • A total of 10% or approximately Rp147 billion for The following information sets forth the details of the the financing of future growth prospects, research use of the proceeds from the Bank’s Initial Public and development, loan disbursement and other Offering (IPO) of shares in the amount of Rp1.47 trillion, financing. pursuant to what was stated in the IPO prospectus, as follows: As at year-end 2008, a total of 89.14%, or • A total of 60% or approximately Rp883 billion approximately Rp1.31 trillion of the IPO proceed was allocated for the upgrading of the Bank’s allocation had been realised, as follows: information reporting system and the roll-out of the • A total of Rp723.36 billion for the upgrading of the core banking application system; information reporting and core banking systems; • A total of 30% or approximately Rp441 billion for • A total of Rp441.63 billion for the expansion of the expansion of the Bank’s branch office and BRI branch office and BRI Unit network; Unit network; • A total of Rp147.21 billion for the development of future growth prospects. Ratings of BRI in 2008

11. Annual Report 2008 Bank Rakyat Indonesia

The following table shows the ratings of BRI by three rating agencies: Moody’s, Fitch and PEFINDO.

MOODY’S National Rating - National Scale Rating Aaaid Global - Outlook Stable - Domestic Currency Long Term Deposit Baa2 - Foreign Currency Long Term Deposit B1 - Foreign Currency Sub Debt Ba2 FITCH National Rating - Long Term AAA (idn) Global - Long Term Foreign Currency BB - Short Term Foreign Currency B - Outlook Stable - Individual C/D - Support Rating 3 - Support Rating Floor BB- PEFINDO Corporate ID AAA Sub-Ordinated Bond ID AA+ 2008 Significant Events

12. Annual Report 2008 Bank Rakyat Indonesia

JANUARY 23 FEBRUARY 22 MARCH 23

MARCH 25 MAY 11-18 MAY 22

MAY 26 MAY 28 JULY 12

Date Events

23 January 2008 BRI and Holcim signed an MOU on providing the benefit of banking products and services for the (Jakarta) business of home solutions.

22 February 2008 Launch of BRI’s Micro KUR products (Jakarta)

23 March 2008 Social Donation by BRI in the form of 32,000 staple good packages for fishermen in the coastal areas (Jakarta) of Jakarta, Bekasi and Karawang.

25 March 2008 BRI cooperated with the Department of Forestry on the management of a revolving funds for the (Jakarta) development of industrial forests.

11-18 May 2008 BRI became the main sponsor of the Thomas-Uber Cup Championship event at the Istora Senayan (Jakarta) stadium, Jakarta.

To provide convenient service for the management of tuition fees of university students, BRI 22 May 2008 undertakes a cooperation with the State University of for the processing of student tuition (Semarang) via online banking.

26 May 2008 Convening of the Bank’s Annual General Meeting of Shareholders in 2008. (Jakarta)

28 May 2008 Signing of the Working Agreement between the Financial and Development Supervisory Board (BPKP) (Jakarta) and BRI in the management of the Expenditure Fund from the BPKP State Budget.

12 July–31 August 2008 The Simpedes Folks Festival commenced on the 12th of July, carried out in turns in 282 Branch (Wonosobo) Offices throughout Indonesia. 13. Annual Report 2008 Bank Rakyat Indonesia

AUGUST 15 AUGUST 27 AUGUST 28

SEPTEMBER 1112 OCTOBER 23 NOVEMBER 25

NOVEMBER 17 NOVEMBER 30 DECEMBER 2

Date Events

15 August 2008 Signing of the MOU between the State Ministry for the Empowerment of State Apparatus and BRI on (Jakarta) the Management of Data on State Apparatus through Banking Services and the launch of the “Red and White” ATM Card.

27 August 2008 Signing of the Working Agreement between PT Sumber Alfaria Trijaya (AlfaMart) and BRI for (Jakarta) investment credit facilities to the franchisees of Alfamart.

28 August 2008 Signing of the Working Agreement between the Department of Defence of RI with BRI in the (Jakarta) management of funds of the State Budget for defence through the use of banking services.

11 September 2008 BRI cooperated with PT Timah Tbk. in the use of banking products and services. (Jakarta)

Founding of the Training Centre of Batik from the Royal Court of Kanoman Cirebon, in cooperation 23 October 2008 with the Nurani Budaya Indonesia Foundation as one of the programs of the BRI Platinum Credit (Cirebon) Card, reflecting BRI’s commitment to promote the “Indonesia Heritage”.

25 November 2008 Public Expose by BRI during the Investor Summit 2008 event at the Ritz Carlton Jakarta, Pacific (Jakarta) Place.

17 November 2008 – Prize Draw of the Untung Beliung BritAma program, with the grand prize of a Range Rover and 16 March 2009 (Jakarta) weekly prizes of 120 All New Nissan X-trail and 680 cash checks of Rp20 million each.

30 November 2008 BRI together with Perum Perumnas undertake the socialization program for the subsidized KPR/ (Surabaya) KPRS home financing.

2 December 2008 BRI organized an Exclusive Talk Show, the Andy F. Noya Forum, entitled “Facing the Impact of (Jakarta) Second Waves Global Crisis”, at Ritz Carlton Hotel, Pacific Place. AWARDS 2008

14. Annual Report 2008 Bank Rakyat Indonesia

Infobank Magazine Bisnis Indonesia Daily Best Performing Bank Banking Efficiency Award, SOE Bank Category

Investor Magazine Forbes Magazine: Best Bank of 2008 Asian Fabulous 50 Bank BRI, the only company from Indonesia to make it into the Forbes Fabulous 50 list

SWA & Stern Steward & Co Alpha Southeast Asia Best Public Companies Based Best Bank in Indonesia on Wealth Added Index, Method, First in Banking Category

SWA Magazine MRI & Infobank Magazine In Cooperation with Perbanas Third Best SMS Banking & Synovate Consultants: Consumer Banking Excellence Award

SWA and MARS Magazines MRI & Infobank Magazine Indonesian Best Brand Award The Rising Star Bank in Service and Prospective Brand Excellence

Asiamoney ABFI Banking Award & Best Domestic Bank in Perbanas Indonesia Best Banking Performance 2008

Finance Asia Best Bank in Indonesia Thirty Million Customers of BRI, Growing and Prospering Over Time

15. Annual Report 2008 Bank Rakyat Indonesia

BRI continues to develop and improve the service quality of its banking network which as at year-end 2008 had comprised more than 5,400 Operating Units, and growing.

There are at least four key reasons why BRI has Second, BRI has been entrusted as one of the approximately 30 million customers who rely on its state-owned banks to implement the government banking services that are truly rooted in the daily lives cash management system through the Treasury of a broad segment of the public - much broader and Single Account that aims to increase the efficiency of deeper than the banking service of any other major managing the state budget cash flows through a single bank in the country today - whether private or state- bank account. This trust once again places BRI in the owned banks. forefront of public finance policies and implementation that are beneficial to the interest of the general public. First, BRI is deeply concerned about the economic welfare and growth of the low-to-middle income group Third, BRI has committed itself to be the primary people that still account for the majority of Indonesia’s transactional banking conduit - the National Payment population of some 240 million people. This concern Gateway bank of Indonesia - by relying on advanced is manifested among other things by the strong banking technology that is constantly upgraded, a emphasis that BRI places on the micro, small and banking network that stretches to the far corners of medium-sized enterprise (MSME) banking segment, Indonesia, and a customer base that is unmatched by as well as the Bank’s active role in supporting the KUR any bank in the country today. (People Business Loan) program that has recently been promulgated by the government. Fourth, BRI continues to expand and enhance the service quality of its banking network which as at year- end 2008 had comprised more than 5,400 Operating Units, and counting. With a network of such breadth and depth, BRI continues to solidify its position among the 10 largest banks in Indonesia today, climbing to being the second largest bank in terms of assets, and the number one bank in terms of profitability in 2008. Big and Bountiful Treasury Single Account Treasury SingleAccount KUR -PeopleBusinessLoan bank creditmuchlessattainingone. keeping, orhasnograspwhatsoeveroftheconcept maintain proper accountingorevenrudimentarybook- bankable becausetheylackadequatecollaterals,donot feasible businessesintheirownright,butarenot The problem isthatsomanyoftheseMSMEsare the nationalGross DomesticProduct (GDP)output. and accountingforanestimatedcontributionof53%to to absorbthenationalworkforceisalsoconsiderable, extraordinarily significant.Thepotentialofthissegment The growth potentialoftheMSMEitselfisactually bank loans. business units.Merely35%ofthatfigurehaveaccessto MSME throughout Indonesiaisapproximately 48million Statistical dataindicatesthatthetotalnumberof related theseMSMEbusinesses. livelihoods inoneformoranothertoeconomicactivities or approximately 120millionpeopledependtheir is estimatedthatroughly halfofthenation’spopulation businesses arethebackboneofnationaleconomy.It Micro, smallandmedium-sizedenterprise(MSME) banks ortheso-calledOperating Bank. is subsequentlytenderedtoappoint theimplementing Single Account(TSA)Theopening ofthissingleaccount Rekening KasUmumNegara/RKUN)ortheTreasury single account,namelyStateGeneralCashAccount(or and expenditurehavesincebeenmadethrough a receipt Pursuant totheaboveLaw,allofgovernment so manybankaccounts. effectively, andincreasesadministrativecostfrom having time, makesitalmostimpossibletomanagetreasury to accountfortheexactamountoftreasuryatanygiven the country.Thisposesaproblem forthegovernment accounts arescatteredinnumerous banksthroughout receiptandexpenditure Treasury, thegovernment Prior totheenactmentofLawNo.12004onState families, aswellprofitability tothebankingsector. economy, generatingincomeandgrowth formillionsof strengthening thebackboneandjointsofnational KUR offerssomanybenefitstograss root economies, exceeded 95%. whereas intermsofnumberdebtors,BRI’sshare wise, BRIaccountedfor73%oftheKURmarketshare, 1,615,973 debtors.Thismeansthat,disbursement- BRI disbursedmorethanRp9.2trillionofKURto total of1,671,668individualdebtors.Ofthosefigures, KUR hadreachedoverRp12.6trillion,encompassinga As atyear-end2008,thenationwidedisbursementof that arepartiallycoveredbycreditinsuranceagencies. Small BusinessesandCooperatives,through bankloans scheme isaimedatsupportingthegrowth ofMicro and Business Loanscheme,otherwiseknownasKUR.The breakthrough through thedevelopmentofPeople hasinitiateda Aware ofallthis,thegovernment Payment Gatewaybankinthenear future. opportunity thatitaffordsBRIto become aNational largest benefitthatcanbederived from theTSAis will bemadethrough theTSA.Moreimportantly, funded bythestatebudget,expenditure ofwhich Furthermore, BRIcanprovide loanstoprojects thatare of statetreasurythatisremittedviatheTSAwithBRI. as benefittingfrom thelow-costfundsondeposits be derivedfrom beingtheTSAoperationalbank,such There arenumerous businessopportunitiesthatcan throughout Indonesia. Offices comprisingof162StateTreasuryService appointed asOperatingBankOne(OB1)for27Regional Ministry ofFinance,BRIwonthetenderandwas Offices oftheGeneralDirectorateTreasury to becometheOperatingBankserve30Regional From anumberofbanksthatparticipatedinthetender National Payment Gateway

For a bank with the scale of operations as huge as is poised to achieve its goal of becoming a National BRI’s - with a customer base of more than 30 million Payment Gateway bank. By serving as national accounts, tens of thousands of proprietary or joint payment gateway, the Bank will not only be able ATM networks, and e-Banking delivery channels such strengthen its customer base further, but also increase as phone banking or SMS banking services - the its fee-based income. opportunity to serve as a National Payment Gateway is wide open. To that end, BRI continues to invest in information technology, enhance the integration of its banking A national payment gateway system aims to facilitate network, service and infrastructure, while also preparing quick, reliable and beneficial financial payment its people accordingly in order to support a truly transactions. With customers numbering in the tens effective platform for the payment gateway operations. of millions, equally robust ATM and branch networks, and the support of advanced banking technology, BRI

Banking Network

With a strong focus on the MSME business segment, 45 Sharia Banking Branch Offices. Of these, a total of BRI has the largest banking network of any bank in 3,879 BRI offices have been linked on-line and real-time. Indonesia. In 2008 alone, BRI added more than 400 The electronic links of BRI’ network will continue until all Operating Units, which means that for each day of the of the Bank’s Operating Units are linked on a real-time year, the Bank opened more than one new Operating and on-line basis. Unit to serve its customers. BRI will continue to expand and develop its banking As such, as at year-end 2008, BRI has had more than network, reaching more areas that are potential for the 5,400 Operating Units that are spread throughout Bank to grow its business sustainably over the long-term. Indonesia, comprising of 14 Regional Offices, 372 Branch Offices, three Overseas Offices, 337 Sub-branch Offices, 179 Cash Offices, 4,417 BRI Units, 76 Service Posts, and Report of the President Commissioner

18. Annual Report 2008 Bank Rakyat Indonesia

Bunasor Sanim President Commissioner 19. Annual Report 2008 Bank Rakyat Indonesia

Assalamu’alaikum Wr. Wb.

With the good grace of God Almighty, BRI was able to Board of Commissioners expresses its appreciation improve its performance in 2008 compared to that of and gratitude to the Management of BRI and each and 2007, despite the global economic crisis, the impact every employee of the Bank for their tireless efforts of which was beginning to be felt by the Indonesian and support in 2008. We hope that these efforts and banking sector during the closing months of 2008. support will continue to accompany the Bank in order The benchmark interest rate of at to maintain and increase the Bank’s sustainable growth year-end 2007 was 8.00% and in line with the policy of in the future. Bank Indonesia in anticipation of the impact from the global economic crisis, the interest rate was increased The macro economic conditions of Indonesia in 2009 to 9.25% as at year-end 2008. The increase was are expected to be clouded by the impact of the obviously responded by the banking sector through global economic crisis, such as declining exports and interest rate adjustments for deposits and loans that lower economic growth compared to those of 2008. suit the conditions of the respective banks.

As an integral part of the national banking sector, Bank Rakyat Indonesia successfully navigated through 2008 with encouraging results compared to those of the previous year.

As an integral part of the national banking sector, Bank The potential adverse effects of the global crisis, Rakyat Indonesia successfully navigated through 2008 should be anticipated Bank-wide by taking all efforts with encouraging results compared to those of the and fully implement the principles of good corporate previous year, evident among other things through the governance (GCG) and risk management effectively. increase in total assets by 20.78%, growth of credit In that regard, the Board of Commissioners remains by 41.36%, a rise in Loan to Deposit Ratio to 79.93%, committed to directing the Bank to produce maximum a decline of gross NPL to 2.80% as well a net NPL shareholder value that is also sustainable. The Board to 0.85%. The Bank’s operating efficiency ratio was of Commissioners expects that GCG could be an also managed at around 48.83%. In terms of credit, integral part of the Bank’s culture and awareness the growth of credit in 2008 was among other things that is inherent in the day-to-day activities of the attributed to the growth of Kredit Usaha Rakyat (people organisation. In addition to the effective implementation business credit) that accounted for 18.24% of the of GCG and risk management, the impact of the global Bank’s total credit growth. economic crisis could be anticipated or even mitigated by accurately assessing future events and from there, The improved performance as indicated above, formulate the right business strategy, considering that resulted in an impressive achievement of net profit a turbulent external conditions are likely to influence the amounting to Rp5.96 trillion in 2008, an increase of Bank. 23.16% from that of the previous year. Credit expansion in 2009 should remain focused This achievement was undoubtedly the fruits of on new product innovation in the field of credit, hard work involving the Bank’s management and in order to support the government’s program employees with the support of stakeholders. The including Kredit Usaha Rakyat and implementing the 20. Annual Report 2008 Bank Rakyat Indonesia

Agriculture Revitalising Program in agriculture, project as well as adequate supporting systems and management, fisheries and food security. The Program infrastructures; is carried out by maintaining the prudential principles as 2. The achievement of financial performance or results well as focusing on the productive MSME sector, and should be followed by social responsibilities and a minimum total of MSME loan component of 80%. In care for the broader community that encompasses funding, the strategy for market penetration to increase education, health care, and the environment; funds accumulation to complement the Treasury Single 3. Innovation and adoption of new technology and Account of which BRI is an Operating Bank needs new ways should be applicable for the MSME to be sharply formulated in the face of tough market business through continuing research and competition. development; 4. The international reputation of BRI in micro banking The Board of Commissioners will continue to undertake should be enhanced continuously; and its supervisory duties over the Bank with the help of 5. The commitment towards the development of Bank Committees under the Board of Commissioners, which BRI Syariah should be maintained. comprise of the Audit Committee, the Nomination and Remuneration Committee and the Risk Management The optimism of the Board of Commissioners Monitoring Committee. Supervision by the Board of is also based on the Bank’s strength in terms of Commissioners begins with a formulating discussion competent personnel, an extensive branch network, on the goals and strategies of the Bank to be adopted a large customer base, a solid and stable business in 2009, followed by the periodical monitoring of fundamental that is supported by a reliable information the implementation of work plans that represent the technology. Allow me to take this opportunity to report elaboration of the respective strategies. On the basis of that there has been no change in the composition of the goals and strategies that have been set for 2009, the Board of Commissioners in 2008 as presented the Board of Commissioners is optimistic that the herein. Bank’s performance in 2009 will be able to meet its growth targets despite the macro economic turbulence that may arise as a result of the continuing global May God Almighty blesses and guides us all in our economic crisis. future endeavours.

Several key points that require the full attention of the Bank in 2009 and beyond, are as follows: 1. Business growth should be complemented by the availability of high quality human resources

Bunasor Sanim President Commissioner Board of Commissioners

21. Annual Report 2008 Bank Rakyat Indonesia

From left to right : B.S. Kusmuljono, Baridjussalam Hadi, Saifullah Yusuf, Bunasor Sanim, Aviliani, Agus Suprijanto, Agus Pakpahan

1. Bunasor Sanim 5. B. S. Kusmuljono President/Independent Commissioner Independent Commissioner

2. Agus Pakpahan 6. Baridjussalam Hadi Commissioner Independent Commissioner

3. Agus Suprijanto 7. Aviliani Commissioner Independent Commissioner

4. Saifullah Yusuf Commissioner Report of the Board of Directors

22. Annual Report 2008 Bank Rakyat Indonesia

Sofyan Basir President Director 23. Annual Report 2008 Bank Rakyat Indonesia

“In terms of total assets, BRI climbed from third to second position. Whereas in terms of net profit, BRI has since 2005 maintained the distinction of being the most profitable bank in the country.”

Assalamu’alaikum Wr. Wb.

With gratitude towards God Almighty for His rose from 8% to 9.25%. The Rupiah depreciated by benevolence, allow me on behalf of the Board of approximately 20% to the US dollar and the nation’s Directors of Bank Rakyat Indonesia to report to the foreign currency reserves dipped to around US$50 Bank’s shareholders and other stakeholders, some of billion; whereas inflation went up as high as 12.14% the key highlights and results of BRI for the year ending (year on year) mainly due to the price of crude oil 31 December 2008. which reached its peak of US$147 per barrel. Inflation receded to 11.9% by year-end 2008 as oil price also The national banking sector grew rapidly during the first subsided. semester of 2008, boosted by the considerable pace of economic growth, the soaring prices of Indonesia’s This development had a negative impact on Indonesia’s main commodities in world markets, and stable macro- national banking sector, which among other things economic conditions that were reflected in relatively had to contend with declining net interest margins, low bank interest rates, controllable inflation rates, and tightening credit liquidity and decreasing bank a strong Rupiah currency due to the growing foreign profitability. currency reserves. Despite the unfavourable economic conditions, BRI However, the pace of economic growth retreated achieved sterling results in 2008, supported by the somewhat in the second half of the year, as a result efforts of more than 58,000 personnel, which led to of a widening global financial crisis that was sparked several improvements in the Bank’s standing among by the sub-prime mortgage crisis in the USA, which some of the largest banks in Indonesia. For instance, in ultimately blew up into a monetary crisis and economic the disbursement of credit, BRI rose from second rank recession of global proportion, and the worst ever since in 2007 to first as at year-end 2008. the Depression Era of 1929-1931. In terms of total assets, BRI climbed from third to As a result of the global financial crisis, the annual second position. Whereas in terms of net profit, BRI Gross Domestic Product (GDP) growth rate of has since 2005 maintained the distinction of being the Indonesia declined from 6.3% in 2007 to 6.1% in most profitable bank in the country. 2008. The prime bank interest rate of Bank Indonesia 24. Annual Report 2008 Bank Rakyat Indonesia

In addition to improving our position in the league table We are indeed humbled and thankful for being able to of the ten largest banks in Indonesia today, we also report to our valued shareholders that BRI has been made progress in our services, information technology, able to achieve all of its business targets set out in product development, risk management as well as the Company’s Budget and Work Plan of 2008, as in good corporate governance. All of this was aimed approved by the Board of Commissioners on at achieving our vision and mission to serve as the 18 December 2007. premier bank in the country. For the year ending on 31 December 2008, BRI posted With the improvements, BRI has succeeded in a net income of Rp5.96 trillion, an increase of 23.16% building a more solid foundation while also increasing from that of 2007. The net income was mainly derived the momentum for sustainable long-term growth as from a 17.70% increase in net interest margin and net mandated by our shareholders and the Bank’s other Sharia margin amounting to Rp19.65 trillion in 2008, stakeholders. compared to Rp16.70 trillion in 2007. In addition, other operating income also increased significantly by During the past several years, BRI has arisen and 39.17% from Rp1.82 trillion in 2007 to Rp2.54 trillion made great efforts to harness and integrate the Bank’s in 2008. resources in order to maximize our opportunities to capture market growth. These resources include a An equally healthy growth was also recorded by BRI service network that comprises of 5,400 Operating in the figures of total assets, earning assets, and Units reaching out to the far corners of Indonesia, an third-party funds, which grew in the order of 20.78%, ATM service network that covers tens of thousands 35.30% and 21.70% to Rp246.08 trillion, Rp228.78 of ATM units at home and abroad, and other forms of trillion and Rp201.54 trillion, respectively, in 2008. electronic banking services that are at par with those provided by other major banks in the country. BRI succeeded in enhancing its financial intermediary role, as reflected in our total outstanding loans as at Of no less importance has been the strategic step year-end 2008, which amounted to Rp161.11 trillion, taken by BRI over the past several years to increase increasing by 41.36% from Rp113.97 trillion in 2007. its banking penetration in the 14 largest cities of In addition to being above the national average credit Indonesia. Several lending and funding products that growth rate of 30.5% in 2008, our growing credit are more suited to urban communities were developed increased the Bank’s loan-to-deposit ratio (LDR) from in 2008, with encouraging results. The move has 68.80% to 79.93% as at year-end 2008. positioned BRI as a bank that is highly regarded by Indonesian from all walks of life, among rural and urban Our credit disbursement remains focused on the MSME communities. This is because the Bank had been (micro-small-medium-sized enterprise) sector that to equally successful in strengthening both its rural and this day constitutes the core strength of BRI with its urban banking franchises, establishing a truly solid overreaching service network, in addition to the fact platform that would support sustainable growth over that this sector represents the backbone of the national the long-term. 25. Annual Report 2008 Bank Rakyat Indonesia

“BRI has disbursed a total of Rp9.2 trillion of KUR and reached out to 1.5 million new debtors. Backed by and adequate loan guarantee, the KUR scheme has become an effective means of providing credit to the micro and small business sector that is previously beyond the reach of bank financing.”

economy that touches the lives and livelihoods of most any other KUR-disbursing bank in the market today. of Indonesia’s current population of approximately 240 Backed by a credit guarantee that covers 70% of the million people. credit value, the KUR scheme has become an effective means of providing credit to the micro and small More than half of this population rely their livelihoods business sector that is previously beyond the reach of on the agricultural, plantation, traditional markets, bank financing. retail trade and the micro, small and medium-sized businesses that constitute BRI’s primary credit In line with an ever growing presence in the micro, portfolio. Indeed, our involvement in the MSME market small and medium-sized businesses, BRI has forged today has become even more crucial in the wake of a a strong alliance with several financial institutions of global economic recession that is presently upon us. national-scale as well as with state-owned enterprises. These efforts are being led by the Bank’s Directorate With the anticipated decline in global export-import of Institutional Business that was formed in 2007. In activities in 2009, we believe that economic growth hindsight, the move proved to be beneficial as we now dynamics will depend largely on the domestic market. seek to harness our collective strengths and resources This is where the role of BRI becomes key as we to counter the unwanted effects that a global economic continue to support the business activities of MSME recession may have on the national economy. that largely cover the domestic market. Meanwhile, in the commercial banking sector, BRI also One of the more prominent roles of BRI in the MSME participates actively in various credit syndications to market segment was our successful drive in the finance major infrastructure projects such as toll roads, disbursement of the Kredit Usaha Rakyat (KUR) - power plants and others. Large-scale infrastructure People Business Loan - that has been in progress projects tend to produce broad trickle-down effects since 2007. KUR is a credit program that is aimed at that also benefit small and medium-sized businesses micro and small businesses that are feasible but not that represent our core target market. Moreover, these yet bankable. As at year-end 2008, BRI had disbursed projects open cross-selling opportunities for BRI to a total of Rp9.2 trillion of KUR and reached out to offer services - such as cash management - that are of 1.5 million new debtors, the largest figures among strategic value to the Bank. 26. Annual Report 2008 Bank Rakyat Indonesia

BRI is also making headway in generating third-party In line with our resolve to position the Bank at par with funds, primarily as a source for cost-effective funding. the leading service provider of the banking industry, BRI Fuelled by the success of our marketing ploy, “Untung continues to improve its banking services. A tangible Beliung BritAma” (or literally the “BritAma Winds of result of the service improvements undertaken by the Fortune”) in 2007, we followed up on that success Bank in 2008 was the recognition from Marketing by launching the more powerful Britama-Second- Research Indonesia that acknowledged BRI as The Phase program, ”berkali-kali menangnya”, (“winning Rising Star in Service Excellence from its Bank Service more than once”), which succeeded in gaining new Excellence Monitoring (BSEM) of 19 banks in Indonesia depositors, bringing the total number of savers to 4.5 for the period 2007/2008. The Award was given for million, and generating more than Rp30.65 trillion in BRI’s successful drive to climb from 18th place in the total deposits for BRI as at year-end 2008. 2006/2007 period to 12th currently. In the coming

“The year 2008 proved to be a fast-paced growth and rewarding year for the management and employees of BRI. Undoubtedly, the resilience of Indonesia’s national banking sector will be tested in 2009, including that of BRI’s.”

For the other leading savings product of BRI, namely years, we aim to place BRI among the leading banks in the Simpedes that cover the rural areas throughout Indonesia in terms of customer service. Indonesia, we successfully staged the “Pesta Rakyat Simpedes” (Simpedes Folks Festival) from early July to In order to build our business and quality of service, late August to coincide with the harvest season. These BRI continues to take several initiatives, including the parties involved below-the-line activities in 282 branch expansion of Operating Units. In 2008, we added 400 offices and 14 regional offices of BRI throughout BRI Operating Units to our already extensive service Indonesia. These parties succeeded in generating both network, which was akin to opening more than one unit depositors and deposits with the Simpedes savings each day throughout the year. account. As at year-end 2008, there were in total 18.7 million Simpedes account holders with savings To complement such growth, we develop our human amounting to Rp56.28 trillion. capital on a continuous basis, quantity as well as 27. Annual Report 2008 Bank Rakyat Indonesia

quality-wise. In 2008, BRI recruited 881 permanent Risk management is implemented holistically across employees and more than 17,000 out-sourced every organisational line, on credit risk, market risk, personnel, most of whom were slated for marketing liquidity risk and operational risk, leading to the duties. implementation of risk management pursuant to the Basel II recommendations. In addition, BRI also refers Our strong performance is reflected in the strength of to the guidelines of Bank Indonesia on managing our key financial ratios, which have consistently been the eight risks associated with a commercial bank above average. Returns on assets (ROA) and on equity within the scope of the above-mentioned holistic risk (ROE) were 4.18% and 34.50%, respectively. Whereas management. the Bank had gross nonperforming loan (NPL) ratio of 2.80% as at year-end 2008, and buttressed by a The year 2008 proved to be a fast-paced growth and capital adequacy ratio (CAR) of 13.18% in 2008. rewarding year for the management and employees of BRI. However, the year 2008 was also ominous for the Not to be outdone is the implementation of good global economic crisis that it brought. Undoubtedly, the corporate governance (GCG) through the engagement resilience of Indonesia’s national banking sector will be of rules and standard operating procedures that tested in 2009, including that of BRI’s. Nevertheless, have also been improved. Faced with a banking we remain highly confident of the Bank’s ability to environment that will require greater prudence with maintain a sustainable growth and achieve its goal of respect to uncertainties in the global economy, BRI being the largest and best bank in Indonesia, with a has prepared itself in optimising the functions of significant role in the national economic development. corporate governance, risk management and internal controls. BRI has and will always adhere to all prevailing On behalf of the Board of Directors, allow me to laws and regulations, uphold the principles of good express our gratitude to all of our customers and the corporate governance encompassing transparency, people of Indonesia for the trust and support that accountability, responsibility, independency and they have given BRI over the years. We also express fairness; and enhance the roles of committees in taking our appreciation to the Government of Indonesia, important decisions of the Bank. A more detailed shareholders, the Board of Commissioners and the discussion on the Bank’s corporate governance is Sharia Supervisory Board, as well as to all of our presented in the chapter on Corporate Governance of business partners with whom BRI has continued to this Annual Report. forge beneficial relationships. Last but not least, we owe a big debt of gratitude to all of our employees, for their tireless efforts and contributions to the advancement of BRI. 28. Annual Report 2008 Bank Rakyat Indonesia

On the occasion, we would also like to report that In my opinion, the highly conducive working there has been no change in the composition of the environment at BRI was a key factor behind our Board of Directors during the year under review. I achievements in 2008, and God Willing, in the years to am also pleased to emphasize that the Directors of come. BRI work effectively as a team, and maintain good working relations with one another, as well as with the employees and Labour Unions of the Bank.

Sofyan Basir President Director Board of Directors

29. Annual Report 2008 Bank Rakyat Indonesia

From left to right : Lenny Sugihat, Suprajarto, Sudaryanto Sudargo, Sofyan Basir, A. Toni Soetirto, Asmawi Syam, Sarwono Sudarto, Bambang Soepeno, Abdul Salam, Sulaiman A. Arianto

1. Sofyan Basir 6. A. Toni Soetirto President Director Director of Consumer Business

2. Sarwono Sudarto 7. Lenny Sugihat Director of Operations Director of Credit Risk Control

3. Abdul Salam 8. Bambang Soepeno Director of Finance Director of Compliance/ Risk Management 4. Sudaryanto Sudargo Director of Commercial Business 9. Asmawi Syam Director of Institutional Business 5. Sulaiman A. Arianto Director of Micro, Small and 10. Suprajarto Medium Enterprises Business Director of Network and Services Organisational Structure

30. Annual Report 2008 Bank Rakyat Indonesia

Shareholders Meeting

Board of Commissioners

Sharia Supervisory Board Board of Directors

President Director (CEO)

Director of Director of Director of Director of Director of MSME Consumer Commercial Institutional Network and Business Business Business Business Services

Micro Business Funds Services General Business Institutional Retail Business Division Division Division Relations Network Division Division

Retail Loans Credit Card Agribusiness Division Division Division SOE Business Micro Business Division Network Division Program Consumer Business Division Loans Division Cash Management Services Desk Division Sharia Business Marketing Unit Communications Division Special Branch Regional Offices Office Sharia Branch Offices Branch Offices 31. Annual Report 2008 Bank Rakyat Indonesia

COMMITTEES*

COMMITTEES**

Director of Director of Director of Director of Credit Risk Compliance/Risk Finance Operations Management Management

Treasury Credit Risk Risk Operations Cen- Internal Division Analysis Division Management tre Division Audit Division

Financial & Loans Information Corporate Management Restructuring & Strategic System and Secretariat Accounting Recovery Planning Division Technology Division Division Division Division

Legal Human International Credit Division Logistics & Resources Business Division Administration Fixed Assets Management Division Management Division Compliance Division Overseas Division Offices Education & Training Division

*) Committees under BoC : Audit Committee, Nomination & Remuneration Committee, Risk Management Monitoring Committee **) Committees under BoD : Risk Management Committee, Credit Policy Committee, Credit Committee, ALCO, Human Resources Committee, IT Committee Serving from Sabang to Merauke generated third-party fundstotallingRp201.54trillion. and trillion Rp161.11 totalling loans disbursed had BRI 2008, year-end at As trillion. Rp5.96 of income net and trillion, Rp19.65 by BRIeachday.In2008,allofBRI’s OperatingUnitsgeneratedinterest incomeofRp28.10trillion,netinterest incomeof out carried are transactions banking of Millions Indonesia. in network banking largest the operates that bank a as BRI making More than5,400BRIOperatingUnitsserveapproximately 30millioncustomersacross Indonesiafrom SabangtoMerauke,

Comparative Data between BRI and the National Banking Sector

34. Annual Report 2008 Bank Rakyat Indonesia

Loan Market Share Loan to Deposit Ratio (LDR)

1,500 12.32 11.40 % 11.15 11.36 100 10.81 10.86 10.00% 74.58 1,000 66.32 59.66 61.56 1,307.7 49.95 50 1,002.0 Rp billion 5.00%

500 792.3 695.6 559.5 75.69 79.93 161.1 68.80 77.83 72.53 113.9 90.3 62.4 75.5

440.5 0 47.6 0 0.00% 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008 BRI Commercial Bank Commercial BRI % to Commercial Bank Bank

Banking Sector Banking Sector Aggregate loan outstanding by the banking sector in As at year-end 2008, the LDR of the national banking Indonesia grew by 30.51% to Rp1,307.7 trillion as at year- sector reached 74.58% with a growing trend. end 2008. BRI BRI In line with national banking trend, BRI’s LDR rose to Lending by BRI has grown significantly over the years, its 79.93% as at year-end 2008. This indicates that BRI was loan market share to 12.32%. In 2008, BRI loans rose by able to fulfil its financial intermediary role effectively to fuel 41.36% to Rp161.1 trillion from Rp113.9 trillion in 2007. the growth of grass root economies.

Deposit Market Share Ratio of Low-Cost Funds

% 11.49 2,000 12.00% 10.96 80 9.67 8.59 8.60 1,600 60 8.56 56.29 55.87 7.00% 49.91 52.21 52.96 1,200 40 1,753.3 Rp billion 800 1,510.8 20

1,287.1 2.00% 70.31 68.79 69.23 66.10 63.51

1,127.9 0 400 2006 2007 2008 963.1 2004 2005 201.5 124.5 165.5 82.4 97.0 888.6 76.3 0 -3.00% BRI Commercial Bank 2003 2004 2005 2006 2007 2008 Commercial BRI % to Commercial Bank Bank

Banking Sector Banking Sector Total deposits of the national banking sector grew by In 2008, the ratio of low-cost funds within the national 16.05% from Rp1,510.8 trillion to Rp1,753.3 trillion as at banking sector reached 52.96%. year-end 2008 BRI BRI BRI has been able to maintain the composition of its As at year-end 2008, BRI’s market share of its deposits low-cost funds to account for more than 60% of total had increased to 11.49%. During the year, third-party deposits, in order to sustain a level of NIM that is targeted. deposits at BRI reached Rp201.5 trillion, an increase of As at year-end 2008, savings and demand deposits at BRI 21.70% from Rp165.5 trillion in 2007. accounted for 63.15% of total deposits. 35. Annual Report 2008 Bank Rakyat Indonesia

Net Interest Margin (NIM) Non Performing Loan (NPL) Ratio

% % 7.56 15 8.00 7.00

12.16 12.15 6.07

11.16 6.00 10.86 10.18 4.5 10 5.00 4.07 4.00 3.2 5.80 5.70 5.88 5.63 3.00 5 5.66 2.00 1.00 4.19 4.68 4.81 3.44 2.80 0 0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008

BRI Commercial Bank BRI Commercial Bank

Banking Sector Banking Sector The average NIM within the national banking sector in the The loan quality within the national banking sector has past five years was in the range of 5% to 6%. In 2008, the continued to improve, marked by the decline in non average NIM was 5.66%. performing loans to just 3.2% in 2008.

BRI BRI The Net Interest Margin of BRI in the past five years had Over the past five-year period, the rate of NPL at BRI had been consistently above 10%, backed by a business always been below the NPL of the national banking sector. model and a composition of third-party funds that are In 2008, BRI had a lower NPL of 2.80%. more than adequate.

Return on Assets (ROA) Capital Adequacy Ratio (CAR)

%

25.00 % 21.27 19.42 19.30 19.30 20.00 7.00 16.76 6.00 15.00 5.00 4.00 3.46 2.64 2.78 10.00 3.00 2.55 2.33 2.00 5.00 16.19 15.29 18.82 15.84 13.18

1.00 5.77 5.04 4.36 4.61 4.18 0 0 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 BRI Commercial Bank BRI Commercial Bank

Banking Sector Banking Sector ROA of the national banking sector reached 2.33% in During the past three years, the CAR of the national 2008. The relatively low ROA was mainly due to the decline banking sector has shown a declining trend. In 2008, the in profitability of national banks as a result of the global average CAR of national banking decline to 16.76% from economic crisis. 19.3% in 2007.

BRI BRI Over the past five years, BRI had consistently In 2008, BRI posted a CAR level of 13.18%, a decline from outperformed the ROA of the banking sector. the previous year due to the fact that the pace of business In 2008, the ROA of BRI was 4.18%. growth of BRI was faster than that of capital accumulation. Management Discussion and Analysis of the Company’s Results of Operations and Financial Condition 36. Annual Report 2008 Bank Rakyat Indonesia

General Overview of the Company financing working capital or other purposes. KUR is a new loan product launched in late

Growth of Simpedes Committed to Micro, Small and Medium 2007 aimed at eligible small businesses that Enterprises (MSMEs) are unable to meet banking requirements. KUR 60 CAGR: 21.04% BRI is strongly committed to supporting is a platform offering loans of up to Rp500 the growth of Micro, Small and Medium million with loan guarantees of 70% from 40 Enterprises. This can be seen from BRI’s range credit insurance institutions. As of the end of of diverse financial products and services be December 2008, BRI has been able to serve 20 they savings or loan products, a major portion approximately 1.6 million new KUR customers. Rp trillion of which is intended to serve the Micro, Small In terms of BRI’s total loans, nominal micro- 26.22 29.76 38.68 46.60 56.28 0 and Medium Enterprises sector. credit loans constitutes approximately 30% of

2004 2005 2006 2007 2008 the total credit portfolio, but if seen in terms

Growth of BritAma On the savings side, BRI is committed to of total debtors, the proportion of micro- maintaining its composition of low cost funds, borrowers represents more than 70% of total

40 CAGR: 20.66% which are savings and demand deposits. customers. In addition to micro-credit, BRI Simpedes and BritAma are BRI’s premier also has diverse commercial loan schemes to savings products. Simpedes is a product support small, medium and large enterprises. 20 for the middle to low income groups to save Whereas in the consumer segment, BRI Rp trillion their money in the bank. Whereas BritAma provides salary-based, mortgage loans (KPR),

0 14.46 15.97 19.03 24.88 30.65 is targeted at the more affluent members of motor vehicle loans (KKB), multi-purpose loans

2004 2005 2006 2007 2008 society. National marketing programs have (KMG) and other loan schemes. been held for both of BRI’s leading savings products namely “Simpedes Folks Festival”, In general, the distribution of loans to the which was held in 282 cities across Indonesia Micro, Small and Medium Enterprises for the Simpedes savings product, alongside (MSMEs) sectors, always constitutes a high the “Untung Beliung BritAma” (BritAma Winds portion year-on-year (above 80%) as shown in of Fortune) program, held in major cities the table below: nationwide. Whereas for demand deposits, the role of BRI in the Treasury Single Account Percentage of Loans per Business Segment in the Years 2004 – 2008 program gives BRI a broad opportunity to BUSINESS 2004 2005 2006 2007 2008 improve its demand deposits performance be SEGMENT Growth of Micro Loans it nominally or in terms of the total amount of Micro 30.77 30.17 30.22 28.60 26.54 Small/Retail 51.08 50.42 48.27 46.69 46.61 demand deposits. 50 CAGR: 22.17% - Commercial 28.02 28.01 27.05 27.38 27.66 - Consumer 23.06 21.90 21.22 19.30 18.95 40 On the lending side, BRI offers premier Medium 4.59 6.25 8.22 7.33 7.73 Total MSMEs 86.44 86.83 86.71 82.62 80.88 30 products such as Kupedes and Kredit Corporation 13.56 13.17 13.29 17.38 19.12 20 Usaha Rakyat (KUR). Kupedes is BRI’s leading product of great interest to micro- Rp trillion 10 entrepreneurs, either for investment needs, BRI’s marketing efforts and customers are 0 19.19 22.78 27.28 32.60 42.76 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 37. Annual Report 2008 Bank Rakyat Indonesia

supported by a very wide network sharia business and in anticipation of the Loans Disbursement by Regional Office In developing its business growth, BRI has a sharia banking development in Indonesia, BRI distinct competitive advantage in having the has seen the need for a Sharia Bank and has widest network and operations as compared therefore spun-off its Sharia Business Unit into to other banks in Indonesia. BRI has more the aforementioned Sharia Bank. than 5,400 offices located throughout the country, both in major as well as minor cities, The Extraordinary General Shareholders and even in rural areas. Meeting convened on 5 September 2007, approved the acquisition of BRI Bank Jasa Jakarta I & II 28.77% Makasar 7.38% In addition to its branch network, BRI has, as Arta. The acquisition process was completed 7.56% 4.17% of the end of 2008, 1,796 ATMs (Automated on 19 December 2007. Following the Semarang 5.06% Banda 1.63% Jogyakarta 6.36% Teller Machines). BRI is a partner in the ATM acquisition, Bank Jasa Arta was converted Medan 5.45% Surabaya 14.17% Link, ATM Bersama and ATM Prima network, into a commercial sharia bank in accordance Padang 3.87% Banjarmasin 3.84% which has more than 35,000 ATMs across with Deed No. 45 on 22 April 2008 by Denpasar 5.00% Palembang 6.73% Indonesia. BRI is also a member of the Notary Fathiah Helmi, SH with the name Cirrus and Maestro ATM network, therefore PT Bank Syariah BRI (BSB). Based on the BRI customers can use their ATM card in Letter of Decree by the Governor of Bank machines that have the Cirrus and Maestro Indonesia. 106/KEP.GBI/DpG/2008 on 16 logos around the world. Apart from ATMs, BRI October 2008, BSB obtained permission to has, in 2008, added to its electronic network change its commercial banking activities from in terms of Kiosk BRI, Cash Deposit Machine conventional banking into sharia banking, (CDM) and Electronic Data Capture (EDC), whose business activities are carried out which is intended to make it easier for its based on the Islamic sharia principles. customers to access BRI’s banking services. On 19 December 2008, BRI carried out a spin- In order to improve the company’s image and off of its sharia banking unit, by integrating it to introduce more of its products, BRI has into PT Bank Syariah BRI as per the notarial conducted promotional and public relations deed No. 27, dated 19 December 2008 by activities, either through electronic media, Notary Fathiah Helmi, SH with the effective print media, and media rooms. With effective date of separation on 1 January 2009. marketing campaign efforts, BRI is able to maintain its customer base. Operational Performance Review

Conversion of Bank Jasa Arta to PT Bank The figures below, with exception of the ratios, Syariah BRI includes the subsidiary, PT Bank Syariah Besides undertaking conventional banking BRI (BSB), with total assets of PT BSB as of business, BRI operates sharia banking 31 December 2008 amounting to Rp483.15 activities through its Sharia Business Unit billion. (UUS). In order to optimise the growth of its Net Interest Income 38. Annual Report 2008 Bank Rakyat Indonesia

In the financial year ended 31 December 2008, 80.15% of total interest income. While the Composition of Earning Assets BRI recorded a net interest income of Rp19.65 contribution of income from interest on bonds 2007 – 2008 trillion, an increase of 17.70% compared to in respect to total interest income declined

(in Rp trillion) Rp16.70 trillion from the corresponding period from 8.69% in 2007 to 6.95% in 2008. 180.00

161.11 in 2007. 160.00 The growth in interest income, from Rp23.24 Other Operating Income 140.00

120.00 113.97 trillion in 2007 to Rp28.10 trillion in 2008, or During 2008, other operating income reached 100.00 an increase of 20.89% was due to an increase Rp2.54 trillion, up by 39.17% compared to 80.00 in interest income, investment securities and Rp1.82 trillion in 2007. The largest contribution 60.00 51.32

40.00 36.90 sharia financing. The increase in net interest to other operating income was fee-based 18.22 20.00 16.35 income in 2008 was contributed by the growth income, which rose 21.38% from Rp1.46 0 2007 2008 in lending granted as a result of the credit trillion in 2007 to Rp1.77 trillion in 2008. The Loans expansion, which improved the loan quality various components of fee-based income Recap Bonds and increased other interest income. include, among other things, administrative

Other Earning Assets fees from savings deposits, trade finance, On the other hand, there is an increase in remittances and credit cards. interest expenses and sharia financing from Rp6.54 trillion in 2007, to Rp8.45 trillion in Earning Assets Provision 2008, or a rise of 29.06%. The increase in While the provision for possible losses from interest expenses was caused by the tight earning assets and other assets amounted liquidity conditions in the second semester to Rp1.94 trillion in 2007, BRI posted of 2008, which increased competition for provisions for earning assets and other assets funding, and resulted in the increase of the of Rp2.84 trillion in 2008, thereby incurring proportion of BRI’s high-cost funds to total an increase of 46.38%. The increase in the Third Party Funds from 33.90% in 2007 to provisioning expense was due to BRI’s large 36.49% in 2008. On average, BRI’s cost of credit expansion during 2008. In addition, funds in 2008 increased to 4.69%, compared the increase in said costs also reflects BRI’s to 4.52% in 2007. cautious attitude.

On its net interest income in 2008, BRI Other Operating Expenses recorded a net interest margin (NIM) of In 2008, other operating expenses rose 10.18%, slightly below 10.86% in 2007. This by 21.92%, from Rp9.02 trillion in 2007 to decrease was mainly due to the unfavourable Rp11.00 trillion in 2008. This resulted in an interest rate climate during the second half increase of the ratio of operating expense of 2008. Loans still represent the largest to operating revenue to 72.65% in 2008 contributor to interest income, accounting for compared to 69.80% in 2007. However, the 39. Annual Report 2008 Bank Rakyat Indonesia

increase in the ratio was still within reasonable management will ensure BRI’s ability to meet limits, because of BRI’s significant business all financial obligations at maturity, and with expansion with the opening of approximately adequate liquidity, BRI has the ability to pursue 400 new offices in 2008. every business opportunity that exists.

Net Profit Therefore, BRI has empowered the ALCO With the increasing scale of business Committee (Asset-Liability Committee) to operations, supported by efforts to monitor, measure and anticipate the risks maintain growth in net interest income and associated with the balance of its assets and management fees, BRI’s net profit grew liabilities, in the management of the Bank’s by 23.16%, from Rp4.84 trillion in 2007 to balance sheet. Rp5.96 trillion in 2008. Assets Financial Performance Review BRI’s total assets as of 31 December 2008 reached Rp246.08 trillion, an increase of General Responsibility and Management of 20.78% compared to Rp203.73 trillion Assets-Liabilities in 2007. The increase was mainly due to There were no fundamental changes to BRI’s the expansion of loans and the increase management policies on assets and liabilities in other earning assets in 2008. The total in 2008 from previous years, whereby BRI assets comprise of net earning assets (net gave emphasis to the policy of sustainable of provisioning) of 89.39%, and non-earning earning assets; the allocation of earning assets assets of 10.61%. The percentage of earning based on the comparison of commensurate assets to total assets was much higher in returns against risks; and in terms of liabilities, 2008 than that of in 2007 (79.52%), and the policy of maintaining the ratio of low cost reflected the successful implementation of the funds (savings and demand deposits) to at earning assets policy, as mentioned above. least 60% of the third party fund reserves. In order to anticipate the likely decrease in Earning assets include loans, placements with liquidity in the banking sector in general, as Bank Indonesia and other banks, securities, a result of the global economic recession, in Government Bonds, receivables, and equity 2008 BRI also set its policies on asset and investments. Meanwhile, non-earning assets liability management with the goal of securing include cash, reserves with Bank Indonesia, BRI’s liquidity. fixed assets and other assets.

Timely and prudent asset and liability Earning Assets 40. Annual Report 2008 Bank Rakyat Indonesia

Growth of Consumer Loans Total earning assets before provisions as of its diversity in which loans are spread broadly

CAGR: 20.70% 31 December 2008 amounted to Rp228.78 and equitably across Indonesia. This reduces 40 trillion, a 35.30% growth from Rp169.09 trillion the concentration of credit risk in any particular

30 in 2007. Loans (including sharia financing) region. represented the largest component of earning 20 assets, accounting for 70.42% of earning Loan Quality Rp trillion 10 assets, increasing from 67.40% in 2007. Loans with Current category rose 41.34% 0 14.38 16.54 19.15 22.00 30.53 The portion of Government Bonds declined from Rp105.04 trillion in 2007 to Rp148.46 from 10.78% in 2007 to 7.15% in 2008, due trillion in 2008, while loans in the Special Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 to maturity. Meanwhile, the proportion of Mention category increased by 62.98% from Rp4.99 trillion to Rp8.13 trillion, and Non Growth of Small Commercial other earning assets to total earning assets, Loans including Bank Indonesia Certificates (SBI), Performing Loans increased by 14.52% from 50 CAGR: 26.34% rose from 21.82% in 2007 to 22.43% in 2008. Rp3.94 trillion to Rp4.52 trillion. 40 The accumulated allowance for possible The Non Performing Loans (NPL) ratio 30 losses on earning assets as of 31 December 2008 increased by Rp1.74 trillion, or 24.60%, improved, from 3.46% in 2007 to 2.80% in 20 to Rp8.81 trillion, in line with the growth of 2008. The decline in NPL occurred in the Rp trillion 10 earning assets of 35.30% during the year. Micro Loan segment from 1.19% to 1.02%,

0 17.47 21.55 24.42 31.09 44.52 Small Commercial Loans from 5.77% to Loans 3.52%, Small Consumer Loans from 1.67% Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Loan disbursement, including sharia financing, to 1.08% and Corporate Loans from 4.62% to 4.53%. However, the NPL for Medium- Growth of Medium Loans posted significant growth of 41.36%. Total outstanding loans as of 31 December 2008 Sized Loans experienced a slight increase 15 CAGR: 44.43% reached Rp161.11 trillion, significantly higher from 5.67% to 6.33%. The NPL net ratio also than Rp113.97 trillion in 2007. Of the total improved from 0.88% at the end of 2007 to 10 outstanding loans in 2008, 26.54% was 0.85% at the end of 2008. The improvement in disbursed as Micro Loans, 46.61% as the NPL ratio was mainly due to the increase

5 Small Loans/Retail, 7.73% as Medium-Sized in the amount of current loans by as much as

Rp trillion Business Loans, and 19.12% as Corporate Rp43.42 trillion, compared with the increase

2.86 4.72 7.42 8.35 12.45 of NPL of Rp0.58 trillion in 2008. On the other 0 Loans. Small/Retail Loans consist of Small Commercial Loans of 27.66% and Consumer hand, NPL Coverage Ratio in 2008 increased Dec-04 Dec-04 Dec-04 Dec-04 Dec-04 Loans, including salary-based loans, slightly to 177.27% from 176.45% a year ago. amounting to 18.95%. Growth of Corporate Loans Government Recapitalisation Bonds

From the composition of loans disbursed, it As of 31 December 2008, the portfolio of 40 CAGR: 38.13% is evident that the portion of loans to Micro, Recap Bonds totalled Rp16.35 trillion, down 30 Small and Medium Enterprises (MSME) by 10.26% from Rp18.22 trillion in 2007. The

20 segment declined slightly from 82.62% in decrease in the amount of bonds was due to the maturity of Rp1.2 trillion of these bonds in

Rp trillion 2007 to 80.88% at the end of 2008. 10 9.94 12.00 19.81 30.80

0 8.46 One of the strengths of BRI’s loan portfolio is Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 41. Annual Report 2008 Bank Rakyat Indonesia

2008. The proceeds from the Recap Bonds Funds generated reached Rp201.54 trillion, were mainly used to finance the Bank’s loans up by 21.70% compared to Rp165.60 trillion Growth of Savings to productive business sectors, providing in 2007. The growth was mainly due to the 100 CAGR: 18.57% direct benefits to the people of Indonesia. significant increase in the number of BRI 80 branches in 2008, and an active marketing The proportion of the Recap Bonds to total program. Third Party Funds accounted for 60 Rp trillion assets decreased from 8.94% in 2007 to BRI’s largest liability, accounting for 90.08% of 40 6.65% in 2008. Similarly when compared the Bank’s total liabilities as of 31 December 20 against total earnings assets, the portion of 2008. 44.57 49.37 58.31 72.30 88.08 these Recap Bonds declined from 10.78% in 0

2007 to 7.15% in 2008. Demand deposit is a source of low-cost funds 2004 2005 2006 2007 2008 in addition to savings, and at the end of 2008, Of the total amount of Recap Bonds in 2008, a the total amount of demand deposits reached total of Rp11.08 trillion, or 67.77%, were fixed- Rp39.92 trillion, up by 7.43% from Rp37.16 rate bonds, while a total of Rp5.27 trillion, or trillion in 2007. While Savings increased by 32.23%, were floating rate bonds. 21.82% from Rp72.30 trillion in 2007 to Rp88.08 trillion in 2008, the ratio of savings to Other Earning Assets Third Party Funds increased from 43.66% to Growth of Demand Deposits The position of other earning assets as 43.70%. This increase in savings position was 50 CAGR: 31.47% at year-end 2008 amounted to Rp51.32 mainly attributed to the success of the Bank’s 40 trillion, an increase of 39.10% from that of promotions of its savings programs as well the 2007. This growth was mainly due to BRI’s development of various features of savings 30 Rp trillion increased liquidity which were placed on Bank products that attracted the public to bank with 20 Indonesia’s instruments. Other components BRI. 10 of earning assets include Non-Recap Bonds, 0 13.36 17.38 27.86 37.16 39.92 Bank Indonesia Certificates (SBI), Bank Time Deposits posted a significant increase, Indonesia Facility (FASBI), placements in other i.e. from Rp56.14 trillion in 2007 to Rp73.54 2004 2005 2006 2007 2008 banks, and marketable securities such as trillion in 2008, or a 30.99% increase. This stocks, export bills and commercial notes. resulted in the increase of the portion of Time Deposits to Third Party Funds from 33.90% Third Party Funds in 2007 to 36.49% in 2008. The growth in Third Party Funds (TPF) represent funds Time Deposits was due to the aggregate rise mobilized from the public savings deposits in total bank deposits, the “flight to quality” in the form of Savings, Demand Deposits tendency, and the rise of the interest rates of Growth of Time Deposits and Time Deposits (including Certificates Time Deposits. CAGR: 31.67% of Deposits). Included in Third Party Funds 80 are sharia compliant savings products, such Subordinated Debts 60 as Giro Wadiah, Mudharabah Savings and 40 Mudharabah Time Deposits. Rp trillion

20

As of 31 December 2008, total Third Party 0 24.47 30.29 38.29 56.14 73.54 2004 2005 2006 2007 2008 42. Annual Report 2008 Bank Rakyat Indonesia

Subordinated debts were issued in order to strengthen The Return on Assets (ROA) before tax in 2008 was BRI’s capital structure (especially Tier II capital). Total 4.18%, slightly less than ROA of 4.6% in 2007. The subordinated debts amounted to Rp710 billion as of Return on Equity (ROE), which reflects returns to 31 December 2008, down from Rp2.14 trillion in the shareholders, increased from 31.64% in 2007 to previous year. This significant decrease in subordinated 34.50% in 2008. debts was due to BRI’s execution on the option to redeem the subordinated debts amounting to Capital Expenditure US$150 million on 30 October 2008. A more detailed In 2008, BRI’s capital expenditure amounted to explanation about the subordinated debts can be seen Rp633.96 billion, consisting of Rp190.05 billion for in Note 26 of the Notes to the Company’s Consolidated information technology, and Rp443.92 billion in non-IT Financial Statements that is presented in this annual purchases. The capital spending in 2008 was higher report. than that of 2007, which reached Rp390.55 billion, consisting of Rp40.79 billion for IT spending and Equity Rp349.77 for non-IT spending. As of 31 December 2008, BRI’s equity position amounted to Rp22.36 trillion, an increase of 15.02% Loan Write-offs from Rp19.44 trillion in 2007. The increase in equity Loan write-offs (principal) by BRI in 2008 amounted to was derived mainly from the appropriation of the net Rp1,544.23 billion, a decrease of 27.31% compared profit for 2007 as stipulated in the Bank’s 2008 Annual to Rp2,124.36 billion in 2007. Loans which had been General Meeting of Shareholders and the current year written-off before the financial year 2008, but recovered profit of 2008. during the year, amounted to Rp473.99 billion, down by Rp110.59 billion, or 23.30%, from 2007. Capital Adequacy BRI’s Capital Adequacy Ratio (CAR) at the end of Tax Contribution 2008 stood at 13.18%, lower than 15.84% in 2007. Other than the contribution of dividends, BRI pays The decrease in CAR was due to the growth of risk- taxes to the government. In accordance with weighted assets (total loans and other earning assets), Government Regulation No. 81/2007 on Income Tax which rose faster than the growth of profit in order to Rates Reduction for Public Limited Liability Companies, strengthen the Bank’s capital. BRI obtains tax incentives in the form of a 5% reduction in corporate income tax, from the highest prevailing The following table shows the calculation of BRI’s tax rate. However, with BRI’s increasing scale of capital adequacy ratios at the end of 2008 and 2007. operations, its tax contribution in 2008 still showed a 7.34% increase compared to that of 2007.

(in Rp billion)

Description 2008 2007 Tax Contribution of BRI from 2004-2008

Core Capital (Tier 1) 17,796 15,448 Additional Capital (Tier 2) 1,945 1,819 Placement (553) (209) Total Available Capital 19,188 17,059 Total Risk Weighted Assets (RWA) 145,581 107,711 Capital Adequacy Ratio (CAR) 13.18% 15.84%

Returns 43. Annual Report 2008 Bank Rakyat Indonesia

(in Rp billion) Description 2008 2007

Description 2004 2005 2006 2007 2008 Capital CAR with Credit Risk 13.67 16.66 I. Head Office CAR with Credit Risk and Market Risk 13.18 15.84 A. Income Tax (PPh) Fixed Assets/Capital 24.13 26.14 1. PPh Article 4 (2) Final 472.25 519.80 945.08 940.11 1,082.53 2. PPh Article 15 Assets Quality 3. PPh Article 21 Classified Earning Assets 2.18 2.22 4. PPh Employees 319.90 417.18 397.62 407.95 539.25 Provisioning for Earning Assets/Earning Assets 3.75 4.05 Article 21 (WAPU) Provisioning Coverage on Earning Assets 150.20 161.20 5. Corporate Tax (PPh Provisioning Coverage on Non-Earning Assets 100.66 100.00 Badan) NPL Gross 2.80 3.44 a. PPh Badan Article25 2,208.61 1,829.25 1,831.88 3,310.97 3,382.85 NPL Net 0.85 0.88 b. PPh Badan Article 29 Compliance 6. PPh Article 22 Percentage of Violation of Legal Lending Limit 7. PPh Article 22 (WAPU) 5.98 7.71 5.04 4.00 4.35 Related Parties 0.00 0.00 8. PPh Article 23 (WABA) Non Related Parties 0.00 0.00 9. PPh Article 23 (WAPU) 82.64 34.80 35.44 41.04 39.85 Percentage of Excess of Legal Lending Limit 10. PPh Article 25 Related Parties 0.00 0.00 11. PPh Article 25 (WAPU) Non Related Parties 0.00 0.00 B. Value Added Tax (VAT) Minimum Reserves Requirement in Rupiah 5.57 22.09 1. VAT Goods and Services Net Open Position 13.55 7.90 a. Outgoing 2.98 2.46 2.68 1.97 3.85 b. Incoming 2. VAT for Luxury Goods (PPnBM) C. Land and Building 4.62 5.24 6.14 6.98 7.38 Minimum Reserves Requirement Tax (PBB) In accordance with the regulation of Bank Indonesia, D. Customs and Excise E. BPHTB the Minimum Reserves Requirement for BRI is F. Other Taxes* SUBTOTAL 3,096.88 2,816.43 3,223.88 4,713.02 5,060.06 5%. At the end of 2008, BRI’s Minimum Reserves

II. Region Requirement was 5.57%. The position at the end of the A. Motor Vehicle Tax 12.99 13.57 13.55 9.07 8.73 B. Motor Vehicle Transfer previous year was 22.09%. Tax C. Fuel Tax D. Others * Net Open Position SUBTOTAL 12.99 13.57 13.55 9.07 8.73 TOTAL (I + II) 3,109.87 2,829.99 3,237.43 4,722.08 5,058.80 Based on Bank Indonesia’s regulation, the Net Open

* Detailed is according to the tax paid by the company Position (NOP) of the Bank is capped at a ceiling of 20% of capital. At the end of 2008, BRI’s NOP ratio Financial Ratios with Respect to Transparency was 13.55%. The table below shows BRI’s financial ratios which are related to aspects of transparency in accordance with As of 31 December 2008, BRI had met all statutory the provisions set forth by Bank Indonesia. mandatory ratios, as determined by the laws and

(in %) regulations of Bank Indonesia. In addition, a significant number of the key financial ratios as presented in the table above, indicates BRI’s strong financial fundamentals, its outstanding performance, and the financial intermediary role that the Bank carries out in a professional, transparent and responsible manner. Report on Corporate Governance

44. Annual Report 2008 Bank Rakyat Indonesia

Manuals, the implementation of Good Corporate Governance is also based on other internal regulations that are in line with the existing laws and regulations and the principles of Good Corporate Governance.

To meet the regulations of Bank Indonesia while simultaneously boosting BRI’s performance that would result in enhanced investor trust, Bank BRI has an obligation to disseminate GCG Report, one of the indicators in the implementation of Good Corporate Governance.

The following information shows the implementation of GCG in BRI in 2008.

Corporate Governance Structure

General Meeting of Shareholders The General Meeting of Shareholders (GMS) has the For the purpose of enhancing the company’s authority to appoint and terminate members of the performance, protecting stakeholders’ interests, Board of Commissioners and Board of Directors, and improving compliance with the existing laws, approve changes to the Articles of Association, regulations, and ethical values common in banking endorse the Annual Report of the Bank, appoint the industry, it is indispensable to implement Good external independent auditors, and determine the type Corporate Governance (GCG). and amount of remuneration for members of the Board of Commissioners and Board of Directors. Through its Commissioners, Directors, and employees, Bank Rakyat Indonesia is committed to implementing The resolutions of the Annual GMS of BRI on 26 May GCG principles on the basis of the core values stated 2008 are presented in full in the Shareholder Information in the BRI Corporate Culture, consisting of integrity, section of this Annual Report starting from page 7. professionalism, customer satisfactions, role model, and human resources appreciation. The core values, I. Board Of Commissioners: which are intended to build BRI Codes of Conduct, have been implemented by BRI’s employees of all Structure, Composition, and Independency of Members layers. These values provide clear and measurable of the Board of Commissioners (BOC) references for their way of thinking and behaving, BRI‘s BOC comprises of seven members, four of and are expected to take BRI to the objectives of whom are Independent Commissioners. The number implementing Good Corporate Governance. and composition of the BOC are in accordance with the regulation, in that it does not exceed the number In relation to BRI Commissioners’ and Directors’ of Directors of the Bank (10 Directors), and that commitments, BRI has designed the Board Manuals Independent Commissioners account for more than specifying clearly the roles and responsibilities of half (50%) of the members of the BOC. All of the Commissioners and Directors. In addition to the Board Commissioners are based in Indonesia. 45. Annual Report 2008 Bank Rakyat Indonesia

Composition of the Board of Commissioners 2008 Plan and Annual Budget as well as other plans that are submitted by the Directors, pursuant to the

No Name Position letter of the Bank’s Articles of Association. Other

1. Bunasor Sanim President Commissioner/Independent liabilities include among other things to propose Commissioner at the General Meeting of Shareholders on the 2. Agus Suprijanto Commissioner appointment the Public Accounting Firm that will 3. Agus Pakpahan Commissioner 4. Saifullah Yusuf Commissioner audit the financial statements of the Bank. 5. B.S. Kusmuljono Independent Commissioner 6. Baridjussalam Hadi Independent Commissioner 7. Aviliani Independent Commissioner In accordance with its authority, the Board of Commissioners has provided the followings: The Board of Commissioners has adequate integrity 1. Approval for the Bank’s Business Plan and Budget and competencies, pursuant to the requirements of the 2008 fit & proper test of Bank Indonesia. BRI Commissioners 2. Approval for the Bank’s Business Plan 2008-2010. do not hold concurrent positions as Commissioners, 3. Approval for Organisational Restructuring. Directors or Executive Officers in any other bank or 4. Approval for the Revision of the General Credit financial institution, and do not have familial ties with Policy. other members of the Board of Commissioners and 5. Approval for the Spin-off Execution of the Sharia Board of Directors. Business Unit and its consolidation into Bank BRI Syariah that has been decided by the GMS. Duties and Responsibilities of the Commissioners. 6. Recommendations and Advisories in connection 1. The Board of Commissioners is responsible with the site visits of the Commissioners to several for overseeing the policies and management in BRI Operating Units. general, whether of the Bank or of its business that is under the management of the Board of Directors Committees of the Board of Commissioners (BOD), and to provide advise to the BOD including Audit Committee: oversight on the execution of the Bank’s Business Plan and Budget, rules under the Articles of Structure, Membership, Expertise, and Association, resolution of the GMS, and prevailing Independency of Audit Committee’s Members laws and regulations, in line with the interest of the Audit Committee consists of one chairperson‑an Bank as well as its goals and objectives. Independent Commissioner‑and four members. The 2. In undertaking the above duties, the Board of chairman as well as all members of the committee Commissioners is authorised to among other things has adequate expertise, background knowledge, and request clarification from the Board of Directors experience. The following is the composition of the and /or other officials on issues pertaining to the Audit Committee in 2008: Bank, and to form Committees to support the effective discharge of the Commissioners’ duties Name Membership Position and responsibilities. The Commissioners have Aviliani Chairperson Independent Commissioner established three committees: Bunasor Sanim Member President Commissioner/ a. The Audit Committee; Independent Commissioner b. The Risk Management Monitoring Committee; Saifullah Yusuf Member Commissioner H.C. Royke Singgih Member Non Commissioner c. The Nomination and Remuneration Committee. Dedi Budiman Hakim Member Non Commissioner 3. The Board of Commissioners is expected to Syahrir Nasution Member Non Commissioner provide an opinion and approval over the Business 46. Annual Report 2008 Bank Rakyat Indonesia

Profiles of Audit Committee Members through Commissioners asked some subordinating The profiles of Aviliani, Bunasor Sanim, and Saifullah managements to attend the meetings and provide Yusuf are presented in the brief resume of the necessary relevant information. Commissioners on pages 114 to 117 of this Annual Report. The Audit Committee has convened meetings with the subordinates of Management and external parties H.C. Royke Singgih – born in Jakarta, 13 March 1960. including with the Public Accounting Firm of Ernst & Appointed as a member of the Audit Committee Young and the Consulting Firm, Delloite Consultants. since October 2005. A certified public accountant, The Audit Committee undertakes the active oversight he previously served with Bank IFI, PT Pan Indonesia duties of the Board of Commissioners through regular Bank, Jakarta and PT Krakatau Steel. He earned a meetings with the Internal Audit Unit. degree in Accountancy from University of Gajah Mada, (1986) and a Master in Management Frequency of the Audit Committee Meetings degree in Finance and Banking from University of The Audit Committee convened Meetings for a total Indonesia, Jakarta (2000), in addition to obtaining of 17 times in 2008, with the following attendance a Specialty Certification for Strategic Management records: Studies, Pre Doctoral Program, , Name Membership Attendance (%) Jakarta (2004). Aviliani Chairperson 100.00 Bunasor Sanim Member 100.00 Dedi Budiman Hakim – Born in Sumedang, 22 October Saifullah Yusuf Member 58.82 1964. Appointed member of the Audit Committee since H.C. Royke Singgih Member 100.00 Dedi Budiman Hakim Member 88.24 2005. Currently serving as a Faculty Member of the Syahrir Nasution Member 88.24 Agricultural University (IPB) and a Researcher The agenda of the Audit Committee meetings in 2008 at the Centre for Applied Finance and Economics were as follows: (interCAFE) IPB. He is also an active newspaper columnist and scientific journal writer. He holds a No Date Agenda

degree in Agronomics Science from IPB (1988), a 1. 4 Jan 2008 Kick Off General Audit for 2007. Master of Arts degree in Agriculture Social Economics 2. 21-23 Jan 2008 Internal Audit Coordination Forum. 3. 12 Feb 2008 Enhacing the Internal Audit Function from Massey University, Palmerston North, New 4. 25 Feb 2008 Progress of General Audit in 2007. Zealand (1994), and a Doctorate in Agriculture from 5. 26 Feb 2008 Vision, Mission and Strategy of the SOE Busi- ness and Institutional Relations Division Georg-August-Universitaet, Goettingen, Germany. 6. 19 Mar 2008 Discussion on the Preliminary Findings of Perti- nent Matters of Bank Indonesia. Syahrir Nasution – born in Pematang Siantar, 21 7. 10-11 Apr 2008 Discussion on the BRI GMS of 2007 8. 22 Apr 2008 Elevation of the Compliance Desk into the September 1952. Appointed member of the Audit Compliance Division Committee since 2008. Previously a career banker with 9. 29 Apr 2008 Report of the Audit Findings for Fourth Quarter of 2007 and quarterly audits for 2008. BRI (1990-2008) in the fields of Inspection and audit. 10. 12 May 2008 IT personnel in the implementation of BRINets He holds a degree Economics and Accountancy, from 11. 9 Jul 2008 Issues related to IT Institute of Finance Sciences, Jakarta (1981). 12. 17 Jul 2008 Discussion on the Independent Financial Report, Management Letter of 2007, and management Information System Duties and Responsibilities of Audit Committee 13. 22 Jul 2008 Report of the Audit Findings for First Quarter of 2008 and Internal Control Sysytem In 2008, Audit Committee undertook their functions, 14. 23 Jul 2008 Issues, Challenges and Strategies of IT duties, and responsibilities in accordance with 15. 6 Aug 2008 Review on the progress of BRINets. the Audit Committee Charter. In conducting its 16. 9 Sep 2008 Report of the Audit Findings for Second Quarter of 2008 meetings with other Operating Units, this committee 17. 24 Sep 2008 General Audit Plan for 2008 47. Annual Report 2008 Bank Rakyat Indonesia

Realization of Audit Committee Work Program i. Undertake research on the transformation The Audit Committee conducted its working programs of Internal Audit’s functions as a Strategic in 2008 as follows: Business Partner in the implementation of Risk‑Based Audit by distributing questionnaires 1. Internal Activities and conducting in‑depth interviews a. Design Audit Committee’s plans and work programs as per the Audit Committee Charter. 2. External Activities b. Convene meetings with Internal Audit (IA) to a. Participate in the seminars related to Audit discuss internal control system, and the audit Committee’s functions, such as those findings especially those which are deemed to conducted by The Institute of Internal Auditor have potential risks that could compromise the (IIA) Indonesia Chapter, and the Indonesian business continuity of the Bank. Audit Committee Association in order to c. Convene meetings with the Accounting and boost competencies and capabilities of Audit Financial Management Division and other Committee related divisions to discuss the Bank’s financial b. Hold discussions with external auditors, either performance and other financial information. before or after the investigations regarding d. In addition to the above divisions, meetings findings in the financial statements of the Bank. were also held with other divisions, including c. Hold discussions with other parties, especially Strategic Planning Division, Procurement those related to the effectiveness enhancement and Fixed Assets Management Division, and of the internal audit function Credit Administration Division to discuss issues related to the functions of those respective 2. Nomination and Remuneration Committee organisational units and BRI performance. (NRC) e. Convene regular meetings (weekly) with the Nomination and Remuneration Committee, Structure, Memberships, Expertise, and Risk Management Monitoring Committee and Independency of NRC’s Members the Secretary of the Board of Commissioners Nomination and Remuneration Committee to discuss important issues related to the is chaired by an Independent Commissioner effectiveness of Commissioners’ functions, comprising 5 members with adequate expertise roles, and responsibilities. and independency. f. Evaluate and provide written reports to the Commissioners on every meeting and The composition of the nomination and assignment given to Audit Committee. Remuneration Committee as of 31 December 2008 g. Attend meetings concerning the formulation of were as follows: BRI GCG guidelines, evaluate the performance of the Internal Audit Unit and communication Name Membership Position forum, and visit several Regional Audit Offices, B.S. Kusmuljono Chairman Independent Commissioner Regional/Branch Offices in an attempt to obtain Aviliani Member Independent Commissioner direct information on the problems of the Agus Pakpahan Member Commissioner respective Operating Units. M. Jarot Eko Winamo Member Non Commissioner/Executive Officer Eko Boedi Soelistiyo Member Non Commissioner h. Present materials in the trainings conducted by Indira A. Suleiman * Member Non Commissioner the Regional Audit Office. *) Resigned from NRC membership effective 30 September 2008. 48. Annual Report 2008 Bank Rakyat Indonesia

Profiles of The Members of the Nomination and A. The Nominating Function Remuneration Committee 1. Analyse, compose and give recommendations concerning the system and procedures of The profiles of B.S. Kusmuljono and Agus election and/or replacement of members of the Pakpahan, and of Aviliani, are stated in the Boards of Commissioners and Directors to the Commissioners’ Curriculum Vitae in pages 114- Board of Commissioners; 117 of this Annual Report. Indira A. Suleiman 2. Recommend candidates for Commissioners resigned as a member of the Nominations and and/or Directors to the Board of Remunerations Committee of BRI on 30 September Commissioners; 2008. 3. Monitor the execution and analyse the criteria and procedures of selection for Officers one M. Jarot Eko Winarno – born in Sleman, 9 level below that of the Directors; January 1959. Member of the Nominations and 4. Compose performance evaluation system of the Remunerations Committee since August 2007. Boards of Commissioners and Directors; Climbed his career at BRI since 1983 in various 5. Recommend the number of members of the positions, currently he is the Head of Human Boards of Commissioners and Directors; Resources Management Division. Obtained his 6. Give opinions or advice to the Board of Bachelor in the Social Economics of Agriculture, Directors on the transfer and/or appointment IPB (1982) and his MBA in Marketing from Drexel decisions of non-Bank workers to becoming University, United States (1992). officers one level below that of Directors; 7. Analyse the data of officers one level below that Eko Boedi Soelistiyo – born in Brebes, 16 of Directors submitted quarterly by the Board of May 1968. Member of the Nominations and Directors and on each change occurring; Remunerations Committee since 2007. Climbed 8. Recommend to the Board of Commissioners his career at BRI since 1993 in various positions, concerning Independent Parties that will be currently he is a staff in the HR Welfare Department, members of the Audit Committee or the Risk Human Resource Management Division Head Management Monitoring Committee. Office. Obtained his Bachelor in Civil Laws, University, Semarang (1992) and his B. The Remunerative Function M.Si in Agribusiness from Gadjah Mada University, 1. Evaluate prevailing remuneration policies for Yogyakarta (2007). the Board of Commissioners, the Board of Directors, and the Employees of BRI; Duties and Responsibilities of NRC 2. Recommend to the Board of Commissioners On the basis of the Guidelines on the Duties of the followings: the Commissioners and Committees as well as a. Remunerative policies for the Board of the Charter of the Nomination and Remuneration Commissioners and the Board of Directors; Committee of 21 June 2008, the Nomination and b. Overall remunerative policies for the Remuneration Committee is a committee that Executive Officers and employees of BRI to has been formed by the Board of Commissioners be submitted to the Board of Directors. in order to support the effectiveness of 3. Recommend the granting of options to Commissioners’ duties and responsibilities, especially those related to nomination and remuneration policies. 49. Annual Report 2008 Bank Rakyat Indonesia

the Board of Commissioners, the Board of Commissioners, the Board of Directors, and the Directors, and the employees of BRI, among Secretary of the Board of Commissioners after prior others the stock option; consultation with the holder of the Golden Series A 4. Recommend the pension plan for BRI Share. employees; 5. Recommend the system of compensation Frequency of NRC Meetings and other benefits in the matter of employee NRC meetings are conducted at least once a month reductions in BRI. and at any time necessary. The decisions in the committee meeting are made on consensus basis. If C. Miscellaneous consensus cannot be reached, decisions are made on 1. Evaluate and provide recommendations to majority voting basis. the Board of Commissioners on employment policies and other functions in HR management Meeting attendance records of members of the NRC in that may have a significant impact on financial 2008: and/or legal risks to BRI; Name Membership Attendance (%) 2. Provide recommendations to resolve internal and/or external audit findings and the results of B.S. Kusmuljono Chairman 100,00 Aviliani Member 100,00 Bank Indonesia monitoring activities, specifically Agus Pakpahan Member 88,89 for policies in HR management; M. Jarot Eko Winamo Member 100,00 Eko Boedi Soelistiyo Member 100,00 3. Execute the administer documents related Indira A. Suleiman * Member 100,00 to the duties and responsibilities of the *) Resigned from NRC membership effective 30 September 2008. Committee.

Procedures for Setting Remunerations of Directors, The Agenda of the NRC meetings in 2008 were as Commissioners, and Secretary to Commissioners follows: NRC composes the salary/honorarium formulas for the Board of Directors, the Board of Commissioners, and No Date Agenda the Secretary of the Board of Commissioners based on 1. 18 Jan 2008 Discussion on the activities and the work agenda of NRC for 2008. the Circular of the Secretary of the Ministry of State- 2. 19 Feb 2008 Discussion on the progress of the spin-off owned Companies No. S-326/S.MBU/2002 dated project and HR treatment of BRI Sharia unit. 3. 15 Apr 2008 Discussion on preparation of BRI GMS for 3 May 2002. This salary/honorarium formula is then financial year 2007. submitted to the Board of Commissioners for approval 4. 6 May 2008 Discussion on the follow-up of the letter from of the Board of Commissioners and the Board of BRI’s Labor Union pertaining to wage increase. 5. 24 Jun 2008 Discussion on the BOD proposal on facilities for Directors, then submitted for consultation to the holder Directors, Commissioners and Secretary to the of the Golden A Share to be decided later in the AGMS. Commissioners. 6. 4 Jul 2008 Discussion on the facilities provided to the Directors, Commissioners and Secretary to the Procedures for Determining Other Facilities/Benefits for Commissioners the Board of Commissioners, the Board of Directors, 7. 14 Aug 2008 Discussion on the remuneration for Directors and Commissioners. and the Secretary of the Board of Commissioners 8. 2 Sep 2008 Discussion on the resignation of Indira A. Based on the decision of the AGMS dated 22 May Suleiman from the Committee 9. 7 Nov 2008 Discussion on the results of interviews of 2007, the AGMS grants authority to the Board candidates to the Board of Directors and Board of Commissioners to determine the granting of of Commissioners of Bank Syariah BRI. other facilities and/or benefits to the Board of 50. Annual Report 2008 Bank Rakyat Indonesia

Action Plans and Realization of the Nominations and a. Benefit policy for the Officers and Committees Remunerations Committee of BRI; NRC has executed the following action plans b. HR policy concerning Personnel Grade, throughout 2008: Dismissal Policy, Labour Recruitment and 1. Improve Guidelines and Work Procedures of NRC Outsourcing; (NRC Charter) in the form of the Guidelines on c. HR policy for BRI Sharia Business Unit; the Duties of the Board of Commissioners and its 10. Provide inputs and recommendations related Committees pursuant to Bank Indonesia Regulation to the improvement of the organization of the No. 8/4/2006 on the Implementation of Good Commissioners’ Institutions of BRI, including the: Corporate Governance for Commercial Banks; a. Commissioner Manuals (Manuals and 2. Evaluate the facilities and benefits for the Boards Procedures of Commissioners’ Duties) that of Directors and Commissioners, and give inputs have been standardized in the working manuals concerning the remunerative policies for the Board of the Board of Commissioners; of Directors and the Board of Commissioners b. Duties and responsibilities of the Secretary of in accordance with current market practice and the Board of Commissioners. conditions; 11. Prepare and plan the annual budget of the Board 3. Recommend candidates for the membership to the of Commissioners and the annual budget for Board of Commissioners or the Board of Directors the Board of Commissioners’ Institutions and to the Commissioners for statement in the Annual Committees. General Meeting of Shareholders of BRI; 12. Attend the Board of Directors and the Board of 4. Provide analysis and recommendations for post- Commissioners Meetings that discuss the monthly official pensions for the Board of Directors, Board performance progress of BRI. of Commissioners and Secretary of the Board of 13. Undertake other duties as requested by the Board Commissioners; of Commissioners. 5. Provide recommendations to the Board of Commissioners and interviewing candidates for 3. Risk Management Monitoring Committee (RMMC) membership in the Audit Committee of BRI; 6. Evaluate personnel cost through both internal Structure, Memberships, Expertise, and Independency analysis and comparison with other major banks; of RMMC Members 7. In cooperation with the Audit Committee, the Risk Management Monitoring Committee and the RMMC is chaired by an Independent Commissioner Secretary of the Board of Commissioners assist the with a number of RMMC members who have financial Board of Commissioners in reviewing the evaluation and risk management expertise so as to properly and approval of BRI’s Budget for the year 2008; support their duties and responsibilities. 8. In cooperation with the Audit Committee, the Risk Management Monitoring Committee and the The composition of the Risk Management Monitoring Secretary of the Board of Commissioners assist Committee as of 31 December 2008 was as follows: the Board of Commissioners in reviewing the

evaluations and approvals of the Business Plan of Name Membership Position

BRI for the years 2008-2010; Baridjussalam Hadi Chairman Independent Commissioner 9. Provide opinion and evaluation concerning the Agus Suprijanto Member Commissioner Ridwan Darmawan Ayub Member Non Commissioner policies of HR management, among others: Pamuji Gesang Raharjo Member Non Commissioner 51. Annual Report 2008 Bank Rakyat Indonesia

Profiles of the Members of the RMMC parties that must be approved by the Board of Commissioners. The profiles of Baridjussalam Hadi and Agus Suprijanto 5. Provide opinions and/or recommendations on the are presented in the Commissioners’ Curriculum Vitae granting of credit above a certain amount which on pages 114-117 of this Annual Report. needs a consult with the Board of Commissioners. 6. Provide opinions and recommendations to Ridwan Darmawan Ayub – born in Bogor, 7 July the Board of Commissioners in approving the 1962. Member of the Risk Management Monitoring annual budget, business plan and the long term Committee since 2006. Member of the Risk development plan of the Bank. Management Task Force of Bank Indonesia for 7. Evaluate and analyse the reports of the realization the implementation of Basel II. Previously the Vice of the Bank’s annual budget, business plan and Chairman of the Operational Risk Division, Bank long-term development plan. International Indonesia (2002-2005). Bachelor’s Degree in Social and Political Sciences from the Frequency of RMMC Meetings Parahyangan Catholic University, Bandung (1985) and In view of the wide range and number of the issues a Master’s Management degree in Finance from Mercu related to risk management in BRI that must be Buana University, Jakarta (2008). evaluated, it is agreed that some of the meeting agenda of the committee - such as the discussion of legal Pamuji Gesang Raharjo – born in Jakarta, 10 April risks, operational risks etc. - are included in the weekly 1968. Member of the Risk Management Monitoring Commissioners’ Meeting. Committee since 2007. Previously had careers at BNI, Bank Danahutama, and Bank International Indonesia Meeting attendance records of members of the RMMC in various positions. Holds the Bachelor of Economy in 2008 were as follows: Degree from the Prof. Dr. University, Jakarta

(1996) and an MM in Risk Management from the Name Membership Attendance (%)

University of Indonesia, Jakarta (2003). Baridjussalam Hadi Chairman 100 Agus Suprijanto Member 100 Ridwan Darmawan Ayub Member 100 Duties and Responsibilities of RMMC Pamuji Gesang Raharjo Member 100 1. Regularly evaluate and analyse the adequacy of risk management policies and give opinions in the form The agenda of the RMMC meetings in 2008 were as of suggestions and/or recommendations to the follows: Board of Commissioners concerning the necessary improvement and perfection of risk management. No Date Agenda 2. Review and analyse quarterly risk profiles of the Bank and provide opinions in the form 1. 23 Jul 2008 Issues, challenges and strategies in information technology and system. of suggestions and/or recommendations for 2. 5 Aug 2008 Issues and management of legal risk (collateral necessary improvement and perfection of risk pledging and assets write-off, legal assistance to management and employees of BRI, handling management. of law suits from third parties). 3. Monitor the adequacy of the process of 3. 9 Sep 2008 Working relations between Internal Audit and identification, measurement, monitoring, controlling Risk Management Division of BRI. 4. 23 Sep 2008 Progress of the credit risk management and management system. implementation by the Basel II Project Office 4. Evaluate and analyse the suggestion packages of Team. the Board of Directors for fund provision for related 52. Annual Report 2008 Bank Rakyat Indonesia

Realisation of the RMMC Work Program All of BRI Directors have domicile in Indonesia. RMMC has executed the following action plans They have adequate competency and integrity throughout 2008: in accordance with the fit & proper test 1. Compose the 2008 action plan. requirements. 2. Evaluate the operational risk management tools at BRI (Incident Management, Major Risk Indicators, BRI Directors do not have double positions as Risk and Control Self-Assessments). the Commissioners, Directors, or Executive 3. Review the results of the Risk Management Officers in other banks/institutions, and do not Committee of BRI meetings. have familial relationships with other members 4. Evaluate the Performance Report of the Credit of Board of Commissioners or Board of Portfolio of BRI. Directors. 5. Evaluate the internal and external compliances of BRI. The composition of the Board of Directors of BRI are as 6. Evaluate the General Credit Policies of BRI. follows: 7. Review the quarterly report on the risk profile of

BRI. No. Name Position

8. Give recommendations (suggestions and opinions) 1. Sofyan Basir President Director on the Credits proposal consulted with the Board of 2. Sarwono Sudarto Director of Operations 3. Abdul Salam Director of Finance Commissioners. 4. Sulaiman Arif Arianto Director of MSME Business 9. Review and evaluate the budget of BRI for 2008, 5. Sudaryanto Sudargo Director of Commercial Business including suggestions for its amendments. 6. A. Toni Soetirto Director of Consumer Business 7. Lenny Sugihat Director of Credit Risk Control 10. Accompany the Commissioners in work visits to 8. Bambang Soepeno Director of Compliance/Risk Management several Regional Offices and Branch Offices of BRI. 9. Asmawi Syam Director of Institutional Business 10. Suprajarto Director of Network and Services 11. Attend the Board of Commissioners’ and Board of Directors’ Meetings that discuss the monthly performance progress of BRI. 2. Duties and Responsibilities of the Directors 12. Attend the Commissioners’ Meetings and In undertaking their main duties and Managing Directors in discussing the issues related responsibilities in managing the company, to duties of the Managing Directors in accordance with the decision of General 13. Undertake other duties as requested by the Board Meeting of Shareholders, the fields of each of Commissioners. Director was determined as indicated the table above; and each Director is responsible for his/ II. Board of Directors her field to the President Director.

A. Directors’ Duties and Responsibilities General Responsibilities 1. Number, Composition, Criteria, and 1. Being responsible for the coordination, monitoring Independency The Board of Directors: and leading of the Bank’s management as well The Board of Directors consists of 10 people, as that of individual duties and responsibilities in every one of whom is experienced in banking accordance with the Bank’s interests; operations as Bank Executives for more than 5 2. Maintaining and managing the assets of the Bank. (five) years. 53. Annual Report 2008 Bank Rakyat Indonesia

Compliance to Rules and Regulations will not be divided into amounts smaller than the 1. Loyal and responsible in undertaking duties in regulated credit granted that must be consulted accordance with prevailing rules and regulations; about; 2. Each member of the Board of Directors is 9. Setting the vision, mission, values and corporate individually responsible for his/her own errors or culture of the Bank; neglect in the undertake of his/her duties; 10. Keeping the Bank’s activities in line with the 3. Executing the processes of compliance and business activities and the objectives of the Bank; ensuring that all obligations have been satisfied in 11. Making work plans, annual budgets, and other accordance with the Articles of Association and the plans related to the business of the Bank; AGMS based on prevailing rules and regulations. 12. Approving the remunerations for senior management and key personnel, and maintaining Relations with the Commissioners and Shareholders the consistency of these remunerations with the 1. Ensuring the implementation of the decisions made culture, objectives, strategies, and other duties by the AGMS, the Board of Commissioners and the and responsibilities stated in prevailing Regulations Articles of Association; and the Articles of Association of the Bank and the 2. Providing information to the Commissioners and environs of the Bank; the Shareholders; arranging communication with 13. Balancing the interest of all of the stakeholders of Shareholders, Commissioners, and other interested the Bank. parties, including the duties and responsibilities of the Board of Directors and each member of the Financial Accounting and Annual Reports Board of Directors; 1. Maintaining the bookkeeping and administration of 3. Being responsible to Shareholders and responding the Bank in accordance with accepted practices of to the suggestions of the Commissioners and a company; Shareholders; 2. Composing an accounting system that matches 4. Preparing regular reports on time in accordance the Accounting Standards of Indonesia and the with prevailing rules and regulations and other principles of internal control, especially in terms of reports in accordance with the request of recording, archiving, monitoring and management; Shareholders; 3. Preparing Annual Reports, including Financial 5. The Board of Directors is obligated to hold AGMS Reports, and to account for those reports in the based on the written request of one or more AGMS. Shareholders who have valid voting rights and who represent at the very least 1/10 (one tenth) of the Risk Management and Control number of shares issued; 1. Maintaining the following processes of risk 6. Composing and maintaining a List of Shareholders management: and a Special List containing the possession of a) Ensuring that the Bank has the proper and shares in the hands of the members of the Boards systematic processes in identifying, measuring, of Commissioners and Directors and their families and controlling the risks; both in the Bank and in other companies; b) Ensuring that proper systems and processes 7. Consulting the granting of credit above a certain have been executed in monitoring and reporting amount with reference to prevailing regulations; the main risks faced by the Bank; 8. In relation with the above paragraph 7, the Board of Directors must ensure that the credit granted 54. Annual Report 2008 Bank Rakyat Indonesia

c) Monitoring and evaluating the existence of 4. The delegation of the duties and authorities of each good management processes in assessing the member of the Board of Directors is determined adequacy of the risk management system and by the AGMS. If the AGMS does not determine the internal control, the financial reporting and this delegation of duties and responsibilities, then the compliance; the delegation of duties and responsibilities among d) Ensuring the existence of an effective control the Board of Directors is determined based on the system in order to ensure: decision of the Board of Directors. i. the reliability and integrity of the information; ii. the compliance with the prevailing policies, Compliance Director plans, procedures, rules and regulations; The main responsibilities of the Compliance Director iii. the maintenance of the assets of the Bank; are: iv. the economic and efficient use of resources; 1. Determining the necessary steps to ensure v. the achievement of the determined that the Bank complies with the Regulations of operational objectives and targets. Bank Indonesia and with the prevailing rules and e) Executing annual evaluations for making public regulations; statements concerning internal control at the 2. Monitoring and maintaining the business activities Bank, to ensure that all significant aspects of of the Bank from deviating from prevailing internal control have been considered for the regulations; evaluated year up to the date of the approval 3. Monitoring and maintaining the compliance of the of the annual report. Bank with all agreements and commitments made 2. Creating clear organisational, duty, and by the Bank with Bank Indonesia; responsibility structures, including the appointment 4. Ensuring that the Board of Directors does not of the management; make decisions that violate the regulations of Bank 3. Effectively making use of the audit results of both Indonesia and other prevailing rules and regulations; the Internal and External Auditors. 5. Submitting reports as regulated in Bank Indonesia Regulation No. 1/6/PBI/1999 dated 20 September Specific Responsibilities 1999 concerning the Appointment of the Compliance Director and the Implementation of the President Director: Standards for the Execution of the Internal Audit Representing the bank in coordinating and monitoring, Function of Commercial Banks. and acting as the Head of the Board of Directors. Other Duties Members of the Board of Directors: Other duties and responsibilities are as stated in 1. Developing the action plans for each field of prevailing rules and regulations and in the Articles of responsibility and each Operating Unit lead by each Association of the Bank. Director; 2. Coordinating and monitoring each allocation of Directors’ Meeting responsibility and Operating Unit; The Directors regularly hold internal meetings to 3. Taking all necessary actions to ensure that the discuss issues that require Directors’ consideration and decisions taken by the Board of Directors are in line to discuss other strategic plans. with prevailing rules and regulations; 55. Annual Report 2008 Bank Rakyat Indonesia

The attendance records of the Directors at the Board of Secretary I : Head of Risk Management Division Directors meetings in 2008, were as follows: Secretary II : Head of Credit Administration Division Number of Percentage Name Attendance Meetings (%)

Sofyan Basir 21 17 80.95 Permanent Members with voting rights are Sarwono Sudarto 21 17 80.95 RMC members who have the voting rights Sulaiman A. Arianto 21 19 90.48 when the decision of an issue is not unanimous, A. Toni Soetirto 21 17 80.95 Abdul Salam 21 17 80.95 which would render a vote necessary. Lenny Sugihat 21 16 76.19 Sudaryanto Sudargo 21 19 90.48 Bambang Soepeno 21 19 90.48 Permanent Members with voting rights are all Asmawi Syam 21 18 85.71 members of the Board of Directors. Suprajarto 21 15 71.43

Permanent Members without voting rights are The attendance records of the Directors at the Board officers of one level below the appointed Board of Directors meetings with the Commissioners in 2008, of Directors, comprising of: were as follows: (i) All Heads of Divisions, (ii) Regional Managers of Jakarta I and II Number of Percentage Name Attendance Regional Offices, Meetings (%) (iii) Manager of Special Branch Office. Sofyan Basir 6 6 100.00 Sarwono Sudarto 6 6 100.00 Sulaiman A. Arianto 6 6 100.00 Duties and Responsibilities of RMC A. Toni Soetirto 6 3 50.00 Abdul Salam 6 5 83.33 a. Provide recommendations to the President Lenny Sugihat 6 4 66.67 Director in formulating the General Sudaryanto Sudargo 6 6 100.00 Policies of Risk Management, as well as Bambang Soepeno 6 5 83.33 Asmawi Syam 6 5 83.33 amendments if necessary; and suggesting Suprajarto 6 4 66.67 these to the Boards of Commissioners and Directors for approval. B. Completeness and Execution of Committees’ b. Provide recommendations to the President Duties Director in formulating Risk Management Strategies, including the setting of limits Committees formed in order to support the which overrides the authority of the Head of effectiveness of the execution of the Directors’ the Operating Units, and the formulation of duties and responsibilities are: contingency plans for abnormal conditions (worst case). 1. The Risk Management Committee (RMC) c. Evaluate overall risk composition in the portfolio of the bank. Structure, Memberships, Expertise, and d. Determine (justify) issues related to business Independency of RMC Members decisions which deviate from normal Chairman : President Director (CEO) procedures (irregularities). Chairman I : Director of Compliance e. Evaluate proposals related to new activities/ Chairman II : Director of Credit Risk Control products and judging the ability of BRI to 56. Annual Report 2008 Bank Rakyat Indonesia

execute these new activities/products from RMC’s Action Plans and Realization the risk aspect, and evaluating proposals The RMC Action Plan for 2008 was as the for changes in the system and work above topics and agenda, and the realization of procedures. these plans are as stated In the Follow Through f. Monitor the adequacy of BRI capital Report of RMC. against described risks in accordance with prevailing regulations. 2. Assets and Liabilities Committee (ALCO) g. Evaluate the effectiveness of the applied risk management system. Structure, Membership, Expertise, and h. Grant authority to the Sub-committees of Independency of Assets and Liabilities RMC (Credit Risk Management Committee, Committee Members Operational Risk Management Committee and Market Risk Management Committee) The organization structure of the Assets and to discuss specific issues that need Liabilities Committee is as follows: immediate handling and do not require the Chairman (as well as Member): President involvement of all members of RMC. Director Ad interim Chairman I (as well as Member): Frequency of RMC Meetings Director of Finance RMC conducts meetings regularly, at least 1 Ad interim Chairman II (as well as Member): (once) in 3 (three) months. Besides this regular Director of Consumer Business meeting, RMC may conduct unscheduled Secretary (as well as Member): Head of meetings to discuss urgent matters. Treasury Division

Schedule and agenda of RMC meetings in 2008: Members: 1. Directors

No Date Agenda 2. All Heads of Business Divisions

1. 15 Feb 2008 a. Follow-up Report on RMC IV of 2007 3. Head of Funds Services Division b. Report on Risk and Capital 4. Head of Credit Card Division c. Report on Risk Management Implementation 5. Head of Consumer Loans Division d. Report on Test Planning Switch Over 5 and Evaluation on Testing of Alternate Site for 6. Head of Institutional Relations Division Clearing System 7. Head of Financial and Management e. Profile of BRI Credit Card f. Kick Off Meeting of Micro KUR Accounting Division

2. 4 Jun 2008 a. Follow-up Report on RMC I of 2008 8. Head of Credit Risk Analysis Division b. Report on Risk and Capitalisation 9. Head of Loans Restructuring and Recovery c. Report on Risk Management Implementation Division 3. 22 Sep 2008 a. Effects on implementation of PSAK 50 and 55 b. Follow-up Report on RMC II of 2008 10. Head of Credit Administration Division c. Report on Risk and Capitalisation 11. Head of Risk Management Division d. Report on Risk Management Implementation 12. Head of Strategic Planning Division e. Condition of floor load capacity of BRI Data Centre 13. Regional Managers

4. 19 Dec 2008 a. Effects of the global crisis and anticipative measures by BRI b. Follow-up Report on RMC III of 2008 c. Report on Risk and Capital d. Report on Risk Management Implementation 57. Annual Report 2008 Bank Rakyat Indonesia

Roles and Responsibilities of the Assets and Credit Comitee Members Chairperson Liabilities Committee BRI Credit Committee Director of Commercial Business President This committee is in charge of determining (for loan approval) Director of Institutional Business Director Director of MSME Business the integrated management policies of BRI’s Director of Consumer Business Director of Credit Risk Control assets and liabilities, and ensuring that the BRI Credit Committee Director of Finance President management of assets and liabilities are (for money market Director of Commercial Business Director line and treasury Director of Institutional Business executed in accordance with the policies set. In product approval) Director of MSME Business Director of Consumer Business a broader sense, ALCO is also responsible for Director of Credit Risk Control managing the Bank’s liquidity, setting interest rates, determining the policies for mismatch Apart from the Credit Committee at the Head and net open position, and managing and Office, BRI also has Credit Committees at the determining the financial and capital balance Regional Office level. For credit decisions, BRI structures. applies the principle of prudence by ensuring that each credit decision satisfies the Four Eyes Frequency of Committee Meeting Principle, which involve the Credit Officer and ALCO holds a meeting periodically, at the Credit Risk Control Officer. least once a month in order to discuss the management of assets and liabilities of BRI For decisions in credit restructuring - apart from related to the Directors’ policies and strategies. the Four Eyes Principle in the application of the principle of prudence - decision-making must Realization of the Assets and Liabilities apply the principle of independence between Committee’s Action Plans. the initial decision maker and the restructuring Throughout 2008, ALCO has held 13 meetings. decision maker, as well as keeping in mind the The issues discussed in the ALCO meetings existence of a regulation that states that the were among others the conditions of the money decision must be taken by an officer or credit market and capital market, the bank interest committee of one level higher. rates, and the balance of the asset and liability positions. Duties and Responsibilities of the Credit Committee 3. The Credit Committee The duty of the Credit Committee is to approve Structure, Membership, Expertise, and or reject credits, including the loan addition, Independency of Credit Committee Members extension and additional terms of credit in (1) Based on the memberships and inherent accordance with the limits of authority set by authority, the Head Office Level Credit the Board of Directors; and coordinating with Committee is divided into: ALCO in funding for certain amounts of credit a. BRI Credit Committee set by ALCO. b. Credit Committee at Directors Level c. Credit Committee at Divisional Head Meetings of the Credit Committee are convened Level when new credit decisions or credit extensions d. Credit Committee at Divisional Deputy are needed. Specific to decisions of the Credit Head Level Committee of BRI and the Credit Committee (2) Structure of BRI Credit Committee of the Board of Directors, these are executed 58. Annual Report 2008 Bank Rakyat Indonesia

based on the majority principle, while the The Roles and Responsibilities of Credit Policy decisions of other Credit Committees are taken Committee are as follows: unanimously, or the decision is taken when all 1. Provide inputs to the Board of Directors in members of the Credit Committee agree to it. composing the General Credit Policies of BRI; Apart from that, a credit with a minimum total 2. Monitor the Credit Policy of BRI in that it exposure of Rp300 billion, both for individual is applied and implemented consequently debtors and business groups, must be and consistently; consulted with the Board of Commissioners. 3. Monitor and evaluate: Specific for agribusiness credits and credits to a. The overall progress and quality of the State-owned Companies, a consultation with credit portfolio; the Board of Commissioners is required when b. The correctness of the exercise of the the total exposure of the credit is at least Rp600 credit decision authority; billion and Rp500 billion respectively. c. The correctness in the granting, progress and quality processes of 4. Credit Policy Committee credits granted to parties related to the Structure, Membership, Expertise, and bank and to certain large debtors; Independency of the Credit Policy Committee d. The correctness of the implementation Members of Legal Lending Limit regulations; Chairman: President Director e. The compliance with rules and Members: regulations and other stipulations in 1. Director of Credit Risk Control granting credits; 2. Director of MSME Business f. The settlement of problem loans in 3. Director of Commercial Business accordance with the stipulations of the 4. Director of Finance General Credit Policy of BRI; 5. Head of Credit Administration Division g. The adequacy of the amount of 6. Head of Internal Audit reserves for loan loss provision; 7. Head of Credit Risk Analysis Division h. Certain large debtors and credits listed 8. Head of Loans Restructuring and Recovery in the Special Mention Loans. Division 4. Execute regular reviews to judge the 9. Head of Micro Business Division effectiveness of the Internal Credit Control 10. Head of Retail Credit Division System once every 12 (twelve) months. 11. Head of Consumer Credit Division 5. Monitor and provide suggestions for the 12. Head of Program Business Division planning and implementation of credit 13. Head of Agribusiness Division trainings. 14. Head of General Business Division 6. Submit written reports regularly and 15. Head of Treasury Division provide suggestions for improvements to 16. Head of International Business Division the Board of Directors. 17. Head of Strategic Planning Division 7. Analyse and evaluate the portfolio to 18. Head of Legal Division support the achievement of Annual Budget. 59. Annual Report 2008 Bank Rakyat Indonesia

5. Information Technology Steering Committee - Head of Micro Business Division In line with the regulations outlined by Bank - Head of Retail Loans Division Indonesia through the Regulation of Bank - Head of Agribusiness Division Indonesia No. 9/15/PBI/2007 dated 30 - Head of General Business Division November 2007 and the Circular of Bank - Head of Program Business Division Indonesia No. 9/30/DPNP dated December - Head of Treasury Division 12th, 2007, both concerning the Application - Head of International Division of Risk Management in the use of Information - Head of Internal Audit Technology by Commercial Banks, BRI has - Head of Credit Card Division formed two Information Technology Steering Committees called the Information Technology The Technical Information Technology and Steering Committee of BRI. The internal System Steering Committee comprises of: regulations of BRI that form the basis of 1. Chairman as well as member: Director of formation of these two committees are: Operations 1. Decree of the Board of Directors of BRI 2. Vice Chairman as well as member: Head NOKEP: S.10-DIR/TSI/02/2003 concerning of Technology and Information System the Steering Committee of the Policies and Division Management of Information Technology 3. Secretary: Group Head of ITS Planning and and System (ITS) of Bank Rakyat Strategies Indonesia; and 4. Members: 2. Decree of the Board of Directors of BRI - Head of Strategic Planning Division NOKEP: S.11-DIR/TSI/02/2003 concerning - Head of Consumer Loans Division the Technical Steering Committee of - Head of Micro Business Division Information Technology and System of (ITS) - Head of Retail Loans Division of Bank Rakyat Indonesia. - Head of Agribusiness Division - Head of General Business Division Structures, Membership, Expertise and - Head of Program Business Division Independence of the Members of the - Head of Logistics and Fixed Assets Information Technology and System Steering Management Committee - Head of International Business - Head of Financial and Management Steering Committee Accounting Division The Policies and Management of Information - Head of Internal Audit System and Technology comprise of: - Deputy Heads of Technology and 1. Chairman as well as member: President Information System Division Director - Senior System Analysts and Senior 2. Vice Chairman as well as member: Director Business Analysts of Operations - Department Head of Budget Planning 3. Secretary: Head of Technology and and Management Information Information System Division System for Accounting and Financial 4. Members: Management - Head of Strategic Planning Division - Head of Funds and Services Division 60. Annual Report 2008 Bank Rakyat Indonesia

2. Set priorities for information technology and system in accordance with the business strategic plans that will be executed by BRI management in both medium- and long- term. 3. Form and determine the Information Technology and System Technical Steering Committee that has the main duty of steering the development and implementation of BRI’s information technology and system project for the short term (annual). 4. Monitor the implementation of the development of information technology and system, with the intent that the development will always stay in line with the set Information Technology and System Development Planning and Strategies As we can see from the above memberships Guidelines of BRI. and structures, both committees have 5. Redefine the ITS guideline, plan and representatives from the Business Divisions, strategy for the development for medium users of information technology with skills to long term as a result of changes in the and experience in their respective fields of business policies and strategies of BRI. professions. This condition will certainly 6. Decide on the ITS development strategies support the objectivity and independence of that are not in line with the previously the two steering committees, so that they can set strategies due to extraordinary execute their duties effectively and efficiently. circumstances, as long as it is still in the general scope of the Information Duties and Responsibilities of Committees Technology and System Development The duties, responsibilities and authorities of Planning and Strategies Guidelines of BRI. the Policies and Management of the Information Technology and System Steering Committee of The duties, responsibilities, and authorities BRI are as follows: of the Information Technology and System 1. Determine the direction, policies, and Technical Steering Committee of BRI are as targets for the development of the follows: Information Technology and System of 1. Determine the priorities in developing and BRI for both medium term (three years) implementing the information technology and long term (five year) periods stated and system of BRI for the short term in the Planning and Strategies for the (annual), with references to Information Development of Information Technology Technology and System Development and System (ITS) Guidelines of BRI. Planning and Strategies Guidelines of BRI. 61. Annual Report 2008 Bank Rakyat Indonesia

2. Determine the Work Plan and the ITS Frequency of Committee Meeting throughout 2008 Investment and Exploitation Work Plan The Information Technology and System Steering Budget for the development, operation, Committee of BRI has held three meetings. The dates and maintenance of ITS in the short term for these meetings are as follows: (annual). 3. Determine office management programs No Date Topic/Meeting Agenda for ITS projects that will be developed and 1. 14 Feb 2008 • Organisation and realisation of budget for IT system in 2007 implemented, which would include: • Progress of IT system development • Operations of Data Centre and Disaster a. The scope of the project; Recovery Centre • Issues: Capacity Planning and Switch-Over b. The methodology of the project; Simulation of DC-DRC 2. 29 Aug 2008 • Organisation and realisation of budget for IT c. The organization of the project; system in 2008 • Progress of IT system development d. The team(s) for the project; • Operations of Data Centre and Disaster Recovery Centre e. The budget of the project; • Issues on Infrastructure Readiness for Opening of New Operating Units, Status on Trade f. The time frame of the project; and Finance System, Status on Core Banking Sharia, HR Deficiency in the IT Division, g. The quality assurance of the project. Software Licences, Changes in the Priority for 4. Monitor and evaluate the execution of the Application Development 3. 18 Dec 2008 • Brief on the Offline Incident of 2-5 Dec 2008 development project to ascertain that it is • Follow-up on the Finding Result #3 of 2008 on 18 Dec 2008 still in-line with the previously set scope, • Organisation and realisation of budget for IT system in 2008 time frame, budget, and quality. • Capacity Planning • Readiness of Disaster Recovery Centre 5. Redefine the ITS Work Plan and • Value Delivery and Development of IT • Issues with respect to the Construction of Data Budget Work Plan due to extraordinary Centre and IT Building, Maintenance of Gen- set and UPS, IT Plan 2008 and 2009, Follow- circumstances with reference to the up Action on Bank Indonesia Audit Findings, Status on the Recruitment of IT Personnel previously set Information Technology • Demonstration of Portal Data Warehouse and System Development Planning and Strategies Guidelines of BRI. Action Plans of the Information Technology and 6. Submit ITS development projects that are System Steering Committee and Realization not wholly in line with the set Information The action plan of the Information Technology Technology and System Development and System Committee is to discharge its Planning and Strategies Guidelines of duties and authorities in accordance with the BRI for decisions to the ITS Policy and materials in the Committee’s Meetings’ agenda. Management Steering Committee of BRI. 7. Submit reports to the Information 6. The Human Resources Policy Committee Technology and System Policy and This committee was formed in 2008 with the Management Steering Committee regularly goal to improve the effectiveness, efficiency, on the realization of the ITS development objectivity and transparency in decision making programs managed by the Information concerning human resources; and to reassure Technology and System Division. the stakeholders that the determination of HR policies have been executed in line with the principles of Good Corporate Governance. 62. Annual Report 2008 Bank Rakyat Indonesia

The membership of the Human Resource Policy d. Dissemination of external regulations to Committee is as follows: related Operating Units for guidelines and 1. Chairman: President Director references in decision or policy making. 2. Members: all members of the Board of Directors Compliance with prevailing regulations in the 3. Secretary: Head of Human Resources framework of prudential banking is assured Management Division by taking stock and reviewing of all prevailing 4. Vice Secretary: Deputy Head of Human regulations. Resources Management Division BRI compliance policies as stipulated by the The Authority of the Human Resources Board of Directors are as follows: Management - The policy for reviewing BRI’s existing rules The authorities of the Human Resource Policies and regulations and making adjustments as Committee are as follows: needed with changes in the prevailing rules 1. Human Resources (HR) Policy, including and regulations. among others HR planning, recruitment and - Policy on examining prudential principles selection, career development, performance regarding Directors’ policy and or decision management, prosperity, industrial, undertaken by BRI Compliance Director. assessment, and HR management - Policy on meeting BRI obligation pertaining information system. to compliance with contracts and 2. HR operations includes transfers commitment initiated by BRI Directors (promotions, rotations, demotions) of with Bank Indonesia and other authorized Echelons 1 and 2 officers, performance institutions. evaluations of Echelons 1 and 2 officers, - Policy on operational guidelines for and disciplinary sanctions to Echelons 1 Compliance Desk and policy on Know and 2 officers. Your Customers (KYC) to comply with KYC regulations. Ill. Implementation of Compliance, Internal Audit, and External Audit Functions 2. Internal Audit Functions BRI implemented an audit methodology called 1. Compliance Function Risk‑Based Audit (RBA) which was gradually For the sake of upholding compliance to the implemented in accordance with the maturity relevant laws and regulations, the compliance level of corporate risk management. With function was undertaken through the following this methodology, business process and activities: business units predicted to have significant risks in achieving company’s objectives are a. Undertake testing and monitoring of given priority to be audited, ensuring the follow‑up actions to test results. entire potential risks to be minimized to the b. Review of policy acceptance risk levels. c. Monitor agreement and commitment of BRI to Bank Indonesia and other government In 2008, BRI Internal Audit audited areas which institutions. were predicted to be significantly potential 63. Annual Report 2008 Bank Rakyat Indonesia

for disturbing the achievement of company’s line with Audit Committee in the form of objectives. The role of BRI Internal Audit as coordination or regular audit findings reporting. the catalyst for the growth of management awareness of the significance of risk Internal Audits have evaluated the sufficiency management was well undertaken in relation to and effectiveness of internal control the role of Internal Audit as a Strategic Business and performance of line management Partner (SBP) of BRI Line Management. units. Besides, they also have evaluated the sufficiency and effectiveness of risk In order to maintain the quality of audit findings, management process as well as corporate sustainable quality development programs governance of all aspects and elements of the are continuously held, both externally and Bank businesses. internally (using Internal Review Program). This is conducted by examining all Internal Audit Internal Audit function is reviewed periodically Operating Units every year, or through quality every 3 year by External Auditors for its standard testing using international standard effectiveness and compliance to the Role of ISO 9001 2000 based on samples from several Bank’s Internal Audit Function Standard. The Regional Audit Offices. results showed that BRI Internal Audit Function has played its role following the standards In undertaking their duties, Internal Audits given and continuously attempted to make are independent from operational Operating adjustment with the current standard best Units, without pressure from any party in the practices. In the future, BRI Internal Audit organization. They are directly accountable to will do its best to make it perfect through President Director and have communication benchmarking and attending either national or international seminars. 64. Annual Report 2008 Bank Rakyat Indonesia

3. External Audit Functions and monitoring of risks for maintaining healthy BRI has appointed the Public Accounting Firm internal bank condition. In addition, information (PAF) that is registered with Bank Indonesia, and date management to support the process of using GMS’ approval and Audit Committees’ risk measurement and monitoring are continuously recommendations. The selection of PAF was updated and made perfect to support the Bank in accordance with the existing laws and business. regulations. V. Related‑Party Lending and Large Exposure The appointment of PAF considered such Loans aspects as: a. Capacity of PAF BRI has implemented prudential banking practices b. Contract legality through its diversified portfolio of lending; such that c. Audit coverage there has been no violation against the legal lending d. Standards of professional public limit as per BI regulation in terms of either lending accountants to related parties or the provision of loans of large e. The communication between BRI and PAF exposure. have been professional and independent. Furthermore, to ensure the independency of the IV. Risk Management Implementation, Bank’s management to possible intervention from including Internal Control System related parties with respect to deciding on loan approvals, BRI has implemented the four eyes Commissioners and BOD are quite active in principles for more than five years. supervision through the committee created at Directorate/Commissioner level (Risk Management Below is total loans outstanding provided to related Committee, IT, Credit Committee, ALCO, etc.) for parties and large exposure loans as of December monitoring and strategic decision making. 31, 2008.

In accordance with the complexity and business Number of Nominal Amount No. Loans provided to size as well as the Bank business targets, risk Debtor (Million Rupiah) management in BRI is implemented for all risks (8 1. Related Party 6 749,905 2. Major Debtor types of risks), which is in line with BI regulations a. Individual 25 18,229,942 built‑in and widespread throughout the entire b. Group 25 20,898,417 operational Operating Units. The implementation of risk management comprises risk identification, Fund provision for related party and prime debtors major risk indicators, risk profiles, and formulation above has been given based on Good Corporate of follow‑up actions which are reported to the Governance principles, which was proven by management for its risk monitoring/control over the decision to provide funds in accordance with significant risks. the Bank General Credit Policies made by Credit Committee as they are authorized. BRI has adopted policies, operational procedures, risk management, and risk limits parameter/ indicators which are used in the measurement 65. Annual Report 2008 Bank Rakyat Indonesia

VI. Bank Rakyat Indonesia Strategic Plans VIl. Transparency of the Bank Financial and Non‑Financial Condition Not Stated in Other For the implementation of GCG, BRI has developed Reports a system of corporate planning and control which is systematically arranged, realistic, and integrated BRI has disclosed all required financial and without neglecting external and internal factors as non‑financial information in line with the existing well as prudential banking practices as stipulated regulations to its Shareholders, among others are: in BI Regulation No. 6/25/PBV2004 dated October

22, 2004 and BI Circular No. 6/44/DPNP dated No. Type of Report Addressee October 22, 2004. 1. Financial Report a. Central Bank of Indonesia b. Bapepam-LK (Financial Institution BRI has devised a Corporate Plan that is and Capital Market Supervisory Board) divided into short‑term planning (1 year) which is c. Indonesia Stock Exchange manifested in the Annual Budgeting, a medium- d. State Audit Board ­term planning (3 years) that is manifested in the e. Ministry of SOE f. Ministry of Finance Business Plan, and long‑term planning (5 years) g. Deposit Insurance Institution that is manifested in the Corporate Plan. h. Directorate General of Taxation, Ministry of Finance

2. Annual Report a. Central Bank of Indonesia In order to realize those plans, BRI has formulated a b. Bapepam-LK number of programs and strategies in business and c. Indonesia Stock Exchange support sides, which are d. Indonesian Consumers Foundation e. Indonesia Institute of Bankers - Focus on MSM businesses (Micro, Small, and f. Indonesian Rating Agencies Medium) g. Indonesian Banking Association i. Finance and Economic Research - Expand network operations Institutions - Strengthen risk management j. Finance and Economic Magazines - Utilize Information Technology for operational 3. Deposits Report Deposit Insurance Institution efficiency and speed of services. 4. Commercial Bank Report Central Bank of Indonesia

5. Risk-Weighted Assets Central Bank of Indonesia The management accountability regarding and Minimum Capital the implementation of each planning is done Requirement Report through the mechanism of General Meeting of 6. Use of IPO Proceed Report Bapepam-LK

Shareholders, which includes an evaluation of 7. Realization of Bank Central Bank of Indonesia company organisational structure, system and Business Plan Report procedures, human resources, performance 8. Bank Ratings Report Central Bank of Indonesia appraisal system, as well as internal audit function 9. GMS Report a. Bapepam-LK b. Indonesia Stock Exchange at every layer and unit in organisational structure. 10. Public Expose Report a. Bapepam-LK b. Indonesia Stock Exchange 66. Annual Report 2008 Bank Rakyat Indonesia

VIII. Shares Ownership of Commissioners and BOD Amount Received in a Year Remuneration As of 31 December 2008 none of the No. Commissioners Directors and Facilities Commissioners and Directors of BRI hold shares Person Rupiah Person Rupiah amounting to 5% of the paid‑in capital of the 1. Remuneration 7 15,360,000,000 10 54,600,000,000

Bank, other banks, non‑bank financial institutions, 2. Facilities a. Ownership 7 1,222,700,000 10 4,196,233,333 and other companies located in Indonesia and b. Non overseas. Ownership 7 1,605,552,000 10 6,185,700,000 TOTAL 18,188,252,000 64,981,933,333

The statement regarding the shares ownerships has been stated in a Letter of Statement by each The amount of remuneration per person in a year Commissioner and Director.

Amount of Remuneration per Number of Number of No. Person in a Year Directors Commissioners

IX. Financial and Familial Relationships of 1. above Rp2 billion 10 7 Commissioners and Directors with other 2. above Rp1 billion up to Rp2 billion - - Commissioners, Directors, and/or Controlling 3. above Rp500 million up to Rp1 billion - - Shareholder of the Bank. 4. Rp500 million and below - -

All members of the Board of Commissioners XI. Share Options and Board of Directors do not have financial and familial relationships with other members of the BRI has declared its internal policy pertaining Board of Commissioners, Board of Directors, and/ to share options provision by referring to the or Controlling Shareholders. The statement of not Regulation of Capital Market Supervisory Agency having financial and familial relationships among No.: Kep‑44/PM/1 998, dated August 14, 1998. members of the Board of Commissioners and Board of Directors has been stated in a Letter of The Share Option provision was executed in three Statement. phases within 3 years as follows: 1. MSOP I was given during BRI Initial Public X. Remuneration Policy/Package and other Offering (IPO) on November 10, 2003. Facilities for Commissioners and Directors 2. MSOP II was carried out in the second year after IPO.

The Commissioners and Directors are entitled to 3. MSOP III was carried out in the third year after remuneration and facilities stated in the following the IPO. table. This is the amount that the Commissioners and Directors may receive within a year. The shares owned by the Board of Directors (except the President Director) were given while they were the Executives of the Bank. 67. Annual Report 2008 Bank Rakyat Indonesia

Number of Options Details of Salary Ratio: The Highest and the Lowest

Number Number of Options of The ratio consists of total cash=12‑month salary Shares Option Time Description / Name Held Price Period + Paid Leave + Religious Allowance + Incentive + (shares) Issued Exercised (Rp) (year) **** (shares) (shares) Bonus. a. Ratio of highest employee salary over lowest Commisioners Bunasor Sanim - - Aviliani - - B.S. Kusmuljono - - employee salary = 18.83 Baridjussalam Hadi - - Agus Pakpahan - - Agus Suprijanto - - b. Ratio of highest over lowest Director’s salary = Saifullah Yusuf - - 1.11 Directors Sofyan Basir - 3,115,500 3,115,500 Pursu- 5 Sarwono Sudarto *) 160,500 836,500 836,500 ant to 5 c. Ratio of highest over lowest Commissioner’s Sudaryanto Sudargo *) 1,000 836,500 836,500 IDX rules 5 Bambang Soepeno *) 470,500 668,500 528,500 5 Lenny Sugihat *) 630,000 802,500 802,500 5 honorarium = 1.11 Abdul Salam **) 65,000 - - Sulaiman Arif Arianto *) 300,000 805,500 805,500 5 A. Toni Soetirto **) - - - d. Ratio of highest Director’s salary over highest Suprajarto *) - 581,000 581,000 5 Asmawi Syam *) 140,000 836,500 836,500 5 employee salary1 = 6.13 Senior 17,025,000 14,491,500 Pursu- 5 Executives ant to e. Ratio of highest Director’s salary over highest IDX rules employee salary2 = 2.88

*) Option on shares that were given to the Directors with the exception of Note: the President Director, representing shares allocated during which time 1) Based on total annual cash (including tantiem) the Directors were serving as the Bank’s Senior Executive, and in line with 2) Based on monthly salary Bapepam-LK regulation. **) Mr. Abdul Salam and A. Toni Soetirto do not own an MSOP in PT. Bank Rakyat Indonesia (Persero) Tbk ***) Senior Executives comprise of Echelon 1 and 2 officials of the level of Divisional Head, Deputy Divisional Head, Regional Manager, Deputy Regional Manager and Branch Manager XIII. Meetings of the Board of Commissioners ****) As per data from the Shares Registrar on 31 December 2008

XII. Salary Ratio: The Highest and The Lowest In accordance with letters of the Articles of Association of the Bank, meetings of the Board

For the purpose of attracting, motivating, and of Commissioner are convened periodically at retaining its best employees, BRI has formulated a least once a month, or at any time as required. In salary system that is based on the best practices those meetings, the Board of Commissioners may in the banking industry and constantly reviews invite members of the Board of Directors to attend and updates the system to suit with business the meetings. Board of Commissioners Meetings development as well as changes in the banking are officially legal and eligible for making binding employment market practices. This is carried out resolution if more than 1/2 (one-half) of the number with due consideration for the Bank’s capability as of Commissioner are in attendance or represented well as prevailing laws and regulations. by proxy. Resolution of the meetings are binding for all members of the Board of Commissioners, and

The salary of BRI employees is comprised of decided upon the basis of consensus. principal salary, premium benefits, and transition benefits, which are formulated to give appreciation If a consensus could not be reached, the and recognition so as to achieve internal fairness resolutions are therefore subject to consenting on the basis of: votes that exceed one-half part of the eligible votes a. Role and contribution of the positions that are cast upon the meeting. b. Relevant and proven working experience c. Required expertise/skills and competencies d. Performance achievement 68. Annual Report 2008 Bank Rakyat Indonesia

The following table shows the meeting attendance XV. Litigation Cases record of the Commissioners in 2008: In running its business, BRI is not precluded Board of Commissioners Meetings: from legal actions which represent part of Bank’s operations. In 2008, the number of litigation cases

Name Position Attendance % with material claims value of more than Rp1.0

Bunasor Sanim President Commissioner/ 33 100.00 billion, were as follows: Independent Commissioner Agus Suprijanto Commissioner 19 57.58 Agus Pakpahan Commissioner 12 36.36 Number Saifullah Yusuf Commissioner 17 51.52 Litigation Cases B.S. Kusmuljono Independent Commissioner 31 93.94 Civil Case Crime Case Baridjussalam Hadi Independent Commissioner 31 93.94 Aviliani Independent Commissioner 28 84.85 Settled with a permanent legal verdict 0 0

Under due process 16 0

Joint Board Meetings: Total 16 0

Name Position Attendance % Litigation cases still in due process are those at the

Bunasor Sanim President Commissioner/ 6 100.00 level of the First Instance Court, Appellate Court, Independent Commissioner Agus Suprijanto Commissioner 4 66.67 and the Supreme Court. Agus Pakpahan Commissioner 3 50.00 Saifullah Yusuf Commissioner 2 33.33 B.S. Kusmuljono Independent Commissioner 4 66.67 XVI. Transactions with Conflicting Interests Baridjussalam Hadi Independent Commissioner 5 83.33 Aviliani Independent Commissioner 5 83.33 In 2008, the Commissioners and Directors did not XIV. Number of Internal Frauds and Efforts to have conflicting interests when making decisions Resolve Frauds and taking actions in the Bank’s best interest. All regulations regarding the implementation of GCG On the basis of data on fraudulent activities with were formulated in a Joint‑Decree between the resulting loss of more than Rp100,000,000,- (one Commissioners Directors on the GCG Policy of PT hundred million Rupiah), there were no instances of Bank Rakyat Indonesia (Persero), Tbk. and internal frauds committed by the Management of the Bank, Regulations on the Disclosure of Parties with as presented below: Particular Relationship.

Number of Fraud Cases Committed by In order to enhance the prudential aspects of Internal Fraud Bank Permanent Contract the Bank and avoid a conflict-of-interest among in a Year Management Employees Workers decision-making officers of the Bank, the decision 2007 2008 2007 2008 2007 2008 on credit over a certain amount need to be Total Frauds 0 0 52 39 0 1 decided by several officers who are part of the • Settled cases 0 0 35 24 0 1 • In process of Credit Committee, and upon consultation with the settlement internally 0 0 11 14 0 0 Commissioners. Moreover, the provision of credit to • Have not undergone a related party requires approval from the Board of settlement process 0 0 1 0 0 0 Commissioners. • Being settled through legal proceedings 0 0 5 1 0 0 In cases where a potential conflict-of-interest is indicated, the instigating Operating Unit will 69. Annual Report 2008 Bank Rakyat Indonesia

engage an independent Operating Unit to discuss Fund Allocation for Social Charities the matter such that any transaction that may not In 2008, BRI expended charitable funds for the be in the interest of the Bank could be avoided following activities: altogether.

Activity Nominal Sum (Rp) Based on tests carried out on decision-to-be-taken Corporate Social Responsibility (CSR) Rp54,535,000,000 on either credit or non‑credit transactions as well as on working agreements that had been signed by TOTAL Rp54,535,000,000 the Directors, in 2008 there were no transactions that could be categorised as a transaction that is XIX. Self‑Assessment on GCG Implementation associated with a conflict of interests. In 2008, PT. Bank Rakyat Indonesia (Persero), Tbk. conducted self‑assessment on the implementation Name and Name and Transaction of Good Corporate Governance (GCG), covering Position Position Type of Value No. of Persons of Description Transaction (Million such things formulated in the Bank Indonesia with Conflict Decision Rupiah) of Interest Maker Regulations. The result of this self‑assessment was categorized “VERY GOOD”. The followings is the NIL summary of the self‑assessment:

XVII. Buy Back Shares and/or Bonds Summary of Composite Scores of Good Corporate Governance Self‑Assessment: BRI has redeemed its Subordinated Notes, designated as “US$150,000, 7.75% Subordinated Weight Rating Score No. Component Description Notes due 2013”. The redemption was in (a) (b) (a) x (b)

accordance with the stipulations in the Offering 1. Execution of 10.00% 1 0.1 Number, composition, Roles and roles and responsibility Circular and Fiscal Agency Agreement and Responsibilities of the Board of of the Board of Commissioners requirement on redemption as stated in the Circular Commissioners have been executed effectively and efficiently in compliance with all Letter of Bank Indonesia No.26/1/BPPP of 29 May regulations.

1993. The early redemption was exercised on the 2. Execution of 20.00% 1 0.2 Number, composition, Roles and roles and responsibility outstanding Notes in full at a strike price of 100% of Responsibilities of the Board of Directors of the Board of have been executed Directors effectively and efficiently the nominal principal value of US$ 150,000 on 30 in compliance with all regulations. October 2008, including all accrued and accruing 3. Adequacy and 10.00% 1 0.1 The composition interest up to said date. Bank Indonesia did not Execution of and duties of the the Duties of Committees have been Committees executed in line with have any objection to the early call option exercised prevailing regulation and undertaken effectively by BRI in this case. and efficiently

4. Management 10.00% 2 0.2 Bank BRI has of Conflict of implemented an internal Interest policy on transaction XVIII. Fund Allocation for Social and Political containing a conflict of interest. There has been Activities, the Nominal Amount and Fund no transaction between BRI and related parties Beneficiaries. that contain any conflict of interest.

Fund allocation for Political Causes In 2008, PT BRI (Persero) Tbk did not participate in any funding for political activities. 70. Annual Report 2008 Bank Rakyat Indonesia

Description of the Composite Score Weight Rating Score Component Description No. (a) (b) (a) x (b) Composite Score Predicate 5. Implementation 5.00% 2 0.1 Implementation of of Bank Bank compliance is Compliance considered Good. The Composite Score < 1.5 Very Good execution of the duties 1.5 < Composite Score < 2.5 Good and responsibilities of the Director of Compliance 2.5 < Composite Score < 3.5 Fair and the Compliance Division has been 3.5 < Composite Score < 4.5 Bad effective. Guidelines, 4.5 < Composite Score < 5 Very Bad systems and procedures are available in adequate scope. 6. Implementation 5.00% 1 0.05 Execution of internal Follow-up Plans of Internal Audit audits has been extremely effective, in line with internal guidelines and the minimum standards of SPFAIB. Completion Component Action Plan Obstacle Period 7. Implementation 5.00% 1 0.05 The Bank has of External appointed the Public Audit Accounting Firm with Implementation a. Improving the risk Throughout - due consideration of Risk database management 2008 on prevailing rules and regulations. The Management system appointed PAF and public and Internal b. Developing IT and accountants have done Control MIS that support their duties professionally and independently, and the implementation forwarded their audit of an integrated risk results within the agreed management scope of assignments. c. Procuring the market risk 8. Implementation 7.50% 3 0.225 Identification and management application of Risk mitigation of all Bank to support effective daily Management risks are considered monitoring and reporting and Internal effective to maintain Control an internally sound to Management. condition of the Bank. Procedures on the implementation of internal control are adequately comprehensive and in Strengths and Weaknesses of the GCG Implementation line with the objective, scale and complexity at BRI of the businesses of the Bank.

9. Lending and 7.50% 1 0.075 BRI has written policies, Fund Provision systems and procedures Strengths to Related that are updated a highly Parties and comprehensive, to ensure Commissioners and Board of Directors have strong Large Debtors that decision making for funds placement is taken independently, and that commitment to implement GCG in every BRI business funds are fully diversified in order to prevent the activities by building understanding, concerns, and possibility of breaching/ violating the Legal commitment of all company’s organs in all layers. To Lending Limit.

10. Transparency 15.00% 2 0.3 BRI submits financial and support this condition, BRI has adopted: on the Bank’s non-financial information Financial and in adequate scope, in a. Corporate Values (Core Values), which are Non-Financial line with regulations Conditions, governing dissemination continuously implemented and developed by GCG of information to Implementation stakeholders that Report and should also be readily means of performance improvement program in all Internal Report accessible. The report on GCG has been submitted BRI Operating Units in accordance with requirement. b. Corporate Codes of Conduct, which have been

11. Strategic Plan 5.00% 1 0.5 The formulation and implementation of the agreed upon to be the behaviour and action Bank Business Plan are based on the Bank’s guidelines in undertaking daily tasks vision and mission statements. c. Policies on evaluating and completing a number Composite 100.00% 1.450 of company’s regulations for complying with GCG Score principles d. Socialization programs by related Operating Units regarding the implementation of GCG 71. Annual Report 2008 Bank Rakyat Indonesia

Weaknesses Other initiatives taken for maintaining communications There was no significance weakness which hindered with investors/ investment managers and analysts the implementation of GCG. However, with networks include discussion and briefings on BRI’s performance widely spread all over Indonesia, it is necessary to have and latest business progress through regular company a much better coordination and adequate IT supports, visits and conference calls. Several other media were through which the quality of information presented ‑ also used in disseminating information about the either financial or non‑financial ‑ can be improved and Bank to key stakeholders, such as quarterly analysts easily accessible by the stakeholders. meetings, and annual public exposes.

The Function of Corporate Secretary In addition, BRI also conducted field visits, especially The Corporate Secretary of a public listed company to BRI Units. This is expected to be able to provide plays a very important role. It functions as the investors and analysts with first‑hand experience with spokesperson of the company, determines the public BRI solid micro business, which in turn, will build up perception and image of the company. their confidence in the strength of BRI business.

One of the effective and efficient means of building All of the communication programs are meant to understanding and managing public perception of providing up to-date and objective information, while BRI is by maintaining relationship/cooperation and responding appropriately to the investors’ concerns. communication with the media. In 2008, there were By doing so, it is expected that investors’ perception a number of visits and discussions involving BRI will be built objectively, enhancing their confidence and journalists as well as the editorial staff of several level towards BRI future performance and business leading national media in order to maintain and build prospects. understanding between BRI and the press community. In those discussions, BRI reiterated its position in Currently, the Corporate Secretary of BRI is served by championing MSME lending. Hartono Sukiman. He was born in Yogyakarta on 5 November 1957 and has been with BRI since 1985. Furthermore, especially for financial journalists, BRI Appointed as the Bank’s Corporate Secretary on 1 July conducted the “News Tour Program” by inviting 2006, having previously served in various positions in journalists to visit BRI MSMEs’ clients and providing the Bank. He holds a degree in Business Economics training for a broader understanding of the key aspects from University of Pembangunan Nasional, Yogyakarta of banking and the capital markets. (1984).

As a publicly listed company, BRI maintains good communication with the capital markets community and regulator.

In maintaining and developing relationships and communicating with the capital markets communities, BRI participated in a number of programs, such as road shows initiated by leading securities companies in Jakarta, targeting major financial centres of the world in Asia, Europe, and the United States of America. 72. Annual Report 2008 Bank Rakyat Indonesia

Press Releases 2008

Date Activities 8 Jan 2008 BRI donates 112 motorcycles to patrol the land borders of Indonesia. Bank BRI Syariah launches the card-based savings product with the brand name of Tabungan BritAma 19 Jan 2008 Syariah (Sharia BritAma Savings) on the occasion of the Sharia Economy Festival. 23 Jan 2008 BRI and Holcim sign a cooperation for the house solution business. 4 Feb 2008 BRI inaugurates 29 office units in the BRI banking network within the BRI Medan Regional Office Group. 5 Feb 2008 BRI signs a number of Memorandum of Understanding (MOU) with a number of SOE. BRI provides loan to PT Bosowa Energy in support of the infrastructure development program of the 2 x 6 Feb 2008 125 MW power plant in Jeneponto. BRI signs a cooperation for the KPR and KPA (house and apartment loan) facilities with the PAKUWON 13 Feb 2008 GROUP. BRI signs an MOU with IPB and the Regency of Tanah Bumbu Kalteng on the Development and 18 Feb 2008 Revitalisation of Palm Oil Plantations through the Nuclei-Plasma Partnership Scheme. 23 Mar 2008 BRI provides 32,000 packages of staple goods to the fishermen of Jakarta, Bekasi and Karawang. 29 Mar 2008 BRI organises the a Customer Gathering event at the Marketing Galery, Gandaria Heights. 8 Apr 2008 BRI combines donation of staple goods with KUR in Indramayu and Pekalongan. 17 Apr 2008 BRI KUR in Purworejo. 19 May 2008 BRI Unit in Jakarta undertakes pilot testing of EDC (Electronic Data Capture) service. 14 Jul 2008 BRI launches a special program for rural communities, naming it the Simpedes Folks Festival. 14 Aug 2008 BRI undertakes a cooperation with the National Construction Service Development Institute. 30 Aug 2008 BRI carries out the BRI BritAma Savings Prize Draw, ”GELEGAR BRITAMA MERDEKA 1 MILYAR”. 18 Sep 2008 BRI organises a fasting break for 2,500 orphans of Jabodetabek. BRI sends 3,000 customers of KUPEDES & SIMPEDES on their home-coming trip during the Ied 22 Sep 2008 Celebration. 17 Oct 2008 BRI donates 20 motorcycles to Regional Police Force. 25 Oct 2008 BRI organises the BRI SHOPPING PRIZES event. 30 Oct 2008 BRI redeems its Subordinate Notes amounting to US$150,000,000. 31 Oct 2008 BRI publishes its third-quarter financial performance report. 12 Nov 2008 BRI provides aid for the development of the Islamic School Ummul Quro in Bogor. 16 Nov 2008 BRI launches the BritAma Untung Beliung Lucky Draw Program for the 2008-2009 period. BRI strengthens the synergy in the disbursement of KPR/KPA for housing, apartments, shop houses 24 Nov 2008 and home-office projects that are developed by Perum Perumnas. BRI organises the prize draw for the first period draw of the BritAma Untung Beliung Lucky Draw in 27 Nov 2008 2008-2009. BRI signs an MoU on the benefits of banking services with the Indonesian Association of Young 11 Dec 2008 Entrepreneurs (HIPMI). 16 Dec 2008 BRI celebrates its 113th anniversary. BRI covers the medical expenses of in-patients in the economy wards of 30 General Hospitals 26 Dec 2008 throughout Indonesia. 73. Annual Report 2008 Bank Rakyat Indonesia

Corespondence with the Indonesia Stock Exchange in 2008

Month Report Jan Information on media news regarding the plan on the sale of shares Mar BRI’s Financial Report for Fourth-Quarter 2007 Announcement of BRI GMS Invitation to BRI GMS Apr Revision on the Agenda of BRI GMS Financial Report for First-Quarter 2008 Amendment of invitation to BRI GMS Summary of spin-off plan May Report on the Resolutions of BRI GMS Notice of schedule and means of Dividends payment Jun Announcement of cash dividends per share Jul Financial Report for Second-Quarter 2008 Aug Amendment of BRI’s Articles of Association Sep Information on media news regarding acquisition of Bukopin Oct Financial Report for Third-Quarter 2008 Material disclosure on the redemption of BRI’s US$150 million Subordinated Notes Nov Plan for Public Expose Report on the Outcome of Public Expose 74. Annual Report 2008 Bank Rakyat Indonesia Electronic Banking Service Electronic

BRI provides electronic banking service that as at year-end 2008 comprised of 1,796 proprietary BRI ATM locations and more than 35,000 other ATMs from the ATM Link, ATM Bersama, ATM Prima dan BankCard networks. In addition, BRI also provides the Electronic Kiosks network of Cash Deposit Machines and Electronic Data Capture. The electronic banking service of BRI also includes the 24-hour phone banking and SMS banking services. 75. Annual Report 2008 Bank Rakyat Indonesia Business Target Achievements in 2008

76. Annual Report 2008 Bank Rakyat Indonesia

MICRO, SMALL AND MEDIUM SIZED BUSINESS

The Micro, Small and Medium Enterprise supporting the national economy in facing the segment forms the core strength of BRI. This global economic recession that is currently strength rests in the scale of BRI’s business threatening global economic growth. which is substantially large. BRI’s business strategy in the Micro, Small and Medium Sized BRI continues efforts to defend its position Enterprise (MSME) segment is to continue to as a market leader in the micro banking support its scale of business, expanding a business as well as serving as a micro- service reach capable of penetrating remote finance consultant that is widely recognized corners of the country, with greater depth internationally. BRI develops savings and particularly to highly populated areas - a loan products that are in line with the specific vertical and horizontal development by BRI needs of micro-entrepreneurs and customers that is made possible by its economies of from all walks of life. scale. Loan Products Micro Business Micro Credit is mainly comprised of the Kupedes loan products with limit of up to The micro sector may serve as one of the Rp100 million, and are divided into three pillars of the national economy that has loan categories: working capital, fixed assets proven to be resilient in the face of global financing and salary-based loans. BRI has economic fluctuations. Viewed from this enhanced the features of Kupedes that perspective, BRI plays an important role in now include the Kupedes Housing Solution 77. Annual Report 2008 Bank Rakyat Indonesia

(in cooperation with Holcim), Kupedes for the stipulation of the Debtor Information Indonesian Migrant Workers and micro-scale System (SID) of Bank Indonesia, and other Kupedes. In addition to Kupedes, micro loans new customer credit criteria governing also include the micro KUR (People Business Micro KUR Credit) with limits of up to Rp5 million that is - Electronic Data Capture (EDC) progressing encouragingly. The EDC is used to support collection of payments and increase service quality provided by BRI Units. EDC will facilitate Description 2008 2007 % transactions without requiring customers Outstanding (Rp billion) 42,756 32,602 31.15 to visit BRI unit offices. Total Debtor 4,460,580 3,515,812 26.87

Savings Product Micro loans have continued to grow in 2008, Currently BRI’s micro-business savings as follows: product is the BRI Simpedes savings, and This growth has also been supported by the its variant products that target specific rapid growth of the Micro KUR throughout customer groups comprising of Simpedes 2008. for Indonesian Migrant Workers (TKI), Simpedes for Pensioners; and Simpedes for A variety of initiatives with promising growth army personnel (TNI AD). Aside from savings potential have continuously been rolled out by product, BRI also offers demand deposits and BRI over the course of 2008. Among others time deposits. are the following:

Simpedes is mainly targeted at entrepreneurs, - Micro KUR workers and housewives from the middle- and Through the strategic development of low-income group living in rural and suburban Micro KUR, BRI Unit can now market loan areas. During the last five years, Simpedes with a ceiling of Rp5 million more broadly have grown on average by 21.04% per year and flexibly, because 70% of the loan from Rp26.22 trillion in 2004 to Rp56.28 trillion amount is guaranteed by credit insurance in 2008. As of 31 December 2008, the total from PT Askrindo and PT Jamkrindo. number of Simpedes customers reached more Debtors of these micro credits are than 18 million, contributing significantly to embryos that could develop into debtors BRI’s fee-based income. of the Kupedes with higher ceiling, in line with the growth of their businesses, and The success of Simpedes is attributable to thereby broadening the market potential its relevant product features that are suitable for Kupedes. for its target groups, as well as to the active marketing and promotional programs such - Micro-Scale Kupedes (KSM) as the Simpedes Folks Festival, and the Micro-scale Kupedes are intended to development of the Simpedes in cooperation serve debtors who wish to obtain credit with TKI and TNI-AD. below Rp5 million but are constrained by 78. Annual Report 2008 Bank Rakyat Indonesia

Development Plans for Micro Business The plan to develop micro savings and loan products especially focuses on efforts to capitalize on growth opportunities. For this BRI will endeavour to maximize the advantages of the BRI Unit networks in order to generate new customers.

On the funding side, the Simpedes products will continue to be developed through several programs, especially through the development of card-based Simpedes which uses a private label card; development of the Simpedes Student programs and Simpedes Savings Plan; and the promotional programs of the Simpedes Prize Draw and Simpedes Folks Festival.

Retail/Small Business

BRI continues to make efforts to develop its retail banking and products in order to strengthen the Bank’s and BriGuna Purna, as loans for both active and retired position and market share in MSME banking which individuals, respectively. continues to be very promising. During 2008 BRI developed several market penetrating In order to anticipate and accommodate challenges products which include: and evolving business conditions so that retail loan is able to grow and expand in line with set targets, BRI - Construction Loan for the BTS Tower continues to enhance product policies, strategies and The telecommunications sector has a high growth marketing programs, as well as the development and potential for BRI to provide financing in the monitoring of the loan portfolio. construction of BTS towers as well as expansion of BTS networks that can be leased out to several Retail loans encompass Small Commercial Loans up cellular telecommunications operators. to Rp5 billion and Consumer Loans. At present, Small Commercial Loan comprises of working capital and - Increased competitiveness of BRIGuna fixed assets financing, express loan, construction loan In order to increase the competitiveness of under the BO1 framework, PPTKI (migrant workers BRIGuna loan, BRI regularly evaluates customer agency) loan, franchise loan, warehouse receipt loan, needs, changes in the competition landscape as petrol station loan, and base transceiver station (BTS) well as in economic conditions. loan. Whereas Consumer Loan includes BriGuna Karya 79. Annual Report 2008 Bank Rakyat Indonesia

- Biometrics fingerprint technology Program loans are often disbursed in the form of BRI and PT Taspen have signed a Working interest-subsidized loan from the Government as well Agreement for the remittance of pension pay as commercial program loans. The source of funds are through BRI in the amount of approximately Rp1 supplied by BRI or channelled from the government, trillion per month. To ensure that pension payments in which the associated risks are borne by the fund are appropriately made to the rightful recipient, BRI owners. The types of Program Loans include among uses the latest Biometrics technology that scans others: client fingerprints. People Business Credit (KUR) - Transactions in connection with Operating Retail KUR constitutes working capital and/or Bank/BO1 investment loan with ceilings ranging from Rp5 million In connection with the appointment of BRI as the to Rp500 million. The facilities are given to small Operating Bank I for the Government Treasury businesses and cooperatives that are productive and Single Account, BRI provides a facility scheme feasible, yet not bankable. With the loan guarantees for Construction Working Capital with the BO1 provided by Askrindo and Jamkrindo, the Retail KUR proceeds as the source of repayment, in addition becomes a Program Loan that can fulfil the needs of to Bank Guarantees against the pledged BO1 the small business and cooperatives segment. proceeds. Loans for Members of Primary Cooperatives (KKPA) From its successful marketing, BRI was able to post The KKPA Loan includes working capital and significant Retail Loan growth in 2008, as can be seen investment loans that are provided to members of from the following table. primary cooperatives to continually finance productive businesses in partnership with nucleus companies (in Rp billion) (patron). KKPA financing is funded by BRI as well as PT Description 2006 2007 2008 Permodalan Nasional Madani (PNM) and Government

Commercial Loan 21,355 25,877 35,322 Notes. Consumer Loan 15,068 17,651 23,998 - BRIGuna Karya 11,945 14,214 19,395 - BRIGuna Purna 3,123 3,381 4,603 Loans for the Development of Bio Fuels and Revitalization of Plantations (KPEN-RP) Investment loans to accelerate the development Program Business of small-holder plantations through expansion, rejuvenation and rehabilitation of the plantation has The Program Loan is a loan that is channelled to been supported by government subsidies on interest productive projects for either working capital or payments. This may be executed with or without investment loans in support of Government programs, involving partner companies in developing and as well as in the framework of providing banking managing the plantations and marketing the produce. access to MSME, and in support of the food security Efforts are also being made to increase the productivity program, revitalization of plantations and the supply of of these plantations in order to produce the raw raw materials for bio-fuel. 80. Annual Report 2008 Bank Rakyat Indonesia

material for bio-fuel as a source of alternative energy. Loans for Food and Energy Security (KKPE) Especially for rubber and cocoa, the KPEN-RP uses KKPE includes investment or working capital loans BRI commercial funds on a non-partnership basis, that are provided to support the implementation of the which is directly served by BRI branch/sub-branch National Food Security Program, and the Development offices. of Plantations for Bio-fuel Program. The source of funds for KKPE is BRI commercial funds with an interest Loans to Small Business Group (KKUK) subsidy from the Government. Loans to Small Business Group include working capital and or investment loans provided to small businesses Loans for the Economic Empowerment of Coastal that have previously obtained loans from BRI in the Communities (PEMP) form of P4K/ KPKU/ KPTTG-Taskin/ KPKM, and The PEMP Loan is the outcome of the cooperation have maintained a good track record for repayment. between BRI and the Ministry of Maritime and Fisheries. KKUK is also provided to small businesses that had The loan is provided to cooperatives of coastal never received loans from BRI but are productive and communities in order to support the working capital for require additional capital to grow the business further. the savings and loans program of the cooperatives. The source of funds for KKUK originates from BRI commercial funds.

Small and Micro Business Loans – Government Notes (KUMK-SUP) KUMK-SUP is a loan that is funded by the Government Notes (SUP). Since 2005 BRI has obtained funds allocated by SUP in the amount of Rp500 billion, and must repay the fund in five bi-annual instalments. Presently the outstanding balance of the funds is Rp200 billion. 81. Annual Report 2008 Bank Rakyat Indonesia

Sharia Business Unit

The Sharia Business Unit began with the operation of two branch offices of BRI Syariah in Jakarta and Serang on 14 April 2002. By year-end 2008, BRI Sharia had expanded to 27 BRI Sharia branch offices and 18 BRI Sharia sub-branch offices that are spread throughout Indonesia.

In anticipation of the development of the Sharia banking business in the future, to enhance its performance and competitiveness in the sharia banking market, and in recognition of the need to manage the sharia banking business in a more focused light, the Management of BRI has resolved to spin off the BRI Sharia Business Unit (BRI-SBU). Through the spin-off, BRI-SBU will be merged into Bank Sharia BRI (BSB), which was formed by converting Bank Jasa Arta (BJA), which BRI had acquired previously, to become a Sharia Bank.

The said conversion has already obtained the permit from Bank Indonesia on 16 October 2008. Henceforth BSB will become a wholly-owned subsidiary of BRI. Furthermore it is hoped BSB can grow more rapidly, and make its contribution to the solid growth of sharia banking in Indonesia.

Going forward, in line with its vision to become a leading modern Sharia retail bank, BSB will create positive synergies with BRI by capitalizing on the extensive network of BRI as office channelling, to develop its business by focusing on the micro, small and medium-sized enterprise segment. 82. Annual Report 2008 Bank Rakyat Indonesia

CONSUMER BUSINESS

The Consumer Business segment provides BRI with Consumer lending represents a banking segment that growth opportunities by capitalising on BRI’s extensive has a high level of growth in Indonesia, in connection network. BRI focuses on penetration of consumer with the continuing growth of the middle-class income banking products in urban areas. population that has given rise to the formation of a consumer class with a lifestyle and purchasing habit BRI’s business strategy in the consumer segment is to that begets consumer lending on an ever growing penetrate urban centres throughout Indonesia, without scale. neglecting the strength and commitment of BRI in rural areas. In 2008, penetration to urban areas was marked Loan Products by an increase in BRI presence in 14 major cities: Loan products for consumers are comprised of credit Jakarta, Surabaya, Medan, Yogyakarta, Semarang, cards, multi-purpose loan (KMG), home mortgage loan Bandung, Palembang, Balikpapan, Banjarmasin, (KPR) and motor-vehicle loan (KKB). , Manado, Denpasar, Ambon and Jayapura. The penetration of these large cities is complemented The total sales volume of BRI credit cards increased by an ongoing strategy to deliver banking services to by 90% to Rp1.12 trillion, while total outstanding other residential areas or satellite towns of major cities. credit rose from Rp260.14 billion to Rp396.57 billion. BRI implements a strategy of expanding both vertically Whereas KPR and KKB increased by 67.56% and and horizontally in order to reach markets from rural 28.65% to Rp3.01 trillion and Rp449.00 billion, areas to highly populated satellite towns and the respectively. commercial centres of metropolitan cities. 83. Annual Report 2008 Bank Rakyat Indonesia

In supporting the development of the consumer Home Mortgage Loan (KPR) business in 2008, BRI opened 13 consumer loan KPR is a loan facility for the purchase of houses, centres in six large cities across Indonesia. BRI will apartments, flats, home offices and shop-front houses; continue to open more of these centres. In addition new as well as old. In addition to the purchase of to broadening its network of consumer loan centres, houses, KPR BRI can also be provided for renovation BRI has also developed product features that are as well as construction of homes. BRI’s KPR comprises attractively packaged and well-coordinated with of the commercial KPR and the government subsidised business partners (developers, motor-vehicle dealers, KPR. The subsidised KPR is marketed to support the and insurance) such as the lowering of down payments Government’s program in providing affordable housing. for credit purchases, the maintenance of competitive KPR can be provided up to Rp5 billion with a term interest rates and more flexible options on instalment of up to 20 years and a minimum deposit of 20% of payments. the value of the property. In line with the continuing development of the KPR line, total outstanding KPR BRI Credit Card debt has continued to increase, reaching over Rp3.01 BRI Credit Cards - Standard and Gold - are available trillion by 31 December 2008. to all BRI customers with the brand positioning of “Family Life Style” and the brand tag line of “Lighten Motor-Vehicle Loans (KKB) Your Life”. Additionally BRI offers the Platinum Card for KKB is a loan for the purchase of new and used motor select BRI customers, which uses the brand positioning vehicles comprising of both cars and motorcycles. “Indonesia Heritage” and the brand tag line “For Your The down payment for this loan starts from 10% of Lifetime Achievement”. the purchase value with a maximum term of five years. KKB loan is divided into two types: KKB Direct which BRI Credit Card Performance is direct financing to end users (whether through a reference from the dealers or involving the walk-in Growth Description Dec 2008 Dec 2007 (%) customers themselves); and KKP Joint Financing which Number of Credit Cards 207,090 112,614 83.57 is financing to end users that is channelled through a Sales Volume (Rp billion) 1,120.00 592.67 89.42 multi-finance company. Total KKB outstanding as of Credit Outstanding (Rp billion) 427.00 260.30 64.11 Fee Income (Rp billion ) 44.22 21.30 107.61 31 December 2008 was Rp449.00 billion.

The increasing number of BRI credit card holders is due Multi-purpose Loan (KMG) to the success of the marketing activities undertaken KMG is a loan that meets the needs of consumers that by BRI business units through cross selling programs cannot be served with KPR or KKB. The KMG loan to customers, telemarketing, direct sales to new has a range from Rp100 million to Rp1 billion with a customers as well as an internal marketing program. maximum tenor of 10 years. As at year-end 2008, the total KMG outstanding amounted to Rp417.55 billion. The increasing volume of sales and outstanding loans are supported by credit card activation programs, promotional initiatives which match customer behaviour; as well as an increase in the total number of card holders. This is also supported by an improvement in service quality that increases customer satisfaction. 84. Annual Report 2008 Bank Rakyat Indonesia

Funding Product Priority Banking The consumer segment provides significant The goal of the ‘BRI Prioritas’ service is to increase contributions for the development of third-party funds. customer retention and loyalty, volume of funding, Supported by financial products that are designed fee-based income through wealth management specifically for attracting middle to upper class, the activities such as investment advisories, pension funds, savings product BritAma represents BRI’s response bancassurance; and enhancing the image of BRI as to generate third-party funds in large cities that are the “Premiere Bank that serves all layers of society”. beyond the reach of BRI’s Simpedes funding program. To date BRI already has a customer base for ‘BRI Prioritas’ that comprises the mass affluent market BRI initiatives in the development of the savings segment and including more than 5,000 customers. product, BritAma, have produced encouraging results over the years. During the past 5 years, the averaged In this initial stage, ‘BRI Prioritas’ provides an exclusive, annual growth of BritAma was 20.66%, growing from integrated “One-Stop Service” that offers the full range Rp14.46 trillion in 2004 to Rp30.65 trillion as at year- of premium banking products and services that can end 2008. In 2008 alone, BritAma grew by 23.18% or satisfy customers with a minimum savings of Rp500 Rp5.77 trillion. This was due to a number of reasons million. ‘BRI Prioritas’ customers obtain a ‘BRI Prioritas’ including the success of the marketing program Card as an access key to the “One Stop Service” at “Untung Beliung BritAma” (BritAma’s Winds of Fortune) ‘BRI Prioritas’ Service Lounge. Furthermore the Card that offered a Lucky Draw Prize including more than functions as an ATM/Debit Card for BRI. 100 cars and packets of cash that were awarded at draws in 14 major cities that the BRI Consumer The initial concept was primarily aimed to support Banking programs have specifically targeted. Customer Relationship Management and Cross Selling that can facilitate customers across all banking services Of particular note to BRI BritAma savings was the that will ultimately increase the wallet share of each growth of the average balance of savings per customer, individual customer of BRI. Through the ‘BRI Prioritas’, which increased from month to month indicating a it is hoped that the Bank’s current customers who high response on the part of the public as well as are affluent/high-net-worth individuals (HNI), but have the success of BRI’s third-party funding marketing not obtained priority banking service, will remain loyal communications program in general. to BRI and take the opportunity to bank with ‘BRI Prioritas’, and refer their circles to ‘BRI Prioritas’ as In terms of other savings products, BRI also has a well. demand and time deposits. The total amount of funds generated by demand deposit as at year-end 2008 E-Banking BRI was Rp39.92 trillion that comprised of both individual As at year-end 2008, the range of electronic banking and institutional accounts, which increased by 7.45% channels that had already been made available to compared to that of year-end 2007. Meanwhile, time BRI customers included ATM, Phone Banking, SMS deposit reached Rp73.54 trillion, an increase of 36.49% Banking, Kiosk, Mini ATM and Cash Deposit Machine compared to that of the same period last year. (CDM). To enhance the Bank’s competitiveness in e-Banking, BRI continues to develop other e-Banking channels including Internet Banking, Prepaid Card (Electronic Money), Mobile Banking GPRS and Mobile Services. 85. Annual Report 2008 Bank Rakyat Indonesia

Marketing Communications Development Plan The successful selling of BRI’s banking products and The main target for consumer credit business is to services is a direct result of the hard work and effective selectively increase competitiveness. The strategy is marketing strategies in order to achieve the business applied by focusing on the middle-segment markets targets. in the 14 major cities, and by developing features and product innovation as well as undertake joint promotion BRI’s marketing communications program aims to and cooperation with third parties. All this has been attend the maximum level of awareness for BRI’s brand undertaken with the goal to become the “five largest as a universal bank in the broadest sense, and promote consumer loan providers in Indonesia” in the near BRI’s banking products and services to their respective future. target markets. Another development strategy of BRI is to enhance In addition to building a strong customer awareness, an business cooperation, strengthen relationships, and aggressive marketing communications programs also undertake joint promotions with business partners such supports BRI’s brand image by creating a blueprint for as property developers, insurance companies, as well BRI’s consumer products and services that are applied as sole distributors and dealers of various automotive consistently to create a clear positioning and perceived brands. value for these products and services. The marketing communications program is aimed at increasing new accounts as well as that of customer retention and loyalty toward BRI product brands. 86. Annual Report 2008 Bank Rakyat Indonesia

COMMERCIAL BUSINESS

The target market for providing loans to commercial In developing the agribusiness sector since 2006, BRI businesses comprises of loans for businesses within has provided a credit scheme for the Development of the agribusiness sector and those which lie outside Bio-fuel Energy and Plantation Revitalisation (KPEN- of the agribusiness sector for privately owned RP). The credit is given to farmers (via cooperatives) corporations. In terms of size, credit for commercial or through the nuclei-company (in the so-called businesses has a nominal value above Rp50 billion up nuclei-plasma program) to support the development of to the legal lending limit of BRI. alternative energy projects and plantation revitalization. Commodities that are financed by KPEN-RP scheme As part of its commitment to support the development are palm oil, cocoa and rubber. of Indonesia’s agricultural sector, BRI has developed a special agribusiness loan product for individuals or The interest rate of the KPEN-RP credit is commercial- corporations that are engaged in agribusiness in the rate interest, however during the period prior to the broadest sense, from on-farm to off-farm activities harvest interest on the credit will be subsidized by the that encompass both upstream and downstream Government; enabling farmers to pay interest rate on businesses in agriculture, plantation, forestry, animal- their borrowings of 10%. husbandry, fisheries, trade support and other services related to agribusiness. 87. Annual Report 2008 Bank Rakyat Indonesia

While growth opportunities in the agribusiness sector Loan Products continue to be promising, BRI also considers its role in There are a whole range of loans that are suitable for this sector as part of the Bank’s efforts to contribute to financing commercial businesses, whether in the form the success of the national food security program. This of direct or indirect (contingent) credit that includes: program is not only strategic to the national interest, 1. Loan for Working Capital but is also central to BRI’s business sustainability. A 2. Loan for Export Working Capital successful national food security program also entails 3. Investment Loan the success of millions of farmers in Indonesia, the 4. Loan for Import Working Capital majority of who are customers of BRI, which in turn 5. Loan for Construction Capital will ensure the continuing viability of credits that have 6. Import Guarantee Facility (PJI) disbursed to the agribusiness sector. 7. Standby Letter of Credit 8. Bank Guarantee Financing outside of agribusiness sector for private companies comprises of the manufacturing, mining, trade and services. One of the business developments that has been undertaken by BRI is to participate in credit syndication programs to finance infrastructure projects, including toll roads and power plants.

The main considerations of BRI to enter into infrastructure projects is to support the pace of economic growth, to generate the trickle-down-effect benefits to other sectors of the economy, and to provide job opportunities which in turn will support the growth of the banking sector itself. 88. Annual Report 2008 Bank Rakyat Indonesia

INSTITUTIONAL BUSINESS

To support BRI’s business with government and private In an effort to capture available funds and increase institutions, the Bank has developed new business fee-based income from existing customers in the opportunities in several strategic sectors comprising institutional banking business, BRI specifically offers of both the agribusiness and non-agribusiness sectors products and plans related to financial management including infrastructure, power, telecommunications, that are custom-made to suit the characteristics of the fertilizer, education, and pension fund; and forged customer’s financial transactions. cooperation with government agencies at both central and regional levels to monitor institutions that constitute Loan Products, a business opportunity for BRI to provide either lending Since 2008, BRI has provided credit facilities to several or funding services. SOEs to help finance institutions and develop projects, through a range of facilities including: Cash Loans In order to support the aforementioned businesses, (Working Capital for Construction, Import/Export, in 2007, the Directorate for Institutional Business was Investment and Fixed Assets) and Non-Cash Loans established with the aim of enhancing both funding and (L/C, Bank Guarantees, Domestic L/C and Stand lending to State Owned Enterprises (SOEs), private by Letters of Credit) to several companies already sector companies and government agencies. operating in the farming industries, sugar plantation, fertilizer, infrastructure, electricity, transportation, fuel and other productive industry sectors. 89. Annual Report 2008 Bank Rakyat Indonesia

Currently there are 46 SOEs and their subsidiaries that In addition, BRI also provides cash management have become BRI customers. Growth of Institutional/ services, whether through special cooperation and SOE financing in 2008 was supported by the application of a Cash Management System for several application of several strategies which include, among SOEs that include PLN, Pertamina, Angkasapura I and others: II, Bulog, Pegadaian, Pusri, Telkom and Telkomsel as - Approaching SOEs that are already customers well as Taspen. Cooperation with SOEs is also done to maximize the benefits that they derive from BRI through the provisioning of other bank services to services; obtain fee-based income for example in the form of - Establishing linkages between SOE that are salary-based credit, and bills payment for electricity and customers of BRI with SOEs that are not yet telephone. customers. Through this, BRI hopes to expand its banking services to other SOEs and their Development Plan subsidiaries which have not yet become customers The strategy deployed to develop BRI’s Institutional of the Bank so that they may use its banking Business include among others: services; - The expansion of credit specific to the needs - Initiating direct approaches to SOEs that are not of SOE sectors such as infrastructure, strategic yet customers of BRI, especially those which have industries which boost development in the real excellent business prospects; sector, pharmaceuticals and mining; - Organizing seminars, gatherings and meetings with - Improving the links with SOE that have already the management of SOEs and their subsidiaries in become customers to optimise the use of BRI’s order to present a clear picture of the benefits and banking services. convenience of using the banking services provided - Cooperation in fund management for SOEs by by BRI; implementing Cash Management Systems and - Coordinating services between and among BRI cooperation on other financial operations such regional and branch offices throughout Indonesia as purchase of fuel from Pertamina, purchase to maximize the services provided to the SOEs, of fertilizers, systems for bill payments such as in consideration of the fact that these SOEs often telephone and cellular telephone and others. maintain offices and operations that are spread across the country as well.

Funding Products Institutional Business has become a source of funding for BRI in the forms of Demand Deposits and Time Deposits which are obtained from the deposits of several government departments and agencies, state and regional companies, public and private institutions, and pension funds. 90. Annual Report 2008 Bank Rakyat Indonesia

INTERNATIONAL BUSINESS AND TREASURY

Treasury plays an important role in safeguarding liquidity, optimising interest income as well as Additionally, BRI Treasury, through its dealing room maintaining a balance between assets and liabilities. carry out transactions in support of business projects In addition to that, Treasury has also become a source from other Operating Units in BRI, such as the servicing of fee-based income from several Treasury-related of foreign currency transactions through Spot, TOM services. (Tomorrow), TOD (Today), as well as Swap and Forward transactions for the Bank’s main customers Treasury plays a strategic role in managing the position engaged in import and export. During 2008, the of the Bank’s assets and liabilities. This business total nominal value of foreign exchange transactions unit continues to make efforts to increase income by negotiated on behalf of customers amounted to managing the positions of its banking book and trading US$9.8 billion from more than 8,000 recorded book through effective cooperation with international transactions. and domestic counter parties.

In 2008, BRI demonstrated its existence in the Other banking services provided by treasury: Indonesian money markets, as a major player in financial transactions through the Money Market, • Trustee Services Foreign Exchange transactions, and was appointed BRI may function as a trustee to represent the by the Ministry of Finance of RI as a Primary Dealer for interest of bondholders both inside and outside of a Government Treasury Bills (SUN). BRI has consistently court of law, overseeing the implementation of the fulfilled its responsibility as a Primary Dealer in spite of rights of bondholders in accordance with terms of the ongoing global financial crisis. the bonds as stated in the trusteeship agreement as well as prevailing laws and regulations. 91. Annual Report 2008 Bank Rakyat Indonesia

Trustee Services provided in 2008 were: International Banking Services

Description 2008 2007 Export and Import Transactions Number of Issuers 9 13 The global financial crisis continues to influence Total Bonds Value (Rp billion) 13,699 14,039 Fee Income (Rp billion) 2.71 3.88 international business conditions. The value of export transactions through BRI in 2008 was US$638.50 The year 2008 witnessed a decline in performance due million, a decline of 18.08% compared with US$779.43 to the postponement of several bond issues and delays million recorded in 2007. The value of contributions on payments of maturing bonds. by small and medium industry sector to BRI’s export transactions in 2008 indicate the Company’s success • Securities Sales Agency in actively empowering BRI branch offices in several BRI already obtained its permit to act as a Selling areas that actively support export projects. Agent for mutual funds as a Collective Investment Contract. Currently BRI has been appointed as During 2008, BRI realized import transactions the sales agent for seven mutual funds through of US$1,415.86 million, a decrease of 21.73% deals with three Investment Managers. Bank BRI compared to 2007 when import transactions reached has also been appointed as the sales agent for US$1,808.92 million. the Indonesia Retail Bonds (ORI) by relying on the Bank’s nationwide branch network. Fee income Remittance from serving as a brokerage for ORI in 2008 BRI gives attention to the development of international amounted to Rp1.99 billion. remittance services that continue to increase in line with growing number of Indonesian Migrant Workers • Custodial Services from year to year. International remittance transactions By the end of December 2008 the total assets over the course of 2008 were US$15.83 billion or an that were managed by BRI custodial services were increase of 47.85% from the previous year amount of Rp13.4 trillion, with fees of Rp7.2 billion through US$10.71 billion. a client base of 42 institutional customers which comprised mainly of pension funds, foundations, Aside from serving export/import transactions and insurance companies, mutual funds and other international remittances, BRI conducts various institutions. specialized work programs aim to increase national exports, especially those SMEs. Several programs that • Financial Institutions for Pension Funds (DPLK) were implemented in 2008, including: BRI established its Financial Institutions for Pension - Efforts to support small and medium-sized Funds (DPLK) to provide management services businesses that are export-oriented. for participating Defined Contribution Pension - Standardization of banking services and the early Plan for individual and group participants. DPLK warning system. BRI started its operations on 9 January 2006 and - Increase and broaden the scope of cooperation currently manages the pension plan for more than with international correspondent banks in order to 39,000 participants with total assets of Rp887.67 enhance BRI’s trade finance services. billion, generating income of Rp6.54 billion. DPLK BRI has four types of investment choices which are Money Market, Fixed Income, Equity and a combination of the above. 92. Annual Report 2008 Bank Rakyat Indonesia Over 58,000 Personnel - At Your Service

More than 58,000 personnel of BRI are ready to serve roughly 30 million customers who are spread into the far corners of Indonesia. BRI places a strong emphasis on personnel development and training. Faced with challenges and market competition, BRI’s personnel are being moulded to become human capital with a great capacity to learn, a strong desire for change, an innovative spirit, and the impetus for creativity. More importantly, the enhancement of knowledge and skills among personnel is integral to adopting prudential banking principles and holistic risk management. 93. Annual Report 2008 Bank Rakyat Indonesia Risk Management

94. Annual Report 2008 Bank Rakyat Indonesia

procedures. The Risk Taking Unit takes direct control of the inherent risks in order to minimize the residual risks.

2. Risk Management Unit, serving as the second line of defence, is responsible for managing the risk to ensure that total risk exposure will not exceed the Bank’s capital to cover such risks. The management of risks is undertaken through the setting and monitoring of risk limits.

I. Overview 3. Internal Audit, as the third line of defence, is responsible for ensuring the effectiveness of

1. Risk Management Organization internal control at both the risk taking units and risk management units. In managing risks, BRI has established an Integrated and comprehensive risk management system, the implementation of which constitutes Responsibilities and Authorities of the Board of the commitment of the Board of Directors of BRI Commissioners of BRI. to mitigate the potential of loss to its minimum. Risk management has a significant role in the BRI Board of Commissioners management of the Bank in order to achieve its The responsibilities of the Board of Commissioners business goals through two aspects, namely the with respect to risk management covers among protection of capital and optimization of the risk other things: endorsing and evaluating the General and return correlation and balance. Policy on Risk Management of the Bank as well as overseeing the Board of Directors’ accountability BRI undertakes risk management by applying three on the implementation of risk management policy lines of defence, which are: in accordance with prevailing regulations.

1. Risk Taking Unit, serving as the first line of Responsibilities and Authorities of the Board of defence, is the unit responsible for internal Directors of BRI. control function that maintains the quality of The Board of Directors is responsible for output and business process in accordance establishing a comprehensive written policy and with the Bank’s prevailing policies and 95. Annual Report 2008 Bank Rakyat Indonesia

strategy on risk management that is in accordance The Risk Profile Trends on BRI in 2008 were as follows: with prevailing rules, including the setting and approval of risk limits, and being responsible for the overall risk management policy and risk exposures of the Bank. High Risk

2. Risk Management Committee In managing the risk exposures of the Bank and establishing the Bank’s Risk Management System, the Board of Directors is assisted by the Risk Management Committee (RMC), which represents the highest hierarchy in BRI’s Risk Management Credit Market Liquidity Operational Legal Reputational Compliance Strategic System. In addition to the RMC, there are three Q I-2008 Q II-2008 Q III-2008 Q IV-2008 sub-RMC namely the Credit Risk Management Committee (CRMC), Operational Risk Management Committee (ORMC) and Market Risk Management 1. Credit Risk Management Committee (MRMC), all of which were formed Credit Risk is a risk arising from the failure of the to resolve risk issues that pertain to credit risk, counter party to meet its obligation. The source market risk, operational risk, and other risks. RCM of credit risk may come from a variety of activities meetings are convened at least once every quarter. of the Bank such as credit (or funding thereof), treasury, investment, and trade finance in both the Bank’s trading book and banking book. II. Implementation of Risk Management

For risk-weighted capital, credit risk constitutes the BRI evaluates its aggregate risks through a largest component of risk as lending is the largest self‑assessment process that produces a Risk activity of BRI. Credit risk exposures on products Profile, consisting of the Inherent Risks (risks that and/or/receivables comprise of lending and are inherently attached to the Bank’s activities prior non‑lending activities (placement, investment, and to control implementation) and the Risk Control other forms of payables or assets such as in-bank System (control over the inherent risks) on eight and external receivables). types of risks that are inherent on seven functional activities (credit, treasury, trade finance, funding, Based on the self‑assessment of Risk Profile in operations and services, IT system, and support 2008, the average aggregate inherent risk was functions). Low with average aggregate risk for risk control system found to be Strong. Inherent aggregate BRI overall risk profiles for 2008 was Low with a risks on credit were measured from several score ranging from 1.4 to 1.5. On a composite functional parameters pertaining to aggregate risk basis, both the inherent risk and risk control factors is monitored through some activities parameters of show levels of Low to Moderate, whereas the credit, trade finance, and treasury. overall risks facing BRI’s business in 2008 was Low, with a stable trend. 96. Annual Report 2008 Bank Rakyat Indonesia

Credit risk that arises from lending/financing Preparation for Basel II Implementation activities that constitute BRI’s main business BRI has formed a Basel II Implementation activity is monitored through several parameters Coordinating Structure that involves all related including Non Performing Loans (NPLs), credit Operating Units. This Structure is chaired by the concentration on 25 largest borrowers, and loss Head of Risk Management Division. Mindful of the provisioning ratio. Credit risk from trade finance complexity and the huge credit-risk exposure, BRI activities is monitored through several parameters has also formed the Basel II Credit Risk Project such as NPLs on Export Notes, NPLs on Import Office Team, which is responsible for developing LC; whereas risk arising from treasury activities and implementing a credit risk management using is monitored through parameters including Net the Standard and Internal approaches. Performance Asset and outstanding concentration of the three largest borrowers over issuers. When The Monitoring and Mitigation of Credit Risks compared against the credit risk limit that is set as To maintain the quality of its credit portfolio, BRI the Bank’s acceptable credit risk appetite, the risk adheres to the principles of prudence in its lending profile of credit/financing activities in 2008 was still practices. The key principles in managing credit below the limit. risk include among other things the segregation of the Relationship Management from the Credit Risk Credit Risk Management Process Management, the implementation of the four eyes In managing the process of risk management, principle, application of a risk scoring system, and BRI has developed the Credit Risk Management the separation of nonperforming loan workouts. Implementation Guideline that has become Moreover, the lending practice has to adhere fully the reference for all Operating Units in the to proven and sound credit procedures. implementation of risk management. The guideline covers the Working Framework and Governance In order to fully implement the functions of risk on Credit Risk Management, as well as references management on credit risks, BRI has prepared for the implementation of Basel II, Back Testing, the framework of credit risk management and Stress Testing, and Internal Rating System for governance involving all related parties (Board of products and activities that are exposed to credit Commissioners, Board of Directors, risk taking risks; the procedures on determining Credit Risk units, Internal Audit, Risk Management Division), Limits, Credit Portfolio Manual, and guideline for by giving due attention to the basic values of the determining loss provisioning in areas prone to Bank, infrastructure, as well as supporting factors natural disasters. and the Business Plan of the Bank, so that all parties can discharge their respective roles and Furthermore, BRI routinely undertakes stress test responsibilities towards achieving the Bank’s goals. analyses (with different simulations and worst-case scenario). This analysis is done on credit portfolios BRI has formulated the Loan Portfolio Guideline using past performance data and based on that is aimed at helping BRI achieve the ideal credit existing external and macro-economic conditions, portfolio that offers the highest possible returns especially the crisis condition of 2008. with the least associated risks. 97. Annual Report 2008 Bank Rakyat Indonesia

The measurement of market risks (for interest rate and exchange rate risks) uses the Standardized Approach as stipulated under Bank Indonesia regulation no.5/12/PBI/2003. Based on that approach, the monthly average capital needed for allocation to cover market risk (interest rate and exchange rate risks) using Standardized Approach in 2008 was Rp401 billion or approximately 2.1% of the Bank’s total capital.

To gauge the likely impact that a rise in the Bank Indonesia interest rate may have on the Bank’s profit, net open position and CAR, a stress test is undertaken periodically, such that potential losses can be anticipated in advance.

The results of a stress test based on a scenario of BI rate increases in the range of 10.5% to 13.5% BRI is developing a Credit Concentration Limit showed the potential for a mark-to-market loss on guideline to cap the risk exposure at a level that bonds held by BRI. However, the likely impact on is tolerable to the Bank for the activities of credit, CAR is barely perceptible due to the strong capital treasury, trade finance and sharia banking unit as base of BRI. part of the Credit Risk Limit. BRI will also formulate the concentration limit and NPL limit each In order to simplify the management of market economic sector and business segment. risk and to provide updated information for management decision, BRI is in the process of 2. Market Risk Management developing an application for upgraded treasury Market Risk is a risk that may arise as a result of risk and market risk systems. adverse movements in market variables that could affect the portfolio held by BRI. Market variables 3. Operational Risk management consist of interest rate and currency-exchange Operational risk arises from inadequate or failure rate. of internal processes, people and systems or from external events affecting BRI operations. These The scope of market risk management includes risks should be identified, assessed, measured and treasury activities, investment in marketable mitigated by every personnel of BRI. securities and the money markets, investment in other financial institutions, financing activities for BRI continuously undertakes development and lending or such other purposes, financial raising enhancement in the quality of operational risk activities and the issuance of debt notes, and the management in order to integrate the internal financing activities in trading. This also includes interests of BRI and that of the need to comply banking activities that are based on the sharia with prevailing laws and regulations. principles. 98. Annual Report 2008 Bank Rakyat Indonesia

The cultivation of a Risk Culture is critical so that implementation of risk management and every personnel in all operating units of BRI is able the acculturation of risk awareness in the to identify, measure, control and monitor risks respective Operating Units. that are associated with their activities, and to be 6. Sort and establish lines of business at BRI that able to execute these steps accurately in order to are aligned with those that are recommended mitigate the potential loss effectively. by the Basel II Accord. 7. Undertake software application development In line with the efforts to implement operational for MRO in order to simplify the implementation risk management that is suitable for BRI of MRO and to prepare for the calculation of needs and those of compliance, and in order operational risk weighted capital using the to lower risk composite in its risk profiles, BRI Advanced Measurement Approach (AMA) continuously improves the implementation of method. framework, governance, and other operational 8. Develop policies on Business Continuity risk management tools, including Incident Management (BCM). Management to collect information on incidents 9. Undertake the management of each new in daily operations. In addition to that, BRI also product or activity. optimises the Risk Management Forum and Risk Management Function in each Operating Unit and In the case of managing reputational risk, risk management group at the Regional Office. compliance risk, legal risk, and strategic risk, BRI has implemented the followings: 1. Implement Risk and Control Self Assessment 1. Appoint the Corporate Secretariat Division as (RCSA) in all Operating Units. The RCSA coordinator for managing reputational risk at represents tools that are used to estimate risks the corporate level. and carried out quarterly. 2. Appoint the Compliance Division as 2. Implement the Key Risk Indicator (KRI) in every coordinator for managing compliance risk at risk owner in order to monitor the indicators of the corporate level. risks from time to time. 3. Appoint the Strategic Planning Division as 3. Prepare for the implementation of Incident coordinator for managing strategic risk at the Management (IM) that constitutes a tool corporate level. to record, manage and maintain data on 4. Appoint the Legal Division as coordinator for incidents that occurs in every Operating Unit of managing legal risk at the corporate level. the Bank. 4. Organise the Risk Management Forum (RMF) III. Business Continuity Management (BCM) as a medium or meeting forum between heads of Operating Units and their subordinates to In order to assure the business continuity, both in discuss issues on risks that are attached to normal condition and in state of disruption, BRI has business or operational activities. implemented Business Continuity Management 5. Implement risk management functions on to keep continuity of critical business process, every business operating unit to manage maintain BRI assets, and provide adequate and monitor risks. This function rests upon response in state of disruption and disaster. the official/supervisor in the respective units who is appointed and is responsible for the 99. Annual Report 2008 Bank Rakyat Indonesia

The aim of the Business Continuity Management 2. Guidelines on the development of the BCM that Policy is to: comprise of: • Standardise program on business continuity at a. Business Impact Analysis. BRI. b. Disaster Risk and Threat Assessment. • Provide a strategic direction for the c. Recovery Strategy. formulation, implementation, evaluation and d. Procedures on the Recovery Guidelines that updating of the BCM documentation. comprise of: • Provide a general reference for the Business i. (Emergency Response Plan) Continuity Management Maintenance Team ii. (Business Continuity Plan/BCP). (BCMMT) and the Crisis Management e. Testing Team (CMT) in preparing their teams to f. Updating and Distribution of Documents undertake the resumption of key business and g. Monitoring operational activities in times of emergency within the allotted period of time. With a sense of pride, BRI takes note of the • Comply with regulations. fact that a number of audit officials from the communication forum of the Internal Audit Units of The BCM policy comprises of: 16 state-owned enterprises that are engaged in the 1. General information on the BCM Coordination field of minerals and natural resources (including Structure at BRI. PT Pertamina, PT Bukit Asam, PGN, PLN, Elnusa and others), have chosen to benchmark against

BOARD OF DIRECTORS BRI and are of the opinion that the BCM policies of BRI constitute the most comprehensive and encompassing. Business Continuity Crisis Management Management Team (CMT) (CMT Head Office, Maintenance Team BRI has launched the Bank’s Official Guidelines Regional and Branch (BCMMT) on Emergency Recovery, including the use of Office) National Coordinator of Main Coordinator of CMT banners and flyers to disseminate information on BCMMT : RM Division at HQ: Service Division the subject. These banners and flyers contain

Roles and Responsibilities: Roles and Responsibilities: tips on how to face up to disasters and have been presented by the President Director to the Undertake the BCM program Undertake the required steps under normal conditions: and measures during crisis/ Compliance Director of BRI in a ceremony marking - Manage the BCM Program emergency, encompassing: of BRI - Identification of crisis/ the official kick-off of the BCM program in BRI. - Internalisation of response emergency to crisis/emergency and - Identification of the safety concern for business and security of employees, continuity customers and other - Monitoring the stakeholders that are implementation of the within the Operating Units BCM program (including of BRI testing/evaluation) - Recovery of operations bankwide for each of including coordination with the key business and related Operating Units operating activities of the and agencies. Bank. Human Resources Management

100. Annual Report 2008 Bank Rakyat Indonesia

Number of Personnel (people)

Status 2007 2008

Permanent Employees 36,772 35,580 Employees in Retirement Preparation 995 1071 Contract Workers 13 791 Trainees 261 132 Total BRI Personnel* 38,041 37,574

*) Excluding out-sourced personnel

Personnel Based on Position (people)

Position 2007 2008

Executive Vice President 29 52

Vice President 73 81

Assistant Vice President 322 292

Senior Manager 614 627 Manpower Planning Manager 476 519

Assistant Manager 3,594 3,428

Human resources management and development Officer 9,766 9,478

planning has been implemented in a timely manner, Assistant 23,167 23,097

with the right amount and quality consistent with Total* 38,041 37,574

BRI’s short and long term business plans. To fulfil this, *) Excluding out-sourced personnel more emphasis was placed on marketing instead of non-marketing activities which suited BRI’s unique characteristic that focuses on the MSME segment. Personnel Based on Education (people)

Educational Level 2007 2008 With respect to business development that followed Master’s Degree 849 880 organisational growth and the establishment of new Bachelor’s Degree 20,114 20,577 offices, BRI recruited 851 employees in 2008. To fulfil Diploma 4 4 4 Diploma 3 3,991 3,751 BRI’s human resource needs, as many as 20,304 Diploma 2 46 41 people were engaged in non-core business functions Diploma 1 108 100 through outsourcing. High School 12,861 12,169

Junior High School 68 52

The numbers of BRI’s employees in detail for 2007 and Total* 38,041 37,574

2008 are as follows: *) Excluding out-sourced personnel 101. Annual Report 2008 Bank Rakyat Indonesia

Employee Development and Growth 1. Training for newly recruited employees Along with BRI’s business growth and expansion To face future challenges and business competition, during 2008 which relied on network development, BRI’s employees are directed to become human capital there had been a lot of recruitment and training to with the ability to learn, desire change, be innovative support BRI’s growing activities. The education and provide creative thrust. BRI’s efforts to improve activities for employees conducted during 2008 are the quality of its human resources are to routinely as follows: conduct training and development activities through the - Cadre education for the development of movement of its employees (rotation and promotion), BRI leaders through the Staff Development as well as education and training both at home and Program (PPS), which was attended by 139 abroad. participants; - Training for Customer Service and Assistant In line with this, BRI prepared, refined and implemented Loan Officers for KUR involving 1,789 certain policies in 2008, such as: participants, conducted in six Regional - HRM Blueprint Learning Centres located in Padang, Jakarta, As a guide so that all human resources Bandung, Yogyakarta, Surabaya and management competency based activities are Makassar; implemented in an effective, objective, fair and - Training of Front Liners for 7,827 participants, transparent manner. carried out in order to support BRI’s service - Employees (personnel grading) improvement program; Implementation of personnel grading for employees - Training of Associate Account Officers (AAO) is intended to realize the principles of job matching for 993 participants to provide knowledge between the suitability of job requirements and about basic credit for account officer employees’ qualification. candidates. - Normal Distribution in Employee Performance Ratings 2. Job Promotion Training Aimed at increasing objectivity in employee Training for job promotion is conducted with assessment in line with work performance so as to the aim of providing skills and knowledge for create a competitive work environment. employees who have the potential for promotion and/or have recently been promoted. During 2008, Education and Training these trainings were conducted for: • 36 staff were sent to study at various BRI provided training and development programs that universities in the United States (top 50) and are adjusted to the needs of the Bank. During 2008, Australia (top 8) for their Master’s degree. BRI’s education and training expenditure amounted • In-house educational development included: to Rp168.60 billion, an increase of 26.11% from - Training of Senior Supervisor Development Rp133.69 billion in 2007. Organized training programs Program (SSDP), attended by 869 and employee development consisted of: participants, - Training of Assistant Manager Development Program (AMDP), attended by 101 participants. 102. Annual Report 2008 Bank Rakyat Indonesia

• Supplementary training for employees To reward work achievements, and in consideration promoted to the position of Marketing of differences in regional living costs, BRI provides Manager, Operations Manager and basic wage increases and makes revisions on the Sub-branch Manager, attended by 158 zonal divisions and tariff benefits according to the participants. respective regional living cost. In 2008, basic wage increases were implemented with due attention given 3. Application Training to the performance of each employee, while the revised The application training provides skills and zonal tariff and allowances for each region was done knowledge needed by employees to support their to create more equitable zonal divisions which were work in their current positions. This training is representative of the cost of living in BRI offices in carried out either in-house or through attending provinces across Indonesia. public courses, in and out of the country. In 2008, the in-house application training was attended Additionally, in order to reward employees on the by 9,242 participants, covering different types of basis of BRI’s work culture and to spur better work training which corresponded with the appropriate performances, BRI also provides financial and non- needs of users. financial rewards.

4. Development of e-Learning Industrial Relations and Work Culture During 2008, preparations were made for pilot modules for the early development of e-learning. Besides the giving of rewards, BRI also employed The modules include learning how to use policies on punishments that are both consistent and spreadsheet for the calculation of credit needs; just to employees who had been proven to have made as well as knowledge on Know Your Customer disciplinary violations in order to create a healthy and a and risk management. Another area which had sense-of-fairness in the working environment. been implemented is the working cooperation with external providers in order to provide a Learning Related to this, each BRI employee needs to act Management System for the development of an appropriately both in a personal and professional e-learning infrastructure. capacity in carrying out their duties. At the same time, work culture continues to be developed and Employee Welfare implemented through the Performance Improvement Program that must be carried out at least once a In appreciation towards its human resources, BRI year in each office and to make the Code of Ethics continued to fine tune the remuneration system in order a standard behavioural guide. At the end of 2008, for it to be more fair, equitable, competitive, easily Revitalization Work Culture activities were carried out administered, and in accordance with the needs and by BRI’s Change Agents across Indonesia to establish capabilities of the Bank. To maintain the level of wages a commitment to improve the quality of customer at a competitive level, BRI regularly follows the wage service to both internal and external customers. survey conducted by independent consultants. 103. Annual Report 2008 Bank Rakyat Indonesia

The Company also continuously maintained good In developing a code of ethics, BRI applies the communications with the Labour Union who are principles of Good Corporate Governance, namely: strategic partners in developing the Company’s future. • Transparency • Accountability Pursuant to the regulations as stipulated in Labour • Responsibility Act No. 13 of 2003, the Collective Labour Agreement • Independence (PKB) was made in 2007 between BRI and its labour • Fairness union to be used as a manpower relations agreement for the period of 2007 - 2009. Article 11 paragraph Elements incorporated in BRI’s code of ethics include: 1 mentions that BRI gives equal opportunity and • Compliance with legal and banking policy treatment in terms of the career development of its • Relationships with external customers full-time employees in accordance to the requirements • Relationships with local communities of the post, competencies and needs of the Bank. The • Relationships between management and bank aforementioned Collective Labour Agreement has been employees delivered to all employees at all levels. • Policy in advertising/promotion • Obligation to keep bank secrecy BRI’s Code of Ethics • Integrity and accuracy of bank bookkeeping • Transactions with customers and suppliers Running a business with a code of ethics of a high • Policy in the case of conflict of interest standard is imperative to maintain and enhance the • Prohibition to receive or offer bribes reputation and business of the Bank in the long term. • Policy on political contribution and activity Recognizing the importance of this, BRI has since 2003 • Policy on gifts and entertainments established a code of ethics that applies to all levels of the BRI organization.

This code of ethics describes the basic principles of personal and professional behaviour expected of every individual in BRI in performing their duties. Applying the code of ethics in BRI creates a work environment that is open and honest, maintains good relations with all stakeholders for the long-term successful achievement of BRI. Implementation of the code of ethics is also a part of good risk management and builds a good reputation for BRI. Information Technology

104. Annual Report 2008 Bank Rakyat Indonesia

As a banking organization with many offices spread In 2008, BRI’s Information Technology achievements widely across Indonesia, BRI has made information were as follows: technology an important factor which is greatly needed to create the integration and optimal utilization of the Development of Core Banking System (CBS) Bank’s network. BRINETS Throughout 2008, Operating Units that implemented In accordance with BRI’s vision for Information the online BRINETS application were: 1,296 Unit Technology to drive the creation and development Offices, 18 Branch Offices, 82 Sub-Branch Offices, 86 of a technological environment which is efficient, Cash Offices and 3 Operating Units at the Head Office. reliable and integrated within BRI’s business activities, With this implementation, BRINETS was installed in a the mission of Information Technology is to provide total of 3,879 BRI Operating Units in order to enlarge the optimal information system that supports BRI’s BRI’s network that can provide services in “real time, business operations, increases shareholder value, on-line” environment. and provides technology services on the basis of competitive Service Level Agreement (SLA). It also encourages and supports productivity and efficiency, while minimizing operational risks, and providing a safe and secured technological environment. 105. Annual Report 2008 Bank Rakyat Indonesia

Development of Management Information System application and infrastructure were carried out (MIS) periodically so that BRI’s business activity can still run Development of MIS was conducted to improve the when there is damage or disruption to the Information accuracy of the data, the timeliness in the provision Technology infrastructure. BRI has prepared a Disaster of data, as well as to integrate data and information in Recovery Centre (DRC) in a different location from the relation to business needs. Data Centre to be used as a back-up facility when the Data Centre encounters problems. Development of Electronic Banking To serve customers 24 hours a day, 7 days a week, Availability of Communications Network BRI needs to improve and develop electronic banking Along with the development of BRI’s network and features continuously. Electronic channel makes it easy operations in Indonesia, which grew rapidly and for customers to obtain information, communicate and the increase in on-line Operating Units, BRI must conduct banking transactions through ATMs, phone maintain the availability of its communications network banking facilities, electronic funds transfer, mobile supported by continuous supervision of the Enterprise phones and EDCs. Monitoring System and using redundant and different communication media such as satellite, terrestrial and Cooperation wireless systems. Information technology also supports BRI’s cooperation process with several institutions such as Bulog (host- Systems Security and Security Awareness to-host payment with Bulog’s third parties), PUSRI BRI’s technology infrastructure is evaluated and (host-to-host purchase of fertilizer), Pertamina (new audited on a regular basis with the aim of mitigating host-to-host fuel purchases), UNPAD (host-to-host weaknesses and fragility risks to the Information payment of university tuition fees) and Taspen (pension Technology infrastructure. After the system’s fragility payments using fingerprint identification). was identified, appropriate corrective actions were taken in accordance with Vulnerability Management Business Continuity Plan and Disaster Recovery standard procedures. BRI is also preparing for Plan certification of Operational Information Technology To maintain customers’ trust and mitigate operational Security, to comply with ISO Standards (ISO 27001 risk when failure occurs to the system’s infrastructure 2005) which is recognized internationally. To improve and information technology applications, BRI had the Information Technology Security Awareness, BRI prepared a Business Continuity Plan and Disaster has implemented the Security Awareness program to Recovery Plan that are part of the Company’s Business all of BRI’s employees. Continuity Management. Pilot tests for the systems Network and Services

106. Annual Report 2008 Bank Rakyat Indonesia

Tough competition in the financial industry made banks • 337 Sub-Branch Offices more aggressive in adding to their branch-office and • 3 Overseas Offices e-channel networks. Until the end of 2008, BRI has • 179 Cash Offices the largest operational bank network compared with • 4,417 BRI Units (Micro Outlets) other banks in Indonesia. With its vision to become the • 76 Service Posts largest National Payment Gateway bank in Indonesia, • 27 Sharia Branch Offices BRI must pursue the strategy of network expansion • 18 Sharia Sub-Branch Offices aggressively in order to prevent a loss in market share. Supported by the development of information As of December 2008, 3,879 BRI Operating Units have technology, BRI will maintain dominance in network been connected on-line. Those Operating Units cover services in both urban and rural areas. the entire divisions in the Head Office, Regional Offices, Regional Audit Offices, Branch Offices, Sub-Branch BRI currently has more than 5,400 Operating Units Offices, 2,987 BRI Units, Sharia Branch Offices, Sharia which are spread across the archipelago, both in urban Sub-Branches, and Learning Centres. BRI plans to and in rural areas. Networks and operations consist of: bring all of its remaining Operating Units into the real- • 1 Head Office time on-line system in the near future. • 14 Regional Offices • 12 Regional Audit Offices • 1 Special Branch Office • 372 Branch Offices 107. Annual Report 2008 Bank Rakyat Indonesia

To support the performance of the network, BRI 2. Creating support synergy for internal support and carried out several strategic programs such as the other service providers through the Service Level standardization of the display of office buildings and Agreement (SLA) mechanism. ATM booths to improve both the corporate image of BRI and the quality of ATM services. While for Some service activities have been conducted in an maximising the performance of Operating Units, BRI attempt to improve the quality of has carried out network classification for Branch Offices BRI’s service, for both external and internal customers and Sub-Branch Offices and performance evaluation (BRI business units), including among others: for Regional Offices, Branch Offices and Sub-Branch Offices based on the balanced scorecard system that 1. Preparation and development of new policies has been running regularly and consistently. and procedures in the form of a new Standard Operating Procedures (SOP) to support business For 2009, BRI’s strategy remains to continue to add and operational continuity and support the creation outlets in selected and intended potential areas. In the of improved quality service in every operational implementation of information technology functions, Operating Unit; BRI will add on-line outlets, electronic banking technology using Biometrics (Finger Print) and EDC 2. Preparation of various quality improvement (Electronic Data Capture) in order to optimise the programs to upgrade BRI’s service that aims to function of delivery channels and improve Fee Based achieve “Customer Satisfaction in All Segment.” Income. While for e-channel deliveries, the strategic The upgrade of the quality improvement process is expansion of the e-channel network will be carried done to improve the queue system, simplification out on a relatively large scale. In addition, to optimise of front liner work process, handling customer performance and efficiency of Operating Units, BRI will complaints, and the One Stop Service on Customer reexamine every Branch Office for its organisational Service to expedite the account opening process; structure suitability with business needs as well as determine parameters for upgrade and downgrade 3. Execution of the development of integrated and Operating Units status in respect to their respective accurate monitoring tools for the e-Banking and cost and benefits. Complaint Management System in order to realize BRI’s e-Banking service quality; Service BRI has a special Operating Unit responsible for 4. Improvement in the quality of service to internal preparing the development of operational and quality customers (all BRI Operating Units in Indonesia), services policy, manage service disruption system, BRI carried out monitoring of the development customer data quality and e-Banking services to and completion of the quality customer database. achieve accurate, valid, and timely service excellence This database can be used as a medium for cross in accordance with current goals and conditions to selling in the future and provide solutions to the support business growth. Service mission that must be problems that are reported by all Operating Units in implemented to achieve this includes: Indonesia in accordance with the SLA.

1. Developing service management to build BRI’s image that always prioritise on customer satisfaction and provide service excellence, and Corporate Social Responsibility

108. Annual Report 2008 Bank Rakyat Indonesia

BRI seeks to maintain the long-term sustainability Tanumihardja & Partners with the opinion of “fairly in all of its business activities through the Company’s material respect” in accordance with Report No. 19/ corporate social responsibility (CSR) program in the GA/HDT-DH.HT/PKBL-BRI/IV/2009 on 7 April 2009. economic, social, and environmental fields while taking into consideration the needs of both BRI and the Partnership Program community as well as without harming the interests The Partnership Program is a program to improve of shareholders. BRI believes that CSR activities are the ability of small business to become strong and not only voluntary, but reflects all of the Company’s independent through the utilization of funds derived business activities. Companies that are responsible from the Company’s profits. Partnership loans are should provide significant contributions towards the targeted at existing small businesses that are already welfare of the community in the vicinity of where feasible but do not qualify for BRI’s commercial loans it operates. BRI has developed a number of CSR as they are still non-bankable. programs to help improve the community’s quality of life and develop economic self-reliance through the BRI carries out the Partnership Program of “BRI Partnership and Community Development Program Cares for Small Businesses” in the form of financial (PKBL). assistance and guidance to increase the productivity of its guided partners classified as small businesses, In 2008, BRI’s PKBL financial statements were audited including cooperatives, the fishery sector, trade, by the Public Accounting Firm of Herman Dody industry, services, agriculture and others, in BRI’s work 109. Annual Report 2008 Bank Rakyat Indonesia

regions throughout Indonesia. “BRI Cares for Small Businesses” activities that have been conducted, were in the form of entrepreneurial training and product marketing assistance for guided partners which included exhibitions in the country and the provision of partnership loans with affordable terms. The aim of granting partnership loans to Small Business is to provide easier access to capital for owners of micro and small businesses that aren’t as yet bankable but are expected to improve capabilities and productivity. Guided partners can later become embryos of commercial customers who are served by BRI’s commercial loan scheme.

During 2008 the Company provided Partnership Program funds to the tune of Rp63.94 billion, of which Rp61.64 billion were in the form of Partnership Loans.

Distribution of Partnership Funds in 2008

(in Rp billion)

Sector Region Total % Fisheries/Animal Agriculture/ Cooperatives Grants Trade Industry Services Husbandry Plantation & Others & Aid

Sumatra 1.79 10.25 1.39 2.73 1.51 1.77 0.32 19.75 30.89 Jakarta 0.05 3.90 0.18 0.73 0.37 0.08 1.31 6.61 10.34 West Java 0.29 3.05 0.62 0.57 0.35 0.29 0.19 5.37 8.39 Central Java 0.12 2.92 0.45 0.60 0.21 0.13 0.19 4.63 7.23 1.11 1.68 0.45 1.00 0.32 0.20 0.13 4.90 7.67 Kalimantan 0.32 1.38 0.48 0.37 0.09 0 0 2.64 4.13 East Indonesia 2.94 10.58 1.39 3.58 0.88 0.51 0.16 20.04 31.34 Total 6.62 33.76 4.96 9.58 3.73 2.98 2.30 63.94 100.00 110. Annual Report 2008 Bank Rakyat Indonesia

Realization of Partnership Program in 2008 BRI Cares for Natural Disaster Victims BRI has provided assistance of Rp0.96 billion for Sectors Number of Partners % victims of natural disasters that occurred in several Fisheries/Animal Husbandry 271 9.64 areas, including: assistance for victims of the Cianjur Trade 1,568 55.78 landslide, floods in most parts of the islands of Java Industry 224 7.97 Services 405 14.41 and , and the earthquake in Dompu. In Agriculture/Plantation 122 4.34 addition, BRI also provided relief aids for victims of Cooperatives/Others 59 2.10 Grants and Aid 162 5.76 the tidal waves and strong winds in Kalabahi, and Total 2,811 100.00 the earthquake Manokwari, and bush fires in South Kalimantan.

Community Development Program BRI Cares for Places of Worship The scope of BRI’s Community Development Program Rp2.84 billion of assistance was distributed for the includes field support for natural disaster victims, construction or renovation of places of worship and assistance for places of worship, health assistance, devotee facilities. education and training assistance, and support for the development of public infrastructure and facilities BRI Cares for Education to help conserve nature via the BRI Cares Program. Distribution of BRI Cares for Education in 2008 In 2008, Rp35.62 billion was channelled to the amounted to Rp18.39 billion, which included Community Development Program. scholarship assistance to students and undergraduates from poor families, the building of classrooms in public schools and Islamic religious schools, library assistance, uniforms and school supplies, and the mission of supporting the arts as well as training assistance to the community.

BRI Cares for Health BRI has provided Rp7.96 billion in aid to enhance public health. Assistance given includes: basic food aid package for low-income communities, free health service/treatment, help for operations, support the cost of patient care in 30 public hospitals, public clinics in Indonesia’s border areas and immunization assistance and Posyandu (Community Health Centre). 111. Annual Report 2008 Bank Rakyat Indonesia

BRI Cares for Public Facilities Rp4.67 billion of aid was disbursed to repair irrigation systems and channels, erection of bus stops, support the development of traditional markets, public gardens, orphanage homes renovation, making wells and water pumps, purchase of hearse, construction and installation of bio-gas, clean water collection centres and renovation of public buildings.

BRI Cares for Nature Conservation Rp0.80 billion was distributed in the form of tree planting in critical land areas.

In the upcoming years, more Partnership and Community Development Program will be undertaken by BRI, among others, to support the development of donna products from local areas and provide priority social assistance for the improvement of education and public health. 112. Annual Report 2008 Bank Rakyat Indonesia Sharing Delightful Experiences with Customers

In the efforts to realise the vision of BRI to be a leading commercial bank that always prioritises customer satisfaction, BRI emphasises on providing services that induce a delightful experience on the part of every customer. The initiatives begin at the banking halls of BRI’s main branch offices of BRI, where customers enjoy a relaxed and pleasant atmosphere in their every day banking transactions, and which are currently being applied consistently across BRI’s vast service platforms and units throughout the country. 113. Annual Report 2008 Bank Rakyat Indonesia Profile of the Board of Commissioners

114. Annual Report 2008 Bank Rakyat Indonesia

Bunasor Sanim President Commissioner/Independent Commissioner

Born in Brebes on 16 December 1945. Appointed President Commissioner of BRI since 30 May 2006, and Independent Commissioner of BRI since 17 May 2005, having served previously as the Chairman of the Audit Committee of BRI (2005-2006). Presently he is Lecturer and Dean of the Faculty of Economics and Management of the Bogor Agricultural University (IPB). He is active in several professions including as Chairman of the Association of Economics Graduates of Bogor Raya; and a member of the Advisory Board of the International Centre for Analysis of Finance and Economic (Inter CAFE), the Advisory Board of the Indonesia Economic Intelligence, the Advisor Team for the IPB Mutual Fund Investment, and the Senior Scientist Partnership, a cooperation between IPB and University of Göttingen, Germany. He graduated with a degree in Agriculture Social Economics in 1975 and a Master’s degree in Agricultural Economics in 1983, both from IPB, and a Doctorate degree in Resources Economics from the University of the at Los Banos in 1986.

Agus Pakpahan Commissioner

Born in Sumedang on 29 January 1956. Appointed Commissioner of BRI since 30 May 2006. Presently he is Deputy of the Agro Industry Business Sector, Forestry, Paper, Printing and Publication of the Ministry of State Enterprises; Head of the Executive Board of the Collective Plantation Farmers Association, and as Lecturer of Research Methodology at the Post Graduate Program of the Bogor Agricultural University (IPB). He has previously served as General Director of Production Management, Department of Agriculture, and President Commissioner of PT Perkebunan Nusantara (Persero) XIV (1999-2003). He graduated with a degree in Forestry in 1978 and a Master’s degree in Agricultural Economics in 1981, both from IPB, and a Doctorate degree in Agricultural Economics from Michigan State University, USA, in 1988. 115. Annual Report 2008 Bank Rakyat Indonesia

Agus Suprijanto Commissioner

Born in Yogyakarta on 14 August 1953. Appointed Commissioner of BRI since 22 May 2007. He is currently an Advisor for the Ministry of Finance, having previously served as Head of Central Analysis and Policy Harmonisation, the Ministry of Finance. He graduated with a degree in Law from Udayana University, Denpasar, in 1985, a Master of Arts degree in International Economics in 1991, and a Doctorate degree in Econometrics in 1995, both from the University of Colorado, Boulder, USA.

Saifullah Yusuf Commissioner

Born in Pasuruan on 28 August 1964. Appointed Commissioner since 5 September 2007. Presently he is the Chairman of the Anshor Youth Movement Centre, having previously served as the State Minister of Remote Area Development, in the United Cabinet of Indonesia (2004-2007). Prior to that, he served as a Member of the House of Representatives of RI (1999-2004). He graduated with a degree in Social and Political Science from National University, Jakarta, in 2003. 116. Annual Report 2008 Bank Rakyat Indonesia

B. S. Kusmuljono Independent Commissioner

Born in Bogor on 24 June 1943. Appointed Independent Commissioner of BRI since 17 May 2005. Presently he is Chairman of the Micro Finance Empowerment Committee of Indonesia; President Commissioner of PT Syarikat Takaful Indonesia; Chairman of PT Tatamasa Group/Microfin; Chairman of the Centre for Policy Reform of Indonesia; and Chairman of the Wali Amanah Assembly Committee, Bogor Agricultural University (IPB). He is also Lecturer at the Bandung Institute of Technology (ITB). Previously, he was President Director of PT (Persero) Permodalan Nasional Madani. He graduated with a degree in Chemical Engineering from ITB, Bandung, in 1970, an MBA degree from the University of Southern California, USA, in 1974, and a Doctorate degree in Environment and Natural Resources Management from IPB, Bogor, in 2007.

Baridjussalam Hadi Independent Commissioner

Born in Yogyakarta on 7 January 1948. Appointed Independent Commissioner of BRI since 30 May 2006. He is currently Chairman of the Indonesian Banking Development Foundation, having been a career official with Bank Indonesia since 1979, serving in various positions with the latest as an Advisor for Sharia Banking attached to the Board of Governors. He graduated with a degree in Economics from the Jenderal University, Purwokerto, in 1976 and a Master of Arts degree from Vanderbilt University, USA, in 1984. He also attended the Leadership School of Bank Indonesia in 1994. 117. Annual Report 2008 Bank Rakyat Indonesia

Aviliani Independent Commissioner

Born in Malang on 14 December 1961. Appointed Independent Commissioner of BRI since 17 May 2005, having previously served as the Director of INDEF (Institute for Development of Economics and Finance). She is an active researcher and writer of several books on economic reviews. She in presently Chairperson of ISICOM (the Indonesian Society of Independent Commissioners); a member of the Executive Board of ISEI (the Indonesian Association of Economics Graduates) Jakarta chapter; a member of the Sharia Ecomomic Expert Community Board; co-founder of the Centre for Policy Reform of Indonesia; advisor to the Global Association of Risk Professional (GARP)-Indonesia; and member of the Indonesian Provincial Government Association Board (APPSI). She graduated with a degree in Economics from the Atmajaya University, Jakarta, in 1985, an MBA degree from the University of Indonesia, Jakarta, in 1995, and is currently reading for her Doctorate degree in Business Management at the Bogor Agricultural University. Profile of the Board of Directors

118. Annual Report 2008 Bank Rakyat Indonesia

Sofyan Basir President Director

Born in Bogor on 2 May 1958. Appointed President Director of BRI since 17 May 2005, having previously served as the President Director of Bank Bukopin. He began his banking career with Bank Duta in 1981, and moved to Bank Bukopin in 1986, where he held several managerial positions including as Manager of several branch offices of Bank Bukopin and as Commercial Director, prior to his appointment as President Director of Bank Bukopin. He graduated with a degree in Accountancy from STAK Trisakti, Jakarta, in 1980.

He attended several training courses and seminars on banking and management, including Bank Indonesia’s Executive Risk Management Certification (Denpasar); Islamic Finance Forum (Switzerland); Seminar on Business Continuity Planning, by Ernst & Young; SESPIBANK (Jakarta); Strategy Development Session, IBM; and Structuring Loans & Short Term, the Institute of Banking & Finance.

Sarwono Sudarto Director

Born in Sragen on 21 March 1952. Appointed Director of BRI since 30 May 2006. He has been with BRI since 1976, serving in various positions including Manager of BRI Finance Limited Hong Kong, Branch Manager, Head of Retail Business Division, Head of Internal Audit Division, Head of Strategic Planning Division, and Head of Treasury Division BRI. He graduated with a degree in Economics from Diponegoro University, Semarang, in 1975 and an MBA degree from Tulane University, USA, in 1987.

He attended several training courses and seminars on banking including Capital Market (Tokyo); Bank Indonesia’s Executive Risk Management Certification – BSMR (Singapore); The National Defence College (LEMHANAS RI), SESPIBANK (Jakarta); Credit Manager; Organization Management. He represented BRI in several conferences in London, Hong Kong and Singapore. 119. Annual Report 2008 Bank Rakyat Indonesia

Abdul Salam Director

Born in Kudus on 28 August 1948. Appointed Director of BRI since 30 May 2006, having previously served as Director and President Director of PT PNM (Persero). Formerly a career official with Bank Indonesia, he served in various positions including as an Advisor attached to the Board of Governors, Director of the BPR (Rural Credit Bank) Supervisory Directorate, Director of the Credit Directorate, and Head of the Bank Indonesia Office in Bandung. He graduated with a degree in Economics from the Diponegoro University, Semarang, in 1974, and Master in Management from IPPM, Jakarta, in 1996, and a Doctorate degree from the Post Graduate School of Gajah Mada University, Yogyakarta, in 2007.

He attended various training courses and seminars including Bank Indonesia’s Executive Risk Management Certification – BSMR (Denpasar); Micro Credit Summit (New York); the National Defence College (LEMHANAS RI); Pollution Abatement Equipment Project (Washington); Financial Information System (Sydney); Project Management for Leading Position (Germany); SESPIBI (Jakarta).

Sudaryanto Sudargo Director

Born in Semarang on 12 May 1952. Appointed Director of BRI since 30 May 2006. He has been with BRI since 1978 and has served in several managerial positions including as Head of Corporate Division, Head of Human Resources Management Division, Regional Manager of BRI Bandung, and prior to his appointment to Directorship, as Head of Agribusiness Division. He graduated with a degree in Agriculture from the Bogor Agricultural University in 1977, and an MBA degree from Adelphi University, USA, in 1987.

He attended various training courses and seminars on banking including the International Conference on Future of the Palm Oil Business (Thailand); Bank Indonesia’s Executive Risk Management Certification – BSMR (Hong Kong & Singapore); Master Card Executive Forum (Macao); 2nd Annual World Renewable Energy Summit (); Asia Pacific Region Micro Credit Summit (Bangladesh); SESPIBANK (Jakarta); Organization Management Temasek (Jakarta & Yogyakarta); Professional Banker’s Program, (Jakarta); Loan Syndication Course with Citicorp (Hong Kong). 120. Annual Report 2008 Bank Rakyat Indonesia

Sulaiman Arif Arianto Director

Born in Boyolali on 2 August 1958. Appointed Director of BRI since 30 May 2006. He began his banking career with BRI in 1983 and has since served in various positions including as Head of Agribusiness Division, Head of General Business Division, and Regional Manager of BRI Denpasar and BRI Jakarta. He graduated with a degree in Animal Husbandry from the Bogor Agricultural University in 1981, and an MBA degree from the University of New Orleans, USA, in 1991.

He represented BRI in several organizations such as APRACA, the UN Advisor for Inclusive Financial System and Micro Finance Networks. He was guest speaker in several international seminars on MSME, including Asian Banking Forum (Jakarta); APEC SME Working Group (Denpasar); Financial Technology Conference (Singapore); Micro-finance Sustainability, APRACA, (Kunming); APO Forum; Micro Banking & Risk Management Workshop (Beijing); Asia Pacific Regional Micro-credit Summit (Bali).

A. Toni Soetirto Director

Born in Yogyakarta on 18 August 1958 and graduated from the Bogor Agricultural University in 1981. Appointed Director of BRI since 2006. He began his banking career in 1983 with Bank Duta, and subsequently moved to Bank Bukopin where he served in various managerial positions including Group Head of Credit & Marketing for Financial Institutions, Syndication Team Leader, Director of Risk Management and Compliance and last as Commercial Director.

He attended various courses and seminars on banking including: The Branch of The Future (Barcelona); Self Service Banking (Barcelona); Structured Trade and Export Finance (Singapore); The Strategic Board (Australia); Comparative’s Study for Trade Financing and Risk Management (Germany); Corporate Funding Strategies (Kuala Lumpur); Compliance Director Workshop; Securities Lending (Singapore), and Advanced Core Credit (Singapore). 121. Annual Report 2008 Bank Rakyat Indonesia

Lenny Sugihat Director

Born in Bogor on 26 March 1956. Appointed Director of BRI since 30 May 2006. She has been with BRI since 1981, working her way up through various assignments including a Head of Strategic Planning Division, Head of Agribusiness Division and last served as Head of Loans Restructuring and Recovery Division prior to her appointment as Director. She graduated with a degree in Fisheries from the Bogor Agricultural University in 1979, and earned an MBA degree from the University of Houston, Texas, USA, in 1993.

She attended various courses and seminars on banking including: Bank Indonesia’s Risk Management Certification – BSMR (Denpasar); The World Bank Conference on the ”Role of State-Owned Banks” (USA); Strategic Management in Banking Programme (France); SESPIBANK (Jakarta); Problem Loan and Loan Syndication Training (Sydney); Advanced Management Program for Overseas Bankers (USA); and Credit Risk Management, BRI – Citibank.

Bambang Soepeno Director

Born ini Surakarta on 23 November 1952. Appointed as Director of BRI since 30 May 2006. He has been with BRI since 1980 and served in various positions including Inspector of BRI Medan, Head of International Division, Director of Pension Fund and last served as Head of Internal Audit of BRI Head Office. He graduated with a degree in Animal Husbandry from Diponegoro University, Semarang, in 1979, and an MBA degree from St. Louis University, USA, in 1991.

He attended various courses and seminars on banking and corporate governance including Bank Indonesia’s Risk Management Certification – BSMR (Singapore); The IIA International Conference (USA); Prevention of Banking Crime (Jakarta); Good Corporate Governance (Jakarta); International Bankers Seminar (USA); Risk Management, (ASEAN); SESPIBANK (Jakarta); Auditing Capital Market and International Trade Finance (Hong Kong). 122. Annual Report 2008 Bank Rakyat Indonesia

Asmawi Syam Director

Born in Ujung Pandang on 16 August 1955. Appointed Director of BRI since 5 September 2007. He has been with BRI since 1980, attaining various leadership positions including Regional Manager of BRI Denpasar, Regional Manager of BRI Bandung, Head of Consumer Banking Division, and Head of General Business Division. He graduated with a degree in Economics from Hasanuddin University, Ujung Pandang, in 1979, and a Master in Management degree from , Bandung, in 2003.

He attended various training courses and seminars including SESPIBANK (Jakarta); World Congress on IT Information (Adelaide); Asset & Liability Management, Credit Risk Management & International Banking (Brussels); Strategic Leadership (Bangkok); Card and Payment, EFMA (Paris); SOE Restructuring & Performance Enhancement (Jakarta); and Public Private Partnership (Sydney).

Suprajarto Director

Born in Yogyakarta on 28 August 1956. Appointed as Director of BRI since 5 September 2007. He has been with BRI since 1983, serving in various managerial positions including as Branch Manager, Deputy Manager of Regional Office BRI Jakarta, Head of Corporate Secretariat Division, and Regional Manager of BRI Jakarta I. He graduated with a degree in Economics from Universitas Pembangunan Nasional, Yogyakarta, in 1982, and a Master in Management degree from Padjadjaran University, Bandung, in 2001.

He attended various training courses and seminars including The Branch of the Future (Barcelona); International Trade BRI Hong Kong & BRI New York Agency; the Fifth Annual Asia Pacific Mobile Payments (Bangkok), SESPIBANK (Jakarta), and Executive Management Development Program (Jakarta). Senior Managers

123. Annual Report 2008 Bank Rakyat Indonesia Head Office

Slamet Riyadi Ano Kurniadi Head of Logistics and Fixed Assets Management Head of Credit Administration Division Division M. Jarot Eko Winarno Basuki Setyadjid Head of Human Resources Management Division Head of Treasury Division Zulhelfi Abidin Dwi Hari Sugeng Prijono (alm.)* Head of Information System and Technology Division Head of Program Business Division Mohamad Helmi Hartono Sukiman Head of Credit Card Division Head of Corporate Secretariat Division Joice Farida Rosandi Yusuf Nawawi Head of Consumer Loans Division Head of Education and Training Division Luki Presisa Budi Utami Triyana Head of Services Division Head of Operations Centre Division Agus Katon ES. Irwan Rinaldi Head of General Business Division Head of Financial & Management Accounting Division Wasito Pramono Dede Suherman S. Head of Micro Business Division Head of International Business Division Mudjiharno Dwi Agus Pramudya Head of Legal Division Head of SOE Business Division Irianto Wachju Prijatna Head of Strategic Planning Division Head of Agribusiness Division Agoes Roediyanto Djarot Kusumayakti Head of Micro Business Network Division Head of Credit Risk Analysis Division Moch. Hadi Santoso I Komang Sudiarsa Head of Retail Business Network Division Head of Institutional Relations Division Retno Surdini Susilo Head of Compliance Division Head of Funds Services Division A. Firman Taufick Donsuwan Simatupang Head of Marketing Communications Division Head of Retail Loans Division Ali Mudin Windiartono Head of Internal Audit Head of Risk Management Division

Heru Sukanto Head of Loans Restructuring and Recovery Division

*) Passed away on 16 December 2008 124. Annual Report 2008 Bank Rakyat Indonesia

Regional Office Special Branch Office

Agus Imam Sudjahri Opi Sofyan Suryadi Regional Manager of BRI Banda Aceh Head of Special Branch

Albert Radjagukguk Regional Manager of BRI Medan

Mohammad Irfan Regional Manager of BRI Padang Regional Audit Office

Randi Anto Ircham Sjafindra R. Regional Manager of BRI Palembang Inspector of BRI Medan

Tri Susilo Hadi Susanto Regional Manager of BRI Jakarta 1 Inspector of BRI Padang

Nandi H. Hamaki Umi Haryati Regional Manager of BRI Jakarta 2 Inspector of BRI Palembang

Yasirin Ginting S. Yadie Supriatno Regional Manager of BRI Bandung Inspector ofBRI Jakarta

A.M. Nova Christiana Muchsin Choirul Amien Regional Manager of BRI Semarang Inspector BRI Bandung

Teddy Rustandi A.R. Sulistianto Regional Manager of BRI Yogyakarta Inspector of BRI Semarang

Agus Hidayat Tjuk Sugiyono Regional Manager of BRI Surabaya Inspector of BRI Yogyakta

Hidzuldin Elfani Jimmy E. Elias Regional Manager of BRI Banjarmasin Inspector of BRI Surabaya

I.B. Putra Arthama Budi Purnomo Regional Manager of BRI Denpasar Inspector of BRI Banjarmasin

Eko Wahyu Andriastono Putut Broto Sayono Regional Manager of BRI Manado Inspector of BRI Denpasar

Teten Djaka Triana Rusli Witjahjono Regional Manager of BRI Makassar Inspector of BRI Manado

Kuwat Waluyo Inspector of BRI Makassar Products and Services

125. Annual Report 2008 Bank Rakyat Indonesia

Savings Products Consumer Loans Credit Card BritAma Housing Loan (KPR) Demand Deposit Motor Vehicle Loan (KKB) Time Deposit Multi-Purpose Loan (KMG) Simpedes Hajj Savings Medium and Corporate Loans Working Capital Loan Export Working Capital Loan Loan Products Investment Loan Import Working Capital Loan Micro Loans Construction Working Capital Loan Kupedes Import Guarantee Facility People Business Loan (KUR) - Micro Standby LC Bank Guarantee Retail Loans Infrastructure Loan Working Capital Loan Syndication Loan Briguna Loan Investment Loan Express Loan Banking Services Construction Loan under OB1 Framework PPTKI Loan (for Indonesian Migrant Worker Agency) Priority Banking Franchise Loan Cash Management System Warehouse Receipt Loan Salary-Based Loan Petrol Station Loan BTS Loan Treasury Service Bank Guarantee Foreign Exchange Transaction Swap Transaction Program Loans Forward Transaction People Business Credit (KUR) Trustee Services Loan to Members of Primary Coperatives (KKPA) Securities Sales Agency Loan for the Development of Bio Fuels & Revitalization Custodial Services of Plantation (KPEN-RP) Financial Institution Pension Funds Loan to Small Business Group (KKUK) Loan to Micro and Small Business - Government Notes International Banking (KUMK – SUP) Export-Import Transaction Loan for Food and Energy Security (KKPE) International Remittance Loan for the Economic Empowerment of Coastal Letter of Credit Communities (PEMP) Networks

126. Annual Report 2008 Bank Rakyat Indonesia

Banda Aceh

Medan

Padang

Banjarmasin

Palembang

Jakarta Semarang Bandung Surabaya

Yogyakarta Denpasar

Total Networks No BRI Networks 2007 2008

1. Head Office 1 1 2. Regional Offices 14 14 3. Regional Audit Offices 12 12 4. Special Branch Office 1 1 5. Branch Offices 340 372 6. Overseas Offices 3 3 7. Sub-Branch Offices 230 337 8. Cash Offices 24 179 9. BRI Units (Micro Outlets) 4,300 4,417 10. Service Posts 100 76 11. Sharia Branch Offices 27 27 12. Sharia Sub-Branch Offices 18 18 Total 5,070 5,457 127. Annual Report 2008 Bank Rakyat Indonesia

Manado

Makassar BRI Network and Addresses

128. Annual Report 2008 Bank Rakyat Indonesia

Operating Unit (OU) Type of OU Address Area Code Telephone Facimile Telex

BANDA ACEH KW Jl. Cut Meutia No. 17, Banda Aceh 0651 22822 (hunting) 23487, 22352 1. BANDA ACEH KC Jl. Cut Meutia No. 17, Banda Aceh 0651 22900 (hunting), 7410714 31190 54100, 54118 1. Sabang KCP Jl. Perdagangan No. 123, Sabang 0652 22601/4 22603 21146, 21126, 21013, 21230, 2. BIREUN KC Jl. Kol. Husein Yoesof I No. 1-2, Bireun 0644 22040 54166 323126 3. BLANG PIDIE KC Jl. Persada, Desa Keude Siblah, Blang Pidie 0659 91938, 91008, 91266, 91127 91070 54210 4. KUTACANE KC Jl. No. 14, Kutacane 0629 21170, 21031, 21399, 21961 21170 54309 Jl. Kute Lintang No. 136, Pasar Centong Bawah, 1. Blangkejeren KCP 0642 21776 21776 Blankejeren Kab. Gayo Lues 21033, 21812, 21342, 21365, 5. LANGSA KC Jl. Darussalam No. 1, Langsa 0641 21364 51829 21535 Jl. Iskandar Muda No. 4-5, Kuala Simpang, Kab. Aceh 1. Kuala Simpang KCP 0641 333365/66 333367 Tamiang 41905/7, 41695, 41478, 43459, 6. LHOKSEUMAWE KC Jl. Merdeka No. 1, Lhokseumawe 0645 40214 51797 41906 1 Lhoksukon KCP Jl. Pangnanggroe No. 4, Lhoksukon Aceh Utara 0645 32224, 32225 32227 7. MEULABOH KC Jl. Gajah Mada No. 70 A-B, Meulaboh 0655 7006217 7006311 54168 21306, 21411, 21912, 22450, 8. SIGLI KC Jl. Prof. A. Madjid Ibrahim 0653 22411 54165 21535 9. TAKENGON KC Jl. No.164, Takengon 0643 21294, 21406, 21342, 21117 21119 54109 10. TAPAKTUAN KC Jl. Nyak Adam Kamal No. 42, Tapaktuan 0656 21613, 21038, 21456, 21747 21066 54211 Jl. Iskandar Muda No. 13, Rimo, Kec. Gn. Meria, Kab. 1. Singkil KCP 0658 21237, 21402 21401 Singkil MEDAN KW Jl. Putri Hijau No. 2 A, Medan 061 4525666, 4528323 4525601 1. BALIGE KC Jl. Sisingamangaraja No. 188, Balige 0632 21159, 21365, 21032 21085 52539 2. BINJAI KC Jl. No. 6, Binjai 061 8821503, 8821062, 8823220 8824997 51039 1. Diski KCP Jl. Binjai Medan KM. 13.5, Diski Sei Semayang, Binjai 061 8441781 8441784 2. Stabat KCP Jl. Perniagaan, No. 124-126, Stabat 061 8912690 8912721 3. GUNUNG SITOLI KC Jl. Gomo No. 1-3, Gunung Sitoli 0639 21158, 21560, 21038 22128 51032 4. KABANJAHE KC Jl. Veteran No. 100, Kabanjahe 0628 21158, 20420/21, 21361, 21302 22141 51254 1. Brastagi KCP Jl. Pasar Buah Kel. Tambaklau No. 34, Brastagi 0628 91812 91474 5. KISARAN KC Jl. Dr. Wahidin No. 2, Kisaran 0623 41475/76, 42475/6 43335 51289 6. LUBUK PAKAM KC Jl. Negara No. 100, Lubuk Pakam 061 7952033, 7952089, 7951068 4532170 MEDAN ISKAN­­DAR 4553100, 4555324, 4574766, 7. KC Jl. Iskandar Muda No. 18/173, Medan 061 4513733 52144 MUDA 4555404 1. Asia KCP Jl. Asia No. 148, Asia, Medan 061 7369335 7368683 2. Kapten Muslim KCP Jl. Kapten Muslim, No. 8 F, Medan 061 8442091 8442091 3. Sunggal KCP Jl. Sei Batanghari No. 3, Medan 061 8448002

8. MEDAN P. HIJAU KC Jl. Putri Hijau No. 2, Medan 061 4576555, 4526555, 4532373 4532170 51162, 51584 1. Krakatau KCP Jl. G. Krakatau No. 145-146 A, Medan 061 6612067 2. Pulau Brayan KCP Jl. Yos Sudarso No. 630/134, Medan 061 6614391, 6645656 MEDAN SISINGA­ 7881111 (hunting), 7880808, 9. KC Jl. Sisingamangaraja No. 241, Medan 061 7868333 MANGARAJA 818384/5 1. Medan Mall KCP Jl. Pusat Pasar No. 10 A, Medan 061 4516474 4573048 2. Aksara KCP Jl. Arief Rahman Hakim No. 118 B, Medan 061 7332316

10. PADANG ­SIDEMPUAN KC Jl. Jend. Sudirman No. 36, Padang Sidempuan 0634 21122, 21992, 21905 21905 51995 1. Penyabungan KCP Jl. Wilem Iskandar No. 173, Penyabungan 0636 321054 321054 21447, 21048, 23909, 25076, 11. PEMATANG­SIANTAR KC Jl. Merdeka No. 2, Pematang Siantar 0622 23419 51993 29459 Jl. Sisingamangaraja No. 479, Perdagangan, Pematang 1. Perdagangan KCP 0622 96166 96166 Siantar 12. RANTAU PRAPAT KC Jl. Jend. Sudirman No. 1, Rantau Prapat 0624 21441/43, 21029, 24040, 23777 21222 51056 1. Aek Kanopan KCP Jl. Jend. Sudirman, No. 28, Aek Kanopan, Rantauprapat 0624 92319 92319 13. SIBOLGA KC Jl. Brigjend. Katamso No. 3, Sibolga 0631 21592, 21163, 22813 23479 51982

14. SIDIKALANG KC Jl. Sisingamangaraja No. 128, Sidikalang 0627 21854/57, 21086/7, 21782 21782 51093 129. Annual Report 2008 Bank Rakyat Indonesia

Operating Unit (OU) Type of OU Address Area Code Telephone Facimile Telex

92065, 92519, 93200, 94001, 15. TANJUNG BALAI KC Jl. Jend. Sudirman No. 3, Tanjung Balai 0623 92446. 51030 92446 21452, 21313, 21445, 20474, 16. TARUTUNG KC Jl. Sisingamangaraja No. 97, Tarutung 0633 21985 51279 21569 17. TEBING TINGGI KC Jl. Dr. Sutomo No. 24 B, Tebing Tinggi 0621 21182, 21850 22024 51034 Pusat Perniagaan & Perumahan Asia Bisnis Centre, 1. Sei Rempah KCP 0621 442086 442087 Jl. Raya Medan KM. 60, Sei Rempah PADANG KW Jl. Bagindo Azis Chan No. 30, Padang 0751 32204, 31964 s.d. 31970, 32788 31971/74, 25373 56268, 1. BAGANSIAPIAPI KC Jl. Merdeka No. 43, Bagansiapiapi, 28911 0767 21311 21329, 21192, 24011/2 21960 56248 Jl. Jend. Sudirman No. 392 A, Bagan Batu Kab. Rokan 1. Bagan Batu KCP 0765 551897 551901 Hilir, Propinsi 2. BANGKINANG KC Jl. Jend. Sudirman No. 61, Bangkinang 0762 20423, 20042, 20286 21377 56328 Jl. Sudirman No. 38, Ujung Batu, Kel. Ujung Batu, Kec. 1. Ujung Batu KCP 0762 62129/39 62209 Tambun, Kab. Rokan Hulu 71051, 71011, 71380, 73733/4, 3. BATUSANGKAR KC Jl. S. Parman No. 45, Batusangkar 0752 72855 55447 73968 4. BENGKALIS KC Jl. Jend. Sudirman No.18, Bengkalis, 28712 0766 22107, 21087/88 22459 56344 32690, 33317, 21761, 22622, 55298, 5. BUKITTINGGI KC Jl. Jend. A. Yani No. 3, Bukittinggi 0752 34746 627778/9, 34167 55438 Aur Kuning 1. KCP Jl. By Pass Pasar Aur Kuning, Bukittinggi 0752 626007 627580 Bukittinggi 2. Lubuk Basung KCP Jl. Diponegoro Hilir Simpang III, Lubuk Basung 0752 877680/1 877680 6. DUMAI KC Jl. St. Syarif Kasim No. 42, Dumai 0765 33040, 37877, 34777, 35159 35480 55277 7. DURI KC Jl. Jend. Sudirman (depan Ktr Camat Mandau) Duri 0765 94340, 595919, 94340 91160 Jl. Jend. Sudirman No. 48, 8. LUBUK SIKAPING KC 321210, 20436, 20276, 20065 20435 55434 Lubuk Sikaping 0753 Jl. Raya Manggopoh - Simpang Empat, Kabupaten 1. Simpang Empat 0753 65786/7 65785 KCP Pasaman 55226, 9. PADANG KC Jl. Bagindo Aziz Chan No. 30, Padang 0751 30630, 38383 31727 55249 1. Khatib Sulaiman KCP Gd. Kanins Padang, Jl. Khatib Sulaiman No. 50 0751 446308, 445964 446308 10. PADANG PANJANG KC Jl. Jend. Sudirman No. 220, P. Panjang 0752 83257/8/9, 83260/1 83888 55448 11. PAINAN KC Jl. H. No. 30, Painan, Pesisir Selatan 0756 21012, 21212, 21221 21012 55442 12. PARIAMAN KC Jl. Merdeka No. 21, Pariaman 0751 93025/61, 91365, 91465, 93025 91365 55430 92120, 91102, 93934, 92556, 13. PAYAKUMBUH KC Jl. Jend. Sudirman No. 6, Payakumbuh 0752 92145 55439 91987 56214, 14. PEKANBARU KC Jl. Jend. Sudirman No. 316, Pekanbaru 0761 33444, 33643, 31733, 33511 37771 56191 Rukan Akasia, Jl. Akasia 1, Bumi Lago Indah, Blok I/7, 1. Pangkalan Kerinci 0761 95803/4 95083 KCP Komp. PT RAPP, Pangkalan Kerinci 2. Perawang KCP Jl. Raya KM 6 Perawang, Kec Tualang Perawang 0761 91415, 7052744 91044 Jl. Mo. 8-9, 3. Tuanku Tambusai KCP 0761 64799 64788 Pekanbaru 458788, 458778, 458973, 15. P. BATAM KC Jl. Imam Bonjol Blok. A No. 8-9, Batam 0778 456417 459988 Tanjung Balai 1. KCP Jl. Pramuka No. 40, Tanjung Balai Karimun 0777 327420, 327267 327421 Karimun 2. Batam Centre KCP Jl. Engku Putri No. 3, Batam Centre Batam 0778 462368, 462400 462368 Panbil Mall Kuning 3. KCP Jl. Komp. Pertokoan Panbil Mall B 5 Muka Kuning Batam 0778 371372, 371370 371373 Batam 56349, 16. RENGAT KC Jl. M.T. Haryono No.15, Rengat 0769 21090, 21391/94, 21368, 323500 21368 56314 1. Teluk Kuantan KCP Jl. Dipenogoro No. 7, Teluk Kuantan 0760 20473, 20546 20387 17. SELAT PANJANG KC Jl. Diponegoro No. 50 A, Selat Panjang, 28753 0763 31131/36, 31709 33871 56278 Jl. Prof. M. Yamin No. 25 B, 18. SIJUNJUNG KC 20203, 20160, 20033, 20143 20033 55449 Muaro Sijunjung, 25711 0754 130. Annual Report 2008 Bank Rakyat Indonesia

Operating Unit (OU) Type of OU Address Area Code Telephone Facimile Telex

Jl. Raya Lintas Sumatera Simpang IV, Koto Baru, Sijunjung, 1. Koto Baru KCP 0754 71675/76 71670 27581 19. SOLOK KC Jl. Jend. Sudirman No. 1, Solok 0755 21369/70 21360 55441 20. SUNGAI PENUH KC Jl. Jend. Sudirman No. 3, Sungai Penuh, 37111 0748 21917, 323656, 21319/20, 21903 323489 27256 TANJUNG 57140/ 21. KC Jl. No. 29, Tanjung Pinang 0771 27632, 21076/77 21076, 313860 PINANG 41 21128, 21703, 21042, 22286, 22. TEMBILAHAN KC Jl. M. Boya No. 4 A, Tembilahan 0768 21703 56244 21918 PALEMBANG KW Jl. Kapt. A. Rivai No.15, Palembang 0711 313411, 367755 312262 1. ARGA MAKMUR KC Jl. Jend. Sudirman No. 91, Arga Makmur 0737 521007, 521029 521038 27248 1. Muko-muko KCP Kel. Muko-muko, Kab. Muko-muko 0737 71618 71619 2. BANDAR JAYA KC Jl. Proklamator Raya No. 1, Bandar Jaya, Lampung Tengah 0725 25354/6/7, 24354 25660 26377 3. BANGKO KC Jl. Bangko Rendah No. 3, Bangko 0746 21005/8, 322376 21007 27565 1. Sarolangun KCP Jl. Lintas Sumatera, Pasar Atas Sarolangun 0745 91909 91904 320273, 321044, 322145, 4. BATURAJA KC Jl. Akmal No. 116, Baturaja 0735 322150 27546 320007, 322035, 323914/5 Jl. A.K. Gani, Desa Gumawang, Kec. Belitang, Kab. Oku 1. Gumawang KCP 0735 452363 452364 Timur 27577 5. BENGKULU KC Jl. S. Parman No. 120, Bengkulu 0736 22762, 22981, 22919 20087.

1. Raflesia KCP Jl. Semangka No. 45, Panorama, Bengkulu 0736 348688 27533 6. CURUP KC Jl. Merdeka No. 49, Curup 0732 21362/3, 21370 21618 27367 7. JAMBI KC Jl. Dr. No. 42, Jambi 0741 31213/7, 31035 25625 27560 1. Abujani Sipin KCP Jl. Kol. Abujani No. 41, Sipin, Jambi 0741 669830, 669938 669830 321460/61/63, 321212, 8. KAYU AGUNG KC Jl. Let. Marzuki Jahri I/45, Kayu Agung 0712 321005 27391 321461/2 9. KOTA BUMI KC Jl. Jend. Sudirman No. 20, Kotabumi, LU 0724 21335, 21715, 25235 22030 26259 Liwa Lampung Pasar Liwa, Jl. Jend. Sudirman No. 25 A Liwa, Lampung 1. KCP 0726 21600, 21230 21230 Barat Barat 2. Tulang Bawang KCP Jl. Lintas Timur Pasar Unit II, Tulang Bawang 0726 750319, 750399 750738 10. KUALA TUNGKAL KC Jl. K.H. Dewantoro No. 4, Kuala Tungkal 0742 21080, 21326 21778 27242 321772, 321355, 322056, 11. LAHAT KC Jl. Mayor Ruslan I/1, Lahat 0731 23368 27268 323225 12. LUBUK LINGGAU KC Jl. Yos Sudarso No. 92, Lubuk Linggau 0733 323255, 323447, 323256 323315 27595 13. MANNA KC Jl. Jend. Sudirman No. 215, Manna 0739 21176, 21041, 21148 21148 27516 14. KC Jl. Jend. Sudirman No. 50, Metro 0725 42621, 42634/5/7 42636 26258 15. MUARA BULIAN KC Jl. Jend. Sudirman No. 54, M. Bulian 0743 21018, 21320, 21825, 21695 21321 27398 16. MUARA BUNGO KC Jl. Anggrek No.1, Muara Bungo 0747 21019, 21566, 21559 21020 27354 Pasar Sarinah- 1. Jl. Pahlawan Pasar Sarinah Rimbo Bujang, Muara Bungo 0747 431825/6, 431824 421074 Rimbo Bujang KCP 17. MUARA ENIM KC Jl. Jend. Sudirman No. 88, Muara Enim 0734 422020/1, 422640 421074 27269 1. Tanjung Enim KCP Jl. Lintas Tanjung Enim Batu Raja 0734 453764 452369 Jl. Kombes H. Umar No. 126, 18. PAGAR ALAM KC 0730 621451, 622451 621055 27366 Pagar Alam 27201, 19. PALEMBANG RIVAI KC Jl. Kapten A. Rivai No.15, Palembang 0711 367688, 364081 312271 27392 1. Sudirman KCP Jl. Jend. Sudirman No. 12 A, Palembang 0711 376861, 376862 376861 PALEMBANG 20. KC Jl. Letkol Iskandar No. 27, Palembang 0711 379966, 361500, 320423 379967 27371 SRIWIJAYA Jl. R.E. Martadinata, Kel. Sungai Buah, Kec. Ilir Timur II 1. Lemabang KCP 0711 710546 716798 Palembang 2. Veteran KCP Jl. Veteran, Kelurahan 20 Ilir Kec. Ilir Timur I, Palembang 0711 353557 310120 423991, 432780, 431169, 21. PANGKAL PINANG KC Jl. Diponegoro No. 1, Pangkal Pinang 0717 431702 27857 432771/3, 431132 22. PRABUMULIH KC Jl. Jend. Sudirman No. 6, Prabumulih 0713 320334, 320627, 323698 320848 27192 23. PRINGSEWU KC Jl. Jend. Sudirman No. 495, Pringsewu 0729 21132, 22722, 21246/7 21245 26367 131. Annual Report 2008 Bank Rakyat Indonesia

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24. SEKAYU KC Jl. Let. Munandar No. 397, Sekayu 0714 321029, 321091 321632 27390 Jl. Raya Palembang Jambi No. 073 KM. 111, Kel Sungai 1. Sungai Lilin KCP 0714 322730 322171 Lilin Jl. Raya Palembang Betung No. 006, Kelurahan Pangkalan 2. Pangkalan Balai KCP 0711 891091 891698 Balai, Kec. Banyuasin III Kab. Banyuasin 25. SUNGAI LIAT KC Jl. Jend. Sudirman No. 16, Sungai Liat 0717 92026/27/28, 94028 92921 27696 269881, 260000, 264961, 26353, 26. TANJUNG KARANG KC Jl. Raden Intan No. 51, Tanjung Karang 0721 269880, 262994 262927 26180 Jl. Raya Natar Merak Batam No.1380, Natar, Lampung 1. Pasar Natar KCP 92734/5, 406447, 7400320 92735 Selatan 0721 27. TANJUNG PANDAN KC Jl. Merdeka No. 11, Tanjung Pandan 0719 23511, 21013/14, 21674 21560 27570 28. TELUK BETUNG KC Jl. Laks. Malahayati No.78, Teluk Betung 0721 471425, 472222 486058 26176 Jl. Indra Bangsawan No. 150 A, Kel. Urang, Kec. Kalianda, 1. Kalianda KCP 0727 323124 322313 Kab. Lampung Selatan Jl. Jend. Sudirman No. 88, Kel. Enggal Kec. Tanjungkarang 2. Jendral Sudirman KCP 0721 259358 265404 Pusat Bandar Lampung JAKARTA 1 KW Jl. Veteran No. 8, Jakarta Pusat 021 3840802 3453685 61570, 1. JKT CUT MUTIAH KC Jl. Cut Mutiah No.12, Jakarta 021 3143061, 3142752 3106552 61829, 69034 1. BPKP KCP Jl. Pramuka No. 33, Kel. Utan Kayu Utara, Jakarta Timur 021 8564002/3 8199196 2. Cikini KCP Jl. Cikini Raya No. 58 R, Jakarta Pusat 021 3915344 3915343 Plaza Menteng, Jl. HOS. Cokroaminoto No. 079, Jakarta 3. Menteng KCP 021 3151425, 3154910, 3154812 3154812 Pusat Jl. Daan Mogot No. 17, Kel. Duri Kepa, Kec. Kebon Jeruk, 5683660, 56963053, 56963124, 2. JKT DAAN MOGOT KC 021 56962970 Jakarta Barat 11510 56963310, 56963423 3. JKT GN. SAHARI KC Jl. Gunung Sahari Raya No. 18, Jakarta Pusat 021 6006272/4, 6598256 6006280 40117/8 63655, 4. JKT HAYAM WURUK KC Jl. Hayam Wuruk No.108, Jakpus 021 6297280, 6496935 6252217 41542 Jl. Muara Karang Raya No. 31, Blok A-B Utara, Kel Pluit, 1. Muara Baru KCP 021 6614146 6614146 Kec Penjaringan, Jak Utara Ruko Jl. Pesanggrahan No. 2A, Kel Meruya Utara, Kec 2. Pesanggrahan KCP 021 58906231, 58905250 58905249 Kembangan, Jakarta Barat Komp. Perum Taman Palem Lestari Blok C 1, No. 39, 3. Taman Palem KCP 021 55956548, 55963704 55963564 Jakarta Barat 5. JKT JATINEGARA KC Jl. Raya Jatinegara Timur IV/ 448 021 8506400, 8516471 8500646 48115 Jl. Pahlawan Revolusi No. 4, Kel Klender, Kec Duren Sawit, 1. Klender KCP 021 86612405, 86612414 8600405 Jakarta Timur Jl. Panjang RT. 13/RW. 01, Kel. Kebon Jeruk, Kec. Kebon 6. JKT KEBON JERUK KC 021 5356368 5301640 Jeruk, Jakarta Barat Jl. Raya Boulevard Barat Blok LC 6 7. JKT KELAPA GADING KC Kav 69 - 70, Kel. Kelapa Gading Barat, 021 4507656, 4507911 4507654 Kec. Kelapa Gading Jak-Ut Gd. Lt. 1, Jl. Angkasa No. 18 Kemayoran, Jakarta 8. JKT KEMAYORAN KC 021 4212903/4/5/6/8, 4212911, 4212913 49628 Pusat Graha Cempaka Mas I Blok E.1/24, Jl. Letjen. Suprapto, 1. Cempaka Mas KCP 021 4255328, 42803024 4255277 Jakarta Jl. Danau Sunter Blok M. Kav 33, 2. Sunter KCP 021 70768011 65837007 Sunter Agung, Tj Priok, Jakarta 14350 9. JKT KOTA KC Jl. Kopi No. 54, Jakarta 021 6918281, 6927385, 6928659 6924658 42852 Komp. Pertokoan Glodok Plaza No. B-18 Jl. Pinangsia 1. Glodok KCP 021 6248037, 6248038 6248036 Raya, Jakarta 11110 2. Teluk Gong KCP Ruko Duta Indah SQ Blok B/1, Teluk Gong 021 66698264/5 66698269 3. Tubagus Angke KCP Komp. Duta Blok E 1/12, Jakarta Barat 021 56944495, 56944509 5694457 10. JKT KRAMAT KC Jl. Kramat Raya No.138, Jakpus 021 3100152/3/4/5, 3904609/11 3100156 61890 Jl. Dr. Saharjo No. 92, Kel. Menteng Atas, Kec. Setiabudi, 1. Manggarai KCP 021 8370337 83703622 Jakarta Selatan Jl. Pramuka Raya No. 12, Kel. Palmeriam, Kec. Matraman, 2. Pramuka KCP 021 8517931 8517948 Jakarta Timur 132. Annual Report 2008 Bank Rakyat Indonesia

Operating Unit (OU) Type of OU Address Area Code Telephone Facimile Telex

Sunan Giri Jl. Balai Pustaka No. 53, Rawamangun, Jakarta Timur 3. 021 47860123 47862345 Rawamangun KCP 13221 11. JKT KREKOT KC Jl. No. 44, Jakarta Pusat 021 2311873, 2311976, 2314174 3812876 44547 Gd. Mall Mangga Dua Kav. 23-24, Jl. Arteri Mangga Dua 6013623, 6127945, 6255641, 12. JKT MANGGA DUA KC 021 6013624 41259 Raya 6127944 2801328, 2800991, 13. JKT OTISTA KC Jl. Otto Iskandardinata No. 72, Jakarta Timur 021 2800718 48229 2800717/19/20, 2800096 1. Pondok Kelapa KCP Jl. Pondok Kelapa Raya Blok F.I No.4A, Jakarta Timur 021 86903931, 86903235 86902926 2. Tebet KCP Jl. Tebet Barat IX No. 35-B, Tebet, Jakarta 12810 021 83705544 83705545 Jl. Jatiwaringin No. 20 Rt. 005/ 05 Cip.Melayu, Jakarta 3. Pangkalan Jati KCP 021 86613897 86613898 Timur Pasar Grosir 4. KCP Jl. Mayjend. Sutoyo No. 76 021 30016917/ 18/ 20 30016919 Cililitan Gd. Wisma Bakrie 2, Lantai Dasar, 14. JKT KC 021 57942119/ 21 57942122 Jl. H.R. Rasuna Said, Kav. B-2, Jakarta Selatan 15. JKT RAWAMANGUN KC Jl. Pemuda Kav. 78 A-B, Rawamangun, Jakarta Timur 021 4714719, 4714559 4714601 Pusat Niaga Roxi Mas Blok B1 No. 1-2, Jl. KH.Hasyim 16. JKT ROXI KC 021 63855121, 6329986/ 82 6329982 67200 Ashari, Jakarta Pusat Mall Taman Mall Taman Anggrek Ground Floor G. 31 (Banking Centre) 1. KCP 021 5639581/ 2/ 3 5639581 Anggrek Jl. Letjen S. Parman Kav. 21 Jakarta 2. Kebon Jeruk KCP Wisma Relasi, Jl. Panjang No. 333, Jakarta Barat 021 5481433, 5481320 5332487 Universitas 3. KCP Jl. Tanjung Duren Utara No 1, Grogol, Jakarta Barat 021 5961585/6 56961587 Tarumanegara Pusat Perdagangan Anugrah Ciledug Blok D No. 32, Jl. 4. Ciledug KCP 021 73440663 73440713 H.O.S. Cokroaminoto, Sudimara Barat Ciledug Tangerang Jl. KH. Mas Mansyur No. 120 C, Kel. Sereal, Kec. Tambora, 5. Jembatan Lima 021 63866641 63866641 KCP Jakarta Barat Jl. Senen Raya No. 135, Blok C II 9-12 Segitiga Senen, 17. JKT SGT SENEN KC 021 3507966/7 3852328 66149 Jakarta Pusat Jl. Klp Gading Boulevard Blok TA 2/34, 1. Kelapa Gading KCP 021 4523476 4516478 Kel. Klp. Gading, Kec. Koja, Jak-Ut 14240 Gedung Arthaloka, Jl. Jend Sudirman Kav 7, Jakarta Pusat 18. JKT SUDIRMAN 1 KC 021 57933251 57933253 10220 46262, 19. JKT TNH ABANG KC Jl. Tanah Abang III/ 4, Jakarta Pusat 021 3454529 3840522 35262 Markas Besar 1. KCP Jl. Veteran No. 4, Jakarta 021 3519652 3811321 TNI-AD 2. Asshidiqiyah KCP Jl. Arteri Kebon Jeruk, Kedoya, Jakarta 021 5813591 5813592 Jl. K.H. Fachrudin No. 36, Blok B No. 2 Pertokoan Tn. 3. Tanah Abang KCP 021 39840050 2305331 Abang Blok A/21, Jakarta Pusat Jl. Caringin No. 68, Kel. Cideng, Kec. Gambir, Jakarta 4. Tomang KCP 021 63859842, 63859843 Pusat Jl. Kemanggisan Raya No. 19/6 C, Kel. Kemanggisan, Kec. 5. Slipi KCP 021 53690977/8/9 53690979 Palmerah, Jakarta Barat 64138, 20. JKT TJ. PRIOK KC Jl. Yos Sudarso No. 1 Tj. Priok, Jakarta Utara 021 4300381, 419875, 4300161 43937634 64148 Kantor Administrator Pel. Tanjung Priok Lt.1, Jl. Palmas 1. Adpel Tj.Priok KCP 021 43908446, 43908559 43908447 No.1, Jakarta Utara Jl. Raya Hamengkubuwono No. 30, Penggilingan Cakung, 2. Penggilingan KCP 021 4605628/9 4605659 Jakarta Timur 3843553, 3847739, 3453689/98, 21. JKT VETERAN KC Jl. Veteran No. 8, Jakarta Pusat 021 3842840 45205 3840802, 3858254/55, 3757255 1. RSPAD KCP Jl. Abdurachman Saleh, Jakarta 021 3841731, 3524665 3519851 Departemen 2. KCP Gedung B Jl. Dr. Wahidin No. 1, Jakarta 021 3519806, 3452334, 3504991 3452334 Keuangan 3507094/ 3. Pertamina KCP Jl. Perwira II No 2 - 4, Jakarta Pusat 10110 021 3506709, 3500438 95 4. Lemhannas KCP Jl. Medan Merdeka Selatan No. 10, Jak-Pus 10110 021 3519809 3500437 133. Annual Report 2008 Bank Rakyat Indonesia

Operating Unit (OU) Type of OU Address Area Code Telephone Facimile Telex

22. KETAPANG KC Jl. Jend. A. Yani No.12, Ketapang, Kalimantan Barat 0534 32091/92, 31195. 32170 29380 23. MEMPAWAH KC Jl. G.M. Taufik No. 29 Mempawah, Kalbar 78912 0561 691067, 691306, 691072 691140 29320 734009, 760945, 780876, 24. PONTIANAK KC Jl. Barito No. 2, Pontianak, Kalimantan Barat 0561 733019 29167 742775, 741616 Komplek Pertokoan Pasar Flamboyan, Jl. Gajah Mada Blok 1. Gajah Mada KCP 0561 734711 733145 259, Pontianak 25. PUTUSSIBAU KC Jl. D.I. Panjaitan No. 4, Putussibau, Kalimantan Barat 0567 21436, 21020 21592 29351 26. SANGGAU KC Jl. Jend. Sudirman No. 59, Sanggau Kalimantan Barat 0564 21123, 21502, 22122. 21215, 29342 27. SINGKAWANG KC Jl. P. Diponegoro No. 23, Singkawang, Kalimantan Barat 0562 631653, 631654, 634477 633336 29205 Komplek Pertokoan Jl. Jerenden AR, Ds. Bumi Emas, 1. Bengkayang KCP 0562 441459 441054 Bengkayang 2. Pemangkat KCP Jl. Moh. Hambal No. 82, Pemangkat 0562 243776 243775 29331, 28. SINTANG KC Jl. Adi Sucipto No. 1, Sintang, Kalimantan Barat 0565 21506, 21504, 21949 22409 29443 BANDUNG KW Jl. Asia-Afrika No. 57-59, Bandung 022 4200356 (Hunting) 432038 4200348 BANDUNG AHMAD Jl. A. Yani No. 276, Kel. Kacapiring, Kec. Batununggal, 1. KC 022 7270277 7270421 YANI Bandung BANDUNG ASIA- 4200350/2, 4200360, 4206356, 24141, 2. KC Jl. Asia-Afrika No. 57-59, Bandung 022 439142 AFRIKA 4200352 24143 1. Metro Trade Center KCP Jl. Soekarno-Hatta Blok F No. 12, Bandung 022 70633500 7536379 2. Rajawali KCP Jl. Rajawali No. 95, Bandung 022 6047038 6046595 BANDUNG A.H. 3. KC Jl. Ujung Berung No. 140, Bandung 022 7800048, 7803140/1 7803948 28936 NASUTION 28177, BANDUNG DEWI 4. KC Jl. No.1-3, Bandung 022 4203666, 4207335, 4215324/5 4232486 28680, SARTIKA 28817 ITC 1. KCP ITC Kebon Kelapa, Jl. Pungkur, Bandung 022 5234267/ 8 5234268 Kebon Kelapa 2. Pasar Baru KCP Jl. Otto Iskandardinata No. 77, Bandung 022 4263419, 4209480 4263620 Pasar Induk Caringin Blok A.1 No. 35, 3. Pasar Caringin KCP 022 5430777 5430791 Jl. Soekarno-Hatta, Bandung 4231564, 4264330, 4240240, 5. BANDUNG NARIPAN KC Jl. Naripan No. 93, Bandung 022 4236417 28848 4231532, 4215066 Kampus ITB, 1. ITB KCP 022 2508531, 2508486, 2508544 Jl. Dayang Sumbi No. 7, Bandung 2. Pasir Kaliki KCP Jl. Pasir Kaliki No. 150, Bandung 022 4239960 4208523 3. Setra Sari KCP Jl. Surya Sumantri No. 34 A, Bandung 022 2020896, 2016222 2016222 Simpang Buah 4. KCP Jl. Buah Batu No. 162, Bandung 022 7323107/ 7307665 7323107 Batu 6. BANJAR KC Jl. Ciamis No. 1, Banjar 0366 741811/2/3 741810 28936 1. Pangandaran KCP Jl. Merdeka No. 202, Pangandaran 0265 630036, 630147 630036 771073, 772469, 772825, 7. CIAMIS KC Jl. Ir. H. Juanda No. 166, Ciamis 0265 771219 28853 774450 261237, 263843, 261174, 8. CIANJUR KC Jl. Adi Sucipto No. 8, Cianjur 0263 265542 28752 262210 1 Cipanas KCP Jl. Raya Cipanas No. 34, Pacet, Cianjur 0263 511031 511506 9. CIBADAK KC Jl. Siliwangi No. 93 A, Cibadak 0266 531106, 531376, 531810 533345 28028 1. Pelabuhan Ratu KCP Jl. Pramuka No. 95, Ds. Pelabuhan Ratu, Kab. Sukabumi 0266 433625/6 432100 10. CIMAHI KC Jl. Raya Cimahi No. 598, Cimahi 022 6654579, 6651728 6652724 28757 1. Soreang KCP Jl. Raya Soreang No. 48, Soreang 022 5897460, 5897461, 5892939 Jl. Raya Padalarang No. 50 B, RT. 004/13, Ds. Kertajaya, 2. Padalarang KCP 022 6808032, 6808230 6808032 Kab. Bandung 11. CIREBON KC Jl. R.A. No. 85, Cirebon 0231 202085, 204285 208470 28590 Jl. Raya Plered No. 84 A, Kec. Weru, 1. Weru KCP 0231 322715 322716 Kab. Cirebon 12. GARUT KC Jl. Jend. A. Yani No. 65, Garut 0262 232318, 235393 232013 28124 134. Annual Report 2008 Bank Rakyat Indonesia

Operating Unit (OU) Type of OU Address Area Code Telephone Facimile Telex

13. INDRAMAYU KC Jl. D.I. Panjaitan No.227/C, Indramayu 0234 271364, 271397, 272322 28724 1. Patrol KCP Jl. Raya Patrol, Kec. Sukra, Kab. Indramayu 0234 611864 611864 351062, 351470, 351270, 14. JATIBARANG KC Jl. Siliwangi No. 3, Jatibarang 0234 351550, 354406 28705 351550 871449, 871264, 871125, 15. KUNINGAN KC Jl. No. 6, Kuningan 0232 871126 28728 875977 5950211, 5951747, 5950425, 16. MAJALAYA KC Jl. Raya Laswi No. 258, Majalaya 022 5953730 28655 5951946 1. Banjaran KCP Jl. Raya Banjaran No. 202, Majalaya 022 5940335 5940335 2. Rancaekek KCP Jl. Raya Dangdeur Timur No. 105, Rancaekek, Majalaya 022 7793370 7793370 281307, 281207, 281479, 17. MAJALENGKA KC Jl. KH. Abdul Halim No. 286, Majalengka 0233 282279 28729 283891, 283718 1. Abdul Fatah KH KCP Jl. KH. Abdul Fatah No. 59, Cikijing, Kab Majalengka 0233 318431 318432 18. PAMANUKAN KC Jl. Ian Marta Sasmita No. 52, Pamanukan 0260 551348/9, 553567, 551223 550480 28077 19. PURWAKARTA KC Jl. Kol. Kornel Singawinata No. 68, Purwakarta 0264 200120/1, 200186 206535 45746 545821, 545332, 545609, 20. SINGAPARNA KC Jl. Raya Timur No. 6, Singaparna 0265 545820 28107 544666 21. SUBANG KC Jl. Otto Iskandardinata No. 87, Subang 0260 413141/2, 413228/9, 420264/5 413230 28737 2040024, 222433, 222087, 22. SUKABUMI KC Jl. A. Yani No. 38, Sukabumi 223830 28149 0266 223734 201556, 201223, 201263, 23. SUMEDANG KC Jl. Prabu Geusan Ulun No. 10, Sumedang 201884 28713 0261 207401

1. UNPAD Jatinangor KCP Jl. Raya Jatinangor No. 148, Ds. Cikeruh, Jatinangor 022 7791202 7791202 24. TASIKMALAYA KC Jl. R. Ikik Wiradikarta No. 7, Tasikmalaya, 0265 330619, 334717, 334446 28123 8440728, 8440729, 8440730, 8447315, SEMARANG KW Jl. Teuku Umar No. 24, Semarang 024 84418146 8318463 1. BATANG KC Jl. Diponegoro No. 1, Batang 0285 391047, 391516, 391532 392214 22521 531210, 531944, 533186, 2. BLORA KC Jl. Pemuda No. 2, Blora 0296 31017 22385 531614 3. BREBES KC Jl. Dr. Wachidin No. 1, Brebes 0283 671760/ 1, 672661 672664 52212 1. Jatibarang KCP Jl. Raya Jatibarang, Ds. Jatibarang Lor, Kab. Brebes 0283 6183226 6183226 4. BUMIAYU KC Jl. Raya Utara No. 77, Bumiayu 0289 432250/1/2, 4324425 432025 22855 5. CEPU KC Jl. P. Diponegoro III/2, Cepu 0296 421363, 421160/61, 421505 423410 22188 6. DEMAK KC Jl. Patah No. 676, Demak 0291 685900/1/3, 86393 685105 22365 Gd. PKPRI (PKPN) 7. JEPARA KC 0291 591026, 591404, 593969 591505 22367 Jl. Pemuda No. 101, Jepara 1. Bangsri KCP Jl. Raya Bangsri, Jepara 0291 772092 772092 8. KENDAL KC Jl. Raya No. 222, Kendal 0294 381100, 381764/65/66, 384124 381767 22474 1. Weleri KCP Jl. Utama Tengah No. 194, Weleri, Kendal 0294 642588 642588 9. KUDUS KC Jl. Jend Sudirman No. 66, Kudus 0291 432060 432086 431868 436268 22453 22114, 10. PATI KC Jl. P. Sudirman No. 154, Pati 0295 381949, 381851 381676 22680 Jl. P. Sudirman, 1. Juwana KCP 0295 474466 474466 Pertokoan Plaza Juwana, No. 3 11. PEKALONGAN KC Jl. W.R. Supratman No. 6, Pekalongan 0285 421041, 434902 424318 22473 1. Wiradesa KCP Jl. Raya Wiradesa No.112, Wiradesa, Pekalongan 0285 4417254, 4417443 4417252 Jl. Raya Kedung Wuni No. 125-126, 2. Kedung Wuni KCP 0285 785900 785900 Kedungwuni, Pekalongan

12. PEMALANG KC Jl. Jend. Sudirman Timur No. 36, Pemalang 0284 321016, 321646, 321428 321397 22556 424913/14, 424112, 421848, 13. PURWODADI KC Jl. K.S. Tubun No. 1, Purwodadi 0292 421241 22302 424912 14. REMBANG KC Jl. P. Diponegoro No. 103, Rembang 0295 691133, 691622, 692373 691853 22447 1. Lasem KCP Jl. Raya Lasem No. 124, Lasem 0295 531234 531234 326890, 326356, 327230, 15. SALATIGA KC Jl. P. Diponegoro No. 9, Salatiga 0298 323640 22553 323876 135. Annual Report 2008 Bank Rakyat Indonesia

Operating Unit (OU) Type of OU Address Area Code Telephone Facimile Telex

16. SEMARANG KC Jl. Pandanaran No. 75, Semarang 8412418, 8411918, 8414349 8413367, 22114, 024 PANDANARAN 8450459 22680 1. Karangayu KCP Jl. Jend. Sudirman No. 174, Semarang 024 7604065 7604065 2. Kranggan KCP Jl. Gang Pinggir No. 36 A, Semarang 024 3563272 3584830 3. Mojopahit KCP Jl. Mojopahit No. 382, Semarang 024 6708939 6708939 4. Tlogosari KCP Jl. Tlogosari Raya 1 No. 68 Blok B 1, Semarang 024 76744280 7644215 22113, SEMARANG KC Jl. No. 2-4, Semarang 024 3585441, 3545017 3546115 22242, 17. PATTIMURA 22861 1. A. Yani KCP Jl. Jend. A. Yani No. 169, Semarang 024 8416790 8416790 Pertokoan Metro Plaza Blok A.7, Jl. MT. Haryono 970, 2. Metro Plaza KCP 024 8313571 8417853 Semarang 3. Piere Tendean KCP Jl. Kapten Piere Tendean No. 25, Semarang 024 3510876 3510876 4. Watugong KCP Komp. Kodam IV Diponegoro, Watugong, Semarang 024 7460460 7460460 18. TEGAL KC Jl. Pancasila No. 42, Tegal 0283 358912/3/4/5 356302 22462 Jl. Raya Banjaran, Ds. Banjaran, 1. Adiwerna KCP 0283 444872, 445728 444872 Kec. Adiwerna, Tegal 2. Slawi KCP Jl. Dr. Sutomo No. 3, Ds. Slawi Wetan 0283 492494 492494 6924475, 6921075, 6921675, 19. UNGARAN KC Jl. Jend. Gatot Subroto No. 75, Ungaran 024 921104 22562 6923303 1. Ambarawa KCP Jl. Sudirman No. 150, Ambarawa 0298 591150, 592715 592715 YOGYAKARTA KW Jl. Cik Ditiro No. 3, Yogyakarta 0274 561403, 520270 514166 1. AJIBARANG KC Jl. Raya Ajibarang Wetan No.1, Ajibarang 0281 571543/4, 5725448/9 571544 2. BANJARNEGARA KC Jl. Pemuda No. 70, Banjarnegara 0282 591024 591585, 591104 591639 25309 3. BANTUL KC Jl. Jend. Sudirman No. 3, Bantul 0274 367312, 367433, 367044 367122 25441 321067, 325058, 321120, 4. BOYOLALI KC Jl. Pandanaran No. 154, Boyolali 0276 21414 25386 321413 5. CILACAP KC Jl. Jend. A. Yani No. 29, Cilacap 0282 533422, 533015, 534068 533215 25422 1. Kroya KCP Jl. Jend. Sudirman, No. 60, Kroya. 0282 492100, 492101 494214 6. GOMBONG KC Jl. Yos Sudarso No. 208, Gombong 0287 471162/ 3, 471087 471539 25493 7. KARANG ANYAR KC Jl. Lawu Barat No. 391, Karanganyar 0271 495383, 495388 494275 25301 1. Palur KCP Jl. Raya Solo, Sragen 0271 827571, 825565 494275 8. KEBUMEN KC Jl. Pahlawan No. 114, Kebumen 31247 0287 381005, 381247 381555 25391 321859, 322330, 321824, 9. KLATEN KC Jl. Pemuda Selatan No. 67, Klaten 0272 321425 25213 325655, 322738 1. Pedan KCP Jl. Raya Pedan No. 4, Kec. Pedan, Kab. Klaten 0272 897986, 897467 897467 642177, 641369, 641035, 10. KUTOARJO KC Jl. Mayjend. S. Parman, No. 107, Kutoarjo 0275 641044 25355 641138, 641646 11. MAGELANG KC Jl. Ikhlas No. 1, Magelang 0293 365161, 364060, 365277 365269 22153 Komp. Pertokoan Shopping Center Ruko No. 1-2, 1. Shopping Centre KCP 0293 361035, 310158 361035 Magelang 12. MAJENANG KC Jl. Diponegoro No. 318, Majenang 0280 621069, 621360, 621145 621496 25637 1. Sidareja KCP Jl. Jend. Sudirman No. 171, Sidareja 0280 524162 523316 13. MUNTILAN KC Jl. Pemuda No. 6, Muntilan 0293 587096, 587380, 586097 587444 22853 596086, 596011, 597345, 14. PARAKAN KC Jl. Kosasih No. 15 Parakan 0293 596086 22759 596455 891577, 891054, 891395, 15. PURBALINGGA KC Jl. Jend. Sudirman No. 214 A, Purbalingga 0281 891892 25307 895341, 891892 16. PURWOKERTO KC Jl. Jend. Sudirman No. 57, Purwokerto 0281 640985, 631813/14/15 631819 25330 24. WATES KC Jl. Kol. Sugiyono No. 2, Wates 0274 773146, 773340, 774333 773671 25219 25. WONOGIRI KC Jl. Kabupaten No. 1, Wonogiri 0273 321044, 323473, 321287 321496 25270 391703, 391472, 391119, 26. WONOSARI KC Jl. Pramuka No. 6, Pandansari, Wonosari, Gunung Kidul 392045 25236 0274 394193 321190, 321025, 321738/9, 27. WONOSOBO KC Jl. Jend. A. Yani No. 1, Wonosobo 0286 322258 22394 321702 136. Annual Report 2008 Bank Rakyat Indonesia

Operating Unit (OU) Type of OU Address Area Code Telephone Facimile Telex

YOGYA 520261/2, 520581, 561935, 25121, 28. KC Jl. Cik Ditiro No. 3, Yogyakarta 0274 CIK DITIRO 563439 512110 25618 1. Bethesda KCP Jl. Jend. Sudirman No. 70, Yogyakarta 0274 520136 2. Seturan Plaza KCP Jl. Raya Seturan, Caturnunggal, Depok 0274 4332615, 4332688 4332688 25185, 29. YOGYA KATAMSO KC Jl. Brigjend. Katamso No. 13-15, Yogyakarta 0274 372724/6/8/9 387949 25365 Gedung Mulia Lt. 2, 52920586, JAKARTA 2 KW 021 52920581, 52920585 Jl. Gatot Subroto, Kav. 9-11 52920587 1. BEKASI KC Jl. Ir. Juanda No. 93, Bekasi 021 8802820, 88349008 8800971 46973 1. Cikarang KCP Cikarang Plaza Blok B No. 10, Cikarang, Bekasi 021 89110462 89110463 Jl. Raya Cikarang-Cibarusah No. 39 B, Ds. Sukaresmi, 2. Cikarang Selatan KCP 021 89677087/89 89677087 Kec. Cikarang Selatan, Kab. Bekasi Komp. Pondok Gede Plaza Blok A 20, Pondok Gede, 3. Pondok Gede KCP 021 849933566 8471488 Bekasi 4. RS ANANDA KCP Jl. Sultan Agung No. 173, Kel. Medan Satria, Kodya Bekasi 021 88861041 88855108 Sentral Niaga Komp. Ruko Sentral Kalimalang 5. KCP 021 88850371 88850370 Kalimalang Blok A 2, No. 3, Jl. A.Yani, Bekasi Ruko Kalimas Blok B 1, Jl. Chairil Anwar, Kel. Margahayu, 6. Tambun KCP 021 88342908 88359638 Kec. Bekasi Timur, Bekasi 48424, 2. BOGOR KC Jl. Dewi Sartika No. 6, Bogor 0251 313137 320043 67049 Cibinong Mayor Perum. Taman Rezeki, Jl. Mayor Oking Jayaatmaja, Kel. 1. KCP 021 87914147 87914185 Oking Ciriung, Kec. Cibinong 2. IPB Dermaga KCP Kampus Institut Pertanian Bogor, Dermaga, Bogor 0251 391393 423046 3. Parung KCP Jl. Raya Parung, Desa Parung, Kec. Parung, Kab. Bogor 0251 8610154 8610194 4. Suryakencana KCP Jl. Suryakencana No. 312, Sukasari, Bogor 0251 321851/8 321856 5. Tajur KCP Jl. Raya Tajur No. 49, Bogor 0251 337578 338822 Jl. Raya Padjajaran No. 95 A, RT.02/RW.06, Kel. 3 . BOGOR PADJAJARAN KC 0251 334568 334568 Padjajaran, Kec. Bogor Utara, Bogor 1. Batu Tulis KCP Jl. Raya Pahlawan No. 80/152, Bandongan, Bogor Selatan 0251 8326685 BUMI SERPONG Jl. Pahlawan Seribu, Ruko Golden Boulevard Blok Q 6-7, 4. KC 021 5376571, 53161402/4/5 5376570 DAMAI BSD Tangerang 1. ITC KCP Ruko ITC BSD No. 57, Jl. Pahlawan Seribu 021 53161564 53161563 2. Gading KCP Serpong No. 30, Tangerang 021 54212198 54212198 Serpong 3. Pamulang KCP Pamulang, Kab. Tangerang, 021 7408079 7499888 4. Serpong KCP Ruko Sentra Niaga III E No. 6, Tangerang 021 53123419 53122978 Jl. Trans Yogi - Jl. Alternatif Cibubur, Kranggan Permai Blok 5.. CIBUBUR KC 021 8446653/54 845832 16 No. 19-20, Kel. Jatikarya, Kec. Jatisampurna, Bekasi 1. Cileungsi KCP Komp. Griya Kenari Mas, Blok B/ II, No. 2-3 021 8230614 8230614 2. Gunung Putri KCP Jl. Raya Wanaherang No. 6 021 8670145 8670145 316069, 316085, 312200, 6. CIKAMPEK KC Jl. Jend. A. Yani No. 16, Cikampek 0264 316743 44798 319273 Ruko Cikarang Comersial Center, Jl. Raya Cikarang, 7 . CIKARANG KC 021 89835728, 8935349, 89835728 8934544 Cibarusah KM. 40, Cikarang, Bekasi 17550 8. CILEGON KC Jl. S.A. Tirtayasa No. 5, Cilegon 0254 391393/2, 391351 802666, 9. CIPUTAT KC Jl. Ir. H. Juanda No. 88, Ciputat, Jaksel 021 7403188, 7427806 7427737 10. DEPOK KC Jl. Margonda Raya No. 21 A, Depok 021 7752341/42 77212720 Jl. Raya Margonda No. 341 B, Kel. Kemirimuka, Kec. Beji, 1. Margonda KCP 021 7870338 78884575 Depok 11. JKT KC Jl. RS. Fatmawati No. 37, Jakarta Selatan 021 7694430, 7503980/81 7695239 1. Cinere KCP Jl. Cinere Raya No. 19 B, Cinere 021 7540856, 7540845, 7536209 7540841 Komp. Pertokoan Duta Mas Blok B. 2 2. Duta Mas KCP 021 72793825/6 72793815 No. 6, Jl. Raya Fatmawati, Jakarta Komp. Ruko III Citra Grand No. 19, 3. Kranggan KCP Jl. Raya Alternatif Cibubur, 021 843000017 84300016 Kel. Jatikarya, Kec. Jatisampurna Bekasi 4. RSU Fatmawati KCP Jl. RS. Fatmawati Cilandak, Jakarta Selatan 021 7694430, 7503979/80 7695239 137. Annual Report 2008 Bank Rakyat Indonesia

Operating Unit (OU) Type of OU Address Area Code Telephone Facimile Telex

5204431, 5204466, 5204417, 60553 12. JKT GT. SUBROTO KC Jl. Gatot Subroto Kav. 52, Jakarta Selatan 021 5204433 520444, 5204414 /54 Telkom Gatot Jl. Jend. Gatot Subroto Kav. 52, 1. KCP 021 52731746/47 5273175 Subroto Jakarta Selatan 2. Gedung BEJ KCP JSX Building Tower, Jl. Jend. Sudirman Kav. 52-53, Jakarta 021 5152791 5152790 13. JKT KEB. BARU KC Jl. Hasanuddin No. 62, Blok M, Jakarta 021 7201053/4, 7201054/5 7201056 47180 Jl. Ampera Raya No. 8, Kel. Pejaten Barat, Kec. Ps. 1. Ampera KCP 021 71792504 7192410 Minggu, Jakarta Selatan Jl. Sultan Iskandar Muda/Arteri Pondok Indah Kav. No. 3, 14. JKT PD. INDAH KC Keb. Lama, 021 7294070/ 71/ 72/ 73, 7294069, 7294066 47691 Jakarta Selatan Komp. Ruko Plaza Bintaro Jaya, Sektor 3 No. D 41, 1. Bintaro KCP 021 7375169, 7375857 7375856 Jakarta Jl. Ciledug Raya No. 15, Cipulir, Kel. Ulujami, Kec. 2. Cipulir KCP 021 58904160, 68196654 7206362 Kebayoran Lama, Jakarta Selatan Jl. Cirendeu Raya, Ruko Cirendeu Griya Permai No. 7, 3. Cirendeu KCP 021 7493285, 7495529 74710406 Jakarta Grand ITC Permata Hijau, Jl. Arteri Permata Hijau, Type 4. Permata Hijau KCP Emerald No. 31, Grogol Utara, Kebayoran Lama, Jakarta 021 53664223 53664234 12210 Pd. Indah Mall 2, Lt. Dasar No. G 33 B, Jl. Raya Metro Pd. 5. Pondok Indah Mall KCP 021 75921054/5 75921053 Indah, Jakarta Selatan 15. JKT PASAR MINGGU KC Jl. Ragunan Raya No. 39, Pasar Minggu 021 78833026, 78839888 7805452 66189 1. Kampus UI KCP Kampus UI Depok Fak. Psikologi 021 70241012, 70300536 70300536 Jl. Mampang Prapatan No. 8, 7982480, 16. JKT WARUNG­BUNCIT KC 021 7982411, 7983911, 79195844 66052 Jakarta Selatan 7983911 1. Cijantung KCP Jl. Raya Bogor KM. 23 No. 1, Pasar Rebo, Jakarta Timur 021 87795861 87795861 Jl. Cikajang No. 3 Blok. Q/ IV, RT. 001/ 05, Keb. Baru, 2. Cikajang KCP 021 7252125 7392467 Jakarta Selatan Jl. Raya Joglo, Ruko Puri Botanical H 7 No. 1-2, Jakarta 17. JOGLO KC 021 58907163 58906368 Barat 18. KARAWANG KC Jl. Tuparev No. 27, Karawang 0267 402333, 415315 415228, 415138 44740 Jl. Blok Kraton RT. 02/ 06, Rengas dengklok, Kec. 0267 484841/2 484843 1. Rengas­dengklok KCP Rengasdengklok, Karawang 19. LABUAN KC Jl. Jend. Sudirman No. 156, Labuan, Pandeglang, Banten 0253 81213/4, 82800, 81761 82666 Jl. Gatot Subroto No. 62, Kel. Menteng Dalam, Kec. Tebet, 20. PANCORAN KC 021 83785557/8 83785562 Jakarta Selatan 21. PANDEGLANG KC Jl. Bhayangkara No. 1, Pandeglang 0253 201047, 201971, 204958 203501 45885 Plaza Pondok Gede Ruko Blok C No. 23-25, Jl. Raya 22. PONDOK GEDE KC 021 84938476/7/8 84948480 Pondok Gede, Bekasi Komp. Ruko Taman Galaxy Indah Blok H No. 1, Kodya 1. Galaxy KCP 021 82404134 82404331 Bekasi 2. Jatibening KCP Jl. Caman Raya No. 17 H, Jatibening, Bekasi 021 84976959 84993668 23. RANGKAS­BITUNG KC Jl. Ika Jatmika No. 7, Rangkasbitung 0252 201012, 201683, 204063 204112 45887 24. SERANG KC Jl. P. Diponegoro No. 3, Serang 0254 210025/26 200133 48294 25. TANGERANG KC Jl. Jend. A. Yani No. 4, Tangerang 021 5520789, 5524357, 5515914 5524356 43548 Komp. Pertokoan Pintu Tol Balaraja Barat, Kamp. Telaga 1. Balaraja KCP 021 5952545, 5282558 5952577 Sari RT. 05/2, Balaraja, Tangerang 15612 2. Bandara S. Hatta KCP Angkasa Pura, Gd. 600 021 55910938 55910938 Ruko, Jl. Imam Bonjol No. 42, Karawaci, Kawasan Lipo 55791051 3. Karawaci KCP 021 55791051 Karawaci, Tangerang 4. Tangerang Ruko M. Toha Blok B No. 34, Jl. Raya M. Toha, Tangerang KCP 021 5518306 55791097 Pasar Baru (Jl. Raya Mauk Tangerang) 5324033, SURABAYA KW Plaza BRI lt.20, Jl. Basuki Rachmad 122-138, Surabaya 031 5324230 5324044 3095049, 3095520, 3095273, 1. BANGKALAN KC Jl. Let. Singosastro No. 1, Bangkalan, Madura 031 3097123 31533 3099088 138. Annual Report 2008 Bank Rakyat Indonesia

Operating Unit (OU) Type of OU Address Area Code Telephone Facimile Telex

424888, 412700, 421444, 2. BANYUWANGI KC Jl. Jend. A. Yani No. 12, Banyuwangi 0333 424616 31887 427069 1. Genteng KCP Komp. Ruko Pasar Genteng Blok C, Banyuwangi 0333 846351, 847955 636401 2. Rogojampi KCP Jl. Raya Rogojampi No. 123, Rogojampi, Banyuwangi 0333 636400 636401 3. Muncar KCP Kec. Muncar, Kab. Banyuwangi 0333 590208 596101 801846, 802325, 801234, 3. BLITAR KC Jl. Jend. A. Yani No. 2, Blitar 0342 804174 31698 801755 1. Wlingi KCP Jl. Bromo No. 22, Wlingi, Blitar 0342 5696361/62 5696360 4. BOJONEGORO KC Jl. D.I. Panjaitan No. 6, Bojonegoro 0353 881307, 884958, 882495 884979 31029 5. BONDOWOSO KC Jl. Ki Mangunsarkoro No. 5, Bondowoso 0332 427069, 421780, 425994 421444 31887 31157, 6. GRESIK KC Jl. P. Sudirman No. 89, Gresik 031 3990078 3983298 31011 1. Driyorejo KCP Jl. Raya Driyorejo No. 180, Gresik 031 7508240 7508208 7. H.R. MUHAMMAD KC Jl. H.R. Muhammad No. 90 B, Surabaya 031 73282090 7341860 1. Wiyung KCP Taman Pondok Indah, Blok A5-A6, Surabaya 031 7671134 7671276 483258, 424162, 421808, 8. JEMBER KC Jl. Jend. A. Yani No. 1, Jember 0331 486484 31050 486983 1. Ambulu KCP Jl. Manggar No. 34, Kec. Ambulu, Kab. Jember 0336 883344 883344

9. JOMBANG KC Jl. K.H. No. 116, Jombang 0321 861041, 862126, 861232/4 862758 31661

1. Mojoagung KCP Jl. Raya Mojoagung No. 236, Jombang 0321 495362 495362 10. KEDIRI KC Jl. K.J.P. Slamet A No. 35-37, Kediri 0354 773307 771322 31984 1. Doho KCP Jl. Brawijaya No. 40, Blok A 1-2, Kediri 0354 696859 696858 2. Pare KCP Jl. Raya No. 76, Pare, Kediri 0354 398535 398534 312255, 321520, 323317, 11. LAMONGAN KC Jl. Basuki Rachmat No. 86, Lamongan 0322 323222 31647 321442 1. Babat KCP Jl. Raya Babat No. 227, Lamongan 0322 457669, 457000 457669 881287, 886374, 881883, 12. LUMAJANG KC Jl. Alun-Alun Selatan No. 3, Lumajang 0334 881054 31565 882338 13. MADIUN KC Jl. Pahlawan No. 50, Madiun 0351 454131/2/3 462406 31956 1. Caruban KCP Jl. Panglima Sudirman No. 141, Caruban 0351 384533 384533 895309/10/11, 891920/21, 14. MAGETAN KC Jl. Jend. A. Yani No. 12, Magetan 0351 892456 31663 891841 31089, 15. MALANG KAWI KC Jl. Kawi No. 20-22, Malang 0341 327666, 328208, 362217 328106 31507 1. Batu KCP Jl. Panglima Sudirman No. 21, Batu 0341 594782, 594779 594779 2. Kepanjen KCP Jl. Ahmad Yani No. 106-107, Kepanjen, Malang 0341 399850/51, 399523 39850 3. Lawang KCP Jl. Raya Thamrin Blok AJ-1 0341 422898/99, 423540 423423

16. MALANG M.DINATA KC Jl. Laks. Martadinata No. 81, Malang 0341 368681/2, 363839, 359445 363831 31748

1. Turen KCP Jl. Panglima Sudirman No. 4, Turen, Malang 0341 827434, 827778 827800 2. UNIBRAW KCP Jl. M.T. Haryono, Malang 0341 575952/53 575901 17. MOJOKERTO KC Jl. Mojopahit No. 378, Mojokerto 0321 322402, 322442, 392978 323642 31949 1. Mojosari KCP Jl. Masjid No. 64, Mojosari, Mojokerto 0321 594960/61 594961 18. NGANJUK KC Jl. Raya Supriadi No. 3, Nganjuk 0358 321690/2, 325667, 321007 323404 31721 19. NGAWI KC Jl. Jend. A. Yani No. 55, Ngawi 0351 749525, 749529, 749536 748140 31607 881020, 881193, 881211, 20. PACITAN KC Jl. Jend. A. Yani No. 18, Pacitan 0357 884153 31378 882590 322853, 327328, 322693, 21. PAMEKASAN KC Jl. Jokotole No. 24, Pamekasan 0324 324064 31617 321485 22. PASURUAN KC Jl. Pahlawan No. 24, Pasuruan 0343 426621/2/3/4 425344 31684 1. Pandaan KCP Jl. Pahlawan Sunaryo No. 8, Pandaan, Pasuruan 0343 631100, 637645 637646 2. Bangil KCP Komp. Plaza Suropati Blok A No. 16, Bangil 0343 741810, 743900 744810 23. PONOROGO KC Jl. Soekarno-Hatta No. 28, Ponorogo 0352 481271, 481939, 485066 484265 31459 139. Annual Report 2008 Bank Rakyat Indonesia

Operating Unit (OU) Type of OU Address Area Code Telephone Facimile Telex

24. PROBOLINGGO KC Jl. Suroyo No. 30, Probolinggo 0335 424130 421267 31899 Jl. Raya Panglima Sudirman No. 270, Kraksaan, 1. Kraksaan KCP 0335 843456 843413 Probolinggo 25. SAMPANG KC Jl. K.H. Wahid Hasyim No. 83, Sampang 0323 321085, 321477, 323483 322544 31546 26. SIDOARJO KC Jl. Jend. A. Yani No. 35, Sidoarjo 031 8967985 8941065 31669 Komp. Pertokoan Gateway Aloha Blok B 07, Jl. Raya 1. Aloha KCP 031 8554627/9 8554627 Waru, Kec. Gedangan, Sidoarjo 2. Krian KCP Jl. Raya Imam Bonjol No. 37, Krian, Sidoarjo 031 8983343, 8976144 8976133 3. Pondok Komp. Pertokoan Wadung Asri, Jl. Raya Wadung Asri, KCP 031 8688174 8688175 Chandra Sidoarjo 4. Sepanjang KCP Komp. Ruko Taman No. 58, Sidoarjo 031 7871776 7871762 27. SITUBONDO KC Jl. Jend. A. Yani No. 123, Situbondo 0338 674111, 671279, 675273 673356 31039 662717, 663282, 664821, 28. SUMENEP KC Jl. Trunojoyo No. 135 A, Sumenep 0328 662682 31876 662682 SURABAYA KUSUMA 29. KC Jl. Kusuma Bangsa No. 122, Surabaya 031 5344495, 5467102 5350320 34214 BANGSA 1. Kampus UNAIR KCP Jl. Darmawangsa Dalam No. 23-B, Surabaya 031 5015776, 5039995 5015776 Komp. Ruko Sutorejo Prima Indah No. 78 B, Jl. Raya 2. Mulyosari KCP 031 5965313,5964564 5965313 Mulyosari, Surabaya 32881, 5320736/7, 5320757, 5341448, 30. SURABAYA KALIASIN KC Gd. Plasa BRI, Jl. No. 138, Surabaya 031 5320738 32882, 5350573, 5345771 32883 1. A. Yani KCP Jl. Jemur Andyani No. 69, Surabaya 031 8477361/2, 8475217 8477361 SURABAYA 5474045, 5475277, 3544802 31. KC Jl. Pahlawan No. 39-41, Surabaya 031 5474059 34119 PAHLAWAN 1. Diponegoro KCP Jl. Diponegoro No. 174, Surabaya 031 32264, 32. SURABAYA RAJAWALI KC Jl. Rajawali No. 23-27, Surabaya 031 3531219, 3551045, 3540275 3540581 32136 Jembatan Merah Jembatan Merah Plaza II Lt. Dasar Blok B, No. 1-2, 1. KCP 031 3520418/9 Plaza Surabaya 2. Kedungdoro KCP Jl. Kedungdoro No. 67, Surabaya 3. Pucang KCP Jl. Pucang Anom Timur No. 25 B, Surabaya Komp. Pertokoan Rungkut Megah 4. Rungkut KCP 031 8709265 8794955 Blok D No. 7, Jl. Rungkut No. 5, Surabaya SURABAYA 36317, 33. KC Jl. Perak Barat No. 357-375, Surabaya 031 3291380/2, 3291385 3295115 TJ. PERAK 36345 1. Manukan KCP Jl. Manukan Taman Blok 2 H No. 16, Surabaya 031 7411190 7458688 2. Pasar Turi KCP Jl. Semarang No. B 16, Surabaya Jl. Jend. A. Yani No. 4, 34. TRENGGALEK KC 0355 791691/2/3, 791390 323652 31637 Trenggalek 66316 321739, 321095, 323079, 35. T U B A N KC Jl. Veteran No. 15, Tuban 0356 791691 31708 321049 36. TULUNGAGUNG KC Jl. P. Diponegoro No. 2 B, Tulungagung 0355 329328, 323076, 323070/75 323072 31969 BANJARMASIN KW Jl. Jend. A. Yani KM 3.5, No. 151, Banjarmasin 0511 252056/57 251649, 252992 1. AMUNTAI KC Jl. Jend. A. Yani No. 1, Amuntai 0527 61062, 62075, 61890, 61493 62727 39297 1. Paringin KCP Jl. Jend. A. Yani No. 26 Paringin Kota 0526 2028123, 2028237 2028237 Jl. Jend. Sudirman No. 37, 37126, 2. BALIKPAPAN KC 0542 736765 732850 Balikpapan, 76112 37303 Jl. M.T. Haryono, Komp. Ruko, Balikpapan baru, Blok B 3, 1. Balikpapan Baru KCP 0542 875304, 875199 872817 No. 7, Balikpapan 2. Kebun Sayur KCP Jl. Letjend. Suprapto No. 68, RT. 05, Balikpapan 0542 746883 746884 Ruko Taman Citra Blok C. 65 3. Muara Rapak KCP 0542 416748 734209 Jl. Soekarno- Hatta, KM. 0.5, Muara Rapak Jl. Pangeran Samudra No. 98, 39118, 3. BANJARMASIN KC 0511 66848, 57884, 54363 53862, 365924 Banjarmasin 39107 1. A. Yani KCP Jl. Jend. A. Yani No. 151, KM. 3.5, Banjarmasin 0511 3271876 3266610 140. Annual Report 2008 Bank Rakyat Indonesia

Operating Unit (OU) Type of OU Address Area Code Telephone Facimile Telex

Bandara 2. KCP Jl. UR. , Bandara Sepinggan, Balikpapan 0542 766866 762907 Sepinggan 3. Kayu Tangi KCP Jl. Brigjend. Hasan Basri No. 46 B, RT. 15, Banjarmasin 0511 3302025 3304468 4. BARABAI KC Jl. Pangeran Muh. Noor, No. 19, Barabai 0517 41055, 43083, 42296 42297 39288 5. BATULICIN KC Jl. Kampung Baru No. 50, Batu Licin 0518 70947, 70927 70917 39497 1. Sungai Danau KCP Jl. Propinsi RT. 27, Sungai Danau 0512 61029 61029 38396, 6. BONTANG KC Jl. M.T. Haryono No. 9, Bontang 0548 21085 21091 38292 1. PKT Bontang KCP Wisma PT KIE, Bontang 0548 41223 41221 7. BUNTOK KC Jl. Panglima Batur No. 20, Buntok, 0525 22309, 21093, 21019 21295 39295 21611/12, 21335, 21700, 8. KANDANGAN KC Jl. Panglima Batur No. 16, Kandangan 0517 22575 39289 21918/9 9. KOTA BARU KC Jl. P. Kesuma Negara No. 12, Kota Baru, Pulau Laut 0518 22207, 22021, 21073 21212 39398 39118 10. KUALA KAPUAS KC Jl. Jend. A.Yani No. 41, Kuala Kapuas 0513 21031/2, 21532 21903 39221 4799010, 4799030, 4799661, 11. MARABAHAN KC Jl. Lima Desember No. 63, Marabahan 0511 4799001 39317 4799010 12. MARTAPURA KC Jl. Jend. A. Yani No. 5, Martapura 0511 721870, 721072 721292 39397 Jl. Tumenggung Surapati No. 93, 13. MUARA TEWEH KC 0519 21119, 21614 22701 39296 Muara Teweh 14. PALANGKARAYA KC Jl. Jend. A. Yani No. 85, Palangkaraya 0536 22638, 21507, 22392, 22901 21593 39396 15. PANGKALAN BUN KC Jl. P. Antasari No. 141, Pangkalan Bun 0532 21138, 21015, 21766, 21767 23223 39357 16. PLEIHARI KC Jl. Pancasila No. 2 A, Pleihari 0512 21058, 21028, 21194 210903 39299 17. RANTAU KC Jl. Brigjend. H. Basri No. 2, Rantau 0517 31015, 31150, 31735 31975 39298 38246, 18. SAMARINDA KC Jl. Gajah Mada No. 1, Samarinda 0541 742562, 741651, 201317/18 742592 38247 Komp. Pertokoan Mall Lembuswana Blok C No. 9, 1. Lembuswana KCP 0541 206603, 744781 744781 Samarinda Jl. Cipto Mangun Kusumo No. 2, 2. Loa Janan KCP 0541 261138, 7030810 261138 Loa Janan Ilir, Samarinda 3. Melak KCP Jl. Piere Tendean RT. II, No. 61 A, Melak, Kab. Kutai Barat 0545 41424 41703 19. SAMPIT KC Jl. M.T. Haryono No. 46, Sampit 0531 21080, 21274, 25306 22764 39384 20. SANGATTA KC Town Centre, Jl. Dr. Sutomo, Sangatta Baru 0549 22225, 5508463, 21655 21155 21. TANAH GROGOT KC Jl. Jend. Sudirman No. 4, Tanah Grogot 0543 21157, 21666 22646 37227 RT. 10/ RW. 14, Kel. Petong Kec. Penajam, Kab. Penajam, 1. Penajam KCP 0543 5238923 Paser Utara 22. TANJUNG KC Jl. Putri Zaleha No. 2, RT. 03, Tanjung Tabalong 0526 2021189 2021915 39287 23. TANJUNG REDEP KC Jl. S.A. Maulana, No. 1050, Tj. Redep, Kab. Berau, 77312 0554 21043 21759 38334 24. TANJUNG SELOR KC Jl. Teratai No. 4, Tanjung Selor 0552 21300, 21123, 21173 21079 38355 731337, 25. TARAKAN KC Jl. Yos Sudarso RT. 14/5, No. 86 Tarakan 0551 21143/4 24209 731310 1. Nunukan KCP Jl. Jend. A. Yani RT. 1 No. 08, Nunukan 0556 22922 22965 Jl. Cut Nyak Dien, No. 14-15, 661953, 662828, 661416, 26. TENGGARONG KC 0541 661404 38333 Tenggarong, 75512 664146 DENPASAR KW Jl. Dr. Kusumaatmaja No. 1, Denpasar 0361 228715, 221979 225791, 234796 1. AMLAPURA KC Jl. Gajah Mada No. 61, Amlapura 0363 22745, 21686, 21019, 21026 21788 35401 2. ATAMBUA KC Jl. I-J Kasimo No. 10, Atambua 0389 22054, 21053, 22053, 21024 21339 35021 3. BAJAWA KC Jl. Soekarno-Hatta No. 2, Bajawa 0384 21362, 21366, 21711, 21024 21675 35963 4. BANGLI KC Jl. Kusumayuda No. 1, Komp. Kota Baru Bangli 0366 91019, 91039, 91398 92098 35547 35113, 5. DENPASAR KC Jl. Gajah Mada No. 5-7, Denpasar 0361 228817/8/9 263715 35684 Dps. Gatot 1. KCP Jl. Gatot Subroto No. 459 X, Denpasar 0361 430756 430752 Subroto 2. Hayam Wuruk KCP Jl. Hayam Wuruk No. 123, Denpasar 0361 231859 231859 3. WR. Supratman KCP Jl. WR. Supratman No. 104, Denpasar 0361 464627 464627 141. Annual Report 2008 Bank Rakyat Indonesia

Operating Unit (OU) Type of OU Address Area Code Telephone Facimile Telex

6. DENPASAR RENON KC Jl. Kusumaatmaja No. 1, Denpasar 0361 233011 (hunting) 233021 1. Dps. Diponegoro KCP Jl. Diponegoro No. 220, Denpasar 0361 224580 224580 2. Undiknas KCP Jl. Watu Renggong No. 149, Denpasar 0361 233091 233091 21147, 21062, 21494, 22130, 7. DOMPU KC Jl. Akasia No. 62, Dompu 0373 21669 35344 21969 8. ENDE KC Jl. Soekarno No. 16, Ende 0381 23286, 21030, 21615, 21020 22870 35462 941097, 943150, 943038, 9. GIANYAR KC Jl. Pudak No. 19, Gianyar 0361 942266 35495 942273 1. Celuk KCP Jl. Raya Celuk No. 22, Gianyar 0361 296930 296930 2. Ubud KCP Jl. Cok Gde Rai No. 50, Ubud Gianyar, Bali 0361 972305 972305 10. KALABAHI KC Jl. Soetoyo No. 6, Kalabahi 0386 21584, 21040, 21461, 21392 21569 35793 31011, 31020, 31747, 31609, 11. KEFAMENANU KC Jl. Mayjend. El Tari No. 30, Kefamenanu 0388 31588 35964 31748 831010, 833788, 833353, 35435, 12. KUPANG KC Jl. No. 18, Kupang 0380 831373 833481, 833463 35370 13. KUTA KC Jl. Raya Tuban Mo. 99 X, Kuta, Denpasar 0361 765573 765573 21053, 21506, 21030, 21605, 14. LARANTUKA KC Jl. Piere Tendean No. 3, Larantuka 0383 21563 35873 21819 Jl.. Trans Lembata Rayuan Kelapa Timur, Kel. Lewoleba 1. Lewoleba KCP 0383 41641 41641 Utara, Kec. Nubatukan, Kab. Lembata, NTT 15. MATARAM KC Jl. Pejanggik No. 16, Mataram 0364 631318, 638379, 633017 633084 35483 16. MAUMERE KC Jl. Don P.C.X. Da Silva No. 1, Maumere 0383 21788, 22210, 22206/7/8/9 21377 35932 17. NEGARA KC Jl. Udayana No. 13, Negara 0365 41076, 42661, 41890 42022 35400 18. PRAYA KC Jl. Gajah Mada No. 128, Praya 0370 654069, 653032 654911 19. RABA BIMA KC Jl. Pintu Gerbang No. 1, Raba Bima 0374 43352, 43122, 42997 43723 35475 20. RUTENG KC Jl. Yos Sudarso No. 25, Ruteng 0385 21603, 21764, 21722 22383 35382 1. Labuan Bajo KCP Jl. Soekarno-Hatta, Labuan Bajo, Manggarai Barat 0385 41995, 41474 41994 21. SELONG KC Jl. Pahlawan No. 92, Selong 0376 21242, 21428, 22680 21419 35343 22. SEMARAPURA KC Jl. Gunung Batukaru No. 7, Semarapura 0366 21042, 21328, 21805, 21841 21329 35473 23. SINGARAJA KC Jl. Ngurah Rai No. 74, Singaraja 0362 23432, 21980 24576 35493 1. Seririt KCP Jl. Sudirman No. 30 A, Seririt, Singaraja 0362 93302 92419 24. S O E KC Jl. M. Hatta No. 34, Soe 0388 21042, 21590, 21346 21144 35931 25. BESAR KC Jl. Dr. Wahidin No. 13, Sumbawa Besar 0371 21006, 21940 22632 35384 26. TABANAN KC Jl. Gunung Semeru No. 1, Tabanan 0361 819034 814166, 35433 Jl. Ngurah Rai, No. 12 X, Bajera, 1. Bajera KCP 0361 8533782 810678 Kab. Tabanan Jl. Raya Kediri No. 88 E, 2. Kediri KCP 0361 810982, 812338 812390 Kediri Tabanan 27. WAIKABUBAK KC Jl. Gajah Mada No. 30, Waikabubak 0387 21048, 21068, 21088, 21677 21218 35997 28. WAINGAPU KC Jl. Jend. A. Yani No. 36, Waingapu 0387 61030, 61921 62234 35433 MANADO KW Jl. Sarapung No. 4-6, Manado 0431 863592, 863378, 863778 862779 1. BITUNG KC Jl. Sudirman No. 1, Bitung 0438 21037, 21252, 21647 32177 74248 824156, 824465, 830201, 2. KC Jl. Jend. A. Yani No. 22, Gorontalo 0435 821046 74255 826657 3. KOTAMUBAGU KC Jl. Jend. A. Yani No. 311, Kotamobagu 0434 21887, 21014 21078, 21901 21224 74347 4. LIMBOTO KC Jl. Jend. Sudirman No. 269, Limboto 0436 881445/7, 880100 881446 74311 Jl. Trans Sulawesi, Desa Marisa Utara, Kec. Marisa, Kab. 1. Marisa KCP 0443 210369 210429 Pahuato 5. LUWUK KC Jl. Jend. A. Yani No. 179, Luwuk 0461 21103/04, 22756, 21153 75133 Banggai Jl. Mandapar, Kel. Lompio, Kec. Banggai, Kab. Banggai 1. KCP 0462 21555 21556 Kepulauan Kepulauan 863177, 863377, 852747, 74182, 6. MANADO KC Jl. Sarapung No. 4-6, Manado 0431 867435 866725 74282 1. Boulevard KCP Komp. Bahu Mall Blok S 2, Jl. W. Mongonsidi, Manado 0431 844700, 843375 841919 2. Martadinata KCP Jl. Martadinata No. 61, Kec. Tikala, Manado 0431 855031, 858784 873794 142. Annual Report 2008 Bank Rakyat Indonesia

Operating Unit (OU) Type of OU Address Area Code Telephone Facimile Telex

75147, 7. PALU KC Jl. Dr. Mohamad Hatta No. 12, Palu 0451 454000/1/2/3, 466000 427140 75142 8. PARIGI KC Jl. Pasar Inpres Tagunu No. 227, Parigi 0450 21631/3/4, 21321 21632 9. POSO KC Jl. Pulau Sumatera No. 7, Poso 0452 21133, 21796, 21135 21134 75101 1. Ampana KCP Jl. Yos Sudarso No. 10, Ampana 0464 21095 21525 10. SOA SIU KC Jl. Pattimura No. 1, Soa Siu 0921 61046, 61600, 61896 61298 73262 11. TAHUNA KC Jl. Dr. Sutomo No. 50, Tahuna 0432 21318/9, 22784/5 22252 74178 12. KC Jl. Pahlawan Revolusi No. 234, Ternate 0921 21280/90, 22072, 21926 25585 75157 1. Tobelo KCP Jl. Pelabuhan Kec. Gamsungi, Tobelo, Utara 0924 22540 22540 13. TOLI-TOLI KC Jl. Usman Binol No. 144, Toli-Toli 0453 21195, 23195 75198 14. TONDANO KC Jl. Pinaesaan SK No. 17/31, Tondano 0431 321412, 321447/9, 321248 322420 74341 1. Tomohon KCP Jl. Raya Tomohon, Kel. Paslaten I Lingkungan No. 37 0431 355287 355289 MAKASSAR KW Jl. A. Yani No. 8, Makassar 0411 313174, 312931 365535 73112, 1. AMBON KC Jl. Diponegoro No. 29, Ambon 0911 356563, 315108, 355277 355177 73277 1. Waihaong KCP Jl. Sultan Babullah No. 18, Waihaong, Ambon 0911 314849, 356563 356565, 355277 2. BANTAENG KC Jl. Kartini No. 17, Bantaeng 0413 21093/5, 22476 21162 71366 3. BARRU KC Jl. Sultan Hasanuddin No. 90, Barru 0427 21080, 21118, 21600 21818 71385 Gedung BRI II Lt. 5, BRI SYARIAH KP 021 5713115, 5709060 5713117 Jl. Jend Sudirman Kav 44-46, Jakarta 10210 1. JKT MAMPANG KC Jl. Mampang Prapatan No. 17, Blok G-H, Jakarta Selatan 021 7982538, 7982316 7996032 1. Benhil KCP Jl. Bendungan Hilir Raya No. 17 B, Jakarta Pusat 021 5723906/7 5723947 2. Otista KCP Jl. Otista No. 72, Jakarta Timur 021 2801348 2801351 Jkt Pondok Jl. Pahlawan Revolusi RT. 003/ 004, No. 16, Pondok 3. KCP 021 68196657, 68196653 8607095 Bambu Bambu, Jakarta Timur, 13430 4. Jkt Cibubur KCP Jl. Raya Lapangan Tembak No. I A, RT. 006/02, Cibubur 021 70263436/7 87713275 Jkt Pondok Plaza Pondok Gede Blok C, No. 5, Jl. Pondok Gede Raya, 5. KCP 021 68196656, 68196652 8469423 Gede Bekasi 2. SERANG KC Jl. Ahmad Yani No. 165, Sumur Pecung, Serang, Banten 0254 202011, 220377 220376 3. BANDUNG KC Jl. Karapitan No. 92, Kel. Cikawao Kodya Bandung 022 4214385, 4207162 4207158 1. Cimahi KCP Jl. Raya Cimahi No. 598, Cimahi 022 6631675 6632341 2. Lembang KCP Jl. Grand Hotel Lembang No. 21, Lembang, Jawa Barat 022 2784902 2784903 Jl. Siliwangi No. 181, Kel. Kejaksaan, Kec. Kejaksaan, 4. CIREBON KC 0231 207311, 231313, 231414 207311 Cirebon Jl. K.H. Abdul Halim No. 491, Cigasong, Majalengka, 1. Majalengka KCP 0233 284445 284446 Jawa Barat 5. MALANG KC Jl. Kawi No. 37, Kel. Bareng, Kec. Kojen, Malang 0341 347925/26, 365269 347926 1. Pandaan KCP Delta Permai A. 37, Pandaan, Kab. Pasuruan, Jawa Timur 0343 630108 638308 Jl. Majapahit No. 226 B, Kel. Kalicari Kec. Pedurungan, 6. SEMARANG KC 024 6721849, 6718660 6718771 Semarang Timur Ruko Kereta Api Indonesia (KAI) 1. Kudus KCP 0291 439474 439475 Jl. Jend. A. Yani Kudus, Jawa Tengah Komp. Ruko Rungkut Megah Raya Blok L2-3, 7. SURABAYA KC Jl. Raya Kali Krukut No. 3, Kel. Panjang Jiwo, Kec. 031 8054362 532460 Rungkut, Surabaya 1. Sidoarjo KCP Jl. Ahmad Yani No. 35, Sidoarjo 031 8054362 8054361 Surabaya 2. KCP Gedung BRI Tower, Jl. Jend. Basuki Rachmat, Surabaya 031 5324633 5324640 Kaliasin 3. Gresik KCP Jl. Panglima Sudirman 031 3980980 3980973 Jl. K.H. No. 89, Kel. Notoprajan, Kec. 8. YOGYAKARTA KC 0274 411221 450603 Ngampilan, DI Yogyakarta 1. Sleman KCP Jl. Bhayangkara No. 18, Sleman, Yogyakarta 0274 867301 867302 Komp. Pertokoan Pante Priak 9. BANDA ACEH KC Jl. H. Dimurtala No. 6-7, Kec. Kuta Alam, Banda Aceh, 0651 638304/5, 635355 638306 NAD 143. Annual Report 2008 Bank Rakyat Indonesia

Operating Unit (OU) Type of OU Address Area Code Telephone Facimile Telex

Jl. Veteran No. 37 D, Kel. Purus Selatan, Kec. Padang 10. PADANG KC 0751 38813/4 812660 Barat, Padang Jl. Ahmad Yani KM 4.00 No. 31, Kel. Kebun Bunga, Kec. 11. BANJARMASIN KC 0511 3257991/2 3257995 Banjarmasin Timur Jl. Dr. Ratulangi No. 7-9 Petak No. 3 & 4, Kel. Mangkura, 12. MAKASSAR KC 0411 83303, 8111156 8111157 Kec. Ujung Pandang, Kota Makassar Jl. Taepur Yusuf No. 61, RT. 01/ 02, Kel. Pamoyanan, 13. CIANJUR KC 0263 270097, 263260 271909 Cianjur 14. BOGOR KC Jl. Padjajaran No. 53, Bantar Jati, Kec. Bogor Utara, Bogor 0251 313629 317442 1. Depok KCP Jl. Margonda Raya No. 297 Depok, Jawa Barat 021 77210587 77206807 15. KEDIRI KC Jl. Pahlawan Kusumabangsa No. 2, Desa Ngadirejo, Kediri 0354 682776, 672114 683142 16. SOLO KC Jl. Slamet Riyadi No. 325 Solo, Jawa Tengah 0271 728403 742906 17. MEDAN KC Jl. Gaot Suroto No. 189 DE, Medan 061 8826225 8830545 18. PALEMBANG KC Jl. Jend. Sudirman No. 926 B, Palembang 0711 353666 320321 19. SAMARINDA KC Jl. Abdul Hasan Kav. Samarinda, Kalimantan Timur 0541 744450 202353 20. PEKANBARU KC Jl. Ir. Juanda No. 81-83, Pekanbaru, Riau 076 839672 839674 21. TANJUNG KARANG KC Jl. Kartini No. 156 A, Tanjung Karang, Lampung 0721 265003, 267020 265007 22. MATARAM KC Jl. Pejanggih No. 47 E, Mataram-NTB 0370 639527 649271 Komp. Graha Arteri Mas No. 2, Arteri, Jl. Panjang No. 68, 23. JKT KEDOYA KC 021 58303563/4/5 58303567 Kedoya 1. Jkt-Palmerah KCP Jl. Palmerah Barat No. 50, RT. 003/04, Jakarta Barat 021 53678860 53671380 Jl. Ciledug Raya Komp. Cipulir Center No. B/2, Kebayoran 2. Jkt-Cipulir KCP 021 68196651 7206362 Lama, Jakarta Selatan 24. TANGERANG KC Jl. Merdeka No. 110 A, Tangerang, Banten 021 5522466 5579422 25. BALIKPAPAN KC Jl. Ahmad Yani No. 1 A, Gunung Sari, Balikpapan, Kal-Tim 0542 425314, 736767 732270 26. PONTIANAK KC Jl. Tanjung Pura No. 206 A, Pontianak, Kal-Bar 0561 762875, 760400 748600 27. JAMBI KC Jl. Sudirman No. 31 A-B, Hok, Jambi 074 22451 22317

Note

KW : Kantor Wilayah/Regional Office KCK : Kantor Cabang Khusus/Special Branch Office KC : Kantor Cabang/Branch Office KCP : Kantor Cabang Pembantu/Sub-Branch Office

JKT : Jakarta Statement of Responsibility for Financial Reporting

144. Annual Report 2008 Bank Rakyat Indonesia

This Annual Report and the accompanying financial statements and related information, are the responsibility of the management of PT Bank Rakyat Indonesia (Persero) Tbk., and have been approved by members of the Board of Commissioners whose signatures appear below:

Bunasor Sanim President Commissioner/Independent

Agus Pakpahan Agus Suprijanto Commissioner Commissioner

Saifullah Yusuf B.S. Kusmuljono Commissioner Independent Commissioner

Baridjussalam Hadi Aviliani Independent Commissioner Independent Commissioner Statement of Responsibility for Financial Reporting

145. Annual Report 2008 Bank Rakyat Indonesia

This Annual Report and the accompanying financial statements and related information, are the responsibility of the management of PT Bank Rakyat Indonesia (Persero) Tbk., and have been approved by members of the Board of Directors whose signatures appear below:

Sofyan Basir President Director

Sarwono Sudarto Abdul Salam Sulaiman A. Arianto Director Director Director

A. Toni Soetirto Bambang Soepeno Sudaryanto Sudargo Director Director Director

Suprajarto Lenny Sugihat Asmawi Syam Director Director Director

Financial Statements

147. Annual Report 2008 Bank Rakyat Indonesia PT Bank Rakyat Indonesia (Persero) Tbk and subsidiary

Consolidated Financial Statements with Independent Auditors’ Report Year Ended 31 December 2008 and 2007

Purwantono, Sarwoko & Sandjaja Registered Public Accountants No. KEP-122/KM.5/2006 A member firm of Ernst & Young Global Limited Subsidiary Company

151.273. Annual Report 2008 Bank Rakyat Indonesia

Subsidiary Company of BRI (equity holdings of more than 50%)

Line of Share No. Name Address Description Businness Ownership

1 PT. Bank Syariah BRI *) Menara Jamsostek South Banking 99.99% Has been operating Tower, 24th Floor since 2008 with total Jl. Gatot Subroto 38 assets of Rp483.15 Jakarta 12710 billion and revenues of Rp20.24 billion

*) - The Deed of Acquisition of the Shares of BJA by BRI has been signed on 19 December 2007 (Acquisition Deed no. 61) - Pursuant to Decision Letter of the Governor of Bank Indonesia No.10/67/KEP.GBI/DpG/2008 dated 16 October 2008, as of 17 November 2008, PT. Bank Jasa Artha has changed its line of business to become a Commercial Bank that is engaged in banking activities on the basis of sharia principles under the name of PT. Bank Syariah BRI Corporate Information

152.274. Annual Report 2008 Bank Rakyat Indonesia

Name of Company PT Bank Rakyat Indonesia (Persero) Tbk.

Establishment 18 December 1968 (Formally, based on Law No. 21 of 1968)

Composition of Shareholders (as of 31 December 2008) • The Republic of Indonesia, 56.79% • Management and Employees, 0.71% • Public Shareholders, 42.50%

Share Listing Bursa Efek Indonesia/Indonesia Stock Exchange on 10 November 2003

Line of Business Banking

Ticker Code BBRI

Public Accountant Rating Agencies Corporate Secretary Purwantono, Sarwoko & Sandjaja PT Pemeringkat Efek Indonesia Gedung BRI I Lt. 20 (Ernst & Young) (Pefindo) Jl. Jend. Sudirman Kav. 44-46 Indonesia Stock Exchange Building Setiabudi Atrium 8th Floor Jakarta 10210, Indonesia Tower 2, 7th Floor Suite 809 - 810 Tel: (62-21) 575 1966 Jl. Jend. Sudirman Kav. 52–53 Jl. Rasuna Said Kav. 62 Fax: (62-21) 570 0916 Jakarta 12190 Jakarta 12920 email: [email protected] Tel: (62-21) 52895000 Fax: (62-21) 52894100 Fitch Rating PT Fitch Ratings Indonesia Gedung Plaza DM, 24th Floor Suite 2406 Shares Registrar Jl. Jend. Sudirman Kav. 25 PT Datindo Entrycom Jakarta 12920 - Indonesia Jl. Jend. Sudirman Kav. 34-35 Jakarta 10220 Fitch Ratings Singapore Pte. Ltd. Tel: (62-21)570 9009 6 Temasek Boulevard #35-03/04/05 Suntec Tower Four Singapore 038986

Securities Depository Moody’s KSEI (Kustodian Sentral Efek Indonesia) PT Moody’s Indonesia Indonesia Stock Exchange Building, Menara Rajawali Lt. 22 Tower 1, Lt.5 Mega Kuningan Lot. 5.1 Jl. Jend. Sudirman, Kav.52-53 Jakarta - Indonesia Jakarta, 12190 Moody’s Singapore Pte. Ltd. Tel: (62-21) 5299 1003 50 Raffles Place #23-06 Fax: (62-21) 5299 1129 Singapore Land Tower Singapore 048623 Contact Address

275.153.273. Annual Report 2008 Bank Rakyat Indonesia

Contact Address for Readers PT Bank Rakyat Indonesia (Persero) Tbk.

Head Office Gedung BRI I Jl. Jend. Sudirman Kav. 44-46 Jakarta 10210, Indonesia Tel: (62-21) 251 0244, 251 0254, 575 1966 Fax: (62-21) 250 0065, 250 0077, 570 0916

Corporate Secretary Gedung BRI I Lt. 20 Jl. Jend. Sudirman Kav. 44-46 Jakarta 10210, Indonesia Tel: (62-21) 575 1966 Fax: (62-21) 570 0916

Website www.bri.co.id

E-mail [email protected] 276.154. Annual Report 2008 Bank Rakyat Indonesia

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Annual Report 2008

PT Bank Rakyat Indonesia (Persero) Tbk.

Head Office Gedung BRI I Jl. Jenderal Sudirman Kav. 44-46 Jakarta 10210, Indonesia Phone: (62-21) 251 0244, 251 0254, 575 1966 Facsimile: (62-21) 250 0065, 250 0077, 570 0916

Corporate Secretary Gedung BRI I 20th floor Jl. Jendral Sudirman Kav. 44-46 Jakarta 10210, Indonesia Phone: (62-21) 575 1966 Facsimile: (62-21) 570 0916

Website www.bri.co.id

E-mail [email protected]