2018 Annual Report 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Table of Content
01 02 03
Opening Business and Financial Functional Review Review
6 Key Performance 2018 42 Loan 84 Management Discussion and Analysis 8 Vision, Mission, Core Beliefs & 46 Treasury, FI and International Core Values Banking
10 Overview of CCB Indonesia 48 Human Capital
12 Company Profile 51 Information Technology
14 Shareholders Information 52 Risk Management • Company Group Structure, Subsidiaries and Associated Entities • Capital and Risk Management – Parent Entity
19 Shares Highlights
22 Financial Highlights
24 Milestones
30 Awards
32 Strategic Direction
34 Report of Board of Commissioners
37 Report of Board of Directors 05 Corporate Information 06 Financial Statement
04 05 06
Good Corporate Corporate Financial Governance Information Statement
94 Corporate Social Responsibility 158 Organization Structure 192 Responsibility for Financial Reporting 98 Good Corporate Governance 160 Board of Commissioners’ Profile 193 Audited financial report 2018 154 Committees Report 164 Board of Directors’ Profile
170 Committees Profile
176 Executive Officers
178 Product, Services, rate information
180 Sustainability Report
184 Offices Network 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Opening
Buketan Pattern Batik
Buketan pattern is using plants and flowers as decorative ornament. The word “buketan” was originated from French “bouquet”, which means flower arrangement. Along with European influence during the colonial era, especially from the Dutch, this pattern is widely developed in Java coastal area during the 19th century. 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Key Performance 2018
With the support of stakeholders, CCB Indonesia managed to increase business volume and performance continuously from year to year and provided better quality services, through 95 offices by the end of 2018.
18.000
16.000
14.000 Total Assets 12.000 Growth 10.000 2018
8.000 1,29%
6.000 Compound Annual Growth Rate (CAGR) 2014-2018: 4.000 2.000 13% 0
in billion IDR 2014 2015 2016 2017 2018
14.000
12.000 Loan
10.000 Growth 2018 8.000 14,25% 6.000 Compound Annual 4.000 Growth Rate (CAGR) 2014-2018:
2.000
0 14% in billion IDR 2014 2015 2016 2017 2018
Annual Report 2018 6 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
14.000 Third Party 12.000 Fund
10.000 Growth 2018 8.000 2,83% 6.000
Compound Annual 4.000 Growth Rate (CAGR) 2014-2018: 2.000
0 12% in billion IDR 2014 2015 2016 2017 2018
3.000 Equity 2.500 Growth 2.000 2018
1.500 2,96%
1.000 Compound Annual Growth Rate (CAGR) 5.00 2014-2018:
0 in billion IDR 2014 2015 2016 2017 2018 20%
160
140 Profit Before Tax
120 Growth 100 2018
80 80,06%
60 Compound Annual Growth Rate (CAGR) 2014-2018: 40
- in billion IDR 2014 2015 2016 2017 2018 17%
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 7 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Annual Report 2018 8 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
Vision
Become an international bank and has the ability to multiply value through innovation capabilities
Mission
Provide better products and services for customers, create higher value for shareholders, build broader career path for associates, and taking full social responsibility as a good corporate citizen
Core Beliefs
• Strong financial base • Ability to provide complex service and with speed • Strong partnered relationship • Continuous improvement • Human capital • Commitment
Core Values
• Integrity • Trust • Speed • Competence
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 9 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Overview of CCB Indonesia
With the current focus on Corporate Banking business, CCB Indonesia will continue to develop small and medium enterprises, as well as consumer banking, and strive to become the market maker of RMB’s business in Indonesia.
PT Bank China Construction Bank Indonesia Tbk (“CCB Indonesia”) Denpasar Bali, Mataram Lombok, Palembang, Bandar Lampung, is a Commercial Foreign Exchange Bank listed in the Indonesian Batam, Pekanbaru, Pontianak, Makassar and Pangkal Pinang. Stock Exchange (IDX), and was the result of a merger between PT Bank Windu Kentjana International Tbk (“Bank Windu”) and PT Bank With the current focus on Corporate Banking business, CCB Antardaerah (“Bank Anda”) on November 30, 2016, which has a Indonesia will continue to develop small and medium enterprises, as network consisting of 95 offices spread out in cities across Indonesia well as consumer banking, and strive to become the market maker such as Jakarta, Bandung, Semarang, Yogyakarta, Surabaya, of RMB’s business in Indonesia.
Annual Report 2018 10 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
Brief History of CCB Indonesia
Merger between Bank Windu with the fully controlled subsidiary Previously, PT Bank Windu Kentjana International Tbk (“Bank Windu”) Bank Anda has been approved by Financial Services Authority (OJK) was also a merged bank between PT Bank Multicor Tbk and PT Bank No. S-400 / PB.12 / 2016 dated 30 November 2016, as well as the Windu Kentjana (BWK) on January 8, 2008. The merger is legally Admission of Merger Notification of Minister of Law and Human incorporated in the Merger Deed No.171 dated 28 November 2007 Rights No. AHU-AH.01.10-0003777 dated 30 November 2016. which was approved by the Minister of Justice and Human Rights No.AHU-00982.AH.01.02 on January 8, 2008. Thus, Merger between Bank Windu and Bank Anda has been effectively implemented as of November 30, 2016. PT Bank Windu Kentjana (BWK) was originally formed on May 26, 1967 by 3 social foundations as its founder, Dharma Putra Kostrad Bank Windu as surviving company was renamed into “PT Bank China Foundation, Trikora Orphans Fellowship Foundation and Djajakarta Construction Bank Indonesia Tbk” or shortened as “CCB Indonesia” Foundation. In 1978, ownership transferred to the Salim family (Salim which had been registered by the Decision of Minister of Law R.I. Group). No. AHU-0003776.AH.01.10.Tahun 2016 dated November 30, 2016 and and has been approved by Financial Services Authority No.S- While Multicor was originally known as PT Multinational Finance 441/PBI.12/2016 dated December 28, 2016 in accordance with copy Corporation established in 1974 in the form of Non-Bank Financial of the corresponding decision of the Board of Commissioners of Institutions (LKBB), is a consortium (joint venture) of domestic Financial Services Authority No. 17/KDK.03/2016 dated December banks with international banks namely Royal Bank Of Scotland, BCA, 27, 2016 regarding the confirmation of the use of business license LTCB Japan, Jardine Fleming, Chemical Bank and Asia Insurance. of PT Bank Windu Kentjana International Tbk into PT Bank China In 1993 changed its status to Bank Multicor. Subsequently in 2003, Construction Bank Indonesia Tbk. Mr. Johnny Wiraatmadja and colleagues took over the ownership of Bank Multicor. Background for change of Company’s name is related to the entry of new controlling shareholder China Construction Bank Corporation On January 8, 2008 a merger between Bank Multicor Tbk and BWK (“CCB”) into the Company, which currently holds 60% (sixty percent) became “PT Bank Windu Kentjana International Tbk.”, also known as of the shares of the Company. “Bank Windu”.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 11 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Company Profile
Annual Report 2018 12 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
Company Name PT Bank China Construction Bank Services Authority No.S-441/PBI.12/2016 Indonesia Tbk dated December 28, 2016 in accordance with copy of the corresponding decision of Head Office the Board of Commissioners of Financial Sahid Sudirman Center, 15th floor Services Authority No. 17/KDK.03/2016 Jl. Jend Sudirman Kav. 86, Central Jakarta dated December 27, 2016 regarding the 10220, Indonesia. confirmation of the use of business license Telephone (62-21) 5082 1000 of “PT Bank Windu Kentjana International Fax. (62-21) 5082 1010 Tbk” into“PT Bank China Construction Bank SWIFT/BIC : BWKIIDJA Indonesia Tbk”.
Website Bank Status idn.ccb.com Public Company dan Foreign Exhange Bank
Email Stock Listing [email protected] Indonesia Stock Exchange
Investor Relation Stock Code Corporate Secretary (Andreas Basuki) MCOR
Legal Aspect Securities Administration Merger between PT Bank Windu Kentjana Agency International Tbk with PT Bank Antardaerah PT Sinartama Gunita which was approved by Financial Services Sinar Mas Land Plaza Authority (“OJK”) No. S-400 / PB.12 / 2016 Menara 1, 9th floor, dated 30 November 2016, as well as the Jl. MH Thamrin No 51 Admission of Merger Notification No. AHU- Jakarta 10350, Indonesia AH.01.10-0003777 dated 30 November 2016. Public Accountant Surviving company was renamed into “PT Tanudiredja, Wibisana, Rintis dan Rekan Bank China Construction Bank Indonesia (a member of the PricewaterhouseCoopers Tbk” abbreviated “CCB Indonesia” which network of firm) had been registered by the Decision of Plaza 89, Jl HR Rasuna Said Kav X-7 No. 6 Minister of Law R.I. No. AHU-0003776. Jakarta 12940, Indonesia AH.01.10.Tahun 2016 dated November 30, Telp : +62 21 521 2901 2016 and has been approved by Financial Fax : +62 21 5290 5555 www.pwc.com/id
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 13 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Shareholders Information
Ownership Structure per December 31, 2018
60.00% China Construction Bank Corporation Huijin *) (57.11%) HKSCC Nominees Limited (36.79%) Others (6.10%)
• Huijin is a wholly state-owned company established in accordance with the PRC Company Law on 16 December 2003 with the approval of the State Council. Both its registered capital and paid-in capital is RMB828,209 million. • HKSCC Nominees Limited is a wholly-owned subsidiary of Hong Kong Securities Clearing Company Ltd.
21.32% Johnny Wiraatmadja
5.21% Kiki Hamidjaja
13.47% Public
Brief Description of Shareholders
China Construction Bank Corporation (CCB) Johnny Wiraatmadja China Construction Bank Corporation (“CCB”), headquartered in Mr. Johnny Wiraatmadja, Indonesian citizen, 65 years old, a Beijing, is a leading joint stock large-scale commercial bank in businessman and experienced in banking since 1979, currently China. Its predecessor, China Construction Bank, was established domiciled in Jakarta. In 1976, he graduated from National Banking in October 1954. It was listed on Hong Kong Stock Exchange in Academy, majoring in Financial Banking Study, and he earned October 2005 (stock code: 939) and the Shanghai Stock Exchange Bachelor of Economics degree from University of Indonesia in 1984. in September 2007 (stock code: 601939). At the end of 2018, the Bank’s market capitalization reached US$207,179 million, ranking He was appointed as Director of the Treasury at PT Bank Panin Tbk in fifth among all listed banks in the world. The Group ranks second 1991 until 2007. In addition, starting in 2007 until November 2018, he among global banks in terms of Tier 1 capital. has served as President Commissioner of PT Bank Panin Tbk.
CCB provides customers with comprehensive financial services, Kiki Hamidjaja such as personal banking, corporate banking, investment and Mr. Kiki Hamidjaja, Indonesian Citizen, graduated from University wealth management. With 14,977 banking outlets and 345,971 staff of Southern California in 1987, in International Finance Money members, CCB serves hundreds of millions of personal and corporate and Banking. His career as a professional began in 1987 as customers. CCB has commercial banking branches and subsidiaries Assistant Manager of Bangkok Bank in Jakarta, then in 1990 he in 29 countries and regions with nearly 200 commercial banking joined PT Modern Bank with the last position as Vice President in entities at various levels, and subsidiaries in different industries 1997. Other positions held by him up to now is the Director of PT and sectors, including fund management, financial leasing, trust, Menara Prambanan since 2002, as President Director of PT Jawa insurance, futures, pension and investment banking. Barat Indah, Deputy CEO of PT Danpac Resources since 2006 and as President Commissioner of PT Damiri since 2007. Also serves Adhering to the “customer-centric, market-oriented” business as President Director of PT Central Omega Resources Tbk since philosophy, CCB is committed to developing itself into a bank with January 2011. Until now he also serves as Commissioner of PT Mulia top value creation capability. CCB strives to achieve the balance Pacific Resources and PT Mega Buana Resources. between short-term and long-term benefits, and between business goals and social responsibilities, so as to maximise the value for customers, shareholders, society and its associates.
Annual Report 2018 14 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 15 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Company Group Structure, Subsidiaries and Associated Entities
Subsidiaries and / or Associated Entities As of December 31, 2018, PT Bank China Construction Bank Indonesia Tbk has no subsidiaries or associated entities.
Other Information As of December 31, 2018, there has been no transactions between been no provision of funds, commitments or other facilities which banks and related parties in business groups in the financial sector; may be equalized by any entity situated in business group with Bank there has been no transactions with related parties conducted by to debtor and / or parties that have obtained the provision of funds every entity in the business group in the financial sector; there has from Bank.
Structure of Subsidiaries of CCB Corporation
China Construction Bank (Asia) Corporation Limited
China Construction Bank (London) Limited
China Construction Bank (Russia) Limited
China Construction Bank (Europe) S.A. Overseas Subsidiaries
Banks China Construction Bank (New Zealand) Limited
China Construction Bank (Brazil) Banco Múltiplo S/A
China Construction Bank (Malaysia) Berhad
PT Bank China Construction Bank Indonesia Tbk
CCB Principal Asset Management Co., Ltd.
CCB Financial Leasing Co., Ltd.
CCB Trust Co., Ltd.
CCB Life Insurance Company Limited
The Main Integrated Sino-German Bausparkasse Co., Ltd. Operation Subsidiaries CCB Futures Co., Ltd.
CCB Pension Management Co., Ltd.
CCB Property & Casualty Insurance Co., Ltd.
CCB Financial Asset Investment Co., Ltd.
CCB International (Holdings) Limited
Annual Report 2018 16 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
Capital Management The Group has implemented comprehensive capital management, The senior management is responsible for carrying out the risk which covers managing activities such as formulation of capital strategies adopted by the Board and organizing the implementation management policies, capital blueprint and planning, capital of the comprehensive risk management activities across the Group. measurement, assessment on internal capital adequacy, capital CCB places high priority on the risk management of subsidiaries, allocation, capital incentive, restraint and transmission, capital monitors their adherence to the risk appetite and conducts overall raising, monitoring and reporting, and application of the advanced risk assessment of subsidiaries on a regular basis. It established capital measurement approach in its daily operations. CCB a centralised reporting mechanism for risk management of general principle of capital management is to effectively balance subsidiaries to push subsidiaries to continuously improve their the supply and demand of capital, by relying on internal capital corporate governance mechanisms, thus preventing risks from accumulation supplemented with external capital replenishment the root. In compliance with the risk management requirements of and strengthening capital restraints and incentives on business the parent bank through their corporate governance mechanisms, development, and keep capital level above regulatory requirements, the subsidiaries established and improved the comprehensive risk with proper safety margin and buffer band. management system to enhance their capabilities in compliant operation and risk management.
Capital Adequacy Ratio In accordance with the regulatory requirements, the Group Credit Risk Management calculates and discloses capital adequacy ratios in accordance Credit risk represents the potential loss that may arise from the with both the Capital Rules for Commercial Banks (Provisional) failure of a debtor or counterparty to meet its contractual obligation and the Measures for the Management of Capital Adequacy Ratios or commitment to the Group. of Commercial Banks. The scope for calculating capital adequacy ratios includes both the CCB domestic and overseas branches and In 2018, in face of the complex external operating environment, sub-branches, and financial subsidiaries (insurance companies the Group pushed forward an active and comprehensive risk excluded). management approach and strengthened efforts on credit risk prevention and mitigation. Furthermore, it improved the credit asset As at 31 December 2018, considering relevant rules for the structure and credit management mechanism. As a result, the asset transitional period, the Group’s total capital ratio, Tier 1 ratio and quality remained solid with steady improvement. Common Equity Tier 1 ratio, which were calculated in accordance with the Capital Rules for Commercial Banks (Provisional), were 17.19%, 14.42% and 13.83%, respectively, all in compliance with the Liquidity Risk Management regulatory requirements. The total capital ratio, Tier 1 ratio and Liquidity risk is the type of risk that occurs when the Group cannot Common Equity Tier 1 ratio increased by 1.69 percentage points, obtain sufficient funding in time and at a reasonable cost to repay 0.71 percentage points and 0.74 percentage points respectively debts when they are due, fulfil other payment obligations, or meet compared with those as at 31 December 2017. the other funding needs in regular business development. Liquidity risk arises from such major factors and events as significant drop in liquidation of current assets, massive outflow of wholesale or Risk Management retail deposits, decreasing access to wholesale and retail financing, In 2018, the Group made further efforts to improve the active and shorter financing periods, increasing financing costs, significant comprehensive risk management system. While strengthening risk adverse changes in market liquidity and breakdown of CCB’s management for the current period, it also reinforced anticipatory payment and settlement system. risk management, so as to boost the digitalized and refined risk management approach. The Group’s asset quality remained solid In 2018, The People’s Bank of China (PBC), through four targeted and kept improving while all types of risks continued to be stable, required reserve ratio cuts, maintained reasonable and sufficient as the Group’s comprehensive risk management capability further liquidity in the banking system, guided financial institutions to serve strengthened, thus safeguarded the Group’s prudent operations the real economy, and put forward higher requirements for targeted and innovation-driven development effectively. liquidity supply. The Group adhered to its prudent approach in liquidity risk management and a sound risk management framework, The Board carries out the risk management responsibility pursuant actively adapted to monetary policy adjustments of the PBC, made to the Articles of Association of CCB and other related regulatory forward-looking arrangements targeting internal and external requirements. The risk management committee under the Board is changes in the funding landscape and forms, and ensured smooth responsible for making risk management strategies, monitoring their access to sources and use of funds. It also refined the cash flow implementation, and evaluating the overall risk profile on a regular forecasting model and enriched the stress testing scenarios. By basis. The Board reviews the statements of risk appetite regularly, virtue of the application of fintech and big data, the Group improved sets the appetite as the core component in the risk management the refined liquidity management in an active and comprehensive structure, and incorporates it into and communicates it through manner, to ensure its security in payment and settlement. relevant capital management policies, risk management policies and business policies, to ensure that the business operations of the Bank adhere to the risk appetite. The board of supervisors oversees Market Risk Management the building of the comprehensive risk management system, as Market risk is the risk of loss in respect of the Group’s on and off- well as the performance of the Board and the senior management balance sheet activities, arising from adverse movements in market in delivering their comprehensive risk management responsibilities. rates, including interest rates, exchange rates, commodity prices
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 17 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
and stock prices. Interest rate risk and exchange rate risk are the In 2018, the Group continued to improve its reputational risk main market risks faced by the Group. management system and mechanisms, and enhanced its competence in managing reputational risks. The Group established In 2018, the Group took initiative to refine the long-term market a dedicated office for reputational risk management so as to risk management mechanism, strengthened the risk management enhance organizational guarantee and team building on this fundamentals of investment and trading business, responded front, and revised relevant management policies to clarify roles actively to fluctuations in foreign exchange, bond and stock and responsibilities. Based on economic capital measurement markets, and effectively prevented cross risk contagion. The of the reputational risk, the Group applied management tools to Group established a global risk information sharing system, and the assessment of tier-one branches, overseas branches and conducted monitoring and reporting over global financial market subsidiaries on reputational risk management and included the risks, enabling quick response to emergencies and major market assessment results into their KPI appraisal. It established a publicity fluctuations. To actively identify, alert and mitigate risks, the Group emergency response work group to enable early warning and set up supervision mechanisms for market risk management and mitigation measures on public opinions, and further strengthened in key areas of asset management business, and built a monitoring the cooperation of public opinion monitoring between the head indicator system of key risks for investment and trading business. office and branches, between the Group and subsidiaries, and By incorporating bonds underwriting and custody businesses between domestic and overseas institutions to achieve surveillance into comprehensive risk management, the Group consolidated its of sensitive information from different media on a 24/7 basis. During risk management for new products, new businesses and agency the reporting period, the Group steadily improved its reputational businesses, and achieved consistent risk appetite across business risk management capabilities, and effectively safeguarded its good segments and aligned risk management in domestic and overseas corporate image and reputation. operations. The Group strictly implemented the new regulations on asset management and established a full-process risk management and control mechanism through the implementation of unified credit Country Risk Management line and reinforcement of penetrative management. Eventually, Country risk refers to the risk of losses in the physical outlets, market risk management ability was greatly improved. equipment, facilities or other losses to the Group in a country or a region or other losses the Bank suffers as a result of insolvency or refusal of borrowers or debtors in a country or a region to repay their Operational Risk Management debts to the Group, due to the economic, political, social changes Operational risk is the risk of loss due to inadequate or flawed and events in such country or region. internal processes, personnel, systems, or external events. In 2018, CCB reviewed country risk ratings and limits in a timely In 2018, the Group strengthened statistics on non-compliance losses manner in response to the changes in international situations. It and post management, continuously improved the management of improved the monitoring mechanism for country risk exposures, internal operational risk, promoted the application of management implemented stress testing on country risks, and issued the country tools, and took various measures to reduce the losses, as to meet risk assessment report on a regular basis. As a result, it steadily relevant requirements of internal risk management and external enhanced its competence in mitigating country risk, safeguarding regulatory compliance. its international business operations.
The Group strengthened the statistical analysis of non-compliance losses such as regulatory penalties and credit violations, developed Consolidated Management of CCB relevant system functions and reduced operational risk losses Corporation Group caused by non-compliances. It re-examined and adjusted the Consolidated management is the CCB’s on-going comprehensive manual on incompatible positions to enhance the counterbalance management and control over the corporate governance, capital of different positions. It made arrangements for job rotation and finance of the Group and the subsidiaries, which enables CCB and mandatory vacation of important positions to strengthen to effectively identify, measure, monitor and control the overall risk internal control capabilities. It also selected key areas to carry out profile of the Group. self-assessment of operational risk to improve operational risk prevention and control. Moreover, the Group continued to promote In 2018, CCB proactively implemented the latest requirements of its emergency planning and drills for key businesses in the “New the CBIRC for consolidated management, improved the Group’s Generation” core banking system to improve its capability in consolidated management system, and enhanced the planning and response to business disruption emergencies. coordination, in order to prevent cross-border and cross-industry operation risks at the group level and strengthen its consolidated management standard. Reputational Risk Management Reputational risk is the risk of potential or actual negative impact on or damage to CCB’s overall image, reputation and brand value, when certain aspects of the commercial bank’s operational, managerial or other behaviors or events attract media attention or coverage.
Annual Report 2018 18 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
Shares Highlights
Graph of Shares Price and Volume of Bank CCB Indonesia (MCOR) throughout 2018
Shares Price Shares Volume
250 70.000.000
60.000.000 200
50.000.000
150 40.000.000
30.000.000 100
20.000.000
50
10.000.000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Adj Close Volume
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 19 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Shares Price Throughout 2018
Highest Price Lowest Price Closing Price Period Total Transaction Volume (in Rupiah) (in Rupiah) (in Rupiah)
January 246 212 232 270.184.900
February 244 210 222 226.003.000
March 230 196 202 184.391.100
April 216 197 198 57.833.700
May 210 170 200 57.918.200
June 204 185 187 22.509.300
July 198 175 180 35.403.900
August 183 170 173 17.813.400
September 185 150 185 87.241.900
October 185 149 160 30.431.600
November 159 139 148 31.190.700
December 148 138 142 83.304.000
Year 2018 Year 2017 Shares Price (in Rupiah) Opening Highest Lowest Closing Price Opening Highest Lowest Closing Price
First Quarter 214 246 196 202 148 356 145 294
Second 204 216 170 187 296 300 222 274 Quarter
Third Quarter 184 198 150 185 252 282 204 206
Fourth 185 185 138 142 210 246 202 214 Quarter
Year 2018 Year 2017
Shares Volume Highest Lowest Highest Lowest
First Quarter 44.230.200 - 679.894.500 902.800
Second Quarter 9.369.900 - 232.466.600 6.569.300
Third Quarter 60.479.800 - 94.683.600 3.897.000
Fourth Quarter 57.034.800 - 96.236.100 1.081.300
Annual Report 2018 20 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
Shares Performance (in Rupiah) 2018 2017 Market Capitalization 2018 2017
Highest Price 246 356 First Quarter Rp 3.325.959.926.300 Rp 4.840.753.556.100
Lowest Price 139 145 Second Quarter Rp 3.078.982.704.050 Rp 4.511.450.593.100
Price at the end of the year 142 214 Third Quarter Rp 3.046.052.407.750 Rp 3.391.820.518.900
Basic Earnings Per Share 5.40 3,00 Fourth Quarter Rp 2.338.051.037.300 Rp 3.523.541.704.100
Chronology of Shares Listing
Shares Listed Nominal Additional Paid-up Recording Date Description/Corporate Actions on the Indonesia Value New Shares Share Capital Stock Exchange (Rp)
April 16th, 2007 Capital prior to Initial Public Offering (IPO) - 1.429.245.170 - 100
July 3rd, 2007 Initial Public Offering (IPO) 300.000.000 1.729.245.170 1.711.952.718 100
Merger (Shares Conversion of PT Bank Multicor, Tbk January 8th, 2008 1.013.000.000 2.742.245.170 2.714.802.718 100 into PT Bank Windu Kentjana International, Tbk)
Limited Public Offering I to the Company’s Shareholders on the issuance of July 2010 1.014.630.713 3.756.875.883 3.719.307.123 100 Pre-emptive Rights (HMETD) to the Shareholders with offering price amounting to Rp 200 per share.
Limited Public Offering II to the Company’s Shareholders on the issuance of July 2012 Pre-emptive Rights (HMETD) to the Shareholders 525.962.624 4.282.838.507 4.240.010.121 100 with offering price amounting to Rp 200 per share along with the issuance of Series I Warrant
July - November 2013 Conversion of 5,283 Series I Warrant into Shares 5.283 4.282.843.790 4.240.015.404 100
Limited Public Offering III to the Company’s Shareholders on the issuance of December 2013 Pre-emptive Rights (HMETD) to the Shareholders 1.627.480.640 5.910.324.430 5.851.221.186 100 with offering price amounting to Rp 125 per share along with the issuance of Series II Warrant
May - December 2014 Conversion of 570,000 Series I Warrant into Shares 570.000 5.910.894.430 5.851.791.186 100
Conversion of 587,404,171 Series I Warrant and January - December 2015 625.392.105 6.536.286.535 6.460.737.221 100 37,987,934 Series II Warrant into Shares
Conversion of 11,453,773 Series II Warrant into January – July 2016 11.453.773 6.547.740.308 6.482.262.901 100 Shares
Limited Public Offering IV to the Company’s Shareholders on the issuance of July 25th, 2016 10.083.519.837 16.631.260.145 16.456.934.930 100 Pre-emptive Rights (HMETD) to the Shareholders with offering price amounting to Rp 100 per share
September – December 2016 Conversion of 200,606 Series II Warrant into Shares 200.606 16.631.460.751 16.366.239.742 100
Throughout 2018, there were no additional new 2018 - 16.631.460.751 16.366.239.742 100 shares
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 21 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Financial Highlights
(in million rupiah)
BALANCE SHEET 2018 2017 2016 2015 2014
Total Assets 15,992,475 15,788,738 12,257,391 10,089,121 9,769,591
Loans 11,550,654 10,109,907 8,229,793 7,260,917 6,908,478
Securities 1,444,197 1,434,563 924,789 1,069,053 1,337,857
Placement with Other Banks - - -
Customer Funds 13,073,223 12,713,399 9,518,000 8,359,702 8,188,680
Deposits from Other Banks 94,993 313,930 167,589 165,237 184,455
Equity 2,516,158 2,443,795 2,396,184 1,413,732 1,221,079
Liabilities 13,476,317 13,344,925 9,861,207 8,675,389 8,548,512
STATEMENT OF PROFIT AND LOSS 2018 2017 2016 2015 2014
Interest Income 1,240,762 1,147,285 1,067,322 1,000,742 899,099
Net Interest Income 587,366 574,737 477,223 375,536 296,502
Other Operating Income 77,481 39,754 28,551 23,798 21,842
Other Operating Expenses 470,404 476,313 417,802 292,786 250,025
Operating Income 128,567 73,653 75,986 91,985 64,779
Non-Operating Income (Expenses) 7,051 1,664 3,549 4,543 6,703
Income Before Tax 135,618 75,317 79,445 96,528 71,482
Net Income (Loss) 89,860 49,899 22,178 67,378 52,901
Income Attributable to Owners of the Company 89,860 49,899 22,178 67,378 52,901
Income Attributable to Non-Controlling Interests - -
Comprehensive Income (Loss) 72,363 47,611 14,237 67,953 185,952
Comprehensive Income Attributable to Owners of 72,363 47,611 14,237 67,953 185,952 the Company
Comprehensive Income Attributable to Non------Controlling Interests
Earnings per Share (in full Rupiah) 5.40 3.00 2.24 10.86 8.95
ASSETS QUALITY 2018 2017 2016 2015 2014
Earning Assets 13,431,364 13,270,096 10,660,754 8,343,953 7,904,627
Non-Earning Assets 182,378 297,940 150,119 30,083 8,864
Total Earning and Non-Earning Assets 13,613,742 13,568,036 10,810,873 8,374,036 7,913,491
Annual Report 2018 22 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
FINANCIAL RATIO (%) 2018 2017 2016 2015 2014
Capital
CAR Credit Risk 16.83% 16.76% 20.69% 17.68% 15.20%
CAR Credit and Market Risks 16.76% 16.66% 20.69% 17.63% 15.14%
CAR Credit Market and Operational Risks 15.69% 15.75% 19.43% 16.39% 14.15%
Fixed Assets to Capital Ratio 27.18% 31.99% 21.04% 21.50% 25.15%
Assets Quality
Non-Performing Earning and Non-Earning Assets 2.49% 2.19% 2.18% 1.54% 2.01% to Total Earning and Non-Earning Assets
Non-Performing Earning Assets to Total Earning 2.18% 2.34% 2.34% 1.68% 2.37% Assets
Allowance for Impairment Losses of Financial 0.99% 0.68% 0.63% 0.35% 0.30% Assets to Earning Assets*
NPL Gross 2.54% 3.07% 3.03% 1.98% 2.71%
NPL Net 1.62% 2.26% 2.48% 1.63% 2.43%
Profitability ROA 0.86% 0.54% 0.69% 1.03% 0.79% ROE 4.31% 2.46% 1.16% 6.21% 5.28% NIM 4.26% 4.69% 4.48% 4.44% 3.76% BOPO 90.60% 93.45% 93.47% 90.70% 93.19% Liquidity LDR 88.35% 79.49% 86.43% 86.82% 84.03% Compliance Violation of Legal Lending Limit a. Related Party 0.00% 0.00% 0.00% 0.00% 0.00% b. Unrelated 0.00% 0.00% 0.00% 0.00% 0.00% Exceedances of Legal Lending Limit a. Related Party 0.00% 0.00% 0.00% 0.00% 0.00% b. Unrelated 0.00% 0.00% 0.00% 0.00% 0.00% Statutory Reserves Requirement in Rupiah 7.19% 7.88% 7.61% 7.60% 8.22% Statutory Reserves Requirement in Foreign Cur- 9.35% 10.52% 9.03% 10.54% 8.33% rency Net Open Position 1.40% 1.10% 0.94% 0.05% 0.22% Others Liability to Equity Ratio 535.59% 546.07% 411.54% 613.65% 700.69% Liability to Assets Ratio 84.27% 84.52% 80.45% 85.99% 87.51%
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 23 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Significant Events 2018
January 2018
• CCB Indonesia participated in the ERA Indonesia - National Business Conference XXVI event on January 24, 2018, ERA Indonesia is one of the largest Property Agents in Indonesia who has established cooperation with CBB Indonesia
February 2018
• The Bank held an Extraordinary General Meeting of • CCB Indonesia held banking education and financial literacy in Shareholders (“EGMS”) on February 2, 2018 at the Seminar SME Tower, South Jakarta, on February 28, 2018, in order to Room, Indonesia Stock Exchange Building, Jakarta. assist SME customers and small entrepreneurs in the growth and success of their businesses. Besides that the education • The Bank held its routine Blood Donation on February 8, 2018. participants were also given knowledge of the sustainability The program is regularly held every 3 months in cooperation of the program, which was essentially a concern for the with the Indonesian Red Cross, held at Multifunction Room, environment and social. Head Office, Jakarta.
• On February 24, 2018 CCB Indonesia also participated in the Century21 Indonesia event - Annual Awards & Recognition Night 2018, Century21 Indonesia is one of the leading Property Agents in Indonesia who have collaborated with CBB Indonesia.
Annual Report 2018 24 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
March 2018
• CCB Indonesia was invited as a guest speaker at the 2018 Property Outlook Talkshow, held by Developer Daan Mogot City Bank on March 22, 2019
April 2018 May 2018
• CCB Indonesia in cooperation with AREBI [Indonesian Real • The Bank held its routine Blood Donation again on May 2, 2018. Estate & Broker Association] DPD Banten held a Mortgage The program is regularly held every 3 months in cooperation with Seminar entitled “Mastering Mortgage Knowlegde to Maximize the Indonesian Red Cross, held at the Head Office Multipurpose Your Business Potential” on April 23, 2018 which was attended Room in Jakarta. by approximately 500 participants of property agents.
• CCB Indonesia provided education on banking products, • The Bank again visited Metta Maitreya School, Pekanbaru on especially for mortgage products, to marketing of property April 27, 2018 in order to educate basic banking knowledge agents at LJ Hooker Indonesia on May 24, 2018. early, especially to encourage saving habits for children, with 70 participants. • The Bank held the Annual General Meeting of Shareholders (AGMS) for the fiscal year 2017, followed by a Public Expose, held • On April 27, 2018 a Signing of the Memorandum of Understanding at the Seminar Room, Indonesia Stock Exchange, Jakarta, on was held between CCB Indonesia with DPP AREBI [Real Estate May 30, 2018. & Broker Association of Indonesia] - “Marketing Cooperation for Mortgage products with Property Agents that already have a Trade Intermediary Business License”.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 25 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
July 2018
• In the framework of sustainable greening program, especially in • In order to encourage interest in saving at an early age by arid areas, the Bank contributed to watering in the dry season educating basic banking knowledge for children, the Bank again on litchi trees in Sindukarto village and Sumberharjo village, held a visit to SDN 1 Kebon Jeruk Bandar Lampung, with 200 District Eromoko, Wonogiri, Central Java, for July - October 2018 paticipants, on July 17, 2018 period. In the last 4 years Banks donated the seeds of longan trees for both villages, for the reforestation of which the result • The Bank held visit and provide assistance to Grahita, Bhakti is exploited by local residents. Luhur Orphanage, Sleman, Central Java, on July 26, 2018, which care for children with special needs. On July 27, 2018 the Bank also made a social visit to Brayat Pinuji Orphanage, Boro, Yogyakarta, which cared for around 60 orphans.
August 2018
• For the social action of humanity “CCB Care” on December 21, • The Bank again held a social event namely Blood donation on 2018, the Bank participated in providing social assistance to August 9, 2018 in cooperation with Indonesian Red Cross, held earthquake victims in Lombok on August 4, 2018 at Multifunction Room, Head Office, Jakarta
• CCB Indonesia signed a Cooperation Agreement with Developer Puri 8 Residence on August 8, 2018 as in order to increase mortgage growth.
Annual Report 2018 26 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
September 2018
• In order to provide education regarding mortgage products, CCB Indonesia held a Property Agent Gathering on September 20, 2018 discussing the New Regulation regarding the provisions of LTV, Bank Mortgage Loan Assessment from Point of View and Government Regulation Update, with 2 speakers from CCB Indonesia, Mr. Chandra Bachtiar and Mr. Jusry S. Hausjah, and Senior Notary, Mrs. Kristina Halim
October 2018
• The Bank held again an Extraordinary General Meeting of • In order to encourage interest in saving at an early age by Shareholders (“EGMS”) on October 10, 2018 at the Seminar educating basic banking knowledge for children, the Bank again Room, Indonesia Stock Exchange Building, Jakarta. held a visit to Kalam Kudus School, Makassar on October 22, 2018.
• Through the Indonesia Stock Exchange, on 15 October 2018 the Bank also participated in providing social assistance to victims • The Bank made a visit again to Budi Luhur School, Sukabumi of natural disasters - earthquakes and tsunamis in Palu and on October 22 and 25 2018, each with 30 and 35 participants, Donggala, Central Sulawesi. namely providing education on basic banking knowledge for children to encourage interest in saving at an early age.
• For humanitarian social acts, “CCB Care”, on 26 October 2018 the Bank held a visit and provided school assistance for the Kasih Bunda Sejati Foundation, Tambora, Jakarta, which provides education for children with special needs.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 27 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
November 2018
• On November 3, 2019 in the context of Corporate Social • On November 8,, 2018, the Bank again held a “CCB Care” Responsibility, the Bank held a social visit and provided social event in the form of Blood donation in cooperation with assistance directly to refugee camps victims of natural disasters Indonesian Red Cross, held at Multifunction Room, Head Office, - earthquakes and tsunamis in Palu and Donggala, Central Jakarta Sulawesi.
December 2018
• In the framework of corporate social responsibility on August • On December 20, 2018, the Company held banking education 11, 2018 Bank again held a visit and provide assistance to Ria and financial literacy in SME Tower, South Jakarta, in order to Pembangunan Elderly Home, Cibubur. assist SME customers and small entrepreneurs in the growth and success of their businesses. Besides that the education participants were also given knowledge of the sustainability • The bank held a greening program in a barren area by planting of the program, which was essentially a concern for the 400 sapodilla tree seeds on the slopes of Sindukarto Village, environment and social. Wonogiri, Central Java. The goal is to avoid erosion, and grow greenery, then the sapodilla fruit will later be enjoyed by the people there. This is a Phase III greening program, previously in the last 4 years planting of longan plants has been carried out in Sumberharjo Village and Sindukarto Village.
Annual Report 2018 28 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 29 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Awards
Annual Report 2018 30 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
February 2018 Receipt of “The Best CSR for Indonesian Public Banks in Gold category - Rank 6” Award by Economic Review
November 2018 Receipt of “The Best Public Bank (non-state owned) category BUKU II in Indonesia - Rank 2” Award by Economic Review
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 31 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Strategic Direction
The Bank’s direction is adjusted and in line with current government programs for financing for infrastructure and supporting the development of the SME sector.
Based on the source of the Financial Services Authority, OJK Outlook • Periodic capital increase to ensure adequate CAR for business 2018 estimated economic growth (GDP) 5.2 – 5.3% with 2018 development. inflation rate projected to be controlled at 3.5 – 4% level. Aggregate • Consistent in improving the implementation of good corporate loan growth is estimated at 10-13% and Third Party Funds at 8-10%. governance (GCG) and enhance the risk management system to CCB Indonesia in the short and medium term directed business advanced level. policy on business improvement especially in corporate banking, • Optimizing existing offices, towards developing digital banking. the implementation of good corporate governance, development of IT system, encourage process effectiveness and cost efficiency, • Improving the quality of human capital by increasing the scale of and improve professionalism and competence of human capital. training programs and more diverse development opportunities. The Bank’s policy direction is adjusted and in line with current • Strengthening IT system infrastructure to improve the government programs for financing for infrastructure and effectiveness, efficiency and business capabilities of banks. supporting the development of the SME sector. Development and utilization of technology to minimize risk, The forward-looking strategic direction aimed at : facilitate control, AML functions and anti-fraud as well as products and services development. • Accelerating business development in the corporate banking segment, along with the Small and Medium Enterprises (SME) and consumer banking segments.
Annual Report 2018 32 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 33 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Report of Board of Commissioners
Annual Report 2018 34 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
Throughout 2018, the Board of Commissioners assessed that the Board of Directors and the management have carried out steps in accordance with their duties, responsibilities, and authorities.
By praising God Almighty, the Board of Commissioners submits The Board of Commissioners has a BOC Charter which covers Work the Board of Commissioners report on the performance of CCB Ethics, Work Time and Meetings, Duties and Responsibilities, Rights Indonesia in 2018. and Authorities, Work Relations, Performance Assessment and Evaluation. Based on the results of supervision and evaluation, in general, the Board of Commissioners draws the conclusion that the Board of Board of Commissioners also has Guidelines for Conducting the Directors and management have carried out steps in accordance Board of Commissioners Meeting based on Financial Services with their duties, responsibilities, and authorities. Authority Regulation No. 33/POJK.04/2014 dated December 8th, 2014 on the Board of Directors and Board of Commissioners of The Board of Commissioners considered that the achievements of Issuers or Public Companies, and Board of Commissioners Charter performance in 2018 were generally good, especially in terms of which includes Performance Assessment and Evaluation of the profitability and credit quality, meanwhile, an increase in business Board of Commissioners. volume and efficiency is still needed to be considered in the future. The Board of Commissioners constantly monitors the factors The management has implemented the principle of prudence in that affect the Bank healthiness namely Risk Profile aspects, GCG business development, thus the level of growth in business volume implementation, Profitability, and Capital, while encourages the was relatively in accordance with the business plan. management so that the targets compiled in the Bank's Business Plan can be embodied. In general, the Bank has been able to The assessment result of the Risk-Based Bank Rating in December fulfill the provisions of the Financial Services Authority and other 2018 was a composite rating with a score of "2", reflecting the authority regulations. condition of the Bank which generally healthy, so that it was considered able to deal with significant negative effects of changes Profit Before Tax in 2018 increased significantly by 80.06% to Rp136 in business conditions and other external factors, taking into billion when compared to the previous year, or slightly below the account the assessment factors such as risk profile, good corporate business plan, reaching 98.43%. As of December 2018, Return governance implementation, profitability, and capital. on Assets (ROA) amounting to 0.86% and Return on Equity (ROE) amounting to 4.31%. The credit quality ratio also showed good At the Annual General Meeting of Shareholders dated May 30th, performance with a gross NPL amounting to 2.54% from the initial 2018, there was a change in the composition of the Board of target of 2.90%. Commissioners namely the President Commissioner, Mr. Yang Aimin, which was replaced by Mr. Sun Jianzheng. For the resignation of Mr. Although the performance of profitability and credit quality was Yang Aimin, the Company would like to extend its gratitude for his good in 2018, the increase in business volume was still below than services to the Company so far. the business plan target. The Management tends to be cautious and conservative in its expansion considering that external conditions For information, the appointment of Mr. Sun Jianzheng, has obtained have not been fully conducive. Total Assets as of December 2018 approval from the Financial Services Authority dated January 22nd, amounting to Rp16 trillion, or reaching 88.33% of the business 2019. plan target. Loan distribution rose by 14.25% compared to last year amounting to Rp11.5 trillion as of December 2018 or reaching In order to support the business policy of the bank which has been 91.98% of the business plan. Third-Party Funds as of December 2018 established in the implementation of the Company's supervisory amounting to Rp13.1 trillion, or reaching 93.69% of the initial target. duties, the Board of Commissioners, assisted by the Audit The level of public trust in the Bank was well maintained. Committee, Risk Monitoring Committee, and the Remuneration and Nomination Committee, always encourages the Company's Bank Capital as of December 31st, 2018 amounting to Rp2.52 trillion, performance by improving the internal control functions, evaluating increased by 2.96% year on year compared to last year. Capital the formulation and implementation of policies in the field of risks Adequacy Ratio (CAR) as of December 2018 reached 15.69% while as well as evaluating and providing input on remuneration and the business plan amounting to 16.23%. nomination policies to the Board of Directors.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 35 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Based on the Financial Services Authority sources in "OJK Outlook amounting to 92.66%, Gross Non-Performing Loan (NPL) ratio target 2019", it was estimated that economic growth will reach a GDP of amounting to 2.85% and projected Capital Adequacy Ratio (CAR) 5.2-5.3% with an inflation rate of 3.5-4%. Aggregate credit growth amounting to 33.48%. was estimated at 10-13% and Third Party Funds around 8-10% in 2019. The Board of Commissioners considers that the Company is still very prospective and the upcoming strategic policy steps prepared by The management strategy in 2019 is focused on the development of the Board of Directors through the Bank's Business Plan are good the corporate banking segment, especially infrastructure financing and realistic on the Bank's internal and external conditions. Business in accordance to the expertise of CCB, in addition to the Small and strategies that have been reported to the Board of Commissioners Medium Enterprises (SMEs) and consumer loans. Besides that, by the Board of Directors include increasing business volume CCB continues to improve the implementation of good corporate while upholding the principle of prudence, and improving the governance, IT systems development, encourages process implementation of Good Corporate Governance. effectiveness and cost efficiency and improves the human capital quality. Finally, on this occasion, we express our gratitude for the results of the Board of Directors hard work and appreciation to the In 2019, the Bank plans to increase its capital to become a Bank in Shareholders, Employees, Customers, Business Partners, General the Commercial Bank's Business Activities (BUKU) III. Communities, Banking and Capital Market Authorities, as well as other stakeholders for their trust and great support to CCB The projected increase of total assets amounting to 30.95%, credit Indonesia. May God Almighty always guide and protect all of us, so growth amounting to 10.69% and increase in Third Party Funds that we can look forward to the future optimistically. amounting to 5.54%. The projected Loan to Deposits Ratio (LDR)
Board of Commissioners,
Sun Jianzheng President Commissioner
Qi Jiangong Mohamad Hasan Yudo Sutanto Commissioner Independent Commissioner Independent Commissioner
Annual Report 2018 36 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
Report of Board of Directors
The Bank focused on business growth, especially Corporate Banking Loans, improving asset quality, improving the Bank’s health level including risk management and GCG, optimizing liquidity conditions and improving the quality of human resources.
The global economy grew sluggishly and unevenly, accompanied by Meanwhile, exports are predicted to remain limited due to the uncertainties in the global financial market that remain high. The US declining of global economic growth and the declining prices of economy which grew strong in 2018 was expected to experience a Indonesian export commodities. Meanwhile, imports began to consolidation in 2019. However, expectations of US inflation remain decline in line with the policies pursued. high, so the Fed is predicted to continue increasing its policy rates. With developments that tend to strengthen towards the end of 2018, China’s economic growth continued to slow down as a result of the the overall average Rupiah exchange rate in 2018 was recorded to weakening of consumption and net exports, among others, due to have depreciated by 6.05%, or point to point by 5.65% compared to continued tensions in trade relations with the US. the level of the previous year. The 2018 inflation rate remained under control at a low level and was recorded at 3.13% (yoy). Amid the global economic slowdown trend, Indonesia’s economic growth remain strong, and the overall in 2018 was at around 5.2%. The position of foreign exchange reserves at the end of December Various economic growth indicators for the fourth quarter of 2018 was quite high amounting to US$120.7 billion or equivalent 2018 showed that domestic demand remained strong supported to 6.7 months of imports financing or 6.5 months of imports and by consumption, both private consumption and Government Government foreign debt payments and was above the international consumption. adequacy standards for around 3 months of imports. *)
Source: Bank Indonesia Monetary Policy Review January 2019
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 37 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
The 2018 period, the Bank focused on restructuring the Throughout 2018, there were several changes in the composition organizational system and structure, which will be the basis for of the Board of Directors, including: at the Extraordinary General further development of this Bank. In the consolidation period after Meeting of Shareholders (EGMS) dated February 2nd, 2018 was the entry of China Construction Bank as a controller, the Bank appointed Mr. You Wen Nan as President Director and Mr. Zhu Yong as continues to develop business conservatively. Development and Director. Mr. You Wen Nan has obtained approval from the Financial improvement of processes in all work units to ensure all work units Services Authority dated April 30th, 2018, and Mr. Zhu Yong was function optimally. approved by the Financial Services Authority on January 8th, 2019.
Throughout 2018, financial performance showed a number of At the Annual General Meeting of Shareholders dated May 30th, positive financial ratio indicators with limited business volume 2018, Mr. Adri Triwitjahjo and Mrs. Dewi Arimbi Kurniawati resigned growth. from their positions as Directors. The Company would like to extend its gratitude for their contribution to the Company while working. At Profit Before Tax of the Bank in 2018 amounting to Rp136 billion, the same GMS, was appointed Mr. Chandra N T Siagian as Director, year on year increased significantly by 80.06% compared to last year which has obtained approval from the Financial Services Authority amounting to Rp75 billion, or reaching 98.43% of the initial target. dated November 16th, 2018. The achievement of profitability ratios, namely Return on Assets (ROA) and Return on Equity (ROE) as of December 2018 were 0.86% Furthermore, as information, at the Extraordinary GMS dated and 4.31% respectively compared to business plan targets of 0.81% January 7th, 2019 has been appointed Mr. Agresius Kadiaman as and 4.73% respectively. Net Interest Margin (NIM) amounting to Director and has been approved by the Financial Services Authority 4.26% of the initial plan amounting to 4.29%. on February 1st, 2019.
Total Assets year on year as of December 2018 rose limitedly by The assessment result of Risk-Based Bank Rating in the second 1.29% from the position of Rp15.8 trillion to Rp16 trillion, or 88.33% of semester of 2018 obtained a composite grade of “2”, reflecting that the business plan target. in general the Bank Soundness is ‘Good’ and considered capable to withstand significant negative influences of any changes in business Loan distribution increased 14.25% year on year from the position of condition or other external factors, by taking into consideration of Rp10.1 trillion as of December 2017 to Rp11.5 trillion as of December assessment factors such as risk profile, implementation of good 2018, or reaching 91.98% of target. The credit quality remained well corporate governance, profitability and capital. maintained with gross NPL ratio amounting to 2.54% of the initial target of 2.90%. CCB Indonesia has a commitment to preserve the environment in daily operational activities of the Company, including maintaining The growth of Third Party Funds year on year rose by 2.83% from the cleanliness of the environment around the office, distributing Rp12.7 trillion to Rp13.1 trillion as of December 2018, or reaching loans to parties who care about the environment (green company), 93.69% of the business plan. Provision of interest rates to depositors and implementing greening programs, as well as Financial Literacy remained at a reasonable level, along with the level of public trust in program. the Bank that remained well maintained. The Board of Directors has Guidelines for Conducting the Board The Bank’s capital year on year at the end of 2018 increased by of Directors Meeting based on the Financial Services Authority 2.96% from Rp2.4 trillion at the end of 2017 to Rp2.5 trillion as of Regulation Number 33/POJK.04/2014, dated December 8, 2014 December 2018. The Capital Adequacy Ratio (CAR) as of December about Board of Directors and Board of Commissioners of Issuers 2018 reached 15.69% of the business plan target of 16.23%. or Public Companies, and the Board of Directors Charter, that The challenges faced by CCB Indonesia throughout 2018 were includes the Assessment and Evaluation of the Board of Directors mainly the increasingly tight and competitive level of competition in Performance. the banking industry, both in terms of assets and liabilities, including OJK Outlook 2019 estimated that economic growth with a GDP of the margin spreads. The Bank always sets interest rates prudently 5.2-5.3% with 2019 inflation rate projected to remain under control at competitive and reasonable levels. at the level of 3.5-4%. While aggregate credit growth was estimated Position at the end of 2018, the Bank has 95 office networks, at 10-13% and Third Party Funds around 8-10%. consisting of 1 Head Office, 21 Branch Offices, 53 Sub-Branch In 2019, the growth of the Total Assets of Bank CCB Indonesia is Offices, and 20 Cash Offices, spread in cities in Indonesia such as targeted to increase by 30.9%, Loans increased 10.69%, while Third Jakarta, Bandung, Semarang, Yogyakarta, Surabaya, Denpasar Bali, Party Funds increased 5.54%, when compared to the end position Mataram Lombok, Palembang, Bandar Lampung, Batam, Pekanbaru, of 2018. Pontianak, Makassar and Pangkal Pinang. The projection of 2019 financial ratios includes LDR amounting The Board of Directors has a BOD Charter which covers Work to 92.66%, gross NPL ratio 2.85%, CAR amounting to 33.48%, NIM Ethics, Work Time and Meetings, Duties and Responsibilities, Rights amounting to 4.13%, ROA amounting to 0.90% and ROE amounting and Authorities, Work Relations, Performance Assessment and to 4.17%. Evaluation.
Annual Report 2018 38 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
In 2019, management policies and strategies are directed at cooperation that has been well established so far, so that the Bank accelerating business, especially in the corporate banking segment, is able to improve its performance. We also express our deepest in addition to continuing to develop Small Medium Enterprises gratitude to the Shareholders and Board of Commissioners who (SMEs) and consumer banking, implementation of good corporate have given us their trust to manage this Bank, and to all employees, governance, IT systems development, encouraging process a large family of CCB Indonesia with high dedication to participate effectiveness and cost efficiency, while improving professionalism together to advance CCB Indonesia. and competency of human capital. In 2019, the Bank plans to become a Bank in the Commercial Bank’s Business Activities (BUKU) III through additional capital.
On this occasion, the Board of Directors expressed the highest appreciation to all stakeholders for their trust and support, and the
Board of Directors,
You Wennan Zhu Yong President Director Director
Chandra NT Siagian Setiawati Samahita Director Director
Junianto Agresius R. Kadiaman Director Compliance Director
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 39 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Business and Functional Review
Sogan Decorative Batik
Sogan Batik used to be worn by Javanese kings, specifically from Solo Sultanate palace. But nowadays, it can be worn by anyone. The name “Sogan” came from the coloring process which was initially using natural dyes from Soga (Peltophorum pterocarpum) tree logs. 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Loan
Loan distribution is focused on the corporate banking segment, in addition to the Small and Medium Enterprises and consumption loan segments, with the support of China Construction Bank as the controller who has expertise and experience especially in infrastructure financing.
CCB Indonesia builds and maintains close and mutually beneficial to support business growth. CCB Indonesia has always been guided relationships with customers for sustainable long-term growth. by conservative principles and prudential banking principles. Loan distribution is focused on the corporate banking segment, Loan distribution is directed at sectors that are considered potential while continuing to develop the Small and Medium Enterprises as and prospective with a focus on the quality and level of ability to well as consumption loan segments. In this matter, CCB Indonesia repay debtor loans. Steps for distributing loans carried out by the utilizes the expertise of China Construction Bank, in terms of management are in accordance with government and the Financial infrastructure financing, which is in line with government programs Services Authority policies. In increasing the loan portfolio, CCB and helps the Indonesian economy in general. Indonesia distributes loans to various sectors such as trade, CCB Indonesia always maintains a diversified loan portfolio in industry, services, infrastructure, consumption, and others. various economic sectors, so that the spread of risk is relatively CCB Indonesia continues to drive the bank intermediation function good. Loan distribution is directed at sectors that are considered by taking into account liquidity, so that the Loan to Deposits potential and prospective with a focus on the quality and level of Ratio (LDR) position amounting to 88.35% as of December 2018. ability to repay debtor loans. Throughout 2018, loan distribution increased 14% from the position CCB Indonesia actively distributes loans to existing customers, as of Rp10.1 trillion as of December 2017 to Rp11.5 trillion as of December well as potential customers to expand and develop businesses, 2018. The realization of loan reached 91.96% from the business plan as well as working capital needs, and other needs. CCB Indonesia projections. Meanwhile, the quality of loan distribution remained continues to strive to be able to finance important industrial sectors well maintained with a gross NPL ratio of 2.54%.
Annual Report 2018 42 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
A number of business sectors are still considered prospective Commercial Loan including the infrastructure, telecommunications, transportation, consumption, services, trade, and manufacturing industry sectors Commercial loan distribution in CCB Indonesia is the granting of with domestic raw materials. loan facility, both for companies and individuals, for the needs of working capital and investment financing needs. Corporate Banking Working Capital is a loan facility provided to meet working capital needs that are depleted in one business cycle, and/or special The expansion of distribution to the corporate banking segment, working capital needs such as to finance inventory/ receivables/ in relation with the plan of new controller entry, CCB, which has projects/ or other special needs which according to the evaluation expertise and experience in handling corporate banking, especially of CCB Indonesia is feasible to be financed. for infrastructure financing and trade finance, particularly China • Loan limit as required corporations that invest and carry out business in Indonesia, State- • Loan may be given in Rupiah and foreign currency Owned Enterprises, and Indonesian conglomerate companies. • Period up to a maximum of one year and can be extended as Financing in the infrastructure sector is in line with current required government programs, by providing financial solutions for • Nature of loan either revolving or non-revolving government projects through regulating and participating in Investment is a loan facility provided to finance the needs of capital syndicated financing with CCB groups/ subsidiaries, as well as goods in the context of rehabilitation, modernization, expansion, externally with other banks; and the initiative to develop a “one belt establishment of new projects and/or special needs related to - one road” program in Indonesia. investment. The focus of industrial sectors for corporate banking includes: • Loan limit as required infrastructure, manufacturing, natural resources (oil and gas, • Loan may be given in Rupiah and foreign currency mining materials and others), transportation (sea, air, and land), • Long term period (more than 1 year) adjusted to the project plan irrigation systems, petrochemicals, telecommunications, waste CCB Indonesia’s commercial loan holds an important portion in recycling management, real estate/ property and power plants. fund distribution through loan. This shows the participation and Corporate Banking develops a number of existing products for contribution of CCB Indonesia in supporting the growth of the a larger scale such as investment loans, working capital loans, Indonesian economy by encouraging the growth of business sector syndicated loans, factoring, commodity financing, trade finance, in the community. export credit, Bank Guarantee, invoice financing and standby LC. CCB Indonesia’s loan distribution policy is guided by prudential Corporate banking loan products include Back to back loan, Bank banking principles. Increasing the loan portfolio to various potential Statement Loan, Syndicated Loan, Investment Loan, Project and quality businesses that support the growth of the Indonesian Financing Loan, Working Capital Loan, and trade finance products. economy remain to be spread evenly, thus avoiding concentrated risks. - Trade Finance is a financing facility for the needs of international export-import and local trade business transactions. Services are provided safely and efficiently with the support of CCB Consumer Banking Loan networks and global agency networks supported by a sophisticated and reliable global settlement system. The service In distributing consumer banking loan, CCB Indonesia implements coverage is as follow: a number of attractive program promos for customers, including > Import Service exhibitions and product promotions in public places, and provides > Issuance of Letter of Credit (L/C) and Documented Domestic special promotions for Mortgage Loan, CCB Indonesia also Letter of Credit (SKBDN) collaborates with a number of major developers in order to provide • Sight mortgage facility for consumers from the main developers. • Usance The increasing number of CCB Indonesia branch offices in various > Trust Receipt Financing cities in Indonesia has increased the competitiveness of CCB > Inward Documentary Collection (Import Non L/C) Indonesia in the consumer sector. In line with this, CCB Indonesia > Export Service develops innovative products and improves service quality. The > Advice Letter of Credit (L/C) and Documented Domestic level of customer needs continues to be monitored and the results Letter of Credit (SKBDN) become the basis for continuous improvement in products and > Collection Under Letter of Credit (LC) or and Documented services. Domestic Letter of Credit (SKBDN) > Post Shipment Financing In the midst of intense competition in the consumer sector, CCB Indonesia relies on a customer-oriented business model so as to be - Negotation able to provide innovative products according to consumer needs. - Discount Ease of access and premium quality service to customers and • Outward Documentary Collection (Export Non L/C) prospective customers with a focus on prospective areas as a • Bank Guarantee consumer loan marketing channel. • Bank Guarantee • Standby Letter of Credit (SBLC) • Counter Guarantee
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 43 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Small and Medium Enterprises Loan Data of Loan Based on Economic Sector The SMEs sector became the prima donna of loan distribution in in 2018 the banking industry, in addition to have extensive opportunities, proven to be relatively more able to survive in crisis situations that have occurred several times in Indonesia. Loan distribution to SMEs is also in line with government programs to encourage increased loan distribution to SMEs segment with wider risk spreading. Flexibility combined with conservative principles is the main foundation for this SMEs loan, the ability of personnel handling the loan is sharpened with the provision of special training.
Seen from the type of usage, the following is the loan classification as of December 31st, 2018 compared to the position of December 31st, 2017:
31 Dec 2018 31 Dec 2017 Type of Loan % % In Million Rupiah In Million Rupiah
Working 6.832,289 59.15% 6.144.465 60.78% Capital
Investment 3.861.709 33.43% 3.174.345 31.40%
Consumer 845.107 7.32% 773.641 7.65%
Employee 11.529 0.10% 17.456 0.17%
Total 11.550.634 100% 10.109.907 100%
In 2018, the loan of Bank CCB Indonesia was concentrated in the Wholesale and Retail sector (17.13%), Manufacturing Industry Manufacturing (16.53%), Real Estate (10.95%) as well as Accommodation, Food and Beverages (10.70%) while others were spread to various industrial Social, Art, Culture, Recreation and Other Services sectors. Bank CCB Indonesia always maintains a diversified loan Health and Social Services portfolio that is relatively spread to various economic sectors, so that the risk spreading is relatively good. Education Services
Construction
Loan Based on Collectibility Individual and Serving Household Services in million Rupiah Electricity, Gas, and Water
Accommodation, Food and Beverages
Description 2018 2017 Financial Intermediary
Current 10.984.028 9.624.591 Wholesale and Retail
Special Mention 272.945 174.507 Fishing
Sub Standard 6.588 37.320 Mining and Excavation
Doubtful 17.456 27.308 Agriculture, Hunting and Forestry
Loss 280.098 246.181 Real Estate, Leasing and Services
Total 11.550.634 10.109.907 Households
Transportation, Warehousing, and Communication
Defense Government Administration and Social Security Guarantee
Annual Report 2018 44 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 45 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Treasury, FI and International Banking
The role of the Treasury in CCB Indonesia includes assets and liabilities management, liquidity management, and the net open position (NOP) in accordance with applicable regulations.
Treasury also acts as a profit center through the trade of securities as asset management, insurance institutions and pension funds. and foreign exchange transactions, either for customer’s benefit or Determination of the transaction limit for FI facilities have also the benefit of the Bank. been using the counterparty scoring, so the risk exposure of banks maintained prudent. Treasury is actively and dynamically managing the Bank’s liquid assets portfolio to diversify its fund placement. The Bank conducts placement in the inter-bank market, Letter of Bank Indonesia and Corporate Bonds. This diversification has contributed to the Bank’s Trade Finance net interest income. In terms of trade transactions, CCB Indonesia has provided For foreign exchange transactions, Treasury is strengthening the Trade Finance products and services for local or international cooperation with the corporate and commercial segments to cover transactions, which can assist Customers in issuing Letter of Credit a larger client network. The diversity of products offered are also (LC), Domestic Letter of Credit (SKBDN), Bank Guarantee / Standby tailored to customer’s requirements. Thus, the Bank’s marketing Letter of Credit (SBLC) / Counter Guarantee, conduct Negotiation / strategy to market Treasury product solutions can be more optimal. Discount on LC / SKBDN documents and Documentary Collection, The Bank has offered Treasury service solutions in the form of and obtain financing in the form of Trust Receipt Financing and foreign exchange transactions of Spot, Forward, Swap and various Invoice Financing. For international transactions in collaboration hedging product solutions. with CCB networks in other countries, to increase the scope and quality of services to customers. Moreover, with the expansion of inter-bank network owned, Treasury is now participating more actively in the money market transactions and foreign exchange markets. Without ignoring the precautionary International Banking principle, Treasury is expected to provide optimal and sustainable income from this inter-bank market. In facing competitive business challenges, international scale professional services has been prepared in capturing opportunities Facing the existing economic challenges, Treasury is expected to serve transnational company business activities. (Transnational to continue in taking initiative to develop existing products and Company / TNC). businesses. The opportunities that exist will continue to be explored to provide a reliable solution of the needs of foreign exchange International banking services is provided to assist customers transactions and hedging customers. In the coming year, the Bank in carrying out various banking transactions. Various services will play an active role as market player for inter-bank money market at competitive costs and exchange rates, as well as the latest for local currency, IDR (Indonesian Rupiah) and CNY (Chinese Yuan). processing systems have been available to serve the customers.
The Bank continues to improve the structure of international trading services so as to provide services in accordance with customers Financial Institution/ FI expectations and needs.
Bank actively also play a role in providing the credit line and cooperation with financial institutions banks and non-banks such
Annual Report 2018 46 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 47 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Human Capital
CCB Indonesia as an institution engaged in financial services, places its human resources as the company’s capital. Human capital management as a strategic partner aims to foster business growth and support CCB Indonesia’s efforts to provide the best for all stakeholders.
In 2018, human capital management at the Bank was focused on In 2018 was also made a change in the organizational structure in improving the quality of manpower and filling vacant positions to order to improve the efficiency of coordination between functions, strengthen risk mitigation management and improve operational including the merging of the Special Asset Management Unit and support for business development. Improving the quality of the Loan Recovery Unit. manpower was carried out through training and official visits to CCB In supporting the improvement of human capital quality, the Corporation in Beijing and CCB Hong Kong mainly to learn about development in 2018 was directed at: processes and working patterns that apply in CCB globally. • Education to enhance risk awareness Human capital development is emphasized in training related to risk management such as risk management certification preparation, • Implementation of systematic and continuous education and online training related to risk management in general, and other training programs. mandatory certification training. Human capital development is • Cadre process for first line management positions, including the carried out through systematic and continuous education and employee promotion to fill strategic positions. training programs, where some training is carried out on the spot (in branch offices) to make it more targeted. • Ensure the implementation of rules and improve compliance with the applicable provisions and laws in the employment field.
Annual Report 2018 48 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Education and Training as well as Development of Bank The number of employees of the Bank as of December 2018 Personnel (excluding outsourced employee) was recorded at 1,381 people. The Bank outsourced part of the implementation of non-staff work, Employee training and development program became a special such as couriers, drivers, security, cleaning services to outsourcing concern in 2018, and still continues to be improved according to the service providers. As of December 2018, there were 298 outsourced needs in supporting the Bank’s business development. Throughout employees therefore the number of employees (including 2018, the Bank held 135 training programs with a total of 3,420 outsourced employee) amounting to 1,680 people. participants, compared to 2017 amounting to 327 training programs with 5,375 participants. Number of Employees Based on Employment Status The Bank has consistently carried out employee training programs and competency development, either carried out internally or 31 December 2018 31 December 2017 externally. The number of participants in education and training Employment Status programs throughout 2018 and 2017 are as follows: Total % Total %
Permanent Employee 1,239 90% 1,266 85% Number of Participants Type of Education and Training Probationary Employee 43 3% 44 3% 2018 2017 Contract Employee 100 7% 183 12% Internal Education 2.492 4.115 Number of Employees
External Training 928 1.260 (excluding Outsourced 1.382 100% 1.493 100% Employee) Total 3.420 5.375 Outsourcing Employees 298 306
Education and training programs held throughout 2018 with Number of Employees materials covering technical skills and soft skills, among others: Risk (including Outsourced 1.680 1.799 Management Certification, Bank Operations/ Standard Operating Employee) Procedures (SOP), Loan, IT, APU PPT Training, Compliance, Induction Program, Product Knowledge, Leadership, as well as various other Seminars and Workshops.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 49 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Employee Composition Based on Education Level Employee Composition Based on Age (excluding outsourced employee) (excluding outsourced employee)
31 Dec 2018 31 Dec 2017 31 Dec 2018 31 Dec 2017 Education Kelompok Usia Level Total % Total % Total % Total %
< Senior High 444 32% 497 33% < 25 years old 133 10% 178 12% School
Academy 179 13% 203 14% 25-34 years old 544 39% 603 40%
Bachelor 726 53% 754 51% 35-44 years old 341 25% 309 21%
Master 33 2% 39 3% > 45 years old 364 26% 403 27% Total 1.382 100% 1.493 100% Total 1.382 100% 1.493 100%
Employee Composition Based on Working Period Employee Composition Based on Position Level (excluding outsourced employee) (excluding outsourced employee)
31 Dec 2018 31 Dec 2017 31 Dec 2018 31 Dec 2017 Working Position Level Period Total % Total % Total % Total %
0-3 years 633 46% 608 41% Board of Directors 4 0% 7 0%
3-5 years 200 14% 233 16% Division Head/ Regional Head 30 2% 28 2%
5-10 years 267 19% 306 20% Area Manager/Office Head 88 6% 94 6%
10-20 years 93 7% 99 7% Department Head 179 13% 174 12%
> 20 years 189 14% 247 17% Officer 55 4% 47 3%
Total 1.382 100% 1.493 100% Staff 860 62% 963 65%
Non Staff 166 12% 180 12%
Total 1.382 100% 1.493 100%
Annual Report 2018 50 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Employee Composition Based on Age (excluding outsourced employee) Information Technology
Employee Composition Based on Position Level (excluding outsourced employee)
Information Technology as a driving force of business needs to be flexible and reliable which is able to follow the dynamics of CCB Indonesia development.
Development of Information Technology Systems of CCB Indonesia All the technological activites is implemented in a centralized and is performed in a sustainable manner, especially to provide integrated manner. convenience for customers in transactions. The IT systems development policy is consistently continued in the Information Technology (IT) as a driving force of business needs future that directs CCB Indonesia to have image transformation into to be flexible and reliable which is able to follow the dynamics of a modern bank, by providing convenience to customers in banking CCB Indonesia development. IT is also an important element in transactions, using the technology and sophistication of internet by supporting the bank’s operations. applying and improving the service of electronic delivery channels.
Consistently, CCB Indonesia is always working to improve the Developing a forward-looking information technology in order to quality of products and services, with the support of IT as a very support processes and services that are effective, rapid, accessible important instrument in realizing such efforts. The best use of and convenient, will be continued consistently. information technology is a key factor for the efficiency required in the processing of transactions, improving accuracy and providing In line with the merger of Bank Windu and Bank Anda, the IT is also satisfactory services to various banking needs of the customers. in the system integration process. Development of Information The synergy that is developed in the entire elements have led to the Technology Systems of CCB Indonesia is performed continuously sustainable growth of CCB Indonesia. adapted to the Company’s development, which is expected to provide optimal support to the operations of CCB Indonesia and to To realize short-term targets in Information Technology, the IT provide convenience for customers in conducting transactions in development needs to be supported by proper service provider the Bank’s counter or online. selection and appropriate technologies to achieve the set targets.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 51 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Risk Management
CCB Indonesia applies Risk Management with acceptable approaches in accordance with the level of risk faced. The application of risk management includes the identification, measurement, monitoring, and management of various types of risks in every decision and operational decision in each line of business and supporting functions.
All of the Bank’s risk policies follow and refer to the Financial Services Risk Management Framework Authority Regulations (POJK) and Bank Indonesia Regulations (PBI) as minimum provisions to guarantee the best administration. Risk management framework comprises of several management risk committees and work units, includes business line in various level The risk management policy at the Bank is aimed at safeguarding the of responsibility. The risk management organization includes active Bank’s capital, supporting the decision-making process, optimizing oversight from Board of Commissioners and Board of Directors. the risk profile, increasing the company’s value, and protecting the Bank’s reputation determined based on risk appetite by considering Risk Oversight Committee is the highest management authority that its capital capacity. situated on the level of Board of Commissioners. This committee functions as a supervisory board to oversight the implementation Bank manages the identified risks that can be quantified and of strategy and policy of risk management as well as evaluating measured in accordance with objective and consistent criteria. The the accountability of the Board of Directors in managing the risk main component of the Bank’s risk management approach is sound exposure. and comprehensive risk governance in identifying, measuring, controlling, monitoring and reporting risk. The bank is also able to Risk Oversight Committee is a committee at the level of Board of evaluate and assess the capital adequacy according to risk, has a Directors that is responsible to perform bank-wide risk management. reliable internal control system that involves internal and external This committee also functions to oversee the implementation of auditors, and checks from authorized supervisors strategy, policy and assessing significant risk problems. Board of Directors has the authority to manage risk, provide risk limit as Bank’s reference in taking risk, which is the Bank’s risk appetite.
Annual Report 2018 52 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
In addition, the bank has other directors’ committees in conducting Risk Management Strategy risk governance, namely the Credit Committee, Asset and Liabilities Committee (ALCO), Information Technology Steering Committee, Due to the importance of risk management, Bank CCB Indonesia has Credit Policy Committee. Each committee performs tasks based to ensure that the strategy and implementation of risk management on the mandate that has been set. These committees hold regular structure should be adaptive, easily understood and executed by all meetings to assess and discuss risk issues faced by Bank in carrying lines. Bank composes strategic measures to execute and develop out its operational activities. the risk management system, such as :
Risk Management Work Unit (RMWU) carries out daily risk • Setting up committees thatactively monitoring the risk management activity, which is independent from any operational management business work but able to be a partner to match as controlling • Risk management policy is prepared based on banking regulator for the business work unit to gain optimal business growth that on Risk Management for Public Banks and by considering the emphasizes the principle of prudence. RMWU has the authority to recommendation from Basel Committee on Banking Supervision investigate and evaluate the performance of the business units as well as the market best practices. and operational units in the relation to the management of risk contained in the Bank. RMWU provides strategic recommendations • Ensuring that bank CCB Indonesia has applied a prudent and related to risk management application intensively to Board of conservative approach in developing its business and the Directors through Risk Management Committee (RMC) for better execution of other supporting operational implementation. consideration in the future. • Stipulating risk appetite, parameter and internal risk limits to enhance Bank’s ability to identify, calculate, monitor and control risk that reflect the risk tolerance level. Risk Management Implementation • Developing risk awareness culture for all Bank’s employees Implementation of Risk Management that involves main elements through training and socialization of risk management. that have been supporting the risk management structure in CCB Indonesia is carried out through: • Developing methodology of risk exposure calculation of work a. Active oversight of the Board of Commissioners and the Board of unit. Directors • Monitoring risk quality in comparison to the acceptable b. Adequate policies, procedures and determination of limits predominance. c. Process of risk management and risk management system d. Internal control system of risk management • D eveloping an information system and risk reporting in enterprise risk bankwide by Risk Management Work Unit. Board of Commissioners and Board of Directors are the key to a successful risk management through an active oversight. Board of • Carrying out stress testing with various factors that cause Commissioners can delegate the overseeing risk duty to the Risk unanticipated risks and then anticipate potential risks in the Oversight Committee, however the final responsibility is still rest future. upon the Board of Commissioners. • Ensuring the risk management effectiveness and developing As the caretaker for operational activities, including overseeing human capital competency related to risk management the implementation of risk management, Board of Directors has implementation by including Bank’s manager and all working the role to comprehensively determine the direction of policies unit heads in the risk management certification program based and risk management strategy, as well as the implementation. on the regulation. Board of Directors appointed Risk Management Committee to aid in • Providing refreshment training for Bank’s managers and officials executing its role and responsibility. who have passed the certification program after certain period of time.
Risk Management Policy • Bank in sustainable way will develop the capability of governance Bank CCB Indonesia has set a Risk Management Policy to enable and human capital of risk management, such as by developing an the management to handle the risk of the entire business unit early warning system, scoring system, limit stipulation, setting comprehensively. The comprehensive risk management policy the calculation for Liquidity Coverage Ratio (LCR), calculation of includes a series of strategy combinations, process, resources, Net Stable Fund Ratio (NSFR) and capital according to Basel. competency and technology in order to evaluate and manage risks. Risk management on Bank business and supporting operational Risk management policy is set to measure the risk appetite that activities is aimed to manage loan risk, market risk, and operational Bank can afford in setting a portfolio according to the risk price that risk up to the acceptable limit. Bank applies risk appetite and risk has been carefully considered and reflected on the capital managed tolerance in form of limit policy and limit Management Action Trigger to face the risk, as well as to support the business development. (MAT) system, proposed by Risk Management Committee. Limits are set based on overall limit, limit by type of risk or limit by certain In order to support the risk management effectiveness, the risk functional activity that have risk exposure. Limit setting functions management policy of CCB Indonesia also encourage to develop the in risk management and boosting optimal business growth. risk awareness culture at all range since risk management in nature Application of bank risk management includes limit evaluation on is actually the responsibility of everyone in the Bank. bankwide scale manner by Risk Management Work Unit.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 53 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
CAPITAL DISCLOSURES a) Capital Structure
Risk management through capital carried out by the Bank risk, and operational risk. For credit risk, Bank applies Basel includes the diversification of capital sources to comply with II (Standardized Approach). For market risk, Bank calculates the capital requirements in force, maintaining healthy capital the capital reserves against market risk exposure such as the ratios, supporting long-term strategic business plans and exposure calculation ofNet Open Position and the interestrate. maximizing value for shareholders. Bank should ensure capital For operational risk, refers tothe Basel II Basic Indicator Approach adequacy to cover credit risk, market risk, and operational risk, (Basic Indicator Approach). based on the provision of the regulations (regulatory capital), as well as internal requirements according to changes in economic conditions and characteristics of the activity (economic capital). b) Capital Adequancy
Bank has complied with capital requirements set out during the The Capital Adequacy Ratio (CAR) of the Bank by calculating reporting period by focusing on the core capital to support its credit risk, market risk and operational risk in 2018 amounted business and activities. This is seen from Bank’s core capital to 15.69%, decreased by 0,06% compared to 2017 with 15,75%. which is dominantly reached 94.27% of the total Bank’s capital.
In capital management, Bank refers to the regulatory provisions of Basel II to calculate the capital adequacy for credit risk, market
Table 1.a. Bank Capital Structure Quantitative Disclosures (in million rupiah)
31-Dec-18 31-Dec-17 Description Bank Consolidation Bank Consolidation
(1) (2) (3) (4) (5) (6)
I CAPITAL COMPONENTS
A Core Capital 2,134,060 2,017,387
1 Paid-In Capital 1,663,146 1,663,146
2 Allowance For Additional Capital 708,294 597,105
3 Innovative Capital
4 Deduction From Core Capital (237,380) (242,731)
5 Non-Controlling Interests
B Supplementary Capital 129,696 127,130
1 Upper Tier 2 129,696 127,130
2 Lower Tier 2 Maximum 50% Of Core Capital
3 Deduction From Supplementary Capital
C Deduction From Core Capital And Supplementary Capital
Securitization Exposures
D Additional Suplementary Capital that Meet the Requirements (Tier 3)
E Additional Supplementary Capital Allocated to Anticipate Market Risk
II TOTAL CORE CAPITAL AND SUPPLEMENTARY CAPITAL (A + B - C) 2,263,756 2,144,650
III TOTAL CORE CAPITAL, SUPPLEMENTARY CAPITAL, AND CAPITAL ADDITIONAL 2,144,517 SUPPLEMENTARY allocated to ANTICIPATE MARKET RISK (A + B - C + E)
IV RISK WEIGHTED ASSETS (RWA) FOR CREDIT RISK 13,450,221 12,796,215
V RISK WEIGHTED ASSETS (RWA) FOR OPERATIONAL RISK 55,207 70,352
VI RISK WEIGHTED ASSETS (RWA) FOR MARKET RISK 926,258 751,847
VII CAPITAL ADEQUACY RATIO FOR CREDIT RISK, MARKET RISKS AND OPERATIONAL 15.69% 15.75% RISK [III (IV + V + VI)]
Annual Report 2018 54 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Credit Risk Management
Credit risk derived from lending activities, placement on securities Risk Management Policy of Loan on other banks, sales to customers and trading activities. Credit Concentration risk also came from commitment and contingencies transactions to Bank performs loan portfolio diversification by spreading risks customers and counterparties. arising from various sectors as well as the loan segment. The risk Bank has credit risk policies that is the core framework and main management of loan concentration is carried out through: reference point in applying credit risk management in Bank CCB - Limit setting based on industry sector through analysis carried Indonesia thoroughly. Credit risk management policy on Bank is out by the Risk Management Work Unit to the Loan Policy periodically reviewed to comply with the regulation and adjusted to Committee and/or to the Risk Management Committee. the Bank’s risk level. - Risk analysis on loan concentration is carried out according to Business work unit of Bank CCB Indonesia as a risk taking unit the portfolio profile managed by the Bank by considering various has important roles in implementing proper risk management. impacts of changes in various economic indicators that may Risk Management Work Unit has a role in an independent manner affect the provision of loan to certain economic sectors. to monitor and assess credit risk parameter, review and adjust Credit Risk Policy and Bank Credit Policy, as well as developing - Analysis on Non-Performing Loan (NPL) movement in each methodology in risk calculation and risk handling procedure. business and industry sectors.
Compliance Work Unit is also active in providing recommendation - Risk management of loan concentration is monitored closely by on implementing credit risk management according to the direction the Risk Management Work Unit and the Credit Review Division from regulation and providing loan facility related to bank related on the implementation of the Loan Committee. parties. Compliance on credit risk management implementation is - The Bank performs a calculation of capital allocation to loan evaluated in sustainable manner by Internal Audit Work Unit. concentration risk, which is conveyed through the Capital The Bank implements the”three pillars principle” in loan quality calculation report based on Risk Profile or ICAAP. assessment, which is the smoothness of payment of financial obligations to the bank, the assessment of debtor’s financial condition and business prospects. Bank always refers to the Allowance for Impairment Losses regulations of Bank Indonesia and FSA by implementing prudential Formation of allowance over Bank CCBIndonesia loan portfolio practices in assessing and monitoring loan quality. Bank monitors is conductedthrough Allowance for Impairment Losses and the performance of the debtor during the loan period to maintain Provision for Loan Lossesin accordance to the Indonesian Banking loan quality. The monitoring process is carried out periodically Accounting Guidelines called Loan Impairment. Calculation for to identify the debtors who have the potential of experiencing Allowance Impairment Losses is based on bill impairment with difficulties to meet their obligations through call report. the methodology developed by Bank and approved by Board of Credit monitoring is carried out at the portfolio level through Directors. The calculation of Allowance for Impairment Losses (AIL) portfolio analysis from various aspects, such as industry sector, can be divided as follows: product type, segmentation, and so on. The evaluation is set forth - Individual AIL is an allowance for financial asset impairment in the report conducted by RMWU on a regular basis. As an early which being evaluated individually using discounted cash flow anticipatory measure, RWMU also conducts periodic stress testing of method, where the margin between current asset fair value with loan portfolio to find out the impact that may occur due to changes asset fair value prior to impairment is accounted. in some extreme economic conditions. Based on the simulation result, RWCU will propose to Risk Management Committee or to - Collective AIL is an allowance for financial asset impairment Loan Policy Committee some potential loan degradation, as well which being evaluated collectively, namely if no objective proof as the anticipative measures to prevent the occurrence of adverse of financial asset impairment that being evaluated individually. impacts. Bank through Risk Management Work Unit applied collective AIL calculation method using Migration Collectibility or Statistical Model Credit Collection and Recovery Analysis and vintage analysis. For debtor above Rp. 3 billion, the calculation will be done individually. Bank applies Allowance for Proactive loan collection system by the Bank through the Loan Impairment Losses Calculation Guidelines and Policy Recovery Work Unit which specializes in handling loan with quality of collectability 2 or special mention. Loan collection and recovery is carried out for troubled debtors wherethe handling is adjusted to Credit Risk Exposure different issues in each debtor. Loan collection for Non-Performing Based on the category of exposure in accordance with the Standard Loan (NPL) by a Special Asset Management (SAM) work unit. For the Approach, the Bank has the following exposures: execution of the collateral, SAM work unit cooperates with the Legal Division in the case of seizure of collateral and the auction process to the State Auction House.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 55 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 2.1.a. Net Receivables Disclosures by Region - Bank in Individual (In Million Rupiah)
31-Dec-18 31-Dec-17
No Portfolio Category Net Claims by Region Net Claims by Region
Region 1 Region 2 Region 3 Others Total Region 1 Region 2 Region 3 Others Total
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
Receivables To 1 2,620,488 2,620,488 2,605,760 2,605,760 Government
Receivables To Public 2 - Sector Entities
Receivables To Multilateral 3 Development Bank - And International Institutions
4 Receivables To Bank 513,476 9,198 348 523,022 1,573,856 2,966 451 1,577,273
5 Home-Backed Loans 154,044 28,081 5,652 4,922 192,699 225,506 56,352 7,333 5,330 294,520
Commercial 6 Property-Backed 51,181 677 51,858 85,199 1,036 86,235 Loans
Employee/Retiree 7 - - Loans
Receivables To Micro, 8 Small Businesses 342,537 116,061 28,284 60,277 547,159 305,475 68,890 23,873 75,452 473,691 And Retail Portfolio
Receivables To 9 8,608,195 829,750 173,556 898,168 10,509,669 7,057,710.04 773,963 201,646 945,999 8,979,318 Corporations
10 Past Due Receivables 229,357 39,093 8,455 16,756 293,661 243,527 35,273 8,755 23,254 310,809
11 Other Assets -
Exposures In Islamic 12 Business Unit (If Any)
Total 12,519,278 1,022,183 215,947 981,148 14,738,556 12,097,033 937,444 241,607 1,013,427 14,327,606
Bank does not have any subsidiary, so the Bank is on a consolidated basis with subsidiar y is Null.
Geographically, the Bank’s office network spreads across the Riau islands, major cities such as; Jakarta, Depok, Bogor, Tangerang, Bekasi, Serpong, Bandung, Semarang, Solo, yogyakarta, Surabaya, Denpasar, Pontianak, Bandar Lampung, Pekanbaru, Palembang, Batam, Makassar, Cirebon, Mataram, Malang and Ranai Natuna.
Annual Report 2018 56 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 2.2.a. Net Receivables Disclosures by Remaining Term of the Contract - Bank in Individual (In Million Rupiah)
31-Dec-18 31-Dec-17
Portfolio Net Receivable Based on Contract Term Net Receivable Based on Contract Term No Category ≥ 1 year to 3 ≥ 3 years to 5 Non kon- ≥ 1 year to ≥ 3 years to Non kon- ≤ 1 year ≥ 5 years Total ≤ 1 year ≥ 5 years Total years years traktual 3 years 5 years traktual
(1) (2) (3) (4) (5) (6) (7) (7) (3) (4) (5) (6) (7) (7)
1 Receivables To 2,620,488 2,620,488 2,605,760 2,605,760 Government
2 Receivables To Public Sector - - Entities
3 Receivables To Multilateral Development - - Bank And International Institutions
4 Receivables To 523,022 523,022 1,576,822 451 1,577,273 Bank
5 Home-Backed 9,050 13,198 170,451 192,699 10,144 55,853 228,523 294,520 Loans
6 Commercial Property- 42,929 1,171 7,758 51,858 71,142 5,496 9,597 86,235 Backed Loans
7 Employee/ - - Retiree Loans
8 Receivables To Micro, Small Businesses 3,450 192,368 51,505 299,836 547,159 226,238 40,588 62,555 143,575 734 473,690 And Retail Portfolio
9 Receivables To 140,156 5,101,477 2,263,950 3,004,086 499 10,510,168 4,810,892 832,172 1,482,543 1,853,711 8,979,318 Corporations
10 Past Due 20,718 144,449 16,372 112,122 170,123 463,784 29,778 17,951 32,288 59,175 171,618 310,810 Receivables
11 Other Assets - -
12 Exposures In Islamic - - Business Unit (If Any)
Total 164,324 5,438,294 2,331,827 3,416,044 170,622 14,909,178 5,105,205 906,351 1,642,563 2,283,424 172,352 14,327,606
Bank does not have any subsidiary, so the Table 2.2.b. Net Receivables Disclosures by Remaining Term of Contract - Bank on a Consolidated basis with Subsidiary is Null.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 57 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 2.3.a. Net Receivables Disclosures by Economic Sector - Bank in Individual (In Million Rupiah)
Receivables To Home- Receivables Multilateral Commercial Past Due Exposure Receivables Backed Kredit To Micro, Receivables Receivables To Bank Entity Receivables Property- Home- Other In Islamic No Economic Sector To Public Receivable Pegawai / Small Business To Government Development To Bank Backed Backed Assets Business Unit Sector Entity Other Assets Pensiunan And Retail Corporations And Loans Receivable (If Any) Loan Portfolio International Insititutions
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)
31-Dec-18
1 Agriculture, Hunting 780 65,057 8,716 And Forestry
2 Fishery 129 33,645
3 Mining And 622 159,300 Excavation
4 Manufacturing 32,185 1,792,854 83,738
5 Electricity, Gas And 1,074 799,779 Water
6 Construction 8,930 21,317 802,396 14,241
7 Wholesale And Retail 131,212 1,784,523 107,018
8 Accommodation, 7,600 1,218,479 9,960 Food And Beverages
9 Transportation, Trade 12,324 1,269,891 21,089 And Communication
10 Financial 523,022 1,460 906,697 2,108 Intermediary
11 Real Estate, Leasing 42,928 11,981 1,199,188 10,537 And Services
12 Administration, 836 Defense And Compulsory Social Security
13 Education Services 2,185 21,970
14 Health And Social 254 66,484 Services
15 Social, Art, Culture, 7,944 73,459 1,474 Recreation, And Other Services
16 Individual Services 1,365 Serving Households
17 International Agencies And Other Extra-National Agencies
18 Activities With Unclear Limitation
19 Not A Business Field
20 Others 2,620,488 192,699 315,256 314,582 34,780
Total 2,620,488 523,022 192,699 51,858 - 547,159 10,509,669 293,661 - -
Annual Report 2018 58 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 2.3.a. Net Receivables Disclosures by Economic Sector - Bank in Individual (In Million Rupiah)
Receivables To Receivables Home- Receivables Multilateral Commercial To Micro, Past Due Exposure Backed Kredit Receivables Receivables To To Public Bank Entity Receivables Property- Small Home- Other In Islamic No Economic Sector Receivable Pegawai / To Government Sector Development To Bank Backed Business Backed Assets Business Unit Other Assets Pensiunan Corporations Entity And Loans And Retail Receivable (If Any) Loan International Portfolio Insititutions
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)
31-Dec-17
1 Agriculture, Hunting 1,624 68,110 8,695 And Forestry
2 Fishery 129 23,244
3 Mining And 1,050 317,784 Excavation
4 Manufacturing 38,809 1,782,110 96,891
5 Electricity, Gas And 1,669 261,756 276 Water
6 Construction 15,154 26,522 687,086 13,711
7 Wholesale And Retail 158,979 2,020,966 122,117
8 Accommodation, 9,477 1,453,297 15,484 Food And Beverages
9 Transportation, Trade 13,230 636,586 3,030 And Communication
10 Financial 1,577,273 874 359,109 2,228 Intermediary
11 Real Estate, Leasing 71,081 15,820 958,518 10,064 And Services
12 Administration, 604 Defense And Compulsory Social Security
13 Education Services 1,462 22,265
14 Health And Social 378 38,789 Services
15 Social, Art, Culture, 12,088 83,760 2,961 Recreation, And Other Services
16 Individual Services 293,797 190,975 265,938 35,353 Serving Households
17 International Agencies And Other Extra-National Agencies
18 Activities With Unclear Limitation
19 Not A Business Field
20 Others 2,605,760
Total 2,605,760 1,577,273 293,797 86,235 - 473,690 8,979,318 310,810 - -
Bank does not have any subsidiary, so the Table 2.3.b. Net Receivables Disclosures by Economic Sector -Bank on a Consolidated basis with Subsidiary is Null.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 59 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 2.4.a. Receivables and Reserves Disclosures by Region - Bank in Individual (In Million Rupiah)
31-Dec-18 31-Dec-17
No Descriptiom Region Region
Region 1 Region 2 Region 3 Others Total Region 1 Region 2 Region 3 Others Total
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) 1 Receivables 12,519,278 1,022,183 215,947 981,148 14,738,556 12,097,033 937,444 241,607 1,051,521 14,327,606 2 Loan Impaired - - A. Not Yet 9,111,215 973,892 207,493 964,392 11,256,992 7,781,750 925,672 232,852 997,269 9,937,543 Mature B. Past Due 229,358 39,093 8,455 16,755 293,661 135,668 11,773 8,755 16,158 172,353 Mature 3 Allowance For Impairment 99,409 11,584 3,056 5,764 119,813 65,826 6,329 1,572 8,202 81,929 Losses -
4 Individual 2,472 488 1,019 1,344 5,323 6,104 806 335 1,453 8,697
5 Allowance For Impairment 30,975 30,975 10,434 10,434 Losses -
Annual Report 2018 60 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 2.5.a. Receivables and Reserves Disclosures by Economic Sector - Bank in Individual (In Million Rupiah)
Impaired Receivables Allowance For Allowance For Written-Off Impaired Losses No Economic Sector Receivables Impaired Losses (AIL) - Receiv- Not Yet (AIL) Past Due Collective ables Mature Individual
(1) (2) (3) (4) (5) (6) (7) (8) 31-Dec-18 1 Agriculture, Hunting And Forestry 74,553 65,837 8,716 2,444 4
2 Fishery 33,774 33,774 3
3 Mining And Excavation 159,921 159,921 14 4 Manufacturing 1,908,778 1,825,039 83,739 35,078 627 18,947
5 Electricity, Gas And Water 800,853 800,853 82
6 Construction 846,884 832,644 14,241 7,498 76
7 Wholesale And Retail 1,978,807 1,871,790 107,017 35,252 1,439 8,761 8 Accommodation, Food And Beverages 1,236,039 1,226,078 9,960 8,844 1,618 9 Transportation, Trade And 1,303,305 1,282,216 21,089 14,279 869 732 Communication 10 Financial Intermediary 910,613 908,504 2,108 609 53 11 Real Estate, Leasing And Services 1,264,522 1,253,985 10,537 4,324 187 1,577 12 Administration, Defense And 836 836 Compulsory Social Security 13 Education Services 24,155 24,155 788 1 14 Health And Social Services 66,738 66,738 7 15 Social, Art, Culture, Recreation, And 82,876 81,403 1,474 627 6 Other Services 16 Individual Services Serving Households 1,365 1,365 61 17 International Agencies And Other Extra-National Agencies 18 Activities With Unclear Limitation 19 Not A Business Field 20 Others 4,044,537 4,009,757 34,780 10,069 275 958 TOTAL 14,738,556 14,444,895 293,661 119,812 5,322 30,975 31-Dec-17 1 Agriculture, Hunting And Forestry 78,429 78,429 2,505 4
2 Fishery 23,373 23,373 2
3 Mining And Excavation 318,834 318,834 35 4 Manufacturing 1,917,811 1,845,117 72,694 27,365 524 10,201
5 Electricity, Gas And Water 263,701 263,425 276 61 38
6 Construction 742,411 729,402 13,009 2,721 708
7 Wholesale And Retail 2,302,987 2,195,456 69,436 27,928 1,650 233 8 Accommodation, Food And Beverages 1,478,259 1,471,526 6,733 5,331 1,298 9 Transportation, Trade And 652,845 650,240 2,605 712 1,558 Communication 10 Financial Intermediary 365,629 363,401 2,228 495 16 11 Real Estate, Leasing And Services 1,055,343 1,052,022 3,321 2,841 2,022 12 Administration, Defense And 604 604 - - Compulsory Social Security 13 Education Services 23,727 23,727 - 208 14 Health And Social Services 39,167 39,167 - 5 15 Social, Art, Culture, Recreation, And 98,808 98,333 475 1,168 43 Other Services 16 Individual Services Serving Households 786,062 784,487 1,575 10,802 586 17 International Agencies And Other Extra- - National Agencies 18 Activities With Unclear Limitation - 19 Not A Business Field - 20 Others 4,179,616 4,179,616 TOTAL 14,327,606 14,117,159 172,352 81,929 8,697 10,434
Bank does not have any subsidiary, so the Table 2.5.b. Receivables and Reserves Disclosures by Economic Sector - Bank on Consolidated basis with Subsidiary is Null
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 61 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance
Table 2.6.a. Disclosure of Detail Movement of Allowance for Impairment Losses - Bank in Individual (In Million Rupiah)
31-Dec-18 31-Dec-17
“Allowance For Allowance For “Allowance For Allowance For No Description Impairement Losses - Impairement Losses - Impairement Losses - Impairement Losses - Individual” Collective Individual” Collective
(1) (2) (3) (4) (5) (6)
1 Ail Opening Balance 55,339 35,289 33,412 33,564
2 Establishment (Recovery) Of Ail In The 58,711 7,165 32,128 2,549 Current Period (Net)
3 Ail Used To Write-Off Receivables In The (10,201) (233) Current Period
4 Other Establishment (Recovery) In The (5,389) (25,587) - (591) Current Period
(1) (392)
Ail Closing Balance 108,660 16,475 55,339 35,289
Annual Report 2018 62 PT Bank China Construction Bank Indonesia Tbk 05 Corporate Information 06 Financial Statement
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 63 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 3.1.a. Net Receivables Disclosures by Portfolio Category & Ratings Scale - Bank in Individual
31-Dec-18 Net Receivable Rating Agency Long - Term Rating Peringkat Jangka Pendek Standard and Poor's AAA AA+s.d AA- A+ s.d A- BBB+ s.d BBB- BB+ s.d BB- B+ s.d B- Kurang dari B- A-1 A-2 A-3 Kurang dari A-3 Fitch Rating AAA AA+s.d AA- A+ s.d A- BBB+ s.d BBB- BB+ s.d BB- B+ s.d B- Kurang dari B- F1+ s.d F1 F2 F3 Kurang dari F3 No Portofolio Category Moody's Aaa Aa1s.d Aa3 A1 s.d A3 Baa1 s.d Baa3 Ba1 s.d Ba3 B1 s.d B3 Kurang dari B3 P-1 P-2 P-3 Kurang dari P-3 PT.Fitch Rating Indonesia AAA(idn) AA+(idn) s.d AA- (idn) A+(idn) s.d A- (idn) BBB+(idn) s.d BBB- (idn) BB+(idn) s.d BB- (idn) B+(idn) s.d B- (idn) Kurang dari B- (idn) F1+(idn) s.d F1(idn) F2(idn) F3(idn) Kurang dari F3(idn) Tanpa Peringkat Total PT.ICRA Indonesia [idr]AAA [idr]AA+ s.d [idr)AA- [idr]A+ s.d [idr)A- [idr]BBB+ s.d [idr)BBB- [idr]BB+ s.d [idr)BB- [idr]B+ s.d [idr)B- Kurang dari [idr]B- [idr]A1+ s.d [idr]A1 [idr]A2+ s.d [idr]A3+ s.d [idr] Kurang dari [idr]A3 [idr]A2 A3 PT.Pemeringkan Efek idAAA idAA+ s.d idAA- idA+ s.d idA- idBBB+ s.d idBBB- idBB+ s.d idBB- idB+ s.d idB- Kurang dari idB- idA1 idA2 idA3 s.d idA4 Kurang dari idA4 Indonesia (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) 1 Receivables To Government 1,300,537 1,300,537 2 Receivables To Public Sector Entities - 3 Receivables To Multilateral Development Bank - And International Institutions 4 Receivables To Bank 109,710 9,819 12,553 - 132,082 5 Home-Backed Loans 6 Commercial Property-Backed Loans 7 Employee/Retiree Loans 8 Receivables To Micro, Small Businesses And Retail Portfolio 9 Receivables To Corporations 10 Past Due Receivable 11 Other Assets 12 Exposures In Islamic Business Unit (If Any) Total 109,710 9,819 12,553 ------1,300,537 1,432,619
31-Dec-17 Net Receivable Rating Agency Long - Term Rating Peringkat Jangka Pendek Standard and Poor’s AAA AA+s.d AA- A+ s.d A- BBB+ s.d BBB- BB+ s.d BB- B+ s.d B- Kurang dari B- A-1 A-2 A-3 Kurang dari A-3 Fitch Rating AAA AA+s.d AA- A+ s.d A- BBB+ s.d BBB- BB+ s.d BB- B+ s.d B- Kurang dari B- F1+ s.d F1 F2 F3 Kurang dari F3 Moody’s Aaa Aa1s.d Aa3 A1 s.d A3 Baa1 s.d Baa3 Ba1 s.d Ba3 B1 s.d B3 Kurang dari B3 P-1 P-2 P-3 Kurang dari P-3 No Portofolio Category PT.Fitch Rating Indonesia AAA(idn) AA+(idn) s.d AA- (idn) A+(idn) s.d A- (idn) BBB+(idn) s.d BBB- (idn) BB+(idn) s.d BB- (idn) B+(idn) s.d B- (idn) Kurang dari B- (idn) F1+(idn) s.d F1(idn) F2(idn) F3(idn) Kurang dari F3(idn) Tanpa Peringkat Total
PT.ICRA Indonesia [idr]AAA [idr]AA+ s.d [idr)AA- [idr]A+ s.d [idr)A- [idr]BBB+ s.d [idr)BBB- [idr]BB+ s.d [idr)BB- [idr]B+ s.d [idr)B- Kurang dari [idr]B- [idr]A1+ s.d [idr]A1 [idr]A2+ s.d [idr]A3+ s.d [idr] Kurang dari [idr]A3 [idr]A2 A3 PT.Pemeringkan Efek idAAA idAA+ s.d idAA- idA+ s.d idA- idBBB+ s.d idBBB- idBB+ s.d idBB- idB+ s.d idB- Kurang dari idB- idA1 idA2 idA3 s.d idA4 Kurang dari idA4 Indonesia (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) 1 Receivables To Government 1,299,929 1,299,929 2 Receivables To Public Sector Entities - 3 Receivables To Multilateral Development Bank - And International Institutions 4 Receivables To Bank 110,729 10,502 13,403 - 134,634 5 Home-Backed Loans 6 Commercial Property-Backed Loans 7 Employee/Retiree Loans 8 Receivables To Micro, Small Businesses And Retail Portfolio 9 Receivables To Corporations 10 Past Due Receivable 11 Other Assets 12 Exposures In Islamic Business Unit (If Any) Total 110,729 10,502 13,403 ------1,299,929 1,434,563
The Bank does not have any subsidiary, so the Table 3.1.b. Net Receivables Disclosures by Portfolio Category & Ratings Scale - Bank on a consolidated basis with Subsidiar y is Null.
Annual Report 2018 64 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
(In Million Rupiah)
Tagihan bersih Lembaga pemeringkat Peringkat Jangka Panjang Short Term Rating Standard and Poor's AAA AA+s.d AA- A+ s.d A- BBB+ s.d BBB- BB+ s.d BB- B+ s.d B- Kurang dari B- A-1 A-2 A-3 Kurang dari A-3 Fitch Rating AAA AA+s.d AA- A+ s.d A- BBB+ s.d BBB- BB+ s.d BB- B+ s.d B- Kurang dari B- F1+ s.d F1 F2 F3 Kurang dari F3 No Kategori Portofolio Moody's Aaa Aa1s.d Aa3 A1 s.d A3 Baa1 s.d Baa3 Ba1 s.d Ba3 B1 s.d B3 Kurang dari B3 P-1 P-2 P-3 Kurang dari P-3 PT.Fitch Rating Indonesia AAA(idn) AA+(idn) s.d AA- (idn) A+(idn) s.d A- (idn) BBB+(idn) s.d BBB- (idn) BB+(idn) s.d BB- (idn) B+(idn) s.d B- (idn) Kurang dari B- (idn) F1+(idn) s.d F1(idn) F2(idn) F3(idn) Kurang dari F3(idn) Without Rating Total PT.ICRA Indonesia [idr]AAA [idr]AA+ s.d [idr)AA- [idr]A+ s.d [idr)A- [idr]BBB+ s.d [idr)BBB- [idr]BB+ s.d [idr)BB- [idr]B+ s.d [idr)B- Kurang dari [idr]B- [idr]A1+ s.d [idr]A1 [idr]A2+ s.d [idr]A3+ s.d [idr] Kurang dari [idr]A3 [idr]A2 A3 PT.Pemeringkan Efek idAAA idAA+ s.d idAA- idA+ s.d idA- idBBB+ s.d idBBB- idBB+ s.d idBB- idB+ s.d idB- Kurang dari idB- idA1 idA2 idA3 s.d idA4 Kurang dari idA4 Indonesia (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) 1 Tagihan Kepada Pemerintah 1,300,537 1,300,537 2 Tagihan Kepada Entitas Sektor Publik - 3 Tagihan kepada Bank Pembangunan Multit- - eral dan Lembaga International 4 Tagihan kepada Bank 109,710 9,819 12,553 - 132,082 5 Kredit Beragun Rumah Tinggal 6 Kredit Beragun Properti Komersial 7 Kredit Pegawai / Pensiunan 8 Tagihan Kepada Usaha Mikro, Usaha Kecil, dan Porofolio Ritel 9 Tagihan kepada Korporasi 10 Tagihan yang Telah Jatuh Tempo 11 Aset Lainnya 12 Eksposur di Unit Usaha Syariah (apabila ada) Total 109,710 9,819 12,553 ------1,300,537 1,432,619
Tagihan bersih Lembaga pemeringkat Peringkat Jangka Panjang Short Term Rating Standard and Poor’s AAA AA+s.d AA- A+ s.d A- BBB+ s.d BBB- BB+ s.d BB- B+ s.d B- Kurang dari B- A-1 A-2 A-3 Kurang dari A-3 Fitch Rating AAA AA+s.d AA- A+ s.d A- BBB+ s.d BBB- BB+ s.d BB- B+ s.d B- Kurang dari B- F1+ s.d F1 F2 F3 Kurang dari F3 Moody’s Aaa Aa1s.d Aa3 A1 s.d A3 Baa1 s.d Baa3 Ba1 s.d Ba3 B1 s.d B3 Kurang dari B3 P-1 P-2 P-3 Kurang dari P-3 No Kategori Portofolio PT.Fitch Rating Indonesia AAA(idn) AA+(idn) s.d AA- (idn) A+(idn) s.d A- (idn) BBB+(idn) s.d BBB- (idn) BB+(idn) s.d BB- (idn) B+(idn) s.d B- (idn) Kurang dari B- (idn) F1+(idn) s.d F1(idn) F2(idn) F3(idn) Kurang dari F3(idn) Without Rating Total
PT.ICRA Indonesia [idr]AAA [idr]AA+ s.d [idr)AA- [idr]A+ s.d [idr)A- [idr]BBB+ s.d [idr)BBB- [idr]BB+ s.d [idr)BB- [idr]B+ s.d [idr)B- Kurang dari [idr]B- [idr]A1+ s.d [idr]A1 [idr]A2+ s.d [idr]A3+ s.d [idr] Kurang dari [idr]A3 [idr]A2 A3 PT.Pemeringkan Efek idAAA idAA+ s.d idAA- idA+ s.d idA- idBBB+ s.d idBBB- idBB+ s.d idBB- idB+ s.d idB- Kurang dari idB- idA1 idA2 idA3 s.d idA4 Kurang dari idA4 Indonesia (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15) (16) 1 Tagihan Kepada Pemerintah 1,299,929 1,299,929 2 Tagihan Kepada Entitas Sektor Publik - 3 Tagihan kepada Bank Pembangunan Multiteral - dan Lembaga International 4 Tagihan kepada Bank 110,729 10,502 13,403 - 134,634 5 Kredit Beragun Rumah Tinggal 6 Kredit Beragun Properti Komersial 7 Kredit Pegawai / Pensiunan 8 Tagihan Kepada Usaha Mikro, Usaha Kecil, dan Porofolio Ritel 9 Tagihan kepada Korporasi 10 Tagihan yang Telah Jatuh Tempo 11 Aset Lainnya 12 Eksposur di Unit Usaha Syariah (apabila ada) Total 110,729 10,502 13,403 ------1,299,929 1,434,563
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 65 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 3.2.a. Counterparty Credit Risk Disclosures: Derivative Transactions (In Million Rupiah)
31-Dec-18
Notional Amount Net Net Underlying Receivables Obligation No > 1 Year- ≤ 5 Receivables MRK Receivables Variables ≤ 1 Year > 5 Years Derivative Derivative Years Before CRM After CRM
Individually Bank
1 Interest Rate ------
2 Exchange Rate 362,658 - - 4,068 1 507,721 967 101,544
3 Others ------
Total 362,658 - - 4,068 1 507,721 967 101,544
Consolidated Bank
1 Interest Rate ------
2 Exchange Rate ------
3 Shares ------
4 Gold ------
5 Metals other than ------Gold
6 Others ------
Total ------
31-Dec-17
Notional Amount Net Net Underlying Receivables Obligation No > 1 Year- ≤ Receivables MRK Receivables Variables ≤ 1 Year > 5 Years Derivative Derivative 5 Years Before CRM After CRM
Individually Bank
1 Interest Rate ------
2 Exchange Rate 94,881 - - 454 191 949 15 190
3 Others ------
Total 94,881 - - 454 191 949 15 190
Consolidated Bank
1 Interest Rate ------
2 Exchange Rate ------
3 Shares ------
4 Gold ------
5 Metals other than ------Gold
6 Others ------
Total ------
Annual Report 2018 66 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 3.2.b.1 Disclosure of Counterparty Credit Risk: Repo Transactions - Bank in Individual (In Million Rupiah)
31 December 2018 31 December 2017
Risk-Weight- Net Risk-Weight- No Portfolio Category Fair Value Repo Net Fair Value Repo ed Receiv- ed SSB Repo Liabilities Receivables SSB Repo Liabilities Assets ables Assets
-1 -2 -3 -4 -5 -6 -7 -8 -9 -10
1 Receivables to Government
2 Receivables to Public Sector Entities
3 Receivables to Multilateral Development Bank and International Institutionsl
4 Receivables to Bank
5 Receivables to Micro, Small Businesses and Retail Portfolio
6 Receivables to Corporations
7 Exposures in Islamic Business Unit (if any)
TOTAL
The Bank does not have any subsidiary, so the Table 3.2.b.2 Disclosure of Counterparty Credit Risk: Repo Transactions - Bank on a Consolidated basis with Subsidiar y is Null.
Table 3.2.c.1 Disclosure of Counterparty Credit Risk: Reverse Repo Transactions - Bank in Individual dalam Jutaan Rupiah
31 December 2018 31 December 2017
No Portfolio Category Risk- Risk- Fair Value Repo Net Fair Value Repo Net Weighted Weighted SSB Repo Liabilities Receivables SSB Repo Liabilities Receivables Assets Assets
-1 -2 -3 -4 -5 -6 -7 -8 -9 -10
1 Receivables to Government
2 Receivables to Public Sector Entities
3 Receivables to Multilateral Development Bank and International Institutionsl
4 Receivables to Bank
5 Receivables to Micro, Small Businesses and Retail Portfolio
6 Receivables to Corporations
7 Exposures in Islamic Business Unit (if any)
TOTAL
The Bank does not have any subsidiary, so the Table 3.2.c.2. Disclosure of Counterparty Credit Risk: Reverse Repo Transactions - Bank on a consolidated basis with Subsidiar y is Null.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 67 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 4.1.a. Net Receivables Disclosures by Risk Weight After Calculating the Credit Risk (In Million Rupiah) Mitigation Impact - Bank in Individual
31 December 2018 Risk- Capital No Portofolio Category Net Receivables After Calculating Risk Mitigation Impact Weighted Expenses Assets 0% 20% 35% 40% 45% 50% 75% 100% 150% Others (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) A Balance Sheet exposures
1 Receivables to Government 2,620,488
2 Receivables to Public Sector Entities
3 Receivables to Multilateral Develop- - ment Bank and International Insti- tutions
4 Receivables to Bank 521,263 1,760
5 Home-Backed Loans 192,699
6 Commercial Property-Backed Loans 51,858
7 Employee/Retiree Loans
8 Receivables to Micro, Small Businesses 19,990 527,169 and Retail Portfolio
9 Receivables to Corporations 591,794 9,917,875
10 Past Due Receivable 11,507 282,154
11 Other Assets
12 Exposures in Islamic Business Unit (if any)
Total Balance Sheet Exposures 3,753,535 194,459 - - - 590,534 - 10,200,029 -
B exposures on liabilities/Contin- gencies on administrative account Transactions 1 Receivables to Government
2 Receivables to Public Sector Entities
3 Receivables to Multilateral Develop- ment Bank and International Insti- tutions
4 Receivables to Bank 1,500
5 Home-Backed Loans 5,482
6 Commercial Property-Backed Loans -
7 Employee/Retiree Loans
8 Receivables to Micro, Small Businesses 32,513 and Retail Portfolio
9 Receivables to Corporations 1,495,070 244,018
10 Past Due Receivable
11 Exposures in Islamic Business Unit (if any)
Total TRA Exposures - - - - - 1,534,565 - 244,018
C exposures due to Counterparty Credit Risk 1 Receivables to Government
2 Receivables to Public Sector Entities
3 Receivables to Multilateral Develop- ment Bank and International Insti- tutions 4 Receivables to Bank
5 Receivables to Micro, Small Businesses and Retail Portfolio 6 Receivables to Corporations
7 Exposures in Islamic Business Unit (if any)
Total Counterparty Credit Risk ------Exposures
Annual Report 2018 68 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 4.1.a. Net Receivables Disclosures by Risk Weight After Calculating the Credit Risk (In Million Rupiah) Mitigation Impact - Bank in Individual
31 Desember 2017 Risk- Capital No Kategori Portofolio Net Receivables After Calculating Risk Mitigation Impact Weighted Expenses Assets 0% 20% 35% 40% 45% 50% 75% 100% 150% Others (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) A Balance Sheet exposures
1 Receivables to Government 2,605,760
2 Receivables to Public Sector Entities
3 Receivables to Multilateral Develop- ment Bank and International Insti- tutions
4 Receivables to Bank 1,390,951 186,322
5 Home-Backed Loans 294,521
6 Commercial Property-Backed Loans 86,235
7 Employee/Retiree Loans
8 Receivables to Micro, Small Businesses 15,365 458,325 and Retail Portfolio
9 Receivables to Corporations 436,693 8,504,529
10 Past Due Receivable 8,424 302,386
11 Other Assets
12 Exposures in Islamic Business Unit (if any)
Total Balance Sheet Exposures 4,448,769 480,843 - - - 552,984 - 8,806,915 - - -
B exposures on liabilities/Contin- gencies on administrative account Transactions 1 Receivables to Government
2 Receivables to Public Sector Entities
3 Receivables to Multilateral Develop- ment Bank and International Insti- tutions
4 Receivables to Bank 1,529
5 Home-Backed Loans 44,237
6 Commercial Property-Backed Loans
7 Employee/Retiree Loans
8 Receivables to Micro, Small Businesses 61,289 and Retail Portfolio
9 Receivables to Corporations 1,752,748 252,691
10 Past Due Receivable
11 Exposures in Islamic Business Unit (if any)
Total TRA Exposures - - - - - 1,859,803 - 252,691 - -
C exposures due to Counterparty Credit Risk 1 Receivables to Government
2 Receivables to Public Sector Entities
3 Receivables to Multilateral Develop- ment Bank and International Insti- tutions 4 Receivables to Bank
5 Receivables to Micro, Small Businesses and Retail Portfolio 6 Receivables to Corporations
7 Exposures in Islamic Business Unit (if any)
Total Counterparty Credit Risk ------Exposures
The Bank does not have any subsidiary, so the Table 4.1.b. Net Receivables Disclosures by Risk Weight After Calculating the Credit Risk Mitigation Impact - Bank on a Consolidated basis with Subsidiar y is Null.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 69 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 4.2.a Disclosure of Net Receivables and Credit Risk Mitigation Techniques - Bank in Individual (In Million Rupiah)
31-Dec-18 31-Dec-17
Parts Guaranteed With Parts Guaranteed With No Portfolio Category Parts That Parts That Net Net Credit Credit Are Not Guar- Oth- Are Not Receivables Collateral Guarantee Others Receivables Collateral Insur- Insurance Guaranteed Guaranteed antee ance ers
(8)=(3)- (8)=(3)- (1) (2) (3) (4) (5) (6) (7) (3) (4) (5) (6) (7) (4+5+6+7) (4+5+6+7)
A Balance Sheet exposures
1 Receivables to Government 2,620,488 2,620,488 2,605,760 2,605,760
2 Receivables to Public Sector Entities
Receivables to Multilateral Development 3 Bank and International Institutions
4 Receivables to Bank 523,022 - 523,022 1,577,273 - 1,577,273
5 Home-Backed Loans 192,699 38,540 154,159 294,521 58,904 235,617
6 Commercial Property-Backed Loans 51,858 25,929 25,929 86,235 43,118 43,118
7 Employee/Retiree Loans
Receivables to Micro, Small Businesses 8 547,159 - 547,159 473,690 473,690 and Retail Portfolio
9 Receivables to Corporations 10,509,669 591,794 9,917,875 8,979,318 436,693 8,542,625
10 Past Due Receivable 293,661 - 293,661 310,809 - 310,809
11 Other Assets - -
Exposures in Islamic Business Unit 12 (if any)
Total Balance Sheet Exposures 14,738,556 656,263 - - - 14,082,293 14,289,510 538,715 - - - 13,788,892
Exposures on liabilities/
B Contingencies on administrative
account Transactions
1 Receivables to Government
2 Receivables to Public Sector Entities
Receivables to Multilateral Development 3 Bank and International Institutions
4 Receivables to Bank 1,500 1,500 1,529 1,529
5 Home-Backed Loans
6 Commercial Property-Backed Loans 10,963 2,480 8,483 88,474 44,237 44,237
7 Employee/Retiree Loans
Receivables to Micro, Small Businesses 8 100,853 32,513 68,340 118,708 61,289 57,419 and Retail Portfolio
9 Receivables to Corporations 1,739,088 (1,739,088) 2,005,439 2,005,439 -
10 Past Due Receivable - -
Exposures in Islamic Business Unit 11 (if any)
Total TRA Exposures 113,316 1,775,581 - - - (1,662,265) 2,214,150 2,112,494 - - - 101,656
Exposures due to Counterparty C Credit Risk
1 Receivables to Government - - - -
2 Receivables to Public Sector Entities
Receivables to Multilateral Development 3 Bank and International Institutions
4 Receivables to Bank
Receivables to Micro, Small Businesses 5 and Retail Portfolio
6 Receivables to Corporations
Exposures in Islamic Business Unit 7 (if any)
Total Counterparty Credit Risk Ex------posures
Total (A+B+C) 14,851,872 2,431,844 - - - 12,420,028 16,503,660 2,651,209 - - - 13,890,548
The Bank does not have any subsidiary, so the Table 4.2.b. Disclosure of Net Receivables and Credit Risk Mitigation Techniques - Bank on a Consolidated basis with Subsidiar y is Null.
Annual Report 2018 70 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 5.1.a Securitization Transactions Disclosures - Bank in Individual (In Million Rupiah)
31-Dec-18 31-Dec-17 Impaired Securitized Impaired Securitized Securitization Profit/Loss Profit/Loss No Securitized Assets Value Risk-Weighted Securitized Assets Value Risk-Weighted Exposures From ATMR From ATMR Assets Value Not Yet Assets Assets Value Assets Past-Due Securitization Agunan Garansi Securitization Mature (8)=(3)- (1) (2) (3) (4) (5) (3) (4) (5) (6) (7) (4+5+6+7) Bank acting as Original 1 ------Creditor
- Type of Exposure (eg Home-backed loans)
Bank acting as Credit 2 Enhancer a. First risk insurer facilities ------Type of Exposure (eg Home-backed loans) b. Second risk insurer ------facilities - Type of Exposure (eg Home-backed loans) Bank acting as Liquidity 3 ------Facility Provider - Type of Exposure (eg Home-backed loans) Bank acting as Service 4 ------Provider - Type of Exposure (eg Home-backed loans) Bank acting as Custodian 5 ------Bank - Type of Exposure (eg Home-backed loans) 6 Bank acting as Investor a. Senior Tranche ------Type of Exposure (eg Home-backed loans) b. Junior Tranche ------Type of Exposure (eg Home-backed loans)
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 71 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 6.1.1. Disclosure of Assets Exposures in Balance Sheet (In Million Rupiah)
31 December 2018 31 December 2017
No Portofolio Category RWA Before RWA After RWA Before RWA After Net Receivables Net Receivables CRM CRM CRM CRM
(1) (2) (3) (4) (5) (6) (7) (8)
1 Receivables to Government 2,620,487 2,605,760
2 Receivables to Public Sector Entities
3 Receivables to Multilateral Development Bank and International Institutions
4 Receivables to Bank 532,022 105,132 352 1,577,273 317,233 38,450
5 Home-Backed Loans 192,699 46,133 38,540 294,520 109,944 58,904
6 Home-Backed Loans 51,858 51,858 25,929 86,235 86,235 43,117
7 Employee/Retiree Loans
8 Receivables to Micro, Small 547,159 410,368 263,584 473,690 355,267 229,162 Businesses and Retail Portfolio
9 Receivables to Corporations 10,509,669 10,509,669 9,917,875 8,979,318 8,979,318 8,542,625
10 Past Due Receivable 293,661 434,737 287,907 310,809 462,002 306,597
11 Other Assets 1,183,685 - 1,555,798 1,517,918
Total 15,931,240 11,557,897 10,534,187 15,883,403 10,309,999 10,736,773
Table 6.1.2. Disclosures of Liabilities Exposures of Commitment/Contingencies on Administrative Account Transactions (In Million Rupiah)
31 December 2018 31 December 2017
No Portofolio Category RWA Before RWA After RWA Before RWA After Net Receivables Net Receivables CRM CRM CRM CRM
(1) (2) (3) (4) (5) (6) (7) (8)
1 Receivables to Government
2 Receivables to Public Sector Entities
3 Receivables to Multilateral Devel- opment Bank and International Institutions
4 Receivables to Bank 1,500 750 300 1,529 765 765
5 Home-Backed Loans
6 Commercial Property-Backed Loans 5,482 2,480 1,240 44,237 44,237 22,118
7 Employee/Retiree Loans
8 Receivables to Micro, Small Business- 32,513 24,385 16,256 61,829 46,372 30,915 es and Retail Portfolio
9 Receivables to Corporations 1,739,088 1,739,088 1,739,088 2,005,438 2,005,438 2,005,438
10 Past Due Receivable
Total 1,778,583 1,766,703 1,756,884 2,113,033 2,096,812 2,059,236
Annual Report 2018 72 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 6.1.3. Disclosures of Counterparty Credit Risk Exposures (In Million Rupiah)
31 December 2018 31 December 2017
No Portofolio Category RWA Before RWA After RWA Before RWA After Net Receivables Net Receivables CRM CRM CRM CRM
(1) (2) (3) (4) (5) (6) (7) (8)
1 Receivables to Government ------
2 Receivables to Public Sector Entities ------
3 Receivables to Multilateral Development Bank and International ------Institutions
4 Receivables to Bank ------
5 Receivables to Micro, Small ------Businesses and Retail Portfolio
6 Receivables to Corporations ------
Total ------
Table 6.1.4. Disclosure of Settlement Risk Exposures (In Million Rupiah)
31 Desember 2018 31 Desember 2017
No Portofolio Category Deduction From RWA After Deduction From RWA After Exposure Value Exposure Value Capital CRM Capital CRM
(1) (2) (3) (4) (5) (6) (7) (8)
1 Delivery vs. Payment
a. Capital Expense 8% (5-15 days) ------
b. Capital Expense 50% (16-30 days) ------
c. Capital Expense 75% (31-45 days) ------
d. Capital Expense 100% (more than ------45 days)
2 Non Delivery vs. payment ------
Total ------
6.1.5. Disclosure of Securitization Exposures (In Million Rupiah)
31 December 2018 31 December 2017
No Portofolio Category RWA Before RWA Before Net Receivables Net Receivables CRM CRM
(1) (2) (3) (4) (5) (6)
1 Supporting Credit Facility that meets the - - - - requirements
2 Supporting Credit Facility that does not meet the - - - - requirements
3 Liquidity Facility that meets the requirements - - - -
4 Liquidity Facility that does not meet the - - - - requirements
5 Purchase of Asset-Backed Securities that meets - - - - the requirements
6 Purchase of Asset-Backed Securities that does - - - - not meet the requirement
7 Securitization exposure that are not included in - - - - the provisions of Bank Indonesia concerning
Total - - - -
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 73 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 6.1.7. Disclosure of Total Credit Risk Measurement (In Million Rupiah)
Portofolio Category 31 December 2018 31 December 2017
Total Credit Risk RWA 13,450,211 12,796,215
Total Deduction From Capital 237,380 242,731
Market Risk Management Sources of interest rates risk of banking book are repricing risk (repricing mismatch between asset and liability components), Market Risk – Trading Book risk base (the use of a different reference rate), option risk (credit repayment or disbursement of deposits before maturity. Market risk of trading book is a potential loss caused by changes in interest rates and exchange rates on the trading portfolio. Pricing Management Throughout 2016, the Bank’s trading book exposures are still very limited and simple. Any price changes that occur can be managed To maximize Net Interest Margin (NIM), the Bank implements the fairly welland do not result in significant impact onthe Bank’s capital. pricing policy of fund products and credit products by considering the market conditions of competition. In addition, the Bank Market Risk – Banking Book considers liquidity conditions and funding needs. In order to minimize interest rates risk, the Bank’s credit interest rate will Market risk of banking book is caused by movement of exchange be adjusted to the interest rate.The Bank’s credit interest rate is rate and interest rate on banking book which can harm the Bank. determined by considering the reserve requirement (GWM) cost and The market risk management of banking book arising from treasury the profit margin of the Bank while maintaining competitiveness activities or from the balance sheet position of the Bank is adjusted with the major competitors. to the strategies and policies set by the Management through the decision of the ALCO committee. Any change of interest rate and The Bank has published the Prime Lending Rate (SBDK) of Rupiah exchange rate on banking book activity is managed by optimizing Currency through the announcement at each Bank’s branch office, the Bank’s balance sheet structure to obtain maximum returns website and quarterly through the newspaper in accordance with according to the level of risk acceptable by the Bank as well as the the Circular Letter of Bank Indonesia No. 13/5/DPNP dated February economic value of the Bank’s capital (economic value perspective). 8, 2011.
Table 7.1. Market Risk Disclosures by using Standard Method (In Million Rupiah)
31 December 2018 31 December 2017
BANK CONSOLIDATION BANK CONSOLIDATION No Type Of Risk Capital Capital Capital Capital ATMR ATMR ATMR ATMR Expense Expense Expense Expense
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
1 Interest Rate Risk - - - -
a. Specific Risk - -
b. Common Risk 2,223 27,788 3,703 46,288
2 Foreign Exchange Risk 2,193 27,413 1,925 24,063
3 Equity Risk *)
4 Commodity Risk *)
5 Option Risk
Total 4,416 55,200 5,628 70,350
*) For banks that have subsidiaries that have such risk exposure
Table 7.2.a Market Risk Disclosures by using Internal Model (Value at Risk/
VaR) – Individual Bank (In Million Rupiah)
31 December 2018 31 December 2017
No Type Of Risk Average Maximum Minimum VaR at End of Average Maximum VaR at End Minimum VaR VaR VaR VaR Period VaR VaR of Period
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
1 Interest Rate Risk ------
2 Foreign Exchange Risk ------
3 Option Risk ------
Total ------
Annual Report 2018 74 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Liquidity Risk
Liquidity risk is a risk due to the inability of the Bank to meet the conducts stress testing of liquidity risk under various scenarios. In maturity liabilities of cash flow funding sources and/or of high addition, the Bank has a Contingency Funding Plan policy which quality liquid assets that can be mortgaged, without disrupting the contains measures to be taken by the Bank in anticipating and activities and financial condition of the bank. The Bank’s liquidity facing liquidity difficulties, among others: money market loan, repo, is affected by the structure of funding, asset liquidity, liabilities sale of securities, and pricing strategy. to counterparty, and credit commitment to the debtor. The Bank The management of daily liquidity conditions is carried out by the exercises liquidity risk control by setting limits that refer to both Treasury Division. Monitoring and controlling of liquidity risk is regulator and internal regulations. carried out by the Risk Management Work Unit by observing the To ensure the Bank’s ability to fulfill its obligations to customers, as analysis of changes in internal conditions and external factors well as the impact of changes in market factors and internal factors including macroeconomic changes submitted to the Asset and on extreme conditions against liquidity conditions, the Bank Liability Committee (ALCO).
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 75 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 9.1.a Disclosure of Rupiah Maturity Profile - Bank in Individual (In Million Rupiah)
31 December 2018 Maturity No Account Balance > 1 Month > 3 Months > 6 Months ≤ 1 Month > 12 Months Until 3 Until 6 Until 12 (1) (2) (3) (4) (5) (6) (7) (8) I BALANCE SHEET
A Assets
1 Cash 199,864 199,864
2 Placements with Bank Indonesia 913,450 913,450
3 Placements with Other Banks 353,587 353,587
4 Securities 243,411 243,411
5 Loans 9,692,706 508,996 574,426 1,021,833 2,393,776 5,193,675
6 Other Receivables -
7 Others - -
Total Assets 11,403,018 2,219,308 574,426 1,021,833 2,393,776 5,193,675 B Liabilities
1 Third Party Funds 10,826,913 8,859,367 1,388,630 448,176 130,740 -
2 Liabilities with Bank Indonesia -
3 Liabilities with Other Banks 94,998 93,498 1,500
4 Issued Securities -
5 Borrowings -
6 Other Liabilities -
7 Others -
Total Liabilities 10,921,911 8,952,865 1,388,630 448,176 132,240 -
Difference in Assets with Liabilities in the 481,107 (6,733,557) (814,204) 573,657 2,261,536 5,193,675 Balance
II ADMINISTRATIVE ACCOUNT
A Administrative Account Receivables
1 Commitment - -
2 Contingencies -
Total Administrative Account Receivables - -
B Administrative Account Liabilities
1 Commitment 1,664,197 147,170 218,925 328,323 578,553 391,226
2 Contingencies -
Total Administrative Account Liabilities 1,664,197 147,170 218,925 328,323 578,553 391,226
Difference in Receivables with Liabilities in (1,664,197) (147,170) (218,925) (328,323) (578,553) (391,226) Administrative Account
Difference [ (IA-IB) + (IIA-IIB) ] (1,183,090) (6,880,727) (1,033,129) 245,334 1,682,983 4,802,449
Cumulative Difference 1,183,090 6,880,727 1,033,129 245,334 1,682,983 4,802,449
Annual Report 2018 76 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 9.1.a Disclosure of Rupiah Maturity Profile - Bank in Individual (In Million Rupiah)
31 December 2017 Maturity No Account Balance > 1 Month > 3 Months > 6 Months ≤ 1 Month > 12 Months Until 3 Until 6 Until 12 (1) (2) (3) (4) (5) (6) (7) (8) I BALANCE SHEET
A Assets
1 Cash 199,864 166,206
2 Placements with Bank Indonesia 913,450 841,440 -
3 Placements with Other Banks 353,587 719,738
4 Securities 243,411 174,334
5 Loans 9,692,706 577,555 753,681 1,053,069 2,010,386 4,717,857
6 Other Receivables -
7 Others - -
Total Assets 11,403,018 2,479,273 753,681 1,053,069 2,010,386 4,717,857 B Liabilities
1 Third Party Funds 10,826,913 9,427,866 966,194 112,989 22,309
2 Liabilities with Bank Indonesia -
3 Liabilities with Other Banks 94,998 181,733 15,354 25,500
4 Issued Securities -
5 Borrowings -
6 Other Liabilities -
7 Others - -
Total Liabilities 10,921,911 9,609,599 981,548 112,989 47,809 -
Difference in Assets with Liabilities in the 481,107 (7,130,326) (227,867) 940,080 1,962,577 4,717,857 Balance
II ADMINISTRATIVE ACCOUNT
A Administrative Account Receivables
1 Commitment - -
2 Contingencies -
Total Administrative Account Receivables - -
B Administrative Account Liabilities
1 Commitment 1,664,197 300,842 318,323 411,636 783,159 635,542
2 Contingencies -
Total Administrative Account Liabilities 1,664,197 300,842 318,323 411,636 783,159 635,542
Difference in Receivables with Liabilities in (1,664,197) (300,842) (318,323) (411,636) (783,159) (635,542) Administrative Account
Difference [ (IA-IB) + (IIA-IIB) ] (1,183,090) (7,431,168) (546,190) 528,444 1,179,418 4,082,315
Cumulative Difference 1,183,090 7,431,168 546,190 528,444 1,179,418 4,082,315
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 77 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 9.2.a Disclosure of Currency Maturity Profile - Bank in Individual (In Million Rupiah)
31 December 2018 Maturity No Account Balance > 1 Month > 3 Months > 6 Months ≤ 1 Month > 12 Months Until 3 Until 6 Until 12 (1) (2) (3) (4) (5) (6) (7) (8) I BALANCE SHEET
A Assets
1 Cash 18,374 18,374
2 Placements with Bank Indonesia 312,682 312,682
3 Placements with Other Banks 35,347 35,347
4 Securities - -
5 Loans 1,896,917 4,222 14,350 191,314 447,708 1,239,323
6 Other Receivables -
7 Others -
Total Assets 2,263,320 370,625 14,350 191,314 447,708 1,239,323 B Liabilities
1 Third Party Funds 2,227,822 1,981,997 124,917 114,302 6,606
2 Liabilities with Bank Indonesia -
3 Liabilities with Other Banks -
4 Issued Securities -
5 Borrowings -
6 Other Liabilities -
7 Others -
Total Liabilities 2,227,822 1,981,997 124,917 114,302 6,606 -
Difference in Assets with Liabilities in the 35,498 (1,611,372) (110,567) 77,012 441,102 1,239,323 Balance
II ADMINISTRATIVE ACCOUNT
A Administrative Account Receivables
1 Commitment -
2 Contingencies -
Total Administrative Account Receivables ------
B Administrative Account Liabilities
1 Commitment 1,832,956 12,334 18,208 13,884 1,788,530
2 Contingencies -
Total Administrative Account Liabilities 1,832,956 12,334 18,208 13,884 - 1,788,530
Difference in Receivables with Liabilities in (1,832,956) (12,334) (18,208) (13,884) - (1,788,530) Administrative Account
Difference [ (IA-IB) + (IIA-IIB) ] (1,797,458) (1,623,706) (128,775) 63,128 441,102 (549,207)
Cumulative Difference 1,797,458 1,623,706 128,775 63,128 441,102 549,207
Annual Report 2018 78 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Table 9.2.a Disclosure of Currency Maturity Profile - Bank in Individual (In Million Rupiah)
31 December 2017 Maturity No Account Balance > 1 Month > 3 Months > 6 Months ≤ 1 Month > 12 Months Until 3 Until 6 Until 12 (1) (2) (3) (4) (5) (6) (7) (8)
I BALANCE SHEET A Assets
1 Cash 1,531 1,531
2 Placements with Bank Indonesia 40,500 40,500
3 Placements with Other Banks 48,787 9,560 39,227
4 Securities 4,995 4,995
5 Loans 73,511 17,030 1,517 11,622 35,272 8,070
6 Other Receivables 1,123 912 211
7 Others -
Total Assets 170,447 69,533 1,728 11,622 35,272 52,292 B Liabilities
1 Third Party Funds 160,901 125,165 30,087 5,543 106
2 Liabilities with Bank Indonesia -
3 Liabilities with Other Banks - -
4 Issued Securities -
5 Borrowings -
6 Other Liabilities 1,123 912 211
7 Others -
Total Liabilities 162,024 126,077 30,298 5,543 106 -
Difference in Assets with Liabilities in the 8,423 (56,544) (28,570) 6,079 35,166 52,292 Balance
II ADMINISTRATIVE ACCOUNT A Administrative Account Receivables
1 Commitment -
2 Contingencies -
Total Administrative Account Receivables ------
B Administrative Account Liabilities
1 Commitment 15,763 145 406 212 15,000
2 Contingencies -
Total Administrative Account Liabilities 15,763 145 406 212 - 15,000
Difference in Receivables with Liabilities in (15,763) (145) (406) (212) - (15,000) Administrative Account
Difference [ (IA-IB) + (IIA-IIB) ] (7,340) (56,689) (28,976) 5,867 35,166 37,292
Cumulative Difference 7,340 56,689 28,976 5,867 35,166 37,292
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 79 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Operational Risk
Operational risk is a risk inherent in daily banking activities. 4. Business Continuity Plan (BCP) Operational risk is the potential loss caused by inadequate internal To ensure the continuity of the Bank’s operations in abnormal processes, human error, system failure, or the presence of external conditions resulting from disasters, the bank has policies factors affecting the Bank’s operations. and measures to be taken in the event of a disaster. Policies and procedures of the bank in ensuring the continuity of The framework of Operational Risk Management (ORM) refers to business operations are regulated in the Business Continuity the regulations of Bank Indonesia, the Financial Services Authority Management (BCM) which includes the Emergency Response (OJK), Basel II and the Bank’s internal regulations in force. Currently, Plan (ERP), Disaste Recovery Plan (DRP) and the Business the Bank has had operational risk management policy and ORM Continuity Plan (BCP). owns Tools which are used as follows: In addition, RMWU also performs its function to review every 1. Key Operational Risk Indicators (KORI): launching plan of new product and activity to ensure the KORI is a simple quantitative indicator that is utilized to provide implementation of comprehensive risk management. The Bank has an indication of the risk level in every Office and Work Unit. risk management guidelines on New Products or Activities. This Identification is carried out on each key process inherent to the guideline aims to ensure the implementation of risk management of stage of end-to-end processing. 8 types of risks from reliable products or activities, implementation 2. Operational Risk Control Self Assessment (ORCSA): of prudential principles and implementation of Good Corporate ORCSA is used to identify and assess the risks inherent to Governance. Thus, all new products or activities issued can be activities, and to assess the quality control of each line of ensured to meet regulatory requirements. business. In terms of operational risk management, RWMU serves as the 3. Operational Risk Event Form (FKRO): second line of defense and SKAI as the third. While the work unit The Bank implements the policy to require all Offices and work as risk owner is the first line of defense that is responsible for the units record the loss of the event and the potential and/or operational risk management from each work unit of the Bank. losses incurred in each activity resulting from the operational risks incurred in their respective functions
Table 8.1.a Quantitative Disclosures of Operational Risk - Bank in Individual (In Million Rupiah)
31 December 2018 31 December 2017
Gross Income Gross Income No Approach Used (Average Capital (Average Capital RWA RWA Of The Last 3 Expense Of The Last 3 Expense Years) Years)
(1) (2) (3) (4) (5) (6) (7) (8)
1 Basic Indicator Approach 494,004 74,101 926,258 400,985 60,148 751,847
Total 494,004 74,101 926,258 400,985 60,148 751,847
Legal Risk
In terms of legal risk, the Bank continues to improve legal risk customer service that governs the provision of excellent service, control, among others by establishing a Legal Division equipped with customer complaint handling procedures and actively publishes human resources who understand legal issues, litigation processes, information to be known by the public. The bank has a helpdesk, so legal review process of legal agreements and contracts between customers can instantly convey complaints and inquiries about the the Bank and other parties. The Bank also appoints competent Bank’s products and services.In addition, the Bank is also actively legal counsel in the case of legal problems and lawsuits from other engaged in Corporate Social Responsibility covering the areas of parties. The Legal Division is obligated to ensure that every activity/ education, health, socio-cultural, sports, environmental and natural transaction has been assessed on the legal side. Legal issues are disaster relief. submitted regularly to regulators through legal risk profile reports, transparently in annual report, and through the Good Corporate Governance Record of the Bank. Strategic Risk
Strategic risk is the risk due to inaccuracy in the making and/or Reputation Risk execution of a strategic decision as well as failure in anticipating changes in the business environment. In the implementation Reputation risk is a risk due to decreased levels of stakeholders of strategic risk, the Bank conducts a performance review and trust, which comes from negative perceptions of the Bank. In evaluation of the preparation policy of business targets and performs reputation risk management, the Bank has a standardized policy of improvement measures in the strategic plan by considering internal
Annual Report 2018 80 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
and external conditions, if necessary. The Bank determines the Periodically improving all employees’ understanding of the Bank’s strategic plans set forth in the Bank’s Business Plan (RBB) for compliance policy conducting socialization, Compliance News, a period of at least 3 years. With regard to the defined business Compliance Review, Compliance Opinion, creating reminder system plan, the Bank shall continuously conduct evaluations monitoring for reporting, updating regulatory provisions and socializing to anticipate changes in the business environment and revise as regulatory provisions necessary.
RISK PROFILE
Compliance Risk Risk profile includes assessment on inherent risk and assessment on application quality of Risk Management that reflects the risk control Compliance risk may arise because the Bank does not comply with system. The assessment is conducted on 8 (eight) risks, namely the provisions of legislation and/or other provisions applicable Credit Risk, Market Risk, Liquidity Risk, Operational Risk, Legal both externally and internally. This risk can have an impact on Risk, Strategic Risk, Compliance Risk and Reputation Risk. Bank the imposition of penalties and sanctions from regulators and conducted the risk management on bankwide manner, as stipulated supervisors of the Bank. To mitigate compliance risks, the Bank in Financial Service Authority Regulation on Risk Management has the Compliance Risk Policy and Guideline as well as Policy of Application for Public Bank. Based on the self assessment, the Compliance Work Unit. In the strategic planning stage, the Bank bankwide risk profile position of December 2018, the Bank risk always assesses the adequacy of applicable law and regulations. profile ranking ranking is Low to Moderate, with details as follows:
Table 10. Measurement of the Bank’s Risk Profile as of December 31, 2018 (in accordance with Risk Profile Report).
RISK MANAGEMENT IMPLEMENTATION TYPES OF RISK INHERENT RISK RATINGS RISK LEVEL RATINGS QUALITY RATINGS
Credit Risk Low to Moderate qualITy Low to Moderate
Market Risk Low to Moderate RaTInGS Low to Moderate
Liquidity Risk Low to Moderate Satisfactory Low to Moderate
Operational Risk Low to Moderate Satisfactory Low to Moderate
Legal Risk Low to Moderate Satisfactory Low to Moderate
Strategic Risk Low to Moderate Satisfactory Low to Moderate
Compliance Risk Low to Moderate Fair Low to Moderate
Reputation Risk Low to Moderate Satisfactory Low to Moderate
Composite Rating Low to Moderate Satisfactory Low to Moderate
Based on the result above on each primary risk groups confronted by bank CCB Indonesia during 2018, the overall composite rating for bank risk profile by December 31, 2018 is still on rank 2 (Low to Moderate). Thus the quality of the implementation of the Bank’s risk management on bankwide basis has been executed well and reflects the condition of a healthy Bank and able to deal with significant negative effects from changes in business condition and other external factors.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 81 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Financial Review
Coastal Decorative Batik
Coastal Batik was strongly influenced by Chinese culture. The pattern of this batik is more flexible unlike Javanese Court Batik that are made with certain rules. This pattern also symbolizes the egalitarian life of coastal communities while using many flora and fauna images.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 83 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Management Discussion and Analysis
The Indonesian economy in 2018 remained robust supported by domestic demand remain intact despite the world economic growth is slowing.
Growth in the world economy slowed along with reduced The momentum of economic growth is maintained, supported uncertainty in the global financial market. US economic growth by domestic demand. Indonesia’s economic growth remained slowed due to the limited fiscal stimulus, structural problems of strong at 5.18% (yoy) in 2018, an increase compared to the previous the workforce, and the decline in business confidence. European year’s growth of 5.07% (yoy), which was the highest achievement economic growth also slowed, among others, influenced by in the last five years. Economic growth was mainly supported by continued economic and financial structural problems, weakening domestic demand in line with increasing household consumption. exports and the impact of uncertainty over the settlement of Investment also remained high due to investor optimism that was the Brexit problem. Meanwhile, the Chinese economy slowed maintained against Indonesia’s economic outlook. Meanwhile, on the back of weakening exports due to trade tensions with the negative net exports were influenced by sluggish global economic US and slowdown in domestic demand as a result of the ongoing growth and declining commodity prices. Going forward, Bank deleveraging process. In line with the slowing outlook for world Indonesia predicts 2019 economic growth will remain solid in the economic growth, global commodity prices are predicted to decline, range of 5.0-5.4%, supported by domestic demand, especially including world oil prices, as well as the normalization of monetary increased household consumption, and investment that remains policy in developed countries, which tends to not as tight as the strong. initial estimates and uncertainty in the global financial market Various economic indicators in the fourth quarter of 2018 is diminishing. The increase in the Fed Fund Rate (FFR) rate is showed positive developments. The inflow of foreign capital predicted to be lower and the reduction in the central bank balance increased again at the end of 2018 driven by the attractiveness sheet becomes smaller than planned. Global economic and financial of the high domestic financial market and the favorable economic developments on the one hand provide challenges in encouraging outlook, and the uncertainty of the declining global financial market. exports, but on the other hand increase foreign capital inflows to developing countries, including Indonesia
Annual Report 2018 84 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Imports also began to slow in the fourth quarter of 2018 in line with Giro products, which rose by 15% to Rp. 2.57 trillion. Time deposits the impact of the policies taken, including flexible moving exchange increased slightly while savings decreased by 2% rates. Slowing imports in turn could minimize the impact of the Total Assets reached Rp. 15.99 trillion at the end of 2018 or grew decline in exports on the risk of an increase in the current account slightly by 1% despite a credit increase of 14%. This is because deficit, which as a whole 2018 remained under control at a healthy Management’s direction to optimize the balance sheet position level of 2.98% of gross domestic product (GDP). These positive mainly reduces negative carry on excess liquidity. developments then pushed Indonesia’s balance sheet in the fourth quarter of 2018 to record a surplus again and bring the Rupiah into The Bank recorded Profit Before Tax Expenses of Rp 135.62 billion, a stronger trend. Meanwhile, inflation was controlled at a low level of increased from last year, which amounted to Rp 60.30 billion, where 3.13%, and within the target range of 3.5 ± 1%. the increase was supported by the increase in interest income and the acquisition of fees and commissions mainly from corporate Financial system stability was also maintained supported by loans rising banking intermediation, adequate liquidity, high capital, and maintained credit risk. Financial system stability is also The current year’s 2018 profit is Rp 89.86 billion, which adds to under control, supported by strong banking capital and adequate the Bank’s capital organically to anticipate asset growth. With the liquidity. The banking capital ratio remained high with the banking increase in assets throughout 2018, the Bank recorded a CAR ratio capital adequacy ratio (CAR) reaching 22.9% at the end of 2018. of 15.69% at the end of the year compared to last year, which was Banking liquidity was also maintained throughout 2018 reflected 15.75%. The Bank plans to increase capital in 2018 both organically in the ratio of liquid assets to deposits (AL / TPF) of 19 . 3 % . and through other capital increase instruments. Bank placements in monetary operating instruments also increased In the short and medium term, CCB Indonesia directs policies again, so that by the end of 2018 IDR 382.8 trillion was recorded. on improving corporate banking, implementing good corporate In line with this, credit distribution also increased and credit risk governance, developing IT systems, encouraging process was under control. The intermediation function continues to show effectiveness and cost efficiency, and increasing the professionalism improvement, as seen from credit growth, increased from 8.2% and competence of human capital. in 2017 to 11.8% in 2018. Amid the improving credit growth, well- managed credit risk is reflected in the low NPL ratio of 2.4% (gross) or 1.0% (net) and is at a healthy level below 5%. The growth of Third Party Funds (TPF) in 2018 was 6.5%, a decrease compared to the INCOME STATEMENT previous year’s deposits growth of 9.4%. Partially, the condition of Net interest income small banks, especially BUKU 2, experienced a contraction, which showed a decrease in credit by 2% and deposits by 5% with tight Interest income increased by Rp 94 billion or 8.20% to Rp 1,241 liquidity with LDR of 94%. In addition, NPL is higher than banking billion in 2018 compared to Rp 1,147 billion in 2017. Increased interest industry at 3.2% and lower NIM at 5.08% and 1.39% ROA. Meanwhile, income came from increases in Credit and securities. the issuance of shares (IPO and rights issue), corporate bonds, While the interest expense rose by 14.16% from Rp 572 billion in medium term notes (MTN), and NCDs as financing from the capital 2017 to Rp 653 billion in 2018. The increase in interest on deposits, market was recorded at Rp 207.8 trillion (gross). This shows that demand deposits and deposits from other banks contributed corporate financing from domestic sources from both banks and significantly to the net increase in interest expense. Achieving capital markets is still good. In 2019, Bank Indonesia predicts credit growth in demand deposits plays a role in reducing the interest on growth to be in the range of 10-12% (yoy) while growth in deposits is deposits offered by the bank. estimated at around 8-10% (yoy) Thus, net interest income in 2018 is IDR 587 billion, up 2.09% compared to the previous year, which amounted to IDR 12 billion. Financial Performance in 2018 and Its The realization of net interest income is still below the business plan Realization Compared to Bank Business of Rp 620 billion. This is due to the achievement of credit, as well as Plans. the average year-round loans under the business plan, as well as the realization of the LDR level, which is still below the plan, causing 2018 is the second year of consolidation for the Bank after the merger the realization of the NIM to be 4.26% lower than the plan of 4.29%. at the end of 2016 and the launch of a new name to become PT Bank China Construction Bank Indonesia Tbk in early 2017. By focusing Interest Income Translation (in million rupiah) on the Corporate Banking business, CCB Indonesia continues to develop small and medium businesses, and consumer banking, Description 2018 2017 and seeks to become the market maker of the RMB business in Credit 1,113,922 1.043.084 Indonesia. The direction of the Bank’s policy is also adjusted and in Securities 98,159 60.342 line with the current government program to finance infrastructure and support the development of the SME sector. Placements with Other Banks 7,010 40.857 Current account service 21,671 3.002 Compared to the previous year, there was a significant credit growth of 14% to Rp. 11.55 trillion at the end of 2018 where the largest
contribution came from the Corporate segment, which was a new Total 1,240,762 1.147.285 segment. The contribution of the Commercial and Commercial Express segment has decreased due to the increasing trend of NPLs so that the Bank must be careful in distributing new loans in this segment.
The growth of Third Party Funds (TPF) was 3% to Rp. 13.07 trillion at the end of 2018 where most of the contributions were from
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Interest Income Translation (in million rupiah) BALANCE SHEET
Description 2018 2017 Total Assets
Current account 39,694 28.698 The Bank’s total assets reached Rp. 15.99 trillion at the end of 2018 Deposit 547,047 488.451 but under the business plan of Rp. 18.10 trillion. Compared to 2017, total assets grew by 1.27%, increased to Rp 203 billion. The biggest Savings 17,139 17.233 asset growth was due to the increase in credit by 14.24% or Rp. 1,441 Interbank 22,511 17.525 billion from the position of the end of 2017 of Rp. 10,110 billion to Rp. Etc. 27,005 20.641 11,551 billion at the end of 2018
Total 653,396 572.548 Equity
Other Operating Income Total Equity reached Rp 2,516 billion at the end of the year, an increase of Rp 72 billion compared to the position at the end of 2017 Other Operating Income reached Rp. 77.48 billion, better than 2017, but The realization is still below the business plan of Rp 2,545 billion. which amounted to Rp. 39.75 billion. The increase mainly came from Equity grew organically from post-tax profit of Rp 89.86 billion fees and commissions in addition to credit provision and profits from foreign exchange transactions. However, the achievement of Other Operating Income is still below the budget of Rp. 88.78 billion. Credit given Revenues from Trade transactions will continue to be increased, Credit achievement was Rp. 11.55 trillion or around 91.96% of the especially those from Chinese corporate customers. business plan, which amounted to Rp. 12.56 trillion. Loans grew by Rp 1,441 billion, an increase of 14.24% compared to the position at Other Operating Expenses the end of last year, which amounted to Rp 10.11 trillion.
Other Operating Expenses in 2018 amounted to Rp 470.4 billion, Some of the Corporate Banking segment loans were not realized decrease of 1.24% or Rp 5.91 billion compared to the position in 2017 in the expected period, while the Commercial Express (Comex) of Rp 476.31 billion. The decrease in General and Administrative and Commercial segments’ loans declined compared to last year Expenses was Rp. 21 billion. and therefore their growth was more carefully guarded so that the problem loans did not rise. While the Consumer segment In the General and Administrative Expenses group, the biggest experienced a slight increase of Rp 74 billion or 10.26%. decrease came from the defined benefits of work period, publication costs, office rental costs and travel and transportation costs. While Regarding non-performing loans, the gross NPL ratio could be the increase in Labor Expenses mainly came from increases in reduced from last year, slightly decreasing to 2.54% from the bonuses and holiday allowances. previous 3.07%. While on a net basis, the NPL ratio fell to 1.62% compared to the end of last year, which was 2.26% Compared to the business plan, other operating expenses realization can be reduced. Realization of Labor Expenses was Rp. 243.15 billion, which was 11.35% below the budget of Rp. 274.27 billion. While the realization of General and Administrative Expenses was 23.31% below the plan of Rp. 296 billion. This is the success of the Credit Given In Million Rupiah management of reducing overhead costs as an effort to suppress BOPO.
14 Profit before tax
Profit Before Tax Expenses amounted to Rp 135.62 billion, increased 12 from last year’s of Rp 60.3 billion. As explained earlier, the increase in Profit Before Tax Expenses was mainly due to an increase in 10 interest income, an increase in fees and commission revenues and a decrease in general and administrative costs. The increase in fees and commissions is supported by corporate loans. While 8 the decrease in general and administrative expense is mainly due to the reversal of the excess expense of post-employment defined 6 benefits that have been calculated by actuaries. In 2017 the cost of post-employment defined benefits amounted to Rp. 21.25 billion, in 4 2018 there was no accrual at all.
2 Net profit
Net profit in 2018 was recorded at Rp 89.86 billion, increased of 0 80.08% from 2017, which amounted, to Rp 49.90 billion, but still below the business plan, which amounted to Rp 98.52 billion. 2014 2015 2016 2017 2018
Annual Report 2018 86 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
In Million Rupiah
16 19.67%
Deposit
6.99% Current Account
Savings 73.34%
Description 2018 2017
0 Current account 2.571.473 2.243.577 2014 2015 2016 2017 2018 Savings 913.317 925.840
Deposit 9.588.433 9.543.982
Total Assets Loan Total 13.073.223 12.713.399
Third-party funds Total DPK & LDR Last 5 Years Third Party Funds grew 2.83% in 2018 and reached Rp. 13.07 trillion but still slightly below the business plan of 6.3% with the main contribution coming from Current Accounts and Deposits.
Current account realization reached 88.32% or amounting to Rp 2.57 trillion from the planned amount of Rp 2.91 trillion or grew by 14.73% from last year, while Savings realization reached 92.13% or amounting to Rp 913 billion than planned amounting to Rp 991 billion. Significant increase in current account compared to last year came from Corporate and Commercial customers, while Deposits grew 0.52% from last year. The CASA ratio is 26.63% at the end of December 2018.
Savings products still need several new products to maintain growth, compete more competitively, increase transactions and improve non-interest income.
The level of customer trust in the Bank was also well maintained, as reflected in the growth in deposits that was still well below the downward trend in bank interest rates. With the global network of the CCB group, the Bank can also increase the average balance of 2014 2015 2016 2017 2018 demand deposits, especially those from corporate customers DPK LDR
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FINANCIAL RATIO Loan to Deposit Ratio
Minimum Capital Adequacy Ratio The loan to deposit ratio (LDR) per December 31, 2018 is 88.35% lower than the planned amount of 90.00%. As of December 31, 2018 The Minimum Capital Adequacy Ratio (CAR) at the end of 2018 the level of credit achievement was 91.96% of the target, while the reached 15.69%, compared to 2017 which was 15.75% and below level of achievement of funding was 93.69%. In addition, the ratio the business plan which amounted to 16.23% The decrease in of casa funds as of December 31, 2018 was 26.63% lower than the CAR was mainly due to an increase in RWA credit used for growth target of 27.94%. This causes the NIM to become depressed and in Credit, an increase in the number of the Committed Loan Facility turn suppress earnings. In the future, the bank will try to keep the and the provision of a Provided Guarantee. Rapid business growth prudent LDR balanced by efforts to improve better margins so that will continue to be maintained with an adequate CAR above the probability ratios get better. level of 15%. The bank plans to strengthen capital in 2019 to sustain business growth.
Cash Flow Development In Million Rupiah Non-Performing Loan Ratio Description 31 Dec 2018 31 Dec 2017 The gross NPL ratio declined slightly to 2.54% from the previous Operational Cash Flow before Changes 241.735 84.959 3.07% or decreased by Rp 16 billion. While on a net basis, the NPL in Assets and Operating Liabilities ratio fell to 1.62% compared to the end of last year, which was 2.26%. Net Cash Obtained from (Used for) (2.188.005) 1.487.071 Operating Activities Return on Assets Ratio Net Cash Obtained from (Used for) 1.104.971 (760.552) Return on Assets (ROA) ratio per December 2018 is 0.86% higher Investment Activities than the target of 0.81%. Higher ROA compared to the target is Net Cash Obtained from Funding - - caused by the realization of total assets below the target is greater Activities than the realization of pre-tax profit below the target. The decrease Net Increase in Cash and Cash (1.083.034) 726.519 in profit before tax is lower than the plan, among others, due to the Equivalents formation of a larger loss reserve. Cash and Cash Equivalents at 2.909.736 2.184.184 Beginning of Year Return on Equity Ratio Effects of Foreign Currency Changes 6.720 (967) Return on Equity (ROE) ratio in 2018 is 4.31%, lower than the target Cash and Cash Equivalents at End 1.833.422 2.909.736 of 4.73%. This is due to smaller after-tax profits from the business of Year plan. However, ROE increased better than last year’s ratio of 2.46%.
Ne tInterest Margin Cash Flow from Operational Activities
The NIM ratio was 4.26%, slightly lower than the planned NIM of Net cash flows obtained from operating activities amounted to 4.29% but still lower than last year’s NIM of 4.69%. The realization Rp.-2,188 billion, of which the largest revenue came from interest of the NIM was below the target due to the failure to achieve the income, fees and commissions, other income, fair value of securities credit target, which was not only given a higher interest margin, through profit or loss, current liabilities, third party funds and other besides that the achievement of total earning assets was still below banks and other cash inflows totaling Rp 1,591 billion. Whereas its use the business plan. The poor performance of the NIM is also caused is in terms of operating activities for interest payments and other by net interest income that cannot meet the target. Another factor financial expenses, payment of general and administrative fees, is the lack of achievement of casa funds, which also contributed labor expenses, purchases of securities for sale, credit financing, significantly to suppressing cheap sources of funds. payment of other expenses and payment of debts, totaling Rp. 3,779 billion.
Expenses to Revenue ratio Cash Flow from Investment Activities The BOPO ratio per December 31, 2018 is 90.60%, higher than the targeted ratio of 89.98%. This is due to an increase in operational In 2018 cash outflows from investment activities for the acquisition costs due to the provision of CKPN. Whereas in terms of operating of fixed assets amounted to Rp.43 billion, while the cash inflows income there is a decrease in interest income due to not achieving mostly came from the receipt of maturing securities amounting to productive assets. If the operational costs do not take into account Rp.1,013 billion, the proceeds from the sale of fixed assets amounting the assets of impairment losses (CKPN), the realization of the BOPO to Rp.11 billion, the proceeds of sale of abandoned assets of Rp 6 ratio as of December 31, 2018 is 85.60%, while the same position billion and the proceeds of sale of foreclosed assets amounting to is targeted at 87.12%. Thus, it can be concluded that increase in Rp 118 billion. So that the net cash flow from investment activities is reserves for impairment losses on assets is the most significant a surplus of Rp 1,105 billion. factor in increasing the BOPO ratio.
Annual Report 2018 88 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Material Bonds for Capital Goods Investment By focusing on the Corporate Banking business, CCB Indonesia The details of the Company’s capital expenditure are as follows: continues to develop small and medium enterprises, as well as In Million Rupiah consumer banking, and strives to become the market maker of the RMB business in Indonesia. The direction of the Bank’s policy is also Description 31 Dec 2018 31 Dec 2017 adjusted and in line with the current government program to finance Land - - infrastructure and support the development of the SME sector.
Building 7.483 60.059 With the CCB Group’s specialization in infrastructure, CCB Indonesia Repair of assets 2.552 10.388 is optimistic to grow and develop and contribute to Indonesia’s development, especially in the infrastructure sector. CCB as the Office inventory 16.686 8.017 majority shareholder gives its commitment to the development Vehicle 900 3.522 of Indonesia’s CCB, both through strong capital support, as well as business knowledge transfer, increased compliance and risk Assets under construction 15.674 239.802 management and information and operational technology support. Total 43.295 321.788
Marketing strategy
The source of funds used for capital expenditure comes from The management policy and strategy in 2018 was directed at internal sources of the company. Historically the company has a increasing business in mainly corporate banking, strengthening good level of leverage and is able to finance capital expenditure. the implementation of good corporate governance and risk control, The Company’s capital expenditure is mostly aimed at strengthening developing IT systems, encouraging process effectiveness and cost the Company’s operations in order to support the Company’s efficiency, and increasing the professionalism and competence of operational and financial performance. The effect of purchasing human capital. capital goods on the Company’s performance is the ability of the The direction of the Bank’s policy is also adjusted and in line with the Company’s infrastructure to handle fast and high operational current government program to finance infrastructure. activities, the ability to fulfill increasingly complex regulatory reporting requirements, online and on time, the ability to fulfill In business development, it is also accompanied by regular statistical data for risk management reporting and management of capital increase to ensure adequate CAR that supports business the Company. For 2018, capital expenditure is also needed in the development; still consistently improving the application of good context of consolidating and adjusting office facilities related to the corporate governance (GCG) and improving the risk management entry of new majority shareholders in 2016. system; development of office networks and electronic banking; improving the quality of human capital; and strengthening IT system infrastructure. Business prospect
In the future, the outlook for the Indonesian economy is predicted TTargets / Projections for the next year to remain good, even though the global economy that is not yet conducive needs to be closely watched. Amid the prospect of a In 2019, the Bank targeting the growth of credit and third party sluggish global economy, Indonesia’s economic growth in 2019 funds by 10-11% and 5-6% respectively, with a LDR 92-93% is predicted to increase in the range of 5.2% -5.3%. The prospect projection at the end of next year. Loans are expected to reach Rp. of increasing economic growth is supported by strong domestic 12.8 trillion and deposits of Rp. 13.8 trillion. The largest increase in demand, from both consumption and investment. Household credit is planned to come from Corporate Banking, in line with the consumption is predicted to be high in line with the increase in infrastructure sector-lending plan. people’s income. This was supported by inflation maintained at The projection of profit before tax is around Rp 167 billion, with a the level of 3.5–4.0%, increased distribution of social assistance, target of 0.9% ROA and 4.2% ROE. Based on the simulation of credit and consumption for logistical purposes related to the Presidential projections and third party funds mentioned above, the net interest Election / Legislative Election. Meanwhile, investment is predicted income is targeted at Rp 672 billion. to maintain high growth driven by an increase in construction investment and the continuation of infrastructure projects. Increased economic growth was also supported by improved net Capital Plan exports along with slowing import growth. In line with the business growth and direction of the FSA to increase Financial system stability improves with maintained risk. Credit risk the CCB Indonesia group, which currently belongs to the group of remains well managed followed by increased bank credit growth. Commercial Banks Business Activities (BUKU) 2, the Bank plans to Loans are predicted to grow in the range of 10% -13%, while bank increase capital in addition to increasing capital organically. deposits are predicted to grow at a range of 8% -10% with adequate liquidity maintained. Non-bank financing is also predicted to improve In 2019, the Bank will issue capital instruments to support business in line with the growing domestic financial market. growth and maintain CAR at an adequate level. Furthermore, for the development of the Bank to become a group of Business Activities The challenges faced by CCB Indonesia are mainly the increasingly Commercial Banks (BUKU) 3, CCB Indonesia will implement a Limited tight and competitive level of competition in the banking industry, Public Offering through a rights issue in 2019. both in terms of assets and liabilities, including margin spreads. The Bank always sets interest rates prudently at competitive and This, of course, takes into account the realization of targeted asset reasonable levels. growth, so that additional capital can also be used efficiently for business development.
The bank conservatively maintains capital ratios in accordance with
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 89 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
applicable regulations. The position of the KPMM or CAR ratio is Balance of maintained within the limits at a safe level, taking into account the December 31, Conditions and capital add on based on the risk profile assessment, as well as the Description 2018 Treatment of the capital buffer according to Basel III implementation (in Millions of transaction Rupiah) In accordance with the Dividend Policy Board of Commissioners, applicable procedures. Directors, Executive Officers and 11.526 All shares of the Company that have been placed have an equal There is no special Key Employees rights in all respects with the old shareholders including the right treatment. to dividends in accordance with the provisions of the Company’s In accordance with the Articles of Association and the prevailing laws and regulations. Interest income that will still be applicable procedures. 109 received There is no special The amount of cash dividend payments will be related to the profits treatment. obtained by the Company in the relevant financial year, without reducing the rights of the Company’s GMS to determine other Total 11.635 provisions in accordance with the Articles of Association and the prevailing laws and regulations in the Banking sector.
The Company’s management plans a dividend distribution ratio if Changes in Legislation and Accounting there is a cash surplus from operations after the funds have been Policies set aside for reserve funds, funding activities, the Company’s capital The business activities carried out by the Bank are governed expenditure and working capital plans, amounting to a maximum of by a set of policies that have been set by the Financial Services 20% (twenty percent) of the Company’s consolidated net income Authority, Bank Indonesia and other Indonesian legal and regulatory annually, while a minimum of 80% (eighty percent) will be used to provisions. In addition, the Bank’s business activities and business strengthen the Company’s capital. However, if necessary, from time development are also influenced by a series of policies, results of to time the Company may not distribute dividends to the Company’s operational conditions and financial conditions. Shareholders. Since conducting its Initial Public Offering in June 2007, the Company has never made a dividend distribution. There • As a continuation of the reformulation of the monetary policy are no negative covenants in connection with restrictions on third operational framework, Bank Indonesia made improvements to parties in the context of dividend distribution. the minimum statutory reserves and steps to accelerate the implementation of the average minimum statutory reserves to improve the effectiveness of monetary policy transmission in Additional information maintaining economic stability;
There is no material information, regarding investment, expansion, Through Bank Indonesia Regulation No. 20/3 / PBI / 2018 along divestment, business merger / consolidation, acquisition, debt / with the implementation conditions, at the end of the first capital restructuring, and transactions that contain conflicts of quarter of 2018 the Statutory Reserves in rupiahs are set at an interest, which occur in the fiscal year 2018. average of 6.5% (six point five percent) of DPK BUK in rupiahs during a certain reporting period, which must be fulfilled: The following are transactions with related parties. a. on a daily basis of 4.5% (four point five percent); and b. on average by 2% (two percent). Related Party Transactions GWM in foreign currencies is set at an average of 8% (eight In carrying out its business activities, the company also carries percent) of DPK BUK in foreign currencies during a certain out certain transactions with related parties. There are no related reporting period, which must be fulfilled: party transactions that are directly or indirectly related to the a. on a daily basis at 6% (six percent); and Company’s main business activities, which are defined as conflict b. on average by 2% (two percent). of interest transactions based on BAPEPAM-LK No. IX.E.1 “Conflict Furthermore, in the middle of the fourth quarter of 2018, of Interest”. In this financial statement, the term related party is in changes in Statutory Reserves in rupiahs are set at an average accordance with PSAK No. 7 (Revised 2010) concerning “Related of 6.5% (six point five percent) of DPK BUK in rupiahs during a Party Disclosures”. certain reporting period, which must be fulfilled: The following is a table of Provision of Funds to Related Parties at a. on a daily basis of 3.5% (three point five percent); and the end of 2018. b. on average by 3% (three percent). • To prevent and reduce systemic risk and disruption to the intermediation function, strengthening the intermediation function and risk control is carried out through the formulation of intermediation and liquidity macro prudential instruments that pay attention to the economic cycle through improving macro prudential intermediation ratio arrangements and macro prudential liquidity support for commercial banks.
The regulation of macro prudential intermediation ratios and macro prudential liquidity buffers is contained in Bank Indonesia Regulation No. 20/4 / PBI / 2018.
Annual Report 2018 90 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Macro prudential Intermediation Ratio (RIM) is the ratio of the necessary to increase the application of risk management in the results of a comparison between: use of information technology effectively by banks;
Loans given in rupiahs and foreign currencies; and corporate Based on the above considerations, FSA has issued securities in rupiahs and foreign currencies that meet certain FSA Regulation No. 12 /POJK.03/2018 concerning the requirements, which are owned by BUK, against: Implementation of Digital Banking Services
Third Party Funds in the form of demand deposits, savings, • Whereas to improve economic growth and national and time deposits / deposits in rupiahs and foreign currencies, competitiveness policies are needed to encourage the growth excluding interbank funds; and securities in rupiah and foreign of priority sectors, namely the housing sector and the tourism currencies that meet certain requirements, issued by BUK to sector; obtain funding sources. Through the Financial Services Authority Regulation No. 17 / The RIM Current Account is set at the product of the POJK.03/2018 OJK reorganized its Business Activities and multiplication of the Lower Disincentive Parameter or the Upper Office Networks to improve the provisions previously issued in Disincentive Parameter, the difference between RIM and the RIM 2016 Target, as well as Deposits in rupiah.
In the event that the RIM is greater than the upper limit of the Banks can calculate credit or home ownership financing in RIM Target, the fulfillment of the RIM Current account takes into fulfilling the obligations of lending or financing to productive account the BUK KPMM and the Incentive KPMM. businesses Macro prudential Liquidity Buffer (PLM) is a minimum liquidity Banks that open Office Networks in districts or cities of the reserve in rupiahs that must be maintained by Conventional National Tourism Strategic Zone (KSPN) are set and prioritized Commercial Banks in the form of securities that meet certain by the central government as referred to in the Presidential requirements, the amount of which is determined by Bank Regulation concerning the acceleration of the implementation Indonesia for percentage of Third Party Funds in rupiah. of national strategic projects, excluded from the requirements • Furthermore, Bank Indonesia issues Bank Indonesia Regulation Availability of core capital allocations and the balance of office No. 20/8 / PBI / 2018 in order to encourage the running of a network deployment balanced and quality banking intermediation function in • Banks need to strengthen the framework of the application of supporting national economic growth, as an improvement to Risk Management and the method of calculating interest rate macro prudential policies through the arrangement of loan Risk in the Banking Book (interest rate risk in the Banking Book) to value ratios for property loans, financing to value ratios for by using two perspectives, namely the perspective of economic property financing, and advances for motor vehicle loans or value and earnings perspective. It is intended that the Bank financing, while taking into account the principle of prudence can identify risks more accurately and carry out appropriate and consumer protection; corrective actions. • Whereas as an effort to improve bank capability, more optimal Therefore, FSA issued Circular Letter of FSA No. 12 / utilization of information technology development is a SEOJK.03/2018 as a reference in the implementation regarding prerequisite in supporting bank service innovation. the Implementation of Risk Management and Measurement To realize the alignment of business strategies to be more of Risk for the Standard Approach for Interest Rate Risk in the targeted, banks need to provide easy access to information Banking Book (Interest Rate Risk in The Banking Book) technology-based banking services without place and time restrictions to encourage better customer financial management.
Service innovation and alignment of strategies in the use of information technology encourage the banking industry to enter the era of digital banking services. Provision of digital banking services can have an impact on increasing risk, especially on operational risk, strategy risk, and reputation risk so that it is
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 91 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Good Corporate Governance
Materos Decorative Batik
Materos pattern is depiction of small vines which are neatly arranged and interconnected like a picture of life which means an unbreakable companionship. It can also be intrepreted as hope for a prosperous life in an unbreakable kinship. 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Corporate Social Responsibility
CCB Indonesia is committed to participate in sustainable economic development to improve the quality of life and the environment.
CCB Indonesia always strives to provide benefits to the community CSR programs developed by CCB Indonesia are directed to provide as part of Social Responsibility. As a form of social responsibility as positive benefits, among others for: well as concern for others and the surrounding community, CCB 1. Improve the quality of life of the surrounding community who Indonesia routinely holds various social humanitarian activities. are less capable, and beneficial to others and the environment CCB Indonesia is committed to participate in sustainable economic including reforestation program. development to improve the quality of life and the environment. 2. Fulfill the needs of natural disaster victims. CCB Indonesia formulated its Corporate Social Responsibility (CSR) policy based on Law No. 40 of 2007 on Limited Liability 3. Increase the understanding of the small community towards Companies article 1 paragraph 3 in which Social and Environmental banks, to encourage the creation of an independent community. Responsibility is the commitment of CCB Indonesia to participate in As a manifestation of CCB’s social responsibility for others and sustainable economic development to improve the quality of life and the surrounding community, in 2018 CCB Indonesia held various the environment that is beneficial, both for the Company itself, local humanitarian activities as follows: community, and the community at large.
Annual Report 2018 94 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
CSR Realization Report 2018
No Implementation Date Type of Activity Beneficiaries Cost Realization Posting Date
General Public Through the Indonesian Red 1 8-Feb-18 Blood Donation Rp 7.208.500 8-Feb-18 Cross, Jakarta
General Public Through the Indonesian Red 2 2-May-18 Blood Donation Rp 7.470.000 2-May-18 Cross, Jakarta
Farmers, Sindukarto Village, Eromoko Sub- District, Wonogiri District by watering the 3 26-Jul-18 Reforestation Program Rp 17.400.000 31-Jul-18 longan trees donated by CCB Indonesia during the dry season in July - October 2018.
4 26-Jul-18 Social Donations to Orphanage Grahita Orphanage, Bhakti Luhur, Sleman Rp 8.760.600 31-Jul-18
5 27-Jul-18 Social Donations to Orphanage Brayat Pinuji Orphanage, Boro, Yogyakarta Rp 17.991.796 31-Jul-18
Social Donations for Natural General public who became victims of natural 6 4-Aug-18 Rp 50.485.155 31-Aug-18 Disaster disaster - earthquake in Lombok
General Public Through the Indonesian Red 7 9-Aug-18 Blood Donation Rp 7.417.000 13-Aug-18 Cross, Jakarta
General public who became victims of natural Social Donations for Natural 8 15-Oct-18 disaster - earthquake and tsunami in Palu and Rp 20.000.000 15-Oct-18 Disaster Donggala, Central Sulawesi
Kasih Bunda Sejati Foundation, Tambora 9 26-Oct-18 School & Education Aid Rp 14.400.000 6-Nov-18 Jakarta
General public who became victims of natural Social Donations for Natural 10 3-Nov-18 disaster - earthquake and tsunami in Palu, Rp 161.527.810 14-Nov-18 Disaster Central Sulawesi
General Public Through the Indonesian Red 11 8-Nov-18 Blood Donation Rp 8.896.500 21-Nov-18 Cross, Jakarta
Social Donations for Nursing 12 3-Dec-18 Ria Pembangunan Nursing Homes, Cibubur Rp 4.874.425 5-Dec-18 Homes
Farmers, Sindukarto Village, Eromoko Sub-Dis- 13 13-Dec-18 Reforestation Program trict, Wonogiri District by planting 400 sapodilla Rp 30.000.000 10-Jan-19 tree seeds on the slopes to prevent erosion.
Small and Medium Enterprises (SMEs) were given the introduction of financial knowledge 14 20-Dec-18 Banking Education Program literacy for business progress and success as Rp 20.890.750 27-Dec-18 well as socialization of sustainability programs for participation in environmental awareness.
Total CSR Realization 2018 Rp 377.322.536
The social activities mentioned above were not audited. CCB Indonesia did not provide funds for political activities.
Environment
In accordance with the Financial Services Authority Regulation No. 51/POJK.03/2017 on the Implementation of Sustainable Finance, Bank CCB Indonesia is committed to maintain environmental sustainability in daily operational activities, including by maintaining the cleanliness of the office surrounding environment, provision of loan to parties who care about the environment, and reforestation program.
The occurrence of climate change or extreme weather which recently hit the earth globally and caused various disasters, such as long dry season, droughts, landslides. CCB Indonesia was also participated in providing assistance in the form of planting sapodilla and longan seeds, irrigation for reforestation program in Central Java to prevent erosion for barren areas to avoid landslides. In addition, CCB Indonesia holds regular Blood Donation programs which are intended to help people who became victims of natural disasters.
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CCB Indonesia’s social humanitarian activity to earthquake and tsunami victims’ camp in Lagarutu, Mantikulore, Palu, Central Sulawesi
Employment Practices
CCB Indonesia places its employees which are called CCB Indonesia personnel as the company’s capital. The sustainability of the Company is highly dependent on reliable human capital management and able to create work comfort for employees. CCB Indonesia personnel receive attention from the Company such as in relation to the provision of compensation, competency and professionalism development through training, create a comfortable workplace, health insurance coverage for employees and their dependents, respect and protect human rights, and recognize diversity, equality and equal opportunities regardless of race, ethnicity, religion and gender.
Employee Turnover Training Program
Employee Turnover 31-Dec-18 31-Dec-17 Number of Participants Type of Education & Training New Employee Recruitment 197 554 2018 2017
Employee Leaving 308 270 Internal Education 2.492 4.115
Number of Employees at the End External Training 928 1.260 1.382 1.493 of Year Total 3.420 5.375
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CCB Indonesia has implemented sustainable reforestation program since 2014 in two villages, namely Sumberharjo and Sindukarto village, Eromoko, Wonogiri, Central Java.
Social and Community Development Product Responsibility
CSR activities of CCB Indonesia are also directed to improve the In order to maintain public trust and consumer protection, CCB quality of life in the surrounding environment which is beneficial both Indonesia always gives attention in creating a sense of security for the Company itself, the local community, and the community at for its customers. The products and services of CCB Indonesia large. are in accordance with applicable regulations, standards and best practices. Several programs which were carried out in this regard, including social visits to orphanages and nursing homes, blood donations, Every product launched by CCB Indonesia is directed to provide donations of books and stationery for school education for maximum benefits to customers. CCB Indonesia through its front underprivileged children, and other humanitarian actions. CCB liners ensure that the customers can understand the advantages of Indonesia also assisted in planting sapodilla and longan tree seeds, CCB Indonesia products, according to their needs. as well as irrigation for reforestation program in Central Java to The transparency of CCB Indonesia products includes all information prevent erosion for barren areas for the Farmers of Sumberharjo about the products, such as the benefits and uses of the products, Village and Sindukarto Village in the Wonogiri area. The fruits terms and conditions, rights and obligations of each party, time of produced from these donated plants are entirely for the surrounding the agreement ends and ways of settlement, information of the population in order to help the income of the local community. administrative costs imposed, including the risks. CCB Indonesia also participated in providing banking education Each office of CCB Indonesia provides a special unit/ officer to handle by helping small enterpreneurs by providing banking education in complaints from customers, so that problems with customers can order to gain knowledge and financial literacy, for the progress and be immediately followed up within a target completion time in success of their businesses. accordance with the provisions of Bank Indonesia.
Promotion programs of CCB Indonesia products and services are carried out through optimal and transparent marketing communications, without breaking the applicable ethics and rules, in order to reach the targeted awareness and market positioning. CCB Indonesia strives to develop and improve banking services quality by emphasizing on customers satisfaction.
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Good Corporate Governance
The broad and comprehensive implementation of Good Corporate Governance will contribute to profitability, benefit to stakeholders, and the continuation of long-term business growth for Indonesia’s CCB as a public company.
Based on Decree of the minister of Justice and human Rights No. all levels of the organization is an important factor to gain the trust AHU-AH/01/10-0003777 dated November 30, 2016 and Letter of stakeholders that include shareholders/investors, customers, of the Financial Services Authority (OJK) No. S-400/PB.12/2016 correspondent banks, government/regulators, employees, suppliers dated November 30, 2016, a merger was conducted between PT and the surrounding community of CCB Indonesia. This is performed Bank Antar Daerah (PT Bank Anda) into PT Bank windu kentjana because the results of good corporate governance assessment International, Tbk (Bank windu). affect the Risk-based bank soundness (RBBR).
Bank resulting from the merger has been renamed to PT Bank As an institution engaged in banking and as a public company, CCB China Construction Bank Indonesia Tbk in accordance with Decree Indonesia in implementing good corporate governance refers to: of the ministry of Justice and human Rights No. AHU-0003776. • Regulation of the Financial Services Authority No. 55/ AH.01.10 year 2016 dated November 30, 2016. The Letter of the POJK.03/2016 dated December 7, 2016 and Circular Letter of the Financial Services Authority No. S-441/PB.12/2016 dated December Financial Services Authority No. 13/SEOJK.03/2017 dated March 28, 2016 and a Copy of the Board of Commissioners Decree of the 17, 2017 on Implementation of governance for Commercial Bank. Financial Services Authority No. 17/KDK.03/2016 dated December 27 regarding the Stipulation on the use of Permit on behalf of PT • Regulation of the Financial Services Authority No. 45/ Bank windu kentjana International Tbk becoming a business license POJK.03/2015 dated December 23, 2015 on Implementation on behalf of PT Bank China Construction Bank Indonesia Tbk (CCB of Corporate governance in the Provision of Remuneration for Indonesia). Commercial Bank.
The broad and comprehensive implementation of Good Corporate • Regulation of the Financial Services Authority No. 21/ Governance will contribute to profitability, benefit to stakeholders, POJK.04/2015 and Circular Letter of the Financial Services and the continuation of long-term business growth for Indonesia’s Authority No. 32/SEOJK.04/2015 on Implementation of CCB as a public company. Corporate governance guideline of Public Companies.
Maintaining increased implementation of good corporate governance • Regulation of the Financial Services Authority No. 33/ which has been carried out before by maintaining the fulfillment of POJK.04/2014 dated December 8, 2014 on the Board of Directors good corporate governance principles in all business activities at and the Board of Commissioners of Issuers or Public Companies.
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• Regulation of the Financial Services Authority No. 34/ - Guideline for Self Assessment and formulation of good POJK.04/2014 dated December 8, 2014 on Nomination and Corporate governance Report (guideline for Assessment and Remuneration Committee of Issuers or Public Companies. formulation of good Corporate governance Report) as a guide for self assessment and formulation of good Corporate governance • Regulation of the Financial Services Authority No. 55/ report. POJK.04/2015 dated December 23, 2015 on Establishment and working Implementation manual for the Audit Committee. - Code of Conduct This guideline lays down the basic principles of behavior and • Decision of the Board of Jakarta Stock Exchange No. Kep- profession expected from all personnel of CCB Indonesia. 00I83/BE1112- 2018 dated December 26, 2018 on, Regulation Through the Code of Conduct it is expected that strong risk No. 1-A on Registration of Shares and Equity Securities other awareness and a good control environment in CCB Indonesia can than shares issued by a Listed Company. be realized and attached to each personnel of CCB Indonesia. In the above regulations are emphasized that the implementation - Guideline for handling Conflict of Interest of good corporate governance principles should at least be As a guideline for all personnel of CCB Indonesia: realized in: • to understand, prevent and mitigate Conflict of Interest, as • Implementation of duties and responsibilities of the Board of well as Commissioners and the Board of Directors. • to take a firm stand towards Conflict of Interest in the Bank • Completion and implementation of duties of the committees to achieve good corporate management. and work units that run the function of bank internal control. • Implementation of functions of compliance, internal auditor and In addition to the above Policies and guidelines, the implementation external auditor. of good Corporate governance is also based on other internal rules • Implementation of risk management, including internal control which are set in accordance with the regulations and legislation in system. force with reference to the principles of good Corporate Governance. • Provision of funds to related parties and provision of large exposures. • The Bank’s strategic plans. • Transparency of the Bank’s financial and non-financial conditions.
CCB Indonesia is committed to implement the principles of good corporate governance continuously in all business activities at all levels of the organization.
Continuing the efforts of improvements in the implementation of good corporate governance, in 2018, CCB Indonesia maintains and enhances the improvements made in previous years in all three governance aspects, namely governance Structure, governance Process, and governance outcome.
Corporate Governance Principles
In implementing good Corporate governance, CCB Indonesia develops its corporate culture based on the corporate governance General Meeting of Shareholders (GMS) principles: transparency, accountability, responsibility, General meeting of Shareholders (GMS), is the Company’s independency, and fairness. These five principles are constantly instrument whose authority is not granted to the Board of Directors implemented in the business activities and daily operations of the or the Board of Commissioners within the limits prescribed in Law Bank on all levels of the organization. and/or the articles of association
Some of the authorities are: to appoint and dismiss members of Corporate Governance Guideline the Board of Commissioners and the Board of Directors, evaluate Improving the quality of good Corporate governance is an effort the performance of the Board of Commissioners and the Board of to improve the bank’s performance, protect the interests of Directors, approve the amendment of the Articles of Association, stakeholders and improve compliance towards law and regulations approve the Annual Report and determine the form and amount of as well as the code of conduct that apply generally to the banking remuneration, allowances and facilities for members of the Board industry. of Commissioners and the Board of Directors, as well as generate important decisions that in line with the direction and policy of the As a framework that can provide guidance for each bank Bank. organizational unit to act while upholding the principles of good Corporate governance, the Bank has developed Policies and general In 2018, CCB Indonesia has conducted a general meeting of guideline for the Implementation of good Corporate governance Shareholders (GMS) which consists of the Annual GMS and which have been approved by the Board of Commissioners and the Extraordinary GMS, based on Regulation of the Financial Services Board of Directors. Authority No. 32/POJK.04/2014 dated December 8, 2014 on Planning and Implementation of general meeting of Shareholders of Provisions of the implementation of Policies and general guideline Public Companies, as follows: for the Implementation of good Corporate governance have been Annual GMS held on May 30, 2018 prepared by the Bank in the following form: In the meeting, have been taken the following resolutions:
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1. Approve the Company’s Annual Report including the Report of The composition of the Board of Commissioners of the company Supervisory Duties of the Board of Commissioners about the has been approved by the Financial Services Authority No. SR-17/ conditions and performance of the Company for the financial PB.322/2019 dated February 12, 2019 and No. SR-18/PB.322/2019 year 2017 and ratification of the Company’s financial Statements dated February 20, 2019. for the financial year 2017 which has been audited by the Public None of the Independent Commissioner has financial, managerial, Accounting. ownership and family relationship with other members of the 2. Approve the use of the net profit of the financial year of 2017. Board of Commissioners, the Board of Directors and/or Controlling Shareholders or any relationship with CCB Indonesia which could 3. Approve the changes and appointment of members of the Board affect the ability to act independently. of Directors and the Board of Commissioners of the Company. All members of the Board of Commissioners has meet the 4. Approve to grant the power of attorney to the Board of requirements stated in the Regulation of Financial Services Commissioners to determine the amount of salaries, allowances Authority No. 33/POJK.04/2014 (previously Capital Market authority and bonuses of the members of the Board of Directors. regulation IX.I.6). Financial Services Authority Regulation No. 27/ 5. Approve to grant the power of attorney to the majority/main POJK.03/2016, and Financial Services Authority Circular Letter Shareholders to determine the amount of salaries, allowances No.39/SEOJK.03/2016. and bonuses of the members of the Board of Commissioners. Board of Directors 6. Approve to delegate to the Board of Commissioners on the President Director : You Wen Nan recommendation of the Audit Committee to appoint and Director : Zhu Yong*) determinate a Public Accounting which will audit the Company’s Director : Setiawati Samahita financial statements for the financial year 2018. Director : Junianto Director : Chandra Nangkok Tua Siagian Approve to grant the power of attorney to the Board of Directors and/ Director of Compliance : Agresius Robajanto Kadiaman **) or Corporate Secretary, either jointly or individually with substitution right to state all resolutions in the Annual GMS agenda, make and The composition of the Company’s Board of Directors has been recorded in the supervision of the Financial Services Authority according to letter No. SR-18/ sign all letters and/or certificates required, inform and apply for PB.322/2019 dated February 20, 2019. approval taken in the Annual GMS and report to relevant authorities where necessary, give explanations, make, ask for and sign all the *) Effective March 29, 2019 **) Effective February 6, 2019 letters/certificates required and then perform everything deemed necessary and useful to carry out all those resolutions Susunan Direksi Perseroan telah dicatat dalam administrasi pengawasan Otoritas Jasa Keuangan sesuai surat No. SR-18/ PB.322/2019 tanggal 20 Februari 2019.
All members of the Board of Directors CCB Indonesia does not have relationship in terms of financial, managerial, ownership and family with other members of the Board of Directors, Board of Commissioners, and/or the Controlling Shareholders or relationship with the CCB Indonesia, which could affect its ability to act independently.
All members of the Board of Directors has meet the requirements stated in the Regulation of Financial Services Authority No. 33/ POJK.04/2014 (previously Capital Market Authority Regulation IX.I.6), Financial Services Authority Regulation No.27/POJK.03/2016, and Financial Services Authority Circular Letter No.39/SEOJK.03/2016.
Board of Commissioners Board of Commissioners and the Board of Composition of the Board of Commissioners at the beginning of Directors 2018 did not change if compared to the composition of the previous period based on the resolution of Extraordinary GMS on May 30, Corporate management system is performed in a dual-control where 2017 as follows: there is a clear separation between the functions and responsibilities President Commissioner : Yang Ai Min of the Board of Directors in charge of the management of the Bank Commissioner : Qi Jian Gong with the function of the Board of Commissioners in charge of the Commissioner (independent) : Mohamad Hasan supervisory function of the Bank. Commissioner (independent) : Yudo Sutanto
Board of Commissioners Based on the Extraordinary General Meeting of Shareholders dated President Commissioner : Sun Jianzheng*) February 2, 2018, the composition of the Company’s members of Commissioner : Qi Jian Gong the Board of Directors and Board of Commissioners whose term of Commissioner (independent) : Mohamad Hasan office will expire until the closing of the Company’s Annual General Commissioner (independent) : Yudo Sutanto Meeting of Shareholders for 2018 is as follows: *) Effective January 25, 2019
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President Commissioner : Yang Ai Min approval, so that it has not been declared effective. Therefore, the Commissioner : Qi Jian Gong composition of the Board of Commissioners after the appointment Commissioner (independent) : Sjerra Salim*) of Mr. Sun Jianzheng as the Main Commissary received approval Commissioner (independent) : Mohamad Hasan from the authorities, the composition of members of the Board of Commissioner (independent) : Yudo Sutanto Commissioners and Directors whose term of office will expire until the closing of the Annual General Meeting of Shareholders for 2018 with notes : becomes the following: *) the appointment of Mrs. Sjerra Salim is only effective after obtaining approval from the authorities. President Commissioner : Sun Jianzheng*) Based on OJK Letter No. SR-50/PB.121/2018 dated April 23, 2018, Commissioner : Qi Jian Gong the appointment of Mrs. Sjerra Salim as Independent Commissioner Commissioner (independent) : Mohamad Hasan cannot be followed up since the supervisory function of 4 (four) Commissioner (independent) : Yudo Sutanto members of the Board of Commissioners is currently considered to be sufficient in accordance with the complexity of the Bank . with notes : *) new appointments are effective after obtaining approval from the authorities. Based on the Annual General Meeting of Shareholders dated 30 On December 31, 2018, there are 4 (four) members of the Board of May 2018, the resignation of Mr. Yang Aimin who is the Company’s Commissioners and 3 (three) effective members, and not exceeding President Commissioner has been approved. While the appointment the number of Directors. of Ms. Sjerra Salim as the Company’s (Independent) Commissioner at the Extraordinary General Meeting of Shareholders of the Company on February 2, 2018 was declared not continued. Mr. Sun Jianzheng Composition of the Board of Commissioners was submitted as the President Commissioner, thus the composition In 2018, members of the Board of Commissioners consist of of the members of the Company’s Board of Commissioners whose Independent Commissioners and Non Independent Commissioners, term of office will expire until the closing of the Company’s Annual with a composition of 50% or more members of the Board of General Meeting of Shareholders for 2018 is as follows: Commissioners being Independent Commissioners. President Commissioner : Sun Jianzheng*) Commissioner : Qi Jian Gong Total Commissioner (independent) : Mohamad Hasan Commissioner (independent) : Yudo Sutanto Period Member of the % Board of Independent with notes : Commissioners *) new appointments are effective after obtaining approval from the authorities. January 1, 2018 until 4 2 50% Based on the Extraordinary General Meeting of Shareholders dated May 30, 2018
October 10, 2018, Mr. Sun Jianzheng, who was previously appointed May 30, 2018 until 3 2 66,67% at the Annual General Meeting of Shareholders on May 30, 2018, December 31, 2018 the President Commissioner is still in the process of filing OJK
OJK Approval Date of GMS No Name Position Approval letter Date LB RUPS
1 Yang Aimin President Commissioner OJK Letter No. KEP-93/D.03/2017 dated June 6, 2017 Oct 14, 2016 June 5, 2017
2 Qi Jian Gong Commissioner OJK Letter No. KEP-94/D.03/2017 dated June 6, 2017 Oct 14, 2016 June 5, 2017
3 Mohamad Hasan independent Commissioner BI Letter No.12/72/GBI/DPIP/Rahasia dated June 7, 2010 May 16, 2014 June 7, 2010
4 Yudo Sutanto, Nyoo independent Commissioner OJK Letter No. KEP-63/D.03/2016 dated Oct 27, 2016 Oct 14, 2016 October 27,2016
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Sun Jianzheng department. In period March 2008 until now, he was appointed as Deputy general manager and Chief manager responsible for bank Being the President Commissioner of the Company since January strategic investment in Strategi Investment and managemen 25, 2019 Department.
Chinese citizen, born in Hebei, China in 1963. He obtained a As non-independent commissioner, he performs the functional Bachelor’s degree in Law from Peking University, China in 1986 and duties of China Construction Bank Corporation (bank shareholder in a Master’s degree in Law from Peking University, China in 1988, and the form of legal entity). a Doctoral degree in National Economics from Peking University, China in the year 2003. The training followed in 2018 is the “Fintech” Training on 20 October 2018 - 14 November 2018 at the University of Toronto, Canada. He has been the President Commissioner of the Company since January 25, 2019. He began his career at the China Investment As a member of the Board of Commissioners fulfills the requirements Consulting Corporation in August 1988 until May 1990. Subsequently as set out in the Financial Services Authority Regulation Number 33/ began his career in China Construction Bank Corporation in May POJK.04/2014 (formerly Bapepam IX.I.6 Regulation), Number 27/ 1990 until now, occupying various key and strategic positions, POJK.03/2016, Circular of the Financial Services Authority No.39/ including Deputy General Manager of Institutional Reform Executive SEOJK 03/2001 and obtained approval from the Financial Services Office, Deputy General Manager of Asset & Liability Management Authority No. KEP-93/D.03/2017 dated June 5, 2017. Department, Deputy General Manager of International Business Special Assignment: Department and final position as General Manager of Equity and Member of the Remuneration and Nomination Committee since Investment Management Department, which is responsible for September 27, 2017 investment domestic and foreign equity, management of share ownership of subsidiaries and rural banks, management of strategic cooperation with strategic investors, since June 2015 until now. Mohamad Hasan In the period October 2008 to August 2015 he held concurrent positions at China Construction Bank (London) Limited as a Non- Independent Commissioner Executive Director, in addition to the main positions at China Indonesian citizen, born in Palembang in 1944. He obtained his Construction Bank Corporation, Head Office. Bachelor of Law degree in 1972 from Sriwijaya University, Palembang. For information, starting January 25, 2019 he was effective as the he became an Independent Commissioner since June 24, 2010 and President Commissioner of the Company, in addition to his main continued after the merger between Bank windu and Bank Anda as position as General Manager of Equity and Investment Management of November 30, 2016 as approved by Financial Services Authority Department of China Construction Bank Corporation. No. SR-104/PB.12/2016.
As a Commissioner, (Main) Non Independent undertakes He began his career at Citibank Jakarta from May 1974 until April 1977. functional duties from China Construction Bank Corporation (Bank Then he started his career in PT multinational finance Corporation shareholders in the form of legal entities). (PT multicor) since May 1977. from August 1985 until october 1991, he was appointed as Executive Director; and November 1991 until The training followed in 2018 is Level 1 Risk Management Certification January 2003 as President Director. he served as Independent Training by LSPP. Commissioner in PT Bank
As a member of the Board of Commissioners fulfills the requirements multicor from June 2003 until June 2008. Started from october as set out in the Financial Services Authority Regulation Number 33/ 2008 until 2009, POJK.04/2014 (formerly Bapepam IX.I.6 Regulation), Number 27/ POJK.03/2016, Circular of the Financial Services Authority No.39/ he served as commissioner on several national private companies SEOJK 03/2001 and obtained approval from the Financial Services in Jakarta. Authority No. KEP-11/D.03/2019 dated January 17, 2019. And since May 2010, he was reappointed as Independent Commissioner of the Company.
Qi Jiangong The training followed in 2018 as follows: 1. Workshop on “Regulation and Implementing Strategy for Commissioner Executive Compensation” (Refreshment Risk Management Certification) by the Bank Association for Risk Management on Chinese citizen, born in Shanxi, China on June 11, 1970. he obtained February 21, 2018 in Jakarta his Bachelor of Economics degree from Renmin University of China 2. Refreshment of APU PPT 2018 by CCBI Online Training on in 1992 and master degree from University of International Business September 9, 2018 and Economics, majoring International Accounting management graduated in year 1997. As a member of the Board of Commissioners, he has met all the requirements stipulated in the Financial Services Authority He was appointed as commissioner through GMS dated october 14, Regulation No. 33/POJK.04/2014 (previously Capital market 2016, and that appointment is declared effective from June 6, 2017 authority regulation IX.I.6) and has obtained the approval from the until now. Financial Services Authority No. SR-104/PB.12/2016 date November He began his career at China Construction Bank Corporation 30, 2016. since July 1997 as Business manager responsible in asset/liability Special Assignment: management. In period october 2000 until March 2001, he held Chairman of the Remuneration and Nomination Committee since various strategic position at China Construction Bank Corporation. october 22, 2010 until now. In period March 2001 until July 2008, he was appointed as Chief Chairman of the Audit Committee since March 14, 2017 until now. manager and Deputy Chief manager responsible in financial market
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Yudo Sutanto b. Board of Commissioners shal direct, monitor, and evaluat the implementation of the Bank’s strategic policy including the Independent Commissioner evaluation of the Bank’s Business Plan.
Indonesian citizen, born in malang, East Java in 1954. he obtained c. Board of Commissioners shall examine, correct and approve his Bachelor of finance in 1981 from California State Los Angeles, the Bank’s Annual Report. united States of America. He was appointed as an Independent 2. Board of Commissioners must ensure the implementation of Commissioner since November 2, 2016 as approved by the Financial good Corporate governance in each business activities in all Services Authority No. SR-173/PB.121/2016. levels of the organization. In carrying out these functions, there He began his career in PT Bank Antardaerah since 1982 in various are several rules that need to be considered, such as: key positions. In 1990, he was appointed as President Director and a. Board of Commissioners shall notify Financial Services in 1999 as the Chairman of Audit Board of PT Bank Antardaerah. Authority at least seven (7) working days after the findings Starting March 1999, he served as a member of the Board of of: Commissioners. • violation of law and regulations in the field of finance and The training followed in 2018 as follows: banking. 1. Workshop on “Regulation and Implementing Strategy for • Circumstances or estimation of circumstances that can Executive Compensation” (Refreshment Risk Management endanger the Bank’s business continuity. Certification) by the Bank Association for Risk Management on b. Board of Commissioners shall ensure that the Board February 21, 2018 in Jakarta of Directors has followed up on audit findings and 2. Refreshment of APU PPT 2018 by CCBI Online Training on recommendations from the Bank Internal Audit function and September 9, 2018 Public Accountant, as well as the results of supervision of As a member of the Board of Commissioners fulfills the requirements Bank Indonesia and/or other authorities. as set out in the Financial Services Authority Regulation Number 33/ c. Board of Commissioners is entitled to appoint Public POJK.04/2014 (formerly Bapepam Regulation IX.I.6), Number 27/ Accountant by considering the recommendation of the Audit POJK.03/2016, Circular of the Financial Services Authority No.39/ Committee. SEOJK 03/2001 and obtained approval from the Financial Services Authority No. KEP-63/D.03/2016 dated October 27, 2016. 3. Board of Commissioners formed Committees underneath to support the effectiveness of the implementation of its duties Special Assignment: and responsibilities, which at least consists of: Chairman of the Risk Monitoring Committee since February 21, 2017 a. Audit Committee, In 2018 the number, composition, criteria and independence of b. Risk Management Committee, and members of the Board of Commissioners have complied with the c. Remuneration and Nomination Committee. provisions of the Financial Services Authority that regulates the 4. Members of the Committees under the Board of Commissioners Implementation of Governance for Commercial Banks and Public are appointed by a decree of the Board of Directors accompanied Companies. However, at the end of 2018 the composition of the by ratification by the Board of Commissioners. Board of Commissioners has not fulfilled the provision that the Board of Commissioners must be led by the president commissioner 5. Board of Commissioners must ensure that the established or principal commissioner, in relation to the ineffectiveness of the committees effectively carry out their duties. appointment of the President Commissioner. 6. Board of Commissioners coordinates with the Board of Directors Appointment of Mr. Sun Jianzheng as the President Commissioner in growing, ensuring, and overseeing the compliance of the of the company has obtained approval from the Financial Services Bank against internal and external regulations. Authority in accordance with letter No. KEP-11/D.03/2019 dated 7. Members of the Board of Commissioners are prohibited to give January 17, 2019, and has been effective as of January 25, 2019 general authority to other parties that may result in the transfer of duties and responsibilities of the Commissioner.
a. Duties and Responsibilities of the Board of 8. Board of Commissioners may give special authority to 2 (two) Commissioners members of the Board of Commissioners to take actions that are routine and not strategic. The measures as intended must 1. The Board of Commissioners shall supervise the be reported in the next meeting of the Board of Commissioners. implementation of duties and responsibilities of the Board of Directors, as well as advising the Board of Directors. In The Board of Commissioners has performed supervisory function performing these duties, there are several rules that need to on the implementation of duties and responsibilities of the be considered, such as: Board of Directors on a regular basis and provides advice and recommendations to the Board of Directors a. The Board of Commissioners is prohibited from being involved in the decision making process of Bank Board of Commissioners has provided time to perform its duties and operations, except responsibilities optimally such as by attending the bank office to • Lending to Related Parties and/or other transactions carry out its supervisory functions. involving related parties as stipulated in the Regulation of Bank Indonesia on Legal Lending Limit of Commercial Bank b. Board of Commissioners Meetings • Other matters specified in the Articles of Association of The Board of Commissioners has had a guideline in the the bank or applicable law and regulations. implementation of the Board of Commissioners meetings with
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on Implementation of Corporate governance for Commercial Bank, and the work guideline of the Board of Commissioners which regulates the Assessment and Evaluation of Performance of the Board of Commissioners.
During the year 2018, implementation of meetings of the Board of Commissioners has run wel which can be seen from the meeting documentation.
Decision-making by the Board of Commissioners has been performedmbased on the principle of consensus. Results of the meetings have been noted in the minutes of meetings, well documented and circulated to all members of the Board of Commissioners and other related parties. The results of the meetings are recommendations and/or advises to the Board of Directors on the bank’s business activities.
During the year 2018, the Board of Commissioners has held 6 (six) reference to the Regulation of the Financial Services Authority No. Board of Commissioners meetings, 3 (three) of them were attended 33/POJK.04/2014 date December 8, 2014 on Board of Directors physically by all members of the Board of Commissioners, and 1 and the Board of Commissioners of Issuers and Public Companies, (one) through teleconference facilities. regulation of the Financial Services Authority No. 55/POJK.03/2016
Qi Jian Mohamad Yudo No Date Meeting Aenda Yang Aimin Gong Hasan Sutanto
• Priority to fill in the Risk Director Position March 16, 1. • Remuneration - √ √ √ 2018 • Insurance
April 12, • Remuneration 2. TC TC √ TC 2018 • Results of Meeting with OJK
• Recommendations for appointing an Audit Committee coordinator and Risk Moni- toring Committee Agt 20, • Empowerment Strategy for the Risk Management Function and Internal Audit 3. TC √ √ 2018 Function; • Recommendations that an annual CCBI audit be carried out by the audit team from the CCB Head Office
• Nomination of Compliance Director 4. Sep 7, 2018 • Following up on the terms and conditions stated in the offering letter of the √ √ √ Finance Director
• Update of Compliance Director, Financial Information, Corporate Banking and Main Declaration Nov 15, 5. • Recruitment of Head of Internal Audit Unit TC √ √ 2018 • Discuss strategic steps to implement Board of Commissioners recommendations • Action Plan for Progress Reports;
• Discussion on improving the Board of Commissioners and Committees under the Des 11, Board of Commissioners 6. √ √ TC 2018 • Progress report on Government Structure • Legal case
√: Present at the meeting, - : Not Present at the meeting, TC : via teleconference,
Thus, the number of meetings held, the number of meetings Remuneration and Nomination Committee, and the Risk attended physically by all members of the Board of Commissioners Monitoring Committee to submit recommendations that must has fulfilled the provisions of the Financial Services Authority, which be followed up by the Directors. regulates the Directors and Board of Commissioners of Issuers or Public Companies, as well as the Financial Services Authority provisions governing the implementation of Good Corporate d. Training attended by members of the Governance in Commercial Banks. Board of Commissioners Members of the Board of Commissioners have the willingness c. Board of Commissioners and ability to carry out continuous learning in order to increase Recommendations knowledge about banking and the latest developments related to the financial sector/others that support the implementation As a follow-up monitoring of the performance of Indonesia’s of their duties and responsibilities. CCB during 2018, the Board of Commissioners, taking into The training that has been attended by members of the Board of account the recommendations of the Audit Committee, the Commissioners in 2018 is as follows:
Annual Report 2018 104 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Name Training Date Location
Sun Jianzheng Risk Management Certification level 1 training by LSPP Aug 10, 2018 Jakarta
Qi Jiangong Training “Fintech” di University of Toronto. Oct. 20, 2018 -Nov 14, 2018 Canada
Workshop “Regulation and Implementing Strategy for Feb 21, 2018 Jakarta Executive Compensation” (Refreshment Risk Management Mohamad Hasan Certification) by Bank Association for Risk Management.
Refresehment APU PPT 2018 Sep 9, 2018 Jakarta
Jakarta Workshop “Regulation and Implementing Strategy for Feb 21, 2018 Executive Compensation” (Refreshment Risk Management Yudo Sutanto Certification) oleh Bank Association for Risk Management.
Refresehment APU PPT 2018 Sep 9, 2018 Jakarta
e. Effectiveness and efficiency of supervision .f. Meetings of the Board of Commissioners and the performed by the Board of Commissioners Board of Directors
Periodically, the Board of Commissioners oversees the Board of During 2018, the Board of Commissioners has held 9 (nine) Directors and Committees under the Board of Commissioners. meetings with the Board of Directors. The oversees is performed through meetings between the Board of Commissioners and the Board of Directors and also between the Board of Commissioners and the Committees
No Date Meeting Agenda Attendees
1. Qi Jian Gong 2. Mohamad Hasan 3. Yudo Sutanto 1. Business Plan 2018 - 2020 4. You Wennan 2. Related Party Loans 1 Mar 16, 2018 5. Setiawati Samahita 3. Business Performance Indicators 6. Junianto 4. Additional Tier-2 Capital Also present: 7. Andreas Basuki (Corsec)
1. Mohamad Hasan 2. You Wennan 3. Setiawati Samahita 1. Audit OJK 4. Junianto 2 Jul 12, 2018 2. Human Capital Also present: - Purnomo - Loretta Kowara
1. Mohamad Hasan 2. Yudo Sutanto 3. You Wennan 1. Case of PT Griya Wijaya Prestige 4. Setiawati Samahita 3 Aug 28, 2018 2. Internal control system in business processes by the 5. Junianto Board of Directors Also present: Andreas Basuki
1. Qi Jiangong 2. Mohamad Hasan 3. Yudo Sutanto 1. Nomination of Compliance Director 4. You Wennan 4 Sep 07, 2018 2. Following up on the terms and conditions stated in the 5. Setiawati Samahita offering letter of the Finance Director 6. Junianto
Also present: Andreas Basuki
1. Mohamad Hasan 2. Yudo Sutanto 3. Qi Jian Gong (telekonferensi) 4. You Wennan 5 Sep 21, 2018 1. OJK Audit Findings 5. Setiawati Samahita 6. Junianto
Also present: Andreas Basuki
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 105 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
No Date Meeting Agenda Attendees
1. Qi Jiangong 2. Mohamad Hasan 1. Progress of Corrective Action 3. Yudo Sutanto 2. Case of PT Griya Wijaya Prestige 4. You Wennan 6 Oct 10, 2018 3. BOD strategy to handle the NPL ratio 5. Setiawati Samahita 4. Audit report of the Internal Audit Unit 6. Junianto 5. OJK Exit Meeting Also present: Andreas Basuki
1. Mohamad Hasan 2. You Wennan 3. Setiawati Samahita 7 Nov 15, 2018 Update the Improved Governance Structure Status 4. Junianto
Also present: Andreas Basuki
1. Qi Jiangong 2. Mohamad Hasan 3. You Wennan 8 Nov 26, 2018 1. RBB 2019 – 2021 4. Chandra Siagian
Also present: Andreas Basuki
1. Qi Jiangong 2. Mohamad Hasan 1. Performance of each member of the Board of Directors; 3. You Wennan 2. Improved OJK checks by each member of the Board of 4. Chandra Siagian 9 Dec 11, 2018 Directors; 5. Junianto 3. 2019 work plan by each member of the Board of Directors 4. Tier2 debt and capital injection plan Also present: Andreas Basuki
The supervision carried out by the Board of Commissioners on for obtaining facts/information directly. the Directors and Committees under the Board of Commissioners 4. Assess risk management through discussion of risk profile during 2018 has been effective and efficient. that includes credit risk; market risk; liquidity risk; operational risk; legal risk; reputation risk; strategic risk; and compliance risk. g. The supervisory mechanism conducted by the Board of Commissioners on the Board of Directors and the 5. Review and discuss the annual work plan of the External Audit Committees under the Board of Commissioners and Internal Audit, improvement of competence and findings during the current year. The Board of Commissioners also The Board of Commissioners fully supports the efforts to monitors the corrections against the finding of external audit, improve the implementation of good corporate governance including the audit of the Financial Services Authority and the in CCB Indonesia. The main attention was the improvement of audit of the Public Accounting firm. three governance aspects: governance Structure, governance 6. Provide recommendations on the appointment of Public Process, governance outcome, follow-up on settlement of the Accounting firm that will audit the Company’s financial findings from the Financial Services Authority and/or Bank statements. Indonesia, targets achievement in accordance with the business plan by considering risk management, internal control and 7. Through the Nomination and Remuneration Committee, compliance completion. The Board of Commissioners through the Board of Commissioners monitors the HR strategies its committees has provided recommendations and inputs on and policies, including training and education programs. various aspects of business and supporting businesses of the The Remuneration and Nomination Committee provides Company. recommendations to the Board of Commissioners on the proposal of HR policies and results of evaluation of prospective Mechanism and focus of supervision conducted in 2018 consist management of the Bank of: 8. Accept reports of the three committees at the Board of 1. Analysis, provide input and together with the Board of Commissioners level for further discussion in the meeting of Directors approve the Bank’s Business Plan. The Board the Board of Commissioners. Inputs and recommendations of Commissioners also monitors, analyzes and provides deemed the Board of Commissioners to the Board of Directors direction/inputs for the Company’s strategic plan in the in regular meetings would submit necessary. future. 9. monitor the implementation of good Corporate governance 2. Monitoring the implementation of the Bank’s Business Plan, including but not limited to the oversight of governance and periodically submitting a Report to the Financial Services Structure, governance Process, governance outcome; Self- Authority on its supervisory results. assessment of good Corporate governance; provision of 3. Assess the financial performance achievement of CCB funds to related parties and large exposures; Implementation Indonesia through the quarterly review of the Audit Committee of Compliance function; and implementation of Anti-Money and Risk Management Committee. In addition, the relevant Laundering and Combating the financing of Terrorism. units also invited to the Committee meetings as a resource
Annual Report 2018 106 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
10. Conduct active monitoring on the Compliance function by the Audit Committee work Implementation, and Regulation of evaluating the implementation of Bank’s Compliance function the Financial Services Authority No. 34/POJK.04/2014 dated through Quarterly Report on implementation of duties of the December 8, 2014 on Nomination and Remuneration Committee Directors in charge of the Compliance function. Hereafter, of Issuers or Public Companies, CCB Indonesia has established the Board of Commissioners provides suggestions in order to Committees under the Board of Commissioners consisting of the improve the quality of the Bank’s Compliance function. Audit Committee, Risk Management Committee as well as the Remuneration and Nomination Committee. These committees are Integrity, competence and financial reputation of all members responsible to the Board of Commissioners in its function to assist of the Board of Commissioners are considered adequate. In the implementation of the duties and responsibilities of the Board of relation with the requirements of risk management certification, Commissioners, with reference to the working Procedures guideline all members of the Board of Commissioners have met the which has been prepared for each committees. requirements. Members of the Board of Commissioners have disclosed the ownership of shares, financial and family Composition of the committees members are in accordance relationships as well as remuneration and other facilities received with the size and complexity of the business of CCB Indonesia. clearly and never violated any applicable law/regulations. Implementation of duties of the committees who assist the Board of Commissioners have been running as it should. The members of Board of Commissioners do not take advantage of the Bank for the interest for themselves, family and/or other Board of Commissioners has 3 (three) committees to assist in parties, which may harm or reduce the profits of the Bank. carrying out its duties and responsibilities, consists of: 1. Audit Committee Independent Commissioner has no relationship in terms of 2. Risk Management Committee financial, managerial, ownership and family with other members 3. Remuneration and Nomination Committee of the Board of Commissioners, the Board of Directors and/or Controlling Shareholders or any relationship with CCB Indonesia, In 2018, the Committee meetings have been held regularly and run which could affect the ability to act independently. quite effectively in accordance with the needs of CCB Indonesia:
In performing its duties and responsibilities in decision-making, 1. Audit Committee has held 19 (nineteen) meetings which were the Board of Commissioners has conducted it independently. No entirely attended by more than 51% (fifty one percent) of the members of the Board of Commissioners has family relationship numbers of the Audit Committee members including Independent up to the second degree with other members of the Board of Commissioner and Independent Party. Commissioners and/or the Board of Directors. Replacement 2. Risk Management Committee has held 4 (four) meetings which and/or appointment of each prospective member of the Board were entirely attended by more than 51% (fifty one percent) of the of Commissioners and the Board of Directors, has considered number of the Risk Management Committee members including the recommendation of the Remuneration and Nomination Independent Commissioner and Independent Party. Committee. 3. Remuneration and Nomination Committee has held 4 (four) The Board of Commissioners understands its obligations to report meetings which were entirely attended by more than 51% (fifty to the Financial Services Authority in the event of violations that one percent) of the number of the Remuneration and Nomination could endanger the Bank’s business. Committee members including an Independent Commissioner In 2018, there were no: and Execute officer in charge of human resources and employee representatives. • Violations of law and regulations in the field of finance and banking; and circumstances or estimation of circumstances Committee meetings decision was taken by consensus and/or that can endanger the Bank’s business continuity. a majority vote. The results of the Committee meetings has been set forth in the minutes of meetings and are well documented. • Reporting on violations of law and regulations in the field The results of the Committee meetings has always sought to be of finance and banking; and circumstances or estimation taken into consideration and recommendation to the Board of of circumstances that can endanger the Bank’s business Commissioners in decision-making. continuity.
The Board of Commissioners does not involved in the decision- making for the Bank’s operations, except for the provision of Audit Committee funds to related parties. Board of Commissioners plays a role in directing the preparation of the Bank’s Business Plans, oversight Audit Committee is chaired by an Independent Commissioner, and towards the implementation of the Bank’s Business Plans and all members of the Committee are independent parties. conduct monitoring and evaluation of the implementation of the Structure and membership of the Audit Committee Bank’s strategic policies. According to the Audit Committee membership Amendment as stipulated in the Decree of the Board of Directors No. 689/SK-DIR/ Committees under the Board of KP-JKT/III/2017 dated March 14, 2017, the composition of the Audit Committee is as follows: Commissioner
With reference to the Regulation of the Financial Services Authority Chairman: No. 55/POJK.03/2016 dated December 7, 2016 and Circular Letter of Mohamad Hasan (Independent Commissioner) the Financial Services Authority No. 13/SEOJK.03/2017 dated March 17, 2017 on Implementation of governance for Commercial Bank, Members: Regulation of the Financial Services Authority No. 55/POJK.04/2015 1. M. Didiek Madinendar Kusumo (Independent Party) dated December 23, 2015 on Establishment and guideline of 2. Mulyadi (Independent Party)
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 107 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Expertise 1983. Previously, he obtained his Bachelor of Economics, majoring in Accountancy, faculty of Economics and Business from Gadjah Mada Mohamad Hasan - Chairman of the Audit Committee/Independent University in 1971. Commissioner He worked as Postgraduate Lecturer at Gadjah Mada University since Indonesian citizen, born in Palembang in 1944. 1995 until now. In addition, he is a Partner in the Public Accounting He has served as Chairman of the Audit Committee since March 14, firm S. mannan, Ardiansyah and Partner, since 2000 until now. He is 2017 to date. a member of the Audit Committee in PT Bumi Resource Tbk
He obtained his Bachelor of Law degree in 1972 from Sriwijaya since 2012 until now, a member of the Audit Committee at PT Darma University, Palembang. He became an Independent Commissioner Henwa, Tbk from 2018 to the present, and a member of the Audit since June 24, 2010 and continued after the merger between Committee at PT Bumi Resource Mineral, Tbk since 2018 to the Bank windu and Bank Anda as of November 30, 2016 as approved present.He obtained his Certified Public Accountant (CPA) in 2010, Financial Services Authority No. SR- 104/PB.12/2016. Qualified Internal Auditor (QIA) in 2009, and Certification of Audit Committee Practices (CACP) in 2017. He began his career at Citibank Jakarta from May 1974 to April 1977. He then worked at PT Multinational Finance Corporation (PT Multicor) starting in May 1977. In the period August 1985 to October Independency 1991 he was appointed as Executive Director, then from November All members of the Audit Committee is not a member of the Board of 1991 to January 2003 he was appointed President Director . Then at Directors of CCB Indonesia and other Banks. PT Bank Multicor as Independent Commissioner from June 2003 to June 2008. From October 2008 to 2009 he served as Commissioner There are members of the Audit Committee of Independent Party in several national private companies in Jakarta. And since May who have concurrent positions as Independent Party of other 2010 he has been reappointed as an Independent Commissioner in Committee members at the same Bank, other Banks, and/or other the Company. companies, namely:
M. Didiek Madinendar Kusumo (Audit Committee Member/ M. Didiek Madinendar Kusumo Independent Party) • At the same Bank, as a member of the Risk Management Committee of CCB Indonesia Indonesian citizen, born in Solo in 1957. He has served as member of • Other banks, as a member of the Audit Committee of PT Bank the Audit Committee since January 2013 to date. kesejahteraan Ekonomi (BkE) He obtained his bachelor degree in accounting from Akademi Akuntansi universitas Jayabaya in 1980, Bachelor of Economics Mulyadi (Ext) from the University of Indonesia in 2000 and master of At other companies as: management from the University of Indonesia in 2004. • member of the Audit Committee of PT Darma Henwa Tbk Jakarta He began his career as an Auditor in Public Accounting firm Sgv • member of the Audit Committee of PT Bumi Resources Tbk utomo mulia & Co from August 1980 until September 1981. he Jakarta continued his career in Bank Indonesia for 28 years and 4 months • member of the Audit Committee of PT Bumi Resources Minerals since September 1981 until January 2010 in various Directorate/ Tbk Jakarta work units in the head office, the yogyakarta Branch office (August 1992 – September 1993), and at the Tokyo Representative office of Concurrent positions as mentioned above have considered the the Bank of Indonesia (September 1993 – January 1997). for 18 years competence, independency criteria, confidentiality, code of conduct he was placed as a bank supervisorand the last 5 years concurrently and implementation of duties and responsibilities served as member and chairman of onsite Supervisory Present (oSP) in BTN from September 2001 until october 2005. he lastly appointed All independent parties who are members of the Audit Committee as Supervisor of Bank madya (Assistant Director) of the Directorate shall not have any financial, managerial, ownership of shares and/ of Banking Supervision (DPB)-2. he retired since January 1, 2010. or family relationship with the Board of Commissioners, the Board of he was also listed as nonpermanent lecturer teaching Islamic Directors and/or Controlling Shareholders of the Bank. banking at Syarief hidayatullah State Islamic University, Ciputat for 6 semesters (June 2010 – June 2013), he also taught finance and Investmentin the major of Communication -faculty of Social Science Duties and Responsibilities and Political Science in the University of Indonesia, Depok (August The duties and responsibilities of the Audit Committee are to assist 2014 to date). he also served as a member of the Audit Committee in the Board of Commissioners in supporting the effectiveness of its PT Bank kesejahteraan Ekonomi (BkE) since february 2012 until now. duties and responsibilities, including: He got Certification of Audit Committee Practices (CACP) in 2017 1. Audit Committee monitors and evaluates the planning and from The Indonesian Institute of Audit Committee. implementation of audit and the follow-up of audit results to assess the adequacy of internal control including the adequacy of financial reporting process. Mulyadi (Audit Committee Member/Independent Party)Anggota Komite Audit/Pihak Independen 2. Audit Committee conducts a review of financial information that will be issued to the public and/or authorities, among others: Indonesian citizen, born in wonogiri in 1947. He served as member of financial statements, projections, and other reports related to the Audit Committee since March 26, 2013 to date. the Bank’s financial information. He obtained his master of Science in management and 3. Audit Committee conducts a review of complaints related to Administrative Science from the University of Texas at Dallas, USA in
Annual Report 2018 108 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
accounting process and financial reporting of the Bank. Oversight mechanism of the Audit Committee on the 4. Audit Committee conducts a review of the Bank’s compliance to Company law and regulations relating to the activities of the Bank. In order to provide recommendations to the Board of Commissioners, 5. Audit Committee provides independent opinion in the event the Audit Committee monitors and evaluates the planning and of dissent between the management and accountant for the implementation of audit as well as the follow-up on audit results services given in order to assess the adequacy of internal controls, including the adequacy of the financial reporting process. 6. Audit Committee provides recommendations to the Board of Commissioners on the appointment of Public Accountant The oversight mechanism is carried out through review of reports based on independency, scope of the assignment and fee issued by the Internal Audit Division, the Public Accounting Firm, (remuneration). and the Financial Services Authority’s Oversight Results through Audit Committee meetings. If needed, then the Committee meeting 7. Audit Committee conducts a review on audit implementation by also invites related units as resource persons to obtain facts/ the internal auditor and oversees the follow-up by the Board of information directly. Directors on the findings of the internal auditor. 8. Audit Committee conducts a review on the implementation of Oversight is performed through monitoring and evaluation of: the follow-up by the Board of Directors on the findings of the - Execution of duties of Internal Audit Division Internal Audit, Public Accountant, and oversight results of - Implementation of Giving AP and KAP Services, including Bank Indonesia to provide recommendations to the Board of the conformity of the implementation of audits by the Public Commissioners. Accounting Firm with applicable audit standards - Conformity of financial statements with applicable accounting 9. The Audit Committee evaluates the implementation of audit standards services for annual historical financial information by the AP - Implementation of follow-up actions by the Board of Directors and/or KAP. on the findings of the Internal Audit Division, public accountants, 10. Audit Committee is responsible to review and provide advices to and results of supervision by the Financial Services Authority. the Board of Commissioners related to the potential conflict of - Annual inspection plan by Internal Audit Unit (IAU) in 2018. interest of the Bank. - Improvement of IT systems, and restrictions on access. - Improvement and completion of SOPs in the field of Human 11. Audit Committee is obliged to maintain the confidentiality of Capital documents, data, and information of the Bank. - Improvement of GCG implementation in accordance with the direction of the OJK as a follow-up to the GCG rating of the OJK assessment. Term of office of the Audit Committee members - Suggested a change to the Vision and Mission, related to what The Audit Committee is appointed and directly responsible to the the mission is: What business are we in. While Vision is a long- Board of Commissioners. term plan for the next 10 years. - Schedule of meetings between BOD & BOC must refer to the The appointment and dismissal of members of the Audit Committee latest OJK provisions are reported to the general meeting of Shareholders by the Board of - Suggest taking legal action by considering security and costs as Commissioners. efficiently as possible in connection with cases of fraud.
The term of office of the Audit Committee members should not be Intensity of the Audit Committee Report to the Board of longer than the period of the Board of Commissioners and can only Commissioners throughout 2018 be re-elected for the next 1 (one) period. Periodically, the Audit Committee submit reports on the Members and composition, and independency of the Audit implementation of its duties to the Board of Commissioners Committee members mentioned above have complied with the through meetings between the Audit Committee with the Board regulations of the Financial Services Authority previously Bank of Commissioners. hereafter, the Audit Committee provides Indonesia and Capital market Authority-Lk. members consist of an recommendations to the Board of Commissioners. Independent Commissioner who acts as Chairman of the Committee and 2 (two) Independent Parties with expertise in finance or During 2018, the Audit Committee has held 19 (nineteen) meetings accounting and in the field of legal or banking, as members. and submitted suggestions to the Board of Commissioners. meetings which have been held are as follows:
Mohamad No Date Meeting Agenda M. Didiek M. Mulyadi Hasan
Discussion of follow-up to OJK Letter No.SR-143/PB.32/2017 December 22, 2017, Regarding 1. Jan 04, 2018 √ √ √ Report on the results of your Bank’s examination Position May 31, 2017.
2. Jan 08, 2018 Discussion of annual inspection plan by IAU 2018; √ √ √
3. Feb 21, 2018 Interview with the Head of Internal Audit Unit √ √ √
Further discussion on IAU Examination Preparation in 2018, IAU Organizational Structure; Special 4. Feb 28, 2018 √ √ √ Audit
Discussion of progress on the results of the PwC Public Accountant examination for the fiscal 5. Mar 14, 2018 √ √ √ year of December 2017
Discussion of opinion on the results of the PwC Public Accountant examination for the financial 6. Mar 27, 2018 √ √ √ year of December 2017
7. Apr 10, 2018 Interview with the Head of Internal Audit Unit √ √ √
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 109 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Mohamad No Date Meeting Agenda M. Didiek M. Mulyadi Hasan
Discussion of PwC Public Accountant evaluation from the Auditee (user) side of the Accounting 8. Apr 11, 2018 √ √ √ Division
9. Apr 18, 2018 Discussion on fraud progress in KK Pasar Segar Bintaro with IAU √ √ √
Discussion on the performance of IAU Q-I-2018, the implementation of the inspection with the 10. May 09, 2018 √ √ √ plan, the cause of the deviation.
1. Discussion of IT access made by HC to the Accounting system (specifically IT access to payroll); Completeness of SOP in Section HC; Monitoring the follow-up of audit findings at 11. Aug 02, 2018 - √ √ HC by OJK 2017. 2. Discussion on Financial Performance Q-II-18 (SMT-II/2018)
12 Aug 16, 2018 Discussion on SMT-I/2018 Financial Performance, There is a plan to issue Sub Debt by CCBI √ √ √
1. Discussion of the findings highlights of the IAU examination on the division: HC; GA & Accounting, LHP following. a. Accounting Examination: 1) Financial reports for internal and external interests, not limited to journals and payments. 2) Financial planning; monthly financial performance b. GA Examination: 1) Fund & Reimbursement, 13 Sept 6, 2018 2) Limit approval and administration. √ √ c. HC Examination: The duty of the head of the HC division, i.e: Must be able to carry out and keep the provisions related to TKA updated continuously. 2. Discussion of next finding from IAU in the future is divided into 3 (three groups): a. Major finding. b. Minor finding c. Moderate finding
14 Oct 09, 2018 Discussion of the 2018 audit plan by PwC Public Accountant √ √ √
1. Discussion of progress in the follow-up to the OJK letter/OJK audit findings regarding GCG, 15 Oct 25, 2018 OJK Letter dated. May 25 and September 20, 2018. √ √ √ 2. Discussion on Financial Performance Q-II-18 (Q-III/2018)
16 Nov 02, 2018 Discussion of review and improvement of the Internal Audit Charter - √ √
Discussion of BOC and Committees Work Plan 1) Discussion of: a. The BOC and the Committee monitored the findings/suggestions of the FSA. b. BOC needs to form a Compliance Risk Committee & Compliance GCG Committee in the 17 Nov 15, 208 √ √ √ future. c. Every BOD must make a self-assessment every 6 months. 2) Schedule of meetings between BOD & BOC must refer to the latest FSA provisions. 3) BOD will give full attention to BOC advice
Discussion on the preparation of the 2019 Audit Committee Work Plan and Review and refinement 18 Nov 27, 2018 of the Audit Committee’s work guidelines and Review and improvement of the Board of Commis- - √ √ sioners’ supervisory guidelines.
19 Dec 17, 2018 Discussion of the findings of Surabaya Branch Offices (indications of fraud) - √ √
√ : Present at the meeting, - : Not Present at the meeting
Until the end of 2018, the Audit Committee’s performance is Accounting firm Tanudiredja, Wibisana, Pioneer & Price officer considered good. The Audit Committee has carried out its duties (PricewaterhouseCoopers Indonesia or PwC Public Accountant and responsibilities, realized the work program, and provide Indonesia) to audit the Company’s financial report for fiscal year recommendations to the Board of Commissioners in accordance 2018. with applicable regulations. • The appointment of a Public Accountant Firm that will conduct an audit of the Bank has been made through the GMS on 30 May Appointment process of the Public Accounting firm (KAP) is 2018 with due observance of the applicable provisions, among conducted through several stages as follows: others, through recommendations from the Audit Committee to • Based on the resolutions of the Annual GMS on May 30, 2018, the Board of Commissioners. the GMS has approved the authorization to the Board of • Appointment of KAP has been reported to OJK - Capital Market Commissioners on the recommendation of the Audit Committee Supervisors through letter No. 213/CCBI/DDIR-OJK/VI/2018 to appoint a Public Accounting firm to audit the Company’s and OJK - Bank Supervisors through letter No. 214/CCBI/DDIR- financial statements for the financial year ended on December OJK/VI/2018, both dated June 25, 2018. 31, 2018, as well as to determine the honorarium and other • Auditors carry out their duties objectively. The Audit of the requirements of the appointment of Public Accountant. Financial Statements that ended on 31 December 2018 was • The Audit Committee has reviewed the conformity of the implemented based on work agreement No. EL2018060705/ audit conducted by the Public Accounting firm (KAP)with MJW/SON/BOL/jap dated June 7, 2018. the applicable audit standards,as stated in memo No 08/KA/ MI/2018 dated April 11, 2018 and has been submitted to OJK by The appointed Public Accountant and KAP are able to work letter 003/CCBI/DKOM-OJK/VI/2018 dated June 07, 2018. independently, meet the professional standards of public • The Audit Committee recommends the Board of Commissioners accountants and work agreements as well as the scope of the audits through internal memo No. 001/MI/KA/V/2018 dated specified. May 16, 2018 to appoint Public Accountant and Public
Annual Report 2018 110 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Work Program and Realization 2, 2016 as approved by the Financial Services Authority No. SR-173/ PB.121/2016. The Audit Committee has developed a work Plan and Schedule of 2018 Activities, among others as follows: He began his career in PT Bank Antardaerah since 1982 in various key positions. In 1986, he was appointed as President Director and • Discussion of the annual audit plan by IAU and evaluating the in 1999 as the Chairman of Audit Board of PT Bank Antardaerah. performance of the Internal Audit Unit in 2018. Starting March 1999 – November 2016, he served as a member of • Interviews with prospective IAU Heads the Board of Commissioners PT. Bank Antardaerah • Monitor the follow-up of the audit findings result completion of IAU, KAP, and OJK. M. Didiek Madinendar Kusumo - Chairperson of the Risk Monitoring • Evaluation of the Implementation of AP and KAP Services for Committee/ Independent Commissioner the 2017 financial year, including the suitability of the audit Indonesian citizen, born in Solo in 1957. He has served as member conducted by the Public Accounting Firm with applicable audit of the Audit Committee since January 2013 to date. He obtained his standards. bachelor degree in accounting from Akademi Akuntansi universitas • Provide recommendations to the Board of Commissioners, Jayabaya in 1980, Bachelor of Economics (Ext) from the University including in the appointment of a Public Accountant and Public of Indonesia in 2000 and master of management from the University Accountant Firm that will audit the 2018 financial year. of Indonesia in 2004.
• Discuss the KAP audit plan in the audit of the 2018 Bank’s He began his career as an Auditor in Public Accounting firm Sgv financial statements Utomo Mulia & Co from August 1980 until September 1981. He continued his career in Bank Indonesia for 28 years and 4 months • Reviewing the financial performance of 2018 and the realization since September 1981 until January 2010 in various Directorate/ of the Bank’s Business Plan work units in the head office, the yogyakarta Branch office (August • Discussion of review and improvement of the Internal Audit 1992 – September 1993), and at the Tokyo Representative office of Charter. the Bank of Indonesia (September 1993 – January 1997). for 18 years • Improved implementation of GCG in accordance with directions he was placed as a bank supervisor and the last 5 years concurrently from the FSA. served as member and chairman of onsite Supervisory Present (oSP) in BTN from September 2001 until October 2005. He lastly appointed • Discussion of the preparation of the 2019 Audit Committee as Supervisor of Bank madya (Assistant Director) of the Directorate Work Plan; Review and improvement of the Audit Committee’s of Banking Supervision (DPB)-2. he retired since January 1, 2010. He work guidelines: Review of Improvement of the Board of wa also listed as nonpermanent lecturer teaching Islamic banking at Commissioners’ supervisory guidelines. Syarief Hidayatullah State Islamic University, Ciputat for 6 semesters Work plan and scheduled activities have been realized in 2018. (June 2010-June 2013), he also taught finance and Investment in the major of Communication - faculty of Social Science and Political Science in the University of Indonesia, Depok (August 2014 to date). Risk Monitoring Committee He also served as a member of the Audit Committee in PT Bank kesejahteraan Ekonomi (BkE) since february 2012 until now. he got The Risk Monitoring Committee is chaired by an Independent Certification of Audit Committee Practices (CACP) in 2017 from The Commissioner, and all members of the Committee are independent Indonesian Institute of Audit Committee.
Structure and membership Tom Andanawari (Member of the Risk Monitoring Committee/ As per the latest change in the membership of the Risk Monitoring Independent Party) Committee as stipulated in the Directors Decree No. 682/SK DIR/ He has served as member of the Ris oversight Committee since KP-JKT/II/2017 dated February 21, 2017, the composition of the Risk March 1, 2013 to date. He obtained his Bachelor o Economics Monitoring Committee membership position December 31, 2018 is majoring in accountancy from Bandung Institute of Economi as follows: Science in 1989 In the period of 1989 until 2006, he worked in Bank NISP in variou positions such as: Internal Auditor Audit Coordinator Chairman: and Internal Contro head. Later in the period of 2006 unti 2011 Yudo Sutanto (Independent Commissioner) in Bank oCBC NISP (post merger) with various positions as Risk manager Credit Risk manager and Enterpris Risk manager. Members: 1. M. Didiek Madinendar Kusumo (Independent Party) Independency 2. Tom Andanawari (Independent Party) All members of the Risk Monitoring Committee is not a member of Expertise the Boar of Directors of CCB Indonesia or othe Banks.
Yudo Sutanto - Chairperson of the Risk Monitoring Committee/ There is a member of the Risk Monitoring Committee of independent Independent Commissioner party who has concurrent positions as Independen Party of the other Committee members a the same Bank and other Banks, namely: Indonesian citizen, born in malang, East Java in 1954. He has served as Chairman of the Risk monitoring Committee since february M. Didiek Madinendar Kusumo 21, 2017 to date. He obtained his Bachelor of finance in 1981 from • at the same Bank, as a member of the Audit Committee of CCB California State University, Los Angeles, united States of America. Indonesia He was appointed as an Independent Commissioner since November
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 111 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
• at other banks, as a member of the Audit Committee of PT Bank Risk Monitoring Committee may be reappointed for another term of kesejahteraan Ekonomi (BkE) Jakarta office.
Concurrent positions as mentioned above have considered the Membership and composition as well as the independency of the competence, independency criteria, confidentiality, code of conduct members of Risk Monitoring Committee mentioned above have and implementation of duties and responsibilities. complied with the regulation of the Financial Services Authority. The membership consists of an Independent Commissioner as All independent parties who are members of the Risk Monitoring Chairman of the Committee and 2 (two) Independent Parties with Committee shall not have any financial, management, ownership expertise in finance and risk management as member. and/or family relationships with the Board of Commissioners, the Board of Directors and/or Controlling Shareholders of the Bank. Oversight Mechanism of the Risk Monitoring Committee on the Company Duties and Responsibilities Oversight mechanism is performed by evaluating the conformity The duties and responsibilities of the Risk Monitoring Committee is between risk management policy and implementation of such to assist the Board of Commissioners in order to support effective policy through Risk Profile Report prepared by the risk management implementation of its duties and responsibilities. function as well as by monitoring and evaluating the implementation In order to provide recommendations to the Board of Commissioners, of duties of the Risk Monitoring Committee. The evaluation results the Risk overisght Committee: are discussed in the meetings of the Risk Monitoring Committee, 1. Evaluate the conformity between risk management policy with and if necessary, the Risk Monitoring Committee may also invite the the implementation of the policy. related units as a resource for obtaining facts/information directly. 2. Monitor and evaluate the implementation of duties of the Risk Monitoring Committee and risk management function. Intensity of the Risk Monitoring Committee Report to the Board of Commissioners throughout 2018 Term of office of the Risk Monitoring Committee The Risk Monitoring Committee submit reports on the Risk Monitoring Committee is appointed and directly responsible to implementation of its duties to the Board of Commissioners the Board of Commissioners. through Periodic Report and meetings between the Risk Monitoring Committee with the Board of Commissioners. Furthermore, the Risk The appointment and dismissal of all members of the Risk Monitoring Monitoring Committee provides recommendations to the Board of Committee is reported to the general meeting of Shareholders by Commissioners. the Board of Commissioners. During 2018 the Risk Monitoring Committee has held 2 (two) Members of the Risk Monitoring Committee are appointed for meetings, and submitted proposals to the Board of Commissioners. certain term of office. After the term of office ends, members of the Meetings that have been held are as follows:
Yudo Tom No Date Meeting Agenda M. Didiek M Sutanto Andanawari
1 Feb 02, 2018 Discussion of NPL √ √ √
2 May 09, 2018 Discussion of organizational structure, framework and tasks of Internal Control √ √ √
1. Discussion of IT System, The IT server currently used by CCBI, namely T-24 and R-10, is also used by (Bank Sinar 3 Ags 02 , 2018 Mas); While the latest R-16 & R-17 types have not been used by CCBI; - √ √ For current needs, the R-10 version is still adequate. 2. The search for the cause of the balance sheet is not appropriate
4 Oct 11, 2018 Discussion of Risk High Light SMT-I-2018 (Q-II/18) - √ √
√: Present at the meeting
Until the end of 2018, the performance of the Risk Monitoring • Discussion of NPL Committee is considered good. The Risk Monitoring Committee • Discussion of organizational structure, frame work and Internal has conducted an evaluation of the conformity between risk Control tasks management policy and its implementation as well as monitor • Monitoring of audit findings of IAU and OJK related to Risk and evaluate the implementation of duties of the Risk Monitoring Management Committee, and provide recommendations to the Board of • Discussion of the 2018 Risk Profile Report Commissioners in accordance with applicable regulations • Provide recommendations to the Board of Commissioners
Work plan and scheduled activities have been realized in 2018. Work program and Realization
The Risk Monitoring Committee has developed a work Plan and Schedule of 2018 Activities, among others as follows:
Annual Report 2018 112 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Remuneration and Nomination Committee He began his career at China Construction Bank Corporation from July 1997 as a Business Manager responsible for managing The Remuneration and Nomination Committee is chaired by an assets/liabilities. From October 2000 to March 2001, he Independent Commissioner with committee members comprising held various strategic positions at China Construction Bank of a Commissioner and an Executive officer in charge of human Corporation. Then from March 2001 to July 2008, he was resources. appointed as Chief Manager and Deputy Chief Manager in charge of the financial market department. Then in March 2008 until Structure and membership now, he was appointed as Deputy General Manager and Chief Manager in charge of the Bank’s strategic investment in the According to the Remuneration and Nomination Committee Strategic Investment and Management Department. membership Amendment as stipulated in the Decree of the Board of Directors No. 429/SK-DIR/KP-JKT/IX/2017 dated September • Purnomo Adinugroho - Member of the Remuneration and 27, 2017, the composition of the Remuneration and Nomination Nomination Committee / Executive Officer Committee on December 31, 2018 is as follows: Chairman: Indonesian citizen, born in Batu Raja, South Sumatra in 1965. Mohamad Hasan (Independent Commissioner) Served as a Member of the Remuneration and Nomination Committee since February 2014 until now. Members: 1. Qi Jiangong (Commissioner) Graduated with a Bachelor of Psychology from Airlangga 2. Purnomo Adinugroho (Head of Division of Human Capital University, Surabaya in 1988 and earned a Masters degree in Services Management) International Finance at Gajah Mada University, Yogyakarta in 1998.
Expertise Served as Head of Bank Windu’s Human Capital Division since November 2013. • Mohamad Hasan - Chair of Remuneration and Nomination / Independent Commissioner Starting his career at Bank Danamon since February 1989 in the field of Operation until July 2004. Then in July 2014 at PT Sigma Indonesian citizen, born in Palembang in 1944. Cipta Caraka as DRC Head until September 2006. Then from Served as Chair of the Remuneration and Nomination Committee September 2006 to February 2011 at PT BNI Multifinance as a since October 22, 2010 to date. Resources General Manager. Since February 2011 as a System & Procedure Head until November 2013 at Rabo Bank. He holds a Bachelor of Laws degree in 1972 from Sriwijaya University, Palembang. Independency Being an Independent Commissioner since June 24, 2010 and continued after the merger between Bank Windu and your bank No members of the Remuneration and Nomination Committee are as of 30 November 2016 in accordance with the approval of the members of the CCB Indonesia Directors or other Banks. Financial Services Authority No. SR-104/PB.12/2016.
He began his career at Citibank Jakarta from May 1974 to April Duties and responsibilities 1977. He then worked at PT Multinational Finance Corporation In accordance with the scale and complexity of business of CCB (PT Multicor) starting in May 1977. In the period August 1985 Indonesia, the functions performed by the Remuneration Committee to October 1991, he was appointed as Executive Director, and and the Nomination Committee are merged into a single unified then from November 1991 to January 2003 he was appointed committee, the Remuneration and Nomination Committee. President Director. Then at PT Bank Multicor as Independent Commissioner from June 2003 to June 2008. From October The duties and responsibilities of the Remuneration and 2008 to 2009 he served as Commissioner in several national Nomination Committee are to assist the Board of Commissioners private companies in Jakarta. Moreover, since May 2010 he in order to support the effective implementation of its duties and has been reappointed as an Independent Commissioner in the responsibilities, including: Company. 1. Related to remuneration duties, the Remuneration and • Qi Jiangong - Member of the Remuneration and Nomination / Nomination Committee has the following duties and Commissioner Committee responsibilities:
Chinese citizen, born in Shanxi, China on June 11, 1970. a. Remuneration and Nomination Committee conducts an evaluation on the remuneration policy and system. Served as a member of the Remuneration and Nomination Committee from 27 September 2017 to the present. b. Remuneration and Nomination Committee provides recommendations to the Board of Commissioners regarding: Obtained a Bachelor’s degree in Economics from Renmin University of China in 1992 and a Master’s degree from the - Remuneration policy and system for the Board of University of International Business and Economics, majoring in Commissioners and the Board of Directors to be International Accounting Management graduating in 1997. submitted to the general meeting of Shareholders,
He was appointed as Commissioner through the GMS on October - Remuneration policy and system for Executive officer 14, 2016, and was declared effective in appointment from June and employees as a whole to be submitted to the Board 6, 2017 to the present. of Directors. c. Remuneration and Nomination Committee ensures that the
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 113 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
remuneration policy should at least in accordance with: Term of office of the Remuneration and Nomination - Financial performance and reserves as stipulated in the Committee members applicable law and regulations, - Individual work achievement, Remuneration and Nomination Committee is appointed and directly - Fairness to the peer group, responsible to the Board of Commissioners. - Consideration of the Bank’s long-term goals and The Board of Commissioners reports the appointment and dismissal strategies. of all members of the Remuneration and Nomination Committee to 2. Related to nomination duties, the Remuneration and Nomination the general meeting of Shareholders. Committee has the following duties and responsibilities:
a. Remuneration and Nomination Committee prepares and Members of the Remuneration and Nomination Committee shall be provides recommendations on systems and procedures of appointed for certain term of office. selection and/or replacement of members of the Board of Commissioners and the Board of Directors to the Board of Term of office of members of the Nomination and Remuneration Commissioners to be submitted to the general meeting of Committee shall not be longer than the term of office of the Board Shareholders. of Commissioners.
b. Remuneration and Nomination Committee provides After the term of office ends, members of the Remuneration and recommendations: Nomination Committee may be reappointed for the next term. 1. Regarding the prospective members of the Board of Members and composition, and independency of the Remuneration Commissioners and/or Board of Directors to the Board and Nomination Committee members mentioned above have of Commissioners to be submitted to the general complied with the regulations of the Financial Services Authority. meeting of Shareholders. The membership consists of an Independent Commissioner who 2. Provide recommendations on Independent Party that acts as Chairman of the Committee, a Commissioner, and an will become a member of the Audit Committee or the Risk Executive officer in charge of human resources. Monitoring Committee to the Board of Commissioners.
c. Recommendation procedures on prospective members Oversight mechanism of the Remuneration and of the Board of Commissioners, and/or Board of Directors, Nomination Committee on the Company and/or Independent Party like item b) above is performed as follows: In order to provide recommendations to the Board of Commissioners, 1) Remuneration and Nomination Committee assesses the the Remuneration and Nomination Committee ensures that the prospective members of the Board of Commissioners, remuneration policy has been in accordance with applicable law for the Board of Directors, or for Independent Party. and regulations. The oversight mechanism is performed through the i. Assessment is performed based on competence, evaluation on conformity between the remuneration policy with the and record of accomplishment of the prospective financial performance and reserves as stipulated in the applicable members. law and regulations; individual work performance; fairness to the ii. Assessment can be performed through an interview peer group; and consideration of long-term goals and strategies of with the prospective members of the Board of the Bank. Furthermore, the evaluation results are discussed in the Commissioners, or the Board of Directors, or the meetings of the Remuneration and Nomination Committee. Independent Party. iii. If needed, the Remuneration and Nomination Intensity of the Remuneration and Nomination Committee may use an independent Professional Committee Report to the Board of Commissioners Institutions to conduct an assessment. Throughout 2018 2) Based on the assessment, the Remuneration and Nomination Committee: Meetings of the Remuneration and Nomination Committee are held i. Provides recommendations of prospective periodically, and generate recommendations, which discussed members of the Directors and/or Commissioners to further in the meetings of the Board of Commissioners, and also the Board of Commissioners to be submitted in the as a Report of the Remuneration and Nomination Committee to the GMS. Board of Commissioners. ii. Provides recommendations on Independent Party During 2017 the Remuneration and Nomination Committee has held that will become a member of the Audit Committee 14 (fourteen) meetings, and submitted proposals to the Board of or Risk Monitoring Committee to the Board of Commissioners. Meetings that have been held are as follows: Commissioners.
Annual Report 2018 114 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Mohamad Purnomo No Date Meeting agenda Sjerra Salim Hasan Adinugroho
1. Jan 22, 2018 Appointment of CCB Indonesia Director on behalf of Mr. Zhu Yong √ √ √
2. Feb 5, 2018 Provision of protection facilities to CCB Indonesia management (BOC & BOD) √ √ √
3. Mar 16, 2018 Salary adjustments for employees and Managers in 2018 √ √ √
4. May 25, 2018 (1) Appointment of CCB Indonesia Director and Commissioner √ √ √
5. May 25, 2018 (2) Appointment of CCB Indonesia Director and Commissioner √ √ √
6. May 25, 2018 (3) Appointment of CCB Indonesia Director and Commissioner √ √ √
7. May 31, 2018 Granting annual performance bonus for 2017 √ √ √
Adjustment of the remuneration of the President director in 2018 and Executive Officers 8. Jul 12, 2018 √ √ √ (TKA)
9. Aug 29, 2018 Change and improvement of employee credit policies √ √ √
Recommendation for the appointment of a Director at CCB Indonesia (Compliance 10. Sep 7, 2018 √ √ √ Director)
11. Sep 17, 2018 Provision of remuneration for prospective Compliance Directors √ √ √
Adjustment of some remuneration policies of members of the Board of Commissioners 12. Sep 20, 2018 √ √ √ and Directors
13. Sep 26, 2018 Adjustment of Offering a Letter of Prospective Finance Director √ √ √
Appointment of Compliance Director and recommendation for giving remuneration to 14. Dec 3, 2018 √ √ √ prospective Compliance Director
√: Present at the meeting
As of the end of 2018, the performance of the Remuneration - Discussion of the appointment of Director of CCB HQ on behalf of and Nomination Committee is considered quite well. The Mr. Zhu Yong. Remuneration and Nomination Committee has carried out its - Discussion regarding Resignation of 2 Directors, and duties and responsibilities, realized work programs, and provided appointment of Directors from external recommendations to the Board of Commissioners in accordance - Discussion of Provision of protection facilities to Bank with applicable regulations. management - Discussion of salary adjustments for employees and administrators Work program and realization - Discussion of gifts and formula for calculating employee bonuses The Remuneration and Nomination Committee has compiled a Work and administrators Plan and Activity Schedule for 2018, including the following: - Employee policy evaluation • Carry out the duties and responsibilities as stipulated in the - Discussion of management changes Remuneration and Nomination Committee Charter. Work plans and activities scheduled to be realized in 2018. • Providing recommendations to the Board of Commissioners regarding remuneration policies including:
Directors
No Name Position Approval Letter FSA approval AGM Approval
Decree of OJK Board of Commissioners Member No. KEP- 1 You Wennan President Director Apr 27, 2018 Feb 2, 2018 88/D.03/2017 April 27, 2018
BI Governor Letter No.12/16/GBI/DPIP/Rahasia dated February 8, 2 Setiawati Samahita Director Feb 8, 2010 May 16, 2014 2010.
BI Governor Letter No. 15/45/GBI/DPIP/Rahasia dated August 30, 3 Junianto Director Aug 12, 2013 May 16, 2014 2013
Chandra Nangkok Tua Decision of OJK Board of Commissioners Member No. KEP- 4 Director Nov 16, 2018 May 30, 2018 Siagian 188/D.03/2018 November 14, 2018
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 115 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
The composition of the Board of Directors in early 2018 has not President Director: You Wen Nan changed compared to the composition of the previous period based Director: Zhu Yong *) on the decision of the Annual General Meeting of Shareholders Director: Setiawati Samahita dated May 30, 2017, which appointment is effective as of the closing Director: Junianto of the GMS until the closing of the Annual GMS 2018 (two thousand Director: Chandra Nangkok Tua Siagian *) and eighteen) as follows: with notes : *) new appointments are effective after obtaining approval from the authorities. President Director: Li Guo Fu *) Director: You Wen Nan Director: Luianto Sudarmana **) Based on the Extraordinary General Meeting of Shareholders dated Director: Setiawati Samahita October 10, 2018, Mr. Purbaji Basuki was nominated as Director Director: Adri Triwitjahjo of the Company. The appointment of Bpk Purbaji Basuki was only Director: Junianto effective after obtaining approval from the authorities. Mr. Zhu Director: Dewi Arimbi Kurniawati Yong who was previously appointed at the Extraordinary General Meeting of Shareholders on February 2, 2018 as Director, is still in *) Li Guo Fu resigned as President Director in accordance with the resignation letter received by the Bank on October 10, 2017, reported to OJK by letter No 404/ the process of filing approval from the Financial Services Authority CCBI/DDIR-OJK/X/2017 dated October 12, 2017 (OJK), so that it cannot be declared effective. Likewise, Mr. Chandra **) Luianto Sudarmana resigned as Director of the Financial Institution in accordance Nangkok Tua Siagian, who was previously appointed at the Annual with the resignation letter received by the Bank on September 29, 2017, reported General Meeting of Shareholders on May 30, 2018 as Director, is still to the OJK by letter No. 381/CCBI/DDIR-OJK/X/2017 dated October 3, 2017. in the process of filing OJK approval, so that it has not been declared effective. Thus, the composition of the Board of Directors after the Informed at the Extraordinary Annual General Meeting of appointment of Mr. Zhu Yong, Mr. Chandra Nangkok Tua Siagian and Shareholders dated February 2, 2018, that Mr. Li Guo Fu who is the Mr. Purbaji Basuki, respectively as Director, received approval from President Director of the Company has submitted a resignation the competent authorities, the composition and Directors whose letter as of October 10, 2017 and Mr. Luianto Sudarmana who is the term of office will expire until the closing of the Annual General Director of Financial Institution has submitted a resignation letter Meeting of Shareholders 2018 is the following: per date September 29, 2017, the Company gave awards and thanks President Director: You Wen Nan for its services to the Company so far. Director: Zhu Yong *) Based on the Extraordinary Annual General Meeting of Shareholders Director: Setiawati Samahita dated February 2, 2018, the composition of the members of the Director: Junianto Company’s Board of Directors whose term of office will expire Director: Chandra Nangkok Tua Siagian *) until the closing of the Company’s Annual General Meeting of Director: Purbaji Basuki *) Shareholders for 2018 is as follows: with notes: *) new appointments are effective after obtaining approval from the authorities President Director: You Wen Nan *) Director: Zhu Yong **) Based on the Decree of the Members of the Board of Commissioners Director: Setiawati Samahita of the Financial Services Authority No KEP - 189/D.03/2018 dated 14 Director: Adri Triwitjahjo November 2018, the appointment of Mr. Purbaji Basuki as Director Director: Junianto was not approved by the OJK. Based on the Decision of the Financial Director: Dewi Arimbi Kurniawati Services Authority Board of Commissioners Member Decree KEP - 188/D.03/2018 dated 14 November 2018 and OJK Letter No S-172/ with notes: PB.322/2018 dated 30 November 2018 appointment of Mr. Chandra *) the appointment of Mr. You Wen Nan was only effective after obtaining approval Nangkok Tua Siagian as Bank Director has get approval from OJK, from the authorities **) Mr. Zhu Yong’s appointment was only effective after obtaining approval from the and be declared effective as of 19 November 2018. So that the China Banking Regulatory Commission (CBRC) and the authorities. composition of the Board of Directors at the end of December 2018 is as follows: Based on OJK Letter No. SR-93/PB.12/2018 dated April 30, 2018 and OJK Board of Commissioners Member Decree No KEP-88/D.03/2018 President Director: You Wen Nan dated April 27, 2018, OJK approved the appointment of Mr. You Director: Zhu Yong *) Wen Nan as President Director PT. Bank China Construction Bank Director: Setiawati Samahita Indonesia, Tbk. Director: Junianto **) Based on the Annual General Meeting of Shareholders dated May Director: Chandra Nangkok Tua Siagian 30, 2018, the resignation of Mr. Adri Triwitjahjo who is the Finance with notes: *) new appointments are effective after obtaining approval from the authorities Director of the Company and Ms. Dewi Arimbi Kurniawati who is **) also appointed as Compliance Director the Compliance Director has received approval, Mr. Zhu Yong who Based on letter No. 215/CCBI/DDIR-OJK/VI/2018 dated June 26, 2018, concerning was previously appointed at the Company’s Extraordinary General the Provisional Replacement Report of the Director’s Position Subordinating the Meeting of Shareholders on February 2, 2018 as Director of the Compliance Function Company, is still in the process of filing approval from the Financial Services Authority so that it has not been declared effective. Mr. In 2018, there are no less than 3 (three) members of the Board Chandra Nangkok Tua Siagian was submitted as Director of the of Directors. However, at the end of 2018 according to the Company, thus, the composition of the members of the Company’s organizational structure of the Bank there is still a vacancy of 2 (two) Board of Directors whose term of office will expire until the closing Director positions, namely the Compliance Director and Corporate & of the Company’s Annual General Meeting of Shareholders for 2018 International Banking Director. is as follows:
Annual Report 2018 116 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
You Wennan - President Director
Chinese citizen, born in Fujian, China in 1967. Obtained a Bachelor’s October 2014, he was appointed Director of the CCB Guiyang Jingrui degree in Automatic control from Northwestern Polytechnic Branch and then in November 2014 was appointed as President University - China in 1991. Director at CCB Guiyang Jingrui Branch, in this matter responsible for comprehensive management of CCB Guiyang Jingrui Branch, Being the President Director of the Company since May 2, 2018 including business development, internal risk control, and others. based on the approval of the Financial Services Authority No. KEP- 88/D.03/2018. Previously served as Director of the Company since The training followed in 2018 is level 5 Risk Management Certification November 30, 2016. Training by LSPP.
Started his career with China Construction Bank (“CCB”) in Fuzhou As Director, oversees the fields of Corporate Banking, Treasury and Branch since September 1991 as Business Manager. In June 1992 Financial Institution as Business Manager of CCB Fujian Province Branch IT Department, As a member of the Director fulfills the requirements as set out in the then in March 2000 - February 2007 he became Deputy General Financial Services Authority Regulation Number 33/POJK.04/2014 Manager. (formerly Bapepam IX.I.6 Regulations), Number 27/POJK.03/2016, Moreover, in February 2007 served in the CCB Fujian Province Financial Services Authority Circular Letter No.39/SEOJK. 03/2016, Branch Corporate Banking Department as Deputy General Manager. and has obtained approval from the Financial Services Authority No. Then February 2008 as General Manager at CCB Fujian Province No. KEP-4/D.03/2019 dated January 4, 2019. Branch Institution Clients Department. In March 2010, he became General Manager at CCB Longyan Branch. Then served in CCB Quanzhou Branch in January 2014 as General Manager. Setiawati Samahita - Director of Commercial & Retail In October 2014, he became deputy director of agency services Banking and Corporate & International Banking companies and management committee at CCB Fujian Branch. Indonesian citizen, born in Rumbai in 1961. Obtained a Bachelor’s Then, starting in April 2016, serving in Indonesia as the Deputy Head degree in Agricultural Technology, Faculty of Agricultural Technology, of the Preparatory Team until November 2016 effectively became the Department of Food and Nutrition with a very satisfying predicate Director of the Company. Then starting May 2, 2018, he effectively from the Bogor Agricultural Institute in 1984 and a Masters in became the President Director of the Company Management from Management from PPM School of Management Jakarta in 2007 with the title of Cum Laude. The training followed in 2018 as follows: 1. Workshop on “Regulation and Implementing Strategy for Became Director of the Company since June 2010 and continued Executive Compensation” (Refreshment Risk Management after the merger between Bank Windu and your bank as of 30 Certification) by the Bank Association for Risk Management on November 2016 as agreed by the Financial Services Authority No. February 21, 2018 in Jakarta SR-104/PB.12/2016. 2. Refreshment of APU PPT 2018 by CCBI Online Training on He began his career at PT Sanmaru Food Manufacturing (PT September 9, 2018 Indofood S.M) as Research & Development Manager for Snack Food 3. Indonesian Language Courses since November 16, 2018. from March 1985 to March 1986. Then in April 1986 on Radio FEBC As President Director, he leads other Directors, and oversees the Manila Jakarta (YASKI) as Head of Recording Studio until December fields of Internal Audit, Credit Review, Information Technology and 1988. Strategic Transformation.
As members of the Board of Directors meet the requirements as set out in the Financial Services Authority Regulation Number 33/ POJK.04/2014 (formerly Bapepam IX.I.6 Regulations), Number 27/ POJK.03/2016, Financial Services Authority Circular Letter No.39/ SEOJK. 03/2016 and obtained approval from the Financial Services Authority No. KEP-88/D.03/2018 dated April 27, 2018.
Zhu Yong - Corporate & International Banking
Became Director of the Company since March 29, 2019
Chinese citizen, born in China in 1975. He earned a Bachelor of Economics from Shanghai Finance and Economics University, China in 1996 and a Master’s degree in Accounting from Tsinghua Started his banking career at Bank Bali in June 1990 as an Officer University, China in 2008. Development Program until December 1990. Subsequently he held various positions as Account Officer from December 1990 to Became Director of the Company since March 2019. He began his February 1995, as the Bogor Commercial Loan Team Leader from career at China Construction Bank Corporation (CCB) on Jul 1996 March 1995 to October 1995. Appointed as General Manager at PT until now in various key and strategic positions. Started at CCB Bank Bali Bogor from November 1995 to December 1995. At the Guizhou Branch in the Accounting Department until February 2001, same time concurrently as Commissioner of BPR Bali Dayausaha continued to CCB Tongren Branch until July 2003 with his last Mandiri from July 1995 to May 1998. position as General Manager of Finance & Accounting Department. Returning to CCB Guizhou Branch until October 2014, his last Then as Chief General Manager from January 1996 to May 2000, position was General Manager of Investment Banking Department. In and since June 2000 he was appointed as Forex Trading Business
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 117 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
General Manager until August 2000. He then worked at PT Bank The training followed in 2018 as follows: Lippo as Deputy Regional Head from September 2000 to February 1. Bankruptcy and Settlement of Troubled Credit Training by the 2001. Then had a career at PT Bank OCBC NISP as Bogor Branch Office of Hendri Jayadi, SH, MH on February 6, 2018. Manager from March 2001 to January 2005. Continued as Reg.2 2. Workshop on “Regulation and Implementing Strategy for Executive Branch Dept. Head from February 2005 to June 2006, and was Compensation” (Refreshment Risk Management Certification) by appointed as Reg Region Head. 5 from July 2006 to January 2009. the Bank Association for Risk Management on February 21, 2018 In January 2009, he held the position of Senior Corporate Executive in Jakarta concurrently as Region Head Sumatra until November 2009. 3. Refreshment of APU PPT 2018 by CCBI Online Training on September 9, 2018. The training followed in 2018 as follows: 1. Workshop on “Regulation and Implementing Strategy for As Director, in charge of the fields of Operation, Trade Operation, Executive Compensation” (Refreshment Risk Management Credit Operation, General Affairs & Infrastructure, Special Assets Certification) by the Bank Association for Risk Management on Management, Human Capital and Operation Development, and since February 21, 2018 in Jakarta June 4, 2018 he also oversees Compliance, Legal, Risk Management 2. Refreshment of APU PPT 2018 by CCBI Online Training on and Policy & Procedures. September 9, 2018. As members of the Board of Directors meet the requirements as As Director, oversees Commercial, Commercial Express, Retail set out in the Financial Services Authority Regulation Number 33/ Banking and Regions/Areas/Branches, and since 30 November 2017 POJK.04/2014 (formerly Bapepam IX.I.6 Regulations), Number 27/ oversees the fields of Corporate Banking, Treasury and FI. POJK.03/2016, Financial Services Authority Circular Letter No.39/ SEOJK.03/2016 and obtained approval from the Financial Services As members of the Board of Directors meet the requirements as Authority No. KEP-109/D.03/2016 dated November 30, 2016. set out in the Financial Services Authority Regulation Number 33/ POJK.04/2014 (formerly Bapepam IX.I.6 Regulations), Number 27/ POJK.03/2016, Financial Services Authority Circular Letter No.39/ SEOJK. 03/2016 and obtained approval from the Financial Services Chandra N T Siagian - Director of Finance Authority No. KEP-103/D.03/2016 dated 30 November 2016. Memperoleh gelar Sarjana Ekonomi Jurusan Ekonomi Akuntansi dari . Obtained a Bachelor of Economics degree from the Department of Accounting Economics from the University of Indonesia in 1994. Junianto - Director of Operation Became Director of the Company since November 2018. Indonesian citizen, born in Rembang in 1967. He obtained a Bachelor’s Started his career in banking at HSBC Bank from September 1994 degree in Economics/Management from Satya Wacana Christian to September 2004 in various fields such as Financial Controller, IT University - Salatiga (SWCU) in 1991 and a Masters in Management Business Analyst, Customer Services and Treasury Services with majoring in Management (MM Executive) from Prasetya Mulya various important positions including as Head of Finance. Graduate School - Jakarta in 2002. After that, he continued his career at Standard Chartered Bank from Became Director of the Company since August 2013 and continued September 2004 to February 2007 as Head of Business Finance after the merger between Bank Windu and your bank as of 30 and Strategic Customer Management for Consumer Banking. Then November 2016 as agreed by the Financial Services Authority No. from March 2007 to April 2009 a career at Bank Permata with the SR-104/PB.12/2016. position of Head of Change Management/Strategic Performance Started his career at PT Bank Universal, Tbk (now PT Bank Permata, Management. Tbk) from May 1992 to March 1993 as a Trainee Management In May 2009 as Head of Business Planning and Analytics at Barclays Development Program (MDP). In April 1993, he was appointed as an Bank until June 2010. Subsequently, in July 2010, he continued Account Officer for the Semarang Branch until May 1995. In June his career at Bank Permata with a number of key positions, most 1995, he served as Jakarta’s Corporate Banking Team Leader until recently as Head of Performance Management & Corporate Planning December 1997. Then from January 1998 to December 1999 became until July 2018. the Caretaker Head of the Bandung Branch. Then in January 2000, he held the position of Account Manager in Jakarta until March Training followed in 2018 namely Level 5 Risk Management 2003. In April 2003, he became a Team Leader - Parts, Tools & Certification. Machinery. Starting in May 2003, he worked at PT Bank NISP Tbk as As Director, oversees the fields of Accounting, Financial Planning the Jakarta Credit Risk Section Head until December 2004. From & Performance Management and Corporate Secretary & January 2005 to September 2005, he served as the Commercial Communication. Credit Development Head. Then starting in September 2005, he was appointed as the Corporate Business Head of Jakarta, until January As members of the Board of Directors meet the requirements as 2006. set out in the Financial Services Authority Regulation Number 33/ POJK.04/2014 (formerly Bapepam IX.I.6 Regulations), Number 27/ Continued as Marketing Coordinator of Jakarta V until February POJK.03/2016, Financial Services Authority Circular Letter No.39/ 2006. Then he served as Marketing Department Head of Regional V SEOJK.03/2016 and obtained approval from the Financial Services Jakarta and Bekasi Branch Manager concurrently Area Coordinator Authority No. KEP-188/D.03/2018 November 14, 2018. from February 2006 to January 2009. Continued as Emerging Business and Commercial Head in January 2009 to June 2010. From July 2010 a career at PT Bank Windu Kentjana International, Tbk as the Jabodetabek Regional Head until December 2010. He was later appointed as the Regional Head of Sumatra, Bali, Pontianak & Jatabek in January 2011 to August 2013.
Annual Report 2018 118 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Agresius Robajanto Kadiaman - Compliance Director
* Became Director of the Company since February 6, 2019
An Indonesian citizen, born in Jakarta in 1967. He earned a Bachelor of Economics degree in the Department of Economic Management from the University of Indonesia in 1991 and a Master of Business Administration from Nanyang Technology University, Singapore in 2003.
Becoming Director of the Company since February 6, 2019.
Started his career in banking at Citibank N.A. from April 1991 to April 1997, including as a Financial Control Staff, Relationship Manager and most recently served as Assistant Vice President, Financial Institutions and Custody. POJK.03/2016, Financial Services Authority Circular Letter No.39/ After that, he continued his career at PT Bank Danamon Tbk from SEOJK.03/2016 and obtained approval from the Financial Services May 1997 to November 1999 with his last position as Head of the Authority No. KEP-17/D.03/2019 dated January 31, 2019. Treasury and International Division.
From November 1999 to July 2002, he worked at the National Bank Restructuring Agency in various key positions such as the Head Duties and responsibilities of the Directors of the Bank Restructuring Division and the Head of the Division of 1. Manage the Bank in accordance with the authority and Risk Management and Compliance. In the period November 1999 to responsibility as stipulated in the Articles of Association and the November 2000, he was appointed as Member of the Management applicable laws and regulations. Team at PT Bank Bali Tbk in the framework of the bank restructuring and recapitalization process. 2. Prepare the Bank’s short and long term Strategic Plans.
After completing his 2-nd degree at Nanyang Technology 3. Uphold and apply the principles of Good Corporate Governance University, he began his career again as Advisor at PT Trans Pacific in every business activity of the Bank at all levels or levels of the Petrochemical Indotama from September 2003 to February 2004. organization. Then in February 2004, he was appointed Director of Finance at PT 4. Grow, ensure, and supervise the Bank’s compliance with Tuban Petrochemical Industries until May 2004. In May 2004, he internal and external regulations. returned to PT Trans Pacific Petrochemical Indotama until August 2008 with its last position as Deputy President Director and Chief 5. Follow up on audit findings and recommendations from the Financial Officer. Bank’s Internal Audit Function and Public Accountants, as well as the results of supervision of the Financial Services Authority Continuing his career at PT Sampoerna Strategic, Micro Finance and/or the results of supervision by other authorities with the Business Unit in August 2008 as Chief Financial Officer and Acting following conditions: Chief Risk Officer until December 2011. In the period January 2012 to April 2015 he was appointed as Director of Finance at PT Bank a. Members of the Board of Directors must attend internal audit, Sahabat Sampoerna. external audit, and audit of the Financial Services Authority’s exit meetings relating to the examination of the functions they Subsequently became a Country Channel Partner at APC BIG lead, Singapore in May 2015 to July 2016, and in almost the same period, was appointed as President Director of PT Karabha Digdaya from b. Directors who cannot attend the exit meeting must know and October 2015 to July 2016. sign the exit meeting report.
In July 2016, he was appointed as Director of Finance at PT Sarana 6. When needed, the Board of Directors can form a special work Multi Infrastruktur until July 2018. Meanwhile in September 2016 he unit to ensure that the results of the audit follow-up have been also became an Adviser to the Directors at PT Karabha Digdaya until implemented properly. early February 2019. 7. Establish a Work Function to ensure the implementation of the As of September 2018 until the beginning of February 2019 also principles of Good Corporate Governance consisting of, but not served as an Adviser to the Executive Management of Non-Budget limited to: Investment Financing (PINA), Ministry of National Development a. Risk Management Division, Planning. b. Internal Audit Division, c. Compliance Division The training that was followed in 2018 was a Workshop: 20 Years of Asian Financial Crisis: Strengthening Infrastructure for Financial 8. Forming Committees under it to support the effectiveness of Crisis Resolution (Refreshment) in February 2018 by the Deposit the implementation of duties and responsibilities consisting of: Insurance Agency in Jakarta a. Risk Management Committee, b. Credit Policy Committee, As Director, oversees Compliance, Risk Management, Legal, and c. ALCO Committee, Policy & Procedures. d. Information Technology Steering Committee, As members of the Board of Directors meet the requirements as e. Credit Committee. set out in the Financial Services Authority Regulation Number 33/ 9. Ensure that established committees carry out their duties POJK.04/2014 (formerly Bapepam IX.I.6 Regulations), Number 27/ effectively.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 119 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
The scope of work and responsibilities of None of the members of the CCB Indonesia Directors has financial, each member of the Board of Directors management, ownership and family relations with other members of the Board of Directors, the Board of Commissioners and/or The scope of responsibilities and duties for each of the Company’s Controlling Shareholders or relations with CCB Indonesia, which can Directors in the CCB Indonesia organization as of December 31, 2018 affect their ability to act independently. are as follows: The President Director is from an independent party to the 1. The Bank’s organization is prepared to carry out the Bank’s Controlling Shareholders, because it does not have financial, mission based on sound organizational and management management, share ownership and/or family relations with the principles based on the functions, task areas and business Bank’s Controlling Shareholders. needs of the Bank as a Commercial Bank. 2. Each Director fosters, directs, and oversees the Division and/or The Board of Directors has disclosed strategic Bank policies in the Regions/Areas/Branches in accordance with the division of the field of staffing, through facilities that are known or easily accessed supervising fields as follows: by employees, among others through Work Meetings, Directors’ • President Director: You Wen Nan, in charge and lead: Decrees, Circular Letters, CCB Indonesia Portal, Intranet or other a. Corporate & International Banking Director media. b. Commercial & Retail Banking Director The Board of Directors does not give general power to other parties c. Finance Director which results in the transfer of duties and functions of the Board of d. Operation Director Directors. e. Compliance Director f. Intern Audit Division The Board of Directors has a Board of Directors Meeting Guidelines g. Credit Review Division and Board of Directors Charter, which includes the Directors h. Information Technology Division ‘Performance Evaluation and Evaluation, by referring to the Financial i. Strategic Transformation Division Services Authority Regulation concerning Implementation of Governance for Commercial Banks and Financial Services Authority • Corporate, & International Banking Director: Zhu Yong *, Regulations concerning Issuers’ Directors and Commissioners. Or in charge and lead: Public Company a. Trade Finance Division b. Treasury & Financial Institution Division All meetings have been documented in the minutes of the Board of c. Corporate Banking 1 Directors Meeting signed by all members of the Board of Directors d. Corporate Banking 2 present and distributed to all members of the Board of Directors. * Effective since March 29, 2019 Directors, either individually or jointly, do not have shares exceeding Previous positions held by Setiawati Samahita until the appointment of 25% of the paid up capital of the bank and/or other companies. Corporate & International Banking Director effective Integrity, competence and financial reputation of all members of the Board of Directors are considered adequate. • Commercial & Retail Banking Director: Setiawati Samahita, in charge and lead: All members of the Board of Directors come from independent a. Commercial Division parties and do not have mutual financial, management, ownership b. Commercial Express Division and family relations with members of the Board of Commissioners, c. Retail Banking Division other Directors and/or Controlling Shareholders or relations with the d. Regions/Areas/Branches Bank, which may affect their ability to act independently. Members of the Board of Directors have passed the fit and proper test and • Finance Director: Chandra N.T Siagian, in charge and lead: have obtained approval from the Financial Services Authority. a. Corporate Secretary & Communication b. Financial Planning & Performance Management and At the position of December 31, 2018, the number of members of Accounting Division the Board of Directors is not less than 3 (three) people. Based on the proceedings in accordance with the Bank’s organizational structure, • Operation Directo : Junianto, in charge and lead: there are still vacancies of 2 (two) Director Positions, namely the a. Operation Division Corporate & International Banking Director and the Compliance b. Trade Operation Division Director. c. Credit Operation Division However, after the period of this Annual Report, the Financial d. General Affair & Infrastructure Division Services Authority has submitted the Capability and Compliance e. Operation Development Division Assessment Results and provided approval to the Director of f. Special Asset Management Division Corporate & International Banking and the Compliance Director g. Human Capital Service Management Division submitted. h. Human Capital Development Management Division - Based on the Decision of the Member of the Financial Services • Compliance Director: Agresius Robajanto Kadiaman *, in Authority Board of Commissioners Number KEP-4/D.03/2019 charge and lead: dated January 4, 2019 concerning the Results of the Capability a. Legal Division and Compliance Assessment of Mr. Zhu Yong as Director of b. Compliance Division Corporate & International Banking of PT Bank China Construction c. Corporate policy, Guidelines & Procedure Division Bank Indonesia, Tbk, which was delivered by OJK letter No.SR-2/ d. Risk Management Division PB.12/2019 dated January 8, 2019 and received by the Bank on * Effective since February 6, 2019 11 January 2019, the Financial Services Authority has given your Previously Junianto held the position until the appointment of the consent Zhu Yong became Director of Corporate & International Compliance Director was effective. Banking at PT Bank China Construction Bank Indonesia, Tbk.
Annual Report 2018 120 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
With the receipt of a Limited Stay Permit (Electronic) from the February 6, 2019, the Financial Services Authority has given your Ministry of Law and Human Rights of the Republic of Indonesia consent Agresius R. Kadiaman becomes Compliance Director of on March 29, 2019 with No Permit 2C11JE3047-T dated March PT Bank China Construction Bank Indonesia, Tbk. 28, 2019, and Notification for employing Foreign Workers The effective appointment of the Compliance Director has been from the Ministry of Manpower R.I. dated February 1, 2019, reported by the Bank to the OJK by letter No. 068/CCBI/DDIR-OJK/ the appointment of Mr. Zhu Yong as Director of Corporate & II/2019 dated February 12, 2019 and letter No. 075/CCBI/DDIR- International Banking has been effective as of March 29, 2019. OJK/II/2019 dated 20 February 2019 concerning Reports of the The effective appointment of the Director of Corporate & End of Temporary Replacement of Director Position Subordinating International Banking has been reported by the Bank to the FSA Compliance Function. by letter No. 119/CCBI/DDIR-OJK/III dated March 29, 2019.
- Based on the Decision of the Member of the Financial Services Authority Board of Commissioners Number KEP-17/D.03/2019 Implementation of Board of Directors dated January 31, 2019 concerning the Results of the Capability Meetings and Compliance Assessment of Mr. Agresius R. Kadiaman as a During 2018, the Board of Directors held 26 (twenty six) Board of candidate for Compliance Director of PT Bank China Construction Directors Meetings, all physically attended by all members of the Bank Indonesia, Tbk, which was delivered by OJK letter No.SR-32/ Board of Directors, as the table below: PB.12/2019 dated February 1, 2019 and received by the Bank on
You Setiawati Dewi Arimbi Adri No Date Meeting agenda Junianto Wennan Samahita Kurniawati Triwitjahjo
1. Jan 03, 2018 Follow up of OJK findings √ √ √ √ √
2. Jan 04, 2018 Follow up of OJK findings √ √ √ - √
3. Jan 05, 2018 Follow up of OJK findings √ √ √ √ √
4. Jan 08, 2018 Follow up of OJK findings √ √ √ √ √
5. Jan 09, 2018 Follow up of OJK findings √ √ √ √ √
6. Jan 10, 2018 Follow up of OJK findings √ √ √ √ √
OJK's response to the utilization of Foreign Workers 7. Jan 15, 2018 √ √ √ √ √ (TKA)
8. Jan 17, 2018 Appointment of lawyers for CSPA legal assessments √ - √ √ √
- Legal case of Geria Wijaya Prestige (GWP) 9. Feb 13, 2018 - Relocation of the Head Office from Equity to Sahid √ √ - √ √ Sudirman
10. Feb 21, 2018 Follow-up business meeting meeting with OJK √ √ - √ √
11. Feb 26, 2018 Follow up of 2017 OJK findings √ - √ - √
Discussion of audit findings for the end of December 12. Mar 14, 2018 √ √ √ √ √ 31, 2017
13. Mar 28, 2018 OJK's response to discussions about adjusting the RBB √ √ √ √ √
14. Apr 25, 2018 Discussion of GWP cases √ √ √ √ √
- Follow up of OJK audit findings 15. Apr 30, 2018 - Discussion about the position of the vacant Head of √ √ - √ √ Division
- OJK Letter 16. May 18, 2018 √ √ √ - √ - Finalization of vacant positions
- Arrangement of the Board of Directors duties after 17. Jun 04, 2018 √ √ √ the GMS
Discussion about the Response to OJK Capital Market 18. Jul 6, 2018 √ √ - Letters
19. Aug 3, 2018 Candidate for Compliance Director √ √ -
- Improve Liquidity Management 20. Aug 7, 2018 √ √ √ - Training Program
- - Compliance Director Candidate 21. Aug 15, 2018 √ √ √ - - Asset sales
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 121 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
You Setiawati Dewi Arimbi Adri No Date Meeting Agenda Junianto Wennan Samahita Kurniawati Triwitjahjo
- OJK Audit 22. Sep 12, 2018 - Asset Collateral Sales Policy √ √ √
23. Oct 24, 2018 Preparation of RBB Preparation √ √ √
RBB 2019-2021 and RBB Presentation Preparation to 24. Nov 8, 2018 √ √ √ OJK
25. Nov 13, 2018 Preparation of RBB 2019-2021 √ √ √
1. Policy for KPI 2. 2018 Financial Performance 3. 2018 Final Financial Report and Audit Report 26. Dec 17, 2018 Schedule √ √ √ 4. 2019 - 2021 Capital Plan 5. Substitution of the Public Accounting Firm 6. 2019 Kick of Meeting
√: Attend meeting -: Not present in the meeting
Training attended by the Board of Directors members during 2018:
Name Training Date Organizers/Location
Workshop on "Regulation and Implementing Strategy for Executive ASTA Consulting and LSPP/ Compensation" (Refreshment Risk Management Certification) by the 21 Feb 2018 Jakarta Bank Association for Risk Management.
(Refreshment Risk Management Certification) by the Bank Association You Wennan for Risk Management.
Refreshment of APU PPT 2018 by CCBI Online Training. 9 Sep 2018 CCBI, Jakarta
Indonesian Language Course. 16 Nov 2018 Private
Bankruptcy Training and Problematic Credit Settlement 6 Feb 2018 Hendri Jayadi, S.H., M.H.
Workshop on "Regulation and Implementing Strategy for Executive ASTA Consulting and LSPP/ Setiawati Samahita Compensation" (Refreshment Risk Management Certification) by the 21 Feb 2018 Jakarta Bank Association for Risk Management.
Refreshment of APU PPT 2018 by CCBI Online Training. 9 Sep 2018 CCBI, Jakarta
Bankruptcy Training and Problematic Credit Settlement 6 Feb 2018 Hendri Jayadi, S.H., M.H.
Workshop on "Regulation and Implementing Strategy for Executive ASTA Consulting and LSPP/ Junianto Compensation" (Refreshment Risk Management Certification) by the 21 Feb 2018 Jakarta Bank Association for Risk Management.
Refreshment of APU PPT 2018 by CCBI Online Training. 9 Sep 2018 CCBI, Jakarta
Annual Report 2018 122 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Committees under the Board of Directors applicable laws and regulations; ensure the Bank’s compliance with commitments made by the CCB Indonesia to the Financial Services As of the end of 2018, there are 5 (five) committees in CCB Indonesia, Authority, Bank Indonesia and/or other supervisory authorities in which consist of: charge.
The Bank has General Compliance Policies and Guidelines and Asset and Liability Committee (ALCO) Guidelines for Implementing the Compliance Function.
The Asset and Liability Committee is in charge of managing the In accordance with article No. 46 /POJK.03/2017 dated July 12, assets and liabilities of the Bank. More broadly, ALCO also has 2017 concerning the Implementation of the Compliance Function; the task of managing liquidity, interest rate management, foreign the Bank must have a Director in charge of the Compliance Function currency management and investment management and gapping and form a compliance work unit. management. The obligation to have a Director in charge of the Compliance Function has been fulfilled by the appointment of Ms. Dewi Arimbi Risk Management Committee Kurniawati as Director through the Annual GMS on May 17, 2013, The Risk Management Committee is in charge of assisting the Board and subsequently through the Annual GMS on May 16, 2014, most of Directors in reviewing policies and delegating responsibility for recently through the Annual GMS on May 30, 2017, where the determining policies and procedures, and ensuring that the business proposal to become Director who oversees the Compliance Function unit has implemented the strategies that have been approved by has obtained approval from Bank Indonesia on May 17, 2013 through the Board of Directors appropriately. a letter from Bank Indonesia Number 15/I/GBI/DPIP/Rahasia. The Annual General Meeting of Shareholders dated May 30, 2018, Credit Policy Committee approved the resignation of Ms. Dewi Arimbi as the Compliance Director of CCB Indonesia. Is a Committee that assists the Board of Directors in formulating policies, monitors the progress and conditions of the credit portfolio Regarding the resignation of Ms. Dewi Arimbi Kurniawati as the and provides corrective steps. Compliance Director, - Referring to Article 9 paragraph (3) and paragraph (4) of the Information Technology Steering Committee Compliance Function POJK, the implementation of the duties of the Director in charge of the Compliance Function is temporarily The Information Technology Steering Committee (IT) is responsible replaced by another Director until the position of Compliance for managing and monitoring the use of Bank Information Director is filled with the definitive Director. Technology including providing recommendations to the Directors regarding the formulation of IT Strategic Plans in line with the - Considering that all other Directors who are unable to fulfill the Bank’s Strategic Plan, formulating IT policies and procedures and provisions concerning multiple positions as referred to in Article risk management related to the use of IT and monitoring project 7 paragraph (2) and the prohibition on carrying out functions as compliance IT projects that are approved with IT Strategic Plans and referred to in Article 7 paragraph (3), then by referring to article IT user needs to support the Bank’s business activities. 9 paragraph (5) and paragraph (6) POJK Compliance Function, the Bank appoints or assigns Mr. Junianto (Operations Director) for the time being carried out the duties of the Director in charge Credit Committee of the Compliance Function until the vacancy of the Compliance The Credit Committee functions to provide credit approval and credit Director was filled with the definitive Director. extension to the credit limit determined by the Board of Directors The appointment, designation and resignation of the Director in and maintain the quality of loans provided so that the determination charge of the Compliance Function are in accordance with the of credit quality and the provision of allowance for earning assets applicable provisions. is carried out in accordance with the bank’s prudential principles. The Director in charge of the Compliance Function has submitted a All Committees formed under the Board of Directors have a Working report on the implementation of duties and responsibilities quarterly Code of Conduct as a reference for the Committees of each to the President Director with copies to the Board of Commissioners, Committee in their role in assisting the Directors. as well as semi-annually to the Financial Services Authority with copies to the President Director and Board of Commissioners. Application of Compliance Function The Bank has a Compliance Division, including the Anti-Money Laundering and Prevention of Terrorism Funding Division, which CCB Indonesia is committed to complying with applicable laws is formed independently which is formed separately and free from and regulations, both those issued by Bank Indonesia and other the influence of other work functions, and has direct access to the authorities. Implementation of the CCB Indonesia Compliance Director in charge of the Compliance Function. The Compliance Function refers to the Financial Services Authority Regulation No. Division is established at the Bank’s head office, but carries out 46 /POJK.03/2017 on July 12, 2017 concerning Implementation of the Compliance Function throughout the Bank’s office network. Compliance Function of Commercial Banks. In addition, in the organizational structure of the Compliance Directorate, a Policy & Procedure Division has also been formed. The Compliance Function includes actions to realize the implementation of the Compliance Culture at all levels of the The Bank has provided quality human resources to the Compliance organization and business activities of the CCB Indonesia; Division to complete tasks effectively. managing Compliance Risk faced; ensure that policies, regulations, The Compliance Director and Compliance Division have established systems and procedures as well as business activities carried out policies and developed guidelines to ensure compliance, adequacy by the Bank are in accordance with Bank Indonesia regulations and
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 123 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
and effectiveness of the role of the compliance function in all layers - Determine the steps needed by paying attention to the principle of the bank’s organizational structure. of prudence
The Bank has made improvements by improving the implementation - Monitor, maintain and ensure that the Bank’s business activities of the APU PPT program through the provision of AML Systems do not deviate from the provisions outside of core banking, improvement and refinement of all Policies, - Monitor and maintain the Bank’s compliance with all agreements Guidelines and SOPs (KSOP), as well as updating KSOP in connection and commitments made by the Bank to the Financial Services with the enactment of new regulatory provisions and business Authority and the competent authority. development of the Bank.
The increasing role of the compliance function is always carried out in assisting the bank’s compliance improvement process, reflected Administrative Sanctions in efforts that have been carried out through publishing compliance news, compliance opinion, compliance review, compliance checklist, • Administrative sanctions imposed on the Company socializing bank regulations and becoming the liaison officer of the In 2018 there were still a number of minor sanctions in the field of Financial Services Authority, Bank Indonesia and other regulators reporting imposed by Regulators on CCB Indonesia. In the event The level of Bank compliance with all applicable laws and regulations of non-compliance, the Bank has corrected and determined and fulfillment of commitments with the competent authorities. follow-up actions for repairs so that similar non-compliance does not occur again. The Bank has ensured the Bank’s compliance with the provisions of the Financial Services Authority, Bank Indonesia and applicable laws and regulations, including:
Date of No. Letter No. Description of Non-Compliance Fine Follow-up Violations
Each dealer in the Treasury Division ensures a double checker 20/10/DPKL-GPP1-PPw2/ Error inputting transaction rates on Form on transactions carried out by 1 Rp 50,000 23-Oct-17 Fax/B 201 Commercial Bank Daily Reports the Branch Office before being reported to the LHBU system every day.
Each dealer in the Treasury Division ensures a double checker 20/15/DPKL-GPLB-PLBP/ Error inputting transaction rates on Form on transactions carried out by 2 Rp 50,000 24-Aug-17 Srt/B 201 Commercial Bank Daily Reports the Branch Office before being reported to the LHBU system every day.
The division responsible for reporting will be more careful in submitting daily reports with Late in submitting a Form 602 Commer- due regard to the deadline for 20/72/DPKL-GPLB-PLBP/ 3 cial Bank Daily Report of the deadline for Rp 1 ,000,000 submitting reports 4-Apr-18 Faks/B submission The division responsible for reporting will make a reminder via email for the entire team.
Treasury will confirm with the prime counterparty before Late in submitting a Form 301 Commer- 20/595/DPKL-GPLB-PLBP/ the transaction to ascertain 4 cial Bank Daily Report of the deadline for 27-Feb-18 Srt/B Rp 250,000 whether the securities purchase submission transaction will be reported through the LHBU by both parties
Division in charge of reporting will be more careful in the delivery of the daily report with regard Late in submitting a Form 602 Commer- 20/646/DPKL-GPLB- deadline for submission of reports 5 cial Bank Daily Report of the deadline for Rp 1,250,000 4-Apr-18 PLBP/Srt/B submission Division in charge of reporting will create a reminder by email to the entire team.
The bank submits an off-line correction through a letter to Bank Indonesia. 20/206/DPKL-GPLB-PLBP/ Late in submitting a Form 201 Correction Com- Furthermore, it will be more 6 Rp 50,000 6-Apr-18 Fax/B mercial Bank Daily Report of the deadline careful in submitting corrections to reports by observing the submission deadline in accordance with the provisions.
Late in submitting the Second Entity 2018 consolidated Parent Entity financial Improved coordination among the 7 S-141/PB.322/2018 - 14-Sep-18 publication report, for 2 days in accordance relevant Division. with the stipulated conditions
Annual Report 2018 124 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Date of No. Letter No. Description of Non-Compliance Fine Follow-up Violations
At present, improvements have been made to the Central Bank correction Commercial Bank Monthly Report Reporting (CBR) application by 20/302/DPKL-GPLB-PLBG/ 8 October 2018 submission period (data Rp 100,000 using the Domicile Field on the T24 6-Oct-18 Srt/Rhs September 2018) core banking, and the Accounting Division has increased monitoring for the following period reports.
Rp 2,750,000
• Administrative sanctions imposed on members of the Board of The appointment of the Head of the Internal Audit Division has Commissioners been reported to Bank Indonesia on June 4, 2018 through on-line In 2018 there are no administrative sanctions imposed on Commercial Bank Head Office Reports, and to the Financial Services members of the Company’s Board of Commissioners. Authority on June 5, 2018 through letter No. 194/CCBI/DDIR-OJK/ • Administrative sanctions imposed on members of the Board of VI/2018. Directors In 2018 there are no administrative sanctions imposed on Effectiveness and scope of internal audit in assessing members of the Company’s Board of Directors. all aspects and elements of Bank activities
Internal Audit Division is responsible for conducting the examination Application of Internal Auditor Functions independently and effectively in all aspects and elements of activities that directly expected to affect the interests of the Bank Based on the Financial Services Authority Regulation of Bank and the community. Indonesia No.1/6/PBI/1999 dated September 20, 1999 concerning Assignment of Compliance Director and Implementation of The Internal Audit Division works based on the annual audit work Standards for Implementation of Commercial Bank Internal Audit plan, which has previously been approved by the President Director. Functions, CCB Indonesia established an Internal Audit Division In the first semester of 2018 there was a change in the IAU work (IAU) which is an independent work function towards the operational plan, but it had been adjusted again and made improvements by work unit, and is responsible directly to the President Director. expanding the scope of the Internal Audit Unit. The results of the The organizational structure of the Bank’s IAU is in accordance with Internal Audit Division’s examination along with recommendations applicable regulations. for follow-up are reported directly to the President Director and the Board of Commissioners which are represented by the Audit The Bank has General Audit Policies and Guidelines, Internal Committee with a copy to the Director Who Subordinates the Audit Charter, and is equipped with several Standard Operating Compliance Function. Furthermore, the Board of Commissioners will Procedures (SOPs), including: Operational Audit SOP, Credit Audit supervise and confirm that management has taken the necessary SOP, Treasury Audit SOP, Trade Finance Audit SOP, Audit SOP corrective steps for the results of the inspection. Information Technology. CCB Indonesia continues to run an internal control system The Bank provides quality resources in the Internal Audit Division effectively and efficiently by monitoring the results of follow-up to complete tasks effectively. The Internal Audit Division is led by actions that have been carried out by the auditee while those who an Audit Division Head, Erwin Ruchiawan, an Indonesian citizen, have not yet followed up the Internal Audit Division will confirm born in Bandung in 1970. He holds a Bachelor of Economics degree the relevant ones and send internal memos for their follow-up. from STIE Banking Inaba Bandung. Started his career in banking at Monitoring procedures have been carried out without exception, by the National Public Bank, in 1991-1998 in the field of Accounting, maintaining a supportive environment in internal control efforts. Operation, and finally as Internal Control. 1998-2010 as Auditor at PT OCBCNISP, Tbk, last as Senior Auditor. In 2010 - 2014 as the last In addition to carrying out activities in the auditing field, the Internal auditor for PT Bank Nusantara Parahyangan, Tbk as a Department Audit Division always acts as a consultant to internal CCB Indonesia Head. 2014 - 2015 as Auditor of Bank Sahabat Sampoerna, Tbk as parties who need it, especially in matters relating to the internal the Delivery Channel, Operations & Head Office Dept. Head. Starting control system. in 2016 as a Senior Auditor at PT Bank Windu Kentjana International, CCB Indonesia Directors are responsible for creating an internal Tbk (which later changed its name to PT Bank China Construction control structure and guaranteeing the implementation of CCB Bank Indonesia, Tbk). Indonesia internal audit function at every management level. Each Training in 2018: Risk Management Certification Maintenance Inspection Report (LHP) reported to the President Director, is Program Training with the theme of Governance, Risk & Compliance circulated to all Directors with a copy to the Audit Committee. With on January 13, 2018 in Jakarta the existence of this mechanism, each finding will be of concern to management and immediately to be followed up in accordance with Certificates: Internal Quality Auditing from the Certificate IV in their respective fields. Quality Management & Assurance and Advanced Qualified Internal Audit (QIA) Overall, during 2018 the implementation of the internal control function has been going pretty well. Appointed as Acting Head of Audit Division since January 2, 2018 based on Directors Decree No. 001/CCBI/HC-SM/KTP-DIR/I/2018. The Bank periodically reviews the effectiveness of the Furthermore, it was determined and appointed as Head of Audit implementation of Internal Audit and its compliance with the Division based on Directors Decree No. 034/CCBI/HC-SM/KTP- Standards for Implementation of Commercial Bank Internal Audit DIR/V/2018 dated May 31, 2018.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 125 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Functions by external parties every three years. The report of the Bank has a proper organizational structure to support the intended review, last reported to the Financial Services Authority on implementation of risk management and good internal control such October 12, 2017 by letter No. 386/CCBI/DDIR-OJK/X/2017. as forming an Internal Audit Division, Risk Management Division, Risk Management Committee, Risk Oversight Committee, as well as Compliance Division.
Implementation of External Audit Function a. Active Supervision of Board of Commissioners and Board In accordance with provision of Financial Services Authority of Directors concerning Procedures for Using Public Accountant Services and Bank has determined clear duties and responsibilities for every Public Accounting Firm in Financial Services Activities which have position level related to the implementation of Risk Management. been regulated in POJK No. 13/POJK.03/2017 and SE OJK No. 36/ SEOJK.03/2017, Bank will appoint Public Accountant and Public Board of Commissioners has actively implemented the supervision Accounting Firm which have been registered in Financial Services on the implementation of risk management, such as: Authority to conduct audit on the annual report. - approved and evaluated Risk Management policy including strategy and structure of Risk Management. The annual GMS conducted on May 30th, 2018 has approved - evaluated the responsibilities of Board of Directors and the authorization for Board of Commissioners to appoint Public directed an improvement on the implementation of Risk Accounting Firm in conducting an audit of 2018 annual report of the Management policy periodically. Company, as well as determining a total of honorarium and other appointment requirements of that Public Accountant. In conducting the supervision on the implementation of risk management, Board of Commissioners is assisted by Internal The appointment of Public Accountant and Public Accounting Control Committee. Firm which will audit the Financial Statements of the Company for financial year 2018 is conducted by remarking a recommendation Followings are the active role that Board of Directors of CCB from Audit Committee to Board of Commissioners. Indonesia have shown: - Prepare, evaluate, and update Risk Management policy The Audit Committee recommendation to Board of Commissioners including strategy and structure of Risk Management. is conveyed through an internal memo No. 001/MI/KA/V/2018 dated - Ensure that Risk Management Function has been implemented 16 Mei 2018, to appoint Public Accountant and Public Accounting independently. Firm Tanudiredja, Wibisana, Rintis & Rekan (PricewaterhouseCoopers - Prepare, evaluate, and update procedures and tools to identify, Indonesia or Public Accounting Firm PwC Indonesia) in auditing the scale, monitor and control risk. Financial Statements of the Company for financial year 2018. - Responsible for implementing Risk Management as well as The appointment of Public Accounting Firm has been reported to evaluating and giving a direction based on reports delivered Financial Service Authority-Capital Market Supervisory through a by the Risk Management Work Function including reports on letter No 213/CCBI/DDIR-OJK/VI/2018 and FSA - Bank Surveillance risk profile. through a letter No.214/CCBI/DDIR-OJK/VI/2018, both are dated on - Ensure the implementation of improvement steps on any June 25, 2018. concerns or frauds during Bank activities founded by the Internal Audit Division. The whole member of Board of Commissioners has recommended - Develop Risk Management culture including risk awareness Public Accounting Firm Tanudiredja, Wibisana, Rintis & Rekan (Price for all organizational levels. Waterhouse Coopers Indonesia or Public Accounting Firm PwC Indonesia) to audit the Financial Statements of CCB Indonesia for In ensuring the implementation of risk management to run as it is, financial year 2018, stipulated in No.004/DKOM/MI/V/2018 dated 25 Board of Directors are assisted by Risk Management Committee. Mei 2018. Efforts in improving the implementation of risk management are The appointed Public Accountant and Public Accounting Firm such periodically discussed in the Board of Commissioners meeting, as Public Accountant and Public Accounting Firm Tanudiredja, Committee meeting, and/or Board of Directors meeting. Wibisana, Rintis & Rekan (Price Waterhouse Coopers Indonesia or Public Accounting Firm PwC Indonesia) is the registered Public b. Adequacy of policy, procedure, and limit determination Accounting Firm as a Bank Audit at Financial Services Authority. This appointed Public Accountant and Public Accounting Firm Bank has an adequate policy, procedure, and risk limit conducting the audit is based on the agreement No. EL2018060705/ determination to support the implementation of risk management, MJW/SON/BOL/jap dated 7 June 2018. such as: Policy and General Guideline of Risk Management, Guideline on Risk Profile, Guideline on Strategic Risk, Guideline Auditor performs its duties objectively. The audit implementation on Risk Compliance, Guideline on Legal Risk, Guideline on on Financial Statements ending on December 31st, 2018 is Reputational Risk, Guideline on Liquidity Risk, Guideline on conducted based on the agreement No.EL2018060705/MJW/ Capital Risk, Guideline on Operational Risk, Guideline on Credit SON/BOL/jap dated 7 June 2018. Public Accountant performs its Risk, Guideline on Internal Capital Adequacy Assessment Process audit independently, meets the professional standard of public (ICAAP), Guideline on Health Level of Bank with Risk Based, accountant and work agreement as well as the designated scope Guideline on Asset & Liability Management (ALMA), Guideline on of audits, and has communicated with Financial Services Authority Business Continuity Management (BCM) and Business Continuity related to the audited Bank condition due to its preparation and Plan (BCP), Guideline on New Product and Activity, CKPN audit implementation. Guideline, Implementation of The Three Line of Defense Guideline (3LD). Implementation of Risk Management c. Adequacy of identification process, scaling, monitoring, including Internal Control and risk control as well s risk management information system
Annual Report 2018 126 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
CCB Indonesia has implemented the risk management policy in accordance with applicable provisions. Besides, any concerns that aims to ensure the incurring risks can be identified, scaled, related to the adequacy of internal control has been reported to monitored, managed, and reported which will eventually provide the Management and the follow-up steps have been conducted to such benefits as enhancing trust from shareholders and minimize risks. communities. In order to achieve that goal, Bank has formed In the reinforcement of internal audit system as well as fulfillment Risk Management Committee and Risk Management Division of Governance Structure, Bank has conducted the rearrangement, which are responsible for determining the Risk Management improvement, and update on the Policy and General Guidelines, Policy to face the incoming risks, improving and completing the Guidelines, and Standard Operating Procedure (KSOP). implementation of Risk Management. Up until the end of 2018, the Bank had 156 KSOP and revised 10 In essence, the risk management process is conducted by Policies, 35 Guidelines and 37 SOPs. every unit, considering the incoming risks are the individual risk attached to the product, transaction, even the process In order to implement an optimum KSOP, Bank has distributed KSOP to the related unit. In order to manage the risk management, to all Bank Offices in line with every portion and conducted a KSOP CCB Indonesia has formed Risk Management Work Function socialization to all Bank Offices. which is responsible for monitoring the implementation of risk management policy that has been approved by Board of Directors and reviewing the process of risk management periodically, including reviewing every new proposed product and activity.
The implementation of Risk Management of CCB Indonesia includes an active supervision of management, implementation of policy, procedure, and limit determination. Bank has also identified, scaled, monitored, and controlled risks as well as determined the risk control system.
During the risk management process, Risk Management Division has prepared the Risk Profile report using the appropriate method in accordance with the provision of Financial Services Authority concerning the Implementation of Risk Management for Commercial Banks as stipulated in the FSA regulation No. 18/ POJK.03/2016 and Circular of the Financial Services Authority No.34/SEOJK.03/2016.
The evaluation mechanism of Risk Profile report using risk level and ranking determination is aimed and aligned with the Corporate Secretary evaluation of health level of Bank based on risk or Risk Based Corporate Secretary is an integral part in the implementation of Rating (RBBR) as well as other applicable provisions of Financial Good Corporate Governance of CCB Indonesia primarily relating Services Authority. The risk profile report is prepared periodically to the implementation of openness, likewise, ensuring that CCB which will be reported to Board of Directors to be subsequently Indonesia complies with applicable provisions and regulations of discussed in the Risk Management Committee. capital markets. The appointment of Corporate Secretary of the Company is to maintain the image of CCB Indonesia and protect any d. Comprehensive Internal Audit Control interests of CCB Indonesia by creating good communication and relationship with respective stakeholders through public relations As a commitment of Bank on the implementation of both Good activities and representing Board of Directors in every aspect Corporate Governance and risk management in a prudent and related to the external communications, primarily to investors, healthy business banking practices, CCB Indonesia conducts a capital market communities and shareholders. comprehensive control function independently and objectively. In essence, the implementation of internal control is conducted Main Function of Corporate Secretary includes: through the inherent control mechanism in every work unit, such 1. Representing Board of Directors in the relations with external as in the form of direct control from supervisor to staff, compliance parties, primarily investors, capital market communities, related on the work procedure standards, and any other internal control institutions, and shareholders. mechanisms. The control function ensures that internal control 2. Monitoring the compliance of the Company on the provisions system has run as how it is run by the Internal Audit Division which and regulations of capital market. is directly responsible for the President Commissioner. 3. Supporting the Company’s execution by the Board of Directors and Board of Commissioners in order to align with other articles The internal control function by Internal Audit Division is conducted of association. using the systematic audit method and risk based audit so that the 4. Conducting activities to support the implementation of principle control can be prioritized using the process or unit that requires of openness, primarily related to CCB Indonesia’s performance higher risks. through a communication with required parties.
In overall, the internal control quality system has shown an adequate Corporate Secretary of CCB Indonesia is led by Mr. Andreas Herman result. CCB Indonesia is continuously conducting an effective and Basuki, who is domiciled in Jakarta, started off his career in bank efficient internal audit control, and the control procedure has been sector since 1990 at Mediabank until April 1994 in the Corporate implemented with no exceptions, by maintaining the environment Banking Division. In period of June-December 1994, he worked at that might support internal audit efforts. The significant finding of Mitsubishi Corporation in Chemical Division. In January 1995, he internal auditors has been reported to Financial Services Authority joined Bank Windu Kentjana heading some positions such as Head
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 127 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
of Credit Marketing Division, Chief Bureau of Board of Directors concerning Implementation of Sustainable Finance for Financial double hatting as Head of Risk Management Work Unit. After merger Services Agencies, Issuers and Public Companies” by Indonesia since January 2008, he was appointed as Corporate Secretary. Stock Exchange and Indonesian Corporate Secretary Association He received a degree of Young Graduate of Information and dated 9 January 2019 in Jakarta. Management from Universitas Binus in 1988 and earned Bachelor of 2) Seminar “Optimization Role of Financial Sector to Enhance Economics from Universitas Trisakti Jakarta in 1990. Economic Growth” by Indonesia Stock Exchange and Indonesian In accordance with Financial Service Authority Regulation No. Public Listed Companies Association dated 20 February 2018 in IX.I.4 concerning Formation of Corporate Secretary and No. 35/ Jakarta. POJK.04/2014 concerning Corporate Secretaries of Issuers or 3) Workshop “Regulation and Implementing Strategy for Executive Public Companies, as well as referring to the Decision Letter No. Compensation” by Bank Association for Risk Management (Mr 006/BM/SDM/SK-DIR/II/08 and No. 072/MW/SDM/KTP/XI/13, Pardi Sudradjat) dated 21 February 2018 in Jakarta. hereby we would like to deliver the Report of Implementation Result 4) Seminar “Strategy of Indonesia’s Competitiveness Empowerment of Corporate Secretaries’ duties throughout 2018: in Global Economy” by Coordinating Ministry for Economic Affairs 1) Accommodate and support in preparing the narration of Business of Indonesia dated 7 March 2018 in Jakarta. Plan Revision (RBB) in 2018-2020 in January - February 2018. 5) Seminar “Business Forum Indonesia – Leading the Indonesian 2) Accommodate the implementation of Extraordinary GMS at Market: Digital Innovation in Financial Services” by Bisnis Seminar Room, Indonesia Stock Exchange, Jakarta, dated 2 Indonesia and SWIFT dated 12 March 2018 in Jakarta. February 2018, including its reports to FSA and information 6) Seminar “POJK Number 33/POJK.04/2014 concerning Director disclosure for public related to the Extraordinary GMS result. and Board of Commissioners of Issuers or Public Companies 3) Accommodate and handle the preparation of Annual Report and POJK Number 58/POJK.04/2017 concerning Submission 2017 in March-April 2018, including its reports to FSA, IDX, and of Registration Statement or Application for Corporate Action distribution to bank economics research, ranking institutions, Electronically” by Indonesia Stock Exchange and Indonesian mass media, institutional bank education and other external Corporate Secretary Association dated 16 April 2018 in Jakarta. parties. Besides, the Annual Report 2017 preparation to Bappebti 7) Workshop “Understand Media and Digital Disruption” by in March 2018 has been handled. Indonesian Corporate Secretary Association dated 5 June 2018 4) Accommodate the execution of Annual GMS and Public Expose in Jakarta. at Seminar Room, Indonesia Stock Exchange, Jakarta, dated 30 8) Explanation and Discussion “Concept of I-V Provision concerning May 2018, including its reports to FSA and information disclosure Particular Provisions of Securities Listing Acceleration” by for public related to the GMS result and Public Expose. Indonesia Stock Exchange dated 6 July 2018 in Jakarta. 5) Attend the implementation of Board of Directors meeting and 9) Workshop “Consequences of Securities Exchange Act towards ensure the minutes of meeting results has been prepared Public Companies and Required by Corporate Secretary” by during semester 1 in 2018, as well as coordinate with Board of Indonesia Stock Exchange and Indonesian Corporate Secretary Commissioners to the implementation of Board of Commissioners Association dated 23 July 2018 in Jakarta. and Board of Directors Meeting, Board of Commissioners Meeting 10) Seminar “Heading to Modern Capital Market in Digital Economy and Committees Meeting. Era” by Financial Services Authority and Indonesia Stock 6) Maintain and update website of CCB Indonesia throughout Exchange in 18 September 2018 in Jakarta. semester 1 in 2018. 11) Seminar “Socialization POJK Number 9/POJK.04/2018 7) Handle requests of data or information from external parties. concerning Open Company Takeover and POJK Number 11/ shareholders, mass media and stakeholders related to CCB POJK.04/2018 concerning Debt Securities General Offer and/ Indonesia throughout semester 1 in 2018. or Islamic Bond to Professional Investor” by Indonesia Stock 8) Maintain communication and reports to FSA (Capital Market Exchange and Indonesian Corporate Secretary Association Supervisory and Bank Supervisory), Bank Indonesia, IDX, KSEI, dated 27 September 2018 in Jakarta. AEI, BAE, Perbanas, LPS, and other supported professions as well 12) Workshop “Sustainability Reporting based on GRI Standard and as related institutions in accordance with provisions, throughout Alignment with SDG’s Targets” by SRA Consulting dated 30 semester 1 in 2018. October 2018 in Jakarta. 9) Accommodate and support in preparing the narration of 13) Seminar “POJK Socialization concerning Revaluation for Main Business Plan Revision (RBB) in 2018-2020 in June 2018. Party of Financial Services Agencies” by Financial Services 10) Accommodate the implementation of corporate social Authority dated 3 December 2018 in Jakarta. responsibility “CCB Care” in 2018 such as social visit to The role implementation of Corporate Secretary has generally Orphanage, regular Blood Donation activity, Bank Education achieved in accordance with the 2018 work plan, and faced no for SME’s entrepreneurs, School Assistance, Palu and Lombok significant challenges in realizing the intended work plan. Earthquake, as well as Green program. 11) Accommodate the execution of Extraordinary GMS at Seminar Room, Indonesia Stock Exchange, Jakarta, dated 10 October Lending to related parties and large 2018, including its reports to FSA and information disclosure for exposures public related to the GMS result. In carrying out its business activities, CCB Indonesia conducts 12) Accommodate and support in preparing the narration of Business some transactions of lending to related parties and large exposures. Plan Revision (RBB) in 2019-2021 in October-November 2018. Transactions with related parties and large exposures refer to Trainings that Corporate Secretary attended in 2018 are as follow: the Regulation of the Financial Services Authority previously the Regulation of Bank Indonesia (PBI) No. 7/3/PBI/2005 dated January 1) Workshop “In depth POJK No. 51/POJK.03/201851/POJK.03/2018 20, 2005 on Legal Lending Limit, as amended by PBI No. 8/13/ PBI/2006 dated October 5, 2006.
Annual Report 2018 128 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
The following is report regarding lending to related parties and large Financial Statements and report to the Financial Services Authority exposures as of December 31, 2018: previously Bank Indonesia or stakeholders in accordance with the applicable regulations.
Amount CCB Indonesia conducts self-assessment on the implementation No Lending of Good Corporate Governance biannually, such as in June and Debtor Nominal December position, and prepares Good Corporate Governance Report every end of financial year in accordance with the coverage 1. To Related Parties (million Rupiah) 784,366 of applicable provisions.
To Core Debtors CCB Indonesia has submitted the Good Corporate Governance 2. a. Individual 11 3,538,775 Report to Shareholders, Financial Services Authority, and other b. Group 14 2,892,241 respective parties in accordance with the applicable regulations, as well as has uploaded the intended Report into Bank’s website in a The Bank owns the Policy and General Guidelines of Loan, the Policy timely manner. and General Guidelines of the Lending to Related Parties and Large CCB Indonesia discloses its product information in accordance Exposures. Lending to Related Parties shall obtain the approval with provisions of Financial Services Authority and Bank Indonesia of the Board of Commissioners. Besides, in order to improve and concerning Transparency of Product Information and Usage of facilitate the oversight against the lending to related parties, CCB Customer Personal Data. Product information and other services to Indonesia creates and updates a detailed list of related parties communities among others are delivered through some promotional that have a controlling relationship with the Bank, either directly or media such as brochures, leaflet, website, and a bulletin board indirectly, through an ownership, managerial and/or finance. across all office network of CCB Indonesia. Throughout 2018, the implementation of lending to Related Party CCB Indonesia has had a Policy and General Guidelines for and/or Lage Exposure has: Customer Protection and Standard Operating Procedure of Services - fulfilled provisions of Legal Lending Limit (LLL) and cognized and Customer Complaint Settlement. The Bank discloses the both prudent credit policy and applicable laws; procedures for customer complaints and the settlement of dispute to customers in accordance with the provisions of the Financial - Cognized the capability of capitalization and diversification of Services Authority and Bank Indonesia, as well as establishing unit/ lending to related parties portfolio. function of Handling and Settlement of Customer Complaints.
Every received complaint from customers is handled and settled Transparency of financial and non-financial within a period of time in accordance with applicable provisions. conditions of the Bank which have not been Mediation in customer complaints settlement is carried out properly. Reports on customer complaints handling and settlement disclosed in other reports are reported regularly to Financial Services Authority and Bank CCB Indonesia discloses its financial and non-financial conditions Indonesia in every quarter. to stakeholders including to announce The Quarterly Published
NO. DATE NEWSPAPER/MAGAZINE PUBLICATION
1. 10 Jan 18 Pelita SBDK Report on December 31, 2017
2. 11-Jan-18 Media Indonesia Invitation of Extraordinary GMS on February 2, 2018
3. 05-Feb-18 Media Indonesia Ads- Summary of Minutes of the Extraordinary GMS on February 2, 2018
4. 31-Mar-18 Neraca and Media Indonesia Quarterly Publication Report of December 2017
5. 31-Mar-18 Media Indonesia Consolidated Financial Statements of Parent Company in December 2017
6. 09-Apr-18 Pelita SBDK Report on March 31, 2018
7. 23-Apr-18 Media Indonesia Announcement of Annual GMS on May 30, 2018
8. 30-Apr-18 Neraca and Media Indonesia Quarterly Publication Report of March 2018
9. 08-May-18 Media Indonesia Invitation of Extraordinary GMS on May 30, 2018
10. 31-May-18 Media Indonesia Ads- Summary of Minutes of the Extraordinary GMS on May, 30 2018
11. 31-Jul-18 Neraca and Media Indonesia Quarterly Publication Report of June 2018
12. 03-Sep-18 Media Indonesia Announcement of Extraordinary GMS on October 10, 2018
13. 18-Sep-18 Media Indonesia Invitation of Extraordinary GMS on October 10, 2018
14. 11-Oct-18 Media Indonesia Ads- Summary of Minutes of the Extraordinary GMS on October, 10 2018
15. 30-Oct-18 Neraca and Media Indonesia Quarterly Publication Report of September 2018
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 129 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
NO. DATE NEWSPAPER/MAGAZINE PUBLICATION
16. 12-Nov-18 Kontan KCP Bandung Braga Reallocation
17. 30-Nov-18 Media Indonesia Announcement of Extraordinary GMS on Jan 7, 2019
18. 14-Dec-18 Media Indonesia Invitation of Extraordinary GMS on Jan 7, 2019
19. 26-Dec-18 Kontan KCP Menara Batavia Reallocation
Bank’s Strategic Plan broad scope of CCB group, the Bank will develop private banking with products/services such as CCB financial products, wealth In accordance with vision and mission, as well as paying attention management, bancassurance products, trust products and to current business scale, CCB Indonesia in both short and medium others. term is still directing the business activities to the implementation of good corporate governance, improvement in corporate banking • Additional Capital segment, small and medium enterprises (SME) and consumer Additional capital periodically towards BUKU III at the end of banking, improvement in CASA ratio (Current Account & Saving 2019 is required to ensure the adequacy of CAR for business Account), optimization and business depth, IT system development, development, primarily in line with the expansion plan in the stimulating an effective process and efficient cost, as well as corporate banking sector, with a large-scale loan, will surely enhancing professionalism and human capital competency. need capital support. As a public company, this such additional Direction of Bank’s policies is in line with current government capital is performed through the Limited Public Offering/ programs for financing to infrastructure and support to SME rights issue, or also through other mechanisms that comply to development. provisions of the Financial Services Authority.
It is expected that the majority of shareholders, CCB Corporation Bank Policy Directions in Short-term and minority of shareholders can collectively perform their 1. Increase in business volume in the sector of corporate banking, duties to gain new stocks. Paid-up capital from majority of Small and Medium Enterprises, and consumer loans. shareholders, China Construction Bank Corporation (CCB), is implemented after having an approval from the Board of 2. Business optimization and business deepening from existing Directors of CCB and regulators in China. office networks
3. Forward looking E-banking and IT system development to • Implementation of good corporate governance and upgrading support process and effective, fast, accessible services and the risk management system provide convenient. Implementation of good corporate governance in a consistent, 4. Creation of financial performance to be more efficient and to sustainable, comprehensive and integrated manner at all levels generate better margins. and task forces. Development in risk management system is more advanced, supported by three lines of defense. Integrating 5. Comprehensive improvement in quality, professionalism and HR the risk management systems in the Bank with a global risk competence. management system is designed in order to comprehensively identify, scale, monitor and manage risks of the Bank in an Bank Policy Directions in Medium-term enterprise-wide manner.
1. Implementation of the integrated good corporate governance, • Optimization of the existing offices risk management, internal control system and compliance The existing office network, in this case is a post-merger function. network, is optimized in order to drive business growth.
2. Continue the infrastructure completion program (e-banking • Quality Improvement in human capital system, organization and HR) sustainably in order to support the The quality improvement in human capital is conducted by business development improving the training scale programs and more diverse development opportunities, including sending off employees for training abroad. By strengthening the directed and professional Strategic Steps to be taken by the Bank training, it is expected that reliable human capital will be brought out to receive a competitive remuneration. • Acceleration of Business Development CCB Indonesia will seek growth acceleration on business • Strengthening of IT system infrastructure volume. The Bank also plans to extend its business to IT system infrastructure is also developed in order to improve corporate banking sector, with a target supported by corporate service quality for a better level, with an effective, fast and customers in Indonesia either local or other countries, as well accessible service which will increase satisfaction for customers, as infrastructure projects which are in line with the government so that the Bank could be more competitive in providing service. program. This is as in order to utilize the expertise of CCB in terms Business Plan of the Bank for 2019-2021 has been submitted to of infrastructure financing, trade finance and cross-border Financial Services Authority on November 30, 2018, through a letter settlement of RMB currency. CCB Indonesia will constantly No. 428/CCBI/DDIR-OJK/XI/2018. expand SME sector and consumer banking. Subsequent to a
Annual Report 2018 130 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Additional information related to Good Corporate Governance
Throughout 2018, there is no other information such as intervention by owners, internal disputes nor issues that arise as a result of the Bank’s remuneration policy.
Shares Ownership by members of the Board of Commissioners and the Board of Directors which reached 5%
As of December 31, 2018, there is a member of the Board of Commissioners who possesses shares in Other Companies in Indonesia which reached 5% or more, as below following:
Type of No. 40/SEOJK.03.2016 concerning the Application of Good Company Share Corporate Governance for Commercial Banks. No. Name Company Name (Bank/ ownership LKBB/ The intent and purpose of preparing Guideline is to provide a Others) guidance of remuneration in accordance with applicable laws. The Good Corporate Governance Guideline has obtained an approval 25,00% PT. Hakim Sentausa Others from Directors and Board of Commissioners. Yudo 1. Sutanto PT. Trio Indah Review of Good Corporate Governance Guideline is conducted 25,00% Others Sauntasa periodically minimal once (1) in two (2) years or anytime if required in accordance with the Bank’s needs or any changes in external All members of the Board of Commissioners do not have any shares regulations. ownership which reached out to 5% (five percent) or more in other domiciled abroad companies. Coverage of Remuneration Policy and its Implementation
All members of the Board of Directors do not have any shares Bank has started off implementing the Remuneration Policy in ownership which reached out to 5% (five percent) or more, both in 2019 such as covering the Remuneration scale based on level and CCB Indonesia and Other Banks as well as in Other Companies in position, Remuneration Components, and methods as well as the Indonesia or in abroad. mechanism of provisions, as includes but not limited to: • Remuneration related to risks Financial and Family Relationship • Remuneration adjustment related to Performance and Risk • Variable Remuneration In accordance with the Financial Services Authority Regulation and • Position and total parties who are the material risk takers (MRT) Bank Indonesia concerning the implementation of Good Corporate Governance for Commercial Banks, all members of Board of Commissioners, Board of Directors, and Controlling Shareholders External Consultant and Duties of Consultant related to of CCB Indonesia do not have any financial and family relationship Remuneration Policy among other members of Board of Commissioners, Board of In completing the Remuneration Policy, Bank cooperates with Willis Directors, and Controlling Shareholders of CCB Indonesia. Towers Watson Consultant in the scope of work that includes: 1. Current state analysis Information of Remuneration policy 2. Gap Analysis – Understanding the POJK 45/2015 requirements 3. Identification of material risk takers (MRT) Process of preparing the Remuneration policy 4. Evaluation of Position The Bank has owned the Good Corporate Governance Guideline in 5. Pay structure design Remuneration document No. 257/PEDO-CCBI/PPTR/X/2016, which 6. Benefit Report is the last revision in December 2018.
Below among are the background of Guideline preparation: Performance measurement related to Remuneration
1. In line with the Basel II Implementation specifically Pillar 3 The Bank stipulates Remuneration policy related to the work (Market Discipline), the Bank is in charge of disclosing more performance. transparent information to public and market players especially The performance measurement is a quantitative work unit that put related to the Remuneration to support discipline and so that in place through Key Performance Indicator (KPI), which has been respective stakeholders could give an appropriate assessment. standardized.
2. The issuance of Financial Services Authority Regulation No. 45/ KPI is also an indicator that provides information of how far the Work POJK.03/2015 concerning the Application of Good Corporate Unit has successfully achieved the stipulated work targets. Governance for Commercial Banks. Total Directors, Board of Commissioners and Employees of Receiving 3. The issuance of Circular Letter of Financial Services Authority Variable Remuneration throughout a year (one) and total nominals.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 131 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Total received amount within 1 (one) year
Variable Board of Directors Board of Commissioners Employee Remuneration
Person Millions in Rp. Person Millions in Rp. Person Millions in Rp.
Total 5 3,754,045,320 2 128,881,100 1420 9,626,411,516
Total receivers and total amount of Variable Remuneration which A. Fixed Remuneration*) have been guaranteed without any requirements to nomination for Directors, nomination for Board of Commissioners, and/or 1. Cash Null nomination for Employees throughout their first year (one) work 2. Shares/stock-based period: Null. instruments issued by the Null Total amount of deferred Variable Remuneration which contains of Bank cash and/or shares or other shares/stock-based instruments issued B. Variable Remuneration*) by the Bank: Null.
Total amount of deferred Variable Remuneration which has been Not Suspended Suspended paid throughout a year (one): Null. 1. Cash Null Null Total Remuneration given to the material risk takers (MRT) throughout a year (one) 2. Shares/stock-based instruments issued by the Null Null Bank
Total Reduction During Report Period Type of Variable Remaining Suspended Remuneration*) Caused by Explicit Total Caused by Implicit Adjustment (B) Adjustment (A) (A)+(B)
1. Cash (in million Null Null Null Null rupiah)
2. Shares/stock-based instruments issued by the Bank (in shares and in million Null Null Null Null rupiah which is the conversion of the amount of shares)
Null Null Null Null
Annual Report 2018 132 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Remuneration policy package and other facilities for Board of Commissioners and Board of Directors
The Annual General Meeting of Shareholders of CCB Indonesia has decided that authorization is given to Board of Commissioners to determine the amount salary, compensation, and bonus for members of Directors, and authorization for Majority/Main Shareholders to determine the amount salary, compensation, and bonus for members of Board of Commissioners.
Remuneration of Board of Commissioners and Board of Directors
Amount received in 1 year
Type of Remuneration and Other Facilities Board of Commissioners Board of Directors
person Million in Rp person Million in Rp
.1. Remuneration (salary, bonus, routine allowances, tantiem, and 2 1,855,011,856 6 17,467,401,509 other non-natura facilities)
2. Other facilities in the form of natura (housing, transportation, health insurance, etc.) which: - - - - a. to possess b. not able to possess
TOTAL 2 1,855,011,856 6 17,467,401,509
Remuneration per person in 1 (one) year Data of highest and lowest salary ratio as of 31 December 2018
Remuneration per person in Number of a.Highest and lowest employee salary ratio 1 : 77 Number of Directors one year Commissioners b.Highest and lowest Board of Directors salary 1 : 2.1 Above Rp 2 billion 3 - ratio
Above Rp 1 billion up to c.Highest and lowest Board of Commissioners 2 1 1 : 2 Rp 2 billion salary ratio
ABove Rp 500 million up tp 1 1 d.Highest Board of Directors and highest em- Rp 1 billion 1 : 2.9 ployee salary ratio
Below Rp 500 million - -
Remuneration of Remuneration Committee Severance package
Remunerasi Number of employees affected by termination of employment and Remuneration paid for members of Committee Remuneration total nominal severance paid: throughout 1 (one) year is Rp 1,516,673,436,-
Total nominal of severance paid for one person in 1 Highest and Lowest Salary Ratio Number of employee (one) year Salary is an employee right received and stated in the form of Above Rp1 billion - monetary cash as payment by the Company or employer to employees
based on determination of work agreement, arrangement, or laws Above Rp500 million up to Rp1 billion - and regulations, including allowances for employees along with their families on any rendered job and/or services. Below Rp500 million 10
Salary which is comparable in salary ratio is the compensation received by members of the Board of Commissioners, the Board of Directors and permanent employees of the Bank up to the extent of executive, per month.
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 133 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Share Option
All members of the Board of Commissioners, Board of Directors and Executive Officers do not have any share option, because the Bank does not launch any share option.
Total option Number share owned Option Price Description/Name Time Period (shares) Received Executed (Rp) (Shares) (Shares)
Board of (name) Null Null Null Null Null Commissioners
Board of Directors (name) Null Null Null Null Null
Executive Officers (total) Null Null Null Null Null
Total Null Null Null Null Null
Internal Fraud
Internal fraud is defined as irregularities or fraud committed by of the Bank if the deviation is more than Rp100,000,000.00 (one- management, permanent and temporary employees (honorarium hundred-million rupiah). and outsourcing) related to work processes and operational In the period of January until December 2018, there is an internal activities of the Company that affect a significant financial condition fraud in operational activities of CCB Indonesia, as below following:
Number of cases done by:
Member of Board of Commission- Internal Fraud dalam 1 tahun Permanent Employees Temporary Employees ers and Board of Directors
2017 2018 2017 2018 2017 2018
Total Fraud Nihil Nihil 3 4 Nihil Nihil
Resolved - - 3 3 - -
Internal Bank Investigation process - - - 1 - -
Settlement not sought ------
Followed up with legal process ------
Legal Cases and Resolution Efforts
Throughout 2018, total legal proceeding of civil and criminal cases faced by CCB Indonesia and the efforts made to carry out the settlement are described as follows:
Number of Cases Legal Proceedings Civil Criminal
Resolved with legal force 5 1
In the process of settlement 10 2
Total 15 3
Annual Report 2018 134 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
From above-mentioned number of cases, following is the (Defendant 6), 7. Alford Capital Limited (CoDefendant 1), 8. explanation for each case: Fireworks Ventures Limited (Co-Defendant 2), 9. Government 1. PT Griya Wijaya Prestige (PT Griya Prestige Against of Indonesia cq Minister of Finance cq kP2LN Jakarta (Co- Syndicated Bank) Defendant 3) to Central Jakarta District Court with register - Civil Case. No. 26/PDT.g/2013/PN.JkT.PST and has been enforced by - CCB Indonesia (formerly Bank Windu previously Bank Multicor) Central Jakarta District Court on October 8, 2013 in which the is previously part of Syndicated Creditor. content of decision covers: - Bank Multicor was former Defendant’s Execution (Original • Partially granting the statement of claim, Defendant). • Stating that Defendant 1, 2, 3, 4 and 5 have defaulted the - Syndicated creditor was accused of performing unlawful contract towards Litigant actions against PT Geria Wijaya Prestige and has been given • Giving sanction to Defendant 1, 2, 3, 4, and 5 by joint a decision by court, which that decision was legally binding responsibility for an indemnity covering Principal Debt, but the execution has not been conducted/fulfilled by CCB Interest and Sanction amounted at SSD 20,389,661.25. Indonesia. • Stating that Deed of Extension of Credit No. 9, dated - Syndicated creditor was required to pay an indemnity to 28 November 1995 which was drawn up before Notary PT Geria Wijaya Prestige at Rp20,000,000,000 in which the Hendra Karyadi SH in Jakarta is abrogated as relating to portion of CCB Indonesia amounted to Rp2,352,000,000. That the appointment of Facility Agent and Guarantee Agent. indemnity has been reserved by CCB Indonesia but has not • The Litigant can collect and perform legal actions without yet sent. any mediators of Facility Agent and Guarantee Agent. - Collection Right of CCB Indonesia to PT Geria Wijaya Prestige - On October 21, 2013, Harijanto Karjadi CS filed an appeal based has been taken over to Tomy Winata dated 12 February 2018 on Letter of Notification and Appeal Memorandum Cession No. and by Tomy Winata through his Attorney at Law Desrizal, 26/PDT.G/2013/PN.JKT.PST Jo. No. 164/Srt.Pdt.Bdg/2013/ S.H. and Walfrid Hot Patar Simanjuntak, S.H. the purchase of PN.JKT.PST on Central Jakarta District Court Regulation receivables has been informed to PT Geria Wijaya Prestige between Gaston Investment Limited against Harijanto Karjadi dated 26 February 2018, so that by having that Collection CS. Right taken over, CCB Indonesia has no longer any Collection - CCB Indonesia filed a counter of appeal memorandum against Right to PT Geria Wijaya Prestige, nevertheless CCB Indonesia the appeal case at high court on Central Jakarta District Court requires to perform its responsibilities as been given a Regulation No.26/PDT.G/2013/PN.JKT.PST dated 8 October decision by court to pay an indemnity in accordance with its 2013. portion if there lies any requests of responsible fulfillment - High Court has received, investigated and adjudicated delivered to PT Geria Wijaya Prestige primarily if the execution cases of both appeal memorandum and a counter of appeal is an order from district court memorandum which have been filed/submitted by litigants - The case was legally binding. on October 13, 2014 at the Jakarta High Court, terminated those cases as set forth in the Decision No. 502/PDT/2014/ PT.DKI, in which the content of decision covers: 2. Gaston Investments Limited (Gaston Investment Limited • Accepting the petition of Appeal from the Appellant Against Harijanto Karjadi CS) original Defendant I, III, IV and V. - Civil Case. • Strengthening Central Jakarta District Court Regulation - CCB Indonesia (previously Bank windu) as the Judicial Review No. 26/PDT.G/2013/PN.JKT.PST dated 8 October 2013 Applicant, previously Appeal Defendant III/Appellee III/ that been applied for that appeal. original Defendant VI • Punishing the Appellant original Defendant I, III, IV and - PT Bank Arta Niaga kencana is part of Syndicated Creditor V to pay for civil case at court level and for appeal at members with total commitment amounted to USD 2,000,000 Rp150,000. that has merged into PT Bank Commonwealth based on Deed - High Court Regulation was known due to the existence of dated 16 November 2007 No. 90 and Deed dated 6 December Submission Letter of Appeal Memorandum No. 145/Srt.Pdt. 2007 No.23, in which both of them were drawn up before Kas/2014/PN.Jkt.Pst jo. No. 26/PDT.G2013/PN.JKT.PST Notary Sutjipto, SH., M.Kn in Jakarta. The sold receivables of dated 25 January 2015 (Letter of Appeal from PT Griya Wijaya PT Commonwealth to PT Moneta Capital based on Deed of Prestige). Sale No. 7 and Deed of Cessie (Submission of Collection Right) - CCB Indonesia appointed Yudha P.Utama, SH., MH, as the No 8 both dated 13 September 2011 were drawn up before attorney of law based on Power of Attorney No. 010/SK-HK/ Notary Muhamat Hatta, SH.. Then, that Cessie was sold by III/15 dated 9 March 2015 prepared under hand to represent PT Moneta Capital to Alford Capital Limited based on Deed interests of CCV Indonesia filing that Counter Appeal of Sale and Purchase No.9 and Deed of Cessie (Submission Memorandum. of Collection Right) No.10, both dated 12 January 12 2012 - CCB Indonesia through its attorney of law ceded the Counter were drawn up before Notary Muhamat Hatta, SH. in which Appeal Memorandum on March 13, 2015. that Cessie was then sold by PT Alford Capital Limited to - On May 30, 2016, Yudha P. Utama, SH., MH, notified CCB Gaston Investment Limited based on Deed of Receivable Indonesia that on April 15, 2016, the South Jakarta District Sale and Purchase No.13 and Deed of Cessie (Submission Court has delivered a Notification Letter of Supreme Court of Collection Right) No.14, both dated 9 October 2012 were of the Republic of Indonesia’s Decision to him on a case No. drawn up before Notary Muhamat Hatta, SH. On January 21, 1116k/PDT/2015 Jo. 26/PDT.G/2013/PN.JKT.PST between 2013, Gaston Investment Limited (Litigant) filed a lawsuit of PT Geria Wijaya Prestige CS as the Appeal Applicant against breach of contract (in Default) against 1. Harijanto karjadi Gaston Investment Limited as Appeal Respondent. This case (Defendant 1), 2. Hermanto Karjadi (Defendant 2), 3. Hartono was terminated on October 7, 2015, in which the content of Karjadi (Defendant 3), 4. PT Sakautama Dewata (Defendant decision covers: 4), 5. PT Geria Wijaya Prestige (Defendant 5), 6. CCB Indonesia 1. Rejecting the Appeal request from Appeal Applicant I PT
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 135 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Geria Wijaya Prestige, Appeal Applicant II; 1. Harijanto Additional Judicial Review into Supreme Court through Karjadi, 2. Hartono Karjadi, 3. PT Sakautama Dewata; Central Jakarta District Court upon the Cassation Decision 2. Punishing the Cassation I and II/Defendant I, III, IV, V to pay for No. 1116K/PDT/2015 dated 7 October 2015 in conjunction civil case at court level amounted to Rp500,000. with Jakarta High Court Regulation No. 502/PDT/2014/ - That court decision was legally binding. PT.DKI dated 13 October 2014 in conjunction with the - On September 2, 2016, PT Geria Wijaya Prestige filed a Central Jakarta District Court Regulation No. 26/PN.JKT. Judicial Review Memorandum into Supreme Court through PST dated 8 October 2013 as of the Summons Notification Central Jakarta District Court upon the Cassation Decision of Additional Memorandum Submission PK No.32/Srt.Pdt. No.1116K/PDT/2015 dated 7 October 2015 in conjunction PK/2016/PN.Jkt.Pst. Jo. No. 26/Pdt.G/2013/PN.Jkt.Pst with the Jakarta High Court No. 26/PN.JKT.PST dated which was delivered by M Taufik, Bailiff Substitute at East 8 October 2013 as the Letter of Notification and Judicial Jakarta District Court. Review Statement No.20/Srt.Pdt.PK/2016/PN.Jkt.Pst. Jo. - CCB Indonesia did not file Additional Counter Appeal No. 26/Pdt.G/2013/PN.Jkt.Pst and Letter of Notification Memorandum since all interests and positions of Bank and Judicial Review Memorandum Application No. 20/Srt. CCBI has been listed in the Counter Memorandum Judicial Pdt.PK/2016/PN.Jkt.Pst. Jo. No. 26/Pdt.G/2013/PN.Jkt. Review. Pst, both dated 13 October 2016 which have been delivered - Up until the end of December 2018, the Judicial Review by Adra. D. SH. Bailiff Substitute at South Jakarta District was still in progress awaiting the official verdict from Court. Supreme Court and awaiting the execution from Central - On November 11, 2016, CCB Indonesia through its Jakarta District Court upon the above-mentioned Attorney Anggiat Panggabean, SH, Advocate and Curator/ Cassation Decision since the related parties have not yet Management at the Law Firm Anggiat Panggabean executed the decision upon being reprimanded by Central & Partners has ceded the Counter Judicial Review Jakarta District Court and the Creditors have not agreed Memorandum on Civil Case No.26/PDT.G/BTH/PLW/2013/ on the settlement of PT Geria Wijaya Prestige debt to the PN.JKT.PST Jo. No. 502/PDT/2014/PT.DKI Jo. No. 116K/ Creditors. PDT/2015 into Supreme Court through Central Jakarta - The case was legally binding. District Court. - On November 22, 2016, Fireworks Ventures Limited filed 3. PT Griya Wijaya Prestige (Pt Griya Prestige Against Pt Bank Judicial Review Memorandum into Supreme Court through Agris). Central Jakarta District Court upon the Cassation decision - Civil case No. 1116K/PDT/2015 dated 7 October 2015 in conjunction - CCB Indonesia (formerly Bank Windu) as Co-Respondent with the Jakarta High Court Appeal Regulation No. 502/ Judicial Review II/Co-Respondent Judicial Review I/Co- PDT/2014/PT.DKI dated 13 October 2014 in conjunction Respondent Appeal I/Co-Appellee I/Original Co-Defendant with the Central Jakarta District Court Regulation No. 26/ I (For Judicial Review). PN.JKT.PST dated 8 October 2013 as of the Summons - CCB Indonesia as Resistant I (For Resistance carried out by Notification of Judicial Review Application No. 32/Srt. PT Griya Wijaya Prestige upon execution requested by PT Pdt.PK/2016/PN.Jkt.Pst. Jo. No. 26/Pdt.G/2013/PN.Jkt. Bank Agris) Pst and Summons Notification and Judicial Review - PT Bank Agris has submitted a lawsuit to PT Griya Wijaya Memorandum Application No. 32/Srt.Pdt.PK/2016/ PN.Jkt. Prestige upon default basis. In that cassation decision, Pst. Jo. No. 26/Pdt.G/2013/PN.Jkt.Pst, and Summons Supreme Court has received a lawsuit of PT Bank Agris, in Notification of Additional Judicial Review No. 20/Srt. which the content of decision covers: Pdt.PK/2016/PN.Jkt.Pst. Jo. No. 26/Pdt.G/2013/PN.Jkt. • PT Griya Wijaya Prestige must pay all liabilities amounting Pst thrice of them dated 15 December 2016 which were to USD20,389,661.26 delivered by M Taufik, Bailiff Substitute at East Jakarta • Co-Defendants must be punished to submit and obey District Court. this decision. - On December 20, 2016 and January 10, 2017, Chief of - The execution of Supreme Court Regulation will be Central Jakarta District Court has reprimanded parties carried out by conducting an auction however since the to execute the decision and suggested that the case is requirement of formal auction was not fulfilled thus that settled among parties at stake. auction was considered to be abrogated. - CCB Indonesia has submitted Judicial Review Counter - Resistance by PT Griya Wijaya Prestige which was registered Memorandum on Judicial Review Memorandum submitted in Denpasar District Court No. 371/PDT.PLW/2014/PN.DPS by Fireworks Ventures Limited dated 12 January 2017 into dated 5 June 2014 was revoked on November 24, 2014. the Supreme Court through Central Jakarta District Court. - Judicial Review examination has been completed by - On March 31, 2017 PT Geria Wijaya Prestige filed the Supreme Court and terminated as stipulated in Decision Additional Judicial Review Memorandum into Supreme No. 232PK/Pdt/2014 dated 17 September 2014, in which the Court through Central Jakarta District Court upon the content of decision covers: Cassation Decision No. 1116K/PDT/2015 dated 7 October • Rejecting judicial review application from the judicial 2015 in conjunction with the Jakarta High Court Appeal review applicant of PT Geria Wijaya Prestige; Regulation No. 502/PDT/2014/PT.DKI dated 13 October • Punishing the Judicial Review Applicant Original Appeal 2014 in conjunction with Jakarta High Court Regulation No. Respondent/Defendant/Appellant to pay court costs in 26/PN.JKT.PST dated 8 October 2013 as of the Summons judicial review’s examination of Rp2,500,000. Notification of Additional Memorandum Submission PK No. - Notice of Content Decision in Judicial Review was received 20/Srt.Pdt.PK/2016/PN.Jkt.Pst. Jo. No. 26/Pdt.G/2013/ on April 6, 2015. PN.Jkt.Pst dated 8 May 2017 which was delivered by M - Upon Judicial Review Regulation No. 232PK/Pdt/2014 Taufik, Bailiff Substitute at East Jakarta District Court. dated 17 September 2014, PT Geria Wijaya Prestige filed the - On April 12, 2017 Fireworks Ventures Limited filed an Judicial Review-II Application and was registered in Central
Annual Report 2018 136 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Jakarta District Court No. 11/Srt.Pdt.PK/2015 Jo. No. 27/ • After several mediation, then on April 15, 2013 the Pdt.G/2011/PN.Jkt.Pusat as upon the Letter of Notification AGREEMENT between the Plaintiff and the Defendant has and Submission of Judicial Review Memorandum No.11/Srt. been completed, with following details: Pdt.PK/2015 Jo. No. 27/Pdt.G/2011/PN.Jkt.Pusat dated 8 1. Defendant (CCB Indonesia) agreed to sell July 2015. collateral to the Plaintiff (Waruju Eddy Nugroho) of - CCB Indonesia has authorized Yudha P. Utama, SH., MH, Rp2,000,000,000. as upon a Power of Attorney No. 044/SK-HK/VII/15 dated 2. Time period of payment was 5 (five) months after the 31 July 2015 prepared by hand to file a Judicial Review-II stipulation of date decision by the Bandung District Counter Memorandum in order to protect legal interests of Court CCB Indonesia. 3. Plaintiff had to pay waiting compensation for 5 - CCB Indonesia through its Attorney of Law, Yudha P. Utama, months of Rp100,000,000. SH, MH has filed Judicial Review-II Counter Memorandum 4. If the Plaintiff could not pay it off until the agreed Co-Respondent Judicial Review-II. date, the deal would be abrogated and Plaintiff had - Based on the received data from Directorial Decree of the to clear out that designated area/collateral. Supreme Court of Republic of Indonesia, Supreme Court has - Up until the end of December 2018, 2 (two) collateral have terminated as upon Decision No.531PK/Pdt/2015 dated 21 not been cleared out by CV REAL and CCB Indonesia was March 2016 as below following: carrying out the transfer of title process upon that above- • Rejecting judicial review application from the judicial mentioned collateral submission. review applicant-II of PT Geria Wijaya Prestige; - The case was legally binding. • Punishing the Judicial Review Applicant-II/Judicial Review Applicant-I/Appeal Respondent/Defendant/ 5. Ario Wibowo Budimulia Appellant to pay court costs in judicial review’s - Criminal Case. examination of Rp2,500,000. - CCB Indonesia (formerly Bank Windu) as witness. - Up until the end of December 2018, the official decision upon - This case was originated from filing of remittances by Mr. No. 531PK/Pdt/2015 was still in progress. Ario Wibowo Budimulia to overseas amounted to USD9,000 - The case was legally binding. to Chemline Products Asia PTE LTD No. Account Number GB43HLFX11083400837554 to Halifax Bank PLC (UOB 4. CV Real (Case No.05/Pdt.g/2013/Pn.bdg) USD), Bank Code HLFXGB21P15 through CCB Indonesia - Civil Case. Branch Office Boulevard Surabaya; - CCB Indonesia (formerly Bank Windu) as Defendant. - Based on that application, Branch Office officers of Boulevard - Loans are granted and the credit agreement was carried Surabaya forwarded the application to Head Office, because out on December 23, 2009, total loans amounted to of sending money overseas in CCB Indonesia had to be Rp1,750,000,000. carried out in Head Office. - During its development, around April 2010 debtors - Since the submitted application has met the requirement, experienced difficulties in fulfilling their obligations. officials at head office carried out the remittances through - In November 2010, loan settlement (loss) was performed Citi Direct Online to the account number, customer name, by submitting voluntarily the collateral to CCB Indonesia bank code and bank name corresponding with which was (formely Bank Windu) and the debtor signed off the SPA, the written by Mr. Ario Wibowo Budimulia on the Remittance Authorization to Sell and Discharging Deed, such submitted Application Form and the delivery was successful but Mr. Collateral submitted are: Ario Wibowo Budimulia stated that his beneficiary had not 1. L/B located at Bakung Indah No. 17 district, Buah Batu received that amount. Margasari Bandung; - On July 1, 2013 Ario Wibowo Budimulia requested to correct 2. L/B located at Cluster Buah Batu Regency C1-15 the remittance that had been carried out dated 24 June Bandung; 2013 into Chemline Products Asia PTE LTD Account Number 3. L/B located at Cluster Griya Asri I Bilik H-2B Bandung 124-900-066-9 to Bank United Overseas Bank Ltd, Bank - That collateral submission was made by debtors in the hope Code UOVBSGSG. that debtor could still buy back. - On July 11, 2013 Ario Wibowo Budimulia conveyed that his - Below following was the value of proposed repurchase: beneficiary had not received the amount and requested • Collateral No.1 was Rp350,000,000 meanwhile offer from that USD9,000 to be returned and this case had also buyer was Rp280,000,000. been informed to Bank’s Oversight Department-2 and • Collateral No. 2 was Rp750,000,000 meanwhile offer Investigation Department of Banking and Consumer from buyer was Rp600,000,000. Protection. There was no agreement happened. - CCB Indonesia has explained the remittance process - On January 7, 2013 debtor Waruju Eddy Nugroho as however Ario Wibowo Budimulia did not/yet accept the President Director of CV REAL filed a lawsuit to Bandung explanation conveyed by CCB Indonesia. District Court (Case No. 05/Pdt.G/2013/PN.Bdg) and the - This remittance case applied by Ario Wibowo Budimulia to defendant was CCB Indonesia, in which the lawsuit was CCB Indonesia did not/yet resolve well through a mediation about the redemption value: with FSA and explanation conveyed by CCB Indonesia so • Collateral No. 1 was Rp280,000,000 that Ario Wibowo Budimulia subpoenaed CCB Indonesia • Collateral No. 2 was Rp600,000,000 which among contents were related to the refund request • Collateral No. 3 was Rp880,000,000 of USD9,000. - Case development: - Because of the unsatisfying responses from the delivered • Bandung District Court convened a mediation between subpoena, Ario Wibowo Budimulia brought this case to the Plaintiff (Waruju Eddy Nugroho) and the Defendant criminal law by reporting to the Indonesian National Police (CCB Indonesia).
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 137 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Resort East Java, Surabaya; conducted the act of money laundering as RM PT CIMB - This case is currently being handled by Indonesian National Niaga from the private customer of Wolly Jonathan Police Resort East Java Surabaya at the stage of collecting/ without any knowledge and approval from the account requesting particular information related to remittances to holder and has transferred the customer’s fund for Umar overseas applied by Ario Wibowo Budimulia to CCB Indonesia Ali Yanto SH’s personal uses. by requesting information from CCB Indonesia employees • Sending off letter as upon summons No. S.Pgl/049/ related to remittances to overseas. XII/2012/Dit Tipideksus, dated 17/12/12, concerning a - This complaint case of Ario Wibowo Budimulia is currently subpoena as witness of Mr. Anton as Branch Manager waiting for further development from Indonesian National of Bank Windy Capem Mangga Dua in a case of banking Police Resort East Java Surabaya. criminal offence and money laundering with the suspect - This case is under police inspection, not yet legally binding. Umar Ali Yanto in Bank Windu Capem Mangga Dua. • Receiving documents as upon the Receipt No. STP/89/ 6. Umar Ali Yanto, Sh III/2013/Dit Tipideksus Mabes Polri dated 13 March 2013, - Criminal case. concerning the submission of evidence in the form of - CCB Indonesia (formerly Bank Windu) as witness. loan document photocopies and collateral on behalf of - CCB Indonesia (formerly Bank Winotaryndu) on May 6, Umar Ali Yanto from Bank Windu to investigators of Mabes 2010 has granted a loan facility to Umar Ali Yanto, SH Polri. of Rp10,000,000,000 as stipulated in Credit Agreement • Receiving the building handover as upon the Receipt with Collateral No.68 which was drawn up before Notary No. STP/90/III/2013/Dit Tipideksus Mabes Polri dated 13 Muhammad Kholid Artha in Jakarta along with the changes. March 2013, concerning the collateral submission such - To ensure that loan facility, followings were the collateral as 1 (one) Building/Boarding House in komplek AURI jalan that have been handed until all loans were paid off by a Antonov NCCB Indonesia. B. 63 Kelurahan Margahayu collateral submission: Bekasi (SHM No. 2020 a.n. Umar Ali Yanto) 1. L/B Proprietary No. 4513/Harjamukti located at • Sending off Summons No. S.Pgl/563/V/2013/Dit Perumahan Bukit Raflesia Blok C-6 Number 11 has been Tipideksus. charged with Mortgage Rank I as upon the Mortgage - On September 10, 2015, South Jakarta District Court has Certificate No.24899 dated 5 July 2010; examined, decided and convicted Umar Ali Yanto No. 1047/ 2. L/B Proprietary No.5010/Jagakarsa located at Jalan Pid.B/2014/PN.Jkt.Sel as being discovered in January 2017. Kebembem Raya No. 29, South Jakarta has been charged - CCB Indonesia through its Attorney Anggiat Panggabean with Mortgage Rank I as upon the Mortgage Certificate SH, has requested time to Public Prosecutor as executor No. 1692/2011 dated 29 March 2011; upon the decision decided by panel of judges related 3. L/B Proprietary No.2020/Margahayu located at Komplek to the return SHM photocopies No. 4513/Harjamukti, TNI AU, Jalan Antonov No. 3, RT.02, RW. 013, Bekasi has Proprietary No. 5010/Jagakarsa, and Proprietary No. 2020/ been charged with Mortgage Rank I as upon the Mortgage Margahayu to Bank CIMB Niaga Tbk to be conducted in a Certificate No. 1675/2011 dated 24 February 2011; meeting however the executed Prosecutor had moved out, 4. L/B Mill located at Komplek Jababeka, Jalan Jababeka I based on his legal opinion, the SHM No. 4513/Harjamukti, 5/RT. 007, RW. 02 Cikarang, Kabupaten Bekasi. Proprietary No. 4514/Harjamukti, Proprietary No. 5010/ - On July 2011, Umar Ali Yanto, SH was reported to POLDA Jagakarsa could be processed in a transfer of title into METRO JAYA by Helen Sujanto through the Police Report CCB Indonesia meanwhile for land and building as upon No. LP/2515/VII/2011/PMJ/Dit Reskrimsus dated 21 July the Proprietary No. 2020/Margahayu should be carried out 2011 under Effendi Sinaga as the Rapporteur. for any legal efforts due to the building had been ceded to - On November 8, 2011, Umar Ali Yanto, SH submitted collateral Bank CIMB Niaga and the original certificate was currently of Proprietary No.4513/Harjamukti, Proprietary No. 4514/ in CCB Indonesia, however, on July 23, 2018, the meeting Harjamukti, Proprietary No.5010/Jagakarsa and Proprietary with Bank CIMB Niaga was conducted in order to discuss No.2020/Margahayu to pay off loans in Bank Windu, ever the probability of asset selling process collectively using a since that date all proprietaries were belong to the assets of method of giving rights for Bank CIMB on building selling Bank CCB Indonesia. meanwhile CCB Indonesia on land selling and based on that - In 2012, South Jakarta District Court examined and method, the process was in current approval submission to adjudicated the case of Umar Ali Yanto, SH and fined the each Management and by the end of December 2018, the related party with 5 year of jail, that decision was not related process was in current approval submission to management to any aspects of Money Laundering criminal act and the of CCB Indonesia concerning the collective sales on those related party is currently undergoing the conviction at assets. On behalf of the above-mentioned three SHM, they Cipinang Penitentiary Institution in East Jakarta. would be title transferred on behalf of CCB Indonesia and - In October 2012, Umar Ali Yanto, SH was reported again to the decrease of rights of three SHM as the above-explained Bareskrim Mabes POLRI by two customers of Bank CIMB have been completed so that SHM No. 4513/Harjamukti Niaga named Wolly Jonathan and Rosita on the allegation has changed into Building Rights Certificate No. 4657/ of embezzlement of funds with a total of Rp. 15,6 billion and Harjamukti, Proprietary No. 4514/Harjamukti has changed based on that matter, police has requested and/or acted on into Building Right Certificate No. 4656/Harjamukti, Bank Windu as below following: Proprietary No. 5010/Jagakarsa has changed into Building • Sending off letter as upon the letter from Bareskrim Polri Right Certificate No. 893/Jagakarsa dan the Deed of Sale No. R/455/XI/2012/Dit Tipideksus dated 28 November & Purchase has been signed off and has been in a title- 2012, concerning an account blocking of Umar Ali transfer process to CCB Indonesia at Land Office where that Yanto (suspect) Account Number 005.10.01666 and land is located. 005.22.00030, that the suspect Umar Ali Yanto has - This case has been terminated by South Jakarta District Court (based on that decision, this case has been a permanent legal force and has been fully executed)
Annual Report 2018 138 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
7. Firework Ventures Limited - Based on Police Report No. LP/948/IX/2016/Bareskrim - Criminal Case dated 21 September 2016 with the applicant Edy Nusantara - CCB Indonesia (formerly Bank Windu) as witness. (Attorney of Fireworks Ventures Limited), Criminal - On November 28, 1995, PT Geria Wijaya Prestige (Debtor) Investigation Agency of General Crime Offence has called secured collateral through a syndicated loan of USD. off officials of Bank Windu to listen to their explanation as 17,000,000 from Syndicated Creditors consisting of PDFCI witness in an allegation of 3 (three) embezzlements of SHGB Bank (currently Bank Danamon), Bank Rama, Bank Darmala, No. 204, 205 and 206 Hotel Kuta Paradiso Bali which are Bank Finconesia (currently Bank Agris), Bank Arta Niaga currently owned by PT Bank Windu Kentjana Internasional Kencana (current Bank Commonwealth), Bank Multicor Tbk as intended in Article 372 KUHP on the allegation by the (current CCB Indonesia previously Bank Windu) and Bank Reported Priska M. Cahya and Tohir Susanto. Indovest (currently KPK2LN). Facility Agent was Bank PDFCI - The allegation case of embezzlements of those three in accordance with the Deed of Extension of Credit No. 8 certificates were reported by media spreading over and No. 9 dated 28 November 2015. To date, Debtors have imbalance news thus became detrimental to CCB Indonesia not yet completed debt payment obligations to Syndicated and based on that case, CCB Indonesia has provided Creditors. responses and explanation on that case. - In 1999, the operational of Bank PDFCI, Bank Rama and - Ownership of those certifications was secured by Bank Bank Darmala in 2000 were shut down and were taken over Windu, as the Bank replaced the position of Bank Danamon by BPPN thus all completions of rights and obligations of as Facility Agent and Guarantee Agent. those three banks were belong to BPPN’s responsibilities, - The allegation case of embezzlements of those three including receivables to Debtors. During the process, certificates were again reported in mass media; Bisnis receivables to debtors were cessied by BPPN to Millenium Indonesia through newspaper dated 28 October 2017, the Atlantic Securities (MAS), which were subsequently resold Rapporteur utilized mass media to force investigators to by MAS to Fireworks on January 17, 2005. confiscate those certificates and based on that reporting, - In 1999, Bank PDFCI merged with Bank Danamon for BTO CCB Indonesia has coordinated with FSA and determined restructuration, thus Facility Agent and Guarantee Agent required steps on that reporting. were shifted to Danamon - On March 15, 2015, Bareskrim Polri conducted rummage for - In 2007, Bank Danamon decided to handover the Facility building or areas located in CCB Indonesia address, at Jalan Agent and Guarantee Agent to Bank Multicor, after not Jenderal Sudirman SCBD Kavling 52-53, South Jakarta securing any approval from Majority of Creditors to appoint in order to conduct search and find out evidence such as the new Facility Agent and Guarantee Agent. SHGB No.204, 205 dan 207 named PT Geria Wijaya Prestige - Bank Commonwealth sold its claim rights to Moneta Capital, and following was the implementation of rummages: which then they were resold to Alford Capital in January • Around 15.00 WIB, the Investigator team came over the 2012, then were resold to Gaston Investment Ltd (GASTON) meeting room at ground floor of Main Meeting room in October 2012. and met the Director of Compliance (Mrs. Dewi Arimbi - On January 21, 2013, Gaston filed a lawsuit to shareholders Kurniawati) along with her team. and debtors and through the decision dated 13 October • Investigator team then appointed the letter of inquiry on 2013, the Court won over the Gaston lawsuit to Debtors, rummage towards 3 (three) certificates which would be such as: confiscated by investigator. • Fining shareholders and debtors to pay off principal debt, • Director of Compliance came over that meeting room interest and sanction of USD20,389,661.25. and shown 3 (three) original certificates such as 2 (two) • Declaring a Deed No.9 dated 28 November 1995 certificates of mortgages which had been captured concerning Among Lender Agreement to be abrogated by investigator and those 3 (three) certificates were throughout the appointment of Facility Agent and requested by Director of Compliance to be retaken and Guarantee Agent. re-kept of those 2 (two) original certificates of mortgages. • Declaring confiscation guarantee has been put off based • CCB Indonesia through Director of Compliance did not on provision of confiscation. handover those 3 (three) original certificated on grounds - On October 7, 2015, Supreme Court declared that Gaston that the Investigator team has had only secured a permit won over the cassation, with such decrees: position of Bank of rummage and has not secured any confiscation permit Windu as Guarantee Agent and Facility Agent had no legal from Chief of South Jakarta District Court. basis and considered to be abrogated of Deed No.9 dated - During the rummage by Criminal Investigation Agency 25 November 1995 throughout the appointment of Facility (Bareskrim) Polri, mass media attended the event and Agent and Guarantee Agent. published reportings that were not in line with the actual - In June 2016, Bank Windu filed a permit determination conditions. request to appoint Facility Agent and Guarantee Agent for - The rummage conducted by Bareskrim Polri has also been the credit completion of Debtors which was then rejected by conveyed by CCB Indonesia to FSA. the South Jakarta District Court in August 2016. - Up until the end of December 2018, this case was still in - In November 2016, Fireworks filed a Judicial Review on the progress based on the Police Report No.LP/948/IX/2016/ Decree of Supreme Court Cassation dated 7 October 2015. Bareskrim dated 21 September 2016. - Based on Supreme Court decision, Central Jakarta District Court issued a Summons to related party, towards applicant 8. Peter Halim (CASE No.290/PDT.G/2017/PN.Bdg) such as Gaston and among other parties were GWP, - Civil Case. Fireworks, KP2NL Jakarta IV (former Bank Indovest) and - CCB Indonesia (formerly Bank Windu) as Defendant II. Bank Windu on December 20, 2016 and January 10, 2017 - CCB Indonesia has issued a loan to San Antonio Sendjaja on and all parties were advised to resolve within among parties May 17, 2016 amounted to Rp3,900,000,000. however no agreement has been conducted up until now.
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- To guarantee the credit refund issued by CCB Indonesia, • In Case Principal San Antonio Sendjaja provided assets such as: Mortgage - Granting reconvention claims for partial; Certificate (SHT) No. 26/Desa Margahayu, SHT No. 31/ - Declaring Defendant-In-Reconvention has performed a Desa Margahayu, SHT No. 32/Desa Margahayu, SHT No. breach of contract or in default; 807/Desa Margahayu and SHT No. 808/Desa Margahayu - Convicting Defendant-In-Reconvention to empty and which have been given Mortgage Rank I in accordance with leave out the land and building owned by Defendant-In- the Mortgage Certificate No. 07049/2016 dated 18 August Reconvention located at Jalan Taman Holis Indah D2 No. 2016 Jo. APHT No. 81/2016 dated 2 August 2016 based on 37-38, Bandung, as well as the land and building located at Power of Attorney to Charge a Security Interest (SKMHT) No. Jalan Sadang No. 69 Margahayu, Bandung; 56/2016 dated 17 May 2016 which were drawn up before the - Rejecting rests of the claims Notary Effy Mariana Kosasih, SH, PPAT for Bandung Regency. • BETWEEN CONVENTION AND RECONVENTION - Prior tying such collateral, purchase and sell on several Convicting to Plaintiff-In-Convention/Defendant- objects were carried out such as: Certificate of Title (SHM) In-Reconvention to pay off court costs amounted to No. 26/Desa Margahayu, SHM No. 31/Desa Margahayu, SHM Rp2,896,000 (two million eight hundred ninety six No. 32/Desa Margahayu, SHM No. 807/Desa Margahayu and thousand rupiah). SHM No. 808/Desa Margahayu based on every Deed of Sale - Comparator/Original Plaintiff filed an appeal to Chief of West and Purchase (AJB) No. 51/2016, No. 52/2016, No. 53/2016, Java High Court through Bandung District Court and ceded No. 54/2016 and No. 55/2016, all were collectively dated 17 the Appeal Memorandum which was received by Bandung May 2016 drawn up before the Notary Effy Mariana Kosasih, District Court dated 2 May 2018. SH, PPAT for Bandung Regency. - Dated 24 October 2018, Summons Notification of West - Prior signing off the Deed of Sale and Purchase on 17 May Java High Court No. 290/PDT/G/2017/PN.BDG Jo. No. 319/ 2016, Effy Mariana Kosasih, SH, as Notary has questioned Pdt/2018/PT.BDG concerning decision of West Java High the payments over purchase and sell objects by sellers and Court dated 19 September 2018, as follow: buyers who have declared as paid and this was backed up by Adjudicate: a receipt signed off by Vanessa and Peter dated 9 May 2016 • Receive an appeal submission from original comparator concerning the amount received from San Antonio Senjaya of that plaintiff; of Rp5,500,000,000 as payment for a warehouse in Jalan • Strengthen Decision of Bandung District Court dated 27 Sadang No. 69, 1.103 M2. February 2018, No. 290/Pdt.G/2017/PN.Bdg which was - To ensure that payment has been sent by San Antonio requested for that appeal; Senjaya to Peter Halim and Vanessa Karjani Ibrahim • Convict original comparator of plaintiff, to pay off court (Vanessa Karjani) after signing off the Deed of Sale and fee in two court levels which are within a determination Purchase, CCBI employees provided draft of Statement of appeal level of Rp150,000 (one hundred and five Letter stating that the Deed of Sale and Purchase over thousand rupiah) Certificate of Title (SHM) No. 32/Desa Margahayu, SHM No. - On October 2, 2018, Bandung High Court issued a copy of 807/Desa Margahayu and SHM No. 808/Desa Margahayu, official decision and on December 8, 2018, Peter Halim filed were amounted Rp5,500,000,000, had been paid off by a Cassation Memorandum upon the Decision of West Java buyers on May 9, 2016 and payments have been settled District Court to Supreme Court through Chief of Bandung (that statement letter was signed off by Peter Halim dan District Court and that memorandum was received by the Vanessa Karjani Ibrahim (Vanessa Karjani) as Sellers dan Registrar of Bandung District Court on December 10, 2018. acknowledged by San Antonio Senjaya). - Upon filing the Cassation Memorandum by Peter Halim, - On July 5, 2017, Peter Halim (Plaintiff) filed a lawsuit for CCB Indonesia filed Counter Memorandum of Cassation unlawful actions, one of them was CCB Indonesia as on December 27, 2018 to Supreme Court through Chief of Defendant II to the Chief of Bandung District Court which Bandung District Court and that memorandum was received was received and registered in Case No.290/PDT.G/2017/PN by Registrar of Bandung District Court on December 27, Bdg dated 6 July 2017, such lawsuit consists of: 2018. 1. Defendants have conducted any unlawful actions; - Up until the end of December 2018, this case was still in a 2. Plaintiffs were detrimental; cassation process of awaiting the examination and decision - CCB Indonesia attended on Thursday, dated 3 August 2019, from Supreme Court. 09.00 WIB to fulfill summons from Bandung District Court as mentioned in the court summons No. 290/PDT.G/2017/ 9. Yosafat Kurniawan Sirait (Case No.109/PDT.G/2017/PN.Yyk) PN.Bdg. - Civil Case. - Upon lawsuit submission mentioned by Plaintiff, mediation - CCB Indonesia (formerly Bank Windu) as Defendant. and examination have been conducted, and on Tuesday - CCB Indonesia has issued a Home Loan Facility (KPR) to dated 27 February 2018 the decision was read, as below Yosafat Kurniawan Sirait dated 24 June 2015 amounted to following: Rp1,300,000,000 • In Convention - To guarantee the credit refund issued by CCB Indonesia, • In Exception Yosafat Kurniawan Sirait provided collateral such as SHGB - Rejecting exception from Defendant I, Defendant II, No. 1296/Condongcatur which had been upgraded from his Defendant III, Co-Defendant I and Co-Defendant V right into proprietary as stipulated in Certificate of Title (SHM) for all; No. 16389/Condongcatur which has been given Mortgage • In Case Principal Rank I in accordance with the Mortgage Certificate (SHT) No. - Rejecting convention claims for all; 01922/2016 dated 22 March 2016 Jo. APHT No. 207/2016 • In Reconvention dated 7 March 2016 based on berdasarkan Power of Attorney • In Exception to Charge a Security Interest (SKMHT) No. 197/2016 dated 2 - Rejecting exception from Defendant-In-Reconvention for March 2016 which were drawn up before the Notary Edward all
Annual Report 2018 140 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Warma Raya, SH, PPAT for Sleman Regency. 10. Denny Wijaya Alias Dheny Wijaya and Dr.sianty Wijaya (Case - On April 7, 2017 CCB Indonesia issued a Warning Letter I to No.346/PDT.G/2017/PN Bdg) Yosafat Kurniawan Sirait to fulfil these obligations however - Civil Case. the related party did not conduct on what have been - CCB Indonesia (formerly Bank Antar Daerah) as Defendant I. issued by CCB Indonesia, CCB Indonesia would then send - CCB Indonesia has issued facilities such as: a loan off Warning Letter II dated 21 April 2017 and Warning Letter installment of Rp150,000,000 and Bank Statement Loan of III dated 5 July 2017 to Yosafat Kurniawan Sirait, and this Rp100,000,000 to Dheny Wijaya dated 8 November 2011. related party did not yet to complete his obligations. - To guarantee the credit refund issued by CCB Indonesia, - On July 31, 2017, Yosafat Kurniawan Sirait through S&P Dheny Wijaya provided collateral such as Mortgage Law Firm (Plaintiff) filed a lawsuit of unlawful acts to CCB Certificate (SHT) No. 3326/Desa Rahayu which has been Indonesia (Defendant) to Chief of Yogyakarta District given the Mortgage Rank I in accordance with Mortgage Court which was received and registered in Case No.109/ Certificate (SHT) No. 3733/2012 dated 21 May 2012 Jo. APHT PDT.G/2017/PN Yyk dated 1 August 2017, upon the lawsuit, No. 53/2012 dated 10 April 2012 based on Power of Attorney the Plaintiff requested to Chief of Yogyakarta District Court to Charge a Security Interest (SKMHT) No. 94/2016 dated such as convicting the Defendant to give an extended time 26 March 2012 which was drawn up before Notary Elisa to Plaintiff in completing his obligations because Plaintiff Kurniati, SH., MH, in Bandung. was suffering from loss in his business. - Upon October 3, 2014, CCB Indonesia provided Notification - CCB Indonesia attended the event on Wednesday, dated 16 Letter following up the Warning Letter I, II, III/Last and lastly August 2017, at 09.00 WIB to fulfil summons from Yogyakarta with a Notification Letter dated 5 November 2015, in which district court as mentioned in the court summons No. 109/ CCB Indonesia requested Dheny Wijaya to pay off his debts Pdt.G/2017/PN.Yyk and on that time, appointment for and if up until November 9, 2015 he failed to comply with the mediation judge was conducted and mediation was also request then his collectibility would be considered as bad conducted. credit and resolved through legal course. - Upon lawsuit submission mentioned by Plaintiff, mediation - On January 11, 2016 CCB Indonesia requested for Execution and examination have been conducted, and on Thursday on Mortgage to the Chief of Bale Bandung District Court dated 9 November 2018 the decision was read, as below No. 58/005/KM/Kd-III/BD on the collateral given by Dheny following: Wijaya and that collateral was in auction and the winning In Exception: bidder of the collateral was Ediy Hariyanto (Defendant II), - Receive Defendant-In-Exception during the auction process Dhenny Wijaya and dr. Sianty In Case: Wijaya have submitted a rebuttal as mentioned in a decision - Declare lawsuit from Plaintiff was unacceptable; No. 104/Pdt.G/Bth/2016/PN.Blb which was read on Tuesday - Convict Plaintiff to pay off the court costs dated 8 November 2016, Bale Bandung District Court class 1 - On November 21, 2017 Plaintiff declared an appeal upon A decided to adjudicate: decision of Yogyakarta District Court as mentioned in 1. In Exception: the Summons Notification of Appeal Submission Case - Accepting the exception from the Refuted No.109/Pdt.G/2017/PN. Yyk dated 27 November 2017. 2. In Case Principal: - Upon an appeal conducted by original Comparator of - Declaring rebuttal from the Disputant is unacceptable (Niet Plaintiff of Yogyakarta High Court, examination and Ontvankelijk); document research along with its official decision copies - Convicting Disputant to pay off court fee amounted to were conducted, and on Wednesday dated 30 January Rp301,000 2018 the decision was read, as below following: - On August 14, 2017 Dheny Wijaya and dr. Sianty Wijaya Adjudicate: through Waluya Law Firm (Plaintiff) filed a lawsuit of unlawful • Receive an appeal submission from original actions to CCB Indonesia (Bank Anda) as Defendant I to the comparator as the Plaintiff; Chief of Bandung District Court Class IA which was received • Strengthen Decision of Bandung District Court dated and registered in Case No. 346/PDT.G/2017/PN Bdg dated 9 November 2018, No. 109/Pdt.G/2017/PN.Bdg which 14 August 2017, in which the lawsuit that Plaintiff requested was requested for that appeal; to the Chief of Bandung District Court Class IA was as follow: • Convict original comparator as the Plaintiff to pay off 1. Defendant I has performed unlawful actions; court fees. 2. Abrogating execution on the Certificate of Title - On February 26, 2018, Yosafat Kurniawan Sirait through collateral No. 3326/Desa Rahayu along with all legal S&P Law Firm submitted a cassation at the Registrar of consequences; Yogyakarta District. 3. Abrogating and declaring an invalid, unworthy and - On March 23, 2018, CCB Indonesia ceded Counter without any legal forces on the minutes of auction over Memorandum of Cassation over Cassation Memorandum the above-mentioned collateral; conveyed by Yosafat Kurniawan Sirait which was received 4. Convicting Defendant I, II and Co-Defendant I by joint at the Registrar of Bandung District Court on March 1, 2018 responsibility for an indemnity to Plaintiff as of: as mentioned in a Receipt of Counter Memorandum of a. Materially Rp987,300,000 Cassation. Up until the end of December 2018, this case was b. Immaterially Rp10,000,000,000 still in a cassation process such as examination and decision 5. Convicting Defendants and Co-Defendant I to pay off from Supreme Court. the dwangsom by joint responsibility to Plaintiff of - This case has been terminated by Yogyakarta District Rp10,000,000 every day if the payment and decision Court (based on that decision, this case has not yet legally conducted using cash and both at the same time are binding). late. - That lawsuit was delivered simultaneously along with the Summon Court No. 346/Pdt/G/2017/PN Bdg dated
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28 August 2017, in which CCB Indonesia was requested of CCB Indonesia by preparing and registering the Counter to attend on September 7, 2017, at 10.00 WIB and on that Appeal Memorandum over the Appeal which was delivered date CCB Indonesia failed to attend and only attended on by Yosafat Kurniawan Sirait. September 26, 2017, at 09.00 WIB through its Attorney - Up until the end of December 2018, this case was still Nasar Ambarita, SH., M.Hum., CN from Law Office Nasar awaiting the results of examination and decision from & Associates with the agenda of calling related parties, Yogyakarta High Court. trial on October 10, 2017 with an agenda of calling related parties and appointing the Mediation Judge. CCB Indonesia 12. Tomy Winata attended the trial represented by Nasar Ambarita, SH., - Civil Case M.Hum., CN from Law Office Nasar & Associates. - CCB Indonesia as Co-Defendant - Upon the decision submitted by Defendant, mediation and IV examination were conducted and on Tuesday dated 8 May - CCB Indonesia (formerly Bank Windu previously 2018 the decision was read, as below following: Bank Multicor) is previously part of Syndicated Adjudicate: Creditor. In Provision - Based on the Deed of Extension of Credit No.8 dated 28 - Rejecting a provision lawsuit from Defendants November 1995 which was drawn up before Notary Hendra In Exception Karyadi, S.H. in Jakarta, the total syndicated creditors were - Declaring Defendant-In-Exception I and Defendant-In- seven banks such as PT Bank PDFCI, PT Bank Dharmala, Exception II is acceptable and granted. PT Bank Multicor, PT Bank Rama, PT Indovest Bank, PT In Case Principal Bank Finconesia and PT Arta Niaga Kencana have provided - Declaring lawsuit from plaintiffs is not acceptable; an extension of credit facility to PT Geria Wijaya Prestige - Punishing Defendants to pay off any incurring case costs amounted to USD17,000,000. Participation of PT Bank amounted Rp2,501,000 Multicor was USD2,000,000. - Up until the end of December 2018 the case was still in - That credit facility provided by PT Bank Multicor had not an appeal process into the appeal statement delivered by been paid by PT Geria Wijaya Prestige and PT Bank Multicor Denny Wijaya Alias Dheny Wijaya and Dr.Sianty Wijaya. was not included in the bank recovery program. - On February 12, 2018 CCB Indonesia has transferred the 11. Yosafat Kurniawan Sirait (Case No.106/PDT.G/2018/ receivables of debtors PT Geria Wijaya Prestige into Tomy PN.Smn) Winata based on Deed of Cessie Receivables and Deed of - Civil Case Receivable Value which were drawn up by among CCB - CCB Indonesia (formerly Bank Windu) as Original Indonesia and Tomy Winata. Plaintiff. - On February 26, 2018 PT Geria Wijaya Prestige was notified - Prior to this case, there has been undergoing a civil case that the debt collection had been transferred to Tomy between CCB Indonesia and Yosafat Kurniawan Sirait Winata. No.109/PDT.G/2017/PN.Yyk and the case is currently being - Tomy Winata filed a lawsuit at Central Jakarta District Court examined at the cassation level at Supreme Court of as registered in case No. 223/PDT.G/2018/PN.JKT.PST Republic of Indonesia. dated 17 April 2018. - Since Debtor could not fulfil his obligations and the credit had - CCB Indonesia was served as the Co-Defendant IV as the considered as in a bad category, CCB Indonesia executed requirement to fulfil the case on grounds that Tomy Winata a Mortgage to Sleman District Court and submitted the granted the debt collection right upon the receivables of aanmaning on February 15, 2018 and executed an auction PT Geria Wijaya Prestige which was transferred by CCB which was registered with a case No.4/PDT.E/2018/PN.Smn. Indonesia, as its obligations of the Co-Defendant to conduct - Upon submission of aanmaning and enforcement of the trial decision. auction by CCB Indonesia, Yosafat Kurniawan Sirait (Original - Since the mediation process was not successful, then Defendant) conducted an opposition as mentioned in the next trial agenda would be the responses both from Summons No.106/Pdt.G/2018/PN.Smn dated 3 May 2018, defendants and co-defendants and those responses had based on that letter CCB Indonesia was requested to attend been ceded to the Plaintiff and the subsequent agenda of on Tuesday dated 8 May 2018, at 09.00 WIB to convene the Reflik trial from Plaintiff. civil No.106/Pdt.G/2018/PN.Smn. - On December 4, 2018 Plaintiff had ceded the Reflik and the - Mediation has been conducted between Original Defendant next trial agenda of Duplik would be conducted on January and Original Plaintiff but none of the agreement was taken 2019. among both parties. - Based on the case development mentioned by Law Office 13. H. Muhammad Hanibal Tara Bin Encik Achmad Tara, St, Dkk Nasar & Associates No. 24/PP/X/NA/2018 dated 25 October (Case No.59/Pdt.G/2018/PN.Tpg) 2018 Yosafat Kurniawan Sirait as Original Defendant filed - Civil Case an appeal dated 22 October 2018 against the decision - CCB Indonesia (formerly Bank Windu) as Defendant XVII of Sleman District Court dated 17 October 2018 in which - CCB Indonesia (formerly Bank Windu) as Defendant XVII was decision of lawsuit in the opposition by Original Defendant one of the sued parties by Plaintiff H. Muhammad Hanibal was rejected. Tara Bin Encik Achmad Tara, ST, Dkk at Tanjungpinang District - On November 19, 2018 based on Summon Notification and Court registered in case No. 37/Pdt.G/2016/PN Tpg dated Appeal Memorandum Application No. 106/Pdt.G/2018/ 24 May 2016, then after that case was being cut, the Panel PN.Smn Yosafat Kurniawan Sirait through his Attorney of Judges accepted the exception from Defendant XXII as at Law ceded the Appeal Memorandum through Chief of such Indonesian National Land Office then H. MUHAMMAD Yogyakarta High Court and CCB Indonesia handed the HANIBAL TARA BIN ENCIK ACHMAD TARA, ST, Dkk re-filed force to Law Office Nasar & Associates to defend interests a lawsuit as registered in case No.27/Pdt.G/2017/PN.TPG dated 8 May 2017.
Annual Report 2018 142 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
- Defendant filed a lawsuit to CCB Indonesia on grounds that - On February 12, 2018 CCB Indonesia has transferred the Ny. Wiji Rahayu had given a Mortgage of Proprietary No. 1897/ receivables of debtors PT Geria Wijaya Prestige into Tomy Sungai Jang and Proprietary No. 1899/Sungai Jang to Bank Winata based on Deed of Cessie Receivables and Deed of Windu, both proprietaries over the land acted as collateral of Receivable Value which were drawn up by among CCB credit facility provided by Bank Windu to Ny. Wiji Rahayu. Indonesia and Tomy Winata. - Proprietary No. 1897/Sungai Jang and Proprietary No. - FIREWORKS VENTURES LIMITED filed a lawsuit of unlawful 1899/Sungai Jang were the segregation from Proprietary actions at North Jakarta District Court to CCB Indonesia No.1655/Sungai Jang granted by Ny. Wiji Rahayu based as Defendant I, Tomy Winata as Defendant II and PT. Geria on the purchase from M Ikhsan and M Ikhsan granted that Wijaya Prestige as Co-Defendant as registered in case No. proprietary based on the purchase from A Sun who were 555/PDT.G/2018/PN Jkt Utr dated 25 October 2018. acted based on the Built and Share Agreement No. 96 dated - Plaintiff on its lawsuit filed below following application: 20 April 2011 drawn up before Notary Augi Nugroho Hartadji, • Declaring that Defendant I and Defendant II have S.H., in Tanjungpinang, which acted as the Attorney at Law performed unlawful actions towards Plaintiff; and therefore acted as and on behalf of Plaintiff. • Declaring that Plaintiff was a buyer acting in good faith - Based on the lawsuit delivered by Plaintiff, Tanjungpinang over the receivables (credit assets) in accordance with District Court on Tuesday dated 13 February 2018 read the the incurring obligations of Co-Defendants based on the agenda of interlocutory trial, such minutes of meeting as Deed of Extension of Credit No. 8 dated 28 November follows: 1995 which was drawn up before Notary Hendra Karyadi, 1. In Provision SH, in Jakarta; o Rejecting claims of plaintiff provision • Declaring that neither Defendant I nor Defendant II 2. In Exception owned receivables rights (credit assets) in accordance o Rejecting exception from Defendants and all Co- with the incurring obligations of Co-Defendants based Defendants. on the Deed of Extension of Credit No. 8 dated 28 3. In Case Principle November 1995 which was drawn up before Notary - Declaring lawsuit from plaintiff was unacceptable Hendra Karyadi, SH, in Jakarta; - Convicting plaintiff to pay off case costs • Convicting Defendant I to cede SHGB No. 204, 205 and - The official copies of Tanjungpinang District Court’s decision 207 as listed in the name of Co-Defendant along with have been sent to CCB Indonesia dated 2 March 2018. mortgage certificates; - Based on the above-mentioned Tanjungpinang District • Convicting Defendant I and Defendant II to pay off Court’s decision, Plaintiff filed an appeal to the High Court but collectively both material and immaterial losses the appeal submission was revoked and re-filed the lawsuit experienced by Plaintiff; to Tanjungpinang District Court, which was registered • Declaring an invalid and no legally binding of Deed in case No.59/Pdt.G/2018/PN.Tpg dated 13 August 2018 of Receivable Value and Deed of Cessie Receivables and this Lawsuit was delivered and acknowledged by dated 12 February 2018 which were drawn up among CCB Indonesia based on the Minutes of Summons No. 59/ Defendant I and Defendant II. Pdt.G/2018/PN.Tpg dated 3 September 2018 that all parties • Declaring a valid and valuable of the forfeitable collateral were requested to attend on September 12, 2018 however over the wealth of Defendant I and Defendant II (as CCB Indonesia failed to attend on that date. explained in the letter of lawsuit) - On October 17, 2018 and November 14, trial on the agenda of • Convicting Defendant I and Defendant II to pay off the summoning litigated parties was conducted. dwangsom by joint responsibility of Rp5,000,000 every - On November 21, 2018 the fourth trial was conducted day if they fail to meet the decision starting from date of where CCB Indonesia attended the trial with the agenda of decision. This case was considered as legally binding. summoning parties and appointing the mediator. • Based on the Court Summons No. 555/PDT.G/2018/PN - On December 12, 2018, mediation was conducted but did Jkt Utr dated 25 October 2018 parties were requested not meet any reconcilement among litigated parties and the to attend on October 29, 2018, with the trial agenda of next agenda of mediation would be conducted on January summoning parties and the attended parties on October 10, 2019. 29, 2018 were: Plaintiff and Defendant I. - The case handling was initially handled by the internal CCB 14. Fireworks Ventures Limited Indonesia however the handling was subsequently ceded - Civil Case. to Law Office Otto Hasibuan and Associates as the Special - CCB Indonesia as Defendant I Power of Attorney No. 069/SK-HK/LTGS/XII/18 dated 13 - CCB Indonesia (formerly Bank Windu previously Bank December 2018. Multicor) was a former part of Syndicated Creditors. - On December 18, 2018, the trial agenda of summoning - Based on the Deed of Extension of Credit No.8 dated 28 parties was conducted and attended by Plaintiff, Defendant November 1995 which was drawn up before Notary Hendra I and Defendant II however Co-Defendant failed to attend. Karyadi, S.H. in Jakarta, the total syndicated creditors were On that date, appointment for the Mediator was conducted. seven banks such as PT Bank PDFCI, PT Bank Dharmala, - On January 8, 2019, mediation among litigated parties was PT Bank Multicor, PT Bank Rama, PT Indovest Bank, PT conducted. Bank Finconesia and PT Arta Niaga Kencana have provided an extension of credit facility to PT Geria Wijaya Prestige 15. Henry Setiawan amounted to USD17,000,000. Participation of PT Bank - Civil Case Multicor was USD2,000,000. - CCB Indonesia as Plaintiff - That extension of credit facility provided by PT Bank Multicor - Henry Setiawan as Defendant had not been paid by PT Geria Wijaya Prestige and PT Bank - Based on the Credit Agreement No. 01 which was drawn Multicor was not included in the bank recovery program. up before Notary Henry Santoso, SH and Terms and
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 143 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Conditions of Credit Facility (Mortgage Loan) at PT. Bank Indonesia Branch Office Suryakencana stating the related China Construction Bank Indonesia, Tbk., Year 2016 Rev.00 party as a spouse from the late Riesyanto and as a heir which was listed in a record book provided by Notary Henry along with two kids and original deposit bill along with the Santoso, SH No.49/Daf/2017 (SKU) both were dated 9 required documents as mentioned by CCB Indonesia when November 2017, Plaintiff had provided a loan to Defendant in the related party had previously come over to the Bank the form of credit loan facility Home Ownership Loan (KPR) Office. Prior to that, Artaty Rustam had also brought along with total loans of Rp1,700,000,000. documents consisting that the related party was the heir - To guarantee the credit refund issued by CCB Indonesia, along with two kids. From documents ceded by each party, Defendant ceded the collateral such as land and building it was acknowledged that besides legally married to Artaty based on SHGB No.02001/Pondok Cabe Udik located at Rustam the late Riesyanto had also married with Lia Marlia. Kompleks Perumahan Modern Hill, Jalan Bukit Utara Raya II - Based on the documents owned and original deposit bill Blok B6 No. 10A, Kelurahan Pondok Cabe Udik, Kecamatan holded by Lia Marlia, the related party requested to CCB Pamulang, South Tangerang, Banten Province, however that Indonesia to withdraw savings on the name of the late collateral could be given the mortgage due to the blocked Riesyanto and to submit to her, however CCB Indonesia situation. had not yet withdrawn those deposits and savings with - Defendant could not make any payment installments as following reason/consideration: data stipulated in No.CIF promised in the above-mentioned Credit Agreement and 1049299 that spouse’s name was Artaty Rustam and the SKU therefore it was considered as in default; document delivered by Artaty Rustam consisted the related - Since the collateral has not yet given any mortgage, plaintiff heir of the late Riesyanto so that in this case, there were two filed a lawsuit to defendant so that the defendant could parties stating the heir of the late Riesyanto by ceding the fulfill obligations to pay off principal debt, interest, sanction supporting documents. and any others. - CCB Indonesia had assisted in solving the incurring case - The lawsuit of Plaintiff was registered at South Jakarta among Artaty Rustam and Lia Marlia in order to withdraw District Court with case No. 802/Pdt.G/2018/PN.JKT.SEL savings from the late Riesyanto, however there was no and based on the Court Summons No.802/Pdt.G/2018/ resolution agreed among Artaty Rustam and Lia Marlia, PN.JKT.SEL dated 29 October 2018 Plaintiff was summoned even party from Lia Marlia filed a lawsuit of unlawful actions and requested to attend the general trial at South Jakarta (onrechtmangedaad) former Article 1365 KUHPerdata which District Court, at Jalan Ampera Raya No.133 Ragunan on had harmed her materially and formally at Bogor District Thursday dated 08 November 2018 at 09.00 WIB for case Court to CCB Indonesia as the Court Summons No. 130/ examination among the case of CCB Indonesia as Plaintiff PDT.G/2018/PN. Bgr dated 1 November 2018 in conjunction against Henry Setiawan as Defendant. with a letter of lawsuit from Lia Marlia through her Attorney - Up until the end of December 2018, changes on the panel of at Law dated 22 October 2018 delivered to Chief of Bogor judges was conducted to examine and decide the case as High Court that was received on October 23 as been well as the summons of defendant party was conducted. registered in No.130/PDT.G/2018/PN. Bgr. The next trial would be conducted on January, 10, 2019 with - On December 12, 2018 the first trial was conducted with an agenda of summoning the Defendant party. an agenda of summoning parties which was also attended by the litigated parties. On the trial session mediator was 16. Lia Marlia appointed and mediation was conducted. During mediation, - Civil Case. Mediator listened to both parties and requested to get - CCB Indonesia (formerly Bank Windu) as Defendant. Principal Plaintiff to attend on the following mediation on - Riesyanto was the deposit customer from Bank Windu December 19, 2018. (currently CCB Indonesia) who depositing the fund in the - On December 19, 2018 the mediation was conducted yet form of savings such as saving and deposit at Branch Office failed. Suryakencana, Bogor. The related party has become the - The following trial would be conducted on January 9, 2019 deposit customer since June 20, 2012 with No.CIF 1049299 with an agenda of reading the lawsuit from Plaintiff. along with Artaty Rustam (Spouse) and Tunggaldjaya Willi Darmawan (Son) 17. Widjojo Mulyo Rachmat - CCB Indonesia at Branch Office Suryakencana has known - Civil Case. well Riesyanto family and based on the data No. CIF 1049299, - CCB Indonesia (formerly Bank Windu) as it was stated the name of Riesyanto’s wife as Artaty Rustam Refuted. dan the name of his mother as Lilis Linanjaya. - To date, Mr Widjojo Mulyo Rachmat is a former spouse of - As given the news mentioned by Riesyanto’s son to Nita Indah Swantini (formerly when the credit was withdrawn Arianty (RM Suryakencana) dated 22 December 2017, as the spouse of Indah Swantini) and as Collateral Owner Riesyanto deceased at BMC Bogor Hospital (Guarantor) to guarantee the credit of Indah Swantini, in this - Among savings owned by the late Riesyanto in CCB case he is acted as Disputant. Indonesia until 2 November 2018 are: - Since Indah Swantini who acted as debtor failed in fulfilling 1. Savings at CCB Indonesia No. 1001311607 amounted to her obligations and that credit had considered as in a bad Rp38,014,698 category, then CCB Indonesia executed a Mortgage to Bale 2. Deposit No. 100008252429 amounted to Rp100,000,000 Bandung District Court as registered in case No. 40/Pdt. 3. Deposit No. 10000825445 amounted to Rp500,000,000 Eks/HT/2018/PN.Blb and on October 11, 2018 a summons 4. Deposit No. 100008252461 amounted to Rp500,000,000 was sent to Bank as Petitioner and Indah Swantini as 5. Deposit No. 1000010058346 amounted to Rp150,000,000 Respondent to attend on Monday dated 29 October 2018 (The deposit interest was credited to Account Number at 10.00 WIB for admonitioning the Respondent. However, No. 1001311607) during that time, the Respondent failed to attend and the - After Riesyanto‘s decease, Lia Marlina came over to CCB following summons was sent by the clerk of courts.
Annual Report 2018 144 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
- On November 16, 2018 the Bank received Court Summons Jakarta District Court to CCB Indonesia as Defendant I, No. 500/Pdt/Del/2018/PN.Bdg. in conjunction with No. Tomy Winata as Defendant II and Fireworks Ventures Limited 220/Pdt/Bth/2018/PN.Blb to attend on Wednesday dated as Co-Defendant as registered in No. 488/Pdt.G/2018/PN 21 November 2018 at 09.00 WIB to be listened on its Jkt Utr dated 29 August 2018. explanation, in the case among Widjojo Mulyo Rachmat - Plaintiff in its lawsuit declared/postulated following: Santoso as Plaintiff against PT. CCB Internasional, formerly • Cessie Receivables from CCB Indonesia based on the Deed PT. Bank Windu Kentjana, Internasional Cq. Branch of Cessie Receivables and Deed of Receivable Value were Abdurahman Saleh, Dkk acted as Defendants along with drawn up before were invalid and no legally binding; the letter of rebuttal on the execution No.40/Pdt.Eks/ • Plaintiff was only obliged for acquittancing debt to Fireworks SHT/2018/PN.Blb dated 12 November 2018. Ventures Limited as Co-Defendant - On the rebuttal, Disputant as stipulated in its letter of - Based on the Court Summons No. 488/Pdt.G/2018/PN.Jkt. rebuttal concerned the following: Utr dated 12 September 2018 parties were requested to • Blunder in the Relaas Aanmaning which received by the attend on October 3, 2018. Disputant dated 1 November 2018 written by PT BPR Pundi - As In the Summons Notification of Civil Case Revocation meanwhile its relationship with PT. Bank China Construction No. 488/Pdt.G/2018/PN.JKT.UT dated 4 December 2018, Bank Indonesia, Tbk; Plaintiff filed an Application of Civil Revocation on October 3, • Nescience of Disputant on the total debts from Indah 2018 and that application was granted and stipulated in that Swantini (former spouse/Debtor/Co-Respondent) and on Provision of that summons. the unshared community property as well as the separate property from Disputant to be made as collateral; • Detrimental loss from Disputant since Respondent had Affiliation Transaction taken belongings of Disputant that had not been used as Corresponding to Financial Services Authority Regulation No. 55/ collateral to Respondent. POJK.03/2016 concerning application on governance for Public - Based on the date as determined on the Court Summons Bank, and Decision from Head of Capital Market Supervisor and No. 500/Pdt/Del/2018/PN.Bdg. in conjunction with No. Financial Institution Number: KEP-412-BL/2009 Rules Number 220/Pdt/Bth/2018/PN.Blb dated 16 November 2018 Bank/ IX.E.1 about Affiliation transaction and impact of conflict of interests Refuted failed to attend on November 27, 2018. Bank/ on specific transaction, conflict of interest is different from Bank Refuted received the following Court Summons and was Economic Importance with Personal Economy Importance that requested to attend on Wednesday dated 5 December 2018 could harm banks. at 09.00 WIB. - CCB Indonesia appointed Law Office Nasar & Associates In 2018 there’s no transaction with Affiliation from the company or to conduct an opposition on the rebuttal submitted by affiliation from member of the Board of Directors, member of Board Disputant as stated on Power of Attorney No.067/SK-HK/ of commissioners, or Major Shareholder of the company LTGS/XI/18 dated 27 November 2018. The first trial was conducted on December 12, 2018 with Transaction that could involve Conflict of an agenda of summoning parties and following trial dated on December 19, 2018 with an agenda of mediation. The Interests following mediation would be conducted on January 9, Corresponding to Financial Services Authority Regulation No. 55/ 2019. POJK.03/2016 concerning application on governance for Public Bank, and Decision from Head of Capital Market Supervisor and 18. Harijanto Karjadi as President Director of PT Geria Wijaya Financial Institution Number: KEP-412-BL/2009 Rules Number Prestige IX.E.1 about Affiliation transaction and impact of conflict of interests - Civil Case on specific transaction, conflict of interest is different from Bank - CCB Indonesia as Defendant I Economic Importance with Personal Economy Importance that - CCB Indonesia (formerly Bank Windu and Bank Multicor) is a could harm banks. part of syndicate creditors While doing the duty and obligation, member of Board of - Based on Deed of Extension of Credit No. 8 dated 28 Commissioner and employees of the bank must prioritize the November 1995, which was drawn up before Notary Hendra importance of CCB Indonesia above their own private importance or Karyadi, S.H., in Jakarta, the total syndicated creditors were family or other parties involved. seven banks such as PT Bank PDFCI, PT Bank Dharmala, PT Bank Multicor, PT Bank Rama, PT Indovest Bank, PT Conflict of Interests is a situation or condition where the employee Bank Finconesia and PT Arta Niaga Kencana have provided of the CCB Indonesia which have the position and have the power to an extension of credit facility to PT Geria Wijaya Prestige mishandle, whether accident or not for other interests which could amounted to USD. 17,000,000. Participation of PT Bank affect the decision quality, as well as the result of the decision that Multicor was USD. 2,000,000. could harm the bank. - That credit facility provided by PT Bank Multicor had not been paid by PT Geria Wijaya Prestige and PT Bank Multicor CCB Indonesia have Guidelines that handles the impact of conflict was not included in the bank recovery program. of interests as guidelines for all employees of CCB Indonesia to - On February 12, 2018 CCB Indonesia has transferred the understands, prevent, and avoid the impact of conflict of interests, receivables of debtors PT Geria Wijaya Prestige into Tomy and also as the guideline to have strict policy on the impact from Winata based on Deed of Cessie Receivables and Deed of conflict of interests to result in management of good company. Receivable Value which were drawn up by among CCB On 2018 there’s no transaction that have conflict of interests. Indonesia and Tomy Winata. - HARIJANTO KARJADI as President Director of PT GERIA WIJAYA PRESTIGE filed a lawsuit of unlawful actions at North
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 145 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Fact that happened after the date of December 2018 concerning “Approval on release of Subordination accountant report. Securities as Complementary Capital Instrument (Tier 2)” and Bank Indonesia (BI) Number 20/1868/DSSK/Srt/B dated 30 November Effective Appointment of President Commissioner 2018 concerning “Acknowledgement of Approval Entering Market PT Bank China Construction Bank Indonesia Tbk”. Since January 25, 2019 Mr. Suz Jianzheng as President of Commissioner to the Company is effective. Having said so, Company releases Subordination Securities valued with maximum of USD50,000,000 (fifty million US Dollar) subscribed With the decision from the Board of Commissioners from Financial from China Construction Bank Corporation. Transaction amount Services Authority (FSA) Number KEP-11/D.03/2019 on January of 29.28% (twenty nine point twenty eight percent) from the total 17, 2019, in regards to result of ability assessment and propriety equity of the Company, which is acknowledged from the financial Mr. Sun Jianzheng as President Commissioner of PT Bank China report of the Company for the period that ends on August 31, 2018 Construction Bank Indonesia, Tbk, which also stated in letter from which has been reviewed by KAP Liasta and Partner with a total Financial Services Authority Regulation No. SR-19/PB.12/2019 dated equity of the company Rp2,511.86 Million. 22 January 2019 and accepted by Bank dated 25 January 2019, FSA has given the approval Mr. Sun Jianzheng have been the President The Transaction Value includes the material transaction in above of Commissioner of PT Bank China Construction Bank Indonesia, Tbk. 20% and in below of 50%, as intended in Bapepam Regulation and LK No.IX.E.2 Attachment of Decision from Chief of Bapepam and LK With the effective appointment of President Commissioner that has No. Kep-614/BL/2011, dated 28 November 2011 concerning Material been reported from the bank to Financial Services Authority through Transaction and Changes on Main Business Activities. Letter No. 039/CCBI/DDIR-OJK/I/2019 dated 28 January 2019. The involved parties in the Transaction include:
Changes on Board of Directors Structures PT Bank China Construction Bank Indonesia Tbk (“The Company”) is a party that releases subordination securities. Since February 6, 2019 the appointment of Mr. Agresius R. Kadiaman as the Director of Compliance have been effective. China Construction Bank Corporation which is a party buying that Subordination Securities is the major shareholder from the Company Based on the Decree of Member of Board of Commissioners of with total ownership of 60% of the Company. Financial Services Authority Number KEP-17/D.03/2019 dated 31 January 2019 concerning The Evaluation Result of Capability and CCB (Asia) Trustee Company Limited is a party that acted as a Convenance of Mr. Agresius R. Kadiaman as prospective Director custodian, fiscal service agent and buyer agent, CCB (Asia) Trustee of Compliance of PT Bank China Construction Bank Indonesia,Tbk, Company Limited is owned by China Construction Bank (Asia), and which was delivered through FSA Letter No.SR-32/PB.12/2019 China Construction Bank (Asia) is owned by China Construction dated 1 February 2019 and received by the Bank on February 6, 2019, Bank Corporation. Financial Services Authority has given an approval for Mr. Agresius Therefore, the above-mentioned transaction on the release of R. Kadiaman to become Director of Compliance PT Bank China Subordination Securities of the Company is mandatory to fulfil the Construction Bank Indonesia,Tbk. provisions as been stipulated in the Bapepam regulation and LK With an effective appointment of Director of Compliance reported No.IX.E.1 Attachment of Decision from Chief of Bapepam and LK No. by the Bank to Financial Service Authority through Letter No. No. Kep-412/BL/2009 dated 25 November 2009 concerning Affiliation 068/CCBI/DDIR-OJK/II/2019 dated 12 February 2019 as well as Transaction and Conflict of Interest of Specific Transaction letter No.075/CCBI/DDIR-OJK/II/2019 dated 20 February 2019 (“Regulation No. IX.E.1”) and Bapepam Regulation and LK No IX.E.2 concerning Report of Ceasing the Temporary Substitution of the concerning Material Transaction and Changes on Main Business Director Position Controlling the Compliance Function. Activities (“Regulation No. IX.E.2”) dated 28 November 2011.
Since March 29, 2018, the nomination of Mr. Zhu Yong as the Director By adding this complementary capital, it could give a space and of Corporate & International Banking has been effective. discretion for the Company to increase the business volume, especially for the improvement in funding distribution, by protecting Based on the Decree of Members of Board of Commissioners of ratio position of Obligation Minimum Capital Provision (KPMM) on Financial Service Authority Number KEP-4/D.03/2019 dated 4 the safe limit. Therefore, the Company has the potential to increase January 2019 concerning the Assessment Result of Competency its business scale to be even bigger. and Compliance of PT Bank China Construction Bank Indonesia, Tbk, delivered through a FSA letter No.SR-2/PB.12/2019 dated 8 January Addition of this complementary capital through the release of this 2019 and received by the Bank on January 11, 2018, the Financial Subordination Securities, the Company has been given an approval Service Authority has given the approval for Mr. Zhu Yong to be from Financial Services Authority (FSA) Number SR-89/PB.322/2018 the Director of Corporate & International Banking PT Bank China dated 31 December 2018 concerning “Approval on Release of Construction Bank Indonesia,Tbk. Subordination Securities as the Instrument of Complementary Capital (Tier-2)” and Bank Indonesia (BI) Number 20/1868/DSSK/ Srt/B dated 30 November 2018 concerning “Acknowledgement The Company released Securities Subordinate which is on Approval For Market Entry of PT Bank China Construction Bank subscribed by China Construction Bank Corporation Indonesia Tbk”.
On February 26, 2019 the Company released Securities Subordinate “Agreement On Release of Subordination Securities” Number 001/ that is subscribed by China Construction Bank Corporation. CCBI/CORP-LGL/2019 has been signed off by the Company and China Construction Bank Corporation on February 22, 2019. The Company plans to strengthen the capital to add complementary capital component (Tier 2 Capital) through the Securities instrument Funds from China Construction Bank Corporation on the purchase Subordination which has been given an approval from Financial of subordination securities released by PT Bank China Construction Services Authority (FSA) Number SR-89/PB.322/2018 dated 31 Bank Indonesia Tbk has been received and fully paid on February 26, 2019.
Annual Report 2018 146 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
The above-mentioned Information or the physical evidence, Work Procedure Guidelines of the Board of Commissioners, also on February 26, 2019 have been reported to Financial Services regulate the Assessment and Evaluation of Performance of Authority Capital Market Supervisory Agency through letter No. the Board of Commissioners. Likewise with the Work Procedure 087/CCBI/DDIR-OJK/II/2019 dated 26 February 2019 and Bank Guidelines of the Board of Directors that regulate the Assessment Surveillance from the letter No. 087/CCBI/DDIR-OJK/II/2019, and and Evaluation of Performance of the Board of Directors. have been published at Stock Exchange Website and Issuer Website.
Code of Conduct Buy back of shares and/or buy back of bonds The Code of Conduct lays down the basic principles of behavior and profession which are expected from all personnel of CCB Indonesia. The buyback of shares and/or buy back of bonds is an effort to decrease the number of shares or bonds which have been released Through the Code of Conduct, it is expected that robust risk by the Bank by launching the buyback those shares or bonds, awareness and good control environment in CCB Indonesia can be performing the payment terms in accordance with applicable realized and inherent in each personnel of CCB Indonesia. regulations. a. Code of Conduct Principles Throughout 2018, CCB Indonesia did not launch any shares The Code of Conduct of CCB Indonesia regulates the relationship buy back. Meanwhile, CCB Indonesia has not yet released any with fellow employees, the Company, Customers, contractors, obligations, so that in 2018 there was no transactions of buy back agents, agency staff, consultants, vendors and suppliers, obligations. Shareholders, Competitors, Authorities, Press/Media and other stakeholders, as follows:
CCB Indonesia Personnel Number of shares and/or bonds bought back Null - Non-Discrimination Buy back price per share and/or bond Null o CCB Indonesia tries hard to to provide a conducive
Increase in earnings per share and/or bond Null working environment where every personnel of CCB Indonesia is treated fairly and honorably, encouraged to grow and rewarded based on the performance of individuals and teams.
o CCB Indonesia is committed to provide equal Code and Company Cultures opportunities for all personnel of CCB Indonesia based on Decency. In order to support the efforts to implement the principles of Good Corporate Governance (GCG), CCB Indonesia has had provisions o CCB Indonesia will not tolerate or forgive any type which are outlined in the Polices, Guidelines, and SOP. Some ot the of discrimination including harassment on the basis provisions regulate the Code of Conduct and Corporate Culture of gender, race, age, religion, disability, or other that should be applied by every personnel of CCB Indonesia in daily classifications which improperly interfere or influence behavior. the implementation of work of an individual or create a working environment that is intimidating, hostile, Company Manual degrading or unpleasant. Company Manual is the highest structure of written provisions, o CCB Indonesia prohibits harassment in the workplace which contains the Vision and Mission of the Bank, Values and and in cyberspace. Work Culture of CCB Indonesia, the Bank’s Profile, Organizational Structure, duties and responsibilities of each work function related o CCB Indonesia also will not tolerate any kind of to the issuance of the structure of bank documentation as well as discrimination by vendors, contractors and other a reference/guideline for underneath it, so that the provisions from companies that may have a business relationship with top to bottom are interrelated and connected to each other. CCB Indonesia and/or represent CCB Indonesia.
Issuance of Company Manual was approved by the Board of Commissioners and the Board of Directors of CCB Indonesia. - Conducive and Healthy Environment
CCB Indonesia is committed to maintain conducive and Work Procedure Guideline of Board of Commissioners and healthy environment in running its business so that the Board of Directors health and safety of our customers, business partners and personnel of CCB Indonesia as well as the environment are Preparation of these guidelines are intended to establish guidelines not harmed. and work ethics of Board of Commissioners and Board of Directors, in order to improve an effective function for the implementation of Therefore, both personnel and business partners of CCB duties and responsibilities of the Board of Commissioners and the Indonesia are not committing a crime or illegal activities and Board of Directors in a daily basis. ensure that they act in accordance with the law, namely:
Among the guideline regulates the Code of Conduct, Working Time o Does not use, sell, possess or under the influence of and Meeting, Duties and Responsibilities, Right and Authorities, drugs/psychotropic substances or consume alcohol Work Relationship, and Performance Review and Evaluation. that is inappropriate when running a business for CCB Indonesia, whether consumed during work hours or not, and whether consumed in the building environment of
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 147 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
Bank Windu or not. o CCB Indonesia implements 5 principles of the Fair Dealing Guidelines which must be adhered, particularly for o Comply with all laws and guidelines of health and safety personnel of CCB Indonesia who face the customers, are as that are relevant and immediately report any situation follows: that may pose a danger to the health, safety, or the 1) Personnel of CCB Indonesia should treat all customers environment to the immediate supervisor and/or the respectfully and fairly. Human Resources Division. 2) Personnel of CCB Indonesia only allow to offer products o Does not follow the vain desires in exaggerated gambling and services that are appropriate for their target or involve the customers of CCB Indonesia in any form of customer segments. gambling. Moreover, does not bet and/or gamble in any 3) Personnel of CCB Indonesia must provide qualified form in the office or in the building environment of CCB information and not misleading to the customers. Indonesia. 4) Personnel of CCB Indonesia must provide information that is clear, relevant, and timely so that customers can take the necessary financial decisions. - Personal Data Protection 5) Personnel of CCB Indonesia should handle customer CCB Indonesia is committed to protect the confidentiality complaints independently, effectively and promptly. of customers’ personal data which may not be used under any circumstances to benefit themselves or any third parties - Protecting Customers Information while conducting its duties. o CCB Indonesia is committed to protect customers’ information and use it appropriately. Keeping and maintaining - Training the confidentiality of customer data is a fundamental matter o All personnel of CCB Indonesia are required to attend in the relationship of CCB Indonesia with its customers. regular training, in particular, training that is related to the o Personnel of CCB Indonesia must comply with the law of Anti-Money Laundering and Combating the Financing confidentiality, privacy and security of banking data in force of Terrorism, Anti- Bribery, Risk Management and other as well as contractual requirements when handling customer trainings as stipulated in the mandatory training program. information and the business data collected during the o Training is mandatory for new personnels of CCB implementation of business. Indonesia as part of the induction process. o Classification of information as customer data or business o In order to run this effective training, CCB Indonesia will may vary depending on the applicable laws in the country or monitor and assess the training activities regularly. jurisdiction.
- External and Internal Investigations Assets owned by the Company/CCB o Personnels of CCB Indonesia and business partners Indonesia are required to fully cooperate for any authorized investigation both externally and internally. - Company Information
o Make a false or misleading statement is an act of Personnel of CCB Indonesia and business partners should be indiscipline, resulting in termination of work relationship able to maintain the confidentiality of business information both or other relationships with CCB Indonesia during and after the work relationship or their involvement in CCB Indonesia.
- Data Confidentiality - Intellectual Property Rights
o Every personnel of CCB Indonesia must maintain the o Intellectual Property Rights, including but not limited to confidentiality of business information both during work patents, trademarks and copyrights which are developed or and after coming out from CCB Indonesia. This includes purchased by CCB Indonesia belong to CCB Indonesia. but is not limited to salaries and strictly confidential o Personnel of CCB Indonesia should make every effort to information, strategy and plans of business, and other secure the interests of CCB Indonesia in intellectual property. proprietary information obtained during the work period. o Personnel of CCB Indonesia who have the access to o Personnel of CCB Indonesia must comply with the law such intellectual property shall not and/or without any of banking secrecy, law of privacy rights and law of data authorization, disclose or use the intellectual property, both security in force, as well as the terms of the contract, during and after the work relationship with CCB Indonesia. when dealing with customer information and business data obtained in the course of running the business o Personnel of CCB Indonesia may not use the intellectual property acquired during their work with other companies, without the prior written approval of such other company.
Customers of CCB Indonesia o CCB Indonesia appreciates the restrictions placed on third party software by the developers and/or distributor of - Treating Consumers Fairly software. o Treating the customers fairly and respectfully and provide highest quality customer service that is integral and inseparable from the behavior of the personnel of CCB Indonesia.
Annual Report 2018 148 PT Bank China Construction Bank Indonesia Tbk 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
- Use of Information Technology Assets Owned by CCB CCB Indonesia should be aware of activities that should not Indonesia be performed such as prohibited transactions namely the transaction that is now banned by the Government and any o Computers, network resources, system of electronic other International Organization in the World such as the communications including email, telephone and voice Office of Foreign Assets Control (OFAC) of the US Department systems and other information that are processed by using of the Treasury, United Nations Security Council Resolutions computers owned by CCB Indonesia (jointly referred to as (UN) and European Union (EU), as well as the purchase of the “IT Assets”) belong to CCB Indonesia, and should be used financial products or other investment products that aim to strictly for the purpose of providing services and products of benefit for personal interests. CCB Indonesia and not for any other purpose.
o The above-mentioned equipment and facilities mentioned - Conflict of Interest are only given to personnel of CCB Indonesia for the interest of CCB Indonesia, therefore the personnel of CCB Indonesia o Personnel of CCB Indonesia should not deliberately allow should be able to use and maintain the facilities as well as themselves to be placed in a position where their interests possible. are potentially or actually detrimental to CCB Indonesia.
o The use of IT Assets is regulated through IT Policy of CCB o Personnel of CCB Indonesia should not allow any business Indonesia. decisions to be influenced by or seen as influenced by interests that are not related to CCB Indonesia. A decision to perform business transactions with any party should be - Accurate Registration and Storage of Archive/Documents solely based on business considerations. o Implementation of registration of CCB Indonesia must always o Personnel of CCB Indonesia are obliged to prioritize the be made accurately and reliably with an aim to ensure that interests of CCB Indonesia. business transactions are effectively documented and justified to reduce legal risk. No information on any record or document may be destroyed or falsified. - Gifts and Entertainment
o Reasonable and accurate book must be made available for o “Gifts” includes money, goods or services provided merely as audit and inspection to ensure high standards in record a token of friendship or appreciation. Gifts can also include keeping. souvenirs, benefits and special treatment.
o Personnel of CCB Indonesia must comply with all applicable o “Entertainment” can include overseas travel, watch movies, laws and policies of the management on relevant records that watch musical performances, and more. are implemented by CCB Indonesia. o Provision of gifts and entertainment used to influence the o All “off the record” accounts or transactions in connection business decision inappropriately or may result in unfair with improper payments are prohibited. business advantage/reasonable is constituted as a bribery.
o Records and data must be maintained and destroyed in o Bribery and corruption are contrary to policies of CCB accordance with relevant laws and the management policies Indonesia, so that each personnel of CCB Indonesia who of CCB Indonesia regarding to records. is offended because of committing or accepting bribes or corruption must be subject to disciplinary actions/severe o Any documents, records or data that is required or may be sanctions and can also be prosecuted under the anti- required for the purpose of litigation or investigation, shall corruption laws. notify and consult with the Compliance Unit, Legal Division or Internal Audit Division in advance. - External Communications o Failure to fulfill the requests for documents, records or data that are required may result in civil or criminal lawsuits against CCB Indonesia is committed for openness and transparency in the Company and personnel of CCB Indonesia concerned. communicating with external parties and constantly strives to gain a constructive relationship with key stakeholders (investors, regulator, media, communities, and non-government Business Protection and External Activities organization).
- Insider Trading - Communication with the Regulator o Insider Trading and provision of information from insiders to outsiders/convey sensitive information about prices that are All communications with the regulators should be carried out in not for public consumption are not permitted and are called accordance with the applicable guidelines and/or procedures in as a criminal offense. CCB Indonesia. Information request from the regulator will need to be answered with complete, factual and accurate information. o Tipping of non-public information that is important to someone who may buy or sell securities is also a violation against the applicable laws, either by the person who provides - Communication with Press or Media the information or the person who receives such information. Each question from the press or media should be referred o All personnel of CCB Indonesia should note that the penalties immediately to the appropriate authorities as a spokesman/ for insider trading offenders can be fined up to jail or prison. communication of CCB Indonesia.
o Despite the above-mentioned ones, the entire personnel of
Annual Report 2018 PT Bank China Construction Bank Indonesia Tbk 149 01 Opening 02 Business and Functional Review 03 Financial Review 04 Good Corporate Governance 05 Corporate Information 06 Financial Statement
- Procedures concerning the use of social media accordance with such duties to be performed, that they have a good track record, and do not take any advantages o Personal social media account must be separated from the of their relationship with CCB Indonesia or use the name work. of CCB Indonesia in the relations to any illegal actions, o Only the spokesman of CCB Indonesia who is authorized to fraudulent, transactions that are unethical or dishonest, or conduct online communication on behalf of CCB Indonesia. any transactions which may tarnish the reputation of CCB Indonesia. o Should be clear on who is represented on forums, blogs and discussion forums. o Personnel of CCB Indonesia must ensure that business partners are aware and committed to the anti-fraud principles o There should be no sales or marketing of products of CCB set out in the code of conduct. Indonesia, or the provision of financial advices on the personal social media pages. o Personnel of CCB Indonesia are not allowed to let or give private facilities which will be used by customers/third o Comply with the agreement of confidentiality and privacy. parties in utilizing transactions in CCB Indonesia. o Respect colleagues and workplace as well as individuals and o Personnel of CCB Indonesia are not allowed to be the power other communities. of attorney of clients and/or third parties in the business o Non-compliance may result in disciplinary action, including transactions in CCB Indonesia. the termination of work relationship with CCB Indonesia. If any personnel violate the laws, they should be responsible to the consequences personally. b. Socialization and enforcement of the Code of Conduct
o If in doubt, please ask. Do not take any risks with the reputation In order to provide an understanding and to cultivate a culture of CCB Indonesia or the reputation of oneself. of compliance for each employee, the Company provides a socialization of the code of conduct periodically for employees through training and/or workshops. - Legal actions/lawsuits Having read and understood of the Code of Conduct, personnel o Except where prohibited by local laws, the personnel of CCB of CCB Indonesia are required to provide a recognition of the Indonesia should inform immediately to the direct supervisor, Code of Conduct on the predetermined form. the Human Resources Division and the Legal Division if they are the subject of legal actions/lawsuits or investigations in Each personnel of CCB Indonesia who violate the provisions anywhere. of the Code of Conduct may be subject to disciplinary action, including but not limited to suspension or termination of work o Permission from the Human Resources Division must be relationship. If the laws and regulations in force are also violated, obtained before accepting any political position or accepting then an official report may be made to the relevant authorities work relationship, appointment and external assignments. and the personnel of CCB Indonesia can be fined or sanctioned.
- Anti-Money Laundering and Combating the financing of c. Disclosure that the Code of Conduct is applicable for the terrorism Board of Commissioners, Board of Directors and employees Personnel of CCB Indonesia should fully comply with all of the Company. applicable laws and regulations related to the financing to CCB Indonesia with the whole personnel is committed and combating terrorist activities, anti-trafficking of illegal narcotics responsible to maintain the highest level of integrity and honesty and anti-money laundering. in the environment of CCB Indonesia so that it can continue to provide qualified service for all across Indonesia with products and services that can support the success of the customers of - Complying with the Laws and Regulations CCB Indonesia. Personnel of CCB Indonesia are responsible for knowing and The Code of Conduct is applicable to the Board of Commissioners, complying with applicable laws and regulations of the Republic the Board of Directors and all employees of CCB Indonesia and of Indonesia, including but not limited to matters related to the becomes the basis of ethical attitudes and actions with regard export and import business. to principal values of the Company.
- Agents/Consultants/Third Parties
o Personnel of CCB Indonesia should conduct proper business Employees and/or Management that is assessment when selecting/choosing a third party, as held by the Company Employee and/or business partners that include (but are not limited to) Management Stock Ownership Program by contractors, agents, agency staff, consultants, vendors and the Company. suppliers of goods and services. Business partners are not allowed to do something indirectly where a personnel of CCB CCB Indonesia has started off implementing the Stock Ownership Indonesia is prohibited to do so according to the Code of Program for the Management and/or Employees in 2019, by Conduct or the applicable laws and regulations. referring to the FSA Regulation provisioning the Implementation of Good Corporate Governance in Remuneration for Commercial o Personnel of CCB Indonesia should take the appropriate Banks. propriety test, ensuring that business partners are in
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Whistleblowing System in the Company d. Reward Program
The demand to implement Good Corporate Governance has become Bank supports all of its employees to involve in the one of the basis to implement such openness, in which the Bank implementation of whistleblower and inform on any fraud is required to take preventive steps and to fight over any practices activities, corruption or other violations. that are against the Good Corporate Governance by reporting the Reward will be given based on the Human Resource Regulations occurring violations through a Whistleblowing System. which are the separate regulation from the whistleblowing The system is expected to increase the participation of all employees policy. to report any occurring violations. e. Documentation and Administration
a. Line of Communications and Reports Officers of Internal Audit Division are fully responsible for the Whistleblowing needs to be made with the belief that what is implementation of this policy and ensure the confidentiality on reported is true. Complaints submitted without mentioning the the recorded report as well as any investigation results. name of the complainant will be addressed in accordance to the Auditor’s consideration. Good Corporate Governance Self Whistleblower should provide clear information and evidence Assessment as well as searchable and actionable. Those information and evidence are submitted to the President Director of the Bank Throughout 2018, CCB Indonesia has implemented Good Corporate with a copy to the Head of the Internal Audit Unit. Complaints of Governance self-assessment in June 2018 with a Rank of: 3 (Fair), violations allegedly committed by the Management (including and in December 2018 with a Rank of: 2 (Good). direct supervisor), the Board of Directors and the Board of Commissioners, then the report should be addressed to the Chairman of the Audit Committee and the Head of Internal General Conclusion on the Implementation Audit Unit. of Good Corporate Governance b. Protection and Assistance for Based on the analysis of all the criteria / indicators that are factors Safety of the whistleblower who files a complaint truthfully for evaluating the implementation of Governance, it is concluded in accordance with the Whistleblowing Policy, and based on that: good intentions will not be exposed to the risk of dismissal or 1. Implementation of Board of Commissioners Duties and retaliation. This guarantee does not apply to whistleblowers Responsibilities who deliberately file complaints that are not true or not based on good intentions. The implementation of the Board of Commissioners duties and responsibilities has fulfilled the governance structure in carrying Confidentiality: The Bank will protect the identity of the out its supervisory functions, reflected in the fulfillment of: whistleblower and will not disclose the identity without any - Number of Members of the Board of Commissioners consents of the concerned party. If there are any certain - Requirements of each member of the Board of situations where the Bank is not able to resolve the issue without Commissioners disclosing the identity of whistleblowers (for example because - Guidelines for the Board of Commissioners’ work rules the evidence is required in court), the Bank will discuss with the - Guidelines for organizing Board of Commissioners meetings whistleblower to do the follow-ups. The Bank guarantees that all matters reported to the bank officers will be handled with a Board of Commissioners Duties and Responsibilities have been high level of confidentiality. The Bank will make every effort to carried out in accordance with the principles of good corporate protect the confidentiality of parties who report violations or governance as stated in minutes of meetings and internal anyone who provides information in the investigation process memos. in accordance with existing laws. The Board of Commissioners is not involved in making decisions c. Complaints handling on Bank operations, except in terms of providing funds to related parties and other matters stipulated in the Bank’s Articles of Officers of Internal Audit Division who are related to the hotline Association and/or applicable laws and regulations in order to whistleblowing will provide responses on all complaints and any carry out the supervisory function. The Board of Commissioners concerns through following procedures: actively holds meetings in order to conduct supervision, both a. Conducted an investigation/being investigated by the right with the Board of Directors and with the Committees below, unit/division namely the Audit Committee, Risk Monitoring Committee and b. Referred to the Police through the approval from the Board Remuneration and Nomination Committee of Directors The above condition is delivered to the Audit Committee. The results of the supervision of the Board of Commissioners are submitted to the Board of Directors and are input for the On specific conditions, the complaints can be resolved with a Board of Directors in carrying out their duties to achieve good consent without any investigation to be conducted. If actions performance are required to be done immediately, this complaint handling can be conducted before other investigations to be resolved. 2. Implementation of Board of Directors Duties and The implementation of above-mentioned policies is not limited Responsibilities but to the weight of complaints, the credibility of complaints and how further a report can be verified by the existing sources. The implementation of the Board of Directors duties and responsibilities has met the requirements of the governance
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structure, reflected in: The Compliance Function has established policies, compiled - Fulfillment of the number of Board of Directors members guidelines, and carried out steps to ensure the suitability, along with the criteria, independence and requirements of adequacy and effectiveness of the role of the compliance each member of the Board of Directors; function in all layers of the bank’s organizational structure. The - Availability of Board of Directors work order guidelines and Bank has made improvements by increasing the implementation Guidelines for Organizing Directors’ Meetings of the APU PPT program through the provision of a more adequate AML System outside the core banking system. The duties and responsibilities of the Board of Directors are in accordance with the Company’s Articles of Association and the The role of the compliance function in helping the bank’s Board of Directors Charter. Bank management continues to be compliance improvement process has been improved. This improved through improvements that have been maintained is reflected in the efforts that have been carried out, among and continued to date. others, by providing compliance opinion, compliance review, compliance news, compliance checklist, socializing regulations The Board of Directors are fully responsible for the and becoming the liaison officer of the Financial Services implementation of the Bank’s management, fostering, leading, Authority and / or Bank Indonesia, as well as other regulators. and in charge of the Division in accordance with the division of its supervision, and implementing the principles of Good Corporate Governance in each of the Bank’s business activities 6. Implementation of the Internal Audit Function at all organizational levels. The organizational structure of the Internal Audit Division (IAD) The duties and responsibilities of the Board of Directors have has supported the independence of the Internal Audit Unit in been carried out well, as evidenced by improvements that are carrying out its duties, referring to the internal audit charter and constantly being sought and implemented, as well as improving adequate work guidelines and sufficient human resources to bank performance. support effective audits.
The definitive Officer holds the Head of the Internal Audit 3. Completeness and Implementation of Committee Duties Division. The number of IAD personnel has been increased. Gradually, the development and improvement of human The completeness and implementation of Committee duties has resource competencies in IAD is carried out, including through met the governance requirements reflected in the composition certification in accordance with its level. of the membership in accordance with the provisions, and has been completed with the Committee’s Duties Implementation In carrying out its duties, the Internal Audit Unit has conducted Guidelines. a risk-based audit, the audit scope of the Internal Audit Unit has been expanded compared to the previous period, and the results The implementation of the committee’s duties is in accordance of the inspection have been reported to interested parties. with the work guidelines of each committee, reflected in the activities and minutes of the meeting. Minutes of meetings have The internal audit function has been carried out adequately been made and well documented. so that adequate reports are available for the Board of Commissioners and Directors. An audit program to assist the The Committee has carried out its functions in accordance running of the audit process has supported the internal audit with the applicable provisions including the provision of function. recommendations according to its duties to the Board of Commissioners. 7. Implementation of the External Audit Function The performance generated by each Committee cab support the supervision of the Board of Commissioners. The implementation of the external audit task is submitted to the Public Accounting Firm and Public Accountant who has a good reputation. 4. Conflict of Interest Handling The appointment process of the Public Accounting Firm and Conflict of Interest Handling has been regulated internally Public Accountant by the Bank is in accordance with applicable through Guidelines for Conflict of Interest Handling. However, regulations. In conducting audits, Public Accounting Firm and during 2018 there were no problems that contained conflicts of Public Accountant has fulfilled the determined aspects and interest carried out audits independently and fulfilled the professional standards of public accountants and work agreements and the 5. Implementation of the Bank’s Compliance Function scope stipulated in the applicable provisions.
The Bank has a Compliance Division that carries out its duties The Public Accounting Firm has reported the audit results and and responsibilities according to the charter and compliance management letter to the Financial Services Authority on time guidelines. The Bank has provided competent human resources and in accordance with the scope of the audit as stipulated in to carry out the compliance function effectively, has an the applicable provisions adequate Anti Money Laundering (AML) System to support the implementation of Anti Money Laundering and Prevention of 8. Application of Risk Management including the Internal Terrorism Funding (APU PPT), and ensures the availability and Control System. management of Policies, Guidelines and Standard Operating Procedure. The Bank has an adequate organizational structure to support the implementation of risk management and internal controls The Bank has increased the number of human resources in including the Internal Audit Division, Risk Management Division the Compliance Division to improve the implementation of compliance principles at the Bank and improve the effectiveness of compliance review.
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and Risk Management Committee, and the Compliance Division. has reported the implementation of Good Corporate Governance In addition, the Bank also has adequate policies, procedures and in accordance with the Financial Services Authority Regulations risk limits. and applicable laws and regulations.
Improvements and adjustments have been made to the Service to customers is delivered through transparent organizational structure and infrastructure in the credit sector, product explanations and handling customer complaints with among others, filling employees’ vacancies that deal with responsiveness, improving weaknesses in order to follow up on Overwritten Collateral (OC), increasing the number and quality customer complaints properly of Credit Reviewers in particular Corporate Banking, revamping the composition of loan breakers, regulating the implementation 11. Bank Strategic Plan of credit restructuring for corporate loans, as well as revamping the Institutional Standard Operating Procedure (SOP) and Credit The Bank’s Strategic Plan has been prepared in the form of a Limit Authority. Bank Business Plan that is tailored to the Bank’s Vision and Mission and is fully supported by all stakeholders. The Bank has identified and is adjusting all bank policies in accordance with applicable regulations and in line with the The Bank’s Business Plan has been prepared based on Bank’s vision and mission after the merger FSA Regulation No. 5 /POJK.03/2016 and SE OJK No. 25 / SEOJK.03/2016 concerning Bank Business Plans, and based The Board of Commissioners and Board of Directors has carried on comprehensive studies taking into account business out its duties and responsibilities related to risk management. The opportunities and strengths possessed by banks and identifying Board of Directors has overseen risk management policies and weaknesses and threats. strategies through discussions at various committee meetings. The Bank has improved the Quality of Risk Management as The Board of Commissioners has approved the Bank’s Business reflected in the Bank’s Risk Profile, which is maintained well as Plan. The implementation of the Bank’s Business Plan is stated in the Risk Profile Report. monitored and directed by the Board of Directors, and supervised by the Board of Commissioners, and communicated to all Bank shareholders through the General Meeting of Shareholders and 9. Provision of Funds to Related Parties and Provision of Large to all job functions. Funds. The Bank’s Business Plan has described sustainable growth The Board of Directors has actively established policies, targets and provided economic benefits to all stakeholders systems and procedures that are quite effective and adequate and has been adjusted to the direction and business model in regulating the provision of funds to related parties and the according to the Bank’s vision and mission, as well as business provision of large funds and monitoring and resolving problems rationalization to improve efficiency and profit performance and arising from the provision of funds made. achieve strategic goals. In the process of providing funds to the Related Party and The Bank’s Business Plan has been submitted to the regulator in Large Exposure, evaluations and updates of the list of related accordance with applicable regulations. parties have been carried out regularly and made improvements in policies and procedures. Decision-making is done without So that, in 2018 Indonesia CCB has conducted the implementation intervention from any party. Every provision of funds to the of Good Corporate Governance, which is good in general, reflected Related Party is carried out after obtaining approval from the in adequate fulfillment of the principles of Governance. In the event Board of Commissioners that there are weaknesses in the application of the governance principles, in general these weaknesses are less significant and can There was no violation of the LLL during the assessment period, be resolved by normal actions by the Bank’s management. and every report related to the provision of funds to related parties and large exposure was delivered in accordance with the actual conditions and in a timely manner to the Financial Services Authority
10. Transparency of Financial and Non-Financial Conditions, Report on Implementation of Good Corporate Governance (GCG) and Internal Reporting.
Preparation of quarterly and annual publication reports, as well as GCG Bank Implementation Reports, always comply with the Financial Services Authority Regulations and applicable laws and regulations.
In the preparation of quarterly and annual publication reports, as well as in the preparation of GCG implementation reports, it has been carried out through a process of good governance and attention to the scope that must be reported in accordance with the provisions of the Financial Services Authority and applicable laws and regulations.
The Bank has applied the principle of transparency to financial and non-financial conditions through its Quarterly and Annual Publication Reports. In the Annual Publication Report, the Bank
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Committees Report
In the implementation of duties and responsibilities of an effective and independent oversight, the Board of Commissioners is supported by the Audit Committee, Risk Oversight Committee, and the Remuneration and Nomination Committee.
In order to support an increase in the implementation of Good Audit Committee Duties and Responsibilities Corporate Governance (GCG) and optimize supervision attached by the Board of Commissioners, as well as to ensure the implementation a. Monitoring and evaluating the audit planning and of internal control system at all levels of operations, has been stated implementation as well as monitoring the follow-up of audit in the Audit Committee Charter in accordance with the provisions results in order to assess the adequacy of internal controls, of the Financial Services Authority, Guidelines and Procedures of including the adequacy of the financial reporting process. Risk Monitoring Committee, the Remuneration and Nomination b. Reviewing any financial information that will be issued to the Committee, as well as changes to members of the Committees public and/or authorities, among others, financial statements, under the Board of Commissioners. projections, and other reports related to the Bank’s financial Throughout 2018, the implementation of the duties of the information. committees who assist the Board of Commissioners have been c. Reviewing any complaints related to accounting process and running in accordance with the Work Plan and schedule of the financial reporting of the Bank annual meeting. d. Reviewing the Bank’s compliance to law and regulations related to the Bank’s activities
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e. Providing independent opinion in the event of disagreements nomination and / or replacement of members of the Board between the management and the accountant on the services of Commissioners and the Board of Directors to the Board of provided. Commissioners to be submitted to the General Meeting of Shareholders. f. Providing recommendations to the Board of Commissioners on the appointment of Public Accountant be based on b. Remuneration and Nomination Committee shall provide independency, scope of the assignment and fees (recompense). recommendations on potential members for the Board of Commissioners and/or Board of Directors to the Board of g. Reviewing the audit implementation by internal auditor and Commissioners to be submitted to the General Meeting of supervising the implementation of the follow-up by the Board of Shareholders. Directors on the internal auditor findings. c. Remuneration and Nomination Committee shall provide h. Monitoring the implementation of the follow-up by the Board recommendations on an independent party who will be of Directors on the findings of the Internal Audit, Public a member of the Audit Committee or the Risk Oversight Accountant, and the results of Bank Indonesia’s findings in order Committee to the Board of Commissioners. to provide recommendations to the Board of Commissioners. d. Remuneration and Nomination Committee shall assess the i. Being responsible to review and provide advices to the Board of candidates for the Board of Commissioners, or candidates Commissioners in relation to the potential conflict of interest of for the Board of Directors, or candidates for the Independent the Bank. Party. Assessment is based on competence, and the j. Obliged to maintain the confidentiality of documents, data and track record of the candidates, can also be done through information interviews with candidates.
To support the smooth running of their duties, each committee has Risk Oversight Committee Duties and possessed work guidelines and procedures. Responsibilities Implementation of duties of the Committees throughout 2018 seen a. Evaluating the conformity between risk management policies from the minutes of the committee meeting, the notes contain and the implementation of such policies. recommendations to the Board of Commissioners, notes and/ or working papers corresponding to monitoring and evaluation in b. Monitoring and evaluating the implementation of the Risk accordance with the functions of each committee as follows: Management Committee and Risk Management Work Unit. 1. Audit Committee Activities Throughout 2018, the Audit Committee has held 19 meetings Remuneration and Nomination Committee and submitted proposals, feedback and recommendations to the Board of Commissioners. Duties and Responsibilities The Audit Committee provides recommendations to the Board The Remuneration and Nomination Committee is tasked to assist of Commissioners for the appointment of Public Accounting the Board of Commissioners in order to support the effectiveness of Firm “Tanudiredja, Wibisana, Rintis and Partners“ (a member duties and responsibilities including: of the PricewaterhouseCoopers network of firm) which has international reputation and experienced in conducting a 1. Related to remuneration, the Remuneration and Nomination general audit of top-tier banks. Committee has the following duties and responsibilities: 2. Risk Oversight Committee Activities a. Remuneration and Nomination Committee shall conduct an Throughout 2018, the Risk Monitoring Committee has evaluation of the remuneration policies and systems. held 4 meetings and submitted proposals, feedback and recommendations to the Board of Commissioners. b. Remuneration and Nomination Committee shall provide 3. Remuneration and Nomination Committee Activities recommendations to the Board of Commissioners on: Throughout 2018, the Remuneration and Nomination Committee - Remuneration policies and systems for the Board has held 14 meetings and submitted proposals, feedback and of Commissioners and the Board of Directors to be recommendations to the Board of Commissioners. submitted to the General Meeting of Shareholders. - Remuneration policies and systems for Executive Composition of the committee members under the Board of Officials and employees as a whole to be submitted to Commissioners is in accordance with the size and complexity of the Board of Directors. CCB Indonesia. All members of the Committees under the Board of Commissioners has a good track record of integrity, character, and c. Remuneration and Nomination Committee shall ensure that good moral that are well maintained by each individual. the remuneration policies at least in accordance with: - Financial performance and fulfillment of reserves as Committee meeting decisions are taken by deliberation and/or stipulated in the applicable law and regulations, a majority vote. The results of the committee meeting has been - Individual performance achievement, stipulated in the minutes of meetings and are well documented. - Fairness to the peer group, The results of the committee meetings are always strived to be - Consideration of long-term objectives and strategies of taken into consideration and recommendation to the Board of the Bank. Commissioners in decision making.
2. Related to nomination, the Remuneration and Nomination Committee has the following duties and responsibilities:
a. Remuneration and Nomination Committee shall prepare and provide recommendations on systems and procedures of
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