BTN IS 2019 SUSTAINABLE GROWTH SUSTAINABLE PT. Bank Tabungan Negara (Persero) Tbk. (Persero) Negara Tabungan Bank PT. PRESENT TO HARMONIZE TO PRESENT Sustainablity Report
BTN HADIR MENYELARASKAN PERTUMBUHAN YANG BERKELANJUTAN 2 3
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 2 3
THEME EXPLANATION OF SR BTN
The existence of Bank Tabungan Negara in the housing sector in Indonesia is becoming stronger. The Bank with the fifth largest asset comes with a variety of products and services. Its customers are also diverse, from the Low-income Community (MBR) to the upper classes, from millennial to baby boomers generation. For the Company, this diversity is a strength, as well as an evidence that its presence is accepted in all circles.
In accordance with its vision as a leading and trusted bank in facilitating the housing sector and family financial services, the presence of Bank BTN can align housing needs across generations and reduce housing backlogs that are still high in the country. The company is optimistic that its ability to reach all customers is the key to successfully achieve the sustainable business growth.
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH
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TABLE OF CONTENTS
Theme Overview 3 Sustainable Performance Highlights 6 BTN and Sustainable Development 9 o Implementing Sustainable Finance to Support Sustainable Development Goals
o Implementation of Sustainable Finance Principles
o Company’s Strategic Transformation
o RKAB 2019 Implementation
o 2020 RAKB
o The Company and Sustainable Development Goals
The Board of Director’s Report 23 o Sustainability Policy and Strategy
o Implementation of Sustainable Finance
o Sustainable Financial Achievement Strategy
About Sustainability Report 31 o Period, Limit, and Standard to Prepare the Report
o Process to Determine the Report’s Content
o List of Material Topics and Boundary/Limitation of Topics
o External Assurance
o Feedback
o Information Access to the Sustainability Report
Statement of the Board of Commissioners and Board of Directors on the 38 Accountability of the Report Profile 41 o Company’s General Information
o Milestones
o Company Brief History
o Vision, Mission, and Corporate Culture
o Organizational Structure
o Company’s Business Activities
o Operational Areas and Markets Serviced
o Share Ownership Composition
o Company Scale
o Information On Employee
o Supply Chain
o Significant Change on the Organization and its Supply Chain
o Prevention Approach or Principle
o External Initiative
o Association Membership
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Sustainable Governance: 67 o Commitment to Implement Corporate Governance
o Principles of Corporate Governance
o Governance Strategy
o Integrated Governance, Risk, and Compliance (GRC)
o Focus on Corporate Governance Implementation in 2019
o Implementation of Sustainable Finance
o Problems Faced, Development, and Influence on the Implementation of Sustainable Finance
o Governance Structure
o Risk Management
o Implementation of the Prudential Principle
o Code of Ethics and Conduct
o Internal Control System
o Whistleblowing
Stakeholders Engagement 91 Sustainable Economic Performance: 95 o o Move Together to Overcome Housing Deficit
o o Building and Empowering the Community
Sustainable Environmental Performance: 119 o o Achieving Environmentally Friendly Bank
Sustainable Social Performance: 129 o o Achieving the Best Human Resources
o o Inclusive and Sustainable Products As Solution
o o Customer Satisfaction As Services Priority
Index of GRI Standards 159 Regulation No. 51/POJK.03/2017 164 Tauatan Standar GRI dan SDGs Compass 167 Lembar Umpan Balik 170 Independent Assurance Statements 170
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Ikhtisar Kinerja Keberlanjutan 2019
Economic Performance [2.a.1)] [2.a.2)] [2.a.3)] [2.a.4)][2.a.5)]
Quantity of production/ Interest income and net profit Profit for the services sold sharing Year
Consumer 10.089.177 3.027.466 Banking 9.340.940 8.961.801 2.807.923
Commercial Banking 209.263
Sharia Business Unit
Banking Services
17 18 19 17 18 19
Social Performance [2.c]
Description Units 2019 2018 2017 Total employees Persons 11.647 11.810 10.690
Total female employees Persons 5.345 5.345 4.770
Employee turnover Percentage 1,51% 2,26% 2,65%
Total occupational accidents Case None None None
Total customer complaints Case .113 71.674 40.051
Complaints settled Percentage 98,11% 98.30% 96,04
Total allocation for CSR and PKBL fund Billion Rupiah 48,69 64,23 31,38
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Environmental performance [2.b.1)]
Use of water Environmental (Head Office) Complaints
98.280 97.410 93.537 None
17 18 19
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BTN AND SUSTAINABLE DEVELOPMENT [1]
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Implementing Sustainable Finance to Support Sustainable Development Goals
Banking has a big role to play in achieving sustainable (POJK) No. 51/POJK.03/2017 on Implementation of development, which is the development to meet current Sustainable Financial Statements for Financial Services needs without compromising the needs of future Institutions, Issuers, and Public Companies for Bank generations by emphasizing the supporting capacity Tabungan Negara as of 1 January 2019, the Company has of the environment, the achievement of social justice, prepared a Sustainable Finance Action Plan (RAKB) as a economic and environmental sustainability. In this matter, guideline for the implementation of sustainable finance. banks as financial institutions are required to be selective in channeling their financing so that the projects financed The existence of RAKB is expected to create long-term are in line with the principles of sustainable development, value creation that is not limited to the form of creating not the other way around. sustainable competitive advantage for the Company, but also includes the wider community and environment As one of the largest banks in Indonesia, especially and accompanied by strengthening resilience because as a State-Owned Enterprise (SOE), Bank Tabungan the Company participates in managing all risks in the Negara is committed to supporting the realization of economic, social, and environmental sectors more sustainable development. Real support is provided by quickly, precisely, and accurately. the Company by providing selective financing, which is in line with the sustainable finance principles. In line with the enforcement of Financial Services Authority Regulation
Objectives of the Sustainable Finance Action Plan In 2023, Bank Tabungan Negara will achieve its objective as a leading Company in the housing sector and a trusted family financial partner that applies sustainable finance principles to jointly achieve the sustainable development goals in Indonesia.
Company’s Strategic Steps for Sustainable Finance
1 2 3 4 5 6 Strengthening Developing a Strengthening Developing Developing Strengthening the policies and digital-based risk management banking products sustainable institutional practices of sustainable policies by and services banking capacity through managing CSR finance strengthening through housing, operations by institutional programs that pay communication policies and consumption, and implementing structuring and attention to 3P strategy by programs MSME financing the concepts resource capacity (People, Planet, involving the through that considers of green office development Profit) aspects with millennial preparing environmental and and sustainable the partnership generation sustainability social aspects to procurement elements of ABCG policies and strengthen the (Academy, Business, strategies portfolio Community, and Government)
According to Appendix 1 of POJK No. 51/POJK.03/2017 • Directing all aspects of implementation of the in the Executive Summary Section, which regulates sustainable finance programs to be in line with the requirements for employees, officers, or work units to be targets to be achieved. responsible for the implementation of the Sustainable • Determining the strategy and implementation of Finance Action Plan, the Company has designated the corporate communication programs for various Corporate Secretary Division as the person responsible sustainable finance programs so that the Bank’s for implementing RAKB 2019-2023. This division has duty reputation is well maintained. to supervise the implementation of all sustainable finance • Coordinating, monitoring, and evaluating all aspects programs and assigning program implementation to the of the implementation of sustainable finance other related divisions. The duties and authorities of the programs. Corporate Secretary Division are:
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Roadmap of the Implementation of the Bank’s Sustainable Finance in 2019-2023
2019 2020 2021 2022 2023
Phase I: Consolidation
• Preparing a set of policies and Phase II: sustainable finance Stabilization
Strategy models • Institutional strengthening and Phase III: the establishment of Sustainablity Policy & Development sustainable finance structures
Assessment, Sustainability Risk Policy, Identification and Measurement of Social and Environmental Risks Index Green Lending, Green Bond, Green Index (SRI - Kehati), and Environmental & Social Credit Cards Green Finance Product& Green
Digitizing Process and Operation. Green Office.
Development of internal capacity, Improvement of Service Access in Disadvantaged Areas (inclusion). Sustainability Report. Initiavites Disability Friendly Bank Services of “Griya Daya Company” Program, Establishing IH Genes, and Wi-Fi Home Campaigns. Sustainability Finance Award Sustainability Program &Sustainability Program
RAKB 2019-2023 contains the Company’s long-term sustainable finance program consisting of three main initiatives, which are Preparing the Sustainable Finance Policy and Model Tools, Institutional Strengthening, Establishing/Organizing Sustainable Finance, and Sustainability Programs and Initiatives.
The Company integrates sustainable finance development promoting the Transformation Strategy theme with the existing initiatives that are in line with sustainable finance principles. Among others, KPR digitization and inclusive financing products such as micro-KPR for non-permanent income earners, increased access to banking financial services in 17 disadvantaged areas, inclusive services for fishermen and people with disabilities, and financing for environmentally friendly construction. In terms of funding, the Company also plans to obtain green funding through financial instruments based on environmentally friendly bonds or green bonds in the future.
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Implementation of Sustainable Finance Principles
The principles of sustainable finance have been regulated in the Financial Services Authority Regulation No.51/ POJK.03/2017 on the Implementation of Sustainable Finance. This regulation contains seven principles that have been applied to the Company’s business activities and will continue to be developed along with RAKB implementation.
Green credit policy is a credit assessment that examines the results of an Environmental Impact Assessment (AMDAL) before deciding to extend credit to a project. This policy has been outlined Principle of Responsible in Circular Letter No. 17/DIR/CMLD/2016 dated 31 March 2016 on Standard Operating Procedures Investment and for Commercial Loans point 4.1.3.3, which is “Environmental Feasibility Efforts or Environmental Principle of Social and Management Efforts (UKL/UPL) and/or Environmental Impact Analysis (AMDAL) if required by the Environmental Risks local Government, or prerequisites in the Location Permit or Permit to Use Land”. In addition to Management AMDAL, the Company also conducts direct field monitoring to ensure that debtor or developer meets the environmental requirements.
The acceleration of digital banking transformation is a strategy to support the Company's business growth as well as a form of the Company's initiative in minimizing the negative impacts on the environment through reducing the use of paper (paperless). The initiatives are performed by synergizing the digital banking with the Company's superior products. iflow application is a correspondence application that is distributed directly online. The iflow application is a cross- Principle of Sustainable division and/or cross-branch correspondence application with structured distribution. In addition Business Strategy and to having an advantage in distributing structured correspondence, this application also has other Practice benefits including fast distribution flow of correspondence, monitoring of documents or letters sent, and reducing the use of paper (paperless) since letter memos are not necessarily printed out. This application has been implemented at the Company's Head Office since 2011. Furthermore, the Company uses applications, one of which has also synergized the digital banking with the Company's flagship product, which is KPR, through BTN Properti Portal service.
Implementing the BUMDes and Farmer Entrepreneurship Program, which was initiated by the Principle of Priority Ministry of Villages, Disadvantaged Regions and Transmigration (Kemendes PDTT) in collaboration Leading Sector with the Ministry of Agriculture, the Ministry of SOE, and Banking to capitalize the BUMDes Development business in order to encourage rural communities to manage the economy autonomously.
Integrating sustainability aspects into the principle of TARIF (Transparency, Accountability, Responsibility, Independency, and Fairness) and complying with the applicable regulations Principle of Governance starting from labor-related regulations, customer data confidentiality, waste management, to the implementation of Partnership and Community Development Programs that comply with the regulations.
Presenting inclusive and sustainable banking products through TCASH Services - Cermat Company, providing KPR facilities for informal workers (the Company's KPR for Gojek Partners Principles of Inclusion and Micro Enterprises KPR for associations and communities), the development of Micro, Small, and Medium Enterprises (MSME) through KUMK and KUR (People's Business Credit) scheme, development of digital banking services, and various financial literacy programs.
Approaching Regulators and Local Government to facilitate permits to build houses and Principles of buildings, and also approaching the National Land Agency (BPN) and collaborating with students Coordination and from 25 Universities in Indonesia in the Property Entrepreneurship Literacy training program that Collaboration aims to improve their ability to build property business.
Through the Sustainability Report, all information reported relating to economic, social, and Principle of Informative environmental aspects is sufficient, clear, accurate, accountable, and can be accessed by all Communication stakeholders.
In preparing the Sustainable Finance Action Plan, the • ISO 26000 standard Company uses various world-class references, which have • SDGs (Sustainable Development Goals) been applied globally. The references are: • Law No. 40/2007 on Limited Liability Company • 2015-2019 Sustainable Finance Roadmap and POJK that requires companies to perform Social and No. 51/POJK.03/2017 on the Implementation of Environmental Responsibility (TJSL) and Law No. 32 of Sustainable Finance 2009 on Environmental Protection and Management • UNEP-FI (United Nations Environment Program - Finance Initiative) • IFC’s (International Finance Corporation) Sustainability Framework • GRI (Global Reporting Initiative) Standards
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Company’s Strategic Transformation
TRANSFORMATION 1 TRANSFORMATION 2 TRANSFORMATION 3 Survival Period Digital Banking Period Global-Playership Period
ASPIRASI Transformational ASPIRATION Enterprise-Globe World-Class Leading Housing Bank in Indonesia
TRANSFORMATION Products and services LEAP are already operated Triggered by the one internationally Stronger business million housing program
Infrastructure HR
One Million Housing Program
2013 2015 2016 2019 2025
Since 2013, the Company has conducted three stages of 2. Strengthening Infrastructure transformation towards leading housing bank and world- In accordance with the Bank’s policy direction, class banking. With these three transformation stages, strengthening the infrastructure pillars is aimed at the Company set target to become the leading bank in supporting the transformation stages and sustainable housing finance with global quality service. There are three business growth. These strengthened pillars focus on: transformation themes carried out simultaneously by the a. Infrastructure transformation focuses on Company, which are business transformation, infrastructure, increasing Information Technology (IT) capability and human resources. The banking business transformation in supporting the implementation of digital is divided into three stages: first, the survival transformation banking, digitizing process, and big data analytics. stage in 2013-2015; second, the digital banking stage, b. Strengthening GCG pillars by implementing which has been running since 2015; and, third, the global governance, risk and compliance in an integrated partnership transformation stage, which began in 2019, to manner. enable the Company to face global competition. 3. Strengthening Human Resources Strengthening human resources is performed by The Company conduct development activities such as: strengthening ten building blocks and increasing HR 1. Strengthening Business Fields: Consumer Banking capabilities as transformation implementation agents. and Commercial Banking The business strengthening strategy is based on its The Company will continue the strategic transformation segmentation. In the consumer segment, the business process by setting 5 main focuses in order to strengthen development is directed to strengthen KPR position and develop the business, which are: in the mass segment and to expand digital banking 1. Culture and Productivity Improvement services. Meanwhile, the business development in Upholding integrity and avoiding conflicts of interest commercial segment is focused on increasing housing as well as increasing performance-based competence. supply and mapping customer’s value chains. 2. Enhancing the platform for future growth Implementing Business Process Improvement The expansion of KPR-based funding and consistently in the main business process (funding, strengthened cooperation with various agencies lending, and fee-based income). is an initiative undertaken to improve CASA in the commercial segment.
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3. New business models for Retail and Wholesale a. Improving Brand Image and company product Funding to reduce the cost of funding reliability Re-compositing the wholesale funds and building a b. Strengthening resilience because the Company funding strategy with a focus on increasing Third Party has managed all risks (economic, social, and Funds through developing transactional-based low- environmental) more precisely cost funds 4. Digitizing, Digitalizing, and Automating • For Stakeholders: Optimizing digitalization process in order to improve Improving the reputation and trust of shareholders efficiency and effectiveness of quality business and stakeholders process. 5. Partnerships and building ecosystem in the property • For the Community: and housing sector a. Improving the quality of life and beneficial Carrying out partnership initiatives, inorganic growth, environment and building Digital Banks as well as Mortgage b. Improving the economy and living standard of the Ecosystems. people
• For the Government RKAB 2019 Implementation a. Supporting government programs in As a form of compliance with POJK No. 51/POJK.03/2017 strengthening financial inclusion and literacy on the Implementation of Sustainable Finance for Financial b. Supporting leading sector development targets Services Institutions, Issuers, and Public Companies, the and priorities set by the Government Company has implemented RAKB as of 1 January 2019. c. Supporting TOD infrastructure development and Description of the 2019 RAKB implementation is as follows: Tourism Development
Impact of Bank BTN RAKB Strategy Recapitulation of the 2019 RAKB Implementation Implementation It is important that RAKB be implemented in Bank BTN’s The Company fulfills 9 (nine) 2019 RAKB programs and Business Sustainability as it applies the balance concept has made every effort to realize them. However, regarding between People, Planet, and Profit. The benefits of the new program, there are a number of obstacles in the implementing RAKB for stakeholders, the Company, the field, therefore, not all of these programs can be realized community, and the government are as follows: optimally. The achievements of RAKB program and its • For the Bank: obstacles in 2019 are as follows:
Table of Achievement in Percentage of RAKB Implementation as at 31 December 2019 Achievements as per No. Target Description Target Gap 31 December 2019 1 Sustainability Policy and Strategy 85% -15%
2 Institutional Strengthening 100% 0%
3 HR Competence Development 90% -10%
4 KPR Digitalization 100% 0%
5 Non-Bankable Community Financing 100% 0%
6 Increased Financial Inclusion 100% 0%
7 Environmentally Friendly Construction 100% 0%
8 Sustainable Financial Communication Strategy 70% -30%
9 Preparation of Sustainability Report 90% -10%
The Company has evaluated the achievement of all 2019 RKAB programs. Based on the evaluation, there are 3 main obstacles that arise in implementing the RAKB, which come from internal factors that require the Company to strengthen and increase its internal capacity. The obstacles are as follows:
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Table of Obstacles to the Implementation of RKAB 2019 Human Resources Standard Operating Procedure Coordination & Passionate The appointment of Person in Charge There are no Standard Operating The Division’s engagement in the (PIC) of each Division related to RAKB Procedures governing RAKB in Bank BTN implementation of RAKB needs to be is not yet conducted Internal strengthened
The competence development and Adjustment of PMS/SE Division has not Coordination between each PIC skills of RAKB management personnel been done related to RAKB Programs Division for each RAKB Program need to be improved needs to be improved
The Organizational Structure of RAKB Discussions are still underway regarding Monitoring on duties of each management needs to be defined RAKB Regulations/Policies at BTN Internal, PIC Division designated for the more clearly in terms of the scope of whether they are at PMS/KD/SE level implementation of RAKB duties is duties and responsibilities required
Based on this evaluation, the Company has formulated various strategic improvement proposals so that the 2019 RAKB targets can be set. The proposed strategic improvements are as follows:
Table of Proposed Strategic Improvements of RAKB 2019
Increased Capacity for Establishment of Adjustment of SOP of IT & Infrastructure Human Resources Special-RAKB KPIs Division related to RAKB Support
Fulfilling RAKB HR needs, Making KPI as a tool to Preparing Basic Guidelines Infrastructure (ATM, Internet, both in the Task Force/ monitor RAKB strategy that for RAKB Implementation at Mobile Banking, facilities and Department Team and the has been set Bank BTN infrastructure) that supports PIC of each Division RAKB
Improving HR Skill/ KPI is attached to the Adjustment of PMS/SOP of Adjustment of IT Loan (Credit competence of RAKB designated Task Force Team Division related to the RAKB Processing) System related to Manager and Task Force or PIC Division the RAKB program Team
Divisions involved: Divisions involved: Divisions involved: Divisions involved: HCOD, HCMD, TMO, SPD, SPD, TMO, HCMD PPD, CMGD SPD, CSD, ITOD, ITPD, CMLD, SMBD, CSD, ERMD, CRD, PPD, ERMD, CRD CLSD, SPD, CSD CMGD. LCD, CMLD, SMLD, ITPD, ITOD
2020 RAKB
Main Focus and Strategy Initiative of the 2020 RAKB The main focus of 2020 RKAB strategy is the Consolidation of Tools & Policies, Institutional Strengthening, Strengthening HR & Internal Capacity which are implemented into 8 Main Programs with 20 Activities.
Phase I: Consolidation • Preparing tools, policies, and sustainable finance model • Institutional strengthening and establishment/organizing of sustainable finance
Phase II: Stabilization • Strengthening Sustainable Finance HR & internal capacity development • Developing Technical Policies of Sustainable Finance • Strengthening Relations, Communication, and Dissemination of Sustainable Finance
9 Main Programs:
1. Designing and Developing Sustainability Policy and Strategy 2. Institutional strengthening and establishment/organizing of sustainable finance 3. Training and Development of HR Competencies related to Sustainable Finance
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4. Developing Banking Digitalization 5. Distributing Financing to Non-Bankable but Feasible Communities 6. Increased Financial Inclusion 7. Green Construction Financing 8. Implementing Sustainable Financial Communication Strategies 9. Preparation of Sustainability Report
20 Activities: No. Priority Activity Target Indicator of Success Division 1 HR Training on Sustainable Finance Implementation of training and certification related to social LCD, CMLD, (INITIATIVE 3) and environmental aspects SMBD, CRD, RMD, CLSD
2 Capacity Development to prepare Implementation of internal capacity development to make SPD, CSD BTN to be Registered in SRI BTN banks registered in SRI KEHATI Index KEHATI Index (INITIATIVE 2)
3 Provision of RAKB Materials on Implementation of the provision of sustainability material in SPD, LCD Sustainability to New Employees the new employee dissemination module (INITIATIVE 3)
4 Developing Social and a. The existence of social and environmental risk policy as a CRD, RMD, Environmental Risk Policy guide in carrying out bank business activities CMLD, SMBD, (INITIATIVE 1) b. There is a method to map each product and activity to CLSD measure social and environmental risks
5 Increasing in MSME Financing Implementation of increased portion of financing to MSMEs SMBD Portion (INITIATIVE 1) whose business activities are environmentally friendly
6 Implementation of BTN Griya Daya BTN Griya Daya program is implemented CSD Program (INITIATIVE 1)
7 Institutionalization of Social Establishment of institutional beneficiary community CSD Investment (CSR) Beneficiary Communities (INITIATIVE 1)
8 Ensuring that RAKB Establishment of Standard Operating Procedure (SOP) or SE PPD, SPD, CSD, implementation runs smoothly, for sustainable finance implementation CMLD, SMBD, effectively, and efficiently PGSD, CLSD, (INITIATIVE 1) CRD
9 As a preliminary document for The results of social and environmental risk studies CLSD ,CMLD, formulating and drafting social SMBD, CRD, and environmental risk policies RMD (INITIATIVE 1)
10 Establishing a company tool in The existence of output in the form of policies and models of CSD communicating RAKB products & sustainable finance communication strategies activities (INITIATIVE 1)
11 Establishing cultural themes in The design of a sustainable finance cultural themes HCSD communicating products and RAKB activities (INITIATIVE 1)
12 Developing Electronic Money The implementation of electronic money applications for the DCD Applications for Bank BTN wider community that is not limited to BTN customers Customers and Wide Community (INITIATIVE 4)
13 Development of Digital Banking Availability of options for customers to open accounts without DCD through Bookless Account books Opening Service (INITIATIVE 4)
14 Improving Access to Availability of access to financial service points in 19 SQND Banking Financial Services underdeveloped regions in Disadvantaged Regions (INITIATIVE 6)
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No. Priority Activity Target Indicator of Success Division 15 Strengthening Relations, Implementation of relations, communication, dissemination, CSD Communication, Dissemination and ongoing financial campaigns and Campaigns to Bank BTN stakeholders (INITIATIVE 8)
16 Green Construction Financing The implementation of vertical housing development CMLD, CLSD (INITIATIVE 7) financing with the concept of Transit Oriented Development
17 Providing financing to feasible Implementation of financing to the Informal MBR community SMD, HFC but not bankable communities (INITIATIVE 5)
18 Preparing sustainability report to a. Publish or availability of Bank BTN sustainability reports CSD participate in the Sustainability b. Participating the Sustainability Finance Award Event Finance Award (INITIATIVE 9)
19 Strengthening sustainable finance The existence of sustainable finance aspect in KPI SPD, HCMD aspect into the supporting tools of Bank BTN (INITIATIVE 2)
20 Increasing competence or growing Establishment of Property Advisory Service Program that HFC the number of new Developers in provides consulting services in the property sector the field of Property (INITIATIVE 3)
The Company and Sustainable Development Goals
“Creating cities and residential that are inclusive, safe, resilient, and sustainable”
Indonesia is committed to realizing the Sustainable The Company develops feasible and affordable housing Development Goals (SDGs). This commitment is loan (KPR) products for everyone, including strengthened by the issuance of Regulation of the • KPR BTN Micro, which is only for those who have a low President of the Republic of Indonesia No. 59 of 2017 on income and work in the informal sector such as street Implementation of Achieving Sustainable Development vendors, traders in traditional markets, fishermen, and Goals. Furthermore, to implement the Presidential farmers. Regulation, the Minister of National Development • KPR Micro Academy Business Community Planning/Head of Bappenas as the TPB/SDGs Executive Government or ABCG which targets Low-Income Coordinator of Indonesia issued a Regulation of Minister Communities (MBR). on National Development Planning/Head of Bappenas • Subsidized KPR from the Ministry of Public Works No. 7 of 2018 on Coordination, Planning, Monitoring, and Public Housing of the Republic of Indonesia Evaluation, and Reporting of the Implementation of aims at MBR with low-interest and low installments to Sustainable Development Goals. purchase landed house and subsidized flat.
As a national ideal, SDGs need the support and participation of all stakeholders in Indonesia, including from corporates, such as Bank Tabungan Negara. Support from the banking industry is very important because source of development funding is from this financial services institution. The Company participates in achieving the Sustainable Development Goals (SDGs), especially SDG point 11, which is building cities and residential that are feasible, safe, and affordable for everyone by 2030 through housing finance products for the community. This participation is in accordance with the mandate of Law No. 1 of 2011 on Housing and Residential Areas, and Government Regulation No. 14 of 2016 on Implementation of Housing and Residential Areas.
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BTN Subsidized House Loans (KPR), Easy Way to Own a House
Subsidized KPR is a house ownership program from the Ministry of Public Works and Public Housing of the Republic of Indonesia aims at the low-income community (MBR) with low-interest and low installments to purchase landed house and subsidized flat. In this regard, Bank Tabungan Negara is one of the program’s distributors, which is implemented through the Subsidized-BTN KPR products. This product is worth choosing due to its various advantages, which are: • Low down payment, starting from 1% • Fixed interest rate at 5% • Loan tenor is up to 20 years • Subsidy for down payment of Rp4 million* (only for landed houses) • Free insurance premiums and VAT • Extensive collaboration network with developers throughout Indonesia..
The Company’s involvement in distributing Subsidized BTN KPR is a form of support for the achievement of the Sustainable Development Goals (SDGs). This program at least covers 4 (four) SDG objectives, which are:
• The 6th Goal, Clean Water and Proper Sanitation Subsidized BTN KPR provides decent homes and are equipped with MCK (Bathing, Washing, and Toilet facilities). This facility will encourage its inhabitants to behave cleanly in order to create good conditions in the health sector, especially public health.
• The 7th Goal, Clean and Affordable Energy Subsidized BTN KPR provides housing with a lighting source in the form of electricity with affordable subscription prices because the tariff is adjusted to the ability of its residents as MBR
• The 10th Goal, Reduced Gaps Subsidized BTN KPR also helps reduce the housing backlog, moreover this program cooperates with developers throughout Indonesia. The terms of ownership are also very easy: free of insurance premium and VAT, subsidy for down payment of Rp4 million - specifically for landed houses; low down payment, starting at 1%; 5% fixed interest rate; and a loan period of up to 20 years
• The 11th Goal, Sustainable Cities and Residential Subsidized BTN KPR are provided for MBR without discrimination of ethnicity, religion, race, and so on. The development prioritizes the rules of residential that is inclusive, not exclusive. By creating such conditions, it is expected that the Subsidized BTN KPR housing complex will be maintained together of its safety and resilience so that the complex and its inhabitants continue to survive and be sustainable.
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Company’s Contribution to Sustainable Development Goals
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Based on the mapping of activities and programs carried out during this year, of the 17 sustainable development goals, the Company participates in realizing 13 goals as follows:
SDGs Description Company Contribution 1. Without Alleviating poverty in all forms The Company opens jobs to anyone, regardless of ethnicity, religion, and Poverty everywhere race (SARA). By working at the Company, employees receive income that can be used to meet their daily needs so that they can avoid poverty.
2. Without Eliminating hunger, achieving The Company donated staple food and held low-cost markets in several starvation food security and good regions in Indonesia to help the people in need in accessing food. nutrition, and promoting sustainable agriculture.
3. Prosperous Ensuring a healthy life and Through the Community Development program, the Company helps Healthy Life improving the welfare of all providing clean water and sanitation infrastructure to improve health. residents of all ages.
4. Quality Menjamin kualitas pendidikan Through the Community Development program, the Company assists Education yang inklusif dan merata serta Education activities in various fields, including: meningkatkan kesempatan • Implementation of Students Getting to Know the Archipelago program belajar sepanjang hayat untuk • Providing Educational Scholarships semua. • Provision of Facilities and Infrastructure Supporting School Activities
5. Gender Achieving gender equality The Company opens wide opportunities for women to work and have a Equality and empowering women. career with: • Sustainable Job Creation without Discrimination • Abolition of Forced Labor, Child Labor, and Discrimination Practices • Equality in Providing Employee Remuneration and Welfare
6. Clean Water Ensuring the availability and Through various housing financing programs, the Company also provides and Proper management of clean water access/availability of clean water and sanitation that can be utilized by all Sanitation and sustainable sanitation homeowners. The provision of clean water and sanitation is also one of the for all Company's Community Development programs, especially during the dry season.
7. Clean and Ensuring affordable, reliable, Through the Community Development program, the Company helps Affordable sustainable, and modern electrification activities in areas that do not yet have electricity. Energy energy access for all.
8. Decent Work Promoting inclusive and Through the Partnership Program, the Company facilitates revolving funds and Economic sustainable economic to develop MSME in Indonesia, including cooperation with SOEs are Here Growth growth, productive and for the Country, including: comprehensive employment • Community Economic Development through the Village Economic opportunities, and decent Center (Balkondes) work for all • BUMDes and Agricultural Entrepreneurship Program • SimPel Savings (Student Savings) • Property Entrepreneurship Literacy Training
10.Reduced Reducing intra and inter The Company’s existence which is spread to all corners of Indonesia opens Gaps country disparities up employment opportunities and helps local residents to be able to meet their needs. Thus, the income gap between residents, which has been a global problem, can be minimized.
11. Sustainable Creating cities and residential Providing House Loan (KPR) products and supporting the Million Houses Cities and that are inclusive, safe, Government Program including the low-income people to have safe and Residential resilient, and sustainable. affordable housing, and Community Development activities: • • Road Repair and Arrangement • • Construction of Worship Rooms in Various Areas of Indonesia
12. 16. Guaranteeing sustainable The Company uses digitization of banking services and internal business Responsible production and consumption processes to reduce the use of natural resources and waste production Consumption patterns. from administrative activities, including: and Production • Cermat TCASH-BTN services • Development of Electronic Channel
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SDGs Description Company Contribution 13. Handling Taking quick action to tackle The Company carries out energy efficiency in the head office building and Climate Change climate change and its participates in the annual Earth Hour event to raise awareness of energy impacts. efficiency.
15. Land Protecting, restoring, and The Company determines AMDAL fulfillment in housing development, Ecosystem enhancing the sustainable including initiating a one-tree one-house program, as well as carrying use of terrestrial ecosystems, out environmental conservation through the Community Development managing forests sustainably, program. stopping desertification, restoring land degradation, and stopping biodiversity loss
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BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 22 23
BOARD OF DIRECTORS’ REPORT [102-14]
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Pahala Nugraha Mansury President Director
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Dear Distinguished Shareholders and Stakeholders,
Praise to Allah SWT, the Almighty God, for His abundance blessings and gifts, so that Bank Tabungan Negara can go through the year 2019, which 2019 is an was full of challenges, well. The transformation that has been carried out important by the Company since 2013 has fostered an extraordinary spirit for Bank Tabungan Negara’s employees that they are encouraged to work better. Not note for Bank only succeeded in supporting the one million house program launched by BTN’s journey the government in 2015, the Company is also able to survive as the bank with the fifth largest asset in Indonesia, a position that has been achieved since to being able last year. to make future improvement and In line with the high level of housing needs, as a bank focused on housing financing, the Company managed to record a total credit growth of 7.59%, grow from its higher than the industry average. Data from the Financial Services Authority core competency stated that national bank loans only grew by 6.08% in 2019. This achievement shows that the transformation program implemented by the Company is on as a savings the right track. Therefore, this becomes a joint task to continue and maintain bank focusing on the transformation spirit so that it can support sustainable business growth housing finance. for the Company. Sustainability Policy and Strategy
Sustainable finance is the key to success in realizing sustainable development, which is development that harmonizes economic, social, and environmental interests. It is difficult to deny that without the commitment of all parties to implement the sustainable finance, development in Indonesia will continue the old trend, which is more concerned with economic aspects, and less concerned with social and environmental aspects.
Sustainable finance in Indonesia was initiated by the Financial Services Authority (OJK) and stakeholders in the Financial Services Industry (IJK) in 2014, which was marked by the launch of the Sustainable Finance Roadmap on 5 December 2014. This roadmap is the result of OJK’s collaboration with the Ministry of Environment, which contains a presentation on the work plan for a sustainable financial program for the financial services industry under OJK’s supervision.
Three years later, OJK issued regulations on the implementation of sustainable finance through Regulation of Financial Services Authority (POJK) No.51/ POJK.03/2017 on the Implementation of Sustainable Finance for Financial Services Institutions, Issuers, and Public Companies. This regulation becomes the basis for all IJKs to initiate sustainable financial programs in their respective companies. The goal of sustainable finance is to provide adequate funding sources necessary for sustainable development and funding related to climate change as well as integration of Environmental, Social, and Governance (LST) risk management in the financial system..
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In accordance with the Company’s line of business, our sustainable finance report of Bank Tabungan Negara, as sustainability is defined as an active role in providing mandated in POJK No. 51/POJK.02/2017, which came financial products and services for housing, including into force for Bank Tabungan Negara as BUKU 3 Bank the need for subsidized housing for the middle- and on 1 January 2019. In addition to the Subsidized BTN lower-class communities as well as carrying out social KPR, the Company also has a Micro KPR as an inclusive and environmental community concerns in a sustainable financial product, which allows low-income people to manner. The sustainability mission has become part of have decent housing. the Company’s mission, which is housing finance that is always “Caring for the interests of the community and its Sustainable finance is actually not a strange matter for the environment.” [4.a.1)] Company. Because the principles contained in it are in accordance with the vision and mission of the Company. The concrete policy according to the mission is that To implement sustainable finance, the Company will the Company distributes subsidized KPR, which is the optimize cooperation and partnerships with relevant home ownership program from the Ministry of Public stakeholders to develop portfolio and integration Works and Public Housing of the Republic of Indonesia of Environmental, Social, and Governance (LST) risk aiming at Low-Income Communities (MBR), with low management that is appropriate and in accordance with interest rates and low installments to purchase landed the nature of the Company’s business. [4.a.3)] house and subsidized flat. In this program, the Company distributes through Subsidized-BTN KPR products. This The implementation of sustainable finance is carried out product is worthy of being chosen because it has various by the Company by issuing the 2019-2023 Sustainable advantages, which are light down payment, starting from Financial Action Plan (RAKB), which serves as a guide for 1%; fixed 5% interest rate; a tenor of up to 20 years; down all company operations. The RAKB contains Sustainability payment subsidy in the amount of Rp4 million (specifically Policy & Strategy (policies and adjustments to the for landed houses); free of insurance premiums and VAT; structure and role of the organization), adjustments and and the availability of housing area is widespread because launches of the Green Finance Product & Index, and the of cooperation with developers throughout Indonesia. implementation of various Sustainability Programs and Initiatives. By carrying out all programs in RAKB, in 2023, For the Company, the Company’s involvement in the Company is optimistic that it will become the leading distributing Subsidized BTN KPR is a form of support bank in the housing sector and a trusted family financial for the achievement of the Sustainable Development partner that applies sustainable financial principles Goals (SDGs). This program covers at least 4 (four) SDGs to jointly achieve sustainable development goals in objectives, which are the 6th Goal for Clean Water and Indonesia. Proper Sanitation; the 7th Goal of Clean and Affordable Energy; 10th Goal: Reducing Gap; and, 11th Goal for During the reporting year, the Company implemented Sustainable Cities and Residential. [4.a.2)] various program targets in the 2019 RAKB and has evaluated such implementation. Until the end of 2019, The commitment in the distribution of Subsidized BTN the achievement of these targets is as follows: [4.a.4)] KPR is only one example of the implementation of
Achievements as No. Target Description per 31 December Target Gap 2019 1 Sustainability Policy dan Strategy 85% -15%
2 Institutional Strengthening 100% 0%
3 HR Competence Development 90% -10%
4 KPR Digitalization 100% 0%
5 Non-Bankable Community Financing 100% 0%
6 Increased Financial Inclusion 100% 0%
7 Environmentally Friendly Construction 100% 0%
8 Sustainable Financial Communication Strategy 70% -30%
9 Preparation of Sustainability Report 90% -10%
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The Company has conducted an evaluation to identify obstacles that arise in implementing the RAKB, which the cause of gap between the target and realization of come from internal factors that require the Company to the 2019 RAKB. Based on the evaluation, there are 3 main strengthen and increase its internal capacity. [4.a.5)]
Human Resources Standard Operating Procedure Coordination & Passionate
The appointment of Person in Charge There are no Standard Operating The Division’s engagement in the (PIC) of each Division related to RAKB is Procedures governing RAKB in Bank implementation of RAKB needs to be not yet conducted BTN Internal strengthened
The competence development and skills Adjustment of PMS/SE Division has not Coordination between each PIC Division of RAKB management personnel need been done related to RAKB Programs for each RAKB Program needs to be to be improved improved
The Organizational Structure of RAKB Discussions are still underway regarding Monitoring on duties of each management needs to be defined more RAKB Regulations/Policies at BTN PIC Division designated for the clearly in terms of the scope of duties Internal, whether they are at PMS/KD/ implementation of RAKB duties is and responsibilities SE level required
Implementation of Sustainable Finance reached Rp255.80 trillion, an increase compared to that of 2018, which was recorded at Rp237.76 trillion. The Indonesia’s economy in 2019 was slowing down compared achievement was 99.29% of the 2019 RKAP. The increase to that of previous year. This happened due to, among was contributed by the absorption of housing loans, other things, the global economy in 2019 which was also which were Subsidized KPR and Non-Subsidized KPR. slowing down. The trade war of the United States and [5.b.1)] [5.b.2)] China was one of the factors behind the global economic slowdown. With such condition, Bank Indonesia Furthermore, in the reporting year, the Company estimated that Indonesia’s economic growth would reach recorded a total loan growth of 7.59% compared to that 5.1%, a decrease from that of 2018, which reached 5.17%. of industry average. Data from the Financial Services This Bank Indonesia projection was below the macro Authority stated that national bank loans only grew by assumptions submitted by the government in the 2019 6.08% in 2019. KPR distribution and housing finance (PPR) State Budget (APBN), which was 5.3%. [5.c.3)] by the Company reached Rp255.80 trillion, an increase of 7.59% from Rp237.76 trillion in 2018. [5.b.1)] [5.b.2)] In the midst of the less favorable national economic condition, the Company was able to record a positive Regarding the support for the Million Houses Program, performance in 2019. This was inseparable from the the Company extended loans to 188,227 houses. The commitment of the Company’s people in carrying out the realization consisted of channeling subsidized loans to transformation of the Company’s business, which has now 151,166 housing units amounting to Rp19,271,866,519 entered the third stage of the global-playership period, trillion and non-subsidized loans to 37,061 housing units which is the implementation of products and services that amounting to Rp12,498,387,985 trillion. [5.b.1)] [5.b.2)] can be accessed internationally. With such performance, in the reporting year, the The transformation spirit that was followed by Company is still the leader in KPR market in Indonesia strengthening the prudent aspects of business with a share of 40.31% (data as of June 2019). In the encouraged the Company’s achievement, among others, subsidized KPR segment, the Company controls 91.55% the realization of total assets as of 31 December 2019 of the total realization of mass subsidized KPR. (data as of amounting to Rp311.78 trillion, or 93.67% of the 2019 September 2019). [5.b.2)] RKAP of Rp332.85 trillion. Compared to the achievements in 2018, the Company’s assets increased 1.74% from In the midst of the increasingly fierce competition Rp306.44 trillion. [5.b.1)] [5.b.2)] in the banking industry, the implementation of GCG within the Company has become a necessity to achieve BI’s policy of loosening Loan To Value (LTV) and Financing the goal of Moving Beyond Corporate Governance To Value (FTV) regulation as of 1 August 2018 had a to True Business Value. The Company has changed positive impact on Bank Tabungan Negara in 2019. the paradigm of governance implementation from Credit and financing provided by the Company in 2019 being compliance driven to being value driven in all of
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the Company’s business processes. Evidence that an Sustainable Financial Achievement increase in corporate value can be done simultaneously Strategy with improvements in sustainable governance practices can be seen from the Company’s business performance In accordance with the RAKB, the Company is committed to and governance assessments. Since 2014, the score of increasing its sustainable financial portfolio. The Company’s Corporate Governance Perception Index (CGPI) and main focus is the provision of inclusive and sustainable ASEAN CG Scorecards has consistently increased in products that reach various levels of communities including parallel with the Company’s growth. low-income community (MBR). The Company provides subsidized BTN KPR products and Micro BTN KPR products. From the environmental aspect, the Company’s Provision of these products is very important when the sustainable financial implementation is carried out by backlog number is still very high. making various savings in natural resources, such as electricity, fuel and water. Based on data obtained from PT The Company’s efforts to reduce the number of backlogs Binayasa Putra Batara, Menara Unit, as the management have also been carried out by cooperating with the Public of BTN Tower Building, compared to that of previous Housing Savings Management Agency (BP Tapera). In fact, year, among others, the Company managed to save water BTN is ready to become the main partner of BP Tapera usage as much as 4,702 m3, or 4.78% of water use in 2018. - an institution established to replace the Civil Servants Housing Savings Consideration Board (Bapertarum PNS) Furthermore, LST risk management has also been in accordance with the mandate of Law No. 4 of 2016 on implemented by the Company as a step to carry out the Public Housing Savings. For the Company, BP Tapera responsibility for lending through the preparation of a is the right partner for BTN because BTN also has a Sustainability Risk Policy, which includes environmental complete line of business in subsidized housing loans permit requirements, land monitoring, incorporating (KPR). For example, KPR business innovation that has environmentally friendly requirements in financing middle been carried out by the Company by creating Micro KPR class construction including green space provisions and targeting informal MBRs, such as online motorcycle taxi the application of green building criteria for construction drivers and meatball vendors. and preparation of Exclusion Lists for activities that have a negative environmental and social impact. Besides through KPR products and cooperating with strategic partners, the Company also plays a role in the The Company realizes that its presence as a business Financial Inclusive Program initiated by OJK, namely entity is looking for maximum profit. However, behind LAKU PANDAI, with the brand name “Griya BTN” that such matter, the Company has social and environmental utilizes agents with information technology support. In responsibility (TJSL) as stipulated in the Limited addition to payment, Griya BTN also provides savings Liability Company Law. TJSL program is managed and withdrawal facilities that utilize Tabungan Perseroan consistently by the Company through the Corporate Cermat products. In addition, the Company also provides Social Responsibility program and the Partnership and Student Savings (SimPel) savings products to encourage Community Development Program. savings habits since school age.
During the reporting year, the Company disbursed The above achievements were achieved after the loans for the partnership program for MSME at the Company succeeded in mapping, assessing, and amount of Rp21,672 million, which was channeled to 278 managing social and environmental risks well. The fostered partners. The distribution reached 100% of the assessment was followed by conducting social and budget plan. Meanwhile, the realization of distribution environmental risk training to improve human capital of assistance to the Community Development Program understanding of responsible investment practices. amounted to Rp20,072 million, which was distributed to Another strategy is that the Company will prepare a Social communities in 34 provinces through the Company’s six and Environmental Risk Policy. The achievement of these working areas. This distribution reached 91.15% of the priority targets is indicated by the existence of social and budget in 2019 amounting to Rp22,000 million. [5.b.1)] environmental risk policies as a guide in carrying out bank [5.b.2)] business activities, as well as the existence of a method of mapping each product and activity to measure social and environmental risk. [5.c.1)]
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The various strategies taken during 2019, which will be continued in 2020, are the key for the Company to achieve even better performance. Moreover, global and national economic growth in 2020 is predicted to be better than that of 2019. Bank Indonesia, for example, predicted that Indonesia’s economic growth would reach 5.1%, an increase compared to the 2019 projection of 5%. [5.c.3)]
The Company believes that when a better economic growth, accompanied by an increasing level of housing needs - including among the millennials, the opportunity to achieve better performance is wide open. Supported by various service and product innovations, the Company targets to become a bank with global standard services, but still has a local flavor. Innovation that is very compatible with millennial culture, among others, is the launch of applications on smart phones with Android operating system called “BTN Property Mobile”. The existence of this application greatly facilitates the accessibility of customers, especially the millennial generation in applying for Housing Loans. The Company is optimistic that BTN Properti Mobile Android version will be able to dominate the millennial market, especially for those who do not own a house yet. [5.c.2]
It is difficult to deny that market changes and globalization are two challenges faced by the Company as well as opportunities for implementing transformation. The Company will still carry out the final stage of transformation namely the Global Playership Period 2019- 2025 with the aspiration to be able to provide banking products and services that operate internationally.
Our Appreciation The Company’s success in 2019 which was full of challenges was due to the collaboration and support of various parties. Therefore, on this occasion, we would like to express our gratitude to all stakeholders who have been involved and provide support so that the Company continues to grow, develop, and be sustainable. This support is an important capital for the Company to be able to provide better services and products in the future.
On behalf of the Board of Directors Jakarta, February 2020
Pahala Nugraha Mansuri President Director
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BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 30 31
OVERVIEW OF SUSTAINABILITY REPORT
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This sustainability report is the eleventh report published by PT Bank Tabungan Negara (Persero) and is a supplementary of the 2019 Bank Negara Indonesia (Persero) Annual Report. Although published separately, both are a mutually integrated completion. In line with sustainability principles, PT Bank Tabungan Negara (Persero) is committed to publishing similar reports annually. The previous report was published on April 2019. [Pengungkapan 102-51, 102-52]
The publication of this report is the Company’s commitment Financial data in this report use Rupiah, unless stated and compliance with the rules and regulations, among otherwise. The financial data submitted has been audited others, Article 66 C, Law No. 40/2007 concerning Limited by a Public Accounting Firm as required for the Company’s Liability Companies, which requires Limited Liability Annual Report. Reports are presented in two languages, Companies to report on Corporate Social Responsibility namely Indonesian and English. Quantitative data in this (CSR) activities in the Annual Report. In addition, this report are presented using the principle of comparability, report also fulfills the Financial Services Authority Circular for at least two consecutive years. Thus, the stakeholders Letter No. 30/SEOJK.04/2016 concerning the Form and can use this report to analyze the Company’s performance Content of Issuers or Public Companies’ Annual Reports. trends. In addition to the print edition, reports can also In accordance with the circular, it regulates the liability of be viewed and downloaded on the Company’s official public companies or issuers includes reports on social website at www.btn.co.id and environmental responsibility in an annual report or in a separate report, such as a sustainability report. Period, Limitation, and Standard of
The publication of this report also presents the Reports Preparation implementation of Financial Services Authority This report shows the performance of the Company, both Regulation (POJK) Number 51/POJK.03/2017 concerning at the Head Office and all Branch Offices around Indonesia the Implementation of Sustainable Financing for in one year, namely from January 1 to December 31, Financial Institutions, Issuers, and Public Companies. For 2019. Although the consolidated balance sheet covers companies that are categorized as Commercial Banks the financial performance of its subsidiaries, this report Based on Business Activities /BUKU II, the regulation does not present the activities and performance of the has been active as of January 1, 2019. In Article 10 POJK subsidiaries. In accordance with the principles of good Number 51 / POJK.03 / 2017, it states that “ Financial reporting, PT BTN has performed optimally to present Institutions, Issuers and Public Companies must prepare data and information accurately. With these efforts, this Sustainability Reports.” report then has no restatement of information that means to improve the previous report. [102-45, 102-48] According to the aforementioned regulation, a Sustainability Report is a report that is presented to Besides referring to POJK No.51 / POJK.03 / 2017 as the public that contains economic, financial, social, and the latest guidance, this report has been prepared in environmental performance of a Financial Institution, accordance with the GRI Standards issued by the Global Issuer, or Public Company in running a sustainable Sustainability Standards Board (GSBB) - an institution business. Although the publication of sustainability established by the Global Reporting Initiative (GRI) reports is only required after the issuance of POJK No.51 to handle the development of sustainability report / POJK.03 / 2017, BTN has issued a similar report since standards. In accordance with the choices provided in the 2009. The economic, financial, social and environmental GRI Standard, namely Core Choices and Comprehensive performance along with its impacts presented in this Choices, this report has been prepared in accordance report also shows the participation and Bank BTN’s with GRI Standards: Core Choices. In accordance with its support for achieving Sustainable Development Goals status as a financial institution, the report also refers to (SDGs), which has been adopted as Indonesia’s SDGs the Financial Services Sector Supplement (FSSS), which is (http://sdgsindonesia.or.id/). [102-50, 102-52] also published by GRI. [102-54]
As a sustainability-oriented company, BTN conveys all information required by POJK No.51 / 2017, GRI Standards and FSSS in this report. To help the stakeholders find information that is in accordance with the reference, PT
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BTN provides special marks in the form of numbers and indicators before relevant sentences or paragraphs. The letters according to the Contents of the Sustainability content accountability of a report with all three references Report as set out in Attachment II of POJK No.51 / 2017 is submitted at the end of this report, starting from page or the inclusion of GRI Standard disclosure figures or FSSS 159. [102-55]
Report’s Content Determination Process [102-46]
Referring to the GRI guidelines, PT BTN uses 4 (four) steps business activities. in determining the topic and contents of the Report, 2. Sustainability Context: namely: This report reveals the Company’s performance and 1. Identification: identifying topics that are material / impact in the context of sustainability which includes important and setting up boundaries economic, social and environmental aspects. 2. Priority: prioritizing the topics identified inprevious step 3. Materiality: 3. Validation- validating the topics assessed by the This report reveals the economic, social and material environmental impacts of the Company that are 4. Review- conducting a review of the Report after it has relevant to the impact of the Company’s business been published in order to improve the quality of the activities and is significant in the evaluation and following year’s Report. decision making of stakeholders.
Furthermore, the process of determining the contents of 4. Completeness: this report is conducted by considering the compliance This report reveals all material aspects of sustainability with the sustainability reporting principles compiled by and their relevant boundaries so that stakeholders can GRI which include: evaluate the Company’s sustainability performance in the reporting period. 1. Stakeholder Inclusiveness: The Company has identified the Company’s The four steps in determining Report content are stakeholder groups and entered the expectations illustrated in the following flowchart of Report Content and interests of each group related to the Company’s Determination Process.
Tpoic Aspect Disclosure of management apporach + indicator
Step I Step II Step III identification Prioritization validation
Sustainability Context Materiality Completeness
The Engagement of Stakeholders
Step IV Review
Sustainability Context The Engagement of Stakeholders
Furthermore, the report content is reviewed in order to 1. Accuracy meet the 6 (six) quality principles recommended by GRI, The information presented must be accurate and in including: detail so that it can be used by stakeholders to assess the Company’s performance.
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2. Balance The Company’s performance presented must contain 6. Timeliness both positive and negative aspects so that it can be Reports must be published regularly so that assessed rationally and comprehensively. stakeholders are able to decide timely based on 3. Clarity available information. The information presented must be intelligible and open for stakeholders to access. List of Material Topics and Boundaries 4. Comparability The information presented must be consistent and can [102-47] be used by stakeholders to assess the improvement To determine the topic of material and its boundaries, in performance that occur in the Company within a it is done by analyzing materiality. Materiality analysis is certain period, can include data and information for a process to determine material topics that are relevant several years before the reporting period. to the Company’s business activities and have significant 5. Reliability influence and impact on stakeholders. The Company has The report must contain and use the information and mapped the material topics in the materiality chart and processes used in preparing the report, which can be graph as follows. checked and reflects the quality and materiality of the information presented.
LOW Medium High
Kepegawaian Kinerja Ekonomi
Privasi H igh Nasabah Keberadaan Pasar Dampak Ekonomi Tidak Langsung Pendidikan dan Portofolio Produk Pelatihan
Masyarakat Keberagaman dan Kesetaraan Peluang Lokal Pemasaran & Pelabelan Kepatuhan Sosial Ekonomi Kepatuhan Lingkungan Anti Korupsi M edium Non Praktik Pekerja Deskriminasi Pengadaan Anak Keberadaan Serikat Energi Kerja Paksa Air Limbah
Material K3 LOW Signifikasi terhadap persepsi Pemangku Kepentingan
Signifikasi Dampak terhadap Ekonomi , Sosial dan Lingkungan
By prioritizing, relevant sustainability topics are mapped into three levels, namely High, Medium and Low. The material topics presented in this report are topics that are in the High-Medium category and the boundaries in the Company’s supply chain are as follows. [102-47]
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Topics Framework [102- GRI Standards Material Topics Why This Topic is Material 46] Disclosure [102-47] [103-1] Number Inside of Outside of BTN BTN Economic Issues Economic Describing the achievements and performance 201-1, 201-3 √ √ performance of the Company during the reporting year
Market Existence Describing the Company’s commitment to the 202-1 √ √ minimum wage for employees so that they are able to make ends meet.
Indirect Economic Describing the benefits of the Company’s 203-1 √ √ Impacts existence to the community
Praktik pengadaan Menggambarkan komitmen Perusahaan 204-1 √ √ terhadap keberadaan pemasok lokal
Environmental Issues Material Describing the Company’s concern for the 301-1 √ management of material (paper) which in the manufacturing process requires tree trunks as raw material
Energy Describing the Company’s concern for energy 302-1, 302-4, √ management, which the availability are increasingly limited
Water Describing the Company’s concern for the 303-1 √ management of water resources, which the availability are increasingly limited
Effluents and Waste Describing the Company’s concern in managing 306-2 √ √ wastewater so that it would not pollute the environment
Environmental Describing commitments to various 307-1 √ √ compliance environmental regulations so that the Company’s operations do not have a negative impact on the environment
Social Issues Employment Describing the Company’s commitment to the 401-1, 401-2, 401-3 √ importance of employee / HR management
Occupational Health Describing the Company’s commitment to 403-2, 403-3 √ and Safety providing a safe and comfortable workplace
Training and Describing the Company’s commitment to 404-1, 404-3 √ education improving employee competency
Diversity and Equal Describing the Company’s commitment to 405-1, 405-2 √ Opportunities equality of employees to develop without differentiating gender
Non-discrimination Describing the Company’s commitment to 406-1 √ √ respecting mutual similarities
Freedom of Describing the Company’s commitment to 407-1 √ Association giving employees freedom to gather and and Collective organize, including the establishment of trade Negotiations unions or similar institutions
Child Employee Describing the Company’s commitment to the 408-1 √ √ qualifications and age restrictions of workers
Forced or compulsory Describing the Company’s commitment to 408-1 √ labor working hours, remuneration, and so on so that no force occurs at work
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Topics Framework [102- GRI Standards Material Topics Why This Topic is Material 46] Disclosure [102-47] [103-1] Number Inside of Outside of BTN BTN Local Community Describing the Company’s commitment to the 413-2 √ √ involvement of the surrounding community in various programs / activities
Marketing and Describing the Company’s commitment to 417-3 √ √ Branding adhering the good marketing rules, as well as providing product information for customers / consumers
Customer privacy Describing the Company’s commitment to 418-1 √ √ maintaining the confidentiality of customer data
Socio-economic Describing the Company’s commitment to 419-1 √ √ compliance obeying socio-economic regulations, such as employment, fair competition, and non- discrimination
Based on the table above, there are no significant changes regarding the material topic and its boundaries in this report. [102-49]
External Assurance [102-56] Information Access of the Sustainability
GRI recommends the use of external assurance by a Report third party that is independent to ensure the quality and This report is addressed to all stakeholders as one of reliability of the information presented in this report. For the bases for evaluating the performance of PT BTN. this reason, the Company is carrying out assurance on the Stakeholders can conduct an evaluation concerning the Company’s 2019 Sustainability Report. The Company has Company’s participation in performing its responsibilities no other cooperative relationship with assurers other than on environmental, economic and social sustainability the assurance work of the Bank’s Sustainability Report in related to its business practices. The Company provides 2019. The process of determining the assurer is carried out information openly to all stakeholders, and investors with the approval of the Board of Directors, represented and any party relevant to this sustainability report by by the Corporate Secretary. contacting: [102-53]
Feedback PT Bank Tabungan Negara Persero Tbk Corporate Secretary Division To establish two-way communication, the Company Menara BTN Lantai 20th provides a Feedback Page at the end of this report. With Jln. Gajah Mada No. 1 this page, it is expected that the stakeholders can provide Jakarta Pusat, 10130 suggestions, feedback, opinions and others which are Telp : (021) 6336789 ext. 2003 significantly necessary to improve the reporting quality in Fax : (021) 6336719 the future. Email : [email protected]
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Board of Commissioners Statement on Accountability for PT Bank Tabungan Negara (Persero) Tbk 2019 Sustainability Report.
We as the Board of Commissioners of PT Bank Tabungan Negara (Persero) Tbk. have evaluated the contents of this Sustainability Report and declared that the report has covered all sustainability topics that are material to the Company and its Stakeholders. We hold accountability for the truthfulness of this Sustainability Report contents.
Jakarta, February 2020
DEWAN KOMISARIS
Chandra Martha Hamzah President Commissioner/Independent
Ahdi Jumhari Luddin Armand B Arief Independent Commissioner Independent Commissioner
Andin Hadiyanto Eko D Heripoerwanto Heru Budi Hartono (Commissioner) (Commissioner) (Commissioner)
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Board of Directors Statement on Accountability for PT Bank Tabungan Negara (Persero) Tbk 2019 Sustainability Report.
We as Board of Directors of PT Bank Tabungan Negara (Persero) Tbk. has evaluated the contents of this Sustainability Report and declared that the report has covered all sustainability topics that are material to the Company and its Stakeholders. We hold accountability for the truthfulness of this Sustainability Report contents.
Jakarta, February 2020
DIREKSI
Pahala Nugraha Mansury President Director
Andi Nirwoto Elisabeth Novie Riswanti Hirwandi Gafar Direktur IT & Operation Direktur Collection & Asset Direktur Consumer & Commercial Management Lending
Jasmin Nixon L.P Napitupulu Setiyo Wibowo Direktur Distribution & Retail Direktur Finance Treasury Direktur Enterprise Risk Funding & Strategy Management, Big Data & Analytic
Yossi Istanto Direktur Human Capital Legal & Compliance
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 40 41
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 40 41
PROFILE
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General Information of the Company
Name (102-1, 102-5)[3.b] Issued and Fully Paid Capital
PT Bank Tabungan Negara (Persero) Tbk From the Authorized Capital, some 51.71% or equal to 10,590,000,000 (ten billion five hundred ninety million) shares Date of stablishment have been issued and fully paidin to the nominal amount of Rp5,295,000,000,000 (five trillion two hundred ninety five billion 9 Februari 1950 Rupiah), divided into: • 1 (one) Series A Dwiwarna share with nominal value of Rp500 Legal Basis of Establishment (five hundred Rupiah) • Martial Law No. 9 Year 1950 dated February 9, 1950 concerning • 10,589,999,999 (ten billion five hundred eighty nine million nine Amendments to the Postspaarbank Law (Staatblad 1934 No. hundred ninety nine thousand nine hundred nintey nine) series 653, 1937 No. 176 and 197 and 1941 No. 295) (State Gazette B shares, with a total nomiinal value of Rp5,294,999,999,500 of the Republic of Indonesia No. 12 Year 1950) (five trillion two hundred ninety four billion nine hundred ninety • Government Regulation Amendment of Law No. 4 Year 1963 nine million nine hunf\dred ninety nine thousand five hundred dated June 22, 1963 concerning Amendments and Additions Rupiah). to Law No. 36 Year 1953 concerning Bank Tabungan Negara (State Gazette No. 86 of 1953) • Government Regulation No. 24 Year 1992 dated April Stock Indonesia Stock 29, 1992 concerning Adjustment of Legal Status of Bank Exchange Exchange (IDX) Tabungan Negara to State-owned Limited Liability Corporation Bursa Efek Indonesia 17 Desember 2009 (“Persero”). • Deed of establishment of the Bank as Persero No. 136 Dated July 31, 1992 passed before Muhani Salim, S.H., Notary in Ticker Areas of Operations Code (102-4) Jakarta BBTN 34 Provinces in Indonesia Business Line
Commercial Bank, including to conduct Sharia principle-based business Head Office Address (103-3)
Menara Bank BTN Perubahan Nama dan Tanggal Efektif Perubahan Jl. Gajah Mada No. 1 Jakarta 10130, Indonesia Nama Perusahaan
Established as “Postspaarbank” in 1897, then changed its name to Tyokin Kyoku or Savings Office in 1942. It again changed its name to 62 21 6336789 [email protected] Taboengan Pos Office in 1945. In 1950, the name was changed to “Bank Tabungan Pos” by the Government of Republic of Indonesia. Effective 62 21 6346704 www.btn.co.id in1963, the Company changed its name to Bank Tabungan Negara. Since 1992, it has officially become Limited Liability Corporation (Persero).
Office Networks and Markets Served Activities, brands, products, and services (102-2) [3.d] (102-4, 102-6) [3.b] [3.c.4)]
Based on the Bank’s Articles of Association’s Article 3, the scope of 1 Kantor Pusat the Bank’s activities is to carry out commercial banking activities in accordance with applicable laws and regulations, including conducting 78 Kantor Cabang bank activities based on sharia principles. 326 Kantor Cabang Pembantu 358 Kantor Kas Ownership and legal form 52 SOPP (System on-line Payment Point/Kantor Pos online) (102-5) [3.c.3)] 2.159 ATM
1. The Government of the Republic of Indonesia : 60,00% 2. Public – Domestic : 16,82% Total Employees Contact Center 3. Public – Foreign : 23,18% 11.647 orang Call Center : per 31 Desember 2019 Authorized Capital 1500-286
Rp10,239,216,000,000,- (ten trillion two hundred thirty nine billion two Media Sosial : hundred sixteen million Rupiah)) divided into: BankBTNcoid BankBTN • 1 (one) Series A Dwiwarna share with nominal value of each share of Rp500 (five hundred Rupiah). @BankBTNcoid Bank BTN • 20,478,431,999 (twenty billion four hundred seventy eight million four hundred thirty one thousand nine hundred and ninety nine) Series B shares with a nominal value of each share of Rp500 (five hundred Rupiah).
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 42 43
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 44 45
Milestone
1897 1953 1949
1945 The Company Inaugurated as a legal entity under was founded The Government under the name the Ministry of of the Republic of Transportation and “Postspaarbank” Indonesia reopened in 1897 during pemitted to open a Kantor Taboengan Branch Office. the Dutch Indies Pos under the name The Government Government. Bank Tabungan Pos. of the Republic of Indonesia took over 1963 1942 “Tyokin Kyoku and founded “Kantor 1950 Taboengan Pos. 1946 Adopted a new name The Company All Taboengan Pos “Bank Tabungan was taken over offices were occupied Negara” and by the Japanese by the Dutch and The name was transferred to become Government who temporarily ceased changed to “Bank under the Ministry of changed its name to operations. Tabungan Pos” by Central Bank Affairs. “Tyokin Kyoku” or the Government “Kantor Tabungan. of the Republic of Indonesia.
1965 1968 1974 1986
Obtained credit from IBRD / World Bank in the amount of USD 266,550,000 which was signed by the Government of Republic of Integration of the The single bank was Assigned by the Ministry of Indonesia. State’s Commercial separated and reopened Finance to public housing Banks and Bank as Bank Tabungan Negara, financing. Tabungan Tabungan abbreviated to BTN. 1989 Negara into Central Bank. 1876 1971 A single bank entity was established under the name Bank Negara Indonesia Issued Bonds for the consisting of Bank first time and the Tabungan Negara, commencement of Realization of KPR BTN (BTN commercial bank Bank Indonesia, Bank BTN cooperated with Perum Housing Loan) for the first operations. Koperasi Tani, and Pos and Giro to implement Nelayan, Bank Umum time in Tanah Mas Housing, Tabanas (National Savings) Semarang. Negara, BNI 1946 dan program and Taska (Term Bank Dagang Negara. Insurance Savings) program.
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1992 2002
Effectively became 2009 a Limited Liability With an online realtime Corporation or PT system, based on Persero. IBM-AS400, information technology was 1994 implemented in all branch offices. Obtained permission Housing Loan (KPR) to operate as a Foreign 2008 Securitization through Exchange Bank. the first Asset Backed 2005 Securities (KIK EBA) Collective Investment 2001 Contract in Indonesia.
The Company Obtained ISO 9001- conducted an Initial 2000 Certification Public Offering (IPO) Establishment of for mid-term credit and was listed on Sharia Unit Business services with service the Indonesia Stock Recapitalization by the and opened the First pattern 1-5-1. Exchange (Go Public). Government of the Sharia Branch Office at Republic of Indonesia Harmoni, Jakarta. with a value of Rp13.6 Trillion.
2012 2014 2016 2018
Developing Digital Ecosystems to Support Sustainable Business The Company The Company exercised The Company continued the Rights Issue. and SMF signed transformation Indonesia’s biggest agenda, namely securitization. “Digital Banking 2013 Period. 2019 2015 2017
The Company continued the The Company transformation phase Became the transformed into of the digital banking Housing Market a leading housing period by developing The Company Maker and financing bank, various digital-based participated in the strengthened its offering world class products and services, success of “One position as the 5th banking. one of which was the Million Houses for Largest Bank. opening of the Smart Indonesian People. Branch in Harmoni, Jakarta.
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Brief History
The existence of PT Bank Tabungan Negara (Persero) Tbk Eight years later, Bank Tabungan Negara was approved which is ,hereinafter, referred to as the Company or “we”, by Bank Indonesia to conduct general banking activities begins with the establishment of Postpaarbank in 1897 based on sharia principles through letter No. 6/1350 / in the era of the Dutch East Indies. During the Japanese DPbS on December 15, 2004. The Company began the colonial empire, in 1942, Postpaarbank was taken from sharia operations on February 14, 2005 with the operation the Dutch government, and the Japanese government of the first sharia branch in Jakarta - Harmoni. changed it to Tyokin Kyoku or Kantor Tabungan. After Indonesia’s declaration of independence, the government Appointed as a mortgage institution (KPR) in 1974 of the Republic of Indonesia took turn to acquire Tyokin and realizing the first project in Tanah Mas Housing, Kyoku, and established the Kantor Taboengan Pos. Semarang. In 1976, Bank Tabungan Negara securitized the first mortgage in Indonesia in 2009. The Company In 1946, the Kantor Taboengan Pos stopped operating securitized assets through the recording of Collective due to the occupation of the Dutch. However, three years Investment Contract transactions – Asset-Backed later, the Indonesian government regained control of the Securities (KIK-EBA). The Company made another history Kantor Taboengan Pos and reoperated the bank with when conducting an Initial Public Offering (IPO) and the name Bank Tabungan Pos RI. A year later, the bank listing on the Indonesia Stock Exchange on December was changed to Bank Tabungan Pos in accordance with 17, 2009. Emergency Law No. 9 of 1950 on February 9, 1950. This date is then used as the Company’s day. After operating After becoming a public company, the issuer with BBTN for 13 years, based on Government Regulation in lieu of Stock Symbol, BTN business grows and their operational Law No. 4, in 1963, the name of Bank Tabungan Pos was area becomes larger. As of December 31, 2019, this changed to Bank Tabungan which has been used to date. State-Owned Enterprise (SOE) covered market share in 34 provinces in Indonesia. In running its business In 1974, the Company was appointed by the government operations, in addition to the Head Office, the Company as the exclusive institution that distributes mortgage (KPR) has 78 Branch Offices, 326 Sub-Branch Offices, 358. Cash for the lower-to-middle class. Subsequently, on April 29, Offices, 52 SOPP (Online Payment Point Systems / Post 1989, the Company began operating as a state-owned Office Online), 2,046 ATMs, and 23 mobile cash spread commercial bank. Based on Government Regulation in Indonesia. No. 24 of 1992, the status of Bank Tabungan Negara was changed to a state-owned limited liability company (Persero). In its development, based on the decision of the Board of Directors of Bank Indonesia No. 27/55 / KEP / DIR on September 23, 1994, the Company has been authorized as a foreign exchange bank.
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Vision, Mission, and Corporate Value (102-16) [3.a]
Leading,Vision and trusted in facilitating the housing sector and family financial services.
Mission
Akselerator dan Integrator di bidang perumahan Bank BTN dapat memberikan kontribusi secara menyeluruh pada semua kegiatan sektor perumahan dari hulu sampai dengan hilir
Mitra Keuangan Keluarga Dapat memberikan kontribusi secara menyeluruh pada semua kegiatan di sektor perumahan dan sekaligus sebagai jangkar untuk melayani kebutuhan nasabah lainnya
Misi
Play an active role in supporting the housing Provide superior services in financing to the Increase competitive advantage through sector, both from the supply side and demand housing sector and family financial needs. innovation in digital product development, side, which is integrated in the housing sector services and strategic networks. in Indonesia.
Prepare and develop qualified, professional Increase stakeholder value by focusing on Care for community, social and environmental and high- integrity human capital. increasing profitability growth in accordance interests in a sustainable manner. with prudential and good corporate governance principles.
The determination of the Company’s Vision and Mission is carried out periodically based on the mechanism for preparing the Bank’s Long Term Plan (RJP). The Company’s Vision and Mission have been reviewed and approved in the Blueprint of the BTN Bank Strategic Plan.
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Corporate Values (102-16) [3.a]
Corporate culture is built on values, becoming principles that are believed to be good and right in carrying out work, and become a guideline for every person to behave, act and make decisions to achieve common objectives. Corporate culture values direct the behavior of members of the organization and establish the basis for determining organizational rules, policies and systems (“the way we do things around here”).
CORPORATE CULTURE VALUES
Synergy Building synergic cooperation with all stakeholders based on a sincere, open-minded attitude and encouraging productive collaboration by upholding mutual trust and respect to achieve common goals.
Integrity Consistency in mind, manner, matter in line with the Company’s rules, code of professional conduct, and commendable principle of truth.
Inovasi Continual development of new ideas and continuous improvements that add value to the Company.
Professionalism Visionary, competent in each field, always willing to move ahead using the latest technology to produce the best performance.
Spirit to Achieve Excellence Demonstrate passion and strong commitment to achieve the best results and provide services that exceed customer expectations (internal and external) by stressing the importance of quality in each activity, as well as in calculated risks.
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Each Corporate Culture Value has 2 (two) Main Types of Behavior which are the reference point for all Company Personnel (Bitniz). The 10 (ten) main types of behavior are:
SYNERGY INTEGRITY INNOVATION
• Be sincere, open and show • Be consistent and • Respond to change. productive collaboration. disciplined. • Be creative and innovative • Show mutual trust and respect. • Be honest and dedicated. in making value-added improvements.
PROFESSIONALISM SPIRIT TO ACHIEVE EXCELLENCE
• Be competent, show • Be enthusiastic, proactive and intrapreneurship and be never give up. responsible. • Be effective, efficient and prioritize • Work smart and be result oriented. customer satisfaction.
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Struktur Organisasi [102-18]
Shareholders
Board of Director
President director
Chief Credit Officer Commercial Banking Consumer Banking Distribution Network (CCO) IT & Operations (CIO) Sharia Supervisory Board Commercial Funding & IT Strategic Planning & Subsidized Mortgage Retail Risk Services Digital Channel Development
Non Subsidized Mortgage & Commercial Lending Consumer Lending Service Quality & Commercial Risk IT Operations Distribution
SME Lending Retail funding & Services Consumer Operations & Bussinis Collection Support Regional Office
Corporate & Loan Asset Management Credit Operations Syndication Wealth Management
Brand Office & Priority Procerument & General Legal Banking service
Sharia
Sharia Brand Office
Risk Management Credit Policy Product Committee Committee Committee
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Board of commissioners
Strategy Compliance Finance & treasury (CFO) & Risk
Strategi human capital Strategy & Treasury performance management Internal Audit HC Management & Audit committee Culture specialist Transformation Finance & accounting Management Office
Hc Organization Corporate Dev & Policy Remuneration Institutional Compliance & Secretary & Nomination banking Governance Committee
Learning Culture
Policy & procedurs Risk Monitoring Committee
Enterprise & Risk Management
: Line of Command *) Chief Financial Officer **) Chief Information Officer : Line of Communication/Information
Human Capital Asset Liability Credit Committee IT Steering Committee Committee Committee
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The Company’s Business Activities (102-2) [3.d] In accordance with the Deed of Resolutions of the General Meeting of Shareholders regarding PT Bank Tabungan Negara (Persero)’s Articles of Association Number 51 dated March 24, 2015, the Company carries out business activities as explained below; while a full description of the Company’s products or services during 2019 is presented in the Annual Report, Chapter Profile, page 73-80.
Non Housing (KPR) and Housing and Consumer Products Commercial Banking
Product: Product:
1. Consumer Loans are divided into four namely 1. Commercial Loans are divided into three namely Subsidized Housing Loan, Non-Subsidized Housing Construction Loans; Micro, Small, and Medium Loan, Other Housing Loan, and Consumer Loans Enterprises Loan, and other Corporate Loans 2. 2. Customer Deposits are divided into three namely 2. Customer Deposits are divided into Demand Demand Deposits, Savings, and Time Deposits Deposits and Time Deposits
Service: 1. Mortgage: Home or residential-based financing Service: services 1. Commercial Loan: Commercial loan business Consumer Loans: services including SME construction loans: a. Consumer and personal financing services Financing services for the micro and small segments b. ii. Consumer loan business development 2. Commercial & Institutional Funding: Funding services from the housing value chain services and products oriented to corporate and 2. Consumer Funding: institutional customers a. Fund product services and services oriented to individual customers b. Wealth management business development
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Sharia Banking Treasury & Asset Management
Product:
1. Financing products are divided into two, which are 1. Managing Bank liquidity Sharia Consumer Financing and Sharia Commercial 2. Managing asset management and liabilities Financing 2. Funding products are divided into three, which are Sharia Demand Deposit, Sharia Savings, and Sharia Time Deposit
Service: 1. Sharia Business Entity: Sharia products and services that create 2. The Company’s business synergy
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Areas of Opetions and Markets Served (102-2, 102-4, 102-6) [3.c.4)]
Pada tahun pelaporan, Perseroan hanya beroperasi di 1 (satu) negara, yaitu Indonesia. Kantor Pusat Perseroan di Jakarta dengan jaringan kantor tersebar di 34 provinsi di Indonesia.
KALIMANTAN
SUMATERA
JAWA BALI DAN NUSA TENGGARA
SUMATERA JAWA KALIMANTAN
Regional Ofices 1 Regional Ofices 4 Regional Ofices -
Branch Offices 12 Branch Offices 47 Branch Offices 7
Sub-Branch Offices 58 Sub-Branch Offices 213 Sub-Branch Offices 21
Cash Offices 42 Cash Offices 269 Cash Offices 15
Outlet Syariah 15 Outlet Syariah 60 Outlet Syariah 5
Outlet Prioritas 8 Outlet Prioritas 31 Outlet Prioritas 5
Post Office 700 Post Office 1.623 Post Office 299
ATM 292 ATM 1.538 ATM 116
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SULAWESI JARINGAN KANTOR 2017 2018 2019 Regional Ofices 5 6 6 Branch Offices 75 76 78 Sub-Branch 279 304 326 Offices Cash Offices 485 468 358 Payment Point 32 48 52 Cash Office Equivalent 2.951 2.948 2.950 Service Offices Mobile Cash Units 22 23 23 PAPUA DAN Total Conventional 3.852 3.876 3.793 MALUKU Office Networ Sharia Branch Offices 24 24 25 Sharia Sub-Branch 42 48 53 Offices Sharia Cash Offices 7 8 7 Payment Point Syariah 13 13 12 Total Jaringan Kantor 86 93 97 Syariah ATM 1.964 2.126 2.159
BALI DAN NUSA SULAWESI TENGGARA MALUKU DAN PAPUA
Regional Ofices 1 Regional Ofices - Regional Ofices -
Branch Offices 6 Branch Offices 3 Branch Offices 3
Sub-Branch Offices 19 Sub-Branch Offices 12 Sub-Branch Offices 3
Cash Offices 18 Cash Offices 9 Cash Offices 5
Outlet Syariah 5 Outlet Syariah - Outlet Syariah -
Outlet Prioritas 2 Outlet Prioritas 2 Outlet Prioritas 3
Post Office 126 Post Office 141 Post Office 61
ATM 121 ATM 62 ATM 30
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Share Ownership Composition as of December 31, 2019 [102-3, 102-4, 102-6] [3.c.4)] Keterangan 2019 2018 2017
I. CONVENTIONAL NETWORK Regional Ofices 6 6 5
Branch Offices 78 76 75
Sub-Branch Offices 326 304 279*
Cash Offices 358 468* 485
Sub-Branch Equivalent Service Offices 3 3 3
Cash Office Equivalent Service Offices 2.948 2.948 2.951*
Payment Point 52 48 32
Mobile Cash Units 23 23 22
Total 3.788 3.876 3.852*
II. SHARIA NETWORK Sharia Branch Offices 25 24 24
Sharia Sub-Branch Offices 53 48 42*
Sharia Cash Offices 8 8 7
Sharia Payment Points 13 13 13
Total 99 93 86*
III. NETWORK ATM 2.159 2.126 1.964
Share Ownership Composition as of December 31, 2019 (102-5)[3.c.3)] Number of Number of No. Public Shareholders % Shareholders Shares (in share) 1 Government of The Republic 1 6.354.000.000 60,00%
2 Public
• Public – Local 17.895 1.781.005.375 16,82%
• Public – Foreign 580 2.454.994.625 23,18%
TOTAL 18.476 10.590.000.000 100,00%
Scale of the Company [102-7] [3.c.1)] Description Unit 2019 2018 2017 Interest Income and Income from Profit Sharing - Net Millions of Rupiah 8.961.801 10.089.177 9.340.940
Total Assets Millions of Rupiah 311.776.828 306.436.194 261.365.267
Total Equity Millions of Rupiah 23.836.195 23.840.448 21.663.434
Total Liabilities Millions of Rupiah 269.451.682 263.784.017 223.937.463
Total Employees Persons 11,647 11.810 10.690
Total conventional network Office Unit 3.788 3.848 3.818
Total sharia network Office Unit 99 93 84
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Description Unit 2019 2018 2017 Total products/services available Product/Services 4 (four): 4 (Four) 4 (Four) Category 1. Housing Loan 1. Housing Loan 1. Housing Loan and Consumer and Consumer and Consumer Banking Banking Banking 2. Housing and 2. Housing and 2. Housing and Commercial Commercial Commercial Banking Banking Banking 3. Sharia 3. Sharia 3. Sharia Banking Banking 4. Banking 4. 4. Treasury Treasury & Asset Treasury & Asset & Assets Management Management Management
Information regarding Employees (102-8)[3.c.2)]
As of December 31, 2019, the number of employees of the Company was 11,647 employees, a decrease by 163 people or 1.38% compared to 2018 as many as 11,810 employees. Employee data in this Report was obtained from the database of Directorate of Strategic Human Capital as of December 31, 2019 so that its accuracy can be accounted for. Complete information about employees is presented in the following tables:
Employee Demographics by Gender 2019 2018 2017 Gender Percentage Percentage Percentage Total Total Total (%) (%) (%) Male 6,343 54.46% 6.465 54,74% 5.797 55,96%
Female 5,304 45.54% 5.345 45,26% 4.563 44,04%
Total 11,647 100.00% 11.810 100,00% 10.360 100,00%
Employee Demographics by Age and Gender (employees) 2019 2018 2017 Age L P Total (%) L P Total (%) L P Total (%) ≥ 51 466 227 693 5.95% 443 230 673 5.70% 465 220 685 6.61%
31–50 2,313 1,753 4,066 34.91% 2,129 1,488 3,617 30.63% 1899 1223 3122 30.14%
≤ 30 3,564 3,324 6,888 59.14% 3,893 3,627 7,520 63.67% 3433 3120 6553 63.25%
Total 6,343 5,304 11,647 100.00% 6,465 5,345 11,810 100.00% 5797 4563 10360 100.00%
M = Male / F = Female
Employee Demographics by Position and Gender
Organization 2019 2018 2017 Level L P Total (%) L P Total (%) L P Total (%) Level 22 2 2 4 0.03% 2 2 4 0.03% 1 3 4 0.04%
Level 19 s/d 21 93 19 112 0.96% 88 18 106 0.90% 82 17 99 0.96%
Level 15 s/d 18 910 300 1,210 10.39% 852 277 1,129 9.56% 755 238 993 9.58%
Level 13 s/d 14 1,503 819 2,322 19.94% 1,561 792 2,353 19.92% 1,613 751 2,364 22.82%
Level 11 s/d 12 2,950 2,818 5,768 49.52% 3045 2,856 5,901 49.97% 2,697 2,442 5,139 49.60%
Level 8 s/d 10 885 1,346 2,231 19.16% 917 1,400 2,317 19.62% 649 1,112 1,761 17.00%
Total 6,343 5,304 11,647 100.00% 6,465 5,345 11,810 100.00% 5,797 4,563 10,360 100.00%
M = Male/ F = Female
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Employee Demographics by Education Level and Gender 2019 2018 2017 Education Level L P Total (%) L P Total (%) L P Total (%) Master’s Degree 303 111 414 3.55% 312 110 422 3.57% 319 113 432 4.17%
Bachelor’s Degree 4,895 3,651 8,546 73.38% 4,957 3,644 8,601 72.83% 4,461 3,219 7,680 74.13%
Diploma 847 1,074 1,921 16.49% 857 1,084 1,941 16.44% 755 888 1,643 15.86%
High School 298 468 766 6.58% 339 507 846 7.16% 262 343 605 5.84%
TOTAL 6,343 5,304 11,647 100.00% 6,465 5,345 11,810 100.00% 5,797 4,563 10,360 100.00%
M = Male / F = Female
EmployeeDemographics by Employment Status and Gender
Employment 2019 2018 2017 Status L P Total (%) L P Total (%) L P Total (%) Permanent 6,150 5,069 11,219 96.33% 5,649 4,506 10,155 85.99% 4921 3859 8780 84.75% Employees
Contract Employees 193 235 428 3.67% 816 839 1,655 14.01% 876 704 1580 15.25%
Outsource Without 6,343 5,304 11,647 100,00% 6,465 5,345 11,810 100,00% 5797 4563 10360 100,00%
M = Male / F = Female
Employee Demographics by Working Period and Gender
Range of work 2019 2018 2017 period L P Total (%) L P Total (%) L P Total (%) > 30th 127 42 169 1,45% 96 25 121 1,02% 55 21 76 0,73%
25th - 30th 369 251 620 5,32% 355 253 608 5,15% 425 235 660 6,37%
20th - 25th 765 194 959 8,23% 788 234 1.022 8,65% 651 276 927 8,95%
15th - 20th - - - 0,00% 148 21 169 1,43% 372 46 418 4,03%
10th - 15th 232 345 577 4,95% 129 275 404 3,42% 27 223 250 2,41%
5th - 10th 1.562 1.882 3.444 29,57% 1.158 1.672 2.830 23,96% 925 1.360 2.285 22,06%
0 - 5th 3.288 2.590 5.878 50,47% 3.791 2.865 6.656 56,36% 3.342 2.402 5.744 55,44%
TOTAL 6.343 5.304 11.647 100,00% 6.465 5.345 11.810 100,00% 5.797 4.563 10.360 100,00% M = Male / F = Female
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Supply Chain (102-9) Significant Changes in the Company (102-10) In running business operations, Bank Tabungan Negara cooperates with suppliers/vendors due to the Company In the reporting period, there were significant changes cannot internally fulfill its needs, both goods and services. in Bank Tabungan Negara in relation to the location or While the primary needs of the Company’s services business operations, including new branch offices from 76 include contracting services, planning consultant services, units in 2018 to 78, sub-branch offices from 304 in 2018 audit services, appraisal services, other consulting to 326, payment points from 48 in the year 2018 to 52, services, services forwarding and porting of letters, and the decrease in the number of cash offices from 468 security services, cleaning services, secretarial services, units in 2018 to 358. As for the sharia network, the number and archives or documentation. (103-1) increases for the branch office which is 24 branch offices in 2018 to 25, sharia sub-branch office number increases The Company is committed to cooperating with local from 48 in 2018 to 53. suppliers, which in this report are suppliers that are geographically domiciled in Indonesia. If the needs of Prevention Approach or Prevention goods and services cannot be met by local suppliers, the Company then appoints foreign suppliers that are not Principle (102-11) geographically domiciled in Indonesia. (103-2) The Company deals with various risks in running its daily operations. If the management is not performed properly, The Company’s commitment to prioritize local/domestic these risks will intervene the achievement of targets as suppliers in accordance with the Regulation of the specified in the Bank’s Business Plan (RBB). To minimize Minister of State-Owned Enterprises of the Republic the impact that may arise from various risks, the Company of Indonesia Number PER-15 / MBU / 2012 concerning has a policy guideline in the field of risk management Amendment to the Regulation of the State Minister which is the Risk Management Policy Guidelines (PKMR) of State-Owned Enterprises Number PER-05 / MBU / that contain the minimum requirements required by 2008 concerning General Guidelines for Procurement of Bank Indonesia/Financial Services Authority Regulations. Goods and Services of State-Owned Enterprises. As a The Company’s risk management system is designed State-Owned Enterprise (BUMN), Bank Tabungan Negara to support the Company in realizing sound business is a user of goods and services, which in Article 2, are management and achieving sustainable growth, so as to required to comply with the following provisions, “Users optimize stakeholder value. of Goods and Services prioritize the use of domestic products, designs and national engineering and provide In addition, the Company also has a Risk Management an opportunity for small businesses, as long as the quality, Policy Manual (PKMR) which includes provisions required price, and purposes are accountable.” (103-3) by Bank Indonesia / Financial Services Authority Regulations. A review of the PKMR has been conducted In accordance with the ministerial regulation above, in the for at least once in a year by the Board of Directors and the procurement of goods and services, the Company is in Board of Commissioners to improve the risk management line with the principles of efficient, effective, competitive, policy guidelines. The internal policy review is also carried transparent, fair, open, and accountable. Meanwhile, out in order to comply with the current provisions by in managing outsourcing, the Company complies with conducting a gap analysis and accommodating best Bank Indonesia Regulation (PBI) Number 13/25/2011, on practices commonly used in the banking industry that December 9, 2011, regarding the Submission of Partial aims to improve the quality of risk management practices. Work Implementation to Other Parties, the Company has not engaged outsourcing activities to other parties. (103- 3, 204-1)
8 types of the Scope of Risk Scope of Risk Management Company’s Risk Management • Credit Risk • Legal Risk a. Active supervision by the Board of Commissioners and the Board of • Market Risk • Strategic Risk Directors • Liquidity Risk • Compliance Risk b. Adequacy of policies, procedures and boundaries • Operational Risk • Reputational Risk c. Adequacy of the identification, measurement, monitoring, and control of Risk as well as Risk Management information systems d. A comprehensive internal control system
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External Initiatives (102-12)
The company is committed to continuously achieving as certification. Commitment in providing the best customer trust and satisfaction. This is realized as the goods and services based on various quality standards Company provides the best quality goods and services has received appreciation from various parties, which is so that it is in line with customer expectations. In an manifested through the awarding. effort to realize customer expectations, Bank Tabungan Negara follows various guidelines developed by external parties that apply nationally and internationally, such 3
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Award Name Award Name: Award Name Award Name Award Name 4th Indonesia Living 2nd Satisfaction Loyalty 2nd Satisfaction Loyalty 2nd Satisfaction Loyalty 2nd Satisfaction Loyalty Legend Companies Engagement Awards Engagement Awards Engagement Awards Engagement Awards Award 2019 2019 2019 2019 2019 Category Category Category Category Category Living Legend Company Peringkat II Satisfacation Peringkat II Satisfacation Peringkat II Satisfacation Peringkat I NPS (Net Excellence Housing Bank Umum Konvensional (Teller) Bank Umum (Satpam) Bank Umum Promoter Score) Bank Development Initiative Buku 3 Konvensional Buku 3 Konvensional Buku 3 Umum Konvensional Organizer Organizer Organizer Organizer Buku 3 Warta Ekonomi Infobank Infobank INFOBANK Organizer Date Date Date Date Infobank 18 Januari 2019 14 Maret 2019 14 Maret 2019 14 Maret 2019 Date 14 Maret 2019
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Award Name Award Name Award Name Award Name Award Name Indonesia WOW Brand 8th Anugerah BUMN 8th Digital Brand Award 8th Digital Brand Award 8th Digital Brand Award 2019 2019 Category Category Category Category Category 2nd Best Overall KPR The Best Digital Brand Peringkat I Deposito Bank Gold Champion Category Big Corporate Kategori Bank Umum Konvensional 2014-2018 KPR Bank Umum Konvensional Mortgage Hubungan dengan Organizer Umum Konvensional Organizer Organizer Stakeholder Terbaik I Infobank & Isentia Organizer Infobank & Isentia Markplus, Inc. Organizer Date Infobank & Isentia Date Date BUMN Track 16 Mei 2019 Date 16 Mei 2019 14 Maret 2019 Date 16 Mei 2019 28 Maret 2019
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Award Name Award Name Award Name Award Name Award Name 8th Digital Brand Award 8th Digital Brand Award 8th Digital Brand Award 8th Digital Brand Award 8th Digital Brand Award Category Kategori Category Category Category Peringkat I Tabungan Peringkat I Kartu Debit Peringkat II Wealth Bank Peringkat I Bank Umum Top Kredit KPR 2019 Bank Umum Konvensional Bank Umum Konvensional Umum Konvensional Konvensional Kategori Perbankan Organizer Organizer Organizer Organizer Pilihan Millenial Infobank & Isentia Infobank & Isentia Infobank & Isentia Infobank & Isentia Organizer Date Date Date Date Warta Ekonomi 16 Mei 2019 16 Mei 2019 16 Mei 2019 16 Mei 2019 Date 28 Juni 2019
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Award Name Award Name Award Name Award Name Award Name 7th Properti Indonesia Indonesia Enterprise Risk Indonesia Good Top Finance 2019 Top Finance 2019 Award 2019 Management Award - III Corporate Governance Category Category Category 2019 Award 2019 Top Bank 2019 Buku III Top CEO Bank 2019 The Biggest Mortgage Category Category Organizer Organizer Portfolio 2nd - The Best Risk 3rd The Best Indonesia Top Business & Asia Top Business & Asia Organizer Management - 2019 GCG Implementation Business Research Center Business Research Center Properti Indonesia Category Bank Company - 2019 Kategori Public Date Date Date (Buku - III) Bank Company - Buku III 28 Agustus 2019 28 Agustus 2019 10 Juli 2019 Organizer (Aset > 100T) Economic Review Organizer Date Economic Review 3 Agustus 2019 Date 23 Agustus 2019
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Award Name Award Name Award Name Award Name Award Name Award Name Indonesia Best 14th Annual BHUN Award Indonesia Best Brand Iconomics RRI Indonesia Best Brand Issuers Award 2019 Indonesia Property & Category Award - Best Brand Financial Awards Award - Best Brand Category Bank Award 2019 BUMN Koordinator Platinum 2019 2019 "Millenials Platinum 2019 The Best Issuers Category Tanggap Bencana Category Choice" Category 2019 in Finance Bank BUMN Tahun 2018 Indonesia Best Category Most Trusted Sector (Asset Penyalur KPR FLPP Organizer Brand Award for 9 Brand Awareness, Company Based Between 100 - 800T) Terbesar Selama Kementerian BUMN Consecutive Years Brand Image on Corporate Organizer Satu Dekade Date (2010-2019) Product Category Millenial's Governance Pikiran Rakyat Organizer 6 Oktober 2019 Category KPR Admirable Brand in Perception Index Date Properti & Bank Organizer Bank Buku 3 (CGPI) 29 Agustus 2019 Date Majalah SWA & Mars Organizer Organizer 26 September 2019 Indonesia Digital RRI & Iconomics Indonesian Institute Date Date for Corporate 27 November 2019 5 Desember 2019 Governance (IICG) & Majalah SWA Date 11 Desember 2019
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Association Membership (102-13) [3.e]
Bank Tabungan Negara joins various associations that are in accordance with its business in the banking industry, including its status as a state-owned enterprise. By joining these associations, the Company can discuss issues and policies regarding the banking industry, including its impact and opportunities for banks in the short, medium and long term. In 2019, the Company joins the following associations:
Association name Position in the Association State Owned Banks Association (HIMBARA) President 1
Indonesian Bankers Association (IBI) Secretary General
World Saving Bank Institution (WSBI) Head of WSBI Asia - Pasific Regional Group
National Commercial Banks Association (PERBANAS) Wakil Ketua Umum 1
SOE Public Forum Member
Indonesian Issuers Association Member
External Loss Data Consortium (KDKE) Member
Certified Wealth Manager’s Association (CWMA) Member
Indonesian Payment System Association (ASPI) Member
Associate Cambiste Internationale (ACI) Indonesia (Forexindo) Member
Communication Forum for Banking Compliance Director (FKDKP) Member
Alternative Institution for Dispute Resolution Pl (LAPSPI) Member
Bank Internal Auditor Association Member
Indonesian Internal Audit Association Member
The Institute of Internal Auditor (IIA)-lndonesla Chapter Member
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SUSTAINABILITY GOVERNANCE
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Commitment to Implement Governance Bank Tabungan Negara as a financial institution is required In 2019, the Company was able to maintain the previous to implement good corporate governance/GCG. This year’s position as the 5th largest bank in Indonesia based obligation is emphasized in a number of regulations, on the value of assets (specified for banks) compared to including, Regulation of the Minister of State-owned the 11th rank in 2013. Enterprises Number: PER - 01/MBU/2011 Regarding the Implementation of Good Corporate Governance in State- Owned Enterprises, Governance Principles
A copy of Financial Services Authority Regulation According to POJK No. 30 / POJK.05 / 2014, in carrying Number 30/POJK.05/2014 concerning Good Corporate out its activities, the Company is required to implement Governance for Financing Institutions, and Circular Letters the principles of Good Corporate Governance in each To All Conventional Commercial Banks in Indonesia of its business activities at all organizational levels. The on April 29, 2013, Regarding: Implementation of Good referred principles of Good Corporate Governance are as Corporate Governance for Commercial Banks. follows: 1. Transparency, namely being transparent in the The implementation of GCG is significantly important decision-making process and transparent in the since the structure and process used and implemented disclosure and provision of relevant information by the Company’s organs are able to improve the about the Company, which is easily accessed by the achievement of business results and optimize the value of Stakeholders in accordance with laws and regulations the company for all stakeholders accountably and based in the field of financing as well as standards, principles, on regulations and ethical values. With this condition, and practices of conducting a fair financing business; the implementation of GCG is the key to the company’s 2. Accountability, namely clarity of function and progress and sustainability, especially for Bank Tabungan responsibility implementation organ of the Company Negara. so that the Company’s performance can be transparent, fair, effective, and efficient; In addition to show its compliance with various 3. Responsibility, namely being responsible for the regulations, the Company implements governance with Company’s management with the regulation in the the aim and purpose that it will ensure the establishment field of financing and ethical values and standards, of a comprehensive business balance. Thus, all forms principles, and practices a healthy financing business of interests, both business and social, individuals with operation; groups, internal and external, short-term and long-term, 4. Independency, namely the condition of company that as well as the interests of shareholders and stakeholders is managed independently and professionally and free will be balance. The implementation of the governance of the Conflict of Interest and influence or pressure principles is also needed to make the Company more from any party that does not conform with legislation sustainable and competitive against the intense in the field of financing and ethical values as well as competition. standards, principles and practices of conducting a healthy financing business; and equality and, In the midst of the intense competition in the banking 5. Fairness, namely equality, balance, and fairness in industry, good corporate governance (GCG) within the fulfilling Stakeholder rights based on agreements, Company has become a necessity to achieve the goal of laws and regulations, and ethical values and standards, Moving Beyond Corporate Governance to True Business principles, and the practice of implementation healthy Value . The Company has changed the paradigm of financing business. governance implementation from being compliance driven to being value driven in all business processes. The evidence of the corporate value improvement can be done together with the improvement in sustainable governance practices can be seen from the Company’s business performance and governance assessments; since 2014, the score of the Corporate Governance Perception Index (CGPI) and the ASEAN CG Scorecards has consistently increased in line with the Company’s growth.
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The objectives of implementing Good Corporate Governance are as follows: The next stage is the optimization of business processes 1. Optimizing the value of the Company for through the implementation of Integrated Governance Stakeholders, especially Debtors, creditors, and / or Risk Compliance (iGRC) in each operational unit of other Stakeholders; Bank Tabungan Negara which includes the components 2. Increasing the management of the Company in a of GCG, Risk Management, Compliance , Corporate professional, effective and efficient manner; Culture, Code of Conduct, and Anti-Fraud. Thus, the 3. Increasing the compliance of Company Organs and Company can operate effectively and efficiently, which DPS and their subordinates in order to make decisions can improve high quality/advanced performance. and take actions based on high ethics, compliance with laws and regulations, and awareness of corporate The ultimate goal of the Roadmap is effective and social responsibility towards stakeholders and sustainable governance to support the achievement of environmental sustainability; prudent business transformation goals through smart 4. Creating a healthier, more reliable, trustworthy and and measured risk management. The effectiveness of competitive company; and the system and governance of the Company is expected 5. Increasing the Company’s contribution to the national to be able to create value for stakeholders in order to economy. realize sustainable company growth in accordance with the principles of governance. Corporate Governance Strategy Integrated Governance, Risk and Bank Tabungan Negara is committed to completing the implementation of sustainability governance. In 2019-2022, Compliance (GRC) the Company has prepared a Bank Governance roadmap To create a stronger business infrastructure and Human that is in line with the Company’s long-term transformation Capital (HC), since 2018, Bank BTN has implemented an plan, which is to consider the implementation of the Integrated Governance Risk Compliance (iGRC) which Integrated Governance Risk & Compliance (iGRC) is a collaboration between several operational units. initiatives, the existence of plans for implementing financial The Company optimizes Integrated Governance Risk conglomerates through the formation of subsidiaries and Compliance (iGRC) in each work unit that includes GCG sustainable financial action plans. components, Risk Management, Compliance , Corporate Culture, Code of Conduct and Anti Fraud so that BTN Ultimately, the Governance Roadmap will further guide can operate effectively and efficiently which can further the achievement of the Company’s goals, with the improve advanced quality performance. ultimate goal to become a company with best governance practices in the future. Commitment to Good Corporate
The Governance Roadmap began in 2019 through Governance Implementation 2019 improving governance structures and infrastructure. In 2019, the Company focused on improving the structure The Company makes improvements to policies at the and infrastructure of governance as well as adjusting main organ level in the form of a Committee Charter organizational structures, formulating new policies, of the Board of Commissioners. The amendment and systems and procedures to implement governance, risk improvement of the Charter conducted throughout and compliance comprehensively and integratedly. 2019 took the form of the Audit Committee Charter, the Remuneration and Nomination Committee Charter and The implementation of GCG in 2019 which is in line with the Risk Monitoring Committee Charter. In addition, the the Company’s GCG Roadmap is carried out through the Company also mapped out human capital, recruitment, implementation of the 3 GCG Pillars as follows: education and training; organizational structure adjustment; the formulation of new policy, systems and procedures to implement governance, risk and compliance comprehensively and integratedly.
Governance Structure Policy Review and Refinement: • Completion of key organ-level policies (Audit Committee Charter, Remuneration and Nomination Committee Charter and Risk Monitoring Committee Charter); • Organizational development that separates the functions of policy, operation and sales; • Development of New Operations Models such as BPI, Network & Distribution Design and Organization Design.
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Governance Process • Development of People Capability includes: a. Employee Engagement especially for Millennial employees; b. Strong Leadership & Capability for top and middle management levels (L1 and L2); c. Empower the Core for middle management and subordinate employees (L3) • Excellent Process includes: Business Process Improvement (BPI); Implementation of the Compliance checklist ; Implementation of GRC Index; Implementation of the corporate culture program (SIIPS); and Provision of Management Information Systems in PPU APU • Product Competitiveness includes: Customer centric: Mass, Emerging Affluent , UKM & Corp & Syndications and Simplification of savings products.
Governance Outcome • Review the new organizational structure; • Governance Training Program ; • The results of the Self Assessment of governance based on OJK with the results of rank 2 (good category); • Governance Assessment based on Third Party Assessment: • CGPI -> Indonesian Most Trusted Company ; • Economic Review -> 3rd Best Indonesia GCG Implementation 2019 • ASEAN Risk Award
Implementation of Sustainable 3. Strengthening risk management policies through strengthening policies and programs through the Financing preparation of sustainable policy and strategy . In accordance with one of the mission of Bank Tabungan 4. Development of banking products and services Negara, namely “Aware of the Interests of Social and through financing property purchases, consumption Environmental Communities Sustainably,” the Company and MSMEs that are aware of environmental and supports the establishment of a sustainable financial social aspects to build portfolio. services sector to achieve the Sustainable Development 5. Development of sustainablity banking operations Goals and address climate change. This is in accordance through the application of concepts green office and with the Financial Services Authority policy. Provisions and sustainable procurement. criteria for sustainable financing stipulated in Financial 6. Strengthening institutional capacity through Services Authority Regulation Number 51/POJK.03/2017 institutional structuring and development resource concerning the Application of Sustainable Financing for capacity. Financial Institutions, Issuers and Public Companies. Prior to RAKB, the Company has applied sustainable Support for the implementation of sustainable financing is financial principles through certain banking activities, realized by the preparation of the 2019-2023 Sustainable products and services, including: Financing Action Plan (RAKB). Through RAKB, it is • Officeless financial services are in line with OJK expected to provide long-term value establishment not Regulation No. 19/POJK.03/2014 concerning Financial only in the form of establishing sustainable competitive Services Without Offices in the Framework of Inclusive advantages for a company but also for the wider Finance, in the form of card-based and mobile-based community and environment and strengthening resilience meticulous corporate savings that can increase public as the Company has managed all risks (economic, social accessibility in accessing banking services. This shows and environmental) more precisely. The purpose of Bank that the Company has implemented the principle of BTN’s Sustainable Financing Action Plan namely in 2023 is financial inclusive practices, where bank services have presented in the achievement of Bank Tabungan Negara reached and can be accessed by various levels of as a leader in the housing sector and trusted financial society. partners which apply sustainable financial principles • In providing financing facilities, both construction to jointly achieve sustainable development goals in loans, land ownership loans, and investment loans, Indonesia through the following strategic steps: prospective customers must meet the requirements 1. Strengthening the policies and practices of managing of the Environmental Impact Analysis (AMDAL) and CSR programs pay attention to aspects of 3P (People, other permits in accordance with the stipulated Planet, Profit) with the partnership element of ABCG Product Policy. This policy is adopted by the Company (Academy, Business, Community and Government). to ensure that projects financed by the Company 2. Development of a digital-based sustainable financing have met the required regulations both legally and communication strategy by involving millennials. procedurally.
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• The paperless program is intended to reduce the To get the best performance, the Board of use of paper, mainly carried out by applying digital Commissioners is assisted by supporting organs such banking to Bank BTN’s banking products and services. as Audit Committee, Risk Monitoring Committee, and This effort is also supported by the use of various Remuneration and Nomination Committee. Meanwhile, facilities to increase fee-based income , namely the Board of Directors are assisted by supporting organs through electronic channel services (ATM, Cash in the form of Risk Management Committee, Asset and Deposit Machines / CDM), Internet Banking , Cash Liability Committee (ALCO), Credit Committee, Credit Management , SMS Banking , and Mobile Banking. Policy Committee, Information Technology Steering Committee (KPT), Human Capital Committee and Bank Tabungan Negara has formulated RAKB into the Product Committee. Roadmap for the Implementation of Sustainable Finance including the time target to be targeted in the period of 1 The Company’s organs have changed with the entry into to 5 years (2019-2023). The programs formulated in t Bank force of POJK Number 51/POJK.03/2017 concerning Tabungan Negara Sustainable Financial Implementation the Implementation of Sustainable Finance for Financial Roadmap include the design and preparation of Services Institutions, Issuers, and Public Companies, Sustainability Policy & Strategy (policies and adjustments which came into force for the Company as of January 1, to the structure and role of the organization), adjustment 2019. This regulation, among others, regulates the need and launch of the Green Finance Product & Index , and for employees , officers and/or work units responsible the implementation of various Sustainability Programs for implementing Sustainable Finance. To that end, Bank and Initiatives . Tabungan Negara has formed a Cross-Division Work Unit (Task Force Team) to carry out programs of the Sustainable Problems Encountered, Developments, Financial Action Plan which consists of the work unit of Corporate Secretariat, Risk Management, Manager of and Their Effects on the Human Resources (HR), Compliance, Planning & Strategy Implementation of Sustainable Finance and business work units.
In line with the entry into force of POJK No.51/POJK.03/2017 for Bank Tabungan Negara as of January 1, 2019, then at the Governance Structure [102-18] same time, the Company began implementing RAKB 2019. During RAKB implementation, let alone constituting an Based on Limited Liability Company Law No. 40 of application in the first year, the Company faced a number of 2007, it is stated that the Company’s Organs consist of problems with demand an immediate solution. It was difficult General Meeting of Shareholders, Board of Directors to deny that the problem has affected the implementation and Board of Commissioners. The GMS, the Board of sustainable finance in the Company. of Directors and the Board of Commissioners regard each other’s duties, responsibilities and authorities in accordance with the laws and regulations and the Articles Governance Structure of Association. The Company’s organs are formed to ensure the implementation of the good corporate Law of the Republic of Indonesia Number 40 of 2007 governance principles applied effectively with clear roles concerning Limited Liability Companies (PT Law) states and responsibilities so as to create a check and balance that the Company’s Organs consist of General Meeting control mechanism. of Shareholders (GMS), Board of Commissioners and Board of Directors. The management system in the Bank Tabungan Negara follows a two-tier system, namely the Board of Commissioners and the Board of Directors who have clear authority and responsibilities in accordance with their respective functions as mandated in the Articles of Association and laws and regulations. In accordance with the Limited Liability Company Law, the governance structure of Bank Tabungan Negara consists of GMS, the Board of Commissioners and the Board of Directors.
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Rapat Umum Pemegang Saham (RUPS)
Dewan Pengawas Dewan Komisaris Direksi Syariah
Sekretaris Dewan Sekretaris Audit Eksternal Komisaris Perusahaan
Komite Manajemen Satuan Kerja Audit Komite Audit Resiko Internal
Komite Asset and Liability (ALCO)
Satuan Kerja Manajemen Komite Pemantau Resiko Risiko (SKMR) Komite Kredit *)
Komite Kebijakan perkreditan
Satuan Kerja Kepatuhan (SKK) Komite Pengarah Komite Remunerasi dan Informasi (KPTI) Nominasi
Unit Kerja Lain Komite Human Capital
Unit Usaha Syariah (UUS) Komite Produk
*) The Credit Committee has been established within the Company’s organizational structure through the Board of Directors Decree No. 03/KD/ DIR/ SIPD/2017 concerning Head Office Organizational Structure. At the operational level, the function of the Credit Committee is continuously performed through the implementation of the Board of Directors Meeting which supervises the Credit Division.
GENERAL MEETING OF SHAREHOLDERS
General Meeting of Shareholders (GMS) is an organ of GMS consists of the Annual GMS and other GMS. The the Company that has authority not granted to the Board Annual GMS must be held no later than 6 (six) months of Directors or Board of Commissioners within the limits after the fiscal year ends. Meanwhile, other GMS, which specified in the law and / or articles of association. In Bank are commonly referred to as Extraordinary GMS, can be Tabungan Negara, GMS is a forum where the Board of held at any time based on the need for the benefit of Commissioners and the Board of Directors report and are Bank Tabungan Negara. responsible for carrying out their duties and performance to the Shareholders. Shareholders are not permitted In the reporting year, the Company held 1 (one) Annual to interfere with the Company’s operational activities GMS and 2 (two) Extraordinary GMS, as the following which are the responsibility of the Board of Directors in table: accordance with the provisions of the Company’s Articles of Association and applicable laws and regulations.
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No. GMS Type Time / Place of Implementation 1 Annual GMS Day / Date: Friday / May 17, 2019 Time: 14:30 P.M - 16:56 P.M Place: Bank BTN Tower, 6th floor Gajah Mada Street No.1, Central Jakarta – 10130
2 Extraordinary GMS Day / Date: Thursday / August 29, 2019 Time: 15:35 P.M until 17:04 P.M Place: Bank BTN Tower, 6th floor Gajah Mada Street No.1, Central Jakarta – 10130
3 Extraordinary GMS Day / Date: Wednesday, 27 November, 2019, Time : 15:18 P.M until 16:07 P.M Place: Bank BTN Tower, 6th floor Gajah Mada Street No.1, Central Jakarta – 10130
BOARD OF COMMISSIONERS
The Board of Commissioners is the Company’s Organ 40 of 2007 concerning Limited Liability Companies who is responsible to GMS. The Board of Commissioners and Law Number 7 of 1992 concerning Banking, SOE has the collective duty and responsibility to supervise and Ministry Regulations, OJK Regulations, Bank Indonesia provide advice to the Board of Directors and ensure that Regulations, and Articles of Association of the Company. the Company implements good corporate governance at all levels of the organization. [5.a] During 2019, the composition of the Board of Commissioners of the Company experienced changes In performing its supervisory duties, the Board of compared to the previous year, as stated in full Commissioners can form a committee, whose members information in the Annual Report of the Company in 2019 come from members of the Board of Commissioners. The in the Corporate Governance Chapter , page 365-368. committee is responsible to the Board of Commissioners. The composition of the Board of Commissioners as of Other provisions concerning the Company’s Board of December 31, 2019 was as follows: Commissioners function in accordance with Law No.
Composition of the Board of Commissioners as of December 31, 2019 Legal Basis of Serving Name Position Term of Office* Appointment Period Chandra Hamzah Komisaris Utama/ decision of Extraordinary RUPS Tahun 2019 - First Period Independen GMS on November 27, 2019 RUPS Tahun 2024
Armand B. Arief Komisaris Independen decision of Extraordinary RUPS Tahun 2019 - First Period GMS on November 27, 2019 RUPS Tahun 2024
Ahdi Jumhari Luddin Komisaris Independen decision of Extraordinary RUPS Tahun 2019 - First Period GMS on November 27, 2019 RUPS Tahun 2024
Eko D. Heripoerwanto Komisaris Non decision of Extraordinary RUPS Tahun 2019 - First Period Independen GMS on November 27, 2019 RUPS Tahun 2024
Heru Budi Hartono Komisaris Non decision of Extraordinary RUPS Tahun 2019 - First Period Independen GMS on November 27, 2019 RUPS Tahun 2024
Andin Hadiyanto Komisaris Non decision of Extraordinary RUPS Tahun 2019 - First Period Independen GMS on November 27, 2019 RUPS Tahun 2024
*)effective after approved by OJK through fit and proper test
DIREKSI
The Board of Directors is the organ of the Company that is authorized and fully responsible for management of the Company for the benefit of the Company, in accordance with the aims and objectives of the Company and representing the Company, both inside and outside the court in accordance with the provisions of the articles of association. In the Company, the Board of Directors is a central and exclusive figure in the Company’s governance organs. Therefore, candidates for the Board to go through the stages of the fit and proper test as regulated in PBI No. 12/23/PBI/2010 which states that candidates for the Board shall pass the fit and proper test and obtained approval from Bank Indonesia before carrying out the duties and functions in his position as well as POJK No.27 / POJK.03 / 2016 concerning Assessment of Capability and Compliance for the Main Parties of Financial Services Institutions. [5.a]
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The appointment of members of the Board of Directors is carried out through GMS and through the fit and proper test process that refers to PBI Number 12/23 / PBI/2010 concerning the fit and proper test Article 17 which states that the Board of Directors must have integrity, competence and reputation finance. Whereas the dismissal of members of the Board of Directors is regulated in article 11 of the Articles of Association.
During 2019, the composition of the Board of Directors of the Company has changed compared to the previous year, as detailed information presented in the Annual Report of the Company in 2019 in the Corporate Governance Chapter, page 380-383. The composition of the Board of Directors as of December 31, 2019 is as follows:
Composition of the Board of Directors as of December 31, 2019 Legal Basis of Serving Name Position Term of Office* Appointment Period Pahala Nugraha President Director Decision of Extraordinary GMS 2019-GMS 2024 First Period Mansury GMS on November 27, 2019
Andi Nirwoto Director of Decision of Extraordinary GMS 2018-GMS 2023 First Period Operations, IT and GMS on November 27, 2019 Digital Banking
Nixon L.P Napitupulu Director of Finance, Decision of Annual GMS on GMS 2017-GMS 2022 First Period Planning and Treasury March 17, 2017
Yossi Istanto Director of Human decision of Annual GMS on GMS 2018-GMS 2023 First Period Capital, Legal and March 23, 2018 Compliance
Elisabeth Novie Director of Remedial Decision of Extraordinary GMS 2019-GMS 2024 First Period Riswanti and Wholesale Risk GMS on August 29, 2019
Hirwandi Gafar Director of Consumer Decision of Extraordinary GMS 2019-GMS 2024 First Period and Commercial GMS on November 27, 2019 Lending
Jasmin Director of Decision of Extraordinary GMS 2019-GMS 2024 First Period Distribution and Retail GMS on November 27, 2019 Funding
Setiyo Wibowo Director of Enterprise Decision of Extraordinary GMS 2019-GMS 2024 First Period Risk Management, Big GMS on November 27, 2019 Data and Analytics
*)effective after approved by OJK through fit and proper test
Competency Development for Board of Directors, Board of Commissioners, and Task Force Teams [5.b]
Board of Commissioners Competency Development Table
Dewan Komisaris dan Direksi Active Period November 27 to December 31, 2019 Types of Education Educational and Name and Position Place/Date Organizer and Training Materials Training Dewan Komisaris Chandra Martha Hamzah In House UKMR Supply Level 1 Jakarta, December 16, Indonesian Bankers (Komisaris Utama/ Commissioner Program 2019 Association Independen)
Armand B Arief In House Refreshment Program Jakarta, December 18, Banking Professional (Independent UKMR Level 4 “Credit 2019 Certification Institute Commissioner) Risk and Operational Risk Management “
Ahdi Jumhari Luddin - - - - (Independent Commissioner)
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Dewan Komisaris dan Direksi Active Period November 27 to December 31, 2019 Types of Education Educational and Name and Position Place/Date Organizer and Training Materials Training Eko D Heripoerwanto Seminar “60th Professional Jakarta, November 20- Intipesan (Komisaris) Commissioner” 21, 2019
In House Debriefing UKMR Level 1 Jakarta, 3 - 4 July 2019 Sandra Chalik Commissioner (Individual)
Heru Budi Hartono In House UKMR Level 1 Refreshment Jakarta, December 16 Banking Professional (Komisaris) Program Commissioner 2019 Certification Institute “Credit Risk Management”
Andin Hadiyanto In House Program Pembekalan UKMR Jakarta, December 16 Indonesian Bankers (Komisaris) Level 1 Komisaris 2019 Association
Board of Directors Pahala Nugraha Mansury In House UKMR Level 5 Refreshment Jakarta, December 18, Banking Professional (President Director) Program “Credit Risk 2019 Certification Institute and Operational Risk Management”
Andi Nirwoto In House UKMR Level 5 Refreshment Jakarta, May 23, 2019 Banking Professional (Director of IT & Operation) Program “Fintech Certification Institute (Operational Risk Management Approach)”
Elisabeth Novie Riswanti In House Debriefing UKMR Level 5 Jakarta, 18 September Sandra Chalik (Director of Collection & 2019 & 06 October (Individual) Asset Management) 2019
Hirwandi Gafar In House Debriefing UKMR Level 5 Jakarta, December 11, Sandra Chalik (Direktur Consumer & 2019 (Individual) Commercial Lending)
Jasmin In House Debriefing UKMR Level 5 Jakarta, December 11, Sandra Chalik (Director of Distribution & 2019 (Individual) Retail Funding)
Nixon L.P Napitupulu In House UKMR Level 5 Refreshment Jakarta, May 23, 2019 Banking Professional (Direktur Finance Treasury & Program “Fintech Certification Institute Strategy) (Operational Risk Management Approach)”
Seminar PSAK 71 Impairment Deep Bali, 27-28 June 2019 Bankers Association Dive In Risk Management for Risk Management Perspective & CSG-CIMB 13Th Annual Indonesia Conference
Seminar Pembekalan & Sertifikasi Jakarta, August 24-30, ACI FMA Indonesia Treassury Dealer Level 2019 Advance
In House The 1st ASEAN CPA Bali, October 16-17, Indonesian Conference 2020 2019 Management Accountant Institute
Setiyo Wibowo In House UKMR Level 5 Refreshment Jakarta, December 18, Banking Professional (Director of Entrep Risk Mgt, Program “Credit Risk 2019 Certification Institute Big Data & Analytic) and Operational Risk Management”
Yossi Istanto Seminar Leadership, London, March 25-29, Asean Global (Director of Human Capital Entrepreneurship and 2019 Leadership Program Legal & Compliance) Innovation n The Global Economy
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Dewan Komisaris dan Direksi January 1- November 26, 2019 Types of Educational and Name and Position Education Place/Date Organizer Training Materials and Training Board of Commissioners Arie Coerniadi Seminar Enterprise Risk Barcelona - Milan - Banking Professional (Komisaris Independen) Management and Its Nice, 13 - 23 July 2019 Certification Institute Challenges in Industrial Revolution 4.0
Seminar International GRC Moscow - Saint CRMS Indonesia Workshop in Russia Batch Petersburg, 29 IX - GRC Master Class September - 4 October 2019
Asmawi Syam - - - - (Komisaris Utama/ Independen)
Eko D Heripoerwanto Seminar "60th Professional Jakarta, November 20- Intipesan (Komisaris) Commissioner” 21, 2019
In House Debriefing UKMR Level 1 Jakarta, 3 - 4 July 2019 Sandra Chalik Commissioner (Individual)
Garuda Wiko Seminar International GRC Moscow - Saint CRMS Indonesia (Komisaris Independen) Workshop In Russia Batch Petersburg, 29 IX - GRC Master Class September - 4 October 2019
I Wayan Agus Mertayasa - - - - (Komisaris Utama/ Independen)
Iman Sugema Seminar Enterprise Risk Barcelona - Milan - Lembaga Sertifikasi (Komisaris) Management and Its Nice, 13-23 Juli 2019 Profesi Perbankan Challenges in Industrial Revolution 4.0
Seminar International GRC Moscow - Saint CRMS Indonesia Workshop in Russia Batch Petersburg, 29 IX - GRC Master Class September - 4 Oktober 2019
Kamaruddin Sjam Seminar International GRC Moscow - Saint CRMS Indonesia (Komisaris Independen) Workshop In Russia Batch Petersburg, 29 IX - GRC Master Class September - 4 October 2019
Seminar Conference #ECIIA2019 France - Luxembourg Institute of Internal - Brussels, 16-22 Auditors Indonesia September 2019
Seminar 2019 National Conference Solo, July 24-25, 2019 Institute of Internal IIA “Empowering Internal Auditors Indonesia Auditors: Embracing The 4IR
Seminar The Next Generations • Denpasar, 5 - Enterprise Risk Embracing GRC In Industry 6 December 2019 Management 4.0 Academy
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Dewan Komisaris dan Direksi January 1- November 26, 2019 Types of Educational and Name and Position Education Place/Date Organizer Training Materials and Training Lucky Fathul Aziz H Seminar International GRC Moscow - Saint CRMS Indonesia (Komisaris Independen) Workshop In Russia Batch Petersburg, 29 IX - GRC Master Class September - 4 October 2019
Seminar Conference #ECIIA2019 France - Luxembourg Institute of Internal - Brussels, 16-22 Auditors Indonesia September 2019
Seminar 2019 National Conference Solo, July 24-25, 2019 Institute of Internal IIA “Empowering Internal Auditors Indonesia Auditors : Embracing The 4IR
Seminar The Next Generations Denpasar, December Enterprise Risk Embracing GRC In Industry 5 – 6, 2019 Management 4.0 Academy
Seminar ASEAN CG Scorecard Plus Indonesian Institute Quality Reporting System Jakarta, 31 Oktober for Corporate 2019 Director
Marwanto Harjowiryono - - - - (Komisaris)
Maurin Sitorus - - - - (Komisaris)
Parman Nataatmadja - - - - (Komisaris)
Sumiyati Seminar International GRC Moscow - Saint CRMS Indonesia (Komisaris) Workshop In Russia Batch Petersburg, 29 IX - GRC Master Class September - 4 October 2019
Board of Directors Maryono Workshop Program to Build Bandung, March 10 - 12 Ministry of BUMN (Direktur Utama) the Nation through 2019 Strengthening Synergy and Solidarity of SOEs
Workshop SOE CEO Coordination Belitung, 2 - 3 April Ministry of BUMN Meeting in 2019 2019
Workshop Auditor’s Talk To Jakarta, May 9, 2019 Ministry of BUMN Strengthen the Role of BUMN’s Internal Supervisory Unit (SPI)
Andi Nirwoto In House UKMR Level 5 Refreshment •Jakarta, May 23, 2019 Banking Professional (Direktur IT & Operation) Program “Fintech Certification Institute (Operational Risk Management Approach)”
Budi Satria In House Basic Islamic Banking • Jakarta, Iqtishad (Direktur Consumer Banking) Education November 14-15, 2019
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Dewan Komisaris dan Direksi January 1- November 26, 2019 Types of Educational and Name and Position Education Place/Date Organizer Training Materials and Training Elisabeth Novie Riswanti In House Debriefing UKMR Level 5 Jakarta, 18 September Sandra Chalik (Direktur Remedial and 2019 & 06 October 2019 (Individual) Wholesale Risk)
Iman Nugroho Soeko Workshop Program to Build Jakarta, March 26-27 Ministry of SOE (Direktur Finance & Treasury) the Nation through 2019 Strengthening Synergy and Solidarity of SOEs
Workshop Auditor’s Talk To Jakarta, May 9, 2019 Ministry of SOE Strengthen the Role of BUMN’s Internal Supervisory Unit (SPI)
Nixon L.P Napitupulu In House UKMR Level 5 Refreshment Jakarta, May 23, 2019 Banking Professional (Direktur Finance, Planning Program “Fintech Certification Institute and Treasury) (Operational Risk Management Approach)”
Seminar PSAK 71 Impairment Deep Bali, 27-28 June 2019 Bankers Dive In Risk Management Association for Risk Perspective & CSG-CIMB Management 13Th Annual Indonesia Conference
In House Provision of Certification Jakarta, August 24-30, ACI FMA Indonesia & Treassury Dealer Level 2019 Advance
Seminar The 1st ASEAN CPA Bali, October 16-17, Management Conference 2020 2019 Accountant Institute
Oni Febriarto Rahardjo In House UKMR Level 5 Refreshment Jakarta, May 23, 2019 Banking Professional (Plt. Direktur Utama, Direktur Program “Fintech Certification Institute Commercial Banking) (Operational Risk Management Approach)”
Seminar The 1st ASEAN CPA Bali, October 16-17, Institusi Akuntan Conference 2019 2019 Manajemen Indonesia
R. Mahelan Prabantarikso International Risk Moscow, June 29 - July Banking Professional (Direktur Compliance) Management Refreshment 27, 2019 Certification Institute and Wealth Management Certification
UKMR Level 5 Refreshment Bandung, April 23, 2019 Banking Professional Program “Digital Banking Certification Institute And Fintech (Operational Risk Management Approach”
Seminar on Jakarta, June 27, 2019 Forum Komunikasi Communication Forum Direktur Kepatuhan for Banking Compliance Perbankan Director
Yossi Istanto Seminar Leadership, London, March 25-29, Asean Global (Direktur Human Capital, Entrepreneurship and 2019 Leadership Program Legal and Compliance) Innovation in the Global Economy
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Soft Structure GCG In an effort to strengthen the application of governance, CMPD / 2015; Bank Tabungan Negara has developed, implemented and 6. Application of Gratification Control which was developed governance policies that govern the relations approved through Circular No. 68 / DIR / CMPD / between organs within the Company . Thus, within the 2017; governance organ there are clear duties, responsibilities 7. Violation Reporting System Policy -(Whitle Blowing and authorities in accordance with applicable laws and System - WBS) and Anti Fraud which have been regulations, GCG principles, well business ethics and best approved through Circular Letter of the Directors of practices . This governance mechanism is outlined in various SE No. 21 / DIR / IAD / 2014. key GCG ( soft-structure GCG) policies, which are living documents for all levels and levels of the Bank’s organization. The Details Corporate Governance Implementation is more readable in the Company’s Annual Report 2019, Soft Structure GCG of the Company Chapter Corporate Governance, page 301-659.
1. GCG which was approved in Directors’ Decree No.06 Evaluation of the Implementation / DIR / DK / 2009 dated May 27, 2009; of Corporate Governance 2. The Board of Commissioners’ Work Guidelines and Work Procedures which were approved in the Joint The Company implements Self-Assessment annually Decree of the Board of Commissioners 01 / KOM- at the end of June and December. The application Company / 2017 dated August 10, 2017 as a renewal of governance standards, besides referring to OJK of the Board Manual that serves as a previous work Regulation No. 55 POJK.03/2016 concerning the guideline; Implementation of Governance for Commercial Banks, 3. The Board of Directors Charter is approved in Board has also adopted the provisions of OJK Circular No. of Directors Decree No. 07 / DIR / KD / CMPD / 2017 13 / POJK.03 / 2017 concerning the Implementation of dated September 28, 2017 as an update to the Board Governance for Commercial Banks. Manual that serves as a previous work guideline; 4. Work procedures for the Board of Directors and Board The Company implements the Self-assessment of of Commissioners approved in the Joint Decree of the corporate governance by involving the Board of Board of Commissioners No.02 / DEKOM- Company Commissioners, Board of Directors and work units relevant / 2017 and Directors No. 01 / DIR-Company / 2017 to the governance assessment factors. Information on the dated 24 November 2017; progress of the Corporate Governance self-assessment in 5. Code of Business Ethics and Conduct which was the last 5 (five) years is as follows: passed through Directors’ Regulation No. 16 / PD /
Table of Self-assessment Results (Corporate Governance Self-assessment) 2015 - 2019 Description 2015 2016 2017 2018 2019 Self-assessment Result for Corporate 2 2 2 2 2 Governance
In addition to GCG assessment, the Company also follows Good Corporate Governance practices based on the annual Corporate Governance Perception Index the ASEAN Corporate Governance Scorecard are (CGPI) rating and survey conducted by the Indonesian implemented through the Third Party Assessment. One Institute for Corporate Governance (IICG). CGPI is a of independent institutions conducting the ASEAN CG research and rating program for evaluating the quality of Scorecard assessment is the ASEAN Capital Market corporate governance. The Company’s 2019 CGPI score Forum (ACMF). is 88.62 with the title of Trusted Company. Related to the results of the ASEAN Corporate Another GCG assessment conducted by the Company Governance Scorecard assessment of 2019, the results is the ASEAN Corporate Governance Scorecard which is have not been published by the ACMF to the preparation an indicator for corporate governance practices agreed of this Annual Report. As for the results of the assessment by the ASEAN Capital Market Forum (ACMF). These in 2018, the Company won the TOP 50 ASEAN Public indicators are based on the OECD Principles with the Listed Companies (PLCs) and TOP 3 Indonesian PLCs at aim of improving investor trust in listed companies in the the 2018 Corporate Governance Awards received from ASEAN region. the ASEAN Corporate Governance and ACMF.
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RISK MANAGEMENT [102-11] In running a business, Bank Tabungan Negara faces A review of MPGR has been carried out at least once a year various risks that have the potential to hamper the by the Board of Directors and the Board of Commissioners achievement of targets set in the 2019 Bank Business to improve risk management policy guidelines. The Plan. To minimize the negative impacts of these risks, internal policy review was also carried out to comply with the Company already has policy guidelines in the field the latest provisions of the regulator by conducting gap of risk management , namely Policy Guidelines of Risk analysis and accommodating best practices commonly Management (PGRM) which contains the minimum used in the banking industry to improve the quality of risk requirements required by Bank Indonesia Regulation / management implementation. Financial Services Authority. The risk management system is designed to support the Company in realizing well business management and achieving sustainable growth, so as to optimize stakeholder value .
8 Types of Company Risk • Credit Risk Risk Management Coverage • Legal Risk • Active supervision by the Board of Commissioners and the Board of Directors. • Market Risk • Adequacy of policies, procedures and limit setting. • Strategic Risk • Adequacy of the process of identifying, measuring, monitoring and controlling Risk and the • Liquidity Risk Risk Management information system. • Compliance Risk • A comprehensive internal control system • Operational Risk • Reputation Risk
Board of Commissioners and Board Risk Monitoring Committee of Directors Having duties and responsibilities to provide The Board of Commissioners and Directors play an active recommendations to the Board of Commissioners by role in the risk management process in order to mitigate evaluating policy guidelines of risk management (PGRM), Bank’s risk including risk management, risk management evaluating the suitability of the Company’s policy guidelines framework, risk management process, and the adequacy of risk management (PGRM) with their implementation and of management information systems and the adequacy monitoring and evaluating the implementation of the Risk of internal control systems. Active supervision by the Management Committee’s duties. Board of Commissioners and Directors is carried out through meeting of the Board of Commissioners with the Risk Monitoring Committee and Directors through Risk Management Committee Meeting.
Risk Management Committee [5.c]
Having duties and responsibilities to provide Risk Management Committee is actively involved in recommendations to President Director regarding the risks assessing the risks inherent in each new product and / inherent in the policies to be determined by the Directors or service / activity so that the Company can take the and to evaluate the provisions that are considered not in necessary mitigation measures and also evaluate Policy accordance with the latest developments and need to be Guidelines of Risk Management (PGRM). adjusted.
Risk Management Work Unit
The Enterprise Risk Management Division (RMD) is Risk Management Work Unit (SKMR) for the Company, led by a Division Head who is directly responsible to the President Director Strategy, Compliance & Risk.
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Struktur Enterprise Risk Management Division
Direktur Strategy Compliance & Risk
Enterprise Risk Management Division Head
Market Risk Credit Risk Operational Risk Startegic Risk Management Management Management Management
Market Risk Policy Credit Risk Policy & Operational Risk Policy Quality & Procedure Procedure Policy & Procedure Assuarance
Market Risk Credit Risk Operational Risk Assesment & Assesment & Assuarance & Unit Basel Measurement Measurement Measurement
Risk Management Support & Reportine
Risk Profile Assessment
The Company evaluates risk profiles on a quarterly basis based on an assessment of the inherent risk rating and the quality rating of the application of risk management to determine the Company’s risk rating. • Inherent Risk Assessment is an assessment of the risks inherent in the Company’s business activities, whether quantifiable or not, which have the potential to affect the Company’s financial position. • Quality Assessment of the Implementation of Risk Management is an assessment of four interrelated aspects including risk management, risk management framework, risk management processes, adequacy of human resources, and adequacy of management information systems, as well as the adequacy of risk control systems.
Based on the results of the Company’s independent assessment of the Company’s health level, the Company’s Risk Profile based on the Composite Rating in Quarter-IV 2019 is Low to Moderate and the quality rating for the application of risk management in the Satisfactory
Basel Implementation
In an effort to carry out risk management in particular the application of Basel-II , specifically pillar 1 that applies to all commercial banks, the Company has fulfilled the following conditions:
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Requirements Status The measurement of credit risk uses the Standardized Approach in accordance with SE OJK No. 42/SEOJK.03/2016 √ dated September 28, 2016 concerning Guidelines for Calculation of Risk Weighted Assets for Credit Risk Using the Standard Approach.
The use of the Standardized Model for market risk in accordance with SE OJK No.38/SEOJK.03/2016 dated √ September 8, 2016 concerning Guidelines for Using the Standard Method in Calculating the Minimum Capital Requirement for Commercial Banks by Calculating Market Risk.
The calculation of minimum capital requirements uses the Basic Indicator Approach for operational risk in √ accordance with SE OJK No. 24 SEOJK.03/2016 dated 14 July 2016 concerning Calculation of Risk Weighted Assets for Operational Risk Using the Basic Indicator Approach.
In connection with the regulator’s plan to implement Basel-III as stipulated in OJK regulation No. 11/POJK.03/2016, specifically the Company has maintained the bank capital ratio or capital adequacy ratio (CAR) of 18.05% above the minimum provisions of the Basel-III framework of 10.5%. In addition, the Company has made preparations to meet the following conditions:
Requirements Status Calculate and report Liquidity Coverage Ratio (LCR) to the regulator on a monthly and quarterly basis in accordance √ with POJK No. 42/POJK.03/2015 dated 23 December 2015 concerning the Obligation to Meet the Liquidity Coverage Ratio for Commercial Banks.
Adequacy of Liquidity ( Liquidity Coverage Ratio ) for Commercial Banks. √ Calculate and report quarterly Net Stable Funding Ratio (NSFR) trials to regulators in accordance with POJK No. 50/POJK.03/2017 dated 13 July 2017 concerning the Obligation to Fulfill Net Stable Funding Ratio for Commercial Banks.
Calculation of minimum capital requirements using the Basic Indicator Approach for operational risk in accordance √ with SE OJK No. 24 SEOJK.03/2016 dated 14 July 2016 concerning Calculation of Risk Weighted Assets for Operational Risk Using the Basic Indicator Approach.
Calculate and report the trial calculation of Leverage Ratio (LR) to the regulator on a quarterly basis according to √ the Consultative Paper LR
Take into account the buffer in calculating the minimum capital adequacy, namely: √ • Conservation Buffer in accordance with article 6 POJK No. 11/POJK.03/2016 dated 29 January 2016 concerning the Minimum Capital Requirement for Commercial Banks • Countercyclical Buffer according to PBI No. 17/22/PBI/2015 dated 23 December 2015 concerning the Requirement for Countercyclical Buffer Formation • Capital Surcharge for Systemic Banks in accordance with POJK No. 6/POJK.03/2015 dated 23 December 2015 concerning the Establishment of Systemically Important Banks and Capital Surcharge as well as the existence of Systemic Bank bucket stipulations delivered by regulators.
THE APPLICATION OF PRUDENTIAL PRINCIPLES
KYC and KYE To strengthen the application of prudential principles in managing operational risk in bank business activities, Bank Tabungan Negara applies KYC (Know Your Customer) & KYE (Know Your Employee). In its journey , the application of KYC has evolved into Customer due Diligence (CDD) which includes identification, verification and monitoring activities carried out by the Company to ensure that the transaction is in accordance with the profiles of prospective customers, WIC ( walk in customers ), or customers, in accordance with PBI No. 14/27 / PBI / 2012.
To improve employees’ understanding of the application of the prudential principles, the Company provides access for training e-learning of CDD which contains examples of relevant cases to be known by employees. .
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Anti-Money Laundering (AML) and 4. Employee Awareness Prevention of Terrorism Funding The Company conducts ongoing training related to (PTF) Program AML and PTF programs by: a. Face to face to Branch Manager, Service Quality The Company always implements AML and PTF programs Unit Head / DBM Business, Sub Branch Head, Cash in customer introduction activities by referring to the Office Head, Priority Banking, Customer Service and applicable laws and regulations. In order to anticipate the Teller Service in several Branch Offices. occurrence of money laundering and terrorism funding, the b. Module Implementation Sharing concerning Anti- Company implements AML and PTF programs in customer Money Laundering and Prevention of Terrorism introduction activities with reference to the applicable laws Funding in Knowledge Management System (KMS), and regulations. AML and PTF programs that have been which can be accessed throughout employees. implemented by the Company include: c. Training through E-Learning media, namely Micro Film Customer Due Diligence to All Frontliners and 1. Active Supervision of the Board of Directors. Responsible AML and PTF at the Branch Office and The Board of Directors ensures that the Company conduct evaluations. has policies and procedures for implementing Anti- Money Laundering and Preventing Terrorism Funding 5. Reporting Program. The Company has issued internal provisions The Company carries out reporting obligations to the regarding AML and PTF which are the Company’s Financial Transaction Reports and Analysis Center, guidelines in implementing anti-money laundering including: and preventing terrorism financing programs, the a. Reporting on Cash Financial Transactions (LTKT) contents of these guidelines are in accordance with and Suspicious Financial Transactions (LTKM) Financial Services Authority Regulation Number b. Reporting on Transaction of Funds From and To 12 / POJK.01 / 2017 Regarding the Application of Overseas (LTKL) / International Fund Transfer Anti Money Laundering and Prevention of Terrorism Instruction Report (IFTI) Funding in the Financial Services Sector in the c. Reporting to Law Enforcement Officials and Financial Services Sector and Financial Services Regulators Authority Circular Letter Number 32 / SEOJK.03 / 2017 concerning the Application of Anti-Money Persyaratan Pengelolaan Laundering and Prevention of Terrorism Funding in Lingkungan dan Dampak Sosial the Banking Sector. In accordance with the role of banks in carrying out the 2. Active Supervision of the Board of Commissioners. intermediation function, the Company has an indirect The Board of Commissioners has an active role in responsibility to manage the environmental and social supervising, among others, in giving approval to the impacts that occur on the debtor, because if there is a policies and procedures for implementing the AML mismatch in its management it will affect credit risk and and PTF programs proposed by the Directors. reputation risk.
3. Implementation of Information System of AML and In line with the implementation of sustainable finance and PTF Bank Indonesia Regulation (PBI) No.7 / 2/2005 concerning The Company has an information system that can Asset Quality Rating for Commercial Banks, which identify, analyze, monitor and provide reports regulates that the assessment of business prospects as an effectively and will continuously make improvements element of credit quality - includes an assessment of the in accordance with changes in applicable regulations efforts made by the debtor in the context of protecting and the Company’s experience. the environment life, the Company always manages environmental risks in funding or lending. In 2017 the Company has developed and refined AML and PTF management and reporting information Commercial credit is one of the Company’s portfolios systems that have been used at Branch Offices and that is very important to develop. To support commercial Headquarters. lending by upholding the Bank’s prudential principles and the principles of good corporate governance, the Pada tahun 2017 Perseroan telah melakukan Company has established policies and procedures for pengembangan dan penyempurnaan terhadap commercial lending with due regard to environmental Sistem Informasi pengelolaan dan pelaporan APU and social aspects. dan PPT yang telah digunakan di Kantor Cabang dan Kantor Pusat. In the Circular of the Boards of Directors of PT Bank Tabungan Negara (Persero) Tbk Number: 17 / DIR / CMLD / 2016, it has been regulated concerning the legality of the project, which consists of:
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1. Permit land allotment 2. Site plan approved by a legitimate and authorized The credit risk assessment began to be implemented party by the Company by taking into account the results of 3. Building permit the Environmental Impact Assessment (AMDAL) before 4. Proof of mastery deciding to extend credit to a project. Furthermore, 5. Copy of SPPT the Company also conducts monitoring or review by 6. Proof of mastery of the entrance conducting direct checks in the field to ensure that 7. Certificate of Flood Recommendation prospective debtors meet all environmental regulations. 8. Water Supply and Sanitation statement This is a form of application of the prudential principle in 9. Certificate of environmental feasibility or efforts to managing credit risk. manage the Environment and/or Environmental Impact Analysis (AMDAL) In addition, the Company also requires that every house built must have greening and tree planting with the AMDAL is a study of the large and important impacts of slogan “one house one tree” and the existence of fasum a planned business and/or activity on the environment (public facilities) and social facilities (social facilities). required for the decision making process regarding the This is one of the Company’s initiatives in protecting the conduct of a business and/or activity. This AMDAL is environment and social sustainability. [FS3] made when the planning of expected project have an influence on the environment (abiotic, biotic and cultural aspects) around it. The legal basis for AMDAL in Indonesia is Government Regulation No. 27 of 2012 concerning “Environmental Permit”.
BUSINESS ETHICS AND CULTURE [102-16] Bank Tabungan Negara encourages every element in the company to behave properly and maintain harmonious relationships with stakeholders and foster social sensitivity. Ethical behavior is closely related to reputation risk and can further affect operational risk and credit risk of the Company. In this context, the Company strives to apply ethical and behavioral standards in carrying out all its business activities in accordance with its vision, mission, and cultural values through the implementation of Business Ethics and Behavior. The Company’s Code of Conduct has been ratified through Directors’ Regulation No. 16/PD/CMPD/015.
The Code of Conduct applies to all Management, in this case the Board of Commissioners and the Board of Directors and Employees in carrying out every business activity of the Company and interacting between Commissioners, Directors and Employees with all stakeholders . The successful implementation of the Code of Conduct is the responsibility of all leaders in their respective work units.
Four Main Contents of the Code of Conduct
-Introduction
This Code of Conduct is a codification or complication of policies, employee regulations, and agreements that have been jointly developed between the Bank and employees that will influence, shape and set standards of behavior, both for management and employees in carrying out all business activities.
Business Ethics Standards Regulates: Bank Ethics with Employees, Bank Ethics with Customers, Bank Ethics with the Provision of Goods and Services, Bank Ethics with Competitors, Bank Ethics with Working Partners, Bank Ethics with the Government, Bank Ethics with the Community, Bank Ethics with Mass Media, and Ethics Bank with Professional Organizations.
Standards of Behavior Policy • Conflict of interest and Misuse of position • Anti-Gratification and Anti-Corruption • Compliance with statutory regulations and bank regulations.
Implementation and Enforcement The Board of Directors and Board of Commissioners supervise the implementation of the Code of Conduct within the Company and provide guidance, discipline sanctions and/or corrective and preventive actions related to violations of the Code of Conduct .
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The implementation of the Code of Conduct within the Company is carried out thoroughly including introduction, campaigning, application, reporting, and follow-up of violations of the Code of Conduct .
Socialization Application Reporting and Follow Up • Access Internal Management • Filling out the Integrity Pact by all employees • Implementing a Whistleblowing Standard (AIMS) and websites in accordance with the values of the Code of System (WBS) program; that can be accessed easily at Conduct ; • Penalties for employees who any time; • Working closely with the KPK to disseminate violate the Code of Conduct • Tiered socialization to the Most the gratification control program and Code in the form of administrative Valuable Player (MVP) from all of Conduct ; sanctions and financial sanctions work units of the Head Office and • Manage reports on the receipt of gratuities in accordance with the category Branch Offices; from all work units and report to the KPK in of violation. • Included in the anti-fraud accordance with the provisions; socialization conducted at the • Submitting a Declaration of Transparency Headquarters and Regional Commitment to the Head Office Offices; Stakeholders and Branch Offices; • Code of Conduct awareness and • The use of “Reject Gratification” PINs by all Gratification Control programs members of the Company; through compliaance quiz • Making micro learning gratification control activities . programs through BTN Smartshare media.
Anti-Fraud
The Company is committed to apply business activities Meanwhile, to ensure that every effort made to mitigate honestly, fairly and without corruption or bribery and the risk of fraud is effective, the Company continues to trustworthiness . This commitment is built because the increase BITNIZ employees’ awareness of compliance Company is aware that negative actions will greatly affect aspects through ongoing socialization of anti-fraud the Company’s name, brand, reputation and business programs and forming an Anti- Fraud Team. The Anti sustainability. (103-1) Fraud Strategy is supported by the implementation of 4 (four) pillars namely (a) Prevention; (b) Detection; For Bank Tabungan Negara, every violation of anti- (c) Investigation, Reporting and Sanctions; and (d) corruption and fraud policies are serious matter and are Monitoring, Evaluation and Follow-up. Furthermore, the taken firmly according to the policies and regulations in anti- fraud commitment is also demonstrated by the force. The implementation of anti-corruption and fraud is submission of the Clean Commitment Declaration letter to regulated by the Directors Circular No. 22 / DIR / IAD / 2014 all stakeholders of the Company. “Clean Commitments” dated 28 May 2014 concerning the Standard Operating includes clearing of bribery, corruption, collusion and Procedure of the Company’s Anti-Fraud Strategy . This nepotism (KKN), and the practice of extortion (illegal anti-corruption and fraud policy apply to all permanent levies), mark ups and all other acts that lead to KKN. (103- and contract employees, the Company’s management, 3) the Board of Commissioners and the Board of Directors who act on behalf of the Company. (103-2) The other prioritized program to enhance anti-corruption and anti-fraud cultures is that the Company regularly To uphold integrity, the Company implements Zero engages its employees in training and seminars related Tolerance to Fraud and Zero Defect program which are to anti-corruption and fraud, both organized by non- guided by the Application of Anti-Fraud Strategy for governmental institutions and government agencies Commercial Banks , as stipulated in the provisions of Bank , such as the Financial Services Authority (OJK) and Indonesia Circular Letter Number 13/28/DPNP dated other parties. This policy was taken with the aim that the December 9, 2011. Implementation of Zero Tolerance to implementation of anti-corruption prevention policies Fraud Program and Zero Defect in 2019 are prevention within the Company can be carried out properly in acts through awareness or dissemination program accordance with applicable standards and regulations. of the Zero Tolerance to Fraud and Defect programs (103-3, 205-2) in Branches and Regional Offices. The awareness or dissemination program of the Zero Tolerance to Fraud and Defect program in 2018 has been conducted in several Branches with priority order of implementation based on consideration of potential operational risks and fraud risks (based on historical data).(103-2)
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Tabel Penyimpangan internal (internal fraud) selama tahun 2019 Total Cases by Non-permanent Administrators Permanent Employee Internal Fraud Employees Previous Current Previous Current Previous Current Year Year Year Year Year Year Number of internal fraud - - 24 38 - 1
Resolved - - 24 22 - -
On-Going Process of Internal - - - 16 - - Settement
No settlement ------
Follow-up by Legal Process - - 4 5 - -
Internal Control System effectiveness and increasing cost efficiency. Bank Tabungan Negara is committed to reduce the risk of financial losses, irregularities and violations of the Violation Report prudential principle. For this reason, the Company has Policy of Whistle Blowing System (WBS) of the Company implemented an effective internal control system in line is guided by Bank Indonesia Regulation No.5/8/PBI/2003 with Bank Indonesia regulations and the Implementation amended by PBI Number 11/23/PBI/2009 and Bank of Standards for the Implementation of Commercial Bank Indonesia Circular Letter Number 13/28/DPNP concerning Internal Audit Functions. The Internal Control System Anti-Fraud Policy. WBS of the Company is part of the of the Company line with Bank Indonesia regulation internal control system in preventing the occurrence of and application of the Internal Audit Standards for irregularities and aims to detect early and prevent the Commercial Banks in order to reduce the risk of financial occurrence of irregularities or violations and gradually loss, abuse and violation of the prudential principle. create a work environment that is open, transparent, fair and accountable in the Company. In addition , the internal control system of the Bank Tabungan Negara has also been prepared in accordance WBS mechanism in Bank Tabunngan Negara ensures that with regulations regarding Internal Control System every report receives appropriate responses and follows- Guidelines for Commercial Banks and best practices up, including enforcement of sanctions that can provide of the Committee of Sponsoring Organizations of The a deterrent effect for violators and also for those who Treadway Commission (COSO) framework . With such a intend to do so. policy, the supervision mechanism has been established by the Company’s management on an ongoing basis to WBS aims to strengthen internal control mechanisms to safeguard and secure the Company’s assets , ensure the support business growth. availability of accurate reports, increase compliance with 1. Early detection and prevention of irregularities or applicable regulations, reduce the impact of financial violations; losses, irregularities including fraud and violations of 2. Gradually creating an open, voluntary, truthful and prudential aspects, as well as increasing organizational responsible work culture in the Company.
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To encourage the use of WBS, the Company provides guarantees of protection and a sense of security for reporters to encourage discipline enforcement within the Company. In this case, the Company does not apply a time limit for reporting violations . However, reporting should be carried out as soon as possible after the reporter believes the truth of the violation and is submitted no later than three months after the violation has occurred in order to facilitate further investigation.
Number of Complaints and Follow Up Year Reporting Channel Follow Up On-Going Process Report Imposed (Audit Forwarded Sanctions Messages/ Case Process/ to auditor Mail/PO on Reports By Phone/ E-Mail Closed (Not Reporting (Related BOX (Including Visit Proven) Process/ to Public Administrative Inter Crime or Sunctions) Division Corruption) Process) 2016 5 2 1 0 1 7 0
2017 1 0 4 0 2 2 1
2018 1 0 5 0 6 0 0
2019 15 26 49 80 8 2 -
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STAKEHOLDER INVOLVEMENT
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Bank Tabungan Negara defines stakeholders as most interests with the Company in a reciprocal manner, individuals or groups who have direct/indirect interests what relationships are established, what needs to be and can influence or be influenced by the Company’s communicated, and how to maximize the characteristics activities and existence. With regard to stakeholders, of the communication media in order to effectively the Company has identified key stakeholder groups communicate with stakeholders and ultimately to achieve using the stakeholder mapping method. Thus, the further targets as expected by the Company. The full list Company has clear understanding about who has the of stakeholders is presented in the following table:
Table of Stakeholders and their Involvement Involvement Stakeholders Involvement Method Priority Topic Method [102-40] [102-43] [102-44] [102-43] Stakeholders Annual GMS Once a year Achievement of the Company’s targets
Performance Exposure Quarterly
Extraordinary GMS Once a year
Customers Customer Satisfaction Survey Twice a year Service and quality of service to customers Communication Media for Once a month Customers
Call Center Service for Customers Anytime if needed
Corporate Website and Frontline Information
Direct Visit
Developer Partners Property Awards Annually Housing sales opportunities
Gathering Anytime if needed The Success of One Million Houses Program
Capacity Building Anytime if needed Transparency
Employees Employee Engagement Survey Once a year Level of employee satisfaction
Buletin Internal Once a month Policies and strategies related to employment
SmartShare Can be accessed Discussion and sharing forum related to anytime work,, quizzes, information exchange
Innovation Award Once a year Speed up business processes
Partners/Suppliers Work Contract If needed Procurement process
Investment Partners Business cooperation
Workshop Seminar Development of the Company’s merchants
Trade Union Discussion on Collective Labor Once a year Harmonious work relations Agreement Employee Rights and Obligations
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 92 93
Table of Stakeholders and their Involvement Involvement Stakeholders Involvement Method Priority Topic Method [102-40] [102-43] [102-44] [102-43] Pemerintah dan Reporting on GCG Implementation Once a year Fulfillment of information delivery and Government and of the Company’s Sharia Business reports related to the implementation of Financial Authority Unit GCG UUS of the Company
GCG Self-Assessment Twice a year Pemenuhan penyampaian dan penilaian pelaksanaan GCG di Perseroan
GCG Compliance Report Once a year Fulfillment of submission of GCG implementation in the Company
Reporting on PKBL Activities to the Four times a year Means of Submitting Information on Ministry of SOE reports related to the implementation of PKBL activities in the Company
Reporting on SOE PKBL Synergy Once a year Fulfillment of information delivery and Program report related to PKBL Synergy activities in the scope of SOE
Reporting on the Supervisory Twice a year Submission of information related to Results of Sharia Supervisory Board adherence to sharia principles in bank’s of the Bank’s Sharia Business Unit operations
Business Meetings and activities, on a If needed Improvement of corporate governance Organization national, regional and international scale
Community/Social Strategic cooperation in carrying If needed Optimization of Company’s CSR Organization/ out the Corporate Responsibility Programs Non-governmental programs, both in social and Organization environmental fields
Media Press Release & Press Conference If needed Providing information related to banking business that needs to be known by the public
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH Sustainablity Report 2019 94 95
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 94 95
MOVE TOGETHER SOLVE HOUSING DEFICIT
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The housing sector is one of the big problems facing To attract the young people to buy a house, the Company Indonesia. Until the end of 2019, the housing deficit or provides a variety of gimmicks, including, down payment backlog was still huge. According to the Ministry of (DP) starting from 1%, free of administrative fees, single Public Works and Housing (PUPR) until 2019 there were digit interest rates, 50% provision discounts, and up to 11 million households living in uninhabitable homes and 30 years loan term. The Company also offers a bundling young households that still did not have a home. Most program with KPR Zerro, which gives free principal of these young households are millennials, those born in payments for 2 years. Along with the range and existence 1980 to early 2000. From the 268 million population of of millennials that are spread throughout the country, the Indonesia in 2019, according to data from the Ministry KPR Gaeesss for Millennials is not only enjoyed in the of Public Works and Housing, there are ± 81 million capital city of Jakarta, but are also offered throughout millennials. (103-1) Indonesia.
To meet housing needs, the government has launched Since officially offered in October 2018 until November various programs, one of which is the Million Houses 2019, Bank BTN has successfully recorded the distribution Program inaugurated by President Joko Widodo at the of KPR Gaeesss at Rp9.3 trillion. This value is equivalent end of 2015. This program comes with a proportion of to distribution for 27,593 residential units for millennials. 60-70 percent of houses for low-income people (MBR). To make it happen, various stakeholders in the housing The Company also seeks to maximize other credit sector are involved, such as the Central Government, programs, such as Subsidized Mortgages, Non- Local Government, Housing Developers, Banking, Private Subsidized Mortgages, Other Housing Loans, and Non- Companies and the community Housing Loans.
Over the years, the One Million Houses Program has been BUSINESS PERFORMANCE OF THE successfully implemented. In 2019, for example, from the target set by the Ministry of Public Works and Housing COMPANY of 1,250.00 housing units, 1,257,852 housing units have Indonesia’s economy in 2019 grew slower compared to been successfully built. Thus, the total achievements the previous year. This happened due to, among others, of housing construction during the five years within the global economic slowdown in 2019. The United States 2015-2019 recorded as many as 4,800,170 housing and China Trade War was one of the factors behind the units. Through this program, the government and other global economic slowdown. With such conditions, Bank housing stakeholders hope to move together in realizing Indonesia estimates that Indonesia’s economic growth will the 11th sustainable development goals (SDGs), namely reach 5.1%, down from 5.17% in 2018. Bank Indonesia’s “Sustainable Cities and Human Settlements.” projection is below the macro assumptions submitted by the government in the 2019 State Budget of is 5.3%. For Bank Tabungan Negara, whose core business is in the housing sector and its derivative industries, housing The BI projection is based on high household deficit or backlog is both an opportunity and a challenge. consumption, improvement in the investment climate, To overcome this problem, the Company has gained the particularly non-construction investment, and well- trust of the government as a bank that disburse Housing controlled inflation in the fourth quarter of 2019. Another Loans (KPR). In this matter, Bank Tabungan Negara key pillar of growth is fiscal expansion and improvement becomes the anchor bank that disburse housing loans in exports. Thus, in general, Indonesia’s economic growth (KPR), as well as acts as an integrator in this program by in 2019 will be maintained. providing access to finance for all layers of customers, and also supporting the supply side with Construction Loans In the midst of the world economic condition which was in the housing supply chain. To channel financing, the still filled with uncertainty, Bank Indonesia’s benchmark Government provides facilitation assistance through the interest rate was marked by a gradual decline starting scheme of Public Housing Loans or Kredit Perumahan in July 2019 of 5.75, August 5.55%, September 5.25%, Rakyat (KPR) Housing of Financing Liquidity Facility and then October fell to 5%, and lasted until December 2019. interest difference subsidies, advance payments, as well Previously, the benchmark interest rate was at 6% since as houses built by developers without subsidies. (103-2) December 2018 (source:
Besides the provision of housing for low-income people, The decline in the benchmark interest rate is expected housing need for a growing millennial generation is also a to drive loandemand, thus consumers’ loan expectations great opportunity for Bank Tabungan Negara. Therefore, will also improve. With the decline in the BI benchmark in October 2018, the Company launched KPR Gaeesss rate, the deposit and lending rates will also decrease for Millennial, a Housing Loan for millennials aged 21-35 For Bank Tabungan Negara, the increase or decrease in years old. interest rates does not have a significant impact because the portion of the Company’s non-subsidized loans is
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 96 97
relatively small. Meanwhile, non-housing interest for In 2019 the Company was able to record a total loan subsidized housing has been set at 5%. growth of 7.59% compared to the industry average. The Financial Services Authority data revealed that national In addition to reducing the benchmark interest rate, in bank loans only grew by 6.08% in 2019. Disbursement 2019, BI eased the Loan to Value (LTV) rule for Housing of housing loans and housing finance by the Company Loan, especially for second house ownership and so on. reached Rp257.63 trillion. [6.b.1)] The easing, which has come into effect on 2 December 2019, will lower the downpayment (DP) that should With regard to its support for the Million Houses Program, be paid by debtors. This provision complements the the Company disbursed loans to 188.227 houses. The previous year’s policy, i;e BI easing of Loan To Value (LTV) realization consisted of subsidized loan disbursement and Financing To Value (FTV) arrangements, which were for 151.166 housing units amounting to Rp9.271.866.519 applied to the property sector as of August 1, 2018. This trillion and non-subsidized loans for 37.061 housing units policy is expected to provide strong stimulation related amounting to Rp12.498.387.985trillion. to the ease of owning a house or apartment for the First Housing Loan. With such performance, in the reporting year, the Company was still the leader in the Housing Loan market The Company has responded to the policies by in Indonesia with a share of 40.31% (data as of June 2019). implementing a business development strategy that was In the subsidized Housing Loan segment, the Company in line with the Company’s Transformation agenda, which dominated 91.55% of the total realization of mass is entering the 3rd phase of the global-playership period subsidized housing loan (data as of September 2019). and continuously innovate in developing housing loan products and loan schemes that made it easier for low- Million Houses Program income and millennial people to own a home. (103-2) As an integrator in the Million Houses Program, the Company also contributes to the construction of houses LOAN DISBURSEMENT [6.a] through Construction Loans to housing developers so as to support the growth of the property business through BI ‘S Loan To Value (LTV) and Financing To Value (FTV) financing for developers, contractors and the construction easing policies effective on 1 August 2019, have positively sub-sector as well as financing new contractors. Total impacted on Bank Tabungan Negara’s performamce in Construction Loans disbursed in 2019 reached Rp Rp 2019. Loans and financing disbursed by the Company in 9.640 million When compared to the target, the realization 2019 reached Rp255.80 trillion, an increase compared to of value of the Construction Loan distribution recorded the year 2018 which was recorded at Rp237.76 trillion. The an achievement of 73.56% compared to the 2019 target achievement was 99.29% of the 2019 Company Budget of Rp13.10 trillion. Rp Rp111,613 million. Plan. The increase was contributed by the absorption of housing loans, namely Subsidized Housing Loan and Non-Subsidized Housing Loan.
Table of Consumer Loans (Rp Billion) Loan Subsidized Non-Subsidized Other Housing Non-Housing Disbursement Housing Loan Housing Loan Loan Loan 2019 185.008 99.479 72.872 7.947 4.710
2018 172.194 87.386 71.033 8.323 5.452
2017 144.860 68.405 63.478 8.442 4.535
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 98 99
Table of Commercial Loan (Rp Miliar) Housing Loan Working Capital Loan Investment Loan 2019 26.697 10.189 10.298
2018 25.780 11.088 6.654
2017 22.759 8.324 5.024
INFRASTRUCTURE FINANCING ASSETS
Bank Tabungan Negara supports the commitment and the The growth of the Company’s assets in 2019 is supported government which is currently working on infrastructure by loan and financing disbursement. Realization of total development. The development carried out evenly assets as of 31 December 2019 was Rp Rp311trillion, or throughout Indonesia is believed to have a significant 93,39%of the 2019 Company Budget Plan of Rp332.85 impact on the development and improvement of the trillion. Compared to the 2018 achievement, the local economy. The equitable infrastructure development Company’s assets increased by 0,82% from Rp308.47 not only presents various facilities, but also contributes to trillion. With this achievement, the Company is ranked efforts to realize social justice for all Indonesian people. the 5th largest bank in Indonesia in terms of assets (bank only) (data as of November 2019, sourced from https://indoranking.com/bank-terbesar-di-indonesia). Previously, in 2013, the Company was ranked 11th.
Growth of Assets and Third Party Funds (Rp Trillion) Assets 2019 311
2018 261,37
2017 214,17
2016 300
FINANCIAL PERFORMANCE
During 2019, the Company recorded positive financial performance as indicated by good financial performance indicators. As the following tabel:
(Rp Million) Description 2019 2018 2017 Total Assets 311.776.827 306.436.194 261.365.267
Earning Assets 277.749.959 254.611.882 215.459.823
Bank Loan/Financing 255.825.159 237.757.674 198.990.581
Third Party Fund 225.400.514 230.264.033 192.948.964
Operating Income (Rp) 27.792.125 24.924.511 21.692.530
Operating Expense (Rp) 27.270.351 21.330.711 17.800.627
Net Income (Rp) 209.263 2.807.923 3.027.466
Financial Ratio Capital Adequacy Ratio (CAR) 16,70% 18,21% 18,87%
Non-performing earning assets and non-performing non-earning 4,03% 2,50% 2,31% assets to total earning assets and non-earning assets
Non-performing earning assets to total earning assets 4,09% 2,65% 2,48%
Allowance for impairment losses (CKPN) of financial assets to 2,21% 1,30% 1,10% earning assets
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 98 99
(Rp Million) Description 2019 2018 2017 NPL gross 4,42% 2,82% 2,66%
NPL net 3,19 1,83% 1,66%
Return on Asset (ROA) 0,13% 1,34% 1,71%
Return on Equity (ROE) 1,00% 14,93% 18,11%
Net Interest Margin (NIM) 3,32% 4,32% 4,76%
Rasio Efisiensi (BOPO) 98,12% 85,58% 82,06%
Loan to Deposit Ratio (LDR) 113,50% 103,25% 103,13%
Nilai Liquidity Coverage Ratio (LCR) 136,31% 108,99% 150,06%
Net Stable Funding Ratio (NSFR)* 112,36% 118,83% -*
Notes : The new LCR will be published in the Financial Report Q1 2019, but it has been calculated since 2016. *Provisions relating to the new NSFR came into effect in 2018.
The Company’s financial performance statement can be read more detailed in the Company’s 2019 Annual Report’s Management Discussion and Analysis Chapter page 169-273.
ECONOMIC BENEFITS DISTRIBUTION (103-2)
Bank Tabungan Negara’s Loans and financing have an impact on many lines of industry, especially the housing sector. Other sectors related to housing finance also increased. As an agent of development, the Company contributes to maintaining national economic growth.
To achieve this big goal, the Company has partnered with around 10,000 developers, both for subsidized and non- subsidized houses. In addition to increasing partnerships, the Company is also undertaking various other initiatives to encourage the housing sector in Indonesia.
HOUSING FINANCE CENTER
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The Company seeks to create prospective developers 1.49% per year or 3.2 million people. Assuming that through the Housing Finance Center (HFC) initiative. Government’s capability to provide houses remains the HFC partners with many parties, both formal education same, then housing backlog will increase sharply. institutions and developers through various education and training. HFC is established to become a data and The housing backlog in Indonesia has indeed been a information center related to the housing industry in dilemma for a long time. The increase in the housing Indonesia. HFC is expected to fill the information gap gap came from the supply, demand and regulator sides. related to housing sector development and become a From the demand side, the supporting factor for the trusted reference institution.HFC programs The services increase in demand for housing is the increasing number provided by HFC include Learning, Advisory, and of households every year. In addition, the number of Research. uninhabitable houses supports the increase in demand for inhabitable houses. BTN Housing Finance Center (HFC) Meanwhile, from the supply side, the number of houses The availability of houses is one of the big problems in built by developers is still unable to meet the demands Indonesia to date. This happens because housing supply of the community. The limited number of developers still cannot meet housing demand which continues in housing projects is one of the causes of the housing to increase every year. The level of home ownership backlog. In terms of regulators, the Government has not in Indonesia is still relatively low compared to other yet established rules or bodies that regulate / control the countries in the world. For example, theneighboring movement of land prices, which are the main components Singapore, where almost 90% of the people own a house forming housing prices. or residence. The Ministry of Public Works and Housing revealed that, based on the 2015 Indonesia Statistics data, To overcome the high backlog, the Jokowi-JK Government the backlog reached 11.4 million units. This figure also initiated the “One Million Houses for the People” shows that the level of home ownership of Indonesian program in 2015. This program targets housing needs for people reached only 82%. low-income people (Masyarakat Berpenghasilan Rendah or “MBR”). In the initial stage, the target of building one The need for houses every year reaches 800,000 - 1,000,000 million houses consisted of 603.516 housing units for units per year, while the ability of the government and the MBR and 296.484 housing units for the non-MBR. developers is only at 400,000 units per year. If the Financing for MBR houses is prioritized from housing loans condition does not change, then the national housing (KPR) which are almost entirely funded by the Company. backlog will be even higher, especially by looking at the From year to year, the number of houses successfully built average population growth in Indonesia which reaches continues to increase, according to the following table:
One Million Houses Program Achievement Year Number of Houses Built 2015 699.770 units
2016 805.169 units
2017 904.758 units.
2018 1.132.621 units
2019 1.257.852 units
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 100 101
Four Pillars of Property Development Land & Environment Capital (Permodalan) Legal Skill (Tanah & Lingkungan) • Financing Strategies • Land Identification • Licensing Aspects • Project Management • Taxation Strategies Techniques • Legal Property Aspects • Sales and Marketing Strategies • Financial Management • Land Development • Agreement with a third • Financial Strategy and Accounting Analysis party • People & Organization Strategy • Land Acquisition and • Negotiation skills Acquisition Strategy • Risk Management
In line with the government program, the Company Mission established the BTN Housing Finance Center (HFC) Providing superior, innovative, and integrated services in to support the government in overcoming the housing research, education, and consultation related to housing backlog problem, through a series of research and finance for clients. education in the field of property since October 2014 with the inauguration of the HFC secretariat conducted HFC has three main activities, namely Research in April 2015 by formulating objectives, vision , and the (Indonesian housing finance information and innovation mission as follows: center through various scientific studies related to markets, businesses, and housing industry trends), Learning Purpose (Indonesian housing finance education center through The leading professional center for banking learning and various forms of education and training programs), housing research in Indonesia and Advisory (Indonesian property consultation and Becoming a source of inspiration for business people in housing finance center to help stakeholders, namely the field of housing finance the community, developers, government in decision Answering the needs of the housing finance business, making). BTN HFC was established to become a data both in the banking industry and housing developers and information center related to the housing industry in Indonesia. HFC is expected to fill the information gap related to housing sector development and become a Vision trusted reference institution. HFC programs include: To be the center of research, education, and consultation in the forefront of housing finance.
HFC Main Activities Learning Seminar Seminar is a technical and academic meeting whose purpose is to conduct a thorough study of a particular topic by solving a problem that requires interaction between the seminar participants who are assisted by a professor or intellectual.
Workshop • Workshops are meetings that are designed to teach or introduce to participants both technical skills, practice or ideas that can be used in their work in the same interests and fields. • In following up the cooperation between the Company and UNDIP Semarang which was signed, from January to June 2017 a briefing session was held for final year students and ospectivepr developers of 700 participants.
Short Course • Foundation Property Developer: intended for small or novice developers. Besides this program is designed for the general public who have a passion to grow into a developer. • Professional Developers: For middle-scale developers, who have built in several locations at once. • Executive Property Developer: Is intended for large-scale developers, who are oriented to the development of an independent region or city.
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HFC Main Activities Advisory Supply Chain Consultancy and Housing Project Financing Services • Developing the concept of Housing Supermarket, in which the Company works on the industry in a total upstream-downstream manner. Going forward, the Company will become a residential gateway in Indonesia. • Housing project financing solutions focus on commercial credit activities, which not only focus on housing developers, but also support of other resources.
Home Financing Consultation Services and Other Needs • Home Financing Solutions Focus on consumer credit activities, which provide solutions for ownership of subsidized and non-subsidized KPR as well as solutions for home development. • Other financing needs solutions provide credit for the contents of the house and other family needs.
Home Financing Consultation Services and Other Needs • The housing problem facilitator bridges housing solutions with third parties who acting as resource persons, decision makers, and regulators. • The Company develops strategic partnership relations with parties who may help solve housing problems, especially related to the Housing Project.
Housing Business Incubator Services
Research and Research Development Collaboration with leading academics and research institutions with the aim that the research conducted by the Company is not only beneficial for the Company in terms of bank business, the research conducted may also benefit the wider community.
Development • Property and housing development includes various activities ranging from land selection, development of facilities and buildings to meet customer needs. This also includes the sale or rental of property when completed. • Developers generally coordinate activities on generating plans, taking into account needs and implementing ideas into property projects. • In addition to the development of other parties that contribute to housing development such as the Government, Financial Sector Industry Actors, Law, and other related sectors may contribute to the creation of new projects that are based on one innovation or incorporate some innovations from actors related to housing development • The Development pages on the HFC website will discuss and present various ideas and concepts, as well as innovations that have been applied to the development of housing projects.
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MINI MBA IN PROPERTY MDI program has several As a form of implementing cooperation programs advantages, including: in education, the Company together with SBM-ITB initiated the Mini MBA in Property program. This is a 1. The program provided is in the form of mentoring in comprehensive education program in the field of property the first week and field assignments for one week, then that refers to the four pillars of property development, in the second week there is a check point assignment, namely Land and Environment, Capital, Law, and Skill and FGD (Focus Group Discussion) to see the progress Set. The subjects of the Mini MBA in Property learning of applying mentoring to the project. study material consist of General Property Policies, 2. Participants have the opportunity to get priority in Property Business Mindset, Property Business Land and loans / property financing from the Company for the Environment, Property Business Financing, Legal and best participants in the MMDI program (in accordance Licensing, Property Management, and Field Studies. with the terms and conditions applicable in the Every participant who follows the training and meets the Company). attendance requirements will be given a Mini MBA in 3. Participants have the opportunity to get a free advisory Property certificate signed by the Company & SBM ITB, / consultation (couching clinic) in the property sector. while participants who pass the mini thesis examination 4. After graduating, participants may immediately will also have the opportunity to receive construction practice becoming a developer together with MMDI financing from the Company (in accordance with alumni. applicable regulations in the Company ).
MASTER DEVELOPER INDONESIA HOME FINANCING EDUCATION FOR (MDI) BASIC & ADVANCED LEVELS The Indonesian Master Developer (MDI) is a developer education program that focuses on the practice of development, marketing, and management of the Basic Education of Home property business. The MDI program is a continuation of Financing the Mini MBA in Property program in which participants are expected to be able to go directly into the property Basic Education of Home Financing is a property business. The program focuses in four areas of education program to educate prospective housing competence as follows: developers in Indonesia. This education includes the 1. Digital Marketing Property basics of understanding about the construction of Digital Marketing is now a more prospective marketing housing projects that focus on the development of small- strategy because potential customers start buying any scale housing projects, syllabus or curriculum compiled product through internal means, including property referring to the four pillars of the property sector namely products. licensing and legality, financing or capital, skillset in the property field, and land. This is a literacy program for the 2. Property Financing participants. After assessing the feasibility of the project, the developer is also required to rotate existing funds for Advanced Education of Home all purposes from all sources. The developer must be Financing able to make proper financial planning up to careful financial audit. Advanced Education of Home Financing is education in the field of property aimed at developers or developers 3. Building a Super Team who already have a housing project business. In this This module focuses on building a group that is solid and program, participants will be challenged to complete synergized so that each work can be more directed and case studies or problems related to property business. controlled. This super team is very important because the Participants were also invited directly to practice in development of the property business involves various kinds building a property business. The expected result in this of professional expertise or skills so the management must be training is that participants may enrich their knowledge able to manage the allocation of human capital (HC). and improve their skills or new skills in property business management. In this program participants are taught to 4. Project Operation Property develop medium or regional scale housing development In this material, the stages of planning a project projects. property will be discussed so that each process or stage may proceed in sequence. This material also discusses how to monitor and evaluate project implementation.
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BTN Housing Index This activity aims to develop and update the property The research areas are Medan, Pekanbaru, Batam, Bandar database that is owned by the Company so that its reliability Lampung, Jakarta, Bekasi City, Bekasi Regency, Bogor City, and validity can be maintained. The development and Bogor Regency, Purwakarta Regency, Karawang Regency, updating of the property and potential area database will Bandung City, Bandung Regency, Cimahi City, Surabaya be complemented by the preparation of property-related City, Bantul Regency, Sleman Regency , Yogyakarta City, studies with a focus on analyzing property growth trends, Mojokerto Regency, Mojokerto City, Gresik, Bangkalan, development and potential housing needs, consumer Surabaya, Tangerang Regency, Tangerang City, South preferences for KPR / KPA financing schemes, mapping Tangerang City, Cilegon City, Denpasar, Bandung of housing developer cooperation with banks in financing Regency, Banjarmasin City, Balikpapan City, Gowa KPR / KPA, property finance market, property-related Regency, Maros Regency, and Makassar City. credit mapping, housing development policies, and . property development licensing processes.
HFC’s performance until the end of 2019 is as follows: 4. Strategy for 2020 1. Total HCF graduates until 2019 a. Strengthening cooperation with educational HFC graduates from the Mini MBA program in institutions or institutions to produce millennial Property until 2019 are 231 Participant from the Mini generation developers with vocational schools, MBA in Property and the School of Property and 63 such as at UMM from the School of Property Developer. b. Implementation of the Property Advisory 2. HFC collaboration with universities System program and application in the form of During 2019, HFC has cooperated with Faculty of consultations in the field of property involving Engineering, Gadjah Mada University. several mentors both from the Company and 3. Strategies that have been implemented for the lecturers of the mini MBA program in property in development of HFCs order to strengthen the engagement of Mini MBA a. Strengthening the developer skillset, such as in property alumni to the Company in order to training for developers’ associations, for example increase credit potential for the Company. APERSI c. Implementation that supports business segments, b. Strengthening property literacy programs with Seminar Programs, Training and Property Literacy roadshows to universities both public and private, d. Conducting Advisory that supports the such as Binus, Trisakti and IPB implementation of Community-based housing c. Forming an advisory scheme design for the development property advisory system program d. Generate new researches that support corporate business both regularly and thematic.
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 104 105
Indonesia Master Developer (MDI) Bekasi Regency, Bogor City, Bogor Regency, Purwakarta The Indonesia Master Developer (MDI) is a developer Regency, Karawang Regency, Bandung City, Bandung education program that focuses on the practice of Regency, Cimahi City, Surabaya City, Bantul Regency, development, marketing, and management of the Sleman Regency, Yogyakarta City, Mojokerto Regency, property business. The MDI program is a continuation Mojokerto City, Gresik, Bangkalan, Surabaya, Tangerang of the Mini MBA in Property program where participants Regency, Tangerang City, South Tangerang City, Cilegon are expected to be able to get directly involved in the City, Denpasar, Bandung Regency, Banjarmasin City, property business. Balikpapan City, Gowa Regency, Maros Regency, and City Makassar. More information at https://hfc.btn.co.id/ Basic Education of Home Financing
It is a property education program to educate prospective Company Property Award housing developers in Indonesia covering the basics of understanding about the construction of housing The Company Property Award is the Company’s step to projects that focus on the construction of small scale increase synergy with developers so that it will be able to housing projects. push on the housing supply which is an important factor that supports the success of One Million Homes Program. Advanced Education of Home Through this program, the Company gives appreciation Financing to developers and partners in the country who have high quality work and professionalism in providing quality It is an education in the field of property aimed at homes. developers or developers who already have a housing project business. The award categories are: 1. National property SOE development partner; In this program, participants will be challenged to 2. National private property development partners; complete case studies or problems related to property 3. The Best Development Partner of the National Sharia business. Participants were also invited directly to practice Company in building a property business. 4. National Developer with The Best Contribution of Small and Medium Credit; Company Housing Index 5. Developer with the best contribution of National Commercial Credit; Property development and database renewal program 6. The Best of National Subsidized Mortgage Developer; of the Company so that reliability and validity can be 7. Developer with the largest realization of non- maintained which is complemented by compilation of subsidized KPR; studies related to property with a focus on analyzing 8. SOEs developers with the largest realization of non- property growth trends, development and potential subsidized KPR. housing needs, consumer preferences for KPR / KPA financing schemes , mapping of housing developer Besides to the developers, in those events, the Company cooperation with banks in KPR / KPA financing, property also gave special awards in the category of the main financing markets, mapping of property-related national partnerships to partners who have helped in loans, housing development policies, and property lending and housing finance. development licensing processes. Based on the Company’s economic performance as In the initial stage the research area covered Medan, described above, the distribution of BTN’s economic Pekanbaru, Batam, Bandar Lampung, Jakarta, Bekasi City, value in 2019 is as follows: (103-3, 201-1)
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Table of Economic Value Generated and Distributed (Rp billion) Economic Value 2019 2018 2017 Interest Income and Income from Profit Sharing 23.271,43 20.781,51 18.446,73
Income from Sharia Profit Sharing 2.448,44 2.070,24 824,85
Other Operating Income 2.109,85 2.071,59 1.605,93
Non-Operating Income (110,71) 16.475 (30,35)
Interest Income and Interest Sharing 23.271,43 20.781,51 18.446,73
Sharia Revenue Sharing Revenues 2.448,44 2.070,24 824,85
Other Operating Income 2.109,85 2.071,59 1.605,93
Non-Operational Income (110,71) 16.475 (30,35)
Total Economic Value Generated 27.719,02 41.398,34 20.847,17 Interest Expense and Bonus 16.758,07 10.355,00 9.930,64
Other Operating Expense *) 7.063,22 3.966,00 3.616,14
Employee Salary and other benefits 2.863,96 2.876,56 2.554,43
Procurement of Goods and Services 366,56 526,74 556,77
Dividend Payout to Shareholders 561,59 605,49 523,78
Government Expenditure 2.539,17 1.247,30 2.467,50
Social Community Investment Expenditure **) 6,94 5,18 5,15
Total Economic Value Distributed 30.159,51 19.582,27 19.654,41 Total Economic Value withheld 2.440,49 21.816,07 1.192,76
*) Other Operating Expenses excluding employee salaries and benefits **) Realization of CSR Program Fund Distribution
Contribution to the State
As a State-Owned Enterprise with 60.00% of its shares In addition to dividends, the Company has a contribution owned by the Government of the Republic of Indonesia, to the country through several types of tax payments. the Company continues to contribute to national Taxes paid in 2019 amounted to Rp 4,2 trillion, up economic development through dividends and tax compared to tax payments in 2018, which reached Rp2.54 payments. In 2019 the Company paid a dividend of trillion. Rp561,59 increase or decrease compared to 2018, with a dividend payment of Rp. 605.49 billion.
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Table of Company Contribution to the Government (billion Rupiah)
Type Period TAX Deposit until Dec 2019
Corporate Income Tax 411126 590.026.490.800
PPH 21 Individuals 411121 264.042.095.496
PPN 411211 17.366.799.311
PPnBM 411221 -
PBB '(GL 5612510 + GL54773) - 12.028.977.874
Other Taxes - 1.655.702.144.770
TOTAL 2.539.166.508.251
Other Taxes (details):
PPh Pasal 22 411122 2.634.765.546
PPh Pasal 23 411124 30.504.119.861
PPh Pasal 26 411127 19.839.774.125
PPh Pasal 4 ayat 2 411128 1.602.633.485.238
Bea Materai 411611 90.000.000
Other Tax Amount 1.655.702.144.770
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 108 109
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 108 109
BUILDING AND EMPOWERING THE COMMUNITY
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 110 111
Bank Tabungan Negara is a financial services institution in a. CSR is the Bank’s commitment in the form of a written the form of a Limited Liability Company, which is one of statement and allocation of Bank resources. the State-Owned Enterprises (BUMN). With such status b. CSR contributes to sustainable development, which and position, it is certain that the Company is trying to is development that meets the needs of the present look for maximum gain/profit. However, in realizing generation without compromising the ability of future economic motives, the Company cannot do it at will. It is generations to meet their needs. difficult to deny that the existence of the Company cannot c. CSR aims to improve the quality of life, which is the be separated from the environment and surrounding fulfillment of basic human or community needs for a communities. decent life. d. CSR activities are aimed at stakeholders, i.e. all parties To be able to continue to grow and develop, Bank affected and/or influencing the Bank’s performance Tabungan Negara is required to be able to harmonize both directly and indirectly, the community surrounding the three pillars (triple bottom line), which are economic the Bank’s Office and the wider community. aspect (profit), environmental aspect (planet), and aspect of people/surrounding community (people). The harmony CSR Vision between the three is the implementation of sustainable “Caring for the interests of community and environment development principle, which is “Development that by contributing to economic development and meets the current generation needs without reducing community empowerment in a sustainable manner, the ability of future generations to meet their needs.” In especially in housing/residential environment that is the Indonesia, the alignment of the three pillars also shows Company’s core business.” the Company’s portion and support for the 17 Sustainable Development Goals (SDGs), the UN program which was CSR Mission later adopted by the Indonesian government into the • Improving community welfare and the environment. Indonesian SDGs ( http://sdgsindonesia.or.id/) (103-1) • Developing the Bank’s values and culture. • Creating a positive Bank image in the public eye. The harmony among the economic, environmental, and • Increasing cooperation and mutual respect with the social aspects is realized by the Company through the community and the environment in which the Bank Social and Environmental Responsibility (TJSL) program, Office operates. as regulated in Law No. 40 of 2007 on Limited Liability Companies. The Company carries out TJSL through two The Company’s Harmony Environment Program is an approaches, which are Corporate Social Responsibility umbrella program for implementing CSR in the Company (CSR) Program and implementation of Partnership and that integrates the interests of improving the quality of Community Development Program. Both are managed people’s life in line with the Company’s business interests based on laws and regulations governing the Company so that they work together. The aim is to make the and SOEs. The provisions on the implementation of CSR Company and the community equally benefit from the and PKBL have been stipulated in the Board of Directors’ program in the long run, to increase the benefits to the Regulation No. 6/PD/CSD/2018 on the Partnership community, the Company makes every effort to involve Program, Community Development Program, and them in finding, formulating, and establishing programs. Corporate Social Responsibility Program. (103-2) The Company’s CSR implementation covers the following processes: (103-2) 1. The targets of CSR activities are individuals including, CSR Program but not limited to, a group of community members and organizers of CSR activities. Company’s CSR Policy 2. The Work Unit responsible for CSR activities is the Corporate Secretary Division. The intended CSR The Corporate Social Responsibility (CSR) Program is activities are the administration of implementation, the Bank’s commitment to participate in the sustainable coordination with related parties, and reporting on economic development in order to improve the quality the activity results. of life and environment that is beneficial, either for 3. The budget of the Company’s CSR funds is stipulated the Company itself, for the local communities, or for in the Company’s budget work plan that considers the community at large. This program is implemented based aspects of propriety and fairness. on Law No. 40 of 2007 on Limited Liability Companies and 4. The CSR program is focused on giving donations Law No. 1 of 2013. The meaning of CSR implementation aimed at charity and social assistance in the form of for the Company is as follows: (103-2) giving cash or goods, to the recipient of donations outside of PKBL. Donor recipients are the people
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 110 111
who live around the Company’s operational areas, 8. The field of CSR activities to support the the committees of the activities of educational implementation of Sustainable Finance activities organizations, non-governmental organizations includes: (NGOs), or agencies engaged in charity and social a. a. Distribution of funding to feasible micro affairs. business that does not have access yet to 5. The field of CSR activities includes programmed or funding from Financial Services Institutions (LJK) incidental activities. which is directed towards sustainable business 6. Fields of programmed CSR activities include: development; a. a. The social sector, which is activity that has an b. Training for prospective customers on sustainable impact on improving the quality of social life, business; culture, religion, and social welfare, which includes: c. Carrying out campaign of sustainable production • education, including improving services, and consumption patterns; and facilities, and infrastructure of education; d. Insurance premium subsidies for farmers, • health, including improving nutrition and fishermen, and poor and/or low-income people health, and health infrastructure; who are vulnerable to disasters. • arts and culture, including the preservation of 9. The monitoring of CSR activities is carried out by: arts and culture and the improvement of arts a. Taking notes including keeping detail records of and cultural infrastructure; each distribution of aid and CSR activities; or • sports, including improving sports performance b. Reporting periodically to regulators in accordance and infrastructure; and with the applicable regulations and monitoring • religious, including improving religious the progress of CSR activities that have been infrastructure. carried out. b. Environmental sector, which is activity that has an 10. Evaluation of CSR Activities impact on increasing comfort and environmental a. Periodically reviewing CSR activities; and/or sustainability, which among others include; b. Recommending the implementation of an environmental management, waste management, effective CSR implementation strategy to be in handling of degraded land, reforestation, line with the Bank’s purposes and objectives. land reclamation, clean water and irrigation 11. Reporting CSR activities infrastructure, air, water, and soil pollution a. Reporting the implementation of CSR in the Bank’s control, noise, water and sanitation, residential Annual Report to the GMS in accordance with the environment (drainage and flood management, as applicable regulations. well as energy savings and alternative energy use). b. If the CSR implementation uses the Community c. Economic sector, which is activity that has an Development Program budget, the use of the impact on increasing employment opportunities budget referred must be reported in accordance and business opportunities, increasing income with the applicable Minister of State-Owned and reducing poverty in the community. These Enterprises Regulation. fields include the development of cooperatives, micro finance institutions, micro-small businesses, Realization of CSR Costs micro-small industries, entrepreneurial technology, markets and marketing, economic infrastructure, \Throughout 2019, the Company realized CSR Program agricultural food crops, plantations, fisheries, cost of Rp6,942 million, an increase of Rp1,762 million livestock and food security. or 34.02% compared to that of previous year, which 7. Fields of CSR activities that are incidental include was recorded at Rp5,180 million. Based on the type of activities to ease the burden on the community due to activities, the biggest portion of the fund allocation was calamity or certain economic conditions, which include for facilities and infrastructure, which was Rp2,952 million, assistance to victims of earthquakes or other natural or 42.52% from the total CSR budget of 2019. (103-3, disasters and assistance to alleviate the burden of the 203-1, 203-2, 413-1) community due to rising prices of basic commodities.
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Table of CSR Program Cost Realization (Million Rp) Year Total cost 2019 6.942
2018 5.180
2917 5.148
2016 4.371
Table of Regional Office Area Coverage Regional Regional Regional Regional Regional Regional Office 1 Office 2 Office 3 Office 4 Office 5 Office 6 West Java DKI Jakara East Java Nanggroe Aceh West Kalimantan Central Java Darussalam
Banten Bali North Sumatra Central Yogyakarta Special Kalimantan Region
West Nusa West Sumatra South Kalimantan Tenggara
East Nusa Riau East Kalimantan Tenggara
Jambi North Kalimantan
South Sumatra North Sulawesi
Bengkulu Central Sulawesi
Lampung South Sulawesi
Bangka Belitung Southeast Sulawesi
Riau Islands Gorontalo
· West Sulawesi
Maluku
North Maluku
Papua
West Papua
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Partnership And Community Development Program The Partnership and Community Development Program operations, SOEs also carry out social tasks as supervisors or PKBL basically refers to Law No. 19 of 2003 on State- of small businesses and cooperatives. Owned Enterprises and Minister of SOE Regulation No. PER-09/MBU/12/2016 dated 16 December 2016 on PKBL regulations have been amended several times, in Partnership and Community Development Program of 2014 BTN PKBL refers to the Regulation of the Minister State-Owned Enterprises, of State Owned Enterprises (Permen BUMN) No. PER- 05/MBU/2007 dated 27 April 2007 on the Partnership PKBL is a place for the Company to carry out community Program for State-Owned Enterprises with Small Business development and empowerment programs and improve and the Community Development Program, most the quality of life of people outside the CSR Program. recently amended by Regulation of SOE Minister No. PKBL program is carried out on an ongoing basis through PER-08/MBU/2013 dated 10 September 2013. Based on two main activities which are the Partnership Program and the SOE Ministerial Regulation, the funding source for the Community Development Program. (103-1) Partnership and Community Development Program (BL Program) comes from the company’s budget (Fostering In accordance with the provisions, the Company issues a SOE) which is calculated as a cost, each a maximum of 2% separate report covering PKBL’s performance which forms of the previous year’s net income. an inseparable part of the Company’s Annual Report. PKBL performance report is adjusted to the provisions of Based on the Regulation of Minister of State-Owned the Minister of SOE Regulation No. PER-02/MBU/7/2017 Enterprise No. PER-07/MBU/05/2015 dated 22 May 2015 dated 5 July 2017 on the Second Amendment to the on the Partnership Program of State-Owned Enterprises Regulation of Minister of State-Owned Enterprise No. with Small Business and Community Development PER-09/MBU/04/2015 on Partnership Program and Program stating that the previous regulations, which Community Development Program of State-Owned were the Regulation of SOE State Minister No. PER-05/ Enterprise. MBU/2007 dated 27 April 2007, SOE Minister Regulation No. PER-20/MBU/2012 dated 27 December 2012, SOE Basis of PKBL Implementation (103-2) Minister Regulation No. PER-05-MBU/2013 dated 1 May 2013, SOE Minister Regulation No. PER-07-MBU/2013 dated 27 June 2013, SOE Minister Regulation No. PER- The Partnership and Community Development Program 08-MBU/2013 dated 10 September 2013, and Letter of (“PKBL”) of PT Bank Tabungan Negara (Persero) Tbk the Deputy of Restructuring and Strategic Planning of (“BTN”) was formed in accordance with the decision of SOE No. S-92/DS.MBU/2013 dated 3 April 2013 were the Minister of Finance of the Republic of Indonesia No. revoked and declared invalid. 1232/KMK.013/1989 dated 11 November 1989, which was then renewed by Letter of the Minister of Finance State-Owned Enterprise Minister Regulation No. PER- of RI No. 306/KMK.013/1991 dated 20 March 1991 in 07/MBU/05/2015 dated 22 May 2015 was revoked again, conjunction with No. 368/KMK.013/1991 dated 19 April which was replaced by Regulation of Minister of State- 1991, which was then judicially reviewed by decision of Owned Enterprises No. PER-09/MBU/07/2015 dated the Minister of Finance RI No. 316/KMK.016/1994 dated 3 July 2015 on Partnership Program and Community 27 June 1994 on Guidelines for the Development of Small Development Program of State-Owned Enterprises. Business and Cooperatives through the use of funds from the profit share of State-Owned Enterprises (BUMN). In 2016, PKBL regulations were then changed with SOE Minister Regulation No. PER-03/MBU/12/2016 dated The regulation was subsequently updated with the 16 December 2016 on Amendment to Regulation of Minister of SOE Decision Letter No. KEP-236/MBU/2003 State Minister of State-Owned Enterprise No. PER-09/ dated 17 June 2003 on the Partnership Program of State- MBU/07/2015 and became effective in the 2016 fiscal Owned Enterprises with Small Business and Community year. The latest SOE Ministerial Regulation, among Development Program and Circular of the Minister of others, regulates the source of funds for the Partnership SOE No. SE-433/MBU/2003 dated 16 September 2003 Program and the Community Development Program, on Guidelines for the Implementation of SOE Partnership which originates from the provision of net income and/or Program with Small Business and the Community budget calculated as costs and operational expenses of Development Program. PKBL to be borne by the Fostering BUMN.
The activities as regulated in the decision letters above In 2017, PKBL regulations were then changed with SOE are Government policies carried out by all SOEs with Minister Regulation No. PER-02/MBU/7/2017 dated the intention that besides conducting their business 5 July 2017 on Second Amendment to Regulation of
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State Minister of State-Owned Enterprise No. PER-09/ Tenor MBU/07/2015 and became effective in the 2017 fiscal The maximum loan tenor of the partnership program is 5 year. The latest SOE Ministerial Regulation, among (five) years, by considering the plan to use the loans and others, regulates the maximum changes in the number limits on assets or turnover owned by the fostered partners. of fostered partner loans, the amount of administrative services, the minimum period of business, the parties Loan Distribution allowed in the distribution of partnership programs, as Loans are given directly to the fostered partners well as the distribution of partnership program funds by individually or in groups. Administrative Services Special SOEs. (Loan Interest Rates). From January 2017 to June 2017, the amount of loan administration services for the Main Activities Partnership Program is set once, at the time of the loan disbursement, which is 6% (six percent) per year from the The main activities of the Company’s PKBL are lending loan balance at the beginning of year in accordance with and providing coaching funds through the Partnership PERMEN No. PER-09/MBU/07/2015. Program and providing assistance through the Community Development Program. After July 2017 to the present, the amount of loan administration services for the Partnership Program is Partnership Program (PK) set once, at the time of the loan disbursement, which is 3% (three percent) per year from the loan balance at the The Partnership Program is aimed at fostered partners beginning of year in accordance with PERMEN No. PER- who have a small business scale for productive investment 02/MBU/7/2017. and/or working capital purposes. Partnership Program Funds for Fostered Partners Are The requirements that must be met by the fostered Distributed in the Form of: partners to obtain the Partnership Program funding are 1. Loans to finance working capital and/or purchase as follows: fixed assets in order to increase production and sales; • Meeting the criteria to be categorized as Small 2. Special loans to finance short-term needs in the Business. context of fulfilling orders from business partners of • In the form of an individual business, a business entity the Fostered Partners; that is not a legal entity, or a business entity with a 3. Fostering expenses: legal body, including cooperatives. a. To finance education, training, research, • Has conducted business activities for a minimum of 6 apprenticeship, marketing, promotion, which (six) months except for small business established or involves improving the quality of human resources formed as BTN program implementation. and the ability to manage their business; • Has the potential and business prospects to be b. Fostering expenses are in the form of grants developed and has a business license or business and a maximum of 20% (twenty percent) of the statement from the authorities. Partnership Program funds disbursed in the • Providing or owning a share of 25% (twenty-five current year; and percent) of the funds needed for grants and loans. c. Fostering expenses can only be given to or for • Priority is addressed to small business that does not the benefit of the Fostered Partner. yet have the ability to access banks (non-bankable). Community Development Program Maximum Loan Amount The maximum limit of the loan amount is Rp200,000,000 The Community Development Program, hereinafter (two hundred million rupiah). referred to as the BL Program, is a program to empower the social community conditions by SOEs in the SOE Loan Form business area through the utilization of SOE funds. Loans to fostered partners are provided in the following forms: The Community Development Program is distributed in 1. Loans to finance working capital and/or purchase the form of: fixed assets in order to increase production and sales. 1. Natural disaster victim assistance; 2. Additional loans to finance short-term needs in the 2. Educational assistance, which can be in the form of context of fulfilling orders from business partners of training, educational infrastructure and facilities; the Fostered Partners. 3. Health Improvement Assistance; 4. Public Facilities and/or Infrastructures Construction assistance;
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5. Worship Facilities Assistance; PKBL Vision 6. Natural Preservation Assistance; Caring for the interests of community and environment by 7. Community social assistance in the context of poverty contributing to economic development and community alleviation includes: empowerment in a sustainable manner, especially in a. Electrification in areas without electricity; housing/residential environment that is the Company’s b. Providing Clean water facilities; core business. c. Providing Toilet Washing Facilities (MCK); d. Education, training, apprenticeship, promotion, PKBL Mission and other forms of assistance related to efforts to increase the economic independence of Small 1. Increasing people’s welfare and improve the Businesses in addition to the Fostered Partnership environment; Program; 2. Developing the Bank’s values and culture; e. Home improvement for the poor; 3. Creating a positive Bank image in the public eye; f. Seeding support for agriculture, animal husbandry, 4. Increasing cooperation and mutual respect with the and fisheries; or community and the environment in which the Bank g. Business equipment assistance. Office operates.
PKBL Organizational Structure
Corporate Secretary
Administration Corporate Investor Relations Protocol Communication
Corporate Budgeting & Investor Promotion & Media Administration Communication Relation
Marketing Capital Protocol Communication Market Support Coordinator
Communication Development Research & Valution Program
Web Content Coordinator
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Partnership Program 2019 (103-3, 203-1, 203-2, 413-1)
The Partnership Program is an economic empowerment program aimed at helping to improve the ability of the Company’s small business fostered partners to become independent while contributing to improving the welfare of the community around the operational area. Whereas the Community Development Program is focused on improving the quality of life and empowering the social conditions of the community. (103-2)
The Company channeled the Partnership Program funds to fostered partners who have a small business scale for investment purpose and/or productive working capital distributed by region and business sector. During the reporting year, the Company disbursed loans for the partnership program in the amount of Rp16,399 million. (103-3)
Community Development Program The Community Development Program (BL) is a program of empowering the social conditions of the community which aims to help improve the community welfare, especially the communities around the Company’s operational areas. The funds for the Community Development Program are channeled through various aid activities including natural disasters, environmental preservation, education and training, public infrastructure and facilities, religious facilities, health and social improvement in pover ty alleviation. (103-1, 103-2)
Realization of Community Development Funds (103-3, 203-1, 203-2, 413-1)
In 2019, the realization of the Community Development Program distribution assistance amounted to Rp 20,072 million, a decrease of Rp1,710 million or 7.85% compared to that of 2018, which was recorded at Rp21,782 million. In the reporting year, funds were distributed to communities in 34 provinces through the Company’s six working areas. This distribution reached 91.15% of the budget in 2019 amounting to Rp22,000 million.
Table of Community Development Fund Allocation (million Rp) Year Total Fund Allocation 2019 20.072
2018 21.782
2917 20.033
2016 13.153
*restated
Community social assistance in the context of poverty alleviation includes: 1. Electrification in areas without electricity. 2. Clean water facilities. 3. Toilet Washing Facilities (MCK). 4. Education, training, apprenticeship, promotion, and other forms of assistance related to efforts to increase the economic independence of Small Businesses in addition to the Fostered Partnership Program. 5. Home improvement for the poor. 6. Seeding support for agriculture, animal husbandry, and fisheries; or 7. Business equipment assistance.
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BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 118 119
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 118 119
CREATING A GREEN BANK
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 120 121
Environment awareness is a global issue needed to As a country that contributes 1.49% for the total support, including from corporations such as Bank Taruna world emissions, Indonesia is committed to reducing Negara. The issue arises to address the environmental greenhouse gas emissions. This commitment was damage and its impact that becomes widespread. Besides manifested in the formulation of a National Action Plan the low awareness about the importance of preserving for Reducing Greenhouse Gas Emissions (RAN-GRK), as the environment, environmental damage is also caused outlined in Presidential Regulation No.61 of 2011. by various human activities, such as industrialization which is characterized by the use of fossil fuels; tree To meet its responsibilities, as a company, Bank Tabungan logging for settlements, agriculture or plantations; the Negara fully supports the government’s commitment use of uncontrolled fertilizers; and so on. to reduce greenhouse gas emissions. Moreover, in its daily operational practices, the Company also produces These human activities produce various greenhouse greenhouse gas emissions, among others, from the use gases, such as carbon dioxide and methane. The of electricity and fuel, both of which are fossil-based. In greenhouse effect causes an increase in the earth’s addition to saving energy and other natural resources, average temperature, melting of polar ice caps, and the Company is also committed to implementing a green climate change. At a broader level, the global warming office so that it can immediately reduce the impact on the happens with the impact of which has become worse for environment. (103-1) humans and other living things to present. Meanwhile, as a financial institution, the efforts of Bank To prevent the wider impacts of climate change, the Paris Taruna Negara to become a green bank are performed by Agreement was issued - the agreement in the United providing certain environmental requirements, including Nations Framework Convention on Climate Change an Environmental Impact Assessment, before starting (UNFCCC) concerning the mitigation of greenhouse gas financial sevices. Environmental requirements are very emissions, adaptation, and finance. The signing took important so that the Company can properly channel place to coincide with the commemoration of Earth Day the funds against the violating action on environment on April 22, 2016 in New York, United States. 194 countries performed by debtors. In other words, the Company have also signed, including Indonesia. The percentage of becomes highly committed to managing environmental, greenhouse gases ratified by Indonesia is 1.49%. social and governance risks in financing activities.
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• Adapting ecolabelling regulations or the use of green COMPANY’S COMMITMENT materials that have been certified by the Indonesian FOR ENVIRONMENTAL Ecolabeling Institute (LEI) in the financing of medium- level construction. PRESERVATION • Ensuring that the settlement or construction built To become a green bank, one of the efforts made by Bank has passed the Greenship Home Assessment from Tabungan Negara is to implement sustainable finance, as Indonesia’s Green Building Council. stipulated in the Financial Services Authority Regulation • Making a requirement for developers to plant trees Number 51 / POJK.03 / 2017 concerning the Application within the settlement or providing a large portion of of Sustainable Finance for Financial Institutions, Issuers social and environmental facilities and infrastructure. and Public Companies. • Making an Exclusion List that lists activities and practices that the bank refuses to conduct--activities In daily bank operations, the commitment of Company that have a negative impact on people and planet. to environmental preservation in the Head Office area is as follows: One of initiatives stated in Sustainable Financing Action • Has a temporary disposal site (TPS) with a capacity of Plan 2019 related to the environment is Financing for 5 m³ and transportation to get there every day. Green Construction. The program is implemented • Has 4 (four) infiltration wells with each capacity is 48 through financing vertical housing development m³. financing with the Transit Oriented Development (TOD) • Implementing energy savings: concept and infrastructure construction (homestay) and a. Using solar power for water heating. tourism development. Based on evaluations conducted b. Setting water discharge for water consumption by the Company, this program has been successfully (toilets, ablution places, etc.). implemented (100%).[6.b.2)] c. Arrangement of operational utilities and electricity automatically using BAS (Buidilng Automation Prior to the official Sustainable Financing Action Plan System) for lights outages, elevators and AC took effect for the Company which was as of 1 January chiller units. 2019, Bank Tabungan Negara had also managed banking • Preventing environmental pollution through operations with minimal pollution on banking activities and continuous improvement activities: financial products. The policy was taken as a form ofthe d. Using Freon air conditioners (R32, R134A and R410). Company’s compliance with laws and regulations related to e. Has a hazardous waste storage area with a capacity the environment, especially Law No. 32 of 2009 concerning of 104.5 kg. the Environmental Management and Preservation. In this f. Has a building to wastewater treatment plant with condition, compliance is the basis for the implementation a capacity of 260m³ / day. The current condition is of preservation and management of environmental impacts 220 m3 / day in accordance with the Wastewater on all activities, products and services of the Company. By Discharge Permit (IPAL) issued on July 19, 2018. observing the prudential principle, the Company ensures • No plastic waste program by reducing the use of that all relevant activities have environmental permits in bottled mineral water and disposable cutlery at events accordance with the provisions. In 2019, there were no or meetings, both with internal and external parties violation of regulation concerning the environmental aspect. and encouraging awareness of the use of tumblr or [103-3, 102-11, 307-1] plastic-free drinking bottles.
For the Company, the Sustainable Financing Action Plan GREEN OFFICE HEAD of 2019-2023 is a guide for integrating environmental, social, and governance (LST) aspects into its daily OFFICE strategies and operational activities. Explicitly the Environmental management in banking practice is also one purpose of implementing sustainable financing is outlined of the objectives of the Company’s Sustainable Financing in one of the Sustainable Financing Action Plan programs Action Plan, namely; “Development of sustainable financial concerning the environment, namely conducting a social operations through the application of the green office and environmental risk assessment as an initial step in concept and sustainable procurement”. In this report, the preparation of the Sustainability Risk Policy, which the scope of implementing green office is focused on the includes: (103-2) activities at the Company’s Head Office. • Requirements of Environmental Impact Analysis, Flood Recommendation and Licensing. Green banking practice as well as concrete support for • Conducting site visits or field observations to the Company towards global development goals (SDGs), determine that the residential land that will be built is especially the 6th SDG concerning Water and Sanitation, not a green land, disputed land, and others. the 7th SDG concerning Clean and Affordable Energy, the 13th goal of Climate Change and Action, and the 15th SDG concerning Life on Land.
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Paper Management [6.d.2)] Related to the paper that is no longer used, especially Paper is an important need for Bank Tabungan Negara important documents, Bank Tabungan Negara uses operations. One of the use of paper is for office paper shredders. Whereas papers which do not include administration, such as mailing, memos, printing various important documents will be given to third parties to be company reports, registration, and printing customer reused as well as recycled. Although paper waste can be books, recording deposit transactions, deposit-taking, recycled, the Company does not use the recycled paper transfer and others. Paper is also used as proof of in its daily operations. [6.d.2)] transactions using an ATM machine. The paper is also used as tissue roll for the bathroom and other rooms with Energy various types of purposes. (103-1) Bank Tabungan Negara uses the main energy in the form The Company realizes that the raw material for paper of electricity and fuel oil. Electricity provided by PT PLN, is wood pulp obtained from mature tree logging. For while fuel is provided by PT Pertamina or other similar example, to produce one ton of paper, 17 mature trees companies. Electricity is used for lighting, generating are needed. Not only does it need raw materials for office infrastructure such as elevators, copiers, air tree trunks, making one ton of paper also requires 7,000 conditioners, and others. While for the fuel oil, besides gallons of water, 2 barrels of oil (equal to 317.98 liters), and being used as generator, fuel is also used for office produces one metric ton of greenhouse gas emissions operational vehicles. (103-1). (Carbon Dioxide Equivalent / CO2eq) . The Company realizes that most of the electricity used Based on these data, the Company attempts to reduce is currently generated by Coal-fired Power Plants, which the use of paper optimally, Bank Tabungan Negara also uses coal as their fuel, which includes non-renewable reduces negative impacts on the environment, such as energy sources. The same category applies to the types deforestation and greenhouse gas emissions. (103-2) of fuel oil used by the Company, namely diesel and gasoline. Due to decreasing availability of electricity and The reduction of the use of Paper is performed by the fuel, the Company strives to improve efficiency so that Company through digitizing documents. With digitalization, energy waste can be prevented. In this report, the energy paper usage can be reduced as follows: (103-3) used by the Company refers to the Head Office. In the 1. No longer using fax, Mailing uses electronic mail. following year’s report, the Company will expand the 2. Paperless: disposition and distribution of letters using scope of energy use and savings initiatives. (103-2) the Iflow system. 3. Smart Branch: No longer using deposit receipts and The energy management programs applied in BTN Tower optimizing digitalization. include: 4. Reusing paper for Internal Memos. 1. Utility and electricity operational set-up such as 5. Checking script to prevent mistakes before printing. blackouts, elevators and chiller units apply the BAS 6. For certain purposes, using the both sides of the (Building Automation System) system which makes paper if possible,, the management of utility operations easier which results in efficiency. Meanwhile, to reduce the use of tissue that results in 2. The lighting set-up is divided in each zone or division tissue waste, the Company installed hand dryers in the to turn off lights of idle rooms easier. restroom. 3. Energy saving awareness / socialization by turning off the unused electrical equipment (Turn off lights when In the reporting year, we could not deliver paper usage idle, unplug electrical equipment that is idle, install data, and will deliver it in the following year’s report. (103- signage on toilets to reduce the use of water, etc.) 3, 201-1) 4. Use of solar water-heaters to supply water in the Directors’ restroom. [6.d.3) b)] 5. Arrangement of chiller and elevator unit operating schedules based on operational needs
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Chiller Operation Schedule Number of Chillers in operation Chiller turns on at 06.00 WIB 2 Units
Chiller turns on at 06.30 WIB 3 Units
Chiller turns on at 07.00 WIB 4 Units
Chiller turns on at 07.30 WIB 5 Units
Chiller turns off at 14.00 WIB 1 Unit
Chiller turns off at 16.00 WIB 1 Unit
Chiller turns off at 06.00 WIB 2 Units
Chiller turns off at 06.00 WIB 1 Unit
Elevators Operation Schedule Number of Elevators in operation All elevators turn on at 06.00 all units/operational
Elevator turns off at 18.00 2 units
Elevator turns off at 20.00 2 units
Elevator turns off at 22.00 2 units
Low zone, high zone, and parking elevators on Saturday/Sunday 1 lift
1. Replacement of TL and essential lamps into LED lamps 2. Modernization of 10 elevator units with the latest system control and mechanical upgrades that are more efficient in electricity consumption and replacement of damaged AC units or the procurement of new AC units with the inverter feature. 3. Advertising media uses the Videotron LED system. 4. Use PDAM water as the main water source in the BTN Tower Building.
Chiller-type air conditioning units consume energy significantly in BTN Tower Building as well as elevators. To manage both of them, the Company has set operating hours based on daily load requirements. With the management as mentioned above, based on the data from PT Binayasa Putra Batara, Menara Unit, as the manager of Menara BTN Building, refers to electricity payments to PT PLN)the energy consumption in BTN Tower in 2019 is as follows: (103-3, 302-1) [6.d.3)a)]
Total use of energy (MJoule) Energy Sources 2019 2018 2017 Use of electricity 27.388.800 28.309.608 28.928.448
Diesel 144.748,8 203.876,10 240.314,60
Total 27.533.548,8 28.513.484,1 29,168,762.6
Notes: 1 kWh = 3,6 MJoule Net Calorific Value solar (Diesel) = 35,90 MJoule/liter *Restated
Total Energy Savings (103-3, 302-4) [6.d.3)b)] year Total savings (%) 2019 2,25%
2018 2,30%
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 124 125
Water Besides energy, water is one of the vital needs for the 2. Constructing 2 (two) infiltration wells with each Company. Water is used for various internal needs, such capacity of 48 m³, so that the total absorption capacity as ablution, rinse water in toilets, watering plants, filling of rainwater can reach 96 m³. pond fountains, and so on. Water needs are mostly 3. Water distribution for the internal use (toilets, supplied by PDAM, and some are taken from deep wells. ablutions, etc.). The use of water in this report refers to the Head Office 4. Waste water has been processed through the STP / BTN Tower. In the following year’s report, the Company (Sewage Treatment Plan) so that it is not harmful will expand the scope of water use and its saving efforts. to the environment and has obtained a Waste (103-1) Water Discharge Permit (IPAL) from the relevant institutions. The wastewater treatment plant (IPAL) Similar with energy, the supply of clean water becomes of the BTN Tower currently has a capacity of 260m³ limited. The use of ground water is tightly regulated, while per day. Currently, the output reaches 220m3 / day the raw material of water that is managed by the PDAM in accordance with the Wastewater Discharge Permit is also polluted so it needs harder efforts to obtain clean (WWTP) issued on july19, 2018 water supply. Therefore, the Company is also committed to 5. Utilization of STP (Sewage Treatment Plan) and conserving the use of water. (103-2) rainwater storage for the needs of watering plants, filling fountain ponds and car washing. [6.d.2)] The following is water management by the Company which aims to minimize excessive water use so that the By implementing efficiency initiatives, according to data Company is able to reduce the use of clean water: (103-2) obtained from PT Binayasa Putra Batara, Menara Unit, as the manager of Menara BTN Building, refers to the 1. Water use is optimized using PDAM as the main water payment of water to the PDAM and monitoring through supply in accordance with the Regional Regulation flow meters: (103-3, 303-1) related to ground water use.
Table of water use in the 2017-2019 Menara BTN Building Water Sources 2019 2018* 2017 PDAM 93.537 97.859 97.370
Deep Well 199 579 171
Total 93.736 98.438 99.558 *Restated
Based on the table, the Company succeeded in reducing Considering the negative impact on the environment, the water usage in 2019 by 4,702 m3, which shows an increase/ Company continues to reduce greenhouse gas emissions decrease of 4,78% compared to 2018. (103-3) [6.d.2)] produced by bank operations. The policies applied, among others, by conducting efficient use of electricity Emission and fuel.
Greenhouse gas emissions are one of the factors of To calculate the greenhouse gas emissions produced global warming and climate change. In day-to-day by the Company, the simplest calculation method is operations, the Company produces greenhouse gases, to multiply the total fuel consumption (in GJ) by the among others, from the use of fuel (direct GHG emissions emission factor (FE). FE is a coefficient that shows the [Scope 1]) and electricity (indirect GHG emissions [Scope amount of emissions per unit of fuel consumed in units of 2]. Indirectly. Greenhouse gas emissions produced in the Ton / GJ. In this condition, the emission factor used is the form of carbon dioxide (CO2), Methane (CH4), Nitrous default emission factor (IPCC 2006 GL). The following FE Oxide (N2O), SOx (Sulfur) and NOx. (103-1) table is the FE from fuel oil (operational vehicles / moving sources) and diesel fuel (generators / stationary sources) for the calculation of the Company’s GHG emissions.
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 124 125
CO2 GHG emission factors, Combustion from immovable and mobile sources FE Default IPCC 2006 FE Default IPCC 2006 CO2, Immovable Source (ton CO2, Moving source / gj) Type of fuel (ton / gi) Commercial & Office Housing highway transportation Natural Gas/ BBG 56100 56100 56100
Premium (without catalyst) - - 69300
Solar 74100 74100 74100
LPG 63100 63100 -
Kerosene - 7190 -
Source: adaptation of guidelines for implementing National GHG inventories. Book II Vol. 1 Ministry of Environment in 2012 Based on the Emission Table above, the direct greenhouse from the use of fossil fuels) produced by the Company gas emissions (scope 1, i.e. greenhouse gas emissions are as follows:
Table of Direct Greenhouse Gas Emissions (Scope 1) of 2018 Energy Total CO2 Emissions Consumption FE Default FE Default Produced (Ton/ Fuel [Gigajoule] IPCC 2006 CO2 IPCC 2006 CO2 GigaJoule) Unmoving Source Unmoving Source 2019 2019
Fuel 5.801 - 69.300 402,009,300
Solar 148 74.100 - 10,952,000
Total 5.949 74.100 69.300 412,961,300
While for indirect greenhouse gas emissions (scope 2, i.e. the 2015-2024 PLN Electricity Supply Business Plan which sourced from outside energy in the form of electricity) are is 0.934 kg CO2/Kwh (2017). Based on this calculation, obtained by multiplying electricity consumption (in Kwh the indirect greenhouse gas emissions (scope 2) are as per year) with the average grid emission factor issued by follows: the Ministry of Energy and Mineral Resources referring to
Table of Indirect Home Gas Emission of 2019 (Scope 2) Generated CO2 Emissions (kg Year / Kwh) Energy Consumption Unit 2019 2018 2019 2018
Electricity Kwh 7.608.000 7.105.872 7.863.780 7.344.770,52
From the calculation results, during the reporting period, the Company produced direct greenhouse gas emissions (scope 1) from the use of diesel and gasoline which were 412,961,300 tons CO2eq. While for the indirect greenhouse gas emissions (scope 2) from the electricity consumption were recorded as 7,105,872 kgCO2, decreased compared to 2018, which was calculated as 7,344,770.52kg CO2.
Efluent And Waste
Waste is a serious problem for the environment. Without proper management, waste can become a source of pollutants for land and water which then results in damage to the supporting capacity of the environment. In conducting business activities, Bank Tabungan Negara produces solid and liquid waste, both included in hazardous and toxic waste (B3) and non-B3 waste. Solid waste produced by the Company is in the form of internal waste; scraps of electronic equipment, lamps, batteries, furniture; and others. Whereas liquid waste includes waste oil from operational vehicles and generators, waste water from toilets, cafes and others. (103-1)
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To reduce waste production, the Company issued an For B3 waste management, the Company cooperates with appeal not to use disposable plastic foods and beverages. third parties who already have the Ministry of Environment The company also provides enough trash bins on each and the Ministry of Transportation permits. B3 waste floor. The waste is then disposed to a temporary landfill management in the Company is carried out by referring with a capacity of 5 m³. whereas B3 waste is disposed in to PP 101 of 2014 concerning B3 Waste Management. a temporary storage area for B3 (Toxic and Hazardous Specifically for leaf litter, the Company processes it into Waste) with a capacity of 104.5 kg. a decomposer. (103-2)
Furthermore, the waste produced by the Company will be Through these various efforts, the volume of waste processed in accordance with the applicable regulations. produced and managed is as follows: (103-3, 306-2)
NO B3 Waste Type Treatment 2017 2018 2019 1 Building Trash Produced 38.400kg 28.800kg 30.706kg
Waste Food Stored in a disposal site 0 0 0
Waste Drinks, Paper, Cardboard Submitted to Third Parties Yes Yes Yes
Licensed
2 Used Oil Produced 120kg 20kg 15kg
Stored in a disposal site 0 0 0
Submitted to Third Parties Yes Yes Yes
Licensed
3 Used Accu Produced 20kg 60kg 20kg
Stored in a disposal site 0 0 0
Submitted to Third Parties Yes Yes Yes
Licensed
4 Lights Produced 10kg 4.4kg 7,5kg
Stored in a disposal site 0 0 0
(Tl, Plc, Ballast, Cable lights) Submitted to Third Parties Yes Yes Yes
Licensed
5 Freon Tube Waste Produced 10kg 20kg 10kg
Stored in a disposal site 0 0 0
Submitted to Third Parties Yes Yes Yes
Licensed
With good waste management, the Company can reduce of 9,600 kg. While the amount of hazardous waste the non-hazardous and poisonous waste production, generation has decreased from 104.4 kg in 2018 to 52.5 which is building waste was recorded at 30,706 kg, up kg in 2019, or reduced by 49.71%. (103-3) 6.62% compared to the previous year, with a reduction
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Cost of Solid and Liquid Waste Management in BTN Tower Building Paid for the Third Party Transportation of Wet and NO Month STP Treatment Dry Trash 1 JANUARY 9.900.000 9.350.000
2 FEBRUARY 9.900.000 9.350.000
3 MARCH 9.900.000 9.350.000
4 APRIL 9.900.000 9.350.000
5 MAY 9.900.000 9.350.000
6 JUNE 9.900.000 9.350.000
7 JULY 9.900.000 9.350.000
8 AUGUST 9.900.000 9.350.000
9 SEPTEMBER 9.900.000 9.350.000
10 OCTOBER 9.900.000 9.350.000
11 NOVEMBER 9.900.000 9.350.000
12 DECEMBER 9.900.000 9.350.000
TOTAL 118.800.000 112.200.000
Management and Environmental Conservation Expenses [6.d.1)] During 2019, the Company spent Rp231,000,000 for environmental management and preservation which covers the STP (Sewage Treatment Plan) and for waste management costs.
Environmental Compliance
As a form of corporate responsibiliy, Bank Tabungan Negara is always responsible and compliant with every regulation that apply in the environmental sector. In addition, the Company is committed to be aware and contributive in protecting the environment through various programs and activities held during the reporting period. This commitment and concern is the Company’s contribution to the conservation and preservation of the environment. [103-1, 103-2]
The Company’s commitment in complying with various environmental regulations and regulations has resulted in the absence of non-monetary fines and sanctions due to non-compliance with environmental laws and regulations. In addition, there are also no cases of environmental complaints whose resolution is submitted through disputed resolution mechanisms, such as appealed to the court. [103-3, 307-1] [6.e.6)]
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 128 129
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 128 129
REALIZING THE BEST HUMAN CAPITAL
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 130 131
Human capital, namely individuals who work for Bank Tabungan Negara, are one of the most important assets for the development and sustainability of the company. The employees are the motor and first-line actor of services and organizational transformation that are currently carried out by the Company. With their presence, the Company will be able to realize the targets and performance set in the bank’s business plan. (103-1) [6.c.1)]
To realize the best performance, the Company requires employees who are professional, competent in their respective fields, dedicated and loyal. In addition to a truly selective recruitment process, the quality of such employees can be established through periodic education and training in accordance with the needs of the Company. Other factors that also contribute to the creation of the best performance are equality of employment opportunities between workers, fair review, remuneration according to labor provisions, and the availability of a safe and comfortable work environment for all employees. (103-1) [6.c.2)a)]
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Development of Performance Management Human Capital Development that Encourages Talent Management Strategies System Performance management system is enhanced through Human capital management of Bank Tabungan Negara the following stages: is under the Strategic Human Capital Directorate, which a. Improving performance management system policies is led by the Director of Strategic Human Capital as in line with organizational changes to support the stipulated in the Board of Directors’ Decree No. 04 / DIR achievement of the Bank’s targets. / KD / TMO / 2018 on April 30, 2018. In performing its b. Implementing a performance management system by duties and responsibilities in the field of Human Capital setting appropriate, measurable and realistic targets management, the Directorate of Strategic Human Capital to encourage talent management systems. are divided into three Divisions namely Human Capital c. Optimizing the performance coaching and counseling Management, Human Capital Strategy, and Learning process to obtain high performance. Center Division. Human capital management in the Company starts from planning, recruitment, competency Implementing Remuneration System development, performance management systems, Governance in Accordance with Best job and career design, remuneration and benefits, Practices productivity analysis and other matters related to human Good remuneration system governance aims to increase capital employee engagement with the Bank. The Bank’s remuneration system is designed according to best As a long-term human capital development strategy, the practice and is maintained its competitiveness in the Company has prepared a Roadmap for human capital market and the fairness for the Bank. (HR) based on the Bank Transformation stages as follows: (103-2) Strengthening Corporate Culture Towards the Global Playership Era The Bank conducts comprehensive human capital In accordance with the stages of the Bank’s transformation, development initiatives that begin with the alignment the Corporate Culture is intended to strengthen cultural of agile and high capability organizations based on a internalization to support digital transformation towards process of transformation of human capital to increase the global playership stage. employee productivity and high competitiveness. Optimization of Employee Communication & Implementation of Organizational Social Media Network to improve Bank EVP Structure Transformation Technological developments open the social media The organizational development plan is intended to access as a tool to deliver management messages in support the implementation of an agile and high-capacity order to improve Bank EVP. organizational structure transformation to achieve the Bank’s business targets. Improving Human Capital Governance and Talent Mobility Alignment with Subsidiaries Digital Workforce Planning & Affiliations To support the achievement of the Bank’s business targets Human capital policy governance is also intended to and the growth of Bank digitalization aspect, the need for integrate the Bank’s talent mobility with subsidiaries and employees (workforce) in quantitative terms needs to be affiliations. planned. Therefore, Digital Workforce Planning needs to be prepared in which this is in line with the transformation Integration of the Human Capital stages carried out by the Company. Information System to enhance people analytics Career path acceleration and succession HCIS (Human Capital Information System) is an integrated planning to build employee competencies application to support in implementing alignment in that are aligned with industry 4.0 the management of the Human Capital system in the The Bank is aware of the importance of human capital Company. With the development of human capital and factors in the banking industry, especially in the trend global talent competition, HCIS is required to function of industry 4.0 where the Bank is required to be able to as a people analytic or talent analytic that can help produce successors with competencies in accordance management make decisions about employees. with industry 4.0 era .
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Learning & Development which focuses on the Development of the Integrated Talent In the recruitment process, the Company sets the age Management System requirement to be more than 18 years old for prospective The learning & development process is intended to focus employees. This commitment is also a prerequisite in on developing employee competencies that refer to the establishing cooperation with universities. The Company integrated talent management system. provides equal opportunities to the public to get career opportunities regardless of gender, ethnicity, race, religion or any form of discrimination. To prevent forced Human Capital Management labor, employees of Bank Tabungan Negara work with a set amount of time, and employees at certain levels who Recruiting the Best Talents work over time will be granted compensation in the form Bank Tabungan Negara recruits based on the level of overtime pay. [6.c.2)a)] of the Company’s requirements. Bank policies in the recruitment process are regulated in the the Board of The various labor provisions are applied as a form of Directors’ Circular Letter Number 43 / DIR / CMO / 2011 the Company’s compliance commitments to Law No. sub-themed “Human Capital Acquisition regarding 13 of 2003 concerning Manpower. This commitment has employee recruitment”. The company recruits through resulted in the zero cases of child labor, discrimination or two approaches, namely: (103-2) forced labor in the Company or suppliers of goods and 1. Internal Recruitment, a recruitment conducted by services throughout 2019. (103-3, 406-1, 408-1. 409-1) utilizing existing employees to fill a vacant position in a particular unit, based on organizational needs During the reporting period, based on data from the or based on Workload Analysis calculations. The Directorate of Strategic Human Capital, the Company methods for internal employee recruitment include: recruited 410 employees (fresh graduates & professional • Promotion hire). (103-3, 401-1) • Rotation 2. External Recruitment, a recruitment conducted to hire New employees have a certain mechanism before they talents from non-employee to fill vacant positions. are appointed as permanent employees. For those External recruitment is done by 2 (two) methods, namely: employees who are qualified and then appointed as a. Direct Hire, consisting of: permanent employees, they will be granted remuneration • Fresh Graduate in accordance with applicable labor regulations. The ratio • Experienced (Prohire) of basic salary and remuneration for male and female b. Outsourcing. employees in Bank Tabungan Negara is the same as the Company does not differ the ratio of basic salary To meet the needs of employees, the Company has also and remuneration based on gender. The percentage of compiled a Manpower Plan according to the needs of permanent employee remuneration at the entry level of the organization and conducted a recruitment process the regional minimum wage in the Company is as follows: including job fairs, campus hiring, seminars and public (103-3, 202-1, 405-2) [6.c.2)b)] lectures to support employee recruitment at universities in Indonesia including ITB, UI, UGM, UNDIP , UB, and UNAIR. This process is also supported by online / digital recruitment tools or the Company’s recruitment website. (103-2)
Comparison of the Company’s Entry Level Employee Salary with Minimum Wages Entry Level Ratio of Entry Level Employee Operation Area Employee Salary Minimum wage (Rp) Salary versus Minimum Wage (Rp) Cluster 1 4.240.000 4.234.010 1,00 : 1,00
Cluster 2 3.340.000 3.339.580 1,00 : 1,00
Cluster 3 2.500.000 2.498.587 1,00 : 1,00
Cluster 4 3.880.000 3.871.052 1,00 : 1,00
Cluster 5 2.800.000 2.781.564 1,01 : 1,00
Cluster 6 2.800.000 2.700.297 1,04 : 1,00
Cluster 7 2.900.000 2.804.453 1,03 : 1,00
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Comparison of the Company’s Entry Level Employee Salary with Minimum Wages Entry Level Ratio of Entry Level Employee Operation Area Employee Salary Minimum wage (Rp) Salary versus Minimum Wage (Rp) Cluster 8 3.200.000 2.976.705 1,08 : 1,00
Cluster 9 2.940.000 2.935.985 1,00 : 1,00
Cluster 10 2.500.000 2.211.266 1,13 : 1,00
Cluster 11 3.200.000 2.651.781 1,21 : 1,00
Cluster 12 3.200.000 2.747.561 1,16 : 1,00
Cluster 13 3.130.000 3.128.170 1,00 : 1,00
Average 3.125.385 2.990.847 1,04 : 1,00
Operations Area Operations Area Cluster 1 Jakarta, Bekasi, Bogor, Tangerang, Cilegon, Depok, Karawang, Purwakarta, Cilegon
Cluster 2 Bandung, Cimahi, Cirebon, Tasikmalaya
Cluster 3 Madiun, Pekalongan, Purwokerto, Semarang, Solo, Yogyakarta, Tegal
Cluster 4 Gresik, Sidoarjo, Surabaya
Cluster 5 Jember, Kediri, Malang
Cluster 6 Bali, NTT, NTB
Cluster 7 Lampung, Bengkulu, Jambi, Sumatera Barat, Sumatera Selatan, Riau
Cluster 8 Bangka Belitung, Kep. Riau
Cluster 9 Nanggroe Aceh Darussalam, Sumatera Utara
Cluster 10 Kalimantan Barat
Cluster 11 Kalimantan Selatan, Kalimantan Tengah
Cluster 12 Kalimantan Timur
Cluster 13 Maluku, Maluku Utara, Gorontalo, Papua, Sulawesi
themed “Human Capital Engagement” regarding the Termination of Employment Relations. Based on data from the Strategic Human Capital Directorate, during the reporting period, there were 219 employees with the following reasons:
The composition of employees who left the Company in 2019 can be categorized by age, gender and division which is as follows: (103-3, 202-1, 401-1)
The composition of employees leaving the Company based on age Age 2019 2018 ≤30 years old 134 192
31- 50 years old 82 74
≥51 years old 3 1
Total 219 267
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The composition of employees leaving the Company based on gender Gender 2019 2018 Male 85 114
Female 134 153
Total 219 267
The composition of employees leaving the Company based on working area Working Area 2019 2018 Head Office 33 44
Plant Site Lhokseumawe 186 223
Total 219 267
Based on the number of employees joining and leaving the Company as mentioned above, the employee turnover rate for 2019 is 1,51%. The Company manages the termination of employment based on the policy of the Board of Directors Circular Number 66 / DIR / HCD / 2014 sub-themed “Human Capital Engagement” regarding the Termination of Employment.(103-3, 401-1)
Occupational Health and Safety Management [6.c.2)c)]
Occupational health and safety is one of the priorities of Bank Tabungan Negara. Therefore, the Company optimally creates a safe and convenience work environment, which leads to the creation of zero accident ratio. In this case, the Company believes that a safe and conveinence work environment will enhance employee’s morale and productivity in which it then improves the performance of Bank Tabungan Negara.
The implementation of a safe and convenience work environment refers to article 86, paragraph 2, Act No. 13 of 2003 concerning Manpower, which states that “To ensure employees/labors safety in order to optimize work productivity, occupational health and safety efforts are implemented”. In line with that, the Company has policies related to Occupational Health and Safety Management System (SMK3) which are listed in: (103-2) • Board of Directors Regulation Number 5 / PD / PGSD / 2017 on October 31, 2017, concerning Policy Guidelines for Occupational Health and Safety Management Systems. • Circular of the Board of Directors Number 60 / DIR / PGSD / 2017 on October 31, 2017, concerning Standard Operating Procedure for the Implementation of Occupational Health and Safety Management System.
Referring to SMK3, the Company implements various programs related to the occupational health and safety as follows: (103-3)
Employee Safety Management Program • All operational offices have been accomodated with work safety devices such as APAR (Portable Fire Extinguisher), Smoke Detector, Diesel Pump, and Emergency Escapes that are in accordance with fire safety equipment standards based on the Minister of Public Works Regulation on Technical Requirements for Fire Protection Systems in Buildings and the environment. • Routine checking of work safety tools to determine their level of eligibility. • Certified which is issued by the DKI Jakarta Province Department of Manpower and Transmigration for operators of occupational safety devices, such as lift and transport aircraft. • Fire situation plan and fire safety operational procedures in the staff room and every floor of the building so that all employees are well informed. • Employee involvement in the certification training “Development and Certification of Public Occupational Health and Safety (AK3U)” organized by BPJS Kesehatan.
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Employee Healthcare Program complying with various applicable rules and procedures. • Providing medical facilities in the form of periodic These efforts bring results in the absence of work accident Medical Check-Up and treatment facilities such as incidents in the Company’s environment so that it does guaranteed reimbursement of inpatient hospital fees not impact the missing in work-day counting and others. and outpatient care after leaving the hospital, labor Evaluations related to Hazard Identification, Assessment, costs, dental care costs, glasses replacement, hearing and Risk Control during the reporting year also did aids, laboratory examinations, and medication other not find any cases of employees suffering from certain medical doctors recommended post-treatment. diseases due to their daily operation. (103-3, 403-2, 403-3) • Providing polyclinic facilities and doctors to provide medical or medical services to employees and their Training and Competency Development families. • Include employees and their families with health for Employees insurance organized by BPJS Kesehatan. Bank Tabungan Negara periodically conducts education and training programs to improve employee Standard Operational Procedure (SOP) of competencies and skills. Education and training are Health and Safety Management (SMK3) intended for employees based on individual development • Establishment of Occupational Health and Safety plans and in accordance with the needs of the Company. Committee (P2K3) Management of employee training and education is • Hazard Identification, Assessment and Risk regulated in the Board of Directors Decree No. 04 / KD / Management SIPD / 2017 on May 29, 2017, amendment to the Board of • Identification of laws and regulations and other Directors Decree No.3 / KD / DIR / SIPD / 2017 concerning Occupational Health and Safety requirements and Head Office Organizational Structure in article 8 point 5h evaluation of compliance concerning Organizational Structure of Learning Center • Arranging and Determining OHS Management Division. (103-2) Objectives, Targets, and Programs • Competency Development and Coaching, Training, Through careful planning, in 2019, the Learning Center and Awareness achieved a performance target of 106,08% based on the • Optimization of Communication, Participation and target number of batches and the number of participants Consultation from three schools that conduct training for employees, • Document Control namely: (103-3) [6.c.2)d)] • Record Control • Establishment of Emergency Management Team School of Leadership (TKPD) and Personal Protective Equipment Management Providing training that aims to build leadership personality • OHS Infrastructure Management and Emergency at the level of the Company’s Leader. This program Management Access consists of ODP (Officer Development Program), MDP • OHS Performance Monitoring and Measurement (Management Development Program), SDP (Supervisor • Incident Reporting and Investigation Development Program), Overseas and Domestic • Identification of Nonconformities, Corrective Actions, Scholarship for Masters Program, SESPIBANK (School and Preventive Measures for Staff and Bank Leaders) Board of Commissioners • Implementation of SMK3 Internal Audit and Directors, EDP (Executive Development Program) • Implementation of Management Review study abroad for Head of Divisions, and other leadership • Change Management programs.
Occupational Health and Safety (K3) School of Operation Banking Specified Policies • Prohibition of Narcotics, Psychotropic and Addictive Providing training that aims to enhance expertise or Substance Abuse competence to the supporting structures of the Company • Prevention of Spread of Communicable Diseases as the Company’s business support. This training consists • Management of Associates / Third Parties Regarding of the fields of Faculty of Audit, Faculty of Compliance, OHS Faculty of Corporate Affairs, Faculty of Human Capital, Faculty of Information Technology, Faculty of Law, Faculty In accordance with commitments held by Bank Tabungan of Management System, Faculty of Risk, Finance & Negara, during 2019, the Company made every effort Accounting, Operational Banking, and Others to create a safe and comfortable work environment by
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 136 137
School of Business Banking Providing training that aims to provide expertise or Employee’s Performance competence that focuses on business development Assessment and Career and management which consists of Collection & Asset Management, Commercial Funding, Retail Funding Development & Service, Commercial Lending, Consumer Lending, Digital Banking, Sharia Financing, Service Quality, Bank Tabungan Negara has a certain mechanism in Sharia Funding, Other Sharia Services, Treasury, Wealth providing reviews or assessments to employees. The Management, and Others. results of performance assessments that have been conducted, the Company uses it as an indicator to During the reporting period, the learning process in decide employee career development. In developing the Company was developed by implementing a virtual employee careers, the Company does not differ based classroom and improving Knowledge Management on gender, but the aspects that are assessed are System (KMS) to encourage e-learning. Both are important employee competency and capability. More specifically, platforms to facilitate access to learning for all employees, the Company has policies related to employee career especially those in remote areas. The company is also planning and development as stipulated in the Board preparing tools to develop BTN Corporate University in of Directors Circular Letter Number 26 / DIR / HCD / the future. 2014 concerning Employee Career Planning of PT Bank Tabungan Negara (Persero) Tbk. (103-2) Based on the data of education and training held during 2019, the average training hours per employee per year To provide opportunities for employee growth and is 10.85 hours. Based on gender, the average hours of motivation to develop, the Company has arranged career training for male employees is 12.51 hours per year, while paths based on the position rank and job family and female employees are 8.91 hours per year. Meanwhile, individual career planning structures based on employee’s based on the employee status level, employees included core competencies (core, leadership, and job family) and in the staff level, the average hours of training are 10.2 learning curriculum. hours / year, while the management level is 14.33 hours / year. (103-3, 404-1) [6.c.2)d)] During 2019, all employees of the Company (100%), both men and women, at all levels of the organization’s In addition to education and training programs positions received performance evaluations. Based aforementioned, competency development is also on the evaluation results, it has been followed up with provided by accomodating selected permanent staff to internal career planning through employee promotions continue their study to a higher level. It aims to meet for 1,003 employees totaling 17,656 employees. (103-3, and improve employee competencies which can create a 404-3) skillful, resilient, and responsive workforces in accordance with the needs and development of the bank. Employee education is regulated in the Directors’ Circular Letter Protection of Employee Number: 43 / DIR / CMO / 2011 concerning Human Capital Development. During 2019, the Company has provided Rights Scholarship Program to 20 employees for Master degree at any national university and 10employees to study Employee Diversity and Equality abroad. (103-3) The Company applies the principle of diversity and equality for all employees in accordance with the basic principles Corporate Culture Development of employment stated in Act No. 13 of 2003 concerning manpower. This principle is applied to regulations or The Company does not only develop banking policies on human rights contained in the Board of competencies and skills for employees but also build a Directors Regulations, Circular Letters, and Collective corporate culture in the context of implementing digital Labor Agreements. In the regulation, the Company transformation. applies the principle of equality from recruitment, training programs and employee competency development, employee career development, as well as remuneration and employee welfare regardless of gender, religion, ethnicity, race, and other diversity. (103-2, 405-1)[6.c.2)a)]
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 136 137
Harmonious Industrial Relations Number: 11 / DIR / HCD / 2013 concerning Work Days Bank Tabungam Negara upholds the freedom of and Hours in the sub-Human Capital Administration. association and assembly, and even establishes trade PKB is updated periodically with the Workers Union to unions as a medium for employees to argue and fight be registered with the Manpower Office. In 2019, all for their rights. For the Company, employee rights are employees of the Company (100%) have been protected inherent rights once a person works and is appointed by PKB rights. (102-41, 103-2) as an employee. Respect for such rights is one of the keys to building a harmonious relationship between the The Company establishes two-way communication with Company and its employees. employees including to provide information related to important changes in the Company such as changes in This award is also a form of the Company’s compliance organizational structure and the addition of business units with Article 28E paragraph (3) of the 1945 Constitution to employees as well as matters relating to other staffing. of Indonesia which states that “Everyone has the right Notification related to these changes, informed through to freedom of association, union and opinion”, Law memos to all work units and can be accessed through Number 21 of 2000 concerning States Workers, and AIMS (internal application related to the Company’s ILO (International Labor Organization) Convention provisions). Number 87 of 1948 concerning Freedom of Association and Protection of the Right to Organize, the Company The Company is committed to preventing the occurrence since June 24, 1999 facilitated the formation of trade of forced labor incidents in the Company’s environment unions named the Financial Services Union and has by the existence of regulations related to employee been registration at the DKI Ministry of Manpower No. work hours regulated in the Directors’ Circular Letter Kep-2241 / W.26 / K.2 / 1000. The establishment of the Number: 43 / DIR / CMO / 2011 concerning Human Company’s trade union is an effective communication Capital Administration. The regulation regulates bank forum between the Company’s management and all days and hours so employees can attend, work and rest in employees of the Company. (103-2) accordance with the specified time. However, if in certain condition that a duty must be completed by exceeding The Company provides freedom of association to all the working hours, the Company provides compensation employees of the Company which includes: in the form of overtime money to employees who work • Joining Company’s trade union overtime. This has been regulated in the Board of • Conveying aspirations through Company’s trade Directors Circular Letter Number: 43 / DIR / CMO / 2011 union concerning Human Capital Reward. (103-2, 103-3, 409-1) • Gathering in Company’s trade union activities Remuneration and Benefits for With the implementation of the Company’s commitment to the granting of freedom of association to all employees, Employees during 2019 there were no incidents of violations or In Bank Tabungan Negara, the remuneration and complaints reports related to freedom of association employee benefits system is regulated in the Board within the Company. (103-3, 407-1) of Directors Circular Letter Number 43 / DIR / CMO / 2011 concerning Human Capital Reward. In providing Collective labor agreement remuneration, the Company applies a fair reward pattern and equal treatment without discrimination As a follow-up on the existence of trade unions of Bank to all employees regardless of gender, ethnicity, race, Tabungan Negara, the employees and management of religion, color, and other diversity; however, based on the Company then agreed to prepare a Collective Labor the achievement of performance and job responsibilities. Agreement (CLA). On October 2, 2012, the Company (103-2, 405-2) registered the Collective Labor Agreement (PKB) with Indonesia’s Ministry of Manpower and Transmigration Based on employment status, the Company provides Number: Kep.157 / PHIJSK-PKKAD / PKB / X / 2012. The different components of remuneration and facilities, but Company is committed to preventing the occurrence of the Company ensures that the rights received by contract forced labor incidents in the Company’s environment by employees are in accordance with applicable regulatory the existence of regulations related to employee work standards. (103-3, 401-2) hours regulated in the Board of Directors Circular Letter
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 138 139
Permanent Contract Components of Remuneration and Facilities Employees Employees Basic salary √ √
Holiday allowance √ √
Leave allowance √
Clothing allowance √ √
Allowance (position, housing, vehicle, expertise, fuel, location, tax) √
Performance bonus √ √
Housing Loan √
Pension Allowance √
Health Insurance √ √
Periodic health maintenance facilities √ √
Medical assistance √ √
Grief support √ √
In 2018, the Company amended the employee During 2019, the number of female employees exercising remuneration, namely; salary adjustment on P75 maternity leave was 85, with retention of employees percentile so that it is competitive, amendments to returning to work after the leave period ended by 100%. benefits (employee relocation facilities, credit, health, This shows that the availability of work guarantees for overtime) as well as a variable compensation system for employees to return to work after using maternity leave salespeople. rights. Meanwhile, male employees who have the right to leave due to their wife maternity period and use these The Company applies salary adjustments due to inflation rights are 85 employees, and all have returned to work. and adheres to the minimum wage provisions based on (103-3, 401-3) the Republic of Indonesia Minister of Manpower and Transmigration Regulation No. 7 of 2013 concerning Pension program Minimum Wages. The Company is committed to always providing employee salaries at entry level positions The Company provides several pension benefits to above the Minimum Wage standard applicable in the employees in accordance with the Board of Directors Company’s operational areas. With these adjustments, in Circular Letter Number 43 / DIR / CMO / 2011 concerning 2019, the amount of expenses on employee costs reaches Human Capital Engagement. Employees who are Rp2,450 billion, 0,01% decrease than the previous year, granted pension benefits are permanent employees who which was Rp2,474 billion. (103-2) have reached the normal retirement period of 56 years. Pension benefits consist of: (103-2, 201-3) Maternity leave 1. Manfaat Pasti Program, in the form of pension benefits formulated by the Pension Fund. The Company provides maternity leave to female 2. Iuran Pasti Program, in the form of pension benefits permanent employees for 1.5 (one and a half) months from the accumulation of fixed employee contribution before and 1.5 (one and a half) months after childbirth or balances amounting to 2.5% of the salary concerned, three months of maternity leave. While the miscarriage 7.5% from the Company, and the results of its leave facility is given for 45 days after the miscarriage. In development. addition, the Company also gives permits for five days to male employees to leave work if their wife gives birth Referring to the Decree of the Board of Directors (paternity leave). This facility has been regulated in the governing the Pension Fund Regulation of PT Bank Directors’ Circular Letter Number 43 / DIR / CMO / 2011 Tabungan Negara (Persero) Tbk (BTN Dapen), the amount concerning Human Capital Administration. (103-2) of Pension Benefits is as high as 80% of the Basic Pension Income. (103-3)
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 138 139
Handling of Employee Complaints During the reporting year, Persero did not receive A harmonious relationship between employees and complaints from employees. This proves the existence management of the Company is a prerequisite for the of harmonious interaction and communication between day-to-day operations of Bank Tabungan Negara. management and employees at the Bank Tabungan Negara. To support employee relations and interaction, the Company has used the BTN Employee Service (iBES Employee Engagement Survey / HCIS) digital intelligence staffing tool that facilitates employee accessibility in staffing related arrangements. Bank Tabungan Negara believes that employee Meanwhile, to manage employee complaints or reports satisfaction and engagement are important basis for related to violations of labor practices and human rights business continuity. The higher the level of employee within the Company, the Whistleblowing System (WBS) is satisfaction and engagement, the position of the used. This is regulated in the Board of Directors Circular Company in the world of banking will be stronger. Letter Number: 21 / DIR / IAD / 2014 concerning the Whistle Blowing System of PT Bank Tabungan Negara Whereas the Employee Engagement Survey aims to: (Persero) Tbk. • Provide opportunities for employees to express their personal opinions clearly through surveys conducted The regulation also regulates the WBS mechanism which online related to positivity and negativity as well as is as follows: improvments required for the Company. a. WBS processes & mechanisms are the responsibility of • Analyze the gap between employees experiences and the President Director and WBS Manager consisting the Company’s goals and increase insight to improve of the WBS Committee and the WBS Monitoring performance and productivity. Committee. • Encourage the employee engagement with the b. The WBS Committee consists of a submission of Company.. several divisions and the WBS management unit, while the WBS Monitoring Committee consists of the Based on the survey results were obtained, employee President Commissioner and other members of the engagement reached 85% for the Company. Survey Board of Commissioners in the Company. results This shows that the level of employee engagement c. Otherwise, in condition that the reported person is a with the Company has increased. Company follow up on member of the Board of Directors as well as a person the results of the survey by carrying out socialization and who is affiliated with the directors and or members of impact plans to design improvements to the organization. the WBS committee, then the report can be submitted The proposed improvements are then outlined in the to the WBS Monitoring Committee. preparation of the Work Plan and Corporate Budget d. If the reported person is a member of the board of (RKAP) in the following year period. commissioners as well as someone who is affiliated with the commissioner, then the report can be submitted to the President Director.
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 140 141
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 140 141
INCLUSIVE AND SUSTAINABLE PRODUCTS AS SOLUTION
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 The core business of BTN is housing finance and its The Company recorded Construction Loans distribution derivatives industry - a business whose level of needs will in 2019 of Rp9.64 trillion with a volume of 5,837 credit continue to grow in line with the increasing population financing. The value of distribution of Construction Loan in Indonesia. Since carrying the government’s trust as a decreased by 31.30% compared to 2018 amounting bank that distributes Mortgages (KPR), the Company to Rp14.03 trillion. When compared to the target, the continues to innovate in developing mortgage products realization of value of the Construction Loan distribution in accordance with the needs of the Indonesian people. recorded an achievement of 73.56% compared to the 2019 target of Rp13.10 trillion. As of 1976, when the realization of the BTN KPR was first conducted by the Company in Tanah Mas Housing, Provision of Products that are Inclusive Semarang City, until the end of 2919, or approximately 43 years, BTN has helped to realize about five million and Sustainable [6.c.1)] dream home units for Indonesian families, both in form of The Company is committed to continuing to deliver subsidized and non-subsidized KPR. As for the KPR value products that are inclusive and sustainable. The that has been realized has reached around 300 trillion, commitment was present, especially to provide easy with diverse beneficiaries, ranging from low, middle and access to banking services and improve financial services high-income communities. The Low-Income Communities that reach various levels of society inclusively. The (MBR) --- communities of whom have limited purchasing Company has also provided various products that may power so they need government support to obtain or provide social benefits for low-income communities build a house. (MBR). In addition, there are also products developed to support financial literacy education for the community Specifically for subsidized KPR, loans distributed by BTN such as the SimPel Savings (Student Savings), which may occupy the largest portion of 3.46 million housing units encourage the culture of saving early on. with a credit value of around Rp 159.97 trillion. For the Company, the large portion of Subsidized KPR distribution is realized thanks to the trust and support that has been given by the Government, in this case the Public Works and People’s Housing (PUPR) Ministry, in the success of One Million Houses Program.
Inclusive and Sustainable Products [FS7] Portfolio (Rp million) Product Description Target 2019 2018 2017 Consumer Banking BTN Subsidized Home Ownership program of Low Income 17.311.658 24.657.784 20.504.547 KPR the Public Works and People’s Communities (MBR) Housing Ministry of the Republic of Indonesia with low- interest rates and affordable installments for the purchase of Rumah Sejahtera Tapak (Landed Homes) and Rumah Sejahtera Susun (Modest Apartment)
BTN Micro KPR Banking product for the ease Customer workings 145 2.406 - of purchasing land or house, or in the informal gradual house renovation. sector
Commercial Banking BTN Small Loan for customer who has Pelaku Usaha Mikro 1.617.846 1.537.423 1.508.232 and Micro productive business in line with dan Kecil (UMK) Enterprises the requirement of MSME. The Credit (KUMK) loan may be utilised to fund the capital and/or investment with a maximum loan up to Rp 5 billion. Inclusive and Sustainable Products [FS7] Portfolio (Rp million) Product Description Target 2019 2018 2017 Partnership Program to increase the Small Enterprises 15.036 37.274 6.201 Program competence of small business in order to grow stronger and independent.
Community Capital loan and/or investment Micro, Small, and 91.870 111.192 9.775 Business Credit granted to debtor in MSMEs Medium Enterprises (KUR) status, in a productive and (MSMEs) viable business field but do not have additional collateral or insufficient additional collateral.
BTN Linkage Loan to facilitate legal entities Rural Banks and 2.400 153.605 48.076 Credit i.e. Rural Banks (BPR) and Cooperatives Cooperatives, to be disbursed to Mirco, Small, and Medium Enterprises (MSMEs) sector.
Sharia Business Unit MySaving iB Saving product with Wadi’ah General Public 5.967 3.805 3.323 (Entrusted) principle which has attractive bonus. Issued simultaneously by banks in Indonesia in order to foster the culture of saving and to improve the public welfare.
BTN Simpel iB Saving product special for Student under 17 3.535 2.141 1.733 Saving Students up to 17 years old who years old. do not have Identity Card yet. The initial deposit is very small and it still gives lucrative bonus.
Laku Pandai
In 2015, the Financial Service Authority (OJK) launched The BTN Cermat Saving is a saving program based on Branchless Financial Services for financial inclusion (Laku Card without a passbook and the registration can be Pandai), that is a financial inclusion program that enable done through the Electronic Data Capture (EDC) machine communities to open saving accounts, save, and withdraw owned by the Agent. The BTN Cermat Saving in the BTN money through bank agents intermediaries. Griya enables customers to withdraw and deposit money with the minimum limit of Rp2,000 and the withdrawal of Laku Pandai is designed for the unbanked society to know existing saving accounts of at least Rp5,000. more about banking and its products in accordance with the objectives of the Indonesian government stipulated BTN Cermat LAKU PANDAI Saving Products is based on in the National Strategy of Financial Inclusion (SNKI) in cell-phone by using USSD (Unstructured Supplementary June 2012. With the access for formal financial services, Service Data) system so that it can be done via a regular the society can be protected from the burdening loan cellular phone or feature phone. In addition, the Company practices. also collaborates with PT Pos Indonesia (Persero) as an agent. Therefore, the customer can simply come to the The Company takes role in the Laku Pandai with “Griya nearest Post Office and make direct transaction. BTN” brand by maximizing agents with the information technology support that equipped with payment In 2018, the Company collaborates with PT Telekomunisasi applications for PLN, PDAM, Telkom, BPJS, KPR BTN, and Selular or known as Telkomsel to create synergy in the like. Beside of the payment, Griya improving the penetration of financial inclusion services BTN also provides saving and withdrawal facilities by through Tcash. This product will ease the Griya BTN utilizing BTN Cermat Saving Product. agents in providing financial services for the unbankable society. 1.649.508 total account smart-selling with score nominal Rp.66,75 million. 144 145
Products And Services Innovation For the Company, BP Tapera is the right partner for BTN [6.f.1)] because BTN also has a complete line of business in subsidized housing loans. For example, the KPR business The index of housing needs in Indonesia continues to innovation that has been conducted by the Company by increase, while the availability of houses is still limited. creating Micro KPRs targeting informal MBRs, such as Conditions like making backlog numbers remain high. At online motorcycle taxi drivers and meatball vendors. the end of 2019, for example, according to official sources from the Public Works and People’s Housing Ministry, there are 11 million households that live in uninhabitable Digital Financial Services [6.f.1)] homes and young households that still do not have a home. The Company developed digital services particularly for supporting the business, among others improve the The large index of housing needs is a great opportunity customer service quality, one of strategy conducted is for BTN, which has worked and experienced for 70 years. by collaborating with the startup in line with the business Because the Company is not the only provider of Home development needs. Ownership Loans (KPR) financing products in Indonesia, the Company is required to be able to present products In addition, the Company continues to develop digital and services in accordance with customer segments. The products and service features both from the development Company has answered this challenge by continuing of existing and new products. to innovate financial products and services so that it is now has a variety of innovative mortgage products in Breakthrough made in 2019, among others, the Company accordance with targeted customer segments. The launched an application on smartphones with Android products are complemented with companion products, operating system named “BTN Property Mobile”. The for example planning savings products namely SIAP launch of this application aims to facilitate the accessibility of saving, and Simuda saving. customers, especially the millennial generation in applying for Home Ownership Loans. Optismistic company, BTN In addition, the Company has also been pro-actively Properti Mobile version of Android will be able to dominate engaging the private sector to enable the lowerincome the millennial market, especially for those who do not yet community to get access for the Subsidized KPR, among own a house. others with the online ojek and taxi company. Meanwhile, for the higher segmentation, the Company has also been Various facilities offered through this application, among responsive towards the need and capability of lower- others, there are features in the 4D Tour Services that allow income communities that are mostly comprising millenials users to see housing units without having to go to the generation, including the latest product, KPR Gaeesss! location. There is also a feature of “tracking” or tracking that is designed in line with their desire and lifestyle in credit applications based on the latest data so that they may order to enable them get access for the housing loan. find out the status of credit applications. Not only that, the Company also offers booking facilities or “payment fees” Meanwhile, the Company’s efforts to reduce the backlog via e-channel through this application. Users may also see figure in 2019, among others, were conducted by the condition of public facilities around housing units. cooperating with the Public Housing Saving Management Agency (BP Tapera). In fact, BTN is ready to become the The Company is increasingly convinced that more complete main partner of BP Tapera - an institution formed to replace services and lifestyle changes have led to changes in the Civil Servants Housing Saving Consideration Agency customer habits. As proof, since 2012 transactions with (Bapertarum PNS) in accordance with the mandate of Law e-channels are always higher compared to conventional Number 4 of 2016 concerning Public Housing Saving. transactions at branch offices.
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 144 145
ATM Card Issuance Month Visa Non visa Total Target FV2018 1.233.726 356.784 1,593,510 1,800,000
FV2019 1.058.960 912.274 1,971,734 2,300,000
Jan 96, 776 86,008 142,786 220,000
Feb 73,191 78,340 131,531 100,000
Mar 72, 189 77,923 150,112 300,000
April 67,789 79,045 146,834 200,000
May 120,169 79,839 199,068 300,000
Jun 100,434 83,779 154,213 200,000
Jul 89,688 94,010 183,678 300,000
August 75,500 94,616 170,116 200,000
Sept 69,458 77,057 146,515 200,000
Oct 103,281 74,256 177,517 100,000
Nov 87,518 62,228 149,746 100,000
Dec 103,008 59,113 159,138 100,000
Achievement 85,71%
Credit card issuance Month Approved Target FV2018 402 5,001
FV2019 29 5,000
Jan 7 417
Feb 2 417
Mar 2 417
April 2 417
May 3 417
Jun - 417
Jul 3 417
Aug 1 417
Sept 2 417
Oct - 417
Nov - 417
Dec 7 417
Achievement 0,58%
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 146 147
e-banking perfomance 9M2018 9M2019 yoy 4Q2018 4Q2019 yoy FY2018 FY2019 yoy ATM Users 6,025,456 6,723,719 15.75% 2,200,018 2,445,997 11.07% 8,228,504 9,180,716 51.57%
Transactions 54,172,082 58,358,047 9.58% 20,086,042 20,844,580 4.35% 74,228,104 80,123,627 8.17%
Transactions value 21,872,272,584,636 21,237,428,174,680 -2.01% 7,423,260,535,412 6,939,626,267,340 -6.52% 29.095.533.180.093 28,177,049,452,020 -3,15%
SMS/MOBILE BANKING Users 742,736 1,083,580 45,89% 304,378 437,435 43.7% 1,047,114 1,521,015 45.24%
Transactions 27,325,327 40,065,817 45,70% 10,986,033 15,214,531 38.74% 38,291,360 55,300,558 44.24%
Transactions value 4,760,441,542,843 6,589,810,511,221 38,43% 2,005,862,047,735 2,535,513,815,912 25.74% 6,789,103,380,583 9,115,724,327,153 14.87%
INTERNET BANKING Users 87,585 142,751 62,99% 39,689 44,033 11.00% 127,254 186,784 46.73%
Transactions 2,923,921 4,515,937 54,31% 1,382,453 1,363,323 29.37% 4,265,574 6,273,165 46.26%
Transactions value 18,804,943,281,597 23,423, 703, 348, 419 18,27% 7,254,545,536,263 7,680,592,436,612 5.03% 27,059,288,797,884 31,084,283,785,051 54.87%
Inclusive KPR
BTN Subsidized KPR for Indonesian Families The Company offers subsidized KPR product in the scheme of Housing Financing Liquidity Facility (FLPP) in which the government covers 90 percent of the cost and the bank covers the remaining 10 percent; Interest Subsidy (SSB) where the Government only pays for the interests ; and the Advance Payment Subsidy (SBUM). These three programs are launched by the Government in aims to realise the One Million Houses Program.
The majority of subsidized KPR emanates from the civil servants and informal workers. The KPR interest for the subsidized housing is set at 5% and the easy instalment for the landed home and modest apartment.
BTN Micro KPR Micro KPR is a financing scheme with the credit ceiling of Rp75 million for housing payment, renovation, and construction for the informal workers that have unstable income. This product combines saving, loans, insurance/ guarantee in a micro scale.
Micro KPR program is the Company’s pure initiative for the lower-income communities, ranging from Rp1.8 million to Rp2.8 million per month, who are not in the category of subsidized KPR recipients. Lower loan interests, namely 6-7% per year or about Rp900-956 thousand per month. Should the debtor feel burdened, they can adjust the ceiling taken from the instalment payment, which can be done monthly, daily, or even weekly based on their capacity.
Micro KPR deposits is very low to only 1% for the first-home purchase or 10% for the renovation. This Micro KPR program can also be used to build house on their own land. This scheme will help the community that already owned the land but constrained by the custom land where the Company offers help in the land certification process prior to the land development by the debtor.
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 146 147
e-banking perfomance 9M2018 9M2019 yoy 4Q2018 4Q2019 yoy FY2018 FY2019 yoy ATM Users 6,025,456 6,723,719 15.75% 2,200,018 2,445,997 11.07% 8,228,504 9,180,716 51.57%
Transactions 54,172,082 58,358,047 9.58% 20,086,042 20,844,580 4.35% 74,228,104 80,123,627 8.17%
Transactions value 21,872,272,584,636 21,237,428,174,680 -2.01% 7,423,260,535,412 6,939,626,267,340 -6.52% 29.095.533.180.093 28,177,049,452,020 -3,15%
SMS/MOBILE BANKING Users 742,736 1,083,580 45,89% 304,378 437,435 43.7% 1,047,114 1,521,015 45.24%
Transactions 27,325,327 40,065,817 45,70% 10,986,033 15,214,531 38.74% 38,291,360 55,300,558 44.24%
Transactions value 4,760,441,542,843 6,589,810,511,221 38,43% 2,005,862,047,735 2,535,513,815,912 25.74% 6,789,103,380,583 9,115,724,327,153 14.87%
INTERNET BANKING Users 87,585 142,751 62,99% 39,689 44,033 11.00% 127,254 186,784 46.73%
Transactions 2,923,921 4,515,937 54,31% 1,382,453 1,363,323 29.37% 4,265,574 6,273,165 46.26%
Transactions value 18,804,943,281,597 23,423, 703, 348, 419 18,27% 7,254,545,536,263 7,680,592,436,612 5.03% 27,059,288,797,884 31,084,283,785,051 54.87%
Inclusive KPR BTN Micro KPR Market Potential Micro Seller Fisherman Cattleman Farmer BTN Subsidized KPR for Indonesian Families Total Population 22 million 2,80 million 12,9 million 26,1 million The Company offers subsidized KPR product in the scheme of Housing Financing Liquidity Facility (FLPP) in which the Own no house 2,3 million 300 thousand 1,3 million 2,7 million government covers 90 percent of the cost and the bank covers the remaining 10 percent; Interest Subsidy (SSB) where the Government only pays for the interests ; and the Advance Payment Subsidy (SBUM). These three programs are launched by the Government in aims to realise the One Million Houses Program. Statistic Data Resources • With assumption that not have home yet using the Gini Ratio uses the Indonesian Statistic Central Board (BPS) Data The majority of subsidized KPR emanates from the civil servants and informal workers. The KPR interest for the per September 2016 of 10.7%. subsidized housing is set at 5% and the easy instalment for the landed home and modest apartment. • Fisherman and Micro Seller data per 2016 • Cattleman and Farmer Data per 2013. BTN Micro KPR Micro KPR is a financing scheme with the credit ceiling of Rp75 million for housing payment, renovation, and construction for the informal workers that have unstable income. This product combines saving, loans, insurance/ guarantee in a micro scale.
Micro KPR program is the Company’s pure initiative for the lower-income communities, ranging from Rp1.8 million to Rp2.8 million per month, who are not in the category of subsidized KPR recipients. Lower loan interests, namely 6-7% per year or about Rp900-956 thousand per month. Should the debtor feel burdened, they can adjust the ceiling taken from the instalment payment, which can be done monthly, daily, or even weekly based on their capacity.
Micro KPR deposits is very low to only 1% for the first-home purchase or 10% for the renovation. This Micro KPR program can also be used to build house on their own land. This scheme will help the community that already owned the land but constrained by the custom land where the Company offers help in the land certification process prior to the land development by the debtor.
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 148 149
Conditions of Micro KPR Prospective Debtor
• Open the Smart Saving and active at least for 3 months with the account nominal average at least enough to cover the monthly installment projection. The opening of Smart Account just requires the first deposit of Rp10,000 and without administration fee. • Have been running business minimal 1 year. Such standard is required to assess whether their business can run well or not. • Join the community, paguyuban, or cooperatives member that can give recommendation that its members have been given trust through the BTN Micro KPR. • Certification must be carried out by the BTN as each prospective Micro KPR debtor provides guarantee in the form of house or land being financed that are bound by the SHT and SKMHT.
As the early stage, the Company has facilitated informal Micro, Small and Medium Enterprises workers that joined the Association of Noodle and Bakso Seller (Apmiso), Garut Barber Solidarity, Blue Bird Driver, Development (FS6) and Ojek-application based driver (Go-Jek and Grab). MSME is a very potential market for the financial services In the future, workers from other informal sectors like industry, especially banks for channeling financing. In fisherman, vegetable seller, or artisans will be given an addition to contributing to economic growth of up to equal opportunities in order for them to have their own 60.34%, Micro, Small and Medium Enterprises (MSMEs) houses. absorb 96% of the national workforce based on data from the Coordinating Ministry for the Economy. So that Through the BTN Micro KPR program, the informal the development of this business sector will improve workers are indirectly being forced to save some parts community welfare on an ongoing basis. of their income, particularly for buying important assets in the future such as houses and other property. Most The Company provides the widest possible access to importantly, they now can dream having a house and then capital the nation, especially in providing business capital accomplish it. to encourage the development of MSME Credit in all economic sectors that are feasible, to finance investment and / or working capital in the context of running and KPR BTN BP2T developing its business.
Saving-based House Financing KPR (BR2BT) is a subsidized Until the end of 2019, the Company’s MSME loan portfolio home ownership loan that is a part of collaborative has reached 7.41% with the largest distribution being to program between the BTN Bank and the PUPR Ministry SME-scale property developers doing business for low- which is disbursed along with the deposit subsidy for cost housing projects. With this approach the Company communities who have savings for the landed-home also benefits from an increase in housing supply. purchase and house construction, as well as benefits of BPJS Employment additional services. In addition, the Company distributes Construction Loans to small developers who build housing for MBR and Home ownership financing through this scheme emanates business activities related to small-scale construction from the Company KPR, prospective debtor’s savings, value chains, ranging from the brick, ceramic, tile and BP2BT Funding from the Ministry of PUPR. The manufacturing industry or those who have furniture or targeted group is family or individuals having aggregate home furnishings businesses. income of Rp2-5 million per month to build landed-home or modest apartment as well as self-help houses. Through Another approach taken by the Company to increase the this scheme, the debtor can enjoy the subsidized deposit loan portfolio in this segment is through the development from the BP2PT and maximum instalment for 20 years of SOEs Creative Homes (RKB). Here the Company with particular conditions. synergizes with other SOEs to facilitate the development of local community economic activities. KPR with this scheme was just introduced in 2018 where the Company together with the Government set the target of house provision of 105,500 units in 2018-2020. BTN BP2BT KPR is a collaborative program among the Company, PUPR Ministry, and the World Bank.
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 148 149
In addition to providing capital to MSMEs, the Company Aside from going through commercial credit product contributes to developing the capacity of MSME lines, starting at the end of 2017, the Company also gets customers to be more productive, competitive, and the mandate for the distribution of People’s Business global-minded through monitoring, coaching, mentoring Credit (KUR) from the Government. KUR is credit or to MSMEs that accept credit facilities, research & financing for working capital and / or investment to outreach, and sponsorships. individual / individual debtors, business entities and / or business groups that are productive and feasible but do not yet have additional collateral or insufficient additional collateral.
Financial Services for Low-Population Areas and Underdeveloped Regions
To improve financial access, the Company has operated in some low-population provinces and underdeveloped regions. Access to financial services in these areas is expanded by providing bank offices and ATMs.
The Company’s Network Access Index in the Low Population Province in 2018 (FS13) Access Point
Total Office Sub- equiva- Province/Region Popula- Branch Cash Access branch lent to ATM Total tion* Office Office Index** Office Cash Office Low Population Province Central Kalimantan 2.183.668
Papua 3.265.202 1 3 2 6
Average
Underdeveloped Region Bondowoso 736.721 1 1
Situbondo 669.713 1 1
Bangkalan 937.497 1 2 2 5
Sampang 884.204 1 1
Pandeglang 1.200.512 1 1
West Lombok 644.586
Central Lombok 912.879 1 1
East Lombok 1.173.781 1 1
Sumbawa 445.503 1 1
Kupang 360.228 1 1 1 3
Ketapang 485.118 1 1
Sintang 396.392 1 1
North Gorontalo 104.133
Central Mamuju 105.495 1 1
Sorong 82.784 1 1
Average
* Population based on data from the Central Statistics Board (BPS). ** Access Index = Total population/Number of Access Point *** Low population level is determined by using standard measurements with population densities below 20 people per km2. From these standards and based on the 2015 Central Statistics Board (BPS) Population Density data, the provinces classified as low population are Central Kalimantan, North Kalimantan, West Papua and Papua. **** Underdeveloped area is stipulated in the Presidential Regulation Number 131/2015 concerning the Determination of Underdeveloped Regions in 2015-2019. The indicators used as the determination of underdeveloped areas are the community economy, human resources, facilities and infrastructure, regional finance, accessibility, and regional characteristics.
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 150 151
Financial Literacy Program
Financial literacy, which is an effort to gain an understanding of the benefits and risks of financial products and services, is very important in the world of financial service institutions, such as banking. Through financial literacy, the public may determine financial products and services that suit their needs. They may also properly understand the benefits and risks, rights and obligations and believe that the selected financial products and services may improve their welfare.
According to the latest results, the 2019 National Financial Literacy and Inclusion Survey (SNLIK) conducted by the Financial Services Authority, the financial literacy index and financial inclusion recorded a significant increase in 2019. The financial literacy index in 2019 was recorded at 38.03 percent, an increase compared to the results the 2016 FSA survey with an index of only 29.7 percent. While the 2019 financial inclusion index was 76.19 percent, also increased compared to 2016 with an index of 67.8 percent.
Referring to the survey, in the last 3 years there was an increase in public financial understanding (literacy) of 8.33 percentage points and an increase in access to financial services products by 8.39 percentage points. The increase in the literacy index was at the same time a success because it succeeded in achieving the financial inclusion index target launched by the government through Presidential Regulation Number 82 of 2016 concerning the National Inclusive Financial Strategy (SNKI), which amounted to 75 percent in 2019.
In the latest survey, as many as 12,773 respondents from 34 provinces and 67 cities / regencies in Indonesia were involved while still considering gender and urban / rural area strata. Based on regional strata, the financial literacy index in urban areas reached 41.41 percent, while the financial inclusion index was 83.60 percent. The index is higher when compared to rural areas, namely the financial literacy index was recorded at 34.53 percent, while the financial inclusion index was 68.49 percent.
According to the FSA, a significant increase in the index, while being able to achieve the targets set by the government, is the result of synergy and joint work of various parties, including from the banking community. The financial literacy program by Company is implemented with reference to Financial Services Authority Circular Letter No. 1/SEOJK.07/2014 dated February 14th, 2014 on Education for Financial Literacy Improvement to Customers and/or Public and support for the National Saving Movement based on the Government Regulation No. 82 Year 2016 on the National Strategy of Financial Inclusion (SNKI). The Company also provides SimPel product or Student Saving for students with the ease of opening account and transactions requirements. SimPel is designed for improving the education and financial inclusion as well as to encourage awareness of saving among school-age children.
Financial Literacy Education through the Program of Students Understand the Indonesia Archipelago (FS16)[6.c.3)a)]
Coinciding with the Republic of Indonesia’s Independence Day, August 2019, the Company held various activities, including the Students Understand The Indonesia Archipelago (SMN) Program. The program starts by inviting hundreds of students to participate in the selection that has been prepared. Furthermore, students who qualify will represent students in Bengkulu to be dispatched to West Nusa Tenggara (NTB). They will take part in the Students Understand The Indonesia Archipelago (SMN) Program for a week, from August 13-20, 2019. Conversely, students who pass the selection in NTB will take part in the SMN in Bengkulu. In the program, as many as 23 students were chosen.
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 150 151
One of the SMN activities was a visit to the Company’s Office in Jakarta and gained knowledge about banking products, the history of the Company and the Company’s participation in supporting the government, especially in the One Million Houses Program. Afterwards each student gets a “Champion” savings, a special student savings product from the Company. In the previous year, the Company was also present through the SMN Program in Bengkulu. The difference, in 2019, the Company synergizes with other SOEs, namely the Indonesia State Printing Company (PNRI), PT Pos Indonesia and Peruri.
Social Economic Compliance
BTN believes that compliance with various regulations, including in the social and economic fields, is one of the keys to moving forward and developing. Through compliance, the Company does not need to face various problems, including the possibility of receiving fines or other non-monetary sanctions. (103-1)
Compliance in the social field, the Company is committed to meeting regulations related to employment, K3, and so on. Its implementation, among others, recruits employees for a certain time, there are no child laborers, treats employees and customers equally, creates a safe and comfortable work environment in accordance with K3 principles, and so on. Meanwhile, compliance in the economic field is performed, among others, by competing healthily, antitrust, anti-corruption, providing a decent wage, and so on. (103-1, 103-2)
The Company’s efforts to earnestly fulfill this commitment bring results in the absence of fines or non-monetary sanctions resulting in non-compliance with laws or regulations in the social and economic fields. BTN also has no case to be reported to the dispute resolution mechanism in Indonesia, for example labor disputes, product legality and so on. (103-3, 419-1)
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 152 153
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 152 153
CUSTOMER SATISFACTION AS SERVICE PRIORITY
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 154 155
Indonesians are the Company’s spirit to serve millions Furthermore, the transformation plan is also supported of customer in Indonesia. As a company engaged in by the development of new operating models that financial services, Bank Tabungan Negara (BTN) has include: (1) Business Process Improvement, (2) Network & commitment to become a bank that serves and supports Distribution Design, and (3) completing the organizational the housing sector through three main products namely; design such as increasing the role of risk management individual, corporate and sharia financing. In the midst and improving human capital capacity. of tough competition, the Company has established the best policies and service standards to achieve customer To ensure that head office, regional offices and branch satisfaction. Bank Tabungan Negara believes that offices can perform its function properly and integratedly, achieving customer satisfaction will foster trust in the the role of Integrated Governance, Risk, and Compliance Company so that its presence is more solid, strong and (iGRC) is very important. IGRC is also very important to sustainable. (103-1) ensure that business processes and risk management run properly and supported by human capital with sufficient To develop customer satisfaction, the Company competence. implements various things, such as below: (103-2): 1. Offering products and services in accordance with The framework of iGRC used by Bank Tabungan Negara applicable quality standards. includes aspects is as follows: 2. Providing the best service to customers and 1. Business Strategy : following up on customer complaints fairly without This aspect is very important for head office in discrimination. determining the overall strategy and direction of the 3. Carrying out sustainable promotions in a fair, bank’s risk strategy. transparent, accountable, and accepted by generally 2. Business Management : accepted norms in society. This aspect is significantly needed for the head office 4. Employees must support the Company in order to to determine policies, monitoring tools, and risk achieve customer satisfaction and trust. analysis.
In the effort to achieve customer satisfaction, the human Digital Banking capital factor behind those various programs, including their competence and expertise, are very important. Saat ini, disrupsi ekonomi tidak dapat dihindari. Selain When information technology dominates, digital banking At present, economic disruption is inenvitable. In is the answer offered by Bank Tabungan Negara. In this addition to optimize the flow of funds from unicorns context, the technological aspects are very important, in the digital ecosystem, banks must also be flexible in even become the main necessity. Therefore, the Company opening opportunities for collaboration with start-ups continues to strive and ensure that the existing IT system and financial technology to improve service excellence in is well planned and able to adjust to the needs and trends financial services, which has an impact on the increasing of business development (IT as Business Enabler). In line customer trust and fee-based income. with that, to provide plenary services, the Company is also aware of the importance of Risk Management, the effective implementation of the Compliance Function, In facing the development of digital technology, the and the implementation of Internal Control. Company utilizes the development of digital ecosystems in Indonesia through two strategies. First, the Company Transformation and partners with Plug n Play Indonesia in finding start-up Implementation of the Company’s companies that will serve as strategic partners to meet IGRC the Company’s needs in digital transformation. Second, enhancing e-channel: Transformation is a mandatory aspect for Bank Tabungan • The company focuses on increasing collaboration Negara to be able to sustain, even to grow in the midst with e-commerce and fintech. of intense competition in the field of financial services. To • One of them becomes e-commerce acquirer achieve that goal, the Company has set some strategic considering e-commerce transaction in Indonesia pillars, namely: focused and specific business segment, rapidly develops. agile organization, human capital, and work culture, optimization of sales channels and IT infrastructure.
In carrying out the strategic pillars, the Company has launched the transformation of the main functions of head office, regional offices and branch offices.
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 154 155
The concrete steps that can be taken include the With regard to customer data privacy, the Company Company strengthens marketing through exhibitions has always complied with relevant laws and regulations. and partnerships, increasing digital lines to facilitate In this context, Bank Tabungan Negara refers to Act credit applications through the portal www.btnproperti. Number 7 of 1992 concerning Banking, Act Number 10 co.id, and making the portal www.rumahmurahbtn.co.id of 1998 concerning the amendment to Act Number 7 of accessible to people who want to own house auctions at 1992, and Bank Indonesia Regulation Number 2/19 / PBI lower prices. / 2000 concerning Requirements and Procedures for the Issuance of Bank’s Confidential or Written Permits related Customers Education to customer privacy. Guided by these various regulations, the Company always preserves and maintains the privacy Bank Tabungan Negara continues to strive to disseminate and security of customer data on every transaction. (103- its products and services. These activities are packaged 2) into promotion programs for customers, including: To realize the commitment and to increase information BTN Zone security that are able to ensure smooth-running BTN provides BTN Zone facilities on several college business and create better, safer, successful and campuses. The facility is a system and service uneditable operational activities, and to maintain the infrastructure with the concept of a digital solution from image of Bank Tabungan Negara as a trusted bank, BTN with the aim to increase convenience and facilitating Bank Tabungan Negara has a specific policy, namely transaction services and smartcard /digital-based access. the Board of Directors’ Circular Number 40/DIR/ICTD / BTN Zone provides access for students to connect 2016 concerning the Information Security Guidelines of through Internet, studying the financial products of the PT Bank Tabungan Negara (Persero) Tbk. In this policy, Company, and experience directly the ease of transacting prerequisites have been established to ensure that all with the application of digital solutions that can promote confidential and sensitive information is protected from a cashless society. BTN Zone has been held at Universitas computer malwares, thus minimizing the malware attack. Diponegoro, Syiah Kuala University, Universitas Jenderal Soedirman, Universitas Negeri Yogya, and Institut The various efforts have been made by the Company to Teknologi Bandung. protect customer data including installing all software that has been authorized (approved) and periodically Digital Application updated, providing information technology security (IT) Promotion Program for customers also have been training to users who use IT resources, implementing established via banking application for smartphones in management or standardizing passwords to ensure addition to internet banking that can be downloaded via secure access to protected information. In addition, PlayStore/appstore . This application provides conveniences periodically, the Company also evaluates the overall data for customers to pay for credit card / insurance bill, transfer security system. Until now, in general, our data security and pay for e-commerce purchases and top up digital system is still very adequate and effective to provide payments such as gopay, grabpay , and others. security protection for customer data.
The Company’s high commitment in maintaining Privacy and Security Of customer privacy and data result in the zero complaints related to violations of customer privacy, such as data Customer Data leakage, hack, or loss of customer data. In addition, there are also no similar complaints from the authorities in the Bank Tabungan Negara has complete data from every financial industry. (103-3, 418-1) customer. The data are obtained since every applicant must fill the form completely before they become Di luar pengaduan privasi data nasabah, Perseroan juga customers. The data is personal information that is only memberikan ruang bagi nasabah untuk menyampaikan known by the Company and customers so that their pengaduan terkait kualitas layanan dan produk Bank privacy must be strictly maintained. In the midst of various Tabungan Negara. Berdasarkan data yang ada, Perseroan ease of data access along with advances in information mendapatkan pengaduan sebanyak 42.113 dengan technology, including the risk of cybercrime, the privacy rincian sebagai berikut: (103-3) [6.c.3)b)] and security of customer data are the top priority for Bank Tabungan Negara. (103-1)
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 156 157
Customer Complaints Table 2019 No Category Total Presentation 1 Indications Fraud 991 2.35%
2 Fundraising 329 0.78%
3 Funds Distribution (Certificates, Interest Rates, etc.) 464 1.10%
4 Cooperation Products 106 0.25%
5 Other Products 194 0.46%
6 Payment System - Alto 856 2.03%
7 Payment System - ATM Bersama 2706 6.43%
8 Payment System - ATM BTN (On Us) 3528 8.38%
9 Payment System - ATM Merah Putih 13988 33.22%
10 Payment System - ATM Prima, Link, Visa 9570 22.72%
11 Payment System - ATM/ Kartu Kredit 2322 5.51%
12 Payment System - Direct Debit 119 0.28%
13 Payment System - Electronic Banking 6550 15.55%
14 Payment System - Credit card 17 0.04%
15 Payment System - Prepaid Card 2 0.00%
16 Payment System - Clearing 14 0.03%
17 Payment System - Others 357 0.85%
Total 42113 100.00%
Customer Satisfaction Survey
Bank Tabungan Negara has made maximum effort to provide the best service to customers. The Company hopes that the efforts made can answer and meet customer expectations so that they get satisfaction with the services. To find the certain level of customer satisfaction, the Company regularly implements customer satisfaction surveys. [6.f.5)]
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 156 157
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 158 159
INDEX OF GRI STANDARDS CONTENTS
GRI Standards Indicators DISCLOSURE Page Omission GRI 102: GENERAL DISCLOSURE 2016 Disclosure ORGANIZATION PROFILE
102-1 Company name 42
102-2 Activities, Brands, products, and service 42, 52
102-3 Head office location 42, 54, 56
102-4 Operations location 42, 54, 56
102-5 Ownership and legal form 42, 56
102-6 Market serviced 42, 54
102-7 Organizational scale 56
102-8 Information on employee 57
102-9 Supply chain 59
102-10 Significant change on the organization and its supply chain 59
102-11 Prevention approach or principle 59
102-12 External initiative 60
102-13 Association Membership 65
Disclosure STRATEGIES
102-14 Statement from senior decision maker 23
Disclosure ETHICS AND INTEGRITY
102-16 Values, principles, standards, and behavioral norms 47,48
Disclosure GOVERNANCE
102-18 Governance structure 50,
Disclosure STAKEHOLDERS PARTICIPATION
102-40 List of stakeholder groups 88
102-41 Collective bargaining agreements 137
102-42 Identifying and selecting stakeholders 88
102-43 Approach to stakeholders participation 88
102-44 Main topics and issues raised 88
Disclosure REPORTING PRACTICE
102-45 Entities included in the consolidation financial statements 33
102-46 Determining the report contents and topic limitation 34
102-47 List of material topics 35, 36
102-48 Restating information 33
102-49 Changes in reporting 37
102-50 Reporting period 33
102-51 Latest reporting date 33
102-52 Reporting cycle 33
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 158 159
GRI Standards Indicators DISCLOSURE Page Omission
102-53 Contact point for report inquiry 37
102-54 Claim that the reporting is in accordance with the GRI 33 Standard
102-55 Index of GRI contents 34,159
102-56 Assurance by external parties 37
DISCLOSURE OF SPECIAL STANDARDS 2016 ECONOMIC TOPICS ECONOMIC PERFORMANCE
GRI 103: 103-1 Explanation of material topics and the limitations 36,96 Management Approach 2016 103-2 Management approach and its components 99,138
103-3 Evaluation of management approach 105,138
GRI 201: Kinerja 201-1 Direct economic value that is generated and distributed 105 Ekonomi 2016 201-3 The obligations of defined benefit pension plans and other 138 pension plans
201-4 Financial aid received from the government
MARKET EXISTENCE
GRI 103: 103-1 Explanation of material topics and the limitations 36,96 Management Approach 2016 103-2 Management approach and its components 132
103-3 Evaluation of management approach 132
GRI 202: Market 202-1 Ratio of entry-level employee standard wages by gender to 132 Existence 2016 regional minimum wage
INDIRECT ECONOMIC IMPACT
GRI 103: 103-1 Explanation of material topics and the limitations 36, 96 Management Approach 2016 103-2 Management approach and its components 110
103-3 Evaluation of management approach 111, 113,116
GRI 203: Indirect 203-1 Infrastructure investment and services support 111,116 Economic Impact 203-2 Significant indirect economic impact 111,116
PROCUREMENT PRACTICES
GRI 103: 103-1 Explanation of material topics and the limitations 36 Management Approach 2016 103-2 Management approach and its components 59
103-3 Evaluation of management approach 59
GRI 204: Indirect 204-1 Proportion of expenditure for local suppliers 59 Economic Impact
ENVIRONMENTAL TOPICS MATERIAL
GRI 103: 103-1 Explanation of material topics and the limitations 36,120 Management Approach 2016 103-2 Management approach and its components 122
103-3 Evaluation of management approach 122
GRI 301: Material 301-1 Material used by weight or volume 122 2016
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 160 161
GRI Standards Indicators DISCLOSURE Page Omission ENERGY
GRI 103: 103-1 Explanation of material topics and the limitations 36,120 Management Approach 2016 103-2 Management approach and its components 121
103-3 Evaluation of management approach 121,123,124
GRI 302: 302-1 Energy consumption in the organization 123 Energy 2016 302-4 Reduced energy consumption 124
WATER
GRI 103: 103-1 Explanation of material topics and the limitations 36,120 Management Approach 2016 103-2 Management approach and its components 124
103-3 Evaluation of management approach 124
GRI 303: Water 2016 303-1 Water collection by source 124
EFFLUENT AND WASTE
GRI 103: 103-1 Explanation of material topics and the limitations 36,120 Management Approach 2016 103-2 Management approach and its components 126
103-3 Evaluation of management approach 126,127
GRI 306: Effluent 306-2 Waste by type and method of disposal 126 and Waste 2016
ENVIRONMENTAL COMPLIANCE
GRI 103: 103-1 Explanation of material topics and the limitations 36,120 Management Approach 2016 103-2 Management approach and its components 127
103-3 Evaluation of management approach 127
GRI 307: 307-1 Non-compliance with laws and regulations on environment 127 Environmental Compliance 2016
SOCIAL TOPICS Employment
GRI 103: 103-1 Explanation of material topics and the limitations 36,130 Management Approach 2016 103-2 Management approach and its components 131
103-3 Evaluation of management approach 132,137,138
GRI 401: 401-1 New employee recruitment and employee turnover 132 Employee 2016 401-2 Allowances provided to full-time employees that are not 137 provided to temporary or part-time employees
401-3 Maternity leave 138
OCCUPATIONAL HEALTH AND SAFETY
GRI 103: 103-1 Explanation of material topics and the limitations 36,130 Management Approach 2016 103-2 Management approach and its components 131,134
103-3 Evaluation of management approach 135
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 160 161
GRI Standards Indicators DISCLOSURE Page Omission
GRI 403: 403-2 Types of occupational accidents and occupational accident 135 Occupational Health rates, work-related diseases, lost workdays, and absences, and Safety 2016 as well as the number of work-related deaths
403-3 Workers with high risk of accidents or dangerous diseases 135 related to their work
TRAINING AND EDUCATION
GRI 103: 103-1 Explanation of material topics and the limitations 36,130 Management Approach 2016 103-2 Management approach and its components 136
103-3 Evaluation of management approach 136
GRI 404: Training 404-1 Average hours of training per year per employee 136 and Education 2016
404-3 Percentage of employees who receive regular reviews of 136 career performance and development
DIVERSITY AND EQUAL OPPORTUNITY
GRI 103: 103-1 Explanation of material topics and the limitations 36,130 Management Approach 2016 103-2 Management approach and its components 136
103-3 Evaluation of management approach 137
GRI 405: Diversity 405-1 Diversity of governance body and employee 137 and Equal Opportunity 2016 405-2 Ratio of basic salary and remuneration of female worker 137 compared to male worker
NON-DISCRIMINATION
GRI 103: 103-1 Explanation of material topics and the limitations 36,130 Management Approach 2016 103-2 Management approach and its components 132
103-3 Evaluation of management approach 133
GRI 406: Non- 406-1 Incidents of discrimination and corrective actions taken 132 Discrimination 2016
FREEDOM TO ASSOCIATE AND COLLECTIVE BARGAINING
GRI 103: 103-1 Explanation of material topics and the limitations 36,130 Management Approach 2016 103-2 Management approach and its components 137
103-3 Evaluation of management approach 137
GRI 407: Non- 407-1 Operations and suppliers where the right of freedom to 137 Discrimination 2016 associate and collective bargaining may be at risk
CHILD LABOR
GRI 103: 103-1 Explanation of material topics and the limitations 37,130 Management Approach 2016 103-2 Management approach and its components 132
103-3 Evaluation of management approach 132
GRI 408: Child 408-1 Operations and suppliers who are at significant risk of 132 Labor 2016 incidents of child labor
FORCED WORK OR MANDATORY WORK
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 162 163
GRI Standards Indicators DISCLOSURE Page Omission
GRI 103: 103-1 Explanation of material topics and the limitations 37,130 Management Approach 2016 103-2 Management approach and its components 132
103-3 Evaluation of management approach 132
GRI 409: Forced 409-1 Operations and suppliers that/who are at significant risk of 132 Work or Mandatory incidents of forced or compulsory labor Work 2016
LOCAL COMMUNITIES
GRI 103: 103-1 Explanation of material topics and the limitations 3 Management Approach 2016 103-2 Management approach and its components 113
103-3 Evaluation of management approach 116
GRI 413: Local 413-1 Operations with the involvement of local communities 116 Community 2016
MARKETING AND LABELING
GRI 103: 103-1 Explanation of material topics and the limitations Management Approach 2016 103-2 Management approach and its components
103-3 Evaluation of management approach
GRI 417: Marketing 417-3 Incidence of non-compliance related to marketing and Labeling 2016 communication
CUSTOMER PRIVACY
GRI 103: 103-1 Explanation of material topics and the limitations 37,155 Management Approach 2016 103-2 Management approach and its components 155
103-3 Evaluation of management approach 155
GRI 418: Customer 418-1 Complaints based on violations of customer privacy and 155 Privacy 2016 loss of customer data
SOCIAL ECONOMIC COMPLIANCE
GRI 103: 103-1 Explanation of material topics and the limitations 37 Management Approach 2016 103-2 Management approach and its components 151
103-3 Evaluation of management approach 151
GRI 419: Social 419-1 Non-compliance with laws and regulations in social and 151 Economic economic sectors Compliance 2016
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 162 163
Financial Services Sector Supplement
Indicators Reporting Practice Page
FS2 Procedures with specific environmental and social components are applied to business lines
FS3 Process to monitor client implementation and compliance with environmental and social 84 requirements
FS6 Percentage of portfolio for business sectors based on region, size, and sector 148
FS7 The monetary values of products and services are reviewed to provide social benefits 142
FS13 Access points in low population and economic areas 149
FS16 Initiative to increase financial literacy
BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 164 165
INDEX OF FINANCIAL SERVICES AUTHORITY REGULATION NO.51 /POJK.03/2017
No. Description Indicators Page
1 Explanation of Sustainability Strategy [1]
2 Ikhtisar Kinerja Aspek Keberlanjutan
a. Economic Aspect: [2.a] 6 1) quantity of production or service sold; [2.a.1)] 6 2) income or sales; [2.a.2)] 6 3) net profit or loss; [2.a.3)] 6 4) environmentally friendly products; and [2.a.4)] - 5) involvement of local parties related to the business process of Sustainable [2.a.5)] - Finance.
b. Environmental Aspect: 1) energy use (such as electricity and water) [2.b.1)] 7 2) reduction of emission produced (for FSI, Issuers, and Public Companies whose [2.b.2)] N/R business processes directly relate to the Environment); 3) reduction of waste and effluent (waste that has entered the environment) [2.b.3)] N/R produced (for FSI, Issuers, and Public Companies whose business processes directly relate to the Environment); or 4) conservation of biodiversity (for FSI, Issuers, and Public Companies whose [2.b.4)] N/R business processes are directly related to the Environment).
c. Social Aspect: Description of the positive and negative impacts of implementing Sustainable [2.c] 6 Finance for the community and environment (including people, regions, and funds).
3 Company Brief Profile:
a. vision, mission, and value of sustainability [3.a] 47
b. name, address, telephone number, facsimile number, e-mail address, and website, as [3.b] 47 well as branch offices and/or representative offices
c. business scale: 1) total assets or asset capitalization, and total liabilities (in million rupiah); [3.c.1)] 56 2) number of employees divided by gender, position, age, education, and [3.c.2)] 57 employment status; 3) percentage of share ownership (public and government); and [3.c.3)] 42 4) operational area. [3.c.4)] 42
d. a brief description of the products, services, and business activities carried out; [3.d] 52
e. membership in associations; [3.e] 65
f. significant changes, among others, of those related to closing or opening a branch, [3.f] 59 and ownership structure.
4 Description of Board of Directors includes:
a. Policies to respond to challenges in fulfilling the sustainability strategy, at least include: 1) explanation of the Company’s sustainability value [4.a.1)] 26 2) explanation of the Company’s responses to issues related to implementation of [4.a.2)] 26 Sustainable Finance; 3) explanation of the Company leaders commitment to achieving the [4.a.3)] 26 implementation of Sustainable Finance; 4) performance achievement of the implementation of Sustainable Finance; and [4.a.4)] 26 5) challenges in achieving the performance in implementing Sustainable Finance. [4.a.5)] 27
b. Implementation of Sustainable Finance: 1) performance achievement of implementation of Sustainable Finance (economic, [5.b.1)] 27 social, and environment) compared to the target; and 2) explanation of achievements and challenges including significant events during [5.b.2)] 27 the reporting period (FSI is required to make Action Plan for Sustainable Finance).
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No. Description Indicators Page
c. Strategies for target achievements: 1) risk management for the implementation of Sustainable Finance related to aspects [5.c.1)] 28 of economy, social, and environment; 2) utilizing business opportunities and prospects; and [5.c.2)] 29 3) explanation of economic, social, and environmental external situations that have [5.c.3)] 27,29 the potential to influence the Company’s sustainability
5 Sustainable governance containing
a. Description of duties of the Board of Directors and Board of Commissioners, [5.a] 73 employees, officials, and/or work units who are responsible for implementing Sustainable Finance
b. Competency development of the Board of Directors, members of the Board of [5.b] 74 Commissioners, employees, officials, and/or work units who are responsible for implementing Sustainable Finance.
c. Explanation of Company procedures, in identifying, measuring, monitoring, and [5.c] 80 controlling risks over the implementation of Sustainable Finance related to economic, social, and environmental aspects, including the roles of the Board of Directors and Board of Commissioners in managing, conducting periodic reviews, and evaluating the effectiveness of the Company’s risk management process.
d. Explanation on stakeholders that includes: 1) stakeholders involvement according to the management’s assessment results. [5.d.1)] 88 2) approach used by the Company in involving stakeholders in implementing Sustainable Finance. [5.d.2)] 88
e. Problems faced, development, and influence on the implementation of Sustainable [5.e] 88 Finance.
6 Sustainability performance:
a. Explanation on activities to build sustainable culture in the Company [6.a] 97
b. Description of economic performance: 1) comparison of target and production performance, portfolio, financing target, or [6.b.1)] 97 investment, income and profit 2) comparison of target and portfolio performance, financing target, or investment [6.b.2)] 121 in financial instruments or projects in line with the implementation of Sustainable Finance.
c. Social performance: 1) The Company’s commitment to providing services of products and/or services that [6.c.1)] 130 are suitable for consumers. 2) Employment: • Equality of employment opportunities and the presence or absence of forced [6.c.2)a)] 140 labor and child labor; • Remuneration percentage of permanent employees at the lowest level against [6.c.2)b)] 132 the regional minimum wages; • A decent and safe work environment; and [6.c.2)c)] 134 • Training and development of employees’ capabilities. [6.c.2)d)] 135,136 3) Community: • information on activities or operational areas that produce positive and negative impacts on the community, including financial literacy and inclusion; [6.c.3)a)] 151 • public complaints mechanism and the number of public complaints received and followed-up; and [6.c.3)b)] 155 • TJSL which can be related to support for sustainable development goals includes the types and achievements of community empowerment program [6.c.3)c)] 109 activities
d. Environmental performance: 1) environmental costs incurred; [6.d.1)] 127 2) a description of the use of environmentally friendly materials, for example the use [6.d.2)] 122 of recycled material types; and 3) description of energy use, at least contains: • the amount and intensity of energy used; and [6.d.3)a)] 123 • the efforts and achievements of energy efficiency carried out including the use [6.d.3)b)] 124 of renewable energy sources
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No. Description Indicators Page
e. Environmental Performance for Companies whose business processes are directly related to the environment: 1) performance as referred to in letter d; [6.e.1)] N/R 2) information on activities or operational areas that produce positive and negative [6.e.2)] N/R impacts on the surrounding environment, especially efforts to increase supporting capacity to the ecosystems; 3) biodiversity, at least contains: • the impact of operational areas that are near or in a conservation area or have [6.e.3)a)] N/R biodiversity; and • biodiversity conservation efforts carried out, including protection of flora or [6.e.3)b)] N/R fauna species; 4) emissions, at least contains: • the amount and intensity of emissions produced based on types; and • efforts and achievement of emissions reductions carried out; [6.e.4)a)] N/R 5) waste and effluent, at least contains: [6.e.4)b)] N/R • the amount of waste and effluent produced based on types; • mechanism for waste and effluent management; and • spills that occur (if any); and [6.e.5)a)] N/R 6) the number and material of environmental complaints received and resolved.. [6.e.5)b)] N/R [6.e.5)c)] N/R
[6.e.6)] N/R
f. Responsibility for developing Sustainable Finance products and/or services: 1) innovation and development of Sustainable Finance products and/or services; [6.f.1)] 144 2) the number and percentage of products and services whose security has been [6.f.2)] N/R evaluated for customers; 3) positive and negative impacts arising from Sustainable Finance products and/or [6.f.3)] 109 services and distribution processes, as well as mitigation carried out to overcome negative impacts; 4) the number of products recalled and the reason; or [6.f.4)] N/R 5) customer satisfaction survey of Sustainable Finance products and/or services. [6.f.5)] 156
7 Written verification from an independent party, if any [7] 37
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TAUTAN GRI STANDARDS DAN SDGs
Sustainable Development Goals/SDGs are new Pillar of Legal Development and development agreements that encourage changes that Governance shift towards sustainable development based on human SDG’s Legal Development and Governance is the rights and equality to encourage social, economic, realization of legal certainty and effective, transparent, and environmental development. SDGs consist of 17 accountable, and participatory governance to create Objectives and 169 targets in the framework of continuing security stability and achieve a state based on law the efforts and achievements of Millennium Development Goals (MDGs), which ended late in 2015. SDGs are enforced with universal, integrated, and inclusive principles to ensure that no one will be left behind or In accordance with the national development goals set “No-one Left Behind”. Ministry of PPN/Bappenas invites out in the National Medium-Term Development Plan all parties to actively participate in voicing and making (RPJMN), Indonesia adopted SDGs in Indonesia’s SDGs efforts to achieve SDGs. (http://sdgsindonesia.or.id/). Referring to this site, there are four pillars of SDGs as follows: PT Bank Tabungan Negara Persero Tbk is committed to contributing to the achievement of SDGs in Indonesia. Pillar of Social Development This commitment is realized through various operational SDGs Social Development is the achievement of fair and activities and the implementation of the Company’s social equal fulfillment of quality basic human rights to improve responsibility, as stated in the Bank’s Sustainability Action the whole community’s welfare Plan (RAKB), Corporate Social Responsibility (CSR), and the Partnership and Community Development Program Pillar of Environmental Development (PKBL). SDG’s Environmental Development is the achievement of sustainable management of natural resources and the Support for SDGs is implemented by linking various environment as a buffer for all life programs/activities carried out by the Company with Indonesian SDGs, as well as GRI Standard with SDGs, Pillar of Economic Development in accordance with SDG Compass guidelines published SDG’s Economic Development is the achievement of by GRI, United Nations Global Compact, and World quality economic growth through the sustainability of Business Council for Sustainable Development (WBCSD), work and business opportunities, innovation, inclusive as per the table below: industry, adequate infrastructure, affordable clean energy, and supported by partnerships
Company Programs/ Compliance with GRI Standards Logo Activities that are Page Disclosures appropriate • Economic Performance 201-1 105 • Provision of job opportunities/ 102-8, 401-1, 401-2, 401-3 57,132,137,138 employment • Provision of supply chain 102-9 59 • Indirect Economic Impacts, 203-1, 203-2 111,116 CSR Programs, and PKBL • Social Economic Compliance 419-1 151
• Economic Performance 201-1 105 • Provision of job opportunities/ 102-8, 401-1, 401-2, 401-3 57,132,137,138 employment • Provision of supply chain 102-9 59 • Indirect Economic Impacts, 203-1, 203-2 111,116 CSR Programs, and PKBL • Social Economic Compliance 319-1 151
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Company Programs/ Compliance with GRI Standards Logo Activities that are Page Disclosures appropriate • Occupational Health and 403-2, 403-3 135 Safety • Social Economic Compliance 203-1, 203-2 111,116 • Indirect Economic Impacts, CSR Programs, and PKBL • Social Economic Compliance 419-1 151
• Training and Education 404-1, 404-3 136 • Indirect Economic Impacts, CSR Programs, and PKBL 203-1, 203-2 111,116 • Social Economic Compliance 419-1 151
• Diversity and Equal 405-1 137 Opportunity • Provision of job opportunities/ 102-8, 401-1, 401-2, 401-3 57,132,137,138 employment • Customer Privacy 418-1 155 • Indirect Economic Impacts, 203-1, 203-2 111,116 CSR Programs, and PKBL • Social Economic Compliance 419-1 151
• Water 303-1, 303-3 124 • Environmental Compliance 307-1 127
• Energy 302-1, 302-4 124 • Environmental Compliance 307-1 127
• Provision of job opportunities/ 102-8, 401-1, 401-2, 401-3 57,132,137,138 employment • Indirect Economic Impacts, 203-1, 203-2 111,116 CSR, and PKBL • Social Economic Compliance 419-1 151
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Company Programs/ Compliance with GRI Standards Logo Activities that are Page Disclosures appropriate • Economic Performance 201-1 201-3 105,138 • Provision of job opportunities 102-8, 401-1, 401-2, 401-3 57,132,137,138 • Diversity and Equal 405-1, 405-2 137 Opportunity • Indirect Economic Impacts, 203-1, 203-2 111,116 CSR, and PKBL • Social Economic Compliance 419-1 151
Indirect Economic Impacts, CSR, and PKBL 203-1, 203-2 111,116
• Material 301-1 122 • Effluent and waste 306-2 126 • Environmental compliance 307-1 127
• Material 301-1 122 • Energy 302-1, 302-4 123.124 • Water 303-1 124 • Effluent and waste 306-2 126,127 • Environmental compliance 307-1 127 • Indirect Economic Impacts, 203-1, 203-2 111,116 CSR, and PKBL
• Material 301-1 122 • Energy 302-1, 302-4 123.124 • Water 303-1 124 • Effluent and waste 306-2 126,127 • Environmental compliance 307-1 127 • Indirect Economic Impacts, 203-1, 203-2 111,116 CSR, and PKBL
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Feedback Sheet Thank you for reading PT Bank Tabungan Negara (Persero) Tbk 2019 Sustainability Report. To realize better reporting quality in the coming year, we expect suggestions, criticisms and suggestions from readers and users of this report. The company is committed to continuously improving sustainability performance and providing the best for stakeholders.
Profile:
Name : ……………………………………………...... …… Institution / Company : ……………………………………………...... …… Telp/HP : ……………………………………………...... …… Stakeholder Category : • Customer • Work Partners/ suppliers • Shareholders • Mass Media • Employee • Community, Local Community • Government and policy makers • Other, please specify ………………………………
Please choose the appropriate answer by putting a √ in front of the available answers:
1. Does this report describe the Company’s performance 3. Is this report easy to understand? in contributing to sustainable development? ¨ Agree ¨ Agree ¨ Disagree ¨ Disagree ¨ I don’t know ¨ I don’t know
2. Is this report useful for? 4. Is this report interesting? ¨ Agree ¨ Agree ¨ Disagree ¨ Disagree ¨ I don’t know ¨ I don’t know
Please write the answers according to your opinion:
1. Which piece of information is the most useful and interesting? ………………………………………………………… ……………………………………………………………………………………………………………………………………
2. Which part of the information is not useful so it needs to be improved? ……………………………………………… ……………………………………………………………………………………………………………………………………
3. Is the data presented transparent, reliable and balanced? ………………………………………………………………… …………………………………………………………………………………………………………………………………… 4. Suggestion/comment for future improvement of the report: ……………………………………………………………… ……………………………………………………………………………………………………………………………………
We really appreciate the feedback you provide. For this, please send this feedback sheet to:
PT Bank Tabungan Negara Persero Tbk [102-53] Corporate Secretary Division Menara BTN Lantai 20 Jln. Gajah Mada No. 1 Jakarta Pusat, 10130 Telp : (021) 6336789 ext. 2003 Fax : (021) 6336719 Email : [email protected]
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BTN IS PRESENT TO HARMONIZE SUSTAINABLE GROWTH SUSTAINABILITY REPORT 2019 BTN HADIR MENYELARASKAN PERTUMBUHAN YANG BERKELANJUTAN
PT Bank Tabungan Negara (Persero) Tbk
Menara Bank BTN 62-21 6336789, 6332666 Jl. Gajah Mada No. 1 62-21 6346704
Jakarta 10130 [email protected] www.btn.co.id