Investor Presentation November 2010
PT Bank Negara Indonesia (Persero) Tbk C:\DPS NEW\Pres\PPT\PresPrint.pot Agenda
OiOverview Going Forward Performance of BNI
1 Section 1
Overview of BNI C:\DPS NEW\Pres\PPT\PresPrint.pot Overview of BNI
Key milestones Highlights
BNI established as first wholly owned state bank 9 Strong pedigree – initially set up as Central BNI first distributed the official currency of Indonesia bank 1946 – 1968 Merger with several commercial banks 9 Compelling brand name –64 years history Primary task of improving Indonesia’s economy with emphasis on industrial sectors
First state‐owned bank to go public 9 Top product synergies in BNI family Launched BNI Securities in 1995 9 Extensive network – 1,112 branches, Launchdhed lflife insurance unit in 1996 four overseas branches and one agency Asian Financial Crisis 9 Large, premium customer base –over 1969 – 2007 Government recapitalization, owning 99.1% of BNI 10 million customers Established Syariah banking in 2000 Secondary Offering, US$445m new Tier‐1 capital Increased public ownership to 23.6%
New management team introduced 9 Reinvigorated management team IlImplemen tdted ttfransforma tion program 9 RbRobust ROE and ROA iitmprovement 2008 – 2010 Government owns 73.3% of BNI trajectory Continue to strengthen BNI through key hires 9 Dominant bank in Indonesia
BNI has establish ed ilfitself as a market ldleader in IdIndonesi a thhhrough over hlfhalf a century of operations
3 Dominant bank in IndonesiaC:\DPS NEW\Pres\PPT\PresPrint.pot 1 with well‐established brand and deep history
BNI has a long track record, rivaled by none, in the Indonesian banking sector Year of brand establishment
1956 1959 1968 1998 2008 1946 1957 1963 1971 2002
Strong brand recognized by the industry globally
2005 2006 2009 / 2008 / 2007 2009 / 2007 2009 2009 2010 2010 2010 2010 The Banker Indonesia Banking Service Top Brand Award – No. 1 No. 1 Top 3 Customer Best Domestic Best Local Best Local Award –Bank Corporate Excellence Awards Category: Credit card in Bookrunner Arranger for Satisfaction FX Provider of Cash Cash of the Year Brand Infobank & MRI Recognition of for Indonesia Indonesia Among Largest Single‐Bank Management Management in Indonesia Visualization Outstanding Syndicated Syndicated Banks in Electronic Bank – Bank – The Banker Award Achievement in Building Loans Loans Indonesia Trading in Medium Large Businessweek the Top Brand IFR IFR Roy Morgan Indonesia Corporates Corporates Frontier Consulting Group Asia Money Asia Money Asia Money and Marketing Magazine
FX POLL
BEST DOMESTIC FX PROVIDER OF SINGLE BANK ELECTRONIC TRADING IN INDONESIA
4 Dominant bank in IndonesiaC:\DPS NEW\Pres\PPT\PresPrint.pot 1 with well‐established brand and deep history
Total assets (1H2010) Gross loans (1H2010) Customer deposits (1H2010)
Mandiri 402 13.9% BRI 230 14.3% Mandiri 327 14.4%
BRI 324 11.9% Mandiri 216 12.3% BRI 259 12.2%
BCA 299 11.1% BCA 132 8.3% BCA 255 12.2%
BNI 225 8.2% BNI 126 7.7% BNI 184 8.6%
Niaga 126 4.7% Niaga 90 5.7% Niaga 104 50%5.0%
Danamon 100 3.7% Danamon 67 4.2% Danamon 67 3.2%
Panin 89 3.2% Panin 48 3.1% Panin 62 3.0%
BII 68 2.4% BTN 46 2.8% BII 52 2.5%
Permata 63 2.3% BII 45 2.8% Permata 49 2.3%
BTN 61 2.3% Permata 43 2.7% BTN 40 1.8%
0 100 200 300 400 500 0 50 100 150 200 250 0 100 200 300 400 (IDR trn) (IDR trn) (IDR trn)
BNI is a dominant bank in Indonesia, among the top 4 by assets, loans and deposits
Source: Consolidated figures shown from consolidated company reports as of 1H2010; Indonesian Banking Statistics by Bank of Indonesia as of June 2010 5 Notes: 1 Market share figures based on total assets; gross loans to third parties and customer deposits of Indonesian commercial banks only (bank only figures) C:\DPS NEW\Pres\PPT\PresPrint.pot 5 Stable deposit franchise with low cost of ffdiunding
Cost of deposits (1H2010)1 CASA ratio (1H2010) Loans‐to‐deposit ratio (1H2010)
BCA 2.88 BCA 73.3 BCA 51.6
BNI 3.50 BNI 60.2 Mega 63.6
Mandiri 4.11 Mega 59.2 Mandiri 66.2
BRI 4.32 Mandiri 57.3 BNI 68.5
Niaga 4.78 BRI 57.1 Panin 76.5
Panin 4.81 Permata 44.8 BII 85.5
Permata 5.08 Niaga 44.0 Niaga 86.5
BII 5.29 Panin 43.4 Permata 87.3
BTN 5.35 BII 41.1 BRI 88.9
Danamon 5535.53 Danamon 38. 5 Danamon 100. 2
0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 0.0 20.0 40.0 60.0 80.0 0.0 20.0 40.0 60.0 80.0 100.0 120.0 (%) (%) (%)
BNI’s large and stable deposit base has given the bank robust liquidity and low cost of funding
Source: Detailed company reports as of 1H2010 6 Note: Consolidated figures shown unless otherwise noted 1Cost of deposits calculated as interest expense from deposits to customers and other banks (including bonus and revenue‐sharing expenses on Syariah funding products)/average deposits (where interest expense split unavailable, total interest expense is applied); 1H2010 figures are annualized C:\DPS NEW\Pres\PPT\PresPrint.pot 4 Extensive domestic and itinternati onal nettkwork
BNI’s multiple touch points for individual and corporate customers
Consumer Small Medium Individual customer Domestic Int’l BNI Mobile Call ATMs loan business business e‐banking Branches Branches Emerald banking center (4,072) centers centers centers (1,112)1 (5)2 (24) 10.9 million deposit accounts (12) (51) (20) 1.8 million credit cards
97,400 mortgage customers
Corporate/SME customer highlights
143,024 corporate deposit accounts
943 corporate lending accounts
71,982 SME lending accounts Indonesia (1,112 branches)
Platform for efficient and effective cross‐selling of products and services
Notes: 7 1 As of September 30, 2010; Domestic branches include 167 conventional branches, 887 sub‐branches, 58 Syariah branches and sub‐branches 2 Four overseas branches in Hong Kong, London, Singapore and Tokyo and an agency in New York C:\DPS NEW\Pres\PPT\PresPrint.pot 4 Extensive domestic and itinternati onal nettkwork
BNI’s global remittance network Incoming remittances
Market share 23.7% 24.5% 27.4%
2,000,000
1 1,500,000 1 ps 4 1 1 8 sli 4 4 1 1 2 6 of 5 1 2 1,000,000 3 1 1,781,255 1,796,593
No. 1,511,984 3 2 10 6 1 500,000
0 2008 2009 3Q2010
Remittance representatives (12) Overseas offices (5) & alliances (1) Outgoing remittances Saudi Arabia Qatar Singapore Office London Office Jeddah (1) Doha (1) SingPost New York Agency Office Riyadh (2) Malaysia Hong Kong Office Strategic alliance with BONY Market share 2.9% 4.2% 5.3% Damman (1) Kuala Lumpur (2) Seven‐Eleven for web‐based remittances Kuwait SbhSabah (1) TlkTelkomse l BNI RRittemittance Ltd, Kuwait City (1) Taiwan Excelcomindo Hongkong 250,000 Uni Arab Emirats Taipei (1) Tokyo Office Abu Dhabi (1) SMBC via ATM Dubai (1) Genkin Kakitome (Post Office) 200,000 1
Virtual offices (51) 1,650 Correspondents Banks slips 150,000 2 51 Virtual office in 11 countries: of
38 OTR Domestic Outlets Brunei: 2 virtual offices 249,830 234,745 Singgpapore: 6 virtual offices o.
NN 100,000 Malaysia : 10 virtual offices TfTransfer Via 164,651 Taiwan : 2 virtual offices Qatar : 6 virtual offices Web base (i‐banking) Smart Remittance File Transfer Bahrain : 4 virtual offices SWIFT SWIFT Net – Maybank 50,000 Kuwait : 5 virtual offices ATM (SMBC) Telex Oman : 3 virtual offices Post Office Alliances Jordania : 4 virtual offices SMS Banking 0 UAE : 8 virtual offices Stand‐alone application Remittance Plus Saudi Arabia: 1 virtual offices 2008 2009 3Q2010 Forming the backbone of BNI’s market leading remittance business
Source: Company reports 8 Note: Consolidated figures shown unless otherwise noted 1Local remittance agencies 2 Outgoing transfers (marketing officers) C:\DPS NEW\Pres\PPT\PresPrint.pot 3 Comprehensive and competitive proddtuct offer ing Strong consumer platform
MtMortgages (BNI GGiriya) Bancassurance
3Q2010 loan balance: IDR10.7trn BNI Life awarded “Best Life Insurance Company in Target expanding middle class Assets between IDR1trn –2.5trn” Housing program for employees of corporate Partnership with Sunlife, Cigna and AIA clients 330 BNI Life specialists in branches nationwide Arrangements with property developers and property agencies
Credit cards Savings Wealth management (BNI Emerald)
4th largest credit card issuer in Indonesia Iconic BNI Taplus brand Since 1996 Number of cards issued: 1.8 million Launched in 1989 Elite customers with deposits > IDR1bn Strong fee income business through merchants 10.9 million deposit accounts 24 BNI Emerald outlets Titanium and platinum cards aimed at upper Number of accounts: 8,909 income segment AUM: IDR 23.4trn
Financial Institution Pension Fund Syariah banking (BNI Syariah)
Largest financial institution pension fund in Indonesia1 One of 10 domestic full‐service syariah banks 30 – 40% market share1 #3 in Syariah funding: IDR4.9trn2 FUM: IDR4.8trn #4 in Syariah financing: IDR3.3trn2 Number of members: 468,272 58 specialized outlets BNI Syariah card
Renewed focus in consumer banking that meets growing client needs
Source: Company reports as of 3Q2010 9 Notes: Consolidated figures shown unless otherwise noted 1Based on information published by Financial Institution Pension Fund Association as of 31 December 2009. BNI pension fund program represented 30.0% of financial institution pension funds under management and accounted for approximately 40.0% of the members of all financial institution pension fund programs in Indonesia 2Based on published financial results of individual banks as of 31 December 2009 for Bank Indonesia disclosure purposes C:\DPS NEW\Pres\PPT\PresPrint.pot 3 Comprehensive and competitive proddtuct offer ing
Trusted partner to Indonesian and multi‐national corporates
Energy Infrastructure Communications Consumer Real estate Diversified Construction Education
UiUnivers ity of IdIndonesi a
Salim Group
Corporate loans Commercial loans Cash management clients
07‐3Q10 CAGR = 07‐3Q10 CAGR = 60,000 250 50,000 17.6% 46,284 11.0% 50,833 215
40,000 200 38,106 (IDRbn) 29,665 40,000 (IDRbn) 30,000 150 ans nagement accounts) loans
oo aa ff l 100
20,000 o
m 20,000
10,000 (No. 50 Cash 9
Corporate 0 0 Commercial 0 2007 3Q2010 2007 3Q2010 2007 1H2010 Leading corporate banking franchise backed by rapidly growing client base
Source: Company reports as of 3Q2010 and 1H2010 10 Notes: Consolidated figures shown unless otherwise noted Transformation beginsC:\DPS with NEW\Pres\PPT\PresPrint.pot the riihtght people
Board of Commissioners Internal Audit Change Management Office SiStrategic Planni ng PidtPresident Direct or Division (Chief Executive Officer/CEO) Human Resources Division Corporate Secretary Vice President Director Training & Development (Chief Risk Officer/CRO) Division
Managing Director – Managing Director – Managing Director – Managing Director – Business Banking Consumer & Retail Banking Treasury & FI Network & Services
Corporate Banking Division 1 Consumer Loan Division Treasury Division Chief of Network & Services
Corporate Banking Division 2 Card Business Division International Division Network & Services Division Corporate Funding & Financial Wealth Management Division Division Transactional Banking & Consumer Funding & Financial Services Division Financial Division Middle Business Division Pension Fund Unit
Small Business Division
Managing Director – Managing Director – Managing Director – Chief Financial Officer (CFO) Chief Business Risk Officer Operations & IT Compliance Entreprise Risk Management Banking Operations Compliance Division Financial Control Division Risk Management Loan Recovery Divisions Division Division IT Division Legal Division General Affairs Division Credit Risk Divisions
Subsidiaries Mgmt Unit
Risk & Capital Planning & Budgeting Technology Management Human Resources Disciplinary Service Committee Committee Committee Committee Committee Committee
Key new hires / appointment made under transformation program since: 2010 2009 2008 BNI has undergone siifiignificant human resource transfiformation by putting the rihight people in the rihight places
11 C:\DPS NEW\Pres\PPT\PresPrint.pot Senior management team
Gatot M. Suwondo Felia Salim Yap Tjay Soen Krishna R Suparto Ahdi Jumhari Luddin Suwoko Singoastro President Director/CEO Vice President Director/CRO Managing Director/CFO Managing Director Managing Director Managing Director Since February 2008 Since February 2008 Since February 2008 Business Banking Compliance Network and Services Previously: Vice President Previously: Independent Previously: Commissioner Since February 2008 Since February 2008 Since February 2008 Director of BNI, MD of Bank Commissioner of BNI, of Bank Mandiri & BNI, Previously: President Previously: Director, Previously: EVP Network & Danamon Deputy Chairman ‐ IBRA, Director‐CFO of BII, various Director of Barclays Banking Supervisory, Bank Operation, GM of Network Director, Jakarta Stock executive positions in Astra, Securities, Managing Indonesia Distribution Division Exchange Asia Food & Properties, Director of Bank Danamon Tuban Petro Chemical, & ANTAM
Honggo Widjojo Darmadi Sutanto Sutanto Adi Setianto Sutirta Budiman Kangmasto Managing Director Managing Director Managing Director Chief Business Risk Officer Managing Director Consumer Banking Enterprise Risk Management Treasury and Financial Since September 2010 Network and Services Since May 2010 Since May 2010 Institutions Previously: Commissioner Since May 2010 Previously: Director of Previously: GM Risk Since May 2010 of BNI Securities, CFO of Previously: MD Permata Retail Banking RBS Management Diiiivision, GM Previliously: GM Instiiitutiona l Aneka Kiiimia Raya Bank, MD Indofood, EVP Training Division Funding, GM Bank Mandiri Bancassurance
BNI has been further enhancing its management through key hires with strong industry experience
12 C:\DPS NEW\Pres\PPT\PresPrint.pot Board of Commissioners
Peter B.B. Stok Tirta Hidayat President Commissioner Vice President Commissioner (Independent) Since May 2010 Since May 2009 Previously: Lecturer from Previously: Commissioner Bank University of Indonesia, Permata, President Director Economic Deputy at Vice President office BkBank Niaga, PidtPresident Director Bank Dagang Negara
Achil Ridwan Djayadiningrat Fero Poerbonegoro Bagus Rumbogo CiiCommissioner CiiCommissioner CiiCommissioner (Independent) (Independent) Since May 2010 Since February 2008 Since February 2008 Currently: Advisor to the Previously: Managing Director of BNI Previously Managing Director of BNI Ministry of State‐Owned (Compliance and Human Resource) (Treasury & Private Banking) Enterprises Managing Director of Bank BCA
BS Kusmuljono Ekoputro Adijayanto Commissioner Commissioner (Independent) Since May 2010 Since May 2010 Currently: Advisor for Ministry Previously : Commissioner BRI, of State‐Owned Enterprises President Director of PT PNM Previously SVP Bank Mandiri
This transformation will only be made possible by our effective and experienced professionals
13 Section 2
Strategy & Next Steps C:\DPS NEW\Pres\PPT\PresPrint.pot BNI transformation
Start Small Think Big
Energise, mobilise and start Differentiate ourselves from Compete with domestic implementing transformation Fix the basics the pack and strive to be the leaders process best in class
2008
Improve asset quality Increase asset quality Aggressively seek low cost of funding Sharpening focus of BNI portfolio on corporate and consumer
Implement customer centric operating model ay Diversify fee‐based income dd Improve cross‐selling Aggressive CASA growth To Strengthen capital position Increase efficiency of operations BNI First 6 months 6‐18 months 18‐36 months 36‐60 months
BNI began iilmplementi ng its transffiormation program in 2008 and has ddlielivered a strong set of results so far
15 Well positioned forC:\DPS NEW\Pres\PPT\PresPrint.pot next phase of growth
1 Dominant bank in Indonesia with well‐ established brand and deep history
2 SlStrongly posiiitioned to capiliitalize on Indonesia’s growth
3 Comprehensive and competitive Top business bank product offering
4 Extensive domestic and international netktwork
5 Stable deposit franchise with low cost of funding Top 3 consumer bank 6 Significant improvement in credit risk management
16 To be C:\DPS NEW\Pres\PPT\PresPrint.pot top bibusiness bkbank
Business Banking Client Portfolio 1 Client focused model Diamond Clients 8 target industries Foundation Clients
lers Developing deep industry knowledge rporates ing s uction ee aa oo C Base Corporate Min Understanding who most valuable clients are
Constr
Wholes Beverag and
Ruby Clients &
& &
Sized 2 ‐ Electricity Gas Chemicals Through maintaining strong relationships with anies
Agriculture ring mmunication od ers m
pp Portfolio Clients ee oo && oo client s C F Oil Com Base Commercial Retail Mediu Providing customized sales and service Engine treatment to add value Small Businesses Relationship‐based pricing and solutions
Business Banking Relationship Managers 3 Providing first‐class product support Increasing product specialization Business Banking Products and Services Suite Credit & Transactional Trade Treasury Fostering collaboration across products Funding Banking Finance Products
We are moving from a product‐centric model to a customer‐based model to enhance our product offering to our clients and market share
17 To be C:\DPS NEW\Pres\PPT\PresPrint.pot top 3 consumer bkbank
Key Target Customer Dominant Value Consumer & Retail Segments Propositions Banking Products and Services
Hihigh Net Worth Deposits Lifetime Banking Partner Affluent Families Lending Young Elites LdiLeading the way in Direct Banking
Students Remittance “Wealth management Middle Income Families supermarket” for mass affluent Cards Wealthy Singles Leader in Wealth Planning & Management Weal th Maaageetnagement Golden Oldies
BNI will be positioned to become the Lifetime Banking Partner for our retail customers by understanding their needs
18 Rights issue to leadC:\DPS NEW\Pres\PPT\PresPrint.pot next chhtapter
1 Strategic transformation underway
2 Righ ts issue will ffhurther enhance our asset base
3 Rights issue will finance our business growth
19 Section 3
Performance Exceptional turnaroundC:\DPS NEW\Pres\PPT\PresPrint.pot proven to dtdate
2007 3Q2010
Gross NPL: IDR7.6tn Gross NPL: IDR5.5tn 1. Asset quality NPL ratio: 8.53%1 NPL ratio: 4.38%1 Coverage: 71.9%1 Coverage: 118.3%1 +
Cost of deposits: 4.73% Cost of deposits: 3.53% 2. Low cost fund LDR: 60.6% LDR: 68.6% +
3. Productivity, NIM: 5.4%2 NIM: 6.1%2 Efficiency and CIR: 65.8% CIR: 51.5% Profitability ROAA: 0.51%3 / ROAE: 5.6%3 ROAA: 1.74%3 / ROAE: 19.5%3 +
ATMs: 2,476 ATMs: 4,072 4. Strengthen BNI Number of customers: 9.6m Number of customers: 10.9m Incorporated Non‐interest income: IDR4.1tn Non‐interest income: IDR3.4tn +
Tier‐1 capital: 11.2% Tier‐1 capital: 10.2% 5. Strengthen Capital CAR: 15.9% CAR: 12.4%
BNI has fixed the bbiasics and is ready to embbkark on its strategy for market lldeadershi p
Source: Company reports Notes: Consolidated figures shown unless otherwise noted 21 1Based on Bank Indonesia classification 2 Calculated based on net interest and Syariah income for the relevant year/period as a percentage of average total interest earning assets excluding commitments and contingencies. Annualized for 3Q2010 3Return on average assets calculated as net income / average assets; Return on average equity calculated as net income to shareholders / equity attributed to bank shareholders. Annualized for 3Q2010 4Cost of deposits calculated as interest expense on deposits from customers and other banks/average deposits from customers and other banks. Annualized for 3Q2010 C:\DPS NEW\Pres\PPT\PresPrint.pot Balance sheet
(IDR bn, FYE 31 December) 2007 2008 2009 3Q2009 3Q2010 YoY (%) Total assets 183,342 201,741 227,497 203,060 224,811 10.7%
Placement with other Banks & BI 32,382 31,993 38,153 28,283 31,460 11.2%
Marketable securities 52,901 44,529 50,237 43,447 50,261 15.7%
Loans (gross) 88,651 111,994 120,843 122,116 126,074 3.2%
Customer deposits 146, 189 163,164 188, 469 163, 654 183,772 12. 3%
Deposits from other Banks 3,804 4,100 3,819 3,495 3,155 (9.7%)
Marketable securities issued 1,269 1,269 1,261 1,267 1,277 0.7%
Borrowings 6,309 8,617 5,570 7,737 5,185 (33.0%)
Shareholders’ equity 17,220 15,431 19,144 18,406 21,318 15.8%
Source: Company reports 22 Note: Consolidated figures shown unless otherwise noted C:\DPS NEW\Pres\PPT\PresPrint.pot Loan composition
Loan breakdown by segment (()%) Loans by currency ()(%)
Gross loans 88.7 112.0 120.8 126.1 07‐09 100% 13.3% 11.8% (IDR trn) CAGR (%) 26.3% 20.1% 100% 2.0% 2.8% 2.7% 2.6% 34.7% 75% 6.6% 5.6% 3.9% 3.8% (()10.4%) 50% 88.2% 15.3% 16.6% 79.9% 86.7% 14.9% 15.4% 18.5% 73.7% 80% 25%
0% 2007 2008 2009 3Q2010 60% 40.3% IDR Foreign 43.0% 42.8% 44.4% 18.6% Average yield on IDR loans –1H2010 (%)
40% 30.0% 28.7%
20.0% 20% 14.1% 36.7% 13.5% 33.5% 33.4% 33.7% 17.2% 12.3% 11.8% 10.0%
0% 0.0% 2007 2008 2009 3Q2010 Corporate Medium Small Consumer Credit Card Corpora te SME Cons umer International Syariah
Source: Company reports 23 Note: Consolidated figures shown unless otherwise noted C:\DPS NEW\Pres\PPT\PresPrint.pot Loan diversification
Loan breakdown by economic sector Consumer loan composition Gross loans Gross loans 13.2 17.2 18.4 20.9 88.7 112.0 120.8 126.1 (IDR trn) (IDR trn) 1.1% 100% 2.0% 1.5% 1.6% 100% 2.4% 3.1% 1.8% 1.7% 2.6% 1.6% 1.1% 90% 5.1% 8.1% 90% 10.4% 11.3% 27.6% 30.3% 29.3% 29.6% 80% 80% 13.3%
22.8% 70% 4.2% 70% 6.3% 7.0% 6.9% 26.5% 4.9% 26.8% 3.0% 3.2% 3.2% 60% 48%4.8% 60% 4.3% 24.7% 5.3% 6.0% 5.7% 5.0% 4.7% 7.1% 50% 4.5% 50% 4.6% 6.4% 7.1% 40% 20.0% 40% 18.8% 20.2% 18.9% 30% 30% 51.0% 44.7% 40.9% 36.0% 20% 20%
28.5% 26.0% 23.4% 22.9% 10% 10%
0% 0% 2007 2008 2009 3Q 2010 2007 2008 2009 3Q2010 Manufacturing Hospitality Agriculture Mortgages Auto Credi t cards Constructions Electricity, Gas & Water Mining Multi‐purpose Unsecured Ca s h collateral Transportation & Comm Others
Source: Company reports 24 Notes: Consolidated figures shown unless otherwise noted 1 Others include Business services, Social services as well as Others not classified 2 Consumer loans includes outstanding credit card receivables C:\DPS NEW\Pres\PPT\PresPrint.pot Marketable securities
Securities by type1 Currency breakdown
Total (IDR trn)
16.2 10.2 19.5 17.3 100% 100% 2.5% 5.3% 3.2% 13.4% 95%9.5% 3.0% 1.9% 17.6% 2.6% 20.2% 90% 2.0% 25.9% 6.8% 16.7% 16.3% 80% 15.7% 80% 9.8%
70% 17.3% 22.6% 21.3% 60% 60%
50% 86.6% 40% 82.4% 79.8% 74.1% 40% 74.3%
30% 60.5% 56.1% 52.5% 20% 20%
10% 0% 0% 2007 2008 2009 3Q2010 2007 2008 2009 3Q2010 IDR Foreign
Certificate of BI Bonds Mutual funds Credi t linked notes Others
Source: Company reports 25 Notes: Consolidated figures shown unless otherwise noted 1 Others include Medium term notes and Other debt securities C:\DPS NEW\Pres\PPT\PresPrint.pot Customer deposits
Customer deposits by type Deposits by currency CASA 62.3% 57.9% 55.1% 56.5% 100% Customer 15.0% 15.7% 18.4% 19.4% 146.2 163.2 188.5 183.8 deposits (IDRtrn) 80%
100% 60%
40% 85.0% 84.3% 81.6% 80.6%
20% 80% 37.7% 42.1% 43.5% 44.9% 0% 2007 2008 2009 3Q2010
IDR Foreign 60% (IDRbn) Cost of deposits 1 32.9% 32.1% 8.00 Deposits 40% 31.2% 31.4%
6.00 (%) 4.73 4.33 3.85 3.53 20% 4.00 deposit
of
29.4% 25.8% 25.1% t 23.9% ss 2002.00 Co
0% 0.00 2007 2008 2009 3Q2010 2007 2008 2009 3Q2010 Current Savings Time
Source: Company reports 26 Notes: Consolidated figures shown unless otherwise noted 1Cost of deposits calculated as the sum of interest expense on deposits to customers and banks; Mudharabah profit‐sharing and Wadiah bonus/Average deposits to customers and other banks. Annualized for 3Q2010 C:\DPS NEW\Pres\PPT\PresPrint.pot Liqqyuidity management
Room for loan expansion Optimal liquidity1
40 80.0 68.6 68.6 64.1 29.9 30.6
(%) 28.8 60.6 30 27.3 (%)
60.0 ratio
ets it ss
ss 20
40.0 as
depo 10 to Liquid 20.0
Loan 0 0.0 2007 2008 2009 3Q2010 2007 2008 2009 3Q2010
Healthy IDR liquidity Flush with FX liquidity (%) ) 75.0 120.0 106.6 RR %% 80. 0
( 68. 2 65.0
LD 88.0
LDR 52.6 60.0 80.0 40.0 46.2 42.0 40.0 denominated nominated 20.0 ee nn d 0.0
IDR 0.0 Foreig 2007 2008 2009 3Q2010 2007 2008 2009 3Q2010
Source: Company reports 27 Notes: Consolidated figures shown unless otherwise noted 1 Liquid assets calculated as sum of cash, government bonds and net placement to other banks and Bank of Indonesia / total assets C:\DPS NEW\Pres\PPT\PresPrint.pot 5 Stable deposit franchise with low cost of ffdiunding
Customer deposits by type Deposit breakdown by customers
CASA 62.3% 57.9% 55.1% 56.5% 200,000 Customer 188,469 146.2 163.2 188.5 183.8 deposits (IDRtrn) 183,772 2.2% 2.7% 100% 163,164 19.6% 19%1.9% 19.8% 146,189 150,000 1.2% 80% 37.7% 21.9% 42.1% 44.9% 43.5% 23.5% 30.2%
n) 28.7% bb 60% (IDR
26.5% 100,000
(IDRbn) 25.0%
32.9% Deposits 32.1% 40% 31.4%
Deposits 31.2%
50,000 48.1% 48.9% 49.7% 20% 50.3% 29.4% 25.8% 23.9% 25.1%
0% 0 2007 2008 2009 3Q2010 2007 2008 2009 3Q2010 Current Savings Time Individual / Retail Institutional Government Syariah Deposit franchise strengthened by cash management business
Source: Company reports 28 Note: Consolidated figures shown unless otherwise noted C:\DPS NEW\Pres\PPT\PresPrint.pot Capitalisation
Tier 1 ratio and total CAR1 Equity / Assets
20.0 10.0 9.4 9.5 8.4 7.6 8.0 15.0 15.9 14.3 12.4 6.0 )) 10.0 12.1 (% (%) 4.0 5.0 11.2 10.3 10.2 8.3 2.0
0.0 0.0 2007 2008 2009 3Q2010 2007 2008 2009 3Q2010 Tier 1 CAR Capitalisation against SEA peers
25.0
20.0 19.7 18.7 20.1 16.3 15.0 14.9 14.7 16.5 15.3 15.9 15.1 15.3 16.2 14.1 14.5 14.5 14.7 15.0 (%) 13.1 14.4 12.1 12.4 13.9 10. 0 11. 1 17.6 17.6 10.5 15.3 14.3 14.0 12.2 13.0 11.6 11.8 12.9 12.0 5.0 11.2 10.5 10.2 11.1 10.1 9.2 8.6 7.6
0.0 Panin BTN Danamon BII BCA BRI Mandiri Niaga BNI Permata UOB OCBC DBS CIMB Maybank Public BBL SCB KBank ()(3Q10) Core Tier 1 Tier 1 CAR Source: Company reports as of 1H 2010 (except for BNI as of 3Q2010); Capital benchmarking for Indonesia are bank level only; Singapore (group level); Malaysia (group level); Thailand (bank level) 29 Notes: Consolidated figures shown unless otherwise noted 1 Consolidated figures based on Bank Indonesia classification. 3Q2010 ratios include adjustments for operational risk and market risk Strong asset quality andC:\DPS NEW\Pres\PPT\PresPrint.pot prudtdent proviiision policy
Gross NPL balance Net charge‐off ratio
7,565 5.00% 8,000 4.34%
5,762 4.00% 3.57% 6,000 5,596 5,520 3.48%
bn) 3.00%
4,000
(IDR 1.92% 2.00% 2,000 1.00%
0 0.00% 2007 2008 2009 3Q2010 2007 2008 2009 3Q2010
NPL ratio2 NPL coverage ratio2
9.00% 8.53% 140% 120.1% 118.3% 120% 101.0% 100% 6.00% 5.00% 4.77% 4.38% 80% 71.9%
60% 3.00% 40%
20%
0.00% 0% 2007 2008 2009 3Q2010 2007 2008 2009 3Q2010
Source: Company reports 30 Notes: Consolidated figures shown unless otherwise noted 1Charge‐off ratio calculated as provision expense / average gross loans. Annualised for 3Q2010 2Based on Bank Indonesia classification. BNI is in the process of transitioning to a new accounting standard PSAK 55 which would impair all loans that have been individually assessed, this would increase impaired loans from IDR 5.5tn to IDR 6.9tn as of 30 September 2010, the implied impaired loan ratio would be 5.51% and implied loan coverage ratio would be 94.0% C:\DPS NEW\Pres\PPT\PresPrint.pot Income statement
(IDRbn, FYE 31 December) 2007 2008 2009 3Q2009 3Q2010 YoY (%) Net interest income 7,467 9,912 11,133 8,310 9,005 8.4%
Non interest income 4,130 3,549 4,295 3,146 3,404 8.2%
Operating income 11,597 13,461 15,428 11,456 12,409 8.3%
Operating expenses (7,626) (7,228) (7,991) (5,708) (6,391) 12.0%
Pre‐Provision Operating Profit 3,971 62336,233 7,437 5,748 60186,018 47%4.7%
Net provisions (2,704) (4,359) (4,051) (3,483) (1,776) (49.0%)
Profit before tax 1,481 1,932 3,444 2,343 4,249 81.4%
Net Income to shareholders 898 1,222 2,484 1,855 2,954 59.3%
Source: Company reports 31 Note: Consolidated figures shown unless otherwise noted C:\DPS NEW\Pres\PPT\PresPrint.pot Net interest income
Interest income composition Interest expense composition Interest Interest 14.5 16.1 18.9 14.4 expense 7.4 6.7 8.3 5.4 income (IDRbn) (IDRbn) 100% 5.4% 3.3% 1.6% 3.4% NIM (%) 5.4 6.5 6.1 6.1 4.3% 2.1% 3.4% 7.7% 2.2% 100% 0.3% 0.2% 0.5% 1.0% 3.2% 18%1.8% 16.8% 12. 3% 21.7% 24.6% 1.9% 3.0% 6.3% 75% 4.5% 5.5% 3.3% 75% 4.9% 6.2% 2.6% 2.0% 12.3%
1.2% 50% 50% 91.5% 91.8% 90.1% 87.2%
75. 6% 71.9% 65.6% 56.8% 25% 25%
0% 0% 2007 2008 2009 3Q2010 2007 2008 2009 3Q2010
Loans Syariah Marketable Securities Placement Govt Others Deposits Syariah Borrowing Marketable Securities
Source: Company reports 32 Note: Consolidated figures shown unless otherwise noted C:\DPS NEW\Pres\PPT\PresPrint.pot Non‐interest income
Non‐interest income breakdown1 Recurring fee income breakdown
Non interest 35.6% 26.4% 27.8% 27.4% income ratio 100% 4,500 4,295 4,130 13.8% 13.5% 13.3% 351 90% 21. 2% 365 3,549 4.6% 262 6.0% 5.2% 266 80% 3.8% 5.1% 4.7% 322 3,404 6.6% 1.5% 1.6% 1.8% 3.6% 5.3% 6.0% 184 70% 4.7% 680 1,027 91 2.2% 3,000 630 7.8% 3.9% 15.5% 60% 23. 1% 995 7.9% 15.2% 424 764 50% 5.1% 8.8% bn) 1,223 8.6% (IDR 40% 17.0% 674 15.3% 15.8% 13.5% 1,500 30%
2,231 1,976 20% 1,597 31.4% 29.9% 30.9% 1,461 26.0% 10%
0% 0 2007 2008 2009 1H 2010 2007 2008 2009 3Q2010 Monthly account services Credit card Fee and commissions Gains on marketable securities Investment and financial services FX trading Insurance premium Foreign exchange gains ATM Bill payments Others Bank guarantee Trade finance Others Source: Company reports 33 Notes: Consolidated figures shown unless otherwise noted 1In 2008, there was a decrease in the value of marketable securities of IDR143bn C:\DPS NEW\Pres\PPT\PresPrint.pot Oppgerating expenses
Breakdown of operating expenses Cost income ratio Operating 7,626 7,228 7,991 6,391 expenses (IDR bn) 100% 3.5% 4.7% 5.4% 4.4% 80.0% 3.8% 3.6% 4.2% 4.3% 90% 3.9% 49%4.9% 5.3% 6.7% 9.1% 9.8% 65.8% 80% 12.8% 16.1% 60.0% 70% 53.7% 31.3% 51.8% 51.5% 60% 31.5% 28.9% 27.2% 50% 40.0%
40%
30%
48.4% 20.0% 45.6% 43.3% 20% 41.3%
10%
0% 0.0% 2007 2008 2009 3Q2010 2007 2008 2009 3Q2010 Personnel Expense General & Administrative Underwriting Insurance Promotion Expense Deposit Premium Others
Source: Company reports 34 Note: Consolidated figures shown unless otherwise noted C:\DPS NEW\Pres\PPT\PresPrint.pot Profitability
Return on average assets1 Return on average equity1
20.0% 19.5% 2.00%
1.74%
15.0% 14.4% 1.50%
1.16%
10.0% 1.00%
7.5%
0.64% 5.6% 0.51% 5.0% 0.50%
0.0% 0.00% 2007 2008 2009 3Q2010 2007 2008 2009 3Q2010
Source: Company reports 35 Notes: Consolidated figures shown unless otherwise noted 1Return on average assets calculated as net income / average assets; Return on average equity calculated as net income to shareholders / equity attributed to bank shareholders. Annualised for 3Q2010 C:\DPS NEW\Pres\PPT\PresPrint.pot 6 Significant improvement in credit riiksk management
NPL ratio1 Gross NPL1
10.00% 7,565 8.53% 8,000 8.00% 5,762 bn) 5,596 5,520 6,000 R %) (( DD
(I 6.00% 5.00% 4.77% 4.38% 4,000 ratio NPL
4.00% NPL
Gross 2,000 2.00%
000%0.00% 0 2007 2008 2009 3Q2010 2007 2008 2009 3Q2010
Gross charge‐off ratio Adequate provisioning 140% 5.00% 120.1% 118.3% 4.41% 120% (%) 101.0% (%) 4.00% 3.56% 100% 3.25% 3.44% ratio
ratio 71.9%
80% off 3.00% ‐ age ge rr
rr 60% 2.00% cha cove
40%
1.00% NPL 20% Gross 0.00% 0% 2007 2008 2009 3Q2010 2007 2008 2009 3Q2010
Source: Company reports 36 Note: Consolidated figures shown unless otherwise noted 1 3Q2010 based on Bank Indonesia classification 2Gross provisions (before loan recoveries) / average gross loans. Annualised for 3Q2010 C:\DPS NEW\Pres\PPT\PresPrint.pot 6 Significant improvement in credit riiksk management
Increasing loan recoveries Loan recovery / NPL
1,200 20.0% 19.7% 1,086
10001,000
15.0%
12.9% 800 742 (%)
bn)
LL NP
(IDR /
9.9% 600 555 10.0%
recovery 482 recovery
an oan oo LL L 6.4% 400
5.0%
200
0 0.0% 2007 2008 2009 3Q2010 2007 2008 2009 3Q2010
Source: Company reports 37 Note: Consolidated figures shown unless otherwise noted Apendix
Indonesia Macro Indocators Strongly positionedC:\DPS NEW\Pres\PPT\PresPrint.pot to 2 capitalise on Indonesia’s growth
Largest Southeast Asia economy Strong private consumption
Philippines 2009 Private Government consumption consumption 36% 57% 58% 55% 74% 50% 62% 12% 9% (% of GDP) Singapore 14% Investment 2,000 1,782 30% n) IdIndones ia Private 1,500 40%
Malaysia (US$b consumption private 14% 58% 1,000 743
Net exports Nominal Thailand consumption 500 317 3% 20% 145 119 96 74 2009 Southeast Asia GDP US$1,340bn 2009 Indonesia GDP US$551bn 0 China India Indonesia Thailand Philippines Malaysia Singapore Low banking penetration
Credit o/s (US$bn) 218 4,683 210 249 546 56 129
Credit o/s per capita 45,004 3,526 7,564 3,923 473 622 565 (US$)
(%) 160.0% 125% 106% 98% 96% 51% 36% 29%
120.0% 14% GDP
/ 9% 50% 24% 8% it 80.0% 10% 18% dd 26% 5% 3%
cre 87% 40.0% 70% 8% 7% 61% 48% 2% 3% 38% 31% 0.0% 19% Total
Singapore China Malaysia Thailand India Philippines Indonesia
2008 Corporate Mortgage retail Non‐mortgage retail Indonesia is the largest Southeast Asia economy with a growing financial sector The banking sector remains underpenetrated with headroom for growth Source: EIU as of September 2010; Global Insight as of September 2010; Street Research; Low banking penetration data for December 2008; Bank Indonesia 39 Strongly positionedC:\DPS NEW\Pres\PPT\PresPrint.pot to 2 capitalise on Indonesia’s growth
Credit growth1 Strong expected GDP growth
16.0% 14.2% 14.1% 13.7% 13.3% 12.7% 40.0% 35.5% 12.5% 31.0% 12.0% 10.4%
10E 9.8% ‐ 30.0% 7.9% 7.7% 005 7.2% 7.2%
22 80%8.0% 18. 5% 17.3% 69%6.9% 6.8% 20.0% 15.1% 12.5%
CAGR 10.6% 4.0% 10.0% Loan
0.0% 0.0% Indonesia India China Philippines Singapore Thailand Malaysia India China Indonesia Philippines Malaysia Singapore Thailand 2012E 2013E
Positive demographics Large attractive market densely populated
2009 Population 1,334.7 1,166.0 240.3 98.0 67.0 27.9 5.0 Indonesia (m) Malaysia Population: 240 million Population: 28 million 100% 8% 5% 6% 5% 9% 5% 9% Singapore 80% Sulawesi 42% Population: 5 million 46% 49% 46% Population: 17 million 56% 54% Kalimantan 60% 64% Sumatera Population: 14 million Population: 51 million 40% Maluku and Papua 49% 53% 49% Population: 6 million 20% 46% DKI Jakarta Bali and Nusa Tenggara 35% 37% 28% Population: 10 million Population: 13 million 0% Java (excluding DKI Jakarta) China India Indonesia Philippines Thailand Malaysia Singapore Population: 127 million <30 31‐64 65+ Growth in Indonesia over the coming years is expected to be strong, supported by positive demographics
Source: EIU as of September 2010, Indonesia Center Bureau of Statistics (BPS) 40 Note: 1Loan CAGR based on private sector credit growth