Serving the Country, the Pride of the Nation Adapting Quickly to Face Change Beradaptasi dengan Cepat Beradaptasi dengan Menghadapi Perubahan 2018 ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk PT Bank Negara Indonesia (Persero) Tbk Adapting Quickly to Face Change 1 ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk THEMES AND THEIR MEANING Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk’s performance in 2018 strengthened as they recorded achievements that exceeded the banking standards. Bank BNI continued its transformation and adapted quickly to the current changes in the modern banking industry. In the technology disruption era, BNI has become one of the banks that has advantages based on digital technology. This has been achieved through digital transformation, starting from internal process improvements, then preparing its competent human capital to master technology, to offering its customers many electronic and digital services and products, such as BNI DigiCare, DigiDeal, DigiMaster, and DigiSport. For BNI, the digital services transformation is necessary when facing the challenge of becoming a bank that remains relevant and offers fast, flexible and mobile service solutions to its customers. 2 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk PT Bank Negara Indonesia (Persero) Tbk Adapting Quickly to Face Change 3 ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk THEME CONTINUITY Rising to the Challenge BNI has also grown and developed into a solid national bank with sustainable financial growth. As a State Serving Bank, Nation’s Pride, our challenge is to continue and enhance BNI’s real contribution to the progress of the nation and the country, now and for the future. Bigger, Better, Together With a focus on quality growth, BNI with a broad customer base maintains a leading role in supporting national economic growth. BNI supports customer business segments in the 8 main industry sectors, including Small and Medium Enterprises entrepreneurs. BNI is a loyal and reliable partner for all customers with its products, service, service coverage and electronic channels. Advancing on the Right Track BNI has made significant progress and important achievements in many areas. Most of the achievements and progress can be directly measured, presented in graphs, or reported in the BNI financial statements, such as the branch and ATM growth, the high capital adequacy ratio, and the Net Income growth of Rp10.8 trillion in 2014. 4 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk Working to Build the Nation The Indonesian people have noble ideals as an independent nation to excel in global competition. To support the achievement of these goals, BNI plays an active role as an Agent of Development carrying out the intermediary function of supporting the national banking needs, and continues to show the spirit of achievement to build a nation with a strong sense of responsibility. Moving Faster Wins the Competition The implementation of the ASEAN Economic Community (AEC) in 2015 will further increase competition, especially in the real sector. Mastery of the domestic market will be the answer for MEA, together with an increase in national banking system competitiveness. A value chain approach has became the focus for BNI and is the strategy expected to answer the future challenges and support the development of institutions / corporations, small and medium enterprises (SMEs), and well as reach out to the individuals within. Strengthening Competitive Advantage Based on the Vision and Mission of the Company, BNI strives to provide the best contribution to encourage economic growth and development for the realization of the welfare of the whole society. It is implemented, coordinates, and cooperates with other institutions from countries, governments, individuals, communities, fellow financial companies, and other private entities. Beside to its contribution to the nation and the State, BNI seeks to assert its existence by striving to become one of the major players in the financial sector, especially banking through comprehensive financial services to all banking customers and value added benefits to all stakeholders: customers, investors, employees, and the financial industries. PT Bank Negara Indonesia (Persero) Tbk Adapting Quickly to Face Change 5 ANNUAL REPORT 2018 PERFORMANCEPT Bank Negara Indonesia (Persero) Tbk HIGHLIGHT Loans disbursed increased by 16.2% Net Interest and to Sharia income increased by Rp billion 11.0%to Total assets Rp increased by billion 14.0% to Customer deposits increased by Rp billion 12.1% to Rp billion Profits increased by Equity increased by 10.3% 9.4% to to Rp Rp billion billion 6 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk Gross NPL decreased from 1.9% in 2018 Coverage Ratio The ACGS score increased by in 2018 was 152,9% 91.58 In 2018 (Very Good) up from 88.60 (Good) in the previous year. The Best State Owned Enterprise and Top 50 Public Listed Companies at the Good Corporate Governance Award organized by the Indonesian Institute for Corporate Directorship (IICD). Most Trusted Company Based on Corporate Governance Perception Index (CGPI) in the Good Corporate Governance Award 2018. PT Bank Negara Indonesia (Persero) Tbk Adapting Quickly to Face Change 7 MILESTONES BNI converts to a As a commercial bank with the name “Bank commercial bank and Negara Indonesia 1946”, BNI is given the task BNI opens its first of improving the economy of the people of Indonesia and participates in the national overseas branch in economic development by empowering Singapore. various industrial sectors in Indonesia. The establishment of PT Bank BNI supports the Indonesian Negara Indonesia (Persero) Tbk economy and introduces as the first state-owned bank, BNI as a development bank various banking services such functioning as a central bank given the right to act as a foreign as Floating Banks and Mobile Banks. and a commercial bank. exchange bank. BNI issues Global Bonds through BNI issues new shares through BNI shareholders agreed its London branch office worth a Rights Issue so that public to separate business units USD500 million. BNI’s Global Bonds ownership increases to 40%. syariah bank independent are registered at the Singapore business entity . Stock Exchange. In order to adapt to the changing dynamic business environment, to meet the needs of all BNI joins a strategic partnership stakeholders interests, and with Sumitomo Life Insurance BNI’s Net Income for the first time to align with regulations Company who purchases new breaks the double-digit figure related to management shares issued by PT BNI Life (Rp10,8 trillion), as one result of for financial conglomerate Insurance worth Rp4.2 trillion. BNI’s transformation programs institutions, BNI restates implemented since 2008. its vision: “Becoming a Superior Financial Institution in Service and Performance”. 8 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk BNI obtains additional capital from the Government through the bank recapitalization program. BNI succeeds in obtaining ISO 9002 BNI launches its new logo “the BNI offers initial public certificate in recognition ark of sailing in the middle of shares and lists its of quality standards the ocean” as a reflection and shares on the Jakarta including the Joint expression of the Company’s and Surabaya Stock Processing Unit (UPB). expectations. Exchanges. This makes BNI the first government bank to become a public company. BNI conducts operational The monetary crisis hits Asia restructuring and corporate and Indonesia. Like other reforms, including banks, BNI is also affected developing its vision and The legal status of BNI is changed to PT by the crisis, as reflected mission and Performance (Persero) in line with the Banking Law in the decline in financial Improvement Program (PIP). provisions. performance indicators. Under a new Management team, BNI issued new shares BNI steps up in the midst of the listed on the Jakarta and global economic crisis, reinforcing Surabaya Stock Exchanges its financial foundation through at the same time as five key strategies: adequacy of the government share reserves, improving the quality of divestment program. BNI launches its new corporate logo assets, focusing on profitability, With the completion of and identity related to efforts to creating sustainable business both programs, public build a firm image of the Company models and maintaining efficient ownership increases to in the face of competition. cost structures. 23.64%. BNI Subordinate I Medium coverage ratio Term Notes (MTN) 146% For the second Sustainable Bond I BNI Issuance in 2018 with a Phase I Issuance In 2017 CAR 19.4%. time BNI achieves a value of Rp100 billion for double-digit profit of with a value of Rp3 Trillion a period of 5 years with for a period of 5 years with Rp11.4 trillion with a fixed interest rate of better fundamentals, a coupon of 8% per annum. indicated by a coverage BNI Bonds were published 8% per annum. The MTN ratio of 146% and CAR on July 11, 2017 and listed were registered at OJK, of 19.4%. on BEI. effective June 8, 2018. PT Bank Negara Indonesia (Persero) Tbk Adapting Quickly to Face Change 9 OUR ADVANTAGES CORPORATE SEGMENT GROWTH IS FASTER THAN THE COMPETITORS 12.7 15.3 7.7 11.8 2018 2018 2017 2017 Industri BBNI STRONG CREDIT CARD CREDIT CARD MARKET SHARE PENETRATION In 2018 BNI’s credit card market share in Indonesia BBNI 15.5% reached 15.5%, an increase of 14.60% compared Other to 2017. BNI’s average credit card growth over the 49.9% past 5 (five) years has been 18.7%, the highest compared to other banks. The growth in the number Bank Mega of cards, the increase in credit card sales volume 9.6% through e-commerce penetration programs, and the introduction of new products increased BNI Credit Card outstandings by the end of 2018.