Transformation Drives BNI’s Performance to Grow Positively in the First Quarter of 2023

Armfalcon.com, JAKARTA — PT Bank Negara Indonesia (Persero) Tbk. or BNI started 2023 with a positive and sustainable record. The ongoing transformation agenda has had a positive impact on the company as well as opening up a variety of new business potentials.

In the first quarter of 2023, BNI’s consolidated credit grew 7.2 percent on an annual basis (year-on-year/YoY) or reached IDR 634.3 trillion. The Company consistently continues our strategy to grow in priority segments, namely for top tier debtors starting from the corporate segment and its derivative businesses that are included in the prospective industrial sector, to the consumer segment, while still prioritizing prudential principles.

In terms of liquidity, the Company recorded growth in Third Party Funds (DPK) of 7.4% YoY or reaching IDR 743.7 trillion. The TPF growth strategy is focused on CASA, especially strong transactional CASA through the provision of comprehensive financial and transaction solutions and increased transactional capabilities, especially in mobile banking applications and BNI Direct.

The Company’s CASA, namely demand deposits and savings, grew 6.9% YoY with a CASA ratio of 69%. This growth in credit and CASA has enabled the Company to maintain its Net Interest Margin (NIM) at a level of 4.7 percent.

The company posted a first quarter net profit of IDR 5.2 trillion or grew 31.8% YoY. 15.5 percent in the first quarter of 2023, as well as the pre-tax Return on Assets (ROA) which also increased from 2.3 percent to 2.7 percent.

Deputy Main Director of BNI Adi Sulistyowati said that the achievements in the first quarter of 2023 were in line with the Company’s vision to grow healthily and sustainably in the long term. The Company continues to carry out a selective and measurable growth strategy so that it consistently produces quality performance growth.

“We are grateful that the performance of the first quarter of 2023 can start well, which will certainly make us even more optimistic to record even better performance than the previous year,” he said, in a written statement, Tuesday (18/4/2023).

Adi Sulistyowati (Susi) explained, to achieve the 2023 business target, the Company has established seven strategic policies. First, BNI develops transaction & ecosystem solutions to meet customer needs. Second, developing technology infrastructure and digital innovation through data driven based on analytics, customer experience, and expanding partnerships.

Third, BNI focuses on increasing sustainable CASA and Fee Based Income (FBI). Fourth, BNI is increasing business expansion in the corporate top tier as well as priority sectors, value chains and cross selling by prioritizing a risk culture.

Fifth, the Company continues the Human Capital, Culture and Operations Transformation so that it is more agile and lean in supporting the business. Sixth, the company strengthens its international business network to support global market penetration. Seventh, BNI also optimizes BNI Group synergies in strengthening the position of Subsidiaries.

“Based on these seven strategic policies, we are of course optimistic that we will be able to achieve our business targets in 2023,” he said.

Quality Oriented Credit Growth

BNI Finance Director Novita Widya Anggraini explained, “The dynamics of business and the economy and the recent recovery of the national economy after the pandemic has forced BNI to be careful in identifying and encouraging business growth engines that are ready to expand. This aims to ensure that asset quality is maintained and BNI is able to optimize revenue from the customer’s business ecosystem so that profit achievement can be sustainable in the future.

Credit growth performance in the first quarter of 2023 was driven by the private corporate segment which grew 21.2% YoY to IDR 234.0 trillion, followed by the enterprise or Large Commercial segment which increased 13.2% YoY to IDR 52.2 trillion, and People’s Business Credit ( KUR) which grew 7.8% YoY to IDR 50.1 trillion.

Meanwhile, the consumer segment as a whole grew 11.9% YoY to IDR 113.4 trillion, with personal loans and Home Ownership Loans (KPR) being the engines of growth, each increasing 19.2% YoY to IDR 44.5 trillion and growing eight percent. YoY to IDR 54.5 trillion.

BNI also sees debtors affected by the pandemic continuing to experience recovery. This had a positive impact on the composition of the credit restructuring portfolio due to Covid-19, which until the end of the first quarter of 2023 remained Rp. 45.8 trillion, or only 7.3 percent of total loans, far down from the first quarter of last year which still reached 12 percent of total credit. This decline mainly came from sectors that were most affected by the pandemic such as restaurants, hotels, textiles and construction, indicating that the debtor’s business is recovering.

“We are of course very grateful that the restructuring loan portfolio affected by the pandemic continues to decline. The decline came from the sectors most affected by the pandemic and indicated that the debtor’s business was recovering,” he said.

In addition to selective and quality business growth, Novita added that it is important for the Company at this time to maintain liquidity and capital levels. The healthy growth in DPK, especially from CASA, was able to bring BNI to maintain a stable Loan to Deposit Ratio (LDR) position at the level of 85.4 percent. Other liquidity adequacy indicators such as Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) also continued to be in a very strong position, far above regulatory requirements.

“Meanwhile, the level of capital adequacy continues to increase with the Capital Adequacy Ratio (CAR) reaching 21.6%, up 230 bps on an annual basis. The company’s sufficient liquidity and capital are important provisions to continue to grow while still having strong resilience in anticipating future risks and maintaining the trust of customers and all stakeholders,” said Novita.

Positive Digital Transaction Performance

Director of Digital & Integrated Transaction Banking BNI Corina Leyla Karnalies said that the Company consistently optimizes the potential of digital banking in every aspect by developing various financial solutions that suit customer needs.

In the first quarter of 2023, good progress was seen in the growth in the number of BNI Mobile Banking users which reached 14.26 million or grew by 24.3 percent YoY. This was followed by the number of transactions reaching 193 million, growing by 52% YoY, and the transaction value growing by 52.7% YoY to IDR 252 trillion.

“Through BNI Mobile Banking, BNI continues to expand services by utilizing the BNI group ecosystem, retailers and global partners to answer each customer’s demands in this modern digital banking era. The company hopes to continue to help partners progress, especially with the convenience of digital solutions that BNI has,” he said.

From the Wholesale Banking segment, the Company has BNIDirect to support business transactions for customers and non-individual debtors digitally and is able to fulfill all client needs in one integrated portal. In the first quarter of 2023, it was recorded that the number of BNIDirect users grew 32.9% YoY to 102 thousand users, followed by a transaction volume growth of 27.3% YoY or the equivalent of IDR 1,583 trillion, with the number of transactions also increasing 25.3% YoY or reached 203 million transactions.

Increasing the volume of digital transactions and increasing customer preferences in making transactions so as to increase the Company’s Fee Based Income.

“Going forward, the Company has prepared various plans to strengthen and develop other digital capabilities that aim to improve customer experience at a time generate transaction-based CASA and fee-based income,” he said.

BNI’s Commitment to Sustainable Finance

As a pioneer bank for Green Banking and the main driving force for implementing Sustainable Finance in Indonesia, the Company is committed to internalizing the principles of sustainable finance in the company’s values, work culture, corporate strategy, operational policies, and operational systems and procedures.

BNI Risk Management Director David Pirzada explained, this commitment is realized through increasing the Sustainable Portfolio by providing financing to business sectors that are included in the Sustainable Business Activity Category (KKUB). In the first quarter of 2023, the Company has provided financing of IDR 179.4 trillion or 28.5 percent of BNI’s total loan portfolio.

The Company is also committed to developing sustainable business practices that are in line with the global agenda. One of the Company’s initiatives is introducing a Sustainability Linked Loan (SLL), in which BNI provides incentives for customers to improve environmental, social and governance (ESG) aspects of their business.

Apart from being committed to developing sustainable business practices, the Company has also managed to improve credit quality on a consistent basis. This is proven by the improvement in the Loan at Risk (LAR) ratio from 22.1 percent in the first quarter of 2022 to 16.3 percent in the first quarter of 2023, as well as the Non-Performing Loan (NPL) ratio which improved from 3.5 percent to 2. 8 percent.

“Asset quality which continues to improve has also affected a sharp reduction in credit costs or the ratio of formation of Allowance for Impairment Losses (CKPN) to credit, from 2.5 percent in the first quarter of 2022 to only 1.4 percent in the first quarter of 2023,” he concluded.