IslamicMarkets uses cookies.
About our cookie policy.
  of  

or
Sign in to continue reading...

PT Bank BNI: Annual Report 2018

IM Insights
By IM Insights
3 months ago
PT Bank BNI: Annual Report 2018

Halal, Hawalah, Hibah, Islam, Islamic banking, Murabahah, Rahn, Salah, Shariah, Sukuk, Wakalah, Credit Risk, Daya, Masih, Murabahah Receivables, Net Assets, Participation, Provision, Receivables, Reserves, Sales

Capital Investment

KPMG

PT Bank CIMB Niaga Tbk

Bank Syariah Mandiri

PT BNI Syariah

Bank BTPN Syariah

EXIM Bank

Bank Maybank Indonesia

PT Bank Pembangunan Daerah Jawa Timur

Permata Bank

Bank Syariah Mandiri Sukuk RP375 Billion 22-Dec-2023

Bank Maybank Indonesia Sukuk Phase II RP700 Billion 10-June-2019

Bank Maybank Indonesia Sukuk Phase I RP266 Billion 11-Jul-2020

Angkasa Pura Sukuk RP268 Billion 8.10% 22-Nov-2021 - Series A

Angkasa Pura Sukuk RP55 Billion 8.40% 22-Nov-2023 - Series B

Angkasa Pura Sukuk RP177 Billion 8.55% 22-Nov-2026 - Series C

Indonesia Eximbank Sukuk Phase I RP135 Billion 6.15% 16-Jun-2019 - Series A

Indonesia Eximbank Sukuk Phase I RP365 Billion 7.50% 06-Jun-2021- Series B

Indonesia Eximbank Sukuk Phase II RP211.5 Billion 18-Nov-2019 - Series A

Indonesia Eximbank Sukuk Phase II RP250 Billion 8-Nov-2021 - Series B

Indonesia Eximbank Sukuk Phase II RP14 Billion 8-Nov-2023 - Series C

Indonesia Eximbank Sukuk Phase II RP155 Billion 8-Nov-2025 - Series D

Axiata SPV2 Berhad Sukuk 3.466% 19-Nov-2020

XL Axiata Sukuk 8.75% 12-Dec-2016 - Series A

XL Axiata Sukuk 10.25% 2-Dec-2018 - Series B

XL Axiata Sukuk 10.50% 2-Dec-2020 - Series C

XL Axiata Sukuk 2-Dec-2022 - Series D

XL Axiata Sukuk Phase I RP358 Billion 8.25% 26-Oct-2019 - Series A

XL Axiata Sukuk Phase I RP399 Billion 9.10% 16-Oct-2021 - Series B

XL Axiata Sukuk Phase I RP149 Billion 9.60% 16-Oct-2023 - Series C

XL Axiata Sukuk Phase I RP34 Billion 10.1% 16-Oct-2025 - Series D

XL Axiata Sukuk Phase I RP60 Billion 10.3% 16-Oct-2028 - Series E

XL Axiata Sukuk Phase II RP351 Billion 7.90% 18-Feb-2020 - Series A

XL Axiata Sukuk Phase II RP138 Billion 9.25% 8-Feb-2024 - Series C

XL Axiata Sukuk Phase II RP110 Billion 8-Feb-2022 - Series B

XL Axiata Sukuk Phase II RP15 Billion 9.70% 8-Feb-2026 - Series D

XL Axiata Sukuk Phase II RP26 Billion 10.00% 8-Feb-2029 - Series E

Imtiaz Sukuk II Berhad (Bank Rakyat) 4.650% 24-Nov-2021

Imtiaz Sukuk II Berhad (Bank Rakyat) 4.300% 24-Mar-2017

Imtiaz Sukuk II Berhad (Bank Rakyat) 4.600% 22-Mar-2019

Imtiaz Sukuk II Berhad (Bank Rakyat) 4.450% 20-Dec-2018

Imtiaz Sukuk II Berhad (Bank Rakyat) 4.500% 22-Nov-2019

Imtiaz Sukuk II Berhad (Bank Rakyat) 3.88% 23-Nov-2015

Imtiaz Sukuk II Berhad (Bank Rakyat) 4.808% 23-Nov-2017

EQUATE Sukuk SPC Limited 3.944% 21-Feb-2024


Create FREE account or Login to add your comment
0 Comments


Transcription

  1. Serving the Country , the Pride of the Nation Adapting Quickly to Face Change ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 1
  2. 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, Bank BNI has become a pioneer bank for digital banking services. 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
  3. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 3
  4. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk THEME CONTINUITY Rising to The Challenge BNI juga telah tumbuh dan berkembang menjadi bank nasional yang solid dengan pertumbuhan keuangan berkelanjutan. Sebagai bank yang Melayani Negeri, Kebanggaan Bangsa, tantangan kami adalah untuk terus melanjutkan dan meningkatkan kontribusi nyata BNI terhadap kemajuan bangsa dan negara, saat ini dan di masa mendatang. 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
  5. 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
  6. ANNUAL REPORT 2018 PERFORMANCE HIGHLIGHT PT Bank Negara Indonesia (Persero) Tbk Loans disbursed increased by Net Interest and Sharia income increased by 11.0% 16.2% to Rp to Rp billion Customer deposits increased by 12.1% billion Total assets increased by 14.0% to Rp billion to Rp Equity increased by 9.4% to Rp 6 billion Profits increased by 10.3% to Rp billion billion Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  7. Gross NPL decreased from 1 .9% in 2018 Coverage Ratio increased by 152,9% In 2018 The ACGS score in 2018 was 91.58 (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
  8. MILESTONES BNI converts to a commercial bank and BNI opens its first overseas branch in Singapore . The establishment of PT Bank Negara Indonesia (Persero) Tbk as the first state-owned bank, functioning as a central bank and a commercial bank. BNI as a development bank given the right to act as a foreign exchange bank. BNI issues Global Bonds through its London branch office worth USD500 million. BNI’s Global Bonds are registered at the Singapore Stock Exchange. BNI joins a strategic partnership with Sumitomo Life Insurance Company who purchases new shares issued by PT BNI Life Insurance worth Rp4.2 trillion. 8 Adapting Quickly to Face Change BNI issues new shares through a Rights Issue so that public ownership increases to 40%. BNI’s Net Income for the first time breaks the double-digit figure (Rp10,8 trillion), as one result of BNI’s transformation programs implemented since 2008. As a commercial bank with the name “Bank Negara Indonesia 1946”, BNI is given the task of improving the economy of the people of Indonesia and participates in the national economic development by empowering various industrial sectors in Indonesia. BNI supports the Indonesian economy and introduces various banking services such as Floating Banks and Mobile Banks. BNI shareholders agreed to separate business units syariah bank independent business entity . In order to adapt to the changing dynamic business environment, to meet the needs of all stakeholders interests, and to align with regulations related to management for financial conglomerate institutions, BNI restates its vision: “Becoming a Superior Financial Institution in Service and Performance”. PT Bank Negara Indonesia (Persero) Tbk
  9. BNI launches its new logo “the ark of sailing in the middle of the ocean” as a reflection and expression of the Company’s expectations. BNI conducts operational restructuring and corporate reforms, including developing its vision and mission and Performance Improvement Program (PIP). BNI obtains additional capital from the Government through the bank recapitalization program. BNI succeeds in obtaining ISO 9002 certificate in recognition of quality standards including the Joint Processing Unit (UPB). BNI offers initial public shares and lists its shares on the Jakarta and Surabaya Stock Exchanges. This makes BNI the first government bank to become a public company. The legal status of BNI is changed to PT (Persero) in line with the Banking Law provisions. Under a new Management team, BNI steps up in the midst of the global economic crisis, reinforcing its financial foundation through five key strategies: adequacy of reserves, improving the quality of assets, focusing on profitability, creating sustainable business models and maintaining efficient cost structures. BNI issued new shares listed on the Jakarta and Surabaya Stock Exchanges at the same time as the government share divestment program. With the completion of both programs, public ownership increases to 23.64%. The monetary crisis hits Asia and Indonesia. Like other banks, BNI is also affected by the crisis, as reflected in the decline in financial performance indicators. BNI launches its new corporate logo and identity related to efforts to build a firm image of the Company in the face of competition. coverage ratio 146% CAR 19.4%. For the second time BNI achieves a double-digit profit of Rp11.4 trillion with better fundamentals, indicated by a coverage ratio of 146% and CAR of 19.4%. PT Bank Negara Indonesia (Persero) Tbk  Sustainable Bond I BNI Phase I Issuance In 2017 with a value of Rp3 Trillion for a period of 5 years with a coupon of 8% per annum. BNI Bonds were published on July 11, 2017 and listed on BEI. BNI Subordinate I Medium Term Notes (MTN) Issuance in 2018 with a value of Rp100 billion for a period of 5 years with a fixed interest rate of 8% per annum. The MTN were registered at OJK, effective June 8, 2018. Adapting Quickly to Face Change 9
  10. OUR ADVANTAGES CORPORATE SEGMENT GROWTH IS FASTER THAN THE COMPETITORS 12 .7 15.3 11.8 7.7 2018 2018 2017 Industri 2017 BBNI STRONG CREDIT CARD PENETRATION In 2018 BNI’s credit card market share in Indonesia reached 15.5%, an increase of 14.60% compared to 2017. BNI’s average credit card growth over the past 5 (five) years has been 18.7%, the highest compared to other banks. The growth in the number of cards, the increase in credit card sales volume through e-commerce penetration programs, and the introduction of new products increased BNI Credit Card outstandings by the end of 2018. The credit card sales volume in 2018 amounted to Rp38,924 billion, or an increase of 11.3% compared to 2017, while credit card outstandings in 2018 amounted to Rp12,558 billion, an increase of 7.9% compared to 2017. 10 Adapting Quickly to Face Change CREDIT CARD MARKET SHARE BBNI Other 49.9% 15.5% Bank Mega 9.6% Mandiri 14.3% CIMB Niaga 10.7% PT Bank Negara Indonesia (Persero) Tbk
  11. HIGHER GROWTH OF BUSINESS LOANS (KUR) As of December 31, 2018, BNI had disbursed KUR amounting to Rp66.1 trillion, an increase of 16.9% from Rp61.3 trillion in 2017. The disbursed KUR continues to increase and was above the expected proportional target to assist MSMEs in developing their businesses, which in turn will increase the Indonesian economy. Through good economic growth, BNI is expected to improve its business. GOOD CASH MANAGEMENT SKILLS Based on AsiaMoney Magazine, BNI ranked first in the corporate and middle segment cash management. BNI was also ranked second in the small segment. The following shows the AsiaMoney’s assessment results for BNI, and other banks, cash management: CORPORATE MIDDLE SMALL 6.4 6.2 5.9 5.7 5.5 5.5 5.4 5.5 5.4 5.1 5.9 5.3 5.4 5.5 4.4 BNI Danamon Permata Mandiri BCA PT Bank Negara Indonesia (Persero) Tbk  BNI Mandiri BCA Permata Danamon Danamon BNI Mandiri BCA Permata Adapting Quickly to Face Change 11
  12. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk TABLE OF CONTENTS 2 THEMES AND THEIR MEANING 4THEMECONTINUITY 6 PERFORMANCE HIGHLIGHT 8MILESTONES 10 OUR ADVANTAGES 12 TABLE OF CONTENTS 25 TEMPORARY SUSPENSION AND / OR DELISTING OF SHARES 26 BONDS, SUKUK AND/OR CONVERTABLE BONDS INFORMATION 27 OTHER FUNDING SOURCES INFORMATION 28 IMPORTANT EVENTS IN 2018 PERFORMANCE HIGHLIGHTS 2018 16FINANCIAL OVERVIEW 20 OPERATIONAL OVERVIEW 22 SHARE PRICE INFORMATION 25 AKSI KORPORASI MANAGEMENT REPORT 35 BOARD OF COMMISSIONERS' REPORT 44 BOARD OF DIRECTORS’ REPORT 54 RESPONSIBILITY STATEMENT COMPANY PROFILE 58COMPANY IDENTITY 60 BRIEF HISTORY OF THE COMPANY 62BRAND PERUSAHAAN 63BUSINESS FIELDS 64PRODUCTS AND SERVICES 68 REGIONAL BUSINESS MAP 72ORGANIZATION STRUCTURE 74 VISION, MISSION AND CORPORATE CULTURE 76 VISION AND MISSION REVIEW BY THE BOARD OF COMMISSIONERS AND BOARD OF DIRECTORS 77COMPANY 77CULTURE 78 BOARD OF COMMISSIONERS PROFILES 12 Adapting Quickly to Face Change 87 BOARD OF DIRECTORS PROFILE 98 SENIOR EXECUTIVE VICE PRESIDENT PROFILE 99 EXECUTIVE OFFICERS PROFILE 115EMPLOYEE PROFILE AND EMPLOYEE COMPETENCY DEVELOPMENT KARYAWAN 126SHAREHOLDER COMPOSITION 129LIST OF SUBSIDIARIES AND/OR ASSOCIATED ENTITIES 134BNI GROUP STRUCTURE 135SHARE ISSUANCE CHRONOLOGY 137BOND ISSUANCE CHRONOLOGY 140OTHER SECURITIES ISSUANCE AND/OR LISTING CHRONOLOGY 141NAME AND ADDRESSES OF INSTITUTIONS AND/OR SUPPORTING PROFESSIONS 142PENGHARGAAN DAN SERTIFIKASI 149NAMES AND ADDRESSES OF SUBSIDIARIES, ASSOCIATED ENTITIES, BRANCH OFFICES AND OVERSEAS REPRESENTATIVES AND REGIONAL OFFICES 150OVERSEAS BRANCH OFFICES, SUB BRANCH OFFICES, REPRESENTATIVES OFFICES AND REGIONAL OFFICES 152INFORMATION AVAILABLE ON THE WEBSITE 154EDUCATION AND/OR TRAINING FOR THE BOARD OF COMMISSIONERS, BOARD OF DIRECTORS, COMMITTEES, CORPORATE SECRETARY, AND INTERNAL AUDIT UNIT PT Bank Negara Indonesia (Persero) Tbk
  13. MANAGEMENT DISCUSSION AND ANALYSIS 170ECONOMIC AND INDUSTRY REVIEW 174OPERATIONAL REVIEW 232FINANCIAL REVIEW 293TAX 296TRANSFER PRICING DOCUMENT 299FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA) 301OTHER MATERIAL INFORMATION 331INFORMATION TECHNOLOGY UTILIZATION 335INFORMATION TECHNOLOGY GOVERNANCE 336INFORMATION TECHNOLOGY FUTURE DEVELOPMENT PLAN 339DIGITAL BANKING 340ELECTRONIC BANKING 347HUMAN CAPITAL 363IMPLEMENTATION OF GOOD CORPORATE GOVERNANCE 367EFFORTS TO IMPROVE THE QUALITY OF GOOD CORPORATE GOVERNANCE IMPLEMENTATION 370MONITORING OF IMPLEMENTASI GCG 371GOOD CORPORATE GOVERNANCE ASSESSMENT 379COMPANY ORGANS AND IMPLEMENTATION PROCESS OF GOOD CORPORATE GOVERNANCE 659INFORMATION ON MAIN AND CONTROLLING SHAREHOLDER 671INFORMATION ON MAIN AND CONTROLLING SHAREHOLDER 694BASED ON SUSTAINABLE FINANCE CONCEPT 696CORPORATE SOCIAL RESPONSIBILITY APPLICATION BASIC 697CORPORATE SOCIAL RESPONSIBILITY MANAGEMENT STRUCTURE 698CORPORATE SOCIAL RESPONSIBILITY RELATED TO THE ENVIRONMENT 703CORPORATE SOCIAL RESPONSIBILITY RELATED TO EMPLOYMENT, OCCUPATIONAL HEALTH AND SAFETY 706CORPORATE SOCIAL RESPONSIBILITY RELATED TO SOCIAL COMMUNITY DEVELOPMENT 713CORPORATE SOCIAL RESPONSIBILITY RELATED TO CONSUMERS BUSINESS SUPPORT UNIT 316CREDIT RISK MANAGEMENT 321NETWORK AND SERVICES 324BNI CONTACT CENTER 327UNIT SERVICES UNIT 328INFORMATION TECHNOLOGY GOOD CORPORATE GOVERNANCE 358GOOD CORPORATE GOVERNANCE 361RELATIONSHIP BETWEEN GOOD CORPORATE GOVERNANCE AND COMPANY PERFORMANCE 362LEGAL FOUNDATION OF THE IMPLEMENTATION OF GOOD CORPORATE GOVERNANCE CORPORATE SOCIAL RESPONSIBILITY 686SOCIAL RESPONSIBILITY GOVERNANCE 691CORPORATE SOCIAL RESPONSIBILITY RELATED TO HUMAN RIGHTS 693CORPORATE SOCIAL RESPONSIBILITY RELATED TO FAIR OPERATIONS 694SOCIAL RESPONSIBILITY IMPLEMENTATION PERMODALAN & PRAKTIK MANAJEMEN RISIKO 721PERMODALAN 725PRAKTIK MANAJEMEN RISIKO FINANCIAL REPORT PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 13
  14. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Performance Highlights 2018 16 20 22 25 25 26 27 28 14 FINANCIAL OVERVIEW OPERATIONAL OVERVIEW SHARE PRICE INFORMATION AKSI KORPORASI TEMPORARY SUSPENSION AND / OR DELISTING OF SHARES BONDS, SUKUK AND/OR CONVERTABLE BONDS INFORMATION OTHER FUNDING SOURCES INFORMATION IMPORTANT EVENTS IN 2018 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  15. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 15
  16. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk FINANCIAL OVERVIEW (in million Rupiah) Description 2018 2017 2016 2015 2014 REPORT OF FINANCIAL POSITION ASSETS Cash 14,044 11,578 11,168 12,890 11,436 Current Accounts with Indonesia Bank 35,591 32,701 30,147 30,932 24,598 Current Accounts with Other Banks - Net 13,134 21,335 6,298 8,999 4,496 Placements with Other Banks – Net 39,325 28,593 33,662 33,417 14,527 Marketable securities – Net 32,044 36,050 23,765 9,927 12,738 - 679 1,665 376 6,237 Export bills and others receivables - Net Securities purchased under agreements to resell – Net 24,587 15,701 8,932 8,831 2,301 Acceptances receivables - Net 20,295 18,106 14,724 10,821 12,467 606 217 250 441 165 Loans Disbursed 512,779 441,314 393,275 326,105 277,622 Allowance for impairment losses on the Loans (14,892) (14,524) (16,681) (12,039) (6,970) Derivatives receivables - Net Government Bonds 86,791 79,849 63,006 47,222 43,830 Prepaid taxes 1,624 623 620 2,299 1,437 Prepaid expenses 2,337 2,318 2,411 1,633 1,392 604 713 57 36 37 Equity investments - net Other Assets 11,900 10,381 6,429 4,482 3,370 Fixed Assets – net 26,127 22,805 21,972 20,757 6,222 Deferred tax assets – net TOTAL ASSETS 1,676 891 1,332 1,465 668 808,572 709,330 603,032 508,595 416,574 4,160 4,868 3,276 1,805 1,813 578,775 516,098 435,545 370,420 313,893 14,233 12,228 10,801 4,698 3,177 LIABILITIES Obligations due immediately Deposits from customers * Deposits from other banks * Derivatives Payable Securities sold under agreements to repurchase Accaptances payable Accrued expenses Taxes payable Employee benefits Provisions Other liabilities Securities issued * Loans Received Subordinated Securities TOTAL LIABILITIES 16 Adapting Quickly to Face Change 322 114 411 1,162 662 21,524 2,390 3,765 3,163 2,492 4,417 4,507 4,359 6,188 6,469 876 972 1,047 917 660 481 80 151 749 318 3,512 4,094 3,503 3,481 3,393 178 192 156 99 87 14,608 14,731 11,149 7,584 5,219 2,987 3,482 7,227 7,367 6,158 52,025 44,671 32,389 22,524 11,212 100 - - - - 698,198 608,427 513,778 430,157 355,552 PT Bank Negara Indonesia (Persero) Tbk
  17. Performance Highlights 2018 Description 2018 2017 2016 2015 2014 TEMPORARY SYIRKAH FUNDS Deposits From Customers Deposits From Other Banks Mudharabah Sukuk Issued TOTAL TEMPORARY SYIRKAH FUNDS 26 ,603 23,350 20,092 16,484 13,629 358 494 489 449 775 26,961 496 24,340 496 21,077 496 17,429 14,404 EQUITY Share Capital Additional Paid-in Capital/Agio Shares Exchange Difference on Translation of Foreign Currency Financial Statements Transactions Difference With Non-Controlling Interest 9,055 9,055 9,055 9,055 9,055 14,568 14,568 14,568 14,568 14,568 85 93 82 76 58 2,257 2,257 2,257 2,257 2,257 Unrealized Gains (Losses) on Available-For-Sale Marketable Securities And Government Bonds, Net of Tax (3,914) 22 (1,888) (2,519) (1,945) Net Difference in Revaluation of Fixed Assets after Deductible Taxes 14,979 12,283 12,285 12,190 - Retained Earnings 71,047 60,314 50,798 41,538 35,078 2,297 2,311 2,097 2,023 1,950 TOTAL EQUITY 110,374 100,903 89,254 78,438 61,021 TOTAL LIABILITIES, TEMPORARY SYIRKAH FUNDS AND EQUITY 808,572 709,330 603,032 508,595 416,574 54,138 48,177 43,768 36,895 33,750 (18,692) (16,240) (13,773) (11,335) (10,989) 35,446 31,937 29,995 25,560 22,761 5,997 6,871 5,597 3,618 1,476 (4,285) (5,104) (4,255) (2,485) (1,343) 1,712 1,767 1,342 1,133 607 11,613 11,040 9,552 8,274 8,145 - Other Operating Income 9,616 9,308 8,174 6,684 6,559 - Recovery 1,997 1,732 1,378 1,590 1,856 Total Operational Income 48,771 44,744 40,888 34,967 31,783 Other Operating Expenses (21,783) (20,396) (18,806) (16,218) (14,576) Allowance For Impairment Losses (7,388) (7,126) (7,853) (7,336) (3,642) Operating Income 19,599 17,222 14,229 11,412 13,566 221 (57) 74 54 178 Income Before Tax Expenses 19,821 17,165 14,303 11,466 13,744 Tax Expense (4,729) (3,394) (2,893) (2,326) (2,695) Income For The Year 15,092 13,771 11,410 9,141 11,049 Non-Controlling Interest in Net Assets of Consolidated Subsidiaries * includes temporary Syirkah funds STATEMENT OF PROFIT OR LOSS AND OTHER COMPRHENSIVE INCOME INCOME AND OPERATING EXPENSES Interest Income and Sharia Income Interest Expense and Sharia Expense Interest Income and Sharia Income - Net Premium Income Claims Expense Premium Income - Net Other Operating Income (Incl Recovery) Non-Operating (Expense)/Income-Net – Net PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 17
  18. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Description 2018 2017 2016 2015 2014 Income For The Year Attributable To: - Non-controlling interests - Owner of the Parent Entity 77 154 71 74 47 15,015 13,617 11,339 9,067 10,783 Profit and Loss - Comprehensive Other Comprehensive Income / Loss For The Year After Taxes         (856) 1,847 922 11,722 1,085 14,236 15,617 12,333 20,863 11,915 (14) 215 73 74 47 14,250 15,403 12,260 20,789 11,868 805 730 610 487 578 Cash Flows from Operating Activities (4,274) 33,677 15,999 24,357 (610) Arus Kas bersih dari Dana Syirkah Temporer (9,612) (23,274) (29,400) (3,516) (2,406) Net Cash Flows from Temporary Syirkah Funds 20,609 3,194 8,060 9,250 (4,454) 222 96 17 5 (78) 91,977 78,284 83,606 53,512 61,061 6,723 13,597 (5,341) 30,090 (7,471) 98,922 91,977 78,284 83,606 53,512 18.5 18.5 19.4 19.5 16.2 Total Comprehensive Income For The Year Comprehensive Income for the Year Attributable To: - Non-controlling interests - Owner of the Parent Entity EARNINGS PER SHARE (in full Rupiah amount) CASH FLOW STATEMENT Cash Flows from Financing Activities Effect of Foreign Currency Exchange Rate Changes Cash and cash equivalents at beginning of year Cash and cash equivalents at the end of year FINANCIAL RATIOS CAPITAL (%) Minimum Capital Adequacy Ratio (KPMM) KPMM Taking into account Credit Risk, Operational Risk 18.6 18.6 19.5 19.6 16.3 KPMM Taking into account Credit Risk, Operational Risk and Market Risk 18.5 18.5 19.4 19.5 16.2 Fixed Assets Against Capital 24.6 23.7 25.7 27.7 10.4 Troubled Productive Assets and Troubled Non-Productive Assets to Total Productive Assets and Non-Productive Assets 1.3 1.5 2.1 1.9 1.5 Troubled Productive Assets to Total Productive Assets 1.3 1.5 2.0 1.9 1.4 Allowance for Impairment Losses (CKPN) for Financial Assets Against Productive Assets 1.9 2.1 2.7 2.5 1.7 CKPN Fulfillment for Productive Assets 1.9 2.1 2.7 2.4 1.7 CKPN Fulfillment for Non-Productive Assets 4.1 19.9 42.3 33.5 98.3 Gross NPL 1.9 2.3 3.0 2.7 2.0 Net NPL 0.8 0.7 0.4 0.9 0.4 Loan Ratio to Total Productive Assets 62.1 59.2 61.7 63.2 67.0 Ratio of core debtors to total loans 20.2 26.6 29.6 26.2 23.4 0.2 0.1 0.1 0.2 0.1 ASSET QUALITY (%) Ratio of foreclosed collateral to total loans 18 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  19. Performance Highlights 2018 Description 2018 2017 2016 2015 2014 PROFITABILITY (%) Return on Assets (ROA) 2.8 2.7 2.7 2.6 3.5 Return on Equity (ROE) 16.1 15.6 15.5 17.2 23.6 5.3 5.5 6.2 6.4 6.2 Other Operating Income to Operating Income 26.5 27.3 25.7 26.0 27.7 BOPO (Operating Cost/Operating Income) 70.1 71.0 73.6 75.5 69.8 Ratio of Profit (Loss) to Total Assets 2.0 2.1 1.9 1.8 2.7 Ratio of Profit (Loss) to Total Equity 14.5 14.5 12.9 11.7 18.7 Ratio of Liabilities to Total Assets 86.3 85.8 85.2 84.7 85.7 Ratio of Liabilities to Total Equity 628.4 603.8 576.1 551.8 598.7 Fee Based Income Ratio to Other Operating Incomes 82.8 84.9 85.7 81.0 77.4 Profit per Share (EPS) (In full amount) 805 730 610 487 578 Loan to Deposit Ratio 88.8 85.6 90.4 87.8 87.8 Loan to Funding Ratio 85.6 85.3 90.4 87.8 87.8 Ratio of Liquid Asset to total assets 19.7 20.2 19.0 21.0 18.6 - - - - - 17.6 18.3 17.7 16.0 16.2 - Related parties Nihil Nihil Nihil Nihil Nihil - Unrelated Parties Nihil Nihil Nihil Nihil Nihil - Related parties Nihil Nihil Nihil Nihil Nihil - Unrelated Parties Nihil Nihil Nihil Nihil Nihil - GWM Primary Rupiah reserve 6.5 6.6 6.8 9.2 8.1 - GWM Foreign Currency 8.0 8.0 8.0 8.0 8.3 Net Open Position (NOP) 2.0 2.5 3.4 1.7 1.6 152.9 148.0 146.0 140.4 130.1 42.5 43.9 44.0 44.2 43.8 Operating Income/Employee (in Million Rp) 1,657 1,496 1,330 1,196 1,115 Total Outlets (full, unaudited, in-unit) 2,262 2,150 1,990 1,826 1,766 Total ATM (full, unaudited, in unit) 18,311 17,966 17,056 16,071 14,071 Number of Employees (full, unaudited, in person) 27,224 27,209 28,184 26,875 26,536 Net Interest Margin (NIM) LIQUIDITY (%) Ratio of total liquid assets to short-term funding The ratio of total loans to MSMEs to total loans COMPLIANCE LLL Percentage LLL Excess Percentage Minimum mandatory reserve (GWM) OTHER RATIOS LLR/NPL Gross (Coverage Ratio) - (%) CIR (Ratio of Cost to Income) - (%) PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 19
  20. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk OPERATIONAL OVERVIEW Business Banking Loan Product Performance Segment Corporate (in billion Rupiah) 2018 2017 2016 2015 2014 222,910 188,026 174,073 137,909 119,715 Medium Commercial 74,731 70,261 61,330 51,147 40,324 Small 66,063 56,479 50,684 42,076 40,374 Overseas TOTAL 39,789 30,734 21,237 19,538 10,082 403,493 345,499 307,323 250,670 277,622 Consumer Loan Product Performance Product Mortgage (in billion Rupiah) 2018 2017 40,753 2016 37,066 2015 36,396 2014 34,664 Credit Card 12,558 11,635 10,549 9,795 7,777 Payroll 23,744 17,687 12,026 7,048 4,290 Others 2,680 5,057 6,097 6,032 6,617 TOTAL 79,735 71,445 65,069 57,540 52,024 Corporate Segment Loan Product Performance Including Overseas Based on Sector Sector Industry 2018 2017 69,350 (in billion Rupiah) 2016 55,941 2015 54,034 2014 50,703 36,625 Agriculture 38,189 38,840 35,706 23,307 19,779 Business Services 35,235 27,842 18,222 13,868 13,283 Electricity, Gas and Water 22,328 25,232 27,387 17,605 13,682 Transportation, Warehousing and Communication 20,479 17,439 17,648 17,694 14,921 Construction 22,200 16,869 8,907 6,643 2,477 Trade, Restaurant and Hotel 26,591 16,490 9,207 7,838 7,462 Mining 15,704 9,496 12,472 13,064 16,435 7,623 5,496 7,292 1,801 1,392 Social Services 20 33,341 Others 4,999 5,115 4,435 4,924 3,741 TOTAL 262,699 218,760 195,310 157,447 129,797 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  21. Performance Highlights 2018 Small Loan Product Performance (in billion rupiah) Product 2018 2017 2016 2015 2014 BCM 39,521 36,095 34,405 KUR 20,289 14,194 10,964 4,326 3,186 KKLK 1,459 2,019 2,457 3,164 3,807 BWU TOTAL 31,958 30,084 4,794 4,171 2,859 2,628 3,297 66,063 56,479 50,684 42,076 40,374 Third Party Funds Performance (in billion rupiah) Product Current Accounts* 2018 169,274 2017 143,162 2016 2015 2014 122,652 91,194 82,743 Saving* 206,056 182,295 158,662 135,065 119,779 Deposit* 203,445 190,641 154,230 144,161 111,371 578,775 516,098 435,545 370,421 313,893 TOTAL * includes temporary Syirkah funds PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 21
  22. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk SHARE PRICE INFORMATION BNI Share Price, Volume and Capitalization in 2015-2018 Year Price per share (Rp) Opening Highest Lowest Number of Shares (shares) Transaction Volume (shares) Closing Market Capitalization (Rp Million) 2018 Quarter I 9,775 10,175 8,650 8,675 19,135,000 161,777,095 Quarter II 8,725 9,000 6,800 7,050 31,968,800 131,473,028 Quarter III 7,125 8,300 6,750 7,400 13,735,400 138,000,058 Quarter IV 7,425 9,050 6,675 8,800 16,215,800 184,621,699 Quarter I 5,525 6,900 5,450 6,475 49,095,300 120,750,049 Quarter II 6,400 6,825 6,150 6,600 33,985,100 123,081,131 Quarter III 6,600 7,500 6,575 7,400 18,413,500 138,000,057 Quarter IV 7,500 9,925 7,300 9,900 44,149,300 184,621,698 Quarter I 4,990 4,835 4,675 5,200 27,788,000 96,192,494 Quarter II 5,100 4,270 5,300 5,200 44,907,800 96,192,494 Quarter III 5,225 5,100 5,975 5,200 23,008,500 103,500,043 Quarter IV 5,625 5,450 5,650 5,525 28,428,000 103,033,826 18,648,656,458 2017 18,648,656,458 2016 22 Adapting Quickly to Face Change 18,648,656,458 PT Bank Negara Indonesia (Persero) Tbk
  23. Performance Highlights 2018 Transaction Volume Shares 50 ,000,000 40,000,000 30,000,000 20,000,000 10,000,000 Quarter II Quarter I 2018 Quarter III 2017 Quarter IV 2016 Market Capitalization 200,000,000 150,000,000 100,000,000 50,000,000 Quarter II Quarter I 2018 PT Bank Negara Indonesia (Persero) Tbk  Quarter III 2017 Quarter IV 2016 Adapting Quickly to Face Change 23
  24. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk BBNI Stock Prices in 2017 (Rp/IHSG) BBNI 7,000 IHSG Volume (000) unit VOLUME 140,000,000 1,000 40,000,000 - 20,000,000 N ec O D p17 Se A ug -1 7 A Fe -1 6 ec D -1 7 40,000,000 ov -1 7 2,000 ct -1 7 60,000,000 Ju l-1 7 3,000 Ju n17 80,000,000 M ay -1 7 4,000 pr -1 7 100,000,000 M ar -1 7 5,000 b17 120,000,000 Ja n17 6,000 BBNI Stock Prices in 2018 (Rp/IHSG) Volume (000) unit BBNI 11,000 VOLUME 80,000,000 10,000,000 ec D N O Se A Fe ec Adapting Quickly to Face Change -1 8 - ov -1 8 20,000,000 ct -1 8 5,000 p18 30,000,000 A ug -1 8 6,000 Ju l-1 8 40,000,000 Ju n18 7,000 M ay -1 8 50,000,000 pr -1 8 8,000 M ar -1 8 60,000,000 b18 9,000 Ja n18 70,000,000 -1 7 10,000 D 24 IHSG PT Bank Negara Indonesia (Persero) Tbk
  25. Performance Highlights 2018 AKSI KORPORASI During 2018 , the Company did not carry out any corporate actions. TEMPORARY SUSPENSION AND / OR DELISTING OF SHARES Up to December 2018, BNI was not subject to any suspension and / or delisting of shares. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 25
  26. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk BONDS, SUKUK AND/OR CONVERTABLE BONDS INFORMATION BOND INFORMATION BNI Bonds Issuance Chronology Description Obligasi Berkelanjutan I BNI Tahap I Tahun 2017 Issued Date Effective Date Tenor July 11, 2017 June 22, 2017 5 years Currency IDR Total Bonds 3,000,000,000,000 Offering Price Maturity date Interest Rate Payment Status 100.00 July 11, 2022 8.00% p.a Not Yet Paid Ranking Trustees 2018 2017 idAAA (Pefindo) idAAA (Pefindo) BRI Tabel Medium Term Notes (MTN) BNI Description Issued Date Effective Date Tenor Currency Value (million) Maturity date Ranking Payment Status Discount Rate Trustees 2018 2017 Medium Term Notes (MTN) MTN Subordinated I BNI Year 2018 - 60 August 10, 2018 months Rp 100,000,000 August 10, 2023 8.00% Not Yet Paid Tabel Realisasi Hasil Penggunaan Dana Hasil Obligasi BNI Sustainable Bond I BNI Phase I 2017 Effective Date Total Proceeds from Public Offering June 22, 2017 Cost of Public Offering Rp3 Rp0,0074 * PT Bank Rakyat Indonesia (Persero) (dalam triliun Rupiah) Public Offering Proceeds Realization Type of Public Offering idAAA Net Results Rp2,992 Fund Proceeds Realization Fund Proceeds Plan Credit Expansion Rp2,992 Total Credit Expansion Rp2,992 Rp2,992 Public Offering Proceeds Remaining Total Rp2,992 - SUKUK INFORMATION Until December 2018, BNI has never issued sukuk so there is no information regarding Sukuk. CONVERTIBLE BOND INFORMATION Until December 2018, BNI has never issued Convertible Bonds so there is no information regarding Convertible Bonds. 26 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  27. Performance Highlights 2018 OTHER FUNDING SOURCES INFORMATION Negotiable Certificates of Deposit (NCD) BNI Description Issued Date Effective Date Tenor Currency Value (million) Maturity Date Discount Rate Payment Status Ranking Trustees 2018 2017 NCD Phase I NCD Phase I Series F June 16, 2016 - 36 months Rp 925,000 June 14, 2019 8.40% Not Yet Paid - - - September 27, 2016 - 36 months Rp 815,000 26 September 2019 8.10% Not Yet Paid - - - March 10, 2017 - 24 months Rp 150,000 28 Februari 2019 8.05% Not Yet Paid - - - - 36 months Rp 5,000 24 Februari 2020 8.35% Not Yet Paid - - - NCD Phase II NCD Phase II Series D NCD Phase III NCD Phase III Series C NCD Phase III Series D PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 27
  28. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk IMPORTANT EVENTS IN 2018 January 26, 2018 46.000 likes February 28, 2018 46.000 likes BNI yap! Launched, Easy, Safe, and Recent Payment System January 12, 2018 Jakarta BNI Taplus Prepares the Best Team to Become a Champion January 21, 2018 Passport Payment Service, BNI Becomes the Bank with the Most PNBP Online Deposit Services January 31, 2018 Become a Partner, Pay PTKIN Entrance Exams easier with BNI February 08, 2018 Commemorating National Press Day, BNI Invites 100 Journalists to Learn About Entrepreneurship February 16, 2018 BNI Cooperates with 4 Airlines to Present Travel Experience 46.000 likes April 6, 2018 BNI Sergab46 reserves 700 Tons for East Java Grain Farmers in Banyuwangi April 26, 2018 Garuda Indonesia and BNI Online Travel Fair (GOTF) in Cengkareng #bni46 #AnnualReport2018 Adapting Quickly to Face Change March 1, 2018 BNI Java Jazz Festival 2018 March 9, 2018 BNI KUR Reaches 1,700 Farmers in East Java March 11, 2018 BNI launches BNI MoRe in Singapore #bni46 #AnnualReport2018 #bni46 #AnnualReport2018 June 8, 2018 46.000 likes April 3, 2018 Ahead of the 2018 Asian Games, BNI Invited Reporters to Get to Know Indonesian Banking BNI and BNI Life (Subsidiary) Support Issuance of SOE Health Card March 29, 2018 BNI in collaboration with ITS, Delivers Loan Education at Surabaya May 9, 2018 #BNITuDigital Enlivens Inacraft 2018 and engages 35 Partners 28 46.000 likes BNI in collaboration with RI Ministry of Finance, BNICorporate Card Ready as a Government Payment Tool #bni46 #AnnualReport2018 April 25, 2018 March 22, 2018 46.000 likes Ahead of BNI’s 72nd Anniversary, BNI Emerald Customers Treated to BNI Helicity Service May 07 2018 BNI Supports Online Transactions, Ship Ticket Payments and PELNI Agent Top Up in Jakarta May 17, 2018 BNI Distributes 6,000 Cheap Food Packages for PMI Families in Pamekasan May 25, 2018 PMI family in Pamekasan - BNI & Angkasa Pura Kargo Expands Cooperation, Increased Variety of Cashless Transactions #bni46 #AnnualReport2018 BNI Mudik Bus Travelers at Taman Mini Indonesia Indah June 5, 2018 BNI Offers State Civil Housing Funding in Jakarta June 22, 2018 After Reducing Tariffs, BNI Is Ready to Accommodate Tax Payments for MSMEs in Surabaya June 29, 2018 BNI Mudik Travelers at Gambir Station, BNI in collaboration with the Indonesian Navy Distributes Soldier Salaries #bni46 #AnnualReport2018 PT Bank Negara Indonesia (Persero) Tbk
  29. Performance Highlights 2018 July 8 , 2018 August 12, 2018 46.000 likes 46.000 likes BNI Celebrates 72nd Anniversary July 17, 2018 BNI Funds First Toll Road in North Sulawesi July 18, 2018 Support for the 2018 Asian Games, BNI Launches Virtual Debit Combo Card Account in Yogyakarta July 20, 2018 To encourage Indonesian Exports, BNI Disburses Loans Dominated in Yen 46.000 likes BNI Distributes 2,000 Taplus Anak Accounts, to strengthen the Financial Literacy campaign at the 2018 Asian Games To Strengthen the Logistics Sector Services, BNI and Triplogic Develops a Digital Transaction System August 7, 2018 Supporting IPC, BNI Distributes Port Service Financing and IPC Smart Card in Jakarta September 4, 2018 BNI Millennial Children Treats Program, a manifestation of Financial Literacy strengthening for Millennialsl August 14, 2018 Starting in NTT, BNI Pioneers KUR Disbursements for Salt Farmers in Kupang August 15, 2018 Constructing Drinking Water Facilities in Lampung, BNI and IIF Disburse Rp550 billion in Jakarta August 19, 2018 Start of the 2018 Asian Games, BNI Participates by Maximizing Services #bni46 #AnnualReport2018 October 14, 2018 46.000 likes November 13, 2018 46.000 likes October 3, 2018 Enlivens IBDExpo 2018, BNI Digital Ecoservices November 7, 2018 BNI Supports the Cashless Program at Pertamina Gas Stations, Various Promos Ready to Pamper Customers in Jakarta #bni46 #AnnualReport2018 PT Bank Negara Indonesia (Persero) Tbk  September 24, 2018 BI, BNI, & BRI Cooperate with 50 Top Exporters for Hedging Program in Jakarta #bni46 #AnnualReport2018 December 13, 2018 46.000 likes BNI Pioneers “I am a Young Merchant” Creating Business minded School Students in Tegal October 25, 2018 Realizing Cashless and Cardless Shopping at Supermarkets, BNI Products Yap! Present at Ranch Market September 18, 2018 BNI Retains its Trade Finance Service Excellence, BNI Syariah Becomes the Best Sharia Bank #bni46 #AnnualReport2018 As part of its Role for a Better World Economy, BNI Launches GPN Card (National Payment Gateway) October 12, 2018 BNI ITB Ultra Marathon, Ministry of Youth and Sports Release Runners from BNI Office Lobby, Financial Literacy Campaign Through Sports September 10, 2018 November 7, 2018 Support for US Trade and Investment in Indonesia, BNI New York Branch Trade Finance Grows 25% #bni46 #AnnualReport2018 Saksansin Wins BNI Indonesian Masters in Jakarta December 03, 2018 Ministry of Social Affairs Recognizes Bank BNI as being Friendly to People with Disabilities December 21, 2018 Exceeding 2018 FLPP Target, BNI Disburses Subsidized Mortgages for 10 Thousand Houses in 2019 in Jakarta December 22, 2018 BUMDes Can Now Open SOE Shops, with Definite Prices & Guaranteed supply #bni46 #AnnualReport2018 Adapting Quickly to Face Change 29
  30. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Management Report 35 BOARD OF COMMISSIONERS’ REPORT 44 BOARD OF DIRECTORS’ REPORT 54 RESPONSIBILITY STATEMENT 30 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  31. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 31
  32. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Revrisond Baswir Pataniari Siahaan (Independent Commissioner) Joni Swastanto (Commissioner) 32 Adapting Quickly to Face Change Wahyu Kuncoro (Independent Commissioner) (Vice President Commissioner) Ari Kuncoro (President Commissioner/ Independent Commissioner) PT Bank Negara Indonesia (Persero) Tbk
  33. Bistok Simbolon Sigit Widyawan (Commissioner) (Independent Commissioner) Ahmad Fikri Assegaf (Independent Commissioner) PT Bank Negara Indonesia (Persero) Tbk  Marwanto Harjowiryono (Commissioner) Adapting Quickly to Face Change 33
  34. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk In the middle of this external pressure, Indonesia’s economic situation did not change significantly in 2018. The Board of Commissioners’ view is that the BNI Directors and staff’s spirit continued to grow amid the very high economic challenges, and they were able to continue competing in an increasingly competitive banking business.. Ari Kuncoro President Commissioner/Independent Commissioner 34 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  35. Management Report Board of Commissioners ' Report In 2018, BNI maintained its asset growth in their prospective sectors, which is reflected in total assets reaching Rp99.2 trillion. BNI’s loans grew by 16.2%, higher than last year’s 12.2%. During 2018, customer deposits stood at Rp578.8 trillion, an increase of Rp62.7 trillion or 12.1% from Rp516.1 trillion in 2017. Dear respected shareholders and stakeholders, This report covers the Board of Commissioners’ duties and responsibilities conducted during the 2018 financial year. When supervising and advising the Board of Directors’ duties, the Board of Commissioners refers to the approved Bank Business Plan, ensures that the Company runs effectively and acts in accordance with the expectations of shareholders and other stakeholders. During 2018 the Board of Commissioners carried out its duties, obligations and responsibilities covered the management policy supervision, and the Company management as stipulated by the applicable laws and regulations, the Articles of Association and the Work Plans set at the beginning of the year. Important matters related to the Board of Commissioners’ duties and responsibilities are presented below. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 35
  36. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk STRATEGY IMPLEMENTATION SUPERVISION Key strategies were established in BNI’s Corporate Plan to help achieve the Bank Business Plan (RBB) targets, and became one of the main focuses for the Board of Commissioners. The Board of Commissioners directed, monitored and evaluated the Bank’s strategic policies implementation in 2018, including evaluating the BNI and RBB Corporate Plan and 2018 financial performance every month. The Board of Commissioners supervises the efforts made to achieve the RBB, particularly the important elements in the business plan such as lending, improving asset quality, collecting third party funds, productivity and efficiency. The Board of Commissioners also evaluates and submits the RBB realization reports to the Financial Services Authority through the RBB supervision reports every semester. If revisions are made, the Board of Commissioners will conduct a further review for approval. In addition, the Board of Commissioners conducts reviews and approvals for the following years’ RBB, including the RBB for 2019-2021 and the BNI Corporate Plan for 2019-2023. FREQUENCY AND HOW ADVICE IS GIVEN TO THE BOARD OF DIRECTORS The Board of Commissioners’ supervision functions, duties and obligations is conducted through the following mechanism: 1. Through the Board of Commissioners’ MeetingsThe Board of Commissioners’ Meetings are conducted internally by Commissioners, or by inviting Sector Directors or Senior Executive Vice Presidents related to the Meeting agenda, as well as regular joint Meetings with the Board of Directors. 2. The Committees below the Board of Commissioners play an active role in assisting and supporting the Board’s smooth operation through Committee meetings as well as by evaluating, studying or reviewing matters related to the Board of Commissioners’ duties. 3. Providing the Board of Commissioners’ direction and opinion in writing to the Board of Directors in response to reports on the execution of their duties, all approval or consultation requests submitted by the Board of Directors, as well as information on strategic and significant issues. 4. Board of Commissioners’ work visits to BNI work units, and giving direction and opinion to the Board of Directors based on the results of these visits. 36 Adapting Quickly to Face Change During 2018 a Board of Commissioners held 41 meetings including internal Board of Commissioners meetings, or by inviting the Sector Director or the related Senior Executive Vice President. Joint Meetings with the Board of Directors were held 11 times. The Commissioners and Directors conducted all meetings effectively, with a high level of attendance. BOARD OF DIRECTORS’ PERFORMANCE ASSESSMENT The Board of Commissioners gives its highest appreciation for the Board of Directors’ excellent performance achievements in managing Bank’s, which resulted in the Company exceeding its performance targets in 2018. Some areas that the Board of Commissioners considered in the Board of Directors’ performance evaluation are presented below. ECONOMIC CONDITIONS AND COMPANY PERFORMANCE Bank Indonesia projected that Indonesia’s economic growth in 2018 would reach 5.17%. Inflation at the end of November 2018 was 3.23% (yoy), against Bank Indonesia’s target of 3.5% ± 1%. The Indonesian economy is still dominated by 3 (three) main business areas, namely agriculture, forestry / fisheries, and trade. By the second quarter of 2018, the processing industry had the highest growth at 0.91%, followed by the trade sector at 0.69%, and construction at 0.57%. The Rupiah exchange rate against the US Dollar was under pressure in mid-2018 and this continued until the end of the year leading to an outflow of foreign capital from the Indonesian financial system, resulting in an account deficit, mainly due to the export-import deficit, which dominated the Indonesian economy throughout 2018. In addition, other external factors came into play including the Fed Fund Rate (FFR) and the US and China trade wars. In the middle of this external pressure, Indonesia’s economic situation did not change significantly in 2018. The Board of Commissioners’ view is that the BNI Directors and staff’s spirit continued to grow amid the very high economic challenges, and they were able to continue competing in an increasingly competitive banking business. BNI maintained this spirit throughout 2018 in relationship to business growth, by becoming more selective in choosing the right industrial sectors. The Board of Commissioners’ view is that the Board of Directors has been able to face the disruptive economy era that began in 2017, and has adapted well especially in terms of technology and service innovations. PT Bank Negara Indonesia (Persero) Tbk
  37. Management Report In 2018 , BNI maintained its asset growth in their prospective sectors, which is reflected in total assets reaching Rp99.2 trillion. Loans disbursed, as the bank’s main business, accounted for 63.4% of the total assets in 2018. BNI’s loans grew by 16.2%, higher than last year’s 12.2%. BNI’s aggressive expansion relied on it staying selective, especially on asset quality and paying attention to prudential banking principles. The highest loan growth was with other SOEs, which grew by 31.6%, and private corporate loans which grew 12.9%, with the largest contributions coming from the manufacturing industry, restaurant and hotel trade, and business services. Absolute NPL decreased from Rp9.4 trillion in 2017 to Rp9.2 trillion in 2018, a decrease of 2.4%, showing BNI’s commitment to maintaining the loan quality amid the aggressive expansion. BNI’s Third Party Funds (TPF) through customer deposits grew during 2018, mainly driven by digital banking transactional services. BNI also raised cheap funds by continuing to enhance its partnerships with institutional customers, both private, state-owned and government. During 2018, customer deposits stood at Rp578.8 trillion, an increase of Rp62.7 trillion or 12.1% from Rp516.1 trillion in 2017. Giro accounts reached Rp169.3 trillion, an increase of 18.2% or Rp26.1 trillion from Rp143.2 trillion in 2017. Savings also recorded aggressive growth and reached Rp206.1 trillion, an increase of Rp23.8 trillion from Rp182.3 trillion in 2017. Deposit products also grew 6.7% or Rp12.8 trillion during 2018 to Rp203.4 trillion. This growth was not as aggressive as the giro and savings products as BNI implemented its strategy to focus on funding sourced from CASA. The excellent operational performance helped generate net profit growth of 10.3% compared to 2017, mainly due to the increases in interest and sharia income which were the main driving forces for the banking operations. BANK HEALTH LEVEL One important factor for the Board of Commissioners is the Bank’s Health Level (BHL) that is derived from assessing the Bank’s risk based rating, and the Bank’s performance. The BHL helps BNI identify problems early so it can develop and implement corrective actions, and establish future business strategies. The BHL is based on 4 (four) factors as follows: 1. Risk Profile A Risk Profile Assessment is carried out by assessing the Inherent Risk in BNI activities, and the Quality of Risk Management on 8 (eight) risk types. 2. Good Corporate Governance The Corporate Governance Assessment evaluates the quality of BNI’s management on the execution of Corporate Governance principles. 3. Earnings Assesses the Earnings factors including performance, sources, sustainability, and management. 4. Capital Assesses the capital factors including capital adequacy and its management. When assessing capital adequacy, BNI links its capital adequacy to its risk profile. Rating (TKB) is reported to the regulator (OJK) every 6 months (semester) in June and December. The BNI Bank Health Rating for the period to December 31, 2018 resulted in the “Healthy” rating, which means that: 1. The Bank’s condition is generally healthy, so it is considered capable of facing significant negative effects from changes in business conditions and other external factors. 2. The rankings for the assessment factors (Risk Profile, Governance, Earnings and Capital) are generally good. If there are any weaknesses, they are not significant. BNI’s risk profile, as one of the factors in the TKB assessment for December 31, 2018, was ranked 2 (low to moderate). As a result of BNI’s low to moderate risk profile and based on Internal Capital Adequacy Assessment Process (ICAAP) calculations, the minimum CAR based on the risk profile is 9.9%. If the buffer capital is added, namely Conservation Buffer 1.875%, Countercyclical Buffer 0% and Capital Surcharge 1.125%, then the Minimum Capital Adequacy Ratio (MCAR) limit becomes 12.9%. In 2018, BNI’s MCAR of 18.5% exceeded the specified minimum limit. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 37
  38. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk VIEW ON PROSPECTS PREPARED BY THE BOARD OF DIRECTORS VIEW ON GOOD CORPORATE GOVERNANCE Long-term business continuity is the goal that must always be properly analyzed by the Board of Directors. Their ability to predict future business prospects is an important matter that is of concern to the Board of Commissioners. Based on external and internal conditions, the Board of Commissioners considers that the business prospects that have been prepared by the Board of Directors are appropriate, in accordance with realistic assumptions. The Banks performance cannot be separated from applying good corporate governance (GCG), and its effectiveness is a key factor in achieving superior company performance. Therefore, the Board of Commissioners strongly emphasizes its supervision of the Banks GCG, and we view that it has been implemented properly. The independent GCG assessments carried out by the Indonesian Institute for Corporate Directorship (IICD) in 2018 show that the Banks has implemented GCG very well as indicated by an Asean Corporate Governance Scorecard (ACGS) score of 91.58. Even though global economic conditions have not yet escaped the past difficult conditions, the Government of Indonesia continues to focus on encouraging the maintenance of public purchasing power through subsidy programs, both for energy and non-energy subsidies. The Government’s efforts to encourage Indonesia’s economic growth have resulted in economic growth in various sectors. This creates opportunities for BNI to develop its business supported by its core capabilities. BNI’s ability to mobilize and allocate resources and maintain and develop its core capabilities are important factors in anticipating and grabbing business opportunities from existing external conditions. The Board of Commissioners believes that BNI will continue to do its best, and is optimistic that the Board of Directors will continue to achieve its performance targets. Over the last three years, BNI’s adaptive capacity has already shown that it can grow higher than the industry. 38 Adapting Quickly to Face Change The Board of Commissioner optimistic that the Board of Directors will continue to achieve its performance targets. Over the last three years, BNI’s adaptive capacity has already shown that it can grow higher than the industry. The key GCG components that receive the main attention from the Board of Commissioners include the risk management system, internal control systems, and the whistleblowing system. RISK MANAGEMENT As a part of GCG, BNI’s risk management has been running effectively and integratedly, and has supported the sustainable performance achievement and growth while increasing the company’s competitiveness. The Board of Commissioners actively supervises the application of risk management through the following mechanisms: 1. Approves BNI’s risk management policies including the risk management strategy and framework that are determined based on risk appetite and risk tolerance. 2. Evaluates risk management policies and strategies. 3. Evaluates the Board of Directors’ accountability and provides direction for improvements to BNI’s risk management policies. 4. Ensures that the risk management policies and processes are carried out effectively, and are integrated into all BNI risk management processes. PT Bank Negara Indonesia (Persero) Tbk
  39. Management Report The Board of Commissioners ’ supervisory function is conducted through the Directors and Commissioners forum (Radikom), as well as in the Risk Monitoring Committee, the Integrated Governance Committee and the Audit Committee meetings. For Risk Management to run effectively, the implementation is based on established Risk Governance, which includes clearly regulated roles and responsibilities, decisionmaking processes, the interrelationships between the Risk management functions, and the establishment of policies that ensure that Risk is managed properly. BNI has a General Risk Management Policy that is the strategic and comprehensive basic reference for applying Risk Management. Risk Management Procedures are in place to guide the implementation of Risk Management. As a guideline for implementing Risk Management, BNI has already established policies and procedures for managing each of the Risks. To apply Integrated Risk Management, the BNI Financial Conglomerate has a joint commitment to carrying out the duties and responsibilities of each Financial Services Institution (FSI), as outlined in the Integrated Risk Management Pact that has been approved and signed by the President Director and President Commissioner of all BNI Financial Conglomerate FSI. The Board of Commissioners believes that the Bank’s risk management and integrated risk management has been conducted properly. Banks has sufficient policies, risks and risk limits that are regularly reviewed with the approval of the Board of Directors. Banks also has adequate processes for identifying, measuring, monitoring and controlling risk on an ongoing basis for all material risk factors supported by a Risk Management Information System. INTERNAL CONTROL SYSTEM An effective Internal Control System is an important component in the Bank’s management and is the basis for sound and safe Bank operations. The Board of Commissioners constantly monitors the internal control system’s effectiveness, especially the Internal Audit Work Unit review results, related to their function as the third line of defense. PT Bank Negara Indonesia (Persero) Tbk  BNI’s Internal Control System refers to the Financial Services Authority Circular No. 35/SEOJK.03/2017 dated July 7, 2017 concerning the Standard Guidelines for Internal Control Systems for Commercial Banks, in line with the COSO framework and the Basel Committee - Internal Control, covering 5 (five) key interrelated elements in the Bank’s internal control system including: 1. Management supervision and control culture 2. Risk identification and assessment 3. Control activities and separation of functions 4. Accounting, information and communication systems 5. Monitoring activities and deviations/weaknesses correction actions WHISTLEBLOWING SYSTEM A key mechanism in Banks Anti-Corruption Program is the whistleblowing system (WBS), and includes “WBS to CEO” as a means for early detection of violations in BNI that could cause financial losses, or could damage BNI’s image. The WBS is used by BNI staff to report violations that occur in the BNI environment, and is managed in collaboration with an external party, Deloitte, with the aim of realizing a clean working environment with more effective integrity. The Board of Commissioners is of the opinion that the management of WBS externally will increase the potential for staff to report violations as they will feel freer when reporting, without fear of reprisal actions from the reported parties, especially if those reported are their superiors, and for this reason the WBS management has become more independent. During 2018, the WBS received 93 (ninety three) violations reports, which were followed up through investigation processes. Based on the ICU results for their examination on WBS reporting, there were 21 reports that were declared proven, and sanctions were imposed in accordance with the Company’s policies. The Board of Commissioners view is that the WBS is working well, and they have provided direction so that socialization is carried out on an ongoing basis to improve employees’ understanding and concern in reporting violations so as to create a clean working environment with more effective integrity. Adapting Quickly to Face Change 39
  40. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk CHANGES IN BOARD OF COMMISSIONERS’ COMPOSITION During 2018, the membership and composition of the BNI Board of Commissioners saw 2 (two) changes as follows: JANUARY 1, 2018 - MARCH 20 2018 The Board of Commissioners consisted of 8 (eight) people including 1 (one) President Commissioner and Independent Commissioner, 1 (one) Deputy President Commissioner, 3 (three) Independent Commissioners and 3 (three ) Commissioners. Name Position Domicile Date Appointed Effective Date Ari Kuncoro President Commissioner / Independent Commissioner Jakarta November 2, 2017 March 14, 2018 Wahyu Kuncoro Commissioner Vice President Commissioner / Commissioner. Jakarta March 10, 2016 March 16, 2017 January 25, 2017 May 29, 2017 Revrisond Baswir Commissioner Independent Commissioner Jogjakarta March 17, 2015 March 10, 2016 June 24, 2015 January 25, 2017 Pataniari Siahaan Commissioner Independent Commissioner Jakarta March 17, 2015 March 10, 2016 June 25, 2016 January 25, 2017 Bistok Simbolon Commissioner Jakarta January 12, 2016 May 10, 2016 Joni Swastanto Commissioner Jakarta March 10, 2016 April 20, 2016 Marwanto Harjowiryono Commissioner Jakarta March 16, 2017 July 19, 2017 Ahmad Fikri Assegaf Independent Commissioner Jakarta March 16, 2017 July 19, 2017 MARCH 20, 2018 - DECEMBER 31, 2018 The Board of Commissioners consisted of 9 (nine) people including 1 (one) President Commissioner and Independent Commissioner, 1 (one) Deputy President Commissioner, 4 (four) Independent Commissioners and 3 (three) Commissioners. Name Position Domicile Date Appointed Effective Date Ari Kuncoro President Commissioner / Independent Commissioner Jakarta November 2, 2017 March 14, 2018 Wahyu Kuncoro Commissioner Vice President Commissioner / Commissioner. Jakarta March 10, 2016 March 16, 2017 January 25, 2017 May 29, 2017 Revrisond Baswir Commissioner Independent Commissioner Jogjakarta March 17, 2015 March 10, 2016 June 24, 2015 January 25, 2017 Pataniari Siahaan Commissioner Independent Commissioner Jakarta March 17, 2015 March 10, 2016 June 25, 2016 January 25, 2017 Bistok Simbolon Commissioner Jakarta January 12, 2016 May 10, 2016 Joni Swastanto Commissioner Jakarta March 10, 2016 April 20, 2016 Marwanto Harjowiryono Commissioner Jakarta March 16, 2017 July 19, 2017 Ahmad Fikri Assegaf Independent Commissioner Jakarta March 16, 2017 July 19, 2017 Sigit Widyawan Independent Commissioner Jakarta 20 Maret 2018 September 7, 2018 Changes to the Board of Commissioners’ composition are based on Banks business needs, and the results of the needs analysis carried out by the Remuneration and Nomination Committee. 40 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  41. Management Report COMMITTEES UNDER THE BOARD OF COMMISSIONERS PERFORMANCE ASSESSMENT AND BASIS FOR THE ASSESSMENT In carrying out its duties and responsibilities the Board of Commissioners is assisted by committees that report to them , including the Audit Committee, Nomination and Remuneration Committee, Risk Monitoring Committee and Integrated Governance Committee. The performance assessment for the committees under the Board of Commissioners is based on the correct implementation of all Committees programs/work plans established at the beginning of the year. The committee programs/work plans are implemented through the following mechanism: 1. Holding of committee meetings including those inviting sector directors or related divisions/work units. 2. Studying/evaluating/reviewing by the committees outside the meeting forum where the results are sent in writing to the Board of Commissioners. The fact that the Committees under the Board of Commissioners’ completed of all the programs / work plans set at the beginning of the year, and the frequency and level of attendance at the Meetings, and the activity reports from the Audit Committee, Nomination and Remuneration Committee, Risk Monitoring Committee and Integrated Governance Committee indicates that each committee carried out its duties properly. CLOSING Accordingly, this reports the Board of Commissioners execution of their duties and responsibilities related to the Company’s management during 2018. To all BNI Directors and management, the Board of Commissioners expresses its highest appreciation for the satisfying achievements in 2018. We hope that in the future, BNI Bank will continue to contribute to the Indonesian nation through its role in increasing national economic growth. Jakarta, March 2019 On behalf of the Board of Commissioners Ari Kuncoro President Commissioner PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 41
  42. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Herry Sidharta (Vice President Director) Anggoro Eko Cahyo (Director of Finance) 42 Adapting Quickly to Face Change Dadang Setiabudi (Director of Information Technology and Operations) Tambok P. Setyawati (Director of Retail Banking) Endang Hidayatullah (Director of Compliance) PT Bank Negara Indonesia (Persero) Tbk
  43. Management Report Adi Sulistyowati (Director of Institutional Relations) Achmad Baiquni (President Director) PT Bank Negara Indonesia (Persero) Tbk  Bob Tyasika Ananta (Director of Risk Management) Rico Rizal Budidarmo (Director of Treasury and International Banking) Putrama Wahju Setiawan (Director of Medium Business) Catur Budi Harto (Director of Small Business & Network) Adapting Quickly to Face Change 43
  44. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk BOARD OF DIRECTORS’ REPORT Compared to the banking industry and its peers group, BNI grew higher both in terms of assets and funding. BNI loans grew 15.3% as of September 2018, while customer deposits grew 13.7% higher than the industry and also peers groups for the same period. With the loans and customer deposits growth, BNI’s assets grew 14.3%, higher than the industry and peers groups. Dear respected shareholders and stakeholders, Through this report, please allow us to present the Company’s management results for 2018, as carried out by the Board of Directors. Thanks to the presence of God Almighty, in this challenging year, the Directors, management and all employees have produced a performance that has exceeded the Bank’s Business Plan targets. In this report, we will present our analysis of Banks performance and BNI business prospects going forward. This report will also convey the corporate governance development, and will contain information on changes to the Board of Directors’ composition in 2018. PERFORMANCE ANALYSIS 44 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  45. Management Report The improved BNI performance succeeded in driving net profit growth of 10 .3% compared to 2017, triggered by the increasing contribution of income such as interest and sharia income which are the main driving forces of the banking operations. Achmad Baiquni President Director PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 45
  46. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk PERFORMANCE ANALYSIS The Company’s performance achievements in 2018 were strongly influenced by a number of external and internal factors, and choosing the right strategy was necessary in the face of economic challenging conditions. In the next section, we will analyze the macro economy and banking industry, outline the strategic policies that have been implemented, and present Banks performance. ECONOMIC AND BANKING INDUSTRY ANALYSIS In the global economy, during 2018 the conditions in the United States remained a major concern, with the United States central bank The Federal Reserve (The Fed) grabbing the world’s attention with its interest rate policy. The Fed raised its benchmark interest rate by 25 bps 4 (four) times, and it is currently standing at 2.50%. The increases took place in March, June, September and December 2018 following the increases in US inflation that exceeded the comfort limit of 2%, and the unemployment rate standing at 3.9% at the end of 2018. In the European region, the Eurozone (EZ) economy’s improving inflation pushed the European Central Bank to reduce its stimulus to buy securities. China’s economy contracted in 2018, after growing moderately 6.8% (YoY) in Q1, it slowed to 6.7% (YoY) in Q2, then fell to 6.5% (YoY) in Q4, and fell again to 6.4% (YoY) in Q4. The tariff war with the US depressed China’s export performance, as the US was China’s main export destination market. In Japan, the negative interest rate policy has not consistently encouraged Japan’s economic growth. After contracting 1.2% (YoY) in Q1 - 2018, it grew 1.4% (YoY) in Q2, but fell again to 0.0% (YoY) in Q3. Japanese inflation continued to improve leaving behind the deflation era of 2016 and the low inflation era of 2017. In 2018 Japanese inflation was closer to 2%, with it’s highest in February 2018 at 1.5%. Food and energy prices drove the inflation increase, while core inflation remained relatively low. This condition encouraged the Bank of Japan (BOJ), as the Japanese central bank, to keep its benchmark interest rate at -0.10%. controlled inflation was influenced by low core inflation, and low volatile food inflation, so price inflation was relatively well maintained. BI’s success in maintaining inflation cannot be separated from its joint coordination with the Government both at the central and regional levels. One major problem in 2018 was the current account deficit (CAD), with the CAD ratio to Indonesia’s GDP continuing to increase during 2018. In QI - 2018, CAD reached 2.17% of GDP, then increased to 3.02% Q2, and widened again to 3.37% of GDP in Q3. CAD has become the focus of attention for the Government as it negatively impacts the rupiah exchange rate. The negative impact from the CAD drove BI to be preemptive and ahead of the curve towards its benchmark interest rate, the BI 7 days Repo Rate which was increased by 175bps in 2018. From within the country, another factor considered by BI besides the widening CAD was the trade balance deficit. Cumulatively, Indonesia recorded a trade balance deficit of US$8.57 billion, against the US$11.84 billion surplus in 2017. Indonesia’s exports grew 6.65% in 2018 to reach US180.06 billion, while imports grew 20.15% to reach US$188.63 billion. The Indonesian banking industry condition up to September 2018, saw bank loans grow by 12.7% (YoY) higher than the 8.2% growth in December 2017. In terms of funding, bank third party funds as of September 2018 grew by 6.6% lower than the 9.4% growth in December 2017. The slowdown in third party funds growth had an impact on banking assets, which by September 2018 had grown 8.6%, lower than the 9.8% growth in December 2017. When compared to the banking industry and its peers group, BNI grew higher both in terms of assets and funding. BNI loans grew 15.3% as of September 2018, while customer deposits grew 13.7% higher than the industry and also peers groups for the same period. With the loans and customer deposits growth, BNI’s assets grew 14.3%, higher than the industry and peers groups. During these unstable world economic conditions, the Indonesian economy grew moderately. In Q1 - 2018 the economy grew 5.06% (YoY), and grew to 5.27% (YoY) in Q2, and finally reached 5.17% (YoY) in Q3. Indonesian inflation for 2018 was 3.13%, within the BI target range of 3.5 ± 1%. The 46 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  47. Management Report STRATEGIC POLICIES BNI continually strives to provide the best contribution to encourage economic growth and development for the welfare of society as a whole . This is achieved by coordinating and cooperating with other institutions from countries, governments, individuals, communities, fellow financial companies, and other private entities. BNI is seeks to cement its existence by endeavoring to be one of the major players in the financial sector, especially banking, through comprehensive financial services to all banking customers, and by adding value that is beneficial to all stakeholders, namely customers, investors, employees, communities, and the financial industry. BNI has developed a Long Term Plan and a Short Term Plan after considering the latest internal and external factors. During 2018, BNI succeeded in carrying out its plans that followed 4 (four) main themes, namely Selective, Digitalize, Market Penetration, and Organization Capabilities. The 2018 strategy has been executed well, resulting in BNI’s lending growing faster than the industry average, mainly driven by the corporate segment’s lending, which focused on infrastructure and the processing sector. In the medium segment, the lending increase was supported by optimizing the Corporate customer value chain, and taking over customers in selective industries based on regional potential. Loan expansion in the small segment was also supported by optimizing the financing value chain PT Bank Negara Indonesia (Persero) Tbk  and supply chain, and by maximizing our role in the government programs as the basis for growth. In addition, to support and facilitate loan applications in the small segment we added more channels, namely agen46 and digital-based lending. The above the industry average loan growth was achieved by always following the principle of prudence ensuring that Non-Performing Loans (NPL) are maintained and decreased, to produce relatively high returns. The consumer business increase was achieved by selling BNI Griya, BNI Fleksi, Credit Cards and other loans, focusing on potential millennials through digital development. To grow the digital and potential millennial business, BNI launched a QR-based mobile payment systems called Yap!, Cinta banking chat, and BNI Call application (1500046 Virtual Assistant). To provide a better user customer experience, BNI has opened 8 (eight) digital branches. The strategy for increasing TPF focuses on closed loop transactions to ensure all customer transactions remain in BNI. The closed loop transactions for Corporate and Commercial customers and their supply chains is through the use of product and service solutions, one being the increase in cash management transactions. In addition, to increase customer transactions through e-commerce, several feature developments and strategic partnerships were carried out. Interest income and sharia income increased from Rp31.9 trillion in 2017 to Rp35.4 trillion in 2018 or 11.0%, with the largest increase in interest income coming from loans disbursed amounting to Rp3.9 trillion. Adapting Quickly to Face Change 47
  48. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk PERFORMANCE TARGETS ACHIEVEMENT The selection of the right strategies produced a satisfactory performance in 2018. In 2018, BNI maintain its asset growth in its prospective sectors, which is reflected in it growing to Rp99.2 trillion. The loans disbursed to the bank’s main business contributed 63.4% of total assets in 2018. BNI’s loans grew by 16.2%, higher than last year’s 12.2%, due to BNI aggressively expanding its lending while staying selective, especially on asset quality, and while paying attention to prudential banking principles. The growth was mainly in loans to SOEs that grew by 31.6%, and private corporate loans that grew 12.9%, with the largest contribution coming from the manufacturing industry, restaurant and hotel trade, and business services. BNI, as a state-owned bank, again played an important role in strengthening the government’s strategies, which subsequently had an impact on increasing loans disbursed to SOEs by 31.6% and loans disbursed to private corporations that grew by 12.9%, mainly in the manufacturing industry, restaurant and hotel trade, business services and construction services sectors. This resulted in the composition of loans disbursed to the bank’s main business increasing from 62.2% in 2017 to 63.4% in 2018. In 2018 the gross NPL ratio improved to 1.9% compared to 2.3% in 2017. Net NPL was 0.8% in 2018, compared to 0.7% in 2017. This was due to BNI’s strategy of selective expansion in low risk sectors, and shows us as a major player in the regions. In addition, BNI also restructured and remedied troubled debtors who still have the potential for financial and operational improvements. In anticipation of the fluctuating macroeconomic conditions, BNI mitigated its lending risks by providing higher reserves than the previous year, as reflected in the 2018 coverage ratio of 152.9% compared to 148.0% in 2017. Absolute NPL (Bank only) decreased 2.4% from Rp9.4 trillion in 2017 to Rp9.2 trillion in 2018, showing BNI’s commitment to maintaining the quality of its loans amid aggressive expansion. Liquidity became an issue in the banking industry during 2018, with the growth in lending being higher than the growth in customer deposits resulting in the industry Loan to Deposit Ratio (LDR) being above 90%. During this tight 48 Adapting Quickly to Face Change banking liquidity, BNI produced encouraging growth in customer deposits during 2018, with Digital-based banking transactional services becoming BNI’s main weapon in driving this growth. Also to collect cheap funds, BNI continued expanding its partnerships with institutions or institutional customers, both private, state-owned and government. During 2018, customer deposits stood at Rp578.8 trillion, an increase of Rp62.7 trillion or 12.1% from Rp516.1 trillion in 2017. Giro accounts reached Rp169.3 trillion, an increase of 18.2% or Rp26.1 trillion from Rp143.2 trillion in 2017. Savings also recorded aggressive growth and reached Rp206.1 trillion, an increase of Rp23.8 trillion from Rp182.3 trillion in 2017. Deposit products also grew 6.7% or Rp12.8 trillion during 2018 to Rp203.4 trillion. This deposit growth was not as aggressive as the giro and savings products as BNI implemented its strategy to focus on funding sourced from CASA. This strategy resulted in an improvement in BNI’s CASA ratio from 63.1% in 2017 to 64.8% in 2018. This condition also led to a decrease in the cost of funds of 0.2% from 3.0% in 2017 to 2.8% in 2018. The improved BNI performance succeeded in driving net profit growth of 10.3% compared to 2017, triggered by the increasing contribution of income such as interest and sharia income which are the main driving forces of the banking operations. Interest income and net sharia income increased from Rp31.9 trillion in 2017 to Rp35.4 trillion in 2018 or 11.0%, with the largest increase in interest income coming from loans disbursed amounting to Rp3.7 trillion. These 2018 achievements indicate that the Company’s performance has met its target. OBSTACLES FACED AND STEPS TAKEN The superior performance in 2018 is inseparable from the Board of Directors and management efforts to overcome the many obstacles and challenges faced. Like other business entities, BNI faced a variety of challenges from the external environment and also from several internal challenges. The increase in benchmark interest rates and the weakening trend in the exchange rate, as well as the increase in the Banking NPL were the external challenges that had to be faced with appropriate strategies. Like other banking companies, the threat of cyber crime is also a challenge that has to be faced by BNI. PT Bank Negara Indonesia (Persero) Tbk
  49. Management Report In addition , internally there are also several matters that need to be improved, especially related to loan collectibility. The contribution from subsidiaries is also an important matter that needs to be improved, so that significant synergies can be achieved. Related to the internal challenges and constraints, the Board of Directors continually tries to overcome these obstacles. One way has been through selectively channeling financing that focuses on priority industries and by optimizing the Banks’ role in government programs as a basis for growth. BNI has also strengthened its consumer business in collaboration with business partners and provided financial transaction solutions with a focus on e-commerce and the millennial generation through the development of digital channel acquisition and feature development through strategic partnerships. Also importantly, BNI is optimizing its organization capabilities to support its business achievements by increasing employee productivity, increasing the effectiveness and efficiency of business processes and developing information technology that supports Banks business. These strategies have been implemented appropriately and BNI produced a proud performance in 2018. Based on its targeted achievements in 2018, BNI increased its net profit and reduced its NPL in 2018, according achieving the targets. Regarding domestic liquidity, estimates say that it will be tight due to several reasons. Firstly, higher loan growth compared to deposit growth, reflected in a higher loan to deposit ratio (LDR). Based on regulation No. 17/11/ PBI/2015, the LDR lower limit is 78% and the upper limit is 92%. Secondly, the government is increasingly active in issuing retail bonds that can be purchased by individuals so there is the potential they may switch from deposits in banks (both deposits and savings) to retail bonds. Currently the Government owned retail bonds consist of Retail Government Bonds (ORI), Retail Sukuk (SR) and Sukuk Tabungan (ST). The amount of retail Government Securities (SBN) in 2019 will reach Rp60 trillion, and to facilitate the public, the Government will issue SBN online with a first come first served system. If liquidity is tightened, there will be increased competition between banks for deposits, which will affect funds growth in 2019. In line with the adoption of the Macroprudential Intermediation Ratio (MIR), BI continues to encourage bank lending while expanding funding and financing sources through issuance of securities. These financing alternatives present a challenge for banks in carrying out its intermediary function. The low cost of issuing bonds will encourage companies to choose financing through bonds. The national bank lending growth will become a problem if it does not grow like in 2018, which until September 2018 had grown by 12.6%. BUSINESS PROSPECTS ANALYSIS The world’s and Indonesia’s economic conditions in 2019 are predicted to still face many challenges, with several world institutions agreeing that the global economy would be supported by the US and developing countries such as India, ASEAN-5 (especially Indonesia and the Philippines), Brazil and Mexico (Economic Outlook 2019, IMF). There is still the potential for an increase in the FFR in 2019 if the American economy continues to grow in accordance with the expectations and realization of American inflation, which has reached its target of 2%. In addition, the end of Quantitative Easing (QE) in both Europe and Japan will impact the lack of foreign funds entering the Indonesian financial market compared to the previous year. The US and China trade wars will also continue and cause an impact. Given that global economic growth is still problematic, the main source for Indonesia’s economic growth comes from within the country. The government will continue to focus on encouraging the maintenance of public purchasing power through various subsidy programs, both for energy and nonenergy subsidies. PT Bank Negara Indonesia (Persero) Tbk  The economic conditions, especially in the financial industry, is still facing various challenges, and will of course have an impact on BNI’s business activities. BNI’s ability to mobilize and allocate resources and maintain and develop its core capabilities is an important factor in anticipating and taking business opportunities from existing external conditions. BNI remains confident that it will still be able to do its best. BNI is optimistic that it will always be able to achieve its performance targets as the business world will still offer many excellent growth opportunities in the coming years, especially for companies that are able to adapt to the environment and are agile enough to exploit these opportunities. BNI’s adaptability and agility has historically been proven in recent years, where in years of moderate economic and financial industry growth conditions, BNI has been able to grow higher than the industry. From the quarterly breakdown of Indonesia’s economic growth in 2017-2018, the largest contributions apart from the Industrial Trade Sector came from the Processing Adapting Quickly to Face Change 49
  50. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Industry, Agriculture (including Forestry and Fisheries), Construction, Transportation and Warehousing, and Communication Information Sectors with an average growth contribution of 20%, 13%, 10.5%, 5.5%, and 3.8% respectively. By comparison, the Industrial Trade Sector contributed an average of 13% to economic growth. This economic structure is an opportunity for BNI to develop its business supported by its core capabilities. In 2018, the largest funding to the BNI Corporate Segment was given to the Manufacturing, Agriculture, and the Business Services Industry Sectors with each portfolio’s composition being 26%, 15% and 13% respectively. The Business Services Industry Sector is the third highest-growth Industrial Sector after the Information and Communication Industry Sector and the Transportation and Warehousing Industry Sector. During the same period, BNI’s Medium Segment provided the largest financing to the Industrial Trade, Manufacturing, and Transportation and Warehousing Sectors with a portfolio composition of 31%, 26% and 11% respectively. BNI’s Small Segment largest financing was to the Trade, Manufacturing and Agriculture sectors with a financing composition of 57%, 11% and 10% respectively. BNI has and will continue to make significant investments in the development of its technology in an effort to always remain relevant in the era of technological change, including efforts to be a pioneer in the use of information technology in accordance with changes in customer preferences due to internet penetration and devices. Information technology applications will be perceived by customers, both individuals and business entities, or other institutions, when using BNI financial services, to be superior and are expected to help increase engagement with BNI so that it can provide long term added value not only for BNI but also its customers. The information technology applications developed include digitizing business processes to improve quality, service speed, process transparency, and system interoperability. In addition, platform development and transaction applications that enable interaction between customers both Business to Business (B to B), Business to Customer (B to C), and Customer to Customer (C to C) will be developed so as to increase the user’s experience in every customer trip to BNI. Development of features and applications like the Yap! cash management system will continue to meet customer needs by optimizing the capabilities of data analytics. 50 Adapting Quickly to Face Change Support for the Government programs will continue to be carried out as BNI is one of the national agents of development, and this government program and the entire community involved can become BNI’s potential business targets. Support for cross-sectoral government development strategies such as infrastructure development, tourism, transportation, or agriculture will continue. The business contribution from this support is quite significant for BNI, both for finance distribution and for raising funds and feebased income. Other Government programs such as the People’s Business Loans, Financial Inclusion, Laku Pandai, and social assistance will help improve the quality of the economic growth quickly and sustainably and will ultimately increase BNI’s business as a whole. CORPORATE GOVERNANCE DEVELOPMENT BNI is committed to continuously improving the quality of its good corporate governance principles in all aspects of its business activities including its integrated subsidiaries. Together with the development of good corporate governance (GCG) best practices, both in the banking industry and the financial services industry, BNI as a stateowned bank registered in the capital market understands that the execution and development of GCG brings enormous benefits. To achieve this, BNI has guidelines for conducting its business activities so they are always in line with each stakeholder’s goals and needs. Alignment between stakeholders and BNI will foster mutual trust and a conducive attitude in the corporate environment resulting in the emergence of, and increase in the superior nature of work and professionalism in all BNI people. BNI also realizes that corporate governance will further enhance its investors’ trust and security in the current global era. On an ongoing basis, in addition to implementing the basic GCG principles, BNI is adopting many best governance standards at regional and international levels, including the ASEAN Corporate Governance Scorecard, Minister of State-Owned Enterprises Regulation No. PER-01/ MBU/2011 concerning Good Corporate Governance. and its amendments namely Minister of State-Owned Enterprises Regulation No. PER-09/MBU/2012, OJK Regulation No. 21/ POJK.04/2015 concerning Application of Public Company Governance Guidelines, and OJK Regulation No. 55/ POJK.03/2016 concerning Implementation of Governance PT Bank Negara Indonesia (Persero) Tbk
  51. Management Report for Commercial Banks , Principles for Enhancing Corporate Governance issued by the Basel Committee on Banking Supervision, OJK Circular Letter No. 32/SEOJK.04/2015 concerning Guidelines for Public Company Governance, and OJK Circular Letter No. 13/SEOJK.03/2017 concerning Implementation of Governance for Commercial Banks. In 2018, BNI again won the Best State Owned Enterprise and Top 50 Public Listed Companies awards at the Good Corporate Governance Award Ceremony organized by the Indonesian Institute for Corporate Directorship (IICD), and the Most Trusted Company Based on Corporate Governance Index (CGPI) at the Good Corporate Governance Award 2018 Ceremony. Other GCG developments in 2018 included: 1. Signing of GCG Commitments by all BNI Personnel. 2. Anti-Fraud socialization to all BNI employees. 3. Anti-Gratification Publication in Kompas and Bisnis Indonesia Daily on 30 May 2018 and 21 December 2018. 4. Completion of the Board of Directors’ Charter as stated in the Directors’ Decree No.KP/228/DIR/R dated 29 June 2018. 5. The Implementation of the Socialization GCG Division and the Secretariat, Corporate Communications the district office Makasar (WMK), the district office (WMK), poor a branch office Singkawang and Pontianak as well as all the representative of subsidiary. 6. Anti-Money Laundering and Prevention of Terrorism Financing Compliance Forum in the Financial Services Sector on 30 August 2018. 7. To improve the application of GCG principles in the BNI work environment, internal activities were held in the form of a Vlog GCG competition with the theme “Integrity as the Lifestyle for BNI People #IniIntegritasGue”. The competition’s purpose and objective was to raise awareness in all BNI people to make integrity a lifestyle choice, and to increase the participation of all BNI people to play an active and creative role in BNI’s integrity lifestyle campaign. In principle, GCG in BNI was conducted well by the Board of Commissioners, Board of Directors and all employees in all activities, with the aim of protecting the interests of the Bank, shareholders and stakeholders. BNI always evaluates the application of GCG on an ongoing basis, so that GCG will always increase. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 51
  52. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk BOARD OF DIRECTORS’ COMPOSITION CHANGES In the 2018 period, the Board of Directors’ membership and composition changed as follows: BOARD OF DIRECTORS’ COMPOSITION BEFORE THE AGMS ON MARCH 20, 2018 The Board of Directors consisted of 10 (ten) people including 1 (one) Managing Director, 1 (one) Deputy Managing Director and 8 (eight) Directors. All members of the Board of Directors are domiciled in the BNI Head Office work area. Name Position Domicile Date Appointed Effective Date President Director Jakarta March 17, 2015 April 16, 2015 Vice President Director Jakarta March 17, 2015 (appointment as Director). March 16, 2017 (redirection to be a Vice President Director) May 22, 2015 Achmad Baiquni Herry Sidharta Rico Rizal Budidarmo May 29, 2017 Director of Finance and Credit Risk Jakarta Director of Planning and Operational Jakarta March 17, 2015 April 16, 2015 Director of Institutional Relations & Transactional Banking Jakarta March 17, 2015 May 22, 2015 Director of Consumer Business Jakarta March 17, 2015 May 22, 2015 Director of Company Compliance & Risk Jakarta March 17, 2015 May 22, 2015 Director of Treasury & International Jakarta January 12, 2016 April 11, 2016 Putrama Wahju Setyawan Director of Medium Business Jakarta March 10, 2016 July 15, 2016 Catur Budi Harto Director of Small Business & Network Jakarta March 16, 2017 July 19, 2017 Bob Tyasika Ananta Adi Sulistyowati Anggoro Eko Cahyo Imam Budi Sarjito Panji Irawan April 16, 2015 BOARD OF DIRECTORS’ COMPOSITION AFTER THE AGMS ON MARCH 20, 2018 The Board of Directors consisted of 11 (eleven) people including 1 (one) President Director, 1 (one) Deputy Managing Director and 9 (nine) Directors. All members of the Board of Directors are domiciled in the BNI Head Office work area. Name Position Domicile Date Appointed Effective Date President Director Jakarta March 17, 2015 April 16, 2015 Vice President Director Jakarta March 17, 2015 (appointment as Director). March 16, 2017 (redirection to be a Vice President Director) May 22, 2015 Achmad Baiquni Herry Sidharta Rico Rizal Budidarmo Director of Finance and Credit Risk Jakarta March 17, 2015 April 16, 2015 Director of Planning and Operational Jakarta March 17, 2015 April 16, 2015 Director of Institutional Relations & Transactional Banking Jakarta March 17, 2015 May 22, 2015 Anggoro Eko Cahyo Director of Consumer Business Jakarta March 17, 2015 May 22, 2015 Tambok P. Setyawati Director of Retail Banking Jakarta March 20, 2018 July 5, 2018 Bob Tyasika Ananta Adi Sulistyowati 52 May 29, 2017 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  53. Management Report Dadang Setiabudi Director of Information Technology and Operations Jakarta March 20 , 2018 July 5, 2018 Putrama Wahju Setyawan Director of Medium Business Jakarta March 10, 2016 July 15, 2016 Catur Budi Harto Director of Small Business & Network Jakarta March 16, 2017 July 19, 2017 Director of Compliance Jakarta March 20, 2018 July 5, 2018 Endang Hidayatullah The Board of Directors’ composition changes are based on the Company needs, as decided by the Shareholders. PERFORMANCE ASSESSMENT OF COMMITTEES UNDER BOARD OF DIRECTORS AND THE BASIS OF ASSESSMENT In carrying out its management duties, the Board of Directors established Committees at the Board of Directors level in accordance with BNI’s business needs and regulatory provisions, which are expected to create operational effectiveness and efficiency, including: 1. Loan Committee. 2. Integrated Risk Management Committee. 3. Risk and Capital Management Committee. 4. Product Committee. 5. Performance Management Committee. 6. Technology Management Committee. 7. Credit Policy and Procedure Committee. 8. Human Capital Committee. The assessment of members of Committee under the Board of Directors is carried out by the Board of Directors by assessing their duties in accordance with the Committee Charter, Competencies and Skills and the Attendance Level of the Committee members. The Board of Directors periodically evaluates the Performance of Committees under the Board of Directors. During 2018, the overall performance of Committees under the Board of Directors was satisfactory. CLOSING Accordingly, this reports the Board of Directors report on the Company management in 2018. The Directors expresses their highest gratitude for the support at all levels of management and employees for their best contribution in achieving the satisfactory Company performance in 2018. To the Board of Commissioners, all of the Directors express their gratitude for the supervision and directives given. The Board of Directors also thanks the Shareholders and other stakeholders for their trust, enabling BNI to provide the best for the nation and state of Indonesia. Jakarta, March 2019 On behalf of the Board of Directors Achmad Baiquni PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 53
  54. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk RESPONSIBILITY STATEMENT We, the undersigned, state that all information contained in the 2018 Annual Report of PT Bank Negara Indonesia (Persero) Tbk is presented in its entirety, and we take full responsibility for the correctness of the contents in this Annual Report This statement is hereby made in all truthfulness. Jakarta March, 2019 BOARD OF COMMISSIONERS ARI KUNCORO President Commissioner/Independent Commissioner WAHYU KUNCORO PATANIARI SIAHAAN REVRISOND BASWIR Commissioner Vice President Commissioner Independent Commissioner Independent Commissioner AHMAD FIKRI ASSEGAF SIGIT WIDYAWAN Independent Commissioner Independent Commissioner BISTOK SIMBOLON JONI SWASTANTO MARWANTO HARJOWIRYONO Commissioner Commissioner Commissioner Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  55. Management Report We , the undersigned, state that all information contained in the 2018 Annual Report of PT Bank Negara Indonesia (Persero) Tbk is presented in its entirety, and we take full responsibility for the correctness of the contents in this Annual Report This statement is hereby made in all truthfulness. Jakarta March, 2019 BOARD OF DIRECTORS ACHMAD BAIQUNI President Director HERRY SIDHARTA PUTRAMA WAHJU SETYAWAN ADI SULISTYOWATI Vice President Director Director of Medium Business Director of Institutional Relations RICO RIZAL BUDIDARMO ANGGORO EKO CAHYO CATUR BUDI HARTO Director of Treasury and International Banking Director of Finance Director of Small Business & Network BOB TYASIKA ANANTA ENDANG HIDAYATULLAH TAMBOK P. SETYAWATI Director of Risk Management Director of Compliance Director of Retail Banking DADANG SETIABUDI Director of Information Technology and Operation PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change
  56. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Company Profile 58 60 62 63 64 68 72 74 76 COMPANY IDENTITY BRIEF HISTORY OF THE COMPANY BRAND PERUSAHAAN BUSINESS FIELDS PRODUCTS AND SERVICES REGIONAL BUSINESS MAP ORGANIZATION STRUCTURE VISION, MISSION AND CORPORATE CULTURE VISION AND MISSION REVIEW BY THE BOARD OF COMMISSIONERS AND BOARD OF DIRECTORS 77 COMPANY CULTURE 78 BOARD OF COMMISSIONERS PROFILES 87 BOARD OF DIRECTORS PROFILE 98 SENIOR EXECUTIVE VICE PRESIDENT PROFILE 99 EXECUTIVE OFFICERS PROFILE 115EMPLOYEE PROFILE AND EMPLOYEE COMPETENCY DEVELOPMENT KARYAWAN 126SHAREHOLDER COMPOSITION 129LIST OF SUBSIDIARIES AND/OR ASSOCIATED ENTITIES 134BNI GROUP STRUCTURE 56 Adapting Quickly to Face Change 135SHARE ISSUANCE CHRONOLOGY 137BOND ISSUANCE CHRONOLOGY 140OTHER SECURITIES ISSUANCE AND/OR LISTING CHRONOLOGY 141NAME AND ADDRESSES OF INSTITUTIONS AND/OR SUPPORTING PROFESSIONS 142PENGHARGAAN DAN SERTIFIKASI 149NAMES AND ADDRESSES OF SUBSIDIARIES, ASSOCIATED ENTITIES, BRANCH OFFICES AND OVERSEAS REPRESENTATIVES AND REGIONAL OFFICES 150OVERSEAS BRANCH OFFICES, SUB BRANCH OFFICES, REPRESENTATIVES OFFICES AND REGIONAL OFFICES 152INFORMATION AVAILABLE ON THE WEBSITE 154EDUCATION AND/OR TRAINING FOR THE BOARD OF COMMISSIONERS, BOARD OF DIRECTORS, COMMITTEES, CORPORATE SECRETARY, AND INTERNAL AUDIT UNIT PT Bank Negara Indonesia (Persero) Tbk
  57. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 57
  58. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk COMPANY IDENTITY Currently BNI has 1 (one) Head Office, 17 Regional Offices and 2,245 office networks consisting of branch offices, sub-branch offices, overseas offices, cash offices and other office networks such as payment points, mobile cash and O-Branch. In addition, BNI also has Agen46 in all provinces in Indonesia. 58 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  59. Company Profile Nama Perusahaan PT Bank Negara Indonesia (Persero) Tbk Business Activity Banking business in accordance with the Articles of Association No. 52, dated May 22, 2018 Nama Panggilan BNI Date of Establishment Business Segment 5 Juli 1946 •Business Banking Corporate, Medium and Small •Consumer Banking •international Banking and Treasury Agen46 Establishment Legal Basis •2018: 111.836 •2017: 69.589 •Regulation in lieu Law No. 2 of 1946 •State Gazette of Republic of Indonesia No. 70 of 1968 •Act Number 17 of 1968 • Government regulation No. 19 of 1992 (Adjustment to Legal Form of BNI) Office Network Data Head Office Address Grha BNI Jl. Jenderal Sudirman Kav. 1. Jakarta 10220 Phone : (62-21) 251 1946 I-Telex : 765185 BNI DLN IA Fax, : (62-21) 251 1214 E-mail : bni@bni.co.id Website : www.bni.co.id PO Box 1946 Central Jakarta 10220 Information Access Cal Center: 24 hour Service BNI Call 1500046 E-mail: bnicall@bni.co.id Twitter: @BNI Facebook: BNI Instagram: @BNI46 Listing Date on Indonesia Stock Exchange •1 Head Office •17 Regional Office •201 Branch Offices •5 Subsidiaries •1,109 Branches •605 Cash Office •128 Payment Point •18,311 ATM •196 O-Branch •6 Foreign Office Networks 28 Oktober 1996 Ticker Code BBNI Total Employees 27,224 Subsidiaries Investor Relations Corporate Secretary and Communcation Division Grha BNI, 24th floor Jl. Jenderal Sudirman Kav. 1 Jakarta 10220 Phone: (62-21) 2511 946, 572 8387 Fax: (62-21) 572 8295, 572 8053 E-mail: investor.relations@bni.co.id •Bank BNI Syariah •BNI Multifinance •BNI Sekuritas •BNI Life Insurance •BNI Remittance Ltd. Authorized capital Rp15,000,000,000,000 Issued and Fully Paid Capital Rp9,054,806,974,125 PT Bank Negara Indonesia (Persero) Tbk  Ownership Composition Republic of Indonesia: 60% Public: 40 % Adapting Quickly to Face Change 59
  60. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk BRIEF HISTORY OF THE COMPANY PT Bank Negara Indonesia (Persero)Tbk (hereinafter “BNI” or “Bank”) was originally established in Indonesia as a central bank under the name of “Bank Negara Indonesia” based on Government Regulation in Lieu of Law No. 2 of 1946 dated July 5, 1946. Subsequently, pursuant to Law 17 in 1968, BNI became “Bank Negara Indonesia 1946”, with the status of a State-owned Commercial Bank. Additionally, BNI’s role as a bank was mandated to improve the people’s economy and participate in national development as confirmed by Law 17 of 1968 regarding Bank Negara Indonesia 1946. Based on Government Regulation No. 19, 1992, April 29, 1992, BNI changed its legal status to a limited liability company (Persero). The change of legal status to limited liability company, was made in Deed No. 131, dated July 31, 1992, before Muhani Salim, SH, and was published in the State Gazette of the Republic of Indonesia No. 73 dated September 11, 1992, Supplement No. 1A. In 1996, BNI as a State Owned Enterprise was the first to become a public company after listing its shares on the Jakarta Stock Exchange and the Surabaya Stock Exchange. To strengthen it’s financial structure and competitiveness in the national banking industry. BNI conducted a number of corporate actions, including being recapitalized by the Government in 1999, with a Government share divestment in 2007, and a limited public offering in 2010. To fulfill the provisions of Law 40 of 2007 dated August 16, 2007 on Limited Liability Companies, BNI’s Articles of Association were amended. The amendments were stated in Deed No. 46 dated June 13, 2008, made before Fathiah Helmi, SH, notary in Jakarta, based on an Extraordinary General Meeting Shareholders decision dated May 28, 2008, which was approved by the Minister of Justice and Human Rights of the Republic of Indonesia, by Decree AHU-AH,01,02-50609 dated August 12, 2008 and published in the State Gazette of the Republic of Indonesia No. 103 dated December 23, 2008, Supplement No. 29015. 60 Adapting Quickly to Face Change BNI’s Articles of Association latest changes relates to a realignment of the Articles of Association in accordance with Deed No. 35 dated March 17, 2015, made before Notary Fathiah Helmi, SH, which was approved by the Minister of Justice and Human Rights of the Republic of Indonesia, by decree No. AHU-AH,01,03-0776526 dated April 14, 2015 The latest amendment to the BNI Articles of Association were included in Deed No. 52 dated May 22, 2018 made before Notary Fathiah Helmi, S.H., and approved in the Ministry of Law and Human Rights of the Republic of Indonesia Decree No. AHU-0012962.AH.01.02.TAHUN 2018 dated June 25, 2018. Currently, 60% of BNI’s shares are owned by the Government of the Republic of Indonesia, while the remaining 40% are owned by the public, both individuals and institutions, domestic and foreign. Currently BNI is listed as the 4th largest national bank in Indonesia, in terms of total assets, total loans and total third party funds. To provide financial services in an integrated manner, BNI is supported by a number of subsidiaries, namely Bank BNI Syariah, BNI Multifinance, BNI Securities, BNI Life Insurance, and BNI Remittance Ltd. BNI offers deposit and loan facilities for the corporate, medium, and small segments. Many of the best products and services have been adapted to meet the needs of customers from childhood, through adolescence and adulthood, until retirement. PT Bank Negara Indonesia (Persero) Tbk
  61. Company Profile CHANGE OF NAME As per the description of the company ’s brief history, BNI has changed its name 1 (one) time since its establishment, from its original name Bank Negara Indonesia to Bank Negara Indonesia 1946 on December 18, 1968 based on the 1968 Law No. 17 concerning Bank Negara Indonesia 1946. As well as the change of name, BNI also changed its legal status from the original Bank Negara Indonesia 1946 to become a Limited Liability Company (Persero) effective on April 29, 1992. BNI has also changed its status from the previous Private Company to Public Company effective on August 6, 1996. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 61
  62. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Brand PERUSAHAAN The BNI Logo uses the colors Orange and Turquoise as its corporate signature colors, which have been developed to give the impression of modernity and freshness. The figure 46 is part of the history as the first BNI Indonesian bank to contribute relentlessly to building the nation The slogan “Serve the State, Pride of the Nation” reinforces the Company’s philosophy and vision. The 2017 Value Proposition sees BNI as a comprehensive and reliable Digital Financial Institution that will continue to provide the experience of digital innovation to all levels of Indonesian society without exception, whether large corporations or very small, individuals of all ages, even for those that have not yet been not touched the bank (unbank). The 2018 Value Proposition is BNI with Digital Banking. 62 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  63. Company Profile BUSINESS FIELDS BNI conducts banking businesses and activities in accordance with the Articles of Association as set forth in Deed No . 52, dated May 22, 2018. The following is a description of the main activities and supporting activities that have been, or have not yet been implemented by the Bank: BUSINESS ACTIVITY IN ACCORDANCE WITH THE LAST ARTICLES OF ASSOCIATION BNI’s Business Activity Main Business MAIN BUSINESS Has Been Implemented Collecting funds from the public in the form of savings, current deposits, time deposits, savings deposits, or other equivalent forms. √ Providing credit. √ Issuing debt instruments. √ Buying, selling, or guaranteeing, at their own risk or for the interests and on the order of customers, (money orders, debt securities/other trade paper, treasury bills, government guarantee letters, Bank Indonesia certificates, bonds, fixed maturity trade securities, and other fixed maturity securities instruments). √ Transfering money either for its own needs or the needs of customers. √ Placing, lending or borrowing with other banks, by using mail, telecommunication facilities and notes, checks or other facilities. √ Receiving payments from securities billing and performing calculations with or among third parties. √ Facilitating a secure place for expensive goods and securities. √ Performing escrow activities for another party based on a contract. √ Performing funds placements from a customer to other customers in the form of securities that are not listed on a stock exchange. √ Conducting financing and/or other activities based on sharia principles, in accordance with the provisions stipulated by competent authorities. √ Performing factoring, credit card business and trusteeship. √ Conducting foreign currencies activities by fulfilling the conditions set by the competent authorities. √ Performing equity activities in banks or other companies in the financial sector. √ Conducting temporary capital participation activities to overcome any consequence of loan failure, including financing failure activities based on sharia principles provided they withdraw their investments in accordance with the provisions stipulated by the competent authorities. √ Acting as a Pension Fund Founder and pension fund manager in accordance with legislation. √ Performing financial services, commercial banking, and other investment banking activities. √ Conducting other activities commonly carried out by banks as long as they do not conflict with laws and regulations. √ Carrying out supporting business activities in the context of optimizing the use of resources, to support the main business activities insofar as they do not conflict with the laws and regulations. √ PT Bank Negara Indonesia (Persero) Tbk  Has Not Implemented Adapting Quickly to Face Change 63
  64. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk PRODUCTS AND SERVICES BNI’s business activities include various deposit products, loan products, and various services described below: CONSUMER SAVINGS • BNI Taplus • BNI Taplus Muda • BNI Taplus Bisnis • BNI Tappa (Taplus Pegawai/ Taplus Anggota) • BNI Tapma (Taplus Mahasiswa) • BNI Haji • BNI Tapenas • BNI Taplus Anak • BNI Taplus Anak Co-Brand • BNI Simpanan Pelajar • BNI Pandai • Tabunganku • BNI Giro • BNI Dollar • BNI Deposito • BNI Simponi • BNI Duo • Tabungan Indonesia Pintar (PIP) LOAN • BNI Griya • BNI Griya Multiguna • BNI Fleksi • BNI Fleksi Pensiun • BNI Oto • BNI Instan • BNI Wirausaha 64 Adapting Quickly to Face Change CREDIT CARD • Reguler Credit Card »» Kartu Kredit Visa Silver »» Kartu Kredit Visa Gold »» Kartu Kredit Mastercard Silver »» Kartu Kredit Mastercard Gold »» Kartu Kredit BNI JCB Gold • Premium Credit Card »» BNI Style Titanium »» BNI Visa Platinum Card »» BNI JCB Precious »» BNI MasterCard World »» BNI Visa Infinite 
 • Affinity Credit Card »» Kartu Kredit BNI Affinity BNI Affinity – Universitas Credit Card »» BNI Affinity – Ikatan Alumni Credit Card »» BNI Affinity – Organisasi/Komunitas Credit Card • Corporate Credit Card »» BNI Corporate Card Gold »» BNI Corporate Card Platinum »» BNI American Express Business Card 
 • Co-Branding Credit Card »» BNI – Garuda Card »» BNI – Lotte Mart Card »» BNI – Bank Sumselbabel Card »» BNI – Bank Jabar Banten Card »» BNI – Bank DKI Card »» BNI – Pertamina Card 
 • • Private Label Credit Card »» BNI Travelling Card »» BNI Gasoline Card »» BNI Health Card- BNI »» Distribution Card BNI Cash card DEBIT CARD • Debit Reguler Card »» Debit Silver Card »» Debit Gold Card • Debit Premium Card »» Debit Platinum Card • Debit Co-Branding Card
 »» Debit Garuda Card »» Debit Ferrari by BNI Card 
 »» Debit LOTTE Mart Wholesale Card 
 »» Debit Co-Branding Multimart Card 
 »» Debit Co-Branding Indogrosir Card • BNI Emerald World MasterCard Card
 E-BANKING • BNI ATM Reguler • BNI ATM Non Tunai • BNI ATM Setoran Tunai • BNI ATM Drive Thru • BNI SMS Banking • BNI Internet Banking • BNI Phone Banking • BNI Mobile Banking • BNI O-Branch • BNI Debit Online • Tap Cash • Agen 46
 • Unikqu
 • EDC
 • EDC Mini ATM • BNI iPay • BNI SmartPay SERVICES • Remittances in Domestic Currency (BNITRANSFER) • International Money Remittance • Safe Deposit Box • BNI Multiguna Voucher • Inkaso • BNI Bank Certificate • Traveler’s Cheque • Foreign Banknotes • Electronic Data Capture (EDC) PENSION SAVING • BNI Simponi BANCASSURANCE • In Branch and Telemarketing • Solusi Abadi Plus • B-Life Plan Multipro • B-Life Cash Pro • Prima Proteksi • Pro Maxima • Pro Medika • Blife Medplus • Rencana Pintar • Rencana Sehat PT Bank Negara Indonesia (Persero) Tbk
  65. Company Profile PRIORITY BANKING BUSINESS BANKING EMERALD SERVICE • BNI Emerald Card • BNI Infinite Card • BNI Emerald Saving • Layanan BNI Emerald INDUSTRIAL SECTOR • Agribusiness • Telecommunications • Food and Drink • Oil and Gas Mining • Chemical Industry • Construction • Electricity • Large and Retail Trade INVESTMENT PRODUCTS • BNI Supermarket Investment • Supermarket Mutual Funds »» Money Market Mutual Funds »» Fixed Income Mutual Funds »» Shares Mutual Funds »» Mix Mutual Funds »» Protected Mutual Funds INSURANCE PRODUCTS • In Branch and Telemarketing • Solusi Abadi Plus • BNI Life Multi Pro • BNI Life Cash Pro • Prima Proteksi • Pro Maxima • Pro Medika • Blife MedPlus • Rencana Pintar • Rencana Sehat E-BANKING • BNI ATM
 • ATM Drive Thru • SMS Banking
 • Internet Banking • Phone Banking • O-Branch • Mobile Banking • Tapcash • Unikqu
 • EDC
 • EDC Mini ATM BNI BUSINESS BANKING • Local Corporate and Multinational Company 1 • Local Corporate and Multinational Company 2 • Transactional Banking Services »» BNI Direct (Payment Management, Collection Management, Liquity Management, Information Management) »» Supply Chain Financing »» Custody and Securities Services • Commercial and Small »» Working Capital Loan (KMK) »» Investment Loan (KI) »» Bank Guarantee (GB) »» Domestic Letter of Credit (SKBDN) »» Letter of Credit (LC) »» People’s Business Loan (KUR) »» Program Loan »» Marketing Intelligence and Business Portfolio FUNDING • Non-Individual BNI Current Accounts • Company Time Deposits • Single Currency • Dual Currency (BNI duo) LENDING • Working Capital Loan • Investment Loan • Supply Chain Loan • Loan to Financial Institutions (KKLK) • People’s Business Loan (KUR) • Two Step Loan • Two Step Loan - IEPC 2 • Time Deposit Backed Loan • BNI Entrepreneurship • Cash Collateral Loan • Export Loan • Import Loan • Primary Cooperative Loan • Syndication Loan • Loan for Food and Energy Security (KKP-E) • Loan Plantation Revitalization - Partnership Program SERVICES • Cash Management »» Transfer Management »» Collection Management (Auto Collection, Pickup Services, BNI Virtual Account) »» Payment Management (Bulk Payment, Payroll Management, BNI e-Tax) »» Liquidity management • Sindikasi »» Arrangement »» Agent • Facility Agent • Security Agent • Escrow Agent • Fund Services »» Fund Accounting, Fund Administration, Reporting and Publication Supervision »» Core Banking BNI »» Transfer Agency • Custody Service • Wali Amanat • Garansi Bank »» Big Bond/Jaminan Tender »» Advance Payment Bond/Jaminan Uang Muka »» Performance Bond (Garansi Bank Pelaksana/ Performance Bond, Garansi Bank Jaminan Pemeliharaan/ Maintenance Bond/ Retention Bond, Garansi Bank Pembayaran) »» • PT Bank Negara Indonesia (Persero) Tbk  Custom Bond Agen Pembayaran (Paying Agent) Adapting Quickly to Face Change 65
  66. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk INTERNATIONAL TRADE FINANCE PRODUCTS • Import LC Issuance »» Sight LC »» Usance LC »» Back to Back LC (BBLC) »» Transferable Letter of Credit • Export LC Negotiation • Inward Documentary Collection • Outward Documentary Collection • Shipping Guarantee • Trust Receipt • Advances Under Collection Bills • Open Account Financing • Bills Discounting • “UPAS” LC Refinancing • Standby Letters of Credit LOAN PRODUCTS • Corporate Loan (Working Capital Loan and Investment Loan) • Term Loan • Overdraft Facility • Trade Financing • Syndication Loan • Project Financing • Discount Bills • Loan on Bills • Housing Loan • Two Steps and Channeling Loans to Local Companies from Indonesia RETAIL SERVICE PRODUCTS • BNI Current Account • BNI Fixed Deposit • BNI SingPlus Saving Account • BNI Simpanan Hong Kong Dollar • BNI Giro Hong Kong Dollar & US Dollar • Demand Deposits • Negotiable Deposits • Remittance • Hospital Guarantee • Bank BNI Singapore| MAS Electronic • Payment System (MEPS) • Escrow Agent • Safe Deposit Box 66 Adapting Quickly to Face Change FINANCIAL INSTITUTION PRODUCTS • Bank Guarantee based on Counter Guarantee • Confirm LC/SKBDN • Nostro Account • Foreign Exchange • Today, Tom, and Spot • Forward Transaction • Swap Transaction • Penempatan Dana • Money Market Account • Deposit on Call • Billateral Trade Financing • Risk Participation and Forfaiting • Custodian Services • Bankers Acceptance • Derivatif • Interest Rate Swap • Option • Cross Currency Swap • Bank Notes • Plain Vanilla Option • Repo Obligasi/Reverse Repo TREASURY • Foreign Exchange »» Today, Tom, and Spot • Forward Transaction • Penempatan Dana »» Money Market Account »» Deposit on Call • Derivatif »» Interest Rate Swap »» Option »» Cross Currency Swap • Bank Notes • Plain Vanilla Option • Repo Obligasi/Reverse Repo PT Bank Negara Indonesia (Persero) Tbk
  67. Company Profile PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 67
  68. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk REGIONAL BUSINESS MAP Currently BNI has 1 (one) Head Office, 17 Regional Offices and 2,245 office networks consisting of branch offices, sub-branch offices, overseas offices, cash offices and other office networks such as payment points, mobile cash and O-Branch. In addition, BNI also has Agen46 in all provinces in Indonesia. MEDAN REGION »» »» »» »» »» »» 19 Branch Office 68 Sub-branch Office 39 Cash Offices 8 Payment Point 1.115 ATM 21 O-Branch BANJARMASIN REGION »» »» »» »» »» »» PADANG REGION »» »» »» »» »» »» 21 Branch Office 70 Sub-branch Office 59 Cash Offices 5 Payment Point 1.438 ATM 21 O-Branch PALEMBANG REGION 13 Branch Office 73 Sub-branch Office 29 Cash Offices 9 Payment Point 1.037 ATM 13 O-Branch »» »» »» »» »» »» 15 Branch Office 74 Sub-branch Office 32 Cash Offices 6 Payment Point 1.015 ATM 15 O-Branch SEMARANG REGION »» »» »» »» »» »» JAKARTA KEMAYORAN REGION »» »» »» »» »» »» 8 Branch Office 76 Sub-branch Office 50 Cash Offices 9 Payment Point 1.530 ATM 6 O-Branch BANDUNG REGION »» »» »» »» »» »» 15 Branch Office 76 Sub-branch Office 42 Cash Offices 11 Payment Point 1.440 ATM 16 O-Branch JAKARTA SENAYAN REGION »» »» »» »» »» »» 7 Branch Office 86 Sub-branch Office 46 Cash Offices 8 Payment Point 956 ATM 3 O-Branch JAKARTA KOTA REGION »» »» »» »» »» »» 6 Branch Office 78 Sub-branch Office 40 Cash Offices 4 Payment Point 862 ATM 4 O-Branch 11 Branch Office 38 Sub-branch Office 38 Cash Offices 8 Payment Point 805 ATM 12 O-Branch YOGYAKARTA REGION »» »» »» »» »» »» 15 Branch Office 56 Sub-branch Office 44 Cash Offices 22 Payment Point 1.103 ATM 15 O-Branch SURABAYA REGION »» »» »» »» »» »» 12 Branch Office 77 Sub-branch Office 44 Cash Offices 10 Payment Point 1.286 ATM 11 O-Branch MALANG REGION »» »» »» »» »» »» 14 Branch Office 43 Sub-branch Office 27 Cash Offices 11 Payment Point 1.029 ATM 14 O-Branch JAKARTA BSD REGION 68 »» »» »» »» »» »» 9 Branch Office 71 Sub-branch Office 48 Cash Offices 6 Payment Point 1.816 ATM 7 O-Branch Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  69. Company Profile Region Office Branch Office Sub-branch Office Cash Offices Payment Point O-Branch ATM LUAR NEGERI MANADO REGION »» »» »» »» »» 11 Branch Office 43 Sub-branch Office 12 Cash Offices 544 ATM 11 O-Branch »» 8 ATM PAPUA REGION »» »» »» »» »» 5 Branch Office 18 Sub-branch Office 19 Cash Offices 223 ATM 5 O-Branch MAKASAR REGION »» »» »» »» »» »» 11 Branch Office 71 Sub-branch Office 29 Cash Offices 10 Payment Point 1.042 ATM 12 O-Branch BNI OFFICE NETWORKS IN 2014 - 2018 Type of Office DENPASAR REGION »» »» »» »» »» »» 9 Branch Office 91 Sub-branch Office 7 Cash Offices 1 Payment Point 1.062 ATM 10 O-Branch Head Office Region Office Branch Overseas Offices 2018 2017 2016 2015 2014 1 1 1 1 1 17 17 17 15 15 6 6 6 6 5 201 200 196 169 168 1.109 1.085 948 911 912 Cash Offices 605 595 623 545 495 Payment Point 128 130 110 105 92 18.311 17.966 17.056 16.071 14.071 196 122 86 81 78 Branch Office Sub-branch Office Others Office Network ATM O-Branch PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 69
  70. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk The BNI implemented 8 (eight) Digital Branch outlet units in 2017, with an additional 6 (six) outlets and 1 (one) Digital Branch devices in 2018. D-Branch Network Per Region in 2018 No. 70 Outlet Name Branch Office Location Year Of Development KC Jl. Perintis Kemerdekaan Bandung Mall 23 Paskal Bandung, Jawa Barat 2017 KC UGM Yogyakarta Hartono Mall Yogyakarta, D.I. Yogyakarta 2017 1. D-Branch 23 Paskal 2. D-Branch Hartono Mall 3. D-Branch Grand City Mall KC Surabaya Grand City Mall Surabaya, Jawa Timur 2017 4. D-Branch Plaza Medan Fair KC Medan Plaza Medan Fair, Sumatera Utara 2017 5. D-Branch Bandara Ngurah Rai KC Renon Bandara Ngurah Rai, Denpasar, Bali 2017 6. D-Branch Gandaria City KC Pasar Mayestik Gandaria City, Jakarta 2017 7. D-Branch Pacific Place KC Melawai Raya Pacific Place, Jakarta 2017 8. D-Branch Kota Kasablanka KC Tebet Kota Kasablanka , Jakarta 2017 9. D-Branch Pejompongan KC Mega Kuningan Menara BNI Pejompongan, Jakarta 2018 10. D-Branch Stasiun BNI City KC Mega Kuningan Stasiun BNI City, Jakarta 2018 11. D-Branch Pondok Indah Mall 2 KC Fatmawati Pondok Indah Mall 2, Jakarta 2018 12. D-Branch Nipah Mall Makassar KC Makassar Nipah Mall Makassar, Sulawesi Selatan 2018 13. D-Branch Manado Town Square KC Manado Manado Town Square Sulawesi Utara 2018 14. D-Branch Ciputra World KC Surabaya Ciputra World Surabaya, Jawa Timur 2018 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  71. Company Profile PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 71
  72. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk ORGANIZATION STRUCTURE In line with the Bank’s business development, BNI’s organizational structure has undergone several changes. The last organizational change took place on November 09, 2018, based on the letter KEPDIR No.KP/384/DIR/R dated November 09, 2018. THE BOARD OF COMMISSIONER MANAGING DIRECTOR CORPORATE BANKING Putrama Wahju Setyawan INTERNAL AUDIT Muhammad Gunawan Putra POLICY GOVERNANCE DIVISION Josdi Situmorang LOCAL & CORPORATE MULTINATIONAL COMPANY 1 DIVISION Benny Yoslim CORPORATE SECRETARY & COMMUNICATION DIVISION Kiryanto* SUBSIDIARIES DEVELOPMENT DIVISION Teddy Erdius E. Saputra MANAGING DIRECTOR SMALL BUSINESS & NETWORK MANAGING DIRECTOR RETAIL BANKING Catur Budi Harto Tambok P. Setyawati MANAGING DIRECTOR TREASURY & INTERNATIONAL BANKING Rico Rizal Budidarmo SMALL BUSINESS 1 DIVISION Edy Awaludin CONSUMER PRODUCT MANAGEMENT DIVISION J. Donny Bima Herjuno TREASURY DIVISION Legendariah Bur Rasuanto LOCAL & CORPORATE MULTINATIONAL COMPANY 2 DIVISION Warda Nadjamuddin SMALL BUSINESS 2 DIVISION Bambang Setyatmojo CONSUMER SALES DISTRIBUTION DIVISION Hermita INTERNATIONAL BANKING DIVISION Eko Setyo Nugroho STATEDOWNED & ENTERPRISE GOVERNMENT INSTITUTION DIVISION A.A.G Agung Dharmawan CHANNEL MANAGEMENT DIVISION Fauzi CARD BUSINESS DIVISION Okki Rushartomo Budiprabowo PENSION FUND UNIT Saktimaya Murti SERVICE QUALITY UNIT Grace Daturante Pong Samma E-BANKING DIVISION Anang Fauzie SYNDICATION BUSINESS UNIT Rommel TP. Sitompul BNI CONTACT CENTER UNIT Yohanes Iwan Kurniawan MARKETING COMMUNICATION DIVISION Indomora Harahap REGIONAL BNI MULTIFINANCE BNI SYARIAH BNI LIFE INSURANCE BNI REMITTANCE BNI SECURITIES 72 *Served until 28 January 2019. Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  73. Company Profile ANNOTATION Supervision Line Coordination Line Communication & Information Delivery Line GENERAL MEETING OF SHAREHOLDERS (GMS) Board of Directors Committee RISK MONITORING COMMITTEE NOMINATION & REMUNERATION COMMITTEE INTEGRATED GOVERNANCE COMMITTEE Revrisond Baswir Ari Kuncoro Revrisond Baswir AUDIT COMMITTEE Pataniari Siahaan THE BOARD OF DIRECTORS & SEVP PRESIDENT DIRECTOR Achmad Baiquni VICE PRESIDENT DIRECTOR Herry Sidharta MANAGING DIRECTOR INSTITUTIONAL RELATION Adi Sulistyowati MANAGING DIRECTOR RISK MANAGEMENT Bob Tyasika Ananta MANAGING DIRECTOR FINANCE (CFO) Anggoro Eko Cahyo MANAGING DIRECTOR INFORMATION TECHNOLOGY & OPERATION Dadang Setiabudi IT SOLUTION & SECURITY DIVISION Muhammad Faisal Jazuli MANAGING DIRECTOR COMPLIANCE Endang Hidayatullah INSTITUTIONAL RELATION DIVISION G.C. Koen Yulianto ENTERPRISE RISK MANAGEMENT DIVISION Aryanto Purwadi TRANSACTIONAL BANKING SERVICES DIVISION Teddy Wishadi CORPORATE CREDIT RISK DIVISION Retno Murwani FINANCIAL BUDGETING & CONTROL DIVISION Putu Bagus Kresna WEALTH MANAGEMENT DIVISION Neny Asriani MIDDLE & SMALL CREDIT RISK DIVISION Babas Bastaman PROCUREMENT & FIXED ASSETS DIVISION Dandy Perwandi Sjamsudin BANKING OPERATION DIVISION Ahmad Fikri HUMAN CAPITAL DIVISION Efita Praharani CONSUMER LOAN PROCESSING & COLLECTION DIVISION Moh. Hisyam DATA MANAGEMENT DIVISION Sigit Eri Soelistianto E-CHANNEL UNIT Tennisiana Soekesi BNI CORPORATE UNIVERSITY Wicaksono Sarwo Edi STRATEGIC PLANNING DIVISION Mucharom CREDIT ADMINISTRATION DIVISION Anang Basuki PT Bank Negara Indonesia (Persero) Tbk  IT OPERATION DIVISION Afthon Shodaq Noor SEVP COMMERCIAL BANKING SEVP REMEDIAL & RECOVERY Ronny Venir Yuddy Renaldi MIDDLE BUSINESS DIVISION COMPLIANCE DIVISION Risang Widoyoko LEGAL DIVISION Johansyah CORPORATE REMEDIAL & RECOVERY DIVISION Iwan Setiawan Eko Setiawan CUSTOMER ANALYSIS & PORTFOLIO MANAGE MENT UNIT Syafrudin MIDDLE & SMALL REMEDIAL & RECOVERY DIVISION Julius D. Aritonang BOARD OF DIRECTORS COMMITTEE INTEGRATED RISK MANAGEMENT COMMITTEE CREDIT COMMITTEE PRODUCT COMMITTEE RISK MANAGEMENT & CAPITAL COMMITTEE PERFORMANCE MANAGEMENT COMMITTEE HUMAN CAPITAL COMMITTEE TECHNOLOGY MANAGEMENT COMMITTEE CREDIT POLICY & PROCEDURE COMMITTEE Adapting Quickly to Face Change 73
  74. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk VISION, MISSION AND CORPORATE CULTURE TO BE A FINANCIAL INSTITUTION WITH SERVICE AND PERFORMANCE EXCELLENCE VISION An explanation of the Vision follows: “Financial Institutions” • Customer financial services needs will become more complex, and will cover financing, transactions, sharia, investments, insurance, and alternative financing other than loans. • The increasingly complex customer needs are also influenced by information technology development that causes changes in customer preferences. The convenience of information technology has led customers to need easy and fast products and financial services. At the same time, the financial institution must manage the emerging risks appropriately. The impact of changes in customer preferences means the financial services industry must be increasingly integrated with the non-financial services industry. • There are policies for financial service industry players to implement integrated governance in the conglomerates involving financial service institutions. These aim to improve the effectiveness and efficiency of monetary and fiscal policies and the supervision of the financial services industry. 74 Adapting Quickly to Face Change “Excellence in Service” • Service is the main value offered to customers of financial service providers. • Superior services be added value for customers choosing financial institutions. • Financial institutions services are required to meet all relevant aspects of customer needs so as to make financial institutions as financial lifetime partners, able to provide total financial solutions, including serving the business ecosystems in an integrated manner. “Excellence in Performance” • Financial performance is an indicator of the company’s success in conducting its operations in the form of financial return. Quality financial performance will convince investors, customers, employees, industries that investments and risks are properly managed, generate added value, and grow sustainably. • Superior non-financial performance will provide added value to wider stakeholders. Non-financial performance indicators that can be used include support for government programs such as the financial inclusion or partnership programs, contributions to the environment and communities such as the through sustainable financing or community development, and other non-financial indicators such as the quality and speed of services or operational reach of the financial institutions.. PT Bank Negara Indonesia (Persero) Tbk
  75. Company Profile • To provide excellent services and value-added solutions to all customers and partners by being the primary banking choice • To increase investment value for investors • To create the best working environment for employees to proudly work and actualize oneself • To increase awareness and responsibility to the local community and environment • To become the role model for compliance to laws and regulations, as well as good corporate governance for the industry MISSION A description of the BNI Mission is as follow: 1. To provide excellent services and value-added solutions to all customers and partners by being the primary banking choice as described below: a. Providing complete, integrated, quality, reliable, and dependable products / banking services; b. Providing “one stop solution” services for both business and individual customers; c. Providing superior best-in-class products and services; d. Improving customer experience for processes considered critical by customers e. Proactively making adjustments and improvements in accordance with development needs and customer demands for quality products / services offered by BNI. f. Providing convenience for customers when making transactionsi. 2. To increase investment value for investors, as described below: a. Maximum business profitability; b. Sustainable and accountable growth; c. A sound Financial Institution; d. Cost effectiveness. e. Stable share prices and continuing to increaset. 3. To create the best working environment for employees to proudly work and actualize oneself, as described below: a. Providing equal opportunities and an area to increase knowledge, skills, and an assured career path; b. Creating and supporting talent management programs to mold future leaders for both BNI and Indonesia ; c. Providing safe, comfortable, harmonious facilities and working environments to support the goal of PT Bank Negara Indonesia (Persero) Tbk  productivity improvement. 4. To increase awareness and responsibility to the local community and environment, as described below: a. Actively serving the banking needs of all levels of society; b. Actively seeking and entering new businesses in accordance with the latest laws and regulations; c. Actively developing international businesses for business repayments in prospective countries; d. Actively improving the environment and communications quality in line with business development. 5. To become the role model for compliance to laws and regulations, as well as good corporate governance for the industry, as described below: a. Implementing Integrated risk management; b. Accommodating whistle blowers, to protect the company’s and the communities’ interests; c. Active communication between the Company’s management and leaders Senior Leadership actively with to create role models; d. Actively updating rules, regulations, and implementing them in a disciplined and systematic manner, to create a trusted financial institution Adapting Quickly to Face Change 75
  76. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk VISION AND MISSION REVIEW BY THE BOARD OF COMMISSIONERS AND BOARD OF DIRECTORS During the preparation of the BNI Long-Term Corporate Plan 2019-2023, which began in early 2018, a review of the company’s Vision and Mission was carried out. The long-term plan preparation involved all BNI stakeholders, including the Board of Commissioners, Management, subsidiaries, representatives at all levels of employees, and the public, and financial industry experts using surveys, interviews and joint discussions. From the stakeholders’ aspirations, aligned with the latest external and internal conditions, it can be concluded that in the long term BNI is expected to become “To be the Most Profitable Financial Institution in Indonesia”. After considering these aspirations, Management determined that the current BNI Vision and Mission is still very relevant in the long term. In the context of these aspirations, the Vision and Mission is explained in other sections of this Annual Report regarding the Vision and Mission elaboration. The Vision and Mission was officially established in the BNI Long-Term Corporate Plan 2019-2023 and approved in Board of Commissioners Number DK/117 dated October 22, 2018, and then stipulated in the Board of Directors’ Decree Number KP/385/DIR/R dated November 9, 2018. 76 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  77. Company Profile COMPANY CULTURE The BNI Working Culture is called “PRINCIPLE 46” and is the behavioral guidance for BNI People BNI 4 WORKING CULTURE 6 BNI PEOPLE MAIN BEHAVIOURS PROFESSIONALISM Improving the competence and giving the best result. • Increasing Competence and Giving the Best Results INTEGRITY Commit to always be consistent for thoughts, words and deeds based on conscience and belief in essential truth principles. • Honest, Sincere and Heartfelt • Discipline, Consistent and Responsible COSTUMER ORIENTATION Always prioritize customer interests based on mutual respect and synergistic relationships. • Delivering the Best Service Through Synergistic Partnership CONTINUOUS IMPROVEMENT Always seek opportunities and solutions to improve services and performance that exceed Customer expectations. • Always Improving • Creative and Innovative PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 77
  78. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk BOARD OF COMMISSIONERS PROFILES Ari Kuncoro (President Commissioner/Independent Commissioner) Citizenship, Domicile, Age and Educational History Indonesian citizen, domiciled in Jakarta, born in Jakarta in 1962, is currently 56 years old on December 2018. He earned a Bachelor’s degree in Economics from Universitas Indonesia in 1986, and a Master of Art degree from the University of Minnesota, USA in 1990, as well as a PhD, in Economics from Brown University, USA in 1994. He attended the English to Academic Teaching Training in 1992 at Brown University (Universitas Brunensis), giving a Public Lecture for the Regional Finance Course in 2014 at LPEM FEB UI, AACSB Cooperative and Attachment, from 2015 to present from AACSB International Accreditation Institute. In 2018, he actively participated in the 1st Roundtable at the Southeast Asian Economic and Trade Seminar and the CSIS Global Leaders Forum in Washington DC, and the Key Risk Management Challenges Training in 2018 by the Banking Professional Certification Institute Banking Professional Certification Institute (LSPP) in 2017 (Risk Management Certification for Independent Commissioners at a maximum level 2). Concurrent Positions and Affiliated Relationships While serving as President Commissioner of BNI, he has served on the East Asia Economist Association Board since 2013, and as Dean at the Faculty of Economics and Business Universitas Indonesia since 2013. He has no affiliated relationships with members of the Board of Directors, other members of the Board of Commissioners or with the Majority and Controlling Shareholders. Appointment Basis Initial appointment as the President Commissioner of BNI at the Extraordinary General Meeting (EGM) on November 2, 2017, based on EGM the decision deed No. 02 November 2, 2017 and received approval from the Financial Services Authority (OJK) on March 14, 2018. Since April 5, 2018, has been assigned as a Member of the Nomination and Remuneration Committee. Tenure November 02, 2017 - until the closing of the GMS 2020 (First Period). Position History He began his career at the Faculty of Economics and Business at Universitas Indonesia (FEB UI) in 1986 and during his career served as Economics Post Graduate Program Secretary from 1995 to 1998, Vice Dean for Teaching, Education and Community Service from 1998 to 2001. 78 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  79. Company Profile Wahyu Kuncoro Vice President Commissioner Citizenship , Domicile, Age and Educational History Warga Negara Indonesia, berdomisili di Jakarta. Lahir di Surakarta Indonesian citizen, domiciled in Jakarta Born in Surakarta in 1969, is currently 49 years old on December 2018. He earned his Bachelor’s degree in Agriculture from Universitas Sebelas Maret, in 1993 and a Bachelor’s degree in Economics from Universitas YAI in 2003, and then earned a Master’s degree in Management from Universitas Gadjah Mada in 2005. He has Obtained Level 1 Risk Management certification held by the Risk Management Certification Agency (BSMR) in 2016 (Risk Management Certification for Commissioners at a maximum level 2). Position History He began his career in the Finance Ministry in 1996 and throughout his career has served as Assistant Deputy for Services III Business Sector, Ministry of SOE (2013), Assistant Deputy of Banking and Insurance Business, Ministry of SOE (2014), Deputy of Infrastructure Business, (2015), Deputy of Agro Industry and Pharmaceutical Enterprises Ministry of BUMN (2016) and Commissioner of PT Angkasa Pura II (Persero) (2012-2016). PT Bank Negara Indonesia (Persero) Tbk  Concurrent Positions and Affiliate Relations While serving as a BNI Commissioner, he currently serves as Agro & Pharmaceutical Businesses Deputy since 2016. He has no affiliated relationships with members of the Board of Directors and other members of the Board of Commissioners. Appointment Basis First appointed as BNI Commissioner at the General Meeting of Shareholders (GMS) on March 10, 2016 based on GMS Deed No. 8 on March 10, 2016, and received approval from the Financial Services Authority (OJK) on January 25, 2017. At the GMS on March 16, 2017, was appointed as Vice President Commissioner of BNI based on the AGMS deed No. 42 dated March 16, 2017. Since February 14, 2017, has been assigned as a Member of the Nomination and Remuneration Committee. Tenure March 10, 2016 - until the closing of the GMS 2021 (First Period) Adapting Quickly to Face Change 79
  80. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Revrisond Baswir (Independent Commissioner) Citizenship, Domicile, Agie and Educational History Concurrent Positions and Affiliated Relationships Indonesian citizen, domiciled in Yogyakarta Born in Pekanbaru in 1958, is currently 60 years old on December 2018. He received his Bachelor degree in Accounting from Faculty of Economics and Business from Universitas Gadjah Mada, Yogyakarta in 1983, Master of Business Administration from Western Michigan University, USA in 1991 and Doctor of Economics from Universitas Airlangga, Surabaya in 2011. He actively participated in the Executive Risk Management Refreshment Program training and attended the “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” seminar in 2018. He has Obtained Level 2 Risk Management certification held by the Risk Management Certification Agency (BSMR) in 2016 (Risk Management Certification for Independent Commissioners at a maximum level 2). While serving as an Independent Commissioner at BNI, he does not any concurrent positions in other companies or institutions. He has no affiliated relationships with members of the Board of Directors and other members of the Board of Commissioners, or with the Majority and Controlling Shareholders. Position History He began his career as a Lecturer at FEB UGM in 1983, During his career he served as Expert Staff for the Ministry of Human Rights of the Republic of Indonesia (2000), Expert Staff for the Regional Representative Council (2005), Center Head for Populist Economics Studies UGM (2005-2007 and 2013-2014), Public Policy Committee Member at the Ministry of SOEs (2006-2011 and 2015-2016), Commissioner and Audit Committee Chairman for PTPN XIII, Pontianak (2008-2013), Commissioner for PTPN VIII, Bandung (20132014), Commissioner and Audit Committee Chairman for PTPN XI, Surabaya (2014-2015). 80 Adapting Quickly to Face Change Appointment Basis Appointed as BNI Commissioner at the General Meeting of Shareholders (GMS) dated March 17, 2015 based on GMS Deed No. 34 dated March 17, 2015, and received approval from the Financial Services Authority (OJK) on June 24, 2015. In the GMS dated March 10, 2016, was appointed Independent Commissioner, and received OJK approval on January 25, 2017, Since June 24, 2015 has been assigned as a Nomination and Remuneration Committee Member. Additionally, on February 14, 2017 and March 30, 2017, was assigned as Risk Monitoring Committee Chairman, and Integrated Governance Committee Chairman. Tenure March 10, 2016 - until the closing of the GMS 2021 (First Period) PT Bank Negara Indonesia (Persero) Tbk
  81. Company Profile Pataniari Siahaan (Independent Commissioner) Citizenship, Domicile, Age and Educational History Indonesian citizen, domiciled in Jakarta Born in Balige in 1946, is currently 72 years old on December 2018. He obtained his Bachelor of Engineering degree in civil engineering from Universitas Trisakti in 1978, and a Bachelor of Engineering degree in civil engineering transportation from Universitas Krisnadwipayana in 2006, then obtained his Master of Law degree from Universitas Trisakti in 2007, and a Doctorate degree in Law from Universitas Trisakti in 2011. He actively participated in the Executive Risk Management Refreshment Program training in Frankfurt & Bern, Germany and attended an “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” seminar in 2018. He has Obtained Level 2 Risk Management certification held by the Risk Management Certification Agency (BSMR) in 2016 (Risk Management Certification for Independent Commissioners at a maximum level 2). Position History He began his career in the House of Representatives / People’s Consultative Assembly in 1999 and throughout his career he has served as the Chairman of the MPR RI Decision Socialization Team in the 1945 Constitution, the Legislative Leaders of the House of Representatives and various positions of the chairmen and members of the DPR / MPR RI. PT Bank Negara Indonesia (Persero) Tbk  Concurrent Positions and Affiliated Relationships While serving as an Independent Commissioner at BNI, he is currently a Member of the MPR-RI Assessment Institute from 2015-present, Editorial Board of the Prioris Law Journal from 2013- present, and Lecturer at Universitas Trisakti Faculty of Law from 2011- present. He has no affiliated relationships with either the members of the Board of Directors and other members of the Board of Commissioners or with the Majority and Controlling Shareholders. Appointment Basis First appointed as Commissioner of BNI at the Annual General Meeting of Shareholders (AGMS) dated March 17, 2015 based on GMS Deed number 34 on March 17, 2015, and received approval from the Financial Services Authority (OJK) on June 25, 2015. Later in the GMS held on March 10, 2016, he was appointed Independent Commissioner based on AGMS deed No. 8 dated March 10, 2016 and received approval from OJK on January 25, 2017. On June 25, 2015 was assigned as a Member of the Nomination and Remuneration Committee. On March 30, 2017 was assigned as Chairman of the Audit Committee. Tenure March 10, 2016 - until the closing of the GMS 2021 (First Period) Adapting Quickly to Face Change 81
  82. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Ahmad Fikri Assegaf (Independent Commissioner) Citizenship, Domicile, Age and Educational History Indonesian citizen, domiciled in Jakarta, Born in Jakarta in 1968, is currently 50 years old on December 2018. He graduated from the Universitas Indonesia in 1991, and graduated with a Master’s Degree in Law from Cornell Law School, Ithaca, New York in 1994. He actively participated in the “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” Seminar in 2018. He has Obtained Level 2 Risk Management certification held by the Banking Professional Certification Institute (LSPP) in 2017 (Risk Management Certification for Independent Commissioners at a maximum level 2). Position History He began his career as a Lawyer in a Law Firm in Jakarta in 1993. In 2000 he established www,hukumonline,com, the largest legal portal in Indonesia. Then, in 2001 he established Law Firm Assegaf, Hamzah & Partners. He served as Managing Partner at Assegaf Hamzah & Partner (2008-2016), Supervisory Board Member, Kemayoran Complex Management Center (2015- 2017). Concurrent Positions and Affiliated Relationships While serving as an Independent Commissioner at BNI, he currently serves as Vice Chairman of the Regional Management Council Rajah Tann Asia (2016-present), and Co-Managing Partner of Assegaf Hamzah & Partners (2017 - present). He also serves as a Member of the Kemayoran Complex Management Center Supervisory Board (2015-2020), Member of the Judicial Commission Member Selection Committee (2015-present) and Honorary Board Member of the Capital Market Legal Consultants Association (2015-2018). He has no affiliated relationships with either the members of the Board of Directors and other members of the Board of Commissioners or with the Majority and Controlling Shareholders. Appointment Basis First appointed as Commissioner of BNI at the Annual General Meeting of Shareholders (AGMS) on March 16, 2017 based on GMS Deed No. 42, dated March 16, 2017 and received approval from the Financial Services Authority (OJK) on July 19, 2017. On July 31, 2017 was assigned as a Member of the Audit Committee, since April 5, 2018 was assigned as Chairman of the Nomination and Remuneration Committee. Tenure March 16, 2017 - until the closing of the GMS 2022 (First Period) 82 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  83. Company Profile Sigit Widyawan (Independent Commissioners) Citizenship, Domicile, Age and Educational History Indonesian citizen, domiciled in Solo. Born in Wonogiri in 1965, currently 53 years old as of December 2018. He earned a Bachelor’s degree in Economics from Universitas Negeri Sebelas Maret in March 1988, a Master’s degree in Accounting from Universitas Indonesia in 2001. He actively participated in the “Anti-Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” Seminar, and the Key Risk Management Challenges training in 2018. He has Obtained Level 2 Risk Management certification held by the Banking Professional Certification Institute (LSPP) in 2018 (Risk Management Certification for Independent Commissioners at a maximum level 2). Position History He started his career at PT Wijaya Karya (Persero) as a finance staff in the Trade Division in 1989 and during his career has served as Head of Taxation at PT Wijaya Karya (Persero) Concrete Products Division (1994 - 1997), Head of Finance at PT Wijaya Karya Beton (1997 - 2001), Finance Director at Roda Jati Grup (2002 - 2013), Director at PT Roda Pembangunan Jaya (2003 - 2015), and Independent Commissioner at PT Jasamarga (Persero) Tbk (2015 - 2018). PT Bank Negara Indonesia (Persero) Tbk  Concurrent Positions and Affiliated Relationships While serving as an Independent Commissioner at BNI, he currently does not have any concurrent positions in other companies or institutions. On September 13, 2018, was assigned as a Member of the Nomination and Remuneration Committee. He has no affiliations with members of the Board of Directors or other members of the Board of Commissioners. Appointment Basis Initial appointment as a BNI Independent Commissioner at the AGMS dated March 20, 2018 based on the AGMS Minutes No. 37 dated March 20, 2018, and received approval from the Financial Services Authority (OJK) on September 7, 2018. Since September 13, has been assigned as a member of the Nomination and Remuneration Committee. Tenure March 20, 2018 - until the closing of the GMS 2023 (First Period) Adapting Quickly to Face Change 83
  84. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Bistok Simbolon (Commissioner) Citizenship, Domicile, Age and Educational History Concurrent Positions and Affiliated Relationships Indonesian citizen, domiciled in Jakarta, Born in Tapanuli Utara in 1956, is currently 62 years old on December 2018. He earned a Bachelor of Law degree from Universitas Sumatera Utara, in 1984 and a Master of Economics degree from Universitas Indonesia in 2004. He actively participated in Key Risk Management Challenges training in 2018 and attended the “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” Seminar in 2018. He has Obtained Level 1 Risk Management certification held by the Banking Professional Certification Institute (LSPP) in 2017 (Risk Management Certification for Commissioners at a maximum level 2). While serving as a Commissioner at BNI, he currently also serves as Special Staff of the Cabinet Secretariat since February 2017. He has no affiliated relationships with members of the Board of Directors, other members of the Board of Commissioners Position History He began his career in the Cabinet Secretariat since 1986 and throughout his career he served as Head of the Bureau of Politics, Defense, Ratification and Legal Issues of the Cabinet Secretariat (2006-2011), Deputy Secretariat of the Cabinet on Politics, Law and Security (2011-2015) Deputy Cabinet Secretary (2015-January 2017). 84 Adapting Quickly to Face Change Appointment Basis Appointed as Commissioner of BNI at the General Meeting of Shareholders (AGM) dated January 12, 2016 based on the EGMS Deed number 01 dated January 12, 2016, and received approval from the Financial Services Authority (OJK) dated May 10, 2016. On May 10, 2016 was assigned as a Member of the Nomination and Remuneration Committee. On February 14, 2017 was assigned as a Member of the Risk Monitoring Committee. Tenure January 12, 2016 - until the closing of the GMS 2021 (First Period). PT Bank Negara Indonesia (Persero) Tbk
  85. Company Profile Joni Swastanto (Commissioner) Citizenship, Domicile, Age and Educational History Concurrent Positions and Affiliated Relationships Indonesian citizen, domiciled in Jakarta, Born in Yogyakarta in 1956, is currently 62 years old on December 2018. He earned a Bachelor of Economics from Universitas Gadjah Mada, Yogyakarta in 1981 and a Master’s Degree in Economics from Colorado State University, USA in 1985, and a Doctorate in Economics from Universitas Indonesia in 2007. He actively participated in Key Risk Management Challenges training in 2018 and attended the “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” Seminar in 2018. He has Obtained Level 1 Risk Management certification held by the Banking Professional Certification Institute (LSPP) in 2015 and a Refresher in 2017 (Risk Management Certification for Commissioners at a maximum level 2). While serving as a member of the Board of Commissioners at BNI, he currently does not have any concurrent positions in other companies or institutions. He has no affiliations with the members of the Board of Directors or other members of the Board of Commissioners. Position History He served as Director of the Bank 3 Supervision Department at Bank Indonesia (2008), Director of the Banking Information and Licensing Department at Bank Indonesia (2008-2011), Semarang Chief Representative at Bank Indonesia (2011-2013), Head of the Banking Information and Licensing Department at Bank Indonesia (2013), Head of the Banking Licensing and Information Department at the Financial Services Authority (2013 - 2015), Deputy Commissioner of Strategic Management IIB at the Financial Services Authority (June 2015-2016). PT Bank Negara Indonesia (Persero) Tbk  Appointment Basis First appointed as BNI Commissioner at the Extraordinary General Shareholders’ Meeting on March 10, 2016 based on AGMS Deed No. 8 dated March 10, 2016, and received approval from the Financial Services Authority (OJK) on April 20, 2016. On April 20, 2016 was assigned as a Member of the Nomination and Remuneration Committee. On February 14, 2017, he was assigned as a member of the Risk Monitoring Committee, and on September 14, 2017 was assigned as a Member of Integrated Governance. Tenure March 10, 2016 - until the closing of the GMS 2021 (First Period) Adapting Quickly to Face Change 85
  86. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Marwanto Harjowiryono (Commissioner) Kewarganegaraan, Domisili, Usia dan Riwayat Pendidikan Indonesian citizen, domiciled in Jakarta, Born in Yogyakarta in 1959, is currently 59 years old on December 2018. He earned a Bachelor’s degree of Economics degree from Universitas Gadjah Mada in 1983, and a Master of Arts degree from Vanderbilt University, USA in 1991, and a Doctorate degree in Public Policy from Universitas Gadjah Mada in 2009. He attended A Three-day Training and Directorship Certification program for Commissioners and Directors at the Ministry of SOEs in Jakarta in 2007, and Executive Education Training Programs: Senior Leadership Program, University of Melbourne in Australia in 2011, and Leadership Decision Making Training, Harvard Kennedy School, USA in 2013, and various short courses related to Fiscal Policy at IMF, World Bank and at Harvard University. In 2018, he actively participated in the Executive Risk Management Training Refreshment Program in Germany and the “Key Risk Management Challenges in 2018” Training in Makassar. He has Obtained Level 1 Risk Management certification held by the Banking Professional Certification Institute (LSPP) in 2017 (Risk Management Certification for Commissioners at a maximum level 2). Executive Director, Asian Development Bank (2009- 2011) General Fiscal Balance, Ministry of Finance (2011-2013). Concurrent Positions and Affiliated Relationships While serving as a BNI Commissioner, he currently has served as Director General for Treasury at the Ministry of Finance since 2013. He has no affiliated relationships with members of the Board of Directors and other members of the Board of Commissioners. Appointment Basis First appointed as Commissioner of BNI at the General Meeting of Shareholders (GMS) on March 16, 2017 based on GMS Deed No. 42, and obtained approval from the Financial Services Authority (OJK) on March 16, 2017. On July 31, 2017 was assigned as a Member of Nomination and Remuneration Committee. Tenure March 16, 2017 - until the closing of the GMS 2021 (First Period) Position History He began his career in the Ministry of Finance in 1983 and during his career has served as the Budget Analysis Bureau Head, Ministry of Finance (19982001), Foreign Cooperation Bureau Head, Ministry of Finance (2003-2004), Public Relations Bureau Head, (2004-2006), Executive Board Head, and the Bureaucracy Reform Team Deputy Head, Ministry of Finance (2007-2009), Expert Staff for the Minister of Finance of State Expenditure (2006-2009). 86 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  87. Company Profile BOARD OF DIRECTORS PROFILE Achmad Baiquni (President Director) Kewarganegaraan, Domisili, Usia dan Riwayat Pendidikan Concurrent Positions and Affiliated Relationships Indonesian citizen, domiciled in Jakarta, Born in Surabaya in 1957, is currently 61 years old, He earned a Bachelor of Economics degree in Development Studies from Universitas Padjadjaran, in 1982 and a Master of Business Management from Asian Institute of Management, Makati, Philippines in 1992. Actively participated in the Risk Management Refresher Program training held by BARa Risk Forum in 2017, Discovery and Dream workshop in the framework of compiling the BNI Corporate Plan 2019-2023 held by Bank BNI and McKinsey, and followed the Compliance Anti-Money Laundering and Prevention of Terrorism Funding Forum in Financial Services Sector held by Bank BNI. He has Obtained Risk Management certification in the Executive Program held by the Risk Management Certification Agency (BSMR) in 2006 and a Refresher in 2017. While serving as President Director of BNI, he currently does not hold concurrent positions either in the Company or other Institutions, He has no affiliated relationships with the other members of the Board of Directors and members of the Board of Commissioners. Appointment Basis Appointed as President Director of the Company on March 17, 2015, based on AGMS decision deed No. 34 on March 17, 2015 and received approval from the Financial Services Authority after a Fit and Proper Test based on OJK Letter No. SR-63/D.03/2015 April 16, 2015. Tenure March 17, 2015 until GMS 2020 close (First Period). Position History He began his career in BNI in 1984 and throughout his career has served as Consumer Director of PT Bank Negara Indonesia (Persero) Tbk (2003-2006), Corporate Director of PT Bank Negara Indonesia (Persero) Tbk (2006-2008), Business Director Small and Medium Enterprises and Sharia PT Bank Negara Indonesia (Persero) Tbk (20082010), Finance Director of PT Bank Rakyat Indonesia Tbk (2010-2015). PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 87
  88. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Herry Sidharta (Vice President Director) Citizenship, Domicile, Age and Educational History Indonesian citizen, domiciled in Jakarta Born in Yogyakarta in 1957, is currently 61 years old on December 2018, He earned a Bachelor of Economics degree in Financial Management from Universitas Pancasila Jakarta, in 1982 and a Master of Business Administration from Rensselaer Polytechnic Institute, New York, USA in 1995. He attended training in the Discovery and dream workshop for the BNI 2019-2023 Corporate Plan, the Design Workshop for the BNI 20192023 Corporate Plan from BNI and McKinsey, book launch and review “Turbulence Sport in Indonesia” organized by the Ministry of Youth and Sports, and attended Workshop Delivery for the BNI 2019-2023 corporate plan, Digital Leadership forum, BNI Q2 2018Business Meeting, APU PPT Refreshment, Corporate Governance Perception Index held by BNI, Speakers in the / Pancasila Festival held by BSMR and BNI in 2018. He has Obtained Level 5 Risk Management certification held by the Banking Professional Certification Institute (LSPP) in 2015 and a Refresher in 2017. Perum Jamkrindo (2013-2014), Director of Human Resources and General Perum Jamkrindo (2014-2015), Corporate Director of PT Bank Negara Indonesia (Persero)Tbk (20152017). Concurrent Positions and Affiliated Relationships While serving as Director of BNI, he currently does not hold concurrent positions either in the Company or other Institutions, He has no affiliated relationships with the other members of the Board of Directors and members of the Board of Commissioners. Appointment Basis Appointed as Vice President Director of the Company on March 17, 2015, based on AGMS decision deed No. 34 dated March 17, 2015. Tenure March 17, 2015 until GMS 2022 close (First Period). Position History He started his career in BNI in 1983 and throughout his career has served as Corporate Leader (2008-2009), Leader of Medium Enterprises (2009-2010), Head of Small Business Division of PT Bank Negara Indonesia Tbk (2010), Director Finance Perum Jamkrindo (2011-2013), Director of Operations 88 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  89. Company Profile Putrama Wahju Setyawan (Director of Corporate Business) Citizenship, Domicile, Age and Educational History Indonesian citizen, domiciled in Bekasi, Born in Yogyakarta in 1969, is currently 49 years old on December 2018. He graduated with a Bachelor degree in Forestry from Universitas Gadjah Mada in 1994 and a Master of Management Accounting from Universitas Gadjah Mada in 1996. In 2018 he actively participated in non-formal education, including the Discovery and dream workshop training in the preparation of the BNI Corporate Plan 2019-2023 organized by the Company and McKinsey. He has Obtained Level 5 Risk Management Certification held by the Risk Management Certification Agency (BSMR) in 2016 and a Refresher in 2017 in 2018. Position History He started his career in BNI in 1998 and during his career has served as Corporate Rescue and Settlement Division Head of PT Bank Negara Indonesia (Persero) Tbk (2011-2014), BUMN and Government Institution Division Head of PT Bank Negara Indonesia Tbk (Persero)Tbk (2014 - 2015), Commercial and Small Business Rescue and Settlement Division Head of PT Bank Negara Indonesia (Persero)Tbk (2015 – 2016), and Medium Business Senior Executive Vice President (SEVP) of PT Bank Negara Indonesia (Persero) Tbk (2016). PT Bank Negara Indonesia (Persero) Tbk  Concurrent Positions and Affiliated Relationships While serving as Director of BNI, he currently does not hold concurrent positions either in the Company or other Institutions, He has no affiliated relationships with the other members of the Board of Directors and members of the Board of Commissioners. Appointment Basis First appointed as BNI Medium Business Director on March 10, 2016, based on the AGMS decision deed No. 8 dated March 10, 2016 and received approval from the Financial Services Authority after a Fit and Proper Test based on OJK Letter No. SR-121/D.03/2016 dated July 15, 2016. Tenure March 10, 2016 until GMS 2021 close (First Period). Adapting Quickly to Face Change 89
  90. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Adi Sulistyowati (Director of Institutional Relations) Citizenship, Domicile, Age and Educational History Indonesian citizen, domiciled in Jakarta Born in Demak on 13th of 1964, is currently 54 years old, He received his Bachelor degree in Agronomy from Institut Pertanian Bogor and a Master of Management degree from Prasetya Mulya Management College in 2002. Actively participating in training including the Discovery and dream workshop in the framework of compiling the BNI Corporate Plan 2019-2023 organized by the McKinsey Company, and participated in the National Startup Agritech Conference 2018 held by the Institut Pertanian Bogor Alumni Association (IPB) in 2018. He has Obtained Level 5 Risk Management certification held by the Risk Management Certification Agency (BSMR) in 2016. Position History He began his career at PT Bank Rakyat Indonesia (Persero)Tbk, and throughout his career served as Deputy Head of Credit Card Division of PT Bank Rakyat Indonesia Tbk (2011-2013), Regional Leader of Banjarmasin PT Bank Rakyat Indonesia Tbk (2013- 2014), Head of Mass Banking Division of PT Bank Rakyat Indonesia (Persero) Tbk (2014-2015), Senior Executive Vice President of Network and Services of PT Bank Rakyat Indonesia Tbk (2015-2016), and Director of Commercial Funding, Digital Banking & Distribution PT Bank Tabungan Negara (2016-2017). 90 Adapting Quickly to Face Change Concurrent Positions and Affiliated Relationships As well as serving as Director of BNI, he is currently the Chairman of the Certified Wealth Manager’s Association since April 25, 2017, He has no affiliated relationships with the other members of the Board of Directors and members of the Board of Commissioners. Appointment Basis Appointed as BNI Director on March 16, 2017, based on AGMS decision deed No. 57 on July 25, 2017, based on AGMS decision deed No. 42 dated March 16, 2017 and received approval from the Financial Services Authority after a Fit and Proper Test based on OJK Letter No. KEP-136/D.03/2017 dated July 19, 2017. Tenure March 16, 2017 until GMS 2022 close (First Period). PT Bank Negara Indonesia (Persero) Tbk
  91. Company Profile Rico Rizal Budidarmo (Direktur Treasury & International Banking) Citizenship, Domicile, Age and Educational History Indonesian citizen, domiciled in Jakarta Born in Bandung in 1963, is currently 55 years old on December 2018, He earned a Bachelor of Economics degree in Management Economics from Universitas Gadjah Mada, in 1987, and earned a Master of Business Administration (MBA) in Finance & MIS from Stern Business School at New York University in 1996, and earned a Doctorate in Business Management in Artificial Intelligence from Institut Pertanian Bogor in 2010, and earned a Master’s degree in Law from Universitas Gajah Mada in 2017. In 2018, he actively participated in the Discovery and dream workshop training in the preparation of the BNI Corporate Plan 2019-2023 organized by Bank BNI and McKinsey, Treasury Level Advance Certification Training held by the Banking Professional Certification Institute and participating in “Daiwa Investment Conference Tokyo 2018” conference in Tokyo organized by Daiwa Capital Markets America Inc. He has Obtained Level 5 Risk Management Certification held by the Banking Professional Certification Institute (LSPP) in 2012 and a Refresher in 2017. 2014) Director Risk and Compliance of PT Bank Tabungan Negara (2014 - 2015). Concurrent Positions and Affiliated Relationships As well as serving as Director of BNI, he currently serves as Director of Research and Development of Bank’s Risk Management (BaRa), He has no affiliated relationships with the other members of the Board of Directors and members of the Board of Commissioners. Appointment Basis First appointed as BNI Director on March 17, 2015, based AGMS decision deed No. 34 dated March 17, 2015 and received approval from the Financial Services Authority based on Letter No. SR-65/D.03/2015 April 16, 2015. Tenure March 17, 2015 until GMS 2020 close (First Period). Position History He started his career at BRI in 1989 and during his career he served as GM / EVP Risk Management Division of PT Bank Rakyat Indonesia (Persero) Tbk (2009-2013), GM / EVP Treasury of PT Bank Rakyat Indonesia (Persero) Tbk (2013- PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 91
  92. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Anggoro Eko Cahyo (Director of Finance) Citizenship, Domicile, Age and Educational History Indonesian citizen, domiciled in Tangerang. Born in Jakarta in 1969, currently 49 years old as of December 2018. Obtained a degree in Industrial Engineering and Management from Institut Teknologi Indonesia, in 1992 and a Master’s degree in Agribusiness from Institut Pertanian Bogor in 2002. Actively participated in training including the Discovery and Dream Workshop in the framework of Preparing the BNI Corporate Plans for 2019-2023 held by BNI and McKinsey, the Executive Education “Talent Management” Program at Harvard Business School Boston, the Executive Education “Design Thinking Program” Program at Stanford University San Francisco, and participated as a speaker at the Seminar on “Digital Economic Trends: era of Electronic Transactions, Opportunities and Challenges “held by Bisnis Indonesia in 2018, participated in the Focus Group Discussion (FGD) “Digital Economic Challenges in Indonesia” organized by the Republic of Indonesia National Economic and Industrial Committee. Has obtained Level 5 Risk Management certification held by the Banking Professional Certification Institute (LSPP) in 2017. Position History He started his career in BNI in 1996 and during his career has served as Head of Jakarta City Regional Office PT Bank Negara Indonesia (Persero)Tbk (2010-2011), Head of Jakarta BSD Region PT Bank Negara Indonesia Tbk (2011), Network and Services Division Head of PT Bank Negara Indonesia (Persero) Tbk (2011-2012) and Human Capital Division Head of PT Bank Negara Indonesia Tbk (2012-2015). Concurrent Positions and Affiliated Relationships As well as serving as BNI Director, he currently serves as Chairman of the Indonesia Payment System Association (ASPI) since 2016, He has no affiliated relationships with the other members of the Board of Directors and members of the Board of Commissioners. Appointment Basis First appointed as BNI Director on March 17, 2015, based on AGMS Decision Decree No. 53 dated May 27, 2015 and approval from the Financial Services Authority for the Fit and Proper Test based on the Financial Services Authority Letter No. SR-90/D.03/2015 dated May 22, 2015. Tenure March 17, 2015 until GMS 2020 close (First Period) 92 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  93. Company Profile Catur Budi Harto (Director of Small Business and Network) Citizenship, Domicile, Age and Educational History Indonesian citizen, domiciled in Jakarta Born in Purbalingga in 1967, is currently 51 years old on December 2017, Graduated from Universitas Krisnadwipayana University in 1993. Actively participated in training including the Discovery and dream workshop in the preparation of the BNI Corporate Plan 2019-2023 organized by BNI and McKinsey, participated in the Focus Group Discussion (FGD) on “Implementation of superior products in rural areas with the Ministry of Village partnership pattern” organized by the Ministry of Villages, Development of Disadvantaged Areas and Transmigration. She has Obtained Level 5 Risk Management Certification held by the Banking Professional Certification Institute (LSPP) in 2015 and a Refresher in 2017. Position History She started her career in BNI in 1990 and throughout her career served as Regional Head of Jakarta Senayan PT Bank Negara Indonesia (Persero) Tbk (2010-2012) and Network and Service Division Head of PT Bank Negara Indonesia (Persero) Tbk (2012 -2015). PT Bank Negara Indonesia (Persero) Tbk  Concurrent Positions and Affiliated Relationships While serving as Director of BNI, she currently does not hold concurrent positions in other Companies or Institutions, She has no affiliated relationships with the other members of the Board of Directors and members of the Board of Commissioners. Appointment Basis First appointed as BNI Dirctor on March 17, 2015, based on AGMS decision deed No. 34 dated March 17, 2015 and received approval from the Financial Services Authority after a Fit and Proper Test based on OJK Letter No. SR-92/D.03/2015 May 22, 2015. Tenure March 17, 2015 until GMS 2020 close (First Period). Adapting Quickly to Face Change 93
  94. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Bob Tyasika Ananta (Director of Risk Management) Citizenship, Domicile, Age and Educational History Indonesian citizen, domiciled in Jakarta Born in Surakarta in 1963, is currently 55 years old on December 2018. He earned a Bachelor degree in Accounting from Universitas Gajah Mada, in 1986 and a Master of Finance degree from the University of Oregon, USA in 1989. Actively participated in the ASEAN Financial Innovation Network training organized by the ASEAN Financial Innovation, the Discovery and dream workshop in the framework of compiling the BNI Corporate Plan 2019-2023 held by Bank BNI and McKinsey, the Workshop on Early Warning System for Financial Conglomerates organized by the Financial Services Authority, Training Risk Management Refresher Program held by BARa Risk Forum, and the Assessor Refreshment Test held by the Banking Professional Certification Institute (LSPP) in 2018. He has Obtained Level 5 Risk Management certification in 2016 from the Banking Professional Certification Institute (LSPP) and a Refresher in 2017. Concurrent Positions and Affiliated Relationships While serving as BNI Director, he currently serves as Chairman of the Indonesia Change Management Forum (ICMF), He has no affiliated relationships with the other members of the Board of Directors and members Appointment Basis First appointed as BNI Director on March 17, 2015, based on AGMS decision deed No. 34 dated March 17, 2015 and received approval from the Financial Services Authority after a Fit and Proper Test based on OJK Letter No. SR-64/D.03/2015 April 16, 2015. Tenure March 17, 2015 until GMS 2020 close (First Period). Position History He started his career at BNI in 1996 and during his career served as General Manager of BNI Foreign Branch Offices in Hong Kong (2008-2010), International Division Head (20102011), and Strategic Planning Division Head (2011-2015). 94 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  95. Company Profile Endang Hidayatullah (Director of Compliance ) Citizenship, Domicile, Age and Educational History Indonesian citizen, domiciled in Bogor. Born in Sukabumi in 1970, is currently 48 years old on December 2018. He obtained a Bachelor’s degree in Civil Law from Universitas Padjajaran in 1993, Master’s in Marketing Management from STIE Nusantara in 2005. Actively participated in training included the Discovery and Dream Workshop in the framework of compiling the BNI Corporate Plan 2019-2023 organized by BNI and McKinsey , Compliance Anti Money Laundering and Prevention of Terrorism Funding Forum in the Financial Services Sector, the National Convention on Draft Indonesian National Work Competency Standards (RSKKNI) General Banking Division organized by the Financial Services Authority, Workshop on “Legal Issues Issues related to digital economic development in Indonesia “organized by the Business Law and Bankruptcy Forum, and the 2018 International Business Integrity Conference (IBIC) organized by the Corruption Eradication Commission (KPK). He has obtained level 5 Risk Management certification from the Risk Management Certification Agency (BSMR) in 2018. Concurrent Positions and Affiliated Relationships While serving as Director of BNI, he also serves as Chairman of the Banking Compliance Director Communication Forum and Steering Committee in the Indonesian Human Capital Forum. He has no affiliations with the members of the Board of Directors or other members of the Board of Commissioners. Appointment Basis Appointed first as Director of BNI on March 20, 2018, based on AGMS decision deed No. 37 dated March 20, 2018 and received approval from the Financial Services Authority after a Fit and Proper Test based on OJK Letter No. 13/KDK.03/2018 dated July 5, 2018. Tenure March 20, 2018 until GMS 2023 (First Period) Position History Joined BNI in 1996 and has served as Legal Division Deputy Head of PT Bank Negara Indonesia (Persero) Tbk (2012 2015), and Legal Division Head of PT Bank Negara Indonesia (Persero) Tbk (2015 - 2018). PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 95
  96. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Tambok P. Setyawati (Director of Retail Banking ) Citizenship, Domicile, Age and Educational History Born in 1964, domiciled in Jakarta. Born in Jakarta in 1964, is currently 54 years old on December 2018. He gained a Bachelor’s of Agriculture degree in Soil Science from Institut Pertanian Bogor in 1987, a Master’s degree in Accounting Management from the Universitas Indonesia in 1995. He actively participated in the Risk Management Refresher Program training organized by the Banking Professional Certification Institute (LSPP), Discovery and dream workshop for the preparation of the BNI Corporate Plan 2019-2023 organized by Bank BNI and McKinsey, as well as participated in the Bank Indonesia Seminar “Payment Gateway” held by Bank Indonesia in 2018. She has Obtained Level 5 Risk Management certification in 2016 from the Banking Professional Certification Institute (LSPP) and a Refresher in 2017. Concurrent Positions and Affiliated Relationships While serving as BNI Director, he does not hold concurrent positions in other Companies of Institutions. Has no affiliated relationships with the other members of the Board of Directors or members of the Board of Commissioners. Appointment Basis Initial appointment as Director of BNI on March 20, 2018, based on AGMS decision deed No. 37 dated March 20, 2018 and received approval from the Financial Services Authority after a Fit and Proper Test based on OJK Letter No. 11/ KDK.03/2018 dated July 5, 2018. Tenure March 20, 2018 until GMS 2020 close (First Period) Position History Joined BNI in 1996 and served as CEO Region Jakarta Kemayoran PT Bank Negara Indonesia (Persero) Tbk (20152016), and SEVP Digital Banking PT Bank Negara Indonesia (Persero) Tbk (2016). Also served as Finance Director of PT Krakatau Steel (Persero) Tbk (2016-2018). 96 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  97. Company Profile Dadang Setiabudi (Director of Information Technology & Operations) Citizenship, Domicile, Age and Educational History Indonesian citizen, domiciled in Jakarta. Born in Cimahi in 1962, currently 56 years old as of December 2018. Gained a Bachelor of Economics degree in Accounting from STIE Nusantara in 1987 and a Master’s degree in Agribusiness in Soil Science from Institut Pertanian Bogor in 1999. In 2018 , actively participated in the Discovery and dream workshop training in the framework of compiling the BNI Corporate Plan 2019-2023 organized by BNI and McKinsey, the “Oracle Open World” Annual Conference in San Francisco organized by Oracle Corporation, participated in the Irving Fisher Committee International Seminar on Big Data organized by Bank Indonesia, and participated as a speaker at the 2018 IBEX forum held by Perbanas. Obtained level 5 Risk Management certification held by the Risk Management Certification Agency (BSMR) in 2018. Concurrent Positions and Affiliated Relationships While serving as BNI Director, he does not hold concurrent positions in other companies and institutions. Has no affiliated relationships with the other members of the Board of Directors and members of the Board of Commissioners. Appointment Basis Appointed as Director of BNI on March 20, 2018, based on AGMS decision deed No. 37 dated March 20, 2018 and received approval from the Financial Services Authority after a Fit and Proper Test based on OJK Letter Letter No. 12/ KDK.03/2018 dated July 5, 2018. Tenure March 20, 2018 until GMS 2023 (First Period) Position History He began his career at PT Bank Rakyat Indonesia (Persero) Tbk in 1988. During his career he served as Micro Business Network Division Head at PT Bank Negara Indonesia (Persero) Tbk in 2013 and as Director Information Technology at BPJS Kesehatan (2014- 2016). Joined BNI in 2016, and before serving as Director, he served as Information Technology and Digital Banking SEVP at PT Bank Rakyat Indonesia (Persero) Tbk (2016-2018). PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 97
  98. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk SENIOR EXECUTIVE VICE PRESIDENT PROFILE Yuddy Renaldi SEVP Remedial & Recovery Currently 54 years old. Holds a Bachelor’s degree in Economics Accounting from Universitas Trisakti in 1990 and a Master’s degree in Management from STIE IPWI Jakarta. Has obtained level 5 Risk Management certification held by the Risk Management Certification Agency (BSMR). During 2018, actively participated in various training including Discovery and Dream Workshop in the framework of preparing the BNI Corporate Plan 2019-2023 organized by BNI and McKinsey. Appointed as SEVP Remedial & Recovery based on Specific Time Work Agreement No. DIR/298 on May 5, 2017. Ronny Venir SEVP Medium Business Currently 51 years old. Holds a Bachelor’s degree in Animal Husbandry from Universitas Padjajaran in 1993 and a Master’s degree in Agribusiness from Institut Pertanian Bogor in 2003. Started his career at BNI in 1995 and during his career he served as Padang Regional Head at PT Bank Negara Indonesia (Persero) Tbk (2016), Jakarta City Regional Head PT Bank Negara Indonesia (Persero) Tbk (2017) and Head of the Small Business Business Division at PT Bank Negara Indonesia (Persero) Tbk (2018). Appointed as SEVP Medium Business based on Board of Director’s Decree No. KP/146/DIR/R dated April 13, 2018. 98 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  99. Company Profile EXECUTIVE OFFICERS PROFILE Kiryanto Corporate Secretary Currently 54 years old . Obtained a Bachelor’s degree in Government Science from Universitas Gadjah Mada in 1989 and a Master’s degree in Finance from Universitas Indonesia in 2002. Appointed as Corporate Secretary based on Board of Director’s Decree No. KP/114/DIR/R dated April 12, 2017. Appointed Corporate Secretary on April 25, 2016 to January 28, 2019.. Meiliana PGS Head of Corporate Secretary & Communication Division Currently 46 years old. Holds a Master’s degree in Agribusiness from Institut Pertanian Bogor. Appointed as PGS Head of Corporate Secretary & Communication Division based on Board of Director’s Decree No. KP/01.005265/2019/HCT/R dated January 28, 2019. Appointed Temporary Substitute Corporate Secretary on January 29, 2019 to the present. Muhammad Gunawan Putra Head of Internal Control Unit Currently 48 years old. Holds a Bachelor’s degree in Economics in Accounting from Universitas Gajah Mada in 1995, Registered Accountant in 1996 and gained a Master of Business Administration degree in Strategic Management from Universitas Gajah Mada in 2009, and became a Chartered Accountant (CA) from the Association Indonesian Accountant (IAI) in 2015. Appointed as Head of Internal Control Unit based on Board of Director’s Decree No. KP/125/DIR/R dated 21 April 2017. Risang Widoyoko Head of Compliance Division Currently 52 years old. Holds a Bachelor’s degree in Economics and Accountancy from the Faculty of Economics, Accounting Department, Universitas Gadjah Mada in 1992, and a Master’s degree in Management from the Post Graduate Faculty at Universitas Lambung Mangkurat in 2004. Appointed as Head of the Compliance Division based on Board of Director’s Decree No. KP/147/DIR/R dated April 13, 2018. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 99
  100. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Wicaksono Sarwo Edi Head of BNI Corporate University Division Currently 54 years old. Holds a Master’s degree in Finance Management and Banking Universitas Gadjah Mada. Appointed as Head of BNI Corporate University Division based on Board of Director’s Decree No. KP/101/DIR/R dated April 10, 2017. Julius D. Aritonang Head of Commercial Remedial and Recovery Division Currently 47 years old. Holds a Masters degree in Financial Management & Banking from Universitas Indonesia. Appointed as Commercial Remedial and Recovery Division based on Board of Director’s Decree No. KP/147/DIR/R dated April 13, 2018. Iwan Setiawan Head of Corporate Remedial and Recovery Division Currently 50 years old. Holds a Bachelor’s degree in Civil Law from Universitas Padjadjaran. Appointed as Head of the Corporate Remedial and Recovery Division based on Board of Director’s Decree No. KP/482/DIR/R dated December 20, 2018. Anang Basuki Head of Credit Administration Division Currently 49 years old. Holds a Bachelor’s degree in Accounting from Universitas Gadjah Mada. Appointed as Head of Credit Administration Division based on Board of Director’s Decree No. KP/482/DIR/R dated December 20, 2016. 100 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  101. Company Profile Okki Rushartomo Budiprabowo Head of Card Business Division Currently 38 years old . Holds a Bachelor’s degree in Industrial Engineering from Institut Teknologi Bandung. Appointed as Head of the Card Business Division based on Board of Director’s Decree No. KP/032/DIR/R dated February 06, 2018. Benny Yoslim Head of Corporate and Multinational Business 1 Division Currently 38 years old. Holds a Master’s degree in Business Management from Institut Teknologi Bandung. Appointed as the Head of Corporate and Multinational 1 Division based on Board of Director’s Decree No. KP 011/DIR/R dated January 5, 2018. Warda Nadjamuddin Head of Corporate and Multinational Business 2 Division Currently 47 years old. Holds a Master’s degree in Management from Universitas Sam Ratulangi. Appointed as Head of Corporate and Multinational 2 Division based on Board of Director’s Decree No. KP/147/ DIR/R dated April 13, 2018. Eko Setiawan Head of Middle Business Division Currently 48 years old. Holds a Master’s degree in Finance from Universitas Gadjah Mada. Appointed as Middle Division Leader based on Board of Director’s Decree No. KP/032/DIR/R dated February 6, 2018. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 101
  102. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Edy Awaludin Head of Small Business 1 Division Currently 50 years old. Holds a Master’s degree in Agribusiness Management from Institut Pertanian Bogor. Appointed as Head of Small Business 1 Division based on Board of Director’s Decree No. KP/ 023/DIR/R dated January 17, 2019. Bambang Setyatmojo Head of Small Business 2 Division Currently 49 years old. Holds a Master’s degree in Management from Universitas Gadjah Mada. Appointed as Head of Small Business 2 Division based on Board of Director’s Decree No. KP/368/DIR/R dated November 1, 2018. A.A.G. Agung Dharmawan Head of SOE and Government Institutions Division Currently 47 years old. Holds a Master’s degree in Management from Universitas Gadjah Mada. Appointed as Head of SOE and Government Institutions Division based on Board of Director’s Decree No. KP/406/ DIR/R dated 28 August 2017. Anang Fauzie Head of E-Banking Division Currently 48 years old. Holds a Bachelor’s degree in Computer Engineering from Universitas Gunadarma. Appointed as Head of E-Banking Division based on Board of Director’s Decree No. KP/061/ DIR/R dated March 2, 2018. 102 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  103. Company Profile G .C. Koen Yulianto Head of Institutional Relations Division Currently 52 years old. Holds a Master’s degree in Management from Universitas Semarang. Appointed as Head of Institutional Relations Division based on Board of Director’s Decree No. KP/411/DIR/R dated November 30, 2018. Johansyah Head of Legal Division Currently 37 years old. Holds a Bachelor’s degree in Law from Universitas Hasanuddin. Appointed as Head of the Legal Division based on Board of Director’s Decree No. KP/342/DIR/R dated October 12, 2018. Eko Setyo Nugroho Head of International Division Currently 49 years old. Holds a Master’s degree in Business Administration Technology from Institut Teknologi Bandung. Appointed as Head of International Division based on Board of Director’s Decree No. KP/147/DIR/R daed April 13, 2018. Teddy Wishadi Head of Transactional Banking Services Division Currently 47 years old. Holds a Master’s degree in Computer Science from Universitas Indonesia. Appointed as Head of Transactional Banking Services Division based on Board of Director’s Decree No. KP/482/DIR/R dated December 20, 2016. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 103
  104. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Sigit Eri Soelistianto Head of Data Management Division Currently 49 years old. Holds a Bachelor’s degree from the Faculty of Economics, Universitas Indonesia majoring in Accounting and a Master’s degree in Professional Accounting Science from Universitas Indonesia. Appointed as Head of Data Management Division based on Board of Director’s Decree No. KP/210/DIR/R dated May 12, 2016. Efita Praharani Head of Human Capital Management Division Currently 51 years old. Holds a Bachelor’s degree in Psychology from Universitas Gadjah Mada and obtained a Master of Science degree in Administrative Sciences from Universitas Indonesia. Appointed as Head of Human Capital Management Division based on Board of Director’s Decree No. KP/292/DIR/R dated August 23, 2018. J. Donny Bima Herjuno Head of Consumer Product Management Division Currently 47 years old. Holds a Bachelor’s degree in Management from Universitas Indonesia. Appointed as Head of Consumer Product Management Division based on Board of Director’s Decree No. KP/274/ DIR/R dated August 3, 2018. Aryanto Purwadi Head of Bank Risk Management Division Currently 52 years old. Holds a Master’s degree in Agribusiness from Institut Pertanian Bogor. Appointed as Head of Bank Risk Management Division based on Board of Director’s Decree No. KP/274/DIR/R dated August 3, 2018. 104 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  105. Company Profile Neny Asriani Head of Wealth Management Division Currently 48 years old . Holds a Master’s degree in Management from Universitas Terbuka. Appointed as Head of Wealth Management Division based on Board of Director’s Decree No. KP/391/DIR/R dated August 11, 2017. Ahmad Fikri Head of Operational Division Currently 51 years old. Holds a Bachelor’s degree in Plant Pest & Disease from Universitas Sriwijaya. Appointed as Head of Operational Division based on Board of Director’s Decree No. KP/172/DIR/R dated April 26, 2016. Afthon Shodaq Noor Head of Information Technology Operations Division Currently 47 years old. Holds a Master’s degree in Finance from Universitas Gadjah Mada. Appointed as Head of Information Technology Operations Division based on Board of Director’s Decree No. KP/137/DIR/R dated April 5, 2018. Moh. Hisyam Head of Consumer Loan Processing and Collection Division Currently 51 years old. Holds a Master’s degree in Management from Universitas Ibnu Khaldun. Appointed as Head of Consumer Loan Processing and Collection Division based on Board of Director’s Decree No. KP/213/DIR/R dated May 12, 2016. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 105
  106. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Putu Bagus Kresna Head of Budgeting and Control Division Currently 46 Financial years old. Holds a Master’s degree in Financial Management from Universitas Indonesia. Appointed Head of Budgeting and Control Division based on Board of Director’s Decree No. KP/147-DIR-R dated April 13, 2018. Dandy Perwandi S. Head of Asset Management and Procurement Division Currently 47 years old. Holds a Master’s degree in Finance / Banking from the University of Monash. Appointed as Head of Asset Management and Procurement Division based on Board of Director’s Decree No. KP/036/DIR/R dated February 07, 2018. Fauzi Head of Network Management Division Currently 51 years old. Holds a Bachelor’s degree in Development from Universitas Andalas. Appointed as Head of Network Management Division based on Board of Director’s Decree No. KP/032/DIR/R dated February 6, 2018. Teddy Erdius E. Saputra Head of Subsidiary Development Division Currently 49 years old. Holds a Master’s degree in Agribusiness from Institut Pertanian Bogor. Appointed as Head of Subsidiary Development Division based on Board of Director’s Decree No. KP/449/DIR/R dated September 10, 2018. 106 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  107. Company Profile Hermita Head of Consumer Sales Division Currently 50 years old . Holds a Master’s degree in Agribusiness from Institut Pertanian Bogor. Appointed Head of Consumer Sales Division based on Board of Director’s Decree No. KP/032/DIR/R dated February 6, 2018. Mucharom Head of Strategic Planning Division Currently 49 years old. Holds a Master’s degree in International Business Management from Universitas Gadjah Mada.. Appointed as Head of Strategic Planning Division based on Board of Director’s Decree No. KP/126/DIR/R dated April 25, 2017. Babas Bastaman Head of Commercial and Small Business Risk Division Currently 51 years old. Holds a Master’s degree in Small and Medium Industry from Institut Pertanian Bogor. Appointed as Head of Commercial and Small Business Risk Division based on Board of Director’s Decree No. KP/463/DIR/R dated October 16, 2017. Retno Murwani Head of Corporate Credit Risk Division Currently 51 years old. Holds a Master’s degree in Social Sciences from Universitas Gadjah Mada. Appointed as Head of Corporate Credit Risk Division based on Board of Director’s Decree No. KP/027/DIR/R dated January 20, 2016. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 107
  108. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Muhammad Faisal Jazuli Head of Information Technology Solutions and Security Division Currently 42 years old. Holds a Master’s degree in Business Administration Management from Institut Teknologi Bandung. Appointed as Head of Information Technology Solutions and Security Division based on Board of Director’s Decree No. KP/26/DIR/R dated April 25, 2017. Josdi Situmorang Head of Policy Governance Division Currently 54 years old. Holds a Master’s degree in Agribusiness from Institut Pertanian Bogor. Served as Head of Policy Governance Division based on Board of Director’s Decree No. KP/147/DIR/R dated April 13, 2018. Legendariah Bur Rasuanto Head of Treasury Division Currently 48 years old. Holds a Master’s degree in Management from Universitas Indonesia. Appointed as Head of Treasury Division based on Board of Director’s Decree No. KP/147/DIR/R dated April 13, 2018. Indomora Harahap Head of Marketing Communication Division Currently 49 years old. Holds a Master’s degree in Business Management and Technology Administration from Institut Teknologi Bandung. Appointed as Head of Marketing Communication Division based on Board of Director’s Decree No. KP/016/DIR/R dated January 15, 2019. 108 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  109. Company Profile Novianto Harry Kristono Head of Medan Regional Office Currently 54 years old . Holds a Master’s degree in Financial Management from Universitas Sriwijaya. Appointed as Head of Medan Regional Office based on Board of Director’s Decree No. KP/147/DIR/R dated April 13, 2018. Hari Sundjojo Head of Padang Regional Office Currently 50 years old. Holds a Bachelor’s degree in Accounting from Universitas Merdeka Malang. Appointed as Head of Padang Regional Office based on Board of Director’s Decree No. KP/168/DIR/R dated April 27, 2018. Dodi Widjajanto Head of Palembang Regional Office Currently 52 years old. Holds a Master’s degree in Agribusiness from Institut Pertanian Bogor. Appointed as Head of Palembang Regional Office based on Board of Director’s Decree No. KP/032/DIR/R dated February 6, 2018. Afien Yuni Yahya Head of Bandung Regional Office Currently 50 years old. Holds a Master’s degree in Professional Path Management from Universitas Indonesia. Appointed as Head of Bandung Regional Office based on Board of Director’s Decree No. KP/032/DIR/R dated February 6, 2018. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 109
  110. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Mochamad Harsono Head of Semarang Regional Office Currently 54 years old. Holds a Bachelor’s degree in Management from Universitas Mahasaraswati. Appointed as Head of Semarang Regional Office based on Board of Director’s Decree No. KP/032/DIR/R dated February 6, 2018. Muhammad Jufri Head of Surabaya Regional Office Currently 49 years old. Holds a Master’s degree in Management from Universitas Trisakti. Appointed as Head of Surabaya Regional Office based on Board of Director’s Decree No. KP/011/DIR/R dated January 5, 2018. Faizal Arief Setiawan Head of Makassar Regional Office ar Currently 48 years old. Holds a Master’s degree in Finance from Universitas Gadjah Mada. Appointed as Head of Makassar Regional Office based on Board of Director’s Decree No. KP/031/DIR/R dated January 23, 2019. Suhardi Petrus Head of Denpasar Regional Office Currently 50 years old. Holds a Master’s degree in Financial Management from Universitas Wijaya Putra. Appointed as Head of Denpasar Regional Office based on Board of Director’s Decree No. KP/032/DIR/R dated February 6, 2018. 110 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  111. Company Profile Muhammad Arafat Head of Banjarmasin Regional Office Currently 48 years old . Holds a Master’s degree in Financial Management from Universitas Hasanuddin. Appointed as Head of Banjarmasin Regional Office based on Board of Director’s Decree No. KP/307/DIR/R dated September 7, 2018. Yanar Siswanto Head of Jakarta Senayan Regional Office Currently 49 years old. Holds a Master’s degree in Agribusiness from Institut Pertanian Bogor. Appointed as Head of Jakarta Senayan Regional Office based on Board of Director’s Decree No. KP/172/DIR/R dated April 24, 2016. Haris Agus Handoko Head of Manado Regional Office Currently 51 years old. Holds a Master’s degree in Financial Management from Universitas Hasanuddin. Appointed as Head of Manado Regional Office based on Board of Director’s Decree No. KP/219/DIR/R dated June 8, 2018. Yessy Kurnia Dyah W. Head of Jakarta Kota Regional Office Currently 48 years old. Holds a Master’s degree in Agribusiness Management from Universitas Pembangunan Nasional Veteran Surabaya.. Appointed as the Head of the Jakarta Kota Regional Office based on Board of Director’s Decree No. KP/324/DIR/R dated September 24, 2018. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 111
  112. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Henry Panjaitan Head of Jakarta BSD Regional Office Currently 49 years old. Holds a Master’s degree in Banking from University of South Australia. Appointed as the Head of the Jakarta BSD Regional Office based on Board of Director’s Decree No. KP/016/ DIR/R dated January 15, 2019. Feri Andajaya Head of Jakarta Kemayoran Regional Office Saat ini berusia 51 tahun. Meraih gelar Magister di bidang Bussiness Administration & Technology dari Institut Teknologi Bandung. Menjabat sebagai Pemimpin Kantor Wilayah Jakarta Kemayoran berdasarkan Surat Keputusan Direksi No. KP/147/DIR/R tanggal 13 April 2018. Setiawan Jahja Adie Head of Papua Regional Office Saat ini berusia 52 tahun. Meraih gelar Magister di bidang Manajemen dari Universitas Jember. Menjabat sebagai Pemimpin Kantor Wilayah Papua berdasarkan Surat Keputusan Direksi No. KP/031/DIR/R tanggal 23 Januari 2019. Arif Suwasono Head of Yogyakarta Regional Office Currently 52 years old. Holds a Master’s degree in Management from STIE Artha Bodhi Iswara. Appointed as Head of Yogyakarta Regional Office based on Board of Director’s Decree No. KP/585/DIR/R dated December 28, 2017. 112 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  113. Company Profile Wiwi Suprihatno Head of Malang Regional Office Currently 47 years old . Holds a Bachelor’s degree in Administration from Universitas Brawijaya and Master’s degree from Mahasaraswati. Appointed as Head of Malang Regional Office based on Board of Director’s Decree No. KP/032/DIR/R dated February 6, 2018. Yohanes Iwan Kurniawan Head of BNI Contact Center Unit Currently 48 years old. Holds a Master’s degree in Accounting Management from Universitas Gadjah Mada. Appointed as Head of BNI Contact Center Unit based on Board of Director’s Decree No. KP/1711/ HCT/1/R dated September 29, 2017. Rommel TP. Sitompul Head of Syndication Business Unit Currently 48 years old. Holds a Master’s degree in Marketing Management from Universitas Persada Indonesia YAI. Appointed as Head of Syndication Business Unit based on Board of Director’s Decree No. KP/1990/HCT/1/R dated 16 October 2018. Saktimaya Murti Head of Financial Institution Pension Fund Unit Head of Financial Institution Pension Fund Unit Currently 48 years old. Holds a Bachelor’s degree in Management from Universitas Jendral Soedirman. Appointed as Head of Financial Institution Pension Fund Unit based on Board of Director’s Decree No. KP/482/DIR/R dated December 20, 2016. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 113
  114. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Tennisiana Soekesi Head of E-Channel Unit Currently 49 years old. Holds a Master’s degree in Computer Science from Universitas Indonesia. Appointed as Head of E-Channel Unit based on Board of Director’s Decree No. KP/126/DIR/R dated 25 April 2017. Grace Daturante Pong Samma Head of Service Quality Unit Currently 52 years old. Holds a Bachelor’s degree in Management from Universitas Kristen Indonesia. Appointed as Head of Service Quality Unit based on Board of Director’s Decree No. KP/482/DIR/R dated December 20, 2016. Syafrudin PGS Head of Customer Analysis & Portfolio Management Unit Currently 50 years old. Holds a Master’s degree in Accounting Management from Universitas Gadjah Mada. Appointed as Head of Customer Analysis & Portfolio Management Unit based on Board of Director’s Decree No. KP/01.002785/2019/TBS/R dated January 14, 2019. 114 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  115. Company Profile EMPLOYEE PROFILE AND EMPLOYEE COMPETENCY DEVELOPMENT KARYAWAN TOTAL EMPLOYEES BASED ON POSITION LEVEL Total Employees Based on Position Level Position Level (number of employees) 2018 Male ≥ Vice President Female 196 Assistant Vice President Manager 2017 Total Male Female 182 Total 42 238 42 224 755 322 1,077 730 276 1,006 1,803 1,190 2,993 1,692 1,101 2,793 Assistant Manager 4,743 4,842 9,585 4,078 4,191 8,269 Assistant 5,451 7,684 13,135 5,576 8,592 14,168 196 - 196 749  - Basic Employee Total 27,224 749 27,209 TOTAL EMPLOYEES BASED ON EDUCATION LEVEL TTotal Employees Based on Education Level Education Level (number of employees) 2018 Male Doctorate Degree Female 5 Master’s Degree 2017 Total 4 Male Female 9 3 Total 4 7 1,556 1,028 2,548 1,509 963 2,472 10,031 11,392 21,423 9,718 11,334 21,052 Diploma 872 1.641 2,513 995 1,883 2,878 Primary – Senior High School 680 15 695 782 18 800 Bachelor’s Degree Total 27,224 27,209 TOTAL EMPLOYEES BASED ON EMPLOYMENT STATUS Total Employees Based on Employent Status Employent Status Male Permanent (number of employees) 2018 Female 2017 Total Male Female Total 12,485 13,401 25,886 11,866 12.775 24,641 Contract 446 443 889 1,141 1,427 2,568 Trainee 213 236 449 - - - Total PT Bank Negara Indonesia (Persero) Tbk  27,224 27,209 Adapting Quickly to Face Change 115
  116. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk TOTAL EMPLOYEES BASED ON AGE GROUP Total Employees Based on Age Group Age Group Male >50 Years (number of employees) 2018 2017 Female Total Male Female Total 664 302 966 813 344 1,157 >45-50 Years 1,946 1,322 3,268 2,030 1,379 3,409 >40-45 Years 1,888 1,407 3,295 1,928 1,482 3,410 >35-40 Years 1,769 1,805 3,574 1,881 1,950 3,831 >30-35 Years 2,449 2,884 5,333 2,507 3,027 5,534 >25-30 Years 3,432 4,795 8,227 3,404 5,061 8,465 996 1.565 2.561 444 959 1.403 ≤25 Years Total 27,224 27,209 TOTAL EMPLOYEES BASED ON GENERATION Total Employees Based on Generation Generation Male Baby Boomer (number of employees) 2018 130 Female 34 2017 Total Male 164 282 Female Total 85 367 Gen X 5,815 4,474 10,289 6,041 4,727 10,768 Gen Y 7,199 9,572 16,771 6,684 9,390 16,074 Total 27,224 27,209 EMPLOYEE COMPETENCY DEVELOPMENT COMPETENCY DEVELOPMENT POLICY The following are the new programs implemented in 2018 to support the development of BNI employee competencies: • Implementation of BNI Learning Wallet (BLW), a personal budget given to each employee that is used and managed by the employees to improve and develop their competencies. BNI Learning Wallet realization up to the end of 2018 included 31,237 applications with a total participation of 20,169 employees. • Implementation of BNI Smarter, namely the employee development framework through learning & sharing, a combination of informal on-the-job learning or discussions with superiors and coworkers, and formal learning in a structured manner in the classroom (real class and virtual class). This Learning & Development follows a 70:20:10 model, where the largest portion of learning & sharing activities actually occurs when employees interact with other parties and when completing their work. The development framework works through the bni.corpu.co.id website so employees can access it online anywhere and anytime. As of the end of 2018, 25,788 employees followed learning activities and 7,537 employees were involved in sharing activities. 116 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  117. Company Profile • • • Implementation of BNI Expert Locator, an online tool for knowledge sharing between employees and experts in problem solving and knowledge creation. Up to the end of 2018, more than 623 employees have been designated as BNI Experts in more than 674 areas of expertise, including: corporate communication, audit, policy, compliance, risk management, credit remedial and recovery, banking operational management, procurement management, strategic planning, data management, IT assessment, project management, financial analysis, credit analysis and credit process, project financing, and portfolio analysis. Furthermore, all employees may interact with these appointed experts. BNI’s Assessment Center Reactivation is a Center of Digital Assessment and Evaluation (BNI CODAE) placing BNI as the only State-Owned Bank with a digital format Assessment Center. Digitizing the BNI CODAE assessment process helps improve service effectiveness and the quality of assessment results. During 2018, BNI CODAE conducted assessments (soft skills and hard skills) for all employees at all organization levels, including employees at BNI subsidiaries. Implementation of Daily Exercise Employee Program 46 (DEEP 46), a learning program designed in the form of daily quizzes to gain insight into employees’ understanding of the necessary knowledge to help their daily work as well as a reminder of essential, information related to work. The number of DEEP46 participants throughout 2018 can be seen in the following table. DEEP46 Small Credit 4.574 Consumer Lending 1.956 Services – Teller 7.954 Services – CS 3.465 Services – Leaders 2.959 Auditor 759 Emerald RM 237 Small Credit Agricultural Commodities Sales Legal, Governance, Risk and Compliance Commercial Credit Treasury Human Capital 970 1.744 27.092 820 2.256 230 Procurement of goods/services 3.085 Brevet Branch Management 2.321 Total Partisipasi • Participants 60.422 Implementation of Leadership Programs: including Digital Leadership for All Levels, Leadership for Club 46 Program, Internships at Overseas Development Offices for the 10 best graduates from each program, Advanced Management Development Program (AMDP), General Management Program (GMP), Management Development Program (MDP), Management Trainee Program (MT) and Officer Development Program (ODP). PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 117
  118. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk • Implementation of Four Disciplines of Execution (4DX) with seven internal consultants called “7 Samurai”. Up to the end of 2018, the realization of 4DX implementation in BNI can be seen in the following graphic. 4DX Implementation 118 Adapting Quickly to Face Change Number of teams in the WIG Sessions 4,159 teams Number of teams receiving a Bronze Certificate 3,206 teams Number of teams receiving a Bronze Silver Certificate 1,684 teams Number of teams receiving a Bronze Gold Certificate 1,214 teams Sustainability Index 70.87% Realization PT Bank Negara Indonesia (Persero) Tbk
  119. Company Profile COMPETENCY DEVELOPMENT BASED ON POSITION LEVEL Competency Development Table Based on Position Level In 2018 No . 1. Position Level ≥ Vice President Total Vice President PT Bank Negara Indonesia (Persero) Tbk  Learning Program Learning Objectives Number of Participants Banking Operation Increase employee’s competency in banking operations. 6 Corporate Core Function Increase employee’s competency in support areas, such as law, information technology, HR management, language, quality management, procurement of goods and services, accounting, and so on. 13 Credit and Business Increase the competency of employees in the field of credit which is the main business of BNI. 65 Governance, Risk, and Compliance Increase employee’s competency in the areas of governance, risk, and compliance. 25 Leadership Increase employee’s competency in terms of leadership. 72 Marketing, Sales, and Service Increase employee’s competency in marketing, sales, and services to support BNI business. 10 Professional Certification Provide certification in various fields, such as Credit Certification, Sales Certification, IT Certification, and so on. 77 Strategic Initiative Increase employee’s competency through public learning, both inside and outside the country. 27 Transactional Banking Increase employee’s competency in the field of cash management services for nonindividual customers. 2 Treasury and Global Banking Increase the competency of employees in the field of treasury and global banking. 0 297 Adapting Quickly to Face Change 119
  120. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk No. 2. Position Level Assistant Vice President Total Assistant Vice President 120 Adapting Quickly to Face Change Learning Program Learning Objectives Number of Participants Banking Operation Increase employee’s competency in banking operations. 86 Corporate Core Function Increase employee’s competency in support areas, such as law, information technology, HR management, language, quality management, procurement of goods and services, accounting, and so on. 108 Credit and Business Increase the competency of employees in the field of credit which is the main business of BNI. 568 Governance, Risk, and Compliance Increase employee’s competency in the areas of governance, risk, and compliance. 75 Leadership Increase employee’s competency in terms of leadership. 309 Marketing, Sales, and Service Increase employee’s competency in marketing, sales, and services to support BNI business. 162 Professional Certification Provide certification in various fields, such as Credit Certification, Sales Certification, IT Certification, and so on. 410 Strategic Initiative Increase employee’s competency through public learning, both inside and outside the country. 129 Transactional Banking Increase employee’s competency in the field of cash management services for nonindividual customers. 7 Treasury and Global Banking Increase the competency of employees in the field of treasury and global banking. 11 1,865 PT Bank Negara Indonesia (Persero) Tbk
  121. Company Profile No . 3. Position Level Manager Total Manager PT Bank Negara Indonesia (Persero) Tbk  Learning Program Learning Objectives Number of Participants Banking Operation Increase employee’s competency in banking operations, 115 Corporate Core Function Increase employee’s competency in support areas, such as law, information technology, HR management, language, quality management, procurement of goods and services, accounting, and so on 423 Credit and Business Increase the competency of employees in the field of credit which is the main business of BNI 1,417 Governance, Risk, and Compliance Increase employee’s competency in the areas of governance, risk, and compliance 386 Leadership Increase employee’s competency in terms of leadership 554 Marketing, Sales, and Service Increase employee’s competency in marketing, sales, and services to support BNI business 373 Professional Certification Provide certification in various fields, such as Credit Certification, Sales Certification, IT Certification, and so on 608 Strategic Initiative Increase employee’s competency through public learning, both inside and outside the country 187 Transactional Banking Increase employee’s competency in the field of cash management services for nonindividual customers 39 Treasury and Global Banking Increase the competency of employees in the field of treasury and global banking 17 4,419 Adapting Quickly to Face Change 121
  122. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk No. 5. Position Level Assistant Manager Total Assistant Manager 122 Adapting Quickly to Face Change Learning Program Learning Objectives Number of Participants Banking Operation Increase employee’s competency in banking operations, 374 Corporate Core Function Increase employee’s competency in support areas, such as law, information technology, HR management, language, quality management, procurement of goods and services, accounting, and so on 1,286 Credit and Business Increase the competency of employees in the field of credit which is the main business of BNI 2,994 Governance, Risk, and Compliance Increase employee’s competency in the areas of governance, risk, and compliance 467 Leadership Increase employee’s competency in terms of leadership 1,006 Marketing, Sales, and Service Increase employee’s competency in marketing, sales, and services to support BNI business 3,653 New Entry Provide debriefing to employees who have just joined BNI so they can carry out their duties in their definitive positions later. 558 Professional Certification Provide certification in various fields, such as Credit Certification, Sales Certification, IT Certification, and so on 1,550 Strategic Initiative Increase employee’s competency through public learning, both inside and outside the country 422 Transactional Banking Increase employee’s competency in the field of cash management services for nonindividual customers 508 Treasury and Global Banking Increase the competency of employees in the field of treasury and global banking 47 12,865 PT Bank Negara Indonesia (Persero) Tbk
  123. Company Profile No . 6. Position Level Assistant Total Assistant PT Bank Negara Indonesia (Persero) Tbk  Learning Program Learning Objectives Number of Participants Banking Operation Increase employee’s competency in banking operations, 173 Corporate Core Function Increase employee’s competency in support areas, such as law, information technology, HR management, language, quality management, procurement of goods and services, accounting, and so on 1,891 Credit and Business Increase the competency of employees in the field of credit which is the main business of BNI 3,479 Governance, Risk, and Compliance Increase employee’s competency in the areas of governance, risk, and compliance 142 Leadership Increase employee’s competency in terms of leadership 983 Marketing, Sales, and Service Increase employee’s competency in marketing, sales, and services to support BNI business 4,704 New Entry Provide debriefing to employees who have just joined BNI so they can carry out their duties in their definitive positions later. 13 Professional Certification Provide certification in various fields, such as Credit Certification, Sales Certification, IT Certification, and so on 701 Strategic Initiative Increase employee’s competency through public learning, both inside and outside the country 219 Transactional Banking Increase employee’s competency in the field of cash management services for nonindividual customers 121 Treasury and Global Banking Increase the competency of employees in the field of treasury and global banking 77 12,503 Adapting Quickly to Face Change 123
  124. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk No. 7. Position Level Learning Program Basic Employee Learning Objectives Number of Participants Banking Operation Increase employee’s competency in banking operations, 0 Corporate Core Function Increase employee’s competency in support areas, such as law, information technology, HR management, language, quality management, procurement of goods and services, accounting, and so on 7 Credit and Business Increase the competency of employees in the field of credit which is the main business of BNI 72 Governance, Risk, and Compliance Increase employee’s competency in the areas of governance, risk, and compliance 0 Leadership Increase employee’s competency in terms of leadership 37 Marketing, Sales, and Service Increase employee’s competency in marketing, sales, and services to support BNI business 32 New Entry Provide debriefing to employees who have just joined BNI so they can carry out their duties in their definitive positions later. 0 Professional Certification Provide certification in various fields, such as Credit Certification, Sales Certification, IT Certification, and so on 0 Transactional Banking Increase employee’s competency in the field of cash management services for nonindividual customers 1 Treasury and Global Banking Increase the competency of employees in the field of treasury and global banking 0 Total Basic Employee 150 During 2018, to develop employee competencies, BNI trained 28,590 employees (including 1,796 terminated employees), with an average of 165.31 times per employee. The explanation be the next table below. Total Participant Total Training Hours (in hours) 4,452,413 7,871,298 Training Hours per Employee 293,77 Total Training per Employee 165,31 Total Employees Trained (people) 26,794* *) including 1,796 terminated employees 124 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  125. Company Profile As of 2018 Learning Realization based on Learning & Development Model 70:20:10 2018 Learning Realization based on Learning & Development Model 70:20:10 Development Method Experiential Learning "70" ∑ Class ∑ Participant On the Job Training (OJT) 543 931 In Service Training (IST) 135 196 3 27 Coaching 375 675 Mentoring 935 1,332 Role Play 12,487 28,974 In-Class Learning 15,080 15,544 e-Learning 27,502 29,688 13 868 Short Overseas Assignment Social Learning "20" Formal Learning "10" Certification EVALUATION OF COMPETENCY DEVELOPMENT IMPLEMENTATION To ensure that employee learning had an impact on productivity, the learning is measured. The learning and sharing impact measurements set by BNI, include: 1. Circle 1: to measure the learning experience, namely the learner’s level of satisfaction with the learning program. The employee’s level of satisfaction can be influenced by the learning material / modules, facilities, infrastructure and facilitators. This employee satisfaction level is calculated using the Net Promoter Score method, where in 2018 the NPS score was 62.07 (generally deemed excellent). 2. Circle 2: to measure the learning gained, namely the employee’s increased knowledge and skills after participating in the learning program. In 2018, the evaluation result for circle 2 was 55.90. 3. Circle 3: to measure the behavior change, namely changes in the participant’s behavior and abilities, as well as the application of the training results in the workplace. In 2018, the evaluation results for circle 3 was 11.27. COMPETENCY DEVELOPMENT COSTS Every year, 5% of the human capital budget is for learning. In 2018 Rp385.34 billion was used to increase employee capacity and capability, both through centralized learning by BNI Corporate University, or through decentralization by each Unit and by the employees themselves using their BLW budget. Based on the learning budget realization, 28,590 employees followed training for an average participation rate of 165.31 per employee. This high learning participation was due to digital learning through BNI SMARTER. Competence Cost Description Education & Training PT Bank Negara Indonesia (Persero) Tbk  2018 (Million Rp) 382,013.34 Growth 2017 (Million Rp) 348,150.11 In Currency 33,863.23 In Percent 9.73% Adapting Quickly to Face Change 125
  126. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk SHAREHOLDER COMPOSITION BNI SHAREHOLDER COMPOSITION AS OF DECEMBER 31, 2018 BNI Shareholder Composition as of December 31, 2018 No. Shares Ownership 1 Government 2 Public: Total Share Ownership Percentage 11,189,193,875 60.00000% 214,792,074 1.15178% • Indonesian Individuals • Cooperatives 1,016,329 0.00545% • Foundations 101,774,354 0.54575% • Pension Funds 163,280,124 0.87556% • Insurance 442,488,323 2.37276% • Banks • Limited Liability Companies • Other Business Enterprises • Mutual Funds • Foreign Individuals • Foreign Business Enterprises Total 1,766,636 0.00947% 508,838,625 2.72855% 5,298 0.00003% 646,867,810 3.46871% 2,891,622 0.01551% 5,375,741,388 28.82643% 18,648,656,458 100.00000 % 20 LARGEST BNI SHAREHOLDERS COMPOSITION AS OF DECEMBER 31, 2018 20 Largest BNI Shareholders No. 126 Investor Name Address Status Number of Shares Percentage Ownership 11,189,193,875 60.0000000% 1. NEGARA REPUBLIK INDONESIA MINISTRY OF SOE. JALAN MEDAN MERDEKA SELATAN NOMOR 13, JAKARTA 10110 REPUBLIC OF INDONESIA 2. BPJS KETENAGAKERJAAN - PROGRAM JHT JENDRAL GATOT SUBROTO No.79, JAKARTA LIMITED LIABILITY COMPANY 432,350,768 2.31840% 3. BNYMSANV RE BNYMSANVLUX RE S/A ESPRING INV-2040084086 46 RUE MONTOYER B-100 BRUSSELS, BELGIUM FOREIGN BUSINESS ENTERPRISE 234,646,936 1.25825% 4. HSBC BANK PLC S/A PRUDENTIAL ASSURANCE COMPANY OBA ESI HBEU AS AGENT LAURENCE POUTNEY HILL LONDON, EC4R OHH FOREIGN BUSINESS ENTERPRISE 188,236,000 1.00938% 5. BNYMSANV RE BNYMLB RE EMPLOYEES PROVIDENTFD BOARD -2039844119 EPF BUILDING, JL. RAJA LAUT 50350, KUALA LUMPUR MALAYSIA FOREIGN BUSINESS ENTERPRISE 163,303,600 0.87569% 6. JPMCB NA AIF CLT RE-STICHTING DEPOSITARY APG EME MRKT EQ POOL OUDE LINDESTRAAT 70, 6401 DJ HEERLEN, THE NETHERLANDS FOREIGN BUSINESS ENTERPRISE 137,983,700 0.73991% 7. JPMCB NA RE-VANGUARD INTERNATIONAL VALUE FUND 100 VANGUARD BOULEVARD, MALVERN, PA 19355, USA FOREIGN BUSINESS ENTERPRISE 119,284,300 8. JPMCB NA RE-VANGUARD EMERGING MARKETS STOCK INDEX FUND 100 VANGUARD BOULEVARD, MALVERN, PA 19355, USA FOREIGN BUSINESS ENTERPRISE 114,862,386 0.61593% 9. JPMCB NA RE-VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 100 VANGUARD BOULEVARD MALVERN PA 19355, USA FOREIGN BUSINESS ENTERPRISE 114,079,127 0.61173% Adapting Quickly to Face Change 0.63964% PT Bank Negara Indonesia (Persero) Tbk
  127. Company Profile No . Investor Name Address Status Number of Shares Percentage Ownership 10. GIC S/A GOVERNMENT OF SINGAPORE 168 ROBINSON ROAD 37-01 CAPITAL TOWER, SINGAPORE FOREIGN BUSINESS ENTERPRISE 102,173,541 0.54789% 11. SSBTC 26AD S/A INV GLOBAL STRATEGY FD-2144606346 49 AVENUE J.F. KENNEDY L-1855, LUXEMBOURG FOREIGN BUSINESS ENTERPRISE 100,468,400 0.53874% 12. CITIBANK NEW YORK S/A DIMENSIONAL EMERGING MARKETS VALUE FUND 6301 BEE CAVE RD. BUILDING ONE, AUSTIN TX 78746, USA FOREIGN BUSINESS ENTERPRISE 89,706,241 0.48103% 13. PT PRUDENTIAL LIFE ASSURANCE - REF PRUDENTIAL TOWER JL. JEND. SUDIRMAN KAV. 79,SETIABUDI, JAKARTA INSURANCE 85,155,716 0.45663% 14. CITIBANK NEW YORK S/A GOVERNMENT OF NORWAY - 15 BANKPLASSEN 2, 0151 OSLO, NORWAY FOREIGN BUSINESS ENTERPRISE 83,069,200 0.44544% 15. HSBC BANK PLC S/A SAUDI ARABIAN MONETARY AUTHORITY SAUDI ARABIAN MONETARY AUTHORITY PO BOX 2992, RIYADH FOREIGN BUSINESS ENTERPRISE 79,580,600 0.42674% 16. YKP BNI FOR PROGRAM LTI BNI JL LAUSER NO 73, KEBAYORAN BARU FOUNDATION 76,236,227 0.40880% 17. SSB 2Q27 S/A ISHARES CORE MSCI EMERGING MARKETS ETF-2144613424 400 HOWARD STREET, SAN FRANCISCO CALIFORNIA 94105 FOREIGN BUSINESS ENTERPRISE 68,661,700 0.36819% 18. BNYM RE BRIDGE BUILDER INTERNATIONAL EQUITY FUND2039926979 615 EAST MICHIGAN STREET MILWAUKEE WISCONSIN 53202, AMERIKA SERIKAT FOREIGN BUSINESS ENTERPRISE 66,565,800 0.35695% 19. PT AIA FINL - UL EQUITY MENARA MATAHARI LT.7 JL. BOULEVARD PALEM RAYA, BENCONGAN KELAPA DUA, TANGERANG INSURANCE 64,152,700 0.34401% 20. PT AXA MANDIRI FINANCIAL SERVICES S/A MANDIRI DINAMIC MONEY RP GEDUNG AXA TOWER KUNINGAN CITY LT. 17, JL. PROF, DR SATRIO KAV. 18, KARET, SETIABUDI INSURANCE 58,663,800 0,31457% BNI SHAREHOLDERS WITH OVER 5% OWNERSHIP COMPOSITION AS OF DECEMBER 31, 2018 BNI Shareholders with over 5% Ownership Composition Investor Name Number of Shares Republic of Indonesia Percentage Ownership 11,189,193,875 60.00000% COMPOSITION OF SHAREHOLDERS WITH LESS THAN 5% AS OF DECEMBER 31, 2018 Shareholders with less than 5% Ownership No, Public Shareholders Total Shareholders Number of Shares Percentage Ownership National Financier 1 Indonesian Individuals 2 Cooperatives 41,461 214,792,074 1.15178% 18 1,016,329 0.00545% 3 Foundations 41 101,774,354 0.54575% 4 Pension Funds 183 163,280,124 0.87556% 5 Insurance 121 442,488,323 2.37276% 6 Banks 4 1,766,636 0.00947% 204 508,838,625 2.72855% 5 5,298 0.00003% 7 Limited Liability Companies 8 Other Business Enterprises 9 Mutual Funds Sub Total PT Bank Negara Indonesia (Persero) Tbk  325 646,867,810 3.46871% 42,362 2,080,829,573 11.15806% Adapting Quickly to Face Change 127
  128. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk No, Public Shareholders Total Shareholders Number of Shares Percentage Ownership Foreign Shareholders 10 Foreign Individuals 11 Foreign Business Enterprises Sub Total TOTAL 140 2,891,622 0.01551% 1,493 5,375,741,388 28.82643% 1,633 5,378,633,010 28.84194% 43,995 7,459,462,583 40% BOARD OF COMMISSIONERS AND BOARD OF DIRECTORS SHARE OWNERSHIP COMPOSITION AS OF DECEMBER 31, 2018 BNI Board of Commissioners and Board of Directors share ownership Composition Name Position Number of Shares Percentage Ownership BOARD OF COMISSIONERS Ari Kuncoro President Commissioner / Independent Commissioner 0 0.00% Wahyu Kuncoro Vice President Commissioner 0 0.00% Pataniari Siahaan Independent Commissioner 0 0.00% Revrisond Baswir Independent Commissioner 0 0.00% Ahmad Fikri Assegaf Independent Commissioner 0 0.00% Bistok Simbolon Commissioner 0 0.00% Joni Swastanto Commissioner 0 0.00% Marwanto Harjowiryono Commissioner 0 0.00% Sigit Widyawan Independent Commissioner 0 0.00% Achmad Baiquni President Director 0 0.00% Herry Sidharta Vice President Director 0 0.00% Putrama Wahju Setyawan Director 138,442 0.00% Catur Budi Harto Director 0 0.00% Rico Rizal Budidarmo Director 0 0.00% Anggoro Eko Cahyo Director 153,526 0.00% Adi Sulistyowati Director 324 0.00% Bob Tyasika Ananta Director 82,891 0.00% Endang Hidayatullah Director 51,368 0.00% Tambok P, Setyawati Director 24,880 0.00% Dadang Setiabudi Director 0 0.00% BOARD OF DIRECTORS Remarks: The Board of Commissioners and Board of Directors do not have indirect ownership in BNI shares. 128 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  129. Company Profile LIST OF SUBSIDIARIES AND /OR ASSOCIATED ENTITIES SUBSIDIARIES Name Business Field Share Ownership Year of Establishment Operational Status Total Assets (Rp Million) Domicile PT Bank BNI Syariah Sharia Banking 99,94% 2010 Operating 41,040,203 Jakarta PT BNI Multifinance Consumer Finance 99,99% 1983 Operating 1,322,611 Jakarta PT BNI Securites Brokerage and underwriter, include securities trading, including acting as a guarantor and investment advisor 75,00% 1995 Operating 869,813 Jakarta PT BNI Life Insurance Life Insurance Services 60,00% 1997 Operating 17,283,191 Jakarta BNI Remittance Remittance Services 100,00% 1998 Operating 4,931 Hongkong A brief description of each Subsidiary is described as follows: PT BANK BNI SYARIAH BNI Syariah was established by Establishment Deed No. 160 dated March 22, 2010. BNI Syariah is a sharia commercial bank resulting from the spinoff of PT Bank Negara Indonesia (Persero) Tbk Sharia Business Unit (“UUS BNI”) from PT Bank Negara Indonesia Tbk (“BNI Bank”). The establishment was approved at the Bank BNI Extraordinary General Meeting of Shareholders on October 5, 2009. The separation was pursuant to Bank Indonesia Regulation No. 11/10/PBI/2009 concerning Sharia Business Units. The establishment was conducted with Bank Indonesia licenses, through two stages, namely approval of the principle license and the business license. On February 8, 2010, the Bank obtained the principle license from Bank Indonesia to conduct the spinoff of UUS BNI, based on letter No. 12/2/DpG/ Dpbs. The separation of UUS BNI was confirmed through Separation Deed No. 159 dated March 22, 2010. A deposit of capital, as stated in the deed of incorporation, was made by the founder for the effective spin-off on June 19, 2010. On May 21, 2010, the Bank obtained a business license from Bank Indonesia pursuant to the Governor of Bank Indonesia Decision No. 12/41/KEP.GBI/2010. With the separation becoming effective on June 19, 2010 the Bank first started its business activities. The Bank operated as a foreign exchange bank starting on July 9, 2010 based on a Copy Letter of the Deputy Governor of Bank Indonesia Decision No. 12/5/KEP.DpG/2010 dated July 9, 2010. The Bank’s purpose and objective as a Sharia commercial bank resulting from the separation, was to carry out banking business based on sharia principles, in accordance with the provisions in the prevailing laws and regulations. On December 29, 2017, BNI as the parent company injected an additional capital investment of Rp1 trillion into BNI Syariah, for large business growth to increase sharia-based businesses that have large growth potential. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 129
  130. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk BNI Syariah continuously improves its network services, and pays attention to sharia compliance to ensure all BNI Syariah products have been tested by the Sharia Supervisory Board and comply with applicable sharia rules. In terms of information technology, BNI Syariah, as a subsidiary of PT Bank Negara Indonesia (Persero) Tbk, is supported by the joint use of advanced information technology systems with ISO 9001 2008 certification. BNI Syariah’s business operations are supported by competent human capital. Currently BNI Syariah has 4,973 employees (including 1,816 outsourced employees), with the competency development process continuously being conducted so that every employee becomes the best in their field. To operate its business, as of December 31, 2017 BNI Syariah operated 3 Regional offices, 68 Branch Offices, 202 SubBranch Offices, 15 Cash Offices, 23 Mobil Mobile Services, and 52 Payment Points. In addition, BNI Syariah customers can also utilize the Sharia Channelling Office (SCO) network spread across 1,490 outlets throughout Indonesia that will continue to grow in line with asset growth. The Bank’s head office is located at Gedung Tempo Pavilion 1 Jl. H.R Rasuna Said Kav. 11, Jakarta. The PT Bank BNI Syariah Board of Commissioners and Board of Directors composition is based on the AGMS minutes deed No.104 dated April 27, 2018 and is as follows: Board of Commissioners President Commissioner Independent Commissioner Commissioner : Fero Poerbonegoro : Rizqullah : Imam Budi Sarjito * * Not yet effective / currently undergoing the OJK fit and proper test process PT BNI MULTIFINANCE BNI Multifinance was established on April 8, 1983 based on Notarial Deed by Kartini Muljadi, S.H., No. 21. BNI Multifinance under the name of PT BNI-AMEX Leasing is a cooperation between PT Bank Negara Indonesia (Persero) Tbk. (BNI) and American Express Leasing Corporation (AMEX). The Company’s name has been amended several times with the last one to PT BNI Multifinance, being notarized by deed No. 103 dated June 27, 1994. The Company commenced its commercial operations in 1983. The company is engaged in funding Investments, Working Capital, Multipurpose and Operating Leases. Its business activities are supported by reliable human resources (the number of employees as at December 31, 2018 was 111 people), and operates 7 branch offices in Medan, Lampung, Bogor, Semarang, Surakarta, Yogyakarta and Surabaya as well as points of sales in Bandung. The head office is located at BNI Life Insurance Building 5th Floor, Jalan Aipda KS. Tubun No. 67, Jakarta. The PT BNI Multifinance Board of Commissioners and Board of Directors composition is based on AGMS minutes deed No. 05 dated September 04, 2018 and is as follows Board of Commissioners President Commisioner Commisioner : Rosa de Lima Dwi Mutiari : Retno Murwani Board of Director Direktur Utama Director of Business Director of Finance and Operational : Hasan Gazali Pulungan* : Linda Saragih : Fajar Agustianto *effective undergoing the OJK fit Board of Directors President Director : Abdullah Firman Wibowo Director of Consumer Business : Dhias Widhiyati Director of Finance and Operational : Wahyu Avianto Director of Compliance : Tribuana Tunggadewi Dewan Pengawas Syariah Chairman Member 130 Adapting Quickly to Face Change and proper test process since January 22, 2019 : K.H Ma’ruf Amin : Hasanudin PT Bank Negara Indonesia (Persero) Tbk
  131. Company Profile PT BNI SEKURITAS BNI Sekuritas (BNI Sekuritas) was established based on notarial deed No. 22 on April 12,1995 in Jakarta. The deed was amended by deed No. 39 by the same notary dated May 3, 1995. As per the Company Articles of Association, the Company’s business activities include securities trading, including brokerage and underwriting and other activities associated with these activities by observing Market Supervisory Agency capital and Financial Institution (Bapepam- LK) and other statutory laws and regulations in force. BNI Sekuritas obtained a license as a securities broker, underwriter of stocks and investment manager from the Chairman of Bapepam-LK through decree No. KEP-19/PM/1995, No. KEP-020/PM/1995 dated August 8, 1995 and No. KEP-07/PM-MI/1995 dated October 23, 1995, which were transferred to PT BNI Asset Management by decree No. Kep480/BL/2009 dated December 31, 2009. To implement independence of investment managers by Bapepam-LK No. V.D.11 an annex to the Chairman of Bapepam-LK decree No. Kep-480/BL/2009 dated December 31, 2009 on Investment Manager Guidelines, the Company completed the separation / division of business (spin-off ) of the business operations division for investment management by forming a new group called PT BNI Asset Management. The establishment process was approved at the BNI Sekuritas Extraordinary General Meeting of Shareholders on March 1, 2011, with ownership of 99.99%. In mid 2011, the BNI Sekuritas ownership structure was strengthened by the joining of a strategic investor, namely SBI Sekuritas Co. Ltd., Japan to participate in the company, so the composition of BNI Sekuritas ownership till now is 75% owned by PT Bank Negara Indonesia (Persero) Tbk. and 25% owned by SBI Sekuritas Co. Ltd. As a company registered with the Financial Services Authority (OJK), BNI Sekuritas is licensed as an underwriter, securities broker, and mutual fund selling agent. As at 31 December 2018, BNI Sekuritas business operations were conducted by 279 professional employees, who provided services to customers through 16 branch offices and 51 Investment Galleries. PT BNI Sekuritas Head Office is located at Sudirman Plaza Indofood Tower, 16th Floor, Jl. Jendral Sudirman Kav. 76-78, Jakarta 12910, Indonesia The PT BNI Sekuritas Board of Commissioners and Board of Directors composition is based on GMS minutes deed No. 11 dated June 28, 2017 and is as follows: Board of Commissioners Commissioner : Suhendry Hafni Independent Commissioner : Ryosuke Hayashi Board of Directors President Director Director Director : Adiyasa Suhadibroto : Reza Benito Zahar : Geger Nuryaman Maulana PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 131
  132. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk PT BNI LIFE INSURANCE BNI Life was originally established under the name “PT BNI Life Insurance Jiwasraya” based on Deed No. 24 dated November 28, 1996 in Jakarta. On November 26, 2004, the Company changed its name to PT BNI Life Insurance, which was endorsed by the Minister of Justice and Human Rights of the Republic of Indonesia through No. C-31600 HT.01.04.TH,2004 dated December 29, 2004. In accordance with the Articles of Association , the Company’s scope of activities is conducting business in life insurance including life insurance business with Islamic principles. The Company obtained a license as a life insurance company based on the Ministry of Finance of the Republic of Indonesia Number 305/KMK.017/1997 dated July 7, 1997. The Company also obtained a license to open a branch office with Islamic principles based on the Ministry of Finance of the Republic of Indonesia No. KEP-186/KM.6/2004 dated May 19, 2004. The Company commenced commercial operations in 1997. In early May 2014, Sumitomo Life Insurance Company (Sumitomo Life) officially became one of BNI Life’s shareholders. The equity participation amounted to Rp4.2 trillion with a 40% ownership interest in BNI Life, which was realized in September 2014. Sumitomo Life is one of the largest insurance companies in Japan. Floor, Unit 42, Denpasar/Jl Raya Puputan No. 108 B Renon, Palembang/Palembang Icon Mall, 2nd Floor, Unit 70). The address of BNI Life headquarters is Centennial Tower Lt. 9, Jl. Gatot Subroto Kav 24-25, South Jakarta. The PT BNI Life Insurance Board of Commissioners and Board of Directors composition is based on the GMS minutes deeds No. 35 dated October 9, 2018 and No.105 dated December 28, 2018 and is as follows: Board of Commissioners President Commissioner/ Independent Commissioner Commissioner Independent Commissioner Independent Commissioner Board of Directors President Director Director of Finance Director Director : Parikesit Suprapto : Darwin Suzandi : Kazuhiko Arai : Husain Abdullah : Henry Cratein C. Suryanaga : Shadiq Akasya : Eben Eser Nainggolan : Hidenobu Ito : Naruyoshi Kuwata SYARIAH SUPERVISORY BOARD The strategic cooperation with Sumitomo Life Insurance accelerated business growth and provided huge space to gain future business opportunities. As proof of Sumitomo Life Insurance’s seriousness in the BNI Life business development, they have placed representatives in BNI Life management as Commissioners, Directors, and professional experts. Chairman Member Member : Dr. (HC) K.H. Ma'ruf Amin : Ir. Agus Haryadi, AAAIJ, FIIS, ASAI : Prof. Dr. H. Utang Ranuwijaya, MA BNI Life offers various insurance products such as life, health, education, investment, pension and sharia insurance. BNI Life’s business operations are supported by human resources competent in the insurance field. Currently BNI LIFE has 833 employees with competencies that continues to be developed to provide the best service to customers. To operate its business, as of December 31, 2018 BNI Life Insurance operates 7 (seven) service offices (Jakarta/Jl Aipda KS Tubun No.67, Bandung/Cihampelas Walk, GFNo 28-29), Semarang/Thamrin Square, Jl MH Thamrin No.5, Yogyakarta/ Jogja City Mall Level 1 Unit 40, Surabaya/Grand City Mall, 2nd 132 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  133. Company Profile BNI REMITTANCE LIMITED (BNI REMITTANCE) BNI Remittance Limited (BNI Remittance) is a BNI subsidiary was founded by BNI Hong Kong on November 19, 1996, based on Certificate of incorporation No. 574748 under the name “High Motivation Company”, and changed its name to BNI Nakertrans Ltd in 1997. To further optimize its business activities in accordance with the rules of the local authorities, after a comprehensive business assessment, it was decided to separate the BNI Nakertrans Ltd management from BNI Hong Kong as well as change the name to BNI Remittance Ltd, in 2009. BNI Remittance is currently registered as a Money Service Operator with register number 12-08-00768 and subject to Hong Kong Custom and Excise Department. To conduct its business, BNI Remittance manages outlets spread across three areas of Hong Kong, namely Keswick Main Office in Hong Kong Island, Tsuen Wan Branch Office and Yuen Long Branch Office in New Territories and Hung Hom Branch Office in Kowloon. BNI Remittance Central Office is located at Flat/RM5 on G/F, Nos 1-7 Keswick Street, Causeway Bay, Hong Kong, Besides providing services through these outlets, BNI Remittance collaborates with BNI in its financial inclusion program, providing financial access through the widest possible digital services for Indonesian Migrant Workers (PMI) in Hong Kong. Since the beginning of 2015, customers can more freely carry out financial transactions through 6 BNI ATM machines in Hong Kong with the same service features as ATM machines in Indonesia including cash withdrawals, balance checks, transfers between BNI accounts and other banks, credit / ticket purchases and bill payments. In mid 2017, BNI Remittance introduced a Mobile Banking service in Hong Kong to further strengthen its effective and efficient digital banking services for customers to manage their finances. The BNI Remittance Board of Commissioners and Board of Directors composition is based on GMS minutes deed No.0574748 dated 31 July 2016 and is as follows: Board of Director Director : Eko Kristianto ASSOCIATED ENTITIES Nama Bidang Usaha Kepemilikan Saham Tanggal dan Tahun Pendirian Status Operasi Domisili PT Sarana Bersama Pengembangan Indonesia Investments 8.00% 1981 Operating Jakarta PT Swadharma Nusantara Pembiayaan Financing 7.35% 1992 Operating Jakarta PT Bursa Efek Indonesia Stock Exchange 1.20% 1977 Operating Jakarta PT Kustodian Sentral Efek Indonesia Securities Settlement 2.50% 1988 Operating Jakarta PT Pemeringkat Efek Indonesia Securities Rating 0.64% 1994 Operating Jakarta PT Bank Mizuho Indonesia Financial Services 1.00% 2003 Operating Jakarta PT Bank Sumitomo Mitsui Indonesia Financial Services 0.52% 2004 Operating Jakarta PT PANN Pembiayaan Maritim Financing 48.4% 1974 Operating Jakarta PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 133
  134. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk BNI GROUP STRUCTURE Negara Indonesia Public 60% 40% 75,00% 100% 99,99% Sekuritas 1995 Kiriman Uang 1997 Pembiayaan 1983 60,00% Asuransi Jiwa 1996 0,06% 99,94% Perbankan Syariah 2010 99,9% 17,5% PT BNI Asset Management 2011 PT Penyelesaian Transaksi Elektronik Indonesia (PTEN) 2017 1,20% 7,35% PT Bursa Efek Indonesia (IDX Pembiayaan 1993 0,14% 1,00% 8,00% 1,00% 0,52% 48,4% Pemeringkat Efek 1994 Lembaga Penyelesaian Efek1988 Investasi 1981 Jasa Keuangan 2003 Jasa Keuangan 2004 Pembiayaan PT Sarana Bersama Pengembangan Indonesia 0,50% 1,50% As of 2018, the Company did not have any Joint Venture Companies or Special Purposes Vehicles (SPV). 134 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  135. Company Profile SHARE ISSUANCE CHRONOLOGY Initial Public Offering (IPO) On 28 October 1996, BNI undertook an initial public offering of 1,085,032,000 Class B shares with a par value per share of Rp500 (full amount) and offering price per share of Rp850 (full amount) to the public in Indonesia. The shares began trading on the Jakarta and Surabaya Stock Exchanges (currently Indonesia Stock Exchange or IDX) on 25 November 1996. Limited Public Offering I On 30 June 1999, BNI undertook a Limited Public Offering I (“LPO I”) through the issuance of pre- emptive rights of 151,904,480,000 Class C shares with a par value per share of Rp25 (full amount). Each holder of 1 share was entitled to buy 35 new shares for Rp347.58 (full amount) per share. As a result of LPO I, BNI increased its capital by 683,916,500 Class C shares to the public on July 21, 1999 and the LPO I listed in the Jakarta and Surabaya Stock Exchanges (currently IDX). On April 7, 2000 and June 30, 2000, BNI also issued 151,220,563,500 Class C shares to the Government of Indonesia through the recapitalization program under Government Regulation No. 52 year 1999. Recapitalization On March 30, 2000, the Minister of Finance approved BNI’s recapitalization amounting to Rp61.8 trillion, which was Rp9 trillion higher than the amount stated in the Government Regulation No. 52 year 1999. In connection with the increase in the recapitalization amount, which was approved in the Government Regulation No. 32 year 2000, BNI issued an additional 44,946,404,500 Class C shares without pre-emptive rights. Limited Public Offering II On July 30, 2007, the Extraordinary General Shareholders’ Meeting approved the issuance up to 1,992,253,110 new Class C shares through Limited Public Offering II with a par value per share of Rp375 (full amount). Each owner of 20 old shares whose name was registered in the BNI Shareholders List as of August 9, 2007 at 16.00 WIB was entitled to 3 pre-emptive rights where each right entitled the owner to buy a new share at a price of Rp2,025 (full amount) per share. From the Limited Public Offering II, BNI raised Rp747,094 additional share capital and Rp3,287,218 additional paid-in capital with Rp195,280 shares issuance costs. The initial trading took place on August 13, 2007 at the Jakarta Stock Exchange and Surabaya Stock Exchange (currently IDX). Limited Public Offering III On November 25, 2010, at the Extraordinary General Shareholders’ Meeting, the shareholders decided, among other matters, to increase the issued and paid-up capital through a limited public offering with preemptive right (LPO III) to shareholders for the issuance of 3,374,715,948 new Class C shares with a par value per share of Rp375 (full amount), with an offer price of Rp3,100 per Preemptive Right that could be traded inside and outside the Indonesia Stock Exchange (IDX) from December 10, 2010 to December 16, 2010, taking into account the applicable provisions in the capital market sector. From the LPO III, BNI obtained Rp1,265,519 additional share capital and Rp8,950,869 additional paid-in capital, net of shares issuance costs. On July 20, 2001, BNI’s capital was reduced by 1,965,701,500 Class C shares in connection with the refund of excess recapitalization funds to the Government of Indonesia. The refund was approved by the shareholders at the Extraordinary General Shareholders’ Meeting held on 25 June 2001. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 135
  136. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Names of Stock Exchanges where the Company’s shares are listed All BNI shares are listed on the Indonesia Stock Exchange. BNI Share Issuance Chronology Date Description Shares Nominal Value Shares Offering Rate Number of Shares ............... November 1996 Initial Public Offering (IPO) Series-A @Rp500 - Series -B @Rp500 850 1 4,340,127,999 Total Capital Issued and Paid June 1999 Rights Issue (1:35) 4,340,128,000 Series-A @Rp500 - 1 Series -B @Rp500 850 4,340,127,999 Series -C @Rp25 347,58 Total Capital Issued and Paid June 2000 Issuance of new shares without pre-emptive rights Series-A @Rp500 - 1 Series -B @Rp500 850 4,340,127,999 Series -C @Rp25 347,58 Total Capital Issued and Paid July 2001 Repayment of excess amount in Government Bonds December 2003 Series-A @Rp500 - 1 Series -B @Rp500 850 4,340,127,999 Series -C @Rp25 347,58 13 August 2007 Series-A @Rp7,500 - 1 Series -B @Rp7,500 12,750 289,341,866 Series -C @Rp375 5,213.7 August 2010 Series-A @Rp7,500 - 1 Series -B @Rp7,500 12,750 289,341,866 Series -C @Rp375 2,025 10 December 2010 Total Capital Issued and Paid 136 Adapting Quickly to Face Change 14,984,598,643 15,273,940,510 Series-A @Rp7,500 - 1 Series -B @Rp7,500 12,750 289,341,866 Series -C @Rp375 2,025 Total Capital Issued and Paid Rights Issue (110,473:500,000) 12,992,345,533 13,281,687,400 Total Capital Issued and Paid Divestment of Republic of Indonesia Shares to BNI ex green shoe 194,885,183,000 199,225,311,000 Total Capital Issued and Paid Rights Issue (20:3) 196,850,884,500 201,191,012,500 Total Capital Issued and Paid Reverse Stock Split (15:1) 151,904,480,000 156,244,608,000 14,984,598,643 15,273,940,510 Series-A @Rp7,500 - 1 Series -B @Rp7,500 12,750 289,341,866 Series -C @Rp375 3,100 18,359,314,591 18,648,656,458 PT Bank Negara Indonesia (Persero) Tbk
  137. Company Profile BOND ISSUANCE CHRONOLOGY Bank BNI also issued capital debt instruments in the form of Medium Term Notes (MTN) through a limited offer called “BNI Subordinated MTN I Year 2018” with a write down feature that can be calculated as a component of capital, which was registered at the Financial Services Authority supervision administration with an effective date of June 8, 2018 for a total principal amount of Rp100 billion. On June 22, 2017, BNI obtained an effective statement from OJK through letter number S-349/D.04/2017 to issue Sustainable Bonds I BNI Phase I 2017 (“Bonds”). The value of bonds issued amounted to Rp 3 trillion, for a period of 5 years, with a coupon of 8% per annum that will be paid quarterly. The BNI Bonds were issued on July 11, 2017 and listed on the Indonesia Stock Exchange on July 12, 2017. The first coupon payment to the bondholders was made on October 11, 2017. Acting as Underwriters were PT BNI Sekuritas, PT Mandiri Sekuritas, PT Bahana Sekuritas, PT Danareksa Sekuritas, PT Indo Premier Securities and PT BCA Sekuritas. Acting as Trustee was PT Bank Rakyat Indonesia (Persero)Tbk. Based on POJK No. 07/2017 and Regulation No.IX.C.11, in the framework of the issuance of this Bond, BNI has obtained a rating for long-term debt from PT Pemeringkat Efek Indonesia (“Pefindo”) for the period April 25, 2017 until April 1, 2018 in accordance with their letter No. RC-393/PEF-DIR/IV/2017 dated 25 April 2017, with an idAAA rating (Triple A). BNI will perform the issued bond rating annually as long as the obligations on such securities have not been paid off. On 2018, BNI also issued capital debt instruments in the form of Medium Term Notes (MTN) through a limited offer called “BNI Subordinated MTN I Year 2018” with a write down feature that can be calculated as a component of capital, which was registered at the Financial Services Authority supervision administration with an effective date of June 8, 2018 for a total principal amount of Rp100 billion. The issuance of the Subordinated MTN purpose was to fulfill OJK Regulation No. 14/POJK.03/2017 article 24 and article 37 concerning Recovery Plan, where systemic banks are required to have capital debt instruments no later than December 31, 2018. The BNI Subordinated MTN I Year 2018 was offered at a fixed interest rate of 8.00% p.a. for a period of 5 (five) years. Arrangers for the issuance of the Subordinated MTNs were BNI Sekuritas, Danareksa Sekuritas, and Mandiri Sekuritas. The Legal Consultant was Hanafiah Ponggawa & Partners. The notary was Ir. Nanette Cahyanie, SH. The Indonesian Central Securities Depository (KSEI) acted as the Paying Agent. In the framework of issuing this Subordinated MTN, the Company received a national ranking idAA (Double A) from PT Pemeringkat Efek Indonesia. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 137
  138. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Name of the Exchange Where the Company’s NCD is Listed All BNI’s NCDs have been listed on the Indonesia Stock Exchange BNI Bond Issuance Chronology Description Issued Date Effective Date Tenor Currency Number of Bonds Offer Price Maturity Date Loan Rates Payment Status Rating Interest Rate Trustee Payment Status Global Bond April 27, 2012 - 5 Years USD 500,000,000 98.89 April 27, 2017 4.125% p.a Lunas - BB (S&P) HSBC BNI Sustainable Bonds I Phase I Year 2017 July 11, 2017 June 22, 2017 5 Years IDR 3,000,000,0000 100.00 July 11, 2022 8.00% p.a Not Yet Paid idAAA (Pefindo) idAAA (Pefindo) BRI Tabel kronologi Medium Term Notes (MTN) Description Issued Date Effective Date Tenor Currency Value (million) Maturity Date Discount Rate Payment Status Ranking 2018 MTN Subordinated I BNI Year 2018 August 10, 2018 - 60 months Rp 100,000,000 August 10, 2023 8.00% Not Yet Paid idAA Trustees 2017 * PT Bank Rakyat Indonesia (Persero) Tbk. *Obligasi baru diterbitkan di tahun 2018. 138 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  139. Company Profile Bond Interest Payments Chronology The Global Bond has an annual interest of 4 .125% on the principal amount of the loan. This interest is paid by the Company every 6 (six) months with the maturity date of the bond interest payment falling on October 29, 2012. Global Bond Interest Payment Chronology Interest Number- Date of Interest Payment Interest Payment Status 1. October 29,2012 Paid Off 2. April 29, 2013 Paid Off 3. October 28, 2013 Paid Off 4. April 28, 2014 Paid Off 5. October 27, 2017 Paid Off 6. April 27, 2015 Paid Off 7. October 27, 2015 Paid Off 8. April 27, 2016 Paid Off 9. October 27, 2016 Paid Off 10. April 27, 2017 Paid Off BNI Bond Funds Usage Realization Results Type of Public Offering Effective Date in trillion Rupiah Result of Public Offering Value Amount of Public Offering Results BNI Sustainable Bonds phase I of 2017 June 22, 2017 PT Bank Negara Indonesia (Persero) Tbk  Rp3 Cost of Public Offering Rp 0.0074 Funds Usage Plan Net Ekspansi Kredit Total Rp 2,992 Rp 2,992 Rp 2,992 Realization of Funds Usage Credit Expansion Rp 2,992 Total Remaining Funds from Public Offering Rp 2,992 Adapting Quickly to Face Change - 139
  140. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk OTHER SECURITIES ISSUANCE AND/OR LISTING CHRONOLOGY In 2017, the Company issued a NCD for a maximum of Rp3 trillion with an issuance realization of Rp2.7 trillion, in several series. Arrangers for the issuance of the BNI NCD were Danareksa Sekuritas, BNI Sekuritas, Mandiri Sekuritas, and BCA Sekuritas. Legal Consultant used was Hanafiah Ponggawa & Partners. Notary used was Fathiah Helmi, SE. PT Kustodian Sentral Efek Indonesia (KSEI) acted as Paying Agent. The NCD issuance was a Company strategy to increase rupiah liquidity. After issuing this NCD, the Bank received a national ranking for Negotiable Certificates of Deposit (NCD) from PT Pemeringkat Efek Indonesia (PEFINDO): idAAA (Triple A). Stock Exchange the Company’s NCD is listed All BNI NCDs are listed on the Indonesia Stock Exchange BNI Other Securities Issuance Chronology Description Issued Date Effective Date Tenor Mata Uang Value (million) Maturity Date Discount Rate Payment Status Rating Trustee 2018 2017 NCD Phase I NCD Phase I Series A - 6 month Rp 390.000 December 16, 2016 7,00% Paid Off - - NCD Phase I Series B - 9 month Rp 20.000 March 16, 2017 7,20% Paid Off - - - 370 days Rp 42.000 June 23, 2017 7,55% Paid Off - - - 18 month Rp 415.000 December 15, 2017 7,75% Paid Off - - NCD Phase I Series E - 24 month Rp 1.231.000 June 15, 2018 8,25% Paid Off - - NCD Phase I Series F - 36 month Rp 925.000 June 14, 2019 8,40% Not Yet Paid Off - - - 370 days Rp 225.000 October 2, 2017 7,20% Paid Off - - - 18 month Rp 390,000 March 26, 2018 7,60% Paid Off - - - 7,90% Paid Off - - - NCD Phase I Series C NCD Phase I Series D June 16, 2016 - - NCD Phase II NCD Phase II Series A NCD Phase II Series B NCD Phase I I Series C September 27, 2016 NCD Phase II Series D - - 24 month Rp 770.000 September 26, 2018 - 36 month Rp 815.000 September 26, 2019 8,10% Not Yet Paid Off - - - - 370 days Rp 2.195.000 March 15, 2018 7,55% Paid Off - - - - 18 month Rp 350.000 September 3, 2018 7,90% Paid Off - - - - 24 month Rp 150.000 February 28, 2019 8,05% Not Yet Paid Off - - - - 36 month Rp 5.000 February 24, 2020 8,35% Not Yet Paid Off - - - NCD Phase III NCD Phase III Series A NCD Phase III Series B NCD Phase III Series C NCD Phase III Series D 140 March 10, 2017 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  141. Company Profile NAME AND ADDRESSES OF INSTITUTIONS AND /OR SUPPORTING PROFESSIONS TRADING AND STOCK LISTING INFORMATION PT Bursa Efek Indonesia Gedung Bursa Efek Indonesia, Tower 1 Jl. Jend. Sudirman Kav. 52-53 Jakarta 12190, Indonesia Tel : (62-21) 5150515 Fax : (62-21) 5154153 Website : www.idx.co.id Email : listing@idx.co.id PUBLIC ACCOUNTANT OFFICE Purwantono, Sungkoro & Surja Indonesia Stock Exchange Building Tower 2, 7th Floor Jl. Jend. Sudirman Kav. 52-53 Jakarta 12190, Indonesia Tel : (62-21) 52895000 Fax : (62-21) 52894100 Website: www.ey.com/id SECURITIES RATING AGENCIES Standard & Poor‘s 30 Cecil Street Prudential Tower 17th Floor Singapore 049712 Tel : (65) 6438 2881 Website : www.standardandpoors.com Moody‘s Singapore Pte Ltd 50 Raffles Place #23-06 Singapore Land Tower 048623 Tel : (65) 6398 8300 Fax : (65) 6398 8301 Website : www.moodys.com PT Fitch Ratings Indonesia Prudential Tower Lt. 20 Jl. Jenderal Sudirman Kav. 79 Jakarta Selatan 12910 Tel : (62-21) 5795 7755 Fax : (62-21) 5795 7750 Website : www.fitchratings.com SECURITIES ADMINISTRATION BUREAU PT Datindo Entrycom Jl. Hayam Wuruk No. 28, Jakarta 10120 Tel : (62-21) 3508077 Website: www.datindo.com Email: corporatesecretary@datindo.com CUSTODIAN PT Kustodian Sentral Efek Indonesia Gedung Bursa Efek Indonesia, Tower 1, Lantai 5 Jl. Jend. Sudirman Kav. 52-53 Jakarta 12190, Indonesia Tel : (62-21) 5152855 Fax : (62-21) 52991199 Website : www.ksei.co.id Email : helpdesk@ksei.co.id NOTARY Fathiah Helmi, S.H. Graha Irama Lantai 6-C Jl. HR Rasuna Said Kav 1-2 Bl X-1 Kuningan Timur, Setia Budi Jakarta 12950 Tel : (021) 529 07304, (021) 529 07305, (021) 529 07306 Fax : (021) 526 1136 Email : fhchozie@gmail.com PT Pemeringkat Efek Indonesia (Pefindo) Panin Tower - Senayan City, 17th Floor Jl.Asia Afrika Lot.19 Jakarta 10270, Indonesia Tel : (62-21) 7278 2380 Fax : (62-21) 7278 2370 Website : www.pefindo.com PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 141
  142. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk PENGHARGAAN DAN SERTIFIKASI Penghargaan 142 Award Name Rated 1 Digital Brand Wealth Management Conventional General Bank Event: Digital Brand Awards 2018 Organizer: Infobank & isentia Date April 25, 2018 Award Name Best e-Commerce 2017 Event: Card Center Manager Organizer: VISA Date September 19, 2018 Award Name Information & Communication Sector Event: IT Governance Award 2018 Organizer: Forum TI BUMN Date Desember 24, 2018 Award Name The 2018 Treasury & Cash Management NonFI in Indonesia Event: Global Finance Worlds Best Treasury and Cash Management Provider Awards 2018 Organizer: Global Finance Date January 22, 2018 Adapting Quickly to Face Change Award Name Best Millenial Segment Solution Event: MasterCard Awards Organizer: MasterCard Date December 7, 2018 Award Name Best Remittances Provider in Southeast Asia 2017 Event: Best Deal & Solution Award 2017 Organizer: Alpha Southest Asia Date February 13, 2018 PT Bank Negara Indonesia (Persero) Tbk
  143. Company Profile Award Name Corporate Strategic Partner (CSP) Event: Half Day Seminar 2018 Wealth Management Digitalization of Chance or Threat Organizer: Certified Wealth Managers’ Association (CWMA) Date April 5, 2018 Award Name Conventional General Bank Credit Card Event: 7th Digital Brand Awards 2018 Organizer: Infobank & isentia Date April 25, 2018 Award Name The Most Popular Bank for Mortgage Products Event: Rumah 123 Real Estate Awards 2018 Organizer: Rumah123.com Date April 26, 2018 Award Name Rated A for Learning & Development Strategy Event: HR Excellence Award 2018 Organizer: SWA & Universitas Indonesia Date May 7, 2018 Award Name Rated A for HR Transformation Event: HR Excellence Award 2018 Organizer: SWA & Universitas Indonesia Date May 7, 2018 Award Name Rated A for Compensation and Benefit Strategy Event: HR Excellence Award 2018 Organizer: SWA & Universitas Indonesia Date May 7, 2018 Award Name Rated 1 Satisfaction (ATM) Event: Satisfaction, Loyalty, Engagement Awards 2018 Organizer: Infobank dan Marketing Research lndonesia (MRI) Date May 17, 2018 Award Name Rated 1 Overall Event: Satisfaction, Loyalty, Engagement Awards 2018 Organizer: Infobank dan Marketing Research lndonesia (MRI) Date May 17, 2018 Award Name General Champion Porseni BUMN 2018 Event: Porseni BUMN 2018 Organizer: BUMN Date May 5, 2018 PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 143
  144. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Award Name The Best Government Bank in Service Excellence Event: Banking Service Excellence Awards 2018 Organizer: Infobank dan Marketing Research lndonesia (MRI) Date June 5, 2018 144 Award Name Successfully Implementing Corporate Transformation Event: Anugerah Manajemen Indonesia 2018 Organizer: SWA & PPM Manajemen Date July 18, 2018 Award Name Top KPR (People’s Mortgage 2018 Event: Top Bank 2018 Organizer: Business News Date August 10, 2018 Award Name The Best Performance Bank Event: Bisnis Indonesia Financial Award 2018 Organizer: Bisnis Indonesia Date August 27, 2018 Award Name 1st Best Call Center Bank Umum Event: Banking Service Excellence Awards Organizer: Infobank dan PT Rintis Sejahtera Date August 30, 2018 Award Name 1st Best CRM (Cash Deposit Machine) Event: Banking Service Excellence Awards Organizer: Infobank dan PT Rintis Sejahtera Date August 30, 2018 Award Name 1st Best Transaction Growth as Acquirer Bank Event: Transaction Banking Awards 2018 Organizer: Infobank dan PT Rintis Sejahtera Date August 30, 2018 Award Name 1st Best Phone Banking General Bank Event: Banking Service Excellence Awards Organizer: Infobank dan PT Rintis Sejahtera Date August 30, 2018 Award Name 2nd Best Collecting Agent Event: 23rd Infobank Award Organizer: Infobank Date August 30, 2018 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  145. Company Profile Award Name The Remittance Product and Service of The Year Event : The Asian Banker Excellence in Retail Financial Service Awards Organizer: The Asian Banker International Date August 30, 2018 Award Name Best Bank SimPel/SimPel iB Implementation Event: FIN OJK EXPO 2018 Organizer: Otoritas Jasa Keuangan Date September 14 – 15, 2018 Award Name Bank Innovative SimPel Implementation Event: FIN OJK EXPO 2018 Organizer: Otoritas Jasa Keuangan Date September 14 – 15, 2018 Award Name Best ICT Implementation in Sales & Marketing Event: Indonesia Best eMark Award Organizer: Telkom University & SWA Date September 26, 2018 Award Name BNI Emerald Event: Service Quality Award 2018 Organizer: Service Excellence & Service Quality Monitoring Date October 17, 2018 Award Name Best Beneficiary Event: ATM Bersama Awards 2018 Organizer: Artajasa Date November 6-8, 2018 Award Name 2018 Best lll KUR Distribution Event: KUR Organizer: Kementerian Koordinator Bidang Perkekonomian Republic Indonesia Date November 22, 2018 Award Name Best MSME Support Bank (Bank BUKU 3 & 4) Event: BI Award Organizer: BI Date November 27, 2018 Award Name Peserta Sistem BI-RTGS dan BI-SSSS Terbaik Kelompok Bank BUKU 3 & 4 Event: BI Award Organizer: BI Date November 27, 201 PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 145
  146. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Award Name Best Bank Offices for Managing Cash Deposits in All Indonesian Areas Included the Remote, Outermost, and Nearest Areas Event: BI Award Organizer: BI Date November 27, 201 Award Name Best Innovative Acquiring Event: MasterCard Awards Organizer: MasterCard Date December 7, 2018 146 Adapting Quickly to Face Change Award Name The Top 50 Companies for 2018 Event: Best of The Best Awards 2018 Organizer: Forbes Indonesia Date November 29, 2018 Award Name Best Affluent Debit Card Program Event: MasterCard Awards Organizer: MasterCard Date December 7, 2018 Award Name Best Affinity Debit Card Program Event: MasterCard Awards Organizer: MasterCard Date December 7, 2018 Award Name Most Creative Acquisition Campaign Event: MasterCard Awards Organizer: MasterCard Date December 7, 2018 PT Bank Negara Indonesia (Persero) Tbk
  147. Company Profile Award Name Best State Owned Enterprise Event : The 10th IICD Corporate Governance Conference and Award Organizer: AEI, Perbanas, PT Citra Negeri Amanah Date December 10, 2018 Award Name Top 50 Big Capitalization Public Listed Company Event: The 10th IICD Organizer: Indonesian Institute for Corporate Directorship (IICD) Date December 10, 2018 Award Name Best Service Cash Management Event: EUROMONEY Market Leader Real Estate 2018 Organizer: EUROMONEY Date December 28, 2018 Award Name Most Trusted Company Based on Corporate Governance Perception Index (CGPI) Event: Good Corporate Governance Award 2018 Organizer: SWA & IICG Date December 19, 2018 PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 147
  148. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Sertifikasi Certification Name Quality Management Systems Organizer: SAI Global Date January 11, 2018 - January 10, 2021 Certification Name ISO 9001:2015 Provision of In House Learning and e-Learning/Digital Learning for BNI Employees Organizer: SGS Date March 9, 2017 – January 18, 2019 Certification Name Information Technology (IT Security Management) Organizer: SGS Date September 14, 2018 Certification Name SNI ISO 9001:2015 Satisfactory Surveillance Audits) Organizer: SGS Date November 5, 2018 148 Adapting Quickly to Face Change Certification Name Tier lll Design Organizer: Uptime Institute Certified Date September 2018 Certification Name Information Technology (IT) Operation Services Organizer: SGS Date 9 September 2018 – 26 September 2019 Certification Name SNI ISO 9001:2015 Banking Operations for Guarantee Letter, Real Time Gross Settlement (RTGS) & Remmittance Services Organizer: SGS Date November 5, 2018 - November 5, 2021 Certification Name Tier lll Facility Organizer: Uptime Institute Certified Date December 31, 2018 PT Bank Negara Indonesia (Persero) Tbk
  149. Company Profile NAMES AND ADDRESSES OF SUBSIDIARIES , ASSOCIATED ENTITIES, BRANCH OFFICES AND OVERSEAS REPRESENTATIVES AND REGIONAL OFFICES SUBSIDIARIES Subsidiary Office Subsidiary Office Address/Tel/Fax/Website PT Bank BNI Syariah Gedung Tempo Pavilion 1 Jl. HR. Rasuna Said Kav. 11 Kuningan, Jakarta 12950 Tel.: (021) 29701946 Fax.: (021) 29667935 Email: info@bnisyaria PT BNI Multifinance Gedung BNI Life Insurance Lantai 5 Jl. Aipda K.S. Tubun No. 67 Petamburan, Jakarta Pusat 10260 Hotline: (021) 290 22555 Fax. (021) 290 22146 www.bnimultifinance.co.id PT BNI Securities Sudirman Plaza Indofood Tower Lantai 16 Jl. Jend. Sudirman Kav. 76 - 78 Jakarta 12910 Tel./Call Center: (021) 2554 3946 Fax.: (021) 5793 5831 Email: bnisec@bnisecurities.co.id www.bnisecurities.co.id Address/Tel/Fax/Website PT BNI Life Insurance BNI Life Tower Lantai 21 The Landmark Center Jl. Jend. Sudirman No. 1 Jakarta 12910 Tel.: (021) 2953 9999 Fax.: (021) 2953 9998 www.bni-life.co.id Email: customer-care@bni-life.co.id Customer Care: (021) 5021 7626 SMS Center: 0811117626 BNI Remittance BNI Remittance Limited Flat/RM5 on GF, Nos 1-7 Keswick Street, Causeway Bay Hong Kong Tel.: +852 28908082 Fax.: +852 28908182 ASSOCIATED ENTITIES Associated Entity Office Address Tel/Fax/Website PT Sarana Bersama Pengembangan Indonesia (“SBPI”) Setiabudi 2 Building, Suite 502A, Jl HR Rasuna Said, Kav. 62 Kuningan, Jakarta, 12920 - PT Kustodian Sentral Efek Indonesia (“KSEI”) Gedung Bursa Efek Indonesia Tower 1, Lt.5 Jl. Jend. Sudirman Kav. 52-53, Jakarta, 12190 Telp : (62-21) 515 2855 Fax : (62-21) 5299 1199 Call Center : (62-21) 0800 186 5734 Website: www.ksei.co.id PT Pemeringkat Efek Indonesia Panin Tower - Senayan City, 17th Floor Jl. Asia Afrika Lot.19 Jakarta 10270, Indonesia Tel: (62-21) 7278 2380 Fax: (62-21) 7278 2370 Website: www.pefindo.com PT Bank Mizuho Indonesia Sinarmas Land Plaza Tower 2, Jl. M.H. Thamrin No.51, Jakarta Pusat 10350 Tel : (62-21) 3925222 Website : www.mizuhobank.co.id PT Bank Sumitomo Mitsui Indonesia Menara BTPN Lantai 35-37, Jalan Dr. Ide Anak Agung Gde Agung Kav. 5.5-5.6, Kuningan Timur Jakarta Selatan 12190 Tel : (62-21) 80862500 Website : www.smbc.co.id PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 149
  150. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk OVERSEAS BRANCH OFFICES, SUB BRANCH OFFICES, REPRESENTATIVES OFFICES AND REGIONAL OFFICES OVERSEAS BRANCH OFFICES Overseas Branch Office Address/Tel/Fax/Website Singapore Branch Office 39 Robinson Road #01-02, 02-02 and 06-01/04 Robinson Point Singapore 068911 Tel.: +65 6225 7755 Fax.: +65 6225 4757 Hong Kong Branch Office G/F Far East Finance Center, 16 Hartcourt Road Hong Kong Tel.: +852 25299871, 28618600 Fax.: +852 28656500 Tokyo Branch Office Kokusai Bld 1st Floor 3-1-1 Marunounchi Chiyoda-Ku Tokyo 100-0005, Japan Tel.: +81 3 3214 6565, 3214 5621 Fax.: +81 3 3212 6428, 3201 2633 London Branch Office 30 King Street, London EC2V 8AG Tel.: +44 (0) 20 7776 4646 Fax.: +44 (0) 20 7776 4699 New York Branch Office One Exchange Plaza 5th Floor Broadway New York NY. 10006 USA Tel.: +1 212 943 4750 +1 212 943 4760 Fax.: +1 212 344 5723 Seoul Branch Office 8th Floor Wise Tower,6-4, 5-ga Namdaemun-ro, Jung-gu Seoul Tel.: +82 2-6386-8046 OVERSEAS SUB BRANCH OFFICES Overseas Sub Branch Office Osaka Sub Branch Office Address/Tel/Fax/Website Nakanoshima Festival Tower 17th Floor 2-3-18 Nakanoshima Kita-ku Osaka 530-0005, Japan Tel.: +81 6470 83823 Fax.: +81 6470 83823 OVERSEAS REPRESENTATIVES OFFICES Overseas Representative Office Yangon Representative Office 150 Adapting Quickly to Face Change Address/Tel/Fax/Website BNI Yangon Office 3rd Floor Room #0303A Sakura Tower 339 Bogyoke Aung San Road Kyauktada Township – Myanmar PT Bank Negara Indonesia (Persero) Tbk
  151. Company Profile REGIONAL OFFICES Regional Office Address /Tel/Fax/Website Medan Regional Office Jl. Pemuda No. 12, Lantai 4 Medan 20151 Tel.: (061) 4567110, 4567002 Fax.: (061) 4567105, 4515754 Padang Regional Office Jl. Dobi No. 1, Lantai 3 Padang 25138 Tel.: (0751) 890005-08 Fax.: (0751) 890010-11 Palembang Regional Office Jl. Jend. Sudirman No. 132 Palembang 30126 Tel.: (0711) 361961-65, 321046 Fax.: (0711) 361966, 374160 Bandung Regional Office Jl. Perintis Kemerdekaan No. 3, Bandung 40117 Tel.:(022) 4240431-39, 4240534 Fax.:(022)4240432-4214926-4213107 Semarang Regional Office Jl. Letjen. MT. Haryono No. 16, Semarang 50122 Tel.: (024) 3556747, 3556746 Fax.: (024) 3547686, 3520636 Surabaya Regional Office Jl. Jend. A. Yani No. 286, Gedung Graha Pangeran Lt. 3-4, Surabaya 60292 Tel.: (031) 8292820 - 26 Fax.: (031) 8292805, 8292841 Makassar Regional Office Jl. Jend. Sudirman No. 1 Lt.3, Makassar 90115 Tel.:(0411)3620355-56,3621926 Fax.: (0411) 3619562, 3625395 Denpasar Regional Office Jl. Raya Puputan Renon No. 27 - Lantai 2, Renon Denpasar 82265 Tel.: (0361) 263304 - 08 Fax.: (0361) 227874, 263319 Banjarmasin Regional Office Jl. Lambung Mangkurat No. 30, Banjarmasin 70111 Tel.: (0511) 3353689, 3357063 Fax.: (0511) 3354409, 3357066 Jakarta Senayan Regional Office Jl. Jend. Gatot Subroto No. 55, Jakarta Pusat 10210 Tel.: (021) 2500025, 5706057 (Hunting) Fax.: (021) 2500033 Manado Regional Office Jl. Dotulolong Lasut No. 1 Manado 95122 Tel.: (0431) 868019, 862777 Fax.: (0431) 851852/865458 Jakarta Kota Regional Office Jl. Lada No. 1 - Jakarta 11110 Tel.: (021) 6901131- 2601090,2601148 Fax.: (021) 6901131, 6901182,2601165, 2601179 Jakarta BSD Regional Office Gedung BNI Kantor Wilayah Jakarta BSD, Lt.7 Kav. Sunburst Lot.1-5 Jl. Pahlawan Seribu Lengkong Gudang BSD City, Kota Tangerang Selatan, Banten. Tel.: (021) 80826860 Fax.: (021) 29514074 Jakarta Kemayoran Regional Office Jl. Lada No.1 Lt.2, Jakarta 11110 Tel.: (021) 2601177 Fax.: (021) 2601165 Papua Regional Office Jl. Kelapa II Entrop, Kota Jayapura, Papua 99224 Tel.: (0967) 5355311, 522354 Fax.: (0967) 533316 Yogyakarta Regional Office Jl. Trikora No.1, Yogyakarta 55122 Tel: (0274) 376287 Fax: (0274) 2872414 Malang Regional Office Jl. Jend. Basuki Rahmat No.75-77, Malang 65179 Tel: (0341) 3611945-47 Fax: (0341) 324565, 354767 PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 151
  152. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk INFORMATION AVAILABLE ON THE WEBSITE Home About Us Services Contact Us Get Started In accordance with the OJK regulation No.8/POJK.04/2015 regarding the issuers or public company websites, BNI’s company website includes important information on shareholders, the company group structure, financial performance analysis, financial statements of the last 5 years and the profiles of the Board of Commissioners and Board of Directors. The information presented on the website is updated regularly. Home News, promotions, events and basic loan rates Personal Contains information on deposits, debit card loans, retirement savings, bancassurance Business Contains information on business, international and treasury banking Wealth Contains information on service products, promotions and BNI’s priority banking programs such as BNI Emerald 152 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  153. Company Profile Company Contains information About BNI : 1. Vision and Mission 2. Awards 3. Corporate Culture 4. Organizational Structure 5. Commissioners Structure 6. Directors Structure 7. Information of Secretary to the Board of Commissioners Governance 1. Guidelines and Policies 2. General Meeting of Shareholders (GMS) including : a. GMS notices b. GMS call c. GMS summary results and minutes 3. Information of Committees below the Board of Commissioners 4. Guidelines and Rules the Board of Commissioner, the Board of Director and Governance integrated. 5. Whistle Blowing Reporting System (WBS) 6. Code of Ethics 7. Articles of Association 8. Patriot Acts Certification and AML, Governance Report, and 9. The annual report the implementation of Good Corporate Governance and integrated governance. 3. 4. 5. 6. b. Dividend Policy c. Rating Report d. Analyst Coverage Stock Performance, including: a. Share Price b. Chronology of Share Listing c. Shareholder Structure Investor News and Calendar, including: a. Announcements to Investors b. Investor Calendar c. BNI Dividend Schedule and Announcement Investors and Related Institutions Contacts Corporate Social Responsibility, including: a. A description of the BNI Sharing Program, which consists of: Program Form and Scope b. BNI Go Green Program description c. Kampoeng BNI Program description, and d. KAMI Bersama BNI Program E-Banking Contains information on BNI ATMs, BNI SMS Banking, BNI Internet Banking, BNI Mobile Banking, BNI Phone Banking, O-Branch, Agent46, TapCash, Online Debit, UniQu, BNI Ipay and BNI Smartpay. Contact Contains information on Branch Locations, Global Network and BNI Contacts Information on Investor Relations: 1. Reports and Presentations including: a. Annual Report b. Sustainability Report c. DPLK BNI Report d. Consolidated Financial Statement (audited) e. Financial Statements Quarter f. Financial Statements Monthly g. PKBL Report h. Corporate Presentation 2. Corporate Financial Performance, including: a. Financial Highlights PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 153
  154. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk EDUCATION AND/OR TRAINING FOR THE BOARD OF COMMISSIONERS, BOARD OF DIRECTORS, COMMITTEES, CORPORATE SECRETARY, AND INTERNAL AUDIT UNIT BOARD OF COMMISSIONERS’ COMPETENCY DEVELOPMENT During 2018, BNI’s Board of Commissioners attended various competency improvement programs, such as training, workshops, conferences and seminars, as per the following table: Tabel Pengembangan Kompetensi Dewan Komisaris Name Ari Kuncoro President Commissioner / Independent Commissioner Competency Development / Training Material Time and Place Type of Training and Organizer 1st Roundtable on Southeast Asian Economic and Trade April 17, 2018 Washington DC Center for Strategic & Interntaional Studies (CSIS) CSIS Global Leaders Forum July 23, 2018 Washington DC Center for Strategic & Interntaional Studies (CSIS) Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018 Jakarta BNI Corporate University “Key Risk Management Challenges in 2018” September 27 – 28, 2018 Makassar Bankers Association for Risk Management (BARA) Wahyu Kuncoro Vice President Commissioner “Risk Management on Credit Process” November 6 – 7, 2018 Yogyakarta Peak Pratama Indonesia Revrisond Baswir Independent Commissioner "Executive Risk Management Refreshment Program" July 2 – 9, 2018 Dusseldorf, Frankfurt & Bern, Jerman Lembaga Pengembangan Perbankan Indonesia (LPPI) Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University "Executive Risk Management Refreshment Program" July 2 – 9, 2018 Dusseldorf, Frankfurt & Bern, Jerman Lembaga Pengembangan Perbankan Indonesia (LPPI) Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University Pataniari Siahaan Independent Commissioner Ahmad Fikri Assegaf Independent Commissioner Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University Sigit Widyawan Independent Commissioner Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University “Key Risk Management Challenges in 2018” September 27 – 28, 2018 Makassar Bankers Association for Risk Management (BARA) Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University “Key Risk Management Challenges in 2018” September 27 – 28, 2018 Makassar Bankers Association for Risk Management (BARA) Bistok Simbolon 154 Position Commissioner Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  155. Company Profile Name Joni Swastanto Marwanto Harjowiryono Position Competency Development / Training Material Commissioner Commissioner Time and Place Type of Training and Organizer Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University “Key Risk Management Challenges in 2018” September 27 – 28, 2018 Makassar Bankers Association for Risk Management (BARA) "Executive Risk Management Refreshment Program" July 2 – 9, 2018, Dusseldorf, Frankfurt & Bern, Jerman Lembaga Pengembangan Perbankan Indonesia (LPPI) “Key Risk Management Challenges in 2018” September 27 – 28, 2018 Makassar Bankers Association for Risk Management (BARA) BOARD OF DIRECTORS’ COMPETENCY DEVELOPMENT During 2018, BNI’s Board of Directors attended various competency improvement programs, such as training, workshops, conferences and seminars, as per the following table: Board of Directors’ Competency Development Name Achmad Baiquni Herry Sidharta Position President Director Vice President Director Competency Development/Training Material Time and Place Type of Training Organizer Opening Assesment KPKU January 29, 2018 Jakarta Meeting KPKU High Level International Conf New Growth Models in a Changing Global Landscape March 27, 2018 in Fairmont Jakarta Conference IMF Discovery and Dream workshop in the framework of preparing the BNI Corporate Plan 2019-2023 April 12, 2018 Jakarta Workshop Gedung BNI Kantor Pusat BNI dan MC Kinsey Discovery and Dream workshop in the framework of preparing the BNI Corporate Plan 2019-2023 April 30, 2018 Jakarta Workshop Gedung BNI Kantor Pusat BNI dan MC Kinsey Design Workshop in the framework of preparing the BNI Corporate Plan 2019-2023 May 21-22, 2018 Jakarta Workshop BNI & MC Kinsey Workshop Delivery in the framework of preparing the BNI Corporate Plan 2019-2023 June 06, 2018 Jakarta Workshop BNI Digital leadership forum August 07, 2018 Jakarta Workshop BNI Business Meeting BNI Semester II 2018 August 09-10, 2018 Jakarta Workshop BNI Speaker at the Pancasila entrepreneurship Festival August 13, 2018 Jakarta Meeting Universitas Pancasila Refreshment APU PPT August 30, 2018 Jakarta Refreshment BNI Level V Risk Management Certification Program September 24, 2018 Jakarta Refreshment BSMR Book launch and review “Turbulence in Indonesian Sport” November 15, 2018 Jakarta Meeting Kementerian Pemuda dan Olah Raga Corporate Governance Perception Index November 19, 2018 Jakarta Meeting BNI PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 155
  156. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Name Putrama Wahju Setyawan Catur Budi Harto Anggoro Eko Cahyo 156 Position Director of Corporate Business Director of Small Business & Network Director of Finance Competency Development/Training Material Time and Place Type of Training Organizer Book launch and review “Turbulence Sport in Indonesia” November 15, 2018 Jakarta Meeting Kementerian Pemuda dan Olah Raga Corporate Governance Perception Index November 19, 2018 Jakarta Meeting BNI Discovery and dream workshop in the framework of preparing the BNI corporate plan 2019-2023 Thursday April 12, 2018 Jakarta in BNI Building Head Office, 32 floor Workshop BNI dan MC Kinsey Update BSMR V April 12, 2018 Jakarta Risk Culture and Strategic Trend In Indonesian Banking BSMR Design Workshop in the framework of preparing the BNI corporate plan 2019-2023 June 6, 2018 Jakarta in BNI Head Office Workshop BNI REN Division Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018 Jakarta BNI Building Head Office 25 floor Sosialisasi BNI Divisi BNV National Startup Agritech Conference 2018 February 6, 2018 Jakarta Convention Hall ICE –BSD City Conference Himpunan Alumni IPB Talk Show Creative Santri Kreatif Preneure Indonesia March 6, 2018 Jakarta Bengkel Kreatif Hello Indonesia, Tangerang Forum Nahdatul Ulama (NU) Speaker: Refinement Training for Small Segments and KUR 2018 & Supervision of WBN Regional Office March 16, 2018 Bandung, Bandung Regional Office Forum Internal BNI Speaker: Small Segment Refreshment and Grain Absorption Program March 19, 2018, Surabaya, Surabaya Regional Office Forum Internal BNI Half Day Meeting CWMA 2018 April 5, 2018 Jakarta Meeting CWMA Speaker: Preparation Workshop for the Pilot Tea Plantation Development Plan April 9, 2018, Jakarta, Coordinating Ministry for Economic Affairs Workshop Coordinating Ministry for Economic Affairs Discovery and dream workshop in the framework of preparing the BNI corporate plan 2019-2023 April 12, 2018 Jakarta Workshop BNI and McKinsey Speaker: Opening of the HNS and HCS Workshop April 20, 2018, Bogor, Novotel Bogor Workshop Internal BNI FGD Digital Economy Challenges in Indonesia March 12, 2018, Jakarta, Coordinating Ministry for Economic Affairs, Jl. Medan Merdeka Barat No. 7 Meeting National Economic and Industrial Committee of the Republic of Indonesia Meeting “Optimizing Momentum, Strengthening Structure” Accompanied by the 2017 Indonesian Economic Report Book Launch Jakarta, March 28, 2018, Function Room, Gedung Thamrin Lantai 4 BI Meeting Bank Indonesia Meeting on Digital Economy Trends: Era of Electronic Transactions, Opportunities and Challenges dari Harian Bisnis Indonesia April 4, 2018, Jakarta, The Westin Hotel Kuningan Meeting Bisnis Indonesia As resource at Coffee Break with Joint Chiefs of Police regarding "Skimming" April 10, 2018, Jakarta, Gedung Promoter Polda Metro Jaya Meeting Kapolda Metro Jaya Discovery and dream workshop in the framework of preparing the BNI corporate plan 2019-2023 Thursday April 12, 2018 Cakrawala Room 32 Floor Workshop BNI As resource at the "Building a New Era of Indonesian Payment Systems" Event April 25, 2018, Jakarta, Grand Hyatt Hotel Meeting Artajasa Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  157. Company Profile Name Rico Rizal Budidarmo Adi Sulistyowati Bob Tyasika Ananta Position Director of Treasury and International Director of Institutional Relations Director of Risk Management Competency Development /Training Material Time and Place Type of Training Organizer Conference JP Morgan ASIA January 11-12, 2018 Singapore Conference JP Morgan Daiwa Investment Conference Tokyo 2018 March 7 9, 2018 Tokyo Conference Daiwa Workshop Design Corporate Plan 2018 with McKinsey April 12, 2018, BNI Head Office Jakarta Workshop BNI and McKinsey Discovery and dream workshop in the framework of preparing the BNI corporate plan 2019-2023 April 12, 2018 Jakarta Workshop BNI REN Division _ MC Kinsey CSIS-BNI Roundtable on U.S Southeast Asia Financial and investment Relations April 17, 2018 Washington DC Conference CSIS High Level Discussion Forum CSIS-BNI July 23, 2018 Washington DC Conference CSIS Business Meeting Semester II 2018 August 9-10, 2018, Gedung BNI Pejompongan Jakarta Meeting REN Division Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, BNI Head Office Jakarta Workshop PPATK Digital Leadership Forum September 7, 2018, BNI Head Office Jakarta Workshop BNI Certification Training Treasury Level Advance September 8, 2018, Hotel Pulman Jakarta Training Lembaga Sertifikasi Profesi Perbankan Indonesia Economy and Investment Outlook 2019 December 12, 2018 Hongkong Workshop INT Division & Bisnis Indonesia As resource at the Development of Transmigration Areas at the Ministry of Villages January 30, 2018 Jakarta Meeting Ministry of Villages FGD Implementation of superior products in rural areas with the Ministry of Villages partnership pattern January 31. 2018 Jakarta FGD Ministry of Villages SPAN Socialization with TNI AU January 31, 2018 Jakarta Meeting TNI AU As resource at the Ministry of Education and Culture Natonal Meeting March 14, 2018 Jakarta Meeting Ministry of Education and Culture SPAN Socialization with Ministry of Defence March 7, 2018 Jakarta Meeting Ministry of Defence Discovery and dream workshop in the framework of preparing the BNI corporate plan 2019-2023 April 12, 2018 Jakarta Workshop BNI and McKinsey National Employment Meeting April 25, 2018 Jakarta Meeting Ministry of Social Affairs KEIN Meets The CEO "Managing Economic Potential 2018" January 17, 2018 Jakarta Meeting KEIN KPKU BUMN Executive Briefing "Socialization of Indonesian Payment System Association Provisions (KASPI)" January 24, 2018 Jakarta Meeting Ministry of SOEs Panel Discussion & Book Launch Bpk Aswin Wirjadi "Game Changing" January 26, 2018 Jakarta Workshop Aswin Wirjadi Meeting Indonesia Outlook 2018 February 6, 2018 Jakarta Meeting Indonesia Outlook Banking Industry Financial Prospects & Digital Challenges by Bpk Agus DW Martowardjojo February 21, 2018 Jakarta Meeting PERBANAS PERBANAS PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 157
  158. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Name 158 Position Competency Development/Training Material Time and Place Type of Training Organizer ASEAN Financial Innovation Network March 7, 2018 Jakarta Workshop ASEAN Financial Innovation International Leadership Meeting "Transformational Leadership in the Next Era: Issues, Challenges, and Strategy" March 8, 2018 Bali Meeting - Bank Indonesia Bank Indonesia Business Forum: Corporate Financing through Purchasing Corporate Bonds March 19, 2018 Jakarta Meeting Business Forum 2018 Retail Banking Forum March 21, 2018 Jakarta Meeting Retail Banking Forum Meeting Virtual Currency: What and how is the risk for the wider community March 26, 2018 Jakarta ISEI - Meeting ISEI The Power of Collaboration Koran SINDO March 27, 2018 Jakarta SINDO Meeting SINDO Discovery and dream workshop in the framework of preparing the BNI corporate plan 2019-2023 April 12, 2018 Jakarta Workshop BNI and McKinsey Annual Bankers Gathering May 15, 2018, Pacific Place Jakarta Workshop PERBANAS Book Launch and Discussion Financial stability - Challenges in financial system stability amid global and domestic developments May 18, 2018, Bank Indonesia Jakarta Meeting Governor BI PWC Survey : Digital Banking in Indonesia 2018 July 10, 2018, The Westin Jakarta Meeting PwC The Indonesia Green Finance Roundtable "The Role of Government Facilities & Innovative Finance Instruments" July 23, 2018, Sahid Sudirman Center Jakarta International Meeting SMI Workshop Early Warning System Konglomerasi Keuangan July 27, 2018 Jakarta Workshop OJK BARa Risk Forum August 1, 2018, Mandiri Club Jakarta Meeting BARa The 3rd Asia Pasific Research in Social Science and Humanities (APRiSH) Convention & Innovation in Disruption Era August 15, 2018, JS Luwansa Jakarta International Meeting UI Meeting Refreshment APU PPT August 30, 2018, BNI Head Office Jakarta Meeting PPATK BNI Talk "Banking On The Millenial Perspective" September 4, 2018, BNI Head Office Jakarta Workshop BNI Program SESPIBANK Overview Bank Strategic Management September 13, 2018, LPPI Kemang Jakarta Meeting LPPI Assessor Refreshment Test September 27 28, 2018 LSPP Fatmawati Jakarta Refresher LSPP Meeting FGD "Assessing Potential Financing Scheme of PV Solar Rooftop Installation in Housing and Commercial Buildings" October 10, 2018, Double Tree Hilton Hotel Jakarta Meeting Ministry of Energy and Mineral Resources Business Forum: Outlook Indonesian Economy in Political Year 2019 Jakarta, October 24, 2018, BNI Head Office Workshop BNI REN Division Public Discussion Meeting Financial System Policy Response to Recent Economic Developments November 1, 2018, Gedung Juanda – Aula Jakarta Meeting Ministry of Finance Meeting Indonesian Risk Management Outlook 2019 Achieving High Performance Amid political Risk November 6, 2018, Pullman Hotel Jakarta Meeting LPPI Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  159. Company Profile Name Endang Hidayatullah Position Director of Compliance Competency Development /Training Material Time and Place Type of Training Organizer IAEI Meeting "Building the Economy through Islamic Banking Inclusion" November 15, 2018, IAIN Sultan Amai Gorontalo Gorontalo Meeting IAEI Meeting SGDs in the Industry 4.0 Era December 7, 2018, Bappenas / PPN Ministry Jakarta Meeting Bappenas / PPN Ministry Economic OMeeting utlook 2019 - Banking Business in the Digital Age: Risk and Mitigation December 10, 2018, Plaza Mandiri Jakarta Meeting IBI BSMR Level 5 March 30, 2018 Jakarta Sertification BSMR Workshop Discovery & Dream Corporate Plan BNI 2018 April 12, 2018 Jakarta Workshop BNI and McKinsey Meeting "The Active Role of Banking Compliance Safeguard Stability through Prevention of Terrorism Funding" June 26, 2018, Hotel Fairmont Jakarta Meeting Banking Compliance Director Communication Forum Workshop " Legal Issues related to the development of digital economy in Indonesia" July 24, 2018, Hotel Bidakara Jakarta Workshop Business and Bankruptcy Law Forum Training FKDKP 2nd generation 2018 August 1-2, 2018, Hotel Aston Makassar Training Banking Compliance Director Communication Forum Business Meeting Semester II 2018 August 9-10, 2018, BNI Pejompongan Jakarta Business Meeting BNI REN Division Rakerda Serikat Pekerta DPD WJY with the theme How to be a great leader August 25, 2018 Bogor Working Meeting SP BNI Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018 Jakarta Meeting BNI BNV Division National Convention Workshop Draft Indonesian National Work Competency Standards (RSKKNI) for General Banking September 26, 2018, Hotel Pullman Central Park Jakarta Workshop OJK Socialization of Achievements and Direction of Implementation for the Financial Conglomerate’s Integrated Regulatory and Oversight Functions November 15, 2018, Hotel JS Luwansa Jakarta Socialization OJK Sharing Session with the theme Digital Leadership in Millennial Era November, 22 23, 2018, Hotel The Rinra Makassar Sharing Session Forum Human Capital Indonesia (FHCI) Sharing session with the theme Driving Business Agility in Discruptive Era November 29, 2018, Ballroom Grha BNI Lt. 25 Jakarta Sharing Session Prasetiya Mulya Executive Learning Institute KPK Coordination Meeting with Banking, Insurance and KSEI Partners November 29, 2018 Jakarta Working Meeting KPK International Business Integrity Confrence (IBIC) 2018 December 4-5, 2018 Jakarta Converence KPK Awards Presentation Bringing About CG Changes: Opportunitites and Challenges for Directors December 10, 2018, Hotel Le Meridien Jakarta Award Event Indonesian Institute for Corporate Directorship (IICD) PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 159
  160. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Name Tambok P. Setyawati Dadang Setiabudi 160 Position Director of Retail Business Director of Information Technology & Operational Competency Development/Training Material Time and Place Type of Training Organizer Refresher BSMR April 2, 2018 Jakarta Refresher LSPP Workshop Discovery and Dream Corporate Plan BNI 2018 April 12, 2018 Jakarta Workshop BNI and McKinsey Workshop HNS and HCR 2018 April 19, 2018 Bogor Workshop BNI Business Forum Food and Beverage Industry in the framework of 4.0 Industrial Revolution May 2, 2018 Jakarta Workshop BNI Workshop Transactional Banking Solutions 2018 May 28, 2018 Jakarta Workshop Tourism Business Forum July 25, 2018 Jakarta Workshop BNI Business Meeting BNI Semester II 2018 August 9-10, 2018 Jakarta Workshop BNI Refresher APU PPT August 30, 2018 Jakarta Refresher BNI The Thousand National Indonesian Women's Organizations and ICW Congress September 14, 2018 Yogyakarta Workshop Ministry of SOEs Cyber security and Banking Technology from the User and IT Perspective September 26, 2018 Jakarta Workshop BNI and JP Morgan Media Workshop: Special Card Product Programs and Innovations IMF – WB Annual Meeting 2018 October 4, 2018 Jakarta Workshop BNI Grand Launch of CNBC Indonesia and CEO Summit October 10, 2018 Bali Workshop BNI Financial Institutions Expo (Fin Expo) October 27, 2018 Jakarta Workshop Bank Indonesia Meeting: Payment Gateway October 31, 2018 Jakarta Meeting BI Workshop Road Map Retail Banking Sector until 2023 November 2, 2018 Jakarta Workshop BNI Workshop BSL Division November 10, 2018 Jakarta Workshop BNI Knowledge Sharing: IT Strategic Plan (ITSP) BNI November 14, 2018 Jakarta Workshop BNI Consumer Sales Workshop SLN Division 2019 November 28, 2018 Jakarta Workshop BNI Sharing Session with Prasetiya Mulya Executive Learning Institute: Bpk. Ruben Saragih, MM., MA. November 29, 2018 Jakarta Workshop BNI REI National Working Meeting 2018 December, 2018 Bali Workshop Real Estate Indonesia Retail Banking Sector Workshop 2018 December 7-8, 2018 Jakarta Workshop BNI As a Resource Universitas Padjajaran golden accounting birthday with the theme "disruptive technology and innovation February 2, 2018 BANDUNG Aula Graha Sanusi Unpad Bandung UNPAD UNPAD Level 5 Risk Management Certification Body February 17, 2018 Jakarta GARP BSMR Exclusive Invitation to plug and play fintech dan insurtech March 5 -6, 2018 Singapore PlUG And PLAY PlUG And PLAY Award from iCiO " THE MOST INNOVATIVE CIO 2018" March 7, 2018 The Ritz Carlton Pasific Place Jakarta iCiO Award 2018 iCiO Pertamina Digital Expo January 25-27, 2018, Pertamina Office Jakarta Meeting Pertamina Discovery and dream workshop in the framework of preparing the BNI corporate plan 2019-2023 April 12, 2018 Jakarta Workshop BNI and McKinsey EXPO 2.0 April, 2018, Djakarta Theatre XXI Ballroom Jakarta PlUG And PLAY PlUG And PLAY Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  161. Company Profile Name Position Competency Development /Training Material Time and Place Type of Training Organizer Blockchain The Next Digital Revolution in Every Industry March 7, 2018 The Ritz Carlton Jakarta Pasific Place Jakarta CTI SUMMIT 2018 CTI As a Resource Infobank Digital Leadership Forum Digital Mastery for Business Leader Tranformation in Disruption Era May 8, 2018, Hotel Grand Sahid Jaya Meeting Infobank Sharing Session with LKPP Utilization of marketing opportunities for SOE products through E-Catalog May 16, 2018 Jakarta Sharing Session KBUMN Receiving award Raked I in the category E-Banking at the banking services excellence award 2018 event June 5, 2018, Hotel Shangrilla, Jakarta Awards Infobank Irving Fisher Committee Internasional Meeting on Big Data July 26, 2018, Nusa Dua Bali Meeting Bank Indonesia Refresher APU Oleh PPATK August 30, 2018 Jakarta Socialization BNI FGD Operational Back Office strengthening back office, operational risk awareness and future challenges September 7, 2018, Hotel Pullman Jakarta FGD BI Digitization in the Business Era September 14, Ballroom Bidakara Grand Savoy Bandung Meeting UNPAD Indonesian Banking Award (Rated 1 the best digital banking services) September 26, 2018, Hotel JS Luwansa Kuningan Tempo Group Jakarta Banking Awards Tempo Group Annual Meeting 2018 IMF World Bank Group October 2018 Bali Annual Meeting IMF EXPO October 16, 2018, Soehanna Hall The Energy Building Jakarta PlUG And PLAY PlUG And PLAY F5 Networks International Technology Center Seattle October 19-20, 2018 Seattle USA Meeting F5 Oracle Open World October 22-26, 2018 San Fransisco Annual Convention Oracle Joint communication plan for developing report integration November 1, 2018 Jakarta Meeting BI Speaker at IBEX 2018 November 15, 2018, Hotel Fairmont Senayan Jakarta Meeting PERBANAS OJK 7th National Meeting November 13, 2018 Jakarta Meeting OJK PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 161
  162. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk SENIOR EXECUTIVE VICE PRESIDENT COMPETENCY DEVELOPMENT During 2018, members of Executive Vice Preseident attended various competency improvement programs, such as training, workshops, conferences and seminars, as per the following table: Name Yuddy Renaldi Ronny Venir 162 Position SEVP Remedial & Recovery SEVP Commercial Banking Adapting Quickly to Face Change Competency Development / Training Material Time and Place Type of Training Organizer BSMR Level 5 February 17, 2018 Jakarta Certification BSMR Sharing Session THEME: "Indonesia Post Commodity Bonanza and Its Implications in the Banking Sector" May 18, 2018 Jakarta Workshop BNI Sharing Session & Competency Improvement in Facing Legal Problems May 28, 2018 Jakarta Workshop BNI University Workshop "Anti Money Laundering Refreshment" August 30, 2018 Jakarta Workshop BNI Workshop Cyber Security & Banking Technology September 26, 2018 Jakarta Workshop BNI Discovery and Dream Workshop in the Context of BNI's 2019-2023 Corporate Plan Preparation April 12, 2018 Jakarta Workshop Gedung BNI Kantor Pusat BNI Head Office Building Providing guidance on "Profitability Optimization Through Portfolio Management and Risk Awareness", To Business Management Group Leaders & Credit Risk Managers " May 7, 2018 Jakarta Workshop BNI Briefing on Transactional Banking Solutions Workshop 2018 May 28, 2018 Jakarta Workshop BNI Workshop "Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector" August 30, 2018 Jakarta Workshop BNI University DDI 2018 Refreshment Assessment September 5, 2018 Jakarta Refreshment PT DDI Examiner in the SVP and VP Brevet Credit Comprehensive Exams October 3, 2018 Jakarta Speaker at the WJK SP DPD Leadership Development Program October 13, 2018 Jakarta Workshop BNI Speaker at the Shipping Industry Training event for the Middle Credit Center (SKM). November 24, 2018 Batam Workshop BNI BNI PT Bank Negara Indonesia (Persero) Tbk
  163. Company Profile AUDIT COMMITTEE COMPETENCY DEVELOPMENT During 2018 , members of the Audit Committee attended various competency improvement programs, such as training, workshops, conferences and seminars, as per the following table: Audit Committee Competency Development Name Position Pataniari Siahaan Competency Development / Training Material Chairman Time and Place Type of Training and Organizer "Executive Risk Management Refreshment Program" July 2 – 9, 2018, Dusseldorf, Frankfurt & Bern, Jerman Lembaga Pengembangan Perbankan Indonesia (LPPI) Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University August 30, 2018, Jakarta BNI Corporate University Ahmad Fikri Assegaf Member Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” Donnaria Silalahi Member - - - Lungguk Gultom* Member - - - *) has served as a Member of the Audit Committee since January 2, 2018 NOMINATION AND REMUNERATION COMMITTEE COMPETENCY DEVELOPMENT During 2018, members of the Nomination and Remuneration Committee attended various competency improvement programs, such as training, workshops, conferences and seminars, as per the following table: Nomination and Remuneration Committee Competency Development Name Position Period Ari Kuncoro Chairman September 13 December 31, 2018 Competency / Training Development Material Time and Place Type of Training and Organizer 1st Roundtable on Southeast Asian Economic and Trade April 17, 2018 Washington DC Center for Strategic & Interntaional Studies (CSIS) CSIS Global Leaders Forum July 23, 2018 Washington DC Center for Strategic & Interntaional Studies (CSIS) Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University “Key Risk Management Challenges in 2018” September 27 – 28, 2018 Makassar Bankers Association for Risk Management (BARA) Wahyu Kuncoro Member September 13 December 31, 2018 “Risk Management on Credit Process” November 6 – 7, 2018 Yogyakarta Peak Pratama Indonesia Revrisond Baswir Member September 13 December 31, 2018 "Executive Risk Management Refreshment Program" July 2 – 9, 2018 Dusseldorf, Frankfurt & Bern, Jerman Lembaga Pengembangan Perbankan Indonesia (LPPI) Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University "Executive Risk Management Refreshment Program" July 2 – 9, 2018 Dusseldorf, Frankfurt & Bern, Jerman Lembaga Pengembangan Perbankan Indonesia (LPPI) Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University Pataniari Siahaan Member 13 September - 31 Desember 2018 PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 163
  164. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Name Bistok Simbolon Joni Swastanto Marwanto Harjowiryono Sigit Widyawan Position Member Member Member Member Period Competency / Training Development Material September 13 December 31, 2018 September 13 December 31, 2018 September 13 December 31, 2018 September 13 December 31, 2018 Time and Place Type of Training and Organizer Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University “Key Risk Management Challenges in 2018” September 27 – 28, 2018, Makassar Bankers Association for Risk Management (BARA) Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University “Key Risk Management Challenges in 2018” September 27 – 28, 2018, Makassar Bankers Association for Risk Management (BARA) "Executive Risk Management Refreshment Program" July 2 – 9, 2018 Dusseldorf, Frankfurt & Bern, Jerman Lembaga Pengembangan Perbankan Indonesia (LPPI) “Key Risk Management Challenges in 2018” September 27 – 28, 2018, Makassar Bankers Association for Risk Management (BARA) Compliance Forum: “Anti Pencucian Uang dan Pencegahan Pendanaan Terorisme di Sektor Jasa Keuangan” August 30, 2018, Jakarta BNI Corporate University “Key Risk Management Challenges in 2018” September 27 – 28, 2018 Makassar Bankers Association for Risk Management (BARA) Reny Wiriandhani Anggota September 13 December 31, 2018 - - - Efita Praharani Anggota September 13 December 31, 2018 Pengetahuan Dasar di Bidang Dana Pensiun October 26, 2018 Jakarta Lembaga Sertifikasi Profesi Dana Pensiun RISK MONITORING COMMITTEE COMPETENCY DEVELOPMENT During 2018, members of the Risk Monitoring Committee attended various competency improvement programs, such as training, workshops, conferences and seminars, as per the following table: Risk Monitoring Committee Competency Development Name Revrisond Baswir Bistok Simbolon Joni Swastanto 164 Position Chairman Member Member Adapting Quickly to Face Change Period January 1, December 31, 2018 1 Januari – 31 December 2018 Competency / Training Development Material Time and Place Type of Training and Organizer “Executive Risk Management Refreshment Program” July 2 – 9, 2018 Dusseldorf, Frankfurt & Bern, Jerman Lembaga Pengembangan Perbankan Indonesia (LPPI) Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University “Key Risk Management Challenges in 2018” September 27 28, 2018, Makassar Bankers Association for Risk Management (BARA) Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University “Key Risk Management Challenges in 2018” September 27 28, 2018, Makassar Bankers Association for Risk Management (BARA) PT Bank Negara Indonesia (Persero) Tbk
  165. Company Profile Name Position Period Competency / Training Development Material Time and Place Type of Training and Organizer Irwan Rinaldi Member 1 Januari – 31 Desember 2018 - - - Kartika Siwi Member Desember 2018 - - - INTEGRATED GOVERNANCE COMMITTEE COMPETENCY DEVELOPMENT During 2018, members of the Integrated Governance Committee attended various competency improvement programs, such as training, workshops, conferences and seminars, as per the following table: Integrated Governance Committee Competency Development Name Revrisond Baswir Joni Swastanto Position Chairman Member Period January 1 December 31, 2018 January 1 December 31, 2018 Competency / Training Development Material Time and Place Type of Training and Organizer “Executive Risk Management July 2 – 9, 2018 Dusseldorf, Frankfurt & Bern, Jerman Lembaga Pengembangan Perbankan Indonesia (LPPI) Refreshment Program” August 30, 2018, Jakarta BNI Corporate University Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University “Key Risk Management Challenges in 2018” September 27 – 28, 2018, Makassar Bankers Association for Risk Management (BARA) Krisna Wijaya Member Januari 1 - June 26, 2018 - - - Parikesit Suprapto Member December 13 –31 2018 Banking Risk Management Level 2 May 15, 2018, Jakarta Sertifikasi - Lembaga Sertifikasi Profesi Perbankan Risk Control Self Assesment in Insurance Industry & Key Risk Indicators November 29, 2018, Jakarta Sekolah Tinggi Manajamen Asuransi Trisakti (LPMA – STPA Trisakti) Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University A Half Day Training “Risk Management” November 29, 2018, Jakarta Lembaga Pengembangan Manajemen Asuransi Sekolah Tinggi Manajamen Asuransi Trisakti (LPMA – STMA TRISAKTI) Workshop Pra-Ijtima’ (Annual Meeting) Syariah Supervisory Board Islamic Financial Institutions 2018 Insurance and Sharia Pension Funds October 4, 2018, Jakarta Dewan Syariah Nasional Majelis Ulama Indonesia January 1 December 31, 2018 Traing Refreshment Risk Management April 7, 2018, Jakarta BSMR Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University January 1 December 31, 2018 - - - Utang Ranuwijaya Rizqullah Hasanuddin Member Member Member January 1 December 31, 2018 PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 165
  166. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Name Rosa Lima Dwi Mutiari Eddy Siswanto Suhendry Hafni Setyowati Position Member Member Member Anggota Period January 1 December 31, 2018 January 1 December 31, 2018 December 13 –31 2018 1 Januari – 31 Desember 2018 Competency / Training Development Material Time and Place Type of Training and Organizer Nasional Seminar "Banking Financing Companies" May 8, 2018, Jakarta APPI & OJK National Seminar "Financing Industry in the Capital Market" June 26, 2018, Jakarta APPI dan OJK Financing Company Risk Management Sertification December 11, 2018, Jakarta BSMR Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University New Paradigm in Infrastructure Financing (the 2018 IMF-World Bank Annual Meetings) October 9, 2018, Tanjung Benoa, Bali IMF dan Kementerian Keuangan RI. Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University Compliance Forum: “Anti Money Laundering and Prevention of Terrorism Funding in the Financial Services Sector” August 30, 2018, Jakarta BNI Corporate University Workshop Assesor (Update Tool Assesment Process) November 2, 2018, Jakarta Lembaga Sertifikasi Profesi Perbankan (LSPP) - - - CORPORATE SECRETARY COMMITTEE COMPETENCY DEVELOPMENT During 2018, the Corporate Secretary did not attend external training. However, Corporate Secretary attended seminars as a resource person at the following: 1. West Java Province Regional Financial Stability Discussion Forum on November 15, 2018, held by Bank Indonesia in Jakarta, 2. Intelligence Analysis on the Effects of National Economic Development on National Security, on December 12, 2018 in West Java organized by the Indonesian National Army (TNI). 166 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  167. Company Profile INTERNAL CONTROL UNIT COMPETENCY DEVELOPMENT During 2018 , BNI’s Internal Control Unit attended various competency improvement programs, such as training, workshops, conferences and seminars, as per the following table: Internal Control Unit Competency Development Competency Development / Training Material Auditor Refresher (concerning Internal Audit and BNI’s business / organization development) Place January and March 2018 Training Internal Control COSO January 2018 Training Design Thinking January 2018 Training Report Writing January 2018 Training Improving Self Confidence March 2018 Seminar “Quo Vadis BUMN” by the Ministry of SOEs April 2018 Seminar "Leadership as a Role Model for Culture Building and the Fraud System” July 2018 Workshop "Anticipating OTT in Corruption Crime" July 2018 National Conference III - 2018: "The Role of Internal Auditors in Improving Governance, Risk and Control in a Disruptive Era" August 2018 Sharing Vision CITPE (Certified IT Procurement Expert) August 2018 Workshop "Investigative Interview Skills" August 2018 National Conference II - 2018 at The Trans Resort Bali: "Nurturing Agile Internal Auditors in Disruptive Times" August 2018 Workshop "Effective Fraud Mitigation" August 2018 Workshop "Affect on the The Procurement of Goods / Services Audit Related to the Rising Number of Irregularities in the Procurement Process" August 2018 Workshop "Fraud Prevention and Detection: Forensic Data Analytics Approach" October 2018 Workshop "Urgency and Application of Financial Audit and Tax Examinations in the BUMN and BUMD Environment" October 2018 National Conference X IAIB - 2018: "Fostering an Innovative Internal Auditing as a Key Element in Innovative Banking" November 2018 Workshop "Mobile Forensic Investigation Course" November 2018 CITPE Training and Certification (Certified IT Procurement Expert) November 2018 IT Governance, Risk Management, Assurance & Cyber Security Summit November 2018 Audit Training Digital Banking, Future of Internal Audit in Digital Era, Workshop December 2018 Sharing Session “Driving Business Agility in the Disruptive Era” December 2018 PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 167
  168. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Management Discussion And Analysis 170 ECONOMIC AND INDUSTRY REVIEW 174 OPERATIONAL REVIEW 232 FINANCIAL REVIEW 293TAX 296 TRANSFER PRICING DOCUMENT 299 FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA) 301 OTHER MATERIAL INFORMATION 168 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  169. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 169
  170. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk ECONOMIC AND INDUSTRY REVIEW In the middle of an Indonesian economic situation that did not change significantly in 2018, coupled with the increasingly depressed Rupiah against the US Dollar, BNI again proved its consistency and continued to make a positive contribution to the country. Net profit rose by 10.3% compared to 2017, mainly due an increase in income including interest and sharia income, both of which are the main driving forces of our banking operations. 170 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  171. Analisis & Pembahasan Manajemen PEREKONOMIAN GLOBAL The continuing conditions in the United States (US) remain a major concern. The trade war intensity between the United States and China not only caused tensions between the two countries directly, but also affected the trading partners of the United States and China. The trade war began when US President Donald Trump expressed his desire to impose tariffs on Chinese goods exported to the US. The tariffs reached more than US$500 billion covering 1,300 categories of imported goods including shipping parts, batteries, flat screen televisions, medical, satellite and military equipment. In return, China will also impose tariffs on US products including aluminum, airplanes, cars, pork products and soybeans1. The number and types of goods subject to tariffs continues to change as negotiations are continuing between both countries, so that the trade war does not expand. The US is arguing that that they are doing this to reduce its trade balance deficit in an effort to bolster the US economy. During 2018, the US central bank Federal Reserve interest rate policy caught the world’s attention. The Fed raised the benchmark interest rate 4 (four) times, each by 25 bps (basis points), so that it currently stands at 2.50% 2. The increases took place in March, June, September and December 2018 following US inflation increasing above 2%, and the unemployment rate reaching 3.9% 3. The US unemployment rate in 2018 touched its lowest in 49 years when it reached 3.7% in October 20184. Lower unemployment increased disposable income and US spending, which in turn triggered US inflation. During 2018 it was consistently above 2%, and in June and July 2018 reached its highest level of 2.9% 5 due mainly to the improving public spending capabilities. Inflation stagnated towards the end of the year due to a decline in energy prices and this was considered not too worrying. Employment absorption was trending higher and helped push down the unemployment rate. As a country whose growth depends on public consumption, a low unemployment rate will further encourage the momentum for economic growth. The US economy in 2018 increased each quarter, reaching 2.6% (YoY) in Q1, rising to 2.9% (YoY) in Q2, then 3% (YoY) in Q36 , and finished the year at 3.1% (yoy). This increase was supported by the public purchasing power improvement and the large-scale infrastructure development policies of President Trump. To encourage development, President Trump plans to issue more US Treasury to finance development, which will add to their attractiveness, and encourage investors to buy the US Treasuries as a minimal risk investment instrument. In the European region, the Eurozone (EZ) economy’s improvement, marked by improving inflation, pushed the European Central Bank to reduce its stimulus to buy securities. The amount of bond purchases, originally valued at € 30 billion per month, was reduced to € 15 billion per month in June 2018 and will be terminated at the end of December 20187. The bond purchase scheme has lasted for a decade since the European debt crisis occurred in 2010. This decision on termination does not necessarily mean an acceleration of the monetary tightening policy as PT Bank Negara Indonesia (Persero) Tbk  happened in the US. The economic & political conditions of the European Zone are more unique, with some EZ members having their own problems. Dramatic power struggles in Italy between the populist camp and pro-European Union (EU) lawmakers have resulted in the failure of the new coalition government. This raises concerns over the Italian economy, considering that the country has the third largest economy in Europe. 36% of Italy’s debt is owned by foreign investors and is equivalent to 135% of Italy’s Gross Domestic Product (GDP) or €2.3 trillion8. Developments in France also contributed negatively with demonstrations against rising fuel prices, higher taxes and cost of living becoming serious problems. The cost of diesel fuels has increased by 23% in the last 12 months, reaching €1.5, the highest price since the 2000s9. The number of problems in the EZ has resulted in the region’s economic growth stagnating. In the first quarter of 2018, it only grew 2,4% (YoY), lower than the fourth quarter - 2017 of 2.7%. Then it remained stable at 2.2% (YoY) in the second quarter - 2018 before falling to 1.6% ( YoY) in quarter III – 201810 and returned lower to reach 1.2% (yoy) in Q4 - 2018. Turning to China, the US-China trade war caused the Chinese economy to contract in 2018. After growing moderately 6.8% (YoY) in the first quarter – 2018, China’s economy slowed to 6.7% (YoY ) in the second quarter - 2018 and continue to decline to 6.5% (YoY) in the third quarter - 2018 and carrying 6.4 (yoy) revenues by percent or lower during the fourth quarter in 2018.11. The tariff war with the US has meant China’s export performance has been depressed, as the US is China’s main export destination market. Currently, several trade agreements are being negotiated between the two countries, to reduce the impact of the trade war, especially concerning the tariffs on the export goods of both countries. Another impact that put pressure on the Chinese economy was the relocation of factories from China to other countries. This strategy was so to ensure production and sales continued to run normally, and could still be exported to the US, as the trade war applied to China only. The slowing economic growth was also caused by China’s growing level of domestic debt worries. As a result of its high debt, the Chinese government plan is to tighten lending. However, the impact could also depress economic growth. In Japan, the negative interest rate policy has not consistently helped Japan’s economic growth. After contracting 1.3% (YoY) in Q1, it grew 1.5% (YoY) in Q2 - 2018 but fell to 0.1% (YoY) in Q3 – 2018, and in Q4 - 2018 was stagnated at 0%12. Japanese inflation continued to improve leaving behind the era of deflation in 2016, and the era of low inflation in 2017. In 2018 Japanese inflation was closer to 2%. Japanese inflation reached its highest in February 2018 at 1.5%, while overall inflation in 2018 was 0.3%13. While core inflation remained relatively low. These conditions encourage the BOJ to keep its benchmark interest rate at -0.10%. Beradaptasi dengan Cepat Menghadapi Perubahan 171
  172. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk INDONESIAN ECONOMY In 2018, the Indonesian economy grew moderately and reached 5.18% (YoY) by quarter IV-2018. In the first quarter 2018 the economy grew 5.06% (YoY) and then increased to 5.27%(YoY) and 5.17% in the second quarter - 201814. The high growth in the second quarter was supported by an increase in household expenditure that grew 5.14%, contributing 55.43% to the Indonesian economy15. In lll - 2018, growth in household expenditure was 5.01% and 5.08%16 however the Indonesian economy continued to grow aided by the largest Asian Games, the 2018 Asian Games. The negative impact caused by the CAD lead BI to be pre-emptive and ahead of the curve towards its benchmark interest rate, in this case through BI’s 7 days Repo Rate which increased by 175 bps (base points) in 2018. Within the country, other than the widening CAD, BI was focused on the trade balance deficit. Cumulatively, Indonesia’s trade balance deficit reached US$8.57 billion, way below the trade surplus of US$ 11.84 billion in 2017. Indonesia’s exports in 2018 reached US180.06 billion, a growth of 6.65%, while imports reached US$188.63 billion, a growth of 20.15%.20 Indonesian inflation throughout 2018 was at the level of 3.13%17, which is within the BI target range of 3.5 ± 1% in 2018. The controlled inflation was influenced by low core inflation and lower volatile food inflation, while price inflation was relatively well maintained. BI’s success in maintaining inflation cannot be separated from its function of joint coordination with the Government both at the central and regional levels. Until the end of 2018, inflation was maintained helped by the decline in world oil prices. 1 Press Release US Trade Representatives, menyangkut data Perdagangan Amerika Serikat dan China 2 US Federal Reserve menyangkut data suku bunga acuan Amerika Serikat (Fed Fund Rate) 3 US Bureau Labor Statistic 4 Ibid 5 Ibid 6 US Bureau of Economic Analysis 7 European Central Bank 8 CNBC: Italy Crisis Heres What You Need to Know, 30 Mei 2018 9 Reuters: French “Yellow Vest” Protest in Their Thousand for Fifth Saturday, 15 Desember 2018 10 Eurostat 11 National Bureau of Statistic of China 12 Economy and Social Research Institute of Japan 13 Japan Ministry of Internal Affairs and Communication 14 Biro Pusat Statistik 15 Ibid 16 Ibid 17 Ibid 18 Bank Indonesia 19 Badan Koordinasi Penanaman Modal (BKPM) One serious problem in 2018 was the current account deficit (CAD). The CAD ratio to GDP trended higher in 2018. In quarter I - 2018, CAD reached 2.17% of GDP, then increased to 3.02% in the second quarter – 2018, to grow to 3.37% of GDP in the third quarter - 201818. Indonesia’s GDP CAD in Q4 -2018 reached 3.57% wider than in previous quarters. Import growth had sharply surpassed export growth and led to an increasingly large trade balance deficit. In addition, the export and import services balance sheet also experienced an ever-increasing deficit. However, Foreign Direct Investments (FDI) in 2018 continued to increase despite the heavy capital outflows in the stock market and capital market. The continual to growth in Indonesian investments demonstrated confidence in the Indonesian economy. Indonesian investments in 2018 grew by 4.11% from the previous year, with Q4 - 2018 investments reaching Rp185.9 trillion, Making it the highest quarter in 2018. Investments in Q3 - 2018 reached Rp173.8 trillion, lower than Rp176.3 trillion in Q2 – 2018, and Rp185.3 trillion in Q1- 201819. The need to address the widening CAD, and its negative impact on the rupiah exchange rate, has become an immediate focus for the Government. 172 Beradaptasi dengan Cepat Menghadapi Perubahan  Biro Pusat Statistik 20 PT Bank Negara Indonesia (Persero) Tbk
  173. Analisis & Pembahasan Manajemen INDONESIA’S BANKING INDUSTRY DEVELOPMENT AND BANK BNI’S POSITION As of November 2018, bank lending had grown by 12.7% (YoY) higher than 8.2% in December 2017. For funding, third party funds collected by banks as of November 2018 grew by 7.2% lower than 9.4% in December 2017. The growth slowdown in third party funds impacted banking asset growth and by November 2018 had reached 9.1%, or lower than 9.8% in December 2017. Compared with the banking industry and its peers group, BNI growth was higher both for assets and for funding. Compared to the November 2018 period for the industry and peers groups, as of December 2018, BNI’s loans had grown 16.2%, while BNI’s funds had grown 12.1% higher, and as a result BNI’s assets grew by 14.0%, again higher than the industry and peers group. BNI Position Based on Asset Growth, Loans Disbursed and TPF (Bank Only) Bank Assets (%) Loans Disbursed (%) Industri Funds from Third Parties (%) 9.1 12.1 7.2 BBRI 15.1 15.0 14.7 BMRI 9.7 13.9 8.3 BBCA 8.1 18.8 6.9 BBNI 14.0 16.2 12.1 Source: for peers data - Bank Indonesia Monthly Bank (LBU) Report as of September 2018 BNI Position compared to Peers based on Loan Growth (%) BNI Position compared to Peers based on Asset Growth (%) 15.1 14.0 9.1 9.7 18.8 15.0 13.9 16.2 12.1 8.1 BBRI BMRI BBCA Industri BBRI BBNI BMRI BBCA Industri BBNI BNI Position compared to Peers based onThird Party Funds Growth (%)) 14.7 12.1 8.3 6.9 BBRI PT Bank Negara Indonesia (Persero) Tbk  BMRI BBCA 7.2 Industri BBNI Beradaptasi dengan Cepat Menghadapi Perubahan 173
  174. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk OPERATIONAL REVIEW BNI conducts its business and activities in the banking sector in accordance with the Articles of Association as set forth in Deed No. No. 52, May 22, 2018. Its main activities are: 1. Raising funds from the public in the form of deposits such as demand deposits, time deposits, savings deposits, and / or other equivalent; 2. Granting loans; 3. Issuing debt instruments; 4. Buying, selling, or guaranteeing, at its own risk, as well as for the interest and the order of clients (money orders including bills accredited by the Company as a Bank whose validity period does not take longer than is customary in the trading of such documents); 5. Debt instruments and other trade paper whose validity period does not take longer than is customary in the trading of such documents; 174 Beradaptasi dengan Cepat Menghadapi Perubahan  6. 7. 8. 9. 10. 11. 12. 13. 14. State treasury paper and Government Guarantee Letters; Bank Indonesia Certificates (SBI); Bonds; Futures Trading in accordance with the laws and regulations; Other securities instruments with a maturity in accordance with the laws and regulations); Transferring money, both for its own interest, or the interest of the customer; Placing funds on, borrowing funds from, or lending funds to other banks, either by using mail, telecommunications facilities as well as with performance notes, checks, or other means; Receiving payment for securities and performing calculations with or among third parties; Providing a place to store goods and securities; PT Bank Negara Indonesia (Persero) Tbk
  175. Analisis & Pembahasan Manajemen 15. Conducting care for the interests of other parties pursuant to a contract; 16. Placing funds from customer to other customers in the form of securities that are not listed on a stock exchange; 17. Providing financing and/or performing other activities, including activities based on sharia principles, in accordance with the provisions stipulated by competent authorities; 18. Conducting factoring, credit card business and trusteeship; 19. Conducting foreign currency activities by complying with the provisions stipulated by the authorities; 20. Conducting equity participation in banks or other companies in the financial sector; 21. Conducting temporary capital investments to address the consequences of credit failure, including financing failure based on Islamic principles, subject to retracting ownership interests in accordance with the provisions stipulated by competent authorities; 22. Acting as a founder of the pension fund and pension fund manager in accordance with the provisions of the laws and regulations; 23. Conducting financial services, commercial banking, and other investment banking; 24. and performing other activities commonly conducted by the bank that are not contrary to legislation. In addition to the main business activities, the Company provides supporting business activities to optimize the utilization of available resources to support the main business activities, as long as it is not contrary to the laws and regulations. Selain kegiatan usaha utama tersebut, Bank dapat melakukan kegiatan usaha penunjang dalam rangka optimalisasi pemanfaatan sumber daya yang dimiliki untuk mendukung kegiatan usaha utama sepanjang tidak bertentangan dengan peraturan perundangundangan. PT Bank Negara Indonesia (Persero) Tbk  BUSINESS DEVELOPMENT STRATEGY 2018 In line with the Company’s Vision and Mission, BNI strives to make the best contribution to encouraging economic growth and development for the welfare of society as a whole. It is implemented through coordination and cooperation with other institutions from countries, governments, individuals, communities, fellow financial companies, and other private entities. In addition 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 industry. BNI’s short-term plan was based on its long-term plan, taking into account the most recent internal and external factors. During 2018, BNI has succeeded in carrying out its plans with four main themes, namely Selective, Digitalize, Market Penetration, and Organization Capabilities. SELECTIVE 1. Enhancing business for customers in ministries, institutions, state-owned enterprises, and corporations through comprehensive financial solutions. a. Focusing on priority financing in the infrastructure sector, manufacturing industry and financing in other sectors. b. Increasing TPF and State Budgets (Ministries and Institutions), SOEs, Private Corporations and Debtor Funds. c. Optimizing financing through the acquisition of selective corporate bonds. 2. Increasing Medium business in priority industries in accordance with regional potential. a. Undertaking customer Take over in selective industries and optimizing the value chain of Corporate customers. b. Improving Credit quality by restructuring and phasing out bad loans through securitization. c. Expanding funds in regional institutions, regional governments, and BUMD, as well as debtor funds. 3. Strengthening Small businesses through optimizing Supply Chain Financing for Corporate Customers, community / business centers, and supporting government programs. a. Expanding Credit through outlets and digital-based optimization. b. Expanding Credit by optimizing value chain and supply chain financing from Corporate debtors. c. Expanding Credit through linkage financing. Beradaptasi dengan Cepat Menghadapi Perubahan 175
  176. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk d. Optimizing the government programs role as a basis for growth. 4. Increasing CASA with digital business models focusing on Closed Loop Transaction and optimizing customer transactions. a. Optimizing the use of debtor demand deposits and maintaining the ratio of demand deposits to debtors’ KMK. b. Developing closed loop transactions for Corporate and Commercial customers and their supply chains through utilization of product and service solutions. DIGITALIZE Strengthening the consumer business in collaboration with business partners and providing financial transaction solutions with a focus on e-commerce and the millennial generation. a. Developing digital channel acquisitions. b. Working on potential millennial through digital enhancement. c. Focusing e-commerce through feature development and strategic partnerships. d. Improving customer engagement through the development of a personal credit card management application. MARKET PENETRATION 1. Improving outlet performance by strengthening market penetration for both deposits and loans. a. Developing the office networks organically and inorganically and supporting digital branches. b. Optimizing outlets to support the business target’ achievement. c. Improving outlet performance and productivity. d. Improving efficiency initiatives and work processes. e. Optimizing Agen46 to expand the network and to achieve small and consumer business performance. 2. Increasing subsidiaries’ market share through increased synergy, digital development and inorganic growth. a. Strengthening the comprehensive Risk Culture and Risk Management through integrated risk management. b. Increasing synergy with BNI Group. c. Developing Digital and improving Financial Inclusive. d. Strengthening the Subsidiaries’ HC to improve Cross Utilization. e. Strengthening Subsidiary Companies through Corporate Action and Unorganic Growth 176 Beradaptasi dengan Cepat Menghadapi Perubahan  ORGANIZATION CAPABILITIES 1. Optimizing organizational capabilities to support business achievement a. Increasing employee productivity b. Improving the effectiveness and efficiency of business processes c. Developing the IT to support the business The strategy for 2018 has generally been implemented well. BNI’s loan growth grew above the industry average growth, driven by the growth in the corporate segment’s loans, focusing on the infrastructure and processing sector. For the medium segment, the loan increase was supported by optimizing the Corporate customer value chain and customer take overs from selective industries based on regional potential. Loan growth in the small segment was the result optimizing the value chain and supply chain financing and maximizing our role in government programs (KUR). In addition, support came from additional channels, namely agen46 and digital-based lending to facilitate loan applications. Loan growth above the industry average is carried out by following the principle of prudence so that Non-Performing Loans (NPL) can be maintained, and has decreased and produced relatively high returns. The increase in the consumer business was accomplished by selling BNI Griya, BNI Fleksi, Credit Cards and other credit by working on the potential millennials through digital development. To grow the digital business and to work on the potential millennials, BNI has launched a QR-based mobile payments including, Yap!, Cinta chat, and BNI Call application (1500046 Virtual Assistant). To provide a better user experience for customers, BNI has opened 8 (eight) digital branches. The strategy for increasing TPF focuses on closed loop transactions to ensure all customer transactions stay within BNI. The closed loop transactions for Corporate and Commercial customers, together with their supply chains, was developed by utilizing product and service solutions, one being by increasing cash management transactions. In addition, to increasing customer transactions through e-commerce, several feature and strategic partnerships have been developed. PT Bank Negara Indonesia (Persero) Tbk
  177. Analisis & Pembahasan Manajemen OVERVIEW OF OPERATIONS PER BUSINESS SEGMENTS Bank BNI’s operating segments comprises: Corporate; Commercial and Small; Consumer and Retail; Treasury and International; Head Office; Subsidiaries. CORPORATE Corporate segment activities include corporate customer loans, deposits and other transactions. LOANS The Bank BNI 2018 Corporate segment loans strategy, productivity, business prospects and achievement strategies are described as follows. CORPORATE SEGMENT LOANS EXPLANATION BNI”s Corporate segment handles loans of over Rp300 billion for individual customers and group customers in State-Owned Enterprises, and large National and Multi-National Enterprises in Indonesia. CORPORATE SEGMENT LOANS 2018 STRATEGIES BNI’s short-term plans follow the long-term plans after taking into account the latest internal and external factors. During 2018, BNI carried out its plans as follows. 1. Loan expansion focusing on financing upstream to downstream government infrastructure projects for corporations and SOEs. a. Increasing new borrowers and optimizing the existing borrowers focusing on infrastructure projects. b. Increasing new borrowers and optimizing the existing borrowers in other priority sectors. 2. Increasing middle segment loans focusing on prospective industries. a. Acquisitions through Corporate Borrowers Supply Chain Financing. b. Selectively taking over new borrowers from Bank Book III and Book IV in line with priority sectors. c. Optimizing existing borrowers facilities based on merit. CORPORATE SEGMENT LOAN PRODUCTIVITY IN 2018 BNI’s loan portfolio continues to be well diversified and covered BNI’s priority sectors. The following lists the 10 (ten) major individual and group debtors business sectors at the end of 2018. Tabel Daftar Sektor Usaha 10 (Sepuluh) Debitur Besar Individual Individual Debtors Large Trading and Retail Total (Rp million) 12,599,313 Other Financial Intermediaries (Non Bank) Other than Leasing 4,063,915 Government Administration and Economic and Social Policy 3,207,737 Cigarettes 2,661,670 Electricity 2,354,596 Coal Trading 2,082,439 Electricity 1,726,776 Telecommunication Services 1,592,559 Large Trading and Retail 1,350,497 Ship Building and Repairing Industry Total PT Bank Negara Indonesia (Persero) Tbk  904,382 32,543,883 Beradaptasi dengan Cepat Menghadapi Perubahan 177
  178. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk 10 major group business sectors Group Debtors Jumlah (Rp juta) Electricity 13,614,539 Oil and Gas Mining 10,845,192 Pulp Industry, Paper and Cardboard / Paper Board, Agribusiness and Food, Financial Services, Real Estate and Developer 10,820,499 Oil Palm Plantations, Financial Services, Automotive, Telecommunications Services, Food and Beverage 9,584,752 Telecommunication Services 8,618,945 Toll Road Building 7,722,691 Other Civil Buildings, Building Construction 7,688,815 Palm Oil Plantations, Rubber Plantations, and Other Gum Producers, Sugar Industry and Sugar Processing 6,943,903 Fertilizer industry 6,865,002 Palm Oil Plantations 6,326,393 Total 89,030,733 Total corporate segment loans reached Rp222.9 trillion in 2018, an increase of 18.6% or Rp44.1 trillion compared to Rp188.0 trillion in 2017. Based on type of loans disbursed in 2018, the majority of corporate loans were Working Capital Loans, which accounted for 58.2% of the total, or Rp152.9 trillion, while the remaining 41.8% or Rp109.9 trillion were Investment Loans. The Corporate segment loan growth is shown in the following table: Corporate Segment Loansi 2018 Product (Rp Billion) 2017 (%) (Rp Billion) Growth (%) (Rp Billion) (%) Investment Loans 109.903 41,8% 94.052 43,0% 15.851 16,9% Working Capital Loans 152.925 58,2% 124.706 57,0% 28.220 22,6% 262.828 100,0% 218.758 100,0% 44.070 20,1% Total CORPORATE LOAN BUSINESS PROSPECTS AND STRATEGIES Business prospects are still promising and Corporate loans are projected to grow 15% in the manufacturing, oil palm plantations, other business services sectors. Based on this the corporate segment has adopted the following strategies for 2019: 1. IIncreasing loans in the Manufacturing, Plantation, Infrastructure, Tourism and other business services sectors. 2. Optimizing value chains and transactional banking from customers so as to increase fee-based income. 3. Maintaining loan quality through prudent loan financing processes and monitoring borrowers, especially those that included on the watchlist. 4. Speeding up the business processes. THIRD PARTY FUNDS / SAVINGS Bank BNI Corporate Segment Third Party Funds / Savings 2018 productivity, business prospects and achievement are presented as follows: EXPLANATION OF CORPORATE SEGMENT TPF The Corporate Segment (Business Banking) Third Party Funds (TPF) covers a number of deposit funds and operational activities, owned and / or managed by institutional customers (Ministry, SOE, Non Banking Financial Institutions, Universities. Institutional customers in the form of national, multinational companies, BUMN, BUMD, Hospitals, Ministries and other Government Institutions). In recent years fintech-based companies have emerged, also with substantial funds. Business Banking TPF include Savings, Deposits or Giro, based on the customer needs. Products are offered to selected institutions in packages tailored to their needs. 178 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  179. Analisis & Pembahasan Manajemen CORPORATE SEGMENT TPF STRATEGY IN 2018 In line with BNI’s strategy to achieve quality asset growth and a good level of profitability through an optimal funding structure, in 2018 BNI took the initiative to increase customer business solutions through the following initiatives: 1. Focusing on 20 (twenty) Ministries and Institutions, 23 (twenty three) Major SOEs, various educational institutions, Regional Governments and Hospitals, and other financial, oil and gas and corporate service institutions. 2. Increasing BNI’s role in public services, especially the central government program. 3. Optimizing electronic-based solutions in managing Tax Revenues and Non-Tax Receipts. 4. Improving corporate transaction solutions through e-channel payment services, receipts and management of customer financial information. 5. Increasing fee-based income with innovative operational service solutions in various industrial sectors. 6. Optimizing value chain and supply chain using Financial Supply Chain Management solutions to encourage the growth of low-cost funds. 7. Cross selling transactional services and bank guarantees to customers. CORPORATE SEGMENT TPF PRODUCTIVITY 2018 Corporate Segment TPF Productivity is presented as follows: Corporate Segment Total Funds Description 2018 (Rp trillion) 2017 Composition (%) (Rp trillion) Growth Composition (%) (Rp trillion) (%) Giro 148 53.2% 125 52.0% 23 18.1% Deposits 113 40.5% 103 42.6% 10 10.6% Savings Total 18 6.4% 13 5.4% 5 36.2% 279 100.0% 241 100.0% 38 15.6% Total Corporate Segment Deposits in 2018 reached Rp279 trillion, an increase of 15.6% or Rp38 trillion compared to Rp241 trillion the previous year, due to: 1. Increased deposits from the state budget (ministries and institutions), state-owned enterprises, private corporations and debtor funds. 2. Expanded institutional funds, LGs, BUMDs and Debtors. 3. Increased CASA with digital business models that focus on closed loop transactions and optimization of customer transactions Corporate Segment Total Accounts Description 2018 (Account Units) Giro Savings Composition (%) (Account Units) Growth Composition (%) Account Units (%) 323,834 50.2% 285,840 44.3% 37,994 13.3% 21,061 3.3% 18,678 2.9% 2,383 12.8% Deposits Total 2017 299,886 46.5% 82,337 12.8% 217,549 264.2% 644,781 100.0% 386,855 60.0% 257,926 66.7% Total BNI Corporate Segment Accounts in 2018 reached 644,781, an increase of 66.7% or 257,926 accounts compared to 2017. CORPORATE SEGMENT TPF PROSPECTS OF AND STRATEGIES The Corporate Segment TPF prospects include: 1. The potential from the total State 2019 Budget of Rp2,461 trillion is large, and BNI aims to capture Rp389 trillion of the funds distributed. 2. Potentially large corporate business and its derivatives. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 179
  180. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk The 2019 strategic plan for the corporate segment includes: 1. Capturing the business potential from the 2019 state and regional budget funds (20 Ministries and Institutions, Hospitals, Educational Institutions and Regional Governments) 2. Increasing the Corporate Customer Derivation Business (SOE, Non Banking Financial Institution, Universities and Other Private Corporations) 3. Optimizing Debtor Funds by encouraging central and corporate debtor financial activities to use cash management services. 4. Developing system solutions and transactions based on customer needs. 5. Acquiring new customers. OTHER TRANSACTIONS Bank BNI Corporate Segment other transactions 2018 productivity, business prospects and achievement are presented as follows: EXPLANATION OF CORPORATE SEGMENT OTHER TRANSACTIONS IN 2018 The feature products BNI offers to Corporate Segment customers include BNI Cash Management products where customers can independently manage their corporate financial cash flow more regularly and monitor them online. BNI Cash Management products include many features, including: transfer overbooking, transfers between banks, both domestic and international, online tax payments, virtual accounts for collection, billing payments, and supply chain financing. These cash management transactions will help grow TPF and indirectly maintain BNI’s liquidity. The main Cash Management application provided by BNI for customers is BNIDirect. It is an secure website application that can be accessed from anywhere, anytime, and using any media. The BNIDirect website can be accessed via https: //bnidirect.bni. co.id using computers or cellphones, through the flexible and easy to install BNIDirect Mobile. CORPORATE SEGMENT OTHER TRANSACTIONS STRATEGIES IN 2018 During 2018, BNI followed strategies to increase cash management transactions, including: 1. Maintaining and acquiring SOE/Corporation Customers that have a significant ecosystem. 2. Researching and identifying potential revenue (PNBP) and expenditure flow in top 10 Ministries/Institutions in order to provide business solutions. 3. Exploring and identifying corporate customers derivative businesses and value chains to provide close loop transaction solutions. 4. Expanding the scope of transaction access to the commercial customer segment by optimizing the potential of BNI debtors in each region. CORPORATE SEGMENT OTHER TRANSACTIONS PRODUCTIVITY IN 2018 In 2018 the number of cash management account units reached 118,359 accounts, an increase of 25.46% compared to 94,341 accounts in 2017. This was due to the BNI’s success in maintaining their corporate customers’ trust, so they remain committed to using BNIDirect as their transaction tool. Total Cash Management Accounts Description 2018 (Account Units) Cash Management 2017 Composition (%) 118,359 100 (Account Units) 94,341 Growth Composition (%) 100 (Account Units) 24,018 Composition (%) 25.46 During 2018, BNI successfully increased its presence as the bank of choice for customers through its efficient, effective, safe and reliable cash management services. This resulted in total integrated cash management services transactions through BNIDirect growing 15.0% to 21.28 million transactions with a value of Rp1,605 trillion, providing fee-based income growth of 11.7% to reach Rp521 billion in 2018. 180 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  181. Analisis & Pembahasan Manajemen BNIDirect Transactions Description 2018 2017 Composition Total Transactions (million Rupiah) 21.28 18.7 15.0% Nominal Transactions (trillion Rupiah) 1,605 1,295 23.9% 590 528 11.7% 65,675 52,594 24.9% Fee Based Income (billion Rupiah) Total Users The performance improvements above were the result of several strategic initiatives in 2018. These included BNI succeeding in increasing its penetration of banking transactional services in the corporate customer segment (including SOE and Government), and expanding its presence in the commercial customer segment by optimizing BNI’s potential borrowers in each region. BNI also succeeded in gaining and building public services trust through its efficiency and transparency of bureaucracy within various government ministries and agencies. These included electronic real-time online tax payment through BNI e-Tax, and payment of customs and import of goods through BNI e-PIB, payment for passports, online land tax payments through e-PBB, and participation in various BumDes government programs. BNI’s cash management solutions succeeded in helping customers by delivering increasingly efficient business processes so as to increase the customers’ productivity. The electronic solutions built also helped create efficient work processes within BNI so as to improve services for customers. The increase in the value chain with financial supply chain transactions has begun to show good potential. As in previous years, BNI’s banking transactional services gained numerous awards in 2018, including: 1. Best Treasury and Cash Management in Indonesia 2018 from Global Finance Magazine. 2. Best Cash Management Solution In Southeast Asia 2018 from Alpha Southeast Asia Magazine. 3. Best Overall Cash Management in Indonesia 2018 based on a survey by Euromoney Magazine. PT Bank Negara Indonesia (Persero) Tbk  CORPORATE SEGMENT OTHER TRANSACTIONS PROSPECTS AND STRATEGIES 2019 is a political year and the prospects for increasing BNI Cash Management transactions is still wide open, especially in the digital segment, through cooperation with fintech companies whose transaction activities synergize with BNI cash management. For the ministry and agency segments, there are big opportunities to optimize the state budget funding for central and regional government projects. The regional SOE and private segments are predicted to be somewhat restrained at the beginning of the year, but the belief is they will continue to grow with good prospects, if the right products/solutions are chosen. After looking at the potential for 2019 and learning from the experiences in 2018, BNI Cash Management will improve by following different business strategies than the previous year. They include: 1. Acquiring new customers by focusing on potential high transaction customers. 2. Penetrating on BNI customers who have not yet used transactional solutions. 3. Increasing the number of active customers who use cash management transactions. 4. Increasing the number of features used by BNI customers. Beradaptasi dengan Cepat Menghadapi Perubahan 181
  182. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk CORPORATE SEGMENT INCOME AND PROFITABILITY Corporate Segment Income and Profitability is presented as follows: Tabel Pendapatan dan Profitabilitas Segmen Korporasi Description Interest income and Sharia income-net *) 2018 2017 (Rp million) (Rp million) 12,813,111 Growth (Rp million) 12,428,601 (%) 384,510 3.1% Premium income -net 3,376,656 2,803,803 572,853 20.4% Allowance for impairment losses Other operating income (1,431,145) (2,107,854) 676,709 (32.1%) Other operating expenses (5,541,492) (4,166,494) (1,374,998) 33.0% 9,217,130 8,958,056 259,074 2.9% Operational profit Income (expense) non-operating-net Income before tax expense 21 (7) 28 (400.0%) 9,217,151 8,958,049 259,102 2.9% Total assets 258,869,706 215,887,752 42,981,954 19.9% Total liabilities 270,621,130 248,980,052 21,641,078 8.7% *) including internal transfer pricing components between operating segments In 2018 the Corporate segment Interest income and Sharia income-net reached Rp12.8 trillion, an increase of 3.1% compared to Rp12.4 trillion in 2017. Operational profit in 2018 reached Rp 9.2 trillion, an increase of 2.9% compared to Rp 9 trillion the previous year. Both these increases were due to the Corporate segment loan growth of 20.1%, increased total funds of 18%, and the BNI Direct transaction fee based income increase of 11.7%. COMMERCIAL AND SMALL The Commercial and Small Segments include loans, customer deposits and other transactions for small to medium scale customers. COMMERCIAL LOANS Bank BNI Commercial Segment Loans in 2018 productivity, business prospects and achievement are presented as follows: EXPLANATION OF COMMERCIAL SEGMENT LOANS BNI’s Commercial Segment (Medium Segment) provides loans between Rp15 billion and Rp300 billion to individual customers and group customers. COMMERCIAL SEGMENT LOANS IN 2018 To pursue profit growth through increased interest income from loan expansion, the Commercial Segment business strategies included: 1. Targeting the leading industries and key players. 2. Acquisition ex borrowers (win back) in leading industry sectors 3. Pipeline Management 4. Financing national and government projects 5. Value chains and corporate supply chains Related to quality improvement, the Commercial Segment established a team to focus on handling & managing loans at risk (restructuring collectability 1, Pre NPL and NPL). Substantial additional income comes from fee-based income, and looks at potential transactions from existing borrowers, and the value chain of the entire lending business. In addition, it is also always implanted that the Commercial Segment business is not only limited to loans, but also all business transactions that can be offered to borrowers. 182 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  183. Analisis & Pembahasan Manajemen 2018 achievements 1. Expansion through the acquisition of other Bank borrowers with a proven past performance by looking at potential economic sectors. 2. Joint loans at risk monitoring and handling by establishing a dedicated SRM-RM specifically. COMMERCIAL SEGMENT LOANS PRODUCTIVITY IN 2018 In 2018, BNI’s Commercial segment Loans grew 6.4%, compared to overall bank lending of 7.2%, and average BNI loan disbursement growth of 16.2%. The BNI Medium Segment covers all major Indonesian cities through 33 (thirty three) Medium Loan Centers. Segment Growth (Medium) 74,731 70,261 61,330 51,147 2015 2016 2017 2018 The Medium Segment lending included Working Capital Loans that contributed Rp48.3 trillion or 64.6%, while the remaining Rp26.5 trillion or 35.4% were for Investment Loans. 31.4% of the Commercial Segment Loans were for the restaurant and hotel trade sector, followed by 26.2% for the industrial sector. The following shows the breakdown of Commercial) Segment lending by sector: Tabel Penyaluran Kredit Segmen Komersial (Menengah) Berdasarkan Sektor 2018 Sector Trading, Restaurant and Hotel 2017 (Billion Rp) Composition (%) 23,497 31.4% (Billion Rp) Pertumbuhan Composition (%) 23,220 33.0% (Billion Rp) 277 YoY (%) 1.2% Mining 2,007 2.7% 1,947 2.8% 60 3.1% Industry 19,585 26.2% 20,285 28.9% (701) (3.5%) Agriculture 3,622 4.8% 3,173 4.5% 449 14.1% Construction 7,787 10.4% 6,977 9.9% 809 11.6% Transportation, Warehousing, and Communication 7,940 10.6% 6,307 9.0% 1,633 25.9% 456 0.6% 624 0.9% (167) (26.8%) 7,082 9.5% 5,870 8.4% 1,212 20.6% Electricity, Gas and Water Business Services Social Services Total 2,755 3.7% 1,857 2.6% 898 48.4% 74,731 100.0% 70,261 100.0% 4,470 6.4% In line with the government policy direction, namely equitable development, the commercial segment focused on government strategic industries, especially transportation, warehousing and communications, and enhancing the communities’ economic welfare through growth in the agricultural sector. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 183
  184. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk In addition, for quality business growth, growth was directed towards businesses with the potential to continue growing without being affected by disruptions, such as social services, by significantly increasing lending in these areas in 2018. Internally BNI’s Commercial Segment continued to make improvements in order to focus on achieving profits, and improvements were made in the human resources, technology and business processes. Human resources improvements included increasing loan officers’ skills through hard and soft skills programs, as well as quickly ensuring the number of officers matched the increasing business needs. On the technology side, the Commercial Segment developed automation fund systems so that business processes run faster and are more agile. COMMERCIAL SEGMENT LOANS PROSPECTS AND STRATEGIES In 2019, the Commercial Segment will continue focusing on the Corporate supply chain, business process improvements, and loan quality improvements. BNI has set a series of target achievement strategies including: 1. Expanding selectively in priority sectors and in potential regions 2. Focusing on the major players in the priority sectors of each region 3. Supply chain for selected corporate, by maximizing the potential value chain of Corporate and commercial borrowers. 4. Developing digital capabilities by digitizing processes and monitoring a. Digitizing loan applications b. Utilizing Big Data 5. Improving loan quality through comprehensive monitoring and management of loans at risk. 6. Increasing synergy and business potential by encouraging closed loop transactions, increasing CASA through cross selling, including cash management and customer value chains. 184 Beradaptasi dengan Cepat Menghadapi Perubahan  SMALL LOANS Bank BNI Small Segment Loans in 2018 productivity, business prospects and achievement are presented as follows. EXPLANATION OF SMALL SEGMENT LOANS BNI’s Small Segment (Medium Segment) provides loans up to Rp15 billion to individual customers and group customers. SMALL SEGMENT LOANS STRATEGIES IN 2018 These positive achievements in 2018 can be seen in the many developments carried out by BNI, including optimizing outlets as point of sales, transforming the digital-based loan management, focusing on clustering patterned financing, and optimizing supply chain financing for corporate customers. BNI as a state-owned bank is an agent for development, and BNI’s commitment can be seen in its support of government programs, especially those related to community welfare improvements through its provision of loans to MSMEs. Activities carried out by BNI included: 1. Social Forestry Helping communities around the PT Perhutani forest to grow crops using forest land to improve their welfare. BNI also provides funding through its KUR program to make it easier for farmers to obtain capital through installment schemes adjusted to the planting season. Loans disbursed to 3,170 farmers amounted to Rp18.8 billion. In addition, BNI through other SOEs, assisted in normalizing post-flood damaged irrigation / waterways for 6 (six) villages covering a total area of about 1,265 ha and 1,1 Km of village roads. 2. Planting season controls This activity is a form of BNI’s participation in the government’s program to increase agricultural production so as to achieve food self-sufficiency. The purpose of this activity is to oversee the 2018/2019 OKMAR planting season, and BNI’s involvement includes providing cheap, easy financing, together with assistance and offtakers for food crops farmers in various regions in Indonesia, in synergy with the SOEs “Present for the Country’ and the Ministry of Agriculture. PT Bank Negara Indonesia (Persero) Tbk
  185. Analisis & Pembahasan Manajemen The activities include: a. Distributing farm cards in accordance with the Definitive Plan for Group Needs (RDKK) b. Distributing KUR Tani c. Planting agricultural commodities d. Providing CSR, seed and alsintan to support the program’s continuation e. Grain absorbency and other commodities by cooperating with other SOEs as Offtakers (to absorb the farmers’ crops) as a form of SOE synergy. 3. Rejuvenation of People’s Palm Oil Funding palm oil farmers in collaboration with the Palm Oil Plantation Fund Management Agency (BPDP KS) to improve their welfare. 4. Financing coffee farmers in Garut and Malang This funding is BNI’s support to increase the production and welfare of coffee farmers to enable exports. 5. Financing salt farmers BNI’s participation to increase national salt production by financing salt farmers, currently running in Sumenep, Indramayu and Kupang. The total funding given by BNI through CSR and KUR to 320 salt farmers reached Rp7.3 billion. SMALL SEGMENT LOAN PRODUCTIVITY Small Segment Loan Growth is presented as follows. Small credit growth per product type 2018 Product Outstanding (Rp billion) KUR 2017 NPL (%) 20.289 Outstanding (Rp billion) 0,7% Outstanding Loan Growth (%) NPL (%) 14.194 1,9% 42,9% Non KUR 45.774 2,0% 42.285 3,0% 8,3% Total 66.063 1,6% 56.479 2,7% 16,9% In 2018, the small segment recorded a faster growth of 16.9%, compared to the previous year. Small loans as of December 31, 2018 reached Rp66.0 trillion an increase of Rp9.6 trillion over the previous year. In small segment NPL credit quality also improved with the NPL ratio decreasing from 2.7% in 2017 to 1.6% in 2018. During 2018 BNI also distributed people’s business loans (KUR) amounting to Rp15.9 trillion to 147,691 borrowers. Of this 54% is for the production sector that includes the agricultural, industrial and services sectors. In addition, BNI also plays a role in supporting the Government’s MSMEs and people’s economy program in developing through the Social Forestry program, Farmer Entrepreneurship, Farmer Cards, People’s Palm Oil Rejuvenation and the movement to protect the growing season. Based on economic sector, the majority of small segment loans were disbursed to the restaurant and hotel trade sector with 57.4%, followed by the manufacturing and agriculture sector, and the hunting and farming facilities sector with 10.8% and 9.9% respectively. Small Segment Loan Disbursements by Sector 2018 2017 Growth 20172018 Composition NPL 2018 NPL 2017 (Billion Rp) (Billion Rp) (%) (%) (%) (%) Economic Sector Industry 7,109 5,388 31.9% 10.8% 1.4% 2.6% 37,896 34,697 9.2% 57.4% 1.9% 2.8% Agriculture 6,541 4,227 54.7% 9.9% 1.0% 2.1% Business Services 6,131 5,369 14.2% 9.3% 1.6% 3.0% Trading, Restaurant and Hotel PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 185
  186. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk 2018 2017 Growth 20172018 Composition NPL 2018 NPL 2017 (Billion Rp) (Billion Rp) (%) (%) (%) (%) Economic Sector Transportation, warehousing, and communication 1,848 1,583 16.7% 2.8% 1.0% 2.9% Construction 2,670 2,347 13.8% 4.0% 2.2% 2.4% Electricity, Gas and Water 100 70 42.9% 0.2% 0.0% 0.3% Mining 313 227 37.9% 0.5% 0.2% 0.9% 3,454 2,571 34.3% 5.2% 1.2% 2.8% 66,063 56,479 16.9% 100% 1.6% 2.7% Social Services Total SMALL SEGMENT LOANS PROSPECTS AND STRATEGIES Small loan financing opportunities are still wide open, given the number of MSMEs in Indonesia that has reached ± 58 million people. BNI’s small segment works on this large financing potential through an outlet network and through digital channels. Continuing the positive performance trend in 2018, BNI’s Small segment is optimistic in achieving its 2019 targets through the following strategies: 1. Growth strategy a. Optimizing supply chain financing from customers and corporate borrowers. b. Establishing the government programs as the basis for growth c. Increasing the synergies with SOEs to accelerate loan growth in the production sector d. Focusing financing in business centers using clustering patterns e. Improving digital-based loan processes 2. Loan quality strategy a. Improving risk management through an improved early warning system. b. Improving the collection management system. c. Intensifying the collection of KUR claims SMALL SEGMENT INCOME AND PROFITABILITY Commercial and Small Segment Income and Profitability is presented as follows. Commercial and Small Segment Income and Profitability 2018 2017 (Rp Million) (Rp Million) Description Interest income and Sharia income-net *) Premium income -net Other operating income Growth (Rp Million) 8,571,831 6,807,866 - - 1,763,965 (%) 25.9% 1,306,501 1,159,012 147,489 12.7% Allowance for impairment losses (3,787,622) (2,306,273) (1,481,349) 64.2% Other operating expenses (2,547,390) (2,702,085) 154,695 (5.7%) 3,543,320 2,958,520 584,800 19.8% Operational profit Income (expense) non-operating-net Income before tax expense Total assets Total liabilities 184 22 162 736.4% 3,543,504 2,958,542 584,962 19.8% 135,308,561 121,160,933 14,147,628 11.7% 14,658,291 121,311 14,536,980 11,983.2% *) including internal transfer pricing components between operating segments 186 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  187. Analisis & Pembahasan Manajemen In 2018 interest income and sharia income -net for the Commercial and Small segments reached Rp8.6 trillion, an increase of 25.9% compared to Rp6.8 trillion in 2017. The operating profit in 2018 reached Rp3.5 trillion, an increase of 19.8% compared to Rp3.0 trillion the previous year. This increased Profitability was due to the 42.9% growth in People’s Business Loans (KUR) disbursed, and growth in loan disbursed to the agricultural economy sector. CONSUMER AND RETAIL The Consumer and Retail business segment includes consumer financing loans including mortgage loans, credit cards and other transactions for consumer customers, and includes loans given to retail individuals. LOANS Bank BNI Consumer and Retail Segment Loans in 2018 productivity, business prospects and achievement are presented as follows. EXPLANATION OF CONSUMER AND RETAIL SEGMENT LOANS Consumer and Segment loan products consist of mortgages, credit cards, payrolls, auto loans and others. 1. Mortgages BNI Griya is a loan facility intended for individuals wanting to own residential properties, apartments, shops / houses and villas, both new or second-hand. This facility can also be used to purchase plots of land, developing, renovating, refinancing, takeovers, top ups through the BNI Griya Multiguna program. 2. Credit Cards Credit Cards are consumer loan products with the large market share in the industry. BNI Credit Card products includes: a. Regular Credit Card: BNI Visa Silver, BNI Mastercard Silver, BNI Visa Gold, BNI Mastercard Gold and BNI JCB Gold. b. Premium Credit Card: BNI Style Titanium, BNI Visa Platinum, BNI JCB Precious, BNI Mastercard World and BNI Visa Infinite. c. Credit Card Co-Branding: BNI-Garuda, BNI-LOTTE Mart, BNI-Bank Sumsel Babel, BNI-Bank BJB, BNI-Bank DKI, BNI-Pertamina and BNI Ferrari. d. Affinity Credit Card: Kartu Universitas, Kartu Ikatan Alumni, and Kartu Komunitas. e. Corporate Credit Card: BNI Visa Corporate Card Gold, BNI Visa Corporate Card Platinum and BNI American Express Business Card. f. Private Label Credit Cards: BNI Travelling Card, BNI Gasoline Card, BNI Health Card and BNI Distribution Card. g. BNI Cash Card: a revolving loan without collateral that can be converted into fixed installments, and can only be used to make cash withdrawals at an ATM or Teller. 3. Payroll Loan BNI Fleksi: a BNI Unsecured Loan available to active employees and retirees who channel their salaries and retirement benefits through BNI. 4. Others BNI Instan, a loan product guaranteed by BNI Deposits, Savings and Current Accounts. CONSUMER AND RETAIL SEGMENT LOANS, PRODUCTIVITY, PROSPECTS AND, STRATEGY ACHIEVEMENT FOR 2018 Consumer and Retail Loan Performance Description Mortgage 2018 2017 (Rp billion) (Rp billion) 40,753 Growth (Rp billion) (%) 37,066 3,687 9.9% Payroll Loan 23,744 17,687 6,057 34.2% Credit Card 12,558 11,635 923 7.9% 2,680 5,057 (2,377) (47.0%) 79,735 71,445 8,290 11.6% Others Subtotal Consumer and Retail Loans in 2018 reached Rp79.7 trillion, an increase of 11.6% from Rp71.4 trillion in 2017. Consumer loans increased in 2018 to Rp8.3 trillion. Payroll Loans is still the main driver in consumer loan growth, and grew 34.2%, supported by optimizing the Corporate Segment and institutions database. Consumer loan growth was also supported by ease of processes and digital marketing (BNI DigiLoan). PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 187
  188. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk BNI Griya BNI Griya is a loan facility intended for individuals wanting to own residential properties, apartments, shops/houses and villas, both new or second-hand. This facility can also be used to purchase plots of land, developing, renovating, refinancing, takeovers, top ups through the BNI Griya Multiguna program. BNI Griya Strategy for 2018 The 2018 BNI Griya distribution strategy, focused on Selected Partners (including the millenials segment), and Selected Developers, as well as Existing Customers. In the primary property market segment, BNI Griya expanded cooperation with Developers throughout Indonesia and provided ease of use and speed in the loan application process for prospective borrowers who bought new property from the BNI selected developer. In the secondary property market segment, BNI Griya cooperated with a number of Property Agents, as well as conducted joint gatherings to increase the number of BNI Griya applications, especially for the purchase of secondhand properties. BNI Griya lending is focused on customers with fixed income, and optimizes the role of branches, especially in large cities, to speed up the credit process. In addition to acquiring new borrowers, loan distribution is also achieved through the Top Up credit facility program for existing customers meeting certain criteria. BNI Griya lending is also carried out in synergies with Business Banking (Corporate, Commercial and Retail) and subsidiaries, segment directors, business owners, and employees of BNI institutional partners, including providing loans for construction developers. In 2018 BNI Griya disbursed facilities in the form of light and fixed interest rates for the first 4 (four) years, providing certainty regarding installments to the borrowers. BNI also marketed a housing finance program for the Milenials segment through BNI Griya Gue with attractive features, including lighter installments at the beginning of the loan that gradually increased based on projected future increases in income. For BNI’s joint venture partners, the instant approval program provided fast approval to simplify the BNI Griya loan application documents. BNI also participated in distributing the Housing Financing Liquidity Facilities (FLPP) program for low-income communities (MBR), in collaboration with the Ministry of Public Works and Public Housing. BNI Griya Awards in 2018 1. Top Bank 2018 (Top Mortgages (People’s Housing Loans) 2018)) 2. Rumah 123 Real Estate Awards 2018 (The Most Popular Bank for Mortgage Products) 188 Beradaptasi dengan Cepat Menghadapi Perubahan  BNI Griya Productivity BNI Griya portfolio disbursed in 2018 amounted to Rp40.8 billion, an increase of 9.9% compared to Rp37.1 billion in 2017. Total BNI Griya increased to Rp37.1 trillion in 2018. The BNI Griya distribution in 2018 focused on the primary property market segment in cooperation with Developers, while the secondary property market segment was through Property Agent channels and outlet optimization. Tabel Produktivitas BNI Griya Description 2018 2017 Growth (Rp billion) (Rp billion) (Rp billion) BNI Griya 40,753 37,066 3,687 (%) 9.9% BNI Griya Prospects and Strategy BNI Griya 2018 growth of 9.9% (YoY). In 2019 BNI Griya’s projection is quite optimistic and is expected to grow close to 12.0%. BNI Griya marketing strategies for 2019 include: 1. Focusing on potential fixed income customers: HLB, BIN, LMC1, LMC2, and Non Fixed Income customers: Emerald customers and Existing Borrowers by working on the potential chain business through synergy with Business Banking (Corporate, Commercial and Retail) and with subsidiaries to provide potential for Consumer Banking, especially by targeting segments for directors, business owners, institutional employees and collaborating partners. 2. Optimizing all branch networks / outlets throughout Indonesia as BNI Griya marketing channels, as well as increasing the ease and speed of the BNI Griya process, including increasing cooperation with property business partners including Developers and Property Agents 3. Marketing BNI Griya to the Millenials segment as follows: a. Digitizing the loan application process and strengthening BNI Griya marketing through strategic partnerships with online property media. b. Optimizing Big Data (crawling from Business Directory, Higher Education, Market Place, and Social Media) to obtain data on qualified Griya Millenials. c. Massive online and social media campaigns focused on providing education to the Millennial segment regarding the importance of having a home early on. PT Bank Negara Indonesia (Persero) Tbk
  189. Analisis & Pembahasan Manajemen BNI Fleksi BNI Fleksi is a BNI Unsecured Loan product available to active employees and retirees who channel their salaries and pension benefits through BNI. BNI Fleksi 2018 Strategy During 2018 BNI Fleksi focused on expanding to low risk customers (SOE, PNS, selected institutions, Taspen PrePension and Pensioners/Asabri/Dapen SOE), in addition to the Fleksi payroll program with acquisition strategies through cross selling to selected Fleksi payroll customers/borrowers (selected company) through the customer payroll base. BNI Fleksi Productivity BNI Fleksi grew 34.2% to Rp23.7 trillion, from Rp17.7 trillion in 2017, and was dominated by the increased Payroll Loans to SOE customers, Ministries, Government Agencies, Selected Companies. Tabel Produktivitas BNI Fleksi Description BNI Flexi The increase in the number of payroll accounts during 2018 saw the potential for an increase in BNI Fleksi in cooperation with several SOE, government ministries/agencies, and selected private companies. Various BNI Fleksi programs were carried out during 2018, including the ease of BNI Fleksi applications that can be submitted at any of the nearest BNI branches or digitally, with a fast processing time. The increase in BNI Fleksi’s portfolio was also the result of channeling loan facilities to pensioners through BNI Fleksi Pension (BFP). This product is a loan facility for prospective pensioners who will retire up to a maximum of 5 (five) years ahead, with an attractive loan limit, up to a maximum of up to Rp500 million, for a period of up to 15 (fifteen) years, with a competitive interest rate. The distribution to BNI Fleksi Pension prospective pensioners was carried out in cooperation with several pension institutions, including Taspen and Asabri and SOE institutions, as well as with fronting agents. The increase in BNI Fleksi was also supported by the flexible marketing channels including ATMs, Mobile Banking, SMS Banking, as well as the accelerated 1 (one) day SLA loan process, simplification of documents and ease of process. 2018 2017 Growth (Rp billion) (Rp billion) (Rp billion) 23,744 17,687 6,057 (%) 34.2% BNI Fleksi Prospects and Strategies BNI’s Payroll Loan growth is the key driver for potential borrowers, and also the increasing productivity age and millennial generation are potential borrowers for BNI Fleksi’s growth in 2019. To increase BNI Fleksi’s loan expansion in 2019, the strategy will be to focus on Selected Partners and Existing Customers, including: 1. Penetrating potential payroll customers (SOE, ASN, TNI POLRI, and corporate customers employees, and conducting managed cooperation with SOEs and Ministries 2. Focus on Pre-retirement Employees and Pension institutions including Taspen Asabri and SOE Pension Funds. 3. Developing digitized products and utilizing data analytics and implementing programs for providing short-term loans for FleksI borrowers, especially payroll, non-payroll customers and millenials. 4. Increasing loyalty programs for active customers in selected partners through communication and activity / event media, as well as ease of additional top up / facility. 5. Developing ease and monitoring for the loan process through digitalization, and optimizing the role of branches as office channeling. 6. Developing BNI Fleksi features to accommodate the needs of Pre-Permanent Employees. In 2019 BNI Fleksi expansion and acquisition will focus on low-risk government institutions employees. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 189
  190. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Credit Card Credit cards are a means of payment using a card that can be used by individuals or corporations to make payments for obligations that arise such as shopping transactions, and cash withdrawals. Credit cards are one of the consumer loan products. 2018 Credit Card Strategy In 2018, BNI Card Business with a “Start from the Card” tagline focused on increasing BNI Credit Card Portfolios and increasing Fee Based Income. Portfolio enhancements involved increasing credit card acquisition penetration from a captive database, and focusing on acquisition in the Business Banking managed Selected Companies. To increase sales volume in 2018, BNI carried out the following strategies: 1. Working on potential millennials through Digital Enhancements with the development of payments using a QR Code using the Yap application. 2. Collaborating with strategic e-commerce merchants with usage programs, either through discount programs / price discounts, installments or BNI Rewards Point redemption. 3. Increasing sales volume penetration outside Jakarta by increasing credit card promo programs at local merchants through discount programs, cashback, BNI Rewards Point and installments. 4. Increasing acquisitions with digital channels via e-forms. 5. Increasing Corporate Card acquisitions for Selected Companies based on managed Business Banking. 6. Cooperating with the Ministry of Home Affairs, Ministry of Foreign Affairs, Ministry of Communication and Information, Ministry of Industry, Ministry of Law and Human Rights, Ministry of Transportation, Ministry of Religion, Corruption Eradication Commission and various other Government Agencies. 7. Launching BNI Affinity Ikanas STAN Credit Card. 8. Developing a Credit Card Management Application to increase Customer loyalty. 2018 Credit Card Productivity Credit Card Performance Description Transaction Value Fee Based Income Outstanding 190 2018 (Billion Rp) 2017 (Billion Rp) Growth (%) 38,924 34,970 11.3% 1,558 1,389 12.1% 12,558 11,635 7.9% Beradaptasi dengan Cepat Menghadapi Perubahan  2018 Credit Card Performance The growth in card number and increase in credit card sales volumes, through e-commerce penetration programs, and the introduction of new products, increased BNI Credit Card sales volumes at the end of 2018 to Rp38,924 billion, or an increase of 11.31% compared to 2017, while credit card outstandings in 2018 amounted to Rp12,558 billion, an increase of 7.9% compared to 2017. During 2018, BNI organized attractive programs for BNI Credit Card holders, and developed new products to expand the market for BNI Credit Card users including: 1. Continuing to work with favored e-commerce merchants such as Traveloka, Tokopedia, Bukalapak, Blibli, Tiket. com, Shopee, Garuda, Agoda, JD.id, Lazada and other favorite e-commerce merchants, in the form of regular, tactical, 0% installment, and BNI Rewards Point redemption programs. 2. In addition to collaborating with e-commerce merchants, the continuity program is still ongoing for other favored merchants by adding 0% installments, discount programs, vouchers, and redemption points at The Duck King, Sushi Tei, Bakerzin, Shaburi, Kintan, Pepperlunch, Pizza HUT, Excelso, Accor Group Hotels, The Body Shop, Lotte Mart, Electronic City, Erafone, iBox, Best Denki, ACE Hardware, Informa, Toys Kingdom, Ranch Market, Farmer Market, Gramedia and other merchants. 3. Became a credit card pioneer whereby points can be redeemed at online merchants such as Garuda Indonesia, Tokopedia, Blibli, Sepulsa, Dinomarket and blanja.com. 4. Participated in various major events such as the Java Jazz Festival, Japan Travel Fair, Inacraft, Garuda Online Travel Fair (GOTF), Mommy and Me, Mid Night Sales Ramadan Senayan City, Cool Japan Travel Fair, Indonesia Maternity and Baby Expo, The Crazy Toys Sale and other big events. 2018 Credit Card Awards In 2018 Credit Cards received several awards, including: 1. First Ranked Conventional Commercial Bank Digital Brand Credit Cards at the Infobank 7th Digital Brand Awards. 2. The Best E-Commerce 2017 from Visa. 3. Second Ranked Conventional Commercial Bank Digital Brand at the Infobank 7th Digital Brand Awards. 4. Promising Company In Branding Campaign “Silver Winner” from BUMN Marketeers Awards 2018. 5. Promising Company In Strategic Marketing “Bronze Winner” from BUMN Marketeers Awards 2018. PT Bank Negara Indonesia (Persero) Tbk
  191. Analisis & Pembahasan Manajemen Credit Card Prospects and Strategies In 2019, in line with the digitalization development, credit card usage in the community will increase, resulting in an increase in the credit card business prospects. To capture these opportunities the BNI Credit Card business will focus on several strategies including: 1. Increasing acquisitions through Captive Data Optimization and Application-Based Digital Acquisition Development. 2. Strengthening e commerce transaction penetration by focusing on top strategic partners, and developing features. 3. Focusing on promotion and communication with merchants in the “leisure experience” category including travel, dining and entertainment. 4. Developing a new business Commercial Card in collaboration with Fintech and Supply Chain Financing. 5. Increasing regional sales volume contributions through regional wisdom programs. 6. Optimizing the Big Data capability through enhanced customer propensity models. 7. Increasing customer loyalty, by developing the Personal Credit Card Digital dashboard application further. 8. Launching new BNI Credit Card products and features. To support the 2019 strategies, several acquisition programs will be carried out: 1. Increasing acquisitions through Captive Data optimization. 2. Placing Direct Sales In Branches. 3. Collaborating with the Big Partner Database. BNI Instan BNI Instan Total Accounts BNI Instan or Cash Collateral Credit (C3), is a is a loan facility product for BNI customers guaranteed by deposits in the form of BNI Savings / Deposits / Giro, or guaranteed by Indonesian Retail Bonds (ORI) purchased at BNI or other Banks, or at Securities Companies as selling agents and stored in the Sub Registry accordingly to the provisions. BNI Instan Strategy in 2018 BNI Instan Expansion during 2018 focused on providing facilities to existing customers and accelerating bookings through managed institutions, SOE Corporations, Ministries, Universities and exiting customers and selected partner employees using digital enhancement support. BNI Instan features were developed by allowing collateral in the form of individual bonds in addition to ORI. BNI Instan Productivity in 2018 In 2018 BNI Instan products decreased by 59.3% (YoY), the BNI Instan portfolio in 2018 amounted to Rp925 billion, down from Rp2.3 trillion the previous year. BNI Instan products are used as a support strategy for funds retention and to increase overall consumer loan growth. Product BNI Instan 2018 (account units) 1,904 2017 (account units) 2,115 Growth (%) (9.98%) In 2018 the total number of BNI Instan accounts reached 1,904 accounts, down 9.9% compared to 2,115 accounts the previous year. BNI Instan Prospects and Strategies BNI Instan is still the driving force for third party fund retention, and focuses on Accelerating bookings through managed institutions, SOE corporations, Ministries and Universities as well as existing customers and selected employees with the support of digital enhancements, as well as developing BNI Instan features. THIRD PARTY FUNDS Bank BNI Consumer and Retail Segment Third Party Funds in 2018 productivity, business prospects and achievement are presented as follows: BNI Instan Performance Product BNI Instan 2018 (Billion Rp) 2017 (Billion Rp) 925 2,275 Growth (%) (59.3) In 2018 the number of BNI Instan accounts/reached 1,904, a decrease of 9.9% compared to 2,115 accounts the previous year. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 191
  192. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk EXPLANATION OF CONSUMER AND RETAIL SEGMENT TPF Consumer Banking Third Party Fund products include savings and deposit products. Deposito BNI Deposito is a time deposit with attractive interest rates in various currencies (IDR/USD/SGD/JPY/HKD/EUR/GBP/AUD). SAVINGS BNI Savings products consist of: 1. Tabungan Plus (Taplus), a savings account that provides PLUS services with various features and benefits. 2. Taplus Bisnis, a savings product intended for businesses and non-businesses, both individuals and nonindividuals, equipped with features and amenities that provide convenience and flexibility to support business ventures. 3. TAPPA (Taplus Pegawai/ Member), a savings account for Employees/Members of a Company/Organization/ Association / Professional Organizations cooperating with BNI as a means of savings, with an Employee / Member identity card. 4. Taplus Muda, a savings product catering for young people with ages ranging from 15 to 25 years that can be submitted individually or as a Co-Brand with Universities that cooperate with BNI. 5. Taplus Anak, a savings product to help teach children to save from an early age, intended for children under 17 years old. 6. Emerald Saving, a savings product for the Emerald customer segment 7. BNI Dollar, a deposit product denominated in foreign currencies (USD/SGD/AUD) with more stable and secure exchange rates providing convenience for transactions. 8. Tapenas, a term savings to help realize future financial planning goals with more certainty and security. 9. Simpanan Pelajar, savings for students in early childhood, kindergarten, elementary, junior high, senior high school, Madrasah (MI, MTs, MA) or equivalent issued nationally by banks in Indonesia, with simple requirements and simple and interesting features, in the context of financial education and inclusion to encourage a culture of saving early. 10. Tabunganku, a savings product for individuals with easy and light requirements issued jointly by banks in Indonesia to foster a culture of saving and to improve the welfare of society. 11. BNI Pandai, a savings product for individuals with easy and light requirements issued by BNI with the characteristics of a Basic Savings Account (BSA) that can be opened throughout BNI branch offices or through agents. 12. Tabungan Indonesia Pintar (PIP), a Student Savings (Simpel) account, a government welfare aid program handled through BNI. CONSUMER AND RETAIL - TPF SEGMENT STRATEGY IN 2018 SAVINGS STRATEGIC The various choices of savings products offered by BNI are tailored to the customers’ needs at every stage of their life. During 2018 the consumer segment TPF strategy was conducted towards dominant/selected customer relationships. TPF growth optimization also focused on increasing the number of closed loop transactions through Digital Services, and merchant optimization, which had an impact on increasing sustain funds. Taplus In 2018, BNI Taplus was present to enliven the world “2018 Asian Games” by adding variants to its the Asian Games debit card for the Indonesian people and became the official savings card for volunteers at the event. In terms of product development, by looking at the market where many people who do not want to get savings interest, BNI Taplus added a choice of products by issuing savings without savings interest. As the core savings product with the largest portfolio, BNI Taplus plays an important role in achieving TPF growth. This year, to enhance customer engagement with BNI, BNI Taplus introduced a major program, BNI Taplus Surprise aimed at gathering fresh funds from individual customers, with direct prizes as a form of appreciation. Taplus Bisnis In an effort to increase transactional banking, BNI innovated the savings products sharing features and benefits for the entrepreneurial segment to enable monitoring financial or business transaction flow. The entrepreneurial segment is a target market that is taken seriously and BNI Taplus Bisnis is being offered to make it easy for entrepreneurs to transact with banks. Special program that target the entrepreneurial segment include the Taplus Bisnis acquisition program through the Lively Entrepreneurship program, the Merchant Reward program, BNI Taplus Bisnis-KUR Retail Bundling, collaboration with strategic partners, Business Center Program, and acquisition of BNI Taplus Bisnis Sahabat Agen 46. In 2018, Taplus Bisnis growth focused on increasing closed loop transactions, inline with business processes through increased entrepreneurial segment transactions, including increasing the number of merchant transactions, and optimizing merchant management in all branches / outlets. Payroll 192 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  193. Analisis & Pembahasan Manajemen In an effort to increase low-cost fund collection (CASA), especially by increasing savings balances, BNI has been marketing BNI Taplus and BNI TAPPA products specifically for customer employees, and companies/institutions who are BNI Customers/Borrowers in the Business Banking sector (Corporate , Commercial, and Retail). The BNI payroll company employees receive various benefits including BNI KTA Fleksi loan facilities with competitive interest rates, and BNI KPR Griya fast processing. In addition, BNI payroll customers can also enjoy debit shopping promos in the form of discounts or cashback, products bundling with other savings products such as taplus kids and tapenas, loyalty payroll programs and promo info on smartphones after installing BNI Experience apps from the Play Store. The loyalty payroll programs implemented in 2018 in 60 selected companies aims to increase payroll customer loyalty across the regions. Taplus Anak and Taplus Muda In 2018, BNI Taplus Anak returned to at least 100 (one hundred) schools spread nationwide in collaboration with CIA Magazine (Creativity in Action) during the BNI Taplus Anak and 2018 Asian Games campaigns. One feature that drew the attention of the schools visited by BNI and the CIA Magazine was the BNI Taplus Anak Debit Card and BNI Taplus Muda design made especially for the 2018 Asian Games. These Debit Cards not only function as an ATM and Debit card, but also function as BNI Tapcash (electronic money). In the schools, knowledge about BNI and the many benefits of saving from an early age was given, and the CIA Magazine team introduced the Asian Games in a fun way, including the Asian Games’ history, participating countries, and mascot philosophy. In the schools visited by BNI other activities offered included BNI-Edupatrol products, which provides enormous benefits for Schools, Parents and Students. To complement the school’s financial management needs, the BNI-Edupatrol offer is very effective when bundled with the BNI Taplus Anak and BNI Taplus Muda. We also fully understand the current market trends, and one of the popular start-ups for the nation’s children this year is the Ruangguru Application, and we collaborated with Ruangguru for regular programs and tactical programs during Ramadhan and Eid al-Fitr. In 2018, BNI Taplus Muda also presented many activities aimed at increasing engagement with the millennial community. We collaborated with partners who have expertise in millennial activities, including BNI Java Jazz Festival 2018 (Java Promosindo), SkyRun 2018 (Labschool), Sky Avenue (Labschool), Cravier (Labschool), I Loop Run (Telkomsel) , UI-Half Marathon (ILUNI UI), Yellow ILUNI Program (ILUNI UI), and ITB Half-marathon (ITB Alumni). In addition, we also carried out several programs that are close to millennial hobbies including the Sketch Your Card program which is a design competition for the BNI Taplus Muda debit card. We also collaborated with Telkomsel to organize the BNI PT Bank Negara Indonesia (Persero) Tbk  Taplus Muda program with 2GB extra Telkomsel quota prizes. At the end of 2018, BNI Taplus Anak was present to support the Young Singers Concert called “Naura” in Bandung and sponsored the Indonesia Maternity, Baby, and Kids Expo 2018 (IMBEX) event at JCC Jakarta City. Tapenas BNI Tapenas is a time savings account used by customers’ future planning, to help realize their financial plans in a more secure and safe way. BNI Tapenas provides free customer life insurance protection and is BNI’s commitment to providing more certainty for customers to achieve their future plans. During 2018, there were several BNI Tapenas promotions, including a bundling program between BNI Tapenas and other BNI Savings products, including Taplus Anak, Taplus Bisnis, and Taplus Pegawai. The BNI Tapenas promotion program gave away free direct prizes to Customers including Precious Metals and the latest Samsung and Iphone flagship gadgets. In addition, to make BNI Tapenas account opening easier, BNI developed a new channel enabling opening through BNI Mobile Banking, providing practicality so that Customers opening BNI Tapenas do not have to go to the BNI outlets. Government and Financial Inclusion Programs In addition to general customers, BNI savings products have basic saving account characteristics that are also used to support government programs in terms of channeling government aid funds to support the financial inclusion programs such as: 1. BNI Student Savings for Smart Indonesia Program (PIP) from the Ministry of Education and Culture, and the Ministry of Religion. 2. BNI Pandai for the Family Hope (PKH) and Non-Cash Food Aid (BPNT) programs from the Ministry of Social Affairs, as well as social assistance programs that use regional budgets in several provinces. 3. BNI Pandai and TabunganKu for the Farmer Card Program from the Ministry of Agriculture. 4. BNI Pandai and KUSUKA Card (Marine and Fisheries Business Players) from the Ministry of Maritime Affairs and Fisheries. 5. BNI Pandai for Mekaar PNM Program, a program for underprivileged mothers who are customers of PNM. 6. Special Non-Individual Savings as a subsidy program for Farmer Groups (Poktan) from the Ministry of Agriculture. 7. BNI Pandai, TabunganKu, BNI Simpel for waste saving/ movement programs which is a combination of environmental education and financial inclusion. 8. BNI Smart for E-retribution programs for markets in several provinces. Beradaptasi dengan Cepat Menghadapi Perubahan 193
  194. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk DEPOSITO STRATEGY Deposito is a customer investment instrument where customers can place funds with a variety of options and competitive interest rates. Through digitalization BNI has made it easier for customers to hold deposits, where they can safely, quickly and easily open their own deposit accounts through internet and mobile banking features. It is hoped that digitalization will meet the needs of the millennia segment and customers looking for convenience during their various busy activities. CONSUMER AND RETAIL SEGMENT TPFR PRODUCTIVITY Consumer and Retail segment TPF productivity is presented as follows: Total Third Party Fund Accounts Description 2018 (Account Units) Savings Deposits TOTAL 2017 Composition (%) 43.181.705 (Account Units) 99.0% Growth Composition (%) (Account Units) 99.0% 10.384.517 32.797.198 (%) 31.7% 364.988 1.0% 337.216 1.0% 27.840 8.2% 43.546.693 100.0% 33.134.405 100.0% 10.412.357 31.4% The increase in savings accounts in 2018 included an acquisition program involving payroll cooperation with Companies/ Institutions, especially those who are BNI Customers/Borrowers in the Business Banking sector (Corporate, Commercial and Retail), and through school to school and campus to campus acquisition programs, and the 2018 Government Programs with several Government Ministries and Institutions such as the Program Bantuan Sosial non tunai, Program Indonesia Pintar (PIP) and Program Simpanan Pelajar (Simpel). Total Third Party Funds Description 2018 (Million Rp) Tabungan Deposito TOTAL 2017 Composition (%) 189,708,216 73.0% (Million Rp) Growth Composition (%) 169,812,480 73.0% (Million Rp) 19,895,737 (%) 11.7% 68,486,923 27.0% 62,807,329 27.0% 5,919,426 9.5% 258,195,139 100.0% 232,619,809 100.0% 25,815,163 11.1% In line with the increase in the number of accounts, total third party funds at the end of 2018 reached Rp238.2 trillion, or an increase of 11.1% compared to 2017, due mainly to savings increasing by 11.7 % to Rp189.7 trillion, deposits increasing by 9.5% to Rp68.5 trillion. Awards related to the Savings in 2018 as follows: 1. Innovative Simpel Implementation Bank (FIN OJK EXPO 2018) 2. The Best Bank for Simpel / Simpel iB Implementation (FIN OJK EXPO 2018) 3. Top Brand 2018 Category Installment Savings: BNI Tapenas. 4. Top Brand 2018 Category Child Savings: BNI Taplus Anak. 5. Reader Choice Award Mother and Baby Indonesia, Education Savings Category. 194 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  195. Analisis & Pembahasan Manajemen PERFORMANCE PROSPECTS AND STRATEGIES Savings Products Prospects and Strategies Economic growth is expected to increase by 5.3% in 2019 which will have an impact on the potential for deposits growth which is expected to grow between 9.0% to 10%. BNI is committed to seeing the growth of its special savings continuing above the industry, by continually increasing digital transactions, strategic partnerships, and developing business models, thus BNI’s savings are expected to grow by 24%. The focus for increasing deposits, especially CASA, will focus on the entrepreneurial, employees, and millennial savings sectors, through increased acquisitions, closed loop transactions, and increasing e-channel transactions both POS and e-commerce, and optimizing the role of Agen46, with strategic policies focusing on: 1. Entrepreneurship: Acquiring and increasing Tabungan Bisnis balances through merchant transaction activities and EDC optimization both with activation and enhancement of e-channel transactions, and collaborating with the Business Centers, as well as optimizing the Agent 46 role. Increasing Tabungan Bisnis balances through a customer and debtor financing and management program. 2. Employees: a. Increasing Payroll balances and accounts through acquisition and loyalty programs to selected companies, and payroll customer retention programs, as well as utilizing payroll applications for acquisitions. Payroll program sales through bundling payroll with BNI Fleksi or BNI Griya and various e-channel facilities and usage debit programs. 3. Millennials: a. Increasing Millennial segment Savings through formal and non-formal approaches with education institutions and first jobbers and massive acquisitions through the School to School program (Ayo menabung Bersama BNI), Campus to Campus (Level 3 Taplus Muda), Social Media Activation and Cross Selling Products through customer service officers, and collaborating with the Ministry of Education and Culture, or Ministry of Religion to channel the Program Indonesia Pintar (PIP). To attract customers from this generation, BNI will develop saving education activities for digital transactions. PT Bank Negara Indonesia (Persero) Tbk  4. Increasing customer preferences and customer experience and enhancing BNI’s image in transactional banking, through education and activation of e-channel facilities, massive usage debit programs or e-channel transactions. 5. Developing digital applications for convenient acquisition channels and transactions; and opening a digital account through a smartphone and pening digital accounts through the EDC Android machine. 6. Developing Digipoin, a loyalty program in the form of reward points, for BNI savings customers by actively adding savings balances, e-channel transactions and debit cards. Deposit Products Prospects and Strategies Deposits are still one of the safer placement instruments for customers, and can also be used as collateral for loans. Growth in consumer deposits is expected to grow by 23%. The strategy to gain Deposits in 2019 will be focused on increasing digital transactions, and bundling with Savings, Tapenas products marketing DEBIT CARD BUSINESS EXPLANATION OF CONSUMER AND RETAIL SEGMENT CARD BUSINESS BNI continues to maintain its position as one of the leading banks in the credit card business and continues to develop its debit card business. BNI debit cards come in many choices with typical Indonesian batik designs including BNI Silver Debit Cards, BNI Gold Debit Cards, BNI Platinum Debit Cards and BNI Emerald World MasterCard Cards (especially for priority customers). In addition, BNI is continuing to expand its cooperation with non-profit communities with its Affinity Debit Cards, and with business communities with its Co-brand Debit Cards including Ferrari by BNI, LotteMart Wholesale Debit Card, Garuda Debit Card, Multimart Debit Cars and Indogrosir Debit Cards and others. Beradaptasi dengan Cepat Menghadapi Perubahan 195
  196. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk 196 DEBIT CARD STRATEGIES IN 2018 To increase BNI 2018 Debit Card usage the following strategies were conducted: 1. Conducting a campaign program that included increasing customer transactions habits (cash less customers). 2. Increasing the debit card transaction frequency, in an effort to establish a usage experience and brand awareness, as well as increasing customer loyalty through an attractive activation program and usage program. DEBIT CARD PRODUCTIVITY IN 2018 The BNI Debit Card Strategies implemented in the BNI Debit Card flagship program during 2018 included: 1. 2018 National Promos Debit card promotion programs throughout 2018 at merchants where customers routinely conduct transactions including Supermarkets, Convenience Stores, Department Stores and Restaurants. Collaborating with favorite merchants to establish and increase public awareness of the benefits of debit cards as a substitute for cash. 2. BN’s I 2018 debit card flagship program included Supermarkets / Convenience Stores, Restaurants, Bookstores, Cinemas and leading Home Furnishing promos. The BNI debit card promos were carried out in collaboration with BNI’s leading E-Commerce in collaboration with favorite amusement rides. 3. 2018 Local Promos BNI Debit Card also cooperated with local merchants in the areas outside the Jabodetabek area to get closer to BNI Debit cardholders located close by. Partnership collaboration with several business communities is also being increasingly enhanced, especially with loyalty programs and activations. 4. Co-Brand Promo Programs with the intention of providing appreciation not only to BNI customers but also BNI business partners. For Cobrand Garuda BNI debit cardholders, customers can receive Triple Miles per transaction using the kartu#debit Cobrand Garuda BNI card. The LotteMart Wholesale Co-brand debit card program provides monthly cashback for every customer transaction at LotteMart Wholesale. For BNI BNIIndogrosir debit cardholders BNI provides additional benefits when customers use their BNI-Indogrosir debit cards. In 2018, BNI’s debit card sales volume growth in 2018 reached 21.7% (YoY), higher when compared to 20.1% (YoY) in 2017. This is driven by the 24.9% increase in the number of BNI debit cards transactions in 2018 compared to 2017. Beradaptasi dengan Cepat Menghadapi Perubahan  Tabel Kinerja Pertumbuhan Kartu Debit 2018 Transaction Debit Improvement Growth 2018 (YoY) Growth 2017 (YoY) Sales Volume 21.7% 20.1% Number of Circulating Cards 39.8% 41.0% Card transaction 24.9% 19.6% Frequency 33.3% 26.5% BNI Debit Card Awards in 2018, included 1. Best Millennial Segment Solution (MasterCard Award 2018) 2. Best Innovative Acquiring for QR (MasterCard Award 2018) 3. Best Affluent Debit Card Program (MasterCard Award 2018) 4. Most Creative Acquisition Campaign (MasterCard Award 2018) DEBIT CARD PROSPECTS AND STRATEGIES In 2019, sales volume growth focused on the following strategies: 1. Increasing customer preferences and customer experience and increasing debit card transactions through usage debit programs for both POS and e-commerce transactions, while focusing on the Top 10 Merchant. 2. Increasing customer debit card usage in collaboration with merchants and e-commerce in accordance with market developments and millennial generation behavior. 3. Increasing the number of Debit Cards transactions through attractive activation programs and usage programs, including promo programs for customers optimizing online and offline media, and also as communication and updating programs / campaigns. DEBIT CARD OR CO BRAND FEATURE DEVELOPMENT There are several plans in 2019 for developing debit card features to improve security and convenience for customers in conducting transactions, including: 1. Collaboration between BNI Debit Card brand and selected institutions 2. Development of the 3D secure debit card master 3. Development of a B-secure feature for the Private Label Debit Card e-commerce transactions, to support the National Payment Gateway (GPN) program PT Bank Negara Indonesia (Persero) Tbk
  197. Analisis & Pembahasan Manajemen CONSUMER AND RETAIL SEGMENT INCOME AND PROFITABILITY The Consumer and Retail Segment income and profitability is presented as follows: Consumer and Retail Segment Income and Profitability Description Interest income and Sharia income-net *) Premium income -net Other operating income 2018 2017 (Rp million) (Rp million) Growth (%) (Rp million) 10,775,890 9,558,035 1,217,855 12.7% - - - - 6,580,492 5,875,743 704,749 12.0% Allowance for impairment losses (1,285,949) (1,538,979) 253,030 (16.4%) Other operating expenses (8,941,323) (8,961,270) 19,947 (0.2%) 7,129,110 4,933,529 2,195,581 44.5% Operational income Non-Operating (Expense)/Income-Net Income before tax expense Total assets Total liabilities 14,074 16,352 (2,278) (13.9%) 7,143,184 4,949,881 2,193,303 44.3% 78,206,547 69,216,585 8,989,962 13.0% 259,917,921 237,864,259 22,053,662 9.3% *) termasuk komponen internal transfer pricing antar segmen operasi In 2018 Interest income and Sharia income-net in the Consumer and Retail segment reached Rp10.8 trillion, an increase of 12.7% compared to Rp 9.6 trillion in 2017. While the Consumer and Retail segment operational profit in 2018 reached Rp7.1 trillion, an increase of 44.5% compared to Rp5.0 trillion the previous year. TREASURY AND INTERNATIONAL The Treasury and International segment treasury activities including foreign exchange transactions, money markets, capital markets and fixed income, including international banking business and overseas branch supervision. TREASURY Bank BNI Treasury Segment 2018 productivity, business prospects and achievement strategies are presented as follows: EXPLANATION OF TREASURY SEGMENT BNI Treasury products are classified into transactional products, investment products, and hedging products. TRANSACTIONAL Transactional product consists of Forex-TOD, Forex-TOM, Forex-SPOT, and Forex-Bank Notes. Details regarding transactional products are described as follows: 1. Forex - TOD Foreign exchange trading where the transaction agreement and transaction settlement are carried out on the same day. PT Bank Negara Indonesia (Persero) Tbk  2. Forex - TOM Foreign exchange buying and selling where transaction settlement is carried out 1 (one) working day after the date of the transaction agreement. 3. Forex – SPOT Foreign exchange buying and selling where transaction settlement is carried out 2 (two) working days after the date of the transaction agreement. 4. Forex - Bank Notes Transactions involving the exchange of physical ownership of the currency (banknotes) involved in the transaction. Can be distinguished by; a. Banking Transactions Banknote deposits or withdrawals from customer accounts with the same currency. Revenue for branches is fee income in lieu of exchange. b. Trading Transactions Buying or selling banknotes. Branch revenue is from foreign exchange differences. Beradaptasi dengan Cepat Menghadapi Perubahan 197
  198. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk INVESTMENTS Treasury investment products consist of Deposit on Call (DOC), Money Market Account (MMA), and retail bonds. Details regarding investment products are described as follows. 1. Deposit on Call (DOC) a. Placement of funds for a minimum period of 3 days up to 30 days. b. The interest rate is based on interbank interest rates. c. Can be withdrawn at any time. d. Minimum placement Rp100 million or USD 75 thousand. 2. Money Market Account (MMA) a. Placement of funds for a minimum period of one day up to 1 year. b. b. The interest rate is based on interbank interest rates. c. Can be withdrawn at any time. d. Minimum placement Rp1 billion or USD 100 thousand. 3. Retail Bond Bonds are evidence of indebtedness by the issuer, which will be repaid at maturity in accordance with the terms and conditions previously established. Bond transactions that can be made between the Treasury Division and Individual Clients for transactions include: a. In the primary market including corporate bonds and nonretail government bonds. b. In the secondary market including corporate bonds, retail government bonds, c. Non-retail government, and other countries’ government bonds 4. Depo Swap A Depo Swap is an investment product in foreign currency with a maximum rate of return with the principal investment placement guaranteed 100%. Depo Swap is a combination of forex transactions in the form of FX Swap and deposit. In this transaction the customer converts their forex currency into other foreign currencies and reconverts the forex currency in the future for the tenor at exchange rates established at the start of the transaction agreement. The foreign exchange gain on foreign exchange transactions (forex gain) becomes the optimal return on the customer’s investment fund placement. 5. Market Linked-Dual Currency Investment (ML-DCI) ML-DCI is a structured product that is a combination of foreign exchange savings products and FX Options. This product provides a high return when compared to conventional savings products as it combines savings products linked to exchange rate movements. This product has non-capital protected characteristics / does not guarantee the principal investment. 198 Beradaptasi dengan Cepat Menghadapi Perubahan  HEDGING 1. Currency Forward Sale and purchase of foreign currencies where settlement is carried out more than two business days after the transaction date. The exchange rate used for this forward transaction takes into account forward points. 2. Domestic Non-Deliverable Forward (DNDF) Standard foreign exchange against rupiah derivative transactions (plain vanilla) is Forward transactions with fixing mechanisms carried out in the domestic market. The fixing mechanism is a transaction settlement mechanism without the movement of principal funds by calculating the difference between the Forward transaction rate and the reference rate on a certain date specified at the fixing date. 3. Currency Swap ‘Buy and Sell’ transactions for one currency against another currency that is carried out simultaneously with the same counterparties. 4. Currency Option Agreement to provide a right and not an obligation of the seller (option writer) to the buyer (option holder) to buy or sell a certain amount of nominal currency in the foreseeable future at a predetermined price (strike price) on or before the specified time (expiry date). 5. Interest Rate Swap (IRS) Agreement between two parties to exchange a series of fixed interest payments (fixed rate) in one currency with a series of fluctuating interest payments (variable rate) in the same currency (or vice versa), without the exchange of principal loans 6. Cross Currency Swap (CCS) An agreement between two parties to exchange principal and interest payments in different currencies. The exchange loan principal uses the exchange rate at inception. 7. Call Spread Option A Structured Product with a combination of 2 Currency Option transactions i.e. Buy Call Option (purchase with the right to purchase a particular currency) and Sell Call Option (sale with the right to purchase a particular currency), for the same nominal amount and Time Period, but with different strike prices for each Buy Call Option and Sell Call Option. The CSO transaction must be made through Dynamic Hedging with the aim that hedging executors are not exposed to exchange rate risk due to market rates beyond the Sell Call Option strike price. Dynamic Hedging is executed by performing several CSO transactions in accordance with the number of market rate frequencies exceeding the Sell Call Option strike price, and the CSO with dynamic hedging as part of the initial CSO transaction in one unit. PT Bank Negara Indonesia (Persero) Tbk
  199. Analisis & Pembahasan Manajemen TREASURY SEGMENT STRATEGY IN 2018 In 2018, the Treasury segment strategies included the following: 1. Increasing the capacity and capability of outlet staff to fit the business needs in order to beat the competition. 2. Managing Securities Portfolios actively whilst maintaining risks through both primary and secondary markets. 3. Managing the Bank’s Net Open Position to maximize FX gain 4. Developing FX and Fixed Income Market product warehousing to meet customer needs. 5. Participating actively in close loop transaction programs through business units and subsidiaries. 6. Marketing strategies both above / below the line to increase brand image and market penetration. 7. Managing short-term liquidity by utilizing facilities determined by Bank Indonesia through GMW Averaging and other instruments 8. Developing and implementing digital treasury applications according to customer needs. TREASURY SEGMENT PRODUCTIVITY The following relates to BNI forex transactions performance against interbank based on transaction volume and profit. Forex Gain by Volume and Profit Growth: Product 2018 2017 Pertumbuhan (%) BASED ON VOLUME (IN USD MILLION) SPOT FORWARD SWAP CCS, IRS Total 68,586 66,963 2.4 1,259 1,301 (3.2) 52,547 77,720 (32.4) 839 311 169.8 123,231 146,295 (15.8) 433,036 813,901 (46.8) BASED ON PROFIT (IN MILLION RP) FOREX GAIN Forex Gain VSpot transaction volume increased by 2.4% as the bank’s business activities increased. While on a volume basis, forward transactions experienced a slight decline, caused by a change in the hedging pattern of customers who preferred hedging instruments through Cross Currency Swaps and Interest Rate Swaps. The CCS and IRS transaction volume in 2018 reached US$839 million, an increase of 169.8% compared to US$311 million in 2017. Swap transaction volumes decreased, in line with the declining liquidity market conditions in 2018. In 2018, BNI’s Forex gain declined in the midst of volatile market conditions, and the rupiah exchange rate weakening against the dollar, which touched Rp15,238 per US dollar. Nonetheless, BNI was still able to record a gain in forex profits of Rp433.04 billion in 2018, supported by increased customers, easy access to domestic and international markets, and competitive prices and reliable human resources. PT Bank Negara Indonesia (Persero) Tbk  Capital Gain - Interbank Trading In 2018, Bond trading transaction volumes rose 27.22% from Rp82.49 trillion in 2017 to Rp104.94 trillion. However, the transaction profit decreased 30.17%, from Rp81.47 billion to Rp56.89 billion. This was partly influenced by the increase in the Fed Fund benchmark interest rate (Fed Fund Rate) in 2018 that put pressure on the market. It increased by 1.00% during 2018, from 1.50% in January 2018 to 2.50% in December 2018. Together with the Fed Fund Rate movement, BI also increased the BI 7 Days Reverse Repo by 1.75 bps during 2018, which at the beginning of January 2018 stood at 4.25%, and by the end of December stood at 6.00%. In addition, increased global uncertainty due to trade war between the US and China, and the crises in Argentina and Turkey, also contributed to a negative sentiment in the market. Beradaptasi dengan Cepat Menghadapi Perubahan 199
  200. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Capital Gain - Interbank Trading Volume and Profit Growth Product Obligasi Trading 2018 2017 Growth Volume Profit Volume Profit Volume Profit (Rp billion) (Rp billion) (Rp billion) (Rp billion) (%) (%) 104,935 57 Capital Gain - Bonds and Securities By Q4 - 2018 outstanding securities had reached Rp.88.8 trillion, the majority of which were placed in government bonds, an increase of 14.9% from the position last year. Although the majority are placed in government bonds and BI instruments, BNI continued to diversify into several corporate bonds as a form of yield enhancement within the measured risk limits and corridors. 82,485 82 27 (30) In the midst of the volatile bond market conditions in 2018, BNI recorded fee-based profits from the sale of securities of Rp539 billion, from mitigation processes carried out, especially related to market risk for hedging transactions. Capital Gain-Bonds and Securities Growth by Volume and Profit Product Bonds and Securities 2018 2017 Volume Profit Volume Profit Volume Profit (Rp billion) (Rp billion) (Rp billion) (Rp billion) (%) (%) 63,946 539 TREASURY SEGMENT PROSPECTS AND STRATEGIES To reach the 2019 targets, the following strategies will be implemented: 1. Managing liquidity through DPK and FNK instruments optimally to encourage growth in the bank’s business 2. Developing customers for all treasury products 3. Increasing the capacity and capability of outlet staff in line with growing business needs 4. Managing Securities Portfolios actively whilst maintaining risks in the both primary and secondary markets 5. Managing the Bank’s Net Open Position to maximize FX gains 6. Optimizing excess liquidity management for instruments that provide the best return (yield) while taking into account daily liquidity conditions 7. Making BNI a one stop for financial solutions 8. Expanding market segments for institutions and product segments 9. Promoting Treasury products and activities. 10. Developing and implementing treasury digital applications based on customer needs 11. Developing an agile TRS organizational structure based on business needs 200 Growth Beradaptasi dengan Cepat Menghadapi Perubahan  110,088 718 (42) (25) INTERNASIONAL Bank BNI International Segment 2018 productivity, business prospects and achievement are presented as follows : EXPLANATION OF INTERNATIONAL SEGMENT The International Segment offers Financial Institution business Services in the Overseas and the Domestic Branch Offices including banking products including BNI Smart Trade, Remittance, International Desk, Custody, and Trustee. OVERSEAS BRANCH OFFICES Overseas Branch Offices (OBO) Products and Services include: LOAN PRODUCTS In accordance with BNI’S Road Map, as a business bridge between Indonesia and the world, the loan products offered by the OBO focus on facilitating Indonesian companies in developing their business overseas, including: 1. Local Loan A loan facility offered by the OBO to Indonesian business groups or counterparties for their overseas Indonesian companies, either bilaterally or syndicated. The types of loans offered are Working Capital Loans, Investment Loans and term loans. PT Bank Negara Indonesia (Persero) Tbk
  201. Analisis & Pembahasan Manajemen 2. Offshore Loan A loan facility provided by the OBO to domestic debtors to finance working capital short-term needs, as well as to finance the procurement of capital goods for the purpose of rehabilitation, modernization and expansion to be completed in the medium or long term. 3. Trade Loan A facility provided by the OBO based on Trade Finance transactions conducted by Indonesian business groups or counterparties for overseas Indonesian companies. 5. 6. Third Party Fund Products OBO with full banking licenses, such as Singapore, Hong Kong, Tokyo and Seoul, can collect third party funds from local customers through OBO products including Savings, Deposits, and Current accounts. Details relating to overseas third-party fund products include: 1. Savings Deposit service developed to accommodate the needs of individual customers. 2. Giro Deposit service for individuals and corporate customers to meet the needs of operational activities with checking facilities as an attraction. 3. Deposits Funding service with maturities ranging from 1 month to 12 months, owned by the OBO, providing a special rate in each OBO, according to the license owned, to selective customers. Products and Services The products and services offered by all OBO include. 1. Export Letter of Credit Where the bank receives the original LC including preadvice and amendments from: a. Issuing Bank to be forwarded to the Beneficiary Second Advising Bank b. First Advising Bank to be forwarded to the Beneficiary 2. Opening Import Letter of Credit A bank activity to open LC (master LC) including Preadvice and amendments (amendment LC) as a guarantee of conditional payment on the basis of instructions or requests from Applicants or in its own name. 3. Confirming Letter of Credit A bank activity to ensure payments of a LC and advise amendments upon request or appointment by the Opening Bank as required under the LC. 4. Standby Letter of Credit (SBLC) A bank activity to execute Standby Letter of Credit (SBLC) transactions, s subject to UCPDC or ISP, covering: a. Publishing SBLC b. Extending SBLC c. Confirming SBLC PT Bank Negara Indonesia (Persero) Tbk  7. 8. 9. d. Transferring SBLC e. Cancelling SBLC f. Realizing SBLC g. Un-used SBLC Inward Bill Collection An activity for: a. The Collecting Bank to instruct collection from the Remitting Bank to the Presenting Bank, or b. The Presenting Bank to instruct collection from the Remitting Bank. Outward Bill Collection An activity as Remitting Bank to send commercial documents, or accompanied by financial documents (draft/promissory note), and to instruct collection to the Presenting Bank, or through overseas Collecting Bank, for submission to the Drawee on the basis of payment or acceptance. Bank Guarantee Bank guarantees issued on behalf of customers such as for the establishment of the company, employment contracts, etc. for full cover or by using an existing credit facility. Remittance Is a written order at the request of an individual or legal entity (ordering customer or institution) to a remitting bank/ institution, to send a sum of money to another designated party (beneficiary customer or institution). Financial Institution business services Financial Institution business products and services include the following Business to Business (B2B) services: a. Bank Guarantee Under Counter (BGUC) The issuance of Bank Guarantees based of request and with a sure guarantee from the correspondent bank (The Instructing Party). b. Bank to Bank Financing – Refinancing A derivative for a trade finance transaction where BNI provides financing on bills held by Bank correspondents for trade finance transactions. c. Bank to Bank Financing-Trade Advance Financing Refinancing by BNI for the Issuing Bank, in the form of payment for LC / SKBDN, or non-LC / SKBDN, to the Nominated Bank. d. Bank to Bank Financing-Forfaiting Purchasing the right to collect Banker’s Acceptances (B/A) held by the Bank as a Correspondent Nominated Bank (forfaitee) in respect of L/C or SKBDN transactions with discount without recourse. e. Risk Participation Is the partial transfer of risk owned by an applicant bank to BNI in a funded or unfunded form that is related to trade transactions agreed upon between the applicant bank and other banks. Beradaptasi dengan Cepat Menghadapi Perubahan 201
  202. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk International Banking Services The International Segment offers Financial Institution business Services in the Overseas and the Domestic Branch Offices including BNI Smart Trade, Financial Institutions, Remittances, International Desks, Custody, and Trustees. Bni Smart Trade BNI Smart Trade is classified as a trade product, trade service, and trade finance. Details of the Smart Trade-related products are described as follows: BNI Smart Trade Trade Product Trade Service Trade Financing Letter of Credit Open Negotiation SKBDN Advising Discounting Bank Garasi Realization Refinancing Doc Collection Settlement Bills Payment Trade Products 1. Letter of Credit Letter of Credit is a guarantee of payment instruments issued by the bank (Issuing Bank) to recipients (Beneficiary) which is subject to Uniform Customs and Practice for Documentary Credits (UCP). 2. Domestic Letter of Credit A Domestic Letter of Credit is a guarantee of payment instruments issued by the bank (Issuing Bank) to recipients (Beneficiary), which is subject to Bank Indonesia Regulations and is used for domestic trade transactions. 3. Bank Guarantee A Bank Guarantee is a guarantee of payment instruments issued by the bank to guarantee recipients (Beneficiary) if the guaranteed party is in breach of contract (tort). Bank Guarantees are subject to Bank Indonesia Regulations or Uniform Rules for Demand Guarantee (URDG) or International Standby Practices (ISP). 4. Documentary Collection Documentary Collection is a payment system for world trade conducted through banking services in the form of undocumented bills subject to Uniform Rules for Collections (URC). Trade Services Trade Services is a trade business that provides services to customers to receive products/services in the framework of trade transactions, or export/import and domestic trade. Trade services include: 3. Realization 1. Open Realization is a service to deliver/submit trade Opening is a service for the issuance of an instrument documents to the recipient of the documents as the (L/C, SKBDN, Bank Guarantee), which ensures certainty importer/purchaser, with agreed conditions. of payment, or underwrites contract performance, by 4. Settlement the beneficiary with the conditions agreed upon by the Settlement is a service to settle trade transactions parties to the agreement. in the form of transaction payments that have been 2. Advising implemented or agreed. This trade service transaction Advising is a delivery service such as verification of the makes payments to the exporters/sellers via bank validity/correctness of an L/C, SKBDN, Bank Guarantee transfers. transmitted by overseas and domestic correspondent banks for delivered to the recipient/beneficiary. 202 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  203. Analisis & Pembahasan Manajemen Trade Financing Trade Financing is a business managed by the International Division to provide financing to customers for trade/ commercial transactions with instruments in the form of L/C, SKBDN, Documentary Collection, Bills Payment, and Invoices or bills. Trade financing includes. 1. Negotiation Negotiation is the receiving of draft payments drawn by the beneficiary to a bank on the basis of documents presented and declared in accordance with the terms and conditions of the LC/SKBDN/SBLC with sight tenor. 2. Discounting Discounting is the receiving of draft payments drawn by the beneficiary with a bank on the basis of documents presented and declared in accordance with the terms and conditions of the LC/SKBDN/SBLC with since tenor. 3. Refinancing Refinancing is the takeover of financing in the form of payments secured by an issuance L/C or SKBDN. Financing in the form of refinancing can be carried out at the time of initial opening or when approaching the due date for payment. 4. Bills Payment Bills Payment is financing for exporters/sellers and importers/buyers on the basis of a documentary collection/open account transaction. Financial Institution Products and Services Financial Institution business products and services include the following Business to Business (B2B) services: 1. Bank Guarantee Under Counter (BGUC) The issuance of Bank Guarantees based of request and with a sure guarantee from the correspondent bank (The Instructing Party). 2. Bank to Bank Financing – Refinancing A derivative for a trade finance transaction where BNI provides financing on bills held by Bank correspondents for trade finance transactions. 3. Bank to Bank Financing-Trade Advance Financing Refinancing by BNI for the Issuing Bank, in the form of payment for LC / SKBDN, or non-LC / SKBDN, to the Nominated Bank. 4. Bank to Bank Financing-Forfaiting Purchasing the right to collect Banker’s Acceptances (B/A) held by the Bank as a Correspondent Nominated Bank (forfaitee) in respect of L/C or SKBDN transactions with discount without recourse. PT Bank Negara Indonesia (Persero) Tbk  5. Bank to Bank Financing-Term Loan Facility Bank Granting of credit facilities to other banks either with the status of BUMN, BUSN, BUMD, or Branch Offices of Foreign Banks domiciled in Indonesia. 6. Risk Participation Is the partial transfer of risk owned by an applicant bank to BNI in a funded or unfunded form that is related to trade transactions agreed upon between the applicant bank and other banks. Remittance Remittance is a written order at the request of individuals or legal entities (ordering customer or institution) to a remitting bank/institution, to transfer money to another designated party (beneficiary customer or institution). Types of remittance includes: 1. Incoming Fund Transfer or Incoming transfer (ITR) or Incoming remittances Remittances from individuals or legal entities through overseas remitting banks in foreign currency/rupiah, or through domestic banks, especially for foreign currency, addressed to BNI as the recipient bank, for recipients’ benefit whose names are designated in the remittance, either as BNI customers or non-customers in the country. The ITR transaction code in BNI is S06. BNI Wesel PIN is a Remittance/Incoming Transfer (ITR) service from overseas, that can be exchanged for cash (without an account) in BNI outlets and BNI paying agents such as Pos Indonesia, Alfamart, and pawnshops. Disbursements are made through a correct PIN number and valid identity cards (KTP/SIM/ Passport). 2. Outgoing Fund Transfer (OTR) or Outgoing remittances Unconditional written order from BNI at the request of a customer and/or for BNI’s benefit addressed to the correspondent bank to pay a certain amount of money to a specified person/entity (beneficiary). Includes foreign currency remittances to correspondent banks at home and abroad. The OTR BNI transaction code is S10. BNI remittances can be received on the same day (same day service) with time limits (cut off time) determined by each currency. BNI also has multi currency remittances services that can be received in 125 types of currency from 160 countries. Beradaptasi dengan Cepat Menghadapi Perubahan 203
  204. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk International Desk 1. Loan The International Desk Unit provides loan services in the form of IDR or offshore loans in USD and JPY currencies and Open Account Financing (OAF) for International Corporate Clients in Indonesia with competitive interest rates based on Stand by LC (SBLC), guaranteed by international banking / financial institutions. For granting these loans or Open Account Financing (OAF) scheme, the International Desk coordinates with the Credit units (LMC, SKM, SKC). 2. Third Party Funds Cooperation with branches in providing services for opening Savings, Current Accounts and Deposits for Customers, and foreign and International corporations in Indonesia. 3. Cash Management In collaboration with Transaction Banking Services Division (TBS), marketing BNI Cash Management products to International corporate customers in Indonesia 4. Credit Card In cooperation with the Business Card Division (BC) offers personalized credit cards to foreign individuals as well as International corporations. Custody Based on Law no. 8/1995, custodian and other assets related to securities and other services, including receiving dividends, interest and other rights, completing securities transactions, and representing the account holders as our customers. BNI Custodial Services offers the following. 1. Custody Services a. Storage, management and administration of securities, either script or scriptless, on the Indonesian Stock Exchange. b. Storage, management and administration of securities issued by the government such as Government Securities (SUN), Indonesian Retail Bonds (ORI), Shariah Securities (SBSN). c. Storage, management and administration of securities in the international market registered at Euroclear as one international Depository institution. 2. Fund Services Transaction process services up to the net asset value calculation (balance sheet, profit / loss, portfolio reports) for Mutual Funds, Fund Management Contracts (KPD) and Unit Link. Services provided include Fund Accounting/ Fund Administration, monitoring, reporting and publication. 204 Beradaptasi dengan Cepat Menghadapi Perubahan  3. Trustee and Agency a. trustee Acting as a party representing the interests of debt securities, including: i. Compiling trusteeship contracts with issuers. ii. Monitoring issuers for fulfillment of their obligations. iii. Submitting reports and information disclosure. iv. Organizing Bondholders General Meeting (RUPO). b. Security Agent Administration of assets guaranteed by a party based on an agreed agreement. c. Paying Agent Processing payments in accordance with agreements for activities related to capital market transactions such as payment of coupons / interest, dividends, principal bonds or other debt securities and payment services for sale / purchase and others. d. Escrow Agent Managing, monitoring and controlling escrow accounts (special accounts) in accordance with agreements. Trustee Trust is a bank business in the form of care for the management of settlor’s property (owning parties who entrust their property to be managed by the Trustee / Bank) based on a written agreement between the Bank as Trustee with the Settlor for the benefit of the Beneficiary. Based on Otoritas Jasa Keuangan regulation (POJK) No.27/POJK.03/2015 concerning Bank Custody Management (Trust) as amended by POJK No. 25/POJK.03/2016, Trustees can act as: 1. Paying Agent 2. Investment Agent 3. Borrowing Agent Trustees not only serve corporate clients, individual customers, but now Trustee customers. Based on POJK No 25/ POJK.03/2016. This is a relaxation of the rules to support the tax Amnesty program. PT Bank Negara Indonesia (Persero) Tbk
  205. Analisis & Pembahasan Manajemen INTERNATIONAL SEGMENT STRATEGIES IN 2018 To make BNI a major player in the international trade and payment business for the banking industry in Indonesia, a number of strategies were followed during 2018. These strategies proved to be effective in boosting international business growth, especially trade finance income that grew by 25.9% (YoY ). Thanks to the support of the 6 (six) BNI OBO, in Singapore, Hong Kong, Tokyo, Seoul, London and New York and the 1 (one) Representative Office in Yangoon the OBO assets grew 28.8% (YoY) while OBO deposits grew 45.9% (YoY). INTERNATIONAL SEGMENT PRODUCTIVITY, PROSPECTS AND STRATEGIES The following relates to OBO productivity, prospects and strategies and Domestic International Banking Services. OVERSEAS BRANCH OFFICES (OBO) The Overseas Branch Office (KCLN) total assets for 2018 are shown as follows: Tabel Kinerja Asset KCLN Description Local Loan 2018 (Rp million) 39,918,309 Composition (%) 53.1% 2017 (Rp million) 30,734,174 Composition (%) Growth (%) 52.6% 29.9% Others Assets 35,317,273 46.9% 27,682,505 47.4% 27.6% Total Assets 75,235,582 100% 58,416,679 100% 28.8% KCLN’s total assets experienced a significant increase, with the total assets for all KCLN reaching Rp75.2 trillion, an increase of 28.8% compared to Rp58.4 trillion the previous year. This was mainly due to an increase in loan, trade finance and securities transactions. KCLN total loans in 2018 experienced a significant increase, with KCLN successfully booking loans amounting to Rp39.9 trillion, an increase of 29.9% compared to Rp30.7 trillion the previous year. The KCLN loans disbursed focused on Indonesia related business, especially for companies conducting export or import activities with Indonesia. OBO Third Party Fund Products OBO funds deposited in 2018 included local loan customers and OBO local trade. In addition, the optimizing the accounts of the Indonesian Embassy / Indonesian Consulate in each OBO country was also carried out. Tabel Jumlah Dana Pihak Ketiga KCLN Description Savings 2018 (Rp million) Composition (%) 2017 (Rp million) Composition (%) Growth (%) 629,243 12.1% 94,409 2.7% 566.5% Giro 3,049,350 58.7% 2,630,979 73.9% 15.9% Deposits 1,513,345 29.1% 833,078 23.4% 81.7% 5,191,938 100% 3,558,461 100% 45.9% Total During 2018, total OBO deposits amounted to Rp5.2 trillion. The main contribution came from the 4 (four) OBO holding full branch status that were able to carry out retail transactions, namely: Singapore, Tokyo, Hong Kong and Seoul. To continue to increase OBO deposits in 2019, increasing the number of local loan customers and OBO local trade will be the main strategy, in addition to increasing retail deposits. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 205
  206. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk OBO Services With a loan expansion strategy emphasizing local loans, and by exploring the business potential of Indonesian customers or companies that will and have expanded overseas, as well as optimizing business potential / transactions that generate KCLN fee-based income, the KCLN income in 2018 was as follows: Overseas Branch Offices Income 2018 Composition 2017 Composition Growth (Rp million) (%) (Rp million) (%) (%) Keterangan Net Interest Income 895,117 76.9% 879,585 77.9% 1.8% Recurring FBI 269,636 23.1% 249,641 22.1% 8.0% 1,164,753 100% 1,129,226 100% 3.1% Total Net interest income in 2018 amounted to Rp895.1 billion, an increase of 1.8% compared to Rp879.6 billion the previous year, mainly due to Loan Interest Income and Trade Finance. KCLN recurring fees increased by 8.0% to reach Rp269.6 billion trillion compared to Rp249.6 billion in 2017. The biggest growth in KCLN’s recurring fee came from remittance and trade services. This was supported by an increase in TKI remittances and corporate customer activities at the KCLN, and KCLN expansion activities both in services to business people in each country and trade refinancing transactions INTERNATIONAL BANKING SERVICES Domestic international banking income from trade finance, remittances, financial institutions, custody, trustee and the international desk in 2018 grew by 25.7% (YoY). Domestic International Banking Income Type of Income 2018 (Rp billion) Fee Based Income Interest Income Total 1,594 2017 Composition (%) 62.8% (Rp billion) 1,303 Growth (%) Composition (%) 64.5% 22.4% 943 37.2% 716 35.5% 31.8% 2,538 100% 2,018 100% 25.7% BNI’s trade finance services and products dominated the domestic international banking business income. The strategies followed to enable trade business income growth in 2018 to grow by 22% included the following: 1. Exploring potential SBLC / Demand Guarantee issuance transactions, especially from borrowers engaged in infrastructure. 2. Collaborating with Guarantee Companies to work on customers who do not have a non cash loan ceiling, especially for import transactions. 3. Improving the “close loop transactions” strategy by providing competitive pricing to increase the number of new customers. 4. Exploring the potential needs for trade transactions for suppliers of BUMN Karya and other potential customers. 5. Synergizing with business units to explore the potential for non-Cash Loan utilization that has not been optimized In addition, in 2018 the financial institution’s business also recorded encouraging growth. Correspondent banks, both in Indonesia and abroad, increasingly became more confident in channeling their business through BNI. This can be seen from the 26% increase in interbank transactions, and the 64% (YoY). increase in the number of transactions slips. With these increases, the financial institution transaction income increased by 64% (YoY). 206 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  207. Analisis & Pembahasan Manajemen The remittance business is also quite large, and contributes to the domestic international banking business income. During 2018, remittance income grew by 16%, supported by two main products, namely incoming and outgoing transfers. Incoming transfer transactions saw significant growth from Malaysia and other countries such as Taiwan and Qatar. In addition, in 2018 BNI Mobile Remittance (BNI More) products in Singapore were launched as a digital-based money transfer to Indonesia facility for Indonesian Migrant Workers (PMI) in Singapore. To improve the international banking business, correspondents’ trust of is an important asset for BNI. To maintain correspondent relationships, BNI actively communicates with correspondent banks as well as expands the scope of good transactions, by exploring the potential for new cooperation with BNI’s current correspondent banks, as well as by expanding relationships with banks that are not yet a BNI correspondent bank. TREASURY AND INTERNATIONAL SEGMENT INCOME AND PROFITABILITY The Treasury and International segment income and profitability is shown as follows: Treasury and International Segment Income and Profitability Description Interest income and Sharia income-net * Premium income -net Other operating income Allowance for impairment losses Other operating expenses Operational income Non-Operating (Expense)/Income-Net Income before tax expense 2018 2017 (Rp million) (Rp million) 2,086,897 Growth (Rp million) 1,860,111 (%) 226,786 12.2% - - - - 2,950,936 3,213,069 (262,133) (8.2%) (145,055) (73,992) (71,063) 96.0% (1,947,361) (2,035,563) 88,202 (4.3%) 2,945,417 2,963,625 (18,208) (0.6%) 2,697 (1,356) 4,053 (298.9%) 2,948,114 2,962,269 (14,155) (0.5%) Total assets 275,552,690 246,499,835 29,052,855 11.8% Total liabilities 103,149,183 74,321,428 28,827,755 38.8% *) termasuk komponen internal transfer pricing antar segmen operasi In 2018 Treasury and Financial Institutions Interest income and Sharia income-net amounted to Rp2.1 trillion, an increase of 12.2% compared to Rp1.9 trillion in 2017. Whereas the Treasury and Financial Institutions segment operating profit in 2018 amounted to Rp3.0 trillion, a decrease of 0.6% or Rp18.2 billion from the previous year. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 207
  208. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk SUBSIDIARIES In 2018 BNI Subsidiaries posted a positive performance with a total profit of Rp648 billion, a decrease of (10.36%) compared Rp723 billion in 2017, with a profit contribution of 4.29% of BNI’s profit. 208 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  209. Analisis & Pembahasan Manajemen The development of community and corporate needs for financial services is growing, both in quality and quantity, requiring banks to provide integrated financial services. With authority limitations, banks are unable to meet all of their stakeholders needs for financial services so there is a need to involve subsidiaries. As one of the major banks in Indonesia, the role of BNI and BNI’s Subsidiaries, as BNI Group, in the financial industry occupies a very strategic position. To this end, BNI continues to improve its synergy with the subsidiaries so as to provide comprehensive financial services under one umbrella to customers. Strategic alliances and synergies between the subsidiaries and the BNI parent company have been built to improve services, so as to contribute optimally to all BNI stakeholders. In accordance with the applicable banking industry regulations, BNI manages its subsidiaries through equity investments in subsidiaries engaged in the financial sector. By the end of 2018, BNI owned shares in 10 subsidiaries. The majority ownership in some of the subsidiaries is intended to establish a strategic alliance to deliver added value to BNI customers. While minority stakes are held for the purpose of complying with OJK and BI policies / regulations, as well as to establish business cooperation with BNI partners. The subsidiary companies where BNI acts as the majority shareholder are: PT Bank BNI Syariah (99.94%), PT BNI Life Insurance (60.0%), PT BNI Sekuritas (75.0%), PT BNI Multifinance (99, 9%) and BNI Remittance Ltd. (100.0%). While, the minority share ownerships are PT Sarana Bersama Pengembangan Indonesia (8.0%), PT Pemeringkat Efek Indonesia (0.14%), PT Kustodian Sentral Efek Indonesia (1.0%), PT Bank Mizuho Indonesia (1.0 %), and PT Sumitomo Mitsui Indonesia (0.5%). In 2018 BNI Subsidiaries posted a positive performance with a total profit of Rp648 billion, a decrease of 10.36% compared Rp723 billion in 2017, with a profit contribution of 4.29% of BNI’s profit. BNI Subsidiaries Profit Performance Name of Subsidiaries 2018 (billion Rp) 2017 (billion Rp) 2016 (billion Rp) 2015 (billion Rp) Growth 2017-2018 (%) BNI Syariah 416.06 306.69 277.37 228.5 35.66% BNI Life 177.16 377.80 183.95 160 (53.11%) BNI Sekuritas 22.06 10.60 12.34 38.9 108.11% BNI Multifinance 32.06 27.10 7.41 (12.3) 18.30% BNI Remittance Total 0.69 0.73 0.21 (0.5) (5.48%) 648.04 722.92 481.28 414.6 (10.36%) For 2019 BNI has several strategies for business development to improve financial performance, business growth, customer satisfaction, and the position of Subsidiaries against their peers group and the industry, including: • Increasing Subsidiaries asset growth through corporate actions • Increasing the BNI Group synergy • Digitizing the Subsidiaries products and services PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 209
  210. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk PT BANK BNI SYARIAH (BNI SYARIAH) DESCRIPTION, PRODUCTIVITY, INCOME, AND PROFITABILITY In 2018, BNI Syariah managed to record a positive performance by achieving net profit after tax of Rp416 billion, an increase of 35.66% from Rp307 billion in 2017, and reached 102.23% of the 2018 target of Rp406 billion. BNI Syariah total assets amounted to Rp41,040 billion, or 106.19% of the 2018 target of Rp38,648 billion. The asset achievements were driven by financing and deposits, which grew by 20.30% and 20.82% respectively. Financing in 2018 amounted to Rp28,386 billion, or 104.82% of the 2018 target, with the largest growth coming in commercial financing at 56.9%. Deposits in 2018 amounted to Rp35,496 billion or 107.07% of the 2018 target. BNI Syariah’s financial performance during 2018 is shown in the following table: PT Bank BNI Syariah Financial Performance 2018 Description Balance Sheet Category (Rp million) Investments Placements with BI Placements with other banks Growth (Rp million)   Assets (Rp million)   (%)     41,040,203 34,827,144 6,213,059 17.84% 12,327,502 10,617,970 1,709,532 16.10% 4,554,393 5,113,798 (559,404) (10.94%) 327,022 328,739 (1,716) (0.52%) 7,446,086 5,175,433 2,270,653 43.87% 28,386,197 23,596,718 4,789,479 20.30% 18,201,807 16,580,149 1,621,658 9.78% Qardh Receivables (Sharia credit cards) 1,564,282 1,479,877 84,405 5.70% Financing 8,274,741 5,475,003 2,799,738 51.14% 345,366 61,689 283,678 459.85% 35,496,519 29,379,291 6,117,228 20.82% 8,835,445 5,970,787 2,864,658 47.98% 26,661,074 23,408,505 3,252,570 13.89% 4,244,484 3,812,000 225,798 5.92% 3,836,743 3,384,295 452,448 13.37% Income from Fund Distribution 3,567,329 3,174,648 392,682 12.37% Murabahah Margin 2,212,338 2,090,204 122,134 5.84% Securities Financing Murabahah / Salam / Istishna Receivables (sale and purchase contract) Ijarah Third Party Funds Wadiah Deposits Funds Unrestricted Investing Funds (Mudharabah Muthlaqah) Equity Profit or Loss Category Operating income Ijarah Leases     12,244 57,054 (44,810) (78.54%) Mudharabah Profit Share 123,307 172,440 (49,133) (28.49%) Musyarakah Profit Share 498,757 336,154 162,603 48.37% 38,826 6,718 32,108 477.94% Other TPF Income 148,678 152,051 (3,373) -2.22% From Other Banks 533,179 360,027 173,152 48.09% From Bank Indonesia Other operating income Profit share for investors unrestricted From Third parties non bank From Bank Indonesia From Other Banks 210 2017 269,413 209,647 59,766 28.51% 1,007,841 967,942 39,900 4.12% 1,007,227 963,727 43,501 4.51% - - - 614 4,215 (3,601) (85.43%) Operating income after profit share distribution 2,828,901 2,416,353 412,548 17.07% Expenses (Inc.) allowance for uncollectible accounts 689,828 700,859 (11,031) (1.57%) Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  211. Analisis & Pembahasan Manajemen 2018 Description 2017 (Rp million) Expenses (Inc.) estimated losses on commitments and contingencies Other operational expenses Growth (Rp million) (Rp million) (%) (215) 415 (630) (151.84%) 1,572,949 1,319,906 253,043 19.17% Profit or loss operating 566,339 395,174 171,165 43.31% Profit or loss non operating (16,131) 13,573 (29,704) -218.85% Profit or loss before taxes 550,208 408,747 141,462 34.61% Taxes 134,151 102,061 32,089 31.44% Profit or loss after taxes 416,058 306,686 109,372 35.66% BNI Syariah ROA and ROE in 2018 amounted to 1.42% (up 0.37%) and 10.39% (down -1.03%), with the increase in ROA in line with profit growth, and the ROE declined due to an increase in equity from BNI’s additional capital deposits of Rp1 trillion at the end of December 2017. BOPO in 2018 amounting to 85.37%, a decrease of 2.25% from 87.62% in 2017. There was an increase in NPF of 0.04% from 2.89% in 2017 to 2.93% in 2018. BNI Syariah Financial Ratios Ratio 2018 2017 NPL 2.93% 2.89% ROE 10.39% 11.42% ROA 1.42% 1.05% BOPO 85.37% 87.62% FDR 79.61% 80.21% NIM 7.16% 7.58% CAR 19.15% 20.14% In recognition of its performance in 2018, BNI Syariah received awards from various institutions including: No. Name Rating Category Organizer Date 1 Public Relation Awards The Best Public Relation - Third (No 3 industry) Bank Syariah Marketing magazine January 2018 2 Top Digital Public Relation Award Top Digital Public Relation 2018 (No 1 diindustri) Syariah Banking Trasnco research January 2018 3 Internal Magazine Awards (InMA) Bronze The Best Internal Magazine 2018 (No 3 industry) Private Comp.internal magazine Press Council February 2018 4 Top Brand Award Top Brand (No 3 industry) Top Brand category Sharia bank saving accounts Marketing magazine February 2018 5 Indonesia Employee Engagement Index 2017 Highly Engaged Organization Banking Bisnis Indonesia March 2018 6 Karim Award Best Innovative Banking Karim Consulting April 2018 7 Public Relation Award Most popular in the Media -subsidiaries category Sharia General Bank PR Indonesia magazine April 2018 8 Digital Innovation Award Digital Applications (No.1 industry) Sharia General Bank Warta Ekonomi May 2018 9 Service Excellence Awards Best Performing Satpam (No.1 industry) Bank Umum Sharia InfoBank May 2018 10 Service Excellence Awards Best Performing Overall Minus E-Banking (No.4 industry) Sharia General Bank InfoBank May 2018 11 Service Excellence Awards Best Performing Customer Service (No.4 industry) Sharia General Bank InfoBank May 2018 12 Service Excellence Awards Best Performing Teller (No.5 industry) Sharia General Bank InfoBank May 2018 PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 211
  212. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk No. Name Rating Category Organizer Date 13 Service Excellence Awards Best Performing Telephone (No.3 industry) Sharia General Bank InfoBank May 2018 14 Service Excellence Awards Best Performing Physical Banking Hall (No.2 industry) Sharia General Bank InfoBank May 2018 15 Service Excellence Awards Best Performance Excellent Service (No.3 industry) Sharia General Bank InfoBank May 2018 16 Indonesia Digital Innovation Award Innovative Company in Digital Islamic Service and Applications (No.1 industry) Sharia Banking Warta Ekonomi May 2018 17 23th Infobank Award Best Sharia Bank Assets > Rp 25 Trillion Majalah Infobank August 2018 18 23th Infobank Award Best Sharia Bank (No.2 industry) Assets > Rp 25 Trillion Majalah Infobank August 2018 19 Sharia Investor Award Best Sharia Bank (No.1 industry) Assets > Rp 10 Trillion Majalah Investor August 2018 20 Bisnis Indonesia Financial Award The Most Innovative Sharia Products (No.1 industry) Banking Bisnis Indonesia August 2018 21 Indonesia Banking Award The Most Efficient Bank (No.1 industry) Assets > 10 Trillion Majalah Tempo September 2018 22 Indonesia Banking Award The Most Reliable Bank (No.2 industry) Assets > 10 Triliun Majalah Tempo September 2018 23 Alphasoutheast Asia Award The Best Commercial Bank In Indonesia (No.1 industry) Islamic Bank Alphasoutheast Asia September 2018 24 7th Infobank Sharia Awards The Best Sharia Bank core capital below Rp5 T (No.2 industry) Islamic bank Majalah Infobank September 2018 25 Digital Marketing Award The Best Website - Sharia Bank (No.2 industry) Islamic Bank Majalah Trans n Co September 2018 26 Indonesia Digital Popular Brand The Best KPR Sharia (No.2 industry) Islamic Bank Trans- co October 2018 WORK PLAN FOR 2019 To maintain the growth momentum, BNI Syariah has set the following 2019 business strategies 1. Business Strategy a. Fundraising Strategy by developing the halal ecosystem industry. b. Fund Distribution Strategy with the main focuses being the infrastructure sector and state-owned enterprises. 2. Functional Strategy a. Expanding Islamic banking service coverage to all corners of Indonesia with the priority of selling laku pandai products. b. Micro business transformation for increased productivity. c. Implementation of Data Centers to support IT capacity. d. Setting up transactional infrastructure for Mobile Banking and SMS Banking. e. Managing competency-based human capital. f. Optimizing Cooperation Technical Assistance between BNI and BNI Syariah. 3. Optimizing Synergies (including business and shared services synergy with BNI to BNI Syariah and other BNI Subsidiaries) a. Agency cooperation (Sharia Channeling Outlets/SCO), a synergy by utilizing the main BNI outlet network to provide sharia services. b. Supply/Value Chain Financing for BNI commercial customers. c. Hasanah Card product marketing through the BNI network. d. Hajj Fund Management (Transito) through collaboration of BNI Syariah and BNI by delegating Hajj funds from the BNI Transito branch account to BNI Syariah. e. Use of the Cash Management (BNI Direct) feature by BNI Syariah customers to increase fee-based and management income of BNI Syariah prime customers. f. Use of BNI e-channel facilities by BNI Syariah customers to increase fee-based income. g. Use of BNI remittance and trade finance systems by BNI Syariah customers to optimize international business. 212 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  213. Analisis & Pembahasan Manajemen PT BNI LIFE INSURANCE (BNI LIFE) DESCRIPTION, PRODUCTIVITY, INCOME, AND PROFITABILITY In 2018, BNI Life Insurance posted a net profit after tax of Rp177 billion, a decrease of (52.74%) from Rp375 billion in 2017, or 36.53% of the 2018 target of Rp485 billion. BNI Life total assets amounted to Rp17,283 billion, or 78.54% of the 2018 target of Rp22,006 billion. The decrease in profit to Rp487 billion from Rp1,282 billion in 2017 was mainly due to the (61.99%) decrease in Investment Income in 2018. BNI Life’s financial performance during 2018 is shown in the following table: PT BNI Life Insurance Financial Performance 2018 2017 2016 (Rp million) (Rp million) (Rp million) Description Pertumbuhan (Rp million) (%) Balance Sheet Category Assets 17,283,191 16,304,038 13,069,216 Productive Assets/Investing 14,998,442 14,566,378 11,304,931 432,064 2.97% Obligations 12,080,714 10,952,132 8,162,742 1,128,583 10.30% 5,202,477 5,351,907 4,906,474 (149,430) (2.79%) Total income 6,113,086 6,987,785 5,721,415 (874,699) (12.52%) Gross premium income 5,568,467 5,710,686 4,745,531 (142,219) (2.49%) Net Premium Income 5,510,161 5,577,321 4,635,149 (67,160) (1.20%) 487,255 1,281,910 982,169 (794,655) (61.99%) Non LINK 585,277 774,625 490,299 (189,348) (30.32%) LINK (98,022) 507,285 471,293 (490,263) (122.16%) Equity 979,153 6.01% Profit or Loss Category Investing income Other Income 115,670 128,555 104,097 (12,884) (10.02%) Total Expenses 5,942,440 6,619,399 5,549,709 (676,959) (10.23%) Insurances fee/ claim 4,285,560 5,085,680 4,227,698 (800,120) (15.73%) Acquisition costs 848,154 801,956 655,447 46,198 5.76% Business costs 744,003 669,296 611,074 74,707 11.16% 64,723 62,467 55,490 2,256 3.61% 170,647 368,387 171,706 (197,740) (53.68%) 6,517 6,517 12,244 0 0.00% 177,164 374,904 183,950 (197,740) (52.74%) Non Operational Expenses (income) PROFIT BEFORE TAXES TAXES NET PROFIT BNI Life’s ROA and ROE in 2018 amounted to 1.05% and 3.42% respectively and fell (0.93%) and (2.45%) in line with the decline in profit. BOPO amounted to 97.21%, an increase of 2.48% from 94.73% in 2017, due to the growth in expenses being greater than revenue growth due decreases investment income. BNI Life’s RBC in 2018 amounted to 735.93%, a decrease of 44.82% from 780.75% in 2017 in line with the company’s business growth. BNI Life Financial Ratios Financial Ratios 2018 2017 ROA 1.05% 1.98% ROE 3.42% 5.87% BOPO 97.21% 94.73% 3.25% 8.80% 735.90% 780.75% Total Investment/Investment RBC PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 213
  214. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk This performance was achieved by following the 2018 business strategies, with BNI Life’s focusing on obtaining Regular premium income from the Bancassurance distribution channel, especially in the In Branch units, health premiums from the Employee Benefits distribution channel, improving customer service, and launching new products tailored to the needs of the community. In response to the insurance industry development and to anticipate BNI Life’s business growth in 2018 and the years to come, in 2018 the Regional Branch Manager (RBM) In Branch function was introduced as the regional coordinator, as a BNI Life PIC, working together with BNI branch leaders in selling insurance products and services to BNI Life customers referenced by BNI. To offer more choices to customers, in 2018 BNI Life Insurance launched several product initiatives, including: Basic product BLPM, Pro Illness Care + BLPM, BLPM Pro Hospital and Surgical, Credit Life Insurance (Tenor Expansion) BNI Griya, Multi Credit Protection Insurance, BLife Fixed Protection, BNI Life Prochild, Smart Protection Plus, PA Protection Plus, Maxi Health Protection (Telemarketing), SiMUDA Saving Protection. In 2018 BNI Life again won a number of awards, more than the previous year, including the following: Tabel Penghargaan BNI Life Tahun 2018 No Name Rating Category Organizer Date 1 B-Life Link Dana Cemerlang 2018 Best Link Unit SOE and SOE Subsidiaries Shares 3 Year Period Berita Satu February 22, 2018 2 B-Life Link Dana Cemerlang 2018 Best Link Unit SOE and SOE Subsidiaries Shares 5 Year Period Berita Satu February 22, 2018 3 B-Life Link Dana Cemerlang 2018 Best Link Unit SOE and SOE Subsidiaries Shares 7 Year Period Berita Satu February 22, 2018 4 B-Life Link Dana Cemerlang 2018 Unit Link Terbaik SOE and SOE Subsidiaries Fixed Income 3 Year Period Berita Satu February 22, 2018 5 B-Life Link Dana Cemerlang 2018 Best Link Unit SOE and SOE Subsidiaries Fixed Income 5 Year Period Berita Satu February 22, 2018 6 Indonesia Sharia Finance Award 2018 Top 5 Customer Choice Sharia Business Unit in Life Insurance 2018 Warta Ekonomi April 30, 2018 7 Service Quality Award 2018 Excellent Total Service Quality Satisfaction Life and Health Insurance 8 Best Insurance Award 2018 Best Life Insurance 2018 Insurance with Assets between Rp 10 Trillion - Rp 25 Trillion Investor July 24, 2018 9 Insurance Award 2018 Insurance Rating "Very Good" Yearly Financial Performance for 2017 Infobank June 26, 2018 10 Best Insurance Award 2018 Best Syariah 2018 Syariah Life Insurance with Assets between Rp200 billion - Rp1 trillion Investor August 23, 2018 11 Financial Award Highly Committed Company Social Responsibility Bisnis Indonesia August 27, 2018 12 The Best Contact Center Indonesia 2018 The Best Contact Center Operations"Gold" Contact Center 13 Sharia Award 2018 Syariah Rating " Very Good " Yearly Financial Performance for 2017, Sharia Business Unit (UUS) Infobank September 26, 2018 14 Indonesia Insurance Consumer Choice Award 2018 Best Financial Performance Top 5 Best Consumer Choice Insurance Company, Between Assets Rp10-25 trillion Warta Ekonomi September 27, 2018 June 10, 2018 August 3, 2018 2019 WORK PLAN 1. Focusing on selling profitable products and increasing the number of policies. 2. Optimizing investment returns and performance in the Link Fund Units. 3. Optimizing captive markets. 4. Increasing the premium ratio. 5. Regional sales integration strategy. 6. Increasing sales quality and productivity. 7. Increasing the human capital productivity. 8. Improving business processes through digital. 9. Maintaining the effectiveness and efficiency of OPEX. 214 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  215. Analisis & Pembahasan Manajemen PT BNI SEKURITAS (BNI SEKURITAS) DESCRIPTION, PRODUCTIVITY, INCOME, AND PROFITABILITY At the end of 2018, BNI Sekuritas managed to record a net profit of Rp22 billion, an increase of 102.25% from Rp10.99 billion in 2017, reaching 28.2% of the Rp78.25 billion target, operating income in 2018 amounted to Rp253 billion an increase of 9.23% from to Rp232 billion in 2017. The main source of income came from investment management fees (through BNI Asset Management as a Subsidiary of BNI Sekuritas) with a contribution of Rp93 billion or 36.48% of the total operating income of BNI Sekuritas, brokerage commissions amounted to Rp80 billion or 31.72% and Investment Banking Fee amounted to Rp.42 billion or 16.68%. BNI Sekuritas total equity brokerage transaction in 2018 amounted to Rp59.5 trillion, a decrease of 0.84% from Rp58.9 trillion in 2017. The Online transactions reached Rp28.2 trillion against the total Regular transactions of Rp31.2 trillion. The number of active BNI Sekuritas customers in 2018 reached 66,995 customers, up 15% from 58,238 in 2017. In 2018, BNI Sekuritas won awards as “The Most Active Security Company” from KSEI on January 24, 2018, and as the Innovative Company in Digital Investment Services from Warta Ekonomi. BNI Sekuritas’ financial performance are shown in the following table: PT BNI Sekuritas Financial Performance 2018 Description 2017 (Rp million) Balance Sheet Category   Growth (Rp million)   (Rp million)   (%)   Assets 869,813 1,212,406 (342,594) (28.26%) Obligations 383,600 760,124 (376,524) (49.53%) Equity 486,213 452,282 33,931 7.50% 253,641 232,217 21,423 9.23% 80,453 79,023 1,430 1.81% Profit or Loss Category Revenue Brokerage commissions Investment management fees 92,536 111,531 (18,995) (17.03%) Brokerage Comm. From Fix Income Activities 18,583 10,538 8,045 76.35% Fees from Inves. Banking Activities 42,310 30,657 722 954 (232) (24.35%) Increase/(decrease) on net asset value of mutual funds Interest Revenue from Fund Separation and Bonds and Dividends Gain (Loss) on trading of marketable securities –net Margin and Overdue Revenue Other Operating expenses Other Revenue 8,422 4,521 3,902 86.31% (21,734) (45,985) 24,251 (52.74%) 28,960 38,300 (9,340) (24.39%) 3,389 2,679 221,097 210,303 10,794 5.13% 19,198 14,686 4,512 30.72% Interest and Other Financial Expenses (15,747) (15,311) (435) (2.84%) Total Revenue 272,839 246,904 25,935 10.50% Total Expenses 236,844 225,615 11,228 4.94% 35,995 21,498 14,497 67.44% (13,930) (10,588) (3,342) 31.57% 22,064 10,910 11,075 102.25% Profit / Loss before Tax Tax Profit / Loss after Tax BNI Sekuritas’ 2018 ROA was 3.56%, an increase of 1.99% from 1.57% in 2017, with the 2018 ROE reaching 4.72%, an increase of 2.70% from 2.02% in 2017 due to the increase in profit. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 215
  216. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk PT BNI MULTIFINANCE (BNI MULTIFINANCE) PT BNI Sekuritas Financial Ratios Financial Ratios ROA ROE BOPO 2018 2017 (%) (%) 3,56% 1,57% 4,72% 2,02% 87,17% 90,56% 2019 WORK PLAN For 2019, BNI Sekuritas will continue its strategy to achieve better performance with the following strategies. 1. Increasing synergy and collaboration with BNI Group. 2. Expanding its Equity business with a focus on institutional customers both domestic and foreign. 3. Expanding the Investment Banking business with a focus on SOE and Corporate clients. 4. Expanding the DCM’s business with a focus on synergy with BNI. 5. Increasing the implementation of GCG, risk awareness and sense of efficiency 6. Expanding the Online Trading business by increasing and developing application features. 216 Beradaptasi dengan Cepat Menghadapi Perubahan  DESCRIPTION, PRODUCTIVITY, INCOME, AND PROFITABILITY As of December 2018 BNI Multifinance posted a positive performance with a net profit of Rp32 billion, an increase of 21.06% from Rp26,480 billion in 2017, reaching 95.72% of the Rp33 billion 2018. Assets amounted to Rp1,322 billion, an increase of 45.36% from Rp907 billion in 2017, reaching 95.7% of the Rp1,382 billion 2018 target. Asset growth was driven by financing growth of 50.51% from Rp764 billion in 2017 to Rp1,151 billion in 2018 in line with the growth of liabilities (loans) of 61.98% from Rp610 billion in 2017 to Rp988 billion in 2018. Investment/lease financing grew by 98.74% making up 64.97% of the total financing portfolio. BNI Multifinance 2018 performance was focused on investment financing (commercial) in the form of commercial vehicles, heavy equipment for BNI referral customers, repeat orders for BNI Multifinance customers and financing of four-wheel vehicle ownership through the Car Ownership Program (COP) for those segments including government officials, employees corporations, as well as employees of the BNI Business Group, as well as 4-wheeled Vehicle Operating Leases for BNI and the Group. The company conducted consumer financing (multi products and BNIMF OTO) with a focus on BNI and BNI Group employees and also started financing factoring with a focus on selective flow risk customers to maintain a healthy portfolio. PT Bank Negara Indonesia (Persero) Tbk
  217. Analisis & Pembahasan Manajemen BNI Multifinance’s financial performance is shown as follows: BNI Multifinance Financial Performance Description 2018 2017 Growth (Rp million) (Rp million) (Rp million) (%) Balance Sheet Category Assets Deposits Financing 1.322.611 912,422 414.638 41.02% 234 42,734 (42.500) -99.45% 1.151.045 772,621 386.283 44.46% Leases 747.798 382,388 371.522 87.11% Consumer Financing 221.855 254,527 (32.298) -2.79% Factoring 181.329 135,706 47.059 12.91% CKPN Financing Obligations Equity (12.652) (3,854) (8.549) 204.74% 987.926 609,905 378.021 57.35% 334.686 302,517 32.358 8.10% Profit or Loss Category Operational Income 174.477 114,861 59.616 51.90% Leases 84.110 42,609 41.501 97.40% Leases Operations 28.631 30,481 (1.849) -6.07% Consumer Financing 37.714 17,794 19.921 111.95% Factoring 24.021 23,978 43 0.18% 2.875 1,793 874 60.40% Total Operational Income 177.352 116,654 60.431 52.03% Total Operational Expenses 137.808 82,218 55.506 67.61% 11.543 2,777 8.517 315.58% 138 2,093 (1.965) -93.41% Other Operational Income CKPN Expenses Other Income (Expenses) Profit before Tax 39.682 36,529 2.959 8.63% Tax (7.625) (9,473) 2.231 -19.51% Profit after Tax 32.057 27,056 5.190 18.49% PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 217
  218. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk BNI Multifinance’s 2018 ROA was 3.45%, a decrease of (0.98%) from 4.43% in 2017, while 2018 ROE reached 10.08%, an increase of 2.69% from 4.43% in 2017 due to profit growth. BOPO reached 77.63%, an increase of 5.44% from 72.19% in 2017. 2018 NPL reached 1.18%, an increase of 0.86% from 0.32% in 2017. 2018 DER reached 2.85, an increase of 0.83 from 2.02 in 2017 in line with the increase in loans as a source of funding for financing business expansion. BNI Multifinance Financial Ratios Financial Ratios 2018 NPL 2017 1.18% 0.32% ROA 3.45% 4.43% ROE 10.08% 7.39% (Operational expenses/Operational income) 77.63% 72.19% 2.85 2.02 (Debt Equity Ratio) (times) The BNI Multifinance improved performance received awards from various parties, including the following: No. Award Rating Category Event Date 1 Human Capital Award IV - 2018 Gold/ 6 - Large Multifinance Company Non Tbk Economic Review, Indonesia Human Capital Award May 2018 2 14 th Multifinance Awards 2018 Very Good Financial Performance for 2017 infobank July 2018 3 Indonesia Enterprise Risk Management AwardIII-2018 Rating -1/ GOLD Multifinance Company Non Tbk Economic Review, Indonesia August 2018 4 Best Multifinance Company 2018 Best in Indonesia 2018 Multifinance Company Assets 500B - 1 T (Anak Perusahaan BUMN) Economic Review, IPMI, Perbanas Institute September 2018 5 6 th Indonesia Multifinance Best Multifinance Award 2018 Company in Indonesia 2018 Multifinance Company Assets 500B - 1 T Economic Review, Indonesia October 2018 WORK PLAN 2019 In order to minimize risk in 2019, BNI Multifinance’s business focus is similar to the previous year, and includes: 1. Focusing on selective low risk customers. 2. Focusing on commercial financing (commercial vehicles, heavy equipment, etc.), BNI referral customers and BNI repeat multifinance customers. 3. Focusing on leading sectors such as manufacturing and infrastructure supporting industries. 4. Consumer financing to run with the target markets of BNI and COP Non-BNI (SOE and SOE Subsidiaries) as well as multipurpose products and OTO BNIMF for BNI Group employees. 5. Increasing fee-based income. 6. Enlarging the company’s assets through organic and unorganic financing growth by increasing multipurpose / consumer financing. 7. Pioneering Financing Digitization to accelerate the financing process. 218 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  219. Analisis & Pembahasan Manajemen BNI REMITTANCE LIMITED (BNI REMITTANCE) DESCRIPTION, PRODUCTIVITY, INCOME, AND PROFITABILITY BNI Remittance managed to record a positive performance and recorded a profit of Rp693 million, a decrease of 5.22% from Rp731 million in 2017. Total assets in 2018 amounted to Rp4.9 billion, a decrease of (46.01%) from Rp9.12 billion in 2017. Total remittance transactions during 2018 reached 212.7 thousand slips, an increase of 22.6% compared to 173.5 thousand slips the previous year. Conventional Teller transactions reached 77.8 thousand slips, while electronic transactions through BNI ATMs reached 134.9 thousand. The 2018 performance was achieved by increasing remittance services, one being through the cooperation between BNI and local Money Service Operators (MSO) with a wider outlet network, especially for BNI’s remittance services throughout Hong Kong. During 2018 there were collaborations with 2 (two) local MSOs, namely BEST Remittance with more than 40 (forty) effective outlets in July 2018, and Uniforex with more than 100 (one hundred) outlets in December 2018. During 2018, BNI Remittance organized marketing-based programs including: savings balance improvement program, ATM and Mobile Banking utilization, and customer get customer program, and BNI digital (E-Form) account opening applications. Through the KAMI program with BNI, BNI Remittance is also actively conducting capacity building for Indonesian Migrant Workers (PMI) in Hong Kong. The PMI’s enthusiasm for increased capacity, as well as widening networks among migrant workers, the banking sector and other related parties, can be seen in the number of participants present at the training held. The training was conducted in two stages, namely soft skills training in the form of entrepreneurial seminars and hard skills training in the form of skills practice classes. BNI Remittance’s financial performance is shown as follows: BNI Remittance Financial Performance Description 2018 2017 Growth (Rp million) (Rp million) (Rp million) (Rp million) Balance Sheet Category Total Assets 4,931 9,119 (4,187) (45.92%) Fixed Assets 410 858 (447) (52.15%) 3,615 4,861 (1,246) (25.63%) 906 3,400 (2,494) (73.36%) Total Obligations 1,048 3,816 (2,768) (72.53%) Current Liabilities 1,048 3,816 (2,768) (72.53%) Current Assets Other Assets Other Liabilities Total Equity - - - 3,883 5,303 (1,420) (26.77%) 11,614 10,133 1,481 14.62% 3,204 3,411 (207) (6.1%) Profit or Loss Category Income Commision Earned Exchange gain/Loss 3,079 2,264 815 36.0% Other Commission 5,332 4,458 874 19.6% Expenses 10,922 9,402 1,520 16.2% - Operational Expenses 10,922 9,402 1,520 16.2% 693 731 (38) 693 731 (38) Profit before Tax Tax Profit after Tax PT Bank Negara Indonesia (Persero) Tbk  (5.22%) (5.22%) Beradaptasi dengan Cepat Menghadapi Perubahan 219
  220. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk BNI Remittance’s ROA and ROE in 2018 amounted to 14.07% and 17.88%, respectively increasing by 6.05% and 4.09% from 8.02% and 13.79% in 2017. BOPO increased to 94.04% in 2018 from 92.79% in 2017. BNI Remittance Financial Ratios Rasio 2018 2017 (%) (%) ROA 14.07% 8.02% ROE 17.88% 13.79% BOPO 94.04% 92.79% 0.270 0.720 DER WORK PLAN 2019 In general, the company’s strategy in 2019 will remain in line with the previous year, focusing on programs that involve customers directly, including: 1. Customer Awareness Increasing synergy with parent companies and fellow subsidiaries to conduct above the line and below the line marketing programs that actively involve customers through communities in Hong Kong. 2. Customer Experience Collaborating with the parent company to enhance the experience of BNI customers in Hong Kong through programs that lead to digital banking, including: -- Optimizing the use of ATMs, especially for non-cash service features. -- Optimizing the use of Mobile Banking. -- Optimizing the use of E-Forms for opening BNI accounts. 3. Customer Loyalty Initiating programs to increase customer loyalty, especially focusing on sustainable capacity-based programs. MARKETING ASPECT MARKETING STRATEGY 2018 is the year for BNI’s inauguration as a Digital Financial Institution. In line with this spirit, BNI from the marketing side must be able to align corporate brand communications with products that will become champions in 2018, especially digital-based ones. To support this alignment in 2018 BNI uploaded a corporate brand communication with the Campaign Theme: Let ‘s Make a Digital Leap as BNI is Digital. This theme wants to provide an explanation or promises customers and the wider community that with/through BNI’s digital banking products, they can receive convenience, comfort, opportunities, and also improve the economy of the Indonesian people in general. Digital banking products that become champions in 2018 were not only corporate banking products but also included BNI’s retail banking and non-banking products delivered by BNI Subsidiaries. This integration is expected to increase BNI’s perception as a digital financial institution. In terms of marketing, for digital banking products, customer experience became a reality through the theme outlined in the corporate campaign strategy. The message is that BNI through digital banking products and services develops in such a way that it will provide the best life experience. BNI believes that a good customer experience not only meets the needs but also satisfies the wants of its users. To explain BNI’s changes from conventional banking to digital financial institutions, BNI introduced the theme of ‘Change’ with the intention of inviting Indonesian customers and communities to meet digital disruption and assess it as an opportunity to accelerate the achievement of a better life. This message is consistently seen in the campaign message boards, and BNI instills it in its corporate brand communication. In the hope that the Indonesian people will change their attitude/ways to banking and transactions towards digital. For example in festival promos, made with the aim of participating in celebrating with all customers and the public on any national or religious day with BNI digital product promos. This is hoped will increase the awareness mentioned above as well as help increase usage as BNI is always present at special customer moments. 220 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  221. Analisis & Pembahasan Manajemen Likewise, BNI’s way of delivering messages, has now intensified through the use of digital media such as BNI Online and Social Media. Followers in December 2018 amounted to 1,184,748 in Twitter @BNI, 152,365 in Instagram @ bni46, and 330,044 in Facebook BNI. Information relates to promotions (period, coverage area and other provisions) for each BNI product such as Savings, Griya, KUR, BNI Credit Card, BNI Debit Card, promos on the use of electric banking, and the promotion of subsidiaries that can be accessed by the public through BNI’s promotional micro sites, including bnidigideal.com. However, to maintain BNI’s reach, it also retains some conventional media such as, Above The Line, Below The Line, Out of Home. CAMPAIGN REALIZATION PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 221
  222. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk To realize BNI’s change to become a Digital Financial Insitution and BNI Digital, a moment of truth came at the beginning of 2018 with the YAP product launch which was a pioneer of QR payment using three source of funds (electronic money, debit cards and credit cards). With these three source of funds, digitizing payments made by BNI became unique, ‘without top up’, where many similar products only have one source of funds. This is in accordance with the spirit of BNI wanting to improve customer experience. YAP’s customer experience has been implemented in every Iconic Event. One being Java Jazz, where for the 14th (fourteen) time, BNI again participated as one of the main supporters of this international-scale jazz event. It started at the BNI Java Jazz Festival 2018 pre-event, namely Java Jazz on The Move x Yap Fest. Differently to previous years, Java Jazz on The Move in 2018 was held outside the BNI office so that the public could participate in the event. BNI Java Jazz on The Move 2018 successfully became the biggest pre-event of the Java Jazz Festival and acquired many new YAP users!, and contributed to the BNI is Digital campaign that it is always relevant to millennials. In addition, at the 2018 Java Jazz music event, YAP! was introduced throughout for Java Jazz transactions, ranging from food trucks, food courts to merchandise purchases. YAP! complemented the use of the TapCash card which has been used as the main payment transaction tool at the event. In 2018, BNI again became a bank partner in the Inacraft event, mainly participating in providing financial transaction services during the event, such as the use of YAP !, TapCash, and Electronic Data Capture (EDC) machines for all Inacraft tenants. Providing these services is a realization of the message of change, namely changing customer transaction habits from cash to cashless. Aside from being a payment tool, visitors were also brought into the digital customer journey where visitors could use YAP! and TapCash as an Inacraft entrance ticket at a special price. The presence of BNI Digital Branch services also facilitated visitors and customers to try BNI’s digital account opening services. 222 Beradaptasi dengan Cepat Menghadapi Perubahan  Other BNI products that were present to strengthen BNI’s branding during Inacraft 2018 included BNI’s People’s Business Credit (KUR) for financing MSMEs, BNI Taplus and various types of promotions for using Credit Cards and BNI Debit Cards. BNI also supported the opening of BNI Taplus accounts with the National Payment Gate Card (GPN), with BNI’s EDC already able to receive GPN Cards. To manifest the digital spirit that provides more benefits, are more efficient, easier and can be reached by all BNI customers, in 2018, were changes brought by BNI to the Travel Fair. In previous years, BNI’s support for travel fair activities was always conducted offline, but this year BNI collaborated with Garuda Indonesia to hold an Online Travel Fair (GOTF 2018). At GOTF, BNI customers and the general public could see various domestic and international ticket offers through digital channels (websites and applications) and could enjoy special promos provided through e-commerce transactions using BNI Debit Cards, BNI Credit Cards and of course yap! The customer journey and customer digital experience could also be seen in the BNI Digimudik 2018 program where registration was online. This year, customers could register online to get a seat quota directly from their mobile phone through the official BNI site or BNI Digimudik micro site. In addition, participants could validate their departures by making transactions using applications in all Jabodetabek Area BNI Branch Offices. This program is BNI’s way to maximize its acquisition program in an effort to increase deposits and also is part of BNI’s concern to help the government overcome transportation problems. In accordance with the targets set by the Ministry of SOEs, as well as being part of the 72nd BNI Anniversary, BNI helped 7,500 travelers with executive AC buses, trains and planes. Besides being a loyalty program for BNI customers, in the BNI DigiMudik 2018 program, BNI also provided free homecoming facilities for santri and pesantren employees. Digital itself is certainly closely related to millennials, so BNI also participates in supporting events with a target audience of millennialls such as the 90’s festivals or art performances held by high schools or on campus. These include Cravier, which is held by one of the secondary schools, where all of the sales and entry transactions use BNI’s digital products, TapCash and YAP !. Likewise with the Jazz Goes To Campus event and other concerts attended by BNI as sponsors. PT Bank Negara Indonesia (Persero) Tbk
  223. Analisis & Pembahasan Manajemen Besides participating in sports activities such as; ITB Marathon, UI Marathon, Plataran X-Trail and support for the BNI Taplus volley team in Proliga, to digitize sports, BNI also supported the BNI Virtual Run 2018. In this event, running activities are generally carried out in a limited area, but now they are conducted jointly through digital platforms such as mobile applications, where the participants involved can run for a specified period. The BNI high light product in this activity is YAP! which became the media for registering the race. The highlight of BNI’s support for national and even international sports was its participation in the 2018 Asian Games. In the biggest event in Asia, BNI appeared as the only “Official Prestige Digital Banking Partner”. BNI support included digital transactions through online and cashless ticket sales for events using Debit Cards, Credit Cards, TapCash and YAP! and also through BNI EDC in all aspects of sales during the 2018 Asian Games, as well as provided money changer services that were not only limited to the 2018 Asian Games venue. BNI also supported athletes and officials to the Asian Games by issuing VA Debit Cards to channel pocket money and as a transaction tool for foreign athletes so they could still enjoy transactions during their stay in Indonesia. BNI’s support for the cashless society is a manifestation of BNI’s Digital transformation. In addition to facilitating banking transactions during the 2018 Asian Games, BNI also contributed through philanthropic programs for athletes who have been instrumental in making Indonesia famous on the world sports scene. Athletes such as Ellyas Pical, Djunaedi Abdillah, Yustedjo Tarik, Tati Soemirah and Lely Sampoerna were featured on special edition TapCash cards, which were sold in the Indonesian Sport Legend edition of the card as a form of BNI respect and appreciation. In addition to targeting the mass segment, BNI also continues to pay attention to the affluent segment and supported the 2018 Indonesian Masters at the end of 2018. BNI’s participation in international golf tournaments is in line with its mission of advancing Indonesian sports and providing opportunities for young Indonesian golfers to play internationally. In line with the Emerald customer products and services which are currently being addressed to the ‘young mass affluent’ Emerald BNI customers, the digital spirit remained relevant to the ‘young mass affluent’ in this event. PT Bank Negara Indonesia (Persero) Tbk  ACHIEVEMENT During 2018 BNI received various awards including the following: 1. Top Brand 2018 Banking and Finance categories: a. Junior Savings - BNI Taplus Anak b. Tabungan Berjangka - BNI Tapenas 2. 2. BUMN Marketeers Awards 2018: a. Bronze Winner - Promising Company in Strategic Marketing b. Silver Winner - Promising Company in Branding Campaign 3. 3. Indonesia Banking Awards (IBA) 2018: a. Most Reliable Bank b. Best Bank in Digital Services c. Diversity of the Board OPERATIONAL DISCIPLINE TO IMPROVE PRODUCTIVITY STRATEGIC FOCUS TO IMPROVE PRODUCTIVITY Still based on the vision of forming a highly skilled, knowledgeable, and positive attitude in BNI sales, during 2018 BNI continuously built and instilled the habits and character of a strong Sales Culture. The pattern of sales activities conducted were accompanied by monitoring on a daily basis the discipline of operationalization, which is a pattern of sales execution which is summarized in the Sales Activity & Performance Management (SAPM) application, with the aim of reaching a predetermined number of targets. All of these matters create operational rhythms that have an impact on BNI achieving its strategy and business growth. The focus strategy is also conducted through Key Performance Indicators (KPI) with a strategy focus, and in 2018 the KPI referred to efforts to achieve product sales targets with large yield margins. Using the strategy focus pattern, saw an increase in the achievement per sales in 2018, as the types of products receiving special attention in relation to their profitability saw a large yield margin, which grew 15.4% compared to 2017, as the following tables and graphs show: Beradaptasi dengan Cepat Menghadapi Perubahan 223
  224. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk BNI Fleksi Average Booking Subject BNI Fleksi Average booking achievement per sales per month 2018 (Rp million) 2017 (Rp million) 2016 (Rp million) 732,9 635,2 563,9 BNI Fleksi Average Booking Rp732.9 Rp635.2 Rp635.2 2016 2018 2017 Other focus strategies were also followed for the main products, resulting in an increase in the achievement per sales in 2018 compared to 2017, which grew by 22.0%, as the following tables and graphs show: BNI Griya Average Booking Subject BNI Griya Average Sales Booking per Month 2018 (Rp million) 2017 (Rp million) 2016 (Rp million) 1,471.2 1,206.0 934.8 BNI Griya Average Booking Rp1,471.2 Rp1,206.0 Rp934.8 2016 224 2017 Beradaptasi dengan Cepat Menghadapi Perubahan  2018 MARKETING STRATEGIES FOR PRODUCTIVITY IMPROVEMENT 1. Sales Productivity Improvement Strategy a. Optimizing sales management through the application of Sales Activity & Performance Management (SAPM) b. Coaching and Mentoring and periodic knowledge transfer to Sales and Supervisor Sales. c. Giving potential Leads and monitoring, both for funding and lending d. Sales Motivation Program for both acquisition and retention 2. Savings Improvement Strategies a. Increasing savings expansion by managing business banking customers from the business value chain and ecosystem b. Expanding BNI’s savings expansion through Millennial acquisition c. Expanding and Acquiring BNI Savings through entrepreneurial and employee segments. 3. BNI Fleksi Booking improvement strategy a. Improving BNI Fleksi bookings through databases of existing Selected Partners payroll, especially Business Banking customers with their value chain and business ecosystem. b. Increasing Fleksi bookings with a Business to Business (B2B) mechanism to COEs and Ministries c. Acquiring BNI Fleksi through Digital Channels d. Acquiring BNI Fleksi by maximizing potential customers from the Pre and Full Retirement BNI Pension Fund (BFP) 4. BNI Griya Booking Improvement Strategy a. Improving BNI Griya bookings through Primary Market, including Business Banking customers with the value chain and business ecosystem. b. Improving BNI Griya bookings through Secondary Markets c. Maximizing BNI Griya distribution Leads through the application of Sales Activity and Performance Management (SAPM) d. Expanding BNI Griya bookings by supporting the Government Programs through the Housing Financing Liquidity Facility (FLPP) 5. Credit Card improvement strategy a. Enhancing Credit Cards in Business Banking with the value chain and business ecosystem. b. Increasing Credit Cards through the Millennial segment c. Acquiring Credit Cards through Canvasing and Event Exhibitions d. Acquiring Credit Cards by maximizing BNI Staff Capacity e. Optimizing Data for Upselling to Existing Card Holders f. Expanding Credit Card acquisitions through the Partner Websites PT Bank Negara Indonesia (Persero) Tbk
  225. Analisis & Pembahasan Manajemen 2019 WORK PLAN The 2018 operational rhythm became a pattern of work that will be further enhanced and optimized in 2019, by adjusting to the things that became lessons learned and developments that occurred in the previous period. One of the adjustments based on business development will be an effort to move sales to an orientation towards transactional-related strategies, including optimizing BNI’s digital-based transactional banking features, together with a strategy design basis that is both intensified and extensified by referring to providing comprehensive financial solutions through a value chain, close loop transaction and formation business ecosystem. MARKET SHARE Market share analysis is classified based on total assets, third party funds that have been collected, and the amount of loans disbursed by the Bank. Market Share Description Total Assets Industry (Billion Rp) BNI (Billion Rp) Total Third Party Funds 2017 8,068 2016 7,388 6,730 809 709 603 Market Share 10.0% 9.6% 9.0% Industry (Billion Rp) 5,630 5,289 4,837 579 516 436 BNI (Billion Rp) Total Loans Disbursed 2018 Market Share 10.3% 9.8% 9.0% Industry (Billion Rp) 5,358 4,782 4,413 BNI (Billion Rp) Market Share 513 441 393 9.6% 9.2% 8.9% Comparison of Financial Ratios with Commercial Bank Industry Average CAR (%) BOPO (%) Industry 23.0% 23.2% 22.9% BNI 18.5% 19.3% 19.4% Industry 77.9% 78.6% 82.2% BNI 70.1% 70.5% 73.6% 2.6% 2.5% 2.2% ROA (%) Industry 2.8% 2.8% 2.7% LDR (%) Industry 94.8% 90.0% 90.7% BNI 88.8% 90.0% 90.4% BNI Sources: Indonesia Banking statistics Per December 2018 PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 225
  226. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Grafik Pangsa Pasar BNI Dibandingkan Industri 2018 Total Assets 10.3% Total Third Party Funds 10.4% Total Assets 9.6% 2017 Total Third Party Funds 9.8% 90.4% 226 9.8% 89.6% 89.7% Total Loans Disbursed 90.2% Total Loans Disbursed 9.2% 90.2% 90.8% MARKET SHARE BASED ON ASSETS During the last three years from 2016 to 2018, BNI has succeeded in placing its position as one of the important players in the Indonesian banking world. One of the indicators for the continued increase in BNI’s market share based on assets that reached 10.0% in 2018 compared to 9.0% and 9,6% in 2016 and 2017. The increase was due to BNI’s success in collecting public funds and managing them as the company’s financial assets. MARKET SHARE BASED ON LOANS DISBURSED Unlike the double-digit market share of assets and third party funds, BNI’s market share based on loans reached 9,6%. This achievement in 2018 is still better than 2017 and 2016, which were recorded at 9.2% and 8.9% respectively. This is one of BNI’s continuing growth strategies, together with better quality to maintain business continuity in the future. MARKET SHARE BASED ON THIRD PARTY FUNDS Amid the weakening Indonesian third party fund market due to external macroeconomic conditions, BNI proved its consistency to survive and continued to increase third party funds so that it could compete with its competitors in national banking. This was evidenced by the BNI’s increasing market share of third party funds that reached 10,3% in 2018 compared to 9.8% and 9.0% in 2017 and 2016. FINANCIAL RATIOS COMPAIRED TO THE AVERAGE IN THE COMMERCIAL BANKING INDUSTRY The Capital adequacy (CAR) in 2018 reached 18.5%, a decline compared to 2017 and still lower than the industry. Operating expenses per operating income (BOPO) decreased in 2018 by 70.1% compared to 2017 and are still lower than the industry. Return on assets (ROA) was relatively stable at 2.8% in 2018 and higher than industry. In addition, the liquidity level (LDR) decreased by 88.8% in 2018 and is still lower than the industry. Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  227. Analisis & Pembahasan Manajemen 2019 BUSINESS PROSPECTS Global and National Perspectives In 2019, many world institutions agreed that the global economy would be supported by the US and developing countries such as India, ASEAN-5 (especially Indonesia and the Philippines), Brazil and Mexico21. Externally, there is the potential for an FFR increase in 2019 if the American economy continues to grow in accordance with their expectations and if the American inflation reached its target of 2% Many parties believe the Fed will again raise the FFR a maximum of 2 times, or at a minimum once. In addition, the ending of Quantitative Easing (QE) in both Europe and Japan will have an impact by creating a lack of foreign funds entering the Indonesian financial market compared to the previous year. The US and China trade wars will also continue to cause a impact. Any negative impact could cause a decline in the performance of Indonesian exports to China and the United States, which are 2 (two) of its main export destination countries. The potential for factory relocations from China to Indonesia to avoid the tariff war could have a positive impact on the Indonesian economy. The European plans to ban the use of Crude Palm Oil (CPO) biofuel starting in 203022. In addition, India is raising Indonesia’s CPO import duty tariff from 30% to 44%23. The ban on the Indonesian palm oil exports to Europe, and the imposition of tariffs by India, need to be anticipated so as not to harm Indonesia. China’s economic growth, which according to the IMF will slow down to 6.2% in 2019, will also affect Indonesia as China is the Indonesian export main market. Export demand from Indonesia is expected to decline, creating the potential for widening trade balance deficit. Given the problematic global economic growth, the main source of economic growth comes from within the country. In Indonesia, the Government will continue to focus on encouraging public purchasing power through various subsidy programs, with both energy and non-energy subsidies. The Government is also committed to providing social protection and improving the welfare of low-income PT Bank Negara Indonesia (Persero) Tbk  residents through the Program Indonesia Pintar (PIP), Program Keluarga Harapan (PKH), Bantuan Sosial (Bansos) Pangan, Bidikmisi (Cost of Education for Poor Students), Penerima Bantuan Iuran (PBI) for National Health Insurance (JKN) and Ultra Micro Credit24. The government will continue to develop the infrastructure with a breakthrough in creative financing involving the role of state-owned enterprises, and the private sector, through Government Cooperation with Private Companies (PPP) through the availability payment (AP) scheme. There will be 2,007 kilometers of road construction / reconstruction / widening, 4 (four) new airports, 162 thousand hectares of new irrigation systems, 27,607 meters of bridge construction and improvements, 415 km of construction / completion of railway tracks, and 48 dams25. In addition, the Government will continue its KUR interest subsidy worth Rp12 trillion with a KUR distribution target of Rp120 trillion and a 7% interest rate intended for financing the MSME productive sector and TKI26. Fertilizer subsidies using the Tani Card will reach Rp29.5 trillion to support food security towards national food self-sufficiency27. The housing interest subsidy from the Government will reach Rp3.5 trillion for housing loans for Low-Income Communities (MBR) for 100 thousand housing units28. To encourage the Indonesian economy, the Government is targeting a new source of economic growth, namely the Tourism sector. Tourism will be a Government mainstay as it creates foreign exchange quickly together with the large tourism potential in Indonesia. According to the Financial Services Authority (OJK), businesses related to the tourism sector include Star Hotels; Budget Hotels; Other Accommodation Services; Drinks and Food Outlets; Restaurants; Rail Transportation; Non-Passenger Road Transportation; Rivers and Lakes Transportation; Travel Services; Tourism Facilities in Tourism Areas; Libraries, Archives, Museums and Other Cultural attractions29. In 2018, the number of foreign tourists visiting Indonesia was 18 million, an increase from 14 million in 2017, and 12 million in 201630. Beradaptasi dengan Cepat Menghadapi Perubahan 227
  228. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Events happening in 2019 that will affect the Indonesian economy include; 1. Simultaneous Legislative and Presidential Elections, instead of the previous alternate election system. For the first time, Indonesia will hold joint elections on April 17, 2019. Political temperatures are expected to rise ahead of voting. Unlike other countries, generally the elections do not have a negative impact on the economy. However, until the election winners are announced, many parties, especially investors and entrepreneurs, will be waiting before making business decisions. Loan growth in the first quarter - 2019 will be restrained but is expected to increase again after the Legislative Elections (Pileg) and Presidential Elections (Pilpres). 2. In 2019 the 3 (three) year holding period limit for repatriated funds from the tax amnesty conducted by the Government in 2016 will end. This is in accordance with Law No. 11/2016 concerning the Tax Amnesty. To date, these funds had to be placed in investment instruments with a time limit of 3 (three) years within the NKRI financial system. After that, the tax amnesty participants will again have the right for these assets to remain invested in Indonesia or taken back abroad. If there are no attractive investment instruments in the country, there is the potential for the funds to go abroad, if for example they give higher returns. If this happens, there will be an impact on Indonesia’s financial sector and economy. 3. Domestic liquidity conditions are predicted to be tighter due to several reasons. Firstly, higher loan growth compared to deposit growth, reflected in the high loan to deposit ratio (LDR). Based on regulation No. 17/11/PBI/2015, the LDR’s lower limit is set at 78% and the upper limit at 92%. Secondly, the government is increasingly active in issuing retail bonds that can be purchased by individuals so that there is the potential for switching from bank deposits (both deposits and savings) to retail bonds. Currently, the Governmentowned retail bonds consist of Retail Government Bonds (ORI), Retail Sukuk (SR) and Savings Sukuk (ST). The number of Government Securities (SBN) issued in 2019 will reach Rp60 trillion. To facilitate the public, the Government will issue these SBN online with a first come first served system. If liquidity is tightened, there will be competition for deposits between banks. This will affect funds growth in 2019. 4. In line with the Macroprudential Intermediation Ratio (MIR), BI continues to encourage bank lending while expanding funding and financing sources through the issuance of securities. These financing alternatives are a challenge for banks in carrying out the intermediary function. The issued bonds low cost will encourage companies to choose financing through bonds. The national bank lending growth will become a problem if it does not grow as in 2018, which up to December 2018 had grown by 11.97%31. PInternational Monetary Fund World Economy Outlook, Oktober 2018 CNBC Indonesia: Eropa Melarang Biofuel 2030, 18 Juni 2018 23 Market.bisnis.com: India Kembali Kerek Pajak Impor CPO Menjadi 44%, 5 Maret 2018 24 Ibid 25 Ibid 26 Ibid 27 Ibid 28 Ibid 29 Ibid 30 Biro Pusat Statistik 31 OJK 21 22 Macro and Micro Assumptions No Assumption Projected Year 2019 2020 2021 MACRO ASSUMPTION 1 Economy Growth (%) 5.2 – 5.4 5.2 – 5.4 5.3 – 5.5 2 Inflation (%) 3.0 – 4.5 3.0 – 4.0 3.0 – 4.0 14,800 –15,200 14,800 –15,200 14,800 –15,200 5.5 – 6.5 5.5 – 7.0 5.5 – 7.0 10.0 – 12.0 10.0 – 12.0 10.0 – 12.0 8.0 – 10.0 8.0 – 10.0 8.0 – 10.0 3 Rupiah Exchange / US Dollar (Rp) 4 BI 7 Days Repo Rate MICRO ASSUMPTION 228 1 Credit Growth (%) 2 Third Party Fund Growth (%) Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  229. Analisis & Pembahasan Manajemen BNI BUSINESS PROSPECTS BNI’s business prospects are influenced by internal and external factors. In terms of internal factors, BNI’s ability to mobilize and allocate resources and maintain and develop its core capabilities is an important factor in anticipating and taking business opportunities from existing external conditions. External factors that influence BNI are political, economic, social, technological, environmental and regulatory conditions. In general, political conditions are quite conducive to the business world and BNI is always ready to anticipate the dynamics that exist. Social conditions also support development with the existence of demographic maps that show that there is sufficient force for the young generation to be developed and it is estimated that there will be no horizontal and vertical turmoil that significantly disrupts the activation of the real sector. In terms of technology, internet penetration and widespread use of devices have caused changes in customer preferences to meet their needs which has resulted in the disruption of business models in various industrial sectors. In terms of the environment and regulations, efforts to minimize environmental, social and governance risks must be done more transparently through the regulation for sustainable financial implementation in the financial services industry and issuers. The condition of the world economy will have a significant effect on Indonesia’s economy and growth through its trading partners, and transactions will be reflected in Indonesia’s trade balance and balance of payments. The condition of the world economic growth in the short-term is not expected to be much different from the short-term economic period of the previous period (2018). This will be accompanied by several uncertainties in the form of trade competition dynamics between countries, political dynamics between countries, and the implementation of benchmark interest rate policies in developed countries, in addition to the economic growth dynamics in Indonesia’s main trading partners themselves. Although these external conditions will greatly affect BNI in carrying out its functions and achieving its performance targets, the business world offers many excellent growth opportunities in the coming years for companies that are able to adapt to the environment and are agile enough to exploit these opportunities. BNI’s adaptability and agility capabilities have been proven in historical data in recent years. In recent years during moderate economic growth and the financial industry conditions, BNI has been able to grow higher than the industry, as shown in the following table: PT Bank Negara Indonesia (Persero) Tbk  Loan Growth Loan Growth 2018 2017 2016 2015 BNI 15.9% 12.0% 20.9% 17.4% Banking 12.9% 8.2% 7.9% 10.4% From the quarterly structure of Indonesia’s economic growth in 2017-2018, the largest contribution to growth, apart from the Industrial Trade Sector, was from the Processing Industry Sector, Agriculture (including Forestry and Fisheries), Construction, Transportation and Warehousing, and Communication Information with an average growth contribution each of 20%, 13%, 10.5%, 5.5%, and 3.8% respectively. The economic structure is an opportunity for BNI to develop its business, supported by its digital capabilities. BNI’s financing focus will be adjusted to the potential GDP as reflected in the 2018 realization. The largest funding in the BNI Corporate Segment was given to the Manufacturing, Agriculture and Business Services Industry Sectors with a composition of 26%, 15% and 13%. The Business Services Industry Sector was the third highest-growth Industrial Sector after the Information and Communication Industry Sector and the Transportation and Warehousing Industry Sector. During the same period, the BNI Middle Segment provided the largest financing to the Industry, Trade, Manufacturing and Transportation and Warehousing Sectors with a portfolio composition of 31%, 26% and 10% respectively. BNI Small Segment largest financing was in Trade, Manufacturing and Agriculture with a composition of 57%, 11% and 10%. In an effort to always be relevant in the era of technological change, including our efforts to be a pioneer in the use of information technology, and in accordance with changes in customer preferences due to internet penetration and devices, BNI has and will continue to make significant investments in the development of its technology. Information technology applications will be felt by customers, both individuals and business entities or other institutions when using BNI financial services, and are expected to increase engagement with BNI so that they can provide added value not only for BNI but also its customers in the long term. Information technology applications developed include digitizing business processes that will have an impact on improving quality, service speed, process transparency, system interoperability. In addition to process digitalization, platform development and transaction applications that enable interaction between customers both Business to Business (B to B), Business to Customer (B to C), and Customer to Customer (C to C) will be developed so as to increase user experience in every customer trip to BNI. Development of features and applications like Yap! or the cash management system will continue to be carried out appropriately to meet customer needs by optimizing the capabilities of data analytics. Beradaptasi dengan Cepat Menghadapi Perubahan 229
  230. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Support for government programs will continue to be carried out not only because BNI is one of the national agents of development, but also the government program and the whole community as the perpetrators can become BNI’s business potential. Support for cross-sectoral government development strategies such as infrastructure development, tourism, transportation, or agriculture will continue. The business contribution from this will be quite significant for BNI both for financing distribution and for raising funds and fee-based income. Other government programs such as People’s Business Credit, Financial Inclusion, Laku Pandai, and social assistance will improve the quality of economic growth more quickly and sustainably which will ultimately increase BNI’s business as a whole. LONG-TERM STRATEGY 2019-2023 To achieve BNI’s vision of becoming a “Financial Institution that is Superior in Service and Performance”, BNI has prepared a 2019-2023 Corporate Plan with BNI’s aspiration in 2023 “To Become One of the Most Profitable Financial Institutions in Indonesia”. This aspiration will be achieved through the BEYOND Traditional Financial Services strategy, namely: B, “Business Community’s Financial Institution of Choice” Optimizing capabilities to be the business community’s choice. E, “Ecosystem Orchestrator” Orchestrating potential business ecosystems. Y, “Your Preferred Personal Financial Partner” Optimizing services and consumer business solutions to become the main bank for customer transactions O, “Organizationally Ready for The Future” Improving organizational capabilities and human resources to capture new business opportunities. N, “National Agent of Development” Optimizing government programs as a basis for growth. D, “Digital and Data Driven Institution” Optimizing business development that is driven by digital and data analytics. 230 Beradaptasi dengan Cepat Menghadapi Perubahan  2019 BUSINESS DEVELOPMENT STRATEGY After taking into account the world and domestic economic conditions, technological developments in the digital era, changes in customer preferences, policies from the authorities (monetary, banking, and fiscal), and internal business process improvement plans, in 2019, in line with the long-term Corporate Plan 2019-2023, BNI will focus on strengthening core business with digital capabilities. Indicators for this policy include company value for investors, profitability size, investment rate of return, digital transactions, superior service, employee engagement, digital capabilities, and synergy between units and subsidiaries. The business growth will of course take into account good corporate governance, banking prudential principles, regulatory constraints, and the shareholders’ aspirations. In terms of regulatory constraints, BNI intends to follow the regulation directions, including keeping its NPL ratio far below 5% with its Capital Adequacy Ratio (CAR) above the provisions based on the risk profile where BNI is located. Based on shareholder aspirations, BNI financial targets will be better than the previous year‘s achievements and / or higher than the industry average. The financial targets include profitability, market share for both loans and third party funds, and achievement of programs mandated by the government to BNI. In addition, the share value is targeted to be better than in 2019. To achieve these targets, BNI’s strategy in 2019 as outlined in the 2019 BNI Management Policy includes: • Improving the corporate business by providing integrated financial solutions in a business ecosystem. • Increasing mid-sized business productivity focused on corporate customer supply chains, business process improvements, and credit quality improvements. • Increasing small business expansion by digitizing business processes and improving credit quality and supporting national economic equality. • Accelerating consumer business by focusing on customer preferences using data analytics. • Increasing CASA and FBI by increasing digital transactions, strategic partnerships and developing new business models. • Increasing the BNI Group capabilities through increasing synergy, agile organization initiatives, and big data and analytics. PT Bank Negara Indonesia (Persero) Tbk
  231. Analisis & Pembahasan Manajemen PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 231
  232. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk FINANCIAL REVIEW The financial review outlined herein refers to the Financial Statements for the years ended 2018 and 2017 as presented in this Annual Report. The Financial Statements have been audited by the Public Accounting Firm Purwanto, Sungkoro and Surja (Member of Ernst and Young Global) and received a reasonable opinion, in all material respects, the consolidated financial position of PT Bank Negara Indonesia Tbk and its subsidiaries, as of December 31, 2017, as well as the consolidated financial and cash flows for the year then ended, were prepared in accordance with the Indonesian Financial Accounting Standards. 232 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  233. Analisis & Pembahasan Manajemen CONSOLIDATED STATEMENT OF FINANCIAL POSITION Consolidated Statement of Financial Position Description 2018 2017 2016 Growth 2017-2018 (Billion Rp) (Billion Rp) (Billion Rp) (Billion Rp) (%) ASSETS Cash 14,044 11,578 11,168 Current Accounts with Bank Indonesia 35,591 32,701 30,147 2,891 8.8 Current Accounts with other banks - net 13,134 21,335 6,298 (8,201) (38.4) Placements with other banks and Bank Indonesia - net 39,324 28,593 33,662 10,732 37.5 Marketable securities - net 32,044 36,050 23,765 (4,006) (11.1) Securities purchased under agreements to resell 2,466 21.3 - 679 1,665 (679) (100.0) Bills and other receivables - net 24,587 15,701 8,932 8,886 56.6 Acceptances receivables - net 20,295 18,106 14,724 2,189 12.1 179.1 Derivatives receivables - net 605 217 250 388 Loans 512,778 441,314 393,275 71,465 16.2 Allowance for impairment losses on loans disbursed (14,892) (14,524) (16,681) (368) 2.5 86,791 79,849 63,006 6,942 8.7 Government bonds Prepaid taxes 1,624 623 620 1,002 160.9 Prepaid expenses 2,337 2,318 2,411 19 0.8 604 713 57 (110) (15.3) 14.6 14.6 Equity investments - net Other Assets - net 11,900 10,381 6,429 1,519 Fixed Assets - net 26,127 22,805 21,972 3,322 Deferred tax Assets - net 1,676 891 1,332 785 88.2 808,572 709,330 603,032 99,242 14.0 4,160 4,868 3,276 (707) (14.5) 578,775 516,098 435,545 62,677 12.1 Deposits from other banks* 14,233 12,177 10,801 2,056 16.9 Borrowings 52,025 44,722 32,388 7,302 16.3 322 114 411 208 182.9 21,524 2,390 3,765 19,134 800.6 4,417 4,507 4,359 (91) (2.0) 876 971 1,047 (95) (9.8) 498.2 TOTAL ASSETS LIABILITIES,TEMPORARY SYIRKAH FUNDS AND EQUITY LIABILITIES Obligations due immediately Deposits from customers* Derivatives payable Securities sold under agreements to repurchase Acceptances payable Accrued expenses Taxes payable Employee benefits Provisions Other liabilities Securities issued* Subordinated Securities TOTAL LIABILITIES PT Bank Negara Indonesia (Persero) Tbk  481 80 151 401 3,512 4,094 3,503 (582) (14.2) 178 192 156 (15) (7.7) 14,608 14,731 11,149 (122) (0.8) 2,987 3,482 3,482 (495) (14.2) 100 - - 100 - 698,198 608,427 513,778 89,771 14.8 Beradaptasi dengan Cepat Menghadapi Perubahan 233
  234. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Description Deposits from customers Deposits from other banks 2018 2017 2016 (Billion Rp) (Billion Rp) (Billion Rp) Non-controlling interest Total equity attributable to owner of the parent entity (Billion Rp) (%) 26,603 23,350 20,092 3,253 358 494 489 (136) (27.5) Mudharabah Sukuk issued TOTAL TEMPORARY SYIRKAH FUNDS Growth 2017-2018 13.9 - 496 496 (496) (100.0) 26,961 24,340 21,077 2,621 10.8 2,297 2,311 2,097 (14) (0.6) 9,485 9.6 108,077 98,592 87,157 TOTAL EQUITY 110,374 100,903 89,254 9,470 9.4 TOTAL LIABILITIES, TEMPORARY SYIRKAH FUNDS AND EQUITY 808,572 709,330 603,032 99,242 14.0 * included funds syirkah temporar Customer Loan Disbursements and Savings Growth 90.41% 578,775 512,779 516,098 435,545 441,314 88.80% 393,275 85.58% 2016 Simpanan Nasabah 2017 Pinjaman yang diberikan 2018 LDR (Bank Saja) ASSETS In 2018, economic observers and Bank Indonesia projected Indonesia’s economic growth throughout 2018 to be in a range of 5.17% with an inflation rate based on Bank Indonesia’s target of 3.5% where the inflation rate in November 2018 was 3.23% ( yoy). The Indonesian economic structure is still dominated by three main business fields, namely agriculture, forestry/fisheries, and trade. Until the second quarter of 2018, the processing industry had the highest growth of 0.91%, followed by the trade sector at 0.69%, and construction at 0.57%. The increasingly depressed Rupiah against the US Dollar in mid-2018 continued until the end of the year and caused a migration of foreign capital from the Indonesian financial system, with the transaction balance deficit continuing to grow marked by a deficit in the export-import balance that dominated the Indonesian economy throughout 2018. This condition is not inseparable from external factors such as the Fed Fund Rate (FFR) and the American and China trade wars. 234 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  235. Analisis & Pembahasan Manajemen In the midst of external pressure, Indonesia’s economic situation did not change significantly in 2018. BNI’s enthusiasm to continue to grow in the midst of heavy external pressure has been tested again, raising BNI’s awareness that the health level of growth itself is the most important thing in order to continue to survive in the increasingly competitive banking business. BNI continued to maintain this throughout 2018 when considering the business growth of the bank itself, one way by being more selective in choosing the right industrial sector. The era of disruptive economy, which began in 2017, was again a highlight in 2018, and BNI was required to adapt well in terms of technology and service innovation. In 2018, BNI managed to maintain its asset growth in the prospective sectors, reflected by the increase in total assets to Rp99.2 trillion. With the loans disbursed as the bank’s main business contributing 63.4% of total assets in 2018. BNI’s loans grew by 16.2%, higher than last year’s 12.2%. The increase in growth was due to BNI aggressively expanding it’s lending by staying selective, especially regarding asset quality and paying attention to prudential banking principles. The growth was mainly in loans to SOEs which grew by 31.6% and private corporate loans which grew 12.9%, with the largest contribution to the manufacturing industry, restaurant and hotel trade, and business services. Assets 2018 2017 2016 Growth 2017-2018 (Billion Rp) (Billion Rp) (Billion Rp) Description (Billion Rp) 11,578 11,168 Current Accounts with Bank Indonesia 35,591 32,701 30,147 2,891 8.8 2,554 8.5 (8,201) (38.4) 15,039 238.7 10,731 37.5 (5,069) (15.1) (3,997) (11.0) 12,503 52.4 (679) (100.0) (986) (59.2) 56.6 6,867 0.6 21,338 6,300 Placements with other banks and Bank Indonesia 39,325 28,593 33,662 Marketable securities 32,362 36,359 23,856 Securities purchased under agreements to resell 410 (%) 14,044 13,137 21.3 (Billion Rp) Cash Current Accounts with other Banks 2,466 (%) Growth 2016-2017 3.7 - 679 1,665 Bills and other receivables 24,745 15,799 15,701 8,946 Acceptances receivables 20,475 18,271 14,809 2,204 12.0 3,462 23.4 606 217 250 388 179.1 (33) (13.2) Derivatives receivables Loans 512,778 441,314 393,275 71,465 16.2 48,038 12.2 Allowance for impairment losses - Loans (14,892) (14,524) (16,681) (368) 2.5 2,157 12.9 Government bonds 86,791 79,849 63,006 6,942 8.7 16,843 26.7 Equity investments 785 786 57 (1) (0.1) 729 1.274.6 Fixed assets -net 26,127 22,805 21,972 3,322 14.6 832 3.8 Prepaid taxes 1,624 623 620 1,002 160.9 2 0.4 Prepaid expenses 2,337 2,318 2,411 19 0.8 (92) (3.8) Deferred tax assets -net 1,676 891 1,332 785 88.2 (441) (33.1) 11,900 10,381 10,381 1,519 14.6 3,952 - (840) (648) (209) (193) 29.8 (439) 209.9 808,572 709,330 603,032 99,241 14.0 106,298 17.6 Other assets - net CKPN TOTAL ASSETS PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 235
  236. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk CASH AND CURRENT ACCOUNTS WITH BANK INDONESIA Cash and current accounts with Bank Indonesia increased 12.1% from Rp44.3 trillion in 2017 to Rp49.6 trillion in 2018. Current accounts with Bank Indonesia increased by 8.8% when compared to 2017, in line with BNI’s obligation to maintain a Minimum Reserve Requirement (GWM) to meet the central bank’s minimum reserve requirement. BNI is required to have a Statutory Reserves (GWM) in Rupiah for its activities as a public and sharia bank, as well as a GWM in foreign currencies for its activities in foreign currencies. As of December 31, 2017 and 2018, the bank’s MMR was in accordance with PBI No. 20/3/PBI/2018 concerning Statutory Reserves in Rupiah and Foreign Exchange for Conventional Commercial Banks, Islamic Commercial Banks, and Sharia Business Units. Primary GWM is a minimum deposit that must be maintained by a bank in the form of a giro account with Bank Indonesia. Secondary GWM and macroprudential liquidity buffer (MLB) are minimum reserves that must be maintained by banks in the form of SBI, Government Securities (SUN), State Sharia Securities (SBSN), and excess reserves which are excess Rupiah bank account balances from Primary GWM, GWM LFR and Macroprudential Intermediation Ratio (MIR). GWM LFR and RIM are the minimum savings required to be maintained by the Bank in the form of a giro accounts at Bank Indonesia, if the LFR Bank is below Bank Indonesia’s LFR and RIM target (80%), or above BI’s maximum LFR and RIM (92%), and the Bank’s Minimum Capital Adequacy Ratio (KPMM) is less than 14% of BI’s KPMM Credit Incentive. CURRENT ACCOUNTS WITH OTHER BANKS Current accounts with other Banks in 2018 decreased by 38.4% from Rp21.3 trillion in 2017 to Rp13.1 trillion in 2018. This decline was the result of one of BNI’s asset management strategies related to placements in financial assets with potential greater yield such as loans, securities, and government bonds. PLACEMENTS WITH OTHER BANKS AND BANK INDONESIA Placements with other banks and Bank Indonesia increased by 37.5% from Rp28.6 trillion in 2017 to Rp39.3 trillion in 2018, due to BNI’s strategy for managing financial assets and liquidity. MARKETABLE SECURITIES Securities are one of the financial instruments owned by BNI as an alternative to channeling funds other than loans. BNI’s marketable securities investment portfolio decreased in 2018 by 11.0% to Rp32.4 trillion from Rp36.4 trillion in 2017, partly due to the maturity of Bank Indonesia Certificate of Deposit product in 2018. There were two types of securities portfolios that decreased significantly in 2018, namely the Bank Indonesia Deposit Certificate (SDBI) which decreased from Rp11.5 trillion in 2017 to Rp2.0 trillion in 2018 or 82.8%, and Subordinated Bonds which decreased by 34.2% to Rp1.5 trillion in 2018. In addition to these two securities portfolios, there were other securities portfolios that increased in 2018, namely Mutual Funds, Bank Indonesia Securities (SBI), and other Bonds which increased by 47.1%, 36.3 %, and 14.7% compared to 2017. Minimum Reserve Requirements (MSR) 2018 236 2017 2016 GWM - RUPIAH 6.53% 6.57% 6.77% GWM - VALAS 8.01% 8.01% 8.01% Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  237. Analisis & Pembahasan Manajemen Marketable Securities 2018 Description (Billion Rp 2017 (%) (Billion Rp Growth 2017-2018 2016 (%) (Billion Rp (Billion Rp (%) Fair value through profit or loss 7,249 100.0 8,430 100.0 4,719 100.0 -Mutual funds 4,053 55.9 3,981 47.2 2,430 51.5 -Other bonds 2,106 29.1 2,487 29.5 780 16.5 (%) 1,180 (14.0) 3,711 78.6 72 1.8 1,551 63.8 (381) (15.3) 1,708 219.0 (57.9) 441 38.0 55 15.2 11 3.1 100.0 (3,037) (11.3) 9,726 56.9 1,096 6.4 (1,997) 36.3) 10,435 952.4 674 9.3 1,600 19.0 1,159 24.6 -Other debt securities 416 5.7 361 4.3 350 7.4 23,768 100.0 26,806 100.0 17,080 1,983 8.3 11,531 43.0 -SDBI (Billion Rp (%) (926) -Subordinated bonds Available for sale Growth 2016-2017 -SBI 7,505 31.6 5,508 20.5 10,530 61.7 1,997 (5,022) (47.7) -Mutual funds 4,920 20.7 2,119 7.9 889 5.2 2,801 132.2 1,230 138.3 -Other bonds 8,209 34.5 6,555 24.5 3,901 22.8 1,654 25.2 2,654 68.0 137 19.4 42 6.3 (79) (20.5) 387 - -Subordinated bonds 843 3.5 706 2.6 664 3.9 -Other debt securities 308 1.3 387 1.4 - 0.0 Held to maturity 1,345 100.0 1,124 100.0 2,057 100.0 221 197.7 (934) (45.4) Other bonds 1,345 100.0 1,124 100.0 2,057 100.0 221 197.7 (934) (45.4) 32,362 1.0 36,359 1.0 23,856 1.0 (3,997) (11.0) 12,503 52.4 (9) 2.9 (218) 239.3 (4,006) (11.1) 12,285 51.7 Sub Total Allowance for impairment losses. Total (318) (309) (91) 32,044 36,050 23,765 Marketable Securities by Issuer 2018 2017 Growth 2017-2018 2016 Description (Billion Rp Corporations Banks Bank Indonesia Total Allowance for impairment losses Nett (%) (Billion Rp (%) (Billion Rp (%) (Billion Rp Growth 2016-2017 (%) (Billion Rp (%) 16,284 50.3 13,718 37.7 8,952 37.5 2,566 18.7 4,766 53.2 6,590 20.4 5,602 15.4 3,279 13.7 987 17.6 2,324 70.9 9,489 29.3 17,039 46.9 11,626 48.7 (7,550) (44.3) 5,414 46.6 32,362 100.0 36,359 100.0 23,856 100.0 (3,997) (11.0) 12,503 52.4 (318) (309) (91) (9) 2.9 (218) 239.3 32,044 36,050 23,765 (4,006) (11.1) 12,285 51.7 PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 237
  238. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL (REVERSE REPO) Securities transactions purchased with agreements to resell are securities purchase transactions with an agreement to resell the securities purchased at a predetermined time and price. The reverse repo transactions carried out in 2017 amounting to Rp679 billion fell due in 2018, where during 2018 BNI did not conduct any new reverse repo transactions. LOANS DISBURSED The Indonesian economy in 2018 provided several lessons that can be the basis for strengthening synergies in maintaining resilience and boosting economic growth in 2019. Competitiveness and productivity should be improved to encourage growth momentum to a higher level. Indonesia must be able to move from dependence on primary commodity exports to manufacturing, and increase its domestic production capabilities to reduce imports. Infrastructure development is expected to improve connectivity and be directed to promoting regional economic and industrial development. In the context of the manufacturing sector development, BNI, as a state-owned bank, again played an important role in strengthening the government’s strategy that subsequently resulted in an increase in loans to SOEs by 31.6% and loans disbursed to private corporations growing 12.9%, mainly in the manufacturing industry, restaurant and hotel trade, business services and construction. This increase then resulted in an increase in the bank’s main business composition from 62.2% in 2017 to 63.4% in 2018 Loan Composition byType of Debtor 2018 Description Corporate (Billion Rp) 2017 (Billion Rp) % (Billion Rp) % (Billion Rp) % Growth 2016-2017 (Billion Rp) % % 222,910 43.5 188,026 42.6 174,073 44.3 34,884 18.6 13,953 8.0 Medium Commercial 74,731 14.6 70,261 15.9 61,330 15.6 4,470 6.4 8,932 14.6 Small 66,063 12.9 56,477 12.8 50,684 12.9 9,586 17.0 5,793 11.4 11.6 6,376 9.8 29.5 9,497 44.7 Consumer 79,735 15.5 71,445 16.2 65,069 16.5 8,290 International 39,918 7.8 30,734 7.0 21,237 5.4 9,055 Subsidiaries 29,550 5.8 24,369 5.5 20,882 5.3 5,181 21.3 3,487 16.7 Total Loans 512,778 100.0 441,314 100.0 393,275 100.0 71,465 16.2 48,038 12.2 LOANS DISBURSED COMPOSITION The loans disbursed portfolio structure in 2018 was still dominated by the corporate segment at 43.5%, followed by the consumer and medium commercial segments at 15.5% and 14.6% respectively, the small segment at 12.9%, and foreign branches at 7.8%. On a consolidated basis, subsidiaries contributed 5.8% of total loans. The most aggressive growth was in lending to the corporate segment, which rose Rp34.9 trillion or 18.6% from Rp188.0 trillion in 2017 to Rp222.9 trillion in 2018. The small segment also recorded quite aggressive growth increasing Rp9.6 trillion to Rp66.1 trillion in 2018. In addition, the consumer segment lending, as one of the drivers of growth, increased 11.6% or Rp8.3 trillion. Loans disbursed by the BNI’s subsidiaries also grew steadily by 21.3% from Rp24.4 trillion in 2017 to Rp29.6 trillion in 2018. 238 Growth 2017-2018 2016 Beradaptasi dengan Cepat Menghadapi Perubahan  The medium-sized commercial segment recorded growth of 6.4% or Rp.4.5 trillion compared to 2017. This growth was not as aggressive as in 2017, where the medium-sized commercial segment grew 14.6% or Rp8.9 trillion compared to 2016. The 2018 growth followed one of BNI’s strategies to be more selective in lending to this segment given the still large risk. During 2018, there were several commercial segment borrowers who increased their business exposure making them eligible to be managed by the corporate segment. PT Bank Negara Indonesia (Persero) Tbk
  239. Analisis & Pembahasan Manajemen Overseas Branches Loans Disbursed 2018 (Billion Rp) Overseas Branch 2017 (Billion Rp) Growth 2017-2018 2016 (Billion Rp) (Billion Rp) Growth 2016-2017 % (Billion Rp) BNI New York 7,971 6,489 4,268 1,482 22.8 BNI London 6,297 4,148 3,779 2,149 51.8 369 9.8 BNI Tokyo 6,603 3,919 2,708 2,684 68.5 1,211 44.7 BNI Hongkong 7,527 7,032 5,352 495 7.0 1,680 31.3 BNI Singapura 9,108 7,946 4,590 1,161 14.6 3,356 73.1 BNI Seoul Total 2,221 % 52.0 2,285 1,200 540 1,084 90.3 660 122.2 39,789 30,734 21,237 9,055 29.5 9,497 44.7 Overseas Branches Loans Disbursed - Rp Billion 7,971 6,489 6,603 6,297 4,268 4,148 3,919 3,779 2,708 2016 2017 2018 BNI New York 2016 2017 2018 2016 BNI London 2017 2018 BNI Tokyo 9,108 7,527 7,946 7,032 5,352 4,590 2,285 1,200 540 - 2016 2017 2018 BNI Hongkong PT Bank Negara Indonesia (Persero) Tbk  2016 2017 2018 BNI Singapura 2016 2017 2018 BNI Seoul Beradaptasi dengan Cepat Menghadapi Perubahan 239
  240. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Tabel Komposisi Pinjaman berdasarkan Segmen dan Mata Uang 2018 Description (Billion Rp) 2017 (Billion Rp) % Growth 2017-2018 2016 (Billion Rp) % (Billion Rp) % Growth 2016-2017 (Billion Rp) % % Corporate 222,910 43.5 188,026 42.6 174,073 44.3 34,887 18.6 13,953 8.0 Rupiah 181,449 81.4 154,555 82.2 141,044 81.0 26,898 17.4 13,511 9.6 Foreign Currency 41,461 18.6 33,471 17.8 33,029 19.0 7,990 23.9 442 1.3 Medium 74,731 14.6 70,261 15.9 61,330 15.6 4,470 6.4 8,932 14.6 Rupiah 72,292 96.7 67,983 96.8 59,932 96.1 4,310 6.3 9,050 15.4 2,439 3.3 2,279 3.2 2,397 3.9 160 7.0 (119) (4.9) 66,063 12.9 56,477 12.8 50,684 12.9 9,586 17.0 5,793 11.4 17.0 5,791 11.5 Foreign Currency Small Rupiah Foreign Currency 65,937 99.8 56,360 99.8 50,568 99.8 9,578 126 0.2 117 0.2 116 0.2 9 7.5 1 1.0 Consumer 79,735 15.5 71,445 16.2 65,069 16.5 8,290 11.6 6,376 9.8 Rupiah 79,719 100.0 71,380 99.9 65,038 100.0 8,339 11.7 6,342 9.8 16 0.0 65 0.1 31 0.0 (49) (75.4) 34 109.4 39,918 7.8 30,734 7.0 21,237 5.4 9,055 29.5 9,497 44.7 Foreign Currency International Rupiah - 0.0 - 0.0 - 0.0 - - - 0.0 Foreign Currency 39,918 100.0 30,734 100.0 21,237 100.0 9,055 29.9 9,497 44.7 Subsidiaries 29,550 5.8 24,369 5.5 20,882 5.3 5,181 21.3 3,487 16.7 Rupiah 29,367 99.4 24,214 99.4 20,582 98.6 5,153 21.3 3,633 17.7 183 0.6 155 0.6 301 1.4 28 17.9 (146) (48.4) Total Loans 512,778 100.0 441,314 100.0 393,275 100.0 71,465 16.2 48,039 12.2 Total Rupiah 428,765 83.0 374,492 84.9 336,164 85.5 54,273 14.5 38,328 11.4 84,013 16.4 66,822 15.1 57,111 14.5 17,191 25.9 9,711 17.0 Foreign Currency Total Foreign Currency LOANS DISBURSED QUALITY-BANK ONLY Gross NPL ratio in 2018 stood at 1.9%, an improvement compared to 2.3% in 2017. Net NPL stood at 0.8% in 2018, compared to 0.7% in 2017. This result was due to BNI’s strategy to be selective in its expansion in low risk sectors, and as a major player in the region. In addition, BNI also restructured and remedied troubled borrowers who still have the potential for financial and operational improvements. In order to anticipate fluctuating macroeconomic conditions, BNI mitigated the loans disbursed risk by increasing reserves higher than the previous year, which was reflected in the coverage ratio of 152.9% in 2018 compared to 2017 at 148.0%. The collectability of BNI’s loan portfolio is shown in the following table: Loans based on Collectibility Description 2018 (Billion Rp) 2017 (Billion Rp) 2016 (Billion Rp) Growth 2017-2018 (Billion Rp) Current Special Mention 414,371 396,623 20,248 16,845 12,008 3,404 % (Billion Rp) % 0.2 44,748 12.1 0.2 4,837 40.3 Substandard 2,028 1,271 1,594 757 0.6 (323) (20.3) Doubtful 3,009 1,592 839 1,417 0.9 753 89.8 Bad 5,001 7,234 9,212 (2,233) (0.3) (1,978) (21.5) 512,778 441,413 393,275 71,465 0.2 48,039 12.2 Total 240 482,492 68,120 Growth 2016-2017 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  241. Analisis & Pembahasan Manajemen Loans based on Economic Sector 2018 2017 Growth 2017-2018 2016 Description (Billion Rp) (Billion Rp) % (Billion Rp) % (Billion Rp) % Manufacturing 98,034 19.1 82,744 18.7 73,090 18.6 Trade, Restaurant and Hotel 89,751 17.5 76,391 17.3 61,581 15.7 Trade Services 52,575 10.3 42,309 9.6 38,600 9.8 Transportation and Communications 31,351 6.1 25,986 5.9 22,205 5.6 Agriculture 49,185 9.6 46,888 10.6 43,128 11.0 Growth 2016-2017 (Billion Rp) % % 15,289 0.2 9,654 0.1 13,360 0.2 14,810 0.2 10,266 0.2 3,709 0.1 5,365 0.2 3,781 0.2 2,297 0.0 3,760 0.1 Mining 18,301 3.6 11,949 2.7 14,184 3.6 6,352 0.5 (2,236) (0.2) Electricity Gas and Water 24,179 4.7 26,767 6.1 27,006 6.9 (2,587) (0.1) (239) (0.0) Construction 34,474 6.7 27,499 6.2 20,079 5.1 6,975 0.3 7,420 0.4 Social Services 16,033 3.1 12,149 2.8 11,246 2.9 3,884 0.3 903 0.1 Others 98,896 19.3 88,633 20.1 82,156 20.9 10,263 0.1 6,477 0.1 512,778 100.0 441,314 100.0 393,276 100.0 71,465 0.2 48,038 0.1 Total Loans LOANS DISBURSED COLLECTIBILITY LEVEL - BANK ONLY Nominal NPLs recorded a decline from Rp9.4 trillion in 2017 to Rp9.2 trillion in 2018 or a decrease of 2.4%. This shows BNI’s commitment to maintaining the quality of loans disbursed amid aggressive expansion. Loans in the NPL category are dominated by customers in the industrial, trade, restaurant and hotel and mining sectors. The fluctuating economic conditions in 2018 resulted in a number of the borrowers in these sectors becoming NPL. NPL Per Segment (Bank Only) NPL by Segment [%, Rp B] 11,042 9,415 9,228 3.6 3.2 3,0 2.8 2.7 2.8 2.5 2.7 Medium, 2.6 2.3 1.9 Consumer, 2.1 Total NPL, 1,9 Corporate, 1.7 Small, 1,6 2016 PT Bank Negara Indonesia (Persero) Tbk  2017 2018 Beradaptasi dengan Cepat Menghadapi Perubahan 241
  242. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk LOAN WRITE-OFFS AND RECOVERIES - BANK ONLY For borrowers with no potential, both business and operational, BNI has written-off loan assets amounting to Rp7.4 trillion during 2018, lower than the Rp.8.7 trillion in 2017. In its execution, BNI prioritizes bankrupt borrowers and those with legal problems, where maximum efforts have been exhausted. Compared to the total loans disbursed - bank alone, the written-off loan ratio is relatively low at around 1.5%. Whereas the recovery of loans amounted to Rp2.7 trillion with a recovery rate in 2018 of 35.7%, an improvement form 25.4% in 2017. Write Off and Recovery (Bank Only) Write off & Recovery (Bank Only) 8,730 49.7% 35.7% 25.4% 7.447 Keterangan 3,012 2.657 2,220 Hapus Buku Recovery 1,497 Recovery to Write Off Ratio 2016 2018 2017 GOVERNMENT BONDS Government bonds are again an attractive financial instrument with a lower level of risk compared to other similar financial instruments. BNI’s government bonds increased by Rp6.9 trillion or 8.7% to Rp86.8 trillion in 2018 compared to Rp79.8 trillion in 2017. In terms of interest rate composition, government bonds with fixed interest rates still dominate BNI’s portfolio with Government Bond market prices ranging from 76.01% to 122.15% and between 96.70% to 136.51%, as of December 31, 2018 and 2017. As for floating rate bonds, the market price of Government Bonds ranges from 99.55% to 99.87% and between 99.84% to 99.95% as of December 31, 2018 and 2017. Government Bonds 2018 Description (Billion Rp) % Growth 2017-2018 2016 (Billion Rp) % (Billion Rp) % Fair value through profit or loss 3,350 3.9 2,936 3.7 706 1.1 414 Available for sale 60,283 69.4 56,237 70.4 43,660 69.3 Held to maturity 23,158 26.7 20,676 25.9 18,640 29.6 Total 86,791 100.0 79,849 100.0 63,006 Fixed interest rate 80,805 93.1 73,803 92.4 5,961 6.9 6,046 7.6 86,791 100.0 79,849 100.0 Floating Interest Rate Total 242 (Billion Rp) 2017 Beradaptasi dengan Cepat Menghadapi Perubahan  Growth 2016-2017 (Billion Rp) % % 14.1 2,230 315.9 4,046 7.2 12,577 28.8 2,482 12.0 2,036 10.9 100.0 6,942 8.7 16,843 26.7 53,284 84.6 7,027 9.5 20,519 38.5 9,722 15.4 (60) (1.0) (3,676) (37.8) 63,006 100.0 6,942 8.7 16,843 26.7 PT Bank Negara Indonesia (Persero) Tbk
  243. Analisis & Pembahasan Manajemen Government Bonds by Interest Rate 6.9% 2018 93.1% Suku Bunga Mengambang 7.6% 2017 92.4% Suku Bunga Tetap EQUITY INVESTMENT Equity investment comprises shares in non-public companies engaged in financial services for long-term purposes. BNI’s total investment at the end of 2018 was Rp785 billion (gross) with its participation and percentage of ownership detailed as follows: 1. PT Sarana Bersama Pembiayaan Indonesia 8.0% 2. PT Swadharma Nusantara Pembiayaan 7.4% 3. PT Bursa Efek Indonesia 1.2% 4. PT Kustodian Sentral Efek Indonesia 2.5% 5. PT Pemeringkat Efek Indonesia (Persero) 1.9% 6. PT Bank Mizuho Indonesia 1.0% 7. PT Sumitomo Mitsui Indonesia 0.5% 8. PT PANN Pembiayaan Maritim 48.4% FIXED ASSETS Net fixed assets in 2018 grew 14.6% from Rp22.8 trillion in 2017to Rp26.1 trillion. During 2018, management felt that there was no decline in BNI’s fixed assets value during the year due to the carrying cost of fixed assets not exceeding the estimated recoverable value. BNI made a permanent revaluation on September 30, 2018 for land and building assets in Indonesia and abroad with the following details: Book Value before Revaluation Tanah Bangunan Jumlah Book Value After Revaluation Revaluation Profit (Loss) 14,098 15,511 1,414 3,836 5,189 1,353 17,934 20,700 2,766 The Bank’s fixed assets as of December 31, 2018 are insured against the risk of fire and theft with a sum insured of Rp12.1 trillion, an increase from Rp9.6 trillion as of December 31, 2017. Management believes that the sum insured is sufficient to cover possible losses on these assets. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 243
  244. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Fixed Assets Description Land Buildings 2018 2017 2016 Growth 2017-2018 (Billion Rp) (Billion Rp) (Billion Rp) (Billion Rp) Growth 2016-2017 % (Billion Rp) % 15,557 13,857 13,829 1,700 12.3 28 0.2 5,626 4,252 3,850 1,374 32.3 402 10.4 9,136 8,146 976 10.7 990 12.2 Office Equipment and motor vehicles 10,112 Total acquisition cost 31,295 27,245 25,824 4,049 14.9 1,421 5.5 2,714 2,960 2,601 (246) (8.3) 359 13.8 34,009 30,205 28,426 3,803 12.6 1,779 6.3 414 783 546 (370) (47.2) 237 43.5 6,617 5,908 851 12.9 Assets in settlement Total acquisition cost Accumulated depreciation Building Office Equipment and motor vehicles 7,469 Total accumulated depreciation 7,882 7,400 6,454 482 6.5 947 14.7 26,127 22,805 21,972 3,322 14.6 832 3.8 Net book value 12.0 710 OTHER ASSETS Other assets rose 14.6% to Rp11.9 trillion in 2018 compared to Rp10.4 trillion in 2017. These comprise interest receivables from government bonds, customer receivables, foreclosed collateral, customer bills, other receivables and other assets. LIABILITIES Liabilities Description Obligations due immediately Deposits from customers* Deposits from Other Banks* Securities Sold under agreements to repurchase Derivatives payable Acceptances payable Securities issued* Borrowings 2018 2017 2016 Growth 2017-2018 (Billion Rp) (Billion Rp) (Billion Rp) (Billion Rp) 4.160 4.868 3.276 578.775 516.098 435.545 14.233 12.177 10.801 21.524 2.390 3.765 % Growth 2016-2017 (Billion Rp) % (707) (14,5) 1.592 48,6 62.677 12,1 80.553 18,5 2.056 16,9 1.376 12,7 19.134 800,6 (1.375) (36,5) 322 114 411 208 182,9 (297) (72,3) 4.417 4.507 4.359 (91) (2,0) 149 3,4 2.987 3.482 7.227 (495) (14,2) (3.745) (51,8) 52.025 44.722 32.388 7.303 16,3 12.334 38,1 Tax Debt 481 80 151 401 498,2 (70) (46,7) Provisions 178 192 156 (15) (7,7) 36 23,2 Accrued Expenses 876 971 1.047 (95) (9,8) (76) (7,2) Employee benefits Other liabilities Subordinated Securities TOTAL LIABILITIES 3.512 4.094 3.503 (582) (14,2) 591 16,9 14.608 14.731 11.149 (122) (0,8) 3.582 32,1 100 - - 100 100,0 - - 698.198 608.427 513.778 89.771 14,8 94.649 18,4 * includes temporary syirkah funds 244 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  245. Analisis & Pembahasan Manajemen Deposits From Customers Banking liquidity was an issue during 2018. This is seen in the growth of the banking industry loans being higher than the growth in customer deposits, with the industry Loan to Deposit Ratio (LDR) being above 90%. During this tight banking liquidity, BNI was able to show encouraging growth in customer deposits during 2018. Transactional services based on digital banking became BNI’s main weapon in driving this growth. In addition, to collect cheap funds BNI continued enhancing its partnerships with institutions or institutional customers, both private, state-owned and government. During 2018, customer deposits rose by Rp62.7 trillion or 12.1% to Rp578.8 trillion from Rp516.1 trillion in 2017. Giro grew by 18.2% or Rp26.1 trillion from Rp143.2 trillion in 2017 to Rp169.3 trillion in 2018. Savings products also recorded aggressive growth of Rp23.8 trillion from Rp182.3 trillion in 2017 to Rp206.1 trillion. Deposit products grew 6.7% or Rp12.8 trillion to Rp203.4 trillion during 2018. This growth was not as aggressive as the growth of demand deposits and savings products due to BNI’s strategy to focus on funding sourced from CASA. This strategy resulted in an improvement in BNI’s CASA ratio from 63.1% in 2017 to 64.8% in 2018. This condition also led to a decrease in the cost of customer deposits (Cost of Funds) by 0.2% from 3.0% in 2017 to 2.8% in 2018. Customer Deposits from Including Temporary Syirkah Funds 2018 2017 Pertumbuhan 2017-2018 2016 Description (Billion Rp) (Billion Rp) % (Billion Rp) % (Billion Rp) % Pertumbuhan 2016-2017 (Billion Rp) % % Deposits 169,274 29.2 143,162 27.7 122,652 28.2 26,112 18.2 20,510 16.7 Rupiah 126,924 21.9 108,729 21.1 92,024 21.1 18,195 16.7 16,705 18.2 Foreign Currency Savings Rupiah Foreign Currency 42,350 7.3 34,433 6.7 30,628 7.0 7,917 23.0 3,805 12.4 206,056 35.6 182,295 35.3 158,662 36.4 23,761 13.0 23,633 14.9 191,133 33.0 168,616 32.7 146,446 33.6 22,517 13.4 22,170 15.1 14,923 2.6 13,679 2.7 12,216 2.8 1,244 9.1 1,463 12.0 49,873 15.3 44,142 15.7 35.4 12,803 6.7 36,411 23.6 30.1 6,506 4.0 32,451 24.7 23,033 5.3 6,297 23.3 3,960 17.2 100.0 453,545 100.0 62,677 12.1 80,533 18.5 85.4 369,668 84.9 47,218 10.7 71,326 19.3 14.6 65,877 15.1 15,459 20.6 9,228 14.0 Total Demand Deposits and Savings 375,330 64.8 325,457 63.1 281,315 64.6 Deposits 203,445 35.2 190,641 36.9 154,230 Rupiah 170,155 29.4 163,649 31.7 131,198 33,290 5.8 26,992 5.2 578,775 100.0 516,098 488,212 84.4 440,994 90,563 15.6 75,104 Foreign Currency Total Deposits Rupiah Foreign Currency TEMPORARY SYIRKAH FUNDS Temporary syirkah funds are investments using mudharabah mutlaqah, whereby the fund owner (shahibuh maal) gives freedom to the fund manager (mudharib/BNI Syariah) to manage the investments with profit sharing according to an agreement. Temporary syirkah funds consist of mudharabah savings and mudharabah time deposits. Temporary syirkah funds cannot be classified as liabilities, as BNI Syariah is not required to return the initial funds amount, except due to ignorance or default that incurred losses. On the other hand, temporary syirkah funds cannot be classified as equity as it has its own due period and the funds owner does not have the same ownership rights as those of shareholders with voting rights and rights over profits derived from current assets and other non-investment accounts. Temporary syirkah fund owners receive profit sharing rewards according to the specified ratio. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 245
  246. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk NEGOTIABLE CERTIFICATE DEPOSIT (NCD) To support the Rupiah funding liquidity and strengthen its structure and composition, BNI issued scriptless Rupiah Negotiable Certificates of Deposit (NCD) in 2017. A total of Rp3.3 trillion NCDs were issued to mature during 2018. The NCDs will be explained more fully in the Other Financial Information Overview. DEPOSITS FROM OTHER BANKS Deposits from other banks are used by BNI as interbank call money facilities. Deposits from other banks in 2018 amounted to Rp13.9 trillion, an increase of Rp2.1 trillion or 16.9% compared to Rp12.2 trillion in 2017. In addition, for funding sources not to be concentrated in short-term funding alone, BNI issues Negotiable Certificates of Deposit (NCDs) which have been marketed through KSEI since 2016. Deposits from Other Banks Description Interbank money market 2018 2017 2016 (Billion Rp) (Billion Rp) (Billion Rp) Growth 2017-2018 (Billion Rp) Growth 2016-2017 (%) (Billion Rp) (%) 8,459 3,352 1,339 5,107 152.3 2,013 150.3 2,152 2,343 1,899 (170) (7.3) 444 23.4 Time deposits 1,323 839 1,877 Negotiable Certificate of Deposit 1,163 Current accounts Other deposits Total 4,248 3,246 484 57.6 (1,038) (55.3) (3,099) (72.7) 1,002 30.9 1,136 1,394 2,439 (585) (34.0) (1,045) (42.9) 14,233 12,177 10,801 2,056 16.9 1376 12.7 SECURITIES ISSUED On June 22, 2017, BNI obtained an effective statement from OJK through letter number S-349/D.04/2017 to issue I BNI Rupiah Phase I Bonds 2017 (“Bonds”).The value of the bonds issued amounting to Rp3.0 trillion, for a period of 5 years, with a coupon of 8% per annum to be paid quarterly. The BNI Bonds were issued on July 11, 2017 and listed on the Indonesia Stock Exchange on July 12, 2017.The first coupon payment to the bondholders was made on October 11, 2017. In 2018, Sukuk Mudharabah issued by BNI Syariah on May 26, 2015 and listed on the Indonesian Stock Exchange with a nominal value of Rp500 billion has matured and been paid off. The Sustainable Bonds are described in the Other Financial Information Overview section. SUBORDINATION SECURITIES On June 8, 2018, BNI obtained an effective statement from OJK through letter number S-3/PB.31/2018 to issue BNI’s Subordinate Medium I Notes in 2018 (“Subordinated MTN”). The value of the Subordinated MTN issued was Rp100 billion, for a 5-year period, with a coupon of 8% per year to be paid quarterly. BNI MTN Subordination was issued with limited offers. The first coupon payment to MTN Subordinate holders was made on November 7, 2018. The proceeds from the issuance of the Subordinated MTN will be used by BNI to strengthen complementary capital (tier 2) and working capital in the context of business development, especially credit and increase the composition of the structure of long-term fund associations, in accordance with OJK Regulation No. 11/POJK.03/2016 concerning Minimum Capital Requirement for Commercial Banks as amended by OJK Regulation No. 34/POJK.03/2016 will be used by the Company to support increased productive assets. 246 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  247. Analisis & Pembahasan Manajemen BORROWINGS Borrowings in 2018 amounted to Rp52.0 trillion, an increase of Rp7.3 trillion or 16.3% compared to Rp44.7 trillion in 2017. This increase was dominated by banker acceptances, which rose by Rp6.9 trillion or 95.4% compared to 2017. Bankers’ acceptances are interbank borrowings by BNI from foreign banks aimed at increasing liquidity with a loan term of 6 months which is one of the BNI’s funding strategies to maintain long-term and short-term composition. Borrowings Growth 2017-2018 2018 2017 2016 (Billion Rp) (Billion Rp) (Billion Rp) Description Ongoing Loans (Billion Rp) Growth 2016-2017 (%) (Billion Rp) (%) 73 75 132 (3) (3.4) (57) (42.9) 1 1 1 - - - - Bilateral loans 37,010 36,823 27,863 187 0.5 8,960 32.2 Banker acceptances 14,182 7,258 4,240 6,924 95.4 3,019 71.2 759 565 152 194 34.4 (165) (22.6) 52,025 44,722 32,388 7,302 16.3 11,757 35.7 Liquidity loans to primary credit cooperatives members Others Total Counterparty Borrowings Counterparty Nominal Time Period Interest Rate Due Date Standard Chartered Bank USD 200 Million 5 Years LIBOR 3 Months + 1.95% September 19, 2019 China Development Bank USD 700 Million 10 Years LIBOR 6 Months + 2.85% December 16, 2025 China Development Bank CNY 1.90 Billion 10 Years SHIBOR 6 Months + 3.30% December 16, 2025 Bank Consortium USD 500 Million 3 Years LIBOR 3 Months + 1.00% December 22, 2019 Bank Consortium USD 500 Million 5 Years LIBOR 3 Months + 1.21% December 22, 2021 Bank Consortium USD 500 Million 5 Years LIBOR 3 Months + 1.2% August 30, 2022 Bank of America USD 40 Million 335 Days LIBOR 3 Month + 0.8% August 12, 2019 CoBank Greenwood Vilage Colorado USD 80 Million 359 Days 2.88%-3.55% December 04, 2019 Sumitomo Mitsui Banking Corporation USD 100 Million 3-6 Months 2.94%-314% March 25, 2019 Societe Generale Paris USD 50 Million 4 Years LIBOR 3 Month + 2.30% December 17, 2018 OBLIGATIONS DUE IMMEDIATELY Obligations due immediately were dominated by BNI’s obligations as an issuer bank (ATM), remittances, check deposit funds, matured time deposits not yet taken by customers, clearing transactions, tax deposits received by BNI as a perception bank, and unsettled temporary deposits. The obligations due immediately in 2018 decreased Rp707 billion or 14.5% compared to 2017. SECURITIES SOLD UNDER AGREEMENT TO REPURCHASE The securities sold with the promise of repurchase is one of BNI’s alternative non-conventional funding sources to manage liquidity. This repo transaction is covered in OJK No.33/SEOJK.04/2015 SE concerning Indonesia’s Global Master Repurchase Agreement. Securities sold under agreement to repurchase amounted to Rp21.5 trillion in 2018, up Rp.19.1 trillion compared to 2017. OTHER LIABILITIES Other liabilities in 2018 amounted to Rp14.6 trillion, a decrease of Rp122 billion compared to Rp14.7 trillion I 2017. Other liabilities included obligations to policyholders, guarantee deposits, interest payable, unrecognized income, reinsurance payable, commission and payables of subsidiaries customer. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 247
  248. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk EQUITY BNI’s total equity in 2018 amounted to Rp110.4 trillion, up Rp9.5 trillion or 9.4% compared to Rp100.9 trillion in 2017, partly driven by the achievement of BNI’s net profit which grew 10.3% in 2018. Together with macroeconomic fluctuations and market pressure, Securities and Government Bonds market prices corrected, and caused a loss of Rp3.9 trillion during 2018 for Mark to Market Securities and Government Bonds classified as Available for Sale. In 2018, BNI revalued the Group’s land and building assets in Indonesia and abroad. In total the increase in carrying value arising from the revaluation of land and buildings has been recorded as “Other Comprehensive Income” and amounted to Rp2.7 trillion. Equity Description Issued and fully paid Capital 2017 2016 (Billion Rp) (Billion Rp) (Billion Rp) (Billion Rp) Growth 2016-2017 (Billion Rp) % % 9,055 9,055 9,055 - 0.00 - 0.00 14,568 14,568 14,568 - 0.00 - 0.00 2,257 2,257 2,257 - - - 14,979 12,283 12,285 2,696 21.9 (2) - (3,914) 22 (1,888) (3,936) (17.706.1) 1,911 - Differences arising from translation of financial statements in foreign currency 85 93 82 (8) (8.9) 11 13.4 Gains (losses) on defined benefit plan actuarial - - - - - - - 71,047 60,314 50,798 10,733 17.8 9,515 18.7 - - - - - - - 108,077 98,592 87,157 9,485 9.6 11,435 13.1 Additional paid in capital Transactions with non-controlling parties Revaluation reserve assets Unrealized Gains (Losses) On Available-For-Sale Marketable Securities And Government Bonds, Net Of Tax Total retained earnings Treasury stock Total equity attributable to owners parent Non-controlling interests Total Equity 248 Growth 2017-2018 2018 Beradaptasi dengan Cepat Menghadapi Perubahan  2,297 2,311 2,097 (14) (0.6) 214 10.2 110,374 100,903 89,254 9,470 9.4 11,649 13.1 PT Bank Negara Indonesia (Persero) Tbk
  249. Analisis & Pembahasan Manajemen CONSOLIDATED PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME STATEMENT Amid the economic situation in Indonesia that did not change significantly in 2018, coupled with the increasingly depressed Rupiah against the US Dollar, BNI again proved its consistency and continued to make a positive contribution to the country by recording a net profit growth of 10.3% compared to 2017, due to the increasing composition of income such as interest and sharia income which was the main driving force for banking operations. Profit and Loss Statement Description Interest income and Sharia income-net Premium income -net Growth 2017-2018 Growth 2016-2017 2018 2017 2016 (Billion Rp) (Billion Rp) (Billion Rp) 35,446 31,938 29,995 3,509 11.0 1,943 6.5 1,712 1,768 1,342 (56) (3.2) 426 31.7 (Billion Rp) (Billion Rp) % % Other operating income 11,613 11,040 9,552 573 5.2 1,488 15.6 Total operating income 48,771 44,745 41,888 4,026 9.0 3,857 9.4 Other operating expenses (21,783) (20,396) (18,106) (1,387) 6.8 (1,590) 8.5 Allowance for impairment losses (7,388) (7,126) (7,853) (262) 3.7 727 (9.3) Operational profit 19,599 17,223 14,229 2,377 13.8 2,993 21.0 221 (57) 74 279 (486.4) (131) (177.0) Income before tax expense Income (expense) non operating-net 19,821 17,165 14,303 2,655 15.5 2,862 20.0 Tax Expense (4,729) (3,395) (2,893) (1,334) 39.3 (502) 17.4 Income for the year 15,092 13,771 11,410 1,321 9.6 2,360 20.7 Profit for the year attributable to: Non-controlling interests Equity holder of the parent entity 77 154 71 (77) (50.3) 83 116.9 15,015 13,616 11,339 1,399 10.3 2,278 20.1 INTEREST INCOME GROWTH INTEREST INCOME AND SHARIA INCOME BNI as a financial institution that functions to channel loans to the community while supporting national economic activities for the success of the government programs, interest income and sharia income are the company’s main sources of income in generating profits other than operating income. Interest income and sharia income increased by 11.0% from Rp31.9 trillion in 2017 to Rp35.4 trillion in 2018, with the largest increase being interest income on loans disbursed that amounted to Rp3.9 trillion. During 2018, the increase in interest income was not only dominated by loans but also supported by the increase in other productive financial assets as a result of BNI’s policy to manage the composition of its financial instruments. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 249
  250. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Interest Income from Productive Assets Description Growth 2017-2018 2018 2017 2016 (Billion Rp) (Billion Rp) (Billion Rp) Loans 42,919 39,184 % (Billion Rp) % 3,735 9.5 2,881 7.9 893 20.8 695 19.3 393 12.4 384 13.8 244 38.8 183 40.7 260 239 55.9 167 64.6 359 457 99.6 100 27.9 43,768 5,961 12.4 4,409 10.1 36,304 Government Bonds and Marketable Securities 5,196 4,303 3,608 Margin, profit sharing revenue and Sharia bonus 3,567 3,175 2,790 Placements with Bank Indonesia and other Banks 874 629 447 Export Bills and other receivables 667 428 Others 916 459 54,139 48,178 Total (Billion Rp) Growth 2016-2017 Interest Income and Shariah Income Composition 9% 9% 7% 2% 1% 7% 1% 1% 2% 2% 2018 2017 79% 81% Margin, pendapatan bagi hasil dan bonus Syariah Pinjaman yang Diberikan Penempatan pada Bank Indonesia dan bank lain-lain Wesel Ekspor dan Tagihan lainnya INTEREST INCOME FROM DISBURSED LOANS The increase in interest income on loans disbursed amounted to 10.0% in 2018 and reached Rp43.1 trillion compared to Rp39.2 trillion in 2017, due to growth in loans disbursed of 16.2% with no increase in the Lending Rate for the loans. During 2018, there was an increase of 7 days repo rate from Bank Indonesia from 4.25% to 6.00% which did not have a direct impact on BNI’s loan portfolio. This is one of BNI’s policies in managing the quality of debtors and supporting the country’s economic activities when macroeconomic conditions are still volatile. 250 Beradaptasi dengan Cepat Menghadapi Perubahan  Lain-lain Obligasi Pemerintah dan lain-lain INTEREST INCOME FROM GOVERNMENT BONDS AND MARKETABLE SECURITIES Government securities and bonds are an alternative for investment placements that can promise higher returns than other productive assets including loans. This was marked by an increase in the securities and government bonds portfolio that increased 2.5% at the end of 2018. The impacted interest income on government bonds and securities which increased 20.8%, from Rp4.3 trillion in 2017 to Rp5.2 trillion in 2018. PT Bank Negara Indonesia (Persero) Tbk
  251. Analisis & Pembahasan Manajemen INTEREST INCOME FROM MARGIN, PROFIT-SHARING REVENUE AND SHARIA BONUS The Sharia business was relatively stable year-on-year and was one of the promising businesses considering the intense Sharia business competition in 2018. Margin Interest Income, Sharia Revenue and Bonus Sharing increased by 12.4% from the previous year . INTEREST INCOME FROM PLACEMENTS WITH OTHER BANKS AND BANK INDONESIA In 2018, revenues from placements with other banks and Bank Indonesia increased by 39.3% from Rp629 billion in 2017 to Rp877 billion in 2018. INTEREST INCOME FROM BILLS AND OTHER RECEIVABLES In 2018 interest income from bills and other receivables rose 55.9% from Rp428 billion in 2017 to Rp667 billion in 2018. INTEREST EXPENSE AND SHARIA EXPENSE Interest expense and Sharia expense increased by 15.1% in 2018, or Rp2.5 trillion from Rp16.2 trillion in 2017 to Rp18.7 trillion. Interest Expense and Sharia Expense Description Customer Deposits and Other Banks Borrowings 2018 2017 2016 (Billion Rp) (Billion Rp) (Billion Rp) Growth 2017-2018 (Billion Rp) Growth 2016-2017 (Billion Rp) % % 13,977 13,230 11,393 747 5.6 1,837 16.1 3,488 1,875 1,231 1,612 86.0 644 52.3 Mudharabah profit sharing expenses 987 919 855 69 7.5 64 7.5 Securities issued 243 216 295 27 12.5 (79) (26.8) 18,696 16,240 13,773 2,455 15.1 2,467 17.9 Total Interest Expenses and Sharia Expenses Composition 1% 5% 19 1% 6% 12% 2018 75% Simpanan Nasabah dan Bank Lain 2017 81% Pinjaman yang diterima Bagi Hasil Mudharabah Efek-efek yang diterbitkan INTEREST EXPENSE ON CUSTOMER AND OTHER BANKS DEPOSITS The increase in interest expense on deposits of customers and other banks in 2018 was in line with the growth of customer deposits. As of the end of 2018, customer deposits increased by 12.1%, and interest expense increased by 5.6% from Rp13.2 trillion in 2017 to Rp13.9 trillion in 2018. To manage the growth in interest expenses, starting from the beginning of the year BNI sought to improve its customer deposit composition by increasing low-cost funds, namely demand deposits and savings, as reflected in the CASA ratio. BNI saw an increase in CASA ratio from 63.1% in 2017 to 65.3% in 2018. This condition caused a decrease in the cost of funds for customer deposits from 3.0% in 2017 to 2.8% in 2018. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 251
  252. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk INTEREST EXPENSE ON BORROWINGS Interest expense from borrowings increased 86.0%, from Rp1.9 trillion in 2017 to Rp3.5 trillion in 2018. This increase is one of BNI’s funding strategies to maintain the composition of short-term and long-term funds. INTEREST EXPENSE ON SECURITIES ISSUED Interest expense on securities issued increased 12.5%, from Rp216 billion in 2017 to Rp243 billion. INTEREST EXPENSE ON PROFIT-SHARING MUDHARABAH Interest expense on profit-sharing Mudharabah increased by 7.5%, or Rp69 billion in 2018 in line with the 10.8% increase in temporary syirkah funds, from 24.3 trillion in 2017 to Rp27.0 trillion in 2018. INTEREST INCOME AND SHARIA INCOME - NET Interest income and sharia income increased by 12.7% in 2018, accompanied by an increase in interest expenses and sharia expenses of 15.1%, resulting in a 11.0% rise in net interest income and sharia income. PREMIUM INCOME - NET BNI Life as one of BNI’s subsidiaries contributes to BNI’s income on a consolidated basis. BNI Life recorded a net premium income of Rp1.7 trillion in 2018, a decrease of 3.2% from Rp1.8 trillion in 2017. This was due to the correction of securities market prices and government bonds which were the investment means of BNI Life to develop its portfolio. OTHER OPERATIONAL INCOME Macroeconomic conditions during 2018 resulted in fluctuations in interest rates and a weakening of the rupiah exchange rate against foreign currencies. This affected the banking industry in general, including BNI, as reflected in the growth of other operating income during 2018 by 5.2% compared to 2017. This growth is far smaller than the growth in 2017 when in rose 10.8% compared to 2016. Other Operating Income Growth 2016-2017 2017 2016 (Billion Rp) (Billion Rp) (Billion Rp) (Billion Rp) Fees and commissions 7,802 6,872 6,085 930 13.5 787 12.9 Recovery of assets written off 1,997 1,732 1,378 265 15.3 354 25.7 12 (38) (43) 50 (131.3) 5 11.9 Gain (loss) on sale of financial assets classified as available for sale 509 720 646 (212) (29.4) 74 11.5 Gain on foreign exchange - net 494 908 685 (414) (45.6) 223 32.5 Others 800 846 801 (46) (5.5) (46) 5.5 11,613 11,040 9,552 106 5,2 1,544 15,6 Description Gain (loss) on financial assets held for trading Total 252 Growth 2017-2018 2018 Beradaptasi dengan Cepat Menghadapi Perubahan  (Billion Rp) % % PT Bank Negara Indonesia (Persero) Tbk
  253. Analisis & Pembahasan Manajemen Other Operating Income Composition 8.2% 6.5% 7.7% 4.4% 0.0% 4.3% 6.9% 0.1% 15.7% 17.2% Provinsi dan Komisi Pemerimaan kembali asset yang Telah dihapus bukukan 2017 2018 62.3% keuntungan (kerugian) dari aset keuangan yang dimiliki untuk diperdagangktan Laba selisih Kurs-neto Keuntungan (kerugian) dari penjualan aset keuangan yang di klasifikasikan tersedia untuk dijual Lainnya 67.2% FEES AND COMMISSIONS Income from BNI’s fees and commissions during 2018 rose by 13.5% from Rp6.9 trillion in 2018 to Rp7.8 trillion. This income in 2018 amounted to Rp930 billion, and was dominated by income from trade finance transactions, account management, business cards, bank guarantees, and ATM fee cooperation revenues. RECOVERY OF ASSETS THAT HAVE BEEN REMOVED Recovery of written-off assets represents income derived from principal deposits that were written off before 2018. The recovery of written-off assets income increased by 15.3% from Rp1.7 trillion in 2017 to Rp2.0 trillion in 2018. GAINS (LOSSES) ON FINANCIAL ASSETS HELD FOR TRADING The financial assets held for trading gain in 2018 amounted to Rp12 billion compared to a loss of Rp38 billion in 2017. GAINS ON THE SALE OF FINANCIAL ASSETS AVAILABLE FOR SALE AND HELD FOR TRADING Gains on the sale of financial assets available for sale decreased 29.4% in 2018 to Rp509 billion from Rp720 billion the previous year. GAIN ON FOREIGN EXCHANGE - NET Net foreign exchange gains decreased by 45.6% to Rp494 billion in 2018, due to the weakening of the Rupiah exchange rate against foreign currencies. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 253
  254. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk OTHER OPERATING EXPENSES Other operating costs increased by 6.8% to Rp21.8 trillion. This single digit growth led to an improvement in the cost to income ratio (CIR) from 43.9% in 2017 to 42.6% in 2018. The same is also evident in the BOPO ratio that dropped from 71.0% in 2017 to 70.2% in 2018. Improving the two ratios is a benchmark for the company’s condition showing that bank operations in 2018 ran far more efficiently compared to 2017. Other Operating Expenses Description Growth 2017-2018 2018 2017 2016 (Billion Rp) (Billion Rp) (Billion Rp) (Billion Rp) Growth 2016-2017 % (Billion Rp) % Salaries and allowances 9,519 9,277 8,834 242 2.6 443 5.0 General and administrative 7,667 6,923 6,212 744 10.8 711 11.4 Promotion Expenses 1,291 1,039 946 252 24.2 93 9.8 10.6 148 20.3 Guarantee premiums Others Total 971 877 729 93 2,336 2,281 2,085 55 2.4 196 9.4 21,783 20,396 18,806 1,387 6.8 1,591 8.5 Other Operational Expenses Composition 2018 44% Beban Gaji dan Tunjangan 46% 35% Umum dan Administrasi 34% 6% Beban Promosi 5% 4% Premi Penjaminan 4% 11% Lain-lain 11% 2017 SALARIES AND BENEFITS EXPENSES Salaries and benefits in 2018 increased by Rp242 billion or 2.6% compared to 2017. GENERAL AND ADMINISTRATIVE EXPENSES General and administrative expenses increased by Rp744 billion or 10.8% compared to 2017. The largest increase occurred in the cost of outsourcing workers, depreciation expenses and telecommunications expenses in line with business growth. PROMOTIONAL EXPENSES Promotional expenses in 2018 increased 24.2% to Rp1.3 trillion compared to Rp1.0 trillion in 2017. BNI’s increase was felt necessary by BNI to increase loyalty and good relations with customers, and were carried out in the form of sponsorship, event management, promotional media and other publications. GUARANTEE PREMIUM EXPENSES Guarantee premium expenses are premiums paid by BNI to the Deposit Insurance Corporation (LPS), and they increased by Rp93 billion or 10.6% in 2018 compared to the previous year. The increase in premiums is in line with the 12.1% increase in customer deposits in 2018. OTHER EXPENSES Other expenses increased by Rp55 billion or 2.4% compared to 2018, and was dominated by contributions to the Financial Services Authority (OJK), card business transaction expenses, fees for third parties cooperations, and PKBL fund costs in accordance with the GMS decision. 254 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  255. Analisis & Pembahasan Manajemen ALLOWANCES FOR IMPAIRMENT LOSSES Other expenses increased by Rp55 billion or 2.4% compared to 2018, and was dominated by contributions to the Financial Services Authority (OJK), card business transaction expenses, fees for third parties cooperations, and PKBL fund costs in accordance with the GMS decision. ALLOWANCES FOR IMPAIRMENT LOSSES The allowance for impairment losses during 2018 increased by 3.7% compared to 2017, from Rp7.1 trillion to Rp7.4 trillion, mainly due to the increase in the coverage ratio from 148.0% in 2017 to 152.9% in 2018. INCOME BEFORE TAX BNI’s income before tax increased from Rp17.2 trillion in 2017 to Rp19.8 trillion in 2018, up 15.5%. TAX EXPENSE BNI’s tax expense increased by 39.3% to Rp4.7 trillion. In accordance with applicable regulations, BNI has complied with the payment requirements of a single tariff of 20%. INCOME FOR THE YEAR As of the end of 2018, BNI’s income for the year increased to 10.3% to Rp15.0 trillion. OTHER COMPREHENSIVE INCOME ITEMS WILL NOT BE RECLASSIFIED TO PROFIT OR LOSS This comprises fixed asset revaluation gains which increased from a loss of Rp3.8 billion to a profit of Rp2.8 trillion in 2018 due to an increase in asset revaluations. In addition, remeasurement of post employment benefits also increased from the previous loss of Rp148.7 billion to a profit of Rp601.4 billion due to adjustments to PSAK 24. ITEMS THAT WILL BE RECLASSIFIED TO PROFIT OR LOSS This comprises adjustments due to the translation of financial statements in foreign currencies which decreased from the previous profit of Rp11.4 billion to a loss of Rp8.3 billion. Also gains from changes in the value of financial assets categorized as available-for-sale decreased from a profit of Rp2.5 trillion to a loss of Rp5 trillion. TOTAL COMPREHENSIVE INCOME BNI’s total comprehensive profit for 2018, after taking into account comprehensive income, amounted to Rp14.2 trillion, a decrease of 8.8% from Rp15.6 trillion in 2017. Comprehensive Income Description Income for the year 2017 2016 (Billion Rp) (Billion Rp) (Billion Rp) 15,092 Other comprehensive loss / income - after tax Comprehensive income for the year Growth 2017-2018 2018 13,771 11,410 (856) 1,847 923 14,236 15,618 12,333 (Billion Rp) Growth 2016-2017 % (Billion Rp) % 1,321,2 9.6 2,360,4 20.7 (2,702,6) (146.3) 924,6 100.2 (1,381,4) (8.8) 3,285,0 26.6 (228,5) (106.6) 141,2 192.9 (1,152,9) (7.5) 3,143,8 25.5 Comprehensive income for the year Attributable to: Non-controlling interests Equity holder of the parent entity (14) 14,250 PT Bank Negara Indonesia (Persero) Tbk  214 15,403 73 12,259 Beradaptasi dengan Cepat Menghadapi Perubahan 255
  256. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT ENTITY The current year’s earnings per share is calculated by dividing the current year’s profit attributable to the owners of the parent entity by the weighted average number of common shares outstanding during the year. The net profit after income tax increased by 10.3% and led an increase in earnings per BNI share from Rp730 per share in 2017 to Rp805 per share in 2018. Tabel Laba Per Saham Dasar (dalam rupiah penuh) 2017 2016 (Billion Rp) (Billion Rp) (Billion Rp) Income for the current year attributable to equity holder of the parent entity Weighted average number of ordinary shares outstanding (shares) Growth 2017-2018 2018 Description Growth 2016-2017 (Billion Rp) % (Billion Rp) % 15,015,118 13,616,476 11,339,743 1,398,642 10.3 2,277,733 20.1 18,648,656,458 18,648,656,458 18,588,205,225 - 0.0 60,451,233 0.3 805 730 610 75 10.3 120 19.7 Earnings per Share CONSOLIDATED CASH FLOW STATEMENT In 2018, cash and cash equivalents increased from Rp92.0 trillion to Rp98.39 trillion, and consisted of net cash outflows from operating activities of Rp4.3 trillion, net cash outflows from investment activities of Rp9.6 trillion, and net cash inflows from funding activities of Rp20.6 trillion. Cash Flow Description 2018 2017 2016 Pertumbuhan 2017-2018 Pertumbuhan 2016-2017 (Billion Rp) (Billion Rp) (Billion Rp) (Billion Rp) (Billion Rp) Net Cash Flows From Operating Activities (4,274) 33,626 15,999 (37,951) Net Cash Flows From Investing Activities (9,612) (23,274) (29,400) 13,663 Net Cash Flows From Financing Activities 20,609 3,245 8,060 17,416 6,723 13,597 (5,341) (6,874) Net Cash Flow 17,627 6,126 (4,815) 18,938 CASH FLOWS FROM OPERATING ACTIVITIES Net cash flows generated from operating activities for 2018 amounted to Rp4.3 trillion. Net cash flow represents the difference between cash inflows and cash outflows. The highest cash inflows were derived from an increase in customer deposits, and an increase in interest income. The highest cash outflows were derived from loan disbursements, interest payments, and other operating expenses. This means that BNI was able to conduct good business processes by utilizing its operational resources such as loans, customer deposits, and paying taxes into cash that has been recognized and obtained. 256 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  257. Analisis & Pembahasan Manajemen CASH FLOWS FROM INVESTING ACTIVITIES Net cash flows released from investment activities for 2018 amounted to Rp9.6 trillion. The highest cash outflows were derived from government bond, securities, and fixed assets purchases This indicates that BNI is still making additional investments and business processes in the form of bonds but has not yet received any cash returns from investments issued during 2018. CASH FLOWS FROM FINANCING ACTIVITIES Net cash flows generated from funding activities for 2018 amounted to Rp20.6 trillion. The highest cash inflows were derived from the increase in loans received and repo debt issued. The highest cash outflows were derived from dividend payments. This means that BNI is still able to obtain cash in the form of funding from loans received that can cover cash out in the form of dividends and others. Du Pont Analysis Net Operating Income Asset Turnover Operating Income 18.74% 2.64% 2.62% 24.75% 12.11% 21.28% 2.53% 10.13% 14.68% )Return On Equity (ROE 16.10% 15.50% 2016 2017 2018 2016 2018 2016 2017 2018 15.60% Other Operating Income + 2016 2017 2017 2018 x Operating Expenses - 15.38% 22.36% 15.11% Leverage 18.52% 592.9% 15.66% 6.16% 583.4% 2016 548.3% 2017 2018 2016 Taxes 2016 2017 2018 39.56% 25.47% - 2017 2018 Allowance for impairment lossess 5.50% 4.54% 2016 2018 19.72% 2016 2017 2018 (13.64%) 2017 PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 257
  258. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk FINANCIAL RATIOS Financial Ratios  Description 2018 (%) 2017 (%) 2016 (%) CAPITAL CAR-Tier I 17.4 17.4 18.3 CAR-Tier II 1.1 1.1 1.1 18.5 18.5 19.4 NPL Nett 0.8 0.7 0.4 NPL Gross 1.9 2.3 3.0 152.9 148.0 146.0 ROA 2.8 2.7 2.7 ROE 16.1 15.6 15.5 5.3 5.5 6.2 BOPO 70.1 71.0 73.6 CIR 42.5 43.9 44.0 88.8 85.6 90.4 85.3 90.4 CAR (Credit Risk, Market, and Operating) ASSETS QUALITY Adequacy of Reserves Ratio on Non Performing Loans Profitabilitas Net Interest Margin Efficiency Liquidity LDR Compliance MSR (Rupiah) Net Open Position 6.5 6.6 6.8 Posisi Devisa Neto 2.0 2.5 3.4 CAPITAL RATIOS CAPITAL ADEQUACY RATIO The capital adequacy ratio (CAR) in 2018 was stable at 18.5%. This stable CAR was due to capital growth in line with the growth of productive assets in 2018. BNI’s CAR ratio is still much higher than that set by Bank Indonesia through POJK No. 11/ POJK.03/2016 concerning Minimum Capital Requirement for Commercial Banks as amended by POJK No. 34/POJK.03/2016, which is a minimum of 9% of RWA for banks with a risk profile rating of 2. ASSET QUALITY RATIOS NPL RATIO There are two main strategies implemented by BNI to manage asset quality, the first strategy is to selectively expand loans given to low risk sectors. The second strategy is to manage troubled borrowers that still have the potential to improve through remedial and restructuring schemes. This strategy improved BNI’s NPL ratio from 2.3% in 2017 to 1.9% in 2018. COVERAGE RATIO To anticipate fluctuating macroeconomic conditions, BNI mitigated the loan disbursement risk by increasing the reserve, compared to the previous year, which was reflected in the coverage ratio increasing to 152.9% in 2018 compared to 148.0% in 2017. 258 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  259. Analisis & Pembahasan Manajemen PROFITABILITY RATIOS LIQUIDITY RATIOS ROA BNI’s return on Assets (ROA) increased to 2.8% in 2018 from 2.7% in 2017, due to the increase in BNI’s potential profits from the increase in productive assets during 2018. LOAN TO DEPOSIT RATIO AND MACROPRUDENTIAL INTERMEDIATION RATIO The loan to deposit ratio (LDR) in 2018 increased to 88.8% compared to 85.6% in 2017. This was due to the Company’s strategy to encourage loan growth supported by sound deposit growth to improve the banking intermediation function while maintaining credit quality. The ratio is still within the range set by Bank Indonesia Regulation No. 15/15/ PBI/2013 dated December 24, 2013 that has been amended several times, most recently by Bank Indonesia Regulation No. 20/4/PBI/2018 concerning Macroprudential Intermediation Ratios and Macroprudential Liquidity Buffers for conventional commercial banks, sharia commercial banks, and sharia business units where the Macroprudential Intermediation Ratio (RIM) ranges from 80% to 92%. ROE Return on Equity (ROE) is a ratio that measures BNI’s ability to produce net income by maximizing its capital, and generating a separate profit for the owners or investors. ROE increased from 15.6% in 2017 to 16.1% in 2018. NIM The Net Interest Margin in 2018 decreased to 5.3% compared to 5.5% in 2017. The decline was due to BNI’s strategy to maintain asset quality by not raising loan interest rates during 2018 even though Bank Indonesia had raised its benchmark interest rate (7 day repo rate) from 4.25% in early 2018 to 6.00% at the close of 2018. EFFICIENCY RATIOS BOPO BOPO ratio (Operating Expenses to Operational Income) improved from 71.0% in 2017 to 70.1% in 2018 due to increases in interest income and other operating income of 12.4% and 3.3% respectively, when compared to 2017. This shows BNI’s ability to generate higher revenue at a more efficient cost. CIR Cost to Income Ratio (CIR) is a ratio that measures the efficiency for the operational expenses to yield optimal income. In 2018 BNI’s CIR improved from 43.9% in 2017 to 42.5%. This improvement illustrates that during 2018 BNI could utilize its resources to the maximum to yield higher income. As of 2018, the RIM ratio stood at 88.8% with total Corporate (Non-Bank) Securities held amounting to Rp1.6 trillion and Corporate Securities issued and purchased by Non-Bank investors amounting to Rp2 trillion. COMPLIANCE RATIOS STATUTORY RESERVES In managing its daily liquidity, BNI endeavors to maintain an optimal liquidity level to support its daily operations and meet Bank Indonesia regulations through Statutory Reserves (SR). As of December 2018, BNI’s Rupiah Statutory Reserves stood at 6.5% and Foreign Currency SR at 8.0%. This liquidity position follows PBI No. 20/3/PBI/2018 concerning Statutory Reserves in Rupiah and Foreign Exchange for Conventional Commercial Banks, Islamic Commercial Banks and Sharia Business Units, and Foreign Exchange for Conventional Commercial Banks, as well as the Board of Governors’ Regulation No. 19/4/PADG/2017 concerning Commercial Banks Statutory Reserves in Rupiah and Foreign Exchange for Conventional Commercial Banks. NET OPEN POSITION As at December 2018, the Net Open Position (NOP) was recorded at 2.0%, a slight decrease compared to 2.5% in 2017. This figure is still far below the maximum amount set by BI in PBI No. 5/13/PBI/2003 concerning the Net Open Position for Commercial Banks, which has been amended several times, with the latest by PBI No. 17/5/PBI/2015, setting it at 20% of capital. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 259
  260. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk OTHER FINANCIAL INFORMATION REVIEW BANK HEALTH LEVEL The Bank’s health level is the result of the Bank’s risks and performance assessments. The BNI Health Level Assessment was carried out using a Risk-Based Bank Rating, both individually and on a consolidated basis. The Bank’s health level is a means for BNI to identify problems early, establish future business strategies, develop and implement corrective actions on weaknesses / existing problems, provides a basis for linking capital with risk, as one of the bases in decision-making and for increasing competitiveness. Whereas for the supervisory authority it is a means for determining the strategy and focus of supervision on the Bank. The Bank’s health level rating looks at the following four (4) factors: 1. Risk Profile Risk Profile as an overall picture of inherent risk in the Bank’s operations. The risk profile assessment is conducted by assessing the inherent risks in the Bank’s activities, and the quality of risk management. 2. Good Corporate Governance (GCG) Good Corporate Governance (GCG) is an assessment of the Bank’s management quality for applying corporate governance principles. 3. Earnings An assessment of profitability factors including a profitability performance evaluation, profitability sources, sustainability, profitability, and profitability management. 4. Capital An assessment on Capital factors including an evaluation of Capital and Capital adequacy management. In assessing capital adequacy, BNI links its capital adequacy to its risk profile. The Bank Rating assessment is reported to the regulator (OJK) every 6 months in June and December. BNI ‘s bank health level assessment result for December 31, 2018 reported a “Healthy” ranking meaning that: a. The Bank’s condition is generally healthy, and it is considered capable of facing significant negative effects from changes in business conditions and other external factors. b. The rating assessment factors (Risk Profile, GCG, Profitability and Capital) are generally good. If there are any weaknesses, they are insignificant. BNI’s risk profile, as one of the factors for the CAR assessment for December 31, 2018, was ranked 2 (low to moderate). BNI’s risk profile ranking based on calculations using the Internal Capital Adequacy Assessment Process (ICAAP), was 9.9%. If coupled with the buffer capital, namely the Conservation Buffer of 1.875%, the Countercyclical Buffer of 0%, and the Capital Surcharge of 1.125%, then the limit for the Minimum Capital Requirement Ratio (MCRR) was 12.9%. In 2018, BNI’s MCRR of 18.5% exceeded the specified minimum limit. 260 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  261. Analisis & Pembahasan Manajemen COMMITMENTS AND CONTINGENCIES BNI has commitments and contingencies. An overview of the Bank’s commitments and contingencies, as stated in its contracts, is as follows: Commitments and Contingencies Description 2018 (Billion Rp) 2017 (Billion Rp) Commitments Payable Unrealized purchases of foreign currency futures 68,881 Others 66,057 510 463 69,391 66,520 Unused Credit facilities to borrowers 54,228 49,963 Outstanding Irrevocable letters of credit 12,455 11,630 Unused Sales of foreign currency futures 68,772 66,018 135,455 127,611 17,434 18,032 4,064 4,705 Total Liability Commitments Total Contingency Commitments Bank guarantees received Interest income in progress Others 194 164 21,692 22,901 Performance bonds 29,755 29,760 Advance payment bonds 10,679 10,832 Standby letters of credit 9,215 8,269 Garansi bank lainnya 7,940 7,124 Bid bonds 4,174 3,481 4 2 Total Contingency Liabilities Guarantees issued: Shipping guarantee Risk sharing Total - - 61,767 59,468 Commitments and contingencies that occur in the normal course of the Bank’s activities that have a credit risk are as follows: Description 2018 (Billion Rp) 2017 (Billion Rp) Bank Guarantees issued Related Party 26,924 23,743 Third Party 35,473 35,725 Related Party 8,152 6,660 Third Party 4,303 4,971 74,223 71,099 Irrevocable letters of credit Total PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 261
  262. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Commitments and contingencies that have a credit risk based on collectibility are as follows: 2018 (Billion Rp) Description Current Special Mention 2017 (Billion Rp) 73,847 68,947 2,317 2,140 Substandard 56 - Doubtful - - Loss 3 12 74,223 71,099 Total Bank BNI has also compiled details related to commitments and contingencies growth as shown in the following table: Growth Description 2018 2017 2016 2017-2018 (Billion Rp) 2016-2017 (%) (Billion Rp) (%) Commitments Payable Foreign currency future purchases not yet paid 68,881 66,057 56,936 2,824 4.3 6,121 10.2 510 463 459 48 10.2 4 0.9 69,391 66,520 57,395 2,872 4.3 6,125 10.1 Unused Customer Loan Facilities 54,228 49,963 54,548 4,265 8.5 (4,585) (8.4) Outstanding Irrevocable L/C 12,456 11,630 10,515 825 7.1 1,116 10.6 Outstanding Spot and Derivitive Sales Position 68,772 66,018 57,065 2,753 4.2 8,952 15.7 135,455 127,611 122,128 7,845 6.2 5,483 4.5 17,434 18,032 18,697 (599) (3.3) (664) 4,064 4,705 4,476 (641) (13.6) 229 5.1 194 163 142 31 19.0 21 14.7 21,692 22,901 23,315 (1,209) (5.3) (414) (1.8) Others Total Commitments Payable Commitment Liabilities Total Commitments Payable Contingent Receivables Bank Guarantee Received - Interest Income in Progress Others Total Contingent Receivables Contingent Liabilities (3.6) - Bank Guarantee issued 61,767 59,468 54,295 2,299 3.9 5,173 9.5 Total Liabilitas Kontijensi 61,767 59,468 54,295 2,299 3.9 5,173 9.5 Total commitment liabilities in 2018 increased by 6.2% compared to 2017, mainly due to the increase in loan facilities to customers not yet drawn down of 8.5%. Contingent receivables in 2018 decreased by 5.3% compared to 2017, and was dominated by a 13.6% decrease in Interest Income in progress. However, contingent liabilities increased by 3.9% compared to 2017, due to the increase in bank guarantees issued. Broadly speaking, the commitment and contingency fluctuations are in line with loan growth, as borrowers are increasingly using the many BNI products and services with competitive features. GUARANTEED BANK ASSETS In 2018, there were no guaranteed Bank assets. 262 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  263. Analisis & Pembahasan Manajemen DERIVATIVES AND HEDGING FACILITIES BNI conducts derivative transactions both for the benefit of the Bank and the interests of the Customers. As of December 31, 2018, BNI conducted USD-IDR Cross Currency Swap (CCS) transactions for a total asset value of US$120 million. In addition to CCS transactions, BNI also engages in Interest Rate Swap (IRS) transactions with a total asset values as of December 31, 2018 amounting to USD1,862.0 million. CCS and IRS transactions are conducted after taking into account market and the portfolio conditions, in anticipation of currency and interest rates movements that could potentially harm the bank. When conducting its business, BNI transacts in derivative financial instruments such as foreign currency forward contracts, foreign currency swaps, interest rate swaps, and spot transactions to manage exposure to market risks, such as currency risk and interest rate risk. Derivative financial instruments are recognized in the consolidated statements of financial position at fair value. Any increase in the fair value of a derivative contract is recorded as an asset, when it has a fair value, and a liability when it is negative fair value. Derivative receivables and liabilities are classified as financial assets and liabilities measured at fair value through profit or loss. Gains or losses arising from changes in fair value are recognized in the consolidated statements of income. The fair value of derivative instruments is determined based on discounted cash flows and pricing models, or prices provided by the brokers’ quoted price for other instruments with similar characteristics. Foreign currency forward contracts, cross currency swaps, and cross currency swap and swap rates are conducted for financing and trading purposes. In addition, in its business, BNI conducts derivative financial instruments transactions such as foreign currency forward contracts, foreign currency swaps, interest rate swaps and spot transactions for financing, trading and hedging purposes. Claims and Liability Derivatives By Type and Currency 2018 Instrument Fair Value Notional amount foreign currency Derivative Commitments Derivative Liabilities (full amount) (Rp million) (Rp million) Exchange Related Forward contracts - buy USD 239,031,000 2,565 (26,092) USD 466,832,415 84,598 (2,594) CYN 12,100,000 312 - EUR 59,068,329 2,699 (12,776) JPY 600,492,755 5,752 - USD 734,914,068 8,415 (220,572) GBP 500,000 - (36) 4,700,000 165 - EUR 2,900,000 1,259 (44) GBP 3,500,000 36 (336) Forward contracts – sell Foreign currency swaps - buy Foreign currency swaps - sell AUD CYN JPY 20,688,068 33 - 1,050,862,321 1,512 (29) HKD 423,790,330 - (531) USD 683,686,726 298,097 (15,686) Spot foreign currency - buy PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 263
  264. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk 2018 Instrument Fair Value Notional amount foreign currency Derivative Commitments (full amount) (Rp million) Derivative Liabilities (Rp million) USD 119,225,000 - (16,305) EUR 2,300,000 - (40) EUR 2,800,000 79 - JPY 6,600,000 3 - Spot foreign currency - sell SGD 100,000 6 - USD 108,691,079 14,956 - 8,550,000 5 (3,834) 23,550,000 3,605 (1,355) 1,862,000,000 156,187 (1,303) 120,028,426 24,964 (20,495) 605,248 (322,028) Foreign currency options – buy USD Foreign currency options – sell USD Related to Interest Rates Swap interest rates USD Related to Exchange Rate and Interest Rates Foreign currency and interest rate swaps USD TOTAL Claims and Liability Derivatives By Type and Currency Tahun 2017 Instrument Notional amount foreign currency (full amount) Fair Value Derivative Commitments (Rp million) Derivative Liabilities (full amount) Exchange Related Forward contracts - buy USD 62,957,000 547 (1,339) 7,796,500 - (1) 199,540,743 856 (1,731) EUR 22,786,049 3,468 (850) USD 677,118,232 7,815 (45,827) AUD 4,400,000 - (570) CNY 26,045,766 326 - EUR 6,967,492 847 (743) Forward contracts – sell JPY USD Foreign currency swaps - buy Foreign currency swaps - sell GBP 9,000,000 - (1,406) USD 1,473,201,692 72,995 (9,860) HKD 9,500,000 - (177) Spot foreign currency - buy 264 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  265. Analisis & Pembahasan Manajemen Tahun 2017 Notional amount foreign currency (full amount) Instrument Fair Value Derivative Commitments (Rp million) Derivative Liabilities (full amount) EUR 220,000 11 - USD 33,500,000 232 - 5,000,000 - (105) 110,000,000 29,015 110,000,000 - (29,015) 110,403,244 23,092 (17,708) 1,775,000,000 77,680 (4,488) 216,884 (113,820) Spot foreign currency - sell USD Foreign currency options – buy USD Foreign currency options – sell USD Related to Exchange Rate and Interest Rates Foreign currency and interest rate swaps USD Interest rates swaps USD Total Receivables and Derivatives Liability by Relationships Keterangan (in million Rupiah) 2018 2017 Tagihan derivatif Pihak berelasi Mata uang asing 56,341 27,361 Pihak ketiga Mata uang asing Total 548,907 189,523 605,248 216,884 41,234 30,630 Liabilitas derivatif Pihak berelasi Mata uang asing Pihak ketiga Mata uang asing Total 280,794 83,190 322,028 113,820 Based on research and evaluation results by the Bank’s management, all derivatives receivable on December 31, 2018 and 2017 were classified as current. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 265
  266. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk IMPACT OF INTEREST RATE CHANGES ON THE BANK PERFORMANCE Beginning in Q1 2018, Bank Indonesia has raised the benchmark interest rate, or the 7-Day Reverse Repo Rate, by 25 basis points due to the pressure on Indonesia’s economic stability from the increase in the Fed Fund Rate, and the increased global uncertainty due to changes in American policy and a number of other geopolitical risks. Bank Indonesia again raised its benchmark interest rate in Q2 and Q3 by a further 25 basis points as a pre-emptive step to strengthen economic stability, especially exchange rate stability against the Fed Fund Rate forecast and increased risks in global financial markets. This impacted the national banking system condition, which was experiencing significant pressure due to the decline in net interest margin (NIM). BNI itself took pre-emptive steps in response to the Bank Indonesia’s benchmark interest rate increase by not raising lending rates, after considering that healthier growth was more important in maintaining the company’s financial assets stability, while at the same time sustaining and encouraging national economic activities in the midst of increasingly competitive business. This resulted in a decline in BNI’s NIM in 2018 to 5.3% compared to 5.5% in 2017 FEE BASED INCOME GROWTH ACCELERATION BNI’s Fee based income in 2018 amounted to Rp9.6 trillion, an increase of 3.3% from Rp9.3 trillion in 2017. The increase was dominated by 4 (four) banking activities including Account Maintenance, Card Business, ATM, and Trade Finance. The increase in fee-based income from Account Maintenance services grew by 10.0% from Rp1.5 trillion in 2017 to Rp1.7 trillion in 2018. Card Business services grew by 9.1% from Rp1.3 trillion in 2017 to Rp1.4 trillion in 2018. ATM services increased by 3.5% or Rp41 billion compared to 2017. In line with the increases in these three services, Trade Finance services also grew by 18.5% from Rp1.0 trillion in 2017 to Rp1.2 trillion in 2018. Fee-based Income Growth  Description Recurring Fee Non Recurring Fee Total 2018 (Billion Rp) 9,379 2017 (Billion Rp) 8,441 2016 (Billion Rp) Growth 2017-2018 (%) Growth 2016-2017 (%) 7,598 11.1 11.1 236 867 576 (72.8) 50.6 9,615 9,308 8,174 3.3 13.9 CAPITAL STRUCTURE AND RISK MANAGEMENT PRACTICES CAPITAL STRUCTURE MANAGEMENT POLICY ON CAPITAL STRUCTURE During 2018 there were corporate actions related to capital additions or changes in the regulatory or accounting treatment of capital, namely the issuance of a Medium Term Note (MTN) of Rp100 billion in the framework of the Recovery Plan. BNI looks to maintain a minimum capital composition or structure that does not violate the minimum limits set Otoritas Jasa Keuangan (OJK) as the banking regulator. CAPITAL STRUCTURE To fulfill its capital requirements in accordance with Basel III, BNI recorded RWA, after loan risk, market risk, and operational risk of Rp563.44 trillion in 2018, an increase of 9.5% compared to December 2017. The RWA increase was in line with BNI’s aggressive asset growth of 14.0% in 2018. Given the importance of capital structure in supporting business expansion, BNI is committed to managing a healthy capital structure to support maximum business growth. 266 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  267. Analisis & Pembahasan Manajemen Capital Adequacy Ratio (CAR) - Bank Only  Description 2018 (Billion Rp) Core Capital Supplementary capital 2017 (Billion Rp) 2016 (Billion Rp) 98,014 89,765 79,645 6,240 5,542 4,634 Total Core Capital and Supplementary Capital 104,254 95,307 84,278 Risk Weighted Assets (RWA) for Credit Risk 491,758 450,706 378,716 68,484 61,393 54,098 Risk Weighted Assets (RWA) for Market Risk 3,198 2,378 2,540 Core Capital Ratio 17.4% 17.5% 18.3% Capital Adequacy Ratio for Credit Risk and Operational Risk 18.6% 18.6% 19.5% Capital Adequacy Ratio for Credit Risk, Operational Risk and Market Risk 18.5% 18.5% 19.4% Risk Weighted Assets (RWA) for Operational Risk Capital Component - Bank Only • Core Capital Core capital is the Bank’s capital comprising the main core capital and additional core capital in accordance with Otoritas Jasa Keuangan Regulation (POJK) concerning “Minimum Capital Requirements for Commercial Banks”. BNI’s core capital grew 9.2% from Rp89.7 trillion to Rp98.0 trillion in 2018. This increase was in line with the increase in current year’s profit in 2018 to Rp14.5 trillion. • Supplementary capital (maximum 100% of core capital) Supplementary capital (referring to bank capital) consists of general reserves for productive assets. BNI’s supplementary capital rose 12.6% from Rp5.5 trillion in December 2017 to Rp6.2 trillion in December 2018, due to additional PPAs (Asset Allowances) formed on loans disbursed with current status, and the issuance of Subordinated MTN recognized as supplementary capital in August 2018. 19.4% 18.3% 18.5% 18.5% 17.4% 17.4% CAR Minimum 9,0% Tier 1 Minimum 6,0% 2016 2017 TIER 1 2018 CAR RISK MANAGEMENT PRACTICES The Bank Rating assessment is reported to the regulator (OJK) every 6 months in June and December. BNI ‘s bank health level assessment result for December 31, 2018 reported a “Healthy” ranking meaning that: a. The Bank’s condition is generally healthy, and it is considered capable of facing significant negative effects from changes in business conditions and other external factors. b. The rating assessment factors (Risk Profile, GCG, Profitability and Capital) are generally good. If there are any weaknesses, they are insignificant. BNI’s risk profile, as one of the health level assessment factors for December 31, 2018, was ranked 2 (low to moderate). As a result and according to calculations using the Internal Capital Adequacy Assessment Process (ICAAP), the minimum CAR based on risk profile was 9.9%. If added with buffer capital, namely Conservation Buffer 1.875%, Countercyclical Buffer 0% and Capital Surcharge 1.125%, then the Minimum Capital Adequacy Ratio limit (KPMM) was 12.9%. In 2018, BNI’s KPMM of 18.5% exceeded the specified minimum limit. Details regarding the capital structure and risk management are presented separately in the Annual Report. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 267
  268. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk ABILITY TO PAY DEBT AND LOAN COLLECTIBILITY ABILITY TO PAY DEBT Up to 2018, BNI’s liquidity and solvency levels were good, showing BNI’s ability to meet all maturing obligations in a timely manner, whether for payment of principal debt or interest expense. Here are the banking financial ratios for measuring BNI’s liquidity and solvency: ABILITY TO PAY SHORT-TERM DEBT (BANK LIQUIDITY) At the end of 2018, BNI’s liquidity level, measured by the Loan to Deposit Ratio, increased 3.2% to 88.8% compared to 85.6% in 2017, due to the rapid loan growth compared to third party funds growth. The liquidity level is still within OJK’s tolerance levels of 85% to 92%. The LDR calculation did not take into account non-conventional funding such as the issuance of Negotiable Certificate Deposits (NCDs) and long-term Bilateral Loans that are used by BNI to fund its loan expansion. ABILITY TO PAY LONG-TERM DEBT (BANK SOLVENCY) In terms of solvency, BNI’s capital adequacy ratio is relatively stable and did not experience significant change in 2018, standing at 18.5%. This indicates that BNI’s capital structure is sufficient to offset loan risk, market risk, and operational risk, as the ratio is higher than the minimum capital adequacy ratio set by BI. LOAN COLLECTIBILITY The non-performing loans (NPL) ratio in 2018 was 1.9%, down 0.4% from 2017. This was due to the growth in quality loans to the State-Owned Enterprises (SOE) sector, and shows a fundamental improvement in the development of loan quality as a whole. LOANS DISBURSED RESTRUCTURING Restructuring is carried out for borrowers who still have business prospects and is selectively carried out, based on the ability of the borrowers. Total restructured loans at the end of 2018 amounted to Rp29.2 trillion, down 4.0% compared to the previous year, with the following details: 1. Restructured Loans with extended maturity amounted to Rp3.5 trillion, down 36.9% from the previous year. 2. Restructured Loans with extended maturity and reduced interest rates amounted to Rp11.6 trillion, down 2.4% from the previous year. 3. Restructured Loans with extended maturity, reduced interest rates, and other restructuring amounted to Rp14.1 trillion, up 8.6% from the previous year. As of December 31, 2018, restructured loans based on collectibility, and classified as current, stood at 40.4%, with special mention at 42.9%, and non-performing loans (NPLs) at 16.7%. By currency, 82.3% of the restructured loans were in Rupiah, while the remainder were in US$. By designation, as of December 31, 2018, restructured loans for Working Capital Loans stood at 57.6%, Investment Loans at 36.8%, and Consumer Loans at 5.6%. By segment, as of December 31, 2018, restructured loans for Corporate stood at 46.3%, Middle at 33.9%, Small at 14.2%, and Consumer at 5.6%. By sector, in 2018, restructured loans were dominated by Manufacturing that stood at 27.2%, restaurant and hotel business at 24.2%, service business at 13.3%, mining business at 8.0%, Agriculture at 7.0%, and the remainder evenly spread across other business sectors. 268 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  269. Analisis & Pembahasan Manajemen Restructured Loans based on Category Restructuring Category 2018 Extension of loan maturity dates 2017 2016 3,521 5,577 5,285 Extension of loan maturity dates and reduction of interest rates 11,583 11,872 11,400 Extension of loan maturity dates, reduction of interest rates and other restructuring programs 14,095 12,977 14,748 Total 29,199 30,426 31,433 Allowance for impairment losses (5,253) (5,367) (4,084) Net 23,945 25,060 27,349 Restructured Loans based on Collectibility Quality 2018 2017 2016 Current 11,790 17,530 21,719 Special Mention 12,537 8,684 6,773 Substandard 1,472 876 858 Doubtful 2,236 489 117 Loss Total 1,164 2,847 1,965 29,199 30,426 31,433 Restructured Loans based on Business Sector – Bank Only Sektor Usaha Business Services Social Services 2018 2017 2016 3,483 2,900  2,849 252 265  325 Construction 1,309 1,065  2,097 Others 1,468 2,038  1,592 514 376  468 1,753 1,752  3,667 Electricity, gas and water Transportation, Warehousing and Trading Restaurant and Hotel 6,286 6,433 5,100 Manufacturing 1,829 2,726  6,175 Mining 7,097 6,171  2,719 Agriculture Total PT Bank Negara Indonesia (Persero) Tbk  2,096 4,319  4,437 26,089 28,044 29,429 Beradaptasi dengan Cepat Menghadapi Perubahan 269
  270. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Restructured Loans based on DesignationType – Bank Only Peruntukan 2018 Working capital loan 2017 2016 15,016 14,058 14,143 Investment loan 9,604 11,948 13,698 Consumer loan 1,468 2,038 1,588 26,089 28,044 29,429 Total Restructured Loans based on Segment – Bank Only Segmen 2018 2017 2016 Consumer 1,468 2,038 1,588 Corporate 12,076 13,297 16,216 Small 3,699 3,775 3,528 Middle 8,845 8,934 8,097 26,089 28,044 29,429 Total RELATED PARTY TRANSACTIONS In the normal course of its business, BNI conducts transactions with related parties through ownership and/or management relationships. All transactions with related parties are conducted in accordance with the agreed upon policies and terms. BNI and its Subsidiaries conduct transactions with related parties as defined in PSAK 7 regarding “Related Party Disclosures” and Bapepam-LK Regulation No. KEP-347/BL/2012 dated June 25, 2012 concerning “Guidelines for the Presentation and Disclosure of Financial Statements of Issuers or Public Companies”, and are defined as: 1. Companies under the control of BNI and its Subsidiaries; 2. Associated companies; 3. Investors who have voting rights, which give them a significant influence; 4. Companies under the control of investors who have voting rights, which gives the investors a significant influence; 5. Key employees and family members; and 6. Entities that are controlled, jointly controlled or significantly influenced by the Government, namely the Ministry of Finance or the Regional Governments who are shareholders of the entity. 270 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  271. Analisis & Pembahasan Manajemen TYPES OF RELATIONSHIP Transactions with related parties are based on the relationship type as shown in the following table: Type of Relationship Relationships as major shareholders The Government of the Republic of Indonesia through the Ministry of Finance Control through the Government of the Republic of Indonesia 1. Adhi Karya and Subsidiaries 58. Kereta Api Indonesia and Subsidiaries 2. Amarta Karya 59. Kertas Kraft Aceh 3. Aneka Tambang and Subsidiaries 60. Kertas Leces 4. Angkasa Pura I and Subsidiaries 61. Kimia Farma and Subsidiaries 5. Angkasa Pura II and Subsidiaries 62. Kliring Berjangka Indonesia 6. ASABRI 63. Krakatau Steel and Subsidiaries 7. ASDP Ferry Indonesia 64. Lembaga Financing Export Indonesia (LPEI) 8. Asuransi Jasa Indonesia 65. LEN Industri and Subsidiaries 9. Asuransi Jasa Raharja and Subsidiaries 66. LKBN Antara 10. Asuransi Jiwasraya 67. Merpati Nusantara Airlines 11. Asuransi Kredit Indonesia and Subsidiaries 68. PAL Indonesia and Subsidiaries 12. Bahana Pembinaan Usaha Indonesia and Subsidiaries 69. PANN and Subsidiaries 13. Balai Pustaka 70. Pegadaian and Subsidiaries 14. Bank Mandiri and Subsidiaries 71. Pelabuhan Indonesia I and Subsidiaries 15. Bank Rakyat Indonesia 72. Pelabuhan Indonesia II and Subsidiaries 16. Bank Savings Negara 73. Pelabuhan Indonesia III and Subsidiaries 17. Barata Indonesia 74. Pelabuhan Indonesia IV and Subsidiaries 18. Berdikari and Subsidiaries 75. Pelayaran Nasional Indonesia and Subsidiaries 19. Bhanda Ghara Reksa and Subsidiaries 76. Pembangunan Perumahan and Subsidiaries 20. Bina Karya 77. Percetakan Negara Republik Indonesia 21. Biofarma 78. Percetakan Uang Republik Indonesia and Subsidiaries 22. Biro Klasifikasi Indonesia 79. Perhutani and Subsidiaries 23. Boma Bisma Indra 80. Perikanan Indonesia 24. BPJS Kesehatan 81. Perikanan Nusantara 25. BPJS Ketenagakerjaan 82. Perkebunan Nusantara III and Subsidiaries 26. Brantas Abipraya 83. Permodalan Nasional Madani and Subsidiaries 27. Bulog and Subsidiaries 84. Pertamina and Subsidiaries 28. Dahana 85. Pertani 29. Damri 86. Perumnas 30. Danareksa and Subsidiaries 87. Perusahaan Gas Negara and Subsidiaries 31. Dirgantara Indonesia and Subsidiaries 88. Perusahaan Listrik Negara and Subsidiaries 32. Djakarta Lloyd and Subsidiaries 89. Perusahaan Pengelola Assets and Subsidiaries 33. Dok and Perkapalan Kodja Bahari 90. Perusahaan Perdagangan Indonesia 34. Dok and Perkapalan Surabaya 91. Pindad and Subsidiaries 35. Garam 92. Pos Indonesia and Subsidiaries 36. Garuda Indonesia and Subsidiaries 93. Primissima PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 271
  272. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Control through the Government of the Republic of Indonesia 37. Hotel Indonesia Natour 94. Pupuk Indonesia Holding Company and Subsidiaries 38. Hutama Karya and Subsidiaries 95. Rajawali Nusantara Indonesia and Subsidiaries 39. IGLAS 96. Reasuransi Indonesia Utama and Subsidiaries 40. Indah Karya 97. Sang Hyang Seri 41. Indofarma and Subsidiaries 98. Sarana Karya 42. Indonesia Asahan Aluminium 99. Sarana Multigriya Finansial 43. Indra Karya 100. Sarinah and Subsidiaries 44. Industri Kapal Indonesia 101. Semen Baturaja 45. Industri Kereta Api and Subsidiaries 102. Semen Indonesia and Subsidiaries 46. Industri Sandang Nusantara 103. Sucofindo and Subsidiaries 47. Industri Telekomunikasi Indonesia 104. Surveyor Indonesia 48. Istaka Karya 105. Tambang Batubara Bukit Asam and Subsidiaries 49. Jaminan Kredit Indonesia 106. Taspen and Subsidiaries 50. Jasa Marga and Subsidiaries 107. Telekomunikasi Indonesia and Subsidiaries 51. Jasa Tirta I 108. Timah and Subsidiaries 52. Jasa Tirta II 109. Varuna Tirta Prakasya 53. Kawasan Berikat Nusantara 110. Virama Karya 54. Kawasan Industri Makassar 111. Waskita Karya and Subsidiaries 55. Kawasan Industri Medan 112. Wijaya Karya and Subsidiaries 56. Kawasan Industri Wijayakusuma 113. Yodya Karya 57. Ministry of Finance Corporate Control Key Management Based on ownership and/or management BNI Pension Fund Asuransi Tripakarta 272 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  273. Analisis & Pembahasan Manajemen TRANSACTIONS Significant transactions with related parties are shown in the following table: Transaction Type Description 2018 2017 (Million Rp) (Million Rp) CURRENT ACCOUNTS WITH OTHER BANKS Bank Mandiri Bank Rakyat Indonesia Total 78,796 1,407,207 112 228 78,908 1,407,434 PLACEMENTS WITH OTHER BANKS AND BANK INDONESIA Bank Mandiri 1,103,975 261,052 Bank Tabungan Negara 538,387 292,534 Bank Rakyat Indonesia 35,222 138,016 - 607,025 1,677,584 1,298,627 LPEI Total SECURITIES Bank Rakyat Indonesia 1,316,320 485,542 Danareksa 930,484 948,009 Bahana Pembinaan Usaha Indonesia 906,213 1,279,920 Bank Tabungan Negara 852,752 163,629 LPEI 827,413 1,784,242 Bank Mandiri 740,081 247,592 Hutama Karya 690,400 - Permodalan Nasional Madani 505,971 300,964 PLN 392,070 40,579 Pegadaian 302,999 1,000 Pelabuhan Indonesia II 285,548 269,225 Waskita Karya 280,484 141,672 Telekomunikasi Indonesia 171,412 1,892 Others 388,082 389,578 8,590,229 6,053,844 Total GOVERNMENT BONDS Government of Indonesia 86,791,402 79,849,452 86,791,402 79,849,452 Waskita Karya 2,773,748 2,372,248 Adhi Karya 2,729,825 2,263,439 Brantas Abipraya 1,511,881 1,240,420 Wijaya Karya 1,118,976 1,033,111 Bank Mandiri 941,616 133,191 Hutama Karya 817,363 728,665 Garuda Indonesia 667,532 - Total EXPORT BILLS AND OTHER RECEIVABLES PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 273
  274. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Description 2018 2017 (Million Rp) (Million Rp) Bank Rakyat Indonesia 402,678 Krakatau Steel 235,672 - Others 508,494 597,035 11,707,785 8,510,551 PLN 1,121,858 1,632,474 Garuda Indonesia 1,078,895 1,530,945 Adhi Karya 811,520 824,332 Pembangunan Perumahan 793,789 432,663 Hutama Karya 530,997 141,396 Pindad 249,080 302,617 Waskita Karya 199,077 - Wijaya Karya 151,949 61,863 Dahana 145,812 73,498 Krakatau Steel 103,992 - LPEI 64,858 15,984 Petrokimia Gresik 63,476 40,485 Nindya Karya 44,448 76,772 Perum Percetakan Negara Republik Indonesia 41,170 15,912 LEN Industri 40,854 42,645 Barata Indonesia 38,662 16,315 Dirganata Indonesia 33,989 40,401 Others 33,625 519,934 5,548,051 5,768,236 46,137 335 8,122 440 Garuda Indonesia - 13,327 PLN - 11,660 Total 142,442 ACCEPTANCES RECEIVABLES Total DERIVATIVES RECEIVABLES Pertamina Krakatau Steel Others 2,058 1,599 56,317 27,361 PLN 14,414,539 18,626,608 Perum Bulog Total LOANS 274 12,599,313 3,815,351 Pertamina 8,888,804 2,251,796 Jasa Marga 7,825,356 5,129,498 Waskita Karya 6,641,236 5,835,011 Telkom 6,191,700 6,228,509 Krakatau Steel 4,583,740 4,131,607 Pegadaian 4,563,915 5,095,844 Semen Gresik 4,300,618 84,912 Petrokimia Gresik 4,108,777 4,360,190 Kementerian Keuangan 3,257,073 2,665,106 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  275. Analisis & Pembahasan Manajemen Description 2018 2017 (Million Rp) (Million Rp) Perkebunan Nusantara III 2,634,126 2,737,673 Perkebunan Nusantara VII 2,222,540 2,165,434 Bukit Asam 1,822,209 2,106,006 Kereta Api Indonesia 1,738,875 1,820,071 Hutama Karya 1,469,190 553,459 Pupuk Indonesia 1,056,335 459,153 Wijaya Karya 1,046,434 1,508,178 Pupuk Iskandar Muda 1,011,972 1,014,000 Rajawali Nusindo 1,108,824 1,094,772 Antam 977,840 - Infrastruktur Telekomunikasi Indonesia 974,873 752,338 Pelabuhan Indonesia I 944,584 461,717 Perkebunan Nusantara XI 924,818 465,949 PAL Indonesia 915,692 888,561 Garuda Indonesia 904,015 1,249,914 Semen Baturaja 863,904 863,904 Angkasa Pura II 700,000 185,985 Permodalan Nasional Madani 679,972 503,328 LEN Industri 638,896 90,267 Pindad 624,403 660,387 Dirgantara Indonesia 589,750 633,703 Pupuk Sriwijaya 561,008 1,066,948 Perum Peruri 541,512 227,765 Perkebunan Nusantara IV 471,189 471,189 Adhi Karya 430,000 249,950 Perkebunan Nusantara V 416,318 513,975 Pos Indonesia 331,861 364,000 Others Total 3,428,721 5,082,440 107,404,932 86,415,499 724,338 724,338 724,338 724,338 87,220,328 87,581,384 243,546 174,696 87,463,874 87,756,080 SHARE INCOME PT PANN Pembiayaan Maritim Total CUSTOMER DEPOSITS Entities controlled by the Goverment of Indonesia Key Management Total DEPOSITS FROM OTHER BANKS Entities controlled by the Goverment of Indonesia 2,968,169 2,246,156 2,968,169 2,246,156 Bank Mandiri 87,503 - Total 87,503 - Key Management BORROWINGS PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 275
  276. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Description 2018 2017 (Million Rp) (Million Rp) SECURITIES ISSUED Bank Rakyat Indonesia 456,854 265,896 Taspen 419,866 - Dana Pensiun BNI 229,927 229,909 Bank Mandiri 148,952 148,941 Others 12,996 229,909 1,268,595 644,746 Bank Mandiri 117,110 271,350 Bank Rakyat Indonesia 100,000 135,675 37,804 - 254,914 407,025 Total BORROWINGS LPEI Total SUBORDINATED SECURITIES Asuransi Tripakarta 24,988 Total 24,988 DERIVATIVE LIABILITIES Bank Mandiri Bank Rakyat Indonesia PLN Others 33,390 11,591 6,913 - - 17,474 931 1,565 41,234 30,630 Pembangunan Perumahan 306,422 184,761 Hutama Karya 280,584 41,963 Pindad 241,525 296,189 Dahana 144,327 76,283 71,483 125,801 Total ACCEPTANCES LIABILITIES Garuda Indonesia Petrokimia Gresik 63,476 40,485 Perum Percetakan Negara Republik Indonesia 41,170 15,912 Wijaya Karya 28,459 26,769 Nindya Karya 14,746 44,350 Krakatau Steel 12,234 60,433 Semen Indonesia 9,821 14,808 Barata Indonesia 8,921 16,315 Cambrics Primissima 5,760 - Boma Bisma Indra 5,620 - LEN Industri 5,573 14,757 Waskita Karya 5,424 12,290 - 118,455 Pertamina Others Total 8,402 71,410 1,253,947 1,160,981 209,056 319,334 209,056 319,334 TEMPORARY SYIRKAH FUNDS – MUDHARABAH CURRENT ACCOUNTS Entities controlled by the Goverment of Indonesia Total 276 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  277. Analisis & Pembahasan Manajemen Description 2018 2017 (Million Rp) (Million Rp) TEMPORARY SYIRKAH FUNDS – Deposits MUDHARABAH Entities controlled by the Goverment of Indonesia Key Management Total 357,052 7,824,499 13,475 18,904 370,527 7,843,403 16,545 9,499 29 23 16,574 9,522 TEMPORARY SYIRKAH FUNDS – MUDHARABAH SAVINGS Entities controlled by Key Management Goverment of Indonesia Total MUDHARABAH SUKUK PUBLISHED Bank Syariah Mandiri - 100,000 Dana Pensiun BNI - 45,000 Bank Rakyat Indonesia Syariah - 68,500 Danareksa - 25,000 Penjaminan Infrastruktur Indonesia - 20,000 Asuransi Tripakarta - 1,000 Total - 259,500 Hutama Karya 3,205,967 3,039,526 Wijaya Karya 2,742,572 2,243,749 Adhi Karya 2,403,442 1,276,520 Pembangunan Perumahan 1,932,559 1,882,482 Pertamina 1,606,975 1,352,499 Rekayasa Industri 1,599,659 1,570,803 Nindya Karya 1,598,651 1,726,262 PLN 1,457,433 806,742 Waskita Karya 1,448,595 1,989,558 Garuda Indonesia 1,372,821 80,295 Telkom 1,350,365 1,477,346 Brantas Abipraya 1,007,708 810,321 Bank Mandiri 891,354 937,064 Petrokimia Gresik 857,687 272,932 Industri Kereta Api 613,723 - LPEI 404,415 1,532,547 Dirgantara Indonesia 280,164 337,725 Kereta Api Indonesia 265,759 1,571 Perum Peruri 255,046 6,580 Perusahaan Gas Negara 246,313 231,016 Barata Indonesia 234,627 34,087 PAL Indonesia 173,127 280,742 LEN Industri 141,693 195,886 Pindad 122,465 14,184 Infrastruktur Telekomunikasi Indonesia 102,274 195,928 98,466 80,724 BANK GUARANTEES ISSUED Rajawali Nusindo Semen Indonesia Others Total PT Bank Negara Indonesia (Persero) Tbk  91,834 90,865 418,883 1,275,440 26,924,576 23,743,394 Beradaptasi dengan Cepat Menghadapi Perubahan 277
  278. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Description 2018 2017 (Million Rp) (Million Rp) LETTERS OF CREDIT PLN 1,328,363 975,941 Kereta Api Indonesia 1,038,299 678,194 Pembangunan Perumahan 850,133 611,572 Industri Kereta Api 766,065 - Krakatau Steel 688,541 339,279 Hutama Karya 633,118 65,275 Pertamina 614,719 635,584 Pindad 544,579 315,440 Pelabuhan Indonesia I 287,648 532,690 Barata Indonesia 241,207 36,595 LEN Industri 146,001 420,885 Semen Gresik 139,734 86,825 Dahana 127,152 148,850 Garuda Indonesia 120,095 26,073 Nindya Karya 119,760 87,740 79,848 73,746 Dirgantara Indonesia 69,782 365,684 Pupuk Iskandar Muda 62,154 28,686 Petrokimia Gresik 50,334 239,582 Semen Indonesia 49,340 - Perkebunan Nusantara V Adhi Karya 46,480 - Wijaya Karya 34,528 25,909 Others 131,956 965,181 Others 8,169,836 6,659,731 372,017 366,540 372,017 366,540 SALARIES AND BENEFITS Salaries, benefits and long-term benefits for the Board of Commissioners, Board of Directors, Audit Committee, Executive Vice President and Senior Vice President Total 278 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  279. Analisis & Pembahasan Manajemen In addition, transactions balances with related parties as of December 31, 2017 and 2018 were as follows: Transactions with Related Parties Description 2018 2017 Assets Current Accounts with other banks 78,908 1,407,434 Placements with other banks 1,677,584 1,298,627 Securities 8,590,229 6,053,845 Government Bonds 86,791,402 79,849,452 Export Bills and other Receivables 11,707,785 8,510,551 5,548,051 5,768,236 56,317 27,361 107,404,932 86,415,498 724,338 724,338 Total assets with related parties 222,579,546 190,055,342 Total consolidated assets 808,572,011 709,330,084 27.5% 26.8% Acceptances Receivables Derivatives Receivables Loans Investments in shares Percentage of total assets with related parties to total consolidated assets Liabilities Customer Savings 87,463,874 87,756,080 Deposits from other bank 2,968,169 2,246,156 Securities issued 1,268,596 644,745 24,988 - Subordinated Securities Securities sold under agreement to repurchase 739,103 - Borrowings 254,914 407,025 Derivatives liabillities Acceptances Liabilities Total liabilities with related parties Total consolidated liabilities Percentage of total liabilities with related parties to total consolidated assets 41,234 30,630 1,253,947 1,160,981 94,014,825 92,245,617 671,237,546 584,086,818 14.0% 15.8% 596,157 8,172,259 - 259,500 Temporary Syirkah Funds Mudharabah savings Mudharabah Sukuk Total temporary Syirkah funds with related parties Total temporary Syirkah funds Percentage of Temporary Syirkah Funds with related parties to total consolidated Temporary Syirkah Funds PT Bank Negara Indonesia (Persero) Tbk  596,157 8,431,759 26,960,676 24,339,962 2.2% 34.6% Beradaptasi dengan Cepat Menghadapi Perubahan 279
  280. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk MATERIAL TRANSACTIONS INFORMATION WITH CONFLICTS OF INTEREST AND/OR TRANSACTIONS WITH AFFILIATED PARTIES During 2018, BNI did not have any material transactions with a conflict of interest. Names of Transacting Parties and the Nature of Affiliate Relationship During 2018, BNI did not conduct material transactions that contained conflicts of interest. Explanation of Fairness of Transactions During 2018, BNI did not conduct material transactions that contained conflicts of interest. Reasons for the Transactions During 2018, BNI did not conduct material transactions that contained conflicts of interest. Realization of Affiliated Transactions in the Last Fiscal Year Period During 2018, BNI did not conduct material transactions that contained conflicts of interest. Company Policy Related to the Transaction Review Mechanism During 2018, BNI did not conduct material transactions that contained conflicts of interest. Compliance with Regulations and Related Provisions During 2018, BNI did not conduct material transactions that contained conflicts of interest. PROHIBITIONS, LIMITATIONS, AND / OR SIGNIFICANT BARRIERS TO TRANSFER FUNDS BETWEEN THE BANK AND OTHER ENTITIES IN THE BUSINESS GROUP In 2018 the total provision of funds to related parties amounted to Rp5.4 trillion. This was still in accordance with the maximum lending threshold based on Bank Indonesia Regulation Number 8/13/PBI/2006 concerning the Legal Lending Limit for Commercial Banks, which set a maximum of 10% of Bank Capital. In 2018, the three highest provision of funds to related parties were to BNI Syariah for Rp2.5 trillion, in the form of bank participations and guarantees, BNI Asset Management for Rp1.8 trillion, and BNI Multifinance for Rp491 billion for participations, loans, and corporate cards. Total Bank Funds Provided For Related Parties Up To December 2018 Description Billion Rp Total exposure to related parties 5,379 Capital 104,254 BMPK (10% of Capital) 10,425 Over (Under) to BMPK (5,046) Total Bank Funds Provided For Related Parties up to December 2018 by Type No 1 280 Related Party BNI Asset Management Type of Funds Provision Securities Beradaptasi dengan Cepat Menghadapi Perubahan  Funds Provision (Billion Rp) 1,814 PT Bank Negara Indonesia (Persero) Tbk
  281. Analisis & Pembahasan Manajemen No Related Party Funds Provision Type of Funds Provision (Billion Rp) 2 BNI Syariah Participations, Bank Guarantees 2,520 3 BNI Multifinance Participations, Loans, Corporate Card 491 4 BNI Life Insurance Participations, Corporate Card, Bank Guarantees 399 5 BNI Sekuritas Participations, Loans, Corporate Card, Bank Guarantees 100 6 BNI Remittance Participations 7 Perseorangan Consumer Loans, Credit Card 10 45 TOTAL FUNDS PROVISION TO RELATED PARTIES 5,379 CAPITAL 104,254 BMPK (10% of Capital) 10,425 SPACE / Over (Under) (5,046) PROPERTY FOR INVESTMENT As of the end of 2018, BNI had no property assets for investment. MATERIAL COMMITMENTS FOR CAPITAL GOODS INVESTMENTS Party Name Tied to The Commitment No Project Vendor Name 1 Penjompongan Building • • PT Pembangunan Perumahan (PP) PT Artefak 2 BSD Building • • • • • • • • • • PT Wika PT Advanced Design Rekragraha Omega Moverindo Sukses Inti Fajar Pratama PT Sari Jati Adhitama PT Indovickers Furnitama PT Kencana Arind Murni PT Alpha Graha Computindo PT Mitrasindo Jayatama PT Ananta Cipta Pratama 3 BNI KC Surabaya Building PT Inti Indah 4 BNI KC PS Mayestik Building • • PT Architeam Design Center PT Tunas Pembagunan 5 BNI KC Kotabaru P. Laut Building • • PT Indah Karya PT Tunas Pembagunan • • • • • • • • • • PT Decorous Mitra Selaras PT Datascrip PT Vivere Multi Kreasi PT Indah Karya PT Protindo Cipta Kreasi Lestari PT Perintis Dinamika Multiniaga PT Swadharma Griyasatya PT Perintis Dinamika Sekatama CV Minda Mandiri Perkasa PT Anugrah Lestari Abadi COMMITMENT PURPOSE BNI material commitments for capital expenditure are outlined in the Bank Business Plan (RBB). CURRENCY All transactions conducted for material capital expenditures are denominated in rupiah. SOURCE OF FUNDS Funds used for capital expenditure is derived from BNI capital that has been budgeted for in the current year. CURRENCY RISK PROTECTION Because all binding transactions and capital expenditures were denominated in Rupiah, BNI does not need to protect against currency risk. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 281
  282. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk VALUE OF COMMITMENTS BNI has capital goods commitments related to the construction of office buildings and the procurement of automation equipment amounting to Rp 2.1 trillion for capital expenditure. BNI has made several material commitments, with material ties as follows: 1. Building Construction Projects a. Continuing construction of the Penjompongan Building in 2017 amounting to Rp421 billion. b. Continuing construction of the BSD Building in 2017 amounting to Rp70.6 billion. c. Purchase of office space at Satrio Tower (Jakarta Senayan Area) amounting to Rp. 71.5 billion. d. Purchase of land and buildings for KC Kelapa Gading amounting to Rp72.8 billion. e. Purchase of land and building of KCP Dewi Sartika amounting to Rp47 billion. 2. 2. IT and e-Banking infrastructure Development a. ATM Cash Recycle Machines (CRM) amounting to Rp 109 billion. b. Electronic Data Capture Machines (EDC) amounting to Rp 81.2 billion. c. Consolidation Server Surrounding amounting to Rp41.7 billion. d. Consolidation Unix platform for the Data Center amounting to Rp14.7 billion. e. E-branch implementation amounting to Rp7.5 billion. f. Service Oriented Architecture (SOA) Enhancement amounting to Rp16.3 billion. g. Core IT Icons Overseas Branches amounting to Rp25.2 billion. SOURCE OF FUNDING Sources of funding for capital expenditure is derived from the remaining investment budget from last year, total amortization expenses last year, and share / percentage of net profit from the preceding financial year. CAPITAL GOODS INVESTMENTS Capital Investment is an expenditure activity used to purchase fixed assets or to add fixed asset value, which is expected to provide future benefit value. TYPE OF INVESTMENT Capital goods investments in 2018 amounted to Rp1.4 trillion, and consisted of automation equipment of Rp742 billion, land purchases and building construction of Rp.478 billion, nonautomated equipment purchases of Rp163 billion and vehicle procurement of Rp42 billion. CAPITAL GOODS INVESTMENT OBJECTIVE The purpose of capital goods investments is to support operational activities, as well as smooth company operations. CAPITAL GOODS INVESTMENT VALUE BNI’S capital expenditure in 2018 amounted to Rp1.4 trillion, similar to last year. Investment in 2018 was dominated by capital goods such as automation equipment used for the IT infrastructure development, network and technology expansion, digital banking development to facilitate customer transactions, and the procurement of ATM, CRM and EDC machines to support the business. 282 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  283. Analisis & Pembahasan Manajemen Details related to capital investments are outlined in the table below: Capital Goods Investment Value 2018 (Billion Rp) Capital Goods Type Buildings 2017 (Billion Rp) 2016 (Billion Rp) 408 802 713 70 150 122 Automation 742 622 848 Non-Automation 163 219 195 Land Vehicles Total 42 25 8 1,425 1,818 1,886 COMPARISON OF TARGET AND REALIZATION 2018 TARGET ACHIEVEMENT The domestic political turmoil and global economic slowdown had an indirect impact on BNI’s growth as a whole, this was predicted by BNI last year and preventive measures had been taken to survive in middle of the rapid flow of competition. By December 2018, BNI’s profit had grown 9.6% to Rp15.0 trillion compared to Rp13.6 trillion in 2017. BNI’s assets grew by 14.0% from Rp709.3 trillion in 2017 to Rp808.6 trillion in 2018, with asset growth bolstered by loan growth of 16.2% to Rp512.8 trillion, followed by the third party funds growth of 12.1% to Rp578.8 trillion, with an LDR of 88.8%. As a form of risk mitigation, BNI increased its coverage ratio from 148.0% in 2017 to 152.9% from 2018. 2018 Strategic Policy 2018 Target Increase business to customers in Ministries, Institutions, SOEs, and Corporations through comprehensive financial solutions Increase medium business in industries based on regional priorities Strengthen small business through optimization of Supply Chain Financing Corporate, Communities/Business Center Customers, to support Government programs Increase CASA with a digital business model focus for closed loop transactions and to optimize customer transactions Strengthen consumer business in cooperation with business partners and provide financial transaction solutions with a focus on e-commerce and the millenial generation. Increase outlet performance by strengthening marketing penetration for TPF and lending Increase subsidiary market share with enhanced synergy, digital development, and inorganic growth.  - ROA : 2.6 - 2.8% - ROE : 16.0 -18.0% - Growth in loans : 15.0 – 17.0% - Coverage Ratio : 150.0 - 153.0% - NPL Gross : 2.3 -2.5% - LDR : 88.0 - 90.0% - DPK Growth : 13.0 – 15.0% - CIR : 42.0 - 44.0% - Service Level : Top 3 Optimizing organizational capacity to support business achievement. In general, as of December 2018, BNI returned a satisfactory performance, as seen in the following key performance achievements: 1. Profitability as measured by ROA reaching its target with a realization of 2.5% - 2.8%. 2. Coverage Ratio reaching its target with a realization of 146-148%. 3. Third Party Fund Growth reaching its target with a realization of 18.0-22.0%. 4. Improved operational efficiency with CIR of 43.9%. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 283
  284. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk 2019 PROJECTIONS In terms of business planning for 2019, the Company has prepared a Bank Business Plan (RBB) for 2019 that takes into account current economic conditions, and economic projections for 2019, in both macro and micro terms. The bank’s business plan is described as follows: Assumptions used in preparing projections were as follows: No 2018 Strategic Policy Proyeksi 2019 1 Increase in corporate business by providing integrated financial solutions in a business ecosystem. 2 Increase in productivity of medium businesses focused on corporate customer supply chains, business process improvements, and loan quality improvement. 3 Increase in small business expansion through digitized business processes, improved loan quality and support for national economic equity. 4 Acceleration of consumer business focused on customer preferences by using data analytics. 5 Increase in CASA and FBI through increased digital transactions, strategic partnerships and developing new business models. 6 Increase the BNI Group capabilities through increased synergy, agile organization initiation, and big data and analytics. Return on Assets (ROA) : 2,5% - 2,8% Return on Equity (ROE) : 16,0% - 17,0% Pertumbuhan Pinjaman : 14,0% - 16,0% Coverage Ratio (CR) : 161,0 % - 163,0% Non Performing Loan (NPL) Gross : 1,8% - 2,0% Loan to Deposit Ratio (LDR) : 88,0% - 89,0% Pertumbuhan Dana Pihak Ketiga (DPK) : 16,0% - 17,0% Cost to Income Ratio (CIR) : 42,0% - 43,0% NEGOTIABLE CERTIFICATE DEPOSIT (NCD) TOTAL FUNDS ACQUISITION BNI has issued scriptless Rupiah Negotiable Certificate of Deposits (NCD) in 2016 and 2017 in the following three stages: 1. In the first semester of 2016, BNI issued scriptless Rupiah NCDs for the first time for Rp3.0 trillion, with an initial target of Rp trillion, in 6 tenor series (6 months to 3 years). 2. In the second semester of 2016, BNI issued scriptless Rupiah NCD for Rp.2.2 trillion, with an initial target of Rp1 trillion (oversubscribed). This oversubscription shows the high level of investor confidence and interest in BNI. 3. In the first semester of 2017, BNI issued scriptless Rupiah NCD for Rp2.7 trillion. Issue Phase Date Currency Principal Amount Average Rate 1 June 16, 2016 IDR 3,023 2,598 8.2% 2 September 27, 2016 IDR 2,200 1,877 6.7% 3 March 10, 2017 IDR 2,700 2,483 7.0% FUND BALANCE As of December 31, 2018, the outstanding balance for the NCD funds amounted to Rp939 billion. 284 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  285. Analisis & Pembahasan Manajemen USE OF PUBLIC OFFERING PROCEEDS REALIZATION SUSTAINABLE PUBLIC OFFERING (PUB) On June 22, 2017, BNI received an effective statement from OJK through letter No. S-349/D.04/2017 to issue BNI Rupiah Phase I 2017 Sustainable Bonds (“Bonds”). The value of the bonds issued was Rp3,000,000,000,000 (three trillion Rupiah), for a period of 5 years, with a coupon of 8% per annum, to be paid quarterly. BNI’s bonds were issued on July 11, 2017 and listed on the Indonesia Stock Exchange on July 12, 2017. Information Regardingthe Bonds Offered Bond Name Obligasi Berkelanjutan I BNI Phase I Year 2017 Bond Principal Amount Rp3,000,000,000,000 (three trillion Rupiah) Bid Price 100.00% from Bond Principal Amount Maturity 5 (five) years after date of issuance Trading Unit Rp1 (one Rupiah) or multiples Unit /Trading Rp5,000,000 (five million Rupiah) or multiples Bond Interest Rate 8.00% (eight point zero zero percent) per year. Type of Interest Rate Fixed Interest Payment period Quarterly Interest Date First October 11, 2017 Warranty These bonds are not secured by special collateral, but are secured by all of the Company assets, both movable and immovable property, whether existing or future, that becomes collateral for the Bondholder in accordance with the provisions of Articles 1131 and 1132 of the Civil Code. The Bondholder right is paripassu without any preferential rights with the rights of the other creditor of the Company either present or in the future, except for the rights of the creditor of the Company which are specifically guaranteed with the Company’s assets either existing or future Securities Rating idAAA (triple A) from Pefindo. Bond Settlement Fund (Sinking Fund) The Company does not provide a sinking fund for the bond principal repayment with a view to optimizing the use of the proceeds from the issue in accordance with the planned usage purpose. Repurchase (Buy Back) These bonds have a repurchase (buy-back) option under the terms and provisions of the Trusteeship Agreement. Trustee PT Bank Rakyat Indonesia (Persero) Tbk has been appointed as Trust Agent in the issuance of this Bond in accordance with the provisions contained in the Trustee Agreement USE OF FUNDS PLAN THE PUBLIC OFFERING The proceeds from the Public Offering of Bonds, after deducting the total issuing costs, will be used by the Company for loan expansion in the context of business development. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 285
  286. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk REALIZATION AND INTEREST PAYMENT SCHEDULE PUB Issuance Realization Type of Public Offering Effective Date in trillion Rupiah Public Offering Realization Result Public Offering Total I BNI Phase I 2017 Bond June 22, 2017 Rp 3 Public Offerin Expenses Rp 0,0074 Funds Usage Plan Net Result Credit Expansion Rp 2.992 Rp 2.992 Total Rp 2.992 Funds Usage Credit Expansion Rp 2.992 Total Rp 2.992 Public Offering Residual Funds Public Offering Expenses - Interest Payment Table 286 Interest Bond Interest Payment Date Interest 1 October 11, 2017 8% 2 January 11, 2018 8% 3 April 11, 2018 8% 4 July 11, 2018 8% 5 October 11, 2018 8% 6 January 11, 2019 8% 7 April 11, 2019 8% 8 July 11, 2019 8% 9 October 11, 2019 8% 10 January 11, 2020 8% 11 April 11, 2020 8% 12 July 11, 2 8% 13 October 11, 2020 8% 14 January 11, 2021 8% 15 April 11, 2021 8% 16 July 11, 2021 8% 17 October 11, 2021 8% 18 January 11, 2022 8% 19 April 11, 2022 8% 20 July 11, 2022 8% Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  287. Analisis & Pembahasan Manajemen SUBORDINATED MTN BNI issued Subordinated Medium Term Notes (MTN) with the aim of strengthening its supplementary capital (tier 2) and working capital in the context of business development, especially for loan disbursements, and increasing the composition structure of long-term funding, in accordance with OJK Regulation No. 11/POJK.03/2016 concerning Minimum Capital Requirement for Commercial Banks as amended by OJK Regulation No. 34/POJK.03/2016. This Subordinated MTN is not guaranteed by any special collateral, including not guaranteed by the company or subsidiaries, the Republic of Indonesia or other third parties, and is not included in the bank guarantee program in the deposit insurance agency, in accordance with applicable laws and regulations, and following the provisions in Article 19 Paragraph (1) point f in pojk no. 11/pojk.03/2016 and is a subordinated liability of the company, in accordance with the provisions of the Subordinate MTN issuance agreement. The rights of Subordinated MTN holders are junior to the rights of other corporate creditors. DESCRIPTION OF SUBORDINATION MTN OFFERED The Subordinated MTN was issued in the amount of Rp 100,000,000,000.00 (One Hundred Billion rupiahs) with a coupon payment period of 8% p.a every 3 months (quarterly), based on the interest calculation of 30/360 with a tenor of 5 years. Name : Medium Term Notes Subordinasi I BNI Tahun 2018 Principal Amount : Rp100,000,000,000 (one hundred billion Rupiah) Bid Price : 100.00% from MTN Subordinasi principal value Maturity : 5 (five) years from date of issue Bond Interest Rate : 8.00% (eight point zero zero percent) per annum. Type of Interest Rate : Fixed. Interest Payment Period : Quarterly. First Interest Payment Date : November 10, 2018. Warranty : This Subordinated MTN is not guaranteed by any special collateral, including not guaranteed by the company or subsidiaries, the Republic of Indonesia or other third parties, and is not included in the bank guarantee program in the deposit insurance agency, in accordance with applicable laws and regulations, and following the provisions in Article 19 Paragraph (1) point f in pojk no. 11/pojk.03/2016 and is a subordinated liability of the company, in accordance with the provisions of the Subordinate MTN issuance agreement. The rights of Subordinated MTN holders are junior to the rights of other corporate creditors at the time of liquidation in accordance with the applicable laws and regulations. Securities Rating : PT Bank Negara Indonesia (Persero) Tbk  AA (double A flat) ) from PT Pemeringkat Efek Indonesia (Pefindo). id Beradaptasi dengan Cepat Menghadapi Perubahan 287
  288. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk GENERAL BOND OFFER (GLOBAL BOND) USE OF PUBLIC OFFERING PROCEEDS REALIZATION TOTAL ACQUISITION FUND On April 27, 2012, through the BNI London Branch, BNI issued bonds with a nominal value of US$500 million that will mature on April 27, 2017. The bonds may be repaid in whole, but not in part, for the principal with deferred interest and unpaid interest, if any, at the option of the bonds issuer at any time in the event of certain changes that could affect taxes in Indonesia. The bonds were issued at a price of 98.89% equivalent to US$494.4 million and were registered with the Singapore Exchange Securities Trading Limited (SGX-ST). From the total amount received of US$494.4 million, a total of US$400 thousand was used for the cost of issuing the bonds. On November 25, 2010, at the Extraordinary General Meeting of Shareholders (EGMS), the Shareholders decided to approve an increase in BNI’s issued and fully paid capital through a Limited Public Offering III (PUT III) with the issuance of Preemptive Rights (HMETD) amounting to 3,374,715,948 new C Series shares with a nominal value of Rp375 (full amount) of each share. The Preemptive Rights can be traded inside and outside the Indonesia Stock Exchange (IDX) from December 10, 2010 to December 16, 2010, taking into account the applicable provisions in the capital market sector. FUNDS USE PLAN The net proceeds from the bonds issuance will be used by the Bank as an additional source of funding for the Bank’s overseas branches, and for the Bank’s general funding purposes. These bonds were a direct, unconditional obligation (subject to the terms and conditions below), without guarantee from the Bank, and were rated as pari passu (unless there were certain legal provisions requiring preference), and were equivalent to unsecured liabilities that from time to time remain unpaid. There is no negative covenant in the Company’s trustee contract with HSBC for the issuance of the Global Bond securities, which would limit the Company from conducting a Sustainable Public Offering of Rupiah Sustainable Bonds. The company always adheres to the debt terms and conditions, where semi-annual coupon payments are always made by the Company on time. TOTAL EXTENSION OF FUNDS From the PUT III, BNI obtained additional paid-in capital of Rp1,265,519 million and additional net shares after deducting the issuance costs of shares, amounting to Rp245,231 million. FUNDS USE PLAN Funds sourced from the Rights Issue III were used for: 1. 80% for corporate, medium-sized businesses, small businesses and consumer loans 2. 15% for infrastructure development in information technology, outlets, ATMs and others 3. 5% for the development of subsidiaries, namely BNI Life, BNI Syariah, BNI Securities and BNI Multi Finance. FUNDS BALANCE As of December 31, 2018, the proceeds from the Rights Issue III amounted to zero or in other words 100% of the funds had been disbursed. FUNDS BALANCE This debt matured on April 27, 2017. INTEREST PAYMENT SCHEDULE OF BONDS The interest rate of 4.13% per annum was paid every six months on April 27 and October 27 each year, starting on October 27, 2012. 288 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  289. Analisis & Pembahasan Manajemen AGM AGREEMENT DATE FOR AMENDMENT TO THE USE OF FUNDS There has been no change in the use of funds from BNI Rights Issue III. Actual Use of Funds from Limited Public Offering III Realization of Funds Usage from Limited Public Offering III Net Value of Public Offering Result Realization (net of expenses) Rp10,216,388,163,029 Realization of founds usage About 80% is used for Corporate, Medium Enterprise, Small Business and Consumption distribution per December 31, 2014 Per 31 Desember 2014 Rp 8,173,110,530,423 About 15% is used for infrastructure development in information technology, outlets, ATMs and others Per 31 Desember 2014 Rp1,532,458,224,454,- About 5% is used for the development of subsidiaries, they are BNI Life, BNI Syariah, BNI Sekuritas and BNI Multi Finance Per 31 Desember 2014 Rp510,819,408,152,- Residual Fund Usage Nihil DIVIDEND POLICY DIVIDEND DISTRIBUTION POLICY The annual dividend policy is determined through the approval of the General Meeting of Shareholders. TOTAL DIVIDENDS DISTRIBUTED In 2018, BNI distributed dividends from the Company’s net profit of Rp4,765,766,513,174.80 or Rp255.555488 per share, or 35% of the Company’s net income in 2017. PENGUMUMAN DAN PEMBAYARAN DIVIDEN Announcement and Payment of Dividend Fiscal Year Total Dividend (billion Rupiah) Dividend Per Share (Rupiah) 2017 4,765,76 255.555488 2016 3,968,56 2015 2,266,64 Date of Announcement Dividend Payment Date 35% of 2017 net income March 20, 2018 April 20, 2018 212.806849 35% of 2016 net income March 20, 2017 April 20, 2017 122.533827 25% of 2015 net income 5 March 14, 2016 April 13, 2016 PT Bank Negara Indonesia (Persero) Tbk  Pay Out Ratio Beradaptasi dengan Cepat Menghadapi Perubahan 289
  290. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk MANAGEMENT AND/OR EMPLOYEE SHARE OWNERSHIP PROGRAM (ESOP/ MSOP) PROGRAM OBJECTIVES The employee bonus program is a program where Bank shares are granted to employees who meet certain criteria and requirements as stipulated in the Program Implementation Guidelines. The purpose of this employee share bonus program is: 1. To establish long-term employee retention. 2. To motivate employees to provide their best performance. 3. To increase employees’ sense of belonging to the Bank. TOTAL ESOP OR MSOP SHARES AND REALIZATION Taking into account point 4, letter a, number 3, of Regulation No. XI.B.2 jo. Article 9 of the OJK Regulation No. 2/POJK.04/2013, a share buyback may be diverted / used for the an Employee Stock Option Plan or employee Stock Purchase Plan, and the Company conducted a Disclosure of Information on May12,2016 stating that they will conduct the transfer of Series C shares through a buyback Shareholding Program, for the Company’s Management and Employees, in the form of Bonus shares (hereinafter referred to as “Bonus Shares Program “). Supervision of the Shares Bonus Program is carried out by the Company’s Board of Directors and reported at the Company’s General Meeting of Shareholders closest to the implementation of the program. The bonus shares allocation to members of the Board of Directors, and the Board of Commissioners, is in accordance with the Minister of State-Owned Enterprises Regulation No. Per-04/MBU/2014 concerning Guidelines for Determination of Board of Directors, Board of Commissioners and Board of Trustees of State Owned Enterprises, and was conducted after the Company obtained approval from the General Meeting of Shareholders / Ministry of SOEs. Based on the Minutes of AGMS No. 8 dated March 10, 2016, the allocation of bonus shares to members of the Board of Directors and Board of Commissioners was carried out after obtaining the approval of the Minister of SOEs. Allocation of the first phase for employee was completed in 2016, and employees entitled to be participants in the Bonus Share Program, were permanent employees as at October 30, 2016 (Disclosure date). Employees declared eligible for vesting were notified by email, or other communication media, which contained confirmation of the bonus shares entitlement and the vesting date. The vesting conditions were determined as follows: 1. Not undergoing cases and / or being subject to sanctions according to the applicable 
Bank Personnel Regulations; 2. Has not terminated their employment relationship on their own accord; or 3. Has not ended their employment relationship due to low performance. As of December 2018, 35,349,718 shares have been vested to 20,289 employees. TIME PERIOD The share bonus allocation will be conducted over 3 (three) years between 2016 - 2018, with periodic vesting of stock. 1. The terms for the share bonus allocation and vesting requirements for employees covers other performance and administrative requirements based on internal company requirements. 2. Vesting will be conducted periodically based on position level at the end of January, April and July 2017 - 2019. EMPLOYEE OR MANAGEMENT REQUIREMENTS The Bonus Shares Program became part of the remuneration pursuant to the Ministry of State Owned Enterprises Decree No. Per-04/MBU/2014 concerning Guidelines for Determination of Board of Directors, Board of Commissioners and Board of Trustees of State Owned Enterprises, in the form of long-term rewards where the shares repurchased were allocated to: 1. Employees as a bonus for achievement of company performance, and 2. Members of the Board of Directors, and the Board of Commissioners as part of the bonus for the fiscal year concerned. Ministry of SOE Letter No. S-574/MBU/D5-06/2018 dated June 5, 2018 fixed the determination Long Term Incentive (LTI) at 10% of the Board of Directors and Board of Commissioners Tantiem for Fiscal Year 2017. LTI is given in the form of shares deferred for three years or until the end of the term of office. This provision is not given to Independent Commissioners, where LTI is given in cash where the payment is deferred for three years or until the end of the term of office. 290 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  291. Analisis & Pembahasan Manajemen EXERCISE PRICE Referring to the Financial Services Authority Regulation (OJK) No. 02/POJK.04/2013 dated August 23, 2013 concerning Repurchase of Shares Issued by Issuers or Public Companies in Significantly Fluctuating Market Conditions, and No. 5/SEOJK.04/2017 concerning Revocation of SEOJK No. 22/SEOJK.04/2015 concerning Conditions Other than Significantly Fluctuating Market Conditions in the Implementation of Share Buy Back Issued by Issuers or Public Companies, BNI conducted repurchases of Company’s shares that had been issued and listed on the Indonesian Stock Exchange (Buy Back) .BNI appointed PT BNI Sekuritas as the institution conducting the repurchase of the Company’s shares to purchase shares over a period of three months, starting from November 2, 2016 to December 28, 2016. The number of shares bought back was equal to 0.8% of the issued and fully paid, or 150,537,500 shares. The Company’s repurchased shares amounted to Rp749,979,275,500.00 (maximum of 750 billion rupiah) and the average Buyback price amounted to Rp4,982.00 per share. After the Company shares repurchase, the Company conducted a Disclosure of Information on October 30, 2016. These repurchased shares were redistributed to employees who met the criteria, with an exercise price of Rp4.982,00 per share. LOANS BASIC LENDING RATE Bank Indonesia requires all Commercial Banks conducting conventional business activities in Indonesia report and publish their Basic Lending Rate (BLR) in Rupiah. This was in accordance with POJK No. 6/ POJK.03/2015 concerning Transparency and Publication of Bank Reports as amended by POJK No. 32/ POJK.03/2016 and Bank Indonesia Regulation Number 7/6/PBI/2005 concerning Transparency of Bank Product Information and Use of Customer Personal Data (State Gazette of the Republic of Indonesia of 2005 Number 16, Supplement to the Republic of Indonesia State Gazette Number 4475). The application of information transparency on prime lending rates (PLR) is one of the efforts to provide clarity to customers and enable customers to weigh the benefits, costs and credit risk offered by the Company. In addition, the PLR also seeks to improve good governance and encourage healthy competition in the banking industry, including through the creation of better market discipline. The PLR is also required as an indicator of the loan interest rate to be applied to customers applying for loans from the Company. In such cases, BNI always republishes its PLR, in accordance with the reference rate movement stipulated by Bank Indonesia. In general, the PLR is calculated based on 3 (three) components, namely Cost of Funds for Loans arising from customer fund raising activities, operating expenses incurred for fund raising activities, and lending and profit margin components set by the Company in its lending activities. The PLR calculation does not take into account the risk premium component of the borrower, which depends on an assessment of the risk of each borrower. Therefore the loan interest rate charged to the borrower is not necessarily the same as the PLR. BNI are required to report PLR calculations to Bank Indonesia on a monthly basis, and periodically publish them in the wider media. The PLR calculation applies to corporate loans, retail loans, microcredit, and consumer loans (mortgages and non-mortgages). Bank Indonesia submits the classifications for corporate loans, retail loans and consumer loans (mortgages and non-mortgages) based on internal criteria used by the bank. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 291
  292. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk When determining the PLR, the Company always considers the changing regulatory policies. In 2016, OJK issued Letter No.S18/D.03/2016 concerning Maximum Interest Rates. In the letter, OJK also submitted a directive to lower lending rates gradually until they reached single digits by the end of 2016. Related to this, the Company was committed to lowering its loan interest rate incrementally, which can be seen in the PLR ratio in 2016 and the average PLR in 2015 as follows: (% per year)   Prime Lending Rate Based on Business Segment Corporate Loans Suku Bunga Dasar Kredit (Prime Lending Rate) Retail Loans Micro Loans 9,95 N/A 9,95 Consumer Loans KPR Non KPR 10,50 12,50 SIGNIFICANT CHANGES IN THE BANK AND BANK GROUP IN THE CURRENT YEAR There were no significant changes that occurred in the Bank and the Bank Group up to December 2018 that affected BNI’s financial position. INVESTMENTS, EXPANSIONS, DIVESTMENTS, ACQUISITIONS, OR DEBT AND CAPITAL RESTRUCTURING MATERIAL INFORMATION INVESTMENTS During 2018, BNI did not engage in investment activities. EXPANSIONS During 2018, BNI did not engage in expansion activities. DIVESTMENTS During 2018, BNI did not engage in divestment activities. ACQUISITIONS During 2018, BNI did not engage in acquisition activities. DEBT AND CAPITAL RESTRUCTURING During 2018, BNI did not engage in debt and capital restructuring activities. 292 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  293. Analisis & Pembahasan Manajemen TAX CONTRIBUTION TO THE STATE BNI’s contribution to the State includes fulfilling its obligations as a taxpayer, and as a tax collector. As a taxpayer, the largest contribution is to fulfill its corporate tax obligations. As a tax collector, BNI plays an active role in deducting taxes on all taxable items. BNI is always on time in paying its tax obligations for Corporate Tax, Employee Income Tax, VAT, and Land and Building Tax. BNI also submits annual and monthly tax returns, as well as obligatory documents to regulatory agencies in a timely manner. Corporate income tax payments in 2018 amounted to Rp5.0 trillion an increase of 57.2% compared to Rp1.8 trillion in 2017. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 293
  294. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Contribution to the State, Excluding Dividends 2017 2018 No Type of Tax (Billion Rp) (Billion Rp) 2016 Growth 2017-2018 Growth 2016-2017 (Billion Rp) (%) (%) 1 PPN 377 348 366 (55.1) (4.9) 2 PPh 3,634 3,254 2,316 (5.4) 40.5 3 PPh Badan 5,829 3,211 2,791 57.2 15 4 Other Tax Total 78 86 2 (17.6) 4.150 7,918 6,898 5,475 (20.9) 4,200.6 TAX CHARGES On February 5, 2018, BNI received an underpayment tax assessment letter (SKPKB) related to PPh 21 Income Tax, PPN and a Tax Collection Letter (“STP”) for fiscal year 2015 amounting to Rp74.9 billion (including penalties). On March 2, 2018, BNI made a full payment of the SKPKB and did not file any objection to the Directorate General of Taxes. On June 15, 2017 BNI received a tax assessment letter related to underpayment (SKPKB) PPh Badan, PPN, PPh pasal 21, PPh pasal 22, PPh pasal 23, PPh Pasal 26, PPh pasal 4 ayat (2) and a Tax Collection Letter ( “STP”) for fiscal year 2014 amounting to Rp145.3 billion (including penalties). On July 14, 2017, BNI made full payment of the SKPKB and did not file any objection to the Directorate General of Taxes. TAX LEGAL ISSUES On February 5, 2018, BNI has received a tax assessment letter related to underpayment (SKPKB) for PPh Badan for fiscal year 2015 amounting to Rp2.5 trillion (including penalties) and approved by BNI in the amount of Rp162.1 billion. On March 2, 2018, BNI paid a portion of the SKPKB amounting to Rp1.8 trillion. On May 4, 2018, BNI submitted an objection letter related to the SKPKB, to the Directorate General of Taxes. As of the date of these consolidated financial statements, the Directorate General of Taxation has not issued a decision regarding the objection letter submitted by BNI. The Bank believes that the objection or appeal submitted will be granted so the Bank has not made a reserve for the SKPKB. On December 16, 2014, BNI received an SKPKB for PPh Badan for fiscal year 2013 amounting to Rp619.8 billion (including penalties). On December 30, 2014, BNI paid the SKPKB in full. On March 12, 2015, BNI submitted an objection letter to the Directorate General of Taxes regarding the SKPKB for PPh Badan. On March 7, 2016, BNI received a letter from the Directorate General of Taxation refusing the objection to the PPh SKPKB. After the decision to reject the objection, on June 3, 2016, BNI submitted an appeal against the objection to the Tax Court. In January 2018, BNI received a copy of the Tax Court’s decision that rejected BNI’s appeal. Based on information on the official Supreme Court website on October 25, 2018, the panel of judges rejected the request for a review from BNI. The Bank has transferred the estimated income tax bill to the current tax expense for the current year. On November 28, 2012, BNI received an Underpayment Tax Assessment Letter (“SKPKB”) for PPh Badan for fiscal year 2010 amounting to Rp1.6 trillion (including penalties). On December 26, 2012, BNI made a partial payment of the SKPKB for PPh Badan of Rp9,798. On February 19, 2013, BNI submitted an objection letter to the Directorate General of Taxes regarding the remaining SKPKB for PPh Badan. On February 26, 2013, BNI made a partial payment for the remaining SKPKB for PPh Badan amounting to Rp816.9 billion. On February 21, 2014, BNI received a letter from the Directorate General of Taxation which refused the objection to the Agency’s SKPKB for PPh Badan. On May 16, 2014, BNI submitted an appeal against the objection to the Tax Court. On March 16, 2016, the Tax Court read out an appeal decision that granted BNI’s appeal. 294 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  295. Analisis & Pembahasan Manajemen On April 8, 2016, BNI received a copy of the appeal decision. The payment of Rp816.9 billion for the SKPKB has been transferred to PPh Pasal 29 PPh Badan for the 2015 tax year, PPh Pasal 25 for April, May, and June 2016. The Directorate General of Taxes filed a Judicial Review on June 28, 2016 with the Supreme Court through the Tax Court on the Tax Court Decision on March 16, 2016. In relation to the receipt of the Recognition Memory, BNI provided a response in the form of Counter Memory Review back to the Supreme Court by letter dated May 9, 2017 stating that the Tax Court’s decision was clearly in accordance with the provisions of the applicable legislation. Based on the Supreme Court Decree dated August 30, 2017, the panel of judges has rejected the request for a review of the Directorate General of Taxes. ASSUME TAX PAYMENTS BNI has paid off all tax assessments as a result of audits due for payment as described earlier in the discussion of Tax Law Issues. Although BNI is still in the process of filing legal remedies against the provisions of the Director General of Taxes, BNI always pays more than is required in the tax provisions. So that in terms of BNI the tax is not in arrears. For the 2015 corporate income tax assessment amounting to Rp2.5 trillion, BNI has agreed to part of the audit tax assessment amounting to Rp162 billion, while for the remaining underpayment amounting to Rp2.3 trillion, BNI has filed an legal objection and has appealed. If the Objection is rejected, the tax provisions that are still in the legal process, in accordance with the applicable tax laws, will become state receivables or BNI tax payable up to the provisions approved by BNI in the amount of Rp162 billion, while the remaining tax of Rp.2.3 the bill will be suspended up to 1 (one) month from the date of issuance of the Appeal Decision from the Tax Court. Nonetheless, BNI has made payments totaling Rp1.8 trillion in approved provisions as well as most of the unapproved tax assessments. Based on Article 27 paragraph (5a) jo. Article 25 paragraph (7) Law No 6 of 1983 stdd. Law No. 16 of 2009 concerning General Provisions and Tax Procedures, it states that in the case of Taxpayers filing an appeal, the tax repayment period for the amount of tax that has not been paid at the time of filing an objection is up to 1 (one) month from the date of issuance of the Appeal Decision. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 295
  296. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk TRANSFER PRICING DOCUMENT RANSFER PRICING DOCUMENT Minister of Finance (PMK) Regulation No.213/PM.03/2016 sets the types of documents and / or additional information required to be made and kept by Taxpayers transacting with related parties, and the Management procedures. This regulation aims to improve the quality of documents prepared by taxpayers and to increase transparency. Taxpayers also need to be more proactive to ensure that the information needed to prepare the master documents and local documents is available and complies with the applicable regulations. PT Bank Negara Indonesia, Tbk (BNI) as an obedient taxpayer, who is compliant with all existing tax regulations, complies with this regulation. 296 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  297. Analisis & Pembahasan Manajemen INTRODUCTION The Ministry of Finance issued a new regulation that requires taxpayers to prepare transfer pricing documentation (TP Doc). These new TP Doc regulations complement the provisions related to the principle of fairness, and the prevalence of business transactions involving parties with special relationships. Based on the definition in Article 1 point 6 PMK-213/ PM.03/2016 mentioned, the transfer pricing document is a document that is held by the taxpayer as the basis of applying the fairness principle and business practice in determining the transfer price made by the Taxpayer. This was issued in accordance with the provisions of the transfer pricing document, and shall not supersede the applicable rules to govern the principle of fairness and business practices, that is The Director General of Taxes Regulation No. PER-43/PJ/2010 (amended by The Director General of Taxes Regulation No. PER-32/PJ/2011) TYPE OF DOCUMENTS THAT HAVE TO BE RETAINED Based on these regulations, taxpayers are required to hold and store 3 (three) levels of documents consisting of: 1. Master Documents; 2. Local Documents; and 3. Country Report. Transfer pricing documents above must be submitted in Bahasa Indonesia. However, a Taxpayer who has obtained a license to maintain bookkeeping in a foreign language and a non-Indonesian currency may create a document in English accompanied by a transfer pricing document in Bahasa Indonesia SUBJECTS REQUIRED TO MAKE TP DOC Parties that must prepare TP Docs fall into 2 (two) groups, namely: 1. Those required to make master documents and local documents; and 2. Those required to make master documents, local documents and country reports. ACCESS TO FINANCIAL INFORMATION RELATED TO TAXATION PRELIMINARY The Automatic Exchange of Financial Account Information or (AEOI) is a plan from the G20 countries, and initiated by the Organization for Economic Cooperation and Development (OECD), regarding a system to support the exchange of information on taxpayer accounts between countries. With this system, taxpayers who have opened accounts in other countries will be able to be tracked directly by the tax authorities of their home countries. AEOI new global standards will later be useful in reducing the chances of tax payment avoidance. AEOI’s system works as an exchange of financial data of foreign nationals living in a country. Exchange of financial data is not conducted carelessly, but is carried out between the authorized tax authorities in each country. Every country that has joined the AEOI system will send and receive preagreed information annually without having to submit any special request. In Indonesia by using AEOI, the Directorate General of Taxation can supervise and explore any tax potential through banking or other financial institutions transactions conducted by overseas taxpayers, as if it applies to domestic taxpayers. This is done to strengthen the database, which has experienced limited access, so that the state revenue potential from the tax sector can be maximized. SCOPE In accordance with Law No. 9 of 2017 concerning Determination of Government Regulations Substituting Law Number 1 of 2017 concerning Access to Financial Information for Taxation Interests, the scope of access to financial information is divided into 2 (two), namely: 1. Exchange of information for the benefit of International Agreements or Foreign Customers 2. For the purposes of Domestic Taxation or Domestic Customers in the context of implementing the Taxation Regulations. IMPACT OF REGULATIONS ON THE COMPANY In the case of applying the Transfer Pricing regulation, BNI has disclosed the transactions with its subsidiaries and other related parties in accordance with the prevailing regulations. In terms of carrying out arms length transactions, or fairness of BNI transactions with related parties, the company uses the services of a Delloite public accountant to conduct an assessment. Based on the assessment results conducted, all BNI transactions conducted with related parties have met the set reasonableness limit. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 297
  298. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk REPORTING SUBJECTS AND FINANCIAL INFORMATION PROVIDERS Based on Law No. 9 of 2017, Financial Institutions (LK) that are required to report include: FINANCIAL INSTITUTIONS BY SECTOR Banking 1. Commercial Bank 2. BPR 3. Islamic Bank Capital market Insurance Commodity Futures Trading 1. Underwriting 2. Securities Brokerage (PPE) 3. Investment Manager (MI) 4. Custodian Bank 5. Administrative Bureau 1. .General and Sharia Insurance Companies 2. Sharia Life and Life Insurance Company 3. Sharia Reinsurance and Reinsurance Company 1. Futures Broker 2. Futures Broker Clearing Member Cooperatives Koperasi Simpan Pinjam NATURE OF FINANCING INFORMATION Based on Law No. 9 of 2017, the method of providing financial information is divided into 2 (two), namely: 1. 1. Automatic Reporting of financial information that is managed for 1 (one) calendar year automatically (without being asked). Financial institutions reporting financial account reporters, identify financial accounts that must be reported by applying the identification process to submit financial information reports. Based on Law No. 9 of 2017, there are 5 (five) data elements to be exchanged including: a. a. Identity of financial account holders b. b. Financial account number c. c. Identity of the reporting financial institution d. d. Balance or financial account value e. e. Income related to financial accounts. Financial Accounts that must be reported automatically by Financial Institutions: a. Banking Sector (savings) i. Domestic Customers -- owned by an individual, with an aggregate balance of at least Rp1 billion (one billion Rupiah);; -- owned by the entity, without a minimum balance limit; ii. Foreign Customers -- financial account worth US$250,000 (two hundred fifty thousand United States Dollars) b. Insurance Sector (policy) insurance coverage of at least Rp1 billion (one billion Rupiah); c. Cooperative Sector (deposits) with an aggregate balance of at least Rp1 billion (one billion Rupiah); d. Capital Market Sector (securities) and Commodity Futures Trading (deposit margin) without a minimum balance limit 2. Request by the Directorate General of Taxes Financial information reporting based on a Directorate General of Taxes request that has the authority to request information and / or evidence or information, in addition to information from automatic reports, to financial institutions. Financial institutions must provide information and / or evidence or information requested by the DGT for a maximum of 1 (one) month after the request is received that at least should contain: a. Information or evidence or information requested b. Format and form of request requested c. Reason for the request IMPLEMENTATION IN BNI Following up on the regulation on financial data information access, BNI has participated as a form of compliance for accessing financial information by sending customer data based on criteria that must be reported at the end of each year starting in 2018 to the Directorate General of Taxes. 298 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  299. Analisis & Pembahasan Manajemen FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA) LEMBAGA KEUANGAN DJP FATCA is a regulation issued by the US Treasury Department and Internal Revenue Service (“IRS”) to prevent tax evasion by US citizens or companies (US persons) for funds or businesses kept outside the United States. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 299
  300. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Related to FATCA, the steps that BNI has taken include: 01 Since July 1, 2014, the Customer Due Diligence process for individual customers has been carried out BNI registered with the IRS at the end of April 2014 02 FATCA 04 In 2015, additional forms for individual customers were included in the account opening form Since January 2015, the Customer Due Diligence process requiring prospective customers to fill out an additional account opening form has been conducted 03 Then through POJK No.25/POJK.03/2015 dated December 11, 2015 concerning Foreign Customer Information Submission Related to Taxation with Partner Country or Partner Jurisdiction, BNI committed to complying with the FATCA regulation, and was registered with the IRS as a financial institution that would implement the FATCA regulation. Currently compliance with the FATCA regulation is part of BNI’s Customer Due Diligence process and has been implemented since July 1, 2017.The Bank reporting related to the POJK was reported at the end of April 2018 for domestic taxes, while to purposes of the first International agreement was reported in early August 2018. 300 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  301. Analisis & Pembahasan Manajemen OTHER MATERIAL INFORMATION OTHER MATERIAL INFORMATION There was no significant material information and facts after the date of the auditor’s report that influenced BNI’s financial position as of December 31, 2018. OTHER SIGNIFICANT TRANSACTIONS OF A SIGNIFICANT AMOUNT During 2018, there were no significant transactions of a significant amounts conducted by BNI. ISO 9001:2015 Repair is relentless and as one of BNI’s cultural work values, BNI encourages everyone to always make improvements. One such cultural work value is the quality management system ISO 9001: 2015, when preparing the Financial Report (FR). ISO 9001: 2015 ensures that the BNI CGC meets regulators, external parties, and BNI management expectations and is accurate, timely, and in accordance with regulatory provisions. Efforts have been taken by BNI to develop procedures, documentation, and employee development for those involved in preparing the CGC, as well as systems and working environment improvements, to meet ISO 9001: 2015 requirements. In September 2016, the process for preparing the BNI CGC was officially recognized by ISO 9001: 2015. Every 3 (three) months, surveillance audits are conducted related to the implementation of ISO 9001: 2015, and during 2018 2 surveillance audits were conducted with satisfactory results. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 301
  302. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk SIGNIFICANT CHANGES IN LAWS AND REGULATIONS AFFECTING THE BANK The changes to several laws and regulations in 2018 and their affect on Bank BNI are described in the following table: Regulation Changes and Affect on BNI and Subsidiaries Performance No. 1. 2. Regulation PBI No. 20/3/PBI/2018 Regarding Statutory Reserves in Rupiah and Foreign Exchange for Conventional Commercial Banks, Sharia Commercial Banks, and Sharia Business Units 1. Fulfillment of Rupiah MSR for BUK of 6.5% (six point five percent) for BUK Deposits in rupiah during a certain reporting period: a. Daily basis of 4.5% (four point five percent); and b. An average of 2% (two percent) effective July 16, 2018. 2. Fulfillment of Foreign Exchange MSR for BUK of 8% (eight percent) for BUK TPF in foreign currencies during a certain reporting period: a. Daily basis of 6% (six percent); and b. An average of 2% (two percent). effective October 1, 2018 PADG No. 20/10/ PADG/2018 Regarding Statutory Reserves in Rupiah and Foreign Exchange for Conventional Commercial Banks, Sharia Commercial Banks, and Sharia Business Units 3. Fulfillment of Statutory Reserves in points 1 and 2 above are calculated by comparing the position of the Demand Deposit account balance at BI at the end of the day in 2 (two) reporting periods to the daily average number of TPF in the 2 (two) reporting periods at 4 (four) previous reporting periods. 4. BI provide checking services every day for a certain portion of the fulfillment of Statutory Reserves in BUK rupiah. The giro service is given at an interest rate of 0% (zero percent) per year. Changes in the amount of demand deposit services will be determined by PADG. 5. Adjustment of the sanction provisions for BUK, related to the application of the average Statutory Reserves for MSR in BUK foreign currency to 2 (two) types of sanctions, namely sanctions for the fulfillment of daily Statutory Reserves and sanctions for meeting the average Statutory Reserves. PADG No. 20/11/ PADG/2018 Regarding Macroprudential Intermediation Ratio and Macroprudential Liquidity Buffer for Conventional Commercial Banks, Sharia Commercial Banks, and Sharia Business Units 1. Completion of the Loan to funding Ratio (LFR MSR) Statutory Reserves into the Macroprudential Intermediation Ratio (RIM); Criteria for corporate securities (SBK) held by the Bank in rupiah and foreign currencies are used as the basis for calculating RIM or Sharia RIM Criteria for securities (SB) issued by the Banks in rupiah and foreign currencies, are used as the basis for calculation of RIM or Sharia RIM; Completion of Secondary Minimum Requirement Current Account (Second- PADG No. 20/11/ PADG/2018 Regarding Macroprudential Intermediation Ratio and Macroprudential Liquidity Buffer for Conventional Commercial Banks, Sharia Commercial Banks, and Sharia Business Units as amended several times, the latest by PADG No.20/33/PADG/2018 302 Affect on BNI and Subsidiaries Regulation Description 2. 3. 4. 1. 2. 3. 1. ary MSR) to be a Macroprudential Liquidity Buffer (PLM) provided that: a. PLM BUK must be a minimum of 4% (four percent) of TPF BUK in rupiah b. PLM Sharia must be a minimum of 4% (four percent) of TPF BUS in rupiah. 5. 5. The PLM and Sharia PLM compliance obligations are regulated as follows: a. PLM is fulfilled in the form of: • • b. SB in rupiah owned by BUK to be used in monetary operations; and SBS in rupiah held by UUS to be used in sharia monetary operations, for BUK that have UUS; and Sharia PLM is fulfilled in the form of SBS in rupiah owned by BUS to be used in sharia monetary operations. Beradaptasi dengan Cepat Menghadapi Perubahan  2. 3. Maintaining Rupiah MSR that must be fulfilled on a daily basis at 4.5% (four point five percent) and on average at 2% (two percent) during certain periods starting July 16, 2018. Maintaining Foreign Exchange MSR that must be fulfilled on a daily basis at 6% (six percent) and on average at 2% (two percent) during certain periods starting October 1, 2018 Updating the PP Work Procedure of the Treasury Division Procedure Funding And Gapping Group Chapter, Provisions for Implementation Sub-Section, for Funding and Gapping Management Sub-Section. The first report on Corporate Securities (SBK) owned and issued by the Bank for the monthly position: a. May 2018, by BUK no later than 10 (ten) working days after the end of the reporting month. b. August 2018, by BUS and UUS no later than 10 working days after the end of the reporting month. The obligation to fulfill the RIM Current Account came into force on July 16, 2018. The obligation to fulfill the RIM Syariah Current Account took effect on October 1, 2018. PT Bank Negara Indonesia (Persero) Tbk
  303. Analisis & Pembahasan Manajemen No. 3. Regulation PBI No. 20/6/PBI/2018 Affect on BNI and Subsidiaries Regulation Description 1. Regarding Electronic Money 2. 3. 4. 5. Based on the scope of operation, Electronic Money (EM) can be divided into: a. closed loop, which is EM that can only be used as an instrument of payment to the Provider of Goods and / or Services that constitutes the EM Issuer; and b. open loop, which is EM that can be used as an instrument of payment to a Provider of Goods and / or Services that is not an EM Issuer. 2. EM as referred to in paragraph (1) can be distinguished based on: a. EM Value storage media in the form of: • server based, namely EM with storage in the form of servers; and • chip based, namely EM with chip storage media; and b. recording User identity data in the form of: • unregistered, i.e. EM whose User identity data is not registered and is not registered with the Issuer; and • registered, i.e. EM whose User identity data is registered and regis- 1. 2. Submitting a statement and representation and warranties as referred to in Article 14 no later than 6 (six) months after this PBI comes into force. Ensuring the suitability of Electronic Money implementation within the provisions as stipulated in the PBI. tered with the Issuer. EM management permits and approvals, including, obligations and grouping of permits, general feasibility requirements and aspects, permits and approvals submitting and processing application procedure, capability and propriety appraisal; shareholder control, permit evaluation; and licensing and approval policies; i.e. operators must submit written statements and representations and guarantees to Bank Indonesia. 4. statement and guarantee is submitted and signed by the board of directors authorized to represent the Bank or Institutions other than Bank and must be accompanied by a statement from an independent and professional legal consultant based on legal due diligence. 5. The EM implementation includes the application of risk management, information system security standards, EM transaction processing in the Indonesian territory, interconnection and interoperability, the application of anti money laundering and prevention of terrorism funding, the application of consumer protection principles, the implementation of EM activities, and the implementation of Digital Financial Services (DFS); a. The limit on the amount of EM that can be deposited is determined as follows: • for unregistered EM a maximum of Rp2,000,000.00 (two million rupiah); and • for registered EM no more than Rp10,000,000.00 (ten million rupiah). b. PT Bank Negara Indonesia (Persero) Tbk  The amount limit for EM transactions in 1 (one) month is no more than Rp20,000,000.00 (twenty million rupiah). Beradaptasi dengan Cepat Menghadapi Perubahan 303
  304. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk No. 4. Regulation PBI No. 20/8/PBI/2018 Regarding Loan to Value Ratios for Property Loans, Financing to Value Ratios for Property Financing, and Advances for Vehicle Loans or Financing Affect on BNI and Subsidiaries Regulation Description 1. Ratio adjustment and LTV tiering for Property Loans (PL) and ratio and tiering for Property Financing (PF) for the first facility, second facility, third facility and so on, for banks that meet or do not meet the following requirements: a. The ratio of net problem loans is less than 5% (five percent); and b. The ratio of problematic PL or the PF ratio is grossly problematic at less than 5% (five percent). Provision of top up by BUK in addition to the previous PL using the previous PL LTV Ratio as long as the top up uses the same collateral and the previous PL has current quality, if it does not use the same collateral and / or the previous PL did not have current quality, the additional loan (top up) uses the LTV ratio for PL as a new loan. For PL and take over PF with additional loan (top up) or accompanied by new financing using the LTV PL Ratio or the same FTV PF ratio as long as the PL or PF has current quality as referred to in item 2 above . PLs or PFs for property ownership that are not yet fully available are set to a maximum of 5 (five) facilities and are obliged to withdraw PL or PF in stages with the following conditions: 2. 3. 4. No Disbursement of PL or PP Adjustment of BNI's internal policies and procedures by referring to the provisions of the PBI. Stages a. ≤ 30% of the limit After signing the PL without the need for an assessment of development progress b. ≤ 50% of the limit After the first stage b until completion, based on development progress assessment *) c. ≤ 90% of the limit After first stage b. until completion of the limit based on the development development assessment *) d. 100% of the limit After the signing of the handover minutes, completed with a sale and purchase deed and deed of assignment of mortgage rights or a power of attorney imposing mortgage rights *) must be based on development progress reports from: a. developer with verification from the Bank's internal appraiser; or b. independent appraiser 5. The procedure for valuing collateral is determined as follows: a. for PL or PF given with a ceiling of up to Rp 5,000,000,000.00 (five billion rupiahs), the collateral value is based on estimates made by the Bank's internal appraiser or independent appraiser; and b. for PL or PF given with a ceiling above Rp 5,000,000,000.00 (five billion rupiah), the collateral value is based on estimates made by an independent appraiser. 6. Banks that provide KKB or PKB must fulfill the following conditions for Advances: Type of vehicle ≤ 20% 3 wheel / not intended for productive activities ≤ 25% 7. 8. The provisions in point 6 above apply to banks that meet the following requirements: a. The ratio of gross problem loans is less than 5% (five percent); and b. The ratio of KKB is problematic or the PKB ratio is grossly problematic at less than 5% (five percent). In the event that a Bank does not meet the requirements as referred to in point 7, the Bank must fulfill the following conditions for Advances: Type of vehicle Down payment 2 wheel ≤ 20% 3 wheel / not intended for productive activities ≤ 30% 9. 304 Down payment 2 wheel In the event that a Bank provides a KKB or PKB for the purchase of three-wheeled or more motorized vehicles intended for productive activities, the Bank must meet the following conditions: a. provide KKB or PKB with a down payment of at least 20% (twenty percent); and b. meet the following requirements: • is a vehicle that has permission to transport people or goods issued by the authorities; or • submitted by individuals or legal entities that have business licenses issued by the authorities that support the operational activities of their businesses. Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  305. Analisis & Pembahasan Manajemen No. 5. Regulation POJK No. 2/ POJK.03/2018 Regarding Systemic Bank Determination and Capital Surcharge Affect on BNI and Subsidiaries Regulation Description 1. OJK has established a Systemic Banks and Capital Surcharge to coordinate with BI, for every semester in: a. March by using the position data for December of the previous year; and b. September using the position data for June of the current year. 2. The OJK sends a written notification to the Bank as a Systemic Bank and the Capital Surcharge amount required by the Systemic Bank. 3. The methodology for determining the systemic bank uses an indicator of bank size, complexity of business activities, and its interconnectedness with the financial system. 4. 4. Capital Surcharge must be fulfilled by using the main core capital (Common Equity Tier 1), the amount of which is set in 5 (five) buckets as follows: a. 1.0% (one point zero percent) of Risk Weighted Assets (RWA) for Systemic Banks classified in bucket 1 (one); b. 1.5% (one point five percent) of RWA for Systemic Banks classified in bucket 2 (two); c. 2.0% (two point zero percent) of RWA for Systemic Banks classified in bucket 3 (three); d. 2.5% (two point five percent) of RWA for Systemic Banks classified in bucket 4 (four); and e. 3.5% (three point five percent) of RWA for Systemic Banks classified in bucket 5 (five). 5. 5. Establishment of Capital Surcharge is carried out with the following stages: a. a. for Systemic Banks classified in bucket 1 (one), amounting to: • 0.75% (zero point seven five percent) of RWA after this OJK Regulation came into force; and • 1.0% (one point zero percent) from RWA after January 1, 2019; b. b. for Systemic Banks classified in bucket 2 (two), amounting to: • 1.125% (one point one two five percent) from ATMR after this OJK Regulation came into force; and • 1.5% (one point five percent) from RWA after January 1, 2019; c. c. for Systemic Banks which are classified in bucket 3 (three), amounting to: • 1.5% (one point five percent) of RWA since this OJK Regulation came into force; and • 2.0% (two point zero percent) from RWA after January 1, 2019; d. d. for Systemic Banks classified in bucket 4 (four), amounting to: • 1.875% (one point eight seven five percent) of RWA since this OJK Regulation came into force; and • 2.5% (two point five percent) from RWA after January 1, 2019; e. for Systemic Banks classified in bucket 5 (five), amounting to 3.5% (three point five percent) after January 1, 2019. PT Bank Negara Indonesia (Persero) Tbk  BNI is required to monitor the Systemic Bank bucket category that will be notified in writing by the OJK and provide Capital Surcharge in accordance with the bucket determined by OJK. Beradaptasi dengan Cepat Menghadapi Perubahan 305
  306. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk No. 6. Regulation POJK No. 12/ POJK.03/2018 Regarding Implementation of Digital Banking Services by Commercial Banks 7. POJK No. 18/ POJK.07/2018 Regarding Consumer Complaint Services in the Financial Services Sector SEOJK No. 18/ SEOJK.07/2018 Guidelines for Implementing Consumer Complaint Services in the Financial Services Sector 306 Affect on BNI and Subsidiaries Regulation Description 1. Electronic Banking Services (EBS) is a service for Bank customers to obtain information, communicate, and conduct banking transactions through electronic media. 2. Digital Banking Services (DBS) are EBS that are developed by optimizing the use of customer data in order to serve customers more quickly, easily, and according to needs (customer experience), and can be carried out independently by customers, taking into account security aspects. 3. Banks may hold EBS or DBS and must apply risk management, prudential principles, and fulfill the provisions in POJK. 4. The Bank is required to include the EBS product issuance plan or plan for the implementation of the DBS by the Bank and / or by the Bank Partner in the Bank's business plan. 5. Banks that issue transactional EBS products or have plans to implement DBS must obtain approval from OJK. 6. Requests for EBS or DBS approval must be submitted to OJK no later than 2 (two) months prior to implementation. 7. The bank holding the DBS is obliged to establish a unit or function in charge of managing the DBS. 8. In conducting business relationships with customers or prospective customers through the DBS, Banks are required to identify and verify information and supporting documents for customers or prospective customers. 9. Verification of information and supporting documents for customers or prospective customers is carried: a. Face to face: • Directly (face to face); or • Using Bank-owned software with Bank-owned hardware or hardware belonging to customers or prospective customers; and / or b. Without going through face-to-face but using the Bank's software with Bank's hardware or hardware belonging to customers or prospective customers. 10. In conducting verification with hardware and / or software, the Bank must pay attention and apply at least 2 (two) authenticity factors (two factor authentication). 11. In the event that the Bank verifies without face to face, Banks must apply characteristic factors (what you are) as one of 2 (two) authenticity factors (two factor authentication). 1. The Complaint Services consists of: a. Complaint Receipt; b. Complaint Handling; and c. Complaint settlement 2. PUJK are prohibited from charging Complaint Services to Consumers. 3. PUJK must have written procedures regarding Complaint Services and must include brief procedures for Complaint Services in agreements and / or financial Transaction documents. 4. PUJK is obliged to follow up and settle verbal complaints at the latest 5 (five) working days after the Complaint is received by PUJK. 5. PUJK must conduct follow-up and perform Complaint settlement in writing no later than 20 (twenty) working days after the documents directly related to the Complaint are received in full. 6. The PUJK Board of Commissioners must ensure that the PUJK Directors have and carry out Complaint Service procedures. 7. PUJK must prepare and submit Complaint Service reports quarterly to OJK to be submitted no later than the 10 (ten) of the following month after the quarterly period has ended. Beradaptasi dengan Cepat Menghadapi Perubahan  1. 2. 1. 2. 3. When conducting DBS, BNI must form a unit or function in charge of hosting the DBS. BNI is required to guided by the the POJK if it will has an EBS or DBS. Adjusting internal policies and procedures by referring to the POJK. Publishing brief procedures for Complaint Service to Consumers and / or the community as well as handling the latest Complaints, in annual reports, websites and / or other media that is officially managed. The Board of Commissioners must ensure that the Board of Directors has and implements Complaint Service procedures. PT Bank Negara Indonesia (Persero) Tbk
  307. Analisis & Pembahasan Manajemen No. 8. Regulation POJK No.15/ POJK.03/2018 Regarding Legal Lending Limit or the Bank's Maximum Fund Distribution Limit to Encourage the Tourism Sector Growth and Increase Foreign Exchange Affect on BNI and Subsidiaries Regulation Description 1. 1. Exemptions from the LLL or BMPD calculation include: a. Provision of Export-oriented funds to financial institutions that meet certain requirements b. Part Provision of Funds that are guaranteed by financial institutions that meet certain requirements 2. Certain requirements as referred to in point 1, namely: a. owned by the central government; b. business activities providing national export financing; and c. stipulated by Law with sovereign status 3. The guarantee as referred to in point 1.b must meet certain requirements, namely: a. unconditional and irrevocable; b. can be disbursed no later than 7 (seven) working days from the submission of claims, including partial disbursement to pay arrears in principal installments or interest / margin / profit sharing / ujrah; c. has the shortest period of time equal to the period of Provision of Funds; and d. is not a counter guarantee. 4. The Bank must file a claim against the guarantee received no later than 7 (seven) working days after the Borrower defaults. 5. The borrower is declared default if: a. There has been arrears of principal and / or interest / margin / revenue sharing / and / or other charges for 90 (ninety) days despite the provision of Funds not yet due; b. There has been repayment of principal and / or interest / margin / profit sharing / final and / or other charges when the Fund Provision is due; or c. There has been no fulfillment of any other requirements other than principal payment and / or interest / margin / revenue share / ujrah which may result in default. 6. Provision of Bank Funds to State-Owned Enterprises (SOEs) for the purpose of development is set at a maximum of 30% (thirty percent) of the Bank's Capital. Provision of Funds to State-Owned Enterprises (BUMN) for development purposes includes Provision of Funds for: a. Food procurement; b. Very simple home procurement; c. Procurement / supply / management of oil and gas as well as other similar alternative energy sources; d. Water supply / supply / management; e. Procurement / supply / management of electricity; f. Procurement / processing of export-oriented commodities; g. Procurement of land, sea and air transportation supporting infrastructure in the form of roads, bridges, railroads, seaports and airports construction; and / or h. National Tourism Strategic Area (KSPN) development as set and prioritized by the central government and referred to in the Presidential Regulation concerning the acceleration of national strategic projects. PT Bank Negara Indonesia (Persero) Tbk  Adjustments to BNI's internal policies and procedures based on the POJK provisions. Beradaptasi dengan Cepat Menghadapi Perubahan 307
  308. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk CHANGES IN ACCOUNTING POLICIES The changes in accounting policies in 2018 and their impact on Bank BNI are outlined in the table as follows: Changes in Accounting Policies No. Accounting Policy Change Amendment to PSAK 24: Employee Benefits regarding Amendment, Curtailment, or Settlement Program Impact of Accounting Policy Changes on BNI and Subsidiaries Policy Change Reason The amendment to PSAK 24 provides clearer guidance for entities in recognizing past service costs, settlement gains and losses, current service costs and net interest after amendments, curtailments, or program settlement as they use the latest actuarial assumptions (previously used acturial assumptions at the beginning of the annual reporting period). This PSAK has an influence on BNI related to BNI employee benefits but currently BNI has never made amendments, curtailments or settlements in the Program. This standard is effective as of January 1, 2019 with early application permitted. PSAK 74: Insurance Contract Insurance contracts require the entity to identify the insurance contract portfolio. The portfolio consists of contracts that have similar risks and are jointly managed. The entity divides the insurance contracts issued at least into an onerous contract group at initial recognition, contract groups at the initial recognition having no significant possibility of subsequently becoming a losing contract, and contract groups remaining in the portfolio. This PSAK has an influence on BNI subsidiaries, namely BNI Life. This standard is effective January 1, 2022. 308 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  309. Analisis & Pembahasan Manajemen Material changes in accounting policies that will apply THE STATEMENT OF FINANCIAL ACCOUNTING STANDARDS (PSAK) 71 - FINANCIAL INSTRUMENTS In 2014, IASB (International Accounting Standard Board) issued IFRS 9 - Financial Instrument. This International Standard is effective in countries that perform Full Adoption IFRS as per January 1, 2018 to replace IAS (International Accounting Standard) 39 - Financial Instrument: Recognition and Measurement (adopted in Indonesia into PSAK 55 - Financial Instruments: Recognition and Measurement In September 2017, DSAK IAI (Financial Accounting Standards Board - Indonesian Institute of Accountants) issued Financial Accounting Standards (PSAK) 71 - Financial Instruments. This PSAK adopts IFRS 9 and will become effective as of January 1st 2020, supersedes PSAK 55: Regulation IFRS 9/PSAK 71 PSAK 55 Determination of Classification of Financial Assets & Liabilities Based on Business Model with SPPI (Solely Principal, Payment & Interest) test Based on intention Klasifikasi Aset Keuangan Fair Value through Profit/Loss (FVPL) • Fair Value through Other Comprehensive Income (FVOCI) • Amortised Cost (AC) • • • • Reklasifikasi Aset Keuangan If there are any changes to the Company’s Business Model Permitted, for certain conditions (there are certain conditions affected by tainting rules) Tainting Rules Deleted Applies to HTM category reclassification to AFS over material limit Hedge Accounting • • • • Tahapan Penentuan Impairment (Penurunan Nilai) Requirements and documentation are simpler Dealing directly with the Bank’s risk management strategy Assessment of effectiveness in accordance with risk management objectives Stage 1 – Performing • Financial instruments that do not experience significant increases in credit risk (investment grade, and there are no arrears) • Expected Credit Loss 12 Months after the reporting date Stage 2 - Under Performing • Financial instruments experiencing a significant increase in credit risk but there is no evidence of impairment objectives (there are arrears but have not passed the impairment criteria of 90 days in arrears) • Expected Credit Loss: Lifetime (over the life of financial instruments • • Held to Maturity (HTM) Fair Value through Profit/Loss (FVTPL) Loan and Receivables (LAR) Available for Sales (AFS) More detailed requirements and documentation There is no direct relationship with the Bank’s risk management strategy Assessment of effectiveness 80% to 125% Performing and No Significant value • CKPN is calculated collectively • Using Probability of Default (PD) and Loss Given Default (LDG) based on historical data Non Performing and / or Individually Significant • CKPN is calculated individually • Using CKPN Discounted Cashflow Stage 3 - Non Performing • Financial instruments that meet the criteria of impairment (arrears ≥ 90 days) • Expected Credit Loss: Lifetime (over the life of financial instruments Statistical approach Point in Time (PiT), taking into account macroeconomic factors Migration analysis and roll rate, without taking into account macroeconomic factors CKPN for Loan Commitments CKPN calculation performed on Loan Commitment CKPN not calculated for Loan Commitment PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 309
  310. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk As BNI has overseas branch offices, 3 (three) BNI overseas branches (Singapore, Seoul, London) were required to apply IFRS 9 as of January 1, 2018. For the Hong Kong branch, IFRS 9 implementation will take place at the beginning of 2020 following the Head Office, while the 2 (two) other branches (Tokyo and New York) are not required to apply IFRS 9 based on their respective regulators. REVIEW OF FIXED ASSETS Based on the Capital Market and Financial Institution Supervisory Agency Chairperson decision KEP-347/ BL/2012 dated June 25, 2012 concerning the Presentation and Disclosure of Financial Statements of Issuers or Public Companies, taking into account the book value of fixed assets (land and buildings) that was revalued in 2015 , then in September 2018, BNI revalued its fixed assets for groups of land and building assets both in the country and abroad. Land and buildings assessments were carried out by external independent assessors as follows: 1. KJPP Toha Okky Heru and Partners 2. KJPP Rengganis Hamid and Partners 3. KJPP Benedictus Darmapuspita and Partners 4. KJPP Abdullah Fitriantoro and Partners Assessments were carried out based on Indonesian Appraisal Standards, determined based on current market transactions and carried out with the usual conditions. The valuation method used included the market data method, cost method and income method. The elements used for data comparison to determine the fair value of assets included: 1. Types and rights attached to property 2. Market conditions 3. Location 4. Physical characteristics 5. Income generating characteristics 6. Land characteristics The following summarizes the fixed assets revaluation results in 2018: 1. Land The land reassessment resulted in an increase in carrying cost of Rp1.4 trillion, and consisted of an increase in land value being recorded as Other Comprehensive Income of Rp1.4 trillion, and a decrease in land value, which was recognized as an expense for the current year of Rp4.4 billion. 2. Buildings The increase in carrying cost arising from the buildings’ revaluation was Rp1.4 trillion. This increase was recorded as Other Comprehensive Income of Rp1.4 trillion, and the decrease in the value of buildings was recognized as current expenses of Rp32.0 billion. 310 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  311. Analisis & Pembahasan Manajemen PREPARATION FOR IMPLEMENTATION OF PSAK 71 - FINANCIAL INSTRUMENTS Following the issuance of IFRS 9: Financial Instruments by the International Accounting Standard Board (IASB) in 2014, BNI responded by preparing a literature study and preliminary gap analysis. In preparation for implementation, BNI actively participated in discussions with the Indonesian Institute of Accountants (IAI), as an authorized institution in the preparation of financial accounting standards in Indonesia, banking industry associations, and Otoritas Jasa Keuangan (OJK). IFRS 9 was adopted in Indonesia in April 2017 and became PSAK 71: Financial Instruments, and will be effective in Indonesia as of January 1, 2020. As a follow up, BNI conducted a gap analysis of PSAK 71 requirements, with the implementation of PSAK 55 currently in force, using KPMG as a consultant. In 2018, BNI reappointed KPMG as an implementation consulting assistant for the preparation of PSAK 71 policies and procedures. In addition, after going through the procurement process, BNI appointed PT. Nexia Indonesia Advisory Service as a system development vendor in carrying out the process of developing a support system for implementing PSAK 71 in BNI.. Roadmap implementasi PSAK 71 in BNI General 2014 - 2017 2018 Preparation & Literature Study Gap Analysis Development Phase Comparison of PSAK 55 implementation and PSAK 71 Requirements Provision of resources (Humans, funds, infrastructure & procedures) • Study of IFS9 Literature and PSAK 71 • Comparison of implementation with an early adation bank 2019 Monitoring Implementation • Finalize development • Analyze the impact during the parallel run • Adjustment to policies and procedures • Adjustment to chart of accounts and mapping of reports • Adjustment to systems Classification & Measurement Identification of PSAK 71 requirements for classification with BNI policies Impairment Identify differences in calculation of PSAK 71 and BNI CKPN • Adjustment to policies and procedures • Modeling development and CKPN Environmental Value Accounting Identify differences in the PSAK 71 implementation and BNI hedge accounting • •Adjustment to policies and procedures • •Adjustment to system PT Bank Negara Indonesia (Persero) Tbk  2020 Beradaptasi dengan Cepat Menghadapi Perubahan 311
  312. L ANPNOURAA LN A R EHPUONRATN TA 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk BUSINESS CONTINUITY MATTERS POTENTIALLY HAVING A SIGNIFICANT INFLUENCE AS A GOING CONCERN For operational risk management implementation, BNI refers to Bank Indonesia / Otoritas Jasa Keuangan provisions, and International Best Practices. Operational risk management includes the process of identifying, measuring, monitoring and controlling operational risk. MANAGEMENT ASSESSMENT ON MATTERS HAVING A SIGNIFICANT INFLUENCE AS A GOING CONCERN One of the tools used to perform risk management at BNI is PERISKOP (Perangkat Risiko Operasional). Periskop consists of 3 (three) main modules: 1. Self Assessment Module, is a methodology to detect the possibility that an operational risk has occurred. This method is a self- assessment process conducted by every risk owner independently in identifying, assessing, controlling and monitoring operational risk in each unit. Self Assessment module should be filed by all units, once every 3 (three) month; by conducting an assessment of the existing risk issue frequency and impacts; and finding solutions to mitigate emerging operational risks. 2. The Loss Event Database is a system to identify and record every operational risk that causes direct financial impact. Each time the risk owner unit experienced financial loss from operational risk, the unit should record it in the Lost Event Database module. The module will generate information such as type of risk, cause of risk, location where the risk emerge and the amount of risk or legal obligation and the recovery (if any). This system is very important to monitor operational risk exposure and profile in an orderly manner. The data gathered from the Loss Event Database will become the main input when the Bank applies advance approaches to measure its minimum operational risk capital adequacy ratio. 3. Key Risk Indicators, is a series of parameters established to identify main potential loss from operational risk that potentially interfere the achievement of Key Performance Indicator (KPI) before it happens. The module will give a warning/alert when the exposure exceeds a predetermined range/threshold that has been set and requires follow up from Unit’s management to overcome the problems. Besides PERISKOP, BNI has Operational Risk Expense (Beban Risiko Operasional (BRO)) and BRO Recovery accounts, which will be used to record losses or recoveries caused by operational risks. The recording in BRO accounts would also affect the performance assessment and also described in the Performance Measurement System (PMS) of the units concerned. To mitigate the operational risk, BRO account and recovery will be monitored monthly. 312 Beradaptasi dengan Cepat Menghadapi Perubahan  PT Bank Negara Indonesia (Persero) Tbk
  313. Analisis & Pembahasan Manajemen Regarding the business resilience when disaster occurs, BNI has a Business Continuity Management (BCM) policy, which is a formal mechanism that combined strategies, policies, procedures and organizations developed to ensure operational continuity of critical functions under certain levels of services when a disturbance or disaster is encountered. This policy is applied for all business units in BNI for both domestic and overseas. BNI has the infrastructure needed to implement BCM such as Disaster Recovery Center (DRC), Dual Data Center (DDC), BCM alternative building and Command Center. Regularly BNI perform a system and application testing on critical Division/Unit every 3 (three) months, do a site visit and simulation to the branch and region to ensure the disaster readiness. ASSUMPTIONS USED BY MANAGEMENT IN CONDUCTING ASSESSMENTS TO MANAGE MATTERS HAVING A SIGNIFICANT INFLUENCE AS A GOING CONCERN To manage any potentially significant impact on business continuity, especially financial, BNI has already established a Recovery Plan. In preparing the scenarios for the Recovery Plan, BNI used assumptions for liquidity crisis, based on Bank Indonesia’s granular stress test scenario, and the Liquidity Coverage Ratio (LCR) calculation scenario adjusted to BNI’s internal conditions. For the solvency crisis, it is based on the OJK assumption scenario for the Financial Stability Assessment Program (FSAP), adjusted to BNI’s internal conditions, as these scenarios are considered to represent near default conditions. PT Bank Negara Indonesia (Persero) Tbk  Beradaptasi dengan Cepat Menghadapi Perubahan 313
  314. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk BUSINESS SUPPORT UNIT 316CREDIT RISK MANAGEMENT 321NETWORK AND SERVICES 324BNI CONTACT CENTER 327UNIT SERVICES UNIT 328INFORMATION TECHNOLOGY 331INFORMATION TECHNOLOGY UTILIZATION 335INFORMATION TECHNOLOGYGOVERNANCE 336INFORMATION TECHNOLOGY FUTURE DEVELOPMENT PLAN 339DIGITAL BANKING 340ELECTRONIC BANKING 347HUMAN CAPITAL 314 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  315. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 315
  316. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk CREDIT RISK MANAGEMENT BNI’s expansive credit growth was the result of credit risk management improvement efforts in 2018. Amid the not yet fully recovered economic conditions in Indonesia, credit risk management has become an important factor in supporting the business growth strategies for maintaining BNI’s credit quality in line with the established risk appetite. The synergies between units for business acceleration have helped maintain BNI’s credit quality, with the non-performing loan (NPL) ratio standing at 1.9%. 316 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  317. Business Support Unit 2018 PERFORMANCE SELECTIVE PRODUCTIVE ASSETS GROWTH LOANS DISBURSED PROCESS FLOW During 2018 the Chinese economy has still not stretched or boosted the global economy as it did in 2008 . Therefore, China’s economic growth in 2018 is not expected to be better than the previous year. This was due to exports and foreign investments, usually the driving force of the Chinese economy, slowing down. These conditions also affected the Indonesian economy, as one of its trading partners. BNI therefore has established a policy to strengthen its business expansion in selected corporate and middle segment market sectors to maintain quality. BNI has made improvements in the Business Banking loan process in the Corporate, Commercial and Small Business segments. To achieve quality loan growth, setting strategic sectors and optimizing the supply chain and cross selling are important elements in the deep assessment process of the parent account (Anchor Company). The productive assets growth in the consumer segment in 2018 was more focused on selective borrowers with low risk profiles and included: • BNI Griya expansion focusing on selected developers, selected institutions, emerald customers, cross-sell existing to borrowers who have not used BNI Griya, and take over borrowers with a good track record from other banks, and existing Top Up program borrowers; • BNI Fleksi’s expansion focusing on government agencies, BUMN, BUMD and BHMN that have low employee turnover and also Upper-Middle employees; and • Credit Card expansion focusing on increasing credit card outstandings through loan on phone programs and by increasing credit limits, as well as acquisition policies that focus on the BUMN and government agencies segments. PT Bank Negara Indonesia (Persero) Tbk  Improvements made in the Corporate and Commercial Segments included: 1. Refining the Business Unit Functions The business units planned the list of prospects, marketing, conducts overall credit feasibility assessments (including first way out and second way out analysis) and borrower monitoring; 2. Refining the Risk Unit Functions The Risk Units provided recommendations to the business units after conducting loan risk and mitigation/ risk control analysis that focuses on likely risks and high impact. The Credit Risk Unit implemented Credit Risk Management as a key strategy to safeguarding the aggressive growth policies in 2018. Credit Risk Management includes: 1. Credit Risk Analysis: Increasing the Credit Risk Manager’s role in the credit committee in terms of: a. Balancing the business units (SRM and RM) roles in the committee; b. Maximizing the risk unit role when applying the four eyes principles. 2. Credit Risk Review: a. Conducting periodic reviews initiated by the risk unit heads at the Branch, Regional and Head Office levels; b. Collaborating with independent parties on specific matters. 3. Credit Administration: a. Ensuring fixed assets collateral taken correctly safeguards BNI’s interests; b. Ensuring credit documentation complies with the provisions; c. Evaluating partner performance. Adapting Quickly to Face Change 317
  318. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk To improve the Corporate segment loan quality efforts made during 2018, included: 1. Gradually implementing industry specialists in the Risk Units to sharpen risk analysis according to industry characteristics and mitigation; 2. Updating key risk parameters for leading sectors including Palm Oil Plantations, Toll Road Infrastructure, Electrical Infrastructure, and Mining. 3. Special monitoring of borrowers with a Collectibility 1 (one) Restruct, Pre NPL, and watchlist status through the Credit Risk Review mechanism (forum of risk units and business units); 4. Pro actively and comprehensively restructuring through joint efforts between business units, risk units, and remedial and recovery units. To improve the Commercial segment loan quality efforts made during 2018, included: 1. Creating a risk register from the audit findings as a lesson learned for the remote units. 2. Special monitoring of borrowers with a Loan at Risk (Collectibility 1 restructuring, Pre NPL, and NPL) status through the Credit Risk Review mechanism (forum of risk units and business units); 3. Establishing ad-hoc teams in all remote units in an effort to reduce loans at risk (LaR) 4. Pro actively and comprehensively restructuring through joint efforts between business units, risk units, and remedial and recovery units. While Small Business Segment improvements included: 1. The RM (Business Unit) preparing a list of prospects, marketing, conducting overall loan feasibility analysis (including first way out and second way out analysis) and borrower monitoring; 2. RM direct supervisors besides having inherent supervision functions, also having a deeper loan risk assessment function. 318 Adapting Quickly to Face Change Supporting tools in the lending process continue to be developed and refined, especially for the Small Business segment, especially, in terms of KUR distribution, supported by an electronic Loan Origination (eLO) system to speed up the loan analysis process. While all banking business segments use the Credit Analysis Assistance System (SABAK) to improve credit process efficiencies, and to reduce human error in the credit analysis process. In addition, the four eyes principle was strengthened at all stages, in the credit processing units up to credit decision making in the credit committees, covering credit breaker officials, in accordance with their authority, aimed at maintaining the quality of loans disbursed. To support the selective business growth in the consumer sector, comprehensive process flow improvements were carried out, ensuring adherence to the prudential principle, including: 1. Know Your Customer (KYC) principle policy for prospective borrowers through a document verification process to minimize application fraud; 2. Corrective action in the consumer loan processing units with an NPL ratio above the specified limit, with decision authorities being raised to a higher level; 3. Special instant approval processes for selected partners (purchasing primary homes with selected developers); 4. Regular and special instant approval processes for the purchase of BNI Griya collateral classified as NPL or written off; 5. BNI Fleksi pre approval and instant approval process for selected partners; 6. BNI Griya pre approval process for Emerald customers (Priority); and 7. BNI Fleksi and BNI Griya pre-approval process for Directors and Commissioners of all BUMNs. PT Bank Negara Indonesia (Persero) Tbk
  319. Business Support Unit LOAN MONITORING One method of creating quality asset growth is through intensive monitoring and loan collection . This monitoring can be realized through visits to borrowers to see the condition of their business, review the feasibility of their loans, and monitor the payment of their liabilities. The business banking segment monitoring process is supported by monitoring tools, including a watchlist system and credit risk review that are used to monitor the borrowers’ loan performance, and to determine any follow-up to ensure the loan quality does not deteriorate. Consumer segment loan monitoring includes: 1. Intensive monitoring of current borrowers with the potential to go into arrears; 2. Debiting credit card holders’ savings account in the Captive Market segment; 3. Following different billing strategies for credit card holders based on the credit card behavior scorecard so that billing is more effective and efficient; 4. Applying Automated Account Allocation for borrowers who have the potential to default to avoid a decline in asset quality; 5. Applying the Field Collector Tracking application to increase productivity; 6. Establishing special collection units for BNI Fleksi borrowers for unsecured products; 7. Monitoring periodically BNI Griya borrowers with loans of more than Rp1 billion (one billion Rupiah); and 8. Applying monitoring digitalization. LOAN RESTRUCTURING AND SETTLEMENT In 2018, during the slowdown in Indonesia’s economic growth and the not yet fully recovered global economy, BNI continued to more comprehensively improve its loan monitoring restructuring, and improve the NPL settlement by referring to the applicable provisions in accordance with the good corporate governance principles. The loan restructuring and settlement strategy is continuing to strengthen BNI’s financial fundamentals and maintain loan quality, and includes increasing the coverage ratio and optimally handling non-performing loans. Non-performing loan handling follows two strategies, loan restructuring and PT Bank Negara Indonesia (Persero) Tbk  loan settlement. The restructuring strategy includes: 1. Restructuring (Reconditioning, Rescheduling) borrowers who have difficulties in fulfilling their obligations but still have prospects and are considered cooperative; 2. Deposits/Settlements through strategic investors; 3. Sales of guarantees voluntarily or through execution of Underwriting Rights; and 4. Foreclosing Collateral (AYDA) and Temporary Participation by the Bank (PSB). While the settlement strategy is applied to borrowers without any prospect of settlement. Written off loans will be pursued to the maximum to minimize bank losses through: 1. Loan settlement through strategic investors; 2. Sales of guarantees voluntarily or through execution of Underwriting Rights; 3. Marketing loan collateral from the consumer and business banking segments by using collateral auction websites that can be accessed by the general public for; 4. Subrogation; 5. Legal action by billing personal guarantors (PG) and company guarantors (CG), execution of mortgage/ fiduciary rights, litigation, bankruptcy and claims. In addition, consumer credit non-performing loans are pursued through two strategies, loan restructuring and settlement, that include: 1. Accelerating the Restructuring (Reconditioning, Rescheduling) for borrowers who have difficulties in fulfilling their obligations but still have prospects and are considered cooperative through the Asset Quality Improvement and Acceleration Recovery (PPKA) Program; 2. Pursuing Legal action (simple lawsuit, State Attorney/ JPN); 3. Auction registration for borrowers in the NPL group to act as a deterrent so borrowers are more committed to completing their obligations; 4. Optimizing collateral auction websites for marketing consumer segment loan collateral; 5. Loan settlement through the transfer of NPL and Delete Book receivables (cessie-transfer or sale of bank-owned loans to other parties or investors based on criteria set by the Bank); and 6. Optimizing buy back guarantees from partner developers and insurance claims. Adapting Quickly to Face Change 319
  320. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk 2019 PLAN AND STRATEGY Responding to the economic challenges in 2018, BNI has set an aggressive growth policy while still maintaining quality. Following internal and external studies, loan expansion will focus on prospective and priority industries. In line with this strategy, improvements in loan quality will also became a main focus in 2018 with loan process improvements, including restructuring troubled borrowers, improving risk control in the lending process by implementing the four eyes principle, and with more effective supervision. Loan monitoring will also continue to optimize identification of problems earlier and to apply the appropriate corrective action on borrowers. The Credit Risk Unit plan to strengthen Credit Risk Management is through key strategies to safeguard the aggressive growth in 2019, including: 1. Credit Risk Analysis, including: a. Increasing the Credit Risk Analysts roles and competencies, as follows: i. Corporate Segment -- Optimizing industry specialists especially for leading sectors; -- Optimizing handling of loans at risk (excluding NPL); -- Training and seminars in accordance with industry specifications; -- Sharing sessions with industry players, regulators and other stakeholders; ii. Commercial and Small Business Segments -- Developing the loan process through eLO end to end; -- Strengthening the tracking process function; -- Increasing risk unit risk assessments through knowledge sharing in certain sectors with corporate segment industry specialists; -- Sharing sessions with industry players, regulators and other stakeholders; b. Maximizing the risk unit role as a counterweight to the business units, as well as following the four eyes principles. 320 Adapting Quickly to Face Change 2. Credit Risk Review, including: a. Reviewing the existing industrial sector key risk parameters, adjusted to the macro and micro conditions of the industry; b. Creating key risk parameters for other industrial sectors (excluding those already set in 2018); c. Mapping and discussing loan problems that have occurred and making recommendations (risk mitigation and lessons learned); d. Refining the identification and monitoring of borrower problems so that more accurate action plans can be determined; and e. Refining the identification of borrower problems at an early age through the Early Warning Signal (EWS) system. The consumer credit plan and strategy for 2019 includes: • Maximizing the strategies that were implemented in 2018 • Focusing expansion on selected partners including PKS developers (Cooperation Agreements), selected institutions (BUMN, BUMD, selected national and private institutions, existing borrowers, selected professionals (doctors and notaries), Emerald customers, and consumer relationship banking customers who have had a BNI account for at least 6 months); • Digitizing the loan process through an integrated application data collection system, automatically checking for duplications and Bad Applications, and verification by using internal and external data (Big Data) to shorten the time needed to complete the loan process; and • Loan settlement through transfer of NPL receivables and write offs (via cessie and bulk). PT Bank Negara Indonesia (Persero) Tbk
  321. Business Support Unit NETWORK AND SERVICES BNI ’s network and service development during 2018 was carried out by increasing the office networks (outlets), electronic networks (ATM), Agen46 , and through various network and service innovations supported by the Contact Center Unit and Service Quality Unit. These efforts supported the company’s achievement of its projected business performance. OFFICE NETWORK (OUTLETS) 2018 PERFORMANCE To expand its networks, and to improve its services, and to extend the reach of financial inclusion for the community, in 2018 BNI added 13 (thirteen) Sub-Branch Offices, 23 (twenty three) Cash Offices, 9 (nine) Payment Points, 74 (seventy four) O-Branches (Mobile Cash Services), 1 (one) Small Loan Center, and 1 (one) Money Changer to its office network. In addition, to improve business performance, effectiveness and to optimize outlet management and operational risk control, BNI also ungraded the status of existing outlets with 1 (one) Sub-Branch Office becoming a Branch Office and 12 Cash Offices becoming Sub-Branch Offices. The BNI office network at the end of 2018 was spread across 34 (thirty four) provinces reaching 476 (four hundred seventy six) cities/regencies (91%) throughout Indonesia, and consisted of 17 (seventeen) Regional Offices, 201 (twenty hundred one) Branch Offices, 1,109 (a thousand one hundred ninety) Sub-Branch Offices, 605 (six hundre five) Cash Offices including 14 (fourteen) Digital Branch services, 128 (one hundred twenty eight) Payment Points and 196 (one hundred ninety six) O-Branches (Mobile Cash Services). To serve customers’ needs at weekends, BNI operates 78 (seventy eight) outlets serving customers on Saturdays and Sundays (Weekend Banking Services). To provide the best service to the Wealth customer segment (both priority and private customers), BNI also has 28 (twenty eight) BNI Emerald service outlets. Currently, 56% of all BNI outlets are in Java and 44% outside Java. Off the total BNI outlets, 1,388 (a thousand thirty hundred eighty eight) or 72% are located in strategic commercial business centers (shops and malls), and 527 (five hundred twenty seven) or 28% are located in office centers and strategic residential areas. The number of BNI Network Outlet 2,256 2,150 1,990 2016 2017 2018 Over the last 3 (three) years (2016 - 2018), BNI’s outlet network has grown rapidly with 266 (two hundred sixty six) additional outlets, an average of 6.47% per year, as illustrated in the chart below. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 321
  322. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk ATM NETWORK To continue its commitment to providing convenience to BNI customers and other banking customers for their transactions, in 2018 BNI added 345 (three hundred fourty five) ATM machines for cash deposit transactions (Cash Recycle Machine/CRM) so the total BNI ATMs throughout Indonesia at the end of 2018 amounted to 18,311 (eighteen thousand three hundred eleven) units consisting of 15,834 (Fiveteen thousand eight hundred thirty four) Cash ATM units (incl. Drive Thru and Ride Thru ATMs), 1,477 (a thousand four hundred seventy seven) Cash Deposit and Withdrawal ATMs, and 1,000 Non Cash ATMs. Of the total 18,311 (eighteen thousand three hundred eleven) BNI ATMs across Indonesia, 10,827 (ten thousand eight hundred twenty seven) or 59% are in Java, while 7,484 (seven thousand four hundred eighty four) or 41% are outside Java. Of the total 18,311 (eighteen thousand three hundred eleven) BNI ATMs, 10,461 (ten thousand four hundred sixty one) or 57% are in strategic commercial business centers (shops and malls) and 7,850 (seven thousand eight hundred fifty) or 43% are located in office centers and strategic residential areas. D-Branch Ngurah Rai, Bali Interactive Wall As part of the SOE synergy and to continue to provide easy transactions, especially for bank customers who are members of the State Bank Association (Himbara), BNI has also converted 9,900 (nine thousand nine hundred) BNI ATMs to Red and White (Link) ATMs. With the increasing number of BNI ATMs throughout Indonesia, banking transaction services will be further improved for both BNI customers and other customers who are members of the joint ATM networks, ATM Link, Global Master Card International ATM and Prima ATM network, and will increase fee-based income (FBI) from transactions through BNI ATMs. Big Screen dan CRM Banking Cafe, Manado 322 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  323. Business Support Unit OFFICE NETWORK INNOVATIONS Total and Growth BNI ATM 18 ,311 17,966 17,056 2016 2017 2018 To keep up with the increasingly rapid technological and digital developments, in 2018 BNI added 6 (six) D-Branch services prioritizing banking services through additional digital devices. The total number of BNI D-Branch currently stands at 14 (fourteen), located in major cities including Jakarta, Bandung, Surabaya, Medan, Bali, Yogyakarta, Makassar and Manado. To provide a complete digital transaction experience, digital devices are available at BNI D-Branch that help customers in conducting banking transactions, including; ATM/CRM (cash deposits, cash withdrawals, transfers and more), Smart Kiosks (opening account machines), Interactive Wall (BNI touchscreen product education devices), Interactive Table (touchscreen Information devices) and Big Screen (promos and information devices). To tap the business potential of millennials using a more modern, comfortable and contemporary transaction experience, BNI provides Banking Cafe services at several D-Branch outlets. Interactive Table In 2018, BNI made improvements and innovations to its banking transaction services, especially through frontliners by piloting the use of the Teller Cash Recycle (TCR) machine that facilitate and accelerate cash deposits and book-entry services at counter tellers. Perangkat TCR PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 323
  324. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk BNI CONTACT CENTER The BNI Contact Center will continue to provide the best service for BNI customers. Through BNI Call 1500046 services, customers can obtain information, conduct transactions and find solutions to their every problem including banking services, credit cards, merchants, remittances and trade transactions. In 2018 the BNI Contact Center supported BNI’s Smart Kios with a Video Contact Center service for opening accounts through D-Branch, and managed various information requests and complaints through BNI Social Media, enabling it to serve all customers through non-branch channels. Together with the spirit of BNItuDigital, and to always provide the best customer service, the BNI Contact Center launched BNI Call Application, the first Contact Center banking application in Indonesia based on Artificial Intelligence, using voice commands and Natural Language. Processing (NLP). The BNI Call application makes it easier for customers and non-customers, using Android and iOS, to gather information on BNI products and services as well as the latest general information. By using the BNI Call Application, customers and non-customers will be able to communicate with BNI Call officers via chat. The BNI Call application, through BNI Call 1500046 services delivers a new experience and adds channel alternatives so that customers now have a variety of easy and convenient access choices, which will increase customer satisfaction. The BNI Contact Center supports BNI’s commitment to providing excellent services for people with disabilities, and follows strategic and inclusive financial program policies that are disability-friendly. The BNI Contact Center took part in the 2018 International Disability Day celebration held by the Republic of Indonesia Ministry of Social Affairs on December 2 and 3, 2018 introducing its disability-friendly BNI Call Applications. BNI Contact Center’s commitment through its Quality policy of “Commitment, Capability and Care” to continuously improve the service quality for customers through quality standardization in all services, obtained ISO 9001: 2015 Certification, and this commitment was maintained in 2018. The BNI Contact Center achievements in 2018, including being ranked first in the Phone Banking and Call Center category based on the Bank Service Excellent Monitor (BSEM) survey results from Marketing Research Indonesia (MRI), receiving an Excellent rating in the Regular Banking and Platinum Credit Card category based on the 2018 Contact Center Service Excellent Award survey results from Service Excellence Magazine in collaboration with Carre - Center for Customer Satisfaction and Loyalty (Carre-CCSL). The BNI Contact Center actively acts as a point of contact for BNI customers through the voice of customer application, and provides the business units with insights into enhancing products, features and services for customers, and provides feedback to business/product owners regarding customer complaints; monitors complaint resolution based on the Service Level Agreement (SLA); adapts the internal regulations if there are changes in legislation, and makes improvements to the customer complaint handling Online Request Management application. The BNI Call application, through BNI Call 1500046 contributes as a data source providing integrated sales and service solutions for strengthening the Consumer and Retail Segments revenue enhancement opportunities through the referral and cross selling program so that BNI Call 1500046. To further enhance customer experience and customer satisfaction, the BNI Contact Center will continue to develop features for the BNI Call Application to improve service quality. Also, the BNI Contact Center supported the Financial Inclusion for All program at the Fin Expo 2018 event organized by the Financial Services Authority (OJK) on October 27, 2018, as well as the Digital Expo event held by Pertamina Geothermal Energy on December 12 and 13, 2018 to share its experiences regarding digitization. 324 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  325. Business Support Unit BNI COMPLAINT SETTLEMENT PROCEDURES AND CUSTOMER SERVICE BNI Contact Center as one of BNI ’s frontline services to BNI customers, continually endeavors to provide the best service, including settlement of every customer’s banking and credit card services complaint. BNI customers are provided with easy access to the complaints services through a number of media choices, both oral and written. BNI CUSTOMER COMPLAINT SUBMISSION MEDIA ORAL WRITTEN Customer Contact BNI Call 1500046 Customer visiting www.bni.co.id and sub menu Contact Us Customer visiting Nearest BNI's Branch Customers sending email to bnicall@ bni.co.id or fax (021)25541203 Customer visiting Nearest BNI's Branch The BNI Contact Center is supported by an integrated Online Request Management complaint handling application, so that the customer complaints receipt and settlement process can be handled through the application, simplifying the monitoring and settlement status of customer complaints. Customer verbal complaint settlement solutions are made within a maximum of 5 (five) working days *), and written complaints within a maximum of 20 (twenty) working days. If supporting documents are needed for the verbal customer complaints, BNI will ask the customer to submit the complaint in writing. Under certain conditions, the document requirement and complaint settlement can be extended for a further 20 (twenty) working days based on POJK Number 1/POJK.07/2013, as updated by POJK Number 18/POJK.07/2018 *) concerning Consumer Complaint Services in the Financial Services Sector. An extension of the complaint settlement period is notified in writing to the customer. *) Effective as of March 2019 PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 325
  326. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk SUBMISSION AND SETTLEMENT COMPLETION • • • • 1 Makes a complaint 2 Registers the complaint 3 Provide a receipt or registration number 5 Delivers extension of time notice ** 4 Delivers complaint settlement result * 6 Delivers complaint settlement result BNI strives to settle verbal complaints within a maximum of 5 working days and written complaints within a maximum of 20 working days. If supporting documents are needed for customer complaints submitted verbally, then BNI will ask the customer to submit a complaint in writing. If there is a lack of documents, the customer can submit the missing documents within a maximum of 20 working days. Under certain conditions, the document requirement and complaint settlement can be extended for a further 20 working days Based on OJK Circular Letter (SE OJK) No. 2/SEOJK.07/2014, as updated by OJK Circular Letter (SE OJK) No. 17/SEOJK.07/2018, BNI will provide information on customer complaint settlement via the telephone, e-mail, mail or short messages service (SMS). If the customer feels that the settlement solution provided by BNI does not meet their expectations, then they can continue the complaint settlement process through any Institution on the Financial Services Authority’s List of Alternative Dispute Settlement Institutions. 326 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  327. Business Support Unit UNIT SERVICES UNIT 2018 PERFORMANCE BNI is continually innovating and updating with the aim of improving the quality of its services . BNI consistently adjusts its service standards to keep up with the rapidly developing banking digitalization through its service standard renewal programs, enhancing frontliner competencies and simplifying service processes together with the appropriate risk mitigation making BNI services faster, easier and more accurate. Several initiations were carried out to support this, including; Overseas Branches services standardization, “D-Branch” Outlet services standardization, and with the Affiliate Wealth Manager Certification, Super Frontliner, and BNI Teller Service Quality Development programs. In an effort to accelerate business growth, BNI launched the “2nd Engine of Sales” service that is not only oriented towards satisfaction and solution for customers but also creates sustainable business opportunities for the Company to achieve a profit. A number of programs were initiated to prepare Branch Office frontliners as the spearhead of BNI’s business and services, including: Bancassurance Program, Emerald Segment Upgrade Program, Property Investment through Griya Program, Education on Capital Market Investment Program and Flexi Credit Card Program. The kick off for the BNI Professional Image program took place, a program designed to shape the image of every employee as someone with professional characteristics and ethics, reflecting their identity as a BNI person as well as the identity of the company. This program is a strategic step to improving the corporate identity through professional style employees, with good communication skills and business etiquette when interacting with customers and stakeholders, and who are digital intellectuals with a good understanding of technology and the use of social media. The efforts to improve service quality have had a positive impact, as reflected in the customer satisfaction surveys results conducted by independent institutions throughout 2018. BNI has received several awards including: 1. The Best Government Bank in Service Excellence in the Bank Service Excellence Monitor 2018 Survey by Marketing Research Indonesia (MRI); 2. The Best Government Bank for Satisfaction, Loyalty and Engagement (SLE) 2018 Survey by Marketing Research Indonesia (MRI); and 3. 2nd Overall for the Satisfaction, Loyalty and Engagement (SLE) 2018 Survey by Marketing Research Indonesia (MRI). 2019 WORK PLANS In 2019 the Service Quality Unit followed 3 (three) strategies to achieve superior and competitive service quality, including: 1. “Business Accelerator”, a service with a competitive advantage for accelerating BNI’s business achievements in both the consumer banking and business banking sectors. 2. Digital Services, a digital-based service including: a. Digital Mindset, to instill a digital mindset in officers who are in contact with customers. b. Analytical Data Optimization, to optimize “Big Data” with the aim of achieving business and service targets. c. Process Improvement, to improve business processes and service automation. 3. Beyond Services to provide added value for customers including: a. Services provided that exceed customer expectations. b. Services provided that exceed the industry average. c. Services provided that provide new experiences for customers. These service strategies are expected to produce customer-centric quality and service standards as a foundation to accelerating business achievements at all BNI customer touch points. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 327
  328. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk INFORMATION TECHNOLOGY To support digital transformation and competitive analytics, BNI has developed Big Data Analytics to utilize the advantages of machine learning and other analytical tools, supported by reliable data scientists. 328 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  329. INFORMATION TECHNOLOGY STRATEGIC POLICIES AND INITIATIVES The Information Technology development in the industry 4 .0 era has had an impact on the banking world. In an effort to support bank business innovation in the digital era, BNI developed strategic policies and initiatives during 2018. Information Technology Mission BNI 2018 Strategic Policies and Initiatives People, Process, Technology Agile and Dynamic IT Support Providing IT-based solutions to support businesses, through innovations and the application of IT governance, with controlled information security Providing availability & reliability based IT services Providing the IT needed to support the Strategic Plan to become competitive in financial services Providing efficient, superior, innovative and safe IT operations to ensure the availability of reliable and trusted IT services for business users Providing Decisions Support & Management Information System services Ensuring compliance with Banking IT governance IT 2018 Initiatives PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 329
  330. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk INFORMATION TECHNOLOGY DIVISION MANAGEMENTS STRUCTURE The Bank’s Information Technology (IT) Management is run by IT Work Units, namely the IT Solutions and Security Division and the IT Operations Division, who are supervised by the Director of IT and Operations, with the following tasks: NO Work unit Job Description 1 IT Solutions and Security Division Providing IT-based solutions to support business, through innovations and implementation of IT governance, with controlled information security. 2 IT Operations Division Providing superior, innovative and safe IT operations to maintain the availability, reliability and maintainability of IT services for business users. Based on the Board of Directors’ Decree No. KP/384/DIR/R dated November 9, 2018, the IT Director also oversees the Operational Division (OPR) and E-Channel Unit (ECN) with the following organizational structures: Wakil Direktur Utama Senior Executive Vice President of Information Technology Senior Executive Vice President of InformationTechnology IT Operations DivisionS Business Relations Management IT infrastructure IT Strategy & Architecture Service Operations Operations Division E-Channel Unit Information Security & Governance Solution Development BNI INFORMATION TECHNOLOGY ADVANTAGE Bank BNI’s advantages in the Information Technology field to support its business include: 1. BNI IT Work Unit has implemented IT bi-capital, whereby IT’s compliance and development flows runs in a more agile way to meet the faster time to market needs. 2. BNI’s data center is supported by a disaster recovery center that ensures maximum service availability. It has obtained an extension of its Tier III Certification to become an Unexpired Tier III Design (TCDD) in terms of design, and a Tier III Facility (TCCF) certification in terms of facilities from the Uptime Institute. By achieving this, BNI has become the first bank in Indonesia to have a data center with Tier III facility certification. 3. As a development of its data warehouse, BNI has developed big data to enable its businesses to gain better customer and business insight. 4. BNI also continues to innovate and develop information technology that is customer centric by focusing on comfort and security in digital transactions. 5. BNI IT Work Unit applies IT bi-capital, with an agile IT compliance and development flow enabling it to deliver a faster time to market. 330 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  331. Business Support Unit INFORMATION TECHNOLOGY UTILIZATION Information Technology ARCHITECTURE In an effort to harmonize information technology development , during 2018 BNI continued to refine the Application Architecture Landscape scheme as follows: Customer Management Products Processing Delivery Channel Payments Middleware DWH & Analytics Administration Bank Management Risk The Application Architecture Landscape Information Technology can be grouped as follows: 1. Delivery Channel, a channel for customer access to banking products such as outlets, ATMs, Internet Banking, Mobile Banking, API, etc. 2. Customer Management, an internal and external customer management system consisting of Contact Centers, Sales Performance Monitoring, and Loyalty. 3. Product Processing, a system for handling Customers, Funding, Lending, Credit Card Products, etc. 4. Middleware, a system that functions as a layer integrator between BNI and third party systems. 5. Data Warehouse and Analytics, consists of a Data Warehouse, ETL, Analytics API and Big Data. 6. Bank Management, a system that includes accounting and reporting applications. 7. Risk, a collection of risk management applications. 8. Payment, a payment transactions, money transfers, and transaction settlement module. 9. Administration, a collection of Administrative Applications and supporters. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 331
  332. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk DATA MANAGEMENT Data is the most valuable and treasured asset that is processed into guidance and support for businesses. Data has three enablers, namely People, Procedures (Data Governance & Strategy and System Operating Procedure), and Technology (Data Warehouse, Big Data, and Network). Data management output is in the form of data, information, and insights to support strategies & business decisions regarding products and services in accordance with customer needs. The Data Management mission is to realize a reliable Single Source of Truth for the bank’s business interests and act as a center of excellence in analytics at BNI. Information Architecture Principles Strategic Analytics Program Management Integrated Data Management (Data Governance, Data Quality & Data Profilling Metadata Management Source Systems DPK Information Delivery Loan Data Warehouse Others Analytics Services Master Data Big Data Data Archive Manual and External Data Security Data Lifecycle Management The data information flow in Data Management adheres to the Information Architecture Principle where data from various source systems is entered into the Data Warehouse (EDWH) and Big Data through an Extract Transfer Load (ETL) process, where it is then used as a database for report and analytic development. Data Governance is required to integrate the data from various source systems so that it can produce quality data and ensure an efficient information system. Big Data Analytics Implementation Strateg Leads/Daftar Structured Data EDWH Big Data Analytics: Data Mining, Statistical Modelling, Machine Learning, Artifical Intelligence Semi Structured Data Model Big Data Un-Structured Data 332 Adapting Quickly to Face Change Dashboard PT Bank Negara Indonesia (Persero) Tbk
  333. Business Support Unit To support digital transformation and competitive analytics , BNI has developed Big Data Analytics to utilize the advantages of machine learning and other analytical tools, supported by reliable data scientists. Complementing its existing enterprise data warehouse, the Big Data technology adoption went as expected. The Big Data platform with the latest technology was successfully implemented with several applied business cases. BNI’s ability to collect, process and retrieve value from a data set has increased, and is now not only limited to structured data, but can now access semi-structured and unstructured data in large volumes with a high data growth speed. Like other data management systems, Big Data has the ability to load data, retrieve data, or synchronize data between systems. Therefore, the integration between the Big Data system and other existing systems went well. In addition, it now has the ability to retrieve data from external sources using web crawling, where data from the internet becomes one of the data sources. Big Data also has advanced analytical tools, including tools for data mining activities, statistical modeling, machine learning, and artificial intelligence. With these devices, several outputs can be produced including data matching, predictive analysis, statistical models, listing customer prospects with specific offers, and dashboards. Big Data Analytics results will help BNI get to know its customers, identify new opportunities and realize data driven business leading to business value creation. To improve service quality and customer satisfaction, BNI continually adjusts its information technology capabilities based on technology developments and customer needs. The increased capabilities need to be accompanied by adjustments to the mindset to accommodate the trend in technological developments and the dynamic customer demands. Information Technology to support business needs is in line with BNI’s positioning as a Digital Bank, and references the 4 (four) IT strategic directions, namely New Digital Proposition, Governance Toward Performance, Strive for Operational Excellence, and the Innovative and Agile Organization. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 333
  334. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk INFORMATION TECHNOLOGY INFRASTRUCTURE CYBERSECURITY BNI has implemented a high availability infrastructure to minimize potential Information Technology operational risks, while at the same time maintaining customer satisfaction. High availability infrastructure is applied starting from the server, network, to the data center, with an active configuration and passive configuration as back up. It is supervised by a layered security architecture configuration, and supported by nonstop monitoring by the network command center and incident response teams who are experts in their fields. Strong cybersecurity is an important factor to gain customer trust, so BNI always pays serious attention to continuous cyber risk development for its business activities. The safeguards taken refer to international standards to protect BNI in general, as well as customers in particular. With its high availability infrastructure, service disruptions due to system failure can be minimized, as evidenced by the service stability during high volume transaction times, such as during religious and other holidays. In line with the increased business growth and the growing threat from cyber-crime, the safeguards carried out included: 1. Increased cybersecurity capacity through hardware and software investments such as anti-virus, Firewall and an Intrusion Prevention System (IPS), 2. Application of safeguards to prevent the spread of malware on ATMs, 3. Employee education to increase cyber security awareness, 4. Proactive 24x7 monitoring for potential cybercrime 5. Collaboration with stakeholders, including official government bodies and other cybersecurity activators. In response to the current widening trend of cyber attacks on customers, several safeguards on the customer side have been applied, including: 1. Application of customer protection mechanisms against fraud transactions caused by banking malware or social engineering, 2. Application of fake website detection on behalf of BNI, 3. Customer transaction notification mechanisms, 4. Continuous customer education regarding selfprotection through secure passwords, secure internet banking, secure mobile banking, secure transactions at ATMs and others. In line with the direction of digital banking development, cybersecurity will continue to be developed to guard the banking service innovations so that customer trust and comfort can always be maintained. 334 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  335. Business Support Unit INFORMATION TECHNOLOGY GOVERNANCE IT Governance includes leadership management , organizational structure and sustainable processes, to ensure the IT organization is aligned with the organization’s business strategy and objectives. Framework selection. Good IT governance requires a balance between People, Process and Technology aspects, and based on these considerations, BNI’s IT governance adopts various frameworks that are compatible with BNI’s IT service areas. CONTROL OBJECTIVES FOR INFORMATION AND RELATED TECHNOLOGIES (COBIT) Control Objectives for Information and Related Technologies (COBIT) is widely recognized as an IT management framework and IT governance. COBIT helps organize IT to meet the needs of BNI’s stakeholders through management of its process groups and enablers, where business objectives are mapped to IT objectives, and also by measuring their achievements and maturity. BNI’s IT uses the COBIT framework as a governance guidance because of the synergy between business objectives and IT objectives, focusing on data and information, which can be flexible when following the company’s work direction, and can be used in conjunction with other framework standards. INFORMATION TECHNOLOGY INFORMATION LIBRARY (ITIL) The Information Technology Information Library (ITIL) is the standard framework for IT Service Management (ITSM), used to align IT support services to BNI’s businesses. ITIL focuses on IT processes, procedures, tasks and service levels to support the corporate strategy, add value, and maintain IT competency levels. With ITIL, BNI’s IT operations establishes a baseline, as a service benchmark, as guidelines for the planning, implementation and measurement of its achievements. PT Bank Negara Indonesia (Persero) Tbk  ISO 27000 ISO 27000 is part of the Information Security Management Systems (ISMS) working standard that is used to manage information security risks in an organization. The ISO 27000 standard is used as a reference by BNI when establishing enterprise security solutions, both in terms of IT architecture, policies, development solutions, and IT operations. These standards are implemented in an end-to-end manner, starting from the core, surrounding systems, communication networks, applications, and access devices such as ATMs and EDCs. ISO 9001 ISO 9001 is a quality management system standard designed to ensure that companies meet the demands of stakeholders and adheres to regulatory requirements regarding their products and activities. BNI’s IT has implemented ISO 9001: 2008 (international standard for quality management system) within the scope of IT Operations and IT Security Management, and completed the ISO 9001: 2015 certification upgrade on July 30-31, 2018. Based on the external audit summary report regarding the IT unit achieving the quality objectives, it was concluded that the management system in the IT Unit met the requirements to upgrade the ISO 9001: 2015 certification on September 26, 2019. ISO 9001: 2015 certification in IT units will provide benefits to all IT units and management employees, by establishing mechanisms and quality standards focused on company performance, with a risk-based thinking approach, enabling the IT units to be more proactive in preventing and reducing undesirable events, and to continually improve the systems. Adapting Quickly to Face Change 335
  336. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk INFORMATION TECHNOLOGY FUTURE DEVELOPMENT PLAN INFORMATION TECHNOLOGY FUTURE DEVELOPMENT PLAN As part of its sustainable project planning system to meet the business needs for IT support, BNI conducted an IT Planning Session forum bringing together IT units with all BNI units. In the forum, these units discussed with IT their business needs together with their future target achievement and expectations, both in terms of solutions, security, operations, and data processing development plans, and reporting. The IT Planning Session Forum generated 122 (one hundred twenty two) application/architecture development plans to be initiated in 2019, including strategic requirements that will have a direct impact on the business targets achievement, as well as the usual business, to support for daily business operations. The IT development plan was submitted to OJK, in line with POJK No. 38/POJK.03/2016 dated December 1, 2016 concerning Application of Risk Management in the Use of Information Technology by Commercial Banks. New Digital Proposition Governance Toward Performance BNI IT Strategic Direction Innovative and Agile Organization Strive for Operational Excellence To ensure the application development plan implementation and to support the 2019-2023 corporate plan, BNI has established 4 (four) strategic IT directives, namely New Digital Proposition, Governance Toward Performance, Strive for Operational Excellence, and Innovative and Agile Organization. New Digital Proposition for how IT provides digitalization answers to bring something new to its users. The strategy direction encourages the creation of regular digital business value, by providing recommendations in the form of adjusting and developing new business models based on emerging IT trends or through digital innovations. Governance towards Performance for fulfilling good governance to encourage optimal performance, including effective prioritization, reliable portfolio management, demand management and IT planning in line with business needs, and good synergy between all units and subsidiaries. Strive for Operational Excellence for optimizing operational excellence through digitized and automated business processes while enhancing cybersecurity security and developing a consistently sustainable operating model. Innovative and Agile Organization for creating organizations that are adaptive to change with a fast deliverable capability, with a customer-centric innovation culture to appropriately and efficiently meet customer needs, and by transforming a visionary mindset in IT strategy and planning, and by implementing an Agile methodology. 336 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  337. Business Support Unit DIGITAL TRANSFORMATION Digital technology developments have significantly influenced the financial and banking services industry . This has driven BNI to remain adaptive in utilizing innovations that provide convenience, comfort and security for customers. In support of this, BNI has established an IT Architecture in line with the direction of digital transformation. Digital Banking IT Architecture BI-MODAL IT CREATE BUSINESS & IT TRANSFORMATION ASSURE CUSTOMER EXPERIENCE RELEASE PRODUCT PROCESSOR PROCESS CONSUMER INFORMATION INTEGRATION UNIVERSAL MESSAGING ACCESS SECURITY 3rd PARTIES DATA STORAGE BNI follows the BI-CAPITAL practice in its IT development that includes two separate but coherent work methods. The first method optimizes for the more predictable and well understood areas, while the second method is more explorative in solving new problems. Implementation is the application of both conventional and agile development methods, with the aim of providing an optimal, faster time to market, and customer centric service. The architecture components include, 1. Process, the capability for agile, prudent product development methods to meet time-to-market expectations. 2. Information, the capability for insightful and comprehensive information. 3. Integration, the capability for integrating inter-system processes and automation of workflow processes. 4. Storage, the capability for managing structured and unstructured data and information. 5. Product Processor, the core system and surrounding system capabilities that are responsive to developments and needs. 6. Access, the capability for providing modern and reliable access to services and products. 7. Universal Messaging, the capability for various types of messaging systems service. 8. Security, the capability for security to protect assets (data and information). 9. Consumers, the diversity of touchpoints between banks and consumers. 10. 3rd Parties including corporate, startup/fintech, commercial Off-The-Shelf (COTS) for both Premises and the Cloud. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 337
  338. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk The development of information and digital technology such as the Internet, Cloud, Big Data, Internet of Things (IoT), and Artificial Intelligence (AI) has triggered changes in the industry, better known as the 4.0 industrial revolution. This has been seen in the increasing use of communication and internet networks for many different purposes, the integrated automation process with the use of AI, decision making using insights obtained from the use of Big Data analysis, optimizing the use of the Cloud for business and personal needs, and connecting everyday devices with the Internet. These developments have resulted in changes in consumer behavior and encouraged the creation of new more suitable business models. To anticipate these changes, digital transformation have be carried out to include the integration of digital technology into the business processes. Digital transformation is not just changing analog technology to digital, but more, it will also be necessary to adjust various business processes that are driven by technological innovations so the processes can be faster, flexible and efficient, at a lower cost, with the potential to open up new business opportunities. The IT work units have explored innovations, both in terms of technology and business process optimization, and several technological initiatives have been introduced, including: 1. Research and Development (R & D) Blockchain Blockchain is a distributed ledger technology that has the ability to become a disruptor in the business world as it can eliminate the intermediary function. This technology can be used to create new business models or replace existing business processes to become faster, safer, and cheaper. The use case that has been tested is for cross border payments together with Fintech and an international corporation. 338 Adapting Quickly to Face Change 2. Research and Development (R & D) Intelligent Video Analytics Intelligent video analytics technology can be used to identify stationary and moving objects, facial recognition, space density analysis, building /space surveillance, identity verification, and other things. Using this technology, face recognition features have been tested for several use-cases such as for account opening through mobile phones and monitoring employee activities through CCTV. 3. Collaboration with various fintech and business startups BNI has established partnerships with the global Startup Accelerator Companies who have technology-based startup incubation & acceleration programs and have a reputation for connecting startups with various corporations. Through this collaboration, BNI will have the opportunity to take advantage of innovations/ solutions from various startups and fintech to support its business, improve the capability of the Bank’s internal processes, as well as other forms of cooperation. To optimize innovation both in terms of technology and business process optimization, BNI also has used the services of Independent International Research Institutions on an ongoing basis since 2007 to gain technology references, descriptions, trends, and insights, and insights into the development of global industry in general and banking in particular. PT Bank Negara Indonesia (Persero) Tbk
  339. Business Support Unit DIGITAL BANKING DIGITALIZATION DEVELOPMENT ACCELERATION In line with BNI ’s vision to become a financial institution that excels in service and performance, BNI continues to make innovative improvements to answer the challenges and changes from the latest developments. These innovations were developed through 5 (five) digital banking capabilities, namely: 1. Digital Branding and Proposition Developing customer-persona based services that provides information and products according to the customer needs. This process includes design thinking to validate these needs more deeply; 2. New Digital Channel a. Developing the Digital Branch as a physical channel by utilizing smart kiosks; b. Developing BNI’s Digital Banking-based Mobile Platform Application, such as: YAP (QRbased global network payment feature); c. Developing Chat Bot (Artificial Intelligent (AI) to serve messaging-based banking information); 3. Digital Business and Ecosystem a. Improving the digital business solutions penetration program in several priority ecosystems; b. Developing an automation process in the BNI operational process chain; 4. Agile IT a. Developing Two Speed IT Development (Development of acceleration and agility capabilities in the solution development process), b. Developing API Management with the capability of connecting potential digital ecosystems, such as the marketplace ecosystem, smart city, and etc.). c. Providing Big Data with its behavioral analytic capabilities to deliver contextual solutions to customers. 5. Digital Culture & Innovation a. Building a BNI Innovation Center with the capability to incubate potential digital business ideas, b. Organizing the BNI Business Innovation Awards (Binnova) as an idea and business innovation competition for BNI employees to spark an innovation spirit, c. Creating BNI Digital Ninja as a change agent program for supporting the internalization of the digital culture in BNI. 2019 Strategy In line with the BEYOND program contained in BNI’s corporate plan, BNI’s digital banking strategy is “Develop B2B2C business ecosystems and digital attackers (small and consumer segments) by optimizing the customer journey, analytical data and maintaining venture capital to capture opportunities for Beyond Banking” . PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 339
  340. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk ELECTRONIC BANKING KALEIDOSKOP E-BANKING 2018 January February March malljepara.com guteninc.com kalbestore.com Launched CINTA as an interactive banking information media for customers that can be accessed through chat platforms unionspace.id April Ranked 3td for Digital E-Money Bank Brand at the 7th Digital Brand Awards by Infobank & Isentia. Implementation of the National Payment Gate (GPN) through the Joint Debit ATM Network May Collaborated with Angkasa Pura Cargo for the implementation of cashless transactions using TapCash. grandclarionmakassar.com mokapos.com balilife.org June dewaweb.com July Cooperation between yap! in the Asian Games 2018 tickets sale kiosks mesinlaundry.com luxatme.com August September October 340 Launched yap! as a payment application using the QR method urbanathletes.co.id 2nd Best Collecting Agent at 2018 Transaction Banking Awards by Infobank & PT Rintis Sejahtera. 1st Best Transaction Growth as Acquirer Bank at 2018 Transaction Banking Awards by Infobank & PT Rintis Sejahtera. Implementation of Agency cooperation between BNI & PT Kimia Farma (Persero) Tbk Implementation of Agency cooperation between BNI & PT Dompet Anak Bangsa (GOPAY) The Best Bank in Digital Services pada Indonesia Banking Awards 2018 oleh Tempo Media Group & Indonesia Banking School. Best ICT Implementation in Sales & Marketing for Banking Category pada Indonesia Best eMark Award oleh Universitas Telkom & Majalah SWA – Business Digest Best e-Commerce Issuing & Acquiring pada Visa Award Night 2018 Akuisisi Ranch Market sebagai Merchant yap! Trial of international e-wallet integration (LiquidPay & WechatPay) as the source of yap! funds at the IMF Annual Meeting in Bali. Implementation of Agency cooperation between BNI & PT Axiata Digital Services Indonesia November Best Beneficiary Bank at the 2018 ATM Bersama Awards by PT. Artajasa Payment Electronics zomato.com/id alodokter.com December wecare.id parentstory.com Implementation of Agency cooperation between BNI & PT Bukalapak.com Implementation of Agency cooperation between BNI & PT Permodalan Nasional Madani Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  341. Business Support Unit E-BANKING PRODUCT DEFINITIONS BNI offers a variety of E-Banking facilities including ATM , SMS Banking, Mobile Banking, Internet Banking, Phone Banking, Agen46, Tap Cash, Uniqku, and Electronic Data Capture (EDC). An explanation of each product is as follows. ATM Banking service channel that allows customers to make cash deposits, balance checks, transfers, payments and purchases. BNI currently has 18,202 (eighteen thousand two hundred two) ATM machines throughout Indonesia connected to ATM Link, ATM Bersama, ATM Prima, International Mastercard, Visa, JCB, APN, Union Pay and Cirrus Networks. SMS BANKING BNI’s SMS Banking channel can be used by customers for transfers, payments and purchases transactions and can be accessed through SMS Banking, Syntax SMS and USSD application menus. MOBILE BANKING Customers can use BNI’s Mobile Banking transactional channel for transfers, payments and purchases through Android and iOS based smartphone banking applications. BNI Mobile Banking can also be activated and used for transactions from overseas. INTERNET BANKING BNI’s Internet Banking is one of BNI’s e-Banking transactional channels that can be accessed by customers via computers or mobile phones through BNI’s Internet Banking URL. BNI Internet Banking has reliable Personal Financial Management features and comes with security standards that use 2 types of financial transaction authorization tools, namely BNI e-Secure and BNI m-Secure. AGEN 46 BANKING Agen46 are BNI partners who provide banking services to the public in the context of inclusive finance. Besides being BNI’s partners providing a wide range of banking services, Agen46 also handle a wide range of government programs, such as relief aid or subsidies distribution, either in cash or non-cash. Through Agen46, banking transactions are easier, faster and easily accessible in the surrounding communities. (In accordance with Agen46 tagline: Easier, Faster, Closer). PT Bank Negara Indonesia (Persero) Tbk  TAPCASH TapCash is an electronic money cash card that can be used for making purchase payments at BNI-registered merchants, for various modes of transportation, and for toll roads. TapCash users can use the TapCash Go application to facilitate balance checks and balance top ups. UNIKQU UnikQu is a BNI server-based e-money development that can be accessed and used by BNI customers and non-customers through iOS and Android-based smartphones. With its flexibility, UnikQu payments can be made with merchants with an IT infrastructure, and with merchants who do not have any IT infrastructure such as street vendors or market traders. UnikQu balance top-ups can be done through BNI SMS Banking, BNI Mobile Banking, BNI Internet Banking, and Agen46. Also, UnikQu can be used to purchase telephone credit and to make postpaid telephone payments. YAP! Yap! is a QR payment application that uses the QRIS national standards. Yap! has 3 (three) sources of funds for completing each transaction, namely Debit Cards, Credit Cards and UnikQu providing flexibility to users when making payments. Payments made using QR can be through an EDC machine, yap! QR (tent card), and by push notification. Currently, Yap! has been implemented in a number of merchant segments including micro businesses, chain stores, Business to Business (B2B) and e-Commerce. CINTA CINTA is a chatbot development that uses artificial intelligence and machine learning technology to makes it easier for users to access banking information through social media platforms. CINTA has the capability to create a personalized program, survey and educate customers, with transactional features integrated into the Yap! payment method. Adapting Quickly to Face Change 341
  342. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk ELECTRONIC DATA CAPTURE (EDC)/ MERCHANT NETWORK The merchant network is a network service for receiving credit, debit and prepaid card transactions, a collaboration between banks (acquirers) with the global principals such as VISA, MasterCard, Japan Credit Bureau (JCB), UPI, and local principals such as Artajasa, Prima, and ALTO. As a principal member, the merchant network cooperates with shops, hotels, restaurants and various other business entities that accept payment for goods or services using credit, debit and prepaid cards, and receives a fee through the merchant discount rate ( MDR) for each transaction. E-BANKING USER COMPOSITION 12% 20% 13% 1.894 1.369 15% 2.893 1.781 2018 2017 9.820 8.497 73% 67% SMS Banking Internet Banking Mobile Banking Growth (Monthly) Channels 2018 2017 2016 % User Internet Banking 1,893,721 1,781,297 1,538,020 10,251 0.54% Mobile Banking 2,892,518 1,368,771 506,564 132,637 4.81% SMS Banking 9,819,514 8,497,014 6,873,626 108,000 1.11% E-BANKING PERFORMANCE IN 2018 The E-Banking product performance can be seen in the growth in the number of users, number of transactions, and transaction volumes reached in 2018 and are as follows. ATM Uraian Total Transactions Transaction Volume (Rp) 2018 2017 Growth 1,288.9 million 962.3 million 33.9% 668.0 trillion 600.1 trillion 11.3% During 2018, the ATM channel service number of transactions increased by 326.6 million, or 33.9% to 1,288.9 million transactions compared to 962.3 million transactions in 2017. The nominal value of transactions increased by Rp67.9 trillion, or 11.3% to Rp668.0 trillion from Rp600.1 trillion in 2017. 342 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  343. Business Support Unit SMS BANKING Description 2018 User Total Transactions Transaction Volume (Rp) 2017 Growth 9.7 million 8.5 million 15.6% 504.0 million 389.2 million 29.5% 51.2 trillion 39.9 trillion 28.3% During 2018, the number of SMS Banking users reached 9.7 million, a 15.6% increase from last year’s 8.5 million users. SMS Banking handled 504.0 million transactions in 2018, an increase of 29.5% compared to 389.2 million transactions the previous year. As a result of these increases, the SMS Banking transaction value in 2018 amounted to Rp51.2 trillion, an increase of 28.3% compared to Rp39.9 trillion the previous year. MOBILE BANKING Description 2018 User Total Transactions Transaction Volume (Rp) 2017 Growth 2.9 million 1.4 million 111.3% 96.9 million 32.3 million 199.4% 133.4 trillion 49.8 trillion 167.7% During 2018, the number of Mobile Banking users reached 2.9 million users, an increase of 111.3% from last year’s 1.4 million users. Mobile Banking handled 96.9 million transactions in 2018, an increase of 199.4% compared to 32.3 million transactions the previous year. As a result of these increases, the Mobile Banking transaction value in 2018 amounted to Rp133.4 trillion, an increase of 167.7% compared to Rp49.8 trillion the previous year. INTERNET BANKING Description 2018 User 2017 Growth 1.9 million 1.8 million 6.3% Total Transactions 27.5 million 25.4 million 8.3% Transaction Volume (Rp) 91.3 trillion 94.0 trillion -3.0% During 2018, the number of Internet Banking users reached 1.9 million users, an increase of 6.3% from last year’s 1.8 million users. Internet Banking handled 27.5 million transactions in 2018, an increase of 8.3% compared to 25.4 million transactions the previous year As a result of these increases, the Internet Banking transaction value in 2018 amounted to Rp91.3 trillion, down 3%, compared to Rp94.0 trillion the previous year. AGEN46 Description Total Agents 2018 2017 Growth 111,836 agen 69,589 agen 60.7% Total Transactions 79.3 million 34.4 million 130.4% Transaction Volume (Rp) 94.5 trillion 11.6 trillion 715.6% Pandai Accounts 9.2 million 4.8 million 91.7% BNI Pandai TPF 636.3 billion 561.9 billion 13.2% Agen46 TPF 658.4 billion 592.8 billion 11.1% During 2018, the number of BNI Agen46 reached 111,836 agents, an increase of 60.7% compared to 69,589 agents in 2017. In 2018 there was a significant increase in the number of transactions handled that reached 79.3 million transactions, an increase of 130.4%, compared to 34.4 million transactions in 2017. Sales volume increased 715.6% reaching Rp94.5 trillion in 2018, compared to Rp11.6 trillion in 2017. The number of Pandai accounts in 2018 increased by 91.7%, reaching 9.2 million accounts compared to 4.8 million accounts at the end of 2017. The TPF generated by these BNI Pandai accounts reached Rp636.3 billion, an increase of 13.2% compared to Rp561.9 billion in 2017. Total Agen46 TPF increased by 11.1% in 2018, and amounted to Rp658.4 billion compared to Rp592.8 billion in 2017. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 343
  344. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk TAPCASH Description 2018 Total Cards Total Transactions 2017 Growth 4.5 thousand 2.9 thousand 56.8% 50.8 thousand 23.2 thousand 119.1% 807.1 billion 362.5 billion 122.7% Transaction Volume (Rp) During 2018, the number of TapCash cards reached 4.5 million, an increase of 56.8% compared to2.9 million cards the previous year. The number of Tapcash transactions reached 50.8 million transactions in 2018, an increase of 119.1% compared to 23.2 million transactions the previous year. As a result of these increases, the Tapcash transaction value in 2018 amounted to Rp807.1 billion, an increase of 122.7%, compared to Rp362.5 Billion the previous year. UNIKQU Description 2018 2017 Growth User 109.2 thousand 68.2 thousand 60.0% Total Transactions 254.3 thousand 45.2 thousand 462.7% 7.1 billion 1.9 billion 122.7% Transaction Volume (Rp) During 2018, the number of Unikqu users reached 109.2 thousand. The number of Unikqu transactions reached 254.3 thousand, an increase of 462.7% compared to 2017, with a transaction value amounting to Rp7.1 billion. ELECTRONIC DATA CAPTURE (EDC) Description 2018 2017 Growth Total Transactions 40,9 million 34,0 million 20,3% Transaction Volume (Rp) 55,1 trillion 46,7 trillion 18,0% During 2018, the Electronic Data Capture (EDC) services purchase transactions increased by 20.3%, reaching 40.9 million transactions compared to 34.0 million transactions in 2017. Transaction value increased by 18% to Rp55.1 trillion in 2018 compared to Rp46.7 trillion the previous year. CINTA Description Followers 2018 2017 349.0 thousand - During 2018 CINTA had 349.0 thousand followers using the Line application platform, and actively provided various promos, surveys/couponing information and customer education through the chat platform. 344 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  345. Business Support Unit YAP ! Description 2017 2018 Total User 419,2 thousand - Total Merchant 515,4 thousand - 6,7 million - 687,8 billion - Total Transaction (Rp) Transaction Volume (Rp) During 2018, Yap! acquired 419.2 thousand users and 515.4 thousand merchants. In its first year, it recorded 6.7 million transactions with a value of Rp 687.8 billion through purchase transactions (regular, chainstore, e-commerce) and B2B (fiduciary payments from the AHU Directorate General). BNI E-CHANNEL TRANSACTION CONTRIBUTION During 2018 the e-channel transactions contribution to all banking transactions was above 90% with an average contribution of 95.06%. The highest transaction contribution occurred in June with 96.58%. The growth in e-channel transactions contribution can be seen in the following graph. BNI E-Channel Transactions Against BNI Overall Transactions 96.58% 94.63% JAN 95.05% 94.98% 95.09% 95.20% FEB MAR APR MAY PT Bank Negara Indonesia (Persero) Tbk  94.56% JUN JUL 94.78% AUG 94.40% SEP 94.74% OCT 95.70% NOV 94.96% DEC Adapting Quickly to Face Change 345
  346. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk BNI AS A PIONEER IN BANKING TECHNOLOGY CINTA CINTA is a chatbot development that uses artificial intelligence and machine learning technology. CINTA uses chat platforms to provide services to CINTA followers, especially BNI customers in the millenial segment. The value proposition offered is its simple, personalized, familiar feel. CINTA has the capability to create a personalized program, and has an ATM-Locator, customer education facilities, surveys and couponing. YAP! Yap! is a QR payment application providing flexibility and ease of transaction as its users can choose from 3 (three) sources of funds that include credit cards, debit cards and UnikQu. Yap! is easy to install and reaches the micro market segment, helping BNI become an agent of development by creating a cashless society ecosystem. Merchant payments using Yap! can be through an EDC machine, Tent Card, or by push notification. E-WALLET TECHNOLOGY e-wallet Technology is a system developed for the purpose of distributing Government program services. Through this system, every transaction can be divided based on their respective functions so as to present auditable and accountable information. The e-wallet system is currently used for the distribution of the Bansos program (Family Hope Program, Non-Cash Food Assistance, and PIP) and subsidies (fertilizer and LPG). For Bansos activities all Bank Himbara managed by BNI as its owner uses the e-wallet technology system. EDC OFFLINE EDC Offline is a system developed by BNI to deliver transaction services in remote areas that have no access to a network infrastructure. This system was built without the need to use a network infrastructure to conduct transactions with verifications using Biometric technology. Currently this service assists Government programs in distributing social assistance in remote areas. MARKETPLACE e-commerce UMKMBNI, as one of the government’s development agencies, responsible for developing the market for creative industries, in this case MSE. With the UMK e-commerce system, MSE markets in areas with good potential can enjoy a more open market, both domestic and international. This system is already integrated with the payment system and distribution/delivery system. E-RETRIBUTION MARKET e-Retribution Pasar is a system that integrates the management of rental places and tax payments. Through this system, local governments can easily monitor tax levies on local markets so as to increase local tax revenue. Through this system, the use of kiosks in the market can become very effective and optimal as they can be monitored better. AGEN46 Agen46 is a Digital Financial Services (DFS) system, Laku Pandai (Officeless Financial Services for Inclusive Finance), and e-Payment service where BNI offers its banking services for all Indonesian people living in remote areas of Indonesia. Currently there are more than 111 (a hundred eleven) thousand agents throughout Indonesia. The system runs on the web and mobile platforms, and Agen46 are equipped with Android EDC to facilitate transactions. 346 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  347. Business Support Unit Human Capital CENTRAL ROLE FOR BNI HUMAN CAPITAL Business growth and technological developments in 2018 became increasingly faster and more competitive . In this increasingly competitive environment, human capital become an important factor in supporting BNI’s success in realizing its vision as a financial institution that excels in service and performance. Reliable human capital (HC) management, and being able to adapt to business demands, are the main supporting factors to ensuring the sustainable success of Banks strategy. 2018 was declared as the year of strengthening the digital human capital management policies. In 2018, the foundation for the digital human capital management applications began to be built. The changes will happen in stages, both in terms of infrastructure and digital mindset. Realizing the vision of being a financial institution that excels in service and performance requires employees with high engagement and productivity. The aspects that affect BNI employee engagement include leadership, career paths, rewards and remuneration, organizational policies, learning and development, performance management, work environment, work life balance, and a quality infrastructure. Factors affecting employee productivity include business processes, organization, technology, and an execution culture. Therefore, to develop employees with high engagement and productivity requires that BNI appropriately intervene on aspects that are considered not optimal. Bank Negara Indonesia Thinking System Table BNI GROUP AS A FINANCIAL INSTITUTION WITH SERVICE & PERFORMANCE EXCELLENCE HIGHLY ENGAGED EMPLOYEE LEADERSHIP CAREER REWARD & REMUNERATION ORGANIZATION POLICY PERFOMANCE MANAGEMENT WORKING ENVIRONMENT HIGHLY PRODUCTIVE EMPLOYEE PROCESS ORGANIZATION TECHNOLOGY EXECUTION CULTURE WORK LIFE BALANCE WORKING INFRASTRUCTURE HUMAN CAPITAL INTERVENTION LEARNING & DEVELOPMENT PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 347
  348. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk HUMAN CAPITAL ARCHITECTURE BNI’s human capital management strategy is expected to build the foundation for supporting BNI’s dynamic strategy, in line with the demands of the banking industry today. The Human Capital Architecture (HC Architecture) is a guideline for managing BNI’s human capital. All HC Architecture components result in an Employee Value Proposition (EVP), which becomes BNI commitment that is trusted and agreed upon between Banks and employees. BNI’s EVP is “Together to make BNI the best place to contribute, learn and grow to become the pride of the country”. The use of the word “Together” emphasizes that the employees and the company are two sides of a coin that are inseparable when realizing BNI goals. BNI as an organization has certain goals to achieve with strategies to achieve these goals and an organizational culture that guides behavior. In line with these three factors, the employees (people) are expected to perform in a way that supports the organizational goals, with competencies that are aligned with the Banks strategy, and a behavior that is in line with the organizational culture. So that the employee value proposition can be realized, a talent management system is needed to support the realization of all organization and employees aspects. The human capital management system, in broad terms, consists of talent and succession, learning and development, and reward and recognition. When implementing this policy, technology plays an important role, as the main supporting infrastructure, for implementing the more effective and efficient policies. All policy implementations run optimally when supported by Information Communication and Technology, as the main infrastructure, and with the active role of leaders. Talent & Succession omm un i ca ti o nT ec Organization Strategy Lead ers hip Information C nology tion Tec Competency nica p rshi ade Le u mm Co ce r vio a eh re n io an EVP ltu Inf orm atio nC at orm People Reward & Recognition Per f l a Go Cu Inf or m no l y og B Learning & Development y og nol ommunication Tec Leadership 348 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  349. Business Support Unit TALENT MANAGEMENT POLICY TO ACCELERATE LEADERSHIP DEVELOPMENT In line with the purpose of carrying out the sustainable human capital management process , the talent management process implemented at BNI focuses on preparing, developing and maintaining employees in line with BNI’s Employee Value Proposition (EVP). BNI understands that talent management is a process that must be carried out consistently and takes place over the long term. The three main components in the Talent Management System (Talent & Succession, Learning & Development, and Reward & Recognition), as part of the HC Architecture, include five aspects consisting of Talent Acquisition, Talent Classification, Talent Development, Talent Mobility and Talent Retention. Each talent management aspect involves the Talent Committee that comprises BNI empowerment leaders. BNI employees management does not only focus on numbers but also on employee capabilities, meaning that the learning process given to prospective employees also becomes increasingly focused and directed to ensure that employees have the suitable capabilities. The number of employees in 2018 reached 27,224 people, and this number is considered enough to support Banks business targets based on Earning per Employee (EPE) indicators. Employee productivity in 2018 was Rp529 million/employee, an increase of 12% compared to the previous year. The turnover rate in 2018 was 4.76%, which is considered a healthy turnover, and is below the national banking industry turnover average. TALENT DEVELOPMENT TALENT ACQUISITION To obtain reliable HC, an effective recruitment path and sourcing channels are required, and in 2018, BNI opened up a number of recruitment programs for various positions. In line with BNI’s goal of becoming a Leader’s Factory for both the BNI Group and for Indonesia, leadership development acceleration is absolutely necessary. Talent Development is a synergy between Banks and the employees, from the planning process through to its execution. A Management Trainee program, known as Rookie 46, is BNI’s flagship program for recruiting the best candidates with strong leadership and qualified capabilities. The program selection stages are conducted in an innovative and challenging way to obtain the future leader candidates. Participants passing the initial selection, will undergo the advanced learning and selection stages over 2 (two) years with various learning methods, including in class learning, social learning and experiential learning. The main emphasis for Rookie 46 participants is on the experiential learning method with its overall exposure to the banking business. At the end, participants who graduate will be placed in a number of strategic positions at the manager level. GROWING A LEARNING CULTURE The Talent management system at BNI is competency-based and aims to ensure that employees have the appropriate competencies for the intended position (right man in the right place). To support this competency-based Talent Management System, BNI has a competency dictionary, and for each position in BNI has a specific competency profile. The competency dictionary lists all soft and hard competencies in BNI, and the specific competency profile lists the competencies needed for each position to carry out the work optimally. The Officer Development Program (ODP) is aimed at recruiting new university graduates for careers in accordance with their regional areas. Participants in this program will receive comprehensive training for 6 months. In 2018, there were 674 employees recruited through this channel ensuring that the regeneration process in BNI was conducted optimally. In 2018, BNI also improved the recruitment process in a number of areas, including through the use of technology and social media to make it easier for candidates to get information regarding employee recruitment, and to follow the selection process. As well as opening recruitment sites, BNI also actively uses social media as effective sourcing channels for recruiting potential candidates. PT Bank Negara Indonesia (Persero) Tbk  BNI employee competency development starts by shifting the learning paradigm from the learning center to the learner as the center of learning, which means learning centers are learners. By doing this employees are not only referred to as learners but also as adult learners, namely individuals who freely and actively choose for themselves why, how and when to conduct learning and sharing based on their needs and preferences. It is also based on the fact that employees with the same job position do not necessarily need the same learning as others, but are strengthened as each of them is responsible for their own development. The change in the learning paradigm from the learning center to being learner as the center of learning is a gradual process that begins with a change in mindset, coupled with a complete learning infrastructure. Adapting Quickly to Face Change 349
  350. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk LEADERSHIP DEVELOPMENT ACCELERATION In 2018, BNI focused on developing leadership capabilities at every staff level with the aim of preparing short and long term Leader’s Successor. Leaders Create New Leaders was one of the themes in 2018. In line with the concept of leader empowerment, a leader is not only required to be able to lead but also to create cadres as future leaders. The Leaders Create New Leaders theme is further described as: 1. Building Immediate Successor Is a program to prepare successors to occupy leader positions in the near future. Employees who enter the program are divided into two categories, those that are ready to occupy the leader position (Ready Now), and those that require some short term development (Ready with Development). Both leaders and successors in this program are expected to be able to maintain their consistently, both in terms of performance and capability, and be ready to be assigned to fill certain positions at any time. 2. Preparing Future Leader Is a program to prepare future leaders for the manager level and below. To ensure that candidates have the relevant competencies, the capability development needs to be carried out from the start and monitored periodically. The method of developing successor candidates uses the 70:20:10 concept, comprising experiential learning, social learning, and in class learning. One of the experiential learning models for future leaders is organizing the Glowing Night Run event. This activity involves improving a number of competencies for future leaders. TALENT RETENTION EMPLOYEE ENGAGEMENT BNI regularly conducts Employee Engagement Surveys (EES) aimed at consistently understanding the level of employee engagement with the company so that the company is able to establish policies that are in accordance with Banks aspirations. In 2018, BNI refined its method of measuring employee engagement with a simplified and digitized method so as to facilitate respondents in filling out the questionnaires. In this way the employee engagement measurement can 350 Adapting Quickly to Face Change be carried out continuously (on going), with the company gaining feedback from employees at any time. As a result, BNI can immediately roll out intervention programs for each engagement driver considered to be less than optimal. The engagement level results in 2018 reached 88%, an increase of 5.17% compared to 82.83% in 2017. REWARD AND RECOGNITION BNI’s remuneration strategy is aimed at attracting, motivating and retaining talent with superior performance and competencies, to support the achievement of Banks vision. To implement a remuneration strategy that stays competitive in the market, the 2018 initiative for adjusting remunerations was a continuation of the 2017 remuneration strategy. In 2017 the remuneration program focused more on fixed pay and variable pay. Whereas in 2018 it focused on benefits and allowances. Benefit enhancements included health benefits, pension benefits, and location benefits. WORKING ENVIRONMENT Collaboration is an important factor in achieving the Bank’s vision and BNI realizes that to face the challenges of an increasingly competitive business, strong synergy between all components in BNI is required. Currently, the work environment shape is increasingly being pushed towards open space that is considered appropriate to the concept of agile work that promotes collaboration. With this in mind, BNI has increasingly encouraged open work spaces. In 2018, BNI established 46 Hub as a Coworking Space that employees could use for work as well as a space where BNI communities could gather. In BNI there are a number of communities that employees can participate in to channel their interests and talents, both in the arts, sports or hobbies, and BNI helps employees find the community that suits their interests. This channeling of interests and talents is not only to internal communities, but also to external activities, one being the 2018 SOE Sports and Art (Porseni) Week. In the Porseni activities, BNI came out as General Champion with 4 (four) Gold medals (Marawis, Ragam Talenta, MTQ Putri, Solo Vocal), 5 (five) Silver (Tennis, Band Group, Regional Dance, MTAQ, Duta BUMN Putra) and 2 (two) Bronze (Stand Up Comedy, Vocal Group). In addition, BNI supporters were also recognized as the best Supporters of the 2018 SOE PORSENI PT Bank Negara Indonesia (Persero) Tbk
  351. Business Support Unit STRENGTHENING DIGITAL TRANSFORMATION IN HUMAN CAPITAL MANAGEMENT BUILDING A DIGITAL FOUNDATION IN HUMAN CAPITAL MANAGEMENT Digitalization in human capital management is realized gradually , in line with the overall policy implementation process. BNI realizes the importance of technology in managing its human capital, and so a number of digitalbased applications are gradually being developed to conform to the latest human capital management policies. These applications will be built in an integrated manner in accordance with the information system architecture and human capital management technology, ensuring that all human capital information can be easily accessed, and forms the basis for data-based HC management. PROVIDING A DIGITAL LEARNING INFRASTRUCTURE TO SUPPORT EMPLOYEES AS A CENTER OF LEARNERS For employee capability development, in 2017 BNI SMARTER (BNI Integrated Learning Monitoring System) was developed, as a learning concept that follows the 70:20:10 Learning and Development Theory. This learning concept has a greater impact if it combines experiential learning, learning from others and formal learning (in both real and online classes). This can be followed through the internet-based learning infrastructure on the bnicorpu.co.id website, and in 2018 included the following: 1. BNI MoRe UnLeaSh (BNI Monitoring Learning and Sharing Upload) An application to foster a learning and sharing culture among employees, by stimulating employees to learn and share every day and register online through the application. BNI employees are required to conduct 46 hours of learning and 46 hours of sharing annually. 2. BNI Expert Locator (BEL) BNI Bank has mapped more than 600 BNI employees at a minimum Assistant Vice President (AVP) position, who are experts in their fields. Through the BNI Expert Locator application, employees can search for the experts they need, and can contact them directly. This activity is immediately registered as a learning realization. 3. BNI Digital Learning Learning modules that can be accessed by employees anywhere and anytime, in the form of pdf, gamification, bite size videos etc. They also contain pre and post tests, smartbooks and learning program modules, held as PT Bank Negara Indonesia (Persero) Tbk  blended learning and 100% online learning. 4. BNI Learning Wallet (BLW) A personal learning budget, managed by the employees themselves, with the aim of helping them fill their competency gap, or improve their work to be smarter, faster and more efficient. The BLW budget can be adjusted based on their talent classification results, total cash (salary), learning and sharing realization, and the learning budget available and managed by BNI Corporate University. The online BLW starts with the learning plan through to the reimbursement of the learning costs. 5. Learner’s Virtual Assistant (LeVA) An application based on Artificial Intelligence (AI) that can be downloaded via a smartphone, where employees can interact with bots related to BNI Corporate University’s learning modules and programs, or those related to Human Capital, using text or voice commands. By studying with LeVA, employees do not have to read a complete module to find the knowledge required. 6. DEEP46 A learning program in the form of daily questions, to be done online between 00.00 - 12.00 WIB with the aim of helping employees master the competency needed in their job position. 7. Daily Check In An application to oversee the on the job training (OJT), In Service Training and Evaluation (ISTE) and Field Evaluation (Evalap). This is to ensure learning participants, mentors and Unit Leaders can do their job after following the learning. 8. Digital Leadership for All Level A learning program for all office levels, from basic employees to directors, aimed at increase the capacity and leadership capabilities of BNI employees. Employees are free to follow leadership learning based on the assessment and mobility plan results, where learning can be started at any time (multy entry) and completed at any time (multiple exit). 9. Info Public Training A menu to help employees use their BLW budget, supported by the best training provider information along with a learning event schedule Adapting Quickly to Face Change 351
  352. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk OTHER PROGRAMS BINA BNI PREPARING EMPLOYEES FOR RETIREMENT The BINA BNI Apprenticeship Program is a manifestation of BNI’s care and social responsibility, and was continued in 2018. There are 3,838 participants in the BNI BINA apprenticeship program that is aimed at providing new graduates with knowledge, skills and abilities (fresh graduates) to compete in the workspace. BNI pays attention to employee welfare, both during their active service and after retirement. The transition period from their previous work and activities to retirement must be prepared for well, as the change is not felt financially but also in their daily activities. Therefore, to prepare employees to continue to be active after retirement, and to maintain their health, post-service training is provided including how to start a business and how to manage finances in retirement. During 2018 there were 14 batches involving 207 employees who followed pre-retirement training. The training will also teach the employees on how to prepare mentally, psychologically and financially during retirement age. To ensure employees maintain their health, funds gathered during their active service with BNI will be utilized after retirement. BNI INNOVATION AWARDS (BINNOVA) 2017 – 2018 A series of programs to develop an employee innovation culture, the BNI Innovation Awards (Binnova) are held annually. For 2017 - 2018, there were several process improvements, in the form of Design Thinking and Prototyping training for finalists, innovation incubation for 10 (ten) best teams, and comparative study opportunities for the 3 (three) best teams in Shanghai and Hangzhou, China where they had the opportunity to visit a number of global financial technology companies, one of which was Alipay. The improvements are aimed at continuously providing a better innovation experience for the participants, and transmitting the spirit of innovation culture throughout the organization, which in turn will have implications for the development of BNI’s business over the long-term. BNI PROFESSIONALISM AWARD (PERFORMA) 2018 The BNI Professionalism Awards (BNI Performa) 2018, is a competition to support BNI’s Employee Value Proposition (EVP), “Together to create the best place to contribute, learn and grow, to become the pride of the country”, and to promote BNI’s work culture that focuses on Professionalism, to help accelerate BNI’s sustainable business growth. BNI Performa is expected to produce employees with leadership abilities in accordance with PRINCIPLE 46, and ready to be representatives in the 2019 DUTA BUMN. 352 Adapting Quickly to Face Change INDUSTRIAL RELATIONS The quality of industrial relations between management and the trade unions is consistently being improved, and the trade unions are involved in the human capital policy making through a co-creation process. In addition to the policy making process, the partnership forum activities functions as a means of delivering aspirations Banks, and this happened 33 (thirty three) times in 2018. Also, in 2018, arrangements were made for the Collective Labor Agreement (PKB) to be socialized to all employees. BNI’s Human Capital Division (HCT) has an HCT Info service that is accessible at any time by employees through digital media such as websites, e-mail and telephone networks to facilitate settlement and follow-up of staffing obstacles experienced by employees. PT Bank Negara Indonesia (Persero) Tbk
  353. Business Support Unit APPRECIATION AND AWARDS As a means to evaluate and compare the existing human capital management system , the Bank involves external parties in comparing and assessing a number of human resource management aspects. The results form input into improving the human resource management processes and systems in line with the spirit of “Continuous Improvement” as one of BNI’s cultural values. In 2018, there were a number of awards and appreciations received by Bank BNI related to its human capital management, including: Bank BNI Awards Related to Human Resources during 2018 No Event Award 1 HR Excellence Award in HR Transformation SWA and Universitas Indonesia Faculty of Economics and Business Management Institute 2 HR Excellence Award in Learning & Development Strategy SWA and Universitas Indonesia Faculty of Economics and Business Management Institute 3 HR Excellence Award in Compensation & Benefit Strategy SWA and Universitas Indonesia Faculty of Economics and Business Management Institute 4 Corporate Transformation category Competent People PPM Management FUTURE PLAN In line with the Human Capital’s role to support achieving Banks strategy, the main theme in 2019 will be Optimizing Productivity and Accelerating Development. The strategic initiatives to be followed will include optimizing productivity through robust workforce planning, and accelerating employee development with an integrated development plan mechanism. BNI realizes that accelerating the employee capability development is absolutely necessary to support achieving Banks strategic plan. HUMAN CAPITAL MANAGEMENT STRUCTURE BNI’s organizational development design is always being adjusted to the direction of the Bank’s development. In this regard, BNI’s Human Capital management, under the Human Capital Management Division, plays a role in the formulation, implementation and management of staffing operations policies, and BNI Corporate University is responsible for developing employee capabilities. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 353
  354. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Director of Compliance Human Capital Management Division BNI Corporate University Leadership Academy and Corporate Core Work Culture Human Capital Strategy Human Capital Services Human Capital System Business Partner Recruitment and Outsourcing Business Academy Learning & Operational Experiencel Assessment Center Learning Consultant Strategy & Operations Learning Consultant Teaching staff Learning Services Operational Human Capital Teaching staff System & Infrastructure Knowledge Management Industrial relations The Human Capital Management Division and BNI Corporate University report to the Compliance Director, Endang Hidayatullah, whose profile can be found in the Board of Directors’ Profiles in this Annual Report. HUMAN CAPITAL SHORT PROFILES The human capital management short profile are as follows: 1. Human Capital Management Division Head The Human Capital Management Division is headed by Efita Praharani, who previously served as Consumer Product Management Deputy Division Head and Regional Banking Consumer Head at the Jakarta Kemayoran Regional Office, and has more than 20 years experience in managing human resources at BNI. Has a Master of Science degree in Administrative Sciences from Universitas Indonesia and a Bachelor of Psychology degree from Universitas Gadjah Mada 2. BNI Corporate University Head The BNI Corporate University Division is headed Wicaksono Sarwo Edi, who has officially held the position of Dean of BNI Corporate University since April 10, 2017. Before taking office, served in a number of strategic positions both in the region and at the Head Office, including Policy Management Division Head, Strategic Planning Division Head and Jakarta Kemayoran Regional Office Head. Has a Bachelor’s degree in Civil Engineering and Master’s degree in Finance and Banking Management from Universitas Gadjah Mada. EMPLOYEE PROFILE Information about employee profiles can be found in the BNI Profile section in this Annual Report. 354 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  355. Business Support Unit PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 355
  356. ANNUAL REPORT 2018 PT Bank Negara Indonesia (Persero) Tbk Good Corporate Governance 686SOCIAL RESPONSIBILITY GOVERNANCE 691CORPORATE SOCIAL RESPONSIBILITY RELATED TO HUMAN RIGHTS 693CORPORATE SOCIAL RESPONSIBILITY RELATED TO FAIR OPERATIONS 694SOCIAL RESPONSIBILITY IMPLEMENTATION 694BASED ON SUSTAINABLE FINANCE CONCEPT 696CORPORATE SOCIAL RESPONSIBILITY APPLICATION BASIC 697CORPORATE SOCIAL RESPONSIBILITY MANAGEMENT STRUCTURE 698CORPORATE SOCIAL RESPONSIBILITY RELATED TO THE ENVIRONMENT 703CORPORATE SOCIAL RESPONSIBILITY RELATED TO EMPLOYMENT, OCCUPATIONAL HEALTH AND SAFETY 706CORPORATE SOCIAL RESPONSIBILITY RELATED TO SOCIAL COMMUNITY DEVELOPMENT 713CORPORATE SOCIAL RESPONSIBILITY RELATED TO CONSUMERS 356 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  357. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 357
  358. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk GOOD CORPORATE GOVERNANCE The implementation of corporate governance has proven to have a positive impact on BNI’s performance. This is indicated by BNI’s various achievements throughout 2018 which produced satisfactory results in terms of financial, operational performance, and awards achieved. Improved GCG implementation is directly proportional to the increase of BNI’s overall performance. 358 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  359. Good Corporate Governance BNI understands that the implementation of Good Corporate Governance is no longer a necessity , but is a basic need and foundation in carrying out the Bank’s business activities. Along with the understanding that improving the quality of effective implementation of corporate governance in a sustainable manner is very important, BNI as a trust institution is committed to applying prudential banking and consistently by prioritizing ethics and integrity in the management of the Bank aiming at encouraging the Bank’s increased performance, guaranteeing the fulfillment of stakeholders rights, as well as increasing compliance with laws and regulations that generally apply to the banking industry. The effectiveness of Good Corporate Governance implementation can be seen from the alignment of the 3 (three) aspects of governance system, which are governance structure, governance process, and governance outcome. Governance structure relates to the adequacy of structure and infrastructure of Corporate Governance so that the process of implementing good Governance principles produces outcomes in line with the expectations of the Bank’s Stakeholders. Included in the Bank’s Governance structure are the Board of Commissioners, Board of Directors, Committees, and work units of the Bank. Those included in Governance infrastructures, among others, are policies and procedures, management information systems, and the main duties and functions of each organizational structure. PT Bank Negara Indonesia (Persero) Tbk  Governance Process is the effectiveness of the process of implementing good Corporate Governance principles that are supported by sufficient Corporate Governance structures and infrastructure in order to produce outcomes in line with the expectations of the Bank’s Stakeholders. Governance Outcome is the quality of outcomes that meet the expectations of the Bank’s Stakeholders which are the results of the process of implementing good Governance principles which are supported by sufficient structure and infrastructure of Corporate Governance. Thus, Governance Outcome is the result of implementing Governance Process and adequate support from Governance Structure. The existence of problems in Governance Structure raises weaknesses in Governance Process. On the other hand, the existence of weaknesses in Governance Process has an impact on Governance Outcome. In order to improve the Bank’s performance, to protect stakeholders, and to improve compliance with provisions of laws and regulations according to the Bank’s Articles of Association, BNI’s Board of Commissioners has a supervisory function to ensure that the management of the Bank is carried out by the Board of Directors in accordance with the applicable laws and regulations. While BNI’s Board of Directors carries out management and administration functions professionally and avoids potential conflicts of interest. Adapting Quickly to Face Change 359
  360. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk The implementation and development of Good Corporate Governance within BNI’s environment and subsidiaries are not only as a form of compliance with the provisions of laws and regulations set by the regulator, but has become an irreplaceable need for each company in managing its company. With the implementation and development of GCG, the Bank already has a solid foundation and sufficient provision to become a strong and growing company. BNI is committed to continuously improving the implementation quality of good corporate governance principles in all aspects of its business activities including subsidiaries in an integrated manner. Along with the development of best practices of corporate governance implementation, both in banking and financial services industry, as a state-owned bank registered in the capital market, BNI understands that the implementation and development of GCG has enormous benefits for BNI. With the implementation and development of GCG, BNI has guidelines in carrying out its business activities so that they are always in line with the goals and needs of each stakeholder. Alignment between stakeholders and BNI will foster mutual trust and conducive attitude in the Bank’s environment which results in the emergence and increase in the superior nature of work and professionalism in all BNI people. The implementation of good corporate governance is built on solid integrity, therefore, good governance principles can be implemented at every level of the organization, and carried out in each BNI’s activity so that all banking operations can run consistently and continuously. The governance implementation in BNI is based on the basic principles of GCG, which are Transparency, Accountability, Accountability, Independence, Equality and also Fairness. The implementation of these principles within BNI’s environment has been agreed by the Board of Commissioners, Board of Directors, management ranks, and all BNI personnel in order to create a Company that is constantly growing and competitive globally, as well as strong and persevering in running the business wheel. BNI also realizes that corporate governance will further enhance investors’ trust and security in the current global era. On an ongoing basis, in addition to implementing the basic principles of GCG, BNI continues to adopt various best governance standards applicable at regional and international levels, including the ASEAN Corporate Governance Scorecard, Minister of State-Owned Enterprises Regulation No. PER-01/MBU/2011 on the Good Corporate Governance and its amendment, which is SOE State Minister Regulation No. PER-09/MBU/2012, FSA Regulation No. 21/POJK.04/2015 on Implementation of Governance Guidelines of Public Company and FSA Regulation No. 55/POJK.03/2016 on the Implementation of Governance for Commercial Banks, Principles for Enhancing Corporate Governance issued by the Basel Committee on Banking Supervision, FSA Circular Letter No. 32/SEOJK.04/2015 on Governance Guidelines of Public Company, and FSA Circular Letter No. 13/SEOJK.03/2017 on Governance Implementation for Commercial Bank. 360 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  361. Good Corporate Governance RELATIONSHIP BETWEEN GOOD CORPORATE GOVERNANCE AND COMPANY PERFORMANCE The implementation of corporate governance has proven to have a positive impact on BNI ’s performance. This is indicated by BNI’s various achievements throughout 2018 which produced satisfactory results in terms of financial, operational performance, and awards achieved. Improved GCG implementation is directly proportional to the increase of BNI’s overall performance. Recognition of external parties in the forms of various awards, either related to BNI’s performance, information disclosure, or GCG implementation, has been obtained, including: 1. 1st Winner in the Category of Listed Financial SOE at the 2016 Annual Report Award. 2. The Best State-Owned Enterprise and Top 50 Public Listed Companies in the Good Corporate Governance Award organized by the Indonesia Institute for Corporate Directorship (IICD). 3. The Most Trusted Company Based on Corporate Governance Index (CGPI) in the 2018 Good Corporate Governance Award. In addition, the achievement of good financial performance in 2018 is as follows. 1. Interest income and Sharia increased by 11.0% to Rp35,446 Billion. 2. Loans disbursed increased by 16.2% to Rp512,778 Billion. 3. Customer deposits increased by 12.1% to Rp578,775 Billion. 4. The amount of credit disbursed increased by 12.2% to Rp513,022 Billion. 5. Total Assets increased 14.1% to Rp808,572 Billion. 6. Equity increased by 9.4% to Rp110,374 Billion. 7. Profit increased 9.6% to Rp15,092 Billion. 8. Gross NPL decreased from 2.3% in 2017 to 1.9% in 2018. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 361
  362. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk LEGAL FOUNDATION OF THE IMPLEMENTATION OF GOOD CORPORATE GOVERNANCE The legal foundation of Corporate Governance implementation in BNI refers to the provisions of: 1. Law of the Republic of Indonesia No. 10 of 1998 on Amendment to Law No. 7 of 1992 on Banking. 2. Law of the Republic of Indonesia No. 40 of 2007 on Limited Liability Company. 3. Financial Services Authority Regulation No. 55/POJK.03/2016 on Governance Implementation for Commercial Bank. 4. Circular Letter of Financial Services Authority No. 32/SEOJK.04/2015 on Governance for Public Company. 5. Financial Services Authority Regulation No. 17/POJK.03/2014 on Implementation of Integrated Risk Management for Financial Conglomeration. 6. Financial Services Authority Regulation No. 18/POJK.03/2014 on Implementation of Integrated Governance for Financial Conglomeration. 7. Financial Services Authority Regulation No. 8/POJK.04/2015 on Website of Issuers or Public Companies. 8. Financial Services Authority Regulation No. 31/POJK.04/2015 on Disclosure of Information or Material Fact by Issuers or Public Companies. 9. Circular Letter of Financial Services Authority No. 13/SEOJK.03/2017 on Governance Implementation for Commercial Bank. 10. Various guidelines of GCG implementation among others are Corporate Governance principles, which were developed by the Organization for Economic Cooperation and Development (OECD), ASEAN Corporate Governance Scorecard, and Principles for Enhancing Corporate Governance issued by Basel Committee on Banking Supervision. 362 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  363. Good Corporate Governance IMPLEMENTATION OF GOOD CORPORATE GOVERNANCE The implementation of Good Corporate Governance (GCG) in BNI aims to: 1. Increase BNI’s corporate value by applying GCG principles which consist of Transparency, Accountability, Responsibility, Independency, and Fairness and Equality in carrying out its business so that BNI has strong competitiveness, both at national and regional levels. 2. Encourage each BNI’s organ to always emphasize the GCG culture in every decision making based on the applicable values and norms as well as high level of compliance with the applicable laws and regulations. 3. Enhance BNI’s performance through company efficiency programs created by the implementation of GCG culture in each BNI’s organ. 4. Increase investor confidence and place BNI as the main choice of places to invest. The implementation of BNI’s GCG principles can be described as follows:: GCG Principles Description Transparency 1. The Bank discloses information in a timely, adequate, clear, accurate, and comparable manner, and it can be accessed by interested parties (stakeholders) in accordance with their rights. 2. The Bank discloses information that includes but is not limited to vision, mission, business objectives, bank strategy, financial conditions, composition and compensation of the management, controlling shareholders, executive officers, risk management, internal monitoring and control system, compliance status, systems and implementation of good corporate governance, as well as information and material facts that can influence investors’ decisions. 3. The principle of openness is still with due observance to bank secrecy, confidentiality of positions, and personal rights in accordance with the applicable regulations. 4. Bank policies shall be written and communicated to stakeholders and those entitled to obtain information about the policy. Accountability 1. The Bank sets the business objectives and strategies to be accountable to the stakeholders. 2. The Bank sets a check and balance system in the management of the Bank. 3. The Bank has a performance measure from all organizational organs based on the agreed dimensions and in line with company values (Corporate Culture Values), business goals, and Bank strategies as well as has a reward and punishment system. 4. The Bank shall believe that all organizational organs of the Bank have competencies in accordance with their responsibilities and understand their roles in the implementation of good corporate governance. Responsibility 1. The Bank adheres to the prudential bank practices and guarantees compliance with the applicable regulations. 2. The Bank as a good corporate citizen cares about the environment and carries out social responsibility in a reasonable manner. Independency 1. The Bank avoids unnatural domination by any stakeholders, is not affected by unilateral interests, and is free from conflict of interest. 2. The Bank makes decisions objectively and is free from any pressures from any parties. Fairness and Equality 1. The Bank shall pay attention to the interests of all stakeholders based on the principle of fairness and equal treatment. 2. The Bank also provides opportunities to all stakeholders to give inputs and express opinion for the Bank’s interests, as well as to open access to information in accordance with the principle of transparency. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 363
  364. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk IMPLEMENTATION OF GCG ROADMAP BNI always strives to conduct business in accordance with the principles of Good Corporate Governance (GCG) as desired by all stakeholders. BNI’s GCG implementation is carried out in a structured and systematic manner with the following stages: Year Activities 2001 BNI is committed to implement Good Corporate Governance. The commitment was pioneered by the Commissioners and Directors of BNI with the signing of the Joint Decree of the Commissioners and Directors No. KEP/001/DK and KP/001/DIR dated January 3, 2001, on the Implementation of Good Corporate Governance Principles as stated in the Corporate Governance Handbook of PT Bank Negara Indonesia (Persero) Tbk. which was then used as a guideline for Directors and Commissioners to manage BNI. 2002 As part of its commitment to continuously improve the corporate governance implementation, BNI carried out the following activities. • Establish Compliance Unit and Anti Money Laundering Unit under the responsibility of the Legal and Compliance Division. • Establish Remuneration and Nomination Committee that has roles and responsibilities in preparing performance evaluation criteria for each member of the Board of Commissioners and Board of Directors as well as evaluate the structure, system, and implementation of compensation for the Board of Directors and advise changes to the Board of Commissioners if requested. • Establish an assessment center to improve the selection process/system of top-level leadership positions. • Improve banking information system. • The Commissioner established the Audit Committee Charter as a guide for Audit Committee members in carrying out their duties. 2003 Quasi Reorganization, Reverse Stock Split, increase in authorized capital BNI continued to improve its corporate governance, both in terms of commitment and compliance with its implementation. Each employee was required to sign a statement of compliance with the Behavioral Code of Conduct. 2004 Launch of a new corporate identity Important achievements in implementing corporate governance throughout 2004 were as follows: • BNI’s management approved the establishment of Good Corporate Governance Committee with duties to assist the Board of Directors in evaluating and optimizing policy effectiveness and implementation of corporate governance in BNI’s work environment. • BNI was considered as one of five public companies with good corporate governance practices as per surveys conducted by Standard & Poor’s Governance Services as well as Corporate Governance and Financial Reporting Centers (CGRfC), which is headquartered in Singapore. • Management implemented the Zero Fraud program to foster sound and responsible banking practices, risk awareness, and inherent supervision of deviant behavior. Through this program, BNI rewarded work units that have succeeded in achieving Zero Fraud in their operations and on the other hand, sanctioned work units that fail to prevent Fraud. • BNI established a Work Ethics Team that works under the Human Resources Committee. Periodically, this team evaluates the progress of work ethics in BNI’s work environment. One of the efforts to improve governance was carried out in 2003, BNI established an Executive Committee, with duties to assist the Board of Directors in certain sector, which are: • Asset & Liability Committee (ALCO) • Risk Management Committee • Credit Policy Committee • Human Resources Committee • Technology Management Committee BNI increased stakeholders’ access to all information that has a material impact on BNI, including quarterly financial statements, annual reports, information on the use of corporate action proceeds, information that can influence investors’ investment decisions, resolutions of the General Meeting of Shareholders, and Other important events concerning BNI, both through BNI website, reports to Bapepam, Stock Exchange, mass media, public exposure, or analyst meeting. 364 2005 BNI's commitment to improve governance was proven by the establishment of a GCG Monitoring organizational unit through Decision Letter of Board of Directors No. KP/174/DIR/R, dated April 26, 2005 2006 The signing of “Commitment Statement to Implement Good Corporate Governance” by all Board of Directors, Board of Commissioners, and Division Heads at the Company’s Work Meeting, which was then followed by all employees at all levels of the organization and updated annually. 2007 As a follow-up to the signing of the ‘Commitment Statement to Implement Good Corporate Governance’ in the previous year, BNI developed GCG programs, including: • GCG e-learning • BNI’s Board of Commissioners and Board of Directors’ Guidelines and Work Conduct • The Book of Behavior Demands for BNI Personnel, which consists of BNI’s Work Cultural Values and Main Behavior called PRINCIPLE 46. • BNI received the title of a Trusted company in the ranking of the Corporate Governance Perception Index held by the Indonesian Institute for Corporate Governance (IICG) and SWA magazine. Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  365. Good Corporate Governance Year Activities 2008 Regarding the implementation of Know Your Customer Principles (PMN) and the implementation of Anti-Money Laundering Law (TPPU Law), the Compliance Division in collaboration with the Information Technology Division developed and continued to refine the system that is integrated with iCONS system to identify suspicious financial transactions. 2009 BNI managed to improve performance which resulted in a profit increase of up to 103% compared to that of the previous year. This was inseparable from the consistent implementation of GCG by all BNI people. 2010 Launched the Whistleblowing System (WBS) in an integrated manner so that transparency is maintained and its implementation is understood by all BNI employees. Improvement of code of conduct of BNI’s employee aimed at improving BNI’s employee quality. BNI’s participation in rating/ranking of GCG implementation, which was carried out by independent rating agencies, which are Center for Good Corporate Governance of Universitas Gadjah Mada (CGCG UGM), The Indonesian Institute for Corporate Directorship (IICD). 2011 BNI won various awards from various national and international institutions. Some major awards among others were: • 2011 SOE’s Best of the Best Company • The Most Admired ASEAN Entrepreneur Economics Challenges Award 2011 • The Most Trusted Company of the Indonesian Institute for Corporate Governance (IICG) • Regarding GCG implementation, BNI won several awards, including: • BNI won the Corporate Governance Award 2011 from The Indonesian Institute for Corporate Governance. • BNI’s information technology governance was recognized for its reliability by receiving IT Governance Award from the SOE Ministry. 2012 • • The self assessment results in accordance with Bank Indonesia regulations in 2011 and 2012 showed a stable trend with Excellent composite predicate. Establishment of Anti-Fraud Committees, which was established based on Decision Letter of Board of Directors Number KP/508/DIR/R dated November 9, 2012, on the Establishment of Anti-Fraud Committee (KAF). In carrying out its duties and responsibilities, KAF was assisted by the Ethics Management unit under the Compliance Division, in which one of its functions was as data liaison and to report to other Divisions/Units and external parties related to Anti-Fraud Strategies and to manage Fraud related databases existing in BNI. 2013 BNI won the following awards: • − The Most Trusted Company Based on Investors and Analyst’s Assessment Survey in the 2013 Good Corporate Governance Award. • − The Most Trusted Company Based on Corporate Governance Index (CGPI) in the 2013 Good Corporate Governance Award. • − Awarded as The Best Bank in Indonesia in Developing Good Corporate Governance (GCG) from Asiamoney Magazine. 2014 • • 2015 BNI won the award as: The Best State-Owned Enterprise and Top 50 Public Listed Companies in the Good Corporate Governance Award event held by The Indonesian Institute for Corporate Directorship (IICD). 2016 BNI won the following awards: • − The Best State-Owned Enterprise and Top 50 Public Listed Companies in the Good Corporate Governance Award organized by the Indonesia Institute for Corporate Directorship (IICD). • − The Most Trusted Company Based on Corporate Governance Index (CGPI) in the 2018 Good Corporate Governance Award. 2017 BNI won the following awards: • − 1st Winner in the Category of Listed Financial SOE at the 2016 Annual Report Award. • − The Best State-Owned Enterprise and Top 50 Public Listed Companies in the Good Corporate Governance Award organized by the Indonesia Institute for Corporate Directorship (IICD). • − The Most Trusted Company Based on Corporate Governance Index (CGPI) in the 2017 Good Corporate Governance Award. 2018 BNI won the following awards: • − The Best State-Owned Enterprise and Top 50 Public Listed Companies in the Good Corporate Governance Award organized by the Indonesia Institute for Corporate Directorship (IICD). • − The Most Trusted Company Based on Corporate Governance Index (CGPI) in the 2018 Good Corporate Governance Award. − BNI continued to make improvements and updates to improve corporate governance. − BNI also continued to support economic and environmental growth by organizing Kampoeng BNI program, PKBL, CSR activities organized by BNI Syariah, and commitment to One Billion Indonesian Trees (OBIT) program, which had planted more than 7 million trees in the past 7 years. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 365
  366. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Throughout 2018, BNI implemented GCG as follows: January Submission of GCG Self Assessment, position of December 2017 to FSA. February 1. The signing of GCG Commitment by all BNI Personnel. 2. Dissemination of Anti-Fraud to all BNI employees. 3. Submission of TKT Self Assessment, position of December 2017 to FSA. 4. Submission of Annual Report of the 2017 Fiscal Year to the Financial Services Authority and the Indonesia Stock Exchange. 5. Notification of the Annual GMS for 2017 Fiscal Year was carried out 21 (twenty-one) calendar days prior to the GMS date in accordance with the Roadmap Recommendation of Indonesian Corporate Governance and POJK No. 32/POJK.04/2014. 6. The GMS Notification included details of each agenda item of the GMS which are in accordance with the Roadmap Recommendation of Indonesian Corporate Governance and POJK No. 32/POJK.04/2014. March 1. The Annual GMS of 2017 Fiscal Year was held on March 20, 2018. 2. Publication of the Summary of Minutes of the Annual GMS for 2017 Fiscal Year including the Announcement of Schedule and Procedure for Cash Dividend Distribution for 2017 Fiscal Year was made on March 22, 2018, in 2 (two) newspapers, which are The Investor Daily and The Jakarta Post in order to fulfill POJK No. 32/POJK.04/2014 as lastly amended by POJK No. 10/POJK.04/2017. April 1. Payment of Cash Dividend for 2017 Fiscal Year was exactly 1 (one) month from the GMS date or after the announcement of the summary of minutes of the GMS on April 20, 2018, in accordance with the Roadmap Recommendation of the Indonesian Corporate Governance and POJK No. 32/POJK.04/2014 as lastly amended by POJK No. 10/POJK.04/2017. 2. GCG Dissemination in Malang Regional Offices. May 1. Report Submission of the Corporate Secretary Implementation function to the Board of Directors which was copied to the Board of Commissioners in accordance with the provisions stipulated in POJK No. 35/POJK.04/2014. 2. Anti-Gratification Publication in Kompas and Bisnis Indonesia daily newspapers on May 30, 2018. 366 Adapting Quickly to Face Change June Refinement of the Guidelines and Work Conduct of the Board of Directors as stated in the Decision Letter of the Board of Directors Number: KP/228/DIR/R dated June 29, 2018. July Submission of GCG Self Assessment, position of June 2018 to FSA. August 1. The signing of the Board of Directors’ Integrity Pact as a Commitment to Good Corporate Governance Implementation as stipulated in Decision Letter of Board of Directors No. DIR/564 dated July 19, 2017. 2. Submission of TKT Self Assessment, position of June 2018 to FSA. 3. GCG Dissemination in Singkawang and Pontianak Branch Offices. 4. Implementation of Compliance Forum of Anti-Money Laundering and Prevention of Terrorism Financing in the Financial Services Sector on August 30, 2018. December 1. The implementation of the IICD Award, BNI received 2 (two) awards, which are: The Best State-Owned Enterprise and Top 50 Public Listed Companies. 2. Anti-Gratification Publication in Kompas and Bisnis Indonesia daily newspapers on May 30, 2018. 3. Participation in the Research of the ASEAN Corporate Governance Scorecard for BNI, and BNI got a score of 88.60. 4. The implementation of the Corporate Governance Perception Index (CGPI) held by the Indonesian Institute for Corporate Governance (IICG) in which BNI received awards, which are: Most Trusted Company Based on Corporate Governance Index with a score of 88.38. 5. BNI always strives to improve GCG implementation within BNI’s working environment. This is carried out through the KMP Division by organizing internal activities such as GCG Vlog Competition with the theme: Integrity As a Lifestyle of BNI Employees #IniIntegritasGue (This is My Integrity). The purpose and objective in organizing this competition is to grow awareness of the entire BNI’s personnel to make this integrity attitude as a lifestyle and to improve the participation of the entire BNI’s personnel to participate actively and creatively in the integrity campaign as a lifestyle of BNI’s personnel. PT Bank Negara Indonesia (Persero) Tbk
  367. Good Corporate Governance EFFORTS TO IMPROVE THE QUALITY OF GOOD CORPORATE GOVERNANCE IMPLEMENTATION In principle , GCG implementation in BNI runs well and is carried out by the Board of Commissioners, Board of Directors, and all employees at every activity with the purpose to protect the interests of the Bank, shareholders, and stakeholders. BNI always evaluates GCG implementation continuously so that GCG implementation will always improve. GCG Evaluation in BNI is carried out among others by: 1. Reviewing guidelines/policies related to pre-existing GCG to be adjusted to the latest regulatory provisions. 2. Preparing new guidelines/policies related to GCG that do not yet exist, including updating new provisions to the Board of Directors and Board of Commissioners. 3. Increase the Compliance Principle through the Compliance Index. 4. Preparing GCG-related reports, including Governance Report, Corporate Secretary Report, and other related reports. 5. GCG-related External Complaint Facilities to encourage awareness of BNI Personnel to always behave in accordance with GCG principles as a culture, BNI also involves the participation of society/public as supervisors of GCG implementation in BNI, among others, by providing facilities for the general public to submit complaints and complaints of GCG violations committed by BNI employees through PO Box GCG BNI JKP 10000 and gcg@bni.co.id. People who feel to have been harmed by the actions of BNI Personnel or are aware of the actions of BNI employees that deviate from GCG principles can inform through these two facilities by clearly stating the identity of BNI employee/personnel who commits violation and the unit where such BNI employee/ personnel carry out the duties. In order to improve GCG implementation quality in BNI, BNI continues to strive to create, develop, and improve itself in accordance with GCG principles. Roadmap preparation is needed to map GCG aspects and create GCG related programs at BNI in order to support GCG implementation practices. AWARENESS GCG-RELATED DISSEMINATION Sosialisasi terkait GCG selama tahun 2018 telah dilakukan baik di Kantor Pusat dan Kantor Wilayah, diantaranya pada Divisi Komunikasi Perusahaan & Kesekretariatan, Wilayah Malang dan Makassar serta Kantor Cabang Singkawang dan Pontianak. Dalam sosialisasi dimaksud dipaparkan antara lain mengenai prinsip-prinsip GCG, contoh implementasi, sampai dengan ketentuan terbaru terkait GCG. Dengan sosialisasi ini diharapkan para Insan BNI memiliki tekad serta komitmen bersama untuk mewujudkan implementasi GCG di BNI. NEW EMPLOYEE INDUCTION PROGRAM New employees are the embryos of BNI personnel who will learn, grow, and develop in BNI. As a shoot or embryo, a briefing on corporate values is very important. In the briefing, GCG values and Code of Ethics will be embed, in which later it is expected that these will be useful in their BNI career journey. The briefing is carried out by the GCG Team, in collaboration with BNI Corporate University, which provides specific times related to GCG and Code of Ethics for new employees. Complaints received through PO Box GCG BNI JKP 10000 and gcg@bni.co.id are intended to assist the process of solving problems faced by parties who submit complaints/information and are expected to be a material for review/input and evaluation for BNI to make improvements continuously and improve the GCG implementation quality in BNI so that it can reduce the occurrence of irregularities or violations of GCG principles by BNI employees. Number of complaints/requests for information entered in 2018 was as many as 16 (sixteen) complaints. Complaints/requests for information that are not related to GCG have been forwarded to the relevant units for settlement. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 367
  368. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk GOVERNANCE COMMITMENT As a form of shared commitment in order to support GCG enforcement and implementation in BNI, once a year the Governance Commitment is signed, and for 2018, this was carried out in February. All employees from all levels of the Company jointly sign the Governance Commitment, preceded by the reading of the commitment and dissemination of Anti Fraud Awareness. This program is conducted to emphasize the importance and meaning of such commitment values to BNI personnel. The Governance Commitment is intended to state that, among others, BNI personnel are committed to: 1. Carry out duties and jobs properly and correctly in full responsibilities in accordance with the corporate culture and the applicable laws and regulations. 2. Not give, promise, and/or receive compensation in any forms. 3. Refrain from any possible conflict of interest. 4. Act fairly and equally in fulfilling stakeholders’ rights. 5. Make maximum efforts to prevent the possibility of fraud. 6. Be willing to report any cases of suspected fraud through BNI’s available reporting media; 7. Be willing to be sanctioned in the event that as BNI personnel, it is proven that the commitments mentioned above are not implemented when executing the duties and responsibilities. 368 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  369. Good Corporate Governance INTERNALIZATION Internalization is not limited to knowledge . Internalization has reached understanding stage. GCG internalization in BNI is carried out through various tools, facilitating the process of adopting values that can later be applied in carrying out daily work. The tools used, among others, are in the forms of: 1. Reading BNI’s 46 Principles and Code of Conduct on each quality day, conducted once a month in each unit as well as in the morning briefing. 2. Self-education method through GCG and Corporate Culture e-learning facilitates BNI personnel to learn GCG. 3. Distribution of posters and e-leaflets of anti-gratification and GCG enforcement in each unit and BNI Forum so that employees are aware at all times. 4. Distribution of Code of Conduct pocket books. 5. Ease of access to the Code of Conduct and Corporate Culture through BNI website that can be accessed anytime and anywhere. 6. As one way to improve the implementation of GCG principles in BNI’s work environment, an internal activity is held in the form of GCG Vlog competition with the theme “Integrity as the Lifestyle of BNI’s Personnel #IniIntegritasGue (#ThisIsMyIntegrity)”. The purpose and objective in organizing this competition is to grow awareness of the entire BNI’s personnel to make this integrity attitude as a lifestyle and to improve the participation of the entire BNI’s personnel to participate actively and creatively in the integrity campaign as a lifestyle of BNI’s personnel. BNI understands that Corporate Culture provides concentration in the form of attitude. These attitudes will shape the personality of each individual in a company, therefore, a collection of attitudes will form an interaction between individuals and their integrity, that will further bring out the characters that will exist in a company. EXTERNALIZATION Externalization itself is defined as an adjustment to the outside world that is a ‘world’ without oneself. As we know, the parties or the ‘world’ outside the public company comprises stakeholders (shareholders, Depositors, borrowers (debtors), associates/vendors/partners, governments, employees, customers) and the wide community. GCG externalization is closely related to the principles of transparency and fairness, where the principle of openness always observes the provisions of Bank secrecy and professional secrecy as well as treats stakeholders and the community with fair treatment and equal opportunity according to its proportions. BNI implements GCG externalization to stakeholders and wide communities through various means as follows: PT Bank Negara Indonesia (Persero) Tbk  1. GMS GMS is a communication means of the stakeholders to the company and a form of implementation of GCG principles because at the GMS, the form of responsibilities the Company’s Management are described from various aspects. A more detailed explanation of GMS can be found in GMS Section of Corporate Governance chapter in this Annual Report. 2. Shareholders Rights and Ownership Functions Shareholder’ rights are always protected and facilitated, in BNI, shareholders’ rights are demonstrated through dividends, the right to ask questions at the GMS, the right to obtain information, and the right to approve/not approve GMS resolutions via voting at GMS. 3. Disclosure and Transparency As a form of transparency pillar of GCG principles, BNI continues to strive to provide disclosure of information to stakeholders and the general public through various means including through the Annual Report, BNI website, mass media, IDX website, as well as notification to the regulator by hardcopy and electronic reporting facility. Considering BNI’s status as an issuer, information disclosure is considered crucial as a public company’s communication media; information disclosure is carried out by referring to the applicable capital market regulations. 4. Equal Treatment All BNI shareholders, including minority shareholders and foreign shareholders, are treated equally. All shareholders are given equal opportunities to obtain information. BNI applies this treatment to provide information related to Corporate Actions and the information disclosure as regulated by the capital market regulations. Everyone is given equal opportunities to obtain information and express criticism/advice to the Bank. Information, criticism, and/or suggestions can be accessed through BNI website and BNI Call 1500046. 5. Creating a Positive Bank Image It is undeniable that the Bank is a financial institution that relies on trust. A sound GCG practices by all of the company’s internal parties and stakeholders can improve the company’s image to wider public in the long term, so that the trust to the bank will always be maintained. In this digital age, BNI seeks to utilize a variety of tools to enhance the positive image of the bank through various media such as through print media (newspapers, tabloids, magazines), electronic media (radio and television) and cyber media (website, twitter, instagram, email, news portals, facebook, blogs, and other social media). Utilizing the media to support GCG practices is carried out to disseminate anti gratification, GCG awareness, service excellent, WBS, and so forth. Adapting Quickly to Face Change 369
  370. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk MONITORING OF IMPLEMENTASI GCG GCG monitoring in BNI is carried out, among others, by: Optimizing the monitoring function of duties and responsibilities of each employee is carried out in each unit by direct supervisors, Unit Leaders, and the Internal Audit Unit. Preparation and monitoring of Key Performance Indicators (KPI). Unit leaders have active roles in KPI monitoring process. Branch Performance Rewards, which are rewards for branches with assessment criteria of operations, business, and improvement efforts. Know Your Employee (KYE) as one of the inherent monitoring efforts to the employees. Direct supervisors must monitor employees under their supervision to ensure that there is no fraud by observing whether there are indications that need further attention (irregularities). 370 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  371. Good Corporate Governance GOOD CORPORATE GOVERNANCE ASSESSMENT GCG Assessment is an effort to measure or map the current company ’s condition in GCG implementation. This measure is taken to determine GCG implementation level and to identify appropriate measures in order to prepare infrastructure and corporate structure that is conducive to effectively implement GCG. In other words, GCG assessment is needed to identify the aspects that need to be prioritized, and the steps to make it happen. In order to evaluate GCG implementation, BNI conducts GCG Assessment that is conducted periodically and consistently every year consisting of Self Assessment according to BI/FSA regulations and Third-Party Assessment, as follows. SELF ASSESSMENT Based on FSA Circular Letter No. 13/SEOJK.03/2017 on Governance Implementation for Commercial Bank, FSA Circular Letter No. 55/POJK.03/2016 on Governance Implementation for Commercial Bank, Financial Services Authority Circular Letter No. 21/POJK.04/2015 on Implementation of Governance Guidelines of Public Company, FSA Circular Letter No. 32/SEOJK.04/2015 on Guidelines of Corporate Governance for Public Company as well as FSA 4/POJK.03/2016 on assessment of Bank Sound Level on Bank Indonesia Regulation on assessment of Bank Sound Level, one of the assessment points of Bank Sound Level is self-assessment of the implementation of Good Corporate Governance (GCG) Principles at a bank. Self Assessment implementation is conducted periodically every semester in June and December in the current year. This self-assessment is intended to map the strengths and weaknesses of GCG implementation in BNI in regard of 3 (three) aspects: 1. Governance Structure Governance structure assessment aims to assess the adequacy of BNI’s governance structure and infrastructure so that the implementation process of GCG principles will produce an outcome in line with the expectations of the Bank’s stakeholders. Included in the Bank’s governance structure are the Commissioners, Directors, Committees, and work units of the Bank. Included in the Bank’s governance infrastructures among others are the Bank’s policies and procedures, management information systems, and the main duties and functions of each organizational structure. PT Bank Negara Indonesia (Persero) Tbk  Governance Structure aspect is an assessment on the fulfillment of corporate structure and infrastructure in applying GCG as measured through the governance structures which includes: a. Shareholder Composition and Company Organs; the structure and function of the persons responsible for GCG implementation; the structure of the person in charge of ethics enforcement; the structure of the person in charge of information disclosure; the structure of the person in charge of supervisory and audit; the structure of the person in charge of human resources management; the structure of the person in charge of operations/productions; the structure of the person in charge of marketing; the structure of the person in charge of finance; the structure of the person in charge of risk management; the structure of the person in charge of information technology management; the structure of the person in charge of stakeholder relationship; the structure of the person in charge of procurement of goods and services; as well as the structure of the person in charge of change management. b. Fulfillment to the company policies is mainly related to the enforcement of GCG functions in conducting the company’s operations, which include guidelines and policies related to GCG, ethics enforcement, information disclosure, monitoring and audit as well as compliance, human resource management, operations/production, marketing, finance and accounting, risk management, information technology governance, relationships with stakeholders. 2. Governance Process The governance process assessment aims to assess the effectiveness of the implementation process of GCG principles supported by the adequacy of the Bank’s governance structure and infrastructure in order to produce outcomes that meet stakeholders’ expectations. Governance Process aspect is an assessment on the implementation of the company’s system and mechanism in applying GCG as measured by: Adapting Quickly to Face Change 371
  372. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk a. The process of implementing GCG, enforcing ethics, information disclosure, monitoring and audit, as well as compliance, human resource management, operations/ productions, marketing, finance and accounting, risk management, information technology governance, relationships with stakeholders, and so forth. b. Corporate governance mechanisms include GCG implementation mechanism and process, ethics enforcement, information disclosure, monitoring and audit as well as compliance, human resource management, operations/productions, marketing, finance and accounting, risk management, information technology management, relationship with stakeholders and so forth. 3. Governance Outcome Governance Outcome aspect is an assessment on the results of the implementation of the company’s system and mechanism in applying GCG that is measured through GCG implementation results, including outputs and outcomes of GCG implementation process, ethics enforcement, information disclosure, monitoring and audit as well as compliance, human resource management, operations/ productions, marketing, finance and accounting, risk management, information technology governance, relationships with stakeholders and so forth. As an evaluation of the GCG implementation, BNI has conducted assessment of GCG implementation. This assessment aims to measure GCG implementation process in BNI, the assessment is carried out by self assessment based on Financial Services Authority Regulation No. 55/POJK.03/2016 on Implementation of Governance for Commercial Bank that measures GCG implementation 11 (eleven) aspects consisting of: 1. Implementation of duties and responsibilities of the Board of Commissioners 2. Implementation of duties and responsibilities of the Board of Directors 3. Completeness and implementation of duties of the Committees 4. Management of conflict of interest 5. Implementing compliance function 6. Implementing internal audit function 7. Implementing external audit function 8. Implementing risk management including internal control system 9. Providing fund to related party and provision of large exposure 10. Transparency of the Bank’s financial and non-financial condition, GCG implementation report, and internal reporting 11. Bank’s Strategic Plans 372 Adapting Quickly to Face Change In accordance with FSA regulations, the Bank must conduct Self Assessment on GCG implementation. Result of GCG Self Assessment for the last 3 (three) years can be seen in the table below: Year 2018 Year 2017 Year 2016 2 2 2 Composite Score Based on the three assessment aspects, through GCG self assessment in 2018, BNI has set the score for GCG implementation as follows. Self Assessment Result of GCG Implementation Ratings Individual 2 Definition of Ratings This shows that the Bank Management has implemented the Governance, which is generally good. This is reflected from the adequate fulfillment of the Governance principles. In the event that there is weakness in the implementation of Governance principles, this weakness is generally less significant and can be resolved by normal actions by the Bank’s Management. Currently, the Bank keeps making efforts for corrective action to follow-up the Regulator’s finding results. PT Bank Negara Indonesia (Persero) Tbk
  373. Good Corporate Governance The score determination above is based on strengths and weaknesses of GCG implementation in BNI as follows : Recommendations obtained by Bank BNI from self-assessment, which have been followed-up can be seen in the table below. Strengths Weaknesses Governance Structure Governance Structure The Bank has had complete Governance structure and infrastructure, which is in line with the applicable provisions, in order to support Governance implementation in every line of work and Bank’s operations. None Governance Process Governance Process Generally, GCG implementation has been applied in accordance with the provisions as reflected from the fulfillment and implementation of Bank’s obligations to the Regulators as well as the fulfillment and implementation of obligations to all stakeholders. Overall, the governance process is carried out well in every activity/ business and Bank's Operations, in its implementation, there is still implementation that is not yet in line due to Human Error, and the current system and policies are not entirely understood by the employees. Governance Outcome • GCG implementation is generally well, supported by the rating result by independent party. BNI’s CGPI score achievement increased from 88.38 to 88.94 with the predicate of Indonesia most trusted Company, as well as BNI’s ACGS score achievement that increased from 88.60 to 91.58, with excellent predicate. • Decrease in number of sanctions and reprimands from the Regulator if compared to that of period of January-December 2017. Governance Outcome Until December 2018, there was still reprimands/penalties and violations done by BNI’s internal, however, the frequency and nominal of penalties imposed decreased significantly compared to that of December 2017. Recommendations obtained by BNI from self-assessment, which have been followed-up can be seen in the table below. Weaknesses Follow-Up Overall, the governance process is carried out well in every activity/ business and Bank's Operations, in its implementation, there is still implementation that is not yet in line due to Human Error, and the current system and policies are not entirely understood by the employees. In order to improve the understanding of SOP by the entire employees, BNI has mandated all employees to improve their awareness through e-learning mandatory, therefore, mistakes due to human error can be decreased every year. Until December 2018, there was still reprimands/penalties and violations done by BNI’s internal, however, the frequency and nominal of penalties imposed decreased significantly compared to that of December 2017. Supervision by the Compliance unit will always be improved. This is evidenced by the significant decrease of number of sanctions and penalties from that of the previous period. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 373
  374. 2018 AN N NU U AALL REPOR R TT BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk CORPORATE GOVERNANCE PERCEPTION INDEX (CGPI) In order to maintain the trust from all stakeholders, BNI also actively participates in Corporate Governance Perception Index (CGPI) held by The Indonesian Institute for Corporate Governance (IICG). BNI’s participation in the program aims to evaluate GCG implementation in BNI. The evaluation results are a reference for BNI to improve the future GCG implementation. The 2017 CGPI which was carried out in 2018 took the theme of Transforming the Business Model in the Framework of Good Corporate Governance. The assessment aspects of the 2017 CGPI include governance structure, governance process, and governance outcome. CGPI’s assessment uses a mandatory GCG implementation and generally applicable best practices as well as approaches to stakeholders’ perspectives where the relationship with all stakeholders is increasingly important in maintaining the Company’s business sustainability in the long run. BNI has completed all the requirements and stages of the 2017 CGPI assessment, in which the results showed very good results and received the predicate of the “Most Trusted Company”. CGPI assessment results in 2014-2017 are as follows. 88.94 88.38 87.73 87.46 2014 2016 2015 2017 CGPI assessment results in 2017-2018 Indicator 2017 2018 Governance Structure 29.06 23.03 Governance Process 29.73 38.14 Governance Outcome 29.59 27.77 CGPI Score 88.38 88.94 CGPI assessment results in 2015-2016 Assessment Aspect 2015 2016 Self Assessment/Survey 18.17 26.94 Documentation System 23.55 22.35 Paper 22.01 13.12 Observation 23.73 25.33 CGPI Score 87.46 87.73 In the last 4 (four) years, the assessment given by IICG in regard of BNI’s participation in CGPI has always increased. This shows that the implementation of GCG in BNI is getting better from year to year. The recommendations obtained by BNI from CGPI on the 2016 fiscal year which were implemented in 2017 and have been followed up are as follows. 374 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  375. Good Corporate Governance No Recommendation Follow-Up 1 . Mapping regulatory development and its consequence for the Company’s business and operations in order to guarantee continuous compliance. In order to map the Regulation development, BNI has already had a Policy Governance Division, which always reviews the Regulation development by collaborating with Compliance Division to always ensure compliance with the applicable laws and regulations. 2. Re-mapping the stakeholders in order to guarantee harmonious, synergic, and ethically-oriented relationship, and sustainable value creation. BNI has carried out stakeholder mapping contained in the Bank's Business Plan, which is reviewed periodically to be submitted later to the Regulator. 3. Integrating system and corporate value chain in order to support the effectiveness and efficiency of the expected Company’s performance. In order to increase efficiency, BNI has already integrated the business process so that it can maximize the business process and increase revenues as reflected in the profit increase obtained by BNI. 4. Updating policies, guidelines, and corporate governance systems in order to refine system weakness and prevent negative impact on the Company’s business and operations. Every risk impact has been anticipated, through the synergy of business units with risk units to minimize the negative impact on the Company's business. Furthermore, efforts to increase awareness of the governance culture are always carried out routinely by using current methods so that they can be easily accepted by all BNI employees. 5. Increasing understanding and competence in GCG in the internal environment as well as external stakeholders of the Company through many dissemination activities and good attachments. In order to increase understanding of all BNI employees and all stakeholders, the Company uses updated methods by maximizing social media function as a program to improve understanding of governance in BNI. 6. Appealing and encouraging affiliation companies and colleagues to have the same commitment and effort in implementing GCG in order to create a conducive situation for the implementation of GCG and sustainability practices. In order to encourage an increase in governance culture of subsidiaries, the Company has formed BNI’s Financial Conglomeration in which the members are all Subsidiaries in financial sector, with one of the objectives to have standardization of governance implementation. ASEAN CORPORATE GOVERNANCE SCORECARD (ACGS) An assessment of BNI’s GCG implementation is also carried out by Asean CG Scorecard (ACGS) based on the Annual Report and the Company’s Website. ACGS assessment is carried out by IICD (Indonesian Institute for Corporate Directorship) by using scorecard components consisting of: 1. Shareholders Rights 2. Equal Treatment to Shareholders 3. Roles of Stakeholders 4. Disclosure and Transparency 5. Responsibilities of the Board of Directors and Board of Commissioners Based on the assessment results of BNI GCG practices following the principles set forth in the ASEAN Corporate Governance Scorecard conducted in 2018, BNI achieved a score of 91.58. No Assessment Component 2017 2016 1. Shareholders' Rights 2. Equal Treatment to Shareholders 3. Roles of Stakeholders 15 10 4. Disclosure and Transparency 22.66 22.56 5. Responsibilities of the Board of Commissioners 31.88 30.27 6. Bonus 9 7 7. Penalty Total Score PT Bank Negara Indonesia (Persero) Tbk  9.05 9.60 6 9.17 (2) 0 91.58 (Very Good) 88.60 (Good) Adapting Quickly to Face Change 375
  376. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Recommendations obtained by Bank BNI from ACGS, which have been followed-up can be seen in the table below: No. 376 Recommendation Follow-Up 1 To guarantee shareholders rights, the Company is expected to notice the announcement time of GMS note-taking, which is no later than 1 (one) business day. The announcement process of Summary of GMS Minutes is currently in line with the applicable provisions in Indonesia, however, BNI always strives to accelerate the delivery of information on Annual/Extraordinary General Meeting of Shareholders in order to comply with these criteria. 2 In the GMS invitation document, it is recommended to provide further details of the following matters: (1) profile of Commissioners/Directors who will be selected in GMS, such as age, qualifications, experience in directorship in public companies, (2) disclosure of external auditor names who will be selected for the following fiscal year, (3) explanation of the policy to disburse dividend in GMS agenda, (4) the amount of dividend to be distributed. Regarding the submission of the Board's profile, which will be published at the time of submitting GMS invitation, it will be our improvement in convening GMS in the future, with due observance of the provisions applicable in SOE Bank. 3 The Company is also advised to have policies that regulate the reporting of company stock trading transactions by insiders within 3 (three) business days. Transaction reporting mechanism for a maximum of 3 (three) business days by insiders has been carried out with reference to the applicable provisions. 4 It is necessary to stipulate provisions on the provision of loan facilities for members of board of commissioners and board of directors in reasonable terms (i.e. the maturity period and market/normal interest rates without exception). To facilitate this, BNI has compiled provisions on the provision of loan facilities for the Board of Directors and the Board of Commissioners. 5 The Company is advised to add information in the Annual Report regarding the details of remuneration received by each member of the Board of Commissioners. The Company has informed the CEO Remuneration amount, as per the Financial Services Authority regulations. 6 The Company is advised to disclose fees given to the External Auditor if there are non-audit services provided, if not, the statement to be disclosed is that the Company does not receive non-audit services from external auditors. This will be our concern in preparing the next Annual Report. 7 The company is advised to expedite the issuance of the Annual Report no later than 120 days from the end of the financial statements period. The Company has issued the Annual Report <120 days from the end of the financial statements period. 8 The Board must continuously review annually the Bank's vision, mission, and strategy. For 2018, the Board of Directors has reviewed the vision and mission which become part of the Bank's Business Plan. 9 The Company is advised to plan detailed Board of Directors meetings before the fiscal year starts so that members of the Board of Directors can plan their attendance earlier at those meetings. The schedule plan for the Board of Directors Meeting will be included in the Annual Report of 2018 Fiscal Year. 10 Preparing policies to set a minimum level of attendance for members of the Board of Commissioners in Board of Commissioners meetings (minimum 75% of the total Board of Commissioners meetings held in 1 period). The Company has set rules and work procedures of the Board of Directors and Board of Commissioners, in which it has set a minimum level of attendance in accordance with the applicable provisions. 11 It is necessary to have a policy requiring quorum requirements in a decision-making meeting by the Board of Commissioners, i.e. a minimum of 2/3 members shall attend. The Company has set rules and work procedures of the Board of Directors and Board of Commissioners, in which it has set a minimum level of decision making in meetings in accordance with the applicable provisions. 12 Circulation of meeting material can be accepted by each member of the Board of Commissioners no later than five (5) (business) days before the Board of Commissioners meeting. The Company has set rules and work procedures of the Board of Directors and Board of Commissioners, in which it has stipulated the submission of meeting material in accordance with the applicable provisions. 13 Giving compensation in the form of bonus is not a good practice, because bonus relates to the company's performance, which is the Board of Directors performance. It is recommended that compensation to the Board of Commissioners, especially for independent members of the Board of Commissioners, not be given in the form of bonus because it will affect the independency of the Independent Commissioner. Provision of remuneration to the Board of Directors and Board of Commissioners has been carried out in accordance with the applicable provisions. Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  377. Good Corporate Governance No . Recommendation Follow-Up 14 The Board of Commissioners or Audit Committee shall state and disclose their statement regarding the adequacy of the company internal control or company risk management system in the company's annual report. The adequacy of internal controls has been contained in each of the Company's Annual Reports. 15 The Company is advised to make a succession plan for the President Director, members of Board of Directors, and key management of the company that will be carried out by the Board of Commissioners.The said plan means the process of identifying and developing employees who have potential to be the successors of the President Director, members of the Board of Directors, and Key Management of the Company. The Company has had a Nomination and Remuneration Committee with duties to prepare the succession of the President Director, members of Board of Directors, and Key Management of the Company. 16 The company is advised to include the duties and responsibilities of the President Commissioner in the work guidelines of the Board of Commissioners and disclose it to the public. The duties and responsibilities of the President Commissioner have been included in the Board of Commissioners’ guidelines and work conduct which can be downloaded on BNI’s website. 17 The performance assessment of the President Director by the Board of Commissioners needs to be carried out and disclosed (not just the assessment for Board of Directors that is carried out only collectively) The Board of Directors Performance Assessment has been carried out in accordance with the applicable laws and regulations in Indonesia. 18 The Company is advised to conduct annual performance assessments of each/every member of the Board of Commissioners (or disclose it if there is such practice) and disclose the process occurring during the performance assessment. The performance assessment of Members of Board of Commissioner has been carried out in accordance with the applicable laws and regulations in Indonesia. 19 The Company is advised to make a policy that regulates the composition of the Nomination/Remuneration Committee, in which the majority of members are Independent Commissioners. The composition and qualifications policy and Number of Members of the Nomination and Remuneration Committee have been regulated according to the provisions of laws and regulations. 20 To support the duty implementation of the Audit Committee, the Company is advised to appoint members of Audit Committee who have qualifications in accounting. The Audit Committee composition has been adjusted to the Company needs in order to support the duty implementation of Audit Committee. 21 Related to Audit Committee, it is recommended to add its role or function, which is not only to recommend the appointment of an external auditor, but also to arrive at giving recommendations to dismiss the company's external auditor. Such role or function shall be clearly stated or stipulated in the Audit Committee charter. The duties and responsibilities of the Audit Committee are stated in the BNI Audit Committee charter which can be accessed on BNI’s website. 22 The Company is advised to use information technology when casting votes at the Annual General Meeting of Shareholders. The voting by using Information Technology will be our record in our next GMS implementation in accordance with the applicable provisions. 23 The New Financial Services Authority Regulation on GMS issued in December 2016 requires companies to send Annual GMS notice to shareholders at least 21 (twenty-one) calendar days. However, the GMS notice mechanism itself allows the company to send notice to the shareholders within 28 (twenty-eight) calendar days. The implementation of GMS notice has been carried out in accordance with the applicable provisions of laws and regulations. 24 The Company can consider gender diversification in the Board of Commissioners, by increasing the appointment/designation of women as board members of Independent Commissioners. This will be the Company's attention in the future. 25 As one of the big companies in Indonesia, BNI has the ability to use a professional search firm to recruit prospective members of the Board of Commissioners. This will be the Company's attention in the future. 26 The Company is advised to disclose the details of remuneration received by the President Director. This will be the Company's attention in the future. 27 The Company can strengthen the role of the Board of This will be the Company's attention in the future. Commissioners through empowering the nomination committee with a composition of 100 percent independent members. Independent members do not have to be Independent Commissioners, but can come from outside parties who fulfill the independence requirements. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 377
  378. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk SUPERIOR PERFORMANCE ASSESSMENT CRITERIA Superior Performance Assessment Criteria (KPKU) is a performance management and control system prepared by the Ministry of State-Owned Enterprises (SOE) as the standard guidelines for the Ministry of SOE and all SOEs in building, managing, and empowering their company’s systems and resources to achieve superior performance. KPKU assessment criteria were adopted from the Malcolm Baldrige Criteria for Performance Excellence (MBCfPE) and has been implemented in SOE since 2012 as per Ministry of SOE Letter No. S-153/S.MBU/2012 dated July 19, 2012. Since 2005, BNI has integrated the performance assessment system of Malcolm Baldrige Criteria for Performance Excellence (MBCfPE) into the framework for the company’s performance development, and has continued its implementation in the form of SOE’s KPKU. KPKU assessment criteria consists of a number of questions representing the fundamental aspects of the management of company/organization in the context of achieving superior performance. Such questions are classified in 7 (seven) categories, as follows: 1. Leadership 2. Strategic Planning 3. Focus on Customers 4. Measurement, Analysis, and Management of Knowledge 5. Focus on Manpower 6. Focus on Operation 7. Business Results For BNI, as one of the SOEs implementing KPKU, the evaluation process of the above seven categories will result in performance improvement feedback (OFI/Opportunity For Improvement), and a performance rating with a world class rating standard because SOE’s KPKU is extracted from Malcolm Baldrige Criteria, which is indeed designed to assess company’s performance based on the characteristics of world-class companies. The rating performance is divided into several levels, which are: World Leader Emerging Industry Leader Early Improvement Industry Leader Benchmark Leader Good Performance Early Results Early Development Since implementing MBCfPE system in 2005, the assessment results have shown that BNI’s KPKU score always increases from time to time. The 2016 KPKU assessment results that took place at the end of January 2017 have succeeded in obtaining the “Emerging Industry Leader” Band Score. For 2018, KPKU assessment was not carried out, therefore, the previous year’s assessment results are still valid. Through KPKU framework implementation, BNI obtains a comprehensive picture of the company’s condition from various aspects, either the processes or the results. Through a portrait of the company’s condition, BNI can acknowledge the company’s strengths and weaknesses. The company’s weakness as wrapped up in OFI becomes a study, as well as a source of inspiration and trigger for BNI to make refinements and improvements in various fields. 378 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  379. Good Corporate Governance COMPANY ORGANS AND IMPLEMENTATION PROCESS OF GOOD CORPORATE GOVERNANCE In implementing BNI ’s management, the Board of Directors is supported by an organizational structure consisting of major organs and supporting organs to achieve effective management. In implementing the supervisory and advisory functions, the Board of Commissioners is supported by supporting organs, which are Secretary to Board of Commissioners, Audit Committee, Risk Monitoring Committee, Nomination and Remuneration Committee, and Integrated Governance Committee. STRUCTURE OF COMPANY ORGANS The structure of BNI’s organs is as follows. GENERAL MEETING OF SHAREHOLDERS Elect & Dismisses Board of Directors Check & Balances Board of Commissioners Secretary of the Board of Commissioners Reports to Internal Audit Unit Review Internal Audit reports Corporate Secretary Compliance Division Review Compliance reportsreports Management Division Bank’s Risk Division Policy Governance GCG Unit Credit Committee Integrated Risk Management Committee Risk and Capital Management Committee Risk Management Sub-Committee (RMC) Performance Management Committee Technology Management Committee Audit Committee Independent Auditor Risk Monitoring Committee Review Risk Management reports Nomination and Remuneration Committee Integrated Governance Committee Credit Policy and Procedure Committee Human Capital Committee Asset & Liability Sub-Committee (ALCO) Anti Fraud SubCommittee Product Committee PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 379
  380. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Principles Implementation of Good Corporate Governance (GCG) in BNI basically follows the roadmap that has been developed, through three main process groups (structure, process, and outcome), with reference to the GCG principles. GCG principles Transparency Accountability Responsibility Independency Fairness RUPS Governance Structure Dewan Komisaris Direksi Main Organs Komite Dewan Komisaris Komite Direksi Enterprises Risk Management Internal Audit Corporate Secretary Compliance Unit Company Policies and Reporting Process Flow Awareness Output Governance Process GCG Implementation Internalisasi Assessment Adapting Quickly to Face Change Monitoring/Evaluasi Performance Growth and Improvement of GCG Assessment Score (CGPI, ACGS, SA, KPKU) The process of GCG implementation by company organs in executing the functions and duties is supported by various policies/guidelines called GCG infrastructure. GCG infrastructure owned by BNI, among others, are: 1. The Bank’s Articles of Association No. 52 dated May 22, 2018, which have been received and recorded in the Legal Entity Administration System of the Ministry of Law and Human Rights of the Republic of Indonesia under the number AHU0012962.AH.01.02 Tahun 2018 dated June 25, 2018. 2. BNI’s Code of Ethics as BNI Employees’ Code of Conduct. 3. Board Manual of the Board of Commissioners, whose update has been validated by Board of Commissioners’ Decision Letter No. KEP/0049/DK/2017 dated October 26, 2017. 4. Board Manual of the Board of Directors, whose update has been validated by Board of Directors’ Decisions Letter No. KP/228/DIR/R dated June 29, 2018. 5. The Integrated Governance Guidelines, which have been approved by the Board of Commissioners through Board of Directors’ Decision Letter No. DIR/796 dated 12 December 2018 and Decision Letter of Board of Commissioners No. DIR/140 dated 13 December 2018. 6. Guidelines of Integrated Risk Management, which has been approved by the Board of Commissioners through Board of Commissioners’ Letter No. DK/27 dated March 8, 2016 and stipulated in e-PP No. IN/239/ERM/001 dated April 28, 2016. 7. Guidelines of Conflict of Interest, which has been set forth in the Online Company Manual (e-PP) No. IN/695/KMP/001 dated October 29, 2014. 380 Externalization 8. Guidelines of Corporate Secretary, which has been validated by Board of Directors’ Decision Letter No. KP/356/DIR/R dated September 2, 2016. 9. Company Guidelines for Securities Transactions which are Prohibited and not Prohibited for Insiders. 10. Audit Committee Charter, which has been approved by the Board of Commissioners through the Board of Commissioners’ Decision Letter No. KEP/009/DK/2016 dated April 14, 2016. 11. Risk Monitoring Committee Charter, which has been approved by the Board of Commissioners through the Board of Commissioners’ Decisions Letter No. KEP/024/ DK/2016 dated July 21, 2016. 12. Remuneration and Nomination Committee Charter, which has been validated through the Board of Commissioners’ Decision Letter No. KEP 027/DK /2015 dated September 21, 2015. 13. Integrated Governance Committee Charter and Work Conduct, which has been approved by the Board of Commissioners through the Board of Commissioners’ Decisions Letter No. KEP/006/DK/2015 dated June 22, 2015. 14. Corporate Governance Handbook No. KEP/001/DK and KP/001/Dir dated January 3, 2001, on the Implementation of Governance Principles. 15. BNI Anti-Money Laundering and Countering Financing of Terrorism (AML & CFT) Policy Statement. 16. Related Company Manual for Procurement Procedures stipulated in e-PP. PT Bank Negara Indonesia (Persero) Tbk
  381. Good Corporate Governance 17 . Whistle Blowing System Policy, which has been validated through Joint Decision Letter of the Board of Directors and Board of Commissioners No. KEP/019/DK/2010 and No. KP/279/DIR dated December 1, 2010. 18. Risk and Capital Committee (KRK) Charter, which has been approved by the Board of Directors through Board of Directors’ Decisions Letter No. KP/483/DIR/R dated December 21, 2016. 19. Integrated Risk Management Committee (KMRT) Charter, which has been approved by the Board of Directors through Board of Directors’ Decisions Letter No. KP/193/DIR/R dated May 26, 2015. 20. Credit Policy and Procedure Committee Charter, in which there is a Sub-Committee of Credit Procedure (KPP), which has been approved by the Board of Directors through Board of Directors’ Decision Letter No. KP/253/DIR/R dated June 1, 2016. 21. Performance Management Committee Charter, which has been approved by the Board of Directors through Board of Directors’ Decision Letter No. KP/466/DIR/R dated October 5, 2012, on BNI’s Performance Management Committee (PMC). 22. Product Committee Charter, which has been approved by the Board of Directors through Board of Directors’ Decision Letter No. KP/448/ DIR/R dated September 20, 2012, on BNI’s Product Committee (PRC). 23. Technology Management Committee Charter, which has been approved by the Board of Directors through Board of Directors’ Decision Letter No. KP/201/DIR/R dated June 14, 2011, which has been updated through Memo of the Planning Division No. REN/2/234/R dated May 4, 2016, on Amendment to Committee Membership. 24. Guidelines for GCG monitoring activities and Self Assessment Report as stipulated in e-PP No. IN/462/KMP/001 dated October 22, 2015. 25. Guidelines for Investor Relations activities as stipulated in e-PP No. IN/41/KMP/001 dated January 26, 2015. 26. Guidelines for Preparation of Bank’s Business Plan as stipulated in e-PP No. IN/92/REN/001 dated March 17, 2014. 27. Guidelines for Accounting Policy Management as stipulated in e-PP No. IN/406/PKU/001 dated August 24, 2016. 28. Employment Guidelines for Performance Assessment as stipulated in e-PP No. IN/99/HCT/001 dated February 29, 2016. 29. Employment Guidelines for Employee Code of Conduct No. IN/648/HCT/001 dated October 10, 2014. PT Bank Negara Indonesia (Persero) Tbk  GOOD CORPORATE GOVERNANCE MECHANISM SHAREHOLDERS A shareholder is a person or a legal entity that legally owns one or more shares of the Company and is a party authorized to exercise the rights granted by the law on shares. The Company’s shares are registered stocks consisting of: 1. Dwiwarna A Series shares that can only be owned by the State of the Republic of Indonesia, and 2. B Series shares and C Series shares are common stocks that can be owned by the State of the Republic of Indonesia and the public. SHAREHOLDERS’ RIGHTS Unless stipulated otherwise in the Articles of Association, Shareholders of Dwiwarna A Series, B Series, and C Series have the same rights and every 1 (one) share gives 1 (one) voting right. Based on the Articles of Association, Dwiwarna A Series Shares are shares specially held by the State of the Republic of Indonesia, which give the holders the following privileges: 1. The right to approve in GMS on the following matters: a. Approval for amendment to the Articles of Association. b. Approval for changes to equity. c. Approval for appointment and dismissal of members of Board of Directors and Board of Commissioners. d. Approval for merger, consolidation, acquisition, split, and dissolution. e. Approval for remuneration of members of Board of Directors and Board of Commissioners. f. Approval for asset transfer based on Articles of Association that requires GMS approval. g. Approval for participation and reduction of the percentage of equity participation in other companies based on the Articles of Association that requires GMS approval. h. Approval for the use of profits. i. Approval for investment and long-term financing that is not operations in nature based on the Articles of Association that requires GMS approval. 2. The right to propose candidates for members the Board of Directors and candidates for members of the Board of Commissioners. 3. The right to propose GMS agenda. 4. The right to request and access company data and documents with the mechanism of the use of such rights in accordance with the provisions in the Articles of Association and laws and regulations. Adapting Quickly to Face Change 381
  382. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk In addition to the privileges held by Dwiwarna A Series Shareholders, Dwiwarna A Series Shareholders, B Series Shareholders, and C Series Shareholders have the same rights unless otherwise stipulated by the Articles of Association, as follows: 1. The right to attend, express opinions, and vote in GMS based on shares. 2. The opportunity to propose an agenda at the GMS. 3. The opportunity to grant power to another party in the event that the shareholder is unable to attend the GMS. 4. The right to obtain meeting materials immediately after the GMS notification. 5. In the GMS forum, they are entitled to obtain information relating to the Company from the Board of Directors and/or the Board of Commissioners, as long as it relates to the meeting agenda and does not conflict with the Company’s interests. 6. The opportunity to vote in agreement, disagreement, or abstain from any proposed resolution of the GMS agenda. 7. The right to obtain information about the company in a timely, correct, and orderly manner, except for confidential matters. 8. The right to receive a share of the company’s profits designated for Shareholders in the form of dividends and other profit sharing, that is proportional to the number of shares held. 9. The right to obtain complete explanation and accurate information about procedures that shall be fulfilled with regard to GMS implementation. 10. The opportunity to see shareholder register and special register. POLICY OF RELATIONSHIP WITH SHAREHOLDERS In order to implement good governance principles, especially in the aspect of openness, the Company always strives to ensure the company’s transparency on financial and non-financial information in a fair and timely manner, to all shareholders, including minority shareholders and foreign shareholders. In order to realize such transparency of information, the Corporate Secretary has an active role in the implementation of the bank’s information disclosure to shareholders as stipulated in Article 5 of FSA Regulation No. 35/POJK.04/2014 on Corporate Secretary of Issuer or Public Company; the Corporate Secretary serves as a liaison between the Bank and shareholders, including the Financial Services Authority and other stakeholders. To foster intensive, systematic, and planned relationship with Shareholders, the Bank has internal company policies as stipulated in the Company Regulations No. IN/794/KMP/001 dated December 23, 2014. 382 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  383. Good Corporate Governance GENERAL MEETING OF SHAREHOLDERS GMS IMPLEMENTATION GMS is the highest organ of a limited liability company , which has the right and authority that are not owned by the Board of Directors and Board of Commissioners. Thus, GMS is the highest organ in the Bank. GMS is a crucial organ in the Bank with roles to determine direction and objectives of the Bank as stipulated in the Bank’s Articles of Association. Moreover, the GMS also determines important matters related to the Bank. GMS AGENDA MATERIAL 1. GMS Agenda Material is a document containing the composition of Meeting Agenda accompanied by the legal basis and explanations related to the GMS Agenda. 2. The Bank provides GMS agenda material that can be accessed by Shareholders from the date of the GMS Notice to the GMS implementation. 3. GMS Agenda Material is available at the Bank’s Head Office and can be accessed on the Bank’s Website, both in Indonesian and in English. 4. In the event of Changes in the Management of the Bank, curriculum vitae of candidate member of the Board of Commissioners and Board of Directors of Public SOE that will be proposed to be appointed at the GMS, is available and announced at the time of the GMS, before making decisions regarding the appointment of the candidate to be member of Board of Commissioners and Board of Directors. This is as stipulated in the Minister of StateOwned Enterprises Regulation No. PER-02/MBU/02/2015 on the Requirements and Procedures for Appointment and Dismissal of Members of Board of Commissioners and Board of Supervisors of State-Owned Enterprises, and State-Owned Enterprise Minister Regulation No. PER-03/MBU/02/2015 on the Requirements, Procedures for Appointment and Dismissal of Members of Board of Directors of State-Owned Enterprises. Based on the Bank’s Articles of Association, BNI’s GMS consists of Annual GMS and other GMS, usually called as Extraordinary GMS (EMGS), which can be held any time as deemed necessary. LEGAL FOUNDATION TO ORGANIZE GMS Organizing Annual GMS and Extraordinary GMS is performed by referring to the following requirements: 1. The Bank’s Articles of Association. 2. Law No. 40 of 2007 on Limited Liability Company. 3. Law No. 19 of 2003 on State-Owned Enterprises. 4. Financial Services Authority Regulation No. 10/ POJK.04/2017 on Amendment to Financial Services Authority Regulation No. 32/POJK.04/2014 dated December 8, 201, on Planning and Organizing GMS for Public Company. 5. State-Owned Enterprise Minister Regulation No. PER-02/ MBU/02/2015 on the Requirements and Procedures for Appointment and Dismissal of Members of the Board of Commissioners and Board of Supervisors of State-Owned Enterprises. 6. State-Owned Enterprise Minister Regulation No. PER-03/ MBU/02/2015 on the Requirements, Procedures for Appointment and Dismissal of Members of Board of Directors of State-Owned Enterprises. PT Bank Negara Indonesia (Persero) Tbk  GMS CONDUCT 1. GMS conduct is carried out by referring to Financial Services Authority Regulation No. 10/POJK.04/2017 on Amendment to Financial Services Authority Regulation No. 32/POJK.04/2014 on Planning and Organizing General Meeting of Shareholders of Public Companies. 2. The GMS Conduct is distributed to shareholders/their proxies at the time of registration. 3. The GMS Conduct regulates, among others, meeting participants who have the right to attend the GMS, Meeting Chairperson, Language used in the GMS, meeting quorum and decision making, mechanism of questioning and responding, mechanism of decision making, and voting procedures. 4. The principles of the GMS conduct are read out before the GMS begins. In accordance with the provisions of the GMS Conduct as stipulated in the Bank’s Articles of Association, at the opening of the GMS, the Chairperson of the GMS provides an explanation to the shareholders on: a. The Bank’s general conditions in brief b. GMS agenda c. Mechanism of decision-making related to GMS agenda, and d. Procedures for using shareholders rights to raise questions and/or share opinions. Adapting Quickly to Face Change 383
  384. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk CHAIRPERSON OF THE MEETING Based on Article 24 paragraph (1.1) of the Bank’s Articles of Association, the Chairperson of the GMS is a member of the Board of Commissioners appointed by the Board of Commissioners. PROVISIONS OF ATTENDANCE QUORUM The quorum at the GMS shall be attended by shareholders representing more than ½ (one half ) of the total shares with valid voting rights, and the resolution is valid if approved by more than ½ (one half ) of the total shares with valid voting rights attending the GMS unless the laws and/or Articles of Association stipulate a larger number of quorum. In the event that the attendance quorum is not met, the second GMS is valid and has the right to adopt binding resolutions if attended by shareholders representing at least 1/3 (one third) of the total shares with valid voting rights, and the resolution is valid if approved by more than ½ (one half ) of the total shares with voting rights attending the GMS unless the laws and/or Articles of Association stipulate a larger number of quorum. PROCEDURE FOR QUESTION AND ANSWER AND GIVING RESPONSE 1. Only the shareholders and/or their proxies who have registered for the GMS have the rights to ask questions and/or give responses. 2. Question and/or response forms are submitted to shareholders or their proxies at the time of GMS registration. 3. After the Chairperson of the GMS or the party appointed by the Chairperson of the GMS delivers a proposal regarding matters to be decided at the GMS, the Chairperson of the GMS will provide an opportunity to the Bank’s shareholders or their proxies to ask questions and/or give responses before a vote is held on the related matter. 4. For Shareholders or their proxies who wish to raise questions and/or give responses, the Chairperson of the GMS invites shareholders/their proxies to submit questions and/or responses to the Chairperson of the GMS in writing by putting down the names and number of shares owned or represented. Questions and/or responses submitted shall relate directly to the GMS agenda being discussed. VOTING PROCEDURE 1. In the GMS, each share gives the right to the owner to cast 1 (one) vote. 2. In voting, the votes cast by the Shareholders are valid for all shares owned and the shareholders are not entitled to give power to more than one power of attorney for a portion of the number of shares they have with a different vote. These provisions are excluded for: a. Custodian Bank or Securities Company as Custodian representing its customers who are owners of the Bank’s shareholders. b. Investment Managers who represent the interests of the Mutual Funds they manage. 3. All GMS resolutions are taken based on deliberation to reach consensus. 4. In the event that a resolution based on deliberation for consensus is not reached, then the GMS resolution is taken based on the agreed votes. 5. Shareholders or their Proxies who disagree or abstain from the proposed GMS resolution will be invited by the Chairperson of the GMS to raise their hands and submit the voting cards to the Meeting officers to count the votes. Shareholders and/or their Proxies who do not raise their hands are declared agree. 6. After the votes are counted and reported by the Notary, the Chairperson of the GMS will announce the voting results. 7. Shareholders with voting rights who are present at the GMS but not casting vote (abstain) are considered to cast the same vote as the majority vote of the voting Shareholders.. VOTING CALCULATION PROCEDURE The Notary calculates the vote with the assistance of the Share Registrar Bureau by counting the disagree voting cards or abstain votes submitted by the Shareholders/their Proxies through the Meeting officers. The voting calculation is carried out by scanning the barcode on the said Sound Card with a barcode scanner. Abstain votes are added to the Agree votes or to the Disagree votes, whichever is higher. After that, the Chairperson of the GMS will ask the Notary to report the voting calculation results. If the number of votes meets the specified quorum, then a GMS decision can be adopted. At the Bank’s Annual GMS dated March 20, 2018, Shareholders were given the opportunity to raise questions and/or give opinions related to each Meeting agenda, but no shareholders/their proxies asked questions and/or gave opinions. 384 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  385. Good Corporate Governance INVOLVEMENT OF INDEPENDENT PARTIES IN GMS Share Registrar Bureau is a Party that based on a contract with the Bank /Issuer records the securities ownership and distribution of rights relating to the securities. The Share Registrar Bureau assists the Bank/Issuer in convening the GMS, which among others includes: 1. Notary A Notary is a public official who is authorized to make an authentic deed and has other authorities as referred to in the Law on the position of a notary that is registered with the Financial Services Authority as a capital market supporting profession. Notary plays a role in examining the validity of supporting documents and paying attention to the formalities requirements for the GMS implementation in order not to conflict with the laws and regulations and articles of association. 2. Share Registrar Bureau Share Registrar Bureau is a Party that based on a contract with the Bank/Issuer records the securities ownership and distribution of rights relating to the securities. The Share Registrar Bureau assists the Bank/Issuer in convening the GMS, which among others includes: a. Preparing proxies from minority shareholders b. Publishing Written Confirmation for Meetings (KTUR) c. Validating shareholders who are entitled to attend the GMS and register them d. Calculating shareholders presence in connection with the GMS quorum e. Providing voting card for shareholders. f. Helping Notary in calculating votes using a barcode scanner. 3. Public Accountant Firm The Public Accountant Firm is present as the party that audits the Bank’s Financial Statements and Annual Report on the Implementation of Partnership and Community Development Program. COMPANY’S EFFORTS TO IMPROVE SHAREHOLDERS ATTENDANCE IN THE GMS As an effort of the Company to facilitate Shareholders to exercise their rights and authority at the GMS, the Company carries out the following efforts: 1. The Company announces and summons the GMS in a timely manner, in Indonesian and English, which is published in 2 (two) national circulation newspapers, company websites, and the Indonesia Stock Exchange website. 2. In the Announcement and Summon of the GMS, the Company clearly describes the authorized shareholders to attend/represent and vote in the GMS, who are the Company’s Shareholders whose names are registered in the Bank’s Shareholders Register or Shareholders in securities accounts at the Indonesian Central Securities Depository on the Summoning Day. 3. On the website, the Company provides contacts that shareholders can use to communicate in connection with the holding of the GMS. 4. The company provides services to shareholders who need information and/or will ask questions related to the GMS plan and/or GMS agenda through either direct meetings or correspondence via email. STAGES OF ORGANIZING GMS Referring to the applicable provisions, the stages of organizing the Company’s GMS are as follows: 1 Notification of the GMS Plan to FSA 4 GMS Implementation 2 Publication of the GMS Announcement 5 Publication of Summary of GMS Minutes 3 Publication of GMS Notice 6 Submission of GMS Minutes to FSA PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 385
  386. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk GMS IMPLEMENTATION IN 2018 Throughout 2018, BNI held 1 (one) GMS, which was the Annual GMS of 2017 Fiscal Year on March 20, 2018 . The implementation of the Bank’s Annual GMS was carried out in accordance with the Bank’s Articles of Association and the provisions of organizing GMS for Public Company as stipulated in the Financial Services Authority Regulation No. 32/ POJK.04/2014 dated Dedember 8, 2015 about the plan and implementation of GMS public companies : as much as changed with The Financial Services authority No. 10/POJK.04/2017: Notification to FSA GMS Announcement Provisions The Bank notifies the Financial Services Authority no later than 5 (five) days prior to the GMS announcement The Bank must make a GMS Announcement to shareholders no later than 14 (fourteen) days prior to the GMS notice. Publication of GMS Announcement is conducted through 1 (one) Indonesian language daily newspaper, Stock Exchange website, and Public Company website in Indonesian and foreign languages Implementation Notification of the plan to convene Annual GMS was delivered on January 30, 2018, to FSA. Notification of Changes to the Annual GMS Date was announced on February 5, 2018. Compliance Complied Stages GMS Implementation Summary of GMS Minutes The Bank must make a Notice to shareholders no later than 21 (twenty one) days before the GMS. Publication of GMS Notice is conducted through 1 (one) Indonesian language daily newspaper, Stock Exchange website, and Public Company website in Indonesian and foreign languages The Annual GMS must be held within 6 (six) months the most after the Bank's fiscal year ends. The Bank must make a summary of the GMS minutes. Publication of Summary of GMS Minutes is conducted no later than 2 (two) business days after GMS is held through 1 (one) Indonesian language daily newspaper, Stock Exchange website, and Public Company website in Indonesian and foreign languages The Bank must make GMS Minutes and must submit it to the Financial Services Authority no later than 30 (thirty) days after the GMS is held. Announcement of the Annual GMS was conducted on February 9, 2018. The Publication was made through The Investor Daily and The Jakarta Post, and can be accessed through Indonesia Stock Exchange website and the Bank’s website in Indonesian and English languages. The Annual GMS Notice was conducted on February 26, 2018. The Bank Revised the Annual GMS Notice, which was conducted on March 9, 2018. Publication was made through The Investor Daily and The Jakarta Post, and can be accessed through Indonesia Stock Exchange website and the Bank’s website in Indonesian and English languages. Annual GMS was held on March 20, 2018, at 14.00 WIB (Western Indonesian Time) until finished, at Ballroom Shangri-La Hotel, Jakarta, located at Jalan Jenderal Sudirman Kavling 1. Jakarta, 10220. Summary of the Annual GMS Minutes was published on March 22, 2018, through The Investor Daily and The Jakarta Post, and can be accessed through Indonesia Stock Exchange website and the Bank’s website in Indonesian and English languages. The Bank submitted the GMS Minutes to the Financial Services Authority on March 29, 2018, in the form of Deed of GMS Minutes prepared by a notary, which was Deed of Annual GMS Minutes No. 37 dated March 20, 2018, made before Notary Fathiah Helmi, S.H. The Bank’s Annual GMS Minutes can be accessed through the Bank’s website in Indonesian and English languages. Complied Complied Complied Complied Complied GMS Notice GMS Minutes The Bank’s 2018 Annual GMS Agenda Material The Agenda Material of the Annual GMS held on March 20, 2018, can be accessed through the Bank’s website as follows: http:// bni.co.id/portals/1/bni/perusahaan/docs/Buku%20Materi%20Rapat.pdf The Bank’s 2018 Annual GMS Conduct The Conduct of the Annual GMS held on March 20, 2018, can be accessed through the Bank’s website as follows: http://bni. co.id/portals/1/bni/perusahaan/docs/Buku%20Tata%20Tertib.pdf 386 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  387. Good Corporate Governance THE BANK ’S GMS AGENDA 2018 The agenda of the Annual GMS for 2017 Fiscal Year, which was held on March 20, 2018, is as follows: Agenda - Item 1 Approval for the Annual Report and Ratification of the Bank's Consolidated Financial Statements, Approval for the Board of Commissioners' Supervisory Duties Report, and Ratification of the Annual Report for the Implementation of the 2017 Partnership & Community Development Program, including submission of the Accountability Report of Realization of the Use of Proceeds of Public Offering of Sustainable Bonds I BNI Phase I Year 2017 and granting the release of full responsibility (volledig acquit et de charge) to the Board of Directors and Board of Commissioners of the Bank for the management and supervision actions that were carried out during the 2017 Fiscal Year Agenda - Item 2 Approval for the use of the Bank's Net Profit for the 2017 Fiscal Year Agenda - Item 3 Determination of remuneration (salary/honorarium, facilities and allowances) for 2018 Fiscal Year and tantiem for 2017 Fiscal Year for the Board of Directors and Board of Commissioners of the Bank Agenda - Item 4 Determination of the Public Accountant Firm to audit the Bank's Financial Statements and the Annual Report for the Implementation of Partnership and Community Development Program for 2018 Fiscal Year Agenda - Item 5 Approval for the Bank's Recovery Plan Agenda - Item 6 Inauguration of the Enactment of SOE Minister Regulation No. PER-02/MBU/7/2017 on Second Amendment to SOE Minister Regulation No. PER-09/MBU/07/2015 on Partnership Program and Community Development Program of State-Owned Enterprises Agenda - Item 7 Approval for the Amendments to the Bank's Articles of Association Agenda - Item 8 Change in the composition of the Bank's Management MEETING CHAIR IN THE BANK’S 2018 ANNUAL GMS On the GMS dated March 20, 2018, based on the Board of Commissioners’ Letter No. DK/31 dated March 16, 2018, the Board of Commissioners appointed Ari Kuncoro (President Commissioner/Independent Commissioner) as the Chairperson of the Meeting and as the Substitute Chairperson of the Meeting I was Mr. Wahyu Kuncoro (Vice President Commissioner), and Substitute Chairperson of the Meeting II was Mr. Pataniari Siahaan (Independent Commissioner). ATTENDANCE OF COMPANY’S MANAGEMENT IN GMS The Board of Commissioners and Board of Directors attending the Annual GMS of 2017 Fiscal year, which was held on March 20, 2018, are as follows: No. Name Position Attendance Present Absent Description Board of Commissioners 1. Ari Kuncoro President Commissioner/Independent Commissioner √ 2. Wahyu Kuncoro Vice President Commissioner √ 3. Pataniari Siahaan Independent Commissioner √ 4. Revrisond Baswir Independent Commissioner √ 5. Bistok Simbolon Commissioner √ 6. Marwanto Harjowiryono Commissioner √ 7. Joni Swastanto Commissioner √ 8. Ahmad Fikri Assegaf Independent Commissioner √ ATTENDANCE PT Bank Negara Indonesia (Persero) Tbk  100% Adapting Quickly to Face Change 387
  388. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk No. Name Position Attendance Present Absent Description Board of Directors 1. Achmad Baiquni President Director √ 2. Herry Sidharta Vice President Director √ 3. Rico Rizal Budidarmo Director of Finance and Credit Risk √ 4. Putrama Wahju Setyawan Director of Medium Business √ 5. Anggoro Eko Cahyo Director of Consumer Banking √ 6. Panji Irawan Director of Treasury and International √ 7. Catur Budi Harto Director of Small Business and Network √ 8. Adi Sulistyowati Director of Institutional Relations and Banking Transactional √ 9. Bob Tyasika Ananta Director of Planning and Operations √ 10. Imam Budi Sarjito Director of Compliance and Corporate Risk √ ATTENDANCE 100% ATTENDANCE OF INDEPENDENT PARTIES IN 2018 ANNUAL GMS The independent parties attending the GMS of 2017 Fiscal Year are as follows: 1. Notary In the Bank’s Annual GMS on March 20, 2018, the Notary who assisted in organizing the Meeting was Notary Fathiah Helmi, SH. 2. Share Registrar Bureau In the Bank’s Annual GMS on March 20, 2018, the Share Registrar Bureau that assisted in organizing the Meeting was PT Datindo Entrycom. 3. Public Accountant Firm In the Bank’s Annual GMS on March 20, 2018, the Public Accountant Firm that attended was the Public Accountant Firm Purwantono, Sungkoro & Surja – a member Firm of Ernst & Young global network. GMS ATTENDANCE AND RESOLUTION QUORUM Establishing GMS attendance and resolution quorum refers to Article 25 of the Bank’s Articles of Association. The Bank’s Annual GMS on March 20, 2018, was attended by 16,329,884,642 shares including Dwiwarna A Series Shares, which had valid voting rights equaling to 87.566% of the total shares with valid voting rights issued by the Bank. Referring to the Bank’s Annual GMS implementation on March 20, 2018, the Attendance and Resolution Quorum based on the Agenda are as follows: 388 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  389. Good Corporate Governance Provisions of Attendance Quorum Resolution Quorum Provisions Resolution Quorum of Annual GMS March 20 , 2018 Complied Resolutions are valid if approved by more than 1/2 (one half ) portion of the total shares with valid voting rights attending the GMS. Approved by 16,294,383,042 votes or 99.78% part of the total shares with voting rights attending the Meeting, therefore, the resolution quorum was fulfilled. Attended by shareholders representing more than 1/2 (one half ) portion of the total shares with valid voting rights. Complied Resolutions are valid if approved by more than 1/2 (one half ) portion of the total shares with valid voting rights attending the GMS. Approved by 16,253,252,242 votes or 99.53% part of the total shares with voting rights attending the Meeting, therefore, the resolution quorum was fulfilled. Attended by shareholders representing more than 1/2 (one half ) portion of the total shares with valid voting rights. Complied Resolutions are valid if approved by more than 1/2 (one half ) portion of the total shares with valid voting rights attending the GMS. Approved by 15,711,499,429 votes or 96.21% part of the total shares with voting rights attending the Meeting, therefore, the resolution quorum was fulfilled. Agenda Basis of Proposal Approval for the Annual Report and Ratification of the Bank’s Consolidated Financial Statements, Approval for the Board of Commissioners’ Supervisory Duties Report, and Ratification of the Annual Report for the Implementation of the 2017 Partnership & Community Development Program, including submission of the Accountability Report of Realization of the Use of Proceeds of Public Offering of Continuous Bonds I BNI Phase I Year 2017 and granting the release of full responsibility (volledig acquit et de charge) to the Board of Directors and Board of Commissioners of the Bank for management and supervision actions that were carried out during the 2017 Fiscal Year. Article 69 of Law of Limited Liability Company. Article 22 paragraph (2) of SOE Minister Regulation No. Per-07/ MBU/05/2015, which was amended by SOE Minister Regulation No. Per-02/MBU/7/2017 on the Second Amendment to the State-Owned Enterprise Minister Regulation No. Per-09/MBU/07/2015 on Partnership Program and Community Development Program of State-Owned Enterprise. Financial Services Authority Regulation No. 30/POJK.04/2015 on Report of Actual Use of Proceeds from the Public Offering. Article 21 paragraph (2) of the Bank’s Articles of Association. Attended by shareholders representing more than 1/2 (one half ) portion of the total shares with valid voting rights. Approval for the use of the Bank’s Net Profit for the 2017 Fiscal Year. Article 70 and Article 71 of Law on Limited Liability Company. Article 21 paragraph (2) and Article 26 paragraph (2) of the Bank’s Articles of Association Determination of remuneration (salary/honorarium, facilities and allowances) for 2018 Fiscal Year and tantiem for 2017 Fiscal Year for the Board of Directors and Board of Commissioners of the Bank. Articles 96 and 113 of Law on Limited Liability Company. SOE Minister Regulation No. Per-04/MBU/2014, which was amended by SOE Minister Regulation No. Per-01/MBU/06/2017 on Guidelines to Establish Remuneration of Board of Directors, Board of Commissioners, and Board of Supervisors of SOE. Article 11 paragraph (19), Article 14 paragraph (30), and Article 26 paragraph (2) of the Bank’s Articles of Association. PT Bank Negara Indonesia (Persero) Tbk  Attendance Quorum of Annual GMS March 20, 2018 Adapting Quickly to Face Change 389
  390. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Agenda 390 Basis of Proposal Provisions of Attendance Quorum Attendance Quorum of Annual GMS March 20, 2018 Resolution Quorum Provisions Resolution Quorum of Annual GMS March 20, 2018 Determination of the Public Accountant Firm to audit the Bank's Financial Statements and the Annual Report for the Implementation of Partnership and Community Development Program for 2018 Fiscal Year. Article 21 paragraph (2) of the Bank's Articles of Association. Attended by shareholders representing more than 1/2 (one half ) portion of the total shares with valid voting rights. Complied Resolutions are valid if approved by more than 1/2 (one half ) portion of the total shares with valid voting rights attending the GMS. Approved by 15,640,575,837 votes or 95.78% part of the total shares with voting rights attending the Meeting, therefore, the resolution quorum was fulfilled. Approval for the Bank's Recovery Plan. Financial Services Authority Regulation No. 14/POJK.03/2017 on Recovery Plan for Systemic Banks. Attended by shareholders representing more than 1/2 (one half ) portion of the total shares with valid voting rights. Complied Resolutions are valid if approved by more than 1/2 (one half ) portion of the total shares with valid voting rights attending the GMS. Approved by 16,305,925,487 votes or 99.85% part of the total shares with voting rights attending the Meeting, therefore, the resolution quorum was fulfilled. Inauguration of the Enactment of SOE Minister Regulation No. PER-02/MBU/7/2017 on the Second Amendment to Regulation of Minister of StateOwned Enterprise No. PER-09/ MBU/07/2015 on Partnership Program and Community Development Program of State-Owned Enterprise. SOE Minister Regulation No. PER-02/MBU/7/2017 on the Second Amendment to Regulation of Minister of StateOwned Enterprise No. PER-09/MBU/07/2015 on Partnership Program and Community Development Program of State-Owned Enterprise. Attended by shareholders representing more than 1/2 (one half ) portion of the total shares with valid voting rights. Complied Resolutions are valid if approved by more than 1/2 (one half ) portion of the total shares with valid voting rights attending the GMS. Approved by 16,319,090,442 votes or 99.93% part of the total shares with voting rights attending the Meeting, therefore, the resolution quorum was fulfilled. Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  391. Good Corporate Governance Provisions of Attendance Quorum Agenda Basis of Proposal Approval for the Amendments to the Bank ’s Articles of Association. Article 88 of Law of Limited Liability Company. Article 28 of the Bank’s Articles of Association. The GMS was attended by Dwiwarna A Series shareholders and other shareholders and/or their authorized proxies who together representing at least 2/3 (two thirds) of the total shares with valid voting rights. Change in the Company’s Management. Article 94 and Article 111 of Law on Limited Liability Company. SOE Minister Regulation No. PER-02/MBU/02/2015 dated February 17, 2015, on the Requirements, Procedures for Appointment and Dismissal of Members of the Board of Commissioners and Board of Supervisors of StateOwned Enterprises. SOE Minister Regulation No. PER-03/MBU/02/2015 dated February 17, 2015, on the Requirements, Procedures for Appointment and Dismissal of Members of Board of Directors of StateOwned Enterprises. Article 11 paragraph (10) and Article 14 paragraph (12) of the Bank’s Articles of Association. The GMS was attended by Dwiwarna A Series shareholders and other shareholders and/or their authorized proxies who together representing more than 1/2 (one half ) of the total shares with valid voting rights. PT Bank Negara Indonesia (Persero) Tbk  Attendance Quorum of Annual GMS March 20, 2018 Resolution Quorum Provisions Resolution Quorum of Annual GMS March 20, 2018 Complied The resolutions were approved by Dwiwarna A Series shareholders and other shareholders and/or their authorized proxies who together representing more than 2/3 (two thirds) of the total shares with valid voting rights attending the GMS. Approved by 12,014,624,743 votes or 73.57% part of the total shares with voting rights attending the Meeting, including Dwiwarna A Series shareholders, therefore, the resolution quorum was fulfilled. Complied The resolutions were approved by Dwiwarna A Series shareholders and other shareholders and/or their authorized proxies who together representing more than 1/2 (one half ) of the total shares with valid voting rights attending the GMS. Approved by 12,019,850,702 votes or 73.61% part of the total shares with voting rights attending the Meeting, including Dwiwarna A Series shareholders, therefore, the resolution quorum was fulfilled. Adapting Quickly to Face Change 391
  392. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk KEPUTUSAN DAN TINDAK LANJUT KEPUTUSAN RUPS TAHUNAN Perseroan TAHUN 2018 The resolutions of the Annual GMS of 2017 Fiscal Year, which was held on March 20, 2018, are as follows: Agenda – Item 1 Resolution 1. Approved the Bank’s Annual Report including the Supervisory Duty Report that has been carried out by the Board of Commissioners for the fiscal year ending on December 31, 2017, and ratified the Company’s Consolidated Financial Statements for the fiscal year ending on December 31, 2017, which was audited by the Public Accountant Firm Purwantono, Sungkoro & Surja - a member firm of Ernst & Young global network according to Report No. RPC-5575/ PSS/2018 dated January 15, 2018, with reasonable opinion in all material matters. 2. Ratified the Financial Statements for the Implementation of Partnership and Community Development Program for the fiscal year ending on December 31, 2017, which was audited by the Public Accountant Firm Purwantono, Sungkoro & Surja - a member firm of the Ernst & Young global network according to Report No. RPC-5806/PSS/2018 dated February 26, 2018, with reasonable opinion in all material matters. 3. Accepted the Accountability Report of Realization of the Use of Proceeds from the Public Offering of BNI Sustainable Bonds I Phase I Year 2017 of Rp3,000,000,000,000.00 (Three trillion Rupiah). 4. Granted full release of responsibility (volledig acquit et de charge) to all members of the Board of Directors and members of the Board of Commissioners for the management and supervision actions that were carried out during the fiscal year ending on December 31, 2017, as long as these actions are not criminal offense and these actions are reflected in the Annual Report, the Bank’s Consolidated Financial Statements, and the Financial Statements for the Implementation of Partnership and Community Development Program for the fiscal year ending on December 31, 2017. Voting Results (Total Votes and Percentage) Agree 16,294,383,042 votes or 99.78% part of the entire shares with voting rights attending the Meeting Disagree 9,994,200 votes or 0.06% part of the entire shares with voting rights attending the Meeting Abstain 25,507,400 votes or 0.16% part of the entire shares with voting rights attending the Meeting Realization/ Follow Up The Financial Statements and Annual Reports had been submitted to the Financial Services Authority and the Indonesia Stock Exchange on January 18, 2018, and February 26, 2018. Status Completed Agenda – Item 2 Resolution Voting Results (Total Votes and Percentage) 392 Approved and stipulated the use of the Bank’s Net Profit for the fiscal year ending on December 31, 2017, amounting to Rp13,616,475,751,928.00 (Thirteen trillion six hundred sixteen billion four hundred seventy five million seven hundred fifty one thousand nine hundred twenty eight rupiah), hereinafter referred to as ”Net Income for 2017 Fiscal Year” as follows: 1. Dividend of 25% or Rp3,404,118,937,982.00 (Three trillion four hundred four billion one hundred eighteen million nine hundred thirty seven thousand nine hundred eighty two rupiah) and added by special dividend of 10% or Rp1,361,647,575,192.80 (One trillion three hundred sixty one billion six hundred forty seven million five hundred seventy five thousand one hundred ninety-two point eight zero cents rupiah), which therefore, the total dividend is 35% or Rp4,765,766,513,174.80 (Four trillion seven hundred sixty five billion seven hundred sixty six million five hundred thirteen thousand one hundred seventy four point eight zero cents rupiah), was stipulated as cash dividends distributed to shareholders to be paid under the following conditions: a. a.dividend specifically for Government share for 60% share ownership shall be deposited to the account of the State Treasury. b. b.granted authority and power to the Bank’s Board of Directors with substitution rights to determine the schedule and procedures for distributing dividends of 2017 fiscal year in accordance with the applicable provisions. 2. 65% or Rp8,850,709,238,753.20 (Eight trillion eight hundred fifty billion seven hundred nine million two hundred thirty eight thousand seven hundred fifty three point two zero cents rupiah) shall be used as Retained Earnings. Agree 16,253,252,242 votes or 99.53% part of the entire shares with voting rights attending the Meeting Disagree 75,832,400 votes or 0.46% part of the entire shares with voting rights attending the Meeting Abstain 800,000 votes or 0.00% part of the entire shares with voting rights attending the Meeting Realization/ Follow Up BNI announced the Schedule and Procedure for Distributing Cash Dividends for the 2017 Fiscal Year on March 22, 2018, and disbursed the cash dividends to shareholders on April 20, 2018 Status Completed Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  393. Good Corporate Governance Agenda – Item 3 Resolution 1. Granted authority and power to Dwiwarna A Series Shareholders to determine tantiem amount for 2017 fiscal year, and determined the salary/honorarium, allowances, facilities, and other incentives for members of the Board of Commissioners for 2018. 2. Granted authority and power to the Board of Commissioners by first obtaining written approval from Dwiwarna A Series Shareholder to determine tantiem amount for 2017 fiscal year, and determined the salary/honorarium, allowances, facilities, and other incentives for members of the Board of Directors for 2018. Voting Results (Total Votes and Percentage) Agree 15,711,499,429 votes or 96.21% part of the entire shares with voting rights attending the Meeting Disagree 606,898,813 votes or 3.72% part of the entire shares with voting rights attending the Meeting Abstain 11,486,400 votes or 0.07% part of the entire shares with voting rights attending the Meeting Realization/ Follow Up The GMS granted authority and power to Dwiwarna A Series Shareholders to determine tantiem amount for the 2017 fiscal year, and determined the salary/honorarium, allowances, facilities, and other incentives for members of the Board of Commissioners for 2018, and The GMS granted authority and power to the Board of Commissioners by first obtaining written approval from Dwiwarna A Series Shareholders to determine tantiem amount for the 2017 fiscal year, and determined the salary/ honorarium, allowances, facilities, and other incentives for members of the Board of Directors for 2018. Status Completed Agenda – Item 4 Resolution Voting Results (Total Votes and Percentage) 1. Established Public Accountant Firm Purwantono, Sungkoro & Surja - a member firm of the Ernst & Young global network, as the Public Accountant Firm to audit the Bank’s Financial Statements and Financial Statements for the Implementation of Partnership and Community Development Program for 2018 Fiscal Year. 2. Granted power to the Bank’s Board of Commissioners to determine the honorarium and other requirements for the Public Accountant Firm, as well as established a Substitute Public Accountant Firm in the event that Public Accountant Firm Purwantono, Sungkoro & Surja - a firm member of the Ernst & Young global network, for any reason cannot complete the audit of the Bank’s Financial Statements and the Financial Statements for the Implementation of Partnership and Community Development Program for 2018 Fiscal Year, including determined the honorarium and other requirements for the substitute Public Accountant Firm. Agree 15,640,575,837 votes or 95.78% part of the entire shares with voting rights attending the Meeting Disagree 688,508,805 votes or 4.22% part of the entire shares with voting rights attending the Meeting Abstain 800,000 votes or 0.00% part of the entire shares with voting rights attending the Meeting Realization/ Follow Up Public Accountant Firm Purwantono, Sungkono & Surja (member of Ernst and Young) finished conducting the Banks audit on January 24, 2019 Status Completed Agenda – Item 5 Resolution Voting Results (Total Votes and Percentage) Approved the Bank’s Recovery Plan in the framework of meeting FSA Regulation No. 14/POJK.03/2017. Agree 16,305,925,487 votes or 99.85% part of the entire shares with voting rights attending the Meeting Disagree 23,159,155 votes or 0.14% part of the entire shares with voting rights attending the Meeting Abstain 800,000 votes or 0.00% part of the entire shares with voting rights attending the Meeting Realization/ Follow Up The Bank has implemented the Recovery Plan by observing Financial Services Authority Regulation No. 14/POJK.03/2017 dated April 4, 2017, on Recovery Plan for Systemic Bank and fulfillment of obligations in the form of the Bank’s Recovery Plan document that has obtained approval from the SOE Ministry Status Completed PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 393
  394. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Agenda – Item 6 Resolution Voting Results (Total Votes and Percentage) 1. Approved the inauguration of enforcement of SOE State Minister Regulation No. PER-02/MBU/7/2017 on Second Amendment to SOE Minister Regulation No. PER-09/MBU/07/2015 on Partnership Program and Community Development Program of State-Owned Enterprise and its amendments. 2. Granted power to the Board of Commissioners by first obtaining written approval from the Shareholders of Dwiwarna A Series in relation with GMS authority as stipulated in SOE Minister Regulation No. PER-09/MBU/07/2015 as lastly amended by SOE State Minister Regulation No. PER-02/MBU/7/2017 and its amendments. Agree 16,319,090,442 votes or 99.93% part of the entire shares with voting rights attending the Meeting Disagree 9,994,200 votes or 0.06% part of the entire shares with voting rights attending the Meeting Abstain 800,000 votes or 0.00% part of the entire shares with voting rights attending the Meeting Realization/ Follow Up Bank BNI has enacted the SOE Minister Regulation No. PER-02/MBU/7/2017 on Second Amendment to SOE Minister Regulation No. PER-09/MBU/07/2015 on Partnership Program and Community Devel-opment Program of State-Owned Enterprise in 2018. Status Completed Agenda – Item 7 Resolution Voting Results (Total Votes and Percentage) 394 1. Approved amendments to the Bank’s Articles of Association as long as it does not add the rights of Dwiwarna A Series Shareholders. 2. Approved the rearrangement of all provisions in the Articles of Association in connection with such amendments as referred to in point 1 resolution above. 3. Granted power and authority to the Bank’s Board of Directors with substitution rights to take all necessary actions relating to the resolutions of this Meeting agenda, including drafting and restating all of the Bank’s Articles of Association in a Notarial Deed and submitting them to competent authorities to obtain approval and/or signs of receipt of notification of amendments to the Bank’s Articles of Association, to carry out everything that is deemed necessary and useful for such purpose without excluding anyone, including to make additions and/or amendments to the Bank’s Articles of Association if such matter is required by the competent authorities. Agree 12,014,624,743 votes or 73.57% part of the entire shares with voting rights attending the Meeting Disagree 4,301,745,199 votes or 26.34% part of the entire shares with voting rights attending the Meeting Abstain 13,514,700 votes or 0.08% part of the entire shares with voting rights attending the Meeting Realization/ Follow Up Amendments to the Articles of Association are contained in Deed No. 52 dated May 22, 2018, made before Fathiah Helmi, SH, a Notary in Jakarta, which has obtained approval from the Minister of Law and Human Rights of the Republic of Indonesia based on Decree No. AHU-0012962.AH.01.02.TAHUN 2018 dated June 25, 2018, in which the notification has been accepted and recorded in the database of Legal Entity Administration System under the Receipt Letter of Notification of Amendments to the Articles of Association No. AHU-AH.01.03-0215738 and has been registered in the Company Register No. AHU-0082015.AH.01.11.Tahun 2018 dated June 25, 2018 Status Completed Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  395. Good Corporate Governance Agenda – Item 8 Resolution 1. Dismissed with respect the names stated below from being members of the Bank’s Board of Directors: a. Mr. Panji Irawan as Director; b. Mr. Imam Budi Sarjito as Director, starting from the closing of this Meeting by conveying gratitude for the contribution of energy and thought given during the term of office as members of the Bank’s Board of Directors. 2. Changed the nomenclature of the Bank’s Board of Directors as follows:: No. Previous Now 1. Director Director of Corporate Banking 2. Director Director of Retail Banking 3. Director Director of Small Business and Network 4. Director Director of Treasury and International Banking 5. Director Director of Finance 6. Director Director of Information Technology and Operation 7. Director Director of Institutional Relations 8. Director Director of Risk Management 9. Director Director of Compliance 3. Transferring the duties of the names stated below as members of the Bank’s Board of Directors: No. Name Previous Now 1. Putrama Wahju Setyawan Director Director of Corporate Banking 2. Catur Budi Harto Director Director of Small Business and Network 3. Rico Rizal Budidarmo Director Director of Treasury and International Banking 4. Anggoro Eko Cahyo Director Director of Finance 5. Adi Sulistyowati Director Director of Institutional Relations 6. Bob Tyasika Ananta Director Director of Risk Management 4. Appointing the names stated below as members of the Bank’s Board of Directors: a. Ms. Tambok P. Setyawati as Director of Retail Banking b. Mr. Endang Hidayatullah as Director of Compliance c. Mr. Dadang Setiabudi as Director of Information Technology and Operation. The end of the term of office of the appointed members of Board of Directors shall be until the closing of the 5th Annual GMS since the appointment, which will be the Annual GMS to be held in 2022, with due observance of the laws and regulations in capital market sector and without prejudice to the GMS right to dismiss them at any time. 5. Appointed Mr. Sigit Widyawan as the Bank’s Independent Commissioner. The end of the term of office of the appointed Independent Commissioner shall be until the closing of the 5th Annual GMS since the appointment, which will be the Annual GMS to be held in 2022, with due observance of the laws and regulations in capital market sector and without prejudice to the GMS right to dismiss him at any time. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 395
  396. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Agenda – Item 8 6. With the dismissal, changes in nomenclature, transfer of of duties and appointment of members of the Bank’s Board of Directors and Independent Commissioner, the composition of the Bank’s members of Board of Directors and Board of Commissioners is as follows: a. Board of Directors No. Name Position 1. Achmad Baiquni President Director 2. Herry Sidharta Vice President Director 3. Putrama Wahju Setyawan Director of Corporate Banking 4. Tambok P. Setyawati Director of Retail Banking 5. Catur Budi Harto Director of Small Business and Network 6. Rico Rizal Budidarmo Director of Treasury and International Banking 7. Anggoro Eko Cahyo Director of Finance 8. Dadang Setiabudi Director of Information Technology and Operation 9. Adi Sulistyowati Director of Institutional Relations 10. Bob Tyasika Ananta Director of Risk Management 11. Endang Hidayatullah Director of Compliance b. Board of Commissioners No. Name Position 1. Ari Kuncoro President Commissioner/Independent Commissioner 2. Wahyu Kuncoro Vice President Commissioner 3. Bistok Simbolon Commissioner 4. Marwanto Harjowiryono Commissioner 5. Revrisond Baswir Independent Commissioner 6. Joni Swastanto Commissioner 7. Pataniari Siahaan Independent Commissioner 8. Ahmad Fikri Assegaf Independent Commissioner 9. Sigit Widyawan Independent Commissioner 7. Granted power and authority to the Bank’s Board of Directors with substitution right to take all necessary actions in relation to the resolutions of this Meeting agenda in accordance with the applicable laws and regulations, including to declare in a separate Notarial Deed and notify the composition of the Bank’s Board of Directors and Board of Commissioners to the Ministry of Law and Human Rights, as well as to request the Financial Services Authority to conduct Fit & Proper Test to the candidate members of Board of Directors and Board of Commissioners in accordance with the applicable provisions. Voting Results (Total Votes and Percentage) 396 Agree 12,019,850,702 votes or 73.61% part of the entire shares with voting rights attending the Meeting Disagree 4,297,927,040 votes or 26.32% part of the entire shares with voting rights attending the Meeting Abstain 12,106,900 votes or 0.07% part of the entire shares with voting rights attending the Meeting Realization/ Follow Up The appointed members of the Bank’s Board of Commissioners and Board of Directors have obtained approval from the Financial Services Authority. The appointment and composition of members of the Bank’s Board of Commissioners and Board of Directors have been stated in a separate Notarial Deed and have been notified to the Ministry of Law and Human Rights. Status Completed Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  397. Good Corporate Governance GMS IMPLEMENTATION IN 2017 In accordance with the Financial Services Authority Circular No . 30/SEOJK.04/2016 on the Forms and Contents of Annual Report of Issuers or Public Companies, this Annual Report also provides information about the previous 1 (one) year GMS resolutions. In 2017, the Bank held 2 (two) GMS, which are the Bank’s 2017 Annual GMS, held on March 16, 2017, and the Bank’s 2017 Extraordinary GMS, held on November 2, 2017. The implementation stages of the Bank’s Annual General Meeting of Shareholders in 2017, which was held on March 16, 2017, are illustrated in the following table. Tabel Pelaksanaan RUPS Tahunan Perseroan Tahun 2017 Stages Notification to FSA GMS Announcement GMS Notice GMS Implementation Summary of GMS Minutes GMS Minutes Provisions The Bank notifies the Financial Services Authority no later than 5 (five) days prior to the GMS announcement The Bank must make a GMS Announcement to shareholders no later than 14 (fourteen) days prior to the GMS notice. Publication of GMS Announcement is conducted through 1 (one) Indonesian language daily newspaper, Stock Exchange website, and Public Company website in Indonesian and foreign languages The Bank must make a Notice to shareholders no later than 21 (twenty one) days before the GMS. Publication of GMS Notice is conducted through 1 (one) Indonesian language daily newspaper, Stock Exchange website, and Public Company website in Indonesian and foreign languages Other GMS can be held at any time based on the needs for the interest of the public company The Bank must make a summary of the GMS minutes. Publication of Summary of GMS Minutes is conducted no later than 2 (two) business days after GMS is held through 1 (one) Indonesian language daily newspaper, Stock Exchange website, and Public Company website in Indonesian and foreign languages The Bank must make GMS Minutes and must submit it to the Financial Services Authority no later than 30 (thirty) days after the GMS is held. Implementation Notification of the plan to convene Annual GMS is delivered on January 30, 2017, to FSA. Announcement of the Annual GMS was conducted on February 7, 2017. The Publication was made through The Investor Daily and The Jakarta Post, and can be accessed through Indonesia Stock Exchange website and the Bank’s website in Indonesian and English languages. The Annual GMS Notice was conducted on February 22, 2017. Publication was made through The Investor Daily and The Jakarta Post, and can be accessed through Indonesia Stock Exchange website and the Bank’s website in Indonesian and English languages. Annual GMS was held on March 16, 2017, at 14.00 WIB (Western Indonesian Time) - ended, in BNI’s Multipurpose Room, 25th floor. Jalan Jenderal Sudirman Kav. 1 Jakarta, 10220. Summary of the Annual GMS Minutes was published on March 20, 2017, through The Investor Daily and The Jakarta Post, and can be accessed through Indonesia Stock Exchange website and the Bank’s website in Indonesian and English languages. The Bank submitted the GMS Minutes to the Financial Services Authority on March 23, 2017, in the form of Deed of GMS Minutes prepared by a notary, which was Deed of Annual GMS Minutes No. 42 dated March 16, 2017, made before Notary Fathiah Helmi, S.H. The Bank’s Annual GMS Minutes can be accessed through the Bank’s website in Indonesian and English languages. Compliance Complied Complied Complied Complied Complied Complied PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 397
  398. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk THE BANK’S GMS AGENDA 2017 The agenda of the Annual GMS for 2016 Fiscal Year, which was held on March 16, 2017, is as follows: Agenda - Item 1 Approval for the Annual Report and Ratification for the Bank's Consolidat-ed Financial Statements, Approval for the Board of Commissioners' Super-visory Duty Report, and Ratification for the Annual Report for the Implementation of the Partnership and Community Development Program for 2016 Fiscal Year, including the granting of the release of full responsibility (acquit et de charge) to the Board of Directors and Board of Commissioners of the Bank for the management and supervision actions that were carried out during the 2016 Fiscal Year. Agenda - Item 2 Approval for the use of the Bank's Net Profit for the 2016 Fiscal Year Agenda - Item 3 Determination for the remuneration (salary/honorarium, facilities and al-lowances) for 2017 Fiscal Year and tantiem for 2016 Fiscal Year for the Board of Directors and Board of Commissioners of the Bank Agenda - Item 4 Determination of the Public Accountant Firm to audit the Bank's Financial Statements and the Annual Report for the Implementation of Partnership and Community Development Program for 2017 Fiscal Year Agenda - Item 5 Inauguration of the enactment of SOE Minister Regulation No. PER-03/MBU/12/2016 on Amendments to SOE Minister Regulation No. PER-09/MBU/07/2015 on Partnership Program and Community Development Program of State-Owned Enterprises. Agenda - Item 6 Approval for the Amendments to the Bank's Articles of Association Agenda - Item 7 Change in the composition of the Bank's Management ATTENDANCE OF COMPANY’S MANAGEMENT IN GMS The Board of Commissioners and Board of Directors attending the Annual GMS of 2016 Fiscal year, which was held on March 16, 2017, are as follows: Table of Attendance Recapitulation of 2017 Annual GMS No. Name Position Attendance Present Absent Description BOARD OF COMMISSIONERS 1. Hartadi A. Sarwono President Commissioner/Independent Commissioner √ 2. Pradjoto Vice President Commissioner/Independent Commissioner √ 3. Anny Ratnawati Independent Commissioner 4. Pataniari Siahaan Independent Commissioner √ 5. Revrisond Baswir Independent Commissioner √ 6. Bistok Simbolon Commissioner √ 7. Joni Swastanto Commissioner √ 8. Wahyu Kuncoro Commissioner √ Total Attendance 100% BOARD OF DIRECTORS 1. Achmad Baiquni Vice President Director 2. Suprajarto Director of Corporate Business 3. Herry Sidharta Director of Medium Business √ 4. Putrama Wahju Setyawan Director of Consumer Banking √ 5. Anggoro Eko Cahyo Director of Finance and Credit Risk √ 6. Rico Rizal Budidarmo Director of Planning and Operations √ 7. Bob Tyasika Ananta Director of Treasury and International √ 8. Panji Irawan Director of Institutional Relations and Banking Transactional √ √ 9. Adi Sulistyowati Director of Compliance and Corporate Risk √ 10. Imam Budi Sarjito Direktur Kepatuhan dan Risiko Perusahaan √ Total Attendance 398 √ Adapting Quickly to Face Change Has been appointed as the President Director of PT Bank Rakyat Indonesia (Persero) Tbk 90% PT Bank Negara Indonesia (Persero) Tbk
  399. Good Corporate Governance ATTENDANCE OF INDEPENDENT PARTIES IN 2017 ANNUAL GMS The independent parties attending the 2017 Annual GMS are as follows : 1. Notary In the Bank’s Annual GMS on March 16, 2017, the Notary who assisted in organizing the Meeting was Notary Fathiah Helmi, SH. 2. Share Registrar Bureau In the Bank’s Annual GMS on March 16, 2017, the Share Registrar Bureau that assisted in organizing the Meeting was PT Datindo Entrycom. 3. Public Accountant Firm In the Bank’s Annual GMS on March 16, 2017, the Public Accountant Firm that attended was the Public Accountant Firm Purwantono, Sungkoro & Surja – a member Firm of Ernst & Young global network. ATTENDANCE AND RESOLUTION QUORUM IN 2017 ANNUAL GMS Establishing GMS attendance and resolution quorum refers to Article 25 of the Bank’s Articles of Association. The Bank’s Annual GMS on March 16, 2017, was attended by 15,672,907,888 shares including Dwiwarna A Series Shares, which had valid voting rights equaling to 84.04% of the total shares with valid voting rights issued by the Bank. Referring to the Bank’s Annual GMS implementation on March 16, 2017, the Attendance and Resolution Quorum based on the Agenda are as follows: Table of 2017 Annual GMS Resolutions Agenda Basis of Proposal Approval for the Annual Report and Ratification for the Bank's Consolidated Financial Statements, Approval for the Board of Commissioners' Supervisory Duty Report, and Ratification for the Annual Report for the Implementation of the Partnership and Community Development Program for 2016 Fiscal Year, including the granting of the release of full responsibility (acquit et de charge) to the Board of Directors and Board of Commissioners of the Bank for the management and supervision actions that were carried out during the 2016 Fiscal Year. • Approval for the use of the Bank's Net Profit for the 2016 Fiscal Year • • • • • Provisions of Attendance Quorum Attendance Quorum of Annual GMS March 16, 2017 Resolution Quorum Provisions Resolution Quorum of Annual GMS March 16, 2017 Article 69 of Law of Limited Liability Company Article 22 paragraph (2) of SOE Minister Regulation No. Per-07/MBU/05/2015, which was amended by SOE Minister Regulation No. Per-02/MBU/7/2017 on the Second Amendment to the State-Owned Enterprise Minister Regulation No. Per-09/MBU/07/2015 on Partnership Program and Community Development Program of State-Owned Enterprise Financial Services Authority Regulation No. 30/ POJK.04/2015 on Report of Actual Use of Proceeds from the Public Offering Article 21 paragraph (2) of the Bank’s Articles of Association Attended by shareholders representing more than 1/2 (one half ) portion of the total shares with valid voting rights Complied Resolutions are valid if approved by more than 1/2 (one half ) portion of the total shares with valid voting rights attending the GMS Approved by 15,409,422,609 votes or 98.32% part of the total shares with voting rights attending the Meeting, therefore, the resolution quorum was fulfilled Article 70 and Article 71 of Law on Limited Liability Company Article 21 paragraph (2) and Article 26 paragraph (2) of the Bank’s Articles of Association Attended by shareholders representing more than 1/2 (one half ) portion of the total shares with valid voting rights Complied Resolutions are valid if approved by more than 1/2 (one half ) portion of the total shares with valid voting rights attending the GMS Approved by 15,431,337,721 votes or 98.46% part of the total shares with voting rights attending the Meeting, therefore, the resolution quorum was fulfilled PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 399
  400. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Agenda Determination of remuneration (salary/ honorarium, facilities and allowances) for 2017 Fiscal Year and tantiem for 2016 Fiscal Year for the Board of Directors and Board of Commissioners of the Bank Basis of Proposal • • • 400 Articles 96 and 113 of Law on Limited Liability Company SOE Minister Regulation No. Per-04/MBU/2014, which was amended by SOE Minister Regulation No. Per-01/MBU/06/2017 on Guidelines to Establish Remuneration of Board of Directors, Board of Commissioners, and Board of Supervisors of SOE Article 11 paragraph (19), Article 14 paragraph (30), and Article 26 paragraph (2) of the Bank’s Articles of Association Provisions of Attendance Quorum Attendance Quorum of Annual GMS March 16, 2017 Resolution Quorum Provisions Resolution Quorum of Annual GMS March 16, 2017 Attended by shareholders representing more than 1/2 (one half ) portion of the total shares with valid voting rights Complied Resolutions are valid if approved by more than 1/2 (one half ) portion of the total shares with valid voting rights attending the GMS Approved by 15,711,499,429 votes or 96.21% part of the total shares with voting rights attending the Meeting, therefore, the resolution quorum was fulfilled Determination of the Public Accountant Firm to audit the Bank's Financial Statements and the Annual Report for the Implementation of Partnership and Community Development Program for 2017 Fiscal Year Article 21 paragraph (2) of the Bank’s Articles of Association Attended by shareholders representing more than 1/2 (one half ) portion of the total shares with valid voting rights Complied Resolutions are valid if approved by more than 1/2 (one half ) portion of the total shares with valid voting rights attending the GMS Approved by 15,640,575,837 votes or 95.78% part of the entire shares with voting rights attending the Meeting, therefore, the resolution quorum was fulfilled on January 20, 2017 Inauguration of the enactment of SOE Minister Regulation No. PER-03/MBU/12/2016 on Amendments to SOE Minister Regulation No. PER-09/MBU/07/2015 on Partnership Program and Community Development Program of State-Owned Enterprises. SOE Minister Regulation No. PER-09/MBU/07/2015 on Amendment to SOE Minister Regulation No. PER-09/ MBU/07/2015 on Partnership Program and Community Development Program of SOE dated December 16, 2016 Attended by shareholders representing more than 1/2 (one half ) portion of the total shares with valid voting rights Complied Resolutions are valid if approved by more than 1/2 (one half ) portion of the total shares with valid voting rights attending the GMS Approved by 15,454,940,114 votes or 98.61% part of the total shares with voting rights attending the Meeting, therefore, the resolution quorum was fulfilled Approval for the Amendments to the Bank's Articles of Association Article 28 of the Bank's Articles of Association and SOE Ministry Letter No. SR-117/MBU/02/2017 dated February 13, 2017, on the Proposal to Add the Annual GMS Agenda of PT Bank BNI (Persero), Tbk for 2016 fiscal year Attended by shareholders representing more than 1/2 (one half ) portion of the total shares with valid voting rights Complied Resolutions are valid if approved by more than 1/2 (one half ) portion of the total shares with valid voting rights attending the GMS Approved by 11,695,587,769 votes or 74.62% part of the total shares with voting rights attending the Meeting, therefore, the resolution quorum was fulfilled Change in the composition of the Bank's Management Article 11 paragraph (7) and Article 14 paragraph (8) of the Bank's Articles of Association and SOE Ministry Letter No. SR-117/MBU/02/2017 dated February 13, 2017, on the Proposal to Add the Annual GMS Agenda of PT Bank BNI (Persero), Tbk for 2016 fiscal year Attended by shareholders representing more than 1/2 (one half ) portion of the total shares with valid voting rights Complied Resolutions are valid if approved by more than 1/2 (one half ) portion of the total shares with valid voting rights attending the GMS Approved by 11,589,196,448 votes or 73.94% part of the total shares with voting rights attending the Meeting, therefore, the resolution quorum was fulfilled Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  401. Good Corporate Governance GMS RESOLUTIONS AND FOLLOW UP IN 2017 GMS RESOLUTIONS The resolutions of the Annual GMS of 2016 Fiscal Year , which was held on March 16, 2017, are as follows: Agenda – Item 1 Resolution Voting Results (Total Votes and Percentage) 1. Approved the Bank’s Annual Report including the Supervisory Duty Report that has been carried out by the Board of Commissioners for the fiscal year ending on December 31, 2016, and ratified the Bank’s Consolidated Financial Statements for the fiscal year ending on December 31, 2016, which was audited by the Public Accountant Firm Purwantono, Sungkoro & Surja - a member firm of Ernst & Young global network according to Report No. RPC-2855/ PSS/2017 dated January 20, 2017, with reasonable opinion in all material matters. 2. Ratified the Financial Statements for the Implementation of Partnership and Community Development Program for the fiscal year ending on December 31, 2016, which was audited by the Public Accountant Firm Purwantono, Sungkoro & Surja - a member firm of the Ernst & Young global network according to Report No. RPC-2958/PSS/2017 dated February 3, 2017, with reasonable opinion in all material matters.Granted full release of responsibility (volledig acquit et de charge) to all members of the Board of Directors and members of the Board of Commissioners for the management and supervision actions that were carried out during the fiscal year ending on December 31, 2016, as long as these actions are not criminal offense and these actions are reflected in the Annual Report, the Bank’s Consolidated Financial Statements, and the Financial Statements for the Implementation of Partnership and Community Development Program for the fiscal year ending on December 31, 2016. 3. Granted full release of responsibility (volledig acquit et de charge) to all members of the Board of Directors and members of the Board of Commissioners for the management and supervision actions that were carried out during the fiscal year ending on December 31, 2016, as long as these actions are not criminal offense and these actions are reflected in the Annual Report, the Bank’s Consolidated Financial Statements, and the Financial Statements for the Implementation of Partnership and Community Development Program for the fiscal year ending on December 31, 2016. 4. In order to comply with the provisions of the SOE Minister Regulation No. PER-12/MBU/2012 dated August 24, 2012, on the Supporting Organs of SOE’s Board of Commissioners/Board of Supervisors, the Bank submits a report on changes in the composition of the Audit Committee, Risk Monitoring Committee, Remuneration and Nomination Committee, and Integrated Governance Committee. Agree 15,409,422,609 votes or 98.32% part of the total shares with voting rights attending the Meeting. Disagree 15,145,612 votes or 0.10% part of the entire shares with voting rights attending the Meeting. Abstain 248,339,667 votes or 1.58% part of the total shares with voting rights attending the Meeting. Realization/ Follow Up The Financial Statements and Annual Reports have been submitted to the Financial Services Authority and the Indonesia Stock Exchange on Friday, 27 January, 2017, and Wednesday, 22 February, 2017. Status Completed PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 401
  402. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Agenda – Item 2 Resolution Voting Results (Total Votes and Percentage) Approved and determined the use of the Bank’s Net Profit for the fiscal year ending on December 31, 2016, amounting to Rp11,338,748,081,836 (eleven trillion three hundred thirty eight billion seven hundred forty eight million eighty one thousand eight hundred thirty six rupiah), hereinafter referred to as “Net Income for 2016 Fiscal Year” as follows: 1. Dividend of 25% or Rp2,834,687,020,459.00 and added by special dividend of 10% or Rp1,133,874,808,183.60, therefore, the total dividend of 35% or Rp3,968,561,828,642.60 was determined as cash dividend distributed to the shareholders that shall be paid under the following provisions: a. Dividend specifically for Government for 60% share ownership shall be deposited to the account of the State Treasury in the form of Rupiah in Bank Indonesia. b. Granted authority and power to the Bank’s Board of Directors with substitution rights to determine the schedule and procedures for distributing dividends of 2016 fiscal year in accordance with the applicable provisions. 2. 65% or Rp7,370,186,253,193.40 shall be used as Retained Earnings. Agree 15,431,337,721 votes or 98.46% part of the total shares with voting rights attending the Meeting. Disagree 10,821,800 votes or 0.07% part of the total shares with voting rights attending the Meeting. Abstain 230,748,367 votes or 1.47% part of the total shares with voting rights attending the Meeting. Realization/ Follow Up BNI announced the Schedule and Procedure for Distributing Cash Divi-dends for the 2016 Fiscal Year on March 20, 2017, and disbursed the cash dividends to shareholders on April 20, 2017 Status Completed Agenda – Item 3 Resolution Voting Results (Total Votes and Percentage) Granted authority and power to Dwiwarna A Series Shareholders to determine the tantiem amount for 2016 Fiscal Year and to determine salary/honorarium, allowances, facilities, and other incentives for members of the Board of Commissioners for Year 2017, and granted authority and power to the Board of Commissioners by first obtaining written approval from Dwiwarna A Series Shareholders to determine the tantiem amount for 2016 Fiscal Year, and to determine salary/honorarium, allowances, facilities, and other incentives for members of the Board of Directors and Board of Commissioners for Year 2017. Agree 15.091.429.511 suara atau 96,29% bagian dari seluruh saham dengan hak suara yang hadir dalam Rapat. 15,091,429,511 votes or 96.29% part of the entire shares with voting rights attending the Meeting Disagree 354,190,503 votes or 2.26% part of the entire shares with voting rights attending the Meeting Abstain 227,287,874 votes or 1.45% part of the entire shares with voting rights attending the Meeting Realization/ Follow Up GMS granted authority and power to Dwiwarna A Series Shareholders to determine the tantiem amount for 2016 Fiscal Year and to determine salary/honorarium, allowances, facilities, and other incentives for mem-bers of the Board of Commissioners for Year 2017, and Dwiwarna A Series Shareholders granted authority and power by first obtaining written ap-proval from Dwiwarna A Series Shareholders to determine the tantiem amount for 2016 Fiscal Year, and to determine salary/honorarium, allow-ances, facilities, and other incentives for members of the Board of Direc-tors and Board of Commissioners for Year 2017. Status Completed Agenda – Item 4 Resolution Voting Results (Total Votes and Percentage) 402 Approved: 1. The appointment of Public Accountant Firm Purwantono, Sungkoro & Surja as the Public Accountant Firm to audit the Bank’s Financial Statements and the Financial Statements for the Implementation of Partnership and Community Development Program for 2017 Fiscal Year. 2. The granting of power to the Bank’s Board of Commissioners to determine the honorarium and other requirements for the Public Accountant Firm, as well as the appointment of a Substitute Public Accountant Firm in the event that the Public Accountant Firm Purwantono, Sungkoro & Surja, for any reason cannot complete the audit of the Bank’s Financial Statements and the Financial Statements for the Implementation of Partnership and Community Development Program for 2017 Fiscal Year, including the determination of honorarium and other requirements for the substitute Public Accountant Firm. Agree 14,871,840,932 votes or 94.89% part of the entire shares with voting rights attending the Meeting Disagree 556,447,828 votes or 3.55% part of the entire shares with voting rights attending the Meeting Abstain 244,619,128 votes or 1.56% part of the entire shares with voting rights attending the Meeting Realization/ Follow Up The Public Accountant Firm Purwantono, Sungkoro & Surja (member of Ernst and Young) completed the Bank's audit on January 20, 2017. Status Completed Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  403. Good Corporate Governance Agenda – Item 5 Resolution Approved the enforcement of SOE State Minister Regulation No. PER-03/MBU/12/2016 on Amendments to SOE Minister Regulation No. PER-09/MBU/07/2015 on Partnership Program and Community Development Program of State-Owned Enterprises. Voting Results (Total Votes and Percentage) Agree 15,454,940,114 votes or 98.61% part of the entire shares with voting rights attending the Meeting Disagree 0 votes or 0.00% part of the entire shares with voting rights attending the Meeting Abstain 217,967,774 votes or 1.39% part of the entire shares with voting rights attending the Meeting Realization/ Follow Up The Bank has made effective the SOE Minister Regulation No. PER-03/MBU/12/2016 on Amendments to SOE Minister Regulation No. PER-09/MBU/07/2015 on Partnership Program and Community Development Program of State-Owned Enterprise in 2017. Status Completed Agenda – Item 6 Resolution Voting Results (Total Votes and Percentage) 1. Approved the amendments to the Bank’s Articles of Association, in the framework of SOE Ministry program to standardize the Articles of Association of Public SOE. 2. Approved the rearrangement of all provisions in the Articles of Association in connection with such amendments as referred to in point 1 resolution above. 3. Granted power and authority to the Bank’s Board of Directors with substitution rights to take all necessary actions relating to the resolutions of this Meeting agenda, including drafting and restating all of the Bank’s Articles of Association in a Notarial Deed and submitting them to competent authorities to obtain approval and/or signs of receipt of notification of amendments to the Bank’s Articles of Association, to carry out everything that is deemed necessary and useful for such purpose without excluding anything, including to make additions and/or amendments to the Bank’s Articles of Association if such matter is required by the competent authorities. Agree 11,695,587,769 votes or 74.62% part of the entire shares with voting rights attending the Meeting Disagree 3,562,043,345 votes or 22.73% part of the entire shares with voting rights attending the Meeting Abstain 415,276,774 votes or 2.65% part of the entire shares with voting rights attending the Meeting Realization/ Follow Up The Deed of Amendment to the Articles of Association No. 45 dated April 25, 2017, has obtained approval from the Minister of Law and Human Rights of the Republic of Indonesia. No. AHU-0010821.AH.01.02.TAHUN 2017 dated May 17, 2017. Status Completed PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 403
  404. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Mata Acara Ketujuh Resolution Voting Results (Total Votes and Percentage) 404 1. Board of Commissioners: a. Enforced the dismissal of Mr. Kiagus Ahmad Badaruddin as the Commissioner of PT Bank Negara Indonesia (Persero) Tbk starting from his appointment as Head of Financial Transaction Report and Analysis Center based on Presidential Decree No. 61/M TAHUN 2016 dated October 25, 2016, by conveying gratitude for the contribution of energy and thought given during the term of office as members of the Board of Commissioners. b. Dismissed Mr. Pradjoto as Vice President Commissioner/Independent Commissioner and Ms. Anny Ratnawati as the Independent Commissioner of PT Bank Negara Indonesia (Persero)Tbk starting from the closing of this Meeting by conveying gratitude for the contribution of energy and thought given during the term of office as member of Board of Commissioners. c. Transferred the assignment of Mr. Wahyu Kuncoro from initially Commissioner to Vice President Commissioner with the term of office continuing the term of office as Commissioner. d. Appointed Mr. Marwanto Harjowiryono as Commissioner and Mr. Ahmad Fikri Assegaf as Independent Commissioner. 2. Board of Directors: a. Dismissed Mr. Suprajarto as Vice President Director of PT Bank Negara Indonesia (Persero) Tbk starting from the appointment as the President Director of PT Bank Rakyat Indonesia (Persero) Tbk on March 15, 2017, by conveying gratitude for the contribution of energy and thought given during the term of office as Vice President Director. b. Transferred the assignment of Mr. Herry Sidharta from initially Director to Vice President Director, with the term of office continuing the term of office as Director, appointed at Annual GMS March 17, 2015. c. Appointed Mr. Catur Budi Harto as Director. 3. The term of office of the newly appointed members of Board of Commissioners and Board of Directors shall be until the closing of the 5th Annual GMS since the appointment, which will be the GMS held in 2022, with due observance of the laws and regulations in capital market sector and without prejudice to the GMS right to dismiss them at any time. 4. With these appointments, the composition of the Bank’s Board of Commissioners and Board of Directors shall be as follows: Board of Commissioners • Mr. Hartadi A. Sarwono as President Commissioner/Independent Commissioner • Mr. Wahyu Kuncoro as Vice President Commissioner • Mr. Pataniari Siahaan as Independent Commissioner • Mr. Revrisond Baswir as Independent Commissioner • Mr. Ahmad Fikri Assegaf as Independent Commissioner • Mr. Bistok Simbolon as Commissioner • Mr. Joni Swastanto as Commissioner • Mr. Marwanto Harjowiryono as Commissioner Board of Directors • Mr. Achmad Baiquni as President Director • Mr. Herry Sidharta as Vice President Director • Mr. Rico Rizal Budidarmo as Director • Mr. Anggoro Eko Cahyo as Director • Ms. Adi Sulistyowati as Director • Mr. Bob Tyasika Ananta as Director • Mr. Imam Budi Sarjito as Director • Mr. Panji Irawan as Director • Mr. Putrama Wahju Setiawan as Director • Mr. Catur Budi Harto as Director 5. Granted power and authority to the Bank’s Board of Directors with substitution right to take all necessary actions in relation to the resolutions of this Meeting agenda in accordance with the applicable laws and regulations, including to declare in a separate Notarial Deed and notify the composition of the Bank’s Board of Directors and Board of Commissioners to the Ministry of Law and Human Rights, as well as to request the Financial Services Authority to conduct Fit & Proper Test to the candidate members of Board of Directors and Board of Commissioners in accordance with the applicable provisions. Agree 11,589,196,448 votes or 73.94% part of the entire shares with voting rights attending the Meeting Disagree 3,539,081,050 votes or 22.58% part of the entire shares with voting rights attending the Meeting Abstain 544,630,390 votes or 3.47% part of the entire shares with voting rights attending the Meeting Realization/ Follow Up The appointed members of Board of Commissioners and Board of Direc-tors have obtained approval by the Financial Services Authority and the Bank has stated in a separate Notarial Deed and has notified the changes in the composition of the Bank's Board of Commissioners and Board of Directors to the Ministry of Law and Human Rights. Status Completed Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  405. Good Corporate Governance THE BANK ’S EXTRAORDINARY GMS IN 2017 The stages of the implementation of the Company’s Extraordinary GMS in 2017 which was held on November 2, 2017, are illustrated in the following table: Table of Extraordinary GMS Implementation Notification to FSA GMS An-nouncement Provisions The Bank notifies the Financial Services Authority no later than 5 (five) days prior to the GMS an-nounce-ment The Bank must make a GMS Announce-ment to sharehold-ers no later than 14 (fourteen) days prior to the GMS notice. Pub-lication of GMS An-nounce-ment is conducted through 1 (one) Indo-nesian lan-guage daily newspaper, Stock Ex-change website, and Public Company website in Indonesian and foreign languages Implementation Notification of the plan to convene Annual GMS is delivered on Septem-ber 15, 2017, to FSA. Compliance Complied Stages GMS Implementation Summary of GMS Minutes The Bank must make a Notice to sharehold-ers no later than 21 (twenty one) days before the GMS. Pub-lication of GMS No-tice is conducted through 1 (one) Indonesian language daily newspa-per, Stock Exchange website, and Public Company website in Indonesian and foreign lan-guages Other GMS can be held at any time based on the needs for the interest of the public company The Bank must make a summary of the GMS minutes. Publication of Summary of GMS Minutes is con-ducted no later than 2 (two) business days after GMS is held through 1 (one) Indone-sian lan-guage daily newspa-per, Stock Exchange website, and Pub-lic Company website in Indo-nesian and for-eign languages The Bank must make GMS Minutes and must submit it to the Fi-nancial Services Authority no later than 30 (thirty) days after the GMS is held. Announce-ment of the Extraordinary GMS was con-ducted on September 26, 2017. The Publica-tion was made through The Investor Dai-ly and The Jakarta Post, and can be accessed through In-donesia Stock Ex-change web-site and the Bank’s website in Indo-nesian and English languages. Notice of Extraordinary GMS was held on Octo-ber 11, 2017. Pub-lication was made through The Inves-tor Daily and The Jakarta Post, and can be ac-cessed through Indonesia Stock Exchange website and the Bank’s website in Indonesian and English lan-guages. Extraordi-nary GMS was held on November 2, 2017, at 14.00 WIB - ended, in BNI’s Multi-purpose Room, 25th floor. Jalan Jenderal Su-dirman Kav. 1 Jakarta, 10220. Summary of the Annual GMS Minutes was pub-lished on Novem-ber 6, 2017, through The In-vestor Daily and The Ja-karta Post, and can be accessed through Indone-sia Stock Exchange website and the Bank’s website in Indonesian and Eng-lish lan-guages. The Bank submitted the Ex-traordi-nary GMS Minutes to the Finan-cial Services Au-thority on November 7, 2017, in the form of Deed of GMS Minutes prepared by a notary, which was Deed of Extraor-dinary GMS Minutes No. 2 dat-ed No-vember 2, 2017, made by Notary Fathiah Helmi, S.H. The Bank’s Annual GMS Minutes can be ac-cessed through the Bank’s website in Indonesian and Eng-lish languages. Complied Complied Complied Com-plied Complied GMS No-tice GMS Minutes The Bank’s 2017 Extraordinary GMS Agenda Material The Agenda Material of the Bank’s 2017 Extraordinary GMS held on November 2, 2017, can be accessed on the Bank’s website is as follows: http://bni.co.id/portals/1/bni/perusahaan/docs/mata-acara-rups-luar-biasa-bni-2-november-2017.pdf The Bank’s 2017 Extraordinary GMS Conduct The Conduct of the Bank’s 2017 Extraordinary GMS held on November 2, 2017, can be accessed on the Bank’s website is as follows: http://bni.co.id/portals/1/bni/perusahaan/docs/tata-tertib-rups-luar-biasa-bni-2-november-2017.pdf PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 405
  406. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk ATTENDANCE OF COMPANY’S MANAGEMENT IN EGMS The Board of Commissioners and Board of Directors who attended the Extraordinary GMS held on November 2, 2017, are as follows: Tabel Rekapitulasi Kehadiran Pada RUPSLB No. Name Position Attendance Present Absent Description BOARD OF COMMISSIONERS 1. Hartadi A. Sarwono President Commissioner/Independent Commissioner √ 2. Wahyu Kuncoro Vice President Commissioner √ 3. Pataniari Siahaan Independent Commissioner √ 4. Revrisond Baswir Independent Commissioner √ 5. Bistok Simbolon Commissioner √ 6. Joni Swastanto Commissioner √ 7. Ahmad Fikri Assegaf Independent Commissioner √ 8. Marwanto Harjowiryono Commissioner √ Total Attendance Has been appointed as the President Commissioner/ Independent Commissioner at PT Bank Mandiri (Persero) Tbk 87.5% BOARD OF DIRECTORS 1. Achmad Baiquni President Director √ 2. Herry Sidharta Vice President Director √ 3. Putrama Wahju Setyawan Director of Medium Business √ 4. Catur Budi Harto Director of Small Business and Network √ 5. Anggoro Eko Cahyo Director of Consumer Business √ 6. Rico Rizal Budidarmo Director of Finance and Credit Risk √ 7. Bob Tyasika Ananta Director of Planning and Operations √ 8. Panji Irawan Director of Treasury and International √ 9. Adi Sulistyowati Director of Institutional Relations and Banking Transactional √ 10. Imam Budi Sarjito Director of Compliance and Corporate Risk √ Total Attendance 100% ATTENDANCE OF INDEPENDENT PARTIES IN EXTRAORDINARY GMS IN 2017 The independent parties who attended the Extraordinary GMS held on November 2, 2017, are as follows: 1. Notary Notary who assisted in organizing the Meeting was Notary Fathiah Helmi, SH. 2. Share Registrar Bureau Share Registrar Bureau that assisted in organizing the Meeting was PT Datindo Entrycom. 406 Adapting Quickly to Face Change PT Bank Negara Indonesia (Persero) Tbk
  407. Good Corporate Governance QUORUM OF ATTENDANCE AND RESOLUTION OF THE BANK ’S EXTRAORDINARY GMS IN 2017 Establishing GMS attendance and resolution quorum refers to Article 25 of the Bank’s Articles of Association. The Bank’s Extraordinary GMS on November 2, 2017, was attended by 16,148,948,470 shares including Dwiwarna A Series Shares, which had valid voting rights equaling to 86.59% of the total shares with valid voting rights issued by the Bank. Referring to the Bank’s Extraordinary GMS implementation on November 2, 2017, the Attendance and Resolution Quorum based on the Agenda are as follows: Table of 2017 Extraordinary GMS Resolutions Agenda Change in the composition of the Bank's Management Basis of Proposal Articles 23 and 24 of Financial Services Authority Regulation No. 55/POJK.03/2016 on Governance Implementation for Commercial Bank as well as the Bank's Articles of Association, Article 11 on Board of Directors and Article 14 on Board of Commissioners Provisions of Attendance Quorum Attended by shareholders representing more than 1/2 (one half ) portion of the total shares with valid voting rights Attendance Quorum of Extraordinary GMS on November 2, 2017 Complied Resolution Quorum Provisions Resolutions are valid if approved by more than 1/2 (one half ) portion of the total shares with valid voting rights attending the GMS Resolution Quorum of Extraordinary GMS on November 2, 2017 Approved by 11,519,663,335 votes or 71.33% part of the total shares with voting rights attending the Meeting EGMS RESOLUTIONS AND FOLLOW UP ON EGMS RESOLUTIONS The resolutions of the Extraordinary GMS held on November 2, 2017, are as follows: Agenda: Change in the Company’s Management Resolution Appointed Mr. Ari Kuncoro, as the President Commissioner, concurrently as the Independent Commissioner, of the Company. The termination of the term of office of the appointed President Commissioner is until the closing of the 5thAnnual GMS since his appointment, which is the GMS to be held in 2021. Voting Results (Total Votes and Percentage) Agree 11,519,663,335 votes or 71.33% part of the entire shares with voting rights attending the Meeting Disagree 4,461,192,519 votes or 27.62% part of the entire shares with voting rights attending the Meeting Abstain 168,092,616 votes or 1.04% part of the entire shares with voting rights attending the Meeting Realization/Follow Up The Company’s appointed President Commissioner is still in the process of obtaining approval from the Financial Services Authority. The appointment and changes in the composition of the Bank’s Board of Commissioners have been stated in a separate Notarial Deed and have been notified to the Ministry of Law and Human Rights. Status Completed PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 407
  408. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk BOARD OF COMMISSIONERS Board of Commissioners is the bank’s organ with duties to supervise the management policy, management course on the bank, and the bank’s business, in general and/or specific, in accordance with the Articles of Association as well as to provide advice to the Board of Directors. The arrangement of BNI’s Board of Commissioners is guided by Law of the Republic of Indonesia No. 40 of 2007 on Limited Liability Company and other laws and regulations, specifically Financial Services Authority Regulation No. 33/POJK.04/2014 dated December 8, 2014 on Board of Directors and Board of Commissioners of Issuers or Public Companies. GUIDELINES AND WORK CONDUCT OF BOARD OF COMMISSIONERS Guidelines and Work Conduct of BNI’s Board of Commissioners are stipulated in Decision Letter of BNI’s Board of Commissioners No. KEP/49/DK/2017 dated 26 October 2017, which essentially covers regulations on the following matters: 1. Legal Basis; 2. Structure; 3. Requirements for Members of Board of Commissioners; 4. Independent Commissioner; 5. Duties, Authority, Obligations, and Responsibilities of the Board of Commissioners; 6. Appointment and Dismissal of Members of the Board of Commissioners; 7. Term of Office of the Board of Commissioners and Vacant Position; 8. Meetings of the Board of Commissioners and Joint Meetings of Board of Commissioners and Board of Directors; 9. Division of Work and Working Time of the Board of Commissioners; 10. Secretariat of the Board of Commissioners and Secretary of the Board of Commissioners; 11. Corporate Values; 12. Board of Commissioners’ Work Ethics and Prohibitions, Transparency. 13. Transparency. BOARD OF COMMISSIONERS’ DUTIES AND RESPONSIBILITIES The Board of Commissioners have duties to monitor the management policies, management course in general, either about the Bank or the Bank’s business carried out by the Board of Directors, and to provide advice to the Board of Directors, including supervising the implementation of the Bank’s Long-Term Plan, the Bank’s Work Plan and Budget, and the provisions of the Articles of Association and GMS resolutions, as well as the applicable laws and regulations for the Bank’s interest in accordance with the Bank’s purposes and objectives. 408 Adapting Quickly to Face Change In carrying out the duties, each member of the Board of Commissioners must: 1. Comply with the Articles of Association and Laws and Regulations, as well as the principles of professionalism, efficiency, transparency, independency, accountability, responsibility, as well as fairness and equality. 2. Have good faith, be full of caution, and be responsible for carrying out supervisory and advisory duties to the Board of Directors for the Bank’s interest and in accordance with the Bank’s purposes and objectives. In order to maintain objectivity and independency in performing the functions and duties of supervision, the Board of Commissioners is not involved in the decision-making of the Bank’s operational activities, except for: 1. Provision of funds to related parties as stipulated in the provisions on legal lending limit of commercial banks; and 2. Other matters set forth in the Bank’s Articles of Association or Laws and Regulations. The decision making of the Bank’s operational activities by the Board of Commissioners stated above is part of the Board of Commissioners’ supervisory duties, which does not eliminate the Board of Directors’ responsibilities for the Bank’s management activities. BOARD OF COMMISSIONERS’ AUTHORITY In performing its duties as stated in point a, the Board of Commissioners has authority to: 1. Examine books, letters, and other documents, examine cash for verification purposes and other securities, and examine the Bank’s assets; 2. Enter yards, buildings, and offices used by the Bank; 3. Request explanation from the Board of Directors and/ or other officials on any issues related to the Bank’s management; 4. Understand all policies and actions that have been and will be carried out by the Board of Directors; 5. Request the Board of Directors and/or other officials under the Board of Directors under the consent of the Board of Directors to attend the Board of Commissioners’ Meeting; 6. Appoint and dismiss a Secretary of the Board of Commissioners; 7. Temporarily dismiss member of Board of Directors in accordance with the provisions of the Articles of Association; 8. Establish an Audit Committee, Remuneration and Nomination Committee, Risk Monitoring Committee, and other committees if deemed necessary with due observance of the Bank’s capability; PT Bank Negara Indonesia (Persero) Tbk
  409. Good Corporate Governance 9 . Use experts for certain matters and for a certain time period at the Bank’s expense, if deemed necessary; 10. Perform Bank’s management in certain circumstances for a certain time period in accordance with the provisions of the Articles of Association; 11. Approve the appointment and dismissal of the Corporate Secretary and/or Head of the Internal Audit Unit; 12. Attend Meetings of the Board of Commissioners and provide insights on matters discussed; 13. Carry out other supervisory authority as long as it is not in contrary to the laws and regulations, Articles of Association, and/or GMS resolutions. BOARD OF COMMISSIONERS’ OBLIGATIONS Board of Commissioners has the obligations to: 1. Provide advice to the Board of Directors in conducting the management of the Bank; 2. Provide opinion and approval for the Bank’s Annual Work Plan and Budget, as well as other work plans that are prepared by the Board of Directors, in accordance with the provisions of the Articles of Association; 3. Follow the Bank’s development, provide opinions and suggestions to the GMS on any matters deemed necessary for the management of the Bank; 4. Report to the Dwiwarna A Series Shareholders in the event of any declining tendency in the Bank’s performance; 5. Propose to the GMS the appointment of a Public Accountant Firm to audit the Bank’s books; 6. Examine and review the periodic report and Annual Report prepared by the Board of Directors, including signing the Annual Report; 7. Provide explanations, opinions, and suggestions to the GMS on the Annual Report, if requested; 8. Prepare Minutes of Board of Commissioners’ Meetings and keep a copy; 9. Report to the Bank on any personal and/or family share ownership in the Bank and any other Companies; 10. Provide report on the supervisory duties that was performed in the previous fiscal year to the GMS; 11. Provide explanation on all matters questioned or requested by Dwiwarna A Series Shareholders with due observance of the laws and regulations particularly those applicable in Capital Market sector; 12. Perform other obligations in the framework of supervisory and advisory duties as long as they do not violate the laws and regulations, Articles of Association, and/or GMS resolutions; 13. Grant approval in writing for legal acts performed by the Board of Directors as required in BNI’s Articles of Association with regard to the laws and regulations as well as provisions in Capital Market sector. The Board of Directors’ actions shall obtain approval from the Board of Commissioners to: PT Bank Negara Indonesia (Persero) Tbk  a. Release/transfer and/or pledge the Bank’s assets with criteria and values exceeding certain amounts stipulated by the Board of Commissioners, except assets that are recorded as inventories, with due observance of the provisions in capital market and banking sector; b. Cooperate with business entities or other parties, in the form of joint operations (KSO), business cooperations (KSU), license agreements, Build, Operate, and Transfer (BOT), Build, Transfer, and Operate (BTO), Build, Operate, and Own (BOO), and other agreements that have the same nature, same time period, or value exceeding those set by the Board of Commissioners; c. Establish and change the Bank’s logo; d. Establish an organizational structure 1 (one) level below the Board of Directors; e. Undertake capital participation with specified value as stipulated by the Board of Commissioners of other companies, subsidiaries, and joint ventures that are not in the framework of rescuing receivables with due observance of the provisions in Capital Market sector; f. Establish subsidiary and/or joint venture company with certain value as stipulated by the Board of Commissioners with due observance of the provisions in Capital Market sector; g. Propose the Bank’s representative as a candidate member of the Board of Directors and Board of Commissioners in a subsidiary that gives significant contribution to the Bank, and/or has strategic value as stipulated by the Board of Commissioners; h. Release capital participation with specified value as stipulated by the Board of Commissioners of other companies, subsidiaries, and joint ventures that are not in the framework of rescuing receivables with due observance of the provisions in Capital Market sector; i. Perform actions included in material transactions as stipulated by the laws and regulations in capital market sector with certain values as determined by the Board of Commissioners, except such actions are included in material transactions excluded by the laws and regulations applicable in Capital Market sector; j. Actions that are not regulated in the RKAP; k. Actions to transfer include selling, releasing the right to charge and/or not to charge again for: i. The principal of non-performing receivables which has been written off in the framework of credit settlement, either partially or entirely; ii. The difference between the principal value of non-performing receivables that has been written off with transfer value including sales or with the value of disposal of right; Adapting Quickly to Face Change 409
  410. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk shall be carried out based on the Board of Directors’ policies that have been approved by the Board of Commissioners and in the amount of debt-canceled limit set by the GMS which shall remain in force until any new limit has been determined by the GMS. Approval of the Board of Commissioners specifically with regard to letters a, b, e, f, g, h, and i is performed by the Board of Commissioners after obtaining approval from Dwiwarna A Series Shareholders. Determination of the limits and/or criteria by the Board of Commissioners for matters as referred to in letters a, b, e, f, g, h, and i shall be conducted by the Board of Commissioners after obtaining approval from Dwiwarna A Series Shareholders. BOARD OF COMMISSIONERS’ CRITERIA AND TERM OF OFFICE Requirements for members of the Board of Commissioners must comply with the provisions of the Law on Limited Liability Companies, Laws and Regulations in Capital Market sector; and other laws and regulations including regulations relating to the Bank’s business activities. Based on the Articles of Association, persons who can be appointed as members of the Board of Commissioners are those individuals that meet the requirements upon appointment and during their term of office: 1. Having good character, morals, and integrity; 2. Proficient in performing legal actions; 3. Within 5 (five) years before appointment and during the term of office: a. Never been declared bankrupt; b. never become a member of Board of Directors and/or a member of Board of Commissioners who is found guilty for causing a company to be declared bankrupt; c. never been sentenced for committing a criminal offense that is detrimental to state finances and/or related to the financial sector; and d. never been a member of Board of Directors and/or a member of Board of Commissioners who during the term of office: 410 Adapting Quickly to Face Change 4. 5. 6. 7. i. Has ever not convening an annual GMS; ii. the accountability as a member of Board of Directors and/or a member of Board of Commissioners has ever not accepted by the GMS or has ever not present the accountability as a member of Board of Directors and/or a member of Board of Commissioners to the GMS; and iii. has ever caused a company that obtains license, approval, or registration from the Financial Services Authority not to fulfill its obligation to submit its annual report and/or financial statements to the Financial Services Authority. Having the commitment to comply with the laws and regulations; Having the knowledge and/or expertise in the fields required by the Bank, and any other requirements based on the laws and regulations applicable to the bank; Satisfying other requirements as stipulated in the applicable laws and regulations. Among members of the Board of Commissioners and between members of the Board of Commissioners and members of the Board of Directors, there must be no family bloodline relationship up to third degree, either in a straight line or side line, including relationship arising from marital ties; The term of office of the Board of Commissioners is at most 2 (two) consecutive periods, under the following conditions: 1. The members of the Board of Commissioners are appointed for the term of office commencing from the date determined by the GMS that appoints them and ending at the closing of the 5th (fifth) Annual GMS after the appointment date, provided that it shall not exceed the time period of 5 (five) years with due observance of the laws and regulations in Capital Market sector, but without prejudice to the right of the GMS to dismiss the members of the Board of Commissioners at any time before their term of office ends. 2. After the term of office ends, the members of the Board of Commissioners may be reappointed by the GMS for 1 (one) term of office. PT Bank Negara Indonesia (Persero) Tbk
  411. Good Corporate Governance BOARD OF COMMISSIONERS ’ APPOINTMENT PROCESS The appointment process of candidate members of BNI’s Board of Commissioners is carried out by referring to laws and regulations stipulating the appointment procedures of members of Board of Commissioners for Bank and SOE sectors, particularly State-Owned Enterprise Minister Regulations No. PER-02/MBU/02/2015 dated February 17, 2015, on the Requirements, Procedures for Appointment and Dismissal of Members of Board of Commissioners and Supervisory Board of State-Owned Enterprise, Financial Services Authority Regulation No. 27/POJK.03/2016 dated July 22, 2016, on Fit and Proper Test for Main Party of Financial Services Institution and Circular Letter of Financial Services Authority No. 31/SEOJK.05/2016 dated August 30, 2016 on Fit and Proper Test for Main Party of Financial Services Institution, as well as with due observance to the provisions of appointment of members of Board of Commissioners stipulated in BNI’s Articles of Association. Members of the Board of Commissioners are appointed by the GMS which are attended and approved by Dwiwarna A Series Shareholders and the meeting resolutions shall be approved by Dwiwarna A Series Shareholders with due observance to the provisions of the Articles of Association. GMS resolutions on appointment of members of Board of Commissioners also determines the effectiveness of the appointment. In the event that GMS does not adopt a resolution, then the appointment as member of Board of Commissioners will be effective starting from the closing of the GMS. Submission of proposal of candidate member of Board of Commissioners to the GMS through Dwiwarna A Series Shareholders is carried out by observing the recommendations of the Nomination and Remuneration Committee. The Financial Services Authority Regulation No. 27/POJK.03/2016 dated July 22, 2016, on Fit and Proper Test for the Main Party of Financial Services Institution, among others, regulates that candidate members of Board of Commissioners, who are included as BNI’s Main Party, which is a Financial Services Institution, must obtain approval from the Financial Services Authority before carrying out actions, duties, and functions as member of the Board of Commissioners. In order to provide such approval, the FSA conducts a fit and proper test to candidate members of the Board of Commissioners. Members of the Board of Commissioners who have passed the fit and proper test without notes and have obtained approval from the Financial Services Authority shall indicate that such members of the Board of Commissioners have and fulfill the requirements of integrity, competency, and financial reputation in an adequate manner. All members of BNI’s Board of Commissioners have passed the fit and proper test and received FSA approval to serve as members of BNI’s Board of Commissioners which can be seen in the table below: Table of Fit and Proper Test Nama Jabatan Pelaksana Tanggal Efektif Hasil Ari Kuncoro* President Commissioner/Independent Commissioner Financial Services Authority March 14, 2018 Pass Wahyu Kuncoro Commissioner Vice President Commissioner/ Commissioner Financial Services Authority January 25, 2017 May 29, 2017 Pass Revrisond Baswir Commissioner Independent Commissioner Financial Services Authority June 24, 2015 January 25, 2017 Pass Pataniari Siahaan Commissioner Independent Commissioner Financial Services Authority June 25, 2015 January 25, 2017 Pass Bistok Simbolon Commissioner Financial Services Authority May 10, 2016 Pass Joni Swastanto Commissioner Financial Services Authority April 20, 2016 Pass Marwanto Harjowiryono Commissioner Financial Services Authority July 19, 2017 Pass Ahmad Fikri Assegaf Independent Commissioner Financial Services Authority July 19, 2017 Pass Sigit Widyawan** Independent Commissioner Financial Services Authority September 7, 2018 Pass * Appointment as President Commissioner/Independent Commissioner is based on BNI EGMS, November 2, 2017, and effective based on FSA approval since March 14, 2018. ** Appointment as Independent Commissioner is based on BNI AGMS, March 20, 2018, and effective based on FSA approval since September 7, 2018. PT Bank Negara Indonesia (Persero) Tbk  Adapting Quickly to Face Change 411
  412. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Members of the Board of Commissioners who have passed the fit and proper test were then appointed in the GMS, which was stated in the Minutes of GMS. Basis of appointment of each member of Board of Commissioners is as follows: Table of Basis of Appointment of Board of Commissioners Nama Jabatan Dasar Pengangkatan Ari Kuncoro President Commissioner /Independent Commissioner EGMS dated November 2, 2017. Wahyu Kuncoro • • Commissioner Vice President Commissioner/ Commissioner AGMS dated March 10, 2016 AGMS dated March 16, 2017 Revrisond Baswir • • Commissioner Commissioner Independent AGMS dated March 17, 2015 AGMS dated March 10, 2016 Pataniari Siahaan • • Commissioner Commissioner Independent AGMS dated March 17, 2015 AGMS dated March 10, 2016 Bistok Simbolon Commissioner EGMS dated January 12, 2016 Joni Swastanto Commissioner AGMS dated March 10, 2016 Marwanto Harjowiryono Independent Commissioner AGMS dated March 16, 2017 Ahmad Fikri Assegaf Independent Commissioner AGMS dated March 16, 2017 Sigit Widyawan Independent Commissioner AGMS dated March 20, 2018 ORIENTATION PROGRAM FOR NEW COMMISSIONERS The orientation program for members of the Board of Commissioners is carried out by delivering documents, presentations or explanations, which can be carried out by the Board of Directors, Corporate Secretary, related Divisions or units, which generally include information/matters pertaining to: 1. Vision, mission, organizational structure of the bank, business activities and operational network; 2. Annual Report, the Bank’s Work Plan and Budget (RKAP), and the Bank’s Business Plan (RBB), Bank’s Code of Ethics, BNI’s Work Cultures, Boards of Commissioners’ Guidelines for Work Conduct, Corporate Governance Handbook, and the Articles of Association. 3. Good Corporate Governance (concurrent positions, share ownership, and independent commissioners); 4. Board of Commissioners and Board of Directors’ duties, authority, and responsibilities, Board of Commissioners’ delegation of authority and limits of authority in conducting supervisory duties on the bank based on the applicable laws and regulations; 5. Committees under the Board of Commissioners, which are established and directly responsible to the Board of Commissioners, Secretary of the Board of Commissioners, and Secretariat of the Board of Commissioners, which facilitates the duties of the Board of Commissioners; 6. Remuneration and facilities provided to members of the Board of Commissioners. DIVISION OF SUPERVISORY DUTIES OF BOARD OF COMMISSIONERS The division of supervisory duties of the Board of Commissioners per December 2018 is as follows. Table of Division of Supervisory Duties of Board of Commissioners Name 412 Position Period Field of Duty Ari Kuncoro* President Commissioner/ Independent Commissioner 5 April 2018 – 31 December 2018 Chairman of Nomination and Remuneration Committee Wahyu Kuncoro Vice President Commissioner/ Commissioner 1 January 2018 – 31 December 2018 Member of Nomination and Remuneration Committee Revrisond Baswir Independent Commissioner 1 January 2018 - 31 December 2018 1 January 2018 - 31 December 2018 1 January 2018 - 31 December 2018 • Adapting Quickly to Face Change • • Member of Nomination and Remuneration Committee Chairman of Risk Monitoring Committee Chairman of Integrated Governance Committee PT Bank Negara Indonesia (Persero) Tbk
  413. Good Corporate Governance Name Position Pataniari Siahaan Bistok Simbolon Joni Swastanto Period Field of Duty Independent Commissioner 1 January - 31 December 2018 1 January 2018 - 31 December 2018 • Commissioner 1 January – 31 December 2018 1 January 2018 - 31 December 2018 • 1 January 2018 - 31 December 2018 1 January 2018 - 31 December 2018 1 January 2018 - 31 December 2018 • Commissioner • • • • Member of Nomination and Remuneration Committee Chairman of Audit Committee Member of Nomination and Remuneration Committee Member of Risk Monitoring Committee Member of Nomination and Remuneration Committee Member of Risk Monitoring Committee Member of Integrated Governance Committee Marwanto Harjowirjono Commissioner 1 January 2018 - 31 December 2018 • Member of Nomination and Remuneration Committee Ahmad Fikri Assegaf Independent Commissioner 1 January 2018 - 5 April 2018 5 April 2018 - 31 December 2018 1 January 2018 - 31 December 2018 • Chairman of Nomination and Remuneration Committee Member of Nomination and Remuneration Committee Member of Audit Committee Sigit Widyawan** Independent Commissioner 13 September 2018 -31 December 2018 • • • Member of Nomination and Remuneration Committee Information: * Appointment as President Commissioner/Independent Commissioner is based on BNI EGMS, November 2, 2017, and effective based on FSA approval since March 14, 2018. ** Appointment as Independent Commissioner is based on BNI AGMS, March 20, 2018, and effective based on FSA approval since September 7, 2018. DIVERSITY POLICY OF COMPOSITION OF BOARD OF COMMISSIONERS Based on the Attachment of Circular Letter of Financial Services Authority No. 32/SEOJK.04/2015 dated November 27, 2015 on Governance Guidelines for Public Companies, it is stated that the composition of Board of Commissioners is a combination of characteristics either from the organ side of the Board of Commissioners or the members of Board of Commissioners as an individual, which is in line with the Public Companies needs. Such characteristics can be reflected in the determination of expertise, knowledge, and experience necessary in implementing the supervisory and advisory duties by the Board of Commissioners of Public Companies. A composition that has observed the Public Companies needs is a positive matter, particularly related to decision making in the framework of implementing supervisory function performed by considering various wider aspects. In the 2018 period, the diversity of the composition of the Board of Commissioners reflected in the education, work experience, expertise, age and gender, can be seen in the table below: Name Ari Kuncoro* Position Age Gender President Commissioner/ Independent Commissioner 56 years old Male Education • • • Bachelor of Economics Master of Economic Development Doctor of Economic Science Work Experience • • • • • • • PT Bank Negara Indonesia (Persero) Tbk  Program Secretary of Post-Graduate • Study of Economic Science of Universitas Indonesia. Vice Dean I in the Fields of Teaching, Education, and Community Services. Faculty of Economics, Universitas Indonesia Guest Professor in Research Field, Brown University. Member of Research Communication Forum for Financial System Stability of Bank Indonesia. Board of Director of East Asian Economist Association. Dean of the Tri Dharma College of the Faculty of Economics and Business, Universitas Indonesia. Expertise Economics Adapting Quickly to Face Change 413
  414. AN N NU U AALL REPOR R TT 2018 BankNegara NegaraIndonesia Indonesia (Persero) (Persero) Tbk PT Bank Tbk Name Wahyu Kuncoro Position Age Gender Vice President Commissioner/ Commissioner 49 years old Male Education • • • Bachelor of Agriculture Bachelor of Economics Master of Management Work Experience • • • • • • • • • • • • • • • • • Revrisond Baswir Independent Commissioner 60 years old Male • • • Bachelor of Accounting Master of Business Administration Doctor of Economic Science • • • • • • • • • • • • 414 Adapting Quickly to Face Change Expertise Head of Funding and Resources Section, • Directorate General of SOE Development, • Department of Finance. Head of Sub-Division of Planning of Agricultural Production Business, Ministry of SOE. Secretary of the Board of Commissioners of PT Perkebunan Nusantara VIII (Persero). Head of Plantation IIB Business Sector, Ministry of SOE. Commissioner of PT Perkebunan Nusantara IX (Persero). Head of Primary Industry IIIA Business Sector, Ministry of SOE. Head of Infrastructure and Logistics IA Business Sector, Ministry of SOE. Commissioner of PT Perkebunan Nusantara XIII (Persero). Assistant Deputy of Services III Business Sector, Ministry of SOE. Assistant Deputy of Banking and Insurance, Ministry of SOE. Deputy of Business Infrastructure Sector, Ministry of SOE. Commissioner of PT Angkasa Pura II (Persero). Chairman of Prabunara Employee Cooperative, Ministry of SOE. Member of Prabunara Employee Cooperative Supervisors, Ministry of SOE. Deputy of Agro and Pharmaceutical Business Sector, Ministry of SOE. Commissioner of PT Bank Negara Indonesia (Persero) Tbk. Vice President Commissioner of PT Bank Negara Indonesia (Persero) Tbk. Economics Management Lecturer of Economics and Business, Universitas Gajah Mada Researcher of P3PK, Universitas Gajah Mada Expert Staff of Ministry of Human Rights of the Republic of Indonesia Expert Staff of Pustep, Universitas Gajah Mada Expert Staff of DPD of the Republic of Indonesia Head of Center for Economic Democracy Studies, Universitas Gajah Mada Member of the Public Policy Committee, Ministry of SOE. Commissioner and Chairman of Audit Committee of PTPN XIII, Pontianak. Commissioner of PTPN VIII, Bandung. Commissioner and Chairman of Audit Committee of PTPN XI, Surabaya. Commissioner of PT Bank Negara Indonesia (Persero) Tbk. Independent Commissioner of PT Bank Nega