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BNI sees Q1 profit grow 63.2 percent on solid expansion
PT Bank Negara Indonesia (Persero) Tbk (stock code BBNI) demonstrated solid performance at the start of the year, in line with recent growth in the economy.
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BNI president director Royke Tumilaar (center) holds open a folio as (from left) IT and operations director Y.B Hariantono, finance director Novita Widya Anggraini, MSME business director Muhammad Iqbal and risk management director David Pirzada look on during the BNI Q1 2022 Public Expose on Tuesday. The state-owned lender recorded profit growth of Rp 3.96 trillion in the first quarter of 2022, or 63.2 percent year-on-year (yoy) growth. (Courtesy of BNI)
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T Bank Negara Indonesia (Persero) Tbk (stock code BBNI) demonstrated solid performance at the start of the year, in line with recent growth in the economy. Improving credit quality has helped accelerate the company’s capacity to publish its first-quarter records, with fee-based income (FBI) fueled by high transaction volume to yield progressive profits.
BNI president director Royke Tumilaar said the state-owned lender recorded higher profit reaching Rp 3.96 trillion in the first quarter of 2022, equivalent to 63.2 percent yoy growth. He credited the increase to strong yoy growth of 7.3 percent in the Operating Income Before Reserves (PPOP) to Rp 8.5 trillion, its highest ever.
The first-quarter PPOP even surpassed pre-pandemic growth levels, while the bank’s efforts to improve credit quality through effective monitoring, management and policies also resulted in a sharp yoy decline of 26.1 percent in credit reserve costs.
Total loan disbursements in the first quarter of 2022 grew 5.8 percent to Rp 591.68 trillion, also above the level recorded in the same period in 2020. The factors that contributed to BNI’s higher operating income and improved performance included asset quality, liquidity and efficiency.
“We are grateful that BNI was able to maintain solid performance at the beginning of this year. This is a sign of recovery as well as better economic growth this year," Royke said.
BNI plans to continue improving credit performance this year, within a growth range of between 7 and 10 percent. This will be supported by plans to ensure better credit disbursement across all segments amid positive macroeconomic trends, such as the open economy and stronger commodity prices.
“As the number of Omicron cases declines, this economic awakening will also continue to enhance the quality of BNI’s assets.” Royke added.
Intermediary performance
Corporate loans remain the main driver of acceleration in BNI’s credit business. Corporate credit has seen growth primarily in the private segment, which increased 9.9 percent yoy to Rp 193.2 trillion. The bank also recorded 24.5 percent yoy growth to Rp 46.1 tillion in corporate finance and 11.8 percent yoy growth to Rp 98 trillion in the micro, small and medium enterprise (MSME) segment.
Overall, corporate loans grew 4.8 percent yoy to Rp 489.3 trillion, with credit expansion in all segments reflecting recovery in the national economy.
This year’s targeted industries for corporate banking services and products include trade, infrastructure and manufacturing. Meanwhile, green financing continues to demonstrate demand for excellent solutions with large returns, and could present an opportunity for syndicated loans, one of BNI’s pillars in corporate loans.
In consumer banking, payroll loans and home mortgages strengthened at the beginning of this year, respectively growing 18.8 percent and 8.4 percent yoy. Overall consumer credit grew 11.4 percent yoy on the back of BNI’s renown as a well-established consumer banking brand committed to serving the public’s financing needs with competitive services and products.
BNI finance director Novita Widya Anggraini said the bank had fortified its capital and liquidity as economic recovery gradually gained pace in early 2022, with an eye to maintaining stable performance and supporting positive business growth.
Third-party funds grew 8.4 percent yoy, with dominant growth in its current account savings account (CASA) ratio, which increased to 69.2 percent in the first quarter of 2022, from 67.9 percent in the same period last year.
“The growth of these low-cost funds has driven improvements in the cost of funds from 1.74 percent at the end of the first quarter of 2021 to 1.46 percent in the first quarter of 2022,” said Novita.
“There’s still some room for expansion. We can see that the loan-to-deposit ratio stands at 85.02 percent. On the capital side, the capital adequacy ratio [CAR] is at 19.3 percent, up 120 basis points yoy."
Novita said the bank’s improving credit risk also supported its performance, with loans at risk (LARs) showing a 4.8 percent yoy improvement to 22.1 percent in the first quarter. Likewise, BNI's nonperforming loan (NPL) ratio improved to 3.5 percent, up 60 basis points from 4.1 percent in the same period last year.
"Loan restructuring due to the pandemic continues to show increasingly positive change in early 2022,” she added.
“Covid-19 loan restructuring stood at Rp 69.6 trillion, a decline from Rp 84.3 trillion in the same period last year.
“In fact, BNI’s debtors who were affected by the pandemic have started making payments, so we are optimistic that the trend of improving credit quality will continue in all segments," Novita explained.
Digital banking services
IT and operations director Y.B. Hariantono said BNI showed no signs of slacking in its digital banking performance. BNI had been proactive in expanding its service capacity and capabilities in encouraging the development of digital solutions for customers.
“There are more features and services that customers can use in the BNI Mobile Banking Super App Ecosystem, making this service a constant favorite among customers,” he said.
“BNI Mobile Banking also ranks first in mobile banking applications on Google Play Store.”
Hariantono added that BNI had 11.47 million BNI Mobile Banking users, an increase of 34 percent yoy. Transaction volume had also increased significantly at 34.7 percent to reach 128 million transactions, while transaction value grew 26.8 percent yoy to Rp 175 trillion.
"Of course, we will continue to maintain and improve this excellent achievement. BNI continues to strengthen its presence to become the main channel of banking services for Indonesian customers," he added.
Hariantono said BNI had embarked on its plans to strengthening its digital ecosystem early this year, establishing partnerships with more than 4,000 application programming interface (API) providers to cover a total of 443 services under its BNI API Open Banking product, the “hero” of BNI’s digital banking services alongside its BNI Mobile Banking app.
To provide financial services in remote areas, BNI was continuously expanding its branchless banking services through its agents, dubbed BNI Agen46. The bank has approximately 150,000 BNI Agen46 officers reaching out to those segments that are unserved or underserved by formal financial institutions. To date, BNI Agen46 officers have recorded Rp 18.6 trillion in transaction value.
“Furthermore, electronic money services through TapCash BNI products are also contributing to the new transaction [habit] that reduces cash transactions. The total of 8.54 million TapCash cards in circulation are supporting transportation, food and beverage and minimarket transactions with a transaction volume of Rp 310 billion," said Hariantono.
Going greener
BNI risk management director David Pirzada said the lender had achieved stronger expansion in its green financing portfolio and environment, social and governance (ESG) commitment in all business lines.
BNI's green portfolio reached Rp 170.5 trillion in Q1 2022, accounting for 28.9 percent of all loans.
Green financing aims to help social economic development primarily through MSME financing, which totaled Rp 115.2 trillion. The remaining funds were channeled for greening the ecosystem, with Rp 10.3 trillion disbursed for the transition to renewable energy, Rp 6.8 trillion for pollution management and Rp 23.3 trillion for water and waste management.
These positive achievements in green financing, supported by high social and environmental awareness and improved corporate governance, has resulted in BNI's ESG rating to rise from to A from MSCI in November 2021. BNI's A rating is the highest among all Indonesian banks, cementing the lender’s role as a pioneer of sustainable finance.
The bank also applies the ESG principles across all its operations to culminate in a green corporate culture. It has also been granted certification from the Green Building Council Indonesia (GBCI).
“BNI received gold certification for the BNI Tower and platinum certification for Plaza BNI. In addition, we also implement the paper-free office system, or e-office," said David.
G20 presidency
David also noted that BNI was playing an active role in supporting Indonesia’s G20 presidency, with the main summit scheduled for November 2022. One of the summit’s priorities related to the financial industry is to mitigate the scarring effects of the COVID-19 pandemic and climate change.
“BNI is playing an active role by doing business in line with the ESG principles. It is hoped that banks can play a role in supporting productivity and long-term growth.” (*)
