2007 Annual Report PT Bank Mandiri Tbk.
21
attention to preparing the Bank for the second phase of our transformation process
in which we intend to Outperform the Market. We believe that our strong foundation will
support us in the Outperform the Market phase, allowing us to realize stronger business
and revenue growth in line with acceptable risks, in order to deliver exceptional value to
our shareholders. We have addressed several strategic areas of concern in order to lay the
groundwork for these foundations:
1. Strengthening the organization and developing a performance-based culture
In order to strengthen the organization and introduce a performance-based culture
as a platform for strong future growth, we have been focusing on efforts to strengthen
our implementation of the SBU-based organization instilling a new corporate
culture and enhancing the capability of our human resources.
Our implementation of the SBU-based organization commenced in early 2007, and
was not simply a change of organization structure, but also a structural change to
the organization’s “DNA”, resulting in more productive and adaptable organization that
has more clearly delineated accountability. This is to ensure that each SBU will be
empowered to address their specific business challenges and targets. The new
SBU-based organization goes hand in hand with improved Key Performance Indicators
KPI, intensive Performance Reviews, performance-based incentive systems
and periodic training to develop human resources capabilities specific to the needs
of each SBU. We believe that the SBU-based organization is an important element for
Bank Mandiri in developing a performance- based culture and strengthening the Bank
to compete in the long term. To reinforce our organizational
transformation, we have also implemented a new corporate culture, identifying
our core values as Trust, Integrity, Professionalism, Customer Focus and
Excellence TIPCE. These values form an “ideology” for Bank Mandiri’s personnel in
guiding appropriate behavior and attitudes toward their working environment. This
corporate culture has been implemented through several avenues, of which one
of the most crucial has been our Change Agents, who currently number 5,492
employees. The role of Change Agent is very important in maintaining the day to
day implementation of corporate culture in our activities and guiding personnel at all
levels about the importance of our values. Our continuous efforts to strengthen
the implementation of Good Corporate Governance are consistent with our
strategic imperative to apply GCG in every unit. This will further necessitate diligent
improvement in our operations with regard to transparency, accountability,
responsibility, independence and fairness in order to implemented GCG as intended.
Our initiatives in GCG implementation have received favorable responses and
recognition from independent observers and GCG Rating Agencies both domestic
and foreign. Bank Mandiri ranked 1st in the Corporate Governance Perception
Index 2007, and was rated as the “Most Trusted” publicly-listed company based
on the Indonesian Institute for Corporate Governance IICG Survey 2006.
These achievements followed Bank Mandiri’s international recognition for Good
Corporate Governance from Asiamoney Magazine, which cited Bank Mandiri as
the “Overall Best Managed Company In Indonesia - Large Capitalization”, “ The Best
Disclosure Transparency” and “ The Best Corporate Governance”. These have marked
a tremendous turn-around in perception since the difficult period in 2005.
2. Improving the Bank’s Value Proposition
We realize that Bank Mandiri’s success in growing our business in the coming years
will depend on our nurturing two inter- related aspects. The first is to improve
the capabilities of each Strategic Business Unit in expanding its business. The second
is to foster the capability of the SBU’s to collaborate internally in strategic alliances
in order to access and optimize the full range of business opportunities inherent
in our customer base, while providing excellent services.
Our efforts to reinforce the capabilities of our Strategic Business Units have
recently focused on better identifying and managing our target markets, building
the requisite infrastructure, developing products and services, and improving
human resources. In Corporate Banking, we have focused our
attention on financing potential customers in attractive sectors with good prospects,
such as transportation, communication, and electricity and gas, which grew by
59, as well as plantation and agriculture loans which grew by 45. Bank Mandiri’s
overall share within the corporate segment exceeds 20, while our share of plantation
and agriculture loans stands at 30. In Commercial Banking, we are improving our
infrastructure, including Cash Management System CMS Enhancement, Customer
Access for Trade Services and reducing loan processing Turnaround Time TAT to
14 business days. We have also continued expanding our network of Commercial
Banking Centers and Commercial Floors, helping to boost our Commercial loan
portfolio by Rp7 trillion or 29.
Message From
The President Director
22
2007 Annual Report PT Bank Mandiri Tbk.
CORPORATE COMMERCIAL
TREASURY INTERNATIONAL
NON-ORGANIC GROWTH BUILDING GROWTH
MICRO RETAIL
CONSUMER FINANCE
INITIATIVES TO OUTPERFORM THE MARKET
t NQSPWJOHUIFJNQMFNFOUBUJPOPGB1FSGPSNBODFBTFEVMUVSFUISPVHIWBMVFCBTFENBOBHFNFOUBOE supervising capital allocation in all business units.
t NQSPWJOHPQFSBUJPOBMFGGJDJFODZUISPVHIDFOUSBMJ[BUJPO
DPOUSBDUSFOFHPUJBUJPOBOESFTPVSDF reallocation to obtain cost-savings.
t ODSFBTJOHQSPEVDUJWJUZBOEDBQBCJMJUZPGIVNBOSFTPVSDFT t FWFMPQJOHJOGSBTUSVDUVSFOFFEFEUPTVQQPSUUIFBDIJFWFNFOUPGCVTJOFTTUBSHFUTBOESJTL
management. t VJMEJOHUIFCSBOEFYQFSJFODFBOECSBOEWJTJCJMJUZ
In Treasury International Banking, we are leveraging our varied capabilities by
recruiting the best people to fill key positions, developing product initiatives and capital
market services, expanding relationships with correspondent banks, as well as improving the
business portfolio of our overseas network. Through these initiatives, the Treasury
International SBU booked overseas loan growth of 181 in 2007.
In Micro and Retail Banking, we continued to strengthen our sales and service culture,
along with improvements to our payment infrastructure and brand image. These
initiatives have shown significant results as our savings deposits increased by Rp25.1
trillion from Rp60.3 trillion in 2006 to Rp85.4 trillion in 2007. For the micro and small
business segment, we have financed more than 100,000 debtors with a concomitant
70 growth in loan volume in 2007. In Consumer Finance, we have
expanded our services and operations to accommodate on-line decision-support
systems in order to accelerate loan approvals. These strategies, combined with
excellent marketing support across several leading products, such as mortgages and
payroll loans, resulted in 30.96 loan growth in 2007. Our credit card balances
also showed strong growth at 39, while fee income was 112 higher.
In addition to these efforts to strengthen the capabilities and enhance the business
platforms in each SBU, we have also developed various strategic alliances
among SBUs to create synergies leveraging the strength of each Strategic Business
Unit in order to secure deeper market penetration in all segments. Our primary
strategic alliance to date is the Client Service Team CST program in Corporate
Banking, which aims to encourage complementary business development
between Corporate Banking and our other business units.
In 2007, the CST program showed significant progress, with Payroll loans
growing by 31.7, while other Consumer Finance products derived from the strategic
alliance with Corporate Banking jumped from Rp319 billion in 2006 to Rp611 billion
in 2007, for growth of 91.5. Similarly,
Message From
The President Director
2007 Annual Report PT Bank Mandiri Tbk.
23
plantation loans arising through the CST program within our Small Micro Banking
segment grew by 134.9. We also formed strategic alliances among
our subsidiaries and the Bank’s core business through sharing experiences
as well as cross-selling and coordinated business development activities. These
actions ultimately increased significant performance of subsidiaries as shown by
the 47 growth in revenue from our equity investments.
3. Continuing Improvement in Operational Efficiency
