risK PErForManCE rEViEw CORPORATE GOVERNANCE
PT Bank Mandiri Persero Tbk.
Rp.billion 2012
Core Capital Paid-in Capital
11,667 Disclosed Reserves
44,369 Deduction Factor of Tier 1 Capital
1,597
Total Core Capital 54,439
Tier 2 Capital 7,509
Total Capital 61,948
Weighted Assets ATMR
Credit Risk Standardized Approach 350,761
Market Risk Standardized Model 1,044
Operational Risk α 15 Basic Indicator Approach
48,385
Total ATMR 400,190
CAR Core Capital 13.60
CAR Total Capital 15.48
Based on BI regulations, a minimum 5 Core Capital from ATMR and a minimum 8 Total Capital from ATMR.
Based on the calculation simulation of capital expense on operational risk with
the Standardized Approach, the ATMR was posted at Rp47.3 trillion compared
with Basel II Basic Indicator Approach amounting to Rp48.4 trillion.
Capital expense for credit risk with Standardized Approach as of December
2012 has provided assets composition based on risk weight as stated on the
right pie chart:
The Bank applies Advance IRBA Internal Rating Based Approach in calculating
the credit capital expense simulation. The Bank’s simulation with the
Advanced IRBA approach could lead to a higher capital adequacy of around 1
compared with the current approach.
Composition Asset Base On Risk weight Credit Risk SA - December 2012 1
1 1
14 11
41 27
4
Risk weight 0 Risk weight 20
Risk weight 35 Risk weight 40
Risk weight 50 Risk weight 75
Risk weight 100 Risk weight 150
The Bank is currently measuring the economic capital needs both for credit
risk and operational risk. This will be used as the base to implement vBM
value Based Management through the measurement of RORAC Return On Risk
Adjusted Capital. One of Bank Mandiri business focuses in 2012 is the micro
segment; this was evident by signiicant growth of 60.4 yoy in micro segment
that was justiied with high rating of RoRAc.
Bank Mandiri has prepared Basel iii implementation that refers to Basel
documents as well as regulations and initiatives presented by Bank indonesia.
Bank Mandiri is active in the working group participation of Basel iii and
Quantitative impact study Qis held by Bank indonesia. Based on June 2012
position, Qis results generally present Bank Mandiri’s stance in meeting
the Basel iii guideline, with higher simulation result of capital Adequacy
Ration compared with Basel ii capital adequacy calculation. This was due
to Bank Mandiri capital structure that was dominated by Tier 1 common
equity. Qis results also present Bank Mandiri operations at a low-risk level,
by the leverage ratio adequacy and high liquidity ratio, as the result of
tight risk controlling of balance sheet exposure. The position of liquidity
assets and the Bank’s balance sheet composition is consistent towards Basel
iii requirements.
suPPoRTing uniTs RevieW
RisK MAnAgeMenT THRougH oPeRATionAl AcTiviTies
Risk management through operational activities was intended for the
management of credit risk, market risk and operational risk on an acceptable
level. Bank Mandiri implements risk appetite and risk tolerance in the form
of a limit policy and limit system. This system is developed and proposed by
business units to the risk management unit, and approved by the Risk capital
committee. The limit was determined based on overall limits, limit per risk
type and limit per certain functional activity that possess risk exposure. The
limit policy function is not only for the risk controlling process but also to boost
business strategy and expansion into a growth corridor with an optimum risk-
reward proile.
credit risk is managed through front end, middle end and back end. Market
risk and liquidity management is implemented through limit systems. All
working units manage the operational risk on products and activity of the
Bank, while risk management units will do a bankwide review as well as
measure their efectiveness assurance by an Audit internal unit.
1. credit Risk Management credit risk arises from loan activity,
placement of securities at other banks, sales to customers and trading activity.
ProCEss FLow oF CrEdiT and CrEdiT risK ManaGEMEnT
loan Proposal
Pre- screen
Approval loan
Analysis Booking
Monitoring Review
collection, loan
Work out
Account Portfolio
strategy
credit Policy Bank
Mandiri KPBM,
standart Procedure
credit sPK,
product manuals,
standard operating
Procedures integrated
end-to-end loan
processing systems
loAn oRiginATion
sysTeM los
inTegRATeD PRocessing
sysTeM iPs
Front end Middle end
Back end
Four-eye, Portfolio
guideline industry
class, industry
Acceptance criteria,
Application Modules,
credit scoringRating,
spreadsheet, nota
Analisa Kredit,
limit, Bi
checking, Appraisal,
check on
the spot,
loan Pricing
loan Monitoring,
Watch list,
credit Risk
Proile, Portfolio
Management industry
limit, stress
Testing, validation
collection system,
loan Work
out, Portfolio
Management Phase
out, Portfolio
sales stages
loan Processes
Methods Tools
Policies integrated
systems
RISK MANAGEMENT