14.81 MB
Innovations
in Extending Services
Continuous
Built Upon Integrity and Cutting Edge Technology
Annual
Report
2014
Innovations
in Extending Services
Continuous
Built Upon Integrity and Cutting Edge Technology
Demonstrates a strong
commitment to support the
development of micro, small,
and medium enterprises
as well as other segments
throughout the country. BRI has
consistently invested in network
expansion and human resources
development to enhance services
quality and human resources
competence.
Aiming to become a
Bank with the best and
sustainable performance
through productive and
efficient network and
human resources to
support the customers’
business growth across
the archipelago.
BRI once again became one of the banks with the best performance in Indonesia.
Total assets grew to Rp801.9 trillion while total loans rose to Rp510.7 trillion with
stable loan quality. Third Party Funds also rose to Rp622.3 trillion, resulted in Loan to
Deposit Ratio (LDR) of 82.06%.
The development and implementation of cutting-edge technologies played an
important role in improving operational efficiency, thus it contributed to net income
of Rp24.3 trillion, representing 13.58% year on year growth. Bank BRI recorded as
one of the SOEs with the largest dividend contribution to the state.
Going forward, BRI is determined to continue to spur its operational performance
and human resources competencies in order to provide the best service to all
customers, support the development of economic potential across the nation, and
achieve sustainable quality growth.
Enhancing
Network Quality through
Measured Investments
In addition to 594 operational units,
comprising branch offices, sub-branch
offices, Cash Offices, BRI Units, and
Teras BRI as well as 47,973 e-channel
networks, BRI continues to develop
the latest banking information
technology applications. To enhance
communications quality, BRI has
initiated the communication satellite
project, BRIsat, which will be managed
by the Bank in the future.
Today, BRI has strengthened
its position as the bank with
the largest network that
consisted of 10,396 outlets,
20,792 ATMs, and 131,204
EDCs spreadout across the
country – all are integrated in
real-time online.
The network has enabled BRI to
significantly increase the volume
of e-banking transactions with
efficiency in order to accommodate
the growing volume of customers’
banking transactions regardless of
their locations, as reflected from
efficiency level ratio in the past
three years and fee-based income
increase from e-banking activities.
*) Bank only
Optimizing Human Resource
Potential through Competency
Building and Sound Integrity
Various training programs that
cover introduction, application, and
development courses were aim to
enhance the employees’ technical and
managerial competencies, including
strengthening employees’ integrity.
In 2014, more than 132 training
curriculums were developed and
implemented, covering 468,062
participants. Total budget spending
amounted to Rp664.6 billion, up by
22.02% from 2013.
In line with its
business expansion
plan, BRI consistently
carries out substantial
HR competency
building through
intensive and focused
training programs.
Indicated by increasing
employees’ productivity
ratio
Consistently Exercising
Sound Management in
Accordance with Good
Corporate Governance
Principles to Maintain
Customers’ Trust
BRI successfully improved total
assets by growing its business
whilst maintaining loan quality,
as reflected by the sound level
of NPL. On funding, BRI’s ability
to nurture customers’ trust is
illustrated by 23.45% deposits
growth, above industry’s
growth.
BRI consistently applies
the basic principles of GCG
across all phases of the
company management,
through aspects of TARIF –
Transparency, Accountability,
Responsibility, Independency,
and Fairness.
Consistently Delivers
Exceptional Performance
Despite Rigorous
Competition and
Challenging Economic
Conditions
The endeavours that BRI
has taken to increase
competitiveness through
network quality improvement
and HR capacity building
have resulted in an improved
operational efficiency and
productivity, which further
reinforced the foundation
to achieve distinguished
performance.
BRI is determined
to strengthen its
operational quality in
order to deliver the
best and sustanaible
performance.
Table of Contents
6
16
18
23
HIGHLIGHTS
Financial Highlights
Event Highlights 2014
Awards and Certifications
30 MANAGEMENT REPORTS
32 Foreword from the President Commissioner
36 Board of Commissioners 2014 Supervisory Duty
Report
44 Board of Commissioners
46 Message from the President Director
58 Board of Directors
60 Statement from Members of the Board of
Commissioners
94
96
110
118
124
126
OPERATIONAL REVIEW
Human Resources
Marketing Aspects
Information Systems and Technology
Operations Centres
Fixed Asset Management and
Procurement of Goods and Services
130 Risk Management
61 Statement from Members of the Board of
Directors
62
64
66
68
70
72
74
76
78
80
81
COMPANy PROFILE
Company Name, Address, and Information
BRI at a Glance
BRI’s Milestone
222 MANAGEMENT DISCUSSION AND ANALySIS
224 General Overview
224 Development of Macro Economic Conditions and
Banking Industry
Vision, Missions and Corporate Values
Banking Products and Services
Network Coverage
Outlets
Organizational Structure
Subsidiaries and Associated Entities
228 Market Share
230 Prospects and Strategy
232 Business Review
234 Micro Business and Programs
246 Retail and Medium Business
256 State-Owned Enterprises (SOEs) and Corporate
Capital Market Supporting Institutions
Business
262 International Business
268 Treasury Business and Capital Market Supporting
Services
82
84
85
86
87
88
92
12
INFORMATION FOR INVESTORS
Stock Highlights
Bond Summary
Share Listing Chronology
Management Stock Option Plan
Composition of Shareholders
276 Financial Review
284 Financial Position
284 Assets Composition
288 Liabilities
290 Equity
290 Capital
293 Cash Flows
294 Financial Ratio
297 Capital Expenditure
298 Other Financial Information
304 Other Material Information
312 Subsidiary
312 PT Bank BRISyariah
314 PT Bank Rakyat Indonesia Agroniaga Tbk
316 BRI Remittance Co.Ltd
Dividend and Dividend Policy
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Table of Contents
318 CORPORATE GOVERNANCE REPORT
320 The Objectives of Corporate Governance
321
322
323
327
330
333
334
337
352
Implementation
GCG Implementation Reference
500
502
506
508
CORPORATE SOCIAL RESPONSIBILITy
Principles and Commitment
Responsibility Towards Environment
Responsibility Towards Employees, Health and
Safety at Work
510 Responsibility Towards the Community
518 Responsibility Towards the Customers
Commitment of GCG Best Practices
GCG Road Map Implementation
GCG Implementation
Assessment of GCG Implementation
Plan of GCG Implementation
GCG Awards
Corporate Governance Policies and Guidelines
Corporate Governance Structures and Mechanisms
353 General Meeting of Shareholders
361 Board of Commissioners
379 Board of Directors
398 Board of Commissioners and Board of Directors’
Relationship
404 Board of Commissioners’ Committees
404 Audit Committee
409 Nomination and Remuneration Committee (NRC)
415 Risk Management Supervisory Committee (RMSC)
422 Board of Directors’ Committees
422 Risk Management Committee (RMC)
425 Credit Policy Committee (CPC)
426 Credit Committee
430 Assets and Liabilities Committee (ALCO)
432 Human Resource Policy Committee
433 Information System and Technology Steering
Committee (ITSC)
435 Project Management Office (PMO) Steering
Committee
437 Job Position Evaluation Committee
438 Corporate Governance Implementation in BRI’s
522
524
528
534
535
535
536
537
539
541
543
544
548
554
CORPORATE INFORMATION
Profiles of the Board of Commissioners
Profiles of the Board of Directors
Profiles of Committees under the Board of
Commissioners
Profiles of Nomination and Remuneration
Committee Members
Profiles of Risk Management Supervisory
Committee Members
Profiles of Corporate Secretary and Head of
Internal Audit
Senior Executives
Office Address
Operating Units
Contact Address
Press Release
Correspondency with OJk and IDX
OJk References
Subsidiary
438 PT Bank BRISyariah
443 PT Bank BRI Agroniaga Tbk
446 Board of Commissioners’ Secretary
447 Corporate Secretary
455
456
461
462
464
476
480
492
Information Access and Corporate Data
Compliance Functions
Risk Management
Internal Control System
Internal Audit
Code of Conduct
Corporate Culture
Other Material Information
573 2014 CONSOLIDATED FINANCIAL
STATEMENTS
577 Independent Auditor Report
579 Consolidated Financial Position Report
583 Consolidated Comprehensive Profit Loss Report
586 Consolidated Equity Changes Report
588 Consolidated Cash Flows Report
590 Notes on Consolidated Financial Statements
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
13
Financial Highlights
year
Financial Highlights
(Rp billion)
2010
2011
2012
2013
2014
Total Assets
404,286
469,899
551,337
626,183
801,955
Total Earning Assets
379,696
432,647
499,042
568,546
728,094
Loans - Gross
252,489
294,515
362,007
448,345
510,697
13,626
8,996
4,316
4,511
4,304
134
165
197
223
252
Total Liabilities
367,612
420,079
486,455
546,856
704,218
Third Party Funds
333,652
384,264
450,166
504,281
622,322
77,364
76,779
79,723
79,337
90,052
- Savings
125,990
154,133
184,717
212,997
236,395
- Time Deposits
Balance Sheets
Government Recap Bonds
Equity in Shares - Net
- Demand Deposits
130,298
153,353
185,726
211,948
295,875
Other Interest Bearing Liabilities
17,297
19,361
15,784
14,873
49,177
Capital/Equity
36,673
49,820
64,882
79,327
97,737
- Wih Government Bonds Interest
44,615
48,164
49,610
59,461
75,122
- Without Government Bonds Interest
43,109
47,053
49,235
59,298
74,876
- With Government Bonds Interest
32,889
34,427
36,484
44,106
51,442
- Without Government Bonds Interest
31,382
33,316
36,109
43,943
51,197
5,545
5,776
8,390
8,348
9,299
(16,114)
(17,086)
(19,491)
(22,381)
(26,660)
(7,917)
(5,533)
(2,700)
(3,946)
(5,719)
14,908
18,756
23,860
27,910
30,859
Net Income for the year
Income attributable to equity holders of parent
entity
Income attributable to non-controlling interests
11,472
15,088
18,687
21,354
24,254
11,472
15,083
18,681
21,344
24,242
Nihil
5
6
10
12
Comprehensive profit and loss
Comprehensive income attributable to equity
holders of parent entity
Comprehensive Income attributable to noncontrolling interests
Earnings per share (Rp)
11,559
15,296
18,661
19,917
24,760
11,559
15,288
18,652
19,913
24,745
Profit/Loss
Interest Income
Net Interest Income:
Other Operating Income
Other Operating Expenses
Provision for Impairment Losses on Financial
Assets
Income Before Tax
Nihil
8
9
3
15
478.36
628.91
757.26
865.22
982.67
Financial Ratio*
Capital
13.91%
14.99%
16.80%
16.97%
18.14%
Earning Assets
Earning Assets and Non Performing Assets to
Total Earning assets and non performing assets
Non performing earning assets
Capital Adequacy Rate
2.19%
1.79%
1.19%
1.06%
1.09%
2.24%
1.85%
1.46%
1.28%
1.26%
Allowance for possible losses to earning assets
4.58%
4.51%
3.43%
2.90%
2.40%
NPL Gross
2.78%
2.30%
1.78%
1.55%
1.69%
Profitability
ROA
4.64%
4.93%
5.15%
5.03%
4.74%
ROE
43.83%
42.49%
38.66%
34.11%
31.22%
NIM
10.77%
9.58%
8.42%
8.55%
8.51%
Operating Expenses to Operating Income
70.86%
66.69%
59.93%
60.58%
65.37%
*) Bank only
14
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Financial Highlights
Financial Highlights
(Rp billion)
year
2010
2011
2012
2013
2014
75.17%
76.20%
79.85%
88.54%
81.68%
- Related Parties
Nil
Nil
Nil
Nil
Nil
- Unrelated parties
Nil
Nil
Nil
Nil
Nil
- Related Parties
Nil
Nil
Nil
Nil
Nil
- Unrelated parties
Nil
Nil
Nil
Nil
Nil
8.05%
9.33%
10.64%
8.02%
8.07%
Liquidity
LDR
Compliance
Violation of Legal Lending Limit
Excess of Legal Lending Limit
Statutory Reserves
Net Open Postion
4.45%
5.49%
3.00%
3.15%
3.86%
The financial figures above represent BRI’s consolidated financial statements with the following subsidiaries for years 2011, 2012, 2013 and 2014: PT
BRISyariah, PT Bank Agroniaga Tbk, BRIngin Remittance Co. Ltd; and only PT BRISyariah for year 2010.
The financial ratio uses Bank data only.
*)Starting in 2004, the Bank took into account the market risk, and operational risk has been taken into account, starting in 2010.
*) Bank only
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
15
Event Highlights 2014
24
February
Launching of Financial Literacy Car (SIMOLEk)
“In collaboration with OJK, BRI operates 20 units of SIMOLEK to support
OJK’s efforts to raise financial literacy of the public”
March
BRI signed MOU with Board Members of
Nahdlatul Ulama (PBNU)
19
“BRI is ready to serve 80 million of NU followers”
20
March
BRI E-Hospital Cooperation with
Fatmawati Hospital
“BRI implemented E-Hospital program to serve the hospital and its
customers”
March
Quarter I 2014 BRI Analyst Meeting and
Press Conference
23
“Publication of BRI financial performance for the Q1 2014”
24
March
E-Filling Program Cooperation between
BRI and DG Tax
“BRI collaborated with the Directorate General of Tax on tax reporting of
113 thousand BRI employees using e-filling system”
March
BRI signed MOU with the
Ministry of Public Housing
25
“BRI and the Ministry of Public Housing cooperated in disbursing Funds
Assistance for Housing (Bantuan Stimulan Perumahan Swadaya/BSPS)”
16
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Event Highlights 2014
26
March
Annual General Meeting of
Shareholders (AGMS) of BRI 2014
April
BRI Satellite (BRISAT) Procurement
Contract Signing
28
“Contract signing between PT Bank Rakyat Indonesia (Persero) Tbk Space
Systems/Loral, Llc and Arianespace regarding the BRI Satellite Program”
7
June
Teras BRI Nusantara Participated
in Jakarta Great Sale Festival
“Teras BRI Nusantara brought its best customers to Jakarta’s shopping
centers. As many as 68 MSME customers participated in the Jakarta Great
Sale Festival”
June
BRI Launched E-Ticketing in Collaboration
with BNI and Mandiri
16
“BRI synergized with Bank Mandiri, BNI, and PT KAI Commuter
Jabodetabek (KCJ) and launched the prepaid card payment system.”
17
June
Inauguration of BRI Lampung Regional Office
“BRI inaugurated its 19th regional office, BRI Lampung Regional Office”
July
BRI Issued Electronic Member Card (kartu
Tanda Anggota/kTA) for Indonesian
National Police (POLRI)
1
“BRI innovated and developed KTA POLRI with multiple functions as ATM
and electronic money (BRIZZI)”
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
17
Event Highlights 2014
10
July
Extraordinary General Meeting of
Shareholders (EGMS) BRI 2014
“Agenda: Changes of the Bank’s management composition”
July
BRI Peduli Program, Breakfasting with
Orphaned Children
17
“BRI Peduli program organized a breakfasting event
with the President and 3,500 orphaned children”
21
July
BRI Peduli Distributed Basic Food
“BRI distributed basic food in 15 poor areas in Jakarta”
July
BRI Homecoming Program
24
“BRI provides 125 free buses for the homecoming of 6,000 customers
under the “Ngebuzz Bareng BRI” program”
14
August
BRI Participate in the Non-Cash
National Movement
“BRI supports Non-Cash National Movement (GNTT) and signs
memorandum of understanding concerning integration of Electronic Data
Capture (EDC) with Bank BNI and Mandiri”
August
Indonesia Banking Expo (IBEX)
14
“BRI presents Hybrid Lounge and BRI Satellite in IBEX 2014”
10
November
keel Laying of Floating Teras BRI
“BRI commenced the construction of Floating TerasBRI and will be the first
bank in Indonesia to provide services on a vessel”
18
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Event Highlights 2014
August
Independence Day Run
31
“BRI supports the largest running competition event in Indonesia,
Independence Day Run in celebration of the 69th Indonesian
independence”
September
BRI Participates in the National
Customer Day
4
“BRI celebrates the National Customer Day with events at various Branch
Offices”
September
Launch of BRI Micro Insurance – Accident, Health,
and Life
10
“BRI launched Micro Insurance – Accident, Health, and Life in cooperation
with PT Bringin Jiwa Sejahtera, Asuransi Bringin Sejahtera Artamakmur, and
PT AJ Jiwasraya”
October
Quarter III 2014 BRI Analyst Meeting
and Press Conference
22
“Publication of BRI financial performance for Q3 2014”
October
Inauguration of BRI’s Regional Office
Building Jakarta 3
27
“Inauguration of BRI’s Regional Office Building of Jakarta 3 in Bumi
Serpong Damai”
October
BRI Supports Indocomtech Exhibition
2014
29
“BRI participated in this largest gadget and IT exhibition, Indocomtech,
themed Digital Lifestyle”
12
December
Launching of BRIlink
“BRI launched BRILink, an agent banking system support the Financial
Inclusion program”
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
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Awards and Certifications
External parties recognized the outstanding performance of
BRI in 2014. BRI received over 30 international and national
awards, covering:
International Awards
• Category:
- The Most Valuable
Banking Brand 2014
- The Most Valuable
Banking Brand 2011
• Organizer:
Brand Finance PLC
The 153rd Most • Date:
Valuable Banking
10 February 2014
Brand in 2014
“The World’s
Largest Public
Companies”
• Category:
- Asia’s Best Companies 2014
- Asia’s Best Companies 2013
- Asia’s Best Companies 2010
• Organizer:
Finance Asia
• Date:
5 June 2014
• 4th Best Investor Relations
• 5th Best Managed Company
• 6th Best Corporate Governance
AsiaMoney Best
Banks
The Bankers Awards 2014
• Category:
- Bank Of The year Indonesia 2014
- Bank Of The Year Indonesia 2011
• Organizer:
The Banker
• Date:
21 October 2014
20
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
• Category:
- The World’s Largest
Public Companies 2014
- The World’s Largest Public
Companies 2012
• Organizer:
Forbes Magazine
• Date:
19 August 2014
• Category:
- Best Domestic Bank in
Indonesia 2014
- Best Domestic Bank in
Indonesia 2008
• Organizer:
AsiaMoney
• Date:
26 September 2014
Awards and Certifications
National Awards
Overall Winner
Annual Report Award
2013
• Category:
Financial SOE - Listed
• Organizer:
KNKG,IDX,BI,OJK, DG Tax,
BUMN,IAI
• Date:
16 October 2014
Best Listed Finance
Company and
Insurance Sector 2014
• Event:
MNC Business Award 2014
• Organizer:
MNC Business
• Date:
9 June 2014
Corporate Governance
Conference and Award
• Category:
Best Financial Sector
• Organizer:
IICD ( Indonesia Institute
Corporate Directorship )
• Date:
30 October 2014
Top Performing
Listed Company
2014
• Event:
Investor Award 2014
• Category:
Market Capitalization over Rp10 Trillion
• Organizer:
Investor Magazine
• Date:
8 May 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
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Awards and Certifications
Awards
Category:
- 1st Winner - Children’s Savings Account : BRI JUNIO
- 2nd Winner- Deposits Account
- 2nd Winner- Savings Account : BritAma
- 3rd Winner- Mobile Banking : BRI Mobile
- 3rd Winner- Call BRI - Call Center
- 3rd Winner- Internet Banking BRI
• Organizer:
Marketing Magazine
• Date:
6 February 2014
TOP Brand Award
in Recognition of
Outstanding Achievement in
Building the Top Brand
Bank Loyalty Award 2014
• Category:
Credit Card, Conventional Banking
• Organizer:
Infobank and Mark Plus Insight Indonesian
• Date:
26 February 2014
• Category:
Saving Account, Conventional Banking (Asset > 100 T)
• Organizer:
Infobank and Mark Plus Insight Indonesian
• Date:
26 February 2014
• Event:
Most Admired Companies
• Organizer:
Warta Ekonomi
• Date:
29 April 2014
Indonesia Most Admired
Companies 2014
22
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
• Category:
River Clean-Up Community Service
with the Most Participants
• Organizer:
Indonesian World-Records
Museum (MURI)
• Date:
25 May 2014
MURI
Awards and Certifications
Investor Best Bank 2014
• Event:
Service Quality Award
• Organizer:
SQ
• Date:
5 June 2014
• Event:
Investor Best Bank
• Category:
Commercial Bank above Rp100 Trillion
• Organizer:
Investor Magazine
• Date:
10 June 2014
“Priority Banking” 2014
Indonesia Property &
Bank Award 2014
• Category:
Commercial Bank with the Best
Performance
• Organizer:
Property & Bank
• Date:
20 June 2014
Green CEO Award 2014
• Category:
Best Green CEO 2014 for
Sofyan Basir
• Organizer:
Warta Ekonomi
• Date:
26 June 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
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Awards and Certifications
Social Business Innovation Award 2014
• Category:
State Owned (Best
Sustainable Business
Innovation Company
In Developing Coffee
Farmer Programme )
• Organizer:
Warta Ekonomi
• Date:
26 June 2014
Indonesia Best Brand Award
• Category:
Product “Bank” 4 consecutive
years (2011 – 2014 )
• Organizer:
SWA Magazine & MARS
• Date:
17 September 2014
Infobank Award 2014
• Category:
Bank Rated “Very
Good” for Financial
Performance of
2013
24
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
• Organizer:
Infobank
• Date:
18 July 2014
Awards and Certifications
• Category:
Exemplary Tribute II
- Small Enterprises: Gold Rating
- Community Education: Gold Rating,
- Community Health: Gold Rating,
- Nature and Environmental Preservation: Gold Rating,
- Social Aid and Mitigation of Social Welfare Issues: Gold Rating
- Public Facilities and Infrastructure Development: Gold Rating
• Organizer:
PKBL BUMN
• Date:
25 September 2014
PkBL BUMN
• Category:
Saving Account
• Organizer:
Marketers
• Date:
22 October 2014
Indonesia Most Favorite Women and
youth Brand 2014
Indonesia Banking
Awards 2014
Category:
Bank of the year 2014
- Category BUKU 4 with Core Capital 30 T,First
Place
- Finance Value Creation, First Place.
- Finance Efficiency profit, First Place.
- CSR, First Place.
- Corporate Communication, First Place.
- GCG, Second Place.
- Risk Management, Second Place.
- Human Capital,Second Place.
- Marketing,Second Place.
- IT, Second Place.
• Organizer:
Economic Review
• Date:
18 November 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
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Awards and Certifications
Economic Challengers
Awards 2014
• Category:
Financial Institution Industry
• Organizer:
Metro TV
• Date:
24 November 2014
Brand Activation
Award 2014
Investor Award 2014
• Category:
The Best Running Activation 2014
• Organizer:
Indonesia Most Experiential
• Date:
27 November 2014
• Category:
Best SOE 2014 in Financial
Industry, Banking Sector
• Organizer:
Investor Magazine
• Date:
10 December 2014
• Category:
The Best Companies 2014
• Organizer:
Kehati dan SWA
• Date:
11 December 2014
The Best Companies 2014
26
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Awards and Certifications
Certifications
ISO 9001:2008
• BRI’s Financial Statements obtained the ISO 9001:2008 certificates, which covered the
Process of Preparing Financial Statements. Certification and audit conducted by SGS
(Societe Generale de Surveillance). The certificate is valid for 3 (three years), effective
as of 9 December 2014 until 9 December 2017.
ISO 9001:2008
• BRI Operations Centre Division received the ISO 9001:2008 certificate, which
covered 7 (seven) areas:Operations Banking System for RTGS, Clearing, Remittance,
Card Production, Complaint Resolutions, Transaction Reconciliations, and ATM
Reconciliations. This certification is expected to boost transaction processes quality in
BRI, and eventually resulted in customer satisfaction improvement.
ISO 9001 : 2008
• BRI’s Contact Centre Service (LCC) operates with management system that conforms
with ISO 9001:2008 standard. The certification was conducted by Verification New
Zealand Limitedon 5 December 2011 and valid until 5 December 2014.
ISO 9001 : 2008
• BRI’s Internal Audit has carried out audit function based on Quality Management
System that complies with ISO 9001:2008 standard – in terms of audit quality,
operations, and managerial aspects. The certification was initially started in 2003 and
renewed every 3 years. Last re-certification was conducted by PT SGS Indonesia and
effective as of 24 October 2014 with 3-year validity.
ISO 9001 : 2008
• Goods and Services Procurement Division has received the ISO 9001:2008 certificate
from the Certification Agency PT Lloyd’s Register Indonesia (LQRA), covering
inventory, distribution, and administration areas. This certification has received
national and international acknowledged from National Accreditation Committee
(KAN) and United Kingdom Accreditation Services (UKAS) Management System.
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
27
Management
Reports
Enhancing Human
Resources qualities
and strengthening
information technology
as well as networks
to deliver better
performance and to
become the foundation
of future business
development.
30 MANAGEMENT REPORTS
32 Foreword from the President Commissioner
36 Report on the Supervisory Duties of the Board of
44
46
58
60
Commissioners in 2014
Board of Commissioners
President Director’s Report
Board of Directors
Statement from Members of the Board of
Commissioners and the Board of Directors
MANAGEMENT REPORTS
MANAGEMENT DISCUSSION AND ANALYSIS
OPERATIONAL REVIEW
INFORMATION FOR INVESTOR
COMPANY PROFILE
Message from the President Commissioner
COMPANY INFORMATION
CORPORATE SOCIAL RESPONSIBILITY
CORPORATE GOVERNANCE
BRI consistently showed strong
performance throughout 2014,
as evidenced by growth across
consolidated financial ratio
indicators – total assets grew by
28.07% (year-on-year), total loan
by 13.91%, third party funds by
23.41% and net interest income
by 16.63%, while profit after tax
reached Rp 24.2 trillion and nonperforming loans stood at around
1.78%. These achievements were
successfully made as a result of
reliable human capital, IT and
network expansion carried out by
the Bank.
FINANCIAL REPORT
Bunasor Sanim
President Commissioner
and Independent Commissioner
30
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Message from the President Commissioner
Assalamualaikum Wr. Wb.
Esteemed shareholders, members of the Board of Commissioners and Board of
Directors, all employees of the Bank and stakeholders,
Praises to Allah the Most High, the One and Only, for the blessings and grace bestowed,
which have allowed the Bank to achieve an excellent performance in 2014.
In overall, global economic conditions experienced slowdown in 2014. The Indonesian
economy in particular was largely unfavorable, as indicated by, among other things,
tight liquidity that triggered intensed competition in the banking sector, especially in
generating third-party funds.
Amid these conditions, throughout 2014 BRI was able to deliver strong performance
growth as evidenced by financial ratio indicators – total assets grew by 28.07% (year-onyear), total loan grew by 13.91%, third-party funds by 23.41% and net interest income
by 16.63%. Meanwhile, profit after tax reached Rp 24.2 trillion and non-performing
loans stood at 1.78%.
These achievements were reached as a result of reliable human capital, IT and the Bank’s
office expansion. BRI opened 594 offices consisting of eight Branch Offices, 19 Subbranch Offices, 149 BRI Units, 21 Cash Offices and 396 Teras BRI units, while e-channel
services increased by 47,973 units. With these new additions, BRI constantly enhances
the services it extends to customers in order to become “The Biggest Payment Bank in
Indonesia”, ready to reach and serve customers across different market segments from
Sabang to Merauke.
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
31
MANAGEMENT REPORTS
INFORMATION FOR INVESTOR
COMPANY PROFILE
Message from the President Commissioner
The year 2015 brings fresh challenges for BRI. The new government has been formed
and the ASEAN Economic Community (AEC) is to be implemented. In 2015, the Bank
has defined its destination statement to become “The Biggest National Payment Bank”
supported by e-channel optimization, e-banking and IT technology reliability, higher
human-capital productivity and a focus on low-cost funds.
MANAGEMENT DISCUSSION AND ANALYSIS
OPERATIONAL REVIEW
To respond the new administration program, BRI’s loan disbursement will be in line with
the government’s programs in energy, food and infrastructure sectors, while maintaining
BRI’s core business in the MSME segment and practicing prudential banking. In view of
the dynamic and competitive nature of the business as well as the Bank’s legal status as
a listed company, the Board of Commissioners expects the utmost commitment of all
employees anywhere Indonesia in carrying out their responsibilities in order to realize the
destination statement.
FINANCIAL REPORT
COMPANY INFORMATION
CORPORATE SOCIAL RESPONSIBILITY
CORPORATE GOVERNANCE
The Board of Commissioners consistently endeavors to improve the quality of its
supervision duty implementation and to work in harmony with the Board of Directors
as stipulated by the Bank’s Articles of Association as well as prevailing regulations. In
addition, the Board of Commissioners expects that, in performing their duties and
functions, all employees will strongly abide by the Code of Conduct and corporate
culture values.
32
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Message from the President Commissioner
The Board of Commissioners thanks and appreciates the Board of Directors and all
employees for the dedication they showed in achieving 2014 company’s performance.
We would like to sincerely thank Mrs. Aviliani, member of the Board of Commissioners,
and Mr. Sofyan Basir, Mr. Sarwono Sudarto and Mrs. Lenny Sugihat, members of the
Board of Directors, who concluded their service to the Bank in 2014. May the guidance
and protection of Allah the Most High, the One and Only, always accompany them in
their new undertakings. We thank the government as the Bank’s shareholder, customers,
business partners, all stakeholders and the public at large for their trust and support. As
I am about to reach the end of my service as the Bank’s President Commissioner, allow
me to apologize for any shortcomings during my time in office.
I pray that Allah the Most High, the One and Only, shall always guide all individuals
in BRI. We believe that PT Bank Rakyat Indonesia (Persero) Tbk will continue to deliver
better and stronger results in many years to come.
Aamiin.
Wassalamualaikum Wr. Wb.
Bunasor Sanim
President Commissioner
and Independent Commissioner
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
33
MANAGEMENT REPORTS
INFORMATION FOR INVESTOR
COMPANY PROFILE
Board of Commissioners 2014 Supervisory Duty Report
MANAGEMENT DISCUSSION AND ANALYSIS
OPERATIONAL REVIEW
The Board of Commissioners of PT Bank Rakyat
Indonesia (Persero) Tbk performs its supervisory
and advisory duties to the Board of Directors in
good faith, responsibly and with prudence – all
for the best interest of the Bank. The Board of
Commissioners carries out its duties and functions
independently, adhering to the Bank’s Articles of
Association, prevailing laws and regulations and
the principles of good governance. The Board of
Commissioners oversees operational policies and
management of the Bank carried out by the Board
of Directors; the Board of Commissioners advises
the Board of Directors and ensures that it complies
with the Bank’s Articles of Association as well as
other prevailing laws and regulations.
CORPORATE GOVERNANCE
The supervisory and advisory functions of the
BOCs are carried out to support the interest
of the company and to ensure that BODs has
conducted its duties and responsibilities inline with
the company’s aims and objectives, in order to
assure that the company is well managed for the
benefit of stakeholders. In optimizing its duties,
BOC has supporting committees namely the Audit
Committee, Risk Management Oversight Committee
and Remuneration & Nomination Committee.
CORPORATE SOCIAL RESPONSIBILITY
As a Board, the Board of Commissioners has all
the necessary core competences. To maintain
objectivity and independence, the Board Of
Commissioners is not involved in any of the Bank’s
operational decision-making, with the exception of
fund provision to related parties and other matters
specified and stipulated by the Bank’s Articles of
Association and prevailing laws and regulations.
THE COMPANy’S PERFORMANCE
EVALUATION AND SUPERVISORy IN 2014
The Board of Commissioners expressed their
appreciation for the BOD success in overcoming
challenges in 2014. The Board of Directors has laid
a strong foundation that will propel the Bank’s
business in the future. As we know, economic
slowdown which occurred in the middle of 2014
happened as a result of the uncertainties in the
global economic condition. The slowdown in GDP
growth of several main trade partners, a decrease
in the global commodity prices, tapering off issue in
the US economic as well as internal situation such
as widening current account deficit, depreciation
of Rupiah currency, and an increase in inflation
rate have contributed to tight liquidity situation in
the banking industry which accompanied by the
pressure from an increase in cost of fund.
Nevertheless, throughout 2014, the Board of
Directors was able to deliver significant performance
growth. Net profit reached Rp 24.2 trillion and
consolidated assets stood at Rp 801.9 trillion.
Further, other important indicators also showed
substantial improvements – loans grew by 13.91%
year-on-year and fee-based income reached Rp
6.1 trillion, or grew 24.89% higher year-on-year.
The Company also booked strong financial ratios*;
return on equity stood at 31.22%, return on assets
reached 4.74% and the operating expense to
operating income (BOPO) ratio achieved 65.37%.
Spurred by business-development initiatives, the
Board of Directors was also able to maintain asset
quality – gross NPL stood at 1.78% and net NPL
at 0.39%. The Board of Directors has been able to
maintain liquidity by maintaining primary reserves
in rupiah and foreign currency at around 8%, while
LDR reached 82.06%.
FINANCIAL REPORT
COMPANY INFORMATION
Even tough achieving business growth target
is considered as vital, it is more important to
ensure that the growth is sustainable. The Board
of Commissioners has strived to perform strict
supervisory of micro financial and macro external
parameters as a form of early warning system.
*) Financial ratio figures are Bank only data
34
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Board of Commissioners 2014 Supervisory Duty Report
1. RISk PROFILE
Throughout 2014, BRI’s business risks were
mitigated by comprehensive risk-management
implementation. Risk management is embedded
across all levels of the organization so that all
individuals in BRI may continuously apply a riskmanagement culture in their day-to-day activities.
c. The Bank’s management practices consistently
adhere to prevailing laws and regulations
as well as sound corporate principles, as
evidenced by the regular reports from the
Bank to regulators and other authorities as
stated in the prevailing regulations.
An increase in the complexity of its business
activities and network, BRI requires a highly and
effective risk-management implementation so
that current and future potential risks need to be
identified. The effectiveness of risk management
at the Bank is reflected composite risk level that
shows low to moderate category (score 2), with
low risk levels for market and compliance risks
and low to moderate level for credit, liquidity,
operational, legal, strategic and reputation risks.
d. The Bank’s management is carried out
professionally without conflicts of interest or
influence or pressure from any other parties
that contradict prevailing laws and regulations
or the principles of a healthy corporation. All
employees of the Bank are committed to work
professionally without conflicts of interest,
independent from influence or pressure from
any party.
2. GOOD CORPORATE GOVERNANCE (GCG)
The Bank implements corporate governance
based on the five principles of transparency,
accountability, responsibility, independence
and fairness. In practice, the five principles are
implemented as follows:
a. Transparency in decision-making processes
and disclosure of materials and relevant
corporate information, among others reflected
in the publication of quarterly Financial
Statements and updates of share ownership
of the Board of Commissioners and Board
of Directors presented in the Bank’s annual
report.
e. The Bank fairly and equally meets
stakeholders’ rights that arise from
agreements and prevailing laws and
regulations. This is evidenced by performancedriven rewards and objective punishments
that the Bank implements for stakeholders.
The Bank also provides equal treatment to all
customers.
The Board of Commissioners believes that
in overall, the Bank applied Good Corporate
Governance (GCG) principles in all aspects of
its activities. The Bank achieved a composite
score of (1.14) for GCG self-assessment. This
score improved from the composite score in the
preceding year (1.29).
b. The responsibilities and duties of the Bank’s
management are clearly defined; therefore the
Bank’s management is carried out accountably
in an efficient and effective manner. This
is reflected from clear responsibilities
attached to each part of the organizational
structure, a fair and objective employee
recruitment system and a performance-based
remuneration system for management and
employees.
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
35
MANAGEMENT REPORTS
INFORMATION FOR INVESTOR
COMPANY PROFILE
Board of Commissioners 2014 Supervisory Duty Report
3. PROFITABILITy
4. CAPITAL
MANAGEMENT DISCUSSION AND ANALYSIS
OPERATIONAL REVIEW
In 2014, BOC viewed that
BOD has successfully and
aptly implemented strategies
that the Bank had defined. In
numbers, the Bank delivered
net profit of Rp 24.2 trillion,
which represented 13.58%
growth from the previous year.
The net profit achievement
was supported by the ability to
maintain NIM at 8.51%
CORPORATE GOVERNANCE
The Board of Directors also
delivered strong financial ratios,
such as return on equity (ROE)
that stood at 31.22% and return
on assets (ROA) that stood at
4.74%. Indeed, compared with
the preceding period, the ROE
and ROA ratios decreased; in
the earlier period, ROE and ROA
stood at 34.11% and 5.03%,
respectively. The decrease was
due to the high cost of funds,
which contributed to the
increase in interest expenses
then finally affected returns
negatively.
FINANCIAL REPORT
COMPANY INFORMATION
CORPORATE SOCIAL RESPONSIBILITY
Efficiency levels which
represented by BOPO and
CER ratios, each at 65.37%
and 43.10%, higher than the
preceding period, when they
stood at 60.58% and 42.13%,
respectively.
In general, in the view of Board
of Commissioners viewed that,
the Board of Directors has
effectively carried out capital
management in a way that
consistent with the Bank’s
characteristics, business scale
and business complexity. The
Board of Directors was able to
maintain the Bank’s capital level
above the minimum requirement
from Bank Indonesia. At the end
of 2014, the Capital Adequacy
Ratio (CAR) of the Bank stood at
18.14%.
PERFORMANCE EVALUATION
OF COMMITTEES UNDER THE
BOARD OF COMMISSIONERS
In 2014, committees under
the Board of Commissioners
– the Audit Committee, Risk
Management Supervisory
Committee and Remuneration &
Nomination Committee –performed
their duties and responsibilities
well. The committees provided
significant and positive support to
the supervisory duty of the Board
of Commissioners.
The Audit Committee ensured
the adequacy of internal control,
including the financial reporting
process. The Audit Committee
also reviewed the effectiveness
and compliance of audit activities
performed by Public Accounting
Office and reviewed Financial
Statements as well as other
financial information to assess
their consistency with prevailing
standards and regulations.
*) Financial ratio figures are Bank only data
36
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
In terms of risk management,
BRI’s quality is inseparable from
the successful coordination of the
Risk Management Supervisory
Committee with the Compliance
Directorate in carrying out their
duties to review and monitor riskmanagement practices in BRI. The
“Low to Moderate” risk profile,
healthy loan portfolio and low
percentage of non-performing
loans in 2014 represented the real
results of strong risk-management
synergy.
The Nomination and Remuneration
Committee also rendered an
important contribution in terms
of remuneration policy for the
Board of Commissioners, Board
of Directors, Executive Offices and
employees. The Nomination and
Remuneration Committee offered
constructive suggestions and input
on systems and procedures to
appoint and/or replace members of
Board of Commissioners, Board of
Directors and independent parties.
The Board of Commissioners
deeply appreciates the work of
the committees; the Board of
Commissioners expects that the
performance of the committees
will always improve and that
the committees can build strong
synergy with relevant units in order
to provide greater contributions
to BRI and the Indonesian banking
sector overall.
Board of Commissioners 2014 Supervisory Duty Report
SUPERVISORy ACTIVITIES
AND RECOMMENDATIONS
In performing supervisory duties,
the Board of Commissioners:
1. Convened Board of
Commissioners meetings at least
once every week.
2. Convened Board of Directors
and Board of Commissioners
meetings at least once every
month.
3. Conducted scheduled visits to
operational areas of BRI across
Indonesia.
4. Organized meetings between
the Board of Commissioners and
related divisions and working
units.
5. Discussed with the Board of
Directors and related working
units regarding important
matters, in order to arrive at
solutions immediately.
Based on the meetings and visits,
the Board of Commissioners
recommends the following:
1. Lending
The Board of Commissioners
recommends in putting
a consistent emphasis on
prudential banking principles
with respect to loan
disbursement, to improve
internal control quality and to
effectively implement credit-risk
mitigation.
In view of the Bank’s vision and
mission as the “Leading Bank
for Micro, Small and Medium
Enterprises”, the Board of
Commissioners also reminds
the Bank to maintain its focus
on loan disbursement for the
MSME segment.
The Board of Commissioners
supports the Board of Directors’
goal to boost loan expansion
through a trickle-down
business strategy. In addition,
in the credit consultation
forum organized for the
loan disbursement of certain
amounts to certain debtors, the
Board of Commissioners actively
provided advice and input to the
Board of Directors.
funding programs that the Bank
establishes, so that the credit
expansion and liquidity targets
of the Bank can be met.
3. Income and Expenses
The Board of Commissioners
recommends that the Bank
boost non-interest income, for
instance through e-banking
activities, trade finance,
remittance, cash management
and others, by leveraging
BRI working units located
across Indonesia. In terms
of expenses, the Board of
Commissioners always provides
recommendations to the Bank
to increase efficiency.
4. Capital
2. Funding
The Board of Commissioners
always recommends that the
Bank increase the composition
of low-cost funds in order to
provide competitive interest
rates to customers as part of the
Bank’s strategy to stay ahead
of the market. In 2015, the
Bank needs to achieve thirdparty fund targets consistently
throughout the year by carrying
out effective monitoring of
The Board of Commissioners
recommends optimizing the
Bank’s capital growth through
increase of retained earnings.
Efforts to boost sources of
funding and working capital,
e.g. the issuance of securities
in the form of MTN and bonds,
need to be based on thorough
analysis, to formulate terms and
conditions that will benefit the
Bank and to be carried out in
accordance with prevailing laws
and regulations.
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
37
MANAGEMENT REPORTS
INFORMATION FOR INVESTOR
COMPANY PROFILE
Board of Commissioners 2014 Supervisory Duty Report
5. Human Capital
6. Information Technology
MANAGEMENT DISCUSSION AND ANALYSIS
OPERATIONAL REVIEW
Human capital plays an important role in the
company to the Bank. For that reason, the
Board of Commissioners put attention in the the
Bank’s human-capital management. Throughout
2014, the Board of Commissioners provided
recommendations to the management on
human-capital management, for example the
importance of developing human capital and
manpower planning in an integrated manner
with the corporate plan, business plan and work
and budget plan
In addition, the fulfillment of human capital
has to maintain its focus on competence and
leadership quality. The Bank should enhance
the quality of education, training, development
and mentorship by senior employees as well as
internalizing and implementing corporate culture
to support business growth.
7. Risk Management
Risks increase as the Bank’s office network
expands, number of employees rises and more
products are innovated. To mitigate risks, steps
are needed to strengthen risk-management
infrastructure and internal control systems.
8. Internal Control
The Board of Commissioners recommends
improving the quality of internal control, among
others in terms of:
a. Increasing embedded monitoring in
operational processes in each working unit.
b. Optimizing the role and function of risk
management in all working units.
c. Enhancing the quality of internal control by
carrying out risk-based audit of operational
processes in all working units, improving the
quality of internal auditors and improving IT
auditing.
d. Increasing monitoring by working unit
managers of follow-ups to findings from
internal and external auditing within working
units.
FINANCIAL REPORT
COMPANY INFORMATION
CORPORATE SOCIAL RESPONSIBILITY
CORPORATE GOVERNANCE
The Board of Commissioners appreciates the
steps that have been taken to achieve the ideal
balance in the composition of business and
supporting employees. The role of IT has to be
enhanced, so as to support the Bank’s human
capital in carrying out business operations.
In addition, the Board of Commissioners
supports a human-capital management
strategy that elevates the function of frontline staff as the spearhead in achieving fund
targets and e-channel utilization. The Board
of Commissioners also regularly monitors the
readiness of human-capital management with
respect to the Bank’s plan to operate a satellite.
IT is critical to enhance efficiency and customer
service. Therefore, the Board of Commissioners
suggests that IT development be focused on
improving network reliability. The Board of
Commissioners recommends that the Board
of Directors optimize the use of IT to bolster
the accuracy, speed and quality of the Bank’s
operations.
38
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Board of Commissioners 2014 Supervisory Duty Report
9. Investment
Investments in subsidiaries have to be preceded
by thorough and comprehensive analysis based
on prudential principles and in accordance with
prevailing regulations. Investment also needs to
take into account the development strategy of
subsidiaries; it has to be synergetic and mutually
beneficial, with monitoring of the subsidiary’s
business-plan implementation.
10. Capital Expenditure
Capital-expenditure planning is aligned with
project planning, business development planning
and human-capital readiness. In addition, capital
expenditure needs to be optimized to enable
improvement of customer service.
b. Evaluation of new branch-office opening
should be aligned with branchless banking
policy; which need further cooperation with
third parties as agents.
c. Optimization of the use of ATM and e-channel
features by socializing and educating
customers to drive fee-based income growth.
12. Good Corporate Governance (GCG)
The Board of Commissioners urges all individuals
in the Bank to maintain consistency and to
enhance the quality of GCG implementation in
all operational aspects, and to incorporate GCG
practices in corporate culture.
13. Community Partnership and Environmental
Development (PkBL)
11. Network
Network expansion needs to be accompanied by
the following strategic steps:
a. Increase coordination between working units
to support target achievements. Coordination
includes the following units:
PKBL fund disbursement should be focused on
environmental-development efforts and not
limited to group disbursement; PKBL programs
should also reach individuals. Fund utilization and
disbursement need to be recorded in accordance
with standard accounting principles to ensure
their accountability.
• Human capital – manning analysis,
formation set-up and formation completion
are conducted under active coordination
with relevant working units.
• Informati
in Extending Services
Continuous
Built Upon Integrity and Cutting Edge Technology
Annual
Report
2014
Innovations
in Extending Services
Continuous
Built Upon Integrity and Cutting Edge Technology
Demonstrates a strong
commitment to support the
development of micro, small,
and medium enterprises
as well as other segments
throughout the country. BRI has
consistently invested in network
expansion and human resources
development to enhance services
quality and human resources
competence.
Aiming to become a
Bank with the best and
sustainable performance
through productive and
efficient network and
human resources to
support the customers’
business growth across
the archipelago.
BRI once again became one of the banks with the best performance in Indonesia.
Total assets grew to Rp801.9 trillion while total loans rose to Rp510.7 trillion with
stable loan quality. Third Party Funds also rose to Rp622.3 trillion, resulted in Loan to
Deposit Ratio (LDR) of 82.06%.
The development and implementation of cutting-edge technologies played an
important role in improving operational efficiency, thus it contributed to net income
of Rp24.3 trillion, representing 13.58% year on year growth. Bank BRI recorded as
one of the SOEs with the largest dividend contribution to the state.
Going forward, BRI is determined to continue to spur its operational performance
and human resources competencies in order to provide the best service to all
customers, support the development of economic potential across the nation, and
achieve sustainable quality growth.
Enhancing
Network Quality through
Measured Investments
In addition to 594 operational units,
comprising branch offices, sub-branch
offices, Cash Offices, BRI Units, and
Teras BRI as well as 47,973 e-channel
networks, BRI continues to develop
the latest banking information
technology applications. To enhance
communications quality, BRI has
initiated the communication satellite
project, BRIsat, which will be managed
by the Bank in the future.
Today, BRI has strengthened
its position as the bank with
the largest network that
consisted of 10,396 outlets,
20,792 ATMs, and 131,204
EDCs spreadout across the
country – all are integrated in
real-time online.
The network has enabled BRI to
significantly increase the volume
of e-banking transactions with
efficiency in order to accommodate
the growing volume of customers’
banking transactions regardless of
their locations, as reflected from
efficiency level ratio in the past
three years and fee-based income
increase from e-banking activities.
*) Bank only
Optimizing Human Resource
Potential through Competency
Building and Sound Integrity
Various training programs that
cover introduction, application, and
development courses were aim to
enhance the employees’ technical and
managerial competencies, including
strengthening employees’ integrity.
In 2014, more than 132 training
curriculums were developed and
implemented, covering 468,062
participants. Total budget spending
amounted to Rp664.6 billion, up by
22.02% from 2013.
In line with its
business expansion
plan, BRI consistently
carries out substantial
HR competency
building through
intensive and focused
training programs.
Indicated by increasing
employees’ productivity
ratio
Consistently Exercising
Sound Management in
Accordance with Good
Corporate Governance
Principles to Maintain
Customers’ Trust
BRI successfully improved total
assets by growing its business
whilst maintaining loan quality,
as reflected by the sound level
of NPL. On funding, BRI’s ability
to nurture customers’ trust is
illustrated by 23.45% deposits
growth, above industry’s
growth.
BRI consistently applies
the basic principles of GCG
across all phases of the
company management,
through aspects of TARIF –
Transparency, Accountability,
Responsibility, Independency,
and Fairness.
Consistently Delivers
Exceptional Performance
Despite Rigorous
Competition and
Challenging Economic
Conditions
The endeavours that BRI
has taken to increase
competitiveness through
network quality improvement
and HR capacity building
have resulted in an improved
operational efficiency and
productivity, which further
reinforced the foundation
to achieve distinguished
performance.
BRI is determined
to strengthen its
operational quality in
order to deliver the
best and sustanaible
performance.
Table of Contents
6
16
18
23
HIGHLIGHTS
Financial Highlights
Event Highlights 2014
Awards and Certifications
30 MANAGEMENT REPORTS
32 Foreword from the President Commissioner
36 Board of Commissioners 2014 Supervisory Duty
Report
44 Board of Commissioners
46 Message from the President Director
58 Board of Directors
60 Statement from Members of the Board of
Commissioners
94
96
110
118
124
126
OPERATIONAL REVIEW
Human Resources
Marketing Aspects
Information Systems and Technology
Operations Centres
Fixed Asset Management and
Procurement of Goods and Services
130 Risk Management
61 Statement from Members of the Board of
Directors
62
64
66
68
70
72
74
76
78
80
81
COMPANy PROFILE
Company Name, Address, and Information
BRI at a Glance
BRI’s Milestone
222 MANAGEMENT DISCUSSION AND ANALySIS
224 General Overview
224 Development of Macro Economic Conditions and
Banking Industry
Vision, Missions and Corporate Values
Banking Products and Services
Network Coverage
Outlets
Organizational Structure
Subsidiaries and Associated Entities
228 Market Share
230 Prospects and Strategy
232 Business Review
234 Micro Business and Programs
246 Retail and Medium Business
256 State-Owned Enterprises (SOEs) and Corporate
Capital Market Supporting Institutions
Business
262 International Business
268 Treasury Business and Capital Market Supporting
Services
82
84
85
86
87
88
92
12
INFORMATION FOR INVESTORS
Stock Highlights
Bond Summary
Share Listing Chronology
Management Stock Option Plan
Composition of Shareholders
276 Financial Review
284 Financial Position
284 Assets Composition
288 Liabilities
290 Equity
290 Capital
293 Cash Flows
294 Financial Ratio
297 Capital Expenditure
298 Other Financial Information
304 Other Material Information
312 Subsidiary
312 PT Bank BRISyariah
314 PT Bank Rakyat Indonesia Agroniaga Tbk
316 BRI Remittance Co.Ltd
Dividend and Dividend Policy
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Table of Contents
318 CORPORATE GOVERNANCE REPORT
320 The Objectives of Corporate Governance
321
322
323
327
330
333
334
337
352
Implementation
GCG Implementation Reference
500
502
506
508
CORPORATE SOCIAL RESPONSIBILITy
Principles and Commitment
Responsibility Towards Environment
Responsibility Towards Employees, Health and
Safety at Work
510 Responsibility Towards the Community
518 Responsibility Towards the Customers
Commitment of GCG Best Practices
GCG Road Map Implementation
GCG Implementation
Assessment of GCG Implementation
Plan of GCG Implementation
GCG Awards
Corporate Governance Policies and Guidelines
Corporate Governance Structures and Mechanisms
353 General Meeting of Shareholders
361 Board of Commissioners
379 Board of Directors
398 Board of Commissioners and Board of Directors’
Relationship
404 Board of Commissioners’ Committees
404 Audit Committee
409 Nomination and Remuneration Committee (NRC)
415 Risk Management Supervisory Committee (RMSC)
422 Board of Directors’ Committees
422 Risk Management Committee (RMC)
425 Credit Policy Committee (CPC)
426 Credit Committee
430 Assets and Liabilities Committee (ALCO)
432 Human Resource Policy Committee
433 Information System and Technology Steering
Committee (ITSC)
435 Project Management Office (PMO) Steering
Committee
437 Job Position Evaluation Committee
438 Corporate Governance Implementation in BRI’s
522
524
528
534
535
535
536
537
539
541
543
544
548
554
CORPORATE INFORMATION
Profiles of the Board of Commissioners
Profiles of the Board of Directors
Profiles of Committees under the Board of
Commissioners
Profiles of Nomination and Remuneration
Committee Members
Profiles of Risk Management Supervisory
Committee Members
Profiles of Corporate Secretary and Head of
Internal Audit
Senior Executives
Office Address
Operating Units
Contact Address
Press Release
Correspondency with OJk and IDX
OJk References
Subsidiary
438 PT Bank BRISyariah
443 PT Bank BRI Agroniaga Tbk
446 Board of Commissioners’ Secretary
447 Corporate Secretary
455
456
461
462
464
476
480
492
Information Access and Corporate Data
Compliance Functions
Risk Management
Internal Control System
Internal Audit
Code of Conduct
Corporate Culture
Other Material Information
573 2014 CONSOLIDATED FINANCIAL
STATEMENTS
577 Independent Auditor Report
579 Consolidated Financial Position Report
583 Consolidated Comprehensive Profit Loss Report
586 Consolidated Equity Changes Report
588 Consolidated Cash Flows Report
590 Notes on Consolidated Financial Statements
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
13
Financial Highlights
year
Financial Highlights
(Rp billion)
2010
2011
2012
2013
2014
Total Assets
404,286
469,899
551,337
626,183
801,955
Total Earning Assets
379,696
432,647
499,042
568,546
728,094
Loans - Gross
252,489
294,515
362,007
448,345
510,697
13,626
8,996
4,316
4,511
4,304
134
165
197
223
252
Total Liabilities
367,612
420,079
486,455
546,856
704,218
Third Party Funds
333,652
384,264
450,166
504,281
622,322
77,364
76,779
79,723
79,337
90,052
- Savings
125,990
154,133
184,717
212,997
236,395
- Time Deposits
Balance Sheets
Government Recap Bonds
Equity in Shares - Net
- Demand Deposits
130,298
153,353
185,726
211,948
295,875
Other Interest Bearing Liabilities
17,297
19,361
15,784
14,873
49,177
Capital/Equity
36,673
49,820
64,882
79,327
97,737
- Wih Government Bonds Interest
44,615
48,164
49,610
59,461
75,122
- Without Government Bonds Interest
43,109
47,053
49,235
59,298
74,876
- With Government Bonds Interest
32,889
34,427
36,484
44,106
51,442
- Without Government Bonds Interest
31,382
33,316
36,109
43,943
51,197
5,545
5,776
8,390
8,348
9,299
(16,114)
(17,086)
(19,491)
(22,381)
(26,660)
(7,917)
(5,533)
(2,700)
(3,946)
(5,719)
14,908
18,756
23,860
27,910
30,859
Net Income for the year
Income attributable to equity holders of parent
entity
Income attributable to non-controlling interests
11,472
15,088
18,687
21,354
24,254
11,472
15,083
18,681
21,344
24,242
Nihil
5
6
10
12
Comprehensive profit and loss
Comprehensive income attributable to equity
holders of parent entity
Comprehensive Income attributable to noncontrolling interests
Earnings per share (Rp)
11,559
15,296
18,661
19,917
24,760
11,559
15,288
18,652
19,913
24,745
Profit/Loss
Interest Income
Net Interest Income:
Other Operating Income
Other Operating Expenses
Provision for Impairment Losses on Financial
Assets
Income Before Tax
Nihil
8
9
3
15
478.36
628.91
757.26
865.22
982.67
Financial Ratio*
Capital
13.91%
14.99%
16.80%
16.97%
18.14%
Earning Assets
Earning Assets and Non Performing Assets to
Total Earning assets and non performing assets
Non performing earning assets
Capital Adequacy Rate
2.19%
1.79%
1.19%
1.06%
1.09%
2.24%
1.85%
1.46%
1.28%
1.26%
Allowance for possible losses to earning assets
4.58%
4.51%
3.43%
2.90%
2.40%
NPL Gross
2.78%
2.30%
1.78%
1.55%
1.69%
Profitability
ROA
4.64%
4.93%
5.15%
5.03%
4.74%
ROE
43.83%
42.49%
38.66%
34.11%
31.22%
NIM
10.77%
9.58%
8.42%
8.55%
8.51%
Operating Expenses to Operating Income
70.86%
66.69%
59.93%
60.58%
65.37%
*) Bank only
14
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Financial Highlights
Financial Highlights
(Rp billion)
year
2010
2011
2012
2013
2014
75.17%
76.20%
79.85%
88.54%
81.68%
- Related Parties
Nil
Nil
Nil
Nil
Nil
- Unrelated parties
Nil
Nil
Nil
Nil
Nil
- Related Parties
Nil
Nil
Nil
Nil
Nil
- Unrelated parties
Nil
Nil
Nil
Nil
Nil
8.05%
9.33%
10.64%
8.02%
8.07%
Liquidity
LDR
Compliance
Violation of Legal Lending Limit
Excess of Legal Lending Limit
Statutory Reserves
Net Open Postion
4.45%
5.49%
3.00%
3.15%
3.86%
The financial figures above represent BRI’s consolidated financial statements with the following subsidiaries for years 2011, 2012, 2013 and 2014: PT
BRISyariah, PT Bank Agroniaga Tbk, BRIngin Remittance Co. Ltd; and only PT BRISyariah for year 2010.
The financial ratio uses Bank data only.
*)Starting in 2004, the Bank took into account the market risk, and operational risk has been taken into account, starting in 2010.
*) Bank only
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
15
Event Highlights 2014
24
February
Launching of Financial Literacy Car (SIMOLEk)
“In collaboration with OJK, BRI operates 20 units of SIMOLEK to support
OJK’s efforts to raise financial literacy of the public”
March
BRI signed MOU with Board Members of
Nahdlatul Ulama (PBNU)
19
“BRI is ready to serve 80 million of NU followers”
20
March
BRI E-Hospital Cooperation with
Fatmawati Hospital
“BRI implemented E-Hospital program to serve the hospital and its
customers”
March
Quarter I 2014 BRI Analyst Meeting and
Press Conference
23
“Publication of BRI financial performance for the Q1 2014”
24
March
E-Filling Program Cooperation between
BRI and DG Tax
“BRI collaborated with the Directorate General of Tax on tax reporting of
113 thousand BRI employees using e-filling system”
March
BRI signed MOU with the
Ministry of Public Housing
25
“BRI and the Ministry of Public Housing cooperated in disbursing Funds
Assistance for Housing (Bantuan Stimulan Perumahan Swadaya/BSPS)”
16
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Event Highlights 2014
26
March
Annual General Meeting of
Shareholders (AGMS) of BRI 2014
April
BRI Satellite (BRISAT) Procurement
Contract Signing
28
“Contract signing between PT Bank Rakyat Indonesia (Persero) Tbk Space
Systems/Loral, Llc and Arianespace regarding the BRI Satellite Program”
7
June
Teras BRI Nusantara Participated
in Jakarta Great Sale Festival
“Teras BRI Nusantara brought its best customers to Jakarta’s shopping
centers. As many as 68 MSME customers participated in the Jakarta Great
Sale Festival”
June
BRI Launched E-Ticketing in Collaboration
with BNI and Mandiri
16
“BRI synergized with Bank Mandiri, BNI, and PT KAI Commuter
Jabodetabek (KCJ) and launched the prepaid card payment system.”
17
June
Inauguration of BRI Lampung Regional Office
“BRI inaugurated its 19th regional office, BRI Lampung Regional Office”
July
BRI Issued Electronic Member Card (kartu
Tanda Anggota/kTA) for Indonesian
National Police (POLRI)
1
“BRI innovated and developed KTA POLRI with multiple functions as ATM
and electronic money (BRIZZI)”
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
17
Event Highlights 2014
10
July
Extraordinary General Meeting of
Shareholders (EGMS) BRI 2014
“Agenda: Changes of the Bank’s management composition”
July
BRI Peduli Program, Breakfasting with
Orphaned Children
17
“BRI Peduli program organized a breakfasting event
with the President and 3,500 orphaned children”
21
July
BRI Peduli Distributed Basic Food
“BRI distributed basic food in 15 poor areas in Jakarta”
July
BRI Homecoming Program
24
“BRI provides 125 free buses for the homecoming of 6,000 customers
under the “Ngebuzz Bareng BRI” program”
14
August
BRI Participate in the Non-Cash
National Movement
“BRI supports Non-Cash National Movement (GNTT) and signs
memorandum of understanding concerning integration of Electronic Data
Capture (EDC) with Bank BNI and Mandiri”
August
Indonesia Banking Expo (IBEX)
14
“BRI presents Hybrid Lounge and BRI Satellite in IBEX 2014”
10
November
keel Laying of Floating Teras BRI
“BRI commenced the construction of Floating TerasBRI and will be the first
bank in Indonesia to provide services on a vessel”
18
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Event Highlights 2014
August
Independence Day Run
31
“BRI supports the largest running competition event in Indonesia,
Independence Day Run in celebration of the 69th Indonesian
independence”
September
BRI Participates in the National
Customer Day
4
“BRI celebrates the National Customer Day with events at various Branch
Offices”
September
Launch of BRI Micro Insurance – Accident, Health,
and Life
10
“BRI launched Micro Insurance – Accident, Health, and Life in cooperation
with PT Bringin Jiwa Sejahtera, Asuransi Bringin Sejahtera Artamakmur, and
PT AJ Jiwasraya”
October
Quarter III 2014 BRI Analyst Meeting
and Press Conference
22
“Publication of BRI financial performance for Q3 2014”
October
Inauguration of BRI’s Regional Office
Building Jakarta 3
27
“Inauguration of BRI’s Regional Office Building of Jakarta 3 in Bumi
Serpong Damai”
October
BRI Supports Indocomtech Exhibition
2014
29
“BRI participated in this largest gadget and IT exhibition, Indocomtech,
themed Digital Lifestyle”
12
December
Launching of BRIlink
“BRI launched BRILink, an agent banking system support the Financial
Inclusion program”
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
19
Awards and Certifications
External parties recognized the outstanding performance of
BRI in 2014. BRI received over 30 international and national
awards, covering:
International Awards
• Category:
- The Most Valuable
Banking Brand 2014
- The Most Valuable
Banking Brand 2011
• Organizer:
Brand Finance PLC
The 153rd Most • Date:
Valuable Banking
10 February 2014
Brand in 2014
“The World’s
Largest Public
Companies”
• Category:
- Asia’s Best Companies 2014
- Asia’s Best Companies 2013
- Asia’s Best Companies 2010
• Organizer:
Finance Asia
• Date:
5 June 2014
• 4th Best Investor Relations
• 5th Best Managed Company
• 6th Best Corporate Governance
AsiaMoney Best
Banks
The Bankers Awards 2014
• Category:
- Bank Of The year Indonesia 2014
- Bank Of The Year Indonesia 2011
• Organizer:
The Banker
• Date:
21 October 2014
20
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
• Category:
- The World’s Largest
Public Companies 2014
- The World’s Largest Public
Companies 2012
• Organizer:
Forbes Magazine
• Date:
19 August 2014
• Category:
- Best Domestic Bank in
Indonesia 2014
- Best Domestic Bank in
Indonesia 2008
• Organizer:
AsiaMoney
• Date:
26 September 2014
Awards and Certifications
National Awards
Overall Winner
Annual Report Award
2013
• Category:
Financial SOE - Listed
• Organizer:
KNKG,IDX,BI,OJK, DG Tax,
BUMN,IAI
• Date:
16 October 2014
Best Listed Finance
Company and
Insurance Sector 2014
• Event:
MNC Business Award 2014
• Organizer:
MNC Business
• Date:
9 June 2014
Corporate Governance
Conference and Award
• Category:
Best Financial Sector
• Organizer:
IICD ( Indonesia Institute
Corporate Directorship )
• Date:
30 October 2014
Top Performing
Listed Company
2014
• Event:
Investor Award 2014
• Category:
Market Capitalization over Rp10 Trillion
• Organizer:
Investor Magazine
• Date:
8 May 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
21
Awards and Certifications
Awards
Category:
- 1st Winner - Children’s Savings Account : BRI JUNIO
- 2nd Winner- Deposits Account
- 2nd Winner- Savings Account : BritAma
- 3rd Winner- Mobile Banking : BRI Mobile
- 3rd Winner- Call BRI - Call Center
- 3rd Winner- Internet Banking BRI
• Organizer:
Marketing Magazine
• Date:
6 February 2014
TOP Brand Award
in Recognition of
Outstanding Achievement in
Building the Top Brand
Bank Loyalty Award 2014
• Category:
Credit Card, Conventional Banking
• Organizer:
Infobank and Mark Plus Insight Indonesian
• Date:
26 February 2014
• Category:
Saving Account, Conventional Banking (Asset > 100 T)
• Organizer:
Infobank and Mark Plus Insight Indonesian
• Date:
26 February 2014
• Event:
Most Admired Companies
• Organizer:
Warta Ekonomi
• Date:
29 April 2014
Indonesia Most Admired
Companies 2014
22
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
• Category:
River Clean-Up Community Service
with the Most Participants
• Organizer:
Indonesian World-Records
Museum (MURI)
• Date:
25 May 2014
MURI
Awards and Certifications
Investor Best Bank 2014
• Event:
Service Quality Award
• Organizer:
SQ
• Date:
5 June 2014
• Event:
Investor Best Bank
• Category:
Commercial Bank above Rp100 Trillion
• Organizer:
Investor Magazine
• Date:
10 June 2014
“Priority Banking” 2014
Indonesia Property &
Bank Award 2014
• Category:
Commercial Bank with the Best
Performance
• Organizer:
Property & Bank
• Date:
20 June 2014
Green CEO Award 2014
• Category:
Best Green CEO 2014 for
Sofyan Basir
• Organizer:
Warta Ekonomi
• Date:
26 June 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
23
Awards and Certifications
Social Business Innovation Award 2014
• Category:
State Owned (Best
Sustainable Business
Innovation Company
In Developing Coffee
Farmer Programme )
• Organizer:
Warta Ekonomi
• Date:
26 June 2014
Indonesia Best Brand Award
• Category:
Product “Bank” 4 consecutive
years (2011 – 2014 )
• Organizer:
SWA Magazine & MARS
• Date:
17 September 2014
Infobank Award 2014
• Category:
Bank Rated “Very
Good” for Financial
Performance of
2013
24
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
• Organizer:
Infobank
• Date:
18 July 2014
Awards and Certifications
• Category:
Exemplary Tribute II
- Small Enterprises: Gold Rating
- Community Education: Gold Rating,
- Community Health: Gold Rating,
- Nature and Environmental Preservation: Gold Rating,
- Social Aid and Mitigation of Social Welfare Issues: Gold Rating
- Public Facilities and Infrastructure Development: Gold Rating
• Organizer:
PKBL BUMN
• Date:
25 September 2014
PkBL BUMN
• Category:
Saving Account
• Organizer:
Marketers
• Date:
22 October 2014
Indonesia Most Favorite Women and
youth Brand 2014
Indonesia Banking
Awards 2014
Category:
Bank of the year 2014
- Category BUKU 4 with Core Capital 30 T,First
Place
- Finance Value Creation, First Place.
- Finance Efficiency profit, First Place.
- CSR, First Place.
- Corporate Communication, First Place.
- GCG, Second Place.
- Risk Management, Second Place.
- Human Capital,Second Place.
- Marketing,Second Place.
- IT, Second Place.
• Organizer:
Economic Review
• Date:
18 November 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
25
Awards and Certifications
Economic Challengers
Awards 2014
• Category:
Financial Institution Industry
• Organizer:
Metro TV
• Date:
24 November 2014
Brand Activation
Award 2014
Investor Award 2014
• Category:
The Best Running Activation 2014
• Organizer:
Indonesia Most Experiential
• Date:
27 November 2014
• Category:
Best SOE 2014 in Financial
Industry, Banking Sector
• Organizer:
Investor Magazine
• Date:
10 December 2014
• Category:
The Best Companies 2014
• Organizer:
Kehati dan SWA
• Date:
11 December 2014
The Best Companies 2014
26
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Awards and Certifications
Certifications
ISO 9001:2008
• BRI’s Financial Statements obtained the ISO 9001:2008 certificates, which covered the
Process of Preparing Financial Statements. Certification and audit conducted by SGS
(Societe Generale de Surveillance). The certificate is valid for 3 (three years), effective
as of 9 December 2014 until 9 December 2017.
ISO 9001:2008
• BRI Operations Centre Division received the ISO 9001:2008 certificate, which
covered 7 (seven) areas:Operations Banking System for RTGS, Clearing, Remittance,
Card Production, Complaint Resolutions, Transaction Reconciliations, and ATM
Reconciliations. This certification is expected to boost transaction processes quality in
BRI, and eventually resulted in customer satisfaction improvement.
ISO 9001 : 2008
• BRI’s Contact Centre Service (LCC) operates with management system that conforms
with ISO 9001:2008 standard. The certification was conducted by Verification New
Zealand Limitedon 5 December 2011 and valid until 5 December 2014.
ISO 9001 : 2008
• BRI’s Internal Audit has carried out audit function based on Quality Management
System that complies with ISO 9001:2008 standard – in terms of audit quality,
operations, and managerial aspects. The certification was initially started in 2003 and
renewed every 3 years. Last re-certification was conducted by PT SGS Indonesia and
effective as of 24 October 2014 with 3-year validity.
ISO 9001 : 2008
• Goods and Services Procurement Division has received the ISO 9001:2008 certificate
from the Certification Agency PT Lloyd’s Register Indonesia (LQRA), covering
inventory, distribution, and administration areas. This certification has received
national and international acknowledged from National Accreditation Committee
(KAN) and United Kingdom Accreditation Services (UKAS) Management System.
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
27
Management
Reports
Enhancing Human
Resources qualities
and strengthening
information technology
as well as networks
to deliver better
performance and to
become the foundation
of future business
development.
30 MANAGEMENT REPORTS
32 Foreword from the President Commissioner
36 Report on the Supervisory Duties of the Board of
44
46
58
60
Commissioners in 2014
Board of Commissioners
President Director’s Report
Board of Directors
Statement from Members of the Board of
Commissioners and the Board of Directors
MANAGEMENT REPORTS
MANAGEMENT DISCUSSION AND ANALYSIS
OPERATIONAL REVIEW
INFORMATION FOR INVESTOR
COMPANY PROFILE
Message from the President Commissioner
COMPANY INFORMATION
CORPORATE SOCIAL RESPONSIBILITY
CORPORATE GOVERNANCE
BRI consistently showed strong
performance throughout 2014,
as evidenced by growth across
consolidated financial ratio
indicators – total assets grew by
28.07% (year-on-year), total loan
by 13.91%, third party funds by
23.41% and net interest income
by 16.63%, while profit after tax
reached Rp 24.2 trillion and nonperforming loans stood at around
1.78%. These achievements were
successfully made as a result of
reliable human capital, IT and
network expansion carried out by
the Bank.
FINANCIAL REPORT
Bunasor Sanim
President Commissioner
and Independent Commissioner
30
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Message from the President Commissioner
Assalamualaikum Wr. Wb.
Esteemed shareholders, members of the Board of Commissioners and Board of
Directors, all employees of the Bank and stakeholders,
Praises to Allah the Most High, the One and Only, for the blessings and grace bestowed,
which have allowed the Bank to achieve an excellent performance in 2014.
In overall, global economic conditions experienced slowdown in 2014. The Indonesian
economy in particular was largely unfavorable, as indicated by, among other things,
tight liquidity that triggered intensed competition in the banking sector, especially in
generating third-party funds.
Amid these conditions, throughout 2014 BRI was able to deliver strong performance
growth as evidenced by financial ratio indicators – total assets grew by 28.07% (year-onyear), total loan grew by 13.91%, third-party funds by 23.41% and net interest income
by 16.63%. Meanwhile, profit after tax reached Rp 24.2 trillion and non-performing
loans stood at 1.78%.
These achievements were reached as a result of reliable human capital, IT and the Bank’s
office expansion. BRI opened 594 offices consisting of eight Branch Offices, 19 Subbranch Offices, 149 BRI Units, 21 Cash Offices and 396 Teras BRI units, while e-channel
services increased by 47,973 units. With these new additions, BRI constantly enhances
the services it extends to customers in order to become “The Biggest Payment Bank in
Indonesia”, ready to reach and serve customers across different market segments from
Sabang to Merauke.
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
31
MANAGEMENT REPORTS
INFORMATION FOR INVESTOR
COMPANY PROFILE
Message from the President Commissioner
The year 2015 brings fresh challenges for BRI. The new government has been formed
and the ASEAN Economic Community (AEC) is to be implemented. In 2015, the Bank
has defined its destination statement to become “The Biggest National Payment Bank”
supported by e-channel optimization, e-banking and IT technology reliability, higher
human-capital productivity and a focus on low-cost funds.
MANAGEMENT DISCUSSION AND ANALYSIS
OPERATIONAL REVIEW
To respond the new administration program, BRI’s loan disbursement will be in line with
the government’s programs in energy, food and infrastructure sectors, while maintaining
BRI’s core business in the MSME segment and practicing prudential banking. In view of
the dynamic and competitive nature of the business as well as the Bank’s legal status as
a listed company, the Board of Commissioners expects the utmost commitment of all
employees anywhere Indonesia in carrying out their responsibilities in order to realize the
destination statement.
FINANCIAL REPORT
COMPANY INFORMATION
CORPORATE SOCIAL RESPONSIBILITY
CORPORATE GOVERNANCE
The Board of Commissioners consistently endeavors to improve the quality of its
supervision duty implementation and to work in harmony with the Board of Directors
as stipulated by the Bank’s Articles of Association as well as prevailing regulations. In
addition, the Board of Commissioners expects that, in performing their duties and
functions, all employees will strongly abide by the Code of Conduct and corporate
culture values.
32
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Message from the President Commissioner
The Board of Commissioners thanks and appreciates the Board of Directors and all
employees for the dedication they showed in achieving 2014 company’s performance.
We would like to sincerely thank Mrs. Aviliani, member of the Board of Commissioners,
and Mr. Sofyan Basir, Mr. Sarwono Sudarto and Mrs. Lenny Sugihat, members of the
Board of Directors, who concluded their service to the Bank in 2014. May the guidance
and protection of Allah the Most High, the One and Only, always accompany them in
their new undertakings. We thank the government as the Bank’s shareholder, customers,
business partners, all stakeholders and the public at large for their trust and support. As
I am about to reach the end of my service as the Bank’s President Commissioner, allow
me to apologize for any shortcomings during my time in office.
I pray that Allah the Most High, the One and Only, shall always guide all individuals
in BRI. We believe that PT Bank Rakyat Indonesia (Persero) Tbk will continue to deliver
better and stronger results in many years to come.
Aamiin.
Wassalamualaikum Wr. Wb.
Bunasor Sanim
President Commissioner
and Independent Commissioner
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
33
MANAGEMENT REPORTS
INFORMATION FOR INVESTOR
COMPANY PROFILE
Board of Commissioners 2014 Supervisory Duty Report
MANAGEMENT DISCUSSION AND ANALYSIS
OPERATIONAL REVIEW
The Board of Commissioners of PT Bank Rakyat
Indonesia (Persero) Tbk performs its supervisory
and advisory duties to the Board of Directors in
good faith, responsibly and with prudence – all
for the best interest of the Bank. The Board of
Commissioners carries out its duties and functions
independently, adhering to the Bank’s Articles of
Association, prevailing laws and regulations and
the principles of good governance. The Board of
Commissioners oversees operational policies and
management of the Bank carried out by the Board
of Directors; the Board of Commissioners advises
the Board of Directors and ensures that it complies
with the Bank’s Articles of Association as well as
other prevailing laws and regulations.
CORPORATE GOVERNANCE
The supervisory and advisory functions of the
BOCs are carried out to support the interest
of the company and to ensure that BODs has
conducted its duties and responsibilities inline with
the company’s aims and objectives, in order to
assure that the company is well managed for the
benefit of stakeholders. In optimizing its duties,
BOC has supporting committees namely the Audit
Committee, Risk Management Oversight Committee
and Remuneration & Nomination Committee.
CORPORATE SOCIAL RESPONSIBILITY
As a Board, the Board of Commissioners has all
the necessary core competences. To maintain
objectivity and independence, the Board Of
Commissioners is not involved in any of the Bank’s
operational decision-making, with the exception of
fund provision to related parties and other matters
specified and stipulated by the Bank’s Articles of
Association and prevailing laws and regulations.
THE COMPANy’S PERFORMANCE
EVALUATION AND SUPERVISORy IN 2014
The Board of Commissioners expressed their
appreciation for the BOD success in overcoming
challenges in 2014. The Board of Directors has laid
a strong foundation that will propel the Bank’s
business in the future. As we know, economic
slowdown which occurred in the middle of 2014
happened as a result of the uncertainties in the
global economic condition. The slowdown in GDP
growth of several main trade partners, a decrease
in the global commodity prices, tapering off issue in
the US economic as well as internal situation such
as widening current account deficit, depreciation
of Rupiah currency, and an increase in inflation
rate have contributed to tight liquidity situation in
the banking industry which accompanied by the
pressure from an increase in cost of fund.
Nevertheless, throughout 2014, the Board of
Directors was able to deliver significant performance
growth. Net profit reached Rp 24.2 trillion and
consolidated assets stood at Rp 801.9 trillion.
Further, other important indicators also showed
substantial improvements – loans grew by 13.91%
year-on-year and fee-based income reached Rp
6.1 trillion, or grew 24.89% higher year-on-year.
The Company also booked strong financial ratios*;
return on equity stood at 31.22%, return on assets
reached 4.74% and the operating expense to
operating income (BOPO) ratio achieved 65.37%.
Spurred by business-development initiatives, the
Board of Directors was also able to maintain asset
quality – gross NPL stood at 1.78% and net NPL
at 0.39%. The Board of Directors has been able to
maintain liquidity by maintaining primary reserves
in rupiah and foreign currency at around 8%, while
LDR reached 82.06%.
FINANCIAL REPORT
COMPANY INFORMATION
Even tough achieving business growth target
is considered as vital, it is more important to
ensure that the growth is sustainable. The Board
of Commissioners has strived to perform strict
supervisory of micro financial and macro external
parameters as a form of early warning system.
*) Financial ratio figures are Bank only data
34
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Board of Commissioners 2014 Supervisory Duty Report
1. RISk PROFILE
Throughout 2014, BRI’s business risks were
mitigated by comprehensive risk-management
implementation. Risk management is embedded
across all levels of the organization so that all
individuals in BRI may continuously apply a riskmanagement culture in their day-to-day activities.
c. The Bank’s management practices consistently
adhere to prevailing laws and regulations
as well as sound corporate principles, as
evidenced by the regular reports from the
Bank to regulators and other authorities as
stated in the prevailing regulations.
An increase in the complexity of its business
activities and network, BRI requires a highly and
effective risk-management implementation so
that current and future potential risks need to be
identified. The effectiveness of risk management
at the Bank is reflected composite risk level that
shows low to moderate category (score 2), with
low risk levels for market and compliance risks
and low to moderate level for credit, liquidity,
operational, legal, strategic and reputation risks.
d. The Bank’s management is carried out
professionally without conflicts of interest or
influence or pressure from any other parties
that contradict prevailing laws and regulations
or the principles of a healthy corporation. All
employees of the Bank are committed to work
professionally without conflicts of interest,
independent from influence or pressure from
any party.
2. GOOD CORPORATE GOVERNANCE (GCG)
The Bank implements corporate governance
based on the five principles of transparency,
accountability, responsibility, independence
and fairness. In practice, the five principles are
implemented as follows:
a. Transparency in decision-making processes
and disclosure of materials and relevant
corporate information, among others reflected
in the publication of quarterly Financial
Statements and updates of share ownership
of the Board of Commissioners and Board
of Directors presented in the Bank’s annual
report.
e. The Bank fairly and equally meets
stakeholders’ rights that arise from
agreements and prevailing laws and
regulations. This is evidenced by performancedriven rewards and objective punishments
that the Bank implements for stakeholders.
The Bank also provides equal treatment to all
customers.
The Board of Commissioners believes that
in overall, the Bank applied Good Corporate
Governance (GCG) principles in all aspects of
its activities. The Bank achieved a composite
score of (1.14) for GCG self-assessment. This
score improved from the composite score in the
preceding year (1.29).
b. The responsibilities and duties of the Bank’s
management are clearly defined; therefore the
Bank’s management is carried out accountably
in an efficient and effective manner. This
is reflected from clear responsibilities
attached to each part of the organizational
structure, a fair and objective employee
recruitment system and a performance-based
remuneration system for management and
employees.
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
35
MANAGEMENT REPORTS
INFORMATION FOR INVESTOR
COMPANY PROFILE
Board of Commissioners 2014 Supervisory Duty Report
3. PROFITABILITy
4. CAPITAL
MANAGEMENT DISCUSSION AND ANALYSIS
OPERATIONAL REVIEW
In 2014, BOC viewed that
BOD has successfully and
aptly implemented strategies
that the Bank had defined. In
numbers, the Bank delivered
net profit of Rp 24.2 trillion,
which represented 13.58%
growth from the previous year.
The net profit achievement
was supported by the ability to
maintain NIM at 8.51%
CORPORATE GOVERNANCE
The Board of Directors also
delivered strong financial ratios,
such as return on equity (ROE)
that stood at 31.22% and return
on assets (ROA) that stood at
4.74%. Indeed, compared with
the preceding period, the ROE
and ROA ratios decreased; in
the earlier period, ROE and ROA
stood at 34.11% and 5.03%,
respectively. The decrease was
due to the high cost of funds,
which contributed to the
increase in interest expenses
then finally affected returns
negatively.
FINANCIAL REPORT
COMPANY INFORMATION
CORPORATE SOCIAL RESPONSIBILITY
Efficiency levels which
represented by BOPO and
CER ratios, each at 65.37%
and 43.10%, higher than the
preceding period, when they
stood at 60.58% and 42.13%,
respectively.
In general, in the view of Board
of Commissioners viewed that,
the Board of Directors has
effectively carried out capital
management in a way that
consistent with the Bank’s
characteristics, business scale
and business complexity. The
Board of Directors was able to
maintain the Bank’s capital level
above the minimum requirement
from Bank Indonesia. At the end
of 2014, the Capital Adequacy
Ratio (CAR) of the Bank stood at
18.14%.
PERFORMANCE EVALUATION
OF COMMITTEES UNDER THE
BOARD OF COMMISSIONERS
In 2014, committees under
the Board of Commissioners
– the Audit Committee, Risk
Management Supervisory
Committee and Remuneration &
Nomination Committee –performed
their duties and responsibilities
well. The committees provided
significant and positive support to
the supervisory duty of the Board
of Commissioners.
The Audit Committee ensured
the adequacy of internal control,
including the financial reporting
process. The Audit Committee
also reviewed the effectiveness
and compliance of audit activities
performed by Public Accounting
Office and reviewed Financial
Statements as well as other
financial information to assess
their consistency with prevailing
standards and regulations.
*) Financial ratio figures are Bank only data
36
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
In terms of risk management,
BRI’s quality is inseparable from
the successful coordination of the
Risk Management Supervisory
Committee with the Compliance
Directorate in carrying out their
duties to review and monitor riskmanagement practices in BRI. The
“Low to Moderate” risk profile,
healthy loan portfolio and low
percentage of non-performing
loans in 2014 represented the real
results of strong risk-management
synergy.
The Nomination and Remuneration
Committee also rendered an
important contribution in terms
of remuneration policy for the
Board of Commissioners, Board
of Directors, Executive Offices and
employees. The Nomination and
Remuneration Committee offered
constructive suggestions and input
on systems and procedures to
appoint and/or replace members of
Board of Commissioners, Board of
Directors and independent parties.
The Board of Commissioners
deeply appreciates the work of
the committees; the Board of
Commissioners expects that the
performance of the committees
will always improve and that
the committees can build strong
synergy with relevant units in order
to provide greater contributions
to BRI and the Indonesian banking
sector overall.
Board of Commissioners 2014 Supervisory Duty Report
SUPERVISORy ACTIVITIES
AND RECOMMENDATIONS
In performing supervisory duties,
the Board of Commissioners:
1. Convened Board of
Commissioners meetings at least
once every week.
2. Convened Board of Directors
and Board of Commissioners
meetings at least once every
month.
3. Conducted scheduled visits to
operational areas of BRI across
Indonesia.
4. Organized meetings between
the Board of Commissioners and
related divisions and working
units.
5. Discussed with the Board of
Directors and related working
units regarding important
matters, in order to arrive at
solutions immediately.
Based on the meetings and visits,
the Board of Commissioners
recommends the following:
1. Lending
The Board of Commissioners
recommends in putting
a consistent emphasis on
prudential banking principles
with respect to loan
disbursement, to improve
internal control quality and to
effectively implement credit-risk
mitigation.
In view of the Bank’s vision and
mission as the “Leading Bank
for Micro, Small and Medium
Enterprises”, the Board of
Commissioners also reminds
the Bank to maintain its focus
on loan disbursement for the
MSME segment.
The Board of Commissioners
supports the Board of Directors’
goal to boost loan expansion
through a trickle-down
business strategy. In addition,
in the credit consultation
forum organized for the
loan disbursement of certain
amounts to certain debtors, the
Board of Commissioners actively
provided advice and input to the
Board of Directors.
funding programs that the Bank
establishes, so that the credit
expansion and liquidity targets
of the Bank can be met.
3. Income and Expenses
The Board of Commissioners
recommends that the Bank
boost non-interest income, for
instance through e-banking
activities, trade finance,
remittance, cash management
and others, by leveraging
BRI working units located
across Indonesia. In terms
of expenses, the Board of
Commissioners always provides
recommendations to the Bank
to increase efficiency.
4. Capital
2. Funding
The Board of Commissioners
always recommends that the
Bank increase the composition
of low-cost funds in order to
provide competitive interest
rates to customers as part of the
Bank’s strategy to stay ahead
of the market. In 2015, the
Bank needs to achieve thirdparty fund targets consistently
throughout the year by carrying
out effective monitoring of
The Board of Commissioners
recommends optimizing the
Bank’s capital growth through
increase of retained earnings.
Efforts to boost sources of
funding and working capital,
e.g. the issuance of securities
in the form of MTN and bonds,
need to be based on thorough
analysis, to formulate terms and
conditions that will benefit the
Bank and to be carried out in
accordance with prevailing laws
and regulations.
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
ANNUAL REPORT 2014
37
MANAGEMENT REPORTS
INFORMATION FOR INVESTOR
COMPANY PROFILE
Board of Commissioners 2014 Supervisory Duty Report
5. Human Capital
6. Information Technology
MANAGEMENT DISCUSSION AND ANALYSIS
OPERATIONAL REVIEW
Human capital plays an important role in the
company to the Bank. For that reason, the
Board of Commissioners put attention in the the
Bank’s human-capital management. Throughout
2014, the Board of Commissioners provided
recommendations to the management on
human-capital management, for example the
importance of developing human capital and
manpower planning in an integrated manner
with the corporate plan, business plan and work
and budget plan
In addition, the fulfillment of human capital
has to maintain its focus on competence and
leadership quality. The Bank should enhance
the quality of education, training, development
and mentorship by senior employees as well as
internalizing and implementing corporate culture
to support business growth.
7. Risk Management
Risks increase as the Bank’s office network
expands, number of employees rises and more
products are innovated. To mitigate risks, steps
are needed to strengthen risk-management
infrastructure and internal control systems.
8. Internal Control
The Board of Commissioners recommends
improving the quality of internal control, among
others in terms of:
a. Increasing embedded monitoring in
operational processes in each working unit.
b. Optimizing the role and function of risk
management in all working units.
c. Enhancing the quality of internal control by
carrying out risk-based audit of operational
processes in all working units, improving the
quality of internal auditors and improving IT
auditing.
d. Increasing monitoring by working unit
managers of follow-ups to findings from
internal and external auditing within working
units.
FINANCIAL REPORT
COMPANY INFORMATION
CORPORATE SOCIAL RESPONSIBILITY
CORPORATE GOVERNANCE
The Board of Commissioners appreciates the
steps that have been taken to achieve the ideal
balance in the composition of business and
supporting employees. The role of IT has to be
enhanced, so as to support the Bank’s human
capital in carrying out business operations.
In addition, the Board of Commissioners
supports a human-capital management
strategy that elevates the function of frontline staff as the spearhead in achieving fund
targets and e-channel utilization. The Board
of Commissioners also regularly monitors the
readiness of human-capital management with
respect to the Bank’s plan to operate a satellite.
IT is critical to enhance efficiency and customer
service. Therefore, the Board of Commissioners
suggests that IT development be focused on
improving network reliability. The Board of
Commissioners recommends that the Board
of Directors optimize the use of IT to bolster
the accuracy, speed and quality of the Bank’s
operations.
38
ANNUAL REPORT 2014
PT BANk RAkyAT INDONESIA (PERSERO) Tbk.
Board of Commissioners 2014 Supervisory Duty Report
9. Investment
Investments in subsidiaries have to be preceded
by thorough and comprehensive analysis based
on prudential principles and in accordance with
prevailing regulations. Investment also needs to
take into account the development strategy of
subsidiaries; it has to be synergetic and mutually
beneficial, with monitoring of the subsidiary’s
business-plan implementation.
10. Capital Expenditure
Capital-expenditure planning is aligned with
project planning, business development planning
and human-capital readiness. In addition, capital
expenditure needs to be optimized to enable
improvement of customer service.
b. Evaluation of new branch-office opening
should be aligned with branchless banking
policy; which need further cooperation with
third parties as agents.
c. Optimization of the use of ATM and e-channel
features by socializing and educating
customers to drive fee-based income growth.
12. Good Corporate Governance (GCG)
The Board of Commissioners urges all individuals
in the Bank to maintain consistency and to
enhance the quality of GCG implementation in
all operational aspects, and to incorporate GCG
practices in corporate culture.
13. Community Partnership and Environmental
Development (PkBL)
11. Network
Network expansion needs to be accompanied by
the following strategic steps:
a. Increase coordination between working units
to support target achievements. Coordination
includes the following units:
PKBL fund disbursement should be focused on
environmental-development efforts and not
limited to group disbursement; PKBL programs
should also reach individuals. Fund utilization and
disbursement need to be recorded in accordance
with standard accounting principles to ensure
their accountability.
• Human capital – manning analysis,
formation set-up and formation completion
are conducted under active coordination
with relevant working units.
• Informati