PT Bank Permata Tbk – Company Profile

Company Profile

  1Q14 Results

Disclaimer: This report has been prepared by PT Bank Permata Tbk independently and is circulated for the purpose of general information only. It is not intended to the specific

person who may receive this report. The information in this report has been obtained from sources which we deem reliable. No warranty (expressed or implied) is made to the

accuracy or completeness of the information. All opinions and estimations included in this report constitute our judgment as of this date and are subject to change without prior notice.

We disclaim any responsibility or liability without prior notice of PT Bank Permata Tbk and/or their respective employees and/or agents whatsoever arising which may be brought

against or suffered by any person as a result of acting in reliance upon the whole or any part of the contents of this report and neither PT Bank Permata Tbk and/or its affiliated

companies and/or their respective employees and/or agents accepts liability for any errors, omissions, negligent or otherwise, in this report and any inaccuracy herein or omission

here from which might otherwise arise.

Background

Major Shareholders Year Established 1955 Listing at the Bourse Since 1990 at the Jakarta Stock Exchange and Surabaya Stock Exchange

  § A major conglomerate with one of the (both merged and now known as the largest market caps in Indonesia Indonesian Stock Exchange (BEI)

  § Six business lines in >170 companies Asset Rp 167 tn (consolidated)

  § Strong reputation in Corporate Governance Branches • 302 conventional and CSR

• 16 Sharia • 20 mobile branches

  ATMs 915 and additional access to >50,000 ATMs* Shareholders • PT Astra International Tbk (44.56%)

• Standard Chartered Bank (44.56%)
• Public 10.88%

  § An international Bank with global experience

  § Innovative banking products & services Corporate Rating Id AA+ (Pefindo) AAA(idn) (Fitch)

  § Strong reputation in risk management Sub Debt Rating Id AA (Pefindo)

Permata Today – Key facts and figures Extensive Branch Network Business

  Service Excellence

• 318 branches (including 16 Sharia)
• Leveraging well-recognized cultur
• Full service Consumer and
• 276 Sharia Office Channeling

  Service Excellence Commercial segment.

• Branch coverage in 60 cities
• Various Awards & Accolades
• Large presence in SME and a
• Optimizing & expanding network

  Service Quality – notably, Best Call

rapidly growing sharia banking

  Center Award for 9th consecutive year business.

  Comprehensive Delivery Key Facts _th Astra International and

• 7 largest bank in Indonesia

  Channels Standard Chartered Bank as

• 915 proprietary ATMs • Total Assets of ~USD 15 bn

  Unique Shareholders

• Access to over 50,000 joint ATMs
• ~7,700 permanent s>Unique market positioning
• Best Mobile Banking in Asia Pac>Various Synergy opportunities (Asian Banker Award 2011)
• Best practice tran
• Extensive internet banking

  Corporate Rating id AA+ / Stable outlook Subordinated Bonds id AA

  National Long Term Rating AAA(idn) / Stable outlook

  Bank Financial Strength Rating (BFSR) D / Stable outlook Baseline Credit Assessment (BCA) Ba2 Adjusted Baseline Credit Assessment (ABCA) Ba1 Long-/Short-term Foreign Currency Deposits Baa3 / Prime-3 / Stable outlook Long-/Short-term Global Local Currency Baa3 / Prime-3 / Stable outlook

  Rating Agencies Rating/outlook Rating Agencies Rating / Outlook Ratings

Pefindo Rating (October 2013)

Fitch Ratings (November 2013)

Moody’s Investor Services (May 2013)

  Financial Highlights § Loans including Sharia financing up 20% yoy Rp. 121 tn.

  § Deposits including Sharia funding up 16% yoy to Rp. 129 tn.

  Balance Sheet § Gross and Net NPL ratios improved to 1.0% and 0.3% from 1.3% and 0.4%, respectively, a year prior.

Growth

  § Consolidated total asset up 21% yoy to Rp. 167 tn, currently the seventh largest Bank in Indonesia § Net Interest Income up 7% yoy to Rp. 1.3 tn.

  Improving § Fee Based Income up 11% yoy to Rp. 372 bn.

  § Profitability § Pre-Provision Operating Profit up 11% to Rp. 618 bn. § Net Profit After Tax up 3% yoy to Rp. 367 bn.

  § CAR registered at 14.5% with tier-1 CAR of 9.8% (Bank only). § Shareholders’ equity grew 25% yoy to Rp. 16.0 trillion at end-March 2014, driven by

  Well Capitalized Rights Issue in early 2014.

Income Statement Highlights

  1Q14

  1Q13

  IDR bn Δ YoY

  7% 1,200 Net Interest Income 1,284

  11% Other Operating Income 334 372

  8% 1,534 Total Revenue 1,656

  6% Operating expenses 978 1,039

  11% Pre Provision Operating Profit 557 618

  62% Provision Expense 94 152

  1% 463 Operating Profit 466

  116% Non Operating Income

  14

  30 4% 477 Profit Before Tax

  495 3% Net Profit After Tax

  356 367

Balance Sheet Highlights

  Total Assets Loans (gross) Deposits CASA Time Deposits Sharia Subordinated Debt Senior Bond Equity

  IDR bn Δ YoY

  Source: Permatabank Published Report - consolidated

  1Q13

  1Q14

  138,090 100,684 111,626 39,531 62,415 9,679 5,898 12,839 167,325 121,077 129,161 42,520 75,673 10,968 6,921 1,362 16,035 21% 20% 16% 8% 21% 13% 17% 100% 25%

Key Ratios

  % Δ YoY

  1Q14

  1Q13 (bps)

  (83) Net Interest Margin

  4.2

  3.4 LDR 89.9 357

  93.5 16.2 (173) CAR

  14.5 (19) ROA

  1.4

  1.2 ROE 13.2 (234)

  10.9 1.3 (28) NPL - Gross

  1.0 (10) NPL - Net

  0.4

  0.3 Source: Permatabank Published Report – Bank

Good Profitability

  Net Profit Remains on the Upside

  Net Profit (IDR Bn) Return on Asset (ROA) (%)

  1Q14 367

  1Q14 1.2% 2013 1,726 2013 1.5% 2012

  1,368 2012 1.7% 1,157

  1.7% 2011 2011 2010 1,011 2010

  2.0%

  Net Interest Margin (NIM) (%) Return on Equity (ROE) (%)

  1Q14 3.4%

  1Q14 10.9% 2013 4.2% 2013

  15.7% 2012 5.0% 2012

  17.5% 5.1% 2011 15.9% 2011 2010

  5.3% 2010 22.8%

Sustainable Balance Sheet Growth Balanced growth on Both Assets and Liabilities Sides

  Total Asset (IDR Bn) Loans (IDR Bn)

  1Q14 167,325

  1Q14 121,077 2013

  165,834 2013 118,830 2012

  131,799 2012 94,425 101,324

  69,263 2011 2011 73,851 2010 2010 52,840

  Deposits (IDR Bn)

  129,161

  1Q14 2013 132,765 2012

  104,740 82,636 2011 2010 59,385 Source: Permatabank Published Report – Consolidated

Optimalization of Intermediation Function

  IDR 79%

  FCY 21%

  Loan Breakdown by Economic Sectors (%) Loan Breakdown by Currencies (%)

  Personal Loans for mortgages, vehicles and others 21%

  

Manufacturing

24%

Wholesale & Retail Trading

  21% Real Estate, Leasing & Corporate Services

  8% Mining & Excavation 4%

  Transportation, Warehouse & Communication 7%

  Construction 4% Financial Brokerage

  3% Agriculture 3% Others

  5%

  Loan Diversification to Various Sectors Source: Permatabank Published Report – Consolidated

Healthy Asset Quality and Strong Capitalization

  NPL Gross and Net Keep Decreasing Whilst CAR on the Upside NPL (%)

  Capital Adequacy Ratio (CAR) (%)

  2.7%

  1Q14 14.5% 2.0% 2013 14.3% 1.4% 1.0% 1.0% 2012

  15.9% 0.7% 0.6% 0.4% 0.3% 0.3% 14.1% 2011 2010 2011 2012 2013

  1Q14 2010 14.1% Gross NPL Net NPL

  Loan Based on Collectibility (%)

  94.9% 4.1% 1.0%

  Source: Permatabank Published Report – Bank

PermataBank in Brief

  ♦ PermataBank was created by a merger of 5 banks in 2002 with Bank Bali and Bank Universal being the biggest and together accounting for roughly 80% + of the new institution. All five banks had been taken over by the government and the new institution was 100% owned by GOI. “Permata” was named by the then lady President, Ibu Megawati, and Permata in Bahasa means “jewel”.

  ♦ In October 2004, Standard Chartered Bank along with Astra International formed a consortium that took over a 51% stake in the Bank. They added further to that stake in December 2005 and then finally in October 2006 the Government fully divested and the consortium increased its stake to 89%.

  Brief History ♦ PermataBank is a leading privately-owned national bank in Indonesia, seventh largest in the industry in terms of assets. ♦ PermataBank’s focus is very much on the Bank’s strengths as well as Indonesia’s historical strengths being the consumer and commercial segments.

♦ We provide a full range of innovative products and services which we continue to add to.

  Current position PermataBank is well positioned in a rapidly changing and challenging market.

  Some of the key points regarding this are: ♦ Huge population of Indonesia.

  ♦ Member of G20 since 2009 – currently 16th largest GDP in the world ♦ Solid, high economic growth in Indonesia is likely to continue

♦ Interesting demographics - Rising middle class continue to support growth in consumption

♦ Consistently strong loan growth due to low credit penetration as percentage of GDP ♦ Improving political climate ♦ The Banking sector is still very much open to growth opportunities.

  Environment

Current Ownership History

  44.56% 44.56%

  Consortium 89% PermataBank formed from 5 legacy banks PT Bank Bali Tbk PT Bank Prima Express PT Bank Patriot PT Bank Universal Tbk PT Bank Artamedia

  Public 10.88%

Milestones

  § GEFI integration §

  §

  Established as a private Bank in Indonesia under the name “PT Bank Persatuan Dagang Indonesia”.

  §

  IDR 700bn 10-yr bullet subordinated MTN issuance. SCB acted as the sole buyer.

  § IDR 2tn Rights Issue.

  Consortium increased share ownership to 89.03%.

  § Completed acquisition of PT

  GE Finance Indonesia

  2009 2011 §

  IDR 1.75tn 7-yr Subordinated Debt II issuance to public.

  For first time reached Rp. 100tn in total assets.

  § Launching of Permata

  2013 §

  IDR 2tn Rights Issue and IDR 2.5tn Bonds Program to strengthen capital.

  2012 § IDR 1.5tn Rights Issue VI.

  §

  IDR 1.368tn Senior Bonds and IDR 860bn Sub-Debt issuance to public

  § Announced intent to

  acquire 25% of PT Astra Sedaya Finance

  2014 §

  Seventh largest bank in terms of asset

  § Network footprint reaches >300 branches in 60 cities nationwide

  Priority, an enhancement of Permata Kencana.

  ♦

As a leading private bank in Indonesia, PermataBank provides comprehensive and innovative products and services,

especially in the area of high-tech delivery channels including Internet Banking and Mobile Banking.

  ♦

PermataBank is uniquely positioned in the Indonesian Banking industry, as the only Bank with Astra International and

Standard Chartered Bank as its strategic shareholders, providing unparalleled opportunity for various synergy initiatives.

  Post Merger Integration, asset restructuring, new Brand socialization, branch and human resource rationalization & product harmonization programs.

  1957 1971 1990 2010

  §

  IPO on JSX & SSX

  §

  Changed name to PT Bank Bali

  1999

2006

§ Merged with Bank

  Universal, Bank Patriot, Bank Prima Express & Bank Artamedia to became PermataBank.

  §

  Indonesian Banks Restructuring Agency (IBRA), recapitalized the Bank and became the majority shareholder with 59.25% ownership

  2002 §

  §

  §

  Open system banking platform deployment.

  2003 2004 §

  Reverse stock split

  §

  GOI divestment of 52% shareholding to Standard Chartered Bank & Astra International consortium. By EOY, share ownership increased to 63.1%.

  § Consortium

  increased share ownership to 89.01%.

  §

  10NC5 Subordinated Debt I Offering to General Public for

  IDR 500bn

  USD 100mn 12NC7 subordinated MTN issuance through private placement. Astra & SCB acted as principal buyers.

Two Majority Shareholders: A Perfect Combination

General Public

  44.56% 44.56% 10.88%

  

The strong combination of our two majority shareholders, Astra International as a large-scale Indonesian

company with extensive experience in the domestic market and Standard Chartered Bank as a well-

respected international bank with market leading expertise and global experience, has become one of

our core strengths and placed us in a unique position.

• One of Indonesia’s largest Conglomerate with
• Leading international banking group
• Worldwide network footprint in ~70 countries,

  six business lines

• Employs >185,000 people in >170 companies
• Nationwide network reach
• Local Insights • Vast Business Synergies • Best practices

  predominantly in Asia, Africa and the Middle East.

• Deep local experience
• Knowledge in innovative products & services
• Best practices in banking including risk, finance and compliance.

What We Stand for

  Exemplary corporate governance and ethical standard in conducting our business.

  Caring Innovation Responsiveness Excellence

  Partnership

  Vision

  Delivering superior performance and return while developing a sustainable franchise.

  Values Menjadikan hidup lebih bernilai Adding value to life

  Brand Promise Pelopor dalam memberikan solusi finansial yang inovatif To be the leader in delivering innovative financial solutions

Customer Focus

One Bank

Performance Delivery

  Putting customers at the heart of our service Approach

  Working together as one winning team and adopting the mindset of ‘One Bank’ in delivering the best outcome for our customers

  Continuously improving the way we work, delivering flawless execution and promoting a high performance culture through reward and recognition.

  Commitment to Stakeholders

Customers

Our People

Communities

Shareholders

Regulators

  Committed to exceed customers’ expectation.

  Investing in our people and enabling them to learn and grow to make a difference.

  Responsible and committed community member. Seek opportunities to support community development.

  Core Strengths

  Majority Shareholders with High Reputation Providing Vast Synergy Opportunities Extensive Branch Network and Comprehensive Delivery Channel with e- Channel Capabilities as Strong Differentiator Various Products and Services Coupled with Service Excellence Strong Risk Management

Leveraging Our Core Strengths PermataBank has four core strengths which we believe give us a unique and sustainable competitive

  

advantage in the Indonesian Banking Industry

♦ PermataBank has an extensive branch network and is continuously optimizing, expanding and leveraging through investments, which will strengthen its advantage in payments and distribution capabilities.

  Extensive Branch ♦ By expanding its branch footprint, PermataBank is introducing its unique Banking services to more regional cities and more Network and customers across Indonesia.

  Comprehensive This enhanced Branch Network is supported with the latest banking technology and gives the Bank wider accessibility to its ♦ Delivery Channels customers.

  ♦ PermataBank has developed tremendous capabilities through its ATMs, Electronic Data capture (EDC) and mobile banking, hence strengthened the Bank's competitive positioning in the industry.

  PermataBank provides customers with a complete suite of innovative products and services to meet their needs.

  ♦ Various Products ♦ PermataBank is well recognized in the market for its culture of service excellence, which has been developed and leveraged and Services and over time.

  

Service Excellence ♦ External recognitions for service excellence including first position among all industries at CSSL’s Annual Call Center Award for

Service Excellence for outstanding service quality.

  ♦ PermataBank continuously build its capabilities in the areas of risk management The Bank’s Risk Management Framework (“RMF”) sets out the Bank’s approach to risk management and the control

  ♦ Strong Risk framework within which risks are managed and risk-return tradeoffs are made.

  Management ♦ PermataBank has applied a comprehensive risk management information system capable of identifying, measuring, monitoring and controlling risks of the Bank.

  ♦ PermataBank has full unwavering support from its strategic shareholders: Standard Chartered Bank and Astra International. ♦ With Standard Chartered Bank, PermataBank clearly has a true international bank that provides an international network,

  Unique Main international experience and know how, access to innovative products and services, systems, best practice across many Shareholders disciplines and experienced bankers.

  With Astra, PermataBank has a dominant Indonesian corporate that brings true local insight and understanding to doing ♦ business in Indonesia. In addition, there are various synergy opportunities with Astra International.

Risk Management – The Foundation of Growth

  Risk Management Framework:

• All risk taking must be transparent, controlled and reported
• PermataBank has identified 19 risk categories to be managed. These risk categories are managed through the Risk Management Framework which is described as follows:

Strong Focus on Corporate Governance PermataBank’s corporate governance is intended to bring about corporate fairness, transparency and accountability

  ♦

Evaluate the consistency between risk

management policies and the implementation of policies.

  Remuneration & Nomination Committee

  

Committees under the Board of Commissioners

Committees under the Board of Directors

  Audit Committee

• Performs evaluation and provide
• Review the level of adequacy and

  effectiveness of internal control mechanisms.

  recommendations to the BOC on remuneration policies and program to ensure competitiveness, long-term business success, shareholder interest and a strong pay-for-performance link

• Review the adequacy of measures taken

  ♦

Perform monitoring and evaluation of

the performance of duties by the Risk

Management Committee and Risk Management Unit, to be recommended to the BOC.
• Review the quality of the internal audit function.
• Assess the quality of the external auditor’s

  performance Risk Monitoring Committee

  by management to follow-up recommendations made by the internal and external auditors.

• Preparing for and providing to the BOC

  recommendations on systems and procedures for selecting members of BOD and BOC to be proposed at GMS.

  Credit Policy Committee

  Fraud Oversight Committee Human Resources and Pension Committee Risk Management Committee Credit Committee

  IT Steering Committee Assets Liabilities Committee

This governance structure enhances the implementation of duties & responsibilities of the BOC and BOD

Board of Commissioners Cheng Teck Lim 1)

  Previously served as Managing Director at Bank BNI, Bank Mandiri and SEVP at Bank Dagang Negara. He currently serves as the Director at LPPI and Senior Administrator in ISEI and IBI.

  An experienced international banker with over 20 years in various senior management positions. .

  Neeraj Swaroop /Commissioner/

  Currently serves as the Group Strategy Director, Jardine Matheson Holdings and Director of Jardine Matheson Limited, Dairy Farm, Hong kong Land, Mandarin Oriental and Commissioner of PT. Astra International Tbk.

  Mark Spencer Greenberg /Commissioner/

  Joined PT. Astra International Tbk in 1981, served as Director of PT. Astra International Tbk since 2001. He currently serves as Commissioner and Director of various companies under the Astra International group.

  Gunawan Geniusahardja 2) /Deputy President Commissioner/

  /President Commissioner/

  Joined Standard Chartered Bank in 1989 and has since held a variety of strategic roles within Standard Chartered Group. Currently serves as Executive Vice Chairman and Chief Executive Officer of Standard Chartered Bank China.

  Today serves as a lecturer at the Faculty of Economics & Business and Director of the Center for Economic & Public Policy at Gadjah Mada University (UGM).

  Previously served as the Independent Comissioner of Bank Mandiri, Chief Economist of Bank BNI.and member of Information Committee at Lembaga Penjamin Simpanan.

  A. Tony Prasetiantono /Independent Commissioner/

  Started his career in 1986 at the First interstate Bank in California, joined SCB in 1993 and has since held various senior positions in the field of trading and derivatives.

  David Allen Worth /Independent Commissioner/

  Joined the National Planning Agency (Bappenas) since 1987 and has held various positions in the agency before appointed as the Deputy Minister of Bappenas.

  Lukita Dinarsyah Tuwo /Independent Commissioner/

  I. Supomo /Independent Commissioner/

Board of Directors 1) 2) Roy Arman Arfandy

  Sandeep Kumar Jain /Vice President Director/

  /Finance Director/

  Previously served as the Wholesale Banking Director in A senior international banker with 25 years of experience in

  PermataBank. Having banking experience for more than 19 many global strategic roles in Finance. Previously served as years including at Bank DBS Indonesia, Bank Mizuho, Bank the Regional CFO of Europe and America at SCB. Dai-chi Kangyo Indonesia, BDNI and Bank Danamon.

  Mirah Wiryoatmodjo Michael A. Coye

  /Compliance Director/ /Risk Director/

  More than 22 years of experience in financial industry More than 30 years of experience in various senior including banking especially in the areas of operations, management positions at financial institutions including SCB risk and compliance. Previously served as Compliance and Citibank. Previously served as the Chief Risk Officer of Director at Citibank NA Indonesia.

  SCB Taiwan.

  Indri Koesindrijastoeti Hidayat Tjioe Mei Tjuen

  /HR Director/ /Technology and Operations Director/

  Extensive experience in human resource management from Over 30 years of experience in technology and operations, past work experience including as the HR Director of PT. gained in wide-ranging senior appointments especially in the

  Rajawali Corporation. She also held various positions at Indonesia banking industry. Previously served as Director of

  IBM Indonesia, Freeport Indonesia, Keramika Indonesia Operations at Bank Ekonomi Raharja. Association, Citibank and Dexa Medica.

  Bianto Surodjo Achmad Kusna Permana

  /Retail Banking Director/ /Sharia Banking Director/

  Previously served as Head, Wealth Management, Retail Previously served as the Head of Sharia Banking in

  Liabilities Product & E-Channel. Extensive experience in PermataBank. More than 20 years of experience in various banking from past work experience including in the ABN management positions in the banking industry including at

  Amro Bank NV, Bank International Indonesia and Bank Bank Bali, HSBC Indonesia and Bank Danamon. Barclays Indonesia

Implementation of Good Corporate Governance

• Members of the BOC & BOD are very competence in their respective areas, as well as have the integrity and very good reputation. Oversight/ monitoring function, performed both directly and through the Committees.
• The infrastructure and soft –structure are comprehensive and fully complimented with competence and independent of the Committee members to enable effective execution of duties.
• The Appointment of Compliance Director • Independency of Compliance and Internal Audit • PermataBank has operated a comprehensive risk management system and is able to identify, measure, monitor & control Bank risks.
• PermataBank continuously considers capacity of capital and distribution/ diversification of portfolio
• Business Plan has been prepared in realistic manner, comprehensive and measurable conditions and with consideration to the prudential principle.
• Timely & accurate disclosure is made in material matters regarding the corporation, including the financial condition, performance, ownership, and govern
• The BOC & BOD are highly committed to continuously enforce GCG practices in line the highest standards as reference for optimal governance and compliance.
• The Committees under the BOC & BOD have actively provided input or recommendation to support the performance of duties & responsibilities of the BOC&BOD
• Appointment of Public Accountant by GMS is based on Audit Committee’s recommendation with the purpose of providing assurance to all stakeholders that Financial Statement has fairly represented the financial condition and performance of PermataBank.
• Robust Internal control system through implementation of three layers of assurance.
• PermataBank persistently adheres to the prudential principle and risk management practices in providing funds, particularly lending to related parties and large exposures.
• The Business Plan had been approved by the BOC and communicated to the shareholders through the AGMS.
• Information disseminated to the public through publication of the Financial Report, Annual Report, web site, submission of corporate action through the Capital Market Supervisory Agency & Stock Exchange

  Implementation of duties & responsibilities by BOC & BOD Completeness and implementation of the duties of Committees

  Performance of Compliance, Internal & External Auditor Function

  Provision of Funds to Related Party & Large Exposure Strategic Plan

  Transparency in financial & non financial conditions Implementation of Risk

  Management including Internal Control System

Good Corporate Governance : Acknowledgements

  The result of Self Assessment on GCG implementation 2013

Bank Indonesia

  based on BI Regulation Composite Score : 2 Composite Predicate : Good Company with category “Trusted” 2013 Company with category “Trusted” 2007 Top 50 Listed Companies with the Highest Score for Corporate Governance Based on Asean Corporate Governance Scorecard Year 2014 The Best Corporate Governance 2013 category Best Equitable Treatment of Shareholders The Best Corporate Governance 2012 category Best Shareholders’ Rights

Ministry of Finance

  Overall winner & 1st Place Winner – Listed Private Financial Republic Indonesia category – Annual Report Award 2008