Jakarta, 29 January 2021 -- The Covid-19 pandemic has caused many challenges for the business world in Indonesia almost throughout 2020. However, developments that occurred during the fourth quarter of 2020 show that the economy is starting to show recovery, although the signs of the end of the Covid-19 pandemic are not yet clear.
Since the end of 2020 until now, the government has continued to carry out a policy of strictly limiting social activities to control the spread of Covid-19 cases, while accelerating the vaccination program for public which is targeted to be completed by the end of 2021.
PT Bank Negara Indonesia (Persero), Tbk or BNI continues to adapt in the midst of recovery from the Covid-19 Pandemic and continues to strive to grow the business, especially in the last quarter of 2020, with a focus on strengthening the Company's fundamentals. The results are quite satisfying. With the transformation program carried out, we are sure that BNI's performance in 2021 will be much better than in 2020.
BNI can manage the returns on the assets that generate the Company's revenue very well, which is of course supported by loans disbursed in 2020 of amounting to Rp 586.2 trillion or a growth of 5.3% YoY. In addition, in the fourth quarter of 2020 the Company also made efforts to optimize the composition of assets and liabilities, so that the management of the Company's funds could be more effective.
In 2020, the Company will be able to maintain the NIM at the level of 4.5% through an effective cost fund management strategy. BNI recorded the cost of funds which continued to improve every quarter, especially in the fourth quarter of 2020 which was at the level of 2.0% or an improvement of 60 basis points from the previous quarter, so that the cost of funds at the end of 2020 fell to 2.6% from 3.2% in 2019.
Meanwhile, in the midst of challenging economic conditions, the Company was able to realize non-interest income or fee based income of IDR 11.9 trillion or grew 4.5% compared to the same period in 2019, and was able to make operational costs efficiency which only grew 2.2% YoY. These two things were the main targets of the Company during the pandemic period to reduce the pressure on interest income which fell by 4.0% YoY in the context of providing a stimulus for credit restructuring to debtors affected by the pandemic, as well as contributing to the achievement of profit growth before fees and taxes (PPOP) of IDR 27.8 trillion at the end of 2020.
The PPOP provision adds room for BNI to cultivate adequate reserves in the face of future economic challenges and also provides the strength to minimize the volatility of the Company's profits. Where in 2020, BNI recorded a net profit of Rp. 3.3 trillion accompanied by a coverage ratio at a level of 182.4%, higher than in 2019 which amounted to 133.5%.
Net Interest Income can still grow thanks to lending in the midst of the pandemic, while ensuring that the Company's intermediary function continues. BNI credit is distributed to the corporate segment, small business segment, and payroll loans from the consumer business segment which has low risk.
In December 2020, lending in the corporate segment increased by 7.4% YoY to Rp 309.7 trillion. Meanwhile, credit growth to small business segment was sustained by 12.3% YoY to Rp 84.8 trillion. Likewise, consumer credit still grew 4.7% YoY to Rp 89.9 trillion at the end of last year. Credit growth for small segment was mainly channeled through People's Business Credit (KUR) program, while consumer loans were mostly channeled in the form of housing loans and payroll loans.
Lending is supported by the accumulation of Third Party Funds (TPF). At the end of 2020, TPF grew 10.6% YoY to Rp 679.5 trillion. The Company's strategy to continue to focus on increasing low-cost funds is reflected in the CASA ratio at the end of December 2020 which was at the level of 68.4% or an increase of 160 bps YoY. The Company's efforts to increase CASA have succeeded in reducing the cost of third party funds. The positive impact of this reduction in the cost of third party funds was passed on by the Bank to customers in the form of a reduction in loan interest rates.
Credit Restructuring Program
BNI is one of the banks that actively supports the government's efforts to reduce the impact of the Covid-19 Pandemic, from credit restructuring to the National Economic Recovery (PEN) program. BNI has booked a restructured loan with Covid-19 stimulus of amounting to Rp 102.4 trillion or 18.6% of the total loan. Where based on the business segment, credit restructuring was given to Corporate segment of amounting to Rp 44.2 trillion,
Medium segment Rp 21 trillion, Small segment Rp 28 trillion, and Rp 9.2 trillion for Consumer segment.
Most of the debtors who received the loan restructuring facility came from manufacturing sector 27.0% or around Rp 27.6 trillion; trade, restaurants and hotels sector amounted to 15.4% or around Rp 15.8 trillion; and agricultural sector at 12.6% or around Rp. 12.9 trillion. These three sectors have been hardest hit by the pandemic and constitute 55% of total loans restructured due to Covid-19.
For the restructuring scheme, the Company uses several scenarios which include rescheduling of principal, postponing interest payments, and lowering interest rates. Business actors need time to recover from the impact of the Covid-19 pandemic. Without credit restructuring, entrepreneurs will certainly find it difficult to support their capital. BNI hopes that debtors who have taken advantage of this restructuring will survive.
In addition to supporting the Credit Restructuring program to reduce the impact of Covid-19, BNI also together with HIMBARA Banks and several Regional Development Banks (BPD) played an active role in the PEN program in 2020. Accumulated Placement of Government Funds in the framework of PEN at 2 stages at BNI was amounting to Rp 7.5 trillion.
From the lending target in the framework of PEN, BNI has realized credit disbursement of Rp 28 trillion, or equivalent to 3.7 times the PEN fund, above the target of Rp 22.5 trillion. BNI's focus on channeling loans to the MSME segment was Rp. 24.26 trillion or 86.64% of total lending in the framework of the PEN program.
In 2021, BNI will move forward with more optimism, after going through tough challenges during the early days of the Covid-19 pandemic. For this reason, BNI has rolled out BNI Transformation which officially began on 27 January 2021.
The transformation steps prepared by BNI will ensure that the Company will continue to be able to grow in a sustainable manner. Management has set a strategy to make BNI a financial institution that excels in services and performance in a sustainable manner.
During a pandemic like this time, where business in general is declining, BNI took the initiative to carry out a transformation as an effort to accelerate the improvement of financial performance in a sustainable manner, as well as perfecting BNI's long-term plans. The BNI Transformation Program is based on the BNI RACE values, namely Risk Culture, Agile, Collaboration, and Execution Oriented.
With the BNI RACE values that are implemented daily, BNI can compete with competitors, prepare to go faster, lead the competition, and win.
For more information, please contact:
BNI Corporate Secretary