Jakarta, 25 October 2021 -- The conditions in the 3rd quarter of 2021 are very dynamic, where there is a spike in positive cases of Covid-19 which peaked in July 2021. This condition was also followed by the implementation of restrictions on community activities (PPKM) based on level, starting from level 1 to level 4, depending on each area conditions.
This condition is a challenge for banks, including BNI, considering efforts to grow performance and recover from pressure from the impact of the Covid-19 pandemic. Through this opportunity, BNI also appreciates all the government's efforts and the cohesiveness of all elements of the nation in restraining the spread of Covid-19, so that now the spread of the virus can be relatively controlled and economic activity begins to gradually recover.
The achievement of BNI's performance in the 3rd quarter of 2021 is a positive result of the disciplined efforts of management and all BNI personnel who always work together to accelerate digital transformation and also face the negative impacts of PPKM in the context of controlling the Covid-19 pandemic.
Until the 3rd Quarter of 2021, BNI managed to record a net profit growth of 73.9% year on year, from Rp. 4.3 trillion in the 3rd Quarter of 2020 to Rp.7.7 trillion in the 3rd Quarter of 2021. Fee Based Income and Net Interest Income were respectively at 16.8% and 17.6% YoY.
This achievement is also the result of BNI's digital transformation, one of which is aimed at strengthening capabilities in transactional banking. BNI recorded a very healthy low-cost fund raising performance, one of the factors supporting solid credit, where the composition of low-cost funds or CASA reaches 69.7% of the total Third Party Funds (DPK) or the highest in the last 10 years.
CASA grew 8% YoY, from Rp 431.3 trillion in Q3 – 2020, to Rp 465.7 trillion in Q3 – 2021. CASA dominated TPF which also grew 1.4% YoY from Rp 659.52 trillion in QQ 3 – 2020 to Rp 668.55 trillion in Quarter 3 – 2021. The CASA growth has an impact on saving interest expense by 10 basis points from the previous quarter.
Operating Income before Reserves (PPOP) grew 21.0% YoY which was achieved by the existence of a strong low-cost funding structure, which contributed to the recovery of Net Interest Margin (NIM) of 50 basis points YoY. Net Interest Income (NII) increased 17.6% YoY, from Rp 24.39 trillion from Q3 – 2020 to Rp 28.70 trillion in Q3 – 2021. This NII growth is the effect of BNI's credit distribution which is still growing 3.7% YoY, i.e. from Rp 550.07 trillion in Q3 – 2020, to Rp 570.64 trillion in Q3 – 2021.
The Company also recorded strong Non Interest Income growth of 14.2% YoY, from Rp 8.94 trillion in Q3 – 2020, to Rp 10.21 trillion in Q3 2021. This Non-Interest Income growth stemmed from an increase in the performance of the company's important FBI sources, such as Debit Card and Account Maintenance which grew 5.8% YoY from Rp 1.81 trillion in Quarter 3 - 2020 to Rp 1.92 trillion in Quarter 3 - 2021; then ATM and e-channel service revenues grew 12.4% YoY from Rp 1.01 trillion in Q3 – 2020, to Rp 1.14 trillion in Q3 – 2021; as well as FBI's Trade Finance service which increased 19.8% YoY from Rp 901 billion in Q3 – 2020, to Rp. 1.08 trillion in Q3 – 2021; and commission income from Marketable Securities which grew 54.4% YoY from Rp 1.04 trillion in Q3 – 2020, to Rp 1.59 trillion in Q3 – 2021.
Corporate Transformation Agenda
In Quarter 3 – 2021, BNI will continue to focus on strengthening its capital so that BNI has a strong capital structure to support business expansion. In September 2021, BNI successfully issued $600 million perpetual bonds with 2.7 times oversubscribed (above the amount offered) which can be categorized as additional main core capital for BNI. This issuance is the first done by banks in Indonesia.
With the issuance of the AT-1, BNI's core capital increased by 140 basis points so that BNI's CAR and Tier 1 ratios as of September 2021 increased to 19.9% and 17.8%, respectively, already approaching the ratios of other competing banks.
Credit Expansion on Top–Tier Debtors
With business capacity as reflected by stronger capital conditions, we continue to focus on corporate business development by providing One Stop Wholesale Banking Solutions for top tier companies in their business fields including supply chain financing and consumer business. This move continues to show positive results. During Quarter 3 – 2021, at least 6 top tier companies have joined BNI financing ecosystem. One of them is the largest producer in the integrated petrochemical industry in Indonesia, namely Chandra Asri.
Growth in BNI's corporate segment has also begun to be seen where the growth in the ratio of low-cost funds to loans and growth in fee-based income to total revenue from the corporate segment also continues to increase. This is a result of BNI's efforts to improve investment banking service capabilities. One of the latest ones, BNI has been able to provide consulting services for companies that want to get additional capital from the issuance of Reg-S/144A type global bonds (Regulation S and Rule 144A securities), namely global bonds that allow issuers to get conveniences, such as being free from the provisions of being registered in the Securities Act of 1933 and being able to be traded outside the United States.
Help SMEs to Export
In addition to Top-Tier companies, BNI also pays serious attention to strengthening Small and Medium Enterprises (SMEs). Apart from distributing KUR, BNI also launched BNI Xpora, which offers comprehensive solutions for SMEs who want to develop overseas markets. Through BNI Xpora, BNI provides business consulting, helps open global market access, and provides payment solutions. Several attractive financial products are also prepared, ranging from discounts on L/C issuance, convenience when applying for loans through digital portals (can be completed in 6 days), to providing collection and remittance services.
Even though it has just been launched in Jakarta, Bandung, Solo, Surabaya, Denpasar, Medan, Makassar, BNI Xpora has also started to produce results. In the last 3 months, BNI Xpora has disbursed loans to exporting SMEs of up to IDR 1 trillion, including for SMEs that export agricultural products, fisheries, wood, handicrafts, and textile products. At the same time, BNI strengthens cooperation with third parties who have export capacity and conduct global business, including e-commerce, Trade Associations, to BKPM.
Support for exports is also strengthened through overseas branches in 6 world financial centers, in Singapore, Seoul, Tokyo, Hong Kong, London, and New York. This branch office helps export SMEs to reach potential buyers, either through exhibitions, or through business matching, some of the exporting SMEs that we facilitate even get their first buyers from abroad through business matching that has been carried out at our Overseas Branch in Hong Kong and Seoul.
Updates related to BNI Digital Transformation
BNI's Digital Transformation will focus on three areas, First, digitizing the company's business platform. Second, developing digital products. Third, strengthening digital ecosystem with API Open Banking, where currently BNI is a bank that excels in developing API Open Banking with more than 283 types of services, and has been used by more than 4,000 clients.
Strengthening of digital capabilities is also carried out by collaborating with partners, including through cooperation in the Pay Later business, where BNI is an early adopter of this service in Indonesia through collaboration with several fintech and e-commerce, including Traveloka and Shopee. In addition to Pay Later business, since mid-September 2021, BNI has expanded its collaboration with Traveloka through the launch of the first Pay Later Virtual Card in Indonesia, which can be used by Traveloka Pay Later users to transact outside the Traveloka ecosystem, as well as being used within the Traveloka ecosystem itself. For BNI, this business collaboration is a digital-based source of fee-based income.
In addition to developing cooperation with e-commerce partners, we continue to optimize BNI Mobile Banking. As of September 2021, BNI Mobile Banking users have reached 9.9 million people with a growth of 46.6% YoY. In addition to the significant increase in the number of users, the transaction value through BNI Mobile Banking has also reached Rp 447 trillion or an increase of 33.4% YoY. In the future, BNI Mobile Banking features will continue to be improved with Omni Channel Experience, Personal Financial Management, and integrated MSME solution features.
Digital transformation is indeed one of BNI's main strategies to be able to serve customers better and to achieve the Company's goal of having sustainable and profitable performance in the long term.
In addition to digitizing existing business processes, BNI also has plans to explore options for developing digital banks. BNI believes that having a digital bank subsidiary will bring BNI to a higher level of banking services.
For more information, please contact:
BNI Corporate Secretary