Jakarta, 26 January 2022 -- PT Bank Negara Indonesia (Persero) Tbk or BNI managed to make a positive jump in performance recovery in the financial year 2021. The net profit in 2021 was recorded at Rp. 10.89 trillion, growing 232.2% year on year (yoy), or three times the profit of 202.
BNI's President Director, Mr. Royke Tumilaar said that BNI’s performance in 2021 was very encouraging where the net profit was able to exceed market expectations. The achievement of this net profit was generated from Operating Income Before Reserves (PPOP) which grew strongly by 14.8% yoy to reach Rp 31.06 trillion.
This achievement is even the highest BNI has ever produced, higher than operating income before the pandemic. In addition, the efforts to improve credit quality through monitoring, handling and effective policies made the cost of credit improve to 3.3%.
The increase in bank operating income resulted from healthy credit growth of 5.3% yoy to Rp 582.44 trillion; Strong Net Interest Margin (NIM) at 4.7%; and commission-based income (FBI) which at the end of 2021 recorded a growth of 12.8% yoy. BNI believes that there is still room to continue to grow in the future. “We closed 2021 with a threefold increase in net profit from our 2020 results and we believe it has been above market expectations. We also fully understand that there is room for further improvement in the future," he said.
Royke continued that the main driver of credit during 2021 was distribution in the Business Banking sector, especially financing to the Private Corporate segment which grew 7.6% yoy to Rp 180.4 trillion; the Large Commercial segment which grew 10.4% yoy to Rp 40.9 trillion; the small segment also grew 12.9% yoy with a credit value of Rp 95.8 trillion. Overall credit in the Business Banking sector grew 4.5% yoy to Rp 482.4 trillion.
Meanwhile in the consumer sector, the largest credit growth was payroll credit, which rose 18.3% yoy to Rp 35.8 trillion; then mortgages grew 7.7% yoy to Rp 49.6 trillion. Overall consumer loans grew 10.1% yoy to Rp 99 trillion.
BNI’s Finance Director Novita Widya Anggraini explained that the role of non-interest income is also getting stronger in 2021. The FBI at the end of 2021 grew 12.8% yoy to Rp 13.64 trillion. The FBI in 2021 was supported by Consumer Fees and Business Banking Fees which grew by 6.0% and 10.7% yoy, respectively, marking a strong recovery compared to the previous year.
Credit growth was supported by Third Party Funds (DPK) which reached Rp 729.17 trillion or grew 15.5% yoy, and brought BNI to a very sufficient liquidity situation and far exceeded last year's credit growth.
The collection of these deposits strengthened in the fourth quarter of 2021, even though deposit interest rates continued to decline. The provision of these deposits makes BNI have a strong liquidity reserve and is ready to be used if credit demand increases or the bond market changes for the better in 2022.
“Low-cost funds or BNI CASA also still dominate DPK, which is maintained at the level of 69.4% of all DPK. The CASA increased by 17.1% yoy to Rp 506.06 trillion. The growth of these low-cost funds will encourage the improvement of the Cost of Fund from 2.6% at the end of 2020 to 1.6% in 2021," he added.
Champion API Open Banking
On this occasion, BNI’s IT & Operations Director, YB Hariantono said last year was a period of proof for BNI in expanding its digital business, one of BNI's Product Champions is API Open Banking. BNI Open API is recorded to have 443 types of services, which is the highest number among peer banks. BNI Open API also has more than 4,000 partners.
In addition to the Open API, BNI has an integrated transaction service solution for business and institutional customers, including MSMEs, namely BNIDirect. BNIDirect services include payment management, collection management, liquidity management, audit and reporting, to Bank Guarantee services and export-import such as L/C and trade.
Due to its reliability, BNIDirect is also used by digital clients such as e-commerce and fintech. BNIDirect's total digital clients have reached 321, an increase from the previous year's 198 clients. The total BNIDirect transactions throughout 2021 have reached 494.3 million transactions with a growth of 115.3% yoy, with a transaction value of Rp. 4,615 trillion, an increase of 14.2% yoy. “The next product champion for BNI digital services is BNI Mobile Banking. Its users have crossed 10.81 million with a growth of 38.9% yoy. The transaction value has reached 615 trillion, up 31.9% yoy with the number of transactions in the full year of 434 million, up 43.4% yoy," he said.
Positive Green Segment
BNI’s Risk Management Director, David Pirzada said that BNI's green segment financing performance was also very positive in 2021. The green portfolio was recorded at Rp 172.4 trillion or 29.6 percent of BNI's total loan portfolio.
This green financing is mainly provided for the needs of the community's socio-economic development through financing for small segments with a total portfolio of Rp 117 trillion. As for the rest is used for the needs of developing green environmental ecosystems, new renewable energy, as well as pollution management and waste management. "The positive performance of green financing, supported by high social and environmental concerns, as well as superior corporate governance practices, has encouraged BNI's ESG rating to increase from MSCI to A since November 2021. The A rating is currently the highest among Indonesian banks, while confirming that our position as a pioneer in the implementation of sustainable finance,” he added.
Furthermore, BNI’s Corporate Banking Director, Silvano Rumantir said that corporate loans in 2021 recorded positive growth where this growth was contributed by several economic sectors that showed positive growth, including manufacturing, construction, FMCG, transportation, and telecommunications. "This year, we remain consistent in expanding in the resilience and sustainable sectors such as FMCG, telecommunications, and others. BNI's strategy in the corporate loan segment includes, among others, selective credit expansion with a focus on Top Tier corporations in resilient and sustainable industries as well as providing comprehensive banking solutions to clients," he said.
Silvano believes that entering 2022 there are three key economic themes that have entered the anticipation of the banking industry players. First, the momentum of economic growth recovery driven by optimism for the sustainability of the vaccination program in the context of handling the pandemic.
Second, we expect the inflation rate to increase in the range of 2%-4%. The implication of these two things is the projected higher credit growth as well as asset quality that continues to improve. In addition, as a result of the US tapering, we project that the BI benchmark interest rate (BI 7 days RR) will rise to the level of 3.5%-4% this year. "However, BNI has determined strategic steps to optimize low-cost funds (CASA) to support more aggressive business expansion to key industry players in leading economic sectors," he said. (*)