analyst meeting & press conference
TRANSCRIPT
ANALYST MEETING & PRESS CONFERENCE
FY2018 Ended 31 December 2018
Jakarta, 1 April 2019
Executive Summary 3
Financial Highlights 6 Business Growth Retail & Commercial 11 Development of Digital Banking 20 Corporate Outlook FY 2019 25 Bank Bukopin In Brief 30
TABLE OF CONTENTS
Analyst Meeting BBKP – FY2018
EXECUTIVE SUMMARY
3
• Raising capital through issuance of new shares to shareholders and public
through Limited Public Offering (“PUT IV”). KB Kookmin Bank (herein after referred to as “Kookmin”) came in as the Standby Buyer, which bought 2.563.000.000 shares at offered price Rp570/shares and settled on 27 July 2018. Upon completion of PUT IV, Kookmin became the second largest shareholder of PT Bank Bukopin Tbk (herein after referred to as “BBKP“ or “Company”) with 22% shares ownership.
• Kookmin is the largest South Korean bank, with total asset as of December 2018
approximately KRW 357 trillion (eq. IDR 4.466 trillion). Kookmin is the largest part of KB Financial Group (KBFG), one of the major holdings company and a leading financial services conglomerate in Korea.
• Following the PUT IV and Kookmin officially enlisted as one of the shareholder,
BBKP on 29 October 2018 conducted Extraordinary General Meeting of Shareholders (EGMS). To support the strengthening of risk management in BBKP, Kookmin appointed a Commissioner and a Director, which subjected to regulatory approvals.
• The year 2018 was closed with a stronger capital structures upon the completion
of PUT IV, with Capital Adequacy Ratio (CAR) improved to 13.41% and equity increased 27% to IDR 8.6 trillion.
STRENGTHENING CAPITAL
1
Analyst Meeting BBKP – FY2018
EXECUTIVE SUMMARY
4
IMPROVING ASSET QUALITY
• Optimizing internal business processes and strengthening synergies in improving
asset qualities and customers’ loan management NPL net improved to 4.75%, down 1.62% from December 2017.
• Focus on improving current asset to build stronger foundation for future growth. • Growth in business mainly in loan products with low capital charges, inline with
the company’s strategies in Consumer Loan expansion growth in Pension Loans and Joint Financing with our subsidiaries, Bukopin Finance (BuFin) and Bank Syariah Bukopin (BSB).
• Released several new products in 2018 to boost further growth in fee based
income, i.e. : digitalized payment point online bank (PPOB) through BukopinNet, digital banking platform through Wokee, a modified trade finance products to facilitate monthly big bills through Flexy Bill, etc.
• Reorganization to strengthen risk management and internal control, i.e. : 1) Business Director separated into 3 based on business segments
(Commercial, SME and Consumer); 2) Separation of Quality Assurance roles to strengthen risk management; 3) Appointment of Risk Director, separated from Compliance Director; 4) Integration of Operations and Information Technology (IT) Director
2
Analyst Meeting BBKP – FY2018
EXECUTIVE SUMMARY
5
OPTIMIZING EFFICIENCY
• Improving internal daily operations to optimize efficiency, which resulted in lower
overhead costs during 2018 : IDR 2.76 trillion or managed to save approximately IDR 206 billion (total OH cost down 6.9% than previous year). The savings in daily costs has brought the efficiency ratio, which indicated by BOPO, slightly improved to 98.4%.
• The efficiency in overhead costs mainly from the lower general and administrative costs which saved approximately IDR 137 billion or 7,8%, while the personnel cost slightly down 3.9%.
• Rebalancing the customers’ deposit structures, which resulted in increasing
proportions of low cost deposit products (current account and savings account). CASA improved to 39.3%.
• Well-managed liquidity amidst tightening market and challenging year for trading, with LCR well above minimum requirements and stood at 106% at year end, and LDR on moderate level of 86,2%.
• Within the same year in strengthening capital, improving NPL ratio and cost efficiency, the company managed to book double profit from last year, with the bank only (BBKP) profit before tax IDR 202 billion, or grew 113.8% from 2017.
3
FINANCIAL HIGHLIGHTS
FY 2018 ENDED 31 DECEMBER, 2018
Hotel Ritz-Carlton Pacific Place, Jakarta, 1 April 2019
Analyst Meeting BBKP – FY2018
Analyst Meeting BBKP – FY2018 7
BALANCE SHEET-1 (in billion Rupiah, otherwise stated)
BALANCE SHEET - ASSET
(Consolidated)
ACHIEVEMENTS YoY TREND
FY 2017 FY 2018
Cash 678 816 20,31%
Current Account on BI (Reserve) 4.618 4.031 (12,71%)
Current Account on Other Banks 479 803 67,62%
Placement at BI and Other Banks 9.563 6.355 (33,55%)
Securities 10.072 7.842 (22,14%)
Reverse Repo – net 1.129 1.001 (11,28%)
Derivative 4 0 (96,86%)
Disbursed Loans 72.632 66.444 (8,52%)
Provisions -2.153 -2.079 (3,42%)
Fixed Asset – Net 2.755 3.075 11,61%
Other Asset 6.192 6,913 11,64%
TOTAL ASSET 106.443 95.644 (10,15%)
Analyst Meeting BBKP – FY2018 8
LIABILITY & EQUITY (Consolidated)
ACHIEVEMENT YOY TREND
FY 2017 FY 2018
Current Liabilities 667 297 (55,52%)
Customers’ Deposit 88.586 76.150 (14,04%)
- Current Account 13.069 10.043 (23,15%)
- Savings Account 20.068 19.917 (0,75%)
- Time Deposit 55.450 46.190 (16,70%)
Placement from Other Banks 1.585 3.122 97,00%
Securities with Repurchase Agreement 3.389 1.607 (52,59%)
Acceptance Liabilities 170 135 (20,74%)
Received Loans 847 1.279 51,05%
Issued Subordinated Bonds 3.292 3.296 0,11%
Other Liabilities 1.084 1.049 1,46%
TOTAL LIABILITIES 99.684 87.049 -12,67%
Paid-Up Capital 1.120 1.376 22,91%
Additional Paid-Up Capital 1.724 2.924 69,60%
Fixed Asset Revaluation - Net 1.162 1.369 17,85%
General Reserve 2.712 2.945 8,58%
TOTAL EQUITY 6.759 8.594 27,16%
TOTAL LIABILITY AND EQUITY 106.443 95.644 -10,15%
BALANCE SHEET-2 (in billion Rupiah, otherwise stated)
Analyst Meeting BBKP – FY2018
INCOME STATEMENT (Consolidated)
ACHIEVEMENTS YoY TREND
FY 2017 FY 2018
Interest Income 9.623 7.981 (17,07%)
Interest Expenses (6.490) (5.388) (16,98%)
Net Interest Income 3.133 2.593 (17,24%)
Other Operating Income 767 784 2,11%
Overhead Cost (2.966) (2.760) (6,94%)
General and Administrative Cost (1.741) (1.604) (7,85%)
Personnel (1.225) (1.155) (5,65%)
Operating Profit 122 145 19,17%
Non Operating Income (Expense) 0 71 30174,58%
Profit Before Tax 122 216 77,59%
Profit After Tax 136 190 39,79%
INCOME STATEMENT (in billion Rupiah, otherwise stated)
9
Analyst Meeting BBKP – FY2018 10
FINANCIAL RATIOS (Bank Only) ACHIEVEMENT
YoY TREND FY 2017 FY 2018
PROFITABILITY
Return on Asset (ROA) 0,09% 0,22% 0,13%
Return on Earning (ROE) 1,85% 2,95% 1.10%
Net Interest Margin (NIM) 2,89% 2,83% (0,06%)
EFFICIENCY
BOPO 99,04% 98,41% (0,63%)
ASSETS QUALITY
NPL – Gross 8,54% 6,67% (1,87%)
NPL – Net 6,37% 4,75% (1,62%)
LIQUIDITY & CAPITAL
Loan to Deposit Ratio (LDR) 81,34% 86,18% 4,84%
Net Stable Funding Ratio (NSFR) - 106,75% -
Liquidity Coverage Ratio 206,00% 106,20% (99,80%)
Current Account to (CASA) 37,41% 39,34% 1,94%
Capital Adequacy Ratio (CAR) 10,52% 13,41% 2,89%
FINANCIAL RATIOS
BUSINESS GROWTH : RETAIL & COMMERCIAL
Hotel Ritz-Carlton Pacific Place, Jakarta, 1 April 2019
Analyst Meeting BBKP – FY2018
Analyst Meeting BBKP – FY2018 12
LOANS COMPOSITION
48.946
33.133
15.813
23.686
72.632
44.541
29.282
15.259
21.903
66.444
RETAILBUSINESS
SME CONSUMER COMMERCIALBUSINESS
TOTAL
FY 2017 FY 2018
Focus on improving internal business processes and customers’ loan management to ensure repayment compliance, improving and settlement on problematic loans efforts in lowering NPL
Selected growth on disbursing loan, mainly on products with low capital charges to maintain asset qualities in supporting improvement of NPL ratio and maintain healthy capital ratios
(in billion Rupiah, otherwise stated)
67,04%
32,96%
RETAIL BUSINESS
COMMERCIALBUSINESS
16,89%
17,55%
17,64%
47,92%
Trading
Service
Construction
Others
By Segments
By Sectors
Analyst Meeting BBKP – FY2018 13
ASSET QUALITIES
Dec-17 Dec-18
NPL Net NPL Gross CKPN
2.079
2.153
6,67%
8,54%
6,37%
4,75%
31,87% 31,31%
7,97%
28,85%
Service Trading Construction Others
The largest NPL proportion from several economic sectors : Service, Trade and Construction NPL risk in the scope of manageable and measurable Handling of NPLs has a structured action plan and optimistic that non-performing loans can be completed in
the following quarters The ratio of non-performing loans gradually declined as the implementation of structured action plans as a
manifestation of the company's commitment to improve the quality of productive assets
NPL COMPOSITION BY SECTOR
2018
Analyst Meeting BBKP – FY2018 14
39.34%
60,66% By
Products
CASA Time Deposit
88,6 T 76,2 T
33,1 T 30,0 T 55,5 T 46,2 T
2017 2018
CASA Trend
CASA Time Deposit
62,59%
39,34% 37,41%
60,66%
CUSTOMERS DEPOSIT COMPOSITION
CASA proportion in 2018 increased 1.94% to 39.34%, and will continuously growing as the company developing further the digital banking app (Wokee), renewing the Priority Banking, increasing transactional engagements, growing the Consumer Loan products and strengthening relationship management with the customers.
11.92%
9,07%
79,01%
By Sectors
SOE & Group
GovernmentRelated
Individu &PrivateCompany
68.18%
31,82%
By Segment
Retail Commercial
Analyst Meeting BBKP – FY2018 15
88,6 T 76,2 T
33,1 T 30,0 T 55,5 T 46,2 T
SOURCES OF FEE BASED INCOME
The fastest growing fee-based income sources in 2018 were : • Financial Service 61% to IDR 148 billion (Bank
guarantee, Trade finance, etc) • Public Service 2.9% to IDR 137 billion (E- Channel,
Administration, etc) Largest contributors by amount: • Credit Card IDR 232 billion • Treasury IDR 151 billion • Bank Guarantee IDR 75 billion
31,25% 20,26%
18,40%
19,93%
10,16%
Card & Merchant Treasury
Public Service Financial Service
Others
Digitalized version of Payment Point Online Bank (PPOB), by utilizing application go replace EDC, widening market shares, and lowering marketing and operational costs
Digital banking platform, an account on your phone to ease customers in opening other accounts, executing daily payments and transactions, suitable for the current mobile generations. Pay by QR Payment is available at > 3000 merchants.
Synergy with Financial Technology digital start-ups to collaborate in growing business, both through incubation or non-incubation. A co-working space available at Jl.Raden Saleh, Jakarta.
A modified trade finance product to accommodate customers’ big monthly payments (big bills), i.e. electricity, gasoline, water, etc.
2018
Analyst Meeting BBKP – FY2018 16
• Focus on growing consumer loans, mainly mortgage (KPR), vehicle (KPM) through joint financing with Bukopin Finance (BuFin), and pension loan with Bank Syariah Bukopin (BSB).
• Some business partner to support growth in KPR : refinancing from SMF, and partnership with major developers.
• Pension loans stood slightly down from previous year. In mid 2018, there was a rebalancing in pension loan portfolios approximately IDR 3 trillion to support temporary tighter liquidity. The pension loan then grew significantly more to close the year end near IDR 10 trillion. The company plan to grow pension loans in 2019 and continue to expand strategic alliances for pre-pension and pension loans.
CONSUMER LOANS PROPORTION
(in billion Rupiah, otherwise stated)
Some of Our Business Partners:
1190,221
2124,713
892,640
10748,60
856,722
Credit Card Mortgage (KPR)
Vehicle (KPM) Pension Loans
Others
2017
1115,324
1948,277
628,687
9795,850
1771,273
2018
Analyst Meeting BBKP – FY2018 17
PENSIONERS GROWTH
174.483
87.907
54452
28725 28230 17382
3755 3187 4537 1441
929.901
490.208 481255
87538 71755 69726 48669 33751 33074 45005
Bukopin Bukopin
6th largest pensioners from ASABRI
• BBKP maintain its position as 6th largest pensioners (from total provider 14 banks) from ASABRI at 17.382 , grew about 14% from 2017. The proportion was 4.19% from total ASABRI pensioners, with outstanding pension loan amounted IDR 40 billion.
• BBKP also maintain its position as 6th largest pensioners (from total provider 47 banks) from TASPEN at 69.726, grew about 9% from 2017. The proportion was 2.64% from total TASPEN pensioners, with outstanding pension loan amounted IDR 184 billion.
• Combined, BBKP stands at the 4th largest pensioners loan providers with 87.108, about 2% share from approximately 3 million total listed pensioners in TASPEN and ASABRI, with potentials to grow higher.
6th largest pensioners from TASPEN
Analyst Meeting BBKP – FY2018 18
3. Trade Finance
1. PLN Bill
Bukopin Finance Synergy Car Loan Bank Syariah Bukopin Synergy Pension Loan
Sales Joint Financing
Sinergy, Simplification dan Profit Optimization
Monthly
Pension
Payment
Collecting
Agent
Sales
Bank Syariah Bukopin Synergy Flexy Bill
6. Profit
Sharing
Potential Market
Car Loan
Flexy
Bill
Pension
Loan
Top 5 Pension Payment Bank 65.000
pension from TASPEN dan 16.000
ASABRI & 22.000 of pra-pension
Electricity payment PLN Rp 20T / month
Electricity payment PLN via Bank
Bukopin Rp 5T / month
High demand of automotive financing
Liquidity support for Bukopin Finance
SYNERGY WITH SUBSIDIARIES
Analyst Meeting BBKP – FY2018 19
43 Branch Offices
173 Sub-Branch Offices
104 Cash Offices
DISTRIBUTION CHANNELS
Digital banking app, payment by QR available at > 3000 merchants
>100.000 payment outlets supported by partnership with E-commerce and other online business partners as the collecting agent H2H
11 branches, 7 sub-branches 4 cash office s 97 sharia services 6 mobile cash services
40 branch offices
867 ATM in 51 cities
DEVELOPMENT OF DIGITAL BANKING
Hotel Ritz-Carlton Pacific Place, Jakarta, 1 April 2019
Analyst Meeting BBKP – FY2018
Analyst Meeting BBKP – FY2018 21
E-BANKING PLATFORMS
Internet Banking
Phone Banking
Bukopin Mobile
SMS Banking
Bukopin Net - PPOB
Digital Banking App - Wokee
Analyst Meeting BBKP – FY2018 22
WOKEE & BUKOPINNET – CURRENT
• Online registration • Account statement • Sub Account • Transfer • Payment • Transfer • Purchase • Card-less withdrawal • Split interest • Split bill • Pay contacts • Pay by QR • E-money
PFM • BukopinNet in partnership with
Collecting Agents (B2B) both in the system of H2H with E-commerce/online or PPOB Bukopin
• Potential for direct agents will be optimized with B2C expansion, to open more customers account and attract walk-in clients
• B2C breakthrough utilizing mobile app will boost fee based income
Analyst Meeting BBKP – FY2018 23
Video Banking For CDD Process
Integration with Credit Card and Conventional Saving Open API Wokee Services for third party Integration with Bukalapak for open account Personal Finance Manager with machine learning
Wokee Agents Banking
Application for payment point agents Bukopin : Public utilities payment
Various biller
Using virtual account
Fee based income
Easy access
Face recognition for credit consumer loan & operation
Interface for consumer car loan Self service banking
Connect with Liiv, KB Kookmin Bank’s digital banking app to accommodate Indonesia – Korea transfers
WOKEE & BUKOPINNET– NEXT PHASE
Analyst Meeting BBKP – FY2018 24
End-to end Ecosystem Connection
Market Access
Influence the system
Access to Coworking
Space
An Innovation center that redefines bankers of the future. A lab where creators, collaborators, developers shape the future of
financial industry. Focusing in certain segment such as Agri/Aquaculture, Logistic,
Social/Health and Tourism
Providing collaboration space area Access to Bukopin’s network Business investment funds Mentoring Payment gateway
On progress collaboration
Crowd funding agriculture through Tanifund from pre-pensions loan (as an investor)
Various collaborations
START-UP COLLABORATIONS
CORPORATE OUTLOOK
FY 2019
Hotel Ritz-Carlton Pacific Place, Jakarta, 1 April 2019
Analyst Meeting BBKP – FY2018
Analyst Meeting BBKP – FY2018 26
2018 Recovery & Building
Stronger Business
Foundation
2019
Retail Business Focus : Productivity,
Quality, and Business Process
2020
Retail Business
CORPORATE ROADMAP 2018-2020
Analyst Meeting BBKP – FY2018 27
CORPORATE UPDATE IN Q1-2019
• Final coupon payment and full proceed payment of Subordinated Bonds Phase I year 2012 amounted IDR 1,5 trillion on March 6, 2019 through Kustodian Sentral Efek Indonesia (KSEI). The subordinated bond was issued on March 6, 2012 with coupon rate at 9.25% and rated idA- (PEFINDO).
• Diversification of funding sources from capital
market, by preparing the issuance of asset backed securities with underlying assets pension loans (H1-2019) and mortgage (KPR) in H2-2019, with subjects to changes according to market progress and the company’s performances.
Analyst Meeting BBKP – FY2018 28
28
Loan Growth
8%
Allocation
Personal 76 %
Mortgage 12 %
Car Loan 12%
< 5 Billions 100 %
5-15 Billions 0 %
> 15 Billions 0 %
Replacement 0%
35%
65%
Deposit Growth
7,4%
Retail
Commercial 30%
70%
Consumer
SME
Commercial
CASA Growth proportion 62 % of all deposits
Time Deposit Growth proportion 38 %
Champion Products
Pension Loan
Pra Pension Loan
FLPP Mortgage
Payroll based loan
Flexy Bill
Flexy Retail
Flexi Health
Money Market Line
New Swamitra
Footprint Competitive Process &
Credit Scoring Strategic Partners Champion Product
Retail Business Key Enabler
CORPORATE PLAN 2019
Analyst Meeting BBKP – FY2018 29
Productivity
Product and Program
Outlet and Electronic Channel
Human Resources
Quality
Business Process
Relaunch, rebranding & bundling
Outlet productivity:
Recompositing employee ratio
Performance based culture
Focus on retail segment deposit and loan
Increase medium to long term deposit category
New paradigm in credit analysts
Continuously decreasing credit collectability 2 (special mention) & Non Performing Loan
Accelerate sales of foreclosed assets
Competitive loan process and credit scoring
Strengthen operational aspect in loan processing
Simplification & digitization process
Selective investment and overhead cost efficiency
Strong Deposit Structure
NPL and Foreclosed Asset
Focus on retail segment
Prudent and Competitive
Cost and Investment Control
CORPORATE STRATEGIES 2019
BANK BUKOPIN IN BRIEF
Hotel Ritz-Carlton Pacific Place, Jakarta, 1 April 2019
Analyst Meeting BBKP – FY2018
Analyst Meeting BBKP – FY2018 31
COMPANY PROFILE
Company Name : PT Bank Bukopin Tbk Brand : Bank Bukopin Business : Banking Service Date of Establishment : July 10, 1970 Legal Basis of Establishment : Decision Letter No. 13/Dirjen/Kop/70 of the Directorate General for Cooperatives on July 10, 1970. The Bank started its commercial operations as a cooperative bank in Indonesia on March 16, 1971 upon the approval of the Ministry of Finance in its Decision Letter No. Kep-078/DDK/II/3/1971 dated March 16, 1971 Date of Listing in the IDX : July 10, 2016 Shares Code : BBKP SWIFT Code : BBUKIDJA Corporate Rating : idA-, outlook stable (PEFINDO) Head Office : Gedung Bank Bukopin Jalan M.T. Haryono Kav. 50-51 Jakarta Selatan 12770 Phone : +6221-7988266, 7989837 Fax : +6221-7980625, 7980238, 7980244 Website : www.bukopin.co.id Call Center, Email Customer Care : Halo Bukopin 14005, [email protected] Corporate Secretary : Ariesyanti Budi Pratiwi E-mail Corporate Secretary : [email protected]
Analyst Meeting BBKP – FY2018 32
CORPORATE MILESTONES
Analyst Meeting BBKP – FY2018 33
PT Bosowa Corporindo
30,0%
KOPELINDO 18,1%
Government
of RI [PERCENTA
GE]
Public [PERCENTA
GE]
PT Bosowa Corporindo is a private national company established in South Sulawesi, Indonesia, with 6 main area of business : automotive, cement, mining and energy, financial services, real estate and education. Bosowa also runs some other projects, i.e. media, sports and agriculture
KB Kookmin Bank is the largest bank in Korea which dominate the mortgage market and digital banking. Officially listed as the second largest shareholder since July 27, 2018 through the Limited Public Offering (LPO) IV
Kopelindo is the cooperative institution of the national logistics company’s employee and pensioners
Government of Republic of Indonesia
PT Bosowa Corporindo
23,4%
KB Kookmin
Bank 22,0%
KOPELINDO 11,5%
Government of RI
[PERCENTAGE]
Public [PERCENTA
GE]
Shareholders Composition After LPO IV
SHAREHOLDERS COMPOSITION Shareholders Composition Before LPO IV
Analyst Meeting BBKP – FY2018 34
As of December 2017, Bank Bukopin does not have any affiliates, joint venture companies, or special purpose vehicle (SPV)
Financing, leasing and multi-finance company, with total asset IDR 803 billion as of December 2018
Sharia banking service with total asset IDR 6.3 trillion as of December 2018
COMPANY GROUP STRUCTURES
Analyst Meeting BBKP – FY2018 35
BOARD OF COMMISSIONERS
Deddy S.A. Kodir Commissioner
Mustafa Abubakar President Commissioner –
Independent
Susiwijono Commissioner
M. Subhan Aksa Commissioner
Margustienny Oemar Ali Independent
Commissioner
Karya Budiana Independent
Commissioner
Mulia P. Nasution Independent
Commissioner
Jae Hong Park* Commissioner
*)Effective upon approval from OJK within compliance of POJK No.27/POJK.03/2015, No.37/POJK.03/2017, and/or other relevant regulations
Analyst Meeting BBKP – FY2018 36
DIRECTORS
Eko R Gindo President Director & CEO
Mikrowa Kirana Business Director - Commercial
Heri Purwanto Business Director – Small
Medium Enterprises (SME)
M. Rachmat Kaimuddin Finance & Planning Director
Hari Wurianto Compliance & Risk Director
Adhi Brahmantya Operation & IT Director
Rivan A. Purwantono Business Director -
Consumer
Jong-Hwan Han*)
Director
*)Effective upon approval from OJK within compliance of POJK No.27/POJK.03/2015, No.37/POJK.03/2017, and/or other relevant regulations
PT BANK BUKOPIN Tbk
INVESTOR RELATIONS E-mail : [email protected]
Telephone: (021) 7988266 Ext. 1166, 1108 Fax: (021) 7980625
www.bukopin.co.id
Disclaimer : This presentation material was prepared by PT Bank Bukopin Tbk (hereinafter referred to as "Bank Bukopin" or "Company") independently and circulated for general information purposes only. This is not intended for certain people who might receive this material. No guarantee (expressed or implied) is made for the accuracy or completeness of the information. Some of the statements contained in this document contain the achievement of reports relating to financial conditions, business and business results, and related plans and objectives. This material does not directly or exclusively relate to facts in the past. This material also does not directly or exclusively reflect both plans, expectations, assumptions and beliefs about events that will occur in the future of the Company. There are uncertainties, known and unknown risks from this report that can cause results, performance or events to differ materially from the original report. This is not just a statement, and must not be interpreted as a representation of the Company's future performance. Readers are advised to look at all the statements listed here carefully.