Largest Shareholders
Top 10 Corporate Loan Portfolios by Industry Sectors
Industry Sector 2016 2015
Plantation and Agriculture 11.0% 10.5%
Financial Services* 7.7% 4.0%
Chemicals and Plastics 6.5% 7.8%
Consumer Financing 6.4% 4.9%
Power Generation 6.1% 5.8%
Building Material and Other Construction Related 6.0% 5.1%
Telecommunications 5.8% 7.5%
Transportation and Logistics 5.4% 5.6%
Food and Beverage 5.3% 4.5%
Tourism 4.7% 5.5%
Total 64.9% 61.2%
* Including credit facilities to other banks
Through cash management services, BCA has successfully expanded its customer network to include business chains between suppliers and distributors. Cash management strengthens the Bank’s core business in transaction banking.
In line with recent technological developments, BCA continues to enhance its cash management platform to offer comprehensive
# ' $ ~ In 2015, BCA launched the KlikBCA Bisnis Integrated Solution, which is built upon the existing KlikBCA Bisnis platform but with enhanced features and a more attractive and easier-to-use interface. The Bank plans to carry forward the development of '%'#% % ' corporate customers. As of 2016, 53 corporate customers are using the KlikBCA Bisnis Integrated Solution platform.
BCA recognizes the importance of cash management services built around business communities as a source of CASA funds and fee-based income. Communities managed by the Bank include oil and gas, capital markets, futures markets and telecommunications.
Within the oil and gas community, 75% of public gas stations in Jakarta are now BCA merchants, the majority of which make payments to their principals through BCA systems. BCA optimized opportunities arising from the growing airline services and online travel agent industries by facilitating payment between the two sectors through virtual account services.
Looking Ahead
BCA monitors the conditions of various business sectors in order to best identify those sectors with solid business potential and those sectors that may need special attention or services. The Bank aims to continuously support the lending needs of its quality corporate customers and, at the same time, build stronger relationships with our business partners so that we continue to grow together in the future.
In line with the Government’s efforts to develop infrastructure, BCA will participate in the opportunities arising from these programs, including through syndicated lending. The Bank’s focus on its cash management system is key to serving corporate customers seeking payment collection solutions. BCA will also improve the competence of its Relationship Managers in supply # % % > ? sectors and industries that show potential for future business.
Continuing the work programs that were initiated in the past few years, BCA will work to better understand and anticipate the needs of its customers. Corporate Banking will work closely with other business units as well as the Bank’s subsidiaries to serve customers better.
Strengthening ties with overseas banks from the Asia region is one way that BCA can capitalize on opportunities for international $> # foreign exchange services. Through referrals from these overseas banks, BCA will continue to assess new loan demand from foreign investors who are looking to make direct investments in Indonesia.
04 Commercial and SME Banking
Business Review
Business Support Financial Review52,240 97,052
2015 2016
52,760 91,209
Small and Medium Enterprise (SME) Commercial
Commercial and SME Loan Portfolio
(in billion Rupiah)
In an environment of relatively weak business loan demand in 2016, BCA worked to optimize business lending opportunities by meeting seasonal spikes in loan demand and offering competitive interest rates to the Bank’s borrowing customers. BCA continued to strengthen its loan infrastructure and simplify the lending process while adhering to the principles of prudent risk management.
BCA’s commercial and Small & Medium Enterprise (SME) lending business is supported by the Bank’s extensive branch network strategically located in large and regional cities and towns throughout the country. In 2016 BCA witnessed relatively weak loan demand and a declining interest rate environment.
In response, the Bank lowered interest rates on business loans in order to remain competitive and took advantage of the increased demand for business loans during the Idul Fitri celebrations and towards the end of the year. The Bank’s commercial and SME loan portfolio stood at Rp 149.3 trillion at the end of 2016, a 3.7% increase compared to the previous year.
To complement commercial and SME lending, BCA promoted the importance of cash management to the Bank’s small and medium business clients as a primary tool in managing their cash positions while also strengthening the Bank’s core transaction banking business. Improvements made to the cash management service were not only based on advancements in cash management technology but also on service level improvements, leveraging off the Bank’s extensive network
04
Commercial loans are disbursed to medium-sized corporations and business owners with a nominal value of from Rp 10 billion to approximately Rp 350 billion. In 2016, BCA commercial loans reached Rp 97.1 trillion, an increase of 6.4%, constituting 65.0% of the Bank’s total commercial and SME loan portfolio.
The increase in commercial lending in 2016 was mainly due to Distributor, Wholesaler and Retailer; Property & Construction;
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BCA enhanced its internal lending procedures to improve
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with due consideration to risk management principles. 2016 saw further improvements to the Bank’s loan infrastructure, including the Commercial Business Centers which manage the regional commercial loan portfolio. At the end of 2016, there were 14 Commercial Business Centers located in major business and commerce hubs in Indonesia, including Jakarta, Semarang, Bandung, and Surabaya as well as cities outside Java including, Medan, Palembang, Makassar and Denpasar. In order to improve relationships with commercial borrowers, BCA routinely hosts gatherings which are coordinated through the Commercial Business Centers.
Commercial and SME Loan
In 2016, business owners tended to be more cautious in managing their businesses including in regard to working capital and investment planning. This resulted in relatively % >? ' the weeks leading up to Idul Fitri and at the end of the year as customers adjusted their business activities in accordance with seasonal economic conditions.
Even with the relative slowdown in demand, BCA’s wide lending network across the country enabled the Bank to grow the commercial & SME loan portfolios. In 2016, the Bank registered growth in the portfolio of 3.7%, reaching Rp 149.3 trillion.
To maximize lending, BCA offered competitive interest rates in line with market demand and the measured decline in Bank " % ~# %>
the Bank focused its lending on industry sectors with growth potential and solid business prospects in an environment characterized by a still weak but recovering economy.
@+*: % # % with a maximum loan value of Rp 10 billion. At the end of 2016, BCA recorded SME loans of Rp 52.2 trillion, relatively stable compared to last year’s Rp 52.8 trillion in loans outstanding.
The majority of the Bank’s SME customer base consists of family-owned small businesses, shopkeepers, restaurant owners, and small-scale factory owners. SME lending is centered on branches in strategic locations in major trade centers and towns throughout Indonesia, and is supported by an online centralized loan application scoring and risk management system. To expand the SME lending reach beyond the Bank’s network, BCA cooperates with several partner institutions, such as rural banks and cooperatives, to provide direct lending through channeling programs. BCA also works closely with its subsidiary, BCA Syariah, in the development of products and services for micro, small and medium enterprise customers.
The Bank’s solid capital and liquidity position enabled BCA to expand its loan portfolio through various lending programs and across several borrowing segments. In 2016, the Bank improved ' %% +*: #
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sector. BCA established a special loan scheme for selected trade areas which allowed customers to use stores and retail outlets as primary collateral for borrowing at competitive interest rates.
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placed in branches throughout the country to ensure that '# ''$ % overall loan portfolio. In order to provide high quality service,
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knowledge base in credit, business evaluation and their ability to enhance customer relationships.
Excellence in transaction banking has sustained the Bank’s lending performance in the commercial and SME segments.
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making it possible for the Bank to better understand the needs of the commercial and SME customers and their business ~ @ % % ' % '%
'%$ '# $ facilities to quality customers and in monitoring the borrowers’
# % =~ @ developed computer-based and mobile-friendly analytical tools '# ] % information.
BCA applies prudent lending principles by prioritizing borrowers with promising business prospects and those who have established good relationships with the Bank. In 2016, commercial and SME loan quality was maintained at a healthy level. There was an increase in the Non-Performing Loans (NPL) ratio of the commercial portfolio to 2.8% in 2016 compared to 1.2% in 2015, which was spread across various industry sectors but primarily in the sea transportation, property and construction sectors. The increase in the NPL was foreseen and remained within the limits of the Bank’s risk appetite. In the fourth quarter of 2016, the rate of increase in the NPL ratio began to slow. The NPL ratio in the SME segment was relatively stable at a ratio of 1.1% at the end of 2016 compared to 1.0%
at the end of 2015. Thus, the overall NPL for the commercial and SME segments closed 2016 at 2.2% compared to 1.1% at year-end 2015.
Cash Management
BCA offers cash management services for businesses in various sectors serving both Business-to-Business (B2B) and Business- to-Consumer (B2C) transactions. This service is primarily targeted at the corporate and commercial segments, as well as those companies who are within the customers’ business chains. In 2016, more than a hundred thousand companies were using BCA cash management solutions, including those connected within the business chains of large corporations and across the business community.
The number of users of BCA virtual accounts, one of the cash management feature products, continued to increase # ~@ $$ X%
# ' %$% = payment information and to facilitate transaction reconciliation.
BCA expanded its cash management services in a community format, whereby groups of customers are connected to one another within a business chain from supplier to distributor.
These communities include the Oil and Gas, Capital Markets, Futures Markets and Telecommunications Communities. In the Capital Markets Community, around 70% of securities
companies work together with BCA in opening Customer Funds Accounts, with the Bank’s market share on these accounts reaching almost 50%. In 2016 the Bank supported the Indonesia Stock Exchange in educating the public about investing in the capitals market by delivering educational materials at the Capital Market School. In the Oil and Gas Community, as much as 75% of public gas stations in Jakarta are now BCA merchants, with the majority making payments to principals through the Bank’s payments and transaction networks.
In the public services industry, BCA provides solutions for business customers seeking means of payment for their employees’ BPJS social security insurance premiums. In addition, the Bank facilitates payments for the BPJS health insurance membership fees for individual customers through BCA credit cards’ auto debit feature.
To develop integrated cash management services that cover payments, collections, and account & liquidity management transactions, particularly for high intensity and large-scale transactions, BCA provides system-to-system and host-to- host cash management services. These integrated services are marketed under the ‘KlikBCA Bisnis Integrated Solution’
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and includes various features such as cash management for # ~<% $% % solutions, BCA customizes its systems, products and services '# ' "% %% ~
In 2016, the Bank enhanced the management of the Digital Business Community as a potential new business in an era of the rapid growth of e-commerce and technology startups in Indonesia. Technological advancements in Indonesia have expanded the market for BCA’s cash management system, particularly for e-commerce companies. The Bank facilitates convenient, secure and reliable payment transactions for online merchants. In addition, BCA is running a pilot project to develop an Application Programming Interface (API) platform # X X%%%
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Commercial and SME Banking
Business Review
Looking Ahead
In 2017, BCA will monitor developments in the Indonesian economy and focus on those sectors showing business potential and identify areas in need of special attention.
The Bank will strengthen customer relationships in order to continue supporting their lending needs and expand business opportunities with quality customers.
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including by improving the quality and adding new account '# > ? > ' streamlining the loan process for sustainable commercial &
+*: ~ # be developed through the synergy between corporate and commercial & SME segments.
The Bank will continue to work to enhance cash management services in efforts to promote fee-based income growth and strengthen BCA’s transaction banking business. In providing cash management services, the Bank will continue to assess priority business sectors and communities to understand and identify their business potential and the risks faced in those different business sectors. In 2017, the Bank will focus its cash management marketing efforts on the transportation industry, which represents a growing market in line with the Government’s infrastructure development initiatives; as well as industries related to logistics which are expected to grow together with the e-commerce market and with the courier business.
04 Individual banking
Business Review
Business Support Financial Reviewproviding a comprehensive range of attractive individual banking products and services. The wide range of individual banking products are designed to meet the needs of different market segments, particularly the growing middle-class.
BCA developed the Individual Banking business to serve various market segments. Over the last decade, BCA saw that the growing middle class and professionals have had a positive impact on the Indonesian economy as seen by growing % % ' # $~ @ trend has triggered the Bank to address the need for targeted individual banking products and services.
The Bank reaches a wide community with its extensive branch network in Indonesia. BCA offers a range of individual banking products, such as mortgages, vehicle loans, credit card, bancassurance and investment products. The Bank works to study the characteristics and needs of its customers, offering
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% ~ < ' % % X worth individuals, the Bank has developed specialized Prioritas Banking services at most BCA branches and Solitaire services at two exclusive lounges at premium locations of Jakarta.
63,959 59,415
34,817 31,612
2016 2015
Consumer Loans Portfolio
(in billion Rupiah)
Mortgage Vehicle Loans Credit Card
9,483 10,779
04
In offering investment products, BCA pays careful attention to
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mutual funds products are selected in collaboration with reputable and proven Investment Managers. Working with a number of insurance providers, including AIA, BCA Life, and BCA Insurance, the Bank offers a wide range of bancassurance products. Growing public awareness of the need for insurance and the relatively low market penetration rate, open up excellent opportunities for BCA to offer insurance products in accordance with the needs of the Bank’s customers.
BCA also provides a ‘Solitaire’ service to facilitate the growing needs of Indonesia’s high net-worth individuals. Aside from all of the services available to Prioritas customers, Solitaire customers have access to two exclusive lounges in premium locations in Jakarta and are assisted by highly-trained and competent personal financial advisors. Solitaire services are offered to select clients and are based on face to face
‘gatherings’ to strengthen relationships with these customers.
In order to better understand the characteristics of these customers and to recognize their financial needs, BCA continuously develops and improves its Customer Relationship Prioritas & Solitaire Services and Wealth Management
!($% ' %% ~ This customer segment represents one of the most important business segments for the Bank. BCA Prioritas is designed to provide a relaxed and comfortable banking environment as well as specialized banking and investment products to meet the banking needs of this customer segment.
As of 2016, BCA operates 163 Prioritas branches at many of the Bank’s branches, offering banking products and services ' %~
and services, such as transaction services, mortgages, vehicle
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to comprehensive wealth management solutions, including mutual funds, government bond investments, premium credit cards, priority safe deposit box services and special foreign exchange rates. In collaboration with trusted business partners, BCA Prioritas is able to offer exclusive programs related to health, education, business networking, travel and lifestyle.
BCA Prioritas customers also have priority access to the 24- hour HaloBCA Prioritas call center, BCA Prioritas website and community magazine.
Management system. This system allows the Bank to offer the most suitable products and services while supporting cross- selling efforts. BCA continues to focus on applying targeted
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Leading in Consumer Lending
In line with the increasingly complex needs of the middle class, BCA has focused consumer lending on mortgages and vehicle
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card portfolio, has grown 29.2% CAGR and reached Rp 109.6 trillion at the end of 2016.
Mortgages
BCA constantly works to expand its mortgage portfolio and is the largest provider of non-subsidized mortgages in Indonesia.
The Bank offers competitive rates on mortgages as a strategy to maintain its strategic position in the market and drive sustainable loan growth. In 2016, BCA reduced mortgage interest rates by 50–100 basis points to stimulate loan demand.
The Bank re-launched the signature 6-year ‘Fix & Cap’ mortgage
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interest plus a maximum 3-year cap of 8.99%) in addition to a
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are made possible by the Bank’s stable and low-cost Current Account and Savings Accounts (CASA) funds.
The Bank’s mortgage portfolio has grown 30.8% CAGR in the last decade and closed 2016 at Rp 64.0 trillion. In 2016, new mortgage bookings were recorded at Rp 22.0 trillion, compared with a rundown of Rp 17.4 trillion, resulting in total growth on the mortgage portfolio of Rp 4.6 trillion or 7.6% from last year’s Rp 59.4 trillion. Mortgages contributed 58.4% to the Bank’s total consumer loan portfolio and 15.4% to the overall bank loan portfolio. In the midst of a relatively weak property market, the Bank succeeded in growing the mortgage loan portfolio which # $ ' !"
portfolio. The relaxation of Bank Indonesia’s policies on Loan to Value (LTV) and mortgages on off-plan property developments had a positive effect on the Bank’s mortgage growth.
BCA manages a low-risk mortgage portfolio by prioritizing = ' # located in selected residential areas. These strategic steps have enabled the Bank to record positive growth while maintaining low probability of default risk. BCA maintains strict collateral
requirements and a conservative down payment policy. The
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which has remained relatively stable over the last several years.
The low market penetration rate and the relatively small number of BCA mortgage borrowers when compared with the Bank’s total customer base indicate great potential to further expand the mortgage portfolio. Aside from supporting interest income, the mortgage business also brings strategic opportunities for BCA to establish loyalty and build long- term customer relationships, including through cross-selling practices in the coming years.
BCA markets mortgages through its extensive branch network and consumer credit branches in various cities throughout the country. The majority of mortgage applications originated from branch referrals with the remaining from property developers.
In recent years, BCA has set up more consumer credit branches in several targeted major cities to strengthen the mortgage loan presence in those selected cities. In order to improve service quality, the consumer credit branches also function as
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convenience, the Bank offers an online web-based mortgage %%# ' $ mortgage loans.
BCA has received a number of awards for its achievements in the mortgage business, both from local and international institutions. The Bank was awarded Best Mortgage Business in the 2016 Indonesia Country Awards Programme for Retail Financial Services by Asian Banker as well as the 2016 Net Promoter Customer Loyalty Award for the Mortgages category by SWA magazine.
Vehicle Financing
BCA provides financing for cars and motorcycles through its subsidiaries BCA Finance and Central Santosa Finance
!+< >'''| # % the major portion of the loan recorded directly on BCA’s balance % '#
sheets of the subsidiaries.
BCA Finance and CS Finance work closely with BCA in providing
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provide solid and stable funding structures with low interest rates for both entities. Marketing synergy through BCA’s branch network allows the two subsidiaries to increase their customer base and maintain a high quality, relatively low risk portfolio.
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consumer loan portfolio after mortgages. Although the automotive industry continues to experience weakness, BCA %# '%
and in line with prudent risk management principles.
Following a decline in the previous two years, new nation-wide car sales saw a slight increase in 2016 of 4.7% amounting to 1.1 million units. To maintain growth while also exercising caution, BCA Finance consistently offered top-of-mind car
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!" >''Z#?X % XX 3 years installment at a capped interest rate. In 2016, BCA Finance developed a new facility that allows debtors to ‘top up’ their loan and borrow against the vehicle at an agreed maximum ceiling. As a marketing strategy, the Bank continued to offer competitive interest rates to attract quality customers.
In addition, BCA collaborated with car dealers to host a series of auto shows as an opportunity for the Bank to promote its vehicle loan products.
Customer acquisition is conducted in a disciplined manner, while maintaining collateral quality. BCA applies a policy of high down payments and low interest rates, and prioritizes
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by the Indonesian automotive market. These policies helped sustain a low non-performing loan ratio and a high recovery rate on foreclosures, while also posting positive growth in the
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BCA Finance aims to improve its service in order to enhance customer satisfaction. Weekend service at Wisma BCA Pondok Indah and the service point at Artha Gading mall are provided to serve consumer needs on Saturdays. To speed up the application process, BCA Finance has developed several mobile technology applications, including mobile entry, mobile approval and mobile collection capabilities. To facilitate customers seeking product information, BCA Finance also offers a smartphone app with frequently asked questions and sample payment