BCA has guidelines that support the implementation of ALCO’s duties and responsibilities, which are listed in the Board of Directors Decree No. 167/SK/
DIR/2019 dated October 25, 2019 regarding the Asset Liability Committee (ALCO) Structure and the Board of Commissioner Decree No. 067/SK/KOM/2020 dated June 2, 2020 regarding the Scope of Duties and Responsibilities of the Board Directors and the main organization structure of PT Bank Central Asia Tbk.
Scopes stipulated in ALCO’s decree are as follows:
• Organization scope
- Mission, Main Function, Position and Authority
- Position and Composition of Committee
• Completeness of Committee - Committee Personnel - Main Duties
- ALCO’s working group
- Decision Making and Accountability
1. Structure, Membership of ALCO, and Voting Rights Status
Based on the Board of Directors Decree No. 167/SK/DIR/2019 regarding the Asset Liability Committee (ALCO) Structure, so the structure, membership and voting rights status of ALCO are as follows:
Position in the Committee Served by Voting Rights Status
Chairman (concurrently
as a member) President Director Reserve voting rights
Members • Deputy President Director 1
• Deputy President Director 2
• Compliance and Risk Management Director
• Corporate Banking Director
• Commercial and SME Banking Director
• Regional and Branch Network Director
• Credit and Legal Director
• Banking Transactions Director
• Planning and Finance Director
• Executive Vice President (EVP) in charge of Treasury Division and International Banking Division
• Executive Vice President (EVP) in charge of the Corporate Banking Group
• Executive Vice President (EVP) in charge of the Corporate Finance Division and the Corporate Secretary and Communications Division
• Head of the International Banking Division
• Head of Treasury Division
• Head of Corporate Finance Division
• Head of Corporate Strategy and Planning Division
• Head of the Corporate Banking, Transaction and Finance Group
• Head of Commercial and SME Business Division
• Head of Banking Transaction Product Development Division
• Head of Banking Transaction Business Development and Marketing Division
• Head of Banking Transaction Cooperation Solution Development Division
• Head of Consumer Credit Business Division
• Head of Risk Management Work Unit
Reserve voting rights
Secretary Senior Advisor Risk Management Work Unit in charge of Asset Liability Management (ALM)
No Voting Rights
2. Main Functions, Authorities, and Responsibilities of ALCO
Main Functions of ALCO
ALCO has the following functions:
a. To establish and evaluate liquidity management policies and strategies to maintain liquidity in accordance with the applicable provisions, meet BCA’s liquidity needs, including unexpected fund requirements, and minimize idle funds.
b. To establish and evaluate policies and strategies related to market risks, such as interest rate risk and foreign exchange risk.
c. To establish and evaluate pricing policies and strategies for funding products, loans and inter-office accounts.
d. To establish and evaluate policies and strategies in structuring investment portfolios.
e. To establish and evaluate policies and strategies for arranging balance sheet structure by anticipating changes in interest rates to achieve an optimal net interest margin.
Authorities of ALCO
ALCO has authority to take strategic decisions in the management of the BCA’s assets and liabilities within parameters set by the Board of Directors.
The authority of ALCO are as follows:
a. To establish interest rates on time deposits, savings, and current accounts.
b. To establish lending rates.
c. To establish funding and investment strategies.
d. To establish hedging strategy where necessary.
e. To establish limits relating to liquidity risk, interest rate risk, and foreign exchange risk according to the overall risk management policy.
Duties and Responsibilities of ALCO
ALCO members who have voting rights, have the following main duties:
a. To provide input to the ALCO secretary for the preparation of meeting agenda and materials b. To provide input in the form of information
and analysis on the ALCO meeting, regarding:
• Methodology for determining price of funds and loans products.
• Methodologies for measuring liquidity risk, interest rate risk and foreign exchange risk.
• Determination of the price of funds and loan products.
• Competitiveness of interest rates for funds and loan products.
• Competitor bank strategy.
• Constraints on the application of ALCO’s decision results.
• Customer behavior and its changes.
3. Meeting of ALCO
The terms of ALCO meetings are as follows:
- ALCO meetings are held as necessary and at least once every month.
- ALCO meetings are valid if attended by at least 1/2 (one half) of the total members of ALCO plus 1 (one) member, including the chairman or alternate, or attended by 6 (six) Directors, including the chairman or alternate.
4. Decision Making
The decision-making provisions are as follows:
- Decision making in relation to the exercise of ALCO’s authority will only be taken through legitimate ALCO meeting decisions.
- ALCO meeting decisions are valid and binding if approved by 1/2 (one half) of the members with voting rights present plus 1 (one) vote.
5. Frequency of ALCO Meetings in 2020
As of December 31, 2020, ALCO held 20 (twenty) meetings with details of the attendance of ALCO members as follows:
Position Number of
Meetings Attendance Percentage
President Director (Jahja Setiaatmadja) 1) 20 20 100%
Deputy President Director (Suwignyo Budiman) 20 20 100%
Deputy President Director (Armand W. Hartono) 20 18 90%
Credit and Legal Director (Subur Tan) 20 20 100%
Corporate Banking Director (Rudy Susanto) 20 19 95%
Commercial and SME Banking Director (Henry Koenaifi) 20 20 100%
Regional and Branch Network Director (Erwan Yuris Ang) 20 18 90%
Compliance and Risk Management Director (Inawaty Handojo) 8 8 100%
Compliance and Risk Management Director (Haryanto T. Budiman) 2) 12 11 92%
Banking Transactions Director (Santoso) 20 19 95%
Planning and Finance Director (Vera Eve Lim) 20 19 95%
Executive Vice President (EVP) in charge of Treasury Division and
International Banking Division 20 18 90%
Executive Vice President (EVP) in charge of the Corporate Banking Group 20 15 75%
Executive Vice President (EVP) in charge of the Corporate Finance Division
and the Corporate Secretary and Communications Division 20 9 45%
Division Head Member or Representative Officer:
International Banking Division 20 18 90%
Treasury Division 20 20 100%
Corporate Finance Division 20 16 80%
Corporate Strategy and Planning Division 20 19 95%
Corporate Banking, Transaction, and Finance Group 20 18 90%
Commercial and SME Business Division 20 20 100%
Banking Transaction Product Development Division 20 17 85%
Banking Transaction Business Development and Marketing Division 20 19 95%
Banking Transaction Cooperation Solution Development Division 20 18 90%
Consumer Credit Business Division 20 19 95%
Risk Management Work Unit 20 20 100%
1) Chairman of ALCO
2) Assuming the position of Compliance and Risk Management Director replacing Mrs. Inawaty Handojo since June 2, 2020 (No. 067/SK/
KOM/2020)
The details of the implementation of ALCO meetings throughout 2020 are as follows:
No. Date Agenda
1 January 29, 2020 a. Follow-up report on the previous ALCO meeting resolutions.
b. Economic parameters which include inflation, Bank Indonesia interest rates, Term Deposit, Rupiah and USD yield curves, Rupiah and USD market liquidity, and Rupiah exchange rate.
c. Liquidity reserves comprising primary and secondary Rupiah and foreign exchange reserves, Rupiah and foreign exchange fund structure, credit projection, liquidity projection.
d. Banking Book Interest Rate Risk based on Earnings Perspective (NII method) and Economic Value Perspective (EVE method).
e. Development of Trading Book and Forex Interest Rate Risk.
f. Yield and Cost of Funds in rupiah and Foreign Currency.
g. Analysis of Assets Liabilities Management.
h. Stress Test for Liquidity Risk and Stress Test for Exchange Rate Risk and Trading Book Interest Rate.
i. Development of Bank Funds on Total Banking
j. Proposed Fund interest rate, Credit and Basic Credit Interest Rates (SBDK) k. Profit/loss projections.
2 February 25, 2020 3 March 17, 2020 4 March 27, 2020 5 April 15, 2020 6 April 27, 2020 7 May 15, 2020 8 May 29, 2020 9 June 22, 2020 10 June 29, 2020 11 July 17, 2020 12 July 28, 2020 13 August 12, 2020 14 August 25, 2020 15 September 15, 2020 16 September 28, 2020 17 October 14, 2020 18 October 23, 2020 19 November 16, 2020 20 December 21, 2020
6. Accountability Report
Accountability and realization of the committee’s work are reported through:
a. Minutes of regular meetings.
b. Minutes of special meetings held to discuss specific issues.
c. Data and information related to the areas covered.
d. Notes and ALCO’s opinion regarding the minutes of meetings and relevant data and information.
7. The Work Program Performance in 2020
Throughout 2020, ALCO has realized the following work programs:
a. Evaluating the strategy and the position of BCA assets and liabilities in accordance with the objective of liquidity risk management, interest rate and exchange rate.
b. Evaluating and establish the changes in interest rates funds and loans, the interest rate on a credit basis, and the limit related to Asset Liability Management (ALM).
c. Reviewing of the results of the simulation of the profit/loss in accordance with ALM strategy of BCA.
d. Establishing policy and strategy in the arrangement of balance sheet structure and investment portfolio.
8. Work Plan of ALCO
ALCO has established work plans for 2021 as follows:
a. Establish and evaluate policies and strategies for the management of BCA’s assets and liabilities to ensure liquidity, interest rate and exchange rate risks are controlled.
b. Establish and evaluate pricing policies and strategies for fund and loan products, as well as basic lending rates.
c. Establish and evaluate policies and strategies in structuring investment portfolios.
d. Establish and evaluate policies and strategies for arranging balance sheet structure by anticipating changes in interest rates to achieve an optimal net interest margin.
2. RISK MANAGEMENT COMMITTEE (RMC)
RMC was established to ensure that the risk management framework provides adequate protection against all BCA risks.