procedures as well as the determination of risk limits can be seen from, amongst others:
1. An adequate formal organizational structure to support the implementation of sound risk management and internal control, including the DAI, SKMR, SKK, Risk Management Committee, and Integrated Risk Management Committee.
competencies, and risk appetite. The policy is reviewed regularly and adjusted in line with both internal and external developments/changes.
3. Policies, procedures, and determination of risk management limits have been fully documented in writing and are regularly reviewed and updated.
4. BCA has developed the Bank’s Business Plan (RBB) to address BCA’s overall strategy, including business development direction after calculating risks. BCA’s strategy considers its impact on the Bank’s capital, projected capital and Capital Adequacy Ratio (CAR).
1.C. Adequacy of Risk Identification, Measurement, Monitoring & Mitigation Processes, and Risk Management Information System
BCA has identified, measured, monitored, and controlled risk as part of the process of implementing adequate risk management, as seen from the following:
1. Risk exposure is monitored regularly and continually by the Risk Management Work Unit by comparing actual risk with the set risk limits, and whether risk exposure remains manageable according to the Bank’s risk tolerance level.
2. Reports on risk trends include a Risk Profile Report, Integrated Risk Profile Report, Credit Portfolio Report, and Corporate Business Plan Progress Report. These are submitted to the Board of Directors regularly, accurately and in a timely manner.
I.D. Comprehensive Internal Control System
BCA’s Internal Control consists of five main components that are in line with the Internal Control Integrated Framework developed by The Committee of Sponsoring Organization of the Treadway Commission (COSO), including:1. Management Oversight and Control Culture 2. Risk Recognition and Assessment
3. Control Activities and Segregation of Duties 4 Accountancy, Information and Communication 5. Monitoring Activities and Correcting
Deficiencies.
With the three-lines model concept, BCA’s internal control system and risk management involve all levels of the organizational structure, with oversight by the Board of Commissioners and the Board of Directors.
To support the implementation of an internal control system, BCA has a fully documented risk management policy, which includes internal control (clear organizational structure, segregation of duties, risk limit procedures, and others). BCA strongly encourages a risk awareness culture and compliance with applicable policies and regulations.
Risk management guidelines and policy implementation are monitored by the Risk Management Work Unit (SKMR) and Compliance Work Unit (SKK), which function as the Second Line Role.
To support the implementation of integrated risk management, BCA has established a comprehensive internal control system that ensures the following:
1. adherence to internal policies or provisions as well as applicable laws and regulations;
2. availability of complete, accurate, appropriate and timely financial and management information;
3. effectiveness of risk culture in the Financial Conglomerate organization as a whole.
Risk Management and Internal Control Organizational Structure
Credit Risk
Management Market Risk Management
Operational Risk Management
Business Continuity & Crisis
Management Enterprise
Risk Management
GENERAL MEETING OF SHAREHOLDERS
Asset & Liability Committee Credit Policy Committee
Risk Management
Committee Information Technology
Steering Committee
Employee Relations Committee Integrated Risk Management
Committee Credit Committee
PRESIDENT DIRECTOR
DEPUTY PRESIDENT DIRECTOR
(IT & DIGITAL BANKING) DEPUTY PRESIDENT DIRECTOR (BUSINESS BANKING & OPERATION)
Risk Oversight Committee Integrated Corporate Governance
Committee Audit Committee Remuneration and Nomination
Committee
BOARD OF COMMISSIONERS BOARD OF DIRECTORS
SUBSIDIARIES Central Capital
Ventura
BCA Finance Ltd.
Hong Kong BCA Syariah Bank Digital
BCA
BCA Finance BCA Multi
Finance Asuransi Umum BCA Asuransi Jiwa
BCA BCA Sekuritas
Credit Risk Analysis
Legal
COMPLIANCE & HUMAN CAPITAL MANAGEMENT
DIRECTOR2)
RISK MANAGEMENT DIRECTOR2) CREDIT &
LEGAL DIRECTOR
EXECUTIVE VICE PRESIDENT
Credit Recovery
Internal
Audit1) Anti
Fraud
communication lines monitoring lines reporting lines
coordination lines
1. Oversee internal audit / risk management / compliance function of subsidiaries in association with integrated corporate governance & integrated risk management application.
2. Compliance & Risk Management Director oversees subsidiaries risk as part of integrated risk management
system, assisted by the committees under them. These committees meet regularly to discuss and provide input and recommendations to the Board of Commissioners and the Board of Directors.
The Bank also conducts regular evaluations on the following:
• Applicable policies and methodologies for risk assessments
• Adequacy of policies, procedures, and determination of risk limits
• Adequacy of identification, measurement, monitoring, and mitigation of risks
• Effectiveness of a comprehensive internal control system.
Evaluation and updating of policies, procedures and methodologies are conducted regularly to ensure compliance with applicable regulations and operational conditions. Evaluation of the effectiveness of risk management is also conducted through regular reports submitted to the Board of Commissioners and the Board of Directors. These reports include a Risk Management Policy Implementation Report, Risk Profile Report, Risk Update, and other related reports.
Implementation of Basel Accords
The Bank continues to prepare for the implementation of the Basel Accords in Indonesia and participates in supporting the implementation of Basel III, both in capital
Risk.
Risk Appetite
The Bank defines risk appetite as the level and type of risks which the Bank is willing to take to achieve its business objectives. The risk appetite set by BCA is reflected in the Bank’s business strategies and objectives.
Stress Test
BCA continually and regularly performs stress testing under a variety of scenarios and consistently deepens the factors and parameters of these tests. Stress test scenarios consider macroeconomic variables such as interest rates, inflation rates, gross domestic product (GDP), exchange rates, fuel prices and others. The methodology used in conducting stress tests, in addition to statistical models based on historical data, also employs judgment methods that consider qualitative risk factors.
Stress testing is carried out to see the impact of changes in macroeconomic factors on various key indicators, including the NPL, profitability, liquidity, and capital.
The results of the Bank’s stress testing for credit, market, and liquidity risks have been satisfactory, while the capital and liquidity of the Bank are sufficient to anticipate estimated potential losses based on the built-in scenarios.
Additional to these Bank-only stress tests, BCA has conducted an integrated stress test that includes its subsidiaries.
II. BCA Capital Capital Structure
BCA’s capital structure consists of the following:
1. Core capital (Tier 1) accounting for 96.3% of total capital at Rp212.4 trillion, up 8.3% from the previous year.
2. Meanwhile, 3.7% of BCA’s total capital, or Rp8.1 trillion, is supplementary capital (Tier 2). Supplementary capital consists mainly of general reserves for Allowance of Asset Quality Assessment (PPKA).
Capital Component (consolidated - in billion Rupiah)
2022 2021 2020
Capital 220,568 203,621 186,953
Tier 1 Capital 212,446 196,114 179,945
Tier 2 Capital 8,123 7,507 7,008
Risk Weighted Assets
(Credit, Operational and Market Risk) 821,723 758,289 695,144
Capital Adequacy Ratio (CAR) - consolidated 26.8% 26.9% 26.9%
Capital Adequacy Ratio (CAR) - non consolidated 25.8% 25.7% 25.8%