Growth Driver
    Category: SOEs By : Ardian Wibisono Read : 215 Date : Tuesday, May 01, 2018 - 14:53:17

    Iwan Stratocaster for Forbes Indonesia

    President Joko Widodo has embarked an infrastructure buildup to improve connectivity across the archipelago, lower logistics cost and improve competitiveness. In 2015, the government estimated that infrastructure development to 2019 would cost a staggering Rp 4,800 trillion, which clearly needs external funding sources including from the banking sector. Led by President Director Achmad Baiquni, 61, PT Bank Negara Indonesia (BNI), has been taking the opportunity of infrastructure development as a growth engine. Last year, nearly 53% of BNI outstanding loans of Rp 441.3 trillion were disbursed in corporate loans, the highest ratio among major lenders such as Bank Mandiri, Bank Rakyat Indonesia, and Bank Central Asia. Of that figure, over Rp 99.5 trillion—about 22%—went to finance infrastructure projects such as constructing toll roads and power plants. The infrastructure loan portion is up significantly from Rp 54.1 trillion in 2015, when Baiquni became president director.

    As a result, last year BNI booked a healthy growth with several indicators above the industry average. BNI loans grew by 12.2% above the industry growth of 8.2%, net interest margin stood at 5.5% above industry’s 5.3%, nonperforming loans (NPL) dropped to 2.3% below the sector’s 2.6%, and the bottom line grew by 20.1% to Rp 13.6 trillion. BNI’s stock is also up 35% for the year, to about Rp 9,000, giving the bank a market cap around Rp 158 trillion. Recently securities company Bahana Sekuritas brought BNI’s management team to meet with mostly Japan and U.S. investors in Tokyo, and Bahana analyst Henry Wibowo says investor feedback towards the lender was generally positive as a result of the bank’s turnaround in the past two or three years to focus towards lower-risk SOE loans.

    “We are heading towards growth. Where there’s growth, we will be there—but not just good growth but also the ones with good margins,” says Baiquni. He’s a veteran banker who started his career at the bank in 1984, and rose up through the ranks. In 2010, he left BNI to become finance director at Bank Rakyat Indonesia, the country’s largest lender by assets, only to return in 2015 to replace Gatot Suwondo as president director. Baiquni got his BA in economics from Padjajaran University and a MA in business management from the Asian Institute of Management in the Philippines.

    This year, Baiquni feels the domestic and global economic conditions will improve and remain favorable towards the lender. He notes that despite the U.S. Federal Reserve turning more hawkish, and raising rates, with plans of further increases, it is a sign that U.S. economy is improving. The Fed raised its benchmark interest rate in March by a quarter point to 1.75%. Recovery signals can also be seen in Europe—though the impact of Brexit remains unclear. Thus, BNI expects commodity prices will improve as demand grows. BNI also expects similar improvements in the domestic economy. Last year Indonesia’s GDP grew by 5.1%, the highest since 2014, and the government looks to maintain that the pace by targeting 5.3% growth despite possible political disturbances from the 2019 general election and presidential election preparations.

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