Corporate Secretary

In 2019, the Bank continued to focus on the improvement of asset quality and the number of customers, as well as the settlement of non-performing loans. In addition, the Bank also enhanced its human resources, information technology and business operations. The strategic measures taken include:

LOANS
The Bank’s main strategy is to expand its customer base, both of local and Japanese customers. The expansion of the customer base can reduce the risk of loan concentration. In its implementation, the Bank has performed a customer base expansion, an effective marketing system and a collaboration with Resona Group and also new shareholders to create a harmonious synergy for the Bank.

a. Increase in exposure to Japanese customers:

  1. The Bank will support newly established Japanese companies in their financing at the start of their investment by collaborating with Resona Group and new shareholders.
  2. Approaching and maintaining business relations with Japanese companies that operate in the industrial areas that are in the proximity of the Bank’s sub-branch offices. In addition, the Bank also takes a business approach with Japanese companies in which their parent companies have a business relationship with Resona Group and new shareholders.
  3. Acting as a mediator from customer to customer (C to C) by facilitating them in building new business alliances.

b. Increase in exposure to local customers:

  1. Maintaining sustainable growth with customers who have good business prospects and good business conditions.
  2. Exploring the companies group from existing debtors.
  3. Considering to increase the syndication loan numbers.

c. Loan quality improvement

  1. Improving loan quality by carrying out loan expansion with a prudent principle, applying a credit rating that reflects the proper and accurate conditions for the performance of customers/debtors, selecting the economic sector in accordance with predetermined industry limits and increasing the recovery rate of non-performing loans.
  2. Extending an Ad-hoc Team of Monitoring and Immediate Recovery for Credit (ATOMIC) with the aim to:
  • Maximize loan recovery from the Bank’s non performing loans as well as written-off loans.
  • Managing the NPL gross and NPL net ratios.
  • Preventing new non-performing debtors of the Bank.

CAPITAL
The Bank’s capital strategies in 2019 are:

  1. Maintaining the increase in the Bank’s profit achievement.
  2. Improving loan quality thereby reducing the loan impairment expense.
  3. Collaborate and synergize with all shareholders to continue developing business growth strategies.
  4. Controlling dividend payments at a reasonable level that can be accepted by the shareholders.

FUNDING
Optimizing the funding source by minimizing the amount of idle funds, by pursuing the growth in third party funds and reducing the amount of borrowings from other banks.

OPERATIONAL
During 2019, the Bank continued to strive to improve the quality of service to customers and improve the Bank’s operational standard system. As a step to improve service quality standards for customers, the Bank has initiated:

  1. Customer satisfaction survey with very satisfactory results in terms of human resources that still requires quality improvement for the transaction process and Bank’s facilities;
  2. Employee skills training related to graphonomy, identification of false documents and signatures;
  3. Socialization to customers regarding the regulation of Receiving Foreign Exchange Exports (DHE) from Business Activities, Management and/or Processing of Natural Resources (SDA) through announcements and bilateral communication;
  4. Preparation of the process for simplification of documents/forms used in opening deposit transactions so as to increase the convenience of customers in the transaction.

The improvement of the Bank’s operational standard system in 2019 was carried out through the preparation of the implementation of e-notes, namely notes/advice in electronic form, the distribution of which is sent to customer e-mails and is expected to be effectively implemented in 2020.

HUMAN RESOURCES AND ORGANIZATION DEVELOPMENT
In terms of developing human resources in 2019, the Bank enhanced the effectiveness of employee training by increasing the active role of the Bank’s internal instructors both Head of Divisions and Head of Sections, such as involving them as mentors for the Officer Development Program (ODP) during the On The Job Training period. In addition to increasing the skills as an internal instructor, the Bank conducts training for trainers for the Head of Divisions, training was held in November 2019.

The graduates of the first batch of ODP in 2018 currently has joined as employee in June 2019. The ODP graduates were placed in the Business Development Division, Strategic Business Division and Treasury Division, as well as in several supporting divisions for businesses such as the Credit Examination Division, the Planning and Finance Division and the Risk Management Division.

The Bank plans to continue the ODP program or similar programs for the next generation in 2020, as a continuation to the Human Resources development program.

COMPLIANCE
The Bank continuously strengthens the implementation of its Governance principles and maintains a minimum rating at 2nd rank or Good by enhancing the risk and compliance cultures, reducing operational risk events, and minimizing recurring audit findings from the Audit Division, Financial Services Authority and external auditors. The Bank has also improved the compliance function of PT Resona Indonesia Finance (RIF) as the subsidiary by conducting monthly discussions.

In order to ensure the implementation of 5 (five) basic principles of Good Governance, known as TARIF (Transparency, Accountability, Responsibility, Independency, Fairness), the Bank has conducted a self-assessment, which measures the quality of its management by focusing on the importance or materiality of the overall problem, in accordance with the scale, characteristics and complexity of its business.

The Bank has established a structure and infrastructure of good governance, which is required in its implementation to produce the outcome in accordance with the stakeholders’ expectation. The implementation tasks and responsibilities of the Board of Commissioners, the Board of Directors, the Committees and Working Units of the Bank, the implementation of policy and procedures, management information system and implementation of the main duty and function of each organization structure has run well and effectively (governance process) so as to produce an outcome which conforms with the expectations of the Stakeholders.

This is reflected in the success of maintaining the quality of qualitative and quantitative aspects, namely the sufficiently transparent financial and non-financial reports, compliance with the prevailing laws and regulations, customer protection, audit results and Bank performance.

In the reporting period there was no fraud and no violation of prudential principle rules. There was one weakness, namely a Human Resources who did not meet the Risk Management certification required by the regulator. It was necessary to improve the quality of debtor performance analysis conducted periodically, several Bank Business Plans were not reached according to the target, and there was the imposition of a financial penalty from the requlator related to reporting errors but it is insignificant and can be resolved by normal actions from the Bank Management.

INFORMATION SYSTEM TECHNOLOGY
To improve operational standards and systems development in the Bank, and in order to improve service delivery both internally and externally to customers, the Bank has made these improvements:

  1. On November 13, 2019, Soft Go Live began with a deployment process on the production server. PSAK 71 Expected Credit Loss (ECL) has been submitted to the OJK for November 2019 by using data calculation from the PSAK 71 Application.
  2. Renewal of server hardware infrastructure and network devices.
  3. Additional backup application to the backup server at the Biznet Cimanggis DRC location.

RISK MANAGEMENT
In order to create a risk culture that is in line with the conditions of the Bank and adjust the risk management process to the complexity of the business, the Bank has managed to maintain a composite rating of the Bank’s risk profile of a minimum of 2 (Good) for individuals and integrated by implementing:

  1. Collaborate and analyze 9 (nine) risks with risk owners related to individual and integrated risk profiles.
  2. Risk Management Committee Meeting which discussed individual risk profiles in the 4th quarter - 2018, 1st quarter-2019, 2nd quarter-2019 and 3rd quarter-2019, in addition it also discussed the review of the parameters and sub-parameters of the individual and integrated risk profile and conducted a review of the Bank’s Risk Profile Guidelines.
  3. Integrated Risk Management Committee Meeting which discussed the integrated risk profile in semester 2-2018 and semester 1-2019. In that meeting, the Bank collaborated with subsidiaries to provide and analyze integrated risk profile data.

In realizing strategies to strengthen the market and liquidity risk management, throughout 2019, the Bank has introduced:

  1. Implementation of risk management and risk measurement standardized approaches for interest rate risk in the banking book (IRRBB) in July 2019 by using data as of June 2019.
  2. Preparation of Net Stable Funding Ratio (NSFR) has been running in 2019 and the implementation is scheduled to take place in 2020.

The Bank actively monitors and enhances the understanding and implementation of “Risk Culture” in all levels of the organization throughout 2019 through activities:

  1. Bank’s Risk Management Division conducted a meetings with Head of Divisions and Directors in Charge with the topic of the meeting being the number of operational risk events in semester 2-2018 and semester 1-2019. The meeting was also attended by the President Director and Deputy President Director.
  2. Bank’s Risk Management Division conducted socialization awareness on operational risks to all Head of Divisions that not only contains information on operational risk awareness but also other risks as well as information on operational risk event data and the operational risk self-assessment process.
  3. Bank’s Risk Management Division has submitted an operational risk register report 2018 and is completing the operational risk register report 2019.
  4. Bank’s Risk Management Division has submitted an operational risk event report for 2019 and on a monthly basis from December 2018 to July 2019.
  5. Bank’s Risk Management Division has analyzed operational risk event data for 2018 by comparing 5 years historical data. Since March 2019, the socialization took place not only regarding operational risk event data but also the operational risk selfassessment process, in collaboration with the Internal Audit Division.
  6. Bank’s Risk Management Division has revised the sign board regarding operational risk awareness in quarter 1 and 2 for 2019, as well as adding anti-fraud content to the material displayed.
  7. Bank’s Risk Management Division, as part of Business Continuity Management (BCM) Team, prepared a Disaster Recovery Plan (DRP) and BCM in connection with the election period in 2019. Even though the situation was under control, the Bank continued to prepare a reserve location for Bank operations.
  8. Bank’s Risk Management Division collaborated with the Human Resources Division by asking each Head of Division and Head of Branch to ensure that their subordinates increased operational awareness in general and specifically to reduce operational risk events.
  9. Bank’s Risk Management Division developed the concept of risk culture in semester 2-2019, which currently only focuses on operational risk. The concept and awareness of risk culture must be embedded to all risks, this concept must be known by all employees. The next plan is to implement the concept of “risk based pricing” to analyze the Cost of Loanable Fund (CoLF) in collaboration with the Treasury Division, Business Development Division and Strategic Business Division.
  10. Bank’s Risk Management Division implemented a risk management forum regarding information technology risk and information system risk.
  11. Bank’s Risk Management Division completed the analysis of the Basic Indicator Approach (BIA) in November 2019 in collaboration with all BCM team members and all working units.

Throughout 2019, the Risk Management Division also carried out:

  1. Economic sector analysis for portfolio limits in collaboration with designated vendors quarterly and published in the Bank internal web which can be accessed by all of the Bank’s elements.
  2. Updated Guidelines and Policies in line with changes in Bank Indonesia and the Financial Services Authority regulations.
  3. Provided 146 memo risk opinions related to the Bank’s internal policies and guidelines, new product and activity proposals, liquidity, Cost of Loanable Fund (COLF), inter-bank funding facilities, Business Continuity Management (BCM) in the event of system failure.

AUDIT
The Audit Division provides input to enhance the Bank’s internal controlling as stated in the audit reports. Furthermore, in 2019, the Audit Division implemented several business plans:

1. Conducting Annual Risk Based Audits in order to give reasonable assurance to achieve the Bank’s strategic objective.

2. Promoting improvement and enhancement of internal control to other working units in order to improve the internal control of every process and improve the monitoring of second lines (risk management and compliance) by:

  • Educating and increasing the Bank’s employee awareness and understanding regarding Risk Management, Internal Control and Quality Improvement.
  • Routine coordination meeting with Compliance Director (including Head of Compliance Division and Head of Risk Management Division) to strengthening coordination efforts on Bank’s monitoring of the internal control system, management and governance.

3. Improving the conformance of audit methodology with International Standards issued by The Institute of Internal Auditors and maintained compliance with FSA regulation on the Internal Audit Function of Commercial Banks. To support this business plan, the Audit Division has conducted several actions, namely:

  • Introducing amendments to the Audit Charter and approved by President Director on April 12, 2019 and BOC on May 2, 2019.
  • Submitting an independent review of the Bank’s Audit Division performance, completed by RSM Indonesia for the FSA on August 14, 2019.

4. Enhancing internal auditors’ skill, knowledge, and competency in auditing areas:

  • Training Credit Risk Awareness.
  • Training Securities Document.
  • Training Graphonomy.
  • Training Fraud Detection & Investigation.
  • Compliance Forum related to Anti-Fraud.
  • IIA (Institute of Internal Auditors) Indonesia Sharing Session related “Women in Internal Audit Profession in Indonesia : Opportunities and Challenges”.
  • Training Syndication Loan.
  • Training Sustainable Finance.
  • Socialization of Customer Complaints Services.
  • General Meeting of IIA Indonesia Membership (Institute of Internal Auditors).
  • Exposure and Discussion on the Implementation of Internal Audit FSA Regulation.
  • Socialization on MoneyLIVE Indonesia 2019: Championing Innovation: Defining the Future of Indonesian Banking.
  • Training and Risk Management Certification Level 3.
  • Course and Internal Auditor Certification.
  • Conducting the Internal Sharing Session for POJK Number 1/POJK.03/2019.
  • Attending the IIA (Institute of Internal Auditors) Indonesia National Conference as moderator.
  • Green Office Training.
  • Robotic Automation Process (WinActor) Training.
  • Quality Assurance for Internal Audit Function Training.
  • Credit Analysis Training.
  • Training for Trainers of Carnegie Leadership.
  • Training in Signature and Documents Forgery.
  • Socialization of filling “Compliance Assessment Result Report (LHPK)” at Bank Indonesia.
  • Compliance Coordinator Meeting related to new external regulations for Asset Quality, Credit Lending Limit, Export Foreign Exchange Result, and Import Payment Foreign Exchange.

5. Enhancing continuous auditing implementation by creating autogenerated continuous audit reports in order to support the AMLCFT and KYC objectives and improve the Bank’s capability to enact control monitoring.

6. Assisting and supporting the same quality conformance of the PT RIF internal audit organization. Audit Division has communicated the request to PT RIF’s Audit Committee (Independent Commissioner) and Compliance Director in order to align their audit process with Bank’s Audit Division Policy and Procedure following the issuance of POJK Number 1/POJK.03/2019. Audit Division has issued letter on August 1, 2019 to Directors of PT RIF regarding their obligation to follow POJK Number 1/POJK.03/2019.

STRATEGIC PLAN 2020
Entering 2020, Bank Resona Perdania continues to strive to realize the Bank’s commitment to become a banking institution that prioritizes the best service (service excellence) for customers and business partners. To that end, the Bank has determined the following strategy focus:

  1. Maintaining or improving Risk Based Bank Rating (RBBR) minimum at level 2 or Sound which includes a composite rating of risk profile and rating of Good Governance implementation both individually and integrated with the subsidiary company of PT Resona Indonesia Finance (PT RIF).
  2. In maintaining the composite rating of risk profile and rating of Good Governance, the Bank has improved on the following:
    a. The compliance function is included in managing compliance risk and increasing the Implementation of the Anti-Money Laundering and Combating Financing Terrorism (AML and CFT) in accordance with applicable regulations.
    b. Risk management functions, including:
    1) Enhancing the role of the Risk Management Division in supporting the achievement of the Bank’s Business Plan, specifically related to determining risk at a reasonable level and focusing on maintaining loan quality, securing liquidity positions and a reasonable CAR ratio.
    2) Enhancing the role of the Risk Management Division by reviewing and providing recommendations on all Bank policies and procedures.
    3) Strengthening market and liquidity risk management by preparing for the implementation of risk management and risk measurement for a standard approach to interest rate risk in the banking book and preparation for the implementation of the NSFR (Net Stable Funding Ratio) application system.
    4) Cooperating with Resona Bank, Ltd., Japan to strengthen the implementation of risk management.
    c. Internal audit function, both in terms of human resources and audit methodology, and
    d. The function of committees is to make the committee’s roles effective, both committees that support the duties of the Board of Directors and the Board of Commissioners. To support this, the Audit Committee was included as a member of the Banking Audit Committee Association.
  3. Implementing sustainable finance with the priority on developing the Bank’s internal capacity through continued development training aimed to increase the capacity and capability of human resources.
  4. Maintaining a business model with a portion of the loan portfolio to Japanese and local companies in a balanced composition.
  5. Increasing the market share of corporate banking customers, both Japanese and local corporate customers through an effective marketing system and by providing support to customers through offering banking products needed by customers.
  6. Issuing new products in the form of:
    a. Negotiable Certificate Deposit (NCD) in Semester II of 2020. NCDs are issued by looking at market conditions and are an alternative to MTN issuance;
    b. Mobile Approver in Quarter III of 2020 as an effort to improve internet banking features;
    c. Mortgage Loans in Quarter IV of 2020 addressed to debtor’s customer employees.
  7. Performing several new activities as an effort to diversify business by making the Bank a reference provider for third parties’ products, by forming cooperation in the form of:
    a. Bancassurance referral related to Bank products in Quarter II of 2020, where the Bank plans to form partnerships with several loss insurance companies to insure the assets of the Bank’s debtor collateral.
    b. Reference Lending Through FINTECH in Quarter II of 2020, where the Bank seeks to reach the SME/Commercial market share, by providing loan facilities through the FINTECH (channeling) company to reach SME/Commercial segment customers.
  8. Participate in supporting the economic sectors that are the priorities of the Indonesian government’s policies, specifically marine, agriculture, tourism and infrastructure. Specifically for infrastructure, the Bank will continue to develop syndicated loans through cooperation with other banks and other multilateral financial institutions
  9. Improving loan quality by:
    a. Expanding loans with prudent principles.
    b. Maintaining the quality of the loan portfolio with a prudent approach to credit risk management.
    c. Applying a credit rating that reflects the proper and accurate conditions of the performance of customers/debtors.
    d. The selection of the economic sector is in accordance with established industry boundaries.
    e. Increase the recovery rate of non-performing loans.
    f. Improving loan quality by reviewing processes and procedures related to loan activities.
    g. Monitoring the implementation of the new Legal Lending Limit (LLL) and credit ceiling.
  10. Improving the Bank’s infrastructure by:
    a. Simplifying and standardizing business and operational processes.
    b. Improving the culture of company performance.
    c. Expanding the ability to provide loans.
  11. Increasing the amount of Bank capital by:
    a. Maintaining the earning assets quality, including through loan distribution by considering the prudent principle.
    b. Achieving the target of profit after tax.
    c. Controlling dividend payments at a reasonable ratio that can be accepted by shareholders.
  12. Improving the quality of human resources by:
    a. Plan and recruit human resources who have capabilities that are in accordance with the needs of the Bank and have the potential to be developed.
    b. Continue to develop the capabilities/competencies of human resources both in terms of hard skills and soft skills through ongoing training and education in accordance with the targets to be achieved.
    c. Increase the bond and commitment of human resources through the “employee engagement” program, developing non-financial reward systems, improving compensation systems and employee career paths.
    d. Increasing the knowledge of human resources, especially in risk management and credit examinations that will contribute to improve credit risk awareness and maintain asset loan quality at a sound level.
    e. Improve the ability of marketing officers in terms of risk awareness and increasing sensitivity to business volatility and economic fluctuations.
    f. Improve the competence of analysts through training related to credit and financial analysis, so as to improve the loan quality process.
    g. Improve the ability of human resources in the credit function, especially in terms of mitigating the assessment of collateral as well as verifying the completeness of documents.
    h. Develop a series of training that can improve staff knowledge and ability to handle and enhance support to customers through a variety of cutting-edge banking products.
    i. Continue sustainable finance training for a special team that handles sustainable finance programs, as well as continuing socialization to all Bank’s employees.
  13. Increasing assets of the Bandung Branch Office and Surabaya Branch Office respectively by around 7.5% from the end of 2019.
  14. Providing loans to MSMEs that are conducted according to the ability of the Bank as a corporate bank.
  15. Increasing total assets and total loans at the end of 2020, respectively by 8.05% and 8.81% compared to the end of 2019.
  16. Increasing low-cost funding sources, where the total third-party funds at the end of 2020 is projected to grow 9.85% compared to the end of 2019, reducing borrowing by 7.31% from 2019 (borrowing including subordinated borrowing), and issuing a securities in the form of MTN/NCD of IDR500 billion planned in the second semester of 2020 taking into account the economic conditions in Indonesia and the Bank’s funding needs.
  17. Maintaining and increasing the risk awareness that has been built so that the Bank’s NPL gross is below 2.50% and the NPL net is under 2.00% with an impairment expense of IDR80.8 billion.
  18. Net interest income remains the Bank’s main income with a target of IDR466.3 billion.
  19. The increase in Bank capital came from profit after tax, with a target of Bank profit after tax amounting to IDR61.8 billion and a total capital of IDR2.8 trillion.
  20. Optimizing the use of accounting information systems to support the provision of reports.
  21. Improving Bank processes and productivity to reduce operational costs, improving internet banking features (Mobile Approver & Trade Finance System) and implement Electronic Audit Management System and Loan Originating System, Teller System and SVS application systems (Retail Connection to Equation Branch Automatication).
  22. Monitoring the implementation of new applications such as the PSAK 71 application, the Net Stable Funding Ratio (NSFR) application, improvements to replace critical equipment, upgrading the Windows Server Operating System (OS) and Personal Computer Operating System (PC OS) to the latest version, increasing the back up application on DRC Site, Data Mart for Reporting, Customer Satisfaction Survey, automation process with robotic system, implementation of Automated Deposit Yield Regular Transfer, implementation of electronic forms using QR codes, implementation of Loan Originating System, monitoring stability of the implementation of the new Core Banking System, implementation of Trade Finance System and improvement/replacement of data warehouse usage that is currently used.
  23. Improving the function of human resources by strengthening human resources in each working unit, developing a system of rewards and sanctions, performance-based human resource evaluation mechanisms, implementing effective transfer of knowledge from foreign workers to local workers, innovating training programs and investing aggressively in the area of human resources.
  24. Ensuring the adequacy of human resources in each working unit both in quantity and quality so that it can support the Bank’s business, operational and reporting activities.
  25. Continuing the process of relocating the head office to the new building at Jl. Jend. Sudirman kav. 40-41, Central Jakarta.