ANALYST MEETING PT Bank Tabungan Negara (Persero) Tbk. Business & Financial Performances as of December 31, 2017 Jakarta, February 13 th 2018
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Outline Page Macroeconomy 4 FY 2017 Summary & 2018 Guidelines 9 Performance Overview 14 Sharia Business 39 Appendices 42 3
1. Macroeconomy 4
Macroeconomy: Manageable Inflation & Lower Benchmark Rate Low Inflation & Interest Rate Robust Economic Growth Inflation was controlled at 3.61% (yoy) in December 2017, still within BI s target of 4±1%. During 2017, Bank Indonesia cut its policy rate twice in total of 50bps, bringing the BI 7-Day RR Rate to 4.25% despite the FFR hike. 2017 GDP growth was 5.07% (yoy), Indonesia s Economy is expected to build further momentum in 2018. Bank Indonesia projects economic growth at 5.1%-5.5% (yoy) in 2018. 5
Banking System: Loan was Limited, Decelerated Deposit Growth Weak Loan & Deposit Growth Loan growth still limited at 7.5% (yoy) in Nov 2017. Likewise, deposit growth decelerated to 9.8% (yoy) in Nov 2017 after showing a rebound in Sep 2017. Relatively Flat Trend of NPL NPL gross slightly decreased to 2.9% in Nov 2017, experienced a flat trend during the last six months. 6
BBTN Loan & Deposit: Above Industry s Growth Robust Loan Growth In Dec 2017, BBTN Loan grew by 21.01% (yoy), far above industry growth at 7.5% (yoy) in Nov 2017. Its acceleration was sustained by Subsidized Mortgages. Strong Deposits Growth Total Deposits of BBTN increased by 20.45% (yoy) in Dec 2017. Meanwhile industry recorded at 9.8% (yoy) in Nov 2017. 7
Housing Industry: Slower Growth of Residential Property Prices Residential Property Price Index Growth of Property Sales (% qtq) Residential Property Price Index in 3Q17 decelerated quarterly from 1.18% (qtq) to 0.5% (qtq) but grew annually at 3.32% (yoy), up from 3.17 % (yoy). The rising prices affected all property types, especially medium houses. Residential property sales decelerated from 3.61% (qtq) to 2.58% (qtq) in line with limited demand for houses. Source: Bank Indonesia Residential Property Survey for Primary House 8
2. FY 2017 Summary & 2018 Guidelines 9
Bank BTN s Support to the 1 Million Houses Program 2017 Achievement Loan Type Target (Unit) Mortgage Disbursed 2017 Approved prior to 2017 Progress as of Dec 31, 2017 Construction Loans Support in Progress Approved in 2017 Unit IDR Bn Unit IDR Bn Unit IDR Bn Unit IDR Bn Unit IDR Bn Subsidized Mortgage 504,122 199,780 23,499 110,012 4,503 171,537 6,160 281,549 10,663 481,329 34,162 Non Subsidized Mortgage 161,878 53,003 16,803 88,197 13,240 44,783 7,333 132,980 20,573 185,983 37,376 TOTAL 666,000 252,783 40,302 198,209 17,743 216,320 13,493 414,529 31,236 667,312 71,538 Total Total 2018 Target (Unit) Loan Type Mortgages Construction Total Subsidized Mortgage 248,368 288,500 536,868 Non Subsidized Mortgage 76,869 136,263 213,132 TOTAL 325,237 424,763 750,000 10
FY17 Key Takeaways Robust Loan Growth Sufficient Liquidity Loan growth was 21.01% (yoy), supported by the government program of 1 million houses Subsidized mortgage demand remained strong with 32.45% (yoy) growth Sustaining the leadership of mortgage in Indonesia by 36.3% & holding 95.42% of national subsidized mortgage disbursement Deposits rose by 20.45% (yoy) LCR was sufficient at 144.95% Wholesale funding of IDR17.525 trn and USD29 mio from NCD, bilateral loans and bonds issuance Solid Profitability Net profit increased by 15.59% (yoy) Net interest income raised by 14.45% (yoy), fee income grew by 25.93% (yoy) Improved Asset Quality NPL gradually improved to 2.66%, lower than 2.84% in Dec 2016 Special-Mentioned Loans also improved from 10.22% to 8.77% in Dec 2017 NPL on subsidized mortgage continued to improve, while construction & commercial loans significantly got better 11
2018 Grand Strategy Sustainable Growth Strengthening positioning in mortgage and construction value chain Strengthening funding structure and CASA ratio Increasing noninterest income Increasing effectivity in collections and asset recovery Capital Support Increasing Human Capital Quality and Productivity Strengthening Risk Management and Integrated GRC Increasing IT Capability to Support Digital Banking and Digitalization Process 12
2018 Target Growth Total Asset : 17% - 20% Total Loan & Financing : 22% - 24% Total Deposits : 19% - 22% Equity : 13% - 15% Net Profit : > 25% Ratio CAR : 16% - 18% NPL (Gross) : 2.3% - 2.5% N I M : 4.5% - 5% R O E : 18% - 20% R O A : 1.7% - 1.9% L D R : 105% - 107% 13
3. Performance Overview 14
Financial Highlight (IDR Billion) FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 y.o.y INDUSTRY (NOV 2017) TARGE BBTN 201 Total Asset 131,170 144,582 171,808 214,168 261,364 22.04% 9.73% 18% - 20% Total Loan & Financing 100,467 115,916 138,956 164,446 198,991 21.01% 7.50% 21% - 23% Total Deposits 96,213 106,479 127,746 160,192 192,949 20.45% 9.80% 22% - 24% Equity 11,557 12,253 13,860 19,131 21,663 13.24% > 12% Net Profit 1,562 1,146 1,851 2,619 3,027 15.59% 16.48% > 15% Earning per Share (IDR) 148 108 175 247 286 15.59% CAR (Tier 1) 14.91% 14.07% 14.87% 16.54% 15.99% 21.69% CAR (BI) 15.62% 14.64% 16.97% 20.34% 18.87% 23.20% 16% - 18% NPL (Gross) 4.05% 4.01% 3.42% 2.84% 2.66% 2.89% < 2.5% NPL (Nett) 3.04% 2.76% 2.11% 1.85% 1.66% 1.25% < 1% N I M 5.44% 4.47% 4.87% 4.98% 4.76% 5.31% 4.5% - 5% C I R 50.86% 57.21% 50.08% 48.41% 50.19% COVERAGE RATIO 27.97% 33.77% 43.14% 45.25% 45.33% ROE 16.05% 10.95% 16.84% 18.35% 18.11% 17% - 19% ROA 1.79% 1.14% 1.61% 1.76% 1.71% 2.48% 1.6% - 1.8 LDR 104.42% 108.86% 108.78% 102.66% 103.13% 88.97% 101% - 103 LCR 165.98% 162.25% 144.95% 15
Balance Sheet (IDR Billion) FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 y.o.y Total Assets 131,170 144,582 171,808 214,168 261,364 22.04% Total Earning Assets 118,305 132,192 157,049 195,780 234,161 19.60% - Term Deposit with BI 4,834 1,496 7,529 17,581 18,693 6.32% - Loans and Financing 100,467 115,916 138,956 164,446 198,991 21.01% - Securities 12,595 13,684 10,001 12,785 15,252 19.30% - Other Earning Assets 408 1,095 562 968 1,225 26.56% Provision on Earning Asset (1,148) (1,581) (2,064) (2,132) (2,373) 11.30% Others 14,013 13,972 16,823 20,520 29,577 44.13% Deposits 96,213 106,479 127,746 160,192 192,949 20.45% Securities Issued 8,837 7,939 10,937 12,935 17,932 38.63% Deposits from Other Banks 285 1,770 3,255 5,459 8,035 47.19% Repurchase Agreements 2,653 3,818 2,135 1,385 1,401 1.12% Borrowings 7,070 6,996 7,725 7,999 10,990 37.40% Others 4,556 5,329 6,151 7,068 8,394 18.76% Equity 11,557 12,253 13,860 19,131 21,663 13.24% 16
Asset Composition Total Assets (IDR Trillion) Assets Composition (%) 17
Earning Asset Composition Total Earning Asset (IDR Trillion) Earning Asset Composition (%) 18
Loans Composition: Focused on Housing Loans Loans Type 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 IDR Bn Shares IDR Bn Shares IDR Bn Shares IDR Bn Shares IDR Bn Shares y.o.y Housing Loans 87,005 86.60% 102,614 88.52% 124,927 89.90% 147,948 89.97% 179,228 90.07% 21.14% Subsidized Mortgages 28,429 28.30% 34,347 29.63% 43,527 31.32% 56,835 34.56% 75,278 37.83% 32.45% Non-Subsidized Mortgages 39,548 39.36% 45,601 39.34% 53,567 38.55% 60,469 36.77% 69,309 34.83% 14.62% Other Housing Loans 7,198 7.16% 8,179 7.06% 8,934 6.43% 8,723 5.30% 8,561 4.30% -1.86% Construction Loan 11,829 11.77% 14,486 12.50% 18,900 13.60% 21,921 13.33% 26,081 13.11% 18.98% Non-Housing Loans 13,463 13.40% 13,302 11.48% 14,029 10.10% 16,498 10.03% 19,763 9.93% 19.78% Consumer Loan 2,597 2.59% 2,916 2.52% 3,839 2.76% 4,738 2.88% 4,813 2.42% 1.59% Commercial Loan 10,865 10.81% 10,386 8.96% 10,190 7.33% 11,761 7.15% 14,950 7.51% 27.12% Total Loans 100,467 100.00% 115,916 100.00% 138,956 100.00% 164,446 100.00% 198,991 100.00% 21.01% Gross Loan (IDR Trillion) Housing and Non-Housing Loans (%) Note : Figures on graph and table include Sharia Financing 19
Mortgages: Growth Remained Strong Total Mortgages (IDR Billion) Mortgage Composition (%) Subsidized Mortgages (IDR Billion) Non Subsidized Mortgages (IDR Billion) Note : Figures on all graphs include Sharia Financing 20
Loan Disbursement: Mainly Driven by Subsidized Mortgages IDR Trillion IDR Billion IDR Bio Loans Type FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 y.o.y Housing Loans 33,955 34,029 41,812 47,216 57,888 22.60% Subsidized Mortgages 6,506 7,960 12,771 17,527 23,499 34.08% Non-Subsidized Mortgages 14,286 12,629 13,404 14,315 16,803 17.38% Other Housing 2,500 2,416 2,418 1,823 1,825 0.14% Construction Loan 10,663 11,023 13,219 13,551 15,761 16.30% Non-Housing Loans 10,338 7,569 9,434 12,043 17,087 41.88% Consumer Loan 2,389 2,564 4,268 4,779 6,578 37.65% Commercial Loan 7,949 5,005 5,166 7,264 10,508 44.67% Total Loans 44,293 41,598 51,246 59,259 74,975 26.52% Note : Figures on graph and table include Sharia Financing 21
Loan Quality: NPL Continues to Improve Gross NPL (%) Net NPL (%) Note : Figures on graph include Sharia Financing 22
Loan Quality Breakdown: Better Commercial Loans Collectibility 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 IDR Bn Share IDR Bn Share IDR Bn Share IDR Bn Share IDR Bn Share Current 84,301 83.91% 95,262 82.18% 116,887 84.12% 142,963 86.94% 176,247 88.57% Special Mentioned 12,101 12.04% 16,004 13.81% 17,316 12.46% 16,807 10.22% 17,455 8.77% PL 96,402 95.95% 111,266 95.99% 134,203 96.58% 159,770 97.16% 193,703 97.34% Substandard 458 0.46% 338 0.29% 250 0.18% 260 0.16% 236 0.12% Doubtful 457 0.45% 454 0.39% 359 0.26% 333 0.20% 349 0.18% Loss 3,151 3.14% 3,859 3.33% 4,144 2.98% 4,083 2.48% 4,703 2.36% NPL 4,066 4.05% 4,650 4.01% 4,753 3.42% 4,676 2.84% 5,288 2.66% PL + NPL 100,467 100.00% 115,916 100.00% 138,956 100.00% 164,446 100.00% 198,991 100.00% NPL Gross 4.05% 4.01% 3.42% 2.84% 2.66% NPL Netto 3.04% 2.76% 2.11% 1.85% 1.66% Loan Type (Gross) 2013 2014 2015 2016 2017 Housing Loans 3.80% 3.43% 2.79% 2.36% 2.31% Subsidized Mortgage 31-Dec 5.24% 3.96% 2.48% 1.52% 1.16% Non-Subsidized Mortgage 2.61% 2.51% 2.57% 2.65% 3.00% Other Housing Loans 3.17% 3.47% 3.44% 3.59% 4.09% Construction Loan 4.75% 5.13% 3.81% 3.21% 3.14% Non-Housing Loans 5.60% 8.51% 9.02% 7.14% 5.82% Consumer Loan 2.03% 2.55% 2.17% 1.35% 1.34% Commercial Loan 6.63% 10.16% 11.57% 9.44% 7.99% Total Loans 4.05% 4.01% 3.42% 2.84% 2.66% Note : Figures on all tables include Sharia Financing 23
Special-Mentioned Loan Special-Mentioned Loan (%) Special-Mentioned by Loan Type (%) Note : Figures include Sharia Financing 24
Restructured Loan Restructured Loan in FY17 (IDR Billion) Restructured Loan by Quality in FY17 (%) Restructured Loan Outstanding (IDR Billion) Note : Figures include Sharia Financing 25
Liabilities: Sufficient to Support Loan Growth Total Liabilities (IDR Trillion) Funding Composition (IDR Trillion) Funding Composition (%) 26
Deposits Total Deposits Mix (IDR Trillion) Deposits FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 y.o.y Current Account 19.12 23.23 31.37 45.85 54.66 19.21% Savings Account 24.24 25.55 30.76 34.83 40.95 17.57% Time Deposits 52.86 57.70 65.62 79.52 97.35 22.42% Total 96.21 106.48 127.75 160.19 192.95 20.45% CASA Composition (%) 27
Equity (1/2) Total Equity (IDR Trillion) CAR - BI (%) 28
Equity (2/2) 2013 2014 2015 2016 2017 Tier - 1 Capital 9,879 10,736 12,172 16,443 18,728 Tier - 2 Capital 722 797 1,721 3,776 3,368 Capital on B/S 11,557 12,253 13,860 19,131 21,663 RWA - Credit Risk 57,749 66,251 70,474 86,189 101,494 RWA - Market Risk 284 226 223 344 664 RWA - Operational Risk 8,229 9,856 11,185 12,899 14,934 RWA - Total 66,262 76,333 81,882 99,432 117,092 CAR Tier 1/(Total RWA) 14.91% 14.07% 14.87% 16.54% 15.99% CAR B/S/(Total RWA) 17.44% 16.05% 16.93% 19.24% 18.50% CAR BI ((Tier 1+2)/(Total RWA)) 15.62% 14.64% 16.97% 20.34% 18.87% CAR Tier 2 2.10% 3.80% 2.88% Capital Conservation Buffer 0.63% 1.25% Countercyclical Buffer 0.00% 0.00% Capital Surcharge (D-SIB) 0.25% 0.50% 29
Income Statement (IDR Billion) FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 y.o.y Interest Income 11,197 13,374 15,567 17,852 20,081 12.49% Interest Expense (5,558) (7,893) (8,700) (9,600) (10,637) 10.80% Net Interest Income 5,639 5,482 6,867 8,252 9,444 14.45% Other Operating Income 798 923 1,132 1,285 1,611 25.39% Other Operating Expense (4,301) (4,828) (5,465) (6,184) (7,163) 15.83% Profit From Operating 2,136 1,577 2,534 3,352 3,892 16.10% Non Operating Income (Expense) 5 2 8 (22) (30) 37.02% Profit Before Tax 2,141 1,579 2,542 3,330 3,862 15.96% Net Profit 1,562 1,146 1,851 2,619 3,027 15.59% 30
Interest Income Composition (IDR Billion) FY2013 FY2014 FY2015 FY2016 FY2017 Y.o.Y Placement with Bank Indonesia 74 81 107 111 154 38.30% Placement with other bank 63 40 37 56 15-72.61% Securities 726 982 858 971 971 0.07% Loan 9,605 11,353 13,523 15,458 17,387 12.48% Income from Syariah 729 919 1,042 1,256 1,553 23.62% Total 11,197 13,374 15,567 17,852 20,081 12.49% 31
Interest Expense Composition (IDR Billion) FY2013 FY2014 FY2015 FY2016 FY2017 Y.o.Y Bank Indonesia 5 2 1.06 - - - Deposits from other Banks 39 84 328 285 394 38.21% Deposits from Non Banks 4,082 6,290 6,750 7,363 7,946 7.91% Securities Issued 826 787 883 1,088 1,368 25.77% Fund Borrowings 450 529 516 718 837 16.65% Others 157 201 222 147 92-37.22% Total 5,558 7,893 8,700 9,600 10,637 10.80% 32
Other Operating Income Composition (IDR Billion) FY2013 FY2014 FY2015 FY2016 FY2017 Y.o.Y Marked to market 17 7-10 7-26.22% Gain 32 112 170 273 396 45.46% Reversal on Provisions 8 5 7.51 0.10 (0.47) -578.83% Commissions, Services & Admin Fee *) 31 496 596 656 893 36.23% Others *) 709 303 358 347 315-9.25% *) Reclassified Total 798 923 1,132 1,285 1,611 25.39% 33
Other Operating Expense Composition (IDR Billion) FY2013 FY2014 FY2015 FY2016 FY2017 Y.o.Y Provisions 441 777 901 708 884 24.92% Salaries & Employee Benefit 1,161 1,260 1,459 1,619 1,907 17.80% Electricity, Telp, Office Supp. 365 494 591 660 853 29.34% Others 337 227 422 452 592 30.87% Rent, Service & Maintenance 482 542 563 703 799 13.68% Depreciation 279 226 196 219 216-1.65% Promotion 411 509 417 402 523 30.12% Collector Fees & Consultant 386 451 544 684 814 18.94% Insurance Premium 175 217 245 303 366 20.75% Training 110 107 106 136 165 21.15% Research & Development 4 6 7 14 13-4.12% Other Taxes 6 8 8 9 10 14.54% Gain 1 3 4 2 0.42-75.48% Marked to Market 144 0.00 0.19 0.00 1.00 235062.62% Allowance related to Operational Risk - - - 274 19-92.97% Total 4,301 4,828 5,465 6,184 7,163 15.83% 34
Key Financial Ratios (1/4) Net Income (IDR Billion) Net Interest Margin Cost Income Ratio *) Note : *) Reclassified 35
Key Financial Ratios (2/4) ROA 1 before tax ROA 2 after tax 1 Calculated based on income before income tax (include tax benefit and extraordinary item)/ average total assets based on Bank Indonesia regulation 2 Calculated based on net profit/average total assets 36
Key Financial Ratios (3/4) ROE 3 tier 1 capital ROE 4 balance sheet 15.28% 3 Calculated based on net profit/average Tier 1 capital based on Bank Indonesia regulation 4 Calculated based on net profit/total stakeholder s equity 37
Key Financial Ratios (4/4) Loan-to-Deposit Ratio Liquidity Coverage Ratio 38
4. Sharia Business 39
Sharia Business Sharia Net Profit (IDR Billion) Sharia Assets (IDR Billion) Sharia Deposits (IDR Billion) 40
Sharia Financings & NPF Sharia Financings (IDR Billion) Sharia Disbursement (IDR Billion) Sharia NPF (Gross) (%) Sharia NPF (Net) (%) 41
5. Appendices 42
Shares Information Share Ownerships Composition as of Dec 31, 2017 Ownership # of Shares % G O I 6,354,000,000 60.00% Public 4,236,000,000 40.00% - Domestic 1,064,539,756 10.05% - Foreign 3,171,460,244 29.95% Total 10,590,000,000 100.00% Period Opening Lowest Highest Closing Average Volume (Lots) PBV (x) BVPS Market Cap (IDR Million) FY 2017 1,745 1,695 3,610 3,570 209,739 1.75 2,046 37,806,300 FY 2016 1,300 1,280 2,100 1,740 202,509 0.96 1,806 18,426,600 % (yoy) 34.23% 32.42% 71.90% 105.17% 3.57% 81.19% 13.24% 105.17% IPO by listed on IDX on 17 December 2009 at IDR800 per share Rights issue successfully done in November 2012 by issuing additional 1.512.857.500 new shares Market cap as of Dec 31, 2017 was IDR 37.81 Trillion 43
Outlets Sumatera Regional Offices 1 Branch Offices 12 Sub Branch Offices 44 Cash Outlets 61 Sharia Outlets 11 Priority Outlet 6 Post Offices 700 ATMs 256 Kalimantan Regional Offices - Branch Offices 6 Sub Branch Offices 18 Cash Outlets 20 Sharia Outlets 4 Priority Outlet 5 Post Offices 299 ATMs 94 Jawa Regional Offices 3 Branch Offices 45 Sub Branch Offices 185 Cash Outlets 368 Sharia Outlets 53 Priority Outlet 26 Post Offices 1,627 ATMs 1,437 I N D O N E S I A Bali & Nusa Tenggara Regional Offices - Branch Offices 3 Sub Branch Offices 9 Cash Outlets 10 Sharia Outlets 1 Priority Outlet 2 Post Offices 141 ATMs 50 Sulawesi Regional Offices 1 Branch Offices 6 Sub Branch Offices 16 Cash Outlets 21 Sharia Outlets 3 Priority Outlet 2 Post Offices 126 ATMs 103 Papua & Maluku Regional Offices - Branch Offices 3 Sub Branch Offices 3 Cash Outlets 4 Sharia Outlets - Priority Outlet - Post Offices 61 ATMs 24 2013 2014 2015 2016 2017 Regional Offices 3 3 4 4 5 Branch Offices 65 65 65 65 75 Sub Branch Offices 223 223 223 243 275 Cash Outlets 479 479 479 477 484 Sharia Outlets 50 50 50 65 72 Priority Outlet 23 34 39 40 41 Total Outlets 843 854 860 894 952 Post Offices 2,922 2,951 2,951 2,951 2,954 ATMs 1,504 1,830 1,830 1,900 1,964 Employees 8,011 8,582 9,042 9,380 12,275 44
THANK YOU Investor Relations PT Bank Tabungan Negara (Persero) Tbk Menara BTN Lt. 20 - Jl Gajah Mada No. 1 Jakarta Pusat 10130 Telp : +62 21 63870142 / +62 21 63870107 Facs: +62 21 63870104 Email : investor_ relations@btn.co.id Website : www.btn.co.id 45