PT Bank Rakyat Indonesia Persero Tbk : Q3 - 2023 Financial Update Presentation

3Q 2023

FINANCIAL UPDATE PRESENTATION

PT Bank Rakyat Indonesia (PERSERO) Tbk.

SHARE PRICE PERFORMANCE & OWNERSHIP

Ownership Composition as of 3Q23

No		Description	No. of Investor	%	No. of Shares	%
I	Domestic
	1.	Government of RI	1	0.00%	80,610,976,876	53.19%
	2.	Retail	315,600	97.10%	2,773,358,225	1.83%
	3.	Employee	5,636	1.73%	17,862,092	0.01%
	4.	Cooperatives	14	0.00%	5,501,933,323	3.63%
	5.	Foundation	38	0.01%	252,407,856	0.17%
	6.	Pension Funds	146	0.04%	1,791,166,667	1.18%
	7.	Insurance	188	0.06%	2,132,872,356	1.41%
	8. Bank	8	0.00%	784,490,487	0.52%
	9.	Corporations	311	0.10%	178,014,977	0.12%
	10. Mutual Funds	327	0.10%	1,937,650,336	1.28%
	11. Local Government	1	0.00%	1,590,000	0.00%
	Total Domestic	322,270	99.15%	95,982,323,195	63.33%
II	Foreign
	1.	Retail	347	0.11%	38,468,875	0.03%
	2.	Institutional	2,417	0.74%	55,538,209,534	36.64%
	Total Foreign	2,764	0.85%	55,576,678,409	36.67%
III	Total	325,034	100.00%	151,559,001,604	100.00%

Source : Datindo

BBRI Share Performance vs JCI since IPO

BBRI		JCI	Since IPO
			BBRI +60.2x
			JCI +10.1x
			6021%

1007%

2

OVERVIEW

MACRO ECONOMIC METRICS REMAIN SOLID

Strong 2Q GDP Supports Stronger Full Year Outlook

Quarterly GDP Growth (% YoY)				Foreign Reserves & IDR/USD
5.18	4.96		5.03	5.01	5.17		International Foreign Reserves	USD/IDR
						175,000
												15,573	15,460
						165,000
						14,390		13,866		14,050	14,263
						155,000
						145,000					144.9		134.9
		(2.17)								135.9		137.2
							129.2
					135,000
						120.7
						125,000
						115,000
2018	2019	2020	2021	2022	2Q'23	2018		2019		2020	2021	2022	9M23
Inflation & BI7DRR					MSME Business Index
	Headline Inflation	BI Rate
6.00				5.50	5.75			109.4				109.6
	5.00
						104.1	104.6		105.9	105.1	104.7
							103.2
		3.75		5.51
		3.50
3.13					100
2.59
		1.68	1.87		2.28	Optimistic Level

2018	2019	2020	2021	2022	9M23	2021	1Q22	2Q22	3Q22	2022	1Q23	2Q23	3Q23

5

KEY FINANCIAL HIGHLIGHTS

Strong NIM at 8.05% supported by above guidance loan growth

Description		Consolidated
9M23	2022	9M22		g YtD	g YoY
Total Loan & Financing (IDR Bn)	1,250,715	1,139,077	1,111,478		9.8%	12.5%
Micro to Total Loans	47.2%	48.4%	47.6%		-1.2%	-0.4%
NIM	8.05%	7.85%	8.21%		0.2%	-0.2%
Total CAR	27.48%	25.51%	26.14%		2.0%	1.3%
CASA %	63.64%	66.70%	65.43%		-3.1%	-1.8%
Cost to Income Ratio (CIR)	41.28%	44.87%	42.55%		-3.6%	-1.3%
NPL (Gross)	3.07%	2.67%	3.09%		0.4%	0.0%
Credit Cost	2.44%	2.55%	3.02%		-0.1%	-0.6%
ROA After Tax	3.21%	3.01%	3.15%		0.2%	0.1%
ROE B/S	19.69%	17.63%	18.16%		2.1%	1.5%
Leverage (x)	5.9	6.1	5.6		-20.4%	33.6%
Net Profit (IDR Bn)	44,214	51,408	39,311			12.5%
PATMI (IDR Bn)	43,993	51,170	39,156			12.4%

6

9M23 STRENGTHS AND CHALLENGES

Key Strengths

• Strong Loan Growth Pickup
• • Strong loan growth surpassed our FY23 target of 10-12% and is anticipated to remain within our guidance for 2023. The 12.5% YoY increase in 9M23 was driven by all segments outside of small business lending. Moreover, lending yields continued to move higher on a reported and core basis.
  • Ultra Micro (PNM & Pegadaian) portfolio has increased by 14.8% YoY and consistently reports higher loan growth than the bank only, now accounting for 8.9% of total loans
• Efficient Cost Management
• • Well-managedcost control, Bank Only Opex only increased 5.3% YoY in 9M23 leading to the cost to income ratio continuing to be managed below guidance at 37.63% (Bank Only).
• Strong NIM amid rising interest rates
• • BRI's strategy to rebalance loan portfolio (shift from KUR to Kupedes), strong growth in consumer loan and subsidiaries (PNM and Pegadaian) has been a success to curb the impact of cost of fund increases.
  • Ultra Micro (PNM & Pegadaian) contribute nearly 18% to consolidated net interest income despite only 8.9% of loan book.
  • Room for loan repricing by managing the mix of fixed, floating and managed rates within the portfolio will support our NIM.

Key Challenges

• Elevated Asset quality, provisions already realized
• • The lingering effect of Covid-19 in micro and small segment after the end of Pandemic in mid 2022 has led to expeditious resolution of covid restructured loans, pushing SML and NPL higher in these segments.
  • In 3Q23 our asset quality was impacted by El Nino that has led to lower rainfall across Indonesia, impacting farmers and fisheries.
• Higher for longer impacting the Cost of Funds
• • Regulations and expected elevated rates for longer has maintained elevated cost of funds
  • Our CASA strategy has been able to maintain CASA above pre-covid level at above 60%, and cost of funds have been managed at 16% below historical levels at 2.84%, whereas the 10-year average from 2013-2022 was 3.41%
• Elevated Capital
• • Current capital levels remain elevated as our Tier 1 CAR stands at 26.3% up 119bps YoY. We have increased our leverage to 5.9x from 5.6x, and plan for this to rise closer to 6.5-7x in the medium term, supporting ROE expansion.

7

2023 BRI GROUP GUIDANCE

Loan Growth (YoY)

NIM

Credit Cost

NPL

CIR

(Bank Only)

2022 Actual	2023 Guidance	9M23 Actual
9.2%	10% - 12 %	12.5%
7.85%	7.7% - 7.9%	8.05%
2.55%	2.2% - 2.4%	2.44%
2.67%	2.6% - 2.8%	3.07%
41.95%	40.0% - 41.5%	37.63%

2023 New Guidance

10% - 12%

7.7% - 7.9%

2.2% - 2.4%

2.8% - 3.0%

40.0% - 41.5%

8

LATEST REGULATION

KUR Regulation

Ref. Coordinating Ministry of Economy Policy No. 1 dated 2023 On January 25th, 2023

1. Borrowers must have never had a commercial loan
2. Restrictions on receiving KUR:
3. 1. Priority Sectors (Agribusiness, Livestock, Fishery, and Plantation):
   2. • KUR terms of max 4x (KUR facility is renewable up to 3x); or
      • Micro/ Small KUR: Max loan ceiling accumulation of Rp400 Mn/ Rp500 Mn, respectively
   3. Other Sectors:
   4. • KUR terms of max 2x (KUR facility is renewable once); or
      • Micro/ Small KUR: Max loan ceiling accumulation of Rp200 Mn/ Rp500 Mn, respectively
4. Lending rate charged to borrowers:
5. 1. KUR Super Micro: 3%
   2. KUR Small and Micro: Step-up lending rate
   3. • Initial financing: 6%
      • 1st refinancing: 7%
      • 2nd refinancing: 8%
      • 3rd refinancing: 9%

Liquidity Policy

Reserve Requirement Incentives

BI has stated that they will provide additional Reserve Requirement Ratio (RRR) incentives for banks that can increase to a maximum of 4.0% from a previous maximum of 2.8%, consisting of:

1. Disbursed loans to priority sectors (maximum incentive increases by 50bps to 2.0% from previously 1.50%), priority sectors include:
2. 1. Mineral & coal downstreaming
   2. Non mineral & coal downstreaming (including agriculture, livestock, and fisheries)
   3. Housing (including subsidized mortgage)
   4. Tourism
3. Disbursed MSME including KUR loan with maximum incentive of 1.0% (same as before)
4. Disbursed loan to Ultra Micro Segment (new incentive maximum 0.5%).
5. Disbursed green property financing or vehicle loan with maximum incentive of 0.5% from previously 0.3%.

Macroprudential Liquidity Buffer

BI has stated to ease liquidity by reducing the Macroprudential Liquidity Buffer (PLM) ratio :

1. Conventional Commercial Banks : from 6% to 5%, with repo flexibility of 5%;
2. Sharia Commercial Banks : from 4.5% to 3.5% for, with repo flexibility of 3.5%.

This reduction is aimed at providing flexibility in liquidity management in lending/financing, effective from 1

December 2023

Bank Dividend Policy

Ref. Financial Service Authority Policy POJK No. 17/2023

The Financial Service Authority (FSA) has released new regulation on banks' dividend policy :

1. Banks must have dividend policy which will be communicated to its shareholders
2. Dividend policy contains (at minimum) :
3. • Considerations in dividend payment
   • Amount of dividend payment
   • Approval mechanism
   • Dividend policy update period
4. Dividend payment plan is based on shareholders' rights fulfillment and included in the business plan
5. Dividend payment plan should already take into account the external and internal aspects
6. Dividend payment plan must be based on banks' fair financial performance
7. FSA increase authority over banks' dividend payment policy

9

9M23

FINANCIAL PERFORMANCE

BALANCE SHEET

										(IDR Bn)
	Items	9M23	1H23	9M22	g QoQ	g YoY		2022	2021	2020
	Cash and Cash Equivalent	116,215	117,456	107,579	-1.1%	8.0%		178,343	82,727	83,806
	Total Earning Assets	1,699,744	1,654,691	1,558,926	2.7%	9.0%		1,665,968	1,588,914	1,511,922
	- Placement with BI & Other Banks	39,873	65,932	55,155	-39.5%	-27.7%		91,890	73,048	80,118
	- Receivables (Acceptance & Others)	68,292	47,712	54,722	43.1%	24.8%		47,146	39,949	35,967
	- Loans & Financing	1,250,715	1,202,129	1,111,478	4.0%	12.5%		1,139,077	1,042,867	1,020,193
	- Gov't Bonds & Marketable Securities	333,937	332,139	330,957	0.5%	0.9%		381,339	426,964	374,124
	- Other Earning Assets	6,927	6,779	6,614	2.2%	4.7%		6,515	6,086	1,520
	Earning Asset Provision	(91,187)	(90,872)	(98,130)	0.3%	-7.1%		(94,975)	(89,821)	(72,747)
	- Loans and Financing Provisions	(87,871)	(88,238)	(95,902)	-0.4%	-8.4%		(93,088)	(87,829)	(70,395)
	- Other Provisions	(3,316)	(2,634)	(2,228)	25.9%	48.8%		(1,887)	(1,991)	(2,353)
	Fixed & Non-Earning Assets	127,193	123,872	116,230	2.7%	9.4%		116,303	96,278	87,085
	Total Assets	1,851,965	1,805,146	1,684,604	2.6%	9.9%		1,865,639	1,678,098	1,610,065
	Third Party Funds	1,290,286	1,245,115	1,139,765	3.6%	13.2%		1,307,884	1,138,743	1,120,922
	- CASA	821,135	815,424	745,727	0.7%	10.1%		872,404	718,267	668,796
	Current Account	314,710	298,310	245,644	5.5%	28.1%		349,756	220,590	192,730
	Savings Account	506,426	517,115	500,083	-2.1%	1.3%		522,648	497,677	476,066
	- Time Deposits	469,151	429,691	394,038	9.2%	19.1%		435,481	420,476	452,126
	Other Interest-Bearing Liabilities	156,973	175,343	158,497	-10.5%	-1.0%		162,817	167,005	195,651
	Non-Interest-Bearing Liabilities	93,171	86,196	86,007	8.1%	8.3%		91,543	80,563	64,025
	Total Liabilities	1,540,431	1,506,655	1,384,269	2.2%	11.3%		1,562,244	1,386,311	1,380,598
	Tier 1 Capital	280,082	266,050	270,798	5.3%	3.4%		273,812	266,166	187,205
	Total Equity	311,534	298,492	300,336	4.4%	3.7%		303,395	291,787	229,467
	Total Liabilities & Equity	1,851,965	1,805,146	1,684,604	2.6%	9.9%		1,865,639	1,678,098	1,610,065
*Financial figures for 2021 is restated to include Pegadaian and PNM in accordance with PSAK 38								11