PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 1 In the midst of global economic uncertainty and geopolitical conditions which create a challenging situation during 2023, PT Bank Rakyat Indonesia (Persero) Tbk (hereinafter referred to as BRI/Perseroan) succeeded in showing positive performance. This performance is inseparable from BRI’s commitment to continue carrying out Sustainable Transformation to Grow Stronger and Greater so that it can continue to contribute to the creation of economic and social values in supporting inclusive national economic growth. The ongoing transformation carried out has enabled BRI to provide the right strategic response amidst an economic situation that is still far from ideal after the Covid19 pandemic period. The Company is committed to continuing to grow sustainably while remaining focused on transformation in the cultural and digital areas to realize BRI’s vision of becoming a “Champion of Financial Inclusion” by 2025. In line with efforts to realize the vision, BRI optimizes its strengths, focusing on the business escalation period (beyond banking) by optimizing the synergy of Ultra Micro Holding (BRI, PT Pegadaian and PT Permodalan Nasional Madani) supported by a strong customer base to become a new source of growth for BRI, widespread infrastructure and complete financial products and services, as well as strengthening retail banking through value chain business development, improving digital products, and strengthening synergy and cross selling of BRI and its subsidiaries. Annual Report 2023 Holding Ultra Micro is proof that BRI continues to be proactive in encouraging financial inclusion by facilitating access to financing and social empowerment for the community. In the second year after its founding, Ultra Micro Holding has served more than 37 million customers with financing, savings and insurance products with support to facilitate outreach with the availability of 15,000 business unit (BRI Unit 6,700, Pegadaian 4,087 and PNM 4,553) , 1,018 SENYUM (Ultra Micro Service Centers) namely co-location units, more than 740 thousand BRILink Agents and 686 thousand E-channels. BRI also continues to carry out digital innovation to improve banking services. BRImo as BRI’s super app is continuously being improved. In 2023 BRImo has integrated aspects of artificial intelligence, namely chat banking service (Sabrina) and increased cross border transaction and investment capabilities. BRImo has served 31.6 million users (an increase of 32.6% yoy), with 3.1 billion transactions worth IDR4,159 trillion, which generated IDR2.4 trillion in fee based income. Consistency in continuing to innovate and the right strategic response succeeded in making BRI record solid performance with consolidated assets reaching IDR1,965 trillion or growing 5.3% yoy. BRI’s total credit and financing was able to grow 11.2%, amounting to IDR1,266 trillion. Increasing profitability with good risk management made BRI set a new record for Profit by recording a Net Profit of IDR60.4 trillion (an increase of 17.5% yoy) at the end of 2023. Sustainable Transformation to be Stronger and Greater
PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 2 One of the Company’s visions is to become a “Champion of Financial Inclusion” by 2025. To realize this vision, BRI is penetrating financial products and services in the micro and ultra-micro segments. BRI implements a hybrid bank concept that combines digital and physical services (conventional banking services) to expand reach. The company’s efforts to provide convenience for the public in accessing BRI’s financial services include the BRILink Agent service, the BRImo super app, and the SENYUM co-location (Ultra Micro Service Center). BRI also continued to spur the development of AgenBRILink services to encourage inclusion and services closer to the community. The number of AgenBRILink increased by 24.6% YoY to 627 thousand agents with transaction volume reaching IDR1,298 trillion or growing 13.5% YoY. Currently AgenBRILink services reached 58,896 villages in all corners of Indonesia, or covered at least 77% of the total villages in Indonesia. Annual Report 2022 Reach Further, Provide Solution, Grow Better and Stronger BRI continued to carry out a strong commitment to digital transformation to provide easy public access to banking services. One of them was through Super Apps BRImo which received a positive response from the community. This was shown by the volume of financial transactions through BRImo which had more than doubled to IDR2,669 trillion, with the number of transactions reaching 1.83 billion transactions, and BRImo users also shot up 68.46% Year on Year (YoY) to 23,85 million users. In addition, efforts to expand its reach were also carried out through the Ultra Micro Holding between BRI (as the holding company) and PT Pegadaian and PT Permodalan Nasional Madani (PNM). One year after its establishment, Holding Ultra Micro has successfully integrated more than 34 million ultra micro customers to obtain formal financial services. SENYUM colocation services (Ultra Micro Service Centers) until the end of 2022 have reached 1,013 locations. Thus, through a hybrid bank strategy that makes BRI’s services more extensive and provides convenience, encouraging BRI’s business to continue to grow and become more resilient. Theme Continuity
PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 3 In the midst of the economic recovery, PT Bank Rakyat Indonesia (Persero) Tbk. (BRI) managed to maintain performance fundamentals to grow in a healthy, strong and sustainable manner. BRI’s success in recording this brilliant performance became the result of a transformation strategy prepared since 2016 through the grand concept of BRIvolution 1.0. The program was started in 2017 and had been implemented until 2020. Since the onset of the pandemic, the transformation continued to become BRIvolution 2.0 focusing on two main areas, namely digital and culture. BRI’s vision was also changed to become The Most Valuable Banking Group in Southeast Asia. In addition, another focus was to become the Champion of Financial Inclusion. This was to restore BRI’s focus on its pathway in the MSME segment, including the Ultra Micro (UMi) business. Champion of Financial Inclusion was intended to maintain the company’s sustainable growth. BRI looked for new sources of growth. With a go smaller strategy, BRI targeted a business segment smaller than micro, namely ultra micro by extending credit with a smaller ticket size. BRI provided short tenors as needed or go shorter. In addition, BRI strengthened the digitization of its financial services so that services and business processes could go faster. That way, BRI can serve the community by providing wider, easier, faster and more affordable financial access. Annual Report 2021 Digitalization: Go Smaller, Go Shorter, Go Faster, Go Cheaper To provide banking services to various regions by Go Smaller, Go Shorter & Go Faster, BRI digitalization was carried out by referring to 3 (three) main frameworks, namely first, Digitizing Core or digitizing business processes with the aim of increasing productivity and focusing on efficiency. Second, Digital Ecosystems in which BRI prepared digital platforms to encourage BRI to enter the value chain ecosystem business so that it was expected to be a new source of growth for CASA, FBI and BRI’s new customers. Third, New Digital Propositions, in which BRI innovated financial technology with a fully digital approach and new business models that could provide services to customers faster, better and more efficiently. Through the transformation as well as the go smaller, go shorter and go faster strategy supported by digitalization, BRI had proven to be able to show solid performance by recording consolidated assets of IDR1,678.10 trillion or growing 4.23% YoY. As for the total credit and financing of the BRI Group, it reached a thousand trillion rupiah exactly at IDR1,042.87 trillion. The proportion of BRI’s MSME loans continued to climb, with 83.86% of BRI’s total lending being channeled to the MSME segment. This figure became an increase compared to the same period last year, and BRI would continue to increase this proportion to reach 85% by 2024.
BRI has navigated an extensive journey of 125 years in fostering economic growth and the ever-growing development of customers from small segments across Indonesia. Within the span of its milestones, BRI is committed to delivering services to micro, small, and medium enterprises (MSMEs). BRI consistently provides excellent services to the largest economic segment in which mostly are carried out by the majority of Indonesians. This is done by fostering, empowering and supporting them in optimizing their competencies, which eventually will enhance the welfare of their families and surrounding communities. BRI’s consistency has delivered large numbers of upgraded MSMEs that are annually increasing. This is achieved even in its 125th of journey, during the pandemic, the toughest period that evolved the dynamics of life and economies of all communities. BRI stands tall at the forefront, provides the best support for all its customers. Particularly for MSMEs customers that are suffering from the decline in their revenues caused by socioeconomic restrictions. Upholding the vision to become “The Most Valuable Banking Group in Southeast Asia and Champion of Financial Inclusion” in 2025, BRI realized brilliant breakthroughs in overcoming Annual Report 2020 Changing Adversities to Will-Power aggravating business conditions, which limit the mobility of all business practitioners in interacting and promoting its products. BRI swiftly realized loan restructuring programs while at the same time optimizing its excellent infrastructure and information technologybased service products. BRI is progressively established a digital technology-based business ecosystem, which allows all business customers to be connected with consumers across the country, even to various foreign countries. BRI has turned difficulties into business development opportunities and is making creativity in optimizing the digital ecosystem a place to deliver resilience in overcoming all business challenges. Backed by consistent efforts in fostering the MSMEs growth and development, BRI was able to successfully maintain its position as the largest bank in Indonesia with consolidated assets of Rp1,511.81 trillion and a strong level of capital. Today and going forward, BRI will remain consistent with its commitment to support, foster, empower, and continue to provide the best service to the MSMEs segment. BRI is determined to continue to increase the MSMEs portfolio hence to be able to deliver the best contribution to the majority of community and persevere the nation’s economic resilience. PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 4
BRI has forged a long-standing history of providing banking and financial services to the small-scale economic segment in Indonesia. In 2019, the Bank reached its 124th year of operations, unwavered in its commitment to catering to the needs of micro, small, and medium enterprises (MSMEs). It is likely that BRI is one of the few banks in the world that consistently endeavors to provide the best services to this particular segment and to ultimately drive the people’s economy, as evident from the growing number of MSME customers that graduate to a higher segment every year. Honoring BRI’s antecedents and its upcoming 125th anniversary in 2020, this year’s annual report carries the theme of ‘continuously growing and empowering micro and small enterprises, deepening their role for the nation’. BRI has put many actions in place and will continue to do so to realize its vision of being the Most Valuable Bank in Southeast Asia and Home to the Best Talent. It has proven capacity as a Annual Report 2019 Continuously Fostering and Empowering Micro and Small Enterprises Deepening Their Role for the Nation development agent and as a financial intermediary institution. Amid credit and thirdparty funds slowdown in 2019, BRI was able to maintain a higher than industry growth in both aspects. BRI’s strong commitment to providing the best services and to deliver optimal results has taken the Bank to the next level of performance. BRI successfully maintained its position as Indonesia’s largest bank with Rp1,416.8 trillion in assets in 2019. In the same year, the Bank brought home numerous acclaims from reputable, independent institutions for its products and services. BRI also proactively supported the government’s programs, such as programs on financial inclusion, channeling of subsidized micro loans (KUR), and the disbursement of non-cash social assistance. These positive results are attributed to BRI’s discipline in implementing the principles of sustainable finance and good corporate governance. PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 5
Table of Contents Performance Highlights Company Profile Report of The Board of Directors and Board of Commissioners Corporate Governance PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 6 Performance Highlights Report of The Board of Directors and Board of Commissioners Company Profile 1 Themes and Meaning of Themes 2 Theme Continuity 6 Table of Contents 9 Company at A Glance 10 Milestones 14 Our Best Contribution 24 Important Performance Achievement in 2023 26 Financial Summary and Financial Ratio 26 Financial Summary and Financial Ratio 32 Operational Overview 34 Stock Information 35 Corporate Action 35 Temporary Termination of Stock Trading (Suspension) and/or Shares Registration (Delisting) 36 Information of Bonds, Sukuk, and/ or Conversion Bonds 38 Information on Other Funding Sources 38 Company Rating 2023 40 Significant Events 46 Board of Directors’ Report 60 Board of Commissioners’ Report 74 2023 Annual Report Responsibilities 78 Company Identity 79 Name and Address of Regional Offices and Overseas Branch Offices 81 Company Brand 82 Brief History of The Company 84 Description of Name Change 86 Vision, Mission and Corporate Culture 86 Vision 86 Mission 86 Reviews of Vision and Mission by The Board of Commissioners and Board of Directors 87 Corporate Culture 89 Business Activities 89 Business Activities According to The Article Association and Business Activities Conducted 90 Products and Services 96 Operating Area 100 Organizational Structure 102 List of Association Membership 104 Board of Directors’ Profile 119 Board of Commissioners’ Profile 132 Executive Officer Profile 137 Employee Profile 137 Number of Employees by Gender 137 Number of Employees by Position Level 137 Number of Employees by Age Range 138 Number Of Employees By Education Level 138 Number of Employees by Status 139 Number of Employees by Generation
PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 7 Management Discussion and Analysis on Bank Performance 139 Number of Employees by Service 139 Shareholder’s Composition 140 The 20 Largest Shareholders’ Composition 141 Composition of Shares Ownership of 5% or More 142 Community Shareholders’ Group Composition Holding Less than 5% of Shares 142 Board of Commissioners’ and Directors’ Shareholding 144 Senior Management Share Ownership 145 Classification of Shareholders 145 Main and Controlling Shareholders 146 List of Subsidiaries, Associated Entities and Joint Venture Companies 154 Company Group Structure 155 Bank Business Group Information 156 Stock Issuance Chronology 160 Chronology of Issuance and/or Listing of Other Securities 165 Information on Using The Services of Public Accounting (AP) and Public Accounting Offices (KAP) 166 Name and Address of Supporting Institutions and/or Professionals 168 Awards and Certifications 183 Information Available on The Website 186 Economic Review 186 Global Economic Review 193 Domestic Economic Analysis 195 Banking Industry Analysis 196 Analysis of BRI’s Position in the Banking Industry 198 Operational Review 198 Bank Strategy 201 Marketing Aspect 201 Marketing Strategy 204 Market Share 205 Operational Review Per Business Segment 206 Operating Segment 264 Geographic Segment 265 National Strategic Projects (PSN) or Other Assignments 267 Financial Review 267 Financial Performance 267 Consolidated Statement of Financial Position 280 Consolidated Statement of Profit or Loss and Other Comprehensive Income 289 Consolidated Statement of Cash Flows 292 Ability to Pay Debt and Collectibility in Receivables 295 Interest Rate 295 Interest Rate On Loan 296 Earning Assets Quality Analysis 300 Strategy for Improving Fee Based Income 300 Capital Structure 301 Information on Capital and Risk Exposure 368 Material Commitments Related to Capital Goods Investment 368 Capital Goods Investment 369 Commitments and Contingencies 369 Significant Agreement 370 Material Information and Facts After The Accountant’s Report Date 370 Details of Problems Arising During the Fiscal Year Which Affected the Business Activities of SOEs 370 Business Prospects and Future Strategies 372 Achievement of Targets and Future Targets 377 Evaluation of Long Term Plan 377 Policy, Announcements and Payment of Dividend 378 Realization of the Use of Public Offering Funds 379 Material Information Regarding Investment, Expansion, Divestment, Acquisition, or Debt and Capital Restructuring 380 Material Transaction Information Containing Conflict of Interest and/or Transactions With Affiliated Parties 387 Changes in Law and Their Impact on Bank 389 Accounting Policy Changes 390 Bank Soundness Level 390 Business Continuous Information 391 Tax Aspect 392 Response to Change in Monetary Policy Direction 393 Prohibitions, Limitations and/ or Significant Obstacles To the Provision of Funds Between Banks and Other Entities in a Business Groups 397 Spot and Derivative Transactions 397 Report on the Use of Additional State Capital Participation
PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 8 Corporate Governance 400 Human Capital 401 Human Capital Management Framework 402 Human Resources Management Policy And Implementation 402 Recruitment 404 Competency Development 409 Career Development 413 Individual Performance Assessment 414 Remuneration System and Long Term Compensation 416 Pension Program 416 BRILiaN Apps 418 Culture Internalization 422 Human Resources Management Structure 422 Human Resources Work Plan 2024 423 Information Technology 424 Master Plan and Information Technology Strategy 426 Information Technology Innovation 428 Information Technology Infrastructure 431 Information Technology Governance 435 Information Technology Management Structure 436 Information Technology Work Plan 2024 437 Direktorat Fixed Assets Management & Procurement 438 Network & Services Directorate 443 Implementation of Good Corporate Governance on Company Performance 444 Stages of GCG Implementation 444 Basic Aplication of Good Corporate Governance 446 Corporate Governance Implementation Framework 447 Structure, Mechanism and Governance Relations 465 Implementation of Good Corporate Governance 465 Shareholders 467 General Meeting of Shareholders 483 Board of DIrectors 504 Board of Commissioners 545 Nomination and Remuneration for the Board of Commissioners and Directors 552 Transparency of Share Ownership of Directors and Board of Commissioners 555 Diversity Policy Board of Commissioners and Board of Directors 557 Organs and Committees Under The Board of Commissioners 636 Organs and Committees Under the Board of Directors 692 The Implementation of Governance In Providing Remuneration Ffr Commercial Banks in Accordance with 45/ POJK.03/2015 697 Performance-Based Long-Term Compensation Policy 698 Public Accountant 699 Internal Control System 704 Risk Management 727 Compliance Function 737 Anti-Money Laundering (AML) Program, Counter-Terrorism Financing (CFT), and Prevention of Financing of Proliferation of Weapons Of Mass Destruction (PFWMD) 744 Legal Cases 748 Administrative Sanctions Imposed on Companies, Members of The Board of Commissioners and Directors by The Capital Market Authority and Other Authorities 748 Corporate Information and Data Access 754 Code of Conduct 760 Whistleblowing System 763 Anti-Corruption Programs 768 Management of Assets Reports of State Providers (LHKPN) 768 Number of Internal Fraud and Settlement Efforts 769 Provision of Funds for Social and/ or Political Activities 769 Stock Buyback and Bond Buyback 770 Internal Disputes 770 Bank Strategic Plan 770 Provision of Funds to Related Parties and Provision of Large Funds 771 Transactions Containing Conflict of Interest 771 Prevention of Insider Trading 772 Transparency of Financial and Non Financial Conditions 772 Procurement of Goods and Services 772 Implementation of Sustainable Finance, Including Implementation of Social and Environmental Responsibility 772 Implementation of Integrated Governance Business Support Functions Overview 788 Corporate Social Responsibility 792 OJK Index 813 Financial Statements
SUBSIDIARIES SHAREHOLDERS MAIN PRODUCTS AND SERVICES Public* Government Savings Products Loan Products Banking Services TOTAL ASSET IDR1,965.01 trillion 100% 53.19% 46.81% Company at A Glance BUSINESS SEGMENT Retail Corporate Micro PT Bank Raya Indonesia Tbk (Raya) PT Asuransi BRI Life (BRI Life) PT BRI Danareksa Sekuritas (BRI DS) PT BRI Asuransi Indonesia (BRI Insurance) PT Permodalan Nasional Madani (PNM) BRI Global Financial Services Co. Ltd. (BRI Global Financial Services) PT BRI Multifinance Indonesia (BRI Finance) PT BRI Ventura Investama (BRI Ventures) PT Pegadaian PT BRI Manajemen Investasi (BRI MI) 90.00% 99.99% 99.97% 99.99% 65.00% 86.85% 54.77% 67.00% 100.00% 99.88% AFFILIATE COMPANY PT Bahana Artha Ventura (BAV) PT Pemeringkat Efek Indonesia (Pefindo) PT Kustodian Sentral Efek Indonesia (KSEI) PT Bank Syariah Indonesia Tbk. (BSI) 15.10% 0.18% 3.00% 15.38% * Includes treasury stock of 0.51% PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 9
Milestones PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 10 On 16 December 1895, Raden Aria Wiriatmaja founded De PoerwokertoscheHulp en Spaarbank der Inlandsche Hoofdenin Purwokerto as a mosque fund manager whose function was to manage and disburse funds to the people through a simple scheme. The institution experienced several name changes, from Hulp en Spaarbank derInlandshe Bestuurs Ambtenareen (1895), De Poerwokertosche Hulp Spaar-en Landbouw Credietbank or Volksbank, to Centrale Kas Voor Volkscredietwezen Algemene (1912). In 1934 the name was again changed, to Algemene Volkscredietbank (AVB). During the Japanese occupation period, AVB was known as Syomin Ginko (1942-1945). 1895 Real-time online interconnection with the whole works unit, numbering 6,480 outlets at the time. 2009 RI acquired Bank Jasa Artha, later changed into PT Bank BRISyariah. 2007 On 10 November 2003, BRI became a Publicly listed Company by listing its shares on the Jakarta Stock Exchange (now Indonesia Stock Exchange/ IDX) with ticker code “BBRI.” Now BRI is part of the LQ-45 share index and also one of the bluechip companies on IDX. 2003 According to Republic of Indonesia Government Regulation No. 21 of1992, BRI changed its legal status to PT Bank Rakyat Indonesia (Persero). 1992 Following the closing of Bimas program by the Government, BRI started to manage the micro business commercially, distributed through BRI Units. 1984 BRI was appointed by the Government as the only bank to disburse loan program Mass Assistance (Bimas) and started to establish BRI Units. 1969 On 22 February 1946, the Government of Indonesia, by virtue of Government Regulation No. 1 of 1946, changed Syomin Ginko into Bank Rakyat Indonesia (BRI), a government owned bank with the front-line role of supporting national economic development. 1946 The government changed BRI into Bank Koperasi Tani Nelayan (BKTN). 1960 Based on Law No. 21 of 1968, the Government reestablished the name Bank Rakyat Indonesia with a commercial bank status. 1968
PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 11 • On 11 January 2011, the Bank exercised a 1:2 ratio stock split • On 3 March 2011, the signing of a Deed of Acquisition of shares of PT Bank Agroniaga Tbk between BRI and Dana Pensiun Perkebunan (Dapenbun). • On 16 December 2011, the signing of Instrument of Transfer, and Bought and Sold Notes between BRI and PT Asuransi Jiwa BRIngin Jiwa Sejahtera over the shares of BRIngin Remittance Co. Ltd. (Hong Kong). 2011 • To enhance its customer service BRI launched Sabrina, an Artificial Intelligence as BRI New Assistance to facilitate the customers in getting information on the Bank. • BRI encouraged the MSME to Go Digital by launching the Indonesia Mall, cooperating with the market place startups thereby providing the MSME communities the opportunities to sell their products in wider market. • BRI issued the following bonds: - Bank BRI Shelf Registration Bonds II Phase IV 2018 Series-A, maturity on 21 February 2023, with nominal value of 1,837,000,000,000 shares and coupon/discount rate of 6.65%, with AAA credit rating from Pefindo. - Bank BRI Shelf Registration Bonds II Phase IV 2018 Series-B, maturity on 21 February 2025, with nominal value of 605,000,000,000 shares and coupon/discount rate of 6.90%, with AAA credit rating from Pefindo. - Bank BRI Registration Bonds III 2018, maturity on 21 June 2023, with nominal value of 500,000,000,000 shares and coupon/ discount rate of 7.70%, with AA credit rating from Pefindo • BRI has exercised three new equity investments, which are 2 (two) new subsidiaries, PT BRI Ventura Investama (BRI Ventures) and PT BRI Danareksa Sekuritas (DS), as well as investment in PT Danareksa Investment Management (DIM). On these equity investments, total Subsidiaries of BRI become 8 (eight) Subsidiaries, namely Sharia (BRISyariah), Conventional Bank (BRI Agro), Remittance (BRI Remittance), Insurance (BRI Life), Multifinance (BRI Finance), Venture Capital (BRI Ventures), Securities (BRI Danareksa Sekuritas), and General Insurance (BRI Insurance). • BRI also launched the BRI Institute as a manifestation of Bank BRI’s effort in the National Capacity Building for MSMEs segment. 2018 BRI Hybrid Banking, the first self-service banking in Indonesia. 2013 • BRI’s ATM network continues to increase, reaching 20,792 ATM units and 131,204 EDC units – constituting the largest ATM and EDC network in Indonesia. • BRI signed the BRI Satellite (BRISat) Satellite Procurement and Launcher Agreement with Space System/ Loral (SSL) and Arianespace on 28 April, 2014. 2014 • In 2015, BRI opened Singapore Overseas Unit and acquired PT Asuransi Jiwa Bringin Jiwa Sejahtera (Bringin Life). • On 4 August 2015, BRI launched Teras BRI Kapal to reach out to people living in coastal areas that are underserved by banking services. • BRI also inaugurated BRI Corporate University to provide comprehensive facilities for employee education. 2015 • BRI’s own satellite, the BRIsat, was successfully launched on June 18, 2016, at 18:38 Kourou Time, French Guiana. BRIsat will provide the supporting infrastructure for BRI’s digital services. • BRI acquired BTMU Finance, a multifinance company, and subsequently changed its name to BRI Finance. • BRI inaugurated a full digital branch at Terminal 3, SoekarnoHatta Airport, and launched several programs concerning digitalization for SME, such as e-Pasar, Teras BRI Digital. 1 Million Free Domain for MSMEs, and Rumah Kreatif BUMN. 2016 • BRI began operating Timor Leste Overseas Unit on 14 March 2017 • On 24 February 2017 BRI officially launched Teras BRI Kapal Bahtera Seva II and Teras BRI Kapal Bahtera Seva III to reach communities in the coastal areas of Labuan Bajo and Halmahera Island. • BRI Extraordinary General Meeting of Shareholders (“EGMS”) held on 18 October 2017 has approved the stock split from Rp 250,- (two hundred fifty Rupiah) per share to Rp 50,- (fifty Rupiah) per share (Ratio 1:5) and began its trading on 10 November 2017, the 14th Anniversary of BRI’s listing at the stock exchange. 2017
• BRI through its subsidiary BRI Agro launched PINANG, the First Digital Lending Banking in Indonesia. By combining digital technology, PINANG speeds up the application process to disbursement to less than 10 minutes. Applications can be made through branchless methods. Using a fast, affordable, and secure process, as well as a competitive ceiling, PINANG will provide extra convenience for customers to apply for loans. • BRI has acquired companies engaged in General Insurance, PT. Bringin Sejahtera Artha Makmur (BRINS), this acquisition is a strategic step for the company to become an integrated financial solution that will further complement the financial services owned by the BRI Group. • On March 28, 2019 BRI issued a (sustainability bond) with a nominal value of USD 500.000.000 (full amount) for a period of 5 years. Proceeds from the bond issuance were used to fund Eligible Projects in accordance with the Sustainability Framework. • BRI has launched its latest digital banking breakthrough to provide convenience and security in banking transaction services. BRI launched the BRImo application, the latest BRI Mobile application based on data with the latest UI/UX (User Interface/ User Experience) and the latest features that can be used by customers and noncustomers without having to come to the branch office with a choice of funding sources current account, savings and Electronic Money for each of its features. BRImo has various interesting advantages, such as convenience in opening a BRI Britama Muda Savings account, login applications using finger print or face id recognition, checking of account transactions up to the last 1 year, the use of account aliases and access to information on BRI Bank promos. Until December 2019 there have been 2.96 million BRImo users. • On 12 December 2019, BRI made a breakthrough innovation in its financial products and services to establish itself as a leading financial institution in digital banking in Indonesia. The latest one, BRI launched an online loan called CERIA. Through this launch, BRI became the first state-owned bank to have an online loan application. • In addition to innovating through various digital banking products development, during 2019 BRI also continued to empower the MSMEs through KUR disbursement of Rp87.9 trillion to more than 4 millions of them. Of the total KUR disbursed during 2019 by BRI, Rp75.7 trillion or 86.1% were disbursed specifically for the micro segment. As such, since 2015, BRI has succeeded in disbursing KUR with a total value of Rp323.4 trillion to more than 16.6 million MSMEs communities throughout Indonesia. 2019 PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 12 BRI actively becomes the Government main partner in implementing the National Economic Recovery Program (NER) which have rendered positive impact, not only for the debtors that mostly are MSMEs, but also to the Company. As of December 2020, the following are NER programs carried out by the Company: 1. Distribution of MSME Credit in the framework of Accelerating National Economic Recovery. In accordance with the target set by the Government of IDR45 trillion (3 times) from Placement of Government Funds; 2. Lending with guarantee scheme for small and retail segments amounted to Rp8.73 trillion to more than 14 thousand Debtors; 3. Disbursement of MSME Loan Interest Subsidies amounted to Rp5.47 trillion to more than 6.5 million beneficiaries; 4. Disbursement of Micro Business Productive Assistance (BPUM) amounted to Rp18.64 trillion to more than 7.7 million micro business; 5. Disbursement of KUR Super Micro amounted to Rp8.66 trillion to more than 985 thousand debtors; 6. Disbursement of salary subsidies of Rp6.45 trillion to more than 5 million beneficiaries. In addition, as a recovery effort to the debtors impacted by the COVID-19, as of December 2020, BRI has carried out restructuring amounted to Rp186.6 trillion to 2.8 million debtors, where 95% included as debtors from Micro, Consumer, Small and Medium segments. • To provide customer transactions convenience during the pandemic, BRI launch the following digital innovations : - Launching of BRImo New Look - Launching of Pasar.id. The social distancing and Large Scale Social Restrictions has limited the activity in the market, resulting in profitability declined for the traders. BRI helps the “Survival Mode” of Traditional Market by introducing online shopping (through WA, Website, Mobile Apps, or start-ups cooperation). - Launching of Digital Saving. BRI launch digital account opening service through Digital Saving Platform that are accessible through BRI channels or cooperating third parties. The platform uses 2 technologies, namely face recognition and digital signature, hence providing a branchless facility for customers. • Launching of the Indonesian Banking Professional Certification Agency (BRISLP). • Launch of BRI Micro & SME Index (BMSI). The launch of BMSI is BRI’s concern for the activities of Indonesian MSMEs to become information. BMSI is the first leading indicator in Indonesia to measure MSME activities which one day will be useful for public policy. 2020
- Evidence of the success of BRI’s digital transformation can be seen from the number of BRImo users at the end of 2023 reached 31.6 million users, an increase of >10 times in just 4 years, making BRImo the most downloaded mobile banking in Indonesia. Apart from that, in 2023 BRImo’s transaction volume has grown to extraordinary to reach IDR4,159 trillion. - 2 years into the establishment of Ultra Micro Holding, it has succeeded in serving 37 million MSME customers with total credit financing reaching IDR494.78 trillion through 1,018 SenyuM Outlets. 2023 PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 13 • Throughout 2021, BRI successfully carried out 3 (three) major corporate actions to support sustainable growth. These three major corporate actions became part of BRI’s business growth which was carried out inorganically and in the value creation process. The 3 (three) corporate actions included: 1. Consolidation of Bank Syariah Indonesia (BSI) with an increase in the price of BRIS shares up to four times since the consolidation process. 2. Increased BRI Life valuation through partnership with FWD Financial. 3. Establishment of an Ultra Micro Holding with Pegadaian and PNM with a total Right Issue value of IDR95.9 trillion consisting of IDR54.7 trillion in the form of government noncash participation in the form of Pegadaian and PNM shares, and IDR41.2 trillion in cash proceeds from shareholders public. This achievement marked history as the largest right issue in the Southeast Asia region, ranked third in the right issue in Asia, and number seven worldwide. • BRI opened its sixth overseas outlet, namely a Branch Office in Taipei, Taiwan located at No. 166, Sec. 3, Nanjing East Road, Zhongshan District, Taipei City, Taiwan. The operation of the BRI Taipei Branch (BRITW) started operating on Tuesday, November 30, 2021. The BRI Taipei Branch had also obtained an operational permit as a Full Retail Foreign Bank Branch Office License by the Taiwanese authorities. With this license, BRI Taipei Branch could provide Savings, Loans, Remittances, Trade Finance, and Treasury services to customers in Taiwan. 2021 In 2022 BRI continued to develop its business in a number of ways: 1. Mengakuisisi Danareksa Investment Management untuk terus Acquiring Danareksa Investment Management to continue to make the BRI Group a one stop financial solution for the people of Indonesia. 2. Launching the Qlola by BRI product as an Integrated Corporate Solution Platform with just a single sign on login. 3. Being more consistent in supporting Indonesia’s financial inclusion through: • BRILink agents reached 627 thousand agents and are spread over >58 thousand villages or cover >77% of villages in Indonesia. • Super Apps BRImo which already had 23.85 million users and made BRImo the banking app with the largest users in Indonesia. • Presenting >1,000 Senyum Outlets to facilitate access for customers of the Ultra Micro ecosystem in one door that successfully integrated >34 million customer data. 2022
PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 14 Our Best Contribution As of September 13, 2021, Ultra Micro Holding has been operating for 2 (two) years with very encouraging results. Ultra Micro Holding successfully served more than 37 million MSME customers, growing 4,68% year-on-year (yoy), with total outstanding loans and financing reaching IDR611,2 trillion, an increase of 11,10% yoy. BRI (focusing on individual customer loans) succeeded in disbursing loans with an outstanding amount of IDR496,69 trillion to 14.0 million debtors. On the other hand, Pegadaian, with its focus on pawning, succeeded in recorded a total outstanding amount of IDR67.6 trillion to 7.7 million debtors. Meanwhile, PNM, with its group financing through Mekaar, succeeded in recorded an outstanding IDR42.0 trillion to 15,1 million debtors. Ultra Micro Holding Development Throughout the Ultra Micro Holding journey, the quality of financing has been well maintained through several things as follows: 1. Applying prudential principles in granting loans, efforts made to improve loans quality include implementing a loans granting process involving data analytics to strengthen credit scoring and early warning systems. 2. Increasing the capabilities of marketers as financial advisors to assist Ultra Micro customers. 3. Providing education to Ultra Micro customers through several empowerment programs.
PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 15 Ultra Micro Holding Synergy was implemented through a joint strategic initiative, to strengthen the resilience of MSMEs and accelerate Financial Literacy and Inclusion with a more complete journey for Ultra Micro customers in reaching BRI Group financial services. These strategic initiatives include: 1. Ultra Micro Customer Empowerment Through implementing programs to increase financial literacy and inclusion in collaboration with the Government and third parties with the aim of upgrading Ultra Micro customers, including: • The creation of Business Identification Numbers (NIB) reached 893,248. • UMi Simpedes account opening inclusions reached 13.5 million. • BRILINK Mekaar in the Mekaar group was 151 thousand. 2. Implementation of Business Unit co-location (SenyuM) Until the end of the fourth quarter of 2023, 1,018 SenyuM business unit were present. In the future, BRI plans to add more SenyuM outlets to expand the reach of BRI, Pegadaian and PNM services by utilizing a network of 3 (three) entities, while still prioritizing efficiency. 3. Utilization of Analytics Data It was recorded that by the end of the fourth quarter of 2023, 34,7 million Ultra Micro holding customers had been successfully integrated into the BRI database and used for BRI Group business expansion. Furthermore, the integrated big data will continue to be optimized through data analytics with the application of machine learning (AI) so that it can provide more precise recommendations regarding what financial products and/or services are appropriate to offer to ultra-micro customers according to their needs. 4. SenyuM Mobile SenyuM Mobile is a cross selling application used by marketers (BRI, Pegadaian, and PNM), BRILink Agents, and Pegadaian Agents in the acquisition and marketing of products from 3 (three) business entities. Currently, since September 30, 2023, SenyuM Mobile has also had a scope-up so that the application can also be used by end users (SenyuM Mobile Self-Serve) to access more complete products, including loans, savings and investment products offered by the three entities. The SenyuM mobile application has been released, so that it can be accessed by 77 thousand Marketers from 3 (three) entities, 740 thousand BRILink Agents, and 19 thousand Ultra Micro segment customers directly, which can be downloaded from the Google Play Store. 5. Business Process Improvement To improve the quality of Pegadaian and PNM business, the main focus is placed on efficiency by using digitalization in business process flows. During 2023, BRI Holding had also digitized business processes by encouraging cashless disbursement, especially in PNM customers. The implementation of cashless disbursement will not only encourage customer digital financial inclusion, but also increases business efficiency and perfect the company’s risk management. 6. Internalization of SOEs Core Values (AKHLAK) Through the Culture Activation Program (CAP) “BRIGADE MADANI”, which is a joint commitment between 77 thousand marketers in 3 Ultra Micro Holding entities to accelerate the achievement of Key Performance Indicator (KPI) targets set by the Government through the Ministry of SOEs. With various initiatives and enablers that have been prepared by the 3 (three) Ultra Micro Holding entities, the mandate from the Government through the Ministry of SOEs to Ultra Micro Holding was to contribute to the national Financial Inclusion Target targeted at 90% by 2025. As an illustration, the Government was targeting 2024, The total number of new account openings for ultra-micro segment customers was 7.8 million savings accounts. As of December 2023, 13.5 million UMI simpedes accounts have been formed. Apart from that, there are 1.2 million Ultra Micro customers who have upgraded from group customers at PNM Mekaar to individual customers at Pegadaian and BRI. Through a comprehensive customer journey, UMI Holding will continue to encourage customer graduation as its capabilities increase. This shows that Ultra Micro Holding can carry out the Government’s mandate better. Regarding the distribution of Ultra Micro Financing, there were challenges faced by Ultra Micro Holding in reaching the Ultra Micro Community, including: a. Accessibility for customers in underdeveloped, frontier, outermost areas. Ultra Micro Holding has provided the largest and most widespread conventional and e-channel network throughout Indonesia consisting of 7,755 business unit belonging to BRI, 4,553 PNM and 4,087 Pegadaian. Then, supported by an e-channel network of 741 thousand BRILink Agents, more than 200 thousand EDC Merchants, and 21 thousand ATM and CRM e-channels, 73,6 thousand Marketers, as well as the BRIMO and SenyuM Mobile Applications to be able to reach and serve Ultra Micro customers. This required support from the Government to provide infrastructure in the underdeveloped, frontier, outermost areas, making it easier for customers to access the financial services that Ultra Micro Holding has prepared, and equal access for Ultra Micro segment customers. b. Cost Efficiency Managing the Ultra Micro ecosystem, with a total of tens of millions of customers, required enormous resources. With the establishment of Ultra Micro Holding, it is hoped that Pegadaian and PNM can synergize with the BRI group, so that efficiency can be obtained while still prioritizing service to Ultra Micro customers. Against this condition, there needs to be support from the Regulator to be able to provide relaxation of policies related to the financial sector, especially in serving Ultra Micro Holding customers.
Enviromental, Social, and Governance (ESG/LST) 2.045.658 seedlings have been planted through the BRI Menanam program. 21 BRINita locations (BRI Farming in the City). 101 Locations of the River Guard Program, Protect Life. 64,601 Tree/Mangrove Planting. Development of an Integrated Waste Management Site Environment Education 2.190 Scholarships for students and college students. 160 School Renovations through the This is My School Program. As a form of BRI’s support for Sustainable Finance, BRI already had strategic initiatives in the fields of Environment, Social and Governance (ESG) both in the Company operational and business activities. BRI consistently maintains the Company’s good performance in implementing Sustainable Finance and contributing to the achievement of Sustainable Development Goals (SDGs). Efforts to accelerate the achievement of this were carried out through the alignment of corporate strategy, fulfillment of stakeholder expectations and the initiation of ESG which referred to national, regional and global standards. During 2023, BRI strengthens its commitment by joining the United Nations Global Compact (UNGC), determining a baseline year in efforts to reduce the company’s greenhouse gas emissions, and determining Net Zero Emission Targets in 2050. As a result, BRI maintains this performance which is reflected in the ESG rating score from international rating agencies such as S&P Global, MSCI, and Sustainalytics. PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 16
Development of Women’s Groups in Indonesia. Development of Infrastructure, Facilities and Training for BRILiaN Villages in Indonesia. Empowerment of MSMEs Health 218 Ambulances for the community. 153 Renovation, Construction and Assistance for Health Infrastructure. 6. Publishes Task Force on Climate-Related Financial Disclosures (TCFD) Report (E). 7. Installing solar panels at the BRI office (E). 8. Join the United Nations Global Compact (UNGC) (G). 9. Issue policies related to the implementation of Human Rights Principles in Employment (S). BRI continues to be committed to implementing Social and Environmental Responsibility Programs to empower communities and move the wheels of the economy. BRI Peduli focused on empowering MSMEs, Environment, Education and Health. In 2023, BRI has implemented several ESG programs, including: 1. Distribute credit to the Sustainable Business Activity Category, both the MSME sector and Environmentally Friendly Business Activities (E, S). 2. Issued Green Bonds amounting to IDR6 Trillion (E). 3. Committed to Science-Based Target Initiatives (SBTi) related to greenhouse gas emission reduction targets (E). 4. Set year 2022 as the baseline year in efforts to reduce the company’s greenhouse gas emissions (E). 5. Determining Net Zero Emission Targets in 2050 (E). PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 17
IDR777.28 trillion IDR772.74 trillion IDR4.54 trillion Sustainable financing portfolio consisting of sustainable credit distribution and investment in ESG -based corporate securities Continuing credit distribution ESG -based corporate bond investment Sustainable Financing Portfolio of total credit and BRI corporate bond investment 67.1% BRI continues to strengthen the application of environmental, social and governance (ESG) aspects comprehensively in business activities and operations. Bank with the Largest Sustainable Business Portfolio in Indonesia Sustainable Business Activities IDR39.6 trillion ESG - Based Bond Portfolio Sustainable Funding Portfolio Of the total corporate bonds issued by BRI 57.9% • Established ESG Roadmap • Issued Green Bond (IDR5 Tn) • Signatory of Partnership for Carbon • Accounting Financials • New Green office Building • BRI Menanam Program • Pulp & Paper Loan Policy • Conducted Financed Emission, Calculation 2022 • Issued internal ESG Policies • (General Sustainable Finance & CPO Policy) • First Mover on Sustainable Banking 2017 Conducted Green House Gas (GHG) Emission Calculation 2020 • Established The Ultra Micro Ecosystem • Established Dedicated ESG Unit • Established ESG Committee • Constituent of Indonesia ESG Leader Index 2021 • Issued sustainability bond ($ 500 Mn) • Submitted Sustainable Finance Action Plan 2019-2024 2019 Published 1st Sustainability Report 2013 BRI Sustainability Journey PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 18
Empowerment and Mentoring of MSMEs BRI actively empowers MSMEs with empowerment programs including: • Desa Brilian Desa BRILiaN is a Village Empowerment Program based on 4 (four) pillars, namely Village-Owned Enterprises (BUMDES), Digitalization, Innovation and Sustainability. Desa BRILiaN Program aims to produce role models in village development through the implementation of superior village leadership practices and a spirit of collaboration to optimize SDG-based village potential. The Empowerment Objects in the Desa BRILiaN Program consist of the Village Head and his staff, the Director of Village-Owned Enterprises and administrators of VillageOwned Enterprises, Representatives of the Village Consultative Body (BPD) or Community Figures, Representatives of Business Groups (Klaster) and Young Entrepreneurs (Karang Taruna, Pokdarwis and the like). Currently there are 3,178 BRILiaN Villages spread throughout Indonesia as a form of village ecosystem empowerment. • Rumah BUMN Rumah BUMN is a forum for SOE collaborative steps in forming a digital economy ecosystem through coaching MSMEs to increase their capacity and capability. MSMEs that are supported by Rumah BUMN will receive empowerment tailored to the level of MSME entrepreneurship. The presence of Rumah BUMN is a catalyst for MSMEs to move up a class towards Go Modern (change in entrepreneurial mindset), Go Digital (use of social media), Go Online (using e-commerce) and Go Global (ready to export). Currently BRI has 54 Rumah BUMN which are business development places for more than 418 thousand BRI MSME players and have received more than 12 thousand training sessions. • Klasterku Hidupku Klasterku Hidupku is an empowerment program for business clusters/ groups through institutional development and collaboration, so that they can increase business class and have wider market access. Of the 23,243 business clusters supported by BRI, 1,897 have received empowerment in the form of training and assistance with productive infrastructure. • UMKM EXPO (RT) BRILLIANTPRENEUR 2023 UMKM EXPO (RT) BRILLIANTPRENEUR 2023 is a BRI activity that aims to bring MSME players to the next level and expand their business to international markets. This activity is also BRI’s contribution to improving the National Working Hours Balance, to strengthening the Trade Balance, in line with efforts to increase labor-intensive MSMEs. MSME EXPO(RT) BRILIANPRENEUR 2023 involves new young entrepreneurs who will be able to support and encourage the Indonesian economy, as well as support BRI in realizing the Golden Indonesia Vision 2045 to make Indonesia a high-income developed country. Number of Female Debtors Account Officer Mekaar Total Mekaar Outstanding 2023 • Channeling credit to the category of Sustainable Business Activities (KKUB), both the MSME sector and environmental insight activities (KUBL) (L, S) • Issuing Green Bond worth IDR6 trillion (L) • Committing to Science-Based Target Initiatives (SBTI) related to the target of decreasing greenhouse gas emissions (L) • Determine the baseline year in an effort to reduce the company’s greenhouse gas emissions, namely 2022 (L) • Determine Net Zero Emission Targets in 2050 (L) • Publish a Task Force on Climate-related Financial Disclosures (TCFD) report • Conduct solar panel installations in the BRI (L) business unit • Join the United Nations Global Compact (UNGC) (T) • Publish policies related to the application of the principles of human rights in employment (S) +41,800 IDR42.0 trillion 15.1 million Empowering Women Through Ultra Micro Ecosystem Through PNM Mekaar, the UMi ecosystem provides access to capital, coaching and capacity building, especially for housewives. PT Bank Rakyat Indonesia (Persero) Tbk. 2023 Annual Report 19
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