Growth Driver

Bank Negara Indonesia under Achmad Baiquni profits from infrastructure and digital trends.

- Ardian Wibisono

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

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