Passion for Excellence at Its Best

PT Bank QNB Indonesia Tbk

Annual Report 2016

Passion for Excellence at Its Best

Telp : (+6221) 515 5155 Fax : (+6221) 515 5388 e-mail : [email protected] qnb.co.id

Annual Report 2016

PT Bank QNB Indonesia Tbk QNB Tower 18 Parc SCBD Jl. Jend. Sudirman Kav. 52-53 Jakarta 12190

Passion for Excellence at Its Best Annual Report 2016

Disclaimer Certain of the matters discussed in this Annual Report about future performance, including, without limitation, future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical constitute “forward-looking statements”. These prospective statements in this annual report are prepared based on various assumptions on current and future conditions of the Bank, as well as its business environment in which the Bank operates. The Bank does not guarantee that the documents which have been ensured of their validity will bring certain results as targeted. Due care and attention have been used in the preparation of forecast information. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of PT Bank QNB Indonesia Tbk, which may cause actual results to differ materially from those expressed or implied in such statements due to changes in the business environment and other factors. This annual report contains the word “Bank” which are defined as PT Bank QNB Indonesia Tbk that operates in the field of banking industry.

2016 Performance Management Report Company Profile Management Discussion and Analysis

Overview of the 2016 Annual Report

Corporate Governance

Annual Report 2016 of PT Bank QNB Indonesia Tbk features an elaborated overview of the Bank’s important information. The report highlights the theme of “Passion for Excellence at Its Best” which reflects the Bank’s spirit of determination and optimism. The report also addressed how the Bank focused on developing the integrity of its people through the internalization of QNB Values and strengthening its digital platform to further developing its retail segment.


Corporate Social Responsibility

The annual report primarily presented to disclose significant and material information on the Bank to both shareholders and stakeholders including internal employees, general public, regulators, government, etc. The report contains comprehensive information and in-depth analysis on the Bank’s performance during the year in terms of financial, operation, governance, and citizenship. Through this annual report, the Bank aims to meet its responsibility in reporting management accountability to shareholders as well as delivering concerned, accurate, relevant information on the Bank to the internal and external parties.

1

Our Journey 2013 Aligning Strength and Enhancing Values 2013 was a year of consolidation which was reflected in the improvement of processes, human resources, and products that were utilized as pillars for the growth of the Bank. Assisted with the hard work of all employees, PT Bank QNB Indonesia Tbk was successful in improving the quality of customer service, capability, and excellent processing. The positive growth and competitive benefit were optimally utilized by PT Bank QNB Indonesia Tbk in order to align its strength and enhance its values.

2014 Commitment on Our Strong Growth 2014 is a commitment year for PT Bank QNB Indonesia Tbk. The solid commitment to sustainable growth was particularly reflected in the implementation of a series of strategic steps including applying compliance and prudent principles, improving the loyalty and quality of human resources, sharpening focus, developing a balance in the social and economy aspects, maintaining relationship harmony, optimizing potential and resources, as well as preserving consistency in providing the best service for all stakeholders. The commitment will guide PT Bank QNB Indonesia Tbk closer and on track to achieving its vision, which is to be the top tier bank in Indonesia in terms of financial performance.

2015 Continuous Investment and Growth 2015 was an important chapter in a multi-year story of the growth for PT Bank QNB Indonesia Tbk (QNB Indonesia). It was also a year of challenges which addressed by Bank through the actions of further developing its people, enhancing the compliance, defining and investing in core offerings, as well as improving the efficiency of overall business process to support growth. The Bank believes that the progress we made this year shall position us stronger and set us ready for maintaining significant growth in shareholder value over the future years.

Focus 2016 The Bank’s journey over the past five years encompasses determination in which each year encapsulates the motivation of all employees. Year 2016 was a challenging one for the Bank’s journey, however we managed to strive on our own and further strengthened our pillars to anticipate future growth. To reflect the Bank’s spirit of determination and optimism, “Passion for Excellence at Its Best” is carried out as the theme of Annual Report 2016. In addition to portraying the Bank’s position in 2016, it also strongly upholds the QNB Values which instilled in every employee’s heart and mind. Despite the economic challenges and among discrepancies and instability of financial progress, the Bank managed to keep strong and strive to uphold its performance at its best. The Bank also managed to maintain its positioning align with the mission and vision by dedicating to serve better and focus on business strategies using technology. During 2016, the Bank has further improved its service and product through savings and digital platform while in terms of human capital development, the Bank was focusing on better enhancing its human capital while underlining the value of professionalism and integrity. In the future, the Bank is committed to move forward while always promoting compliance and prudent principles to achieve not only significant growth but also sustainable one. The Bank will strive to keep excel in the future and push forward to commit with the target and especially fulfill the 2017 vision.


Ta b

le

of

Co n

te nt

Annual Report 2016

4


Overview of the 2016 Annual Report

02

Our Journey

Focus 2016

06

2016 Performance 13

Financial Ratio

14

Share Highlights

18

Highlights on Shareholders’ Profile

25

Event Highlights 2016

30

Awards and Accolades

32

Testimonials from Customers and Partners

34

Letters to Shareholders 38

Board of Commissioners’ Report

42

Profile of the Board of Commissioners Board of Directors’ Report

50

Profile of the Directors

56

Company Profile Corporate Identity

61

QNB Logo

62

Milestone

64

PT Bank QNB Indonesia Tbk at a Glance

66

Visions and Missions

68

Service Spirit

69

Line of Business

70

Product and Services

78

Work Regions and Operational Map

80

Organizational Structure

Business Review

94

Business Supporting Unit Review

109

Financial Review

126

Marketing Aspect

129

Business Prospect 2017

130


134

Basis of GCG Implementation

138

GCG Implementation

140

Implementation Aspects and Principles of Corporate Governance pursuant to OJK Rules

150

GCG Assessment

151

GCG Structure

152

General Meeting of Shareholders (GMS)

165

The Board of Commissioners

184

Commitees Under the Board of Commissioners

201

Board of Directors

218

Commitees Under the Board of Directors

229

Compliance Function

241

Internal Audit

245

External Audit

247

Corporate Secretary

250

Risk Management

284

Internal Control System

285

Legal Disputes and Administrative Sanctions

286

Code of Conducts and Corporate Culture

288

Tax Compliance

288

Anti-Gratification Initiative

289

Whistleblowing System

291

Information Disclosure & Access to Bank’s Information

294

Provision of Funds to Related Parties and Large Fund Exposures

Bank Strategic Plan

296

Transparency of Bank Financial and Non Financial Performances

297

Conflict of Interests Transactions

297

Shares Option

297

Shares and Bond Buy Back

297

Investor Relation

298


302

Basis of CSR Implementation

304

Environmental Responsibility

305

Occupational Health, Safety, and Employment

308

Social and Community Development

310

Product and Consumer Responsibility

314

Responsibility Statement of Annual Report 2016

316

Profile of Executive Management

320

Capital Market Supporting Profession and Institutions

321

Branch Office Addresses

324


60

89

295


46

Industry Overview

Management Discussion and Analysis

Financial Highlights

86

Provision of Funds for Political Activities

Company Profile

10


294

Management Report

03

82

2016 Performance

01

Reference of OJK Circular Letter No. 30/SEOJK.04/2016


5


Pe r

fo r

m 20 an 16 ce

Annual Report 2016

6


2016 Performance

Management Report

Company Profile




7



8


2016 Performance Management Report Company Profile Management Discussion and Analysis Corporate Governance



Year 2016 was a challenging one, however we managed to strive on our own while strengthening our business platform. 9


Financial Highlights (in million Rupiah)

Financial Position Statements

2016

2015

2014*)

Assets 51,260

45,432

1,635,116

1,710,947

Cash Current accounts with Bank Indonesia

80,815

31,146

2,230,074

2,111,813

Current accounts with other banks Placements with Bank Indonesia and other banks

-

15,093,659

8,197,682

3,168,908

232,642

367,681

365,827

57,114

43,881

39,897

-

11,867

9,865

114,631

111,225

118,302

42,370

34,192

20,817

-

-

-

146,014

122,756

70,847

13,980

25,757,649

20,839,018

11,051,347

4,644,654

571,862

325,444

Prepayments

188,969

108,443

Deferred tax assets - net

172,105

-

Fixed assets

144,762

110,577

Intangible assets

41,176

45,670

Foreclosed assets

1, 019,382

-

Other assets - net

191,900 24,372,702

Liabilities 240,658

337,357

19,344,962

18,509,008

662,798

3,179,111

Acceptances payable

22,193

61,821

Derivatives payable

12,890

661

Deposits from other banks

Current tax payable Obligation for post - employment benefits

-

2,401

97,407

80,619

20,402

-

-

63,892

42,954

17,795

-

-

-

23,333,465

18,573,997

9,549,515

3,781,586

2,189,287

2,189,287

2,189,287

1,539,583

890,447

(24,570)

(24,570)

(24,570)

(21,983)

(19,458)

1.700.509

-

-

-

-

32

-

(58)

-

8

(12,907)

(16,444)

(19,503)

(14,108)

-

20,894,773

Unrealized gain (loss) on available - for-sale securities - net of deferred tax Retained earnings (deficit):

5,396

4,396

4,396

4,396

4,396

(379,818)

271,515

115,469

(6,056)

(12,325)

3,477,929

2,424,184

2,265,021

1,501,832

863,068

24,372,702

25,757,649

20,839,018

11,051,347

4,644,654

Appropriated

*) After the transition adjustment to SFAS No. 24 (Revised 2013)


2,534

-

Equity

10

141,678

-

964,950

Total Liabilities and Equity

-

1,371

-

-

-

Equity - Net

36,356

-

-

315.520

Unappropriated

1,853,000

60,744

23,734

Subordinated loan

Actuarial loss, net of deferred tax

1,863,330

-

Marketable securities issued

Disclosed reserve

68,083 3,633,084

88,645

155,213

Additional paid-in capital - net

178,304 7,244,934

7,031

42,324

198,345

Share capital

252,785 16,161,710

142,732

-

Accruals and other liabilities

Deferred tax liabilities - net

Total Liabilities

98,564 469,495

73,881

Securities

Deposits from customers

19,038 1,242,652

268,324

20,788,304

Liabilities payable on demand

43,324 3,324,797

2,639

17,551,188

Total Assets

43,671 292,689

-

269,117

Loans - net

56,633 818,168

3,600

471,350

Securities purchased under agreement to resell

52,653 1,425,155

849

2,921 61,821

Acceptances receivable

2012

60,744

550 22,193

Derivatives receivable

2013*)

2016 Performance

(in million Rupiah) Comprehensive Income Statement

2016

2015

2014*)

Operating Income and Expense

2013*)

2012

336,359

2,040,582

1,221,121

506,437

(1,351,331)

(814,499)

(275,492)

(163,850)

516,417

689,251

406,622

230,945

172,509

123,490

194,258

174,801

95,023

4,129

72,097

13,434

29,971

46,482

Gain from sale of securities

-

-

-

-

Recoveries of impairment losses on financial assets - net

-

-

-

3,773

4,304

4,075

4,826

4,661

10,592

12,562

199,662

212,518

209,433

155,870

40,786

Personnel expenses

(397,332)

(375,743)

(293,603)

(244,885)

(161,441)

General and administrative expenses

(243,962)

(225,106)

(149,612)

(138,668)

Provision for impairment losses on financial and non-financial assets

(929,519)

(87,472)

(1,626)

-

-

(7,877)

(8,175)

(12,296)

(7,085)

(2,200)

(1,578,690)

(696,496)

(456,137)

(390,638)

(256,780)

(862,611)

205,273

159,918

(3,823)

(43,485)

(3,339)

3,662

2,910

10,550

(865,950)

208,935

162,828

6,727

(34,424)

215,617

(52,889)

(41,303)

(2,140)

4,925

(650,333)

156,046

121,525

4,587

(29,499)

43

77

(77)

(10)

(9)

(11)

(19)

19

2

3

32

58

(58)

(8)

(6)

-

Interest expense Net interest income Other Operating Income Fees and commission Gain on foreign exchange transactions - net

Others

Operating Expenses

Total other operating expenses (LOSS) Income From Operations Non Operating (Expenses) Income - Net (LOSS) Income before Income Tax EXPENSE Income tax benefit (expenses) (Loss) Income for the Year

(93,139)

9,061


Others

1,606 18,185

Company Profile

Total other operating income

Management Report

2,048,592 (1,532,175)

Interest income

Other Comprehensive Income Fair value changes of available for sales securities Income tax relating to component of other comprehensive income

Items that will not be classified to profit or loss Income tax related to component of other comprehensive income

4,078

(7,193)

4,292

(1,019)

1,798

(1,073)

-

3,537

3,059

(5,395)

3,219

-

3,569

3,117

(5,453)

(3,211)

(6)

(646,764)

159,163

116,072

7,798

(29,505)

(74.26)

17.82

16.34

0.66

6.73

Other comprehensive gain (loss), net of tax Total comprehensive (loss) income for the year (Loss) Earnings per share - basic (in full amount)

*) After the transition adjustments to SFAS No, 24 (Revised 2013)


11


4,716 (1,179)

Actuarial gain (loss) on defined benefit plan


Items that will be classified to profit or loss


Total Assets

Total Equity

(in million Rupiah)

(in million Rupiah)

4,644,654

11,051,347

20,839,018

25,757,649

24,372,702

863,068

1,501,832

2,265,021

2,424,184

3,477,929

2012

2013

2014

2015

2016

2012

2013

2014

2015

2016

Loans - Net

Allowance for Impairment Losses

(in million Rupiah)

(in million Rupiah)

3,168,908

8,197,682

15,093,659

20,788,304

17,551,188

14,633

10,860

12,461

41,740

736,726

2012

2013

2014

2015

2016

2012

2013

2014

2015

2016

Deposits from Customer

Capital Adequacy Ratio (in Percentage)

(in million Rupiah) 3,633,084

7,244,934

16,161,710

18,509,008

19,344,962

27.76

18.74

15.10

16.18

16.46

2012

2013

2014

2015

2016

2012

2013

2014

2015

2016

12


Financial Ratio 2016 Performance

(in million Rupiah) Financial Ratio (%)

2016

2015*)

2014*)

2013*)

2012

Capital 16.46

16.18

15.10

18.74

27.76

Productive assets & non productive assets (Non-performing assets) to total productive assets & non productive assets

5.16

2.13

0.21

0.14

0.49

Non-performing productive assets to total productive assets

5.38

2.13

0.21

0.14

0.56

Allowance for impairment losses to productive assets

3.16

0.16

0.06

0.08

0.31

NPL gross

6.86

2.59

0.31

0.23

0.73

NPL net

2.94

2.39

0.23

0.10

0.31

ROA

-3.34

0.87

1.05

0.09

-0.81

ROE

-31.96

7.50

6.62

0.40

-3.38

NIM

2.25

3.08

2.80

2.82

4.63

137.94

90.95

88.90

100.57

111.53

94.54

112.54

93.47

113.30

87.37

Related parties

0.00

0.00

0.00

0.00

0.00

Non related parties

0.00

0.00

0.00

0.00

0.00

Minimum Rupiah demand deposit

7.24

7.59

8.35

8.01

8.02

Minimum foreign currency demand deposit

8.37

8.54

8.14

8.32

8.19

Net open position

0.25

0.26

0.22

1.49

2.31

Capital Adequacy Ratio

Management Report

Productive Assets

BOPO

Company Profile

Profitability

Liquidity Management Discussion and Analysis

LDR Compliance Percentage of Legal Lending Limit violations

*) After the transition adjustments to SFAS No, 24 (Revised 2013) Corporate Governance Corporate Social Responsibility


13


Share Highlights Bank QNB Indonesia Share Performance 2015 – 2016 (in shares)

(in Rupiah)

600,000

800 700

500,000

600 400,000

500

300,000

400 300

200,000

200 100,000

100

Volume

Dec, 16

Oct, 16

Nov, 16

Sept, 16

Jul, 16

Aug, 16

Jun, 16

Apr, 16

May, 16

Mar, 16

Jan, 16

Feb, 16

Dec, 15

Nov, 15

Oct, 15

Aug, 15

Sept, 15

Jul, 15

Jun, 15

May, 15

Apr, 15

Mar, 15

Feb, 15

0 Jan, 15

0

Closing Price

During 2015, the Bank’s share trading was suspended for 1 day on May 4, 2015, due to significant increase in the cumulative prices of Bank’s shares. During 2016, there was no suspend on Bank’s share trading.

Share Price, Volume, and Capitalisation Price 2016 Opening

Highest

Lowest

Closing

Transaction Volume

Market Capitalisation

Number of Listed Shares

Q1

290

405

255

345

837,000

2,991,003,215,610

8,669,574,538

Q2

340

404

290

328

262,600

2,843,620,448,464

8,669,574,538

Q3

328

406

302

350

278,200

3,034,351,088,300

8,669,574,538

Q4

350

390

284

320

253,100

2,774,263,852,160

8,669,574,538

Price 2015 Opening

Highest

Lowest

Closing

Transaction Volume

Market Capitalisation

Number of Listed Shares

Q1

410

430

330

330

55,000

2,860,959,597,540

8,669,574,538

Q2

330

800

358

434

948,000

3,762,595,349,492

8,669,574,538

Q3

434

480

306

335

860,800

2,904,307,470,230

8,669,574,538

Q4

335

374

253

290

926,200

2,514,176,616,020

8,669,574,538

14


2016 Performance

Shareholders’ Structure H.M. Aksa Mahmud (30.70%) Hj. Ramlah Aksa (7.68%) Erwin Aksa (7.68%) Sadikin Aksa (7.68%) Melinda Aksa (7.68%) Atirah Aksa (7.68%) Muhammad Subhan Aksa (7.68%) Solfinz Capital Limited (8.45%) Monalisa Imprenditore Incorporated (5.07%) Inwardvest Overseas Limited (4.86%) Benefiquest Incorporated (4.84%)

Management Report

• • • • • • • • • • •

Qatar Government

Company Profile

100.00%

Sadikin Aksa

Qatar Investment Authority

Public

94.08%

5.92%

50.00%

50.00%

Qatar National Bank S.A.Q

Public

8.15%

82.59%

9.26%


PT Bosowa Kapital


PT Bosowa Corporindo



(Shareholders’ structure as of December 2016)


15


Shareholders’ Composition Public

9.26%

PT Bosowa Kapital

Qatar National Bank S.A.Q

8.15%

82.59%

List of Top 20 Shareholders Name of Shareholders

Number of Shares (Shares)

Share Percentage (%)

Domestic Institution Ownership PT Bosowa Kapital

713,429,674

8.15

PT Jasa Investindo

294,880,950

3.37

PT Raya Niaga Abadi

46,937,778

0.54

PT Bosowa Sekuritas

30,252,684

0.35

PT Bosowa Asuransi

29,646,867

0.34

PT Bosowa Multi Finance

27,042,234

0.31

PT Fbrt Corporindo

9,342,407

0.11

PT Erdikha Elit Sekuritas

7,785,000

0.09

Foreign Institution Ownership Qatar National Bank

7,232,691,746

82.59

Deutsche Bk Ag (Private Banking) Spore - 2146014000

31,325,155

0.36

Ubs Ag Singapore Non-Treaty Omnibus Account - 2091144090

17,398,927

0.20

7,266,122

0.08

191,950,807

2.19

31,640,428

0.36

25,000,000

0.29

22,222,222

0.25

11,940,300

0.14

8,333,333

0.10

4,166,666

0.05

4,166,666

0.05

NIL

NIL

Credit Suisse Ag Singapore Trust A/C Clients - 2023904000 Domestic Individual Ownership Albert Widjayatmo Yulianto Kurniawan Simon Koshan Lie Lian Tie Cherie Thomas Sudirja Gunadi Donald Adrisurya Melinda Lesmana Foreign Individual Ownership NIL Note:

As of December 31, 2016, members of the Board of Commissioners and Board of Directors do not own any shares of the Bank.

16



Chronology of Share Listing Description Before Initial Public Offering (IPO)

Corporate Action

Paid-up Capital 321,200,000 shares = Rp80,300,000,000

-

400,000,000 shares = Rp100,000,000,000

Warrant Series I (November 21, 2005)

Execution of Warrant Serial I into share of 101,219,000 shares

501,219,000 shares = Rp125,304,750,000

Rights Issue I (June 15, 2009)

Limited Public Offering with Preemptive Rights (Rights Issue) I of 125,304,750 shares

626,523,750 shares = Rp156,630,937,500

Rights Issue II (December 27, 2011)

Limited Public Offering with Preemptive Rights (Rights Issue) II of 2,935,263,768 shares

3,561,787,518 shares = Rp890,446,879,500

Rights Issue III (May 27, 2013)

Limited Public Offering with Preemptive Rights (Rights Issue) III of 2,596,543,000 shares

6,158,330,518 shares = Rp1,539,582,629,500

Rights Issue IV (June 2, 2014)

Limited Public Offering with Preemptive Rights (Rights Issue) IV of 2,598,815,479 shares

8,757,145,997 shares = Rp2,189,286,499,250


17


Initial Public Offering of 78,800,800 shares and listed on Indonesia Stock Exchange under the code of ”BKSW”


IPO (October 31, 2002)


Highlights on Shareholders’ Profile Qatar National Bank Qatar National Bank S.A.Q (QNB Group) was established in 1964 as the country’s first Qatari-owned commercial bank, with an ownership structure split between the Qatar Investment Authority (50%) and (50%) held by members of the public. QNB Group has steadily grown to be the biggest bank in Qatar and leading financial institution in the Middle East and Africa Region with a market share around 45% of banking sector assets. QNB Group is present, through its subsidiaries and associate companies, in more than 30 countries across three continents providing a comprehensive range of products and services. QNB Group staff exceeds 28,000 serving more than 20 million customers through 1,200 locations and 4,300 ATMs.

It is one of the listed companies with the highest credit rating.

50% of its shares are owned by the Government of Qatar through its legal entity, namely Qatar Investment Authority/ Qatar Holding LLC.

It has more than 28,000 total employees operating through more than 1,200 locations, with an ATM network of more than 4,300 machines.

It is currently licensed to conduct business in more than 30 countries, including the UK, France, Yemen, Luxembourg, Oman, Kuwait, Egypt, Singapore, China, India, and Vietnam.

Achievements Based on the Group’s continuous strong financial performance and its expanding international presence, QNB is currently ranked as the most valuable bank brand in The Middle East and Africa according to Brand Finance Magazine. Bloomberg Markets, the leading provider of business, financial, and economic news ranked QNB as “One of the World’s Strongest Banks” since 2013. For two consecutive years, 2014 and 2015, the Bank was

18


recognized as “The Best Bank in The Middle East” by Euromoney Magazine. The Global Finance Magazine ranked QNB as “One of The Top 50 Safest Banks in the World” in 2016. Building with its continued success, QNB Group has embarked on the aspiration on becoming a Leading Bank in the Middle East, Africa, and Southeast Asia (MEASEA) by 2020.

2016 Performance

Rating According to Moody’s, Standard and Poor’s, Capital Intelligence, and Fitch, QNB Ratings are as follows: Capital Intelligence

Moody’s

Foreign Currency Short Term

AA-

A1+

Support Rating

AA-

1

Standard and Poor’s

Financial Strength Long Term

Short Term

Aa3

P-1

Management Report

Long Term

Bank Deposits

Financial Strength

baa1

Fitch

Bank Credit and Deposits Short Term

A+

A-1

Long Term

Short Term

Support

Viability

AA-

F1+

1

a

Company Profile

Long Term

Subsidiaries Country of Incorporation

Year of Incorporation

Ownership % 100%

Luxemborg

2004

Housing Bank for Trade and Finance (HBTF)

Jordan

2007

35%

CSI QNB Property

France

2008

100%

QNB Capital LLC

Qatar

2008

100%

Commercial Bank International (CBI)

UAE

2008

40%

Switzerland

2009

100%

QNB International Holdings Limited

QNB Banque Privee

2009

51%

2010

100%

Bank of Commerce & Development

Libya

2010

49%

QNB Financial Services SPC

Qatar

2011

100%

QNB Finance Ltd.

2011

82.59%

Iraq

2012

51%

Al Jazeera Finance Company

Qatar

2012

20%

Tunisia

2013

99.96%

QNB ALAHLI (QNBAA)

Egypt

2013

97.12%

QNB India Private Limited

India

2013

100%

Ecobank Transnational Incorporated (Ecobank)

Togo

2014

20%

Turkey

2016

99.81%

QNB Tunisia

QNB Finansbank


Indonesia

Al-Mansour Investment Bank

QNB Indonesia


Syria Cayman Island

QNB – Syria


Subsidiary

Shareholder Structure as of December 31, 2016 Shareholder

Number of Shares

Percentage

Qatar Government q.q Qatar Holding LLC

349,864,719

Public

349,864,719

50%

Total Issued and Fully Paid

699,729,438

100%


50%

19


Qatar National Bank S.A.Q. Consolidated Statement of Financial Position As of December 31, 2016

(All amounts are shown in thousands of Qatari Riyals) 2016 Assets

31,565,771

Cash and Balances with Central Banks

43,183,576

Due from Banks

45,721,215

17,100,764

420,417,271

388,292,129

Loans and Advances to Customers

79,993,550

81,157,075

Investments in Associates

7,340,355

7,950,721

Property and Equipment

4,208,679

1,753,715

Intangible Assets

3,882,648

5,377,758

Other Assets

14,947,261

5,409,207

Total Assets

719,694,515

538,607,140

Investment Securities

LIABILITIES

61,834,516

36,281,598

506,694,587

395,190,302

Debt Securities

28,825,874

16,342,420

Other Borrowings

23,728,887

15,120,489

Other Liabilities

27,757,233

13,616,933

Total Liabilities

648,841,097

476,551,742

Due to Banks

Customer Deposits

EQUITY

Issued Capital

8,396,753

6,997,294

Legal Reserve

24,486,361

23,086,902

Risk Reserve

7,000,000

5,000,000

Fair Value Reserve Foreign Currency Translation Reserve

24,456

283,607

(11,604,928)

(2,033,640)

608,600

1,212,210

Retained Earnings

31,112,008

26,556,932

Total Equity Attributable to Equity Holders of the Bank

60,023,250

61,103,305

830,168

952,093

Instrument Eligible for Additional Tier 1 Capital

10,000,000

-

Total Equity

70,853,418

62,055,398

719,694,515

538,607,140

Other Reserves

Non - Controlling Interests

Total Liabilities and Equity

20

2015


2016 Performance

Qatar National Bank S.A.Q. Consolidated Income Statement For the Year Ended December 31, 2016

(All amounts are shown in thousands of Qatari Riyals) 2015 20,019,476 (7,273,706)

17,887,115

12,745,770

Fee and Commission Income

4,056,830

2,499,966

Fee and Commission Expense

(603,652)

(257,049)

Net Fee and Commission Income

3,453,178

2,242,917

Foreign Exchange Gain

Interest Expense Net Interest Income

1,013,328

746,295

Income from Investment Securities

240,105

162,418

Other Operating Income

314,062

5,036

Operating Income

22,907,788

15,902,436

Staff Expenses

(3,628,234)

(2,055,104)

Depreciation

(241,370)

(2,850,244)

(1,208,713)

(52,300)

(179,774)

(2,493,012)

(433,043)

Amortisation of Intangible Assets

(77,754)

(79,775)

Other Provisions

(95,379)

(69,040)

(9,741,385)

(4,266,819)

Net Impairment Losses on Investment Securities Net Impairment Losses on Loans and Advances to Customers

Share of Results of Associates Profit Before Income Taxes

176,924

365,938

13,343,327

12,001,555 (672,791) 11,328,764

Equity Holders of the Bank

12,364,637

11,264,242


39,642

64,522

12,404,279

11,328,764

14.4

16.1

Profit for the Year Attributable to:

Profit for the Year Basic and Diluted Earnings Per Share (QR)


(939,048) 12,404,279

Income Tax Expense


Other Expenses

(544,462)

Company Profile

36,936,478 (19,049,363)

Interest Income

Management Report

2016



21


Qatar National Bank S.A.Q. Consolidated Statement of Comprehensive Income For the Year Ended December 31, 2016

(All amounts are shown in thousands of Qatari Riyals) 2016 Profit for the Year

2015

(9,676,445)

11,328,764

Other comprehensive income to be reclassified to income statement in subsequent periods: (603,726)

(703,843)

Share of Other Comprehensive Income of Associates

(24,609)

(493,913)

Effective Portion of Changes in Fair Value of Cash Flow Hedges

581,930

(17,329)

Net Change in Fair Value

(653,595)

(196,495)

Net Amount Transferred to Income Statement

(160,185)

(76,377)

(10,536,630)

(1,487,957)

1,867,649

9,840,807

Equity Holders of the Bank

1,930,588

9,776,285


(62,939)

64,522

1,867,649

9,840,807

Foreign Currency Translation Differences for Foreign Operations

Available-for-Sale Investment Securities

Total Other Comprehensive Income for the Year, net of Income Tax Total Comprehensive Income for the Year Attributable to:

Total Comprehensive Income for the Year

Qatar National Bank S.A.Q. Consolidated Statement of Cash Flow For the Year Ended December 31, 2016

(All amounts are shown in thousands of Qatari Riyals) 2016

2015

Cash Flows from Operating Activities 13,343,327

12,001,555

(36,936,478)

(20,019,476)

19,049,363

7,273,706

544,462

241,370

2,493,012

433,043

Net Impairment Losses on Investment Securities

52,300

179,774

Other Provisions

73,124

12,969

Dividend Income

(79,920)

(86,041)

Profit for the Year Before Income Taxes Adjustments for: Interest Income Interest Expense Depreciation Net Impairment Losses on Loans and Advances

22


Net Loss / (Gain) on Sale of Property and Equipment Net Gain on Sale of Available-for-Sale Investment Securities Amortisation of Intangible Assets Net Amortisation of Premium or Discount on Financial Investments Net Share of Results of Associates

Due from Banks Loans and Advances to Customers Other Assets Due to Banks Customer Deposits Other Liabilities

Interest Received Interest Paid Dividends Received Income Tax Paid Other Provisions Paid

(159) (76,377)

77,754

79,775

(11,606)

(27,148)

7,644

(178,566)

(1,544,661)

(165,575)

(6,208,185)

(1,338,061)

(78,453,499)

(50,595,177)

44,406

(372,896)

8,085,183

14,167,893

85,380,684

37,698,823

(3,985,840)

(2,391,977)

3,318,088

(2,996,970)

36,561,563

19,546,140

(18,079,917)

(7,600,125)

79,920

86,041

(567,803)

(661,824)

(66,005)

(5,372)

21,245,846

8,367,890

(63,962,428)

(71,073,236)

59,714,925

55,220,622

-

(49,909)

Cash Flows from Investing Activities Acquisition of Investment Securities Proceeds from Sale / Redemption of Investment Securities Investments in Associates

(9,610,068)

-

Additions of Property and Equipment

(1,105,261)

(290,301)

596

1,833

(14,962,236)

(16,190,991)

Proceeds from Issuance of Instrument Eligible for Additional Tier 1 Capital

10,000,000

-

Proceeds from Issuance of Debt Securities

13,026,589

-

Repayment of Debt Securities

(5,228,893)

(5,460,750)

Proceeds from Sale of Property and Equipment Net Cash used in Investing Activities Cash Flows from Financing Activities

10,998,695

12,827,191

Repayment of Other Borrowings

(4,033,225)

(10,264,017)

Dividends Paid

(2,468,978)

(5,231,852)

Net Cash from / (used in) Financing Activities

22,294,188

(8,129,428)

Net Increase / (Decrease) in Cash and Cash Equivalents

28,577,798

(15,952,529)

Effect of Exchange Rate Fluctuations on Cash Held

(5,764,365)

2,571,816

Cash and Cash Equivalents at January 1

30,050,614

43,431,327

Cash and Cash Equivalents at December 31

52,864,047

30,050,614



Proceeds from Issuance of Other Borrowings


Acquisition of Subsidiary, net of Cash Acquired


Net Cash from Operating Activities

2,542 (160,185)

Company Profile

Cash from / (used in) Operations

2015

Management Report

Changes in:

2016 Performance

2016

23


PT Bosowa Kapital PT Bosowa Kapital was initially established under the name of PT Darmex Corporation pursuant to the Deed No. 94 dated December 14, 1993, prepared and presented before Rukmasanti Hardjasatya, S.H., Notary in Jakarta, which had received approval from the Minister of Justice of Republic of Indonesia by the issuance of the Decree No. C2-11223.HT.01.01 year 1994, dated July 21, 1994, registered on February 24, 1999, under the No. 08/1999 at the Central Jakarta District Court, and published in the State Gazette of Republic of Indonesia No. 32 dated April 20, 1999, Supplement No. 2331. The Articles of Association of PT Bosowa Kapital has been amended several times, with last amendment in the Statement Deed of the Shareholders’ decision to circulation No. 110, dated June 27, 2013, prepared and presented before Karin Christiana Basoeki, S.H., Notary in Jakarta. The amendment of the Articles of Association has been approved and recorded in the database of Legal Entities Administration System (Sisminbakum) of the Ministry of Law and Human Rights of Republic of Indonesia No. AHU-AH. 01.10-26349 dated June 28, 2013. As of December 31, 2015, PT Bosowa Kapital owns 8.15% shares of the Bank. Aims and Objectives PT Bosowa Kapital is a parent company of Financial Services Group which incorporated with Bosowa Group. Pursuant to the Article 3 of the Articles of Association of PT Bosowa Kapital, the purpose and objective of the company is to operate in the fields of services, construction, land transportation, trade, industry, and agriculture.

24


Event Highlights 2016 2016 Performance

January 19

19

26 16

16

Christmas celebration of Bank QNB Indonesia, Cisarua, Bogor Management Report Company Profile

February

Annual General Meeting of Shareholders, QNB Tower, Jakarta Management Discussion and Analysis

18

Customer Gathering Introduction to QNB Indonesia and Market Outlook, Novotel Hotel, Solo

26


March 22

Soft launching DooEt+, QNB Tower, Jakarta Corporate Social Responsibility


25


April 26

13

Extraordinary General Meeting of Shareholders, QNB Tower, Jakarta

26

QNB Indonesia & Commonwealth Life Signing Ceremony, QNB Tower, Jakarta

28

Bazar DooEt+, 18 Parc SCBD, Jakarta

May 18

2

QNB Indonesia Peduli: Donor Darah, QNB Tower, Jakarta

18

Penandatanganan Kerjasama QNB Indonesia & Prudential Life Assurance, QNB Tower, Jakarta

June 22

16

Ramadhan Gathering, QNB Tower, Jakarta

22

QNB Indonesia Peduli: Sobat Berbagi, QNB Tower, Jakarta

29

Breakfasting, Sunda Kelapa Great Mosque, Jakarta

26


2016 Performance

July 27

27

Wholesale Gathering, JW Marriott Hotel, Surabaya Management Report

30

QNB Values Festival, Ecopark Ancol, Jakarta

Company Profile

August 15

15

Wholesale Gathering: Tax Amnesty, QNB Tower, Jakarta Management Discussion and Analysis

21

Sehat Bersama QNB Indonesia, Makassar

25

Infobank Awards 2016, Royal Ambarrukmo Hotel, Yogyakarta

26

Bazaar DooEt+ Payday, QNB Tower, Jakarta


September 15

15


Signing Ceremony QNB Indonesia and PT Artajasa, Century Park Hotel, Jakarta

28

Bazaar DooEt+ Payday, QNB Tower, Jakarta


27


October 4

1

QNB Indonesia Peduli: Garut, Cimacan, West Java

4

Cluster Raffle Program, QNB Tower, Jakarta, and Cluster Raffle Program and Wholesale Gathering, V Building Semarang

6

Cluster Raffle Program, QNB Indonesia Medan Pemuda Branch, Medan

13

Anugerah Perbankan Indonesia V 2016, Balai Kartini, Jakarta

19

Financial Literacy, Athirah Islamic School, Makassar

28

DooEt+ Payday, QNB Tower, Jakarta

29

Launching of Loyalty Apps Cinere Bellevue Mall, Depok

November 24

5

Launching of Loyalty Apps Fruit Market, Gadjah Mada, Jakarta

7

Signing Ceremony Loyalty Membership Big Mall, Samarinda and Duta Mall, Banjarmasin

12

QNB Indonesia Peduli and Cherish BEM FKUI: Mother and Children Health, Depok

15

MDP Graduation 2015, QNB Tower, Jakarta

18

Launching of Loyalty Apps, Ratu Indah Mall, Makassar

24

Grand Launching DooEt+ Mobile Banking, The Hook, Jakarta

30

DooEt+ Payday, QNB Tower, Jakarta

28


2016 Performance

December 14

4

Children Drawing Competition, QNB Indonesia Denpasar Branch, Bali Management Report

9

Launching Loyalty Apps, Hartono Mall, Solo

12

QNB Indonesia Exhibition, Trans Studio Mall, Bandung

14

Qatar National Day, Raffles Hotel, Jakarta Company Profile

18

Launching Loyalty Apps, Big Mall, Samarinda

19

Extraordinary General Meeting of Shareholders and Public Expose, QNB Tower, Jakarta Management Discussion and Analysis Corporate Governance Corporate Social Responsibility


29


Awards and Accolades

2015 Vision Awards

(Presented by League of American Communications Professionals) Platinum Award, Top 80 Annual Reports in the Asia-Pacific Region, Top 10 Indonesian Annual Reports of 2015

Anugerah Perbankan Indonesia V 2016

(Presented by Economic Review Magazine) 1st place of Human Capital category, 2nd place in Finance category, 3rd place of BUKU II Bank, 3rd place in GCG category

Infobank Awards 2016

(Presented by Infobank Magazine) Excellent Financial Performance in 2015

30


2016 Performance Management Report

ACCOLADE

(Presented by Warta Ekonomi) Certificate of Appreciation

Company Profile Management Discussion and Analysis

ACCOLADE

(Presented by Prudential Life Assurance) Bancassurance Signing Agreement

ACCOLADE

(Presented by Commonwealth Life) Bancassurance Signing Agreement Corporate Governance Corporate Social Responsibility

ACCOLADE

(Presented by Perbarindo) National Seminar and Rakernas Perbarindo 2016

ACCOLADE

(Presented by Bank Indonesia) The Bank which Properly Projected Money Demand during Eid-ul-Fitr 2016


31


Testimonials from Customers and Partners PD BPR Bank Magelang (Ir. Hery Nurjianto, M.M.)

"

It is such an immeasurable happiness that our participation, PD BPR Bank Magelang, in BPRconnect in cooperation with Bank QNB Indonesia to be very meaningful. We realize that as a rural bank (BPR), in terms of financially or technology, our capabilities are very far below commercial bank, so as to payment card system is certainly a desire that is difficult for us to realize. The dynamics of community demands us (rural bank) to be able to meet customers’ needs for banking products including fast, secure, and accurate transaction processing. We are very grateful that our cooperation with Bank QNB Indonesia was not just the ordinary cooperation. Bank QNB Indonesia with its BPRconnect Program was able to build determination, guide, direct, support, motivate, and significantly realize that rural banks (BPR) could be the ATM card issuer. Profuse gratitude is addressed to all Board of Bank QNB Indonesia, may the existing partnership will continue to synergize and continue to provide meaning for us all in the future.”

Tokyo Skip Jack (Cahyono)

"

It has been a very pleasant experience to be able to cooperate and grow together with QNB Indonesia, mainly as a merchant of DooEt +. DooEt+ as one of the highly innovative payment methods provides comfort and convenience for both Customers and also to Merchants. The support that we received from the entire staffs of QNB Indonesia was incredible. We hope that this cooperation could be further improved. Keep moving forward, QNB Indonesia!”

32


PT Arafura Prima Indopasifik (The Hook Restaurant & Cafe) (Rivano, General Manager)

"

We (The Hook Restaurant & Cafe) would like to say a big thank to Bank QNB Indonesia, for its cooperation during the time, which always support us as a merchant of DooEt+. This cooperation impacted to the increasing number of customers that come to The Hook Restaurant & Cafe and in addition QNB Indonesia also helps us in other promotional activities to introduce and provide information to the public about the existence and promos in The Hook Restaurant & Cafe. Once again, The Hook Restaurant & Cafe really grateful for such cooperation.”

PD BPR Bank Bapas 69

(Fran Suharmaji, President Director)

"

QNB is a Smart Bank. In the end, QNB succeeded in realizing the needs of BPR in improving services to BPR’s customers after failing to cooperate with the two previous banks. The partnership is very remarkable ranging from service to assistance capable of delivering BPR to the licensing of BPR ATM card issuance. In addition, QNB also held a training facility for BPR so that BPR could expand wider horizons for the progress of the BPR. Just one more step to realize the dream as an ATM card issuer and we expect many other facilities that we could get from Bank QNB.”

2016 Performance

Management Report

Company Profile





Sh

L ar et eh te ol rs t de o rs

Annual Report 2016

34


2016 Performance

Letters to Shareholders

Company Profile




35



36


2016 Performance Letters to Shareholders Company Profile Management Discussion and Analysis Corporate Social Responsibility



By the strong capital support from the QNB Group, we are confident and fully committed to achieve our vision and grow significantly in the future. 37


Board of Commissioners’ Report

"

The Board of Commissioners believes that the Board of Directors has worked hard to implement best management practices through a well-planned strategy, risk control, and corporate governance practices. Overall, the Bank has shown quite considerable performance.“ Dear valued shareholders and stakeholders,

Ali Ahmed Z A Al Kuwari President Commissioner

All praise and gratitude to God Almighty, the Most Gracious and Most Merciful. May His grace and blessings be always upon us. The Board of Commissioners is grateful that the Bank has successfully passed 2016 considering the unfavorable economic conditions of both global and domestic. It is an honor for me representing the Board of Commissioners of PT Bank QNB Indonesia Tbk in presenting the Annual Report 2016.

Global and Indonesia Economic Development The global economy has now entered its sixth year of stagnation, and the growth outlook still shows a continuation of this trend. Modest positive signals showed some strengthening in qualitative growth factors, such as more advanced technology, improved labor force skills, and greater productivity. But those potentially favorable factors are under pressure from ongoing political, policy, and economic uncertainties

38


around the world. Businesses have to prepare for more disruptions from geopolitical tensions, policy uncertainty, financial market volatility, and rapid changes in technology, but they also need to stay focused on leveraging the qualitative sources of growth with investment in technology and business productivity even—or especially—in times of stagnation. Prospects for major advanced economies have deteriorated, amid weak global trade and manufacturing activity. Growth is generally expected to level off in 2016, rather than strengthen, despite the positive effects on real incomes from lower oil prices and improving labor market conditions. With increasing downside risks to growth, and inflation persistently below target, the European Central Bank (ECB) and Bank of Japan pursued further policy accommodation, while the U.S. Federal Reserve has normalized policy interest rates more slowly than expected in December. China continued its gradual slowdown and rebalancing, as reforms were implemented and their impact

It has always been the duties of the Board of Commissioners to make sure that the Bank’s strategy implementation is on the right track without neglecting the compliance to prevailing regulations. Therefore, during 2016 the Board of Commissioners has strived to do the best in ensuring the Bank’s monitoring went well. In particular, the Board of Commissioners has further improved its monitoring function by carrying out monitoring on various operation aspects by holding intensive communication with the Board of Directors.




On the financial aspect, total assets posted at Rp24.37 trillion or decline by 5.38% from the previous year. In addition, loans-net also declined by 15.57% to Rp17.55 trillion in line with the Bank’s decision to allocate higher allowance allowance for impairment losses amounted to Rp736.73 billion or increased significantly by 1,665.04% compared to previous year. While in terms of key ratio

The Role of Monitoring on the Bank’s Strategy Implementation


It was a grateful thing that the Bank has managed to thrive amid a slowdown in the growth of the Indonesian economy which also affected the financing quality of banking industry. The Board of Commissioners is aware that it is very challenging to the Bank in meeting the target of Bank’s Business Plan. Therefore, the Board of Commissioners appreciates the hard work of the Board of Directors in the achievement of the Bank’s Business Plan 2016.

The Board of Commissioners believes that the Board of Directors has worked hard to implement best management practices through a well-planned strategy, risk control, and corporate governance practices. Overall, the Bank has shown quite considerable performance.

Company Profile

These development of global economic slowdown and geopolitical situation have affected the Indonesian economy and the impact was evenly distributed across all sectors of industry including banking which led to the Rupiah volatility and GDP growth of around 5.0% as robust private consumption supported activity. Households have benefited from low inflation and loosening monetary policy, which has shored up growth in the face of a demure

Assessment on the Board of Directors’ Performance

indicators, in line with the Bank’s focus on selective credit expansion, the Board of Directors managed to maintain asset quality with NPL net of 2.94%. In terms of capital adequacy, the Bank received capital injection and able to maintained the CAR at 16.46%, far above the defined terms. The Board of Commissioners also appreciates the continuous support of QNB Group to increase the Bank’s capital and business support in order to facilitate the Bank’s growth.


Overall, the world economy which originally projected to grow 3.5% shall be corrected to 3%, lower than previous year of 3.1%. Such potential downward bias was driven by the expectation of US economic growth which was not as strong as previously projected and the decelerating Chinese economy. The increased in interest rates on the US Federal Reserve (Fed Funds Rate) which was occured in December 2016 contributed to the uncertainty in the market and influence the development of the global economy. The Fed’s policy normalization could potentially trigger capital outflows, which could cause financial market pressures in the region, including Indonesia.

external sector. The manufacturing PMI (Purchasing Managers’ Index) picked up in November, although it remained in contractionary territory, while the trade balance was broadly steady in October and for the rest of the year. Meanwhile, the government is focused on correcting its revenue shortfall and keeping the deficit below the 3.0% of GDP legal limit. In terms of the fulfillment of State Budget target especially in tax revenue target, the government has raised over USD7 billion from the tax amnesty plan.

2016 Performance

was calibrated by policy easing. In addition, the geopolitical situation also contributed greatly to the world economic situation ranging from the US Presidential Election, uncertainty in the aftermath of the UK Referendum (Brexit), as well as the Syrian civil war which led to the Syrian refugee crisis.

39


The Role of Providing Advice In addition to the implementation of monitoring role, the Board of Commissioners is also obliged to provide advice to the Board of Directors regarding the Bank’s business activity. The mechanism of providing advice in normative manner is held through the implementation of Board of Commissioners and Board of Directors meeting which is held bimonthly. While functionally, the Board of Commissioners via Audit Committee holds regular meeting every month to discuss findings and reach conclusion in the form of advice which later conveyed to the Board of Directors. In addition, the Board of Commissioners also holds occasional or informal discussion with the Board of Directors in which the Board of Commissioners requests the Board of Directors to brief any arising matter or issue that needs immediate attention. The Board of Commissioners later provides its advice directly to the Board of Directors which immediately follows up or implements such advice.

Implementation of Good Corporate Governance Along with the Board of Directors, the implementation of good governance remains to be the focus of the duties and responsibilities of the Board of Commissioners. In carrying out monitoring function, the Board of Commissioners is not only held accountable on the results but also constantly monitors the process to achieve the intended results. This is due to the Board of Commissioners along with the Board of Directors

40


aim at realizing the long-term transformation of corporate governance that is expected to generate sustainable value. This commitment is manifested in 2016, among others, by reviewing and improving certain procedure and process of credit provision, implementing a more prudent risk management system, and implementing a more professional nomination mechanism to fill the Bank’s strategic positions. Along with the development of the Bank’s business activities, it also requires adequate risk management practices in order to be able to identify potential risks that may arise. Upon the importance of these risk factors, the Board of Commissioners monitors and provides improvement suggestion to the risks that are managed by the Bank. Overall, the Board of Commissioners considers that QNB Indonesia has built a proper controlling system as a strong foundation and implemented the principles of corporate governance, risk management, and internal control system.

Performance of the Committees In carrying out the monitoring role, the Board of Commissioners is assisted by three committees, namely Audit Committee, Remuneration & Nomination Committee, and Risk Oversight Committee. During 2016, these committees have shown good performance and have contributed to the growth of the Bank. In addition to the proper implementation of the work program, the role of each committee was also greatly

improved to better support the tasks and responsibilities of the Board of Commissioners, among others, the Audit Committee has further improved its role through the implementation of intensive Audit Committee meeting to held discussion regarding the improvement of credit procedure and process, as well as other relevant issues. On the other hand, the Remuneration & Nomination Committee has provided recommendation for the best nomination of new member of Board of Directors in connection with the resignation of some members of Board of Directors. As for the Risk Oversight Committee, it reviewed the anticipation of economic changes and the risk that may arise from such changes. Compared with previous year, the role of the committees under the Board of Commissioners has increased much more significant since in 2016 there were many things that drive these committees to further improve their functional tasks. Assisted by these three committees, the Board of Commissioners continued to encourage the application of good governance standard in all operation aspects of the Bank.

Changes in the Composition of the Board of Commissioners On this occasion, we would also like to inform that in 2016 there was a change in the composition of the Board of Commissioners with the resignation of Muthu Chidambaram and the appointment of Andrew McGregor Duff as the new Commissioner of the Bank. The Board of Commissioners would like

On the other hand, 2017 will be the year of realization of the 2017 vision for QNB Indonesia. In order to achieve this goal, the Board of Commissioners believes that the Board of Directors shall particularly improve the quality of productive assets and increase the capital so that the Bank will be ready to get back on its feet, compete in the industry, and excel in the future.

On this occasion, we would like to address our gratitude to shareholders and stakeholders upon their trust and support. Our deepest appreciation is also addressed to the entire Board of Directors, employees, and business partners that always support the Bank to continue to grow and thrive. The Board of Commissioners and the Board of Directors will always be committed to make QNB Indonesia as a distinguished Bank which is excel and highly competitive. May the Bank’s sustainable growth that we aspire together will always drive our passion to achieve the excellence.

Company Profile

In terms of prospect for the national economy in 2017, the government is targeting a significant increase in the state budget and the portion of infrastructure development is still the focus in 2017. It serves as a good sign for entrepreneurs due to the expected trickle-down effect. Upheaval political situation that occurred at the end of 2016 also did not have a significant impact

Our Appreciation


Business Outlook

on the Indonesian economy due to its fairly robust financial structure. The Board of Commissioners also believes that Indonesia will have better financial stability in the future despite the global economic condition will be pretty much the same.

2016 Performance

to appreciate to the contribution of Muthu Chidambaram during his term of office and also welcoming Andrew McGregor Duff to the Board and hopes that his appointment will contribute greatly to the growth of QNB Indonesia.


On behalf of the Board of Commissioners,





41


Profile of the Board of Commissioners Citizen of Qatar, 55 years old. Domiciled in Doha, Qatar. He has a Bachelor Degree in Math and Computer Science from Eastern Washington University in 1984 and a Master Degree of Science in Management Information System from the Seattle Pacific University in 1987. He also attended a number of Executive programs at Wharton School of Business, London Business School, Cambridge University and Duke University. He was first appointed as a President Commissioner of the Bank based on the Resolution of Extraordinary GMS dated January 27, 2012 and it was declared effective by Bank Indonesia on May 10, 2012.


He has joined Qatar National Bank (QNB) in 1988. Prior to his appointment as QNB Group Chief Executive Officer in July 2013, he was the Executive General Manager and Group Business Officer. He was responsible for all business lines of QNB and he played a key role in QNB becoming the leading financial institution in the Middle East and North Africa.

Citizen of Australia, 58 years old. Domiciled in Doha, Qatar. Earned his Chartered Accountant (CA) Degree in Accounting/ Finance from New Zealand Society of Accountant Examination in 1979. He was appointed as a Commissioner of the Bank based on the Resolution of Extraordinary GMS dated March 4, 2013 and it was declared effective by Financial Services Authority (OJK) on January 16, 2014. He has been reassigned as a member of Remuneration and Nomination Committee in the Bank based on Decree of BoD No. 002/SK-DIR/I/2016 dated January 4, 2016 with period of assignment from 2016 to 2018.

Grant Eric Lowen Commissioner

42


He started his career in the KPMG Christchurch (New Zealand), London (UK), Sydney (Australia) (1984-1988). Subsequently, he served at Westpac Banking Corporation as Manager of Financial Management Consulting (1988-1991), Group Management Accountant (1991-1994), Chief Manager Portfolio Management – Institutional and International Banking Group (1994-1996), Chief Manager Group Credit Risk Analysis (1996-1998), Head of Business Banking Product and Services (1998-1999), Chief Manager Business Re-Design (1999-2000), Chief Manager of

He is also Chairman of MasterCard Middle East and North Africa Advisory Board, Chairman of QNB Capital (the Investment Banking and Advisory of QNB Group), and Chairman of QNB Privee Suisse in Switzerland, Vice Chairman of Commercial Bank International in the UAE and Vice Chairman in Qatar Exchange. In 2016, he actively attended several competence development programs, among others, Institute of International Finance (IIF) Board Meeting held in January, Business Forum Qatar held in January, MEED – Qatar Project Conference held in March, Doha International Maritime Defence Conference and Exhibition 2016 (DIMDEX) held in March and Institute of International Finance (IIF) and Emerging Markets Advisory Council (EMAC), CEO and Spring Membership Meetings held in May. He has no affiliate relationship with other members of Board of Commissioners and Board of Directors of the Bank, yet, affiliated with the Bank’s ultimate shareholder, namely Qatar National Bank (QNB).

Strategy & Design, IT & Operations (20002001). He has also served as Group Auditor & General Manager Operational Risk at St. George Bank (2001-2004), Executive General Manager Group Audit at CBA (2004-2007), Acting Group Chief Risk Officer at CBA (2007-2008), Deputy Group Chief Risk Officer at CBA (2008), Chief Risk Officer of Regional Banking & Support at CBA (2008-2010), Chief Risk Officer of International Financial Services CBA, and Chief Risk Officer of Bankwest, CBA (2010-2012). In addition to serving as Commissioner of the Bank, he also served as a Group Chief Risk Officer at Qatar National Bank (2012-present), as a Board Member of QNB Al Ahli (2013-present), and a member of the Board of Directors of QNB Finansbank in Turkey (2016). In 2016, he actively attended several competence development programs, among others, Prima Forum on IFRS held in May and Cyber Maturity Review Training held in July. He has no affiliate relationship with other members of Board of Commissioners and Board of Directors of the Bank, yet, affiliated with the Bank’s ultimate shareholder, namely Qatar National Bank (QNB).

Citizen of Indonesia, 59 years old. Domiciled in Jakarta, Indonesia. Earned his Bachelor Degree in Law from Trisakti University, Jakarta (1989) and Master of Laws from Tulane University, New Orleans, USA (1998). He was first appointed as the Independent Commissioner of the Bank based on the Resolution of Extraordinary GMS dated September 16, 2011 and it was declared effective by Bank Indonesia on November 24, 2011. He has been assigned as a Chairman of Risk Oversight Committee in the Bank based on Decree of BoD No. 001/SK-DIR/I/2016 dated January 4, 2016 with service period effective from 2016 to 2018.

Deputy Head of Regional Office Area 02 Padang – Branch Development Sector (20022003), Deputy Head of Legal and Compliance Division – Legal Development Sector (2003-2004), Deputy Head of Compliance Division (2004), Head of Compliance Division (2004-2006), and Head of Internal Control (2006-2011). He has also served as the Commissioner of PT Swadarma Sarana Informatika (2012-2013). In addition to serving as Independent Commissioner of the Bank, he also served concurrently as President Commissioner of PT Swadarma Sarana Informatika (2013-present).


In 2016, he actively attended several competence development programs, among others, QNB Values Festival held in July. He has no affiliate relationship with other members of Board of Commissioners, Board of Directors and ultimate shareholder of the Bank.



Independent Commissioner


Muhammad Anas Malla

During his career, he has held numerous position in PT Bank Negara Indonesia (Persero) Tbk, among others, as Deputy General Manager of Operations at Tokyo Branch Office (1998-2001), Head of Samarinda Branch Office (2001-2002),

He has no affiliate relationship with other members of Board of Commissioners, Board of Directors and ultimate shareholder of the Bank.

Company Profile

Suroto Moehadji


In 2016, actively attended several competence development programs, among others QNB Values Festival held in July.


Started the career in PT Bank Negara Indonesia (Persero) Tbk from 1979 until retired in 2008, occupying various positions including Director of Commerce (2003-2005), Director of Human Resources (2005-2007) and lastly as the Director of Operations & General Services (2008). In 1991-1994, also served as Director in PT BNI Nomura Jafco, Commissioner of PT Bank Finconesia (20012002), Vice Rector of University of Pancasila (2008-2012), and Extraordinary Lecturer of University of Pancasila (2008-present).

2016 Performance

Citizen of Indonesia, 64 years old. Domiciled in Jakarta, Indonesia. Graduated with a Bachelor Degree in Economy from the University of Jember, East Java (1979) and earned Master of Business Administration from Tulane University, New Orleans, USA (1988). He formerly served as the President Commissioner of the Bank (2010-2011) and it was declared effective by Bank Indonesia on June 7, 2010, afterward, appointed as the Independent Commissioner of the Bank based on the Resolution of Annual GMS dated June 24, 2011. In addition, he also has been assigned as a Chairman of Remuneration & Nomination Committee in the Bank based on Decree of BoD No. 002/SK-DIR/I/2016 dated January 4, 2016 with service period effective from 2016 to 2018.

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Djoko Sarwono


Citizen of Indonesia, 66 years old. Domiciled in Jakarta, Indonesia. Earned his Bachelor Degree in Law from Trisakti University, Jakarta (1975), Master in Public Administration (MPA) from University of Southern California, Los Angeles, USA (1985), and Doctor of Philosophy in Public Administration (DPA) from University of Southern California, Los Angeles, California, USA (1989). He was first appointed as the Independent Commissioner of the Bank based on the Resolution of Extraordinary GMS dated October 9, 2015 and it was declared effective by Financial Services Authority (OJK) on November 11, 2015. In addition to serving as Independent Commissioner of the Bank, he also assigned concurrently as Chairman of Audit Committee in the Bank based on Decree of BoD No. 024/SK-DIR/V/2016 dated May 31, 2016 with service period effective from 2016 to 2018. During his career, he has held numerous position, among others, as Executive Director of Banking Policy and Regulation Bank Indonesia (1999-2001), Chief Office of Bank Indonesia – Regional Bandung (2001- 2003), President Director of Indover Bank, Amsterdam and concurrently served as Chairman of the Board of Directors of Indover Bank, Hong Kong (2003-2006),

Citizen of Australia, 61 years old. Domiciled in Doha, Qatar. Earned his Bachelor Degree in Law from the Queensland Solicitors Board Australia (1978). He was appointed as the Commissioner of the Bank based on the Resolution of Extraordinary GMS dated 13 April, 2016. He has had a 33-year career in banking. He practiced law with Heiser Bayly and McDonald until 1980 and then joined Citibank where he held numerous positions and his last position was Acting Country Head of Malaysia (1981-1999). He worked in Standard Chartered Bank with the last position as MENA Wholesale Head (2000-2003), Chief Operations Officer of Commercial Bank of

Assistant to Governor of Bank Indonesia (2006-2009), joins the Indonesian Banking Development Institute (LPPI) in 2010 as the Advisor to Board and currently serves as Senior Faculty (External) since May 2015. He was the President Commissioner of Pefindo Rating Agency (2011 – 2014), President Commissioner of PT NISP Asset Management (2013-2014), Vice President Commissioner of PT Aberdeen Asset Management (20142015), Commissioner of Pefindo Research and Consulting (2014-2015) and President Commissioner of Pefindo Credit Bureau (2014-present). In 2016, he actively attended several competence development programs, among others, National Economy in the Context of Global, Money Market and Capital Market and Regional Economic, Policy Financial System Supervision (FSA/OJK) and the Banking System and IKNB Indonesia held in September. He has no affiliate relationship with other members of Board of Commissioners, Board of Directors and ultimate shareholder of the Bank.

Qatar (2004-2005), Chief Executive Officer of National Bank of Oman (2005-2007) and General Manager International of Qatar National Bank (2008-March 2013). Prior to serving as Commissioner of the Bank, he has served as President Director of the Bank (2013 - February 2016) and as Commissioner of the Bank (2011-2013). In 2016, he actively attended several competence development programs. He has no affiliate relationship with other members of Board of Commissioners, Board of Directors and ultimate shareholder of the Bank.

Andrew McGregor Duff Commissioner*

*) Shall be effective upon the approval from Financial Services Authority (FSA/OJK) on fit and proper test.

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2016 Performance


Company Profile




45



Board of Directors’ Report

"

Passion for Excellence at Its Best was carried out as the theme of Annual Report 2016 to reflect the Bank’s spirit of determination and optimism. By the strong capital support from the QNB Group, we are confident and fully committed to achieve our vision and grow significantly in the future.“ Dear distinguished shareholders,

Azhar bin Abdul Wahab Act. President Director

Year 2016 posed a very challenging year to the Indonesian banking industry in general and with no exception to our Bank in specific. With the strong and unwavering support by the controlling shareholder, Qatar National Bank S.A.Q (QNB Group), we are pleased to report to our shareholders and customers that we have managed to overcome 2016 unscathed from the capital perspective. QNB Group is the leading and undisputed number one financial institution in Middle East and Africa (MEA) in terms of assets, capital, and profitability. We spent 2016 to further strengthening our business platform, developing our people, enhancing our compliance, and improving the efficiency of our overall business process to support our future growth.

2016 Performance The overall Indonesian economic condition in 2016 was much or less the continuation of previous year’s condition. External factors from global economic development such as falling commodity prices, China’s economic slowdown, Eurozone economic development

46


due to Brexit decision, as well as unexpected development of US Presidential Election which also led to uncertainty of US interest rates and have all exacerbated domestic conditions. However, the Indonesian economy achieved positive growth in the end of 2016, albeit at a lower growth rate, accompanied by macroeconomic stability and financial system that was well maintained. Economic growth has been supported by domestic demand amid the sluggish global economic condition. Macroeconomic stability was maintained as reflected in low inflation, declining current account deficit, and the exchange rate which was relatively stable. Overall, against the backdrop of much lower economic growth rate, year 2016 was very challenging to the Bank especially in terms of the significant increase of nonperforming loans (NPLs). Upon this condition, the Bank decided to be more selective and tightened the underwriting criteria to adapt to the dynamic environment.

2016 Performance

Bank’s Financial Performance 2016 In million Rupiah unless otherwise stated Descriptions

2016

2015

Growth (%)

Rp24,372,702

Rp25,757,649

(5.38%)

Loans – Net

Rp17,551,188

Rp20,788,304

(15.57%) 1,665.04%

(Rp736,726)

(Rp41,740)

Rp19,344,962

Rp18,509,008

4.52%

Equity, Net

Rp3,477,929

Rp2,424,184

43.47%

Net Income (Loss) for the Year

(Rp650,333)

Rp156,046

(516.76%)

Provision for impairment losses on financial and non financial assets

(Rp929,519)

(Rp87,472)

962.65%

16.46%

16.18%

0.06%

2.94%

2.39%

(0.50%)

94.54%

112.54%

(18%)

Allowance for Impairment Losses Deposits from Customers

CAR NPL Net LDR


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The Bank has taken prudent steps to mitigate the challenges that we faced with cause-effect strategies

Despite the unfavorable economic condition, the business development remained the Bank’s main focus. In 2016, we were challenged to develop our retail banking to further broaden our customer base and improve the public acceptance towards QNB Indonesia. To address such challenge, the Bank requires a comprehensive digital platform to allow the Bank to provide wide range of excellent products and services. In addition, such quality and high integrity human capital is also required to support the growth of retail banking in particular. Therefore, we focused on further


As part of our determination to overcome challenges, we continued to develop our business despite being significantly affected by the economic condition. We also believe that this is the appropriate time to focus on retail banking growth in accordance with the Bank’s business plan. We are

Therefore, in 2016 the Bank had launched Direct One-on-One Electronic Transaction (DooEt+) mobile banking platform which we have been developing in the past two years. As of the end of 2016, we have successfully increased the number of our savings account significantly. This achievement has proven the potential and effectiveness of this innovative product as well as indicated that we are on the right track. To further expand our reach in the retail segment, we also engaged in various retail banking activities especially using the communitybased approach to further develop the brand awareness of our product as well as QNB Indonesia itself.

aiming for recovery, including injection of additional capital of Rp728 billion by the Controlling Shareholders that had strengthen the Bank’s capital structure and improved our Capital Adequacy Ratio (CAR) at 16.46%. In addition, the Bank also undertook strict monitoring on all credit accounts to prevent a decline in the quality of assets. Upon the implementation of such prudent steps, the Bank managed to achieve the net NPL ratio of 2.94%.


Challenges and Strategies in 2016

aware that this is our chance to move to the next level of growth by focusing on retail banking development especially through the utilization of digital platform (digital banking). In the past few years we have been strengthening our digital platform to further support our retail banking growth.

Company Profile

“Passion for Excellence at Its Best” was selected as the theme of the Annual Report 2016 to reflect the Bank’s spirit of determination and optimism. The challenging economic and industry condition provided significant impact for us, therefore we committed to strengthen ourselves through the implementation of proper strategy and especially by relying on high quality and integrity human capital. To address the challenging economic and industry condition, the Bank has set higher Allowance for Impairment Losses (CKPN) which resulted in the depressed financial result. However, we have managed to strive on our own and further strengthened our pillars to anticipate future growth.


Total Assets


strengthening our digital platform to support the Bank’s business focus on developing retail banking. The main assets of a bank is their human capital and in line with human capital development program, the Bank had undertaken several initiatives to develop soft skill either directly or via QNB portal to facilitate the employees’ learning process and improve their efficiency and effectiveness. While in terms of compliance improvement through digital platform development, the use of QNB portal also improves the employees’ awareness on compliance culture which should always be upheld. By the strong capital support from the QNB Group, we are confident and fully committed to achieve our vision and grow significantly in the future by widening customer segmentation, introducing new innovative products, and expanding delivery channels.

Implementation of Good Corporate Governance Commitment to the implementation of Good Corporate Governance (GCG) has always become the main foundation for the Board of Directors and the entire Management in managing the Bank and conducting operational activities. We believe that by consistently applying transparency, accountability, responsibility, independence, and fairness principle in every business process, we could maintain good performance and provide an added value for stakeholders as well.

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We are consistently enhancing our compliance to the regulatory requirement and continuously adapting to the regulatory framework. We continuously review, formulate and implement GCG principles with due observance to prevailing laws and regulations, the Indonesian Corporate Governance Code, as well as recent standards, including ASEAN Corporate Governance Scorecard to gain feedback regarding the quality of the Bank’s GCG implementation.

Compared with previous year, the role of the committees under the Board of Directors has increased much more significant since in 2016 there were many things that drive these committees to further improve their functional tasks. Assisted by these committees, the Board of Directors continued to enhance the implementation of good governance standard in all operation aspects of the Bank.

To ensure the best practices of GCG at all levels of the organization, we have consistently conducted an internal socialization program to raise GCG awareness, enhanced GCG tools such as whistleblowing system, customer complaint system, and AML function among others. Further, in ensuring continuous GCG implementation improvements, we have also held a GCG assessment, using a selfassessment method in line with regulatory requirement, evaluating business performance based on certain predetermined indicators as well as policies and system.

We were delighted to welcome new members to the Board during the year. R. Andi Kartiko Utomo, previously Head of E-Banking & Financial Inclusion, joined us in November 2016 as E-Banking & Financial Inclusion Director. His appointment was established in the Extraordinary General Meeting of Shareholders on April 13, 2016 and shall be effective upon obtaining Fit & Proper Test approval from the Financial Services Authority (FSA/ OJK). While, Junita Wangsadinata’s appointment was established in the Extraordinary General Meeting of Shareholders on December 19, 2016 and shall be effective on February 16, 2017 and upon obtaining fit & proper test approval from the Financial Services Authority (FSA/ OJK). We hope their appointment will bring a good balance of additional skills and experience to the Board of Directors.

Performance of the Committees In carrying out the duties and responsibilities, the Board of Directors is assisted by several committees. During 2016, these committees played a vital role in assisting the Board of Directors and have shown good performance. In addition, the Board of Directors also established new committee namely Special Asset Management Committee to better support the tasks and responsibilities of the Board of Directors.

Changes to the Board of Directors

We would also like to record our gratitude to Andrew McGregor Duff and Rusli for their contribution during their terms as member of the Board of Directors. Upon the resignation of Andrew McGregor Duff as the President Director,

Appreciation and Closing Remarks


Our successful journey to overcome 2016 was the result of dedication and hard work of our employees and we would like to express our gratitude to all of them upon their efforts. Our gratitude is also addressed to the regulators, the Indonesia Financial Services Authority and Bank Indonesia, upon the direction and support given to the Bank throughout the year.

Company Profile

The economic condition in 2017 is expected to be similar to 2016 in which Indonesia will experience moderate growth but still very robust compared to other regional countries. The external economic environment is not likely to support continued but slowing pressure on Rupiah and weak commodity prices. However, we believe that we have adapted well to the changed environment in the past few years and will continue to invest in the future, grow selectively, and especially take advantages of opportunities which may emerge as a result of the dynamic environment improvement. We believe that

Going forward, we will focus on strengthening our retail banking in addition to further developing wholesale banking as well as improve our cooperation with Middle East. Thus, in 2017 we are optimistic in realizing our vision to be the icon in Indonesia that grows together with our stakeholders.

We would also like to thank our controlling shareholder, QNB Group and Bosowa Group, the significant minority shareholders who had been extremely supportive to the growth of the Bank while respecting appropriate governance. In particular, we appreciate the support of all of our customers, business partners, and other stakeholders. We would like to thank them to their support so we could overcome many challenges in 2016. Going forward, we are committed to further leverage our strong position, robust capital, and excellent innovation to be the leading bank in Indonesia that continue to grow together with the stakeholders.


Realizing the 2017 Vision

there is always opportunity behind every challenge.

2016 Performance

Azhar Abdul Wahab was officially appointed as Acting President Director based on Circular Resolutions of the BoD in lieu of the BoD’s Meeting No. 005/SKDir/I/2016 dated January 22, 2016.

On behalf of the Board of Directors, Corporate Governance




49


Profile of the Directors Citizen of Malaysia, 47 years old. Domiciled in Jakarta, Indonesia. Earned his Bachelor Degree from the Faculty of Management, Universiti Teknologi Malaysia (1992), Graduate Diploma in Applied Finance & Investment from the Securities Institute of Australia (2003), and Program for Executive Development (PED) from Institute for Management Development (IMD), Switzerland (2004). He was first appointed as the Director of the Bank based on the Resolution of Annual GMS dated June 24, 2011 and it was declared effective by Bank Indonesia on July 5, 2011. Appointed as Acting President Director based on Circular Resolutions of the BoD in lieu of the BoD’s Meeting No. 005/SK-Dir/I/2016 dated January 22, 2016.


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Appointed for special assignments as a Chairman of several committees under Board of Directors of the Bank, namely: (1) Asset & Liability Committee (ALCO) based on Decree of BoD No. 032/SK-Dir/VI/2016 dated June 8, 2016, (2) Credit Committee based on Decree of BoD No. 040/SK-Dir/X/2016 dated October 18, 2016, (3) Fraud Oversight Committee based on Decree of BoD No. 045/ SK-Dir/XI/2016 dated November 10, 2016, (4) HR Committee based on Decree of BoD No. 028/SK-Dir/VI/2016 dated June 8, 2016, (5) IT Committee based on Decree of BoD No. 029/SK-Dir/VI/2016 dated June 8, 2016, (6) New Products and Activities Committee

based on Decree of BoD No. 030/SK-Dir/ VI/2016 dated June 8, 2016, (7) Procurement Committee based on Decree of BoD No. 031/ SK-Dir/VI/2016 dated June 8, 2016, and (8) Special Asset Management Committee based on Decree of BoD No. 041/SK-Dir/X/2016 dated October 18, 2016, as well as (9) as an Alternate Chairman and a member of Risk Management Committee based on Decree of BoD No. 022/SK-Dir/V/2016 dated May 27, 2016. Previously, started his career in Permodalan Nasional Berhad (1992-1997) and later worked in Nomura Jafco Investment Asia Ltd., (1996-1997); rejoined Permodalan Nasional Berhad (1997-2006), Maybank Investment Bank Berhad (2006-2008), and joined Qatar National Bank (2008-June 2011) with the last position as Head of Mergers & Acquisitions, International Banking. In 2016, he actively attended several competence development programs, among others, Effective Public Speaking & Media Handling held in January, QNB Values Festival held in July, Refreshment of Risk Management Certification held in September, and Executive Coaching for BoD held in September and Professionalism with Integrity for Leaders held in September. He has no affiliate relationship with other members of Board of Directors, Board of Commissioners, and the ultimate shareholders of the Bank.

Previously, he joined ABN AMRO Bank/ Royal Bank of Scotland in 1986-2011 and has held numerous position, including Country Risk Officer at ABN AMRO Bank N.V. Indonesia (1998-2001), Senior Vice President Group Risk Management at ABN AMRO N.V. Amsterdam, The Netherlands (2002-2003), Head of Risk Management Bank of Asia, Bangkok, Thailand (2003-2004), Senior Risk Advisor at ABN AMRO Bank N.V. Singapore (2004-2008), and last position as Head of Commercial Risk – Asia Royal Bank of Scotland N.V. Singapore (2008-2011).

He has no affiliate relationship with other members of Board of Directors, Board of Commissioners, and the ultimate shareholders of the Bank.


In 2016, he actively attended several competence development programs, among others, Effective Public Speaking & Media Handling held in January, Leaders Talk held in March & May, Sharing Session: Awareness on New Accounting Standard on Financial Instrument/ Impairment (IFRS 9) held in May, Refreshment of Risk Management Certification held in September, Executive Coaching for BoD held in September and Professionalism with Integrity for Leaders held in September.

Company Profile

Risk Director

on Decree of BoD No. 045/SK-Dir/XI/2016 dated November 10, 2016.


Lloyd William Rolston

Appointed for special assignment as a Chairman of Risk Management Committee based on Decree of BoD No. 022/SKDir/V/2016 dated May 27, 2016. In addition, also appointed as an Alternate Chairman as well as a member of (1) New Products and Activities Committee based on Decree of BoD No. 030/SK-Dir/VI/2016 dated June 8, 2016, (2) Asset & Liability Committee (ALCO) based on Decree of BoD No. 032/ SK-Dir/VI/2016 dated June 8, 2016, (3) Credit Committee based on Decree of BoD No. 040/ SK-Dir/X/2016 dated October 18, 2016, (4) Special Asset Management Committee based on Decree of BoD No. 041/SK-Dir/X/2016 dated October 18, 2016, and also assigned as a member of (1) HR Committee based on Decree of BoD No. 028/SK-Dir/VI/2016 dated June 8, 2016, (2) IT Committee based on Decree of BoD No. 029/SK-Dir/VI/2016 dated June 8, 2016, (3) Fraud Oversight Committee based

2016 Performance

Citizen of Australia, 58 years old. Domiciled in Jakarta, Indonesia. Earned his Bachelor Degree in Commerce from the University of Western, Australia (1981), Post Graduate Diploma Course from the Securities Institute of Australia, Australia (1985) and Project Management Professionals (2011). He was first appointed as the Director of the Bank based on the Resolution of Extraordinary GMS dated September 16, 2011 and it was declared effective by Bank Indonesia on May 10, 2012.

Corporate Governance Corporate Social Responsibility


51


Citizen of Indonesia, 55 years old. Domiciled in Jakarta, Indonesia. Earned his Bachelor Degree from Jenderal Soedirman University, Purwokerto (1984) and Graduate Degree of Finance and HRM & Organizational Behaviour from Rensselaer Polytechnic Institute, Troy New York (1994). He was first appointed as the Director of the Bank based on the Resolution of Extraordinary GMS dated November 29, 2012 and it was declared effective by Bank Indonesia on February 25, 2013.

Windiartono Tabingin Compliance Director

Appointed for special assignments as a Member of several committees under Board of Directors, namely: (1) Risk Management Committee based on Decree of BoD No. 022/ SK-Dir/V/2016 dated May 27, 2016 (nonvoting member), (2) HR Committee based on Decree of BoD No. 028/SK-Dir/VI/2016 dated June 8, 2016, and (3) Fraud Oversight Committee based on Decree of BoD No. 045/ SK-Dir/XI/2016 dated November 10, 2016. Previously, started his career at Bank Rakyat Indonesia (Persero) from 1986 until 2012 and held various positions, among others, Deputy General Manager of Human Resources Division (1999-2001), Deputy Regional Manager of Yogyakarta and Central Java Region (2001-2002), Deputy Regional Manager of Semarang - Central Java Region (2002-2004), Deputy Regional Manager of Surabaya - East Java Region (2004-2006), Head of Risk Management Division (2006-2009), Head of Audit of Bali, West Nusa Tenggara and East Nusa Tenggara Regions (2009-2010), Head of Audit of East Java Region (January 2010-June 2010), Head of Micro Business Division (July 2010-June 2012), Head of Audit of West Java Region (July 2012-December 2012) and Commissioner of PT Asuransi Jiwa Bringin Jiwa Sejahtera (July 2011-November 2012). In 2016, he actively attended several competence development programs, among others, BARa Sharing Session: Mandiri’s Implementation of Integrated Management Framework for financial Conglomerates (POJK 17 & 18) in January, Leaders Talk held in March 2016, BARa Sharing Session: Global and Indonesia’s Macroeconomics Trend and Forecast held in April, Compliance & AML Certification Workshop Executive Level held in April and has Competence Certification Executive Level in Banking Compliance held in April, BARa Sharing Session: Risks and Mitigation for Infrastructure Financing in Indonesia held in May, Sharing Session: Awareness on New Accounting Standard on Financial Instrument/Impairment (IFRS 9) held in May, Seminar Banking System Readiness Assessment Facing the Financial

52


Action Task Force on Money Laundering (FATF) against Indonesia held in May, QNB Values Festival held in July, BARa Sharing Session: Financial ConglomerationHorizontal Structure-Implementation & Challenges held in July, Refreshment of Risk Management Certification held in September, Executive Coaching for BoD held in September, Indonesia National Seminar on Economic Outlook: How Much Impact of Economic Policy Package? held in October, Indonesia Banking Human Capital Conference: Preparation of banking HR Indonesia in the ASEAN Financial Services & Banking Integration in 2020 held in October 2016, Socialization Licensing/Approval of Participation Bank on Monetary, Payment Systems and Management of Rupiah, as well as Macroprudential of Bank Indonesia held in October, BARa Sharing Session: Sustainability Risk Management in Lending Program held in November, Seminar on Economic Outlook 2017: Opportunities and Challenges in the Banking Industry held in November, Socialization Tax Amnesty: Dialog Taxation with Finance Minister of the Republic of Indonesia held in November, Thought Leadership Financial Services: Application Regime Anti-Money Laundering/ Combating the Financing of Terrorism in Indonesia, Evaluation and Perspectives for the Future held in November, International Business Integrity Conference & Collective Action held in November, Risk Management Certification Program, BARa Risk Forum: “Revisit Enterprise Risk Management and Learning Best Practices of Credit Risk Management” held in December, Risk Management Certification Refresher Program held in December , and Seminar on “Facing Global Challenges for Better Economic Growth in 2017” and “Managing Compliance Risk while Controlling Cost” held in December 2016. He is also active in various associations in the Indonesian banking industry, such as Banker Association for Risk Management (BARa) as Secretary-General, the Indonesian Bankers Association (IBI) as Member of the Board of Social Affairs and Sports, the Association Forum Communications Director of Compliance (FKDKP) as leading members of Public Relations of Banking and as Deputy Treasurer. Currently he also has the competency certification as assessor of the National Professional Certification Board (BNSP). He has no affiliate relationship with other members of Board of Directors, Board of Commissioners, and the ultimate shareholders of the Bank.

Tractors Pandu Engineering (1996 - 2000), HR Associate for Eli Lilly Indonesia (20002001). She joined Citibank N.A. Indonesia from September 2001 to September 2014 with last position as HR Head for Consumer Bank - Senior Vice President. Prior to serving as Director of the Bank, she has served as HR Head - Executive Vice President (September 2014 - February 2015).


She has no affiliate relationship with other members of Board of Directors, Board of Commissioners, and the ultimate shareholders of the Bank.

Company Profile

Previously, started her career as Management Trainee on HRODP of PT Astra International Tbk (1994-1995), Analyst on Remuneration & Organization Development of PT. United


Appointed for special assignments as an Alternate Chairman as well as a member of several committees under Board of Directors, namely: (1) HR Committee based on Decree of BoD No. 028/SK-Dir/VI/2016 dated June 8, 2016, (2) Procurement Committee based on Decree of BoD No. 031/SK-Dir/VI/2016 dated June 8, 2016, (3) Fraud Oversight Committee based on Decree of BoD No. 045/ SK-Dir/XI/2016 dated November 10, 2016. In addition, also assigned as a member of Risk Management Committee based on Decree of BoD No. 022/SK-Dir/V/2016 dated May 27, 2016.

In 2016, she actively attended several competence development programs, among others, Effective Public Speaking & Media Handling held in January, Competitive Strategy of the Bank in the Middle Turbulence held in February, Leaders Talk held in March & May, Basic Trade Finance held in May, Risk Management Certification level 5 held in May, 2016 Indonesian Mercer Pension Action (IMPACT) Workshop – Criticism New Regulations Affecting HR Strategy held in May, Sharing Session: Awareness on New Accounting Standard on Financial Instrument/ Impairment (IFRS 9) held in May, Implementation Certain Time Employment Agreement and Outsourcing held in June, QNB Values Festival held in July, Investigative Interview held in September, Executive Coaching for BoD held in September, Professionalism with Integrity for Leaders held in September, SID Reporting in the Context of Quality Control of SID in 2016 held in September, 3rd Indonesia Industrial Relations Conference held in November.

2016 Performance

Novi Mayasari

Human Resources Director

Citizen of Indonesia, 45 years old. Domiciled in Jakarta, Indonesia. Earned her Bachelor Degree in Economics from Padjadjaran University, Bandung (1994) and MBA from the Faculty of Economics and Business of Gadjah Mada University, Yogyakarta (2013). She was appointed as the Director of the Bank based on the Resolution of Annual GMS dated February 27, 2015 and it was declared effective by Financial Services Authority (OJK) on October 2, 2015. Beside as a Human Resources Director, she appointed to hold concurrent position as an Acting Operations Director based on Circular Resolutions of the BoD in lieu of the BoD’s Meeting No. 016/SKDir/I/2016 dated April 1, 2016 and has been renewed based on Circular Resolutions of the BoD in lieu of the BoD’s Meeting No. 044/SKDir/XI/2016 dated November 10, 2016.



53

Passionfor Passion forExcellence Excellence atat ItsIts Best Best Annual Report 2016

Citizen of Indonesia, 51 years old. Domiciled in Jakarta, Indonesia. Earned his Bachelor Degree from Brawijaya University, Malang (1989) and Master Degree in General Business Management from IPMI Business School, Jakarta (2009). He was appointed as the Director of the Bank based on the Resolution of Extraordinary GMS dated November 18, 2016.

R Andi Kartiko Utomo

E-Banking & Financial Inclusion Director*

Corporation (2005-2008), Western Union Company (2008-2014), Blackberry Indonesia (20012-2014). He joined Telkomsel Indonesia from 2004 to October 2015 with last position as Vice President – Digital Payment & Mobile Banking. Prior to serving as Director of the Bank, he has served as Head of E-Banking & Financial Inclusion (October 2015- now).

Appointed for special assignments as a member of several committees under Board of Directors, namely: (1) IT Committee based on Decree of BoD No. 029/SK-Dir/VI/2016 dated June 8, 2016, (2) New Products and Activities Committee based on Decree of BoD No. 030/SK-Dir/VI/2016 dated June 8, 2016, (3) Procurement Committee based on Decree of BoD No. 031/SK-Dir/VI/2016 dated June 8, 2016, and (4) Asset & Liability Committee (ALCO) based on Decree of BoD No. 032/SKDir/VI/2016 dated June 8, 2016.

In 2016, he actively attended several competence development programs, among others, Preparation of Risk Management Certification Level 4 held in January, Managing Team held in February, Leaders Talk held in March, Preparation of Risk Management Certification Level 5 held in April, Risk Management Certification Level 5 held in May, QNB Values Festival held in July, Executive Coaching for BoD held in September, Professionalism with Integrity for Leaders held in September, The 1st Manager – Leader Summit held in October.

He started his career at HM Sampoerna Group (1989-1991), Markplus & Co (1991-1992), Mead Johnson Indonesia (1992-1996), Phillip Morris Indonesia (1996-2005), Samsung

He has no affiliate relationship with other members of Board of Directors, Board of Commissioners, and the ultimate shareholders of the Bank.

*) Shall be effective upon the approval from Financial Services Authority (FSA/OJK) on fit and proper test.

Citizen of Indonesia, 54 years old. Domiciled in Jakarta, Indonesia. Earned her Bachelor Degree in Finance & Banking from San Francisco State University, USA in 1983 and MBA degree in Finance from San Francisco University, USA in 1984. She was appointed as the Director of the Bank based on the Resolution of Extraordinary GMS dated December 19, 2016.

Junita Wangsadinata

Started her career at Bank of Trade, San Francisco, USA in 1984-1985 as Credit Trainee. She joined Worthern Bank, Arkansas - USA in 1985-1986 as Credit Analyst, Bank Central Asia, New York, USA in 1986-1987 as Credit Manager and Bank Lippo in 1987 2008 with last position as Corporate Banking Group Head and Bank CIMB Niaga in 2008 – Dec 2016 with last position as Chief of Commercial Banking Officer.

In 2016, she actively attended several competence development programs, among others, Media Handling Skills Training held in January and 2016 Indonesia Certificate in Banking Risk & Regulation Refreshment Program held in April. She has no affiliate relationship with other members of Board of Directors, Board of Commissioners, and the main ultimate shareholders of the Bank.

Wholesale Banking Director* *) Shall be effective on February 16, 2017 and upon obtaining approval from the Financial Services Authority (FSA/OJK) on fit and proper test.

54


2016 Performance


Company Profile




55



Co m Pr pan ofi y le

Annual Report 2016

56


2016 Performance

Management Report

Company Profile




57



58


2016 Performance

Management Report

Company Profile



59



Through the internalization of QNB Values, we generate a professional and high integrity human capital.


Corporate Identity

60

Company Name


Line of Business

Banking

Share Ownership

» Qatar National Bank S.A.Q (82.59%) » PT Bosowa Kapital (8.15%) » Public (9.26%)

Date of Establishment

April 28, 1913

Legal Basis of Establishment

Established pursuant to the Deed No. 53 dated April 28, 1913, prepared before Leonard Hendrik-Willem Van Sandick, a Notary in Medan, approved by Besluit Gouverneur Generaal of the Dutch East Indies No. 58 dated July 16, 1913, and announced in the Extra Bijvoegsel der Javasche Courant No. 78 dated September 30, 1913.

Authorized Capital

Rp8,000,000,000,000 (eight trillion Rupiah)

Issued and Fully Paid Capital

Rp2,189,286,499,250 (two trillion one hundred eighty nine billion two hundred eighty six million and four hundred ninety nine thousand two hundred fifty Rupiah).

Share Listing

The Company’s shares were listed on the Indonesia Stock Exchange (previously Jakarta Stock Exchange) on November 21, 2002.

Ticker Symbol

BKSW

SWIFT Code

AWANIDJA

Ratings

PT Bank QNB Indonesia Tbk is rated “idAA” with “Stable” Outlook by Pefindo.

Number of Employees

908

Address

QNB Tower 18 Parc SCBD Jl. Jenderal Sudirman Kav. 52-53, Jakarta 12190 Phone : (+62 21) 515 515 5 Fax : (+62 21) 515 538 8

Website

qnb.co.id

Contact Center

(+62 21) 300 55 300

Publication & Media

[email protected]

Network

1 (one) head office 16 (sixteen) branch offices 32 (thirty two) sub branch offices 72 (seventy two) ATMs

Subsidiaries

By the end of 2016, PT Bank QNB Indonesia Tbk has no subsidiaries.


QNB Logo 2016 Performance Management Report Company Profile Management Discussion and Analysis Corporate Governance

Four arrows directed to a single center symbolize the energy and skills focused to serve and assist all customers in maximizing their potential.

•

The color differences in the arrows show the diversity of customers that continue to grow and develop.

A ribbon consisting of two colors portrays a commitment to always generating progress and thinking ahead beyond the boundaries in providing added values for institution in general and for customers in particular.



•

61


Milestone

1913

1990

The establishment of Bank Kesawan in Medan under the name of NV Chunghwa Shangyeh Maatschappij (The Chinese Trading Company Limited).

Headquarter relocation to Jakarta.

1958

1996

Operating as a commercial bank.

1913

1958

1962

Obtained the license to be a Foreign Exchange Bank.

1965

1962

1998

2002

Awarded “Bank A” category from Bank Indonesia.

1965

Changed its name to PT Bank Kesawan.


1996

1998

Changed its name to PT Bank Chungwa Shangyeh.

62

1990

2002

Initial Public Offering by listing 78.8 million shares on the Indonesia Stock Exchange.

2016 Performance

2009

2013

Rights Issue I.

Rights Issue III.

Management Report

2010

2014

Reorganisation, changed its vision and mission.

Transformed its name and logo to PT Bank QNB Indonesia Tbk.

2010

2011

2012

2011

2013

2014

2015


2009

Company Profile

Rights Issue IV QNB share ownership increased to 82.59%.

2016

2015

Rights Issue II.

Renewal and internalizaton of QNB Values.


QNB became the major shareholder, owned the Bank by 69.59%.

Subordinated loan amounted to US$ 70 million for 5 years, which has been calculated as Tier II Capital as of September 30, 2015.


Changed its name to PT Bank QNB Kesawan Tbk.

2016

2012

Relocation of headquarter and launching of new logo.

Received an award of achievement from “Indonesia Banking Award” (“Anugerah Perbankan Indonesia”)

Earned rating “idAA” with Outlook “Stable” in 2015 & 2016 from PT Pefindo, rating institution in Indonesia. Earned Vision Awards 2015 from LACP.


63


PT Bank QNB Indonesia Tbk at a Glance

Our journey that spans more than a century has forged us to remain committed to sustainable growth as well as Indonesia prosperity.

64


PT Bank QNB Indonesia Tbk (henceforward referred as the Bank) have recorded historic milestones for over a century. It is established in April 1, 1913 as NV Chunghwa Shangyeh Maatschappij (The Chinese Trading Company Limited) in Medan based on the Notarial Deed No. 53 dated April 28, 1913, the Bank is primarily engaged in the business of savings and loans as well as general trading. It is only in 1958, after almost half century later, that the company officially commenced its operation as a commercial bank based on Decree of the Minister of Finance No. 191547/U.M.II dated October 28, 1958. From there, it continued to be reformed as a Limited Liability Company, under a new name of PT Bank Chunghwa Shangyeh in 1962 and then PT Bank Kesawan in 1965.

The Bank took a turning point after the relocation of its head office from Medan to capital city, Jakarta in 1990. The relocation was then followed by the Bank obtaining a license to become Foreign Exchange Trader in 1995, and in the year after, approval to be a Foreign Exchange Bank and National Cash Perception Bank, which is a bank that may accept tax payments. The Bank’s history entered a new chapter in 2002 as its status changed from a private company to public company through the Initial Public Offering of 78.8 million shares in Indonesia Stock Exchange (formerly Jakarta Stock Exchange). In the same year, the Bank also implemented online operating system at all of its branches.

2016 Performance

the new brand actually marked the final stage in the Bank’s transformation journey which commenced in the fourth quarter of 2011.

In 2009, the Bank executed Limited Public Offering I (LPO I) through the issuance of pre-emptive rights of 125,304,750 shares or amounted to Rp40,097,520,000.

Furthermore, for 2 (two) consecutive years, in 2015 and 2016, the Bank has achieved a rating of “idAA” with “Stable” Outlook from Pefindo, a prominent credit rating agency. This reflected a very strong capital support from the controller shareholder i.e, Qatar National Bank S.A.Q, as well as the robust asset quality and well capitalized, thus the Bank as an obligor has very strong ability to meet long-term financial commitment to other obligors in Indonesia.


65


Our journey that spans more than a century has forged us to remain committed to sustainable growth as well as Indonesia prosperity. PT Bank QNB Indonesia Tbk is proud to support local people, businesses, and communities for more than a century and look forward to continue serving Indonesia communities in the years ahead.


In 2013 and 2014, the Bank took similar corporate actions as it did in the previous year. It decided to execute Limited Public Offering III (LPO III) and Limited Public Offering IV (LPO IV) through the issuance of pre-emptive rights amounted to 2,596,543,000 shares or amounted to Rp649,135,750,000 and 2,598,815,479 shares or as much as Rp649,703,869,750, respectively. It further strengthening the Bank’s capital amidst challenging environment and sustaining long-term growth. At the same time, the Bank also underwent rebranding by changing its name and logo; from PT Bank QNB Kesawan Tbk into PT Bank QNB Indonesia Tbk. In fact,

Eventually, in 2016 the Bank continued to strive to achieve excellence despite many challenges. Innovations which were made one after another represented our commitment to keep striving and growing sustainably and at the end of the year the Bank has once again proven its solid performance. The Bank has been successfully strived at its best and managed to grow prudent and sustainable.


Subsequently in 2011, the Bank executed Limited Public Offering II (LPO II) through the issuance of preemptive rights of 2,935,263,768 shares or amounted to Rp733,815,942,000, with the Qatar National Bank S.A.Q acted as a stand-by buyer. The execution of LPO II changed the status of share ownership, Qatar National Bank S.A.Q became the major shareholder by owned 69.59% shares of the Bank. Following the acquisition, the Bank was renamed to PT Bank QNB Kesawan Tbk.

Company Profile

In 2005, the Bank executed warrant series I of 101,219,000 shares or amounted to Rp25,304,750,000, which were issued during Initial Public Offering in 2002.

Management Report

For 2 (two) consecutive years, in 2015 and 2016, the Bank has achieved a rating of “idAA” with “Stable” Outlook from Pefindo, a prominent credit rating agency.


Visions and Missions

Vision

ln 2017 we will be: • An icon* in lndonesia that grows together with our stakeholders. • A top tier bank in terms of financial performance in lndonesia. * ln terms of technology enabled convenience and simplicity of process.

Mission

We provide outstanding technology – enabled banking products and services supported by an international network that delivers enhanced stakeholders value to be a financial institution of choice. Adjustment of the Bank’s Vision were established through the Board of Directors Decree No. 042/SK-Direksi/X/2016 dated October 18, 2016. The Bank’s Mission were established through the Board of Directors Decree No. 074/SK-Direksi/VI/2015 dated June 1, 2015.

66


We shall continuously develop our competencies and behavior to reliably deliver what is expected from us. We shall be honest, fair, and accountable.

We strive to go the extramile to achieve the highest professional standards. Management Report

Passion for Excellence

2016 Performance

Professionalism with Integrity

Company Profile

QNB Values Management Discussion and Analysis

We shall be adaptive to change and value creative thinking to continuously attain superior benefits.


We shall respects with dignity and be concerned for the well-being of people and environment in which we operates.

Innovative


Responsible Citizenship

Synergistic Team We shall effectively harness our strength to achieve our common goals with pride.

Note: In 2015, PT Bank QNB Indonesia Tbk has renewed its core values and service spirit to support the strength organisational culture and responding to the Bank’s future challenges, as stipulated in the Board of Directors Decree No. 074/SK-Direksi/ VI/2015 dated June 1, 2015. PT Bank QNB Indonesia Tbk

67


Service Spirit Trusted bank, sincerely delivering solutions and convenience.

Trusted

Sincerely

Fulfilling commitments with prudence, integrity, responsibility, reliability, and ensuring mutual benefits.

Serving wholeheartedly, earnestly, and courteously.

Convenience

Solutions

Serving responsively, providing ease and pleasant experiences.

Solving problems, delivering benefits and creating new opportunities innovatively.

Note: In 2015, PT Bank QNB Indonesia Tbk has renewed its core values and service spirit to support the strength organisational culture and responding to the Bank’s future challenges, as stipulated in the Board of Directors Decree No. 074/SK-Direksi/ VI/2015 dated June 1, 2015.

68


Line of Business


69


In conducting its business operations, the Bank offers a wide variety of products and services, as described in the “Products and Services” section of this Annual Report.


Other than main business activities as set forth above, the Bank shall perform additional business activities in so far as they do not violate the provisions of the laws and regulations, specifically banking regulations.


m. Issuing letter of credit in various forms and bank guarantee. n. Engaging in activities in foreign exchange. o. Engaging in activities of capital investment in a bank or other companies in the financial sector, such as financing, fund management, leasing, venture capital, securities company, insurance, clearing house, and guaranty as well as clearing settlement and depository institution. p. Engaging in activities of temporary capital investment for dealing with nonperforming loans, including failure of Sharia-based financing and non-Sharia principles. q. Acting as the founder and manager of pension funds. r. Purchasing collateral, either entirely or partly, through or outside an auction, in the event that the debtor fails to fulfill its obligation to the bank, provided that the purchased must be immediately saleable. s. Engaging in such other activities as are customarily engaged in by a bank in so far as they do not violate the provisions of the laws and regulations.

Company Profile

a. Collecting funds from public in the form of deposits including demand deposits, time deposits, certificates of deposit, savings, and/or other similar forms. b. Extending loans, either longterm, medium-term or short term loans or loans in any other forms commonly granted in the banking sector. c. Issuing promissory notes. d. Purchasing, selling, or guarantee at its own risk and for the benefit of and under the instruction of its customers, including: • Negotiable instruments, including negotiable instruments that are accepted by the Bank whose periods of terms are no longer than normal practice in the trading of such negotiable instruments.

Acknowledgements of indebtedness and other trade papers whose terms are no longer than normal practice in the trading of such papers. • State Treasury Certificates and Government Guarantees. • Bank Indonesia Certificates. • Bonds. • Fixed-term trade papers • Other fixed term commercial papers instruments. e. Transferring funds for the Bank’s own interests and for the interests of customers. f. Placing funds with, borrowing funds from, or lending funds to other banks using paper, telecommunications facilities and bearer negotiable instruments, checks or other means. g. Receiving payments of claims in respect of commercial papers and conducting calculations with or in respect of third parties. h. Providing places for the storage of valuable items and papers. i. Providing custodian services to other parties on a contractual basis. j. Investing customer funds in other customers through the purchase of securities listed on the stock exchange. k. Providing financing and/or engaging in other activities in accordance with sharia principle, in accordance with the provisions stipulated by Bank Indonesia and/or Financial Services Authority. l. Engaging in factoring activities, credit card business and trustee service.

Management Report

To achieve its purpose and objectives, the Bank shall perform main business activities, as follows:

•

2016 Performance

Based on article 3 of the Bank’s Articles of Association, the purpose and scope of business activities of the Bank is to run a business in the sector of banking in accordance with the provisions of prevailing laws and regulation.


Product and Services In conducting its business activities, the Bank provides various products divided into savings and loan products, other products as well as various services as further elaborated below:

Savings Products Product Savings Account

Description Savings with extra protection.

Benefits • •

Free health insurance; hence the customers do not have to pay for the premiums of this health insurance. Free transaction fee at all of the ATM Bersama networks for balance inquiry, cash withdrawal, and over booking transfer.

Checking Account

Checking account designed for the comfort of business transactions.

•

The checking account in Rupiah currency which facilitates the customers to withdraw cash using cheque or demand deposit.

Premium Saving Account

The savings that offer various benefits for the customers.

• • •

Free RTGS, LLG, and clearing transactions. Free transaction fee at ATM Bersama networks. Free cash withdrawal from all MEPS (Malaysian Electronic Payment System) networks.

Premium Checking Account

A checking account that is designed for the comfort of banking transactions.

• •

Provides benefits similar to the Q Premium Checking Account Free cheque book fee up to 4 books/month for customers’ account with average balance Rp50 million/month.

Switching Account

A foreign exchange savings in which the foreign exchange can be switched to other foreign currencies (USD, SGD, AUD, EUR, JPY, and GBP).

• •

Currency switching can take place at any time. Minimum placement of USD100.

Global Account

Savings in foreign currencies for the customers’ investment needs.

• • • •

Competitive foreign exchange rate. Interest rate is calculated based on the daily balance. Affordable remittance cost of Rp35,000 for all currencies. Reporting medium using a book so that the customers can easily monitor the transactions.

Global Checking Account

A checking account in foreign currencies for secure business or investment needs.

• • • •

Competitive foreign exchange rate. Interest rate is calculated based on the daily balance. Affordable remittance cost of Rp35,000 for all currencies. Reporting medium using a book so that the customers can easily monitor the transactions.

Forex

Foreign exchange transactions with competitive exchange rate.

• • •

Covering more than 100 foreign currencies. Accurate, competitive, and real time prices. Foreign exchange investment products.

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2016 Performance

Loan Products Product

Description

Benefits •

Quick process and easy requirements.

Working Capital Loan

A short term payment facility with tenor up to 1 year.

•

Easy requirements for customers who are in need of business capital.

Investment Loan

Medium-term and long-term payment facilities.

•

Can be used to fund the procurement of capital goods intended for rehabilitation, modernization, expansion, or establishment of new projects as well as refinancing.

Bank Guarantees

A bond product which is the choice of all businessmen.

•

Specifically designed to fulfill the needs of businessmen in terms of Bid Bond, Performance Bond, Advance Payment Bond, Maintenance, etc.

SBLC

The Bank issued an insurance on the customers’ demand to conduct payment to the beneficiary on the requirement that all the necessary documents have been completed.

Issuance of Letter of CreditSight and Usance L/C

A payment bond of the Bank which issued an L/C on the submission of documents that corresponds to the requirements of the L/C for the import transaction of goods.

Credit Card

Payment card as a method of payment.

• •

Free Annual Fee Free annual fee of credit card for the first year. Credit Card Insurance Providing protection to the QNB Visa Infinite Credit Card holder if they cannot pay the credit card bill in the event of an accident, as well as providing free fire insurance. Travel Guard & Purchase Protection 1. Free travel insurance for flight accident with the maximum amount of Rp5 billion. 2. Compensation for travel inconvenience and purchase protection for the holders of QNB Visa Infinite Credit Card. Executive Lounge Free facility of the executive airport lounge for QNB Visa Infinite Credit Card (valid for 2 people). Partnership Special discount with 0% installment at various QNB merchants. Point Reward Points that are obtained from retail or online shopping using QNB Visa Infinite Credit Card. Install Program Fixed 3 - 24 months installment for any transaction.

Company Profile

Instant Unsecured Loans up to Rp250 million and tenor up to 6 years.

Management Report

Personal Loan

•


71


• •


•


•


Other Products (Wealth Products) Product

Description

Benefits

Q Smarthealth Gold

An insurance product with easy payment process specifically prepared for emergency situations for all customers.

• •

Affordable premium without having to undergo medical check-ups. Cashless service for inpatient and surgery at partner hospitals.

Q Smarthealth Platinum

An insurance product with superior benefits.

• •

Cashless service for inpatient and surgery at partner hospitals. Local and International ambulance service, Second Medical Opinion, and Medical Concierge Services.

Q Optima Link

Provide customers with 2 (two) benefits in one product, namely a maximum protection and optimum investment.

• •

Provide maximum protection and optimum investment. Provide the customers with flexibility to freely decide choice and allocation, withdrawal, and increase of investment fund. Provide loyalty bonus of 50% from the Basic Premium for the customer who have paid the Basic Premium up to their 11th Premium Year.

Q Optima Link Assurance

Provide customers with one custom main benefit for six different package such as personal, spouse, kid, child gift, retirement, and legacy.

• • •

Hospitalization costs for personal, spouse, and kid packages. Cash value savings for child gift and retirement packages. Death benefit for legacy package.

Q Health Care

Integrated life and health insurance for companies in which the benefits can be customized based on the available budget.

•

Cover customized benefits of inpatient care, outpatient care, dental care, delivery and glasses cost.

Q Health Care Protection

Integrated life and health insurance for companies with fixed benefits.

•

Cover inpatient care, outpatient care, dental care, delivery and glasses cost.

Mutual Funds

Collaboration of QNB First with experienced Investment Managers to help your investment.

• • •

Provide potentials for investment growth. Has a high liquidity because can be resold any time. Convenient and easy investing.

• • • •

Insured and maximum development result. Easy and fast process. Roll over option on new investment period. Insurance protection up to Rp5,000,000,000 per insurer.

•

Offers four types of mutual funds: money market funds, fixed-income funds, mixedassets funds, and equity funds (stocks). Savings Guard Assurance

72

Bancassurance product that provides life insurance benefits in the form of compensation after death-only not and or due to accident or total permanent disability due to accident and recovery of principal and optimum investment returns ensured by Jiwasraya.


Invest Link Assurance

Benefits

Investment-linked life insurance product that provides life insurance protection as well as potential investment results that correspond to the risk profile of customers, and is designed to provide flexibility in meeting the needs of customers at every stage of life.

•

• •

• •

• • •

• •

• •

The investment value that has been formed from the first year of the policy. The investment value depends on the performance and risks of each type of investment fund. Top-up Premium facility (Single Top-up) at any time, in accordance with the provisions contained in the policy. Customers could define the amount of the composition of protection value and investment value, in accordance with the provisions contained in the policy. Fund Switching facility in accordance with the provisions contained in the policy. Various rider options. Daily unit price information in national printed media, also via Customer Care Prudential and Prudential Indonesia official website, www.prudential.co.id. Fund Progress Report is sent to the customers on a periodic basis. Free to determine the investment options available, according to customers’ preferences, in accordance with the provisions contained in the policy. Free to make a withdrawal any time according to customer needs, in accordance with the provisions contained in the policy. Premium Holiday could be taken after the fourth year, in accordance with the provisions contained in the policy. Assistance and Medical Evacuation Services in the event of a medical emergency, 24 hours around the world up to the age of 70 years.*


•

Extra benefits where the investment value has been formed since the first year. Provides Inflation Link facility that increases the value of the Sum Insured and Premium in line with inflation in the future. Special Benefits without additional charge, namely: - If the Insured suffers Terminal Illness then 50% of the Basic Sum Insured will be paid early. - Investment Guaranteed Death Benefit (IGDB) for Death Benefit, if the insured dies and at the same time investment value drops below the value of the initial investment, thus it will be guaranteed the difference between the initial investment with an investment value when the insured dies with a maximum of Rp200,000,000 for all policyholders with IGDB benefits held at Commonwealth Life.


•

Company Profile

Insurance program that combines life insurance and investment flexibly with extra benefits and offers life insurance protection with a wide range of protection for the customers and their family.

Management Report

Sparklink Assurance

Description

2016 Performance

Product

*) In accordance with the provisions contained in the policy. Corporate Social Responsibility


73


Services Product ATM

Description

Benefits

Electronic banking services with real time, online access around the clock.

•

Remittance/Swift

Fund transfer service for foreign currencies.

•

Can take place quickly and securely around the world with a variety of foreign currencies as well at competitive telegraph exchange rate and fee.

RTGS/LLG/Clearing

Fund transfer service for Rupiah.

•

Can take place quickly and securely at a competitive price.

QNB First

Priority banking services for preferred customers.

• •

Comfortable lounge service privileges with the best facilities. Airport transfer, local airport lounge, luggage handling, and immigration handling facilities.

74


•

Easy cash and cashless through ATM services at ATM Bersama and MEPS. Free cash withdrawal and balance inquiry fee at all of the Bank’s ATMs, ATM Bersama, and MEPS.

Description

2016 Performance

Product

Benefits

Box rental facilities to store goods, valuables, or important documents.

•

Secure and protected deposit box at a competitive price.

Letter of Credit

Facility of L/C issuance for purchase of goods and services from abroad to inside or outside Indonesia’s custom area.

•

Ensure secure transactions for importers in which the payment (to beneficiary) is made after all the documents accepted have met the requirements from importers to bank (for transaction).

FX Today

Foreign exchange purchase/ sale on foreign exchange rate determined at the time of transaction, with payment and delivery on the same day as the transaction date.

•

Provide services at an accurate and competitive price.

FX Tomorrow

Foreign exchange purchase/ sale on foreign exchange rate determined at the time of transaction, with payment and delivery on the working day after the transaction date.

• •

Provide services at an accurate and competitive price. Customer foreign exchange rate hedging (this transaction allows customers to hedge foreign exchange risk exposure to fluctuated currency exchange rate).

FX Spot

Foreign exchange purchase/ sale on foreign exchange rate determined at the time of transaction, with payment and delivery on 2 (two) working days after the transaction date.

• •

Provide services at an accurate and competitive price. Customer foreign exchange rate hedging (this transaction allows customers to hedge foreign exchange risk exposure to fluctuated currency exchange rate).

FX Swap

Foreign exchange purchase/ sale on foreign exchange rate determined at the time of transaction, with payment and delivery on 2 (two) different days, using the agreed swap price.

• •

Provide services at an accurate and competitive price Customer foreign exchange rate hedging (this transaction allows customers to hedge foreign exchange risk exposure to fluctuated currency exchange rate).

Management Report

SDB

Company Profile Corporate Governance Corporate Social Responsibility

75




Other Services Product

Description

Benefits

DooEt+

Mobile Banking.

• •

Smartphone application with easy-to-use features. Various type of financial (transfer, payment, and purchase) and non-financial transactions are only 2 (two) clicks away.

Corporate Internet Banking

Internet Banking service for corporate customers.

• •

Ability to set banking transactions anywhere and anytime. Ability to customize limit of daily transaction and number of registered users on their own. Token to secure transaction and SSL-protected web pages. No installation or monthly fee on the customers.

• • QNB Online Banking

Internet Banking service for individual customers.

• • •

Corporate ATM Card

76

ATM Card service for corporate customers.


• • •

Can be accessed through computers or smartphones, for various kind of banking activities in practical and safe manner. Various services such as inter-bank transfers, bill payments, prepaid reload, and etc. Access to information of various accounts (Checking Account, Savings, Time Deposits, and Loans) in integrated service. Customized QNB ATM card with design and logo of corporate customers. Can be used for cash withdrawal, payment, and purchase. Comes with application to control supplies and demand of cards related to the Bank.

2016 Performance

Management Report

Company Profile




77



Work Regions and Operational Map

Solo

Palembang

1 Branch Office

1 Branch Office

Jakarta 19 Branch Offices

Semarang 2 Branch Offices

Medan 7 Branch Offices

Pematangsiantar 1 Branch Office

Batam 1 Branch Office

Depok 1 Branch Office

Bekasi 2 Branch Offices

Pekanbaru

Tangerang

3 Branch Offices

1 Branch Office

78


Bandung 2 Branch Offices

2016 Performance

Pasuruan Management Report

1 Branch Office

Balikpapan

Makassar

1 Branch Office

1 Branch Office Company Profile Management Discussion and Analysis Corporate Governance

Denpasar 1 Branch Office

3 Branch Offices


Surabaya

At present, Bank QNB Indonesia has 1 head office, 48 branch offices and more than 49,000 networking with ATM Bersama serving customers across Indonesia. Network and Distribution

Total

Head Office

1

Branch Office

48

ATM

72


79


Organizational Structure

Board of Commissioners

President Director (CEO) Azhar bin Abdul W.*

Committees**

Chief Business Director Azhar bin Abdul W.

80

Retail Banking Director Vacant

E-Banking & Financial Inclusion Director R. Andi K. U.*

Wholesale Banking Director Vacant

Risk Director Lloyd William Rolston

Head of Network & Distribution Rasmoro P. Aji

Head of Alternate Channel Titis S. Utomo

Head of E-Banking Sales & Business Development Monica Riesanty

Head of Corporate Banking Vacant

Head of Risk Management Caroline Halim

Head of IT & Digital Banking Slamet Riyadi

Head of QNB First Joyce Puspa C.

Head of Financial Inclusion Thomas H. Tulus

Head of Commercial Banking Vacant

Head of Commercial Credit Wendriani Ika L.

Head of Product Development Joyce Puspa C.*

SME Lending Head Edwin Teintang

Customer Experience Head Fithri R.

Head of Structured Finance & Advisory Vacant

Head of Corporate Credit Risk & Credit Administration Vacant

Retail Funding Head Indra Wardi

Merchant & Credit Card Operations Head Kirtiadi Hotama

Head of Treasury Novy Angela A.

Head of SME Credit Review Ervin Gumilar

Head of Client Services Hermia K.*

Head of Retail Banking Credit Review Joseph W.

Wholesale Funding Head Yani Suryani

Special Asset Management Head Arisman


2016 Performance

Risk Oversight Committee

Audit Committee

Chief Auditor Cut T. Azia

Head of Operations Tota M. Tobing

Head of Compliance & Procedure Rr. Utami Tjipto

Head of HRBP & Organization Development Rahma Diana

Head of Corporate Communication Glenn Ranti

Head of General Services Denny S.

Head of Legal Bambang Wijayanto

Head of Learning & Development Sylvina Savitri

Head of Strategic Planning & Change Management Office Haryanti Kodiat

Head of Corporate Secretary Lina

HR Operations Head Endang W. L.

Head of Finance & Accounting Tomi Parisianto

**

Legend Acting Sub Division Head directly report to Director


*


Human Resources Director Novi Mayasari


Compliance Director Windiartono T.

Company Profile

Operations Director Novi Mayasari*

Management Report

Remuneration & Nomination Committee

Committees • HR Committee • IT Committee • Risk Management Committee • Asset & Liability Committee (ALCO) • Credit Committee • Procurement Committee • Product & New Activity Committee • Fraud Oversight Committee • Special Asset Management Committee

This structure has been approved pursuant to the Decree of the Board of Directors No. 046/SK-Dir/XII/2016 on December 1, 2016 PT Bank QNB Indonesia Tbk

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M

an

ag

em

en tD an i d scu A s na si ly on si s

Annual Report 2016

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2016 Performance

Management Report

Company Profile




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84



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Amidst economic challenges, we strive to uphold our performance to keep excel and push forward to commit with the target.


Industry Overview

Macroeconomic Overview The global economic recovery in 2016 was slow but commodity prices began to improve. In the midst of global economic uncertainty which increased after the US election, the US economy showed improvement as reflected in improved GDP, stable unemployment rate, and inflation which is likely to increase. In line with these developments, the chances of Fed Funds Rate (FFR) increase in December 2016 was also intensified. However, economic growth in other developed countries, such as the European Union, tend to be limited and overshadowed by political risk.

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On the other hand, economic growth in developing countries such as India and China was still expected to be the driver of the global economy despite China still experienced a slowdown. In the commodity market, world oil price was still at a low level, in line with the high OPEC oil production. Meanwhile, a number of Indonesia’s export commodity prices continued to improve, such as palm oil, coal, and some other minerals. The Indonesian economy showed positive growth in the end of 2016, accompanied by macroeconomic stability and financial system that was well maintained. Economic growth has been relatively well supported by domestic demand which remained

relatively strong amid the sluggish global economic recovery. Moreover, macroeconomic stability was well maintained as reflected in low inflation, declining current account deficit, and the exchange rate which was relatively stable. Overall, real GDP growth rose to 5.02% in 2016 from 4.79% in 2015. Real GDP slowed in the second half of 2016, but then picked up on higher investment and a recovery in commodity prices. The slowdown of real GDP growth was to be expected in the second half of 2016 from 5.19% in the first half as weak revenue and a ceiling on the budget deficit were likely to force the government to rein in spending.

(in percentage)

4,91

5,19

5,02

5,04

Q4 2015

Q1 2016

Q2 2016

Q3 2016

Q4 2016

6,00 5,00 4,00 3,00 2,00 1,00 0

Source: Statistics Indonesia


Spatially, the economic growth in Java and Sumatra still grew strongly, accompanied by increased economic growth in Eastern Indonesia Region which is in line with the increase in mining exports and the operation of the mineral smelters. In terms of growth by sector, the sector of industry, agriculture, and trade achieved positive growth.

Company Profile

Indonesian Inflation Rate (% year-on-year) 9


CPI

8 7

Inflation target upper limit (5%)

6 5


The 2016’s economic growth of 5.02% was driven mainly by the household consumption which grew quite robust. On the investment side, growth in construction investment was relatively well supported by the continued construction of government infrastructure projects. Meanwhile, the role of private investment, especially in nonconstruction was still relatively low, amid negative growth of government consumption in line with the policy of fiscal consolidation. Investment has contributed quite significantly to growth in 2016 mainly due to government efforts to push through the public infrastructure program and encourage investment. Central government capital spending also grew quite significant in 2016 and eleven economic initiatives have been announced since September 2015 to support investment. These include streamlined licensing, tax relief, energy tariffs cuts, easier access to finance, lower trade restrictions, and liberalized foreign ownership. The contribution of private consumption also slightly increased, supported by falling inflation and easier monetary policy. The contribution of net exports to growth has fallen, mainly as exports have decreased due to the slowdown in China.

Management Report

5,04

Inflation has eased leading to lower interest rates and reached 7.3% in mid-2015 due to cuts to fuel subsidies and higher import tariffs. However, the effects of these measures have now worked through the system and inflation has steadily declined, falling through the 3% floor of Bank Indonesia’s target band in August 2016. The starkest slowdown was in transport (19% of the CPI basket), which fell 1.9% in August year-on year versus 6.4% in 2015. Additionally, housing inflation has declined to 1.6% in August versus 6.3% in 2015. Lower inflation and a more stable exchange rate have given the Bank Indonesia room to lower interest rates. The policy rate was cut four times between December 2015 and July 2016 by 25 basis points each time. In August, Bank Indonesia changed its target policy rate to a more relevant market rate to ensure that rate cuts are better transmitted to the rest of the economy. In September and October, the rate was cut twice more from 5.25% to 4.75%.

2016 Performance

Indonesian GDP Quarterly Growth Rate (2016)

4 3 Inflation target lower limit (3%)

2

2.8

1 0 Jan - 11

Jan - 12

Jan - 13

Jan - 14

Jan - 15

Jan - 16

Sources: Statistics Indonesia and QNB Economics PT Bank QNB Indonesia Tbk

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In addition, the fiscal deficit has widened on weak revenue and higher nominal expenditure. The budget deficit widened to 3.1% of GDP in the first half of 2016 from 2.5% in 2015 due to a 5% drop in revenue compared with the first half of 2015 and a 9% increase in expenditure. Revenue was held back by lower tax receipts due to an

increase in the personal income tax threshold, lower corporate profits in some sectors, such as coal and metals mining, as well as lower oil and gas prices. Expenditure rose in nominal terms due to higher spending on wages, goods, services, investment, domestic interest as well as higher regional transfers. This was more than enough to offset

lower subsidy costs. Infrastructure investment is gaining momentum as progress is made on 30 priority projects worth US$415 billion, including roads, railways, ports, power plants and oil refineries. The government has increased its investment spending to 27% of the budget in the first half of 2016 from 16% in the same period of 2015.

Fiscal Balance (% of GDP)

Revenue 15.3 16.5

-1.1 2011

Expenditure

Fiscal Balance

15.5 17.2

15.0 17.2

14.5 16.7

13.0 15.6

-1.7

-2.2

-2.2

-2.5

2012

2013

2014

2015

10.5 13.7

-3.1 H1 2016

Sources: Bank Indonesia and QNB Economics

Banking Industry Overview In 2016, banking sector growth has slowed while higher non-performing loans (NPLs) are pressuring profits. Deposit growth slowed from 8.0% in 2015 to 6.8% in July 2016 (year-on-year) as a result of easier monetary policy and lower nominal GDP growth. Lending growth has slowed from 10.1% in 2015 to 7.6% in 2016 due to weak credit demand from consumers and firms and as banks have not fully

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passed on lower interest rates to customers. Lower growth in lending to manufacturing of 3.9% in July versus 14.3% in 2015 was the largest contributor to the slowdown in addition to weaker lending to trade, restaurants and hotels, which grew 6.8% in July versus 11.0% in 2015. Profits were high but have been squeezed recently with return on equity falling from 21.3% in 2014 to 15.4% at the end of June 2016, mainly due to higher NPLs, which rose to 3.0% at the end of June from 2.1% on average in 2014, resulting

from weaker growth and falling commodity prices. The capital adequacy ratio remained high and rising at 21.2% at the end of June 2016. In Q3 2016, the financial system stability was relatively stable and well maintained which is supported by relatively high banking capital.

Business Review 2016 Performance

Retail Banking

-

-

assets management which includes current account and savings account was integrated with insurance products as well as internet banking and mobile banking services. In terms of people development and productivity, the initiatives included certification program for retail banking work unit, branch manager accreditation program, operational certification, and Standard Operating Procedure (SOP) update. In terms of productivity, the Bank has further promoted sales culture, built accreditation, and boosted customer acquisition through effective marketing programs.


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Network and Distribution To keep up the good momentum, the Bank is committed to providing a convenience premise at the hot spot in several cities, such as Jakarta and Medan, by creating a new look and feel in branch lounges.


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Constantly improved Net Interest Margin (NIM), boosted portfolio grade, reduced funding cost, and actively managed NPL portfolio. To improve NIM, the Bank strived to optimize integration of QVA to its banking product and service while applying strategic measures to drive higher Business Loans growth and fee-based income. The Bank focused on sharpening its segmentation through Mall to Mall Acquisition Campaign, revamped underwriting policy, and strengthened back-end process to the extent of collection while bolstering its backbone funding, i.e. QNB First. On product development, the Bank particularly emphasized on fitting in with the customers’ needs of diverse risk profiles and further equipped its product and services to achieve service excellence. Among others, the Bank has added some fund managers and bancassurance partners, where the majority of the products were channeled through QNB First. Similarly,


Strategy and Achievement of Retail Banking in 2016 The main strategies of retail banking segment which have been implemented during 2016, among others, include the following:

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Company Profile

In general, the achievement of key business drivers in retail banking segment reflected a continued momentum. Third party fund increased more than 40%. Low cost funding, in the form of Saving Account, grew more than 100%. New customers on board, grew more than 45%. SME Lending Product grew almost 34.4% with manageable NPL. These figures reflected that the Bank’s strategy to further strengthen the retail banking segment was on the right track during 2016 journey despite the increasing NPL which was to be expected and still manageable.

Management Report

QNB Indonesia truly understands and is aware that to further improve its competitive strength, it shall have a robust retail banking segment with a broad customer base. Therefore, in 2016 QNB Indonesia focused on further strengthening its retail banking segment which was a continuation of previous year’s strategy of building a solid retail banking platform using technology approach. The segment of retail banking in QNB Indonesia comprises of 6 (six) robust pillars, i.e. Network and Distribution, Priority Banking (QNB First), Alternate Channel, Retail Product Development, E-Banking, and Financial Inclusion, to make sure that the products and services provided are aligned with customer satisfaction.


By leveraging the existing network and implementing Single Captain concept in every business area, the synergy among business segments has led to excellence result such as the increment of cross-sell ratio, strong governance implementation and ultimately, positive impact of customer engagement. In addition, the Bank has consistently developed all of Branches and Head Office staff by creating a robust module of several accreditation programs to ensure professional capability of QNB Indonesia staff which lead to customer satisfaction. As of December 31, 2016, the Bank has 48 branches, 72 QNB ATMs, and also connected with more than 49,000 ATM Bersama. Retail Funding In terms of retail funding, the Bank organized Mall to Mall Acquisition Campaign and implemented Customer Acquisition Team in which the performance was magnificent. As result, the Bank’s saving account grew more than 100% in volume and grew more than 40% in terms of account. During 2016, the Bank has organized more than 100 Mall to Mall Campaigns to achieve our saving target. To support the saving growth, the Bank also provided direct gift as one of the marketing program with various gift product for mass and upper mass segment and it has shown that our marketing program is accepted by our client and our target segment.

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Retail Funding Strategy for 2017 Year of 2017 is the year of digital banking and financial technology era, therefore to embrace the potential business and new market, the Bank has developed mobile app called DooEt+ to cater that segment. To boost low cost funding and to boost CASA (current account savings account) penetration, the retail funding business is leveraging DooEt+ to create the funding ecosystem which at the end will increase the CASA volume with decent cost of fund by providing ultimate mobile app capability. “Don’t change the winning team and program“ is our motto, we still see Mall to Mall Campaign as one of our main drivers to acquire new customers combined with direct gift but on top of that, we are currently leveraging the mobile banking app called DooEt+ to make sure our customers more engaged and satisfied with our service which at the end will generate good customer experience. QNB First The establishment of QNB First aim has meet customers needs by providing investment alternatives from saving to investment products. Effective and efficient business process has resulted in the growth of new customers to bank (NTB) in the end of December 2015 to December 2016 as much as 37.2%. Asset Under Management (AUM) as of December 31 2016, has grown 164.6% and fee based income has also shown significant increase of 233%.

One of the QNB First’s aim is to deliver excellent service to customers which is realized through the increase of partners to provide investment products. Throughout 2016, three new bancassurance partners have been added, namely Jiwasraya, Prudential, and Commonwealth Life. On process, mutual funds partners, namely, CIMB-Principal and Aberdeen will be added this year as well. Partners addition will provide customers with more varies investment products which will meet customers’ need. In line with the regulations, QNB First also provides customers with consolidated statement consists of customers’ full portfolio. In further plan, consolidated statement will be available in mobile banking and internet banking which will provide customer simplicity and flexibility. Several number of trainings were also held during this year with the goal of enhancing QNB First’s marketing staff. Certified Financial Planner training was given to marketing staff in order to enhance their knowledge which will impact to their service level. Here in QNB Indonesia we believe that financial advisor skill is required due to high variety of investment product to be delivered to high net-worth customers. Overall, we believe that the customer satisfaction and experience will be enhanced significantly.

2016 Performance

•

•


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The Bank also prepares more features and benefits in the near future by enriching DooEt+ to fullfil the customer needs and to attract new users.

The available transactional facility, among others, includes: - Saving inquiry limit; - Cash withdrawal through QNB Indonesia’s ATM, ATM Bersama network, and MEPS; - Bill Payment; - Inter-bank transfer through QNB Indonesia’s ATM other ATM networks which in cooperation with QNB Indonesia; and - PIN changes.


Purchase with QR code We have currently more than 200 outlets able to accept purchase using DooEt+ by scanning QR code. Transfer Our DooEt+ have been connected to almost all major banks by connecting DooEt+ with ATM Bersama system. Ticketing Added 2 ticketing services are namely Citilink airline – Garuda Indonesia group and Train-inter-city ticket. This enhancement makes DooEt+ the only mobile banking application that has ‘ticketing service’ feature.


E-Banking The Bank has enriched the application of mobile banking ‘DooEt+’ with various features for the benefits of our customer. Some of key features that have been added in DooEt+ platform were: • Bill payment All operators of telecommunications post-paid bills. • Purchase Pre-paid airtime for all operators of telecommunication as well as electricity token.

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The cooperation between QNB Indonesia and BPR is expected to generate the following results: • BPR could be connected to the National Banking and also between rural banks which are the participants of BPRconnect, without requiring large investment to build infrastructure. • BPR could develop other sources of income, such as fee based income (i.e. admin fee/ transaction fee). • BPR could add differentiation and/or develop products. • BPR could improve its services by providing ATM card, ATM, and a connection to the ATM Bersama network and MEPS.

Company Profile

Personal Loan During 2016, Personal Loan generated progressive performance of more than Rp499 billion. This recorded incremental more than 74.7% (December 2015 Outstanding vs December 2016 Outstanding). The improving performance has shown in the last three months with the improving Approval Rate, better customer segment, and improved Approval Time. This momentum will remain with healthier segment in 2017 and generate more income to the Bank.

Management Report

Financial Inclusion (Branchless) BPRconnect is a service that aims to facilitate rural banks (BPR) so as to provide a more complete service and comprehensive services to its customers. The scope of cooperation between QNB Indonesia and BPR includes the use of Card Management System and QNB Indonesia’s ATM network with payment system of BPRconnect.


Retail Banking Strategy for 2017 We believe that in addition of traditional channel in banking industry, the digital trend already disrupts the way of customer to pay, do transaction, and access other financial services. With the penetration of more than 100% mobile handset in Indonesia, smart phone has become the most preferable channel for almost everything, including financial services. Statistic showed that 40% of mass affluent Asian customers prefers online or mobile banking and 50% of them look for a full set of digital banking services. And the data also suggested that digital banking customer will increase from 670 million to 1.7 billion in 2020. In response to such trend, QNB Indonesia will focus on developing its digital platform to further expand its customer base. Entering 2017, the Bank is planning to further improve the service of priority banking. In particular, we will increase the function of QNB First to include the financial advisory function.

Wholesale Banking Wholesale banking in QNB Indonesia consists of six specific units: Corporate Banking, Client Services, Structured Finance & Advisory, Commercial Banking, and Treasury Divisions. The Bank’s wholesale banking provides middle and large companies with easy access to award-winning products.

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Corporate Banking is established to attend to multinational companies as well as State Owned Enterprises (SOEs) while commercial banking serves similar target segment with smaller scale profiles. Structured finance and advisory, on the other hand, functions to provide companies which require debt restructuring through syndication loan. In addition, the Bank also provides each and every wholesale banking customer with comprehensive relationship coverage service to ensure the best possible service and responsiveness to our clients. Throughout 2016, the Bank consistently strives to maintain its asset quality while also expanding its Wholesale Banking portfolio and footprint in the national banking industry. Strategy and Achievement of Wholesale Banking in 2016 The wholesale banking still accounted for the bigger share of the Bank’s portfolio in 2016. Generally, key business drivers reflect continued momentum in which corporate lending declined 17.55% and commercial lending declined 11.10%.

In 2016, the Bank was not only focused on maintaining customer engagement and strengthening customer relationship but also increased cross-selling transactions by wholesale banking customers. Among the cross-selling initiatives were to introduce QNB First services to the wholesale banking customers. Wholesale Banking Strategy for 2017 In 2017, the development of wholesale banking will be focused on always providing quality wholesale credit, supressing NPL, and maintaining credible customers. In particular, the Bank will also focus on the establishment of strategic corporate companies to support the business development of both funding and financing and other banking services. The Bank will also promote solution approach to customers through the framework or supply chain approach, with a focus on domestic structured trade in key sectors. In addition, the Bank will also carry out SME segment deepening in order to expand the coverage of bank funding development.

2016 Performance

Profitability The Bank’s profitability is based on geographical segment information

which constitutes of several areas, namely, Jakarta, Sumatera, Jawa

and East Region which could be seen in the following table:

Region Jakarta

Sumatera

Java

East Region

Total

18,812,829

1,685,439

2,617,297

1,257,137

24,372,702

Total liabilities

13,889,632

3,823,337

2,990,921

190,883

20,894,773

Net Interest income

288,876

92,284

85,086

50,171

516,417

Net fees and commission income

111,458

5,404

34,447

3,181

123,490

74,905

1,151

93

23

76,173

(1,342,275)

(49,054)

(82,438)

(32,826)

(1,506,593)

(3,970)

628

-

3

(3,339)

(871,006)

50,413

6,188

20,552

(793,853)

Other operating income Operating Expenses Non-operating (expense) income - net Income (loss) before income tax

Jakarta

Sumatera

Java

East Region

Total

19,333,304

1,854,141

3,081,541

1,488,663

25,757,649

Total liabilities

18,107,169

2,260,257

2,815,819

150,220

23,333,465

Net Interest income

486,019

75,687

73,460

54,085

689,251

Net fees and commission income

173,005

3,848

15,366

2,039

194,258

13,509

2,554

737

1,460

18,260

(616,524)

(44,004)

(22,623)

(13,345)

(696,496)

3,616

50

18

(22)

3,662

59,625

38,135

66,958

44,217

208,935

Other operating income Operating Expenses Non-operating income - net Income (loss) before income tax


Total assets


Region 2015

Company Profile

Total assets

Management Report

2016



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Business Supporting Unit Review

Bank strives for business to thrive and economies to prosper in which seamless operational banking transactions is one of the keys to achieving our objective. To meet this particular objective, we constantly focus on business process improvement and operations efficiency.

In 2016, the Bank focused on improving people and process especially by further internalizing the QNB Values, enhancing our digital platform, as well as enhancing compliance. In terms of compliance, the Bank has launched several initiatives to enhance regulatory compliance and promote compliance culture across the organization. Moreover, the Bank also intently emphasized on improving productivity and streamlining business process. Among the strategies were to implement the concept of Single Captain in order to build stronger branch role. In terms of improving people, the Bank focused to build competencies and engagement of its employees in which the people competence enhancement was carried out through certification and accreditation programs aimed to ensure all employees are wellequipped in technical and nontechnical aspects accordingly to their job requirements.

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Information Technology Implementation and development of information technology is paramount to executing the Bank’s business strategy. From time to time, the Bank actively improved technology information infrastructure to enhance customer service and convenience in banking transaction while also ensuring competitiveness and efficiency in its banking solutions, as well as posing low operational risk. In 2016, the Bank particularly aligned its strategy to both business plan and most importantly, mission to provide outstanding technologyenabled banking product and services. Information Technology Strategy in 2016 In 2016, the Bank has set out a series of information technology (IT) strategies which focus on meeting its operational and strategic needs. The IT strategies in 2016 draws heavily on increasing internal capacity while further improving our business processes. To optimize IT capabilities in achieving the Bank’s objectives, IT Division implemented an initiative to remap and redeploy capacity. To boost internal capacity, the Bank has planned system infrastructure, rerun sharepoint project for enhancing business process management, collaboration, and Corp Portal, and reactivated Disaster Recovery Center (DRC) site for redundancy. Next, efficiency is one of the major focus of IT improvement in the Bank. To foster a more efficient implementation of IT framework, the Bank strived to reprioritize cost allocation and cost-oriented development. To ensure cost efficiency and

efficient business process, the Bank strives for network and hardware efficient usage which included Cisco network backup, hardware virtualization, bandwidth size remapping, and licensing optimization. In addition, the Bank also revitalized in-house development with third party which consisted of various platforms: Q Performance Management dashboard to monitor performance of every business line, ATM Recon system to reconciliate ATM, Data Mart & BI as data mapping and warehousing for BI requirement, Branch front end sys as front end system for branch offices, SCM platform, DooET+ (Do One On One Electronic Transaction) Mobile application, and CIMS. In addition, the Bank also believes that the successful IT development is a vital key to drive business growth. As such, the Bank consistently develops new systems and frameworks to expand its business. In 2016, among the new developments that took place were B2B system development, B2C system development, and digital banking automation. For B2B system, the Bank has been developing SCM, CMS (cash management system), B2B Integration, BPR Connect, and CIB (corporate internet banking). On the other hand, development of B2C system comprised of DooEt Mobile, DooEt Merchant, CRM Apps (customer relationship management system), Internet Banking, and QFX (Q Foreign Exchange system). Finally, the Bank also further promoted digital banking automation through EMA, Estatement, Combined statement, CBS branch front end, AML, and Workflow.

Maintenance Consistent maintenance is part of the Bank’s efforts to monitor and mitigate risk impacts.

IT Efficiency • Network & HW usage efficiency • Revitalize in-house development with third party Business-Driven IT Development • B2B system development • B2C system development • Digital banking automation


The Bank is uniquely positioned to demonstrate that business and IT strategic planning can co-exist. To meet the goal of providing technology - enabled banking product and services, the Bank derives from four strategic initiatives which see implementation from 2015 to 2017, namely IT Capabilities

IT Capabilities Optimizing • Rerun Sharepoint project • System infrastructure capacity planning • Reactivation DRC site for redudancy

Company Profile

Information Technology Plan 2017 In banking industry, it is essential for business strategies and IT implementation are in sync. In addition, it requires consistent and continuous implementation for a bank to achieve the speed and agility required to meet expectations and at the same time remain focused on the cost effectiveness of IT initiatives.

Optimizing, IT Efficiency, Business Driven IT Development, and High Performance IT Service Management. In 2017, the Bank will continue the implementation of respective initiatives accordingly to project prioritization as detailed below.

Management Report

Information Technology Framework Information Technology (IT) Framework in the Bank comprises of four aspects, namely planning, development, management, and maintenance. Fundamentally, the four aspects serve as the cornerstone for the Bank to formulate, align, execute, and evaluate its IT strategy to meet its objective in accordance with business growth, good corporate governance, risk management, and profitability.

Management IT management of the Bank is focused on managing operation and core banking.

2016 Performance

On the last note, the Bank also concentrated on analyzing business impact and monitoring performance to ensure high performance of IT Service management. Among the initiatives rolled out were development of business impact analysis, performance monitoring system which include ATM Monitoring System, Network management, and system monitoring alert, as well as improvement of security system by implementing IPS (internet protocol security system), anti virus, and anti malware.

High Performance IT Service Management • Develop business impact analysis • Performance monitoring • Improving Security System


Planning In IT Framework, IT Planning includes the formulation, discussion, and proposal of the Bank’s IT strategies and initiatives in relation to optimizing capability, fostering efficiency, providing outcomes, and maintaining service level.


Development The Bank are fully aware that a sound IT system plays a key role in sustaining business growth. With the commitment to deliver solutions, the Bank applies System Development Life Cycle (SDLC) to ensure zero defect.


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Operations Operational aspect plays an important role as a supporter of the Bank’s business growth. As for the operational development of the Bank is under the Operations Division which includes Trade & Loan Operation, Treasury & Fund Transfer Operation, Branch Operation, Operation Control, and E-Banking & Transaction Service Operations. To support the Bank’s business growth from the operational aspect, there were two major initiatives implemented in 2016. First, the implementation of “Single Captain” concept in branches to further empower the branches in achieving target and implementing a more effective and efficient without prejudice to the applicable regulations and Bank’s internal provisions.

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Second, established frontliner system through Branch Operations Support System (BOSS) which could accelerate the opening account process both in branch and during marketing activity such as exhibition. The implications of BOSS’ implementation are the increase of customer experience in terms of enjoying banking services, namely: - Acceleration of processing time in customer account opening up to 75%; - Acceleration of ATM cards activation; and - Acceleration of mobile banking DooEt+ activation. Broadly speaking, the Bank continues to face challenges including in terms of operational aspect development. Nevertheless, the Bank continuously strives to overcome these challenges by continuously develop the system

and process, carry out coordination with the entire related working units, implement a disciplined control in every operational process. Other operational development during 2016, among others, also includes: 1. Simplification and integration of the existing operational procedures. 2. More efficient and accountable regulatory reporting process. 3. Reorganization and strengthened Internal Control Unit for better control and process. Operational Development Strategy in 2017 In 2017, the Bank will keep improving banking services process in every channel which is realized by means of automation of operational process which aims to provide more value to the customers and Bank.

Internal Job Posting This program provides a wide opportunity for all employees to grow and develop through the internal recruitment program, or commonly known as job posting.

•

External Recruitment External recruitment process is carried out with due regard to the standard rules and procedures that have been designed carefully. External recruitment process is generally carried out by various methods, including the executive search process.

•

Management Development Program (MDP) MDP is aimed at recruiting young leaders for the Bank’s future needs. The MDP candidates participated in various training and development of strategic and leadership competencies. During the courses that lasted 3 (three) years, each candidate will follow a special program devoted to the development of their competencies.

Pilot projects that have been done in the past year were also being continued to another level this year. Such initiative was expected to trigger new initiatives that support the development of a stronger organization on an ongoing basis. Human Resources Fulfillment The main objective of planning and fulfillment of human resources at the Bank is to ensure the achievement of Bank’s plans and strategy in the short term and long term. Planning and fulfillment is also conducted with respect to the strategy map, the direction of human resource development. The Bank meets the needs of employees through internal and external recruitment program, rotation of employees, and the Management Development Program (MDP). Internal recruitment and rotation is always put forward in order to provide the opportunity for employees to develop their careers in accordance with their competence and their aspirations. In general, the program of human resources fulfillment held by the Bank in 2016 includes:

This year, the Bank successfully graduated 8 (eight) MDP participants who have completed the third year of the program. These MDP participants have been placed to fill a variety of strategic positions required by the Bank, either as professionals


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•


In relation to maximizing the potential of resources and capacity, the Bank has encouraged the effectiveness of organization by re-mapping the employees and by giving priority to fulfill key positions that support the Bank growth.


Employee Referral All employees of the Bank are invited to contribute in nominating the candidates that may fulfill the Bank’s business needs. This particular process is very helpful in accelerating recruitment process and meeting the expected qualities.

Company Profile

Organization Development In order to support business growth, the Bank consistently reviews its organizational structure to the extent of evaluating its productivity and effectiveness. For example, in this year the Bank has changed the structure of the organization at the branch offices with the concept of “Single Captain”. This concept was introduced to ensure the ability of branch offices to answer all the needs of customers through a single service door. With this change, both individual and corporate customers could get service on all products provided by the Bank at a nearby location.

•

Management Report

Human Resources Strategy in 2016 At present, the company that wants to succeed must be able to adapt, face challenges, and customer oriented. In these conditions, the effectiveness of human resource management is an important key to business success. To maintain good performance, the Bank also continued to align its HR policy with the Bank’s strategy while considering the prudent principle, good corporate governance, and best global practices. The Bank’s HR strategy in 2016 focused on the development of human resources which includes continuous internalization of QNB Values, certification and accreditation, talent and performance management, Human Resources Information System (HRIS), as well as intensive leadership training and accreditation.

Along with the intensification of the development of digital banking business, the Bank also has expanded the organization by establishing the Directorate of E-Banking and Financial Inclusion. This strategy is expected to answer the challenges and needs of the Bank to win the competition in the field of digital banking.

2016 Performance

Human Resources


who have specialized skills as well as leadership subdivision. In 2016 the Bank recruited 6 (six) talented graduates from prestigious universities to join the MDP program of QNB Indonesia. Social Media and Employer Branding Continuing the previous year’s excellent growth trend, this year the Bank also intensified the use of LinkedIn social media as a medium of employer branding and candidate search resources. Employer branding is needed to help the Bank win the competition of quality talent recruitment. This year the Bank managed to grow the number of followers of its Linkedin social media to more than 20,000 (twenty thousand) followers, these figures represented the third highest followers in Indonesia for company with the number of employees from 500 to 9,999 people in the month of May 2016. Human Resources Information System (HRIS) To maximize the effectiveness of every process of human resource management, this year the Directorate of Human Resources has launched Human Resources Information System (HRIS). This program was developed internally to respond to various work demands related to human resources and facilitate the employees to get personnel service. In general, as of the end of 2016 the HRIS of QNB Indonesia has been able to digitally transfer a large part of personnel information recording and related reports, creating employee self service for leave purpose, overtime, as well as performance planning and assessment.

98


Performance Management and Remuneration Strategy As a performance-based organization, the Bank implements a modern performance management system in which performance is measured based on achievement of Key Performance Indicator (KPI) and implementation of QNB Values. The purpose of this system is to evaluate the performance of employees from both aspects, which are employees’ achievement of targets (KPI) and work performance in terms of behavior (QNB Values). The Bank has a feedback mechanism for the performance of all employees in various ranks. The purpose of this system is to help every employee in creating opportunities of development in various aspects. As a commitment of the Bank to provide career development opportunities to employees, this year the Bank has launched a performance management system through the Human Resources Information System (HRIS). With the establishment of this system, all employees could perform online and open performance planning and assessment. On the other hand, the performance evaluation results also play an important role in determining the remuneration of employees. The Bank implements transparent and objective remuneration strategies in which remuneration is determined based on an evaluation of performance and contribution to the Bank. The Bank provides remuneration and other benefits to employees in accordance with the existing grading system and capacity as well as the applicable standards in the banking industry.

The Bank is also reviewing and adjusting remuneration and other benefits regularly by participating in salary surveys. Through these efforts, the Bank expects to maintain a competitive remuneration and ensuring employees obtain remuneration in accordance with their competence and their positions so employees could maintain a good performance and contribute more to the development of the Bank. All policies related to remuneration systems are further elaborated in the section of Human Resources Committee and the Remuneration and Nomination Committee as the organizational function which are authorized to ensure that the Bank’s remuneration strategy in order to balance the organization competitiveness and capability. Talent Management A commitment to being a top tier Bank in terms of financial performance will also require superior workforces. In 2015, the Bank continued its talent management program called Developing Great Talent (DGT). Developing Great Talent (DGT) is a tool developed and tailored especially for the Bank to ensure the Bank manages and retains potential and well-performed employees to help the Bank to reach its goal. Based on the bank’s evaluation of DGT program that has been done until this year, 87% of the employees who fit into the category of “excellent” have been able to fulfill their target in accordance with the individual development goals. In addition, more than 70% of employees who fit into this category and has completed the entire individual development program, have consistently managed to maintain the quality of excellent performance.

Number of Employee Based on Organization Level Organization Level

2015

Executive Vice President

3

4

Senior Vice President

18

Vice President

Number of Employee Based on Age Age

2015

> =55

1

0

21

50 - 54

57

50

31

28

45 - 49

123

109

Assistant Vice President

65

67

40 - 44

142

153

Senior Manager

69

65

35-39

169

162

Manager

90

102

30-34

212

222

Assistant Manager

92

92

25-29

167

204

Senior Officer

114

131

20-24

37

44

Officer

105

98

< 20

0

0

Senior Assistant

135

134

Total

908

944

Assistant

151

166

Non- Clerical

35

36

Total

908

944

Number of Employee Based on Position

Education Level

2016

2015

Branch manager/sub branch manager/division head/sub division head

119

117

2015

Relationship Officer

149

174

Master/PhD

56

63

Teller

71

71

Bachelor

602

611

Customer Service

64

67

Diploma

119

130

Operation Service Manager

49

51

High School

128

137

Back Office

421

426

3

3

Non-Clerk

35

38

908

944

Total

908

944

Junior High School Total



2016


Position

Number of Employee Based on Education Level


2016

Company Profile

2016

Bank’s front line staff, particularly Tellers and Customer Service, consists of contract and permanent employees.

Management Report

activities. In accordance with Bank Indonesia Regulation No. 13/25/ PBI/2011 dated December 9, 2011 regarding Prudential Principles for Outsourcing at Commercial Banks, the Bank has ensured that the employment status of the

As of December 31, 2016, the Bank has a total of 908 people including contract employees. This number decline by 3.81% compared to 944 people in 2015. The decline was in line with the Bank’s business and operational

2016 Performance

Employee Profile

99


Number of Employee Based on Terms of Office

Number of Employee Based on Status 2016

2015

Permanent Employees

874

892

469

Contract Employees

34

52

158

141

Total

908

944

11-15

98

90

16-20

51

54

>=21

41

34

Total

908

944

Terms of Office

2016

2015

<1

76

156

1-5

484

6-10

Employee Turnover Rate The Bank constantly makes an effort to balance the movement or employees’ turnover rate. The balance could be maintained by improving the efficiency of recruitment system and employee’s rotation. The improvement of human resources quality and proper placement of individuals in accordance with their talents and competencies, are the focus of the Bank in effectively managing their human resources. Human Resources Training and Development In terms of human resources development and competence improvement, QNB Indonesia is committed to providing equitable opportunity for employees at all levels. Learning framework is prepared by considering the needs of the organization, the needs of division/unit, also the needs of potential and employees competence development. The Bank always prioritizes the fulfillment of core and mandatory training program for all employees, which includes the introduction of the organization (induction), AML-CFT, Anti-Fraud, Code of Ethics, Risk Management, Product Knowledge, Service Excellence, as

100


Status

well as various corporate culture internalization program, namely QNB Values Festival and QNB Values Refreshment. E-learning modules for the topics of AML-CFT, Risk Management and General Banking, have been prepared to support the deepening of conventional class-room learning. In line with the implementation of “Single Captain at the Branch”, QNB University as the umbrella of internal accreditation program has implemented internal accreditation program of Funding and Lending for the entire Branch Manager and Relationship Manager. Modules provided in the internal accreditation of branch employees, are compiled in a comprehensive way, which includes control and regulatory modules (compliance, legal, risk management, operations, finance, HR), also business modules (product knowledge, selling skills), as well as professional development (leadership, soft skills). Method in branch internal accreditation, is a combination of interactive classroom courses, and enrichment with the e-learning method. The results of the evaluation in the internal accreditation program is used as material for the management to carry out the

process of coaching and mentoring to each accreditation participant. Implementation and development of internal accreditation program for branch employees will be continued in 2017, both for Branch Manager and Relationship Manager, also for the employees at the operation, namely Area and Branch Operation Support Manager, Teller, Customer Service, and Operation Staff. The Bank also continues to be committed to ensuring that employees have the certification required by regulators, such as Risk Management, AAJI and Waperd, as well as professional accreditation, such as Compliance Accreditation, Appraisal Accreditation, CFP, from a trusted accrediting agencies. Technical and functional training programs to support the improvement of employee competence and achievement of organization goals, are continuously implemented according to the needs of the work unit. In 2016, various trainings related to the aspect of operational, credit and legal, as well as bank reporting, are given to employees on an ongoing basis.

learning activity that also provides sharing sessions from experts in various fields, be it speakers from external or internal organization, which aims to increase knowledge, motivation, and competence of employees.

Management Report

effectiveness in performing the role as leader and people management skills. While employees at the managerial ranks get refreshment supervisory program on an ongoing basis. To promote a learning culture, two (2) Learning Forum sessions were held in 2016 to all employees. Learning forum is planned to become a regular program which serves as a fun

2016 Performance

In order to support the effectiveness of class-room learning and accreditation, coaching and mentoring programs also continue to be strengthened. Top management (Board of Directors, Division Head, Subdivision Head) is equipped with the skills to conduct effective coaching and also get refreshment coaching program regularly to improve the

The following table describes the implementation of training and development programs in 2016.

Training and Development Programs Summary

Numbers of Participants Total Learning Hours Average Learning Hours/Employee Mandays ≥ 3 Days

Total training realization cost in 2016 amounted to Rp18,865,239,264 with the average hours of learning per employee

Realisasi 2014

222

198

192

8,842

5,064

2,998

7,129.5

5,586

3,431

7.85 hari/karyawan

5.92 hari/karyawan

3.8 hari/karyawan

85.68%

72.88%

82.5 %

98%

98%

92.72%

all employees obtained selfdevelopment and improvement of the necessary competence, by maintaining Training Distribution of 99.2%.

is 7.85 days, increased from the previous year of 5.92 days/ employee. The Bank remains committed to ensuring that


Training Distribution

Realisasi 2015

Company Profile

Numbers of Program

Realisasi 2016

Data of Training Distribution % TD 2016

% TD 2015

% TD 2014

488

481

98.6%

99.23%

95.38%

IT & Digital Banking

23

23

100.0%

100.00%

95.38%

Network & Distribution

459

454

98.9%

99.00%

6

4

66.7%

100.00%

CEO

47

46

97.9%

83.72%

-

1

1

100.0%

-

Audit

13

12

92.3%

100.00%

100.00%

Corporate Communication

10

10

100.0%

70.00%

90.00%

Finance & Accounting Strategic Planning & Change

16

16

100.0%

76.00%

100.00%

Management Office

7

7

100.0%

100.00%

100.00%

CBD

Product Development



Training Distribution (TD) 2016


Total Employees 2016

Directorate/Division

97.22%

101


Total Eployees 2016

Training Distribution (TD) 2016

% TD 2016

% TD 2015

% TD 2014

23

23

95.7%

100.00%

96.00%

-

1

1

100.0%

-

Compliance & Procedure

13

13

100.0%

100.00%

Corporate Secretary

3

3

66.7%

100.00%

Legal

6

6

100.0%

100.00%

E-Banking & Financial Inclusion

37

37

100.0%

90.00%

100%

Human Resources

49

49

100.0%

100.00%

97.73%

-

9

9

100.0%

HRBP & Organization Development

11

11

100.0%

100.00%

97.73%

Learning & Development

29

29

100.0%

69

69

98.6%

99.30%

98.74%

General Services

27

27

100.0%

97.00%

98.74%

Operations

42

42

97.6%

100.00%

Retail Banking

34

34

97.2%

100.00%

-

1

1

100.0%

-

Alternate Channel

26

26

96.3%

100.00%

QNB First

7

7

100.0%

100.00%

Risk

123

119

96.7%

99.13%

-

8

8

100.0%

-

Commercial Credit

19

19

100.0%

95.00%

Corporate Credit Risk & Credit Administration

32

31

96.9%

100.00%

Retail Banking Credit Review

55

52

90.6%

100.00%

Risk Management

6

6

100.0%

100.00%

SME Credit Review

3

3

100.0%

100.00%

38

38

100.0%

97.73%

-

7

7

100.0%

-

Client Services

15

15

100.0%

100.00%

Commercial Banking

5

5

100.0%

98.00%

Corporate Banking

2

2

100.0%

80.00%

Structured Finance & Advisory

1

1

100.0%

100.00%

Treasury

8

8

100.0%

100.00%

Grand Total

908

901

99.2%

98.00%

Directorate/Division Compliance

Operations

Wholesale Banking

102


96.00%

95.47%

95.47%

96.84%

96.84%

94.2%

94.2%

92.72%

2016 Performance

Realization of Learning Framework

Program

2016

2014

∑ Program

∑ Participants

∑ Program

∑ Participants

∑ Program

∑ Participants

Mandatory/Core Program

7

3898

9

2457

7

166

B.

Accreditation & Certification

15

1788

10

392

8

346

C.

Technical/Functional Training

58

2391

49

2329

32

1544

D.

Leadership & Professional Development

10

825

11

427

2

13

E.

Talent Development Program

5

30

4

8

1

11

F.

Learning Forums

112

1935

100

144

122

878

The Bank also has added e-learning modules, so that there are four e-learning programs on the core modules of the program, namely the APU-PPT Basic, APUPPT Refreshment, Risk Management, and General Banking.

The detail of Core Program implementation during 2016 is as follows.


In addition to “Professionalism with Integrity” which reflects one of the company’s values, the Bank also implemented a program to internalize the values of the corporate culture, namely through QNB Values Festival and QNB Values Refreshment. The corporate values internalization program of QNB Values Festival


was not only intended for all employees, but also to involve multiple stakeholders together to also understand the importance of applying the values of the organization and to improve cooperation.

Company Profile

In 2016, the Bank required all employees to attend the “Professionalism with Integrity” program. The program emphasized the importance of integrity in carrying out duties and responsibilities in all their functions, in which the program includes Refreshment

of AML-CFT, Code Ethics & Conduct, as well as the Anti-Fraud Awareness. In this program, the Board of Directors and all employees attested to the code of ethics, as well as the signing of anti-fraud declaration, as a commitment to upholding professionalism and integrity.

Management Report

A.

A. Core Program Core Program is a mandatory training program for the employees, carried out in compliance with provisions from regulators or based on the directives from the management which is implemented to encourage the achievement of the company’s vision and mission.

2015



103


Detail of Core Program Implementation

Program

2016

2015

2014

∑ Program

∑ Participants

∑ Program

∑ Participants

∑ Program

∑ Participants

APU-PPT (Basic & Refreshment)

11

493

54

1026

43

813

Anti Fraud Awareness

27

795

8

190

5

66

Code of Ethics & Conduct

36

860

-

-

-

-

QNB Values

29

1152

-

443

-

Business Continuity Management

7

142

-

90

164

Service Excellence

19

377

-

206

109

Risk Awareness

4

79

-

-

B. Certification and Accreditation Program The Bank is fully committed to ensuring its employees have the competences required in their positions and work functions through the implementation of certification and accreditation program. In total, there were 4 (four) new accreditation programs compared to the previous year. Thus, the overall certification and accreditation programs implemented by the Bank as of 2016 amounted to 13 programs. In 2016, the focus of accreditation/ certification programs include: A. Technical & Professional Accreditation 1. Credit Skill Assessment In cooperation with international certification agency, OMEGA, the Bank re-implemented “Credit Skill Assessment” certification to ensure that employees in the

104


wholesale business unit, have the knowledge and skills required to perform their duties with full responsibility. Currently 83% up to the managerial level, in the business and Risk Reviewer has participated in this credit certification. 2. Certified Financial Planner CFP is a professional certified financial planner with international license, who has been recognized and awarded by the board of standard financial planners in Indonesia. In 2016, all employees who have sales target of Wealth Management were invited to attend the first module of the program. The next module will be given in stages as self-development and an appreciation for the performance of employees.

-

-

B. Branch Internal Accreditation 1. Branch Manager Internal Accreditation After undergoing 40hour modules of “Branch Effective Management” in 2015 which contains a control and regulatory module (Overview of Retail Banking, Branch Leadership, Risk Management, Compliance, Audit, IT, Operation, Legal, and Finance Accounting), in 2016, the participants of Branch Manager Accreditation attended 32 hours of Effective Business & Sales Management Module, which includes a comprehensive product knowledge, as well as leadership development programs, both service and sales leadership.

Technical & Functional Training Program Program

2016

2015

2014

∑ Participants

∑ Program

∑ Participants

∑ Program

∑ Participants

103

2,620

55

2,329

58

2,265

External Training Program

97

172

100

144

89

156

Total Programs

200

2,792

155

2,473

147

2,421

Program


∑ Program

In-House & Internal Training


2. Relationship Manager Internal Accreditation Branch internal accreditation program for the retail segment

Company Profile

3. QNB First Academy As a continuation of QNB First Academy program that had initiated in the previous year, in 2016, post-training program was conducted in the form of 2 (two) direct meetings of formal coaching and

C. Technical & Functional Training Program Employees are continuously encouraged to improve the technical competence related to their work, both through in-house and internal training programs, as well as external training. In 2016, 200 technical and functional training programs were carried out and attended by 2.792 employees.

Management Report

mentoring which were guided by expert speakers in the field of wealth management. Participants of QNB First Academy reviewed the performance and productivity, and formulated an action plan to be able to optimally implement the knowledge and skills acquired during the QNB First program.

has been implemented for Relationship Manager (RM), both Funding and Lending Relationship Manager. Class-room program has approximately 45 hours for RM Lending which includes 16 materials, and 17 materials for RM Lending. Learning and evaluation will also be provided through e-learning methods to support the class-room learning.

E-learning methods are also used to encourage continuous learning and fulfillment of minimum expected value. Participants are required to meet a minimum score of 70 in each module. The results of the evaluation/ assessment in this program are used as an essential material for Management, related division head, as well as the area manager to implement coaching and mentoring, as well as follow-up development program, both for the team and individual.

2016 Performance



105


106

Some technical training programs that become the main focus in 2016, among others, as follows. 1. Credit In addition to credit training which serves as refreshment related to credit process and analysis, as well as credit systems and procedures, credit training with experienced speakers was also given focusing on the aspect of “Problem Loan & Recovery”, also “Credit Restructuring”, both for the employees in the retail and wholesale business segment. On the credit administrative support unit, the training was conducted with a focus on Loan Agreement Syndication, the legal aspects of lending. Basic Credit


Knowledge Training for 12 (twelve) days for MDP participants were also given to complement junior employees who will get exposure in the field of credit in order to have adequate knowledge related to the field of credit. 2. Operation Excellence The Bank continues to strengthen training for employees in the operation function, among others, through the trainings of Core Banking System, Mini Bank, Document Verification & Counterfeit Money Detection, DHN & Clearing rejection, State Revenue Module (MPN). A total of 37 training programs were followed by 479 employees throughout 2016.

The Bank continuously strives to improve the effectiveness of training for various modules operation with the implementation of pre-training, On-the-Job Training (OJT) before the core banking system class-room courses, the learning method via video-call, also the development of SOP tutorial video as a means of learning support.

3. Legal Knowledge Training related to legal knowledge is sustainably implemented for business and operational employees in branches. Different from the previous year’s class-room based training program, the program in 2016 was more focused on the

3. Business English With the demands of global communication, English language training classes were held for conversation learning and Legal English for employees in the Directorate of Legal & Compliance. Business Banking Module in e-learning has also been completed to encourage the English independent learning in 2017.

107




E. Talent & Management Development Program 1. Management Development Program (MDP) MDP is training program especially tailored for fresh graduate with potentials and talents which will be developed into candidates of the Bank’s future leaders. At the end of 2016,


1. Leadership Program Managing Team Program for the division and subdivision head is focused on strengthening the role of manager as leader and coach to encourage the development of subordinate’s competence. Commitment to improving coaching culture is marked by the participation of the Board of Directors in a coaching training program. Meanwhile, Managing Others Program, for employees at the level of supervisors and managers is focused on optimizing the role of supervisor and manager to encourage a better work planning, also

2. Project Management The need to encourage the process of improvement in various work units served as the basis of 3 (three) batches of Project Management Fundamental. The training was expected to also encourage the implementation of the “Innovation” which is one of the corporate culture.

Company Profile

5. Industrial Relations The Bank believes the importance of managers (division head, sub division head, area manager) in understanding the aspect of Industrial Relations in order to play a role as an effective leader with attention to basic aspects of labor regulation. This is the basis for the implementation of Industrial Relations for Leaders training,

D. Leadership & Professional Development The Bank continues to develop various Leadership & Professional Development programs for employees. In 2016, there were 8 Leadership & Professional Development programs. This number increased from 2015 of 9 programs, and in 2014 which were only 3 programs. The Leadership & Professional Development programs carried out during 2016, among others, as follows:

better implementation in the work unit.

Management Report

4. Service Excellence The services training program in 2016 was focused on mental refreshment and implementation of services mindset as well as “Professional Image and Grooming”, for employees who deal directly with customers. Service training programs were held for 19 batches and attended by 377 employees.

facilitated by competent speakers in the field of Industrial Relation.

2016 Performance

process of discussion, coaching and mentoring of the legal division. Legal Division also initiated the implementation of the legal forum with discussion on the legal aspects in the field of credit, by inviting a variety of practitioners and competent speakers for knowledge sharing.


seven participants have completed the MDP learning for three years, and ready to occupy various positions in the work unit. In addition, there are 22 MDP participants who are still following an intensive learning program, through a variety of methods, both class-room, coaching, as well as on the job training. Through accelerated and intensive learning program, MDP participants are expected to have reliable competencies, both on technical and nontechnical aspects of banking in order to create added values for the Bank, and also encourages continuous improvement in work units where participants are placed. 2. Talent Development Program (MDP) The Bank is committed to encouraging coaching and mentoring programs, both from internal sources, and in cooperation with experts from external sources. Coaching and mentoring program is expected to improve the effectiveness of knowledge transfer and implementation in the field. Coaching and

108


mentoring programs are implemented in structured manner for credit wholesale and retail banking collection. In 2016, the Bank also continued to encourage learning through benchmarking and sharing the bestpractice from QNB Group, where several employees participated in the sharing of retail segment bestpractice at FinansBank Turkey which is part of QNB Group. F.

Learning Forum The Bank encourages the implementation of various learning forum for employees, either to hone technical skills (hard skills) and also to build character, mindset, work ethic, attitude and other supporting skills (soft skills). This is done to ensure that employees always “agile” and effective to continue to learn the dynamics of change that continue to occur inside and outside the organization. In 2016, two learning forums or open seminars for employees were held by inviting external and internal speakers. In addition, the townhall activities, sharing sessions, and workshops as a learning medium, were continuously carried out by observing trends and internal needs of the company.

Human Resources Strategy for 2017 In general, 2017 will see the Bank continue to support its employees achieve professional excellence and leadership effectiveness through internalization of corporate values, leadership-building trainings, and competence development programs as the major cornerstones for further projects on human resources development. As part of this strategy, the Bank’s work plan in 2017 include: • Continue the implementation of internal accreditation program with Operational Accreditation which focuses on improving employees engaged in the Bank’s operational activities such BOSM/SS, Teller, and Customer Service. • Continue and improve the implementation of talent management program in relation to succession plan and sustainable leadership. • Improve performance management and overall HR system in accordance with the organization growth.

Financial Review 2016 Performance Management Report Company Profile

The financial statements are audited by Public Accounting Firm (PAF) of Purwantono, Sungkoro & Surja (a member of Ernst & Young Global Limited) appointed by the Bank and has obtained unqualified opinion in all material respects.

Elaborated discussion and analysis on the Bank’s financial performance will be detailed in the Comprehensive Income Statement, Financial Position Report, and Cash Flow Statement.


The Bank’s financial performance discussion and analysis are prepared based on the financial statement of PT Bank QNB Indonesia Tbk which ended at December 31, 2016, in accordance with with the guidelines of Indonesian Financial Accounting Statements Standards (PSAK) and Accounting and Reporting Guidelines for Indonesian Banking Industry.


Financial Performance Review



109


Statement of Comprehensive Income (In Million Rp) Growth Description

2016

2015

Total

Percentage

OPERATING INCOME AND EXPENSE 2,048,592

2,040,582

8,010

0.39%

(1,532,175)

(1,351,331)

180,844

13.38%

516,417

689,251

(172,834)

(25.08%)

123,490

194,258

(70,768)

(36.43%)

72,097

13,434

58,663

436.68%

4,075

4,826

(751)

(15.56%)

199,662

212,518

(12,856)

(6.05%)

Personnel expenses

(397,332)

(375,743)

(21,589)

5.75%


(243,962)

(225,106)

(18,856)

8.38%


(929,519)

(87,472)

(842,047)

962.65%

(7,877)

(8,175)

298

(3.65%)

(1,578,690)

(696,496)

(882,194)

126.66%

(862,611)

205,273

(1.067.884)

(520.23%)

(3,339)

3,662

(7,001)

(191.18%)

(865,950)

208,935

(1,074,885)

(514.46%)

215,617

(52,889)

268,506

507.68%

(650,333)

156,046

(806,379)

(516.76%)

Interest income Interest expense NET INTEREST INCOME OTHER OPERATING INCOME Fees and commission Gain on foreign exchange transaction - net Others Total other operating income OTHER OPERATING EXPENSES

Others Total other operating expenses (LOSS) INCOME FROM OPERATION NON-OPERATING (EXPENSES) INCOME - NET (LOSS) INCOME BEFORE INCOME TAX EXPENSE Income tax benefit (expense) (LOSS) INCOME FOR THE YEAR OTHER COMPREHENSIVE INCOME Items that will be classified to profit or loss: Fair value changes of available for sales securities Income tax relating to component of other comprehensive income

43

77

(34)

(44.16%)

(11)

(19)

8

(42.11%)

32

58

(26)

(44.83%)

Items that will not be classified to profit or loss: Actuarial gain on defined benefit plan Income tax relating to component of other comprehensive income

Other comprehensive gain, net of tax Total comprehensive (loss) income for the year

110


4,716

4,078

638

15.64%

(1,179)

(1,019)

160

15.70%

3,537

3,059

478

15.63%

3,569

3,117

452

14.50%

(646,764)

159,163

(805,927)

(506.35%)

2016 Performance

Net Interest Income (In Million Rp) 2016

Description Interest income Net interest income

The Bank posted a decline in net interest income by 25.08%

Total

Percentage

2,048,592

2,040,582

(1,532,175)

(1,351,331)

180,844

13.38%

516,417

689,251

(172,834)

(25.08%)

from Rp689.25 billion in 2015 to Rp516.42 billion in 2016. The

8,010

0.39%

decline was primarily due to the decrease of total loans by 15.57%.

2016

Description Fees and commission Others Total other operating income

The Bank posted a decline in other operating income by 6.05% from Rp212.52 billion in 2015 to

Growth

2015

Total

Percentage

123,490

194,258

(70,768)

(36.43%)

72,097

13,434

58,663

436.68%

4,075

4,826

(751)

(15.56%)

199,662

212,518

(12,856)

(6.05%)

by 36.43% or amounted to Rp70.77 billion.

Rp199.66 billion in 2016. This decline was primarily derived from a decline of fees and commission

2016

Description


Other Operating Expenses (In Million Rp) Growth

2015

Total

Percentage

(397,332)

(375,743)


(243,962)

(225,106)

(18,856)

8.38%


(929,519)

(87,472)

(842,047)

962.65%

Total other operating expenses

The Bank posted higher other operating expenses in 2016 compared to 2015. Total other operating expenses at the end of 2016 stood at Rp1,578.69 billion, compared to the end of 2015

(21,589)

5.75%

(7,877)

(8,175)

298

(3.65%)

(1,578,690)

(696,496)

882,194

126.66%

which amounted to Rp696.50 billion, representing an increase of 126.66%. This significant increase was primarily due to the Bank’s decision to strengthen coverage against low quality loans

by increasing its provision for impairment losses on financial and non financial assets as much as Rp929.52 billion or increased by 962.65% compared to the previous year.


111


Personnel expenses

Others


Gain on foreign exchange transaction – net

Company Profile

Other Operating Income (In Million Rp)

Management Report

Interest expense

Growth

2015


Income from Operation (In Million Rp) Description

Growth

2015

2016

Percentage

Total

Net interest income

516,417

689,251

(172,834)

(25.08%)

Other operating income

199,662

212,518

(12,856)

(6.05%)

(1,578,690)

(696,496)

(882,194)

126.66%

(862,611)

205,273

(1.067.884)

(520.23%)

Other operating expenses (LOSS) INCOME FROM OPERATION

In 2016, the Bank recorded loss from operation amounted to Rp862.61 billion or declined by 520.23% compared to the income from operation booked in 2015

assets as much as Rp929.52 billion or increased by 962.65% compared to the previous year, thus resulting in significant increase of other operating expenses by 126.66%.

amounted to Rp205.27 billion. The decline was particularly derived from the Bank’s decision to increase its provision for impairment losses on financial and non financial

Non-Operating Expense – Net (In Million Rp) Description Gain on sale of fixed assets - net (Loss) Gain on foreign exchange translation - net Others NON-OPERATING (EXPENSES) INCOME - NET

The Bank posted non-operating expenses – net amounted to Rp3.34 billion or declined by 191.21% compared to the non-operating income – net booked at 2015 of Rp3.66 billion. The decline was primarily derived from the decline of foreign exchange revaluation.


Percentage

Total

463

41

422

1,029.26%

(5,137)

3,631

(8,768)

(241.47%)

1,355

(11)

1,346

(12,236.36%)

(3,339)

3,661

(7,000)

(191.21%)

(Loss) Income before Income Tax Expense In 2016, the Bank booked loss before income tax expense amounted to Rp865.95 billion or declined by 514.46% compared to the income before tax expense booked in 2015 of Rp208.94 billion. The decline was primarily derived from the increase of provision for impairment losses on financial and non financial assets by 962.65%. Income Tax Benefit (Expense) In 2016 the Bank gained Rp215.62 billion from the income tax benefit compared to the income tax expense of Rp52.89 billion in

112

Growth

2015

2016

2015. The income tax benefit was primarily due to operational loss booked by the Bank. (Loss) Income for the Year The Bank posted a loss for the year amounted to Rp650.33 billion in 2016 or declined by 516.76% compared to the income for the year booked at 2015 of Rp156.05 billion. The decline was primarily derived from the Bank’s operational loss on provision for impairment losses on financial and non financial assets.

2016 Performance Management Report Company Profile

Description Items that will be classified to profit or loss: Fair value changes of available for sales securities

Items that will not be classified to profit or loss: Actuarial gain (loss) on defined benefit plan Income tax relating to component of other comprehensive income

Total comprehensive (loss) income for the year

The Bank’s recorded other comprehensive gain amounted to Rp3.57 billion in 2016, increased by 14.50% from Rp3.12 billion in 2015. This increase was primarily derived from actuarial gain on defined benefit plan.

Percentage

43

77

(34)

(44.16%)

(11)

(19)

8

(42.11%)

32

58

(26)

(44.83%)

4,716

4,078

638

15.64%

(1,179)

(1,019)

160

15.70%

3,537

3,059

478

15.63%

3,569

3,117

452

14.50%

(646,764)

159,163

(805,927)

(506.35%)

Total Comprehensive (Loss) Income for the Year The Bank recorded total comprehensive loss for the year amounted to Rp646.76 billion in 2016 or declined by 506.35% compared to the total

comprehensive income for the year 2015 of Rp159.16 billion. This decline was primarily derived from the Bank’s operational loss on provision for impairment losses on financial and non financial assets.


113


Other comprehensive gain (loss), net of tax

Total


Income tax relating to component of other comprehensive income

Growth

2015

2016


Other Comprehensive Income (In Million Rp)


Statement of Financial Position (In Million Rp) Description

Growth

2015

2016

Total

Percentage

Assets Cash Current accounts with Bank Indonesia Current accounts with other banks Related party Third parties Placements with Bank Indonesia and other banks Derivative receivables Acceptance receivables Related party Third parties Securities purchased under agreement to resell

51,260

45,432

5,828

12.83%

1,635,116

1,710,947

(75,831)

(4.43%)

193

172

21

12.21%

80,622

30,974

49,648

160.29%

2,230,074

2,111,813

118,261

5.60%

550

2,921

(2,371)

(81.17%)

-

24,995

(24,995)

(100.00%)

22,193

36,826

(14,633)

(39.74%)

471,350

269,117

202,233

75.15%

Loans Related party

1,895

3,434

(1,539)

(44.82%)

Third parties

18,286,019

20,826,610

(2,540,591)

(12.20%)

Sub-total

18,287,914

20,830,044

(2,542,130)

(12.20%)

Less: allowance for impairment losses

(736,726)

(41,740)

(694,986)

1,665.04%

17,551,188

20,788,304

(3,237,116)

(15.57%)

Securities

571,862

325,444

246,418

75.72%

Prepayments

188,969

108,443

80,526

74.26%

Deferred tax assets, net

172,105

-

172,105

100.00%

Fixed assets net of accumulated depreciation of Rp157,163 and Rp126,483 as of December 31, 2016 and 2015

144,762

110,577

34,185

30.92%

41,176

45,670

(4,494)

(9.84%)

1,019,382

-

1,019,382

100.00%

Net

Intangible assets net of accumulated amortization of Rp37,011, Rp30,294 as of December 31, 2016 and 2015 Foreclosed assets Other assets, net TOTAL ASSETS

191,900

146,014

45,886

31.43%

24,372,702

25,757,649

(1,384,947)

(5.38%)

240,658

337,357

(96,699)

(28.66%)

LIABILITIES AND EQUITY LIABILTIES Liabilities payable on demand Deposits from customers Related party Third parties Deposits from other banks Related party Third parties Acceptances payable Related party Third parties Derivatives payable

114


64,415

1,040,738

(976,323)

(93.81%)

19,280,547

17,468,270

1,812,277

10.37%

404,797

2,688,691

(2,283,894)

(84.94%)

258,001

490,420

(232,419)

47.40%

-

24,995

(24,995)

(100.00%)

22,193

36,826

(14,633)

(39.74%)

12,890

661

12,229

1,850.08%

Income tax payable

Growth

2015

2016

2016 Performance

Description

Percentage

Total 2,401

97,407

80,619

16,788

20.82%

-

42,324

(42,324)

(100.00%)


198,345

155,213

43,132

27.79%


315,520

-

315,520

100.00%

Obligation for post-employment benefits Deferred tax liabilities, net

Subordinated loan TOTAL LIABILITIES

(2,401)

(100.00%)

-

964,950

(964,950)

(100.00%)

20,894,773

23,333,465

(2,438,692)

(10.45%)

2,189,287

2,189,287

-

-

Management Report

-

EQUITY

Additional paid-in capital – net Disclosed reserve Other comprehensive loss

(24,570)

(24,570)

-

-

1,700,509

-

1,700,509

100.00%

(12,875)

(16,444)

3,569

(21.70%)

5,396

4,396

1,000

22.75%

Retained earnings (deficit): Appropriated

TOTAL LIABILITIES AND EQUITY

(379,818)

271,515

(651,333)

(239.89%)

3,477,929

2,424,184

1,053,745

43.47%

24,372,702

25,757,649

(1,384,947)

(5.38%)

2016

2015

Assets (In Million Rp) Description

Current accounts with Bank Indonesia Current accounts with other banks Related party Third parties Placements with Bank Indonesia and other banks Derivative receivables

Third parties Securties purchased under agreement to resell

51,260

45,432

5,828

12.83%

1,635,116

1,710,947

(75,831)

(4.43%)

193

172

21

12.21%

80,622

30,974

49,648

160.29%

2,230,074

2,111,813

118,261

5.60%

550

2,921

(2,371)

(81.17%)

-

24,995

(24,995)

(100.00%)

22,193

36,826

(14,633)

(39.74%)

471,350

269,117

202,233

75.15%

Loans Related party

1,895

3,434

(1,539)

(44.82%)

Third parties

18,286,019

20,826,610

(2,540,591)

(12.20%)

Sub-total

18,287,914

20,830,044

(2,542,130)

(12.20%)

(736,726)

(41,740)

(694,986)

1,665.04%

Less: allowance for impairment losses Net

17,551,188

20,788,304

(3,237,116)

(15.57%)

Securities

571,862

325,444

246,418

75.72%

Prepayments

188,969

108,443

80,526

74.26%


172,105

-

172,105

100.00%


115


Acceptance receivables Related party

Percentage

Total


Cash

Growth


Unappropriated EQUITY, NET

Company Profile

Share capital – par value of Rp250 (full amount) per share Authorized – 32,000,000,000 (full amount) shares as of December 31, 2016 and 2015 Issued and fully paid – 8,757,145,997 (full amount) shares as of December 31, 2016 and 2015, 6,158,330,518 (full amount)


Description

2016

Growth

2015

Total

Percentage

Securities

571,862

325,444

Prepayments

188,969

108,443

80,526

74.26%


172,105

-

172,105

100.00%

Fixed assets net of accumulated depreciation of Rp157,163 and Rp126,483 as of December 31, 2016 and 2015

144,762

110,577

34,185

30.92%

41,176

45,670

(4,494)

(9.84%)

Intangible assets net of accumulated amortization of Rp37,012, Rp30,294 as of December 31, 2016 and 2015

246,418

75.72%

Foreclosed assets

1,019,382

-

1,019,382

100.00%

Other assets, net

191,900

146,014

45,886

31.43%

24,372,702

25,757,649

(1,384,947)

(5.38%)

TOTAL ASSETS

The Bank’s total assets in 2016 declined by 5.38% from Rp25.76 trillion at the end of 2015 to Rp24.37 trillion. The decrease was especially due to a decrease on deposits with other banks in line with the decline in loans.

the end of 2016. An increase was due to the Bank liquidity excess particularly placed in placement with Bank Indonesia.

Placements with Bank Indonesia and Other Banks The Bank recorded an increase of total placements with Bank Indonesia and other banks by 5.60%, from Rp2.11 trillion at the end of 2015 to Rp2.23 trillion by

Loans - Net (In Million Rp) Description

2016

Growth

2015

Total

Percentage

Related party

1,895

3,434

(1,539)

(44.82%)

Third parties

18,286,019

20,826,610

(2,540,591)

(12.20%)

Sub-total

18,287,914

20,830,044

(2,542,130)

(12.20%)

(736,726)

(41,740)

(694,986)

1,665.04%

17,551,188

20,788,304

(3,237,116)

(15.57%)

Less: allowance for impairment losses Loans - net

The Bank recorded a decrease of total loans – net as much as 15.57%, from Rp20.79 trillion at the

116


end of 2015 to Rp17.55 trillion by the end of 2016. This decrease was mainly due to the loan repayment

which exceeds the amount of loans disbursed in line with the Bank’s prudent principle to provide loan

2016 Performance

Liabilities (In Million Rp) Description Liabilities payable on demand

Third parties Deposits from other banks Related party Third parties

Percentage

240,658

337,357

(96,699)

(28.66%)

64,415

1,040,738

(976,323)

(93.81%)

19,280,547

17,468,270

1,812,277

10.37%

404,797

2,688,691

(2,283,894)

(84.94%)

258,001

490,420

(232,419)

(47.40%)

-

24,995

(24,995)

(100.00%)

22,193

36,826

(14,633)

(39.74%)

Acceptances payable Related party Third parties

Total

12,890

661

12,229

1,850.08%

Income tax payable

-

2,401

(2,401)

(100.00%)

97,407

80,619

16,788

20.82%

-

42,324

(42,324)

(100.00%)


198,345

155,213

43,132

27.79%

Marketable Securities Issued

315,520

-

315,520

100.00%

Obligation for post-employment benefits Deferred tax liabilities, net

TOTAL LIABILITIES

The Bank recorded a decrease of total liabilites as much as 10.45%, from Rp23.33 trillion at the end of

-

964,950

(964,950)

(100.00%)

20,894,773

23,333,465

(2,438,692)

(10.45%)

2015 to Rp20.89 trillion by the end of 2016. The decline was primarily

due to the decline of deposits from other banks.

Description Related parties

2016

Growth

2015

Total

Percentage

64,415

1,040,738

(976,323)

(93.81%)

Third parties

19,280,547

17,468,270

1,812,277

10.37%

Total deposits from customers

19,344,962

18,509,008

835,954

4.52%

Rp18.51 trillion. The increase was due to the CASA program through exhibitions in shopping malls in


In 2016, deposits from customers increased by 4.52% to Rp19.34 trillion compared to 2015 of

major cities thereby increasing customer saving account.



Deposits from Customers (In Million Rp)


Subordinated loan

Company Profile

Derivatives payable

Management Report

Deposits from customers Related party

Growth

2015

2016

117


Deposits from Other Banks (In Million Rp) Description Related parties

404,797

Third parties

258,001

Total Deposits from Other Banks

662,798

Deposits from other banks declined by 79.15% or amounted to Rp662.80 billion compared to

Growth

2015

2016

Total

2,688,691

Percentage

(2,283,894)

(84.94%)

490,420

(232,419)

(47.40%)

3,179,111

(2,516,313)

(79.15%)

short term loans from other banks.

2015 of Rp3.18 trillion. The decline was due to the Bank’s liquidity are sufficient that Bank doesn’t need

Retained Earnings (In Million Rp) Description Appropriated

Growth

2015

2016

Total

Percentage

5,396

4,396

1,000

22.75%

Unappropriated

(379,818)

271,515

(651,333)

(239.89%)

Retained Earnings

(374,422)

275,911

(650,333)

(235.70%)

The Bank’s retained earnings in 2016 declined by 235.70% from profit Rp275.91 billion at the end

an operating loss for the current year.

of 2015 to loss Rp374.42 billion at the end of 2016. The decrease especially was due to Bank posted

Equity (In Million Rp) Description Share capital Additional paid-in capital – net Disclosed reserve Unrealized gain (loss) from AFS securities Actuarial gain (loss) net of tax

Growth

2015

2016

Total

Percentage

2,189,287

2,189,287

-

-

(24,570)

(24,570)

-

-

1,700,509

-

1,700,509

100.00%

32

-

32

100.00%

(12,907)

(16,444)

3,537

(21.51%)

Retained earnings

(374,422)

275,911

(650,333)

(235.70%)

EQUITY, NET

3,477,929

2,424,184

1,053,745

43.47%

Equity increased by 43.47% to Rp3.48 trillion compared to

118


the 2015 of Rp2.42 trillion. The increase was due to additional

paid in capital in form of disclosed reserve.

2016 Performance

Cash Flow (In Million Rp) Description Cash Flows from Operating Activities

Growth

2015

2016

Total

Percentage

(2,003,503)

1,441,238

(71.94%)

(318,667)

(129,151)

(189,516)

146.74%

Cash Flows from Financing Activities

1,052,422

964,950

87,472

9.06%

Net Increase (Decrease) in Cash and Cash Equivalent

171,490

(1,167,704)

1,339,194

(114.69%)

Foreign Exchange Income (Loss)

(73,563)

221,113

(294,676)

(113.27%)

Cash and Cash Equivalents, at the Beginning of the Year

3,899,338

4,845,929

(946,591)

(19.53%)

Cash and Cash Equivalents, at the End of the Year

3,997,265

3,899,338

97,927

2.51%

Cash Flows from Financing Activities The net cash flow from financing activities for the fiscal year end December 31, 2016 amounted to Rp1,052.42 billion, up by 9.06% compared to 2015 at Rp964.95 billion. This was mainly due to the additional paid in capital.

Financial Ratio (In Million Rp) Financial Ratio (%)

2016

2015


Cash Flows from Investment Activities The net cash flow used for investment activities for the fiscal year end December 31, 2016 amounted to Rp318.67 billion, up by 146.74% compared to 2015 at Rp129.15 billion. This was mainly due to the decrease of marketable securities.

Company Profile

Cash Flows from Operating Activities Net cash flow used for operating activities for the year ended December 31, 2016 reached Rp562.27 billion, declined by 71.94% from 2015 at Rp2.00 trillion. This was primarily due to the decrease from deposit from other banks.

Management Report

(562,265)

Cash Flows from Investment Activities

% Growth

Capital 0.06

Productive assets & non productive assets (Non-performing assets) to total productive assets & non productive assets

5.16

2.13

(3.03)

Non-performing productive assets to total productive assets

5.38

2.13

(3.25)

Financial asset ckpn to productive assets

3.16

0.16

2.94

Gross npl

6.86

2.59

(4.27)

Net npl

2.94

2.39

(0.50)

ROA

-3.34

0.87

(4.21)

ROE

-31.96

7.50

(39.46)

NIM

2.25

3.08

(0.95)

137.94

90.95

(47.49)

Productive Assets

Profitability

BOPO


119


16.18


16.46

Capital Adequacy Ratio (CAR)


Financial Ratio (%)

2016

2015

% Growth

Liquidity LDR

94.54

112.54

(18)

Minimum Rupiah demand deposit

7.24

7.59

(0.35)

Minimum foreign currency demand deposit

8.37

8.54

(0.17)

Net Open Position

0.25

0.26

(0.01)

Compliance

*Note: the financial ratio figures presented is for the Bank only. In 2016, the Bank has been successful in improving its financial performance as reflected in the financial ratio which demonstrated better capital adequacy and liquidity detailed as follow: • Capital Adequacy • Liquidity Solvability and Collectability The Bank’s ability to meet its obligations both long term and short term is reflected in several ratios including liquidity ratio, solvency ratio, and profitability ratio as presented earlier in the Financial Ratio section. In terms of solvability, the Bank CAR ratio rose at 16.46%, which remained high although lower than the previous year. Liquidity, in similar note, was relatively stable throughout 2016 with LDR rose to 95.54% in line with the loan expansion and tightened banking liquidity condition against economic slowdown. In terms of collectability, NPL (net) was kept healthy under 2.94% as of the end of 2016, which demonstrated positive outcome of the management’s efforts to maintain asset quality. The encouraging achievement also comes as a result of consistent implementation of prudent banking principles, strengthened risk management, and improved

120


credit management system as well as stricter monitoring of existing debtors. Capital Structure and Management Policy on Capital Structure In correspondence with the Regulation of Financial Service Authority No.34/POJK.03/2016 dated September 22, 2016, the Bank’s capital structure consists of core capital (Tier I) and supplementary capital (Tier II). Core capital comprised of paid-up share capital and additional capital reserves while supplementary capital refers to capital instrument in the stock form or other capital instrument that fulfill the requirements as well as general reserves of PPA over productive assets. In the assessment of capital adequacy, the Bank uses Standardized Approach to measure capital adequacy for Credit Risk and Market Risk, whereas for Operational Risk, the Bank uses the Basic Indicator Approach. This assessment refers to the provisions of Circular Letter of Financial Service Authority No. 42/ SEOJK.03/2016 dated September 28, 2016, Bank Indonesia Circular Letter No. 14/21/DPNP dated July 18, 2012 and Circular Letter of Bank Indonesia No. 11/3/DPNP dated January 27, 2009.

The disclosure of the Bank’s capital structure is pursuant to the Regulation of Financial Service Authority No.32/POJK.03/2016 and the Circular Letter of Financial Service Authority No.43/SEOJK.03/2016 on the Transparency and Disclosure of Bank’s Report and the Regulation of Financial Service Authority No.29/ POJK.04/2016 on the Annual Report of Commercial Bank and certain Annual Report submitted to Bank Indonesia and will be presented in the discussion of Risk Management in this Annual Report. In line with regulatory compliance minimum requirement on capital, thus the Bank Suplementary Capital has terminated by USD70 million and be converted to disclosed reserved, otherwise has received another USD56 million as disclosed reserve, thus total disclosed reserve as amounted to USD126 million is counted as tier I capital then the Capital Adequacy Ratio (CAR) has increased from 16.18% in 2015 to 16.46% in 2016 and still remains above the minimum requirement of capital required (measured at 8% of risk weighted assets).

Employee/Management Share Ownership Program During 2016, the Bank did not have employee and/management share ownership program (ESOP/MSOP). Use of Proceeds from Public Offering In 2016, the Bank did not perform share and bond public offering in the stock exchange so that there was no proceeds from public offering in the Company’s Equity.


121


Commitment and Contingency As of December 31, 2016, the Bank has entered commitment and contingencies regarding unused loan facilities and Letters of Credit (L/C) with various parties as detailed below:


In 2017, the Bank sets loan growth target of approximately 30%. The contribution of SME and Retail business segments are projected to increase in 2017, sustained by excellent products that will be launched throughout 2017. While the contribution of the Wholesale segment will remain the largest portion of the Bank’s business. Along with this, the Third Party Funds is also expected to grow at more or less the same percentage over the previous year. The Bank will also continue to improve the low cost fund ratio (CASA) through the development of products and features for the convenience of the saving customers such as mobile banking, internet banking, etc.


Although the Bank’s loans in 2016 decreased, the Bank has established a more significant Allowance for Impairment Losses (CKPN) of Loan in 2016, thus the loan loss coverage of CKPN against Allowance for Uncollectible Accounts (PPA) at the end of 2016 increased to 88% of the target of 40%. Also in late 2016, the Bank could maintain net NPL at 2.94%, below the average banking industry.

For 2017, the Bank has prepared projection and target 2017 by applying the prudent principle in maintaining the portion of productive assets, liquidity management, and the strengthening of the capital side.

Dividend Policy The Bank established dividend payout through Annual General Meeting of Shareholders (AGM). The amount and distribution of dividend is proposed by taking into account various aspects related to the Bank’s business performance and capital strength. In 2016, the Bank through AGM held on February 16, 2016, approved the use of Bank’s net profit in financial year 2015 amounting to Rp155,045,208,672 to strengthen Bank’s capital adequacy, and thus no dividend distribution.

Company Profile

Comparison between Targets and Actual Results in 2016 and Projections For 2017 Throughout 2016, Indonesia banking experienced a slowdown in which banking credit condition suffered a great deal of pressure. This is due to unstable national macroeconomic condition. Therefore, in 2016, the Bank focused on increasing the loan loss coverage by increasing the Allowance for Impairment Losses (CKPN) of Loan. The Bank has and always continues to improve a credit provision and monitoring system to maintain a lower or better NPL than the target set.

In 2016, the Bank’s liquidity is quite well as indicated by the Loan-toDeposit ratio (LDR) amounted to 94.5% or better than the target of 96.5%, Liquidity Coverage ratio (LCR) amounted to 92.01% or better than the target of 70%, as well as the Bank’s Statutory Reserves in Rupiah amounted to 7.24% or higher than the provision at 6.50%

Material Information and Facts after Accountant’s Report There was no important event that has a significant influence or requires disclosures that occur after December 31, 2016 until the Financial Statements is audited and published on January 30, 2017 or until the Annual Report is published.

Management Report

Material Commitment for Capital Goods Investment As of December 31, 2016, the Bank did not have material commitment for capital goods investment.

In terms of capital during 2016, the Bank increased Capital Deposit Funds as part of the Tier 1 Capital amounted to Rp1.70 trillion. This increased the Capital Adequacy Ratio of the Bank to 16.46%, above the minimum requirement according to the Bank’s risk profile.

2016 Performance

The Bank’s policy related to capital structure composition had considered the level of business risk.


1. The Bank’s unused loan facilities (uncommitted) granted to customers as of December 31, 2016 and December 31, 2015 were amounted Rp1,551,036 and Rp2,957,752, respectively. 2. As of December 31, 2016 and December 31, 2015, the term of Letters of Credit (L/C) were approximately 1 month to 6 months, while the term of bank guarantees issued range between 1 month to 12 months, respectively.

Material Information on Investment, Expansion, Divestment, Acquisition or Restructuring of Debts and Capital During 2016, the Bank did not have any material transactions or activities related to investments, expansions, divestitures, merger, acquisitions or restructuring of debts and capital.

Information on Material Transaction Containing Conflict of Interest and/or Transaction with Affiliated Parties During 2016, there was no significant transaction containing conflict of interest. The details of the relationship and type of significant transactions with related parties are as follows:

Transaction with Affiliated Parties Related Party

Nature of Relationship

Type of Transaction

Muhammad Anas M

Key management personnel

Time deposits and saving

Andrew McGregor Duff


Current accounts and employee loan

Azhar bin Abdul Wahab


Saving accounts and employee loan

Rusli


Time deposits, current account, Saving accounts and employee loan

Lloyd Rolston


Time deposits, saving accounts, current accounts and employee loan

Windiarto Tabingin


Saving accounts and Employee Loan

Novi Mayasari


Employee loan, current accounts, saving Accounts and time deposits

Suroto Moehadji


Employee Loan and Saving Accounts

Qatar National Bank - London

Owned by the Same shareholder

Acceptances payable

Ooredoo Asia

Affiliated company

Current Accounts

Qatar National Bank SAQ

Parent company

Current accounts with other banks, deposit from other banks and Subordinated Loan

PT Indosat Tbk

Entity controlled by the same government as the ultimate shareholder, State of Qatar

Current accounts and time deposits

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2016 Performance

Changes in the Regulation and Impact on the Bank During 2016, Bank Indonesia dan Financial Services Authority (FSA/OJK) have published several regulations that have significant impacts on the Bank. Those regulations are:

Subject

Regulations 2016

Impact

Bank Business Plan

POJK No. 5/POJK.03/2016 dated February 3, 2016, SE OJK No. 25/SEOJK.03/2016 dated August 11, 2016

In preparing the Bank Business Plan 2017, the Bank shall use the attachment in SE OJK No. 25/SEOJK.03/2016.

Annual Report of Public Company

POJK No. 29/POJK.04/2016 dated July 29, 2016, SE OJK No.30/SEOJK.04/2016 dated August 3, 2016

Starting from 2017, the Bank in preparing the Annual Report to be submitted to the Financial Services Authority (OJK), it shall be in accordance with SE OJK No.30/SEOJK.04/2016

Loan-to-Value Ratio for Property Loans, Financing-to-Value Ratio for Property Financing and Advanced Payment for Motorized Vehicle Credit or Financing

PBI No.18/16/PBI/2016 dated August 26, 2016, SE BI No. 18/19/DKMP dated September 6, 2016

• • •

• • •

POJK No. 27/POJK.03/2016 dated July 29, 2016, SE OJK No.39/SEOJK.03/2016 dated September 13, 2016

•

• • •

SE OJK No. 40/SEOJK.03/2016 dated September 26, 2016

•

Since January 1, 2016: a. Duties and responsibilities of Remuneration Committee shall be adjusted with POJK No. 45/POJK.03/2015. b. Article 61 paragraph (2) letter d (remuneration package/ policy and other facilities for the Board of Commissioners and the Board of Directors), letter e (shares option owned by the Commissioner, Board of Directors, and Executive Officers), and letter f (highest and lowest salary ration), and article (3) PBI No. 8/4/PBI/2006 and also PBI No. 8/14/PBI/2006 regarding the Implementation of Good Corporate Governance for the Commercial Banks was declared invalid.


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Implementation of Remuneration Governance

Fit and proper test for the Bank is carried out by the Financial Services Authority (OJK) to i). Ultimate Shareholder candidate, ii). Candidate members of the Board of Directors, and iii). Candidate members of the Board of Commissioners. The result of fit and proper test that has been set before the enactment of POJK No. 27/POJK.03/2016 remain valid. The consequences of the results of the fit and proper refer to the provisions in POJK No. 27/POJK.03/2016. Upon the enforcement of POJK No. 27/POJK.03/2016, the members of BOD & BOC shall take the fit and proper test based on POJK prior to the extension of tenure or change of position in the same company.


Fit and Proper Test for the Primary Party of Financial Services Institutions

Changes in the ratio and the tiering of Loan to Value (LTV) ratio for Property Loan, for 1st facility, 2nd facility, 3rd facility, and so on, with due regard to the prudent principle. Adjustment of the requirement of Non-Performing Loan (NPL) of total Loan for the use of LTV ratio for Property Loan from gross to net. Top up by commercial banks which is in addition to previous funding using the LTV ratio for the same Property Loan as long as such Property Loan has good quality. Same principle also applies for Property Loan take over with top up. Property Loan for the property ownership that has not been fully available is allowed up to 2nd facility, with a gradual credit disbursement. Adjustment of data source and value is used in NPL calculation. Improvement related to the delivery of Property Loan and Motorized Vehicle Credit Report use the template provided in Bank Indonesia website.


In the event that the Bank’s point of non-viability is reached, the Bank shall convert common stock or write downs and convert any additional capital (Additional Tier 1) and/or supplementary capital (Tier 2).

Company Profile

SE OJK No. 20/SEOJK.03/2016 dated June 21, 2016

Management Report

Conversion of Common Stock or Write Downs for Additional Core-Capital Instruments or Supplementary Capital Enforcement


Subjek

Ketentuan 2016

Dampak • •

Banks are required to adjust the remuneration policy with reference to POJK No. 45/POJK.03/2015, deadline in December 31, 2016. The provision of sanctions under Article 33 POJK No. 45/ POJK.03/2015 will be effective on January 1, 2019.

Transparency and Publication of Bank Reports

POJK No. 32/POJK.03/2016 dated August 8, 2016, SE OJK No. 43/SEOJK.03/2016 dated September 28, 2016

The Bank in preparing Conventional Commercial Bank Reports refers to the attachment of SE OJK No. 43/SEOJK.03/2016.

Debtor Information System

PBI No. 18/21/PBI/2016 dated October 3, 2016

•

•

Monitoring of Foreign Exchange Activities for Bank and Clients

SE BI No. 18/23/DSta dated October 26, 2016

• •

• • •

Changes in Accounting Policies The Bank adopted the following accounting standards, which are considered relevant, starting on January 1, 2016: • Amendments to SFAS No. 1: Presentation of Financial Statements on Disclosures initiative. This amendments clarify, rather than significantly change, existing SFAS No. 1 requirements, among others, to clarify the

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•

The reporter is obliged to inform the Debtor regarding the reporting of Fund Provision into the Debtor Information System. Information delivery could be done via form, e-mail, and short messages service. In case the Reporter received complaints from Debtor regarding the Debtor Information in the Debtor Information System, the Reporter shall follow up and resolve the complaint no later than 20 working days after the date of receipt of the complaint. The Reporter is obliged to report the Debtor’s complaint and the follow up of Debtor’s complaint no later to Bank Indonesia on a quarterly basis no later than the 10th after the end of the quarter which submitted to the Department of Report Management and Compliance c.q. Credit Information Service and Complaints Handling Team, Jl. M.H. Thamrin No.2 Jakarta 10350. Customers who conduct Outgoing Transfer in the form of foreign currency above USD100,000.00 are required to submit Underlying Documents of Outgoing Transfer to the Bank. Bank may only accept Fund Transfer Request as long as it is supported with: a. Underlying Document (See Appendix I). b. If Underlying Document is not available in Appendix I, Customer shall make statement letter (See Appendix II). Bank shall verify the conformity between Outgoing Transfer Request and Underlying Document Regarding the Recipient Name and Payment Value. Bank shall administer the Underlying Document and statement letter in the form of hardcopy and/or softcopy. Bank shall provide an explanation to the Customer that the truth and/or conformity of Underlying Document of Outgoing Transfer or statement letter with the aim of Outgoing Transfer is the responsibility of the Customer.

materiality, flexibility as to the order in which they present the notes to financial statements and identification of significant accounting policies. Amendments to SFAS No. 16: Property, Plant and Equipment on Clarification of the accepted method for depreciation and amortization. The amendments clarify the principle in SFAS No. 16 and

SFAS No. 19 Intangible Asset that revenue reflects a pattern of economic benefits that are generated from operating a business (of which the asset is part) rather than the economic benefits that are consumed through use of the asset. As a result, a revenue-based method connot be used to depreciate the Property, Plant and Equipment.

•

•

•

SFAS No. 68 (2015 Improvement): Fair value Measurement. The improvement clarifies that the portfolio exception in SFAS No. 68 can be applied not only to financial assets and financial liabilities, but also to other contracts within the scope of SFAS No. 55.

The Bank is presently evaluating and has not yet determined the effects of these accounting standards on its financial statements.

Management Discussion and Analysis Corporate Governance

Business Sustainability Information In 2016, there were no such things that could potentially have a significant effect on the sustainability of the Bank. The Bank’s management has done a stress test in order to assess things that have potential significant effect on the Bank’s business continuity. The implementation of stress test has been adapted to the business scale and complexity as well as macroeconomic indicators as a reference which underlying the assumptions of management that there are no such things which have potential significant effect on the Bank’s business continuity.

Company Profile

•


SFAS No. No. 7 (2015 Improvement): Related Party Disclosures. The improvement clarifies that a management entity (an entity that provides key management personnel services) is a related party subject to the related party disclosures. In addition, an entity that uses a management entity is required to disclose the expenses incurred for management services. SFAS No. 16 (2015 Improvement): Property, Plant and Equipment. The improvement clarifies that in SFAS No. 16 and SFAS No. 19 that the asset may be revalued by reference to observable data on either the gross or the net carrying amount. In addition, the accumulated depreciation or amortisation is the difference between the gross and carrying amounts of the asset. Carrying amounts of the asset is restated by revaluated amounts. SFAS No. 19 (2015 Improvement): Intangible Assets. The improvement clarifies that in SFAS No. 16 and SFAS No. 19 that the asset may be revalued by reference to observable data on either the gross or the net carrying amount. In addition, the accumulated depreciation or amortisation is the difference between the gross and carrying amounts of the asset. Carrying amounts of the asset is restated by revaluated amounts.

Management Report

•

Amendment to SFAS No. 24: Employee Benefits on Defined benefit plans: Employee Contributions. SFAS No. 24 requires an entity to consider contributions from employees or third parties when accounting for defined benefit plans. Where the contributions are linked to service, they should be attributed to periods of service as a negative benefit. These amendments clarify that, if the amount of the contributions is independent of the number of years of service, an entity is permitted to recognise such contributions as a reduction in the service cost in the period in which the service is rendered, instead of allocating the contributions to the periods of service. SFAS No. 5 (2015 Improvement): Operating Segments. The improvement clarifies that: a. An entity must disclose the judgements made by management in applying the aggregation criteria in paragraph 12 of SFAS No. 5 including a brief description of operating segments that have been aggregated and the economic characteristics. b. Disclose the reconciliation of segment assets to total assets if the reconciliation is reported to the chief operating decision maker, similar to the required disclosure for segment liabilities.

2016 Performance

•


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Marketing Aspect

The economic slowdown that occurred in 2016 also had an impact on the Bank. Challenging growth and economic conditions in 2016 served as opportunities for the Bank to develop business, particularly in the area of QNB Indonesia’s business base. With a business focus on the Wholesale Banking and Retail Banking, Bank business development opportunities are still open. Despite the slowdown in the Indonesian economy, the SME sector and public sector consumption will keep growing. In line with the shifting of public banking trend from traditional banking, which relies on the service outlet, to modern banking comunity who prefer electronic transactions, it provides a great opportunity for the Bank if it could provide more efficient and effective features of transactions

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through the provision of facilities for electronic transactions such as ATM, SMS, Internet, Mobile Banking, Kiosk, and more. By taking into account the economic potential and challenges, this will further open up market opportunities for QNB Indonesia’s business development. On this basis, the Bank has been preparing for the competition in the business in which the Bank has set a policy direction to focus on customers (customer centric). In line with such focus shifting, the entire resources owned by the Bank are directed to strengthen the foundations of the Bank in order to build products and services that suit customers’ expectations and needs. In addition to the focus that has been set, the Bank focuses on

strengthening business in the area or areas with the most potential and meet the economies of scale the Bank, namely by strengthening the existing branches by performing continuous review and developing digital platform. The competitive advantage of QNB Indonesia which is majority owned by QNB will improve the positioning of the Bank in the future, especially by promoting the power and security of QNB. Where as the majority owner, QNB has a strong commitment to develop banking business in Indonesia, thus one of the aspects in developing banking business in Indonesia, namely the capital factor becomes one of the QNB Indonesia’s strengths to develop its business.


Retail banking market share continues to grow significantly. Similar with wholesale banking, the retail banking segment also used the “customer centric” approach, thus the development of products (assets - liabilities) and the service will be adapted to the retail customer behavior. The strategy set to work on this segment is focused on “affluent” customer for the marketing of funding product and other banking facilities such as wealth management and priority banking.


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One of the major segments of the target market is the wholesale banking segment. The strategy used to work on this segment is the penetration of the strategic corporates to support the business development of both funding and financing and other banking services. Solution approach to customers through the framework

or supply chain approach, with a focus on domestic structured trade in key sectors. Deepening of the SME segment in order to expand the coverage of bank funding development.


Such market situation provides implications to the strategic measures that should be taken by QNB Indonesia to be able to grow and develop properly. The global strategic implications that shall be considered by QNB Indonesia is by immediately join the competition for the domestic market that is growing rapidly.

To be a reckoned player, QNB Indonesia shall focus on several major segments and utilization of investment opportunities in the rapidly growing market. To achieve the desired objectives, development of adequate capability is required to intensively work on the chosen market, among others, by building the best products and services capability as well as IT investments and develop a network of branches and other electronic networks.


Of all the banks operating in Indonesia, the national banking market share is still dominated by the major banks. The last few years shows the tight competition where players from quite reputable global and regional/Asian banks featuring an aggressive growth strategy. In addition, in recent years, smallmedium segment contributes significantly to economic growth, in which the trade and services sectors are the sectors that contribute the most to the national economy.


Branding and Positioning After passing through a period of rebranding with the change of name and logo of QNB Indonesia in 2015, the Bank continued to implement the strategy of sustainable promotion and branding to communicate the existence and also to strengthen its position in the banking industry. The pillar of Bank’s reputation is based on the Bank’s vision to become one of the top tier banks by promoting technology as the support of banking products and services, thus the Bank’s performance could continue to grow following the trends and meet the needs of customers and public. Promotion and branding strategy becomes one of the supporting pillars of Bank’s reputation. In 2016, the Bank has held various activities by implementing 360° integrated communication strategy, namely an integrated plan of implementing communication channels including commercial (above the line), activation (below the line), public relations, and digital media. The background of this strategy is the communication

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objective to disseminate and educate the public regarding the Bank as well as its innovative programs. In terms of activation, the Bank’s image strengthening is carried out through micro marketing or exhibition in various cities of branch offices location. Branch offices conducted CASA products marketing which held in restaurant, mall, fruit market, and education institutions in cooperation. In addition, the Bank also promoted customer engagement for the customers who have Current Account and provide them with the opportunity for a trip to Europe and Qatar to visit the QNB Group Head Office in Doha. Other activity also includes the organizing of customer gathering in the event of economic outlook discussion with the latest financial and economic topics. To support the socialization of digital banking services, namely DooEt+, the Bank’s mobile banking, communication was developed through the exhibition linked to Savings program. Other promotional activities, among others, include bazaar, school, and car free day.

Promotion via above the line media is carried out by consistently utilizing billboard in the pedestrian bridge of Polda Metro Jaya, Jakarta to put different ads alternately including corporate tagline and the introduction of the latest programs and services of the Bank. The Bank also focuses its branding at international airports, including Soekarno-Hatta International Airport Terminal 2 D-E-F, Terminal 3, and Ngurah Rai International Airport. PR strategy was also implemented through management interviews and regular press release via print and online media. In addition, to complement the knowledge of its customers, the Bank also issued a monthly newsletter, “Monthly Insights” which contains news about the country’s economy, financial market, and the latest news from the Bank. By disseminating corporate actions, it is expected that customers could know more about their Bank’s profile. Initiation of branding and promotion is not only focused on the business performance, but the Bank also promotes education by visiting educational institutions to hold financial literacy of “Mari Menabung”.

Business Prospect 2017

- - - -

Assets increase Liquidity management Adequate Non-Performing Loans management Fee-based income development Low cost fund increase Net interest income increase Continuous efficiency improvement

Business Focus Establishment In 2017 the Bank sets the target of business growth which includes the growth of total assets and also income target. To achieve such target, the Bank will implement a variety of integrated business development initiatives with due regard to the precautionary principle. The bank will also continue to widen its business in 2017 with a series of new business, products, and services by optimizing existing business. All of which are intended to improve the facilities provided to customers.

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Along with the improvement of the organizational structure, the Bank also strengthens its human resources to support organizational structure, among others, through external recruitment process, internal human resource development, as well as the development of human resources through Management Development Program (MDP).


Organizational Structure Evaluation and HR Strengthening The Bank will continue to enhance its organizational structure to match the dynamic development of the economy and banking, both nationwide and international. The fulfillment of some vacant positions within the existing organizational structure becomes a major concern of the Bank in 2017 which will be addressed through internal and external recruitment.

Company Profile

Some of the main pillars still will be the focus of attention in 2017 which include sustainable development on the Human Resources (people) and technology; refinement and improvement of business processes (process); as well as product development (product) including the distribution network in accordance with the target market, both the wholesale segment and the retail segment. A focus on these pillars is a strategic step in order to strengthen the business pillars and operational of QNB Indonesia in order to develop a more strategic initiatives. In addition, at the same time the Bank will continue to record a significant growth in order to achieve longterm target. These conditions will result in increased costs in the development of the business foundation, thus it will directly affect the Bank’s ability to generate profits in 2017. However, the Bank will continue to improve efficiency as well as attempting to manage a tight and planned budget.

Strategic Measures

Management Report

Several preparations have been made by the Bank to achieve such target, namely by preparing excellent infrastructure and resources. In 2017 the Bank will consistently improve the business foundation that includes development of human resource, infrastructure, business process, and frameworks that support the implementation of good corporate governance (GCG) as well as the adoption of adequate risk management framework (prudent). Optimization and efficiency remain a major focus of the Bank in 2017 to achieve the Bank’s business growth as expected. The Bank’s business focus still refer to the customer (customer centric) where the Bank will continue to focus on customer needs by creating innovative products needed by customers. Such products are expected to support the needs and interests of the Bank where it would draw the customer’s attention to the Bank. The core strategy which will be performed by QNB Indonesia for 2017 includes:

- - -

2016 Performance

The Bank has set a policy in accordance with the vision to be a top tier Bank in terms of financial performance in 2017.


Go Co ve rpo rn ra an te ce

Annual Report 2016

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2016 Performance

Management Report

Company Profile




131



132


2016 Performance Management Report Company Profile Corporate Governance Corporate Social Responsibility



The Bank has consistently applied GCG principles in its day-to-day operational activities through comprehensive internal policies and rules in order to continuously improve the GCG implementation. 133


Basis of GCG Implementation

QNB Indonesia highly regards that the implementation of Good Corporate Governance (GCG) will support the achievement of the Bank’s objectives in terms of performance, profitability, and added value for all stakeholders, as well as to ensure the long-term business sustainability. Thus, we continue to increase our commitment to uphold the values of corporate governance in carrying out business activities. We constantly keep abreast of best corporate governance practices from time to time. This effort also indicates the commitment of the top management and all employees in improving the quality of GCG best practices implementation. GCG Legal Reference The implementation of GCG in the Bank refers to the GCG standards and guidelines established by a series of regulatory pillars, including from Bank Indonesia, the Law of the Republic of Indonesia, and Financial Services Authority (FSA/OJK) as follows: 1. Law of the Republic of Indonesia No.10 year 1998 concerning the amendment on Law No.7 year 1992 on Banking; 2. Law of the Republic of Indonesia No.40 year 2007 on Limited Liability Company (PT); 3. FSA/OJK Regulation No.55/ POJK.03/2016 dated December 7, 2016 on Implementation of Corporate Governance for Commercial Banks; 4. Bank Indonesia Circular Letter No.15/15/DPNP/dated April 29, 2013 on Implementation of Good Corporate Governance for Commercial Banks; 5. GCG Code published by the National Committee on Governance Policies; 6. ASEAN Corporate Governance Scorecard; and

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7. Indonesia Good Corporate Governance Roadmap by Indonesia Financial Services Authority in 2014

GCG Basic Policies Apart from the external regulatory pillar, the Bank has also been supported by the Bank GCG Charter as stipulated in Charter No. 1-00 dated October 10, 2012 which highlighted the structure of GCG and principles in implementing GCG.

GCG Objectives With reference to Indonesia Good Corporate Governance established by the National Committee on Corporate Governance (KNKG) in 2006, the main objectives of GCG implementation which relate to the benefit of the Bank and shareholders are: 1. Achieving sustainable growth of the Bank through a management system based on the principles of transparency, accountability, responsibility, independency and fairness;

2. Empowering the function and independency of each organ in the Bank, namely, the Board of Commissioners, the Board of Directors and the General Meeting of Shareholders; 3. Encouraging shareholders, members of the Board of Commissioners and members of the Board of Directors to take decisions and actions based on high moral values and compliance with the law and regulations; 4. Stimulating the Bank’s awareness of social responsibilities in particular the environmental and societal interests of the communities in which the Bank operates; 5. Optimizing the value of the Bank for its shareholders by also taking into consideration the interests of other stakeholders; and

GCG Principles

Referring to the framework, the Bank strives to ensure that its business uphold transparency; has key performance indicators which are consistent with its corporate values, business goals, and strategies so as to reflect its

The GCG framework in the Bank is based on Indonesia’s Code of Good Corporate Governance for Banking published by National Committee on Governance Policy

Transparency

Description To preserve and maintain the objectivity in practicing business, the Bank shall provide material and relevant information that are easily accessible and understandable by stakeholders.

Application 1.

2.

3.

Accountability

1.

To manage business in a proper and measurable manner, in such that it is aligned with the interest of the Bank by also considering the interest of shareholders and other stakeholders. Accountability is a prerequisite to achieve sustainable performance.

2.

3. 4.

5.

Clear definition of the job description and responsibilities of each organ and all employees that are in line with the Bank’s vision, mission, values, and strategy Assurance that all of the Bank’s organs and all employees shall have the qualifications that fit its duty, responsibility, and role in GCG implementation Assurance of the existence of an effective internal control system within the Bank Establishment of performance indicators for all members of the Board of Directors and the Board of Commissioners as well as the employees that are consistent with the company’s objectives, and have a reward and punishment system Assurance that each organ of the Bank and all employees shall uphold to the business ethics and an agreed upon code of conduct in executing its duty and responsibility


135


To account for its performance transparently and fairly.


4.

Disclosure of information in timely, appropriate, clear, accurate and comparable manner in which they are accessible to stakeholders in accordance with their rights Disclosure of information which include but not limited to the Bank’s vision, mission, business targets and strategy, financial condition, composition and compensation of the management, controlling shareholders, shares owned by members of the Board of Directors and the Board of Commissioners and its family members in a company and other companies, risk management system, oversight and internal control system, GCG structure and mechanism and its level of compliance, and important events that may affect the condition of the Bank Fulfillment of provisions on confidentiality in accordance with laws and regulations, professional confidentiality, and personal rights Formal written policies which are proportionally communicated to stakeholders


To take the initiative to disclose not only the issues mandated by laws and regulations, but also other information deemed necessary by shareholders, creditors and other stakeholders to form a decision.

As such, the Bank corporate governance framework is built and applied on the following values:

Company Profile

GCG Principle

accountability; builds on prudent banking practices and ensures compliance with applicable provision to demonstrate its responsibility; promotes decision making that is independent, objective, and free of conflicts of interest; continues to take all stakeholders’ interest into account based on fairness principle.

Management Report

(KNKG) in 2006 as amended in 2012 which also conforms to Indonesia Corporate Governance Roadmap and international best practices on the Organization for Economic Cooperation and Development (OECD) Principles.

2016 Performance

6. Enhancing the competitiveness of the Bank, both nationally and internationally, in order to enhance market confidence which may promote investment flow and a sustainable national economic growth.


GCG Principle Responsibility

Independency

Description

Application

To abide by laws and regulations and fulfill its responsibility to the comunities and environment for the purpose of maintaining long term sustainability of the business and to be recognized as a good corporate citizen.

1.

To accelerate the implementation of the GCG principles by operating independently with an appropriate balance of power, in such a manner that no single organ shall dominate the other and that no intervention from other party shall exist.

1.

2.

2.

Fairness

Always consider the interests of shareholders and other stakeholders based on a fairness principle in conducting business activities

1.

2.

3.

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Assurance that all the Bank’s organs apply prudent banking principles and comply with laws and regulations, its articles of association and bylaws Fulfillment of social responsibility by having, inter alia, an awareness of the environmental and societal interests of the communities in which the Bank operates through an appropriate planning and implementation to address the issues Assurance that each of the Bank’s organ shall avoid the occurrence of domination by any party, shall not be influenced by any certain interest, avoid conflict of interests and any influence or pressure, so that the decision making can be carried out objectively Assurance that each of the Bank’s organ shall exercise its function and duties in accordance with the Articles of Association and rules and regulations, not dominating each other and or shifting the responsibility from one to the other Opportunities for stakeholders to give input and opinions in the interest of the Bank, and establish access to the Bank’s information in accordance with the transparency principle and within the scope of their respective capacities A fair and equitable treatment to stakeholders in accordance with benefit and contribution given to the Bank Equal opportunity in recruitment of employees, in career development and for employees to carry out their duty professionally

2016 Performance

GCG Roadmap To continuously improve the quality and coverage of GCG implementation, the Bank formulates a roadmap in which GCG implementation is carried out in several strategic phases, namely: Corporate Governance Commitment, Good Governed Company, and Good Corporate Citizen. Each phase represents the process of formulation, implementation, and continuous monitoring and evaluation towards GCG excellence.

GCG Good Governed Company

Management Report

GCG Corporate Governance Commitment

GCG Good Corporate Citizen

Company Profile

System

Culture

Complying with GCG Guidelines, both mandatory and advisory

Satisfactory operation through internal control, risk management, and whistleblowing system implementation

The corporation is accepted as a part of the community through CSR approach


Commitment

GCG : Creating added values and sustainable development Corporate Governance

Source: National Committee on Governance Policy (KNKG)



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GCG Implementation

Commitment to GCG Implementation Indonesia Banking Code of Corporate Governance stipulates that the commitment to GCG implementation is highly essential for banks in order to fully achieve its goals and generate sustainable value. Implementation of policies and code of conduct enforcement, in particular, shall apply to everyone in the Bank. The Bank has also complied with a number of GCG basic principles that validates its strong commitment such as: 1. Has a clear and realistic vision and mission. 2. Has corporate values that reflect a good moral attitude in doing business. 3. Has Board Charters which contains work guidelines for the Board of Commisioners and Directors.

138


4. Has a set of business ethics and code of conduct which is formulated by involving GCG’s organs and its supporting work units. Business ethics and code of conduct shall be enforced in sustainable and consistent manner so as to build a robust corporate culture which manifests the organization’s core values. 5. Take active stance in contributing to natural resources and environment preservation causes. 6. Has internal policies which can ensure rights and obligation of all parties so as to create a conducive workplace. 7. Has a whistleblowing system which can accomodate reports, complaints, inputs, and corrective feedbacks from employees and other stakeholders.

Going forward, the Bank will continue to improve the GCG implementation with the latest GCG practices and standards as well as line with its operational policies. Initiatives that will be continuously implemented are as follows: 1. Enhancement of GCG implementation transparency via website and annual report based on industry best practices. 2. Improvement and update various charters and policies. 3. Development of Design and develop management information system to support business and control processes. 4. Increase of Transparency Aspects. 5. Financial Literacy. 6. Dissemination and socialization of GCG practices. 7. Implementation of FATCA and enforcement of AML/KYC.

2016 Performance

Year

Good Corporate Governance Program Establishment of the GCG Charter

2013

1. 2. 3.

Establishment of Risk Oversight Committee Charter Renewal of Audit Committee Charter Establishment of Internal Audit Charter

2014

1. 2. 3.

Preparation and issuance the Annual Report in accordance with the requirements from FSA/OJK and Evaluation of the GCG implementation through cooperation with the Independent Agency In-depth implementation of corporate value, code of etchics and corporate culture as well as improvement of the tools which may increase the corporate governance practices in overall

2015

1. 2. 3.

Renewal of Board of Commissioners Charter Renewal of Board of Directors Charter Renewal of Nomination Policy for members of Board of Commissioners, Board of Directors and members of the Committee responsible to the Board of Comissioners Renewal of Audit Committee Charter Renewal of Remuneration and Nomination Charter

4. 5. 1. 2. 3. 4. 5. 6. 7.

Establishment of Policy of Insiders Trading and Personal Investment Renewal of Internal Audit Charter Establishment of Policy of Communication with the Shareholders and Investor Renewal of Policy on the Board of Commissioners Performance Self-Assessment Renewal of Policy on the Board of Directors Performance Self-Assessment Implementation of Good Corporate Governance in relation of the Prohibition to Receive Gratification Renewal of Policies and Procedures for the Nomination, Appointment, Replacement and/or Dismissal of Members of the Board of Commissioners, Board of Directors and Committees’ Reporting to the Board of Commissioners Revision on Communication Policy Policy on the Fulfilment of Creditor’ Rights Policy on the Rotation for Chairman of the Committees Responsible to the BoC

GCG Mechanism

By ensuring consistent and effective implementation of GCG mechanism, the Bank strives to create a better-governed financial

institution which gains benefits from the following expected results: 1. Reduction of cost of capital. 2. Increased share value in the long term. 3. Increased support from the stakeholders so that the Bank is able to operate and grow in a sustainable manner through various strategies and policies.


As part of efforts to improve the GCG implementation quality, the Bank has consistently applied GCG principles in its day-to-day operational activities through comprehensive internal policies and rules. Among others are GCG Charter, Code of Conduct, Board of Commissioners Charter, Board

of Directors Charter, Nomination Policy, Whistleblowing System (WBS) Policy and various other operational policies of the Bank which are also compatible with recent GCG best practices.


8. 9. 10.

Company Profile

2016

Management Report

2012



139


Implementation Aspects and Principles of Corporate Governance pursuant to OJK Rules Governance Guidelines include five aspects, eight principles and 25 recommendations related to the aspects and principles of good corporate governance. The recommended implementation aspects and principles of good corporate governance guidelines are the standard implementation aspects and principles of good corporate governance that should be applied to the Company when implementing the principles of governance. The implementation refers to the Circular Letter of Financial Services Authority No. 32/SEOJK.04/2015 regarding the Corporate Governance. Objective 1. Assessment on the Implementation of Corporate Governance Guidelines aims to encourage the public company to implement good corporate governance in accordance with exemplary international practice

2. Governance Guidelines 5 (five) aspects, 8 (eight) principles of good corporate governance, and 25 (twenty five) recommendations related to the the aspects and principles of good corporate governance 3. Disclosure of Governance Guidelines, at least contains: Statement that the recommendations of Governance Guidelines have been implemented; and/or b. Explanation that the recommendations of Governance Guidelines have not been implemented, which at least contains: 1) The reason for not implementing; and 2) Aternative implementation (if any).

Principle & Recommendation A.

Relationship Between the Public Company and Shareholders in Guaranteeing the Rights of The Shareholders 1.

140

Increasing the Value of Executing the General Meeting of Shareholders (GMS) Shareholders have the right to participate in the management of the company through the decision-making at the GMS as set out in the legislation and the articles of association of the company. Provisions related to the Public Company’s GMS has been set in the Financial Services Authority Regulation No. 32/POJK.04/2014 on the Planning and Organization of the General Meeting of Shareholders of Public Company, Capital Market Supervisory Agency and Financial Institution No. IX.J.1, Attachment Decision of the Chairman Capital Market Supervisory Agency and Financial Institution No. KEP-179/BL/2008 dated May 14, 2008 on the Principles of Association of Companies that Conduct Public Offering of Equity Securities and Public Companies, Law No. 40 of 2007 on Limited Liability Companies and articles of association of the company. Whereas the relevant provisions of the AGM for a private company regulated in Law Number 40 Year 2007 on Limited Liability Company and the articles of association of the company. GMS can be held, among others, with the request of the General Meeting of shareholders that meet the requirements, followed by the delivery of the agenda to the Financial Services Authority to the preparation of the minutes of the GMS and the announcement of the summary minutes of the GMS. In the process, there is also the announcement and implementation of the GMS to shareholders included therein mechanism to


4. In explaining the unimplemented recommendations of governance aspects and principles implementation in Governance Guidelines and/ or the explanation of other alternatives in implementing the governance aspects and principles in Governance Guidelines referred to in point 3, the Public Company shall ensure that the provided explanation is clear, informative, and adequate so that investors and other stakeholders understand the reasons: a. The recommendation of governance aspects and principles implementation in Governance Guidelines is not implemented; and/ or b. Use other means in implementing the governance aspects and principles in Governance Guidelines. Analysis

2016 Performance

Principle & Recommendation

Analysis

propose the agenda by shareholders. The value of the holding of the meeting can be enhanced through efforts to promote fairness and transparency in order to guarantee the rights and interests of shareholders

At the Bank’s Annual GMS held on February 16, 2016, all members of the Board of Directors of the Bank was present in the Annual GMS.

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While the attending members of the Board of Commissioners are the entire Independent Commissioner. Other Commissioners failed to attend the Annual GMS. However, the entire proposed agenda were discussed and agreed upon by all members of the Board of Commissioners and Independent Commissioners who are present and have the ability to represent the Board of Commissioners in the Annual GMS.

Management Discussion and Analysis Corporate Social Responsibility

1.3) The summary of meeting minutes of the GMS is available on the public company website for at least 1 (one) year. Explanation Based on Article 34 paragraph (2) of the Financial Services Authority Regulation No. 32/POJK.04/2014 regarding the Plan and Implementation of the General Meeting of Shareholders of Public Company, the Public Company is obliged to make summary of meeting minutes of the GMS in Bahasa Indonesia and in a foreign language (at least in English). It must be announced in 2 (two) working days after the meeting is executed for the public through the public company website. The availability of the summary of meeting minutes provides an opportunity to absent shareholders to get important information during the meeting quickly and easily. The provisions of how long the summary of meeting minutes may be available is to determine the adequate time for shareholders to retrieve the information.

Company Profile

1.2) The Board of Directors and Board of Commissioners of the public company are present in the AGMS. Explanation Kehadiran seluruh anggota Direksi dan anggota Dewan Komisaris Perusahaan Terbuka bertujuan agar setiap anggota Direksi dan anggota Dewan Komisaris dapat memperhatikan, menjelaskan, dan menjawab secara langsung permasalahan yang terjadi atau pertanyaan yang diajukan oleh pemegang saham terkait mata acara dalam RUPS.

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Management Report

Recommendation : 1.1) The Public Company has a way or technical procedure of voting in public or in private, which will put forward the independence and interest of the shareholders. Explanation Each share has one vote. Shareholders may use their vote in decision-making, especially by voting during the process of decision-making. However, the mechanism of decision-making by voting has not been arranged in a detailed manner whether it is in public or in private. The public company should have a voting procedure in decision-making according to the agenda of the GMS. The procedure should also maintain the independence and the freedom of the shareholders. For example, the public voting is done by raising hands according to the instruction of choice that has been offered by the chairman of the meeting. On the other hand, private voting is done by either voter cards or electronic voting. This is done to maintain the privacy or according to the request of the shareholders.


141


Principle & Recommendation 2.

Increasing the Quality of Communication Between the Public Company and Shareholders or Investors The Public Company shall continue to improve the role and participation of shareholders or investors through effective communication and sustainable in order to achieve the objectives of the Public Company. Such communication is beneficial to know the expectations and the views of shareholders or investors, and seek advice and input for benefit and sustainability of the Public Company. Recommendation : 2.1) The public company has a communication policy with shareholders or investors. Explanation The communication between the public company and shareholders/ investors aims for a clearer understanding of information that has been made public, such as newsletters, information disclosure, business prospects and performance, as well as the execution of public company’s governance. In addition, shareholder/investors may also give suggestions and opinions to the management of the public company. The communication policy with shareholders/investors shows the commitment of the public company in implementing communication with shareholders/investors. The policy comprises strategies, programs, time of communication, and guidelines that support shareholders/investors in participating in the communication. 2.2) The public company discloses the communication policy that the public company has with shareholders/investors on the website. Explanation The disclosure of communication policy is a form of transparency and equality the public company is committed to give to all shareholders/investors under the execution of communication. The disclosure also aims for an increase of participation and role shareholders/investors have in executing the public company’s communication program.

B.

Function and Role of Board of Commissioners 3.

142

Analysis

Strengthening the Membership and Composition of Board of Commissioners Matters related to membership of the Board of Commissioners has been regulated under the Financial Services Authority Regulation No. 33/POJK.04/2014 of the Board of Directors and Board of Commissioners of Public Company, while the nomination procedure BoC members stipulated in the Regulation of Financial Services Authority No. 34/POJK.04/2014 on the Nomination and Remuneration Committee of Public Company. Nevertheless, the provisions have not described how the Public Company compose the membership and composition of the Board of Commissioners are ideal to support the sustainability of the company. Membership and composition of the Board of Commissioners that the ideal should reflect the general supervision over the implementation of the functions of the Public Company and the provision of advice to the Board of Directors in a professional, effective, and independent. Efforts to strengthen the membership and composition of the Board of Commissioners is done through the determination of the appropriate amount and composition in order to achieve the objectives of the Public Company, so as to build the trust of stakeholders.


Has been implemented




4.


Company Profile

3.2) The composition stipulation of the Board of Commissioners pays attention to the diversity of required skills, knowledge, and experiences Explanation The composition of Board of Commissioners is a combination of characteristics as a whole or as individuals according to the needs of the public company. These characteristics may be reflected through the stipulation of required skills, knowledge, and experiences in executing the supervising and counseling duties by the Board of Commissioners. Composition that pays attention to the needs of the public company is a positive sign, especially in relation to the decision-making on the execution of supervising duties that considers a wider range of aspects.

Analysis

Management Report

Recommendation : 3.1) The stipulation of number of commissioners will determine the condition of the public company Explanation The number of commissioners may affect the effectivity of how the Board of Commissioners execute their duties. The stipulation of number of the public company’s commissioners must refer to the applicable legislation. At least 2 (two) individuals are chosen according to the Regulation of Financial Services Authority No. 33/POJK.04/2014 on Board of Directors and Board of Commissioners of the Public Company. Additionally, the conditions of the public company, which ranges from characteristics, capacity, size, achievement of objectives, and fulfillment of business needs that differs within the company, must be taken into consideration. However, the large number of Board of Commissioners has a large potential to hinder the effectivity to execute the functions of Board of Commissioners.

2016 Performance



Increasing the Quality of Performing Duties and Responsibilities of Board of Commissioners. The Board of Commissioners is responsible to supervise the handling policy and the course of maintenance in general, as well as advising the Board of Directors, as stipulated in the Financial Services Authority Regulation No. 33/POJK.04/2014 of the Board of Directors and Board of Commissioners of Public Company. Monitoring and providing advice to the Board of Commissioners include, among other important strategies and plans of the company, the integrity of the financial statements, internal control system and risk management, reporting and information disclosure, compliance, and corporate governance. The Board of Commissioners must carry out their duties in good faith, full of responsibility and prudence for the sake of the Public Company and in accordance with the intent and purpose of the Public Company. In order to support the effective discharge of its duties, the Board may establish committees. The committees include the Audit Committee, as has been required in the legislation in the sector of capital market concerning the Establishment and Implementation Guidance of the Audit Committee and Nomination and Remuneration Committee, as stipulated in the Regulation of the Financial Services Authority No. 34/POJK.04/2014 on the Nomination and Remuneration Committee of Public Company.



143


Principle & Recommendation Recommendation: 4.1) The Board of Commissioners has a self assessment policy to evaluate the performance of the Board of Commissioners. Explanation The Board of Commissioners’ self assessment policy is a guideline used as a form of accountability in collegially assessing the performance of the Board of Commissioners. The self assessment is done individually by the commissioners to evaluate the performance of the Board of Commissioners, and not the individual performances of the commissioners. It is expected that each commissioner is able to contribute to a better overall performance by doing the self assessment. The policy may comprise the activity of assessment, the purposes and objectives, the periods of execution, and the standard or assessment criteria used based on the recommendation given by Nomination and Remuneration Function for Public Companies. The required functions are according to the regulations of OJK on the Nomination and Remuneration Committees for Public Companies.

144

Analysis


4.2) The self assessment policy that evaluates the performance of the Board of Commissioners is disclosed in this year’s Annual Report of the public company. Explanation The disclosure of the self assessment policy on the performance of the Board of Commissioners is executed not only to fulfill the transparency aspect as a form of responsibility, but also to convince the shareholders/investors of the acknowledgement of Board of Commissioners’ efforts to increase their performance. By disclosing the policy, the shareholders/investors are able to know the check and balance mechanism for the Board of Commissioners’ performance.


4.3) The Board of Commissioners has a resignation policy if a commissioner is involved in a financial crime. Explanation The resignation policy for a commissioner who is involved in a financial crime is a policy that may increase the confidence of stakeholders in the public company, so that the integrity of the company still remains. This policy is necessary to help ease the legal proceedings and avoid any disruptions in the company’s activity. In addition to the morality, this policy builds the ethical culture in the environment of the public company. The policy may comprise code of ethics that is applicable to the Board of Commissioners. An involvement in financial crime refers to the conviction of a commissioner by the authority. Financial crimes refer to manipulation and a variety of financial frauds in financial services. It also includes Money Laundering as stated in Act no. 8 of 2010 on the Prevention and Combating of Money Laundering.



C.

Analysis Has been implemented

Management Report

4.4) The Board of Commissioners or Committee that executes the nomination and remuneration function arranges the succession policy in the process of nominating a member of the Board of Directors. Explanation According to the Regulation of Financial Services Authority No. 34/ POJK.04/2014 on the Nomination and Remuneration Committees for Public Companies, the committee that executes the nomination function is tasked with arranging the policy and criteria needed for the process of nominating a candidate director. One of the policies that may support the nomination process is the succession of a director. The succession policy aims for maintaining the continuity of the regeneration or the leadership cadre in the company to preserve the business’ progression and the long-term goal of the company.

2016 Performance


Function and Role of the Board of Directors Strengthening the Membership and Composition of Board of Directors. Matters related to membership of the Board of Directors has been regulated under the Financial Services Authority Regulation No. 33/POJK.04/2014 of the Board of Directors and Board of Commissioners of Public Company. However, in such provisions not outlined how the Public Company compose the membership and composition of the Board of Directors which is ideal to support the sustainability of the company. Membership and composition of the Board of Directors should reflect the ideal implementation of the maintenance functions of the Public Company in a professional, effective, and efficient. Efforts to strengthen the membership and composition of the Board of Directors can be done through the determination of the appropriate amount and composition in order to achieve the objectives of the Public Company, so as to build the trust of stakeholders.





5.2) 5.2) The composition stipulation of the Board of Directors pays attention to the diversity of required skills, knowledge, and experiences. Explanation Similar to the Board of Commissioners, the diversity of composition in the Board of Directors is a combination of characteristics as a whole or as individuals, according to the needs of the public company. This combination is taken into consideration by paying attention to the required skills, knowledge, and experiences for the tasks and job functions of a director in order to achieve the goals of the public company. Therefore, the consideration of these characteristics will impact on nominating or choosing a director, collegially or individually.


Recommendation: 5.1) The stipulation of number of directors will consider the condition of the public company as well as the effectivity in decision-making. Explanation As the persons authorized in managing the company, the stipulation of number of directors will affect the performance of the public company. Therefore, the stipulation must be taken into serious consideration and must be according to the applicable regulations, where, according to the Regulation of Financial Services Authority Nomor 33/POJK.04/2014 on Board of Directors and Board of Commissioners for Public Companies, it must consist of 2 (two) individuals. In addition, the stipulation must be based on the needs to achieve the purposes, goals, and conditions of the public company. The conditions comprise characteristics, capacity, and size of the company as well as the effectivity of decision-making made by the Board of Directors.

Company Profile

5.


145


Principle & Recommendation 5.3) The member of Board of Directors who oversees accounting or finance has the skills and/or knowledge in accounting. Explanation A financial statement is a report on management accountability of the resources owned by the public company, which must be prepared and presented according to the financial accounting standards generally accepted in Indonesia and also rules that the OJK is related to, which the Capital Markets Law regulates the presentation and disclosure of financial statements of the public company. Based on the Capital Markets Law regulating the responsibilities of directors on financial statements, the Board of Directors are responsible for the financial statements, which are signed by the President Director and the Director that oversees accounting or finance. Therefore, the disclosure and organization of financial information that is presented in the financial statements highly depends on the skills and/or knowledge of the Board of Directors, mainly the director who oversees accounting or finance. The skills or knowledge qualification that a director has in accounting may create a convincing financial statement that stakeholders are able to rely on as a groundwork in making an economic decision related to the public company. Those skills and knowledge may be validated based on education background, training certification, and relevant job experiences. 6.


Increasing the Quality of Performing Duties and Responsibilities of Board of Directors. The Board of Directors is authorized, and are fully responsible for the management of the Public Company for the benefit of the Public Company in accordance with the intent and purpose of the Public Company, as stipulated in the Regulation of the Financial Services Authority No. 33/POJK.04/2014 of the Board of Directors and Board of Commissioners of Public Company. The maintenance task by the Board of Directors referred to include, among others, the effectiveness and efficiency of resources, implementation of internal control, risk management, sustainable management (sustainability), communication with stakeholders, including through the company secretary, preparing accountability reports, and corporate governance. The Board of Directors shall carry out their duties in good faith, full of responsibility and prudence for the sake of public company under the provisions of the applicable legislation and the articles of association of the company. Roles and responsibilities among the members of the Board of Directors arrangement done for the efficient management of the Public Company. Recommendation: 6.1) The Board of Directors have a self assessment policy to evaluate the performance of the Board of Directors. Explanation Similar to the Board of Commissioners, the Board of Directors’ self assessment policy is a guideline used as a form of accountability in collegially assessing the performance of the Board of Directors. The self assessment is done individually by the directors to evaluate the performance of Board of Directors, and not the individual performances of the directors. It is expected that each director is able to contribute to a better overall performance by doing the self assessment. The policy may comprise the activity of assessment, the purposes and objectives, the periods of execution, and the standard or assessment criteria used based on the recommendation given by Nomination and Remuneration Function for Public Companies. The required functions are according to the Regulation of Financial Services Authority No. 34/ POJK.04/2014 on the Nomination and Remuneration Committees for Public Companies.

146

Analysis



Analysis

6.2) The self assessment policy that evaluates the performance of the Board of Directors is disclosed in this year’s Annual Report of the Public Company. Explanation The disclosure of the self assessment policy on the performance of Board of Directors is executed not only to fulfill the transparency aspect as a form of responsibility, but also to deliver important information on the improvement efforts regarding the public company. This information is very useful to convince shareholders/investors that the management of the company is constantly heading towards a better direction. By disclosing the policy, the shareholders/investors are able to know the check and balance mechanism for the Board of Directors’ performance.


6.3) The Board of Directors have a resignation policy if a member of Board of Directors is involved in a financial crime. Explanation The resignation policy for members of Board of Directors who involved in a financial crime is a policy that may increase the confidence of stakeholders in the Public Company, so that the integrity of the company still remains. This policy is necessary to help ease the legal proceedings and avoid any disruptions in the company’s activity. In addition to the morality, this policy builds the ethical culture in the environment of the public company. The policy may comprise code of ethics that is applicable to the Board of Directors. An involvement in financial crime refers to the conviction of a director by the authority. Financial crimes refer to manipulation and a variety of financial frauds in financial services. It also includes Money Laundering as stated in Act no. 8 of 2010 on the Prevention and Combating of Money Laundering.


Management Report Company Profile Management Discussion and Analysis

D.

2016 Performance


Participation of Stakeholders 7.

Increasing the Company’s Governance Aspect By Means of Stakeholders Participation. Good corporate governance should include the overall important aspects of Public Company. In addition, good corporate governance should also be able to recognize the role, and requires the cooperation of all stakeholders in creating sustainability in the long term.



Recommendation: 7.1) The Public Company has the policy to prevent insider trading. Explanation An individual who has inside information is prohibited from engaging in a securities transaction using the information as defined in the Capital Markets Law. The public company is able to minimize insider trading by means of prevention policy, such as strictly separating public data and/or information from confidential data and/or information, as well as splitting tasks and responsibilities for managing information proportionally and efficiently.



147



148

Analysis

7.2) The Public Company has an anti-corruption policy and anti-fraud policy. Explanation The anti-corruption policy is useful to ensure the activities at the Public Company are executed legally, prudently, and according to the principles of good governance. The policy is its own form or a part of code of ethics. The policy comprises programs and procedures that are able to resolve the practice of corruption, kickbacks, fraud, bribery, and/or gratification within the Public Company. The scope of the policy must depict the Public Company’s prevention against all practices of corruption on both the giving and receiving end.


7.3) The Public Company has a policy on selecting and increasing the ability of suppliers or vendors. Explanation The policy on selecting suppliers or vendors is useful to ensure the public company has the goods and services with competitive prices and good qualities. Additionally, the policy on increasing the ability of suppliers or vendors is useful to ensure the supply chain to operate efficiently and effectively. The ability of suppliers or vendors in providing or fulfilling the goods or services needed by the company will affect the company’s output quality. Thus, the execution of these policies may guarantee supply continuity from both quantity and quality needed by the public company. These policies comprise criteria in choosing suppliers or vendors, transparency mechanisms in procurement, the effort in increasing the ability of suppliers or vendors, and compliance in rights of suppliers or vendors.


7.4) The Public Company has a policy on complying creditors’ rights. Explanation The policy on complying creditors’ rights is used as a guide to get a loan for creditors. The goal of this policy is to fully preserve the rights and creditors’ confidence in the Public Company. The policy comprises the consideration on entering into agreements, and following up on the compliance of creditors’ rights by the Public Company.


7.5) The Public Company has a policy on the whistleblowing system. Explanation The whistleblowing policy that has been well organized will assure witnesses or informers of their protection from an indication of violation done by an employee or management of the public company. The execution of this policy will impact on the establishment of good governance. This policy comprises types of violations that are able to be reported through the whistleblowing system, a guide on accusation, protection and insurance of informer’s confidentiality, handling the accusation, the party who handles the accusations, the outcome after handling the situation, and the actions taken after the accusation.



Company Profile

E.

Currently, the Bank has no long-term incentives policy for the Board of Directors and employees. But the adoption of long-term incentive policy is under study

Management Report

7.6) The Public Company has a policy on giving long-term incentives to Board of Directors and employees. Explanation Long-term incentives are incentives given based on the achievement of longterm performance. The plan of long-term incentives has the basic premise that the company’s long-term performance is reflected on the growth in value of the shares or long-term targets of other companies. Long-term incentives are useful in preserving loyalty and motivating Board of Directors and employees to perform better or become more productive, as these will impact on the long-term performance of the company. The policy on long-term incentives is the company’s commitment to give incentives to directors and employees under the terms, procedures, and forms that are in accordance to the longterm goal of the Public Company. This policy comprises the purposes and objectives of giving long-term incentives, the terms and procedures of giving incentives, as well as the conditions and risks that must be mindful of by the Public Company when giving an incentive. This policy is also consisted in the remuneration policy of the Public Company.

Analysis

Information Disclosure 8.

Increasing the Implementation of Information Disclosure. Information disclosure should be done accurately and timely on all important company information including financial condition, performance, ownership and control, and governance of Public Company.




8.2) The Public Company’s Annual Report discloses the final beneficial owner of shares in the ownership of the Public Company at least 5% (five percent), in addition to the disclosure of the final beneficial ownership of the Public Company through the major and controlling shareholder. Explanation The regulations on the capital markets sector which regulates the delivery of the Public Company’s Annual Report has also regulated the compliance of information disclosure on the shareholder who has 5% or more of the company’s shares, as well as of direct or indirect information disclosure on the major and controlling shareholder of the company up to the final beneficial owner of the shares ownership. In the Governance Guidelines, it is advised to disclose the final beneficial owner who owns at least 5% of the Public Company’s shares in addition to disclosing the final beneficial owner of the shares ownership by the major and controlling shareholders.


Recommendation: 8.1) The Public Company makes use of information technology more openly as the media of information disclosure. Explanation The use of information technology may be useful as a media of information disclosure. In addition to the informations mentioned in the regulations, useful informations regarding the Public Company will also be disclosed to shareholders/investors. By using the information technology more openly, it is expected that the company may increase their effectivity in sharing the company’s information. Nevertheless, the use of information technology has to also pay attention to how it will cost and benefit the company.

2016 Performance



149


GCG Assessment The implementation of GCG principles is also a factor considered in assessing the soundness of a bank, aside from the risk profile, rentability, and capital strength as stated in FSA (OJK) Regulation No.4/POJK.03/2016 on Commercial Bank Soundness Level and supported by Circular Letter No.15/15/DPNP dated

No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

April 29, 2013 on Implementation of Good Corporate Governance and FSA/OJK Regulation No.55/ POJK.03/2016 dated December 7, 2016. As such, the Bank regularly conducts GCG self- assessment on semi-annual basis with the following eleven criteria defined by Bank Indonesia, currently Financial Services Authority (FSA/ OJK).

GCG self-assessment are carried out comprehensively and in a focused manner by integrating assessment factors into 3 (three) governance aspects, namely, governance structure, governance process, and governance outcome.

Assessment Criteria

2016 Score

Implementation of Duties and Responsibilities of Board of Commissioners Implementation of Duties and Responsibilities of Board of Directors Integration and Implementation of Tasks of Committees Management of Conflicts of Interests Implementation of Compliance Function of the Bank Implementation of Internal Audit Function Implementation of External Audit Function Implementation of Risk Management and Internal Control Function Provision of Fund to Related Parties and Large Exposure Transparency of the Bank’s Financial and Non-Financial Conditions, GCG Implementation Report and Internal Reports Bank’s Strategic Plans

2 2 2 2 2 2 1 2 2 1

Composite Score based on Bank’s Self-Assessment

2 1.82

Note: Based on the results of the assessment provided by the Financial Services Authority on the implementation of bank GCG in the second half of 2016 at a value of 3 (three).

Based on the results of GCG Self-Assessment conducted in the second half of 2016, which was reflected in the Matrix of GCG Rating, the Bank earned the second rank with predicate of Good and average score of 1.81 on the implementation of GCG.

150


This reflects that the implementation of Good Corporate Governance principles in general by the management of the Bank was good. This is reflected from the very adequate fulfillment of the Good Corporate Governance principles. Any weakness in the

GCG implementation, if any, are generally considered insignificant and could be corrected by the Bank’s Management.

GCG Structure In addition, the structure also includes a number of supporting functions such as internal control, risk management, corporate secretary, and compliance function as well as committees under the Board of Commissioners and Directors.

Management Report

the Bank’s governance structure comprises of several organs: General Meeting of Shareholders, the Board of Commissioners, and the Board of Directors. These organs carry out their respective functions in accordance with prevailing law and regulation.

2016 Performance

Pursuant to the Law of the Republic of Indonesia Number 40 of 2007 on Limited Liability Companies and FSA/OJK Regulation No. 55/POJK.03/2016 dated Desember 7, 2016 regarding the Implementation of Corporate Governance for Commercial bank,

Structure and Governance Relation GMS Company Profile

Remuneration & Nomination Committee




Audit Committee

Board of Directors

IT Committee

Credit Committee

Asset & Liability Committee (ALCO)

Product & New Activity Committee

Procurement Committee

Fraud Oversight Committee


Risk Management Committee

HR Committee

Special Asset Management Committee



151


General Meeting of Shareholders (GMS) The GMS as the highest organ in the Bank serves to facilitate in making important decision with due regard to the Bank’s interest, in fair and transparent manner. GMS and/ or the shareholders can not intervene against performing the duties, functions and authorities of the Board of Commissioners and the Board of Directors, however such matter shall not diminish the authority of GMS to exercise its rights according to the Bank’s Articles of Association and the prevailing laws and regulations.

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Share hol de rs

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« Pr ng ovide Guideline and monitori


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152

B

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GMS

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In relation to GCG structure, GMS, the Board of Commissioners and/ or Board of Directors has a clear definition of rights and authorities which is illustrated as follows:

e id ov

and dis mi ss

General Meeting of Shareholders (GMS) is the Bank’s organ which has the authorities not delegate to the Board of Directors and the Board of Commissioners with the limits as specified in the Law of Republic Indonesia No. 40 of 2007 on Limited Liability Company and/or Articles of Association of the Bank.


153


At the end of discussion of each agenda of GMS, the meeting’s Chairman shall provide the Shareholders or their proxies an opportunity to raise questions/ comments related to the agenda of GMS. The Chairman of GMS or a Director appointed by the


The Bank’s GMS devided into two types which are Annual GMS and Extraordinary GMS. GMS of the Bank, both Annual GMS and Extraordinary GMS, are organized refers to the provisions as set out in the Bank’s Articles of Association and the prevailing laws and regulations.


Mechanism of the Bank’s GMS Implementation

Bank has complied and organized the GMS in accordance with applicable regulations, with the following steps: 1. The Bank submitted a notification to the FSA/OJK regarding the plan to hold a GMS not later than five (5) business days prior to the announcement of a GMS.

The GMS is chaired by one of Board of Commissioners’ member who appointed by the Board of Commissioners and held in Indonesian. The GMS shall begin with reading of the GMS rules. In the GMS opening, GMS Chairman shall convey the shareholders on the Bank’s condition, agendas of GMS, decision-making mechanism for agendas of GMS, and procedures to exercise the shareholders’ voting rights in asking questions and/or comments.

Company Profile

The shareholders are expected to separate their functions as shareholders and as members of the Board of Commissioners or Board of Directors in a situation where a shareholder sits on one of the said two corporate organs.

Extraordinary GMS (EGM) EGM is held at any time deemed necessary for the Bank’s interest by the Board of Directors at the written request of the Board of Commissioners or shareholders. The shareholders who entitled to apply such request are 1 (one) or more shareholders which collectively represent at least 1/10 (one-tenth) of the total shares with voting rights. Planning and Conducting GMS Both AGM and EGM is convened with careful planning and adherence to procedural guidelines in FSA/OJK Regulation No. 32/ POJK.04/2014 dated December 8, 2014 on Planning and Conducting of GMS of the Public Company.

2. The Bank announced to the shareholders through 1 (one) nationwide circulation newspaper, 14 (fourteen) days prior to the notice of the GMS, excluding the announcement date and the notification date for GMS. 3. The Bank annouced the notice of GMS through 1 (one) nationwide newspaper, IDXNet, and its website, 21 (twenty one) days prior to the GMS date, excluding the notice date of GMS and the GMS date. 4. The Bank submitted the proof of announcement and notice of GMS to the FSA/OJK within 2 (two) business days after the publication of announcement and notice of GMS. 5. The Bank submitted the results of GMS to the FSA/ OJK and IDX at the latest 2 (two) days after the GMS and announced it to the public through nation-wide circulation newspaper.

Management Report

In the Bank’s corporate governance structure, GMS has the authorities to take decision, among others related to: 1. Amendment of the Association. 2. Designation and Dismissal of the members of Board of Commissioners and Board of Directors. 3. Approval on the Bank’s Annual Report. 4. Appointment of the Public Accountant Firm. 5. Determination of the use of the Bank’s profit in the current financial year. 6. Resolutions related to consolidation/merger, acquisition, bankruptcy and dissolution. 7. Other possible agendas refer to the Bank’s Articles of Association and the prevailing laws and regulations.

Annual GMS (AGM) AGM is organized not later than 6 (six) months after the end of financial year. During the meeting, the shareholders shall discuss the predetermined agendas, including to make decision and provide approval on matters relating to governing bodies, major corporate transactions, and other matters require the GMS’ approval for the Bank’s satisfaction without prejudice to provisions in the Articles of Association of the Bank.

2016 Performance

Authorities and Responsibilities of Shareholders


Chairman of GMS shall answer and/or respond to the questions/ comments raised by the shareholders present. After all questions/comments are answered and responded properly, further, the GMS shall adopt the resolutions based on deliberation to reach consensus. In the event of deliberation failed to reach consensus, resolutions

will be adopted by voting. Voting was conducted verbally and only shareholders or their proxies are entitled to vote. Each share entitles its holder to cast one vote. The Bank has appointed an independent party, namely, Notary, for the purpose of counting and validating votes as well as drafting the minutes of GMS.

Implementation of 2015 GMS In 2015, the Bank held 2 GMS, namely, the Annual GMS (AGM) on February 27, 2015, and an Extraordinary GMS (EGM) on October 9, 2015.

AGM (February 27, 2015) AGM Notification to Regulators Submitted the Notification Letter to FSA (OJK) dated January 14, 2015.

154

AGM Announcement

AGM Invitation

Announced on January 21, 2015 through an advertisement on Investor daily newspaper and Kontan daily newspaper, as well as through the Bank’s website

Announced on February 5, 2015 through an advertisement on Investor daily newspaper and Kontan daily newspaper, as well as through the Bank’s website.

No.

Agendas

1.

Approval of Annual Report including Board of Directors’ Report, Board of Commissioners’ Report and Accountability on Use of Rights Issue II & IV Proceeds as well as approval of financial statements for the financial year ended in December 31, 2014

AGM Execution AGM was held on February 27, 2015, at QNB Tower 3rd Floor, 18 Parc SCBD, Jl. Jenderal Sudirman Kav. 52-53, Jakarta. Chaired by Suroto Moehadji, the Independent Commissioner Appointed by the Board of Commissioners of the Bank.

AGM Results Announced on March 3, 2015 through an advertisement on Investor daily newspaper and Kontan daily newspaper, as well as through the Bank’s website.

Resolutions a.

b.

Accepted and approved the Bank’s Annual Report for the financial year ended on December 31, 2014, including Board of Directors Report and Board of Commissioners Supervisory Report, AND Accountability on Use of Limited Public Offering II &IV; Accepted and approved the Bank’s Annual Financial Statements for the financial year ended on December 31, 2014, audited by the Public Accountant Firm “Purwantono, Sungkoro & Surja” a member of the Ernst & Young Public Accounting Firm according to its Report No. RPC-6613/PSS/2015 dated January 27, 2015, with “unqualified opinion”, and granted full release and discharge for all members of the Board of Directors and the Board of Commissioners of any responsibilities and obligations (acquit et de charge) for the management and supervision performed in 2014, provided that such actions are reflected in the Financial Statements of 2014.

2

Approval for the use of net profit for the financial year ended in December 31, 2014

Approved the use of Bank’s net profit in financial year 2014 amounting to IDR 120,836,590,909 to strengthen Bank’s CAR, and thus no dividend distribution.

3.

Appointment of Public Accountant Firm for the financial year of 2015 and provide authorization to Board of Directors to determine honorarium and other requirements.

Approved to appoint the Public Accounting Firm Purwantono, Sungkoro & Surja, affliated with Public Accounting Firm Ernst & Young as the Bank’s Public Accountant Firm, to audit the Bank’s book for the financial year ended on December 31, 2015, and authorized the Board of Directors to determine the honorarium amount for the Public Accountant Firm and other requirements.


4.

Agendas

Changes in the composition of the Board of Commissioners and Board of Directors.

Resolutions

a.

Board of Directors: President Director Director Director Director Independent Director Director

b.

Approved the appointment of Novi Mayasari as Director which will be effective after obtained approval from FSA (OJK). Approved to authorize to the Bank’s Board of Directors to state the changes in composition of Board of Commissioners and Board of Directors of the Bank in a separate Notarial Deed and affirmed the meeting resolution after appointment of Novi Mayasari as the Bank’s Director approved by FSA (OJK) which will be conducted at the same time or separately in line with the FSA (OJK)’s approval, including to notify/report to authorities and to register as well as take all necessary action in relation to the decision..

a.

b.


155


c.

Approved the amendment to Article 4 of the Bank’s Articles of Association in relation to the increase in the Bank’s authorized capital from 10,000,000,000 shares with nominal price of Rp250 per share or with total nominal price of Rp2,500,000,000,000 to 32,000,000,000 shares with nominal price of Rp250 per share and total nominal price of Rp8,000,000,000,000; Approved the amendment to articles in the Bank’s Article of Association, among other, to adapt prevailing provision in accordance with Financial Services Authority (OJK) Regulation Number 32/POJK.04/2014 dated December 8, 2014 concerning Planning and Conducting General Meeting of Shareholders of Public Company and Financial Services Authority (OJK) Regulation Number 33/ POJK.04/2014 dated December 8, 2014 concerning the Board of Directors and Board of Commissioners of Issuers or Public Company and other changes as well as recomposition of the Bank’s entire Articles of Association; Authorized the Board of Directors of the Bank to: 1) State the resolution of this Meeting’s agenda in Notarial Deed and take all necessary actions in relation to this Meeting’s resolution; 2) Apply for approval and/or inform the Ministry of Law and Human Rights of the Republic of Indonesia, register and announce the amendement of the Articles of Association so that the amendment is legally in force including to make changes or addition on the amendment of this Article of Association if required by authorities and take all action needed and required by the applicable regulation.


Approval of the amendment to Article 4 of the Bank’s Articles of Association by increasing Authorized Capital and changes in order to adapt FSA (OJK) Regulation

b.

Approved the granting of power and authorities to Qatar National Bank as the Bank’s major shareholder which has 82.59% of the Bank’s shares to determine and distribute the amount of salary or honorarium and allowance for financial year 2015 for each member of the Board of Commissioners, and Approved the granting of power and authority to Qatar National Bank as the major shareholder of the Company to determine the amount of salary, fees and allowances for the financial year 2015 to each member of the Board of Directors of the Bank and to grant the power and authority to the Board of Commissioners to determine the division of duties and authorities to each Director of the Bank.


a.

: Andrew McGregor Duff : Azhar bin Abdul Wahab : Lloyd William Rolston : Rusli : Windiartono Tabingin : Hery Syafril

Company Profile

6.

Approve tasks, authorities, honorarium/ salary and other allowances for member of the Board of Commissioners and Board of Directors.

Management Report

Approved changes in composition of the Bank’s Board of Commissioners and Board of Directors effective from the adjournment of meeting until the adjournment of AGM held in 2018 with the composition of Board of Commissioners and Board of Director as follow: Board of Commissioners: President Commissioner : Ali Ahmed Z A Al-Kuwari Commissioner : Grant Eric Lowen Commissioner : Muthu Chidambaram Independent Commissioner : Suroto Moehadji Independent Commissioner : Muhammad Anas Malla

c.

5.

2016 Performance

No.


Resolution Making and Follow-Up of the Resolution of 2015 AGM All of the resolutions of the Bank’s 2015 AGM were resolved based on an amicable deliberation to reach a mutual consensus and all of the resolutions have been realized.

Attendance in 2015 AGM The shareholders who entitled to attend the AGM are the shareholders who registered in the Register of Shareholders as of February 4, 2015. The Meeting was attended by the shareholders and/ or their proxies who represented 7,262,346,327 shares or approximately 82.93% of the total shares issued by the Bank. More than 50% or half of the total shares were in attendance, thus it met the

quorum requirements of AGM, so as valid and entitled to make legal and binding resolutions. The AGM was attended by several members of the Board of Commissioers, namely Suroto Moehadji, Muhammad Anas Malla and Nasrul Husin as well as all members of the Board of Directors. In addition, Notary, representative from Share Registrar and Public Accountant also attended the AGM.

EGM (October 9, 2015) AGM Notification to Regulators

AGM Announcement

AGM Invitation

AGM Execution

AGM Results

Submitted the Notification Letter to FSA (OJK) dated August 25, 2015.

Announced on September 2, 2015 through an advertisement on Kontan daily newspaper, and through the Bank’s website.

Announced on September 17, 2015 through an advertisement on Kontan daily newspaper, and through the Bank’s website.

EGM was held on October 9, 2015, at QNB Tower 3rd Floor, 18 Parc SCBD, Jl. Jenderal Sudirman Kav. 52-53, Jakarta. Chaired by Suroto Moehadji, the Independent Commissioner, appointed by the Board of Commissioners of the Bank.

Announced on October 13, 2015 through an advertisement on Kontan daily newspaper, and through the Bank’s website.

No. 1.

Agendas Changes in the composition of the Board of Commissioners and Board of Directors.

Resolutions a.

b.

c.

156


Accepted the resignation of Hery Syafril as a Director of the Bank. The resignation became effective since the adjournment of the Meeting. The Bank thanked Hery Syafril for his contribution to the Bank during his tenure as a Director of the Bank; Approved the appointment of Djoko Sarwono as an Independent Commissioner of the Bank. The appointment shall become effective upon FSA (OJK)’s fit and proper test approval; Approved the appointment of Windiartono Tabingin as an Independent Director of the Bank. The appointment became effective since the adjournment of AGM of the Bank held on February 27, 2015 up to the adjournment AGM of the Bank to be convened in 2018; The appointment of Djoko Sarwono as the Bank’s Independent Commissioner shall become effective upon fit and proper test approval from FSA (OJK), thus the composition of the Board of Commissioners and Board of Directors of the Bank from the adjournment of the Meeting before Djoko Sarwono received approval from FSA (OJK) on Fit and Proper Test are as follows:

Agendas

Board of Commissioners: President Commissioner Commissioner Commissioner Independent Commissioner Independent Commissioner

: Ali Ahmed Z A Al-Kuwari : Grant Eric Lowen : Muthu Chidambaram : Suroto Moehadji : Muhammad Anas Malla

Board of Directors: President Director Director Director Director Director Independent Director

: Andrew McGregor Duff : Azhar bin Abdul Wahab : Lloyd William Rolston : Rusli : Novi Mayasari : Windiartono Tabingin

Furthermore, the composition of the Board of Commissioners and the Board of Directors of the Bank after Djoko Sarwono received approval from FSA (OJK) on fit and proper test are as follows: Board of Commissioners: President Commissioner : Ali Ahmed Z A Al-Kuwari Commissioner : Grant Eric Lowen Commissioner : Muthu Chidambaram Independent Commissioner : Suroto Moehadji Independent Commissioner : Muhammad Anas Malla Independent Commissioner : Djoko Sarwono

Board of Directors: President Director Director Director Director Director Independent Director

The tenure of all members of the Board of Commissioners and the Board of Directors as mentioned above are up to the adjournment of the AGM of the Bank to be convened in 2018, without prejudice to the rights of the GMS to dismiss at any time.

d.

Authorized the Board of Directors to state the changes of composition of Board of Commissioners and Board of Directors of the Bank in a separate Notarial Deed (if necessary) notify/report the Ministry of Law and Humans Right of Republic of Indonesia.


157


were in attendance, thus it met the quorum requirements of EGM, so as valid and entitled to make legal and binding resolutions. The EGM was attended by several members of the Board of Commissioners, namely Suroto Moehadji and Muhammad Anas Malla as well as all the members of Board of Directors. In addition, Notary, representative from Share Registrar and Public Accountant were also attended the EGM.


Attendance in EGM dated October 9, 2015 The shareholders who entitled to attend the EGM are the shareholders who registered in the Register of Shareholders as of September 16, 2015. The meeting was attended by the shareholders and/or their proxies who represented 7,299,946,780 shares or approximately 83.36% of the total shares issued by the Bank. More than 50% or half of the total shares


: Andrew McGregor Duff : Azhar bin Abdul Wahab : Lloyd William Rolston : Rusli : Novi Mayasari : Windiartono Tabingin

Company Profile

All of the resolutions of the Bank’s EGM were resolved by deliberation to reach a mutual consensus and all of the resolutions have been realized.

Resolutions

Management Report

Resolution Making and Follow-Up of the Resolution of 2015 EGM

2016 Performance

No.


Implementation of 2016 GMS In 2016, the Bank held three (3) GMS, namely 1 (one) Annual GMS (AGM) on February 16, 2016 and 2 (two) times the Extraordinary GMS (EGM) respectively on April 13, 2016 and on December 19, 2016.

AGM (February 16, 2016) AGM Notification to Regulators Submitted the Notification Letter to FSA/OJK dated December 23, 2015 regarding the AGM Implementation Plan.

Announced on January 8, 2016 through 1 (one) daily nationwide circulation newspaper namely Investor Daily, and through the Bank’s website.

AGM Invitation Announced on January 25, 2016 through 1 (one) daily nationwide circulation newpaper namely Investor Daily, and through the Bank’s website.

AGM Execution AGM was held on February 16, 2016, at QNB Tower 3rd Floor, 18 Parc SCBD, Jl. Jenderal Sudirman Kav. 52-53, Jakarta. Chaired by Suroto Moehadji, the Independent Commissioner appointed by the Board of Commissioners of the Bank.

AGM Results Announced on February 18, 2016 through 1 (one) daily nationwide circulation newspaper namely Investor Daily, and through the Bank’s website.

No.

Agendas

1.

Approval of Annual Report including Board of Directors’ Report, Board of Commissioners’ Report and legalization of financial statements for the financial year ended in December 31, 2015

a.

Determination of the use of net profit for the financial year ended in December 31, 2015

Approved the use of Bank’s net profit in financial year ended on December 31, 2015 amounting to IDR 156,045,208,672, as the following: a. In the amount of IDR1,000,000,000 set aside as reserves to comply with Article 70 paragraph 1 in the Law No. 40 of 2007 on Limited Liability Company; b. The remainder of the net profit after deducting reserves, which is amounted to IDR 155,045,208,672, entirely determined as retained earnings of the Bank. Thereby, not distributed as dividends to the shareholders.

2

158

AGM Announcement


Resolutions

b.

Well accepted and approved the Bank’s Annual Report for the financial year ended on December 31, 2015, including Board of Directors Report and Board of Commissioners Supervisory Report; Well accepted and approved as well as legalized the Bank’s Financial Statements for the financial year ended on December 31, 2015, audited by the Public Accountant Firm “Purwantono, Sungkoro & Surja” a member of the Ernst & Young Public Accounting Firm according to its Report No. RPC-216/PSS/2016 dated January 11, 2016, with “unqualified opinion”, therefore, granted full release and discharge for all members of the Board of Directors and the Board of Commissioners of any responsibilities and obligations (acquit et de charge) for the management and supervision performed in 2015, provided that such actions are reflected in the Financial Statements of 2015.

3.

Agendas Appointment of Public Accountant Firm for the financial year of 2016

Resolutions a.

b.

Changes in the composition of the Board of Commissioners and Board of Directors of the Bank

a. b.

c.

d.

Accepted the resignation of Rusli as the Bank’s Director. The resignation is effective since the closing of AGM; Accepted the resignation of Muthu Chidambaram as the Bank’s Commissioner and Andrew McGregor Duff as the Bank’s President Director. The resignation shall become effective since February 28, 2016; Approved appointment of M. Agus S. Meliala as the Bank’s Director wih term of office since the date of FSA/OJK approval on the Fit and Proper Test up to the Bank’s AGM which will be held in 2018; 1) By the resignation of Rusli as the Bank’s Director, thereby the composition of members of the Board of Directors and Board of Commissioners since the closing of AGM, are as follows:

: Andrew McGregor Duff : Azhar bin Abdul Wahab : Lloyd William Rolston : Windiartono Tabingin : Novi Mayasari

Board of Commissioners: President Commissioner Independent Commissioner Independent Commissioner Independent Commissioner Commissioner Commissioner

: Ali Ahmed Z A Al-Kuwari : Suroto Moehadji : Djoko Sarwono : Muhammad Anas Malla : Grant Eric Lowen : Muthu Chidambaram


Board of Directors: President Director Director Director Independent Director Director

Board of Commissioners: President Commissioner Independent Commissioner Independent Commissioner Independent Commissioner Commissioner

: Ali Ahmed Z A Al-Kuwari : Suroto Moehadji : Djoko Sarwono : Muhammad Anas Malla : Grant Eric Lowen



: Azhar bin Abdul Wahab : Lloyd William Rolston : Windiartono Tabingin : Novi Mayasari


2) By the effectively of resignation of Muthu Chidambaram as the Bank’s Commissioner and Andrew McGregor Duff as the Bank’s President Director on February 28, 2016 as well as appointment of M. Agus S. Meliala as the Bank’s Drector shall be effective since the date of FSA/OJK approval on Fit and Proper Test, thereby the composition of members of the Board of Directors and Board of Commissioners of the Bank since February 28, 2016, are as follows: Board of Directors: Director Director Independent Director Director

Company Profile

Approved to appoint the Public Accounting Firm “Purwantono, Sungkoro & Surja”, a member of the Ernst & Young Global Limited as the Bank’s Public Accountant Firm, to audit the Bank’s book for the financial year ended on December 31, 2016; Authorized the Board of Directors to determine the honorarium amount for such Public Accountant Firm and other requirements.

Management Report

4.

2016 Performance

No.

159


No.

Agendas

Resolutions

Board of Directors: Director Director Independent Director Director Director

: Azhar bin Abdul Wahab : Lloyd William Rolston : Windiartono Tabingin : Novi Mayasari : M. Agus S. Meliala

Board of Commissioners: President Commissioner Independent Commissioner Independent Commissioner Independent Commissioner Commissioner

: Ali Ahmed Z A Al-Kuwari : Suroto Moehadji : Djoko Sarwono : Muhammad Anas Malla : Grant Eric Lowen

4) The term of office of all Board of Directors and Board of Comissioners of the Bank such above are for the term of office that will be ended upon the closing of the Bank’s AGM which will be held in 2018, without prejudice the AGM rights to dismiss at any time.

e.

Granted an authorization to the Bank’s Board of Directors to state the changes of composition of Board of Commissioners and Board of Directors of the Bank in a separate deed before a Notary (if required) and to arrange announcement to the Minister of Law and Humans Right of Republic of Indonesia.

5.

Determination of the honorarium/ salary and other allowance for the Board of Directors and Board of Commissioners’ members.

Approved the delegation of power and authority to the Qatar National Bank S.A.Q as the Bank’s Controller Shareholder which has 82.59% shares of the Bank to determine the amount of salary or honorarium, premium and other allowances for the financial year of 2016 to respectively member of Board of Commissioners and Board of Directors of the Bank.

6.

Accountability of Realization on the Fund Usage of Limited Public Offering II Result

Accepted Accountability Report of Realization on the Fund Usage of Initial Public Offering II.

Resolution Making and Follow-Up of the Resolution of 2016 AGM All of the resolutions of the Bank’s AGM were resolved by deliberation to reach a mutual consensus and all of the resolutions have been realized.

160

3) The composition of members of Board of Directors and Board of Comissioners of the Bank upon the appointment of M. Agus S. Meliala as the Bank’s Director has obtained the FSA/OJK approval on Fit and Proper Test, are as follows:


Attendance in 2016 AGM The shareholders who entitled to attend the AGM are the shareholders who registered in the Register of Shareholders of the Bank as of January 22, 2016 issued by PT Adimitra Jasa Korpora as the Bank’s Share Administration Bureau. AGM was attended by the shareholders and/or their proxies who represented 7,975,790,928 shares or approximately 91.08% of the total shares issued by the Bank, therefore, the AGM has met the

quorum requirements of AGM, so as valid and entitled to make legal and binding resolutions. The AGM was attended by several members of the Board of Commissioners, namely Suroto Moehadji, Djoko Sarwono and Muhammad Anas Malla, as well as all members of the Board of Directors. In addition, AGM was also attended by the Notary, representatives from Share Administration Bureau and Public Accountant.

2016 Performance

EGM (April 13, 2016) EGM Notification to Regulators

1.

Announced on March 22, 2016 through 1 (one) daily nationwide circulation newspaper namely Investor Daily, and through the Bank’s website.

EGM Execution EGM was held on April 13, 2016, at QNB Tower 3rd Floor, 18 Parc SCBD, Jl. Jenderal Sudirman Kav. 52-53, Jakarta. Chaired by Suroto Moehadji, the Independent Commissioner, appointed by the Board of Commissioners of the Bank.

Agendas Changes in the composition of the Board of Commissioners and Board of Directors of the Bank

EGM Results Announced on April 14, 2016 through 1 (one) daily nationwide circulation newspaper namely Investor Daily, and through the Bank’s website.

Company Profile

No.

Announced on March 7, 2016 through 1 (one) daily nationwide circulation newspaper namely Investor Daily, and through the Bank’s website.

EGM Invitation

Resolutions Approved the appointment of Andrew McGregor Duff as the Bank’s Commissioner and R. Andi Kartiko utomo as the Bank’s Director, with term of office since the date of FSA/OJK approval on Fit and Proper Test up to the Bank’s AGM which will be held in 2018. Thereby, the composition of members of Board of Commissioners and Board of Directors upon the appointment of Andrew McGregor Duff as the Bank’s Commissioner as well as M. Agus S. Meliala and R. Andi Kartiko Utomo respectively as the Bank’s Director, upon obtaining FSA/ OJK approval on Fit and Proper Test, are as follows:

Board of Commissioners: President Commissioner Independent Commissioner Independent Commissioner Independent Commissioner Commissioner Commissioner

Board of Directors: Director : Azhar bin Abdul Wahab Director : Lloyd William Rolston Independent Director : Windiartono Tabingin Director : Novi Mayasari Director : M. Agus S. Meliala*) Director : R. Andi Kartiko Utomo*) *) shall be effective upon obtaining FSA/OJK approval on fit and proper test

The term of office of all members of Board of Commissioners and Board of Directors of the Bank shall be expired at the closing of AGM of the Bank which will be held in 2018, without prejudice the GMS’ rights to dismiss at any time.

b.

Granted an authorization to the Bank’s Board of Directors to state the changes of composition of Board of Commissioners and Board of Directors of the Bank in a separate deed before a Notary (if required) and to arrange announcement to the Minister of Law and Humans Right of Republic of Indonesia

: Ali Ahmed Z A Al-Kuwari : Suroto Moehadji : Djoko Sarwono : Muhammad Anas Malla : Grant Eric Lowen : Andrew McGregor Duff*)


a.


161



Management Report

Submitted the Notification Letter to FSA/OJK dated February 26, 2016 regarding the EGM Implementation Plan.

EGM Announcement


Resolution Making and Follow-Up of the Resolution of EGM on April 13, 2016 All of the resolutions of the Bank’s EGM were resolved by deliberation to reach a mutual consensus and all of the resolutions have been realized.

162


Attendance in EGM dated April 13, 2016 The shareholders who entitled to attend the EGM are the shareholders who registered in the Register of Shareholders of the Bank as of March 21, 2016 issued by PT Adimitra Jasa Korpora as the Bank’s Share Administration Bureau. EGM was attended by the shareholders and/or their proxies who represented 7,262,343,962 shares or approximately 82.93% of the total shares issued by the Bank,

therefore, the EGM has met the quorum requirements of EGM, so as valid and entitled to make legal and binding resolutions. The EGM was attended by several members of the Board of Commissioners, namely Suroto Moehadji, Djoko Sarwono and Muhammad Anas Malla, as well as all members of the Board of Directors. In addition, EGM was also attended by the Notary and representatives from Share Administration Bureau.

2016 Performance

EGM (December 19, 2016) EGM Notification to Regulators

Agendas Changes in the composition of the Board of Directors of the Bank

EGM was held on December 19, 2016, at QNB Tower 3rd Floor, 18 Parc SCBD, Jl. Jenderal Sudirman Kav. 52-53, Jakarta. Chaired by Djoko Sarwono, the Independent Commissioner, appointed by the Board of Commissioners of the Bank.

EGM Results Announced December 21, 2016 through 1 (one) daily nationwide circulation newspaper namely Investor Daily, and through the Bank’s website.

Resolutions a.

has been appointed through the Bank’s EGM dated April 13, 2016 and shall be effective upon obtaining approval from FSA (OJK) on Fit and Proper Test. **) shall be effective upon obtaining approval from FSA (OJK) on fit and proper test.


163


*)


Approved to cancel the appointment of R. Andi Kartiko Utomo as the Bank’s Director to comply with the prevailing provisions according to the Circular Letter of OJK No. 39/SEOJK.03/2016 dated September 13, 2016. b. - Approved the re-appointment of R. Andi Kartiko Utomo and appointment of Junita Wangsadinata respectively as the Bank’s Director. - Appointment of R. Andi Kartiko Utomo as the Bank’s Director with length of service since the date of FSA (OJK) approval on Fit and Proper Test until the Bank’s AGM which will be held in 2018. - While, the appointment of Junita Wangsadinata as the Bank’s Director with length of service since February 16, 2017 and upon obtaining FSA (OJK) approval on Fit and Proper Test until the Bank’s AGM which will be held in 2018. - Therefore, the composition of Board of Commissioners and Board of Directors members upon the appointment of Andrew McGregor Duff as the Bank’s Commissioner and R. Andi Kartiko Utomo as the Bank’s Director, obtained approval from FSA (OJK) on Fit and Proper Test, are as follows: Board of Commissioners: President Commissioner : Ali Ahmed Z A Al-Kuwari Independent Commissioner : Suroto Moehadji Independent Commissioner : Djoko Sarwono Independent Commissioner : Muhammad Anas Malla Commissioner : Grant Eric Lowen Commissioner : Andrew McGregor Duff*) Board of Directors: Director : Azhar bin Abdul Wahab Director : Lloyd William Rolston Independent Director : Windiartono Tabingin Director : Novi Mayasari Director : R. Andi Kartiko Utomo**)


1.

Announced on October 27, 2016 through 1 (one) daily nationwide circulation newspaper namely Investor Daily, and through the Bank’s website. In addition, the Bank also announced reinvitation on November 17, 2016 through 1 (one) daily nationwide circulation newspaper namely Investor Daily, and through the Bank’s website.

EGM Execution

Company Profile

No.

Announced on October 12, 2016 through 1 (one) daily nationwide circulation newspaper namely Investor Daily, and through the Bank’s website.

EGM Invitation

Management Report

Submitted the Notification Letter to FSA/OJK dated October 4, 2016 regarding the EGM Implementation Plan.

EGM Announcement


No.

Agendas

Resolutions -

While, the composition of Board of Commissioners and Board of Directors members on April 2, 2017 and appointment of Andrew McGregor Duff as the Bank’s Commissioner and R. Andi Kartiko Utomo as well as Junita Wangsadinata, respectively, as the Bank’s Director, obtained approval from FSA (OJK) on Fit and Proper Test, are as follows: Board of Commissioners: President Commissioner : Ali Ahmed Z A Al-Kuwari Independent Commissioner : Suroto Moehadji Independent Commissioner : Djoko Sarwono Independent Commissioner : Muhammad Anas Malla Commissioner : Grant Eric Lowen Commissioner : Andrew McGregor Duff*) Board of Directors: Director : Azhar bin Abdul Wahab Director : Lloyd William Rolston Independent Director : Windiartono Tabingin Director : Novi Mayasari Director : R. Andi Kartiko Utomo**) Director : Junita Wangsadinata***) *) has been appointed through the Bank’s EGM dated April 13, 2016 and shall be effective upon obtaining approval from FSA (OJK) on Fit and Proper Test. **) shall be effective upon obtaining approval from FSA (OJK) on fit and proper test. ***) shall be effective since February 16, 2017 and upon obtaining approval from FSA (OJK) on Fit and Proper Test.

- The length of service of all members of Board of Commissioners and Board of Directors of the Bank shall be ended at the closing of AGM of the Bank which will be held in 2018, without prejudice the GMS’ rights to dismiss at any time. c.

Resolution Making and Follow-Up of the Resolution of EGM on December 19, 2016 All of the resolutions of the Bank’s EGM were resolved by deliberation to reach a mutual consensus and all of the resolutions have been realized.

164


Granted an authorization to the Bank’s Board of Directors to state the changes of composition of Board of Commissioners and Board of Directors of the Bank in a separate deed before a Notary (if required) and to arrange announcement to the Minister of Law and Humans Right of Republic of Indonesia.

Attendance in EGM dated December 19,2016 The shareholders who entitled to attend the EGM are the shareholders who registered in the Register of Shareholders of the Bank as of November 16, 2016 issued by PT Adimitra Jasa Korpora as the Bank’s Share Administration Bureau. EGM was attended by the shareholders and/or their proxies who represented 7,953,409,071 shares or approximately 90.82% of the total shares issued by the Bank,

therefore, the EGM has met the quorum requirements of EGM, so as valid and entitled to make legal and binding resolutions. The EGM was attended by several members of the Board of Commissioners, namely Suroto Moehadji, Djoko Sarwono and Muhammad Anas Malla, as well as several members of the Board of Directors, namely Azhar Abdul Wahab and Windiartono Tabingin. In addition, EGM was also attended by the Notary and representatives from Share Administration Bureau.

The Board of Commissioners


165


Appointment Procedure


Apart from posessing required competencies in relation to knowledge, experience, and expertise in banking and/or finance industry, all member of Board of Commissioners has to meet the requirement regarding financial reputation as follows: 1. Has no bad debt; 2. Never been declared bankrupt; 3. Never being a member of Board of Directors and/or Board of Commissioners that convicted guilty causing the bankruptcy at any company; 4. Never been convicted of a criminal offense that harm the country financial and/or related to the financial sector; in 5 (five) years before nomination.


In order to meet the requirement of integrity, a candidate member of the Board of Commissioners shall have (1) good character and morals; (2) commitment to comply with the prevailing law and regulations; (3) commitment on the development of the Bank’s sound operational (4) is not included in the Register of Disqualified Person;

Meanwhile, to meet the competence requirement, a member of the Board of Commissioners shall have (1) adequate knowledge and/or expertise in banking; (2) experience in banking and/or finance; and; (3) capability to take legal action.

Company Profile

Appointment Criteria In compliance with Financial Services Authority (FSA/OJK) Regulation No.55/POJK.03/2016 dated December 7, 2016 concerning the Implementaion of Corporate Governance for Commercial Banks, and refers to the FSA/OJK Regulation No. 33/POJK.04/2014 regarding the Board of Directors and Commissioners of Issuers and Public Companies, so the Board of Commissioners are obliged to meet the requirement of integrity, competence, and financial reputation as well as passing the Fit and Proper Test as inquired by PBI No. 23/12/ PBI/2010 dated December 29, 2010 on Fit and Proper Test to the extent not contrary with the FSA/OJK Regulation No. 27/ POJK.03/2016 regarding Fit and Proper Test For the Main Parties of the Financial Institutions and the FSA/OJK Circular Letter No. 39/SEOJK.03/2016 dated September 13, 2016 regarding Fit and Proper Test For the Controller Shareholders Candidates, the Member Candidates of the Board of Directors and Member Candidates of the Board of Commissioners of the Bank.

(5) have never been a member of the Board of Directors and/or Board of Commissioners who have not organize the Annual GMS; (6) his/ her accountability as the Board of Directors and/or the Board of Commissioners was not accepted by the GMS; (7) have not declared accountability as a member of Board of Directors and/or Board of Commissioners to GMS; (8) have caused a company that obtained a license, approval, or registration from FSA/OJK did not meet the obligation to deliver annual report and/or financial report to FSA/OJK.

Management Report

The Board of Commissioners as an organ of the Bank shall function and be responsible collectively for overseeing over the management policy, the implementation of the management in general, either regarding the Bank or its business, and providing advices to the Board of Directors and ensuring that the Bank implements the GCG. In performing its supervisory duties, the Board of Commissioners is assisted by an Audit Committee, Remuneration & Nominations Committee, and Risk Oversight Committee, which consists one or more of the Board of Commissioners members.

Criteria and Procedures for Appointment of Member of Board of Commissioners

2016 Performance

As stipulated in the Indonesia Corporate Governance Code, the management of a limited liability company in Indonesia is adopting a two board system, namely the Board of Commissioners and the Board of Directors, each of which has a clear authority and responsibility based on their respective functions as mandated by the articles of association and laws and regulations. Yet, they both have the responsibility to maintain the company sustainability in the long term. Accordingly, the Board of Commissioners and the Board of Directors shall have the same perception regarding the company’s vision, mission and values.


The candidate members of the Board of Commissioners are appointed provided that they have met the aforementioned criteria including passing the Fit and Proper Test with the following procedure: 1. Members of the Board of Commissioners are appointed by GMS. 2. Members of the Board of Commissioners shall meet the requirements to pass the Fit and Proper Test in accordance with Bank Indonesia and/or FSA/OJK regarding Fit and Proper Test as well as provision of Bank Indonesia and/or FSA/ OJK regarding Implementation of GCG for Commercial Banks 3. Members of the Board of Commissioners who have been approved on Fit and Proper Test from FSA/OJK must be appointed by GMS within 6 (six) months after the approval. If the period of 6 (six) months has ended and the candidate has not yet been appointed, the FSA/OJK’s approval is marked invalid. 4. Members of the Board of Commissioners who are appointed in the Bank’s GMS prior to FSA/OJK’s approval will take effect after FSA/OJK’s approval. Corporate Secretary Division is responsible for submitting the application including the documents required, to get FSA/OJK’s approval.

166


5. Term of office for members of the Board of Commissioners starts since the date defined in GMS in which they are appointed and ends for 1 (one) term. 1 (one) term of office for Board of Commissioners is 3 (three) years or until the adjournment of Annual GMS at the end of 1 (one) service term except defined otherwise by GMS. 6. Independent Commissioners who have served for 2 (two) term of office can be reappointed for the next term provided that the Independent Commissioners affirm their independence before GMS. 7. Members of the Board of Commissioners whose term of office have ended can be reappointed, by considering the prevailing provisions. Dismissal Procedure Members of the Board of Commissioners are dismissed by GMS with the following condition: 1. The term of office has ended; 2. Declared bankrupt or placed under custody based on a court ruling; 3. Tender resignation; 4. No longer meet the prevailing regulations; 5. Passed away; 6. Dismissed based on GMS resolution.

Total and Composition of Board of Commissioners Composition and total members of Board of Commissioners are generally established by taking into account Bank’s vision, mission, and strategic plans to allow a more effective, accurate, and faster decision making as well as independent actions. On the AGM held on February 16, 2016, the resignation of Muthu Chidambaram as the Bank’s Commissioner has been accepted. Based on the resolution of the EGM held on April 13, 2016, Andrew McGregor Duff was appointed as a new member in Board of Commissioners and his appointment shall be effective upon obtaining approval from FSA/ OJK regarding Fit and Proper Test. As of December 31, 2016, the composition and independency of Bank’s Board of Commissioners consist of 6 (six) Commissioners. The total member of Board of Commissioners are not exceed the total member of Board of Directors. 50% (fifty percent) of the member of Board of Commissioners are Independent Commissioners, Indonesian citizens and domiciled in Indonesia. Thus the composition of the Board of Commissioners are in accordance with the Bank Indonesia regulation regarding implementation of GCG for Commercial Banks.

Terms of Office

Fit and Proper Test by

President Commissioner

EGM, January 27, 2012

May 10, 2012

2012-2015 2015-2018

Bank Indonesia

Grant Eric Lowen

Commissioner

EGM, March 4, 2013

January 16, 2014

2014-2015 2015-2018

Financial Services Authority (FSA/OJK)

Suroto Moehadji


AGM, March 31, 2010

June 7, 2010

2010-2011

Bank Indonesia


AGM June 24, 2011

Muhammad Anas Malla


EGM, September 16, 2011

November 24, 2011

2011-2012 2012-2015 2015-2018

Bank Indonesia

Djoko Sarwono


EGM October 9, 2015

November 11, 2015

2015-2018


Andrew McGregor Duff*

Commissioner

EGM April 13, 2016

-

-

-

Ali Ahmed Z A Al-Kuwari

Management Report

BI or FSA/OJK’s Approval

Position

2016 Performance

Basis of Appointment

Name

2011–2012 2012-2015 2015-2018

Company Profile

* Shall be effective upon obtaining approval from the Financial Services Authority (FSA/OJK).

Independence of Board of Commissioners

Independent Commissioners are members of the Board of Commissioners that are devoid of any financial, management, share ownership and/or family relations up to the second degree with other members of the Board of Commissioners, the Board of Directors, and/or controlling shareholders, or any other relationships that might influence their capability of acting independently. The appointment of Independent Commissioners will encourage an impartial working environment that values fairness


167


FSA/OJK Regulation No.55/ POJK.03/2016 dated December 7, 2016 concerning the Implementaion of Corporate Governance for Commercial Banks and FSA/OJK Regulation No. 33/ POJK.04/2014 regarding the Board of Directors and Commissioners of Issuers or Public Companies, stipulates that banks shall have Independent Commissioners at least 50% of the Board of Commissioners’ members.

To ensure the Board of Commissioners’ Independence, the shareholders through the General Shareholders Meetings, have appointed 3 (three) Independent Commissioners out of the total 6 (six) members of the Board of Commissioners.


The composition of the Board of Commissioners of the Bank demonstrates sufficient diversity in the form of a combination of independence and expertise, education, work experience, and age. Detail explanation/disclosure on the background and experience of each member of Board of Commissioners can be found in the Commissioners Profiles section of the Annual Report. All members of the Board of Commissioners have integrity, competence, and sound financial reputation, which are evident by obtaining fit and proper test approval from Bank Indonesia or FSA/OJK.

The composition of Board of Commissioners was determined by considering the need and complexity of the Bank and to support the effectiveness of the implementation of duty of Board of Commissioners.


Diversity In the Composition of Members of the Board of Commissioners


and equality above all other interests including the interests of minority shareholders and other stakeholders. In addition to act independently, the Bank’s Independent Commissioners shall avoid conflicts of interest that could interfere their ability to perform their tasks. All of the Independent Commissioners shall meet the following requirements:

1. Do not have authorization and responsibilities in planning, leading, controlling, or supervising the Bank’s activities within the last 1 (one) year, except for the reappointment as the Bank’s Independent Commissioner for the next term; 2. Do not have direct and/or indirect share ownership in the Bank;

3. Are not affiliated with the Bank, members of the Board of Commissioners, members of the Board of Directors, or the Bank’s major shareholder, and; 4. Do not have direct and/or indirect business relationship which is related to the Bank’s main activities; 5. Meet independence criteria as regulated in the prevailing provision.

Statement of Independence of Independent Commissioners Statement of Independence

Suroto Moehadji

Muhammad Anas Malla

Djoko Sarwono

Do not have authorization and responsibilities in planning, leading, controlling, or supervising the Bank’s activities within the last 1 (one) year, except for the reappointment as the Bank’s Independent Commissioner for the next term.

√

√

√

Do not have direct and/or indirect share ownership in the Bank.

√

√

√

Are not affiliated with the Bank, members of the Board of Commissioners, members of the Board of Directors, or the Bank’s major shareholder.

√

√

√

Do not have direct and/or indirect business relationship which is related to the Bank’s main activities.

√

√

√

Meet independence criteria as regulated in the prevailing provision.

√

√

√

Financial or Familial Relations of Members of the Board of Commissioners

168


None of the members of the Board of Commissioners have familial relationship up to the second degree with other member of Board of Commissioners, Board of Directors’ members, and/or Major Shareholders. In addition, the majority of the Board of Commissioners do not have financial relationship with the controlling shareholder; and at the same time, all the members of the Board of Commissioners also do not have financial relationship with other members of the Board of Commissioners and Directors’ members.

With such status, the members of the Board of Commissioners of the Bank shall act independently in the implementation of their duties and responsibilities.

Name


Board of Directors

Financial Relationship with

Controlling Shareholder


Board of Directors


No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Ali Ahmed Z A Al Kuwari

-

√

-

√

-

√

-

√

-

√

√

-

Grant Eric Lowen

-

√

-

√

-

√

-

√

-

√

√

-

Suroto Moehadji

-

√

-

√

-

√

-

√

-

√

-

√

Muhammad Anas Malla

-

√

-

√

-

√

-

√

-

√

-

√

Djoko Sarwono

-

√

-

√

-

√

-

√

-

√

-

√


-

√

-

√

-

√

-

√

-

√

-

√

Management Report

Yes

As of December 31, 2016, all the members of Board of Commissioners did not own more than 5% (five percent) or more of the paid-up capital of the Bank, other banks, non-bank financial institution, and any other companies in Indonesia and abroad.


Name

The Bank requires the members of Board of Commissioners to disclose their share ownership amounting to 5% or more, both in the Bank and other companies, which are domiciled in Indonesia or abroad, in a report which should be updated every year.

Company Profile


Share Ownership by Board of Commissioners

2016 Performance

Family Relationship with

Share Ownership Other Bank

Non-Bank Financial Institution

Other Companies

Ahmed Z A Al-Kuwari

-

-

-

-

Grant Eric Lowen

-

-

-

-

Suroto Moehadji

-

-

-

-

Muhammad Anas Malla

-

-

-

-

Djoko Sarwono

-

-

-

-


-

-

-

-


Bank QNB Indonesia




169


Concurrent Position of Board of Commissioners All members of the Board of Commissioners do not hold concurrent positions that are prohibited by Bank Indonesia Regulation on the implementation of Good Corporate Governance. Bank Indonesia Regulation stipulates that Board of Commissioners’ members may only hold 1 (one) concurrent position as a member of the Board of Commissioners, Board of Directors, or Executive Officer

in a non-financial company, or as a member of the Board of Commissioners, Board of Directors or Executive Officer that undertakes a supervisory role in a non-bank subsidiary company controlled by the Bank. Not included as holding concurrent position when nonindependent members of the Board of Commissioners conduct functional duties of legal entities shareholders in the group business, and/or members of the Board of Commissioners holding positions

in non-profit organizations or institutions, as long as he/she does not neglect his/her duties and responsibilities as a member of the Bank’s Board of Commissioners. All members of the Board of Commissioners have signed statement letter stating that they do not hold any concurrent position prohibited by prevailing regulations. Currently, all members of the Board of Commissioners did not have concurrent position other than permitted by the prevailing regulations.

Concurrent Positions of Board of Commissioners as of December 31, 2016 Board of Commissioners

Position

Company

Ali Ahmed Z A Al-Kuwari

Vice Chairman Chairman Chairman CEO Chairman of Advisory Board Vice Chairman

Commercial Bank International QNB Banquee Privée QNB Capital Qatar National Bank MasterCard Middle East and North Africa Qatar Exchange

Grant Eric Lowen

Board Member CRO

QNB AL Ahli Qatar National Bank

Suroto Moehadji

NIL

NIL

Muhammad Anas Malla


PT Swadarma Sarana Informatiika

Djoko Sarwono


Pefindo Credit Bureau


NIL

NIL


Relationship between Board of Commissioners and Board of Directors

170


Essentially, the Board of Commissioners primarily serves as supervisor and advisor to the Board of Directors. While, the main function of the Board of Directors is to execute GMS resolution, carry out the Board of Commissioners’ direction and perform day-to-day operational activities. However, both Board constantly coordinates and collaborates to achieve the Bank’s goals, vision, and mission. Good coordination and teamwork between the Board of Commissioners and Directors is reflected in:

1. The business growth of the Bank. 2. The Bank’s soundness level is kept at sound condition in accordance with the prevailing provisions. 3. Risk management and internal control system is carried out adequately. 4. The stakeholders’ interest is protected fairly. 5. Implementation of Good Corporate Governance principles.

171




Duties and Responsibilities of the Board of Commissioners 1. To perform its duties and responsibilities independently. 2. To ensure the implementation of GCG principles in any business activities of the Bank at all level of the organization. 3. To supervise and responsible on the supervision of the management policies, the management of the Bank and its business in general and to provide advice to the Board of Directors.


Duties, responsibilities, and authorities of Board of Commissioners are clearly stipulated in the Bank’s Articles of Association, Board of Commissioners Charter in accordance with the prevailing law and regulations:

Company Profile

Work Ethics of the Board of Commissioners As stipulated in the Board of Commissioners’ Charter, all members of the Board of Commissioners: 1. Shall have good moral. 2. Shall be able to take legal action. 3. Shall keep confidentiality of all of the Bank’s documents, data, and information. 4. Are prohibited to misuse the Bank for personal, family and/ or other party’s interest which can result in the Bank’s loss or reduced profits. 5. Are prohibited to take and/ or receive personal benefit from the Bank, other than remuneration and other facilities established in GMS. 6. Are prohibited to directly and indirectly make a wrong statement or hide facts about the Bank’s condition at the time the statement is made which can results in misleading statement.

Duties and Responsibilities of Board of Commissioners

4. To perform it duties and responsibilities as stipulated in point 3 with good will, sense of responsibility, and prudent banking principles in accordance with the Bank’s Articles of Association, law and regulation, and the Bank’s GMS resolution. 5. Under certain condition, to hold Annual GMS and other GMS in accordance with its authorities as stipulated in the law and the Bank’s Articles of Association. 6. In oversight function, to direct, monitor, and evaluate the implementation of the Bank’s strategic policies. 7. In monitoring function, is prohibited to involve in the decision-making of the Bank’s operational activities, except: a. Provision of funds to related parties as regulated in the Bank Indonesia provision on Legal Lending Limit; and b. Other matters established in the Bank’s Articles of Association or prevailing regulations 8. In decision-making of operational activities as stipulated in point 7, it is part of oversight by the Board of Commissioners. The Board of Commissioners’ involvement or approval did not negate the Board of Directors’ responsibilities in the Bank’s management 9. To ensure that the Board of Directors has taken followup actions on audit findings and recommendations of the Internal Audit Division, External Auditor, and monitoring reports of the Financial Services Authority (FSA/OJK), Bank Indonesia, and/or other authorities

Management Report

In order to ensure implementation of its supervisory and advisory duties, the Board of Commissioners has formulated the Board of Commissioners’ Manual, which is established in the Board Charter No. 01.08.00 dated August 3, 2015. The Charter contains accountability; structure and membership; criteria and independency; term of office; duties and responsibilities; authorities; work ethics; work value; meeting arrangement; as well as reporting and responsibilities of the Board of Commissioners. This Board Manual is formulated by referring to the prevailing regulations from Bank Indonesia and Financial Services Authority (FSA/OJK) as well as best practices, and being reviewed regularly.

Transparency of the Board of Commissioners The Board of Commissioners Charter also regulates transparency aspect in which all of the Bank’s Commissioners shall disclose the following matters in the Bank’s Report on Good Corporate Governance Implementation: 1. Share ownership of 5% (five percent) or more, both in the Bank and other banks as well as companies which domiciled in Indonesia or abroad. 2. Financial and familial relationship with members of the Board of Commissioners, other member of Board of Directors, and/or the Bank’s controlling shareholder. 3. Remuneration and facilities received from the Bank. 4. Position in other companies.

2016 Performance

Board of Commissioners’ Charter


10. To inform the Financial Services Authority (FSA/OJK) no later than 7 (seven) working days since the discovery of: a. Violations of the finance and banking laws and regulation, and b. Condition or potential condition which may harm the Bank’s business continuity, among others, based on the recommendations of the Committees which assist the effectiveness of the duties of the Board of Commissioners. Matters that must be reported as mentioned above are matters that have not been or are not being reported to the FSA/OJK by the Bank and / or by the Compliance Director 11. In order to support the effectiveness of their duties and responsibilities, to establish: a. Audit Committee b. Risk Oversight Committee c. Remuneration and Nomination Committee 12. To ensure that the Committees established as stipulated in point 11, performs its duties effectively. 13. To evaluate on the Committees’ performance every year end. 14. Are collectively responsible for the Bank’s loss which caused by the mistake or negligence of the Board of Commissioners members in performing their duties. 15. Will not be held accountable for the Bank’s loss if they can prove that: a. The loss is not due to their mistakes or negligence b. Has conduct supervision with good will, high sense of responsibility,

172


and prudent banking principles for the interest and in accordance with the Bank’s goals and objectives c. Do not have any conflict of interest either directly or indirectly on the oversight which leads to loss, and d. Has taken action to prevent the loss or the continuing of loss 16. To improve their competences by continuously participating in trainings, understanding banking regulation and general knowledge particularly regarding economy.

Duties Implementation of Board of Commissioners

Authorities of the Board of Commissioners 1. To access documents, data, and information about the Bank’s employees, fund, assets, and resources which are deemed necessary. 2. In relation to the implementation of its duties and responsibilities, to communicate directly with the Board of Directors, employees, and other parties. 3. If required, to involve independent party other than members of the Board of Commissioners to help Board of Commissioners in performing their duties. 4. May temporarily dismiss a member of the Board of Directors from his/her position by stating the reasons therefore. 5. In certain circumstance, to manage the Bank temporarily by following prevailing laws and regulations. 6. To perform other authorities in accordance with the Bank’s Articles of Association and the prevailing law and regulations.

Recommendation of the Board of Commissioners 1. Revision of Bank’s Business Plan for 2016-2018 2. Bank’s Business Plan for 20172019 3. Supervise, evaluate, and provide inputs to actual results of the Bank’s Business Plan 4. Monitor the implementation of work plan carried out by Committees under the Board of Commissioners 5. Approve the schedule and agenda of Annual and Extraordinary GMS 6. Approve the resignation of 2 Directors and 1 Commissioner’s Bank to the GMS 7. Recommend the Bank’s 3 candidate of BoD members and 1 candidate of BoC member to the GMS 8. Approve to purchase the land and building as a branch office 9. Approve the appointment 2 new members of Audit Committee 10. Approve the appointment a new Chief Auditor of the Bank 11. Approve to sell the foreclosed assets of the Bank.

Throughout 2016, the Board of Commissioners have fulfilled their supervisory duties and responsibilities including to advise the Board of Directors concerning the Bank’s operational activities for the benefit of the Bank in accordance to its purposes and objectives. The Board of Commissioners also provide recommendation to the Board of Directors, conduct Induction Program, and participates in both training and competence development program which will be detailed as follows:

Position President Commissioner

Date

The training programs provided to Commissioners in 2016 included:

Program

Place

January 21, 2016

Business Forum Qatar

Doha, Qatar

March 15, 2016 – March 16, 2016

MEED – Qatar Project Conference

Doha, Qatar

March 29, 2016 – March 30, 2016

Doha International Maritime Defence Conference and Exhibition 2016 (DIMDEX)

Doha, Qatar

May 23, 2016 – May 25, 2016

Institute of International Finance (IIF) and Emerging Markets Advisory Council (EMAC), CEO and Spring Membership Meetings

Zurich, Switzerland

Commissioner

May 31, 2016

Prima Forum on IFRS

Doha, Qatar


July 21, 2016

Cyber Maturity Review Training

Doha, Qatar

Suroto Moehadji


July 30, 2016

QNB Values Festival

Jakarta, Indonesia

Muhammad Anas Malla


July 30, 2016

QNB Values Festival

Jakarta, Indonesia

Djoko Sarwono


September 5, 2016

National Economy in Global Context

Jakarta, Indonesia

September 7, 2016

Money Market and Capital Market as well as Regional Economic

Jakarta, Indonesia

September 8, 2016

Financial System Oversight Policies

Jakarta, Indonesia

September 13, 2016

Banking and IKBN System in Indonesia

Jakarta, Indonesia

Grant Eric Lowen



Madrid, Spain


Institute of International Finance (IIF) Board Meeting


January 18, 2016 – January 19, 2016

Company Profile

Ali Ahmed Z A Al Kuwari

Training and Competence Development Program The Board of Commissioners are enrolled in training programs to enhance the knowledge

of members of the Board of Commissioners on current developments in the banking industry and other knowledge related to the implementation of the duties and responsibilities of the Board of Commissioners.

Management Report

Name

new Commissioner will also have discussion with other member of the Board of Commissioners, members of Committees and attended the meeting with Board of Directors.

2016 Performance

Board of Commissioners Induction Program The Bank has an induction program for the new Commissioner by sharing Annual Report, Quarterly Financial Report, Bank’s Business Plan, and Board of Commissioner Charter as a reference and overview of the Bank’s business activities so as to support him in carrying out supervisory function of the Board of Commissioners. The

173


Evaluation on Board of Commissioners’ Performance

profile, GCG, profitability and capital. The organs that evaluate the performance of the Board of Commissioners is the GMS.

Assessment of performance of the Board of Commissioners is held once every year, using the method of self-assessment. The success of the performance of the Board of Commissioners is the result of the collegial work of the entire Board of Commissioners which is reflected in the realization of the Bank’s Business Plan. The performance of the Board of Commissioners is assessed based on Bank’s risk

Assessments of the performance of the Board of Commissioners has been conducted based on the selfassessment report submitted to FSA/OJK regularly, in compliance with Bank Indonesia Circular Letter number 15/15/DPNP dated April 29, 2013, on the Implementation of Good Corporate Governance for Commercial Banks, in which the parameters of the Board of Commissioners’ performance are

related to the implementation of its supervisory function to the management of the Bank. In addition to self-assessment, assessment of the Board of Commissioners is conducted during the presentation of annual report to the GMS. At the GMS, the shareholders approved the annual report of the Bank for financial year 2016 and the results achieved during that year. Furthermore, the GMS granted full discharge and acquittal (aquit et decharge) to the Board of Commissioners for 2016 fiscal year.

Policy and Procedure of Board of Commissioners Remuneration


Proposal Submission to AGM by the Board of Commisioners

AGM

Remuneration & Nomination Committee’s (RNC) Recommendations for BOC to be submitted to AGM

Remuneration & Nomination Committe (RNC)

Board of Commissioners Remuneration Policy In accordance with the Bank’s Articles of Association, salary or honorarium and other allowances for the Board Commissioners are established by the General Meeting of Shareholders.

174


AGM Stipulation on Salary/Honorarium and allowances for the Board of Commissioners

In general, the Bank determines remuneration package by referring to the Bank’s internal policies, prevailing laws and regulations, industry comparison, and by taking into account the Bank’s performance in current year. The amount of remuneration for the Board of Commissioners members is set based on their performance.

Board of Commisioners Remuneration

Board of Commissioners Remuneration’s Procedures Board of Commissioners Remuneration procedure consists of several phases which include formulation, analysis, proposal, and establishment. The formulation of remuneration policy and proposal is carried out by the Remuneration and Nomination Committee by

The Board of Commissioners’ remuneration package comprised of: a. Gross remuneration (salary, allowances, bonus); b. Other facilities (health insurance)

Management Report

The AGMS held on February 16, 2016 approved the granting authority to Qatar National Bank, as the majority Shareholders of the Bank to determine the 2016

salary or honorarium and other allowances for each member of the Board Commissioners. The determination of salary or honorarium and other allowances for each member of the Board Commissioners by considering the recommendation from Remuneration and Nomination Committee of the Bank.

2016 Performance

gathering information about remuneration standard for the position and the similar industry in the market and taking account of the Bank’s performance.

The Board of Commissioners’ remuneration structure and amount in 2016 are as follows: Amount Received in a Year

Position

Number of People

Millions of Rupiah

Remuneration (Gross salary, bonuses, routine allowances, and other facilities in the form of nonin kind)

4

4,141

Other Facilities in the form of in kind (housing, transportation, health insurance, and others) a. may be owned b. may not be owned

4

66

4

4,207

Total Remuneration per Person in 1 (one) year*)


Total

Company Profile


Type of Remuneration

Total Board of Commissioners -

Above Rp1 billion–Rp2 billion

4

Above Rp500 million–Rp1 billion

-

Rp500 million and below

-


Above Rp2 billion

*) received in cash



Ratio of Highest and Lowest Salary The compared salaries in this ratio are those received by members of the Board of Commissioners, Board of Directors and employees each month.

175


Ratio Type

Ratio

Employee’s Highest and Lowest Salary Ratio

1 : 61.7

Director’s Highest and Lowest Salary Ratio

1 : 2.1

Commissioner’s Highest and Lowest Salary Ratio

1 : 1.0

Director’s Highest and Employee’s Highest Salary Ratio

1 : 2.4

Director’s Highest and Commissioner’s Highest Salary Ratio

1 : 6.3

Director’s Lowest and Commissioner’s Lowest Salary Ratio

1 : 2.9

Meetings of the Board of Commissioners Meetings of the Board of Commissioners are held regularly, in accordance with the Bank’s Article of Association and other prevailing regulations, with the provision and procedure as follows: 1. The Board of Commissioners Meetings shall be held at least 1 (one) time in 3 (three) months and can be held any time whenever deemed necessary by one of the Commissioners or upon written request from the Board of Directors or upon request from 1 (one) shareholder or more which collectively represent 1/10 (one tenth) part of total shares issued by the Bank with valid vote. 2. The Board of Commissioners Meetings shall be physically attended by all members of the Board of Commissioners at least 2 (two) times a year. Physical attendance by all members of the Board of Commissioners, is primarily essential for evaluation or establishment of strategic policies as well as evaluation on the Bank’s business plan results.

176


3. The Board of Commissioners shall schedule the Board of Commissioners Meetings for the following year before the financial year ends. 4. Call for the Board of Commissioners Meetings is done by the President Commissioner or one of the member of the Board of Commissioners. 5. Call for the Board of Commissioners Meetings shall be given in written or delivered or handed directly with adequate receipt or with registered mail or with courier service or with telex, facsimile, or through other means of communication. The call should be sent to members of the Board of Commissioners no later than 5 (five) days before the Board of Commissioners Meeting or in urgent situation no later than 1 (one) day prior. The urgent situation is defined by the President Commissioner or the majority of Commissioners. 6. Call for the Board of Commissioners Meetings is not required if all members of the Board of Commissioners are present and/or represented in the Board of Commissioners Meetings or if the Meetings has been scheduled based on the decision of the previous Board of Commissioners Meeting

7. 8.

9.

10.

which attended or represented by majority of member of Board of Commissioners. Call for Meeting shall include information on agenda, date, time and place of the Meeting. In the scheduled Board of Commissioners Meetings, the meeting material shall be shared to the participants no later than 5 (five) days before the meeting. In the un-scheduled meeting, the meeting material is shared to the participants before the meeting is convened, at the latest. The Board of Commissioners Meetings are held in the territory of the Republic of Indonesia area, particularly at: a. Where the Bank is domiciled b. Where the Bank conducts its main business activities c. Capital Province where the Bank is domiciled or conduct its main business activities, or d. Domicile Province where the Stock Exchange where the Bank’s shares are listed


177




Decision in the Board of Commissioners Meeting shall be made by means of deliberations to reach a consensus. If no resolution can be reached by means of deliberations to reach a consensus, then the resolution is made by way of simple majority of votes based on the agree votes more than ½ (half) of total legitimate votes in the Meeting. In the event of a tie, the chairman of the meeting shall be entitled to cast the deciding vote.

17. Dissenting opinions occurred in the Board of Commissioners Meeting shall be disclosed clearly in the minutes of the meeting including the reason of such dissenting opinion. 18. Minutes of the Board of Commissioners Meeting is a valid proof on the decisions made in the Board of Commissioners Meeting, both for the members of the Board of Commissioners and third parties. 19. The Board of Commissioners can also make a valid and binding decision without holding a meeting provided that all members of the Board of Commissioners have been informed in written about the proposal and all member of Board of Commissioners have approved and signed the proposal. That kind of decision has a similar power with the valid decision taken in the Board of Commissioners Meeting. 20. The Board of Commissioners Meeting can also be convened through teleconference, video conference, and other electronic media which enable all participants to directly see and/or hear each other and participate in the Meeting. The Meeting should be convened in accordance to the prevailing provisions and minutes of the Meeting should be prepared and distributed to all meeting participants to be signed. The decision taken has a similar power with the valid decision taken in the Board of Commissioners Meeting.

Company Profile

14. a. Every member of the Board of Commissioners in attendance is entitled for 1 (one) vote and additional 1 (one) vote for every Commissioner being represented. b. Every member of the Board of Commissioners which direct or indirectly has a conflict of interest in a transaction, contract, or proposed contract related to the Bank, such member of the Board of Commissioners is not entitled to join the voting about matters related to the aforementioned transaction or contract except decided otherwise by the Meeting. c. Voting related to someone is carried out through secretly ballot without signature while voting on other matters is carried out verbally except decided otherwise by the Chairman of Meeting without any objection from the meeting’s participants in attendance. 15. The results of Board of Commissioners Meeting shall be stipulated in a minutes of the meeting, signed by all members of the Board of Commissioners in attendance, shared to all members of the Board of Commissioners, and well-documented. 16. In case there are any Commissioners who did not sign the minutes of the meeting, the concerned Commissioner should state their reasons in writing in a separate letter and shall be attached to the minutes of meeting.

Management Report

If all members of the Board of Commissioners is present of represented, the Board of Commissioners Meeting can be held anywhere in the territory of Republic of Indonesia and are entitled to make a legitimate and binding decision. 11. The President Commissioner shall chair the Board of Commissioners Meeting. In case that the President Commissioner is absent or unavailable to attend the Meeting which no need to be proven to other parties, the Meeting shall be chaired by one of the Commissioners appointed by and from members of the Board of Commissioners who is present in the Meeting. 12. A Commissioner can only be represented by other member of the Board of Commissioners in the Board of Commissioners Meeting with Proxy Letter. 13. The Board of Commissioners Meeting is valid and entitled to make a binding decision if more than ½ (half) members of the Board of Commissioners are present or represented in the meeting.

2016 Performance


Frequency of Meetings of Board of Commissioners and Attendance Record In 2016, the Board of Commissioners have conducted 12 (twelve) meetings, included 6 (six) meetings with Board of Directors of the Bank. The following table shows the attendance frequency of each Commissioner in the meetings. Board of Commissioners Meetings and Attendance Level Name

Position

Physical Attendance

Video Conference

% Attendance

Ali Ahmed ZA Al Kuwari


2

4

100%

Grant Eric Lowen

Commissioner

3

3

100%

Suroto Moehadji


6

-

100%

Muhammad Anas Malla


6

-

100%

Djoko Sarwono


5

-

83%


Commissioner

6

-

100%

*) Attended as an Invitee due to he was appointed as a Commissioner of the Bank based on resolution of the Bank’s EGM dated April 13, 2016 which shall be effective upon obtaining approval from the Financial Services Authority (FSA/OJK) on fit and proper test. Board of Commissioners and Board of Directors’ Meetings Name

Position

Physical Attendance

Video Conference

% Attendance

Ali Ahmed ZA Al Kuwari


2

4

100%

Grant Eric Lowen

Commissioner

3

3

100%

Suroto Moehadji


6

-

100%

Muhammad Anas Malla


6

-

100%

Djoko Sarwono


5

-

83%


Commissioner

6

-

100%


Act. President Director

6

-

100%


Director

6

-

100%

Windiartono Tabingin

Director

6

-

100%

Novi Mayasari

Director

6

-

100%

178


Position

Physical Attendance

Video Conference

% Attendance

R. Andi Kartiko Utomo**

Director

5

-

83%

Junita Wangsadinata***

Director

NIL

NIL

NIL

Meetings’ Agendas In 2016, the Board of Commissioners has held 6 (six) meetings with the agenda as follows: Date

Meeting Agenda 1. 2.

April 19, 2016

1.

2.

June 16, 2016

1.

3. 4.

August 29, 2016

1.

Meeting opening: a. Welcome; b. Disclosure of conflict interest; c. Minutes of previous meeting. Committees reports: a. Audit Committee; b. Risk Oversight Committee; c. Remuneration and Nomination Committee. List of BoC approval by circulation. Meeting close: a. Matters for disclosure; b. Meeting Evaluation; c. Next Meeting.


2.

Meeting opening: a. Welcome; b. Disclosure of conflict interest; c. Minutes of previous meeting. Committees reports: a. Audit Committee; b. Risk Oversight Committee; c. Remuneration and Nomination Committee. List of BoC approval by circulation. Meeting close: a. Matters for disclosure; b. Meeting Evaluation; c. Next Meeting.


3. 4.

RNC recommendation on remuneration for BoC, BoD and employee, as well as Performance Management; RNC recommendation on the candidacy of Commissioner and Director.


February 25, 2016

Company Profile

Attended as a President Director of the Bank in 1 (one) meeting and as an Invitee in 5 (five) meetings due to he was appointed as a Commissioner of the Bank based on resolution of the Bank’s EGM dated April 13, 2016 which shall be effective upon obtaining approval from the Financial Services Authority (OJK) on fit and proper test. **) Attended as an Invitee due to he was appointed as a Director of the Bank based on resolution of the Bank’s EGM dated April 13, 2016 which shall be effective upon obtaining approval from the Financial Services Authority (OJK) on fit and proper test. ***) Appointed as a Director of the Bank based on resolution of the Bank’s EGM dated December 19, 2016 which shall be effective on February 16, 2017 and upon obtaining approval from the Financial Services Authority (OJK) on fit and proper test.

Management Report

*)

2016 Performance

Name

Meeting opening: a. Welcome; b. Disclosure of conflict interest; c. Minutes of previous meeting.


179


Date

Meeting Agenda 2.

3. 4.

October 17, 2016

1.

2.

3. 4.

December 15, 2016

1.

2. 3.

4.

5. 6.

180

Committees reports: a. Audit Committee; b. Risk Oversight Committee; c. Remuneration and Nomination Committee. List of BoC approval by circulation. Meeting close: a. Matters for disclosure; b. Meeting Evaluation; c. Next Meeting. Meeting opening: a. Welcome; b. Disclosure of conflict interest; c. Minutes of previous meeting. Committees reports: a. Audit Committee; b. Risk Oversight Committee; c. Remuneration and Nomination Committee. List of BoC approval by circulation. Meeting close: a. Matters for disclosure; b. Meeting Evaluation; c. Next Meeting. Meeting opening: a. Welcome; b. Disclosure of conflict interest; c. Minutes of previous meeting. 2017 BoC Meeting Schedule. Matters for Discussion: a. Annual Review on BoC and Committees’ Charters b. Annual Self-Assessment of BoC c. Annual Assessment on Committee’s Performance Committees reports: a. Audit Committee; b. Risk Oversight Committee; c. Remuneration and Nomination Committee. List of BoC approval by circulation. Meeting close: a. Matters for disclosure; b. Meeting Evaluation; c. Next Meeting.


2016 Performance

Beside the meetings as mentioned above, in 2016, the Board of Commissioners and Board of Directors have held 6 (six) meetings with the agenda as follows: Date February 25, 2016

Meeting Agenda 1.

3.

April 19, 2016

1.

3.

5.


4.

Meeting opening: a. Welcome; b. Disclosure of conflict interest; c. Minutes of previous meeting; d. Matters arising from previous meeting. Matters for decision: a. Renewal of Nomination Policy. b. Surabaya Darmo Branch Office. Matters for discussion: a. CEO’s Report; b. Finance Report including liquidity; c. Business Performance Update; d. Compliance, AML, Legal & Regulatory Update; e. Internal Audit Reports; f. Risk Profile; g. Credit Portofolio Update; h. Free Float. Matters for noting: a. Update on EGM’s resolution; b. Major correspondence/contract: • OJK/BI correspondence; • Contract. Meeting Close: • Matters for disclosure.


2.


5.

Company Profile

4.

Management Report

2.

Meeting opening: a. Welcome; b. Disclosure of conflict interest; c. Minutes of previous meeting; d. Matters arising from previous meeting. Matters for decision: a. Major strategic decision • RNC recommendation on remuneration for BoC, BoD & employee; b. Other Decision: • Performance management; • Extraordinary GMS. Matters for discussion: a. CEO’s report; b. Finance report including liquidity; c. Business performance update; d. Review policies (new or revised policies); e. Delegations & limits; f. BI health check; g. Credit portofolio discussion. Matters for noting: a. Committee reports: • Audit Committee; • Risk Oversight Committee; • Remuneration & Nomination Committee. b. Update on AGM’s resolution. c. Major correspondence/contract: • OJK/BI correspondence; • Contract; d. List of BoC approval by circulation. Meeting Close: a. Matters for disclosure.


181


Date June 16, 2016

Meeting Agenda 1.

2.

3.

4.

5.

August 29, 2016

1.

2.

3.

4.

5.

182

Meeting Opening: a. Welcome; b. Disclosure of conflict interest; c. Minutes of previous meeting; Matters for decision: a. Revised 2016 Bank’s Business Plan; b. Capital Injection Proposal. Matters for discussion: a. CEO’s Reports; b. Finance Report including liquidity; c. Business Performance Update; d. Credit Portofolio Update; e. Risk Profile; f. Compliance, AML, Legal & Regulatory Update. Matters for noting: a. Major correspondence/contract: • OJK/BI correspondence; • Contract. Meeting close: a. Matters for disclosure; b. Next Meeting Meeting Opening: a. Welcome; b. Disclosure of conflict interest; c. Minutes of previous meeting; Matters for decision: a. Cooperation with Artajasa; b. Fitch Ratings. Matters for discussion: a. Update on Result of Meeting with FSA/OJK; b. Finance Report including liquidity; c. Update on 6 (six) Points Plan; d. Risk Profile; e. OJK’s comments on Revised Bank’s Business Plan; f. Free Float. Matters for noting: a. Major correspondence/contract: • OJK/BI correspondence; • Contract. Meeting close: a. Matters for disclosure; b. Next Meeting


October 17, 2016

Meeting Agenda 1.

2.

4.

5.

3.

4.

Meeting opening: a. Welcome; b. Disclosure of conflict interest; c. Minutes of previous meeting; d. Follow up on findings from special review on Wholesale Banking Credit. Matters for decision: a. Finance Report Including Liquidity; b. Update on 6 (six) Points Plan; c. Risk Profile. Matters for noting: a. Major correspondence/contract: • OJK/BI correspondence; • Contract. Meeting close a. Matters for disclosure b. Next Meeting


2.

Company Profile

1.

Meeting Opening: a. Welcome; b. Disclosure of conflict interest; c. Minutes of previous meeting; Matters for decision: a. 2017 Bank’s Business Plan; b. Delegation & Limit; c. Limit for Special Asset Management. Matters for discussion: a. Finance Report including liquidity; b. Update on 6 (six) Points Plan; c. Risk Profile. Matters for noting: a. Major correspondence/contract: • OJK/BI correspondence; • Contract. Meeting close: a. Matters for disclosure; b. Next Meeting.

Management Report

3.

December 15, 2016

2016 Performance

Date



183


Commitees Under the Board of Commissioners The Audit Committee is particularly established to support the Board of Commissioners in fulfilling its supervisory duties and responsibilities by monitoring and evaluating the planning and implementation of audit as well as monitoring the follow-up to audit findings in order to assess the adequacy of internal control, including the adequacy of financial reporting process.

To support the implementation of Board of Commissioners’ duties and responsibilities, the Board of Commissioners is assisted by 3 (three) Committees namely Audit Committee, Remuneration and Nomination Committee, and Risk Oversight Committee, which all work independently. These committees are established through resolution in the Board of Commissioners Meeting while the members are appointed by the Board of Directors in accordance to the resolution. Each Committee is required to perform their duties and responsibilities by referring to Committee Charter which is formulated and reviewed regularly bases on the applicable regulation in Indonesia.

184


Audit Committee Legal Reference for Audit Committee Establishment Audit Committee was established by Audit Committee Charter No. 2-00 dated June 12, 2013 as lastly amended with Audit Committee Charter No. 01. 09.00 dated November 16, 2015 as well as based on Bank Indonesia Regulation (PBI) No. 8/4/PBI/2006 dated January 30, 2006 regarding Implementation of Good Corporate Governance For Commercial Bank, as amended with PBI No. 8/14/ PBI/2006 dated October 5, 2006, which currently have been revoked and declared invalid, changed to FSA/ OJK No. 35/POJK.03/2016 dated December 7, 2016 concerning the implementation of Corporate Governance for Commercial Banks, FSA/OJK Regulation No. 33/POJK.04/2014 dated December 8, 2014 concerning the Board of Directors and Board of Commissioners of Issuers or Public Company as well as FSA/OJK Regulation No. 55 /POJK.04/2015 dated December 23, 2015 concerning Establishment and Guideline of Audit Committee Work Implementation.

Appointment of Audit Committee As stipulated in the Audit Committee Charter, members of the Audit Committee are required to meet the competence and experience requirements, as well as the requirement of independence and integrity, namely: 1. Audit Committee members shall have high integrity, skills, knowledge, experience relevant to their profession, and good communication skills. 2. Audit Committee members shall have good understanding of financial statements, company business, particularly those related to the business activities of the Bank, audit process, risk management and laws and regulations on Capital Market as well as other relevant laws and regulations. 3. Audit Committee members shall be willing to continuously enhance their competencies through education and training. 4. Audit Committee members shall not be a person from a Public Accounting Firm, Legal Consulting Firm, Public Appraiser or any other parties providing assurance, nonassurance, appraisal services and/or other consulting services to the Bank for the past 6 months.

Djoko Sarwono

Chairman (also as Member) Member

Tjetjep Hasmitha

Member

Legal Basis of Appointment

Decree of BoD No. 024/SK-DIR/V/2016 dated May 31, 2016 Corporate Governance

Irzal Zaini

The Composition of Audit Committee of the Bank has been changed several times in 2016 which lastly appointed and assigned based on Decree of the Board of Directors (BoD) as mentioned below. As such, the Audit Committee members as of December 31 2016, are as follows:

The above Audit Committee membership shall be effective from the issuance date of Decree of BoD No. 024/SK-DIR/V/2016 until 2018. Profiles of Audit Committee

Prior to joining the Bank, he had occupied several position in PT

Bank Niaga Tbk (1984-2008) included Sharia Project Team (2002-2004) and served as Support & Services Division Head in Head Office-Sharia Business Unit (20042008). Currently, he is also serving as a member of Risk Oversight Committee in the Bank. During 2016, he was actively attended competence development programs, among others QNB Values Festival at Jakarta, Indonesia on Juli 30, 2016. PT Bank QNB Indonesia Tbk

185


Djoko Sarwono Chairman of Audit Committee Profile of Djoko Sarwono could be found in the Board of Commissioners’ Profile section of this Annual Report.

Irzal Zaini Member of Audit Committee Citizen of Indonesia, 62 years old. Earned his Bachelor Degree in Economy from University of Padjadjaran, Bandung in 1981. He has been re-appointed as a member of Audit Committee in the Bank through Decree of BoD No. 024/SKDIR/V/2016 dated May 31, 2016


Position

Concurrent positions of Audit Committee has taken into consideration of competences, independency, discretion, and code of conduct, as well as respective duties and responsibilities implementation in accordance with applicable regulations.

Company Profile

Name

Membership Structure of Audit Committee The Bank’s Audit Committee is directly responsible to the Board of Commissioners. The Audit Committee has 3 (three) members, consist of 1 (one) Independent Commissioner who also serves

as a Chairman of the Audit Committee and the other 2 (two) members are independent parties to the Bank. All members of the Audit Committee are professional individuals with extensive experience and high competences.

Management Report

8. Audit Committee members are not affiliated to the Bank, any member of the Board of Commissioners, the Board of Directors or Ultimate Shareholder of the Bank. 9. Audit Committee members do not have direct or indirect business relations pertaining to the Bank’s business activities. 10. Independent Party who is the member of Audit Committee should fulfill all the independency criteria as set out in the prevailing law and regulations.

2016 Performance

5. Audit Committee members shall not be individuals working for or having authority and responsibility for planning, leading, controlling or supervising the Bank’s activities for the past 6 months, except in the event of reappointment of the Independent Commissioner who concurrently assumes the position of Audit Committee Chairman. 6. Audit Committee members do not, directly or indirectly, own shares in the Bank. 7. In the event that any member of the Audit Committee obtains shares in the Bank either directly or indirectly as a result of a legal event, such shares must be transferred to another party within no later than 6 months upon obtainment.


Tjetjep Hasmita Member of Audit Committee Citizen of Indonesia, 60 years old. He earned the Bachelor of Economy degree majoring in Management from University of Pancasila, Jakarta in 1984 and later earned the Master of Management degree at the same university in 1996. He is appointed as a member of the Bank’s Audit Committee through Decree of BoD No. 024/SKDIR/V/2016 dated May 31, 2016. Prior to joining with the Bank, he once served in Bank of Indonesia with several positions, which was first served in Human Resources Directorate/Personnel Affairs (1981-1987), then as an Auditor in Internal Audit Directorate/Internal Supervision Directorate (General Audit Team, Special Audit Team, Research and Development Team as well as Provisions Analysis Team), afterwards he was occupied several position in Internal Financial Directorate included as a Deputy Head of Payroll and Administration Implementation (2003-2004), Deputy Head of Financial Statements (2004-2008) and Division Head of Payroll and Administration Implementation. He was also incorporated in BLBI Settlement Team (1999-2002). In addition as a member of Audit Committee in the Bank, he is also served as Bureau Head of Internal Supervision & Quality Assurance in Indonesian Banking Development Institute (LPPI) since 2012 until now. Currently, he is also appointed as supervisor in the Karya Usaha Mandiri Cooperative, Bogor since 2013 and the LPPI Employee Cooperative, Jakarta since 2012.

186


During 2016, he was actively attended competence development programs, among others: QNB Values Festival at Jakarta, Indonesia on July 30, 2016. Independence of Audit Committee In accordance with FSA/OJK Regulation No.55/POJK.03/2016 dated December 7, 2016 concerning the implementation of Corporate Governance for Commercial Banks, members of Audit Committee should meet the independence criteria. All members of Audit Committee of the Bank are independent in which they have no management relationship, share ownership, and/or family relationship with the Board of Commissioners, the Board of Directors, the Controlling Shareholder or the Bank which can affect their capabilities to act independently. The Independence of Audit Committee members is also reflected in its structure and membership as follows: 1. The membership of the Audit Committee shall consist of at least 1 (one) Independent Commissioner as Chairman and member, and 1 (one) independent party who has expertise in finance or accounting, and 1 (one) independent party who has expertise in the field of law or banking.

2. Total Independent Commissioners and independent parties as members of Audit Committee shall at least 51% of the total members of the Audit Committee. 3. The member of the Audit Committee who is an Independent Commissioner shall be appointed as Chairman of the Audit Committee. Moreover, in accordance with the Audit Committee’s Charter, there are also some additional independence criteria required for Audit Committee’s members, among others are: 1. Not the Bank’s employees 2. Do not have any shares in the Bank 3. Has an independent behavior and perspective 4. Do not have any conflict of interest with the Bank Family or Financial Relationship of the Audit Committee Members All members of the Audit Committee has no affiliation with the Board of Commissioners, Board of Directors, members of other committees as well as the controlling shareholder. Thus, in carrying out their duties, members of the Audit Committee does not have a conflict of interest that may occur, so as ensuring the highest level of independence in performing its duties and responsibilities.

2016 Performance

Family or Financial Relationship of Audit Committee Members Family Relationship with Name

Other Board of Committee Commissioners Members

Board of Directors

Financial Relationship with Other Controlling Board of Committee Commissioners Shareholder Members

Board of Directors


No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Djoko Sarwono

-

√

-

√

-

√

-

√

-

√

-

√

-

√

-

√

Irzal Zaini

-

√

-

√

-

√

-

√

-

√

-

√

-

√

-

√

Tjetjep Hasmita

-

√

-

√

-

√

-

√

-

√

-

√

-

√

-

√

187




As stated in the Audit Committee’s Charter, the Bank’s Audit Committee has a duty to provide independent professional opinions to the Board of Commissioners regarding the reports or matters

6. Providing recommendation to the Board of Commissioners pertaining to the appointment of Public Accountant and Public Accounting Firm on the basis of its independency, scope of work, and fee to be submitted to the General Meeting of Shareholders. 7. Providing an independent opinion in the event of disagreement between the management and the Public Accountant for services rendered. 8. Monitoring and evaluating: a. The implementation of tasks of the Internal Audit; b. Consistency between audit implementation by the Public Accounting Firm and the prevailing auditing standards; c. Consistency between the financial reports and the prevailing accounting standards; and d. Implementation of followup actions by the Board of Directors on findings made by the Internal Audit Work Unit, Public Accountant, and the results of supervision by Bank Indonesia and/or the Financial Services Authority, as recommendations to the Board of Commissioners.


Duties and Responsibilities of Audit Committee The function of Audit Committee is to assist and facilitate the Board of Commissioners in performing its monitoring function. Furthermore, the Audit Committee focuses on improving the effectiveness of internal control system of the Bank, including the effectiveness of implementation of duties of External Auditor and Internal Audit related to the Internal Control System.

submitted by the Board of Directors to the Board of Commisioners, and identifying matters that require attention from the Board of Commissioners, among others: 1. Preparing the Annual Work Program to be approved by the Board of Commissioners. 2. Reviewing the financial information to be issued by the Bank to the public and/ or other authorities, financial statements, projections and other reports pertaining to the Bank’s financial information. 3. Analysing the Bank’s level of compliance towards laws and regulations pertaining to the Bank’s activities. 4. Providing input on appointment, resignation, or dismissal of the Head of Audit Division. 5. Monitoring, analysing and evaluating audit planning and implementation as well as monitoring follow-up actions to the internal audit results in order to assess the adequacy of internal control, including the adequacy of financial reporting process.

Company Profile

Audit Committee’s Charter The Audit Committee has a charter that contains work guideline and procedure as a foundation for Audit Committee to carry out its function and role. The Charter particularly regulates matters related to organization, requirement of membership, duties and responsibilities, authorities, and meeting as well as term of office. The Audit Committee’s Charter is reviewed regularly.

Management Report

Yes


9. Maintaining strict confidentiality of documents, data and information of the Bank. 10. Analyzing complaints received by the Audit Committee about the Bank’s accounting and financial reporting processes, as well as ensuring the followup to such complaints. 11. Analyzing and providing recommendations to the Board of Commissioners concerning the existence of potential conflicts of interest of the Bank Authorities of Audit Committee The Audit Committee is authorized to: 1. Access all of the Bank’s documents, data and information pertaining to the Bank’s employees, funds, assets and resources required. 2. Directly communicate with employees, including the Board of Directors and parties performing the internal audit function, risk management, and Accountant in relation to the duties and responsibilities of the Audit Committee. 3. Involve independent parties outside the Audit Committee required to assist the Audit Committee in implementing its duties (where necessary) 4. Executing other functions and authority as given by the Board of Commissioners

188


Through the approval of the Board of Commissioners, the Audit Committee is authorized to ask the internal and external auditors to review and investigate the problems that may arise and impact on the Bank’s performance. Audit Committee’s Meetings In order to support the implementation of its duties and responsibilities according to the Audit Committee’s Charter, Audit Committee’s meetings are held regularly with the following provision: 1. Meeting of the Audit Committee must be conducted on a periodical basis, at least once in every 3 (three) months. 2. Meeting of the Audit Committee can only be held when attended by at least 51% (fifty-one percent) of the total members, including an Independent Commissioner and an Independent Party. 3. The Audit Division Head is always present in the meetings of the Audit Committee and when he/she is in absence, it can be delegated to officials from the Audit Division. 4. If necessary, the Audit Committee may invite the Board of Directors and/or Executive Officers of the Bank to discuss issues in the Audit Committee meetings.

5. Issues arising at any meeting of the Audit Committee must be resolved by means of deliberations to reach a consensus. If no resolution can be reached by means of deliberations to reach a consensus, then the issues arising are to be decided by way of simple majority of votes. 6. Every member of the Audit Committee shall have one vote. In the event of conflict of interest on a particular issue, the member of the Audit Committee having an interest in the subject matter under deliberation shall not be entitled to vote on that issue. In the event of a tie, the chairman of the meeting shall be entitled to cast the deciding vote. 7. Agenda of the Audit Committee meeting is based on the Annual Work Plan and other matters that are important to be discussed. 8. The result of Audit Committee Meeting must be summarized into minutes of meeting and signed by all members of the Audit Committee present at the meeting and be properly documented. Dissenting opinions in the Audit Committee Meeting must be clearly stated in the minutes of meeting, including the reasons for the dissenting opinions. Minutes of Audit Committee meetings are to be reported to the Board of Commissioners.

2016 Performance

Meetings and Meeting Agendas of Audit Committee No.

Meeting Date

Meeting Agenda

February 9, 2016

1. 2.

2015 QNBI Audited Financial Statements. 2015 2nd Semester of Audit Implementation Report.

2.

April 5, 2016

1. 2. 3. 4.

2016 Audit Schedule. Audit Schedule Realization. Audit Follow-Up Status as of Mrch 31, 2016. Details of Audit Follow-Up.

3.

April 12, 2016

March 2016 position of QNBI Financial Statements.

4.

May 31, 2016

1. 2.

5.

June 7, 2016

May 31, 2016 position of Financial Statements.

6.

June 7, 2016

Internal Audit Presentation to Audit Committee as of May 2016

7.

July 12, 2016

2016 Audit Report on Makasar Veteran Main Branch

8.

July 26, 2016

Financial Statements as of June 30, 2016

9.

August 9, 2016

Update from Compliance

10.

August 30, 2016

Early Warning System

11.

September 13, 2016

Continued Discussion on Early Warning System

12.

October 4, 2016

1. 2.

13.

October 11, 2016

Audit Issue Highlights

14.

October 25, 2016

Bank Performance in Q3 – 2016

15.

November 22, 2016

Discussion regarding Credit Process/Mechanism and its problems

16.

November 29, 2016

Continuing Discussion regarding Credit Process

17.

December 6, 2016

1.

QNBI Financial Statements as of April 30, 2016. 2016 2nd Quarterly of Audit Implementation Report.


Audit Quarterly Presentation Special Credit Audit

Presentation of 2017 Audit Plan & Result of Vendor Selection for 2017 Quality Assurance Review. 2017 Submission of Audit Committee Activities Calendar.

December 13, 2016

Update from Compliance and Procedure Division

19

December 13, 2016

Proposal for Appointment of KAP Purwanto, Sungkoro & Surja (member firm of “EY”) as the Bank’s 2017 External Auditor

20

December 20, 2016

Anti Fraud & Investigation.


189


18.


2.

Management Report

1.


Frequency of Audit Committee’s Meetings and Attendance Record Throughout 2016, the Audit Committee has conducted 20 (twenty) meetings. The following table shows the attendance frequency of each member of the Audit Committee in the meetings. Audit Committee’s Meetings and Attendance Level Name

Position in Audit Committee

Physical Attendance

Video/Tele Conference

Attendance Level

Chairman (also as Member)

20

-

100%

Irzal Zaini

Member

20

-

100%

Tjetjep Hasmita*

Member

17

-

85%

Rusli Witjahjono**

Member

1

-

5%

Djoko Sarwono

* Appointed as a Chairman and member of Audit Committee in the Bank since May 31, 2016. ** Resign from his position as an Audit Committee’s Member in May 10, 2016. Duties Implementation of Audit Committee Throughout 2016, the Audit Committee has carried out a series of activities to assist Board of Commissioners in performing supervisory function over the Bank’s activities and operation. The implementation of Audit Committee work program in 2016 is as follows: 1. Discussed on significant Internal Audit’s findings in 2015 which required follow up and monitoring from related division. 2. Submitted reporting on implementation of Audit Committee duties during 2015. 3. Discussed and evaluated on 2015 audited financial statements of the Bank together with Finance & Accounting division. 4. Discussed and Evaluated on financial statements of the Bank periodically for the position of certain period in 2016 together with Finance & Accounting division. 5. Monitored the Internal Audit performance as had been scheduled as well as discussed the follow up on Internal Audit findings and also External

190


6.

7.

8.

9. 10. 11.

Auditor together with Internal Audit division. Discussed with related divisions and evaluated on 2016 Early Warning System Implementation in the Bank. Discussed with related divisions regarding credit process and the relevant problems. Discussed and prepared reporting on Audit Committee Work Plan realization on quarterly and semiannually basis. Prepared 2017 Workplan and Meeting Schedule of the Audit Committee. Provided recommendation on the appointment of Public Accountant Firm in 2017. Reviewed the 2017 Internal Audit Plan.

Audit Committee’s Findings and Its Follow-Up In 2016, the Audit Committee did not find any findings which could provide significantly impact to financial and non-financial performance of the Bank.

Remuneration and Nomination Committee Legal Reference for Remuneration and Nomination Committee Establishment Remuneration and Nomination Committee is established by referring to the Remuneration and Nomination Charter No. 4-00 dated June 12, 2013 as lastly amended with the Remuneration and Nomination Committee Charter No. 01.10.00 dated November 26, 2015. In addition, also based on the Bank Indonesia Regulation (PBI) No. 8/4/ PBI/2006 dated January 30, 2006 regarding Implementation of Good Corporate Governance for Commercial Banks, which has amended with the PBI No. 8/14/ PBI/2006 dated October 5, 2006, which currently have been revoked and declared invalid, changed to FSA/OJK No. 55/POJK.03/2016 dated December 7, 2016 concerning the implementation of Corporate Governance for Commercial Banks, the Bank Indonesia Circular Letter (SEBI) No. 15/15/DPNP dated April 29, 2013 regarding Implementation of Good Corporate Governance for Commercial Banks and the Financial Services Authority (OJK)

4.

5.

7.


191


9.

The composition of Remuneration and Nomination Committee of the Bank has been changed several times and lastly appointed and Assigned based on the Board of Directors’ Decree as mentioned below. Therefore, the Remuneration and Nomination Committee members as of December 31, 2016, are as follows:


8.

Membership Structure of Remuneration and Nomination Committee Remuneration and Nomination Committee of the Bank consists of 3 (three) members which report directly to the Board of Commissioners. The Remuneration and Nomination Committee comprises of an Independent Commissioner serving as Chairman of Committee as well as as a member and 2 (two) others member.


6.

The Bank must have documentation for the resolution of appointment and dismissal of the members of Remuneration and Nomination Committee.

Company Profile

Appointment of Remuneration and Nomination Committee As stipulated in the Remuneration and Nomination Committee’s Charter, the membership of Remuneration and Nomination Committee are required to meet the following criteria: 1. Members of the Remuneration and Nomination Committee shall consist of at least 3 (three) members as following: a. 1 (one) Chairman concurrently member, who is Independent Commissioner. b. Other members who may originate from: 1) Member of the Board of Commissioners; 2) Executive officer who supervises human resources or 1 (one) employee representative who has knowledge in remuneration and or nomination system and Bank’s succession plan. 2. The majority members of the Remuneration and Nomination Committee cannot be from managerial officers under the Bank’s Director who supervises human resources. 3. Members of the Remuneration and Nomination Committee

Remuneration and Nomination Committee no longer hold the position. 10. Members of the Remuneration and Nomination Committee can no longer perform their function if they are dismissed based on the resolution of Board of Commissioners meeting, for any of the following reasons: a. Demise; b. Resignation; or c. Permanently unavailable thus cause them unable to perform their duties or have been medically diagnosed to be unable to perform their duties for more than 6 (six) consecutive months.

Management Report

The Remuneration and Nomination Committee is formed by and responsible to the Board of Commissioners of the Bank in supporting functions and duties of the Board of Commissioners related to nomination and remuneration of the members of the Board of Directors and Board of Commissioners.

from external parties of the Bank shall meet the following requirements: a. Does not have affiliated relationship with the Bank, any members of the Board of Directors, Board of Commissioners or Ultimate Shareholder of the Bank; b. Has experience related to Nomination and/or Remuneration; and c. Does not hold double position as members of other committees of the Bank. Member of Board of Directors of the Bank cannot serve as member of Remuneration and Nomination Committee. In the event the member of the Committee is set for more than 3 (three) persons, the Independent Commissioner, at the minimum must be 2 (two) persons. Chairman of the Committee can only serve as a chairman on 1 (one) other committee in the Bank. Members of Remuneration and Nomination Committee are appointed and dismissed according to resolution of Board of Commissioners’ meeting for certain period of service and may be reappointed. The period of service of member of Remuneration and Nomination Committee shall be no longer than period of service of Board of Commissioners as regulated in the Bank’s article of association. Replacement of member of Remuneration and Nomination Committee who is not from Board of Commissioners shall be done no later than 60 (sixty) days from the date in which the said member of the

2016 Performance

Regulation No. 34/POJK.04/2014 dated December 8, 2014 regarding Nomination and Remuneration of Issuers or Public Company.


Name

Position in Remuneration and Nomination Committee

Soeroto Moehadji


Grant Eric Lowen

Member

Steven Stevanus

Member


Decree of BoD No. 002/SK-DIR/I/2016 dated January 4, 2016

The above Remuneration and Nomination Committee Membership shall be effective from the issuance date of Decree of BoD No. 002/SK-DIR/I/2016 until 2018. Profiles of Remuneration and Nomination Committee

Steven Stevanus Member of Remuneration and Nomination Committee Citizen of Indonesia, 32 years old. Earned his Bachelor degree in Computer Science from Bina Nusantara University, Jakarta in 2006. He is lastly appointed as a member of Remuneration and Nomination Committee in the Bank through Decree of BoD No. 002/SKDir/I/2016 dated January 4, 2016.

Suroto Moehadji Chairman of Remuneration and Nomination Committee Profile of Suroto Moehadji could be found in the Board of Commissioners’ Profile section of this Annual Report. Grant Eric Lowen Member of Remuneration and Nomination Committee Profile of Grant Eric Lowen could be found in the Board of Commissioners’ Profile section of this Annual Report.

Prior to joining the Bank as Rewards Manager in 2013, he took up several posts in various companies such as Management Trainee in Lion Super Indo (2006 – 2007), Research and Consulting in PT Spire Indonesia (2007 – 2011), Rewards Portfolio & Annual Review Manager and Incentive Manager in

PT Bank CIMB Niaga Tbk (2011 – 2013). During 2016, he was actively attended competence development programs, among others: QNB Values Festival at Jakarta, Indonesia in July 30, 2016. Independence of Remuneration and Nomination Committee Remuneration and Nomination Committee performs its duties and responsibilities independently. Decisions and policies taken by the Remuneration and Nomination Committee is an objective results which is not intervened by any parties with any reason and other actions which may have potential to cause conflict of interest.

Family or Financial Relationship of the Remuneration and Nomination Committee’s Members Family Relationship with Other Board of Committee Commissioners Members

Name

Board of Directors


Board of Directors


Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Suroto Moehadji

-

√

-

√

-

√

-

√

-

√

-

√

-

√

-

√

Grant Eric Lowen

-

√

-

√

-

√

-

√

-

√

-

√

-

√

√

-

Steven Stevanus

-

√

-

√

-

√

-

√

-

√

-

√

-

√

-

√

192



193




2. Related to Nomination Function. a. Provide recommendation to Board of Commissioner on: 1) Composition of positions of members of the Board of Directors and/or the Board of Commissioners;

Company Profile

c.

1) Financial performance and fulfillment of reserve as provided for in prevailing laws and regulations; 2) Remuneration applicable in the banking industry and within the business scale of the Bank; 3) Duties, responsibilities and authority of members of the Board of Directors and/or Board of Commissioners which are associated with the achievement of objectives and performance of the Bank; 4) Performance target of each member of the Board of Directors and/or the Board of Commissioners; and 5) Balance of allowance between fixed allowance and variable allowance. 6) Consideration of Bank’s long term target and strategy. d. Remuneration structure, policy, and amount, have to be evaluated by Remuneration and Nomination Committee at least once in a year.

Management Report

Duties and Responsibilities of Remuneration and Nomination Committee Duties and responsibilities of Remuneration Committee as stipulated in Charter of Remuneration and Nomination Committee are as follows: 1. Related to Remuneration Function a. Duties and responsibilities of Remuneration and Nomination Committee are: 1) Provide recommendation to Board of Commissioner concerning: a) Remuneration structure; b) Remuneration policy; and c) Remuneration amount

b.

2) Assist the Board of Commissioners in conducting performance appraisal in accordance with remuneration received by each member of the Board of Directors and/or the Board of Commissioners. In performing the function of remuneration, the Remuneration and Nomination Committee must follow the following procedure: 1) Formulating a remuneration structure for members of the Board of Directors and/or the Board of Commissioners; 2) Formulating and recommending the Board of Commissioner on remuneration policy for members of the Board of Directors and/or the Board of Commissioners to be delivered to the General Meeting; 3) Providing the Board of Commissioner with recommendation in remuneration policy of Executive Officers and emplopyees in general to be delivered to Board of Directors; and 4) Formulating remuneration amount for Board of Directors and/or Board of Commissioner. Formulation of structure, policy and amount of remuneration must consider:

2016 Performance

Remuneration and Nomination Committee’s Charter The Remuneration and Nomination Committee Charter contains work guideline and procedure as a foundation for Remuneration and Nomination Committee to carry out its function and role. The Charter is continuously improved and renewed in accordance with the development/changes of prevailing regulations as well as latest condition. The last renewal of Remuneration and Nomination Charter took place in 2015 which is affirmed in the Charter No. 01.10.00 dated November 26, 2015 regarding the Remuneration and Nomination Committee Charter. Among the matters regulated are about membership, duties and responsibilities, work ethics, work mechanism and procedure, meeting and resolution, reporting system, as well as facilities and support.


2) Policies and criteria required in the Nomination process; and 3) Performance evaluation policy for members of Board of Directors and/or members of Board of Commissioners. b. Assist the Board of Commissioners in conducting performance appraisal of member of Board of Directors and/ or member of Board of Commissioners based on the benchmark determined as evaluation material; c. Provide recommendation to the Board of Commissioners on personal development programs for members of Board of Directors and/ or members of Board of Commissioners; and d. Provide recommendation of qualified candidates as member of Board of Director and/or Board of Commissioner to the Board of Commissioner to be submitted to General Meeting of Shareholders. e. Provide recommendation on Independent Party who will be member of Audit Committee and Risk Oversight Committee to the Board of Commissioner. f. In performing nomination function, the Remuneration and Nomination Committee must follow the following procedure:

194


g.

1) Formulating the composition and nomination process of member of Board of Directors and/or Board of Directors and/ or Commissioners; 2) Formulating required policies and criteria in the nomination process of candidate of member of Board of Directors and/or Board of Commissioners; 3) Assisting the implementation of evaluation on the performance of member of Board of Directors and/or Board of Commissioners; 4) Formulating personal development programs for member of the Board of Directors and/or Board of Commissioners; and Review and propose eligible candidates to become member of the Board of Directors and/or Board of Commissioners to Board of Commissioners, to be submitted to General Meeting of Shareholders.

Remuneration and Nomination Committee’s Meeting To support its duties and responsibilities implementation as mandated in Charter of Remuneration and Nomination Committee, Remuneration and Nomination Committee Meetings are held regularly with the following provision:

1. The Remuneration and Nomination Committee meeting is held periodically with at least once in 4 (four) months. 2. The Remuneration and Nomination Committee meeting will only be held if attended at least by 51% (fifty one percent) of number of committee member including one Independent Commissioner and Executive Officer from Human Resources. 3. Resolution of Remuneration and Nomination Committee is taken based on deliberation to achieve consensus. 4. In the event that the consensus is not reached, decision making shall be held based on majority votes with principle of 1 (one) person 1 (one) voice. 5. In the event of draw during decision making by voting, decision shall be made by the Chairman of the Remuneration and Nomination Committee. 6. In the event that decision making process finds dispute, the dispute must be set forth in the minutes of meeting complete with the reasons. 7. Result of the meeting of Remuneration and Nomination Committee must be set forth in the minutes of meeting and documented by the Bank. 8. Minutes of Remuneration and Nomination Committee meeting must be submitted in writing to Board of Commissioners.

2016 Performance

Meetings and Meeting Agendas of Remuneration and Nomination Committee No.

Meeting Date

Meeting Agenda 1. 2. 3. 4. 5.

Resignation of Mr. Rusli (Operations Director). Resignation of Mr. Muthu Chidambaram (Komisaris). Resignation of Mr. Andrew McGregor Duff (President Director). Appointment of Mr. Andrew McGregor Duff as Non-Independent Commissioner. Composition of Board of Directors and Board of Commissioners.

2.

February 9, 2016

Nomination of Audit Committee Member

3.

February 25, 2016

Nomination of E-Banking & Financial Inclusion Director of the Bank.

4.

April 5, 2016

Nomination Policy (Amendment).

5.

April 12, 2016

Remuneration of Board of Commissioners.

6.

April 18, 2016

Self Assessment of Board of Commissioners

7.

May 10, 2016

Nomination of Audit Committee Member.

8.

August 29, 2016

1. 2.

9.

November 1, 2016

Re-nomination of E-Banking and Financial Inclusion Director

10.

December 6, 2016

Nomination of Wholesale Banking Director

Company Profile

January 18, 2016

Management Report

1.

Sharing on the FSA/OJK concern. Candidate of President Director.


Frequency of Remuneration and Nomination Committee Meetings and Attendance Record In 2016, the Remuneration and Nomination Committee has conducted internal meetings for 10 (ten) times with the level attendance 100% (one hundred percent) for all members in every meetings, as stated in the following table. Remuneration and Nomination Committee’s Meetings and Attendance Level Position in Remuneration and Physical Attendance Nomination Committee


Attendance Level


10

-

100%

Grant Eric Lowen

Member

2

8

100%

Steven Stevanus

Member

10

-

100%

In addition, the Remuneration and Nomination Committee also generates some important decision though circular and approved by all members of the Committee. Duties Implementation of Remuneration and Nomination Committee During 2016, the Remuneration and Nomination Committee has carried out a series of activities to assist Board of Commissioners, among others as follows:

1. Provided vision on 2015 performance assessment. 2. Provided recommendation on remuneration structure of the Board of Commissioners, Board of Directors and Committees under Board of Commissioners.

3. Provided recommendation on nomination of the new member of Board of Directors and Board of Commissioners in connection with the resignation of some members of Board of Directors and Board of Commissioners. PT Bank QNB Indonesia Tbk

195


Suroto Moehadji


Name


4. Provided recommendation on nomination of the Audit Committee Member. 5. Provided recommendation on composition of the Board of Directors and Board of Commissioners. 6. Provided recommendation on establishment of Board of Commissioners’ Performance Self-Assessment Policy. 7. Provided recommendation on amendment of nomination policy for Board of Commissioners, Board of Directors and Committees Members. 8. Provided recommendation on 2017 Performance Appraisal.

Risk Oversight Committee Legal Reference for Risk Oversight Committee Establishment The establishment of Risk Oversight Committee refers to Risk Oversight Committee Charter No. 3-00 dated June 12, 2013 as well as PBI No. 8/4/PBI/2006 dated January 30, 2006 regarding Implementation of Good Corporate Governance for Commercial Banks, as amended with PBI No. 8/14/ PBI/2006 dated October 5, 2006, which currently have been revoked and declared invalid, changed to FSA/OJK No. 55/POJK.03/2016 dated December 7, 2016 concerning the implementation of Corporate Governance for Commercial Banks, dan Circular Letter Bank Indonesia (SEBI) No. 15/15/DPNP dated April 29, 2013 regarding Implementation of Good Corporate Governance for Commercial Banks, in order to support the effectivity in implementation of its duties and reponsilities.

196


The Risk Oversight Committee is particularly established to support the Board of Commissioners’ supervisory function in conducting necessary risk oversight functions on the duties performed by the Board of Directors in managing the Bank while implementing GCG in the Bank. Appointment of Risk Oversight Committee As stipulated in the Risk Oversight Committee Charter, the Risk Oversight Committee members must fulfill the following requirements: 1. Have a high integrity, capability, knowledge, and experience with adequate educational background, as well as the ability to communicate effectively. 2. Members of Risk Oversight Committee from Independent Parties are considered having a finance capability if they meet the following criteria: a. Have knowledge in economics, finance, and/ or banking; and b. Have work experience in the area of economics, finance and/or banking at least 5 (five) years according to the prevailing regulations. 3. Members of Risk Oversight Committee from Independent Parties have capability in risk management if they meet the criteria of: a. Have knowledge in risk management, and/or b. Have working experience in the area of risk management at least for 2 (two) years according to the prevailing regulations.

4. Have a good knowledge to analyze and interpret financial statement. 5. Have an adequate knowledge on law and regulation including Financial Services Authority (FSA/OJK) and/or Bank Indonesia Regulation as well as other related regulations. Structure and Composition of Risk Oversight Committee The Risk Oversight Committee consists of 3 (three) members and reports directly to Board of Commissioners, which consist of 1 (one) member which is an Independent Commissioner and also serves as the Chairman of Committee and 2 (two) members. All members of the Risk Oversight Committee are independent parties who have adequate level of professionalism to review, measure, and evaluate risks and Bank’s effort to mitigate risks. Concurrent positions of Risk Oversight Committee have taken into consideration of competences, independency, discretion, and code of conduct, as well as respective duties and responsibilities implementation in accordance with applicable regulations. As of December 31, 2016, the Risk Oversight Committee are as follows:

Muhammad Anas Malla

Position in Risk Oversight Committee Chairman (also as Member)

Irzal Zaini

Member

Ani Hadi Setyowati

Member

2016 Performance

Name


Decree of BoD No. 001/SK-DIR/I/2016 dated January 4, 2016

Profiles of Risk Oversight Committee

Profle of Irzal Zaini could be found in Audit Committee Profile section of this Annual Report.

Prior to joining the Bank, she took up several posts in PT Bank Negara Indonesia (Persero) Tbk such as

All members of the Risk Oversight Committee has no affiliation with the Board of Commissioners, Board of Directors, members of other committees as well as the controlling shareholder. Thus, in carrying out their duties, members of the Risk Oversight Committee does not have a conflict of interest that may occur, so as ensuring the highest level of independence in performing its duties and responsibilities.


197


Citizen of Indonesia, 61 years old. Received her Bachelor degree in Economy from Brawijaya University, Malang in 1991 and Master degree in Management in Labora Management College, Jakarta in 1996 as well as Master in Administration from University of Indonesia in 2001. She is appointed as member of Risk Oversight Committee of the Bank through Decree of Board of Directors No. 048/SK-Dir/XI/2011 dated November 28, 2011.

Family or Financial Relationship of the Risk Oversight Committee’s Members


Ani Hadi Setyowati Member of Risk Oversight Committee

Independence of Risk Oversight Committee In accordance with FSA/OJK Regulation No. 55/POJK.03/2016 dated December 7, 2016 concerning the Implementation of Corporate Governance for Commercial Banks, as well as Risk Oversight Committee Charter, members of Risk Oversight Committee should act independently as reflected in the following criterias: 1. Former members of the Bank’s Board of Directors or Executive Officer or other parties who have relationship with the Bank which can affect their capabilities to act independently, cannot be appointed as Independent Parties as the Bank’s Risk Oversight Committee member before having cooling-off for 6 (six) months. Such provision refers to Bank Indonesia’s circular letter No. 15/15/DPNP dated April 29, 2013 (except


Irzal Zaini Member of Risk Oversight Committee

During 2016, he was actively attended competence development programs, among others: QNB Values Festival at Jakarta, Indonesia in July 30, 2016.

for the Board of Directors or Executive Officer who perform supervisory function). 2. Do not have direct or indirect relationship with the Bank. Provided that the members of Risk Oversight Committee has acquired shares from a legal action, they should transfer the shares to other people no later than 6 (six) months after the obtainment. 3. Are not affiliated with the Bank, the Board of Commissioners, the Board of Directors and the Controlling Shareholder. 4. Do not have a direct or indirect business relationship with the Bank.

Company Profile

Muhammad Anas Malla Chairman of Risk Oversight Committee Profile of Muhammad Anas Malla could be found in the Board of Commissioners’ Profile section of this Annual Report.

Auditor in Head Office (1981 – 1986), Finance Control Division (1986 – 2001), Human Resources Division (2001 – 2004), Compliance Division (2004 – 2009), Network and Services Division (2009 – 2010).

Management Report

The above Risk Oversight Committee Membership shall be effective from the issuance date of Decree of BoD No. 001/SK-DIR/I/2016 until 2018.


Family or Financial Relationship of the Risk Oversight Committee’s Members Family Relationship with Name

Other Board of Committee Commissioners Members

Board of Directors


Board of Directors


Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Muhammad Anas Malla

-

√

-

√

-

√

-

√

-

√

-

√

-

√

-

√

Irzal Zaini

-

√

-

√

-

√

-

√

-

√

-

√

-

√

-

√

Ani Hadi Setyowati

-

√

-

√

-

√

-

√

-

√

-

√

-

√

-

√

Duties and Responsibilities of Risk Oversight Committee Duties and responsibilities of Risk Oversight Committee as stipulated in Risk Oversight Committee’s Charter of the Bank are, as follows: 1. To prepare the annual general working plan of the Committee and submit it for the Board of Commissioners’ approval. 2. To evaluate risk appetite and limits approved by the Board of Commissioners. 3. To evaluate the suitability of the Bank’s risk management policies and their implementation. 4. To monitor and evaluate the performance of Risk Management Committee and Risk Management unit in order to provide recommendations to the Board of Commisioners. 5. To evaluate the Bank’s risk management policy at least 1 (once) a year. 6. To review the Charter at least 1 (once) a year and perform the proposed amendments if necessary. 7. To conduct self-assessment on effectiveness of the Committee at least 1 (once) a year.

198


8. To evaluate accountability of the risk management policy of the Board of Directors at least on quarterly basis. 9. To Cooperate with external consultants, accountants, or other external parties, if necessary. 10. To perform other tasks, in addition to the above, are given by the Board of Commissioners to the Committee as needed. Risk Oversight Committee’s Charter The Risk Oversight Committee Charter contains work guideline and procedure as a foundation for Risk Oversight Committee to carry out its function and role. The Charter is continuously improved and renewed in accordance with the development/changes of prevailing regulation as well as latest condition. The last renewal of Risk Oversight Committee Charter took place in 2013 which is affirmed in the Charter No. 3-00 dated June 12, 2013 regarding the Risk Oversight Committee Charter. Among the matters regulated about organization, quorum, Risk Oversight Committee meetings, duties, procedures, reports and term of office.

Risk Oversight Committee’s Meetings To support its duties and responsibilities implementation as mandated in Charter of Risk Oversight Committee, Risk Oversight Committee Meetings are held regularly with the following provision: 1. The Risk Oversight Committee’s meetings should be held at least 4 (four) times a year, additional meetings can be held at any time if necessary, in accordance with the policy of the Risk Oversight Committee. 2. The members of Board of Directors, Board of Commissioners, and Bank’s employees attend Risk Oversight Committee meeting by invitation from the Risk Oversight Committee. 3. External parties can be invited to attend the meeting if deemed necessary. 4. The meeting is chaired by the Chairman or the most senior member of Risk Oversight Committee in the event the Chairman was absent.

7. The Risk Oversight Meeting can only be held if attended by at least 51% (fifty one percent) from total members.

Management Report

6. The minutes of the meeting should be signed by all members of Risk Oversight Committee in attendance. All minutes of the meeting should be shared all members of Risk Oversight Committee, the Board of Directors, and the Board of Commissioners.

Meetings and Meeting Agendas of Risk Oversight Committee No.

Meeting Date

2016 Performance

5. In case of dissenting opinions in the Risk Oversight Committee meetings, the dissenting opinions should be stated in the minutes of the meeting as well as its reason.

Meeting Agenda

2.

April 13, 2016

1. 2. 3. 4. 5. 6.

Executive Summary and Minutes of the Previous Meeting. Top Bank Risk - March 2016. Fraud Gap Analysis. Risk Profile Q1-2016. Risk Dashboard. Others.

3.

June 14, 2016

1. 2. 3. 4. 5. 6. 7.

Executive Summary and Minutes of the Previous Meeting. ROC Checklist. Risk Based Bank Rating at Semester I/2016. Anti-Fraud Strategy. Credit Risk. Market, Liquidity and Operational Risk. Others.

4.

August 25, 2016

1. 2. 3. 4. 5. 6.

Executive Summary and Minutes of the Previous Meeting. 6-Point Improvement Plan. Risk Based Bank Rating (RBBR) – 1st Semester 2016. Special Asset Management (SAM). Market, Liquidity and Operational Risk. Other Agenda – Risk Register Update.

5.

November 24, 2016

1. 2. 3. 4. 5. 6. 7.

Executive Summary and Agenda Highlights. Top Issues and Credit Projects. RBBR Action Plan. Minutes of Meeting. Peer Bank Analysis. Risk Dashboard. Other Agendas.



Executive Summary and Minutes of the Previous Meeting. CRO Report in January 2016. Risk Based Bank Rating at Semester II/2015. 2016 Risk Appetite Statement. Credit Risk Dashboard. Operational Risk. Others.


1. 2. 3. 4. 5. 6. 7.


January 14, 2016

Company Profile

1.

199


Frequency of Risk Oversight Committee Meetings and Attendance Record In 2016, the Risk Oversight Committee has conducted meetings for 5 (five) times. The following table shows the attendance frequency of each member of the Risk Oversight Committee in the meetings. Risk Oversight Committee’s Meetings and Attendance Level Name

Position in Risk Ovesight Committee

Physical Attendance


Attendance Level


5

-

100%

Irzal Zaini

Member

5

-

100%

Ani Hadi Setyowati

Member

5

-

100%

Muthu Chidambaram*

Member

1

-

20%

Mohammad Anas Malla

* Resign from his position as the member of Board of Commissioners by GMS Resolution dated 16 February 2016. Implementation of Duties of Risk Oversight Committee Throughout 2016, the Risk Oversight Committee has carried out many activities to assist Board of Commissioners in performing supervisory function over the Bank’s activities and operation. The implementation of Risk Oversight Committee work program in 2016 are as follows: 1. Formulate report on the results of Risk Oversight Committee activities, periodically. 2. Evaluate the implementation of duties of Risk Management division and Risk Management Committee on semi-annually basis.

200


3. Evaluate the implementation of risk management as a base of Risk Profile report and evaluate the risk management potential which covers credit risk, market risk, liquidity risk, operation risk, legal risk, reputation risk, strategic risk, and compliance risk. 4. Evaluate several matters such as reports of Risk Director, the Bank’s soundness level, top 30 obligor, loan portfolio, RCSA update, business continuity management update, risk dashboard, risk appetite statement, risk register and risk oversight committee calendar.

5. Update new regulations and policies related to GCG, tax, LCR, criminal investigation, disclosure remuneration and nomination. 6. Monitor new procedures and policies related to assets takeover (AYDA). 7. Evaluate and monitor antifraud strategy of the Bank. 8. Monitor the Risk Based Bank Rating. 9. Evaluate and monitor the Bank’s improvement plans. 10. Evaluate the realisation of the Risk Oversight Committee’s work plan in 2016.

Board of Directors


201




Pursuant to the FSA/OJK Regulation No. 55/POJK.03/2016 dated December 7, 2016 concerning the Implementation of Corporate Governance for Commercial Banks, and FSA/OJK Regulation No. 33/POJK.04/2014 dated December 8, 2014 regarding the Board of Directors and Board of Commissioners of Issuers or Public Companies, the members of Board of Directors should meet the requirements of integrity, competency, financial reputation as well as passing the Fit and Proper Test as required by Bank Indonesia Regulation No. 12/23/PBI/2010 dated December 29, 2010 regarding Fit and Proper Test.

Company Profile

Duties and responsibilities of the Board of Directors are regulated in the Bord of Directors Charter which is also in compliance with the prevailing laws and regulations. In performing its duties, the Board of Directors is responsible to the GMS.

Criteria and Procedures for the Appointment of Members of Board of Directors

Management Report

In addition, the Board of Directors is also responsible to represent the Bank inside and outside the court in accordance with the Articles of Association and Limited Liability Company No. 40 Year 2007.

Members of the Board of Directors are appointed and dimissed by the GMS by considering the recommendation from Remuneration and Nomination Committee.

2016 Performance

The Board of Directors is one of the Bank’s organ which authorized and fully responsible on the management for the interest of the Bank. Each member of the Board of Directors could carry out its duty and take decisions in accordance with their respective assignments and authorities. However, the execution of tasks by each member of the Board of Directors remains to be a collective responsibility. The position of each member of the Board of Directors including President Director is equal. The duty of the President Director as primus inter pares is to coordinate the activities of the Board of Directors.

Appointment Criteria With reference to the Board of Directors Charter, a candidate member of the Board of Directors must meet the criteria and independence requirements as follows: 1. Person who meets the requirements upon appointment and during his/ her tenure: a. Have a good character, morale, and integrity b. Able to perform legal acts c. In 5 (five) years before appointment and during the service: 1) Never been declared bankrupt. 2) Never been a member of Board of Directors and/or Board of Commissioners that convicted guilty causing the bankrupcy at any company. 3) Never been convicted of a criminal offense that harm the country financial and/or related to the financial sector, and 4) Never being a member of Board of Directors and/or Board of Commissioners that during the services: • Have not organize the Annual GMS • His/Her responsibility as a member of Board of Directors and/ or Board of Commissioners


was not accepted by the GMS or have not declared responsibility as a member of Board of Directors and/ or Board of Commissioners to the GMS, and • Have caused a company that obtained a license, approval, or registration from FSA/OJK did not meet the obligation to deliver annual report and/or financial report to FSA/OJK. 5) Have a commitment to comply with the prevailing law and regulation, and 6) Have knowledge and/ or skills need by the Bank as an Issuers. 7) Meet the requirement of integrity, competency and financial reputation as determined. 2. The majority of members of the Board of Directors shall have at least 5 (five) years of experience as an Executive Officer in a Bank. 3. Any proposal to replace and/ or appoint member of the Board of Directors by the Board of Commissioners to the GMS, must consider the Remuneration and Nomination Committee’s recommendation.

202


4. Each member of the Board of Directors must meet the requirement of having passed the Fit and Proper Test pursuant to FSA/OJK Regulation concerning Fit and Proper Test 5. Each member of the Board of Directors is prohibited from holding another position as a member of the Board of Commissioners, the Board of Directors or Executive Officer at any other Bank, company and/or institution.

Excluded from the double position is when the member of the Board of Directors responsible for supervising the Bank’s investment in its subsidiary, performs functional duty as a member of the Board of Commissioners at a nonBank or company controlled by the Bank, insofar that he/she does not forsake the implementation of their duties and responsibilities as a member of the Board of Directors of the Bank.

6. Each member of the Board of Directors both individually or jointly is prohibited from owning shares of more than 25% (twenty-five percent) of paid-in capital in any other company. 7. The majority of members of the Board of Directors is prohibited from having family relationship up to the second degree with any other members of the Board of Directors and/or members of the Board of Commissioners.

Appointment Procedure The candidate members of the Board of Directors are appointed provided that they have met the aforementioned criteria including passing the Fit and Proper Test with the following procedure: 1. Members of the Board of Directors shall be appointed by the Bank’s GMS. 2. Members of the Board of Directors must meet the requirement of successful completion of Fit and Proper Test in accordance with the provisions of Bank Indonesia and/or FSA/OJK regarding Fit and Proper Test and must fulfill the provisions of Bank Indonesia and/or FSA/OJK regarding the Implementation of Good Corporate Governance for Commercial Banks 3. Members of the Board of Directors who have obtained approval for Fit and Proper Test from the FSA/OJK shall be appointed by the GMS no later than 6 (six) months after the date of approval of the FSA/OJK. If the 6 (six) month period has expired and the appointment has not been made by the GMS, the approval from FSA/OJK will not applicable. 4. The appointment of members of the Board of Directors by the Bank’s GMS shall be deemed effective after the relevant member of the Board of Directors has obtained the approval of FSA/ OJK. Corporate Secretary Division shall be responsible for submitting applications, including the documentations required, in order to obtain the approval of Financial Services Authority (FSA/OJK).

As of December 31, 2016, the Board of Directors consists of 1 (one) Acting President Director and 5 (five) Directors, with the composition as follows:


Composition and total members of the Bank’s Board of Directors are generally established by taking into account its vision, mission, and strategic plans to allow a more effective, accurate, and

Based on the resolution of EGM on April 13, 2016, R. Andi Kartiko Utomo was appointed as the Bank’s Director which shall be effective upon obtaining approval from Financial Services Authority (OJK) on fit and proper test. Then, based on the resolution of EGM on December 19, 2016, Junita Wangsadinata was appointed as the Bank’s Directors which shall be effective on February 16, 2017 and upon obtaining approval from Financial Services Authority (OJK) on fit and proper test.

First Appointment

BI or FSA/OJK’s Approval

Terms of Office

Fit and Proper Test by


AGM, June 24, 2011

July 5, 2011

2011-2012 2012-2015 2015-2018

Bank Indonesia


Director

EGM, September 16, 2011

May 10, 2012

2011-2012 2012-2015 2015-2018

Bank Indonesia


Director

EGM, November 29, 2012

February 25, 2013

2012-2015 2015-2018

Bank Indonesia

Novi Mayasari

Director

AGM February 27, 2015

October 2, 2015

2015-2018


R. Andi Kartiko Utomo*

Director

EGM, April 13, 2016

-

-


Junita Wangsadinata**

Director

EGM, December 19, 2016

-

-



Position


203


*) Shall be effective upon obtaining approval from the Financial Services Authority (FSA/OJK) on fit and proper test. **) Shall be effective on February 16, 2017 and upon obtaining approval from the Financial Services Authority (OJK) on fit and proper test.


Company Profile

Total and Composition of Board of Directors

faster decision making as well as independent actions.

Management Report

Name

Dismissal Procedure Dismissal of the member of Board of Directors shall be performed by GMS. The tenure of the members of the Board of Directors shall expire if such member of the Board of Directors: 1. The term of office expires 2. Is declared bankrupt or placed under custody based on a court ruling; or 3. Resigns pursuant to the prevailing provisions; or 4. No longer complies with the requirements of prevailing laws and regulations; or 5. Is deceased; or 6. Is dismissed by the decision of GMS

2016 Performance

5. The term of office of the Board of Directors shall commence as of the date determined by the GMS in which she/he (they) is/ are appointed, and shall expire in 1 (one) term of office. 1 (one) term of office of the Board of Directors is 3 (three) years or at the adjournment of the Annual GMS at the end of 1 (one) term of office, unless otherwise decided by the GMS. 6. The Bank is obligated to submit the report on the appointment of members of the Bank’s Board of Directors to FSA/OJK by no later than 10 (ten) workdays following the effective appointment date, along with the minutes of the GMS. The report will be submitted by Corporate Secretary Division. 7. Members of the Board of Directors whose term of office expires may be reappointed 8. Term of office for Independent Directors is 2 (two) consecutive terms at most


Diversity In the Composition of Members of the Board of Directors Composition of the Board of Directors is established by taking consideration of the need and complexity of the Bank. In general, the composition is based on banking knowledge, capability, professional experience as well as experience in order to support the effectiveness of the Board of Directors’ duties implementation. The nomination of candidate is carried out with reference to the aforementioned criteria regardless of gender, race, ethnic, or religion, and initial recommendation source.

204


Independence of Board of Directors Independent Director In accordance with Indonesia Stock Exchange regulation, the Bank must have at least 1 (one) Independent Director, which fulfilled the requirements as follows: • Not affiliated with the Bank’s controlling Shareholders at least 6 (six) months prior to the appointment as Independent Director; • Not affiliated with the Board of Commissioners or Board of Directors of the Bank; • Not having concurrent position as member of the Board of Directors in other companies;

•

Not affiliated with institutions or professionals supporting the capital markets where its services are used by the Bank 6 (six) months prior to the appointment as Director.

The term of office of an Independent Director is at most 2 (two) consecutive terms. In the event an Independent Director’s position is vacant, then the Bank must fill such vacant position at the latest by the next GMS or within 6 (six) months after such vacancy occurs. The appointment of Independent Director was based on recommendation of Remuneration and Nomination Committee which approved by Board of Commissioner and appointed by the GMS. The position of Independent Director of the Bank is held by Windiartono Tabingin.

Financial Relationship with



Board of Directors


Yes

No

Yes

No

Yes

No

Yes

No

Yes

No


-

√

-

√

-

√

-

√

-

√

-

√


-

√

-

√

-

√

-

√

-

√

-

√


-

√

-

√

-

√

-

√

-

√

-

√

Novi Mayasari

-

√

-

√

-

√

-

√

-

√

-

√


-

√

-

√

-

√

-

√

-

√

-

√


-

√

-

√

-

√

-

√

-

√

-

√

*) Appointed as a Director of the Bank based on resolution of the Bank’s EGM dated April 13, 2016 which shall be effective upon obtaining approval from the Financial Services Authority (FSA/OJK) on fit and proper test. **) Appointed as a Director of the Bank based on resolution of the Bank’s EGM dated December 19, 2016 which shall be effective on February 16, 2017 and upon obtaining approval from the Financial Services Authority (OJK) on fit and proper test.


No


Yes

Company Profile

Board of Directors

Management Report


2016 Performance

Family Relationship with Name

The members of the Board of Directors of the Bank shall act independently, so there is no conflict of interest in the execution of their duties and responsibilities. The familial dan financial relationship between members of the Board of Directors, Board of Commissioners and Ultimate Shareholders are as follows:

Board of Commissioners and Ultimate Shareholders. All members of the Board of Directors are not having dual position as member of Board of Commissioners, Board of Directors or Executive Officer at the Bank or other institution as governed in the regulation on the implementation of good corporate governance for commercial banks.

Financial or Familial Relations of Members of the Board of Directors All members of the Bank’s Board of Directors are independent, do not have financial, management, share ownership, and familial relationship with any other member of Board of Directors,



205


Share Ownership by Board of Directors The Bank requires the members of Board of Directors to disclose their share ownership, both in PT Bank QNB Indonesia Tbk and other companies, which are located in Indonesia and abroad. Such disclosure should be updated every year.

Each member of the Board of Directors both individually or jointly is prohibited from owning shares of more than 25% (twentyfive percent) of paid-in capital in any other company.

In 2016, all the members of Board of Directors did not own more than 5% (five percent) or more than the paid-up capital in the Bank, other banks, non-bank financial institution, and any other companies in Indonesia and abroad.

Share Ownership >5% Board of Directors


Other Bank

Non-Bank Financial Institution

Other Companies


-

-

-

-


-

-

-

-


-

-

-

-

Novi Mayasari

-

-

-

-


-

-

-

-


-

-

-

-

*) Appointed as a Director of the Bank based on resolution of the Bank’s EGM dated April 13, 2016 which shall be effective upon obtaining approval from the Financial Services Authority (FSA/OJK) on fit and proper test. **) Appointed as a Director of the Bank based on resolution of the Bank’s EGM dated December 19, 2016 which shall be effective on February 16, 2017 and upon obtaining approval from the Financial Services Authority (OJK) on fit and proper test.

Concurrent Position of Board of Directors Each member of the Board of Directors is prohibited from holding another position as a member of the Board of Commissioners, the Board of Directors or Executive Officer at any other Bank, company and/or institution. Excluded from the double position is when the member of the Board of Directors responsible for supervising the Bank’s investment in its subsidiary, performs functional duty as a member of the Board of Commissioners at a non-Bank or company controlled by the Bank,

206


insofar that he/she does not forsake the implementation of their duties and responsibilities as a member of the Board of Directors of the Bank. The Board of Directors must disclose their concurrent positions in a statement which is then signed by the concerned Director. All members of the Bank’s Board of Directors do not have concurrent position prohibited by the FSA/OJK regulation No.55/POJK.03/2016 on the implementation of Corporate Governance for Commercial Banks.

Duties and Responsibilities of Board of Directors As stipulated in Decree of Directors No. 033/SK-DIR/ VI/2016 dated June 8, 2016 regarding the Divisions of Duties and Authorities of members of Board of Directors (the “BoD”), the BoD is an internal organ that is responsible for controlling and managing the performance of the Bank. In managing the Bank, the BoD carry out duties, authorities and responsibilities as set forth in the Bank’s Articles of


207


12.


11.


10.

Company Profile

9.

d. The BoD are obligated to communicate the Bank’s strategic Human Resource policies to the employees, among others policies on recruitment system, promotion system, remuneration system as well as the Bank’s plan to perform efficiency by reducing the number of employees, subject to confidentiality. Such disclosure must be conducted through known methods or easily accessible by employees. e. The BoD are required to provide complete, accurate, relevant, and timely data and information to the Board of Commissioners (“BoC”). f. The BoD are required to report the implementation of their duties to the shareholders in the GMS. In order to support the effectiveness of the implementation of duties and responsibilities, the BoD may establish committees. In the event that the committee was formed, the BoD shall evaluate the performance of the committees at the end of fiscal year. Each member of the BoD are jointly and severally liable for the Bank’s losses doe to mistakes or negligence members of BoD in carrying out their duties. Members of the BoD are able to implement their competence in carrying out their duties and responsibilities.

Management Report

7. Without prejudice to their responsibilities, the BoD have the right to appoint one or more authorized representatives to act on behalf of the BoD, and for that purpose should provide authorization letter. In the authorization letter, the representatives are authorized to carry out specific actions within certain financial limit and expiry date for the authorization. Such authorization cannot be transferred to other party. 8. In carrying out their function, the BoD should refer to the Good Corporate Governance implementation standards: a. The Board of Directors are required to implement Good Corporate Governance principles in all Bank’s business activities in all organizational level. b. The BoD are required to establish: 1) Internal Audit function unit 2) Risk Management function unit and Risk Management Committee; and 3) Compliance function unit. c. The BoD are required to follow-up audit finding and recommendation from the Bank’s internal audit, external auditor, audit findings of Financial Services Authority (FSA/ OJK) and/or supervisory results from other authorities.

2016 Performance

Association, and other prevailing regulations. Generally, the duties and authorities of the BoD are as follows: 1. Carry out management the interest of the Bank and in accordance with the purposes and objectives of the Bank and act as a leader in the management. 2. Maintain and manage the asset of the Bank. 3. The BoD are fully responsible for carrying out their duties for the Bank’s interest in reaching its goals and objectives. 4. In performing duties and responsibilities of management function, the BoD must organize Annual General Meeting of Shareholders (“GMS”) and other GMS as stipulated in the prevailing law and regulations as well as Article of Association of the Bank. 5. Each member of the BoD shall carry out their duties and responsibilities in good faith, full of responsibility and prudence and with due regard to the law regulations and the Articles of Association of the Bank. 6. The members of BoD are prohibited from granting general authority to other parties resulting in the transfer of duties and functions of the BoD. Granting general authority means granting authority to one or more employees or another person resulting in the transfer of duties, authorities and responsibilities of the BoD in entirety, namely without limitation of scope and time.


13. Members of the Board of Directors must improve competencies through education and training continuously, be familiar with banking regulations and have general knowledge, especially on economic. Scope and Description of Duties and Responsibilities of Each Member of BoD In regard to the Bank’s management, spesifically, each member of BoD has their own scope of duties and authorities in line with their respective positions, as follows: President Director 1. Coordinate the implementation of the management of the Bank and together with BoD establish the Company’s strategic plan. 2. Leading the business network development for the benefit of the Bank. 3. Coordinate, direct and supervise each Directorate in the Bank continually in order to operate smoothly, effectively, efficiently and keep on track to the Bank’s long term strategies. 4. Direct the business performance of the Bank and maximizing revenue in accordance with short-term and long-term targets of the Bank. 5. Promote the Bank’s image and to participate in building good relations with customers, monetary authorities and other stakeholders. 6. Direct the contribution from each Directorate to the competitiveness and achievement of the Bank’s business profits through effective planning and control over the management of the Company’s resources as well as control over the performance of achievement and risk.

208


7. Supervise the BoD and Divisions under his/her responsibility directly, in accordance with Bank’s organization structure. 8. Lead and direct the human resources empowerment policy to be in line with the Bank’s strategies and in order to achieve the Bank’s goal. Business Director 1. Lead and direct the development and implementation of policies and strategies in business area, in line with the Bank’s goals and strategies. 2. Support the President Director to build business network for the benefit of the Bank. 3. Lead, direct and coordinate the development products and service launched by the Bank to ensure achievement of growth, profitability and competitive products. 4. Ensure the fulfillment of customer-oriented approach and strategic relationship approach. 5. Contribute to the competitiveness and achievement of the Bank’s business profits through effective planning and control over the management of the resources under Business Directorate as well as control over the performance achievement and risk. 6. Supervise directly the Directorates and Divisions under his/her responsibility, in accordance with Bank’s organization structure. 7. Perform other duties assigned by the President Director.

Risk Director 1. Lead and direct the development and implementation of policies and strategies in risk management for all risk categories including credit review, to be in line with the Bank’s goals and strategies. 2. Responsible for ensuring the credit review process operates independently and implement prudence principles. 3. Responsible for asset quality monitoring and credit portfolio oversight. 4. Facilitate, coordinate, and advise on the identification, analysis, measurement, and mitigation of all risks on a sustainable basis. 5. Contribute to the competitiveness and achievement of the Bank’s business profits through effective planning and control over the management of the resources under Risk Directorate as well as control over the performance achievement and risk. 6. Supervise the Divisions under his/her responsibility directly, in accordance with Bank’s organization structure. 7. Perform other duties assigned by the President Director. Operations Director 1. Lead and direct the development and implementation of policies and strategies in the areas of operations, information technology, internal control and general services, in line with the Bank’s objectives and strategy. 2. Responsible for leading and managing systems and processing units in order to provide cost efficiency, centralized technology and operations support, and

E-Banking & Financial Inclusion Director 1. Lead and direct the development and implementation of policies and strategies in E-Banking & Financial Inclusion (including cash management business) businesses, in line with the Bank’s goals and strategies. PT Bank QNB Indonesia Tbk

209


Compliance Director 1. Lead and direct the development and implementation of policies and strategies in compliance, legal and corporate secretary areas, in line with the Bank’s goals and strategies.


7.


6.

Company Profile

5.

Human Resources Director 1. Lead and direct the development and implementation of policies and strategies in human resources area, in line with the Bank’s goals and strategies. 2. Responsible to manage the empowerment of human resources, such as ensuring the growing of performance driven culture and maintaining harmonious relationship within the Bank. 3. Ensure the Bank’s ability to attract, develop, motivate, and maintain the human resource needed by the Bank to achieve its vision. 4. Coordinate and ensure the implementation of good industrial relationship. 5. Ensure that human resource management operations run in accordance with the prevailing legislation. 6. Contribute to the competitiveness and achievement of the Bank’s business profits through effective planning and control over the management of the resources under Human Resources Directorate as well as control over the performance achievement and risk. 7. Supervise Divisions under his/ her responsibility directly, in accordance with Bank’s organization structure. 8. Perform other duties assigned by the President Director.

Management Report

4.

2. Formulate strategies to encourage compliance culture, establish compliance systems and procedures that will be used to develop the Bank’s internal policies and guidelines. 3. Ensure that all policies, internal rules, systems, and procedures as well as the Bank’s business activities are conducted in accordance with the prevailing law and regulations to minimize the Bank’s Compliance Risk. 4. Coordinate, direct and implement the principles of good corporate governance. 5. Ensure that the fulfillment of reporting has been conducted as stipulated by regulators. 6. Ensure the fulfillment of action plans and commitments of the Bank to regulators. 7. Coordinate, direct and monitor the handling of complex bankwide legal matters through legal advice. 8. Coordinate, direct and monitor the implementation process of corporate action done by the Bank 9. Contribute to the competitiveness and achievement of the Bank’s business profits through effective planning and control over the management of the resources under Compliance Directorate as well as control over the performance achievement and risk. 10. Supervise the Divisions under his/her responsibility directly, in accordance with Bank’s organization structure. 11. Perform other duties assigned by the President Director, as long as it does not contradict with the function of Compliance Director set by the regulator.

2016 Performance

3.

to ensure that the support meets the latest business requirements and that the maximum contribution has been given to meet the strategic and business objectives. Improve the standard and process of operational activities by sponsoring the transformational adoption of the standard core process to delivering the best result in terms of end-to-end performance, cost management, and customer service. Sharing the best practices in each field by providing expertise and advice in order to achieve efficiency, scale of economy, and quality. Coordinate and direct the development of the Bank’s services strategy, communication consolidation, and programs to enhance customer service quality. Contribute to the competitiveness and achievement of the Bank’s business profits through effective planning and control over the management of the resources under Operations Directorate as well as control over performance achievement and risk. Supervise the Divisions under his/her responsibility directly, in accordance with Bank’s organization structure. Perform other duties assigned by the President Director.


2. Lead, direct and coordinate the development products and service launched by the Bank to ensure achievement of growth, profitability and competitive products in E-Banking & Financial Inclusion (including cash management business) segment. 3. Ensure the fulfillment of customer-oriented approach and strategic relationship approach especially in E-Banking & Financial Inclusion (including cash management business) segment. 4. Contribute to the competitiveness and achievement of the Bank’s business profits mainly in E-Banking & Financial Inclusion (including cash management business) segment through effective planning and control over the management of the resources under E-Banking & Financial Inclusion Directorate as well as control over the performance achievement and risk. 5. Supervise directly the Directorates and Divisions under his/her responsibility, in accordance with Bank’s organization structure. 6. Perform other duties assigned by the President Director and/ or Business Director. Wholesale Banking Director 1. Lead and direct the development and implementation of policies and strategies in Wholesale Banking area, in line with the Bank’s goals and strategies. 2. Lead, direct and coordinate the development products and service launched by the Bank to ensure achievement of growth, profitability and competitive products in Wholesale Banking segment.

210


3. Ensure the fulfillment of customer-oriented approach and strategic relationship approach especially in Wholesale Banking segment. 4. Contribute to the competitiveness and achievement of the Bank’s business profits mainly in Wholesale Banking segment through effective planning and control over the management of the resources under Wholesale Banking Directorate as well as control over the performance achievement and risk. 5. Supervise directly the Directorates and Divisions under his/her responsibility, in accordance with Bank’s organization structure. 6. Perform other duties assigned by the President Director and/ or Business Director. Retail Banking Director 1. To lead and direct the development and implementation of policies and strategies in Retail Banking area, in line with the Bank’s goals and strategies. 2. To lead, direct and cordinate the development products and service launched by the Bank to ensure achievement of growth, profitability, and competitive product in Retail Banking segment. 3. Ensuring the fulfilment of customer-oriented approach and strategic relationship approach especially in Retail Banking segment. 4. Contributing to the competitiveness and achievement of the Bank’s business profits mainly in Retail Banking segment through effective planning and control over the management of resources under Retail

Banking Directorate and also control over the performance achivement and risk. 5. Supervising directly the division under his/her responsibility, in accordance with the Bank’s organization stucture. 6. Perform others duties assigned by the President Director and/ or Business Director.

Board of Directors’ Charter In order to ensure the effectiveness of the implementation of its role and functions, the Board of Directors has formulated the Board of Directors Manual which established in the Board of Directors Charter No. 01.07.00 dated July 30, 2015. The Charter contains accountability; structure and membership; criteria and independence; term of office; duties and responsibilites; authorities; work ethics; work value; Board of Directors meeting; as well as reporting and responsibility of the Board of Directors. This Board of Directors Manual is established by referring to the prevailing regulations as well as best practices and being reviewed regularly. Work Ethics of the Board of Directors As stipulated in the Board of Directors Charter, all members of the Board of Directors: 1. shall comply with the code of conduct of the Bank and all provisions set by the Bank including the Bank’s Articles of Association and its amendments in the future; 2. are prohibited to make use of the Bank for personal, familial and/or other party’s interest, which can harm or reduce the Bank’s profit; 3. are prohibted to take and/ or receive personal benefit from the Bank, other than

Type

Program

Place

January 21, 2016

External

Jakarta

July 30, 2016 September 15, 2016

External Internal

September 28, 2016

External

September 29, 2016

External

Effective Public Speaking & Media Handling-BoD QNB Values Festival Professionalism with Integrity for Leaders Refreshment of Risk Management Certifications for BoD Executive Coaching for BoD

January 6, 2016 – May 18, 2016 January 21, 2016

External

Bahasa Indonesia

Jakarta

External

Jakarta

March 16, 2016 May 30, 2016 May 31, 2016

Internal Internal Internal

Effective Public Speaking & Media Handling-BoD Leaders Talk Leaders Talk Sharring Session : Awareness on New Accounting Standard on Financial Instrument /


Jakarta Jakarta


Director

Date

Training and Competence Development Program The Board of Directors also took part in training programs to enhance their knowledge on the latest developments in the banking industry and other knowledge related to the implementation of the duties and responsibilties of the Board of Directors. The training programs provided to the Board of Directors in 2016 included:




Throughout 2016, the Board of Directors have fulfilled their duties and responsibilities for the interest of the Bank in accordance to its purposes and objectives. Among others, the Board of Directors have made strategic decisions and taken necessary actions in the following matter: 1. Formulate the Bank’s Business Plan for 2016-2018. 2. Formulate Bank’s strategic map. 3. Formulate strategic policies in human resources management.



Position

Duties Implementation of Board of Directors

Board of Directors Orientation Program In the Extraordinary GMS held on November 18, 2016, R. Andi Kartiko Utomo was appointed as Director of the Bank. The Bank conducted orientation program by sharing Annual Report, Quarterly Financial Report, Bank’s Business Plan and Board of Directors Manual as well as risk management trainings and discussion with Board of Directors as a reference and overview of the Bank’s business activities to support the implementation of his function as a Director.

Company Profile

Name

In addition, the Board of Directors is obliged to disclose Bank’s strategic policies in human resouces to the Bank’s employees.

4. Formulate strategic policies in funding and lending.

Management Report

Transparency of the Board of Directors The Board of Directors Charter also regulates transparency aspect, in which all of the members of the Board of Directors must disclose the following matters in the Bank’s Implementation of Good Corporate Governance Report: 1. His/her share ownerships which reached a total of 5% of the paid-up capital or more, both in the Bank and other Banks or companies, domiciled in Indonesia or overseas.

2. Financial and familial relation with members of the Board of Commissioners, other member of the Board of Directors and/or Bank’s controlling shareholders. 3. Other remuneration and facilities package provided by the Bank. 4. His/her positions at other companies

2016 Performance

remuneration and other facilities established in GMS; 4. in the event of any incident/ action which has the possibility adverse impact the Bank’s operational, financial and/or reputation, the members of the Board of Directors must escalate it to all other members of Board of Directors; 5. must not directly or indirectly, make false statement concerning material fact or conceal material fact which would make a statement concerning Bank’s condition at the time of the statement, misleading.

Jakarta Jakarta

Jakarta Jakarta Jakarta

211


Name

Position


Director

Novi Mayasari

212

Director


Date

Type

Program

September 15, 2016

Internal

September 28, 2016

External

September 29, 2016

External

Impairment (IFRS 9) Professionalism with Integrity for Leaders Refreshment of Risk Management Certificate for BoD Executive Coaching for BoD

March 16, 2016 April 21, 2016 May 31, 2016

Internal External Internal


External External

September 29, 2016 October 13, 2016

External External

January 21, 2016

External

February 29, 2016

External

March 16, 2016 April 21-22, 2016

Internal External

May 14-21, 2016 May 19, 2016

External External

May 26, 2016

External

May 30, 2016 May 31, 2016

Internal Internal

June 1, 2016

External


External External

15 September, 2016

Internal

September 22, 2016 September 29, 2016 October 13, 2016

External External External

November 8, 2016

External

Place


Leaders Talk Compliance Sertifications Sharring Session : Awareness on New Accounting Standard on Financial Instrument / Impairment (IFRS 9) QNB Values Festival Refreshment of Risk Management Certifications for BoD Executive Coaching for BoD Indonesia Banking Human Capital Conference


Effective Public Speaking & Media Handling-BoD Seminar – Bank Competitive Strategies in the Middle of Turbulence (LPPI) Leaders Talk Preparation for Risk Management Certifications, Level-5 Basic Trade Finance Refreshment on Risk Management Certifications, Level-5 2016 Indonesian Mercer Pension Action (IMPACT) Workshop Mengupas Peraturan Baru yang Mempengaruhi Strategi HR Leaders Talk Sharring Session : Awareness on New Accounting Standard on Financial Instrument / Impairment (IFRS 9) Implementation of the Specific Time Employment and Oursourcing QNB Values Festival Debtors Information System (SID) Reporting Workshop in order of SID Quality Control in 2016 Professionalism with Integrity for Leaders Investigative Inteview Executive Coaching for BOD Indonesia Banking Human Capital Conference 3rd Indonesia Industrial Relations Conference

Jakarta

Jakarta Jakarta Jakarta Jakarta

Jakarta

Jakarta Jakarta Jakarta Jakarta Jakarta

Jakarta Jakarta

Jakarta

Jakarta Jakarta

Jakarta Jakarta Jakarta Jakarta Surabaya


Director

Director

Date

Type

Program

Place

Januari 21, 2016

External

Jakarta

February 10, 2016 March 16, 2016 April 21-22, 2016


May 19, 2016

External


External Internal

September 22, 2016 October 20, 2016

External External

Preparation for Risk Management Certifications, Level-4 Managing Team Leaders Talk Preparation for Risk Management Certifications, Level-5 Refreshment on Risk Management Certifications, Level-5 QNB Values Festival Professionalism with Integrity for Leaders Executive Coaching for BOD The 1st Manager - Leader Summit

Januari 7, 2016 February 11, 2016 February 23, 2016



April 28, 2016 July 21, 2016 September 8, 2016


September 17, 2016

External

November 8, 2016 November 23, 2016

External External

Media Handling Training Syariah Executive Program Leadership Series with Dr.Boen Certification Refreshment Risk Management Comba Clinic Personal Branding & Effective Communication Skills Team Building - Commercial Banking Jakarta Training IRB & RAROC Indonesia Palm Oil Conference


Management Report


Company Profile


Position

2016 Performance

Name


*) Appointed as a Director of the Bank based on resolution of the Bank’s EGM dated April 13, 2016 which shall be effective upon obtaining approval from the Financial Services Authority (OJK) on fit and proper test. **) Appointed as a Director of the Bank based on resolution of the Bank’s EGM dated December 19, 2016 which shall be effective on February 16, 2017 and upon obtaining approval from the Financial Services Authority (OJK) on fit and proper test.

The assessment of the Board of Directors is also supported by the recommendations from the Remuneration and Nomination Committee. The recommendations serve as the second opinion related to the assessment criteria on remuneration for members of the Board of Directors, both individually and collectively. The Board of Commissioners accounts for its assessment result as a consideration in the GMS which will then be decided by all shareholders.

Policy concerning the Succession of the Board of Directors The Board of Directors succession is determined by GMS. In selecting and appointing new Director, GMS also takes account of the recommendation on candidate members proposed by the Remuneration and Nomination Committees in accordance with the Articles of Association and provisions set forth by the shareholders. In addition, the Bank has also currently developed internal talent & succession management program.


213


The performance evaluation of the Board of Directors is conducted through self-assessment which is then reviewed by the Board of Commissioners. In general, the basic foundation of the Board of Directors’ assessment is the performance of the Board of Directors in implementing the vision and mission of the Bank in the current year as well as the implementation of GCG. Moreover, the Board of Commissioners monitors the Board of Directors regarding the achievement of targets set by the Bank, especially

the implementation of the Bank’s Long-Term Plan, the Bank’s Business Plan and Budget, as well as the resolutions of GMS.


Evaluation of the Board of Directors Performance


Jakarta Jakarta


Policy and Procedure of Board of Directors Remuneration System

Board of Directors Remuneration Procedure Board of Directors Remuneration procedure consists of several phases which include formulation, analysis, proposal, and establishment.

Board of Directors Remuneration Policy In accordance with the Bank’s Articles of Association, salary or honorarium and other allowances for the Board Directors are established by the GMS. In general, the Bank determines remuneration package by referring to the Bank’s internal policies, prevailing laws and regulations, industry comparison, and with taking into account the Bank’s performance in current year. The amount of remuneration for the Board of Directors’ members is set based on their performance.

The formulation of remuneration policy and proposal is carried out by the Remuneration and Nomination Committee by gathering information about remuneration standard for the position and the similar industry in the market and taking into account the Bank’s performance as well as the assessment results of the Board of Directors and inflation growth rate. In the Annual GMS held on February 16, 2016 approved the granting authority to Qatar National Bank, as the majority

shareholders of the Bank to determine the 2016 salary or honorarium and other allowances for each member of the Board of Directors. The determination of salary or honorarium and other allowances for each member of the Board of Directors by considering the recommendation from Remuneration and Nomination Committee of the Bank. The Board of Directors’ remuneration package comprised of: 1. Gross remuneration (salary, allowances, bonus/tantiem and other facilities in nonnatura form); and 2. Other facilities (health insurance and others). The Board of Directors’ remuneration structure and amount in 2016 are as follows: Amount Received in a Year

Position Board of Directors

Type of Remuneration

Number of People

Million of Rupiah

Remuneration (Gross salary, bonuses, routine allowances, and other facilities in the form of non-in kind)

6*

29,944

Other Facilities in the form of in kind (housing, transportation, health insurance, and others) a. may be owned b. may not be owned

6*

93

6*

30,037

Total

*) 2 Directors resigned in February 17 and 28 consecutively Total Remuneration per Person in 1 (one) year*)

Total Board of Directors

Above Rp2 billion

5

Above Rp1 billion–Rp2 billion

1

Above Rp500 million–Rp1 billion

-

Rp500 million and below

-

*) received in cash

214


6.

8.

10.

215





9.

Company Profile

7.

11. President Director presides over the Board of Directors Meeting. In case the President Director was not present or not able to attend the Board of Directors meeting, which does not have to be proven to the third party, therefore the Deputy President Director shall preside over the Board of Directors meeting. In case the Deputy President Director were not present or not able to attend the Board of Directors Meeting, that does not have to be proven to the third party, therefore one of the members of the Board of Directors, that were present and nominated in the Meeting, shall preside over the Board of Directors meeting. 12. A member of the Board of Directors that unable to attend the Board of Directors meeting, may nominate other member of Board of Directors to represent him in the Board of Directors meeting based on proxy. However, he/she must inform the Corporate Secretary prior to the Board of Directors meeting. 13. The Board of Directors Meeting is valid and authorized to make binding decision if more than 1/2 (one half) of the total members of the Board of Directors were present in the Meeting. 14. The attendance of Board of Directors members in the meeting must be disclosed in the Bank’s Annual Report. 15. Decisions of the Board of Directors meeting should be based on deliberation to reach agreement. If decision could not be reached through deliberation, decision will be

Management Report

In accordance with Bank’s Articles of Association and other prevailing regulations, meetings of the Board of Directors are held regularly with the provision and procedure as follows: 1. Board of Directors meeting is to be held at least once a month, unless deemed necessary by one of the members of the Board of Directors, or through written request from one or more of the members of the Board of Commissioners, or through written request from one or more of the shareholders representing 1/10 (one tenth) of the total shares issued by the Bank with valid voting right. 2. The Board of Directors must prepare the next year BoC meeting schedule before the end of the fiscal year. 3. The Board of Directors sets strategic policies and decisions through the mechanism of Board of Directors meeting. 4. The call of Board of Directors meeting is carried out by members of the BoD authorized to represent the Bank’s Board of Directors. 5. The call for the meeting of Board of Directors shall be delivered in written or submitted directly with proper receipt or by way of Registered mail or courier, telex or facsimile or any other communication tools. The invitation should be delivered to members of Board of Directors no less than 5 (five) calendar days before the Board of Directors meeting or in a shorter period of time in urgency no later than one (1) calendar day in advance.

Urgent circumstances established by the President Director or a majority of members of Board of Directors. Meeting call in advance is not required if all members of the Board of Directors are present and/or represented in the Board of Directors meeting or if the Board of Directors meeting has been scheduled based on the decision of the previous Board of Directors Meeting which attended or represented by majority of members of the Board of Directors. The Board of Directors meeting’ call shall contain the agenda, date, time and venue of the meeting At the scheduled Board of Directors meeting, the meeting material should be distributed to the participants of the meeting no later than five (5) days before the meeting. In the event there’s an unscheduled Board of Directors meeting, the material of the meeting should be distributed to the participants before the meeting is held, at the latest. The Board of Directors meeting is convened in the office of the Bank or office where the Bank conducts its main business or in the capital of province where the Bank conducts its main business or in the province of Stock Exchange domicile where Bank shares is listed, as long as within the territory of Republic of Indonesia. In the event that all members of the Board of Directors present and/or represented, the Board of Directors meeting may be held anywhere within the territory of Republic of Indonesia and has the right to make valid and binding decisions

2016 Performance

Meetings of the Board of Directors


16.

17.

18.

19.

20.

216

made through voting based on supporting votes of more than 1/2 (one half) of the total valid votes from Board of Directors collected in the Meeting. If the opposing and supporting votes were the same, the Chairman of the Board of Directors Meeting shall decide. Every member of the Board of Directors present in the meeting has the right to 1 (one) vote and additional 1 (one) vote for other member of Board of Directors represented by him/her. Any member of the Board of Directors, who has, either directly or indirectly, conflict of interest in a transaction, contract, or proposed contract, shall declare the nature of the interest in the Board of Directors Meeting and shall not have the right to participate in voting concerning matters related to the transaction or contract, unless declared otherwise by the Board of Directors meeting. Voting concerning a particular person or staff shall be carried out with closed ballots without signature. Voting for other matters shall be carried out verbally, unless decided otherwise by the Chairman of the meeting without any objection from other present members. Proceeds of the Board of Directors meeting is required to be summarized into minutes of the meeting, to be signed by all members of Board of Directors present and well documented.


21. In the event of a member of the Board of Directors did not sign the results of the meeting, the respective Board of Directors member shall specify the reasons in writing in a separate letter attached to the minutes of meetings. 22. Dissenting opinions in the Board of Directors meeting is required to be stated clearly in the minutes of the meeting, along with the reason of the dissenting opinions 23. All decisions set out in the Board of Directors meeting, which was decided in accordance with the applicable provisions of the Bank, binding and become the responsibility of the Board of Directors. 24. All the decisions that have been established in the Board of Directors meeting, which decided in accordance with the applicable Bank’s provisions, binding and being the responsibility of the Board of Directors. 25. The Board of Directors can also make valid and binding decisions without organizing Board of Directors Meeting, provided that all members of the Board of Directors have been notified in writing concerning related proposals, and all the members of the Board of Directors have given their approval concerning the written proposal and signed the approval. Decisions made in this procedure have similar authority as decision legitimately made in the Board of Directors meeting

26. Board of Directors meeting may also be conducted through teleconference, video conference or other electronic tools where all Board of Directors meeting participant can see and/or hear each other and participate in the Board of Directors Meeting. Such meeting should be organized according to the prevailing regulations and the minutes of meeting should be prepared and circulated to all Board of Directors members who attended the meeting for signing. Decisions made in this procedure have similar authority as decision legitimately made in the Board of Directors Meeting In 2016, the Board of Directors have held 19 (nineteen) meetings with the agendas, including: 1. Discussion on 2016-2018 Business Plan of the Bank. 2. 2016 Rating Agency. 3. Strategic Map Update. 4. Discussion on Organizational Changes. 5. Business and Financial Performance Update and Review 6. Bankwide Performance Update and Review 7. Positioning and Brand Perception Update 8. Credit Approval Process 9. Plans of General Meeting of Shareholders Implementation 10. Foreclosed Assets and Assets Transfer 11. Compensation 12. Operational Update 13. Update on Assets Quality 14. Office Plan Strategy

Frequency of Meetings of Board of Directors and Attendance Record In 2016, the Board of Directors have conducted 19 (nineteen) meetings. The following table shows the attendance frequency of each Director in the meetings.

Management Report

22. Update on peer banks performance 23. Proposed new initiatives & projects 24. Escalation and Declaration System 25. Record Management Improvement Project 26. Follow up to Improve Bank’s Performance

2016 Performance

15. Revision of 2016 Bank’s Business Plan 16. Segregation Duties of BoD 17. Follow up audit findings 18. Follow up FSA/OJK findings and recommendations 19. Update on new regulator regulations 20. Bank’s rating 21. Risk Based Bank Rating Result

Board of Directors Meetings and Attendance Level Name

Position

Physical Attendance

% Attendance

President Director

3

16%

Azhar bin Abdul Wahab**

Acting President Director

19

100%


Director

19

100%

3

16%

Rusli*** Independent Director

19

100%

Novi Mayasari

Director

18

95%

R. Andi Kartiko Utomo****

Invitee

13

68%

Junita Wangsadinata*****

NIL

NIL

NIL



Company Profile



*) Effectively resigned as the Bank’s President Director as of February 28, 2016. **) Appointed as the Bank’s Acting President Director based on the Circular Resolution of BoD of the Bank No. 005/SK-Dir/I/2016 dated January 22, 2016 and the appointment was effective on February 28, 2016. ***) Effectively resigned as the Bank’s Director as of February 16, 2016. ****) Appointed as a Director of the Bank based on resolution of the Bank’s EGM dated April 13, 2016 which shall be effective upon obtaining approval from the Financial Services Authority (OJK) on fit and proper test. *****) Appointed as a Director of the Bank based on resolution of the Bank’s EGM dated December 19, 2016 which shall be effective on February 16, 2017 and upon obtaining approval from the Financial Services Authority (OJK) on fit and proper test.



217


Commitees Under the Board of Directors The Board of Directors is assisted by 9 (nine) Committees which have task to provide advice and recommendations to the Board of Directors, to support the effectiveness of the implementation of duties and responsibilities of the Board of Directors.

5. New Products and Activities Commitee 6. Information Technology Committee 7. Human Resources Committee 8. Fraud Oversight Committee 9. Special Asset Management Committee

Members of these Committees are appointed by the Board of Directors in accordance with the size and complexity of the Bank’s business as well as prevailing regulations. As of December 31, 2016, the committees under the Bank’s Board of Directors are: 1. Asset & Liability Committee (ALCO) 2. Credit Committee 3. Risk Management Committee 4. Procurement Committee

Asset and Liability Committee Asset and Liability Committee (ALCO) was established by Board of Directors to assist the Board of Directors in managing assets and liabilities in integrated manner, establish balance sheet structure and capital, and provide recommendations to the Board of Directors to determine policies established in ALCO meetings.

As of December 31, 2016, the ALCO Committee have conducted 10 (ten) meetings. The following table shows the attendance frequency of each member of ALCO Committee in the meetings.

Meeting Attendance (10 meetings)

% Attendance

Azhar bin Abdul Wahab (Acting President Director)

8

80%

Alternate Chairman and Member

Lloyd William Rolston (Risk Director)

9

90%

Secretary and Member

Tomi Parisianto Wibowo (Head of Finance & Accounting)

2

20%

Member

Agus Meliala (Head of Wholesale Banking)*

2

20%

Member

R. Andi Kartiko Utomo (Head of E-Banking & Financial Inclusion)

6

60%

Member

Novy Angela Andow (Head of Treasury)

9

90%

Member

Rundi Perkasa (Market & Liquidity Risk Head)

9

90%

Position

Name

Chairman and Member

* Officially resigned since June 30, 2016

218

Structure, Composition, and Meeting Attendance of Asset and Liability Committee The selection of members of ALCO Committee have taken into consideration of competences, independency, discretion, and code of conduct, as well as respective duties and responsibilities implementation in accordance with applicable regulations.


Duties Implementation of Asset and Liability Committee In 2016, ALCO Committee conducted meetings which cover agenda, including: 1. Monitored the Company’s current assets 2. Monitored, reviewed, and managed the Bank’s Assets & Liabilities strategies, and policies for 2016

Structure, Composition, and Meeting Attendance of Credit Committee The selection of members of Credit Committee have taken into consideration of competences, independency, discretion, and code of conduct, as well as respective duties and responsibilities implementation in accordance with applicable regulations.

Credit Committee was established by Board of Directors to assist the Board of Directors in formulating credit policies and provide decision with respect to credit proposal in accordance with the limit authority.

% Attendance

Azhar Abdul Wahab (Acting President Director)

97

97



96

96

Member

Ervin Gumilar (Head of SME Credit Review)

21

21

Member and Secretary

Wendriani Lukito (Head of Commercial Credit)

91

91

Name

Chairman and Member





Position


As of December 31, 2016, the Credit Committee have conducted 100 (one hundred) meetings. The following table shows the attendance frequency of each member of Credit Committee in the meetings.

Company Profile

Credit Committee

Management Report

2. Develop, monitor, review and manage the Bank’s Assets & Liabilities Strategies, and policies relating to interest rate risk, currency risk and liquidity risk. 3. Determine transfer pricing for the best reflection of the different business units.

2016 Performance

Duties and Responsibilities of Asset and Liability Committee According to the Decree of Directors No. 032/SK-Dir/VI/2016 regarding the Establishment of Asset & Liability Committee (ALCO) of PT Bank QNB Indonesia Tbk, the duties and responsibilities of ALCO Committee, including: 1. Monitor current assets including, among others: a. Liquidity reserves sufficiency in Bank Indonesia b. The ability to raise funds from interbank money market c. The Bank’s funding structure d. The maturity of assets and liabilities e. The interest rates and market trends f. Adequacy of funding in the future and macroeconomic conditions

219


Duties and Responsibilities of Credit Committee According to the Decree of Directors No. 040/SKDireksi/X/2016 regarding the Establishment of Credit Committee of PT Bank QNB Indonesia Tbk, the duties and responsibilities of Credit Committee, including: 1. Provide approval or rejection on credit proposal in accordance with the limits of authority/type of credit established by the Board of Directors and reviewing credit applications that exceed established limits. 2. To coordinate with ALCO Committee in the aspect of credit financing. 3. Monitoring the implementation of the credit policy. 4. Acting as an advisor for related party credit matters. 5. Develop lending policies and submit to the Policy Sub Committee to be approved.

6. Evaluate/assess the performance of business unit and credit review unit. Duties Implementation of Credit Committee In 2016, Credit Committee has fulfilled its duties with the following details: 1. Review and approved credit proposals in accordance to the limit set. 2. Evaluated the performance of the working units that responsible on credit proposals and credit review.

Risk Management Committee Risk Management Committee was established by Decree of Directors No. 022/SK-Direksi/V/2016 regarding the Establishment of Risk Management Committee of PT Bank QNB Indonesia Tbk to provide recommendations to the Board of Directors

Position

1) 2)

Name

Structure, Composition, and Meeting Attendance of Risk Management Committee The selection of members of Risk Management Committee have taken into consideration of competences, independency, discretion, and code of conduct, as well as respective duties and responsibilities implementation in accordance with applicable regulations. As of December 31, 2016, the Risk Management Committee have conducted 5 (five) meetings. The following table shows the attendance frequency of each member of Risk Management Committee in the meetings. Meeting Attendance (5 meetings)

% Attendance

Chairman and Member


5/5

100%



4/5

80%


Caroline Halim

5/5

100%

Non-Voting Member


3/5

60%

Member

Novi Mayasari1

4/4

100%

Member

R. Andi Kartiko Utomo1

2/4

50%

Member

Rasmoro P. Aji

5/5

100%

Member

Cut Tashana Azia2

2/2

100%

Member

Monica Riesanty3

2/2

100%

Member

Wendriani Lukito4

3/4

75%

Appointed as member on February 2016 Joined the Bank on August 2016

220

concerning risk management including the formulation of policies, enhancements of policy implementation, evaluation of risk profile condition and progress, and other recommendations for improvements.


3) 4)

Temporary member since August 2016 Reinstated as temporary member on August 2016

Structure, Composition, and Meeting Attendance of Procurement Committee The selection of members of Procurement Committee have taken into consideration of competences, independency, discretion, and code of conduct, as well as respective duties and responsibilities implementation in accordance with applicable regulations.


In 2016, the meetings of Procurement Committee was conducted circularly. The following table shows composition of membership of Procurement Committee.


Name

Duties Implementation of Risk Management Committee In 2016, Risk Management Committee has conducted meetings which cover agenda, including: 1. Risk Based Bank Rating review 2. Risk Appetite Statement review 3. Top Risk review 4. Fraud Strategy 5. Industry Sector Limit & USD Loan Portfolio Review 6. Market & Liquidity Risk Limit review 7. Summary of OJK and Internal Audit Findings 8. Risk Dashboard 9. Peer Bank Analysis 10. Penetration Test Analysis

Procurement Committee was established by Board of Directors with last amendement by the Board of Directors Decree No. 031/SKDir/VI/2016 on the Establishment of PT Bank QNB Indonesia Tbk’s Procurement Committee to provide inputs to the Board of Directors on the goods and services procurement policies and provide approval for goods and services procurement.

Company Profile

Committee Position

In addition, under the Risk Management Committee, there is Sub Committee Policy which has functions and responsibilities to conducts review and delivers the policies and procedures related to the Bank’s activities and operations.

Procurement Committee

Management Report

9. Determine rules and/or business decisions that deviate from normal procedures (irregularities). 10. Determine other matters related to the Bank’s risk management activities.

2016 Performance

Duties and Responsibilities of Risk Management Committee According to the Decree of Directors No. 022/SKDireksi/V/2016 regarding the Establishment of Risk Management Committee of PT Bank QNB Indonesia Tbk, the duties and responsibilities of Risk Management Committee, including: 1. Establish risk management frameworks and governance. 2. Set the risk management direction, strategies and programs. 3. Perform evaluation on risk profiles and capital adequacy analysis. 4. Establish policies and enhance risk management processes regularly. 5. Establish risk measurement methodologies. 6. Monitoring loan & portfolio diversification (business segment/industry sector/ debtor) and determine credit risk indicator profile as well as credit risk measurement methodology. 7. Establish contingency plan. 8. Establish the adequacy of provision.

Position


President Director


Novi Mayasari



Denny Soemardhono

Head of General Service

Member

R. Andi Kartiko Utomo

E-Banking & Financial Inclusion Director

Member

Tomi Parisianto Wibowo

Head of Finance & Accounting

Member

Tota Loembantobing

Head of Operations

Member

Lina

Head of Corporate Secretary

Member

Slamet Riyadi

Head of IT & Digital Banking



Chairman and Member

221


Duties and Responsibilities of Procurement Committee The duties and responsibilities of Procurement Committee, including: 1. Evaluate and approve the proposed Capital Expenditurel/ Operational Expenditure either budgeted or unbudgeted in the Bank’s Business Plan, in accordance with the predetermined limit. 2. Formulate guidelines and policies for procurement of goods/services. 3. Establish priority and allocation of budget for procurements of goods/ services in accordance with the decision of the Board of Directors. 4. Ensuring that the procurement of goods and services is done in accordance with the principles of procurement, namely: efficient, effective, transparent, fair, and accountable. 5. Ensure that the procurement of goods and services carried out in accordance with ethics in procurement.

Committee Position

222

6. Procurement Committee may prepare an Estimates Price Reference (Owner’s Estimate) on third parties product and services. 7. Procurement Committee may prepare the Vendor List of the Bank. 8. Ensuring that the procurement plans is in line with the strategic objectives of the Bank. 9. Conduct other duties as deemed necessary by the Board of Directors. Duties Implementation of Procurement Committee In 2016, Procurement Committee has approved the procurement made by the Bank and reviewed the realization of total purchased against budget.

Products and New Activitiy Committee New Products and Activities Committee was established by Board of Directors with last amendement by the Board of

Directors’ Decree No. 30/SK-Dir/ VI/2016 on the Establishment of New Products and Activities Committee of PT Bank QNB Indonesia Tbk to provide recommendations to the Board of Directors regarding the development of new product and services as well as evaluation and enhancement of existing products, services and activities of the Bank. Structure, Composition, and Meeting Attendance of New Products and Activities Committee The selection of members of New Products and Activities Committee have taken into consideration of competences, independency, discretion, and code of conduct, as well as respective duties and responsibilities implementation in accordance with applicable regulations. In 2016, the meeting of Procurement Committee was conducted circularly. The following table shows composition of membership of Procurement Committee.

Name

Chairman and Member





Joyce Puspa Chandrayani (Head of Product Development)

Member

R. Andi Kartiko Utomo (E—Banking & Financial Inclusion Director)

Member

Tomi Parisianto Wibowo (Head of Finance & Accounting)

Member

Tota Loembantobing (Head of Operations)

Member

Rasmoro P Aji (Head of Network & Distribution)


Structure, Composition, and Meeting Attendance of Information Technology Committee The selection of members of Information Technology Committee have taken into consideration of competences, independency, discretion, and code of conduct, as well as respective duties and responsibilities implementation in accordance with applicable regulations.


Information Technology Committee Information Technology Committee was established by Board of Directors with last amendment by Policy and Regulation No. 2/04/002.00/II/2014 to assist the Board of Directors by providing directives and recommendations on IT strategies, development, and implementation.

Name


% Attendance


2

100%

Member (Alternate Chairman)

Slamet Riyadi

1

50%

Member (Secretary)

Darwinsyah

2

100%

Member


2

100%

Member

Tota Loembatobing

2

100%

Member

Tomi Parisianto Wibowo

2

100%

Member

R. Andi Kartiko Kusumo

1

50%

Member

Rasmoro Pramono Aji

1

50%



Chairman and also member


Position

Company Profile

As of December 31 2016, the Information Technology Committee have conducted 2 (two) meetings. The following table shows the attendance frequency of each member of Information Technology Committee in the meetings.

Management Report

Duties Implementation of New Products and Activities Committee During 2016, New Products and Activities Committee has agreed to the following decisions: 1. All the Bank’s products should be documented in written

form. These products cover all products owned by the bank (Lending, Liability, Trade Finance, Treasury, Investment, E-banking, Services, etc). 2. All head of business (Lending, Liability, Trade Finance, Treasury, Investment, Ebanking, Services, etc) should send all of their products to Head of Product Development to be documented. While as softcopy, should be put at sharepoint so it could be accessed by all respective employee. 3. Every new product should be equipped with Risk, Legal and Compliance analysis before it is brought to the committtee.

2016 Performance

Duties and Responsibilities of New Products and Activities Committee The duties and responsibilities of New Products and Activities Committee, including: 1. Supervise the process of new products, services as well as activities development. 2. Supervise the Bank’s activities related to the implementation of new products, services and activities. 3. Evaluate and approve new products, services or activities proposed by the working unit. 4. Estab/ish and define the plan to issue new products, services and activities in line with the Bank’s strategy and business plan. 5. To evaluate the benefits and risk to the Bank on the products, services and activities launched by the Bank.

223


Duties and Responsibilities of Information Technology Committee Duties and Responsibilities of Information Technology Committee, including: 1. Establish the strategic framework as a reference in managing technology information resources. 2. Monitor the performance and improvement of the information technology. 3. Ensure that information technology plan is consistent/ in line with the Bank’s strategic objective. 4. Ensure that implementation of information technology projects are in accordance with the information technology plan and approve the “Project Charter”. 5. Establish the priorities and allocation of information technology budget. Duties Implementation of Information Technology Committee In 2016, Information Technology Committee has conducted meetings which cover agenda, including:

Position

1. Monitored the performance and improvement of the information technology. 2. Ensured that information technology plan is consistent/ in line with the Bank’s strategic objective. 3. Ensured that implementation of information technology projects are in accordance with the information technology plan and approve the “Project Charter”. 4. Establish the priorities and allocation of information technology budget.

Human Resources Committee

Structure, Composition, and Meeting Attendance of Human Resources Committee The selection of members of Human Resources Committee have taken into consideration of competences, independency, discretion, and code of conduct, as well as respective duties and responsibilities implementation in accordance with applicable regulations. As of December 31, 2016, the Human Resources Committee have conducted 8 (eight) meetings. The following table shows the attendance frequency of each member of Human Resources Committee in the meetings.

Human Resources Committee was established by Board of Directors with last amendement by Policy and Regulation No. 2/04/002.00/ II/2014 to assist the Board of Directors to improve effectiveness, efficiency, objectivity, and transparency of decision-making relating to HR matters and to provide assurance for stakeholders that all HR-related decisions are in compliance to Good Corporate Governance principles.

Name


% Attendance

Chairman


8

100%


Novi Mayasari (Human Resources Director)

8

100%

Member


8

100%

Member

Windiartono Tabingin (Compliance Director)

8

100%

224


Structure and Composition of Fraud Oversight Committee The selection of members of Fraud Oversight Committee have taken into consideration of competences, independency, discretion, and code of conduct, as well as respective duties and responsibilities implementation in accordance with applicable regulations. The following table shows composition of membership of Fraud Oversight Committee.


Name

Position


Acting President Director

Member


Risk Director

Member


Compliance Director

Member

Novi Mayasari


Member

Cut Tashana Azia

Chief Auditor



Chairman


Committee Position

Fraud Oversight Committee was established by Board of Directors with Compliance Policy and Procedure No. 1.301 dated June 5, 2012 to assist the Board of Directors in the improvement of effectiveness and efficiency of fraud prevention and handling. The Fraud Oversight Committee holds meeting at least two times a year and occasionally when necessary.

Company Profile

Duties Implementation of Human Resources Committee In 2016, Human Resources Committee has carried out activities as follows: 1. Established the suitability between the Human Resources projects and Human Resources strategic plans. 2. Reviewed the performance assessment in accordance with the policy. 3. Established the suitability between training plans and budget spent. 4. Established adjustment on the change required by the organization. 5. Implemented attempts to resolve Human Resources issues.

Fraud Oversight Committee

Management Report

9. Review and ensure that fair assessment has been conducted in line with the prevailing regulations. 10. Receive complaints from Human Resources and resolve Human Resources related issues.

2016 Performance

Duties and Responsibilities of Human Resources Committee Duties and responsibilities of Human Resources Committee, including: 1. Establish Human Resources strategic plans. 2. Establish the suitability between the Human Resources projects and Human Resources strategic plans. 3. Establish the suitability between the implementation of Human resources projects and project charter. 4. Establish the suitability between the training needs and the Bank’s business needs. 5. Improve the effective steps used to minimize Human Resources risk. 6. Monitor the performance of Human Resources and its development through the implementation of information-based system. 7. Resolve various problems occurred in the Human Resources aspects. 8. Approve the development plan for the key staff and potential key staff at second level and below.

225


Duties and Responsibilities of Member of Fraud Oversight Committee The duties and responsibilities of Fraud Oversight Committee, including: 1. Provide supervision and guidance on fraud risk management program 2. Manage and coordinate the actions and responses on the fraud that occurred in Bank 3. Review lessons learned and next action plans 4. Provide approval on the content of fraud report for external purpose, if necessary

226


5. Determine the actions to be taken including legal action 6. Decide the sanctions for perpetrators of Fraud 7. To prevent the conflict of interest, Directors, and/or other related parties which may affected the decision making on investigation, the conclusion and sanction against fraud case occured in a work unit, should not be involved in the Fraud Oversight Committee.

Duties Implementation of Fraud Oversight Committee In 2016, Fraud Oversight Committee has fulfilled its duties, including approved the content of fraud report and provided supervision and guidance on risk management of fraud to the related divisions. There were no internal fraud cases occured in the Bank.

2016 Performance

Special Asset Management Committee Structure and Composition of Fraud Oversight Committee The selection of members of Special Asset Management Committee have taken into consideration of competences, independency, discretion, and code of conduct, as well as respective

Name


% Attendance

Azhar bin Abdul Wahab (Act. President Director)

24

96%

Member (Alternate Chairman)

Lloyd Rolston (Risk Director)

24

96%

Member

Ervin Gumilar (Head of SME Credit Review

24

96%

Member

Wendriani Lukito (Head of Commercial Credit)

24

96%

Member (Secretary)

Arisman (Special Asset Management Head)

23

92%

-

-

To ensure that credit restructuring & recovery held by the Bank is in accordance with the prevailing regulations. To monitor Bank’s restructured credit portfolio.

- -

To review and provide approvals on the proposal of NPL management, both from Wholesale Banking and Retail Banking. To monitor the implementation of NPL management. To ensure that NPL settlement performed by Special Asset Management unit is based on Bank’s interest.


227


2. Non Performing Loans (NPL) Management - To review and provide recommendations on the Bank’s policy on NPL Management. - To review and provide approvals on the strategy of NPL Management, established by Special Management unit.

-


Duties and Responsibilities of Member of Special Asset Management Committee The duties and responsibilities of Special Asset Management Committee, including: 1. Credit Restructuring & Recovery - To review and provide recommendations on the Bank’s procedure on Credit Restructuring. - To monitor the implementation of the Bank’s procedure on Credit Restructuring. - To review and provide approval on the proposed credit restructuring & recovery.


Chairman

Company Profile

Committee Position

duties and responsibilities implementation in accordance with applicable regulations. The following table shows composition of Special Asset Management Committee.

Management Report

Special Asset Management Committee was established by the Board of Directors based on the Decree of Directors No. 041/ SK-Direksi/X/2016 dated October 18, 2016 to assist the Board of Directors in terms of Special Asset Management. The Special Asset Management Committee holds meeting at least once a week and occasionally when necessary.


3. Foreclosed Assets - To review and provide recommendations on the Bank’s procedure on Foreclosed Assets. - To monitor the implementation of Bank’s procedure on Foreclosed Assets. - To review and provide approvals on the strategy of Foreclosed Assets settlement, established by Special Asset Management Unit. - To provide approvals on the proposal of Foreclosed Assets settlement, proposed by Special Asset Management unit, by taking into account the prevailing regulations and Bank’s Articles of Association.

228


-

-

-

To receive regular report on net and status of Bank’s Foreclosed Assets from Special Asset Management Unit. To monitor the implementation of Bank’s Foreclosed Asset settlement. To ensure that Foreclosed Assets settlement performed by Special Asset Management unit is based on Bank’s interest.

4. To Evaluate/Assess the Performance of Special Asset Management.

Duties Implementation of Special Asset Management Committee In 2016, Special Asset Management Committee has carried out the following activities as follows: - Reviewed and approved the credit restructuring proposal according to the limit set. - Reviewed and approved the credit restructuring proposal by means of voluntary Foreclosed Assets of six NPL debtors. - Reviewed and approved the proposal of SAM on loans settlement by means of litigation of two NPL debtors.

Compliance Function

Company Profile

In particular, the Compliance Division has the following function: 1. Establishing and implementing Compliance Culture in all levels of organization and the Bank’s business activity;

2. Managing Compliance Risks faced by the Bank; 3. Ensuring that the policies, regulations, systems and procedures, as well as the Bank’s business activities are in line with the provisions of Regulators and the prevailing laws and legislations; and 4. Ensuring that the Bank is in compliance with the commitments made by the Bank to Bank Indonesia, Financial Service Authorities (FSA/OJK) and/or other regulatory authorities.

Management Report

Compliance Division has a significant role in strengthening the Bank’s structure towards each risk exposure that may occur in line with the advance of information

technology, globalization, and integration of financial market. Generally, the implementation of duties of Compliance Division encompasses a series of ex-ante (preventive) actions or steps to ensure that the policy, regulation, system, procedure, and business activity conducted by the Bank are in line with the rules and regulations of Regulators and the prevailing law and legislation.

2016 Performance

Compliance Function in QNB Indonesia refers to the Regulation of Bank Indonesia No. 13/2/ PBI/2011. It is carried out by Compliance Division which is under the supervision of Compliance Director. In performing its duties, Compliance Division cooperates with other organizational units as an independent partner, both in the process of policy planning and evaluation of compliance towards operational activities.

Organizational Structure of Compliance Function Management Discussion and Analysis

President Director (CEO)

Compliance Director


Head of Compliance & Procedure

Compliance Review & Information Services head

Compliance Procedures Head


Compliance Advisory Head

AML Head


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Profile of the Head of Compliance Function The Head of Compliance Division is directly responsible to the Director of Compliance. The Compliance Division leads the divisions of compliance, Anti Money Laudering, and procedures, and assists the Director of Compliance in the implementation of his duties and responsibilities. As of December 31, 2016, the position of the Head of Compliance and Procedure Division is held by Rr. Utami Tjipto. Citizen of Indonesia, 54 years old. She was appointed based on the Decree of the Board of Directors No. 571/ SK-DIR/ VIII/2012 dated August 28, 2012, which lastly amended with the Decree of the Board of Directors No. 122/SK-DIR/ VI/2014 dated June 24, 2014 and responsible directly to the Director

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of Compliance. Earned her Bachelor Degree in Law from Airlangga University, Surabaya, in 1986. Previously, she held the position of Compliance & Legal Group Head at PT. Bank ICB Bumiputera Tbk and Recovery Litigation Group Head at PT Bank CIMB Niaga Tbk. As Head of Compliance, she had a certification on Compliance and she is also a Certified Assessor by National Board of Professional Certification (BNSP). In 2016, she actively attended several competence development programs, among others: - English for Law - MQ Connector - Direct Sales Management - Group Coaching Managing Team: Coaching Skill - Compliance Workshop - Leaders Talk - Credit Proposal - Credit Proposal Improvement Workshop

- - - - -

Professionalism with Integrity for Leaders Group Coaching Managing Team Liquidity Coverage Ratio (LCR) Compliance Certification QNB Values Refreshment Dir Compliance

Qualification and Certification of Compliance Function 1. Meets the independency requirement. 2. Understands and masters the regulations of regulators and the applicable laws. 3. Do not conduct other duties outside the Compliance Function. 4. Possess high commitment to implement and improve the Compliance Culture.



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In implementing its function, the Compliance Division conducts its duties and responsibilites, which are, among others:

4. Reviewing and/or recommending update and improvement on policies, provisions, systems, or procedures of the Bank so as to be in line with the regulations of Bank Indonesia, Financial Services Authority, and other prevailing rules and regulations. 5. Ensuring that the policies, provisions, systems and procedures, as well as the activities of the Bank are in line with the regulations of Bank Indonesia, Financial Services Authority, and other prevailing rules and regulations. 6. Conducting other duties related to the Compliance Function.


Compliance Function Duties and Responsibilities

1. Taking steps to support the establishment of Compliance Culture in all activities of the Bank and within all levels of organization. 2. Identifying, measuring, monitoring, and controlling the Compliance Risk by referring to the regulations of Bank Indonesia and/or Financial Service Authority regarding the Implementation of Risk Management in Commercial Banks. 3. Assessing and evaluating the effectiveness, adequacy, and compatibility of the policies, regulations, systems, or procedures of the Bank to be in line with the prevailing laws and regulations.


5. Possess knowledge abilities of: interpersonal skill, compliance with the regulations of each filed, banking products and services; computer skill in the related field, technical skill in the related field, analysis skill in the related field, communication skill. 6. Has character and skill of integrity, excellent performance, leadership, decision-making, planning, and problem solving.


In conducting its duties and responsibilities, Compliance Division has four subdivisions with functions as follows: 1. Compliance Function: • Develops Bank’s compliance program as one of an effort to encourage the establishment of Compliance Culture in the entire Bank’s business activities and in all related working units. • Measures, monitors, and provides reviews and suggestion regarding the Compliance Risk of the implementation of new products and activities by referring to the regulations of Bank Indonesia, Financial Services Authorities, and any other relevant regulators.

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•

•

•

Makes efforts to ensure the bank’s compliance to the commitment to Bank Indonesia, or Financial Services Authorities, and any other relevant regulators. Ensures that the new provisions and regulations have been disseminated to the related units, through coordination meetings such as Governance Risk and Compliance (GRC) meetings, email blasts, or periodic and continuous training dissemination. Ensures that the policies, regulations, systems and procedures, as well as the Bank’s business activities are in line with the provisions of Regulators and the prevailing laws and legislations.

•

Conducts other duties related to the compliance function.

2. Anti-Money Laundering (AML) and Combating of Terrorism Financing (CFT) Function: • Composes strategies, steps, and/or plans to implement the AML/CFT programs. • Ensures that the AML/ CFT Program are able to be implemented based on the prevailing regulations, as well as provides reviews and suggestions for the problems faced by the related working units and internal control working unit in the process of AML/CFT implementation.

Update on the Achievement of Compliance Strategy Map In order to improve the Bank’s Compliance Function, the Bank realizes the implementation of Compliance Culture in every level of organization and Bank’s business activity, manages the Compliance Risk encountered by the Bank; ensures that policy, provision, system, and procedure as well as business activities conducted by the Bank is in accordance with Bank Indonesia, FSA/OJK and applicable regulations, and ensure the Bank’s compliance towards the commitment made by the Bank to Bank Indonesia, Financial Services Authority and/or other supervisory authorities.


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To support the success implementation of tasks and responsibilities of the Compliance Director, the Bank has prepared Compliance Strategy Map up to 2018. In terms of the implementation of such Strategy Map, in 2016 the Bank has performed the following things: 1. Supporting the Financial Target Achievement Prudently a. To be a Bank which takes into account the banking prudent principle by increasing the Compliance Culture in each work unit, among others, by:


In addition, Compliance Division also has other duties as follows: • Composes reports to related parties, such as PPATK (Indonesian Financial Transaction Reports and Analysis Center), Tax Office, KPK (Corruption Eradication Commission), and other institutions;

•

Conducts implementation evaluation of Good Corporate Governance (GCG) principles in line with related divisions. Conducts other duties given by the Director of Compliance and other members of the Board of Directors.


•

Company Profile

3. Policies and Procedures Function: • Standardizes policies and procedures • Re-checks the conformity between internal policy and procedure with the applied regulations. • Reviews existing policies and procedures and its conformity with external regulations, periodically. • Ensure the Bank’s policies and procedures are always up to date.

4. Compliance Review and Information Services Function: • Together with Internal Audit and Internal Control perform combined assurance in order to ensure operational transaction in working units are comply with existing policies and procedures • In line with Complliance & AML Sub Division conduct socialization regarding external regulations and internal policy. • Conduct coordination, communication and propose action plan/ recommendation that must be conducted by related unit in order to support Bank’s business activity • Monitor and remind all related units in fulfilling their commitments to regulators (Bank Indonesia, Financial Services Authority, and other regulatory institutions). • Ensure that every Bank’s employee could easily and quickly obtain the required relevant regulations through QNB Indonesia portal.

Management Report

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Assesses and evaluates the effectiveness development of the AML systems related to the information technology in order to improve the data updating program, single Customer Information File (CIF) and Risk Based Approach classification of customers. Ensures that the systems and submissions of report to the third parties (Bank Indonesia, Financial Services Authority, Indonesian Financial Transaction Reports and Analysis Center (PPATK), Corruption Eradication Commission (KPK), Tax Office, Correspondent Bank, and National Narcotics Agency (BNN)) are in timely manner and in line with the prevailing rules and regulations.

2016 Performance

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1) Assessing and ensuring that the Compliance Checklist of the new products and activities has been fulfilled in accordance with the rules. 2) Assessing and ensuring that the Compliance Checklist of the opening/ relocation/closing of office network is in accordance with the prevailing regulations. 3) Estabilishing a good relationship/ communication between the shareholders and management, as well as employees and customers, through a public expose. 4) Resolving the negative information related to the public/ customer complaints timely in accordance with the prevailing regulations. 5) Monitoring penalties by regulator (Bank Indonesia, Financial Services Authority, Indonesian Financial Transaction Reports and Analysis Center) regarding mistakes in reporting and conduct improvement to minimize potential fault risk by making coordination meeting with related working units.

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b.

Supporting the rapid business development by paying attention to the Bank’s prudent principles 1) Providing a review or recommendation on Bank’s activity related to the business, credit, and operational processes. 2) Published a compliance checklist either credit or new products or activities. 3) Establishing a reminder system to ensure that the reports are submitted in a timely manner to the regulators in accordance with the prevailing regulations. 4) Coordinate with related divisions such as Legal Division, Corporate Secretary Division, and General Services Division in reviewing the legal documents periodically, such as licensing documents (of the Branch Offices) and agreements that involved the Bank and other vendors, consultants, or agents.

2. Improving the Cooperation with Other Divisions a. A good Business Process and Customer Database

b.

1) The Bank implements Compliance Monitoring System (CMS) and Compliance Assessment Procedure in order to identify, measure, monitor, and control the compliance risk as well as composing an implementation procedure for the branch offices. Such procedure will enable the Bank to analyze the compliance of the branch offices based on their selfassessment data 2) Together with Internal Audit and Internal Control ensures the branch compliance to internal and external regulations. 3) Determining the branches with high risk potentials based on the findings of Internal Audit, Internal Control, and Financial Services Authority, as well as monitoring the implementation of the action plan that has been determined. An adequate Management of the Information and Reporting Systems 1) The Bank monitors the quality of CIF data periodically by auditing the branches using sampling method, coordinating with the Operations and IC Division to


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Company Profile

3. Establishing the Effectiveness of Internal Process a. Reliable, strong, and disciplined working unit 1) Strengthening the risk management culture of compliance continues to be done by increasing the effectiveness of the implementation of the compliance culture. Along with changes in the structure of bank organizations with the concept of “Single Captian” the Area Manager and/or the Branch Manager has been appointed as compliance officers at the branch. Furthermore, a dissemination in the form of email blast of new regulations,

Compliance News, AML News and Procedure News, as well as AMLAFT trainings, are continuously conducted in addition to the periodic GRC meeting with the related work unit. 2) Required each working unit either in Head Office or branches to conduct morning briefing regarding internal policies as stated in Director Memo regarding Compliance on Regulation. 3) Performing compliance certifications to all employees of Compliance Division from time to time. 4) Evaluating internal policies and guidelines • Conducting evaluation and completing the management policy of the Bank’s regulation adn procedures, in accordance with the prevailing laws and legislations. This evaluation encompasses the types of internal rules, hierarchy of internal rules, as well as mechanism and procedure of composition/ amendment and repeal of internal rules. In addition, the Bank also

Management Report

2) Composing a database which is related to the internal regulations and provisions from the regulators (Financial Services Authority, Bank Indonesia, Indonesian Financial Transaction Reports and Analysis Center); documenting all compliance assessment results related to the business activities; and documenting the checklist of new activities, loans, and other compliance checklist so as to facilitate the working unit in searching for the required regulations.

2016 Performance

c.

evaluate the filling of customer’s data form and the input of data in the system, and comparing the data with the supporting documents given by the customers (Quality Checking). 2) Developing the Anti Money Laundering system so as to comply with the provisions of the regulators (Indonesian Financial Transaction Reports and Analysis Center, Bank Indonesia, and Financial Services Authority). 3) Developing the intranet system to facilitate the employees in finding internal and external regulations from Financial Services Authority, Bank Indonesia, Indonesian Financial Transaction Reports and Analysis Center, and Tax Institution Supporting the Effectiveness of the Strategic DecisionMaking 1) Organizing the Governance Risk & Compliance (GRC) forum periodically with other related working units to discuss the new regulations issued by the Financial Services Authority and Bank Indonesia, so that the Bank may adjust and implement the new rules accordingly.


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•

•

•

•

•

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prepares the procedure of distribution and dissemination of internal rules. Conducting evaluation on the policy of internal control system with the related divisions. Conducting evaluation on the implementation of GCG principles with the related divisions. Conducting review and evaluation on the policy and procedure of Anti-Money Laundering and Prevention of Terrorism Financing. Reviewing the improvement of loans compliance checklist. Reviewing and evaluating the General Policy on Loans and formulating Loans Implementation Guidelines for each business segment. Reviewing and evaluating the accounting policy and procedure.


4. Strengthening the Organization Capacity a. Establishing a leader that is able to manage and direct the team effectively in: 1) Establishing the culture of sharing in each division, particularly in the branch offices, over the operational activities in the branch in accordance with the applicable regulations. 2) Issuing Certificate to the Branch Managers who has accomplished Branch Accreditation. b. Employees who are able to detect disobedience to the regulations and/or transcation or business or other suspicious operational activities 1) Providing e-learning and e-library facilities for the employees so as the operational activities are conducted in line with the applicable rules. 2) Following-up the findings of Internal Control/Internal Audit/Regulators immediately and ensuring the operational activities are conducted in line with the applicable rules. 3) Issuing Compliance Certificate for the employees who passed the Compliance test

c.

Compliance Review sub division shall ensure the policies and procedures, as well as the bank’s business activities has complied to the Regulator’s policies and other laws. d. Proposing a plan to encourage and/ or preserving the Compliance Culture, including the plan for the dissemination of provisions: 1) Providing information of the new regulations to the Board of Commissioners, Board of Directors, related Divisions and/or branches, either directly or in cascading manner, from the head of division to all personnel of the division. 2) Conducting dissemination of the hierarchy and procedure of the internal rules or new regulations. 3) Conducting dissemination of the policy of internal control system. 4) Conducting dissemination of loans compliance checklist. 5) Continuing the dissemination of the policy and procedure of AML and CFT Programs.

3.

4.

6.


7.


5.


In general, the activities carried out by the Bank to improve the compliance function, among others, as follows: 1. Improved the skill and knowledge through training which includes: a. E-Learning, on the application of the AntiMoney Laundering (AML) and Combating the Financing of Terrorism (CFT)

2.

Company Profile

In 2016, the Bank carried out the theme “Competency Improvement to Support Compliance Culture Implementation” which focused on the attempt to improve the competency of leaders and business participants in particular. The Bank believes that the ‘first line of defence’ is very essential to the fulfillment of compliance. Therefore, the competency of people to comprehend the entire internal and external regulations shall be improved in order to elevate the overall compliance towards prevailing regulations. The attempt to improve the competency includes increasing skill, improving knowledge, and developing the attitude.

8. Transferred the implementation of Whistleblowing System to the Anti Fraud Unit under Audit and renamed the email address into Ayo Lapor! 9. Adding new features to the AML system, so that the overall AML System bank in 2016 has over 10 features. 10. In terms of policy and procedure, the Bank carried out simplification and codification of codification of several Bank’s operational policies, which originally scattered to several policies and procedures, and became Bank’s General Operation Policy. 11. Conduct and provide a review of the implementation plan of new products and activities to ensure compliance with the Bank on the regulation in the form of a checklist and compliance is self-assessment. 12. Compliance Review ensures the work units comply with the regulations and provisions by visiting several branch to review and ensure the compliance of such branch or work units. In addition, Compliance Monitoring System has also been provided in every branch as a guidance for Head of Branch, Operational System Manager, Supervisor, Teller, and Customer Services.

Management Report

Compliance Function Implementation in 2016

Direct training (faceto-face) regarding the compliance, business implementation, and policy and procedure c. Socialization of new regulations or refreshment of existing regulations d. External training such as risk management certification and refreshment for the existing certificate holder Encouraged the implementation of Governance, Risk, and Compliance (GRC) meeting regularly. Promoted the implementation of Compliance Campaign to further strengthen the awareness of compliance culture in the Bank. Compliance Campaign: 100% Complied! was socialized every first working day in the week via e-mail blasts and stickers. Supported the improvement of reporting system of several reports delivered to Regulators (regulatory reporting) by establishing a team (task force). Supported the Bank’s business to comply with the prevailing regulations especially in terms of Digital Banking development. Reviewed and updated the internal provisions, mainly focused on credit policies such as loan restructuring policy. Promoted the implementation of QNB Values to further strengthen the Bank’s integrity value which eventually improve the compliance culture.

2016 Performance

b.

6) Conducting dissemination of GCG and Coded of Conduct of the Bank. 7) Ensuring the compliance selfassessment in every change of regulations.


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Training and Competency Development of Compliance Function No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36.

Program

Type of Program

Anti Pencucian Uang & Pencegahan Pendanaan Terorisme (APU PPT) Bidang Kredit Common Reporting Standard (CRS) Compliance Certification Compliance Workshop Credit Proposal Credit Proposal Improvement Workshop Direct Sales Management Effective Presentation Skill English For Law Group Coaching Managing Other : Supervisory Group Coaching Managing Team Group Coaching Managing Team : Coaching Skill Identifikasi Transaksi Keuangan Mencurigakan (TKM) LBU : New Data Kualitatif Form & New SOP Leaders Talk Learning Forum Learning Forum Sesi 1 : Grow Yourself in Changing Business Learning Forum Sesi 2 : Drive Colloboration to Change Learning Forum Sesi 3 : Overcome Resistant to Change Legal Forum Liquidity Coverage Ratio (LCR) Managing Others Managing Self Microsoft Excel 2013 MQ Connector Pengisian LBU Form 11 Berdasarkan Data Kualitatif Peran Bank Dalam Mencegah Kejahatan Perbankan Melalui Pengawasan Internal Terpadu Profesional Image & Grooming Head Office Professionalism with Integrity QNB Values Festival QNB Values Refreshment Dir Compliance Ramadhan Gathering Refreshement Sertifikasi Manajemen Risiko Sanity Checking Sharring Session : Awareness on New Accounting Standard on Financial Instrument/Impairment (IFRS 9) Workshop Audit Kredit Critical Point Dalam Perkreditan

Location

Sharing Session

Head Office Training Room 3rd floor

Training Training Sharing Session Training Training Training Training Training Training Sharing Session Training Training Sharing Session Sharing Session Training Sharing Session Training Training Training Training Sharing Session Sharing Session Training Training Sharing Session Training

Hotel Grand Kemang Head Office Training Room 3rd floor SCBD Head Office Training Room 3rd floor Hotel Atlet Century Hotel Santika Premiere Slipi Perbanas Bali Head Office Training Room 3rd floor SCBD Hotel Santika Premiere Slipi Bali SCBD SCBD Head Office Training Room 3rd floor Head Office Training Room 3rd floor Head Office Training Room 3rd floor Eco Park Ancol Hotel Santika Premiere Slipi Head Office Training Room 3rd floor Head Office Training Room 3rd floor SCBD Hotel Atlet Century Head Office Training Room 3rd floor Head Office Training Room 3rd floor Hotel Atlet Century

Sharing Session Training Training Training Sharing Session Training Training Training

SCBD Head Office Training Room 3rd floor Hotel Athlet Century Griya Perbanas, Jl. Karet Kuninga, Jkt Head Office Training Room 3rd floor Head Office Training Room 3rd floor Head Office Training Room 3rd floor Griya Perbanas, Jl. Karet Kuninga, Jkt

Sharing Session

SCBD

Activities Related to the Application of Anti-Money Laundering and Combating the Financing of Terrorism (AML and CFT) In line with the regulator’s passion to protect the banking industry from the criminal activity, particularly related to prevention of money laundering or preventing the terrorist financing, Bank Indonesia has issued a Standard Guidelines for the Implementation

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of Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT). To support the implementation of Anti-Money Laundering and Combating the Financing of Terrorism, the steps that have been

undertaken by the Bank is to set up Sub Division of AML-CFT as part of the Compliance Division under the supervision of the Director of Compliance, with the scope of duties, among other, to ensure the following things:

Indicators of Compliance

Company Profile Management Discussion and Analysis Corporate Governance Corporate Social Responsibility

To mitigate the compliance risk in 2016, the Compliance Unit strived to the ensure compliance throughout the entire work units in accordance with the provisions. For 2016, the tagline that served as the guidelines was Competency Improvement to Support Compliance Culture Implementation, and the Bank has performed the following things: a. Compliance Function: 1. The Bank has performed identification, measurement, monitoring and control of compliance risk, namely by implementing Compliance Monitoring System (CMS) and Compliance Assessment Procedure, as well as Report Submission Policy; in which regulate all procedures, the Compliance Division could perform analysis on compliance of the branch based on the data created by the branch (selfassessment) and approved by the Branch Manager and Area Manager

Management Report

Based on the bank’s compliance risk profile report in the period of third quarter in 2016, the compliance risk profile ranked (2) Low to Moderate, with the Inherent Risk ranked (2) Low to Moderate, and the Quality of Compliance Risk Management ranked (2) Fair.

2. The Bank also continued to make improvement to the reporting system for some reporting to Bank Indonesia by doing the following things: - Send reporting reminder periodically, on the obligation to report to the FSA/ OJK and BI to the related work unit. - Identified the cause of reporting mistake. - Held coordinating meeting with the PIC of reporting - To minimize the recurrence of reporting mistake, actively identified the attempt to improve reporting, and prepared reporting implementation guidance and ensured that the reporting system applied by the Bank has referred to the guidelines issued by the regulator. - Reviewed the reporting reminder system periodically to update the change of PIC, regulation, and reporting format, to minimize the potential of making mistake in submitting the report format.

2016 Performance

1. Policies and procedures are in accordance with the development of AML and CFT Program to date by using the strategy of Risk Based Approach. 2. Maintain the Bank’s compliance towards all commitment made by the Bank to the regulators (Indonesian Financial Transaction Reports and Analysis Centre/PPATK and Financial Services Authority) regarding the implementation of AML-CFT. 3. Coordinate with the HR Division to provide training of AML-CFT regularly and continuously both through training and electronic media (e-mail blast, AML News). 4. Development of a AML system for the implementation of AML/PPT, where in 2016, the unit has implemented AML work on the development of three new features on in-house AML System, namely: - Features Risk Profiling Alert - Notification Feature Negative List, and - Features Reminder Review Date Time At the present time, in-house AML System bank has over 10 features. 5. Develop a reporting system related to FATCA Reporting that serves as a special reporting system for US taxpayers to the FSA/OJK via SiPINA system.


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3. Strengthening the Culture of Compliance Risk management which continued to be done by increasing the effectiveness of the implementation of the compliance culture. Along with changes in the organizational structure of the Bank with the concept of “Single Captain”, thus the Area Manager and/or the Branch Manager has been appointed as Compliance Officer in the Branch, in addition to continuously conduct socialization, such as via e-mail blasts of new regulations contained in Compliance News, AML News and Procedure News, training of AML & CFT, GRC (Governance Risk & Compliance) meeting with related work units. 4. Prepared the Compliance & AML Annual Work Plan and Policies & Procedure Annual Work Plan to ensure that the policy, system and procedure as well as business activity carried out by the bank is in accordance with the provision of Bank Indonesia, Financial Services Authority, and applicable regulations.

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5. Reviewed on the plan of new product and activity, credit proposal and checklist of the planning of opening, relocation, and closing of branch/sub branch office to ensure the Bank’s compliance towards regulation in the form of compliance checklist (self-assessment). 6. Assigned each AM/BM and/or work unit to do morning briefing and/ or periodic meeting/ coaching and report on its implementation to the Internal Control. The purpose of the morning briefing and/or periodic meeting/coaching is to improve compliance with regulations. 7. Compliance Unit has also developed Compliance Campaign as a reminder in the form of e-mail blast, banner, sticker, and held compliance quiz which related to the Bank’s provision and/or internal regulation, with the aim of improving compliance culture.

8. Performed monitoring on bank’s commitment towards regulator based on the incoming letter from Financial Services Authority (FSA/OJK), Bank Indonesia (BI) and/or other supervisor authority (Corruption Eradication Commission, Tax and National Narcotics Board). 9. Socialized new regulations issued by Bank Indonesia and/ or Financial Services Authority (through GRC meeting and e-mail blast) and held training periodically. 10. Implemented other compliance function activity, such as (but not limited to) Director of Compliance Report, Outsorcing Report, Related Party Report, GCG Report to FSA/OJK (semiannual).

Internal Audit Internal Audit team consists of 12 employees. All members are experienced professionals with proper independency and other requirements, as regulated in the prevailing regulations. Internal Audit division is directly responsible to the President Director and it divided into several specialists such as Operation & Treasury audit, Head Office Functions audit, Credit audit, IT audit, and Anti-Fraud & Investigation.

Audit Committee

Company Profile

Internal Audit Structure and Position President Director


Chief Auditor

Branch & Non Credit Audit Head

Head Office & IT Audit Head

Credit Audit Head

Anti Fraud & Investigation Head

Throughout her career, she participated in several competence development programs in terms of audit, among others, Certified Internal Auditor (CIA), Understanding to Implement

ICAAP and Independent review Scope by Leinad Aganis, Sharia Audit (Financing & Funding) training held by Karim Consulting, Regional AML and Terrorist Financing Conference, Level IV Risk Management Certification from Risk Management Certification Body (BSMR), New Audit Planning methodology training from Deutsche Bank Singapore, Audit Report Writing at Deutsche Bank Singapore presented by PEF Associates Inc, USA, etc.


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Senior Operational Risk Officer and Head of Operational Risk at Standard Chartered Bank (20082011), Internal Audit Head of Deutsche Bank (2006-2008) several positions at Bank ABN AMRO with the latest position as Internal Audit Manager (1995-2006).


Head of Internal Audit The Internal Audit Division is led by Cut Tashana Azia. Citizen of Indonesia, 42 years old. She was appointed as the Chief Auditor since August 1, 2016 based on Decree of Board of Directors No. 668/SK-HMRS-ES/VIII/2016 dated August 1, 2016. Earned Associate Degree of Business Management from San Diego Mesa College, United States in 1994. Previously served as Wholesale, Risk & Syariah Audit Head, and Head Office Audit Head at Bank CIMB Niaga (2011-2016) ; Wholesale

Management Report

The head of Internal Audit report directly to the President Director. The Head of Internal Audit Unit shall be appointed and dismissed by the President Director with the approval of the Board of Commissioners, and whose appointment is reported to Financial Services Authority.

2016 Performance

Bank has established the Internal Audit Division as an independent, objective assurance and consulting activity designed to add value and improve the Bank’s operations. It helps the Bank accomplish its objectives by bringing a systematic discipline approach to evaluate and improve the effectiveness of risk management, control and goveranance processes.


Internal Audit Qualification and Certification 1. Having a professional integrity and behavior, independent, honest, and objective in implementing the duties. 2. Having knowledge and experiences on audit system, management principles, auditee’s activites, and other knowedge relevant to their scope of works. Having comprehensive knowledge regarding the rules and regulations in the banking industry and capital market, as well as other related rules and regulations. 3. Having the skills to interact and communicate, either in speaking or writing, effectively. 4. Keeping the confidentiality of information and/or company data related to the implementation of Audit Division’s duties and responsibilities, unless obliged based on the prevailing regulations or court’s decisions. 5. Understanding the Good Corporate Governance principles and Risk Management. 6. Improving knowledge, skills and professionalism continuously. 7. Keeping no concurrent duties and positions neither conducting operational activities at PT Bank QNB Indonesia Tbk except the operational activities of Audit Division.

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To improve the competence of resources and objectivity of audit results, Audit Division enrolls its auditors in training program, pertaining to external and internal ones, seminar/workshop while preparing these auditors to join internal auditor sustainable training program. Currently, Audit Division has experienced and competent auditors in the area such as Bank operational, treasury, credit, and IT Operations Core Banking. Several auditors have the International Certifications such as CFSA, CISA, COBIT 5 and Audit Certification (national).

Duties and Responsibilities of Internal Audit 1. To compose and implement Annual Audit Plan and consultation. Annual Audit plan is approved by President Director and is reported to Board of Commissioners. 2. To report the realization of Annual Audit Plan and Consultation for every semester to the President Director and Board of Commissioners. 3. To review and assess the efficiency and effectiveness rate in finance, accounting, operations, human resources, marketing, information techonology and other activities. 4. To examine and evaluate the implementation of internal audit and risk management system in accordance with the policy of the Bank 5. To provide objective suggestions and information on all activities assessed in all management levels.

6. To compose examination reports and submit them to the President Director and Board of Commissioners along with the carbon copies directed to Compliance Director. 7. To provide consultation service for internal parties in order to gain added value and improvement on controlling, risk management and good corporate governance quality. 8. To perform necessary investigation audit. 9. To monitor audit follow-up and report it to the President Director and Board of Commissioners. 10. To immediately report all audit findings that are estimated to hinder business activities of the Bank to the President Director and Board of Commissioners. 11. To prepare Implementation Report and Audit Result Principles to be submitted to Bank Indonesia. 12. To submit Annual Budget Plan for the following year and report its realization for every semester to the President Director. 13. To compose written policy and procedures as duty implementation guidelines for Audit division. 14. To compose a program that is aimed to evaluate audit quality. 15. To implement continuous education in line with the Auditor’s competency. 16. To cooperate with Audit Committee. Any periodical reporting will be described in audit policy documents.

Internal Audit Activities Several Audit projects as per Audit Plan 2016 have been conducted such as: 8 audits related to Branch Operations, 6 audits related to Head Office and IT, and 3 special audits.

Audit Findings In 2016, Internal Audit Division did not report any audit finding that have significant impact to the Bank’s financial and operational performances.

Done (%)

In Progress (%)

Internal

116

78%

22%

External (FSA/OJK)

308

80%

20%

Anti-Fraud Strategy

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Fraud Identification Fraud identification is a part of risk management process to identify and analyze the fraud risk potential in all activities. The identification must be recorded and informed to the investigator, especially for the high risk fraud activity. Know Your Employee Know Your Employee is the control in Human Resources aspect to prevent fraud. This policy is implemented through effective recruitment system and procedure, selection system with risk consideration in employees’ placement, and knowing employee’s character, personalization, lifestyle, and working hour.


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This guideline is mandatory for all work unit in PT Bank QNB Indonesia with the aim to monitor and set the anti-fraud strategy to prevent, detect, investigate, and follow up the fraud.

•


Bank QNB Indonesia has formulated the anti-fraud strategy in compliance with FSA/OJK Regulation No. 55/POJK.03/2016 dated December 7, 2016 concerning the Implementation of Corporate Governance for Commercial Banks, as well as Bank Indonesia Circular Letter No. 13/28/DPNP Dated December 9, 2011 on Anti-Fraud Strategy Implementation for Commercial Bank.

Fraud Prevention Fraud prevention is the responsibility of the Bank’s management to raise awareness and take actions before the occurrence of fraud. The actions are described in several strategies, namely: • Anti-Fraud Awareness To increase the awareness on fraud prevention importance, the Bank implements a good leadership supported by high anti-fraud awareness thus all employees are also aware to contribute in fraud prevention. This prevention developed through preparation and dissemination of AntiFraud Statement, employee awareness program, and customer awareness program.


Incoming Whistleblowing Report In 2016, there was no whistleblowing report submitted.

Company Profile

Total Audit Findings

Management Report

Auditor

18. To contribute in company risk management process, including Anti-Money Laundring (AML) and AntiTerrorist Financing (AFT), Information Techology and information security, as well as other risk management function to ensure proper risk identification and management.

2016 Performance

17. To comply with the Bank’s policy & procedures and to utilize the best practice standard and guidelines by professional institutions, such as Institute of Internal Auditor (IIA), Information System Audit and Control Association (ISACA), Committee of Sponsoring organizations of the Treadway Commission (COSO) etc. as references.


Fraud Detection Fraud detection aim to identify and find the fraud through several strategies, namely: • Whistleblower Mechanism and Policy This strategy focused on the whistleblowing report disclosure. Thus, the whistleblowing system in the Bank is clear, easy to understand, secure, and effectively implemented to encourage the employees to monitor and report the fraud. • Impromptu Audit Impromptu audit conducted by the head of each work unit or by Internal Control Unit to specific business unit with high risk of fraud. This impromptu audit aims to increase the employees’ awareness in implementing their duties responsibly.

•

Surveillance System Surveillance system is a test or investigation conducted by independent party or the Bank’s internal without the awareness of the auditee. Surveillance is conducted through actions such as security camera placement, control access to rooms, or computer activities and communication data investigation. This aim to monitor and test the effectiveness of anti-fraud policy.

Investigation, Reporting and Sanction Fraud Investigation aim to identify needed actions to save the Bank from potential loss caused by fraud. Lead by competent Internal Audit member appointed by Anti-Fraud Task Force, fraud investigation aim to collect evidence related to the fraud and establish actions to prevent loss potentials. In

the context of Internal Audit cannot do the investigation, then Internal Audit must appeal to related Director or Division Head to conduct the investigation. The investigation findings must be reported on timely manner through prevailing mechanism to Fraud Oversight Committee, Compliance & Procedures Division, related Director, and Financial Services Authority. Monitoring, Evaluation and Followup Monitoring, evaluation and follow up aim to monitor the fraud follow up actions in accordance with the Bank’s internal regulations and in compliance with the prevailing legislations. To support the whole evaluation process, fraud profiling is important to identify the weakness and the cause of occurred fraud, thus Internal Audit can review the fraud effect and prepare the needed prevention towards the fraud reoccurrence in the future.

Internal Fraud The following table lists details of internal fraud which occurred in 2016: Number of Cases Involving Auditor

Board of Commissioners & Board of Directors

Permanent Employee

Contract Employee

2016

2015

2016

2015

2016

2015

-

-

-

-

-

-

Total internal fraud cases Settled Under internal process Pending Followed up by law suit

In 2016, there was no internal fraud act by management, permanent or non-permanent employees that has a loss impact greater than IDR100 millions as per regulatory requirements i.e. BI Circular Letter regarding Good Corporate Governance implementation in Commercial Bank.

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External Audit 2016 Performance Management Report Company Profile

During audit process by public accountant firm, the Bank always improve the communication and coordination with the external auditor. Finance and Accounting Division responsible to do the coordination and communication with external auditor, which done by coordination meetings, close monitoring and intensive communication. With this arrangement, it is expected that comprehensive, fast and optimal audit result can be achieved. In addition, the audit implementation of Bank’s financial statement, the Public Accountant’s Firm Purwantono, Sungkoro & Surja (a member of Ernst & Young Global Limited) is carried out as follows:


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The appointment of Public Accountant’s Firm Purwantono, Sungkoro & Surja (a member of Ernst & Young Global Limited) to audit Bank’s financial statements for 2016 was according to the recommendation from Audit Committee of the Bank. The recommendation submitted to Board of Commissioners who later propose to Annual GMS. Annual GMS held on February 16, 2016 approved the appointment and provide authority to the Board of Directors to determine the honorarium and other requirements.

Audit Implementation


The Bank appointed Public Accountant’s Firm Purwantono, Suherman & Surja (a member of Ernst & Young Global Limited) (which then changed its name to Purwantono, Sungkoro & Surja (a member of Ernst & Young Global Limited)) to audit Bank’s financial statements for 2016 in accordance with the resolution of the Annual GMS on February 16, 2016. The appointment was made in accordance with Bank Indonesia, Financial Services Authority, and other relevant regulations. The appointment was made after verification that the External Auditor complies with the principles of professional ethics, which include professional responsibility, integrity, objectivy,

confidentiality, technical standards as well as professional competence and care.


Appointment of External Auditor


1. Conduct the investigation on all material accounts, based on applicable Professional Public Accountant Standards and ensure its compliance with applicable Indonesia Accounting Standards.

Financial Year 2016 2015 2014 2013 2012 2011 2010

Year 2016 is the second year assignment from Bank to Public Accountant Firm Purwantono, Sungkoro & Surja (a member of Ernst & Young Global Limited) with scope of work limited review, interim audit and year end audit. Public Accountant Firm and Public Accountants which provide financial audit services to the Bank could be seen in the following table:

Public Accountant Firm Purwantono, Sungkoro & Surja (a member of Ernst & Young Global) Purwantono, Sungkoro & Surja (a member of Ernst & Young Global) Purwantono, Suherman & Surja (a member of Ernst & Young Global) Purwantono, Suherman & Surja (a member of Ernst & Young Global) Siddharta & Widjaja (a member of KPMG) Siddharta & Widjaja (a member of KPMG) Aryanto, Amir Jusuf, Mawar & Saptoto

Public Accountant’s Firm Purwantono, Sungkoro & Surja (a member of Ernst & Young Global Limited) is in the opinion that the financial statement of the Bank which ended on December 31, 2016 have been presented in an unqualified opinion and free from material misstatement based on accounting principles that generally accepted in Indonesia.

246

2. Communicate the audit findings to the Bank’s management and Financial Services Authority 3. Maintain independence during the implementation of its duty.


Relationship Between Bank, Public Accountants, and Financial Services Authority During the audit implementation in 2016, the Bank has exercised transparent communication and provided complete information and data to the external auditor for the audit purposes. Communication and cooperation with the external auditors was conducted on the latest accounting policy issues, including tax development, in order to present a fair financial report. The Board of Directors have taken into account the Management Letter from the Independent Auditor for further follow-up.

Accountant’s Name Daniel Setiadi Handaja Peter Surja, CPA Peter Surja, CPA Peter Surja, CPA Liana Lim, SE., CPA Liana Lim, SE., CPA Ferdinand Agung

Audit Fee Audit fee paid by the Bank for financial year 2016 amounted to IDR1.34 billion including VAT and other related taxes. The fee has also included out of pocket expenses.

Other Services In addition to financial audit services, Public Accountant Firm Purwantono, Sungkoro & Surja (Ernst & Young) did not provide other services to the Bank.

Corporate Secretary

Qualification and Certification of Corporate Secretary 1. Have legal competence. 2. Possess adequates knowledge and understanding in legal, finance, and corporate governance. 3. Understand the Bank’s business activities. 4. Have a good communication skill. 5. Domicile in Indonesia.

Company Profile

Corporate Secretary is responsible for the information disclosure including information avaibility on the website, reporting submission to the FSA/OJK - capital market supervisory directorate, implementations and documentations of the GMS, meetings of Board of Commissioners and Board of Directors, monitoring and ensuring the Bank’s compliance with prevailing laws and regulations of capital market.

The establishment of Corporate Secretary is pursuant to the Financial Services Authority (OJK) Regulation No. 35/ POJK.04/2014 dated December 8, 2014 on Corporate Secretary of Issuers or Public Companies.

Management Report

To elevate its services to shareholders, the Bank as public company has appointed Corporate Secretary which functions as a liaison officer between the Bank and investors, capital market participants, regulators and analysts as well as the general public. The Corporate Secretary has a vital role in creating a good and effective communication between the Bank and shareholders as well as other stakeholders while

ensuring the availability of material information in timely and accurate manner for related parties.

2016 Performance

Legal Basis of the Appointment , Structure, Position of Corporate Secretary

Corporate Secretary Organizational Structure Management Discussion and Analysis

President Director

Compliance Director

Directors


Head of Corporate Secretary

Liason Officer

Secretary/ Personal Assistant Corporate Social Responsibility

Corporate Action & Stakeholder Mgt. Officer


247


Appointment and Profile of Corporate Secretary The Corporate Secretary is appointed and reports to Compliance Director. Change of Corporate Secretary of the Bank has been reported to Financial Services Authority (OJK) on June 29, 2015 based on Decree of Board of Directors No. 417/SK-HRService/VI/2015 dated June 25, 2015 regarding Establishment of Lina as Head of Corporate Secretary of the Bank. Lina Head of Corporate Secretary Citizen of Indonesia, 39 years old. Domiciled in Jakarta, Indonesia. Lina was appointed as the Head of Corporate Secretary since June 25, 2015 based on Decree of Board of Directors No. 417/SK-HRService/VI/2015 dated June 25, 2015. Earned her Bachelor Degree in Economy from Tarumanegara University, Indonesia in 1998. Previously, she held the position of Corporate Services Head PT Bank UOB Indonesia, Corporate Secretary PT Bank Victoria International Tbk and was an Auditor at Public Accountant Firm Hans Tuanakota & Mustofa (Member of Deloitte Touche Tohmatsu). In 2016, she actively attended several competence development programs, among others, Managing Team, Leaders Talk, Project Management, Risk Management Sertification Refreshment, Professionalism with Integrity for Leaders, QNB Values Festival and other trainings.

248


Duties and Responsibilities of Corporate Secretary

4. Act as a liaison officer between the Bank, shareholders, Financial Services Authority (OJK) and other stakeholders

Duties and Responsibilities of the Corporate Secretary refers to the Financial Services Authority (FSA/OJK) Regulation No. 35/ POJK.04/2014 dated December 8, 2014 on Corporate Secretary of Issuers or Public Companie as follows: 1. Follow the developments of the Capital Market, particularly the prevailing regulations in the field of Capital Market. 2. Provide inputs to the Board of Commissoners and Board of Directors to comply with capital market laws and regulations. 3. Assist the Board of Directors and Board of Commissioners in the implementation of corporate governance which include: • Information disclosure to public including availabiity of information on website of the Bank • Submission of reports to Financial Services Authority (OJK) and other capital market regulators accurately and in a timely manner • Holding and documentation of General Meeting of Shareholders, • Holding and documentation of the Board of Commissioners and Board of Directors Meetings • Implementation of orientation program for new member of the Board of Directors and/or the Commissioners

Duties Implementation of Corporate Secretary The duties implementation regarding Corporate Secretary functions throughout 2016 are summarized in the following: 1. Submitted regular and incidental reports to FSA/OJK and Indonesia Stock Exchange (IDX), including information disclosure report as well as response to inquiries from Financial Services Authority (OJK) and IDX. 2. Submitted reports related of Shareholders, Board of Commissioners and Board of Directors to Financial Services Authority (OJK), the Indonesian Central Securities Depository and the Deposit Insurance Agency (LPS). 3. Provided the Board of Directors with information on capital market regulation and provision on which the Bank shall comply as well as provide inputs to the Board of Directors on responses and comments from the investors. 4. Attended the Board of Directors and Board of Commissioners’ Meetings and compose the Minutes of Meeting. 5. Composed special list for the Board of Directors and Board of Commissioners related to share ownership as well as business relationship which may cause conflict of interest with the Bank.


PT Bank QNB Indonesia Tbk PT Bank QNB Indonesia Tbk PT Bank QNB Indonesia Tbk


PT Bank QNB Indonesia Tbk PT Bank QNB Indonesia Tbk PT Bank QNB Indonesia Tbk

Jakarta Jakarta Jakarta Jakarta Jakarta Singapore Jakarta Jakarta

PT Bank QNB Indonesia Tbk PT Bank QNB Indonesia Tbk LSPP PT Bank QNB Indonesia Tbk PT Bank QNB Indonesia Tbk Fitch Solution PT Bank QNB Indonesia Tbk Financial Services Authority/ OJK


May 30, 2016 June 16, 2016 July 28, 2016 July 30, 2016 September 15, 2016 September 6, 2016 October 13, 2016 November 15, 2016

Organizer Management Discussion and Analysis

April 28, 2016 May 10, 2016 May 20, 2016

Managing Team Leaders Talk Group Coaching Managing Team: Coaching Skill Project Management Industrial Relationship Learning Forum Session 2: Drive Collaboration to Change Leaders Talk Ramadhan Gathering Risk Management Certification Refreshment QNB Values Festival Professionalism with Integrity for Leaders Global Sovereign Conference Group Coaching Managing Team Workshop of Information Disclosure for Issuer or Public Company

Location

In order to keep abreast of the latest developments regarding the implementation of the functions and duties of the Corporate Secretary, the Bank facilitates the staff of the Corporate Secretary to participate in various forms of training. During 2016, the Corporate Secretary participate in:

Company Profile

March 3, 2016 March 16, 2016 April 7, 2016

Training & Seminar

Development of Corporate Secretary Competence

Management Report

Date

8. Maintain Bank’s documents related to licensing, including Company license, the Articles of Association and the approval letter from the relevant institutions, the data of Shareholders, the data of the Board of Commissioners and Board of Directors. 9. Maintaned good communication and relationship between the Bank and capital market regulators, investors and public. 10. Together with other work units strived to enhance the implementation of good corporate governance of the Bank.

2016 Performance

6. Conducted Annual Public Expose in compliance with IDX Regulation No. I-E dated July 19, 2004 regarding the Obligation of Information Disclosure, the Bank has conducted annual public expose in December 19, 2016 at Bank’s Head Office. 7. Conducted GMS in compliance with the Financial Services Authority (OJK) Regulation No. 32/POJK.04/2014 dated December 8, 2014 regarding Planning and Conducting of GMS for Public Companies, the Banks held AGM in February 16, 2016 dan EGM in April 13, 2016 and in December 19, 2016.



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Risk Management

The foundation of risk management in Bank QNB Indonesia is set based on the philosophy that the Bank recognizes the importance of effective Risk Management for its business and financial success as well as corporate reputation. Hence, the development of the Bank’s business plan is based on the view point that proper balance between risks and benefits need to be maintained in order to achieve sustainable long term growth for shareholders. In support of the Bank’s business plan, reliable risk management is not only essential, but also needs to be implemented effectively. Risk Management implementation is conducted via the guidelines of Bank Indonesia Regulation concerning the Implementation of Risk Management for Commercial Banks No. 5/8/PBI/2003 dated May 19, 2003 as amended with PBI No. 11/25/PBI/2009 and Bank Indonesia Circular Letter No. 13/23/DPNP dated October 25, 2011 concerning the Amendment to Circular Letter No. 5/21/DPNP regarding the Implementation of Risk Management for Commercial Banks. Effective implementation of risk management needs to be supported by an integrated Risk Management Framework (RMF) which covers Risk Management Governance, Risk Management Process and Risk Management Tools. The RMF is in line with the Bank’s vision, mission and business strategy.

250


Risk Management Governance A robust governance structure is essential to ensure the effectiveness and consistency of Risk Management Framework implementation of the framework of the Enterprise Wide Risk Management. The Board of Commissioners and the Board of Directors of the Bank, in accordance with their responsibilities, continuously oversees, monitors and manages the risks faced by the Bank as well as developing a Risk Management culture at all levels of the organization to ensure that all working units understand the strategy, the level of risks taken, and the Bank’s Risk Management framework. In implementation, the Board of Commissioners is assisted by the Risk Oversight Committee (ROC) which is one of the committees of the Board of Commissioners with responsibility to review all risk areas and analyse other areas related to risk, its mitigating controls and as well as potential losses.

The Board of Commissioners delegates authority to Board of Directors to implement Risk Management framework. To support the implementation of effective Risk Management, Board of Directors formed various committees, including the Risk Management Committee (RMC).

Risk Management Process The Bank has implemented the principle of the Three Lines of Defense Approach in monitoring, controlling, and managing risks. First Line of Defence Business Units serve as the first line of defence and are responsible for identifying, evaluating, controlling, and mitigating the risks in business. The Senior Management and the Risk Management Committee play an important role in ensuring the overall business units functions effectively functions as the “First Line of Defence” to develop a risk and control environment as part of routine operational activities. Second Line of Defence An independent Risk Management Division and Compliance Division act as key units in constructing second line of defence as an independent monitoring function. Generally, the second line of defence is responsible for setting the limits, guidance and directions through development of policies, review and approval of risk limits, as well as ensuring compliance with all regulations of Bank Indonesia and other authorities.

Risk

Appetite Medium Very Low Nil Low Very Low Nil

Strategic Compliance

Medium Nil

Based on Business Plans and Risk and Reward Criteria Very low tolerance for Treasury losses No tolerance for liquidity shortfalls Low tolerance for operational risk losses Low tolerance for legal risk Ensure that the highest ethical and performance standards are followed by all staff all the time Willingness to commit capital to strategic initiatives Zero tolerance for regulatory breaches

In accordance with the implementation of Pillar II of Basel II in Indonesia, the Bank has developed a method to implement the Internal Capital Adequacy Assessment Process (ICAAP). The purpose of this process is to ensure capital adequacy is appropriate to the Bank’s risk profile, outside of the risks included in Pillar I.


251


The execution of ICAAP in Bank QNB Indonesia is based on the belief that the calculation of capital adequacy is able to absorb potential losses from material risks. Thus, the determination of capital adequacy through the use of ICAAP method, aside from performing an assessment on the 3 (three) major risks included in Pillar I (Credit Risk, Market Risk and Operational Risk), also includes 7 (seven) other risks, namely Credit Concentration Risk, Interest Rate Risk in the Banking Book, Liquidity Risk, Compliance Risk, Strategic Risk, Legal Risk and Reputation Risk.


Bank QNB Indonesia sets the risk limits by taking into account the capability of the Bank’s capital to absorb risk exposures, manage previous losses, improve the skills of its human resources and comply with the prevailing rules and regulations. The procedures and determination of risk limits include accountability and clear levels of authority, adequate documentation of procedures and limit determination according to the Bank’s growth and development.

Approach


Credit Market Liquidity Operational Legal Reputation

Company Profile

Risk Management Tools in form of guideline for the application of RMF are stated in a Risk Appetite Statement (RAS) as well as policies and procedures.

The purpose of the Risk Appetite Statement is to support the Bank in implementing its strategy and fulfill the expectations of the shareholders. RAS does not aim to prevent risk-taking, but rather to ensure that the process of risk taking is: 1. In line with the objectives; 2. Comprehended at the appropriate level in the organization; and 3. Implementation of optimum risk return basis within the Group Risk Appetite limits.

Management Report

Risk Management Tools

The RAS elaborates the level and characteristics of risks taken by the Bank in order to realize its mission for its stakeholders. The Board of Directors and senior management are responsible to define RAS while ensuring that Risk Management framework has included detailed policies pertaining to limitations for the organization towards the Bank’s activities, which are consistent with RAS and the capability of the Bank.

2016 Performance

Third Line of Defence Internal Audit serves as the third line of defence by providing assurance and independent consultation activities. It is also designed to provide added value and improve the Bank’s operations as well as to assist the Bank in achieving its objectives.


Risk Management Focus in 2016 In 2016, Risk Management focused on: 1. Review and improvement of Credit Processes to support future loan growth and more sound credit risk management. 2. Resolution of NPL and AYDA (foreclosed assets). 3. Improvement of human resources capability via on the job training and formal courses as well as employee ethical standard through several ethical programs. 4. Implementation of Basel III Liquidity Coverage Ratio (LCR) and preparation of Net Stable Funding Ratio (NSFR) for 2018. 5. Improvement of Contingency Funding Plan (CFP) policy including Liquidity Business Continuity Management (BCM). 6. Strengthen control of information security through penetration test of Bank’s critical system.

Risks Profile and Mitigation Measures Credit Risk Credit Risk is managed through the establishment of a series of policies and processes encompassing credit acceptance criteria, origination and credit approval, pricing, monitoring, management of nonperforming loans and portfolio management. Every credit is approved by an authorised credit authority. Authorised personnel are appointed based on their personal and professional qualifications as well as experience and competence.

252


The Bank continuously monitors developments which may affect the Bank’s credit portfolio. Thus, precautions can be taken properly and quickly in the event of decreased credit quality. The review on exposure for large debtors, as well as stress tests on the foreign currency portfolio and the changes of interest has also been carried out. The processes are conducted periodically to anticipate the possibility of the depreciation in the quality of all credit portfolios as a result of changes in economic conditions. The Bank also determines guidelines for Client Acceptance Criteria, Economy Sectors, and other limits to avoid risk concentration on certain sectors. After implementation, the Bank continues to review and improve the process and method of credit risk management, including carrying out refinement of main credit policies and program product structure. Economic growth slowdown in 2016 has impacted, directly and indirectly, to decrease in debtor’s income. Due to this, the Bank has experience increase in credit risk, most notably NPL. However, this is mitigated by increase in provision sufficiency and on the other side increase in AYDA (foreclosed assets). To support the mitigation, Special Asset Management (SAM) unit has been reorganized to increase the independency as well as efficiency in managing NPLs and AYDA.

Market Risk Market Risk Management aims to identify, control, and manage the market risk exposures within acceptable parameters, as well as maximise the risk return basis. Market risk is managed through comprehensive policies and work procedures which include structural restrictions or limits or guidelines that are designed to control exposures in accordance with the Bank’s risk appetite. These limits or guidelines include notional, DV01, and Net Interest Income (NII) Sensitivity. Market risk limits are allocated on a bank-wide basis and are monitored and reported by the Risk Management Division on daily basis. Management Action Triggers (MAT) help to prompt the management when the risk level increases and enable continuous reviews. The Risk Management Division is responsible for the identification, measurement, supervision, and control of Bank QNB Indonesia’s market risk based on the framework approved by Asset and Liability Committee (ALCO). The Committee serves as the highest forum of senior management to determine the policies and decisions related to the management of market and liquidity risk. In addition, the Risk Management Committee (RMC) reviews and approves the decisions of ALCO, which are expressed in the form of policies or procedures.

253




The implementation of Operational Risk Management framework is comprehensively conducted to ensure that operational risk control is balanced. All business lines and supporting functions must identify factors which cause operational risks over product activities, process, services, organization, and information systems. Furthermore, all business lines and supporting functions must acknowledge, measure, analyze, monitor, and report operational risks through the documentation of all operational risk incidents periodically and in a timely manner.


To complement the framework, both market risk and liquidity risk are well measured and controlled in normal as well as abnormal (stress) scenarios. Aside from improving the performance of work scheme of liquidity risk management, the Bank developed Contingency Funding Plans which function as guidelines for funding

Operational Risk In managing Operational Risk, the Bank determines the most appropriate mitigation approach and strategy in order to optimally balance Operational Risk exposure, effectiveness of control mechanisms, and the level of risk acceptable to the Bank. This is conducted through comprehensive and consistent implementation of the Operational Risk Management Framework and via adjustment to the specific risks of all existing business processes.

Company Profile

Interest Rate Risk The Interest Rate Risk is the potential loss that occurs as the result of the movement of market interest rate opposite to the Bank’s transactions or positions that contain interest rate risk. In managing interest rate risk, the Bank has developed the DV01 approach and NII Sensitivity approaches to be in line with the International Best Practice. The Bank manages its interest rate risk by utilising the NII Sensitivity approach and Repricing Gap analysis for overall bank portfolio and DV01 in the level of Bonds portfolio.

Bank manages liquidity risk daily through analysis on the difference of liquidity maturity and liquidity ratios. A liquidity gap analysis is used to provide insights related to the differences in cash inflows and outflows each day. It is managed centrally by the Treasury Unit which has direct access to and authorisation for interbank, large customer (institutional) and other market professionals in the effort of assisting lending and funding activities.

scenarios in case of crisis. Liquidity Cash Flow Projection report has been enhanced in order to better reflect the actual condition. The development of this report involves all related units, hence the report can be used to manage day-to-day liquidity.

Management Report

b.

Liquidity Risk Asset and Liability Committee (ALCO) acts as the highest forum of senior management to monitor the Bank’s liquidity conditions. ALCO is responsible for determining the policies and strategies related to the Bank’s assets and liabilities to be in line with the risk management principles of prudence and the prevailing regulations. The limit framework and other assumptions used to measure risks have been approved by the Risk Management Committee (RMC) and reported periodically in ALCO.

2016 Performance

Bank QNB Indonesia faces two categories of market risks, which are: a. Exchange Rate Risk The Exchange Rate Risk appears in the balance sheet, commitments and contingencies (off-balance sheet), in both the assets and liabilities, arising from foreign currency transactions. The Bank measures the exchange rate risk to observe the impacts of exchange rate changes on the Bank’s earnings and capital. To manage and mitigate the exchange rate risk, a more conservative limit of net foreign exchange position is determined in addition to the 20% limit of capital set by the regulators.


Risk Management Division is also responsible for providing detailed descriptions of Operational Risk to Risk Committees at both the Board of Commissioner and the Board of Director levels. In addition, each working unit head has to support the operational risk monitoring process in order to provide an effective working performance. Development and improvement process of Business Continuity Management (BCM) is a critical for business resilience. In order to achieve this, the Bank continuously improves and conducts periodic test for BCM activities, including fire drill, alternate site test, disaster recovery test for critical applications, and others. Strategic and Reputation Risk The management of Strategic Risk covers each risk caused by the formulation and inadequate implementation of strategies; whereas the management of Reputation Risk involves managing matters that are related to the trust between the Bank and its customers and society. In 2016, the Strategic Risk was Moderate. The Bank continues to review its strategic plans to be in line with the Bank’s vision and mission, as well as the dynamic development of the economy.

254


In addition, the reputation risk of the Bank also improved in 2016 due to the changes in institution and products and services, the improvement in Company’s name or rebranding, as well as the relocation of the main and operational offices. The frequency of negative publicity against the Bank was minimal and did not impact materially. In addition, the Bank’s reputation is also supported by the strong reputation of the parent company which has sound ratings from reputable Credit Rating companies. Legal and Compliance Risk Legal Risk occurs as the result of inadequate juridical aspects, which among others caused by lawsuit and the absence of supporting laws and regulations, whereas Compliance Risk arises as the result of the failure in complying with the Laws and regulations applied in Republic of Indonesia as well as Bank’s internal regulations. Legal and Compliance risks are managed by the Legal Division and Compliance Division; and important findings regarding the two risks are reported to the Board of Commissioners and Board of Directors through the Risk Oversight Committee and Risk Management Committee. During 2016, Legal Risk was considered low. Legal decisions that have been received by the

Bank did not significantly affect the Bank’s capital and performance. In addition, Bank QNB Indonesia also utilizes external law firms to provide legal advice on various agreements including credit agreements and collateral arrangements.

Evaluation on Risk Management Effectiveness An evaluation on the effectiveness of Risk Management Framework (RMF), especially on the implementation of the Three Lines of Defence, is essential to keep the RMF in line with the Bank’s vision, mission, and strategy. Evaluation and reviews of the RMF are conducted both internally and externally. Risk Oversight Committee, as the highest risk committee, and Audit Committee serve as the internal reviews which responsible in the review of policies and implementation of RMF. The Committees also provide input and recommendations to the Board of Commissioners as part of the oversight functions. Internal audit, on a regular basis, reviews and audits the implementation of risk management based on the principle of risk-based auditing, with the aim not only to ensure internal control, but also to continuously improve risk management. Externally, the evaluation of risk management is performed by the external auditor and regulator.

2016 Performance

Management Report

Company Profile




255



Table 1.a. Quantitative Disclosure on the Capital Structure of Public Bank (In million Rp) December 31, 2016

December 31, 2015

Capital Component Consolidated

Bank

Consolidated

Bank

Capital ComPONENT I

Core Capital

3,185,137

-

2,086,745

-

2,189,287

-

2,189,287

-

1,209,131

-

(56,872)

-

-

-

-

-

(213,281)

-

(45,670)

-

-

-

-

-

136,167

-

1,138,543

-

136,167

-

1,138,543

-

-

-

-

-

3. Factors Reducing Supplementary Capital

-

-

-

-

Factors Reducing Core Capital and Supplementary Capital

-

-

-

-

Securitisation Exposure

-

-

-

-

D

Additional Supplementary Capital that Satisfies

-

-

-

-

E

Additional Supplementary Capital Allocated to Anticipate Market Risks

-

-

-

-

A

1. Paid-up Capital 2. Additional Capital Reserves 3. Innovative Capital 4. Factors Reducing Core Capital 5. Non-Controlling Interests

B

Supplementary Capital 1. Upper Tier 2 2. Lower Tier 2 Maximum 50% of Core Capital

C

II

Total Core Capital and Supplementary Capital (A+B-C)

3,321,304

-

3,225,288

-

III

Total Core Capital, Supplementary Capital, and Additional Supplementary Capital Allocated to Anticipate Market Risk (A+B-C+E)

3,321,304

-

3,225,288

-

IV

Risk Weighted Assets (RWA) for Credit Risks

19,002,657

-

19,203,194

-

V

Risk Weighted Assets (RWA) for Operational Risks

1,171,272

-

719,834

-

VI

Risk Weighted Assets (RWA) for Market Risks

8,179

-

8,534

-

16.46%

-

16.18%

-

A B VIII

256

Standardized Approach Internal Model

Ratio of Minimum Capital Allocations for Credit Risks, Operational Risks and Market Risks [III : (IV+V+VI)]


2016 Performance

Table 1.b. Quantitative Disclosure on the Capital Structure of Foreign Bank (In million Rp) Capital Component

December 31, 2015

Capital Component

I A

Operational Funds 1. Operational Funds

2,189,287

5,395

4,395

270,515

115,469

Income (Loss) Calculated for the Current Year (50%)

(650,333)

156,045

C

Capital Paid in Advance Securitisation Exposure

1,700,510

964,950

D

Other comprehensive income: losses from equity investment for available for sale category (100%)

32

-

E

Other comprehensive income: Gain from equity investment for available for sale category (45%)

-

-

F

Revaluation of Fixed Assets (45%)

-

-

G

Differences between allowance for losses and impairment losses of productive assets

(81,937)

(308,212)

H

Allowance for Losses of NonProductive Assets

(10,481)

-

I

Differences on Adjustment of Fair Value of Financial Instruments in the Trading Book

-

-

J

General Reserves of Productive Assets (max. 1.25% from RWA)

136,168

173,593

K

Capital Reduction Factors Securitisation Exposure

(237,851)

(70,239)

3,321,304

3,225,288

19,002,657

19,203,194

1,171,272

719,834

8,179

8,534

-

-

B

Reserves 1. General Reserves 2. Appropriated Reserves Income (Loss) Calculated from the Previous Years (100%)

IV

Risk Weighted Assets (Rwa) for Operational Risks

V

Risk Weighted Assets (Rwa) for Market Risks B

Standardized Approach Internal Model

Ratio Of Minimum Capital Allocations for Credit Risks, Operational Risk and Market Risks [Ii : (Iii + Iv + V)]

-

-

16.46%

16.18%



Risk Weighted Assets (Rwa) for Credit Risks


III


Foreign Bank Capital (Total of a Up To J - K)

-

Company Profile

II

A

Management Report

2,189,286

2. Paid-up Capital

VI

December 31, 2016

257


Table 2.1.a Disclosure of Net Claims per Region - Bank Unconsolidated (In million Rp) December 31, 2016 No

Net Claims per Region

Portfolio Category

Jakarta

Sumatera

East Region

Java

Total

1. Claims against Government

4,437,051

-

-

-

4,437,051

2. Claims against Public Sector Entities

-

-

-

-

-

3. Claims against Multilateral Development

-

-

-

-

-

66,792

14,023

-

-

80,815

4,381

3,567

2,169

9,773

19,889

1,247,210

716

9,098

514,143

1,771,167

4. Claims against Banks

5. Collateralized Housing Loans

6. Collateralized Commercial Property Loans

-

-

-

-

-

767,604

163,068

63,706

99,818

1,094,197

10,287,335

1,431,174

1,158,728

1,972,321

14,849,558

1,087,615

73,589

28,999

263,958

1,454,161

17,897,988

1,686,138

1,262,700

2,860,013

23,706,838

7. Loans to Employees/Pensioners

8. Claims agaist MSMEs and Retail Portfolio 9. Claims against Corporations

-

10. Mature Claims 11. Other Assets Total

Table 2.2.a. Disclosure of Net Claims by Remaining Contract Time - Bank Unconsolidated No

December 31, 2016

Portfolio Category

Net Claims by Remaining Contract Time ≤ 1 year

> 1 - 3 years

> 3.5 years

> 5 years

Non-Contractual


4,437,051

-

-

-

2. Claims against Public Sector Entities

-

-

-

-

-

-

-

3. Claims against Multilateral Development Banks and International Institutions 4. Claims against Banks

-

1,318

3,581

244,814

-

-

-

80,815

-

191,711

353,633

981,008

-

1,771,167

-

-

-

-

-

-

98,665

222,595

242,075

530,861

-

1,094,197

2,735,305

720,834

953,588

10,439,831

-

14,849,558

8. Claims agaist MSMEs and Retail Portfolio 10. Mature Claims

258

-

644

7. Loans to Employees/ Pensioners

Total

-

-


11. Other Assets

4,437,051

-

14,346


9. Claims against Corporations

80,815

-

Total

1,215,330

96,793

71,430

70,608

8,813,298

1,235,514

1,635,073

12,022,952


-

-

19,889

-

-

1,454,161

-

23,706,838

2016 Performance

December 31, 2015 Net Claims per Region Jakarta

Sumatera

East Region

Java

Total

-

-

-

4,408,820

231

-

-

-

231

-

-

-

-

-

72,605

6,559

-

24,995

104,159

13,845

8,124

3,372

8,986

34,327

1,420,430

1,310

-

530,903

1,952,642

-

-

-

-

124,212

210,982

162,549

1,170,785

12,446,225

1,463,079

1,252,163

2,582,331

17,743,798

-

-

-

-

-

229,783

50,857

22,145

40,102

342,887

19,264,981

1,654,141

1,488,663

3,349,866

25,757,649 Management Discussion and Analysis

December 31, 2015 Net Claims by Remaining Contract Time ≤ 1 year

> 1-3 years

> 3.5 years

> 5 years

Non-Contractual

Total

-

-

-

-

4,408,820

69

-

69

93

-

231

-

-

-

-

-

104,159

-

-

-

-

2,564

8,590

9,907

13,266

-

34,327

220,715

360,886

215,300

1,155,741

-

1,952,642

-

-

-

-

-

-

406,750

340,202

200,153

223,680

-

1,170,785

8,035,210

1,558,270

3,968,785

4,181,533

-

17,743,798

-

-

-

-

-

-

282,201

175

1,381

59,130

-

342,887

13,460,488

2,268,123

4,395,595

5,633,443

-

25,757,649

259


104,159


4,408,820


Company Profile

673,042

Management Report

4,408,820


Table 2.3.a. Disclosure of Net Claims based on Economic Sector - Bank Unconsolidated (In million Rp)

Economic sector

No

Claims against Multilateral Development Banks and International Institutions

Claims against Public Sector Entity

Claims against Government

Claims against Banks

Report Date Position in 2015

Collateralized Housing Loans

1. Agriculture, Menial Labor and Forestry

-

-

-

-

-

2. Fisheries

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

3. Mining and Extractive Industries

-

4. Processing Industry

-

5. Power, Gas and Water

-

6. Construction

-

-

-

4,111

-

22

-

6,743

-

-

8. Claims agaist MSMEs and Retail Portfolio

-

-

-

9. Transportation, Warehousing and Communications

-

-

-

-

4,437,051

80,815

-

-

114

-

7. Large Scale Trading and Retailing

-

-

11. Real Estate, Leasing, and Corporate Services

-

-

-

12. Government Administration, Defence and Mandatory Social Security

-

-

-

-

-

13. Education

-

-

-

-

-

14. Health and Social Activities

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

8,899

-

-

80,815

19,889

10. Financial Intermediaries

15. Social, Cultural, Entertainment, and Other Personal Services 16. Hospitality 17. International Organisations and Other Extra International Organisations

-

18. Indeterminate Activities

-

19. Non Business Field

-

20. Miscellanous

4,437,051

Total

-

-

-

-

-

-

-

-

-

Table 2.4.a. Disclosure of Claims and Reserves by Region - Bank Unconsolidated (In million Rp) No

December 31, 2016 Portofolio Activity

Jakarta

2. Impaired Claims a. Outstanding b. Mature 3. Reserves for Impairments (CKPN) Unconsolidated 4. Reserves for Impairments (CKPN) Consolidated 5. Written-off Claims


Sumatera

East Region

Java

Total

1,579,362

1,247,199

2,585,230

18,287,913

677,802

8,287

49,340

54,974

790,403

444,489

11,114

4,157

3,579

463,339

614,665

5,754

22,569

24,612

667,600

57,894

2,633

721

7,877

69,125

152,050

-

-

-

152,050

12,876,122

1. Claims

260

Region

2016 Performance

Collateralized Commercial Property Loans

Claims against MSMEs and Retail Portfolio

Loans to Employees/ Pensioners

Claims against Corporations

Mature Claims

Other Assets

7,801

608,912

-

-

-

-

2,095

128,529

-

-

5,059

670,525

-

-

124,566

3,621,962

-

-

-

623,941

-

-

44,288

1,024,645

-

-

263,556

2,525,837

-

-

13,921

812,959

-

-

34,910

1,073,728

-

-

-

37,132

-

57,783

-

-

-

554,723

-

168,670 344,795

-

-

-

-

-

-

47,064

3,079,684

-

-

-

-

-

-

-

-

-

-

2,875

-

-

-

-

-

931

70,302

-

-

-

-

-

23,489

448,927

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

522,799

22,265

-

1,094,197

14,849,558

-

-

-

-

-

-

534 1,771,167

-

-

-

1,454,161

-

1,454,161


-


137,340

-

-

843

607,530

Company Profile

-

Management Report

-

December 31, 2015 Net Claims per Region Sumatera

East Region

Java

Total

1,796,725

1,466,517

3,284,768

20,830,044

1,172,178

8,458

165,693

294,246

1,640,575

535,750

29,835

3,391

10,548

579,524

27,112

4,457

293

824

32,686

5,932

906

608

1,608

9,054

49

-

-

-

49

14,282,034



Jakarta

261


Table 2.5.a. Disclosure of Claims and Reserves by Economic Sector - Bank Unconsolidated (In million Rp)

No

Economic Sector

Reserves for Impairments (CKPN) Unconsolidated

Impaired Claims

Claims

Outstanding

Mature

Reserves for Impairments (CKPN) Consolidated

Written-off Claims

Report Date Position in 2015 1. Agriculture, Menial Labor and Forestry

618,050

4,309

1,423

3,906

27

-

2. Fisheries

130,067

-

-

-

1

-

3. Mining and Quarrying

670,806

-

-

-

106

-

3,959,680

268,660

107,898

145,824

1,695

-

618,938

-

-

-

247

-

6. Construction

1,915,477

71,643

257,960

297,674

175

-

7. Wholesale and Retail Trade

2,992,351

96,677

79,319

56,220

12,756

-

8. Hotels and Restaurants

1,237,617

125,761

-

79,180

213

-

9. Transportation, Warehousing and Communications

1,133,383

71,925

2,000

24,804

2,943

-

10. Financial Intermediaries

187,066

49,520

-

49,520

26

-

11. Real Estate, Leasing, and Corporate Services

3,702,522

3,414

1,517

663

1,982

-

-

-

-

-

-

-

3,187

-

1,676

-

318

-

70,821

-

-

-

2

-

480,431

38,871

-

9,809

2,818

-

16. Private Households Employment

-

-

-

-

-

-

17. International Organisations and Other Extra International Organisations

-

-

-

-

-

-

18. Indeterminate Activities

-

-

-

-

-

-

19. Not classifiable by economic activity

-

-

-

-

-

-

567,516

59,623

11,546

-

45,816

-

18,287,913

790,403

463,339

667,600

69,125

-

4. Processing Industry 5. Electricity, Gas, and Water

12. Government Administration, Defence, and Compulsory Social Security 13. Education 14. Health and Social Activities 15. Social, Cultural, Entertainment, and Other Personal Services

20. Miscellaneous Total

262


2016 Performance

Table 2.6.a. Disclosure of Changes in Impairment Reserves - Bank Unconsolidated (In million Rp)

No

Portfolio Category

December 31, 2016 CKPN Individual

December 31, 2015

CKPN Collective

CKPN Individual

CKPN Collective

4,168

8,179

Allocation (Recovery) of Impairment Reserves in the Current Period - Net

786,963

83,880

28,518

21,538

a.

Allocation of Impairment Reserves in Current Period

787,383

84,049

28,528

21,983

b.

Recovery of Impairment Reserves in Current Period

-

-

(10)

(445)

(152,050)

(23,808)

-

(20,663)

(420)

-

-

-

667,599

69,126

32,686

9,054

2.

3.

Impairment Reserves used to Cover Write-Offs in Current Period

4.

Other Allocation (Recovery) in Current Period Closing Impairment Reserves Balance

Company Profile

9,054

Opening Impairment Reserves Balance

Management Report

32,686

1.

Management Discussion and Analysis Corporate Governance Corporate Social Responsibility


263


Table 3.1.a. Diclosure of Net Claims based on Portfolio Category and Rating - Bank Unconsolidated (In million Rp) December 31, 2016

Rating Agencies

Long-Term Rating

Standard and Poor’s Fitch Rating No

Portfolio Category

Moody’s PT Fitch Ratings Indonesia

AAA

AA+ s.d AA-

A+ s.d A-

BBB+ s.d BBB-

BB+ s.d BB-

PT ICRA Indonesia PT Pemeringkat Efek Indonesia 1.


-

-

-

-

-

2.

Claims against Public Sector Entities

-

-

-

-

-

3.


-

-

-

-

-

4.


21,891

49,664

9,260

-

-

5.


-

-

-

-

-

6.


-

-

-

-

-

7.


-

-

-

-

-

8.


-

-

-

-

-

9.


-

-

-

-

-

10. Mature Claims

-

-

-

-

-

11. Other Assets

-

-

-

-

-

21,891

49,664

9,260

-

-

Total

264


2016 Performance

December 31, 2016

Management Report

Net Claims Short Term Rating

Less than B-

A-1

A-2

A-3

Less than A-3

Unrated

Total

Company Profile

B+ s.d B-

-

-

-

4,437,051

4,437,051

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

80,815

-

-

-

-

-

-

19,889

19,889

-

-

-

-

-

-

1,771,167

1,771,167

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1,094,197

1,094,197

-

-

-

-

-

-

14,849,558

14,849,558

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1,454,161

1,454,161

-

-

-

-

-

-

23,626,023

23,706,838


265


-


-


-


(In million Rp) December 31, 2015

Rating Agencies

Long-Term Rating

Standard and Poor’s Fitch Rating No

Portfolio Category

Moody’s PT Fitch Ratings Indonesia

AAA

AA+ s.d AA-

A+ s.d A-

BBB+ s.d BBB-

BB+ s.d BB-

PT ICRA Indonesia PT Pemeringkat Efek Indonesia 1.


-

-

-

-

-

2.


231

-

-

-

-

3.


-

-

-

-

-

4.


172

43,847

54,211

498

-

5.


-

-

-

-

-

6.


-

-

-

-

-

7.


-

-

-

-

-

8.


-

-

-

-

-

9.


-

-

-

-

-

10. Mature Claims

-

-

-

-

-

11. Other Assets

-

-

-

-

-

403

43,847

54,211

498

-

Total

266


2016 Performance

December 31, 2015 Net Claims Short Term Rating

Management Report

B+ s.d B-

Less than B-

A-1

A-2

A-3

Less than A-3

Unrated

Total

Company Profile

-

-

-

-

4,408,820

4,408,820

-

-

-

-

-

-

-

231

-

-

-

-

-

-

-

-

-

-

-

-

-

-

5,431

104,159

-

-

-

-

-

-

34,327

34,327

-

-

-

-

-

-

1,952,642

1,952,642

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1,170,785

1,170,785

-

-

-

-

-

-

17,743,798

17,743,798

-

-

-

-

-

-

-

-

-

-

-

-

-

-

342,887

342,887

-

-

-

-

-

-

25,658,690

25,757,649


-


-



267


Table 3.2.a. Disclosure of Counterparty Credit Risk: Derivative Transactions (In million Rp) December 31, 2016 No

Notional Amount

Portfolio Activity

> 1 year ≤ 5 year

≤ 1 year

Derivative Claims

> 5 year

Net Claims Before MR

Derivative Obligations


MRK

Bank Unconsolidated 1. Interest Rate 2. Foreign Exchange

-

-

-

-

-

-

-

-

4,645,467

-

-

550

12,890

550

-

550

-

-

-

-

-

-

-

-

4,645,467

-

-

550

12,890

550

-

550

3. Others Total

Table 3.2.b.1 Disclosure of Counterparty Credit Risk: Repo Transactions - Bank Unconsolidated (In million Rp)

No

Portfolio Activity

December 31, 2016 Fair Repo SSB Value

Repo Obligations

RWA Before MR

Net Claims

Bank Unconsolidated 1.


-

-

-

-

2.


-

-

-

-

3.


-

-

-

-

4.

Claims against Bank

-

-

-

-

5.

Claims agaist MSMEs and Retail Portfolio

-

-

-

-

6.


-

-

-

-

Total

-

-

-

-

Table 3.2.c.1. Disclosure of Counterparty Credit Risk: Repo Transactions - Bank Unconsolidated (In million Rp) No

Portfolio Activity

December 31, 2016 Net Claims

MRK Scores

Net Claims After MRK

RWA After MRK

Bank Unconsolidated 1.


471,350

-

471,350

-

2.


-

-

-

-

3.


-

-

-

-

4.

Claims against Bank

-

-

-

-

5.

Claims agaist MSMEs and Retail Portfolio

-

-

-

-

6.


-

-

-

-

471,350

-

471,350

-

Total

268


2016 Performance

December 31, 2015 Notional Amount ≤ 1 year

> 5 year

Derivative Claims

Derivative Obligations



MRK

-

-

-

-

-

-

-

-

543,353

-

-

2,921

661

2,890

-

2,890

-

-

-

-

-

-

-

-

543,353

-

-

2,921

661

2,890

-

2,890

Company Profile

December 31, 2015 Repo Obligations

Fair Repo SSB Value

RWA Before MR

Net Claims

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-


Net Claims After MRK

MRK Scores


-

December 31, 2015 Net Claims

Management Report

> 1 year ≤ 5 year

RWA After MRK

-

269,117

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

269,117

-

269,117

-



269,117

269


Table 4.1.a. Disclosure of Net Claims by Risk Weighting after Calculating Effect of Credit Risk Mitigation - Bank Unconsolidated (In million Rp) December 31, 2016 No

Portfolio Category

Net Claims after Calculating Effect of Credit Risk Mitigation 0%

A

Balance Sheet Exposure

1.


2.


3.


4.


5.


6.


7.

Loans to Employees/Pensioners

8.


9.


10. Mature Claims 11. Other Assets

Total Balance Sheet Exposure B

Commitment/Contingency Exposure in Administrative Account Transactions

1.


2.

Claims against Public Sectors Entities

3.


4.


5.


6.


7.


8.


9.


10. Mature Claims Total Exposure of TRA C

Counterparty Credit Risk

1.


2.

Claims against Public Sectors Entities

3.


4.


5.


6.

Claims against Corporations Total Exposure of Counterparty Credit Risk

270


20%

40%

35%

4,437,051

-

-

-

-

-

-

-

-

-

80,815

-

-

-

-

-

-

-

-

-

-

-

50%

45%

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1,771,167

-

-

Others

150%

-

-

-

-

-

-

-

-

-

-

-

19,889

-

-

-

-

-

-

-

-

-

-

1,094,197

-

-

-

- 14,849,558

-

-

-

-

-

-

-

-

1,454,161

-

5,891,212

80,815

-

19,889

-

-

-

-

-

-

-

-

-

-

-

-

-

100%

-

-

-

-

75%

-

-

-

-

-

-

-

-

-

-

-

1,094,197 16,620,725

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

134,813

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

209,547

-

-

1,206,473

37,015

-

-

-

1,551,036

37,015

-

-

-

-

-

-

-

-

-

550

203

-

-

-

-

1,062

-

-

-

-

-

-

-

14,569

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

15,631

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

550

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2016 Performance

December 31, 2015 Net Claims after Calculating Effect of Credit Risk Mitigation 0%

16,163

1,666

7,947

961

1,767,267

156,211

20%

40%

35%

50%

45%

75% -

-

-

-

-

104,159

-

-

-

-

34,327

-

-

-

-

-

-

-

-

-

-

-

231

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

14,478,912

1,283,322

-

-

-

-

-

-

-

-

-

-

-

-

-

1,912,592

23,797

342,887

-

-

-

-

18,987,021

1,536,204

4,751,707

104,390

34,327

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

398

-

-

-

-

-

-

-

-

-

-

550

44

-

-

550

-

-

-

297,457

23,797

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2,921

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2,921

-

-

-

-

-

1,536,209

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

584

47

-

-

-

-

-

-

-


-

-

584

47

271


3,008,449

-

1,283,322

-

-

-

-

-

- 16,041,531

-

-

-

15,086

-

70,247

-

-

-

- 17,743,798

878,089

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

156,211

-

-

-

1,170,785

961

1,952,642

-

-

2,596,237

-

-

-

-

-

-

1,666

12,014

-

-

-

1,952,642

-

20,831

-

-

-

-

-

-

-

14,688

-

-

-

-

112,550

-

-

-

-

-

-

-

-

-

4

-

-

-

46

-

-

-

-

-

-

- 19,202,610

-

-

-

-

-

-

-

-

-

1,170,785 19,696,440

-

-

44

-

721

298,941

-

-

-


70,247

-

-


804,140

-

Capital Charge

RWA

Others

150%

Company Profile

-

4,408,820

100%

Management Report

Capital Charge

RWA


Table 4.2.a. Disclosure of Net Claims and Credit Risk Mitigation Techniques Bank Unconsolidated (In million Rp)

No

December 31, 2016

Portfolio Category

A Balance Sheet Exposure


2. Claims against Public Sector Entities 3. Claims against Multilateral Development Banks and International Institutions 4. Claims against Banks

Portion Secured by Net Claims

Collateral

Guarantee

4,437,051 -

-

80,815

Credit Insurance

Portion Unsecured

Others

-

-

-

-

-

-

-

-

-

4,437,051 -

-

-

-

19,889

-

1,771,167

-

-


22 3,900

-

-

-

-

-

-

-

-

8. Claims against MSMEs and Retail Portfolio

1,094,197

22,011

-

-

-

1,072,186

14,849,558

370,646

-

-

-

-

-

-

14,478,912

-

-

1,454,161

-

-

-

-

23,706,838

396,579

-

-

-

23,310,259

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-


7. Loans to Employees/Pensioners


10. Mature Claims 11. Other Assets

Total Balance Sheet Exposure B

Commitment/Contingency Exposure in Administrative Account Transactions


2. Claims against Public Sectors Entities 3. Claims against Multilateral Development Banks and International Institutions 4. Claims against Banks


203

-

80,815 19,867 1,767,267 -

1,454,161

203

134,813

-

-

-

-

-

-

-

-

-

-

210,609

1,258,058

-

-

-

-

-

-

-

-

1,258,058

-

1,603,683

-

-

-

-

1,603,683

471,350

-

-

-

-

-

-

-

-

471,350

-

3. Claims against Multilateral Development Banks and International Institutions

-

-

-

-

-

-

-

-

-

-

-

-

5. Claims against MSMEs and Retail Portfolio

-

-

-

-

-

-

-

-

-

-

471,350

-

-

-

-

471,350

25,781,871

396,579

-

-

-

25,385,292

6. Collateralized Commercial Property Loans 7. Loans to Employees/Pensioners

8. Claims against MSMEs and Retail Portfolio 9. Claims against Corporations

10. Mature Claims

Total Exposure of TRA C

Counterparty Credit Risk


2. Claims against Public Sectors Entities

4. Claims against Banks


Total Exposure of Counterparty Credit Risk Total (A+B+C)

272


210,609

134,813 -

-

-

-

2016 Performance

December 31, 2015 Portion Secured by Net Claims

Guarantee

Portion Unsecured

Others

4,408,820

-

-

-

-

231

-

-

-

-

-

-

-

-

-

104,159

-

-

-

-

34,327

-

-

-

-

1,952,642

-

-

-

-

4,408,820 231 104,159 34,327 1,952,642

-

-

-

-

-

-

-

-

1,170,785

17,743,798

1,702,267

-

-

-

-

-

-

16,041,531

-

-

342,887

-

-

-

-

25,757,649

1,702,267

-

-

-

24,055,382

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

112,550

-

-

-

-

721 112,550

-

-

-

-

-

298,941

-

-

-

-

298,941

2,596,237

-

-

-

-

-

-

-

-

2,596,237

3,008,449

-

-

-

-

3,008,449

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2,921

-

-

-

-

-

-

-

-

2,921

-

-

-

-

-

2,921

-

-

-

-

2,921

28,769,019

1,702,267

-

-

-

27,066,752

-

-

-

273



-


-

342,887 Management Discussion and Analysis

-

-

Company Profile

1,170,785

721

Management Report

Collateral

Credit Insurance


Table 6.1.1. Disclosure of Assets on Bank Balance Sheet Exposure - Bank Unconsolidated (In million Rp) December 31, 2016 Portfolio Category

No 1.


2.

RWA Before MRK

Net Claims

December 31, 2015 RWA After MRK

RWA Before MRK

Net Claims

RWA After MRK

4,437,051

-

-

4,408,820

-

-


-

-

-

231

46

46

3.


-

-

-

-

-

-

4.


80,815

16,163

16,163

104,159

129,132

129,132

5.


19,889

7,956

7,947

34,327

11,648

11,648

6.


1,771,167

1,771,167

1,767,267

1,952,642

695,798

695,798

7.


-

-

-

-

-

-

8.


1,094,197

820,648

804,140

1,170,785

878,089

878,089

9.


14,849,558

14,849,558

14,478,912

17,743,798

17,743,498

16,041,531

-

-

-

-

-

-

1,454,161

-

1,912,592

342,887

-

297,457

23,706,838

17,465,492

18,987,021

25,757,649

20,607,121

19,202,611

10. Mature Claims 11. Other Assets Total

274


2016 Performance

Table 6.1.2. Disclosure of Exposure to Commitment/Contingency from Adminstrative Account Transactions - Bank Unconsolidated (In million Rp) December 31, 2016 Portfolio Category

No

RWA After MRK

RWA Before MRK

Net Claims

RWA After MRK

-

-

-

-

-

-

2.


-

-

-

-

-

-

3.


-

-

-

-

-

-

4.


-

-

-

-

-

-

5.


-

-

-

-

-

-

6.


-

-

-

-

-

-

7.


-

-

-

-

-

-

8.


531

398

398

-

-

-

9.


14,688

14,688

14,688

-

-

-

-

-

-

-

-

-

15,219

15,086

15,086

-

-

-

10. Mature Claims Total



Company Profile

1.

Management Report

RWA Before MRK

Net Claims

December 31, 2015



275


Table 6.1.3. Disclosure of Exposure Arising from Counterparty Credit Risk - Bank Unconsolidated (In million Rp) December 31, 2016 Portfolio Category

No

RWA Before MRK

Net Claims


RWA Before MRK

Net Claims

RWA After MRK

1.


-

-

-

-

-

-

2.

Publik Claims against Public Sector Entities

-

-

-

-

-

-

3.


-

-

-

-

-

-

4.

Claims against Bank

-

-

-

2,921

584

584

5.


-

-

-

-

-

-

6.


550

550

550

-

-

-

7.

Eksposur tertimbang dari Credit Valuation Adjustment (CVA)

-

-

-

-

-

-

550

550

550

2,921

584

584

Total

Table 6.1.4. Disclosure of Exposure to Settlement Risk - Bank Unconsolidated (In million Rp) No

December 31, 2016 Portfolio Category

1.

2.

276

RWA Before MRK

Net Claims


RWA Before MRK

Net Claims

RWA After MRK

-

-

-

-

-

-

a. Capital Charge 8% (5-15 days)

-

-

-

-

-

-

b. Capital Charge 50% (16- 30 days)

-

-

-

-

-

-

c. Capital Charge 75% (31-45 days)

-

-

-

-

-

-

d. Capital Charge 100% (more than 45 days)

Delivery versus payment

-

-

-

-

-

-

Non-delivery versus payment

-

-

-

-

-

-

Total

-

-

-

-

-

-


2016 Performance

Table 6.1.5. Disclosure of Securitisation Exposure (In million Rp) December 31, 2016 Portfolio Category

No

RWA Before MRK

Net Claims


RWA Before MRK

Net Claims

RWA After MRK

-

-

-

-

-

-

2.

Supporting Credit Facilities that do not Meet Requirements

-

-

-

-

-

-

3.

Liquidity Facilities that Meet the Requirements

-

-

-

-

-

-

4.

Liquidity Facilities that do not Meet the Requirements

-

-

-

-

-

-

5.

Purchase of Asset-backed that Meet the Requirements

-

-

-

-

-

-

6.

Purchase of Asset-backed that do not Meet the Requirements

-

-

-

-

-

-

7.

Securitisation exposure not covered by Bank Indonesia regulations on the application of prudent principles to asset securitisation by commercial banks

-

-

-

-

-

-

Total

-

-

-

-

-

-


Table 6.1.7. Disclosure of Total Credit Risks (In million Rp) December 31, 2016 Total rwa credit risks Total capital reduction factors

December 31, 2015

19,002,657

19,203,194

(237,851)

(70,238)

Company Profile

Supporting Credit Facilities that Meet the Requirements

Management Report

1.



277


Table 7.1. Disclosure of Market Risk using Standardized Method - Bank Unconsolidated (In million Rp) December 31, 2016 Bank

Risk Type

No

Consolidation

Capital Charge 1.

RWA

Capital Charge

RWA

Interest Rate Risks a. Specific Risks

-

-

-

-

b. General Risks

-

-

-

-

654

8,179

-

-

2.

Exchange Rate Risks

3.

Equity Risks *)

-

-

-

-

4.

Commodity Risks *)

-

-

-

-

5.

Option Risks

-

-

-

-

Total

-

-

-

-

*) For Bank which has subsidiaries with risk exposure

Table 7.2.a. Disclosure of Market Risk using Internal Model (Value at Risk/VaR) Bank Unconsolidated (In million Rp) December 31, 2016

Risk Type

No

Average VaR 1.

Interest Rate Risks

2.

Exchange Rate Risks

3.

Option Risks Total

Var at End Period

Maximum VaR

Minimum VaR

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Table 8.1.a. Disclosure of Quantitative Operational Risk - Bank Unconsolidated (In million Rp)

December 31, 2016 Risk Type

No

1.

278

Gross Income (Average of the Last 3 Years)

Capital Charge

Base Indicator Approach

768,312

115,247

1,171,272

Total

768,312

115,247

1,171,272


RWA

2016 Performance

December 31, 2015 Bank RWA

Capital Charge

RWA

-

-

-

-

-

-

-

-

682

8,534

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Management Report

Capital Charge

Consolidation


December 31, 2015 Average VaR

Var at End Period

Maximum VaR

Minimum VaR

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-


December 31, 2015 Capital Charge

RWA

383,911

57,587

719,834

383,911

57,587

719,834



Gross Income (Average of the Last 3 Years)

279


Table 9.1.a. Disclosure of Rupiah Maturities Profile - Bank Unconsolidated (In million Rp) December 31, 2016 No

Post

Maturity Balance ≤ 1 month

I

> 3 - 6 months

-

-

> 6 - 12 months

> 12 months

BALANCE SHEET A. Assets 1. Cash

46,344

2. Placements with Bank Indonesia 3. Placements with Other Banks 4. Securities 5. Loans

1,508,850 341 571,862 11,246,375

6. Other Receivables

471,900

7. Others

359,781

Total assets

1. Third-Party Funds 2. Funds from Bank Indonesia 3. Funds from Other Banks

1,147,135 471,900 359,781

247,507 1,153,981 -

746,134 -

1,595,025 -

324,355 6,604,100 -

1,401,488

746,134

1,595,025

6,928,455

15,093,446

7,824,858

5,354,329

585,806

-

1,328,453

-

64,508

3,500

-

-

-

-

12,890

-

216

-

385,528 -

5. Fund Borrowings

-

7. Miscellanous

341

-

3,534,351

4. Securities Issued 6. Other Liabilities

46,344 1,508,850

14,205,453

B. Liabilities

II

> 1 - 3 months

12,890 216

7,902,472

5,357,829

(4,368,121)

(3,956,341)

-

-

1. Commitments

1,068,913

2. Contingencies

12,010

Total Liabilities

15,492,080

Difference Between Assets and Liabilities on Balance Sheets

(1,286,627)

2,000 1,330,453

315,520 901,326

-

(584,319)

693,699

6,928,455

-

-

-

-

65,952

202,646

240,947

-

131,077

-

428,291

1,080,923

65,952

Difference Between Administrative Account Claims and Liabilities

(1,080,923)

Difference (IA-IB)+(IIA-IIB)

ADMINISTRATIVE ACCOUNT A. Administrative Account Claims 1. Commitments

-

2. Contingencies

-

Total Administrative Account Claims B. Administrative Account Liabilities

Total Administrative Account Liabilities

Cumulative Difference

280


3,801

278

202,646

134,878

241,225

436,222

(65,952)

(202,646)

(134,878)

(241,225)

(436,222)

(2,367,550)

(4,434,073)

(4,158,987)

(719,197)

452,474

6,492,233

-

(4,434,073)

(8,593,060)

(9,312,257)

(8,859,783)

(2,367,550)

7,931

2016 Performance

December 31, 2015 Maturity Balance > 12 months

> 6 - 12 months

Management Report

> 3 - 6 months

> 1 - 3 months

≤ 1 month

-

5,194

5,194

-

-

-

2,143,568

2,143,568

-

-

-

-

38,501

38,501

-

-

-

-

-

-

-

-

-

629,772

331,122

655,074

981,271

4,717,086 -

-

-

-

-

74,946

-

-

-

-

9,576,534

2,891,981

331,122

655,074

981,271

4,717,086

5,900,355

4,744,949

1,064,321

90,110

-

976

-

-

-

-

-

-

2,798,355

1,792,050

454,905

551,400

-

-

-

-

-

-

-

-

964,950

-

-

-

-

964,950 -

-

-

-

-

-

-

-

9,920,830

6,794,168

1,519,226

641,510

-

965,926

(344,296)

(3,902,188)

(1,188,104)

13,564

981,271

3,751,160

543,201

541,064

2,137

-

-

-

-

-

-

-

-

-

543,201

541,064

2,137

-

-

-

1,931,135

1,926,494

2,132

2,510

-

-

3,308

-

-

3,308

-

-

1,934,444

1,926,494

2,132

5,818

-

-

(1,391,243)

(1,385,430)

5

(5,818)

-

-

(1,735,538)

(5,287,618)

(1,188,099)

7,746

981,271

3,751,160

-

(5,287,618)

(6,475,716)

(6,467,970)

(5,486,698)

(1,735,538)


281


257,169


257,169


74,946

Company Profile

7,314,325


Table 9.2.a. Disclosure of Foreign Exchange Maturities Profile - Bank Unconsolidated (In million Rp) December 31, 2016 No

Post

Maturity Balance > 1 - 3 months

≤ 1 month I

> 3 - 6 months

> 6 - 12 months

> 12 months

BALANCE SHEET A. Assets 1. Cash 2. Placements with Bank Indonesia 3. Placements with Other Banks 4. Securities 5. Loans 6. Other Receivables 7. Others Total assets

4,917

4,917

-

2,356,340

-

-

2,356,340

-

-

80,474

-

80,474

-

-

-

-

-

-

-

-

-

7,041,539

-

741,898

-

336,816

-

22,193

3,061,137

22,193

1,261,511

-

1,640,177

-

-

-

-

-

-

9,505,463

-

3,205,822

-

336,816

-

1,261,511

3,061,137

1,640,177

4,251,515

3,861,131

389,661

-

723

-

-

-

-

592,790

-

-

-

592,790

-

-

-

-

-

-

-

-

-

-

-

-

-

22,193

-

22,193

-

-

-

1,951

-

1,951

-

-

-

4,868,449

-

3,885,275

-

982,451

-

4,637,013

-

(679,453)

723

(645,635)

-

1,260,788

3,061,137

1,640,177

131,315

131,315

-

-

-

-

-

-

-

131,315

-

131,315

-

-

-

-

-

-

5,156,365

4,676,182

13,662

3,622

331,278

47,687

3,622

-

87,557

-

-

-

5,159,988

4,679,804

13,662

331,278

47,687

87,557

(5,028,673)

(4,548,489)

(13,662)

(331,278)

(47,687)

(87,557)

(391,659)

(5,227,942)

(659,297)

929,510

3,013,451

1,552,620

-

(5,227,942)

(5,887,239)

(4,957,730)

(1,944,279)

(391,659)

B. Liabilities 1. Third-Party Funds 2. Funds from Bank Indonesia 3. Funds from Other Banks 4. Securities Issued 5. Fund Borrowings 6. Other Liabilities 7. Miscellanous Total Liabilities Difference Between Assets and Liabilities on Balance Sheets II

ADMINISTRATIVE ACCOUNT A. Administrative Account Claims 1. Commitments 2. Contingencies Total Administrative Account Claims B. Administrative Account Liabilities 1. Commitments 2. Contingencies Total Administrative Account Liabilities Difference Between Administrative Account Claims and Liabilities Difference (IA-IB)+(IIA-IIB) Cumulative Difference

282


2016 Performance

December 31, 2015 Maturity Balance > 3 - 6 months

> 12 months

> 6 - 12 months

Management Report

> 1 - 3 months

≤ 1 month

377

-

-

-

-

155,500

-

-

-

-

2,793

2,793

-

-

-

-

-

-

-

-

-

-

530,600

45,685

24,020

47,521

71,184

342,190 -

-

-

-

-

5,437

-

-

-

-

694,707

209,792

24,020

47,521

71,184

342,190

428,027

344,211

77,209

6,537

-

71

-

-

-

-

-

-

203,000

130,000

33,000

40,000

-

-

-

-

-

-

-

-

70,000

-

-

-

-

70,000 -

-

-

-

-

-

-

-

719,683

492,867

110,209

46,537

-

70,071

(24,976)

(283,075)

(86,188)

984

71,184

272,119

39,405

39,250

155

-

-

-

-

-

-

-

-

-

39,405

39,250

155

-

-

-

140,090

139,753

155

182

-

-

240

-

-

240

-

-

140,330

139,753

155

422

-

-

(100,924)

(100,503)

-

(422)

-

-

(125,901)

(383,578)

(86,188)

562

71,184

272,119

-

(383,578)

(469,765)

(469,203)

(398,019)

(125,901)


283


18,656


18,656


5,437

Company Profile

377 155,500


Internal Control System The Bank has implemented an internal control system through the separation of function, implementation of four eyes principles, Know Your Employee program, inherent monitoring in related units, as well as rotation system and implementation of block leave.

Internal Control System implementation In managing and controlling the financial and operational risks to be in line with the applicable regulations, the Internal Division conducts several activities, such as: 1. Visiting branch offices by utilizing the Checklist Branch Visit which includes cash count, monitoring on the implementation of dual custody, examining the security system, etc. 2. Inspecting the Bank’s compliance with the implementation of operation transaction in the branch offices that are included in the scope of operational Checklist End of Day, including conducting examination on account opening transaction and foreign exchange transaction on a daily basis.

284


3. Examining the activation of dormant account, balanced Sundry Account, and over draft balance in a centralized manner and in the scope of daily basis. 4. Conducting examination on the payment of deposit interest tax, clearing accounts, and savings to State Treasury Office 5. The result of the examination will be stated in the form of findings recapitulation and may also be used as review material for branch offices that need to improve its performance regarding the operational transactions.

Evaluation on Internal Control System Effectiveness Based on the activities implemented by Internal Division, the Bank performs evaluation and uses the results as guidelines to improve performance efficiency and effectiveness of the Bank and its branch offices. Implementation results are studied by the Bank in order to perform organized and systematic improvement and to provide the best solutions for any problems encountered.

Legal Disputes and Administrative Sanctions which have a material effect on the Bank’s business continuity along with its assets. Below are the legal cases faced by the Bank in 2016:

Description Civil

Criminal

Completed (Has Legal Standing) In the Process of Settlement/Ongoing

4 7

2

Total

11

2

Legal Disputes

Administrative Sanctions

Impact to the Bank

In 2016, there was no administrative sanctions were imposed by any parties in connection with the handling of legal cases by the Bank.

The civil legal cases in which the Bank was involved during the reporting period did not have an insignificant impact as necessary mitigation measures have been taken.


During 2016, the Bank encountered legal cases as much as 11 (eleven) civil cases and two (2) criminal cases. Of all civil cases, four (4) cases has obtained a decision that is legally binding for the Bank and seven (7) cases have not received a

There also was no material administrative sanctions from Financial Services Authority that affected the business continuity of the Bank, nor was there any administrative sanctions imposed on members of the Board of Directors or the Board of Commissioners.


During 2016, no serving Directors or Commissioners of the Bank were involved in legal problems, whether civil or criminal.

legally binding decision. As for the criminal case in which the Bank as the complainant, the whole cases were still under investigation and police investigation. The whole cases did not have a significant impact on the Bank and the Bank’s operations.

Company Profile

Material Cases Involving Serving Directors and Commissioners

Management Report

Legal Disputes

or any potential cases, both in criminal, civil, taxation, arbitration, industrial relations, state administrative agencies in the face of bankruptcy of Indonesian courts,

2016 Performance

Throughout 2016, the Bank, the Board of Directors and Board of Commissioners were not facing any lawsuit or legal case in the courts and/or arbitration agencies



285


Code of Conducts and Corporate Culture The Bank affirms its commitment to build a business based on ethicss. Every objective is achieved not solely based on our work but also pararel with our commitment to perform respectful behavior, honesty and integrity. The code of ethics provides a reference point so that each employees will have required confidence to take firm correct decision. Code of ethics will also provide guidance whenever employees stumble upon decision, including requirement to do escalation and discussion among respective parties to ensure that all stakeholders taking the right actions and proper behavior. As commitment to implement code of ethics, every employee recieved an easy access to code of ethics through employee intranet portal. In addition, the Bank are also conducting the following programs to ensure its application in the Bank operations area; 1. Conducting a review of the exisiting code of ethics on a regular basis; 2. Creating a refreshment programs throughout career ladder and in all of the Bank operational areas to ensure a good understanding of Code of Ethics. This year, the Bank has lunched its Professionalism With Integrity (PWI) program which is a mandatory program to all employees. The objective of this program is to ensure similar perception in code of ethics application.

286


3. Creating a code of conduct online attestation system to ensure every employee has read and understood the code of ethics; 4. Creating an online declaration system (such as gift acceptancce, sibling relationship, etc) and online escalation system as part of whistle blower activity, and; 5. Enforcing any breaches of discipline and violation of ethics through disciplinary committee or any other means that have been set through certain regulations.

Universality of Code of Conduct The code of conduct applies universally, which means that all values encompassed in the Code of Conduct are applied to all personnel of PT Bank QNB Indonesia Tbk, including the Board of Commissioners, Board of Directors, and all Management levels.

Code of Conducts Core Values All employees of the Bank are responsible to uphold the Code of Conduct in their day-to-day activities; strongly embedded business ethics are expected to maintain favourable environment for individuals and for the Bank. The elements of Bank’s Code of Conduct are:

Conduct 1. Teamwork 2. Relationship Based on Trust 3. Protection of Bank’s and Customers’ Assets and Interests 4. Supplier Relationship 5. Social Responsibility 6. Adherence to the Law 7. Adherence to All Policies and Procedures of PT Bank QNB Indonesia Tbk 8. Disclosure of Confidential Information 9. Our Word is Our Bond 10. Restriction on Working Elsewhere 11. Dealing with the Media 12. Avoidance of Inducement 13. Avoidance of Conflict of Interest 14. Proper Management of Staff Account 15. Personal Indebtedness 16. Personal Transactions 17. Attention to Personal Matters 18. Personal Development 19. Integrity in Inter-personal Relationships 20. Personal Conduct 21. Personal Appearance 22. Dealing with QNB Shares 23. Intellectual Property Security 1. Safety & Security 2. Continuation of Business in Times of Troubles Compliance 1. Whistleblowing 2. Politics 3. Fraud, Money Laundering, & Terrorist Financing

QNB Indonesia values are applied in an attractive range of programs. As an example, this year the Bank has implemented Learning Forum program which is an implementation of a corporate culture that emphasizes the obligation of all employees to continously develop their competence and knowledge. As the summit of QNB Indonesia value application program, at the end of 2016 QNB Values Festival were held throughout Bank QNB Indonesia working area.


The principles defined in the Code of Conduct are continuously and sustainably applied in the daily attitude, practice, commitment, and formal policies to support the corporate culture that promotes highest moral and integrity standards when carrying out the operational duties.

•

Responsible Citizenship We shall respects with dignity and be concerned for the well-being of people and environment in which we operates Professionalism with Integrity We shall continuously develop our competencies and behavior to reliably deliver what is expected from us. We shall be honest, fair, and accountable.

Company Profile

Among the socialization and enforcement of Code of Conduct is the dissemination of Code of Conduct on regular basis to all employees through the distribution of Code of Conduct book which is to be signed by all employees.

Core values which shape the Bank’s corporate culture are especially essential in that it functions as most important foundation and at the same time, guidelines for employees’ behaviour and conduct in their relationship with customers, fellow employee members, the management, and other external parties. According to the Decree of Directors No. 074/ SK-Direksi/VI/2015 dated June 1, 2015, the core values which are also the Bank corporate cultures currently known as QNB Values includes the following: • Passion for Excellence We strive to go the extramile to achieve the highest professional standards. • Innovative We shall be adaptive to change and value creative thinking to continuously attain superior benefits. • Synergistic Team We shall effectively harness our strength to achieve our common goals with pride.

•

Management Report

To support the comprehensive implementation of Code of Conduct, the Bank actively conducts dissemination and publication. In addition, the Bank also conducts observation and evaluation on the implementation of the Code of Conduct, as well as revision if deemed necessary. The revision is conducted as a form of compliance with the regulations and legislations applicable in Indonesia.

Corporate Culture

2016 Performance

Code of Conducts Socialization and Enforcement



287


Tax Compliance Throughout 2016, the Bank had adhered to all regulations and fulfilled tax obligations in accordance with the prevailing laws and regulations. The Bank continues to abide by the regulation, in which the Bank does not receive any warning frequently nor significant penalties related to taxation as of December 31, 2016.

Anti-Gratification Initiative Bank established the antigratification initiative as means of supporting the best Implementation of good corporate governance. This Initiative aims to avoid any possible conflict of Interest that may affect judgment in a decision-making process. Therefore every individual shall not: • Demand or accept payment, commission or reward in any form, that can be construed in any ways related to the status and work characteristic of a person. • Grant, promise or offer payment, reward or hospitality in hopes of receiving business profits, or to appreciate business profits granted. • Grant or accept reward or hospitality in every commercial negotiation or tender process, if this action can be construed as a way to affect the outcome.

288


• •

•

•

•

Accept hospitality that is considered beyond luxurious or excessive from the third party. Accept payment, reward or hospitality from the third party that you know or suspect of having ulterior motives for us to reciprocate their or other parties’ actions with business profit. Offer or accept reward from or to government officials or people’s representatives, or politicians or political parties, without preliminary approval from your manager or Compliance Division. Pose a threat or retaliate against other employees for their refusal to commit bribery or anything that may have caused concerns regarding this policy. Get involved in any activities that may violate the policy.

•

Provide and/or accept bribe or gratification in any kind. Gratification is usually informal. The purpose of gratification is to secure or make any routine or necessary transaction run smoothly (for instance, transaction with government officials). Bribery is usually a form of payment as reward for any assistance or gains.

Whistleblowing System


Scope of Whistleblowing System This system applies universally and fairly to all individuals of the Bank and on all levels of employment, including the Board of Directors, Board of Commissioners, and Committees under the Board of Commissioners, as well as external parties that may provide information related to the violation acts.


The legal reference of the Bank’s whistleblowing system refers to:

Whistleblowing Objectives and Policy

Company Profile

Whistleblowing System Legal Reference

1. The Regulation of Bank Indonesia No. 8/4/PBI/2006 dated January 30, 2006, amended with the Regulation of Bank Indonesia No. 8/114/2006 dated October 5, 2006, on the Implementation of Good Corporate Governance for Commercial Banks. 2. Code of Conduct of the Employees of PT Bank QNB Indonesia Tbk. 3. Regulation and Compliance Policy No. 1.301.00 dated June 5, 2012, on the Anti-Fraud Strategies and Guidelines.

Management Report

The Bank realizes that in the effort of conducting a sound and good governance practice, particularly in implementing the principles of transparency and fairness, a mechanism is needed to manage and follow-up any acts that violate the rules and values of the Company. This mechanism shall prioritize the principle of high confidentiality so that the anonymity of the whistleblower is fully guaranteed. With the encouragement for the employees to report the violations that they find, the Bank is able to detect and minimize both the financial and non-financial losses early.

General Provision of Whistleblowing System 1. The ones classified as Whistleblowers are internal and external parties. The internal parties include employees (permanent, in probation, contract, and outsources), Management (including the Board of Directors), and the Board of Commissioners. External parties may report the violation by including the correct and valid proof (in the form of recordings, photos, etc.) as the evidence of disobedience conducted by the Violator. 2. The ones classified as violators are the parties that are suspected and deserved to be suspected to conduct violations or to act against the law, to conduct unethical/ immoral actions, or other actions that may harm the Bank either financially or nonfinancially. 3. Fraud or violations are actions conducted deliberately and consciously with the intention of generating benefit for personal and/or other related parties. The act of fraud violates the regulations as well as internal and external values and culture so as to result in loss for the Bank, financially and non-financially.

2016 Performance

The whistleblowing system in the Bank is currently known as Ayo Lapor Program to make it more familiar to the employees, thus encouraging them to actively participate in reporting any violations that occur within the Bank. The program is managed by the Internal Audit Division under the Anti Fraud and Investigation Unit. Ayo Lapor Program aims to create a harmonious and conducive condition as well as implement the practices of good corporate governance.


289


Each individual is willing to create a comfortable and healthy work atmosphere

Maintaining the Company's reputation

Creating a conductive work atmosphere

Bank is able to anticipate and follow-up the problems before greater loss can occure

Whistleblowing Mechanism As of one the supporting elements in the Bank’s anti-fraud strategy, whistleblowing mechanism enables reports of breach to be lodged directly to Fraud Oversight Committee which include President Director himself. In the reporting process, the whistleblower has to maintain the truth and accuracy of the information that has been conveyed as well as provide adequate information for the continuation of investigation. The information that has to be conveyed is the violator’s identity, the chronology, and the violation acts. The whistleblower could submit his/her report to the Ayo Lapor Program via ayolapor@ qnb.co.id.

290

Keeping the confidentiality of the events within the Bank so that problems or rumors will not arise


Minimizing the employee's disappoinment

Conducting improvement and early control

Whistleblower Protection The Bank guarantees the confidentiality of whistleblowers in case of the whistleblower does not gain any benefit from the reports or the matters reported. The Bank shall not dismiss, delegate, delay, threaten, disturb, or treat the whistleblower unfairly in any kind of form in accordance with the Employment Rules and Regulations or Employment Contract.

Complaint Handling The reporting system is handled by Fraud Oversight Committee (FOC), which consists of the President, Risk Director, Legal and Compliance Director and Director of Operations. The reports must be submitted to FOC and in case of audit matters included in the report, the report

Bank can avoid any work climate that is less conductive within the Company

shall also be submitted to Head of Audit Committee along with the work plan to handle the complaints. If the reported one is a member of the FOC, the report receiver shall not submit the report to member of FOC who is involved. Any follow up action taken by FOC related to the internal improvements are submitted to the related Division Head.

Incoming Whistleblowing Report In 2016, there was no whistleblowing report submitted. The case has been investigated and necessary actions have been taken as part of the Bank’s corrective actions.

Information Disclosure & Access to Bank’s Information

Description

press release, website, and other medium. The press releases, in particular, are also published in both nation-wide print and electronic media. Here below are the recap of information disclosure conducted by the Bank in 2016:

Total 1

Mass media review

60

Advertising billboard and outdoor media

6

Mass media promotion

-

GMS

3

Press Release

9

In addition, public can also contact the Bank through: • Contact Center at (+62 21) 300 55 300 • Corporate Communication via email at corporatecommunication@ qnb.co.id


The press releases stated in this Annual Report is only related to PT Bank QNB Indonesia and not related to companies within

With reference to the regular and intensive media monitoring activities, the Bank concluded that there was no press releases that adversely affect the Bank in terms of financial and nonfinancial performance throughout 2016. News media that published the latest development on the Bank’s activities under the Bank’s permission and acknowledgement. Report on press releases is

submitted to the Financial Authority Service on quarterly basis.


Press Release

the scope of the Bank’s group as a whole. As such, analysis on impact of press release to the Bank is reviewed based on the press releases which only published about the Bank.


126

Customer Gathering Event

In compliance with Indonesia Stock Exchange Regulation No. I-E dated July 19, 2004 concerning Obligation to Disclose Information, in 2016 the Bank has conducted annual public expose on December 19, 2016 in its head office. In the public expose, the Bank disclosed its Financial¬ Performance in 2016 and the Bank’s focus and strategy.

Company Profile

Public Expose

Public Expose

Management Report

its facilities on information delivery facilities. In addition, the Bank also endeavors to enhance its information technology to maintain and improve reliability in providing information in integrated, timely, and accurate manner through public expose,

2016 Performance

In order to facilitate communication and access by all stakeholders including to the latest information on financial, non-financial and other corporate reports related to the its transparency and accountability, the Bank also consistently updates


291


List of Press Release Issued in 2016 No.

Date

Activities

Press Release Title

1.

February 16

GMS

PT Bank QNB Indonesia Tbk has a Change in the Composition of the Board of Directors and Board of Commissioners to Strengthen Its Management Board

2.

February 18

Opening of Solo Branch

PT Bank QNB Indonesia Tbk Inaugurated Its First Branch Office in Solo

3.

April 4

QNB Group Financial Highlight Q1

QNB Group Presented Its Financial Highlights for the First Three Months Ended in March 31, 2016. The Annual GMS of PT Bank QB Indonesia Tbk Presented Annual Report 2014

4.

April 13

Extraordinary GMS

To strengthen the management board, PT Bank QNB Indonesia Tbk announced the change in the composition of the Board of Commissioners and Board of Directors

5.

April 27

Signing Ceremony QNB Indonesia and Commonweatlh Life

PT Bank QNB Indonesia Tbk and Commonwealth Life Collaborated in the Marketing of Life and Investment Insurance

6.

May 19

Signing Ceremony QNB Indonesia and Prudential Life Assurance

Prudential Indonesia and QNB Indonesia Announced New Strategic Partnership

7.

June 16

QNB Group Acquired Finansbank Turkey

The continuation of Finansbank (Turkey) acquisition by QNB Group, 27,300 employees operated in 1,200 branches and 30 countries

8.

July 13

QNB Group Financial Highlights Q2

QNB Group Presented Its Financial Highlights for the First Six Months Ended in June 30, 2016

9.

October 10

QNB Group Financial Highlights Q3

QNB Group Recorded Net Income of 27 Billion Dollar in the third quarter

292



Aside from these collaterals, the Bank added Monthly Insights, a bulletin issued monthly to be distributed in which it is hoped for employees to gain more updates not only within the Bank but also economy and industries information from a macro perspective. In addition,

the communication is not only from corporate side, but also for other respective divisions to share news, help desk and HRIS (HR Information System) dedicated for employees to enable them to access their personal data.


The Bank utilizes various type of media communications to reach out to the employees. Such mode of communications undertake different ways, such as e-mail blast, newsletter, and corporate news. Employees will receive routine information on current situation of the Bank, new product and services, as reminders and others.


Internal Communication



293


Provision of Funds to Related Parties and Large Fund Exposures

In 2016, the Bank provided funds to several related parties by referring to the stipulations of Bank Indonesia regarding the Legal Lending Limit. Provision of Funds to related parties and individual/group core debtors is as follows:

Fund Provision

Total Debtor

Rupiah

Foreign Currencies

To Related Parties

21

109.475

67.362

To Core Debtors a. Individual

12

1.073.111

2.568.629

36

2.634.421

2.334.363

b. Group

*in million Rupiah

Provision of Funds for Political Activities The Bank is prohibited to involve in political activities, including donation of any kind for political purposes. Accordingly, in 2016 there were no funds provision to any political related.

294


Bank Strategic Plan

Medium and Long Term Plans


For next 3-5 years, the Bank will: 1. Optimalise resources of the Bank to increase its business performance. 2. Enhance its products and services to compete in the market. 3. Optimalise and develop business and operating model in order to meet customer expectation and achieve service excellence. 4. Accelerate the growth of the bank through strategic alliances as well as organic and inorganic growth. 5. Capital increase to support Bank’s business development and as the preparation of longterm business framework.

Company Profile Corporate Social Responsibility

Several key strategic plan established by the Bank for the next one year consists of: 1. Assets Growth The strategic plans in order to increase the bank’s assets, include: the development of finance sector that focuses on corporate and commercial segment, while the development of assets in terms of anorganic is through the acquisition and/or merger with another healthy and strong financial institution. 2. Liquidity Management In terms of liquidity management to support the financial sector and in order to maintain an ideal LDR level, the Bank will focus on fund raising strategy in the corporate and retail segment particularly in the subsegment of affluent customer (priority banking).

6. Continuous Efficiency Improvement In order to achieve the vision and mission, the Bank always applies effective principle of efficiency in all lines of the Bank’s activities, and with the support of IT and other facilities that will be a medium for the implementation of such efficiency.

Management Report

Short Term Strategic Plan in 2017

3. Fee Based Income Development The Bank will continue to increase the share of fee income both from the loan facility, as well as fee income generated from non-traditional activities, among others: wealth management business income, foreign exchange transactions, as well as advisory services and trade finance transactions. 4. Improvement of Low Cost Funding In addition to the liquidity management strategy through the funding of corporate sector and priority banking, the Bank will also seek to raise low-cost Third Party Fund through CASA improvement program and cash management business development, as well as the fund raising through prepaid products and e-money. 5. Improvement of Net Interest Income As a short-term effort to achieve a positive financial performance, the Bank will implement financing based on customer base and loan oriented to distribution chain.

2016 Performance

To overcome future challenge and support the realization of 2017 vision and achievement, the Bank has established strategic plans in pursuant to Bank Indonesia Regulation No. 12/21/PBI/2010 dated October 19, 2010 regarding Bank Business Plan and Bank Indonesia Circular Letter No. 12/27/DPNP dated October 25, 2010 on Bank Business Plan.


295


Transparency of Bank Financial and Non Financial Performances Pursuant to Financial Services Authority Regulation No. 6/ POJK.03/2015 dated 31 March 2015 concerning Transparency and Publication Report of the Banks, Financial Services Authority Regulation No. 8/ POJK.04/2015 dated 25 June 2015 regarding website of Issuers or Public Companies, Indonesia Stock Exchange regulation No. I-E regarding the Responsibility on Information Submission, attachment of the Decision of the Board of Directors of IDX No. Kep-306/BEJ/07-2004 dated July 19, 2004, the Bank has prepared and present financial reports in the framework of financial transparency periodically, which comprise of Annual Report, Quarterly Published Financial Report, Monthly Published Financial Report, Annual GMS and Public Expose. Annual Report, which among others covers: • Financial Highlights including stock performance, reports of the Board of Commissioners, and Board of Directors, company profile, management analysis and discussion on business and financial performance, corporate governance, and corporate social responsibility

296


•

•

Annual Financial Statements that have been audited by a Public Accountant and Public Accounting Firm that is registered at Financial Services Authority. The annual Financial Statements cover a period of 1 (one) financial year with comparison to the previous financial year Statement of responsibilities of the Board of Commissioners and Board of Directors regarding the accuracy of the annual report. The statements are set forth in the statement letter, which signed by all members of the Board of Commissioners and Board of Directors.

Quarterly Published Financial Reports The Bank releases Quarterly Published Financial Reports in accordance with the prevailing regulations. The Published Financial Reports are signed by 2 (two) members of the Board of Directors. Monthly Published Financial Report The Bank prepares and submits monthly financial report in the Commercial Bank Monthly Report format in accordance with prevailing regulations. The report also published in the Bank’s website.

Annual General Meeting of Shareholders During the Annual GMS, the Bank through the Board of Directors presents a number of significant documents including Annual Report and Annual Financial Statements to the shareholders. Public Expose The Bank also organizes a public expose as one of the medium for the Bank to disclose its financial and operation performance, achievement, challenges, etc to investors, analyst, fund managers, stock exchange member representatives, as well mass media. In the meantime, non-financial reports including the provision of clear information regarding the Bank’s products and services can be obtained easily by customers, such as in leaflets and brochures, in all of the branch offices of the Bank. The Bank also provides information on the financial and non-financial reports on the Bank’s website which can be accessed by all stakeholders.

Conflict of Interests Transactions

Name & Position of Decision Maker

Type of Transaction

Transaction Value (Rp)

Management Report

Name & Position with Conflict of Interest

In 2016, the Bank has no conflict of interest transaction.

In the event that there were a transaction with conflict of interest, the related member of Board of Directors and Board of Commissioner must abstain from approval process on such transaction.

2016 Performance

The policy governing transaction with affiliated parties, related parties and transaction containing conflict of interest was stated in the Board of Commissioners Charter, Board of Directors Charter and Code of Ethic, and other Bank’s internal procedures and policies.

Remarks

NIL

Company Profile

Shares Option

Shares and Bond Buy Back


During 2016, the Bank did not have any program of stock options for Board of Directors, Board of Commissioners, or employees.

During 2016, there was no Bank’s activity to buy back either stocks or bonds. Corporate Governance

Investor Relation to internal and external parties including shareholders, potential investors, rating agencies, regulators, etc. The Bank also conducts periodical activities

to update the performance and current condition of the Bank such as quarterly performance report, customer gathering, public expose, etc.


297


Corporate Communication division together with Corporate Secretary division and other related divisions are responsible to provide accurate, reliable and timely information


So

ci

al

Re s

C po or ns po ib rat ili e ty

Annual Report 2016

298


2016 Performance

Management Report

Company Profile




299



300


2016 Performance Management Report Company Profile Corporate Social Responsibility

301




We believe that the ideal sustainable growth could only be achieved by contributing to the society and running business based on the concept of triple bottom line (people, profit, planet).


Basis of CSR Implementation

The Bank’s definition of Corporate Social Responsibility (CSR) encompasses obligation to preserve environment, to respect human rights, to provide a comfortable working conditions and to maintain good working relations with the employees, to prioritize health and safety in the workplace, also contribute in local economic and community development.

302


The Bank believes that innovative business endeavors, promotion of good corporate governance and business ethics to all stakeholders, and development of strong workforce are essential for enabling sustainable development that will result in scalable impacts in the society welfare.

Legal Basis In implementing its CSR obligation, the Bank refers to several legal basis as follows: 1. Republic of Indonesia Law No. 8 of 1999 on Consumer Protection. 2. Republic of Indonesia Law No. 13 of 2003 on Labor.

3. Republic of Indonesia Law No. 40 of 2007 on Limited Liability Company. 4. Financial Services Authority Regulation No. 1/ POJK.07/2013 on Consumer Protection in Financial Services Sector. In addition, the Bank’s CSR policy and activity are also in accordance to ISO 26000 which contains guidelines for social responsibility practices in the aspect of accountability, transparency, ethical behavior, respect to stakeholders’ interest, compliance with law, respect for international behavioral norms, and respect for human rights.


The scope of the Bank’s CSR implementation is categorized into four pillars: (1) Environmental Management and Preservation; (2) Social and Community Development; (3) Labor, Occupational Health, and Safety; (4) Product and Consumer. Despite the uneven implementation of CSR programs in all pillars, the Bank continues to increase its commitment to expand the scope of CSR programs.


303


In terms of planning, the Bank set a continuous planning process based on the actual needs of the community. This is served as the basis for the Bank’s policy and approaches to the community in terms of social responsibility, the factors related to it, as well as its accompanying impacts on society.

Last, evaluation on the CSR program is made to collect findings which later used as the basis to improve related CSR program or as consideration for the improvement of other CSR programs.

Scope


In carrying out social responsibility the Bank follows the general framework of “plan, do, check and improve” which underlies such well-known initiatives as those of the International Organization for Standardization (ISO) in the areas of quality and environmental management systems.

On the implementing stage, the Bank sets objectives and measurable targets, and drafts plans and programs aiming to realize such objectives and targets. The stage is necessary to realize an effective CSR program both in terms of implementation or the target of such program.


General Framework


Environmental Responsibility The Bank’s Policy on Environmental Management and Preservation The Bank’s commitment to environmental responsibility is implemented among others by having a document storage management which in line with the environmental best practices in bank and is stipulated in the Circular Letter No. 2/10GNSV/003.03/IX/2016 on Document Storage Provision and No. 2/06/011-ITDB/IX/2016 on Data Center and Server Environmental Standard. In terms of energy efficiency, the Bank has 3D Program, which stands for Commitment to Time, Efficiency, and Services in accordance with the approval memo of the Board of Directors No. 017/MI-SQ/II/2013.

Environmental Management and Preservation Activities In 2016, the activities included reducing energy use, cutting emissions from office and branches, and making a positive contribution to the environment through its own actions and instilling the efficiency culture within the organization. The tangible manifestation of the Bank’s commitment to efforts of the energy conservation are the following activities:

304


•

Efficient Use of Electricity The Bank consistently strives to instill and nurture energysaving culture both in head office and branch offices. In the first place, every employe is required to use the lights when and where necessary and turn off lighting when not using or after finished working. Employees are also expected to set the temperature above 200 Celsius and refrain from using especially during 9 am to 8 pm on weekdays as much as possible.

•

Paper Efficiency The Bank promotes paper saving by reducing office paper waste, advocating paper reuse & recycle, and going paperless in full measure. Internally, the employees are continuously encouraged to cut down internal document by utilizing digital document archiving such as PDF to convert document or compressing documents to save data storage.

•

Improved Productivity The Bank constantly strives to implement a time management strategy, among others, by encouraging employee to set schedule for specific times and keep distractions to minimum when working on tasks. In addition, the Bank also supports the employees to take regular breaks whenever necessary and finish working on time in order to keep them on top of their game.

•

Resource Conservation To the impact of its operations on the environment, the Bank continues to promote efficient use of water. Using water efficiently not only securing freshwater resources but also lower greenhouse gas emissions as public water systems require a lot of energy to purify and distribute water.

Occupational Health, Safety, and Employment 2016 Performance Management Report Company Profile

Equality


305


The Bank commited to provide equal job opportunities and career development regardless of gender, sexual orientation, age, marital status, race, ethnicity, religion or belief. This commitment consistently listed in the company regulation or any other provisions that regulate recruitment process and career development. Recruitment and career development is completely determined by the competence and employee achievement. In addition to open working opportunities, the Bank also provides an opportunity for students and fresh graduated to gain experience through an internship program,


To ensure the employees safety and provision of health benefits, the Bank has the following policies: - Circular Letter No. 3/10/002/ IX/2014 on Testing and Maintenance of Small Fire Extinguisher. - Circular Letter No. 3/10/003/ XII/2014 on Testing and Maintenance of Diesel Engine Power Plant. - Circular Letter No. 2/10GNSV/002.03/IX/2016 on Building Security Policy. - Circular Letter No. 3/04/007/X/2015 on Employee Health Benefit.

The Bank promotes a diverse employees background to reflect gender equality and equal employment opportunities. A highly skillful and diverse team helps the Bank to create innovations and better compete in a rapidly changing environment. However, the Bank has no specific provision which differentiates gender in terms of career opportunity and also in terms of health facilities provision. Moreover, the Bank also focuses on employees’ health and safety through various programs to raise employees’ awareness of occupational health and safety.


The Bank’s Policy on Occupational Health, Safety, and Employment


the employees will not only be able to enhance their competencies but also stay on the right track of their career development.

ensures equality in all aspects of employment opportunities for everyone regardless of their gender, race, religion, physical condition, or national origin. Recruitment is based on the selection process, the evaluation of the probationary period, and an orientation. Likewise, the Bank provides its employees with equal opportunities for training and development programs which are based on their talents or strengths (strength based) of each employee. By doing so, the Bank expects that

People are definitely at the heart of the Bank’s business process and that it remains strongly committed to building meritocracy in which everyone has the opportunity to succeed. The gender equality in QNB Indonesia as of December 2016 is shown in the following table.

Gender Position

Female

Male

Division Head Others

13 445

11 439

Jumlah

458

450

Industrial Relations

workers and their families, and; the protection for employees against acts of anti-union discrimination and interference. The mechanism and details of the labor union establishment is stipulated in the Bank’s Collective Labor Agreement (CLA).

The Bank always seeks to comply with all labor rules and regulations to minimize the occurrence of human rights and industrial relations violations. -

306

Freedom of Association Pursuant to the employment mandate in Act No.21 of 2000 and Act No. 13 of 2003 of Ministry of Manpower and Transmigration Decree regarding the Labor Union, the Bank guarantees employees’ rights to establish and become members of unions; unions’ rights to function in order to protect, defend and improve the welfare of


-

Working Hours To avoid over-exploitation of employees, the Bank has set limits on regular working hours. If an employee works beyond the time specified, overtime will be paid in accordance with the law.

-

Holidays and Leave In addition to the provisions on break times during work days, annual leave and long leave every 3 years, the Bank also compensates employees with paid leave for various purposes, such as to perform a pilgrimage or other religious obligation, and maternity and menstrual leave for female employees.

Occupational Health and Safety The whole process of the work done in QNB Indonesia conducted with the precautionary principle, the Bank also emphasizes the safety and comfort of employees as one of the main concerns. One of the example is done by doing prevention and health care quality improvement. In this area for example, the Bank consider the welfare of employees through the facilities of health protection provided in the form of health insurance for employees and their dependents. Certain employees were also given the opportunity to perform routine health examination held every year. As a support, the Bank also provides free open clinic facilities at headquarters periodically once a month. In day-to-day operational activities, the ocupational health and safety practices are particularly focused on more on the implementation of basic guidance and work procedures for employees to mitigate the risk of workplace accidents and to protect the employees’ health conditions.


In terms of safety and comfort the Bank regularly conducts training related to safety, formed a special task force to monitor safety, and improving the working convenience by providing a special breastfeeding room facilities for women employees. This year, there were no workplace accidents in all operational areas of the Bank.


In conclusion, the Bank believes that the attempts to protect employees from work-related hazards, the achievement of a high standard of safety and health, and a conducive work environment will ultimately have a positive influence on improving productivity.


Similarly, the Bank equips their work units with adequate facilities to promote physical and mental soundness which include medicine and first aid equipment as well as prayer room. To ensure workplace cleanliness and hygiene the Bank also sets out regular removal of waste and rubbish as well maintain the supplies of sanitary conveniences.


For the Bank, proper handling of occupational safety is demonstrated through emergency drill called BCM (Business Continuity Management) which aims to prepare employees for the possibly occurring accidents such as fire and earthquake. The simulation is held in both Head Office and the majority of Branch Offices on regular basis. In addition, the Bank also provides appropriate fire-fighting/prevention facilities such as the fire extinguisher and sprinkle (smoke detection device).


307


Social and Community Development

The Bank’s Policy on Social and Community Development In terms of social and community development, the Bank’s approach is particularly focused on empowering and delivering benefit for communities in general and underprivileged community in particular. The Bank works with external partners such as regulators, social-oriented foundations, and educational institutions to make a real difference to national challenges: health and financial literacy awareness.

308


Social and Community Development Activities The Bank covers a wide scope in terms of social and community development. Activities organized by the Bank on this aspect among others, include financial contributions, collaboration on significant events and programs, as well as cooperation with financial institutions in order to promote financial literacy. In addition, the Bank also participated in the program of Financial Services Authority to encourage economic participation and social inclusion, encourage competition and market efficiency in the field of financial services, and contribute to the welfare of society.

In 2016, the Bank’s social activities highlights on philantrophy, financial inclusion education, and improving health quality in general community. Details of those activities could be found as follows:


Activity

Description

Expense

January 23, 2016

Christmas celebration in Santo Yusup Orphanage in Sindanglaya, Cianjur

May 2, 2016

QNB Donor Darah (blood donation) which held Carried out the annual activity of blood at Head Office donation which donated to Indonesian Red Cross, DKI Jakarta

June 22, 2016

QNB Indonesia Peduli: Sobat Berbagi which held at Head Office

Break-fasting together with 50 orphans from As Syafiiyah Foundation and 25 volunteers from QNB Indonesia

Rp38,900,000

June 29, 2016

Break-fasting with 1,000 congregation of Sunda Kelapa Grand Mosque

Provided food and drinks for break-fasting with 1,000 congregation of Sunda Kelapa Grand Mosque

Rp20,000,000

August 21, 2016

Sehat Bersama QNB Indonesia which held at Jl. Jend. Sudirman, Makassar

Organized morning exercise with more than 300 participants at Car Free Day

October 1, 2016

QNB Indonesia Peduli: Garut

Provided donation in the form of cash and supplies of daily necessities for the victims of flood disasters

Rp32,005,000

October 19, 2016

Athirah University Fair at Athirah Islamic School, Makassar

Provided Financial Inclusion exposure to the 300 students of junior and senior high school

Rp10,240,000

November 5 & 12, 2016 Cherish 2016 at Depok, West java

Provided free medical check-up for mothers and children in collaboration with the Faculty of Medicine, University of Indonesia

Rp15,000,000

December 4, 2016

Collaborating with Faber Castle and Bali TV to conduct children drawing competition for kindergarten and elementary students.

Rp16,000,000

Rp5,000,000

Rp6,000,000

309



Rp15,000,000


Kindergarten and Primary Colouring Competition QNB Indonesia Bali branch

Sharing and donating to 50 orphans


Date


Product and Consumer Responsibility

The Bank’s Policy on Product and Consumer Responsibility In terms of compliance, the Bank has complied with rules and regulation on consumer protection and complaint handling as follows: • Republic of Indonesia Law No. 7 of 1992 on Banking, as amended by Law No. 10 of 1998. • Republic of Indonesia Law No. 8 of 1999 on Consumer Protection. • Financial Services Authority Regulation No. 1/ POJK.07/2013 on Consumer Protection in Financial Services Sector. • Bank Indonesia Regulation No. 7/7/PBI/2005 on Customer Complaint Handling, as amended by BI Regulation No. 10/10/PBI/2008.

310


•

•

•

Bank Indonesia Regulation No. 7/6/PBI/2005 on Banking Products Information Transparency and Utilization of Customers’ Personal Data. Bank Indonesia Circular Letter No. 15/1/DPNP on Prime Lending Rate Information Transparency. Republic of Indonesia Law No. 8 of 1999 on Consumer Protection and latest financial Services Authority Regulation No. 1/POJK.07/2013 on Consumer Protection in Financial Services Sector.

Customer Protection The banking industry is an industry of trust, in regard to its role as an institution which collect and distribute funds. To that end, QNB Indonesia strives to maintain customer trust by applying the principle of prudent and prioritizing

customer protection and services. The provision of maximum protection for the customer’s interests is the key in establishing customer trust in the banking system in general. As a financial institution, QNB Indonesia is committed to maintain the trust and customer confidentiality provisions as referred to in the following: 1. Act No. 7 of 1992 concerning Banking. 2. Law of the Republic of Indonesia No. 10 of 1998 on the Amendment of Act No. 7 of 1992. 3. Bank Indonesia Regulation No. 2/19/PBI/2000 on Terms and Procedures for Giving Orders or Written Permission for Opening Bank Secrecy.


311


In order to follow up on customer complaints, all complaints are forwarded and coordinated with related work units and branches to provide solutions according to predefined SLA. Every customer has the right to file complaints orally and in writing. Complaints may be submitted by the customer and/or customer representative with the supporting documents required for complaints settlement. If the customer filed a complaint verbally, customer complaint is handled and resolved within 2


Customer’s Complaints Follow Up

If customers are not satisfied with the results of the settlement, customers could submit their complaints either through Bank Indonesia (BI) on complaints related to payment services or through the Financial Services Authority (FSA/OJK) or through other alternative solutions. Complaints received by the Bank through communication media will be followed up to get the best solution for customers while the advice given will be used to improve customer services. QNB Indonesia is committed to continue developing and perfecting the handling of complaints and suggestions received so as to provide the best service for all stakeholders and provide optimum added value.


As a growing Bank, QNB Indonesia is very open to all suggestions, criticism, and complaints which serve as valuable feedback in improving the quality of service. To that end, the Bank provides several communication channels so that customers could easily submit complaints - 24 Hours Contact Center Service at (+62 21) 300 55 300 - E-mail to contact.center@qnb. co.id - Face-to-face meeting with frontliner staffs of QNB Indonesia

For a written complaint, the complaint is handled and resolved within a maximum period of 20 (twenty) days after the complaint is received and shall be accompanied by complete supporting documents. In case the complaint handling could not be completed within a period of 20 (twenty) days, then the complaint resolution could be extended to a maximum of 20 (twenty) working days which will be informed by QNB Indonesia.

Company Profile

However, the obligation to maintain customer confidentiality does not apply to [Article 2 (4) PBI 02.19.2000]: 1. Tax purposes; 2. Bank settlement accounts that have been submitted to the Receivables Agency and State Auction/State Receivables Affairs Committee; 3. The interests of justice in criminal cases; 4. The interests of justice in a civil case between the Bank and customer; 5. The exchange of information between Banks; 6. Demand. approval or authorization of Depositors made in writing; 7. Requests from legitimate heirs of Depositors who have died.

The Bank’s commitment to product and consumer responsibility is particularly reflected in the establishment of Contact Center service in 2013. First introduced in January 2013 in response to core banking system migration process, it initially serves as hotline to handle customer complaints and to reply to information inquiries.

(two) business days. In the case of the complaint handling and settlement requires more than 2 (two) working days, QNB Indonesia suggests the customer to file a written complaint.

Management Report

The customer confidentiality policy of the bank is in accordance with Article 1 paragraph 28 of Law of the Republic of Indonesia No. 10 of 1998 on the Amendment of Act No. 7 of 1992 on Banking that Bank Secrecy is everything connected with information on customer retention and savings. Information about customers other than Depositors, is not the information that shall be kept confidential by the bank.

QNB Indonesia Contact Center

2016 Performance

In addition, the Bank has set several policies concerning customer complaint management: 1. Circular Letter No. 3/02/003/X/2014 on Implementation of Handling and Settlement of Customer Complaint. 2. Circular Letter No. 3/02/031/X/2014 on Contact Center Service.


Customer Complaint Flowchart Contact Center Agent

Team Leader Contact Center

Contact Center Sub Division

Related Working Units

Start

1

2

3

Receive Customer Complaint by Phone

Receive Customer complaint that cannot be resolved by the Contact Center

Receive Customer complaint report via Help Desk from the Contact Center Team Leader

Receive Customer complaing report via Help Desk Call Center Sub Division

Verify Customer’s data

Check the completeness of Customer data

Forward the Customer complaint to the working unit related to the Customer complaint

Print the document and validity of Customer complaint support

Match?

N

No need to continue

Y

3

Immediately finished?

N

Receive answer from related working unit

Input Customer request/complaint to the Contact Center Allocation System and Help Desk

Y Provide well explanation and answer upon Customer complaint

Inform Contact Center Team Leader

End

1

Check the Validity of Customer complaint

4

2

Check wether the Customer complaint could be solved directly

5

Input the resolve result to the Help Desk application

Archive the Customer Reporting Form in order

Provide respond/answer upon Customer complaint

Input the information of Customer complaint settlement to the Help Desk application

Send the respond/answer of Customer complaint to Contact Center Customer Experience Sub Division

4

5 Contact the Customer to resolve the Customer complaint: 1. Oral, for oral complaint, and 2. Written, for written complaint End

312

Monitoring Input Customer complaint to the Help Desk application


End


In order to improve the customer services, QNB Indonesia will improve the quality of both the frontliners in the branches and in the Contact Center through the provision of product knowledge as well as solutions in the banking handling. In addition, the Bank also planned network services expansion such as the opening of a branch office, branch office relocation to a better location, and addition of off-site ATM network. Development of office and service network of QNB Indonesia is expected to reach out to the community in various cities in Indonesia.

The Bank strongly believes that by improving the ability and understanding of general public and its customers in banking and finance, it will allow them to make smarter financial choices. To support the financial literacy program in 2016, the Bank participated in Athirah University Fair and provided financial inclusion exposure to the students of junior and senior high school.

Company Profile

Referring to the total complaints, QNB Indonesia will continue to improve management and customer complaints by doing: - Repair and monitoring process on the settlement of customer complaints - Acceleration time of completion of customer complaints.

Customer Services Improvement Program

Financial Literacy Program

Data of Incoming Call to Contact Center as of December 2016 Category

Management Report

As of December 2016, the number of the incoming call to the Contact Center of QNB Indonesia amounted to 32,643. Among the calls, there were 229 incoming calls regarding customer complaints, while the other calls related to customer needs regarding information of products and services of QNB Indonesia and could be handled entirely in accordance with the Service Level established by the Bank.

So it could support the level of customer satisfaction and loyalty which will certainly have an impact on business development.

2016 Performance

Complaints Settlement Rate

Total Calls in 2016 32.643

Answered Call

22.081


Incoming Call

12.628

Banking Information

229

Complaints

9.224

Others

985

Missed Call

279


Unanswered Call

9.298

Call Ended in IVR

Note: • Unanswered Call: Agents’ phone line fully occupied and cannot received incoming call • Missed Call: Phone only rings for a moment


313


Responsibility Statement of Annual Report 2016 We, the undersigned, hereby declare that all information in the Annual Report 2016 of PT Bank QNB Indonesia Tbk has been presented in its entirety, and assume full responsibility for the accuracy of the contents of the Company’s Annual Report. This statement is hereby made in all truthfulness. The undersigned

Ali Ahmed Z A Al-Kuwari President Commissioner

Grant Eric Lowen Commissioner

Muhammad Anas Malla Independent Commissioner

314


Suroto Moehadji


Djoko Sarwono


Azhar bin Abdul Wahab Acting President Director



Risk Director

Compliance Director

Novi Mayasari



315


Profile of Executive Management

Bambang Wijayanto - Head of Legal An Indonesian citizen, he was appointed as the Head of Legal Division on November 21, 2014. He obtained his bachelor’s degree in Law from Satya Wacana Christian University, Salatiga, in 1996 and master’s degree in Law from University of Indonesia in 2014. Previously, he held the position of Legal Policy, Advisory & Special Transaction Head at PT Bank UOB Indonesia and Legal Policy and Procedure Support Department Head at PT Bank International Indonesia Tbk (BII). Caroline Halim - Head of Risk Management Citizen of Indonesia. She was appointed as the Head of Risk Management Division on February 20, 2012. Earned her bachelor’s degree in Accounting from University of Indonesia in 1986. Previously, she held the position of VP Risk Management Group Head at PT Bank ICB Bumiputera Tbk and VP Credit Risk & Analytic Management Group Head at PT Bank CIMB Niaga Tbk. Cut Tashana Azia – Chief Auditor Profile of Cut Tashana Azia could be found in the Chief Auditor section of this Annual Report.

316


Denny Soedharmo - Head of General Services Citizen of Indonesia. He was appointed as the Head of General Services Division on May 12, 2014. Earned his bachelor’s degree in Architecture from Tarumanagara University in 1998 and master’s degree in Management from Trisakti University in 2010. Previously, he held the position of GM Facility & General Services at BAT/Bentoel Group; Head of Facility Management – Corporate Real Estate at Bank Ekonomi (member of HSBC Group); Head of Property and Facility Management Services at Bank ABN Amro/RBS; and Project Manager - HR & General Affairs at Astra International. Ervin Gumilar - Head of SME Credit Review Citizen of Indonesia. He was appointed as the Head of SME Credit Review on July 1, 2015. Earned his bachelor’s degree in Finance from California State University Fresno in 1992. Previously, he held the position of Head of Commercial Credit Support at PT Bank QNB Indonesia Tbk since May 2, 2012. Previously, he worked at PT Bank Lippo and PT Bank CIMB Niaga Tbk with the last position as Commercial Credit Review Group Head at PT Bank CIMB Niaga Tbk.

Glenn Ranti - Head of Corporate Communication Citizen of Indonesia. He was appointed as the Head of Corporate Communication since March 4, 2013. Earned his bachelor’s degree in Hospitality Industry from International Hotel School, United Kingdom in 1995. Previously, he held the position of Marketing Communication Head at PT Bank QNB Indonesia Tbk since January 2, 2012; VP – Regular Savings & Segmentation Group Head at PT CIMB Niaga Tbk. Haryanti Kodiat – Head of Strategic Planning & Change Management Office Citizen of Indonesia. She was appointed as the Head of Strategic Planning & Change Management since September 1, 2016. Earned her bachelor’s degree in Business Administration from San Diego State University in 1990. Previously, she served as Deputy Operations Head of PT Bank QNB Indonesia Tbk since joining in 2015. Prior to joining PT Bank QNB Indonesia Tbk, she held several positions at Deutsche Bank AG – Jakarta with last position as VP Compliance Officer in 2014.

Hermia Kusumadewi – Acting Head of Client Services Citizen of Indonesia. She was appointed as the Acting Head of Client Services since May 2, 2016. Earned her bachelor’s degree from Finance and Banking College (STEKPI) in 1996. Previously, she served as Client Relationship head since November 1, 2016, Wholesale Banking Customer Service Region Head since joining PT Bank QNB Indonesia Tbk in 2012. Prior to joining PT Bank QNB Indonesia Tbk, she served as Facility Support & Administration Team Head at Bank UOB Indonesia; Business Development – Bancassurance at Avrist Insurance; Marketing & Sales Support at The Royal Bank of Scotland; Acquisition & Alternate Channel Credit Card at ABN AMRO; and Customer Service Officer at Bank Bali. Joseph Puradi Wirakotan - Head of Retail Banking Credit Review Citizen of Indonesia. He was appointed as the Head of Retail Banking Credit Review Division on February 1, 2013. Earned his bachelor’s degree in Applied Science from Swinburne University of Technology in 1991. Previously, he held the position of SVP Customer Relationship Management System at HSBC; Group Head of Consumer Risk at PT Bank ICB Bumiputera Tbk; Deputy Head of Card Center Division at PT Bank Internasional Indonesia Tbk (BII); and AVP Consumer Banking at ABN AMRO Bank. He graduated from the management trainee of Citibank in 1994.

Joyce Puspa Chandrayani – Head of QNB First (concurrently serves as Act. Head of Product Development) Citizen of Indonesia. She was appointed as the Head of QNB First Division on August 11, 2014. Since May 2, 2016, assigned to concurrently serve as Head of Product Development at PT Bank QNB Indonesia. Earned her bachelor’s degree in Management from Widya Karya Catholic University Malang in 1986. Previously, she held the position of Regional Head for Consumer Banking at Standard Chartered Bank; Regional Head of Priority Banking, Consumer Banking - Head of ETB New Business, Usage & Acquisition Manager; and CC Product & CCPL Portfolio Manager at Standard Chartered Bank. Lina - Head of Corporate Secretary Profile of Lina could be found in the Head of Corporate Secretary section of this Annual Report. Monica Riesanty Wahyudi- Head of E-Banking Sales & Business Development Citizen of Indonesia. She was appointed as the Head of E-Banking Sales & Business Development Division on May 2, 2016. Previously serves as Head of Client Services since June 1, 2012. Earned her bachelor’s degree in Industrial Engineering from Trisakti University, Jakarta in 1992. Previously, she held the position of Commercial Banking Middle Office Division Head at PT Bank UOB Indonesia; Commercial Banking Business Development at the Royal Bank of Scotland; and Branch Manager at ABN AMRO Bank NV.

Novy Angela Andow - Head of Treasury Citizen of Indonesia. She was appointed as the Head of Treasury Division on September 22, 2014. Earned her bachelor’s degree in Management from Atmajaya Catholic University in 1994. Previously, she held the position of Treasury Sales Head since February 3, 2014; Director of Corporate Risk Solution at Royal Bank of Scotland Indonesia; Team Leader at ABN AMRO Bank; and Treasury Sales at American Express Bank. Rahma Diana - Head of HRBP & Organization Development Citizen of Indonesia. She was appointed as the Head of HRBP & Organization Development Division on May 2, 2016. Earned her bachelor’s degree in Psychology from Padjadjaran University, Bandung in 1999. Previously, she served as Human Resources Business Partner Head since joining PT Bank QNB Indonesia Tbk in 2015. In addition, she has also served as HR Generalist ICG & GF Citibank; HRBP, Recruitment & Training at Royal Bank of Scotland; HR Resourcing at Barclays Bank Plc; HR Relationship Manager GTO & Support at Standard Chartered Bank; HR & General Affair Department Head at PT Degremenont Indonesia; and several positions at PT Phillip Morris Indonesia.


317


Rasmoro Pramono Aji - Head of Network & Distribution Citizen of Indonesia. He was appointed as the Head of Network and Distribution Division on June 24, 2013. Earned his bachelor’s degree from Bogor Institute of Agriculture in 1989. He is also a graduate of the Officer Development Bank (ODP) from Bank Bali in 1991. Previously, he held the position of the Head of Customer Acquisition Team-Privilege Banking at UOB Indonesia; Head of Integration Retail Indonesia at Royal Bank of Scotland; Head of Islamic Bank Royal Bank of Scotland Indonesia; and Head of National Sales, Consumer Finance, and Head of Distribution - Van Gogh Preferred Banking at ABN AMRO Indonesia. Rr. Utami Tjipto - Head of Compliance & Procedure Profile of Rr. Utami Tjipto could be found in the Head of Compliance & Procedure Profile section of this Annual Report. Slamet Riyadi - Head of IT & Digital Banking Citizen of Indonesia. He was appointed as the Head of IT Digital Banking Division since October 5, 2015. Earned his bachelor’s degree in Economy from Pasundan University, Bandung in 1995, and master’s degree in Economy from Padjajaran University, Bandung in 2002. Previously, he held the position of Head of E-Financial Services at PT Bank QNB Indonesia Tbk since July 1, 2015; Business Development Head at PT Bank QNB Indonesia Tbk, Assistant Vice President Product & Solution Management as well as several other posts at PT Bank BNI (Persero) Tbk.

318


Steven Stevanus – Rewards Manager Citizen of Indonesia. He was appointed as the Rewards Manager since May 1, 2016. Earned his bachelor’s degree in Informatics from Bina Nusantara University in 2006. Prior to joining PT Bank QNB Indonesia Tbk, he served as Rewards & Incentive Manager at PT Bank CIMB Niaga Tbk; Research & Consultant at PT Spire Indonesia; and Management Trainee at PT Lion Super Indo. Sylvina Savitri - Head of Learning & Development Citizen of Indonesia. She was appointed as the Head of Learning & Development Division on May 2, 2016. Earned her bachelor’s degree in Psychology from Padjadjaran University, Bandung in 1998 and master’s degree in Psychology – Human Resources Management from University of Indonesia, Jakarta in 2004. Previously, she served as Learning & Development Head at PT Bank QNB Indonesia Tbk since joining in 2015; several positions at Experd HR Consulting Firm with the last position as Program Director & Lead Facilitator, Training & Organizational Development in 2014, Training & Development Officer at PT Perkin Elmer Batam; Recruitment Officer at PT Newmont Nusa Tenggara.

Thomas Hartono Tulus – Head of Financial Inclusion Citizen of Indonesia. He was appointed as the Head of Financial Inclusion Division since May 2, 2016. Earned his bachelor’s degree from Parahyangan Catholic University in 1994 and master’s degree in International Management from Gadjah Mada University in 1998. Previously, he held the position Head of Transaction Services since Jul 1, 2015, Strategic Planning Head since joining PT Bank QNB Indonesia Tbk in 2012. He also has had the position of Strategic Planning, Product Development, and Marketing in Bank UOB Indonesia, ABN AMRO Bank NV, Bank Danamon Indonesia, and Lippobank. Titis Satryo Utomo - Head of Alternate Channel Citizen of Indonesia. He was appointed as the Head of Alternate Channel Division on January 10, 2014. Earned his bachelor’s degree in Industrial Engineering from Bandung Institute of Technology in 1996. Previously, he held the position of Vice President 2 (VP 2) of Business Development & Acquisition for Retail Unsecure Business at PT Bank UOB Indonesia (2012-2013); Vice President (VP) for Consumer Finance Acquisition at Bank ANZ Indonesia (2009-2012); AVP for Consumer Finance Acquisition at Bank ABN Amro Indonesia (2005-2008); and Personal Lending Product Manager at Citibank N.A (2004-2005).

Tomi Parisianto Wibowo - Head of Finance & Accounting Citizen of Indonesia. He was appointed as the Head of Finance and Accounting Division on June 3, 2013. Earned his bachelor’s degree in Accounting from University of Indonesia in 1997 and is certified as a public accountant from the Indonesian Institute of Accountants in 2002 and certified as Indonesian Chartered Accountant in 2014. Previously, he held the position of Vice President of Financial Control Group Head at PT Bank ICB Bumiputera Tbk, Jakarta. He also had led several financial audit engagements at Financial Assurance Division at PricewaterhouseCoopers (PwC), Jakarta and Ernst & Young (EY), Jakarta.

Wendriani Ika Lukito - Head of Commercial Credit Citizen of Indonesia. She was appointed as the Head of Commercial Credit since July 1, 2015. Earned her bachelor’s degree in Finance from California State University of Fullerton, United States in 2005. Previously, she held the position of Area Manager Commercial Banking at PT Bank QNB Indonesia Tbk since March 4, 2013; Relationship Manager for Large Commercial Division and Business Manager for Commercial Banking Division at PT Bank UOB Buana.

Tota Melanie Loembantobing – Head of Operations Citizen of Indonesia. She was appointed as the Head of Operations since March 1, 2016. Earned her bachelor’s degree in Educational Psychology from Institut Keguruan dan Ilmu Pendidikan, Jakarta in 1990, and master degree in Finance from University of the District of Columbia, Washington, D.C. in 1994. Previously, she served as Chief Auditor of PT Bank QNB Indonesia Tbk since March 26, 2014. Prior to joining the Bank, she served as Regional Operations Head of PT Bank CIMB Niaga Tbk (2013-2014); Area Operations and Services Manager of Citibank, N.A. (2012-2013); Branch Services Region Head of Citibank (2011-2012); Consumer Services Group Head of AIG (American Insurance Group - formerly PT Chartis Insurance Indonesia) (20042011); and Business Manager of PT Anugerah Tevica. Developed her career in Citibank (1996-2003) with last assignment as Customer Relationship Manager.


319


Capital Market Supporting Profession and Institutions Biro Administrasi Efek

PT Adimitra Jasa Korpora Plaza Property 2nd Floor Jl. Perintis Kemerdekaan Kompleks Pertokoan Pulomas Blok VIII No. 1 Jakarta Timur 13210 Tel: (+62 21) 478 815 15 Fax: (+62 21) 470 969 7 Services provided: Biro Administrasi Efek Term of Assignment: 1. November 2015 – October 2016 2. November 2016 – October 2017 Fee: 1. Rp24.006.000 2. Rp30.006.000

Kantor Akuntan Publik

Purwantono, Sungkoro & Surja, a member Firm of Ernst & Young Global Limited Indonesia Stock Exchange Building Tower 2, 7th Floor Jl. Jenderal Sudirman Kav. 52-53 Jakarta 12190 Indonesia Tel: (+62 21) 528 950 00 Fax: (+62 21) 528 941 00 Services provided: Akuntan Publik Term of Assignment: 2016 Fee: Rp1,342,000,000

320


Notaris

Notaris Fathiah Helmi, S.H Graha Irama Lt. 6 Jl. HR. Rasuna Said Blok X-1 Kav. 1&2 Kuningan, Jakarta Selatan 12950 Tel: (+62 21) 529 073 04-6 Fax.: (+62 21) 526 113 6 Services provided: Kenotariatan Term of Assignment: 2016 Fee: Rp46.650.000

Lembaga Pemeringkat

PT Pemeringkat Efek Indonesia Panin Tower, Senayan City 17th Floor Jl.Asia Afrika Lot.19, Jakarta 10270 Tel: (+62 21) 727 823 80 Fax: (+62-21) 727 823 70 Services provided: Term of Assignment: Fee: -

Bursa Efek Indonesia

PT Bursa Efek Indonesia Indonesia Stock Exchange Building 1st Tower, Jl. Jend. Sudirman Kav. 52-53 - Jakarta 12190 Tel: (+62 21) 515 051 5 Fax: (+62 21) 515 415 3 Email: [email protected] Website: www.idx.co.id Services provided: Pencatatan saham Term of Assignment: 2016 Fee: Rp247.500.000

KSEI

PT Kustodian Sentral Efek Indonesia Indonesia Stock Exchange Building 1st Tower Lantai 5 Jl. Jend. Sudirman Kav. 52-53, Jakarta 12190 Indonesia Tel: (+62 21) 515 285 5 Fax: (+62 21) 529 911 99 Toll Free : 080 018 657 34 Email : [email protected] Website : www.ksei.co.id Services provided: Jasa Kustodian Sentral Term of Assignment: 2016 Fee: Rp11.000.000

Branch Office Addresses JAKARTA Bank QNB Indonesia KC SCBD QNB Tower Lantai Dasar, 18 Parc SCBD, Jl. Jenderal Sudirman Kav 52 - 53 Jakarta 12190 Tel: (+62 21) 515 505 8 Fax: (+62 21) 515 538 8 Bank QNB Indonesia KCP Central Park Komplek Central Park Ruko Garden Shopping Arcade Blok Beaufort 8 No.8 EJ Jl. Tanjung Duren Raya Kav. 5-9 Jakarta 11470 Tel: (+62 21) 292 064 00 Fax: (+62 21) 292 064 01 Bank QNB Indonesia KCP Green Garden Rukan Golden Green No.7 Jl. Kedoya Raya, Kedoya Utara Jakarta 11520 Tel: (+62 21) 581 913 3 Fax: (+62 21) 582 912 6 Bank QNB Indonesia KCP Kapuk Komplek Duta Harapan Indah Jl. Kapuk Muara Blok A/6 No. 7 Jakarta 14460 Tel: (+62 21) 668 342 9 Fax: (+62 21) 662 696 1 Bank QNB Indonesia KCP Menara Jamsostek Gedung Menara Jamsostek Lantai Dasar, Menara Selatan Jl. Jend Gatot Subroto Kav. 38 Jakarta 12710 Tel: (+62 21) 252 548 0 Fax: (+62 21) 252 547 0

Bank QNB Indonesia KCP Permata Hijau The Belleza Shopping Arcade Apart. Belleza Arteri Permata Hijau Jl. Letnan Jenderal Soepono No.34, Blok Sa-06, Kebayoran lama Jakarta 12240 Tel: (+62 21) 299 160 22 Fax: (+62 21) 299 161 60

Bank QNB Indonesia KCP Sunter Jl. Danau Sunter Utara Blok G7 Kav. 1 No. 7 Sunter Podomoro Jakarta 14350 Tel: (+62 21) 653 030 66 Fax: (+62 21) 653 031 10

Bank QNB Indonesia KCP Pluit Ruko Sentra Bisnis Pluit Jl. Pluit Sakti Raya No. 28 Blok A.12 Jakarta 14450 Tel: (+62 21) 668 172 2 Fax: (+62 21) 668 122 6

Bank QNB Indonesia KC Tanah Abang Jl. KH. Fachrudin 36 Blok BB No. 2 Tn. Abang Bukit Jakarta 10250 Tel: (+62 21) 398 317 08 Fax: (+62 21) 344 046 8

Bank QNB Indonesia KCP Pondok Indah Jl. Sultan Iskandar Muda no. 28L Jakarta 12240 Tel: (+62 21) 728 953 77 Fax: (+62 21) 723 803 6

Bank QNB Indonesia KCP Kelapa Gading Jl. Boulevard Blok LB-3 No. 22 Jakarta 14240 Tel: (+62 21) 453 303 3 Fax: (+62 21) 453 305 5

Bank QNB Indonesia KCP Puri Indah Jl. Puri Indah Raya Blok I No. 19 Jakarta 11610 Tel: (+62 21) 583 546 66 Fax: (+62 21) 583 576 66

Bank QNB Indonesia KC Kebayoran Jl. Panglima Polim No. 9 - 10 Jakarta 12160 Tel: (+62 21) 727 973 23 Fax: (+62 21) 723 411 1

Bank QNB Indonesia KCP Mega Kuningan Gedung Kantor Taman A9 Blok A9/B9 unit A1 Kawasan Mega Kuningan Jakarta 12950 Tel: (+62 21) 576 108 8 Fax: (+62 21) 576 107 7

Bank QNB Indonesia KCP Pulo Gadung Pulo Gadung Trade Center Jl Raya Bekasi KM 21, Ruko A2/20 Kawasan Industri Pulo Gadung Jakarta 13920 Tel: (+62 21) 468 002 22 Fax: (+62 21) 468 003 00

Bank QNB Indonesia KCP Mangga Dua Mangga Dua Blok E IV No. 4 Jakarta 14430 Tel: (+62 21) 600 987 0 Fax: (+62 21) 600 987 1

Bank QNB Indonesia Cabang Taman Palem Ruko Taman Palem Lestari Jl. Kamal Raya Outer Ringroad, Blok A5 No.58 Cengkareng, Jakarta 11730 Tel: (+62 21) 556 200 3 Fax: (+62 21) 556 200 4


321


Bank QNB Indonesia KC Gajah Mada Mediterania Gajah Mada Tower Alpha No. TUD16 Lt. UG Jl. Gajah Mada No. 174 Jakarta 11130 Tel: (+62 21) 630 215 1 Fax: (+62 21) 630 215 2 Bank QNB Indonesia KCP Roxy Komp. Ruko Roxy Mas Jl. KH. Hasyim Ashari Blok E1 No.6 Kel. Cideng Jakarta Pusat 10150 Tel: (+62 21) 638 595 55 Fax: (+62 21) 638 522 55

TANGERANG Bank QNB Indonesia KCP Alam Sutera Perumahan Alam Sutera Komp. Pertokoan Sutera Niaga I No. 35, Jl. Raya Serpong Tangerang 15310 Tel: (+62 21) 539 933 2 Fax: (+62 021) 539 933 8

Bank QNB Indonesia KCP Jababeka Cikarang Komplek Ruko Capitol Business Park Blok 2A, Jl. Niaga Raya, Desa Pasir Sari, Kecamatan Cikarang Selatan, Kabupaten Bekasi, Jawa Barat 17530 Tel: (+62 21) 898 358 90 Fax: (+62 21) 898 358 95

BANDUNG Bank QNB Indonesia KC Bandung Dago Jl. Ir. H. Juanda No. 11 (Dago) Bandung 40116 Tel: (+62 22) 842 810 91 Fax: (+62 22) 422 286 0 Bank QNB Indonesia KCP Bandung BKR Jl. BKR No. 100 Bandung 40254 Tel: (+62 22) 522 586 8 Fax: (+62 22) 522 288 3

SEMARANG DEPOK Bank QNB Indonesia KCP Depok Jl. Margonda Raya No.197 A Depok 16423 Tel: (+62 21) 772 189 99 Fax: (+62 21) 772 189 89

BEKASI Bank QNB Indonesia KCP Bekasi Kalimalang Commercial Centre Jl. Ahmad Yani Blok A2 No. 1 Bekasi 17144 Tel: (+62 21) 889 655 61 Fax: (+62 21) 889 655 62

322


Bank QNB Indonesia KC Semarang Gajah Mada Jl. Gajah Mada No.101 B Semarang 50134 Tel: (+62 24) 865 690 99 Fax: (+62 24) 865 690 88 Bank QNB Indonesia KCP Semarang MT. Haryono Jl. MT. Haryono No. 729 Semarang 50242 Tel: (+62 24) 844 899 9 Fax: (+62 24) 844 399 9

SOLO Bank QNB Indonesia KC Solo Jl. Slamet Riyadi No. 312 Surakarta, Jawa Tengah 57141 Tel: (+62 21) Fax: (+62 21)

SURABAYA Bank QNB Indonesia KC Surabaya Darmo Jl. Raya Darmo No. 108 Surabaya 60264 Tel: (+62 31) 568 753 0 Fax: (+62 31) 567 809 0 Bank QNB Indonesia KCP Surabaya Kembang Jepun Jl. Kembang Jepun No. 88 Surabaya 60161 Tel: (+62 31) 354 268 83 Fax: (+62 31) 354 263 1 Bank QNB Indonesia KCP Surabaya Ngagel Kom. Pertokoan RMI D1-D2 Jl. Ngagel Jaya Selatan Surabaya 60238 Tel: (+62 31) 501 324 2 Fax: (+62 31) 501 324 5

PASURUAN Bank QNB Indonesia KCP Pasuruan Ruko Grand Parimas Blok A-6 Jl. Panglima Sudirman Pasuruan – 67115 Tel: (+62 343) 564 577 7 Fax: (+62 343) 564 566 6

PEMATANG SIANTAR Bank QNB Indonesia KC Pematang Siantar Jl. Sutomo No. 5L Pematang Siantar 21117 Tel: (+62 622) 296 66 Fax: (+62 622) 246 91

BATAM Bank QNB Indonesia KC Batam Komplek Jodoh Square Blok A No. 2 - 3 Jl. Raja Ali Haji Sei Jodoh Batam 29453 Tel: (+62 778) 456 126 Fax: (+62 778) 424 281

MAKASSAR Bank QNB Indonesia KC Makassar Jl. Veteran No. 402 Makassar 90124 Tel: (+62 411) 853 422 Fax: (+62 411) 856 292

Bank QNB Indonesia KCP Medan Asia Jl. Asia No. 97P Medan 20212 Tel: (+62 61) 735 111 8 Fax: (+62 61) 735 295 7 Bank QNB Indonesia KCP Medan Petisah Jl. Rotan No. 65 Medan 20112 Tel: (+62 61) 453 761 6 Fax: (+62 61) 452 350 1 Bank QNB Indonesia KCP Medan Bogor Jl. Bogor No. 55 Medan 20212 Tel: (+62 61) 452 336 2 Fax: (+62 61) 453 611 6 Bank QNB Indonesia KCP Krakatau Jl. Gunung Krakatau No. 88C Medan 20239 Tel: (+62 61) 664 103 1 Fax: (+62 61) 664 103 2 Bank QNB Indonesia KCP Medan Centre Point Komp. Ruko Centre Point Blok G No. 19, Kel. Gang Buntu, Kec. Medan Timur Kota Medan, Sumatera 20231 Tel: (+62 61) 805 108 78 Fax: (+62 61) 805 104 89

MEDAN Bank QNB Indonesia KC Medan Pemuda Jl. Pemuda no. 5 Medan 20151 Tel: (+62 61) 415 292 9 Fax: (+62 61) 415 565 6 Bank QNB Indonesia KCP Medan Sutomo Jl. Sutomo No. 128 Medan 20213 Tel: (+62 61) 736 250 0 Fax: (+62 61) 734 323 3

BALIKPAPAN Bank QNB Indonesia KC Balikpapan Jl. Jend. Sudirman No. 353 Balikpapan 76114 Tel: (+62 542) 882 095 5 Fax: (+62 542) 882 095 6

PALEMBANG Bank QNB Indonesia KC Palembang Jl. Jenderal Sudirman No. 589-592 Kel. 20 Ilir III, Kec. Ilir Timur 1 Palembang 30128 Tel: (+62 711) 318 853 Fax: (+62 711) 318 854

PEKANBARU Bank QNB Indonesia KCP Pekanbaru Riau Jl. Riau No. 149 G Pekanbaru 28282 Tel: (+62 761) 444 68 Fax: (+62 761) 444 70 Bank QNB Indonesia KC Pekanbaru Sudirman Jl. Jend. Sudirman No. 303 & 305 Pekanbaru 28112 Tel: (+62 761) 333 08 Fax: (+62 761) 333 98 Bank QNB Indonesia KCP Pekanbaru Nangka Jl. Tuanku Tambusai No. 305 Pekanbaru 28155 Tel: (+62 761) 429 91 Fax: (+62 761) 429 89

DENPASAR Bank QNB Indonesia KC Renon Jl. Raya Puputan Renon No. 58A Denpasar 80234 Tel: (+62 361) 233 777 Fax: (+62 361) 239 779


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Reference of OJK Circular Letter No. 30/SEOJK.04/2016 Subject & Explanation I.

Page

Highlights of Key Financial Information

1. Highlights of Key Financial Information contains financial information in comparative form over a period of 3 (three) fiscal years or since the commencement of business if the Issuer or Listed Company has been running its business activities for less than 3 (three) years, at least contains: a. Operating sales/revenue; b. Gross profit (loss); c. Profit (loss) d. Net profit attributable to owners of the parent and non-controlling interest; e. Net comprehensive profit; f. Net comprehensive profit attributable to owners of the parent and noncontrolling interest; g. Profit (loss) per share; h. Total assets; i. Total liabilities; j. Total equity; k. Profit (loss) ratio to total assets; l. Profit (loss) ratio to equity; m. Profit (loss) ratio to revenue; n. Current ratio; o. Liabilities ratio to equity; p. Liabilities ratio to total assets; and q. Other relevant financial ratio and information about the Issuer or Listed Company or its industry.

10 - 13

II. Shares Information Shares information (if any) shall include at least: 1. Shares published for every quarter (if any) presented in the comparison of latest 2 (two) fiscal years (if any), at least include: a. Number of issued shares; b. Market capitalization based on the price on the Stock Exchange where shares are listed; c. Highest, lowest, and closing price based on the price on the Stock Exchange where shares are listed; and d. Transaction volume on the Stock Exchange where shares are listed.

nformation in the letter a is disclosed by the Issuer which is a Listed Company whose shares are listed or not listed on the Stock Exchange. Information in the letter b, letter c, and letter d are only disclosed if the Issuer is a Listed Company and its shares are listed on the Stock Exchange.

2. In case of corporate actions, such as stock split, reverse stock, shares dividend, bonus shares, and reduction in nominal share prices, the share information referred in point 2 shall be added explanations which included at least:

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17

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Subject & Explanation a. The execution date of corporate action; b. Ratio of stock split, reverse stock, share dividend, bonus share, and reduction in share price; c. Shares volume issued before and after corporate actions; and d. Shares price before and after corporate actions.

In case of suspended stock trading, and/or delisting in the fiscal year, the Issuer or Listed Company explains the reason for such suspension and/or delisting.

In case of stock suspension and/or delisting as referred to point 3 still continue until the end of Annual Report period, the Issuer or Listed Company shall explain the actions of the company to resolve such stock suspension and/or delisting.

III. Board of Directors’ Report Board of Directors’ Report shall include at least: 1. A brief description of the Issuer’s or Listed Company’s performance, at least include: a. Strategy and strategic policy of Issuer or Listed Company; b. Comparison between achievement of results and targets; and c. Challenges faced by the Issuer or Listed Company.

46 - 49

2. An overview of business prospects.

49

3. Implementation of Good Corporate Governance by the Issuer or Listed Company; and

48

4. Changes in the composition of the Board of Directors’ members and the reason of such changes (if any).

48 - 49

IV. Board of Commissioners’ Report Board of Commissioner’s Report shall include at least: 1. Assessment on the performance of the Board of Directors in managing the company; 2. Supervision of strategy implementation of Issuer or Listed Company.

39 39 - 40

3. View on the prospects of the Issuer or Listed Company as established by the Board of Directors. 4. View on the implementation of Issuer’s or Listed Company’s governance. 5. Changes in the composition of the Board of Commissioners’s members and the reason of such changes (if any); and 6. Frequency and means of providing advice to the members of the Board of Directors.


41 40 40 - 41 40

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Subject & Explanation

Page

Profile of Issuer or Listed Company shall include at least: 1. Name of the Issuer or Listed Company including if there is a change of name, the reason for the change, and the effective date of the name change in the fiscal year.

60

V. Company Profile

2. Access to the Issuer or Listed Company including branch office or representative office which allows the public to obtain information about the Issuer or Listed Company, including: a. Address; b. Phone number; c. Facsimile number; d. E-mail address; and e. Website address; 3. Brief history of Issuer or Listed Company. 4. Vision and mission of the Issuer or Listed Company.

60

64 - 65 66

5. The business activities according to the latest articles of association, business activities carried on in the fiscal year, and type of products and/or services provided.

69 - 76

6. Organizational structure of Issuer or Listed Company in the form of a chart, giving the names and titles and at least up to the one level below the Board of Directors.

80 - 81

7. Profile of the Board of Directors, at least includes: a. Name and position in accordance with the duties and responsibilities; b. Latest picture; c. Age; d. Citizenship; e. Educational history; f. Work experience, includes information as follows: 1) legal basis of appointment of Board of Directors’ members in the Issuer or Listed Company; 2) concurrent position, both as members of the Board of Directors, members of the Board of Commissioners, and/or members of the committee as well as other position (if any); and 3) work experience as well as the working period both inside or outside the Issuer or Listed Company; g. Training attended by the Board of Directors’ members to improve the competence in the fiscal year (if any), and h. Affiliate relationships with another member of the Board of Directors, Board of Commissioners’ members, and ultimate shareholders (if any) including the name of affiliated parties;

50 - 54

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Page

8. Profile of the Board of Commissioners, at least includes: a. Name; b. Latest picture; c. Age; d. Citizenship; e. Educational history; f. Work experience, includes information as follows: 1) legal basis of appointment of Board of Commissioners’ members excluding the Independent Commissioner in the Issuer or Listed Company; 2) legal basis of appointment of Board of Commissioners’ members as Independent Commissioner in the Issuer or Listed Company; 3) concurrent position, both as members of the Board of Commissioners, members of the Board of Directors, and/or members of the committee as well as other position (if any); and 4) work experience as well as the working period both inside or outside the Issuer or Listed Company; g. Training attended by the Board of Commissioners’ members to improve the competence in the fiscal year (if any), and h. Affiliate relationships with another member of the Board of Commissioners and ultimate shareholders (if any) including the name of affiliated parties; and i. Independence statement of Independent Commissioner in the event of the Independent Commissioner has served more than 2 (two) periods (if any);

42 - 44

9. In case of a change in the composition of the Board of Directors and/or the Board of Commissioners that occurred after the fiscal year ends until the deadline for submission of the Annual Report, then the structure sets out in the Annual Report is the recent and previous composition of the Board of Directors’s members and/or Board of Commissioners’ members.

N/A

10. The number of employees and a description of the distribution of educational level and age of employees during the fiscal year.

97 - 108

11. The names of shareholders and percentage of ownership at the end of the fiscal year, which consists of: a. Shareholders owning 5% (five percent) or more shares of the Issuer or Listed Company; b. Member of Board of Directors and Board of Commissioners who hold shares of the Issuer or Listed Company; and c. Public shareholders, a group of shareholders who each own less than 5% (five percent) of the shares of Issuer or Listed Company;

15 - 16

12. The number of shareholders and the percentage of ownership as of the end of fiscal year based on the classification: a. Local institution ownership; b. Foreign institution ownership; c. Local individual ownership; and d. Foreign individual ownership;


16

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Page

13. Information on the major and controlling shareholder of the Issuer or Listed Company, either directly or indirectly, to the individual owners, presented in the form of schemes or charts.

15

14. Name of subsidiaries entities, associates, joint venture company in which the Issuer or Listed Company has joint controlled entities, along with shareholding percentage, line of bussiness and status of such Issuer or Listed Company (if any). For subsidiary entities, please add information about the address.

N/A

15. Chronology of share listing, number of shares, nominal value, and the offering pricefrom the beginning of listing until the end of fiscal year and name of stock exchange where the Issuer’s or Listed Company’s share is listed (if any).

17

16. Chronology of other Securities listing other than Securities referred in point 15, which at least includes the name of Securities, year of issuance, maturity date, offering value, and Securities rating (if any).

N/A

17. Name and address of capital market institutions and/or supporting professions.

320

18. In the event of capital market supporting professions that provide periodic service to the Issuer or Listed Company, the information about the service provided, fee, and assignment period shall be disclosed; and

320

19. Award and certification received by the Issuer or Listed Company, both on a national and international scale during the recent fiscal year (if any), which contains: a. Name of award and/or certification; b. Agency or institution that provides the award; and c. The validity period of award and/or certification (if any).

30 - 31

VI. Management Discussion and Analysis Management discussion and analysis contains the analysis and discussion of financial statements and other important information with an emphasis on material changes that occurred during the fiscal year, which at least contain: 1. Operational review per business segment in accordance with the type of industry of the Issuer or Listed Company, contains at least: a. Production,which includes the process, capacity, and development; b. Revenue/sales; and c. Profitability. 2. Comprehensive financial performance analysis which includes a comparison between the last 2 (two) fiscal year, explanation about the cause of changes and the impact, among others concerning: a. Current assets, non-current assets, and total assets; b. Short-term liabilities, long-term liabilities, and total liabilities; c. Equity;

328


89 - 93

109 - 119

Page

Subject & Explanation d. Revenue/sales, expense, profit/loss, other comprehensive income, and total of comprehensive income/loss; and e. Cash flow. 3. Ability to pay debt by presenting relevant ratio calculation.

120

4. Issuer’s or Listed Company’s collectability by presenting relevant ratio calculation.

120

5. Capital structure and management policy on such capital structure with the basis for determining such policy.

120 - 121

6. Discussion on material ties for the investment of capital goods with description includes at least: a. The purpose of the ties; b. Source of funds expected to fulfill the said ties; c. Currency of denomination; and d. Steps taken by the Issuer or Listed Company to protect the risk against the position of related foreign currency.

121

7. Discussion on capital goods investment realized in the last fiscal year, at least includes: a. Type of capital goods investment; b. Objective of capital goods investment; and c. The investment value of capital goods

121

8. Significant information and fact subsequent to the accountant’s report date (if any).

121

9. Business prospects of the Issuer of Listed Company in connection with the condition of industry, economy in general, and the international market supported by quantitative data from a reliable data source.

129

10. Comparison between target/projection in the beginning of fiscal year and the achieved result (realization), which includes: a. Revenue/sales; b. Income (loss); c. Capital structure; or d. Other matters that considered important for the Issuer or Listed Company.

121

11. Issuer’s or Listed Company’s target/projection in 1 (one) year, which includes: a. Revenue/sales; b. Income (loss); c. Capital structure; d. Dividend policy; or e. Other matters that considered important for the Issuer or Listed Company.

121


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12. Marketing aspect for the product and service of Issuer or Listed Company, such as: marketing strategy and market share.

126 - 128

13. Description of the dividend for 2 (two) last fiscal years (if any), which at least includes: a. Dividend policy; b. Date of cash dividend payment and/or date of non-cash dividend distribution; c. Amount of dividend per share (cash/non-cash); and d. Amount of paid dividend per year.

121

14. Actual use of proceeds from the Public Offering, provided that: a. In the event that during fiscal year, the Issuer has the obligation to report realization of the use of proceeds, thus the cumulative use of the proceeds from the Public Offering shall be disclosed until the last fiscal year; and b. In the event of any changes the in use of proceeds as stipulated in the Regulation of Financial Services Authority on Report on Realization of the Use of Proceeds from Public Offerings, Issuers shall explain such changes.

121

15. Significant information (if any) about investation, expansion, divestment, business merger/takeover, acquisition, debt/equity restructuring, affiliated transaction, and transaction that contains conflict of interest occurred in fiscal year, among others includes: a. Date, value, and transaction object; b. Name of the parties conducting transaction; c. Nature of affiliation (if any); d. Description about transaction fairness; and e. Relevant regulation compliance

122

16. Changes in regulation which have a significant impact on the Issuer and Listed Company and the impact on financial statements (if any); and

123 - 124

17. Changes in the accounting policy, reason and its impact on financial statements (if any).

124 - 125

VII. Corporate Governance Governance of Issuer or Listed Company shall contain at least a brief description about: 1. The Board of Directors, among others includes: a. The duties and responsibilities of each member of the Board of Directors; b. Statement that the Board of Directors has the Board of Directors’ guidelines or charter; c. Procedure, basis of stipulation, structure, and the amount of remuneration for each member of the Board of Directors, as well as the relation between remuneration and the Issuer’s or Listed Company’s performance; d. Policy and the implementation of the Board of Directors meeting frequency, including meeting with Board of Commissioners, and attendance of the Board of Directors in such meeting; e. Information on previous GMS resolution, which includes: 1) GMS resolution realized in the fiscal year; and 2) the reason in the event of a resolution that has not been realized;

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201 - 217

Page

Subject & Explanation f. g.

Information on the GMS resolution in the fiscal year, which includes: 1) GMS resolution realized in the fiscal year; and 2) the reason in the event of a resolution that has not been realized; and The assessment on the performance of committee which supports the implementation of the Board of Directors’ duties;

154 - 157 158 - 164

2. The Board of Commissioners, among others includes: a. The duties and responsibilities of each member of the Board of Commissioners; b. Statement that the Board of Commissioners has the Board of Commissioners’ guidelines or charter; c. Procedure, basis of stipulation, structure, and the amount of remuneration for each member of the Board of Commissioners; d. Policy and the implementation of the Board of Commissioners meeting frequency, including meeting with Board of Directors, and level of attendance of the members of the Board of Commissioners in such meeting; e. Issuer’s or Listed Company’s policy on the assessment of the performance of the Board of Directors’ and Board of Commissioners’ members and its implementation, which includes at least: 1) procedure of performance assessment; 2) the criteria used; and 3) the party carrying out the assessment; f. The assessment on the performance of committee which supports the implementation of the Board of Commissioners’ duties; and g. In the event that the Board of Commissioners does not establish a Nomination and Remuneration Committee, shall publish information at least about: 1) The reason why such committee is not established; and 2) Procedure of nomination and remuneration carried out in the fiscal year;

165 - 183

3. Sharia Supervisory Board, for Issuer or Listed Company which carries out business activity based on sharia principle as stated in the article of association, which includes at least: a. Name; b. Duties and responsibilities of the Sharia Supervisory Board; and c. Frequency and means of providing advice and suggestion as well as the supervision on the fulfillment of Sharia Principle in the Capital Market for the Issuer of Listed Company;

N/A

4. Audit Committee, among others includes: a. Name and position in the committee; b. Age c. Citizenship; d. Educational history; e. Work experience, which includes information: 1) basis of appointment as the member of the committee; 2) concurrent position, both as the member of the Board of Commissioners, member of the Board of Directors, and/or member of committee as well as other position (if any); and 3) work experience and working period both inside and outside the Issuer or Listed Company;

184 - 191


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f. Working period and term of service of the member of Audit Committee; g. Independence statement of the Audit Committee; h. Policy and implementation of Audit Committee meeting frequency and level of attendance of the member of Audit Committee in such meeting; i. Training attended in the fiscal year (if any); and j. Implementation of Audit Committee’s activity in the fiscal year in accordance with the Audit Committee guideline or charter; 5. Other commitees that the Issuer or Listed Company have in order to support the function and duties of the Board of Directors and/or Board of Commissioners, such as Nomination and Remuneration Commitee, which includes: a. Name and position in the committee; b. Age; c. Citizenship; d. Educational history; e. Work experience, which includes information: 1) basis of appointment as the member of the committee; 2) concurrent position, both as the member of the Board of Commissioners, member of the Board of Directors, and/or member of committee as well as other position (if any); and 3) work experience and working period both inside and outside the Issuer or Listed Company; f. Working period and term of service of the member of committee; g. Description of duties and responsibilities; h. Statement of the committee’s guidelines or charter; i. Independency statement of the committee; j. Policy and implementation of committee meeting frequency and level of attendance of the member of committee in such meeting; k. Training attended in the fiscal year (if any); and l. Brief description of the implementation of committee’s activity in the fiscal year;

191 - 200

6. Corporate Secretary, among others includes; a. Name; b. Domicile; c. Work experience, which includes information: 1) basis of appointment as the Corporate Secretary; 2) work experience and working period both inside and outside the Issuer or Listed Company; d. Educational history; e. Training attended in the fiscal year (if any); and f. Brief description of the duties implementation of Corporate Secretary in the fiscal year;

247 - 249

7. Internal Audit Unit, among others includes: a. Name of head of Internal Audit Unit; b. Work experience, which includes information: 1) Basis of appointment as the head of Internal Audit Unit; and 2) Work experience and working period both inside and outside the Issuer or Listed Company;

241 - 244

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Page

Subject & Explanation c. d. e. f. g. h.

Qualification and certification as internal auditor (if any); Training attended in the fiscal year; Structure and position of the Internal Audit Unit; Description of duties and responsibilities; Statement of Internal Audit Unit’s guidelines or charter; and Brief description about the duties implementation of Internal Audit Unit in the fiscal year;

8. Description about internal control system implemented by the Issuer or Listed Company, at least includes: a. Financial and operational control, as well as compliance towards other regulations; and b. Review on the effectiveness of internal control system; 9. Risk management system implemented by the Issuer or Listed Company, at least includes: a. General description about the Issuer’s or Listed Company’s risk management system; b. Type of risk and its management; and c. Review on the effectiveness of Issuer’s or Listed Company’s risk management;

284

250 - 283

10. Important case encountered by Issuer or Listed Company, subsidiary entities, member of Board of Directors and Board of Commissioners, among others includes: a. Subject of the case/claim; b. Status of settlement of case/claim; and c. Potential impacts on the condition of the Issuer or Listed Company;

285

11. Information about administrative sanctions imposed on the Issuer or Listed Company, member of the Board of Commissioners and Board of Directors, by the Capital Market authority and others in the last fiscal year (if any);

285

12. Information about Issuer’s or Listed Company’s code of conduct which includes: a. Principles of the code of conduct; b. Form of dissemination of code of conduct and its enforcement attempt; and c. Statement that the code of conduct is applicable to the members of the Board of Directors, Board of Commissioners, and employees of the Issuer or Listed Company;

286 - 287

13. Information on corporate culture or corporate values (if any);

286 - 287

14. Description of share ownership program by employee and/or management that implemented by the Issuer or Listed Company (if any), among others includes: a. Number of shares and/or share options; b. Exercise period; c. Requirement of eligible employee and/or management; and d. Exercise price


121

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15. Description of whistleblowing system in the Issuer and Listed Company (if any), among others includes: a. Mechanism of whistleblowing system; b. Protection for the whistleblower; c. Complaint handling; d. Party that manages the complaint; and e. Result of complaint handling, at least includes: 1) Number of incoming and processed complaints in the fiscal year; and 2) Complaint follow-up;

289

16. Implementation Corporate Governance Guidelines for the Issuer or Listed Company which issues Equity-type Shares, which includes: a. Statement regarding the recommendations that have been implemented; and/ or b. Explanation of recommendations that have not been implemented, as well as the reason and implementation alternatives (if any);

N/A

VIII. Social and Environmental Responsibility of Issuer or Listed Company 1. Information of social and environmental responsibility of Issuer or Listed Company including policy, kind of program, and cost incurred, among others covering the aspects of: a. Environmental, among others: 1) use of environmentally friendly material and energy that could be recycled; 2) issuer’s or Listed Company’s waste treatment system; 3) complaint mechanism of environmental issue; and 4) certificate on environmental; b. Practice of employment, occupational health and safety, among others: 1) equality of gender and work opportunity; 2) facility and work safety; 3) employee turnover rate; 4) occupational accident rate 5) training; 6) remuneration; 7) complaint mechanism of employment issue; c. Community and social development, among others: 1) local worker recruitment; 2) community empowerment around the Issuer or Listed Company, among others, through the use of raw material produced by the community or educational training; 3) social facility repairement; 4) other donations; and 5) socialization of the policy and procedure of anti-corruption in the Issuer or Listed Company, and training of anti-corruption (if any);

334


304

305 - 307

308 - 309

Page


310 - 313

d. Product and/or service responsibility, among others: 1) customer’s health and safety; 2) product and/or service information; 3) facility, total, and customer complaint handling. 2. In the event that Issuer or Listed Company presents information of social and environmental responsibility as stated in point 1) in separated report such as in the form of corporate social responsibility report or sustainability report, Issuer or Listed Company is excluded to disclose information on social and environmental responsibility in the Annual Report; and

N/A

3. Such report referred in point 2) is submitted to the Financial Services Authority in conjunction with submission of Annual Report.

N/A

IX. Audited Financial Statements 1. The annual financial statements contained in the Annual Report shall compiled in accordance with Financial Accounting Standard in Indonesia and has been audited by Accountant. Such financial statements shall contained statement about financial statements accountability as set out in Capital Market regulation which governing the Board of Directors’ responsibility upon the financial statements or the legislation in the Capital Market sector which governing the periodic report of Securities Company in terms of the aforementioned is Securities Company; and

337

X. Statements of the Members of Board of Directors and Board of Commissioners on Responsibility for the Annual Report 1. Statement of the members of Board of Commissioners on the responsibility for the Annual Report is prepared in accordance with the format of the Statement of the Members of Board of Directors and Board of Commissioners on Responsibility for the Annual Report as stated in the Appendix which is an integral part of this Circular Letter of Financial Services Authority.

314 - 315


335


336


PT Bank QNB Indonesia Tbk Laporan keuangan tanggal 31 Desember 2016 dan untuk tahun yang berakhir pada tanggal tersebut beserta laporan auditor independen/ Financial statements as of December 31, 2016 and for the year then ended with independent auditors’ report

The original financial statements included herein are in Indonesian language.

PT BANK QNB INDONESIA TBK LAPORAN KEUANGAN TANGGAL 31 DESEMBER 2016 DAN UNTUK TAHUN YANG BERAKHIR PADA TANGGAL TERSEBUT BESERTA LAPORAN AUDITOR INDEPENDEN

PT BANK QNB INDONESIA TBK FINANCIAL STATEMENTS AS OF DECEMBER 31, 2016 AND FOR THE YEAR THEN ENDED WITH INDEPENDENT AUDITORS’ REPORT

Daftar Isi

Table of Contents

Halaman/ Page Laporan Auditor Independen

Independent Auditors’ Report

Laporan Posisi Keuangan ……………………………….

1-2

.………………………. Statement of Financial Position

Laporan Laba-Rugi dan Penghasilan Komprehensif Lain ………………………………….

3-4

Statement of Profit or Loss and ............................ Other Comprehensive Income

Laporan Perubahan Ekuitas ………………. ……………

5

..………………………Statement of Changes in Equity

Laporan Arus Kas…………………………………………

6-7

….…………………………… Statement of Cash Flows

Catatan atas Laporan Keuangan..................................

8-117

……………………..Notes to the Financial Statements

************************


PT BANK QNB INDONESIA TBK LAPORAN POSISI KEUANGAN Tanggal 31 Desember 2016 (Disajikan dalam jutaan Rupiah, kecuali dinyatakan lain) Catatan/ Notes

PT BANK QNB INDONESIA TBK STATEMENT OF FINANCIAL POSITION As of December 31, 2016 (Expressed in millions of Rupiah, unless otherwise stated)

31 Desember/ December 31, 2016


ASET Kas

2d,2f,5,34,38

51.260

45.432

ASSETS Cash

Giro pada Bank Indonesia

2d,2f,2g,6,34, 35,38

1.635.116

1.710.947

Current accounts with Bank Indonesia

Giro pada bank-bank lain Pihak berelasi Pihak ketiga

2d,2e,2f,2g 2o,7,34,35, 36,38

193 80.622

172 30.974

Current accounts with other banks Related party Third parties

2.230.074

2.111.813

Placements with Bank Indonesia and other bank

550

2.921

Derivatives receivable

22.193

24.995 36.826

Acceptances receivable Related party Third parties

471.350

269.117

Securities purchased under agreement to resell

1.895 18.286.019

3.434 20.826.610

Loans Related parties Third parties

18.287.914

20.830.044

Penempatan pada Bank Indonesia dan bank lain

Tagihan derivatif

2d,2f,2h,2o,8, 34,35,38 2d,2f,2i,9, 34,35

Tagihan akseptasi Pihak berelasi Pihak ketiga

2d,2f,2o,2q,10, 34,35,38

Efek-efek yang dibeli dengan janji dijual kembali

2f,2h,2o,11, 34,35

Kredit yang diberikan Pihak berelasi Pihak ketiga Sub-total Dikurangi: cadangan kerugian penurunan nilai

2d,2e,2f,2h, 2o,12,34,35, 36,38

Neto Efek-efek Beban dibayar dimuka Aset pajak tangguhan, neto Aset tetap setelah dikurangi akumulasi penyusutan masing-masing sebesar Rp157.162 dan Rp126.483 pada tanggal 31 Desember 2016 dan 2015 Aset tak berwujud setelah dikurangi akumulasi amortisasi masing-masing sebesar Rp37.013 dan Rp30.294 pada tanggal 31 Desember 2016 dan 2015 Agunan yang diambil alih Aset lain-lain, neto

(736.726)

(41.740)

Sub-total Less: allowance for impairment losses

17.551.188

20.788.304

Net

2f,2j,2o,13, 34,35,36,38

571.862

325.444

Securities

14

188.969

108.443

Prepayments

2k,21

172.105

-


110.577

Fixed assets net of accumulated depreciation of Rp157,162 and Rp126,483, as of December 31, 2016 and 2015, respectively

41.176

45.670

Intangible assets net of accumulated amortization of Rp37,013 and Rp30,294 as of December 31, 2016 and 2015, respectively

1.019.382

-

Foreclosed Assets

191.900

146.014

Other assets, net

24.372.702

25.757.649

TOTAL ASSETS

2l,2o,15

2m,2o,16 2n,2o 17 2d,2f,2m,2o, 34,38

TOTAL ASET

144.762

Catatan atas laporan keuangan terlampir merupakan bagian yang tidak terpisahkan dari laporan keuangan secara keseluruhan.

The accompanying notes to the financial statements form an integral part of these financial statements.

1


PT BANK QNB INDONESIA TBK LAPORAN POSISI KEUANGAN (lanjutan) Tanggal 31 Desember 2016 (Disajikan dalam jutaan Rupiah, kecuali dinyatakan lain) Catatan/ Notes

PT BANK QNB INDONESIA TBK STATEMENT OF FINANCIAL POSITION (continued) As of December 31, 2016 (Expressed in millions of Rupiah, unless otherwise stated)



LIABILITAS DAN EKUITAS

LIABILITAS Liabilitas segera

LIABILITIES AND EQUITY

2d,18,38

Simpanan dari nasabah Pihak berelasi Pihak ketiga

2d,2e,2f,2p, 19,34,36,38

Simpanan dari bank-bank lain Pihak berelasi Pihak ketiga

2d,2e,2f,2p, 20,34,36,38

Liabilitas akseptasi Pihak berelasi Pihak ketiga

2d,2e,2f,2q, 10,34,36,38

Liabilitas derivatif

2d,2f,2i,9,34

240.658

337.357

LIABILITIES Liabilities payable on demand

64.415 19.280.547

1.040.738 17.468.270

Deposits from customers Related party Third parties

404.797 258.001

2.688.691 490.420

Deposits from other banks Related parties Third parties

22.193

24.995 36.826

Acceptances payable Related party Third parties

12.890

661

Derivatives payable

Utang pajak penghasilan

2k,21

-

2.401

Income tax payable

Liabilitas imbalan pasca-kerja

2r,22

97.407

80.619

Obligation for post-employment benefits

Liabilitas pajak tangguhan, neto

2k,21

-

42.324

Deferred tax liabilities, net

2d,2f,2k,34,38

198.345

155.213


2t,23

315.520

-


-

964.950

Subordinated loan

20.894.773

23.333.465

TOTAL LIABILITIES

2.189.287

EQUITY Share capital - par value of Rp250 (full amount) per share Authorized - 32,000,000,000 (full amount) shares Issued and fully paid 8,757,145,997 (full amount) shares

Beban masih harus dibayar dan liabilitas lain-lain Surat berharga yang diterbitkan Pinjaman Subordinasi

2d,2e,2s,24, 36,38

TOTAL LIABILITAS

EKUITAS Modal saham - nilai nominal Rp250 (Rupiah penuh) per saham Modal dasar - 32.000.000.000 (Nilai penuh) saham Modal ditempatkan dan disetor penuh - 8.757.145.997 (nilai penuh) saham

Tambahan modal disetor setelah dikurangi biaya emisi saham Dana setoran modal Kerugian komprehensif lain

1b,2u,25

2.189.287

2u,26 24,26

(24.570) 1.700.509 (12.875)

(24.570) (16.444)

5.396 (379.818)

4.396 271.515

Retained earnings (deficit): Appropriated Unappropriated

3.477.929

2.424.184

EQUITY

24.372.702

25.757.649

TOTAL LIABILITIES AND EQUITY

Saldo laba (defisit): Telah ditentukan penggunaannya Belum ditentukan penggunaannya EKUITAS TOTAL LIABILITAS DAN EKUITAS


Additional paid-in capital net of share issuance costs Disclosed reserve Other comprehensive loss


2


PT BANK QNB INDONESIA TBK LAPORAN LABA RUGI DAN PENGHASILAN KOMPREHENSIF LAIN Untuk Tahun yang Berakhir pada Tanggal 31 Desember 2016 (Disajikan dalam jutaan Rupiah, kecuali dinyatakan lain)

PT BANK QNB INDONESIA TBK STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the Year ended December 31, 2016 (Expressed in millions of Rupiah, unless otherwise stated)

Tahun yang Berakhir pada tanggal 31 Desember/Year ended December 31 Catatan/ Notes PENDAPATAN DAN BEBAN OPERASIONAL Pendapatan bunga Beban bunga

2e,2x,28,36 2e,2x,28, 36,39

PENDAPATAN BUNGA - NETO PENDAPATAN OPERASIONAL LAINNYA Provisi dan komisi - neto Keuntungan transaksi mata uang asing - neto Lain-lain

Beban umum dan administrasi Penyisihan kerugian penurunan nilai aset keuangan dan non keuangan Lain-lain

2015

2.048.592

2.040.582

(1.532.175)

(1.351.331)

Interest expense

689.251

2y,29

123.490

194.258

2z

72.097 4.075

13.434 4.826

OTHER OPERATING INCOME Fees and commission - net Gain on foreign exchange transactions - net Others

199.662

212.518

Total other operating income

2e,2r,31,36

(397.332)

(375.743)

2l,2m,32

(243.962)

(225.106)

2o,30

(929.519) (7.877)

(87.472) (8.175)

OTHER OPERATING EXPENSES Personnel expenses General and administrative expenses Provision for impairment losses on financial and non financial assets Others

(1.578.690)

(696.496)

Total other operating expenses

(862.611)

205.273

(LOSS) INCOME FROM OPERATIONS

(3.339)

3.662

NON-OPERATING (EXPENSES) INCOME - NET

(865.950)

208.935

(LOSS) INCOME BEFORE INCOME TAX EXPENSE

215.617

(52.889)

(650.333)

156.046

Total beban operasional lainnya (RUGI) LABA OPERASIONAL

(BEBAN) PENDAPATAN NONOPERASIONAL - NETO (RUGI) LABA SEBELUM BEBAN PAJAK PENGHASILAN Manfaat (Beban) pajak penghasilan

OPERATING INCOME AND EXPENSE Interest income

516.417

Total pendapatan operasional lainnya BEBAN OPERASIONAL LAINNYA Beban karyawan

2016

2k,21

(RUGI) LABA TAHUN BERJALAN


NET INTEREST INCOME

Income tax benefit (expense) (LOSS) INCOME FOR THE YEAR


3


PT BANK QNB INDONESIA TBK LAPORAN LABA RUGI DAN PENGHASILAN KOMPREHENSIF LAIN (lanjutan) Untuk Tahun yang Berakhir pada Tanggal 31 Desember 2016 (Disajikan dalam jutaan Rupiah, kecuali dinyatakan lain)

PT BANK QNB INDONESIA TBK STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (continued) For the Year ended December 31, 2016 (Expressed in millions of Rupiah, unless otherwise stated)

Tahun yang Berakhir pada tanggal 31 Desember/Year ended December 31 Catatan/ Notes PENGHASILAN KOMPREHENSIF LAIN Pos-pos yang akan diklasifikasikan ke laba rugi: Perubahan nilai wajar efek-efek yang tersedia untuk dijual Pajak penghasilan terkait

Pos-pos yang tidak akan diklasifikasikan ke laba rugi: Keuntungan aktuarial atas program manfaat pasti Pajak penghasilan terkait

2016

2015

2j,13

22

Keuntungan komprehensif, lain setelah pajak Total (kerugian) penghasilan komprehensif tahun berjalan

43 (11)

77 (19)

32

58

4.078 (1.019)

3.537

3.059

3.569

3.117

Other comprehensive gain, net of tax

159.163

Total comprehensive (loss) income for the year

17,82

(LOSS) EARNING PER SHARE BASIC (in full amount)

(646.764)

2v, 33

Item that will not be classified to profit or loss: Actuarial gain on defined benefit plan Related income tax

4.716 (1.179)

(RUGI) LABA PER SAHAM - DASAR (dalam Rupiah penuh)

OTHER COMPREHENSIVE INCOME Item that will be classified to profit or loss: Fair value changes of available for sales securities Related income tax

(74,26)



4


PT BANK QNB INDONESIA TBK LAPORAN PERUBAHAN EKUITAS Untuk tahun yang Berakhir pada Tanggal 31 Desember 2016 (Disajikan dalam jutaan Rupiah, kecuali dinyatakan lain)

Catatan/ Notes Saldo, 1 Januari 2015

Tambahan modal disetor setelah dikurangi biaya emisi saham/ Additional paid-in capital net of share issuance costs

Modal saham/ Share capital 2.189.287

(24.570 )

PT BANK QNB INDONESIA TBK STATEMENT OF CHANGES IN EQUITY For the year Ended December 31, 2016 (Expressed in millions of Rupiah, unless otherwise stated)

Penghasilan (kerugian) komprehensive lain/ Other Comprehensive Income Laba (rugi) yang belum direalisasi atas efek-efek (Kerugian) dalam keuntungan kelompok tersedia aktuarial Dana setoran modal/ untuk dijual atas program Disclosed reserved setelah manfaat pajak tangguhan pasti/ Konversi pinjaman Unrealized gain Actuarial subordinasi/ (loss) on Available losses on Subordinated Tambahan modal/ - for-Sale Securities defined loan convertion Capital injection - net of defferred tax benefit plan -

-

(58 )

(19.503 )

Saldo laba (Defisit)/ Retained Earnings (Deficit) Telah ditentukan penggunaannya/ Appropriated

Belum ditentukan penggunaannya/ Unappropriated

Total Ekuitas/ Total Equity

4.396

115.469

2.265.021

Balance as of January 1, 2015

Laba tahun berjalan 2015

-

-

-

-

-

-

-

156.046

156.046

Income for the year 2015

Keuntungan aktuarial - neto setelah Pajak

-

-

-

-

-

3.059

-

-

3.059

Actuarial gain - net of tax

Laba yang belum direalisasi atas efek - efek dalam kelompok tersedia untuk dijual - setelah pajak tangguhan

-

-

-

-

58

-

-

-

58

Unrealized loss on available-forsale securities net of deffered tax

Total penghasilan komprehensif untuk Tahun berjalan 2015

-

-

-

-

58

3.059

-

156.046

159.163

Total comprehensive income to December 31, 2015

271.515

2.424.184

Balance as of December 31, 2015

(650.333 )

(650.333)

Loss for the year 2016

-

-

-

Rugi tahun berjalan 2016

Saldo 31 Desember 2015

-

-

-

-

-

-

-

Keuntungan aktuarial - neto setelah Pajak

-

-

-

-

-

3.537

-

-

3.537

Actuarial gain - net of tax

-

-

-

-

32

-

-

-

32

Unrealized gain on available-forsale securities - net of deffered tax

-

-

-

-

-

-

1.000

-

Appropriation for general and legal reserve

-

948.709

751.800

-

948.709

751.800

32

Laba yang belum direalisasi atas efek - efek dalam kelompok yang tersedia untuk dijual setelah pajak tangguhan

2.189.287

2k, 13

Pembentukan cadangan umum dan wajib Dana setoran modal Saldo 31 Desember 2016

24,26

2.189.287

(24.570 )

(24.570 )


(16.444 )

(12.907 )

4.396

5.396

(1.000 ) (379.818 )

1.700.509

Disclosed reserved

3.477.929

Balance as of December 31, 2016


5


PT BANK QNB INDONESIA TBK LAPORAN ARUS KAS Untuk Tahun yang Berakhir pada Tanggal 31 Desember 2016 (Disajikan dalam jutaan Rupiah, kecuali dinyatakan lain)

PT BANK QNB INDONESIA TBK STATEMENT OF CASH FLOWS For the Year ended December 31, 2016 (Expressed in millions of Rupiah, unless otherwise stated)

Tahun yang Berakhir pada tanggal 31 Desember/Year ended December 31 Catatan/ Notes ARUS KAS DARI AKTIVITAS OPERASI Penerimaan bunga Pembayaran bunga Penerimaan provisi dan komisi Pembayaran provisi dan komisi Pembayaran beban karyawan Pembayaran imbalan pasca kerja Pembayaran beban lainnya - neto Pembayaran pajak penghasilan

2y,29 2y,29 22

(Kenaikan) penurunan dalam aset operasi: Efek-efek yang dibeli dengan janji dijual kembali Tagihan akseptasi Kredit yang diberikan Beban dibayar dimuka Aset lain-lain

2015

1.962.530 (1.352.619) 196.278 (2.020) (292.892) (3.661) (434.659) (36.635)

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from interest income Payments for interest expense Receipts from fees and commission Payments for fees and commission Payments for personnel expenses Payment for post employee benefit Payments for other expenses - net Payments for income tax

(794) (1.077) (5.749.537) (51.330) (13)

(Increase) decrease in operating assets: Securities purchased under agreement to resell Aceptances receivable Loans Prepayments Other assets

(96.698) 834.140 (2.516.313) (39.628)

84.571 2.347.497 1.315.781 1.077

Increase (decrease) in operating liabilities: Liabilities payable on demand Deposits from customers Deposits from other banks Acceptances payable

(62.253)

14.000


1.981.760 (1.511.365) 124.925 (1.435) (329.374) (5.170) (63.159) (2.401)

(202.233) 39.628 1.385.188 (80.526) (17.351)

Kenaikan (penurunan) dalam liabilitas operasi: Liabilitas segera Simpanan dari nasabah Simpanan dari bank-bank lain Liabilitas akseptasi Beban masih harus dibayar dan liabilitas lain-lain Arus kas neto digunakan untuk dari aktivitas operasi ARUS KAS DARI AKTIVITAS INVESTASI Penerimaan atas efek-efek yang telah jatuh tempo Penempatan pada efek-efek Hasil penjualan aset tetap Perolehan aset tetap Perolehan aset tak berwujud

2016

(562.265)

(2.003.503)

Net cash flows used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES

15 15 16

Arus kas neto digunakan untuk aktivitasi investasi

231 (246.648) 1.158 (69.677) (3.731)

232.411 (325.213) 115 (25.673) (10.791)

Proceeds of matured securities Placements in securities Proceeds from sale of fixed assets Acquisition of fixed assets Acquisition of intangible assets

(318.667)

(129.151)

Net cash flows used in investing activities



6


PT BANK QNB INDONESIA TBK LAPORAN ARUS KAS (lanjutan) Untuk Tahun yang Berakhir pada Tanggal 31 Desember 2016 (Disajikan dalam jutaan Rupiah, kecuali dinyatakan lain)

PT BANK QNB INDONESIA TBK STATEMENT OF CASH FLOWS (continued) For the Year ended December 31, 2016 (Expressed in millions of Rupiah, unless otherwise stated)

Tahun yang Berakhir pada tanggal 31 Desember/Year ended December 31 Catatan/ Notes ARUS KAS DARI AKTIVITAS PENDANAAN Dana Setoran Modal Penerimaan dari surat berharga yang diterbitkan Penerimaan dari penerbitan Pinjaman Subordinasi Arus kas bersih diperoleh dari aktivitas pendanaan KENAIKAN (PENURUNAN) NETO KAS DAN SETARA KAS

2016

2015

751.800

-

300.622

-

-

964.950

CASH FLOW FROM FINANCING ACTIVITIES Disclosed Reserve Proceeds from marketable securities issued Proceeds from issuance of Subordinated Loan

1.052.422

964.950

Net cash flows provided by financing activities

171.490

PENGARUH FLUKTUASI KURS VALUTA ASING PADA KAS DAN SETARA KAS

(73.563)

(1.167.704)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

EFFECT OF FOREIGN EXCHANGE RATE FLUCTUATION ON CASH 221.113 AND CASH EQUIVALENTS

KAS DAN SETARA KAS, AWAL TAHUN

3.899.338

4.845.929

CASH AND CASH EQUIVALENTS, AT BEGINNING OF YEAR

KAS DAN SETARA KAS, AKHIR TAHUN

3.997.265

3.899.338

CASH AND CASH EQUIVALENTS, AT END OF YEAR

Kas dan setara kas terdiri dari: Kas Giro pada Bank Indonesia Giro pada bank-bank lain Penempatan pada Bank Indonesia dan bank-bank lain - jatuh tempo dalam 3 bulan sejak tanggal perolehan

2b,5

51.260

2b,6 2b,7

1.635.116 80.815

2b,8

2.230.074

Cash and cash equivalents consist of: Cash Current accounts with 1.710.947 Bank Indonesia 31.146 Current accounts with other banks Placements with Bank Indonesia and other banks - maturing within 3 months since the 2.111.813 acquisition date

3.997.265

3.899.338


45.432


7


PT BANK QNB INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN Tanggal 31 Desember 2016 dan untuk Tahun yang Berakhir pada Tanggal Tersebut (Disajikan dalam jutaan Rupiah, kecuali dinyatakan lain) 1.

PT BANK QNB INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS As of December 31, 2016 and for the Year Then Ended (Expressed in millions of Rupiah, unless otherwise stated)

UMUM a.

1.

Pendirian dan Informasi Umum

GENERAL a.

Establishment and General Information

PT Bank QNB Indonesia Tbk (“Bank”) didirikan pada tanggal 1 April 1913 dengan nama N.V Chunghwa Shangyeh Maatschappij (The Chinese Trading Company Limited) berdasarkan Akta No. 53 tanggal 28 April 1913 yang dibuat di hadapan Notaris Leonard Hendrik-Willem Van Sandick dan telah disetujui berdasarkan Besluit Gouverneur Generaal Hindia Belanda No. 58 tanggal 16 Juli 1913 dan diumumkan dalam Extra Bijvougsel der Javasche Courant No. 78 Tanggal 30 September 1913.

PT Bank QNB Indonesia Tbk (“the Bank”) was established on April 1, 1913 under the name of N.V Chunghwa Shangyeh Maatschappij (The Chinese Trading Company Limited) based on the Notarial Deed No. 53 dated April 28,.1913 of Notary Leonard Hendrik-Willem Van Sandick and was approved based on Besluit Gouverneur Generaal Hindia Belanda No. 58 dated July 16, 1913 and was published in the Extra Bijvougsel der Javasche Courant No. 78 dated September 30, 1913.

Berdasarkan Surat Keputusan Menteri Keuangan No. 191547/U.M.II tanggal 28 Oktober 1958, Bank memulai kegiatan operasionalnya sebagai bank umum.

Based on Decree of the Minister of Finance No. 191547/U.M.II dated October 28, 1958, the Bank started its operation as a commercial bank.

Nama Bank diubah menjadi PT Bank Kesawan berdasarkan Akta Perubahan Anggaran Dasar No..60 tanggal 10 Maret 1965 yang dibuat di hadapan Ong Kiem Lian, SH, notaris di Jakarta. Akta ini telah disahkan oleh Menteri Kehakiman Republik Indonesia (sekarang Menteri Hukum dan Hak Asasi Manusia) dalam Surat Keputusan No. J.A.5/68/15 tanggal 3 Juli 1965 dan telah diumumkan dalam Berita Negara Republik Indonesia No. 95 tanggal 26 Nopember 1965, Tambahan No. 95.

The Bank’s name was changed into PT Bank Kesawan based on the Deed of Articles of Association Amendment No. 60 dated March 10, .1965 of Ong Kiem Lian, SH, notary public in Jakarta. This deed was approved by the Minister of Justice of the Republic of Indonesia (currently the Minister of Laws and Human Rights) in his Decree No..J.A.5/68/15 dated July 3, 1965 and was published in to the State Gazette of the Republic of Indonesia No. 95 dated November 26,.1965, Addition No. 95.

Perubahan status Bank dari perseroan tertutup menjadi perseroan terbuka adalah berdasarkan Akta Pernyataan Keputusan Rapat Umum Pemegang Saham Luar Biasa No. 22 tanggal 25.Juli 2001 yang dibuat di hadapan Fathiah Helmi, SH, notaris di Jakarta. Akta ini telah memperoleh persetujuan dari Menteri Kehakiman Republik Indonesia tanggal 27.Desember 2001 dengan Surat Keputusan No. C-20973.HT.01.04.TH.2001 serta diumumkan dalam Berita Negara Republik Indonesia No. 75 tanggal 17 September 2002, Tambahan No. 11113.

The change of the Bank’s status from a private company to a public company was effected by the Deed of Extraordinary Shareholders’ General Meeting No. 22 dated July 25,.2001 of Fathiah Helmi, SH, notary public in Jakarta. This deed was approved by the Minister of Justice of the Republic of Indonesia dated December 27, 2001 in his Decree No. C20973.HT.01.04.TH.2001 and was published in to the State Gazette of the Republic of Indonesia No..75 dated September 17,.2002, Addition No. 11113.

Dengan akuisisi saham Bank oleh Qatar National Bank SAQ pada tanggal 26 Januari 2011, nama Bank diubah menjadi PT Bank QNB Kesawan Tbk berdasarkan Akta Pernyataan Keputusan Rapat Umum Pemegang Saham Luar Biasa No. 23 tanggal 16 September 2011 yang dibuat di hadapan Fathiah Helmi, SH, notaris di Jakarta. Akta ini telah memperoleh persetujuan dari Menteri Hukum dan Hak Asasi Manusia Republik Indonesia berdasarkan Surat Keputusan

Subsequently, following the acquisition of the Bank’s shares by Qatar National Bank SAQ on January 26,.2011, the Bank’s name was changed into PT Bank QNB Kesawan Tbk based on the Deed of Extraordinary Shareholders’ General Meeting No. 23 dated September 16, 2011 of Fathiah Helmi, SH, notary public in Jakarta. This deed was approved by the Minister of Laws and Human Rights of the Republic of Indonesia in his Decree

8


PT BANK QNB INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN Tanggal 31 Desember 2016 dan untuk Tahun yang Berakhir pada Tanggal Tersebut (Disajikan dalam jutaan Rupiah, kecuali dinyatakan lain)

1.


UMUM (lanjutan) a.

1.

Pendirian dan Informasi Umum (lanjutan)

GENERAL (continued) a.

Establishment and General Information (continued)

No. AHU-51180.AH.01.02 Tahun 2011 tanggal 21 Oktober 2011 dan telah diumumkan dalam Berita Negara Republik Indonesia No. 93 tanggal 20 November 2012, Tambahan No. 72137.

No. AHU-51180.AH.01.02 Year 2011 dated October 21, 2011 and was announced in Berita Negara Republik Indonesia No. 93 dated November 20, 2012, Addition No. 72137.

Selanjutnya nama bank berubah menjadi PT Bank QNB Indonesia Tbk. berdasarkan Akta Pernyataan Keputusan Rapat Umum Pemegang Saham Tahunan No. 35 tanggal 23 Juli 2014. Akta ini telah mendapat persetujuan Menteri Hukum dan Hak Asasi Manusia Republik Indonesia dengan keputusannya No. AHU-0613640.20.2014 tanggal 24 Juli 2014.

Subsequently, the bank’s name was changed into PT Bank QNB Indonesia Tbk. based on The deed of Minutes of Annual Shareholders’ General Meeting No. 35 dated July 23, 2014. This deed was approved by the Minister of Laws and Human Rights of the Republic of Indonesia with the Deed No. AHU0613640.20.2014 dated July 24, 2014.

Anggaran Dasar Bank telah mengalami beberapa kali perubahan. Perubahan terakhir dengan Akta Pernyataan Keputusan Rapat Umum Pemegang Saham Tahunan No. 37 tanggal 27 Februari 2015 dibuat dihadapan Fathiah Helmi, SH, notaris di Jakarta. Akta ini telah memperoleh persetujuan dari Menteri Hukum & Hak Asasi Manusia No. AHU0004611.AH.01.02.2015 tanggal 24 Maret 2015 dan penerimaan Perubahan Anggaran Dasar Perseroan telah diterima dan dicatat dalam Database Sisminbakum Kementrian Hukum dan Hak Asasi Manusia Republik Indonesia No. AHU-AH.01.03-0018662 tanggal 24 Maret 2015. Susunan Direksi dan Komisaris terakhir dimuat dalam Akta Berita Acara Rapat Umum Pemegang Saham Luar Biasa No. 43 tanggal 19 Desember 2016 yang dibuat dihadapan Fathiah Helmi, SH. Notaris di Jakarta.

The Bank’s Articles of Association has been amended several times. The latest amendment was effected by Notarial Deed of Minutes of Annual Shareholders’ General Meeting No. 37 dated February 27, 2015 of Fathiah Helmi, SH, notary public in Jakarta. This deed was approved by the Minister of Laws and Human Rights of the Republic of Indonesia in his Decree No. AHU-0004611.AH.01.02.2015 dated March 24, 2015 and The change of Articles of Association Amendment company was received and recorded into Database Sisminbakum of The Minister of Laws and Human Rights of the Republic of Indonesia 8No. AHU-AH.01.03-0018662 dated March 24, 2015. The latest composition of the Board of Directors and Commissioners is stated in deed of Minutes of Annual Shareholders’ General Meeting No. 43 dated December 19, 2016 of Fathiah Helmi, SH, notary public in Jakarta.

Sesuai dengan pasal 3 Anggaran Dasar Bank, ruang lingkup kegiatan Bank adalah menjalankan kegiatan umum perbankan.

According to article 3 of the Bank’s Articles of Association, the scope of activities of the Bank is to engage in general banking business.

9




UMUM (lanjutan) a.

b.

1.

Pendirian dan Informasi Umum (lanjutan)

GENERAL (continued) a.

Establishment and General Information (continued)

Bank memperoleh persetujuan sebagai Pedagang Valuta Asing berdasarkan Surat Keputusan Direksi Bank Indonesia No. 28/366/UD/DIR tanggal 4 Desember 1995.

The Bank was granted a license to act as a Foreign Exchange Bank based on the Decree of the Director of Bank Indonesia No..28/366/UD/DIR dated.December 4, 1995.

Bank memperoleh persetujuan menjadi Bank Devisa berdasarkan Surat Keputusan Direksi Bank Indonesia No. 28/150/KEP/DIR tanggal 22 Februari 1996.

The Bank was granted a license to conduct foreign exchange activities based on the Decree of the Director of Bank Indonesia No..28/150/KEP/DIR dated.February 22, 1996.

Bank memperoleh persetujuan menjadi Bank Persepsi Kas Negara berdasarkan Surat Keputusan Menteri Keuangan Republik Indonesia No..S-452/MK.03/1996 tanggal 16 Agustus 1996.

The Bank was granted a license as a National Cash Perception Bank based on the Decree of the Minister of Finance of the Republic of Indonesia No. S-452/MK.03/1996 dated August 16, 1996.

Kantor Pusat Bank berlokasi di Jalan Jendral Sudirman Kavling 52-53, Jakarta. Pada 31 Desember 2016, Bank mempunyai 1 kantor pusat non-operasional, 15 kantor cabang, 33 kantor cabang pembantu dan 72 ATM di seluruh Indonesia. Pada 31 Desember 2015, Bank mempunyai 1 kantor pusat nonoperasional, 15 kantor cabang, 34 cabang pembantu dan 62 ATM di seluruh Indonesia (tidak diaudit).

The Bank’s head office is located at Jalan Jendral Sudirman Kavling 52-53, Jakarta. As of December 31, 2016, the Bank has 1 nonoperational head office, 15 branch offices, 33 sub-branch offices and 72 ATMs throughout Indonesia. As of December 31, 2015, the Bank has 1 non-operational head office, 15 branch offices, 34 sub-branch offices and 62 ATMs throughout Indonesia (unaudited).

Pada tanggal 31 Desember 2016 dan 2015, Bank memiliki masing-masing 908 dan 944 karyawan (tidak diaudit).

As of December 31, 2016 and 2015, the Bank had 908 and 944 employees, respectively (unaudited).

Bank, melalui pemegang saham mayoritasnya, Qatar National Bank SAQ, merupakan bagian dari Qatar National Bank Group. Qatar National Bank Group memiliki anak perusahaan dan afiliasi di seluruh dunia.

The Bank, through its majority shareholder, Qatar National Bank SAQ, is ultimately part of the Qatar National Bank Group. The Qatar National Bank Group has subsidiaries and affiliates throughout the world.

Penawaran Umum Saham Bank

b. Public Offering of the Bank's Shares On October 31, 2002, the Bank obtained the Effective Notification from the Chairman of the Capital Market Supervisory Agency (Bapepam) through its Decree No. S-2369/PM/2002 in relation to the public offering of its 78,800,000 shares with par value and at the offering price of Rp250 (in full amount) per share. The Bank’s shares were traded in Jakarta Stock Exchange starting.November 21, 2002. (On November 30, 2007, Jakarta Stock Exchange and Surabaya Stock Exchange have merged becoming Indonesia Stock Exchange).

Pada tanggal 31 Oktober 2002, Bank memperoleh Pernyataan Efektif dari Ketua Badan Pengawas Pasar Modal (Bapepam) berdasarkan Surat Keputusan No. S2369/PM/ 2002 dalam rangka penawaran umum atas 78.800.000 lembar saham Bank dengan nilai nominal dan harga penawaran sebesar Rp250 (dalam Rupiah penuh) per saham. Saham Bank tersebut diperdagangkan di Bursa Efek Jakarta mulai tanggal 21 Nopember 2002. (Pada tanggal 30 Nopember 2007, Bursa Efek Jakarta dan Bursa Efek Surabaya telah bergabung menjadi Bursa Efek Indonesia).

10




UMUM (lanjutan) b.

1.

Penawaran Umum Saham Bank (lanjutan)

GENERAL (continued) b.

Public Offering of the Bank's Shares (continued)

Dalam penawaran umum saham ini dikeluarkan pula Waran Seri I (waran) yang diberikan secara cuma-cuma kepada pemegang saham baru. Setiap pemegang 2 saham baru Bank memperoleh 3 waran, sehingga jumlah waran yang diterbitkan adalah sebanyak 118.200.000 lembar. Setiap 1 waran memberikan hak kepada pemegang waran untuk membeli 1 saham baru Bank pada harga pelaksanaannya. Jangka waktu pelaksanaan waran yang diterbitkan adalah sejak tanggal 21.Mei 2003 sampai dengan tanggal 18.Nopember 2005. Sampai dengan tanggal pelaksanaan terakhir yaitu tanggal 18 Nopember 2005, waran yang telah dilaksanakan adalah sebanyak 101.219.000 waran pada harga pelaksanaan Rp250 (dalam Rupiah penuh) atau seluruhnya sebesar Rp25.305.

These new shares were furnished by Warrants Series I (warrant), which were granted to the new shareholders as a compliment. Each holder of 2 Bank’s new shares received 3 warrants; accordingly, the total number of warrants issued was 118,200,000 warrants. Each warrant entitled the holder to buy 1 Bank’s new share at the exercise price. The execution period was from.May 21, 2003 to November 18, 2005. Up to the last exercise date on November 18, 2005, the number of exercised warrants was 101,219,000 warrants at exercise price of Rp250 (in full amount) or totaling Rp25,305.

Pada tanggal 15 Juni 2009, Bank memperoleh Pernyataan Efektif dari Ketua Badan Pengawas Pasar Modal dan Lembaga Keuangan (Bapepam-LK) berdasarkan Surat Keputusan No..S-5209/BL/2009 dalam rangka Penawaran Umum Terbatas I (PUT I) dengan menerbitkan Hak Memesan Efek Terlebih Dahulu (HMETD) sejumlah 125.304.750 saham dengan nilai nominal Rp250 (dalam Rupiah penuh) per saham yang ditawarkan dengan harga Rp320 (dalam Rupiah penuh) per saham.

On June 15, 2009, the Bank obtained the Effective Notification from the Chairman of the Capital Market Supervisory Agency and Financial Institutions (Bapepam-LK) through its Decree No. S-5209/BL/2009 in relation to the First Limited Public Offering (PUT I) by conducting the Rights Issue (HMETD) amounting to 125,304,750 shares with par value of Rp250 (in full amount) per share at an offering price of Rp320 (in full amount) per share.

Setelah PUT I, modal ditempatkan dan disetor Bank meningkat menjadi 626.523.750 lembar saham atau senilai Rp156.631.

After the PUT I, the Bank’s issued and fully paid capital increased to 626,523,750 shares or Rp156,631.

Pada tanggal 27 Desember 2010, Bank memperoleh Pernyataan Efektif dari Ketua Bapepam-LK berdasarkan Surat Keputusan No. S-11585/BL/2010 dalam rangka Penawaran Umum Terbatas II (PUT II) dengan menerbitkan Hak Memesan Efek Terlebih Dahulu (HMETD) sejumlah 2.935.263.768 saham dengan nilai nominal dan harga penawaran sebesar Rp250 (dalam Rupiah penuh) per saham.

On December 27, 2010, the Bank obtained the Effective Notification from the Chairman of Bapepam-LK through its Decree No. S-11585/BL/2010 in relation to the Second Limited Public Offering (PUT II) by conducting the Rights Issue (HMETD) amounting to 2,935,263,768 shares with par value and at the offering price of Rp250 (in full amount) per share.

Setelah PUT II, modal ditempatkan dan disetor Bank meningkat menjadi 3.561.787.518 lembar saham atau senilai Rp890.447.

After the PUT II, the Bank’s issued and fully paid capital increased to 3,561,787,518 shares or Rp890,447.

11




UMUM (lanjutan) b.

1.

Penawaran Umum Saham Bank (lanjutan)

c.

GENERAL (continued) b.

Public Offering of the Bank's Shares (continued)

Pada tanggal 27 Mei 2013, Bank memperoleh Pernyataan Efektif dari Otoritas Jasa Keuangan (“OJK”) berdasarkan Surat Keputusan No. S-141/D.04/2013 dalam rangka Penawaran Umum Terbatas III (PUT III) dengan menerbitkan Hak Memesan Efek Terlebih Dahulu (HMETD) sejumlah 2.596.543.000 saham dengan nilai nominal dan harga penawaran sebesar Rp250 (dalam Rupiah penuh) per saham.

On May 27, 2013, the Bank obtained the Effective Notification from Financial Service Authority (“OJK”) through its Decree No. S-141/D.04/2013 in relation to the Third Limited Public Offering (PUT III) by conducting the Rights Issue (HMETD) amounting to 2,596,543,000 shares with par value and at the offering price of Rp250 (in full amount) per share.

Setelah PUT III, modal ditempatkan dan disetor Bank meningkat menjadi 6.158.330.518 lembar saham atau senilai Rp1.539.583.

After the PUT III, the Bank’s issued and fully paid capital increased to 6,158,330,518 shares or Rp1,539,583.

Pada tanggal 2 Juni 2014, Bank memperoleh Pernyataan Efektif dari Otoritas Jasa Keuangan (“OJK”) berdasarkan Surat Keputusan No. S-253/D.04/2014 dalam rangka Penawaran Umum Terbatas IV (PUT IV) dengan menerbitkan Hak Memesan Efek Terlebih Dahulu (HMETD) sejumlah 2.598.815.479 saham dengan nilai nominal dan harga penawaran sebesar Rp250 (dalam Rupiah penuh) per saham.

On June 2, 2014, the Bank obtained the Effective Notification from Financial Service Authority (“OJK”) through its Decree No. S-253/D.04/2014 in relation to the fourth Limited Public Offering (PUT IV) by conducting the Rights Issue (HMETD) amounting to 2,598,815,479 shares with par value and at the offering price of Rp250 (in full amount) per share.

Setelah PUT IV, modal ditempatkan dan disetor Bank meningkat menjadi 8.757.145.997 lembar saham atau senilai Rp2.189.287.

After the PUT IV, the Bank’s issued and fully paid capital increased to 8,757,145,997 shares or Rp2,189,287.

Dewan Komisaris dan Direksi

c.

Boards of Commissioners and Directors

31 Desember/December 31, 2016 Dewan Komisaris Komisaris Utama Komisaris Independen Komisaris Independen Komisaris Independen Komisaris Komisaris Direksi Direktur Direktur Direktur Direktur Direktur Direktur *) **)

Board of Commissioners Ali Ahmed Z A Al Kuwari Suroto Moehadji Muhammad Anas Malla Djoko Sarwono Grant Eric Lowen Andrew McGregor Duff*)

President Commissioner Independent Commissioner Independent Commissioner Independent Commissioner Commissioner Commissioner Board of Directors

Azhar bin Abdul Wahab Lloyd Roslton Windiartono Tabingin Novi Mayasari R.Andi Kartiko Utomo*) Junita Wangsadinata**)

Director Director Director Director Director Director *)

Efektif setelah mendapat persetujuan OJK atas Uji Kemampuan dan Kepatuhan Efektif pada 16 Februari 2017 dan setelah mendapat persetujuan OJK atas Uji Kemampuan dan Kepatuhan

**)

12

Effective after the issuance of OJK approval of Fit and Proper Test Effective on February 16, 2017 and after the issuance of OJK approval of Fit and Proper Test




UMUM (lanjutan) c.

1.

GENERAL (continued)

Dewan Komisaris dan Direksi (lanjutan)

c.

Boards of Commissioners and Directors (continued)

31 Desember/December 31, 2015 Dewan Komisaris Komisaris Utama Komisaris Independen Komisaris Independen Komisaris Independen Komisaris Independen Komisaris Komisaris

Board of Commissioners Ali Ahmed Z A Al Kuwari Suroto Moehadji Nasrul Husin*) Muhammad Anas Malla Djoko Sarwono**) Grant Eric Lowen M. Chidambaram

President Commissioner Independent Commissioner Independent Commissioner Independent Commissioner Independent Commissioner Commissioner Commissioner

Direksi Direktur Utama Direktur Direktur Direktur Direktur Direktur Direktur

Board of Directors Andrew McGregor Duff Azhar bin Abdul Wahab Windiartono Tabingin Rusli Hery Syafril***) Lloyd Rolston Novi Mayasari****)

*) **)

*) **)

Habis masa jabatan sesuai dengan RUPS pada tanggal 27 Februari 2015 Efektif sejak keluarnya persetujuan OJK atas Uji Kemampuan dan Kepatuhan No. SR-216/D.08/2015 tanggal 11 November 2015 ***) Efektif mengundurkan diri pada tanggal 9 Oktober 2015 ****) Efektif sejak keluarnya persetujuan OJK atas Uji Kemampuan dan Kepatuhan No. SR-182/D.03/2015 tanggal 2 Oktober 2015

d.

President Director Director Director Director Director Director Director

Expiration of employment period based on Shareholder’s General Meeting on February 27, 2015 Effective after the issuance of OJK approval of Fit and Proper Test No. SR-216/D.08/2015 on November 11, 2015 ***) Effective resigned on October 9, 2015 ****) Effective after the issuance of OJK approval of Fit and Proper Test No. SR-182/D.03/2015 on October 2, 2015

Komite-Komite Bank

d.

The Bank’s Committees The composition of the Bank’s Committees as of December 31, 2016 and 2015 are as follows:

Susunan Komite-komite Bank pada tanggal 31 Desember 2016 dan 2015 adalah sebagai berikut:

31 Desember/December 31, 2016 Komite Audit Ketua Anggota Anggota

Djoko Sarwono Irzal Zaini Tjeptjep Hasmitha

Komite Pemantau Risiko Ketua Anggota Anggota

Risk Oversight Committee Muhammad Anas Malla Irzal Zaini Ani Hadi Setyowati

Komite Remunerasi dan Nominasi Ketua Anggota Anggota

Audit Committee Chairman Member Member

Chairman Member Member Nomination and Remuneration Committee

Suroto Moehadji Grant Eric Lowen Steven Stevanus

Chairman Member Member

31 Desember/December 31, 2015 Komite Audit Ketua Anggota Anggota

Muhammad Anas Malla Irzal Zaini Wayan Suryadarma

13

Audit Committee Chairman Member Member



1.


UMUM (lanjutan)

1.

d. Komite-Komite Bank (lanjutan)

GENERAL (continued) d. The Bank’s Committes (continued)

Komite Pemantau Risiko


Ketua Anggota Anggota Anggota

Suroto Moehadji Irzal Zaini Ani Hadi Setyowati M. Chidambaram

Chairman Member Member Member

Komite Remunerasi dan Nominasi Ketua Anggota Anggota

e.

Nomination and Remuneration Committee Muhammad Anas Malla Grant Eric Lowen Steven Stevanus

Sekretaris Perusahaan

Chairman Member Member

e. Corporate Secretary The Corporate Secretary as of December 31, 2016 and December 31, 2015 was Lina.

Sekretaris Perusahaan pada tanggal 31 Desember 2016 dan 31 Desember 2015 adalah Lina. f.

Kepala Satuan Kerja Audit Internal (SKAI)

f.

The Bank’s Head of Internal Audit as of December 31, 2016 and 2015 was Cut Tashana Azia and Tota Melanie L Tobing, respectively.

Kepala SKAI Bank pada tanggal 31 Desember 2016 dan 2015 masing-masing adalah Cut Tashana Azia dan Tota Melanie L Tobing. g.

Laporan Keuangan Bank

g.

IKHTISAR PENTING

KEBIJAKAN

AKUNTANSI

The Bank’s Financial Statements The Management of the Bank is responsible for the preparation of these financial statements, which were completed and authorized for issue on January 30, 2017.

Manajemen Bank bertanggung jawab atas penyusunan laporan keuangan ini, yang diselesaikan dan disetujui untuk diterbitkan pada tanggal 30 Januari 2017. 2.

Head of Internal Audit

YANG

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Kebijakan-kebijakan akuntansi yang penting, yang diterapkan dalam penyusunan laporan keuangan Bank pada tanggal dan tahun berakhir 31 Desember 2016, adalah sebagai berikut:

The significant accounting policies, applied in the preparation of the Bank’s financial statements as of and for the year ended.December 31, 2016, were as follows:

a.

a. Statement of Compliance

Pernyataan Kepatuhan

The Bank’s financial statements were prepared and presented in accordance with Indonesian Financial Accounting Standards (FAS) including statements and interpretation issued by the Financial Accounting Standards Board of the Indonesian Institute of Accountants (DSAKIAI).

Laporan keuangan Bank disusun dan disajikan sesuai dengan Standar Akuntansi Keuangan (“SAK”) di Indonesia yang mencakup Pernyataan dan Interpretasi yang dikeluarkan oleh Dewan Standar Akuntansi Keuangan Ikatan Akuntan Indonesia (DSAK-IAI).

14



IKHTISAR KEBIJAKAN PENTING (lanjutan) a.

AKUNTANSI


YANG

2.

Pernyataan Kepatuhan (lanjutan)

a.

Statement of Compliance (continued) The financial statements have also been prepared and presented in accordance with Capital Market and Financial Institutions Supervisory Agency (“BAPEPAM-LK”, which function has been transferred to Financial Service Authority (“OJK”) starting January 1, 2013) rule No. VIII.G.7, Appendix of the Decree of the Chairman of the BAPEPAM-LK No. KEP347/BL/2012 dated June 25, 2012 regarding “Financial Statements Presentation and Disclosure of the Issuer or Public Company”.

Laporan keuangan juga disusun dan disajikan sesuai dengan peraturan Badan Pengawas Pasar Modal dan Lembaga Keuangan (“BAPEPAM-LK”, yang fungsinya dialihkan kepada Otoritas Jasa Keuangan (“OJK”) sejak tanggal 1 Januari 2013) No. VIII.G.7 yang merupakan Lampiran Keputusan Ketua BAPEPAM-LK No. KEP-347/BL/2012 tanggal 25 Juni 2012 tentang “Penyajian dan Pengungkapan Laporan Keuangan Emiten atau Perusahaan Publik”. b.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Dasar Penyusunan Laporan Keuangan

b. Basis for Statements

Preparation

of

Financial

Laporan keuangan disusun dan disajikan sesuai dengan Pernyataan Standar Akuntansi Keuangan (“PSAK”) No. 1 (Revisi 2013), “Penyajian Laporan Keuangan” yang mengatur penyajian laporan keuangan, yaitu antara lain, tujuan pelaporan, komponen laporan keuangan, penyajian secara wajar, materialitas dan agregasi, saling hapus, perbedaan antara aset lancar dan tidak lancar dan liabilitas jangka pendek dan panjang, informasi komparatif, konsistensi penyajian dan memperkenalkan pengungkapan baru, antara lain, sumber estimasi ketidakpastian dan pertimbangan, pengelolaan permodalan, pendapatan komprehensif lainnya, penyimpangan dari standar akuntansi keuangan dan pernyataan kepatuhan. Pos-pos dalam Penghasilan komprehensif lainnya disajikan terpisah antara akun-akun yang akan direklasifikasikan ke laba rugi dan akun-akun yang tidak akan direklasifikasikan ke laba rugi.

The financial statements were prepared and presented in accordance with the Statement of Financial Accounting Standards (“SFAS”) No. 1 (Revised 2013), “Presentation of Financial Statements”, which regulates presentation of financial statements as to, among others, the objective, components of financial statements, fair presentation, materiality and aggregation, offsetting, distinction between current and noncurrent assets and short-term and long-term liabilities, comparative information and consistency and introduces new disclosures such as, among others, key estimates and judgments, capital management, other comprehensive income, departures from accounting standards and statement of compliance. The items under Other Comprehensive Income (OCI) should be presented separately between items to be reclassified to profit or loss and items not to be reclassified to profit or loss.

Laporan keuangan ini disajikan dalam Rupiah, yang merupakan mata uang fungsional Bank. Kecuali dinyatakan secara khusus, informasi keuangan yang disajikan telah dibulatkan menjadi jutaan Rupiah.

Figures in these financial statements are presented in Rupiah, which is the Bank’s functional currency. Except as otherwise indicated, financial information presented in Rupiah has been rounded to the nearest million.

Laporan keuangan disusun dan disajikan berdasarkan nilai historis, kecuali beberapa akun tertentu disusun berdasarkan pengukuran lain sebagaimana diuraikan dalam kebijakan akuntansi masing-masing akun tersebut. Dasar penyusunan laporan keuangan adalah dasar akrual, kecuali laporan arus kas.

The measurement basis used is the historical cost, except for certain accounts which are measured on the bases describe in the related accounting policies. The financial statements, except for the statement of cash flows, are prepared and presented under the accrual basis of accounting.

15



IKHTISAR KEBIJAKAN PENTING (lanjutan)

AKUNTANSI

b. Dasar Penyusunan (lanjutan)

Laporan


YANG

2.

Keuangan

b. Basis for Preparation Statements (continued)

d.

of

Financial

The statement of cash flows present the changes in cash and cash equivalents from operating, investing, and financing activities. The statement of cash flows are prepared using the direct method. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash, current accounts with Bank Indonesia, current accounts with other banks, placements with Bank Indonesia and other banks and Certificates of Bank Indonesia that mature within three months from the date of acquisition, as long as they are not being pledged as collateral for borrowings nor restricted.

Laporan arus kas menyajikan perubahan dalam kas dan setara kas dari aktivitas operasi, investasi dan pendanaan. Laporan arus kas disusun dengan metode langsung. Untuk tujuan laporan arus kas, kas dan setara kas meliputi kas, giro pada Bank Indonesia, giro pada bankbank lain, penempatan pada Bank Indonesia dan bank-bank lain dan Sertifikat Bank Indonesia yang jatuh tempo dalam waktu tiga bulan sejak tanggal perolehan, sepanjang tidak digunakan sebagai jaminan atas pinjaman yang diterima serta tidak dibatasi penggunaannya.

c.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Penggunaan pertimbangan, estimasi dan asumsi

c. Use of judgments, assumptions

estimates

and

Penyusunan laporan keuangan sesuai dengan Standar Akuntansi Keuangan di Indonesia mengharuskan manajemen untuk membuat pertimbangan, estimasi dan asumsi yang mempengaruhi penerapan kebijakan akuntansi dan jumlah aset, liabilitas, pendapatan dan beban yang dilaporkan.

The preparation of financial statements in conformity with Indonesian Financial Accounting Standards requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

Walaupun estimasi ini dibuat berdasarkan pengetahuan terbaik manajemen atas kejadian dan kegiatan saat ini, hasil aktual dapat berbeda dari estimasi tersebut.

Although these estimates are based on management’s best knowledge of current events and activities, actual results may differ from those estimates.

Estimasi dan asumsi yang digunakan ditelaah secara berkesinambungan. Revisi atas estimasi akuntansi diakui pada periode dimana estimasi tersebut direvisi dan periode-periode yang akan datang yang dipengaruhi oleh revisi estimasi tersebut.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the periods in which the estimate is revised and in any future periods affected.

Informasi mengenai hal-hal penting yang terkait dengan ketidakpastian estimasi dan pertimbangan-pertimbangan penting dalam penerapan kebijakan akuntansi yang memiliki dampak yang signifikan terhadap jumlah yang diakui dalam laporan keuangan dijelaskan di Catatan 4.

Information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have significant effect on the amount recognized in the financial statements are described in Note 4.

Penjabaran Transaksi dan Saldo dalam Valuta Asing

d. Foreign Currency Balances Translation

Transactions

and

Transactions in foreign currencies are translated into Rupiah at the exchange rates prevailing at the transaction date.

Transaksi-transaksi dalam valuta asing dijabarkan ke dalam Rupiah dengan menggunakan kurs pada tanggal transaksi.

16



IKHTISAR KEBIJAKAN PENTING (lanjutan) d.

YANG

2.

Penjabaran Transaksi dan Saldo dalam Valuta Asing (lanjutan)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) d. Foreign Currency Transactions Balances Translation (continued)

and

Saldo akhir tahun aset moneter dan liabilitas moneter dalam valuta asing dijabarkan ke dalam Rupiah dengan kurs laporan (penutupan) yang ditetapkan oleh Bank Indonesia, yaitu kurs tengah yang merupakan rata-rata kurs beli dan kurs jual berdasarkan Reuters pada pukul 16.00 WIB setiap hari.

Year-end balances of monetary assets and liabilities denominated in foreign currencies are translated into Rupiah using reporting (closing) rate determined by Bank Of Indonesia, which is middle rate from the average of bid and ask rate based on Reuters at 16.00 WIB (Western Indonesia local time) everyday.

Laba atau rugi kurs valuta asing atas aset dan liabilitas moneter merupakan selisih antara biaya perolehan diamortisasi dalam Rupiah pada awal tahun, disesuaikan dengan suku bunga efektif dan pembayaran selama tahun berjalan dan biaya perolehan diamortisasi dalam valuta asing yang dijabarkan ke dalam Rupiah dengan menggunakan kurs pada akhir tahun.

The foreign currency gain or loss on monetary items is the difference between amortized cost in Rupiah at the beginning of the year, adjusted for effective interest and payments during the year and the amortized cost in foreign currency translated into Rupiah at the exchange rate at the end of the year.

Aset dan liabilitas non moneter dalam valuta asing yang diukur berdasarkan biaya historis dijabarkan dengan menggunakan kurs pada tanggal transaksi. Keuntungan atau kerugian selisih kurs yang timbul dari transaksi dalam valuta asing dan dari penjabaran aset dan liabilitas moneter dalam valuta asing diakui pada laba rugi tahun berjalan.

Non-monetary assets and liabilities denominated in foreign currency that are measured based on historical cost are translated using the exchange rate at the date of the transaction. The exchange gains or losses arising from transactions in foreign currencies and from the translation of foreign currencies monetary assets and liabilities are recognized in profit or loss for the year.

Kurs valuta asing utama yang digunakan pada tanggal 31 Desember 2016 dan 2015 adalah sebagai berikut (dalam Rupiah penuh):

The major rates of foreign exchange used as of December 31, 2016 and 2015 are as follows (in full amount):

Valuta asing Euro Eropa Dolar Amerika Serikat Dolar Australia Dolar Singapura Dolar Hong Kong Yen Jepang Poundsterling Inggris Riyal Qatar Franc Swiss Dolar Selandia Baru Baht Thailand

e.

AKUNTANSI


2016

2015

14.175,77 13.472,50 9.723,11 9.311,93 1.737,34 115,07 16.555,01 3.701,24 13.208,98 9.362,72 376,12

Foreign currencies

15.056,67 13.785,00 10.083,73 9.758,95 1.778,70 114,52 20.439,02 3.787,09 13.919,33 9.444,80 381,97

Transaksi dengan Pihak-pihak Berelasi

European Euro United States Dollar Australian Dollar Singapore Dollar Hong Kong Dollar Japanese Yen Great Britain Poundsterling Qatari Riyal Swiss Franc New Zealand Dollar Thailand Baht

e. Transactions with Related Parties

Dalam laporan keuangan ini, istilah pihak-pihak berelasi digunakan sesuai dengan PSAK No. 7 (Revisi 2010), “Pengungkapan Pihak-pihak Berelasi”.

In these financial statements, the term related party is used as defined in SFAS No. 7 (2010 Revision), “Related Party Disclosures”.

Pihak berelasi adalah orang atau entitas yang terkait dengan entitas yang menyiapkan laporan keuangannya (dalam PSAK No. 7 (Revisi 2010) dirujuk sebagai “entitas pelapor”).

A related party is a person or entity that is related to the entity that is preparing its financial statements (referred to SFAS No. 7 (2010 Revision) as the “reporting entity”).

17



IKHTISAR KEBIJAKAN PENTING (lanjutan) e. Transaksi (lanjutan) a)

b)

dengan

AKUNTANSI Pihak-pihak


YANG

2. SUMMARY OF SIGNIFICANT POLICIES (continued)

Berelasi

e.

Transactions (continued) a)

Orang atau anggota keluarga dekatnya mempunyai relasi dengan entitas pelapor jika orang tersebut:

with

ACCOUNTING

Related

Parties

A person or a close member of that person’s family is related to a reporting entity if that person

i.

memiliki pengendalian atau pengendalian bersama atas entitas pelapor;

i.

has control or joint control over the reporting entity;

ii.

memiliki pengaruh signifikan atas entitas pelapor; atau

ii.

has significant influence over the reporting entity; or

iii.

merupakan personil manajemen kunci entitas pelapor atau entitas induk dari entitas pelapor.

iii.

is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

b)

Suatu entitas berelasi dengan entitas pelapor jika memenuhi salah satu hal berikut:

An entity is related to a reporting entity if any of the following conditions applies :

i.

Entitas dan entitas pelapor adalah anggota dari kelompok usaha yang sama (artinya entitas induk, entitas anak, dan entitas anak berikutnya saling berelasi dengan entitas lainnya).

i.

The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

ii.

Satu entitas adalah entitas asosiasi atau ventura bersama dari entitas lain (atau entitas asosiasi atau ventura bersama yang merupakan anggota suatu kelompok usaha, yang mana entitas lain tersebut adalah anggotanya).

ii.

One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

iii.

Kedua entitas tersebut adalah ventura bersama dari pihak ketiga yang sama.

iii.

Both entities are joint ventures of the same third party.

iv.

Satu entitas adalah ventura bersama dari entitas ketiga dan entitas yang lain adalah entitas asosiasi dari entitas ketiga.

iv.

One entity is a joint venture of a third entity and the other entity is an associate of the third entity.

v.

Entitas tersebut adalah suatu program imbalan pasca-kerja untuk imbalan kerja dari salah satu entitas pelapor atau entitas yang terkait dengan entitas pelapor. Jika entitas pelapor adalah program tersebut, maka entitas-entitas yang menyelenggarakan sponsor juga berelasi dengan entitas pelapor.

v.

The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.

vi.

Entitas yang dikendalikan atau dikendalikan bersama oleh orang yang diidentifikasi dalam huruf (a).

vi. The entity is controlled, or jointly controlled by a person identified in (a).

vii. Orang yang diidentifikasi dalam huruf (a) (i) memiliki pengaruh signifikan atas entitas atau merupakan personil manajemen kunci entitas (atau entitas induk dari entitas).

vii. A person identified in (a) (i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

18



IKHTISAR KEBIJAKAN PENTING (lanjutan) e. Transaksi (lanjutan) b)

dengan

AKUNTANSI Pihak-pihak


YANG


Berelasi

e.

b)

Suatu entitas berelasi dengan entitas pelapor jika memenuhi salah satu hal berikut: (lanjutan)

with

Related

Parties

An entity is related to a reporting entity if any of the following conditions applies: (continued)

Transactions and balances of accounts with related parties, whether or not transacted at normal terms and conditions similar to those with non-related parties, are disclosed in the notes to the financial statements.

Transaksi dan saldo dengan pihak-pihak berelasi, baik yang dilaksanakan dengan ataupun tidak dilaksanakan dengan persyaratan dan kondisi normal yang sama untuk pihak-pihak yang tidak berelasi, diungkapkan dalam catatan atas laporan keuangan. f.

Transactions (continued)

ACCOUNTING

Aset Keuangan dan Liabilitas Keuangan

f.

Financial Assets and Financial Liabilities

Aset keuangan Bank terutama terdiri dari kas, giro pada Bank Indonesia, giro pada bank-bank lain, penempatan pada Bank Indonesia dan bank-bank lain, tagihan derivatif, tagihan akseptasi, efek-efek yang dibeli dengan janji dijual kembali, kredit yang diberikan, efek-efek dan aset lain-lain.

The Bank’s financial assets mainly consist of cash, current accounts with Bank Indonesia, current accounts with other banks, placements with Bank Indonesia and other banks, derivatives receivable, acceptances receivables, securities purchased under agreement to resell, loans, securities and other assets.

Liabilitas keuangan Bank terutama terdiri dari simpanan dari nasabah, simpanan dari bankbank lain, liabilitas akseptasi, liabilitas derivatif, pinjaman subordinasi, beban masih harus dibayar, dan liabilitas lain-lain.

The Bank’s financial liabilities mainly consist of deposits from customers, deposits from other banks, acceptances payables, derivatives payable, subordinated loan, accruals and other liabilities.

(i)

(i) Classification

Klasifikasi Bank mengelompokkan aset keuangannya dalam kategori berikut pada saat pengakuan awal:

The Bank classifies its financial assets in the following categories on initial recognition:

i. Diukur pada nilai wajar melalui laba rugi, yang memiliki 2 sub-klasifikasi, yaitu aset keuangan yang ditetapkan demikian pada saat pengakuan awal dan aset keuangan yang diklasifikasikan dalam kelompok diperdagangkan

i.

ii. Tersedia untuk dijual;

ii. Available-for-sale;

iii. Dimiliki hingga jatuh tempo;

iii. Held-to-maturity;

iv. Pinjaman yang diberikan dan piutang.

iv. Loans and receivables

Liabilitas keuangan dikelompokkan ke dalam kategori berikut pada saat pengakuan awal:

Financial liabilities are classified into the following categories on initial recognition:

i. Diukur pada nilai wajar melalui laba rugi, yang memiliki 2 sub-klasifikasi, yaitu liabilitas keuangan yang ditetapkan demikian pada saat pengakuan awal dan liabilitas keuangan yang diklasifikasikan dalam kelompok diperdagangkan;

i.

19

Fair value through profit or loss, which has 2 sub-classifications, i.e. financial assets designated as such upon initial recognition and financial assets classified as held for trading;

Fair value through profit or loss, which has 2 sub-classifications, i.e. those designated as such upon initial recognition and those classified as held for trading;



IKHTISAR KEBIJAKAN PENTING (lanjutan) f.

AKUNTANSI


YANG

2.

Aset Keuangan dan Liabilitas Keuangan (lanjutan) (i)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) f.

Klasifikasi (lanjutan)

Financial Assets and Financial Liabilities (continued) (i) Classification (continued) ii. Financial liabilities amortized cost.

ii. Liabilitas keuangan yang diukur pada biaya perolehan diamortisasi.

measured

at

Kategori untuk diperdagangkan adalah aset dan liabilitas keuangan yang diperoleh atau dimiliki Bank terutama untuk tujuan dijual atau dibeli kembali dalam waktu dekat, atau dimiliki sebagai bagian dari portofolio yang dikelola bersama untuk memperoleh laba jangka pendek atau position taking.

Held for trading are those assets and liabilities that the Bank acquires or incurs principally for the purpose of selling or repurchasing in the near term, or holds as part of a portfolio that is managed together for short-term profit or position taking.

Kategori tersedia untuk dijual terdiri dari aset keuangan non-derivatif yang ditetapkan sebagai tersedia untuk dijual atau yang tidak dikelompokkan ke dalam salah satu kategori aset keuangan lainnya.

Available-for-sale category consists of non-derivative financial assets that are designated as available-for-sale or are not classified in one of the other categories of financial assets.

Di dalam kategori dimiliki hingga jatuh tempo adalah aset keuangan nonderivatif dengan pembayaran tetap atau telah ditentukan dan jatuh temponya telah ditetapkan dimana Bank mempunyai intensi positif dan kemampuan untuk memiliki hingga jatuh tempo, dan yang tidak ditetapkan pada nilai wajar melalui laba rugi atau tersedia untuk dijual.

In the held-to-maturity category are nonderivative financial assets with fixed or determinable payments and fixed maturity that the Bank has the positive intent and ability to hold to maturity, and which are not designated at fair value through profit or loss or available-forsale.

Pinjaman yang diberikan dan piutang adalah aset keuangan non-derivatif dengan pembayaran tetap atau telah ditentukan yang tidak mempunyai kuotasi di pasar aktif dan Bank tidak berniat untuk menjualnya segera atau dalam waktu dekat.

Loans and receivables are nonderivative financial assets with fixed or determinable payments that are not quoted in an active market and that the Bank does not intend to sell immediately or in the near term.

(ii) Pengakuan

(ii) Recognition

Bank pada awalnya mengakui kredit yang diberikan serta simpanan diukur pada nilai wajar pada tanggal perolehan.

The Bank initially recognizes loans and deposits at fair value on the date of origination

Pembelian dan penjualan aset keuangan yang lazim (regular) diakui pada tanggal perdagangan dimana Bank memiliki komitmen untuk membeli atau menjual aset tersebut.

Regular way purchases and sales of financial assets are recognized on the trade date at which the Bank commits to purchase or sell the asset.

20




AKUNTANSI


YANG

2.

Aset Keuangan dan Liabilitas Keuangan (lanjutan)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) f. Financial Assets and Financial Liabilities (continued)

(ii) Pengakuan (lanjutan)

(ii) Recognition (continued)

Semua aset dan liabilitas keuangan lainnya pada awalnya diakui pada tanggal perdagangan dimana Bank menjadi suatu pihak dalam ketentuan kontraktual instrumen tersebut.

All other financial assets and liabilities are initially recognized on the trade date at which the Bank becomes a party to the contractual provisions of the instrument.

Pada saat pengakuan awal, aset keuangan atau liabilitas keuangan diukur pada nilai wajar ditambah/dikurang (kecuali untuk item yang tidak diukur pada nilai wajar melalui laba rugi setelah pengakuan awal) biaya transaksi yang dapat diatribusikan secara langsung atas perolehan aset keuangan atau penerbitan liabilitas keuangan. Pengukuran aset keuangan dan liabilitas keuangan setelah pengakuan awal tergantung pada klasifikasi aset keuangan dan liabilitas keuangan tersebut.

A financial asset or financial liability is initially measured at fair value plus/less (except for an item not subsequently measured at fair value through profit or loss) transaction costs that are directly attributable to the acquisition of financial asset or issue of financial liability. The subsequent measurement of financial assets and financial liabilities depends on its classification.

Biaya transaksi hanya meliputi biayabiaya yang dapat diatribusikan secara langsung untuk perolehan suatu aset keuangan atau penerbitan suatu liabilitas keuangan dan merupakan biaya tambahan yang tidak akan terjadi apabila instrumen keuangan tersebut tidak diperoleh atau diterbitkan. Untuk aset keuangan, biaya transaksi ditambahkan pada jumlah yang diakui pada awal pengakuan aset, sedangkan untuk liabilitas keuangan, biaya transaksi dikurangkan dari jumlah utang yang diakui pada awal pengakuan liabilitas.

Transaction costs include only those costs that are directly attributable to the acquisition of a financial asset or issue of a financial liability and are incremental costs that would not have been incurred if the financial instrument had not been acquired or issued. In the case of financial assets, transaction costs are added to the amount recognized initially, while for financial liabilities, transaction costs are deducted from the amount of debt recognized initially.

Biaya transaksi tersebut diamortisasi selama umur instrumen berdasarkan metode suku bunga efektif dan dicatat sebagai bagian dari pendapatan bunga untuk biaya transaksi sehubungan dengan aset keuangan atau sebagai bagian dari beban bunga untuk biaya transaksi sehubungan dengan liabilitas keuangan.

Such transactions costs are amortized over the terms of the instruments based on the effective interest method and are recorded as part of interest income for transaction costs related to financial assets or interest expenses for transaction costs related to financial liabilities.

(iii) Penghentian pengakuan a. Aset keuangan pengakuannya jika: -

(iii) Derecognition a. Financial assets are derecognized when:

dihentikan

-

Hak kontraktual atas arus kas yang berasal dari aset keuangan tersebut berakhir; atau

21

The contractual rights to receive cash flows from the financial assets have expired; or




AKUNTANSI


YANG

2.


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) f. Financial Assets and Financial Liabilities (continued)

(iii) Penghentian pengakuan (lanjutan)

(iii) Derecognition (continued) a.

a. Aset keuangan dihentikan pengakuannya jika: (lanjutan)

Financial assets are derecognized when: (continued)

-

Bank telah mentransfer hak-nya untuk menerima arus kas yang berasal dari aset keuangan atau menanggung kewajiban untuk membayarkan arus kas yang diterima tersebut secara penuh tanpa penundaan berarti kepada pihak ketiga di bawah kesepakatan pelepasan (pass through arrangement); dan

-

The Bank has transferred its rights to receive cash flows from the financial assets or has assumed an obligation to pay the cash flows in full without material delay to a third party under a ”pass through arrangement”; and

-

(a) Bank telah mentransfer secara substansial seluruh risiko dan manfaat atas aset, atau (b) Bank tidak mentransfer maupun tidak memiliki secara substansial seluruh risiko dan manfaat atas aset, namun telah mentransfer pengendalian atas aset.

-

(a) the Bank has transferred substantially all the risks and rewards of the asset, or (b) the Bank has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Ketika Bank telah mentransfer hak untuk menerima arus kas dari aset atau di bawah kesepakatan pelepasan (pass through arrangement), dan tidak mentransfer serta tidak memiliki secara substansial seluruh risiko dan manfaat atas aset atau tidak mentransfer kendali atas aset, aset diakui sebesar keterlibatan Bank yang berkelanjutan atas aset tersebut.

When the Bank has transferred its rights to receive cash flows from an asset or has entered into a “pass through arrangement”, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the Bank’s continuing involvement in the asset.

Kredit yang diberikan atau aset keuangan lain dihapusbukukan ketika tidak terdapat prospek yang realistis mengenai pengembalian kredit dalam waktu dekat atau hubungan normal antara Bank dan debitur telah berakhir. Kredit yang tidak dapat dilunasi dihapusbukukan dengan mendebit cadangan kerugian penurunan nilai. Penerimaan kemudian atas kredit yang telah dihapusbukukan sebelumnya, jika pada periode berjalan dikreditkan ke dalam akun cadangan kerugian penurunan nilai atas kredit yang diberikan di laporan posisi keuangan, sedangkan jika setelah tanggal laporan posisi keuangan dikreditkan sebagai pendapatan operasional lainnya dalam laporan laba rugi dan penghasilan komprehensif lain.

Loans and receivables or other financial assets are written off when there is no realistic prospect of collection in the near future or the normal relationship between the Bank and the borrowers has ceased to exist. When a loan is deemed uncollectible, it is written off against the related allowance for impairment losses. Subsequent recoveries of loans previously written off, are added to the allowance for impairment losses account in the statements of financial position, if recovered in the current year and are recognized in the statements of profit or loss and other comprehensive income as other operational income, if recovered after the statements of financial position date.

22



2.


AKUNTANSI


YANG

2.


SUMMARY OF SIGNIFICANT POLICIES (continued) f.

(iii) Penghentian pengakuan (lanjutan)

ACCOUNTING

Financial Assets and Financial Liabilities (continued) (iii) Derecognition (continued)

b. Liabilitas keuangan dihentikan pengakuannya jika liabilitas keuangan tersebut berakhir, yaitu ketika liabilitas yang ditetapkan dalam kontrak dilepaskan atau dibatalkan atau kadaluwarsa.

b. Financial liabilities are derecognized when they are extinguished, i.e. liabilities stated in the contract are discharged, cancelled or has expired.

Jika suatu liabilitas keuangan yang ada digantikan dengan yang lain oleh pemberi pinjaman yang sama pada keadaan yang secara substansial berbeda, atau berdasarkan suatu liabilitas yang ada yang secara substansial telah diubah, seperti pertukaran atau modifikasi yang diperlakukan sebagai penghentian pengakuan liabilitas awal dan pengakuan liabilitas baru dan perbedaan nilai tercatat masingmasing diakui dalam laporan laba rugi dan penghasilan komprehensif lain.

Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in the statements of profit or loss and other comprehensive income.

(iv) Saling hapus

(iv) Offsetting

Aset keuangan dan liabilitas keuangan saling hapus dan nilai netonya dilaporkan di laporan posisi keuangan jika, dan hanya jika, saat ini terdapat hak yang berkekuatan hukum untuk saling hapus jumlah keduanya dan terdapat intensi untuk diselesaikan secara neto, atau untuk merealisasikan aset dan menyelesaikan liabilitas secara bersamaan. Hak yang berkekuatan hukum berarti: a. tidak terdapat kontinjensi di masa yang akan datang, dan b. hak yang berkekuatan hukum pada kondisi-kondisi berikut ini; i. kegiatan bisinis normal; ii. kondisi kegagalan usaha; dan iii. kondisi gagal bayar atau bangkrut

Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if, and only if, there is currently an enforceable legal rights to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously. Enforceable right means:

Pendapatan dan beban disajikan dalam jumlah bersih hanya jika diperkenankan oleh standar akuntansi.

Income and expenses are presented on a net basis only when permitted by accounting standards.

a. there are no contingencies in the future, and b. enforceable right to the following conditions; i. deploying normal activities; ii. conditions of business failures; and iii. conditions of default or bankruptcy

23




AKUNTANSI


YANG

2.

Aset Keuangan dan Liabilitas Keuangan (lanjutan) (v) Pengukuran diamortisasi

biaya


perolehan

ACCOUNTING

Financial Assets and Financial Liabilities (continued) (v) Amortized cost measurement The amortized cost of a financial asset or liability is the amount at which the financial asset or liability is measured at initial recognition, minus principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount recognized and the maturity amount, minus any reduction for impairment.

Biaya perolehan diamortisasi dari aset keuangan atau liabilitas keuangan adalah jumlah aset atau liabilitas keuangan yang diukur pada saat pengakuan awal, dikurangi pembayaran pokok, ditambah atau dikurangi dengan amortisasi kumulatif dengan menggunakan metode suku bunga efektif yang dihitung dari selisih antara nilai awal dan nilai jatuh temponya, dan dikurangi cadangan kerugian penurunan nilai. (vi) Pengukuran nilai wajar

(vi) Fair value measurement

Nilai wajar adalah harga yang akan diterima untuk menjual suatu aset atau harga yang akan dibayar untuk mengalihkan suatu liabilitas dalam transaksi teratur antara pelaku pasar pada tanggal pengukuran.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Pengukuran nilai wajar mengasumsikan bahwa transaksi untuk menjual aset atau mengalihkan liabilitas terjadi:

The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: In the principal market for the asset or liability, or In the absence of a principal market, in the most advantageous market for the asset or liability.

-

Di pasar utama untuk aset dan liabilitas tersebut; atau Jika tidak terdapat pasar utama, dipasar yang paling menguntungkan untuk aset atau liabilitas tersebut.

Nilai wajar suatu aset atau liabilitas diukur menggunakan asumsi yang akan digunakan pelaku pasar ketika menentukan harga aset dan liabilitas tersebut dengan asumsi bahwa pelaku pasar bertindak dalam kepentingan ekonomik terbaiknya.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

Pengukuran nilai wajar aset nonkeuangan memperhitungkan kemampuan pelaku pasar untuk menghasilkan manfaat ekonomik dengan menggunakan aset dalam penggunaan tertinggi dan terbaiknya atau dengan menjualnya kepada pelaku pasar lain yang akan menggunakan aset tersebut dalam penggunaan tertinggi dan terbaiknya.

A fair value measurement of a nonfinancial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

Bank menggunakan teknik penilaian yang sesuai dalam keadaan dan dimana data yang memadai tersedia untuk mengukur nilai wajar, memaksimalkan penggunaan input yang dapat diobservasi yang relevan dan meminimalkan penggunaan input yang tidak dapat diobservasi.

The Bank uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

24




AKUNTANSI


YANG

2.



(vi) Pengukuran nilai wajar (lanjutan)

g.

ACCOUNTING

Financial Assets and Financial Liabilities (continued) (vi) Fair value measurement (continued)

Semua aset dan liabilitas dimana nilai wajar diukur atau diungkapkan dalam laporan keuangan dapat dikategorikan pada level hirarki nilai wajar, berdasarkan tingkatan input terendah yang signifikan atas pengukuran nilai wajar secara keseluruhan: - Level 1 : harga kuotasian (tanpa penyesuaian) di pasar aktif untuk aset atau liabilitas yang identik. - Level 2 : input selain harga kuotasian yang termasuk dalam level 1 yang dapat diobservasi untuk aset dan liabilitas, baik secara langsung atau tidak langsung. - Level 3 : input yang tidak dapat diobservasi untuk aset dan liabilitas.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: - Level 1 : quoted (unadjusted) market prices in active market for identical assets or liabilities

Untuk aset dan liabilitas yang diakui pada laporan keuangan secara berulang, Bank menentukan apakah terjadi transfer antara level di dalam hirarki dengan cara mengevaluasi kategori (berdasarkan input level terendah yang signifikan dalam pengukuran nilai wajar) setiap akhir periode pelaporan.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Bank determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

Untuk tujuan pengungkapan nilai wajar, Bank telah menentukan kelas aset dan liabilitas berdasarkan sifat, karakteristik, risiko aset dan liabilitas, dan level hirarki nilai wajar (Catatan 34).

For the purpose of fair value disclosures, the Bank has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy (Note 34).

- Level 2 :

- Level 3 :

Giro pada Bank Indonesia dan Bank-Bank Lain

g.

valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

Current Accounts with Bank Indonesia and Other Banks Subsequent to initial recognition, current accounts with Bank Indonesia and other banks are carried at amortized cost using effective interest method.

Setelah pengakuan awal, giro pada Bank Indonesia dan giro pada bank-bank lain dicatat pada biaya perolehan diamortisasi menggunakan metode suku bunga efektif.

25



IKHTISAR KEBIJAKAN PENTING (lanjutan) h.

AKUNTANSI


YANG

2.

Penempatan pada Bank Indonesia dan Bank-Bank Lain, Kredit yang Diberikan dan Efek-efek yang Dibeli dengan Janji Dijual Kembali

SUMMARY OF SIGNIFICANT POLICIES (continued) h.

ACCOUNTING

Placements with Bank Indonesia and Other Banks, Loans and Securities Purchased under Agreement to Resell

Penempatan pada Bank Indonesia dan bankbank lain, kredit dan efek-efek yang dibeli dengan janji dijual kembali pada awalnya diukur pada nilai wajar ditambah biaya transaksi yang dapat diatribusikan secara langsung dan merupakan biaya tambahan untuk memperoleh aset keuangan tersebut, dan setelah pengakuan awal diukur pada biaya perolehan diamortisasi menggunakan metode suku bunga efektif.

Placements with Bank Indonesia and other banks, loans and securities purchased under agreement to resell are initially measured at fair value plus incremental direct transaction costs, and subsequently measured at their amortized cost using the effective interest method.

Kredit dalam rangka pembiayaan bersama (kredit sindikasi) dinyatakan sebesar biaya perolehan diamortisasi sesuai dengan porsi risiko yang ditanggung oleh Bank.

Syndicated loans are stated at amortized cost in accordance with the risk borned by the Bank.

Bank mencatat restrukturisasi kredit bermasalah berdasarkan jenis restrukturisasi. Dalam hal restrukturisasi kredit bermasalah dilakukan hanya dengan modifikasi persyaratan kredit, Bank mencatat dampak restrukturisasi tersebut secara prospektif dan tidak mengubah nilai tercatat kredit yang diberikan pada tanggal restrukturisasi, kecuali jika jumlahnya melebihi nilai kini penerimaan kas masa depan yang ditentukan dalam persyaratan baru. Jika nilai kini penerimaan kas masa depan sebagaimana yang ditentukan dalam persyaratan baru dari kredit yang direstrukturisasi tersebut lebih rendah daripada nilai tercatat kredit yang diberikan sebelum direstrukturisasi, Bank harus mengurangkan saldo kredit yang diberikan ke suatu jumlah yang sama dengan jumlah nilai kini penerimaan kas masa depan. Jumlah pengurangan tersebut diakui sebagai biaya cadangan kerugian penurunan nilai individual.

The Bank accounts for troubled debt restructuring in accordance with the type of restructuring. In troubled debt restructuring which involves only a modification of terms, the Bank accounts for the effect of the restructuring prospectively and does not change the carrying value of receivables at the time of restructuring unless the amount exceeds the present value of the total future cash receipts specified in the new terms. If the present value of the total future cash receipts specified in the new terms is lower than the recorded receivables balance prior to restructuring, the Bank reduces the receivables balance to the amount equal to the present value of the total future cash receipts. The amount of the reduction is recognized as individual allowance for impairment losses.

Penerimaan kembali dari kredit yang telah dihapusbukukan diakui dalam laba rugi tahun berjalan.

Recoveries from loans written-off are recognized in the current year profit or loss.

Bank membeli efek-efek dan secara bersamaan membuat perjanjian untuk menjual kembali aset tersebut (atau aset yang secara substansial sama) pada harga yang telah ditetapkan pada tanggal tertentu di masa mendatang (“securities purchased under agreement to resell”).

The Bank purchases a security and simultaneously enters into an agreement to resell the asset (or a substantially similar asset) at a fixed price on a future date (“securities purchased under agreement to resell”).

26



IKHTISAR KEBIJAKAN PENTING (lanjutan) h.

AKUNTANSI


YANG

2.

Penempatan pada Bank Indonesia dan Bank-Bank Lain, Kredit yang Diberikan dan Efek-efek yang Dibeli dengan Janji Dijual Kembali (lanjutan)

SUMMARY OF SIGNIFICANT POLICIES (continued) h.

j.

Placements with Bank Indonesia and Other Banks, Loans and Securities Purchased under Agreement to Resell (continued) The securities purchased under agreement to resell is presented as receivables and stated at the agreed resale price less the difference between the purchase price and the agreed resale price. The difference between the purchase price and the agreed resale price is amortized using the effective interest method as interest income over the period commencing from the acquisition date to the resale date.

Efek-efek yang dibeli dengan janji dijual kembali disajikan sebagai tagihan sebesar harga jual kembali efek-efek yang disepakati dikurangi selisih antara harga beli dan harga jual kembali yang disepakati. Selisih antara harga beli dan harga jual kembali yang disepakati tersebut diamortisasi menggunakan metode suku bunga efektif sebagai pendapatan bunga selama jangka waktu sejak efek-efek tersebut dibeli hingga dijual kembali.

i.

ACCOUNTING

i.

Tagihan dan Liabilitas Derivatif

Derivatives Receivable and Payable

Tagihan dan liabilitas derivatif pada saat pengakuan awal dan setelah pengakuan awal diakui dan diukur pada nilai wajar di laporan posisi keuangan, dengan biaya transaksi yang terjadi diakui langsung pada laba rugi tahun berjalan.

Derivatives receivable and payable are initially recognized and subsequently measured at fair value in the statement of financial position, with transaction costs taken directly to the current year profit or loss.

Semua perubahan nilai wajar diakui sebagai bagian dari pendapatan bersih instrumen yang diperdagangkan pada laporan laba rugi dan penghasilan komprehensif lain. Keuntungan atau kerugian yang direalisasi pada saat penghentian pengakuan tagihan derivatif dan liabilitas derivatif, diakui dalam laporan laba rugi tahun berjalan.

All changes in fair value are recognized as part of net trading income in the statement of profit or loss and other comprehensive income. Gains or losses which are realized when the derivatives receivable and derivatives payable are derecognized, are recognized in the current year profit or loss.

Tagihan derivatif dan liabilitas derivatif tidak direklasifikasi setelah pengakuan awal.

Derivatives receivable and payable are not reclassified subsequent to their initial recognition.

Efek-efek

j.

Securities

Efek-efek pada awalnya diukur pada nilai wajar ditambah biaya transaksi. Setelah pengakuan awal, efek-efek dicatat sesuai dengan klasifikasi masing-masing sebagai aset keuangan yang tersedia untuk dijual atau dimiliki hingga jatuh tempo.

Securities are initially measured at fair value plus transaction costs. Subsequent to initial recognition, securities are accounted for depending on their classification either as available-for-sale or held-to-maturity.

i. Tersedia untuk dijual

i. Available-for-sale Subsequent to initial recognition, securities classified as available-for-sale are carried at their fair value.

Setelah pengakuan awal, efek-efek yang diklasifikasikan dalam kelompok tersedia untuk dijual dinyatakan pada nilai wajarnya.

27



IKHTISAR KEBIJAKAN PENTING (lanjutan) j.

AKUNTANSI


YANG


Efek-efek (lanjutan) i.

j.

Securities (continued) i. Available-for-sale (continued)

Tersedia untuk dijual (lanjutan)

Interest income is recognized in profit or loss using the effective interest method. Foreign exchange gains or losses on available-forsale securities are recognized in the current year profit or loss. Other fair value changes are recognized directly in other comprehensive income until the investment is sold or impaired, whereupon the cumulative gains and losses previously recognized in other comprehensive income are reclassified to profit or loss as a reclassification adjustment.

Pendapatan bunga diakui dalam laba rugi dengan menggunakan metode suku bunga efektif. Laba atau rugi selisih kurs atas efek-efek yang tersedia untuk dijual diakui pada laba rugi tahun berjalan. Perubahan nilai wajar lainnya diakui secara langsung dalam pendapatan komprehensif lain sampai investasi tersebut dijual atau mengalami penurunan nilai, dimana keuntungan dan kerugian kumulatif yang sebelumnya diakui dalam pendapatan komprehensif lain direklasifikasi ke laba rugi sebagai penyesuaian reklasifikasi. ii.

ACCOUNTING

ii. Held-to-maturity

Dimiliki hingga jatuh tempo Efek-efek yang diklasifikasikan dimiliki hingga jatuh tempo dicatat pada biaya perolehan diamortisasi menggunakan metode suku bunga efektif. Bila terjadi penjualan atau reklasifikasi efek-efek dalam kelompok dimiliki hingga jatuh tempo dalam jumlah yang lebih dari jumlah yang tidak signifikan yang belum mendekati tanggal jatuh tempo, maka hal ini akan menyebabkan reklasifikasi atas semua efek-efek yang dimiliki hingga jatuh tempo ke dalam kelompok tersedia untuk dijual, dan Bank tidak diperkenankan untuk mengklasifikasikan efek-efek sebagai dimiliki hingga jatuh tempo untuk tahun berjalan dan untuk kurun waktu dua tahun mendatang.

Securities classified as held-to-maturity are carried at amortized cost using the effective interest method. Any sale or reclassification of a more than insignificant amount of heldto-maturity securities not close to their maturity would result in the reclassification of all held-to-maturity securities as available-forsale, and prevent the Bank from classifying securities as held-to-maturity for the current year and the following two financial years.

Sejak tanggal 1 Januari 2016, Bank menentukan klasifikasi investasi pada surat berharga, khususnya sukuk, berdasarkan model usaha yang ditentukan berdasarkan klasifikasi sesuai PSAK No. 110 (Revisi 2015) tentang “Akuntansi Sukuk" sebagai berikut:

Since 1 January 2016, the Bank defined the classification of Investment in marketable securities, specifically sukuk, based on busines model in accordance with SFAS No. 110 (Revised 2015) on "Accounting for Sukuk" as follows: 1)

1) Surat berharga diukur pada biaya perolehan disajikan sebesar biaya perolehan (termasuk biaya transaksi) yang disesuaikan dengan premi dan/atau diskonto yang belum diamortisasi. Premi dan diskonto diamortisasi selama periode hingga jatuh tempo.

28

At cost securities are stated at cost (including transaction costs), adjusted by unamortised premium and/or discount. Premium and discount are amortised over the period until maturity.



IKHTISAR KEBIJAKAN PENTING (lanjutan) j.

k.

AKUNTANSI


YANG


Efek-efek (lanjutan)

j.

ACCOUNTING

Securities (continued)

2) Surat berharga diukur pada nilai wajar melalui laba rugi, yang dinyatakan sebesar nilai wajar. Keuntungan atau kerugian yang belum direalisasi akibat kenaikan atau penurunan nilai wajarnya disajikan dalam laporan laba rugi tahun yang bersangkutan.

2) At fair value securities are stated at fair values through profit or loss. Unrealised gains or losses from the increase or decrease in fair values are presented in current year profit or loss.

3) Surat berharga yang diukur pada nilai wajar melalui penghasilan komprehensif lainnya. Surat berharga disajikan sebesar nilai wajar. Keuntungan atau kerugian yang belum direalisasi akibat kenaikan atau penurunan nilai wajarnya disajikan dalam penghasilan komprehensif lain. Premi dan diskonto diamortisasi selama periode hingga jatuh tempo.

3) At fair value through other comprehensive income securities are measured at fair value. Unrealized gains or losses from the increase or decrease in fair value are presented in other comprehensive income. Premium and discount are amortized over the period until maturity.

Pajak Penghasilan

k.

Income Taxes

Bank menerapkan PSAK No. 46 (Revisi 2014), “Pajak Penghasilan”, yang mengharuskan Perusahaan untuk memperhitungkan konsekuensi pajak kini dan pajak masa depan atas pemulihan di masa depan (penyelesaian) dari jumlah tercatat aset (liabilitas) yang diakui dalam laporan posisi keuangan dan transaksitransaksi serta peristiwa lain yang terjadi dalam periode berjalan.

The Bank applied SFAS No. 46 (Revised 2014), “Accounting for Income Tax”, which requires the Company to account for the current and future tax consequences of the future recovery (settlement) of the carrying amount of assets (liabilities) that are recognized in the statement of financial position and transactions and other events of the current period.

Bank menerapkan metode aset dan liabilitas dalam menghitung beban pajaknya. Dengan metode ini, aset dan liabilitas pajak tangguhan diakui pada setiap tanggal pelaporan sebesar perbedaan temporer aset dan liabilitas untuk tujuan akuntansi dan tujuan pajak. Metode ini juga mengharuskan pengakuan manfaat pajak di masa akan datang, seperti kompensasi rugi fiskal, jika kemungkinan realisasi manfaat tersebut di masa mendatang cukup besar (probable). Tarif pajak yang berlaku digunakan dalam menentukan pajak penghasilan tangguhan.

The Bank adopts the asset and liability method in determining its income tax expense. Under this method, deferred tax assets and liabilities are recognized at each reporting date for temporary differences between the accounting and tax base of assets and liabilities. This method also requires the recognition of future tax benefits, such as tax loss carryforwards, to the extent that realization of such benefits is probable. Currently enacted tax rates are used in the determination of deferred income tax.

Aset dan liabilitas pajak tangguhan disajikan saling hapus di laporan posisi keuangan sesuai dengan penyajian aset dan liabilitas pajak kini.

Deferred tax asset and liability are offset in the statement of financial position in the same manner the current asset and liability are presented.

Koreksi atas liabilitas pajak diakui pada saat diterimanya surat ketetapan pajak, atau apabila diajukan keberatan dan atau banding, pada saat keputusan atas keberatan atau banding itu diterima.

Amendments to taxation obligations are recorded when an assessment is received, or if objection and or appeal is applied, when the results of the objection or appeal are determined.

29



IKHTISAR KEBIJAKAN PENTING (lanjutan) l.

AKUNTANSI


YANG


Aset Tetap

l.

ACCOUNTING

Fixed Assets

Aset tetap pada awalnya diakui sebesar biaya perolehan. Biaya perolehan mencakup harga pembelian dan semua biaya yang terkait secara langsung untuk membawa aset tersebut ke lokasi dan kondisi yang diinginkan agar aset siap digunakan sesuai dengan maksud manajemen.

Fixed assets are initially recognized at cost. Cost includes its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Setelah pengukuran awal, aset tetap diukur dengan model biaya, yaitu dicatat pada biaya perolehan dikurangi akumulasi penyusutan dan akumulasi rugi penurunan nilai.

After initial measurement, fixed assets are measured using the cost model, i.e carried at its cost less any accumulated depreciation and accumulated impairment losses.

Biaya pengurusan hak legal atas tanah ketika tanah diperoleh pertama kali diakui sebagai bagian biaya perolehan tanah dan tidak disusutkan, kecuali terdapat bukti yang mengindikasikan bahwa perpanjangan atau pembaruan hak atas tanah tersebut kemungkinan besar atau pasti tidak diperoleh. Sedangkan biaya perpanjangan atau pembaruan hak legal atas tanah diakui sebagai aset tak berwujud dan diamortisasi menggunakan metode garis lurus selama periode yang lebih pendek antara hak atas tanah atau umur ekonomis tanah.

Costs relating with acquisition of legal titles on the land rights are recognized as part of acquisition cost of land and not amortized, except there is evidence indicating that the extension or renewal of land rights is probable or certainly not be obtained. While costs of extension or renewal of legal titles on the land rights are deferred and recognized as intangible assets and amortized using the straight-line method over the legal term of the land rights or economic life of the land, whichever is shorter.

Gedung disusutkan dengan menggunakan metode garis lurus berdasarkan estimasi masa manfaat selama 20 tahun. Kecuali tanah yang tidak disusutkan, aset tetap lainnya disusutkan menggunakan metode garis lurus selama estimasi masa manfaatnya sebagai berikut:

Buildings are depreciated using straight-line method over their estimated useful lives of 20 years. Except for land which is not depreciated, other fixed assets are depreciated using straight line method) over the estimated useful lives of the assets, as follows:

Tahun/ Years Renovasi dan perbaikan gedung Perlengkapan dan perabot kantor Kendaraan bermotor Anjungan Tunai Mandiri (ATM)

3-7 4-8 4-8 8

Tarif Penyusutan/ Depreciation rate 66,67% - 28,57% 50,00% - 25,00% 50,00% - 25,00% 25,00%

Leasehold improvement Office equipment, furniture and fixtures Motor vehicles Automatic Teller Machines (ATMs)

Depreciation methods, useful lives and residual values of fixed assets are reassessed at each reporting date and adjusted as appropriate, to ensure that they reflect the expected economic benefits derived from these assets.

Metode penyusutan, masa manfaat dan nilai residu aset tetap ditelaah pada setiap tanggal pelaporan dan disesuaikan jika lebih tepat, untuk memastikan bahwa metode penyusutan, masa manfaat dan nilai residu tersebut telah mencerminkan manfaat ekonomi yang diharapkan dari aset tersebut.

30



IKHTISAR KEBIJAKAN PENTING (lanjutan) l.

AKUNTANSI


YANG


Aset Tetap (lanjutan)

l.

ACCOUNTING

Fixed Assets (continued) Normal repair and maintenance expenses are charged to profit or loss for the year; while renovation and improvements, which are significant and prolong the useful life of assets, are capitalized to the respective assets. The carrying amount and the related accumulated depreciation of fixed assets which are sold are removed from the related group of assets, and the gain or loss is recognized as non-operating income or expense in profit or loss for the year.

Beban perbaikan dan pemeliharaan dibebankan pada laba rugi tahun berjalan; sedangkan renovasi dan penambahan yang jumlahnya signifikan dan memperpanjang masa manfaat dikapitalisasi ke aset tetap yang bersangkutan. Nilai tercatat serta akumulasi penyusutan atas aset tetap yang dijual, dikeluarkan dari kelompok aset tetap yang bersangkutan, dan laba atau ruginya diakui sebagai pendapatan atau beban nonoperasional dalam laba rugi tahun berjalan. m.

m. Aset Tak Berwujud

Intangible Assets

Aset tak berwujud (perangkat lunak dan lisensi penggunaan perangkat lunak) dicatat sebesar biaya perolehan dikurangi akumulasi amortisasi dan akumulasi rugi penurunan nilai aset. Pengeluaran selanjutnya yang jumlahnya signifikan akan dikapitalisasi hanya jika pengeluaran tersebut menambah manfaat ekonomis aset yang bersangkutan di masa mendatang. Pengeluaran lainnya dibebankan pada saat terjadinya. Amortisasi diakui pada laba rugi selama estimasi masa manfaat 8 tahun dengan menggunakan metode garis lurus.

Intangible assets (software and software license) are stated at cost less accumulated amortization and accumulated impairment losses. Subsequent expenditure on intangible assets, which is significant, is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditures are expensed as incurred. Amortization is recognized in profit or loss over the estimated useful lives of 8 years using straight line method.

Metode amortisasi, masa manfaat dan nilai residu ditelaah pada setiap tanggal pelaporan dan disesuaikan jika lebih tepat, untuk memastikan bahwa metode penyusutan, masa manfaat dan nilai residu tersebut telah mencerminkan manfaat ekonomi yang diharapkan dari aset tersebut.

Amortization method, useful lives and residual values are reviewed at each reporting date and adjusted as appropriate, to ensure that they reflect the expected economic benefits derived from these assets.

n. Agunan yang Diambil Alih

n.

Foreclosed Assets

Pada saat pengakuan awal, agunan yang diambil alih sehubungan dengan penyelesaian kredit dicatat sebesar nilai wajar setelah dikurangi biaya untuk menjualnya tetapi tidak melebihi nilai tercatat kredit yang diberikan. Bank tidak mengakui keuntungan pada saat pengambilalihan aset. Setelah pengakuan awal, agunan yang diambil alih dicatat sebesar nilai yang lebih rendah antara nilai tercatat dengan nilai wajar setelah dikurangi biaya untuk menjualnya. Selisih lebih antara nilai tercatat dengan nilai wajar agunan yang diambil alih setelah dikurangi biaya untuk menjualnya diakui sebagai kerugian penurunan nilai dalam laba rugi tahun berjalan.

Foreclosed assets acquired in conjunction with settlement of loans are initially recorded at their fair value less costs to sell but not to exceed the carrying value of loans. The Bank does not recognize any gains when the Bank foreclosed an asset. Subsequent to initial recognition, foreclosed assets are recorded at carrying amount or at fair value less costs to sell, whichever is lower. The excess between the carrying value and fair value less costs to sell is recognized as impairment losses in current year profit or loss.

Agunan yang diambil alih tidak disusutkan dan beban-beban sehubungan dengan perolehan dan pemeliharaan aset tersebut dibebankan pada saat terjadinya.

Foreclosed assets are not depreciated and expenses in relation with the acquisition and maintenance of those assets are charged as incurred.

31



IKHTISAR KEBIJAKAN PENTING (lanjutan) n.

AKUNTANSI


YANG


Agunan yang Diambil Alih (lanjutan)

n.

Identifikasi dan Penurunan Nilai

Pengukuran

Foreclosed Assets (continued) The difference between the carrying value and the proceeds from the sale of foreclosed assets is recognized as gain or loss at the time of sale, and recognized in statement of profit or loss and other comprehensive income.

Selisih antara nilai tercatat dan hasil penjualan dari agunan yang diambil alih diakui sebagai laba atau rugi pada saat penjualan agunan yang diambil alih, dan diakui dalam laporan laba rugi dan penghasilan komprehensif lain. o.

ACCOUNTING

Kerugian

o.

Identification and Impairment Losses

Measurement

of

Aset keuangan

Financial assets

Pada setiap tanggal pelaporan, Bank mengevaluasi apakah terdapat bukti obyektif bahwa aset keuangan yang tidak dicatat pada nilai wajar melalui laba rugi telah mengalami penurunan nilai. Aset keuangan mengalami penurunan nilai jika bukti obyektif menunjukkan bahwa peristiwa yang merugikan telah terjadi setelah pengakuan awal aset keuangan, dan peristiwa tersebut berdampak pada arus kas masa datang atas aset keuangan yang dapat diestimasi secara handal.

At each reporting date, the Bank assesses whether there is objective evidence that financial assets not carried at fair value through profit or loss are impaired. Financial assets are impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition of the asset, and that the loss event has an impact on the future cash flows on the asset that can be estimated reliably.

Bukti obyektif bahwa aset keuangan mengalami penurunan nilai meliputi wanprestasi atau tunggakan pembayaran oleh debitur, restrukturisasi kredit atau tagihan oleh Bank dengan persyaratan yang tidak mungkin diberikan jika debitur tidak mengalami kesulitan keuangan, indikasi bahwa debitur atau penerbit akan dinyatakan pailit, hilangnya pasar aktif dari aset keuangan akibat kesulitan keuangan, atau data yang dapat diobservasi lainnya yang terkait dengan kelompok aset keuangan seperti memburuknya status pembayaran debitur atau penerbit dalam kelompok tersebut, atau kondisi ekonomi yang berkorelasi dengan wanprestasi atas aset dalam kelompok tersebut.

Objective evidence that financial assets are impaired can include default or delinquency by a borrower, restructuring of a loan or receivable by the Bank on terms that the Bank would not otherwise consider, indications that a borrower or issuer will enter bankruptcy, the disappearance of an active market for a security due to financial difficulties, or other observable data relating to a group of assets such as adverse changes in the payment status of borrowers or issuers in the group, or economic conditions that correlate with defaults in the group.

Bank menentukan bukti penurunan nilai atas Aset keuangan secara individual dan kolektif. Evaluasi penurunan nilai secara individual dilakukan terhadap Aset keuangan yang signifikan secara individual.

The Bank considers evidence of impairment for financial assets at both a specific asset and collective level. All individually significant financial assets are assessed for specific impairment.

32



IKHTISAR KEBIJAKAN PENTING (lanjutan) o.

AKUNTANSI

Identifikasi dan Pengukuran Penurunan Nilai (lanjutan)


YANG


Kerugian

o.

ACCOUNTING

Identification and Measurement Impairment Losses (continued)

of

Aset keuangan (lanjutan)

Financial assets (continued)

Kredit yang diberikan yang signifikan secara individual yang tidak mengalami penurunan nilai secara individual dievaluasi secara kolektif untuk menentukan penurunan nilai yang sudah terjadi namun belum diidentifikasi. Kredit yang diberikan yang tidak signifikan secara individual akan dievaluasi secara kolektif untuk menentukan penurunan nilainya dengan mengelompokkan aset keuangan tersebut berdasarkan karakteristik risiko yang serupa. Kredit yang diberikan yang dievaluasi secara individual untuk menentukan penurunan nilai, dan dimana kerugian penurunan nilai diakui, tidak lagi termasuk dalam evaluasi penurunan nilai secara kolektif.

Individually significant loans found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Loans that are not individually significant are collectively assessed for impairment by grouping together such financial assets with similar risk characteristics. Loans that are individually assessed for impairment and for which an impairment loss is recognized are no longer included in a collective assessment of impairment.

Semua penempatan, giro pada bank-bank lain dan efek-efek dievaluasi penurunan nilainya secara individual.

All placements, current accounts with other banks and securities are assessed for specific impairment.

Dalam mengevaluasi penurunan nilai secara kolektif, Bank menggunakan model statistik dari tren historis atas probabilitas wanprestasi, waktu pemulihan kembali dan jumlah kerugian yang terjadi, yang disesuaikan dengan pertimbangan manajemen mengenai apakah kondisi ekonomi dan kondisi kredit saat ini mungkin menyebabkan kerugian aktual lebih besar atau lebih kecil daripada jumlah yang dihasilkan oleh model statistik. Tingkat wanprestasi, tingkat kerugian dan waktu pemulihan yang diharapkan di masa datang secara berkala dibandingkan dengan hasil aktual untuk memastikan bahwa estimasi yang digunakan masih tepat.

In assessing collective impairment, the Bank uses statistical modeling of historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management’s judgment as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by statistical modeling. Default rates, loss rates and the expected timing of future recoveries are regularly benchmarked against actual outcomes to ensure that they remain appropriate.

Kerugian penurunan nilai atas aset keuangan yang dicatat pada biaya perolehan diamortisasi diukur sebesar selisih antara nilai tercatat aset keuangan dengan nilai kini estimasi arus kas masa datang yang didiskonto menggunakan suku bunga efektif awal dari aset keuangan tersebut. Perhitungan nilai kini dari estimasi arus kas masa datang atas aset keuangan dengan agunan (collateralized financial asset) mencerminkan arus kas yang dapat dihasilkan dari pengambilalihan agunan dikurangi biayabiaya untuk memperoleh dan menjual agunan, terlepas apakah pengambilalihan tersebut berpeluang terjadi atau tidak.

Impairment losses on financial assets carried at amortized cost are measured as the difference between the carrying amount of the financial assets and the present value of estimated future cash flows discounted at the financial assets’ original effective interest rate. The calculation of the present value of the estimated future cash flows of a collateralized financial asset reflects the cash flows that may result from foreclosure less costs to obtain and sell the collateral, whether or not foreclosure is probable.

33




AKUNTANSI

o. Identifikasi

dan Pengukuran Penurunan Nilai (lanjutan)


YANG

2. SUMMARY OF SIGNIFICANT POLICIES (continued) o.

Kerugian

ACCOUNTING


of

Aset keuangan (lanjutan)

Financial assets (continued)

Kerugian yang terjadi diakui pada laba rugi dan dicatat pada akun cadangan atas aset keuangan yang dicatat pada biaya perolehan diamortisasi. Pendapatan bunga atas aset keuangan yang mengalami penurunan nilai tetap diakui atas dasar suku bunga yang digunakan untuk mendiskonto arus kas masa datang dalam pengukuran kerugian penurunan nilai. Ketika peristiwa yang terjadi setelah penurunan nilai menyebabkan jumlah kerugian penurunan nilai berkurang, kerugian penurunan nilai yang sebelumnya diakui harus dipulihkan dan pemulihan tersebut diakui pada laba rugi.

Losses are recognized in profit or loss and reflected in an allowance account against financial assets carried at amortized cost. Interest on the impaired financial asset continues to be recognized using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. When a subsequent event causes the amount of impairment loss to decrease, the impairment loss is reversed through profit or loss.

Kerugian penurunan nilai atas efek-efek yang tersedia untuk dijual diakui dengan mengeluarkan kerugian kumulatif yang telah diakui secara langsung dalam pendapatan komprehensif lain ke dalam laba rugi sebagai penyesuaian reklasifikasi.

Impairment losses on available-for-sale securities are recognized by transferring the cumulative loss that has been recognized directly in other comprehensive income to profit or loss as a reclassification adjustment.

Jumlah kerugian kumulatif yang direklasifikasi dari pendapatan komprehensif lain ke laba rugi merupakan selisih antara biaya perolehan, setelah dikurangi pelunasan pokok dan amortisasi, dengan nilai wajar kini, dikurangi kerugian penurunan nilai aset keuangan yang sebelumnya telah diakui pada laba rugi. Perubahan cadangan kerugian penurunan nilai yang dapat diatribusikan pada nilai waktu (time value) tercermin sebagai komponen pendapatan bunga.

The cumulative loss that is reclassified from other comprehensive income to profit or loss is the difference between the acquisition cost, net of any principal repayment and amortization, and the current fair value, less any impairment loss previously recognized in profit or loss. Changes in impairment provisions attributable to time value are reflected as a component of interest income.

Jika, pada periode berikutnya, nilai wajar instrumen utang yang diklasifikasikan dalam kelompok tersedia untuk dijual yang mengalami penurunan nilai meningkat dan peningkatan tersebut dapat secara obyektif dihubungkan dengan peristiwa yang terjadi setelah pengakuan kerugian penurunan nilai pada laba rugi, maka kerugian penurunan nilai tersebut harus dipulihkan dan pemulihan tersebut diakui pada laba rugi.

If, in a subsequent period, the fair value of an impaired available-for-sale debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognized in profit or loss, the impairment loss is reversed, with the amount of reversal recognized in profit or loss.

Jika persyaratan kredit, piutang atau efek-efek dinegosiasi ulang atau dimodifikasi karena debitur atau penerbit mengalami kesulitan keuangan, maka penurunan nilai diukur dengan suku bunga efektif awal yang digunakan sebelum persyaratan diubah.

If the terms of a loan, receivable or securities are renegotiated or otherwise modified because of financial difficulties of the borrower or issuer, impairment is measured using the original effective interest rate before the modification of terms.

34



IKHTISAR KEBIJAKAN PENTING (lanjutan) o.

p.

AKUNTANSI

Identifikasi dan Pengukuran Penurunan Nilai (lanjutan)


YANG


Kerugian

o.

ACCOUNTING


of

Aset non-keuangan

Non-financial assets

Nilai tercatat aset non-keuangan, selain aset pajak tangguhan, ditelaah pada setiap tanggal pelaporan untuk menentukan ada tidaknya indikasi penurunan nilai. Jika terdapat indikasi adanya penurunan nilai tersebut, maka nilai terpulihkan aset diestimasi. Kerugian penurunan nilai diakui jika nilai tercatat suatu aset melebihi estimasi nilai terpulihkannya. Nilai terpulihkan suatu aset adalah nilai yang terbesar antara nilai pakai aset dan nilai wajar dikurangi biaya penjualan. Dalam penentuan nilai pakai aset, estimasi arus kas masa depan didiskontokan menggunakan tingkat diskonto sebelum pajak yang menggambarkan penilaian pasar kini atas nilai waktu dari uang dan risiko yang terkait dengan aset yang bersangkutan.

The carrying amount of the Bank's non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. An impairment loss is recognized if the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount of an asset is the greater of its value in use and its fair value less cost to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Untuk tujuan pengujian penurunan nilai, aset yang tidak dapat diuji secara individual dapat digabungkan ke dalam kelompok aset terkecil yang menghasilkan arus kas masuk dari penggunaan berkesinambungan yang sebagian besar independen dari arus kas masuk dari aset lainnya.

For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets.

Kerugian penurunan nilai atas aset nonkeuangan yang diakui pada periode sebelumnya ditelaah pada setiap tanggal pelaporan untuk menilai apakah terdapat indikasi bahwa rugi penurunan nilai yang telah diakui sebelumnya telah menurun atau tidak ada lagi. Kerugian penurunan nilai dibalik jika terdapat perubahan estimasi yang digunakan untuk menentukan nilai terpulihkan. Jumlah kerugian penurunan nilai yang dibalik tidak boleh menyebabkan nilai aset melebihi nilai tercatat neto setelah penyusutan atau amortisasi, seandainya tidak ada kerugian penurunan nilai yang diakui.

Impairment losses in respect of non-financial assets recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Simpanan dari Nasabah dan Bank-Bank Lain

p.

Deposits from Customers and Other Banks Deposits are initially measured at fair value less directly attributable transaction costs, and subsequently measured at their amortized cost using the effective interest method.

Simpanan pada awalnya diukur pada nilai wajar dikurangi biaya transaksi yang dapat diatribusikan secara langsung untuk perolehan simpanan, dan setelah pengakuan awal diukur pada biaya perolehan diamortisasi menggunakan metode suku bunga efektif.

35



2.

IKHTISAR KEBIJAKAN PENTING (lanjutan) q.

r.

AKUNTANSI


YANG


Tagihan dan Liabilitas Akseptasi

q.

ACCOUNTING

Acceptances Receivable and Payable

Dalam kegiatan bisnis biasa, Bank memberikan jaminan keuangan seperti letter of credit, bank garansi dan akseptasi.

In the ordinary course of business the Bank provides financial guarantees, consisting of letter of credit, bank guarantees and acceptances.

Setelah pengakuan awal, tagihan dan utang akseptasi dicatat pada biaya perolehan diamortiasi setelah dikurangi cadangan kerugian penurunan nilai.

After initial recognition, acceptance receivables and payables are carried at amortized cost net of allowance for impairment losses.

Imbalan Pasca-kerja

r.

Post-employment Benefits

Beban pensiun berdasarkan program dana pensiun manfaat pasti ditentukan melalui perhitungan aktuaria secara periodik dengan menggunakan metode projected-unit-credit dan menerapkan asumsi atas tingkat diskonto, hasil yang diharapkan atas aset dana pensiun dan tingkat kenaikan manfaat pasti pensiun tahunan.

Pension costs defined benefit pension plans are determined by periodic actuarial calculation using the projected-unit-credit method and applying the assumptions on discount rate, expected return on plan assets and annual rate of increase in compensation.

Seluruh pengukuran kembali, terdiri atas keuntungan dan kerugian aktuarial dan hasil atas aset dana pensiun (tidak termasuk bunga bersih) diakui langsung melalui penghasilan komprehensif lainnya dengan tujuan agar aset atau kewajiban pensiun bersih diakui dalam laporan posisi keuangan untuk mencerminkan nilai penuh dari defisit dan surplus dana pensiun. Pengukuran kembali tidak mengreklasifikasi laba atau rugi pada periode berikutnya.

All re-measurements, comprising of actuarial gains and losses, and the return of plan assets (excluding net interest) are recognized immediately through other comprehensive income in order for the net pension asset or liability recognized in the statements of financial position to reflect the full value of the plan deficit and surplus. Re-measurements are not reclassified to profit or loss in subsequent periods.

Seluruh biaya jasa lalu diakui pada saat yang lebih dulu antara ketika amandemen/kurtailmen terjadi atau ketika biaya restrukturisasi atau pemutusan hubungan kerja diakui. Sebagai akibatnya, biaya jasa lalu yang belum vested tidak lagi dapat ditangguhkan dan diakui selama periode vesting masa depan.

All past service costs are recognized at the earlier of when the amendment/curtailment occurs and when the related restructuring or termination costs are recognized. As a result, unvested past service costs can no longer be deferred and recognized over the future vesting period.

Beban bunga dan pengembalian aset dana pensiun yang diharapkan sebagaimana digunakan dalam PSAK No. 24 versi sebelumnya digantikan dengan beban bunga bersih, yang dihitung dengan menggunakan tingkat diskonto untuk mengukur kewajiban manfaat pasti - bersih atau aset pada saat awal dari tiap periode pelaporan tahunan.

The interest cost and expected return on plan assets used in the previous version of SFAS No. 24 (Revised 2013) are replaced with a net-interest amount, which is calculated by applying the discount rate to the net defined benefit liability or asset at the start of each annual reporting period.

Imbalan kerja jangka pendek

Short-term employee benefits

Imbalan kerja jangka pendek seperti upah, iuran jaminan sosial, cuti jangka pendek, bonus dan imbalan non-moneter lainnya diakui selama periode jasa diberikan. Imbalan kerja jangka pendek dihitung sebesar jumlah yang tidak didiskontokan.

Short-term employee benefits such as wages, social security contributions, short-term compensated leaves, bonuses and other nonmonetary benefits are recognized during the period when services are rendered. Short-term employee benefits are measured using undiscounted amounts.

36



IKHTISAR KEBIJAKAN PENTING (lanjutan) s.

t.

AKUNTANSI


YANG


Pinjaman Subordinasi

s.

Subordinated loans are initially recognized at fair value subsequently meansured at amortised cost using effective interest rate method.

Biaya perolehan diamortisasi dihitung dengan memperhitungkan adanya diskonto atau premi terkait dengan pengakuan awal pinjaman subordinasi dan biaya transaksi yang merupakan bagian yang tidak terpisahkan dari suku bunga efektif.

Amortised cost is calculated by taking into account and discount or premium on subordinated loan and transaction cost that are an integral part of effective interest rate.

Surat berharga yang diterbitkan

t.

Marketable Securities issued Marketable securities issued by Bank is Negotiable Certificate of Deposit (NCD). The marketable securities issued are recognized initially at fair value and subsequently measured at amortized cost using the effective interest rate method (EIR). Amortized cost is calculated by taking into account any discount or premium associated related to the initial recognitation and transaction costs that are an integral part of the effective interest rate.

Modal Saham

u.

Share Capital Shares are classified as equity when there is no contractual obligation to transfer cash or other financial assets.

Saham diklasifikasikan sebagai ekuitas jika tidak terdapat kewajiban kontraktual untuk mentransfer kas atau aset keuangan lainnya. v.

Subordinated Loan

Pinjaman subordinasi diakui sebesar nilai wajar pada awalnya dan selanjutnya diukur sebesar biaya perolehan diamortisasi dengan menggunakan suku bunga efektif.

Surat berharga yang diterbitkan Bank adalah Negotiable Certificate of Deposit (NCD). Surat berharga yang diterbitkan pada awalnya diakui sebesar nilai wajar dan selanjutnya diukur sebesar biaya perolehan diamortisasi dengan menggunakan metode suku bunga efektif (EIR). Biaya perolehan diamortisasi dihitung dengan memperhitungkan adanya diskonto atau premi terkait dengan pengakuan awal dan biaya transaksi yang tidak terpisah dari suku bunga efektif. u.

ACCOUNTING

Beban Emisi Saham

v.

Shares Issuance Costs Based on the Regulation No. VIII.G.7, appendix of Bapepam Decision Letter No. Kep06/PM/2000 dated March 13, 2000 regarding “Guidance for Financial Statements Presentation”, costs related to the public offering of shares (including pre-emptive rights issue) are deducted from the proceeds and presented as a deduction from the “Additional Paid-in-Capital - Net” account, under Equity section in the statement of financial position.

Sesuai dengan Peraturan No. VIII.G.7 lampiran Surat Keputusan Bapepam No. Kep06/PM/2000 tanggal 13 Maret 2000 mengenai “Pedoman Penyajian Laporan Keuangan”, biaya-biaya emisi efek yang terjadi sehubungan dengan penawaran saham kepada masyarakat (termasuk penerbitan hak memesan efek terlebih dahulu) dikurangkan langsung dari hasil emisi dan disajikan sebagai pengurang pada akun “Tambahan Modal Disetor - Neto”, sebagai bagian dari Ekuitas pada laporan posisi keuangan. w. Laba per Saham

w.

Earnings per Share

Laba (rugi) per saham dasar dihitung dengan membagi laba tahun berjalan dengan rata-rata tertimbang jumlah saham yang beredar selama tahun berjalan.

Basic earnings (loss) per share is computed by dividing income for the year by the weighted average number of outstanding shares during the year.

Pada tanggal 31 Desember 2016 dan 2015, tidak terdapat instrumen yang berpotensi menjadi saham biasa. Oleh karenanya, laba per saham dilusian sama dengan laba per saham dasar.

As of December 31, 2016 and 2015, there were no existing instruments which could result in the issue of further ordinary shares. Therefore, diluted earnings per share is equivalent to the basic earnings per share.

37



IKHTISAR KEBIJAKAN PENTING (lanjutan) x.

y.

AKUNTANSI


YANG


Pendapatan dan Beban Bunga

x.

ACCOUNTING

Interest Income and Expenses

Pendapatan dan beban bunga diakui dalam laba rugi menggunakan metode suku bunga efektif. Suku bunga efektif adalah suku bunga yang secara tepat mendiskontokan estimasi pembayaran dan penerimaan kas di masa datang selama perkiraan umur dari aset keuangan atau liabilitas keuangan (atau, jika lebih tepat, digunakan periode yang lebih singkat) untuk memperoleh nilai tercatat dari aset keuangan atau liabilitas keuangan. Saat menghitung suku bunga efektif, Bank mengestimasi arus kas di masa datang dengan mempertimbangkan seluruh persyaratan kontraktual dalam instrumen keuangan tersebut, tetapi tidak mempertimbangkan kerugian kredit di masa mendatang.

Interest income and expenses are recognized in profit or loss using the effective interest method. The effective interest rate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability (or, where appropriate, a shorter period) to the carrying amount of the financial asset or liability. When calculating the effective interest rate, the Bank estimates future cash flows considering all contractual terms of the financial instrument but not future credit losses.

Perhitungan suku bunga efektif mencakup biaya transaksi (Catatan 2f) dan seluruh imbalan/provisi dan bentuk lain yang dibayarkan atau diterima yang merupakan bagian tak terpisahkan dari suku bunga efektif.

The calculation of the effective interest rate includes transaction costs (Note 2f) and all fees and points paid or received that are an integral part of the effective interest rate.

Pendapatan dan beban bunga yang disajikan di dalam laporan laba rugi dan penghasilan komprehensif lain meliputi:

Interest income and expenses presented in the statement of profit or loss and other comprehensive income include:

•

Bunga atas aset keuangan dan liabilitas keuangan yang dicatat pada biaya perolehan diamortisasi yang dihitung menggunakan metode suku bunga efektif;

•

Interest on financial assets and liabilities at amortized cost calculated on an effective interest basis;

•

Bunga atas efek-efek yang tersedia untuk dijual yang dihitung menggunakan metode suku bunga efektif.

•

Interest on available-for-sale securities calculated on an effective interest basis.

Pendapatan dan Beban Provisi dan Komisi

y.

Fees and Expenses

Commission

Income

and

Pendapatan dan beban provisi dan komisi yang merupakan bagian tak terpisahkan dari suku bunga efektif aset keuangan atau liabilitas keuangan dimasukkan ke dalam perhitungan suku bunga efektif.

Fees and commission income and expenses that are integral to the effective interest rate on a financial asset or liability are included in the measurement of the effective interest rate.

Pendapatan provisi dan komisi yang diperoleh atas beragam jasa yang diberikan kepada nasabah umumnya diakui pada saat penyelesaian transaksi. Untuk jasa yang diberikan selama periode waktu tertentu atau periode risiko kredit yang diterima, provisi dan komisi diamortisasi selama periode waktu terkait.

Fees and commissions income earned from a range of services rendered to customers are normally recognized upon a completion of a transaction. For services provided over a period of time or credit risk undertaken, fees and commissions are amortized over the relevant period.

Beban provisi dan komisi lainnya terutama terkait dengan provisi atas transaksi dan jasa, yang diakui sebagai beban pada saat jasa tersebut diterima.

Other fees and commission expense relate mainly to transaction and service fees, which are expensed as the services are received.

38



IKHTISAR KEBIJAKAN PENTING (lanjutan) z.

AKUNTANSI

YANG

Instrumen

yang

Pendapatan Bersih Diperdagangkan

PT BANK QNB INDONESIA TBK NOTES TO THE FINANCIAL STATEMENTS As of December 31, 2016 and for the Year Then Ended (Expressed in millions of Rupiah, unless otherwise stated) 2. SUMMARY OF SIGNIFICANT POLICIES (continued) z.

ACCOUNTING

Net Trading Income Net trading income comprises gains less losses on trading assets, and includes all realized and unrealized fair value changes, interest and foreign exchange differences.

Pendapatan bersih instrumen yang diperdagangkan terdiri dari laba dikurangi rugi atas aset keuangan yang dimiliki untuk diperdagangkan, dan termasuk perubahan nilai wajar yang sudah ataupun yang belum direalisasi, bunga dan selisih kurs. aa. Segmen Operasi

aa. Operating Segment

Segmen operasi adalah komponen dari entitas yang terlibat dalam aktivitas bisnis yang mana memperoleh pendapatan dan menimbulkan beban, termasuk pendapatan dan beban terkait dengan transaksi dengan komponen lainnya dari entitas, yang hasil operasinya dikaji ulang secara berkala oleh pengambil keputusan operasional untuk membuat keputusan tentang sumber daya yang dialokasikan pada segmen tersebut dan menilai kinerjanya, dan tersedia informasi keuangan yang dapat dipisahkan.

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the entity’s other components, whose operating results are reviewed regularly by the chief operating decision maker to make decisions about resources allocated to the segment and assess its performance, and for which discrete financial information is available.

Karena pada saat ini Direksi Bank hanya menelaah alokasi aset keuangan tertentu di antara nasabah ritel dan wholesale, tetapi tidak untuk hasil operasi lainnya serta informasi keuangan yang dapat dipisahkan juga tidak tersedia di Bank, maka manajemen berkeyakinan bahwa Bank pada saat ini dikelola sebagai segmen operasi tunggal.

As the Bank’s Board of Directors currently only reviews the allocation of certain financial assets amongst retail and wholesale customers, but not the other operating results and the discrete financial information is also currently unavailable within the Bank, the management believes that the Bank is being managed as a single operating segment.

ab. Perubahan kebijakan pengungkapan

akuntansi

dan

ab. Changes in disclosures

accounting

policies

and

Bank telah menerapkan standar akuntansi berikut pada tanggal 1 Januari 2016 yang dianggap relevan dengan Bank:

The Bank adopted the following accounting standards, which are considered relevant, starting on January 1, 2016:

•

• Amendments to SFAS No. 1: Presentation of Financial Statements on Disclosures initiative. This amendments clarify, rather than significantly change, existing SFAS No. 1 requirements, among others, to clarify the materiality, flexibility as to the order in which they present the notes to financial statements and identification of significant accounting policies.

Amandemen PSAK No. 1: Penyajian Laporan Keuangan tentang Prakarsa Pengungkapan. Amandemen ini mengklarifikasi, bukan mengubah secara signifikan, persyaratan PSAK No. 1, antara lain, mengklasifikasi mengenai materialitas, fleksibilitas urutan sistematis catatan atas laporan keuangan dan pengidentifikasian kebijakan akuntansi signifikan.

39




AKUNTANSI

ab. Perubahan kebijakan akuntansi pengungkapan (lanjutan)


YANG


dan

ab. Changes in accounting disclosures (continued)

ACCOUNTING policies

and

•

Amandemen PSAK No. 16: Aset Tetap tentang Klarifikasi Metode yang Diterima untuk Penyusutan dan Amortisasi. Amandemen ini mengklarifikasi prinsip yang terdapat dalam PSAK No. 16 dan PSAK No. 19 Aset Tak Berwujud bahwa pendapatan mencerminkan suatu pola manfaat ekonomik yang dihasilkan dari pengoperasian usaha (yang mana aset tersebut adalah bagiannya) dari pada manfaat ekonomik dari pemakaian melalui penggunaan aset. Sebagai kesimpulan bahwa penggunaan metode penyusutan aset tetap yang berdasarkan pada pendapatan adalah tidak tepat.

•

Amendments to SFAS No. 16: Property, Plant and Equipment on Clarification of the accepted method for depreciation and amortization. The amendments clarify the principle in SFAS No. 16 and SFAS No. 19 Intangible Asset that revenue reflects a pattern of economic benefits that are generated from operating a business (of which the asset is part) rather than the economic benefits that are consumed through use of the asset. As a result, a revenue-based method connot be used to depreciate the Property, Plant and Equipment.

•

Amandemen PSAK No. 24: Imbalan Kerja tentang Program Imbalan Pasti: Iuran Pekerja. PSAK No. 24 meminta entitas untuk memperhatikan iuran dari pekerja atau pihak ketiga ketika memperhitungkan program manfaat pasti. Ketika iuran tersebut sehubungan dengan jasa, harus diatribusikan pada periode jasa sebagai imbalan negatif. Amandemen ini mengklarifikasi bahwa, jika jumlah iuran tidak bergantung pada jumlah tahun jasa, entitas diperbolehkan untuk mengakui iuran tersebut sebagai pengurang dari biaya jasa dalam periode ketika jasa terkait diberikan, daripada alokasi iuran tersebut pada periode jasa

•

Amendment to SFAS No. 24: Employee Benefits on Defined benefit plans: Employee Contributions. SFAS No. 24 requires an entity to consider contributions from employees or third parties when accounting for defined benefit plans. Where the contributions are linked to service, they should be attributed to periods of service as a negative benefit. These amendments clarify that, if the amount of the contributions is independent of the number of years of service, an entity is permitted to recognise such contributions as a reduction in the service cost in the period in which the service is rendered, instead of allocating the contributions to the periods of service.

•

PSAK No. 5 (Penyesuaian 2015): Segmen Operasi. Penyesuaian ini mengklarifikasi: -

-

•

SFAS No. 5 (2015 Improvement): Operating Segments. The improvement clarifies that: -

Entitas mengungkapkan pertimbangan yang dibuat manajemen dalam penerapan kriteria agregasi PSAK No. 5 paragraf 12 termasuk penjelasan singkat segmen operasi yang digabungkan dan karakteristik ekonomi. Pengungkapan rekonsiliasi aset segmen terhadap total aset jika rekonsiliasi dilaporkan kepada pengambil keputusan operasional, demikian juga untuk pengungkapan liabilitas segmen.

-

40

An entity must disclose the judgements made by management in applying the aggregation criteria in paragraph 12 of SFAS No. 5 including a brief description of operating segments that have been aggregated and the economic characteristics. Disclose the reconciliation of segment assets to total assets if the reconciliation is reported to the chief operating decision maker, similar to the required disclosure for segment liabilities.




AKUNTANSI

ab. Perubahan kebijakan akuntansi pengungkapan (lanjutan)


YANG


dan

ab. Changes in accounting disclosures (continued)

ACCOUNTING policies

and

•

PSAK No. 7 (Penyesuaian 2015): Pengungkapan Pihak-pihak Berelasi. Penyesuaian ini mengklarifikasi bahwa entitas manajemen (entitas yang menyediakan jasa personil manajemen kunci) adalah pihak berelasi yang dikenakan pengungkapan pihak berelasi. Dan entitas yang memakai entitas manajemen mengungkapkan biaya yang terjadi untuk jasa manajemennya.

•

SFAS No. No. 7 (2015 Improvement): Related Party Disclosures. The improvement clarifies that a management entity (an entity that provides key management personnel services) is a related party subject to the related party disclosures. In addition, an entity that uses a management entity is required to disclose the expenses incurred for management services.

•

PSAK No. 16 (Penyesuaian 2015): Aset Tetap. Penyesuaian ini mengklarifikasi bahwa dalam PSAK No. 16 dan PSAK No. 19 aset dapat direvaluasi dengan mengacu pada data pasar yang dapat diobservasi terhadap jumlah tercatat bruto ataupun neto. Dan akumulasi penyusutan atau amortisasi adalah perbedaan antara jumlah tercatat bruto dan jumlah tercatat aset tersebut. Jumlah tercatat aset tersebut disajikan kembali pada jumlah revaluasiannya.

•

SFAS No. 16 (2015 Improvement): Property, Plant and Equipment. The improvement clarifies that in SFAS No. 16 and SFAS No. 19 that the asset may be revalued by reference to observable data on either the gross or the net carrying amount. In addition, the accumulated depreciation or amortisation is the difference between the gross and carrying amounts of the asset. Carrying amounts of the asset is restated by revaluated amounts.

•

PSAK No. 19 (Penyesuaian 2015): Aset Takberwujud. Penyesuaian ini mengklarifikasi bahwa dalam PSAK No. 16 dan PSAK No. 19 aset dapat direvaluasi dengan mengacu pada data pasar yang dapat diobservasi terhadap jumlah tercatat bruto ataupun neto. Dan akumulasi penyusutan atau amortisasi adalah perbedaan antara jumlah tercatat bruto dan jumlah tercatat aset tersebut. Jumlah tercatat aset tersebut disajikan kembali pada jumlah revaluasiannya.

•

SFAS No. 19 (2015 Improvement): Intangible Assets. The improvement clarifies that in SFAS No. 16 and SFAS No. 19 that the asset may be revalued by reference to observable data on either the gross or the net carrying amount. In addition, the accumulated depreciation or amortisation is the difference between the gross and carrying amounts of the asset. Carrying amounts of the asset is restated by revaluated amounts.

•

PSAK No. 68 (Penyesuaian 2015): Pengukuran Nilai Wajar. Penyesuaian ini mengklarifikasi bahwa pengecualian portofolio dalam PSAK 68 dapat diterapkan tidak hanya kelompok aset keuangan dan liabilitas keuangan, tetapi juga diterapkan pada kontrak lain dalam ruang lingkup PSAK No. 55.

•

SFAS No. 68 (2015 Improvement): Fair value Measurement. The improvement clarifies that the portfolio exception in SFAS No. 68 can be applied not only to financial assets and financial liabilities, but also to other contracts within the scope of SFAS No. 55.

41



MANAJEMEN RISIKO MANAJEMEN MODAL a.

KEUANGAN


DAN

3.

Kerangka Manajemen Risiko

FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT a. Risk Management Framework

Manajemen risiko yang efektif merupakan landasan untuk dapat menghasilkan keuntungan secara konsisten dan berkelanjutan dan oleh karenanya, merupakan bagian yang penting dari manajemen keuangan dan operasional Bank.

Effective risk management is fundamental to being able to generate profits consistently and sustainably and is thus a central part of the financial and operational management of the Bank.

Dewan Komisaris dan Direksi Bank terus melakukan pengawasan dan mitigasi secara aktif terhadap risiko-risiko yang dihadapi Bank, serta mengembangkan budaya manajemen risiko pada seluruh jenjang organisasi untuk memastikan seluruh satuan kerja memahami strategi, tingkat risiko yang diambil, dan kerangka manajemen risiko yang telah ditetapkan. Dalam pelaksanaanya, Dewan Komisaris diwakilkan oleh Komite Pemantau Risiko yang merupakan komite risiko tertinggi di tingkat Dewan Komisaris yang bertanggung jawab untuk melakukan penelaahan terhadap area risiko tertentu dan mendiskusikan hal lainnya terkait dengan permasalahan risiko, mekanisme mitigasi serta potensi kerugiannya.

The Board of Commissioners and the Board of Directors of the Bank actively supervise and mitigate the risks faced by the Bank, as well as develop a risk management culture at all levels of the organization to ensure that all working units understand the strategy, the level of risks taken, and the Bank’s risk management framework. In the implementation, Board of Commissioners is represented by Risk Oversight Committee which is highest risk committee in the level of the Board of Commissioners which responsible in review on certain risk areas and analyses other areas related to risk, its mitigating controls and as well as potential loss.

Dewan Komisaris mendelegasikan kuasa kepada Direktur Utama dan Direksi untuk mengimplementasikan strategi manajemen risiko.

Board of Commissioners delegate authority to President Director and Board of Directors to implement risk management strategy.

Untuk mendukung penerapan manajemen risiko yang efektif, Direksi membentuk komitekomite yang membantu kelancaran dan tata kelola perusahaan yang sehat dalam lingkup organisasi:

To support the implementation of effective risk management, Board of Directors formed committees, which help smooth and good corporate governance in the scope of the organization:

1. 2. 3. 4. 5. 6. 7.

1. 2. 3. 4. 5. 6. 7.

Komite Manajemen Risiko Komite Aset dan Liabilitas (“ALCO”) Komite Sumber Daya Manusia Komite Pengadaan Barang dan Jasa Komite Kredit Komite Produk dan Aktivitas Baru, dan IT Steering Committee

Komite Manajemen Risiko dibentuk pada tingkat Direksi dan bertanggung jawab untuk mengawasi perkembangan strategi dan kebijakan manajemen risiko sehari-hari. Komite ini diketuai oleh Direktur Risiko.

Risk Management Committee Asset and Liability Committee (“ALCO”) Human Resources Committee Procurement Committee Credit Committee Products and New Activities Committee, and IT Steering Committee

The Risk Management Committee is established by Board of Directors and is responsible to oversee the day to day risk management strategy and policy development. The Committee is chaired by Risk Director.

42



MANAJEMEN RISIKO KEUANGAN MANAJEMEN MODAL (lanjutan) a.


DAN

3.

Kerangka Manajemen Risiko (lanjutan)

FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT (continued) a. Risk Management Framework (continued)

Esensi dari penerapan manajemen risiko adalah kecukupan prosedur dan metodologi pengelolaan risiko sehingga kegiatan usaha Bank tetap dapat terkendali (manageable) pada batas/limit yang dapat diterima serta menguntungkan. Penerapan manajemen risiko meliputi pengawasan aktif Pengurus Bank, kebijakan, prosedur dan penetapan limit risiko, proses identifikasi, pengukuran, pemantauan, sistem informasi, dan pengendalian risiko, serta pengendalian internal. Penerapan manajemen ini tertuang dalam suatu Risk Management Framework (RMF). RMF menetapkan pendekatan Bank terhadap manajemen risiko dan kerangka pengendalian dimana risiko dikelola dan keseimbangan antara risiko dan pendapatan dapat tercapai.

The essence of risk management application is the adequacy of risk management procedures and methodologies so that the business activities of Bank are manageable at the acceptable limits and able to generate profitability. Application of risk management includes active monitoring of Bank’s Management, policies, procedures and risk limits, the process of risk identification, measurement, monitoring, information system, and control, as well as internal control. Application of risk management is stated in a Risk Management Framework (RMF). RMF sets out the Bank’s approach to risk management and the control framework within which risks are managed and risk-return tradeoffs are made.

Secara umum RMF terdiri atas serangkaian proses sebagai berikut:

In general, RMF consists of the following processes:

Proses Identifikasi Risiko

Risk Identification Process

Kegiatan identifikasi risiko merupakan langkah awal dari serangkaian kegiatan pengelolaan dan pengendalian risiko. Kegiatan identifikasi risiko merupakan kegiatan yang bersifat proaktif dan bukan reaktif dalam hal memetakan profil risiko terhadap seluruh kegiatan operasional Bank.

The identification of risk is the first step of a series of management and risk control activities. Risk identification activity is a proactive and not reactive activity in terms of mapping the risk profile of the entire operations of the Bank.

Proses Pengukuran Risiko

Risk Measurement Process

Kegiatan pengukuran risiko merupakan bagian dari kegiatan penerapan manajemen risiko yang dimaksudkan untuk mengukur profil risiko yang dimiliki oleh Bank sehingga diperoleh suatu gambaran tentang efektifitas penerapan manajemen risiko melalui suatu pendekatan tertentu.

Risk measurement activity is part of risk management implementation activities that are intended to measure the risk profile of Bank in order to obtain a description of the effectiveness of risk management through the application of a particular approach.

Proses Pemantauan Pengendalian Risiko

Proses

Risk Monitoring Process and Risk Control Process

Bank menerapkan prinsip Pendekatan Pertahanan Tiga Lapis dalam memantau, mengontrol, dan mengelola risiko:

Bank has implemented the principle of Three Lines of Defense Approach in monitoring, controlling, and managing risks:

-

- First Line of Defense

Risiko

dan

Pertahanan Tingkat Pertama Unit Bisnis berperan sebagai pertahanan tingkat pertama dan bertanggung jawab untuk mengidentifikasi, mengevaluasi, mengendalikan dan memitigasi risiko dalam bisnis. Manajemen Senior dan Komite Manajemen Risiko memegang peranan penting dalam memastikan unit bisnis secara keseluruhan berfungsi efektif sebagai “Pertahanan Tingkat Pertama” untuk membangun sebuah risk and control environment sebagai bagian dari kegiatan operasional sehari-hari.

Business unit serves as the first line of defense and is responsible to identify, evaluate, control, and mitigate risks in business. Senior Managements and the Risk Management Committee play an important role in ensuring the overall business unit effectively functions as “First Line of Defense” to establish a risk and control environment as part of day-to-day operations.

43


PT BANK QNB INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN Tanggal 31 Desember 2016 dan untuk Tahun yang Berakhir pada Tanggal Tersebut (Disajikan dalam jutaan Rupiah, kecuali dinyatakan lain) 3. MANAJEMEN RISIKO KEUANGAN MANAJEMEN MODAL (lanjutan) a.


DAN

3.

Kerangka Manajemen Risiko (lanjutan) Proses Pemantauan Risiko Pengendalian Risiko (lanjutan)

dan

FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT (continued) a. Risk Management Framework (continued)

Proses

Risk Monitoring Process and Risk Control Process (continued)

Bank menerapkan prinsip Pendekatan Pertahanan Tiga Lapis dalam memantau, mengontrol, dan mengelola risiko: (lanjutan)

Bank has implemented the principle of Three Lines of Defense Approach in monitoring, controlling, and managing risks: (continued)

-

- Second Line of Defense

Pertahanan Tingkat Kedua Divisi Manajemen Risiko dan Divisi Kepatuhan yang independen berperan sebagai unit kunci dalam memberikan pertahanan tingkat kedua melalui fungsi pemantauan yang independen. Secara garis besar, pertahanan tingkat kedua bertanggung jawab untuk menetapkan batas-batas (boundaries), pedoman dan arahan melalui pengembangan kebijakan, kaji ulang dan persetujuan limit risiko, serta memastikan kepatuhan terhadap seluruh peraturan yang diterbikan oleh Bank Indonesia dan otoritas lainnya.

-

The independent Risk Management Division and Compliance Division serve as key units in constructing second layer protection through independent monitoring function. In general, the second line of defense is responsible for setting the boundaries, guidance and directions through development of policies, review and approval of risk limits, as well as ensuring the compliance with all regulations of Bank Indonesia and other authorities.

Pertahanan Tingkat Ketiga

- Third Line of Defense

Satuan Kerja Audit Internal berperan sebagai pertahanan tingkat ketiga yang berperan untuk memberikan kegiatan assurance dan konsultasi yang independen dan yang dirancang untuk menambah nilai dan memperbaiki operasional bank serta membantu bank dalam mencapai tujuannya.

Internal Audit serves as the third line of defense which role is to provide independent and objective assurance and consulting activities designed to add value and improve the bank operational process as well as help the bank to accomplish its objectives.

Pedoman dalam penerapan RMF tersebut dituangkan ke dalam suatu Risk Appetite Statement (RAS). RAS menguraikan tingkat dan karakterisik risiko yang akan diambil Bank, agar dapat merealisasikan misinya untuk para pemangku kepentingan, dengan memperhatikan batasan-batasan yang dikenakan oleh para debitur, regulator dan nasabah. Direksi dan manajemen senior bertanggung jawab mendefinisikan RAS serta memastikan bahwa kerangka manajemen risiko telah mencakup kebijakan yang rinci terkait batasan bagi seluruh organisasi terhadap kegiatan bank, yang konsisten dengan RAS dan kapasitas Bank.

Guideline for the application of RMF is stated in a Risk Appetite Statement (RAS). RAS elaborates level and characteristics of risks taken by the Bank in order to realize its mission for the stakeholders while referring to the limitations set by debtors, regulators, and customers. The Board of Directors and senior management are responsible to define RAS while ensuring that risk management framework has included detail policies pertaining to limitations for all organization toward the Bank’s activities, which are consistent with RAS and the capability of Bank.

44


PT BANK QNB INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN Tanggal 31 Desember 2016 dan untuk Tahun yang Berakhir pada Tanggal Tersebut (Disajikan dalam jutaan Rupiah, kecuali dinyatakan lain) 3. MANAJEMEN RISIKO KEUANGAN MANAJEMEN MODAL (lanjutan) a.


DAN

3.

Kerangka Manajemen Risiko (lanjutan)

a.

Risk Management Framework (continued) The purpose of the Risk Appetite Statement is to support Bank to implement its strategy and fulfill the expectations of the shareholders. RAS does not aim to prevent risk-taking, but rather to ensure that the process of risk taking is:

Tujuan dari Risk Appetite Statement adalah agar Bank dapat melaksanakan strateginya serta memenuhi harapan para pemangku kepentingan. RAS tidak bertujuan mencegah pengambilan risiko, melainkan memastikan bahwa proses pengambilan risiko: a. Sejalan dengan sasaran; b. Dipahami di tingkat yang sesuai di dalam organisasi; dan c. Dilaksanakan secara optimum berdasarkan keseimbangan risiko imbal balik dalam batasan-batasan Risk Appetite Group. b.

FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT (continued)

a. In line with the objectives; b. Comprehended at the appropriate level in the organization; and c. Implementation of optimum risk return basis within the Group Risk Appetite limits.

Risiko Kredit

b. Credit Risk

Risiko Kredit adalah risiko akibat kegagalan piak lain dalam memenuhi kewajiban kepada Bank, termasuk Risiko Kredit akibat kegagalan debitur, Risiko konsentrasi kredit, counterparty credit risk, dan settlement risk. Manajemen risiko kredit bertujuan untuk memastikan bahwa kredit diberikan berdasarkan prinsip pemberian kredit yang sehat.

Credit Risk is the risk arising from the failure of counterparties to fulfill its obligations, including credit risk due to falure of the debtor, credit concentration risk, counterparty credit risk, and settlement risk. Credit risk management is to ensure that the credit is granted based on the principles of sound lending.

Beberapa prinsip utama dalam manajemen risiko kredit yang ditetapkan Bank antara lain:

Some key principles in the management of credit risk applied by the Bank are as follows:

•

Dewan Komisaris dan Direksi bertanggung jawab atas efektivitas penerapan manajemen risiko kredit;

•

•

Melakukan pemberdayaan unit-unit kerja independen untuk melakukan pengendalian intern atas unit-unit kerja yang terkait dengan proses pemberian kredit; Melakukan perbaikan kualitas aset produktif, penyebaran risiko portofolio kredit dengan memastikan diversifikasi portofolio kredit di sektor-sektor industri maupun segmen pasar; Melakukan restrukturisasi dan penyelesaian agunan yang diambil alih; Melakukan pengawasan harian terhadap tunggakan kredit, baik di atas maupun di bawah 30 hari untuk mengantisipasi terjadinya kredit bermasalah, memonitor dan memberikan peringatan dini (early warning) atas potensi kerugian yang disebabkan penurunan kolektibilitas kredit; Melakukan identifikasi risiko yang terdapat pada produk dan aktivitas baru; Menerapkan sistem scoring untuk retail banking dan interbank counterparty; Proses persetujuan kredit dilakukan secara sentralisasi di Kantor Pusat melalui pertemuan Komite Kredit untuk kredit yang bernilai besar.

•

• •

• • •

•

•

Improve the quality of productive assets, credit portfolio risk distribution by ensuring diversified loan portfolio in industry sectors and market segments;

•

Conduct restructuring and/or settlement of foreclosed assets; Conduct daily monitoring of credit arrears, both above and below 30 days to anticipate the non-performing loans, monitor and provide early warning of potential losses due to a deterioration in loan collectability;

•

• • •

45

Board of Commissioners and Board of Directors are responsible for the effective implementation of credit risk management; Empower independent work units to perform internal control over the work units associated with the process of granting credit;

Identify the risks inherent in new products and activities; Apply scoring system for retail banking and interbank counterparty; Loan approval process is done on a centralized basis at the Head Office through Credit Committee meeting for big account loans.


PT BANK QNB INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN Tanggal 31 Desember 2016 dan untuk Tahun yang Berakhir pada Tanggal Tersebut (Disajikan dalam jutaan Rupiah, kecuali dinyatakan lain) 3. MANAJEMEN RISIKO KEUANGAN MANAJEMEN MODAL (lanjutan) b.


DAN

3.

Risiko Kredit (lanjutan)

FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT (continued) b. Credit Risk (continued) To control and sustain minimal exposure of credit risk to the Bank resulting from its loans:

Untuk mengendalikan dan memelihara eksposur risiko kredit pada tingkat minimal yang berasal dari kredit yang diberikan: •

Bank telah memiliki prinsip-prinsip dasar risiko kredit, yang berguna sebagai acuan dasar dalam menjalankan fungsi Manajemen Risiko Kredit yang tidak boleh dilanggar;

•

The Bank has a Credit Risk Principles, which is used as a basic reference in performing Credit Risk Management function which cannot be violated;

•

Bank telah memiliki pedoman tertulis mengenai kebijakan dan prosedur kredit yang mencakup seluruh aspek aktivitas pemberian kredit. Setiap pemberian kredit harus senantiasa mengacu pada kebijakan tersebut;

•

The Bank has a documented credit policy and procedures manual that covers all aspects of the Bank’s lending activities. At all times, loan transactions must adhere to the requirements of the Bank’s policy;

•

Bank telah memiliki sistem deteksi dini permasalahan melalui ”early warning system” dan pemantauan yang ketat; dan

•

The Bank has early problem detection system through “early warning system” and disciplined monitoring; and

•

Seluruh kredit yang diberikan dijamin dengan agunan, kecuali untuk jenis kredit tertentu seperti kredit korporasi berkualitas tinggi, kredit perorangan dan fasilitas antar bank.

•

All loans are secured by collateral, except for certain loans such as high quality corporate loans, personal loans and interbank loans.

Untuk mengantisipasi adanya risiko kredit yang melekat pada kegiatan usaha debitur, Bank perlu menelaah kualitas kredit calon debitur dan debitur lama, serta menerapkan peraturan dan kebijakan Bank mengenai Credit Acceptance Criteria, yang mengatur persyaratan minimum yang diperlukan, yang mencakup aspek pemilik, manajemen, industri, kinerja keuangan, dokumentasi dan administrasi dan agunan.

To anticipate the inherent credit risk in debtors’ business activities, the Bank needs to review the credit quality of new debtors and existing debtors, and implements the Bank’s regulation and policy on Credit Acceptance Criteria, which describes minimum requirements covering owner, management, industry, financial performance, administration and documentation and collateral aspects.

Agar penerapan fungsi manajemen risiko kredit sejalan dengan risk appetite yang telah ditetapkan, Direksi membentuk Komite Kredit yang memiliki fungsi dan tanggung jawab sebagai berikut:

In order for the implementation of credit risk management function in line with the risk appetite set by the Bank, Board of Directors established Credit Committee which functions and responsibilities are as follows:

1.

Memberikan persetujuan atau penolakan kredit sesuai dengan batas wewenang/jenis kredit yang ditetapkan oleh Direksi dan mengkaji ulang permohonan kredit yang melebihi limit yang telah ditetapkan;

1.

Giving approval or rejection of credit in accordance with the authority/type of credit established by the Board of Directors and reviewing the loan application that exceeds a preset limit;

2.

Menolak permintaan dan/atau pengaruh pihak-pihak yang berkepentingan dengan pemohon kredit untuk memberikan persetujuan kredit yang hanya bersifat formalitas;

2.

Rejecting the request and/or influence of the related parties with the credit applicants, to give credit approval for formality only;

46




DAN

3.


FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT (continued) b.

Credit Risk (continued)

Agar penerapan fungsi manajemen risiko kredit sejalan dengan risk appetite yang telah ditetapkan, Direksi membentuk Komite Kredit yang memiliki fungsi dan tanggung jawab sebagai berikut: (lanjutan)

In order for the implementation of credit risk management function in line with the risk appetite set by the Bank, Board of Directors established Credit Committee which functions and responsibilities are as follows: (continued)

3.

Mengembangkan kebijakan pinjaman dan menyerahkan kepada Komite Manajemen Risiko untuk memperoleh persetujuan;

3.

Developing lending policies and submit to the Risk Management Committee for approval;

4.

Bertindak sebagai penasehat, bila diperlukan, sehubungan dengan hal-hal perkreditan yang kompleks;

4.

Acting as advisor, if necessary, in relation to complex credit issues;

5.

Memantau pelaksanaan kebijakan kredit;

5.

Monitoring the implementation of credit policy;

6.

Mengevaluasi/menilai kinerja dari unit kerja yang mengajukan dan menelaah kredit;

6.

Evaluating/assessing the performance of the units that proposed and reviewed credit;

7.

Melakukan koordinasi dengan Komite Aset dan Liabilitas (ALCO) dalam aspek pendanaan kredit.

7.

Coordinating with Assets and Liabilities Committee (ALCO) for financing of credit.

Pengendalian Batas Risiko dan Kebijakan Mitigasi

Risk Limit Control and Mitigation Policies

Limit pemberian kredit ditelaah mengikuti perubahan kondisi pasar dan ekonomi, dan penelaahan kredit secara periodik, serta penilaian atas kemungkinan wanprestasi.

Lending limits are reviewed in the light of changing market and economic conditions and periodic credit reviews and assessments of probability of default.

Bank menerapkan kebijakan untuk memitigasi risiko kredit dengan mengharuskan adanya agunan sebagai jaminan pelunasan kredit jika sumber pembayaran utama debitur melalui arus kas tidak terpenuhi.

The Bank implements policies to mitigate credit risk by requiring collateral to secure the repayment of loan if the main source of debtor’s payment through cash flows is not fulfilled.

Eksposur maksimum risiko kredit

Maximum exposure to credit risk

Untuk aset keuangan yang diakui di laporan posisi keuangan, eksposur maksimum terhadap risiko kredit sama dengan nilai tercatatnya. Untuk bank garansi dan irrevocable L/C yang diterbitkan, eksposur maksimum terhadap risiko kredit adalah nilai yang harus dibayarkan oleh Bank jika kewajiban atas bank garansi dan irrevocable L/C yang diterbitkan terjadi.

For financial assets recognized in the financial statement, the maximum exposure to credit risk is equal to their carrying amount. For bank guarantees and irrevocable L/C issued, the maximum exposure to credit risk is the maximum amount that the Bank would have to pay if the obligations on the bank guarantees and irrevocable L/C issued are called upon.

47


PT BANK QNB INDONESIA TBK CATATAN ATAS LAPORAN KEUANGAN Tanggal 31 Desember 2016 dan untuk Tahun yang Berakhir pada Tanggal Tersebut (Disajikan dalam jutaan Rupiah, kecuali dinyatakan lain) 3. MANAJEMEN RISIKO KEUANGAN MANAJEMEN MODAL (lanjutan)


DAN

3.

b. Risiko Kredit (lanjutan)

FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT (continued) b. Credit Risk (continued) The following table presents the Bank’s maximum exposure to credit risk of financial instruments in the statement of financial position and off-balance sheet accounts, without taking into account any collateral held or other credit enhancement;

Tabel berikut menyajikan eksposur maksimum Bank terhadap risiko kredit untuk instrumen keuangan pada laporan posisi keuangan dan rekening administratif, tanpa memperhitungkan agunan yang dimiliki atau perlindungan kredit lainnya;

31 Desember/December 31 2016 Instrumen keuangan pada laporan posisi keuangan: Giro pada Bank Indonesia Giro pada bank-bank lain Penempatan pada Bank Indonesia dan bank-bank lain Tagihan derivatif Tagihan akseptasi Efek-efek yang dibeli dengan janji dijual kembali Kredit yang diberikan Efek-efek Aset lain-lain

2015

1.635.116 80.815

1.710.947 31.146

2.230.074 550 22.193

2.113.813 2.921 61.821

471.350 17.551.188 571.862 156.267

269.117 20.788.304 325.444 127.018

Rekening administratif: L/C yang tidak dapat dibatalkan yang masih beredar Bank garansi yang diterbitkan

Off-balance sheet accounts:

Total

37.015 15.632

25.357 25.320

22.772.062

25.481.208

Tabel di bawah ini menunjukkan net maximum exposure (setelah memperhitungkan agunan) atas risiko kredit untuk efek-efek yang dibeli dengan janji dijual kembali pada tanggal 31 Desember 2016 dan 2015: Eksposur maksimum/ Maximum exposure 2016 Efek-efek yang dibeli dengan janji dijual kembali 2015 Efek-efek yang dibeli dengan janji dijual kembali

Financial instruments in the statement of financial position: Current accounts with Bank Indonesia Current accounts with other banks Placements with Bank Indonesia and other banks Derivatives receivable Acceptance receivable Securities purchased under agreement to resell Loans Securities Other Assets

471.350

269.117

Outstanding irrevocable L/C Bank guarantees issued Total

The table below shows the net maximum exposure (after considering collateral) to credit risk of securities purchase under agreement to resell as of December 31, 2016 and 2015: Agunan/ Collateral

Eksposur - neto/ Net exposure

472.599

270.457

-

2016 Securities purchased under agreement to resell

-

2015 Securities purchased under agreement to resell

For the loans and receivables, Bank uses the collateral to minimize the credit risk. Loans and receivables in Bank are classified into two major category:

Untuk kredit yang diberikan, Bank menggunakan agunan untuk meminimalkan risiko kredit. Berdasarkan klasifikasi, kredit Bank dapat dibedakan menjadi dua kelompok besar, yaitu: 1. Secured loans 2. Unsecured loans

1. 2.

48

Secured loans Unsecured loans




DAN

3.




Untuk Secured loans, Bank menetapkan jenis dan nilai agunan yang dijaminkan sesuai skema kredit. Jenis dari agunan terdiri dari: a. Physical collateral, antara lain tanah, bangunan dan BPKB kendaraan motor. b. Financial collateral, antara lain simpanan (tabungan, giro dan deposito berjangka), surat berharga dan emas. c. Lainnya antara lain garansi dan lembaga penjamin.

For secured loans, Bank determined the type and value of collateral according to the loan scheme. Types of collateral are as follows : a. Physical collateral, such as land, buildings and proof of vehicle ownership. b. Financial collateral, such as time deposit, savings, current accounts, securities, and gold. c. Others, such as guarantees, government guarantees and guarantee institution.

Apabila terjadi default (gagal bayar), Bank akan menggunakan agunan tersebut sebagai pilihan terakhir untuk pemenuhan kewajiban counterparty.

In times of default, Bank will use the collateral as the last resort in recovering its investment.

Unsecured loans terdiri dari fully unsecured loans dan partially secured loans seperti kredit untuk karyawan golongan berpenghasilan tetap dan kredit konsumer lainnya. Dalam pembayaran kewajibannya, partially secured loans umumnya dilakukan melalui pemotongan penghasilan secara otomatis.

Unsecured loans consist of fully unsecured loans and partially secured loans such as loans for fixed income employees, and other consumer loans. In their payment obligations, partially secured loans are generally made through automatic payroll deduction.

Dengan demikian, meskipun kredit tersebut termasuk dalam kategori unsecured loans namun tingkat risiko dari partially secured loans tidak sebesar nilai tercatat kredit. Sedangkan untuk fully unsecured loans, tingkat risiko adalah sebesar nilai tercatat kredit.

Although it is included in the unsecured loans category, the risk level of partially secured loans is lower than the carrying value. As for fully unsecured loan, the risk level is equal to the carrying value.

Proses penentuan peringkat kredit Bank membedakan eksposur untuk menentukan eksposur mana yang memiliki faktor risiko lebih besar dan tingkat kerugian potensial yang lebih tinggi. Peringkat kredit setiap debitur ditelaah secara berkala dan perubahannya diimplementasikan secepatnya Peringkat kredit yang diterapkan atas setiap debitur juga mempertimbangkan kualitas kredit dari debitur tersebut yang telah ditentukan oleh bank-bank lain.

The Bank’s credit rating determination processes differentiate exposures in order to highlight those with greater risk factors and higher potential severity of loss. The credit rating for each debtor is reviewed regularly and any amendments are implemented promptly. The credit rating applied for each debtor also considered credit quality of the respective debtor as determined by other banks.

Peringkat kredit Bank sesuai dengan peringkat kredit dari Bank Indonesia sebagaimana diatur dalam peraturan Bank Indonesia yang berlaku.

The Bank’s credit rating follows Bank Indonesia’s credit rating as stipulated in the prevailing Bank Indonesia regulations.

49




DAN

3.



Credit Risk (continued) Distribution of financial assets by their credit quality is summarised as below:

Pembagian aset keuangan berdasarkan kualitas kreditnya disajikan di bawah ini:

31 Desember/December 31, 2016 Belum jatuh tempo dan tidak mengalami penurunan nilai/ Neither past due nor impaired

Jatuh tempo dan tidak mengalami penurunan nilai/ Past due and not impaired

Cadangan kerugian penurunan nilai/ Allowance for impairment losses

1.635.116

-

-

-

1.635.116

80.815

-

-

-

80.815

2.230.074 22.193

-

-

-

2.230.074 22.193

Placement with Bank Indonesia and other banks Acceptances receivable

471.350 13.855.371 324.355 103.237

3.178.797 53.030

1.253.746 -

471.350 17.551.188 324.355 156.267

Securities purchased under agreement to resell Loans Securities Other assets

247.506

-

-

-

247.506

Available for sales assets Securities

550

-

-

-

550

Assets at fair value through profit or loss Derivative receivables

18.970.567

3.231.827

1.253.746

Mengalami penurunan nilai /Impaired

Total

Aset pada biaya perolehan diamortisasi Giro pada Bank Indonesia Giro pada bank-bank lain Penempatan pada Bank Indonesia dan bankbank lain Tagihan akseptasi Efek-efek yang dibeli dengan janji dijual kembali Kredit yang diberikan Efek-efek Aset lain-lain Aset tersedia untuk dijual Efek-efek Aset pada nilai wajar melalui laba rugi Tagihan derivatif

-

(736.726) -

(736.726)

Assets at amortized cost Current account with Bank Indonesia Current account with other banks

22.719.414

31 Desember/December 31, 2015 Belum jatuh tempo dan tidak mengalami penurunan nilai/ Neither past due nor impaired

Jatuh tempo dan tidak mengalami penurunan nilai/ Past due and not impaired


1.710.947

-

-

31.146

-

-

-

31.146

2.111.813 61.821

-

-

-

2.111.813 61.821

Placement with Bank Indonesia and other banks Acceptances receivable

269.117 18.650.912 325.444 127.018

1.640.025 31.160

539.107 -

269.117 20.788.304 325.444 158.178

Securities purchased under agreement to resell Loans Securities Other assets

Mengalami penurunan nilai /Impaired

Total

Aset pada biaya perolehan diamortisasi Giro pada Bank Indonesia Giro pada bank-bank lain Penempatan pada Bank Indonesia dan bankbank lain Tagihan akseptasi Efek-efek yang dibeli dengan janji dijual kembali Kredit yang diberikan Efek-efek Aset lain-lain Aset pada nilai wajar melalui laba rugi Tagihan derivatif

2.921

-

-

23.291.139

1.671.185

539.107

50

-

(41.740) -

(41.740)

1.710.947

2.921 25.459.691

Assets at amortized cost Current account with Bank Indonesia Current account with other banks

Assets at fair value through profit or loss Derivative receivables




DAN

3.



Credit Risk (continued) The aging analysis of past due but not impaired loans as of December 31, 2016 and 2015, are as follows:

Analisis umur pinjaman yang jatuh tempo tetapi tidak mengalami penurunan nilai pada tanggal 31 Desember 2016 dan 2015, sebagai berikut: 31 Desember/ December 31, 2016 1 sampai 30 hari/ 1 to 30 days

31 sampai 60 hari/ 31 to 60 days


Total

Modal kerja Investasi Konsumen

335.742 1.796.897 72.197

270.806 222.869 12.500

223.114 241.987 2.685

829.662 2.261.753 87.383

Total Cadangan kerugian penurunan nilai

2.204.836

506.175

467.786

3.178.797

Total

(1.729)

Allowance for impairment losses

Neto

2.203.887

3.177.068

Net

(949 )

(228)

(552)

505.947

467.234

Working capital Investment Consumer

31 Desember/December 31, 2015 1 sampai 30 hari/ 1 to 30 days



Total

Modal kerja Investasi Konsumen Karyawan

178.780 52 9

15.832 2.713 33 6

442.155 959.354 41.044 47

636.767 962.067 41.129 62

Total Cadangan kerugian penurunan nilai

178.841

18.584

1.442.600

1.640.025

Total

(549)

Allowance for impairment losses

Neto

178.782

1.639.476

Net

(59 )

(11)

(479)

18.573

1.442.121

Working capital Investment Consumer Employee

The Bank assesses impairment of financial assets on an individual and collective basis. The individual impairment related to individually significant exposures, while collective impairment related to groups of homogeneous financial assets in respect of losses that have been incurred but have not been identified on assets that are considered individually insignificant as well as individually significant exposures that were subject to individual assessment for impairment but not found to be individually impaired.

Bank mengevaluasi penurunan nilai aset keuangan secara individual dan kolektif. Penurunan nilai secara individual terkait dengan eksposur yang secara individual signifikan, sedangkan penurunan nilai kolektif terkait kelompok aset keuangan yang sejenis dimana kerugian telah terjadi namun belum dapat diidentifikasi atas aset yang secara individual tidak signifikan dan eksposur yang secara individual signifikan yang telah dievaluasi penurunan nilainya secara individual namun tidak ditemukan adanya penurunan nilai secara individual.

51




DAN

3.




Definisi kualitas kredit debitur dalam menentukan peringkat kredit sesuai dengan kualitas kredit yang diatur dalam Peraturan Bank Indonesia No.14/15/PBI/2012 tanggal 24 Oktober 2012 tentang “Penilaian Kualitas Aset Bank Umum” sebagai berikut:

The definition of the debtor’s credit quality in determining credit rating is in accordance with credit quality stipulated in the prevailing Bank Indonesia Regulation No.14/15/PBI/2012 dated 24 October 2012 about “Assessment of Commercial Banks’ Asset Quality”, as follows:

•

Lancar: eksposur menunjukkan laba yang tinggi atau stabil, modal dan likuiditas yang memadai, secara umum tercermin dari pembayaran komitmen terhadap Bank dan kreditur lainnya secara tepat waktu. Sumber pembayaran dapat diidentifikasikan secara jelas dan Bank tidak bergantung pada jaminan untuk penyelesaian komitmen debitur di masa datang.

•

Current: exposures exhibit high or stable earnings, adequate capital and liquidity, as generally evidenced by prompt repayment of its commitment with the Bank and other creditors. Source of payment can be clearly identifiable and the Bank does not rely on collateral for settlement of the debtor’s future commitments.

•

Dalam perhatian khusus: eksposur memerlukan tingkat pemantauan yang bervariasi dan risiko wanprestasi menjadi perhatian.

•

Special mention: exposures require varying degrees of special attention and default risk is of concern.

•

Kurang lancar: eksposur dimana nasabah dalam tahap keterlambatan pembayaran dan telah gagal untuk melakukan pembayaran kewajiban yang lewat jatuh tempo 91 hari sampai dengan 120 hari, sesuai dengan persyaratan kontraktual dalam perjanjian kredit.

•

Substandard: exposures which the debtor is in the stages of delinquency and has failed to make a payment on overdue accounts for 91 days up to 120 days, in accordance with the contractual terms of the loan agreement.

•

Diragukan: eksposur dimana nasabah dalam tahap keterlambatan pembayaran dan telah gagal untuk melakukan pembayaran kewajiban yang lewat jatuh tempo 121 hari sampai dengan 180 hari, sesuai dengan persyaratan kontraktual dalam perjanjian kredit.

•

Doubtful: exposures which the debtor is in the stages of delinquency and has failed to make a payment on overdue accounts for 121 days up to 180 days, in accordance with the contractual terms of the loan agreement.

•

Macet: eksposur dimana nasabah dalam tahap keterlambatan pembayaran dan telah gagal untuk melakukan pembayaran kewajiban yang lewat jatuh tempo lebih dari 180 hari, sesuai dengan persyaratan kontraktual dalam perjanjian kredit.

•

Loss: exposures which the debtor is in the stages of delinquency and has failed to make a payment on overdue accounts for more than 180 days, in accordance with the contractual terms of the loan agreement.

In compliance with Bank Indonesia (OJK), Bank implements Regulation of the Financial Services Authority (POJK) No.11/POJK.03/2015 dated 21 August 2015 on "Prudential Provisions in relation to the National Economic Stimulus for Commercial Banks" which is valid until August 21, 2017.

Sehubungan dengan kepatuhan terhadap Bank Indonesia (OJK), Bank menerapkan Peraturan Otoritas Jasa Keuangan (POJK) No.11/POJK.03/2015 tanggal 21 Agustus 2015 tentang ”Ketentuan Kehati-hatian dalam Rangka Stimulus Perekonomian Nasional bagi Bank Umum” yang berlaku sampai dengan 21 Agustus 2017.

52



3. MANAJEMEN RISIKO KEUANGAN MANAJEMEN MODAL (lanjutan) b.


DAN

3.




Definisi kualitas aset keuangan lainnya selain kredit yang diberikan adalah sebagai berikut:

The definition of quality of financial assets other than loans are as follows:

•

Lancar: eksposur menunjukkan tidak terdapatnya tunggakan pembayaran jumlah yang jatuh tempo sesuai perjanjian kontraktual.

•

Current: exposures indicate that no delinquency of payment of amounts due in accordance with the contractual terms.

•

Kurang lancar: eksposur menunjukkan adanya tunggakan jumlah yang jatuh tempo sesuai perjanjian kontraktual.

•

Substandard: exposures indicate that there is delinquency of payment of amounts due in accordance with the contractual terms.

•

Macet: eksposur yang seluruh jumlah pokok dan jumlah yang jatuh tempo lainnya tidak dapat diharapkan untuk diterima kembali/dipulihkan sesuai dengan perjanjian kontraktual.

•

Loss: exposures that all the principal and other amounts due cannot be expected to be received/recovered in accordance with the contractual terms.

Belum jatuh tempo dan tidak mengalami penurunan nilai

Neither past due nor impaired

Eksposur menunjukkan laba yang tinggi atau stabil, modal dan likuiditas yang memadai, secara umum tercermin dengan pembayaran komitmen terhadap Bank secara tepat waktu. Sumber pembayaran dapat diidentifikasikan secara jelas.

Exposures exhibit high or stable earnings, adequate capital and liquidity, as generally evidenced by prompt repayment of its commitment with the Bank. Source of payment can be clearly identifiable.

Jatuh tempo dan penurunan nilai

Past due and not impaired

tidak

mengalami

Eksposur dimana telah terjadi tunggakan pembayaran pokok atau bunga kontraktual, tetapi Bank berkeyakinan bahwa penurunan nilai individual belum terjadi dengan mempertimbangkan agunan yang tersedia dan/atau tingkat tertagihnya jumlah yang masih terutang kepada Bank.

Exposures, for which contractual interest or principal payments are past due, however the Bank believes that individual impairment has not occurred with consideration of the collateral pledged and/or the stage of collection of amounts owned.

Mengalami penurunan nilai

Impaired

Eksposur dengan peringkat kurang lancar, diragukan dan macet dimana Bank telah menentukan bahwa terdapat bukti obyektif penurunan nilai dan Bank tidak mengharapkan untuk menerima kembali seluruh nilai pokok dan bunga tertunggak sesuai dengan persyaratan kontraktual dalam perjanjian.

Exposures with substandard, doubtful and loss grading for which the Bank determines that there is objective evidence of impairment and it does not expect to collect all principal and interest due according to the contractual terms of the agreement.

53




DAN

3.

Risiko Kredit (lanjutan) Kredit dengan persyaratan dinegosiasikan kembali


Credit Risk (continued) Loans with renegotiated terms

yang

Kredit dengan persyaratan yang dinegosiasikan kembali adalah kredit yang telah direstrukturisasi karena memburuknya posisi keuangan nasabah dan Bank telah memberikan konsesi yang mana tidak akan dipertimbangkan dalam kondisi normal. Ketika kredit telah direstrukturisasi, kredit tersebut tetap berada dalam kelompok ini walaupun kinerja nasabah membaik setelah restrukturisasi.

Loans with renegotiated terms are loans that have been restructured due to deterioration in the borrower’s financial position and where the Bank has made concessions that it would not otherwise consider. Once the loan is restructured, it remains in this category independent of satisfactory performance after restructuring.

Agunan

Collateral

Bank memiliki agunan atas kredit dalam bentuk properti, kas, aset bergerak dan aset lainnya. Estimasi nilai wajar didasarkan atas nilai agunan pada saat pemberian kredit. Penilaian jaminan dapat dilakukan oleh penilai eksternal dan/atau penilai internal. Untuk kredit dengan jumlah plafon debitur/grup debitur lebih dari Rp5.000, penilaiannya harus dilakukan oleh penilai eksternal/independen. Penilaian kembali jaminan dilakukan baik oleh penilai internal dan/atau eksternal setahun sekali untuk kredit yang performing. Untuk kredit yang non-performing, frekuensi penilaian kembali dilakukan lebih sering. Untuk kredit yang mengalami penurunan grading, maka penilaian kembali harus segera dilakukan. Pada umumnya, agunan tidak dimiliki atas penempatan pada Bank Indonesia dan bankbank lain, dan efek-efek.

The Bank holds collateral against loans in the form of property, cash, movable assets and others. Estimates of fair value are based on the value of collateral assessed at the time of borrowing. Collateral assessment can be performed by external and/or internal appraiser. Loans with plafond above Rp5,000 should be assessed by external/independent appraiser. Re-assessment of collaterals is performed by internal and/or external appraiser every year for performing loan. For non-performing loan, the frequency of reassessment could be conducted more often. In term of down graded loans, re-assessment should be conducted immediately. Collateral generally is not held over placements with Bank Indonesia and other banks, and securities.

Analisa konsentrasi risiko kredit

Concentration of credit risk analysis

Konsentrasi risiko kredit timbul ketika sejumlah nasabah menjalankan kegiatan usaha yang sejenis atau menjalankan kegiatan usaha dalam wilayah geografis yang sama, atau ketika nasabah memiliki karakteristik yang sejenis yang akan menyebabkan kemampuan mereka untuk memenuhi kewajiban kontraktualnya secara serupa dipengaruhi oleh perubahan kondisi ekonomi atau kondisi lainnya.

Concentrations of credit risk arise when a number of customers are engaged in similar business activities or activities within the same geographic region, or when they have similar characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions.

54




DAN

3.

FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT (continued) b. Credit Risk (continued)


Concentration of credit risk by type of debtors:

Konsentrasi risiko kredit berdasarkan jenis debitur:

31 Desember/December 31, 2016 Pemerintah dan Bank Indonesia/ Government and Bank Indonesia

Korporasi/ Corporates

Giro pada Bank Indonesia Giro pada bank-bank lain Penempatan pada Bank Indonesia dan bank lain Tagihan derivatif Tagihan akseptasi Efek-efek yang dibeli dengan janji dijual kembali Kredit yang diberikan Efek-efek Aset lain-lain Komitmen dan kontinjensi dengan risiko kredit Total Persentase

Bank/ Banks

Ritel/Retail

Total

-

1.635.116 -

80.815

-

1.635.116 80.815

-

2.230.074 -

550 22.193

-

2.230.074 550 22.193

15.807.393 129.245

471.350 571.862 8.458

-

1.743.795 18.564

471.350 17.551.188 571.862 156.267

Current accounts with Bank Indonesia Current accounts with other banks Placements with Bank Indonesia and other bank Derivatives receivable Acceptance receivable Securities purchased under agreement to resell Loans Securities Other asset Commitments and contingencies with credit risk

52.647

-

-

-

52.647

15.989.285

4.916.860

103.558

1.762.359

22.772.062

70%

21,5%

0,5%

8%

100%

Percentage

Current accounts with Bank Indonesia Current accounts with other banks

Total

31 Desember/December 31, 2015 Pemerintah dan Bank Indonesia/ Government and Bank Indonesia

Korporasi/ Corporates

Giro pada Bank Indonesia Giro pada bank-bank lain Penempatan pada Bank Indonesia dan bank lain Tagihan derivatif Tagihan akseptasi Efek-efek yang dibeli dengan janji dijual kembali Kredit yang diberikan Efek-efek Aset lain-lain Komitmen dan kontinjensi dengan risiko kredit Total Persentase

Bank/ Banks

Ritel/Retail

Total

-

1.710.947 -

31.146

-

1.710.947 31.146

-

2.103.542 -

8.271 2.921 61.821

-

2.111.813 2.921 61.821

19.046.689 231 93.750

269.117 325.213 8.716

-

1.741.615 24.552

269.117 20.788.304 325.444 127.018

50.697

-

-

-

50.697

19.191.367

4.417.535

104.159

1.766.167

25.479.228

76%

17%

0%

7%

100%

Placements with Bank Indonesia and other bank Derivatives receivable Acceptance receivable Securities purchased under agreement to resell Loans Securities Other asset Commitments and contingencies with credit risk Total Percentage

Konsentrasi risiko kredit dari kredit yang diberikan berdasarkan jenis kredit, valuta dan sektor ekonomi diungkapkan pada Catatan 12.

Concentration of credit risk of loans by type of loans, currency and economic sector is disclosed in Note 12.

Stress Testing

Stress Testing

Stress Testing adalah metode pengukuran risiko dengan memperkirakan potensi kerugian ekonomi Bank berdasarkan kondisi pasar abnormal untuk memastikan sensitivitas kinerja Bank terhadap perubahan faktor risiko dan mengidentifikasi faktor yang mempengaruhi dan berdampak pada pendapatan dan modal Bank secara signifikan

Stress Testing is a method of risk measurement by estimating the potential economic loss to the Bank under abnormal market conditions in order to ascertain the sensitivity of the Bank’s performances to changes in risk factors and to identify influencing factors that significantly impact the Bank’s revenue and capital.

55




DAN

3.


FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT (continued) b. Credit Risk (continued)

Stress Testing (lanjutan)

Stress Testing (continued)

Dalam menghadapi kondisi fluktuasi nilai tukar rupiah terhadap Dolar Amerika Serikat, Bank telah melakukan stress test terhadap nasabah wholesale yang memiliki eksposur kredit valas dengan melakukan beberapa skenario kurs.

In facing with the fluctuation of rupiah exchange rate to United States Dollar, Bank has conducted stress test to wholesale customers who have foreign currency credit exposure by conducting several exchange rate scenarios.

c. Risiko Pasar

c.

Market Risk

Risiko pasar adalah risiko yang timbul dari pergerakan variabel pasar dalam portofolio yang dimiliki oleh Bank yang dapat menimbulkan kerugian bagi Bank (adverse movement). Variabel pasar didefinisikan sebagai suku bunga dan nilai tukar termasuk derivatif dari kedua jenis risiko ini. Tujuan dari manajemen risiko pasar adalah untuk mengelola dan mengendalikan eksposur risiko pasar dalam parameter yang dapat diterima, dan secara bersamaan mengoptimalkan hasil pengembalian atas risiko yang diterima.

Market Risk is the risk arising from movement in market variables in portfolios held by the Bank that could incur losses for the Bank (adverse movements). Market variables are defined as interest rates and exchange rates including derivatives of these two type of risks. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return on risk.

ALCO Bank yang beranggotakan Direksi dan beberapa anggota manajemen senior bertanggungjawab untuk menetapkan kebijakan dan strategi pengelolaan risiko tingkat suku bunga di banking book, serta mengawasi penerapan dan pelaksanaannya. Tujuan utama ALCO adalah untuk mengoptimalkan hasil usaha Bank dengan tetap memperhatikan limit risiko yang telah ditetapkan.

The Bank’s ALCO, which consists of the Board of Directors and selected members of senior management, is responsible for determining interest rate risk management policies and strategies in banking book and monitoring its implementation and execution. The main objective of ALCO is to optimize the Bank’s return within predetermined risk limits.

Secara keseluruhan, risiko pasar dibagi dalam risiko-risiko berikut:

In overall, market risk is divided into the following risks:

I.

Risiko mata uang

I.

Currency risk

Bank memiliki eksposur risiko mata uang akibat adanya transaksi dalam valuta asing. Bank memonitor risiko konsentrasi yang terjadi untuk setiap valuta sehubungan dengan penjabaran transaksi dan aset dan liabilitas moneter dalam valuta asing ke dalam Rupiah.

The Bank is exposed to currency risk through transaction in foreign currencies. The Bank monitors any concentration risk in relation to any individual currency in regard to the translation of foreign currency transactions and monetary assets and liabilities into Rupiah.

Agar sejalan dengan risk appetite yang telah ditetapkan oleh Bank, maka kegiatan propierty trading tidak diperkenankan. Pengelolaan posisi valuta asing Bank dilakukan dengan cara mengendalikan Posisi Devisa Neto (“PDN”) Bank secara keseluruhan.

To align with the risk appetite set by the Bank, hence propierty trading activity is not allowed. The Bank’s foreign currency position management is conducted by managing the Bank’s overall Net Foreign Exchange Position (“NOP”).

56




DAN

3.

c. Risiko Pasar (lanjutan)

FINANCIAL RISK MANAGEMENT CAPITAL MANAGEMENT (continued)

AND

c. Market Risk (continued)

I. Risiko mata uang (lanjutan)

I. Currency risk (continued) The management of currency risk is supplemented by monitoring the sensitivity of the Bank’s net open position to various currency exchange rate scenarios on a quarterly basis. Standard scenarios that are considered include a 4% movement in average foreign currencies against Rupiah, which according to management’s assessment, is relevant to assess its significance to the Bank’s financial results. The analysis (unaudited) are as follows:

Pengelolaan risiko mata uang dilengkapi dengan pemantauan sensitivitas posisi devisa neto Bank terhadap berbagai skenario kurs mata uang yang ditelaah secara triwulanan. Skenario standar yang dipertimbangkan meliputi perubahan nilai tukar rata-rata valuta asing terhadap Rupiah sebesar 4%, yang menurut penilaian manajemen, relevan untuk menilai signifikansinya terhadap hasil usaha Bank. Analisa tersebut (tidak diaudit) adalah sebagai berikut: 4% kenaikan/ increase *) Sensitivitas terhadap laba rugi Per 31 Desember 2016 Per 31 Desember 2015

4% penurunan/ decrease **)

(166) (289)

166 289

Sensitivity to profit or loss For the year ended December 31, 2016 For the year ended December 31, 2015

*) Kurs valuta asing rata-rata meningkat terhadap Rupiah/Average foreign exchange rates are appreciated against Rupiah. **) Kurs valuta asing rata-rata menurun terhadap Rupiah/Average foreign exchange rates are depreciated against Rupiah. 31 Desember/December 31, 2016

Valuta

Keseluruhan (laporan posisi keuangan dan rekening administratif) Euro Eropa Dolar Amerika Serikat Dolar Australia Dolar Singapura Dolar Hong Kong Yen Jepang Dolar Selandia Baru Swiss Franc Poundsterling Inggris Riyal Qatar Baht Thailand Total

Aset/Assets

Liabilitas/ Liabilities

Posisi Devisa Neto (nilai absolut)/ Net Open Position (absolute amount)

Currencies

38.133 6.688.241 44.512 165.972 969 17.333 44 308

37.546 6.693.869 43.965 165.560 917 17.515 3 154

587 5.628 547 412 52 182 41 154

25.063 218 439

25.111 301 -

48 83 439 8.173

Aggregate (statement of financial position and administrative accounts) European Euro United States Dollar Australian Dollar Singapore Dollar Hong Kong Dollar Japanese Yen New Zealand Dollar Swiss Franc Great Britain Poundsterling Qatari Riyal Baht Thailand Total

3.321.304

Total capital (Note 3f)

0,25%

NOP ratio

Total modal (Catatan 3f) Rasio PDN

57




DAN

3.

c. Risiko Pasar (lanjutan) I.

FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT (continued) c. Market Risk (continued)

Risiko mata uang (lanjutan)

I.

Currency risk (continued)

31 Desember/December 31, 2015

Valuta

Liabilitas/ Liabilities

Aset/Assets

Keseluruhan (laporan posisi keuangan dan rekening administratif) Euro Eropa Dolar Amerika Serikat Dolar Australia Dolar Singapura Dolar Hong Kong Yen Jepang Dolar Selandia Baru Swiss Franc

Posisi Devisa Neto (nilai absolut)/ Net Open Position (absolute amount)

Currencies

48.199 8.520.351 54.595 223.941 895 3.498 127 345

47.267 8.515.738 53.886 224.315 927 3.114 172

932 4.613 709 374 32 384 127 173

30.467 197 498

29.879 93 -

588 104 498 8.534

Aggregate (statement of financial position and administrative accounts) European Euro United States Dollar Australian Dollar Singapore Dollar Hong Kong Dollar Japanese Yen New Zealand Dollar Swiss Franc Great Britain Poundsterling Qatari Riyal Baht Thailand Total

3.225.289

Total capital (Note 3f)

0,26%

NOP ratio

Poundsterling Inggris Riyal Qatar Baht Thailand Total Total modal (Catatan 3f) Rasio PDN

II. Risiko tingkat suku bunga

II. Interest rate risk

Kegiatan usaha Bank dipengaruhi oleh risiko fluktuasi suku bunga terhadap aset berbunga dan liabilitas berbunga (bukan untuk tujuan diperdagangkan) yang memiliki jatuh tempo atau re-price pada saat yang berbeda-beda atau dalam jumlah yang beragam.

The Bank’s operations are subject to the risk of interest rate fluctuations to the extent that interest-earning assets and interest-bearing liabilities (not for trading purpose) mature or re-price at different times or in different amounts.

Tabel di bawah ini menyajikan aset berbunga dan liabilitas berbunga (bukan untuk tujuan diperdagangkan) Bank pada nilai tercatat, yang dikategorikan menurut mana yang terlebih dahulu antara tanggal re-pricing atau tanggal jatuh tempo kontraktual:

The table below summarizes the Bank’s interest-earning assets and interest-bearing liabilities (not for trading purpose) at carrying amounts, categorized by the earlier of contractual re-pricing or maturity dates:

31 Desember/December 31, 2016 Suku bunga mengambang/ Floating rate

Suku bunga tetap/Fixed rate

_

________________

Nilai tercatat/ Carrying ≤ 3 bulan/ amount months Penempatan pada Bank Indonesia dan Bank lain Efek-efek yang dibeli dengan janji dijual kembali Kredit yang diberikan Efek-efek

Simpanan dari nasabah Simpanan dari bank-bank lain Surat berharga yang diterbitkan

> 3 - 12 bulan/ months

>1-2 tahun/ years

> 2 tahun/ years


≤ 3 bulan/ months

>1-2 tahun/ years

> 2 tahun/ years

2.230.074

-

-

-

-

2.230.074

-

-

-

471.350 17.551.188 571.862

197.643 -

872.794 -

370.988 -

4.053.780 -

471.350 2.755,189 247.507

2.743.067 -

435.789 73.336

6.121.938 251.019

20.824.474

197.643

872.794

370.988

4.053.780

5.704.120

2.743.067

509.125

6.372.957

19.344.962

-

-

-

-

14.895.497

4.449.465

-

-

662.798

-

-

-

-

662.798

-

-

315.520

-

-

-

-

-

315.520

20.323.280

-

-

-

-

15.558.295

4.764.985

501.194

197.643

872.794

370.988

4.053.780

(9.854.175)

(2.021.918)

58

Placements with Bank Indonesia and other bank Securities purchased under agreement to resell Loans Securities

Deposits from customers Deposits from other banks Marketable securities issued

-

-

509.125

6.372.957




DAN

3.

c. Risiko Pasar (lanjutan) II.


Risiko tingkat suku bunga

II.

Interest rate risk

31 Desember/December 31, 2015 Suku bunga mengambang/ Floating rate

Suku bunga tetap/Fixed rate

_

________________

Nilai tercatat/ Carrying ≤ 3 bulan/ amount months Penempatan pada Bank Indonesia dan bank-bank lain Efek-efek yang dibeli dengan janji dijual kembali Kredit yang diberikan Efek-efek

Simpanan dari nasabah Simpanan dari bank-bank lain Pinjaman Subordinasi


>1-2 tahun/ years

> 2 tahun/ years

≤ 3 bulan/ months


>1-2 tahun/ years

> 2 tahun/ years

2.111.813

-

-

-

-

2.111.813

-

-

269.117 20.788.304 325.444

263.367 -

771.379 -

570.699 -

4.259.124 -

269.117 2.170.608 -

5.170.556 69

319.676 73.994

Placements with Bank Indonesia and other banks Securities purchased under agreement to resell 7.262.895 Loans 251.381 Securities

23.494.678

263.367

771.379

570.699

4.259.124

4.551.538

5.170.625

393.670

7.514.276

18.509.008

-

-

-

-

17.841.843

499.555

167.610

-

3.179.111 964.950

-

-

-

-

3.179.111 -

-

-

964.950

22.653.069

-

-

-

-

21.020.954

499.555

167.610

964.950

841.609

263.367

771.379

570.699

4.259.124

4.671.070

226.060

6.549.326

(16.469.416)

-

Deposits from customers Deposits from other banks Subordinated Loan

Untuk mengurangi risiko tingkat suku bunga yang ditimbulkan oleh kredit yang diberikan dengan suku bunga tetap, berdasarkan perjanjian kredit dengan debitur/ nasabah, Bank berhak mengubah besaran suku bunga sewaktu-waktu atas dasar pertimbangan Bank, kecuali untuk kredit-kredit tertentu yang telah ditetapkan jangka waktu re-pricing.

To mitigate the interest rate risk arising from fixed rate loans, based on the loan agreements with the debtors/customers, the Bank has the rights to change the interest rates at any time at its discretion, except for certain loans which repricing period have been determined.

Secara umum, Bank sensitif terhadap liabilitas karena aset berbunga memiliki jangka waktu jatuh tempo yang lebih panjang dan frekuensi re-price yang lebih jarang dibandingkan liabilitas berbunga. Hal ini berarti dalam kondisi suku bunga yang meningkat, marjin yang dihasilkan akan mengecil sejalan dengan reprice liabilitas. Namun demikian, dampak aktual akan dipengaruhi oleh sejumlah faktor, termasuk pembayaran yang dilakukan sebelum atau setelah tanggal jatuh tempo kontraktual dan perpanjangan simpanan dari nasabah secara berkesinambungan pada saat jatuh tempo (roll-over).

In general, the Bank is liability sensitive because its interest-earning assets have a longer duration and being repriced less frequently than interestbearing liabilities. This means that in rising interest rate environment, margin earned will narrow as liabilities reprice. However, the actual effect will depend on a number of factors, including the extent to which repayments are made earlier or later than the contractual maturity dates and extension of customer deposits on a roll-over basis.

Tabel dibawah ini mengikhtisarkan kisaran suku bunga kontraktual dan suku bunga efektif ratarata tertimbang setahun pada tanggal 31 Desember 2016 dan 2015 untuk masingmasing instrument keuangan:

The tables below summarize the range of contractual interest rates and weighted average effective interest rates per annum as of 31 December 2016 and 2015 for each financial instrument:

59




DAN

3.

c. Risiko Pasar (lanjutan) II.


Risiko tingkat suku bunga (lanjutan)

II.

Interest rate risk (continued)

Tahun yang berakhir pada tanggal 31 Desember/ Year ended December 31 2016 2015 Kontraktual/ Kontraktual/ Efektif/Effective Efektif/Effective Contractual Contractual Aset Rupiah: Penempatan pada Bank Indonesia dan bank-bank lain Bank Indonesia 4,00% Efek-efek yang dibeli dengan janji dijual kembali 4,95% - 5,20% Kredit yang diberikan 0,00% - 36,00% Efek-efek Sertifikat Bank Indonesia 6,30% Obligasi korporasi Obligasi Pemerintah 8,25% - 11,00% Valuta asing: Penempatan pada Bank Indonesia dan bank-bank lain Bank Indonesia Kredit yang diberikan Liabilitas Rupiah: Simpanan dari nasabah Giro Tabungan Deposito berjangka dan deposit on call Simpanan dari bank-bank lain Giro Deposito berjangka dan deposit on call Call money Surat berharga yang diterbitkan Valuta asing: Simpanan dari nasabah Giro Deposito berjangka dan deposit on call Simpanan dari bank-bank lain Call Money Pinjaman Subordinasi

4,00%

5,50%

5,50%

5,04% 12,90%

6,40% 0,00% - 32,98%

6,40% 12,89%

6,30% 8,54%

15,25%-15,50% 8,25% -11,00%

15,35% 8,52%

Assets Rupiah: Placements with Bank Indonesia and other banks Bank Indonesia Securities purchased under agreement to resell Loans Securities Certificates of Bank Indonesia Corporate bonds Government bonds Foreign currencies: Placements with Bank Indonesia and other banks Bank Indonesia

0,69%

0,69%

0,38%

0,38%

2,00% - 7,67%

5,79%

4,66% - 6,11%

5,59%

0,00% - 7,00% 0,00% - 5,00%

1,19% 1,32%

0,00% - 4,25% 0,00% - 5,00%

0,81% 1,61%

0,00% - 10,00%

8,38%

0,25% - 12,00%

9,43%

0,05% - 2,00%

0,97%

0,00% - 1,00%

1,86%

0,05% - 7,25% 5,00%

6,48% 5,00%

5,50% - 7,00% 7,25% - 8,40%

6,17% 7,89%

8,50%

8,50%

-

-

0,00% - 1,50%

0,12%

0,00% - 1,50%

0,17%

0,00% - 2,25%

1,80%

0,10% - 3,50%

2,14%

0,75% - 2,15% -

1,71% -

7.25%

7,25%

Loans Liabilities Rupiah: Deposits from customers Current accounts Saving accounts Time deposits and deposit on call Deposits from other banks Current Accounts Time deposits and deposit on call Call money Marketable securities issued Foregn currencies: Deposits from customers Current accounts Time deposits and deposit on call Deposit from other banks Call money Subordinated Loan

Analisa sensitivitas atas risiko tingkat suku bunga dan risiko mata uang

Sensitivity analysis on interest rate and currency risk

Pengelolaan risiko tingkat suku bunga dilengkapi dengan pemantauan atas sensitivitas terhadap aset dan liabilitas keuangan Bank yang memiliki tingkat suku bunga mengambang dan tetap terhadap berbagai skenario suku bunga. Skenario standar yang dipertimbangkan secara triwulanan meliputi penurunan atau kenaikan yield curve secara paralel sebesar 100 basis point (bp). Analisa sensitivitas Bank atas kenaikan atau penurunan tingkat suku bunga pasar, dengan asumsi tidak terdapat perubahan asimetris pada yield curve dan posisi keuangan yang konstan, (tidak diaudit) adalah sebagai berikut:

The management of interest rate risk is supplemented by monitoring the sensitivity of the Bank’s financial assets and liabilities which have floating and fixed interest rate to various interest rate scenarios. Standard scenarios that are considered on a quarterly basis include a 100 basis point (bp) parallel fall or rise in all yield curves. An analysis of the Bank’s sensitivity to increase or decrease in market interest rates, assuming no asymmetrical movement in yield curves and a constant financial position, (unaudited) is as follows:

60



3. MANAJEMEN RISIKO KEUANGAN MANAJEMEN MODAL (lanjutan)


DAN

3.

c. Risiko Pasar (lanjutan)

c. Market Risk (continued) Sensitivity analysis on interest rate and currency risk (continued)

Analisa sensitivitas atas risiko tingkat suku bunga dan risiko mata uang (lanjutan) 100 bp kenaikan/increase Sensitivitas terhadap pendapatan bunga bersih Per 31 Desember 2016 Per 31 Desember 2015


100 bp penurunan/decrease

(30.898) (45.673)

30.898 45.673

d. Risiko Likuiditas

Sensitivity to net interest income For the year ended December 31, 2016 For the year ended December 31, 2015

d. Liquidity Risk

Risiko Likuiditas adala risiko akibat ketidakmampuan Bank memenui kewajiban yang telah jatuh waktu dari sumber pendanaan arus kas dan/atau dari aset likuid berkualitas tinggi yang dapat diagunkan, tanpa menggangu aktivitas dan keuangan Bank. Risiko likuiditas dapat dikategorikan sebagai berikut:

Liquidity Risk is the risk that arising from Bank’s inability to fulfill matured obligation from cash flow and/or high-quality liquid assets that can be pledged, without disturbing the activities and financial condition of the Bank. Liquidity risk can be categorised as follows:

•

Risiko Likuiditas-Pasar, yaitu risiko yang timbul dari ketidakmampuan Bank untuk mengimbangi posisi tertentu dengan harga pasar karena kondisi likuiditas pasar yang buruk atau gangguan pasar.

•

Market-Liquidity Risk, namely arising from the inability of the Bank to offset certain position at market prices due to poor conditions of market liquidity or market disruptions.

•

Risiko Likuiditas Pendanaan, yaitu risiko yang timbul dari ketidakmampuan Bank untuk mengkonversi aset ke kas atau memperoleh pendanaan dari sumber lain

•

Funding Liquidity Risk, namely risk arising from the inability of the Bank to convert assets to cash or obtain funding from other sources

Pengelolaan likuiditas dan manajemen asetliabilitas meliputi pemeliharaan likuiditas di atas tingkat yang aman untuk memastikan bahwa setiap saat kebutuhan dana dapat dipenuhi untuk melunasi liabilitas yang telah jatuh tempo.

Liquidity and asset-liability management include maintaining liquidity above safety level to ensure that funding requirement can be met to pay liabilities which due at any time.

Ketidaksesuaian antara jangka waktu jatuh tempo dana dari pihak ketiga yang pada umumnya lebih pendek dari jatuh tempo kredit yang diberikan akan menyebabkan masalah likuiditas, yang akan mempengaruhi kemampuan Bank dalam memenuhi kewajibannya kepada para nasabah. Hal ini dapat mempengaruhi tingkat kepercayaan masyarakat yang pada akhirnya dapat mempengaruhi kelangsungan usaha Bank.

The mismatch between maturities of funding which in general is shorter than maturity of loans will cause liquidity problems, which will affect the capability of the Bank to meet its obligations to customers. This may influence public’s trust and may affect the going concern of the Bank.

Dalam menghadapi kemungkinan adanya ketidaksesuaian jatuh tempo aset dan liabilitas, manajemen Bank melalui rapat bulanan ALCO melakukan penelaahan atas beberapa hal yang bersifat strategis, antara lain:

To face possibility of assets and liabilities mismatch, the Bank’s management, through monthly ALCO meeting, reviews strategic matters, such as:

1.

1.

2.

3.

4. 5.

Pengelolaan dana yang memiliki jatuh tempo yang tidak sesuai dengan aset; Ketepatan pengelolaan aset dan liabilitas yang sensitif terhadap perubahan suku bunga; Analisa simpanan nasabah yang menggambarkan tren berbagai produk dana pihak ketiga di seluruh Indonesia; Penempatan dana pada portofolio efek-efek; Laporan perkembangan kredit yang telah ada dan yang baru;

2.

3.

4. 5.

61

Management of fund which has maturities mismatch; Accuracy of management of assets and liabilities which are sensitive to interest rate movement; Customer deposits analysis which describes the trend of all third party fund products throughout Indonesia; Investment in securities portfolio; Existing and new loans progress report;




DAN

3.

d. Risiko Likuiditas (lanjutan)

d. Liquidity Risk (continued) To face possibility of assets and liabilities mismatch, the Bank’s management, through monthly ALCO meeting, reviews strategic matters, such as (continued):

Dalam menghadapi kemungkinan adanya ketidaksesuaian jatuh tempo aset dan liabilitas, manajemen Bank melalui rapat bulanan ALCO melakukan penelaahan atas beberapa hal yang bersifat strategis, antara lain (lanjutan): 6. 7.


6.

Strategi penetapan harga sesuai dengan kondisi pasar saat ini; Perbandingan antara target dengan realisasi dana pihak ketiga.

7.

Pricing strategy in accordance with current market condition; Comparison between target and realization of third party fund.

Pengelolaan likuiditas Bank ditekankan pada penyesuaian arus kas masuk dan keluar. Kesenjangan arus kas diantisipasi melalui pemeliharaan cadangan likuiditas primer yang memadai sesuai dengan perkiraan arus kas dan struktur liabilitas yang ada. Pemeliharaan cadangan likuiditas primer meliputi pemeliharaan cadangan wajib pada tingkat yang optimal yang ditetapkan Bank Indonesia serta pemeliharaan efek-efek berjangka pendek yang sangat likuid seperti Sertifikat Bank Indonesia dan instrumen operasi moneter Bank Indonesia lainnya. Bank juga memelihara cadangan likuiditas sekunder yang terdiri dari penempatan dana jangka pendek di bank-bank lain serta efek-efek berjangka panjang yang likuid seperti obligasi pemerintah, obligasi bank dan obligasi korporasi yang memiliki peringkat baik. Pengelolaan likuiditas juga dilakukan melalui pengelolaan struktur sumber dana dengan menerapkan limit konsentrasi deposan dan berusaha mengurangi ketergantungannya pada dana mahal seperti deposito berjangka dan menggantinya dengan sumber dana murah seperti giro dan tabungan. Bank juga senantiasa memelihara kemampuannya untuk memiliki akses ke pasar uang dengan selalu memelihara hubungan dengan bank-bank koresponden. Bank juga secara berkala memonitor seluruh keadaan di atas dan mengambil tindakan agar terdapat variasi pendanaan.

The focus of the Bank’s management of liquidity is to match the cash inflows and cash outflows. The gap between cash flows will be anticipated with the proper maintenance of primary liquidity reserve in accordance with proforma cash flows and existing liabilities structure. Maintenance of primary liquidity reserve consists of maintenance of reserve requirement that should be in optimal level based on Bank Indonesia regulation and short-term highly liquid securities, such as Certificates of Bank Indonesia and other Bank Indonesia monetary operation instruments. The Bank also maintains secondary liquidity reserve, which consists of short- term placements with other banks and liquid long- term securities such as government bonds, private bank bonds and corporate bonds that have good rating. Liquidity management is also conducted through financial resources structure, such as by applying the depositors concentration limit and trying to decrease the dependence on high cost fund such as time deposits and replace it with lower cost fund such as current accounts and saving deposits. The Bank also maintains its ability to access money market by maintaining relationship with correspondent banks. The Bank also regularly monitors all situations above and takes some actions to achieve funding variations.

Eksposur terhadap Risiko Likuiditas

Exposure to Liquidity Risk

Ukuran utama yang digunakan oleh Bank untuk mengelola risiko likuiditas adalah rasio aset likuid bersih terhadap simpanan dari nasabah. Untuk tujuan ini, aset likuid bersih termasuk kas dan setara kas dan efek utang dengan peringkat investasi yang memiliki pasar yang aktif dan likuid, dikurangi simpanan dari bank-bank dan komitmen yang jatuh tempo dalam satu bulan ke depan, jika ada. Pada tanggal 31 Desember 2016 dan 2015, rasio aset likuid bersih terhadap simpanan dari nasabah adalah masing-masing 18,56% dan 5,65%.

The key measure used by the Bank for managing liquidity risk is the ratio of net liquid assets to deposits from customers. For this purpose, net liquid assets are considered as including cash and cash equivalents and investment grade debt securities for which there is an active and liquid market, less any deposits from banks and commitments maturing within the next month, if any. As of December 31, 2016 and 2015, the reported ratios of net liquid assets to deposits from customers were 18.56% and 5.65%, respectively.

62




DAN

3.


FINANCIAL RISK MANAGEMENT CAPITAL MANAGEMENT (continued) d.

AND

Liquidity Risk (continued)

31 Desember/December 31 2016 Kas dan setara kas Efek-efek Simpanan dari bank-bank lain Surat berharga yang diterbitkan Total aset likuid neto Simpanan dari nasabah Rasio aset likuid bersih terhadap simpanan dari nasabah

2015

3.997.265 571.862 (662.798) (315.520)

3.899.338 325.444 (3.179.111) -

3.590.809 19.344.962

Cash and cash equivalents Securities Deposits from other banks Marketable securities issued

1.045.671 18.509.008

18,56%

Total net liquid assets Deposits from customers Ratio of net liquid assets to deposits from customers

5,65%

Bank bergantung pada simpanan dari nasabah dan bank-bank lain sebagai sumber utama pendanaannya yang secara umum memiliki periode jatuh tempo yang lebih singkat dan sebagian besar merupakan liabilitas yang harus dibayarkan segera. Simpanan-simpanan yang memiliki jangka waktu jatuh tempo yang singkat ini meningkatkan risiko likuiditas Bank dan Bank secara aktif mengelola risiko ini dengan memelihara tingkat harga yang kompetitif dan pengawasan tren pasar secara berkesinambungan.

The Bank relies on deposits from customers and other banks as its primary sources of funding which generally have shorter maturities and a large proportion of them are repayable on demand. The short-term nature of these deposits increases the Bank’s liquidity risk and the Bank actively manages this risk through maintaining competitive pricing and constant monitoring of market trends.

Sumber pendanaan jangka pendek tersebut senantiasa diperpanjang secara otomatis sehingga dapat mengurangi selisih/gap dari jatuh tempo antara aset dan liabilitas.

Short-term funding source is constantly made an automatic renewal, so it can reduce the difference/gap of maturities between assets and liabilities.

Sisa umur kontraktual liabilitas keuangan sampai dengan jatuh tempo pada tanggal 31 Desember 2016 dan 2015 adalah sebagai berikut:

Residual contractual maturities of financial liabilities as of December 31, 2016 and 2015 are as follows: 2016

Nilai tercatat/ Carrying amount Liabilitas non-derivatif Simpanan dari nasabah Simpanan dari bank-bank lain Surat berharga yang diterbitkan

Nilai nominal bruto arus kas masuk (keluar)/ Gross nominal inflow (outflow)

(19.344.962) (662.798)

(19.437.451) (663.389)

(315.520)

(315.520)

(20.323.280)

(20.416.360)

Kurang dari 1 bulan/Less than 1 month

1 - 3 bulan/ months

(8.722.879) (16.599)

(6.265.108) (646.790)

(8.739.478 )


(6.911.898)

(4.449.464) -

Non-derivative liabilities Deposits from customers Deposits from other banks

(315.520)


(4.764.984)

2015

Nilai tercatat/ Carrying amount Liabilitas non-derivatif Simpanan dari nasabah Simpanan dari bank-bank lain Pinjaman Subordinasi

Nilai nominal bruto arus kas masuk (keluar)/ Gross nominal inflow (outflow)

Kurang dari 1 bulan/Less than 1 month

1 - 3 bulan/ months


(18.509.008) (3.179.111) (964.950)

(18.577.337) (3.180.755) (1.367.214)

(6.550.615) (2.627.855) (5.830)

(11.359.557) (552.900) (11.600)

(667.165) (1.349.724)

(22.653.069)

(23.125.306)

(9.184.300)

(11.924.057)

(2.016.889)

63

Non-derivative liabilities Deposits from customers Deposits from other banks Subordinated Loan




DAN

3. FINANCIAL RISK MANAGEMENT AND CAPITAL MANAGEMENT (continued)


d. Liquidity Risk (continued)

Tabel di atas menyajikan arus kas yang tidak didiskontokan dari liabilitas keuangan Bank berdasarkan periode jatuh tempo kontraktual yang paling dekat. Arus kas atas instrumen keuangan yang diharapkan Bank bervariasi secara signifikan dari analisa ini. Sebagai contoh, simpanan dari nasabah diharapkan memiliki saldo yang stabil atau meningkat.

The above table shows the undiscounted cash flows on the Bank’s financial liabilities on the basis of their earliest possible contractual maturity. The Bank’s expected cash flows on these instruments vary significantly from this analysis. For example, deposits from customers are expected to maintain a stable or increasing balance.

Nilai nominal arus kas masuk (keluar) yang diungkapkan pada tabel di atas menyajikan arus kas kontraktual yang tidak didiskontokan terkait dengan nilai pokok dan bunga dari liabilitas keuangan.

The nominal inflow (outflow) disclosed in the above table represents the contractual undiscounted cash flows relating to the principal and interest on the financial liability.

Analisa jatuh tempo aset dan liabilitas keuangan

Maturity gap analysis of financial assets and liabilities

Tabel di bawah menganalisa nilai tercatat aset dan liabilitas keuangan Bank ke dalam kelompok jatuh tempo berdasarkan sisa jangka waktu sampai dengan tanggal jatuh tempo kontraktual pada tanggal 31 Desember 2016 dan 2015:

The table below analysis the carrying amount of financial assets and liabilities of the Bank into maturity time bands based on remaining term to contractual maturity as of December 31, 2016 and 2015: 2016

Nilai tercatat/ Carrying amount Kas Giro pada Bank Indonesia Giro pada bank-bank lain Penempatan pada Bank Indonesia dan bank lain Efek-efek yang dibeli dengan janji dijual kembali Tagihan derivatif Tagihan akseptasi Kredit yang diberikan Efek-efek Aset lain-lain - neto Total aset keuangan Simpanan dari nasabah Simpanan dari bank-bank lain Surat berharga yang diterbitkan Liabilitas derivatif Liabilitas akseptasi Beban masih harus dibayar dan liabilitas lain-lain Total liabilitas keuangan Selisih

Tanpa tanggal jatuh tempo kontraktual/ No contractual maturity

< 1 bulan/ month

1 - 3 bulan/ months

> 3 - 12 bulan/months

>1-2 tahun/years

> 2 tahun/ years

51.260

51.260

-

-

-

-

-

1.635.116

1.635.116

-

-

-

-

-

80.815

80.815

-

-

-

-

-

2.230.074

-

2.230.074

-

-

-

-

471.350 550 22.193 17.551.188 571.862 156.267

-

471.350 550 1.320.977 19.232

16.681 1.631.855 247.506 17.086

5.512 3.615.862 32.219

806.777 73.336 11.065

10.175.717 251.019 76.665

Cash Current accounts with Bank Indonesia Current accounts with other banks Placements with Bank Indonesia and other banks Securities purchased under agreement to resell Derivatives receivable Acceptances receivable Loans Securities Other assets - net

22.770.675

1.767.191

4.042.183

1.913.128

3.653.593

891.178

10.503.401

Total financial assets

19.344.962

2.238.789

6.391.600

6.265.108

4.449.465

-

-


662.798

14.508

1.500

646.790

-

-

-

315.520 12.890 22.193

-

12.890 -

16.681

315.520 5.512

-

-

Deposits from other banks Maketable securities issued Derivatives payable Acceptances payable

87.440

87.440

-

-

-

-

-


20.445.803

2.340.737

-

-

Total financial liabilities

891.178

10.503.401

Difference

2.324.872

(573.546 )

6.405.990

6.928.579

4.770.497

(2.363.807)

(5.015.451)

(1.116.904)

64




DAN

3.



AND

d. Liquidity Risk (continued) 2015

Nilai tercatat/ Carrying amount Kas Giro pada Bank Indonesia Giro pada bank-bank lain Penempatan pada Bank Indonesia dan bank lain Efek-efek yang dibeli dengan janji dijual kembali Tagihan derivatif Tagihan akseptasi Kredit yang diberikan Efek-efek Aset lain-lain - neto Total aset keuangan Simpanan dari nasabah Simpanan dari bank-bank lain Liabilitas derivatif Liabilitas akseptasi Beban masih harus dibayar dan liabilitas lain-lain Pinjaman Subordinasi Total liabilitas keuangan Selisih

Tanpa tanggal jatuh tempo kontraktual/ No contractual maturity

< 1 bulan/ month

1 - 3 bulan/ months

> 3 - 12 bulan/months

>1-2 tahun/years

> 2 tahun/ years

45.432

45.432

-

-

-

-

-

1.710.947

1.710.947

-

-

-

-

-

31.146

31.146

-

-

-

-

-

2.111.813

-

2.111.813

-

-

-

-

269.117 2.921 61.821 20.788.304 325.444 127.018

127.018

204.484 2.921 49.565 899.520 -

64.633 12.256 1.534.455 -

5.941.935 -

890.375 74.063 -

11.522.019 251.381 -

Cash Current accounts with Bank Indonesia Current accounts with other banks Placements with Bank Indonesia and other banks Securities purchased under agreement to resell Derivatives receivable Acceptances receivable Loans Securities Other assets - net

25.473.963

1.914.543

3.268.303

1.611.344

5.941.935

964.438

11.773.400

Total financial assets

(18.509.008)

(2.010.849)

(4.471.437)

(11.359.557)

(3.179.111) (661) (61.821)

(4.256) -

(2.621.955) (661) (49.565)

(552.900 ) (12.256)

(70.470) (964.950 )

(70.470) -

(22.786.021)

(2.085.575)

(7.143.618)

(11.924.713)

(171.032 )

(3.875.315)

(10.313.369)

2.687.942

-

-

e. Risiko Operasional

(499.555 )

(167.610 )

-

-

-

-

(499.555 ) 5.442.380

(167.610 ) 796.828

-


-

Deposits from other banks Derivatives payable Acceptances payable

(964.950 )

Accruals and other liabilities Subordinated Loan

(964.950 )

Total financial liabilities

10.808.450

Difference

e. Operational Risk

Risiko operasional adalah risiko yang disebabkan oleh antara lain ketidakcukupan dan/atau tidak berfungsinya proses internal, kesalahan manusia, kegagalan sistem atau adanya masalah eksternal yang mempengaruhi operasional Bank.

Operational Risk is the risk caused by among others by inadequacy and/or fair of internal processes, human error, system failure or external problems affecting the operations of the Bank.

Kebijakan dan prosedur yang terkait dengan pengelolaan risiko operasional termasuk kebijakan pengendalian minimum standar telah diterbitkan, ditelaah dan diperbaharui secara berkesinambungan untuk memastikan kecukupan mekanisme pengendalian pada semua kebijakan dan prosedur Bank. Bank secara aktif melakukan program sosialisasi untuk mengembangkan risk awareness dan meningkatkan pengendalian terhadap kualitas dalam rangka menurunkan tingkat risiko operasional.

The related policy and procedures for the management of operational risk including the standard minimum controls policies are issued, reviewed and improved continuously to ensure the adequacy of control mechanisms in all of the Bank’s policies and procedures. The Bank actively conducts the socialization program to develop risk awareness and quality control to mitigate the operational risk.

Dalam rangka memitigasi risiko operasional, Bank telah menyusun dan menerapkan kebijakan anti-fraud untuk meminimisasi potensi kecurangan (fraud), yang akan menyebabkan kerugian Bank, baik dikarenakan kecurangan eksternal maupun internal.

In order to mitigate operational risks, the Bank has developed and enforced anti-fraud policy to minimize potential of fraud, which led to the Bank’s losses, either caused by external or internal fraud.

65




DAN

3.

e. Risiko Operasional (lanjutan)


AND

e. Operational Risk (continued)

Selain itu, Bank telah mengembangkan sebuah Risk & Control Self Assessment (RCSA) sebagai tools identifikasi risiko operasional dan mitigasi risiko operasional. RCSA telah dilakukan untuk beberapa unit baik di cabang maupun di kantor pusat. Secara berkala RCSA akan senantiasa dipantau perkembangannya dan disempurnakan mengikuti perkembangan bisnis Bank. Selanjutnya RCSA akan dikembangkan ke seluruh unit kerja di Bank dan secara berkala diterapkan.

Beside that, Bank has developed Risk & Control Self Assessment (RCSA) as tools to identify and mitigate operational risk. RCSA has been conducted for number of units both in the branches as well as in the head office. RCSA development will be periodically monitored and improved following business development of the Bank. RCSA will also be developed across the Bank and periodically be implemented.

Business Continuity Management (BCM)

Business Continuity Management (BCM)

BCM adalah proses manajemen menyeluruh yang mengidentifikasikan dampak potensial yang mengancam organisasi dan menyediakan kerangka kerja untuk membangun ketahanan dan kemampuan dengan respon yang efektif yang menjaga kepentingan stakeholder, reputasi, brand dan aktivitas penciptaan nilai.

BCM is a holistic management process that identifies potential impacts that threaten an organization and provides a framework for building resilience and the capability to respond effectively safeguard the interests of the stakeholders, reputation, brand and value creating activities.

Sasaran dari penerapan BCM adalah untuk:

The goal of the application of BCM is to:

1.

Memastikan kelanjutan proses dari fungsi/unit yang kritikal sesuai dengan toleransi waktu yang telah ditetapkan saat terjadi krisis atau bencana;

1.

Ensure the continuing process of critical function/unit in accordance with a predetermined tolerance time during a crisis or disaster;

2.

Memastikan setiap fungsi/unit yang kritikal memiliki strategi pemulihan yang sesuai dan dapat diimplementasikan saat terjadi krisis atau bencana

2.

Ensure each critical function/unit has the appropriate recovery strategies and can be implemented during a crisis or disaster;

3.

Memastikan ketersediaan sumber daya manusia dan material yang dibutuhkan oleh bank dalam menjalankan bisnis saat terjadi krisis atau bencana;

3.

Ensure the availability of human and material resources required by the bank to continue run the business in the event of a crisis or disaster;

4.

Meningkatkan kesadaran karyawan untuk selalu siap dalam menghadapi kondisi krisis atau bencana;

4.

Increase awareness of employees to always be prepared to deal with a crisis situation or disaster;

5.

Menjaga sumber daya utama yang dibutuhkan dalam mendukung pemulihan aktivitas Bank;

5.

Keeping the main resources required to support the recovery of the Bank's activities;

6.

Mengurangi dampak terhadap layanan Bank;

6.

Reduce the impact on the Bank's services;

7.

Mengurangi risiko reputasi;

7.

Reducing the risk of reputation;

8.

Meningkatkan kepercayaan publik dan sistem keuangan makro;

8.

Improve public confidence and macro financial system;

9.

Meningkatkan ketahanan kemampuan pemulihannya; dan

9.

Increasing the resilience or recovery capability, and

atau

10. Maintain the existence of the Bank.

10. Menjaga eksistensi Bank.

66




DAN

3.

e. Risiko Operasional (lanjutan)


AND

e. Operational Risk (continued) The implementation of programs related to BCM at Bank involve all components and have the full support of management since the planning stage, the preparation, maintenance, supervision until perfected.

Penerapan program-program terkait BCM di Bank melibatkan seluruh komponen dan mendapat dukungan penuh dari manajemen sejak dari tahap perencanaan, penyusunan, pemeliharaan, pengawasan sampai penyempurnaannya. f. Manajemen Modal

f. Capital Management

Bank diwajibkan untuk mentaati Peraturan Otoritas Jasa Keuangan (“POJK”) yang berlaku dalam hal modal yang diwajibkan regulator. Pendekatan Bank terhadap pengelolaan modal ditentukan oleh strategi dan persyaratan organisasi Bank, dengan mempertimbangkan peraturan, serta keadaan ekonomi dan komersial.

The Bank is required to comply with prevailing Financial Service Authority Regulation (“POJK”) regulation in respect of regulatory capital. The Bank’s approach to capital management is driven by the Bank’s strategic and organizational requirements, taking into account the regulatory, economic and commercial environment.

Bank menghitung kebutuhan modal berdasarkan POJK yang berlaku dimana modal yang diwajibkan regulator Bank dianalisa dalam dua tier:

The Bank calculates its capital requirements using the prevailing POJK where the Bank’s regulatory capital is analyzed into two tiers:

•

Modal tier 1, meliputi modal ditempatkan dan disetor penuh,dana setoran modal, cadangan umum dan wajib, saldo laba (rugi) dan laba tahun berjalan, laba (rugi) tahun lalu, aset tak berwujud dan selisih kurang antara penyisihan penghapusan aset dan cadangan kerugian penurunan nilai atas aset produktif dan non produktif, aset pajak tangguan serta instrumen yang memenuhi persyaratan.

•

Tier 1 capital, which includes issued and fully paid share capital, disclosed reserve, general and legal reserve, retained earnings and profit (loss) for the year, profit (loss) from prior year, intagible assets, and difference between provision for loan losses and allowance for impairment losses for productive asset and non productive asset, deffered tax asset and instruments that fulfills terms.

•

Modal tier 2, meliputi instrumen modal dalam bentuk saham atau lainnya yang memenuhi persyaratan, cadangan umum aset produktif yang wajib dibentuk.

•

Tier 2 capital, which includes capital instruments in the form of shares or others that fulfills terms, provided provision for productive asset.

The Bank does not have any other supplementary capital which meets the criteria of tier 3 capital under prevailing POJK.

Bank tidak mempunyai modal tambahan lain yang memenuhi kriteria modal tier 3 sesuai dengan POJK yang berlaku. Berbagai batasan telah diterapkan untuk menentukan komponen modal yang diwajibkan oleh regulator. Pengaruh dari pajak tangguhan telah dikeluarkan dalam menentukan jumlah saldo laba untuk menghitung modal tier 1; 100 persen laba tahun berjalan sebelum aset pajak tangguhan yang dapat diperhitungkan dalam modal tier 1; dan modal tier 2 tidak boleh melebihi modal tier 1. Juga terdapat batasan jumlah cadangan umum aset produktif yang boleh dimasukkan sebagai bagian dari modal tier 2.

Various limits are applied to elements of the regulatory capital. The effect of deferred taxation has been excluded in determining the amount of retained earnings for tier 1 capital; 100 percent of the profit for the year before deferred taxation asset being included in tier 1 capital; and qualifying tier 2 capital cannot exceed tier 1 capital. There is also a restriction on the amount of general allowance for productive assets that may be included as part of tier 2 capital.

67




DAN

3.

f. Manajemen Modal (lanjutan)

FINANCIAL RISK MANAGEMENT CAPITAL MANAGEMENT (continued) f.

AND

Capital Management (continued)

Aset Tertimbang Menurut Risiko (“ATMR”) Bank ditentukan berdasarkan persyaratan yang telah ditentukan yang mencerminkan berbagai tingkatan risiko yang terkait dengan aset dan eksposur yang tidak tercermin dalam laporan posisi keuangan. Berdasarkan PBI, Bank diharuskan untuk mempertimbangkan risiko kredit, risiko pasar dan risiko operasional dalam mengukur ATMR Bank.

The Bank’s risk weighted assets (“RWA”) are determined according to specified requirements that seek to reflect the varying levels of risk attached to assets and exposures not recognized in the statement of financial position. Based on PBI, the Bank needs to take into consideration its credit risk, market risk and operational risk in measuring the RWA.

Kebijakan bank adalah menjaga modal yang kuat untuk menjaga kepercayaan pemodal, kreditur dan pasar dan untuk mempertahankan perkembangan bisnis di masa depan. Pengaruh tingkat modal terhadap tingkat pengembalian ke pemegang saham juga diperhitungkan dan Bank juga memahami perlunya menjaga keseimbangan antara tingkat pengembalian yang tinggi, yang dimungkinkan dengan gearing yang lebih besar serta keuntungan-keuntungan dan tingkat keamanan yang didapat dari posisi modal yang kuat.

The Bank’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The impact of the level of capital on shareholders’ return is also recognized and the Bank also recognizes the need to maintain a balance between the higher returns that might be possible with greater gearing and the advantages and security level afforded by a strong capital position.

Bank telah mematuhi semua persyaratan modal yang ditetapkan oleh pihak eksternal sepanjang tahun.

The Bank has complied with all externally imposed capital requirements throughout the year.

Tabel di bawah ini menunjukkan modal dan rasio kewajiban penyediaan modal minimum Bank masing-masing pada tanggal 31 Desember 2016 dan 2015 sebagai berikut:

The table below shows the Bank’s capital and capital adequacy ratio as of December 31, 2016 and 2015 are as follows:

2016 Modal tier 1 Modal tier 2 Total modal yang diwajibkan regulator Aset tertimbang menurut risiko Risiko kredit Risiko pasar Risiko operasional Total aset tertimbang menurut risiko Rasio kewajiban penyediaan modal untuk risiko kredit dan risiko operasional Rasio kewajiban penyediaan modal minimum untuk risiko kredit, pasar dan operasional Rasio kewajiban penyediaan modal minimum yang diwajibkan Rasio kewajiban penyediaan modal minimum yang diwajibkan menurut profil risiko

2015

3.185.137 136.167 3.321.304

2.086.745 1.138.543 3.225.288

19.002.657 8.179 1.171.272 20.182.108

19.203.194 8.534 719.834 19.931.562

Risk weighted assets Credit risk Market risk Operational risk Total risk weighted assets

16,46%

16.19%

Capital adequacy ratio for credit risk and operational risk

16,46%

16.18%

Capital adequacy ratio for credit risk, market risk and operational risk

8,00%

8.00%

Required capital adequacy ratio

9,00%

9,00%

Required capital adequacy ratio accordance with risk profile

68

Tier 1 capital Tier 2 capital Total regulatory capital




DAN

3.


f. Manajemen Modal (lanjutan)

f.

g. Saling hapus aset dan liabilitas keuangan

g. Offsetting financial asset and liabilities Information about rights of offset and related arrangements (such as collateral posting requirements) for financial instruments under and enforceable master netting agreements or similar arrangements disclosed in the following tables:

Informasi tentang hak untuk membukukan saling hapus dan perjanjian (seperti persyaratan jaminan) terkait instrumen keuangan yang memiliki perjanjian utama atau sejenis disajikan pada tabel berikut:

Aset keuangan yang diakui pada akhir periode pelaporan

4.

Capital Management (continued) Management uses regulatory capital ratios in order to monitor its capital base, and these capital ratios remain the industry standards for measuring capital adequacy. BI’s approach to such measurement is primarily based on monitoring the relationship of the capital resources requirement based on risk profile to available capital resources.

Manajemen menggunakan rasio modal yang diwajibkan regulator untuk memantau modal dan rasio-rasio modal ini tetap menjadi standar industri untuk mengukur kecukupan modal. Pendekatan BI untuk pengukuran ini terutama berdasarkan pemantauan terhadap hubungan antara modal yang diwajibkan berdasarkan profil risiko terhadap modal yang tersedia.

Nilai tercatat bruto (sebelum offsetting)/ Gross carrying amount (before offsetting)

AND

Nilai offset bruto sesuai dengan kriteria offsetting/ Gross amount offset in accordance with the offsetting criteria

Nilai neto yang disajikan di laporan posisi keuangan/ Net amount presented in the statement of financial position

Efek dari sisa hak untuk offset yang tidak memenuhi kriteria offset/ Effect of remaining rights of offset that do not meet offsetting criteria Nilai wajar Financial collateral/ Fair value of financial collateral

Instrumen keuangan/ Financial instruments

Nilai eksposur neto/ Net exposure

Financial Assets recognized at the end of reporting period

31 Desember 2016 Efek-efek yang dibeli dengan janji dijual kembali

471.350

-

471.350

-

472.599

-

December 31, 2016 Securities purchased under agreement to resell

31 Desember 2015 Efek-efek yang dibeli dengan janji dijual kembali

269.117

-

269.117

-

270.457

-

December 31, 2015 Securities purchased under agreement to resell

PENGGUNAAN PERTIMBANGAN

ESTIMASI

DAN

4.

USE OF ESTIMATES AND JUDGMENTS

Pengungkapan ini merupakan tambahan atas pembahasan tentang manajemen risiko keuangan (Catatan 3).

These disclosures supplement the commentary on financial risk management (Note 3).

a.

a.

Sumber utama atas ketidakpastian estimasi (i)

Key sources of estimation uncertainty (i)

Cadangan kerugian penurunan nilai aset keuangan

Allowances for financial assets

impairment

losses

of

Financial assets accounted for at amortized cost are evaluated for impairment on a basis described in Note 2o.

Evaluasi atas kerugian penurunan nilai aset keuangan yang dicatat pada biaya perolehan diamortisasi dijelaskan di Catatan 2o.

69



PENGGUNAAN ESTIMASI PERTIMBANGAN (lanjutan)


DAN

4. USE OF ESTIMATES (continued)

AND

JUDGMENTS

Pengungkapan ini merupakan tambahan atas pembahasan tentang manajemen risiko keuangan (Catatan 3). (lanjutan)

These disclosures supplement the commentary on financial risk management (Note 3). (continued)

a.

a.

Sumber utama atas ketidakpastian estimasi (lanjutan) (i)

Key sources (continued) (i)

Cadangan kerugian penurunan nilai aset keuangan (lanjutan)

of

estimation

Allowances for impairment financial assets (continued)

uncertainty losses

of

Cadangan kerugian penurunan nilai terkait dengan pihak lawan spesifik dalam seluruh cadangan kerugian penurunan nilai dibentuk atas tagihan yang penurunan nilainya dievaluasi secara individual berdasarkan estimasi terbaik manajemen atas nilai tunai arus kas yang diharapkan akan diterima. Dalam mengestimasi arus kas ini, manajemen membuat pertimbangan mengenai kondisi keuangan dari pihak lawan dan nilai bersih yang dapat direalisasi dari agunan yang diterima. Setiap aset yang mengalami penurunan nilai dievaluasi, dan strategi penyelesaiannya serta estimasi arus kas yang dinilai dapat diperoleh kembali secara independen disetujui oleh Departemen Kredit.

The specific counterparty component of the total allowances for impairment applies to claims evaluated individually for impairment and is based upon management’s best estimate of the present value of the cash flows that are expected to be received. In estimating these cash flows, management makes judgments about the counterparty’s financial situation and the net realizable value of any underlying collateral. Each impaired asset is assessed on its merits, and the workout strategy and estimate of cash flows considered recoverable are independently approved by the Credit Department.

Evaluasi cadangan kerugian penurunan nilai secara kolektif meliputi kerugian kredit yang melekat pada portofolio tagihan dengan karakteristik ekonomi yang serupa ketika terdapat bukti obyektif bahwa telah terjadi penurunan nilai tagihan dalam portofolio tersebut namun penurunan nilai secara individu belum dapat diidentifikasi. Dalam menentukan perlunya membentuk cadangan kerugian penurunan nilai kredit secara kolektif, manajemen mempertimbangkan faktor-faktor seperti kualitas kredit, besarnya portofolio, konsentrasi kredit dan faktor-faktor ekonomi.

Collectively assessed impairment allowances cover credit losses inherent in portfolios of claims with similar economic characteristics when there is objective evidence to suggest that they contain impaired claims, but the individual impaired items cannot yet be identified. In assessing the need for collective loan loss allowances, management considers factors such as credit quality, portfolio size, credit concentrations and economic factors.

Dalam mengestimasi cadangan yang dibutuhkan, asumsi-asumsi dibuat untuk menentukan model kerugian bawaan dan untuk menentukan parameter input yang diperlukan, berdasarkan pengalaman historis dan kondisi ekonomi saat ini. Ketepatan dari cadangan ini tergantung pada seberapa tepat estimasi arus kas masa depan untuk menentukan cadangan individual serta asumsi model dan parameter yang digunakan dalam menentukan cadangan kolektif.

In order to estimate the required allowance, assumptions are made to define the way inherent losses are modeled and to determine the required input parameters, based on historical experience and current economic conditions. The accuracy of the allowances depends on how well the estimated future cash flows are determined for specific counterparty allowances and the model assumptions and parameters used in determining collective allowances.

70




PENGGUNAAN ESTIMASI DAN PERTIMBANGAN (lanjutan) a. Sumber utama atas ketidakpastian estimasi (lanjutan)

4. USE OF ESTIMATES AND JUDGMENTS (continued) a. Key sources of estimation uncertainty (continued) (ii)

(ii) Penentuan nilai wajar

Determining fair values The determination of fair value for financial assets and liabilities for which there is no observable market price requires the use of valuation techniques as described in Note 2f. For financial instruments that trade infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgment depending on liquidity, concentration, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.

Dalam menentukan nilai wajar atas aset keuangan dan liabilitas keuangan dimana tidak terdapat harga pasar yang dapat diobservasi, Bank harus menggunakan teknik penilaian seperti dijelaskan pada Catatan 2f. Untuk instrumen keuangan yang jarang diperdagangkan dan tidak memiliki harga yang transparan, nilai wajarnya menjadi kurang obyektif dan karenanya, membutuhkan tingkat pertimbangan yang beragam, tergantung pada likuiditas, konsentrasi, ketidakpastian faktor pasar, asumsi penentuan harga dan risiko lainnya yang mempengaruhi instrumen tertentu. (iii) Liabilitas imbalan pasca-kerja Penentuan liabilitas imbalan pasca-kerja Bank bergantung pada pemilihan asumsi yang digunakan oleh aktuaris independen dalam menghitung jumlah-jumlah tersebut. Asumsi tersebut termasuk antara lain, tingkat diskonto, tingkat kenaikan gaji tahunan, tingkat pengunduran diri karyawan tahunan, tingkat kecacatan, umur pensiun dan tingkat kematian. (iv) Umur ekonomis dan metode depresiasi dari aset tetap

(iii)

(iv)

Obligation for post-employment benefits The determination of the Bank’s obligation for post-employment benefits is dependent on its selection of certain assumptions used by the independent actuaries in calculating such accounts. Those assumptions include among others, discount rates, annual salary increase rate, annual employee turn-over rate, disability rate, retirement age and mortality rate. Useful life and depreciation method of fixed assets

Manajemen Bank memperkirakan masa manfaat aset tetap berdasarkan periode dimana aset tetap diharapkan akan tersedia untuk digunakan. Masa manfaat ekonomis aset tetap ditinjau secara berkala dan diperbarui jika memiliki ekspektasi yang berbeda dari perkiraan sebelumnya, karena kerusakan secara fisik dan teknis, atau keusangan secara

The management of Bank estimates the useful lives of fixed assets based on the period over which the assets are expected to be available for use. The estimated useful lives of fixed assets are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence

Komersial dan legal atau batasan lainnya atas penggunaan aset tersebut. Selain hal tersebut, estimasi masa manfaat dari aset tetap didasarkan pada penilaian secara kolektif dengan menggunakan praktik industri, teknik evaluasi internal dan pengalaman dengan aset serupa. Tetap dimungkinkan, bagaimanapun, bahwa hasil masa depan dapat secara material dipengaruhi oleh perubahan estimasi yang disebabkan perubahan faktor-faktor tersebut di atas. Jumlah dan saat pencatatan biaya untuk setiap periode akan dipengaruhi oleh perubahan dari faktor dan keadaan saat pencatatan. Pengurangan dari taksiran masa manfaat dari aset tetap akan meningkatkan beban usaha.

Commercial and legal or other limits on the use of the assets. In addition, estimation of the useful lives of fixed assets is based on collective assessment of industry practice, internal technical evaluation and experience with similar assets. It is possible, however, that future results of operations could be materially affected by changes in estimates brought about by changes in the aforementioned factors mentioned. The amounts and timing of recorded expenses for any period are affected by changes of those factors and circumstances during recording. A reduction in the estimated useful lives of fixed assets increases the recorded operating expenses.

71



PENGGUNAAN ESTIMASI PERTIMBANGAN (lanjutan)


DAN


b. Pertimbangan akuntansi yang penting dalam menerapkan kebijakan akuntansi Bank

b.

AND

JUDGMENTS

Critical accounting judgments in applying the Bank’s accounting policies

Pertimbangan akuntansi yang penting dalam menerapkan kebijakan akuntansi Bank meliputi:

Critical accounting judgments made in applying the Bank’s accounting policies include:

(i)

(i) Fair value of financial instruments

Nilai wajar dari instrumen keuangan Kebijakan akuntansi Bank untuk pengukuran nilai wajar dibahas di Catatan 2f.

The Bank’s accounting policy on fair value measurements is discussed in Note 2f.

Bank mengukur nilai wajar dengan menggunakan hirarki dari metode berikut:

The Bank measures fair values using the following hierarchy of methods:

•

Tingkat 1: Harga kuotasi di pasar aktif untuk instrumen keuangan yang sejenis.

•

Level 1: Quoted market price in an active market for an identical instrument

•

Tingkat 2: Teknik penilaian berdasarkan input yang dapat diobservasi. Termasuk dalam kategori ini adalah instrumen keuangan yang dinilai dengan menggunakan harga kuotasi di pasar aktif untuk instrumen yang sejenis; harga kuotasi untuk instrumen keuangan yang sejenis di pasar yang kurang aktif; atau teknik penilaian lainnya dimana seluruh input signifikan yang digunakan dapat diobservasi secara langsung ataupun tidak langsung dari data yang tersedia di pasar.

•

Level 2: Valuation techniques based on observable inputs. This category includes instruments valued using quoted market prices in active markets for similar instruments; quoted prices for similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

•

Tingkat 3: Teknik penilaian menggunakan input signifikan yang tidak dapat diobservasi: instrumen keuangan dinilai menggunakan teknik penilaian dimana satu atau lebih input signifikan tidak dapat diobservasi. Kategori ini termasuk instrumen yang diukur berdasarkan harga kuotasi untuk instrumen serupa dimana penyesuaian atau asumsi signifikan yang tidak dapat diobservasi diperlukan untuk mencerminkan perbedaan di antara instrumen tersebut.

•

Level 3: Valuation techniques using significant unobservable inputs: financial instruments valued using valuation techniques where one or more significant inputs are unobservable. This category includes instrument that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

72



4.

PENGGUNAAN ESTIMASI PERTIMBANGAN (lanjutan) b.


DAN


Pertimbangan akuntansi yang penting dalam menerapkan kebijakan akuntansi Bank (lanjutan) (i)

b.

AND

JUDGMENTS

Critical accounting judgments in applying the Bank’s accounting policies (continued)

instrumen keuangan

(i) Fair value of financial instruments (continued)

Nilai wajar atas instrumen derivatif yang dinilai menggunakan teknik penilaian dengan menggunakan komponen yang dapat diamati di pasar terutama adalah swap suku bunga, swap mata uang dan kontrak pertukaran mata uang. Teknik penilaian yang paling banyak digunakan meliputi model penilaian forward dan swap yang menggunakan perhitungan nilai kini. Model tersebut menggabungkan berbagai komponen yang meliputi kualitas kredit dari counterparty, nilai spot dan kontrak berjangka serta kurva tingkat suku bunga.

The fair values of derivatives instrument valued by valuation techniques using components which can be observed in the market, primarily are interest rate swaps, currency swaps and currency exchange contracts. Most widely used valuation techniques include forward and swap valuation models which use the present value calculation. The models incorporate various components which include the credit quality of the counterparty, spot value and future contracts and interest rate curve.

Teknik penilaian termasuk model nilai tunai dan arus kas yang didiskontokan, dan perbandingan dengan instrumen yang sejenis dimana terdapat harga pasar yang dapat diobservasi. Asumsi dan input yang digunakan dalam teknik penilaian termasuk suku bunga bebas risiko (risk-free) dan suku bunga acuan, credit spread dan variabel lainnya yang digunakan dalam mengestimasi tingkat diskonto, harga obligasi, kurs valuta asing, serta tingkat kerentanan dan korelasi harga yang diharapkan. Tujuan dari teknik penilaian adalah penentuan nilai wajar yang mencerminkan harga dari instrumen keuangan pada tanggal pelaporan yang akan ditentukan oleh para partisipan di pasar dalam suatu transaksi yang wajar.

Valuation techniques include net present value and discounted cash flow models, and comparison to similar instruments for which market observable prices exist. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads and other variables used in estimating discount rates, bond prices, foreign currency exchange rates, and expected price volatilities and correlations. The objective of valuation technique is to arrive at a fair value determination that reflects the price of the financial instrument at the reporting date that would have been determined by market participants acting at arm’s length.

Pada tanggal 31 Desember 2016 dan 2015, pengukuran Bank atas nilai wajar aset keuangan dan liabilitas keuangan yaitu, aset keuangan dan liabilitas keuangan untuk diperdagangkan, dan efek-efek yang tersedia untuk dijual dikategorikan sebagai tingkat 1 dalam hirarki nilai wajar.

As of December 31, 2016 and 2015, the Bank’s measurement of fair value of financial assets and financial liabilities, i.e. financial assets and financial liabilities held for trading, and available-for-sale securities was categorized as level 1 in the fair value hierarchy.

Nilai wajar dari (lanjutan)

73



PENGGUNAAN ESTIMASI PERTIMBANGAN (lanjutan) b.


DAN


Pertimbangan akuntansi yang penting dalam menerapkan kebijakan akuntansi Bank (lanjutan)

b.

AND

JUDGMENTS

Critical accounting judgments in applying the Bank’s accounting policies (continued) (ii) Financial asset and liability classification

(ii) Klasifikasi aset dan liabilitas keuangan Kebijakan akuntansi Bank memberikan keleluasaan untuk menetapkan aset dan liabilitas keuangan ke dalam berbagai kategori pada saat pengakuan awal sesuai dengan standar akuntansi yang berlaku berdasarkan kondisi tertentu.

The Bank’s accounting policies provide scope for financial assets and liabilities to be designated on inception into different accounting categories in certain circumstances.

•

Dalam mengklasifikasikan aset keuangan dalam kelompok “tersedia untuk dijual”, Bank telah menetapkan bahwa aset tersebut sesuai dengan definisi aset dalam kelompok “tersedia untuk dijual” yang dijabarkan di Catatan 2f.

•

In classifying financial assets as “available for sale”, the Bank has determined that it meets the description of “available for sale” assets set out in Note 2f.

•

Dalam mengklasifikasikan aset keuangan sebagai “dimiliki hingga jatuh tempo”, Bank telah menetapkan bahwa Bank memiliki intensi positif dan kemampuan untuk memiliki aset tersebut hingga tanggal jatuh tempo seperti yang dipersyaratkan (Catatan 2f).

•

In classifying financial assets as “heldto-maturity”, the Bank has determined that it has both the positive intention and alibility to hold the assets until their maturity date as required (Note 2f).

(iii) Operating leases

(iii) Sewa operasi Bank, sebagai lessee, telah mengadakan perjanjian sewa untuk bangunan yang digunakannya untuk operasi. Bank telah menentukan bahwa semua risiko dan manfaat signifikan dari kepemilikan properti yang disewa dalam sewa operasi tersebut tidak dapat dialihkan kepada Bank.

The Bank, as lessee, has entered into lease on premises it uses for its operations. The Bank has determined that all significant risks and rewards of ownerships of the properties it leases on operating lease are not transferrable to the Bank.

74




KAS

5. CASH 31 Desember/December 31 2016

Rupiah Valuta asing Dolar Amerika Serikat Dolar Singapura Riyal Qatar Yen Jepang Poundsterling Inggris Euro Eropa Dolar Australia Total

2015 46.344

40.239

Rupiah

3.857 688 351 17 3

4.221 112 213 144 68 282 153

Foreign currencies United States Dollar Singapore Dollar Qatari Riyal Japanese Yen Great Britain Poundsterling European Euro Australian Dollar

51.260

45.432

Total

Total cash in Rupiah currency includes cash amount in ATMs amounted to Rp5,442 and Rp5,528 as of December 31, 2016 and 2015, respectively.

Saldo kas dalam mata uang Rupiah termasuk jumlah kas pada ATM masing-masing sebesar Rp5.442 dan Rp5.528 pada tanggal-tanggal 31 Desember 2016 dan 2015. 6.

GIRO PADA BANK INDONESIA

6. CURRENT ACCOUNTS WITH BANK INDONESIA 31 Desember/December 31 2016

2015

Rupiah Dolar Amerika Serikat

1.164.926 470.190

987.235 723.712

Rupiah United States Dollar

Total

1.635.116

1.710.947

Total

Pada tanggal 31 Desember 2016 dan 2015, Giro Wajib Minimum (“GWM”) Bank masing-masing sebesar 13,73% dan 12,16% untuk mata uang Rupiah serta sebesar 8,37% dan 8,54% untuk valuta asing.

As of December 31, 2016 and 2015, the minimum reserve requirements (“GWM”) of the Bank were 13.73% and 12.16% for Rupiah currency, and 8.37% and 8.54% for foreign currency, respectively.

Giro Wajib Minimum Bank dalam Rupiah pada tanggal 31 Desember 2016 dan 2015 terdiri dari GWM Primer masing-masing sebesar 7,24% dan 7,59% dengan menggunakan saldo rekening giro Rupiah pada Bank Indonesia, dan GWM Sekunder masing-masing sebesar 6,49% dan 4,57% dengan menggunakan Sertifikat Bank Indonesia dan obligasi pemerintah.

The minimum reserve requirement of the Bank for Rupiah currency as of December 31, 2016 and 2015 is consist of primary GWM of 7.24% and 7.59%, respectively, through current accounts with Bank Indonesia in Rupiah, and secondary GWM of 6.49% and 4.57%, respectively, through Certificates of Bank Indonesia and government bonds.

Pada tanggal 31 Desember 2016, Bank telah memenuhi ketentuan Peraturan Bank Indonesia No.18/14/PBI/2016 tentang perubahan keempat atas PBI No. 15/15/PBI/2013 tentang Giro Wajib Minimum Bank Umum Dalam Rupiah dan Valuta Asing Bagi Bank Umum Konvensional dimana Pemenuhan GWM Primer rupiah dan valuta asing masing-masing sebesar 6,5% dan 8% dari rata-rata DPK, sedangkan GWM Sekunder sebesar 4% dari rata-rata DPK dengan batas bawah LFR target sebesar 80%.

As December 31, 2016, the Bank has fulfilled Bank Indonesia’s regulation No. 18/14/PBI/2016 regarding the fourth amendment of PBI No. 15/15/PBI/2013 about Minimum Reserve Requirement of Commercial Bank in Rupiah and forein currencies for Conventional Bank Which the fulfillment Primary GWM for rupiah and foreign currencies were 6,5% and 8% from average of third party fund,and GWM Secondary at 4% from average of third party fund with below limit of LFR target amounted 80%.

75



6.

7.


GIRO PADA BANK INDONESIA (lanjutan)

6. CURRENT ACCOUNTS WITH BANK INDONESIA (continue)

Pada tangal 31 Desember 2015, Bank telah memenuhi ketentuan Bank Indonesia No.17/21/PBI/2015 tentang perubaan kedua atas PBI No. 15/15/PBI/2013 Tentang Giro Wajib Minimum Bank Umum Dalam Rupiah dan Valuta Asing Bagi Bank Umum Konvensional dimana pemenuhan GWM Primer Rupiah dan Valuta Asing masing-masing sebesar 7,5% dan 8% dari rata-rata DPK, sedangkan GWM Sekunder sebesar 4% dari rata-rata DPK.

As of December 31, 2015, the Bank has fulfilled Bank Indonesia regulation No. 17/21/PBI/2015 regarding the second amendment of PBI No. 15/15/PBI/2013 about Minimum Reserve Requirement of Commercial Bank in Rupiah and foreign currencies were 7,5% and 8% from average of third party fund, and GWM secondary at 4% from average of third party fund.

Informasi mengenai klasifikasi dan nilai wajar giro pada Bank Indonesia diungkapan pada Catatan 34.

Information regarding the classification and fair value of current accounts with Bank Indonesia is disclosed in Note 34.

GIRO PADA BANK-BANK LAIN

7. CURRENT ACCOUNTS WITH OTHER BANKS 31 Desember/December 31 2016

2015

Rupiah Pihak ketiga PT Bank Mandiri (Persero) Tbk Standard Chartered Bank - Jakarta PT Bank Central Asia Tbk

294 25 22

869 25 22

Rupiah Third parties PT Bank Mandiri (Persero) Tbk Standard Chartered Bank - Jakarta PT Bank Central Asia Tbk

Total - Rupiah

341

916

Total - Rupiah

Valuta asing Pihak berelasi Qatar National Bank SAQ - Qatar Pihak ketiga Standard Chartered Bank - New York PT Bank Mandiri ( Persero) Tbk Bank Mizuho Ltd. Tokyo PT Bank Central Asia Tbk Deutsche Bank AG - Frankfurt JP Morgan Chase Bank - New York Wells Fargo Bank N.A - Amerika Standard Chartered Bank - London Standard Chartered Bank - Singapura ANZ Banking Group Ltd. - Australia Deutsche Bank Trust Company Americas - New York United Overseas Bank Ltd. - Hong Kong United Overseas Bank Ltd. - Singapura Bank Bangkok - Jakarta Zurcher Katonal Bank - Swiss ANZ Banking Group Ltd. - Selandia Baru Sumitomo Mitsui Banking Corporation Jepang

-

1.050

Foreign currencies Related party Qatar National Bank SAQ - Qatar Third parties Standard Chartered Bank - New York PT Bank Mandiri (Persero) Tbk Bank Mizuho Ltd. Tokyo PT Bank Central Asia Tbk Deutsche Bank AG - Frankfurt JP Morgan Chase Bank - New York Wells Fargo Bank - America Standard Chartered Bank - London Standard Chartered Bank - Singapore ANZ Banking Group Ltd. - Australia Deutsche Bank Trust Company Americas - New York United Overseas Bank Ltd. - Hong Kong United Overseas Bank Ltd. - Singapore Bangkok Bank - Jakarta Zurcher Katonal Bank - Swiss ANZ Banking Group Ltd. - New Zealand Sumitomo Mitsui Banking Corporation Japan

Total - Valuta asing

80.474

30.230

Total - Foreign currencies

Total giro pada bank-bank lain

80.815

31.146

Total current accounts with other banks

193

172

39.544 18.707 5.820 2.713 2.340 2.193 1.927 1.747 1.424 1.138

7.097 7.918 814 1.162 444 1.500 1.932 2.102 1.541 1.843

1.101 510 478 439 154 46

470 431 957 498 172 127

As of December 31, 2016 and 2015, all current accounts with other banks were not impaired.

Pada tanggal 31 Desember 2016 dan 2015, seluruh giro pada bank-bank lain tidak mengalami penurunan nilai.

76



8.


GIRO PADA BANK-BANK LAIN (lanjutan)

7.

CURRENT ACCOUNTS WITH OTHER BANKS (continued)

Manajemen Bank berkeyakinan bahwa tidak ada cadangan kerugian penurunan nilai giro pada bankbank lain yang perlu dibentuk pada tanggal-tanggal 31 Desember 2016 dan 2015.

The Bank’s management believes that no allowance for impairment losses on current accounts with other banks should be provided as of December 31, 2016 and 2015.

Pada tanggal 31 Desember 2016 dan 2015, tidak ada giro pada bank-bank lain yang dijadikan jaminan.

As of December 31, 2016 and 2015, there were no current accounts with other banks pledged as collateral.

Informasi mengenai klasifikasi dan nilai wajar giro pada bank-bank lain diungkapkan pada Catatan 34. Giro pada pihak berelasi diungkapkan pada Catatan 36.

Information regarding the classification and fair value of current accounts with other banks is disclosed in Note 34. Current accounts with related parties are disclosed in Note 36.

Informasi mengenai giro pada bank-bank lain berdasarkan jenis mata uang diungkapkan pada Catatan 38.

Information regarding the currency type of current accounts with other banks is disclosed in Note 38.

PENEMPATAN PADA BANK INDONESIA DAN BANK LAIN

8.

PLACEMENTS WITH BANK INDONESIA AND OTHER BANK The details of placements with Bank Indonesia and other bank are as follows:

Rincian penempatan pada Bank Indonesia dan bank lain adalah sebagai berikut:

31 Desember/December 31 2016

2015

Rupiah Pihak ketiga Bank Indonesia

343.924

683.687

Rupiah Third party Bank Indonesia

Total - Rupiah

343.924

683.687

Total - Rupiah

Valuta asing Pihak ketiga Bank Indonesia Wells Fargo Bank

1.886.150 -

1.419.855 8.271

Foreign currencies Third party Bank Indonesia Wells Fargo Bank


1.886.150

1.428.126


Total Penempatan pada Bank Indonesia dan bank lain

2.230.074

2.111.813

Total Placements with Bank Indonesia and other bank

The term of placements with Bank Indonesia and other bank are as follows:

Jangka waktu penempatan pada Bank Indonesia dan bank lain adalah sebagai berikut:


2015

Rupiah Bank Indonesia

3 hari/days

7 hari/days

Rupiah Bank Indonesia

Valuta asing Bank Indonesia Call money

4 hari/days -

7 hari/days 1 hari/day

Foreign currencies Bank Indonesia Call money

As of December 31, 2016 and 2015, all placements with Bank Indonesia and other bank were not impaired.

Pada tanggal 31 Desember 2016 dan 2015, seluruh penempatan pada Bank Indonesia dan bank lain tidak mengalami penurunan nilai.

77



8.

9.


PENEMPATAN PADA BANK INDONESIA DAN BANK LAIN (lanjutan)

8. PLACEMENTS WITH BANK INDONESIA AND OTHER BANK (continued)

Manajemen Bank berkeyakinan bahwa tidak ada cadangan kerugian penurunan nilai penempatan pada bank-bank lain yang perlu dibentuk pada tanggal 31 Desember 2016 dan 2015.

The Bank’s management believes that no allowance for impairment losses on placements with other banks should be provided as of December 31, 2016 and 2015.

Informasi mengenai suku bunga penempatan pada Bank Indonesia dan bank lain diungkapkan pada Catatan 3c. Informasi mengenai jatuh tempo penempatan pada Bank Indonesia dan bank lain diungkapkan pada Catatan 3d. Informasi mengenai klasifikasi dan nilai wajar penempatan pada Bank Indonesia dan bank lain diungkapkan pada Catatan 34.

Information in respect of interest rate of placements with Bank Indonesia and other bank is disclosed in Note 3c. Information in respect of maturities of placements with Bank Indonesia and other bank is disclosed in Note 3d. Information regarding the classification and fair value of placements with Bank Indonesia and other bank is disclosed in Note 34.

TAGIHAN DAN LIABILITAS DERIVATIF

9. DERIVATIVES RECEIVABLE AND PAYABLE As of December 31, 2016 and 2015, derivatives receivable and payable were as follows

Pada tanggal 31 Desember 2016 dan 2015, tagihan dan liabilitas derivatif adalah sebagai berikut: 2016 Tagihan Derivatif/ Derivatives Receivable

2015 Liabilitas Derivatif/ Derivatives Payable

Tagihan Derivatif/ Derivatives Receivable

Liabilitas Derivatif/ Derivatives Payable

Kontrak berjangka Valuta asing Bank

550

12.890

2.921

661

Total

550

12.890

2.921

661

Currency forward contract Banks Total

Pada tanggal 31 Desember 2016 dan 2015, semua tagihan derivatif dan liabilitas derivatif merupakan transaksi dengan pihak ketiga.

As of December 31, 2016 and 2015, all derivatives receivable and payable were made with third parties.

Pada tanggal 31 Desember 2016 dan 2015, nilai kontrak dan rata-rata jangka waktu kontrak berjangka valuta asing adalah sebagai berikut:

As of December 31, 2016 and 2015, the contract amount and average contract period of currency forward contracts are as follows:


Jenis valuta/ Currency

Kontrak pembelian berjangka valuta asing

Kontrak penjualan berjangka valuta asing

Nilai kontrak (dalam valuta asal)/ Contract amount (in original currency)

USD AUD GBP EUR

340.500.000 1.612.974 823.488 1.262.998

USD

610.000

78

Rentang tanggal jatuh tempo/ Range of maturity date

3 Januari - 23 Januari 2017/ January 3 - January 23, 2017 5 Januari 2017/January 5 , 2017 13 Januari 2017/January 13, 2017 5 Januari 2017/January 5, 2017

Currency forward purchase contracts

9 Januari - 16 Februari 2017/ January 9 - February 16, 2017

Currency forward selling contracts




TAGIHAN DAN LIABILITAS DERIVATIF (lanjutan)

9. DERIVATIVES RECEIVABLE AND PAYABLE (continued)


Jenis valuta/ Currency

Kontrak pembelian berjangka valuta asing

Kontrak penjualan berjangka valuta asing

Nilai kontrak (dalam valuta asal)/ Contract amount (in original currency)

USD AUD GBP EUR

7.700.00 1.862.280 976.068 1.974.783

6 January 2016/January 6, 2016 8 Januari 2016/January 8, 2016 8 Januari 2016/January 8, 2016 14 Januari 2016/January 14, 2016

Currency forward purchase contracts

USD EUR

26.490.000 434.194

4 Januari - 2 Maret 2016/ January 4 - March 2, 2016 14 Januari 2016/January 14, 2016

Currency forward selling contracts

10. TAGIHAN DAN LIABILITAS AKSEPTASI a.


10. ACCEPTANCES PAYABLE a.

Tagihan akseptasi:

RECEIVABLE

AND

Acceptances receivable:

31 Desember/December 31 2016 Valuta Asing Pihak berelasi Bank Pihak ketiga Bank

2015

22.193

36.826

Foreign Currencies Related party Banks Third parties Banks

22.193

61.821

Total

−

Total

24.995

The Bank’s management believes that no allowance for impairment losses on acceptance receivable should be provided as of December 31, 2016 and 2015.

Manajemen Bank berkeyakinan bahwa tidak ada cadangan kerugian penurunan nilai tagihan akseptasi yang perlu dibentuk pada tanggal 31 Desember 2016 dan 2015. b.

b.

Liabilitas akseptasi:

Acceptances payable:


2015

Valuta Asing Pihak berelasi Bank Pihak ketiga Bank

22.193

36.826

Foreign Currencies Related party Banks Third party Banks

Total

22.193

61.821

Total

−

24.995

Information in respect of maturities were disclosed in Note 3d. Information with regards to the classification and fair value were disclosed in Note 34.

Informasi mengenai jatuh tempo diungkapkan pada Catatan 3d. Informasi mengenai klasifikasi dan nilai wajar diungkapkan pada Catatan 34. 11. EFEK-EFEK YANG DIBELI DENGAN JANJI DIJUAL KEMBALI

11.

SECURITIES PURCHASED AGREEMENT TO RESELL

UNDER

31 Desember/December 31, 2016 Rentang tanggal pembelian/ Range of purchase date

Rentang tanggal Harga penjualan kembali/ penjualan Range of kembali/ resale date Resale price

Pendapatan bunga yang belum diakui/ Unearned interest

Nilai tercatat/ Carrying amount

Transaksi dengan Bank Indonesia, pihak ketiga Rupiah

Surat utang negara

Transactions with Bank Indonesia, third party Rupiah 21 Desember/ December 21, 2016

4 - 17 Januari/ January 4 -17, 2017

472.599

79

(1.249)

471.350

Government promissory notes




11. EFEK-EFEK YANG DIBELI DENGAN JANJI DIJUAL KEMBALI (lanjutan)

11.

SECURITIES PURCHASED UNDER AGREEMENT TO RESELL (continued)

31 Desember/December 31, 2015 Rentang tanggal pembelian/ Range of purchase date

Pendapatan bunga yang belum diakui/ Unearned interest

Rentang tanggal Harga penjualan kembali/ penjualan Range of kembali/ resale date Resale price

Nilai tercatat/ Carrying amount

Transaksi dengan Bank Indonesia, pihak ketiga Rupiah

Surat utang negara

Transactions with Bank Indonesia, third party Rupiah 10 - 11 Desember/ December 10 - 11, 2015

7 - 8 Januari/ January 7 - 8, 2016

270.457

(1.340)

269.117

Government promissory notes

Manajemen Bank berkeyakinan bahwa tidak ada cadangan kerugian penurunan nilai efek-efek yang dibeli dengan janji dijual kembali yang perlu dibentuk pada tanggal 31 Desember 2016 dan 2015.

The Bank’s management believes that no allowance for impairment losses on securities purchased under agreement to resell should be provided as of December 31, 2016 and 2015.

Informasi mengenai suku bunga efek-efek yang dibeli dengan janji dijual kembali diungkapkan pada Catatan 3c. Informasi mengenai jatuh tempo efekefek yang dibeli dengan janji dijual kembali diungkapkan pada Catatan 3d. Informasi mengenai klasifikasi dan nilai wajar efek-efek yang dibeli dengan janji dijual kembali diungkapkan pada Catatan 34.

Information in respect of interest rate of securities purchased under agreement to resell is disclosed in Note 3c. Information in respect of maturities of securitirs purchased under agreement to resell is disclosed in Note 3d. Information regarding the classification and fair value of securities purchased under agreement to resell is disclosed in Note 34.

12. KREDIT YANG DIBERIKAN a.

12.

LOANS a.

Berdasarkan jenis dan valuta

By type and currency


2015

Rupiah Investasi Modal kerja Konsumsi Karyawan Sindikasi

5.733.142 4.913.214 531.321 36.195 32.503

6.640.386 6.334.595 462.890 48.845 29.003

Rupiah Investment Working capital Consumer Employee loans Syndication

Total - Rupiah

11.246.375

13.515.719

Total - Rupiah

Valuta asing Sindikasi Modal kerja Investasi

3.194.847 1.991.943 1.854.749

2.967.146 2.300.614 2.046.565

Foreign currencies Syndication Working capital Investment


7.041.539

7.314.325


Total kredit yang diberikan Cadangan kerugian penurunan nilai

18.287.914 (736.726)

20.830.044 (41.740)

Total kredit yang diberikan - neto

17.551.188

20.788.304

80

Total loans Allowance for impairment losses Total loans - net




12. KREDIT YANG DIBERIKAN (lanjutan) b.

12.

LOANS (continued) b.

Berdasarkan sektor ekonomi

By economic sectors

31 Desember/December 31 2016 Rupiah Perdagangan, restoran dan hotel Jasa usaha Manufaktur Konstruksi Listrik, gas dan air Pengangkutan, pergudangan dan komunikasi Jasa sosial masyarakat Pertambangan Pertanian, perkebunan, dan sarana perkebunan Lain-lain

Rupiah Trading, restaurant and hotels Business services Manufacturing Constructions Electricity, gas and water ) Transportation, warehousing and communication Social and public services Mining Agriculture, plantation, and plantation equipments Others

3.230.859 2.718.376 1.897.688 1.152.594 618.938

4.221.216 3.195.487 2.132.744 1.251.837 831.334

571.397 377.091 64.771

879.426 407.475 23.373

47.145 567.516

60.770 512.057

11.246.375

13.515.719

2.061.992 1.171.213 999.110 762.884

2.526.596 1.690.680 938.833 385.980

700.971 606.035

68.925 827.839

561.986 177.348

703.619 171.853

Total - Rupiah Foreign currencies Manufacturing Business services Trading, restaurant and hotels Construction Agriculture, plantation, and plantation equipments Mining Transportation, warehousing and communication Social and public services

7.041.539

7.314.325



18.287.914 (736.726)

20.830.044 (41.740)


17.551.188

20.788.304

Total - Rupiah Valuta asing Manufaktur Jasa usaha Perdagangan, restoran dan hotel Konstruksi Pertanian, perkebunan, dan sarana perkebunan Pertambangan Pengangkutan, pergudangan dan komunikasi Jasa sosial masyarakat Total - Valuta asing

c.

2015


c. By maturity

Berdasarkan periode jatuh tempo

Based on the term of loan agreements:

Berdasarkan periode perjanjian kredit:


2015

Rupiah ≤ 1 tahun > 1 - 3 tahun > 3 - 5 tahun > 5 tahun

3.806.918 844.355 1.302.722 5.292.380

2.594.575 3.513.920 1.648.269 5.758.955

Rupiah ≤ 1 year ) > 1 - 3 years > 3 - 5 years > 5 years

Total - Rupiah

11.246.375

13.515.719

Total - Rupiah

Valuta asing ≤ 1 tahun > 1 - 3 tahun > 3 - 5 tahun > 5 tahun

1.538.732 801.494 335.892 4.365.421

1.130.231 1.677.880 596.666 3.909.548

Foreign currencies ≤ 1 year > 1 - 3 years > 3 - 5 years > 5 years Total - Foreign currencies


7.041.539

7.314.325


18.287.914 (736.726)

20.830.044 (41.740)


17.551.188

20.788.304

81





12. KREDIT YANG DIBERIKAN (lanjutan)

12.

LOANS (continued)

Kredit dijamin dengan agunan yang diikat dengan akta pemberian hak tanggungan, jaminan lain atau aset yang umumnya diterima oleh bank, antara lain deposito berjangka, giro, kendaraan bermotor, tanah dan bangunan.

d. The loans are secured by collaterals which are legalized by deed of encumbrance, other guarantees or assets that are generally accepted in the banking industry, such as time deposits, Currents accounts, motor vehicles, land and buildings.

Pada tanggal 31 Desember 2016 dan 2015, jumlah kredit yang dijaminkan dengan jaminan tunai (back to back loans) adalah masingmasing sebesar Rp1.322.209 dan Rp1.359.063.

As of December 31, 2016 and 2015, total loans secured by cash collateral (back to back loans) amounted to Rp1,322,209 and Rp1,359,063, respectively.

e.

Kredit modal kerja dan investasi diberikan kepada debitur untuk kepentingan modal kerja dan pembelian barang modal. Kredit modal kerja mencakup kredit dalam bentuk rekening koran.

e. Working capital loans and investment loans were granted to customers for working capital and purchase of capital goods. Working capital loans include current account.

f.

Kredit konsumsi terdiri dari kredit pemilikan rumah, kredit pemilikan kendaraan bermotor dan kredit perorangan lainnya.

f. Consumer loans consist of housing, motor vehicles ownership loans and other personal loans.

g.

Pada tanggal 31 Desember 2016 dan 2015, rasio kredit usaha kecil terhadap jumlah kredit yang diberikan adalah masing-masing sebesar 0,07% dan 0,17%.

g. As of December 31, 2016 and 2015, the ratio of small business loans to total loans is 0.07% and 0.17%, respectively.

h. Kredit sindikasi merupakan kredit yang diberikan kepada nasabah berdasarkan perjanjian pembiayaan bersama dengan bankbank lain. Partisipasi Bank dalam kredit sindikasi dengan bank-bank lain pada tanggal 31 Desember 2016 dan 2015 masing-masing sebesar Rp3.227.350 dan Rp2.996.149 atau 17,65% dan 20,58% dari saldo kredit sindikasi. Bank berperan sebagai pimpinan dan partisipan dalam kredit sindikasi tersebut.

h. Syndicated loans represent loans provided to borrowers under a syndication agreement with other banks. The Bank’s participation in syndicated loans with other banks as of December 31, 2016 and 2015 amounted to Rp3,227,350 and Rp2,996,149 or 17.65% and 20.58% of syndicated loans balance, respectively. The bank acted as arranger and participant in the said syndicated loans.

d.

i.

i.

Kredit yang diberikan kepada karyawan Bank digunakan untuk keperluan pinjaman atas pembelian rumah, kendaraan, dan keperluan lainnya dengan jangka waktu jatuh tempo berkisar antara 1 sampai 15 tahun, yang dikenakan bunga berkisar antara 0% sampai 8% per tahun. Kredit tersebut akan dilunasi melalui pemotongan gaji setiap bulan. Jumlah kredit yang diberikan kepada karyawan masing-masing sebesar Rp36.195 dan Rp48.845 atau 0,20% dan 0,23% dari jumlah kredit yang diberikan pada tanggal-tanggal 31 Desember 2016 dan 2015.

82

The loans given to the Bank’s employees are used for purchase of houses, cars and other personal necessities with maturities ranging from 1 to 15 years, with interest rates ranging from 0% to 8% per annum. These loans will be settled through their monthly salary deductions. The loans to the employees amounted to Rp36,195 and Rp48,845 or represented 0.20% and 0.23% of total loans as of December 31, 2016 and 2015, respectively.





12.

LOANS (continued)

j.

Restrukturisasi kredit dilakukan melalui modifikasi persyaratan jumlah pokok dan bunga dan perpanjangan jangka waktu kredit. Pada tanggal-tanggal 31 Desember 2016 dan 2015, kredit yang direstrukturisasi masingmasing sebesar Rp3.730.867 atau 20,40% dan Rp2.071.171 atau 9,94% dari jumlah kredit yang diberikan, dengan cadangan kerugian penurunan nilai masing-masing sebesar Rp206.334 dan Rp16.872. Dari kredit yang direstrukturisasi tersebut, Bank tidak memiliki komitmen untuk memberikan fasilitas kredit tambahan.

j.

Loans restructuring was conducted through modification of terms of principal and interest and extension of terms. As of December 31, 2016 and 2015, restructured loans amounted to Rp3,730,867 or 20.40% and Rp2,071,171 or 9.94% of total loans, respectively, with the respective allowance for impairment losses amounted to Rp206,334 and Rp16,872. From the restructured loans, the Bank did not have any commitments to extend additional loan facilities.

k.

Pada tanggal 31 Desember 2016 dan 2015, Bank telah memenuhi ketentuan Batas Maksimum Pemberian Kredit (“BMPK”), baik untuk pihak berelasi maupun untuk pihak ketiga.

k.

As of December 31, 2016 and 2015, the Bank complied with the Legal Lending Limit (“LLL”) requirements for both related parties and third parties.

l.

Pada tanggal 31 Desember 2016 dan 2015, rincian kredit bermasalah (klasifikasi kurang lancar, diragukan dan macet menurut peraturan Bank Indonesia) menurut sektor ekonomi adalah sebagai berikut:

l.

As of December 31, 2016 and 2015, details of non-performing loans (substandard, doubtful and loss grading based on Bank Indonesia regulation) based on economic sector are as follows:


Kredit bermasalah/ Non-performing loans Manufaktur Konstruksi Perdagangan, restoran dan hotel Pengangkutan, pergudangan dan komunikasi Jasa Usaha Jasa sosial masyarakat Pertanian, perkebunan dan sarana perkebunan Pertambangan Lain-lain Total

2015


Kredit bermasalah/ Non-performing loans


376.559 332.604 298.757

(145.824) (297.675) (136.647)

161.024 226.881 43.187

(20.039) (2.483) (8.742)

73.925 54.451 40.547

(24.805) (50.183) (11.005)

8.320 3.189

(13) (1.762)

5.732

(3.906)

71.171

(45.634)

6.517 2.857 87.132

(1.423) (389) (5.566)

Manufacturing Construction Trading, restaurant and hotels Transportation, warehousing and communicaton Business Service Social and public services Agriculture, plantation and plantation improvement Mining Others

(715.679)

539.107

(40.417)

Total

1.253.746

m. As of December 31, 2016 and 2015, the nonperforming loan (“NPL”) ratio based on prevailing Bank Indonesia regulation are as follows:

m. Pada tanggal 31 Desember 2016 dan 2015, rasio non-performing loan (“NPL”) sesuai dengan peraturan Bank Indonesia yang berlaku adalah sebagai berikut:

31 Desember/December 31 2016 NPL bruto NPL neto

2015 6,86% 2,94%

83

2,59% 2,40%

Gross NPL Net NPL





12.

LOANS (continued)

Bank mengadakan perjanjian fasilitas kredit penerusan, kredit pembiayaan bersama serta perjanjian pengambilalihan piutang dengan beberapa lembaga pembiayaan untuk membiayai kepemilikan kendaraan bermotor. Jumlah saldo fasilitas kredit penerusan, kredit pembiayaan bersama, serta kredit yang diambil alih dengan skema tanpa tanggung renteng pada tanggal 31 Desember 2016 dan 2015 adalah masing-masing sebesar Rp25.835 dan Rp178.678, yang termasuk dalam kredit konsumsi.

n.

The Bank has entered into chanelling loan, joint financing and receivables purchase agreements with several multifinance companies for financing retail purchases of vehicles. The outstanding balance of chanelling loans, joint financing loans and receivables purchased under without recourse scheme as of December 31, 2016 and 2015 is amounted to Rp25,835 and Rp178,678, respectively, which was included in consumer loans.

o. Perubahan cadangan kerugian penurunan nilai kredit yang diberikan selama tahun berjalan adalah sebagai berikut:

o.

The changes in allowance for impairment losses on loans during the year are as follows:

n.

31 Desember/December 31 2016 Cadangan kerugian penurunan nilai kolektif: Saldo, awal tahun Penyisihan kerugian penurunan nilai selama tahun berjalan Penghapusbukuan Selisih kurs karena penjabaran mata uang asing Saldo, akhir tahun Cadangan kerugian penurunan nilai individual: Saldo, awal tahun Penyisihan kerugian penurunan nilai selama tahun berjalan Unwinding Interest Penghapusbukuan Selisih kurs karena penjabaran Mata uang asing

2015

9.054

8.293

83.880 (23.808)

21.145 (20.663)

Collective allowance for impairment losses: Balance, beginning of year

-

279

Provision for impairment losses during the year Write off Foreign exchange translation difference

69.126

9.054

Balance, end of year

32.686

4.168

Individual allowance for impairment losses: Balance, beginning of year

816.892 (29.509) (152.050)

66.327 (37.809) -

(419)

-

Provision for impairment losses during the year Unwinding Interest Write Off Foreign exchange translation difference

Saldo, akhir tahun

667.600

32.686

Balance, end of year

Total cadangan kerugian penurunan nilai

736.726

41.740

Total allowance for impairment losses

The Bank’s management believes that the allowance for impairment losses provided is adequate to cover any possible impairment on loans.

Manajemen Bank berkeyakinan bahwa jumlah cadangan kerugian penurunan nilai yang dibentuk cukup untuk menutupi kemungkinan penurunan nilai kredit yang diberikan. p.

p. Pada tanggal-tanggal 31 Desember 2016 dan 2015, kredit pada pihak berelasi diungkapkan pada Catatan 36.

q.

q. Informasi mengenai suku bunga kredit yang diberikan diungkapkan pada Catatan 3c. Informasi mengenai jatuh tempo kredit yang diberikan diungkapkan pada Catatan 3d. Informasi mengenai klasifikasi dan nilai wajar kredit yang diberikan diungkapkan pada Catatan 34.

84

As of December 31, 2016 and 2015, loans with related parties were disclosed in Note 36.

Information in respect if interest rate of loans is disclosed in Note 3c. Information in respect of maturities of loans is disclosed in Note 3d. Information regarding the classification and fair value of loans is disclosed in Note 34.




13. EFEK-EFEK

13. SECURITIES 31 Desember/December 31 2016

Dimiliki hingga jatuh tempo Rupiah Obligasi Pemerintah: Nilai nominal Premi yang belum diamortisasi Nilai tercatat

2015

320.000 4.355

320.000 5.213

324.355

325.213

-

231

324.355

325.444

Obligasi korporasi Nilai tercatat Total efek-efek yang dimiliki hingga jatuh tempo Tersedia untuk dijual Rupiah Sertifikat Bank Indonesia: Nilai nominal Diskonto yang belum diamortisasi Laba yang belum direalisasi

Held-to-maturity Rupiah Government Bonds: Nominal value Unamortized Premiums Carrying amount Corporate bonds: Carrying amount

Total held-to-maturity securities Available-for-sale Rupiah Certificates of Bank Indonesia: Nominal value Unamortized discounts Unrealized gain

250.000 (2.536) 43

-

247.507

-

Total efek-efek tersedia untuk dijual

247.507

-

Total available-for-sale securities

Total efek-efek

571.862

325.444

Total securities

Nilai wajar

Fair value

Details of the securities are as follows:

Rincian efek-efek adalah sebagai berikut:

31 Desember/December 31, 2016 Nilai tercatat/ nilai wajar/ Carrying amount/ fair value

Nilai nominal/ Nominal value


Frekuensi pembayaran bunga/ Frequency of interest payment

Sertifikat Bank Indonesia/ Certificates of Bank Indonesia

250.000

247.507

03 Maret 2017 - 02 Desember 2017/ March 03, 2017 - December 02, 2017

-

Obligasi Pemerintah/ Goverment Bonds

320.000

324.355

15 September 2020 - 15 Maret 2024/ September 15, 2020 - March 15, 2024

6 bulan/months

31 Desember/December 31, 2015 Nilai tercatat/ nilai wajar/ Carrying amount/ fair value

Nilai nominal/ Nominal value Obligasi Pemerintah/ Goverment Bonds Obligasi korporasi/ Corporate bonds


320.000

325.213

231

231

15 September 2020 - 15 Maret 2024/ September 15, 2020 - March 15, 2024

6 bulan /months

5 Januari 2016 - 5 Januari 2021/ January 5, 2016 - January 5, 2021

3 bulan/months

The details of corporate bonds by issuer and rating as of December 31, 2016 and 2015 are as follows:

Rincian obligasi korporasi berdasarkan penerbit dan peringkat obligasi pada tanggal 31 Desember 2016 dan 2015 adalah sebagai berikut: Peringkat/Rating 2016 Obligasi PT Jasa Marga (Persero) Tbk

Total

2015

-

Frekuensi pembayaran bunga/ Frequency of interest payment

2016

idAA

85

2015

-

231

Bonds PT Jasa Marga (Persero) Tbk




13. EFEK-EFEK (lanjutan)

13. SECURITIES (continued)

Obligasi korporasi di atas telah diperingkat oleh Pefindo.

The above corporate bonds have been rated by Pefindo.

Pada tanggal-tanggal 31 Desember 2016 dan 2015, seluruh efek-efek tidak mengalami penurunan nilai. Manajemen Bank berkeyakinan bahwa tidak ada cadangan kerugian penurunan nilai efek-efek yang perlu dibentuk pada tanggal-tanggal 31 Desember 2016 dan 2015.

As of December 31, 2016 and 2015, all securities were not impaired. The Bank’s management believes that no allowance for impairment lossess on securities should be provided as of December 31, 2016 and 2015.

Informasi mengenai suku bunga surat-surat berharga diungkapkan pada Catatan 3c. Informasi mengenai jatuh tempo surat-surat berharga diungkapkan pada Catatan 3d. Informasi mengenai klasifikasi dan nilai wajar efek-efek diungkapkan pada Catatan 34.

Information in respect of interest rate of securities is disclosed in Note 3c. Information in respect of maturities of securities is disclosed in Note 3d. Information regarding the classification and fair value of securities is disclosed in Note 34.

14. BEBAN DIBAYAR DIMUKA

14. PREPAYMENTS Details of prepayments are as follows:

Rincian beban dibayar dimuka adalah sebagai berikut:

31 Desember/December 31 2016 Uang Muka kepada pihak ketiga Sewa (Catatan 40) Uang Muka atas perolehan aset tetap Asuransi Lainnya

2015 85.818 58.797 32.125 1.316 10.913

20.387 61.317 6.930 261 19.548

188.969

108.443

15. ASET TETAP

15.

Prepaid to third parties Rent (Note 40) Prepaid acquisition of fixed assets Insurance Other

FIXED ASSETS

31 Desember/December 31, 2016 Saldo awal/ Beginning balance Biaya perolehan: Tanah Gedung Renovasi dan perbaikan gedung Perlengkapan dan perabot kantor Kendaraan bermotor

Akumulasi penyusutan: Gedung Renovasi dan perbaikan gedung Perlengkapan dan perabot kantor Kendaraan bermotor

Nilai buku-neto

Penambahan/ Additions

Pengurangan/ Deductions

Saldo akhir/ Ending balance

11.529 24.666 91.286

50.873 3.951 6.846

(73) (1.026) (911)

62.329 27.591 97.221

109.169 410

8.007 -

(2.803) -

114.373 410

237.060

69.677

(4.813)

301.924

(9.878) (45.724)

(1.090) (16.339)

420 911

10.548 61.152

(70.536) (345)

(17.340) (33)

2.792 -

85.084 378

(126.483)

(34.802)

4.123

157.162

110.577

144.762

86

Cost: Land Buildings Leasehold improvement Office equipment, furniture and fixtures Vehicles

Accumulated depreciation: Buildings Leasehold improvement Office equipment, furniture and fixtures Vehicles

Net book value




15. ASET TETAP (lanjutan)

15.

FIXED ASSETS (continued)

31 Desember/December 31, 2015 Saldo awal/ Beginning balance Biaya perolehan: Tanah Gedung Renovasi dan perbaikan gedung Perlengkapan dan perabot kantor Kendaraan bermotor

Akumulasi penyusutan: Gedung Renovasi dan perbaikan gedung Perlengkapan dan perabot kantor Kendaraan bermotor

Nilai buku-neto




11.529 23.860 79.331

806 11.955

-

97.348 389

12.872 40

(1.051) (19)

109.169 410

212.457

25.673

(1.070)

237.060

(8.841) (30.867)

(1.037) (14.857)

-

(57.783) (335)

(13.730) (29)

977 19

(97.826)

(29.653)

996

114.631

11.529 24.666 91.286

Cost: Land Buildings Leasehold improvement Office equipment, furniture and fixtures Vehicles

Accumulated depreciation: Buildings Leasehold improvement Office equipment, furniture (70.536) and fixtures (345) Vehicles

(9.878) (45.724)

(126.483) 110.577

Net book value

Beban penyusutan yang dibebankan ke dalam beban umum dan administrasi masing-masing sebesar Rp34.802 dan Rp29.653 untuk tahun yang berakhir tanggal-tanggal 31 Desember 2016 dan 2015.

Depreciation expense charged to general and administrative expenses amounted to Rp34,802 and Rp29,653 for the year ended December 31, 2016 and 2015, respectively.

Rincian penjualan aset tetap adalah sebagai berikut:

Details of sale of fixed assets are as follows:

Tahun yang Berakhir pada tanggal 31 Desember/Year ended December 31 2016 Hasil penjualan aset tetap Nilai buku Laba penjualan aset tetap

2015 1.158 (690) 468

115 (74)

Proceeds from sale of fixed assets Net book value

41

Gain on sale of fixed assets

Pada tanggal 31 Desember 2016, seluruh hak kepemilikan atas tanah Bank adalah dalam bentuk Hak Guna Bangunan (HGB), yang memiliki sisa jangka waktu hak legal berkisar antara 3 sampai dengan 27 tahun. Manajemen Bank berkeyakinan bahwa hak kepemilikan atas tanah tersebut dapat diperpanjang pada saat jatuh tempo.

As of December 31, 2016, all the Bank’s land were in the form of landrights (Hak Guna Bangunan), which have remaining period of legal rights ranging from 3 to 27 years. The Bank’s management believes that the landrights can be extended upon expiry.

Pada tanggal-tanggal 31 Desember 2016 dan 2015, aset tetap yang telah disusutkan penuh dan masih digunakan masing-masing sejumlah Rp51.069 dan Rp17.556 (tidak diaudit).

As of December 31, 2016 and 2015, fixed assets that have been fully depreciated yet still being used amounted to Rp51,069 and Rp17,556, respectively (unaudited).

Pada tanggal-tanggal 31 Desember 2016 dan 2015, kendaraan, gedung dan perlengkapan dan perabot kantor telah diasuransikan kepada PT Asuransi Bosowa Periskop terhadap semua risiko kehilangan atau kerusakan fisik dengan nilai pertanggungan sebesar masing-masing sejumlah Rp217.385 dan USD3.259.713 (nilai penuh) untuk tahun 2016 dan Rp279.669 dan USD1.019.731 (nilai penuh) untuk tahun 2015.

As of December 31, 2016 and 2015, motor vehicles, buildings and office equipment, furniture and fixtures were insured with PT Asuransi Bosowa Periskop against all risks of physical loss or damage for sum insured of Rp217,385 and USD3,259,713 (full amount) for the year 2016 and Rp279,669 and USD1,019,731 (full amount) for year 2015.

87




15. ASET TETAP (lanjutan)

15.

FIXED ASSETS (continued) The Bank’s management believes that the insurance coverage is adequate to cover possible losses on the assets insured. The Bank’s management also believes that there was no impairment of fixed assets during the year.

Manajemen Bank berkeyakinan bahwa nilai pertanggungan aset tetap yang diasuransikan adalah cukup untuk menutupi kemungkinan kerugian atas aset yang dipertanggungkan. Manajemen Bank juga berkeyakinan tidak terdapat penurunan nilai aset tetap selama tahun berjalan. 16. ASET TAK BERWUJUD

16.

INTANGIBLE ASSETS

31 Desember/December 31, 2016 Saldo awal/ Beginning balance Biaya perolehan: Perangkat lunak Lisensi penggunaan perangkat lunak

Akumulasi amortisasi: Perangkat lunak Lisensi penggunaan perangkat lunak

Nilai buku - neto




44.490

772

(1.386)

43.876

31.474

2.959

(120)

34.313

75.964

3.731

(1.506)

78.189

(21.377)

(4.334)

1.386

(24.325)

(8.917)

(3.891)

120

(12.688)

(30.294)

(8.225)

1.506

(37.013)

45.670

41.176

Cost: Software Software license

Accumulated amortization: Software Software license

Net book value

31 Desember/December 31, 2015 Saldo awal/ Beginning balance Biaya perolehan: Perangkat lunak Lisensi penggunaan perangkat lunak

Akumulasi amortisasi: Perangkat lunak Lisensi penggunaan perangkat lunak

Nilai buku - neto




39.172

5.318

-

44.490

26.001

5.473

-

31.474

65.173

10.791

-

75.964

(16.774)

(4.603)

-

(21.377)

(6.029)

(2.888)

-

(8.917)

(22.803)

(7.491)

-

(30.294)

42.370

45.670

Cost: Software Software license

Accumulated amortization: Software Software license

Net book value

Beban amortisasi yang dibebankan dalam beban umum dan administrasi masing-masing sejumlah Rp8.225 dan Rp7.491 untuk tahun yang berakhir tanggal-tanggal 31 Desember 2016 dan 2015.

Amortization expense charged to general and administrative expenses amounted to Rp8,225 and Rp7,491, for the year ended December 31, 2016 and 2015, respectively.

Pada tanggal 31 Desember 2016 dan 2015, seluruh aset tak berwujud tidak mengalami penurunan nilai.

As of December 31, 2016 and 2015, all intangible assets were not impaired.

88




17. AGUNAN YANG DIAMBIL ALIH

17. FORECLOSED ASSETS Foreclosed Assets in settlement of loans are included under “Foreclosed Assets” account. The details in this account are as follows:

Agunan yang diambil alih untuk penyelesaian kredit dicatat dalam akun “Agunan yang Diambil Alih” (AYDA). Rincian dalam akun ini adalah:

Tahun yang Berakhir pada tanggal 31 Desember/Year ended December 31 2016 Agunan yang diambil alih

2015

1.019.382

-

Foreclosed Assets

Manajemen Bank berkeyakinan bahwa cadangan kerugian penurunan nilai yang telah dibentuk cukup untuk menutup kemungkinan kerugian atas AYDA.

The Bank’s Management believes that the above allowance for impairment losses is adequate to cover possible losses on foreclosed assets.

Penilaian nilai wajar atas tanah dan bangunan dilakukan oleh penilai independen eksternal sebagai berikut: a) KJPP Toto Suharto & Rekan b) KJPP Ristia Kurnia & Rekan c) KJPP Munir, Wisnu, Heru & Rekan d) KJPP Sarwono, Indrastuti & Rekan e) KJPP Rengganis, Hamid & Rekan f) KJPP Yanuar Bey & Rekan

The fair value valuations of land and building are perfomed by the following external independent appraiser: a) KJPP Toto Suharto & Rekan b) KJPP Ristia Kurnia & Rekan c) KJPP Munir, Wisnu, Heru & Rekan d) KJPP Sarwono, Indrastuti & Rekan e) KJPP Rengganis, Hamid & Rekan f) KJPP Yanuar Bey & Rekan

18. LIABILITAS SEGERA

18. LIABILITIES PAYABLE ON DEMAND 31 Desember/December 31 2016

2015

Escrow accounts Liabilitas pajak Lain-lain

199.088 30.981 10.589

297.270 30.196 9.891

Escrow accounts Tax liabilities Others

Total

240.658

337.357

Total

Escrow account merupakan rekening nasabah yang khusus digunakan untuk transaksi kredit.

Escrow account represents the customer’s accounts which were specifically used for loan transactions.

Titipan dana nasabah merupakan pengiriman dana (transfer) dari satu pihak kepada pihak lainnya melalui Bank sebagai perantara, dimana pada tanggal laporan keuangan, dana tersebut belum efektif diterima atau dikredit ke rekening penerima dana (beneficiary).

Customer fund deposits represents transfer from one party to another through the Bank as an intermediary, which on the date of the financial statements, the fund has not been effectively received or credited into the beneficiary’s account.

89




19. SIMPANAN DARI NASABAH

19. DEPOSITS FROM CUSTOMERS 31 Desember/December 31, 2016

Pihak berelasi/ Related parties Rupiah Giro Tabungan Deposito berjangka dan deposit on call Total - Rupiah

Pihak ketiga/ Third parties

Total

10.969 529

967.658 969.882

978.627 970.411

1.400

13.152.321

13.153.721

12.898

15.089.861

15.102.759

Rupiah Current accounts Saving accounts Time deposits and deposit on call Total - Rupiah

Valuta asing Giro Deposito berjangka dan deposit on call

4.291

285.461

289.752

47.226

3.905.225

3.952.451

Foreign currencies Current accounts Time deposits and deposit on call

Total - valuta asing

51.517

4.190.686

4.242.203

Total - foreign currencies

Total

64.415

19.280.547

19.344.962

Total

31 Desember/December 31, 2015 Pihak berelasi/ Related parties

Pihak ketiga/ Third parties

Total

Rupiah Giro Tabungan Deposito berjangka dan deposit on call

24.619 337

1.113.403 411.713

1.138.022 412.050

553.353

10.505.227

11.058.580

Total - Rupiah

578.309

12.030.343

12.608.652

Rupiah Current accounts Saving accounts Time deposits and deposit on call Total - Rupiah

Valuta asing Giro Deposito berjangka dan deposit on call

631

460.147

460.778

461.798

4.977.780

5.439.578

Foreign currencies Current accounts Time deposits and deposit on call

Total - valuta asing

462.429

5.437.927

5.900.356

Total - foreign currencies

1.040.738

17.468.270

18.509.008

Total

Total

Pada tanggal 31 Desember 2016 dan 2015, jumlah deposito yang dijadikan sebagai jaminan kredit yang diberikan adalah masing-masing sebesar Rp557.136 dan Rp836.819. Giro yang dijadikan sebagai jaminan kredit yang diberikan sebesar Rp388.624 dan Rp378.850 masing-masing pada tanggal 31 Desember 2016 dan 2015. Tidak ada tabungan yang dijadikan jaminan pada tanggal 31 Desember 2016 dan 2015.

As of December 31, 2016 and 2015, time deposits pledged as loans collateral amounted to Rp557,136 and Rp836,819, respectively. Current account pledged as loans collateral amounted to Rp388,624 and Rp378,850 as of December 2016 and 2015, respectively. There were no saving accounts pledged as collateral as of December 31, 2016 and 2015.

Saldo deposito berjangka berdasarkan periodenya:

The amount of time deposits based on period:


Rupiah ≤ 1 bulan > 1 - 3 bulan > 3 - 6 bulan > 6 - 12 bulan On call Total

Valuta asing/ Foreign currencies


Total

Rupiah

Valuta asing/ Foreign currencies

Total

2.706.158 5.595.958 3.064.211 839.597 947.797

1.516.385 669.149 532.841 12.816 1.221.260

4.222.543 6.265.107 3.597.052 852.413 2.169.057

3.714.421 4.821.729 794.639 61.944 1.665.847

3.673.816 1.022.679 143.550 4.221 595.312

7.388.237 5.844.408 938.189 66.165 2.261.159

≤ 1 month > 1 - 3 months > 3 - 6 months > 6 - 12 months On call

13.153.721

3.952.451

17.106.172

11.058.580

5.439.578

16.498.158

Total

90




19. SIMPANAN DARI NASABAH (lanjutan)

19. DEPOSITS FROM CUSTOMERS (continued) Information in respect of interest rate of deposits from customers is disclosed in Note 3c. Information in respect of maturities of deposits from customers is disclosed in Note 3d. Information regarding the classification and fair value of deposits from customers is disclosed in Note 34. Deposits from related parties are disclosed in Note 36.

Informasi mengenai suku bunga simpanan dari nasabah diungkapkan pada Catatan 3c. Informasi mengenai jatuh tempo simpanan dari nasabah diungkapkan pada Catatan 3d. Informasi mengenai klasifikasi dan nilai wajar simpanan dari nasabah diungkapkan pada Catatan 34. Simpanan dari pihak berelasi diungkapkan pada Catatan 36. 20. SIMPANAN DARI BANK-BANK LAIN

20.

DEPOSITS FROM OTHER BANKS

31 Desember/December 31 2016 Rupiah Pihak berelasi Giro Pihak ketiga Giro Deposito berjangka Interbank call money

Valuta asing Pihak berelasi Interbank call money Pihak ketiga Interbank call money

Total

2015

622

616

13.886 5.500 50.000

3.640 1.500 375.000

70.008

380.756

404.175

2.688.075

188.615

110.280

592.790

2.798.355

662.798

3.179.111

Saldo deposito berjangka dan interbank call money berdasarkan periodenya:

Rupiah Related party Current accounts Third parties Current accounts Time deposits Interbank call money

Foreign currency Related party Interbank call money Third parties Interbank call money

Total

The amounts of time deposits and interbank call money based on its period:


2015

≤ 1 bulan > 1 - 3 bulan

644.290 4.000

3.173.355 1.500

≤ 1 month > 1 - 3 months

Total

648.290

3.174.855

Total

Pada tanggal-tanggal 31 Desember 2016 dan 2015, tidak ada simpanan dari bank-bank lain yang dijadikan jaminan.

As of December 31, 2016 and 2015, there were no deposits from other banks pledged as collateral.

Informasi mengenai suku bunga simpanan dari bank-bank lain diungkapkan pada Catatan 3c. Informasi mengenai jatuh tempo simpanan dari bank-bank lain diungkapkan pada Catatan 3d. Informasi mengenai klasifikasi dan nilai wajar simpanan dari bank-bank lain diungkapkan pada Catatan 34. Simpanan dari pihak berelasi diungkapkan pada Catatan 36.

Information in respect of interest rate of deposits from other banks is disclosed in Note 3c. Information in respect of maturities of deposits from other banks is disclosed in Note 3d. Information regarding the classification and fair value of deposits from other banks is disclosed in Note 34. Deposits from related parties are disclosed in Note 36.

91




21. PAJAK PENGHASILAN

21.

INCOME TAX a.

a. Utang pajak penghasilan terdiri dari:

Income tax payable consisted of:


2015 −

PPh pasal 29

2.401

b.

b. Beban pajak penghasilan terdiri dari:

Income tax Article 29

The components of income tax expense are as follows:

Tahun yang berakhir pada tanggal 31 Desember/Year ended December 31 2016

2015

Pajak kini Pajak tangguhan

215.617

18.635 34.254

Current tax Deferred tax

Total

215.617

52.889

Total

c. Berdasarkan Undang-Undang perpajakan di Indonesia, Bank menghitung dan melaporkan/menyetorkan pajak berdasarkan sistem self-assesment. Fiskus dapat menetapkan/mengubah pajak-pajak tersebut dalam jangka waktu tertentu sesuai peraturan yang berlaku. d.

Rekonsiliasi antara laba sebelum beban pajak penghasilan yang disajikan dalam laporan laba rugi dan penghasilan komprehensif dengan (rugi) laba kena pajak untuk tahun yang berakhir pada tanggal-tanggal 31 Desember 2016 dan 2015 adalah sebagai berikut : 2016 (Rugi) Laba sebelum beban Pajak penghasilan Beda temporer: Imbalan pasca-kerja Bonus dan tunjangan yang masih harus dibayar Penyusutan aset tetap dan amortisasi aset tak berwujud Cadangan kerugian penurunan Nilai kredit Cadangan kerugian penurunan atas agunan yang diambil alih Lain-lain

Under the Indonesian taxation laws, the Bank submits tax returns on a self-assessment basis. The tax authorities may assess/amend taxes within the statute of limitations under prevailing regulations.

d.

The reconciliation between income before income tax expense as presented in the statement profit or loss and other comprehensive income and taxable (loss) income for the year ended December 31, 2016 and 2015 are as follows:

2015

(865.950)

208.935

(Loss) Income before income tax expense

21.504

20.805

Temporary differences: Post-employment benefits

8.615

7.093

4.271

(483)

232.214

(169.368)

28.747 (1.884) 293.467

Beda permanen: Bentuk natura dan kenikmatan Beban promosi lainnya Lain-lain

c.

4.936

Accrued bonus and allowances Depreciation of fixed assets and amortization of intangible assets Allowance for impairment losses on loans Allowance for impairment losses on foreclosed assets Others

(137.017)

2.262 1.222

1.722 777 123

3.484

2.622

Permanent differences: Benefits in kind Other promotion expenses Others

(Rugi) laba kena pajak

(568.999)

74.540

Taxable (loss) income

(Manfaat) Beban pajak penghasilan badan Dikurangi: pajak penghasilan dibayar dimuka

(142.250)

18.635

Current income tax (benefit) expense

Liabilitas pajak kini

-

(16.234)

-

2.401

92

Less: prepayment of income tax Current tax liability




PAJAK PENGHASILAN (lanjutan)

21.

INCOME TAX (continued) e.

e. Rekonsiliasi antara hasil perkalian (rugi) laba sebelum beban pajak penghasilan dengan tarif pajak yang berlaku dan (manfaat) beban pajak penghasilan adalah sebagai berikut:

The reconciliation between (loss) income before income tax expense multiplied by the prevailing tax rate and income tax (benefit) expense are as follows:

Tahun yang berakhir pada tanggal 31 Desember/Year ended December 31 2016 (Rugi) laba sebelum beban pajak penghasilan Tarif pajak yang berlaku

(865.950) 25%

208.935 25%

(216.488)

52.233

Beda permanen dengan tarif pajak 25% (Manfaat) Beban Pajak

f.

2015

656

Permanent differences at 25% tax rate

52.889

Income tax (benefit) expense

871 (215.617)

(Loss) Income before income tax expense Prevailing tax rate

c. The details of the deferred tax assets (liabilities) as of December 31, 2016 and 2015 were as follows:

Rincian aset (liabilitas) pajak tangguhan pada tanggal-tanggal 31 Desember 2016 dan 2015 adalah sebagai berikut:

Tahun yang berakhir pada tanggal 31 Desember/Year ended December 31 2016 Aset pajak tangguhan: Liabilitas imbalan pasca-kerja Bonus dan tunjangan yang masih harus dibayar Penyusutan aset tetap dan amortisasi aset tak berwujud Cadangan kerugian penurunan nilai atas agunan yang diambil alih Rugi belum direalisasi dari perubahan nilai wajar efek-efek yang tersedia untuk dijual Kerugian pajak tahun berjalan Lain-lain

Liabilitas pajak tangguhan: Cadangan kerugian penurunan nilai aset keuangan (Liabilitas) Aset pajak tangguhan, neto

2015 24.352

20.155

10.782

8.628

1.131

63

7.187

-

(11) 142.250 764

1.234

186.455

30.080

Deferred tax assets: Post-employment benefits obligation Accrued bonus and allowances Depreciation of fixed assets and amortization of intangible assets Allowance for impairment losses on Foreclosed Assets Unrealized loss from changes in fair value of available-for-sale securities Current tax loss Others

(14.350)

(72.404)

Deferred tax liabilities: Allowance for impairment losses on financial assets

172.105

(42.324)

Deferred tax (liabilities) assets, net

g. Manajemen Bank berkeyakinan bahwa seluruh aset pajak tangguhan yang timbul dari beda temporer kemungkinan besar dapat direalisasi pada tahun-tahun mendatang.

g. The Bank’s management believes that total deferred tax assets arising from temporary differences are probable to be realized in the future years.

h. (Rugi) laba kena pajak hasil rekonsiliasi tahun 2016 dan 2015 menjadi dasar dalam pengisian Surat Pemberitahuan Tahunan (SPT) Pajak Penghasilan Badan.

h. Taxable (loss) income which is a result from the reconciliation for the year 2016 and 2015 will be used as basis in the submission of the Company’s Annual Corporate Tax Return.

93




22. LIABILITAS IMBALAN PASCA-KERJA

22.

OBLIGATION BENEFITS

FOR

POST-EMPLOYMENT

Sesuai dengan Undang-Undang Republik Indonesia No. 13/2003 tentang ketenagakerjaan, Bank wajib memberikan imbalan pasca-kerja kepada karyawannya pada saat pemutusan hubungan kerja atau pada saat karyawan menyelesaikan masa kerjanya. Imbalan pasca-kerja ini diberikan terutama berdasarkan masa kerja dan kompensasi karyawan pada saat pemutusan hubungan kerja atau selesainya masa kerja.

In accordance with Law of the Republic of Indonesia No. 13/2003 relating to labor regulations, the Bank is required to provide post-employment benefits to its employees when their employment is terminated or when they retire. These benefits are primarily based on years of service and the employees’ compensation at termination or retirement.

Dengan demikian, Bank mencatat liabilitas yang mencerminkan imbalan pasca-kerja yang diwajibkan oleh Undang-Undang No.13/2003.

Therefore, the Bank recorded a liability, which represents post-employment benefits as required by Law No.13/2003.

Tabel berikut menyajikan liabilitas imbalan pascakerja Bank yang tercatat di laporan posisi keuangan pada tanggal 31 Desember 2016 dan 2015, dan perubahan liabilitas imbalan pasca-kerja dan beban yang diakui dalam laporan laba rugi dan penghasilan komprehensif lain untuk tahun yang berakhir tanggal 31 Desember 2016 dan 2015:

The following table summarizes the obligation for post-employment benefits of the Bank as recorded in the statement of financial position as of December 31, 2016 and 2015, and movement in the obligation and expense recognized in the statement of profit or loss and other comprehensive income for the year ended December 31, 2016 and 2015:

2016 Beban imbalan kerja Beban jasa kini Beban atas kewajiban Penilaian kembali atas biaya jangka panjang lainnya

2015 20.147 6.933 (406)

Total

26.674

Liabilitas imbalan pasca kerja Liabilitas imbalan pasca-kerja, awal tahun Beban imbalan pasca-kerja tahun berjalan Total yang diakui di penghasilan komprehensif lainnya Pembayaran imbalan pasca-kerja selama tahun berjalan Liabilitas imbalan pasca-kerja, akhir tahun

Total

80.619

63.892

26.674

24.466

(4.716)

(4.078)

(5.170)

(3.661)

Payments of benefits during the year

97.407

80.619

Obligation for post-employment benefits, end of the year

Movement in the present value of obligation for post-employment benefit for the year ended December 31, 2016 and 2015 are as follows:

2016

Nilai kini liabilitas imbalan pasca-kerja akhir periode

(10) 24.466

Employee benefit expense Current service cost Interest on obligation Remeasurement of other long term benefit

Obligation for postemployement benefits Obligation for post-employment benefits, beginning of the year Post-employment benefits expense for the year Total amount recognized in other comprehensive income

Mutasi atas nilai kini liabilitas imbalan pasca-kerja pada tanggal 31 Desember 2016 dan 2015 adalah sebagai berikut:

Nilai kini liabilitas imbalan pasca-kerja, awal periode Beban jasa kini Beban atas kewajiban Pembayaran imbalan pasca-kerja selama tahun berjalan Keuntungan aktuarial

19.365 5.111

2015 Present value of obligation for postemployment benefits, beginning of the year Current service cost Interest on obligation

80.619 20.147 6.933

63.892 19.365 5.111

(5.170) (5.122)

(3.661) (4.088)

Payments of benefits during the year Actuarial gain

80.619

Present value of obligation for for post - employment benefits, end of the year

97.407

94




22. LIABILITAS IMBALAN PASCA-KERJA (lanjutan)

22. OBLIGATION FOR BENEFITS (continued)

The maturity of defined benefit plan obligation as of December 31, 2016 and 2015 (unaudited) is as follows:

Jatuh tempo kewajiban aset dana manfaat pasti pada tanggal 31 Desember 2016 dan 2015 (tidak diaudit) adalah sebagai berikut: 2016 Dalam waktu 12 bulan berikutnya (periode laporan tahun berikutnya) Antara 2 dan 5 tahun Antara 5 dan 10 tahun Di atas 10 tahun Jumlah

POST-EMPLOYMENT

2015

5.908 29.117 131.031 844.353

777 30.348 1.025.137 1.056.263

Within the next 12 months (the next annual reporting period) Between 2 and 5 years Between 5 and 10 years Beyond 10 years

1.010.409

2.112.525

Total

The calculation of obligation for post-employment benefits as of December 31, 2016 and 2015 was performed by Biro Pusat Aktuaria as the independent actuary based on its reports dated January 9, 2017 and January 5, 2016, respectively. Obligation for post-employment benefits are calculated using the “Projected Unit Credit” method with the following assumptions:

Perhitungan liabilitas imbalan pasca-kerja pada tanggal 31 Desember 2016 dan 2015 dilakukan oleh Biro Pusat Aktuaria sebagai aktuaris independen berdasarkan laporannya masing-masing pada tanggal-tanggal 9 Januari 2017 dan 5 Januari 2016. Liabilitas imbalan pasti atas imbalan pasca-kerja (post-employment benefit) tersebut dihitung dengan menggunakan metode “Projected Unit Credit” dan asumsi-asumsi signifikan sebagai berikut:

31 Desember/December 31 2016 Tingkat diskonto per tahun Kenaikan gaji per tahun Usia pensiun

2015

8.3% 6.0% 55 tahun/years Tabel TMI 2011/ TMI 2011 table

Tingkat kematian

8.6% 6.0% 55 tahun/years Tabel TMI 2011/ TMI 2011 table

Discount rate per annum Salary increase per annum Pension age Mortality rate

31 Desember/December 31 2016 Nilai kini liabilitas imbalan pasca-kerja Pengalaman penyesuaian yang timbul pada liabilitas program

2015

2014

(97.407)

(80.619)

(63.892)

6.586

1.456

(3.354)

95

2013 Present value of obligation for post-employment benefits Experience adjustments 478 arising on plan liability

(42.954)




22. LIABILITAS IMBALAN PASCA-KERJA (lanjutan)

22. OBLIGATION FOR BENEFITS (continued)

POST-EMPLOYMENT

The tables below show the sensitivity analysis of the present value of employee benefit obligation and current service cost in the assumed changes in the discount rate and salary increment rate:

Tabel berikut menunjukan analisa sensitivitas nilai kini liabilitas imbalan kerja dan biaya jasa kini diasumsikan terdapat perubahan atas tingkat diskonto dan tingkat kenaikan upah: Tingkat Diskonto

Discount Rate 31 Desember /December 31, 2016 Perubahan Persentase/ Percentage Change

Pengaruh terhadap nilai kini liabilitas/ Impact to present value of employee benefit obligation

+1% -1%

91.122 18.711

Perubahan Persentase/ Percentage Change +1% -1%

Pengaruh terhadap biaya jasa kini/ Impact to current service cost 104.493 21.778

31 Desember /December 31, 2015 Perubahan Persentase/ Percentage Change


+1% -1%

75.165 17.910



Tingkat Kenaikan Upah

Salary Increment Rate 31 Desember /December 31, 2016 Perubahan Persentase/ Percentage Change


+1% -1%

104.585 21.799



31 Desember /December 31, 2015 Perubahan Persentase/ Percentage Change


+1% -1%

86.865 21.04

23. SURAT BERHARGA YANG DITERBITKAN



23. MARKETABLE SECURITIES ISSUED On June 8, 2016, Bank issued Negotiable Certificate of Deposit (NCD) with principal value amounting Rp320,000 with a fixed interest rate of 8.5% per annum, for 9 (nine) months period with maturity date on March 8, 2017. NCD issued at 93.94%. As of December 31, 2016, the unamortized portion of the discount are amounted to Rp4,480.

Pada tanggal 8 Juni 2016, Bank menerbitkan Negotiable Certificate of Deposit (NCD) dengan nilai pokok sebesar Rp320.000 dengan bunga tetap sebesar 8,5% per tahun, untuk jangka waktu 9 (sembilan) bulan dan jatuh tempo pada tanggal 8 Maret 2017. NCD tersebut diterbitkan sebesar 93,94%. Pada tanggal 31 Desember 2016, diskonto yang belum diamortisasi adalah sebesar Rp4.480.

96




24. PINJAMAN SUBORDINASI

24. SUBORDINATED LOAN The Bank obtained subordinated loans from Qatar National Bank S.A.Q, the Bank’s majority shareholder.

Bank memperoleh pinjaman subordinasi dari Qatar National Bank S.A.Q, pemegang saham mayoritas Bank.


2015

Tanggal perolehan 30 September 2015

−

964.950

Date obtained September 30, 2015

Total

−

964.950

Total

On September 30, 2015 the subordinated loan of USD70 million was obtained for Supplementary Capital (Tier 2). The interest rate at 7.25% per annum, payable on quarterly basis from the date of principal loan drawdown. Maturity of subordinated loan is on September 29, 2020. On November 30, 2016 subordinated loan amounted USD70 million was converted into disclosed reserve amounted to Rp948,709. Information in respect of interest rate of subordinated loan is disclosed in Notes 3c.

Pada tanggal 30 September 2015, Bank memperoleh pinjaman subordinasi sebesar USD70 juta dan digunakan sebagai Modal Pelengkap (Tier 2). Suku bunga pinjaman sebesar 7,25% per tahun, dibayarkan setiap triwulan yang dihitung sejak tanggal penarikan pinjaman pokok. Jatuh tempo pinjaman subordinasi pada tanggal 29 September 2020. Pada tanggal 30 Nopember 2016, pinjaman subordinasi sebesar USD70 Juta dialihkan menjadi dana setoran modal sebesar Rp948.709. Informasi mengenai suku bunga pinjaman subordinasi diungkapkan pada Catatan 3c. 25. MODAL SAHAM

25.

SHARE CAPITAL The composition of the Banks’ shareholders as of December 31, 2016 and 2015 are as follows:

Komposisi pemegang saham Bank pada tanggal 31 Desember 2016 dan 2015 adalah sebagai berikut:

31 Desember/December 31, 2016 Persentase Total saham/ kepemilikan/ Number Percentage of of shares ownership (%)

Total

Qatar National Bank SAQ PT Bosowa Kapital Masyarakat (masing-masing di bawah 5%)

7.232.691.746 713.429.674

82,59% 8,15%

1.808.173 178.358

Qatar National Bank SAQ PT Bosowa Kapital

811.024.577

9,26%

202.756

Public (each below 5%)

Total

8.757.145.997

100,00%

2.189.287

Total

31 Desember/December 31, 2015 Total saham/ Number of shares

Persentase kepemilikan/ Percentage of ownership (%)

Total

Qatar National Bank SAQ PT Bosowa Kapital Masyarakat (masing-masing di bawah 5%)

7.232.691.746 713.429.674

82,59% 8,15%

1.808.173 178.358

Qatar National Bank SAQ PT Bosowa Kapital

811.024.577

9,26%

202.756

Public (each below 5%)

Total

8.757.145.997

100,00%

2.189.287

Total

Based on the Deed of Minutes of Annual Shareholders’ General Meeting of Bank No. 37 dated February 27, 2015 of Fathiah Helmi, SH, notary public in Jakarta, the shareholders agreed to increase the Bank’s authorized share capital from Rp2,500,000 or 10,000,000,000 shares to Rp8,000,000 or 32,000,000,000 shares.

Berdasarkan Akta Pernyataan Keputusan Rapat Umum Pemegang Saham Tahunan Bank No. 37 tanggal 27 Februari 2015 yang dibuat di hadapan Fathiah Helmi, SH, notaris di Jakarta, para pemegang saham menyetujui peningkatan modal dasar Bank dari Rp2.500.000 atau sebanyak 10.000.000.000 saham menjadi Rp8.000.000 atau sebanyak 32.000.000.000 saham.

97




25. MODAL SAHAM (lanjutan)

25. SHARE CAPITAL (continued)

Peningkatan modal dasar tersebut telah disetujui oleh Menteri Hukum dan Hak Asasi Manusia Republik Indonesia dengan Surat Keputusan No. AHU-0004611.AH.01.02 Tahun 2015 tanggal 24 Maret 2015.

The increase in the authorized share capital has been approved by the Minister of Laws and Human Rights of the Republic of Indonesia under his Decree No. AHU-0004611.AH.01.02 Year 2015 dated March 24, 2015.

Berdasarkan Rapat Umum Pemegang Saham Luar Biasa Kedua pada tanggal 26 Juni 2009, sebagaimana dinyatakan dalam akta No. 85 tanggal 26 Juni 2009 yang dibuat dihadapan Fathiah Helmi, SH, notaris di Jakarta, Bank melakukan Penawaran Umum Terbatas I (PUT I) dengan menerbitkan Hak Memesan Efek Terlebih Dahulu (HMETD) sejumlah 125.304.750 saham dengan nilai nominal sebesar Rp250 (dalam Rupiah penuh) per saham yang ditawarkan dengan harga Rp320 (dalam Rupiah penuh) per saham. Penerbitan saham melalui PUT I tersebut menghasilkan agio saham sebesar Rp8.771.

Based on the Second Extraordinary Shareholders’ General Meeting on June 26, 2009, effected by deed No. 85 dated June 26, 2009 of Fathiah Helmi, SH, notary public in Jakarta, the Bank released the First Limited Public Offering (PUT I) by issuing the Rights Issue (HMETD) amounting to 125,304,750 shares with par value of Rp250 (in full amount) per share at an offering price of Rp320 (in full amount) per share. This share issuance through PUT I resulted in additional paid-in capital of Rp8,771.

Setelah PUT I, modal ditempatkan dan disetor Bank meningkat menjadi 626.523.750 lembar saham atau senilai Rp156.631.

After the PUT I, the Bank’s issued and fully paid capital increased to 626,523,750 shares or Rp156,631.

Berdasarkan Rapat Umum Pemegang Saham Luar Biasa pada tanggal 27 Desember 2010 sebagaimana dinyatakan dalam akta No. 63 tanggal 27 Desember 2010 yang dibuat di hadapan Fathiah Helmi, SH, notaris di Jakarta, Bank melakukan Penawaran Umum Terbatas II (PUT II) dengan menerbitkan Hak Memesan Efek Terlebih Dahulu (HMETD) sejumlah 2.935.263.768 saham dengan nilai nominal dan harga penawaran sebesar Rp250 (dalam Rupiah penuh) per saham.

Based on the Extraordinary Shareholders’ General Meeting on December 27, 2010, as effected by deed No. 63 dated December 27, 2010 of Fathiah Helmi, SH, notary public in Jakarta, the Bank released the Second Limited Public Offering (PUT II) by issuing the Rights Issue (HMETD) amounting to 2,935,263,768 shares with par value and at the offering price of Rp250 (in full amount) per share.

Setelah PUT II, modal ditempatkan dan disetor Bank meningkat menjadi 3.561.787.518 saham atau senilai Rp890.447.

After the PUT II, the Bank’s issued and fully paid capital increased to 3,561,787,518 shares or Rp890,447.

Berdasarkan Akta Akuisisi No. 26 tanggal 26 Januari 2011 yang dibuat di hadapan Fathiah Helmi, SH, notaris di Jakarta, Bank dan Qatar National Bank SAQ (“QNB”) telah menandatangani Akta Akuisisi dimana QNB sebagai pembeli siaga dalam rights issue telah memperoleh 2.478.728.032 saham biasa atas Saham Baru dengan nominal Rp250 (dalam Rupiah penuh) per saham atau senilai Rp619.682.

Based on the Acquisition Deed No. 26 dated January 26, 2011 of Fathiah Helmi, SH, notary public in Jakarta, the Bank and Qatar National Bank SAQ (“QNB”) have signed the Deed of Acquisition where QNB as a standby buyer in the rights issue has acquired 2,478,728,032 ordinary shares of New Shares with a nominal value of Rp250 (in full amount) per share or Rp619,682.

Pada tanggal 27 Mei 2013, Bank memperoleh Pernyataan Efektif dari Otoritas Jasa Keuangan (“OJK”) berdasarkan Surat Keputusan No. S-141/D.04/2013 dalam rangka Penawaran Umum Terbatas III (PUT III) dengan menerbitkan Hak Memesan Efek Terlebih Dahulu (HMETD) sejumlah 2.596.543.000 saham dengan nilai nominal dan harga penawaran sebesar Rp250 (dalam Rupiah penuh) per saham.

On May 27, 2013, the Bank obtained the Effective Notification from the Financial Service Authority (“OJK”) through its Decree No. S-141/D.04/2013 in relation to the Third Limited Public Offering (PUT III) by conducting the Rights Issue (HMETD) amounting to2,596,543,000 shares with par value and at the offering price of Rp250 (in full amount) per share.

98




25. MODAL SAHAM (lanjutan)

25. SHARE CAPITAL (continued)

Setelah PUT III, modal ditempatkan dan disetor Bank meningkat menjadi 6.158.330.518 lembar saham atau senilai Rp1.539.583.

After the PUT III, the Bank’s issued and fully paid capital increased to 6,158,330,518 shares or Rp1,539,583.

Pada tanggal 2 Juni 2014, Bank memperoleh Pernyataan Efektif dari Otoritas Jasa Keuangan (“OJK”) berdasarkan Surat Keputusan No. S-253/D.04/2014 dalam rangka Penawaran Umum Terbatas IV (PUT IV) dengan menerbitkan Hak Memesan Efek Terlebih Dahulu (HMETD) sejumlah 2.598.815.479 saham dengan nilai nominal dan harga penawaran sebesar Rp250 (dalam Rupiah penuh) per saham.

On June 2, 2014, the Bank obtained the Effective Notification from the Financial Service Authority (“OJK”) through its Decree No..S-253/D.04/2014 in relation to the Fourth Limited Public Offering (PUT IV) by conducting the Rights Issue (HMETD) amounting to 2,598,815,479 shares with par value and at the offering price of Rp250 (in full amount) per share.

Setelah PUT IV, modal ditempatkan dan disetor Bank meningkat menjadi 8.757.145.997 lembar saham atau senilai Rp2.189.287.

After the PUT IV, the Bank’s issued and fully paid capital increased to 8,757,145,997 shares or equivalent to Rp2,189,287.

Pada tanggal 14 desember 2016, Bank memperoleh tambahan modal lainnya berupa dana setoran modal yang dilakukan dengan cara penyetoran dana oleh Qatar National Bank SAQ sebesar USD56 juta atau setara dengan Rp751.800.

On December 14, 2016, Bank obtained other disclosed reserve in the form of capital - fund injection shall be done through fund transfer by Qatar National Bank SAQ amounted to USD56 million or equivalent to Rp751,800.

26. TAMBAHAN MODAL DISETOR

26. ADDITIONAL PAID-IN CAPITAL The additional paid-in capital as of December 31, 2016 and 2015 were derived from:

Tambahan modal disetor pada tanggal 31 Desember 2016 dan 2015 berasal dari:

31 Desember/December 31 2016 Agio saham Beban emisi saham Total - neto

2015

8.771 (33.341)

8.771 (33.341)

Additional paid-in capital Shares issuance costs

(24.570)

(24.570)

Total - net

Share issuance costs arose from shares issuance through Initial Public Offering, PUT I, PUT II, PUT III, and PUT IV amounting to Rp1,635, Rp1,032, Rp25,562, Rp2,525 and Rp2,587 respectively (Notes 1b and 25).

Beban emisi saham timbul dari penerbitan saham melalui Penawaran Umum Perdana, PUT I, PUT II, PUT III dan PUT IV masing-masing sebesar Rp1.635, Rp1.032, Rp25.562, Rp2.525 dan Rp2.587 (Catatan 1b dan 25). 27. CADANGAN UMUM DAN WAJIB

27.

GENERAL AND LEGAL RESERVE

Cadangan umum dan wajib dibentuk sesuai dengan Undang-Undang Republik Indonesia No.)1/1995 sebagaimana telah diubah dengan Undang-Undang No..40/2007 tentang Perseroan Terbatas yang berlaku efektif sejak tanggal 16 Agustus 2007 yang mengharuskan perusahaan-perusahaan untuk membentuk cadangan umum dengan jumlah minimum 20% dari modal saham yang ditempatkan dan disetor. Tidak ada batas waktu pembentukan cadangan ini.

The general and legal reserve was provided in relation with the Law of the Republic of Indonesia No.)1/1995 which has been replaced with the Law No.)40/2007 regarding the Limited Liability Company effective on August 16, 2007 which requires companies to set up a general reserve amounting to at least 20% of the issued and paid up share capital. There is no timeline over which this amount should be provided.

Berdasarkan akta Berita Acara Rapat Umum Pemegang Saham Tahunan No. 13 tanggal 16 Februari 2016 dibuat dihadapan Fathiah Helmi, SH, notaris di Jakarta, disetujui pembentukan cadangan umum sebesar Rp 1.000 dari saldo laba tahun 2015.

Based on the deed of Annual Shareholder’s General Meeting No. 13 dated February 16, 2016 of Fathiah Helmi, SH, notary public in Jakarta, was approved that approriation of the 2015 retained earnings amounted to Rp1,000.

99




27. CADANGAN UMUM DAN WAJIB (lanjutan)

27.

GENERAL AND LEGAL RESERVE (continued) Based on deed of Annual Shareholder’s General Meeting No. 36 dated February 27, 2015 of Fathiah Helmi, SH, notary public in Jakarta, was approved that profit for the year 2014 was used to increase the capital and to strengthen capital adequacy ratio.

Berdasarkan akta Berita Acara Rapat Umum Pemegang Saham Tahunan No. 36 tanggal 27 Februari 2015 dibuat dihadapan Fathiah Helmi, SH, notaris Jakarta, disetujui penetapan laba bersih tahun 2014 digunakan untuk menambah modal Bank dan memperkuat rasio modal. 28. PENDAPATAN BUNGA - NETO

28. NET INTEREST INCOME Tahun yang Berakhir pada tanggal 31 Desember/Year ended December 31 2016

Pendapatan bunga Kredit yang diberikan Efek-efek yang dibeli dengan janji dijual kembali Penempatan pada Bank Indonesia dan bank-bank lain Efek-efek Lainnya

Beban bunga Simpanan dari nasabah Deposito berjangka dan deposit on call Giro Tabungan Simpanan dari bank-bank lain Deposit on call Deposito berjangka Giro Pinjaman Subordinasi Premi penjaminan ke LPS (Catatan 39) Surat berharga yang diterbitkan

Pendapatan bunga - neto

2015

1.870.530

1.926.821

71.286

8.046

64.352 42.362 62

58.437 47.209 69

2.048.592

2.040.582

(1.312.768) (70.524) (16.182)

(1.167.481) (89.005) (3.862)

(12.083) (452) (64) (61.759) (43.446) (14.897)

(32.229) (80) (7) (17.662) (41.005) -

(1.532.175)

(1.351.331)

516.417

29. PENDAPATAN PROVISI DAN KOMISI - NETO

689.251

Interest income Loans Securities purchased under agreement to resell Placements with Bank Indonesia and other banks Securities Others

Interest expense Deposits from customers Time deposits and deposits on call Current accounts Saving accounts Deposits from other banks Deposits on call Time deposits Currents accounts Subordinated Loan Guarantee premium to LPS (Note 39) Marketable securities issued

Net interest income

29. NET FEES AND COMMISSION INCOME

Tahun yang Berakhir pada tanggal 31 Desember/Year ended December 31 2016 Pendapatan provisi dan komisi Jasa Jasa administrasi Lain-lain

Beban provisi dan komisi Transaksi antar bank Pendapatan provisi dan komisi - neto

2015

112.677 5.843 6.405

184.214 2.017 10.047

124.925

196.278

(1.435) 123.490

100

(2.020) 194.258

Fees and commission income Services Administration fees Others

Fees and commission expenses Inter-bank transactions Net fees and commission income




30. PENYISIHAN KERUGIAN PENURUNAN NILAI ASET KEUANGAN DAN NON KEUANGAN

30. PROVISION FOR IMPAIRMENT LOSSES ON FINANCIAL ASSETS AND NON FINANCIAL

Tahun yang Berakhir pada tanggal 31 Desember/Year ended December 31 2016

2015

Kredit yang diberikan (Catatan 12) Cadangan kerugian atas agunan yang diambil alih

900.772

Total

929.519

87.472

28.747

31. BEBAN KARYAWAN

Loans (Note 12)

- Allowance for lossess of foreclosed assets 87.472

31.

Total

PERSONNEL EXPENSES

Tahun yang Berakhir pada tanggal 31 Desember/Year ended December 31

2016

2015

Gaji pokok THR/bonus Outsourcing Imbalan pasca-kerja Tunjangan jabatan Pengobatan Pendidikan dan pelatihan Asuransi Tunjangan cuti, kehadiran, dan tranportasi Perekrutan Lain-lain

172.943 77.926 54.804 26.674 17.966 17.530 17.203 7.490

175.850 81.251 31.657 24.466 18.082 13.144 16.159 7.657

2.217 406 2.173

827 1.681 4.969

Basic salaries THR/bonus Outsourcing Post-employment benefits Functional allowance Medical Education and training Insurance Leave, attendance, and transportation allowance Recruitment Others

Total

397.332

375.743

Total

32. BEBAN UMUM DAN ADMINISTRASI

32.

GENERAL AND ADMINISTRATIVE EXPENSES

Tahun yang Berakhir pada tanggal 31 Desember/Year ended December 31 2016

2015

Sewa Penyusutan aset tetap

66.348 34.802

54.354 29.653

Telepon, telex dan data komunikasi Jasa profesional Pemeliharaan dan perbaikan Iklan dan promosi Transportasi Amortisasi aset tak berwujud Air, gas dan listrik Percetakan dan perlengkapan Asuransi Pajak dan retribusi Lain-lain

24.952 22.928 22.227 22.186 10.155 8.225 7.615 4.385 3.248 1.049 15.842

19.321 17.624 21.259 30.818 12.120 7.491 8.482 8.588 2.153 2.420 10.823

Rental Depreciation of fixed assets Telephone, telex and data communication Professional fees Repair and maintenance Advertising and promotion Transportation Amortization of intagible assets Water, gas and electricity Printing and stationary Insurance Tax and retribution Others

243.962

225.106

Total

Total

101




33. (RUGI) LABA PER SAHAM - DASAR

33.

(LOSS) EARNINGS PER SHARE - BASIC (Loss) earnings per share - basic is computed by dividing income for the year by the weighted average number of outstanding shares during the year.

(Rugi) laba per saham - dasar dihitung dengan membagi laba tahun berjalan dengan rata-rata tertimbang jumlah saham yang beredar pada tahun yang bersangkutan.

Tahun yang Berakhir pada tanggal 31 Desember/Year ended December 31 2016 (Rugi) laba tahun berjalan Rata-rata tertimbang jumlah saham yang beredar untuk perhitungan laba per saham dasar (nilai penuh) (Rugi) laba per saham - dasar (dalam Rupiah penuh)

2015

(650.333)

8.757.145.997 (74,26)

34. ASET KEUANGAN DAN LIABILITAS KEUANGAN

156.046

8.757.145.997 17,82

34. FINANCIAL LIABILITIES

(Loss) Income for the year Weighted average number of outstanding shares for basic earnings per share computation (full amount) (Loss) earnings per share basic (in full amount)

ASSETS

AND

FINANCIAL

Di bawah ini disajikan perbandingan antara nilai tercatat, seperti dilaporkan dalam laporan posisi keuangan, dan nilai wajar semua aset keuangan dan liabilitas keuangan.

Below is the comparison of the carrying amounts, as reported in the statement of financial position, and the fair value of all financial assets and liabilities.

Pada tabel di bawah ini, instrumen keuangan telah dikelompokkan berdasarkan klasifikasi masingmasing. Kebijakan akuntansi yang penting di Catatan 2f menjelaskan bagaimana kategori aset keuangan dan liabilitas keuangan tersebut diukur dan bagaimana pendapatan dan beban, termasuk laba dan rugi atas nilai wajar (perubahan nilai wajar instrument keuangan), diakui.

In the below table, financial instruments have been allocated based on their classification. The significant accounting policies in Note 2f describe how the categories of the financial assets and financial liabilities are measured and how income and expenses, including fair value gains and losses (changes in fair value of financial instruments), are recognized.

Aset keuangan telah dikelompokkan ke dalam aset keuangan yang diukur pada nilai wajar melalui laba atau rugi, pinjaman yang diberikan dan piutang, dimiliki hingga jatuh tempo dan tersedia untuk dijual. Sama halnya dengan aset keuangan, liabilitas keuangan telah dikelompokkan ke dalam liabilitas keuangan yang diukur pada nilai wajar melalui laba atau rugi dan yang dicatat pada biaya perolehan diamortisasi lainnya.

Financial asset classes have been allocated into assets at fair value through profit or loss, loans and receivables, held-to-maturity and available-for-sale financial assets. Similarly, financial liability has been allocated into financial liabilities at fair value through profit or loss and other amortized cost.

Nilai wajar yang diungkapkan di bawah ini adalah berdasarkan informasi relevan yang tersedia pada tanggal laporan posisi keuangan dan tidak diperbaharui untuk mencerminkan perubahan dalam kondisi pasar yang terjadi setelah tanggal laporan posisi keuangan.

The fair values are based on relevant information available as at the date of statement of financial position and have not been updated to reflect changes in market condition after the date of statement of financial position.

102




34. ASET KEUANGAN DAN LIABILITAS KEUANGAN (lanjutan)

34. FINANCIAL ASSETS LIABILITIES (continued)

AND

FINANCIAL

The table below sets out the carrying amount and fair values of the Bank’s financial assets and liabilities as of December 31, 2016 and 2015.

Tabel di bawah menyajikan nilai tercatat dan nilai wajar aset dan liabilitas keuangan Bank pada tanggal 31 Desember 2016 dan 2015. 31 Desember/December 31, 2016

Nilai wajar melalui laba rugi/ Fair value through profit or loss Aset keuangan Kas Giro pada Bank Indonesia Giro pada bank-bank lain Penempatan pada Bank Indonesia dan bank lain Tagihan derivatif Tagihan akseptasi Efek-efek yang dibeli dengan janji dijual kembali Kredit yang diberikan Efek-efek Aset lain-lain

Liabilitas keuangan Simpanan dari nasabah Simpanan dari bank-bank lain Surat berharga yang diterbitkan Liabilitas derivatif Liabilitas akseptasi Beban masih harus dibayar dan liabilitas lain-lain

Pinjaman yang diberikan dan piutang/ Loans and receivables

Dimiliki hingga jatuh tempo/ Held-to maturity

Biaya perolehan diamortisasi lainnya/ Amortized other cost

Tersedia untuk dijual/ Available forsale

Jumlah Nilai tercatat/ Total carrying amount

Nilai wajar/ Fair value Financial assets Cash

-

51.260

-

-

-

51.260

51.260

-

1.635.116 80.815

-

-

-

1.635.116 80.815

1.635.116 80.815

550 -

2.230.074 22.193

-

-

-

2.230.074 550 22.193

2.230.074 550 22.193

-

471.350 17.551.188 156.267

324.355 -

247.507 -

-

471.350 17.551.188 571.862 156.267

471.350 17.551.188 578.326 156.267

550

22.198.263

324.355

247.507

-

22.770.675

22.777.139

-

-

-

-

12.890 -

-

-

-

19.344.962 662.798 315.520 22.193

19.344.962 662.798 315.520 12.890 22.193

19.344.962 662.798 315.520 12.890 22.193

Financial liabilities Deposits from customers Deposits from other banks Marketable securities issued Derivatives payable Acceptance payable

-

-

-

-

87.440

87.440

87.440


12.890

-

-

-

20.432.913

20.445.803

20.445.803

Current accounts with Bank Indonesia Current accounts with other banks Placements with Bank Indonesia and other bank Derivatives receivable Acceptances receivable Securites purchased under agreement to resell Loans Securities Other assets


Nilai wajar melalui laba rugi/ Fair value through profit or loss Aset keuangan Kas Giro pada Bank Indonesia Giro pada bank-bank lain Penempatan pada Bank Indonesia dan bank-bank lain Tagihan derivatif Tagihan akseptasi Efek-efek yang dibeli dengan janji dijual kembali Kredit yang diberikan Efek-efek Aset lain-lain

Liabilitas keuangan Simpanan dari nasabah Simpanan dari bank-bank lain Liabilitas derivatif Liabilitas akseptasi Beban masih harus dibayar dan liabilitas lain-lain Pinjaman Subordinasi

Pinjaman yang diberikan dan piutang/ Loans and receivables

Dimiliki hingga jatuh tempo/ Held-to maturity

Biaya perolehan diamortisasi lainnya/ Amortized other cost

Tersedia untuk dijual/ Available forsale

Jumlah Nilai tercatat/ Total carrying amount

Nilai wajar/ Fair value Financial assets Cash

-

45.432

-

-

-

45.432

45.432

-

1.710.947 31.146

-

-

-

1.710.947 31.146

1.710.947 31.146

2.921 -

2.111.813 61.821

-

-

-

2.111.813 2.921 61.821

2.111.813 2.921 61.821

-

269.117 20.788.304 127.018

-

325.444 -

-

269.117 20.788.304 325.444 127.018

269.117 20.788.304 325.444 127.018

2.921

25.145.598

-

325.444

-

25.473.963

25.473.963

661 -

-

-

-

18.509.008 3.179.111 61.821

18.509.008 3.179.111 661 61.821

18.509.008 3.179.111 661 61.821

Financial liabilities Deposits from customers Deposits from other banks Derivatives payable Acceptance payable

-

-

-

-

68.354 964.950

68.354 964.950

68.354 964.950

Accruals and other liabilities Subordinated Loan

661

-

-

-

22.783.244

22.783.905

22.783.905

Current accounts with Bank Indonesia Current accounts with other banks Placements with Bank Indonesia and other banks Derivatives receivable Acceptances receivable Securites purchased under agreement to resell Loans Securities Other assets

Berikut metode dan asumsi yang digunakan untuk perkiraan nilai wajar:

The following methods and assumptions are used to estimate the fair value:

Nilai wajar aset dan liabilitas keuangan tertentu selain kredit yang diberikan dan efek-efek mendekati nilai tercatat karena instrumen keuangan tersebut memiliki jangka waktu jatuh tempo yang singkat dan/atau suku bunganya sering ditinjau ulang.

Fair values of certain financial assets and liabilities other than loans and securities are approximately the same with their carrying amounts due to the short-term maturities of these financial instrumentsand/or repriced frequently.

103






AND

FINANCIAL

Berikut metode dan asumsi yang digunakan untuk perkiraan nilai wajar: (lanjutan)

The following methods and assumptions are used to estimate the fair value: (continued)

Nilai wajar dari kredit yang diberikan dengan suku bunga mengambang dan nilai tercatat atas kredit jangka pendek dengan suku bunga tetap adalah perkiraan yang layak atas nilai wajar. Nilai wajar dari kredit jangka panjang yang diberikan dengan suku bunga tetap menunjukkan nilai diskon dari perkiraan arus kas masa depan yang diharapkan akan diterima oleh Bank. Perkiraan arus kas ini didiskontokan dengan menggunakan suku bunga pasar untuk menentukan nilai wajar.

The carrying amounts of variable loans and shortterm fixed rate loans are the reasonable approximation of their fair values. The carrying amount of long term fixed rate loans shows the discounted estimated future cash flows. The cash flows estimation is discounted at the market interest rate to determine fair value.

Nilai wajar efek-efek yang diklasifikasikan sebagai dimiliki hingga jatuh tempo yang diberikan dengan suku bunga tetap menunjukkan nilai diskon dari perkiraan arus kas masa depan yang diharapkan akan diterima oleh Bank. Perkiraan arus kas ini didiskontokan dengan menggunakan suku bunga pasar untuk menentukan nilai wajar. Nilai wajar efek-efek yang diklasifikasikan sebagai tersedia untuk dijual adalah berdasarkan harga kuotasi pasar.

The carrying amount securities that classified as held-to-maturity shows the discounted estimated future cash flows. The cash flows estimation is discounted at the market interest rate to determine fair value. The fair value of securities that classified as available for sales was update on quated market prices.

Nilai wajar atas instrumen derivatif yang dinilai menggunakan teknik penilaian dengan menggunakan komponen yang dapat diamati di pasar terutama adalah swap suku bunga, swap mata uang dan kontrak pertukaran mata uang. Teknik penilaian yang paling banyak digunakan meliputi model penilaian forward dan swap yang menggunakan perhitungan nilai kini. Model tersebut menggabungkan berbagai komponen yang meliputi kualitas kredit dari counterparty, nilai spot dan kontrak berjangka serta kurva tingkat suku bunga.

The fair values of derivatives instrument valued by valuation techniques using components which can be observed in the market, primarily are interest rate swaps, currency swaps and currency exchange contracts. Most widely used valuation techniques include forward and swap valuation models which use the present value calculation. The models incorporate various components which include the credit quality of the counterparty, spot value and future contracts and interest rate curve.

Nilai wajar dari instrumen yang tidak dikuotasi, kredit yang diberikan dan aset non keuangan lainnya diestimasi dengan mendiskonto arus kas masa depan menggunakan tingkat suku bunga yang tersedia untuk pinjaman dengan persyaratan, risiko kredit dan sisa jangka waktu jatuh tempo yang serupa.

The fair value of unquoted instruments, loans and other non financial assets is estimated by discounting the future cash flow using rates currently available for debt on similar terms, credit risk and remaining maturities.

Bank menggunakan hirarki nilai wajar untuk menentukan dan mengungkapkan nilai wajar dari instrumen keuangan (Catatan 2f).

The Bank adopts the fair value hierarchy for determining and disclosing the fair value of financial instruments (Note 2f).

104






AND

FINANCIAL

The table below show the financial instruments measured at fair value grouped according to the fair value hierarchy.

Tabel di bawah ini menunjukkan instrumen keuangan yang diukur pada nilai wajar yang dikelompokkan berdasarkan hirarki nilai wajar.

31 Desember/December 31, 2016 Nilai wajar/Fair value Nilai tercatat/ Carrying value

Tingkat/ Level 1

Tingkat/ Level 2

Tingkat/ Level 3

Aset Keuangan Aset yang diukur pada nilai wajar Efek-efek - Nilai wajar melalui laba atau rugi

Financial Assets Assets measured at fair value

550

-

550

-

Securities - Fair value through profit or loss

Efek-efek - Tersedia Untuk dijual

247.507

247.507

-

-

Securities - Available for sale

Total asset yang diukur pada nilai wajar

248.057

247.507

550

-

Total assets measured at fair value

Aset yang nilai wajarnya diungkapkan Kredit yang diberikan Efek-efek - dimiliki hingga jatuh tempo Aset non keuangan: Agunan yang diambil alih Total asset yang nilai wajarnya diungkapkan

Assets for which fair value are disclosed 17.551.188

-

17.042.850

508.338

Loans

324.355

324.355

-

-

Securities - held to maturity Non financial asset:

1.019.382

-

1.019.382

-

18.894.925

324.355

18.062.232

508.338

Liabilitas Keuangan Liabilitas yang diukur pada nilai wajar Liabilitas derivatif

Foreclosed Assets Total assets which fair value are disclosed Financial Liabilities Liabilities measured at fair value

12.890

-

12.890

-

Liabilitas yang diukur pada biaya perolehan amortisasi

Derivatives payable

Liabilities measured at amortized cost

Surat berharga yang diterbitkan

315.520

-

315.520

-

Total liabilitas yang nilai wajarnya diungkapkan

328.410

-

328.410

-

Marketable securities issued Total liabilities which fair value are disclosed


Tingkat/ Level 1

Tingkat/ Level 2

Tingkat/ Level 3

Aset Keuangan Aset yang diukur pada nilai wajar Efek-efek - Nilai wajar melalui laba atau rugi Total asset yang diukur pada nilai wajar

Financial Assets Assets measured at fair value 2.921

-

2.921

-

2.921

-

2.921

-

Aset yang nilai wajarnya diungkapkan Kredit yang diberikan Efek-efek - dimiliki hingga jatuh tempo Total asset yang nilai wajarnya diungkapkan

Securities - Fair value through profit or loss Total assets measured at fair value Assets for which fair value are disclosed

20.788.304

-

20.388.217

400.087

Loans

325.444

325.444

-

-

Securities - held to maturity

21.113.748

325.444

20.388.217

105

Total assets which fair value 400.087 are disclosed






AND

FINANCIAL

The table below show the financial instruments measured at fair value grouped according to the fair value hierarchy. (continued)

Tabel di bawah ini menunjukkan instrumen keuangan yang diukur pada nilai wajar yang dikelompokkan berdasarkan hirarki nilai wajar. (lanjutan)


Tingkat/ Level 1

Tingkat/ Level 2

Tingkat/ Level 3

Liabilitas Keuangan Liabilitas yang diukur pada biaya perolehan amortisasi

Financial Liabilities Liabilities measured at amortized cost

Pinjaman subordinasi

964.950

-

964.950

-

Liabilitas yang diukur pada nilai wajar

Subordinated loan Liabilities measured at fair value

Liabilitas derivatif Total liabilitas yang nilai wajarnya diungkapkan

661

-

661

-

Derivatives payable

965.611

-

965.611

-

Total liabilities which fair value are disclosed

35. KUALITAS ASET PRODUKTIF

35. QUALITY OF PRODUCTIVE ASSETS The tables below present the grading of productive assets of the Bank in accordance with the prevailing Bank Indonesia regulations at their carrying amounts:

Tabel di bawah ini menunjukkan kolektibilitas aset produktif Bank sesuai dengan peraturan Bank Indonesia yang berlaku yang disajikan pada nilai tercatatnya:


Lancar/Current Giro pada Bank Indonesia Giro pada bank-bank lain Penempatan pada Bank Indonesia dan bank-bank lain Tagihan derivatif Tagihan akseptasi Efek-efek yang dibeli dengan janji jual kembali Kredit yang diberikan Efek-efek Aset Lain-lain Total

Dalam perhatian khusus/ Special mention

Kurang lancar/ Substandard

Diragukan/ Doubtful

Macet/Loss

Total

1.635.116 80.815

-

-

-

-

1.635.116 80.815

2.230.074 550 22.193

-

-

-

-

2.230.074 550 22.193

471.350 13.836.053 571.862 103.237

3.177.068 53.030

21.630 -

140.204 -

376.233 -

471.350 17.551.188 571.862 156.267

Current accounts with Bank Indonesia Current accounts with other banks Placements with Bank Indonesia and other banks Derivatives receivable Acceptance receivable Securites purchased under agreement to resell Loans Securities Other assets

18.951.250

3.230.098

21.630

140.204

376.233

22.719.415

Total


Lancar/Current Giro pada Bank Indonesia Giro pada bank-bank lain Penempatan pada Bank Indonesia dan bank-bank lain Tagihan derivatif Tagihan akseptasi Efek-efek yang dibeli dengan janji jual kembali Kredit yang diberikan Efek-efek Total

Dalam perhatian khusus/ Special mention

Kurang lancar/ Substandard

Diragukan/ Doubtful

Macet/Loss

Total

1.710.947 31.146

-

-

-

-

1.710.947 31.146

2.111.813 2.921 61.821

-

-

-

-

2.111.813 2.921 61.821

269.117 18.731.784 325.444

1.557.830 -

24.046 -

20.512 -

454.132 -

269.117 20.788.304 325.444

Current accounts with Bank Indonesia Current accounts with other banks Placements with Bank Indonesia and other banks Derivatives receivable Acceptance receivable Securites purchased under agreement to resell Loans Securities

23.244.993

1.557.830

24.046

20.512

454.132

25.301.513

Total

106




36. SIFAT HUBUNGAN DAN TRANSAKSI DENGAN PIHAK BERELASI

36.

The details of the relationship and type of significant transactions with related parties as of December 31, 2016 and 2015 are as follows:

Rincian sifat hubungan dan jenis transaksi yang signifikan dengan pihak berelasi pada tanggal 31 Desember 2016 dan 2015 adalah sebagai berikut: Pihak berelasi/Related party Muhammad Anas M Andrew McGregor Duff Azhar bin Abdul Wahab Rusli

Sifat relasi/Nature of relationship

Personil manajemen kunci/ Key management personnel

Windiarto Tabingin

Personil manajemen kunci/ Key management personnel Personil manajemen kunci/ Key management personnel

Suroto Moehadji Qatar National Bank - London Ooredoo Asia Qatar National Bank SAQ

PT Indosat Tbk

Jenis transaksi/Type of transaction

Personil manajemen kunci/ Key management personnel Personil manajemen kunci/ Key management personnel Personil manajemen kunci/ Key management personnel Personil manajemen kunci/ Key management personnel

Lloyd Rolston

Novi Mayasari

NATURE OF RELATIONSHIP AND TRANSACTIONS WITH RELATED PARTIES

Personil manajemen kunci/ Key management personnel Mempunyai induk yang sama/Owned by the Same shareholder Perusahaan afiliasi/Affiliated company Perusahaan induk/ Parent company

Entitas yang dikendalikan oleh pemerintah yang sama sebagai pemegang saham akhir, State of Qatar/Entity controlled by the same government as the ultimate shareholder, State of Qatar

Deposito berjangka dan Tabungan/ Time deposits and saving Giro dan pinjaman karyawan/ Current accounts and employee loan Tabungan dan pinjaman karyawan/ Saving accounts and employee loan Deposito berjangka, giro, tabungan dan pinjaman karyawan/Time deposits, current account, Saving accounts and employee loan Deposito berjangka, tabungan, giro dan pinjaman karyawan/ Time deposits, saving accounts, current accounts and employee loan. Tabungan dan pinjaman karyawan/ Saving accounts and Employee Loan. Pinjaman karyawan, giro, tabungan dan deposito berjangka/ Employee loan, current accounts, saving Accounts and time deposits. Pinjaman karyawan dan Tabungan/ Employee Loan and Saving Accounts Liabilitas akseptasi/Acceptances payable Giro/Current Accounts Giro pada bank-bank lain, simpanan dari bank lain dan Pinjaman Subordinasi/Current accounts with other banks, deposit from other banks and Subordinated Loan Giro dan deposito berjangka/ Current accounts and time deposits

Transaksi dengan personil manajemen kunci

Transactions with key management personnel

Personil manajemen kunci adalah pihak yang memiliki kewenangan dan tanggung jawab untuk mengendalikan aktivitas Bank baik secara langsung maupun tidak langsung.

Key management personnel are parties who have authority and responsibility to control the Bank’s activities, directly or indirectly.

Personil manajemen kunci termasuk Dewan Komisaris dan Direksi yang memiliki kewenangan dan tanggung jawab yang signifikan untuk merencanakan, mengarahkan dan mengendalikan kegiatan Bank.

Key management personnel include Board of Commissioners and Board of Directors that have significant authority and responsibility for planning, directing and controlling the Bank’s activities.

Jumlah gaji, tunjangan dan bonus Dewan Komisaris, Direksi, Komite Audit dan Komite Pemantau Risiko selama tahun yang berakhir tanggal 31 Desember 2016 dan 2015 adalah sebagai berikut:

Total of salaries, allowances and bonuses of the Board of Commissioners, Board of Directors, Audit Committee and Risk Monitoring Committee for the year ended December 31, 2016 and 2015 are as follows:

Tahun yang Berakhir pada tanggal 31 Desember/Year ended December 31 2016 Dewan Komisaris Direksi Komite Audit dan Pemantau Risiko

2015 3.953 19.898

1.687 23.332

649

551

24.500

25.570

107

Board of Commissioners Board of Directors Audit Committee and Risk Monitoring Committee




36. SIFAT HUBUNGAN DAN TRANSAKSI DENGAN PIHAK BERELASI (lanjutan)

36.

NATURE OF RELATIONSHIP AND TRANSACTIONS WITH RELATED PARTIES (continued) The total of significant balance and transactions with related parties as of and for the year ended December 31, 2016 and 2015 were as follows:

Jumlah saldo dan transaksi yang signifikan dengan pihak-pihak berelasi pada tanggal dan untuk tahun yang berakhir tanggal 31 Desember 2016 dan 2015 adalah sebagai berikut: 2016 Jumlah/ Amount

Giro pada bank-bank lain Kredit yang diberikan Simpanan dari nasabah: Giro Tabungan Deposito berjangka Simpanan dari bank lain Liabilitas akseptasi Pinjaman Subordinasi Pendapatan Bunga Beban bunga

2015

Persentase/ Percentage*)

Jumlah/ Amount

Persentase/ Percentage*)

193 1.895

0,001% 0,008%

172 3.434

0,001% 0,013%

15.260 529 48.626 404.797 163 63.250

0,073% 0,003% 0,233% 1,937% 0,008% 5,460%

25.250 337 1.015.151 2.688.691 24.995 964.950 279 19.922

0,108% 0,001% 4,351% 11,523% 0,107% 4.135% 0,014% 1.474%

Current accounts with other banks Loans Deposits from customers Current accounts Saving accounts Time deposits Deposit from other bank Acceptances payable Subordinated Loan Interest income Interest expenses

*) Persentase terhadap jumlah aset/liabilitas/pendapatan/beban terkait

*) Percentage of total assets/liabilities/respective income/ expense

Kompensasi personil manajemen kunci untuk periode berjalan terdiri dari:

The compensation for key management personnel for the period comprised of:

31 Desember/December 31 2016 Imbalan kerja jangka pendek

2015 23.851

37. KOMITMEN DAN KONTINJENSI

25.019

37.

Short-term employee benefits

COMMITMENTS AND CONTINGENCIES


2015

KOMITMEN Liabilitas komitmen L/C yang tidak dapat dibatalkan

(37.015)

(25.357)

COMMITMENTS Committed liabilities Irrevocable letters of credit

Total liabilitas komitmen

(37.015)

(25.357)

Total committed liabilities

KONTINJENSI Tagihan kontinjensi Pendapatan bunga dalam penyelesaian Liabilitas kontinjensi Bank garansi yang diterbitkan

141.091

50.660

(15.632)

(25.340)

Total aset (liabilitas) kontinjensi - neto

125.459

25.320

Total aset (liabilitas) komitmen dan kontinjensi - neto

88.444

108

(37)

CONTINGENCIES Contingent receivables Interest income on non-performing loans Contingent liabilities Bank guarantees issued Total contingent assets (liabilities) - net Total committed and contingent assets (liabilities) - net




37. KOMITMEN DAN KONTINJENSI (lanjutan)

37.

COMMITMENTS (continued)

AND

CONTINGENCIES

Jumlah fasilitas kredit (uncommitted) Bank kepada nasabah yang belum digunakan pada tanggal 31 Desember 2016 dan 2015 adalah masing-masing sebesar Rp1.551.036 dan Rp2.957.752.

The Bank’s unused loan facilities (uncommitted) granted to customers as of December 31, 2016 and 2015 were amounted to Rp1,551,036 and Rp2,957,752, respectively.

Pada tanggal 31 Desember 2016 dan 2015, jangka waktu untuk Letters of Credit (L/C) adalah sekitar 1 bulan sampai dengan 6 bulan, sedangkan jangka waktu untuk bank garansi yang diterbitkan masingmasing berkisar antara 1 bulan sampai dengan 1 tahun dan 90 hari sampai dengan 3 tahun.

As of December 31 2016 and 2015, the term of Letters of Credit (L/C) were approximately 1 month to 6 months, while the term of bank guarantees issued ranged between 1 month to 1 year and 90 days to 3 years, respectively.

38. ASET DAN LIABILITAS DALAM VALUTA ASING

38.

ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

31 Desember/December 31 2016 Valuta asing (dalam Nilai penuh)/ Foreign currencies (in full amount) Aset Kas Dolar Amerika Serikat Dolar Singapura Dolar Australia Yen Jepang Euro Eropa Riyal Qatar Poundsterling Inggris Giro pada Bank Indonesia Dolar Amerika Serikat Giro pada bank-bank lain - Pihak berelasi Riyal Qatar - Pihak ketiga Euro Eropa Dolar Amerika Serikat Dolar Australia Dolar Singapura Dolar Hong kong Yen Jepang Poundsterling Inggris Dolar Selandia Baru Swiss Franc Baht Thailand Penempatan pada Bank Indonesia dan bank-bank lain Dolar Amerika Serikat Tagihan akseptasi Dolar Amerika Serikat Kredit yang diberikan Dolar Amerika Serikat Aset lain-lain Dolar Amerika Serikat Yen Jepang Total aset

2015

Ekuivalen Rp/ Equivalent Rp

Valuta asing (dalam Nilai penuh) Foreign currencies (in full amount)


286.284 73.938 270 1.190 94.982 -

3.857 689 3 17 352 -

306.244 11.436 15.207 1.254.515 18.734 22.575 4.520

4.221 112 153 144 282 213 68

34.900.000

470.190

52.500.000

723.712

52.270

193

45.427

172

165.081 3.871.776 117.005 1.710.165 293.805 50.574.162 105.508 4.885 11.669 1.166.304

2.340 52.163 1.138 15.925 510 5.820 1.747 46 154 439

29.483 980.796 182.819 928.119 242.328 16.276.963 102.821 13.417 12.382 1.302.854

444 13.520 1.843 9.057 431 1.864 2.102 127 172 498

140.000.000

1.886.150

103.600.000

1.428.126

1.647.273

22.193

4.484.678

61.821

522.397.059

7.037.994

530.600.312

7.314.325

1.567.096

21.113

1.179.955

16.266

9.523.033

109

9.579.673

Assets Cash United States Dollar Singapore Dollar Australian Dollar Japanese Yen European Euro Qatari Riyal Great Britain Poundsterling Current accounts with Bank Indonesia United States Dollar Current accounts with other banks Related party Qatari Riyal Third parties European Euro United States Dollar Australian Dollar Singapore Dollar Hong Kong Dollar Japanese Yen Great Britain Poundsterling New Zealand Dollar Swiss Franc Thailand Baht Placements with Bank Indonesia and other banks United States Dollar Acceptances receivable United States Dollar Loans United States Dollar Other assets United States Dollar Japanese Yen Total assets




38. ASET DAN LIABILITAS DALAM VALUTA ASING (lanjutan)

38.

ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES (continued)

31 Desember/December 31 2016 Valuta asing (dalam Nilai penuh)/ Foreign currencies (in full amount) Liabilitas Liabilitas segera Euro Eropa Dolar Amerika Serikat Dolar Australia Dolar Singapura Poundsterling Inggris Simpanan dari nasabah - Pihak berelasi Dolar Amerika Serikat Dolar Australia Yen Jepang - Pihak ketiga Euro Eropa Dolar Amerika Serikat Dolar Australia Dolar Singapura Dolar Hong Kong Yen Jepang Poundsterling Inggris Riyal Qatar Simpanan dari bank-bank lain - Pihak berelasi Dolar Amerika Serikat - Pihak ketiga Dolar Amerika Serikat Liabilitas akseptasi Dolar Amerika Serikat Beban masih harus dibayar dan liabilitas lain-lain Dolar Amerika Serikat Dolar Hongkong Euro Eropa Dolar Singapura Dolar Australia Yen Jepang Poundsterling Inggris Pinjaman Subordinasi - Pihak berelasi Dolar Amerika Serikat

2015



1.333 8.421.886 501 1.702 33

19 113.439 5 16 1

176 13.453.584 731 4.604 29

3 185.458 7 45 1

3.680.411 191.283 630.420

49.584 1.860 73

33.545.771

462.429

-

-

1.322.773 300.901.224 2.068.870 8.682.522 263.357 35.075.074 758.459 7.225

18.751 4.053.892 20.116 80.851 458 4.036 12.556 27

1.371.164 381.396.261 2.681.945 11.834.118 259.733 14.267.063 737.810 6.642

20.645 5.257.548 27.044 115.489 462 1.634 15.080 25

30.000.000

404.175

203.000.000

2.798.355

14.000.000

188.615

-

-

1.647.273

22.193

4.484.678

61.821

554.006 955 1.405 3.687 3.081 974 153

7.464 2 20 34 30 0,11 3

699.504 1.258 1.849 9.973 4.724 3.147 152

9.643 2 28 97 48 3

−

70.000.000

Total liabilitas

4.978.220

Total liabilitas - neto

4.544.813

39. JAMINAN TERHADAP PEMBAYARAN BANK UMUM

Valuta asing (dalam Nilai penuh) Foreign currencies (in full amount)

KEWAJIBAN

Acceptances payable United States Dollar

964.950

Accruals and other liabilities United States Dollar Hong Kong Dollar European Euro Singapore Dollar Australian Dollar Japanese Yen Great Britain Poundsterling Subordinated Loan Related parties United States Dollar

9.920.817

Total liabilities

(341.144)

39.

Liabilities Liabilities payable on demand European Euro United States Dollar Australian Dollar Singapore Dollar Great Britain Poundsterling Deposits from customers Related parties United States Dollar Australian Dollar Japanese Yen Third parties European Euro United States Dollar Australian Dollar Singapore Dollar Hong Kong Dollar Japanese Yen Great Britain Poundsterling Qatari riyal Deposits from other banks Related parties United States Dollar Third parties United States Dollar

Total liabilities - net

GUARANTEES ON THE OBLIGATIONS OF COMMERCIAL BANKS

Berdasarkan Undang-Undang No. 24 tanggal 22 September 2004, efektif sejak tanggal 22 September 2005, Lembaga Penjamin Simpanan (LPS) dibentuk untuk menjamin kewajiban tertentu bank-bank umum berdasarkan program penjaminan yang berlaku.

Based on Law No. 24 dated September 22, 2004, effective September 22, 2005, Indonesian Deposit Insurance Corporation (Lembaga Penjamin Simpanan/LPS) was established to provide guarantee on certain deposits from customers based on prevailing guarantee schemes.

Total premi penjaminan yang dibayarkan untuk tahun yang berakhir tanggal 31 Desember 2016 dan 2015 masing-masing sebesar Rp43.446 dan Rp41.005.

The guarantee premium paid for the year ended December, 2016 and 2015 amounted to Rp43,446 and Rp41,005, respectively.

Total simpanan yang dijamin oleh LPS pada tanggal 31 Desember 2016 dan 2015 masing-masing sebesar Rp2.406.589 dan Rp7.686.743.

Total deposits secured by LPS as December, 2016 and 2015 amounted Rp2,406,589 and Rp7,686,743, respectively.

110

of to




39. JAMINAN TERHADAP KEWAJIBAN PEMBAYARAN BANK UMUM (lanjutan)

39.

GUARANTEES ON THE OBLIGATIONS OF COMMERCIAL BANKS (continued) As of December 31, 2016 and 2015, interest rates of deposits secured by LPS were 6.25% and 7.50%, respectively, for Rupiah currency, and 0.75% and 1.25%, respectively, for foreign currency.

Pada tanggal 31 Desember 2016 dan 2015, tingkat suku bunga atas simpanan yang dijamin oleh LPS masing-masing sebesar 6,25% dan 7,50% untuk mata uang Rupiah, serta masing-masing sebesar 0,75% dan 1,25% untuk valuta asing. 40. PERJANJIAN DAN PERIKATAN PENTING

40. SIGNIFICANT AGREEMENTS

Perjanjian Kerjasama dengan PT Karta Metadata

Mutual Agreement with PT Karta Metadata

Dalam rangka meningkatkan pelayanan Bank terhadap masyarakat, Bank mengadakan Perjanjian Kerjasama dengan PT Karta Metadata. Tujuan dari perjanjian ini adalah PT Karta Metadata ditunjuk untuk menyediakan fasilitas layanan Q Virtual Account (QVA) yang dapat digunakan untuk proses transaksi keuangan elektronik. Perjanjian kerjasama ini berlaku sejak 15 Januari 2014 untuk jangka waktu 36 bulan sejak ditandatanganinya perjanjian ini.

In order to increase the Bank’s services to its customers, the Bank entered into Mutual Agreement with PT Karta Metadata. The purpose of this mutual is to provide service facilities of Q Virtual Account (QVA) that can be used to process electronical financial transactions. This agreement was effective since January 15, 2014 for the period of 36 months since the signing of the agreement.

Perjanjian Kerjasama dengan PT Delta Merlin Dunia Properti

Mutual Agreement with PT Delta Merlin Dunia Properti

Dalam rangka meningkatkan pelayanan bank terhadap masyarakat, Bank mengadakan Perjanjian Kerjasama dengan PT Delta Merlin Dunia Properti. Tujuan dari perjanjian ini adalah PT Delta merlin Dunia Properti menyediakan fasilitas layanan Q Virtual Account (QVA) yang dapat digunakan untuk proses transaksi keuangan elektronik. Perjanjian kerjasama ini berlaku sejak 17 Oktober 2016 untuk jangka waktu 12 bulan sejak ditandatanganinya perjanjian ini.

In order to increase the Bank’s services to its customers, the Bank entered into Mutual Agreement with PT Delta Merlin Dunia Properti. The purpose of this mutual is PT Delta Merlin Dunia Properti to provides service facilities of Q Virtual Account (QVA) that can be used to process electronical financial transactions. This agreement was effective since October 17, 2016 for the period of 12 months since the signing of the agreement.

Perjanjian Sewa Menyewa Gedung dengan PT Dian Graha Cipta

Building Lease Agreement with PT Dian Graha Cipta

Pada tanggal 19 Desember 2011 Bank menandatangani perjanjian sewa menyewa dengan PT Dian Graha Cipta, dimana Bank menyewa gedung QNB Tower di SCBD Parc 18 Jalan Jend. Sudirman Kavling 52-53, Jakarta, yang digunakan sebagai Kantor Pusat Bank. Perjanjian sewamenyewa berlaku untuk jangka waktu 7 tahun sejak ditandatanganinya perjanjian ini.

On December 19, 2011, the Bank signed lease agreement with PT Dian Graha Cipta whereby the Bank leased QNB Tower building located at SCBD Parc 18 Jalan Jend. Sudirman Kavling 52-53, Jakarta, currently occupied as the Bank’s Head Office. This lease agreement was effective for the period of 7 years since the signing of the agreement.

Perjanjian Perubahan Akta Sewa Menyewa Rumah (Kantor) dengan Tuan Halim Sajogo

Amendment in The Lease Deed Agreement on a House (Office) with Tuan Halim Sajogo

Pada tanggal 8 Januari 2014, Bank menandatangani perubahan perjanjian sewa menyewa dengan Tuan Halim Sajogo, dimana Bank melakukan perpanjangan sewa menyewa rumah (kantor) Jalan Ir. H. Juanda No. 11, Bandung, yang digunakan sebagai Kantor Cabang Bank. Perjanjian sewamenyewa berlaku sampai dengan tanggal 3 Desember 2022.

On January 8, 2014, the Bank signed the lease deed agreement with Tuan Halim Sajogo, whereby the Bank will lease extension a house (office) located at Jalan Ir. H. Juanda No. 11, Bandung, currently occupied as the Bank’s branch office. This lease agreement was effective until December 3, 2022.

111



PERJANJIAN (lanjutan)

DAN

PERIKATAN


PENTING

40. SIGNIFICANT AGREEMENTS (continued)

Perjanjian Kerjasama Penerimaan Pembayaran Tagihan dengan PT Prismalink International

Mutual Agreement Bill PT Prismalink International

Dalam rangka meningkatkan pelayanan Bank terhadap masyarakat, Bank mengadakan Perjanjian Kerjasama dengan PT Prismalink International. Tujuan dari perjanjian ini adalah PT Prismalink International menyediakan fasilitas layanan penerimaan setoran pembayaran tagihan biller dan tagihan lainnya dari nasabah melalui system pembayaran tersebut. Perjanjian kerjasama ini berlaku sejak 8 Januari 2014 untuk jangka waktu 36 bulan sejak ditandatanganinya perjanjian ini.

In order to increase the Bank’s service to its customers, the Bank entered into Mutual Agreement with PT Prismalink International. The purpose of this mutual agreement is to provide service facilities of biller payment and other bills of customers through the payment system. This agreement was effective since January 8, 2014 for the period of 36 months since the signing of the agreement.

Perjanjian Kerjasama dengan PT E2PAY Global Utama

Mutual Agreement with PT E2PAY Global Utama

Dalam rangka meningkatkan pelayanan Bank terhadap masyarakat, Bank mengadakan Perjanjian Kerjasama dengan PT E2PAY Global Utama. Tujuan dari perjanjian ini adalah PT E2Pay Global Utama menyediakan fasilitas layanan sistem interkoneksi, biller gateway yang mengelola pembayaran tagihan menggunakan fasilitas Online Payment Point. PerjanjIan kerjasama berlaku sejak 20 Mei 2016 untuk jangka waktu 36 bulan sejak ditandatanganinya perjanjian ini.

In order to increase the Bank’s service to its customers, the Bank entered into Mutual Agreement with PT E2PAY Global Utama. The purpose of this mutual agreement is to provide service facilities of interconnection system, biller gateway that manages the bill payments by using Online Payment Point’s facility. This agreement was effective since May 20, 2016 for the period of 36 months since the signing of the agreement.

Perjanjian Kerjasama dengan PT Alpha EMS

Mutual Agreement with PT Alpha EMS

Dalam rangka meningkatkan pelayanan Bank terhadap masyarakat, Bank mengadakan Perjanjian Kerjasama dengan PT Alpha EMS. Tujuan dari perjanjian ini adalah PT Alpha EMS menyediakan fasilitas layanan jasa Cash Replenishment dan First Line Maintenance ATM. Perjanjian kerjasama ini berlaku sejak 1 Oktober 2015 untuk jangka waktu 24 bulan sejak ditandatanganinya perjanjian ini.

In order to increase the Bank’s service to its customers, the Bank entered into Mutual Agreement with PT Alpha EMS. The purpose of this mutual is to provide services facilities of Cash Replenishment and First Line Maintenance ATM. This agreement was effective since October 1, 2015 for the period of 24 months since the signing of the agreement.

Perjanjian Kerjasama dengan PT Multipolar Technology

Mutual Agreement Technology

Dalam rangka meningkatkan pelayanan bank terhadap masyarakat, Bank mengadakan Perjanjian Kerjasama dengan PT Multipolar Technology. Tujuan dari perjanjian ini adalah PT Multipolar Technology menyediakan fasilitas layanan implementasi Hardware dan Software untuk Tivoli Storage Manager (TSM). Perjanjian kerjasama ini berlaku sejak 11 Februari 2014 untuk jangka waktu 36 bulan sejak ditandatanganinya perjanjian ini.

In order to increase the Bank’s service to its customers, the Bank entered into Mutual Agreement with PT Multipolar Technology. The purpose of this mutual agreement is to provide facility of Hardware and Software’s implementation for Tivoli Storage Manager (TSM). This agreement was effective since February 11, 2014 for the period of 36 months since the signing of the agreement.

112

with

Payment

PT

with

Multipolar



PERJANJIAN (lanjutan)

DAN

PERIKATAN


PENTING

40. SIGNIFICANT AGREEMENTS (continued)

Perjanjian Kerjasama dengan PT Trimegah Asset Management

Mutual Agreement with PT Trimegah Asset Management

Dalam rangka meningkatkan pelayanan bank terhadap masyarakat, Bank mengadakan Perjanjian Kerjasama dengan PT Trimegah Asset Management. Tujuan dari perjanjian ini adalah PT Trimegah Asset Management menyediakan fasilitas layanan keuangan dan alternatif investasi yang terbaik melalui penawaran Reksa Dana. Perjanjian kerjasama ini berlaku sejak 29 Januari 2015 untuk jangka waktu 24 bulan sejak ditandatanganinya perjanjian ini.

In order to increase the Bank’s service to its customers, the Bank entered into Mutual Agreement with PT Trimegah Asset Management. The purpose of this mutual is to provide facility of Financial Services and the best investing alternate through Wealth Management’s offering. This agreement was effective since January 29, 2015 for the period of 24 months since the signing of the agreement.

Perjanjian Kerjasama dengan PT Visiprima Indoperforma

Mutual Agreement Indoperforma

Dalam rangka meningkatkan pelayanan bank terhadap masyarakat, Bank mengadakan Perjanjian Kerjasama dengan PT Visiprima Indoperma. Tujuan dari perjanjian ini adalah PT Visiprima Indoperma menyediakan fasilitas layanan pemborongan dalam pemasaran produk bank. Perjanjian kerjasama ini berlaku sejak 1 April 2015 untuk jangka waktu 24 bulan sejak ditandatanganinya perjanjian ini.

In order to increase the Bank’s service to its customers, the Bank entered into Mutual Agreement with PT Visiprima Indoperma. The purpose of this mutual is to provide service of chatering in marketing bank products. This agreement was effective since April 1, 2015 for the period of 24 months since the signing of the agreement.

Perjanjian Kerjasama dengan PT Bank Victoria International Tbk.

Mutual Agreement with PT Bank Victoria International Tbk.

Dalam rangka meningkatkan pelayanan bank terhadap masyarakat, Bank mengadakan Perjanjian Kerjasama dengan PT Bank Victoria International, Tbk. Tujuan dari perjanjian ini adalah PT Bank QNB Indonesia Tbk menyediakan jasa penerbitan Letter of Credit (L/C) untuk nasabah PT Bank Victoria International Tbk. Perjanjian kerjasama ini berlaku sejak 7 Desember 2016 untuk jangka waktu 12 bulan sejak ditandatanganinya perjanjian ini.

In order to increase the Bank’s services to it’s customers, the Bank entered into Mutual Agreement with PT Bank Victoria International, Tbk. The purpose of this mutual agreement is PT Bank QNB Indonesia Tbk to provides service of Publishing Letter of Credit (L/C) for the customers of PT Bank Victoria International Tbk. This agreement was effective since December 7, 2016 for the period of 12 months since the signing of the agreement.

41.0 SEGMEN OPERASI a.

PT

Visiprima

41.0 OPERATION SEGMENT

Bidang usaha

a.

Business activities The Bank’s segment information is presented based on its business activities, namely credit, treasury and trade finance.

Segmen Bank disajikan berdasarkan jenis kegiatan usahanya, yakni kredit, treasuri dan ekspor-impor. b.

with

Segmen usaha

b.

Business segment

Segmen geografis

Geographic segment

Bank tidak mempunyai pendapatan dan aset tidak lancar dari pelanggan eksternal selain yang diatribusikan kepada negara domisili bank.

The Bank does not have revenues and noncurrent asset from external customers other than attributed to the Bank’s country of domicile.

113




41.0SEGMEN OPERASI (lanjutan) b.

41.0 OPERATION SEGMENT (continued)

Segmen usaha (lanjutan)

b.

Business segment (continued)

Segmen operasi

Operating segment

Segmen operasi dilaporkan sesuai dengan laporan internal Bank yang disiapkan untuk mengambil keputusan operasional yang bertanggung jawab untuk mengalokasikan sumber daya ke segmen tertentu dan penilaian atas performanya.

Operating segments are reported in accordance with the internal reporting provided to the chief operating decision maker which is responsible for allocating resources to certain segments and performance assessments.

Seperti yang dijelaskan di Catatan 2aa, Bank pada saat ini dikelola sebagai segmen operasi tunggal. Pada saat ini, Bank hanya menganalisa segmen secara geografis dimana manajemen menelaah laporan internal manajemen secara bulanan untuk masingmasing area.

As discussed in Note 2aa, the Bank is being managed as a single operating segment. Currently, the Bank only performs segment analysis based on the geographical area where the management reviews internal management reports on a monthly basis.

Tidak ada pendapatan dari satu konsumen eksternal atau pihak lain yang mencapai 10% atau lebih dari total pendapatan Bank untuk tahun yang berakhir pada tanggal 31 Desember 2016 dan 2015.

No revenue from transactions with a single external customer or counterparty amounted to 10% or more of the Bank’s total revenue for the period ended December 31, 2016 and 2015.

Bank mengelola kegiatan operasinya dan mengidentifikasi segmen yang dilaporkan berdasarkan wilayah geografis yang terbagi menjadi beberapa area, yaitu Jakarta, Sumatera, Jawa dan wilayah Timur.

The Bank manages its operating activities and indentifies its reporting segments based on geographical area that allocated into several areas, namely, Jakarta, Sumatera, Jawa and East Region.

Segmen Operasi Bank berdasarkan letak geografis adalah sebagai berikut:

Geographical segment information of the Bank was as follows:


Jakarta Total aset Total liabilitas

Sumatera

18.812.829 13.889.632

Wilayah Timur/ East Region

Jawa

1.685.439 3.823.337

2.617.297 2.990.921

Total

1.257.137 190.883

24.372.702 20.894.773

Total assets Total liabilities


Jakarta Total aset Total liabilitas

Sumatera

19.333.304 18.107.169

1.854.141 2.260.257


Jawa 3.081.541 2.815.819

Total

1.488.663 150.220

25.757.649 23.333.465

Total assets Total liabilities

Tahun yang berakhir pada tanggal 31 Desember 2016/ Year ended December 31, 2016 Jakarta Pendapatan (beban) bunga bersih Pendapatan provisi dan komisi neto Pendapatan operasional lainnya Beban operasional Pendapatan (beban) non-operasional neto Laba (rugi) sebelum pajak penghasilan

Sumatera


Jawa

Total

288.876

92.284

85.086

50.171

516.417

80.458

5.404

34.447

3.181

123.490

Net interest income (expenses) Net fees and commission income

74.905 (1.414.372 )

1.151 (49.054)

93 (82.438)

23 (32.826)

76.172 (1.578.690)

Other operating income Operating expenses

(3.970 )

628

-

3

(3.339)

Non-operating income (expenses) - net

(974.103 )

50.413

37.188

20.552

(865.950 )

Income (loss) before income tax

114




41.0SEGMEN OPERASI (lanjutan) b.

41.0 OPERATION SEGMENT (continued)

Segmen usaha (lanjutan)

b.

Segmen operasi (lanjutan)

Business segment (continued) Operating segment (continued)

Tahun yang berakhir pada tanggal 31 Desember 2015/ Year ended December 31, 2015 Jakarta Pendapatan (beban) bunga bersih Pendapatan provisi dan komisi bersih Pendapatan operasional lainnya Beban operasional Pendapatan (beban) non-operasional neto Laba (rugi) sebelum pajak penghasilan

Sumatera


Jawa

Total

486.019

75.687

73.460

54.085

689.251

173.005

3.848

15.366

2.039

194.258

Net interest income (expenses) Net fees and commission income

13.509 (616.524 )

2.554 (44.004 )

737 (22.623)

1.460 (13.345)

18.260 (696.496 )

Other operating income Operating expenses

3.616

50

18

59.625

38.135

66.958

(22) 44.217

3.662

Non-operating income (expenses) - net

208.935

Income (loss) before income tax

Pendapatan bunga, pendapatan provisi dan komisi, pendapatan operasional lainnya dan pendapatan non-operasional Bank berasal dari pelanggan/pihak lawan yang berdomisili di Negara Indonesia.

Bank’s interest income, fees and commission income, other operating income and non-operating income were generated from its customers/counterparties domiciled in Indonesia

Tidak terdapat transaksi dengan pelanggan eksternal tunggal yang mencapai 10% dari jumlah pendapatan bunga yang dihasilkan Bank.

There was no transaction with single external customer which reached 10% of total interest income generated by the Bank.

42. STANDAR AKUNTANSI YANG TELAH DISAHKAN NAMUN BELUM BERLAKU EFEKTIF

42. ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE

Standar akuntansi dan interpretasi yang telah disahkan oleh Dewan Standar Akuntansi Keuangan (DSAK), tetapi belum berlaku efektif untuk laporan keuangan tahun berjalan diungkapkan di bawah ini. Bank berencana untuk menerapkan standar tersebut, jika dipandang relevan, saat telah menjadi efektif.

The standards and interpretations that are issued by the Indonesian Financial Accounting Standards Board (DSAK), but not yet effective for current financial statements are disclosed below. The Bank intends to adopt these standards, if applicable, when they become effective.

• Amandemen PSAK No. 1: Penyajian Laporan Keuangan tentang Prakarsa Pengungkapan, berlaku efektif 1 Januari 2017.

• Amendments to SFAS No. 1: Presentation of Financial Statements on Disclosures Initiative, effective January 1, 2017.

Amandemen ini mengklarifikasi, bukan mengubah secara signifikan, persyaratan PSAK No. 1, antara lain, mengklarifikasi mengenai materialitas, fleksibilitas urutan sistematis penyajian catatan atas laporan keuangan dan pengidentifikasian kebijakan akuntansi signifikan.

This amendments clarify, rather than significantly change, existing SFAS No. 1 requirements, among others, to clarify the materiality, flexibility as to the order in which they present the notes to financial statements and identification of significant accounting policies.

115




42. STANDAR AKUNTANSI YANG TELAH DISAHKAN NAMUN BELUM BERLAKU EFEKTIF (lanjutan)

42. ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE (continued)

• Amandemen PSAK No. 2: Laporan Arus Kas tentang Prakarsa Pengungkapan, berlaku efektif 1 Januari 2018 dengan penerapan dini diperkenankan.

• Amendments to SFAS No. 2: Statement of Cash Flows on the Disclosures Initiative, effective January 1, 2018 with earlier application is permitted.

Amandemen ini mensyaratkan entitas untuk menyediakan pengungkapan yang memungkinkan pengguna laporan keuangan untuk mengevaluasi perubahan pada liabilitas yang timbul dari aktivitas pendanaan, termasuk perubahan yang timbul dari arus kas maupun perubahan non-kas.

This amendments requires entities to provide disclosures that enable the financial statements users to evaluate the changes in liabilities arising from financing activities, including changes from cash flow and non-cash

• Amandemen PSAK No. 46: Pajak Penghasilan tentang Pengakuan Aset Pajak Tangguhan untuk Rugi yang Belum Direalisasi, berlaku efektif 1 Januari 2018 dengan penerapan dini diperkenankan.

• Amendments to SFAS No. 46: Income Taxes on the Recognition of Deferred Tax Assets for Unrealized Losses, effective January 1, 2018 with earlier application is permitted.

Amandemen ini mengklarifikasi bahwa untuk menentukan apakah laba kena pajak akan tersedia sehingga perbedaan temporer yang dapat dikurangkan dapat dimanfaatkan; estimasi atas kemungkinan besar laba kena pajak masa depan dapat mencakup pemulihan beberapa aset entitas melebihi jumlah tercatatnya.

This amendments clarifies that to determine whether the taxable income will be available so that the deductible temporary differences can be utilized; estimates of the most likely future taxable income can include recovery of certain assets of the entity exceeds its carrying amount.

• PSAK No. 3 (Penyesuaian 2016): Laporan Keuangan Interim, berlaku efektif 1 Januari 2017 dengan penerapan dini diperkenankan.

• SFAS No. 3 (2016 Improvement): Interim Financial Reporting, effective January 1, 2017 with earlier application is permitted.

Penyesuaian ini mengklarifikasi bahwa pengungkapan interim yang dipersyaratkan harus dicantumkan dalam laporan keuangan interim atau melalui referensi silang dari laporan keuangan interim seperti komentar manajemen atau laporan risiko yang tersedia untuk pengguna laporan keuangan interim dan pada saat yang sama.

This improvement clarifies that the interim disclosures required should be included in the interim financial statements or through crossreferences of the interim financial statements, such as management commentary or risk management report, that available to users of the interim financial statements and should at the same time.

• PSAK No. 24 (Penyesuaian 2016): Imbalan Kerja, berlaku efektif 1 Januari 2017 dengan penerapan dini diperkenankan.

• SFAS No. 24 (2016 Improvement): Employee Benefits, effective January 1, 2017 with earlier application is permitted.

Penyesuaian ini mengklarifikasi bahwa pasar obligasi korporasi berkualitas tinggi dinilai berdasarkan denominasi mata uang obligasi tersebut dan bukan berdasarkan negara di mana obligasi tersebut berada.

This improvement clarifies that the market of high quality corporate bonds is valued by denominated bonds and not based on the country in which the bonds are.

116




42. STANDAR AKUNTANSI YANG TELAH DISAHKAN NAMUN BELUM BERLAKU EFEKTIF (lanjutan)

42. ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE (continued)

• PSAK No. 58 (Penyesuaian 2016): Aset Tidak Lancar yang Dimiliki Untuk Dijual dan Operasi yang Dihentikan, berlaku efektif 1 Januari 2017 dengan penerapan dini diperkenankan.

• SFAS No. 58 (2016 Improvement): Non-Current Assets, Held for Sale and Discontinued Operation, effective January 1, 2017 with earlier application is permitted.

Penyesuaian ini mengklarifikasi bahwa perubahan dari satu metode pelepasan ke metode pelepasan lainnya dianggap sebagai rencana awal yang berkelanjutan dan bukan sebagai rencana pelepasan baru. Penyesuaian ini juga mengklarifikasi bahwa perubahan metode pelepasan ini tidak mengubah tanggal klasifikasi sebagai aset atau kelompok lepasan.

This improvement clarifies that a change from one disposal method to the other disposal methods are considered as the beginning of a sustainable plan and not as a new disposal plan. This improvement also clarifies that the change in the disposal method does not change the date of classification as an asset or disposal group.

• PSAK No. 60 (Penyesuaian 2016): Instrumen Keuangan: Pengungkapan, berlaku efektif 1 Januari 2017 dengan penerapan dini diperkenankan.

• SFAS No. 60 (2016 Improvement): Financial Instruments, effective January 1, 2017 with earlier application is permitted.

Penyesuaian ini mengklarifikasi bahwa entitas harus menilai sifat dari imbalan kontrak jasa untuk menentukan apakah entitas memiliki keterlibatan berkelanjutan dalam aset keuangan dan apakah persyaratan pengungkapan terkait keterlibatan berkelanjutan terpenuhi.

This improvement Clarifies that an entity must assess the nature of the service contract benefits to determine whether the entity has a continuing involvement in financial assets and whether the disclosure requirements related to the continuing involvement are met.

Bank sedang mengevaluasi dampak dari standar akuntansi tersebut dan belum menentukan dampaknya terhadap laporan keuangan Bank.

The Bank is presently evaluating and has not yet determined the effects of these accounting standards on its financial statements.

117

Disclaimer Certain of the matters discussed in this Annual Report about future performance, including, without limitation, future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical constitute “forward-looking statements”. These prospective statements in this annual report are prepared based on various assumptions on current and future conditions of the Bank, as well as its business environment in which the Bank operates. The Bank does not guarantee that the documents which have been ensured of their validity will bring certain results as targeted. Due care and attention have been used in the preparation of forecast information. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of PT Bank QNB Indonesia Tbk, which may cause actual results to differ materially from those expressed or implied in such statements due to changes in the business environment and other factors. This annual report contains the word “Bank” which are defined as PT Bank QNB Indonesia Tbk that operates in the field of banking industry.


Annual Report 2016


Telp : (+6221) 515 5155 Fax : (+6221) 515 5388 e-mail : [email protected] qnb.co.id

Annual Report 2016

PT Bank QNB Indonesia Tbk QNB Tower 18 Parc SCBD Jl. Jend. Sudirman Kav. 52-53 Jakarta 12190


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