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Public Expose
PT Bank KB Bukopin Tbk
Q3/2023 – Bank Performance
22/12/2023
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Disclaimer The disclosure presented and stated in this presentation may contain forward-looking information. All information presented in this disclosure that is clearly not historical or is contingent upon future events is considered forward-looking information prepared as of the date of this presentation. It is based on management's opinions, estimates, and information available to management as of the date of this presentation. In certain cases, forward-looking information can be identified by the use of forward-looking terms such as "expect," "may," "might," "could," "will," "should," "intend," "anticipate," "potential," "propose," "estimate," and words, expressions, or similar phrases, including variations in negative form or specific grammar, or statements that certain events "may" or "will" occur, or when discussing strategies. Forward-looking information is based on a number of current internal expectations, estimates, projections, and assumptions, as well as beliefs that, where deemed reasonable by management, inherently involve uncertainty and business, economic, competitive, or other contingencies. Forward-looking information is not a guarantee of future performance and involves both known and unknown risks, uncertainties, and other factors (including risks and uncertainties disclosed in the Company's financial statements and Management's Discussion and Analysis available through the Company's website) that may cause actual results, performance, or achievements to differ materially from the future results, performance, or achievements expressed or implied by such forward-looking information. Any estimates, investment strategies, or views stated in this presentation are based on current market conditions and/or information provided by unrelated third parties and may change without prior notice. While certain information in this presentation is obtained from third-party sources, the Company has not independently verified this information, and there is a risk that assumptions made, and conclusions drawn by the Company based on such information are inaccurate. Unless required by law, the Company disclaims any obligation to update or revise any forward-looking information, whether as a result of new information, events, or otherwise. Readers are cautioned not to unduly rely on such forward-looking information.
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Agenda
1 President Director Remarks
2 Macro Economy Highlights 2023
3 Executive Summary
4 Guideline Strategic Direction
5 Digital Transformation
6 Key Performance Highlights
7 Timeline Turnaround
8 Key Takeaways
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Woo Yeul Lee President Director
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One KB Financial Group
KB Financial Group is a dominant player in multiple business segments.
Bank • KB Kookmin Bank • PT Bank KB Bukopin Tbk
Securities • KB Securities • PT KB Valbury Sekuritas
• KB Insurance
Insurance • Prudential Life Insurance
• PT Kookmin Best
Insurance Indonesia
• KB Life Insurance
Credit Card • KB Kookmin Card
• PT KB Finansia Multi
Finance (Kredit Plus)
• KB Asset Management
Investments • KB Real Estate Trust
• KB Investment
Specialized Credit • KB Capital
• PT Sunindo Kookmin
Best Finance
Savings Bank • KB Savings Bank
Non-Financial Ops.
• KB Data System • PT KB Data System
• KB Credit Information Indonesia
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Robby Mondong Vice President Director
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Macro Economic Highlights 2023
A Year of Various Challenges Due to Changes in Interest Rates and Geopolitical Situations
Mar 2023: Banking Crisis in the US and Europe
• Disruptions have emerged in the US banking system, marked by the failures of SVB,
Silvergate, and Signature Bank. The turmoil has subsequently spread to Europe, leading to
the collapse of Credit Suisse and Deutsche Bank
• The yields on US government bonds have plummeted following these disturbances, driven
by speculation of a Federal Funds Rate (FFR) cut later this year.
May 2023: US Debt Ceiling Crisis Q3-2023: High Interest Rates
• The increasing risk of default in • The Fed continues to
the US has led to volatility in the maintain high-interest
US bond market and an increase rates due to persistently
in yields on US government bonds. high levels of inflation.
OPEC+ Reduces Oil Production Oct 2023: Escalation of
Geopolitical Tensions
• OPEC+ has decided to cut oil
production due to a decline in • Geopolitical tensions
demand, leading to global volatility in the Middle East are
in oil prices. on the rise.
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Source: Mirae Asset Sekuritas, 2023
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Executive Summary
Achieving Various Positive Progress Amidst Challenges
Key Strengths Key Challenges
Solid Support from Shareholders Asset Quality and Banking Interest Rates
In the second quarter of 2023, KB Kookmin Bank, as the The sustained high-interest rates maintained by both The
controlling shareholder of BBKP, participated in PUT VII Fed and Bank Indonesia pose a significant challenge to
by injecting approximately Rp8 trillion out of a total of BBKP's efforts to improve asset quality. Nevertheless,
Rp12 trillion. This demonstrates the shareholders' until Q3-2023, BBKP has successfully reduced the
commitment to strengthening BBKP's capital structure. amount of loan at risk (LAR) by 23.37% year-on-year.
Strong Growth in the Wholesale Segment Regulatory Changes and Policies
The wholesale credit segment has been a primary driver In addition to high-interest rates, changes in the
of BBKP's credit growth. Until Q3-2023, the wholesale relaxation policies related to the Covid-19 pandemic
credit segment recorded a robust year-on-year growth of present challenges to BBKP's growth efforts. Full
12.90%. Opportunities from the Korean Business sector shareholder support has kept BBKP's capital structure
further contribute to optimistic growth in this segment. stable, with a capital adequacy ratio (CAR) of 33.16%
Digital Transformation until Q3-2023.
The positive response to the "KBstar" digital banking Sustainable Growth
application, with over 25 thousand downloads since its The wholesale segment serves as a gateway to drive
launch at the end of September 2023, affirms the growth in the SME and retail segments through strategic
positive outcomes of BBKP's comprehensive approaches such as cross-selling and building a banking
transformation program. services ecosystem.
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Guideline Strategic Direction
Vision of the Top 10 Bank in Indonesia
2024 Strategic
Direction Deep Change : Restore and Renew the Fundamentals
Core Strategy
Agenda
1 Deepening wholesale segment & 5 Continue cost hunt initiatives & 9 Strengthening fundamental risk 12 Increase Brand Awareness
anchor-linked SME& Retail Sales removal of fraudulent and compliance culture through Rebranding
procurement contracts
2 Improve sales competitiveness 10 Strengthen special asset 13 Leverage New App to Support
through CPC restructuring 6 Enhancement of people capacity management & DPD Management Digital Ecosystem through B2B &
and capability B2C partnership
3 Redesign performance-oriented 11 Pre-emptive action related to
corporate culture 7 Radical change of outlet strategy Covid 19 relaxation 14 Ensuring completion and
implementation of advance IT
4 Promotion profitable collaboration 8 Process innovation prior to NGBS infra [SHINE project]
between KBFG Affiliates & adoption
Subsidiary
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Digital Transformation – KBstar
Expanding Flexibility and Secure Banking Access for Customers
• Since its launch at the end of
September 2023, KBstar has
become the face of BBKP's digital
transformation. Focused on
enhancing banking services,
KBstar has been downloaded by
more than 25 thousand users
since its introduction.
• KBstar offers various
conveniences, such as an
efficient activation process, free
transactions for fund transfers
and e-wallet top-ups, and the
"Planning Account" feature for
effective financial goal planning.
• In the future, BBKP plans to align
initiatives for acquiring new users
with entertainment and Korean
cultural activities that have a high
acceptance rate in Indonesia.
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Shin Seng Hyup Chief Financial Officer
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Key Performance Highlight – 3Q/2023 (Bank Only)
Focus on Improving Asset Quality, with the Wholesale Segment Driving Credit Growth
Total Assets – (Rp tn.) Total Loan – (Rp tn.) Asset Quality
Wholesale MSME Retail LAR Ratio NPL Amount
84.37 84.70 81.11 78.33 56.87 54.56
76.76
90, 000 200 .00 70. 00%
80, 000
13.68 45.98 47.10 43.96 180 .00 65. 00%
70, 000 13.21 160 .00
65.12%
60. 00%
13.14
140 .00 55. 00%
60, 000
13.08 12.24
55.39%
120 .00 50. 00%
50, 000
25.75 22.70 53.50%
49.90%
100 .00 45. 00%
40, 000
14.19 15.83 11.25
43.96%
80. 00 40. 00%
30, 000
60. 00 35. 00%
20, 000
20.48
40. 00 30. 00%
17.44 18.64 18.71 18.14 5.78 5.82 4.86
10, 000
20. 00
3.02 4.07 25. 00%
0 0.0 0 20. 00%
2020 2021 2022 3Q22 3Q23 2020 2021 2022 3Q22 3Q23 2020 2021 2022 3Q22 3Q23
• In 2023, BBKP is committed to • BBKP's credit performance until the • Through asset quality improvement
enhancing fundamental quality third quarter of 2023 has been driven initiatives, BBKP has successfully
through asset optimization. by a year-on-year growth of 12.90% in reduced Loan at Risk (LAR) by
• Until Q3-2023, BBKP's transformation the wholesale segment. 23.37% year-on-year, bringing down
has successfully improved asset • Additionally, BBKP has recorded a the LAR ratio from 53.50% to 43.96%.
quality through various measures, new credit growth of 13.60% year-on- • The quality of BBKP's new credits has
including bulk sales and auctions of year, partly fueled by the expansion been consistently maintained since
low-quality assets, resulting in the of the Korean Link business the start of the transformation in
recovery of troubled assets amounting ecosystem, which has become a 2021, with a Non-Performing Loan
to approximately Rp10 trillion. customer of BBKP. (NPL) rate of less than 0.50%.
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Timeline Turnaround
Optimistic Progress in the Company's Strategic Performance Recovery Agenda
Asset Quality Sound Sustainable
Turnaround
Improvement Fundamental Performance
Focusing on enhancing Driving growth through
• CASA >27%
fundamental quality, strengthening human 2026
BBKP has launched the resources capacity and • NIM >2%
"KBstar." rebranding processes. • NPL Gross <7%
• NPL Net <4%
idAAA • CASA >25%
• Positive EAT Maintaining stable
• LAR <25%
✓ CAR stable >25% profitability at the industry
• NPL Gross <10%
✓ CASA >20% 2025 average with sustained
• NPL Net <5% performance growth.
✓ LAR <45% • Positive PPOP*
• NPL Gross <11% • CASA >30%
✓ NPL Net <5% 2024 Recording stable net
• NIM >3%
• NPL Gross <6%
profits and growth
3Q/2023 through business • NPL Net <3%
segment expansion. • Positive EAT
* Before Post Acquisition Management Cost 12
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Robby Mondong Vice President Director
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Key Takeaways
Solid Capital Sound Optimistic on Good Progress in
Structure Fundamental Growth Turnaround Timeline
BBKP's Capital Adequacy BBKP's strategic agenda to The performance of new Progress in BBKP's
Ratio (CAR) remains stable improve asset quality credits** indicates healthy transformation agenda is
at 33.16% or higher than the continues to show positive growth, with BBKP's new evident. We believe that
industry average of 27.33%*. progress. The level of risky credit portfolio expanding by initiatives such as rebranding,
This provides optimism for credits, or Loan at Risk 13.60% year-on-year. Until human resources capacity
pursuing strategic initiatives (LAR), has demonstrated a Q3-2023, BBKP's credit optimization, and business
in the future amid the year-on-year improvement performance grew in the collaboration with Korean
uncertainty of the global of 23.57%, enhancing the wholesale segment by Link are further strengthening
economic situation. LAR ratio from 53.50% to 12.90% year-on-year. BBKP's journey toward
43.96%. sustainable profitability.
* Based on data from the Indonesian ** New loans refer to loans taken out by
Banking Statistics (SPI) by OJK for the both new customers and existing
period of September 2023. customers who open a new loan
account.
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Thank You 감사합니다
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