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					ANNUAL REPORT 2011 PT BANk RAkyAT INdONEsIA (PERsERO) Tbk
ANNUAL REPORT 2011 PT BANk RAkyAT INdONEsIA (PERsERO) Tbk
 ANNUAL REPORT 2011 PTBANk RAkyAT INdONEsIA (PERsERO) Tbk
  ANNUAL REPORT 2011   BANk RAkyAT INdONEsIA (PERsERO) Tbk
ANNUAL REPORT 2011 PTPT BANk RAkyAT INdONEsIA (PERsERO) Tbk




                                                                                                                                  TABLE OF CONTENT
                                                                                                                                   TABLE OF CONTENT
                                                                                                                                  TABLE OF CONTENT
                                                                                                        The Largest, Spreading
                                                                                                        The Largest, Spreading
                                                                                                         The Largest, Spreading
                                                                                                        The Largest, Spreading
                                                                                                             Across the Nation
                                                                                                             Across the Nation
                                                                                                              Across the Nation
                                                                                                             Across the Nation        CHAPTER 1. 1.FOREWORD
                                                                                                                                      CHAPTER 1. FOREWORD
                                                                                                                                      CHAPTER 1. FOREWORD
                                                                                                                                       CHAPTER 1.FOREWORD
                                                                                                                                        CHAPTER FOREWORD
                                                                                                                                      BRI In InIn Brief
                                                                                                                                       BRI In Brief
                                                                                                                                        BRIIn Brief
                                                                                                                                                Brief
                                                                                                                                      BRIBRIBrief                                              4
                                                                                                                                                                                              444 4
                                                                                                                                        Company’s Vision, Mission & Culture
                                                                                                                                       Company’s Vision, Mission & Culture
                                                                                                                                      Company’s Vision, Mission & Culture
                                                                                                                                      Company’s Vision, Mission & &Culture
                                                                                                                                          Company’s Vision, Mission Culture
                                                                                                                                      Financial Highlights
                                                                                                                                       Financial Highlights
                                                                                                                                        Financial Highlights
                                                                                                                                          Financial Highlights
                                                                                                                                      Financial Highlights
                                                                                                                                                                                              666 6
                                                                                                                                                                                             10
                                                                                                                                                                                               6
                                                                                                                                                                                              10
                                                                                                                                                                                             10 10
                                                                                                                                                                                               10            The Largest, Spreading
                                                                                                                                                                                                            The Largest, Spreading
                                                                                                                                                                                                            The Largest, Spreading
                                                                                                                                                                                                             The Largest, Spreading
                                                                                                                                       Share Highlights
                                                                                                                                        Share Highlights
                                                                                                                                      Share Highlights
                                                                                                                                      Share Highlights
                                                                                                                                          Share Highlights
                                                                                                                                          Bonds Highlights
                                                                                                                                        Bonds Highlights
                                                                                                                                       Bonds Highlights
                                                                                                                                      Bonds Highlights
                                                                                                                                      Bonds Highlights
                                                                                                                                                                                             12
                                                                                                                                                                                             12 12
                                                                                                                                                                                               12
                                                                                                                                                                                              12
                                                                                                                                                                                             13
                                                                                                                                                                                              13
                                                                                                                                                                                             13 13
                                                                                                                                                                                               13
                                                                                                                                                                                                             Across the Nation
                                                                                                                                                                                                            Across the Nation
                                                                                                                                                                                                            Across the Nation
                                                                                                                                                                                                             Across the Nation
                                                                                                                                      Report ofoftheBoard ofofCommissioners
                                                                                                                                      Report of the the BoardCommissioners
                                                                                                                                       Report of the Board of Commissioners
                                                                                                                                        Report of Board of of Commissioners
                                                                                                                                          Report the Board Commissioners                     14
                                                                                                                                                                                              14
                                                                                                                                                                                               14
                                                                                                                                                                                             14 14
                                                                                                                                      Report On On The Supervisory Duties of
                                                                                                                                      Report On The Supervisory Duties ofof
                                                                                                                                       Report On The Supervisory Duties of
                                                                                                                                        Report OnThe Supervisory Duties of
                                                                                                                                          Report The Supervisory Duties                      16
                                                                                                                                                                                              16
                                                                                                                                                                                               16
                                                                                                                                                                                             16 16
                                                                                                                                      Board of Commissioners
                                                                                                                                       Board of Commissioners
                                                                                                                                        Board of Commissioners
                                                                                                                                          Board Commissioners
                                                                                                                                      Board ofofCommissioners
                                                                                                                                      Profile ofofTheBoard ofofCommissioners
                                                                                                                                      Profile of TheThe BoardCommissioners
                                                                                                                                       Profile of The Board of Commissioners
                                                                                                                                        Profile of Board of of Commissioners
                                                                                                                                          Profile The Board Commissioners                    20
                                                                                                                                                                                              20
                                                                                                                                                                                               20
                                                                                                                                                                                             20 20
                                                                                                                                      Message From
                                                                                                                                      Message From
                                                                                                                                       Message From
                                                                                                                                        Message From
                                                                                                                                          Message From                                       24
                                                                                                                                                                                              24
                                                                                                                                                                                               24
                                                                                                                                                                                             24 24
                                                                                                                                      The President Director
                                                                                                                                       The President Director
                                                                                                                                        ThePresident Director
                                                                                                                                             President Director
                                                                                                                                      TheThe President Director
                                                                                                                                      Profile ofofTheDirectors
                                                                                                                                      Profile of TheThe Directors
                                                                                                                                       Profile of The Directors
                                                                                                                                        Profile of Directors
                                                                                                                                          Profile The Directors                              34
                                                                                                                                                                                              34
                                                                                                                                                                                               34
                                                                                                                                                                                             34 34
                                                                                                                                      Statement ofofResponsibility
                                                                                                                                      Statement of Responsibility
                                                                                                                                       Statement of Responsibility
                                                                                                                                        Statement of Responsibility
                                                                                                                                          Statement Responsibility                           40
                                                                                                                                                                                              40
                                                                                                                                                                                               40
                                                                                                                                                                                             40 40
                                                                                                                                      For Financial Reporting ofoftheBoard ofof
                                                                                                                                       For Financial Reporting of the Board of
                                                                                                                                        ForFinancial Reporting of of Board of
                                                                                                                                             Financial Reporting the Board
                                                                                                                                      ForFor Financial Reportingthe the Board of




                                                                The Largest, Spreading
                                                                The Largest, Spreading
                                                                The Largest, Spreading
                                                                The Largest, Spreading
                                                                The Largest, Spreading
                                                                                                                                      Commissioners
                                                                                                                                       Commissioners
                                                                                                                                        Commissioners
                                                                                                                                          Commissioners
                                                                                                                                      Commissioners
                                                                                                                                      Statement ofofResponsibility
                                                                                                                                      Statement of Responsibility
                                                                                                                                       Statement of Responsibility
                                                                                                                                        Statement of Responsibility
                                                                                                                                          Statement Responsibility                           41
                                                                                                                                                                                              41
                                                                                                                                                                                               41
                                                                                                                                                                                             41 41
                                                                                                                                      For Financial Reporting ofoftheBoard ofofDirector
                                                                                                                                       For Financial Reporting of the Board of Director
                                                                                                                                        ForFinancial Reporting of of Board of of Director
                                                                                                                                             Financial Reporting the Board Director
                                                                                                                                      ForFor Financial Reportingthe the BoardDirector




                                                                  Across the Nation
                                                                  Across the Nation
                                                                  Across the Nation
                                                                  Across the Nation
                                                                  Across the Nation
                                                                                                                                      CHAPTER 2. COMPANY PROFILE
                                                                                                                                      CHAPTER 2. COMPANY PROFILE
                                                                                                                                       CHAPTER 2.COMPANY PROFILE
                                                                                                                                        CHAPTER COMPANY PROFILE
                                                                                                                                      CHAPTER 2. 2.COMPANYPROFILE
                                                                                                                                      Company’s General Information
                                                                                                                                       Company’s General Information
                                                                                                                                        Company’s General Information
                                                                                                                                         Company’s General Information
                                                                                                                                           Company’s General Information                     44
                                                                                                                                                                                              44
                                                                                                                                                                                               44
                                                                                                                                                                                             44 44
                                                                                                                                      Banking Product and Service
                                                                                                                                       Banking Product and Service
                                                                                                                                        Banking Product and Service
                                                                                                                                         Banking Product and Service
                                                                                                                                           Banking Product and Service                       45
                                                                                                                                                                                              45
                                                                                                                                                                                               45
                                                                                                                                                                                             45 45
                                                                                                                                      Organizational Structure
                                                                                                                                       Organizational Structure
                                                                                                                                        Organizational Structure
                                                                                                                                         Organizational Structure
                                                                                                                                           Organizational Structure                          46
                                                                                                                                                                                              46
                                                                                                                                                                                               46
                                                                                                                                                                                             46 46
                                                                                                                                      Senior Executives
                                                                                                                                       Senior Executives
                                                                                                                                        Senior Executives
                                                                                                                                         Senior Executives
                                                                                                                                           Senior Executives                                 48
                                                                                                                                                                                              48
                                                                                                                                                                                               48
                                                                                                                                                                                             48 48
                                                                                                                                      Networks
                                                                                                                                       Networks
                                                                                                                                        Networks
                                                                                                                                         Networks
                                                                                                                                           Networks                                          50
                                                                                                                                                                                              50
                                                                                                                                                                                               50
                                                                                                                                                                                             50 50
                                                                                                                                      BRIBRI Networks
                                                                                                                                       BRI Networks
                                                                                                                                        BRI Networks
                                                                                                                                         BRINetworks
                                                                                                                                              Networks                                       52
                                                                                                                                                                                              52
                                                                                                                                                                                               52
                                                                                                                                                                                             52 52
                                                                                                                                      Human Resources
                                                                                                                                       Human Resources
                                                                                                                                        Human Resources
                                                                                                                                         Human Resources
                                                                                                                                           Human Resources                                   54
                                                                                                                                                                                              54
                                                                                                                                                                                               54
                                                                                                                                                                                             54 54
                                                                                                                                      Information ToToShareholders
                                                                                                                                       Information To Shareholders
                                                                                                                                        Information ToTo Shareholders
                                                                                                                                         Information Shareholders
                                                                                                                                           Information Shareholders                          55
                                                                                                                                                                                              55
                                                                                                                                                                                               55
                                                                                                                                                                                             55 55
                                                                                                                                              Dividend Payment
                                                                                                                                               Dividend Payment
                                                                                                                                                Dividend Payment
                                                                                                                                                 Dividend Payment
                                                                                                                                                   Dividend Payment                          55
                                                                                                                                                                                              55
                                                                                                                                                                                               55
                                                                                                                                                                                             55 55
                                                                                                                                              BRIBRI 2011 AGMS
                                                                                                                                                 BRI2011 AGMS
                                                                                                                                                BRI 2011 AGMS
                                                                                                                                               BRI 2011 AGMS
                                                                                                                                                      2011 AGMS                               56
                                                                                                                                                                                             56
                                                                                                                                                                                             56 56
                                                                                                                                                                                               56
                                                                                                                                              BRIBRI 2011 EGMS
                                                                                                                                               BRI 2011 EGMS
                                                                                                                                                BRI 2011 EGMS
                                                                                                                                                 BRI2011 EGMS
                                                                                                                                                      2011 EGMS                              57
                                                                                                                                                                                              57
                                                                                                                                                                                               57
                                                                                                                                                                                             57 57
                                                                                                                                              Issuance ofofRupiahSubordinated Debt
                                                                                                                                               Issuance of Rupiah Subordinated Debt
                                                                                                                                                Issuance of Rupiah Subordinated Debt
                                                                                                                                                 Issuance of Rupiah Subordinated Debt
                                                                                                                                                   Issuance Rupiah Subordinated Debt         58
                                                                                                                                                                                              58
                                                                                                                                                                                               58
                                                                                                                                                                                             58 58
                                                                                                                                              Chronology ofofShareListing
                                                                                                                                               Chronology of Share Listing
                                                                                                                                                Chronology of Share Listing
                                                                                                                                                 Chronology of Share Listing
                                                                                                                                                   Chronology Share Listing                  59
                                                                                                                                                                                              59
                                                                                                                                                                                               59
                                                                                                                                                                                             59 59
                                                                                                                                              Management Stock Option Plan
                                                                                                                                               Management Stock Option Plan
                                                                                                                                                Management Stock Option Plan
                                                                                                                                                 Management Stock Option Plan
                                                                                                                                                   Management Stock Option Plan              59
                                                                                                                                                                                              59
                                                                                                                                                                                               59
                                                                                                                                                                                             59 59
                                                                                                                                              Share Ownership
                                                                                                                                               Share Ownership
                                                                                                                                                Share Ownership
                                                                                                                                                 Share Ownership
                                                                                                                                                   Share Ownership                           61
                                                                                                                                                                                              61
                                                                                                                                                                                               61
                                                                                                                                                                                             61 61
                                                                                                                                      Subsidiaries
                                                                                                                                       Subsidiaries
                                                                                                                                        Subsidiaries
                                                                                                                                         Subsidiaries
                                                                                                                                           Subsidiaries                                      62
                                                                                                                                                                                              62
                                                                                                                                                                                               62
                                                                                                                                                                                             62 62
                                                                                                                                      Public Accounting Firm and Capital Market
                                                                                                                                       Public Accounting Firm and Capital Market
                                                                                                                                        Public Accounting Firm and Capital Market
                                                                                                                                         Public Accounting Firm and Capital Market
                                                                                                                                           Public Accounting Firm and Capital Market         63
                                                                                                                                                                                              63
                                                                                                                                                                                               63
                                                                                                                                                                                             63 63
                                                                                                                                       Supporting Institutions
                                                                                                                                        Supporting Institutions
                                                                                                                                         Supporting Institutions
                                                                                                                                           Supporting Institutions
                                                                                                                                      Supporting Institutions
                                                                                                                                      Significant Events
                                                                                                                                       Significant Events
                                                                                                                                        Significant Events
                                                                                                                                         Significant Events
                                                                                                                                           Significant Events                                64
                                                                                                                                                                                              64
                                                                                                                                                                                               64
                                                                                                                                                                                             64 64
                                                                                                                                      Awards
                                                                                                                                       Awards
                                                                                                                                        Awards
                                                                                                                                         Awards
                                                                                                                                           Awards                                            66
                                                                                                                                                                                              66
                                                                                                                                                                                               66
                                                                                                                                                                                             66 66

                                                                                                                                      CHAPTER 3. 3.MANAGEMENTDISCUSSION
                                                                                                                                      CHAPTER 3.MANAGEMENT DISCUSSION
                                                                                                                                       CHAPTER MANAGEMENT DISCUSSION
                                                                                                                                        CHAPTER MANAGEMENT DISCUSSION
                                                                                                                                      CHAPTER 3.3.MANAGEMENT DISCUSSION
                                                                                                                                      AND ANALYSIS
                                                                                                                                      AND ANALYSIS
                                                                                                                                       AND ANALYSIS
                                                                                                                                        AND ANALYSIS
                                                                                                                                      AND ANALYSIS
                                                                                                                                      General Overview
                                                                                                                                      General Overview
                                                                                                                                       General Overview
                                                                                                                                          General Overview
                                                                                                                                        General Overview                                      70
                                                                                                                                                                                              70
                                                                                                                                                                                             70 70
                                                                                                                                                                                               70
                                                                                                                                      Financial Review
                                                                                                                                      Financial Review
                                                                                                                                       Financial Review
                                                                                                                                          Financial Review
                                                                                                                                        Financial Review                                      73
                                                                                                                                                                                              73
                                                                                                                                                                                             73 73
                                                                                                                                                                                               73
                                                                                                                                           Income Statement
                                                                                                                                            Income Statement
                                                                                                                                             Income Statement
                                                                                                                                                Income Statement
                                                                                                                                              Income Statement                                73
                                                                                                                                                                                              73
                                                                                                                                                                                             73 73
                                                                                                                                                                                               73
                                                                                                                                           Financial Condition
                                                                                                                                            Financial Condition
                                                                                                                                             Financial Condition
                                                                                                                                                Financial Condition
                                                                                                                                              Financial Condition                             78
                                                                                                                                                                                              78
                                                                                                                                                                                             78 78
                                                                                                                                                                                               78
                                                                                                                                           Cash Flows Information
                                                                                                                                            Cash Flows Information
                                                                                                                                             Cash Flows Information
                                                                                                                                                Cash Flows Information
                                                                                                                                              Cash Flows Information                          84
                                                                                                                                                                                              84
                                                                                                                                                                                             84 84
                                                                                                                                                                                               84
                                                                                                                                           Financial Ratios
                                                                                                                                             Financial Ratios
                                                                                                                                            Financial Ratios
                                                                                                                                                Financial Ratios
                                                                                                                                              Financial Ratios                                85
                                                                                                                                                                                              85
                                                                                                                                                                                             85 85
                                                                                                                                                                                               85
                                                                                                                                           Other Financial Information
                                                                                                                                            Other Financial Information
                                                                                                                                             Other Financial Information
                                                                                                                                                Other Financial Information
                                                                                                                                              Other Financial Information                     87
                                                                                                                                                                                              87
                                                                                                                                                                                             87 87
                                                                                                                                                                                               87
                                                                                                                                      Business Review
                                                                                                                                      Business Review
                                                                                                                                       Business Review
                                                                                                                                          Business Review
                                                                                                                                        Business Review                                       88
                                                                                                                                                                                              88
                                                                                                                                                                                             88 88
                                                                                                                                                                                               88
PT Bank Rakyat Indonesia (Persero) Tbk.
 PT Bank Rakyat Indonesia (Persero) Tbk.
   PTBank Rakyat Indonesia (Persero) Tbk.
         Bank Rakyat Indonesia (Persero) Tbk.
PTPT Bank Rakyat Indonesia (Persero) Tbk.                                                                                                  Micro, Small & &MediumSized Business
                                                                                                                                            Micro, Small & Medium Sized Business
                                                                                                                                             Micro, Small & Medium Sized Business
                                                                                                                                              Micro, Small & Medium Sized Business
                                                                                                                                                Micro, Small Medium Sized Business            88
                                                                                                                                                                                              88
                                                                                                                                                                                             88 88
                                                                                                                                                                                               88
BRI IIIBuilding
 BRI Building
   BRI I Building
          I Building
BRIBRIBuilding                                                                                                                             Consumer Business
                                                                                                                                            Consumer Business
                                                                                                                                             Consumer Business
                                                                                                                                                Consumer Business
                                                                                                                                              Consumer Business                               96
                                                                                                                                                                                              96
                                                                                                                                                                                             96 96
                                                                                                                                                                                               96
                                                                   Annual
                                                                   Annual
                                                                   Annual
                                                                   Annual
                                                                   Annual
                                                                   Report
                                                                   Report
                                                                   Report
                                                                   Report
                                                                   Report


                                                                                                                                            Corporate Business
                                                                                                                                             Corporate Business
                                                                                                                                                Corporate Business
                                                                                                                                           Corporate Business
                                                                                                                                              Corporate Business                            104
                                                                                                                                                                                            104
                                                                                                                                                                                             104
                                                                                                                                                                                               104
                                                                                                                                                                                              104
Jl. Jenderal Sudirman No. 44-46 Jakarta 10210, Indonesia
 Jl. Jenderal Sudirman No. 44-46 Jakarta 10210, Indonesia
     Jl. Jenderal Sudirman No. 44-46 Jakarta 10210, Indonesia
       Jenderal Sudirman No. 44-46 Jakarta 10210, Indonesia
Jl.Jl.JenderalSudirman No. 44-46 Jakarta 10210, Indonesia
                                                                                                                                            International Business
                                                                                                                                             International Business
                                                                                                                                                International Business
                                                                                                                                           International Business
                                                                                                                                              International Business                        112
                                                                                                                                                                                            112
                                                                                                                                                                                             112
                                                                                                                                                                                               112
                                                                                                                                                                                              112
Phone: (62-21) 251 0244, 251 0254
 Phone: (62-21) 251 0244, 251 0254
   Phone: (62-21) 251 0244, 251 0254
     Phone: (62-21) 251 0244, 251 0254
Phone: (62-21) 251 0244, 251 0254
Facsimile (62-21) 250 0065, 250 0077
 Facsimile :(62-21) 250 0065, 250 0077
   Facsimile (62-21) 250 0065, 250 0077
     Facsimile : (62-21) 250 0065, 250 0077
Facsimile :::(62-21) 250 0065, 250 0077
Website www.bri.co.id
 Website :www.bri.co.id
   Website www.bri.co.id
     Website : www.bri.co.id
Website :::www.bri.co.id
                                                                  2011
                                                                  2011
                                                                  2011
                                                                  2011
                                                                  2011



Corporate secretariat
 Corporate secretariat
   Corporate secretariat
     Corporate secretariat
Corporate secretariat
BRIBRIBuilding20thththFloor
 BRI Building 20th Floor
          I Building Floor
   BRI I Building 20 Floor
BRI IIIBuilding 2020th Floor
Jl. Jenderal Sudirman No. 44-46 Jakarta 10210, Indonesia
Jl.Jl.JenderalSudirman No. 44-46 Jakarta 10210, Indonesia
       Jenderal Sudirman No. 44-46 Jakarta 10210, Indonesia
     Jl. Jenderal Sudirman No. 44-46 Jakarta 10210, Indonesia
 Jl. Jenderal Sudirman No. 44-46 Jakarta 10210, Indonesia
Phone: (62-21) 575 1966
 Phone: (62-21) 575 1966
Phone: (62-21) 575 1966
   Phone: (62-21) 575 1966
     Phone: (62-21) 575 1966
                                                                                         Annual
                                                                                         Annual
                                                                                          Annual
                                                                                         Report
                                                                                          Report
                                                                                          Report2011
                                                                                                 2011
                                                                                                2011
                                                                                           Annual
                                                                                           Report                                               ANNUAL REPORT 2011
                                                                                                                                                ANNUAL REPORT 2011
                                                                                                                                                 ANNUAL REPORT 2011
                                                                                                                                                  ANNUAL REPORT 2011
                                                                                                                                                   ANNUAL REPORT 2011               PT BANK RAKYAT INDONESIA (((PERSERO Tbk.
                                                                                                                                                                                     PT BANK RAKYAT INDONESIA PERSERO )Tbk.
                                                                                                                                                                                      PTBANK RAKYAT INDONESIA ( PERSERO Tbk.
                                                                                                                                                                                         BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                                                                    PT PT BANK RAKYAT INDONESIAPERSERO)))Tbk.
Facsimile (62-21) 570 0916
 Facsimile :(62-21) 570 0916
   Facsimile (62-21) 570 0916
     Facsimile : (62-21) 570 0916
Facsimile :::(62-21) 570 0916
    TABLE OF CONTENT
     TABLE CONTENT
  TABLE OFOFCONTENT
              Treasury and Capital Market
    Treasury and Capital Market Service
    Treasury andTreasury Market Service Service 118
                   Capital and Capital Market Service 118             Board        Board
                                                                                Board of
                                                                   118Board of Directors Directors
                                                                     118 of Directors of Directors                             174
                                                                                                                               174     174
                                                                                                                                         174                                                                              CHAPTER 5. CORPORATE SOCIAL RESPONSIBILITY
                                                                                                                                               Realization of Human Resources Policy Committee Committee 190 CHAPTER 5. CORPORATE SOCIAL RESPONSIBILITY
                                                                                                                                                                                                                             CHAPTER 5. CORPORATE SOCIAL RESPONSIBILITY
                                                                                                                                                         Realization Resources Policy Committee
                                                                                                                                                             Realization of Human Resources Policy 190
                                                                                                                                               Realization of Humanof Human Resources Policy Committee   190   190
            Operational Review
Operational Review
Operational Review Review
         Operational                                  122
                                                     122             122 ExecutionExecution and Responsibilities of
                                                                   122      Execution of Execution Duties and Responsibilities 174
                                                                                           Duties and Duties and Responsibilities of
                                                                                        of Duties of ofResponsibilities of     174
                                                                                                                               of      174
                                                                                                                                         174   Work Plan
                                                                                                                                               Work Plan Work Plan
                                                                                                                                                         Work Plan
                                                                                                                                                                                                                  Partnership Program
                                                                                                                                                                                                                           Partnership
                                                                                                                                                                                                                              Partnership Program
                                                                                                                                                                                                                 Partnership Program Program                            229
                                                                                                                                                                                                                                                                        229   229
                                                                                                                                                                                                                                                                            229
    Human Resources
              Human Resources
                 Human
    Human Resources Resources                        122
                                                      122                   Board of Directors of Directors
                                                                     122 Board of Directors Directors
                                                                                       Board of
                                                                                           Board
                                                                   122                                                                            Job Evaluation Committee
                                                                                                                                                              Job Evaluation Committee
                                                                                                                                                                 Job Evaluation
                                                                                                                                                  Job Evaluation Committee Committee                    190
                                                                                                                                                                                                         190   190
                                                                                                                                                                                                             190
                                                                                                                                                                                                                  BRI CaresBRI Cares
                                                                                                                                                                                                                 BRI Cares BRI Cares                                    229
                                                                                                                                                                                                                                                                        229   229
                                                                                                                                                                                                                                                                            229
    Network andNetwork and Services
              Network and
                   Services
    Network and Services Services                    128
                                                      128                  Number, Composition, Criteria and
                                                                                      Number, Composition, Criteria and
                                                                                          Number, Composition,
                                                                     128 Number, Composition, Criteria and Criteria and 174
                                                                   128                                                         174     174
                                                                                                                                         174                     Duties and Responsibilities of Job
                                                                                                                                                              Duties and Responsibilities of Job Evaluation
                                                                                                                                                  Duties and Responsibilities of Job Evaluation
                                                                                                                                                  Duties and Responsibilities of Job Evaluation Evaluation
                                                                                                                                                                                                         190
                                                                                                                                                                                                        190  190
                                                                                                                                                                                                               190
                                                                                                                                                                                                                       BRI Cares for Cares for for Public Facilities
                                                                                                                                                                                                                       BRI Cares for Public Facilities Facilities
                                                                                                                                                                                                                                BRI Public Facilities
                                                                                                                                                                                                                                   BRI Cares Public                     230
                                                                                                                                                                                                                                                                        230   230
                                                                                                                                                                                                                                                                            230
                 Information System
    Information System Technology
    Information System Technology Technology
              Information System Technology          132
                                                      132            132 Independency of Members Members of thethe Board of
                                                                                      Independency of of the Board of
                                                                           Independency of Members of Members of Board of
                                                                                          Independency      the Board of
                                                                   132                                                                            Committee Committee
                                                                                                                                                  Committee   Committee
                                                                                                                                                                                                                       BRI Cares amid Naturalamid Natural Disaster 230
                                                                                                                                                                                                                       BRI Cares amid Natural Disaster Disaster
                                                                                                                                                                                                                                BRI Cares amid Natural
                                                                                                                                                                                                                                   BRI Cares Disaster                   230   230
                                                                                                                                                                                                                                                                            230
    Operational Center Center
              Operational
    Operational Center
                 Operational Center                  138
                                                      138            138 Directors Directors
                                                                           Directors Directors
                                                                   138                                                                            Job Evaluation Committee Work Plan
                                                                                                                                                                 Job Evaluation Committee
                                                                                                                                                              Job Evaluation Committee Work Plan
                                                                                                                                                  Job Evaluation Committee Work Plan Work Plan 190       190 190
                                                                                                                                                                                                               190
                                                                                                                                                                                                                       BRI Cares for Cares for for Education
                                                                                                                                                                                                                       BRI Cares for EducationEducation
                                                                                                                                                                                                                                BRI Education
                                                                                                                                                                                                                                   BRI Cares                            230
                                                                                                                                                                                                                                                                        230   230
                                                                                                                                                                                                                                                                            230
    Management of Fixed Assets and Logistics Logistics
              Management of Fixed Assets and
                 Management of and Assets and 139
    Management of Fixed AssetsFixedLogistics Logistics139                  Duties and Responsibilities of Directors of Directors
                                                                     139 Duties and Responsibilities of Directors Directors 174
                                                                                      Duties and Responsibilities of
                                                                                          Duties and Responsibilities
                                                                   139                                                         174       174
                                                                                                                                       174        Meeting Frequency of Job Evaluation Committee Committee190
                                                                                                                                                  Meeting Frequency of Job Evaluation Committee 190
                                                                                                                                                              Meeting Frequency of Job Evaluation Committee
                                                                                                                                                                 Meeting Frequency of Job Evaluation 190       190
                                                                                                                                                                                                                       BRI Cares for Cares for for Public Health
                                                                                                                                                                                                                       BRI Cares for Public Health Health
                                                                                                                                                                                                                                BRI Public Health
                                                                                                                                                                                                                                   BRI Cares Public                     230
                                                                                                                                                                                                                                                                        230   230
                                                                                                                                                                                                                                                                            230
    Risk Management
              Risk Management
                 Risk Management
    Risk Management                                  144
                                                      144            144
                                                                   144     Meeting of the Boardof Directors of Directors
                                                                                      Meeting of of Directors
                                                                                          Meeting of Board of
                                                                           Meeting of the Boardthethe Board Directors          176
                                                                                                                               176     176
                                                                                                                                         176   Relationship Between Board of Commissioners
                                                                                                                                               Relationship Relationship Between Board Commissioners
                                                                                                                                                         Relationship Between Commissioners
                                                                                                                                                              Between Board of Board of of Commissioners 191
                                                                                                                                                                                                        191  191
                                                                                                                                                                                                               191
                                                                           Formation and Execution of Execution of Duties 178
                                                                           FormationFormation and Execution of Duties of of 178
                                                                                          Formation and Duties
                                                                                        and Execution of Duties of                     178
                                                                                                                                         178             and Board of
                                                                                                                                                             and Board
                                                                                                                                               and Board of Directors of Directors
                                                                                                                                               and Board of Directors Directors                                        BRI Cares for Religious Facilities Facilities
                                                                                                                                                                                                                                   BRI Cares Facilities
                                                                                                                                                                                                                                BRI Religious Religious                 230
                                                                                                                                                                                                                       BRI Cares for Cares for for Religious Facilities 230 230
                                                                                                                                                                                                                                                                              230
                                                                                           under the BOD
                                                                           Committees under the under the BOD
                                                                           Committees Committees under the BOD
                                                                                      Committees BOD                                                         Corporate
                                                                                                                                                         Corporate Secretariat
                                                                                                                                               Corporate Secretariat
                                                                                                                                               Corporate Secretariat Secretariat                         193
                                                                                                                                                                                                        193  193
                                                                                                                                                                                                               193     BRI Cares for Natural Conservation
                                                                                                                                                                                                                                   BRI Cares Natural Conservation
                                                                                                                                                                                                                                BRI Natural Conservation                230
                                                                                                                                                                                                                       BRI Cares for Cares for for Natural Conservation 230 230
                                                                                                                                                                                                                                                                              230
                                                                                   Risk Management Committee (RMC)
                                                                      Risk Management Committee (RMC) (RMC)
                                                                                Risk Management Committee
                                                                      Risk Management Committee (RMC)                          178
                                                                                                                               178     178
                                                                                                                                         178      Function of Corporateof Corporate Secretariat
                                                                                                                                                                 Function Secretariat
                                                                                                                                                              Function of Corporate Secretariat
                                                                                                                                                  Function of Corporate Secretariat                      193
                                                                                                                                                                                                        193  193
                                                                                                                                                                                                               193              The Community Development Program of
                                                                                                                                                                                                                       The Community Development Program of
                                                                                                                                                                                                                       The Community Development Program of Program of
                                                                                                                                                                                                                                   The Community Development
                                                                                                                                                                                                                                                                        231
                                                                                                                                                                                                                                                                        231   231
                                                                                                                                                                                                                                                                            231
                                                                                        Structure and of Committees
                                                                          Structure and MembershipMembership of Committees
                                                                          Structure Structure and Membership of Committees179
                                                                                    and Membership of Committees               179       179
                                                                                                                                       179                                                                             SOE Cares
                                                                                                                                                                                                                       SOE Cares SOE Cares
                                                                                                                                                                                                                                SOE Cares
CHAPTER 4. CORPORATE GOVERNANCE
            CHAPTER 4. CORPORATE GOVERNANCE
               CHAPTER 4. CORPORATE GOVERNANCE                                                                                                                   Profile Secretary
                                                                                                                                                  Profile of Corporateof Corporate Secretary
                                                                                                                                                              Profile of Corporate
                                                                                                                                                  Profile of Corporate Secretary Secretary              195
                                                                                                                                                                                                         195 195
                                                                                                                                                                                                               195
                                                                          Operational Risk Management Committee
                                                                          Operational Risk Management Committee Committee
                                                                                        Operational Risk Management
                                                                                    Operational Risk Management Committee179   179       179
                                                                                                                                       179                                                                                      BRI Culture
                                                                                                                                                                                                                       BRI Cares for Culture Culture
                                                                                                                                                                                                                       BRI Cares for Cares for for Culture
                                                                                                                                                                                                                                   BRI Cares                            231
                                                                                                                                                                                                                                                                        231   231
                                                                                                                                                                                                                                                                            231
                                                                                                                                               Application of Compliance, Internal Audit
                                                                                                                                                         Application of Compliance, Internal Audit
                                                                                                                                                             Application of Internal Audit
                                                                                                                                               Application of Compliance,Compliance, Internal Audit 198  198   198
                                                                                                                                                                                                             198
 Introduction
Introduction Introduction
             Introduction                                    152
                                                             152       152
                                                                    152 Credit Risk Management Committee Committee 179
                                                                                        Credit Risk Management
                                                                                    Credit Risk Management Committee
                                                                          Credit Risk Management Committee                     179       179
                                                                                                                                       179               andAudit
                                                                                                                                               and External Audit
                                                                                                                                               and Externaland External Audit
                                                                                                                                                               External Audit                                                   BRI Sport
                                                                                                                                                                                                                       BRI Cares for Sport
                                                                                                                                                                                                                       BRI Cares for Cares for for Sport
                                                                                                                                                                                                                                   BRI Cares Sport
                                                                                                                                                                                                                                                                        231
                                                                                                                                                                                                                                                                        231   231
                                                                                                                                                                                                                                                                            231
 Governance Structure Structure
                 Structure
Governance Governance Structure
             Governance                                      154
                                                             154       154
                                                                    154 Market Risk Management Committee Committee 179
                                                                                    Market Risk Management Committee
                                                                                         Management Committee
                                                                          Market Risk Market Risk Management                   179       179
                                                                                                                                       179        Function of Compliance Compliance
                                                                                                                                                  Function of Compliance
                                                                                                                                                              Function of Compliance
                                                                                                                                                                 Function of                             198
                                                                                                                                                                                                        198    198
                                                                                                                                                                                                             198
                                                                                                                                                                                                                          CHAPTERSUBSIDIARY
                                                                                                                                                                                                                 CHAPTER 6.  CHAPTER 6. SUBSIDIARY
                                                                                                                                                                                                                                          6.           SUBSIDIARY
 General Meeting of Shareholders (GMS)
                 General Meeting of Shareholders (GMS) 154
General Meeting of Shareholders (GMS) (GMS)
             General Meeting of Shareholders                 154       154
                                                                    154 Duties and Responsibilities of RMC of RMC
                                                                                    Duties and Responsibilities
                                                                                        Duties and Responsibilities of RMC
                                                                          Duties and Responsibilities of RMC                   180
                                                                                                                               180       180
                                                                                                                                       180        Internal Audit Function Function
                                                                                                                                                  Internal Audit Function
                                                                                                                                                              Internal Audit
                                                                                                                                                                 Internal Audit Function                 202
                                                                                                                                                                                                        202    202
                                                                                                                                                                                                             202
     BRI AGMS of AGMS of 2011
                 BRI 2011
                    BRI AGMS of 2011
      BRI AGMS of 2011                                       154
                                                             154       154
                                                                    154 Work Plan ofWork Plan RMC in 2011
                                                                                          RMC 2011
                                                                                    Work Planin 2011
                                                                          Work Plan of RMC inof of RMC in 2011                 180
                                                                                                                               180     180
                                                                                                                                         180                     Whistle-blower System
                                                                                                                                                  Whistle-blower System System
                                                                                                                                                  Whistle-blower System
                                                                                                                                                              Whistle-blower                            205
                                                                                                                                                                                                         205                  Bank BRISyariah
                                                                                                                                                                                                               205 Bank BRISyariah
                                                                                                                                                                                                                  PT       PT PT Bank
                                                                                                                                                                                                             205 PT Bank BRISyariah BRISyariah                          234
                                                                                                                                                                                                                                                                        234   234
                                                                                                                                                                                                                                                                            234
     BRI EGMS of EGMS of 2011
                    BRI EGMS of 2011
                 BRI 2011
      BRI EGMS of 2011                                       157
                                                             157       157
                                                                    157 Frequency of Meetings Meetings and Sub-RMC
                                                                                    Frequency of of Meetings and
                                                                          Frequency of Meetings and Sub-RMC Sub-RMC 180
                                                                                        Frequency and Sub-RMC                  180     180
                                                                                                                                         180                     External Audit Function
                                                                                                                                                              External Audit
                                                                                                                                                  External Audit Function
                                                                                                                                                  External Audit Function Function                      207
                                                                                                                                                                                                         207                  Bank Agroniaga Tbk
                                                                                                                                                                                                               207 Bank Agroniaga Tbk
                                                                                                                                                                                                                  PT       PT PT Bank Agroniaga Tbk
                                                                                                                                                                                                             207 PT Bank Agroniaga Tbk                                  235
                                                                                                                                                                                                                                                                        235   235
                                                                                                                                                                                                                                                                            235
      Board of Commissioners
     Board of Commissioners
                     Board of Commissioners
                  Board of Commissioners                     158
                                                             158    158158
                                                                      Assets and Liabilities Liabilities Committees
                                                                      Assets and Liabilities Committees Committees
                                                                                   Assets and Liabilities
                                                                                Assets and Committees                          182
                                                                                                                               182       182
                                                                                                                                       182               Implementation of Risk Management
                                                                                                                                                             Implementation of Risk Management
                                                                                                                                               Implementation of Risk Management Including Including
                                                                                                                                               Implementation of Risk Management Including Including     209
                                                                                                                                                                                                        209                   BRIngin Remittance Co. Ltd.
                                                                                                                                                                                                                           BRIngin Remittance
                                                                                                                                                                                                                  BRIngin Remittance Co. Ltd.
                                                                                                                                                                                                             209 BRIngin Remittance Co. Ltd. Co. Ltd.
                                                                                                                                                                                                               209                                                      235
                                                                                                                                                                                                                                                                        235 235
                                                                                                                                                                                                                                                                              235
                                                             thethe 158 Structure Structure and Membership of ALCO
                                                              of
                     The Duties, Authorities and Obligations 158
                  The Duties, Authorities and Obligations of 158
     The Duties, Authorities and Obligations of the
      The Duties, Authorities and Obligations of the                   158           and Membership of ALCO
                                                                          Structure and MembershipMembership of ALCO 182
                                                                                        Structure and of ALCO                  182     182
                                                                                                                                         182             Internal Control
                                                                                                                                               Internal Control System
                                                                                                                                               Internal Control System System
                                                                                                                                                             Internal Control System
                     Board of Commissioners
      Board of Commissioners
     Board of Commissioners
                  Board of Commissioners                                  Duties and Responsibilities of ALCO of ALCO
                                                                          Duties and Responsibilities of ALCO
                                                                                    Duties and Responsibilities
                                                                                        Duties and Responsibilities of ALCO 182182     182
                                                                                                                                         182             Lending To To Related Parties and Large
                                                                                                                                               Lending To Related Parties and Large Exposure Exposure
                                                                                                                                               Lending To Related Parties and Large Exposure Exposure
                                                                                                                                                             Lending Related Parties and Large             213
                                                                                                                                                                                                           213   213 CHAPTER 7. STRATEGIC PLAN PLAN
                                                                                                                                                                                                                   213         CHAPTER 7. STRATEGIC PLAN
                                                                                                                                                                                                                                  CHAPTER 7. STRATEGIC
      The Number, Composition, Criteria, and
                 The Composition, Criteria, and
                      Number, Composition, Criteria, and 158
     The Number,The Number, Composition, Criteria, and       158       158
                                                                    158 ALCO Work ALCO Work Plan
                                                                                    ALCO Work Plan
                                                                          ALCO Work Plan Plan                                  182
                                                                                                                               182     182
                                                                                                                                         182   Strategic Plan of BRI Plan BRI
                                                                                                                                               Strategic Strategic Plan of of BRI
                                                                                                                                                         Plan of BRI
                                                                                                                                                             Strategic                                     214
                                                                                                                                                                                                           214   214 Business Business Strategy
                                                                                                                                                                                                                   214           Strategy
                                                                                                                                                                                                                                    Business Strategy
                                                                                                                                                                                                                      Business Strategy                                     238
                                                                                                                                                                                                                                                                            238   238
                                                                                                                                                                                                                                                                                    238
      independency of members of members of Board
                 independency of of Board of
                    independency       Board
     independency of members members of Board of of                       Meeting Frequency of ALCO
                                                                          Meeting Frequency of ALCO of ALCO
                                                                                    Meeting Frequency
                                                                                        Meeting Frequency of ALCO              182
                                                                                                                               182     182
                                                                                                                                         182   Disclosures
                                                                                                                                                         Disclosures
                                                                                                                                               Disclosures Disclosures                                     215
                                                                                                                                                                                                           215   215
                                                                                                                                                                                                                   215
      Commissioners
     Commissioners  Commissioners
                 Commissioners                                                                                                                                   Access Information
                                                                                                                                                              Access To To
                                                                                                                                                   Access To Information
                                                                                                                                                   Access To Information Information                       215
                                                                                                                                                                                                           215   215 CHAPTER 8. FINANCIALFINANCIAL REPORT
                                                                                                                                                                                                                   215         CHAPTER 8. FINANCIAL REPORT
                                                                                                                                                                                                                                  CHAPTER 8. REPORT
                                                                          Credit Policy Committee (CPC)
                                                                                    Credit Policy Committee (CPC)
                                                                                         Committee Committee (CPC)
                                                                          Credit PolicyCredit Policy(CPC)                      183
                                                                                                                               183       183
                                                                                                                                       183
      Duties, Authorities and Obligations of the Boardof Board
                    Duties, Authorities and Obligations
     Duties, Authorities and Obligations of the Boardthethe Board 159
                 Duties, Authorities and Obligations of      159
                                                             159       159                                                                         Transparency of Bank Financial and Non- and Non- 215
                                                                                                                                                   Transparency of Bank Financial and Non- and Non-
                                                                                                                                                              Transparency of Bank Financial
                                                                                                                                                                 Transparency of Bank Financial            215     215
                                                                                                                                                                                                                 215 Directors Statement On Corporate Corporate
                                                                          Structure and MembershipMembership of CPC
                                                                                     and Membership of CPC
                                                                                        Structure and of CPC
                                                                          Structure Structure and Membership of CPC            183
                                                                                                                               183     183
                                                                                                                                         183                                                                                    Statement On Corporate
                                                                                                                                                                                                                                    Directors Statement Corporate
                                                                                                                                                                                                                      Directors Directors Statement OnOn                    242
                                                                                                                                                                                                                                                                            242     242
                                                                                                                                                                                                                                                                                  242
      of Commissioners
                    of Commissioners
     of Commissioners
                 of Commissioners                                                                                                                  Financial Condition Condition
                                                                                                                                                              Financial
                                                                                                                                                                 Financial
                                                                                                                                                   Financial ConditionCondition
                                                                                    Duties and Responsibilities
                                                                          Duties and Responsibilities of CPC of of CPC 183
                                                                                        Duties and Responsibilities CPC
                                                                          Duties and Responsibilities of CPC                   183       183
                                                                                                                                       183                                                                                      Responsibility Audited Financial Statements
                                                                                                                                                                                                                      Responsibility Audited Financial Statements
                                                                                                                                                                                                                     Responsibility Audited Financial Statements Statements
                                                                                                                                                                                                                                    Responsibility Audited Financial
      The Board of Commissioners’ Meetings Meetings160
                    The Board of Commissioners’
     The Board of Commissioners’ Meetings Meetings 160
                 The Board of Commissioners’                        160160                                                                         Share Ownership of Commissioners and
                                                                                                                                                   Share Ownership of Commissioners and
                                                                                                                                                              Share Ownership of Commissioners and 216
                                                                                                                                                                 Share Ownership of Commissioners and      216     216
                                                                                                                                                                                                                 216 IndependentIndependent Auditor’s Report
                                                                          Work Mechanism of CPC
                                                                                    Work Mechanism
                                                                                        Work Mechanism of CPC
                                                                          Work Mechanism of CPC of CPC                         184
                                                                                                                               184     184
                                                                                                                                         184                                                                                    Independent Report
                                                                                                                                                                                                                                     Auditor’s Auditor’s
                                                                                                                                                                                                                      Independent Auditor’s Report Report                   244
                                                                                                                                                                                                                                                                            244   244
                                                                                                                                                                                                                                                                                    244
      Working Guidelines for the Board of Board of
                 Working Guidelines for for
                    Working Guidelines of
     Working Guidelines for the Boardthethe Board of 162     162    162162                                                                         Directors Directors
                                                                                                                                                   Directors Directors
     Commissioners
      Commissioners Commissioners
                 Commissioners                                                          CPC Meetings
                                                                                    CPC Frequency
                                                                          CPC Meetings Frequency Frequency
                                                                          CPC Meetings Meetings Frequency                      184
                                                                                                                               184       184
                                                                                                                                       184                                                                           Consolidated Statements Financial Position Position 245
                                                                                                                                                                                                                                Consolidated Statements Financial
                                                                                                                                                                                                                      Consolidated Statements Financial Position
                                                                                                                                                                                                                                    Consolidated Statements Financial Position
                                                                                                                                                                                                                                                                            245     245
                                                                                                                                                                                                                                                                                  245
                                                                                                                                                   Financial and Familial and Familial Members of Members
                                                                                                                                                              Financial and Familial of Relations of
                                                                                                                                                                 Financial Relations of Members
                                                                                                                                                   Financial and Familial Relations Relations of Members of of
                                                                                                                                                                                                           216
                                                                                                                                                                                                           216   216 Consolidated Statements of Comprehensive
                                                                                                                                                                                                                   216          Consolidated Statements of Comprehensive249
                                                                                                                                                                                                                                    Consolidated Statements of Comprehensive
                                                                                                                                                                                                                      Consolidated Statements of Comprehensive              249     249
                                                                                                                                                                                                                                                                                  249
     Procedures to Determineto Determine the Remuneration for 162 Realization of CPC Work Program Program
                     Procedures the Remuneration for
      Procedures to Determine the Remuneration for           162
                                                             162
                  Procedures to Determine the Remuneration for         162          Realization of CPC Work
                                                                                        Realization of CPC Work Program
                                                                          Realization of CPC Work Program                      184
                                                                                                                               184     184
                                                                                                                                         184
                                                                                                                                                   The Board of Commissioners and The Board of
                                                                                                                                                              The Board of Commissioners and The
                                                                                                                                                                 The Board of Commissioners and The Board
                                                                                                                                                   The Board of Commissioners and The Board of Board of of
     BOC
      BOC         BOCBOC                                                           Credit
                                                                      Credit Committee Committee
                                                                                Credit Committee
                                                                      Credit Committee                                         185
                                                                                                                               185     185
                                                                                                                                         185                                                                         Income     Income
                                                                                                                                                                                                                     Income Income
                                                                                                                                                   Directors Directors With Other of Members of The Board
                                                                                                                                                              With Other Members of The Board of
                                                                                                                                                                 Directors With Other The Board of
                                                                                                                                                   Directors With Other Members Members of The Board of of
     Completion and ExecutionExecution of theDuties the163
                 Completion and of Duties of the
      Completion and Execution of Execution Duties of of the
                    Completion and Duties of                 163    163 Structure Structure and Membership Committee Committee 185
                                                                                    and Membership of Credit Committee
                                                                          Structure and MembershipMembership Credit Committee
                                                                                        Structure and of Credit of of Credit 185
                                                                                                                               185
                                                                       163                                                               185                     Commissioners, The Board and/or
                                                                                                                                                              Commissioners, The Board of and/or
                                                                                                                                                   Commissioners, The Board of Directors, of Directors, and/or
                                                                                                                                                   Commissioners, The Board of Directors,Directors, and/or                      Consolidated Statements of Changes in Equity
                                                                                                                                                                                                                     Consolidated Statements of Changes in Equity in Equity
                                                                                                                                                                                                                     Consolidated Statements of Changes Changes
                                                                                                                                                                                                                              Consolidated Statements of in Equity      252
                                                                                                                                                                                                                                                                        252         252
                                                                                                                                                                                                                                                                                  252
      Commitees Under the Board of Commissioners
     Commitees Under theUnder thethe Board Commissioners
                 Commitees Board of Commissioners
                    Commitees Under Board of of Commissioners                           Duties and Responsibilities Credit Committee
                                                                                    Duties and Responsibilities Committee 185
                                                                          Duties and Responsibilities of Credit Committee 185            185
                                                                          Duties and Responsibilities of Credit of of Credit Committee 185         Controlling Shareholder Shareholder
                                                                                                                                                   Controlling Shareholder
                                                                                                                                                              Controlling Shareholder
                                                                                                                                                                 Controlling                                         Consolidated Statements of Cash Flows
                                                                                                                                                                                                                              Consolidated Statements of Cash Flows
                                                                                                                                                                                                                                Consolidated Statements of              254
                                                                                                                                                                                                                     Consolidated Statements of Cash Flows Cash Flows 254           254
                                                                                                                                                                                                                                                                                  254
 Audit Committee Audit
Audit Committee Committee
             Audit Committee                                 163
                                                             163    163 Frequency of Credit Committee Meetings Meetings 186
                                                                          Frequency of Credit Committee Meetings Meetings
                                                                                    Frequency of Credit Committee
                                                                                        Frequency of Credit Committee
                                                                       163                                                     186     186
                                                                                                                                         186       Remuneration Policy and Otherand OtherFor Facilities For
                                                                                                                                                   Remuneration Policy and Other Facilities For
                                                                                                                                                              Remuneration Policy Facilities Facilities For
                                                                                                                                                                 Remuneration Policy and Other             217
                                                                                                                                                                                                           217     217
                                                                                                                                                                                                                 217 Notes to Consolidated Financial Statements Statements
                                                                                                                                                                                                                     Notes to Consolidated Financial Statements
                                                                                                                                                                                                                              Notes to Consolidated Financial Statements256
                                                                                                                                                                                                                                Notes to Consolidated Financial         256         256
                                                                                                                                                                                                                                                                                  256
                                                                      Information System and Technology Steering
     Structure,Structure, Members, Expert and Independency of of Information System and System and Steering Steering 186
                   Members, Expert and Independency of 164
      Structure, Members, Expert and Independency of 164
                    Structure, Members, Expert and Independency 164    164         Information Technology Technology Steering
                                                                                Information System and Technology              186     186
                                                                                                                                         186                     BOC
                                                                                                                                                               BOD
                                                                                                                                                   BOC and BOD and BOD
                                                                                                                                                   BOC and BOC and BOD
     Member of Audit Committee Committee
      Member of Audit Committee
                    Member of Audit
                 Member of Audit Committee                                         Committee (ITSC)
                                                                                Committee
                                                                      Committee (ITSC) (ITSC)
                                                                      Committee (ITSC)                                                             Share Option Option
                                                                                                                                                   Share Option
                                                                                                                                                              Share
                                                                                                                                                                 Share Option                          218 218
                                                                                                                                                                                                         218
                                                                                                                                                                                                           218
      Profile of Members of Members Audit Committee 165
                 Profile of of Audit Committee
     Profile of Members MembersCommittee Committee 165
                    Profile    Audit of of Audit                                        Structure and of ITSC
                                                                          Structure and MembershipMembership of ITSC
                                                                    165 Structure Structure and Membership of ITSC
                                                                       165          and Membership of ITSC                     186
                                                                                                                               186       186
                                                                                                                                       186                       Ratio of Lowest Salary
                                                                                                                                                   Ratio of Highest and Highest Salary
                                                                                                                                                   Ratio of Highest and Lowest and Lowest Salary
                                                                                                                                                              Ratio of Highest and Lowest Salary       219 OTHERS OTHERS
                                                                                                                                                                                                           219
                                                                                                                                                                                                           219
                                                                                                                                                                                                         219            OTHERS
     Duties and Responsibilities of Audit Committee Committee 165 Duties and Responsibilities of ITSC of of ITSC 187
                    Duties and Responsibilities of Audit
      Duties and Responsibilities of Audit Committee         165
                                                             165
                 Duties and Responsibilities of Audit Committee        165          Duties and Responsibilities
                                                                                        Duties and Responsibilities ITSC
                                                                          Duties and Responsibilities of ITSC                  187       187
                                                                                                                                       187         CustomerCustomer Complaint Procedure
                                                                                                                                                   Customer Complaint Procedure Procedure
                                                                                                                                                               Complaint Procedure
                                                                                                                                                                 Customer Complaint                        220
                                                                                                                                                                                                       220 Press Release 2011
                                                                                                                                                                                                         220
                                                                                                                                                                                                           220       Press Release 2011
                                                                                                                                                                                                                         Press Release 2011
                                                                                                                                                                                                            Press Release 2011                                      407
                                                                                                                                                                                                                                                                    407             407
                                                                                                                                                                                                                                                                                  407
                    Frequency of Audit Committee
     Frequency of the Audit Committee Meetings Meetings
                 Frequency of Committee Committee
      Frequency of the Audit thethe AuditMeetings Meetings   165
                                                             165                    Realization of ITSC Work
                                                                          Realization of ITSC Work Program
                                                                    165 Realization of ITSC Work Program Program
                                                                                        Realization of ITSC Work Program
                                                                       165                                                     187
                                                                                                                               187     187
                                                                                                                                         187       Number of Internalof Internal Fraud
                                                                                                                                                   Number of Internal Fraud
                                                                                                                                                              Number Fraud
                                                                                                                                                                 Number of Internal Fraud                  220
                                                                                                                                                                                                       220 Outgoing OutgoingBapepam-LK and IndonesiaIndonesia
                                                                                                                                                                                                         220
                                                                                                                                                                                                           220        Letter to Letter to Bapepam-LK and
                                                                                                                                                                                                                         Outgoing Letter to Bapepam-LK and
                                                                                                                                                                                                            Outgoing Letter to Bapepam-LK and Indonesia Indonesia
      Report of Audit Committee Work Plan
     Report of ReportCommittee Work Plan Work Plan 166
                  Audit of Audit Committee Work Plan
                    Report of Audit Committee                166                    Frequency of ITSC
                                                                          Frequency of ITSC Meetings Meetings
                                                                    166 Frequency of ITSC Meetings Meetings
                                                                       166              Frequency of ITSC                      187
                                                                                                                               187       187
                                                                                                                                       187                    Criminal
                                                                                                                                                   Criminal Cases
                                                                                                                                                   Criminal Cases Cases
                                                                                                                                                                 Criminal Cases                        221 Stock ExchangeExchange
                                                                                                                                                                                                           221
                                                                                                                                                                                                           221
                                                                                                                                                                                                         221                                                        410
                                                                                                                                                                                                                                                                    410           410
                                                                                                                                                                                                                                                                                    410
                                                                                                                                                                                                                     Stock
                                                                                                                                                                                                                         Stock
                                                                                                                                                                                                            Stock Exchange Exchange
 Nomination and Remuneration Committee Committee 167
Nomination and Remuneration Committee (NRC)
                 Nomination and Remuneration (NRC)
             Nomination and Remuneration Committee (NRC)     167                Project Management office (PMO)
                                                                      Project Management office (PMO) Steering Steering 188
                                                                      Project Management office (PMO) office (PMO) Steering188
                                                                                   Project Management Steering
                                                              (NRC) 167167                                                             188
                                                                                                                                         188       Transaction With ConflictWith Conflict Interest
                                                                                                                                                   Transaction With Conflict ofConflict of of Interest
                                                                                                                                                              Transaction With Interest
                                                                                                                                                                 Transaction of Interest                   222
                                                                                                                                                                                                       222 Office Address Address
                                                                                                                                                                                                         222
                                                                                                                                                                                                           222       Office
                                                                                                                                                                                                                         Office Address
                                                                                                                                                                                                            Office Address                                          415
                                                                                                                                                                                                                                                                    415             415
                                                                                                                                                                                                                                                                                  415
       Structure, Membership, Expertise and
                     Structure, Membership, Expertise and 167
       Structure,Structure, Membership, Expertise and 167
                   Membership, Expertise and                          Committee
                                                                      Committee Committee
                                                                    167167      Committee                                                          Buy Back Share and/or Buy Back Bonds Back Bonds
                                                                                                                                                               Share and/or Buy Back Bonds
                                                                                                                                                                 Buy Back Share and/or Buy
                                                                                                                                                   Buy BackBuy Back Share and/or Buy Back Bonds 222    222 OperatingOperating Units
                                                                                                                                                                                                         222
                                                                                                                                                                                                           222         Units
                                                                                                                                                                                                                         Operating Units
                                                                                                                                                                                                            Operating Units                                         416
                                                                                                                                                                                                                                                                    416             416
                                                                                                                                                                                                                                                                                  416
       Independency of NRC Members Members
       Independency of NRC Members Members
                     Independency of NRC
                  Independency of NRC                                     Structure Structure and MembershipSteering Steering
                                                                                        Structure and of PMO of of PMO Steering
                                                                                    and Membership of PMO Steering
                                                                          Structure and MembershipMembership PMO               188
                                                                                                                               188     188
                                                                                                                                         188       Fund for political activities activities
                                                                                                                                                   Fund for political activities
                                                                                                                                                              Fund for for political activities
                                                                                                                                                                 Fund political                            222
                                                                                                                                                                                                       222 Contact Address Address
                                                                                                                                                                                                         222
                                                                                                                                                                                                           222       Contact
                                                                                                                                                                                                                         Contact Address
                                                                                                                                                                                                            Contact Address                                         417
                                                                                                                                                                                                                                                                    417             417
                                                                                                                                                                                                                                                                                  417
                    Profile    NRC
                 Profile of of NRC
     Profile of Members Members of NRC
      Profile of Members of Members of NRC                   167
                                                             167          Committee in 2011
                                                                    167 Committee in 2011 in 2011
                                                                                    Committee
                                                                                        Committee in 2011
                                                                       167                                                                         Fund for social for for social activities activities
                                                                                                                                                              Fund responsibility activities
                                                                                                                                                                 Fund social responsibility                222
                                                                                                                                                                                                       222 Navigation of Annual of Annual Report BRI 2011
                                                                                                                                                                                                         222
                                                                                                                                                   Fund for social responsibilityresponsibility activities 222       Navigation Report BRI 2011
                                                                                                                                                                                                                         Navigation of Annual Report
                                                                                                                                                                                                            Navigation of Annual Report BRI 2011 BRI 2011
      Duties and Responsibilities of NRC
     Duties and Responsibilities of NRC of NRC
                    Duties and Responsibilities of NRC
                 Duties and Responsibilities                 168
                                                             168                    Realization of of PMO Steering Committee Work 188
                                                                          Realization of PMO Steering Committee Work
                                                                                        Realization PMO Steering Committee Work
                                                                    168 Realization of PMO Steering Committee Work
                                                                       168                                                     188
                                                                                                                               188       188
                                                                                                                                               Self Assessment Assessment on Implementation of GCG
                                                                                                                                               Self Assessment on Implementation of GCG of GCG 223
                                                                                                                                                         Self Assessment on Implementation
                                                                                                                                                             Self on Implementation of GCG             223 for Capital Market and Financial Institutions Institutions
                                                                                                                                                                                                         223 Capital Market and Financial Institutions
                                                                                                                                                                                                           223
                                                                                                                                                                                                            for           Capital Market and Financial Institutions
                                                                                                                                                                                                                     for for Capital Market and Financial
     Function of Nomination Nomination
                    Function of
      Function of Nomination
                 Function of Nomination                      168
                                                             168    168 Plan
                                                                          Plan
                                                                       168          PlanPlan
                                                                                                                                                                                                            Supervisory Agency (BAPEPAM-LK)
                                                                                                                                                                                                                         Agency Agency (BAPEPAM-LK)
                                                                                                                                                                                                            Supervisory Supervisory Agency (BAPEPAM-LK)
                                                                                                                                                                                                                     Supervisory(BAPEPAM-LK)
                                                                                                                                                                                                                                                                    418
                                                                                                                                                                                                                                                                    418             418
                                                                                                                                                                                                                                                                                  418
                     Remuneration
      Function of Function of Remuneration
     Function of Remuneration
                 Function of Remuneration                    168
                                                             168          Meeting Frequency of PMO Steering Committee 188
                                                                    168 Meeting Frequency of PMO Steering Committee Committee 188
                                                                                    Meeting Frequency of PMO Steering Committee
                                                                                        Meeting Frequency of PMO Steering 188
                                                                       168                                                               188
                                                                                                                                               Strengths and WeaknessesWeaknesses of GCG Implementation 225
                                                                                                                                                         and Weaknesses of GCG Implementation 225
                                                                                                                                                           Strengths and of GCG Implementation 225
                                                                                                                                               StrengthsStrengths and Weaknesses of GCG Implementation 225
      Other Functions Functions
                    Other
     Other FunctionsFunctions
                 Other                                       168
                                                             168    168 PMO Steering Committee Work Plan Work Plan 188
                                                                       168PMO Steering Committee Work Plan
                                                                                        PMO Steering Committee
                                                                                    PMO Steering Committee Work Plan           188     188
                                                                                                                                         188   At BRI At BRI
                                                                                                                                                           At BRI
                                                                                                                                               At BRI
     Frequency of NRC Meetings Meetings
                    Frequency of NRC
      Frequency of NRC Meetings Meetings
                 Frequency of NRC                            168
                                                             168      Human Resources Policy Committee
                                                                      Human Resources Policy Committee Committee
                                                                                Human Resources Policy Committee
                                                                                   Human Resources Policy
                                                                    168168                                                     189
                                                                                                                               189     189
                                                                                                                                         189
     Report of Report Work NRC’s Work Program
                    Report of Program
                  NRC’s Work Program
      Report of NRC’s of NRC’s Work Program                  169
                                                             169                    and Membership of Human Resources 189
                                                                          Structure and MembershipMembership of Human Resources 189
                                                                    169 Structure Structure and Membership of Human Resources 189
                                                                                        Structure and of Human Resources 189
                                                                       169
                                                                          Policy Committee
                                                                                    Policy Committee
                                                                                        Policy
                                                                          Policy Committee Committee
 Risk Management Supervisory Supervisory(RMSC)
             Risk Management Supervisory Committee 170
                 Risk Management Committee Committee 170
Risk Management Supervisory Committee (RMSC) (RMSC)          (RMSC) 170170
                                                                          Roles and Responsibilities of Human Resources Resources 189
                                                                                     Responsibilities of Human Resources 189
                                                                                        Roles and Responsibilities of Human 189
                                                                          Roles andRoles and Responsibilities of Human Resources         189
      Structure, Membership, Expertise and
                   Membership, Expertise and
                    Structure, Membership, Expertise and 170
     Structure,Structure, Membership, Expertise and          170    170170
                                                                          Policy Committee
                                                                                    Policy Committee
                                                                                        Policy
                                                                          Policy Committee Committee
      Independency of Members of Members RMSC
                 Independency of of RMSC
                    Independency        RMSC
     Independency of Members Members of of RMSC
                                                                          Human Resources Policy Committee Work Plan
                                                                                    Human Resources Policy Committee Work Plan
                                                                                        Human Resources Policy Committee 189   189
                                                                          Human Resources Policy Committee Work Plan Work Plan 189       189
      Profile of Members of Members of RMSC
                 Profile of of RMSC
                    Profile
     Profile of Members Members of RMSC
                               RMSC                          170
                                                             170    170170
                                                                          Meeting Frequency of Human Resources Policy
                                                                                    Meeting Frequency Resources Policy
                                                                                        Meeting Frequency of Human Resources Policy 189
                                                                          Meeting Frequency of Humanof Human Resources Policy  189
                                                                                                                               189       189
      Duties and Responsibilities of RMSC of RMSC 171
                    Duties and Responsibilities
     Duties and Responsibilities of RMSC of RMSC
                 Duties and Responsibilities                 171    171171
                                                                          Committee Committee
                                                                          Committee Committee
      Meeting Frequency of RMSC of RMSC
                    Meeting Frequency
     Meeting Frequency of RMSC of RMSC
                 Meeting Frequency                           171
                                                             171    171171
      Report of RMSC WorkRMSC Work Program
                  RMSC Work Program
                    Report of Program
     Report of Report of RMSC Work Program                   172
                                                             172    172172




               ANNUAL REPORT 2011
                 ANNUAL REPORT PT   PTPT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                       BANK INDONESIA ( PERSERO ) Tbk.
         ANNUAL REPORT 2011 2011 BANK RAKYAT RAKYAT INDONESIA ( PERSERO ) Tbk.                                                                                                                          ANNUAL REPORT 2011 2011 BANK RAKYAT RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                                                                                              ANNUAL REPORT 2011
                                                                                                                                                                                                                ANNUAL REPORT PT   PTPT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                                                                                                                      BANK INDONESIA ( PERSERO ) Tbk.
The Largest, Spreading Across the Nation




          55.21 million
                                                  BRI’s focus on micro, small and medium business segment, represents
                                                  the backbone of Indonesian economy with a potential market size of
                                                  55.21 million MSME businesses. From that amount, roughly two-third
          MSME business*                          have not been reached by the banking service.
          *source: Kementerian Koperasi & UMKM




                                                  BRI operates the largest branch services network in Indonesia. A total


          7,975                                   of 7,975 operating units serve the public down to the most remote
                                                  corners of the country, all of which are linked on a real-time online
                                                  bases. BRI is present from Sabang to Merauke, from villages to cities,
          Operating Units
                                                  from traditional markets to the modern superblock malls.




                                                  BRI continues to develop e-channel services. Its ATM network grew

          7,292                                   from 1,262 units in 2007 to 7,292 units in 2011. The growth of this
                                                  e-channel delivery is followed by an increase in the number of service
          ATM units                               features from 155 features in 2007 to 742 features in 2011.




                                                  BRI has the largest customer base in Indonesia, more than 36 million

          36 million                              customer accounts as of year-end 2011, with customer deposits that
                                                  are dominated by low-cost funds. In 2011, low-cost funds accounted
                                                  for more than 60% of total third-party funds, with the highest growth
          Customer Accounts
                                                  shown by savings products.



          Rp                                      Supported by prime human resources, reliable technology systems,


          15.09 trillion
                                                  extensive service network, large customer base, the right business
                                                  strategy and efficient operations, BRI succeeded in maintaining its
                                                  profitability. BRI’s consolidated net profit in 2011 amounted to Rp15.09
          Net Profit
                                                  trillion, an increase of 31.52% from Rp11.47 trillion in 2010.




           1
   ANNUAL REPORT 2011                 PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                         1
Foreword




  2   ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                      FOREWORD
                                BRI has the largest




                                                                                      COMPANY PROFILE
                                customer base of more
                                than 36 million customer




                                                                                      MANAGEMENT DISCUSSION AND ANALYSIS
                                accounts that are served
                                by e-channel network
                                and 7.975 BRI operating
                                units that are spread
                                across the far reaches of




                                                                                      CORPORATE GOVERNANCE
                                Indonesia as of year-end
                                2011.




                                                                                      CORPORATE SOCIAL RESPONSIBILITY
                                BRI operates seven tiers of services outlets from
                                the Head Office to 18 Regional Offices , 431
                                Branch Offices (Including BRI New York Agency
                                and BRI Hong Kong Rep. Office), 502 sub-
                                branch offices, 4,849 BRI Units, 870 cash outlets
                                and 1,304 Teras BRI.


                                     BRI’s Network




                                                                                      SUBSIDIARIES
                                                       7,975
                                              6,990
                                                                                      BUSINESS STRATEGY




                                               2010        2011

                                     Composition of Accounts

                                                                 18%
                                                                                      FINANCIAL STATEMENTS




                                                                           Deposits

                                        82%                                Loans
                                                                                      OTHERS




        3
ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                       3
ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                       3
BRI IN BRIef




PT Bank Rakyat Indonesia (Persero) Tbk. (“BRI”,              While remaining focus on the MSME segment, BRI
“Bank”, or “Company”) is the oldest commercial               unceasingly develops various consumer banking
bank in Indonesia, established on 16 December                products and institutional services aimed at
1895 in Purwokerto, Central Java. As the oldest              customer living in city area. This efforts are supported
bank, BRI continues to serve the micro, small and            by unrelenting development of BRI’s network and
medium business segment (MSME) consistently. In              now BRI is the biggest bank in Indonesia in terms
2003 BRI went public and continued its commitment            of network, with 7,975 operating units, including BRI
towards the MSME up until now.                               New York Agency and BRI Hong Kong Representative
                                                             Office, all of them linked real time on-line. Other
The Government of the Republic of Indonesia is the           than developing conventional operating units, BRI
majority shareholder of BRI with 56.75% share, while         also continuously develops e-banking services that
the general public shareholder hold the remaining            give customer access to BRI’s services via internet,
43.25% of share. Supported with years of experience          telephone, Short Message Service/SMS, as well as
and solid capabilities in banking services, especially       via other e-channel services such as Automatic
in the UMKM segment, for seven years in a row BRI            Teller Machine (ATM), Cash Deposit Machine (CDM),
successfully maintains its position as the bank with         Electronic Data Capture (EDC), and KiosK.
the biggest profit and holds second position in terms
of asset within the nation banking industry. This            In addition to strengthening its network
achievement is a testimony of the effort and hard            infrastructures and e-banking technology, BRI also
working of all the people of BRI, who continuously           strives to provide banking services to small scale
innovate and develop banking products and services           businesses at traditional markets all over Indonesia.
for all business segments.                                   Since end of 2009, these services has been provided
                                                             by Teras BRI, through which BRI expects to reach
With its reputation as a bank that serves the micro          micro and small entrepreneurs in traditional markets
segment and deeply rooted within the Indonesian              that so far have not been touched yet by banking
communities, BRI continually develops its services           services. As a bank that operates among the people
to suit the needs of the Indonesian people. This             of the fourth most populous nation in the world, BRI
is evident in the continuous efforts of BRI to align         always strives to become the first partner for the
its business with the recent demographic trend or            Indonesian people in their quest to develop their
urbanization which results in the emergence of               livelihood. This network strength of BRI is expected
satellite cities as the new economic hub all over            to support and deliver a sustainable growth in the
Indonesia.                                                   years ahead, along with the enhancement of quality
                                                             of live of the Indonesian people.




              4            ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                  FOREWORD
                                                            BRI from time to time




                                                                                                                  COMPANY PROFILE
                                                         1968
                                                         In conformity with the Law No. 21 Year 1968, the




                                                                                                                  MANAGEMENT DISCUSSION AND ANALYSIS
                                                         Government of Indonesia restored the name of Bank
                                                         Rakyat Indonesia which then became a commercial
                                                         bank.


                                                         1992
                                                         Pursuant to the Banking Law No.7 Year 1992, BRI
                                                         changed its name and legal entity into PT Bank
                                                         Rakyat Indonesia (Persero).



1895                                                     2003
                                                         On 10 November 2003, BRI became a publicly listed




                                                                                                                  CORPORATE GOVERNANCE
Started as a mosque-based association whose
                                                         company and listed its shares on the Jakarta Stock
function was to manage and disburse trusted
                                                         Exchange/BEJ (now Indonesia Stock Exchange/BEI)
fund with a very simple scheme to surrounding
                                                         with ticker name “BBRI”. Currently, BRI is part of LQ-
communities. On 16 December 1895, Raden
                                                         45 equity index and one of blue chip shares in BEI.
Aria Wiriatmaja established De Poerwokertosche
Hulp en Spaarbank der Inlandsche Hoofden. This
organization provided great benefits to people’s
economy at that time.
                                                         2007
                                                         Acquired Bank Jasa Artha which then was converted




                                                                                                                  CORPORATE SOCIAL RESPONSIBILITY
After several changes of name, from Hulp-en              into PT Bank BRISyariah.
Spaarbank der Inlandshe Bestuurs Ambtenareen

                                                         2009
(1895), to De Poerwokertosche Hulp Spaar-en
Landbouw Credietbank or Volksbank (1912), in
1912 became Centrale Kas Voor Volkscredietwezen
                                                         Succeeded in connecting all network, 6.480
Algemene and further changed to Algemene
                                                         operating units at that time, in real time on line.
Volkscredietbank (AVB) in 1934. During the Japanese
occupancy, AVB changed its name to Syomin Ginko
(1942-1945).
                                                         2011
1946                                                     On 11 January 2011, BRI undertook stock split of its



                                                                                                                  SUBSIDIARIES
                                                         nominal value of shares with the ratio of 1:2.
On 22 February 1946, the Government of Indonesia
through Government Regulation No. 1 Year 1946,
                                                         On 3 March 2011, Acquiring Deed for the shares of
changed the name Syomin Ginko to Bank Rakyat
                                                         PT Bank Agroniaga Tbk was signed by BRI and Dana
Indonesia (BRI). As a state-owned bank at that time,
                                                                                                                  BUSINESS STRATEGY


                                                         Pensiun Perkebunan (Dapenbun).
BRI took the role as Government’s front liner for the
development of the national economy.
                                                         On 16 December 2011, the Instrument of Transfer
                                                         and Bought and Sold Notes were signed by BRI
1960                                                     and PT Asuransi Jiwa BRIngin Jiwa Sejahtera for the
                                                         shares of BRIngin Remittance Co. Ltd. (Hong Kong).
The Government of Indonesia changed the name
BRI into Bank Koperasi Tani Nelayan (BKTN).
                                                                                                                  FINANCIAL STATEMENTS
                                                                                                                  OTHERS




                    5
          ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                             5
Company’s Vision,Mission and Culture




VISION
“To Become a Leading Commercial Bank that Always Prioritizes Customer Satisfaction”



COMMERCIAL
 Since its establishment, BRI consistently raises funds in the form of saving and deposit, disburses
 the funds in the form of loan, and provides banking services to all business segments as well as
 individuals. In conducting its business, BRI always strives to deliver optimal return to its shareholders.




FOREFRONT
 BRI is one of the biggest bank in Indonesia and also one of the biggest and the most profitable bank in
 the world that provides micro banking services. Furthermore, BRI possess high quality products and
 services, continuously innovates to suit the needs of its customers, has long term vision, and recorded
 financial performances that is above the banking industry’s in Indonesia.




SATISFACTION
 Customer satisfaction is the number one priority for BRI as a company that provides banking services.
 The challenge for BRI is to deliver customer satisfaction to all its customers of various business
 segment. To that end, BRI continuously innovates and develops products to suit banking needs of
 all its customers.




              6              ANNUAL REPORT 2011               PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                              FOREWORD
                                                                                              COMPANY PROFILE
                                                                                              MANAGEMENT DISCUSSION AND ANALYSIS
                                        MISSION
                                        To realizes its vision, BRI establishes three
                                        missions to be carried out:

                                        “To undertake the best banking operation, while
                                        prioritizing on providing service to the micro,
                                        small and medium segment (MSME) with a view
                                        to support the improvement of the people’s
                                        economy”.




                                                                                              CORPORATE GOVERNANCE
                                        BRI is committed to maintain its best
                                        performance, reflected on its products that
                                        focus on servicing the micro, small and medium
                                        enterprises (MSME). Servicing the MSME
                                        segment will eventually produce a multiplier
                                        effect considering that MSME is the backbone
                                        and the biggest component of the Indonesian
                                        economy. BRI should have the ability to follow




                                                                                              CORPORATE SOCIAL RESPONSIBILITY
                                        the dynamic of this segment, so as to maintain
                                        the position as leader in the MSME segment.

                                        “To provide prime services to customers
                                        through a vast working network and supported
                                        by professional human capital guided by good
                                        corporate governance practices”

                                        BRI continuously strives to broaden its market
                                        share in the micro, small and medium segment.



                                                                                              SUBSIDIARIES
                                        In order to achieve that target, BRI always
                                        provides premium service to fulfill the needs of
                                        its customers. With vast network spread across
                                        Indonesia, BRI employs professional human
                                        resources and management that practices good
                                                                                              BUSINESS STRATEGY




                                        corporate governance in order to optimized
                                        BRI’s competitive advantage.

                                        “To provide optimum benefits to all stakeholders ”

                                        BRI’s mission to provide benefit to stakeholders
                                                                                              FINANCIAL STATEMENTS




                                        represent the foundation for every decision
                                        maker while considering the cost and benefit
                                        implications to all stakeholders. On the other
                                        hand, as a good corporate citizen, BRI does not
                                        only provide financial benefits but also other non-
                                        financial benefits to all stakeholders.
                                                                                              OTHERS




        7
ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                          7
CORPORATe VALUeS




  BRI espouses the corporate values that form
  the foundation for the thinking, action and
  behavior of every individual at BRI, inherent
  in a corporate culture and projecting a solid
  and strong character of the Bank. These
  values are integrity, professionalism, customer
  satisfaction, leadership and respect for the
  individual.




     8         ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                FOREWORD
                                                                                COMPANY PROFILE
                                                                                MANAGEMENT DISCUSSION AND ANALYSIS
                             As a publicly held company, BRI is
                             fully committed to complying with all
                             prevailing laws and regulations pertaining
                             to banking and the capital markets. This
                             has induced BRI to always prioritize for
                             prudential banking and the interests of
                             stakeholders.




                                                                                CORPORATE GOVERNANCE
                             This commitment is also manifested in
                             the form of corporate governance as
                             follows:


                              •	Intensifying	 the	 program	 to	 instill	
                                awareness of risk and a culture of




                                                                                CORPORATE SOCIAL RESPONSIBILITY
                                compliance for every employee at all
                                BRI operating units;
                              •	Intensifying	 improvements	 to	 service	
                                quality in all working units;
                              •	Extrapolating	 and	 monitoring	 of	 each	
                                progress made by the bank into an
                                activities log book that are easily
                                measurable and accountable for all


                                                                                SUBSIDIARIES
                                working units;
                              •	Implementing	 a	 policy	of	 rewards	 and	
                                punishments that is firm and just.
                                                                                BUSINESS STRATEGY
                                                                                FINANCIAL STATEMENTS
                                                                                OTHERS




        9
ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                            9
fINANCIAL HIGHLIGHTS
                                                                            Year
                 financial Highlights                 2011       2010              2009       2008      2007
                                                                     (in billion Rupiah)
Balance Sheet
   Total Assets                                    469,899    404,286         316,947      246,077    203,735
   Total Earning Assets                            432,647    379,696         299,063      228,781    169,091
   Loan - Gross                                    294,515    252,489         208,123      161,108    113,973
   Government Bond                                   8,996     13,626           15,027      16,352     18,223
   Third Party Funds                               384,264    333,652         255,928      201,537    165,600
          - Demand Deposit                          76,779     77,364           50,094      39,923     37,162
          - Saving                                 154,133    125,990         104,463       88,077     72,300
          - Time Deposit                           153,353    130,298         101,371       73,538     56,138
   Other Interest Bearing Liability                 21,284     17,297           21,284       7,599      6,262
   Equity                                           49,820     36,673           27,257      22,357     19,438
Income Statement
Interest Income
   - With Government Bond Interest                  48,164     44,615           35,334      28,097     23,241
   - Without Government Bond Interest               47,050     43,109           33,528      26,166     21,220
Net Interest Income
   - With Government Bond Interest                  34,427     32,889           23,049      19,651     16,697
   - Without Government Bond Interest               33,313     31,382           21,244      17,721     14,676
Other Operating Income                               5,776      5,545              3,270     2,535      1,822
Other Operating Expense                            (17,086)   (16,114)        (11,960)     (10,997)    (9,020)
Provision for Impairement Losses                    (5,533)    (7,917)          (5,799)     (2,844)    (1,943)
Income Before Tax                                   18,756     14,908              9,891     8,822      7,780
Net Income                                          15,088     11,472              7,308     5,958      4,838
Earning per Share (Rp)                              628.91     478.36           304.75      248.50     201.82
financial Ratio
Capital
   Capital Adequacy Ratio (CAR)*                   14.96%     13.76%          13.20%       13.18%     15.84%
earning Assets
   Earning Assets & Non Performing Assets to
                                                    1.79%      2.19%            2.59%          N/A        N/A
   Total Earning Assets and Non Performing Asset
   Non-performing Earning Assets                    1.85%      2.24%            2.68%       2.18%      2.22%
   Allowance for Possible Losses to Earning As-
                                                    4.51%      4.58%            4.29%          N/A        N/A
   sets
   Non Performing Loan (NPL Gross)                  2.30%      2.78%            3.52%       2.80%      3.44%
Profitability
   ROA                                              4.93%      4.64%            3.73%       4.18%      4.61%
   ROE                                             42.49%     43.83%          35.22%       34.50%     31.64%
   NIM                                              9.58%     10.77%            9.14%      10.18%     10.86%
   Operating Expenses/Operating Income             66.69%     70.86%          77.66%       72.65%     69.80%
Liquidity
   LDR                                             76.20%     75.17%          80.88%       79.93%     68.80%




             10              ANNUAL REPORT 2011     PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                           FOREWORD
                                                                                                                                           COMPANY PROFILE
                                                                                               Year
                 financial Highlights                               2011           2010           2009            2008           2007
                                                                                        (in billion Rupiah)
 Compliance
    Violation of Legal Lending Limit (LLL)




                                                                                                                                           MANAGEMENT DISCUSSION AND ANALYSIS
          - Related Parties                                            Nil            Nil             Nil           Nil            Nil
          - Third Parties                                              Nil            Nil             Nil           Nil            Nil
    excess of Legal Lending Limit (LLL)
          - Related Parties                                            Nil            Nil             Nil           Nil            Nil
          - Third Parties                                              Nil            Nil             Nil           Nil            Nil
    Statutory Reserves                                            9.33%          8.05%           5.90%          5.57%        22.09%
    Net Open Position                                             5.49%          4.45%           5.22%        13.55%           7.90%

Notes :   The above financial performance figures represent BRI’s consolidated financial report together with subsidiaries (for 2011: PT
          BRISyariah, PT Bank Agroniaga Tbk., BRIngin Remittance Co. Ltd., while for 2010: PT BRI Syariah). Financial Ratios are of
          bank only.
          * Starting in 2010 included operational risk.




                                                                                                                                           CORPORATE GOVERNANCE
                                                                                                                                           CORPORATE SOCIAL RESPONSIBILITY
                                                                                                                                           SUBSIDIARIES
                                                                                                                                           BUSINESS STRATEGY
                                                                                                                                           FINANCIAL STATEMENTS
                                                                                                                                           OTHERS




                     11
           ANNUAL REPORT 2011                  PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                   11
        SHARe HIGHLIGHTS

SHARe PRICe*

                                           Share Price                                                                                  Amount
                                                                                          Number of          Volume
                      Open            High             Low             Close                                                                   Volume       Market Cap
     Year                                                                                   Shares         Transaction         Frequency
                                                                                                                                                 (Rp        (Rp Trillion)
                                                                                           (shares)           (unit)
                                               (Rp)                                                                                            Trillion)
     2010                4,125           5,325            4,100            5,250     24,669,162,000        3,762,749,000            266,530       34.21           129.57
   Quarter I             4,125           4,175            4,100            4,125     24,659,705,000        1,062,146,500             64,824        8.12           101.76
   Quarter II            4,575           4,875            4,750            4,750     24,659,705,000             974,020,500          52,479        8.29           114.72
  Quarter III            5,000           5,025            4,925            5,000     24,659,705,000             847,616,500          62,115        8.19           123.35
  Quarter IV             5,300           5,325            5,200            5,250     24,669,162,000             878,965,500          87,112        9.61           129.57
     2011                5,250           7,250            4,525            6,750     24,669,162,000        9,245,899,500            620,745       56.58           164.85
   Quarter I             5,250           5,375            4,525            5,750     24,669,162,000        2,561,502,500            151,173       13.90           140.43
   Quarter II            5,750           6,600            5,650            6,500     24,669,162,000        1,961,571,500            123,095       12.30           158.75
  Quarter III            6,500           7,250            5,000           5,850      24,669,162,000        2,812,699,500            187,527       18.02           142.87
  Quarter IV             5,850           7,050            5,150           6,750      24,669,162,000        1,910,126,000            158,950       12.36           164.85

* Share prices presented here are prices after 1:2 stock split. Stock split was exercised on 11 January 2011.



DIVIDeND PAYMeNT

                                   Net Income                   Dividend              Dividend per Share            Dividend Pay Out
            Year                                                                                                                                  Payment Date
                                   (Billion Rp)                (Billion Rp)                  (Rp)*                      Ratio (%)
            2003**                    2,579                        990                         42.10                        75.01                  23 July 2004
            2004                      3,633                       1,816                        76.47                        50.00                  5 July 2005
            2005                      3,808                       1,904                        78.09                        50.00                  10 July 2006
            2006                      4,257                       2,129                        86.52                        50.00                  2 July 2007
            2007                      4,838                       2,419                        98.17                        50.00                  7 July 2008
            2008                      5,958                       2,085                        84.41                        35.00                  3 July 2009
            2009                      7,308                       2,192                        88.91                        30.00                  1 July 2010
            2010                     11,472                       2,294                        93.01                        20.00                  15 June 2011

* Dividend of each share is dividend after 1:2 stock split.
** From net profit of second half-year (1 July 2003 - 31 December 2003) in the amount of Rp1.32 trillion, net profit of first half-year was capitalized.



BRI STOCK PRICe AND TRANSACTION VOLUMe

     Price 8000                                                                                                                          200     Volume
   (Rupiah)                                                                                                                                      (million
                                                                                                                                         180     per day)
            7000
                                                                                                                                         160
               6000
                                                                                                                                         140
               5000                                                                                                                      120

               4000                                                                                                                      100

               3000                                                                                                                      80

                                                                                                                                         60
               2000
                                                                                                                                         40
               1000
                                                                                                                                         20
                   0                                                                                                                     0
                    Dec-10           Feb-11             Apr-11                Jun-11          August-11            Oct-11             Dec-11
                                                  Volume                          Price




                        12                    ANNUAL REPORT 2011                    PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                   FOREWORD
BONDS HIGHLIGHTS




                                                                                                                                   COMPANY PROFILE
To support its business expansion, on 23 December                        The proceed of the public offering of the Rupiah
2009 BRI issued Rupiah Subordinated Debt with                            Subordinated Debt II, after deduction of issuing cost,




                                                                                                                                   MANAGEMENT DISCUSSION AND ANALYSIS
duration of 5 years and interest rate of 10.95%.                         was used by the Company as supplementary capital
                                                                         in accordance with the regulation of Bank Indonesia;
Fitch affirms AA (Double A; Stable Outlook) rating                       and all was used for loan expansion based on
upon issuance of Rupiah Subordinated Debt II.                            prudential banking principle.
Total of funds raised from issuance of this Rupiah
Subordinated Debt II amounted to Rp2 trillion.                           On 11 January 2010, BRI exercised buy option over
                                                                         Rupiah Subordinated Debt I with fixed interest rate
                                                                         for Rp500 billion.




                                                                                                                                   CORPORATE GOVERNANCE
POSITION BY 2010

                             Issuance
  No          Type                         Duration        Amount            Maturity         Coupon        Rating      Listing
                               Date
                                                                                            13.50% p.a.
                                                                           9 Jan 2014
                                                                                             (year 1 to
                                                                              (with                                    Surabaya
         Subordinated                                       Rp500                            6); 23.5%      Id AA+
  1.                       9 Jan 2004      10 years                          buyback                                     Stock
           Debt I *                                         billion                         p.a. (year 7   (Pefindo)
                                                                           option on 9                                 Exchange
                                                                                            to 10); paid
                                                                            Jan 2010)
                                                                                             quarterly




                                                                                                                                   CORPORATE SOCIAL RESPONSIBILITY
                                                                                             10,95%
                                                                                                                       Indonesia
         Subordinated        22 Dec                                          22 Dec         p.a. (year 1    AA (idn)
  2.                                        5 years       Rp2 trillion                                                   Stock
            Debt II           2009                                            2014          to 5); paid      (Fitch)
                                                                                                                       Exchange
                                                                                             quarterly


* Bought back on 11 January 2010 (9 January 2010 was a Saturday)




POSITION BY 2011




                                                                                                                                   SUBSIDIARIES
                         Issuance
 No         Type                        Duration       Amount            Maturity          Coupon           Rating      Listing
                           Date
                                                                                          10.95% p.a.      AA (idn);   Indonesia
       Subordinated
  1.                    22 Dec 2009      5 years      Rp2 trillion    22 Dec 2014         (year 1 to 5)      RWN         Stock
          Debt II
                                                                                         paid quarterly     (Fitch)    Exchange
                                                                                                                                   BUSINESS STRATEGY
                                                                                                                                   FINANCIAL STATEMENTS
                                                                                                                                   OTHERS




                     13
           ANNUAL REPORT 2011              PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                  13
RePORT Of THe BOARD Of COMMISSIONeRS




 BUNASOR SANIM
 President Commissioner/Independent Commissioner




  “The national economic condition that continues to strengthen
and inspire our confidence, together with hard works and support
 from management and all employees of BRI, contributed to the
                performance of the Bank in 2011. ”




      14          ANNUAL REPORT 2011    PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                     FOREWORD
Assalamualaikum Wr. Wb.




                                                                                                                     COMPANY PROFILE
Praises be to Allah SWT, God Almighty, for His           Efforts to enhance the performance of the Bank in 2012
blessing and benevolence that have enabled Bank          will require the support of all stakeholders especially
Rakyat Indonesia (the Bank) to perform exceedingly       the staffs and all of employees throughout the country.
well in 2011.                                            Several strategic initiatives that have been formulated
                                                         will need to be executed flawlessly by the relevant




                                                                                                                     MANAGEMENT DISCUSSION AND ANALYSIS
Based on macro economic indicators, Indonesian           parties and work units. This is primarily related to the
economy on year 2011 grew relatively promising           increased competition in the micro, small and medium-
despite the global economic turmoil that was caused      sized enterprise (MSME) market segment as well as
by unresolved debt crisis in Europe and weakening        non-bank financial products; while also diminishing
of US economy. Inflation was pressed under low           or eliminating altogether the gap that usually arises
level of 3,79%, the composite stock price index rose     when the speed of business expansion could not be
by 3.20%, the economy itself grew by 6.5% and            matched by the fulfilment of supporting resources,
the value of Rupiah appreciated relatively to year       thereby compromising service quality.
2010, while Indonesia’s balance of payment shows
substantial surplus.                                     Furthermore, all of the Bank’s operational activities
                                                         has to be done based on good corporate governance
This national economic condition that continues to       principles, with the orientation of creating customer




                                                                                                                     CORPORATE GOVERNANCE
strengthen and inspire our confidence, contributed       satisfaction, internal control and risk management that
to the performance of the Bank in 2011 that showed       all can be done in compliance with prevailing rules and
improvements respectively to year 2010. This was all     regulations, while all employees also adhere fully to the
captured in this year’s key indicators and financial     Bank’s Code of Ethics in executing their duties and
ratios, such as the total assets of Rp469.90 trillion    responsibilities.
that increased by 16.23%, total loan outstanding of
Rp294.51 trillion that grew by 16.64%, total third-      The Bank’s annual theme for 2012, “The Best Bank in




                                                                                                                     CORPORATE SOCIAL RESPONSIBILITY
party funds of Rp384.26 trillion that expanded by        Indonesia with Superior Good Corporate Governance
15.17%, a net interest income of Rp34.43 trillion        Practices,” is in line with the concern of the Board of
that rose by 4.68%, a net profit after tax of Rp15.09    Commissioners in light of the increasingly dynamic and
trillion that went up by 31.52%, and a gross non         competitive banking industry, and also in light of the
performing loan ratio of 2.30% that improved from        Bank’s status as a publicly listed company that requires
2.78% in 2010.                                           all employees, regardless of their posts throughout
                                                         the country, to fully implement the principles of good
In addition, the Bank’s service network which is         corporate governance in their respective duties.
supported by advanced and fully reliable information
technology had expanded during the year to a total       As an organ of the Bank, the Board of Commissioners
of 985 offices, comprising of 18 Branch Offices, 32      constantly strives to enhance the quality of its



                                                                                                                     SUBSIDIARIES
Sub Branch Offices, 200 BRI Units, 48 Cash Offices       supervisory control over the Bank, while working
and 687 BRI Teras. The Board of Commissioners            together in harmony with the Board of Directors in
expresses its appreciation and commendation to the       2012 as mandated by the Articles of Association of the
BOD as well as all employees and stakeholders for        Bank and guided by the prevailing relevant laws and
                                                                                                                     BUSINESS STRATEGY



their tireless efforts and support throughout 2011 in    regulations.
enabling the Bank to perform better in 2011 than in
the previous year.                                       May Allah SWT, God Almighty, continues to bless
                                                         us and provide us with His strength, guidance and
The Indonesian economy in 2012 is predicted to           benevolence. Amen.
have good prospects and become an attractive
destination for global investor on account of the        Wassalamualaikum Wr. Wb.,
                                                                                                                     FINANCIAL STATEMENTS




investment grade rating that Indonesia has recently
received from two international rating agencies.
In line with that, the Board of Commissioners is
optimistic that the Bank’s performance in 2012 will
experience growth compared to year 2011, especially
in activities related to international businesses as     Bunasor Sanim
well as new business developments.                       President Commissioner/Independent Commissioner
                                                                                                                     OTHERS




                  15
          ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                              15
RePORT ON THe SUPeRVISORY DUTIeS Of
BOARD Of COMMISSIONeRS

foreword

As the Bank’s Board of Commissioners commitment to its main duties, which is essentially a supervisory role,
this Report on the Supervisory Duties of the Board of Commissioners throughout the year 2011 is presented
in the Bank’s Annual Report. This report is a broad outline from the execution of supervisory duties by the
Board of Commissioners, so that stakeholders can retrieve relevant information on the activities of the Board of
Commissioners in its supervisory role.

The supervision duties of the Board of Commissioners was executed in accordance with the task, duties and
responsibilities of the Board of Commissioners as stipulated in the articles of association of the Bank and
prevailing regulations; and was meant for conformity and consistency of the implementation of the Company’s
business activities with RKAP (Work Plan and Company Budget) which was established at the beginning of the
year, the implementation of the principles of good corporate governance and risk management in all units, and
the optimization of the Company’s operational activities in providing banking services.

Supervisory duties by the Board of Commissioners, in principle, were done through active supervision such as
regular discussions on the Bank’s periodic performance, and also field visits to regional offices. Additionally, the
Board of Commissioners undertook evaluation and analysis of the Bank’s operational activities through various
reports directed to the Board of Commissioners. In discharging its duties, the Board of Commissioners were
assisted by the Audit Committee, Risk Management Monitoring Committee and Nomination and Remuneration
Committee.

The Report on the Supervisory Duties of the Board of Commissioners presented on this annual report covers
general topics on supervisory recommendation and the Bank’s performance in 2011.



Supervisory Recommendation



Qualitatively, supervisory recommendations by the               especially in Europe that may impact on weaker
Board of Commissioners were as follows:                         demands from affected European countries, and
                                                                the expected slow down in the economic growth
1. Lending                                                      of several Asian countries in 2012. With that in
   The utilization or disbursement of loan facilities           mind, the Board of Commissioners has requested
   that have been approved need careful attention,              the Management to be highly selective in loan
   in that the disbursement is in line with financing           expansion for 2012, especially to borrowers
   need of the borrower. In this case, the role of              whose products are primarily marked for the
   the business unit as the loan provider needs to              export markets. Thus, in addition to observing
   increase its monitoring of the borrower’s business           the principles of prudent and selectivity when
   while also evaluating the feasibility of the loan            loan facilities are to be increased, it is imperative
   disbursement by the borrower in question.                    that the monitoring of the borrower’s performance
   Although the NPL ratio at year-end 2011 had                  should also be increased. Especially with regard
   declined from the previous year, the absolute                to borrowers who had received loan in foreign
   amount of NPL in 2011 remained fairly high,                  currency denomination, monitoring should focus
   thereby requiring the full efforts and attention of          on the volatility of the Rupiah exchange rate
   the Board of Directors to continuously reduce                against several major foreign currencies.
   NPL in 2012.
                                                                Efforts to increase the amount of collection on
   With respect to loan expansion by year-end 2012,             loan that has been written-off should become
   we regard this as quite optimistic considering               the attention of the relevant operating units and
   the continuing concern over the global crisis                undertaken in line with the prevailing rules and
                                                                regulations.



            16             ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                    FOREWORD
2. funding                                                  achieve      better result of the Bank’s business




                                                                                                                    COMPANY PROFILE
   Efforts to increase low-cost funds have                  plan with the support of competent and adequate
   always been recommended by the Board of                  personnel as well as reliable IT system that can
   Commissioners as a way to manage more                    provide quality services to satisfy the customer.
   competitive interest rates for the customers             The reliability and safety of IT network should
   compared to other banks.         The opportunity         be constantly enhanced. In addition, it has been
   for the Bank to increase its low cost funding is         recommended that every policy established by




                                                                                                                    MANAGEMENT DISCUSSION AND ANALYSIS
   widely open in line with the expanding service           the Board of Directors should be understood and
   network and increased promotion. The ratio of            carried out by every operating unit at all level of
   low-cost funds to total third party funds as of          the organization.
   year-end 2011 was 60.09% and this need to be
   increased further in 2012 in order to make the           With regard to the personnel recruitment plan
   Bank’s interest rate even more competitive. The          in 2012, it should be prepared well in advance
   growth target for third party funds by year-end          in order to achieve the targeted personnel
   2012 should be pursued continuously throughout           recruitment while also executing better monitoring
   the year in order to support the growth target for       of the entire process. In addition, personnel
   loan expansion.                                          competencies should constantly be raised not
                                                            only through training and educational programs
3. Revenues and expenses                                    relevant to the respective duties, but also through




                                                                                                                    CORPORATE GOVERNANCE
   Other sources of income in addition to the               instilling a culture of supervision and coaching by
   interest income needs to be enhanced in order            operating unit heads.
   to intensify the Bank’s income structure and
   to optimize current investments. These other          6. Internal Control
   sources of income consist of activities involving        The audit findings of internal and external
   trade finance, remittance, bank guarantee, cash          auditors has to be in significant attention of, and
   management, and transactional account by                 followed up by the relevant operating units. The
   capitalizing on branch network. In the meantime,         Board of Directors needs to ensure that follow-up




                                                                                                                    CORPORATE SOCIAL RESPONSIBILITY
   on the expenses side, attention is necessary in          actions by the relevant units should be carried out
   order to achieve efficiency especially in managing       consistently and that audit findings of a similar
   non-interest expenses that are controllable.             nature should not recur in the same operating unit
                                                            in the future.
   The target for fee based income in 2012 should
   be pursued optimally through the right strategy          In regards to the internal audit plan for 2012 which
   and effective measures. Also, it is recommended          will be carried out by Bank’s Internal Audit Unit,
   to constantly implement interest rate policies for       the plan needs to be in line with the audit plan that
   both funding and lending that are in line with the       has been approved by the Board of Directors and
   prevailing interest rate of competing banks. Non-        Board of Commissioners. The Board of Directors
   interest operating expenses that are deemed              should ensure the prerequisites and competence



                                                                                                                    SUBSIDIARIES
   controllable should be managed efficiently such          of the auditors including all the supporting tools
   that the ratio of Operating Expense to Operating         and equipments required to undertake the task.
   Income in 2012 would be lower than the previous
   year. Expenses for promotional activities in 2012     7. equity Participation
                                                            Equity participation in subsidiary companies
                                                                                                                    BUSINESS STRATEGY


   should be harnessed effectively with the strong
   focus on growing third party funds.                      should be based on a strategy to develop the
                                                            subsidiaries effectively, synergistically and
4. Capitalization                                           mutually beneficial. In addition, adequate
   The plan to issue sub debt in 2012 should be             supervision should be exercised on the business
   based upon thorough analysis and undertaken              plan execution of the subsidiary companies in
   in line with the prevailing laws and regulations         order to achieve their target.
                                                                                                                    FINANCIAL STATEMENTS




   as well as with the most favorable terms and
   conditions for the Bank, especially with regard to    8. Capital expenditure
   the determination of coupon rates.                       Capital expenditure realization in regards to
                                                            physical infrastructure development that supports
5. Human Capital and Information Technology                 the Bank’s operation should be the concern of all
   Improvements in the areas of human capital               related operating units. The budget for Capital
   management and infrastructure (IT and non IT)            Expenditure should be fully utilized in order to
   should be reevaluated periodically in order to           enhance the quality of service to customer.
                                                                                                                    OTHERS




                  17
         ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                               17
9. Office Network
   The opening of new operating unit especially BRI              For the year 2012, fund disbursement for the
   Unit and Teras BRI should be well coordinated                 partnership program should still be undertaken
   among the relevant directorates who are                       selectively, mentoring and monitoring of the
   responsible with the establishment and operations             funds beneficiaries should be executed flawlessly
   of BRI Unit and Teras BRI. This is to ensure the              in order to ultimately turn these beneficiaries into
   operational efficiency of both BRI Unit and Teras             KUR or Kupedes borrower. Whereas the use of
   BRI. Same thing also applies for EDC equipment                funds for the community development program
   disbursement, the realization has to be in possible           should be directed to projects or activities that
   maximum impact.                                               enhances the corporate image of the Bank as
                                                                 well as capacity building for the beneficiary
   The target for branch network expansion in 2012               communities.
   should go hand in hand with the enhancement
   of coordination quality between directorates or            BANK PeRfORMANCe IN 2011
   with relevant operating units since early 2012
   to achieve better synchronization and anticipate           The opinion of the Board of Commissioners with
   all barriers toward target achievement. Such               respect to the performance of the Bank in 2011 are
   coordination includes:                                     as follows:


   • Human capital, with regard to manpower                   1. financial
     analysis,   formation     establishment    and              The financial performance of the Bank as of year-
     fulfilment of that formation through active                 end 2011, compared to the corresponding period
     coordination and interdependencies between                  of the previous year, showed improvement as
     the Human Capital Management Division,                      seen by the increase and improvement of several
     Business Development and Strategic Planning                 parameters, namely:
     Division, Micro Business Network Division
     and Retail Business Network Division. The                   a. Total Asset amounted to Rp469.90 trillion,
     employee formation for BRI Unit should                         an increase of Rp65.61 trillion, or 16.23%,
     require the attention of the Board of Directors                from Rp404.29 trillion as of end of December
     in consideration of the relatively high loan                   2010. The increase mainly arose from loan
                                                                    disbursement of Rp42.03 trillion and non
     expansion target for the micro business in
                                                                    earning asset of Rp14.63 trillion.
     2012.

                                                                 b. Total loan disbursement amounted to
   • Information technology, with regards to
                                                                    Rp294.51 trillion, an increase of Rp42.03
     e-channel procurement, should be undertaken
                                                                    trillion or 16.64% from Rp252.49 trillion at end
     between the Technology and Information
                                                                    of December 2010.
     System Division, the Logistics and Fixed Asset
     Management Division, the Micro Business
                                                                 c. Third party funds amounted to Rp384.26
     Network Division, the Retail Business Network
                                                                    trillion, an increase of Rp50.61 trillion or
     Division, and the user operating unit.
                                                                    15.17% from Rp333.65 trillion at end of
                                                                    December 2010. The ratio of low-cost fund
   • Supporting logistic, in relation to the acquisition
                                                                    versus high-cost fund by December 2011 was
     of land, building, office fixtures and equipments
                                                                    60.09% : 39.91%.
     should be carried out between the Logistic and
     Fixed Asset Management Division and the user
                                                                 d. Gross non performing loan ratio was 2.32%,
     operating unit.
                                                                    an improvement from the position in December
                                                                    2010 of 2.79%.
10. Partnership      Program      and    Community
    Development (PKBL)
                                                                 e. Net interest income reached Rp34.43 trillion,
   Optimizing the disbursement and utilisation of the
                                                                    an increase of Rp1.54 trillion or 4.68%, from
   PKBL funds requires the attention of all relevant
                                                                    Rp32.89 trillion at year-end 2010.
   operating units while also adhering to prevailing
   regulations. In addition, the record-keeping and
                                                                 f. Net income after tax for financial year 2011
   accountability for the disbursement and utilisation
                                                                    amounted to Rp15.09 trillion, an increase of
   of the associated funds, should be undertaken
                                                                    Rp3.62 trillion, or 31.52%, from that of the
   properly within the generally accepted accounting
                                                                    previous year.
   standard.




            18              ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                      FOREWORD
                                                                                                                      COMPANY PROFILE
   g. Loan to Deposit Ratio was 76.20%, an increase        4. Profitability
      from 75.17% at the end of December 2010.                The profitability of the Bank remained strong
                                                              as evident from the net profit of Rp15.09 trillion
   The increase in financial performance that is              in 2011. The domination of loan within the
   reflected in the above key indicators was the              Bank’s earning assets structure especially in
   results of operations by the Bank’s management             retail and micro loans represent one of the




                                                                                                                      MANAGEMENT DISCUSSION AND ANALYSIS
   and employees who executed all of the work                 pillars for profitability, in which most of the
   plans and activities contained in the Bank’s               loan disbursement have relatively low risk-
   Budget and Business Plan for 2011. The budget
                                                              weighted asset. Profitability was also boosted by
   and business plan contained the main qualitative
                                                              improvements in the quality of loan, thus inducing
   and quantitative business targets, the formulation
                                                              lower loan loss provisioning expenses.
   of which began with a thorough SWOT analysis of
   the Bank vis-a-vis its business development. The
                                                           5. Capitalization
   role of the Board of Commissioners as an organ
                                                              Capital adequacy ratio (CAR) was realized at
   of the Bank in connection with the budget and
                                                              14,96% (after adjusting for credit risk, market risk
   business plan was to provide the approval and
                                                              and operational risk), well above the minimum
   endorsement of the Bank’s budget and business
                                                              CAR requirement of 8.00% by Bank Indonesia.
   plan prior to making it the target guidelines for
                                                              The CAR ratio is dominated by Tier-1 capital
   all rank-and-file of the Bank. That particular




                                                                                                                      CORPORATE GOVERNANCE
                                                              amounting to 91.39%, such that the ratio of Tier-1
   role was executed judiciously by the Board of
                                                              capital to total risk-weighted asset was 13.67%.
   Commissioners through extensive discussions
                                                              This showed that the composition of the Bank’s
   and adjustments in order to ensure a realistic
                                                              capital is extremely sound, being dominated by
   budget and business plan.
                                                              Tier-1 capital that was mainly derived from net
                                                              profit.
2. Risk Profile
   The result of BRI’s risk profile indicates a low to
                                                              On the other hand, with the 20% dividend payout




                                                                                                                      CORPORATE SOCIAL RESPONSIBILITY
   moderate risk level with several parameters of
                                                              ratio over the net profit from financial year 2010
   inherent risks that can still be mitigated and stay
                                                              that was distributed to the shareholders in 2011,
   within tolerable levels. However, certain items that       this will enlarge the retained earning that serves as
   showed relatively high risk should be carefully            an important capital component in the calculation
   monitored and mitigated. In general, the quality of        of CAR.
   the risk management implementation is deemed
   capable for risk mitigation.                            6. Non-performing Loans and extracomptables
                                                              Restructuring and/or remediation of non-
3. Good Corporate Governance (GCG)                            performing loans including loan that has been
   The rating on the implementation of Good                   written-off, in principle has been undertaken with
   Corporate Governance (GCG) continued to                    best efforts such that the realization of gross NPL



                                                                                                                      SUBSIDIARIES
   improve from the previous year. This was reflected         as of year-end 2011 as low as 2.32%, whereas
   from the GCG self assessment that produced                 net NPL was 0.42%.
   a composite score of 1.30, better than the
   composite score of 1.45 of the previous year. The
                                                                                                                      BUSINESS STRATEGY


   Board of Commissioners and Board of Directors
   are firmly committed to implementing GCG in
   every activity of the Bank.
                                                                                                                      FINANCIAL STATEMENTS




  We are pleased to submit the above report on the supervisory duties of the Board of Commissioners on the
                                      Bank’s business operation of 2011.

                                          The Board of Commissioners
                                     PT Bank Rakyat Indonesia (Persero) Tbk.
                                                                                                                      OTHERS




                   19
          ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                 19
PROfILe Of THe BOARD Of COMMISSIONeRS




Bunasor Sanim                                   Hermanto Siregar                               Agus Suprijanto
President Commissioner/                         Commissioner                                   Commissioner
Independent Commissioner
                                                Indonesian citizen, 48 years old. Appointed    Indonesian Citizen, 58 years old. Appointed
Indonesian citizen, 66 years old. Appointed     as Commissioner of BRI since 28 April          as Commissioner of BRI since 22 May 2007.
as Independent Commissioner of BRI on 19        2011. Previously, he was Independent           Currently, he is also the Director General
May 2005, as President Commissioner of          Commissioner       of    PT     Permodalan     of Treasury of the Ministry of Finance.
BRI on 30 May 2006 and re-appointed for         Nasional Madani (PNM) (2007), President        Previously, he was Acting Head of Fiscal
second period on 28 April 2011. Currently       Commissioner of PT PNM (2008-2011),            Policy Agency of the Ministry of Finance
also a lecturer for the undergraduate and       Secretary General of PERHEPI (2007-2011),      (2010).	Expert	staff	of	the	Minister	of	Finance	
graduate programs at Bogor Agriculture          member of Forum of Statistic Society (2007-    for the State Revenue (2008), Head of the
University (IPB). Also active in several        2009), Secretary General of Asia Pasific       Center of Policy Analysis and Harmonization,
organizations, including as member of           Agricultural Policy Forum (2007-2009)          Ministry of Finance (2007), Specialized Staff
Expert	Board	of	the	Indonesian	Association	     and Academy Director of Management             for Minister of Finance in State Revenue,
of Muslim Intellectuals (ICMI), member of       & Business Post Graduate Program at            Ministry of Finance (2008) and Interim Officer
Advisory Board of the Indonesian Agriculture    Bogor Agriculture University (2005-2008).      of Head of Fiscal Policy, Ministry of Finance
Economic Association (PERHEPI), member          Curently also hold position as Vice Dean       (2010), and Director of Foreign Loan and
of Advisory Board of the International Center   for Resources and Development and              Grant Management, Directorate General of
for Analysis of Finance and Economic            Professor of Economics at Bogor Agriculture    Treasury, Ministry of Finance (2006),
(InterCAFE), First Chairman of the Indonesian   University, member of the National Economic
Fertilizer Board (DPI) and First Chairman       Committee of the Republic of Indonesia,        He earned his bachelor’s degree in Law from
of Indonesian Organic Agriculture Society       Chairman of the Indonesian Agriculture         the Udayana University, Denpasar (1985),
(MAPORINA). He was once the Consortium          Economic Association (PERHEPI), and            Master of Arts in international economics
Coordinator on Agriculture and Natural                                                         (1991), and Ph.D in Econometrics (1995),
Resources of SEARCA-SEAMEO (1989-               Earned his degree in Enginering from Bogor     both from University of Colorado, Boulder,
2002) and Senior Scientist Partnership, for     Agriculture University (IPB) in 1986, Master   USA.
the cooperation between IPB and University      of Economics in Agriculture Economics from
of Gottingen (Jerman).                          New England University, Amidale Australia
                                                (1991), and Ph.D in Economics from Lincoln
Earned his bachelor’s degree in Agriculture     University, New Zealand (2003).
Social Economics from Bogor Agriculture
University (IPB) in 1972, Master of Science
in Agricultural Economics in 1982 and
Ph.D in Resources Economics in 1986,
both from the University of the Philippines
at Los Banos. He pursues Post Doctoral
Program at Harvard Institute of International
Development (HIID), Harvard University,
Cambridge, USA (June-July 1994).




               20                 ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                                FOREWORD
                                                                                                                                                COMPANY PROFILE
                                                                                                                                                MANAGEMENT DISCUSSION AND ANALYSIS
                                                                                                                                                CORPORATE GOVERNANCE
                                                                                                                                                CORPORATE SOCIAL RESPONSIBILITY
Heru Lelono                              Aviliani                                               Adhyaksa Dault
Commissioner                             Independent Commissioner                               Independent Commissioner

Indonesian Citizen, 56 years old.        Indonesian Citizen, 50 years old. Aviliani has         Indonesian Citizen, 48 years old. Adhyaksa
Heru Lelono has been appointed           been reappointed as Independent Commissioner           Dault has been appointed the Independent
as Commissioner of BRI since 20          of BRI since 20 May 2010. Currently, she is            Commissioner of BRI on 20 May 2010.
May 2010. Currently, he is also the      also the Secretary of National Committee on            Previously, he was the State Minister of
Expert	Staff	for	the	President	of	the	   Economics (KEN), Chairman of Indonesia                 Youth and Sport of the Republic of Indonesia
Republic of Indonesia. Previously,       Society     of    Independent      Commissioners       (2004-2009) and also Commissioner in
he held several managerial positions     (ISICOM), Committee member of the National             several companies (1999-2002).
including     Managing Director of       Bank Association (Perbanas), member of the
PT Telesera Rajawali Corp. (1995-        Expert	 Board	 of	 the	 Sharia	 Economics	 Society	    He earned his bachelor’s degree in Law from
1998) and Director of Business           (MES), Committee member of the Indonesian              the University of Trisakti, Jakarta (1989), a
Development of PT Bukit Jaya             Association of Economics Graduates (ISEI),             master’s degree in Community Development




                                                                                                                                                SUBSIDIARIES
Abadi, Surabaya (1993-1995).             Advisor of the Indonesian Chamber of Commerce          from the University of Indonesia, Jakarta
                                         (KADIN) in field of Coorporative Relationship          (1999) and also a doctorate degree in Marine
He earned his diploma’s degree           Indonesia-Singapore, Advisor of Asosiasi Emiten        Science and Technology from the Bogor
in Architecture from the Catholic        Indonesia,	 and	 Expert	 Board	 of	 the	 Indonesian	   Agriculture University (2007).
University    of   Soegijapranata,       Association of Muslim Intellectuals (ICMI),
Semarang (1983).
                                                                                                                                                BUSINESS STRATEGY



                                         Previously, she served as assistant chief II
                                         Finance & HR Department Perbanas (2000-
                                         2002), General Secretary of Consortium Service
                                         Agency PTS Indonesia (2000-2003), Head of
                                         Management Department, Faculty of Economics,
                                         Paramadina University, Jakarta (2002-2005),
                                         Lecture in Management STIE Perbanas and other
                                         Universities (1986-2005), Director of Institute for
                                         Development of Economics and Finance (INDEF)
                                                                                                                                                FINANCIAL STATEMENTS




                                         (2004-2005) and BRI Independent Commisioner
                                         (2005-2010).

                                         She earned her bachelor’s degree in Economics
                                         from the University of Atmajaya, Jakarta (1985)
                                         and master degree in business administration
                                         from the University of Indonesia, Jakarta (1995).
                                         She is currently pursuing her Doctorate Degree in
                                         Business Management at the Bogor Agriculture
                                         University.
                                                                                                                                                OTHERS




                                 21
                      ANNUAL REPORT 2011              PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                             21
BOARD Of COMMISSIONeRS




   from left to right:
   Heru Lelono, Adhyaksa Dault, Aviliani, Hermanto Siregar, Bunasor Sanim, Agus Suprijanto




   22             ANNUAL REPORT 2011         PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
FOREWORD   COMPANY PROFILE   MANAGEMENT DISCUSSION AND ANALYSIS   CORPORATE GOVERNANCE   CORPORATE SOCIAL RESPONSIBILITY   SUBSIDIARIES   BUSINESS STRATEGY   FINANCIAL STATEMENTS   OTHERS




                                                                                                                                                                                              23
                                                                                                                                                                                              PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                                                                              ANNUAL REPORT 2011
                                                                                                                                                                                              23
MeSSAGe fROM THe PReSIDeNT DIReCTOR




 SOFYAN BASIR
 President Director




        “The year 2011 was a consolidation year for BRI,
 after having outpaced the average growth rates of the national
            banking industry over the past five years”.




        24            ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                              FOREWORD
                                                                                                                                              COMPANY PROFILE
                                                                                                                                              MANAGEMENT DISCUSSION AND ANALYSIS
Assalamualaikum Wr. Wb.

All praises be to God Almighty, for it is with His           However, what was still encouraging is the fact
blessing that BRI was able to navigate through 2011          that developing countries especially those in Asia
with results that surpassed those of the previous            and South East Asia regions still posted promising
year. On behalf of the Board of Directors of BRI, allow      economic growth. The economy of China and
me to present highlights of the Bank’s achievements          India grew 9.2% and 7.4%, respectively, whereas
in 2011 to shareholders and other stakeholders.              the entire ASEAN region as an emerging economy
                                                             posted growth of 4.8%. This brought a sense of
The Global economic Condition                                hope for sustainable economic growth prospects in




                                                                                                                                              CORPORATE GOVERNANCE
The year 2011 witnessed the reemergence of                   the nations of this region, especially for Indonesia as
uncertainties in the global economy, mainly triggered        the largest economy in ASEAN today.
by the sovereign debt crisis of the Eurozone region
and the slow recovery of the US economy, the                 The Indonesian economic Condition
largest importer in the world. These conditions              In line with the economic growth in South East
affected a slow down in the pace of growth of the            Asia, the Indonesian economy grew by 6.5% in
global economy, from approximately 3.9% in 2010              2011, higher than the growth of 6.1% in 2010. This
to 3.8% in 2011.                                             Gross Domestic Product (GDP) growth was mainly




                                                                                                                                              CORPORATE SOCIAL RESPONSIBILITY
                                                             attributed to increases in household consumption
                                                             that grew by 4.7%, investments that increased by
                                                             8.8%, and exports that rose by 13.6% despite the
                                                             uncertain global economic condition of 2011.




                  economic Growth                                             GDP Growth by expenditure
                       (%)                                                              (%)



                                                                                                                                              SUBSIDIARIES
                                    9.2

                                                                     25.4          28.7
                                            7.4                                                  21.3           23            24.9
                                                    6.5
                                                                                                                                              BUSINESS STRATEGY


                                                                     29.4          29.8          24.1           24.6          26.3
                             4.8
                                                                     25            27.7          31.1           32.2
        3.8                                                                                                                   32.0
                                                                     8.4           8.4           9.6            9.1           9.0
               1.8    1.6
                                                                     63.5          60.6          58.7           56.7          54.6
                                                                                                                                              FINANCIAL STATEMENTS




       World America Europe South China    India Indonesia    2007          2008          2009           2010          2011
                           East Asia
                                                               Consumption         Government           Investment      Export       Import
                                                                                   Spending
                                                                                                                                              OTHERS




                     25
          ANNUAL REPORT 2011              PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                 25
  A positive factor that continues to shield Indonesia                   Strong macro economic policies, strengthened even
  from the storm of global financial crises is the                       further by a dynamic micro economy, have created
  composition of GDP that is largely dominated                           an increasingly conducive investment climate. This
  by domestic consumption, in which household                            has been underscored by the return of Indonesia to
  consumption expenditure accounted for 54.6% of                         an investment grade rating at the end of 2011, which
  the total GDP. Whereas government expenditure                          is expected to draw more foreign investments to
  accounted for 9.0%, investment accounted for                           Indonesia especially Foreign Direct Investment (FDI).
  32.0%, and export and import accounted for 26.3%
  and 24.9% of GDP, respectively.                                        Indonesia’s foreign currency reserves continued to
                                                                         rise, reaching up to USD110.123 billion as of year-
                                                                         end 2011, while the Rupiah exchange rate was
  Robust economic growth is often followed by                            largely stable at around Rp9,000 to the US Dollar.
  growing inflationary pressure. In that context, we                     Throughout 2011, the Composite Stock Price Index
  should appreciate the policies of the government of                    of the Indonesia Stock Exchange remained positive,
  Indonesia in managing macro economic conditions                        rising by 3.2% to 3,821.99 representing one of the
  in such a way as to maintain the rate of inflation                     few stock market indices in the world that performed
  at a reasonable level. The average inflation rate in                   positively.
  2011 could be maintained at 3.79%, well below the
  inflation rate of 6.96% that was recorded at the end
  of 2010. The decline indicates that there has not
  been an overheating of the economy commonly
  associated with an overly rapid economic growth.




                                            MACRO eCONOMIC CONDITIONS


                                                                                                exchange Rate & foreign
Composition of GDP                                        Inflation                                Currency Reserves
          (%)                                                  (%)                                   (in Rupiah & USD billion)


                                                                                                                     11,120              110.12
                                                       11.06
        9.0                                                                                                                          96.21
                 26.3                                                                        9,830
                                                                                                     8,995             9,401                   9,069
                                                8.00                   6.96                                  9,393
54.6                                                                                                                          66.1    8,998
                     24.9                                                                                    56.92
                                                                              3.79                                   51.64
                                                                                                     42.59
                                                               2.78                          34.72
              32.0




   Government        Export        Import       2007   2008    2009 2010      2011           2005 2006 2007 2008 2009 2010 2011
   Expenditure
                                                                                                       Foreign Currency              IDR/USD
   Investment        Consumption
                                                                                                       Reserves




                     26               ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                           FOREWORD
                                                                                                                                           COMPANY PROFILE
Indonesian Banking Industry
With continuous Indonesian economy improvement,                          In terms of loan quality, there was quality improvement
the Indonesian banking industry continued to exhibit                     as indicated by the improving non-performing
positive trends. Total assets of the national banking                    loan (NPL) ratio, from 2.56% in 2010 to 2.17% in
industry increased by Rp643.98 trillion, or 21.40%,                      2011. The banking efficiency rate also continued
to Rp3,653 trillion as of year-end 2011. Likewise                        to improve, as seen from the ratio of Operating




                                                                                                                                           MANAGEMENT DISCUSSION AND ANALYSIS
for deposit and loan, which grew by 19.07% and                           Expense to Operating Income that improved from
24.59%, respectively, such that as of 31 December                        86.14% in 2010 to 85.42% in 2011. Meanwhile, the
2011 total third party funds within the banking                          capital adequacy ratios of the Indonesian banking
system reached Rp2,784.91 trillion, whereas total                        industry remained solid, as measured from the
outstanding loan was Rp2,200.09 trillion. As a result,                   average Capital Adequacy Ratio of 16.05% as of 31
the national banking industry loan to deposit ratio                      December 2011.
(LDR) in year end 2011 was 78.77%, up from 75.21%
in 2010.




                                                                                                                                           CORPORATE GOVERNANCE
                                      PeRfORMANCe Of INDONeSIAN BANKING INDUSTRY




                  Assets                                       Loans                                   Third Party fund
            (in trillion Rupiah)                        (in trillion Rupiah)                            (in trillion Rupiah)




                                                                                                                                           CORPORATE SOCIAL RESPONSIBILITY
                                   3,653
                                                                                                                                   2,785

                           3,009
                                                                               2,200                                      2,339
                   2,534
          2,311                                                        1,766                                     1,951
 1,987                                                                                                  1,753
                                                               1,438                           1,511
                                                       1,308
                                               1,002




                                                                                                                                           SUBSIDIARIES
 2007 2008         2009     2010 2011           2007 2008       2009    2010   2011            2007 2008        2009      2010     2011


                                                                                               Operating expenses to Operating
                                                                                                                                           BUSINESS STRATEGY


                  LDR                                          CAR                                         Income
                   (%)                                          (%)                                                     (%)



                                   78.77                                                             88.59

         74.58             75.21               19.30           17.42 17.18                                      86.63
                  72.88                                16.76                   16.05                                     86.14
                                                                                                                                  85.42
                                                                                                                                           FINANCIAL STATEMENTS




66.92                                                                                        84.05




2007     2008     2009     2010    2011        2007    2008 2009       2010    2011          2007      2008     2009     2010     2011
                                                                                                                                           OTHERS




                           27
             ANNUAL REPORT 2011              PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                    27
The Performance of BRI in 2011
The year 2011 was a consolidation year for BRI, after        In terms of customer, the revitalization was reflected
having outpaced the average growth rates of the              from the BRI’s Micro KUR growth. Throughout 2011,
national banking industry over the past five years.          BRI disbursed a total of Rp29.95 trillion of micro KUR
This consolidation focused on the resolution of NPL          loans, with an outstanding of Rp11.20 trillion as at
that had increased in the previous year, especially in       year’s end. For BRI, aside from promoting the grass-
the small and medium market segments. Precision in           root economy, KUR also serves as a training ground
strategy implementation, followed up with the strong         for the future commercial micro borrowers with lower
commitment and hard work of all of the employees             risk level but still acceptable by the Bank. Micro KUR
and BRI management, resulted an outstanding                  borrowers are embryos for BRI’s commercial micro
performance.                                                 borrowers.

In 2011, BRI posted a net profit of Rp15.09 trillion,        In terms of product development, during 2011, it
an increase of 31.52% from Rp11.47 trillion in 2010.         has been developed product features in both loan
The increase was attributed to the growth of high            product (Kupedes) and saving product (Simpedes),
quality loan as well as from NPL improvement, which          which essentially represent the efforts of BRI to
declined from 2.78% in 2010 to 2.30% in 2011. BRI’s          provide products that are suitable with the needs of
total loan grew 16.64% from Rp252.49 trillion at year        micro customers.
end 2010 to Rp294.51 trillion at year end 2011.
                                                             Being in revitalization stage, BRI’s micro loan in year
In the micro market segment, which represents                2011 was not growing as high as in the years before.
one of the Bank’s core businesses, BRI undertook             But on the other hand, BRI was able to expand its
revitalization in terms of network, customer base            customer base, while also ensuring sustainable
and product development. The revitalization was              growth for the micro business for many years to
performed to achieve sustainable growth in BRI’s             come.
micro business segment, this also serve as one of
BRI’s effort to accelerate the financial inclusion           In the corporate segment, growth was reasonably
process in Indonesian economy.                               high in 2011. Moreover, the growth represented a
                                                             highly selective and quality growth. The growth in
In terms of service network, throughout 2011 BRI             corporate lending was largely aimed at prime State-
added 687 Teras, bringing the total number of BRI            Owned Enterprises (SOE), with several strategic
Teras to 1,304 outlets. On top of that, BRI also             considerations. Another consideration was the
increased the number of BRI Unit offices by 200              opportunity to undertake the cross-selling of BRI
offices in 2011, bringing the total number of BRI            other products and services, as well as achieving
Unit to 4.849 offices. The conventional service              a trickle down business to small and medium scale
network still need to be expanded because for                businesses through the so-called closed demand-
micro businesses, inter-personal relationship is             supply chain financing scheme. The corporate
still the preferred norm of engagement. However,             lending expansion in 2011 will serve as a foundation
in anticipation of technological advances going              for the development of sound micro, small and
forward, the development of the micro business will          medium loan segments in 2012. Another strategic
also put forward IT-based business developments,             consideration was lower capital charge for loan for
among others by developing features in savings               SOE’s will give benefit for BRI.
products and other services that will encourage
micro banking customers to be more familiar with the         Therefore, the three aspects behind the corporate
e-banking service. Eventually this can be expected           loan expansion of BRI were (i) selective targeting, (ii)
to increase the Bank’s operational efficiency as well        trickle down business to the MSME segments, and
as fee based income.                                         (iii) more effective capital utilization.




            28             ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                                                                   FOREWORD
                                                                                                                                                                                   COMPANY PROFILE
                                Net Profit                                                                         NPL (Bank Only)
                             (in trillion Rupiah)                                                                               %



                                                                 15.09
                                                     11.47                                                 3.44                 3.52

                                                                                                                       2.80                  2.78




                                                                                                                                                                                   MANAGEMENT DISCUSSION AND ANALYSIS
                                                                                                                                                      2.30
                                        7.31
                          5.96
               4.84




               2007       2008          2009         2010        2011                                       2007       2008       2009       2010      2011



                                 Loans                                                                        Compositions of Loans
                          (in trillion Rupiah)                                                                                    (%)




                                                                                                                                                                                   CORPORATE GOVERNANCE
                                                                         294.51

                                                                                   32.16            0.07
                                                          252.49                                                   7.30              8.35           8.09            10.92
                                                                                   24.07            17.31          11.82             10.05          9.31
                                                                 20.42                                                                                              8.17
                                                                                   13.84            7.33                                            5.48
                                     208.12                      23.50                                             7.73              7.16                           4.70
                                                17.39            13.83
                 161.11                         20.91




                                                                                                                                                                                   CORPORATE SOCIAL RESPONSIBILITY
                             11.76              14.91                              129.14           46.69          46.61             47.98          46.23           43.85
   113.97                    19.04
                             12.45                               116.73
0.82
            19.73                               99.86
            8.35
                             75.10
            53.21
                                                                                                    28.60          26.54             26.46          30.89           32.36
                                                                 78.00             95.30
                             42.76              55.06
            32.60


    2007            2008             2009                 2010              2011             2007            2008             2009           2010            2011

     Micro          Medium           Retail        Corporation       SOE           Total        Micro         Retail           Medium           SOE          Corporatin




                                                                                                                                                                                   SUBSIDIARIES
                                                                                             Outstanding & Number of KUR Micro Borrowers
                Micro Business Networks                                                                      (in trillion Rupiah & thousand)
                                                                                                                                                                                   BUSINESS STRATEGY




                                                                                                                                                               1.932
                                                                             6.153

                                                                                                  1.478
                                                                                     1.304                                              1.449
                                                      5.266                                                             1.344

                                     4.755                         617
                                                                                                                                                                                   FINANCIAL STATEMENTS




                                                  217
                                                                                     4.849                                                                                 11.20

                                                                   4.649
                             4.417                4.538                                                                                             5.68
            4.300                                                                                           4.47
                                                                                                                                 3.35


   2007             2008              2009                 2010             2011                 2008                   2009                 2010                2011

              BRI Unit                        Teras BRI             Total                                    Outstanding                      Number of Borrowers
                                                                                                                                                                                   OTHERS




                               29
               ANNUAL REPORT 2011                                      PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                                           29
The growth of loans to the small commercial and                                         BRI also succeeded in increasing its fee based
medium segments reflected a development due to                                          income, which in 2011 grew by 19.78%, from
consolidation stage. A thorough improvement in                                          Rp2.81 trillion in 2010 to Rp3.37 trillion in 2011. With
the loan origination system became the main focus                                       this growth, the proportion of fee based income to
of BRI, in order to ensure high quality of the loan                                     total income increased was 6.11% in 2011, from
growth.                                                                                 5.55% in 2010. The increasing role of fee based
                                                                                        income as another source of income reflected BRI’s
On the liabilities side, the amount of BRI’s deposits                                   achievement in income diversification, align with
continued to grow with the composition of funds                                         this is the increasing of e-banking services. This
that is nearing optimum. Savings growth reached                                         could be seen from the addition of ATM network
22.34% or Rp154.13 trillion while demand deposit                                        in various areas, and also additional features in
funds amounted to Rp76.78 trillion, slightly less by                                    banking transaction services through the BRI ATM
0.76%, such that the composition of savings and                                         that up to now has reached more than 700 features.
demand deposits at BRI were 40.11% and 19.98,                                           BRI also benefitted from various cooperations with
respectively, of total deposits. Meanwhile time                                         public and private institutions by undertaking cross-
deposits grew by 17.69% to reach Rp153.35 trillion,                                     selling as well as increasing fee based income out of
hence the composition of BRI’s low-cost funds                                           remittances and other banking services.
amounted to 60.09% with 39.91% representing
higher cost funds.                                                                      Development of Human Capital
                                                                                        The development program for BRI personnel over
The encouraging growth of savings could be                                              the past several years has been designed to
attributed to the marketing communications program                                      change the general mind set from human resources
of BRI such as Untung Beliung BritAma and Pesta                                         development to human capital development. This
Rakyat Simpedes. Other successful strategies                                            will position BRI employees more as an asset or
include innovations in BRI funding products, such as                                    capital who are able to create sustainable value for
the savings product BRI Junio, BritAma Saving Plan,                                     the Bank and its stakeholders.
and the Simpedes Impian that are designed to meet
specific customer needs.




                     Third Party funds                                                                      fee Based Income
                         (in trillion Rupiah)                                                                    (in trillion Rupiah)


                                                                 384.26                                                                                      6.11%
                                                                                                 5.76%          5.68%                     5.55%
                                                                                                                               5.30%
                                           333.65                                                                                                            55.11
                                                                           153.35                                                             50.67

                            255.93
                                                         130.30                                                                39.93

            201.54
                                         101.37                                                                 31.11
 165.60
                                                                                                 25.29
                          73.54
                                                                           154.13
          56.14                                          125.99
                                         104.46
                          88.08
          72.30

                                                                                                                        2.12           2.81           3.37
                                                         77.36             76.78          1.46           1.77
          37.16           39.92          50.09

 2007             2008            2009            2010            2011                       2007           2008           2009           2010           2011
     Current Account           Savings            Time Deposit            Total                  Fee Based Income                 Total Income                   Contribution (%)




                  30                     ANNUAL REPORT 2011                         PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                              FOREWORD
In developing future leaders for the Bank, BRI carries                          Risk Management




                                                                                                                                              COMPANY PROFILE
out a Staff Development Program (SDP) in which                                  A good business expansion without a reliable
every management trainee recruited by BRI will                                  risk management system will obviously endanger
undertake an intensive, 13-month training program.                              the continuity of the business. BRI maintains a
The final test of each trainee will be supervised                               comprehensive risk management system and
and graded directly by the team of BOD, and upon                                function, while also implementing the principles of
graduation, they will continue to receive training                              the Basel Committee on Banking Supervision as




                                                                                                                                              MANAGEMENT DISCUSSION AND ANALYSIS
and educational programs throughout their careers                               stipulated in the regulation of Bank Indonesia. BRI’s
with BRI. During their career in BRI, they will have                            Risk Management has implemented the accords of
various work experience to broaden their horizons                               Basel I and Basel II that in principle is structured in
as well as sharpen their skills. From that we can                               the three lines of defense that is aimed at preserving
infer that the management of human capital (HC)                                 the integrity of independence in the decision making
at BRI constitutes a series of integrated operational                           process. The Board of Directors and Board of
activities within the framework of the HC architecture                          Commissioners play key roles in the implementation
from planning, recruiting, developing, retaining and                            and supervision of Risk Management. These roles
performance monitoring, to terminating.                                         are implemented in the Risk Management Committee
                                                                                (RMC) that meets periodically in every quarter to
Throughout 2011, BRI recruited employees, from                                  discuss the risk profile of BRI from time to time.
either internal or external sources, a total of 357




                                                                                                                                              CORPORATE GOVERNANCE
managerial candidates through SDP. In addition                                  Risk management is a key priority that constitutes
to recruiting to fill up technical position, BRI also                           the foundation for every major step taken by BRI. As
recruited personnel for marketing and frontliners who                           such, the theme of this annual report, “BRI Grows
are also continuously prepared with the practical                               Confidently, Supported by Prime Risk Management,”
skills and knowledge that are relevant to their needs                           aptly describes the readiness of BRI to compete
in the field.                                                                   effectively in the    dynamic and ever-changing
                                                                                banking market in the years to come.




                                                                                                                                              CORPORATE SOCIAL RESPONSIBILITY
                                                                                The focus on risk management implementation can
                                                                                be seen from the Bank’s risk profile in the last 3 years,
                                                                                where in aggregate BRI’s risk profile experiencing a
                                                                                positive trend (declining risk), even though still within
                                                                                low to moderate risk category.




                                                                                                                                              SUBSIDIARIES
                        e-Channel                                                                BRI Risk Profile (2009-2011)

                                                          742     31,590                                                                      BUSINESS STRATEGY



                                                                             Moderate


                                          530

                             425


                                                                                  Low
                                                                           to Moderate
                287                              13,631
                                                                                                                                              FINANCIAL STATEMENTS




   155
                                 6,398                    7,292
                                         6,085
                         3,778                                                    Low

 1,262          1,796



 2007           2008         2009           2010                2011                         2009                  2010           2011
                                                                                                                                              OTHERS




         ATM             EDC                       Features                              Quarter 1     Quarter 2      Quarter 3   Quarter 4




                        31
               ANNUAL REPORT 2011                   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                            31
Good Corporate Governance
With regard to Good Corporate Governance                    (Dapenbun), effectively making BRI the controlling
(GCG), BRI continues to implement GCG policies              shareholder of Bank Agro. Subsequently, in line
consistently and when necessary undertake                   with the regulation of Bapepam-LK, BRI exercised
improvements. The policies and principles of GCG at         the Tender Offer for the shares of Bank Agro held
BRI are formulated based on prevailing laws and the         by public shareholders. The acquisition of Bank
Indonesian Corporate Governance Code.                       Agro is expected to provide a positive synergy to the
                                                            business growth of BRI considering that Bank Agro
In order to ensure the effective implementation             has a unique niche market in the plantation sector.
of GCG in each and every operating unit of BRI,
monitoring is carried out both off-site and on-site.        Also in 2011, BRI completed the acquisition of
The results of this monitoring are used to evaluate         BRIngin Remittance Company Limited (BRC) that
the policies of GCG at BRI. In 2011, BRI formulated         is based in Hong Kong. This acquisition will add
several new GCG policies, among which are the               to BRI’s competitive advantage in the remittance
manual for transparency and disclosure as well as the       services, strengthening BRI’s offshore remittance
respective charters of the Board of Commissioners           business, especially in Hong Kong.
and Committees under the Board of Commissioners.
                                                            BRI’s Business Plan
To enhance GCG implementation quality, self                 The year 2012 will be a year of quality growth for
assessment over GCG execution in corresponding              BRI. The consolidation that took place in 2011 has
operating units are being done periodically. Aside          provided BRI with a fresh start to expand and grow
from that, internal socialization and coordination          its business in 2012. BRI will remain focused on the
is being done continuously to increase awareness            MSME segment by expanding the micro, small and
on GCG implementation. Each BRI employees                   medium segment relying on the trickle down business
is required to sign a Statement of Compliance               from the corporate business. The micro segment will
with respect to the Code of Ethics as part of their         continue to be expanded by relying on adequate
commitment to implement the principles of GCG,              resources, including the enhancement of its human
namely transparency, accountability, responsibility,        capital. Furthermore, the micro business, aside from
independency, and fairness.                                 being the core business of the Bank, it also serve to
                                                            support the Indonesian economy in terms of financial
BRI also keep forward in developing application             inclusion. Meanwhile, the development of fee based
system in managing document/regulation and                  income and e-banking will be intensified to realize
compliance toolkit (compliance dashboard) that              the vision of a national payment gateway for the
were coming from integration of several system              Indonesian economy within its time table.
application, resulting in the enhancement of
compliance on GCG implementation at BRI as well             For 2012, with the target of becoming “The Best
as greater efficiency. A more detailed account on           Bank in Indonesia with Superior Good Corporate
the implementation of good corporate governance is          Governance Practices,” BRI has established its
presented in the section on Corporate Governance            strategic direction as follows:
of this annual report.
                                                            a. The main business of BRI will still be directed on
Non-Organic Growth                                             the disbursement of loan and raising of funds from
The business of BRI continues to grow and expand,              customers, as well as the providing of banking
providing optimum benefits to its stakeholders.                services, in such a way that BRI can rely on its
However, with the increasingly complex and                     revenue sources from both interest income and
competitive banking industry, a non-organic                    fee based income, with details as follow:
business growth becomes an alternative to growing
the Bank’s business.                                           a.1 Focusing on lending to the micro, small
                                                                   and medium business segment while also
Following a thorough due diligence on the potential                capturing business opportunities from the
synergy, on 3 March 2011, BRI signed the Deed                      corporate segment that offers trickle down
of Acquisition of the Shares of PT Bank Agroniaga                  business to the MSME business. This will
Tbk. (Bank Agro) with Dana Pensiun Perkebunan                      boost expansion of the MSME business
                                                                   segment in terms of both speed and quality.




            32             ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                     FOREWORD
   a.2 In terms of third party fund, BRI will strive to    Allow me to express our appreciation and gratitude




                                                                                                                     COMPANY PROFILE
       increase low-cost funds (demand deposits            to Mr. Bambang Soepeno for his services and
       and savings) to be maintained at no less            commitment to the Bank while serving as a Director
       than 60% of the total amount of Third Party         of BRI. At the same time we extend our welcome to
       Funds.                                              Mr. Randi Anto and Mr. Gatot Mardiwasisto, both
                                                           of whom are newly appointed Directors of BRI,
   a.3 Capitalizing on BRI’s on-line network               with the hope that we can all work as a team and




                                                                                                                     MANAGEMENT DISCUSSION AND ANALYSIS
       throughout Indonesia; BRI will provide              coordinate our efforts in the best possible way for the
       banking services that support all financial         sustainable growth of BRI.
       activities of the customer whether in financial
       management or in banking transaction with           The inspiring achievements of BRI in 2011 were
       their counterparts. This strategy is aimed at       attributed to the trust, commitment and cooperation
       developing a closed financial system that is        of all stakeholders of BRI. The hard work and
       community based as well as to increase the          commitment of every employee of BRI were key
       Bank’s fee based income.                            factors of those achievements, for which we extend
                                                           our heartiest gratitude to each and every employee
b. To maintain a strong capital structure, the steps       for the Bank’s success. Throughout 2011, the
   that will be taken include strengthening the Bank’s     guidances of the Board of Commissioners were also
   portfolio through efficient capital allocation,         a major factor to BRI’s outstanding achievements,




                                                                                                                     CORPORATE GOVERNANCE
   business       process     reengineering,    capital    and we owe the Board a great debt of gratitude
   restructuring through the issuance of subdebts in       for the excellent cooperation. We also express our
   line with market opportunities, and optimizing the      appreciation for the support given to BRI by our
   Bank’s dividend pay out ratio.                          shareholders, customers, and business partners.

c. To maintain and increase its market share, BRI          In the future, we will continue to strive our best
   will continue to expand the reach of its banking        in the interest of BRI’s stakeholders, in which




                                                                                                                     CORPORATE SOCIAL RESPONSIBILITY
   services by opening new outlets throughout              these achievements were not only the results of
   Indonesia, whether through conventional outlets,        commitments and efforts of the management and
   electronic outlets and other service outlets. The       employees of BRI, but also came as a result of the
   expansion of outlets will still be undertaken           support and trust of the Board of Commissioners,
   selectively and judiciously, considering both           all shareholders, customers and business partners
   internal and external factors.                          of BRI.

BRI will also develop new business opportunities that      Wassalamualaikum Wr. Wb.
are both sound and profitable, whether organically
or inorganically, ahead of the evolving demands of
customers and Indonesian people that will become



                                                                                                                     SUBSIDIARIES
more advance in the years to come.

I am pleased to report that on 11 January 2011, BRI        Sofyan Basir
successfully undertook a stock split of 1:2, in which      President Director
                                                                                                                     BUSINESS STRATEGY



a single share of BRI with a nominal value of Rp500
per share is split into two shares, each with a nominal
value of Rp250 per share. Thus effective 11 January
2011, the total outstanding shares of BRI amounted
to 24,669,162,000 shares, with fully subscribed and
paid shares amounting to Rp6,167,290,500,000,-.
The composition of shareholders remained
                                                                                                                     FINANCIAL STATEMENTS




unchanged, with 56.75% of shares held by the
Republic of Indonesia and the remaining 43.25%
shares held by public shareholders.
                                                                                                                     OTHERS




                   33
          ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                33
PROfILe Of THe DIReCTORS




Sofyan Basir                                  Sarwono Sudarto                                  Achmad Baiquni
President Director                            Director of Operations                           Director of finance

Indonesian citizen, 53 years old. Appointed   Indonesian citizen, 59 years old. Appointed      Indonesian citizen, 55 years old. Appointed
as the President Director on 17 May 2005      as Director on 30 May 2006 and reappointed       as Director of Finance on 20 May 2010. He
and reappointed for the second period on      for the second period on 28 April 2011. He       began his banking career at PT Bank Negara
20 May 2010. Before joining BRI, he was       began his banking career at BRI since 1976       Indonesia (Persero) Tbk. in 1984 and has
the President Director of Bank Bukopin. He    and has held several managerial positions        held several managerial positions, including
commenced his banking career with Bank        including Head of Treasury Division, Head        Director of Small, Medium and Sharia
Duta in 1981 and joined Bank Bukopin in       of Strategic Planning Division, Head of          Business, Director of Corporate Business,
1986 where he held several managerial         Internal Audit, Head of Retail Loan Division,    Director of Consumer, as well as Head of
positions including Director of Commercial,   Deputy Head of Finance and Management            Personal Business Management Division.
Group Head of Line of Business and Branch     Accounting Division, Branch Manager of BRI
Manager in several big cities in Indonesia.   Palembang Sriwijaya, Guest Officer Sanwa         He earned his bachelor’s degree in Economic
                                              International Finance Ltd. Hong Kong,            from the Padjadjaran University, Bandung
He earned his diploma’s degree from STAK      Treasury Manager and Chief Dealer BRI            (1982) and Master of Business Management
Trisakti, Jakarta in 1980 and attended        Hong Kong Finance Ltd.                           from Asian Institute of Management, Makati,
several courses and training on banking                                                        the Philipines (1992), He attended several
both in domestic and overseas, including      He earned his bachelor’s degree from the         trainings, courses and seminar on banking
Executive	 Risk	 Management	 (Denpasar);	     University of Diponegoro (1975) and MBA          including Risk Management in Retail
Islamic Finance Forum (Swiss); Seminar        from Tulane University, New Orleans, USA         Banking-BSMR	(the	Netherlands);	Executive	
on Business Continuity Planning, Ernst &      (1987), and his Doctorate from Jakarta           Training for Director-The Wharton School
Young; SESPIBANK (Jakarta); Strategy          State University (UNJ). He attended              of University of Pennsylvania (USA); Bank
Development Session, IBM; and Structuring     several courses and trainings, including         Indonesia’s	 Executive	 Risk	 Management	
Loans & Short Term, The Institute Banking     Capital Market (Tokyo); Risk Management          Certification - BSMR Singapore; Retail
& Finance.                                    Certification-BSMR        (Singapore);    Risk   Banking Conference LAFERTY (Singapore);
                                              Management Certification of Competency           Asian Bankers Surveyor Program –Bank
                                              Assessor from BNSP, the National Defense         of New York (New York) and SESPIBANK
                                              College (Lemhanas) Republic of Indonesia;        (Jakarta). He also represented BRI on
                                              SESPIBANK (Jakarta); Credit Manager and          numerous road shows and investor’
                                              Organization Management. He represented          conferences in London, New York and
                                              BRI as a speaker for microfinance in Thailand    Singapore.
                                              and Chile (2009) and in several road shows
                                              as well as in investor’ conferences in London,
                                              Hong Kong and Singapore.




              34                ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                              FOREWORD
                                                                                                                                              COMPANY PROFILE
                                                                                                                                              MANAGEMENT DISCUSSION AND ANALYSIS
                                                                                                                                              CORPORATE GOVERNANCE
                                                                                                                                              CORPORATE SOCIAL RESPONSIBILITY
Sulaiman Arif Arianto                          A. Toni Soetirto                               Lenny Sugihat
Director of Commercial Business                Director of Consumer Business                  Director of Credit Risk Management

Indonesian citizen, 54 years old. Appointed    Indonesian citizen, 54 years old. Appointed    Indonesian citizen, 55 years old. Appointed
as Director of Commercial Business on          as Director of BRI in 2006, and reappointed    as Director of BRI in 2006, and reapointed
12 October 2009, and reappointed for the       for the second period on 28 April 2011.        for the second period on 28 April 2011.
second period on 28 April 2011. Previously,    He began his career in banking when he         She began her career in banking with
he had been Director of Micro, Small and       joined Bank Duta in 1983, then in 1985 he      BRI since 1981 and has held several
Medium Enterprises Business since 30 May       joined Bank Bukopin. Previously, he held       managerial positions, including Head of
2006. He began his career in BRI in 1983       several managerial positions, including        Loan Restructuring and Recovery Division,
and has held several managerial positions,     Director of Commercial Business, Director      Head of Agribusiness Division and Head of
including Head of Agribusiness Division,       of Risk Management and Compliance, and         Strategic Planning Division.
Head of General Business Division, Regional    Group Head Credit and Marketing Financial
Manager of BRI Denpasar and Jakarta.           Institutions.                                  She earned her bachelor’s degree in fishery




                                                                                                                                              SUBSIDIARIES
                                                                                              from the Bogor Agriculture University
He earned his bachelor’s degree in animal                                                     (1979) and MBA from the University of
husbandry from the Farming Faculty of          In 1981, he earned his bachelor’s degree       Houston, USA (1993). She attended several
the Bogor Agriculture University (IPB) and     in agribusiness from the Bogor Agriculture     courses and trainings, including Credit Risk
MBA from the University of New Orleans,        University (IPB). He attended several          Management BRI – Citibank; The Advanced
USA (1991). He represented BRI in several      trainings, courses and seminars on banking     Management Program for Overseas
                                                                                                                                              BUSINESS STRATEGY



organizations such as APRACA, UN advisor       including CRM and Intelligence Banking         Bankers (USA); Problem Loan and Loan
for Inclusive Financial System and Micro       EFMA (Barcelona); The Future Face of           Syndication Training (Sidney); SESPIBANK
Finance Network. He was also speaker in        Marketing (Australia); Self-Service Banking,   (Jakarta),    Strategic   Management       in
numerous international seminars on MSME,       EFMA (Barcelona); The Branch of the            Banking Programme (France); The World
including Asian Banking Forum (Jakarta)        Future, EFMA (Barcelona); Structured Trade     Bank Conference “The Role of State-
APEC SME Working Group (Bali). Financial       and	 Export	 Finance	 in	 Asia	 Conference,	   Owned Banks” (USA); Certification on Risk
Technology      Conference       (Singapore)   Euromoney, JP Morgan and Citigroup             Management - BSMR (Denpasar); World
Microfinance     Sustainability,    APRACA     (Singapore); The Strategic Board, Australian   Bank/IMF 2002 Annual Meeting (USA),
(Kunming), APO Forum, Micro Banking and        Institute of Company Director (Australia)      Office Management Program (Jakarta),
                                                                                                                                              FINANCIAL STATEMENTS




Risk Management Workshop (Beijing), Asia       Comparative Study for Trade Financing          33rd Asean Banking Council Meeting (Bali);
Pacific Regional Microcredit Summit (Bali).    and Risk Management - Deutsche Bank            Rethinking the East Asia Miracle (World Bank
He also represented BRI in road shows and      (Germany); and Certified Wealth Manager -      Jakarta); Bank Risk Management and Basel
investors’ conferences organized in USA,       Erasmus Huis Netherlands (Netherlands)         II Capital Requirements (Jakarta); Workshop
Hong Kong and Singapore.                                                                      on Competency Test - BNSP (Jakarta) as
                                                                                              Competency Assessor.
                                                                                                                                              OTHERS




                                    35
                         ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                         35
Asmawi Syam                                        Suprajarto                                        Djarot Kusumayakti
Director of Intitutional and SOe                   Director of Network and Services                  Director of Micro Small and Medium
Business                                                                                             enterprise Business
Indonesian citizen, 56 years old. Appointed        Indonesian citizen, 55 years old. Appointed       Indonesian citizen, 54 years old. Appointed
as Director of BRI on 5 September 2007.            as Director of BRI on 5 September 2007.           as Director of BRI on 20 May 2010. He
He began his banking career at BRI in 1980         He started his banking career at BRI in 1983      began his banking career at BRI in 1983
and has held several managerial positions,         and has held several managerial positions,        and has held several managerial positions,
including Head of General Business Division,       including Regional Manager of BRI Jakarta,        including President Commissioner of PT
Head of Consumer Banking Division and              Corporate Secretary, Deputy of Regional           BTMU BRI Finance, Head of Credit Risk
Regional Manager of BRI Bandung and                Manager of BRI Jakarta, and branch manager        Analysis Division, Deputy Regional Manager
Denpasar.                                          in several big cities throughout Indonesia.       of BRI Jakarta, Semarang and Padang.

He earned his bachelor’s degree in                                                                   He earned his bachelor’s degree in
Economics from Hasanuddin University,              He earned his bachelor’s degree in Economics      Corporate Economics from Indonesia
Makassar (1979) and master’s degree in             from Pembangunan Nasional University,             Islamic University, Yogyakarta (1982) and
Management from Padjadjaran University             Yogyakarta (1982) and master’s degree in          Master of Management from the Airlangga
Bandung (2003), He attended several                Management from Padjadjaran University            University, Surabaya (2000), He attended
trainings on banking, including From               Bandung (2001). He attended several trainings     several trainings and seminars on banking,
State Owned Enterprise to World Class              on banking, including Customer Relationship       including SESPIBANK-LPPI (Jakarta); Credit
Competitors, Creative Innovative and               Management (Paris); The Branch of the Future      Risk Management Training (Semarang);
State Owned Firms (Philippine); Card and           (Barcelona); The 5th Annual Asia Pacific Mobile   Senior Banker Development Course - Bank
Payment - European Financial Management            Payments (Bangkok); SESPIBANK (Jakarta);          of America (Jakarta); Certification on Risk
Marketing/EFMA (Paris); Restructuring and          Executive	Management	Development	Training	        Management in Banking (Jakarta), and
Performance Improvements of State Owned            (Jakarta); Seminar on Marketing, (Sydney);        Financial lecture - Bisnis Indonesia (Jakarta).
Enterprise (Jakarta); Strategic Leadership -       and Delivery Channel Strategy The Branch          He also represented BRI as speaker
Mastercard International (Bangkok), World          & Beyond (Kuala Lumpur) and Branch of             about Microfinance in The Key Success
Congress on IT Information (Australia),            the Future Revamping the Branch for the           on Sustainable Microfinance Program in
Asset and Liability Management, Credit             Technology Driven World (London).                 Microfinance Network (MFN) 17th meeting
Risk Management & International Banking                                                              Conference Riveria maya in Cancun
(Brussels) and SESPIBANK (Jakarta).                                                                  (Mexico),	and	also	as	speaker	on	The	Role	of	
                                                                                                     Microsaving on Sustainable Microfinancing
                                                                                                     in Global Microcredit Summit in Valladolid
                                                                                                     (Spain).




                        36                 ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                  FOREWORD
                                                                                                  COMPANY PROFILE
                                                                                                  MANAGEMENT DISCUSSION AND ANALYSIS
                                                                                                  CORPORATE GOVERNANCE
                                                                                                  CORPORATE SOCIAL RESPONSIBILITY
Randi Anto                                    Gatot Mardiwasisto
Director of Compliance                        Director

Indonesian citizen, 50 years old. Has been    Indonesian citizen, 59 years old. Has been
appointed as Director of BRI since 28 April   appointed as Director of BRI since 28
2011. He has held several managerial          September 2011. Previously held positions
positions at BRI, including Head of Human     as Director of Pharmaceuticals Commercial
Resources Division, Regional Manager of BRI   Business, Office of the Mininstry of SOE
Palembang, Head of Credit Administration      and BKPM; Director of Finance at PT Kliring
Division and Head of Compliance & Risk        Berjangka Indonesia (Persero); Deputy
Management Division.                          Assistant on Banking Business, Office of the
                                              Ministry of SOE; and Commissioner of PT
He earned bachelor’s degree in Economics      Bank Tabungan Negara (Persero) Tbk.
from Universitas Diponegoro (1984), and



                                                                                                  SUBSIDIARIES
Master of Business Administration from St.    He earned bachelor’s degree in Economic/
Louis University, USA (1994). He attended     Business Law from Universitas Indonesia,
various trainings and workshops on banking,   Jakarta (1985) and Magister Management
including     Pro Active Operational Risk     from Ecole Superieure Lyon, France (1989).
Management (Jakarta), Sespibank (Jakarta),    He attended various trainings and workshops,
                                                                                                  BUSINESS STRATEGY


Worldclass Leadership Monitoring Coaching     including Property Appraisal (Taiwan), Urban
(Jakarta), and Credit Appraisal for Small     Finance	and	Taxation	(Taiwan),	Management	
Medium Individu (Tokyo).                      of Finance by Institute International
                                              d’Administration Public (Paris), Strategic
                                              Planning (Jakarta), SOE Privatization and
                                              Corporate Governance Workshop (Jakarta),
                                              International Conference Bara Risk Forum
                                              2010	 (Bali),	 Executive	 Risk	 Management	
                                              Refresher Program (Paris), Seminar on
                                                                                                  FINANCIAL STATEMENTS




                                              Sharpening	Leadership	for	Senior	Executive	
                                              (Jakarta), and Global Islamic Finance Forum
                                              (Kuala Lumpur).
                                                                                                  OTHERS




                             37
                  ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                             37
BOARD Of DIReCTORS




   Standing, from left fo right:
   Randi Anto, Gatot Mardiwasisto, Suprajarto, Asmawi Syam, Achmad Baiquni, Djarot Kusumayakti




   38            ANNUAL REPORT 2011         PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                             FOREWORD
                                                                                             COMPANY PROFILE
                                                                                             MANAGEMENT DISCUSSION AND ANALYSIS
                                                                                             CORPORATE GOVERNANCE
                                                                                             CORPORATE SOCIAL RESPONSIBILITY
                                                                                             SUBSIDIARIES
                                                                                             BUSINESS STRATEGY
                                                                                             FINANCIAL STATEMENTS




Seated, from left to right:
A. Toni Soetirto, Sulaiman Arif Arianto, Sofyan Basir, Sarwono Sudarto, Lenny Sugihat
                                                                                             OTHERS




                  39
         ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                        39
STATeMeNT Of ReSPONSIBILITY
fOR fINANCIAL RePORTING




  Annual Report and the accompanying financial statements and related financial information are the responsibility of
  the Management of PT Bank Rakyat Indonesia (Persero) Tbk. and have been approved by members of the Board of
                                Commissioners whose signatures appear below.


                                                The undersigned




                                                  Bunasor Sanim

                                                President Commissioner/
                                              Independent Commissioner




        Agus Suprijanto                             Heru Lelono                          Hermanto Siregar
          Commissioner                             Commissioner                             Commissioner




             Aviliani                                                                     Adhyaksa Dault
    Independent Commissioner                                                          Independent Commissioner




      40                ANNUAL REPORT 2011       PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                              FOREWORD
                                                                                                                              COMPANY PROFILE
                                                                                                                              MANAGEMENT DISCUSSION AND ANALYSIS
 Annual Report and the accompanying financial statements and related financial information are the responsibility of the
                 Management of PT Bank Rakyat Indonesia (Persero) Tbk. and have been approved
                        by members of the Board of Directors whose signatures appear below.


                                                     The undersigned




                                                                                                                              CORPORATE GOVERNANCE
                                                         Sofyan Basir
                                                       President Director




                                                                                                                              CORPORATE SOCIAL RESPONSIBILITY
       Sarwono Sudarto                                 Achmad Baiquni                           Sulaiman Arif Arianto
      Director of Operations                           Director of Finance                  Director of Commercial Business




                                                                                                                              SUBSIDIARIES
         Lenny Sugihat                                  A.Toni Soetirto                            Asmawi Syam
                                                                                                                              BUSINESS STRATEGY



Director of Credit Risk Management               Director of Consumer Business                Director of Institutional and
                                                                                                    SOE Business
                                                                                                                              FINANCIAL STATEMENTS




           Suprajarto                                   Djarot Kusumayakti                                Randi Anto
     Director of Network and                         Director of Micro, Small and                   Director of Compliance
              Service                                Medium Enterprise Business
                                                                                                                              OTHERS




                                41
                        ANNUAL REPORT 2011         PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                             41
Company Profile




  42   ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                       As of year-




                                                                                       FOREWORD
                                       end 2011,
                                       approximately




                                                                                     COMPANY PROFILE
                                       72% BRI’s
                                       customers are




                                                                                     MANAGEMENT DISCUSSION AND ANALYSIS
                                       micro customers
                                       that are being
                                       served by the
                                       e-channel network
                                       of BRI and 7.975




                                                                                     CORPORATE GOVERNANCE
                                       operating units of
                                       BRI that are linked
                                       on a real-time




                                                                                     CORPORATE SOCIAL RESPONSIBILITY
                                       online basis.
                                       BRI continues to develop its e-channel
                                       network rapidly. This is aimed at
                                       extending its services access in the
                                       broadest sense, and increasing fee-based


                                                                                     SUBSIDIARIES
                                       income from the use of e-channel by the
                                       huge and growing customer base of BRI.
                                                                                     BUSINESS STRATEGY




                                     EDC                         Teras BRI
                                            31,590                           1,304
                                                                                     FINANCIAL STATEMENTS




                                   13,631                          617




                                    2010        2011               2010       2011
                                                                                     OTHERS




      43
ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                    43
ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                    43
COMPANY’S GeNeRAL INfORMATION




Name of Company:                                                       Shareholder’s Composition:
PT Bank Rakyat Indonesia (Persero) Tbk.                                Republic of Indonesia (56.75%)
establishment:                                                         Public (43.25%)
18 December 1968 based on Law No. 21 Year 1968                         Listing:
Address:                                                               Indonesia Stock Exchange
BRI I Building Jl. Jend Sudirman No. 44 – 46                           on 10 November 2003 with ticker name: BBRI
Jakarta 10210                                                          Contact:
Telephone:                                                             email:
(62-21) 2510244, 2510254, 2510264, 2510269,                            humas@bri.co.id
2510279                                                                Call center:
fax:                                                                   14017 / (62-21) 57987400
(62-21) 2500065, 2500077                                               Correspondence:
Website:                                                               Corporate Secretary Division
www.bri.co.id                                                          BRI I Building, 20th Floor
Type of Business:                                                      Jl. Jend. Sudirman Kav. 44-46
Banking                                                                Jakarta 10210




RATING

                                                 MOODY ‘S ( January 2012)
 -   Outlook                                                                  Stable
 -   Bank Deposit                                                             Baa3/P-3
 -   Bank Financial Strength                                                  D+
 -   Baseline Credit Asessment                                                (Ba1)
 -   Adjusted Baseline Credit Asessment                                       (Ba1)
                                                  FITCH (December 2011)
 -   Long Term Foreign Currency IDR                                           BBB-, Stable Outlook
 -   Short Term Foreign Currency IDR Long Term                                F3
 -   Support Rating Floor                                                     BBB-
 -   Support Rating                                                           2
 -   Viability Rating                                                         bb+
 -   Individual Rating                                                        C/D
 -   National Long-Term Rating                                                AAA (idn), Stable Outlook
 -   Rupiah Subordinated Debt                                                 AA (idn); RWN
                                                  PEFINDO (March 2011)
 -   National Rating                                                          id AAA, Stable Outlook




               44              ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                              FOREWORD
    BANKING PRODUCTS AND SeRVICeS




                                                                                                            COMPANY PROFILE
                      SAVING PRODUCTS                     Loan to Micro and Small Business - Government




                                                                                                            MANAGEMENT DISCUSSION AND ANALYSIS
                                     BritAma                Notes (KUMK-SP)
                                   Simpedes               Loan for the Development of Bio Fuels and
                                     GiroBRI                Revitalization of Plantations (KPEN-RP)
                                    DepoBRI               Loan for Economic Empowerment of Coastal (PEMP)
                                   Haj Saving
                                    BRI Junio             Medium/Corporate Loans
                                                          Working Capital Loan (KMK)
                        LOAN PRODUCTS                     Loan		for		Export	Working	Capital	(KMK-E)
                               Micro Loans                Investment Loan (KI)
                                   Kupedes                Import Working Capital Loan (KMK-I)
           People Business Loan (KUR) Micro               Construction Working Capital Loan (KMK-K)




                                                                                                            CORPORATE GOVERNANCE
                                                          Import Deferred-Guarantee Facility (PJI)
                   Small Commercial Loans                 Standby L/C (SBLC)
                         Working Capital Loan             Bank Guarantee (BG)
             Salary Based Loan (Briguna Loan)             Infrastructure Loan
                             Investment Loan              Syndicated Loan
                                 Express	Loan
                           Construction Loan              Banking Services




                                                                                                            CORPORATE SOCIAL RESPONSIBILITY
             PPTKI Loan (Loan for Indonesian-             BRI Priority Banking
                      Migrant Worker Agency)              Cash Management System
                               Franchise Loan             Salary Crediting
                     Warehouse Receipt Loan               Electronic Money (BRIZZI)
                           Petrol Station Loan
           BTS (Base Transceiver Station) Loan            Treasury Service
                         Bank Guarantee (BG)              Foreign	Exchange	Transaction
                                                          Swap Transaction
                            Consumer Loans                Forward Transaction



                                                                                                            SUBSIDIARIES
                           Housing Loan (KPR)             Trustee Service
                     Motor Vehicle Loan (KKB)             Securities Sales Agency
                    Multi-Purpose Loan (KMG)              Custodial Service
                                   Credit Card            Financial Institution Pension Funds (DPLK-BRI)
                                                                                                            BUSINESS STRATEGY




                             Program Loans                International Banking
             People Business Loan (KUR) Retail            Trade Finance
Loan to Members of Primary Cooperative (KPPA)             Remittance
      Loan for Food and Energy Security (KKPE)            Domestic Letter of Credit (SKBDN)
         Loan to Small Business Group (KKUK)
                                                                                                            FINANCIAL STATEMENTS
                                                                                                            OTHERS




                     45
             ANNUAL REPORT 2011        PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                              45
            ORGANIZATIONAL STRUCTURe



            PT BANK RAKYAT INDONeSIA ( PeRSeRO ) Tbk.




Director of Micro Small    Director of Consumer    Director of Commercial    Director of Institutional    Director of Network            Director of
and Medium enterprise            Business                 Business               & SOe Business               and Services                finance
   (MSMe) Business            A.Toni Soetirto           Sulaiman A.               Asmawi Syam                  Suprajarto             Achmad Baiquni
        Djarot                                            Arianto
     Kusumayakti



Head of Micro Business    Head of fund & Service     Head of General           Head of Institution       Head of Retail Business      Head of Treasury
       Division                  Division            Business Division         Relations Division           Network Division             Division
     Windiartono            Widodo Januarso           Zainuddin Mappa          I. Komang Sudiarsa           R. Sophia Alizsa           Budi Purwanto




  Head of Retail &         Head of Credit Card      Head of Agribusiness     Head of SOe Business        Head of Micro Business     Head of finance and
  Medium Business               Division                  Division                  Division                Network Division       Management Accounting
      Division               Mohamad Helmi               Kuswiyoto             Dwi Agus Pramudya            Johanes Saragih              Division
 Denny Arsamanggala                                                                                                                     Irwan Rinaldi



  Head of Program           Head of Consumer                                         Desk                   Head of Service         Head of International
  Business Division          Loans Division                                    Cash Management                 Division              Business Division
    Teten Djaka T.             Joice Farida                                         Wisnu H.             Luki Presisa Budi Utami        Isnen Sutopo
                                 Rosandi



                            Head of Marketing
                             Communication
                                Division
                                A. Firman
                                 Taufick



                                 Regional                                                                                                 Overseas
                                  Offices                                                                                                  Offices



                                  Branch
                                  Offices
                                                                                                                                        Subsidiaries




      Sub Branch
        Offices
                                   Cash                         BRI
                                  Outlets                      Units




                                                              Teras
                                                               BRI




                          46                  ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                                   FOREWORD
                                                                                                                                                 COMPANY PROFILE
                AGMS




                                                                                                                                                 MANAGEMENT DISCUSSION AND ANALYSIS
                                                                     Board of Commissioners

             BOARD Of DIReCTORS

    PReSIDeNT DIReCTOR
              Sofyan Basir




  Director of Credit Risk         Director of Operation




                                                                                                                                                 CORPORATE GOVERNANCE
                                                                 Director of Compliance                 Director
      Management                    Sarwono Sudarto                    Randi Anto                  Gatot Mardiwasisto*
       Lenny Sugihat




  Head of Credit Risk             Head of Operational             Head of Compliance                                         Head of Internal
   Analysis Division                Center Division                    Division                                                  Audit
    Susy Liestiowaty                    Triyana                      M. Jarot Eko W.
                                                                                                                                Ali Mudin




                                                                                                                                                 CORPORATE SOCIAL RESPONSIBILITY
     Head of Loans               Head of Information                  Head of Legal                                        Corporate Secretary
Restructuring & Recovery         System & Technology                    Division
                                                                                                                              Muhamad Ali
        Division                       Division                       Hadi Susanto
      Mardiwibawa                    Zulhelfi Abidin


    Head of Credit             Head of Logistic & fixed              Head of Risk                                            Head of Human
 Administration Division        Assets Management                 Management Division                                     Resources Management
     Endra Sasmito                     Division                        Rico Rizal                                                Division
      Soengkowo                      Slamet Riyadi                     Budidarmo                                                Ganefi **


                                 Head of education &              Head of Strategic




                                                                                                                                                 SUBSIDIARIES
                                  Training Division              Planning & Business
                                        Nugroho                  Development Division
                                                                  Hexana	Tri	Sasongko                            HeAD
                                                                                                                OffICe
                                                                                                                                                 BUSINESS STRATEGY


                                    Special Branch                                                                            Regional Audit
                                                                                                                                 Offices
                                       Offices




                                                                                            Supervision Line/ Mentoring
                                                                                            Coordination Line
                                                                                                                                                 FINANCIAL STATEMENTS




      Committees under BOC: Audit Committee, Nomination & Remuneration Committee, Risk Management Supervisory Committee
      Committees under BOD: Risk Management Committee, Credit Policy Committee, Credit Committee, ALCO, Human Resources Policy Committee

     * As of 27 January 2012 effective as Director of BRI after approval from Bank Indonesia on fit and proper test
     ** Interim Officer
                                                                                                                                                 OTHERS




                                   47
                           ANNUAL REPORT 2011               PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                             47
SeNIOR eXeCUTIVeS


Inspector


     Hidzuldin elfani                                          Wisto Prihadi
 Inspector of Head Office                                   Inspector of Medan




                                 Khairi Setiawan                                        Rusli Witjahjono
                              Inspector of Pekanbaru                                 Inspector of Palembang




    Hartono Sukiman                                             Sulistianto
  Inspector of Jakarta 1                                   Inspector of Jakarta 2




                                  Retno Surdini                                        Ircham Sjafindra R
                               Inspector of Jakarta 3                                 Inspector of Bandung




       Umi Haryati                                            eka Sriyantini
  Inspector of Semarang                                   Inspector of Yogyakarta




                                   Mudjiharno                                           Kuwat Waluyo
                               Inspector of Surabaya                                  Inspector of Malang




        Suindiyo                                                Budi Satria
  Inspector of Denpasar                                   Inspector of Banjarmasin




                                 Yan Budiatmoko                                            Sutardjo
                               Inspector of Makassar                                  Inspector of Manado




            48              ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                        FOREWORD
                                                                                                      COMPANY PROFILE
Regional Manager




                                                                                                      MANAGEMENT DISCUSSION AND ANALYSIS
       Abing Rabani                                 Donsuwan Simatupang
     Regional Manager of                              Regional Manager of
        Banda Aceh                                          Medan



                             Achmad Chumaidi                                   I Made Suprateka Y
                             Regional Manager of                                Regional Manager of
                                   Padang                                           Pekanbaru



         Pardiman                                       Mohammad Irfan




                                                                                                      CORPORATE GOVERNANCE
     Regional Manager of                               Regional Manager of
         Palembang                                          Jakarta 1



                             Albert Radjagukguk                                    Siswanto*
                             Regional Manager of                               Regional Manager of
                                   Jakarta 2                                        Jakarta 3




                                                                                                      CORPORATE SOCIAL RESPONSIBILITY
    Moch. Hadi Santoso                                  Agus Katon eS
    Regional Manager of                                Regional Manager of
         Bandung                                            Semarang



                           eko Wahyu Andriastono                                 Heru Sukanto
                             Regional Manager of                               Regional Manager of
                                 Yogyakarta                                         Surabaya




                                                                                                      SUBSIDIARIES
  Achmad Chairul Ganie                                       Irianto
   Regional Manager of                                 Regional Manager of
         Malang                                             Denpasar                                  BUSINESS STRATEGY




                              Zainuddin Latif                                   Adhy Kusnandar
                             Regional Manager of                               Regional Manager of
                                 Banjarmasin                                        Makassar
                                                                                                      FINANCIAL STATEMENTS




        Tri Wintarto                                   Agoes Roediyanto
     Regional Manager of                               Regional Manager of
          Manado                                            Jayapura


* Interim Officer
                                                                                                      OTHERS




                    49
            ANNUAL REPORT 2011     PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                      49
NeTWORKS




 Banda Aceh



              Medan




                               Pekanbaru




       Padang




                                             Palembang

                                                                                        Banjarmasin

                                               Jakarta 1, 2 & 3
                                                              Semarang
                                                                             Surabaya

                                                                                        Denpasar
                                           Bandung
                                                     Yogyakarta
                                                                         Malang




     50               ANNUAL REPORT 2011       PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                           FOREWORD
                                                                                                                         COMPANY PROFILE
                                                                                                                         MANAGEMENT DISCUSSION AND ANALYSIS
                                    Manado




                                                                                                              Jayapura




                                                                                                                         CORPORATE GOVERNANCE
               Makassar




                                                                                                                         CORPORATE SOCIAL RESPONSIBILITY
                                         2007                       2008        2009             2010         2011
Total Working Unit*                      4,968                      5,070       5,457            6,480        7,989




                                                                                                                         SUBSIDIARIES
Head Office                                1                         1           1                1            1
Regional Offices                          14                         14          17               18           18
Regional Audit Offices                    12                         12          14               14           14
Branch Offices**                          344                       376         406              413          431
                                                                                                                         BUSINESS STRATEGY



Sub-branch Offices                        230                       337         434              470          502
Cash Outlets                              24                        179         728              822          870
BRI Units                               4,300                       4,417       4,538            4,649        4,849
Village Service Points                    100                        76          68               0            0
Teras BRI                                  0                         0          217              617          1,304
* Including 14 Regional Audit Offices
                                                                                                                         FINANCIAL STATEMENTS




** Including one Special Branch Office and three Overseas Offices
                                                                                                                         OTHERS




                               51
                   ANNUAL REPORT 2011                     PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                         51
BRI NeTWORKS




            Regional Office,                                   Branch Office,
   one of 18 Regional Offices located                   one of 431 Branch Offices
        at Capital of Provinces                             located at big cities
         throughout Indonesia                             throughout Indonesia




          Sub Branch Office                            Priority Service Center in Jakarta,
          at Grand Indonesia,                          one of 13 Priority Service Centers
     one of 502 sub branch offices                      and 42 Priority Lounges located
         throughout Indonesia                                 throughout Indonesia




   52               ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                          FOREWORD
                                                                                                        COMPANY PROFILE
                                                                                                        MANAGEMENT DISCUSSION AND ANALYSIS
                                                                                                        CORPORATE GOVERNANCE
        BRI Unit in Denpasar, Bali,                                   Teras BRI in Mandalika,
one of 4,849 BRI Units located at big, small                  one of 1,304 outlets providing services
 cities, and villages throughout Indonesia                      to customers in traditional markets
                                                                       throughout Indonesia




                                                                                                        CORPORATE SOCIAL RESPONSIBILITY
                                                                                                        SUBSIDIARIES
                                                                                                        BUSINESS STRATEGY
                                                                                                        FINANCIAL STATEMENTS




      Customer Service personnel                               One of ATM Centers located at BRI
         inside a Teras Keliling                               Head Office. Currently, BRI operates
                                                                         7,292 ATM units
                                                                                                        OTHERS




           53
 ANNUAL REPORT 2011                PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                            53
HUMAN ReSOURCeS

Status                                     2009                  2010                 2011
Permanent Employee                        33,935                33,296              33,357
Employee in Retirement Preparation         1,145                   996                 944
Contract Employee                          1,452                 2,441               4,780
Trainee                                     466                    911                 963
Total Number of BRI Employee              36,998                37,644              40,044


Position                                    2009                  2010                2011
Executive Vice President                        56                  70                  67
Vice President                                  93                 101                 103
Assistant Vice President                    338                    382                 380
Senior Manager                              598                    575                 584
Manager                                     517                    554                 582
Assistant Manager                          3,229                 3,318               2,925
Officer                                    9,916                10,510              10,662
Assistant                                 22,251                22,134              24,741
Total Number of BRI Employee              36,998                37,644              40,044




education                                   2009                  2010                2011
Post Graduate (S3)                               5                   2                   5
Graduate (S2)                               943                  1,107               1,034
Under Graduate (S1)                       22,458                23,691              26,780
Diploma                                    3,867                 4,053               4,847
Senior High School                         9,681                 8,749               7,334
Junior High School                              44                  42                  44
Total Number of BRI Employee              36,998                37,644              40,044




            54             ANNUAL REPORT 2011        PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                                FOREWORD
INfORMATION TO SHAReHOLDeRS




                                                                                                                                              COMPANY PROFILE
                                                                                                                                              MANAGEMENT DISCUSSION AND ANALYSIS
Amidst the weakening of world economy, the                                During 2011, the price of BRI shares reached its
Indonesia’s Composite Stock Price Index (IHSG)                            peak at Rp7,250 on 2 August 2011 and bottom out
performed positively throughout 2011. As of year-                         at Rp4,550 on 10 February 2011. Capitalization of
end 2011, the Indonesia’s Composite Stock Price                           BRI shares by the end of trading day of the year
Index closed at the level of 3,821.99, increased by                       2011 was Rp164.85 trillion or increased by 27%
3.2% compared to the position of 3,703.51 at year-                        compared to Rp129.57 trillion at year-end 2010.
end 2010. Market capitalization of the Indonesia
Stock Exchange (IDX) reached Rp3,537.29 trillion,                         Dividend Payment
increased by 9% compared to Rp3,243.77 trillion in                        The 2011 Annual General Meeting of Shareholders
2010.                                                                     (AGMS) of BRI has approved the final dividend




                                                                                                                                              CORPORATE GOVERNANCE
                                                                          payment for financial year 2010 in the amount of
BRI’s share price itself performed well above the                         Rp2,294,476,900,203.00 or 20% from BRI’s net profit
performance of Indonesian market. At the closing of                       for the year. The ratio of the final dividend payment
2011 trading day, BRI’s share price reached Rp6,750                       for financial year 2010 decrease by 10% compared
or increased by 29% compared to the share price at                        to the ratio of dividend payment for financial year
end of year 2010.                                                         2009 which was set by the 2010 AGMS at 30%.




                                                                                                                                              CORPORATE SOCIAL RESPONSIBILITY
To broaden the basis of BRI shareholders and to
signal a growing trend of BRI business, and in
accordance with the decree of Extraordinary General
Meeting of Shareholders 2010, BRI has exercised a
share stock split, from Rp500 per share to Rp250
per share, or with a ratio of one to two on 11 January
2011.




                             Net Profit              Dividend         Dividend per Share      Dividend Payment



                                                                                                                                              SUBSIDIARIES
  Year of Dividend                                                                                                     Payment Date
                            (Rp Billion)            (Rp Billion)          Share (Rp)*              Ratio (%)
        2003**                 2,579                   990                   42.10                  75.01                23 July 2004
        2004                   3,633                  1,816                  76.47                  50.00                 5 July 2005
        2005                   3,808                  1,904                  78.09                  50.00                10 July 2006
                                                                                                                                              BUSINESS STRATEGY



        2006                   4,257                  2,129                  86.52                  50.00                 2 July 2007
        2007                   4,838                  2,419                  98.17                  50.00                 7 July 2008
        2008                   5,958                  2,085                  84.41                  35.00                 3 July 2009
        2009                   7,308                  2,192                  88.91                  30.00                 1 July 2010
        2010***               11,472                  2,294                  93.01                  20.00               15 June 2011
                                                                                                                                              FINANCIAL STATEMENTS




* Dividend of each share is dividend after 1:2 stock split.
** From net profit of second half-year (1 July 2003 - 31 December 2003) in the amount of Rp1.32 trillion, net profit of first half-year was
    recapitalized.
*** On 30 December 2010, BRI paid interim dividend for financial year 2010 in the amount of Rp566,527,305,330.00 or Rp45.93 per share
    (before stock split)
                                                                                                                                              OTHERS




                      55
            ANNUAL REPORT 2011                 PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                      55
BRI 2011 AGMS                                                      which had been approved by the Board of
BRI held the 2011 AGMS on 28 April 2011 and the                    Commissioners. The interim dividend has
followings are the resolutions reached by the AGMS:                been paid to shareholders whose name were
                                                                   on the List of the Company’s Shareholders
First Agenda                                                       on 22 December 2010. The remaining sum,
To approve the Company’s 2010 Annual Report and                    amounted to Rp1,727,949,594,873.00 or
to accept the Board of Commissioners Supervisory                   Rp70.04 per share will be distributed as cash
Report and Financial Statements of the Company                     dividend and will be paid on 15 June 2011 to
for the financial year 2010 which had been audited                 shareholders whose name were on the List of
by the Office of the Registered Public Accountants                 the Company’s Shareholders on 1 June 2011.
Purwantono, Suherman, and Surja, as per Report                  b. A sum of 2.5% or Rp286,809,612,525.00
No. RPC-754/PSS/2011 dated 29 March 2011; as                       was set for Appropriated Reserve to support
well as to grant full release and discharge (volledig              investment of the Company.
acquit et de charge) to all members of the Board
of Directors and Board of Commissioners from the              2. To grant authority to holder of 1 share of Series
management actions undertook during the financial                A Dwiwarna to determine the amount of the
year which ended on 31 December 2010, to the                     Company’s net profit of financial year 2010 which
extent that such actions do not constitute criminal              shall be allocated for Partnership Program and
offenses and that such actions are reflected in the              Community Development Program.
Company’s 2010 Annual Report.
                                                                According to the Regulation of the Ministry
Second Agenda                                                   of State-Owned Enterprise No. PER-05/
To ratify the Annual Report of Partnership Program              MBU/2007, the maximum amount to be
and Community Development Program for the                       allocated for the Partnership Program and
year 2010, including the Financial Report which                 Community Development Program is 4% or
had been audited by the Office of the Registered                Rp458,895,380,040.00, thus the balance of the
Public Accountants Herman Dody Tanumihardja &                   Company’s 2010 net profit after deduction of
Partners, as per Report No. 14/GA/HDT-DT/PKBL-                  final dividend financial year 2010, appropriated
BRI/III/2011 dated 30 March 2011; as well as to                 reserve, as well as funds for Partnership Program
grant full release and discharge (volledig acquit et de         and Community Development Program, should be
charge) to all members of the Board of Directors and            added to the Company’s retained earnings so that
Board of Commissioners from the management and                  the amount reached 73.5% of the total net profit
supervisory actions of the partnership programs and             of financial year 2010 or Rp8,432,202,608,245.40.
community development programs undertook during
the financial year which ended on 31 December 2010,           3. To grant authority and power to the Board of
to the extent that such actions do not constitute                Directors to determine the schedule and final
criminal offenses and that such actions are reflected            dividend for financial year 2010 according to the
in the Company’s 2010 Partnership Program and                    prevailing regulations.
Community Development Annual Report.
                                                              Fourth Agenda:
Third Agenda                                                  To grant authority and power to the Board of
1. Approve the use of the net profit of the Company           Commissioners after prior approval from the Holder
   for the financial year 2010, as follows:                   of 1 share of Series A Dwiwarna to determine the
   a. A sum of 20% or Rp2,294,476,900,203.00                  amount of tantiem for members of the Board of
      are set as the final dividend for financial             Directors and Board of Commissioners for financial
      year 2010. Part of that sum, amounted to                year 2010 and to determine the amount of salary for
      Rp566,527,305,330.00 has been paid on                   members of the Board of Directors and the Board of
      30 December 2010 as interim dividend as                 Commissioners for financial year 2011.
      stipulated in the Decision of the Board of
      Directors’ Meeting on 29 November 2010




            56              ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                    FOREWORD
Fifth Agenda                                                members of the Board of Commissioners and




                                                                                                                  COMPANY PROFILE
1. To grant authority and power to the Board of             the Board of Directors are until the closing of the
    Commissioners to appoint Public Accounting              Annual General Meeting of Shareholders of the
    firm to audit the Company’s Financial Report for        5th (fifth) since their appointment.
    financial year 2011 and to determine the fee and     3. Appoint       Soedarjono     as   Vice   President
    other requirements in accordance with prevailing        Commissioner and Independent Commissioner.
    regulations.




                                                                                                                  MANAGEMENT DISCUSSION AND ANALYSIS
2. To grant authority and power to the Board of          4. The composition of the Board of Commissioners
    Commissioners to appoint Public Accounting              and the Board of Directors of the Company is as
    firm to audit the Financial Report of Partnership       follows:
    Program and Community Development Program
    for Financial Year 2011 and to determine the            Board of Commissioners:
    fee and other requirements in accordance with           President Commissioners/        : Bunasor Sanim
    prevailing regulations.                                 Independent Commissioners
                                                            Vice President Commissioners/   : Soedarjono
Sixth Agenda                                                Independent Commissioners
1. Approval for acquisition of all shares of BRIngin        Commissioner                    : Agus Suprijanto
   Remittance Co. Ltd. from PT. AJ. BRIngin Jiwa            Commissioner                    : Heru Lelono
   Sejahtera according to prevailing laws and




                                                                                                                  CORPORATE GOVERNANCE
                                                            Commissioner                    : Hermanto Siregar
   regulations.                                             Independent Commissioners       : Aviliani
2. Granting power and authority with substitution           Independent Commissioners       : Adhyaksa Dault
   right to the Board of Directors to execute the
   acquisition of the above mentioned shares and            Board of Directors:
   to take any actions regarding this resolution in         President Director        : Sofyan Basir
   accordance to prevailing laws and regulations.           Director                  : Sarwono Sudarto
                                                            Director                  : Sulaiman Arif Arianto




                                                                                                                  CORPORATE SOCIAL RESPONSIBILITY
Seventh Agenda                                              Director                  : Achmad Baiquni
1. Discharge with honour all members of the Board of        Director                  : Lenny Sugihat
   Commissioners and the Board of Directors which           Director                  : A. Toni Soetirto
   expired their term of service commencing from            Director                  : Asmawi Syam
   the closing date of this Meeting and to express          Director                  : Suprajarto
   gratitude for their contributions and services.          Director                  : Djarot Kusumayakti
                                                            Director                  : Randi Anto
2. Approve the appointment of:
   - Bunasor Sanim as President Commissioner/            5. Grant power and authority with substitution
     Independent Commissioner                               right to the Board of Directors to take all actions
   - Hermanto Siregar as Commissioner                       necessary relating to the above mentioned


                                                                                                                  SUBSIDIARIES
   - Sarwono Sudarto as Director                            decision in accordance with the prevailing
   - Sulaiman Arif Arianto as Director                      laws and regulations, including to register the
   - Lenny Sugihat as Director                              composition of the Board of Commissioners and
   - A. Toni Soetirto as Director                           the Board of Directors.
                                                                                                                  BUSINESS STRATEGY



   - Randi Anto as Director
                                                         BRI 2011 eGMS
   The appointment of the members of the Board of        On 28 September 2011, BRI held Extraordinary
   Commissioners and the Board of Directors shall        General Meeting of Shareholders 2011 and decided
   be effectively valid commencing from the closing      on the following:
   date of the Meeting, except for the appointment       1. Grant approval of resignation of Soedarjono from
   of Hermanto Siregar and Randi Anto which
                                                                                                                  FINANCIAL STATEMENTS




                                                            the position as Vice President Commissioner and
   will be effectively valid pending approval from          Independent Commissioner, effective from the
   Bank Indonesia on their fit and proper test and          closing date of the Meeting and express gratitude
   compliance to the prevailing laws and regulations.       for his contribution and service during his tenure.
   The expiry term of service of all appointed
                                                                                                                  OTHERS




                  57
          ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                             57
   Such as acquit et de charge for the period from              Directors :
   1 January 2011 to the date of Meeting will be                President Director        : Sofyan Basir
   released by the AGMS of financial year 2011                  Director                  : Sarwono Sudarto
   which will be held on 2012.                                  Director                  : Achmad Baiquni
                                                                Director                  : Sulaiman Arif Arianto
2. Appointment of Gatot Mardiwasisto as Director                Director                  : A. Toni Soetirto
   of the Company. The appointment of Gatot                     Director                  : Lenny Sugihat
   Mardiwasisto will be effective pending approval              Director                  : Asmawi Syam
   from Bank Indonesia on his fit and proper test and           Director                  : Suprajarto
   compliance to the prevailing laws and regulations,           Director                  : Djarot Kusumayakti
   with expiry term of service until the closing of the         Director                  : Randi Anto
   Annual General Meeting of Shareholders of the                Director                  : Gatot Mardiwasisto
   5th (fifth) since his appointment.
                                                             3. Grant power and authority with substitution
   The composition of the Board of Commissioner at              right to the Board of Directors to take all actions
   the closing of the Meeting were as follows:                  necessary relating to the above mentioned
                                                                decision in accordance with the prevailing
   Board of Commissioners       :                               laws and regulations, including to register the
   President Commissioners/     : Bunasor Sanim                 composition of the Board of Commissioners and
   Independent Commissioners                                    the Board of Directors.
   Commissioner                 : Agus Suprijanto
   Commissioner                 : Heru Lelono                Issuance of Rupiah Subordinated Debt
   Commissioner                 : Hermanto Siregar           In December 2009 BRI issued Rupiah Subordinated
   Independent Commissioners    : Aviliani                   Debt II with 5-year term, 10.95% of interest rate
   Independent Commissioners    : Adhyaksa Dault             and listed on the Indonesia Stock Exchange on 22
                                                             December 2009. Fitch rated this subordinated debt
   The composition of the Board of Directors effective       as AA (Double A; Stable Outlook) in which BRI
   from the appointment of Gatot Mardiwasisto as             successfully obtained Rp2 trillion proceed from the
   Director of the Company after the approval of             issuance.
   Bank Indonesia on his fit and proper test, will be
   as follows:                                               After deducted by issuance cost, the Company
                                                             would utilize all of the proceed as supplementary
                                                             capital in accordance with Bank Indonesia regulation,
                                                             and would be used to support for loan expansion in
                                                             accordance with the prudential principals. During
                                                             2011, BRI did not issue obligation or other debt
                                                             securities.




            58              ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                    FOREWORD
                                                                                                                  COMPANY PROFILE
                                                                     Rupiah Subordinated
                    Obligation Type
                                                                  Debt II with fixed interest rate
                      Interest Rate                                             10.95%
                         Period                                                  5 Year
                          Due                                              22 December 2014




                                                                                                                  MANAGEMENT DISCUSSION AND ANALYSIS
            Rating (Fitch Ratings Indonesia)                                AA (Fitch rating)
                     Issuance Value                                            Rp2 trillion
                   Coupon Payment                                               Quarterly
                        Listed on                                     Indonesian Stock Exchange



Chronology of Share Listing                               Subsequently, options on over subscription
Shares Issued by BRI are 1 share of Series A              amounting to 381,176,000 Series B Shares, over
Dwiwarna and the Series B share. Bank BRI only            allotment amounting to 571,761,000 series B
issues 1 share of Series A Dwiwarna owned by              share, both belonging to the Republic of Indonesia




                                                                                                                  CORPORATE GOVERNANCE
Republic of Indonesia, which is not transferable to       (divestments) each at the stock price of the
any other party.                                          Rp875,000 per share had been exercised on 10
The special rights granted to the holder of share of      November 2003 and 3 December 2003, respectively.
Series A Dwiwarna are:
1. Nominate members of the Board of Directors and/        MANAGEMENT STOCK OPTION PLAN
   or members of the Board Commissioners;
2. Approve the appointment and termination of             Based on the decree of the Extraordinary General
   members of the Board of Directors and/or               Meeting of Shareholders on 3 October 2003, the




                                                                                                                  CORPORATE SOCIAL RESPONSIBILITY
   members of the Board Commissioners;                    Company decided to perform a Management Stock
3. Approve to the Articles of Association, including      Option Plan (MSOP). In this program, the number of
   changes in capital;                                    stocks issued were 588,235,250.
4. Approve in consolidation, merger, acquisition and
   spin off of the Company, bankruptcy filling, and       MSOP was executed in three phases, MSOP I,
   the liquidation of the Company, and/or ;               MSOP II and MSOP III. The execution of MSOP I and
5. Request report and explanation on certain issues       II were based on previous Regulation of the Capital
   from the Board of Directors and the Board of           Market Supervisory Board regulation, while MSOP II
   Commissioners in accordance with prevailing            was based on the Regulation on the Capital Market
   rules and regulation, especially those of the          Supervisory Board No. IX.D.4 and Regulation of the



                                                                                                                  SUBSIDIARIES
   Capital Market.                                        Indonesian Stock Exchange No. Kep-305/BEJ/07-
                                                          2004 on Securities Listing Procedure. The vesting
By virtue of the Chairman of the Capital Market           periods for all MSOPs were up to one year after
Supervisory Agency No. S-2646/PM/2003) date 31            commencement date. The exercised MSOP shares
October 2003. The statement of Registration by BRI
                                                                                                                  BUSINESS STRATEGY


                                                          up to the expiry date of all MSOP phases amounted
in the event of its Initial Public Offering of Shares     to 569,876,000 shares. The exercises periods of
became effective 2,047,060,000 of Share B Shares,         MSOP I and II ended respectively on 9 November
which represent the divested share of Republic of         2008 and November 2009. As at the end of each
Indonesia and as many as 1,764,705,000 Shares             exercise period, total of 4.3 million shares for MSOP
B issued from the portfolio with nominal value            I and 6.1 million share for MSOP II had not been
Rp500.00. The Shares began to be traded on 10             exercised.
                                                                                                                  FINANCIAL STATEMENTS




November 2003, and were listed on the Jakarta
Stock Exchange.
                                                                                                                  OTHERS




                  59
          ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                59
                                                                                                    Accumulated
                    Number                          Date of
   Phase of                                                        expiry Date      exercise          Number
                    of MSOP        Composition       MSOP
    MSOP                                                            of MSOP          Price           of Shares
                    (Shares)                       Issuance
                                                                                                     exercised
 Phase I           235,294,100        40%        10 Nov 2003      9 Nov 2008     Rp962.50           230,999,000
 Phase II          235,294,100        40%        10 Nov 2004      9 Nov 2009     Rp1,750.00         230,047,000
 Phase III         117,647,050        20%        10 Nov 2005      9 Nov 2010     Pursuant to        108,830,000
                                                                                 Bapepam-LK
                                                                                 and BEI
 Total             588,235,250                                                                      569,876,000




The exercise period of MSOP III which began on 10 November 2005 ended on 9 November 2010. The numbers
of MSOP III shares allocated were 117,647,050, whereas until the expiry date, the numbers of MSOP shares
exercised were 108,830,000. The exercise of the shares add equity to the Company of Rp633,164,224,500.

As the exercise period of MSOP III ended, it also ended the entire exercise periods of BRI MSOP I-III which began
at the same time with the IPO of BRI on 10 November 2003. The total numbers of shares allocated on MSOP
Period of all MSOP ended, the total numbers of shares exercised were 569,876,000. The exercise of the shares
had caused an additional equity to the Company amounted to Rp1,366,089,110,750.


                                                                                                   (in million Rupiah)

                         Phase I               Phase II              Phase III                   Total
Paid-in Capital          115,500               115,024                 54,415                  284,938
Agio                     106,837               287,559                474,490                  868,886
Other Capital             27,117                 80,889                10,259                  212,265
(shares x option
value)
Total                    249,454               483,471                633,164               1,366,089




             60            ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                           FOREWORD
Share Ownership




                                                                                                                         COMPANY PROFILE
The number of BRI shareholders by the end of 2011 were 12,005 holders or had increased compare to those in
2010 of 11,697 holders. The Government is still the major shareholder of BRI with 56.75% shares while the public
investor had the remaining 43.25%. From the total shares issued, there was no public investor who had more then
5% of share ownership.




                                                                                                                         MANAGEMENT DISCUSSION AND ANALYSIS
Shareholder Composition of BRI

                                    Number of
         Category                                                      Number of Shares              Composition
                                   Shareholders
     Shareholders               2010             2011                2010             2011*        2010        2011
 Government                              1               1        7,000,000,000   14,000,000,000   56.75%      56.75%
 Public                           11,696          12,004          5,334,581,000   10,669,162,000   43.25%      43.25%
 Domestic Investor                10,544          10,390           794,306,225     1,714,454,105    6.44%       6.95%
     Individual                     6,527           6,566          103,806,300      154,926,542     0.84%       0.63%
     Employee                       3,616           3,415           56,784,500      103,246,500     0.46%       0.42%
     Regional




                                                                                                                         CORPORATE GOVERNANCE
                                         1               1             159,000          318,000     0.00%       0.00%
     Government
     Institution                      400             408          633,556,425     1,455,963,063    5.14%       5.90%
 Foreign Investor                   1,152           1,614         4,540,274,775    8,954,707,895   36.81%      36.30%
     Individual                        24               38             240,000          564,500     0.00%       0.00%
     Foreign
                                    1,128           1,576         4,540,034,775    8,954,143,395   36.81%      36.30%
     Institution
 Total                            11,697          12,005      12,334,581,000      24,669,162,000   100.00%     100.00%




                                                                                                                         CORPORATE SOCIAL RESPONSIBILITY
* Stock split was exercised on 11 January 2012 with ratio 1 : 2




                                                                                                                         SUBSIDIARIES
                                                                                                                         BUSINESS STRATEGY
                                                                                                                         FINANCIAL STATEMENTS
                                                                                                                         OTHERS




                      61
            ANNUAL REPORT 2011                PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                          61
       SUBSIDIARIeS




                                                             Percentage
                             Type of         Date of           of BRI         Start of
   Company Name                                                                                        Address
                            Business       Investment        Ownership       Operation
                                                                 (%)
                         Sharia
                                                                             16 October      Jl. Abdul Muis No. 2-4,
PT Bank BRISyariah       Commercial     19 December 2007       99.99%
                                                                                2008         Jakarta
                         Bank
                                                                                             Plaza GRI
                         Commercial
PT Bank Agroniaga Tbk.                    3 March 2011         79.78%      8 February 1990   Jl. HR. Rasuna Said Blok X2
                         Bank
                                                                                             No.1, Jakarta
                                                                                             Room 1115, 11/F, Lippo
BRIngin Remittance Co.   Remittance                                                          Center, Tower II, 89
                                        16 December 2011        100%         7 April 2005
Ltd.                     Company                                                             Queensway, Admiralty,
                                                                                             Hong Kong



                  62           ANNUAL REPORT 2011        PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                               FOREWORD
PUBLIC ACCOUNTING fIRM AND CAPITAL




                                                                                             COMPANY PROFILE
MARKeT SUPPORTING INSTITUTIONS




                                                                                             MANAGEMENT DISCUSSION AND ANALYSIS
              PUBLIC ACCOUNTING fIRM               RATING AGeNCIeS
           Purwantono, Suherman, & Surja           PT Pemeringkat efek Indonesia (Pefindo)
                             (ernst & Young)       Panin Tower Senayan City 17th Floor
        Indonesian Stock Exchange Building         Jl. Asia Afrika Kav. 19
                             Tower 2, 7th Floor    Jakarta
              Jl. Jend. Sudirman Kav. 52-53
                               Jakarta 12190       PT fitch Rating Indonesia
                      Tel. (62-21) 5289 5000




                                                                                             CORPORATE GOVERNANCE
                                                   Prudential Tower 20th Floor
                     Fax. (62-21) 5289 4100        Jl. Jend Sudirman Kav. 79
                                                   Jakarta 12190
                        SHARe ReGISTRAR            Tel. (62-21) 5795 7755
                       PT Datindo entrycom         Fax. (62-21) 5795 7750
               Jl. Jend. Sudirman Kav. 34-35
                                 Jakarta 10220     Moody’s Singapore Pte. Ltd.
                         Tel. (62-21) 570 9009     50th Raffles Place #23-06




                                                                                             CORPORATE SOCIAL RESPONSIBILITY
                                                   Singapore Land Tower
                SeCURITIeS DePOSITORY              Singapore 048623
  Kustodian Sentral efek Indonesia (KSeI)
        Indonesia Stock Exchange Building          Standard & Poors
                            Tower I, 5th Floor     30 Cecil Street
             Jl. Jend. Sudirman Kav. 52-53         #17-01/08 Prudential Tower
                              Jakarta 12190        Singapore 049712
                     Tel. (62-21) 5299 1003        Tel. (65) 6438 2881
                    Fax. (62-21) 5299 1129         Fax. (65) 6438 2321




                                                                                             SUBSIDIARIES
                                                                                             BUSINESS STRATEGY
                                                                                             FINANCIAL STATEMENTS
                                                                                             OTHERS




           63
   ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                  63
SIGNIfICANT eVeNTS




 Signing of a cooperation agreement       Board of Director’s media visit      Delivery of Partnership Loan to
 on host-to-host corporate payment         (Jakarta, 17 February 2011)       communities victim of Mount Merapi
      between BRI and Telkom,                                                              eruption
      (Jakarta, 6 January 2011)                                                (Yogyakarta, 17 February 2011)




 Signing of Acquisition Deed of Bank      Gathering of PP Forki and BRI         Presentation of BRI financial
        Agroniaga Tbk. share                (Jakarta, 14 March 2011)                performance 2010
     between BRI and Dapenbun                                                    (Jakarta, 31 March 2011)
       (Jakarta, 3 March 2012)




   BRI Annual General Meeting of         Presentation of the most valuable    Nusantara Cerdas (Smart Nation)
        Shareholders 2011              Banking Brand Indonesia 2011 Award    scholarship program by BRI and the
      (Jakarta, 28 April 2011)               to BRI by Brand Finance          Ministry of the National Education
                                               (Jakarta, 9 May 2011)               (Jakarta, 31 May 2012)




        64               ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                  FOREWORD
                                                                                                                COMPANY PROFILE
                                                                                                                MANAGEMENT DISCUSSION AND ANALYSIS
      BRI Strategic Forum 2011             Breaking of fast with orphans       Homecoming Trip with BRI




                                                                                                                CORPORATE GOVERNANCE
       (Jakarta, 19 June 2011)              (Jakarta, 19 August 2011)           (Jakarta, 25 August 2011)




                                                                                                                CORPORATE SOCIAL RESPONSIBILITY
      BRI Junio Cycle Fest 2011                 BRI Public Expose          Signing of MoU between BRI and the
    (Jakarta, 25 September 2011)             (Jakarta, 5 October 2011)          Ministry of Religious Affairs
                                                                                (Jakarta, 27 October 2011)




                                                                                                                SUBSIDIARIES
                                                                                                                BUSINESS STRATEGY
                                                                                                                FINANCIAL STATEMENTS




Presentation of catheter equipment for       Launching of BRI Touch                Launching of Brizzi
       cardiovascular treatment,           (Jakarta, 16 November 2011)             at Soekarno Hatta
           Sea Games XXVI                                                         International Airport
   (Palembang, 11 November 2011)                                              (Jakarta, 22 December 2011)
                                                                                                                OTHERS




                    65
          ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                65
AWARDS




                                   Banking efficiency Award                               Best Disclosure & Transparency
                                       (SOe Category)                                     IICD CG Conference and Award 2011
                                        Bisnis Indonesia


      Best National Bank
  Driver of entrepreneurship
    Ministry of Cooperatives and
   Small and Medium Business of
      The Republic Indonesia                                     Best Corporate Governance
                                                                        in Indonesia
                                                                        World Finance




                                   Best Performance Bank
                                    (SOe Bank Category)                                       SOe of financial Industry
                                   ABFI Banking Award 2011                                   with excellent Predicate for
                                                                                             financial Performance 2011
                                                                                                  Infobank Magazine

                                                                     Indonesia Brand
                                                                      Champion 2011
 Best of The Best Awards 2011                                          MarkPlus Inc.
         Forbes Indonesia




        66               ANNUAL REPORT 2011                PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                           FOREWORD
                                                                                                                         COMPANY PROFILE
                                                                                                                         MANAGEMENT DISCUSSION AND ANALYSIS
                          CSR Best Practice for                                             Investor Award Best Listed
                          MDG’s in Conjunction                                                   Companies 2011
                              with Indonesia                                                  (Best Listed Company,
                         Millennium Development                                                  Banking Sector)
                                  Goals                                                          Investor Magazine
                          Minister of Public Welfare




                                                                                                                         CORPORATE GOVERNANCE
  CSR Award 2011           Coordinator of Republic
   Seputar Indonesia              Indonesia
      Newspaper

                                                       Indonesian CSR Awards 2011
                                                        Ministry of Social Affairs of the
                                                              Republic Indonesia




                                                                                                                         CORPORATE SOCIAL RESPONSIBILITY
                                                                                                                         SUBSIDIARIES
                            Service Quality Award                                             Top 500 Most Valuable
                             2011-BRI Prioritas                                               Global Banking Brand
                                     CARRE                                                            2011
                                                                                                                         BUSINESS STRATEGY


                                                                                                   Brand Finance
                                                           The Best Contact Center
                                                               Indonesia 2011
 Most Valuable Brand
                                                             Indonesia Contact Center
in Indonesia Product
                                                                     Association
   Category Banks
        SWA
                                                                                                                         FINANCIAL STATEMENTS
                                                                                                                         OTHERS




                        67
                  ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                             67
Management Discussion
and Analysis




  68   ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                   FOREWORD
                          The year 2011 was
                          a consolidation




                                                                                 COMPANY PROFILE
                          year for BRI with the
                          aim of increasing




                                                                                 MANAGEMENT DISCUSSION AND ANALYSIS
                          Bank’s capacity for
                          sustainable growth
                          in the future.




                                                                                 CORPORATE GOVERNANCE
                          Through its consolidation in 2011, BRI
                          succeeded in increasing the quality
                          of loan as seen from the significant
                          decline of NPL rate. This success had
                          a positive impact on net-profit in 2011,




                                                                                 CORPORATE SOCIAL RESPONSIBILITY
                          and provided a more solid foundation for
                          sustainable growth in the years to come.




                                                                                 SUBDIARIES
                           NPL LEVEL *
                                     2010

                                          2.78%
                                                                                 BUSSINESS STRATEGY
                                                                                 FINANCIAL STATESMENTS




                                                                 2011




                                                          2.30               %
                                                                                 OTHERS




                            * Bank only




ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                        69
General Overview
In general the performance of BRI in 2011 was satisfactory, with
improving loan quality, increasing operational efficiency, and an ideal
loan composition representing some of the key achievements amid
an on-going consolidation. BRI achieved a profit growth of 31.52%
year-on-year, increasing from Rp11.47 trillion in 2010 to Rp15.09
trillion, strengthening BRI’s position as a leading bank with the highest
earnings since 2005.

The followings are performance comparisons between BRI and the
national banking industry:

  BRI                                                                                                          National Banking Sector




  Throughout 2011, BRI’s total assets                                 Assets                                   Total aggregate assets of the
  grew 14.59% to Rp456.53 trillion,                               (in trillion Rupiah)                         national banking industry also
  from Rp398.39 trillion in 2010. BRI’s                                              13.24%                    increased,         by 21.4%, from
                                                                        12.42%                    3,652.83
  market share of national banking                                                                             Rp3,008.85 trillion as of end of
  industry’s assets declined from                          10.65%                    3,008.85 12.50%           December 2010 to Rp3,652.83
                                              10.25%
  2010, in line with the consolidation                                   2,534.11                              trillion, in line with robust growth of
  undertaken by BRI.                                        2,310.56                                           Indonesia’s GDP.
                                               1,986.50




                                                                                   398.39      456.53
                                                         246.03       314.75
                                            203.60


                                               2007          2008           2009        2010          2011

                                                     BRI            National                 % over
                                                                    Banking                  National
                                                                                             Banking




  BRI’s loan increased from Rp246.96                                    Loan                                   Loan disbursement by the national
  trillion as of end of December 2010                             (in trillion Rupiah)                         banking       industry  increased
  to become Rp283.58 trillion as of                                   14.29% 13.99%
                                                                                                               significantly by 24.59% in 2011
                                                                                                  2,200.09
  end of December 2011, an increase                      12.32%                                                from Rp1,765.85 trillion in 2010
                                            11.36%
  of 14.83%. This loan growth was                                                  1,765.85           12.89%   to Rp2,200.09 trillion in 2011.
  lower than the national banking                                     1,437.93                                 This growth was consistent with
                                                           1,307.69
  industry due to the fact that BRI                                                                            the relatively high growth of the
                                             1,002.01
  undertook a consolidation program                                                                            Indonesian economy by 6.5% in
  in 2011, especially in the Medium                                                                            2011.
                                                                                             283.58
  and Small Commercial segments,          113.85     161.06        205.52      246.96

  therefore loan market shares
  reduced slightly from 13.39% in            2007          2008        2009         2010         2011
  2010 to 12.89% in 2011.                          BRI             National                 % over
                                                                   Banking                  National
                                                                                            Banking




* Bank only


              70             ANNUAL REPORT 2011                             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                               FOREWORD
                                                                                                                                             COMPANY PROFILE
BRI                                                                                                      National Banking




                                                        Third Party funds
Throughout 2011, the accumulation                            (in trillion Rupiah)                        Total aggregate third party funds
of third party funds increased by                                                          2,784.91      of the banking industry increased




                                                                                                                                             MANAGEMENT DISCUSSION AND ANALYSIS
13.27%. Total deposits grew from                                              14.05%                     by 19.07% year-on-year, from
                                                                  12.88%
Rp328.56 trillion as of year-end                                               2,338.82         13.36%   Rp2,338.82 trillion in 2010 to
                                                  11.49%
2010 to Rp372.15 trillion at year-end       10.95%                                                       Rp2,784.910 trillion in 2011.
2011. Overall, the market share for                              1,973.04
                                                         1,753.29
deposits declined slightly to 13.36%
                                            1,510.83
from 14.05% in previous year.




                                                                            328.56     372.15
                                                                 254.12
                                         165.48     201.50




                                                                                                                                             CORPORATE GOVERNANCE
                                             2007        2008        2009       2010        2011
                                                  BRI           National                % over
                                                                Banking                 National
                                                                                        Banking



BRI’s LDR increased slightly from                                   LDR                                  Aggregate LDR of the banking
75.17% in 2010 to 76.20% in 2011.                                                                        industry increased from 75.21% in
                                                     79.93%         80.88%                      78.77%
This was due to the growth of loan                                              75.17%                   2010 to 78.77% in 2011.




                                                                                                                                             CORPORATE SOCIAL RESPONSIBILITY
that surpassed the growth of third       68.80%
                                                        74.58% 72.88% 75.21%                    76.20%
party deposits.                          66.92%


                                             2007         2008        2009       2010           2011

                                                  National Banking                   BRI




                                                                                                                                             SUBSIDIARIES

With its business model, BRI was                                    NIM                                  The average NIM of the banking
                                                                                                                                             BUSINESS STRATEGY


able to maintain a NIM well above                                                                        industry increased slightly from
                                         10.86%                               10.77%
the average NIM of the banking                          10.18%                                           5.73% as of year end 2010 to
industry. BRI achieved a NIM of                                                                          5.91%. The increase of aggregate
9.58% as of year-end 2011, lower                                                           9.58%         LDR of the banking industry
                                                                   9.14%
than 10.77% as of year-end 2010.                                                                         contributed to the growth of NIM.
The slowing growth of loan as a                                                            5.91%
                                          5.70%                    5.56%
result of on-going consolidation
                                                                                                                                             FINANCIAL STATEMENTS




resulted in the decrease of NIM.                        5.66%                  5.73%

                                           2007         2008        2009       2010         2011

                                                    National Banking                   BRI
                                                                                                                                             OTHERS




                 71
        ANNUAL REPORT 2011              PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                            71
BRI                                                                                   National Banking




BRI’s CAR showed a growing                               CAR                          In contrast with the BRI CAR
trend reaching 14.96% as of year-      19.30%                                         that showed a growing trend,
                                                16.76%   17.42% 17.18%
end 2011, increasing from 13.76%                                             16.05%   the average CAR of the national
in 2010. Lower dividend pay-           15.84%
                                                                                      banking industry, although higher
                                                                             14.96%
out ratios, from 35% in 2009 to                 13.18%   13.20% 13.76%                than BRI’s, declined from 17.18%
30% in 2010 and to 20% in 2011                                                        in 2010 to 16.05% in 2011. The
contributed significantly to the CAR     2007    2008      2009      2010     2011
                                                                                      high growth rate of loan was a key
increase.                                                                             factor to the declining CAR of the
                                                National Banking            BRI       banking industry.




BRI’s BOPO (ratio of operating                           BOPO                         Since 2008 to 2011, the national
expense to operating income)                                                          banking industry’s BOPO was
                                                88.59%
showed declining trends over the                         86.63% 86.14% 85.42%         relatively stable. In 2011, BOPO
                                       84.05%
past three years, in line with the                                                    stood at 85.42%.
improving operating efficiency and                       77.66%
loan quality. BOPO was 66.69%
                                       69.80%
at year-end 2011, declining from                72.65%                       66.69%
                                                                   70.86%
77.66% in 2009 and 70.86% in
2010.
                                         2007     2008     2009      2010    2011

                                                National Banking            BRI




The improving loan composition,                          ROA                          The average ROA of the banking
in which the composition of micro                                           4.93%     industry also increased from 2.86%
loan, with the highest yield, grew                                                    in 2010 to 3.30% in 2011.
larger; the increase in fee based
                                                                  4.64%
income, and increase of leverage,      4.61%    4.18%    3.73%
resulted in the increase of BRI’s
                                                                    2.86%    3.03%
ROA to 4.93% as of year-end 2011,      2.78%             2.60%
                                                2.33%
from 4.64% from the previous year,
well above the ROA of the national       2007     2008     2009      2010    2011
banking industry.
                                                National Banking            BRI




          72              ANNUAL REPORT 2011               PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                  FOREWORD
financial Review




                                                                                                                                COMPANY PROFILE
Throughout 2011, BRI achieved satisfactory financial results, supported by a sustainable business growth strategy
and solid financial fundamentals. BRI recorded a net profit of Rp15.09 trillion, an increase of 31.52% compared
to the previous year of Rp11.47 trillion. With the increase in profitability, BRI recorded a Return on Assets (ROA)
of 4.93% and a Return on Equity (ROE) of 42.49%.




                                                                                                                                MANAGEMENT DISCUSSION AND ANALYSIS
                                         INCOMe STATeMeNT*                                               (in trillion Rupiah)


                                                      2007             2008          2009           2010             2011
 Interest Income                                     23.24            29.00          35.33         44.62            48.16
 Interest Expense                                    (6.54)           (8.45)       (12.28)        (11.73)         (13.74)
 Net Interest Income                                 16.70            19.65          23.05         32.89            34.43
 Other Operating Income                                   1.82         2.54           3.27           5.54            5.78
 Other Operating Expenses                            (9.02)          (11.00)       (11.96)        (16.11)         (17.09)
 Asset Loss Provision Expenses                        (1.94)          (2.84)         (5.80)        (7.92)           (5.53)




                                                                                                                                CORPORATE GOVERNANCE
 Other Non-Operational Income/Expenses                    0.22         0.48           1.33           0.51            1.17
 Profit Before Tax and Minority Interest                  7.78         8.82           9.89         14.91            18.76
 Net Profit                                               4.84         5.96           7.31         11.47            15.09

* Consolidated




                                                                                                                                CORPORATE SOCIAL RESPONSIBILITY
Interest Income                                                  The average base lending rate during 2011 has also
The year 2011 was a year of consolidation for BRI                affected the Bank’s interest income. Throughout
to build a more solid foundation for business growth             2011, the average base lending rate of commercial
and sustainable business in the years to come. Loan              loans recorded a decrease. This decrease in the
growth was not as high as the previous year. The                 average base lending rate was a natural result in an
lower loan growth was due to the Bank’s focus on                 economy that experienced a decrease in inflation
improving loan quality and selectively disbursing                rate. The policy to lower the rate was aligned with the
new loan. Throughout 2011, BRI’s total loan grew                 decrease in BI benchmark rate and also in line with
by 16.64%, an increase of Rp42.03 trillion, from                 Government and Bank Indonesia’s objective, that is
Rp252.52 trillion in 2010 to Rp294.52 trillion in 2011,          the banking industry should lower their lending rates.




                                                                                                                                SUBSIDIARIES
with a consolidated NPL maintained at 2.32%. The                 In the long run, a lower lending rate will bring positive
improvement in loan quality together with a loan                 impact for businesses in general.
portfolio composition that was dominated by micro
loans resulted in the increase of interest income by             During 2011, government recapitalization bonds
7.96%, from Rp44.62 trillion in 2010 to Rp48.16                  that matured amounted to Rp4.63 trillion. As a
                                                                                                                                BUSINESS STRATEGY



trillion in 2011.                                                consequence, interest income from these bonds
                                                                 declined, from Rp1.51 trillion in 2010 to Rp1.11 trillion
Nevertheless, interest income from loans accounted               in 2011. The declining interest income from maturing
as the largest contributor to the Bank’s total interest          government bonds was partially compensated
income. In 2011, loans interest income contributed               with income from new government bonds that was
86.86% to the total interest income, decreasing                  bought during the year but purchased at lower
                                                                                                                                FINANCIAL STATEMENTS




slightly from the position in 2010 at 88,73%.                    discount rate corresponding to prevailing market
                                                                 price. The decline resulted in the decrease of interest
                                                                 income from government bonds of total interest
                                                                 income, from 3.38% in 2010 to 2.31% in 2011.
                                                                                                                                OTHERS




                    73
           ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                       73
Interest income from other earning assets other than loans and government bonds amounted to Rp5.21 trillion,
an increase of 48.07% from the previous year of Rp3.52 trillion.

In 2011, the portion of interest income from other earning assets other than loans and government bonds to total
interest income increased to 10.83%, from 7.89% the previous year.

Composition of Interest Income

                   2010                                                              2011
                   3.38%                                                             2.31%
                                  7.89%                                                             10.83%




88.73%                                                                                                        86.86%




     Interest Income from Loans              Interest Income from Government Bonds           Interest Income from Other Earning Assets




 Interest Income
 (in billion Rupiah)                                                        48,164

                                                          44,615
                                                                            5,214

                                                           3,552            1,114
                                                           1,506

                                          35,334
                                                                            41,836
                                          4,237           39,587
                    28,097                1,806


                     3,823
   23,241
                     1,930
                                          29,292
   3,264

   2,020

                    22,343

                                                                                                    Interest Income on Other Earning     Interest Income on Government
   17,957                                                                                           Assets                               Bonds
                                                                                                    Interest Income on Loans             Total Interest Income


 2007              2008                   2009            2010             2011



Interest expenses
Based on nominal value, interest expenses                                                    was reflected in the decline of BRI’s cost of fund from
increased by 17.15% from Rp11.73 trillion in 2010                                            4.90% in 2010 to 4.70% in 2011. The decline of cost
to Rp13.74 trillion in 2011 due to the growth of third                                       of funds was due to the change in the composition
party deposits, mainly from time deposit and savings                                         of low-cost funds which was higher than high-cost
products. Nevertheless, in term of percentage, in                                            funds, as well as the decline in the interest rate in line
2011 there was improvement in the Bank’s cost of                                             with the decline of Bank Indonesia’s rate.
funds structure compared to the previous year. This




                  74                         ANNUAL REPORT 2011                      PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                                             FOREWORD
                                                                                                                                                           COMPANY PROFILE
    Composition of Interest Expense

                     2010                                                            2011
           9.47%                  14.70%                                   10.10%                13.87%




                                                                                                                                                           MANAGEMENT DISCUSSION AND ANALYSIS
                                              21.10%
                                                                                                            21.02%


                                                                 55.01%
54.72%




                    Savings                   Time Deposit       Demand Deposit       Others




                                                                                                                                                           CORPORATE GOVERNANCE
    Net Interest Income
    As of 31 December 2011, net interest income of BRI                                         improvement of loan quality. Net Interest Margin
    amounted to Rp34.43 trillion, increasing by 4.68%                                          (NIM) was recorded at 9.58%, declining from the
    from Rp32.89 trillion in 2010. The increase was                                            position in 2010 at 10.77%, due to the decline of
    attributable to the increase of outstanding and the                                        interest rate.




                                                                                                                                                           CORPORATE SOCIAL RESPONSIBILITY
    Net Interest Income/NII
    (in trillion Rupiah)

     10.86%                                                  10.77%
                           10.18%
                                                                                  9.58%
                                                                      48.16
                                                                                                          Total Interest Income   Total Interest Expense
                                           9.14%         44.62
                                                                                                              NII                    NIM




                                                                                                                                                           SUBSIDIARIES
                                                                                   28.07
                                       35.33
                                                             32.90

                    28.10
                                                                                                                                                           BUSINESS STRATEGY



                                           23.05
    23.24
                      19.65

                                                                                   13.74
         16.70                                  12.29            11.73
                              8.45
                                                                                                                                                           FINANCIAL STATEMENTS




             6.54



         2007              2008              2009              2010        2011
                                                                                                                                                           OTHERS




                                  75
                   ANNUAL REPORT 2011                          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                              75
Other Operating Income
(in billion Rupiah)
                                                                                                                                                        3,369



                                                                                                               2,813




                                                                            2,118

                                        1,767                                                                                                                   1,797
                                                                                                                       1,525
1,456
                                                                                                                                      773
                                                                                           713
                                                     614
                                                                                                                                                                                     429
                                                                                                                                            278
                                                                                     270
               176                                                                               168
                      142                                                                                                      156                                      146
                                                            103
         48                                     51                                                                                                                              36



           2007                                 2008                                  2009                                     2010                                2011

  Fee Based Income                  Recovery of Written-off Assets                  Gains from Marked to Market                  Nett Gain from currency translation             Others



In 2011, other operating income increased slightly,                                                In 2011, BRI recorded receipt of written-off assets
from Rp5.54 trillion in 2010 to Rp5.78 trillion. With                                              in the amount of Rp1.80 trillion. Gain obtained from
regard to the composition of other operating income,                                               marked to market of securities was recorded at
the increase was contributed mostly by fee based                                                   Rp146 billion, slightly decreasing from Rp156 billion
income, which amounted to 58.32% of the total                                                      in previous year. Gain from exchange rates amounted
other operating income.                                                                            to Rp36 billion, a decrease from Rp773 billion in the
                                                                                                   previous year.
Fee based income for the year ending 31 December
2011 amounted to Rp3.37 trillion, increasing by                                                    Other incomes which comprises of income from
19.78% from Rp2.81 trillion in 2010. Fee based                                                     fines, income from early loans repayments, clearing
income comprises of deposit services, ATM services,                                                charges and others, amounted to Rp429 billion as of
loan services, trade finance services, credit card                                                 December 2011, increasing by 54.40% from Rp278
services, treasury services, payment management                                                    billion in the previous year.
services, insurance partnership services, surveillance
services, underwriting services and safe deposit box
rental services. The 19.78% increase of fee based
income was attributable to a 20.38% increase in
deposit services, 77.42% increase in trade finance
services and 29.61% increase in ATM services.



Composition of Fee Based Income

                              2010                                                               2011
                            3.83%                                                          3.65%       3.71%
                 4.8%
       2.89%                                                                           2.62%
    3.47%                                                                      5.14%


                                                                           10.96%
12.14%



                                                                           9.16%                                                 64.77%
 8.46%
                                                 64.41%




         Administration fee for      ATM          Administration fee for     Export-Import transaction         Credit cards           Payment Service                  Others
         Savings                                  Loans




                     76                     ANNUAL REPORT 2011                              PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                                         FOREWORD
Other Operating expenses                                         The increase of General and Administrative Expenses




                                                                                                                                                       COMPANY PROFILE
Other Operating Expenses increased by 6.03% from                 was due to the increase in the number of network
Rp16.11 trillion in 2010 to Rp17.09 trillion in 2011.            and services (operating units and e-channel).
This expense’s increase was covered by the increase
of other operating income so that Cost Efficiency                BRI continued to optimize the development,
Ratio (CER) improved from the level of 42.22% in the             expansion as well as the quality of its network,
previous year to 41.17% in 2011.                                 namely Branch Offices, Sub-branch Offices, BRI




                                                                                                                                                       MANAGEMENT DISCUSSION AND ANALYSIS
                                                                 Unit, ATM and other electronic delivery channels.
Personnel expenses and benefits cost increased                   During 2011, BRI added 18 Branch Office, 32 Sub-
by Rp25.13 billion, from Rp8.68 trillion in 2010 to              branch Office, 48 Cash Outlets, 200 BRI Units, 687
Rp8.70 trillion in 2011.                                         Teras BRI, 1,187 ATM in strategic locations, and
                                                                 installment of 15.554 new EDC.



                                                                                                                    (in billion Rupiah)


                                                       2007        2008               2009             2010                 2011




                                                                                                                                                       CORPORATE GOVERNANCE
 Personnel                                             5,274       6,329              6,676            8,676                8,701
 General & Administration                              2,405       3,088              3,718            4,711                5,679
 Losses from declining value and from sale                  46     150                   0               0                     0
 of securities and recapitalization bonds
 Premium for Government Insurance                       267        349                 424              524                  624
 Loss from Foreign Exhange Translation                       0       0                   0               0                     0
 Miscellaneous                                         1,027       1,081              1,142            2,203                2,082




                                                                                                                                                       CORPORATE SOCIAL RESPONSIBILITY
 Total Other Operating Expenses                        9,020      10,997             11,960            16,114              17,086




Other Operating Expenses
(in trillion Rupiah)
                                                    17.09
                                           16.11
                                                    12.19%
                                           13.67%
                                                    3.65%
                                           3.25%
                                11.96




                                                                                                                                                       SUBSIDIARIES
                       11.00
                                  9.55%
                                                    33.24%
                       9.835      3.55%    29.24%
          9.02
                       3.17%
        11.39%         1.37%
                                  31.09%
         2.96%         28.08%
         0.51%
                                                                                                                                                       BUSINESS STRATEGY


        26.66%                                                      Personnel                           General and Administration


                                                                    Premium for Government Insurance    Losses from declining value and from sale of
        58.48%         57.55%     55.82%   53.84%   50.92%                                              secureties and recapitalization bonds

                                                                    Miscellaneous                       Total Other Operating Expenses


       2007            2008      2009      2010     2011
expenses for Provision of earning Asset Loss                     Income Tax expenses
                                                                                                                                                       FINANCIAL STATEMENTS




Throughout 2011, the total expenses for provision                BRI’s other contribution to the government beside
of earning asset loss decreased by 30.11% from                   dividend is tax payment. Income tax expenses
Rp7.92 trillion in 2010 to Rp5.53 trillion in 2011, in           increased from Rp3.44 trillion in 2010 to Rp3.67
line with the improvement in the quality of earning              trillion in 2011. This tax contribution has accounted
asset in the second semester of 2011.                            for deferred tax benefit amounting to Rp407.32
                                                                 billion.
                                                                                                                                                       OTHERS




                          77
                 ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                 77
                                      fINANCIAL CONDITION

Supported by solid financial fundamentals, BRI achieved satisfactory financial results in 2011. The quality of
assets as well as liquidity had been maintained in order to support further business expansion and also to deliver
higher returns to the shareholders. The followings are BRI’s summary of balance sheet in the last five years:




                                                  2007           2008         2009           2010         2011
        Balance Sheet Summary*
                                                                    (in billion Rupiah)
 Total Assets                                  203,735        246,077      316,947        404,286      469,899
   Cash                                          5,041          6,750        8,139          9,976        10,526
   Current Account with Bank Indonesia          31,048          9,946       12,893         19,990        33,040
   Current Account and Placement with
                                                15,543         25,622       49,485         88,930        79,130
   Other Banks - Net
   Securities - Net                             20,482         24,322       25,528         23,750        48,129
   Government Recapitalization Bonds            18,223         16,352       15,027         13,626         8,996
   Loan Disbursed                              113,973        161,108      208,123        252,489      294,515
   Allowance for Impairment Losses              (6,958)        (8,005)     (11,368)       (14,103)     (16,090)
   Investment - Net                                 77             90          111            134           165
   Fixed Assets - Net                            1,644          1,350        1,366          1,569         1,853
   Other Assets                                  4,663          8,542        7,642          7,924         9,635
      Derivative Receivables - Net                  24              0          143             88            18
      Acceptance Receivables - Net                 654            479          348            660         1,692
      Deferred Tax Assets                        1,270          2,000        1,915          2,295         2,632
      Other Assets                               2,714          6,063        5,235          4,881         5,294
 Total Liabilities                             203,735        246,077      316,947        404,286      469,899
 Liabilities                                   184,297        223,720      289,690        367,612      420,079
   Third Party Funds                           165,600        201,537      255,928        333,652      384,264
      Current Account                           37,162         39,923       50,094         77,364        76,779
      Saving Account                            72,300         88,077      104,463        125,990      154,133
      Time Deposit                              56,138         73,538      101,371        130,298      153,353
   Immediate Liabilities                         3,956          5,621        4,333          4,124         3,962
   Deposits from Other Banks                     1,611          3,428         4,450         5,160         4,024
   Securities with Agreements to Resell            103            103          544            526           103
   Borrowing                                     2,382          3,356       13,611          9,455        13,098
   Subordinated Debt                             2,140            711         2,678         2,156         2,136
   Other Liabilities                             8,505          8,964         8,144        12,539        12,492
 Equity                                         19,438         22,357       27,257         36,673        49,820
   Paid-in Capital                               6,159          6,163         6,165         6,167         6,167
   Other Capitals                                3,301          2,869         3,258         3,383         3,588
   Minority Interest                                                                                         46
   Total Retained Profit                         9,978         13,325       17,835         27,123        40,019
* Consolidated figures




               78           ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                             FOREWORD
ASSeTS                                                    Securities




                                                                                                                                           COMPANY PROFILE
As of 31 December 2011 total assets of BRI increased      Securities held by BRI increased significantly by
by 16.23%, from Rp404.29 trillion as of December          102.65% from Rp23.75 trillion on 31 December 2010
2010 to Rp469.90 trillion. The biggest contributor        to Rp48.13 trillion on 31 December 2011.
to the increase in total assets was earning assets
which increased by Rp52.95 trillion from Rp379.70         Government Recapitalization Bonds
trillion as of December 2010 to Rp432.65 trillion by      As of 31 December 2011 BRI held Rp8.99 trillion




                                                                                                                                           MANAGEMENT DISCUSSION AND ANALYSIS
December 2011.                                            of government recapitalization bonds, decrease
                                                          slightly from Rp13.63 trillion in 2010 or 33.98%.
The composition of earning assets as of December          The decrease was due to maturing government
2011 was dominated by loans and receivables in            recapitalization bonds of Rp4.63 trillion, resulting in a
the amount of Rp294.52 trillion or 68.07% of the          lower contribution of the Bonds’ ratio to total assets
total earning assets. The portion of government           from 3.37% to 1.91%.
recapitalization bonds was 2.08% from the total
earning assets, while other earning assets, including
SBI and other securities were 29.85% from the total
earning assets.

In line with the growth of earning assets and in          Government Recapitalization Bonds




                                                                                                                                           CORPORATE GOVERNANCE
several conditions, there were clear evidences of         (in trillion Rupiah)
declining value as a result of deteriorating business
conditions of borrowers, total amount of loan loss
                                                           18.22
provisioning as of 31 December 2011 was Rp16.09
trillion, increased by 14.09% from Rp14.10 trillion in
                                                                               16.35
December 2010. BRI calculated its loss provisioning
on the basis of impaired assets that are assessed                                           15.03




                                                                                                                                           CORPORATE SOCIAL RESPONSIBILITY
both individually and collectively.                                6.54                                      13.63
                                                                                    5.27
Cash and Current Account with Bank Indonesia                                                   3.60

During 2011 cash increased by 5.52%, from Rp9.98                                                                     3.60
trillion in 2010 to Rp10.53 trillion as of December
2011. Current account with Bank Indonesia also
increased from Rp19.99 trillion in 2010 to Rp33.04                                                                              9.00
trillion in 2011, or an increase of 65.29%. The
increase was in line with Bank Indonesia regulation
                                                                                                                                    4.31
on Minimum Reserve Requirement, the amount of
which represented the primary Minimum Reserve



                                                                                                                                           SUBSIDIARIES
                                                                   11.68            11.08     11.43
Requirement for Rupiah that was posted in the book                                                                  10.03
of Bank Indonesia amounting to 9.33%.
                                                                                                                                    4.68
Current Account and Placement with Other Banks
                                                                                                                                           BUSINESS STRATEGY



Current account and placement with other banks
slightly decreased by 11.02%, from Rp88.93 trillion        2007                2008         2009              2010           2011
in 2010 to Rp79.13 trillion on December 2011. The
decrease was due to decrease in placement of                  Fixed Interest Rate                   Floating Interest Rate

USD (third party) with other bank in 2011, namely a
                                                                  Total
decrease in inter-bank call money in the amount of
Rp9.77 trillion and a decrease in deposit on call in
                                                                                                                                           FINANCIAL STATEMENTS




the amount of Rp900 billion.
                                                                                                                                           OTHERS




                  79
          ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                             79
Loan                                                                Quality of Loan
In 2011, BRI had successfully increased its total                   BRI’ loans in the category of current increased by
outstanding loan and sharia financing              from             15.05% from Rp232.98 trillion on December 2010
Rp252.49 trillion in 2010 to Rp294.51 trillion in 2011,             to Rp268.06 trillion on December 2011. Loan in the
or an increase of 16.64%. As a bank that focuses                    category of special mention increased slightly from
its business on Micro, Small and Medium (MSME)                      Rp12.44 trillion on December 2010 to Rp19.62 trillion
segment, the proportion of loans to the MSME                        on December 2011.
segment dominated the total loans portfolio by
80.91%, in the forms of micro loans, retail loans and               BRI’s consolidated non performing loans gross
medium business loans. The remaining, or 19.09%                     improved, from Rp7.05 trillion on December 2010 to
of the total loans was disbursed to the corporate                   Rp6.84 trillion on December 2011, or a 2.32% NPL
segment which comprises of State-Owned                              gross ratio on December 2011, compared to 2.79%
Enterprise (SOE) and non-SOE business. The portion                  in 2010.
of loans to the SOE business was 57.19% of the total
corporate loans.                                                    BRI’s NPL net also improved, from 0.75% on
                                                                    December 2010 to 0.42% on December 2011.
Starting from financial year 2010, outstanding
loan has been posted in line with (the accounting                   Loan Write-off & Recovery of Loan that has been
standard) PSAK 50/55 (revised 2006). Outstanding                    Written-Off
loan was initially accounted for at fair value, which               In 2011, BRI wrote-off loan totaling Rp4.39 trillion
is equal to the transaction value and subsequently                  and recovered loan that has been written-off in the
posted at its amortized cost, which is the balance                  amount of Rp1.79 trillion. Compared to 2010, loan
of principal after accounting for amortization on                   written-off decreased by 11.46% and recovery of
provision and transaction cost (BRI’s expense)                      loans written-off increased by 57.85%.
as long as the transaction cost could be directly
attributed to, and represent additional cost toward
the realization of the loan. The amortization itself                                                          (in trillion Rupiah)

uses the effective interest rate method.
                                                                                               2009    2010            2011

Loans                                                                Loan write-off            2.51    4.96             4.39
(in trillion Rupiah)
                                                                     Recovery of written-off
                                                       294.51                                  0.77    1.14             1.79
                                                                     loans

                                              252.49
                                                       56.23

                            208,12            43.93    13.84

                                              13.83
                             38.30
                   161.11                                           Investment in Shares of Stocks
                             14.91                                  As of 31 December 2011, BRI’s investment in
                   30.80                               129.14
                                                                    shares of stock (net) amounted to Rp164.69 billion,
  113.97           12.45
   19.81                                      116.73                increased by 23.01% from Rp133.89 billion on 31
    8.35
                             99.86                                  December 2010. The increase was attributable to the
                   75.10                                            increase in the recognized value of PT BTMU - BRI
   53.21                                                            Finance from Rp135.13 billion in 2010 to Rp163.28
                                              78.00
                                                       95.30        billion in 2011. The increase in value resulted from
   32.60           42.76     55.06
                                                                    the accumulated growth of the Net Profit Portion of
                                                                    PT BTMU - BRI Finance.
  2007            2008      2009              2010     2011

     Micro                           Retail


     Medium                          Corporate

       Total




                 80             ANNUAL REPORT 2011              PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                      FOREWORD
Details of BRI’s investment in shares of stocks as of 31 December 2011 are as follows:

 a.   PT BTMU-BRI Finance (formerly PT UFJ BRI Finance)                                       Rp163.28 billion




                                                                                                                                    COMPANY PROFILE
 b. PT Kustodian Sentral Efek Indonesia                                                       Rp900 million
 c.   PT Sarana Bersama Pembiayaan Indonesia                                                  Rp536 million
 d. PT Pemeringkat Efek Indonesia                                                             Rp210 million
 e.   BPR-BPR and PT Aplikasinusa Lintasarta                                                  Rp298 million




                                                                                                                                    MANAGEMENT DISCUSSION AND ANALYSIS
fixed Assets

                                                                2007            2008            2009          2010      2011
                    Fixed Assets
                                                                                    (in billion Rupiah)
 Land & Buildings                                           1,340               1,436          1,582          1,811    2,017
 Furnishing & Inventory                                         627              635             665             754      891
 Vehicles                                                       306              500             536             550      658
 Computer & Software                                        1,884               2,025          2,159          2,289    2,424




                                                                                                                                    CORPORATE GOVERNANCE
 Leasing                                                        328               59                3              1            0
 Total                                                      4,486               4,655          4,945          5,405    5,990


In line with the network expansion of BRI, there was               Third Party funds (DPK)
an increase in fixed assets investment in 2011. Fixed              Third party funds are funds raised from third party
assets were recorded at Rp5.99 trillion, an increase               in the form of demand deposits, savings and
of 10.83% from Rp5.41 trillion in 2010. There were                 time deposits, including sharia products such as
no material commitments for capital expenditure in                 Wadiah current account, Mudharabah savings and




                                                                                                                                    CORPORATE SOCIAL RESPONSIBILITY
2011.                                                              Mudharabah time deposits.

Other Assets                                                       In 2011, BRI succeeded in increasing its third party
On 31 December 2011, other assets amounted to                      funds from Rp333.65 trillion in 2010 to Rp384.26
Rp9.64 trillion, increased by 21.60% from Rp7.92                   trillion, an increase of 15.17% while maintaining the
trillion in the previous year. This account comprises              composition of low-cost funds and high-cost funds
of derivative receivables, acceptation receivable,                 at the level of 60%:40%. Contribution of third party
deferred tax assets and other assets. The decrease                 funds to total liabilities reached 91.47%.
of this account in 2011 was attributable to the
decrease in acceptation receivable-net amounted



                                                                                                                                    SUBSIDIARIES
to Rp1.03 trillion, deferred tax asset amounted to
Rp0.34 trillion and other assets amounted to Rp0.41
trillion.
                                                                                                                                    BUSINESS STRATEGY


LIABILITIeS                                                        Third Party Funds                                   384.26
Outstanding liabilities of BRI as of 31 December                   (in trillion Rupiah)
                                                                                                              333.65
2011 increased by 14.27% from Rp367.61 trillion
on 31 December 2010 to Rp420.08 trillion. Third
party funds account increased by 15.17% compared                                                  255.93
                                                                                                                       153.35

to 2010, reflected the success of BRI’ marketing                                                              130.30
strategy in the harnessing of third party funds,                                     201.54
                                                                                                                                    FINANCIAL STATEMENTS




mainly due to support to BRI’s working network and                     165.60                     101.37

e-channel, improvement in service quality as well as                                 73.54
the trust of the general public to BRI.                                56.14                                  125.99   154.13


                                                                                                  104.46
                                                                       72.30         88.08

                                    Demand Deposits   Savings
                                                                                                               77.36   76.80
                                                                       37.16         39.92        50.09
                                    Term Deposits       Total
                                                                                                                                    OTHERS




                                                                       2007          2008         2009        2010     2011



                    81
            ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                 81
By December 2011, savings reached highest growth             Borrowings
compared to the growth of other components of third          Borrowings are used, among other reasons, to
party funds. Savings in 2011 amounted to Rp154.13            finance the general business’ activities of BRI
trillion or increased by 22.34% from Rp125.99 trillion       and trade finance needs. This item consists of
in 2010. Savings in 2011 amounted to 40.11% of the           loans from Bank Indonesia (liquidity loans and
total third party funds.                                     loans for fixed assets investment), loans from the
                                                             government, bilateral loans and other loans. Total
This improvement in savings serve as a proof of              loans received as of 31 December 2011 amounted
success in several marketing campaign for savings            to Rp13.10 trillion, increased by Rp3.64 trillion
products as well as the further development of               compared to Rp9.46 trillion as of 31 December
savings product features which attracted the public          2010. The increase was due to increase in foreign
to BRI’s savings product.                                    currency loans received from several foreign banks
                                                             (such as Wells Fargo, Sumitomo Mitsui Banking
In 2011 current account decreased slightly,                  Corp, Citibank, N.A., JP Morgan Chase Bank, N.A,
0.76% from Rp77.36 trillion on December 2010 to              Australia N. New Zealand Bank, Bank of Montreal,
Rp76.78 trillion on December 2011. Time deposits             The Bank of New York Mellon and The Bank of Tokyo
amounted to Rp153.35 trillion on December 2011,              Mitsubishi UFC, Ltd.) amounted to Rp3.21 trillion
increased by 17.69% compared to Rp130.30 in                  in 2011. In addition, BRI also received loans from
2010. The increase was attributable to deposits              government entities and institutions namely loans
from institutional customers such as government              from PT Permodalan Nasional Madani (Persero) and
institutions, insurance companies, as well as from           Lembaga Pembiayaan Ekspor Indonesia, amounted
retail customers.                                            to Rp0.23 trillion in 2011.

Current Liabilities                                          Subordinated Debt
This account represent the liabilities of BRI to other       Total subordinated debt as of 31 December 2011
parties that need to be settled immediately, subject         amounted to Rp2.14 trillion, comprised of Rupiah
to the order of the issuing party as stipulated in the       Subordinated Debt II in the amount of Rp2 trillion
liabilities notes. Some of the transactions that fall        and two-step loans in the amount of Rp141.62
into this account include money transfer deposits,           billion. The Rupiah Subordinated Debt II was issued
tax payment deposits, ATM and credit card deposits,          on 22 December 2009 with a period of 5 years
clearing deposits and advance payment deposits.              and fixed interest scheme of 10.95% annually and
                                                             was listed on the Indonesia Stock Exchange (IDX).
As of 31 December 2011 BRI recorded current                  Net proceeds from the issuance were used as
liabilities amounted to Rp3.96 trillion, decreased by        supplementary capital (tier II capital) in accordance
3.93% compared to Rp4.12 trillion on December                with Bank Indonesia regulation, and all the funds
2010. The biggest contributor to this decrease is            raised had been fully used for loan expansion in
credit card deposits which amounted to Rp38.67               accordance with prudential principles. Compared
billion on December 2011, compared to Rp267.9                to the year 2010, the total amount of subordinated
billion on December 2010.                                    debts had remained the same, while the amount of
                                                             two-step loans decreased in terms of their principal
Deposits from Other Banks and Institutions                   amount by Rp21.33 billion, from a total outstanding
Deposits from other banks and institutions comprise          amount of Rp162.95 billion in 2010 to Rp141.62
of demand deposits, savings, time deposits,                  billion in 2011.
interbank call money as well as deposits on call.
These items are used for inter-banks transaction for
operations and liquidity purposes. Deposits from
other banks and institutions in 2011 amounted to
Rp4.02 trillion, decreased by Rp1.14 trillion from
Rp5.16 trillion in the previous year.




            82             ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                         FOREWORD
                                                                                                                       COMPANY PROFILE
Other Liabilities
Other liabilities comprises of derivative liabilities, acceptation liabilities, estimated commitment and contingency
loss, tax payable and other liabilities. As of 31 December 2011, other liabilities amounted to Rp12.49 trillion, or
decreased by 0.38% from Rp12.54 trillion on 2010. One of contributors of this decline were coming from the
decline in the amount of prepaid income.




                                                                                                                       MANAGEMENT DISCUSSION AND ANALYSIS
equity
Total equity of BRI increased by 35.85%, from Rp36.67 trillion on December 2010 to Rp49.82 on December
2011. The increase was primarily due to the increase of retained earnings from Rp27.12 trillion to Rp40.02 trillion
as of 31 December 2011. This reflected support from shareholders to BRI in order to strengthen its capital, by
approving dividend pay out ratio of 20% of 2010 net profit.




                                                                                                                       CORPORATE GOVERNANCE
                                                                                                                       CORPORATE SOCIAL RESPONSIBILITY
                                                                                                                       SUBSIDIARIES
                                                                                                                       BUSINESS STRATEGY
                                                                                                                       FINANCIAL STATEMENTS
                                                                                                                       OTHERS




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          ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                   83
                                           CASH fLOWS INfORMATION


BRI’s operating, investing and financing activities in 2011 resulted in an increase of Rp5.50 trillion in the amount
of cash and cash equivalent, from Rp127.52 trillion as of year-end 2010 to Rp133.02 trillion as of year-end 2011,
an increase of 4.31%. The increase came from additional cash from operating activities amounting to Rp15.98
trillion, additional or receipt of net cash from investment activities amounting to Rp1.79 trillion, minus net cash
used for financing activities amounting to Rp8.72 trillion.

                                                                                                         (in trillion Rupiah)

                                          Cash flow*                                 2010                2011
 Net Cash Generated from Operating Activities                                        54.34               15.98
 Net Cash Used for Investing Activities                                              (2.19)              (1.79)
 Net Cash (Used for)/Generated from Financing Activities                             (7.07)              (8.72)

* Consolidated



Cash flows from Operating Activities                           Cash flows from Investing Activities
Net cash flows from operating activities in 2011               In 2011, net cash flows from investing activities
amounted to Rp15.98 trillion. The cash inflows were            amounted to Rp1.79 trillion, generated mostly
mainly generated from interest income, return on               from marketable securities and government
investments, provision and commission, as well as              recapitalization bonds that were held to maturity
sharia income, all of which amounted to Rp47.78                amounting to Rp1.21 trillion.
trillion. The cash inflows were also coming from
increases in savings and time deposits, amounting              In 2010, net cash flows used for investing activities
to Rp28.14 trillion and Rp23.05 trillion, respectively.        amounted to Rp2.19 trillion.
While the cash outflows mainly used for payment
of interest expense and operating expense that                 Cash flows from financing Activities
amounted to Rp13.68 trillion and Rp24.29 trillion,             In 2011, net cash flows that were used for financing
respectively.                                                  activities amounted to Rp8.72 trillion, most of which
                                                               were used to purchase securities with agreements to
In 2010, net cash flows from operating activities              resell amounting to Rp9.19 trillion as well as for the
amounted to Rp54.34 trillion, mainly generated from            appropriation of profit for dividends, special reserves
interest income, return on investments, provisions             and the Partnership and Community Development
and commissions as well as sharia income. These                Program (PKBL) totalling Rp2.75 trillion, counter-
inflows also came from increases in the Bank’s                 balanced with Bank borrowings of Rp3.64 trillion.
deposits (demand deposit, savings and term deposit)
that were balanced with cash outflows, primarily               While in 2010, net cash flows used for financing
used for additional loan disbursement, and payment             activities amounted to Rp7.07 trillion, mostly used
of interest and operating expenses.                            for dividend payment, Partnership and Community
                                                               Development Program and payment of loans
                                                               received.




                 84             ANNUAL REPORT 2011         PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                    FOREWORD
                                             fINANCIAL RATIOS




                                                                                                                  COMPANY PROFILE
                               FINANCIAL RATIOS*                                       2010              2011
 Performance Ratios
 1.    Capital Adequacy Ratio (CAR)                                                   13.76%          14.96%
 2.    Non performing earning assets and non performing non earning assets            2.19%            1.79%




                                                                                                                  MANAGEMENT DISCUSSION AND ANALYSIS
       to total earning assets and total non earning assets
 3.    Non performing earning assets to total earning assets                          2.24%            1.85%
 4.    Impairment loss reserve of financial assets to earning assets                  4.58%            4.51%


 5.    NPL gross                                                                      2.78%            2.30%
 6.    NPL net                                                                        0.74%            0.42%
 7.    Return on Assets (ROA)                                                         4.64%            4.93%
 8.    Return on Equity (ROE)                                                         43.83%          42.49%
 9.    Net Interest Margin (NIM)                                                      10.77%           9.58%
 10.   Operating Expenses to Operating Income                                         70.86%          66.69%




                                                                                                                  CORPORATE GOVERNANCE
 11.   Loan to Deposit Ratio (LDR)                                                    75.17%          76.20%
 Compliance
 1.    a. Violation on Legal Lending Limit
         i. Related party                                                             0.00%            0.00%
         ii. Unrelated party                                                          0.00%            0.00%
       b. Excess of Legal Lending Limit
         i. Related party                                                             0.00%            0.00%




                                                                                                                  CORPORATE SOCIAL RESPONSIBILITY
         ii. Unrelated party                                                          0.00%            0.00%
 2.    Statutory Reserves
       a. Rupiah                                                                      8.05%            9.33%
       b. Foreign Exchange                                                            1.00%            8.00%
 3.    Net Open Position (NOP) as a whole                                             4.45%            5.49%

* Bank only


Capital Adequacy
Pursuant to Bank Indonesia Regulation No. 10/15/PBI/2008 of 24 September 2008, banks are required to calculate



                                                                                                                  SUBSIDIARIES
Capital Adequacy Ratio (CAR) while taking into account credit risk, market risk and operational risk. BRI’s CAR
in 2011 was 14.96%, increased compared to the previous year of 13.76%. The increase was attributable to BRI
management prudent policies both in capital management and loan expansion toward loan with lower weighted
risk.
                                                                                                                  BUSINESS STRATEGY
                                                                                                                  FINANCIAL STATEMENTS
                                                                                                                  OTHERS




                    85
              ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                               85
BRI Capital Adequacy Position presented in the table as follows:


                                                           2007         2008          2009          2010        2011
                    DESCRIPTION*
                                                                            (in billion Rupiah)
 Core Capital                                             15,448      17,796        20,846         27,673     38,215
 Supplementary Capital                                     1,819       1,945         1,993          4,037      3,601
 Placement/Investment                                       209          553               -            -           -
 Total Available Capital                                  17,059      19,188        22,839         31,711     41,816
 Total Risk Weighted Assets of credit and market         107,711     145,581       173,068        203,316    226,605
 Total Risk Weighted Assets of credit and operations           -            -              -      229,014    277,303
 Total Risk Weighted Assets of credit, market and
                                                               -            -              -      230,447    279,603
 operations
 CAR for credit and market risk                          15.84%      13.18%        13.20%         15.60%     18.45%
 CAR for credit and operational risk                           -            -              -      13.85%     15.08%
 CAR for credit, market and operational risk                   -            -              -      13.76%     14.96%

* Bank only



Return on equity
Return on Equity (ROE) as a reflection of the returns          Statutory Reserves
on shareholders’ investment, was maintained at                 In compliance to Bank Indonesia regulation,
42.49% in 2011, slightly below the ROE in 2010                 BRI is required to maintain Minimum Reserves
of 43.83%. The decision to have dividend payout                Requirement, both in Rupiah and Foreign Exchange.
ratio of 20%, has effectively increased BRI’s retained         As of December 2011, BRI’s Rupiah Reserve position
earnings significantly, strengthening the equity of            was 9.33% while Foreign Exchange Reserve position
the Bank. Thus, a higher increase in equity than in            was 8%.
the increase of net profit during 2011 had led to the
lower ROE in 2011 than in year 2010.                           Net Open Position
                                                               In accordance with Bank Indonesia’s regulation,
While Return on Assets (ROA) before tax slightly               Net Open Position as a whole is defined as the total
increased from 4.64% as of December 2010 to                    absolute amount of the net balance between assets
4.93% as of December 2011. However, both ROE                   and liabilities, and between the receivables and
and ROA ratios were above industry averages.                   liabilities accruing from the administrative accounts
                                                               of respective foreign currencies that are stated in
Net Interest Margin                                            Rupiah. In 2011, BRI’s ratio of Net Open Position
BI’s decision to lower benchmark rate by 50 basis              was 5.49%, increasing from the Net Open Position
point in 2011 resulted in the decline of Net Interest          of 4.45% in 2010.
Margin across the national banking industry.
Nevertheless, BRI succeeded in maintaining its NIM             As of 31 December 2011, BRI fulfilled all statutory
at 9.58%, well above the national banking average,             ratios in accordance with Bank Indonesia regulation
although slightly below the NIM of 10.77% in 2010.             as well as other prevailing laws and regulations.

Loan to Deposit Ratio                                          In addition, most of the key financial ratios presented
BRI kept its commitment to disburse loan in order              above, reflecting strong financial fundamental or
to support the growth of the Indonesian economy.               foundation of BRI, and also showed BRI’s impressive
BRI’s Loan to Deposit Ratio increased from 75.17%              performance, by conducting financial intermediary
in 2010 to 76.20% in 2011.                                     role thoroughly in a professional, transparent and
                                                               accountable manner.
BOPO (Operating expense to Operating Income)
BRI’s achievements in improving loan quality,
maintaining relatively high ROE, ROA and NIM, as
well as the increase of LDR and also supported by
the efficiency improvement in banking operational
activities throughout 2011, had been contributing
to a lowering BOPO of 66.69% in 2011, down from
70.86% in 2010.




              86              ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                     FOREWORD
                              OTHeR fINANCIAL INfORMATION




                                                                                                                   COMPANY PROFILE
extraordinary events
There were no financial information reports that were    New Regulations in 2012
recorded in regard to infrequent and extraordinary
events during 2011.




                                                                                                                   MANAGEMENT DISCUSSION AND ANALYSIS
                                                         1. Calculation of Credit Weighted Risk using the
                                                            Standardized Approach
Subsequent events                                           BRI had been completely prepared to implement
No material facts and information arose on events
                                                            the calculation of the risk weighted assets for
subsequent to the date of financial report.
                                                            credit risk using the standardized approach for
                                                            its financial statements of 2012 complying to the
Information on Investment/Divestment
In 2011, BRI completed two acquisitions, the                Bank Indonesia Circular Letter Number 13/6/
acquisition of PT Bank Agroniaga Tbk. on 3 March            DPNP dated 18 February 2011. This approach will
2011 and the acquisition of BRIngin Remittance              affect the calculation of BRI’s liability of Minimum
Company on 16 December 2011. Additional                     Capital Adequacy ratio, in which the ratio will
information on these acquisition is presented in the        decline slightly, primarily due to the grouping of
section of Subsidiary Companies on page 234.                loans with plafond above Rp1 billion classified




                                                                                                                   CORPORATE GOVERNANCE
                                                            into the corporate collectibles portfolio category
Use of Initial Public Offering (IPO) Proceeds               with a weighted risk of 100%.
As of year end 2009, all of the proceeds of IPO
amounting to Rp1.47 trillion had been utilized in
                                                            The implementation of this new regulations would
accordance with the proceed utilization plan, as
                                                            not reduce the BRI’s CAR significantly, since
follows:
                                                            BRI will keep focusing on the MSME business
                                                            segment, in which as of December 2011, the
                                      Realization
 No.   Planned Use of Proceeds                              MSME loans accounted for 80.91% of BRI total




                                                                                                                   CORPORATE SOCIAL RESPONSIBILITY
                                      (Rp billion)
                                                            loan, and also focusing in disbursing loans which
       Upgrading of information
                                                            have lower risk-weighted, such as loans to SOE.
       reporting system and
  1.                                    883.27
       implementing of core
       banking system (60%)                              2. The measurement of Bank’s soundness using
       Network expansion of                                 Risk Based Bank Rating
  2.   branch offices and units         441.63              BRI implements the measurement of the Bank’s
       (30%)                                                soundness by using the Risk Based Bank
       Funding for growth,                                  Rating approach complying to Bank Indonesia
       research and                                         Regulation No: 31/1/PBI/2011 of 5 January 2011
  3.   development, disbursed           147.21              and Bank Indonesia Circular Letter No. 13/24/
       loans and other financing


                                                                                                                   SUBSIDIARIES
                                                            DPNP of 25 October 2011, starting from 2012.
       (10%)
                                                            This measurement through the RBBR method
       Total                           1,472.11
                                                            considers four factors, namely Good Corporate
                                                            Governance, Risk Profile, Earnings and Capital.
Use of Proceeds on the Issuance of the Rupiah
                                                                                                                   BUSINESS STRATEGY



Subordinated Bonds II
BRI had used all of the proceeds from its                   The result of the RBBR method of measurement
Subordinated Bonds II in 2009 amounting to Rp2              of BRI’s Soundness (bank only) as of December
trillion for loan disbursement. According to BRI’s          2011 (unaudited) resulted in the composite
data, total loan outstanding in the first quarter of        rating of 1 (extremely sound) as reflected in the
2010 alone amounted to Rp3.17 trillion, well above          assessed factors, including risk profile, GCG
the proceeds from the bonds issuance.                       implementation, earnings power, as well as
                                                                                                                   FINANCIAL STATEMENTS




                                                            capital that in general are extremely good.
                                                                                                                   OTHERS




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          ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                              87
BUSINESS REVIEW

Micro, Small & Medium Sized Business




                                            Since the beginning BRI has the
                                            commitment       to  develop   Micro,
                                            Small and Medium-sized Enterprises
                                            (MSME) which represents the main
                                            focus of BRI’s banking business. That
                                            commitment is evident from majority of
                                            BRI’s loan disbursement portfolio that
                                            are directed to the MSME segment.




    88     ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                        FOREWORD
BRI strong commitments to the development of




                                                                                                                      COMPANY PROFILE
MSME can be seen in the scale of resources and
infrastructure that is provided by BRI to serve this
segment. BRI aims to provide this through the
provision of products and services in the micro
business, small commercial business and medium
business segments.




                                                                                                                      MANAGEMENT DISCUSSION AND ANALYSIS
MICRO BUSINeSS

One of BRI’s vision is to become the best micro
banking institution in the world in terms of profitability
and sustainability, and by prioritizing customer
satisfaction.
                                                             A number of these new features have been developed
The growth strategy of BRI in the micro business             for the Kupedes (micro loans) and Simpedes (micro
segment is to continue expanding the reach of the            savings) products, marketed in 2011, which include:
Bank’s services to the far reaches of Indonesia, by
providing micro financing products and services that         - Kupedes for Motorcycle Financing




                                                                                                                      CORPORATE GOVERNANCE
are simple, secured and easy to be accessed by                 This Kupedes feature provides financing facility for
customers. In order to do that, BRI has prepared and           the purchase of motorcycle using the motorcycle
developed a reliable system to support the growth              itself as collateral. Previously, customers of BRI
of its customer base for lending and savings. In               Unit purchased their motorcycle either through
addition, BRI continues to develop human resources             cash payment or loan from lending institution
with high level of integrity and professionalism in the        that are provided by the motorcycle dealers. With
micro financial field.                                         enhancement to the Kupedes feature, the need of




                                                                                                                      CORPORATE SOCIAL RESPONSIBILITY
                                                               micro customer for motorcycle financing can be
Throughout 2011, BRI disbursed a total of Rp78.99              facilitated through BRI.
trillion in commercial micro loans, Rp9.29 trillion
increase or 13.34% from that of 2010.                        - Kupedes for House Financing
                                                               This feature provides for the need of micro
Besides Kupedes, BRI is also disbursing KUR Micro              segment     customers     for   the    purchase,
which is a financing scheme dedicated to new start-            construction or renovation of houses or business
up Micro entrepreneurs and it is backed by a loan              premises. This feature has been developed with
insurance guarantee from government through                    consideration that up-to-now banks generally
state-owned insurance companies. For BRI, the                  only provide mortgage in urban centers while the
disbursement of KUR Micro can be used as a vehicle             needs of the micro segment have not been met by



                                                                                                                      SUBSIDIARIES
to broaden the potential borrower base of Kupedes.             existing mortgage scheme.
The loan insurance guarantee from the government
covers 70% of the KUR Micro loans loss, and as               - Kupedes for Direct Supply of Water Utility
such makes the KUR Micro becomes loan scheme                   Municipality Company (PDAM)
                                                                                                                      BUSINESS STRATEGY



with reasonable risk and return profile for BRI. KUR           Public demands for water utility facilities from
Micro was initially disbursed in 2008, and as of year-         PDAM continues to increase. However, the cost
end 2011 has gained a total of 1.93 million borrowers          of water pipe installation is generally passed
with total outstanding loans of Rp11.20 trillion.              on to the customer. The relatively high cost of
                                                               installation represent a hindrance to some people
Developing Leading Micro Banking Products                      of communities to obtain PDAM water facilities. A
To increase the number of customers, BRI constantly            solution provided by BRI is to offer financing for
                                                                                                                      FINANCIAL STATEMENTS




strive to develop new features for micro lending               the installation of new PDAM connection through
products and supporting policies that are aligned              the BRI Kupedes.
with the needs of the customers, which also serve as
BRI’s micro banking measure of success.
                                                                                                                      OTHERS




                    89
          ANNUAL REPORT 2011              PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                 89
- KUR Micro for Indonesian Migrant Workers                   The PRS festival is staged as an integrated
  Pursuant to addendum III of the KUR MoU that               marketing activity for the loan products Kupedes
  was signed on 16 September 2010, BRI has                   and KUR,      Simpedes and e-banking product.
  disbursed KUR to Indonesian migrant workers                Through out 2011, PRS was organized in 273 BRI
  overseas. The KUR TKI, as it is called, is a KUR           branch offices, carrying the theme of e-banking,
  loan scheme that is provided to Indonesian                 especially sms-banking.
  migrant workers to cover their part of expenses
  for their relocation overseas.                             BRI Cares for Traditional Markets (BRI Pesat)
                                                             Through the BRI Pesat program, BRI undertakes
- Simpedes Impian (Simpedes Dream)                           the integrated marketing for BRI products (savings,
  The Simpedes Dream is a product diversification            loans, e-banking and others) in traditional markets
  of the BRI Simpedes that is designed to                    that connects directly with the community of traders
  accommodates the needs of customer in                      and consumers in those markets. The objectives of
  planning for the future with respect to investment,        the BRI Pesat program include:
  education and other financially related plans.             - To build and revive the awareness of traditional
                                                                market communities of traders and consumers
- Simpedes Usaha (Simpedes Business)                            towards BRI products and services.
  A Simpedes feature that specifically provides              - To increase the number of customer (volume
  convenience for customer to engage in banking                 base) namely depositors, borrowers as well as
  transactions in support of their business.                    other banking transactions.
                                                             - To assist the traditional markets trader community
Micro Business Marketing Program                                in their efforts to obtain banking services in
To achieve the target for 2011, in terms of increasing          connection with growing their businesses
the number of accounts as well as the amount of                 through soft loan financing.
instanding savings and outstanding loans, and also           - To assist the Traditional Market Office in its
to increase customer loyalty, BRI undertook an                  efforts to organize a more clean, sanitary
integrated marketing program as follows:                        and comfortable traditional market through
                                                                the Partnership Program and Community
Program for Business expansion and Acquisition                  Development (PKBL). This program does not
of New Customer                                                 limit itself to support physical facilities, but also
                                                                covers non-physical support (such as medication
Pesta Rakyat Simpedes (PRS)                                     etc.)
PRS, the Simpedes Folks Festival, is designed as a
special event in the marketing of Simpedes that was          Panen Bulanan Simpedes (PBS) or
first undertaken in 2008.                                    Simpedes Monthly Harvest
                                                             PBS is a sweepstakes program for customers
                                                             who are not accommodated by the sweepstakes
                                                             program held at Branch Office level. PBS is carried
                                                             out by every BRI Unit once every two months, and
                                                             is rotated among the BRI Units under the direction
                                                             of Branch Office.

                                                             Partnership Program
                                                             BRI also develops its Micro Business through
                                                             cooperation with several partners from the private
                                                             sectors, government and non-governmental
                                                             organization with the aim of expanding the micro
                                                             customer base. In this partnership program, BRI
                                                             acquires new customer through various events that
                                                             offer banking product and services that suit the
                                                             needs of potential partners.




            90             ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                    FOREWORD
                                                                                                                                  COMPANY PROFILE
We truly appreciate the presence of BRI in our
Community. Through the program of empowering small businesses in our
areas, BRI has succeeded at the same time to improve the living standards and
economies of our communities. We also benefit considerably from the widespread BRI
ATM network in our neighborhoods, which makes it easy for us to do our banking
transactions. BRI is also widely known in our communities relative to other banks in




                                                                                                                                  MANAGEMENT DISCUSSION AND ANALYSIS
the Cisarua region.

In addition to the SME empowerment, the Plant One Million Trees program of BRI is
greatly appreciated by our folks, so that the areas of Puncak can become green again,
and water supply could be restored, considering that water catchment areas in the
region have diminished over the years.

Our expectation of BRI is that loan disbursement could be made less bureaucratic
and aligned with the capacity of our folks. Also, we hope that BRI could help develop
the economic potential of our cattle breeding business at Citeko that has not been
capitalized to its full potential by local communities.                                                   H. Mamad Sukendar
                                                                                           Village Head, Citeko, Cisarua, Bogor
                                                                                                     Population: 12,761 people




                                                                                                                                  CORPORATE GOVERNANCE
   Programs to Increase Customer loyalty                                  Microfinance International Cooperation




                                                                                                                                  CORPORATE SOCIAL RESPONSIBILITY
   BRI also undertakes activities that are aimed at                       Starting with the International Visitor Program to
   increasing customer loyalty as well public awareness                   showcase the micro banking activities of BRI,
   towards a whole range of BRI’s micro banking                           which subsequently received recognition in the
   products, such as:                                                     form of grants from USAID and the World Bank/
                                                                          CGAP (Consultative Group to Assist the Poor), BRI
   • The Loyalty Marketing Program Through Joint                          capitalized on this momentum to establish the BRI
     Homecoming with Kupedes and Simpedes                                 Microfinance International Cooperation (MIC) in
     In 2011, the traditional Joint Homecoming with                       2008. MIC represents one of BRI’s manifestation
     Kupedes and Simpedes (for the Ied celebration)                       of global corporate social responsibility within the
     took care of 3,068 customers of Kupedes and                          framework of developing the leading microfinance



                                                                                                                                  SUBSIDIARIES
     Simpedes using 52 busses, and brought home 50                        business in the world.
     migrant workers from Malaysia, to destinations in
     Central Java, East Java and Yogyakarta.                              Through MIC, BRI undertakes the Microfinance
                                                                          Training and Study Visit (MTSV), business captures,
                                                                                                                                  BUSINESS STRATEGY


   • Marketing Program Through Trade fairs                                and technical assistance in the microfinance field.
     BRI participated in a number of trade fairs and                      BRI MIC has also forged cooperations with various
     exhibits, including Inacraft, fashion and culinary                   microfinance institutions throughout the world
     events and others, by showcasing BRI micro                           such as Asia-Pacific Rural and Agricultural Credit
     customers in these events to expose them to                          Association (APRACA), Microfinance Network (MFN),
     broader market opportunities.                                        Microcredit Summit, Banking With The Poor (BWTP),
                                                                          Woman World Banking, APEC, and others.
                                                                                                                                  FINANCIAL STATEMENTS
                                                                                                                                  OTHERS




                         91
               ANNUAL REPORT 2011                PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                91
                                                    I have been a BRI borrower since 2010. Currently my loan outstanding
                                                    ceiling is Rp50 million, which is mainly used to manage inventory stock in
                                                    my construction hardware store.

                                                    The services that I receive from BRI is satisfactory, simple and
                                                    straightforward when applying for loan, and not for one
                                                    moment will I consider of changing
                                                    banks although many banks are offering me similar loan facilities.
                                                    I This is because I feel that I have forged a special bond with the staffs of
                                                    the BRI Unit that I belong to.
H. Burdahedi
Construction Hardware Store Owner
BRI Micro Business Customer




Development Plans                                             Developing Professional HR
                                                              The growth in the number of operating units needs
Growth Acceleration in Micro Business                         to be supported by qualified personnel in adequate
BRI will continue to market its micro banking                 number. To that end, BRI continues to ensure that
products and services more aggressively in the                the number of workforce is adequate and that the
coming years. To do this, one of the strategy is by           quality of personnel is enhanced through periodical
pro actively reaching out to potential customers in           and continuous training and education.
the market.
                                                              Re-organising the Micro Business
To accelerate business growth, market testing will            The Micro Business organization structure has been
be carried out in business clusters that are deemed           and will be modified in such a way that it provides
potential for the micro banking products and services         room for the advancement of policies that are
of the respective BRI Units throughout the country.           proactive, versatile and focused by maximizing all
BRI’s Head Office will support the development                potentials to support the growth acceleration of the
of micro business by fostering good relations with            Bank’s Micro Business.
institutions, government entities and other third
parties at their Head Office to open and ease market          enhancing Product features
penetration by BRI Operating Units in the region.             Simpedes
                                                              The enhancement of the product features of
Strengthening the Customer Base                               Simpedes is primarily aimed at brand rejuvenation
The marketing of lending and savings products are             to make Simpedes more attractive to younger
not merely measured by the amount of Rupiah,                  generation. In addition, the Simpedes features
but needs to be followed by increasing number of              will also be enhanced to meet the growing needs
customers as well. Increasing number of customers             of micro customers who are looking for a savings
is expected to strengthen BRI’s customer base,                product that can also be used to carry out business
while also empowering local economies to grow.                transactions as well as for private needs.




            92               ANNUAL REPORT 2011         PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                    FOREWORD
Kupedes                                                  Strategy and Performance of Small Commercial




                                                                                                                  COMPANY PROFILE
According to data from the Ministry of Cooperatives      and Medium Business
on loan disbursement, out of the total number of         The year 2011 was a consolidation year for the Small
MSME that is estimated at 55.21 million businesses,      Commercial and Medium Business of BRI. This was
the banking service has so far reached less than         an action that was chosen by BRI in its efforts to
25% of those MSME. As such, BRI has actively             improve the quality of earning assets in this segment,
developed new Kupedes features that are designed         which during the past two years had shown increasing




                                                                                                                  MANAGEMENT DISCUSSION AND ANALYSIS
to provide greater access to potential borrowers         non performing loan (NPL) ratio. In broad terms, there
without detracting from the simplicity of the Kupedes    were two main steps taken to redress the situation.
product. The Bank expects that these feature             The first one constitutes the Remedial Steps, taken
enhancements will absorb a greater portion of the        on an ad-hoc basis, and short-term in nature, aimed
market and increase the number of micro borrowers.       at reducing the level of existing classified loans,
                                                         with the purpose of reducing NPL ratio by year-end
                                                         2011. The second one is the Proactive Steps, which
SMALL COMMeRCIAL AND                                     consist of preventive measures to ensure that there
MeDIUM BUSINeSSeS                                        would not be any loan deterioration beyond normal
                                                         business level in the future. The remedial measures
The Small Commercial and Medium businesses are           taken from early 2011 produced encouraging results,
                                                         in which the NPL ratio for the Small Commercial and




                                                                                                                  CORPORATE GOVERNANCE
aimed at the small and medium-scale enterprise
segment for both working capital and investment          Medium Business segments declined from 5.11%
loans, as well as program loans that is linked to        and 6.90%, respectively, at year-end 2010 to 4.53%
government programs in connection with grass root        and 7.11% at year-end 2011.
economic empowerment.

Not only for productive businesses, BRI also
provides its products and services to finance private




                                                                                                                  CORPORATE SOCIAL RESPONSIBILITY
consumption of individuals who are working in the
private sector or public sector through Briguna.




                                                                                                                  SUBSIDIARIES
                                                                                                                  BUSINESS STRATEGY
                                                                                                                  FINANCIAL STATEMENTS
                                                                                                                  OTHERS




                  93
          ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                             93
PROGRAM BUSINeSS

Strategy and Performance of Program Loans
BRI employs a hands-on strategy in the development            In 2011, the cumulative realization of Retail KUR
of the Program Business, by allocating maximum                increased by 47.46% from Rp6.49 trillion in 2010 to
resources to support this Program Business                    Rp9.57 trillion in 2011.
development. The strategy has succeeded in
positioning BRI as the leading banking proponent
                                                               Retail KUR Realization
in the disbursement of program loans that are
                                                                              2007      2008     2009     2010     2011    Growth
an integral part of the government’s national                   Realization
                                                                                         (in trillion Rupiah)               (YoY)
development program, without detracting from the
                                                                   Retail
principles of prudential and professional banking.                            0.29      3.05     4.18     6.49     9.57    47.46%
                                                                   KUR

Disbursement of Retail KUR                                    Disbursement of food Security Loans
The program loan that is mostly disbursed through             Through the subsidized program loans, BRI has
the Program Business segment is the Retail KUR                supported the food security program by disbursing
that is aimed at start-up entrepreneurs with loans            the Food and Energy Security Loan (known as
ranging from above Rp20 million to Rp500 million              KKP-E), the Warehouse Receipt Subsidy Scheme
with loan insurance guaranteed by the government.             (known as S-SRG), and the Plantation Revitalization
As of year-end 2011, BRI had helped 64,373                    and Renewable Energy Development Loan Scheme
borrowers comprising of small-business owners and             (known as KPEN-RP). The KKP-E loan scheme has
cooperatives, a sharp increase of 16,117 borrowers            proficiently helped farmers, breeders, fishermen
from the number of borrowers in 2010. These                   and cultivators in increasing the volume of their
achievements were attributed to BRI’s commitments             agricultural production.
to support the government’s program in increasing
financing access for the MSME sector in Indonesia.            As of year-end 2011, BRI had cumulatively disbursed
                                                              a total of Rp4.23 trillion of KKP-E, with a total
Throughout 2011, total outstanding Retail KUR                 outstanding of Rp1.97 trillion that made BRI the
increased by 35.44 % from Rp3.43 trillion in 2010 to          market leader in the disbursement of national KKP-E
Rp4.65 trillion in 2011.                                      with a market share of 58.13% of the outstanding
                                                              national KKP-E totalling Rp3.03 trillion.
Outstanding Retail KUR

              2007 2008   2009     2010    2011
                                                              Whereas in 2011, BRI disbursed a total of Rp1.45
                                                  Growth
Outstanding
                                                   (YoY)
                                                              trillion of KKP-E, an increase of 52.15% from the
                    (in trillion Rupiah)
                                                              disbursement of KKP-E in 2010 totalling Rp2.78
Retail KUR    0.24 2.40 2.47 3.43 4.65            35.44%      trillion, with an increase in the total amount of
                                                              outstanding KKPE by Rp0.44 trillion or 28.75%
                                                              compared to Rp1.53 trillion in 2010. The BRI KKP-E
                                                              has helped 6,609 farmers, breeders, cultivators
                                                              and cooperatives in increasing their agricultural
                                                              production.

                                                              Outstanding KKP-e

                                                                                2007     2008     2009      2010    2011
                                                                                                                            Growth
                                                                Outstanding
                                                                                           (in trillion Rupiah)              (YoY)

                                                               KKP-E            0.58      0.90     1.21     1.82    1.97    8.24%




              94              ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                   FOREWORD
      The KKP-E schemes are provided to small-scale                        from the private sectors, the establishment of




                                                                                                                                 COMPANY PROFILE
      cultivation of sugar cane, food crops, horticulture,                 the SME Center, and the implementation of
      food production, animal husbandry, and agriculture                   the so-called Closed Financing System that
      machineries.                                                         can contribute to the Trickle Down Effect for
                                                                           businesses within the same industry supply
      Disbursement of Briguna Loan                                         chain that has the potential of developing
      In 2011, the Briguna loan that was aimed at financing                into a sound loan portfolio; supported by the




                                                                                                                                 MANAGEMENT DISCUSSION AND ANALYSIS
      the private consumption of employees or retirees                     comprehensive knowledge of BRI account
      who had fixed income, grew by 6.56% to reach                         officers over the businesses of customers.
      Rp43.79 trillion.
                                                                           Market penetration is carried out by product
      Plans to Increase Penetration and Market                             feature improvements while also intensifying
      Development                                                          cooperations with government entities that
      The focus of BRI on the Small Commercial and                         have large customer bases. Improvements in
      Medium Business segment is to continue to                            the level and speed of services, accompanied
      increase market penetration and development.                         with adequate IT support as well as professional
                                                                           and skilled personnel will continue to be
      The market development strategy is focused on                        maintained and developed in order to increase
      efforts to identify potential Briguna customers                      market penetration and business development.




                                                                                                                                 CORPORATE GOVERNANCE
                                                                                                                                 CORPORATE SOCIAL RESPONSIBILITY
By utilizing the vast network of BRI throughout the country,
I hope that BRI could engage our business subsidiaries that




                                                                                                                                 SUBSIDIARIES
are spread across 17 provinces of Indonesia. The roles of
these subsidiaries are essential to our business of supplying
and distributing recycled oil.


To date very few businesses are interested in this particular type of waste recycle business,                  Nelson Siagian
                                                                                                                                 BUSINESS STRATEGY



butI am confident that this business will grow rapidly                                            Proprietor, CV Nelma Mandiri
                                                                                                         BRI Small Commercial
in several years to come, especially with adequate                                                                   Customer
banking support, from BRI. In addition to providing working capital
loans, I also hope that BRI could provide managerial mentoring to the subsidiaries of our
business group.
                                                                                                                                 FINANCIAL STATEMENTS
                                                                                                                                 OTHERS




                          95
                 ANNUAL REPORT 2011               PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                               95
Consumer Business




  BRI develops its consumer banking products and services
  innovatively, creatively and practically to meet consumer
  needs. The consumer banking products that are offered
  through the BRI service networks are broad and diverse,
  encompassing savings and deposits, consumer loan and the
  BRI Priority service.




       96            ANNUAL REPORT 2011         PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                             FOREWORD
fUNDS AND SeRVICeS                                             them to save money. BRI Junio Savings is very




                                                                                                                           COMPANY PROFILE
                                                               attractive to this particular segment due to its features
Deposit Products                                               of popular cartoon and superhero characters in the
                                                               BRI Card Private Label Limited Edition such as
BritAma                                                        Superman, Tweety and Tom and Jerry. In addition
BritAma is a leading savings product that competes             customers of BRI Junio Savings are exempted from
in the third party funds market in urban areas and             administration fees and are eligible for the lottery




                                                                                                                           MANAGEMENT DISCUSSION AND ANALYSIS
is aimed at customers that require convenience and             program “Untung Beliung BritAma.”
accessibility for their banking transaction. Available
in Rupiah and foreign currency denomination,                   Third party funds accumulation through this product
BritAma offers deposits and the withdrawals that can           reached Rp1.06 trillion as of year-end 2011, or
be made at all times through BRI’s on line network             increased by 52% from Rp502.23 billion in 2010.
of more than 7,000 operating units throughout
Indonesia with unlimited withdrawal frequencies                In 2011, in a survey done by Marketing Magazine
subject to prevailing terms and conditions. BritAma            and Frontier Consulting Group, BRI earned the Top
account holders are provided with the BRI Card                 Brand Award in two savings product categories,
that can be used for ATM transactions or debit                 the Children savings account category for BRI
purchases throughout the world, while also providing           Junio Savings and the savings account category for
convenient access to e-banking transaction, BRI on             BritAma Savings. In addition, BRI also won the First




                                                                                                                           CORPORATE GOVERNANCE
line transaction and other automated transaction               Winner & Saving Account Category 2011 from SWA
facilities (automatic funds transfer, automatic                and Mars Magazine.
grab fund, account sweep). Account holders also
participate in the lottery program, “Untung Beliung            GiroBRI
BritAma” (Britama Wind of Fortune).                            GiroBRI is a demand deposit product to harness
                                                               low cost fund from the market. GiroBRI is available
BritAma Savings continue to grow over the years.               in Rupiah and foreign currency denomination.




                                                                                                                           CORPORATE SOCIAL RESPONSIBILITY
Third party funds accumulation through BritAma                 Customers can make deposits and withdrawal at
reached Rp59.38 trillion as of year-end 2011, or               any time without nominal limitation. GiroBRI comes
increased by 25.47% from Rp47.33 trillion in 2010.             with BRIVA (BRI Virtual Account) facility that provides
                                                               easy access to deposit and business transaction
BRI Junio Savings                                              reconciliation for customer. Third party funds
BRI Junio savings is specifically aimed at customers           accumulation from this product reached Rp75.58
below 17 years of age. The objective of this savings           trillion as of year-end 2011.
product is to introduce banking products since the
early age to younger people, particularly inducing




                                                                                                                           SUBSIDIARIES
                                                                                                                           BUSINESS STRATEGY


                      BritAma                                                           GiroBRI
                  (in trilion Rupiah)                                               (in trilion Rupiah)



                                        59.38
                                                                                                 77.05 75.58
                              47.33
                      38.45                                                            49.96
                                                                                                                           FINANCIAL STATEMENTS




      24.88
              30.65                                                     37.15 39.91




       2007 2008 2009 2010 2011                                         2007    2008    2009 2010         2011
                                                                                                                           OTHERS




                  97
          ANNUAL REPORT 2011                PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                          97
DepoBRI                                                       “Untung Beliung BritAma” Program
Another source of third party funds is the Time               The Untung Beliung BritAma (UBB) lottery program
Deposit Account named DepoBRI. The time deposit               represents both customer retention/loyalty and
offers various tenors from 1, 2, 3, 6, 12, 18 months          acquisition programs for the BritAma Savings as part
to 24 months. DepoBRI has several advantages,                 of the strategy to accumulate funds and increase
such as competitive interest rates, and is available in       the balance of BritAma Savings. This UBB program
Rupiah and several foreign currencies denominations           has gone through five seasons since 2007, and has
including GBP, JPY, USD, SGD, CNY, and EUR,                   succeeded in increasing public awareness of the
redeemable in all of BRI operating units. DepoBRI             BritAma Savings.
can also be used as cash collateral for back-to-back
loans.                                                        Plans for 2012
                                                              BRI plans to keep creating new attractive savings
DepoBRI has continued to increase over the years,             products and more creative and innovative BritAma
a testimony that this product has gained the trust            Savings marketing programs through acquisition,
and preference of the public. As of year-end 2011,            retention, and loyalty programs. Apart from that BRI
DepoBRI amounted to Rp144.10 trillion compared to             will also focus on increasing its market share on
Rp126.31 trillion in 2010.                                    funding in urban areas, while also developing retail
                                                              and e-banking products that generate fee based
Haj Savings                                                   income by expanding and increasing the number of
The Haj Savings is a savings product designed to help         delivery channels particularly electronic channels.
customers who want to perform their haj pilgrimage,
by fulfilling haj pilgrimage travel cost (BPIH), both         BRI PRIORITY
normal BPIH or special (VIP) BPIH. Several leading
features of this product include deposit that can             BRI Priority is privileged banking services for BRI
be made on line in all BRI operating units and is             customers from the mass affluent and high net
linked directly (host-to-host) through a switching            worth individuals categories, comprising of general
application with the information system (Siskohat)            banking services, investment and financial planning
of the Ministry of Religious Affairs. Customers are           advisory services, bancassurance and pension
also exempted from administration fees and receive            plan. BRI Priority aim to increase awareness, and
souvenir upon the full payment of their BPIH.                 customer retention and loyalty through intellectual
                                                              life style, heritage, and seasonal event themes.
Over the past four years, the Haj Savings have
continued to perform encouragingly. Third party               To achieve its goals, the BRI Priority services are
funds accumulation reached Rp1.91 trillion as of              facilitated through the BRI Priority Services Centers
year end 2011, or increased by 18.15% from Rp1.61             which is designed with special interior design
trillion in 2010.                                             concept to give security, reliability, convenience
                                                              and comfort in mind when customers perform their
                                                              banking transaction. BRI Priority Lounge outlet are
                                                              available in several major cities of Indonesia.




                             DepoBRI
                      (in trillion Rupiah)




                                      126.31 144.10

                             100.03

                     73.52
             56.06




              2007   2008     2009    2010   2011




            98                 ANNUAL REPORT 2011         PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                      FOREWORD
To ensure security and reliability of banking               Wide-ranging Privileges




                                                                                                                                    COMPANY PROFILE
transaction, each Priority Service Center is equipped       There are vast variety of services provided for BRI
with organizational standard and built-in control that      Priority customers, which are personalized services
are managed professionally by experienced Priority          from the Priority Banking Officer, money courier
Banking Assistant (PBA), Priority Banking Officer           and collection services for funds of certain nominal,
(PBO) and Priority Banking Manager (PBM) who are            phone banking transaction, special transaction
certified in accordance with the competence standard        rooms, business facilities and private mini lounge,




                                                                                                                                    MANAGEMENT DISCUSSION AND ANALYSIS
required by regulator. This includes certification for      internet & e-banking corner, free meeting room,
Mutual Funds Selling Agent (WAPERD), certification          special car park section, and 24 hours Call Center
of the life insurance association of Indonesia (AAJI) for   service.
the marketing of bancassurance (unit link) products
and certification of wealth management training. At         Privileges provided to BRI Priority customers include
the end of each period, customer are provided with          among others automatic border passage (SAPHIRE),
an updated report on the position of their private          personal travel assistance, private plane reservation,
savings and investments by the Customer Portfolio           exclusive medical evacuation, free Velvet Class
Management System (CPM).                                    Blitz Megaplex, travel insurance, free exclusive
                                                            business meeting Room, free pre-approved BRI
In the interest of the customers and to minimize            Platinum Credit Card, free access to 33 airport
uncertainties, BRI Priority does not provide derivative     Executive Lounge in Indonesia, travel privileges,




                                                                                                                                    CORPORATE GOVERNANCE
product services. As such the Bank’s Priority services      lifestyle privileges, concierge services and privileges
focus more on providing capital accumulation and            on an international scale in cooperation with the
preservation in ways that are more structured and           Mastercard International Debit program.
measured.
                                                            Achievement in 2011
                                                            The growth of BRI Priority customers’ number up to
                                                            December 2011 was as follows:




                                                                                                                                    CORPORATE SOCIAL RESPONSIBILITY
                                                                             2007       2008    2009     2010        2011
                                                             Number of
                                                                             17         280     1,295    3,679       6,978
                                                             Customer


                                                            The amounts of investment management portfolios
                                                            of BRI Priority customers up to December 2011 were
                                                            as follows:

                                                                                                              (in billion Rupiah)

                                                                               2007      2008    2009    2010        2011



                                                                                                                                    SUBSIDIARIES
                                                                Portfolio
                                                                amount
                                                             (Assets Under        8.5     826    3,451   7,375     12,616
                                                             Management /
                                                                 AUM)
                                                                                                                                    BUSINESS STRATEGY
                                                                                                                                    FINANCIAL STATEMENTS
                                                                                                                                    OTHERS




                   99
          ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                         99
Recognition for Customer Satisfaction                        BRI remained focused on expanding its consumer
In 2010 and 2011, in the surveys on customer                 business by capitalizing on the Bank’s huge
satisfaction done by Care of CCSL and Marketing              customer base and enhancing the quality and speed
Magazine, BRI Priority earned a total score in the           of its business processes as well as services, without
Indonesian Service Satisfaction Index (ISSI) above           compromising on prudential banking practices.
the average score of the Priority Banking Services,
industry, in both domestic and multinational                 Increasing the Number of CCC and POS
categories. Furthermore, BRI Priority also won the           To sharpen the focus of BRI’s consumer loan
Indonesia Service Quality Award Diamond Category             services, since 2008 BRI has built the consumer loan
(score above the industry average score), placing            operating network in the forms of the Consumer Loan
fourth and third in 2010 and 2011, respectively.             Center (CLC) and point of sales (POS). Subsequently,
                                                             since 2010, BRI has begun to expand its consumer
                                                             loan operating network outside of the initial 14 major
                                                             cities. BRI’s operating units that are assigned as CLC
                                                             and POS are adapted to the consumer business
                                                             potential that exist within the areas of the respective
                                                             operating unit.

                                                             Joining with Business Partners
                                                             To broaden the customer base, BRI continues to
Plans for 2012                                               establish partnership with several major property
The plan for BRI Priority continuous development will        developers to disburse mortgage and apartment
remained focus on efforts to develop products and            loans, while also engaging in partnership with
privileges, in cooperation with leading third parties,       automotive dealership to support the disbursement
and undertaking various marketing programs that              of car and motorcycle loans. In addition to this,
aim for customer acquisition, retention and loyalty.         as part of the strategy to create brand image and
In addition, to strengthen the service network further,      increase awareness, BRI undertakes promotion
BRI Priority has increased the Priority Banking              in various mass media and actively participate in
outlets in the form of BRI Priority Service Centers and      several trade fairs of national and international scale.
Priority Lounges in several major cities throughout          Aside from the expansion of the consumer loan
Indonesia.                                                   operating network, BRI also upgraded and enhanced
                                                             its banking technology that has enabled the Bank to
CONSUMeR LOAN                                                meet its Service Level Agreement better. BRI also
                                                             continues to innovate and improve product features
The growth of consumer loan is largely influenced            to fulfill customer expectations.
by public purchasing power and economic growth.
The year 2011 was rife with challenges, related to the       Mortgage
global economic crisis and increased competition             BRI Mortgage is packed with several attractive
among banks to draw potential domestic customers.            propositions for home owner in Indonesia. Currently,
To maintain and increase its consumer loan market            BRI has established cooperations with more than
share, BRI steadily undertakes continuous and                370 housing projects throughout the country. In
innovative product feature developments in line with         addition to that BRI Mortgage also offers a number
customer needs for mortgage, car and motorcycle              of sweet deals including flexible down payments
loans, and multipurpose loans.                               and loan tenors, competitive interest rates, safety
                                                             guaranteed ownership deeds and other services that
                                                             provide added value for potential borrowers.




         100                ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                         FOREWORD
Total outstanding BRI Mortgage as of December                enhancement of infrastructure and HR




                                                                                                                       COMPANY PROFILE
2011 amounted to Rp9.49 trillion, increasing by              To achieve optimum growth, by 2011 BRI has built
16.73% from that of 2010. This indicates that BRI            a total of 45 Consumer Loan Centers (CLC) and 100
has been successful in growing its mortgage amid             Point of Sales (POS) that focus exclusively on serving
the tight competition within the national mortgage           the consumer loan products. BRI has also increased
market.                                                      the number of the consumer loan marketing force.
                                                             In 2011 there were a total of 331 Consumer Account




                                                                                                                       MANAGEMENT DISCUSSION AND ANALYSIS
Vehicle Loans                                                Officer, compared to 279 in 2010.
BRI Vehicle Loan is designed to capture a sizeable
market share of the auto loans market. The product           Development Plans for 2012
is fully supported by the cooperation of BRI                 In 2012, BRI will continue to improve its organization
with various automotive exclusive importers and              and mono line business process that has been
dealerships. In addition to that, to meet customer           implemented in the cities of Surabaya and Makassar.
expectation, BRI Vehicle Loan offers a No-Down-              Business process improvements will be carried out by
Payment feature which combines the BRI vehicle               increasing the Service Level Agreement and growing
loan with a time deposit product. Joint promotions           the loans quantitatively as well as qualitatively. BRI
with automotive importers and dealers had also               will also establish several Regional Processing
enhanced the competitiveness of BRI Vehicle Loan             Center (RPC), Regional Sales Center (RSC) and
which includes highly affordable interest rates.             Collection Center. In addition to that BRI will develop




                                                                                                                       CORPORATE GOVERNANCE
                                                             new product features for Mortgage, Vehicle Loans
BRI also develops partnership with multi finance             and Multipurpose Loans; introduce more flexible
companies through the Joint Vehicle Loans program.           installment payments and other favorable terms in
The program will be developed continuously in light of       order to make the BRI consumer loan services even
the huge prospect in store, to facilitate the expansion      more attractive. Whereas for the marketing strategy,
of vehicle loans more effectively and efficiently. Total     BRI will intensify its efforts by capitalizing more on
outstanding of BRI Vehicle Loan as of year-end 2011          customer data base, third party partnership (dealers/




                                                                                                                       CORPORATE SOCIAL RESPONSIBILITY
amounted to Rp1.67 trillion, increasing by 13.74%            developers), walk-in customers, as well as through
from that of 2010.                                           implant banking for home ownership program and car
                                                             ownership program with several major corporations.
Multi-purpose Loans
BRI Multi-purpose Loans is designed to fill the needs
of customers outside of Mortgage and Vehicle Loan.
BRI Multi-purpose Loans are attractive to customers
due to its winning features, including lengthy tenors
of up to 10 years and a loan ceiling of up to Rp1
billion. Total outstanding BRI Multi-purpose Loans as
of year-end 2011 amounted to Rp1.58 trillion.



                                                                                                                       SUBSIDIARIES
                                                                                                                       BUSINESS STRATEGY


       Outstanding KPR (mortgage)                                     Outstanding KKB (vehicle loan)
              (in trillion Rupiah)                                             (in trillion Rupiah)


                                        9.49
                                                                                                         1.67
                                 8.13
                                                                                                  1.47
                          4.57
                  3.08                                                                   0.68
                                                                                                                       FINANCIAL STATEMENTS




           1.79                                                         0.35    0.45



           2007 2008 2009 2010          2011                           2007    2008    2009       2010   2011
                                                                                                                       OTHERS




                  101
          ANNUAL REPORT 2011              PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                      101
CReDIT CARD                                                    Target Market
                                                               In the efforts to expand cardholders base, BRI strives
BRI enters the credit card business with the objective         to innovate and create a credit card that suits the
of becoming the preferred credit card services                 needs of individual cardholders. BRI credit cards
providers in the country, not merely as an auxiliary           are differentiated based on their respective target
business but also as one of the key growth engine              markets, as follows:
of BRI’s business. Supported by existing customer
base of more than 30 million accounts in the Bank’s            • Affluent Market, represents the target market for
book, the development of credit card business                    the BRI Platinum credit card, targeting the mass
becomes an extremely promising for BRI business.                 affluent and affluent market segment.
Since its launch in 2006, BRI Credit Card has                  • Mass Market, represents the target market for BRI
become one of the iconic products in the consumer                Visa credit card, aiming at the population of major
banking segment, fulfilling the dynamic expectations             cities between the age of 25 - 35 years old, will be
of card holders.                                                 equipped with new and more modern products
                                                                 and features using the latest communication
The Credit Card Business Development Strategy                    technology. Whereas for secondary and third
To develop the credit card business, BRI employs a               tier cities, BRI    has created in the form of low
strategy that among others increases cross selling               income credit card with the marketing strategy
opportunities by adding new features or payment                  that is designed to fit with the profile of the target
transaction utilizing BRI Credit Card, optimizing                market.
available resources to increase productivity and
achieving competitive advantages over business                 Winning features of BRI Credit Cards
competitors.                                                   • Low interest rates
                                                                 Cardholders benefit from low interest rates on
This development strategy rests upon BRI’s                       various transactions, whether retail or cash
reputation and the trust of card holders, fully reliable         advance.
supporting resources such as adequate IT platform,             • Executive airport lounges
low-cost funding sources, extensive network                      There are 30 executive airport lounges in
that covers the entire country, large and diverse                Indonesia that are available to cardholders of BRI
customer base as well as the support of competent                Platinum and Gold credit card.
personnel of high integrity.                                   • Lifetime exemption of annual fees for holders of
                                                                 BRI Visa credit card.
                                                                 Cardholders are exempted for annual fees as long
Credit Card Products                                             as their card is active.
Up to now, BRI has issued the following credit cards:          • Point rewards
                                                                 Holders of BRI Mastercard credit card receive
• BRI Standard Credit Card                                       point rewards for every transaction carried out in
• BRI Gold Credit Card                                           certain merchants that have signed agreement
• BRI Platinum Credit Card                                       with BRI.
• BRI Corporate Credit Card                                    • Rupiah Reward
  A credit card designed for executive and manager               Holders of BRI Visa credit card receive Rupiah
  of corporations to manage their travel and                     reward for every transaction carried out in certain
  entertainment expenses wherein the use of the                  merchants that have signed agreement with BRI.
  card is guaranteed by the corporation.                       • Cash withdrawal at BRI ATM
• BRI Business Credit Card                                       Holders of BRI credit card can withdraw cash
  A credit card that is designed for business                    from any BRI ATM.
  owners or for member of certain communities                  • Protection Plus
  that are used like any other credit card in general            Cardholders receive Protection Plus insurance
  (individual liabilities) but has been added with               that combines the benefit of accident insurance
  specific advantage that enable card holders to                 and health insurance.
  use as the identity of the community.
• BRI Visa Credit Card
• BRI Affinity Credit Card (co-branding with Hyundai)




          102                ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                         FOREWORD
• BRING (Belanja RINGan) program                         Through the marketing strategy of low income credit




                                                                                                                       COMPANY PROFILE
  Cardholders can purchased exclusive products           card, throughout 2011 BRI succeeded in increasing
  through the BRING easy installment program             the number of EDC merchants by 1,426 EDC, with
  being offered through a monthly catalogue.             total transaction volume that increased by 191.58%
• 24-hour service                                        from Rp80.77 billion in 2010 to Rp959.69 billion.
  A 24-hour telephone service through Call BRI at        The number of merchants that offered discount
  telephone numbers 14017 or (021) 57 987 400 /          facilities to BRI credit cards holders also increased




                                                                                                                       MANAGEMENT DISCUSSION AND ANALYSIS
  500 017 on a 24/7 basis, including Sundays and         significantly in 2011 reflected in the total volume of
  holidays for any information regarding one’s credit    merchant discount rates (MDR) that grew by 94.74%
  card.                                                  from Rp1.5 billion in 2010 to Rp17.8 billion in 2011.
• Cellphone top-up payment
  Cardholders can make top up payments through           Development Plans in 2012
  out Indonesia to various cellphone operators,          Plans for the continuing development of credit card
  GSM and CDMA.                                          business in 2012 include increasing the business
• Balance transfer                                       potential of the credit card to become in the top 7
  Credit balance from other bank credit cards can        ranking of credit card issuers in Indonesia, to be the
  be transferred to the BRI credit cards with special    preferred choice of card for transactions as reflected
  interest rates.                                        by the number of active cards of up to 80%, and
• Autopayment                                            contributing to increasing fee based income in the




                                                                                                                       CORPORATE GOVERNANCE
  Routine billing payments through automatic             years to come.
  debit of BRI Savings account by pre-registration       Marketing activities and agreements with merchants
  through ATM or BRI Card Center.                        will continue to be enhanced with the aim of
                                                         increasing cardholders convenience as well as the
Performance of BRI Credit Card in 2011                   awareness of cardholders toward the benefit and
The performance of BRI credit cards continued to         advantages of the BRI credit cards.
increase as seen from the growth of returns as well




                                                                                                                       CORPORATE SOCIAL RESPONSIBILITY
as from the increase in the number of issued cards
throughout 2011. As of year-end 2011 BRI had issued
a total of 437,781 cards, an increase of 11.09% from
that of 2010. During 2011 total transaction volume of
BRI credit cards amounted to Rp2,168 billion, and
total interest income amounted to Rp95.28 billion.                     Credit Card Issuance and
                                                            fee based Income from Credit Card Transaction


                                                                                                            438
                                                                                                  389
                                                                                        342                  95.28



                                                                                                                       SUBSIDIARIES
                                                                                                   80.96
                                                                               245       71.45

                                                                    139
                                                                                36.34
                                                                                                                       BUSINESS STRATEGY



                                                                          21
                                                                   2007         2008    2009      2010     2011


                                                                      Number of Card             Fee based Income
                                                                      (in thousand)              (in billion Rupiah)
                                                                                                                       FINANCIAL STATEMENTS
                                                                                                                       OTHERS




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          ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                   103
Corporate Business




 Amid the consolidation policy of BRI in 2011, the Corporate
 Business of BRI grew substantially, backed by selective loan
 disbursement to state-owned and private corporations alike
 that have value-chain links to micro, small and medium-sized                            Doc. PT Pupuk Kaltim (Persero)

 enterprises (MSME).




     104              ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                     FOREWORD
                                                                                                                   COMPANY PROFILE
Over the years the Corporate Business of BRI has           SOe BUSINeSS




                                                                                                                   MANAGEMENT DISCUSSION AND ANALYSIS
continued to grow and has become a segment
that support the business expansion of BRI. From           Considering the existing business potential as well
this corporate segment BRI expects to generate             as the leverage gained from the low risk weighted
a multiplier effect for the Bank’s other business          assets that needs to be measured, the banking
segments, especially the Micro, Small and Medium           services provided to SOE customers are increasingly
business (MSME) segment.                                   larger in proportion than those provided to non-
                                                           SOE customers. In 2010 lending the SOE segment
Every loan disbursement to a major corporation has         accounted for 40.48% of the total corporate loan
the potential of generating other banking services         and this proportion had increased to 57.19% as of
related to the industry’s value chain to which the         year-end 2011.
corporation belongs, such as its vendors and
customers in what is commonly known as the trickle         BRI’s focus on the development of SOE segment has




                                                                                                                   CORPORATE GOVERNANCE
down business potential.                                   also resulted in the increase of third party funds as
                                                           well as fee-based income from cash management
Banking services within the framework of this              service that has also increased.
trickle down business include, among other things,
special scheme loan facilities, cash management,           BRI has developed, marketed and monitored the
and consumer financing facilities to vendors, sub-         business activities of BRI with its SOE customers,
contractors, suppliers, distributors, program partners,    through providing loan facilities, cash management,




                                                                                                                   CORPORATE SOCIAL RESPONSIBILITY
through to the individuals who are employees of the        and transactional banking services. The target
corporation and its subsidiary companies. While            market for SOE business aside from the SOE them
other transactional banking service that continue to       self include, among other things, government/
be developed by BRI include, among other things,           non-government institutions, as well as SOEs’
the host-to-host service, Single Gate Payment,             subsidiaries.
Impress Account, Master Account, bills payment and
the BRI Virtual Account (Briva)                            BRI’s strategy in developing the SOE business
                                                           comprises:
In the development of the Corporate Business,              • Maintenance, to maintain existing SOE
especially with respect to corporate lending, and            customers through communications and loyalty
based on the respective business potential and               programs.



                                                                                                                   SUBSIDIARIES
risk consideration, BRI divides the Corporate              • Win back, to attract former SOE customers to
Business into two main segments, namely the state-           return to BRI through better pricing, customized,
owned enterprise (SOE) business and the non-SOE              communication and loyalty programs.
commercial business. Whereas in managing potential         • Acquisition, to acquire new SOE customers
                                                                                                                   BUSINESS STRATEGY



funding, BRI focuses on developing comprehensive             through a strategy of pricing, customized,
banking services such as cash management                     communication and loyalty programs.
product, visa on arrival service, and production of
the electronic card for civil servants.
                                                                                                                   FINANCIAL STATEMENTS
                                                                                                                   OTHERS




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                                                                                               105
SOe BUSINeSS DeVeLOPMeNT STRATeGY



  SUPPORT STRATeGY                                     BUSINeSS STRATeGY         BUSINeSS TARGeT              GOAL SeTTING



                                                         MAINTeNANCe                 eXISTING
                                                          STRATeGY
             HUMAN ReSOURCeS




                                  ReLeVANT COST &                                   CUSTOMeR
                                                                                                           Tergeting all profitable
               ORGANIZATION


                                    TeCHNOLOGY

                                                                                                                State Owned
                                                           WIN BACK                                        enterprises, potential
                                                                                      fORMeR
                                                           STRATeGY                                        government institution
                                                                                     CUSTOMeR
                                                                                                               as well as non
                                                                                                           government institution
                                                          ACQUISITION            NeW CUSTOMeR
                                                           STRATeGY              LOAN & fUNDING




Performance of SOe Business                                                    Development Plans for 2012
In 2011, there were a total of 142 SOEs in operation                           BRI will continue the strategy that has been
with a combined business revenues of more than                                 implemented over the years in developing the
Rp1.294 trillion.                                                              Corporate Business primarily through the SOE
                                                                               segment in Indonesia.       BRI will continue to
Those figures represent prospective opportunities                              strengthen its penetration strategy of utilizing the
for BRI. As of year end 2011, BRI has cooperated                               SOE as an entry gate way for other BRI businesses
with 107 SOEs, 52 SOEs of which have received loan                             up to micro business segments. With better synergy
facilities with total outstanding of Rp32.16 trillion                          and coordination, BRI expects to leverage on the
and a NPL of 0%. Loan disbursement to the SOEs                                 SOE business at the levels of corporate customers,
accounted for 11.34% of BRI’s total loan portfolio                             commercial down to the individual customers.
with zero NPL ratio.
                                                                               NON-SOe COMMeRCIAL BUSINeSS

                                                                               The target market for the Non-SOE Commercial
                                                                               Business comprises of private corporations with
                                                                               a loan size of above Rp50 billion up to the Legal
                                  Loan to SOe
                               (in trillion Rupiah)                            Lending Limit (LLL) of the Bank.

                                                                               This Commercial Business is divided into two main
                                                                               segments, namely the Agribusiness loan and the
                                                          32.16
                                                                               General Business Loan (non agribusiness).
                                               20.42
                         17.38                                                 1. Agribusiness
     11.76
                                                                                  Considering the huge potential for growth of the
                                                                                  agribusiness sector, BRI continues to strengthen
                                                                                  its contribution into this sector as part of its
                                                                                  Commercial Business. Agribusiness loan is
     2008                2009                  2010       2011
                                                                                  disbursed to either individual or company that is
                                                                                  engaged in agricultural activities whether on farm
                                                                                  or off farm both upstream and downstream.
                                                                                  The on-farm financing covers a wide range of




         106                                        ANNUAL REPORT 2011     PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                   FOREWORD
cultivation activities including plantation, forestry,   2. General Business




                                                                                                                 COMPANY PROFILE
animal husbandry and fishery. Whereas off-                  General Business represents the business sector
farm financing covers businesses that support               of BRI that is aimed at the development of the
agricultural activities such as seed production,            corporate business segment (with loans above
chemicals, pesticide, feed stock and agricultural           Rp50 billion) that is outside of agribusiness and
equipment and machineries.                                  SOE. The development of this business is carried
                                                            out prudently by capitalizing on the service




                                                                                                                 MANAGEMENT DISCUSSION AND ANALYSIS
BRI’s main target in the agribusiness is to                 network of BRI throughout the country and
increase financing for export commodities that              leveraging on the comprehensive range of BRI’s
can compete in the global market.                           treasury and international banking products, in
                                                            order to optimize both interest income and fee
Agribusiness Banking Products                               based income.
BRI continues to disburse loans to the
agribusiness sector in both commercial scheme               In 2011, in addition to expanding the General
and subsidized loans. Business expansion                    Business as one of the growth engine of lending,
through either commercial loans or loans with               BRI also focused more on the oil and gas and
subsidized interest rates, is carried out by                energy sector that was booming due to rapid
optimizing the Loan for the Development of                  development in the energy mining sector along
Biomass Energy and Plantation Revitalization




                                                                                                                 CORPORATE GOVERNANCE
                                                            with the bullish commodity prices of coal, oil and
(KPEN-RP). The KPEN-RP is provided to                       gas. With the increased focus on this sector, BRI
farmers (through cooperatives) and to the core-             formed the Oil and Gas and Energy Desk in 2011
plasma scheme in several selected commodities               with main task to develop business in this sector,
namely oil palm, cocoa and rubber.                          including developing potential fee based income.

For subsidized loan other than KPEN-RP, BRI is           Achievements in 2011
also committed to disburse loan through various          Although BRI focused on the SOE segment in the




                                                                                                                 CORPORATE SOCIAL RESPONSIBILITY
scheme such as the Cow Breeding Business                 development of the Corporate Business, the non-
(KUPS). KUPS is a facility for breeders of cows          SOE corporate segment performed encouragingly.
(whether companies, cooperatives, or groups              Despite the uncertain outlook of global macro
of breeders) that undertake their cow breeding           economics, the quality of BRI’s corporate loan have
business with loans interest subsidies from the          been maintained. This proves that BRI’s strategy of
government.                                              focusing on quality growth has been successful.

In the disbursement of commercial loan scheme,           The growth of non-SOE corporate loans in 2011
BRI continues to provide to the agribusiness             was 2.38%, increasing from Rp23.51 trillion in 2010
sector including the plantation sector such              to Rp24.07 trillion, with an NPL ratio maintained at
as oil palm, rubber, cocoa and their down                2.26%.


                                                                                                                 SUBSIDIARIES
stream industries; the animal husbandry sector
comprising of chicken farm, cow breeding and
shrimp farm. Whereas the trade and industry
sector comprises of pesticide, olio chemicals,
                                                                                                                 BUSINESS STRATEGY



coconut processing, forestry, sugar cane, fish
flour, rice processing and others.
                                                                                                                 FINANCIAL STATEMENTS
                                                                                                                 OTHERS




              107
       ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                            107
Development Plans in 2012                                    closed system financing scheme, that is financing
In developing the Agribusiness and General Business,         activities throughout the industry value chain (up
BRI will continue to undertake the following steps:          to down stream industry) of prioritized product
• Optimizing productivity through BRI’s extensive            and commodities. The Agribusiness development
    delivery channel (via Head Office, Regional Offices      program also includes loan Portfolio diversification
    and Branch Offices) to support the business              aside from Palm oil businesses.
    development and monitoring of potential new
    businesses throughout Indonesia.
• Selection of prospective and non-saturated                 MANAGeMeNT Of CORPORATe fUNDS
    business sectors.
• Focusing        on    business    development      in      The development of BRI’s Corporate Business is
    corporations that have potential trickle down            not only focused on the increased of earning assets
    effect to the medium and retail businesses.              perspective, but also focused on raising third party
                                                             fund as well as the development of transactional
The loan expansion strategy adhered to the                   banking services, to increasing fee based income.
prudential banking principle that are carried out            Therefore, the business activities of corporate
through prompt and effective evaluation of the loan          customers can be valuated based on the their
service by implementing the four eyes principle as           account profitability as a whole.
manifestation of risk management implementation.
BRI also continued to enhanced the quality of its            In order to optimally capture the potential business
account officers as the financial service provider and       of corporate customer, BRI has developed an
professional business advisor.                               institution relation program to provide exclusive and
                                                             continuous services to non-individual customers
With respect to the development of agribusiness              such as government and private institutions that
sector, BRI plans to increase loans by capitalizing          require banking services on a national scale. BRI
on the multiplier effect of financing activities in          plans, coordinates, executes, monitors and evaluates
this sector, for example through the programs                the mobilization of funds from The National and
of     plantation revitalization, bio-mass energy            Regional state budgets that are disbursed through
development, sugar mill revitalization, up to                government ministries, provincial governments,
financing for the MSME business segment and                  universities, pension plans and private corporations
international services. The plan also covers the             to increase the BRI funding base in line with the
                                                             stipulated target.




          108               ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                   FOREWORD
                                                                                                                                 COMPANY PROFILE
BRI is a large Bank in Indonesia, and I am externally interested if BRI is tied with
the business of Pupuk Kaltim (PKT), because we do business to the far reaches
of the country, similar to BRI, whose reach extends throughout Indonesia as
well. BRI has a strong potential to integrate the fertilizer industry as a whole,
from the producer to distributor all the way down to retailers, especially with
respect to the integration of payment process. Because one of the key factor in




                                                                                                                                 MANAGEMENT DISCUSSION AND ANALYSIS
the turn over of fertilizer business is payment process.

The business relationship between PKT and BRI have extended all the way from
the 1990’s. Thus far, our business cooperation with BRI is limited to loan alone.
Currently our loan from BRI amounts to Rp1,6 trillion.

“We are satisfied with the performance and service
that we have received from BRI to date”                                                                         Aas Asikin
                                                                                                         President Director
We have great expectation that BRI could integrate the business flow of PKT                       PT Pupuk Kaltim (Persero)
as a whole, supported by the establishment of holding fertilizer SOE recently. It
would be beneficial to all if BRI could consolidate the overall cash management
of Fertilizer SOE’s such as Pupuk Kujang, Pupuk Sriwijaya, PKT all of which




                                                                                                                                 CORPORATE GOVERNANCE
have been mandated to supply the demand for fertilizer in almost two-third of
Indonesia’s arable land.




                                                                                                                                 CORPORATE SOCIAL RESPONSIBILITY
Achievements in 2011
Supported by extensive infrastructure and diversified                   By the end of 2009, the new BRI CMS had served a
products and services, BRI continues to develop                         total of 241 corporations, which had since grown to
cooperation with numerous institutions. During 2011,                    757 corporations as of year end 2011. The number
there were 40 new institutions that became BRI’s                        of account that are served by this system also
customer.                                                               increased rapidly, from around 2,500 accounts to
                                                                        18,151 accounts in 2011.
Meanwhile, in order to keep up with their pace of
developments of businesses that require banking                         In 2011, BRI enhanced its New Cash Management
products and services relevant to their needs, BRI                      System product, through the development of the
continues to diversify its range of products and                        system itself, comprising of:


                                                                                                                                 SUBSIDIARIES
services as follows:
                                                                        • Installation, renovation and upgrading of server
Cash Management                                                           scalability to anticipate the growth of customers
BRI provides Cash Management Service (CMS)                                number and transaction volume.
                                                                                                                                 BUSINESS STRATEGY



that offers considerable benefits to the corporate                      • Enhancement of the security firewall feature
customers that require prompt and accurate                                as well as Internet communication to expedite
banking transaction services. CMS is an internet-                         access to BRI CMS.
based banking transaction solution that enable                          • Features enhancement/enrichment in the CMS
corporate customers to monitor and undertake their                        general application.
financial transactions online at any time. BRI CMS                      • Development of customized features in the CMS
                                                                                                                                 FINANCIAL STATEMENTS




provides easiness in obtaining account information                        application, including the application of the closed
conveniently from time to time as well as a comfort                       system strategy.
and secured online banking transaction at any time,
therefore it will enable the customers to manage their
financial activities promptly and accurately.
                                                                                                                                 OTHERS




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            ANNUAL REPORT 2011                PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                             109
 Treasury Single Account (TSA)                                  third party fund sources, the facility also provides the
In order to manage the Government budget                        opportunity for increasing fee based income from the
professionally, transparently, and accountably,                 SPMB service itself.
the government has implemented Treasury Single
Account (TSA) at the State Office for Treasury                  The online SPP represents a student payment
Services by involving participants of the Bank                  receipt facility for registered universities through BRI
Indonesia Real Time Gross Settlement System                     online service network. For universities, this system
(BI RTGS System) and participants of the Bank                   expedite payment as well as the management of
Indonesia National Clearing System. To capture this             tuition fees. In addition, students benefitted from the
business opportunity, BRI has participated in the               convenience of paying their tuition fees online.
TSA project.
                                                                Payroll Service
Treasury National Pooling (TNP)                                 The payroll service is a facility within the BRINETS
The Treasury National Pooling (TNP) is a system that            system used for credit payroll automatically from
monitors the position of consolidated balances of               an individual or company account to the savings
all Government outflow treasury accounts in every               account of employees on the stipulated dates.
Branch Office of BRI, without having to transfer
funds between account. This system enables the                  Payment Service
government to monitor the financial balances on all             The State Police of the Republic of Indonesia (Polri)
of its outflow treasury accounts that are registered as         has the authority to issue the Polri PNBP (Polri
accounts within the TNP list, without having to verify          Non Tax State Income) comprising of SIM (Driver’s
each account one by one in every BRI Branch Office.             Licence), STNK (Vehicle Registration), BPKB (Vehicle
                                                                Certificate of Ownership), TNKB (Vehicle Registration
Online Registration of New Student (SPMB) and                   Number), STCK (Certificate of Road Worthiness),
Tuition Payment (SPP)                                           Klipeng (Driver’s Clinic) and Senpi (Fire Arms). BRI
With the aim of increasing BRI’s cooperation with               has been appointed as a receivers bank for the
education institutions, BRI has developed the BRI               above mentioned Non Tax State Income, through
SPMB payment system that can be accessed through                BRI’s Automatic Teller Machine (ATM), Electronic
all BRI operating units vis-a-vis education institution         Data Capture (EDC), and bank tellers.
that have been registered in the system. This system
will ease student in paying their university registration
fees online. Besides providing the opportunity of




                                                                                         Cooperation between BRI and
                                                                                         Universitas Indonesia for online
                                                                                         payment of tuition fee.




          110                ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                     FOREWORD
Payment Point for PDAM Water Utility                       ASABRI – Insurance Benefits




                                                                                                                   COMPANY PROFILE
To support the regional water supply company               Payment of insurance benefits of ASABRI (Insurance
(PDAM) as the provider of clean water for public           for the Armed Forces of the Republic of Indonesia) is
purposes, BRI has entered into an arrangement              facilitated through BRI operating units for those who
with PDAM for cash management and customers                have met all of the terms and conditions.
payment receipt on PDAM utility bills.
                                                           Development Plans in 2012




                                                                                                                   MANAGEMENT DISCUSSION AND ANALYSIS
electronic Civil Servant Card (KPe)                        Considering the huge potential of the Institutional
KPE is an identity card for the Indonesian civil servant   Business, the development strategy of BRI includes
corps that electronically stores the data of individual    optimizing existing cooperations with institutional
civil servants and their families. KPE is provided to      customers, optimizing existing service network and
every civil servants and remains valid even after          electronic channels, enhancing the quality, function
the individual has retired. As for the spouses and         and role of the BRI Executive Relationship Officer
children of retirees, they are provided with KPE           and expanding the business into the national and
supplements. In addition to functioning as an              multinational private sector.
employment card, KPE also functions as the ASKES
card (health insurance). TASPEN card (pensions             For 2012, product development will still focus on the
benefit), Bapertarum card (housing facilities), and        enhancement of BRI’s cash management system
banking card (for payroll and ATM services through         and the addition of features that can accommodate




                                                                                                                   CORPORATE GOVERNANCE
BRI banking network).                                      the needs of customers. In anticipation of this
                                                           business growth, BRI will also increase the number
Immigration Visa on Arrival (VoA)                          and quality of human resource and improve the
The Visa on Arrival (VoA) is visa that is granted by       system and procedure of its cash management
immigration officials in certain immigration check         service. In terms of marketing, BRI will focus on
points to foreign nationals entering Indonesia. BRI        existing as well as potential new customers.
provides payment service counters and manages the




                                                                                                                   CORPORATE SOCIAL RESPONSIBILITY
fund receipts of the VOA on behalf of the Immigration
Office of the Republic of Indonesia.




                                                                                                                   SUBSIDIARIES
                                                                                                                   BUSINESS STRATEGY
                                                                                                                   FINANCIAL STATEMENTS
                                                                                                                   OTHERS




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                                                                                               111
International Business




  BRI continues to develop its International Business in the effort to become
  the Best Foreign Exchange Bank that focuses intensely on achieving
  customer satisfaction through the services of trade finance, remittance,
  money changer and other international banking products and services.
  The development of the International Business portfolio is aimed at                           BRI New York Agency
  serving the needs of customers, both exporters and importers, other
  corporations in Indonesia and their overseas counterparts, as well as
  international correspondent banks.




     112               ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                     FOREWORD
                                                                                                                   COMPANY PROFILE
Trade finance Business of BRI is one of source            Efforts to increase the quality of trade finance




                                                                                                                   MANAGEMENT DISCUSSION AND ANALYSIS
of fee based income. Trade finance transactions           products and services were also undertaken by
contributes to BRI’s other businesses whether in          centralizing the trade finance processing service
loan expansion or as a means to increase end-to-          through the establishment of the Trade Processing
end services to the customers.                            Center that is expected to facilitate trade finance
                                                          operations to be more swift, efficient and accurate.
Trade finance services and other customer needs are
also the reasons behind the establishment of BRI’s        Remittance Business
overseas operating units that now comprise of the         As a bank that has the broadest service network
BRI New York Agency, BRI Cayman Island Branch             in Indonesia supported by the extent of its
and Hong Kong Representative Office.                      correspondent bank network throughout the world,
                                                          BRI can facilitate remittance services to both
Development Strategy for International Business           individual and corporate customers. It is reflected in




                                                                                                                   CORPORATE GOVERNANCE
                                                          the number and amount of transactions that continue
Trade finance                                             to increase. The increase is as the results of BRI’s
Despite the weakening of global economic condition,       effort in cooperating with counter parties, whether
especially in mid 2011, BRI trade finance showed          banks or non bank financial institutions that have
positive growth, marked by increases in the amount        extensive network overseas and used to facilitate
of export-import transactions.                            import transaction settlements and collection of
                                                          export proceeds. BRI’s remittance service also




                                                                                                                   CORPORATE SOCIAL RESPONSIBILITY
The increase was attributed to BRI’s efforts to           facilitates incoming/outgoing individual remittances
develop its trade finance products to facilitate          for Indonesia migrant workers overseas and other
customers’s      export-import       transactions.  In    customers.
marketing its trade finance products and services
to existing and potential customers, BRI stepped          For the remittance business that is focused on
up its marketing program through advertisement            transferring money from overseas to Indonesia
placement in various media, expanded cooperations         by Indonesia migrant workers, BRI has utilized its
with correspondent banks and financial institution,       cooperation with counter parties spread across
held exhibitions and sponsorships programs at             destination countries of these migrant workers,
home and abroad and continued to build active             including with several local remittance companies.
communication with business partners through              In selecting these counter parties, BRI considers the



                                                                                                                   SUBSIDIARIES
business gathering or customers gathering as the          bonafidity of the companies, their marketing network
medium of communication between the Bank’s                and market shares.
corporate customers and their customers or vendors,
in addition to providing training to increase customer    In addition, BRI has placed Remittance
                                                                                                                   BUSINESS STRATEGY



loyalty.                                                  Representative Officers who are in charge with the
                                                          responsibilities of developing the remittance business
Other strategies devoted to the development of            through direct marketing effort and fostering closer
International Business include the revitalization of      ties with counter parties in destination countries. As
HR, enhancement of products and services as well          a beginning, BRI has assigned its representatives in
as supporting systems. BRI recruited Trade Finance        Riyadh (Arab Saudi), Abu Dhabi (UAE), and Kuala
Officer as marketers in BRI Regional Offices that         Lumpur (Malaysia).
                                                                                                                   FINANCIAL STATEMENTS




have a high potential for trade finance transactions,
as part of market penetration and the effort to
increase service quality to customers.
                                                                                                                   OTHERS




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          ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                              113
Correspondent Banking                                                   Money Changer Business
The broad correspondent banking network of BRI                          To support the development of money changer
extends virtually throughout the world. BRI has                         business, in addition to cooperating with
cooperated with major banks in North America,                           correspondent banks, BRI has also forged close
Europe, Australia, Asia and Africa.                                     ties with local money changers for deposit and
                                                                        withdrawal of bank notes.
The function of BRI’s correspondent banking
network is varied, ranging from fulfilling customers                    In 2011, BRI undertook an information dissemination
need to gaining opportunity to capture fee based                        program for the money changer business in several
income. Through correspondent banking, BRI                              highly potential regions. The money changer
undertakes the discounting of L/Cs issued by the                        business also capitalized on momentum gained from
correspondent banks and issues guarantees with a                        the SEA Games event in Palembang. In addition to
counter guarantee from the correspondent banks. In                      that, BRI supplied its money changer services with
addition, with the broad network of correspondent                       SAR and USD bank notes during the Haj pilgrimage,
banks, BRI can easily access foreign currency                           to meet the demand of the haj pilgrims. This include
sources for the benefit of customers.                                   opening temporary counters at haj embarkation
                                                                        points throughout Indonesia to facilitate sales of SAR
BRI has cooperated with correspondent banks in                          and USD bank notes.
the business of export-import bank notes. This
cooperation supports the development of BRI’s                           Products and Services
money changer business, as well as ensuring the
supply of Saudi Arabian Riyal (SAR) notes for the Haj                   BRIfast Remittance
pilgrims in 6 embarkation points in Indonesia.                          BRIfast Remittance is a web based remittance
                                                                        service. The advantage of BRIfast Remittance is that
BRI constantly strive to develop its business with                      money remittances from overseas can be received
correspondent banks throughout the world in the                         in Indonesia in a matter of seconds. Another
issuance of bank guarantees or Standby L/Cs (SBLC)                      advantage of the web based system is that the
with counter guarantee or counter SBLCs from                            application do not have to be installed in every PC at
the correspondent bank. BRI has also undertaken                         the counter party and its network. Therefore, through
cooperation in risk participation and provision of                      this application will ease counter parties to carry out
offshore funding.                                                       BRIfast Remittance through the Internet.




             frequency of Remittance Transaction                                                    Remittance
                        (in thousand)                                                            (in trillion rupiah)

                                                                                                                                      200.10

                                                       812


                                                                                                                        136.60


                                          520                                               101.77         97.72                 109.64
                                                                                                                    97.23
                                                                                                      84.47
                                                                              65.49
                             267

                177                                                                    40.29
131                                                                       30.51
                                                33            34
        13              16         22


 2007              2008            2009         2010         2011            2007          2008          2009           2010          2011


             Incoming          Outgoing                                               Incoming             Outgoing




              114                  ANNUAL REPORT 2011               PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                    FOREWORD
Other products and services of BRI’s International        Import Transactions




                                                                                                                  COMPANY PROFILE
Business include the following:                           Overall import transaction by BRI has also shown an
• Issuance of Letter of Credit (L/C) and Domestic         increasing trends. In 2011, BRI’s import transaction
  Letter of Credit (SKBDN) including amendment of         reached USD22.7 billion, a significant rise of 54.58%
  the two products.                                       from USD14.68 billion in 2010.
• Advising L/C and SKBDN
• Post shipment financing (Export Bill Negotiation        The development of BRI’s export-import transactions




                                                                                                                  MANAGEMENT DISCUSSION AND ANALYSIS
  and Discounting of) L/C or SKBDN                        has shown significant growth. This has been marked
• Bill Purchase                                           by an equally significant fee based income growth
• Standby L/C, Guarantee, and Counter Guarantee           from export-import transactional services.
• Trust Receipt (TR)
• Refinancing L/C (Sight/Usance/UPAS/Usance               Remittance Business
  Payable at Usance) and Non-L/C                          The cooperation with several banking institution
• Money Changer                                           includes the opening of BRI Nostro account in various
• Inward/Outward Remittance                               currencies in correspondent bank depositories
• Inward/Outward        Documentary     Collection        that can be used to facilitate the transaction of BRI
  (Document Against Payment and Document                  customers. Currently, BRI is actively transacting
  Against Acceptance)                                     in 13 foreign currencies namely USD, EURO, GBP,
• Inward/Outward Clean Collection                         SGD, AUD, CAD, HKD, JPY, SEK, CHF, SAR, AED,




                                                                                                                  CORPORATE GOVERNANCE
• Others.                                                 and RMB through 30 Nostro accounts in several
                                                          correspondent bank depositories.
Achievement and Development of the
International Business                                    BRI excellence in facilitating of foreign currencies
                                                          transaction has won the recognition of the STP
export Transaction                                        (Straight Through Processing) Award from the Bank
BRI’s export transactions has continued to grow over      of New York Mellon, New York for the past two




                                                                                                                  CORPORATE SOCIAL RESPONSIBILITY
the years. This export transaction is largely served      consecutive years.
through telegraphic transfer (TT), accounting for
85.4% of the total export transactions. Throughout
2011, the total amount of export transactions using
L/C collection and TT, reached USD12.41 billion, an
increase of 23.23% from USD10.07 billion in 2010.




                export Transaction                                         Import Transaction




                                                                                                                  SUBSIDIARIES
                    (in billion USD)                                          (in billion USD)


                                                                                       22.70
                                                                                                                  BUSINESS STRATEGY




                             12.41                                             14.68
                    10.07
                                                                                                                  FINANCIAL STATEMENTS




                    2010     2011                                              2010    2011
                                                                                                                  OTHERS




               115
         ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                 115
The performance of BRI remittance product in                Starting in mid 2011, BRINYA has become a member
nominal funds transferred has consistently shown a          of Fed Wire in the United States to provide a fast,
growing trend over the years, both for incoming and         secure, and cost competitive funds transfer facility
outgoing remittances. The total number of remittance        between clearing members of Fed Wire in the United
transaction in 2011 increased significantly by              States, for both individual and corporate customers.
52.82% to 846,964 transactions over that of 2010.
The Bank’s fee based income from remittances
increased accordingly with the increasing number of
transactions.                                                            BRI New York Agency Asset
                                                                             (in million US Dollar)
Correspondent Banking
As of 2011, BRI has developed cooperation                                                                    604.72
                                                                                                 524.12
of correspondence with approximately 1,200
correspondent banks in more than 100 countries
throughout the world. Supported by a wide offshore
correspondent bank network, BRI is well positioned
to provide the best trade finance services to                                         245.91

customers.
                                                              154.10      156.70



                                  Relationship
                                  Award 2011 from
                                  COMMERZBANK AG
                                                              2007        2008        2009        2010        2011


                                                            BRI Cayman Island Branch has actively issued import
                                                            L/C on behalf of non resident customers. In addition,
                                                            the branch also function as a booking office for loans
                                                            to institutional customers that require export loan.

                                                            BRI Hongkong Representative Office serves
                                                            to coordinate business activities and collect
Offshore Operating Unit                                     informations relevant to investments and business
As part of business development, BRI New York               opportunities in the interest of bilateral trade relations
Agency (BRINYA) provides trade finance services             between Hong Kong and Indonesia, and promote
including funding for L/C refinancing as well as bill       export-import between the two markets.
rediscounting that constitute redemption of usance
export bills to help the cash flows of BRI customers.
BRINYA is also active in providing loan for trade
finance needs and working capital.

BRINYA undertakes syndicated loan financing for
US and Indonesian multinational companies as part
of the efforts to build up the earning asset portfolio
of BRINYA. In addition, BRINYA has also financed
the government of Indonesia with an offshore loan
scheme, as part of BRI’s commitment to support
the Indonesian government program. These
development efforts has had a positive impact
towards the performance of BRI.




         116               ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                  FOREWORD
Development Plans in 2012                                 • Increasing the level of service quality for




                                                                                                                COMPANY PROFILE
To increase its competitiveness in trade finance            remittance by developing a remittance delivery
services, remittance, and money changer, BRI                system application integrated in a multi platform
continuously develops and improves its International        with various counter parties, is fully automated
Business comprising of:                                     (less human intervention), and can be operated as
• The BRI Trade Processing Center (TPC)                     a straight through processing system.
• Net Domestic Letter of Credit (SKBDN)                   • Expanding the cooperation with correspondent




                                                                                                                MANAGEMENT DISCUSSION AND ANALYSIS
   Application.                                             banks and money changers especially in
   The application of Net SKBDN is a web based              supplying bank notes as well as the cooperation
   application technology, enabling BRI to provide a        with corporations and institutions to support the
   fully integrated end-to-end service for customers.       money changer business development.
• Bill-Purchase Net-system                                • Establishing special money changer operating
   This is a single track web-based integrated service      unit outside of existing money changer service
   for bill purchase financing, designed to speed           unit (off site money changer unit).
   up the process and make it easier for all related      • Developing       products    for    correspondent
   parties in the bill purchase financing activities.       banking such as unfunded/funded risk sharing
• Expanding the offshore remittance business                participation (including forfeiting), confirming
   network by linking with correspondent banks or           bank, advising bank, depository correspondent,
   remittance companies as well as establishing new         guarantee/Standby Letter of Credit.




                                                                                                                CORPORATE GOVERNANCE
   offshore networks.
• Adding to the number of Remittance
   Representative Officer (RRO) offshore, especially
   in the Asia regions to increase market penetration.




                                                                                                                CORPORATE SOCIAL RESPONSIBILITY
                                                                                                                SUBSIDIARIES
                                                                                                                BUSINESS STRATEGY
                                                                                                                FINANCIAL STATEMENTS
                                                                                                                OTHERS




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          ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                            117
Treasury and Capital Market Services




  BRI’s Treasury Business is responsible for managing the
  bank’s liquidity and market risk as they affect the Bank’s
  assets and liabilities. In addition, BRI also develops and
  offers money market products and services that are
  competitive and supported by professional personnel such
  as trustee and custodian services, payment/escrow agent,
  selling agent of mutual fund, government retail bond (ORI),
  government Islamic term notes (Sukuk) as well as Financial
  Institution Pension Plan services (DPLK).




     118              ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                         FOREWORD
                                                                                                                       COMPANY PROFILE
Treasury

To provide optimum services in Treasury and Capital        The strategy to place the Bank’s excess liquidity




                                                                                                                       MANAGEMENT DISCUSSION AND ANALYSIS
Market services, BRI undertakes the following              in 2001 included investing in government bonds,
measures:                                                  corporate bonds, inter-bank placements, Bank
                                                           Indonesia money market instruments, and short-term
• Managing liquidity as well as source and use of          lending in the form of money market lines to SOEs.
  Bank funding along with managing market risk in          Efforts to maximize use of excess liquidity remained
  a professional and well-planned manner.                  in line with prudential aspects and the fulfilment of
• Executing trading whether arbitraging, market            BRI’s internal liquidity requirements.
  making or proprietary trading by adhering to
  prudential principles and exercising trading limits      In facing the increasing competition in bank loan
  in a disciplined manner.                                 rates, especially in corporate lending, the reduction
• Carrying out credit assessment to seek for               of Bank Indonesia’s benchmark interest rate and
  investment opportunity in financial instrument or        yield on government bonds, BRI was forced to seek




                                                                                                                       CORPORATE GOVERNANCE
  through equity participation.                            for ways to reduce its cost of funds. Measures taken
• Providing capital market products and services           included lowering the cost of deposit funds that are
  to either for internal operating units of BRI or for     not sensitive to changes in the interest rate, such
  customers by offering competitive rates.                 as savings and demand deposits; and periodically
• Developing financial product and services in both        monitored the composition of low-cost funds versus
  the capital market and money market to gain fee          high-cost funds in line with Bank targets. Through
  based income.                                            these strategies, BRI expects to be able to maintain
                                                           sustainable growth on net interest margin (NIM) and




                                                                                                                       CORPORATE SOCIAL RESPONSIBILITY
In general, managing the Bank’s assets and liabilities,    other performance targets of BRI.
liquidity, market risk as well as managing capital
usage are aimed to increase the profitability and          To serve customers’ need for foreign currencies, BRI
sustainability of the Bank.                                carries out foreign currency transactions. It also offers
                                                           hedging coverage to customers through currency
During the financial and economic turmoil in Europe        forward and swap transactions. To complement its
and the US throughout 2011, the capability of BRI in       foreign currency services, BRI regularly provides
managing its assets and liabilities was key to improve     updated information services on movements in
performance. The volatility of currency exchange           the currency market through e-mail as well as on
rate throughout 2011 became a challenge for BRI to         currency exchange rates information through SMS



                                                                                                                       SUBSIDIARIES
position itself correctly to protect its balance sheet     blasts to customers.
structure. The function of Treasury in mitigating risks
from foreign exchange currency can be seen from
the net open position of the Bank that has never
                                                                                                                       BUSINESS STRATEGY


surpassed limits set by Bank Indonesia and the
Bank’s own treasury policy.
                                                                                                                       FINANCIAL STATEMENTS
                                                                                                                       OTHERS




                119
           ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                 119
Capital Market Services                                      selling agent for each issue of ORI and Retail Sukuk.
                                                             These activities are aimed to gain fee based income
The growing range of investment alternatives in              coming from the sales.
Indonesia today has made it possible for customers
to invest not only in the money market but also in the       Custodian Services
capital markets. BRI serves to bridge the needs of its       BRI has served as a Custodian Bank since 1996
customers to invest in the capital market. Not limited       by managing several securities in custody whether
to investment purposes alone, BRI also provides              script or scriptless, including local securities as
investment banking services to corporations seeking          well as those that are traded internationally (global
to raise capital by issuing debt securities in the           custodian). The custodian service of BRI include the
capital market.                                              mutual funds management, comprising of several
                                                             types of mutual funds and pension funds.
Trust and Selling Agent
BRI provides service as trust and selling agent.             BRI’s custodian services continue to innovate and
Through the function of trustee, BRI can act as              develop the features of its products and services
custodian, payment agent and guarantee agent                 in fulfilling customers needs. BRI custodian has
in the issuance of securities by issuer. Throughout          become a trustworthy custodial bank to manage
2011, the amount of securities issued and managed            the first asset securitization in Indonesia, namely
by BRI as trustee amounted to Rp27.26 trillion. BRI          the KIK-EBA DSMF 01 and KIK-EBA DSMF 02. In
will continue to work closely with counter parties in        addition BRI Custodian also manages the assets of
the capital market to develop the trust services.            Limited Investment Mutual Funds at the request of
                                                             an institutional client, becoming the payment agent
                                                             in the administration of debt securities to act as
In its role as selling agent, BRI markets investment         escrow agent.
products including mutual funds, government
bonds (ORI) and Retail Sukuk (Islamic Term Notes).           In 2011, assets under management by BRI
In cooperation with eight investment managers,               Custodian increased by 20.10% to Rp39.98 trillion,
currently BRI markets 16 mutual funds products               from Rp32.94 trillion in 2010. In line with the growth
with a main target market focused on BRI Priority            of assets under management, fee based income
customers. In addition, in 2011 BRI was appointed            increased by 14.47% (yoy) from Rp13.88 billion in
by the government as a selling agent for ORI008 and          2010 to Rp16.23 billion in 2011.
the Retail Sukuk Serie SR003.

The marketing of ORI and Retail Sukuk is served
through all Branch and Sub-branch Offices across
Indonesia. By capitalizing of the breadth of the
marketing unit, BRI strives to constantly hold the
trust of the government as the selling agent or sub-




                Assets under Trustee                                          Assets under Custodian
                  (in trillion Rupiah)                                           (in trillion Rupiah)



                       27.29            27.26                                                          39.98
                                24.98
                                                                                               31.94
                                                                                       28.80
       14.04   13.69
                                                                      14.40    13.40




        2007   2008    2009     2010    2011                           2007     2008   2009    2010    2011




         120                   ANNUAL REPORT 2011        PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                                                                        FOREWORD
In connection with the efforts to improve service                 and Sub-branch Office networks that are spread




                                                                                                                                                                                      COMPANY PROFILE
quality, BRI continues to develop Client Information              across the archipelago, the service can reach a
Module system, a web based information system                     broader segment of the public providing the benefits
that served for both inquiry means and the online                 of old-age prosperity by becoming a member of the
dispatch of transactional instruction by the BRI                  pension plan. Payment for the DPLK contribution
Custodial customer.                                               can be done routinely or non-routinely, whenever
                                                                  and wherever through the SMS Banking and ATM




                                                                                                                                                                                      MANAGEMENT DISCUSSION AND ANALYSIS
financial Institution Pension fund                                network of BRI.
The Financial Institution Pension Fund (DPLK) BRI
manages a fixed contribution pension plan that                    Historically, “The BRI Pension Plan Investment”
was formed by BRI on 9 January 2006. The product                  product, has produced investment returns that are
of DPLK BRI, billed as “the BRI Pension Plan                      very competitive. During the global economic turmoil
Investment” is open to public for either individual               that also affected the capital market conditions
members or group of employees of a company.                       in Indonesia, the performance of the BRI DPLK
                                                                  Investment in 2011 continued to generate positive
As a pension plan manager, DPLK BRI has a vision                  results:
to become the market leader in the pension plan                   • The rate of return from the DPLK Money Market
industry that emphasizes customer satisfaction while                 Investment was 8.72% (yoy), well above the
also contributing to fee based income for the Bank. To               average one-month term deposit interest rate of




                                                                                                                                                                                      CORPORATE GOVERNANCE
that end, DPLK BRI manages long term investments                     5.77%.
prudently that provide optimal returns, manages                   • The return on the DPLK Fixed Income Investment
investments professionally and transparently,                        was 11.16% (yoy), higher than the average yield
creating a better future for members of DPLK BRI.                    from five-year government bonds of 7.05%.
“The BRI Pension Plan Investment” offers four                     • Whereas the return on DPLK Equities was
choices of investments, namely: the Money Market                     4.57% (yoy), better than the performance of
Investment Package, the Fixed Income Investment                      the Indonesian Composite Stock Price Index of




                                                                                                                                                                                      CORPORATE SOCIAL RESPONSIBILITY
Package, the Equities Investment Package and the                     3.20% during the year.
Combination Investment Package (combination of
money market and or fixed income and or stocks                    The fee based income contribution of the BRI DPLK
instruments).                                                     to BRI as the founder in 2011 amounted to Rp14.17
                                                                  billion, an increase of 40.30% from Rp10.10 billion in
The advantage of “the BRI Pension Plan Investment”                the previous year. Total assets under management
is that it is managed using modern concept with                   of BRI DPLK as of 31 December 2011 amounted to
net asset values that are published daily in national             Rp2.09 trillion, an increase of 49.28% from Rp1.40
newspaper and the website www.investment.bri.                     trillion in December 2010.
co.id. While the comparative advantage of “The BRI
Pension Plan Investment” against its competitors



                                                                                                                                                                                      SUBSIDIARIES
                                                                       Return from BRI Pension Plan Investment
is the broad marketing network of this product. By                                 and Benchmark
capitalizing on the breadth of BRI’s Branch Office
                                                                                                          11.16%
                                                                                                                                                                                      BUSINESS STRATEGY




           Assets under BRI Pension Plan                                 8.72%
                       (in trillion Rupiah)

                                                                                                                               7.05%

                                              2,09                                            5.77%
                                                                                                                                Five-Year Government Bonds




                                                                                                                                                                                      FINANCIAL STATEMENTS




                                                                                                                                                             4.57%
                                     1,40
                                                                          DPLK Money Market




                                                                                                           DPLK Fixed Income




                           1,18                                                                                                                                               3.20%
                8,88
                                                                                                                                                              DPLK Equities




         0,67
                                                                                               Deposits




                                                                                                                                                                              JCI




         2007   2008       2009      2010     2011
                                                                      Money Market Fixed Income                                                                   Equity
                                                                                                                                                                                      OTHERS




                121
          ANNUAL REPORT 2011                   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                                             121
OPERATIONAL REVIEW

Human Resources




  BRI adopts corporate values consists of integrity, professionalism,
  customer satisfaction, leadership and respect for individual to
  become the basis of thought, action as well as behavior of each
  and every BRI individual until it becomes a solid and characterized
  corporate culture. Those corporate culture will serve as a guide
  for employees’ attitude either personally or professionally to
  continuously perform while adhering to the internal and prevailing
  rules and regulations, so that all employees have the risk awareness
  culture and always strive to increase service quality in every working
  unit.




     122               ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                         FOREWORD
                                                                                                                       COMPANY PROFILE
BRI HUMAN ReSOURCeS




                                                                                                                       MANAGEMENT DISCUSSION AND ANALYSIS
To support business development, the HR
management continuously undertakes development                  BRI Human Resources
of BRI human resources through a series of                      Architecture is implemented
integrated activities in the framework of the BRI
HR Architecture. BRI HR Architecture comprises
                                                                based on competency and
of the activities of planning, recruiting, developing,          supported by accurate
retaining and maintaining, managing performance
                                                                information system
and terminating. Those activities are undertaken on
the basis of competence and supported by a reliable             management.
management information system.




                                                                                                                       CORPORATE GOVERNANCE
The management of HR is divided into an action plan
road map that is reformulated every five years. The         •   Permanent employee, through the Staff
road map is reviewed and adjusted to the needs of               Development Program (SDP) with objective to
BRI from one year to another. The action plan road              prepare future leaders of BRI.
map for HR management in the year 2011 and 2012             •   Contract workers, for certain job positions
are as follows:                                             •   Outsourcing for auxiliary functions (non core
                                                                business)
                                                                Special hiring to fill position in new developed




                                                                                                                       CORPORATE SOCIAL RESPONSIBILITY
• Accelerating and sustaining the recruitment and
  selection process to fulfill HR needs                         business that can not be filled by internal
• Determining the talent pool policy as part of steps           sources.
  in establishing BRI Talent Management System.
• Improving the policies of grading system based on         To obtain candidates that matched with the required
  strategies as follows:                                    qualifications, BRI undertakes a recruitment
   - Career development                                     and selection acceleration strategy without
   - Compensation                                           compromising the quality of candidates, among
   - Disciplinary rules                                     others by delegating the recruitment authority to
                                                            the Regional Office level, participating in job fairs
Through HR management, BRI expects to create                organized by leading universities, and providing a



                                                                                                                       SUBSIDIARIES
professional work forces with qualification in line with    career opportunity for outsourced workers that show
the dynamic changes in banking business. Therefore          excellent performance to participate in the selection
BRI’s HR productivity can be achieved optimally to          process to become a permanent employee of BRI.
support the success of Bank’s strategies as well as
                                                                                                                       BUSINESS STRATEGY


its objective.                                              The objective of recruitment and selection process
                                                            is prioritized to fill the positions in marketing forces
Human Resources Management and Development                  (Account Officer/AO, Funding Officer/FO, Micro
The management of HR is carried out in line with the        Loan Officer and others). Throughout 2011, BRI
designated action plan road map that covers the             recruited 11,464 people comprising of
followings:                                                 • Staff Development Program : 357 personnel
                                                            • Marketing forces                    : 2,050 personnel
                                                                                                                       FINANCIAL STATEMENTS




Recruitment and selection                                   • Support forces                      : 9,057 personnel.
The fulfillment of competent HR in line with the
Bank’s needs is carried out through either promotion        Personnel Training and Development
and rotation of staff or recruitment and selection as       The employee career development system of BRI
follows:                                                    is based on competencies. Each position has
                                                            a certain competency profile consisting of soft
                                                                                                                       OTHERS




                 123
          ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                  123
competencies and hard competencies in line with              Considering the vast working network of BRI with its
the characteristics and complexities that reflect            huge geographical spread covering areas of diverse
the weight of each position (job grade). As such,            cost of living, BRI has identified these differences in
the career development of employee considers the             living cost that are classified into a number of zones
correlation between the person grade and the job             affecting the amount of compensation of employees
grade, or what is commonly referred to as the job-           in the respective zones.
person match. In 2012, BRI reorganized job positions
in accordance with the job-person match principle            Industrial Relation and Corporate Culture
by evaluating performances against assessment                In creating a corporate culture based on risk culture,
results of each individual.                                  there has been an enhancement in the Employee
                                                             Discipline Regulation, in which all employees of BRI
BRI also develops personnel who have special                 are encouraged to act in line with the principles of
talents and achievements, and prepares them for              the Bank’s corporate culture in all business activities
leadership positions or to fill in strategic positions       to establish risk awareness embedded in those
through:                                                     activities.

• a talent pool system that develops the skills and          In 2011, the acculturation of the values of the Bank’s
  abilities of specially talented personnels in a            corporate culture focus on the services aspect to
  systematic and continuous program through job              enhance the quality of services to both external
  enrichment, training, coaching and others. The             (customers) and internal parties, as well as the aspect
  talent pool system is continuously developed in            on the development and implementation of the Code
  line with the development of other related policies,       of Ethics as part of Good Corporate Governance.
  including the supportive IT system as part of the          For the effectiveness of its implementation, the
  Talent Management System Structure.                        Bank provides the broadest opportunities to its
                                                             employees to participate in monitoring the process
• provide opportunities for employees to enrol in a          of Good Corporate Governance being implemented
  post graduate degree program abroad.                       consistently by the Bank by reporting every violation
                                                             through a Whistle Blower System.
• develop online performance management system
  (PMS), with a standardized key performance                 Considering that banking activities are based on
  indicator to evaluate objectively and monitor              trust, BRI is highly concerned over the integrity of
  periodically against the performance of the Bank.          employees, and their adherence to working rules
                                                             and regulations as well as the principles of prudential
• Build and develop the IT system to support                 banking in their daily banking operational activities.
  execution of HR management policies.
                                                             Industrial relation that are harmonious, aligned and
employee Welfare                                             balanced between the Bank and its employees, on
Compensation is structured fairly, competitively,            the basis of partnership, are continually maintained
and in a simplified yet dynamic way in line with the         and enhanced in the framework of realizing the vision
needs and growth of the business as well as the              and mission of BRI. Management employs open
Bank’s financial capacity. The compensation system           communication with the Workers Union, as a means
is built to compete for the best talent in the market,       to receive feedbacks and strategic ideas to the
retain the best personnel and motivate employees to          management in the interest of the Bank’s business
perform exceptionally.                                       progress and development.

In line with the implementation of the person grade,         In that context, in 2011 the fifth Collective Working
to complement the implementation of the job grade,           Agreement had been signed between management
BRI has improved its compensation system that was            and the Workers Union to cover the period of
based on a job grade weighting to one that is based          2011-2013.
on both job grade and person grade weighting.
This has made the compensation system more fair
because it recognizes both the individual grade and
the grade of his or her duties and responsibilities.




         124               ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                        FOREWORD
education and training                                      Preparing future leaders of BRI




                                                                                                                      COMPANY PROFILE
Human resources are key assets for the success of           BRI develops and implements special education
any bank. Reliable and competent human assets               program dedicated to candidates of BRI future
are keys to the sustainable growth of the banking           leaders through Staff Development Program (PPS).
business.                                                   This program is fully aligned with the business
                                                            continuity of BRI going forward.
In the areas of education and training, the year 2011




                                                                                                                      MANAGEMENT DISCUSSION AND ANALYSIS
becomes the moment to step further in the efforts           PPS represents an intense and challenging
to improve the education and training system for            education program for the trainees. For a period
employees that had begun since 2010. A number of            of 12 months the candidates are equipped with
changes that had been undertaken, were continued            various knowledge that will form the knowledge
and enhanced further in 2011. These changes                 base for their subsequent career development. The
include work mechanism, program development                 trainees are also equipped with the soft skills of a
and the delivery system for education as well as            banker. Training is provided in various forms, from
the development of the educational supporting               class room education to on the job training in branch
infrastructure.                                             offices, culminating in a comprehensive test in front
                                                            of the Board of Directors.
BRI has enhanced the organization structure that is
responsible for the development and implementation          As of year end 2011, BRI has trained 2,332




                                                                                                                      CORPORATE GOVERNANCE
of the education and training system for employees.         candidates, consisting of the best graduates from
With these improvements, education and training are         leading universities across Indonesia and internal
expected to be more evenly distributed, effective,          staff who has passed the PPS selection process.
efficient and up to date, in line with the Bank’s
business development.                                       Participants of the Staff Development Program
                                                                                         Within
                                                                           Total
The use of advanced technology has created more                   PPS                   education      Graduates
                                                                        Participant




                                                                                                                      CORPORATE SOCIAL RESPONSIBILITY
effective and efficient education programs throughout                                    Period
2011, both in terms of educational facilities as well as     General          1,913              722        1,191
the implementation of the training. The digitalization       Auditor            232              140            92
and development of library materials, development            IT                 187               97            90
of e-learning, development of the website of the
                                                             Total            2,332              959        1,373
BRI Education and Training Center as well as back
office automation have been in progress since 2011.         Post Graduate education Overseas for Selected
In addition, innovative developments of educational         Staff
contents were also applied by inviting business             In line with the efforts to prepare future leaders, BRI
practitioners as speakers in the program “Morning           also has sent selected staffs to pursue Master degree
Talk” that discussed various current issues in line         in various major programs at various top universities



                                                                                                                      SUBSIDIARIES
with the need of BRI business.                              overseas. During 2010-2011, BRI sent 22 of its best
                                                            staffs to universities in Australia, USA and UK.
Throughout 2011, the number of employees enrolled
at in BRI Education and Training Center in Jakarta          Training and enhancement Program for Marketing
                                                                                                                      BUSINESS STRATEGY



as well as in other six regional educational centers        forces
amounted to 232,598 employees. This indicates that          BRI exerts all efforts to prepare its human resources
on average each BRI employee receive 3.3 times of           to possess ability to support BRI business
training in a year.                                         development. In addition to education that is
                                                            dedicated to prospective future leader, BRI also
                                                            equips its marketing forces, namely Account Officers
                                                            and Funding Officers with the appropriate skills and
                                                                                                                      FINANCIAL STATEMENTS




                                                            knowledge. Enrichment trainings for the Associate
                                                            Account Officer (AAO) were provided to 997 trainees,
                                                            covering basic knowledge on loans and related
                                                            topics to loans such as legal issues, insurance and
                                                            others.
                                                                                                                      OTHERS




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          ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                 125
In 2011, a pilot project of advanced education                In funding side, BRI has also designed and
program for AOs with more than 2 years of working             implemented training program for FOs. Throughout
tenure has been initiated. Through this program, the          2011, a total of 2,256 Funding Officers were trained
AOs will be equipped with the skills of marketing,            in a program that referred to the blue print of the
sales, services as well as people skills. Evaluation          business training program.
and improvement to the curriculum is continuously
undertaken to align the training program with the
business’ needs in the field.                                 Training for Branch Manager and Deputy Regional
                                                              Office Manager
Enhancement trainings for frontliners at branch               The intensive education and training programs for
offices as well as BRI Units were also carried out            AO and FO will be less than effective without training
in line with business expansion. Throughout 2011,             for their leaders. To that ends BRI also carries out
these trainings were carried out in six Learning              training program for branch managers and deputy
Centers for a total of 15,927 personnel.                      regional managers, which also include special
                                                              briefing and direction from the Board of Directors.
education for Succession and Business                         In 2011, a total of 185 branch managers and deputy
Application for Micro Business Personnel                      regional managers participated in such program.
To maintain the domination in the micro business
segment, BRI undertakes the succession and                    Development of education facilities and Book
Application Training for employees at BRI Unit                Collection Replenishing and Digitalization of the
level. The objective of this program is to equip the          Library
prospective incumbents/leaders in BRI units with              Throughout 2011, BRI replenished the book
needed knowledge and skills before being assigned             collection at the BRI Learning Center Library with
to higher position. These trainings are routinely             books that are published in 2005 onwards. The
carried out in the regional learning centers, including       library’s collection currently comprises of 2,401
training for the resident auditors of micro business,         book titles, 642 journals and 50 multimedia materials
head of the BRI Units as well as the marketing forces         and others. To increase the efficiency of library
of these units. Throughout 2011, BRI trained a total          management, library data has been digitalized to
of 4,498 personnel in this program.                           ease the searching process of the book titles and
                                                              other library’s collections by using a certain key-
Workshop on Business Profile: Providing Practical             words in the search engine of the library’s website.
Knowledge for Account Officer and Other Credit                The BRI library is thus also accessible via online.
Personnel
BRI also organizes a number of workshops on                   Development of Back Office Automation
business profile that have good prospect of growth.           Other infrastructure facilities that are being
In 2011, BRI has carried out business profile                 developed by BRI include back office automation
workshop related to oil and gas, cane and the                 (BOA). With the application of BOA, BRI expects to
sugar industry, shipping industry, rice cultivation,          do away with the era of ‘‘paper and folder” in the
dairy farming and cattle, as well as the construction         administration of educational data and documents.
business. The workshop discuss these business                 In addition, BOA will facilitate the track records of the
profiles from a to z, from the regulatory side to the         educational information of each employee, while also
tricks-of-the-trade as well as sharing experiences            facilitating better monitoring on the issue of training
with business practitioners in the field, by inviting         and educational equality among its employees.
internal and external guest panels who are expert in
their respective field.




         126                ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                   FOREWORD
                                                                                                                 COMPANY PROFILE
                                                                                       Library at BRI Learning
                                                                                       Center




                                                                                                                 MANAGEMENT DISCUSSION AND ANALYSIS
                                                                                                                 CORPORATE GOVERNANCE
The Target Achievement of Budget and Number
                                                                     Use of education Budget
of Training Participants (Trainees)
Overall, the realization of budget and number of
trainees in 2011 was higher than that of 2010. The                             2010
use of education budget in 2011 was dominated




                                                                                                                 CORPORATE SOCIAL RESPONSIBILITY
by the budget for recruitment training, whereas the                                  1%
number of trainees largely involved the Application
training that were held at BRI’s regional as well as
central learning centers. Throughout 2011, BRI                        46%                 44%
spent approximately Rp492.25 billion for training
and education programs, accounting for 102% of the
total budget allocated for HR expenses.                                           9%



                                                                               2011



                                                                                                                 SUBSIDIARIES
                                                                                     2%



                                                                      38%                 51%
                                                                                                                 BUSINESS STRATEGY




                                                                            8%




                                                                       Development            Support
                                                                                                                 FINANCIAL STATEMENTS




                                                                       Recruitment            Application
                                                                                                                 OTHERS




               127
         ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                127
Network and Services




j


    BRI develops network even further with prioritizing on
    customer satisfaction, by extending conventional service
    network, mobile banking, as well as e-channel, to expand
    the reach of banking services complemented by increased
    efficiency and operational effectiveness.




       128             ANNUAL REPORT 2011         PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                            FOREWORD
SeRVICe NeTWORK eXPANSION IN 2011                          Development in 2012




                                                                                                                          COMPANY PROFILE
                                                           To further strengthen and expand the service reach
In the effort to improve grass root economies and          of the BRI operating units, the Bank has formulated
provide greater accessibility to banking services,         the activities plan for 2012 as follows:
BRI continues to expand its service network to the         - Continue to add the number of BRI Unit, including
far reaches of the country. This network expansion            upgrading the status of several Teras BRI to BRI
covers both conventional and electronic networks.             Unit.




                                                                                                                          MANAGEMENT DISCUSSION AND ANALYSIS
The expansion of the retail business network               - Standardize the look and feel of the Bank’s
includes the opening of 18 Branch Offices, 32 Sub-            operating units and e-channel with the aim of
branch Offices and 46 Cash Offices. For expansion             enhancing customer familiarity with BRI when
of micro business in 2011, the Bank opened 200 new            transacting their business.
BRI Units, bringing the total number of BRI Units as       - Increase the frequency of training for BRI Unit and
of December 2011 to 4,849 BRI Units.                          Teras BRI personnel to provide better and more
                                                              effective services to micro customers.
In addition to the BRI Units, since 2009 BRI has also      - Open conventional operating units in potential
developed a new service network in the form of Teras          location in support of the BRI service units to
BRI and Teras BRI Mobile. Initially, Teras BRI opened         increase market share or added value of the Bank.
for business in the heart of traditional markets           - Open Priority Lounge, service office for pensioners
to facilitate market traders in opening a savings             and employees loan, and the Priority Service




                                                                                                                          CORPORATE GOVERNANCE
account, applying for loans, and undertaking other            Center.
banking transactions without having to leave their         - Provide mobile services (EBuzz).
market stalls. In 2010, BRI opened 400 Teras BRI           - Place new e-channel: ATM, EDC and SSPP
units, and expanded this network in 2011 with 687             (Self Services Passbook Printer) to increase
additional Teras BRI units and 100 Teras BRI Mobile           market share while also optimizing efficiency and
units. As of year end 2011, BRI had a total of 1,304          effectiveness of the BRI e-channel network.
Teras BRI and 101 Teras BRI Mobile units.                  - Increase the utilization of e-channel at BRI Units,




                                                                                                                          CORPORATE SOCIAL RESPONSIBILITY
                                                              Teras BRI and Teras BRI Mobile to facilitate
In addition to opening the BRI Unit and Teras BRI             customers with more convenient banking
unit, to optimize customer services as of 2011 there          transactions.
were 12 Teras BRI that had been upgraded to the            - Develop technology application to expedite loan
BRI Unit status.                                              processing at BRI Units, Teras BRI and Teras BRI
                                                              Mobile.
Aside from expanding its service network in the
micro segment, BRI also continues to expand its
e-channel as well as conventional networks such                     Growth of BRI Units and Teras BRI
as branch offices, sub-branch offices and cash
offices. BRI also has special service unit that cater to



                                                                                                                          SUBSIDIARIES
the payment of drivers licence, car registration and                                                      4,849
                                                                            4,538           4,649
ownership document. Throughout 2011, BRI added                  4,300 4,417
1,207 ATMs, 17,959 EDCs (Electronic Data Capture)
and 19 CDMs (Cash Deposit Machine), bringing the
                                                                                                                          BUSINESS STRATEGY



total number of units as of year end 2011 to 7,292                                                                1,304
ATMs, 31,600 EDCs and 90 CDMs. To increase                                                          617
                                                                                      217
service mobility, BRI also has 19 mobile outlets
called EBuzz.
                                                                2007 2008       2009          2010             2011

                                                                    Total number of          Total Number of
                                                                    BRI Unit                 Teras BRI
                                                                                                                          FINANCIAL STATEMENTS
                                                                                                                          OTHERS




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          ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                      129
SeRVICeS
BRI strives continuously to enhance the quality of             • Designating the operating unit for the Briguna and
its services in support of business growth. This is in           Pension Service in respective regional office.
line with the vision of BRI to provide services that           • Formulating the accelerated service quality
are prompt, accurate, save, friendly and comfortable             improvement program through the SQ Assurance
to all customers and to make the services of BRI                 and Improvement program.
as the benchmark for banking services. As a                    • Developing the host-to-host and BRIVA (BRI
manifestation of BRI’s commitments to improve the                Virtual Account) application with State Owned
quality of services to customer, according to the                Enterprise (SOE).
results of the Marketing Research Indonesia (MRI)              • Undertaking the function of response center that
surveys on 19 banks in 2009-2010, the services of                needs the Service Level Agreement (SLA) by
BRI showed improvement by increasing its ranking                 enhancing the help desk infrastructure.
from 11th to 6th position, and in 2011 the MRI score           • Increasing the skills and knowledge of help desk
for BRI increased further which also indicates further           operators by providing them with Service Quality
improvements to the service quality of BRI. Other                training at least once a year.
strategic measures by BRI to improve the quality
of service include the implementation of Service               BRI strives continuously to enhance service quality
Level Agreement (SLA) and service rating for all               by setting improvement targets on services from a
of BRI’s operating units. Whereas to achieve the               variety of aspects, such as:
Bank’s target to be among the top five rank in terms           • Service process by way of formulating new
of customer service, BRI has initiated the service                policies, undertakes information dissemination,
quality campaign 1-96.                                            mentoring and       monitoring of services and
                                                                  operational procedures; implementation of the
The service quality of a bank is dependent upon the               advanced service policy, as well as formulating
quality and skills/knowledge of its frontline service             and improving the Service Level Agreement.
personnel. To sharpen the product knowledge                    • Premises, by assuring cleanliness, orderliness,
of frontliners, BRI organizes the “SQ Vaganza”                    comfortability, placement of merchandises,
competition for all of its frontliners across Indonesia.          availability of brochures and presentation of on/
                                                                  off site ATM.
In addition to the above strategic measures, BRI also          • Monitoring through comprehensive surveys on the
carries out several development initiatives as follows:           implementation of service quality, in cooperation
• Following up on customer complaint through a                    with independent surveying parties.
    single door policy and monitoring the settlement           • Quality of customer data, by managing single-
    of such complaint.                                            platform CIF Interbrand, customer data updating
• Standardizing the services and increasing                       in line with individual risk profile, integrating
    customer satisfaction through SQ coaching, SQ                 customer data system on supporting system
    monitoring of Branch Office, Sub-branch Office,               that lies outside of BRI’s core banking system
    and BRI Unit as well as undertaking refreshing                (Brinets), undertaking information dissemination
    course on products and policies.                              of CIF and designating the best CIF data quality
• Improving service skills and service leadership by              among all operating units throughout Indonesia.
    providing services to related personnel in branch
    offices throughout Indonesia.
• Designating the model branch (Center of
    Excellence) in terms of quality service in the
    respective regional office.




          130               ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                              FOREWORD
                                                                                                            COMPANY PROFILE
                                                                                                            MANAGEMENT DISCUSSION AND ANALYSIS
                                                                                                            CORPORATE GOVERNANCE
• Operational policies, by carrying out business        • Contact center, by drawing on telesales/
  process reengineering, undertaking segregation          telemarketing to market the Bank’s products and




                                                                                                            CORPORATE SOCIAL RESPONSIBILITY
  and improvement of duties of operational                services and centralizing complaint handling.
  personnel and informing, mentoring and
  monitoring     the operations and service
  procedures.




Procedure of Customer’s Complaint

                   Media used:



                                                                                                            SUBSIDIARIES
                   • Mass Media
                                                   Customer       Issues escalation
    Customer’s     • Website/Email
                                                   Respond           to related            Solution
     complaint     • Via employee
                                                    Center          Working Unit
                   • Working Unit
                                                                                                            BUSINESS STRATEGY



                   • Call Center
                                                                                                            FINANCIAL STATEMENTS
                                                                                                            OTHERS




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         ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                         131
Information System Technology




  Reliable Information Technology System is crucial for
  banking service operations of the large and complex
  scope of BRI. For that reason, BRI utilized Information
  Technology and System (ITS) as the driver of BRI’s
  business activities through optimum information system,
  availability of technology service that is measured
  based on competitive Service Level Agreement, support
  for working productiveness and efficiency, as well as
  minimalization of operational risk.




     132              ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                    FOREWORD
INfORMATION    TeCHNOLOGY                   SYSTeM




                                                                                                                  COMPANY PROFILE
DeVeLOPMeNT STRATeGY

In support of BRI’s operation as a modern bank, BRI       The development of new features in channel access
has adopted an IT system development strategy in          in 2011 included, among other things:
stages since 2008. This strategy is contained in the
Information Technology Strategy Plan (ITSP) of BRI        ATM




                                                                                                                  MANAGEMENT DISCUSSION AND ANALYSIS
in 2008-2017, as follows:                                 • Standardization of the ATM menu for the payment
                                                            features of multi finance, education payment and
• Supply of broad channel access that are equipped          post paid telephone payment.
  with features that are standardized, diversified        • Development of the transfer feature through the
  and integrated.                                           Link network.
  Adoption of leading edge IT trends in banking.          • Development of payment features for the
• Supply of data access that is comprehensive on a          water utility service PDAM (for the regions of
  real time online basis.                                   Banjarmasin, Makassar, Martapura, Bogor,
• Implementation of (near) zero down time.                  Karang Anyar Bandung, Probolinggo and
• Implementation of security technology and the IT          Situbondo), tuition fees of universities (UNDIP,
  process governance.                                       UNAIR, UNM, Jember University, UIN Jakarta,
• Use of multimedia and paperless technology.               UPN Veteran Yogyakarta, Atmajaya Yogyakarta,




                                                                                                                  CORPORATE GOVERNANCE
                                                            UGM), PLN for non-electricity billing, post paid
Core Banking System (CBS) BRINeTS                           telephone (XL, Smartfren, Esia, Three, Axis), multi
Throughout 2011, BRI achieved several milestones            finance (WOM).
in the implementation of the above mentioned ITSP         • Top up card for pre paid e-money BRIZZI.
in several stages. A total of 7,975 operating units       • Additional loan features for small commercial
of BRI are currently integrated through the core            segment.
banking system (CBS) BRINETS, the largest systems




                                                                                                                  CORPORATE SOCIAL RESPONSIBILITY
integration of its kind in Indonesian banking today.      SMS Banking
                                                          • Development of the transfer feature through the
The highest number of transactions within BRI’s             ATM Bersama and Prima networks.
core banking system as of year end 2011 reached           • Development of payment features for airplane
7.9 million transactions per day and 125 million            ticket and university tuition fees.
transactions per month.                                   • Development of the features for top up e-money
                                                            BRIZZI and SIM Smart, pre paid cellular.
Development of electronic Banking                         • Enhancement of the feature for mobile cash (real
BRI strives continuously to improve and develop its         time online payment).
electronic banking features to serve customers 24/7.      • SMS notification.
The electronic banking medium offers greater ease



                                                                                                                  SUBSIDIARIES
for customers to obtain information, communicate          Internet Banking
and undertake their banking transaction through the       • Development of the transfer feature through the
ATM, Electronic Data Capture (EDC), KIOSK, Cash              ATM Bersama and Prima networks.
Deposit Machine (CDM), Phone Banking, Electronic          • Development of the RTGS feature.
                                                                                                                  BUSINESS STRATEGY



Fund Transfer, SMS Banking and Internet Banking. As       • Development of the feature for current account
of year end 2011, the highest e-channel transaction          statements (up to the last 50 transactions).
by BRI reached a total of 3.6 million transactions per    • Development of the payment feature for airplane
day and 65 million transactions per month.                   ticket.
                                                          • Development of the features for top up e-money
                                                             BRIZZI and SIM Smart, pre paid cellular.
                                                          • Internet banking through the mobile phone.
                                                                                                                  FINANCIAL STATEMENTS
                                                                                                                  OTHERS




                133
          ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                              133
Growth of number of e-channel features


                                      2007               2008             2009             2010            2011
 ATM                                    51                97              110              124              159*
 EDC                                    15                44               80              136              160*
 SMS Banking                            10                21               28               38              49*
 Cash Management                        2                 7                15               24               87
 Phone Banking                          20                31               33               33               33
 Internet Banking                       0                 0                25               41              56*
 CDM                                    51                62               64               64              159*
 Kiosk                                  6                 22               23               23               23
 SST (Self Service Terminal)            0                 3                 9                9               9
 BRILink                                0                 0                 7                7               7
 Total e-channel features              155               287              394              499              742
* including Brizzi features



Auto Payment BRI                                                Development of the Management Information
• Electricity payment                                           System (MIS)
• Telephone payment                                             MIS development is carried out in order to fulfill the
• Post paid cellular phone payment                              needs of business and stakeholders with data that
• Multi finance payment                                         are integrated while also complying with regulations.
• Pay-TV payment                                                The use of multimedia and paperless technology
• DPLK (Pension Plan) payment                                   makes the presentation of information more
                                                                communicative, effective and efficient.
e-Banking Current Account
• RTGS via Internet                                             Several developments in the MIS applications during
• Transfer to other banks                                       2011 included, among other things, the application
                                                                development for PASK 50/55, application for the
Development of Credit Card                                      Commercial Bank head Office Report and application
In support of the development of credit card products           for Operational Risk Management.
(issuing and acquiring), BRI continues to develop
and enhance its credit card system. Several features            Development of New Cash Management
in the credit card system that had been developed in            To maximize the benefits of cash management
2011 included:                                                  services for corporate and institutional customers,
• Development of module/Visa issuing feature                    BRI has made further developments on the
• Development of the feature for point reward                   service application of its new cash management.
• Development of the feature for auto payment                   These enhancements include additional features,
• Development of the features for corporate card                availability, user friendliness, access speed, security
    (auto debit corporate card, corporate card billing          system and faster response in problem handling.
    statement).                                                 BRI’s new cash management service provides
                                                                higher convenience and peace-of-mind that increase
BRI launched the VISA credit card under the name                customer trust, leading to the opportunity for new
of BRI VISA Touch with due consideration on the                 customer acquisition.
huge acquiring market potential both for credit card
holders and merchants alike.                                    BRI’s information technology also supports the
                                                                cooperation process with a number of SOE’s
                                                                including the State Logistics Board, BULOG (host-to-
                                                                host payment with BULOG’s third parties), PT PUSRI
                                                                (host-to-host purchase of fertilizer), PERTAMINA
                                                                (new host-to-host for the purchase of fuel), and a
                                                                number of universities (host-to-host payment for
                                                                tuition fees and other academic expenses).




            134               ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                           FOREWORD
                                                                                                                         COMPANY PROFILE
The number of new cash management features as               Availability of Communication Network
of year end 2011 amounted to 73 features, whereas           In line with the development and addition of on line
the development of features in the new cash                 operating units that continue to grow, BRI ensures
management by BRI in 2011 included the followings:          the availability of communication networks that
• Development of special payment feature (RTGS,             are supported by continuos oversight through the
   clearing, BRI transfer, SWIFT).                          enterprise monitoring system, and supported also




                                                                                                                         MANAGEMENT DISCUSSION AND ANALYSIS
• Development of payment features for PERTAMINA,            by a redundant communication media as well as
   PUSRI, airplane ticket, loans, credit card, cellular     different providers of communication services.
   phone.
• Development of transfer feature namely outgoing           Currently, BRI is in the process of constructing a VSAT
   forex (single and mass), BRIVA (single, collective       communication and fiber optic networks of its own in
   and mass).                                               order to increase the availability of communication
• Development of RTGS features (collective RTGS,            networks as well as to broaden the business network
   mass RTGS).                                              of the Bank.
• Development of clearing features (individual
   clearing and mass clearing).                             Security System
• Development of the Taspen deposit feature.                BRI’s information technology infrastructure is
• Development of the auto payment features for              regularly evaluated and audited with the aim of




                                                                                                                         CORPORATE GOVERNANCE
   electricity and telephone bills.                         mitigating the risk of vulnerability and weaknesses
• Development of the reporting module/feature               of the information technology infrastructure. The
   (auto reporting/reporting management).                   security system is upgraded as needed to increase
• Development of the payroll module (24-hour                its security reliability against the trends of information
   payroll).                                                technology frauds. A Security Awareness program is
                                                            routinely carried out to enhance awareness and care
Business Continuity and Disaster Recovery                   for security in the use of information technology at




                                                                                                                         CORPORATE SOCIAL RESPONSIBILITY
Management                                                  BRI.
BRI has a Business Continuity and Disaster Recovery
Plan to ensure the continuity of business operations        To maintain an adequate security system within
while also increasing the trust of customers and            the information technology realms that continue to
mitigating operational risk as a result of an information   advance and evolve, BRI adopts and implements
technology failure. As part of the Business Continuity      best practices in the information technology
Management, BRI has three Data Center (DC) sites            security system, including the ISO 27001:2005.
namely the Primary DC, Secondary DC that also               Adhering to regulations, BRI complies to the Bank
serves as a Disaster Recovery Center (DRC), and             Indonesia Regulation PBI No. 9/15/PBI/2007 on the
another DRC that is located far away from the               Implementation of Risk Management in the Use of
two DCs. Since September 2011, at the two data              Information Technology by a Commercial Bank.



                                                                                                                         SUBSIDIARIES
centers (Primary DC and Secondary DC) a new IBM             BRI constantly strives to anticipate and mitigate
AS/400 Power-7 has been implemented as the Host             operating risks that may arise out of a down-time in
Core Banking System, which operates alternatively           the information technology system itself. To that end,
between the Primary DC and Secondary DC. In this            BRI employs nine key points to reduce operating
                                                                                                                         BUSINESS STRATEGY



way, BRI further reduces the risk of failure in its Core    risks as follows:
Banking System (CBS) BRINETS.                               - IT operational back-up management
                                                                BRI undertake recyclement in the management of
BRI has established a Disaster Recovery Center at               back-up data, in addition to relying on permanent
a different location from those of the two DCs to               back-up data (doubling).
maintain system availability and business continuity
in case of a disaster striking the two data centers.
                                                                                                                         FINANCIAL STATEMENTS




To ensure the reliability of this DRC, BRI undertakes
periodical live tests of its business continuity and
disaster recovery capabilities.
                                                                                                                         OTHERS




                 135
          ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                   135
- Clustering and mirroring                                 Development Plans for 2012
  As described previously, the security of IT at           The use of information technology at
  BRI relies on a disaster recovery system that is         BRI faces significant challenges. Market
  fully redundant (mirroring) at different locations       competition in the banking industry has
  that are set apart by more than 1,000 km,                increased the need for business expansion.
  as well as the support of several supporting             As such, the role of information technology
  system that are dispersed location-wise                  infrastructure should elevate the competitive
  (clustering).                                            advantages of BRI in the market place.

- Data Center.                                             To face up to the challenges in 2012,
  BRI operates three data centers in three                 especially in the area of information
  different locations that serve as back-ups for           technology, BRI has formulated several
  one another.                                             strategic plan, including:

- Intrusion System.                                        • Provision of a broad channel access
  BRI has an Intrusion Detection System                      that is equipped with features that are
  and Intrusion Prevention System as part of                 standardized, diversified and integrated:
  the defense against the risk of intrusion by               - Enhancing the infrastructure         for
  hackers.                                                      e-channel    and     broadening      its
                                                                implementation across the business
- Host Security Module.                                         competition while also supporting
  For card products, BRI implements a host                      compliance towards regulations. This
  security module form that enable card holders                 includes the addition of 3,500 ATM
  to transact safely with several hosts of                      units, 300 CDM units, 100 KIOSK
  products and services that are offered by BRI.                units and 45,000 EDC units.
                                                             - Enriching the features of ATM, EDC/
- fire wall Security.                                           mini-ATM, KIOSK and CDM.
  The fire wall security system over the                     - Enriching the features of Internet
  information technology network of BRI relies                  Banking
  on the most advanced technology available at               - Developing the infrastructure and
  present.                                                      application for debit cards based
                                                                on the smart card in line with Bank
- Access of Operating Unit.                                     Indonesia regulation.
  Access to the information system of BRI for                - Developing the features for credit
  operating units are classified in accordance                  cards.
  with different authority levels and provided               - Developing the features for New Cash
  only on a need-to-know basis.                                 Management

- Soft Token for e-channel.                                • Adoption of leading-edge information
  As an added security feature in e-banking                  technology trends in banking:
  transaction, customer are given new password               - Development of ATM features based
  codes each time they transact through the                     on the smart card.
  BRI Internet Banking. This measure reduces                 - Development of the e-money (BRIZZI)
  the possibility of the customer account being                 features
  accessed by unauthorized parties.




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                                                                                        FOREWORD
   - Provision of comprehensive data




                                                                                      COMPANY PROFILE
     access in real- time on-line bases.
   - Provision of comprehensive data
     access in on-line, real time and
     secured bases for the purposes of
     internal and external auditors.
   - Development of the application for




                                                                                      MANAGEMENT DISCUSSION AND ANALYSIS
     PSAK 50 and 55 and IFRS
   - Implementation of the application
     for Basel II Credit Risk Management

• Implementation      of    (near)    zero
  downtime
  - Implementation of VSAT hub and
    fiber optic network owned by BRI.
  - Provision of redundancy and back-
    up for IT infrastructure and server
  - Enhancement         of     continuous
    monitoring functions over BRI




                                                                                      CORPORATE GOVERNANCE
    operations.

• Implementation of security technology
  and IT process governance
  - Proceeding with the implementation
    of best practice system in
    information technology security




                                                                                      CORPORATE SOCIAL RESPONSIBILITY
    that is more holistic based on
    ISO 27001:2005 as well as new
    regulation of Bank Indonesia and
    the government.

• Use of the multimedia and paperless
  technology
  - Enrich the presentation of routine
     reports by operating units and
     divisions in place of manual
     reporting.



                                                                                      SUBSIDIARIES
  - Implement       applications   for
     knowledge    management      and
     e-learning.
  - Implement      the     BRI   Audit
                                                                                      BUSINESS STRATEGY



     Management System or BRISMA.
                                                                                      FINANCIAL STATEMENTS
                                                                                      OTHERS




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                                                                                137
Operational Center

A centralized banking operation is key to the modern         Growth of the RTGS and Clearing Transactions
banking operation in terms of operational efficiency         RTGS transaction of BRI during 2011 indicated a
and effectiveness. Since 2010, BRI has carried               healthy growth. Total incoming RTGS transactions
out a centralized operational function in line with          amounted Rp4,930 trillion over 1.11 billion
international best practice in banking industry.             transactions. While outgoing RTGS amounted to
                                                             Rp4,964 trillion over 1.11 billion transactions.
BRI has established an operational system that is
fully centralized, quick, with zero defect and low           As with the RTGS transaction, clearing transaction
risk, while also building an integrated monitoring           also showed quite a significant growth. In terms of
and control system that are aligned to the Bank’s            delivery clearing, total inward transactions amounted
business growth. In addition to that, BRI has also           to Rp94 trillion over 3.5 million transactions, whereas
developed human resources in the Operational                 outward transactions reached a total of Rp21 trillion
Center that possess high quality, responsiveness as          over 723 thousand transactions. Meanwhile, for
well as integrity, that is supported by a never ending       credit clearing, total inward transactions amounted
improvement toward the quality, effectiveness as             Rp35 trillion over 5.5 million transactions, whereas
well as efficiency of BRI’s operational system.              outward transactions totalled Rp36 trillion over 3.3
                                                             million transactions.
Improvement in the Business Process and
Operational efficiency
In 2011, BRI continued with its operational                  Development Plans in 2012
transformation involving internal business processes         Entering the year 2012, BRI has formulated a strategic
with the aim of increasing operational efficiency and        plan to enhance both operational performance and
effectiveness, leading to greater speed and accuracy         customer service through the followings:
in customer service.                                         • Business process re-engineering by increasing
                                                                the efficiency of back office functions in operating
Efforts to evaluate and develop the business process            units to enhance service quality.
of all transactions are carried out consistently, among      • Developing of paperless operation stage II.
others through the implementation of straight through        • Establishing a Regional Operating Center, for
processing for incoming remittance transaction and              debit clearing and cash movement transaction,
the centralized debit notes.                                    located at BRI Regional Offices throughout
                                                                Indonesia.
BRI was also intensively improving its efficiency            • Preparing the steps for implementing the ISO
in the banking operational activities, such as cost             9001:2008 - Quality Management Systems
reduction and reducing the administration chain                 standard.
through implementing the paperless settlement for
e-banking transaction and also settlement for ATM
cash reconciliation. These initiatives contributed
to a reduction in overhead cost and expedited the
settlement time.




                                                              Printing process of ATM cards




          138               ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                       FOREWORD
Management of Fixed Assets and Logistics




                                                                                                                     COMPANY PROFILE
In line with business growth and network expansion,         e-Procurement
BRI is required to manage optimally its fixed assets        BRI develops an e-Procurement Application of




                                                                                                                     MANAGEMENT DISCUSSION AND ANALYSIS
as well as the logistics needs of each operating unit.      goods and services. The objective of this application
To that end, the fulfillment of fixed assets as well as     is to ensure that the procurement of goods and
logistics needs must be done immediately, flexibly,         services can be done in a more transparent, fair, non-
efficiently and effectively by always implementing          discriminatory and accountable process. In addition,
the Good Corporate Governance, so that BRI will not         the Bank has also developed the Application for Fixed
miss the momentum of its business.                          Assets Management Information System. This is also
                                                            to ensure that the management of fixed assets by the
In the effort to fulfill logistical needs optimally the     Bank could be performed transparently, accountably
operating units responsible for managing fixed              and accurately from distribution, asset recognition,
assets and logistics coordinate closely with the            insurance, tax matters up to the disposal of those
operating units that are responsible for planning           assets.
and procuring the logistics. To that end, both parties




                                                                                                                     CORPORATE GOVERNANCE
are proactively engaged with one another in this            Development Plans in 2012
coordination, ensuring that continuity of supplies of       BRI will continue to evaluate and enhance its policies
goods and services required by different operating          on assets and logistics management, among other
units are fulfilled.                                        things through the updating of those policies as a
                                                            way for BRI to be in line with its business growth as
Decentralized Procurement Process                           well as with prevailing laws and regulations.
The policy of BRI in logistics is to implement a




                                                                                                                     CORPORATE SOCIAL RESPONSIBILITY
decentralized process in the procurement of goods           One of the efforts is by always updating the policies
and services, by delegating to General Manager              of Fixed Assets and Logistics Management in line
of Regional Office with appropriate limit authority.        with business development as well as with prevailing
Conversely, the procurement of goods and services           regulations.
of other operating units are centralized. As such, the
procurement of goods and services can be performed
effectively and efficiently while also enabling Regional
Offices to increase the performances of working
units under its supervision.




                                                                                                                     SUBSIDIARIES
                                                                                                                     BUSINESS STRATEGY
                                                                                                                     FINANCIAL STATEMENTS
                                                                                                                     OTHERS




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                                                                                                139
Marketing Communication




  The mission of Marketing Communications at BRI is
  to instill a strong brand in all of the Bank’s products
  and services that will support the marketing and sales
  growth of those products and services. From its optimum
  marketing communication, the Bank will gain awareness
  and a unique positioning, efficient and relevant in the
  minds of the Bank’s target audiences.




     140              ANNUAL REPORT 2011         PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                FOREWORD
                                                                                                              COMPANY PROFILE
                                                                                                              MANAGEMENT DISCUSSION AND ANALYSIS
Marketing Communication Strategies and                      o BRI Credit Cards
Activities                                                     Retention and acquisition programs with
Throughout 2011, BRI’s marketing communications                 various leading merchants in fashion,
focused on products that are substantially based                gadget, airlines, hotel & resto, beauty and
on individual, mass and retail platform whether in              health, BRI Travel Service, BRING, and
funding or lending. Retail funding became the main              others
priority considering its strategic role in ensuring
funding stability as well as price competitiveness.         o BRI Mortgage (BRI Extra Mortgage, “Kawan”
In addition to that, the micro, small and medium              Mortgage Program, Joint Promo Kemang
enterprise (MSME) business, as a pillar business              Village, Florencia Cluster)
of BRI, received special priority to ensure public
awareness retention of the BRI brand. The Bank’s            o Vehicle Loan (Vehicle Loan “Kawan”, Vehicle




                                                                                                              CORPORATE GOVERNANCE
e-banking communication is also one of the focal              Loan Autovest 2011, Vehicle Loan “Lebaran”)
points of BRI in 2011 as the Bank sought to increase
the composition of fee based income through                 o BRI Priority:    White   Lotus,   AntePrima,
e-banking transaction. BRI also made this as an               Blitzmegaplex
effort to become The Biggest National Payment
Gateway.                                                 Several communication activities that were
                                                         implemented in 2011, not only increased the




                                                                                                              CORPORATE SOCIAL RESPONSIBILITY
Various communication activities that were carried       business volume of the respected products and
out in 2011 included, among others, as follows:          services, but also enhanced the performance of the
   o BRI BritAma Savings (Untung Beliung                 BRI brands. This was evident from the increasing
       BritAma)                                          brand awareness and brand index of BRI as one
                                                         of the top performers in the Indonesian banking
  o BRI   Simpedes      Savings     (Simpedes            industry.
    Folks       Festival,  Simpedes    Monthly
    Harvest and Homecoming with Kupedes and
    Simpedes)

  o BRI Junio Savings (Tie-in merchant program:



                                                                                                              SUBSIDIARIES
    Timezone, Theme Park: Ancol, Jatim Park,
    WaterBoom, Funland, Bali Bird Park, Bali Zoo,
    and others)                                                                                               BUSINESS STRATEGY



  o Term Deposit (Prepaid interest Term Deposit)

  o E-Banking:    BRI    E-Banking         Dazzling
    Sweepstakes (15 Agt-15 Dec 2011)

  o BRIZZI (Merchant discount program in food
    and beverages, public service, fashion and
                                                                                                              FINANCIAL STATEMENTS




    mini-market category)
                                                                                                              OTHERS




               141
         ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                           141
Becoming a Top Brand in Indonesia
Numerous awards from independent parties serve as
a confirmation of BRI’s multiple brand performances
as seen from the following recognitions:




   1. Top brand award                                     4. Indonesian Service Satisfaction Index 2011, in
                                                             the category of Priority Banking Service, No. 3
               Products               Ranking
                                                             from Service Exellence Magazine.
    BRI Junio Savings                    1
    BRI BritAma Savings                  2                5. Indonesia Most Valuable Brand, rank 1 for
    ATM Card                             3                   Indonesia, rank 195 world wide, from Brand
    Call BRI                             3                   Finance.
    BRI Simpedes Savings                 4
    BRI Term Deposit                     3
    BRI Mortgage                         5
    Credit Cards                         5



   2. Indonesia Bank Loyality Index Award 2012

               Products               Ranking
    BRI Savings                          3
    BRI Credit Cards                     5


   3. Indonesia Best Brand Award (IBBA) 2011

           Product/Brand              Ranking
    BRI as Corporate Brand                1
    BRI Simpedes Savings                  3
    BRI BritAma Savings                   4
    BRI Credit Cards                      5
    BRI Mortgage                          5




         142               ANNUAL REPORT 2011         PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                             FOREWORD
                                                                                                                                           COMPANY PROFILE
Development Plans in 2012                                                            Aside from those main focal points, BRI’s marketing
                                                                                     communication will also provide full support to
The plan for marketing communications in 2012                                        products and services that are business to business
relates directly with the corporate objective of BRI to                              based, with the appropriate communication strategy.
become The Largest Payment Gateway. In addition
the Bank will make special efforts to develop strong                                 The marketing communication plan 2012- 2014 and




                                                                                                                                           MANAGEMENT DISCUSSION AND ANALYSIS
image as a transactional bank that will also touch                                   Thematic Communication Campaign 2012-2014 for
upon the corporate brand of BRI.                                                     BRI’ respective brands can be seen as follows:




                                 2012
                                  2011                  2012                  2013            2014
                                                                                                2014                2015
                                                                                                                  2015



    Corporate Brand
                                   aCorporate Campaign: refreshment
         “BRI”                     aImage building: The largest and the best micro bank, payment,
                                      Best Services




                                                                                                                                           CORPORATE GOVERNANCE
       Tabungan                    aIncreasing Top of Mind and Awareness
        BritAma                    aImage building: Young, easy, Transactional


     Tabungan BRI                  aMaintaining Top of Mind awareness
         Junio                     aBroadening knowledge of BRI Junio Savings

       Tabungan                    aMaintaining Level of Awareness
       Simpedes
                                   aRepositioning : Simpedes Image Rejuvenation




                                                                                                                                           CORPORATE SOCIAL RESPONSIBILITY
                                   aestablish preference of utilizing ATM BRI, establish the most
                                      extensive network image of ATM BRI
       e-Banking
          ATM
                                   aIncreasing awareness and knowledge for: Internet Banking,
                                      Mobile Banking, BRIZZI.
    Internet Banking
     Mobile Banking                aImage building: increasing perception in terms of performance/
         BRIZZI                       reliability and advantage                                              Corporate Target
                                   aCommunicating e-channel features, especially features with
                                      high transaction potential
                                                                                                                The
                                                                                                              Biggest
      Microbusiness
                             aThematic Campaign with positioning :
                                  •	 Rationale : quick, transparent, competitive interest
                                                                                                              National
         Product
           Kupedes
                                  •	 emotional : Community banking, business success                          Payment
                             aUndertaking special programs that are unique & iconic, consistently and
                                                                                                              Gateway
             KUR
                                 continuously




                                                                                                                                           SUBSIDIARIES
                             aMicro loans as Umbrella Brand for all products range in the
      Retail Business            Retail and Medium BRI
          Micro Loan
                             aBuilding awareness and the right positioning for BRI’s micro
                                 credits
                                                                                                                                           BUSINESS STRATEGY




       International         aBuilding awareness and image
         Business            aTrade finance : Comprehensive and Professional
       Brifast Remitance
                             aRemittance : Prompt solution for money transfer


         Treasury            Awareness and image building
            DPLK             Positioning : Planned, safe and profitable
                                                                                                                                           FINANCIAL STATEMENTS




                             aCampaign : the largest network, nearest to customer
       Conventional          aCampaign on growth of number of outlets, new outlets
         Channel
     Kanca, KCP, BRI Unit,
                             aMaintaining look and feel consistency of offices/outlets
          Teras BRI
                                                                                                                                           OTHERS




                           143
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                                                                                                                         143
Risk Management

Rapid business development and the increasingly              The implementation of such concept is expected to
complex banking products have given rise to an               maintain independency of decision making process,
equally more complex risk management in banking.             ensuring that it is not partial nor beneficial to one
For that reason, BRI is required to implement reliable       particular working unit at the expense of another.
risk management in order to adapt to the complexity          In the Bank’s implementation of risk management, the
of this business. The implementation of risk                 Board of Directors and the Board of Commissioners
management principles must be able to support BRI            play an important role in supporting and overseeing
to be more prudent in its business growth and rapidly        the risk management implementation in all working
evolving banking operations. The implementation of           units. In its function to manage business risk exposure
risk management should meets the needs of banks              and determine the risk management system of the
in managing risk within tolerable level, which have          Bank, the Board of Directors of BRI is assisted by the
become standards in the banking industry and                 Risk Management Committee (RMC), as the highest
governed by the regulations of Bank Indonesia that           body in BRI’s risk management system.
are in line with the recommendation of the Basel
Committee on Banking Supervision.                            Discussion of the Bank’s overall risk profile is done
                                                             through RMC meeting, which is held at the least
Risk management has an important role in improving           once every three months. Additionally, discussion
the quality of the Bank risk control management to           on a specific issue concerning certain type of
achieve its target through two aspects, namely the           risk, which require immediate decision, could be
protection of capital and the optimization of the risk       held by a limited RMC, or sub-RMC, meeting.
and return relationship. Considering the importance          BRI has three sub-RMC, namely Credit Risk
of the implementation of risk management, BRI has            Management Committed (CRMC), Market Risk
implemented an integrated risk management.                   Management Committee (MRMC), and Operation
                                                             Risk Management Committee (ORMC), established
BRI implemented its risk management based on                 to handle problems related to credit risk, market risk,
three lines of defense concept, namely:                      operational risk and other risks.
• First line of defense refers to business/operations
   working units as the parties responsible for              Human Resources Development in Risk
   implementing internal control functions and               Management
   maintaining the quality of output and business            BRI undertook various efforts in order to build
   process in accordance with the established                a culture of risk awareness in the Bank. Several
   policies and procedures.                                  programs are taken to develop competency in
• Second line of defense refers to risk management           various aspect of risk management as well as to
   working units whose role is (i) to monitor the            monitor the implementation of risk management
   implementation of the Bank’s risk management              including:
   in accordance to the Bank’s risk appetite, (ii) to        • Dissemination of materials on risk management
   set policies, guidelines and risk limits, in order           in all level of training and education programs for
   to maintain risk exposure at a tolerable level and           management level (Head of Working Unit, Branch
   does not exceed the capital capacity of BRI.                 Manager, Sub-Branch Manager, Operational
• Third line of defense refers to internal audit unit           Manager and Marketing Manager).
   whose function is to monitor the implementation           • Special training on risk management for the Staff
   of internal control by the first and second line of          Development Program (SDP).
   defense, and to report to the President Director          • Dissemination of risk management information to
   and the Board of Commissioners independently.                all BRI’s working units through both formal and
                                                                informal forum of communication.




         144               ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                                                                   FOREWORD
                   In addition, in order to develop competency in risk                                                  Risk Profile Reporting Mechanism




                                                                                                                                                                                 COMPANY PROFILE
                   management, BRI’s management take the national                                                       As risk owner, each working unit in BRI is responsible
                   risk management certification program with relatively                                                for risk management in all of its activities. Hence,
                   high passing grade of 90.06%, which was above the                                                    the Board of Directors ask for every working unit
                   banking industry average.                                                                            manager should be able to conduct identification of
                                                                                                                        risk, assess all risk and monitor as well as mitigate
                   Risk Profile                                                                                         those risks. These capabilities are necessary in order




                                                                                                                                                                                 MANAGEMENT DISCUSSION AND ANALYSIS
                   BRI’s aggregate risk assessment was conducted                                                        to achieve the targets, as well as to provide added
                   through self assessment process which produce the                                                    value to the Company through effective and efficient
                   BRI Risk Profile. The risk profile assessment comprise                                               risk management.
                   of inherent risk assessment (the risk inherent in the
                   Bank’s activities) and risk control system assessment                                                Working unit manager will reports to Regional Office
                   (management of inherent risk), conducted to eight                                                    on the subject of risk profile and their mitigating
                   types of risks in the Bank’s seven activities (covering                                              follow-up actions. Regional Office would conduct
                   activities in credit, treasury, trade finance, funding,                                              risk profile consolidation of all working units under
                   operation and service, IT system and support), as                                                    its supervision and recommend solution and follow-
                   well as assessment on improvement of risk control.                                                   up actions to improve risk control of each working
                                                                                                                        unit. Subsequently, Regional Office would report
                                                                                                                        the consolidated risk profile to Head Office. Risk




                                                                                                                                                                                 CORPORATE GOVERNANCE
                                                                                                                        Management Division in the Head Office will conduct
                                                                                                                        consolidation of risk profile based on reports from
                   Trend of BRI RISk PROFILE                                                                            Regional Offices and submit its report to the Board of
                                                                                                                        Directors and Risk Management Committee.

                                                                                                                        Trend of Risk Profile
      Moderate
                                                                                                                        BRI’s aggregate risk assessment for the last three




                                                                                                                                                                                 CORPORATE SOCIAL RESPONSIBILITY
                                                                                                                        years had shown improvement in the score of the
Low to Moderate
                                                                                                                        Bank’s risk profile and had placed BRI’s risk category
                                                                                                                        in the low to moderate level. This proved that BRI
                                                                                                                        possess improving trend of risk profile (lower risk
                                                                                                                        profile) from year to year. The charts in this page
           Low
                                                                                                                        present trend of BRI’s risk profile for the year 2009-
                                                                                                                        2011.
                               2009                        2010                          2011

                               Quarter 1           Quarter II            Quarter III         Quarter IV




                                                                                                                                                                                 SUBSIDIARIES

                   Risk Profile Trend of BRI - 2011
                                                                                                                                                                                 BUSINESS STRATEGY




        Moderate
                                                                                                                                                                                 FINANCIAL STATEMENTS




 Low to Moderate




            Low



                      Credit       Market      Liquidity   Operational       Legal     Reputation Compliance   Strategic Overall Rating

                                            Quarter 1            Quarter 2             Quarter 3          Quarter 4
                                                                                                                                                                                 OTHERS




                                              145
                                    ANNUAL REPORT 2011                                 PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                                            145
In 2011, the overall BRI’s Risk Profile remained at             on the assumption of CAR 8%, the allocated capital
the category of LOW TO MODERATE RISK, with                      to cover credit risk amounted to Rp18.3 trillion or
stable trends for all types of risks. The assessment of         44.2% of the total capital.
inherent risk remained at the level of low to moderate.
Whereas for the Risk Control System assessment,                 In 2011, BRI has developed and implemented credit
the score was between strong to acceptable.                     risk management with the Standardized and Internal
                                                                Rating Based Approach, i.e :
Risk Management over New Products and New                       • Formulated the guidelines for the Standardized
Activities                                                          Approach based on the consultative paper of
Risk management is carried out in every product                     Bank Indonesia, and undertook a simulation of
development and new activities, and represents one                  credit risk measurement for Quantitative Impact
of the phase in the business development. This phase                Study (QIS) BI and submitting the draft on
is expected to minimize unforeseen risk potential                   Standardized Approach to Bank Indonesia.
as the result of the sale of new products or new                • Undertook a review on the policies and
activities. In this case, the Risk Management Division              methodologies on CRR-CRS, Credit Risk
ensures the risk management of new products and/                    Modelling (PD, LGD and EAD), the requirement of
or activities and also the readiness of the Bank to                 MIS and CRM system of the Bank.
market its new products and/or activities.                      • Simulated measurement of credit risk with Internal
                                                                    Rating Based Approach (IRBA) and undertook a
Business Continuity Management                                      regrouping review on IRBA BASEL II exposure.
In the increasingly competitive banking environment,            • Undertook a review on the policies and
BRI has to be constantly prepared for disturbance                   methodologies of credit risk limits and undertook
from external sources and be able to immediately                    the monitoring of credit risk exposure to the
restore banking operation afterward, should the                     designated limits.
disturbance/disaster occur. In order to maintain                • Undertook a review on the methodology and
business continuity of the Bank, both in normal                     carried out a simulation stress testing, (with
condition or during and after the disturbance/disaster,             several scenarios including worst case scenario)
BRI has developed Business Continuity Management                    in a bottom-up manner by using customer cash
policies and procedures so that BRI can maintain the                flow for the largest corporate debtor and using
continuity of its critical business process, safeguard              past performance data for MSME debtors, while
its assets and respond appropriately to a situation of              referring to the external and macro economic
disturbance or disaster.                                            conditions that prevail in 2011. Aside from that
                                                                    BRI was one of the banks that have made an
Implementation of Credit Risk Management                            analysis presentation on Stress Testing to Bank
Credit risk is risk that occurs due to failure of counter           Indonesia, IMF and the World Bank as part of the
party to fulfill its obligation. Credit risk could come             Financial Sector Assessment Program (FSAP)
from any of various functional activities of a bank                 and made an estimation of Macro Credit Risk
such as lending (provision of funds), treasury and                  Stress Testing based on macro economic data
investment, and trade finance, which are recorded in                from Bank Indonesia (baseline scenario) and IMF
both banking book and trading book. BRI’s products                  (stress scenario).
or claims with credit risk exposure comprise of both
loans and non-loans (placements, participations,                Implementation of credit risk management at BRI
and other claims/assets such as internal/external               is not only intended to fulfill the requirement of
receivables).                                                   prevailing regulations, but also to encourage banking
                                                                practices that are oriented towards the optimization
Credit risk represent the biggest component in                  of risk and return, as well as to assure the capital
BRI’s business risk portfolio. In accordance with the           adequacy of BRI to absorb loss from credit risk.
Minimum Capital Requirement Report in 2011, credit
risk is calculated using the standard method. Based




          146                ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                      FOREWORD
In order to maintain quality of loan portfolio, BRI        • Undertook a review on the fulfillment of




                                                                                                                    COMPANY PROFILE
applies prudential principles in the process of loan         the qualitative requirements for market risk
initiation. The main principles in managing credit           measurement pursuant to Bank Indonesia
risk are separation of loan officers into two separate       regulation with the related divisions, i.e.
entities, namely Relationship Management and                 coordinating the function of the middle office and
Credit Risk Management, the implementation of four           fulfillment of human resources.
eyes principle, the application of risk scoring system,    • Undertook a review on ISO Risk Management




                                                                                                                    MANAGEMENT DISCUSSION AND ANALYSIS
and separation of problem loan management. In                with the aim of developing an enterprise wide risk
addition, loan initiation process must follow sound          management at BRI.
lending procedures.                                        • Undertook a simulation of              Risk Based
                                                             Performance Analysis (RAPM) measurement
To ensure that lending activities at the Bank are            in order to develop a risk-based performance
carried out prudently, credit risk limits need to be         measurement.
set up to a certain tolerable level so that credit risk    • Undertook a simulation of stress testing on the
potential losses that have arisen can still be absorbed      trading book and banking book portfolios to
by the allocated capital.                                    evaluate potentially significant loss impact should
                                                             an abnormally market movement occur. Stress
For that reason, BRI has undertook assessment                test was carried out with a number of scenarios
on calculation of credit risk limits, including credit       both hypothetically and historically, with due




                                                                                                                    CORPORATE GOVERNANCE
concentration limit and routinely monitors actual            consideration on crises that had transpired in the
credit risk exposures based on portfolio, business           past.
segment and economic sector.
                                                           Implementation of Operational Risk Management
Implementation of Market Risk Management                   (MRO)
Measurement of market risk (interest rate risk and         Measurement of operational risk is carried out using
exchange rate risk) is currently done through the          the Basic Indicator Approach (BIA). According to the




                                                                                                                    CORPORATE SOCIAL RESPONSIBILITY
standardized approach method in accordance with            approach, capital allocated to cover operational risk
PBI No. 5/12/PBI/2003. According to this approach,         amounted to Rp4.24 trillion, or 10.2% from the total
capital allocated to cover market risk amounted to         capital.
Rp184 billion, or 0.4% of the total capital.
                                                           In line with the efforts to implement operational
In the management of market risk, BRI has                  risk management that is adequate both to suit
implemented the treasury and market risk (GUAVA)           the business needs of BRI as well the prevailing
application system, which is an integrated system          regulation, throughout 2011 BRI undertook the
used by front office (dealers), middle office and          followings:
back office. In this application, measurement of           • Simulated the calculation of operational risk by
market risk is done using an internal model (Value             using the Advanced Measurement Approach



                                                                                                                    SUBSIDIARIES
at Risk/VaR) that is integrated in daily transactions          (AMA). To support AMA adoption, BRI has
process. With such application system, BRI is                  implemented Risk and Control Self Assessment
able to monitor its exposure and limit potential loss          (RCSA), Primary Risk Indicators (IRU) and
by determining the market risk limit in the form of            Incidental Management (MI) to all working units,
                                                                                                                    BUSINESS STRATEGY



transaction limits, namely the nominal limits on               as well as undertook improvement to the policies
dealer transaction, cut loss limit, stop loss limit and        and procedures of Operational Risk Management
VaR limit. These monitoring can be done on a daily             (MRO) devices.
bases, thereby simplifying the monitoring on market        • Implementation of Risk Management Forum
risk and expediting the presentation of up- to-date            (FMR) as a forum between the managers of
information for management to make timely decision.            working units and their workers to address risk
                                                               issues inherent in their business activities or
                                                                                                                    FINANCIAL STATEMENTS




Implementation of market risk management by BRI                operations. The result of the discussion on risk
in 2011 were as follows:                                       that requires further follow-ups and decision from
• Undertook a review of the quantitative                       decision makers would be submitted to its direct
    requirements as per Bank Indonesia regulation              superior with copy to Risk Management Division
    on the application system for treasury and market          or Regional Risk Management Group.
    risk (GUAVA) in order to improve market risk
    measurement (VaR) produced by the system.
                                                                                                                    OTHERS




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• Development of software application for OPRA                • Strategic risk refers to the bank failure in achieving
  (Operational Risk Assessor) which includes RCSA,              its target due to unsuitable business decisions.
  IRU, MI, Maturity Assessment and the reporting of             Strategic risk at corporate level is managed by the
  Risk Management Forum activities. This OPRA                   Strategic Planning and Business Development
  application facilitates the implementation of MRO             Division (Renstra).
  and the preparation process to calculate capital
  charge of operational risk using the Advanced               Basel II Implementation
  Measurement Approach (AMA) method.                          A bank is an institution that carries out an intermediary
• Continued the implementation of pilot test of BRI           function over funds that are received from the public.
  business continuity in anticipation of disaster             In carrying out this function, the bank is faced with a
  condition (Business Continuity Management/                  number of risks. In order to mitigate such risk, banks
  BCM). The test was carried out through                      are required to manage the risk up to a tolerable level
  information dissemination of the Business                   while also maintaining a capital reserve that is in line
  Continuity Management together with the training            with the risk profile of the bank.
  of OPRA application in several Regional Offices.
                                                              In consideration of the importance of a bank’s
In addition to the above mentioned risk managements,          capital, BRI has, within the framework of capital
BRI has also undertook other risk managements                 calculation, gradually implemented Basel II from the
namely legal risk, compliance risk, reputation risk,          simple approach to the most advanced approach.
and strategic risk, in accordance to Bank Indonesia
regulation, as follows:                                       Implementation of Pillar 1 of Basel II
                                                              The implementation of Pillar 1 Basel II emphasize
• Legal risk can arise from any business and                  on the calculation of capital adequacy that is based
  operational activity in all working units, so that          upon risks, whether credit risk, market risk or
  the responsibility for legal risk management lies           operating risk.
  with respective risk owners. At the corporate
  level, legal risk is managed by the Legal Division.         a. Credit Risk
  To assist the legal risk owners in identifying,                Pursuant to Bank Indonesia circular letter (SE
  measuring, controlling and monitoring legal risk,              BI No. 13/6/DPNP of 2011), BRI has adopted
  the Legal Officers communicating and mentoring                 the policy on SA Basel II (NOSE S.26-DIR/
  the staff/workers in all operating units on the legal          DMR/12/2011 dated 30 December 2011) and
  aspect inherent in each business and operational               undertook a credit risk based capital calculation
  activities. This was done with the aim to optimally            with the Standardized Approach.
  mitigate legal risk.
• Compliance risk is actually inherent in all business           In preparing the implementation of credit risk
  and operational activities, especially those that              calculation using the more advanced method of
  related to the prevailing laws and regulations. As             Internal Rating Based Approach (IRBA), BRI has
  such, the responsibility to manage compliance                  formulated the policy on IRBA in accordance with
  risk lies with each and every responsible party.               Basel II and the guideline on internal risk rating
  Compliance risk management is coordinated by                   through Credit Risk Rating (CRR) and Credit
  Compliance Division who reports periodically to                Risk Scoring (CRS). Currently, the Bank is in the
  the Board of Directors.                                        process of redesigning CRR and CRS that are
• Reputation risk refers to negative publication                 embedded in the business process.
  related to the Bank’s condition or business
  activities, or negative perception towards the                 To support the adoption of CRR and CRS in
  Bank. BRI designated the Corporate Secretariat                 every credit process and as part of the front-end
  Division as the coordinator of reputation risk                 application to capture related information, the loan
  management at the corporate level. Periodically,               approval system (LAS) has been implemented in
  Corporate Secretariat Division undertakes                      all working units.
  reputation risk parameter and submit its report
  to the Board of Directors and copy to the Risk                 In addition to that, BRI is currently developing the
  Management Division for the assessment of BRI                  application for credit risk engine and IRBA Basel
  risk profile to be submitted to Bank Indonesia.                II reporting to enable an automated capital related
                                                                 to credit risk assessment in line with IRBA.




         148                ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                     FOREWORD
b. Market Risk                                                    system so that the Bank can manage its




                                                                                                                   COMPANY PROFILE
   Capital calculation related to market risk (interest           banking book portfolio more effectively.
   rate and exchange risk) with the standardized               b. Since 2010, to ascertain Pillar 1 capital
   method approach pursuant to Bank Indonesia                     adequacy of BRI is calculated periodically
   regulation No. 5/12/PBI/2003 has been                          (quarterly), BRI has simulated stress testing
   implemented since 2005. For internal purposes,                 on credit risk, credit concentration, market
   BRI has used the internal model approach. To                   risk and liquidity risk.




                                                                                                                   MANAGEMENT DISCUSSION AND ANALYSIS
   support the use of the internal model the Bank
   has implemented the Treasury & Market Risk                  Implementation of Pillar 3 of Basel II
   System (GUAVA) application and has also carried             Implementation of Pillar 3 Basel II (market
   out a validation and back testing of the Value at           discipline) to increase transparency is carried
   Risk (VaR) result that were derived by the GUAVA            out through the disclosure of risk management
   application system. At present, the result of               in the Bank’s annual report.
   internal model measurement are used to monitor
   the Bank’s exposure to market risk and to set               Development Plans in 2012
   risk limits. Going forward, when all qualitative            BRI will undertake the following risk
   requirements will have been met, BRI will use the           management program in 2012:
   internal model in its capital calculation related to        • Evaluate and update the setting of
   market risk.                                                  quantitative and qualitative requirements in




                                                                                                                   CORPORATE GOVERNANCE
c. Operating Risk                                                the implementation of market risk internal
   Since 2010, the capital calculation related to                model in the treasury and market risk
   operating risk has been undertaken using the                  application system.
   Basic Indicator Approach (BIA) method amounting             • Evaluate and update the policy and
   15% of gross income (GI).                                     methodology of the market risk internal
                                                                 model that is related to the implementation
   In preparing the capital calculation related to               of treasury and market risk application




                                                                                                                   CORPORATE SOCIAL RESPONSIBILITY
   operational risk using the standardized approach              system.
   method pursuant to the consultative paper SA BI,            • Preparation of the monitoring for the
   the following steps have been undertaken:                     fulfillment of data and MIS to support
    1) the classification of Gross Income into eight             implementation of Basel III.
    business lines,                                            • Evaluate and update the policy on
    2) the simulation of operating risk calculation              liquidity risk management with respect to
    with the standardized approach.                              implementation of Basel III.
                                                               • Formulate the policy on enterprise-wide risk
   In preparing for capital calculation related to               management and related policies on the
   operating risk using the Advanced Measurement                 implementation of Pillar 2 and Pillar 3.
   Approach (AMA), BRI has undertaken a number of              • Simulate and review the methodology for



                                                                                                                   SUBSIDIARIES
   steps namely: 1) Implementing an operating risk               validating back testing and stress testing
   management framework covering Risk Control                    model with respect to market risk and credit
   Self Assessment (RCSA), Key Risk Indicator                    risk.
   (KRI), Incident Management (loss event data                 • Parallel run in the capital calculation related
                                                                                                                   BUSINESS STRATEGY



   base) throughout all working units, 2) compiling              with the Standardized Approach (SA) while
   data on loss based on seven event types and                   also reviewing the policy and methodology
   eight business lines, 3) simulating operating risk            for credit risk measurement using SA and
   calculation with the extreme value theory (EVT)               IRBA.
   approach.                                                   • Review the policy and methodology on Credit
                                                                 Risk Rating (CRR) and Credit Risk Scoring
Implementation of Pillar 2 of Basel II                           (CRS) in line with prevailing stipulation and
                                                                                                                   FINANCIAL STATEMENTS




In anticipating for the implementation of the second             undertake monitoring on the implementation
pillar of Basel II, BRI has made the following steps:            of the redesigned CRR and CRS.
a. BRI has undertaken the measurement of interest              • Review methodology and simulate risk based
    rate risk in banking book with the repricing gap             pricing/risk premium and the methodology in
    approach to ascertain the impact of interest rate            the calculation of provisioning for possible
    movements on net interest income. To support                 losses in areas that are prone to disaster.
    the interest rate risk management in the banking
                                                                                                                   OTHERS




    book, in 2012 BRI will acquire an application



                149
          ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                              149
Corporate Governance




 150   ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.


 150   ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                FOREWORD
                                    A sharpening of
                                    the Implementation




                                                                              COMPANY PROFILE
                                    of good corporate
                                    governance in




                                                                              MANAGEMENT DISCUSSION AND ANALYSIS
                                    2011,including an
                                    intensified focus
                                    on risk management,
                                    had improved the risk
                                    profile of BRI.




                                                                              CORPORATE GOVERNANCE
                                                                              CORPORATE SOCIAL RESPONSIBILITY
                                     In addition to significant improvement
                                     in the NPL level, an increase in
                                     intensive monitoring resulted also in
                                     several enhancements in management
                                     and monitoring of risk, corporate
                                     government and results of operations




                                                                              SUBSIDIARIES
                                                                              BUSINESS STRATEGY




                                           1                     Risk Based
                                                                 Banking
                                                                              FINANCIAL STATEMENTS




                                         VERY
                                        SOUND                    Rating
                                                                              OTHERS




    151
ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
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ANNUAL REPORT 2011   PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                    151
Corporate Governance




  Bank Rakyat Indonesia is confident that the
  implementation of Good Corporate Governance/GCG will
  positively influence the performance of the Bank while also
  protecting the interest of stakeholders to achieve Beyond
  Expectation.




     152               ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                   FOREWORD
BRI has the commitment to implement the principles         The commitment of the Board of Commissioners




                                                                                                                 COMPANY PROFILE
of GCG based on the corporate values as stated             and Board of Directors of BRI on the implementation
in     the Company’s Corporate Culture namely              of GCG is reflected on the establishment of BRI’s
integrity, professionalism, customer satisfaction,         Theme of Year as part of long term and sustainable
role model and respect for the individual. The values      corporate plan to realize the Bank’s vision. The
represented in the BRI’s corporate culture had been        year 2011 was established as the year of “Reliable
implemented by the management and employees of             Risk Management”. A reliable risk management is




                                                                                                                 MANAGEMENT DISCUSSION AND ANALYSIS
BRI and form the basis of the development of BRI’s         expected to function as one of solid aspects in the
Code of Conduct. This Code of Conduct is the guide         implementation of good corporate governance, and
for all activities of the Bank and provides clarity and    subsequently this will be established as the Theme
measurement that would support the objective of            of Year 2012 i.e. “To be The Best Bank in Indonesia
good corporate governance practice at BRI.                 with of Good Corporate Governance Practices”.

GCG implementation at BRI develops constantly, not         As recognition for achievements that had been
merely in compliance to the standards and prevailing       undertaken since 2002, in 2011 BRI received several
regulations. BRI also consistently innovates and           awards with regard to implementation of GCG,
undertakes improvement to the implementation               among others as follows:
of GCG in a sustainable manner. BRI has been
implementing the policies of GCG at all organizational




                                                                                                                 CORPORATE GOVERNANCE
levels since 2002. Ever since, BRI keeps transforming
and improving its prevailing internal GCG policies, as
follows:
2002      : Joint Decision Letter of        Board of
              Commissioners and Board of Directors
              Number:      02-KOM/BRI/02/2002        –
              NOKEP: S. 37-DIR/02/2002 dated 23




                                                                                                                 CORPORATE SOCIAL RESPONSIBILITY
              February 2002 on the Principles of                                “Best Corporate Governance
              Good Corporate Governance (GCG)                                   in Indonesia” of Corporate
              of PT Bank Rakyat Indonesia (Persero)                             Governance Award 2011 from
              Tbk.                                                              World Finance
2003      : Joint Decision Letter of Board of
              Commissioners and Board of Directors
              of BRI Number: 03-KOM/BRI/06/2003
              – NOKEP: S. 36-DIR/SDM/06/2003
              dated 3 June 2003 on the Policies for
              the Implementation of Good Corporate
                                                                                        “Best Disclosure and
              Governance (GCG) Principles for



                                                                                                                 SUBSIDIARIES
                                                                                        Transparency” in The
              the Employees of PT Bank Rakyat
                                                                                        3rd IICD Corporate
              Indonesia (Persero) Tbk.
                                                                                        Governance Award
2007      : Joint Decision Letter of Board of
                                                                                        2011 from the
              Commissioners and Board of Directors
                                                                                                                 BUSINESS STRATEGY


                                                                                        Indonesian Institute
              of BRI Number: 02-KOM/BRI/06/2007
                                                                                        for Corporate
              – NOKEP: S. 240-DIR/SKP/06/2007
                                                                                        Directorship (IICD)
              dated 29 June 2007 on the Policies of
              Good Corporate Governance (GCG)
              of PT Bank Rakyat Indonesia (Persero)
              Tbk.
2010      : Joint Decision Letter of Board of
                                                                                                                 FINANCIAL STATEMENTS




              Commissioners and Board of Directors
              of BRI Number: 01-KOM/BRI/03/2011 –
              NOKEP: S. 14-DIR/DKP/03/2011 dated
              8 March 2011 on the Policies of Good
              Corporate Governance (GCG) of PT
              Bank Rakyat Indonesia (Persero) Tbk.
                                                                                                                 OTHERS




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                                                                                             153
                           GOVeRNANCe STRUCTURe


                 I. GeNeRAL MeeTING Of SHAReHOLDeRS (GMS)



Pursuant to the Law on Limited Liability Company                b. Prior to invitation, 14 (fourteen) days before,
and the Company’s Article of Association, BRI                      the Bank must announce the invitation of the
General Meeting of Shareholders consists of:                       GMS.
                                                                c. In accordance with BRI as public listed
1. Annual General Meeting of Shareholders                          company and to unify the information related
   (AGMS)                                                          with the plan or implementation of GMS,
   AGMS is held at least 6 (six) months after the                  pursuant to Bapepam-LK, Number. IX.I.1,
   financial year ends and in the meeting, the Board               Company would inform Bapepam-LK at least
   of Directors present:                                           7 (seven) days before the Announcement.
   a. Annual report                                             d. After the General Meeting of Shareholders, the
   b. Proposal on how to utilize Company Net Profit                company must submit the report of the GMS at
      if the Company have profit.                                  least 2 (two) days after the completion of GMS
   c. Proposal to appoint Public Accountant Firm                   by announcing it publicly in minimum 2 (two)
      to audit Company’s current financial year                    Indonesian newspapers, and one of them is
      performance based on the proposal submitted                  nationally circulated.
      by the Board of Commissioners or authorize                e. Each share issued has 1 (one) voting right,
      the Board of Commissioners to appoint Public                 unless the Articles of Association stated
      Accountant Firm.                                             otherwise.
   d. Other company-interest issues requiring
      General Meeting of Shareholders’ approval               During 2011, BRI held two GMS, namely Annual
      without undermining the provisions of Articles          General Meeting of Shareholders and Extraordinary
      of Association.                                         General Meeting of Shareholders.

  BRI is a Stated Owned Enterprise. Therefore                 1. BRI Annual General Meeting of Shareholders
  by referring to Article 23 of Law No. 19/2003                  (AGMS) of 2011
  regarding State Owned Enterprise, then within 5                BRI AGMS 2011 was held on 28 April 2011 at BRI
  (five) months after the financial year ends, BRI’s             I Building, 21st floor and was attended by 84,29%
  Board of Directors must submit Annual Report to                of shareholders from all the total issued shares.
  AGMS for validation.                                           Thus, in accordance with the AGMS’s provision of
                                                                 quorum which is stated in the Company’s Article
2. extraordinary General Meeting of Shareholders                 of Association, quorum was reached and the
   It can be held according to the Company’s need.               AGMS is valid and may produce valid and binding
                                                                 decision.
  According to Article 24 of Company’s Article
  of Association, The Board of Directors holds                  Procedures of the AGMS 2011:
  Annual General Meeting of Shareholders and                    a. Submission of the agenda of AGMS 2011 to
  extraordinary General Meeting of Shareholders                    Bapepam-LK on 25 March 2011.
  after prior Announcement and invitation to GMS.               b. Announcement of the AGMS in two Indonesian
                                                                   newspaper, namely Bisnis Indonesia and
  The procedures of GMS are as follows:                            Media Indonesia on 30 March 2011.
  a. Invitation to GMS is made by registered mail/              c. Invitation to the AGMS was published in
     print-ad 14 (fourteen) days at the earliest before            two Indonesian newspaper which are Bisnis
     the planned date of the meeting excludes the                  Indonesia and Media Indonesia on 13 April
     date of Invitation and the meeting.                           2011.




         154               ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                        FOREWORD
Agenda and Resolutions of the AGMS 2011:                   Third Agenda:




                                                                                                                      COMPANY PROFILE
                                                           The use of Company Net Profit of Financial Year 2010.
first Agenda:
Approval on Annual Report and the Board of                 Resolutions of Third Agenda:
Commissioners Supervisory Report of Financial Year         1. Approval on the distribution of company’s 2010
2010.                                                         net profit with the following split:
                                                              a. A sum of 20% or Rp2,294,476,900,203.00 as




                                                                                                                      MANAGEMENT DISCUSSION AND ANALYSIS
Resolutions of first Agenda:                                     the dividend for financial year 2010. Part of that
1. Approval of 2010 Annual Report.                               sum, amounted to Rp566,527,305,330.00 has
2. Approval of the Board of Commissioners’                       been paid on 30 December 2010 as interim
   Supervisory Task Report as well as the Company’s              dividend as stipulated in the Decision of the
   Financial Report for financial year 2010 that                 Board of Directors’ Meeting on 29 November
   have been audited by Public Accountant Firm                   2010 which has been approved by the Board
   Purwantono, Suherman, and Surja in accordance                 of Commissioners. The interim dividend was
   with Report No. RPC-754/PSS/2011 dated 29                     paid to shareholders whose name were on
   March 2011.                                                   the List of the Company’s Shareholders on
3. Granting of full release and discharge (volledig              22 December 2010. The remaining sum,
   acquit et de charge) to all members of the Board              amounted to Rp1,727,949,594,873.00 or
   of Directors and the Board of Commissioners from              Rp70.04 per share will be distributed as cash




                                                                                                                      CORPORATE GOVERNANCE
   management and supervisory roles in the financial             dividend and will be paid on 15 June 2011 to
   year ended in 31 December 2010, provided that                 shareholders whose name were on the List of
   such actions is not criminal in nature and reflected          the Company’s Shareholders on 1 June 2011.
   in the Company’s Annual report 2010.                       b. A sum of 2.5% or Rp286,809,612,525.00
                                                                 was set for Appropriated Reserve to support
Second Agenda:                                                   investment program of the Company.
Ratification of Annual Report including Financial




                                                                                                                      CORPORATE SOCIAL RESPONSIBILITY
Report of Partnership Program and Community                2. To grant authority to Series A Dwiwarna
Development Program for financial year 2010.                  shareholders to determine the amount of the
                                                              Company’s net profit of financial year 2010 which
Resolutions of Second Agenda:                                 shall be allocated for Partnership Program and
1. Ratification of Partnership Program and                    Community Development Program.
   Community Development Program Report for
   the year 2010, including the Financial Report              According to the Regulation of the Ministry
   which has been audited by the public certified             of State-Owned Enterprise No. PER-05/
   accountant Herman Dody Tanumihardja &                      MBU/2007, the maximum amount to be
   Partners, as written in Report No. 14/GA/HDT-DT/           allocated for the Partnership Program and
   PKBL-BRI/III/2011 dated 30 March 2011.                     Community Development Program is 4% or



                                                                                                                      SUBSIDIARIES
2. Granting of full release and discharge (volledig           Rp458,895,380,040.00, thus the balance of the
   acquit et de charge) to all members of the Board           Company’s 2010 net profit after deduction of
   of Directors and the Board of Commissioners                final dividend financial year 2010, appropriated
   from management and supervisory roles on                   reserve, as well as funds for Partnership Program
                                                                                                                      BUSINESS STRATEGY



   the Partnership Program and Community                      and Community Development Program, should be
   Development Program in the financial year ended            added to the Company’s retained earnings so that
   in 31 December 2010, provided that such actions            the amount reached 73.5% of the total net profit
   is not criminal in nature and reflected in the             of financial year 2010 or Rp8,432,202,608,245.40.
   Company’s 2010 Annual Report of Partnership             3. To grant authority and power to the Board of
   Program and Community Development Program.                 Directors to determine the schedule and final
                                                              dividend for financial year 2010 according to the
                                                                                                                      FINANCIAL STATEMENTS




                                                              prevailing regulations.
                                                                                                                      OTHERS




                155
          ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                 155
fourth Agenda:                                               Seventh Agenda:
Defining the amount of salary, honorarium, and               Changes in the composition of the Board of
tantiem for the Board of Directors and the Board             Commissioners and/or the Board of Directors.
of Commissioners.
                                                             Resolutions of the Seventh Agenda:
Resolutions of the fourth Agenda:                            1. Honourably discharge all members of the Board of
To grant authority and power to the Board of                    Commissioners and the Board of Directors which
Commissioners after approval from the Series A                  expired their term of service commencing from
Dwiwarna Shareholder, to determine the amount                   the closing date of this Meeting and acknowledge
of tantiem for members of the Board of Directors                their contributions and services.
and the Board of Commissioners for financial year
2010 and to determine the amount of salary for               2. Appointing:
members of the Board of Directors and the Board of              - Mr. Bunasor Sanim as President Commissioner/
Commissioners for financial year 2011.                              Independent Commissioner
                                                                - Mr. Hermanto Siregar as Commissioner
fifth Agenda:                                                   - Mr. Sarwono Sudarto as Director
1. Appointment of Public Accounting Office to audit             - Mr. Sulaiman Arif Arianto as Director
   the Financial Report for Year 2011.                          - Mrs. Lenny Sugihat as Director
2. Appointment of Public Accounting Office to audit             - Mr. A. Toni Soetirto as Director
   the Financial Report toward the implementation               - Mr. Randi Anto as Director
   of Partnership Program and Community                         The appointment of the members of the Board
   Development Program for Year 2011.                           of Commissioners and the Board of Directors is
                                                                effective since the closing date of the meeting,
Resolutions of the fifth Agenda:                                except for the appointment of Hermanto Siregar
1. To authorize the Board of Commissioners to                   and Randi Anto would be effective after Bank
   appoint Public Accounting Office to audit the                Indonesia’s approval, subsequent to successful
   Company’s Financial Report for financial year 2011           Fit & Proper Test to comply with prevailing
   and to determine the fee and other requirements              regulations. The tenure of the newly appointed
   in accordance with prevailing regulations.                   Commissioners and Directors will be 5 years and
2. To authorize the Board of Commissioners in                   would end at the closing of AGMS in the fifth year.
   appointing Public Accounting Office to audit              3. Appoint     Soedarjono    as     Vice   President
   the Financial Report of Partnership Program                  Commissioner and Independent Commissioner.
   and Community Development Program for                     4. The composition of the Board of Commissioners
   Financial Year 2011 and deciding the fee and                 and the Board of Directors of the Company are as
   other requirements in accordance with prevailing             follows:
   regulations.
                                                                Board of Commissioners:
Sixth Agenda:                                                   President Commissioner/ :        Bunasor Sanim
Approval for acquisition of BRIngin Remittance Co.              Independent Commissioner
Ltd. shares from PT. AJ BRIngin Jiwa Sejahtera.                 Vice President Commissioner/ :   Soedarjono
which is an affiliated transaction according to                 Independent Commissioner
Bapepam-LK regulation No. IX.E.1 point 2.b, and not             Commissioner                 :   Agus Suprijanto
a material transaction as stipulated in Bapepam-LK              Commissioner                 :   Heru Lelono
regulation No. IX.E.2.                                          Commissioner                 :   Hermanto Siregar
                                                                Independent Commissioner :       Aviliani
Resolutions of the Sixth Agenda :                               Independent Commissioner :       Adhyaksa Dault
1. Approval for acquisition of all shares of BRIngin
   Remittance Co. Ltd. from PT. AJ. BRIngin Jiwa                Board of Directors:
   Sejahtera according to prevailing laws and                   President Director           :   Sofyan Basir
   regulations.                                                 Director                     :   Sarwono Sudarto
2. Granting power and authority with substitution               Director                     :   Sulaiman Arif Arianto
   right to the Board of Directors to execute the
   above share purchase transaction and to take any
   actions regarding this resolution of the meeting in
   accordance to prevailing laws and regulations.




         156               ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                      FOREWORD
   Director                 :   Achmad Baiquni            2. Appointment of Gatot Mardiwasisto as Director




                                                                                                                    COMPANY PROFILE
   Director                 :   Lenny Sugihat                of the Company. The appointment of Gatot
   Director                 :   A. Toni Soetirto             Mardiwasisto would be effective after Bank
   Director                 :   Asmawi Syam                  Indonesia’s approval, subsequent to successful Fit
   Director                 :   Suprajarto                   & Proper Test to comply with prevailing regulations,
   Director                 :   Djarot Kusumayakti           with expiry term of service until the closing of the
   Director                 :   Randi Anto                   Annual General Meeting of Shareholders of the




                                                                                                                    MANAGEMENT DISCUSSION AND ANALYSIS
                                                             5th (fifth) since his appointment.
5. Granting substitution right to the Board of
   Directors to take any actions related with the            The composition of the Board of Commissioner at
   actions of the meeting according to prevailing            the closing of the Meeting were as follows:
   regulations, including to enlist the structure of
   the Board of Commissioners and the Board of               Board of Commissioners:
   Directors.                                                President Commissioner/ :     Bunasor Sanim
                                                             Independent Commissioner
2. BRI extraordinary General Meeting of                      Commissioner             :    Agus Suprijanto
   Shareholders (eGMS) of 2011:                              Commissioner             :    Heru Lelono
   BRI    Extraordinary    General    Meeting      of        Commissioner             :    Hermanto Siregar
   Shareholders (EGMS) 2011 was held on 28                   Independent Commissioner :    Aviliani




                                                                                                                    CORPORATE GOVERNANCE
   September 2011, at BRI I Building 21st floor, and         Independent Commissioner :    Adhyaksa Dault
   was attended by holders of 83,297% of all shares
   issued by the Company. Thus, in accordance with           The composition of the Board of Directors effective
   quorum provision stated in the Company’s Article          from the appointment of Gatot Mardiwasisto as
   of Association, the Meeting is valid and may              Director of the Company after the approval of
   produce a valid and binding decision.                     Bank Indonesia on his fit and proper test, will be
                                                             as follows:




                                                                                                                    CORPORATE SOCIAL RESPONSIBILITY
   The steps in conducting the EGMS 2011 was as
   follows:                                                  Directors:
   a. Submission of Extraordinary AGMS Agenda                President Director        :   Sofyan Basir
       2011 to Bapepam-LK on 16 August 2011.                 Director                  :   Sarwono Sudarto
   b. Announcement of the EGMS was made in two               Director                  :   Achmad Baiquni
       Indonesian newspapers, namely Kompas and              Director                  :   Sulaiman Arif Arianto
       Bisnis Indonesia on 23 August 2011.                   Director                  :   A. Toni Soetirto
   c. Invitation of EGMS was published in two                Director                  :   Lenny Sugihat
       Indonesian newspapers, namely Kompas and              Director                  :   Asmawi Syam
       Bisnis Indonesia, on 13 September 2011.               Director                  :   Suprajarto
                                                             Director                  :   Djarot Kusumayakti



                                                                                                                    SUBSIDIARIES
Agenda:                                                      Director                  :   Randi Anto
Changes in the composition of the Board of                   Director                  :   Gatot Mardiwasisto
Commissioners and/or the Board of Directors.
                                                          3. Granting substitution right to the Board of
                                                                                                                    BUSINESS STRATEGY



Resolutions:                                                 Directors to take any actions related with the
1. Approved the resignation of Soedarjono as                 actions of the meeting according to prevailing
   Vice President Commissioner and Independent               regulations, including to enlist the structure of
   Commissioner, effective from the closing date of          the Board of Commissioners and the Board of
   the Meeting and to acknowledge his contribution           Directors.
   and service during his tenure.
                                                                                                                    FINANCIAL STATEMENTS




   The exemption of responsibility for the period
   from 1 January 2011 to the date of Meeting will
   be released by the AGMS of financial year 2011
   which will be held on 2012.
                                                                                                                    OTHERS




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          ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                               157
                                 II. BOARD Of COMMISSIONeRS


1. The Duties, Authorities and Obligations of the          Composition of the Board of Commissioners for the
   Board of Commissioners                                  period of 28 April 2011 – 28 September 2011:

     a. The Number, Composition, Criteria, and
                                                                No.              Name                 Position
        Independency of members of the Board of
        Commissioners                                       1.        Bunasor Sanim *)      President Commissioner/
        Bank Indonesia Regulation (PBI) No.8/4/                                             Independent Commissioner
        PBI/2006 as revised by PBI No. 8/14/PBI/2006        2.        Soedarjono **)        Vice President Commissioner/
        regarding the Implementation of GCG for                                             Independent Commissioner
        Commercial Bank stated that the bank should         3.        Agus Suprijanto       Commissioner
        have Independent Commissioners comprised            4.        Heru Lelono           Commissioner
        of at least 50% of the total members of the
                                                            5.        Hermanto Siregar      Commissioner
        Board of Commissioners. To comply with that
                                                                      ***)
        requirements and to support the GCG of the
                                                            6.        Adhyaksa Dault        Independent Commissioner
        bank, the shareholders in the AGMS have
                                                            7.        Aviliani              Independent Commissioner
        agreed to appoint Independent Commissioners
        with the main responsibility to monitor the
                                                           *)   effective of 28 April 2011 was reappointed as President
        bank and its subsidiaries operation.                    Commissioner / Independent Commissioner.
                                                           **) effective of 18 August 2011 appointed as Vice President
                                                                Commissioner/Independent Commissioner after Bank
       As of 31 December 2011 there were six                    Indonesia’s approval, subsequent to successful fit & proper
       members of the Board of Commissioners. The               test. Furthermore, based on EGMS BRI on 28 September
                                                                2011, he effectively resigned from his previous position.
       total number and composition of the Board of        ***) effective of 12 July 2011 as Commissioner after Bank
       Commissioners members were in compliance                 Indonesia’s approval, subsequent to successful fit & proper
                                                                test.
       with the regulation, which should not exceed
       the total number of Directors which was 11
       (eleven) member. There were 3 members               Composition of the Board of Commissioners for the
       of Independent Commissioners of BRI or              period of 28 September - 31 December 2011:
       50% of the total members of the Board of
       Commissioners. Thus, the total number and                No.              Name                  Position
       composition of the Board of Commissioners            1.        Bunasor Sanim          President Commissioner/
       was in compliance with the prevailing                                                 Independent Commissioner
       regulation.                                          2.        Agus Suprijanto        Commissioner
       All members of the Board of Commissioners
                                                            3.        Heru Lelono            Commissioner
       were domiciled in Indonesia and all were
                                                            4.        Hermanto Siregar       Commissioner
       approved by Bank Indonesia on their fit and
                                                            5.        Adhyaksa Dault         Independent Commissioner
       proper test.
                                                            6.        Aviliani               Independent Commissioner
Composition of the Board of Commissioners for the
period of 1 January 2011 - 28 April 2011:
                                                           All members of the Board of Commissioners have
No.               Name               Position              the integrity, competence and excellent financial
                                                           reputations background. All members of the Board
1.     Bunasor Sanim        President Commissioner/        of Commissioners do not hold concurrent position
                            Independent Commissioner       as Commissioner, Director, or Executive officers in
2.     Soedarjono           Vice President                 any other banks with the exceptions as stated in PBI
                            Commissioner                   regarding GCG implementation in commercial bank.
3.     Agus Suprijanto      Commissioner
4.     Heru Lelono          Commissioner
5.     Adhyaksa Dault       Independent Commissioner
6.     Baridjussalam Hadi   Independent Commissioner
7.     Aviliani             Independent Commissioner




           158              ANNUAL REPORT 2011         PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                       FOREWORD
b. Duties, Authorities and Obligations of the                   x. Executing management of the Bank in a




                                                                                                                     COMPANY PROFILE
   Board of Commissioners                                            certain condition, for a certain period of
                                                                     time in accordance with the Bank’s Article
  (1) Duties                                                         of Association;
      i. Supervising the policies and general                   xi. Attending Board of Directors meetings
          management of the Bank by the Board                        and providing opinions on issues related
          of Directors, including management of                      to the discussion; and




                                                                                                                     MANAGEMENT DISCUSSION AND ANALYSIS
          Subsidiaries, Pension Fund and Pension                xii. Executing other supervisory role as long
          Fund Financial Institution; and                            as it does not contradict the prevailing
      ii. Giving advice to the BOD including                         laws, regulations, Article of Association
          oversight on the implementation of                         and/or resolutions of GMS.
          the corporate plan which comprise of
          Company Long Term Business Plans, Bank             (3) Obligations
          Business Plans, Company’s Budget and                   i. Providing advises to the Board of Directors
          Work Plans, Partnership and Community                       in the management of the Bank;
          Development Program’s Budget and Work                  ii. Providing opinions and approvals on
          Plan, and other work plans of the Board of                  the Company’s business plans which
          Directors.                                                  comprise of Company Long Term Business
                                                                      Plans, Bank Business Plans, Company’s




                                                                                                                     CORPORATE GOVERNANCE
  (2) Authorities                                                     Budget and Work Plans, Partnership
      i. Inspecting        the      Bank’s      books,                and Community Development Program’s
           correspondences and other documents,                       Budget and Work Plan, and other work
           verifying the Bank’s cash and other                        plans submitted by the Board of Directors;
           securities, as well as the Company’s                  iii. Following the progress of the Bank
           assets;                                                    activities, providing opinions and solutions
      ii. Having access to the Company’s                              to the GMS on important issues related to




                                                                                                                     CORPORATE SOCIAL RESPONSIBILITY
           premises, buildings and offices;                           the management of the Bank;
      iii. Requesting clarification from the Board of            iv. Reporting to the GMS if there is a declining
           Directors and/or other management staff                    performance of the Bank;
           on all issues relating to management of               v. Proposing to GMS the appointment of
           the Bank;                                                  Registered Public Accountant to audit the
      iv. Overseeing every action and decision that                   Bank’s reports;
           have and will be executed by the Board of             vi. Reviewing and analyzing periodic reports
           Directors;                                                 and Annual Report prepared by the Board
      v. Requesting the Board of Directors and/or                     of Directors and signing the Annual
           other management staff with the approval                   Report;
           of the Board of Directors to attend meeting           vii. Providing clarification, opinion and



                                                                                                                     SUBSIDIARIES
           with the Board of Commissioners;                           proposal to the GMS on the subject of
      vi. Appointing and discharging the Board                        Annual Report, if demanded;
           of Commissioners’ Secretary, upon                     viii.Producing meeting minutes of the Board
           recommendation from Series A Dwiwarna                      of Commissioners meetings and filing its
                                                                                                                     BUSINESS STRATEGY



           shareholders;                                              copies;
      vii. Discharging member of the Board of                    ix. Reporting to the Bank on their and/or their
           Directors temporarily as stipulated in the                 families share ownership in the Bank or in
           Bank’s Article of Association;                             any other company;
      viii.Establishing Audit Committee, and any                 x. Providing reports to the GMS on its
           other committees if necessary, while                       supervision activities that was done during
           considering the Bank’s capacity;                           the past financial year; and
                                                                                                                     FINANCIAL STATEMENTS




      ix. Hiring external expert for a certain period            xi. Undertaking other obligations to execute
           of time and on the company’s expense, if                   its supervisory role while adhering to the
           necessary;                                                 prevailing laws, regulations, Articles of
                                                                      Association, and/or resolutions of GMS.
                                                                                                                     OTHERS




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                                                                                               159
   c. The Board of Commissioners’ Meetings
      Pursuant to procedures stipulated in the Article of Association, the meeting of the Board of Commissioners
      is held at least once in a month or at any time if necessary, and may invite the Board of Directors if required.
      The Board of Commissioners meeting is legal and authorized to make any binding decisions if more than
      50% of its members are present or represented in the meeting.

           All decisions of the meetings are made in consensus. If the consensus is not reached, the decision would
           be based on affirmative votes by more than half of valid voters. All decisions of the meeting are binding to
           all member of the Board of Commissioners.

           The Board of Commissioners convened 26 times throughout 2011 with the attendance of each member of
           the Board of Commissioners as follows:


                                                                                  Number of
   No.                     Name                         Position                                     Attendance         %
                                                                                   Meetings
      1.       Bunasor Sanim                President Commissioner /                   26                 25          96.15
                                            Independent Commissioner
      2.       Soedarjono *                 Vice President Commissioner /              21                 20          95.24
                                            Independent Commissioner
      3.       Agus Suprijanto              Commissioner                               26                 19          73.08
      4.       Heru Lelono                  Commissioner                               26                 19          73.08
      5.       Adhyaksa Dault               Independent Commissioner                   26                 20          76.92
      6.       Baridjussalam Hadi **        Independent Commissioner                   11                11           100.00
      7.       Aviliani                     Independent Commissioner                   26                21           80.77
      8.       Hermanto Siregar ***         Commissioner                               15                12           80.00

* effective of 28 September 2011 was no longer Vice President Commissioner/Independent Commissioner of BRI.
** effective of 28 April 2011 was no longer Independent Commissioner of BRI.
*** effective of 12 July 2011 as Commissioner of BRI after approval from Bank Indonesia on his fit and proper test.


Meetings of the Board of Commissioners throughout 2011 discussed the following issues:



 No.                Date                                                       Issues

                                       Discussion on review and proposal for the establishment of Committee on
                                  1.
                                       Policies of SOE Bank
 1.         4 January 2011
                                       Development of Committee Work Plan, Work Visit Plan, and Review of Working
                                  2.
                                       Guidelines for the Board of Commissioners
                                       Discussion on review and proposal from State Ministry of SOE on the
                                  1.
                                       establishmet of Committee on Policies of SOE Bank (Virtual Holding)
 2.         11 January 2011
                                       Audit Committee Report of Working Program of 2010 and Plan for Working
                                  2.
                                       Program of 2011
                                       Nomination & Remuneration Committee and Risk Management Supervision
                                  1.   Committee Report of Working Program of 2010 and Plan for Working Program
                                       of 2011
 3.         18 January 2011
                                       Opinion of the Board of Commissioners on the establishment of Committee on
                                  2.
                                       Policies of SOE Bank
                                  3.   Bank’s participation as member of Himbara
                                  1.   Discussion on the Bank’s unaudited performance as of December 2010
 4.         25 January 2011
                                  2.   Progress on implementation of PSAK 50 & 55
                                  1.   Plan for the sale of BRI land asset
                                       Undertaking GCG Self Assessment 2010 and composing 2010 Annual Report
 5.         8 February 2011       2.
                                       materials
                                  3.   Nomination of candidates for the Bank’s Director 2011


              160                 ANNUAL REPORT 2011               PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                FOREWORD
No.          Date                                               Issues

6.    1 March 2011             Nomination of the Bank’s Board of Directors of 2011
7.    8 March 2011             Plan for sale of BRI’s land SHM No.755/Gandaria Utara (Radio Dalam)




                                                                                                              COMPANY PROFILE
8.    8 March 2011             Nomination of the Board of Directors of 2011
9.    22 March 2011            Nomination of the Board of Directors of PT Bank Agroniaga Tbk.
10.   24 March 2011            Nomination of the Board of Directors of PT Bank Agroniaga Tbk.
                               Discussion of the Bank’s Performance as of Februari 2011 with the Board
                          1.
11.   29 March 2011            of Directors




                                                                                                              MANAGEMENT DISCUSSION AND ANALYSIS
                          2.   Preparation for AGMS of 2011

                               Orientation and introduction of new members of the Board of
                          1.
                               Commissioners as per resolutions of BRI AGMS on 28 April 2011
12.   10 May 2011         2.   Working mechanism of the Board of Commissioners and their Committees
                          3.   Membership of Committees under the Board of Commissioners
                          4.   Remuneration for the Board of Directors and the Board of Commissioners
                               Review of the Board of Commissioners Decision Letter on Benefits and
13.   24 May 2011              Facilities for the Board of Directors, the Board of Commissioners and
                               Secretary to the Board of Commissioners
                          1.   Revision of BRI’s Work and Budget Plan of 2011




                                                                                                              CORPORATE GOVERNANCE
14.   7 June 2011              Additional clarification of the Supervision Report of BRI’ Business Plan for
                          2.
                               Quarter II of 2010 as requested by Bank Indonesia
15.   16 June 2011             Revision of the Bank’s Work and Budget of 2011
                               Schedule and Development of Agenda in the Board of Commissioners
                          1.
                               Working Visit
16.   21 June 2011
                               Follows-up on Bank Indonesia’s Regulation No.13/2/PBI/2011 on the
                          2.
                               Implementation of Compliance Function




                                                                                                              CORPORATE SOCIAL RESPONSIBILITY
17.   28 June 2011             Proposal on Revision of BRI’s Business Plan 2011-2013
                          1.   Review and Revision of the Board of Commissioners’ Working Guidelines
18.   26 July 2011             Revision of Working Guidelines for Committees under the Board of
                          2.
                               Commissioners (Committee’s Charter)
19.   4 August 2011            Realization of BRI’s Business Plan 2011-2013 Quarter II of 2011
                               Realization of BRI’s Business Plan 2011-2013 Quarter II of 2011 to develop
                          1.   the Supervision Report of the Board of Commissioners for Quarter I of
20.   16 August 2011           2011 to be submitted to Bank Indonesia
                               Additional Clarification of Supervision Report of BRI’s Business Plan 2011-
                          2.



                                                                                                              SUBSIDIARIES
                               2013 Quarter II of 2010 to be submitted to Bank Indonesia
21.   22 September 2011   1.   Bank’s Performance as of August 2011
                          2.   Progress on the Implementation of PSAK 50 dan 55
                               Composition of Members of Committees under the Board of
                                                                                                              BUSINESS STRATEGY


                          1.
                               Commissioners
22.   11 October 2011          Joint Decision of the Board of Commissioners and the Board of Directors
                          2.
                               on Compliance Charter
                          3.   Policy on Guidelines for Conflicting Interests
23.   18 October 2011          Work and Budget Plan of 2012 of the Board of Commissioners
24.   7 November 2011          Bank’s Business Plan 2012-2014 and Work and Budget Plan 2012
                                                                                                              FINANCIAL STATEMENTS




                               Formulation of Work and Budget Plan 2012 for the Board of
      15-16 November      1.
25.                            Commissioners
      2011
                          2.   Bank’s Business Plan 2012-2014 and Work and Budget Plan 2012
                               Opinion, advice and notes from the Board of Commissioners on the
                          1.   Proposal of BRI’s Business Plan 2012-2014 and BRI’s Work and Budget
26.   6 December 2011
                               Plan 2012
                          2.   Overseas Business Trips of the Board of Directors
                                                                                                              OTHERS




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                                                                                            161
d. Working Guidelines for the Board of                         Nomination and Remuneration Committee in
   Commissioners                                               accordance to prevailing laws and regulations,
   To perform its duties and responsibilities,                 and sanctioned in a Board of Commissioners’
   the Board of Commissioners always refer to                  Decision Letter.
   the Articles of Associations, Joints Decision
   Letters between the Board of Commissioners               f. Share Ownership
   and the Board of Directors, and the Board of                Members of the Board of Commissioners has
   Commissioners’ Guidelines.                                  disclosed their share ownership in the Bank,
                                                               that amount or exceed 5% as well as in other
  The Board of Commissioners’ Guidelines was                   bank or company (domestically and overseas).
  formulated as a guide for the Commissioners
  in discharging its duties and also as                     g. Work Program and Its execution
  implementation of GCG for the Board of                       The Board of Commissioners Work Program
  Commissioners. The Board of Commissioners’                   consist of duties, authorities, and obligation of
  Guidelines contains the duties, authorities,                 the Board of Commissioners as mentioned in
  obligations, responsibilities, work distribution,            the prevailing laws and regulations, which to
  working time, work ethic, meetings,                          supervise management decisions of the Bank,
  organizational structure and the BOC’s                       overall management in the Bank as well as the
  implementation of duties with respect to GMS.                Bank’s subsidiaries.

e. Procedures to Determine the Remuneration                    In discharging its working program, the
   for BOC                                                     Board of Commissioners is assisted by Audit
   Remuneration, Honorarium and Tantiem for                    Committee, Risk Management Supervisory
   members of the Board of Commissioners and                   Committee, Nomination and Remuneration
   the Board of Directors is determined in the                 Committee. The Board of Commissioners
   GMS.                                                        Work Program is a consolidation of work
                                                               programs from three Committees mentioned
  The Board of Commissioners submit proposal                   above.
  on remuneration, honorarium and tantiem for
  members of BOC and BOD to the GMS. The                       The Board of Commissioners utilize this work
  proposal is based on recommendation from                     program as guideline in their duties. The work
  Nomination and Remuneration Committee                        program is expected to be executed effectively
  which considers the Bank’s performance,                      by using all resources that the Board of
  business size and survey result on remuneration              Commissioners have, that is all members
  in the banking industry.                                     of the Board of commissioners including all
                                                               members of three other committees who are
  Resolution of GMS       2011 grant authority                 from external commissioners and also the
  and power to the Board of Commissioners                      Board of Commissioners Secretariat.
  to determine the amount of remuneration
  and honorarium of 2011 and tantiem of 2010                   Implementation of BOC’s work program
  for Directors and member of BOC, with                        throughout 2011 resulted in several approvals,
  prior approval from the Series A Dwiwarna                    opinions, responses and recommendations
  Shareholder. Based on those authority and                    from the BOC to the BOD, as follows:
  power, the Board of Commissioners has                        (1)   Approval on the Revision of The Bank’s
  determined the amount of the above mentioned                       Work and Budget Plan of 2011
  remuneration, honorarium and tantiem and has                 (2)   Approval on the Revision of BRI’s
  received approval from the Series A Dwiwarna                       Business Plan 2011-2013
  Shareholder on 27 July 2011.                                 (3)   Approval on the Bank’s Work and Budget
                                                                     Plan of 2012
  Facilities and other benefits for members of                 (4)   Approval on BRI’s Business Plan 2012-
  BOC and BOD are determined by BOC with                             2014
  authority from GMS in accordance with Article                (5)   Additional Clarification to the Supervision
  of Association. Benefits and facilities for                        Report on Realization of BRI’s Business
  Directors and members of BOC in 2011 has                           Plan for Quarter I 2010
  been reviewed upon the recommendation of                     (6)   Supervision Report on Realization of
                                                                     BRI’s Business Plan for Quarter II 2010.



      162               ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                   FOREWORD
(7)     Additional Clarification to the Supervision                the Board of Directors, the Board of




                                                                                                                 COMPANY PROFILE
        Report on Realization of BRI’s Business                    Commissioners and Secretary to the
        Plan for Quarter II 2010                                   Board of Commissioners.
(8)     Supervision Report on Realization of                (25)   Recommendation on the Extension
        BRI’s Business Plan for Quarter I 2011.                    of Working Tenure of Members of
(9)     Additional Clarification to the Supervision                Committees under the Board of
        Report on Realization of BRI’s Business                    Commissioners.




                                                                                                                 MANAGEMENT DISCUSSION AND ANALYSIS
        Plan for Quarter I 2011.                            (26)   Proposal of Candidates for the Board of
(10)    Opinions of the Board of Commissioners                     Directors of PT Bank Agroniaga, Tbk.
        on the Realization of Bank’s Business               (27)   Approval on the proposal of Candidate
        Plan and the Bank’s Soundness for                          for President Commissioner of PT Bank
        Quarter IV 2010.                                           BRISyariah.
(11)    Opinions of the Board of Commissioners              (28)   Feedback on Report of Summaries of
        on the Realization of Bank’s Business                      Internal Audit Result for Quarter III 2010.
        Plan and the Bank’s Soundness for                   (29)   Feedback on Report of Summaries of
        Quarter II 2011.                                           Internal Audit Result for Quarter IV 2010
(12)    Result of Supervision of Financial Report                  and Plan for Annual Audit of 2011.
        2010 of BRI’s Financial Institution                 (30)   Feedback on Plan for Annual Audit of
        Pension Plan.                                              2011.




                                                                                                                 CORPORATE GOVERNANCE
(13)    Approval     on      Founder’s      Written         (31)   Feedback on Report of Internal Audit
        Statement with regards to Changes of                       Results for Quarter I 2011.
        Regulations of BRI’s Pension Plan.                  (32)   Feedback on BRI’s Priority Banking
(14)    Consultation on Loan by Board of                           Audit.
        Directors to Board of Commissioners.                (33)   Approval and Appointment of Registered
(15)    Approval for Funding Provision to BRI’s                    Public Accountant for General Audit on
        Related Party.                                             BRI’s Financial Reports for Financial




                                                                                                                 CORPORATE SOCIAL RESPONSIBILITY
(16)    Approval on Loan Consultation.                             Year 2011-2013.
(17)    Approval on Bank’s Participation as                 (34)   Approval in Principle for the Appointment
        Member of Himbara.                                         of Registered Public Accountant by
(18)    Approval on the Draft of Circular Letter                   Supervisory Board of BRI’s Financial
        of     BRI’s Baitul Maal Foundation,                       Institution Pension Plan.
        with regards to the Management of                   (35)   Recommendations and Advises with
        Professional Alms of BRI’s Employees.                      regards to results of the Board of
(19)    Approval on the BOD’s Circular Letter on                   Commissioners visit to several BRI’s
        the Implementation of Risk Management                      operating units.
        with regards to Utilization of Information          (36)   Recommendations and Advises with
        Technology.                                                regards to Follow-ups to Meeting of the



                                                                                                                 SUBSIDIARIES
(20)    Approval on BRI’s Pension Plan                             Board of Commissioners and the Board
        Decision Letter on the Guidelines for                      of Directors and the Head of Divisions.
        the Implementation of Know-Your
        -Customer Principle.                           2. Completion and execution of Duties
                                                                                                                 BUSINESS STRATEGY



(21)    Feedback on the Draft of the BOD’s                of the Committees Under the Board of
        Circular Letter on the BRI’s Policy of            Commissioners
        Guidelines for Conflicting Interest.
(22)    Joint Decision Letter of the Board                a. Audit Committee
        of Commissioners and the Board of
        Directors on BRI’s Compliance Charter.              The    establishment     of BRI’s  Audit
(23)    Determination of Remuneration for the               Committee      is     based  upon    the
                                                                                                                 FINANCIAL STATEMENTS




        Board of Directors and the Board of                 Decision of      Chairman of Bapepam-LK
        Commissioner in 2011.                               No. KEP-29/PM/2004 of 24 September
(24)    Decision Letter of the Board of                     2004 with regards to Establishment and
        Commissioners on Remuneration for                   Work Implementation Guidelines of Audit
                                                            Committee;
                                                                                                                 OTHERS




            163
       ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                            163
Decision of Minister of State-Owned Enterprises             Composition of Audit Committee for the period of 29
No. 117/M-MBU/2002 of 31 July 2002 on the                   April 2011 – 28 September 2011:
Implementation of GCG in State-Owned Enterprise;
Bank Indonesia Regulation (PBI) No. 8/4/                                 Name             Position         Profession
PBI/2006 as amended by PBI No. 8/14/PBI/2006
                                                                                                      Vice President
on Implementation of Corporate Governance in
                                                                                                      Commissioner
Commercial Bank; Law No. 19 of 2003 dated 19 June                Soedarjono *            Chairman
                                                                                                      / Independent
2003 on State-Owned Enterprise; and Committee
                                                                                                      Commissioner
Audit Charter. Audit Committee is established with
                                                                                                      President
the aim of assisting the Board of Commissioners
                                                                                                      Commissioner
in its duties and supervisory function, as well as               Bunasor Sanim           Member
                                                                                                      / Independent
in providing advises to the Board of Directors on
                                                                                                      Commissioner
matters related to financial information, internal
control system, effectiveness of external and internal           Hermanto Siregar **     Member       Commissioner

auditor, effectiveness in implementation of risk                 H.C. Royke Singgih      Member       Non Commissioner
management and compliance to the prevailing laws                 Dedi Budiman Hakim      Member       Non Commissioner
and regulations.                                                 Syahrir Nasution        Member       Non Commissioner
                                                             *  effective of 18 August 2011 as Vice President Commissioner
Structure, Members, expertise and Independency                  /Independent Commissioner of BRI after approval from Bank
                                                                Indonesia on his fit and proper test. Based on resolution of
of Member of Audit Committee
                                                                BRI EGMS on 28 September 2011, he resigned from this
BRI’s Audit Committee comprises of one Chairman                 position.
who is an Independent Commissioner, one member               ** effective of 12 July 2011 as Commissioner of BRI after
                                                                approval from Bank Indonesia on his fit and proper test.
who is also an Independent Commissioner, a
member who is a Commissioner, and three non-
                                                             The composition of Audit Committee for the period
Commissioners members who are experts in finance,
                                                             of 29 September 2011 – 31 December 2011:
accounting, legal and banking. This composition has
met the requirement stipulated in the Decision of
                                                                         Name             Position         Profession
Chairman of Bapepam-LK No. Kep-29/PM/2004 and
Bank Indonesia Regulation (PBI) No. 8/4/PBI/2006                                                      President
as amended by PBI No. 8/14/PBI/2006.                                                                  Commissioner/
                                                                 Bunasor Sanim           Chairman
                                                                                                      Independent
The composition of BRI’s Audit Committee for the                                                      Commissioner
period of 1 January 2011 – 28 April 2011 are as                                                       Independent
                                                                 Adhyaksa Dault          Member
follows:                                                                                              Commissioner
                                                                 Hermanto Siregar        Member       Commissioner
        Name            Position       Profession                H.C. Royke Singgih      Member       Non Commissioner
 Baridjussalam Hadi    Chairman     Independent                  Dedi Budiman Hakim      Member       Non Commissioner
                                    Commissioner                 Syahrir Nasution        Member       Non Commissioner
 Bunasor Sanim         Member       President
                                    Commissioner/
                                    Independent
                                    Commissioner
 Soedarjono            Member       Vice President
                                    Commissioner
 H.C. Royke Singgih    Member       Non
                                    Commissioner
 Dedi Budiman Hakim    Member       Non
                                    Commissioner
 Syahrir Nasution      Member       Non
                                    Commissioner




          164              ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                    FOREWORD
Profile of Members of Audit Committee                                  Development and Financial Control (BPKP), Jakarta




                                                                                                                                  COMPANY PROFILE
The profiles of Bunasor Sanim, Adhyaksa Dault, and                     up to 1990, career banker with BRI from 1990 to 2008
Hermanto Siregar are presented on the Member of                        in the field of audit and last position as Inspector
the Board of Commissioner Profile section.                             at the BRI’s Inspection Office, Jakarta. He holds a
                                                                       degree in economics and accountancy from Institute
H.C. Royke Singgih – Born in Jakarta, in 1960.                         of Finance, Department of Finance, Jakarta (1981).
Has been member of the Audit Committee since




                                                                                                                                  MANAGEMENT DISCUSSION AND ANALYSIS
October 2005. He is a certified public accountant.                     Duties and Responsibilities of Audit Committee
Previously he served at PT Bank IFI Jakarta,
PT PAN Indonesia Bank Jakarta, and PT Krakatau                         According to Audit Committee Charter dated 03
Steel Cilegon. He earned a degree in accountancy                       August 2011, Audit Committee was established by
from Gajah Mada University, Yogyakarta (1986), a                       Board of Commissioners with the aim to support the
master in management degree in finance and banking                     effectivity of Board of Commissioners in discharging
from University of Indonesia, Jakarta (2000), holds                    its duties and responsibilities, especially with regards
a Special Certification for Strategic Management                       to its supervision function to increase public trust
Studies, Pre Doctoral Program, University of                           towards management of the Bank.
Indonesia, Jakarta (2004), and currently is pursuing
his Doctorate degree in business management at                         In 2011 the Audit Committee have done their duties
Bogor Agriculture University, IPB since 2007.                          and responsibilities in accordance with the Audit




                                                                                                                                  CORPORATE GOVERNANCE
                                                                       Committee Charter. In conducting its meetings
Dedi Budiman Hakim – Born in Sumedang, in 1964.                        with the Bank’s working units, through the Board of
Has been member of the Audit Committee since                           Commissioner, the Audit Committee required some
November 2005. Currently serving as a Faculty                          subordinating managements to attend the meetings
Member of the Bogor Agricultural University (IPB)                      and to provide necessary relevant information
and a researcher at the Center for Applied Finance                     especially in Bank’s internal control and risk
and Economics IPB, Bogor. He holds a degree                            management.




                                                                                                                                  CORPORATE SOCIAL RESPONSIBILITY
in agronomics science from Institut Pertanian
Bogor, Bogor (1988), a master of arts degree                           frequency of the Audit Committee Meetings
in agricultural social economics from Massey                           Meetings were attended by Internal Audit, Financial
University, Palmerston North, New Zealand (1994),                      and Management Accounting Division, Credit
and a doctorate in agriculture from Georg-August-                      Program Division, Public Accounting Firm of PSS
Universitaet Goettingen, Germany (2004).                               Ernst & Young and Pricewaterhouse Coopers.

Syahrir Nasution – Born in Pematang Siantar, in                        Audit Committee convened 16 times during 2011
1952. Has been member of the Audit Committee                           with attendance of members of Audit Committee as
since November 2008. He is a Certified Public                          follows:
Accountant. Previously served at State Agency for



           Name                 Total of Meetings          Attendance                           Attendance (%)                    SUBSIDIARIES
                                                                                                                                  BUSINESS STRATEGY


 Baridjussalam Hadi *                    8                        8                                   100.00
 Soedarjono **                           14                      14                                   100.00
 Bunasor Sanim                           16                      15                                    93.75

 Adhyaksa Dault                          3                        3                                   100.00
 Hermanto Siregar ***                    8                        7                                    87.50
 H.C. Royke Singgih                      16                      16                                   100.00
                                                                                                                                  FINANCIAL STATEMENTS




 Dedi Budiman Hakim                      16                      14                                    87.50
 Syahrir Nasution                        16                      16                                   100.00

*   effective of 29 April 2011 was no longer Commissioner, Chairman and Member of Audit Committee of BRI.
** effective of 29 September 2011 was no longer Commissioner, Chairman and Member of Audit Committee of BRI.
*** effective of 12 July 2011 as Commissioner of BRI after approval from Bank Indonesia on his fit and proper test.
                                                                                                                                  OTHERS




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                                                                                                                 165
Meetings and Activities of Audit Committe throughout 2011 were as follows:

 No.    Related Party/Work Unit       Date                  Agenda

                                      20 Jan 2011           Implementation of PSAK 50-55
                                      01 Mar 2011           Implementation of General Audit financial year 2010
 1.     KAP PSS Ernst & Young         12 Sept 2011          Discussion of Public Accountant Firm 2011
                                      27 Oct 2011           Implementation of General Audit financial year 2011
                                      18 Nov 2011           General Audit Kick-off financial year 2011
                                      19 Jan 2011           Discussion on Auditor as Strategic Business Partner
                                      24 Mar 2011           Discussion on Report of Audit Result Q IV of 2010
 2.     Internal Audit
                                      28 June 2011          Discussion on Report of Audit Result Q I of 2011
                                      25 Oct 2011           Discussion on Report of Audit Result Q II of 2011
                                      14 Jan 2011           Discussion of Implementation of PSAK 50-55
        Financial and
                                      19 May 2011           Discussion of Public Accountant Firm 2011
 3.     Management Accounting
                                      31 May 2011           Discussion of Public Accountant Firm 2011
        Division
                                      18 July 2011          Discussion of Public Accountant Firm 2011
                                                            Audit on Financial Report of Partnership and Community
        Business Program              30 Mar 2011
 4.                                                         Development Program for financial year 2010
        Division
                                      5 April 2011          Partnership and Community Development Program
        Pricewaterhouse                                     Development and Implementation of Internal Control
 5.                                   13 Sept 2011
        Coopers                                             System

Report of Audit Committee Work Plan                                   vii. Together with Nomination and Remuneration
                                                                           Committee, Risk Management Supervisory
The Audit Committee has implemented its work plan                          Committee and Secretary to the BOC,
in 2011 as follows:                                                        reviewed the approval from BOC on proposal
                                                                           and revision of the Bank’s Business Plan and
(1) Internal Activities                                                    Work and Budget Plan.
    i. Formulated Audit Committee plan and work                      viii. Together with Nomination and Remuneration
         program for 2012, which is an elaboration of                      Committee, Risk Management Supervisory
         the Audit Committee Charter.                                      Committee and Secretary to the BOC,
    ii. Together with Nomination and Remuneration                          reviewed the development of the Bank’s
         Committee, Risk Management Supervisory                            monthly performances and provided advice
         Committee and Secretary to the BOC                                and opinion to the BOC for clarification from
         formulated the BOC’s plan and work program                        the BOD in the meetings between BOC and
         for 2012.                                                         BOD.
    iii. Convened regular meetings with Internal Audit
         Division to discuss internal control system,             (2) external Activities
         audit findings especially those which are                    i. Attended seminars related to Audit Committee
         deemed to have potential risk that could affect                   functions, such as those conducted by The
         the business continuity of the Bank.                              Institute of Internal Auditor (IIA) Indonesia
    iv. Convened meetings with Financial and                               Chapter and the Indonesian Audit Committee
         Management Accounting Division and other                          Association to increase competencies and
         related Division to discus progress on financial                  capabilities of Audit Committee.
         performance of the Bank and other financial                  ii. Held discussions with external auditors,
         informations.                                                     whether before or after investigations regarding
    v. Undertook evaluation and provided written                           audit findings in the financial reports of the
         report to the Board of Commissioners of all the                   Bank.
         above mentioned meetings and assignments                     iii. Held      discussions     with    other     party
         given to Audit Committee.                                         (Pricewaterhouse Coopers), especially those
    vi. Convened meetings with Public Accountant                           related to the enhancement of the internal control
         Firm with regards to implementation of the                        system.
         Bank’s financial report audit.



          166                ANNUAL REPORT 2011               PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                        FOREWORD
b. Nomination and Remuneration Committee                     Composition of NRC for the period of 29 September




                                                                                                                      COMPANY PROFILE
   (NRC)                                                     2011 – 31 Desember 2011:

  Establishment of Nomination and Remuneration                Name                    Position   Profession
  Committee was based on decree of the Minister of
  State-Owned Enterprise No. 117/M-MBU/2002 31                Adhyaksa Dault          Chairman Independent

  July 2002 regarding the implementation of Good                                                 Commissioner




                                                                                                                      MANAGEMENT DISCUSSION AND ANALYSIS
  Corporate Governance in State-Owned Enterprise;             Aviliani                Member     Independent
  Bank Indonesia Regulation (PBI) No. 8/4/PBI/2006                                               Commissioner
  as amended by PBI No. 8/14/PBI/2006 regarding               Heru Lelono             Member     Commissioner
  the implementation of Good Corporate Governance             Executive Officer       Member     Non Commissioner/
  in Commercial Bank; and Law No. 19 of 2003 dated            (Head of HR Division)              Executive Officer
  19 June 2003 regarding State-Owned Enterprise.              Kanyatama P. Mulyono Member        Non Commissioner
  At BRI, there is no separation between Nomination           Asep Ikhsan Iskandar    Member     Non Commissioner
  Committee and Remuneration Committee.
                                                             Profile of Members of NRC
  Structure,    Membership,      expertise    and            Profile of Adhyaksa Dault, Aviliani, and Heru Lelono
  Independency of NRC Members                                are presented at the section of profile of Members of
  Nomination and Remuneration Committee of                   Board of Commissioners.




                                                                                                                      CORPORATE GOVERNANCE
  BRI consists of a Chairperson (Independent
  Commissioner), a member (Independent                       Ganefi – Born in Jakarta in 1963. Built his carreer
  Commissioner) a member (Commissioner), an                  at BRI since 1989 in various positions, currently
  executive officer i.e Head of Human Resources              serving as Deputy Head of Human Resources
  Division, and two non-Commissioners member                 Management Division, and also Interim Head of
  with vast knowledge in remuneration and/or                 Human Resources Division of BRI. Earned a degree
  nomination and bank’s succession plan. This                in Fiscal Administration for the Faculty of Social and




                                                                                                                      CORPORATE SOCIAL RESPONSIBILITY
  composition is in accordance with Bank Indonesia           Political Sciences of the University of Indonesia,
  Regulation (PBI) No. 8/4/PBI/2006 as amended               Jakarta (1989), and a Master of Business from
  by PBI No. 8/14/PBI/2006.                                  Monash University, Australia (1994).

  Composition of the Nomination and Remuneration             Kanyatama P. Mulyono – Born in Jakarta in 1972.
  Committee for the period of 1 January 2011 – 28            Has been the member of the Nomination and
  September 2011 were as follows:                            Remuneration since November 2009. Previously
                                                             served as an auditor at Haga Bank and Public
                                                             Accountant Firm KPMG and later as consultant and
Name              Position   Profession                      lecturer at Management Institution of Economic
                                                             Faculty in University of Indonesia (LM-FEUI).



                                                                                                                      SUBSIDIARIES
Bunasor Sanim     Chairman   President Commissioner/
                             Independent                     Earned her bachelor’s degree in economics from
                             Commissioner                    the University of Indonesia (1996), and Master of
Aviliani          Member     Independent                     Science in industrial and organizational psychology
                             Commissioner                    from the University of Indonesia (2004).
                                                                                                                      BUSINESS STRATEGY



Heru Lelono       Member     Commissioner
Executive         Member     Non Commissioner/               Asep Ikhsan Iskandar – Born in Tasikmalaya in
Officer (Head                Executive Officer               1972. Has been member of the Nomination and
HR Division)                                                 Remuneration since November 2009. Began his
                                                             career with BRI since 1998 in various position, and
Kanyatama P.      Member     Non Commissioner
                                                             currently holds the position as staff in BRI’s Human
Mulyono
                                                             Resources Division. Earned his bachelor’s degree in
                                                                                                                      FINANCIAL STATEMENTS




Asep Ikhsan       Member     Non Commissioner
                                                             economics accounting from the Pasundan University,
Iskandar
                                                             Bandung (1969).
                                                                                                                      OTHERS




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                                                                                                    167
Duties and Responsibilities of NRC                                (2) function of Remuneration
Based on the Charter of the Nomination and                            i. Evaluate prevailing remuneration policies for
Remuneration Committee dated 3 August 2011,                                the Board of Commissioners, the Board of
the Nomination and Remuneration Committee was                              Directors and BRI employees.
established by the Board of Commissioners to support                  ii. Recommend to the Board of Commissioners
the effectiveness of the Board of Commissioners’                           of the followings:
duties and responsibilities, especially those related                      - Remuneration policies for the Board of
to nomination and remuneration policies.                                       Commissioners and the Board of Directors.
                                                                           - Overall remuneration policies for executive
(1) function of Nomination                                                     officers and employees, to be submitted to
    i. Analyze,         formulate      and       provide                       the Board of Directors.
         recommendation concerning system and                         iii. Recommend the granting of options to
         procedures of election and/or replacement                         the Board of Commissioners, the Board of
         of members of the Board of Commissioners                          Directors and the employees of BRI, among
         and the Board of Directors to the Board of                        others stock option.
         Commissioners.                                               iv. Recommend the pension plan system for the
    ii. Recommend candidates for member of the                             Bank’s employees.
         Board of Commissioners and/or Directors to                   v. Recommend the system of compensation
         the Board of Commissioners.                                       and other benefits in the case of employee
    iii. Monitor the execution and analyze the criteria                    downsizing.
         and procedure of selection for officers one
         level below that of the Board of Directors.              (3) Other functions
    iv. Formulate performance evaluation system of                    i. Evaluate and provide recommendations to
         the Board of Commissioners and Directors.                         the Board of Commissioners on employment
    v. Recommend the number of members of the                              policies and other functions in HR management
         Board of Commissioners and the Board of                           that may have a significant impact on financial
         Directors.                                                        and/or legal risk to the Bank.
    vi. Provide opinion or advice to the Board of                     ii. Provide recommendations to resolve internal
         Directors regarding BOD’ decision on transfer                     and/or external audit findings and the results
         and/or hiring of professionals to become                          of monitoring activities by Bank Indonesia,
         officers one level below the Board of Directors.                  especially on policies in HR management.
    vii. Analyze the information on executives one                    iii. Administer documents related to the duties
         level below the Board of Directors, and to                        and responsibilities of the Committee.
         submit the data to the Board of Directors
         regularly every quarter and everytime change             frequency of NRC Meetings
         in the data occurs.                                      The Nomination and Remuneration Committee held
    viii.Recommend to the Board of Commissioners                  13 meetings throughout 2011 with attendance of
         concerning Independent Parties that will be              members of the Committee as follows:
         members of the Audit Committee or the Risk
         Management Supervisory Committee.


                      Name                             Total Meetings          Attendance            Attendance (%)

 Bunasor Sanim*                                              13                     12                     92.31
 Aviliani                                                    13                     11                     84.61
 Heru Lelono                                                 13                     10                     76.92
 Executive Officer (Head of HR Division)                     13                      7                     53.85
 Kanyatama P. Mulyono                                        13                     13                    100.00
 Asep Ikhsan Iskandar                                        13                     13                    100.00
* effective since 29 September 2011 was not member of NRC.




            168               ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                      FOREWORD
Meetings held by the Nomination and Remuneration Committee throughout 2011 were as follows:




                                                                                                                    COMPANY PROFILE
 No           Date                                               Agenda

 1.    28 January 2011       Meeting with the Board of Commissioners on the nomination process of
 2.    14 February 2011      Directors
 3.    16 February 2011




                                                                                                                    MANAGEMENT DISCUSSION AND ANALYSIS
 4.    01 March 2011         Meeting with the Board of Commissioners on the Results of Nomination Process
                             of Directors
 6.    08 March 2011         Meeting with the Board of Commissioners on the Recommendation regarding
                             Result of Nomination of Directors
 7.    22 March 2011         Meeting with the Board of Commissioners regarding the proposal of the Board
                             of Directors on the Nomination of Directors and Commissioners for Subsidiary
                             Company (PT. Bank Agroniaga Tbk.)
 8.    24 March 2011         Nomination of Management and Plan of Development of Subsidiary Company
                             (PT. Bank Agroniaga Tbk.)
 9.    12 April 2011         Meeting with the Board of Commissioners on the Remuneration for the Board of
 10.   10 May 2011           Directors and the Board of Commissioners to be proposed at the AGMS 2011




                                                                                                                    CORPORATE GOVERNANCE
 11.   24 May 2011           Review of Policies of Remuneration for the Board of Directors and the Board of
 12.   01 August 2011        Commissioners
 13.   02 August 2011        Meeting with the Board of Commissioners regarding Policies of Remuneration for
                             Board of Directors and Board of Commissioners




                                                                                                                    CORPORATE SOCIAL RESPONSIBILITY
Report of NRC’s Work Program                              (7) Provided recommendation to the Board of
                                                              Commissioners on the independent party who
During 2011, Nomination and Remuneration                      will become member of Risk Management
Committee activities are as follows:                          Supervisory Committee.
(1) Formulated the 2012 plan and work program of          (8) Provided recommendation to the Board of
    the Committee which was an elaboration of the             Commissioners regarding committee member’s
    Nomination and Remuneration Charter.                      years of service extension under the Board of
(2) Together with the Audit Committee, Risk                   Commissioners.
    Management Supervisory Committee and                  (9) Provided feedback and recommendation to the
    Secretary to the Board of Commissioners                   Board of Commissioners regarding policies in HR



                                                                                                                    SUBSIDIARIES
    formulated the 2012 plan and work program for             management, Covering:
    the Board of Commissioners.                               i. Feedback and advice from BOC to BOD to
(3) Together with the Board of Commissioner                        always implement reward and punishment in
    undertook the nomination of Directors.                         an objective and transparent manner, in order
                                                                                                                    BUSINESS STRATEGY


(4) Undertook review and analysis on the Board                     to increase performance of employees.
    of Directors and the Board of Commissioners               ii. Implementation of HR Policies was deemed
    remuneration in accordane to the Bank’s                        adequate and in accordance with BRI’s
    performance, business size and result of                       Architecture of Human Resource.
    remuneration survey in banking industry.                  iii. Feedback and advice to the Board of Directors
(5) Provided feedback and recommendation to the                    to continuously undertake monitoring on
    Board of Commissioners based on prevailing                     coordination between operating units related
                                                                                                                    FINANCIAL STATEMENTS




    regulations, regarding the approval of BRI’s BOC               to Human Resources Division.
    on the proposal for Directors and Commissioners           iv. Commitment of the Bank Management to
    for Subsidiary Company.                                        deliver appreciation to active employees and
(6) Provided feedback and recommendation to the                    attention to the well-being of BRI’s retirees.
    Board of Commissioners regarding approval
    of BOC on Founder’s Written Statement with
    regards to Changes in the Regulation of BRI’s
                                                                                                                    OTHERS




    Pension Plan.




                169
          ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                               169
   v. Communication and internalization of BRI’s               Composition of RMSC for the period of 1 January
       corporate culture in every visit to operating unit      2011 – 28 September 2011:
       throughout 2011.
   vi. Feedbacks and advises from BOC to BOD                               Name             Position       Profession
       to undertake strategic steps regarding the
                                                                Aviliani                  Chairman Independent
       implementation of BI’s Regulation PBI No.
                                                                                                   Commissioner
       13/25/PBI/2011 dated 9 December 2011 on
       Prudential Principles for Commercial Bank                Adhyaksa Dault            Member        Independent
       who Subcontract Partial Execution of Work to                                                     Commissioner
       Other Party.                                             Agus Suprijanto           Member        Commissioner
(10) Together    with     Audit    Committee,       Risk        Ridwan Darmawan           Member        Non
     Management Supervisory Committee, and                      Ayub                                    Commissioner
     Secretary to the BOC, undertook review to                  I Gede Yadnya             Member        Non
     support BOC in giving approval toward proposal             Kusuma                                  Commissioner
     and revision on the Bank Business Plan as well
     as the Bank Work and Budget Plan.
(11) Together    with     Audit    Committee,       Risk        Composition of RMSC for the period of 29 September
     Management Supervisory Committee, and                      2011 - 31 December 2011:
     Secretary to the BOC, reviewed the monthly
     performance of the Bank and provided advice                       Name            Position         Profession
     and opinion to the BOC for further clarification           Aviliani              Chairman Independent
     from BOD in meetings between BOC and BOD.                                                 Commissioner
(12) Undertook visit to operating units.
                                                                Agus                  Member       Commissioner
(13) Executed other duties at the request of the
                                                                Suprijanto
     BOC.
                                                                Bunasor               Member       President
                                                                Sanim                              Commissioner/
c. Risk Management Supervisory Committee
                                                                                                   Independent
   (RMSC)
                                                                                                   Commissioner

   Establishment of Risk Management Supervisory                 Ridwan                Member       Non Commissioner
   Committee pursuant to the decree of Minister of              Darmawan Ayub
   State-Owned Enterprise No. 117/M-MBU/2002                    I Gde Yadnya          Member       Non Commissioner
   regarding the GCG implementation in State                    Kusuma
   Owned Enterprise and Bank Indonesia Regulation               Pamuji Gesang         Member       Non Commissioner
   No. 8/4/PBI/2006 as amended by BI Regulation                 Raharjo *)
   No. 8/14/PBI/2006 on the implementation of                   *) effective of 29 September 2011 served as member of RMSC
   Corporate Governance in commercial bank.
                                                                Profile of Members of RMSC
   Structure, Membership,    expertise              and         The profile of Aviliani, Agus Suprijanto, Adhyaksa
   Independency of Members of RMSC                              Dault and Bunasor Sanim are presented in the
                                                                section of Profile of Members of BOC of this annual
   BRI’s RMSC consists of a chairperson who is an               report.
   Independent Commissioner, one member who is
   an Independent Commissioner, one member who                  Ridwan Darmawan Ayub – Born in Bogor, in
   is a Commissioner and three non-Commissioner                 1962. He has been member of Risk Management
   members who have expertise in finance and                    Supervisory Committee since 2006. Previously he
   risk management. The structure, membership                   was a career banker at Bank International Indonesia,
   and expertise of the Committee has met the                   holding various positions. He holds a bachelor’s
   requirements of BI Regulation No. 8/4/PBI/2006               degree in social and political science from the
   as amended by BI Regulation PBI No. 8/14/                    Parahyangan Catholic University, Bandung (1985),
   PBI/2006.                                                    and a master of management degree in finance from
                                                                Mercu Buana University, Jakarta (2008).




          170                ANNUAL REPORT 2011             PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                     FOREWORD
I Gde Yadnya Kusuma – Born in Singaraja Bali, in          (2) Monitors the adequacy of the identification,




                                                                                                                   COMPANY PROFILE
1954. He has been member of the Risk Management                measurement, monitoring, controlling and risk
Supervisory Committee since July 2010. Previously,             management information system process.
he had his career at Bank Indonesia in various            (3) Evaluates and analyses quarterly risk profile
positions and in Indonesian Financial Transaction              of the Bank and provides opinions in the form
Reports and Analysis Center (PPATK) as Director                of suggestion and/or recommendation for
of Research and Analysis. He holds a bachelor’s                necessary improvement and enhancement.




                                                                                                                   MANAGEMENT DISCUSSION AND ANALYSIS
degree in Economics from “Sekolah Tinggi Ilmu             (4) Reviews and evaluates the reports from The
Ekonomi Swadaya”, Jakarta (1993) and a Master of               Board of Directors on their implementation of
Economics from the University of Indonesia, Jakarta            risk management, every quarter at the least.
(2006).                                                   (5) Evaluates and analyses the suggestion package
                                                               from the Board of Directors on funding for
Pamuji Gesang Raharjo – Born in Jakarta, in 1968.              related parties that requires approval from the
He has been member of the Risk Management                      Board of Commissioners.
Supervisory Committee for the period of 2007-             (6) Evaluates and reviews the annual budget,
2010. Previously he held various positions at BNI              business plan and corporate plan for the approval
46, Bank Danahutama, Bank International Indonesia              of the Board of Commissioners.
and Perum Pegadaian as General Manager of Risk            (7) Monitors and/or provides feedback on reports
Management (June 2010 - March 2011). Active                    of realization of the Bank’s business plan and




                                                                                                                   CORPORATE GOVERNANCE
as lecturer at the Institute for the Development               work and budget plan.
of Indonesia Banking Industry (LPPI). He holds            (8) Evaluates and analyses loan package above a
a bachelor’s degree in Economics from Prof. Dr.                certain amount that requires consultation with
Moestopo University, Jakarta (1996), and a master              the Board of Commissioners.
of management in Risk Management from the                 (9) Evaluates results of monitoring on the Bank’s
University of Indonesia, Jakarta (2003). Currently, he         compliance to Bank Indonesia regulations and
is pursuing a doctorate program in management and              other laws and regulations.




                                                                                                                   CORPORATE SOCIAL RESPONSIBILITY
business at the Bogor Agriculture University (IPB)        (10) Perform other duties as requested by the Board
(2010).                                                        of Commissioners.

Duties and Responsibilities of RMSC                       Meeting frequency of RMSC
According to Risk Management Supervisory                  Considering the vast scope and interrelatedness
Committee Working Guide, RMSC helps the Board             between each type of the Bank’s risk, the risk
of Commissioners in its duties and responsibilities       management implementation is discussed not only
to evaluate and ensure that implementation of the         in RMSC meetings, but also as agenda in Board of
Bank’s risk management meets the procedural               Commissioners meetings.
requirements and risk management method. so
that the Bank’s activities are within manageable and      In 2011, RSMC held both internal meetings, and



                                                                                                                   SUBSIDIARIES
acceptable level and within profitable limits.            meetings with related Divisions/Operating Units
In general, the duties and responsibilities of RMSC       in order to evaluate the implementation and
are as follows:                                           management of risk management, covering Market
(1) Regularly evaluate and review the risk                Risk, Liquidity Risk, Credit Risk, Operational Risk,
                                                                                                                   BUSINESS STRATEGY



     management policies and provide opinions in the      Legal Risk, Compliance Risk, Strategic Risk and
     forms of suggestions and/or recommendations          Reputation Risk as stipulated in prevailing BI
     to the Board of Commissioners for their              regulations.
     consideration concerning the necessary
     improvement and enhancement of risk
     management policies.
                                                                                                                   FINANCIAL STATEMENTS
                                                                                                                   OTHERS




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          ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                              171
Risk Management Supervisory Committee held 18 meetings in 2001 with attendance of each member of the
Committee as follows:

 Name                                                 Total Meetings               Attendance          Attendance (%)

 Aviliani                                                    18                        16                   88.89
 Agus Suprijanto                                             18                        14                   77.78
 Adhyaksa Dault *                                            14                        12                   85.71
 Bunasor Sanim **                                                4                      4                   100.00
 Ridwan Darmawan Ayub                                        18                        16                   88.89
 I Gde Yadnya Kusuma                                         18                        17                   94.44
 Pamuji Gesang Raharjo **                                        4                      4                   100.00
* effective of 29 September 2011 was no longer member of RMSC.
** effective of 29 September 2011 as member of RMSC.

In 2011 RMSC undertook meetings and activities as follows:


            Party/Related Working
 No.                                         Date                                        Issues
                     Unit
1.      Risk Management               1 Feb 2011           1. Report of BRI Risk Profile Quarter IV 2010
        Division                                           2. Role and Function of Risk Management Group Head in
                                                              Regional Offices
2.      Legal Division                15 Mar 2011          Management of Legal Risk
3.      Credit Card Division          5 April 2011         Management of Risk and Performance of Credit Card
                                                           Division
4.      Risk Management               4 July 2011          Report of BRI Risk Profile Quarter II 2011
        Division
5.      Compliance Division           5 July 2011          - Management of Compliance Risk
                                                           - Follow-up action on the implementation of BI Regulation
                                                           No. 13/2/PBI/2011
6.      Operational Center            13 Sept 2011         Management of Risk and Work Program of Operational
        Division                                           Center Division
7.      Risk Management               20 Des 2011          Report of BRI Risk Profile Quarter III 2011
        Division
8.      - Commercial Business         Jan – Des 2011       Credit consultations, in 11 (eleven) meetings
        Directorate
        - Institutional and SOE
        Business Directorate



Report of RMSC Work Program                                          (4)   Undertook review to obtain approval from BOC
                                                                           on Policies of Guidelines for the Implementation
In 2011, RMSC undertook the following actions:                             of Know-Your-Customer Principle for BRI’s
(1) Composed the 2012 work plan of Risk                                    Pension Plan.
     Management Supervisory Committee which                          (5)   Provided feedbacks and opinions on loan
     was an elaboration of RMSC Charter.                                   facility that require consultation by BOD to
(2) Together with Audit Committee, Nomination                              BOC.
     and Remuneration Committee and Secretary to                     (6)   Provided feedbacks on draft of Policies on
     the BOC, composed 2012 work plan for BOC.                             Conflict of Interest.
(3) Undertook review to obtain approval from BOC                     (7)   Undertook evaluation on Report of Performance
     on Policies of Risk Management Implementation                         of the Bank’s Loan Portfolio.
     in the Use of Information Technology.                           (8)   Undertook evaluation on BOD’s Circular Letters
                                                                           related to implementation of risk management.




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                                                                                                                FOREWORD
(9)  Undertook review on quarterly reports on            (13) Discussed the improvement of Guideline for




                                                                                                              COMPANY PROFILE
     Bank’s Risk Profile.                                     Measurement of Bank Soundness Level based
(10) Undertook review on monthly reports and half-            on Risk.
     yearly reports of Director of Compliance.           (14) Accompanied BOC in the communication of
(11) Together with Audit Committee, Nomination                the Decision of Minister of SOE No. KEP-236/
     and Remuneration Committee and Secretary                 MBU/2011 and workshop held by the Ministry
     to the BOC undertook review on proposal and              of SOE on formulation of Budget and Work Plan




                                                                                                              MANAGEMENT DISCUSSION AND ANALYSIS
     revision of Bank’s business plan, and work and           and KPI for Board of Commissioners.
     budget plan to obtain approval from BOC.            (15) Attended workshop held by LPPI on formulation
(12) Together with Audit Committee, Nomination                of Committee Audit and Risk Monitoring
     and Remuneration Committee and Secretary to              Committee Charters.
     the BOC undertook review on monthly progress        (16) Performed other duties as requested by the
     of BRI’s performance and provided advice and             Board of Commissioners.
     opinion to BOC for further clarification by BOD
     in the meeting between BOC and BOD.




                                                                                                              CORPORATE GOVERNANCE
                                                                                                              CORPORATE SOCIAL RESPONSIBILITY
                                                                                                              SUBSIDIARIES
                                                                                                              BUSINESS STRATEGY
                                                                                                              FINANCIAL STATEMENTS
                                                                                                              OTHERS




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                                                                                           173
                                  III. THe BOARD Of DIReCTORS

1. execution of Duties and Responsibilities of                      Based on Resolution of BRI Extraordinary
   Board of Directors                                               General Meeting of Shareholders held on
                                                                    28 September 2011, Gatot Mardiwasisto
    a. Number,     Composition,      Criteria    and                was appointed as Director of BRI. Gatot
       Independency of Members of the Board of                      Mardiwasisto effectively held a position as
       Directors:                                                   Director of BRI as of 27 January 2012 after
       The Board of Directors consists of 11 (eleven)               approval from Bank Indonesia on his fit &
       members, each of whom has at least 5 (five)                  proper test and comply with the prevailing laws
       years of experience in banking operations as                 and regulations, pursuant to Bank Indonesia
       bank executive.                                              Letter No. 14/10/GBI/DPIP/Rahasia of 25
                                                                    January 2012 and Letter of Ministry of SOE
      All BRI directors are domiciled in Indonesia.                 No. S-49/MBU.4/2012 of 27 January 2012.
      They have adequate competency and
      integrity in accordance with fit and proper test           b. Duties and Responsibilities of Directors
      requirements.                                                 (1) General
                                                                    i. Being responsible for all actions related to
      The members of the Board of Directors do not                      the management of the Bank in accordance
      hold concurrent position as commissioner,                         with the purposes, objectives and business
      director or executive officer in any other bank                   activities; and the management, ownership
      or financial institution, and do not have familial                and the binding with other parties by
      ties with any other member of the Board of                        complying with the Articles of Association,
      Directors and/or the Board of Commissioners.                      prevailing laws and regulations, as well
                                                                        as General Meeting of Shareholders
      The Board of Directors is led by a President                      resolutions;
      Director who is independent to the controlling                ii. Being responsible to ensure that the Bank’s
      shareholders.                                                     management is in accordance with the
                                                                        Bank’s objective; to manage the Company
      Composition of BRI BOD as of 31 December                          according to duties and responsibilities
      2011 are as follows:                                              as stipulated in the Article of Association
                                                                        and General Meeting of Shareholders
                                                                        resolutions.
No            Name                     Position
                                                                 (2) Specific:
1     Sofyan Basir            President Director
                                                                     i. Duties and responsibilities in relation
2     Sarwono Sudarto         Director of Operations                    with the Board of Commissioners and
3     Randi Anto              Director of Compliance /                  Shareholders
                              Risk Management                        - Ensuring the implementation of the GMS
4     Sulaiman Arif Arianto   Director of Commercial                    resolutions;
                                                                     - Preparing the corporate plan (RJPP),
                              Business
                                                                        Bank’s business plan (RBB), and annual
5     Achmad Baiquni          Director of Finance                       Company’s budget and work plan (RKAP)
6     A. Toni Soetirto        Director of Consumer                      and other work plans and the changes
                              Business                                  to obtain approval from the Board of
7     Lenny Sugihat           Director of Credit Risk                   Commissioners;
                              Management
8     Djarot Kusumayakti      Director of Micro, Small
                              and Medium Enterprise
                              (MSME) Business
9     Asmawi Syam             Director of Institutional
                              and State-Owned
                              Enterprise Business
10    Suprajarto              Director of Network and
                              Services




          174                 ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                   FOREWORD
- The Board of Directors is obligated to hold                     c. The maintenance of the assets of the




                                                                                                                 COMPANY PROFILE
  AGMS based on the written request of one                           Bank.
  or more Shareholders who have valid voting                      d. The economical and efficient use of
  rights and who represent at the very least                         resources;
  1/10 (one tenth) of the number of shares                        e. The achievement of the determined
  issued;                                                            operational objectives and targets.
- Administering the list of shareholders and                   5. Executing annual evaluations for making
  the special list containing the ownership of                    public statements concerning internal




                                                                                                                 MANAGEMENT DISCUSSION AND ANALYSIS
  shares in the hands of the members of the                       control at the Bank, to ensure that all
  Boards of Commissioners and the Board of                        significant aspects of internal control
  Directors and their families both in the Bank                   have been considered for the evaluation
  and in other companies;                                         year up to the date of the approval of the
- Consulting the granting of loan above                           annual report
  a certain amount to the Board of                             - Creating clear organizational, duty and
  Commissioners with reference to prevailing                      responsibility structures, including the
  regulations;                                                    appointment of the management.
- Submitting an annual report after reviewed
  by the Board of Commissioners within 5                    iv. President Director:
  (five) months, at the latest, after the financial             Representing the Bank in coordinating and
  year ended to the AGMS for approval.                          monitoring, as well as acting as the Head of




                                                                                                                 CORPORATE GOVERNANCE
                                                                the Board of Directors.
ii. Duties and responsibilities in relation with
    Financial Accounting and Annual Report                  v. Members of the Board of Directors:
                                                            - Developing the work plans for each field of
- Maintaining     the    bookkeeping     and                   responsibility and each directorate led by
  administration of the Bank in accordance                     each Director;
  with generally accepted practices;                        - Coordinating and monitoring each allocation
- Composing an accounting system that                          of responsibility and working units;
  matches the Accounting Standard of                        - Taking all necessary steps to ensure




                                                                                                                 CORPORATE SOCIAL RESPONSIBILITY
  Indonesia and the principles of internal                     decisions taken by the Board of Directors
  control, especially in terms of recording,                   are in line with the prevailing rules and
  archiving, monitoring and management;                        regulations;
- Preparing    Annual     Report,   including               - The delegation of the duties and authorities
  Financial Statement.                                         of each member of the Board of Directors is
                                                               determined by the AGMS and such duties
iii. Duties and responsibilities in relation with              and authorities may be delegated to the
     Risk Management and Control                               Board of Directors.
- Maintaining the following processes of Risk
     Management:                                         vi. Director of Compliance
     1. Ensuring that the Bank has the proper                The main responsibilities of Director of



                                                                                                                 SUBSIDIARIES
        and systematic processes in identifying,             Compliance are:
        measuring, and controlling the risks;                - Ensure that the Bank complies with
     2. Ensuring that proper system and                         the Regulations of Bank Indonesia and
        processes have been executed in                         with the prevailing rules and regulations
        monitoring and reporting the main risks                 through prudential principles examination
                                                                                                                 BUSINESS STRATEGY



        faced by the Bank;                                      toward policy plan and/or the decision
     3. Monitoring and evaluating the existence                 of the Board of Directors, monitoring the
        of good management processes in                         follow up over the examination result,
        assessing the adequacy of the risk                      reviewing the policies, communicate
        management system and the internal                      the external regulations, analysis of the
        control, financial reporting and the                    impact on external regulations, BRI GCG
        compliance;                                             management, monitoring of the fulfillment
                                                                                                                 FINANCIAL STATEMENTS




     4. Ensuring the adequacy of an effective                   of the agreement and commitment to BI and
        control system in order to ensure:                      relevant authorities as well as monitoring the
        a. The reliability and integrity of                     implementation of Anti-Money Laundering
           information.                                         Program and the Prevention of Terrorism
        b. The compliance with the prevailing                   Funding.
           policies, plans, procedures, rules and
           regulations.
                                                                                                                 OTHERS




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                                                                                            175
      - Submitting reports as regulated in Bank              c. Meeting of the Board of Directors
        Indonesia Regulation No. 13/2/PBI/2011                  The Board of Directors regularly hold internal
        dated 12 January 2011 concerning the                    meetings to discuss issues that require the Board
        Execution of the Compliance Function of                 of Directors consideration and to discuss other
        Commercial Banks.                                       strategic plans.

 (3) Other Duties
     Other duties and responsibilities are as stated
     in the Articles of Association of the Bank.




No                 Date                                            Agenda of BOD Meeting

1.    Tuesday, 04 January 2011         1. Jamsostek Mutual Funds Investment Center
                                       2. Discussion on Branch Office Certification
                                       3. Discussion on Result of Exit Meeting of Bank Indonesia Audit
2.    Tuesday, 11 January 2011         1. Credit issues at Operating Units under BRI Palembang Regional Office
                                       2. Financing Program “Peumakmu Gampong” at NAD
                                       3. Plan of Credit Disbursement
                                       4. Implementation of PSAK 50/55
                                       5. Acquisition of Land and Office Building
3.    Wednesday, 26 January 2011       1. Incentive System for Branch Office/Booking Office (KCBO)
                                       2. Determination of Branch Office/Booking Office
                                       3. Progress of Peumakmu Gampong, NAD Program
4.    Tuesday, 08 February 2011        Work and Budget Plan of BRI Pension Plan
5.    Tuesday, 16 February 2011        Acquisition of Bank Agroniaga
6.    Tuesday, 1 March 2011            Meeting of Human Resources Division
7.    Tuesday, 21 March 2011           Appropriation of Profit on 31 December 2010
8.    Tuesday, 22 March 2011           Revitalization of Semanggi area
9.    Tuesday, 05 April 2011           Organizational Development and Formation of Positions at BRI
10.   Friday, 29 April 2011            Delegation of Authorities within the Board of Directors
11.   Wednesday, 1 June 2011           Settlement of NPL in Commercial Retail and Consumer Loan in 2011
12.   Wednesday, 22 June 2011          Follow-up of Brinets Off Line
13.   Tuesday, 13 September 2011       1. BOT of BRI Land
                                       2. Communicating the Organizational Structure of BRI
14.   Monday, 19 September 2011        1. Presentation of the Implementation of Syariah Service Office at BRI
                                          Operating Units
                                       2. Syariah Strategic Plan
15.   Friday, 23 September 2011        1. Plan of IBM Live
                                       2. Divisional Meeting on Human Resources
                                       3. AS 400 P7 Live
16.   Wednesday, 19 October 2011       Bank Business Plan (RBB) 2012-2014 and BRI Work and Budget Plan
                                       (RKAP) 2012
17.   Wednesday, 24 October 2011       Revision of RBB 2012-2014 and BRI RKAP 2012
18.   Tuesday, 08 November 2011        1. Notary Issues
                                       2. Progress of Vehicle Loans
                                       3. Cash sorting at Branch Office




         176              ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                                           FOREWORD
     No                    Date                                                        Agenda of Meeting




                                                                                                                                         COMPANY PROFILE
     19.    Tuesday, 15 November 2011               RKAP related to Changes in Interest Assumption
     20.    Tuesday, 22 November 2011               Presentation of Monoline Consumer Loans
     21.    Tuesday, 29 November 2011               Evaluation of BRI Performance, Market Risk Management and Liquidity,
                                                    and Evaluation of Interest Rate
     22.    Tuesday, 06 December 2011               Evaluation of BRI Performance, Market Risk Management and Liquidity,




                                                                                                                                         MANAGEMENT DISCUSSION AND ANALYSIS
                                                    and Evaluation of Interest Rate
     23.    Thursday, 08 December 2011              Credit Management in BRISyariah
     24.    Tuesday, 20 December 2011               Evaluation of BRI Performance, Market Risk Management and Liquidity,
                                                    and Evaluation of Interest Rate
     25.    Tuesday, 27 December 2011               Evaluation of BRI Performance, Market Risk Management and Liquidity,
                                                    and Evaluation of Interest Rate
     26.    Wednesday, 28 December                  Evaluation of BRI Performance, Market Risk Management and Liquidity,
            2011                                    and Evaluation of Interest Rate at Year End
     27.    Thursday, 29 December 2011              Evaluation of BRI Performance, Market Risk Management and Liquidity,
                                                    and Evaluation of Interest Rate at Year End
     28.    Friday, 30 December 2011                Evaluation of BRI Performance, Market Risk Management and Liquidity,




                                                                                                                                         CORPORATE GOVERNANCE
                                                    and Evaluation of Interest Rate at Year End


Attendance of Member of Board of Directors at BOD Meetings in 2011 are as follows:

     No.                      Name                            Total Meetings               Attendance                        %

      1.     Sofyan Basir                                            28                          28                       100.00
      2.     Sarwono Sudarto                                         28                          27                        96.40




                                                                                                                                         CORPORATE SOCIAL RESPONSIBILITY
      3.      Sulaiman A. Arianto                                    28                          27                        96.40
      4.      A. Toni Soetirto                                       28                          27                        96.40
      5.      Lenny Sugihat                                          28                          27                        96.40
      6.      Asmawi Syam                                            28                          27                        96.40
      7.      Suprajarto                                             28                          26                        92.30
      8.      Bambang Soepeno *                                       9                           8                        88.89
      9.      Achmad Baiquni                                         28                          27                        96.40
      10.     Djarot Kusumayakti                                     28                          26                        92.30
      11.     Randi Anto **                                          16                          16                       100.00



                                                                                                                                         SUBSIDIARIES
*      effective of 28 April 2011 is no longer serve as Director of BRI .
**     effective of 28 April 2011 was appointed as Director by GMS and effective of 21 July 2011 as Director after approval of fit and
       proper test from Bank Indonesia.                                                                                                  BUSINESS STRATEGY
                                                                                                                                         FINANCIAL STATEMENTS
                                                                                                                                         OTHERS




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                                                                                                                        177
d. Trainings of Directors
   Trainings attended by the Board of Directors in 2011 are as follows:


No.     Director’s Name              Training                   Organizer                Date               Place

1.     Sarwono Sudarto     Assessor Workshop              Banking Profession      25-26 May 2011 Jakarta
                           on Risk Management             Certification
                           Competency Test                Institution (LSPP)
2.     A. Toni Soetirto    International Certified        Certified Wealth    14-19 Nov 2011          Amsterdam,
                           Wealth Manager (CWM)           Manager Association                         Genewa, Zurich
                                                          (CWMA)
3.     Lenny Sugihat       Assessor Workshop              Banking Profession      25-26 May 2011 Jakarta
                           on Risk Management             Certification
                           Competency Test                Institution (LSPP)
4.     Suprajarto          Delivery Channel               Financial News          14-15 March      Malaysia
                           Strategy                       Publishing              2011
                                                          Branch of the future    26-27 April 2011 London
                                                          Efma Sarl


5.     Bambang             The Upcoming IIA               Fias Interprise         2-6 June 2011       Austria
       Soepeno             International Conference
6.     Achmad Baiquni      The 5th International          Indonesian              25-26 May 2011 Bali
                           Financial Reporting            Association of
                           Standart (IFRS) Regional       Accountant (IAI)
                           Policy Forum and
                           International Seminar
7.     Randi Anto          International Certified        Certified Wealth    14-19 Nov 2011          Amsterdam,
                           Wealth Manager (CWM)           Manager Association                         Genewa, Zurich
                                                          (CWMA)


2. formation and execution of Duties of                                In regards of risk management, RMC
   Committees under the BOD                                            has    appointed      sub-RMC      to   provide
   In order to support the effectiveness of Directors’                 recommendation to the Board of Directors, in
   duties and responsibilities, several committees                     this case is the President Director. These Sub-
   under the Directors were established, namely:                       RMCs are:

     a. Risk Management Committee (RMC)                                (1) Operation Risk Management Committee
                                                                           (ORMC) established to discuss problems
       RMC is the highest committee in the risk                            in connection with exposure and
       management system in BRI. RMC is comprised                          management of operational risk. In this
       of all members of the Board of Director and the                     instance, the operational risks include
       officers of one level below the Director. RMC is                    operational risk, legal risk, reputation risk,
       not structural included in the structure and                        strategic risk, and compliance risk.
       independent from the Operational Working                        (2) Credit Risk Management Committee
       Units.                                                              (CRMC) is a Sub-RMC function established
                                                                           to discuss problems relate to exposure and
       RMC undertakes discussion, review , analysis                        management of credit risk.
       and approves proposal and recommendation                        (3) Market Risk Management Committee
       submitted at meeting in accordance with                             (MRMC) is a Sub-RMC function established
       prevailing regulations. The proposal and                            to discuss problems in connection with
       recommendation covers, among others,                                exposure and management of market risk.
       policies, strategy and procedure of risk                            Market risks includes exchange rate risk,
       management.                                                         interest rate risk, and liquidity risk.




          178               ANNUAL REPORT 2011              PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                  FOREWORD
Structure and Membership of Committees                                       - Head of Retail Business




                                                                                                                COMPANY PROFILE
                                                                                Network Division
RMC (Risk Management Committee)                                              - Head of Micro Business
Chairperson          : President Director                                       Network Division
Chairperson I        : Director of Compliance                                - Head of Operational Center
Chairperson II       : Director of Credit Risk                                  Division
                        Management                                           - Head of Funds & Service




                                                                                                                MANAGEMENT DISCUSSION AND ANALYSIS
Secretary I          : Head of Risk Management                                  Division
                        Division                           Non-permanent Member   : invited based on related
Secretary II         : Head of Credit                                               issues.
                        Administration Division
Permanent Member : - All          Directors    including   CRMC (Credit Risk Management Committee)
President Director (with voting right)                     Chairperson I    : Head of Risk Management
                        - Head of Internal Audit                              Division
                           (without voting right)          Chairperson II   : Head of Credit Administration
                        - All Division Heads (without                         Division
                           voting right)                   Secretaries I    : Head of Credit Risk
                        - Head of Special Branch                              Review & Monitoring Department,
                           (without voting right)                             Risk Management Division




                                                                                                                CORPORATE GOVERNANCE
                        - Head of DKI Jakarta              Secretaries II   : Head of Credit Risk Policies
                           Regional Office (without                           and Methodology Department,
                           voting right)                                      Risk Management Division
                        - Inspector of DKI Jakarta         Permanent Member : - Head of Micro Business
                           Regional Office (without                              Division
                           voting right)                                      - Head of General Business
Non-permanent Member: Included based on invitation                               Division




                                                                                                                CORPORATE SOCIAL RESPONSIBILITY
only according to the relevant issues at hand.                                - Head of International
                                                                                 Business Division
Member of RMC consists of permanent member, with                              - Head of Program Business
or without voting right, and non-permanent member.                               Division
Permanent member with the voting right is RMC                                 - Head of Agribusiness
members who have the voting rights in the case of                                Division
unanimous decision of, and will render a necessary                            - Head of Retail Business and
vote.                                                                            Medium Business Division
                                                                              - Head of Consumer Credit
ORMC (Operational Risk Management Committee)                                     Division
Chairperson I   : Head of Risk Management                                     - Head of Credit Card Division



                                                                                                                SUBSIDIARIES
                    Division                                                  - Head of SOE Business
Chairperson II  : Head of Service Division                                       Division
Secretary       : Head of Operational Risk                                    - Head of Credit Risk Analysis
                    Management Department,                                       Division
                                                                                                                BUSINESS STRATEGY



                    Risk Management Division                                  - Head of Loans Restructuring
                                                                                 and Recovery Division
Permanent Member :      - Head of Technology                                  - Head of Treasury Division
                          and Information System           Non-permanent Member : invited based on
                          Division                                                  related issues.
                        - Head of Human Resources
                          Management Division              MRMC (Market Risk Management Committee)
                                                                                                                FINANCIAL STATEMENTS




                        - Head of Legal Division           Chairperson I   : Head of Risk Management
                        - Head of Corporate                                   Division
                          Secretary at Division            Chairperson II  : Head of Treasury Division
                        - Head of Strategic Planning       Secretaries      : Head of Market           Risk
                          and Business Development                            Management & Integrated Risk
                          Division                                            Department, Risk Management
                        - Head of Compliance                                  Division
                                                                                                                OTHERS




                          Division



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                                                                                           179
Permanent Member :- Head of International                   Work Plan of RMC in 2011
                     Business Division                      RMC agenda during 2011 included:
                  - Head of Financial and                   (1) Discussion on previous RMC follow ups.
                     Management Accounting                  (2) Risk Profile
                     Division                               (3) Discussion on Risk Issue in the profiles of eight
                  - Head of Operational                         types of risk.
                     Center Division                        (4) Risk Monitoring
Non-permanent Member : Invited based on                     (5) Capital Analysis
                       related issues.                      (6) BASEL Implementation and Risk Management
                                                            (7) Education and Communication of Risk Management
Duties and Responsibilities of RMC                          (8) Recommendations and Decisions of RMC
(1) Provide recommendations to the President
    Director in formulating the General Policies of         frequency of RMC and Sub-RMC Meetings
    Risk Management, as well as amendments if               In 2011, RMC have 4 meetings on quarterly basis.
    necessary; including implementation of risk             The attendance records for the RMC meetings have
    management policies, strategy and contingency           met the quorum requirement that meetings were
    plan for abnormal conditions.                           attended by at least 2/3 of the permanent members
(2) Provide recommendations to the Presidents               including three Directors with one of them is Director
    Director in formulating methodology of Risk             of Compliance. RMC Forum has been successful
    Management measurement and its amendments;              for across division coordination. RMC Forum has
(3) Provide recommendations on risk limit                   resulted in several risk management-related strategic
    determination and its amendments.                       initiatives in BRI.
(4) Submit risk profile report and results of risk
    monitoring together with recommendation of              Schedules and Meeting Agendas of RMC BRI in
    amendments, if necessary.                               2011 were as follows:


  No.            Date                                   Topic/Agenda of RMC Meeting

 1      RMC I                   1. Follow up of the RMC Decision Quarter IV 2010
        28 February 2011        2. Risk Profile Quarter IV 2010
                                3. Capital Analysis
                                4. Discussion on Risk Issue:
                                   - Cash Ratio
                                   - Risk Based Approach (RBA) related to APU-PPT
                                5. Analysis of Risk Based Pricing
                                6. Implementation of BASEL and Risk Management
                                7. Recommendation and Decision of RMC
 2      RMC II                  1. Follow up of the RMC Decision Quarter I 2011
        23 June 2011            2. Risk Profile Quarter I 2011
                                3. Capital Analysis and Stress Testing
                                4. Discussion on Risk Issues:
                                   - BRInets offline
                                   - Quality of Commercial Retail Loans and Medium Loans
                                   - Third Party Law suit
                                5. Training and Communication on Risk Management
                                6. Recommendations and Decisions of RMC




         180               ANNUAL REPORT 2011          PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                           FOREWORD
  No.             Date                                   Topic/Agenda of RMC Meetings




                                                                                                         COMPANY PROFILE
3        RMC III                 1. Follow up of the RMC Decision Quarter II 2011
         3 October 2011          2. Risk Profile Quarter II 2011
                                 3. Capital Analysis and RAPM
                                 4. Discussion on Risk Issue:




                                                                                                         MANAGEMENT DISCUSSION AND ANALYSIS
                                    - Credit Risk Weighting asset using Standardized Approach Basel II
                                    - Loan Insurance Claim
                                    - Foreign Currency Liquidity Needs
                                 5. Update on BI Policy of Commercial Bank Risk Profile
                                 6. RMC Recommendation and Decision
4        RMC IV                  1. Follow up of the RMC Decision Quarter III 2011
         30 January 2012         2. Risk Profile Quarter III and IV 2011
                                 2. Capital Analysis
                                 3. Discussion on Risk Issue
                                 4. Progress of Micro Loans




                                                                                                         CORPORATE GOVERNANCE
                                    - Growth of BRI Loans compared to those of other Commercial Bank
                                    - Implementation of Standardized Approach Basel II
                                    - Growth of Third Party Funds 2011.
                                 5. Discussion on PAB 2011
                                 6. Progress of Fulfilment of Obligation of MR Certification
                                 7. RMC Recommendation and Decision




                                                                                                         CORPORATE SOCIAL RESPONSIBILITY
Schedules and Meeting Agendas of Sub-RMC BRI in 2011 were as follows:

 No.          Date                                 Topic/Agenda of Sub-RMC Meetings

1       ORMC I             1. Monitoring of Operating Risk and Others
        29 March 2011      2. Implementation of IRU Module
                           3. Bancassurance
                           4. Development of Loss Event Database (LED)
                           5. Implementation of BCM



                                                                                                         SUBSIDIARIES
2       ORMC II            1. Monitoring of Operating Risk and Others (RCSA Quarter III 2011)
        15 August 2011     2. Discussion on Risk Issue
                           3. Implementation of BCM
                                                                                                         BUSINESS STRATEGY


3       ORMC III           1. Revision of Circular Letter on PAB risk management
        23 Dec 2011        2. Preparation for development of BRI anti fraud system
                           3. Risk Issue on Operating Risk and others
4       CRMC I             1. Determination of Risk Limits
        19 April 2011      2. Basel II Standardized Approach
                           3. Profile and Monitoring of Risk
                                                                                                         FINANCIAL STATEMENTS
                                                                                                         OTHERS




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b. Assets and Liabilities Committee (ALCO)                                                  Management
                                                                                            Division
  Assets and Liabilities Committees (ALCO) is the                                         - Head of Strategic
  committee that support the Board of Directors                                             Planning and
  in managing Asset and Liability, determining                                              Business
  the interest rate for saving and loans, the                                               Development
  mismatch approach, net-open position (NOP)                                                Division
  and interest rate risks, managing and stipulating                                       - Regional Managers
  the balance sheet structure and capital as well as                                        of DKI Jakarta
  recommending the Directors in issuing the policy                                        - Manager of Special
  decided in ALCO meetings.                                                                 Branch Office

  Structure and Membership of ALCO                          ALCO Supporting Group (ASG):
                                                            ASG is a supporting group of analysts for ALCO. As
  Organizational Structure of Assets and Liabilities        a supporting group for ALCO, ASG duties include
  Committee is as follows:                                  analysis of source and utilization of funds, Maturity
                                                            and Repricing Gap, Primary and Secondary Reserve,
  Chairperson                                               monitoring NOP, formulating the scenario of interest
  (also as member)       :    President Director            rate for saving and alternative pricing, formulating
                                                            funding strategy, preparing the data, presentation
  Alternate Chairman I                                      materials, and necessary materials for ALCO
  (also as member)     :      Director of Finance           meeting.

  Alternate Chairman II                                     Duties and Responsibilities of ALCO
  (also as member)      :     Ad Interim Director of        (1) Implementing integrated Asset and Liability
                              Finance (Pursuant to              Management policy
                              Decision Letter on Ad         (2) Deciding basic interest rate for saving, loans, and
                              Interim Director)                 fund transfer price
  Secretary                                                 (3) Deciding the mismatch policy and NOP.
  (also as member)       :    Head of Treasury              (4) Managing the structure of balance sheet and
                              Division                          capital.
                                                            (5) Ensuring that Asset and Liability management
  Member                 :    - Directors                       has been implemented according to the policy
                              - All Head of Business            decided in ALCO meeting.
                                Divisions
                              - Head of Fund &
                                Services Division           ALCO Work Plan
                              - Head of Credit              ALCO holds a meeting periodically, at least once a
                                Cards Division              month to discuss the management of BRI assets
                              - Head of Consumer            and liabilities related to the Directors’ policies and
                                Loan Division               strategies of the Bank’s, composition and growth of
                              - Head of Institutional       Bank portfolio, Risk Management (setting mismatch
                                Relations Division          limit and net open position) and interest rate for
                              - Head of Financial           savings, loans and fund transfer price.
                                and Management
                                Accounting Division         Meeting frequency of ALCO
                              - Head of Credit Risk         During 2011 ALCO conducted 12 monthly meetings
                                Analysis Division.          and percentage of attendance met the quorum (2/3
                              - Head of Loans               members attendance).
                                Restructuring and
                                Recovery Division
                                (RPKB Division)
                              - Head of Credit
                                Administration
                                Division
                              - Head of Risk



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                                                                                                                     FOREWORD
Schedule and agenda of ALCO’s meetings in 2011 are as follows:




                                                                                                                   COMPANY PROFILE
 No.         Date                                      Topic/Agenda of ALCO Meeting

  1    27 Jan 2011
  2    24 Feb 2011
  3    28 Mar 2011




                                                                                                                   MANAGEMENT DISCUSSION AND ANALYSIS
  4    25 April 2011
  5    23 May 2011         Fixed agenda of every ALCO meetings were: Evaluation of Asset and Liability
  6    27 June 2011        Performance, Market Review, Analysis of BRI Share Price, Analysis of Fee Based
  7    27 July 2011        Income Growth, Presentation of Regional Office Performance, Asset & Liability
  8    24 Augt 2011        Management Recommendations, and ALCO Meeting Decisions.

  9    22 Sept 2011
 10    27 Oct 2011
 11    23 Nov 2011
 12    28 Dec 2011




                                                                                                                   CORPORATE GOVERNANCE
  Realization of ALCO Work Plan                                              - Head of Credit Administration
  ALCO holds periodical meetings discussing asset-                             Division (also serves as
  liability performance evaluations, and deciding                              Secretary)
  interest rates for saving, loans and fund transfer                         - Head of Risk Management
  price. ALCO meetings also become the forum to                                Division
  share information to the Board of Director and                             - Head of Internal Audit
  executives regarding macroeconomic conditions,                             - Head of Credit Risk Analysis
  banking sector, new regulations and other issues                             Division




                                                                                                                   CORPORATE SOCIAL RESPONSIBILITY
  that may be the concerns of the investors/market.                          - Head of RPKB Division
  ALCO meetings also serves as the strategic                                 - Head of Micro Business
  forum to give information related to business                                Division
  directions and policies as well as operational                             - Head of Retail Business
  issue resolutions from the Board of Directors                                Division
                                                                             - Head of Consumer Credit
c. Credit Policy Committee (CPC)                                               Division
                                                                             - Head of Program Business
  Credit Policy Committee helps the Board of                                   Division
  Director in formulating the policy, supervising                            - Head of Agribusiness Division



                                                                                                                   SUBSIDIARIES
  the implementation of policy, monitoring the                               - Head of General Business
  development and conditions of loan portfolio as                              Division
  well as advice for improvement.                                            - Head of SOE Business Division
                                                                             - Head of Treasury Division
                                                                                                                   BUSINESS STRATEGY


  Structure and Membership of CPC                                            - Head of International Business
                                                                               Division
  Chairman    :   President Director                                         - Head of Strategic Planning
  Member      :   - Director of Credit Risk                                    and Business Development
                     Management                                                Division
                  - Director of Micro Small                                  - Head of Legal Division
                     Medium Enterprise Business
                                                                                                                   FINANCIAL STATEMENTS




                  - Director of Commercial                  Duties and Responsibilities of CPC
                     Business                               (1) Provide inputs to the Board of Directors in
                  - Director of Consumer Business               composing BRI’s general credit policy related to
                  - Director of Institutional and               the prudential principles stated in Bank Credit
                     State-Owned Enterprises                    Policy Guideline of Bank Indonesia.
                     Business                               (2) Monitor the implementation of policy to ensure
                  - Director of Finance                         efficient and consistent compliance, and provide
                                                                                                                   OTHERS




                  - Director of Compliance                      solutions to any problems or constraints. CPC
                                                                also regularly review the Credit General Policy



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    (KUP-BRI) and provides suggestions to the                  Board of Commissioners regarding:
    Directors if changes/revision is needed.                   i. The result of monitoring of BRI Credit General
(3) Monitor and evaluate:                                           Policy implementation.
    i. Appropriateness of the loan approval authority           ii. Findings and evaluations of the matters related
    ii. Appropriateness of disbursement process,                    with point no. 3 as mentioned above.
         growth and quality of loans given to related
         parties and certain large borrowers.               Work Mechanism of CPC
    iii. Legal lending limit compliance                     Functions, duties, and responsibility of CPC is
    iv. Compliance with the prevailing rules and            administered by CPC Secretary (Head of Loan
         regulation related to lending.                     Administration Division) together with related
    v. Loan restructuring process in accordance with        Divisions.
         BRI’s general loan policy.
    vi. Adequacy of loan loss provision and loan            CPC Meetings frequency
         write-off.                                         There was no CPC meeting in 2011.
    vii. Specified large borrowers and loan under
         special mention category.                          Realization of CPC Work Program
(4) Review the effectiveness of loan internal control       Realization of CPC functions, duties and
    system.                                                 responsibilities in 2011, carried out by Credit
(5) Report and provide recommendation for                   Administration Division as the Secretary of CPC were
    improvement to the Board of Directors and the           as follows:


             Work Plan                                               Realization

 Review of General Policy on Credit   Preparation for review of the General Policy on Credit (GPC) has been
                                      undertaken with feedbacks from related Divisions on draft of GPC
                                      revision made by ADK Division.
                                      Partial revision of (GPC) has been done due to changes of Decision
                                      Letter of KKP Nokep: S. 142d – DIR/ADK/12/2007 of 20 September
                                      2011. With regards to the Decision Letter, overall review of GPC will be
                                      amended according to the changes in the Decision Letter.
 Review of Guidelines for Loan        GLD for Micro Business was done by 15 December 2011
 Disbursement (GLD)                   GLD for Retail Business as of year end 2011 has received feedbacks
                                      from related Division (on going process)
                                      GLD for Treasury and International Business as of year end 2011 was
                                      still on process (pending reorganization)
                                      GLD for Consumer Business as of year end 2011 was still on process
                                      (pending reorganization)
 Formulation or Review on Credit      20 Product Policies and 13 General Policies
 Policy




         184               ANNUAL REPORT 2011           PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                     FOREWORD
d. Credit Committee




                                                                                                                   COMPANY PROFILE
Credit Committee is an operational committee assisting the Board of Directors in evaluating and/or deciding loan
application of certain amount and types of loans decided by the Board of Director

Structure and Membership of Credit Committee




                                                                                                                   MANAGEMENT DISCUSSION AND ANALYSIS
Composition of Credit Committee membership in 2011 is as follows:


         Credit Committee                               Member                        Final Decision Maker

BRI Credit Committee (for loan        Director of Commercial Business             President Director
decision)                             Director of Institutional & SOE Business
                                      Director of MSME Business
                                      Director of Consumer Business
                                      Director of Credit Risk Management
BRI Credit Committee (for decision Director of Finance                            President Director
on Money Market Line and           Director of Commercial Business




                                                                                                                   CORPORATE GOVERNANCE
Treasury products)                 Director of Institutional & SOE Business
                                      Director of MSME Business
                                      Director of Consumer Business
                                      Director of Credit Risk Management
Directors’ Credit Committee Level     Director of MSME Business
1. Directors’ Credit Committee 1      Director of Commercial Business
   (for Medium and Corporation        Director of Credit Risk Management




                                                                                                                   CORPORATE SOCIAL RESPONSIBILITY
   Loan initiated by Branch Office,
   Regional Office, Special Branch
   Office and Program Business
   Division)
2. Directors’ Credit Committee 2      Director of Institutional & SOE Business
   (for Medium Company and            Director of Commercial Business
   Corporation Loan initiated by      Director of Credit Risk Management
   SOE Business Division)
3. Directors’ Credit Committee 3      Director of Consumer Business
   (for Medium Company and            Director of Commercial Business



                                                                                                                   SUBSIDIARIES
   Corporation Loan initiated by      Director of Credit Risk Management
   General Business Division and
   Agribusiness Division)
4. Directors’ Credit Committee for    Director of MSME Business
                                                                                                                   BUSINESS STRATEGY



   Loan Restructuring                 Director of Commercial Business
                                      Director of Institutional & SOE Business
                                      Director of Consumer Business
                                      Director of Credit Risk Management


Duties and Responsibilities of Credit Committee             Responsibilities of Credit Committee are:
                                                                                                                   FINANCIAL STATEMENTS




The role of Credit Committee is to approve or reject        (1) Granting the loan according to the professional
the loan according to the authority decided by the              proficiency in an objective, accurate, and
Board of Director. In addition, Credit Committee will           comprehensive manner.
coordinate with ALCO for defining source of fund to         (2) Rejecting the request or influence from related
finance loans up to certain limit.                              parties who intend to grant the loan based on
                                                                formality.
                                                                                                                   OTHERS




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(3) Put their signatures of approval in Loan Approval         e. Information System and Technology Steering
    form. For that reason and as a form of Committee’s           Committee (ITSC)
    responsibility, prior to signing the signature, the
    Credit Committee must:                                      Pursuant to the Bank Indonesia Regulation
    i. Ensure that all loan approval have met all               No. 9/15/PBI/2007 dated 30 November 2007
         banking requirements and in accordance with            and Bank Indonesia’s Circular Letter No. 9/30/
         sound loan principals.                                 DPNP dated 12 December 2007, concerning
    ii. Ensure that the loan disbursement procedure             the Application of Risk Management in the
         comply with Loan General Policy of BRI (KUP-           Application of Information System by Commercial
         BRI), Loan Execution Guidelines (PPK) and              Bank, BRI has established Information System
         other loan regulations.                                and Technology Steering Committee (ITSC) based
    iii. Ensure that the loan disbursement is made              on the decree of the Board of Directors No. 625-
         based on honest, objective, accurate and               DIR/TSI/ 10/2009 dated 19 October 2009.
         comprehensive assessment and free from the
         influence of related parties                         ITSC is the Committee responsible for the
                                                              direction    and   recommendation     concerning
frequency of Credit Committee Meetings                        policies, development and implementation of BRI’s
Meetings of the Credit Committee are convened                 Information Technology and System.
when new loan approval or loan extensions are
needed. The decision of the Credit Committee                  Structure and Membership of ITSC
shall be based on majority principle, as for other
Credit Committee’s decision shall be made based               Chairman      : Director of Operations
unanimously or decision must be given if all members          Vice Chairman : Director of Compliance
of Credit Committee give their approval.                      Secretary     : Head of Technology and
                                                                              Information System Division
For loans with a total exposure of minimum Rp300              Member        : - Head of Internal Audit
billion, both for individual and business groups                              - Head of Strategic Planning
borrowers, must be consulted with the Board of                                   & Business Development
Commissioners. For agribusiness and SOE loan with                                Division
the total exposure is equal to or more than Rp600                             - Head of Risk Management
billion and Rp500 billion respectively, is required a                            Division
consultation with the Board of Commissioners.                                 - Head of Micro Business Division
                                                                              - Head of Retail and Medium
Realization of Credit Committee Work Plan:                                       Business Division
                                                                              - Head of Program Business
                          Decision Maker                                         Division
                      BRI              Directors’                             - Head of Consumer Loans
   Period                                                                        Division
               Credit Committee          Credit
                                       Committee                              - Head of Credit Card Division
                                                                              - Head of Fund and Services
 Quarter I             67                   15
                                                                                 Division
 Quarter II            47                   26
                                                                              - Head of Retail Business Network
 Quarter III           61                   18                                   Division
 Quarter IV           162                   64                                - Head of Micro Business Network
 Total                337                  123                                   Division
                                                                              - Head of Services Division
                                                                              - Head of Treasury Division
                                                                              - Head of International Business
                                                                                 Division
                                                                              - Head of Financial & Accounting
                                                                                 Management Division
                                                                              - Head of Credit Administration
                                                                                 Division
                                                                              - Head of Operational Center
                                                                                 Division
                                                                              - Head of Fixed Assets
                                                                                 Management & Logistic Division


          186               ANNUAL REPORT 2011            PT BANK RAKYAT INDONESIA ( PERSERO ) Tbk.
                                                                                                                        FOREWORD
The Committee membership is ex-officio and                  (7) Monitor the effectiveness of Risk Management




                                                                                                                      COMPANY PROFILE
members of the committee represent the party                    of BRI Investment in IT that contributes to the
having direct relations with TSI as partner or user.            achievements of business objective;
                                                            (8) Recommend the solutions for any problems
Duties and Responsibilities of ITSC                             related with TIS that cannot be resolved by
(1) Provide recommendations on policies and targets             the user and TIS administrator in an efficiently,
    for the development of the Technology and                   effective, and timely manner.




                                                                                                                      MANAGEMENT DISCUSSION AND ANALYSIS
    Information System (TIS) for a five-year period as
    stated in the IT Strategic Plan (ITSP) BRI;             ITSC Work Plan
(2) Provide recommendation on prioritizing the short        ITSC work plan is to carry out duties and
    term (annual) and long term (5 years) of the TIS        responsibilities in accordance with the agenda of the
    development in accordance with corporate plan           committee meeting.
    and business plan;
(3) Provide recommendations on changes of long              Realization of ITSC Work Program
    term IT strategies and plans as the respond to the      ITSC evaluated the progress of BRI IT development
    changes in the strategy and policy;                     and discussed other issues according to each
(4) Review and recommend Functional Work Plan               meeting’s agenda. In those meetings, the Board
    and TIS Investment and Exploitation Budget Plan         of Directors provided strategic direction especially
    for short term (annual) development, operations,        in terms of specific e-channel development that




                                                                                                                      CORPORATE GOVERNANCE
    and maintenance by adhering to ITSP BRI ;               requires further attention. Additionally, the Directors
(5) Monitor and evaluate IT development project to          also emphasized that application developments not
    align with BRI strategies and plans;                    to disregard other developments that is mandatory
(6) Monitor and evaluate the status and                     by nature.
    implementation of IT development managed TIS
    on regular basis;                                       frequency of ITSC Meetings
                                                            Throughout 2011, ITSC held meetings as follows:




                                                                                                                      CORPORATE SOCIAL RESPONSIBILITY
 No.       Number/Date                                     Topic/Meeting Agenda

   1    ITSC I                • Directors direction concerning Plus Point & Concern Point
        25 March 2011         • Progress of IT BRI up to Q4 2010
   2    ITSC II               • IT Budget 2011
        30 May 2011           • Realization of ITSP Project 2008-2013
                              • Brinets progress, especially for transaction and e-channel
                              • IT Strategic Plan
   3    ITSC III              • Fulfillment of HR in 2011



                                                                                                                      SUBSIDIARIES
        26 August 2011        • IT Budget and Realization in 2011
                              • Realization of ITSP Project 2008-2013
                              • Brinets Capacity Planning and e-channel
                              • IT Strategic Plan
                                                                                                                      BUSINESS STRATEGY


   4    ITSC IV               • IT Budget and Realization in 2011
        09 November 2011      • Realization of ITSP Project 2008-2013
                              • Brinets Progress and e-channel
                              • Positioning of IT BRI in National Banking industry
                              • Progress of IT development, stage of User Acceptance Test
                                                                                                                      FINANCIAL STATEMENTS
                                                                                                                      OTHERS




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                                                                                                 187
f. Project Management Office (PMO) Steering                    Meeting frequency of PMO Steering Committee
   Committee                                                   Duties and Responsibilities of PMO Steering
                                                               Committee
    PMO Steering Committee is the highest forum/               (1) Provide strategic direction of BRI projects at
    committee in project management at corporate                   corporate level;
    level in BRI. PMO Steering committee plays the             (2) Make decisions on solutions proposed in project
    role to provide strategic direction and project                management that cannot be decided by Head of
    management. The strategic decisions in project                 PMO or Project Steering Committee ;
    management includes investment decisions                   (3) Reallocate the budget to different projects that
    related with the projects, i.e. approving, revising,           are listed in the Project Work Plan according to
    or canceling the plan and execution of the project.            prevailing regulation;
                                                               (4) Make decisions over issues or matters not
Structure and Membership of PMO Steering                           covered in PMO General Policy and PP PMO;
Committee in 2011                                              (5) Validate the result of Joint Planning Session;
                                                               (6) Terminate the project that has no further
Chairman : President Director                                      justification to be continued.
Member : - Director as Head of PMO
           - Directors member supervising
                                                               PMO Steering Committee Work Plan
             Project Owner’s Working Unit
           - Directors member supervising                      In performing its duties, PMO Steering Committee
             Supporting Project Owner’s Working                held at least one meeting a year and reports to the
             Unit                                              Board of Directors.
           - Project Owner’s Unit Head
           - Supporting Project Owner’s Unit
             Head




 No.                     Date                                       Topic/Agenda of Meeting

1        PMO Steering Committee Meeting         • IT Project Planning 2011
         I in 2011 held on 25 August 2011       • Projects progress and status up to March 2011
                                                • Project issues
                                                • Projects that need special attention