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Indonesia Eximbank: Preparing for Challenging Domestic and Global
Economic Development
1
Agenda
The Establishment of Indonesia Eximbank 1
Indonesia Eximbank’s Role in Challenging Economic Development
3
Performance Evaluation 4
Experience, Role and Relevance 2
3
Rational Behind The Establishment of Indonesia Eximbank (IEB)
Export
Development
Frankfurt Agreement (Between Indonesia & Foreign Banks)
to maintain financial trade facilities
Strengthening the Frankfurt
Agreement and addresses
the trade credit problem
• Japan Exim Bank provides Two
Step Loan program (TSL 7)
amounting $1 billion were
submitted to Bank Indonesia (BI).
• As the Central Bank and part of
the Government of Indonesia, BI
also acts as Export Credit Agency
(ECA) which provided pre-
shipment export guarantee
program to facilitate import and
pre-shipment export financing for
exporters holding export letters of
credit.
Drafting process
ECA act takes a
long time, the
best alternative
was to establish a
commercial bank
PT. Bank Ekspor
Indonesia (BEI)
established based on
Government
Regulation No.37/1999
Indonesia
Eximbank
established
based on Act
No.2/2009
Transformation
Process
The large decline in trade credit
↓
jeopardized export, IDR under
pressure
1998
1999 2009
4
Corporate Profile of IEB
Jakarta (HQ)
Makassar
Surabaya
Medan
Office Network Corporate Overview
1999
2009
IEB’s predecessor Bank Ekspor Indonesia (“BEI”)
established
IEB commences operations on 1 September 2009 mandated to
support the national export programs
All assets and liabilities, legal rights and obligations of
BEI were transferred to IEB on establishment
Indonesia Eximbank shall operate independently, based on its own Act (Lex Specialist) and having sovereignty Status.
Wholly-owned by the State with Sovereign
status.
Rated in line with the sovereign
Baa3 (Stable) Moody’s: October, 2014 BBB- (Stable) Fitch: March, 2014
BB+ (Positive) S&P: Agustus, 2014 idAAA Pefindo: March 4, 2014
Special Institution Status Government Ownership Ratings
2000 The Government of Indonesia
commits in law to establish IEB
Note: (1) Republic of Indonesia Act No.2 of Year 2009 on Lembaga Pembiayaan Ekspor Indonesia (Act No.2/2009)
Surakarta
5
Vision, Mission, and Strategy
Proactive and appropriate strategic plans to achieve corporate vision and mission
Vision Being a trusted Eximbank to boost national export performance by providing well-
planned and sustainable financing, guarantee, insurance and advisory services.
Mission
To support the improvement of the nation's leading export products as well as the high competitiveness by providing financing, guarantee, insurance and advisory services to Indonesia exporters both domestic and overseas.
To participate in encouraging the development of small and medium enterprises in developing export-oriented products.
Strategic Targets
Strengthening, increasing, accelerating and sustaining export growth
Supporting Pillars
Strong implementation of good corporate governance and risk management.
Focus on market and customers by providing one-stop solution on domestic and global network.
Develop highly efficient business process supported by robust information technology platform.
Professional human capital.
Strong capital base that grows soundly and positively from sustainable business growth.
6
• Indonesia Eximbank provides financing (working capital and/or investment financing) for any enterprises and any individuals, domiciled within or outside of the territory of the Republic of Indonesia (overseas financing incl. buyers credit, overseas investment financing).
• The Financing may be carried out based on the Sharia Principles.
Financing
• Guarantee for Indonesian Exporter upon the payment received from the overseas buyers of goods and or services (ie Export Guarantee);
• Guarantee for Indonesian goods and services’ importer in overseas upon the payment that has been made or will be made to Indonesian exporter contract financing against the sale of goods and/or services or the completion of work or services that is made by any Indonesian companies (ie Performance Guarantee);
• Guarantee for any bank that extends export financing facility to Indonesian exporters (ie Bank Credit Guarantee); and/or
• Guarantee for tender purposes in relation with project that is fully or patially supporting export (ie Project Guarantee).
Guarantee
• Insurance of export performance risk;
• Insurance of non-payment risk;
• Insurance of overseas Investment risk for Indonesian companies; and/or
• Insurance for political risk in the export destination country.
Insurance
Indonesia Eximbank conducts counseling and consultation services to Banks, Financial Institutions, exporters, export goods producers, especially micro, small, medium-scale enterprises and cooperatives.
Advisory Services
Indonesia Eximbank may carry out special assignment of the Government to Support the
National Export Program
National Interest Account
Key Operating Activities
Source: Company information.
8
Experience, Role and Relevance
Source: Indonesia Eximbank
During its almost 5 year-existence, IEB shows a solid and promising performance. Although we are still in the
early stage, but we continue to carry out our mandate as an Eximbank and fill in the market gap.
Supporting exports on medium and long-term financing basis.
1
In the third quarter of 2014, 46,10% of IEB’s financing portfolio contributed by medium long term (MLT) financing. We also
provide MLT in the form of overseas project financing.
Project/Sector Location
Masjidil Haram Renovation
Jeddah Airport Flyover
Saudi Arabia
Build Liquica-Mota Ain Road Timor Leste
Build Tibar – Gleno Road
Build Finance Minister Building
Engineering, Procurement, Construction and Commisioning of Prai II Lateral Gas
Pipeline Project
Malaysia
Special ability to provide buyer’s credit financing
2
Project/Sector Location
Ship Financing Singapore
9
Experience, Role and Relevance (Cont..)
Source: Indonesia Eximbank
Provided financing for the construction of the first blast furnace plant in Indonesia to support the
regulation of Ministry of Energy and Mineral Resources No. 07/2012 regarding Increasing Added Values
to Mineral through Mineral Processing and Refinement. This sector initially was least favorite to banking
industry due to the long-term basis.
4
Facilitating Overseas Investment in the form of share participation in a company / project overseas. With
this financing is expected to Indonesian companies can go global and led to an increase in the domestic
economy.
3
Project/Sector Location
Rim/Wheel for vehicle financing USA
Tissue fabric machinery financing USA
Warehouse financing Australia
Raw Materials Finished Material Production Capacity Location
Iron Ore Nickel Pig Iron (NPI) 500.000 tonnes/year West Java
Iron Ore (1,6-1,8%) Iron (12%) 300.000 MTPA* Sulawesi
Scrap Iron 17.000 tonnes/year East Java
*MTPA: Metric Tonnes per Annum
10
Experience, Role and Relevance (Cont..)
Significant Financing Growth
5
15.737
20.541
27.054
40.492
51.604
2010 2011 2012 2013 Oct-14
In IDR Billion
Business and Economic Research Department
RISK MANAGEMENT AND STRATEGIC PLANNING DIVISION
Indonesia Economic Growth Prospects Face Some Risks
Global
• Uncertainty in global and main trading partner economic growth
• End of unconventional monetary policies (in advanced countries)
• The Growth of Commodity prices tend to ‘flat’
• Tighter global competition
Domestic
• Relatively low productivity • Limited production capacity • Infrastucture gap • Skills gap • Lack of Innovation &
technology advancement capacity
• Shallow financial sector & high cost of funds
Growth Slowdown due
to supply constrain
Non – inclusive growth Risks
• Inequality Accross income group and regions
Business and Economic Research Department
RISK MANAGEMENT AND STRATEGIC PLANNING DIVISION
Indonesia Eximbank Role in Challenging Economic Developlment
Uncertainty in global and main trading partner
economic growth
Commodity prices volatility Tighter global
competition
Limited
production
capacity of
export goods
Infrastucture gap Skills gap
Financial Services to Low-Midlle Segments
of Society (Financial Inclusion)
Guarantee
and
Insurance
Financing
expansion to
Downstream
Industry
Financing,
Guarantee
and
Insurance
Financing,
Guarantee
and
Insurance Financing,
Guarantee
and
Insurance
Advisory
Servises
Financing, Guarantee
and Insurance expansion
to SMEs Segmentation
Global
Challenges
Domestic
Challenges
Indonesia Eximbank: Path to 2020
14
To the Value Added Industry sectors (down stream industry); To the supporting exports industrial sectors (energy, transportation, infrastructure)
both the corporate and SME’s including export supplier; overseas financing, Impor Substitution commodity.
1. Increase the export financing, guarantees, and insurance facilities
The implementation consultation / assistance activities to bank, financial institutions, exporters, export goods producers , especially SME’s business in order to increase the technical ability and capacity of production, etc;
Providing export information.
Indonesia Eximbank continue to improve its products and services for exporters in order to increase competitiveness of Indonesian goods and services with some strategies and programs :
2. Providing Advisory Services
3. National Interest Account (NIA) Program
Implement NIA program which is mandated by the government.
16
Performance Evaluation
Our performance evaluation divided into financial aspects and fiscal aspects.
Financial Aspects
Fiscal Aspects
Increasing Financing, Export Guarantee and Export Insurance Outstanding;
Mantaining sound financial ratios.
Share of IEB debtor’s export sales to Indonesia non oil export value;
IEB financing to government commodity priority
IEB financing to small medium enterprises (SME) improvement;
IEB financing to debtor’s with export destination to non-traditional country;
IEB financing to down stream industry;
Provide advisory/counselling to prospective exporters;
Financial Highlights (1)
1
8
Total Assets Million USD
Financing Billion IDR
Guarantee Insurance Million USD Million USD
Billion IDR Million USD
Billion IDR Billion IDR
Source: Indonesia Eximbank
20.639 26.322
33.333
46.473
60.357
2010 2011 2012 2013 Oct-14
1.252
2.274
3.002 3.542
4.390
4.994
895
1.734
2.343
2.875
3.825 4.270
2009 2010 2011 2012 2013 Okt-14
15.737
20.541
27.054
40.492
51.604
2010 2011 2012 2013 Oct-14
29 2
40
117
192
266
2009 2010 2011 2012 2013 Okt-14
14
348
1.098
2.033
3.220
2010 2011 2012 2013 Oct-14
- 0 4
16
25
58
2009 2010 2011 2012 2013 Okt-14
1 39
149
262
704
2010 2011 2012 2013 Oct-14
Financial Highlights (2)
1
9
Net Non-Performing Loan (NPL)
Net Profit Bilion IDR
Return on Asset (ROA)
Return on Equity (ROE)
Million USD
Gross Non-Performing Loan (NPL)
Source: Indonesia Eximbank
12 22
53 62
78
66
2009 2010 2011 2012 2013 Okt-14
196
461
586
822
680
2010 2011 2012 2013 Oct-14
1,55%
2,39% 2,34% 2,49%
2,13%
2010 2011 2012 2013 Oct-14
4,24%
6,92%
8,26%
10,61%
9,51%
2010 2011 2012 2013 Oct-14
5,88%
3,25%
2,11%
1,09%
0,41%
2010 2011 2012 2013 Oct-14
10,14%
6,73%
4,38%
3,26%
2,06%
2010 2011 2012 2013 Oct-14
