Academic journal article Academy of Strategic Management Journal

Analysis of Financial Performance Differences Bank in Indonesia Based on Buku

Academic journal article Academy of Strategic Management Journal

Analysis of Financial Performance Differences Bank in Indonesia Based on Buku

Article excerpt


In order to improve the resilience and competitiveness of the national banking system, in December 2012, Bank Indonesia issued Bank Indonesia Regulation No. 14/26 / PBI / 2012 regarding business activities and office networks based on the bank's core capital, or so-called policy Multilicense. Bank Indonesia Regulation (PBI) operations and office network is based on the bank's core capital set the scope of business activities and the opening of an office network in accordance with the bank's core capital, with these provisions, the bank can only conduct business and office network in accordance with the core capital owned and valid for Conventional Commercial Bank (BUK), Islamic banks (BUS), Sharia (UUS) of conventional commercial banks and branches of banks domiciled abroad (Foreign Bank branch office). Under these provisions, banks classified into 4 groups Enterprises (Public Bank Group undertakings, BUKU) provided BUKU 1, with the Bank's core capital of less than 1 Trillion, BUKU 2, with the Bank's core capital of Rp. 1 trillion to 5 trillion, BUKU 3, with the Bank's core capital of Rp. 5 Trillion up with less than Rp. 30 Trillion, BUKU 4, with the Bank's core capital above Rp. 30 Trillion.

Based on data from the Indonesian Banking Statistics, as of March 2016 recorded total assets of the entire Bank in Indonesia Rp. 5.954.688 Billion with the distribution of assets of banks based BUKU as follows:

Based on the figure shows that the assets of the Bank in Indonesia amounted to 45,50% owned by BUKU 4, 38.22% owned by BUKU 3, 13.32% owned by BUKU 2 and 2.96% owned by BUKU 1, so it can be concluded that asset bank in Indonesia is dominated by BUKU 4. Financial Services Authority reported a profit for the banking industry or the public until March 2016 throughout the first quarter amounted to Rp28,9 trillion, down 2.4% compared to the same period in 2015 which amounted to Rp29,63 trillion. Based on Indonesian banking statistics, bank profits decrease because of the high operating non interest expenses up in March 2016 to 37.3 % to Rp127,1 trillion of Rp 92,5 trillion in operating expenses non interest 2015.Increase growth was much higher than the growth in net interest income general banking by 13.7% to Rp82,05 trillion of Rp72,1 trillion. Based banks, Commercial Bank Business Activities (BUKU) 1 posted a profit until the end of March 2016 amounted to Rp. 600 billion, then BUKU 2 of Rp3,01 trillion, BUKU 3 Rp. 7,29 trillion and Rp17.6 trillion BUKU 4. Meanwhile, banking intermediation recorded a growth, although still in the single digit range. Until the end of March, commercial banks' credit portfolio grew 8.48% to Rp4.029 trillion from Rp3.714 trillion in the same period last year. Commercial bank lending operations (BUKU) 4 recorded at Rp1.757 trillion. Bank group BUKU 3 and BUKU 2 respectively lending and Rp506,02 Rp1.504 trillion trillion, while bank loans reached Rp107,95 BUKU 1 trillion.

Multilicense policy is a policy that is long term because it will establish a new structure of national banking. This policy is expected to strengthen the resilience of banks, because banks will operate in conjunction with existing capabilities. Additionally these policies in the long term will also improve the efficiency and economies of scale banks for the expansion of branch network and expansion of business activities can only be done if the bank has the capacity to support capital. Resilience and competitiveness of banking will become the capital to be able to compete with the banks of the ASEAN region because according to plan the integration of the financial sector of ASEAN from 2020 which would enable free for banks in the ASEAN region that qualify as Qualified ASEAN Banks (QAB) conduct operational activities should a local bank in the ASEAN countries.

The soundness of banks can be assessed from various indicators. One of the main sources of indicators as the basis of assessment is the bank's financial statements. …

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