One of the most significant success stories to emerge from Indonesia’s banking sector is Pt Bank Ganesha. The private bank that was established in 1990 didn’t witness runaway success until 2015, when management changes turned around the bank’s fortunes. This year’s winner of International Finance’s Best Small Bank and Emerging CEO of Indonesia, Pt Bank Ganesha’s journey has resonated with the changes taking place across emerging economies across Asia.
The new management, brought in mid-2015, transformed the small bank to a fast rising performing asset, with new strategies in line with the latest financial trends.
One of the major steps taken towards establishing a presence in Asia among other bigwigs was forging strategic alliances. Pt Bank Ganesha partnered with Mitra Adi Perkasa (“MAP”), the biggest retailer in Indonesia with 150 brands including Zara, Marks&Spencer, Sogo and Starbucks, and introduced products including Ganesha-MAPClub Savings, whereby Ganesha borne MAPClub Points as acquisition incentive and monthly interests to depositors. Being the first-of-its-kind, the product drives low-cost funds and serves as entry point for cross selling. For MAP, this encourages Ganesha’s depositors to buy more MAP products and ultimately increases revenue.
Further strategic partnerships with a major bank and leading licensed providers for co-branded Affinity Credit Card; Bancassurance products; Debit Card; and Bank strengthened the bank’s position as an all-round service provider.
A special feature for the employees of sister companies were salary loans and payroll savings – incorporated as an added incentive. Contrary to other unsecured personal loan products in market, salary loans have miniscule NPL as employees receive a monthly salary and repay loan installments from their payroll accounts at Ganesha.
Pt Bank Ganesha goes the IPO way
One of the highlights of 2016 was Pt Ganesha conducting and completing its Initial Public Offering, in a bid to strengthen long-term funding structure for business expansion. Oversubscribed 13x, the IPO saw robust demand from investors amidst current market condition and tight competition for funds. Post IPO, Ganesha closed 2016 with Capital Adequacy Ratio of 34.9% – a massive 20.5% improvement from 14.4% a year ago and amongst the highest ratio in the banking industry. Shareholders’ equity rose 407% YoY as of December 2016, which enabled Ganesha to ascend from its BUKU1 to BUKU2 classification and offer more products and services including mobile and internet banking, credit card and trade finance. Following the IPO, governance guidelines for public companies has also been completed.
Stronger Brand for a Better Market Advantage
Recognising the need for stellar customer experience, Pt Bank Ganesha launched a series of initiatives from 2015 including boosting their social media presence, a 24-hour customer care centre and an E-Sales kit for closing sales more efficiently. Aside from these upgrades that are reflective of a growing financial brand, the leadership also revitalized brand presence by providing improved versions of various marketing collaterals and an optimised franchise footprint by providing a functioning network of branches and ATMs.
To a large extent, technology has played a vital role in enhancing the company’s footprint. Improved customer-centric data analysis for better management insight, cost management and third-party certifications have gone a long way in establishing Pt Bank Ganesha’s credentials as a competent player in Indonesia’s financial services sector. Moreover, the revamp of the corporate website has greatly helped in enhancing the bank’s online image, so much so, that it won the award for Award for ‘Best Website of the Year – Indonesia’ in 2017 at Asian banking & Finance Retail Banking Award programme.
The bank has several other honours to its credit such as –
International Finance Award for Best Emerging CEO in Indonesia to Surjawaty Tatang and Best Small Bank in Indonesia
2017 International Business Awards program for CEO Surjawaty Tatang as ‘Woman of the Year’ (Silver Stevie Winner), Bank Ganesha as ‘Small Banking Company of the Year’ (Silver Stevie Winner) and the Bank’s website as ‘Banking Website of the Year’ (Bronze Stevie Winner).
Award for ‘Best Website of the Year – Indonesia’ in 2017 Asian Banking & Finance Retail Banking Award program.
Gold Award in 2017 Asia Pacific Stevie Award program for ‘Excellence in innovation in Financial Industries’.
‘Very Good’ predicate from leading banking industry publication InfoBank magazine.
Investor Award as the Best Bank for ‘Banks with Asset Rp. 1-25 trillion’.
‘Best Private FX National Bank’ in 2017 Indonesia Banking Award program by leading business publication Warta Ekonomi.
Corporate rating of ‘idBBB+’ with Stable outlook from PT Pemeringkat Efek Indonesia (“Pefindo”), a domestic rating agency affiliate of Standard & Poor’s. This is the first rating exercise that Pefindo conducted on the Bank, which rating result reflects the Bank’s strong capitalization, growth potential from captive market and adequate liquidity.
Overcoming Market Challenges
Despite difficult global and domestic macroeconomic backdrop, Bank Ganesha not only survived 2015-2017, it thrived; with gains made across all areas of profitability, lending, deposit taking, capitalization, branding, organizational capacity and service quality.
During the last two years, growth performance is better than industry average in many key metrics:
Net Profit after Tax grew at 207% Compound Annual Growth Rate (“CAGR”) to IDR 51 billion driven by strong revenue generation, disciplined cost management and asset quality improvement.
Total operating revenue up 48% CAGR to IDR 248 billion on the back of solid growth in Net Interest Income and Fee-Based Income.
Asset up 52% CAGR to IDR 4.58 trillion on the back of strong loan book growth of 52% CAGR to IDR 2.90 trillion, which is made possible due to the much stronger capital base following IPO.
Funding base is diverse and up 43% CAGR to IDR 3.38 trillion.
Underpinned by strong recoveries of impaired loans, Gross and Net Non-Performing Loan ratios improved to 0.81% and 0.20% at end-September 2017 from 3.14 % and 1.80%, respectively, recorded two years prior.
Capital Adequacy Ratio stood at 30.1% as of September 2017, which is well above the regulatory requirements and remains supportive of business growth.
With no signs of slowing down, Pt Bank Ganesha is well on its way to establish new benchmarks for financial excellence in Indonesia.