PT Bank Rakyat Indonesia SWOT and PESTLE Analysis

Strength

1. Strong performance shown by surpassing its set targets: Despite the Covid-19 pandemic PT Rakyat Bank was able drive growth and record strong financial performance in FY 2021. The company was not only able to meet most of its expected target but also managed to surpass it. It was able to achieve 104.44% of the target set for Assets at Rupiah 1.572.7 billion. For its performance in third party funds, it managed to surpass the expected targets by 1.74%, for net profit it exceeded it targets by 36.99%, for NPL gross and NPL net it outperformed the expected target by 9.59% and 38.04% respectively. Similarly, for Net Interest Margin (NIM), Operating Costs Operating Income (BOPO), Capital Adequacy Ratio (CAR) it managed to exceed the expected target by 6.33%, 6.33%, and 14.58% respectively. However, its performance in Loans and LDR fell short of expectation by 0.13% and 1.85% respectively. This underperformance in loan target was slowdown in demand for loans during the pandemic which further caused the underperformance of LDR and CIR. All of these performance indicators demonstrate Banks solid foundations during a period of global economic uncertainly in the light of Covid-19 impact and rising political tensions across regions.

2. Strong rural network connecting 70% of total villages in Indonesia: The bank has a network of 503,151 BRI Link Agents operating in more than 54 thousand villages, or more than 70% of the total villages in Indonesia. In 2021, the transaction volume by BRI Link reached Rp 1,143 trillion. The Bank operates in the segment of Micro Business, Retail Business, Corporate Business and Subsidiary Business through 462 branch offices, 19 regional offices, 611 sub branch offices all over Indonesia and is acknowledge by 70 million customers making it the largest bank in Indonesia in terms of customers.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Promoting sustainable businesses to tackle climate change: Increasing global warming has created numerous challenges due to the devastations caused because of rising temperatures worldwide. The effects of global warming are change in season cycle, increased number of heatwaves, disasters like floods, forest wildfires and many more. It has resulted in heavy losses financially and environmentally. The biggest reason for all of these is carbon emissions which has increased dramatically since early 2000’s. All of these factors have forced the world government and global corporations to come together to reduce carbon emission. In order do its bid in the fight against global warming PT Rakyat Bank has taken several initiatives. It was one of the eight banks in Indonesia to join a project initiated by country’s financial regulator called First movers on sustainable banking. The bank mapped out loan portfolio for sustainable businesses which currently constitutes 63.9% of the total loan portfolio. It also issued Sustainable bonds to raise capital, which was used to finance green projects.