PT BFI FINANCE INDONESIA: 3Q17 RESULTS

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PT BFI FINANCE INDONESIA: 3Q17 RESULTS October 2017

Disclaimer: The information contained in this presentation is strictly confidential for PT BFI Finance Indonesia Tbk (BFI or the ‘Company’) and is provided by the Company to you solely for your reference. Any reproduction, dissemination or onward transmission of this presentation or the information contained herein is strictly prohibited. By accepting delivery of this presentation you acknowledge and agree to comply with the foregoing restrictions. In addition, this presentation may includes projections and forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. These views are based on assumptions and are subject to various risks. Such forward-looking statements are not guarantees of future performance and no assurance can be given that any future events will occur, that projections will be achieved or that the Company’s assumptions will prove to be correct. Actual results may differ materially from those projected and the Company does not undertake to revise any such forward-looking statements to reflect future events or circumstances.

* All absolute figures have been rounded to the closest Rp billion and therefore may have some discrepancies with percentage calculations

UPDATES AS OF SEP-17 •

9M17 new booking reached Rp10,251 bil, increase 33.7% YoY on backed by NDF 4W and 2W



Total managed receivables grows 18.5% YoY to Rp14,972 bil, while on net receivables increased by by 33.2% to Rp 14,356 bil



Yield Portfolio increases 61 bps YoY to 20.62% supported by larger proportion of higher yield portfolio



9M17 NPL ratio improved to 1.11% from 1.75% YoY due to continued vigilance in risk management and collection. (Note: Write-off policy for 4W & 2W changed to 210 days starting Dec-2016)



COC ratio also improved to 1.70% from 2.12% YoY, in line with the improvement in NCL from 1.51% to 1.05%.



Cost of fund decrease 115bps YoY from 11.38% to 10.22%, supported by maturing higher cost of funding and lower new funding cost



Signing of USD100 mm syndicated loan (led by SCB, SMBC & BTMU) and further upsized to USD125 mm after receiving substantial over subscription



Net Interest Spread improved by 176bps from 8.63% in 9M16 to 10.39% in 9M17



9M17 PBT reached Rp1,055 bil, 46.8% YoY Growth



9M17 PAT reached Rp842 bil, 52.1% YoY Growth backed by normalized tax rate of 20%

Growth

Asset Quality

Funding

Profitability

Other

• • •

Fit and Proper – Cornelius Henry confirmed as Commissioner and Andrew Adiwijanto as Director Setting up of subsidiary PT Finansial Integrasi Teknologi for digital initiatives Approval for setting up of sharia business unit

2

BALANCE SHEET HIGHLIGHTS In Rp bil (unless otherwise stated)

9M17

9M16

YoY

10,251

Managed Receivables^

14,972 12,639  18.5%

Total Net Receivables

14,356 10,779  33.2%

Total Assets

15,326 11,680  31.2%

Total Proforma Debt^

9,754

6,961 40.1%

10,237

8,569  19.5%

4,890

4,197  16.5%

Total Equity

FY15

10,743

10,058  6.8%

Driven by Non-Dealer 4W and 2W bookings growth

13,026

12,229  6.5%

11,583

9,898  17.0%

Higher growth vs managed rec. is due to declining JF

12,476

11,770  6.0%

7,656

7,318  4.6%

New bank loans drawdown and issuance of new Bond

8,915

9,457  5.7%

4,255

4,019  5.9%

7,669  33.7%

New Bookings

Total Debt

FY16

YoY

* All absolute figures have been rounded to the closest Rp billion and therefore may have some discrepancies with percentage calculations ^ Includes channeling and joint financing transactions

Quarterly Bookings Trend (3Q15-3Q17) 4,000

Rp bil

3,000 2,000

1,000 2,197

2,213

2,337

2,874

2,458

3,073

3,166

3,610

3,475

3Q15

4Q15

1Q16

2Q16

3Q16

4Q16

1Q17

2Q17

3Q17

0

Successfully able to sustain business growth from Non-Dealer Financing 4W and 2W 3

PROFIT & LOSS HIGHLIGHTS (PROFORMA) In Rp bil (unless otherwise stated)

9M17 9M16

YoY

Interest Income

2,162 1,873  15.4%

Financing Cost

(735) (759)  3.1%

Net Interest Income

1,426 1,115  28.0%

Fees & Other Income

776

598  29.8%

FY16 • Strong Non Dealer Financing income • Yield improvement of 61 bps YoY In line with new booking growth

FY15

YoY

2,532

2,415

 4.8%

1,001

1,063

 5.8%

1,531

1,353

 13.2%

826

713

 15.8%

2,358

2,066

 14.1%

1,108

968

 14.5%

1,250

1,099

 13.7%

225

263

 14.4%

Net Revenue

2,203 1,713  28.6%

Operating Expenses

(970) (798)  21.6%

Operating Income

1,233

Cost of Credit

(178) (197)  9.5%

PBT

1,055

719  46.8%

1,025

835

 22.8%

PAT

842

554  52.1%

798

650

 22.8%

916  34.7%

Manageable Increase driven largely by business volume growth

Improved CoC despite shorter WO cycle (210 DPD vs 270 DPD)

* All absolute figures have been rounded to the closest Rp billion and therefore may have some discrepancies with percentage calculations

Continued improvements in portfolio yield and Net Interest Margins

4

KEY RATIOS 9M17

9M16

YoY

Net Interest Spread

10.39% 8.63%  176 bps

Cost to Income

44.01% 46.56%  254 bps

COC / Avg Rec.

1.70% 2.12%  42 bps

ROAA

10.14% 8.23%  191 bps

ROAE

24.63% 18.16%  647 bps

NPL*

1.11% 1.75%  64 bps

Debt / Equity

2.0x

1.7x  30 bps

Improvement in both yield and CoF

Improvement in CoC in line with improvement in NCL Strong growth in PAT yoy Improved NPL due to prudent risk mgt & shorter WO cycle

FY16

FY15

YoY

8.85%

8.20%

 65 bps

47.00% 46.83%

 17 bps

1.80%

2.17%

 37 bps

8.68%

7.75%

 93 bps

19.37% 16.90%  247 bps 0.91%

1.33%

 42 bps

1.8x

1.8x

Stable

* Defined as Pastdue >90 days, Calculated from total managed receivables (including off B/S receivables)

Maintain strong financial ratios which reflect robust business performance management 5

ABILITY TO BUILD A MORE ROBUST BALANCE SHEET Bookings vs Receivables Growth (2012-9M17) 14,000 12,000 Rp bil

10,000 8,000

CAGR B: 11% R: 15%

7,373

9,570

11,220

12,229

13,026

12,639

14,972

2012

2013

2014

2015

2016

9M16

9M17

• Loan book shows improvement over the years – able to improve quality and tenor of loans booked, resulting in consistent Receivables growth compared to Bookings • CAGR growth yoy higher than the industry

• Consistently strong growth in Revenue as a result of robust balance sheet • Shows ability to maximise income generation from assets

9,295

8,652

10,058

10,743 10,251

6,993

7,669

Bookings +34%

6,000 4,000 2,000 0

Managed Receivables

Bookings

Revenue Growth (2012-9M17) 3,500 3,000 Rp bil

2,500

CAGR 20%

2,000 +24%

1,500 1,000

500 0

1,582

1,890

2,299

2,831

3,227

2,360

2,920

2012

2013

2014

2015

2016

9M16

9M17

Revenue

Sustainable loan and revenue growth over the years – backed by more profitable asset mix 6

STABLE PROFITABILITY OVER THE YEARS ROA vs Industry

PAT Growth 900

10.0%

800

9.0%

CAGR 13%

700

Rp bil

9.2% 8.0%

8.0%

25.0%

6.0%

500

20.0%

7.1%

400

842

798

300

600 490

508

4.9%

554

15.0%

5.0%

1.0%

-

0.0%

3.9%

3.8%

17.5%

16.2%

13.9% 12.0%

11.5%

3.8%

3.4%

10.0% 5.0% 0.0%

2012 2013 2014 2015 2016 2017 Source: Company, OJK



15.1%

11.1%

2.0%

PAT growth in spite of slowing economy Continued efficient OPEX management in spite of aggressive expansion over the years

18.2%

16.8%

3.0%

100



18.8% 17.1%

5.0%

4.0%

650

23.0%

8.2% 7.8%

7.0%

600

200

9.3%

ROE vs Industry

* 2017 annualised based on Sep-17 results ROA calculated using PBT/Assets

• •

One of the highest ROA companies in the industry Consistently outperformed industry

2012 2013 2014 2015 2016 2017 Source: Company, OJK * 2017 annualised based on Sep-17 results ROE calculated using PAT/Equity



ROE improving over the years

Still one of the most profitable multifinance companies, with ROA and ROE much ahead of the industry 7

ASSET QUALITY UNDER CONTROL NPL Trend (2012-9M17)

Write-Offs (2012-9M17)

4.00%

2.50% 2.15%

3.50%

1.83%

2.00%

3.00%

1.54%

2.50%

1.38% 1.38%

1.50%

2.00% 1.00%

1.50%

0.82% 0.66%

1.00% 0.50%

0.43%

0.52%

0.89%

1.52%

0.99% 1.05%

0.64%

0.50% 1.05%

1.38%

1.48%

1.33%

0.91%

1.11%

2012

2013

2014

2015

2016

9M17

0.00%

0.00% NPL %



Non-Dealer

Dealer

Well managed balance sheet with low NPLs

2011

Other

2012

2013

Gross Write-Off %

• •

2014

2015

2016

9M17

Net Write-Off %

Lower write off than its peers Write-off policy for 4W and 2W changed to 210 days in Dec-16

8

STRONG CAPITAL BASE Source of Funding (2012-9M17)

External Funding Sources

100% 90% 3,363

2,862

80%

3,567

4,019

4,255

2,139

1,259

1,682

2,965

70% 60%

2,212

1,358

50% 40%

1,124

1,454

2,404

3,172

2,484

4,890

JF 5%

484

Bonds & MTN 33%

3,392 1,622

Borrowings IDR 34%

30%

20%

3,933

5,637

4,691

6,362

10%

Borrowings USD 28%

0% 2012 Total Equity

2013

2,862

3,363

Bank borrowings

• •

2014

2015

2016

9M17

3,567

4,019

4,255

4,890

Bonds & MTN

JF

Equity

Increasingly larger proportion of bonds issued, taking advantage of improved pricing climate for bonds since last year Decline in Joint Financing contribute to better funding cost

Total : Rp10,237 billion • •

Corporate rating upgrade by Fitch Ratings to AA-(idn) has improved BFI credit profile and CoF Adequate facilities in pipeline to support further business expansion

Capital structure more diversified, resulting in better management of borrowing cost and stable NIM 9

ASSET COMPOSITION Booking Composition (9M16 vs 9M17) 100% 90% 80%

Managed Receivables Composition (9M16 vs 9M17)

2% 11%

2% 13%

100%

11%

13%

80%

90%

70%

70%

60%

60%

50%

2% 13%

6%

8%

44% 47%

50%

54%

53%

40%

40%

30%

30%

20%

20%

10%

19%

18%

10%

0%

3%

2% 9M17

0%

9M16 Dealer New 4W Non Dealer 2W

2% 12%

Dealer Used 4W Total Leasing

Non Dealer 4W Property

24% 23% 12%

6%

9M16 Dealer New 4W Non Dealer 2W

9M17 Dealer Used 4W Total Leasing

Non Dealer 4W Property

Continuous effort to shift the business towards higher yield segments

10

DISTRIBUTION NETWORK (AS AT SEP-17) Business Distribution and Branch Network

19%

20%

9M16

9M17

Kalimantan 31 outlets

↑32%

Sumatera 60 outlets 19%

9%

↑34% 13%

11%

9M16

9M17

51%

55%

↑37% 9M16

↑23%

19%

17%

15%

9M16

9M17

Sulawesi and East 60 outlets

9M17

Java and Bali 170 outlets

Total 321 Outlets

53%

Denotes % Managed Receivables by Region, 1H17 vs 1H16

YoY Booking growth

Denotes % Outlets by Region

Current expansion focused on Java 11