PT Bank Ganesha Tbk., Central Jakarta, Indonesia
Name of Organization / Company: PT Bank Ganesha Tbk., Central Jakarta, Indonesia
Category: Award for Excellence in Innovation in Financial Industries
Entry Title: Remarkable Evolution through Growth and Innovations
Bank Ganesha ("Ganesha") is a small private bank in Indonesia within BUKU2 (core capital IDR 1-5 trillion) category. Established in 1990, Ganesha was practically asleep for the first 25 years since inception. The previous management was dedicated but lacked the skills, strategy and capital. Consequently, Ganesha offered only basic banking products to tiny customer base and lacked public awareness.
Progress happens when the new management, brought in mid-2015, started to bring drastic changes. Within the next 1.5 years, despite challenging macroeconomic backdrop, Ganesha experienced rapid growth and delivered record financial performance by formulating new strategy and focusing its efforts on key areas with greatest impact and long-term value creation.
Spotlights in 2015-2016:
Building Scale through Strategic Alliances:
Partnered with Mitra Adi Perkasa ("MAP"), biggest retailer in Indonesia (150 brands including Zara, Marks&Spencer, Sogo, Starbucks with 2,000 outlets) and introduced products including Ganesha-MAPClub Savings, whereby Ganesha borne MAPClub Points as acquisition incentives and monthly interests to depositors. First of its kind, the product drives lowcost 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.
Ganesha also introduced Salary Loan and Payroll Savings for employees of sister companies, which were well received. Contrary to other Unsecured Personal Loan products in market, Salary Loan has miniscule 0.6% NPL since employees receive monthly salary and repay loan installment from their payroll accounts at Ganesha.
Financial Management and Inorganic Growth
Ganesha conducted and completed Initial Public Offering in 2016 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 CAR ratio in the industry. Shareholders' equity rose 407% yoy, enabled Ganesha to ascend from BUKU1 to BUKU2 classification and offer more products and services including Mobile/Internet Banking, Credit Card and Trade Finance.
Brand Building and Better Customer Service
Ganesha launched multiple-front initiatives to improve branding, in particular:
1. Revitalized branding on all products and services, providing modern, clean and fresh look (branch premises, website, marketing collateral).
2. Optimized network by relocating or refurbishing existing branches and ATM; including head office and main branch.
3. Introduced Service Culture and established much higher standards on service quality for front-liners by way of Branch Service Score Card and implementation of '5R' (translates to Compact, Neat, Clean, Maintained and Diligent) program.
4. Launched new 24-hour Customer Care Center at 1500-169, previously only operated from 9am-5pm.
Technology-driven Innovations and Efficiencies:
1. Introduced customer-centric Business Intelligence and Data Analytics for better management insight and sharper top-line decision making.
2. Launched ‘Outsource, Improve, Reduce’ programme for most operational aspects:
a. Outsource: Document Management, Collocation Data Center, Statement printing process, DRC relocation).
b. Improve: Automations at Operations and HR; Computerized stamp duty, Shortened FX remittance turnaround time.
c. Reduce: Sold 60% of operational vehicles and switched to Grab; Introduced e-Statements.
Despite difficult global and domestic macroeconomic backdrop, Ganesha not only survived 2015-2016, it thrived; with gains made across all areas of profitability, lending, deposit taking, capitalization, branding, organizational capacity and service quality.
Growth performance is better than industry average in many key metrics. At end-2016, Net Profit up 619% yoy driven by strong revenue generation, disciplined cost management and asset quality improvement. Revenue up 58% whilst costs up only 14%; translating to positive JAWS of 44%.
Assets up 115% on the back of Loan book growth of 94%. Funding base is diverse and up 65%. Gross and Net Non-Performing Loan ratios improved to 1.32% and 0.80% (much lower than industry average) at end-2016 from 3.14% and 1.80%, respectively, a year prior.