“ Indonesia is one of the most attractive markets for foreign investors. Its attractiveness stands out in spite of still having deficiencies in bureaucracy and law enforcement. ”
As the newly-appointed President Director of Bank Victoria since June 2015, I took the helm at an unfavourable time amid Indonesia experiencing an economic downturn. As such, my immediate focus has been to reduce our non-performing loan level while devising a strategy in pushing for business growth despite the difficult circumstances. Personally, I am still very optimistic until now because the situation simply calls for us to identify available opportunities. At present, the larger banks in Indonesia have stopped lending, especially with regards to corporate loans no matter what the industry is. The economic situation has indeed caused them to become utterly reluctant in taking risks with their assets. As a matter of fact, a CEO of one of Indonesia’s largest banks had confessed to me that he has gone as far as expecting zero growth in 2015 for his company.
This is definitely not the case with Bank Victoria because we are relatively small; thus we still have considerable room to grow. Of course on our side, we must further enhance our service quality and human resources, the latter of which especially pertains to key positions such as credit analysts, marketing personnel, and even branch managers.
Overall, I have a very positive outlook for the sector as well as for the country as a whole. The country is the largest economy in Southeast Asia with an enormous market and an abundance of resources. That said, there is still a lot that needs to be done with the infrastructure which the government should prioritise in improving. Government spending in this regard will have positive effects on the economy. The banking sector itself currently does not have the capacity to finance the country’s infrastructure development because such loans are commonly massive and long-term. At the moment, Indonesian banks can only grant loans with a maximum payback duration of 5-7 years.
With regards to lending, Bank Victoria is currently focusing on financing SMEs; for example, commercial loans up to 10-25 billion IDR where the leverage is low and there are still opportunities for us to take advantage of. On another note, the country’s presently sluggish economy has prompted us to hold back on our regional expansions. Nonetheless, after having postponed our plans for 2015, we are set to open two new branches within the next two years; one in Manado, North Sulawesi, in the beginning of 2016 and one in Bali by early 2017.
Our forte has been the level of personalised services. Most of our current customers come from the affluent consumer segment, therefore necessitating certain customisation to cater to their specific needs. Beyond this, Bank Victoria is also seeking to expand into retail banking. As such, we introduced our own mobile and internet banking services in June 2016. The main element that will set a banking service provider apart from its competitors is, of course, service quality; this pertains to aspects such as credit processing speed. Particularly in the context of SMEs as one of our main areas of focus, their preference does not merely concern the best price, but especially by being able to obtain a fast credit application process and a personal approach.
Bank Victoria is open to any cooperation with strategic partners and investors. This can be in the form of knowledge transfer on topics such as good corporate governance and best practices, or partnerships related to technology transfer and capital investment. Specifically for investment, it is certainly needed if Bank Victoria seeks to become a major bank in Indonesia. For that reason, when an investor does come, we certainly have the intention to expand with full force.