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APB Indonesia

Governance - Risk Advisory & Solutions

A member firm of APB
Group
Proposal to Assist Bank
Eksekutif in
Credit & Operational Risk
Management Implementation
Bank Eksekutif Tbk.

August 2008
Contents
 Executive Summary

 Background:
 Why Implement Risk Management
 Bank Eksekutif in Our Perspective

 Approach & Methodology
 Wave 1: August – end of December 2008
 Wave 2: 2009
 Wave 3: Further Enhancement Phase (Start from 2010)

 Final Deliverables

 Working Schedule (Wave 1: August – end of December 2008)

 Our Value Propositions

 Our Services & Solutions

APB Indonesia Competency Statement a member firm of APB Group
Executive Summary

APB Indonesia Competency Statement a member firm of APB Group
Executive Summary

Designed specifically to meet the needs of Bank Eksekutif
Consist of modular and practical methodologies, tools and reporting
Enable the Bank to manage its Credit, and Operational Risks (including Legal, Reputation,
Strategic and Compliance risks)
User friendly and easy to use
Provided necessary training and “train the trainer” training
The commitment of the Bank Eksekutif’s Board of Commissioners (BOC) and Board of
Directors (BOD) is a mandatory to ensure this project is given its due importance and for its
success.
Our consultants will work side by side with the Bank’s RMU and other required counterparts
There will be an effective transfer of knowledge and technology to the RMU and relevant
business units
Comply with Bank Indonesia’s and BIS risk management guidelines and regulations

APB Indonesia Competency Statement a member firm of APB Group
Background: Why Implement Risk Management

APB Indonesia Competency Statement a member firm of APB Group
Why Implement Risk Management
-Two Reasons Why Indonesian Banking Implement Risk Management-

Create Economic
Value of the Firm

2 Reasons

Rugulatory
Requirement of BI

APB Indonesia Competency Statement a member firm of APB Group
Why Implement Risk Management
-Create Economic Value of the Firm-

1. Create Economic Value of the Firm :

 “To achieve better return & equity,
equity risk should be controlled more effectively.”
J.P. Morgan Chase (Annual Report 2001)

 “Risk is an integral part of all our activities. Excellence in Risk Management and Control is a
key success factor and therefore requires everyone’s commitment within our organization.”
Union Bank of Switzerland (Annual Report 2001)

 “To enable ANZ business units meeting their performance, growth & breakout objectives,
the identification and effective management of risk is essential as it is considered as a
strategic asset and a source of competitive advantage.”
advantage
ANZ Bank (Annual Report 2001)

APB Indonesia Competency Statement a member firm of APB Group
Why Implement Risk Management
-Regulatory Requirements of Bank Indonesia-

2. Regulatory Requirements of Bank Indonesia (BI):

 BI Regulations :
No. 5/8/PBI/2003 -RM implementation in the Banks
No. 9/13/PBI/2007 -Minimum Capital Adequacy Requirement for
Market Risk
Management
No. 9/15/PBI/2007 -IT in Risk Management Implementation
 Other BI Regulations related to Risk Management Implementation:
No. 8/4/PBI/2006 &
No. 8/14/PBI/2006 - Good Corporate Governance
 BI Guidelines (Circular Letter):
No. 5/21/DPNP - RM implementation in the Banks
No. 5/22/DPNP - Standard Guidelines of Internal Control System
No. 9/31/DPNP/07 - Internal Model Calculation of Minimum Capital
Adequacy
Requirement for Market Risk Management
No. 9/33/DPNP/07 -Standardized Model Calculation fo Minimum
Capital
Adequacy Requirement for Market Risk
Management
NOTES:
APB Indonesia Competency Statement a member firm of APB Group
Why Implement Risk Management
-Basel 2 Implementation Roadmap in Indonesia & South East Asia Counties-

2007 2008 2009 2010 2011
Q4 2009 Q4 2010
SA-CR,FIRB AIRB
BIA,SA-OR
Q4 2007 Q4 2009
SA-CR AIRB
BIA,SA-OR
Q4 2007
SA-CR,FIRB,AIRB
BIA,SA-OR,AMA

Q2 2007 Q4 2009
SA-CR FIRB,AIRB
BIA,SA-OR AMA

Q1 2009 Q4 2010 Q2 2011:
SA-CR IRB AMA
BIA SA-OR

APB Indonesia Competency Statement a member firm of APB Group
Background: Bank Eksekutif in Our Perspective

APB Indonesia Competency Statement a member firm of APB Group
Bank Eksekutif in Our Persepctive

Established in 1992, PT. Bank Eksekutif Internasional, Tbk (Bank Eksekutif) to date has 19
operational offices providing services to its clients in Java, Sumatera, Bali and Sulawesi. Aiming its
vision ‘To be the Bank of Choice in retail financing, valued for its business innovation & national
network‘ through corporate values: integrity, eficiency, responsibility, fighter spirit & teamwork
and motto/strategy: speed, service and solution, Bank Eksekutif focuses its services in providing
retail credit to its customer, especially through otomotive leasing industry and now also expands
to apartment developer credit.

Acknowledge the implementation roadmap of BI’s Basel 2 accords in Indonesia and support the
pillars of Arsitektur Perbankan Indonesia, Bank Eksekutif as part of Indonesian banking industry
has to comply with BI regulations that banks have to implement risk management to ensure that
risks faced by the bank are being managed efectively and the bank has to provide adequate
capital to cover each type of risks they are dealing with. On the other hand, as public listed bank
(22 % of shares owned by public), Bank Eksekutif also has an obligation to disclose it reports to
the public which includes the risk-based financial report that shows how effective the bank
manage its risks. In addition, continually expanding its business, Bank Eksekutif wishes to have an
effective risk management within the company to ensure that the opportunities are being
exploited optimally and the risks which can implicate the adverse effects to their objectives are
being managed properly. Prior to those matters above, Bank Eksekutif wants to make sure that
they have sufficient capability to put their risk management in place and in line with the BI
regulatory requirements.

APB Indonesia Competency Statement a member firm of APB Group
Approach & Methodology

APB Indonesia Competency Statement a member firm of APB Group
Approach & Methodology
-Proposed Approach & Methodology in Assisting
Bank Eksekutif’s Credit & Operational Risk Management Implementation-

Wave 1
Wave 2
Wave 3

APB Indonesia Competency Statement a member firm of APB Group
Approach & Methodology
-Wave 1: August – End of December 2008-

APB Indonesia Competency Statement a member firm of APB Group
Approach & Methodology
-Wave 2: 2009-

APB Indonesia Competency Statement a member firm of APB Group
Approach & Methodology
-Wave 3: Further Enhancement Phase (Start from 2010)-

APB Indonesia Competency Statement a member firm of APB Group
Final Deliverables

APB Indonesia Competency Statement a member firm of APB Group
Final Deliverables
-Deliverables at the End of Wave 3-

APB Indonesia Competency Statement a member firm of APB Group
Final Deliverables
-Bank-wide Risk Management Warehouse-

APB Indonesia Competency Statement a member firm of APB Group
Final Deliverables
-Bank-wide Risk Management Report Samples-

APB Indonesia Competency Statement a member firm of APB Group
Final Deliverables
-Bank-wide Risk Management Report Samples-

APB Indonesia Competency Statement a member firm of APB Group
Final Deliverables
-Bank-wide Risk Management Report Samples-

APB Indonesia Competency Statement a member firm of APB Group
Final Deliverables
-Bank-wide Risk Management Report Samples-

APB Indonesia Competency Statement a member firm of APB Group
Final Deliverables
-Bank-wide Risk Management Report Samples-

APB Indonesia Competency Statement a member firm of APB Group
Working Schedule & Deliverables
(Wave 1: August – End of December 2008)

APB Indonesia Competency Statement a member firm of APB Group
Working Schedule & Deliverables
-Wave 1: August – End of December 2008-

E: Phase 2 & 3 are conducted in parallel (Phase 3 may start 3 weeks after phase 2 roll-out)

APB Indonesia Competency Statement a member firm of APB Group
Our Value Propositions

APB Indonesia Competency Statement a member firm of APB Group
Our Value Propositions

As a group of governance and risk management professionals, we would like to
partner Bank Eksekutif in establishing the ERM fundamentals and implementation of
Banking Credit and Operational Risk Management which include:

•Socialization and Internalization of concept, principles and ERM framework to all
respective responsible officers which assure there will be an effective transfer of
knowledge process.

•Implementation of Banking Credit and Operational Risk Management which
comply with BI regulations and guidelines of Indonesian Basel 2 implementation
roadmap, from the start of basic implementation stage like Boards’ Breifing to define
the Bank’s Risk Philosophy, Appetite & Tolerance, up to the advancement level of
further development such as, the implementation of Minimum Capital Adequacy
modelling, Business Continuity Management and the development of Disaster
Recovery Center.

•Assessment, assistance and implementation of Credit & Operational Risk
Management software or solutions wich provide an user-friendly and easy-to-
use tool to strengthen the Bank’s Risk Management Infrastructure and provide
intuitive and timely necessary information needed in the Bank’s decision making
process.

APB Indonesia Competency Statement a member firm of APB Group
Our Services & Solutions

APB Indonesia Competency Statement a member firm of APB Group
Our Services & Solutions
Our company in Indonesia – APB Indonesia – was established to assist our client in solving their
risk management challenges, leveraging to the most optimum level that it is feasible within the
perspective of Good Corporate Governance and company’s performance ultimate objective:
Value of the firm.

Our company is a member firm of APB Group as integrated consulting services provider
ranging from Public/Corporate Governance advisories, legal risk advisories, enterprise risk
management advisories and solutions, strategic management advisories, human resources
consulting, tax consulting, CSR advisories, business and financial re-engineering advisories and
professional certification training up to knowledge and general management consulting.

Our aim is to become your adding value partner through our beliefs and values: commitment,
proficiency and trustworthy. We believe that our clients deserve for the excellent
services.

APB Indonesia Competency Statement a member firm of APB Group
Our Services & Solutions
-Governance Advisories-

Governance Advisories We provide GCG Advisory
Services which cover full-
range of company’s GCG
Sustainability Reporting
implementation, starting
from assessment, conduct
Strategic Reporting
gap analysis, measure the
magnitude of company’s
Boards’ Manual governance practices,
develop corporate code of
Corporate Code of Conduct conduct and boards’
manual, up to the
Self-Assessment deployment of corporate
strategic reporting, which
includes a.o. GCG, ERM
and Sustainability
reporting.

APB Indonesia Competency Statement a member firm of APB Group
Our Services & Solutions
-Risk Management Advisories-

Risk Management Advisories
Our Risk Management
Advisory Services cover
Post Implementation from the basic level of
advisories e.g. building the
Implementation risk governance
framework, up to the most
Assessment advance stages such as
establishment of BCP
(Business Continuity Plan),
Pre-Assessment
DRC (Disaster Recovery
Center), and the likes. We
Basic Moderate Advance also assist client in building
their control self-
assessment to accelerate
risk management
implementation.

APB Indonesia Competency Statement a member firm of APB Group
Our Services & Solutions
-Risk Management Solutions-

Comply with Bank Indonesia’s and
BIS 2 risk management
guidelines and regulations

Credit Risk
Management
iRisQ

Market Risk
Management

Operational
Risk
Management iRisQ

APB Indonesia Competency Statement a member firm of APB Group
Our Services & Solutions
-Risk Management Solutions-

iRisQ is an enterprise risk management
software for corporation in financial institution
and real sector company build from ground up
using first hand consulting experience to cater
operational risk management needs of your
company.

iRisQ is a key building block in implementing
an enterprise-wide, integrated approach to risk
and compliance management. iRisQ delivers a
policy-driven, process-centric way to manage
risk through self-assessments, end-user
surveys, automated workflow and executive
dashboards that provide management with
the visibility, control and decision support
required to understand and manage risks
APB Indonesia Competency Statement a member firm of APB Group
Our Services & Solutions
-Risk Management Solutions-

COMPASS is an integrated multi-user
Treasury/Portfolio Management System for
the administration of all treasury financial
products in a Treasury/Asset Management
Operations. It is designed on a layering
concept that provides enhanced
functionality and process integration that
allows an integrated flow of trades,
exceptions management, and maintaining
the data integrity from Front-, Middle- to
Back-Office of Treasury/Asset
Management operations and equipped
APB Indonesia Competency Statement a member firm of APB Group
Our Services & Solutions
-Strategic Management Advisories-

Strategic Management
Advisories In Strategic Management area,
we provide our Strategic
Turn-around and Change Management Advisory Services
Management
which cover company’s specific
Performance Management needs e.g. corporate / industrial
System benchmarking initiatives, HR &
Corporate Financial Financial Strategic Management,
Re-engineering Performance Management
Strategic HR Management
System, Turn-around and Change
Management etc.
Corporate Benchmarking
In particular, we also help
company to do the IPO (Initial
Public Offering) and migrate to be
‘Bank Devisa’.

APB Indonesia Competency Statement a member firm of APB Group
Our Services & Solutions
-Some of APB Group Corporate Clients-

Coordinating Ministry for Economic Affair
Ministry of State-Owned Enterprise

APB Indonesia Competency Statement a member firm of APB Group
Our Services & Solutions
-Some of Individual Consultants’ Exposures-

Dapen Perkebunan Dapen Telkom Dapen PLN Dapen Pertamina

APB Indonesia Competency Statement a member firm of APB Group
Our Services & Solutions
-APB Group Subject Matter Expert / Advisory Board-

• Mr. Prof. Dr. Mas’ud M : Banking and Infrastructure Industry
• Mr. F. Antonius Alijoyo : Banking Industry and Real Sector Companies
• Mr. Indra Safitri : Public Listed Companies
• Ms. Srie Urip : Real Sector Companies
• Ms. Meuthia Gani e-Rochman : Real Sector Companies
• Mr. Martiono Hadianto : Energy (Oil & Gas) and Mining Industry
• Mr. Jeffry Cheah : Banking, Insurance, and Pension Fund Industry
• Mr. William Lim : Banking, Insurance, and Pension Fund Industry
• Mr. Prof. Martin Loosemore. Ph.D : Public Sector Organizations and Infrastructure Industry
• Mr. Bede Boyle : Energy (Oil & Gas) and Mining Industry
• Mr. Jim Laird : Process- & Project-based Companies and Mining Industry

APB Indonesia Competency Statement a member firm of APB Group
Our Services & Solutions
-APB Indonesia Subject Matter Expert / Advisory Board-

Prof. Dr. Mas’ud Machfoedz, MBA is F. Antonius Alijoyo is a leading
a leading academician, consultant and consultant in Corporate Governance and
practitioner in Finance, Accounting, Enterprise Risk Management (ERM).
Corporate Governance and High Level of Currently he is the Asia Pacific Group
Banking Risk Management. Currently he is Director of PRMIA (Professional Risk
a professor in Gadjah Mada University, Managers’ International Association), a
and the chairman of the Advisory Board of member of National Committee on
APB Group. Governance, and a member of the
advisory board of APB Group.

Sri Urip is a well recognised figure and Martiono Hadianto is an experience
leading practitioner in large corporations. practitioners for more than 30 years in
In the field of CSR, she has been Strategic and Turnaround Management for
practitioner at its best, originator of State-Owned Enterprises. Currently he is
integrated Nation-SR (Nation Social the Chairman of PRiMA (Professionals in
Responsibility) framework. Risk Management Association).

Indra Safitri is a leading Capital Market Dr. Meuthia Ganie-Rochman has been
legal consultant and practitioner, a board involved in many CSR and governance
member of IKAI (Ikatan Komite Audit issues since early 1990. She has been well
Indonesia) and a member of the advisory exposed either as a prominent sociologist
board of APB Group. He is also a board or her consultancy within the programs of
member in several prominent non various international development
governmental organizations in the field of organizations.
legal advisories.

APB Indonesia Competency Statement a member firm of APB Group
Our Office Address
APB Indonesia
Wisma Bisnis Indonesia 2nd fl.
Jl. KH Mas Mansyur 12A
Jakarta 10220 – Indonesia
T: +62 215790 0805
F: +62 215790 0806

Our Contact Person
Ms. Diane Christina
(Managing Director)
E: diane.christina@apb-group.com
M: +62 81 199 1172
or
Mr. Charles R. Vorst
(Managing Consultant)
E: charles.vorst@apb-group.com
M: +62 8 159169 787
APB Indonesia Competency Statement a member firm of APB Group
APB Indonesia Competency Statement a member firm of APB Group