«P.T. BANK RAKYAT INDONESIA (PERSERO) TBK. NEW YORK AGENCY RESOLUTION PLAN Public Section P.T. BANK RAKYAT INDONESIA (PERSERO) TBK. NEW YORK AGENCY th ...»
P.T. BANK RAKYAT INDONESIA (PERSERO) TBK.
NEW YORK AGENCY
P.T. BANK RAKYAT INDONESIA (PERSERO) TBK. NEW YORK AGENCY
140 Broadway, 36 Floor, New York, NY 10005
Phone: (212) 379-3840, 379-3841, 379-3842 Fax: (212) 379-3850
SWIFT CODE: BRINUS33 Email: firstname.lastname@example.org
P.T. BANK RAKYAT INDONESIA (PERSERO) TBK. NEW YORK AGENCYPage 2 Perusahaan Perseroan (Persero) Pt. Bank Rakyat Indonesia, Tbk, or BRI New York Agency or “the Agency” as a “Covered company” is using this document as a template for the resolution plan provides written responses for each information item. When the information request does not apply to the covered company or its operations, a response of “not applicable” is given.
Public Section The public section shall consist of an executive summary of the resolution plan that describes the business of the covered company and includes, to the extent material to an understanding of the
1) The names of material entities;
2) A description of core business lines;
3) Consolidated or segment financial information regarding assets, liabilities, capital and major funding sources;
4) A description of derivative activities and hedging activities;
5) A list of memberships in material payment, clearing and settlement systems;
6) A description of foreign operations;
7) The identities of material supervisory authorities;
8) The identities of the principal officers;
9) A description of the corporate governance structure and processes related to resolution planning;
10) A description of material management information systems; and
11) A description, at a high level, of the covered company’s resolution strategy, covering such items as the range of potential purchasers of the covered company, its material entities and core business lines.
P.T. BANK RAKYAT INDONESIA (PERSERO) TBK. NEW YORK AGENCY – RESOLUTION PLAN.
P.T. BANK RAKYAT INDONESIA (PERSERO) TBK. NEW YORK AGENCYPage 3 (b) Executive summary (1) Describe the key elements of the covered company’s strategic plan for rapid and orderly resolution in the event of material financial distress at or failure of the covered company.
Perusahaan Perseroan (Persero) Pt. Bank Rakyat Indonesia, Tbk or the Agency, is submitting a plan as a covered company, Head Office is located in Jakarta, Indonesia, is majority owned by Government ofRepublic of Indonesia (56.75%).
The Agency does not maintain any entity. As an Agency of Foreign Bank licensed under New York State Department of Financial Services (NYSDFS), failure of the Agency does not pose any significant impact on or pose a threat to the financial stability of U.S. markets.
The Agency actively engaged in providing financing to Head Office customers related to Trade finance, extending loan to both Indonesian and US customers, and investing in securities. Major funding of the Agency is provided by Head Office In the event of material financial distress or failure, as a NYSDFS licensed bank, the Agency is subject to Article 13 New York Banking Law. The Law provides of liquidation in two ways, voluntary and Involuntary.
In the event of voluntary liquidation, if the Agency has enough funds to satisfy all of its liabilities (except liability to Head Office), under the advice and supervision of NYSDFS, Agency is subject to voluntary liquidation.
However in the case of Involuntary liquidation (where Head Office is not able to support) NYSDFS has right to close the activities of the Agency under the Article 13 of the Banking Law.
Legal name and address:
Licensed: the Agency established in April 8, 1988 is licensed under New York State Banking Department.
Until October 30, 2015, the Agency consists of 11 (eleven) staffs. The name of the staffs is as follow:
From the previous year Resolution Plan (2014), there is no significant and material changes in the Agency’s banking process and business.
(2) Describe material changes to the covered company’s resolution plan from the company’s most recently filed resolution plan (including any notices following a material event or updates to the resolution plan). If this is the first resolution plan the covered company is filing, an answer of “not applicable” is acceptable.
The Agency does not have any material changes from the latest Resolution Plan (2014).
(3) Describe any actions taken by the covered company since filing of the previous resolution plan to improve the effectiveness of the covered company’s resolution plan or remediate or otherwise mitigate any material weaknesses or impediments to effective and timely execution of the resolution plan. If this is the first resolution plan the covered company is filing, an answer of “not applicable” is acceptable.
The Agency does not have any material weaknesses and impediments to effective and timely execution of the resolution plan. The Resolution Plan of the Agency may be reasonably considered as effective due to low complexity of the operations and the simple organization of the Agency.
(c) Strategic analysis — Describe the covered company’s plan for rapid and orderly resolution in the event of material financial distress or failure of the covered company. The interconnections and interdependencies identified pursuant to section (g) of this document (“Interconnections and interdependencies”) must be included in the analysis provided pursuant to this section (c) of this document.
(1) Include detailed descriptions of:
(i) Key assumptions and supporting analysis underlying the covered company’s resolution plan, including any assumptions made concerning the economic or financial conditions that would be present at the time the covered company sought to implement such plan;
The Agency conducts limited operation in the United States. The main activities are trade finance, investment in securities, and loan participations, all is denominated in USD. The majority exposure of the assets is mainly to US and Indonesia. In addition, the Agency funding mainly comes from Head Office.
Resolution plan is intended to provide an orderly resolution of its operation in the U.S. in the event of material financial distress or failure of operations.
The key assumptions that drive the Agency to execute the resolution plan are:
- the Agency may not be able to roll over most of its maturing liabilities
- reduction by 50% or more in the amount of uncommitted line by its counterparties.
When both of the above condition occurs, the Agency will execute the resolution plan.
The Resolution Plan of the Agency to prevent or reduce the impact of financial distress is as follows:
1. Follow the relevant banking regulation appropriately
2. Intensify internal control function to avoid operation error that causes loss
3. Monitor the cash flow and liquidity accurately
4. Assess credit risks of the existing borrowers or issuers carefully and halt expansion, if necessary on new loan or securities portfolio
5. Provide adequate loan loss reserve.
6. Provide workable contingency funding plan policy.
7. Access the counterparties’ credit facilities to obtain liquidity. The Agency has tested this contingency plan to ensure the procedure works
8. Liquidate the secondary reserves starting with the most liquid ones
9. If the problem continues and potential loss occurs and may not be covered by the Agency, the Agency then proposes to the Head Office to seek support (ii) Range of specific actions to be taken by the covered company to facilitate a rapid and orderly resolution of the covered company, its material entities, and its critical operations and core business lines in the event of material financial distress or failure of the covered company;
1. Identify the cause of financial crisis and decide whether to execute the resolution plan
2. Halt asset expansion, whenever possible reduce or terminate the existing credit commitment to existing borrowers.
3. Seek liquidity by liquidating the secondary reserves starting with the most liquid ones, executing repo transaction of the marketable securities with its counterparties, issuing banker’s acceptance.
4. If the problem continues and potential loss occurs and may not be covered by the Agency, the Agency then proposes to the Head Office to seek support.
The Agency does not have any other entities except its own business activities, mainly in trade finance and loans.
(iii) Funding, liquidity and capital needs of, and resources available to, the covered company and its material entities, which shall be mapped to its critical operations and core business lines, in the ordinary course of business and in the event of material financial distress at or failure of the covered company;
Funding, liquidity and capital needs of the Agency are mainly from Head Office.
(iv) Covered company’s strategy for maintaining operations of, and funding for, the covered company and its material entities, which shall be mapped to its critical operations and core business line
1. Perform asset and liability management including cash flow monitoring
2. Test liquidity contingency plan regularly
3. Maintain the reliability of the infrastructure
4. Comply with relevant regulations (v) Covered company’s strategy in the event of a failure or discontinuation of a material entity, core business line or critical operation, and the actions that will be taken by the covered company to prevent or mitigate any adverse effects of such failure or discontinuation on the financial stability of the United States; provided, however, if any such material entity is subject to an insolvency regime other than the Bankruptcy Code, a covered company may exclude that entity from its strategic analysis unless that entity either has $50 billion or more in total assets or conducts a critical operation;
The Agency provides financing to Head Office customers related to Trade finance, extending loan to both Indonesian and US customers, and investing in securities. Major funding of the Agency is provided by Head Office
The strategy of the Agency in the event of a failure is:
1. To halt loan expansion and sell the loans to the market
2. To stop financing trades
3. Sell off the marketable securities
4. Seek liquidity from HO (vi) Covered company’s strategy for ensuring that any insured depository institution subsidiary of the covered company will be adequately protected from risks arising from the activities of any nonbank subsidiaries of the covered company (other than those that are subsidiaries of an insured depository institution);
Not applicable as the BRI Agency is not involved in nonbanking activities.
(2) Identify the time period(s) the covered company expects would be needed for the covered company to successfully execute each material aspect and step of the covered company’s plan;
3 to 6 months.
(3) Identify and describe any potential material weaknesses or impediments to effective and timely execution of the covered company’s plan;
(4) Discuss the actions and steps the covered company has taken or proposes to take to remediate or otherwise mitigate the weaknesses or impediments identified by the covered company, including a timeline for the remedial or other mitigatory action; and In order to address the weakness, the management will seek emergency liquidity from HO.
(5) Provide a detailed description of the processes the covered company employs for:
(i) Determining the current market values and marketability of the core business lines, critical operations, and material asset holdings of the covered company;
1. Using market information provider i.e. Bloomberg”
2. Seek information from the custodian of the securities (ii) Assessing the feasibility of the covered company’s plans (including timeframes) for executing any sales, divestitures, restructurings, recapitalizations, or other similar actions contemplated in the covered company’s resolution plan; and 1 to 3 years or more depending on the liquidators’ time frame.
(iii) Assessing the impact of any sales, divestitures, restructurings, recapitalizations, or other similar actions on the value, funding, and operations of the covered company, its material entities, critical operations and core business lines.
Decline in assets and loss in values will reduce business activities of the Agency.
(d) Corporate governance relating to resolution planning.
(1) Include a detailed description of:
(i) How resolution planning is integrated into the corporate governance structure and processes of the covered company.
The Agency has corporate governance structure and process to ensure that the U.S. resolution plan receives appropriate oversight from designated Agency Management under the HO supervision. The Agency Management has been designated to oversee the Agency resolution process.
(ii) The covered company’s policies, procedures, and internal controls governing preparation and approval of the covered company’s resolution plan;
Once the basic plan is prepared, it will be reviewed by the Agency Management and then will be reported to HO.