Financial Statements - anz.com · Balance Sheets BALANCE SHEETS 31 DECEMBER 2008 AND 2007 (In millions of rupiah, unless otherwise specified) PT ANZ PANIN BANK ASSETS Notes 2008 2007

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PT ANZ PANIN BANKFINANCIAL STATEMENTSYEARS ENDED 31 DECEMBER 2008 AND 2007

INDEPENDENT AUDITOR'S REPORT 49

BALANCE SHEETS 50-5131 DECEMBER 2008 AND 2007

STATEMENTS OF INCOME 52YEARS ENDED 31 DECEMBER 2008 AND 2007

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY 53YEARS ENDED 31 DECEMBER 2008 AND 2007

STATEMENTS OF CASH FLOWS 54YEARS ENDED 31 DECEMBER 2008 AND 2007

NOTES TO THE FINANCIAL STATEMENTS 55-79YEARS ENDED 31 DECEMBER 2008 AND 2007

Page

48

Independent Auditor,s Report

49

Balance Sheets

BALANCE SHEETS31 DECEMBER 2008 AND 2007

(In millions of rupiah, unless otherwise specified)

PT ANZ PANIN BANK

ASSETS Notes 2008 2007

Cash on hand 2a 21,609 15,838

Demand deposits with Bank Indonesia 2a 268,195 261,411

Demand deposits with other banks 2a,2c,3,22 612,999 199,032

Allowance for uncollectible accounts 2k,3 (6,130) (1,990)

Placements with other banks 2c,2f,4,22 618,781 1,545,461


Marketable securities, net 2g,5 291,583 1,044,906

Derivative receivables 2c,2h,6,22 740,969 34,980

Allowance for uncollectible accounts 2k,6 (7,382) (327)

Loans receivable 2i,2j,7 6,525,631 3,077,810


Acceptance receivables 2l,8 652,963 68,815


Bills receivable 2c,9,22 408,146 82,869


Interest receivable 2c,2d,22 80,332 35,405

Fixed assets, acquisition cost 2m 110,622 69,076

Accumulated depreciation 2m (53,267) (49,079)

Deferred tax assets, net 2n,12 30,830 21,686

Other assets 2c,22 101,036 60,882

TOTAL ASSETS 10,185,975 6,297,631

See Notes to the Financial Statements, which form an integral part of these financial statements.

50

Balance Sheets

PT ANZ PANIN BANKBALANCE SHEETS (continued)31 DECEMBER 2008 AND 2007


LIABILITIES AND SHAREHOLDERS' EQUITY Notes 2008 2007

LIABILITIES

Deposits from non-bank customers 10 7,452,379 4,648,620

Deposits from other banks 2c,10,22 159,491 264,312

Derivative payables 2c,2h,6,22 596,454 25,428

Acceptance payables 2c,2l,11,22 250,514 68,815

Taxes payable 2n,12 69,037 28,969

Interest payable 2c,2d,22 44,580 25,626

Other payables 2c,22 192,795 104,113

Obligation for post-employment benefits 2o 20,233 14,427

Estimated loss from off-balance sheet transactions 2k,13 40,019 13,899

TOTAL LIABILITIES 8,825,502 5,194,209

SHAREHOLDERS' EQUITY

Share capital at par value of Rp 1,000,000, in whole amount, per share:

Authorized, fully issued and paid-up capital of 50,000 shares 14 50,000 50,000

Retained earnings:

Appropriated for general reserve 10,000 10,000

Unappropriated 1,300,473 1,043,422

TOTAL SHAREHOLDERS' EQUITY 1,360,473 1,103,422

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 10,185,975 6,297,631


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Notes 2008 2007OPERATIONAL REVENUE AND EXPENSES:

INTEREST INCOME:

Interest 2c,2d,15,22 1,003,451 723,751

Commissions 2e 379,796 278,601

1,383,247 1,002,352

INTEREST EXPENSES 2c,2d,16,22 (400,937) (232,605)

Net interest income 982,310 769,747

OTHER OPERATIONAL REVENUE:

Foreign exchange gain, net 2b 178,213 43,503

OTHER OPERATIONAL EXPENSES:

Uncollectible accounts expense

(including estimated loss from

off-balance sheet transactions) 2k (263,277) (233,339)

General and administrative expenses 2c,17,22 (371,343) (257,768)

Personnel expenses (96,515) (63,292)

Other expenses (54,339) (11,507)

(785,474) (565,906)

Net other operational expenses (607,261) (522,403)

NET OPERATING INCOME 375,049 247,344

NON-OPERATIONAL REVENUE 469 242

INCOME BEFORE TAX 375,518 247,586

INCOME TAX EXPENSE 2n,12 (118,467) (75,966)

NET INCOME 257,051 171,620

STATEMENTS OF INCOMEYEARS ENDED 31 DECEMBER 2008 AND 2007


PT ANZ PANIN BANK


Statements of Income

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PT ANZ PANIN BANKSTATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITYYEARS ENDED 31 DECEMBER 2008 AND 2007


Balance as of 31 December 2006 50,000 10,000 871,802 931,802

Net income for the year - - 171,620 171,620

Balance as of 31 December 2007 50,000 10,000 1,043,422 1,103,422

Net income for the year - - 257,051 257,051

Balance as of 31 December 2008 50,000 10,000 1,300,473 1,360,473

TotalShareholders’

EquityUnappropriatedAppropriated

Retained EarningsShare

Capital


Statements of Changes in Shareholders, Equity

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2008 2007CASH FLOWS FROM OPERATING ACTIVITIES:Income before tax 375,518 247,586Adjustments to reconcile income before tax to net cash provided by operating activities:

Foreign exchange gain, net 286,610 (99,709)Uncollectible accounts expense(including estimated loss from off-balance sheet transactions) 263,277 233,339Loans written-off (196,718) (206,020)Recovery of loans previously written-off 12,554 9,954Depreciation of fixed assets 15,255 12,368Gain on sale of fixed assets 955 (242)Post-employment benefit expenses 5,863 2,638Interest expenses 400,937 232,605Interest income (1,003,451) (723,751)

Changes in operating assets and liabilities:Placements with other banks 926,680 (182,403)Marketable securities 753,323 (739,922)Derivative receivables (705,989) (23,014)Loans receivable (3,348,235) (261,386)Acceptance receivables (584,147) (47,903)Bills receivable (325,278) 92,333Other assets (40,154) (1,336)Deposits from non-bank customers 2,393,842 962,029Deposits from other banks (105,253) 150,157Derivative payables 571,026 14,108Acceptance payables 181,698 47,903Taxes payable 6,610 823Other payables 88,685 19,560

Interest expenses paid (381,981) (228,225)Interest income received 958,523 713,928Payment of post-employment benefits (57) (528)Income tax paid (94,153) (75,260)

Net cash provided by operating activities 455,940 149,632

CASH FLOWS FROM INVESTING ACTIVITIES:Acquisition of fixed assets (54,639) (6,403)Proceeds from sale of fixed assets 1,071 536

Net cash used in investing activities (53,568) (5,867)

Effect of exchange rate fluctuations on cash and cash equivalents 24,150 10,518

Net increase in cash and cash equivalents 426,522 154,283Cash and cash equivalents, beginning of year 476,281 321,998Cash and cash equivalents, end of year 902,803 476,281

Cash and cash equivalents consists of:Cash on hand 21,609 15,838Demand deposits at Bank Indonesia 268,195 261,411Demand deposits with other banks 612,999 199,032

902,803 476,281

STATEMENTS OF CASH FLOWSYEARS ENDED 31 DECEMBER 2008 AND 2007


PT ANZ PANIN BANK


Statements of Cash Flows

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PT ANZ PANIN BANKNOTES TO THE FINANCIAL STATEMENTSYEARS ENDED 31 DECEMBER 2008 AND 2007


1. GENERALANZ Panin Bank (“the Bank”), an Indonesian domiciled company, was established by deed of notary public Mudofir Hadi, SH dated

5 September 1990 No. 31; this deed was approved by the Minister of Justice under No. C2-5698.HT.01.01.Th.90 dated 18 September

1990, registered at the Jakarta Court of Justice under No. 1990/1990 dated 21 September 1990 and published in Supplement No.

4374 to State Gazette No. 86 dated 26 October 1990. The Bank's Articles of Association have been amended for several times, the

latest amendment to comply with the Company Law No. 40/2007 was effected by deed of notary public Sri Hasmiyati, SH, dated

3 November 2008 No. 03; this deed was approved by the Minister of Law and Human Rights under No. AHU-91701.AH.01.02.Tahun

2008 dated 28 November 2008.

The Bank's head office is located at ANZ Tower, Jalan Jenderal Sudirman Kav. 33A, Jakarta. As at 31 December 2008, the Bank had

4 branches, 1 supporting branch and 3 credit card representative offices.

In accordance with article 3 of its Articles of Association, the objective of the Bank is to engage in banking activities.

As of 31 December 2008 and 2007, the composition of the Bank's Board of Commissioners and Directors was as follows:

a.

b.

c.

2008 2007

Commissioners Enrique V. Bernardo Enrique V. BernardoBill Foo Say Mui Bill Foo Say Mui

Jusuf Arbianto Tjondrolukito*) Fadjar GunawanEnding Fadjar*) Don Bacon Hall

President Director Joseph Abraham John M. Collins V.Vice President Director Mark Joseph Dawson -Directors Muhamadian Rostian Muhamadian Rostian

Wiling Solaiman Bolung Wiling Solaiman BolungRiko Agus Surya Abdurrahman Budiman Poedjirahardjo

*) Subject to fit and proper test by Bank Indonesia.

As of 31 December 2008 and 2007, the Bank employed 290 and 185 permanent employees, respectively.

The Bank's majority shareholder, the Australia and New Zealand Banking Group Limited, has subsidiaries and affiliates throughout

the world.

The financial statements were authorized for issue by the Board of Directors on 28 April 2009.

d.

e.

f.

Notes to The Financial Statements

55

2. SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies adopted by the Bank conform to accounting principles generally accepted in Indonesia.

The significant accounting policies, consistently applied in the preparation of the financial statements for the years ended

31December 2008 and 2007, were as follows:

Basis for preparation of the financial statements

The Bank's financial statements, presented in millions of rupiah, are prepared on the accrual basis, except for interest on non-

performing loans and other productive assets which are recognized on a cash basis. In addition, the Bank uses the historical cost

concept in preparing its financial statements, except otherwise specified. The financial statements are prepared in accordance

with the Statement of Financial Accounting Standard (“SFAS”) No. 31 (2000 Revision), “Accounting for Banking Industry” and

Pedoman Akuntansi Perbankan Indonesia 2001 (accounting guidelines for banking industry) prescribed by Bank Indonesia and

Indonesian Institute of Accountants.

The statements of cash flows present the changes in cash and cash equivalents from operating, investing and financing activities.

Cash and cash equivalents consist of cash on hand, demand deposits with Bank Indonesia and demand deposits with other banks.

The statements of cash flows are prepared using the indirect method.

Foreign currency transaction and balances

The Bank maintains its accounting records in Rupiah. Transactions in foreign currencies are translated into Rupiah at the rates

prevailing at the transaction date. Year-end balances of monetary assets and monetary liabilities denominated in foreign currencies

are translated into Rupiah using Reuters' middle rates on the balance sheet date at 16.00 Western Indonesian Time. The principal

rates of exchange used as of 31 December 2008 and 2007 were as follows:

a.

b.

2008 2007Rp Rp

USD 1 10,900 9,393

AUD 1 7,554 8,266

SGD 1 7,588 6,533

GBP 1 15,755 18,761

JPY 100 12,065 8,384

NZD 1 6,319 7,292

EUR 1 15,356 13,822

HKD 1 1,406 1,204

CHF 1 10,319 8,342

Foreign exchange gains (losses), realized and unrealized, are credited (charged) to the statement of income for the year.


56

Related party transactions

In these financial statements, the term related parties is used in

accordance with the definition of SFAS No. 7, “Related Party

Disclosures”.

All transactions with related parties, which were made under

the same as well as different terms and conditions with non-

related parties, are disclosed in the financial statements.

Interest income and expenses

Interest income and expenses are recognized on the accrual

basis. Discounts and premiums are amortized on a straight-line

basis and are reflected as an adjustment to interest.

The recognition of interest income on loans and other productive

assets is discontinued when they are classified as non-performing

(substandard, doubtful and loss). Interest income from non-

performing loans and other productive assets is reported as

contingent receivables and to be recognized as income when

the cash is received (cash basis).

Loans which their principal or interest have been past due for

90 days or more, or where reasonable doubt exists as to the

timely collection, are generally classified as non-performing

loans. Non-performing loans include loans classified as

substandard, doubtful and loss. Interest accrued but not yet

collected is reversed when a loan is classified as non-performing.

All cash receipts related to non-performing loans which are

classified as doubtful and loss are applied as a reduction to the

principal. The excess of cash receipts over the outstanding

principal is recognized as interest income in the statement of

income for the year.

Fees and commission income

Fees and commission income which are directly related to

lending activities and/or cover specific periods and the amount

is significant, are deferred and amortized based on the straight-

line method over the terms of the related loans. The outstanding

balance of deferred fees and commission income on loans

terminated or settled prior to maturity are recognized as income

at settlement. Fees and commissions which are not directly

related to the specific period are recognized when the

transactions occur.

Placements with other banks

Placements with other banks are stated at their outstanding

balance, less unearned interest income and net of allowance for

uncollectible placements, which is determined based on

management's review of the collectibility of each individual

placement at year end.

Marketable securities

Marketable securities consist of Bank Indonesia certificates.

Investment in marketable securities is classified as one of these

categories: held-to-maturity, trading and available-for-sale.

Marketable securities which are classified as held-to-maturity

are presented on the balance sheets at acquisition cost after

amortization of premiums or discounts. The decline in fair value

below the cost (including amortization of premiums or discounts),

which is determined to be other than temporary, is recorded as

a permanent decline in the value of investment and charged to

the statement of income for the year.

Marketable securities which are classified as trading and available-

for-sale are stated at fair value at the balance sheet date.

Unrealized or realized gains or losses from the difference between

fair value and the acquisition cost of trading marketable securities,

are recognized or charged to the statement of income for the

year. The difference between the fair value and the acquisition

cost of available-for-sale marketable securities, which are

unrealized, is presented as an equity component, net of the

related tax effect, and will be recognized in the statement of

income for the year when the securities are sold. Fair value is

determined based on quoted market price.

Realized gains or losses on the sale of marketable securities are

recognized or charged to the statement of income for the year

based on the specific identification basis.

c.

d.

e.

f.

g.


57

Derivative instruments

Derivative transactions are accounted for in accordance with

SFAS No. 55, “Accounting for Derivative Instruments and Hedging

Activities”, which requires that all derivative instruments be

recognized in the financial statements at their fair value. To

qualify for hedge accounting, SFAS No. 55 requires certain criteria

to be met, including documentation required to have been in

place at the inception of the hedge.

Changes in the fair value of derivative instruments that do not

qualify for hedge accounting are recognized in the statement

of income of the year. If derivative instruments are designated

and qualify for hedge accounting, changes in fair value of

derivative instruments are recorded as adjustments to the assets

or liabilities being hedged in the statement of income of the

current year or in the shareholders' equity, depending on the

type of hedge transaction and the effectiveness of the hedge.

Loans receivable

Credit card receivables are stated at the principal amount

outstanding (including capitalized interest), net of allowance

for uncollectible credit card receivables.

Loans receivables are stated at the principal amount outstanding,

net of allowance for uncollectible loans. For restructured loans,

the gross amount of loans consists of loan principal, interest and

other charges which are capitalized into loan principal amount.

The capitalized interest is recognized as unearned interest

income. Syndicated loans are stated at the principal amount in

accordance with the risk borne by the Bank.

Troubled debt restructuring

The Bank accounts for troubled debt restructuring in accordance

with the type of restructuring.

In troubled debt restructuring which involves a receipt of assets

(including an equity interest of the debtor), the Bank records

those assets (including an equity interest) at their fair value at

the time of restructuring. The excess of the carrying amount of

the receivables over the fair value of assets received less

estimated costs to sell, is recognized as loss from troubled debt

restructuring in the statement of income for the year.

In troubled debt restructuring which involves only a modification

of terms, the Bank accounts for the effect of the restructuring

prospectively and does not change the carrying value of

receivables at the time of restructuring unless the amount

exceeds the present value of the total future cash receipts

specified in the new terms. If the present value of the total future

cash receipts specified under the new terms is lower than the

recorded receivables balance prior to restructuring, the Bank

reduces the receivables balance to the amount equal to the

present value of the total future cash receipts. The amount of

the reduction is charged to the statement of income for the year.

Investments in shares resulting from troubled debt restructuring

are recorded as temporary investments and accounted for under

the cost method regardless the percentage of ownership. If there

is a permanent diminution in the value of investments, the

carrying value of such investments is adjusted for the amount

of permanent diminution.

Allowance for uncollectible accounts of assets and estimated

loss from off-balance sheet transactions

The Bank provides allowance for uncollectible accounts of

productive assets (consist of demand deposits with other banks,

placements with other banks, marketable securities except for

Bank Indonesia certificates and government bonds, derivative

receivables, loans receivable, acceptance receivables and bills

receivable), allowance for uncollectible accounts of non-

productive assets (consist of foreclosed assets, abandoned

property, inter-branch accounts and suspense account), and for

estimated loss from off-balance sheet transactions.

The allowance for uncollectible accounts of assets and estimated

loss from off-balance sheet transactions are established through

estimation for such losses. The allowance amount and estimated

loss, which management believes to be adequate to absorb

possible losses from uncollectible assets and off-balance sheet

transactions, are determined based on an evaluation of the

collectibility of each individual asset and off-balance sheet

transaction with credit risk. Management's evaluation on the

collectibility of each individual asset and off-balance sheet

transaction is based on a number of subjective factors, including

current and anticipated economic conditions/business prospects,

financial conditions, payment ability and other relevant factors.

h.

i.

j.

k.


58

Fixed assets

Fixed assets are presented at acquisition cost (initial measurement) less accumulated depreciation. Subsequent to initial measurement,

fixed assets are measured using the cost model. Depreciation is applied from the month such assets were placed into service, on

the straight-line method, based on estimated useful lives as follows:

m.

Leasehold improvements 3 - 5 years

Furniture and fixtures 3 - 5 years

Office equipments 3 - 8 years

Motor vehicles 5 years

Classification Minimum percentage

Special mention 5%Substandard 15%Doubtful 50%Loss 100%

Specific allowance for productive assets and off-balance sheet transactions classified asspecial mention, substandard, doubtful and loss is calculated after deducting the valueof allowable collateral.

For restructured loans receivable, the Bank management's evaluation of the collectibility of the loans receivable in accordance

with the prevailing Bank Indonesia Regulation.

Adjustments to the allowance for uncollectible accounts of assets and the estimated loss from off-balance sheet transactions are

reported in the period such adjustments become known or can be reasonably estimated. These adjustments include additional

allowance and recoveries of previously written-off assets and off-balance sheet transactions.

Productive and non-productive assets as well as off-balance sheet transactions are written off against the respective allowance

for uncollectible accounts and estimated loss from off-balance sheet transactions when management believes that the collectibility

of the principal or recoverability of non-productive assets are unlikely.

Acceptance receivables and payables

Acceptance receivables and payables are stated at nominal value of the letters of credit (L/C) or net realizeable value of the L/C

accepted by the accepting banks.

The Bank follows the regulation from Bank Indonesia concerning the assets quality of a bank as a guidance in determining the

allowance for uncollectible assets and estimated losses from off-balance sheet transactions, with general guidelines as follows:

1. General allowance of minimum 1% of productive assets and off balance sheet transactions that are classified as “current”.

2. Specific allowance for productive and non-productive assets and off-balance sheet transactions that are classified as:

l.

Income tax

The Bank adopts the asset and liability method in determining its income tax expense. Under this method, deferred tax assets and

liabilities are recognized at each reporting date for temporary differences between the financial and tax bases of assets and

liabilities. This method also requires the recognition of future tax benefits, such as tax loss carryforwards, to the extent that

realization of such benefits is probable.

n.


59

Post-employment benefits

The Bank's obligation for post-employment benefits is

calculated at present value of estimated future benefits that

the employees have earned in return for their service in the

current and prior periods, deducted by the fair value any plan

assets. The calculation is performed by an independent actuary

using the projected-unit-credit method.

When the benefits of a plan change, the portion of the increase

or decreased benefits relating to past service by employees is

charged or credited the statement of income on a straight-line

basis over the estimated average remaining service period

until the benefits become vested. To the extent that the benefits

vest immediately, the expense is recognized immediately in

the statement of income.

Actuarial gains and losses are recognized as income or expense

when the cumulative unrecognized actuarial gains or losses

at the end of the previous reporting year exceeds 10 percent

of the greater of the present value of the defined benefit

obligation (before being deducted by a plan assets) and the

fair value of the plan assets at the date. These gains or losses

are recognized on a straight-line basis over the estimated

average remaining service period until the benefit become

vested.

Use of estimates

The preparation of financial statements in conformity with

generally accepted accounting principles requires management

to make estimates and assumptions that affect the reported

amounts of assets and liabilities, and disclosure of contingent

assets and liabilities at the date of the financial statements,

and the reported amounts of revenues and expenses during

the reporting period. Actual results could differ from those

estimates.

o.

In millions of rupiah 2008 2007Rupiah 33,026 18,060Foreign currencies 579,973 180,972Total demand deposits at other banks, before allowance foruncollectible accounts 612,999 199,032

Allowance for uncollectible accounts:Rupiah (330) (180)Foreign currencies (5,800) (1,810)

(6,130) (1,990)

Total demand deposits at other banks, net 606,869 197,042

3. DEMAND DEPOSITS WITH OTHER BANKSRepresent demand deposits at correspondent banks:

2008 2007% %

Average interest rate per annum:Rupiah 3.03 0.78Foreign currencies 1.87 5.52

As of 31 December 2008 and 2007, all outstanding balances of demand deposits at other banks were classified as “current”.

p.


60

5. MARKETABLE SECURITIESRepresent Bank Indonesia certificates that are classified as available-for-sale, with maturity period of less than two months.

The weighted average interest rate per annum of Bank Indonesia certificates during 2008 and 2007 were 8.84% and 8.57%,

respectively.

As of 31 December 2008 and 2007, all marketable securities were classified as “current”.

In millions of rupiah 2008 2007Derivative Derivative Derivative Derivative

receivables payables receivables payablesCurrency forward contracts:

Banks 199,923 168,224 7,850 7,997Non-banks 117,984 32,410 4,372 1,331

317,907 200,634 12,222 9,328Foreign currency options:Banks - 5,643 4,872 4,807Non-banks 76,275 46,416 4,935 5,013

76,275 52,059 9,807 9,820Cross currency swap contracts:

Banks 309,426 40,561 12,308 -Non-banks - 271,512 643 6,280

309,426 312,073 12,951 6,280Interest rate swap contracts:

Banks - 31,688 - -Non-banks 37,361 - - -

37,361 31,688 - -

Total, before allowance for uncollectible accounts 740,969 596,454 34,980 25,428

Allowance for uncollectible accounts (7,382) - (327) -Total, net 733,587 596,454 34,653 25,428

6. DERIVATIVE INSTRUMENTS

4. PLACEMENTS WITH OTHER BANKSRepresent short-term placements with other banks in the form of call money, with maturity period up to one month since the

placement date.

In millions of rupiah 2008 2007 2008 2007Rupiah 8.33 6.55 90,000 -Foreign currencies 3.13 5.22 528,781 1,545,461Total placements with other banks,before allowance for uncollectible accounts 618,781 1,545,461

Weighted average interest rateper annum (%)

In millions of rupiah 2008 2007Allowance for uncollectible accounts:

Rupiah (900) -Foreign currencies (5,288) (15,455)

(6,188) (15,455)

Total placements with other banks, net 612,593 1,530,006

As of 31 December 2008 and 2007, all placements with other banks were classified as “current”.


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The notional amount, average interest rate and average contract period of cross currency swap contracts were as follows:

Currency 2008 2007 2008 2007 2008 2007

Cross currency swappurchase contracts USD 110,674,985 78,000,187 4.13 6.90 1,286 1.409

JPY 1,809,000 - 2.79 - 521 -IDR 1,230,966,470,980 - 11.68 10.90 1,194 1.397

Cross currency swapselling contracts USD 115,674,986 78,000,187 4.02 6.90 1,236 1.397

JPY 1,809,000 - 2.79 - 522 -IDR 1,183,022,395,065 - 11.38 10.54 1,241 1.409

Notional amount(in original currency)

Average interestrate per annum (%)

Average contractperiod (days)

The notional amount, average interest rate and average contract period of interest rate swap contracts were as follows:

Currency 2008 2007 2008 2007 2008 2007

To be received USD 330,435,000 - 2.18 - 1,028 -

To be paid USD 330,435,000 - 2.09 - 1,028 -

Notional amount(in original currency)

Average interestrate per annum (%)

Average contractperiod (days)

The interest rate of the above cross currency swap and interest rate swap contracts are exercised on a monthly, quarterly, andsemi-annual basis.The Bank entered into derivative contracts for trading as well as for hedging the Bank's net open position, interest rate gap risk,maturity gap risk, and other risks in the Bank's daily operations, which did not qualify for hedge accounting. As such, changes infair values of these derivative contracts are changed (credited) to the statement of income for the year.As of 31 December 2008 and 2007, all outstanding balances of derivative receivables were classified as “current”.

Contract amount Average contract period(in original currency) (days)

Currency 2008 2007 2008 2007

Currency forward purchase contracts USD 252,127,577 100,028,278 195 176AUD 4,100,000 29,261,951 98 180EUR - 5,442,344 - 67JPY 611,434,200 103,500,000 111 70

SGD - 100,000 - 14IDR 2,707,379,039,967 941,072,960,113 120 135

Currency forward selling contracts USD 238,267,459 103,476,572 121 122AUD 5,000,000 29,061,951 93 189EUR - 5,442,344 - 67JPY 611,429,800 103,500,000 111 70

SGD - 100,000 - 14IDR 2,742,513,924,335 1,121,672,515,000 196 183

Currency option purchase contracts USD 76,241,944 107,712,154 231 221Currency option selling contracts USD 35,280,415 106,700,000 228 224

As of 31 December 2008 and 2007, the notional amount and average contract period of currency forward contracts and currency

option contracts were as follows:


62

In millions of rupiah 2008 2007Loans receivable by types of loan:

Rupiah:

Working capital 1,342,072 342,397

Investment 86,256 90,000

Credit cards 2,219,198 1,663,174

Employee loans 39,943 18,617

3,687,469 2,114,188

Allowance for uncollectible accounts (170,319) (135,830)

3,517,150 1,978,358

Foreign currencies:

Working capital 2,031,724 832,935

Investment 806,438 130,687

2,838,162 963,622

Allowance for uncollectible accounts (25,885) (16,158)

2,812,277 947,464

Total loans receivable, net 6,329,427 2,925,822

Pass Special Substandard Doubtful Loss Total mention

Rupiah:Manufacturing 890,160 18,220 4,000 - - 912,380Allowance for uncollectible accounts (4,132) (911) - - - (5,043)

886,028 17,309 4,000 - - 907,337

Business services 434,200 - - - 434,200Allowance for uncollectible accounts (3,080) - - - - (3,080)

431,120 - - - - 431,120

Trading - - - - - -Allowance for uncollectible accounts - - - - - -

- - - - - -

Others 1,962,031 222,246 35,969 60,087 60,556 2,340,889Allowance for uncollectible accounts (55,088) (11,112) (5,396) (30,044) (60,556) (162,196)

1,906,943 211,134 30,573 30,043 - 2,178,693

Sub-total rupiah, net 3,224,091 228,443 34,573 30,043 - 3,517,150

In millions of rupiah 2008

Loans receivable by types of industry:


63

7. LOANS RECEIVABLE


Foreign Currencies:Manufacturing 672,304 34,249 - - - 706,553Allowance for uncollectible accounts (6,723) (1,712) - - - (8,435)

665,581 32,537 - - - 698,118

Business services 685,163 36,683 - - - 721,846Allowance for uncollectible accounts (4,387) (1,834) - - - (6,221)

680,776 34,849 - - - 715,625

Trading 19,620 - - - - 19,620Allowance for uncollectible accounts - - - - - -

19,620 - - - - 19,620

Others 1,309,435 80,708 - - - 1,390,143Allowance for uncollectible accounts (7,194) (4,035) - - - (11,229)

1,302,241 76,673 - - - 1,378,914

Sub-total foreign currencies, net 2,668,218 144,059 - - - 2,812,277

Total loans receivable, net 5,892,309 372,502 34,573 30,043 - 6,329,427



Rupiah:Manufacturing 260,451 39,000 20,650 - - 320,101Allowance for uncollectible accounts (2,605) (1,950) (3,097) - - (7,652)

257,846 37,050 17,553 - - 312,449

Business services 108,796 - - - - 108,796Allowance for uncollectible accounts - - - - - -

108,796 - - - - 108,796

Trading - - - - - -Allowance for uncollectible accounts - - - - - -

- - - - - -

Others 1,405,605 152,187 25,868 49,334 52,297 1,685,291Allowance for uncollectible accounts (39,725) (7,609) (3,880) (24,667) (52,297) (128,178)

1,365,880 144,578 21,988 24,667 - 1,557,113

Sub-total rupiah, net 1,732,522 181,628 39,541 24,667 - 1,978,358



64


Foreign currencies:Manufacturing 379,285 103,323 - - - 482,608Allowance for uncollectible accounts (3,793) (5,166) - - - (8,959)

375,492 98,157 - - - 473,649

Business services 161,090 63,942 - - - 225,032Allowance for uncollectible accounts (1,611) (3,197) - - - (4,808)

159,479 60,745 - - - 220,224

Trading 16,907 - - - - 16,907Allowance for uncollectible accounts - - - - - -

16,907 - - - - 16,907

Others 239,075 - - - - 239,075Allowance for uncollectible accounts (2,391) - - - - (2,391)

236,684 - - - - 236,684

Sub-total foreign currencies, net 788,562 158,902 - - - 947,464

Total loans receivable, net 2,521,084 340,530 39,541 24,667 - 2,925,822


Loans receivable by maturity period based on loan agreement:

In millions of rupiah 2008 2007

Rupiah:Up to 1 year 3,068,309 2,095,571More than 1 year up to 5 years 595,472 5,146More than 5 years 23,688 13,471

3,687,469 2,114,188Allowance for uncollectible accounts (170,319) (135,830)

3,517,150 1,978,358

Foreign currencies:Up to 1 year 998,385 963,622More than 1 year up to 5 years 1,839,777 -

2,838,162 963,622Allowance for uncollectible accounts (25,885) (16,158)

2,812,277 947,464



65


Rupiah:Up to 1 year 3,647,785 2,095,712More than 1 year up to 5 years 15,996 7,714More than 5 years 23,688 10,762

3,687,469 2,114,188Allowance for uncollectible accounts (170,319) (135,830)

3,517,150 1,978,358Foreign currencies:

Up to 1 year 2,838,162 963,622Allowance for uncollectible accounts (25,885) (16,158)

2,812,277 947,464


Loans receivable by maturity period based on the remaining period until maturity date:

Weighted average interest rates per annum:

2008 2007% %

Rupiah 23.04 25.40Foreign currencies 5.19 7.30

The above loans receivable represent loans in rupiah and

foreign currencies with various types of collaterals including

demand deposits, time deposits, standby letters of credit, land,

buildings and corporate guarantees.

Time deposits pledged as collateral for credit cards were Rp

3,211 million and Rp 2,406 million in total as of 31 December

2008 and 2007, respectively (Note 10).

Loans receivable from the Bank's employees consist of car

loans, housing loans and loans for other purposes with various

loan terms and the repayment of which will be effected by

monthly salary deductions.

Gross non-performing loans (classified as substandard, doubtful

and loss) as of 31 December 2008 and 2007 amounted to

equivalent Rp 160,612 million (2.46% of total loans receivable

of the Bank) and Rp 148,149 million (4.81% of total loans

receivable of the Bank) respectively, or equivalent Rp 64,616

million (0.99 % of total loans receivable of the Bank) and Rp

64,208 million (2.09% of total loans receivable of the Bank),

respectively, if calculated after the allowance for uncollectible

accounts (net). During the years ended 31 December 2008 and

2007, the interest income on non-performing loans (excluding

credit card) which are recognized on the cash basis amounted

to equivalent Rp 4,090 million and equivalent Rp 2,396 million,

respectively.

The Bank did not restructure any loans during the years ended

31 December 2008 and 2007.

The Bank's report to Bank Indonesia stated that its Legal Lending

Limit (LLL) as of 31 December 2008 and 2007 was in compliance

with LLL requirements, both for the related and non-related

party borrowers.


66

Syndicated loans, with risk sharing proportional to the Bank's funding amount are as follows:


As participant, the Bank's participation ranges between6.67% - 35% and 20.83% - 33.33% in 2008 and 2007,respectively, outstanding balance at year end 2008:USD 148,238,217; 2007: USD 14,138,889 1,615,852 132,809

The movement of allowance for uncollectible loans receivable during the years ended 31 December 2008 and 2007 was as follows:

8. ACCEPTANCE RECEIVABLES

In millions of rupiah 2008 2007Foreign currencies

Current 445,567 46,695Allowance for uncollectible accounts (2,927) (467)

442,640 46,228

Special mention - 4,605Allowance for uncollectible accounts - (230)

- 4,375

Total acceptance receivable, net 648,494 67,943

In millions of rupiah 2008 2007Non-banks:Rupiah

Current 207,396 17,515Allowance for uncollectible accounts (1,542) (175)

205,854 17,340

ForeignRupiah currencies Total

Balance, beginning of year (135,830) (16,158) (151,988)Addition of allowance for uncollectible accounts (218,653) (9,727) (228,380)Loans written-off 196,718 - 196,718Recoveries of loans previously written-off (12,554) - (12,554)Balance, end of year (170,319) (25,885) (196,204)

ForeignRupiah currencies Total

Balance, beginning of year (112,188) (13,477) (125,665)Addition of allowance for uncollectible accounts (219,708) (2,681) (222,389)Loans written-off 206,020 - 206,020Recoveries of loans previously written-off (9,954) - (9,954)Balance, end of year (135,830) (16,158) (151,988)




67

Acceptance receivables based on the remaining period until maturity date:


Up to 1 month 23,770 26,039More than 1 month up to 3 months 198,655 38,047More than 3 months up to 6 months 430,538 4,729

652,963 68,815

9. BILLS RECEIVABLERepresents bills receivable received by the Bank for export transactions.

Bills receivables which are classified as held-to-maturity based on the remaining period until maturity date:


Up to 1 month 243,096 33,471More than 1 month up to 3 months 150,490 35,261More than 3 months up to 6 months 14,560 14,137

408,146 82,869Allowance for uncollectible accounts (4,081) (829)Total bills receivable, net 404,065 82,040

Weighted average interest rate per annum for bills receivables during 2008 and 2007 were 5.90% and 9.33%, respectively.

As of 31 December 2008 and 2007, all outstanding balances of bills receivable were classified as “current”.

10. DEPOSITS FROM NON-BANK CUSTOMERS AND OTHER BANKSIn millions of rupiah 2008 2007

Non-bank customers:Demand deposits

Rupiah 187,772 149,284Foreign currencies 864,329 609,969

1,052,101 759,253Call deposits

Rupiah 73,093 96Foreign currencies 160,058 151,301

233,151 151,397Time deposits

Due within 1 month since placement date:Rupiah 1,774,358 1,131,407Foreign currencies 1,884,688 445,990

3,659,046 1,577,397Due more than 1 month up to 3 months since placement date:

Rupiah 701,532 239,693Foreign currencies 1,231,318 1,590,690

1,932,850 1,830,383


68


Due more than 3 months up to 6 months since placement date:Rupiah 77,469 10,695Foreign currencies 41,284 20,550

118,753 31,245

Due more than 6 months up to 12 months since placement date:Rupiah 254,204 138,715Foreign currencies 60,074 109,467

314,278 248,182

Due more than 1 year since placement date:Rupiah 142,200 40,149Foreign currencies - 10,614

142,200 50,763

Total deposits from non-bank customers 7,452,379 4,648,620

Other banks:Demand deposits

Rupiah 140 1,165Foreign currencies 34 36

174 1,201

Interbank call moneyDue within 1 month since placement date:

Rupiah 80,000 175,000Foreign currencies 79,317 88,111

159,317 263,111

Total deposits from other banks 159,491 264,312

Foreign ForeignRupiah currencies Total Rupiah currencies Total

Up to 1 month 1,960,256 2,264,127 4,224,383 1,263,574 1,667,124 2,930,698More than 1 month up to 3 months 867,530 908,239 1,775,769 275,254 421,591 696,845More than 3 months up to 6 months 83,402 37,967 121,369 721 19,660 20,381More than 6 months up to 12 months 38,575 7,031 45,606 21,110 68,936 90,046

2,949,763 3,217,364 6,167,127 1,560,659 2,177,311 3,737,970

Time deposits based on the remaining period until maturity date:

2008 2007


69

In millions of rupiah 2008 2007Non-banks:Rupiah 57,988 17,514Foreign currencies 192,526 51,301Total acceptance payables 250,514 68,815

Acceptance payables based on the remaining period until maturity date:

In millions of rupiah 2008 2007Up to 1 month 23,770 26,039More than 1 month up to 3 months 96,631 38,047More than 3 months up to 6 months 130,113 4,729

250,514 68,815

Weighted average interest rate per annum:

In millions of rupiah 2008 2007% %

Demand depositsRupiah 0.99 1.06Foreign currencies 0.95 1.80

Call depositsRupiah 5.01 3.52Foreign currencies 3.23 4.23

Time depositsRupiah 9.39 8.16Foreign currencies 4.01 5.04

Interbank call moneyRupiah 8.95 6.23Foreign currencies 3.43 6.52

As of 31 December 2008 and 2007, total time deposits pledged as collateral to credit cards were Rp 3,211 million and Rp 2,406

million, respectively, while time deposits pledged as collateral to bank guarantee and other facilities were Rp 289,329 million and

Rp 150,082 million, respectively.

11. ACCEPTANCE PAYABLES

12. INCOME TAXESTaxes payable consist of:a.


Income tax article 21 2,400 1,182Income tax articles 23/26 205 148Income tax articles 25/29 58,106 24,648Others 8,326 2,991

69,037 28,969


70

The components of income tax expense (benefit) were as follows:b.


Current tax 127,611 88,454Deferred tax (9,144) (12,488)

118,467 75,966

The reconciliation between income before tax multiplied by the maximum marginal tax rate and income tax expense was as follows:c.


Income before tax 375,518 247,585Enacted maximum marginal tax rate 30% 30%

112,655 74,276Permanent differences at 30% tax rate 2,979 1,708Effect of graduated tax rates (18) (18)Effect of changes in tax rate 2,851 -Income tax expense 118,467 75,966

The items that give rise to significant portions of the deferred tax assets and liability as of 31 December 2008 and 2007 were as follows:d.


Deferred tax assets:Allowance for uncollectible accounts 23,817 17,050Obligation for post-employment benefits 5,060 4,328Bonus 1,637 545Relocation expense 762 -

31,276 21,923Deferred tax liability:

Depreciation of fixed assets (446) (237)Deferred tax assets, net 30,830 21,686

Under the taxation laws of Indonesia, the Bank submits tax

returns on the basis of self-assessment. The tax authorities may

assess or/amend taxes within the statute of limitations, under

prevailing regulations.

In September 2008, Law No. 36 year 2008 which is the fourth

amendment of Law No. 7 year 1983 regarding income tax has

been approved. The law is effective starting 1 January 2009. The

significant change stipulated in the law is a change of corporate

income tax rate to a single rate, which is 28% for the year 2009

and 25% for the year 2010 onwards. Bank has recorded the

impact of this change to the calculation of deferred tax assets

in the financial statements as of and for the year ended 31

December 2008 of Rp 2,851 million.

The Bank's 2004 taxes have been audited by the tax authorities,

resulting in an underpayment of a total of Rp 6,971 million. As

of 31 December 2007, the Bank paid the assessed additional

taxes and filed an objection letter against this tax assessment;

the payment was recorded as other assets. The Bank is now in

the process of tax appeal; the Bank believes that the

underpayment should only be Rp 285 million. The result of the

appeal is not yet known.

e.

f.

g.


71

13. ESTIMATED LOSS FROM OFF-BALANCE SHEET TRANSACTIONSRepresents the estimated loss on letters of credit, bank guarantees issued and other off-balance sheet transactions. The movement

of estimated loss from off-balance sheet transactions during the years ended 31 December 2008 and 2007 was as follows:


Balance, beginning of year 13,899 6,830Addition of estimated loss from off-balance sheet transactions 26,120 7,069

Balance, end of year 40,019 13,899

14. SHARE CAPITALAs of 31 December 2008 and 2007, the Bank's authorized capital amounted to Rp 50 billion (50,000 shares at par value of Rp 1,000,000, in

whole amount, per share), which have been issued and fully paid-up by the following shareholders:

15. INTEREST INCOMEInterest income consisted of interest generated from the following:


Loans receivable 815,125 567,358Placements with other banks 36,915 72,843Bills receivable 53,273 10,604Marketable securities 71,412 61,936Demand deposits with other banks 4,451 5,608Others 22,275 5,402

1,003,451 723,751

16. INTEREST EXPENSESInterest expenses consisted of interest on the followings:


Time deposits 333,441 193,923Placements from other banks 28,413 13,906Demand deposits 8,957 12,432Others 30,126 12,344

400,937 232,605

Number of shares Par value (Rp Million) Ownership Percentage (%)Australia and New Zealand Banking Group Limited 42,500 42,500 85PT Bank Pan Indonesia Tbk 7,500 7,500 15

50,000 50,000 100


72

17. GENERAL AND ADMINISTRATIVE EXPENSESIn millions of rupiah 2008 2007

Marketing 108,577 91,295Management fee 40,437 22,960IT system 29,509 11,391Rental 19,899 13,200Card collection 32,210 26,887Communication and postage 32,145 28,259Depreciation of fixed assets 15,255 12,368Membership 16,433 13,973Electronic data processing 5,220 2,981Subscriptions 4,806 3,478Office supplies 5,091 4,741Cash advance fee of credit cards 3,648 3,315Others 58,113 22,920

371,343 257,768

18. COMMITMENTS AND CONTINGENCIES

In millions of rupiah Currency 2008 2007 2008 2007

Commitments

Committed liabilities:Unused customer loan facilities IDR 78,754 212,798

USD 55,268,170 31,733,154 602,443 298,070Others, equivalent USD 2,079,015 - 22,662 -

703,859 510,868Outstanding irrevocable L/Cfacilities given to customers IDR 56,983 3,977

USD 23,328,045 11,711,026 254,284 110,002Others, equivalent USD 1,303,959 1,274,094 14,214 11,967

325,481 125,946

1,029,340 636,814

ContingenciesContingent receivables:Bank guarantees received IDR 520,738 149,322

USD 198,532,158 22,914,331 2,164,074 215,234Others, equivalent USD 6,996,031 8,268,773 76,259 77,669

2,761,071 442,225

Interest on non-performingloans IDR 55 62

2,761,126 442,287

Contingent liabilities:Bank guarantees given to customers IDR 151 187

Amount in originalcurrency


73

In millions of rupiah Currency 2008 2007 2008 2007

Bid bonds, performance bonds,advance payment bonds, retentionbonds, down payment bonds,progress payment bonds, refundbonds, stand-by letters of creditand security bonds IDR 286,713 124,249

USD 99,174,599 42,124,095 1,081,040 395,672Others, equivalent USD 4,192,653 7,112,143 45,701 66,804

1,413,454 586,725

1,413,605 586,912

19. UNSETTLED SPOT FOREIGN CURRENCY TRANSACTIONSThe outstanding unsettled spot foreign currency purchase and selling contracts as of 31 December 2008 and 2007 were as follows:

Amount in Amount inIn millions of rupiah Currency foreign currencies Rp foreign currencies Rp

Unsettled spot foreign currencypurchase contracts USD 16,555,319 180,459 61,038,342 573,345

AUD 2,400,000 18,130 1,500,0000 12,399EUR - - 8,000,000 110,574NZD - - 4,000,000 29,167

JPY 60,976,328 7,356 - -205,945 725,485

Unsettled spot foreigncurrency selling contracts USD 19,056,250 207,720 36,488,140 342,740

AUD 17,236 130 6,821,223 56,383EUR - - 8,000,000 110,574NZD 3,001,750 18,968 302,051 2,203GBP 60 1 - -SGD 4,655 35 - -JPY 60,952,500 7,354 - -

234,208 511,900

20. NET FOREIGN EXCHANGE POSITIONThe Bank's net foreign exchange position (“NOP”) as of 31 December 2008 and 2007 was calculated based on Bank Indonesia'sprevailing regulation. In accordance with the regulations, banks are required to maintain their overall and balance sheet net foreignexchange position at a maximum of 20% of its capital.Overall net foreign exchange position is defined as the absolute amount of the sum of (i) the net differences between asset andliability balances for each foreign currency and (ii) the net differences between receivables and liabilities in the form of bothcommitments and contingencies in administrative accounts (off-balance sheet accounts) for each foreign currency, which are allstated in rupiah. Balance sheet net foreign exchange position is defined as the sum of the net differences between assets and liabilitieson balance sheet for each foreign currency, which are all stated in rupiah.

2008 2007


Amount inOriginal Currency

74

The net foreign exchange position of the Bank as of 31 December 2008 and 2007 was as follows:

In millions of rupiah 2008Balance sheet net Net differences Overallforeign exchange between net foreign

position (net receivables and exchangedifferences and liabilities position

between assets in off-balance (absoluteand liabilities) sheet account amount)

USD 111,600 47,333 158,933JPY 2,533 3 2,536GBP 190 (1) 189AUD (22,080) 11,202 10,878CHF 176 - 176EUR 508 - 508HKD 363 - 363NZD 18,193 (18,968) 775SGD 522 (35) 487

112,005 174,845

Total capital (Note 21) 1,302,502 1,302,502

Percentage of NOP to capital 8.60% 13.42%

In millions of rupiah 2007Balance sheet net Net differences Overallforeign exchange between net foreign

position (net receivables and exchangedifferences and liabilities position

between assets in off-balance (absoluteand liabilities) sheet account amount)

USD (218,139) 207,716 10,423JPY 241 - 241GBP 536 - 536AUD 28,876 (42,333) 13,457CHF 89 - 89EUR (1,150) - 1,150HKD 260 - 260NZD (26,695) 26,965 270SGD 1,099 - 1,099

(214,883) 27,525

Total capital (Note 21) 1,076,218 1,076,218

Percentage of NOP to capital -19.97% 2.56%


75

21. CAPITAL ADEQUACY RATIOThe capital adequacy ratio was calculated in accordance with Bank Indonesia's prevailing regulations.The computation of the Bank'scapital adequacy ratio with inclusion of market risk as of 31 December 2008 and 2007 was as follows:


Composition of capital:A. Core capitalPaid-up capital 50,000Disclosed reserves: Previous years retained earnings 1,031,736 Current year retained earnings (50%) 123,953

1,205,689

Carried forward 1,205,689

B. Supplementary capitalGeneral reserve for allowance for productive assets 96,813Total capital 1,302,502

Risk weighted assets 8,017,829

Capital adequacy ratio 16.25%

The Bank's capital adequacy ratio as of 31 December 2008 and 2007 without the inclusion of market risk was 16.82% and 18.17%,respectively.In accordance with the above mentioned prevailing Bank Indonesia regulations, the capital adequacy ratio should be calculatedwithout including the tax effect of deferred income tax.

22. RELATED PARTY TRANSACTIONS

In millions of rupiah 2008 2007Demand deposits with other banks 97,251 64,115Placements with other banks 528,781 512,231Derivative receivables 6,221 1,629Bills receivables 16,716 23,083Interest receivables 58 2,358Other asset 139 81Deposits from other banks 50,096 1,089Derivative payables 34,965 3,214Acceptance payables 83,587 42,698Interest payables 128 -Other payables 31,540 4,729Interest income 18,576 33,628Interest expense 1,886 224General and administrative expenses 70,971 35,233


The Bank has financial transactions with related parties which were made under the normal terms and conditions as those withthird parties. The details of significant balances and transaction (including commitmentand contingencies and unsettled spotforeign currency transactions) with related parties at year end 2008 and 2007 were as follows:

76

In millions of rupiah 2008 2007COMMITMENT AND CONTINGENCIES

Bank guarantees received 2,714,664 344,781Bank guarantees given to customers 202,398 237,184

UNSETTLED FOREIGN EXCHANGE TRANSACTIONUnsettled spot foreign currency purchase contracts 22,781 213,912Unsettled spot foreign currency selling contracts 22,729 214,959

23. MATURITY OF ASSETS AND LIABILITIESThe maturity of assets and liabilities as of 31 December 2008 was summarized as follows:

Less than > 3 to Non-interest1 month 1 to 3 months 12 months > 1 to 5 years > 5 years bearing Total

Assets:Cash on hand - - - - - 15,018 15,018Demand deposits with Bank Indonesia 55,288 - - - - 161,294 216,582Demand deposits with other banks, net 30,689 - - - - 2,007 32,696Placement with other bank, net 89,100 - - - - - 89,100Marketable securities, net 291,583 - - - - - 291,583Derivative receivables, net - - - - - - -Loans receivable, net 2,796,241 612,551 69,071 15,836 23,451 - 3,517,150Acceptance receivables, net - 103,644 102,210 - - - 205,854Bills receivable, net 114,914 143,925 - - - - 258,839Interest receivable - - - - - 58,042 58,042Fixed assets, net - - - - - 57,355 57,355Deferred tax assets, net - - - - - 30,830 30,830Other assets - - - - - 86,579 86,579

3,377,815 860,120 171,281 15,836 23,451 411,125 4,859,628Liabilities:Deposits from non-bank customers 2,105,333 867,530 121,977 - - 115,788 3,210,628Deposits from other banks 80,000 - - - - 140 80,140Derivative payables - - - - - - -Acceptance payables - 2,560 55,428 - - - 57,988Taxes payable - - - - - 69,037 69,037Interest payable - - - - - 36,698 36,698Other payables - - - - - 134,193 134,193Obligation for post-employment benefits - - - - - 20,233 20,233Estimated loss from off-balance sheet transactions - - - - - 2,243 2,243

2,185,333 870,090 177,405 - - 378,332 3,611,160

Net position 1,192,482 (9,970) 6,124 15,836 23,451 32,793 1,248,468

In millions of rupiah

IDR


77


Assets:Cash on hand - - - - - 1,829 1,829Demand deposits with Bank Indonesia 51,613 - - - - - 51,613Demand deposits with other banks, net 481,941 - - - - - 481,941Placements with other banks, net - - - - - - -Derivative receivables 85,364 127,791 175,648 272,489 - - 661,292Loans receivable, net 1,558,802 1,171,591 81,884 - - - 2,812,277Acceptance receivables, net 23,532 93,130 325,978 - - - 442,640Bills receivable, net 125,752 5,060 14,414 - - - 145,226Interest receivable - - - - - 22,232 22,232Other assets - - - - - 13,503 13,503

2,327,004 1,397,572 597,924 272,489 - 37,564 4,632,553

Liabilities:Deposits from non-bank customers 2,102,831 870,976 41,234 - - 726,893 3,741,934Deposits from other banks - - - - - - -Derivative payables 81,480 53,993 118,370 273,285 - - 527,128Acceptances payables 23,770 94,071 74,685 - - - 192,526Interest payable - - - - - 6,187 6,187Other payables - - - - - 15,743 15,743Estimated loss from off-balance sheet transactions - - - - - 37,435 37,435

2,208,081 1,019,040 234,289 273,285 - 786,258 4,520,953

Net position 118,923 378,532 363,635 (796) - (748,694) 111,600

In millions of rupiahUSD


Assets:Cash on hand - - - - - 4,762 4,762Demand deposits with other banks, net 24,789 - - - - 67,443 92,232Placements with other banks, net 523,493 - - - - - 523,493Derivative receivables 4,818 2,246 65,231 - - - 72,295Bills receivable, net - - - - - - -Interest receivable - - - - - 58 58Other asset - - - - - 954 954

553,100 2,246 65,231 - - 73,217 693,794

Liabilities:Deposits from non-bank customers 454,485 37,263 3,764 - - 4,305 499,817Deposits from other banks 79,317 - - - - 34 79,351Derivative payable 4,438 1,543 63,345 - - - 69,326Interest payable - - - - - 1,695 1,695Other payables - - - - - 42,859 42,859Estimated loss from off balances sheet transactions - - - - - 341 341

538,240 38,806 67,109 - - 49,234 693,389

Net position 14,860 (36,560) (1,878) - - 23,983 405

Total, all currencies 1,326,265 332,002 355,633 15,040 23,451 (691,918) 1,360,473

Other Foreign Currencies


78


24. RISK MANAGEMENTThe Bank has ultimate responsibility in managing the various risks faced by the Bank based on prudent principles and continuously

monitoring the effectiveness and relevance of its framework for managing risk. The Bank has also established certain policies in managing

and monitoring risks to ensure key decisions within the Bank will be informed by balance risk and reward as shown below:

CREDIT RISK

The Bank takes credit risk within a well-defined framework that lays out the fundamental principles and guidelines for management

of credit risk. The core objective is to make risk management a core competency of the organization and ensure that the risks are

accurately identified, assessed and managed. There is a series of Corporate Credit Manuals and Tools that are in place to assist with

risk management.

MARKET AND LIQUIDITY RISK

The Bank defines, quantifies, measures and limits treasury risk into market risk, interest rate risk non-trading, and liquidity risk.

OPERATIONAL RISK

In line with Basel 2 that features the inclusion of operational risk in the first pillar, the Bank also views operational risk as a primary

risk within the Bank and has a governance structure responsible for maintaining oversight. The Bank will create a culture that

recognizes operational risk as everyone's roles and responsibility with responsibilities clearly articulated at all levels in the

organization.

The Bank uses operational risk capital scorecard report as a mean to measure operational risk level. There are 12 (twelve) types

of scorecards quantified, i.e. actions by government and regulators, regulatory and statutory compliance, premises and environment,

failure of financial infrastructure, information technology, supplier/ outsourcing risks, fraud theft and crime, legal disputes, modeling

failures, personnel, process and policy and project risks. The quantification based on this scorecard is performed semiannually and

the result will be used to determine the amount of capital required to accommodate operational risk.

MARKET RISKThe Bank has Group-wide Market Risk Trading Policy that is applied to the Bank's trading activities in Indonesia. Limits on tradingactivities are established by the Bank and approved annually by the Head Office. Actual day-to-day management of market riskis performed by the Bank, with daily oversight by Group Treasury in Australia. All trading positions are marked-to-market dailyas part of the revaluation process. There is clear and distinct segregation between front and back office, with different reportinglines, ensures the validity and transparency of this process is in line with current world best practice.Open position and stop loss limits are documented for both spot and forward foreign exchange trading activities. In line withcurrent world best practice, the Bank uses the Value at Risk (VaR) modeling technique to measure trading risk on a daily basis.INTEREST RATE RISK NON-TRADINGThe ANZ group has a formal policy that is applied globally to measure and manage interest rate risk that arises from non-tradingactivities. The policy addresses the volatility of future income mismatches arising from changes in market interest rates. Whileseveral factors combine to generate this volatility, the policy is primarily concerned with the level of mismatching between therescheduling dates of loans and deposits. The policy guidelines apply to each geographic entity and are reported on a regionaland global basis.LIQUIDITY RISKThe primary goal of liquidity management at the Bank is to ensure that it can meet its financial commitments to its customersas they fall due. This is assessed by using two models of future cash flows, which are Normal Business Conditions (NBC) andShort Term Crisis (STC).

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Documents

Financial Statements - anz.com · Balance Sheets BALANCE SHEETS 31 DECEMBER 2008 AND 2007 (In millions of rupiah, unless otherwise specified) PT ANZ PANIN BANK ASSETS Notes 2008 2007