Business Case Studies, Leadership Case Study, Tata Group,Ratan Tata

Code : SEP0002

Year : 2004

Industry : Banking, Insurance and Financial Services

Region : Indonesia

Teaching Note:Not Available

Structured Assignment : Not Available

Abstract: Bank Rakyat Indonesia(BRI) was considered one of the best micro finance institutions in the world. It became a model bank in Asia after its transformation from an ailing government-owned commercial bank into a viable self-sufficient financial intermediary. Its success revealed to the world how microcredit could help in a bank's long-term stability even in times of crises.

Even at the height of the Asian crisis, in 1998, BRI’s micro lending unit recorded a pretax profit of $89 million, while its corporate and retail banking units posted losses of $3.4 billion. As of September 2003, it was the country’s largest micro bank. Its total outstanding loans amounted to Rupiah 45.6 trillion of which 86.25% were channelled to small and medium-sized enterprises. During this period, the bank recorded an ROE of 45.23%, almost twice the average return booked by any other bank in Indonesia.