In some period, BNI became the largest bank in Indonesia. However, with the rapid development and extroverted economic situation in Indonesia, BNI was finally surpassed by other banks and forced it into entering a heavy competition. The competition primarily came from banks and foreign bank merger activities, in terms of the market share of Third-Party Funds (TPF).

Of course, BNI was not to be defeated by its competitors. In fact, there was always a desire to seize back the crown as the largest bank in Indonesia. Therefore, BNI had its Division of Funding and Consumer Services enhanced its performance by improving the distribution channels such as BNI electronic distribution through ATM, Phone Banking, Mobile Banking, and Internet Banking.

Recapital acquired PT Thames PAM Jaya (TPJ), in year 2007, when the performance of the company experienced a downturn for three consecutive years (2005-2007). Besides, for about 9 years operating in Indonesia, PTJ never reached the target set by Government. However, after Recapital acquired 95% shares, the company experienced a turnaround, where the company’s condition gradually improved and experienced significant growth in over the next 3 years (2008-2010). Recapital made changes to the management of the company ranging from changing the name of the company, until the renewal in human resources, culture, and organizations in it.

Recapital already had a good reputation and well-known expert in revamping companies that were in bad financial conditions. From 2002 to 2008, there were at least 6 companies being acquired and successfully improved by Recapital. This was a strong indicator that explained PT Aetra’s significant growth after the acquisition.

This case study describes the success story of Recapital’s turnaround strategy in PT Aetra, what kind of turnaround strategy they used, how the turnaround strategy could be accepted, and what made this strategy successful.

In 1998 Lippo Bank introduced internet banking; that same year Bank Internasional Indonesia launched internet for its customers. Bank Central Asia (BCA) soft launched KlikBCA (Internet Banking BCA) in August 17, 2000 and officially launched it in March 2001.

When introducing internet banking for Consumer Banking in Indonesia, Stephen Liestyo, BCA Senior General Manager knew that he had to choose the right strategy as other local banks that allocated extensive programs to educate customers about using internet banking did not attain substantial immediate results. Several options and solutions were discussed extensively among the steering committee team before launching KlikBCA. One of the options chosen was to use the same ATM screen in the KlikBCA. Replicating the ATM screen and features into KlikBCA was a critical first step. The team also decided to add more features, such as a message feature in KlikBCA in the next step of KlikBCA’s development. Individual customers increased from 29,000 customers during the first launch to 217,653 customers at the end of 2001. Stephen Liestyo asked his team to formulate the strategy that could prepare KlikBCA to go world wide in order to strengthen BCA position as the best transaction bank.

On one bright afternoon on May 31, 2007 at 3:00 pm, a member of Case Writing Team received an SMS sent by Stephen Liestyo, Senior General Manager of Consumer Banking BCA. The content of the SMS was “Sorry, from June 6 – 13, 2007, I will be in Shanghai to receive an award from The Asian Banker”. BCA was named as “The Best Retail Bank in Indonesia in 2006 at Asian Banker Excellence in Retail Financial Awards. Asian Banker assessed over 140 financial institutions in 22 countries throughout Asia Pacific. This SMS reply confirmed the need for further discussion on internet banking.

On one side, Case Writer Team at Binus Case Center should wait for his presence and reschedule the meeting after Liestyo’s return from Shanghai. On the other side, this news encouraged team to develop further Klik BCA case. Stephen Liestyo confirmed that Asian Banker Award named BCA as “The Best Retail Bank” for four consecutive years started in 2003.

According to Eric Berliner in Asian Banker assessment, one of BCA’s strengths was its well developed automatic transaction network. ”BCA utilized a solid infrastructure to support bank operation in order to maintain its position as the transaction bank of choice in Indonesia”.. This solid infrastructure helped BCA generate more profits in 2006 than its competitors. With the best infrastructure, BCA became the most efficient, reliable, innovative and profitable bank in Indonesia.