Danamon Announces First Quarter 2014 Results: Loans grew 16% to IDR 136 trillion; Loan to Deposit Ratio improved to 94.1%, while Total Funding up by 22%

16 April 2014

Herry Hykmanto, Director of Sharia, Henry Ho, President Director, Vera Eve Lim, Chief Financial Officer and Director, Willy S. Dharma, President Director of Adira Finance and Indra Baruna, President Director of Adira Insurance at the results announcement of PT Bank Danamon Indonesia for the first quarter of 2014, in Jakarta on 16 April 2014.

PT Bank Danamon Indonesia, Tbk. (“Danamon”) today announces its first quarter 2014 financial results, showing an improved regulatory Loan to Deposit Ratio (LDR) to 94.1%, where total loans grew by 16% to IDR 136 trillion and total funding increased by 22% to IDR 139 trillion compared to the first quarter of last year. Danamon’s consolidated net profit after tax (NPAT) in the first quarter of 2014 reached IDR 875 billion.

“Our loan growth reflected a stable economy in the first quarter of the year. Inflationary pressure has eased slightly; while other economic variables were right on track, in line with economic recovery in the developed countries,” said Henry Ho, President Director, Danamon.

Danamon’s loan growth was driven by growth in mass market lending, which constituted 52% of Danamon’s total loans portfolio. Mass market loans include loans to micro enterprises through Danamon Simpan Pinjam (DSP), auto loans through Adira Finance, and durable goods loans through Adira Kredit. As of the end of March 2014, Danamon’s mass market loans booked a 6% year-on-year growth, amounting to IDR 70.4 trillion. Meanwhile, non-mass market loans, which are composed of small and medium enterprises, commercial, and wholesale loans, among others, recorded a 27% year-on-year growth in the first quarter of 2014 to IDR 65.5 trillion.

In terms of loan growth by segment, loans to small and medium enterprises (SME) grew by 15% to IDR 21.3 trillion, while loans to micro enterprises through DSP grew by 4% compared to the first quarter of last year to IDR 20 trillion. Altogether, Danamon’s loans to the micro, small, and medium enterprises (MSME) grew by 9% to IDR 41.4 trillion, accounting for 30% of Danamon’s total loans. Moreover, loans to the commercial segment increased by 29% compared to the first quarter of last year to IDR 16.3 trillion, while wholesale loans grew by 46% to IDR 18.6 trillion. In the first quarter of 2014, automotive loans through Adira Finance were at IDR 48.5 trillion, an 8% growth compared to the first quarter of 2013.

“Danamon’s loan growth was accompanied by an improved quality of assets, with non-performing loans ratio reaching 1.9% at the end of March 2014, improving significantly from 2.5% in the same period last year,” said Vera Eve Lim, Chief Financial Officer and Director of Danamon.

In terms of customer deposits, Danamon posted a solid growth in its current account and savings account (CASA), which grew by 12% compared to the first quarter of 2013 to IDR 47 trillion. Specifically, current account increased 16% to IDR 18.4 trillion, and savings account increased 9% to IDR 28.3 trillion. This growth meant that CASA constituted 42% of Danamon’s customer deposits, which amounted to a total of IDR 111.9 trillion. Time deposit, which is another component of customer deposits besides CASA, increased by 38% to IDR 65 trillion. All in all, Danamon’s total funding, which includes customer deposits and long term funding, grew by 22% compared to the first quarter of last year to IDR 139 trillion.

As of the end of March 2014, regulatory Loan-to-Deposit ratio (LDR) reached 94.1%, improving significantly from 103.5% in the first quarter of 2013, while Danamon’s consolidated Loan-to-Total Funding ratio stood at 86.7% at the end of March 2014 compared to 89.4% in the same period a year ago. Danamon’s consolidated capital adequacy ratio (CAR) stood at 18.8%, while standalone CAR is at 18.4% at the end of March 2014.

Danamon plans maintain 30% dividend payout ratio subject to the approval of the Annual General Meeting of Shareholders, which will be held on May 7, 2014.