Danamon Announces Year-on-Year NPAT Growth of 18% in its First Quarter 2016 Financial Results
26 April 2016
Jakarta, 26 April 2016. PT Bank Danamon Indonesia, Tbk. (“Danamon”) today announced its first quarter 2016 financial results.
“In the first quarter 2016, our net profit after tax grew by 18% as compared to a year earlier to IDR 814 billion as a result of our numerous initiatives taken last year,” said Vera Eve Lim, Chief Financial Officer and Director of Danamon.
Vera added that Danamon is also emphasizing new engines of growth in the commercial, small and medium enterprises (SME), and consumer banking segments, as well as transaction banking. These new engines will complement Danamon’s existing foothold in the mass market segment. “We have launched our new sales and distribution network, which will provide better service to our customers. Our businesses in various segments will also be supported by improved utilization of technology and human capital,” she said.
In the first quarter of 2016, Danamon introduced an innovative feature to its transaction banking service, i.e the trade finance facility in Chinese Yuan to support local businesses that have trade relations with China which is one of Indonesia’s most important trading partners.
Higher profit for Q1 2016 highlights improved efficiency
Danamon recorded a net profit after tax (NPAT) of IDR 814 billion in the first quarter of 2016. This is an 18% year-on-year growth compared to the first quarter of 2015. Pre-Provision Operating Profit (PPOP) grew by 12% to IDR 2.2 trillion in the first quarter of 2016 as compared to the first quarter of the previous year. Cost to Income ratio for the first quarter of 2016 was 48.7% as compared to 53.9% in the first quarter of 2015, due to continuous efficiency improvements. Operating costs decreased by 9% to IDR 2.1 trillion in the first quarter of 2016 as compared to the first quarter of 2015.
Growth in SME, Corporate and Syariah loans
In the first quarter of 2016, loans to the SME segment grew by 4% to IDR 23.0 trillion from IDR 22.2 trillion a year earlier. Loans to the corporate banking segment grew by 6% to IDR 17.4 trillion, while loans to commercial banking segment decreased by 3% to IDR 15.4 trillion. Meanwhile, Sharia loans, which was included in loans to the SME and commercial segments, grew by 17% to IDR 2.9 trillion.
Micro segment loans, through Danamon Simpan Pinjam (DSP), was recorded at IDR 13.3 trillion, a 27% year-on-year decline compared to IDR 18.2 trillion recorded in the first quarter of 2015.
Consequently, Danamon’s total loans declined by 7% to IDR 125.8 trillion in the first quarter of 2016 from IDR 135.7 trillion a year earlier.
Adira Finance’s performance
National sales for two wheeled and four wheeled vehicles in the first quarter of 2016 declined by 6% and 5%, respectively* for the same period last year. As a result, Adira Finance’s loans decreased by 8% in the first quarter of 2016 compared to a year earlier. Loans for two wheeled vehicles were at IDR 21.5 trillion, while loans to four-wheeled vehicles were at IDR 22.7 trillion. Overall, Adira Finance ended the first quarter of the year with loans to the automotive sector and white goods financing at IDR 45.1 trillion.
*Sources: Indonesian Motorcycles Industry Association (AISI) and Indonesia Automotive Industry Association (Gaikindo).
CASA and time deposits
In the first quarter of 2016, Danamon’s Current and Savings Accounts (CASA) balances decreased by 15% to IDR 45.9 trillion from IDR 53.9 trillion in the first quarter of the previous year due to the release of high cost CASA accounts. Time deposits increased by 4% to IDR 65.1 trillion. The quality of CASA funding has improved in line with Danamon’s strategy to focus on granular third party funds.
Asset quality remained below regulatory limit
“Gross non-performing loans stood at 3.3%, which remained below the regulatory limit of 5%,” added Vera. She said that the Bank constantly aims to improve its asset quality through prudent enforcement of risk assessment procedures, disciplined collection and recovery of debts.
Healthy loan-to-funding ratio and capital
Danamon’s loan-to-total funding ratio (LFR) stood at 90.2%. Danamon’s LFR remained below Bank Indonesia’s threshold, which is set at 94%.
Danamon’s consolidated capital adequacy ratio (CAR) stood at 20.8%, while standalone CAR was at 22.1%.
Recent awards received by Danamon include the Market Conduct Award from the Financial Services Authority (OJK). The award was handed to financial institutions that implement customer protection regulation and reported the implementation result to OJK within the specified time.
In February 2016, Yayasan Danamon Peduli, which is an independent organization that manage Danamon’s corporate social responsibility programs, kicked off its ‘Jelajah Pasar Nusantara’ program by holding an event called ‘Festival Pasar Rakyat’ in the Ibuh traditional markets in West Sumatera. This program is intended to promote traditional markets as clean, safe, and fun places for shopping and family activities.
In March 2016, Danamon Simpan Pinjam held the fourth period of its ‘Heboh 1 Miliar’ sweepstakes, which rewards micro entrepreneurs with up to IDR 1 billion in cash prizes, providing them with capital to expand their businesses.
PT Bank Danamon Indonesia, Tbk. (‘Danamon’) was established in 1956 and as of March 31, 2016 operates a network of 1,929 including among others conventional branches, Danamon Simpan Pinjam (DSP) and Syariah units as well as its subsidiaries branches. As of March 31, 2016, Danamon provides its customers with more than 60,000 ATMs, including through its association with ATM Bersama and ALTO, in all 34 provinces in Indonesia. Danamon manages around IDR 179 trillion in assets as of 31 March 2016.
Danamon is also the sole license holder of Manchester United cards in Indonesia, and the issuer of Manchester United ATM/Debit cards and credit cards.
PT Adira Dinamika Multi Finance, Tbk. (Adira Finance), the automotive financing subsidiary of Danamon, operates an extensive branch network in more than 260 cities in Indonesia. Danamon is also the majority owner of PT Asuransi Adira Dinamika (Adira Insurance), a general insurance company and PT Adira Quantum Multifinance (Adira Kredit), a durable goods financing company.
As of March 31, 2016, Danamon was 67.37% owned by Asia Financial (Indonesia) Pte. Ltd., 6.72% by JPMCB-Franklin Templeton Investment Funds and 25.91% by the Public.
For further information, please visit Danamon’s corporate website at: www.danamon.co.id.