26 April 2017
Enterprise, SME, and Mortgage Loans Portfolio grew 9%, 13%, and 25%, respectively
Jakarta, 26 April 2017. PT Bank Danamon Indonesia, Tbk. (“Danamon”) today announced its first quarter 2017 financial results.
Danamon recorded a net profit after taxes (NPAT) of IDR 1.0 trillion in the first quarter of 2017, which is a 29% growth as compared to a year earlier. The bottom line improvement was contributed by multiple factors. Net interest income grew 5% to IDR 3.5 trillion due to improvement in cost of funding. Cost-to-income ratio also improved to 47.5% from 48.3% a year ago as operating expenses continue to be well managed. At the same time, asset quality improvement yielded a 26% reduction in cost of credit to IDR 831 billion.
The Bank’s focus on improving productivity and service quality through various transformation initiatives continue to produce positive results. In addition to recording good financial performance, the Bank received numerous accolades throughout the first quarter, including being top ranked in a banking customer satisfaction survey conducted by Infobank magazine and the Institute of Service Management Studies.
Growth in SME, Enterprise, and Consumer Mortgage loans
Danamon recorded growth in the Enterprise, Small Medium Enterprises (SME), and Mortgage segments. Enterprise Banking portfolio, consisting of Corporate, Commercial banking, and Financial Institutions, grew 9% to IDR 36 trillion. SME Banking portfolio increased 13% to IDR 26.1 trillion. While, Mortgage loans grew 25% to IDR 4.7 trillion.
Excluding Micro, overall loan portfolio and Trade Finance grew 4% to IDR 117.0 trillion at the end of the first quarter of 2017 as compared to a year earlier. Adira Finance booked a 3% year-on-year decrease in loans to IDR 43.8 trillion. Despite the overall loan decline, Adira Finance’s new financing for cars grew 5% year-on-year, in line with the industry trend*. Micro Banking loans, through Danamon Simpan Pinjam (DSP), declined 29% to IDR 9.4 trillion due to competition and weaker demand.
Improved CASA ratio
In line with management’s Loan to Funding Ratio (LFR) target of 92-94%, the Bank reduced its need for funding. Third party funds declined by 9.3% year on year to IDR 100.7 trillion, as Danamon let go of its higher-priced Time Deposits. However, Current and Savings Accounts (CASA) ratio favorably increased to 45% from 41% a year ago.
Healthy loan-to-funding ratio and capital
Danamon’s regulatory loan-to-total funding ratio (LFR) stood at 92.8% compared to 90.2% a year ago. Danamon’s LFR remained below Bank Indonesia’s threshold. Despite tighter liquidity in the overall banking system, Danamon managed to maintain its LFR at the targeted level.
Danamon’s consolidated capital adequacy ratio (CAR) stood at 21.8%, while bank-only CAR was at 23.2%.
Fee income (non-credit related) grew 21% year-on-year
Danamon generated IDR 295 billion in fee income (excluding credit related fees), a 21% growth compared to the same period in 2016. The growth was supported by Adira Insurance’s net underwriting profit, which grew by 29% to IDR 142 billion, cash management, which grew by 2% to IDR 77 billion, and bancassurance, which grew by 32% to IDR 77 billion.
Improvement in asset quality
Danamon improved its asset quality through prudent enforcement of risk assessment procedures, disciplined collection and recovery of debts. Total non-performing loans (NPL) decreased by 6% to IDR 3.8 trillion, whereas the industry’s NPL increased 20% compared to a year ago. Cost of credit ratio also improved to 2.7% from 3.6% a year ago. At the same time, restructured loans declined 10% to IDR 3.3 trillion. Gross non-performing loans ratio stood at 3.2%, which remained below the regulatory limit of 5%.
*source: GAIKINDO and AISI
PT Bank Danamon Indonesia, Tbk., founded in 1956, is committed to be a customer-centric organization that offers high quality products and services as well as supported by the latest technologies. This commitment is in line with its vision, “We care and enable millions to prosper”.
As of 31 March 2017, Danamon manages IDR 171 trillion in assets along with its subsidiaries, which are PT Adira Dinamika Multi Finance Tbk. (Adira Finance) and PT Asuransi Adira Dinamika (Adira Insurance). In terms of shareholding, 67.37% of Danamon shares are held by Asia Financial (Indonesia) Pte. Ltd., 6.58% by JPMCB-Franklin Templeton Investment Funds, and 26.05% by the public.
Danamon is supported by a network of more than 1,700 including conventional branches, syariah units, subsidiary outlets and more than 60,000 ATMs through partnership with ATM Bersama, PRIMA, and ALTO across 34 provinces.
As the exclusive issuer of Manchester United DEBIT/ATM and Credit Cards in Indonesia and issuer of American Express credit cards, Danamon offers more values to its customers. With a wide range of financial products such as Danamon Lebih, FlexiMax, Tabungan Bisa iB, Dana Pinter 50, KAB Bisa, and Primajaga insurance, Danamon enables customers from various segments to meet their financial needs.
In addition to physical network, Danamon’s services can be accessed from Danamon Online Banking, D-Mobile and D-Card mobile application, and SMS Banking.
Danamon received “The Best in the Financial Sector” and “Top 50 Publicly Listed Companies” awards during The 8th Indonesia Institute for Corporate Directorship (IICD) Award 2016. Internationally, Danamon was awarded ‘Indonesia's 1st Best Local Cash Management Bank in the Small Size of Annual Sales Turnover’ from Asiamoney during the Asiamoney Summer Awards Dinner. In addition, Danamon received two awards from Retail Banker International’s Asia Trailblazer Awards 2017 in the Best Digital Marketing Campaign and Best Marketing Campaign Overall categories for the bank’s innovations in service and operations.
For more information and to be connected with Danamon, please visit www.danamon.co.id or Danamon’s official social media channels: Facebook (Bank Danamon), Twitter (@danamon), Instagram (@myDanamon), LinkedIn (Bank Danamon Indonesia).