25 July 2017
SME, Enterprise and Mortgage Loans Portfolio grew 9%, 6%, and 25%, respectively
Jakarta, 25 July 2017 - PT Bank Danamon Indonesia Tbk (“Danamon”) today announced its first half 2017 financial results.
Danamon recorded a net profit after taxes (NPAT) of IDR 2.0 trillion in the first half of 2017, which is an 18% growth as compared to a year earlier. Operating profit grew by 22% to IDR 2.9 trillion on the back of lower credit cost and Danamon’s ability to manage its operational efficiency. Improvement in asset quality is evident from the 4% year-on-year decline in non-performing loans.
“We continue to enhance Danamon’s products and service offering to better serve our customers. In the first half of the year, Danamon expanded its digital channels through the launch of D-connect, which provides an integrated online and mobile banking solution for businesses. In terms of service, Danamon was recently awarded third best overall in service quality by Marketing Research Indonesia (MRI). We launched the D-Point rewards program to award Danamon’s customers with points from our banking activities,” said Vera Eve Lim, Chief Financial Officer and Director, Danamon.
Growth in SME, Enterprise, and Consumer Mortgage loans
Danamon loan portfolios continue to shift towards non-mass market segment. Danamon recorded growth in the Small Medium Enterprises (SME), Enterprise and Mortgage segments. SME Banking portfolio increased 9% to IDR 26.7 trillion. Enterprise Banking portfolio, consisting of Corporate, Commercial banking, and Financial Institutions, grew 6% to IDR 37.1 trillion. Mortgage loans grew 25% to IDR 4.9 trillion.
Excluding Micro financing, overall loan portfolio and Trade Finance grew 4% to IDR 119.8 trillion as compared to the same period last year. Despite weaknesses in auto industry, Adira Finance’s new financing amount grew by 5% year-on-year driven from both the two wheelers and four wheelers segment. Adira Finance’s loans stood at IDR 44.6 trillion at the end of the first half of 2017. Micro Banking loans, through Danamon Simpan Pinjam (DSP), declined 32% to IDR 8.5 trillion due to competition and weaker demand.
Healthy Liquidity and Capital
With Loan to Funding Ratio (LFR) of 89.6%, liquidity is well managed. At the same time, Current and Savings Accounts (CASA) increased by 4% to IDR 46.7 trillion, and CASA ratio improved to 44.3% from 42.1% a year ago. Time Deposit decreased by 4% to IDR 58.8 trillion as Danamon let go of higher priced third-party funds.
Danamon’s capital adequacy ratio (CAR) remained one of the best among peer banks. Consolidated and bank-only CAR stood at 21.5% and 23.2%, respectively.
Fee income (non-credit related) grew 6% year-on-year
Non-credit related fee income grew 6% to IDR 566 billion. The improvement was mainly due to Adira Insurance’s net underwriting profit, which grew by 9% to IDR 252 billion. Bancassurance fee also grew by 12% to IDR 160 billion.
Improvement in asset quality
Danamon continued to improve its asset quality through prudent enforcement of risk assessment procedures, disciplined collection and recovery of debts. Total non-performing loans (NPL) decreased by 4% to IDR 3.8 trillion, whereas the industry’s NPL increased 6% compared to a year ago. Cost of credit also decreased by 23% to IDR 1.7 trillion. Gross non-performing loans ratio stood at 3.2%, which remained below the regulatory limit of 5%.
PT Bank Danamon Indonesia Tbk was founded in 1956, and as of 30 June 2017 manages IDR 176 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., 6.57% by JPMCB-Franklin Templeton Investment Funds, and 26.06% by the public.
The Bank is supported by a network of more than 1,700 including conventional branches, syariah units, subsidiary outlets, Danamon’s ATMs, ATM Bersama, PRIMA, and ALTO across 34 provinces. 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 is the exclusive issuer of Manchester United DEBIT/ATM and Credit Cards in Indonesia, and issuer of American Express credit cards. 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.
Recently, the Bank received 3rd Best Overall Performance during Banking Service Excellence Awards 2017 held by Marketing Research Indonesia (MRI) dan Infobank. Internationally, Danamon and Investree received the Best Cash Management Solution Awards in the New Economic Solutions category during the Asset Triple A – Treasury, Trade, Supply Chain and Risk Management Award 2017.