NPAT Up 36%; Fee based Income Grew 23%
PT Bank Danamon Indonesia Tbk (“Danamon”) today announces a consolidated net profit after tax (NPAT) of Rp 2 trillion in the first semester of 2012, a 36% increase compared to Rp 1.473 trillion in the first semester of 2011.
“On the back of a relatively stable domestic economy, we were able to generate strong growth in all of our business segments in the first semester of the year. This clearly underscores Indonesia’s economic resilience in the first half of the year, despite intensifying pressure from the global economy,” said Henry Ho, Danamon’s President Director. At the end of June 2012, Danamon’s loans reached Rp 110 trillion, or 19% higher compared to Rp 93 trillion a year ago.
This positive loan growth is driven by growth in mass market lending, consisting of loans for self-employed mass market, auto loans, durable goods loans, and gold-backed shariah based financing, which booked a 20% year-on-year growth to Rp 64 trillion as of June 30, 2012, and contributed to around 58% of the Bank’s total loan portfolio.
“Our self employed mass market unit, Danamon Simpan Pinjam (DSP), actively searches potential markets and have recently gained promising results in its recent entry in the agribusiness segment,” said Vera Eve Lim, Danamon’s Chief Financial Officer and Director.
Similarly, loans in the small and medium enterprises and commercial (SMEC) segments recorded a 20% year-on-year growth to Rp 28 trillion, accounting for 25% of Danamon’s total portfolio, while Danamon’s heavy equipment financing through Assets Based Financing (ABF) business posted a 64% growth to Rp 5.6 trillion at the end of the first half of 2012. Meanwhile, loans from the corporate banking segment booked a 13% growth to Rp 13 trillion, and Danamon’s trade finance increased by 55% to Rp 6.5 trillion.
“Our loan growth in the first six months of 2012 was accompanied by a sustained quality of our assets. Danamon’s non-performing loans ratio improved to 2.5% from 2.9% at the end of first half 2011,” said Vera.
In the automotive financing segment, Danamon’s auto loans through Adira Finance grew 26% to Rp 44 trillion or 40% of the Danamon’s total loans. The growth was maintained through Adira Finance’s strong relationship with dealers and customers as well as its implementation of prudent risk management.
“Meanwhile, on the funding side, Danamon’s total funding grew 14% to reach Rp 111 trilllion,” stated Vera. Current Accounts grew 35% while Savings Accounts grew by 13% year-on-year, reaching Rp 14 trillion and Rp 24 trillion, respectively.
In total, CASA increased by 20% to Rp 37 trillion, while Time Deposits increased by 7% to Rp 56 trilllion. As such, as of June 30, 2012, Loan to Total Funding Ratio reached to 84.4% compared to 91.3% last year, while Loan to Deposits (LDR) ratio stood at 97.1% from 99.0% last year.
Besides maintaining strong loan growth, Danamon’s fee income also registered a promising year-on-year growth of 23% to Rp 2.2 trillion, as of the end of June 2012, on the back of higher credit related fees and fees from bancassurance products. “Our credit related fees grew 21% higher to Rp 1.6 trillion, in line with our loan growth. In total, our fee income contributes to 26% of our total operating income,” said Vera.
Overall, with a robust NPAT growth, Danamon’s Return of Average Asset stood at 2.8%, while Return on Average Equity stood at 16.4%. Moreover, as of June 30, 2012, Danamon’s consolidated Capital Adequacy Ratio (CAR) increased to 18.8% compared to 14.0% a year ago, while standalone CAR increased to 18.1% from 12.1% last year.
Danamon’s strong capitalization enables a positive momentum for expansion. “We have an extensive nationwide distribution network, and, leveraging on our strong capital position, 54 conventional branches were added across the country over the last 12 month until the end of June 2012, bringing the total conventional branches to 526 branches. During the same 12 month period, we’ve also added 49 DSP units as well as 87 Adira Finance branches and outlets. The last 12 month also saw the addition of 227 ATMs and 47 Cash Deposit Machines (CDMs), making Danamon’s total ATMs to 1,314 unit and CDMs to 50 units. Additionally, entering the month of Ramadan, we are ready to anticipate a high season for gold backed Shariah based financing with 139 of our Solusi Emas Syariah units across Indonesia,” added Vera.
PT Bank Danamon Indonesia Tbk. was established in 1956 and as of June 30, 2012 operates over 3,200 branches and points of sales, including its Danamon Simpan Pinjam (DSP) and Syariah units as well as its subsidiaries branches. As of June 30, 2012 Danamon provides its customers with access to over 30,000 ATMs, including through its association with ATM Bersama and ALTO, in all 33 provinces in Indonesia.
Danamon was recently awarded as the Best Private Bank with over Rp10 trillion in Assets in Risk Management Education at the Indonesia Enterprise Risk Management Award 2012 from Business Review. Danamon also received Indonesia Brand Champion 2012 and Indonesia Service to Care Champion 2012 awards from Marketers and Markplus Insight in the conventional bank with more than Rp75 trillion in assets category. Internationally, Danamon received “Best Corporate Governance” in FinanceAsia’s Asia’s Best Companies 2012 poll.
Danamon is the sole issuer and acquirer of American Express® cards in Indonesia under an independent operator agreement which allows it to issue American Express cards to individual and corporate clients. Danamon is also the only bank which provides services to local merchants who accept American Express Cards and for signing up new merchant partners in Indonesia. Danamon is also the sole license holder of Manchester United cards in Indonesia, allowing the Bank to issue Manchester United ATM/Debit cards and credit cards.
PT Adira Dinamika Multi Finance Tbk (Adira), the automotive financing subsidiary of Danamon, operates an extensive branch network in more than 260 cities in Indonesia.
As of June 30, 2012, Danamon was 67.37% owned by Asia Financial (Indonesia) Pte. Ltd. and 32.63% by the public. On April 2, 2012, Danamon has been informed by Fullerton Financial Holdings Pte. Ltd., that it has entered into a share purchase agreement with DBS Group Holdings to sell its interest in the whole of the issued share capital of Asia Financial (Indonesia) Pte. Ltd. to DBS. The transaction is subject to the approvals, among others, of DBS shareholders and regulators in Singapore and Indonesia, including Bank Indonesia.