In its 1st Half 2019 Results Danamon Announces 11% Year-on-Year Growth in Loan & Trade Finance

Information / 24 July 2019

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Jakarta, 24 July 2019. PT Bank Danamon Indonesia Tbk (“Danamon” or the “Bank”) today announced its first half 2019 financial results.

The Bank’s total loans and trade finance portfolio registered growth of 11% to reach IDR 148 trillion in the first half of 2019, as compared to the same period last year. The Bank also recorded growth in funding. CASA and Time Deposit grew by 8% and 16%, respectively, compared to the same period last year. In the first semester of 2019, Danamon recorded net profit after tax (NPAT) of IDR 1.8 trillion.

With effect from May 1 2019, MUFG achieved 94.1% ownership in the Bank, following the Bank’s merger with PT Bank Nusantara Parahyangan (BNP). With MUFG as sole controlling shareholder, Danamon can leverage MUFG’s relationships with global customers and benefit from sharing their international best practices, to complement Danamon’s local network and strengths.

“The Bank’s focus on several important initiatives in the first half of the year has helped us to boost our loan growth. The completion of the merger and MUFG investment in Danamon has also opened new opportunities and collaboration for a new and stronger Danamon,” said Satinder Ahluwalia, Chief Financial Officer and Director of Bank Danamon. 

“Enhancements in the Bank’s digital channels and overall improvement in service quality continued to show its benefits. Our lending continues to grow in key segments, particularly in the Consumer Mortgages, Enterprise Banking, and automotive financing through Adira Finance,” added Satinder.

Lending Growth in Key Segment

In the first six months of 2019, Mortgage loans increased 28% YoY to IDR 8.8 trillion. Enterprise Banking which consists of corporate and commercial loans and Financial Institutions segments or EB & FI grew 15% to IDR 44.3 trillion. Meanwhile, SME Banking loans grew 15% from the same period last year to IDR 35.0 trillion.

In terms of automotive financing, Adira Finance booked a 12% YoY growth to end the first half of 2019 at IDR 53.9 trillion. This healthy growth was driven by 13% financing growth for the two-wheeler segment and 13% for the four-wheeler segment.

Excluding Microfinancing, the Bank’s overall loans and trade finance portfolio grew by 14% to IDR 147.1 trillion as compared to the previous year.

Healthy Capital and Liquidity

Danamon’s capital adequacy ratio (CAR) remained one of the best among its peer banks. Post-merger with BNP, consolidated and Bank-only CAR stood at 21.7% and 22.2%, respectively. CASA increased by 8% to IDR 54.7 trillion, while Time Deposits increased by 16% to IDR 63.0 trillion. The Bank’s Macro-prudential Intermediation Ratio (RIM) of 97.3% indicated adequate liquidity to support growth. Danamon has also issued Bonds of IDR 2 trillion in May 2019.

Prudent Asset Quality Management

The Bank continued to improve its prudent enforcement of risk assessment procedures and asset quality management through disciplined credit underwriting, monitoring, collection and recovery of debts. NPL ratio stood at 3.2% versus 3.3% in the first half of last year. Cost of credit ratio stood at 2.5%, an improvement as compared to 2.6% a year ago.