Jakarta, 19 February 2020. PT Bank Danamon Indonesia Tbk (“Bank Danamon” or the “Bank”) today announced its full year 2019 financial results.
The Bank booked net profit after taxes (NPAT) of IDR 4.07 trillion in 2019, a 4% growth as compared to a year earlier. This NPAT is the highest recorded in Bank Danamon’s history. The NPAT growth was contributed by the divestment of 70% share ownership in the bank’s general insurance subsidiary PT Asuransi Adira Dinamika Tbk to Zurich Insurance Company Ltd, a globally renowned general insurer. The proceeds from the sale of Adira Insurance is used to invest in strengthening our proposition including our infrastructure, improvement of service quality as well as potential additional shareholder return. The profit growth was also driven by the Bank’s focus in its key growth engines, namely loans to the Enterprise Banking and consumer mortgage segments as well as the automotive financing sector.
“The first full year of MUFG investment brought new milestones for Bank Danamon, from the successful merger with Bank Nusantara Parahyangan (Bank BNP), reaching a BUKU IV capital requirement, to partnership with numerous prominent institutions. These early milestones and achievements mark the beginning of the rise of the new Danamon. Going forward, we will continue to further expand our business, build solid foundation through branding, human capital and digital infrastructure development, and leverage on deeper collaboration with MUFG,” said Yasushi Itagaki, President Director of Danamon.
“With our customer centric approach, we make sure that all of our initiatives are undertaken with the customers’ best interest in mind. Last year, our collaboration with MUFG resulted in our first business matching event, bringing together close to 80 Japanese, Indonesian and Southeast Asian corporate clients to network and explore business opportunities. Last year also saw increasing customer adoption of our digital banking service, with more than 94% banking transactions being done through digital channels, while D-Bank, our mobile banking application, where a user can open an account without visiting a branch, contributes to 13.6% of new customer acquisition, Itagaki added.
Lending Growth in Key Segments
Enterprise Banking loan portfolio, consisting of Corporate, Commercial Banking, and Financial Institutions, grew 6% to IDR 44.0 trillion. Loans to the Small and Medium Enterprises (SME) segment grew 1% to IDR 31.5 trillion. Meanwhile, Consumer Mortgage loans grew 16.3% to IDR 9.1 trillion.
In terms of automotive financing, Adira Finance recorded a 7% growth as compared to a year earlier to IDR54.8 trillion, despite slowdown in the automotive industry.
Excluding Micro financing, overall loan portfolio and Trade Finance grew 5% to IDR 143.8 trillion as compared to the previous year.
Healthy Asset Quality
Bank Danamon continued to maintain its asset quality through prudent enforcement of risk assessment procedures, disciplined collection and recovery of debts. The Bank’s nonperforming loan (NPL) at the end of 2019 is at a stable 3.0%, while restructured loans ratio improved by 30 basis points as compared to a year earlier to 2.3%.
Growth in General Insurance and Treasury Fee Income
Fee income grew by 12% to IDR 3.7 trillion, supported by an 11% increase from general insurance and 30% growth from treasury.
Healthy Liquidity and Capital
Danamon continued to focus on granular funding with 23% year-on-year growth in current and savings accounts (CASA) and TD regular. CASA balances increased by 7% to IDR 55.8 trillion, as CASA comprised almost half of the Bank’s funding with a CASA ratio of 49.7%. While Macroprudential Intermediation Ratio (RIM) reached 99.7% at the end of 2019, overall liquidity was well managed.
In the fourth quarter of 2019, Bank Danamon’s tier-1 equity has increased beyond the IDR 30 trillion mark, above the BUKU IV requirement. Bank Danamon’s capital adequacy ratio (CAR) remained one of the strongest among peer banks. Consolidated CAR improved to 24.2% at the end of 2019 as compared to 22.8% a year ago.