Stronger Bank Danamon: a Year after MUFG Investment

Jakarta, 9 March 2020. PT Bank Danamon Indonesia Tbk (“Bank Danamon” or the “Bank”) today announced its achievements after a year of MUFG investment and its full year 2019 financial results during Public Expose at the Indonesian Stock Exchange (IDX).

“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.   

Since MUFG started to invest in early 2018, Bank Danamon also managed to form partnership with several prominent institutions, such as with PT Mercedes-Benz Distribution Indonesia and PT Daimler Commercial Vehicles Indonesia in dealer financing, PT BSD Diamond Development, a joint venture between Mitsubishi Corporation and Sinar Mas Land in housing loans, as well as with PT Investree Radhika Jaya, a peer-to-peer lending platform. Recently, Bank Danamon has also partnered with PT Car Some Indonesia (Carsome), one of the leading car trading platforms, to become Carsome’s Cash Management Bank in Indonesia.

These partnerships can be formed due to Bank Danamon’s capability in serving customers from every segment and business ecosystem, from large corporates to distributors and suppliers to individual customers. This unique value is acquired from the synergy between global network and strong relationship of MUFG with the local network and capabilities of Bank Danamon. 

“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.

As a member of MUFG, Bank Danamon employees also have opportunities to exchange ideas and best practices with MUFG’s partner banks such as Krungsri in Thailand, Security Bank in the Philippines, and VietinBank in Vietnam. Bank Danamon can also strengthen its Digital capabilities by leveraging MUFG’s Digital Innovation Centers in Silicon Valley, New York, London, and Singapore, as well as MUFG’s Corporate Venture Capital “MUFG Innovation Partners” in Tokyo.   

Highest ever NPAT

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. 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.

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.


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