Bank Danamon Posted Double Digit Pre-Provision Operating Profit and CASA growth in First Half of 2020

Press Release / 30 July 2020

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Ensuring Health and Safety of Customers and Employees, while Maintaining Quality of Service; MUFG Synergy Showed Positive Outcome with 16% Growth in Enterprise Banking Loans

Jakarta, 30 July 2020. PT Bank Danamon Indonesia Tbk (“Bank Danamon” or the “Bank”) today announced its first half 2020 financial results.

Supported by strong collaboration with MUFG, Bank Danamon has recorded growth in operating income and pre-provision operating profit by 6% and 15%, respectively, over prior year. This is contributed by a 16% year-on-year growth in loans of Enterprise Banking and an 18% growth in fee-based income. Cost-to-income ratio is at 46%, a 4.4% year-on-year improvement. The first half of the year saw a stronger funding franchise by a 14% increase compared to last year in Current Account and Savings (CASA) to IDR 62.1 trillion. CASA ratio improved to 53.2% from 46.4% a year ago. The Bank booked net profit after taxes (NPAT) of IDR 845 billion in the first half of 2020.

“Throughout this COVID-19 pandemic, our priority is to ensure that our customers continue to enjoy our services while implementing the necessary precautions and health protocols. Amid this challenging condition, we have also strengthened our foundations with a stable liquidity and healthier funding composition, combined with ample capital that has propelled us into BUKU 4 status and helped us withstand the economic slowdown. We will continue to leverage the strong foundation and proven synergy with MUFG in our journey to foster higher growth, while preparing for the economy to recover,” said Yasushi Itagaki, President Director, Bank Danamon. 

“In the first half of the year, we actively contributed in the fight to curb the spread of COVID-19 through a series of corporate social responsibility (CSR) activities. Bank Danamon, MUFG, along with PT Adira Dinamika Multi Finance (Adira Finance) collectively provided basic needs for driver partners of online-based ride sharing services, Grab and Gojek, through their respective partners, BenihBaik and Yayasan Anak Bangsa Bisa (YABB). Bank Danamon also collaborated with non-profit organization Indonesia Kuat to distribute 4.000 personal protective equipments (PPE) through the Tetap Terkendali (Stay in Control) social media video campaign. Across Indonesia, Bank Danamon distributed PPEs and staple food packages to local hospitals and communities through our network of regional offices and branches. Furthermore, we provided Manpower Social Security (BPJS Ketenagakerjaan) insurance for 10.000 medical volunteers through the National Disaster Mitigation Agency (BNPB),” added Itagaki. 

Lending to Key Segments

Enterprise Banking loan portfolio, consisting of Corporate, Commercial Banking, and Financial Institutions, grew 16% to IDR 51.2 trillion, which was in part contributed by collaboration with MUFG. Loans to the Small and Medium Enterprises (SME) segment and the Consumer Mortgage segment were at IDR 27.3 trillion and IDR 8.7 trillion at the end of June 2020, respectively.  

In terms of automotive financing, Adira Finance recorded total financing of IDR 50.4 trillion in the first half of 2020, amid a challenging condition in the automotive industry.  

Overall loan portfolio and Trade Finance is at IDR 142.7 trillion at the end of June 2020. 

Healthy Asset Quality 

Bank Danamon maintained its prudent asset quality management through enforcement of risk assessment procedures, disciplined collection and recovery of debts. The Bank’s nonperforming loan (NPL) at the end of first half 2020 is at 4.1%. Danamon continues to maintain sufficient provisions while at the same time helps customers who are impacted by COVID-19 through loan restructurings.

Growth in Fee Income

Fee income grew by 18% compared to a year earlier to IDR 1.96 trillion, supported by a 48% increase from bancassurance and wealth management and 134% increase on treasury gains from marketable securities and forex. 

Healthy Liquidity and Capital 

Danamon continued to focus on granular funding with 19% year-on-year growth in current and savings accounts (CASA) and TD regular. CASA balances increased by 14% to IDR 62 trillion, as CASA comprised of more than half of the Bank’s funding with a CASA ratio of 53.2%. Macroprudential Intermediation Ratio (RIM) reached 95.1% at the end of first half 2020, in line with management’s liquidity target.

Bank Danamon’s capital adequacy ratio (CAR) remained one of the strongest among peer banks, following the Bank’s confirmation as a BUKU 4 bank. Consolidated CAR was at 23.4% at the end of June 2020.