Bank Danamon Announces 2020 Financial Results

Press Release / 18 February 2021

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Building a strong foundation for growth post COVID-19 pandemic; Registers growth in CASA and Enterprise Banking Credit

Jakarta, 18 February 2021. PT Bank Danamon Indonesia Tbk (“Bank Danamon” or the “Bank”) announces its financial year 2020 results.

“In 2020, Bank Danamon implemented measures that maintained productivity amid pandemic conditions and ensured continuous improvement of quality client services, which in turn contributed to efforts in rebooting the national economy,” explained Yasushi Itagaki, President Director of Bank Danamon.

Itagaki further added that the Bank continued in strengthening collaboration with MUFG through a number of initiatives while focusing on digital infrastructure developments to ensure optimized services throughout the pandemic. “The year 2020 brought forward many challenges for the banking industry, particularly in providing seamless service to clients. As an example of our operational resilience, we utilized our digital network and implemented health protocol measures to manage the situation. We achieved strong credit growth in Enterprise Banking through collaboration with MUFG. Our prudent enforcement of risk management, disciplined collection and debt recovery enable us to improve NPL at 2.8% coupled with much higher provision. Filled with optimism and supported by emerging signs of economic recovery, this coming year ushers increased momentum for us to deliver better financial solutions, products and services to meet client needs.”

The Bank focused on some vital initiatives that positively reflected its healthy asset quality and continuous strong funding. Initiatives include enhancement of digital infrastructure and credit restructure, plus improvement of overall services. Bank Danamon continues to innovate in order to provide quality services and experience for its clients. In recognition of its digital innovation efforts, Bank Danamon earned awards as Best Digital Bank from Asiamoney, Best Digital Banking Initiative from RBI Trailblazer, and DX Gamechanger from International Data Corporation.

Bank Danamon recorded net profit after taxes (NPAT) of IDR 1 trillion in 2020. Positive growth was attributed to credit from Enterprise Banking, composed of Corporate and Commercial Banking, as well as from Financial Institutions, which rose 25% valued at IDR 54 trillion.

Bank Danamon also posted 18% growth in Current and Savings Accounts (CASA) valued now at IDR 66 trillion, compared to 2019, thus increasing CASA ratio to 52.3%.

Credit Growth

Despite challenges resulting from the pandemic, Bank Danamon posted 25% credit growth from Enterprise Banking, attributable to the Bank’s collaboration and support of MUFG’s global network as one of the largest banks in the world. Riding the momentum towards economic recovery, Bank Danamon and MUFG will hold another Business Matching Fair to provide a venue for Indonesian corporate and commercial banking clients to meet potential international business partners. Aside from providing local clients the opportunity to conduct businesses beyond the country’s borders, the event will also hopefully contribute in keeping the wheels of economic recovery in motion.

In automotive financing, Bank Danamon subsidiary Adira Finance, recorded financing which amounted to IDR 44 trillion in 2020. Despite a dip in the automotive industry, Adira Finance managed to post quarterly growth of 67% represented by new loans during the final quarter of 2020, compared to the third quarter.

Healthy Asset Quality

Bank Danamon maintained healthy asset quality management through prudent enforcement of risk assessment procedures, disciplined collection and debt recovery during the second semester of 2020. As a result, by end of 2020, Nonperforming Loans (NPL) improved by 20 basis points (bps) positioned at 2.8% compared to end of year 2019. Simultaneously, Bank Danamon also proactively improved provisions wherein NPL coverage ratio reached a record high of 200%, as part of efforts in building a solid foundation to support growth in 2021.

Together with Adira Finance, Bank Danamon continues to aid clients affected by COVID-19 through credit restructuring, based on guidelines from regulators. As of December 2020, 65% of restructured clients returned to regular payment phase.

Healthy Liquidity and Capital

Bank Danamon focused on granular funding, consisting of Current and Savings Accounts (CASA) and regular TD, which recorded a 12% growth compared to the previous year. CASA grew 18%, valued at IDR 66 trillion, compared to end of 2019. Total deposits raised from customers grew 12% to IDR 126 trillion compared to previous year.

Macroprudential Intermediation Ratio (RIM) positioned at 85% and Load Deposit Ratio at 84% indicate Bank’s Danamon’s high liquidity.

At the end of Q4 2020, Bank Danamon’s tier-1 capital exceeded IDR 30 trillion, in accordance with its BUKU IV bank status. The Bank’s Capital Adequacy Ratio (CAR) remains one of the strongest in its category. Consolidated CAR increased 25.0% as of end of 2020, compared to 24.2% from the previous year.