First Half year performance recorded 18% growth in Net Profit after Taxes compared to previous year; an 11 % increase in Enterprise Banking Segment while Current Account and Savings rose by 10%; CASA posted 56.3% growth
Jakarta, 28 July 2021. PT Bank Danamon Indonesia Tbk (Danamon) announced its first half year financial performance report for 2021.
As a result of the strong synergy with MUFG throughout the pandemic, Danamon recorded a growth of 18% in net profit after taxes Rp998 billion, from Rp845 billion in the previous year. This achievement was largely driven by the 11% year-on-year growth in loans from the Enterprise Banking segment consisting of Corporate and Commercial Banking clients, as well as Financial Institutions. Danamon also posted 10% growth in Current Account and Savings (CASA) indicating the Bank’s continuing sound funding structure.
“The pandemic is not over yet and it continues to impact the economy with uncertainty. We have implemented a number of initiatives since the start of the pandemic, such as loan restructuring, proactive increase of provisions, and strengthening collaborations with MUFG to grow our customer franchise and provide seamless services to the value chain ecosystem. We are confident these initiatives will make us different and we will emerge stronger post the pandemic. As we celebrate our 65th year Anniversary, Danamon continues to improve our banking services to support and meet customers financial needs. Let us join hands to overcome these challenging times, to collaborate and to grow together,” stated President Director Danamon, Yasushi Itagaki.
Danamon ensured that clients and partners are able to continuously access banking services by improving the quality of digital services and infrastructure development. Since early pandemic, Danamon customers can always rely on the option of using their various electronic and digital banking channels : Danamon Online Banking, SMS Banking, ATMs, Call Centre, and certainly the newly revamped D-Bank PRO.
Danamon continuously strives to support the government's efforts in handling the Covid-19 pandemic and put strong effort to maintain the safety and security of employees during the pandemic. Danamon together with MUFG and Adira Finance on June 23 - July 2 held a vaccination center by distributing 12,500 doses of vaccine targeted at micro, small, and medium enterprises (MSMEs), transportation communities, online transportation drivers, and senior citizens, as well as employees and their families.
Previously, Danamon participated in the 'Vaccination Program for The Financial Services Sector' organized by the Ministry of Health of the Republic of Indonesia, the National Bank Association (Perbanas), the Indonesian Bankers Association (IBI), the Indonesia Stock Exchange (IDX), the Indonesian Securities Guarantee Clearing House (KPEI) and the Indonesian Securities Insurance Agency (KSEI). The COVID-19 vaccine is given to selected Danamon frontliners and seniors 60 and older
This year also marks Danamon 65th Anniversary and two-year anniversary of the completion of MUFG's strategic investment in Danamon. The Danamon and MUFG synergy begun the year with two key events as part of their ongoing collaboration commitment towards providing high-quality, value-added services to clients which are Indonesia Summit 2021 and Business Matching. Danamon Growth in the Enterprise Banking segment is driven by strong collaboration with MUFG as it continues to focus on deepening relationships with their existing clients, as well as developing their portfolio through new client acquisitions and their supply chains, leveraging the business network of MUFG Group.
In addition, Danamon has received Best Overall for the Satisfaction Loyalty Engagement Awards 2021 (SLE Awards 2021).
Quarter to Quarter Growth
Danamon recorded several gains within the first half of 2021 as compared to the first quarter. These included net interest income growth of 6% in the second quarter from the first quarter, amounting to Rp3.5 trillion. Additionally, non-interest income in the second quarter of 2021 also experienced growth of 5% compared to the first quarter.
Growth within Key Segments
A strong collaboration with MUFG continued to present positive results wherein Danamon recorded 11% growth in the Enterprise Banking segment, which consists of Corporate and Commercial Banking clients, as well as Financial Institutions.
In line with the improvement of the automotive financing industry, Adira Finance’s total new loans in the second quarter increased 282% compared to the same period in previous year, reaching the amount of Rp6.4 trillion. New loans of Adira Finance grew 356% YoY for two-wheel vehicles, and 242% YoY for four-wheel vehicles. In terms of new financing, Adira Finance experienced 18% quarterly growth.
Current Account and Savings (CASA) increased 10% to Rp68 trillion. CASA ratio recorded good performance at 56.3% from 53.2% in the same period compared to the previous year due to increased granular savings accounts. This strong financial structure builds a solid foundation for future growth.
Bank Danamon’s Capital Adequacy Ratio (CAR) remains one of the strongest among peer banks. Consolidated CAR is positioned at 26.1% while bank only CAR posted 26.5%.
Maintained Asset Quality Below Regulatory Limits
Gross non-performing loans are at a 3.0% level, which remains below the regulatory limit of 5%. NPL improved with 120 basis points in the same period compared to the previous year, reflecting Danamon’s continuous efforts to improve asset quality through stringent procedures in risk management, loan collection and recovery procedures. Cost of Credit ratio remained stable at 3.9%, while loan restructuring continues to diminish. NPL coverage ratio posted 176.9%, a significant increase compared to previous year’s 117.2% during the same period.