Third quarter NPAT rose 14% compared to last quarter; SME Loans rose 7%, CASA grew by 5%, CASA ratio improved to 45%; Loans to Funding ratio at 91.1%


Jakarta, 26 October 2015. PT Bank Danamon Indonesia, Tbk. ('Danamon') today announced a net profit after tax of IDR 1.9 trillion in the first nine months of 2015.

'We have implemented changes early this year to improve our business performance. These changes are showing encouraging results, although it is still early days,' said Vera Eve Lim, Chief Financial Officer and Director of Danamon.

Vera added that Danamon is undertaking several initiatives to improve productivity and cost of funds. 'Most importantly, we are concentrating on improving customer coverage and service by restructuring our sales and service network,' she said.

Quarter-to-Quarter improvements
Danamon recorded several key improvements in the third quarter of 2015 compared to the previous quarter. Notable improvements included a 14% quarter-to-quarter increase in third quarter NPAT to IDR 643 billion. Cost-to-income ratio decreased from 54.6% in the second quarter to 51.0% in the third quarter. Quarterly net interest margin (NIM) increased from 7.8% to 8.3%, which was due to lower cost of funds.

Year-on-Year growth in SME, commercial, and corporate banking loans
In the first nine months of 2015, loans to small and medium enterprises (SME), commercial and corporate banking segments grew compared to the same period a year ago. However, their gains were offset by declines in the loans to the mass market sector, particularly loans to the micro enterprises and automotive segments. Consequently, total loans declined by 4% to IDR 133.6 trillion in the first nine months of 2015 from IDR 139 trillion during the same period last year.

Loans to the SME segment increased by 7% to IDR 22.6 trillion from IDR 20.1 trillion. Loans to the commercial banking segment grew by 5% to IDR 16.2 trillion from IDR 15.4 trillion. Loans to the corporate banking segment booked a 5% growth to IDR 18.3 trillion compared to IDR 17.4 trillion.

Loans that booked a decline were those to the micro enterprises and automotive segments. Micro segment loans, through Danamon Simpan Pinjam (DSP), was recorded at IDR 16.1 trillion, an 18% decline compared to IDR 19.6 trillion recorded a year ago. Loans to the automotive sector and white goods financing, through Adira Finance, declined by 7% to IDR 47.6 trillion from IDR 51.1 trillion a year ago.

Improvement in CASA deposits and cost of funds
In the first nine months of 2015, Danamon's Current and Savings Accounts (CASA) composition improved to 45% of Danamon's customer deposits compared to 43% a year ago. CASA balances grew by 5% to IDR 53 trillion from IDR 50 trillion a year ago. Time deposits decreased by 4% to IDR 63.2 trillion. The growth in CASA ratio resulted in an improvement in cost of funds (COF) to 6% compared to 6.4% in the same period last year.

Asset quality remained below regulatory limit
 'Gross non-performing loans stood at 3.0%, which remained below the regulatory limit of 5%,' said Vera, adding that the bank is constantly aiming at improving its asset quality through strict enforcement of risk assessment procedures, disciplined collection and recovery of debts.

Healthy loan-to-funding ratio and capital
Danamon's regulatory loan-to-total funding ratio (LFR) stood at 91.1% compared to 91.3% in the same period a year ago. Danamon's LFR remained below Bank Indonesia's threshold, which is set at 94%.

Danamon's consolidated capital adequacy ratio (CAR) stood at 19.1%, while standalone CAR was at 20.1%.

Recent Developments
 Danamon recently signed a Memorandum of Understanding (MoU) with Bank Central Asia (BCA) to conduct co-branding in BCA's multipurpose 'Flazz' prepaid card. This agreement would enable Danamon's customers to benefit from the speed and convenience that electronic money can provide, using it to pay for parking, transportation, and grocery shopping, among others. Concurrently, Danamon also signed an MoU with Rintis Sejahtera for the development of the balance top-up infrastructure for the Flazz card through Danamon's network.

Recent awards received by Danamon include The Most Efficient Bank and The Best Bank in Retail Banking Services from the Indonesia Banking Award 2015, which was held by Tempo Media Group as well as an award for Bank with a 'Very Good' rating in the above IDR 100 trillion asset category in the Infobank Award 2015 held by Infobank Magazine.

About Danamon:
 PT Bank Danamon Indonesia, Tbk. ('Danamon') was established in 1956 and as of September 30, 2015 operates a network of 2,001 including among others conventional branches, Danamon Simpan Pinjam (DSP) and Syariah units as well as its subsidiaries branches. As of September 30, 2015, Danamon provides its customers with close to 66,000 ATMs, including through its association with ATM Bersama and ALTO, in all 34 provinces in Indonesia. Danamon manages around IDR 195 trillion in assets as of September 2015.

Danamon was recently awarded as The Most Efficient Bank and The Best Bank in Retail Banking Services from the Indonesia Banking Award 2015, which was held by Tempo Media Group. Danamon also received an award for Bank with a 'Very Good' rating in the above IDR 100 trillion asset category in the Infobank Award 2015 held by Infobank Magazine. Danamon also recently received the Customer Satisfaction Award 2014 - Consumer Bank of the Year by Roy Morgan. Internationally, Danamon was awarded as Asia's Best Company 2015 - Best Managed Company (Indonesia, ranked 8th) by Finance Asia.

Danamon is also the sole license holder of Manchester United cards in Indonesia, allowing the Bank to issue Manchester United ATM/Debit cards and credit cards.

PT Adira Dinamika Multi Finance, Tbk. (Adira Finance), the automotive financing subsidiary of Danamon, operates an extensive branch network in more than 260 cities in Indonesia. Danamon is also the majority owner of PT Asuransi Adira Dinamika (Adira Insurance), a general insurance company and PT Adira Quantum Multifinance (Adira Kredit), a durable goods financing company.

A s of September 30, 2015, Danamon was 67.37% owned by Asia Financial (Indonesia) Pte. Ltd., 6.81% by JPMCB-Franklin Templeton Investment Funds and 25.82% by the Public.
For further information regarding Danamon, please visit Danamon's corporate website at: www.danamon.co.id.

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