Danamon Announces Third Quarter 2014 Financial Results

Loans Grew 7% to IDR 139 trillion; LDR Improved to 91.3%, while Funding Rose 10%

PT Bank Danamon Indonesia, Tbk. ("Danamon") today announces a 7% loan growth to IDR 139 trillion in the first nine months of 2014 compared to IDR 129 trillion in the same period a year ago. Danamon's normalized* consolidated net profit after tax (NPAT) reached IDR 2.532 trillion in the first nine months of 2014, as net interest income was at IDR 10.2 trillion in the first nine months of 2014. At the end of September 2014, regulatory loan to deposit ratio improved to 91.3% from 99% a year ago, as total funding recorded a 10% increase driven by a 19% growth in time deposit.  

"The third quarter of the year proved to be a challenging period for the Indonesian economy, with lower commodity prices and weakening export, limiting room for business expansion.  As such, demand for loans has softened, prompting the banking industry to record a relatively conservative growth in the third quarter of the year," said Henry Ho, Danamon's President Director.

Danamon's loans to micro enterprises through Danamon Simpan Pinjam (DSP) remained flat at IDR 19.7 trillion in the third quarter of 2014 compared to the same period a year ago, while loans to small and medium enterprises (SME), grew by 11% to IDR 22.5 trillion. Altogether, loans to micro, small and medium enterprises (MSME) segment constituted 30% of Danamon's total loans. Meanwhile, loans to the commercial segment, increased by 15% in the third quarter of 2014 compared to last year to IDR 17 trillion, while loans to the corporate segment rose by 7% to IDR 18 trillion.

In the third quarter of 2014, automotive loans through Adira Finance booked IDR 49.5 trillion, a 4% growth compared to the third quarter of 2013.  In the first nine months of the year, Adira Finance managed to attract IDR 25.5 trillion in new financing, in which IDR 15 trillion was for two-wheelers and IDR 10.5 trillion was for four-wheelers.  

"Rising competition within the mass market segment, particularly in the micro lending segment, offered a challenging operating environment. To optimize opportunities and improve efficiency in this segment, we have undertaken several initiatives, which includes remodeling our micro lending operation," said Vera Eve Lim, Chief Financial Officer and Director, Danamon.     

Danamon's loan growth in the first nine months of 2014 was accompanied by sustained quality of assets, with non-performing loans ratio standing at 2.4% at the end of September 2014, a slight increase from 2.2% in the same period a year ago.

*Normalized NPAT is the figure before the application of the new OJK regulation on insurance fee impacting Adira Finance's fee income recognition.
Danamon posted a solid growth in its current account and savings account (CASA), which grew by 6% compared to the first nine months of 2013 to IDR 50 trillion. This growth meant that CASA constituted 43% of Danamon's customer deposits. Time deposit increased by 19% to IDR 65.8 trillion. All in all, Danamon's total funding, which includes CASA, time deposit, and long term funding, grew by 10% compared to the first nine months of last year to IDR 144 trillion.   

"Steady growth in funding and coupled with softened loan growth resulted in a significantly improved Loan-to-Deposit ratio, allowing for further room to grow," added Vera Eve Lim.  

As of the 30 September 2014, regulatory Loan-to-Deposit ratio (LDR) reached 91.3%, improving significantly from 99% at the end of September 2013. Danamon's consolidated Loan-to-Total Funding ratio stood at 85.9% at the end of September 2014 compared to 88.4% in the same period a year ago. Danamon's consolidated capital adequacy ratio (CAR) stood at 17.9%, while standalone CAR is at 18.2% at the end of September 2014. 

About Danamon:


PT Bank Danamon Indonesia, Tbk. ('Danamon') was established in 1956 and as of September 30, 2014 operates a network of around 2,440, including among others conventional branches, Danamon Simpan Pinjam (DSP) and Syariah units as well as its subsidiaries branches. As of September 30, 2014 Danamon provides its customers with close to 60,000 ATMs, including through its association with ATM Bersama and ALTO, in all 33 provinces in Indonesia. Danamon manages around IDR 194.4 trillion in assets as of September 2014.

Danamon was recently awarded Best Domestic Provider of FX Services, Best Domestic Provider for FX Products and Services, Best Domestic Provider for FX Options, and Best Domestic Provider for FX Research and Market Coverage from Asiamoney Foreign Exchange (FX) Poll 2014. Danamon also received the Indonesia Wow Brand Award 2014 as the Silver Champion in the Banking Industry category for Mortgage Products. Internationally, Danamon was included in the 2014 Forbes Global 2000, which is a list of the world's largest public companies as compiled by Forbes Magazine.

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.

As of September 30, 2014, Danamon was 67.37% owned by Asia Financial (Indonesia) Pte. Ltd., 6.53% by JPMCB-Franklin Templeton Investment Funds and 26.10% by the public.

For further information regarding Danamon, please visit Danamon's corporate website at: www.danamon.co.id.

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