SME, Consumer Mortgage, and Automotive Loans Grew by 11%, 35%, and 12% respectively; While CASA Ratio Improved to 49.1%

Jakarta, 24 October 2018. PT Bank Danamon Indonesia Tbk (“Bank Danamon” or the “Bank”) today announced its first nine months of 2018 financial results, as Small and Medium Enterprises (SME) and Consumer Mortgage loans continue to record robust growth, while automotive financing through Adira Finance started to record double digit year-on-year growth. The Bank’s funding structure continues to improve, as Current Account and Savings Accounts (CASA) comprised of almost half of the Bank’s total funding.

“One of our long term strategic initiatives is improving our digital service, which has garnered numerous accolades from renowned local and international institutions. Recently, Bank Danamon was named as Best Digital Bank in Indonesia for the second consecutive year by Asiamoney Magazine. Locally, Bank Danamon was named as Best Bank in Digital Service by Tempo Media Group. These recognitions underpin the Bank’s high standard of customer service that is driven by technological innovations and the latest best practices,” said Michellina Triwardhany, Vice President Director, Bank Danamon.

The Bank’s net profit after taxes (NPAT) in the first nine months of 2018 was stable as compared to previous year at IDR 3 trillion.

Lending Growth in Key Segments; Double Digit Growth in Auto Finance

In the first nine months of 2018, Bank Danamon’s recorded a total loan portfolio and Trade Finance growth of 6% at IDR 134.3 trillion, as compared to IDR 126.9 trillion in the same period in 2017.

SME Banking portfolio increased 11% to IDR 30.5 trillion, while Consumer Mortgage loans grew 35% to IDR 7.3 trillion.

In terms of automotive financing, Adira Finance recorded a 12% year-on-year growth in total financing, standing at IDR 49.7 trillion at the end of September 2018. The double digit growth is driven by Adira Finance’s new financings, which grew by 14.8% year-on-year for the two-wheelers segment and 22% for the four-wheelers segment. This is in contrast to a 16% decline in new two-wheelers financing and a flat growth for new four-wheelers financing in the same period in 2017.

Excluding Micro financing, overall loan portfolio and Trade Finance grew 10% to IDR 131.1 trillion as compared to the same period last year.

Growing CASA

CASA balances increased by 3% to IDR 49.1 trillion, and CASA ratio improved to 49.1% from 47.5% a year ago due to improvement in granular savings account balances. Time Deposits decreased by 3% to IDR 50.9 trillion as Bank Danamon let go of higher priced third-party funds. Improvement in Danamon funding structure led to lower cost of funds, setting up a foundation for long term growth.

Bank Danamon’s capital adequacy ratio (CAR) remained one of the best among peer banks. Consolidated and Bank-only CAR stood at 22.3% and 23.1%, respectively.

Growth in Bancassurance and General Insurance Fee Income

Non-credit related fee income grew 13% to IDR 935 billion. The improvement was mainly due to Adira Insurance’s net underwriting profit, which grew by 25% to IDR 447 billion. Bancassurance fee also grew by 11% to IDR 266 billion.

Steady Asset Quality in Key Sectors

Bank Danamon continued to maintain its asset quality through prudent enforcement of risk assessment procedures, disciplined collection and recovery of debts. Special mention ratio has improved to 10.8% as compared to 12.1% a year ago, while NPL ratio was improved to 3.0% in the first nine months of 2018 as compared to last year at 3.3%. Cost of credit ratio was stable at 2.6% while restructured loans continued to decline.

About Danamon:

PT Bank Danamon Indonesia Tbk was founded in 1956, and as of 30 September 2018 manages IDR 178.3 trillion in assets along with its subsidiaries, which are PT Adira Dinamika Multi Finance Tbk. (Adira Finance) and PT Asuransi Adira Dinamika (Adira Insurance). In terms of shareholding, 40.00% of Bank Danamon shares are held by The MUFG Bank, Ltd., 33.83% by Asia Financial (Indonesia) Pte. Ltd., 5.08% by JPMCB-Franklin Templeton Investment Funds, and 21.09% by the public.

The Bank is supported by a network of 1,243 including conventional branches, syariah units, subsidiary outlets and more than 60,000 ATMs through partnership with ATM Bersama, PRIMA, and ALTO across 34 provinces. In addition to physical network, Danamon’s services can be accessed from Danamon Online Banking, D-Bank and D-Card mobile application, and SMS Banking.

Bank Danamon is the exclusive issuer of Manchester United DEBIT/ATM and Credit Cards in Indonesia, and issuer of American Express credit cards. With a wide range of financial products such as Danamon Lebih, FlexiMax, Tabungan Bisa iB, Dana Pinter 50, KAB Bisa, and Primajaga Insurance, Bank Danamon enables customers from various segments to meet their financial needs.

Recently, the Bank received the Best Digital Bank: Indonesia award from Asiamoney during the Asiamoney Best Bank Award 2018 awarding night in Beijing, People’s Republic of China. Locally, Bank Danamon was also named as Best Bank in Digital Service and Best Sharia Business Unit during the Indonesia Banking Award 2018 by Tempo Media Group and Indonesia Banking School.

PT Bank Danamon Indonesia, Tbk. and Subsidiaries

FINANCIAL HIGHLIGHTS

Per 30 September 2018

Rp Billion 9M17 9M18 ∆ YoY 2Q18 3Q18 ∆ QoQ
Income Statement
Net Interest Income 10,581 10,825 2% 3,613 3,613 0%
Non Interest Income1) 2,607 2,435 -7% 812 828 2%
Operating Income 13,188 13,260 1% 4,425 4,441 0%
Cost of Credit 2,509 2,517 0% 888 831 -6%
Operating Expenses 6,390 6,439 1% 2,149 2,172 1%
Operating Profit 4,289 4,305 0% 1,389 1,439 4%
Net Profit After Tax 3,034 3,038 0% 967 1,027 6%
Rp Billion 9M17 9M18 ∆ YoY 2Q18 3Q18 ∆ QoQ
Balance Sheet
Total Assets 173,674 178,634 3% 182,416 178,634 -2%
Total Loan Portfolio and Trade Finance2) 126,883 134,330 6% 133,902 134,330 0%
Government Bonds 9,163 13,082 43% 11,821 13,082 16%
Total Funding 121,023 120,423 0% 125,534 120,423 -4%
Equity 37,209 40,153 8% 39,155 40,153 3%
% 9M17 9M18 ∆ YoY 2Q18 3Q18 ∆ QoQ
Financial Ratio
Net Interest Margin 9.3 9.0 (0.3) 9.0 9.0 (0.0)
Cost to Income 48.4 48.6 0.2 48.6 48.9 (0.3)
ROAA 2.3 2.3 (0.0) 2.1 2.3 0.2
ROAE 11.6 11.0 (0.6) 10.6 11.0 0.4
LFR3) 93.8 94.1 98.5 (4.4)
RIM4) 100.9 96.3 100.9 (4.6)
NPL Gross 3.3 3.0 0.3 3.3 3.0 0.3
Consolidated CAR 22.3 22.3 0.0 21.7 22.3 0.6
1) Consist of fee income of Rp2,624 bn 9M17 vs Rp2,425 bn 9M18

2) Trade Finance includes related marketable securities.

3) Loan to Funding Ratio (“LFR”) calculation is as stipulated in BI Regulation No. 17 / 11 / PBI / 2015 dated 25 June 2015 effective August 2015. LDR Data is used prior to Aug 2015.

4) Based on new Bank Indonesia Regulation (PBI) no. 20/4/PBI on April 3, 2018 regarding Macro prudential Intermediation Ratio (Rasio Intermediasi Makroprudensial/RIM)

· Best Digital Bank: Indonesia award from Asiamoney during the Asiamoney Best Bank Award 2018 awarding night in Beijing, People’s Republic of China.

· Best Bank in Digital Service and Best Sharia Business Unit during the Indonesia Banking Award 2018 by Tempo Media Group and Indonesia Banking School.

· “Very Good” Rating in the Sharia Business Unit with Assets between IDR 2.5 trillion to IDR 5 trillion category during the 7th Infobank Sharia Award 2018 held by Infobank Magazine.

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