PT Bank Danamon Indonesia Tbk announced a consolidated net profit after tax of Rp701 billion for the first three months of 2010; a 78% increase from Rp393 billion a year ago, contributed by increased in operating income, sustained margins and improved cost of credit.
“The first three months of 2010 has in fact been Danamon’s best performing quarter ever and the prelude to an exceptional performance in 2010,” stated Sebastian Paredes, Danamon’s President Director.
In the first quarter of the year Danamon regained its business momentum; an exemplary turnaround from a global crisis period in 2009. “Our loans continued to grow and our cost of credit has improved substantially by 24%. We believe that this sets a very optimistic outlook for the Bank in the subsequent quarters,” he continued.
The Bank’s strong financial performance was attributable to a 36% growth in net operating income, reaching Rp1,622 billion from Rp1,190 billion a year ago, and an improved cost to income ratio of 47.5% from 50.6% in previous quarter. The Bank was able to sustain its net interest margin (NIM), which stood at 12.6% at the end of the first quarter 2010 compared to 10.0% for the same period last year.
The Bank’s strong financial performance was attributable to a 36% growth in net operating income, reaching Rp1,622 billion from Rp1,190 billion a year ago, and an improved cost to income ratio of 47.5% from 50.6% in previous quarter. The Bank was able to sustain its net interest margin (NIM), which stood at 12.6% at the end of the first quarter 2010 compared to 10.0% for the same period last year.
Danamon’s cost of credit improved markedly to Rp578 billion from Rp762 billion in the previous quarter. As such, Danamon’s reported a return on average asset (ROAA) of 2.9%, almost doubling that of 1.5% a year ago.
Meanwhile, the Bank’s return on average equity (ROAE) stood at 18%, despite our capital adequacy ratio (CAR) of 19.7%, after taking into account the operational risk charge, is among the highest capital ratio in the country.
The mass market segments; mainly comprised of micro lending and Danamon’s consumer auto financing, continued to be important drivers for Danamon’s loan growth. “These mass market loans combined have grown 16% during the first quarter of 2010. DSP, our micro lending business, managed to book a loan growth of 5% to Rp12,885 billion from the previous quarter, while Adira’s financing reached Rp20,494 billion,” explained Vera Eve Lim, Danamon’s Director and Chief Financial Officer.
Meanwhile, the Bank’s return on average equity (ROAE) stood at 18%, despite our capital adequacy ratio (CAR) of 19.7%, after taking into account the operational risk charge, is among the highest capital ratio in the country.
The mass market segments; mainly comprised of micro lending and Danamon’s consumer auto financing, continued to be important drivers for Danamon’s loan growth. “These mass market loans combined have grown 16% during the first quarter of 2010. DSP, our micro lending business, managed to book a loan growth of 5% to Rp12,885 billion from the previous quarter, while Adira’s financing reached Rp20,494 billion,” explained Vera Eve Lim, Danamon’s Director and Chief Financial Officer.
Other loan segments in Danamon’s loan book comprised small and medium enterprise (SME) and commercial loans, which accounted for 25% of the Bank’s total loans; retail and wholesale loans which contributed to 7% and 12% of its loan portfolio, respectively, as per March 31, 2010. Danamon’s gross NPL declined to 4.0% as of March 31, 2010 from 4.5% a quarter ago.
“In line with continuous efforts to enhance the funding franchise, our savings accounts grew 25% while current accounts grew by 14%, reaching Rp15,572 billion and Rp7,519 billion, respectively,” Vera added.
Hence, the ratio of current account and savings account (CASA) to Danamon’s total deposits reached 35%, improving from 25% at the end of the first quarter of 2009. At the end of the first quarter of 2010, taking into account its capital base, Danamon’s modified loan to deposits (LDR) ratio stood at 83.9%.
“In line with continuous efforts to enhance the funding franchise, our savings accounts grew 25% while current accounts grew by 14%, reaching Rp15,572 billion and Rp7,519 billion, respectively,” Vera added.
Hence, the ratio of current account and savings account (CASA) to Danamon’s total deposits reached 35%, improving from 25% at the end of the first quarter of 2009. At the end of the first quarter of 2010, taking into account its capital base, Danamon’s modified loan to deposits (LDR) ratio stood at 83.9%.
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