Danamon's Q1 profit increases 17 percent

Novia D. Rulistia , The Jakarta Post , Jakarta | Wed, 04/23/2008 1:07 AM | Business

Publicly listed PT Bank Danamon Indonesia booked a net profit of Rp 563 billion (US$61.37 million) in the first quarter of this year, up by 17 percent compared to Rp 482 billion in the same period last year.

President director Sebastian Paredes said Tuesday the increased net profit was supported by the expansion of credit in the mass market and wholesale customer segments.

"Danamon's loans grew by Rp 12.8 trillion, bringing total loans as of the end of March to Rp 55.9 trillion, up by 30 percent compared to the same period last year," Paredes said.

Its mass market segment, he added, mainly comprised micro lending and consumer automotive financing loans.

"The micro lending segment was valued at Rp 9.1 trillion, accounting for more than 16 percent of Danamon's total loans in March," he said.

Meanwhile, he said, the bank's automotive financing through its subsidiary Adira Finance grew by 21 percent year-on-year to Rp 13.8 trillion in March, which was largely attributed to motorcycle financing.

"Our wholesale segment, which mainly comprised commercial and corporate loans, has also contributed well to our loan growth over the past several quarters," Paredes said.

Corporate loans grew by 56 percent from Rp 3.7 trillion to Rp 8.6 trillion and commercial loans were up from Rp 4.8 trillion to Rp 7.5 trillion year-on-year.

The bank's director, Vera Eve Lim, said in its first quarter the bank's gross non-performing loan stood at 2.3 percent, down from 3.2 percent a year earlier.

Danamon's loan-to-deposit ratio -- a key indicator to gauge a bank's intermediary role -- stood at 74.2 percent at the end of the first quarter this year.

The increase in net profit was also supported by a rise in net interest income, which rose by 19 percent from Rp 1.65 trillion in the first quarter of last year to Rp 1.97 trillion this year.

For the full-year outlook, the bank is targeting a minimum 22 percent growth in lending, mostly to the SME segment. To support its SME lending, the bank will continue to rely on its savings and loans program, known as Dana Simpan Pinjam.