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rivate lender Bank Danamon and its insurance firm subsidiary Adira Finance are considering lowering their lending targets this year, as economic growth is predicted to stay weak, executives from the two companies say.

Declining growth in car sales in the past few months has impacted Danamon'€™s business, as the greatest portion of its loan portfolio is contributed by Adira Finance, which operates in the automotive-financing industry.

The publicly listed lender said it was hoping for a slight increase in lending during the Ramadhan and Idul Fitri festivities. However, it has predicted that its full year lending growth will continue to decline at single digits, under 10 percent, according to finance director Vera Eve Lim.

'€œWe are still calculating [our loan target revision] and will submit it to the Financial Services Authority [OJK] by the end of June,'€ Vera said on Friday evening.

New Danamon president director Sng Seow Wah previously said the bank aimed to grow its loans by 10 to 12 percent this year, despite an only 3 percent increase in lending last year to Rp 139.05 trillion (US$10.4 billion).

Meanwhile, data from the Association of Indonesian Automotive Manufacturers (Gaikindo) show that total car sales fell by about 16.6 percent year-on-year (yoy) during the January-May period to 443,181 cars, while motorcycle sales fell 36.5 percent yoy in the same period.

Indonesia'€™s economic growth stood at 4.7 percent in the first quarter of this year, lower than 5.1 percent in the same period last year as a result of a combination of falling global oil and commodity prices and domestic pressures including inflation rises to 7.15 percent yoy in May.

Adira Finance president director Willy S. Dharma said the company was also considering slashing its financing growth target this year by around 5-10 percent from Rp 34 trillion expected by the end of the year.

Willy said the company had booked financing worth Rp 12.1 trillion by May, a 12.3 percent decrease from Rp 13.8 trillion in the same period last year.

'€œAll players in the auto-financing industry say demand is still weak, so we cannot predict progress exactly in the next few months despite a seasonal pick-up during Ramadhan and Idul Fitri,'€ Willy said.

Based on the situation, Willy said the company'€™s total financing would probably only reach Rp 14.6 to 14.8 trillion by the end of first half, lower than Rp 15 trillion in the same period last year.

By the end of the first quarter this year, Danamon'€™s net profit remained under pressure at Rp 686.83 billion, 21.5 percent less than a year ago. The bank'€™s latest financial result shows that 49.66 percent or almost half of Danamon'€™s loan portfolio went to the mass-market segment, which includes loans for vehicles and micro-businesses.

Despite a gloomy outlook for the whole year, Vera said the bank remained optimistic about Indonesia'€™s economic prospects in 2016, when government spending would improve and growth would pick up.

'€œThe economy is cyclical, and is currently at a low point. We should always be prepared for a boom. Next year, the economy will get better and the bank will be ready for the momentum, because we have enough capital and liquidity,'€ Vera said.