Bank Danamon net profit jumps by 79%<\/p>\n
Rendi A. Witular
\nJakarta<\/p>\n
Publicly listed Bank Danamon announced on Tuesday that its
\nfirst half net profit as of the end of June jumped by 79 percent
\nas compared to the same period last year, primarily on higher net
\ninterest income resulting from lending expansion and lower
\nfunding costs.<\/p>\n
The country's fifth largest bank in terms of assets said that
\nnet profit increased to Rp 1.1 trillion (about US$122 million) in
\nthe first six months of this year as against Rp 615 billion a
\nyear ago.<\/p>\n
The bank's net interest income rose by 93.3 percent to Rp 1.97
\ntrillion.<\/p>\n
\"Net interest income increased due to the rise in net interest
\nmargins, which have benefited from lower funding costs,\" said
\nDanamon chief financial officer Vera Eve Lim at a press briefing
\non Tuesday.<\/p>\n
Vera said that the current declining trend in the Bank
\nIndonesia benchmark interest rate had pushed down interest rates
\nfor savings and deposits, thus reducing the cost of funds. The
\nbank's interest expenses declined to Rp 1.17 trillion from Rp
\n1.95 trillion.<\/p>\n
The bank's net interest margin improved to 7.9 percent in the
\nfirst half as compared to 4.4 percent during the same period last
\nyear.<\/p>\n
Danamon said that outstanding loans grew by 12.4 percent to Rp
\n23.8 trillion from Rp 21.2 trillion, mainly due to significant
\ngrowth in consumer loans, which increased by Rp 2.4 trillion, and
\ncommercial loans (including loans to small and medium
\nenterprises), which grew by Rp 753 billion.<\/p>\n
These two loan categories accounted for 67 percent of the
\nbank's total loan portfolio as of June this year.<\/p>\n
Other operating income, which includes fee-based income,
\ndropped to Rp 797 billion in the first half from Rp 856 billion
\nin same period last year due to losses resulting from a decline
\nin the value of marketable securities.<\/p>\n
Overall, however, the bank said that strong profitability had
\nimproved the bank's financial ratios, with capital adequacy ratio
\n(CAR) increasing to 33.3 percent from 24.2 percent, and return on
\nequity and return on assets increasing to 35.2 percent and 4.2
\npercent respectively.<\/p>\n
But the bank acknowledged that its non-performing loan ratio
\nhad increased to 3.2 percent from 1.5 percent previously, but
\nsaid this was mainly attributable to the bank's new policy of
\ndowngrading the collectibility of some loans, including
\nunrestructured non-performing loans purchased from the now-
\ndefunct Indonesian Bank Restructuring Agency (IBRA).<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bank-danamon-net-profit-jumps-by-79-1447899208",
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