Danamon focuses on organic growth for consolidation<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
To meet the central bank requirement for banks to boost their
\ncapital within five years, Bank Danamon is focusing on expanding
\nits business rather than looking at merging with or acquiring
\nother banks.<\/p>\n
Danamon president director Sebastian Paredes said the bank
\nwould focus on organic growth to meet Bank Indonesia's new
\nIndonesian Banking Architecture guidelines, designed to
\nstreamline the number of banks within five years by requiring
\neach bank to have between Rp 100 billion (US$10.23 million) and
\nRp 50 trillion of capital.<\/p>\n
\"There are many ways to grow, including through acquisitions
\nor organic growth. We will focus on organic growth because we are
\nconfident of our outlook. Our capital adequacy ratio (CAR) of
\n23.5 percent is one of the highest in the industry,\" he said
\nduring the bank's first half performance expose on Monday.<\/p>\n
The bank reported a net income of Rp 1.28 billion in the first
\nsemester of 2005, an increase of 17 percent from Rp 1.1 trillion
\nin the first half of last year.<\/p>\n
The increase was driven by improvements in productive assets,
\ncombined with the widening of its net interest margin from 8.2
\npercent to 9.1 percent.<\/p>\n
However, Paredes said Danamon would look at the possibility of
\nmerging with or acquiring other banks if such a move would
\nimprove its strategic position.<\/p>\n
\"When the time comes, we will consider only those acquisitions
\nthat will allow us to expand our geographical network, expand our
\ncustomer segments and support our objective of becoming a leading
\nfinancial institution in the country,\" he said.<\/p>\n
The bank's chief financial officer, Vera Eve Lim, said that in
\nthe first six months, Danamon expanded its business through its
\nAdira Finance, Dana Simpan Pinjam (DSP) and Syariah units,
\nboosting its operational expenses by 40 percent.<\/p>\n
She said Adira Finance generated a net profit of Rp 233
\nbillion in the first half, while DSP generated Rp 2.5 trillion.<\/p>\n
This business expansion, she said, led to the bank's CAR
\ndecreasing from 31.1 percent as of the first half of 2004 to 23.5
\nas of the first half of 2005.<\/p>\n
Vera said the bank would not hesitate to review its business
\nunits that were not vital to the bank's objectives, including its
\ninvestment in the Korean Exchange Bank Danamon (KEBD).<\/p>\n
\"We once owned 15 percent of KEBD but it was not part of our
\nstrategic position. We sold 14 percent of the shares last week
\nand the remaining 1 percent will be sold in the near future,\" she
\nsaid. (006)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/danamon-focuses-on-organic-growth-for-consolidation-1447893297",
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"sponsor": "Okusi Associates",
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