JAKARTA: Publicly listed lender Bank Danamon, the nation’s sixth-largest bank by assets, is still experiencing the impact of the country’s weak demand in the automotive and micro sectors as its net profit fell by 10 percent in the third quarter.
The bank, which is owned by Asia Financial, a unit of Singapore’s Temasek, booked Rp 1.89 trillion (US$138.9 million) in profits during the January-September period this year, down from Rp 2.1 trillion in the same period last year.
The bank’s net interest income saw flat growth to Rp 10.19 trillion as of September this year, from Rp 10.17 trillion in the same period last year.
Danamon finance director Vera Eve Lim said the bank’s lending had declined 4 percent to Rp 133.6 trillion as of September this year, from Rp 138.6 trillion in the same month of 2014, owing to the ongoing slump in car and motorcycle sales nationwide.
Vera said the bank was very dependent on the automotive industry as 36 percent of its loans were contributed by its auto-financing subsidiary, Adira Finance, as of September.
“The country’s sales of two-wheelers and four-wheelers decreased 19 percent and 21 percent, respectively, as of September, of course this affected loans for vehicles and consumption goods,” Vera said in a press conference on Monday.
Loans to the automotive sector and white goods financing through its subsidiary, Adira Finance, dropped 7 percent to Rp 47.6 trillion as of September this year, from Rp 51.1 trillion in the same period last year.
Adira Finance president director Willy S. Dharma said the company projected that its new financing would reach Rp 30.5 trillion by the end of this year, a decrease of 5 percent year-on-year (yoy).
“We carried out some initiatives to compensate the drop by switching more of our financing to used motorcycles and cars, so that our decline was not heavy compared to the industry,” Willy said at the event.
Vera said Danamon had also seen a decline in micro-segment loans, which dropped 18 percent to Rp 16.1 trillion as of September, from Rp 19.6 trillion in the same period last year.
According to Vera, the ongoing drop in global commodity prices has also impacted the bank’s corporate debtors, especially in coal and mining industries, causing its gross non-performing loan (NPL) increase to 3 percent as of September, from 2.4 percent in the same period last year, adding that “we also saw increasing NPL in Danamon Simpan Pinjam – the lender’s micro business”.
Meanwhile, state-owned lender Bank Tabungan Negara (BTN) posted a 61.8 percent jump in profit as of September aided by robust demand for housing as part of the government’s “one-million houses” construction program.
BTN saw its profit jump to Rp 1.22 trillion from Rp 755 billion as of September in the same period last year, while its outstanding loans stood at Rp 131.58 trillion, up 19.04 percent yoy.
“The government’s program has been going well, and it has helped BTN’s performance and aided its growth,” BTN president director Maryono told a press briefing on Monday, adding that the bank was the government’s main partner on the program.
As of September, the bank saw realization of total housing loan (KPR) amount to Rp 17.9 trillion for 122,675 houses.
It also has financed the construction of 372,393 houses, which is part of the government’s program. It was said that home construction was “on track” as it had reached 86.4 percent of its target of financing 431,000 houses this year.
BTN, whose core business is home financing, has also channeled Rp 40.08 trillion or almost a third of its housing loans to subsidized homes and Rp 51.53 trillion for non-subsidized homes.
With the increasing outstanding loans, the bank also kept its NPL at 3.18 percent, down from 3.63 percent last year.
Maryono said the bank was optimistic that its NPL would remain under 4 percent until the end of the year, while it had also jacked up its lending growth target to 17-19 percent from 14-16 percent previously.
“When we set the target previously, we did not take into account the one million houses program,” he said.
The growth is also supported by its net interest income, which jumped to Rp 4.96 trillion in the third quarter or a 24.43 percent increase from the same period last year, as well as its third-party funds (DPK), which rose to Rp 124.47 trillion or 22.22 percent from last year.