PT Bank Danamon Indonesia Tbk Class A · IDX:BDMN
PT Bank Danamon Indonesia Tbk Class A — FY2005 Earnings Presentation
39 slides from PT Bank Danamon Indonesia Tbk Class A's earnings presentation, Mar 9, 2006
Slide 1: Full Year 2005 Results Analyst Briefing
Full Year 2005 Results Analyst Briefing J.W. Marriot Hotel Jakarta 9 March 2006 Disclaimer: This report has been prepared by P.T. Bank Danamon Indonesia Tbk indepentdently and is circulated for the purpose of general information only. It is not intended to the specific person who may receive this re
Slide 2: Highlights of FY 2005 results vs. FY 2004 results
Highlights of FY 2005 results vs. FY 2004 results • Loan growth of 22% to Rp. 36 trillion • Deposits growth of 16% to Rp. 47 trillion • Normalized Operating Income grew 21% • ROAA at 3.1% • ROAE at 24.2% Slide 2
Slide 3: Agenda
Agenda • 2005 Performance • Financial Results • Asset Quality • Business Updates • Strategic Priorities • Appendixes Slide 3
Slide 4: Income Statement Highlights
Income Statement Highlights Reduction in non recurring items resulted in the fall of Reported Profit Rp. billion FY 2004 FY 2005 UYoY 1Q05 2Q05 3Q05 4Q05 \ Net Interest Income 4,018 4,603 15% 1,122 1,145 1,206 1,130 Fee Income 691 1,080 56% 259 299 245 277 Operating Income 4,709 5,683 21% 1,381 1,44
Slide 5: Breakdown of non-recurring items
Breakdown of non-recurring items Extraordinary gains on sale of government bonds in 2004 and first part of 2005 as well as recovery of ex. IBRA loans are considered non-recurring Rp. billion \ FY2004 FY2005 UYoY 1Q05 2Q05 3Q05 4Q05 Gain on sales of 432 251 (42%) 89 106 55 - Government Bonds Recovery
Slide 6: Balance Sheet Highlights
Balance Sheet Highlights Rp. billion \ FY2004 FY2005 UYoY 1Q05 2Q05 3Q05 4Q05 Assets & Commitments 65,262 82,093 26% 68,279 74,324 76,158 82,093 Assets 58,821 67,803 15% 60,458 65,021 65,979 67,803 Loans (gross) 29,416 35,995 22% 30,337 33,434 35,729 35,995 Government Bonds 17,324 14,102 (19%) 18,03
Slide 7: Key Ratios
Key Ratios % FY2004 FY2005 UYoY 1Q05 2Q05 3Q05 4Q05 Net Interest Margin 1 8.6 8.9 0.3 9.2 9.0 8.8 8.5 Normalized Cost / 41.6 51.1 9.5 47.2 46.7 50.7 59.9 Income Loan / Deposit 72.5 80.8 8.3 76.4 77.4 82.4 80.8 Capital Adequacy 2 27.0 23.5 (3.5) 27.7 23.5 24.4 23.5 Normalized ROAA 2.1 1.8 (0.3) 2.5 1
Slide 8: Higher asset yield sustained interest margin
Higher asset yield sustained interest margin Steady increase in asset yields are due to improvement in asset composition and shifting loan mix to higher yielding loans Net Interest Income Rp.billion Asset Yield (%) 20.7 G Bonds 19.3 18.9 18.9 18.8 19.0 17.6 17.6 SEMM Adira Others 4,603 Cost of Funds
Slide 9: Fee Income
Fee Income Increase in fee income was largely driven by mark-to-market marketable securities and treasury activities Breakdown of Fee Income Rp. billion Rp. billion FY 2004 FY 2005 UYoY Non Credit Credit related fees 327 434 33% Credit Related 1,080 Cash management 267 257 -4% Mark to market (63) 19
Slide 10: Increase in operating expenses was mainly due to business expansion
Increase in operating expenses was mainly due to business expansion Expansion in DSP and Adira Finance accounted for 63% of the expense growth Operating Expenses Rp. billion Expense Growth Rp. bn %Total 2,909 DSP Expansion 352 37% 416 DSP Adira Finance 243 26% 1,963 542 Adira Finance IT 82 9% 64 299
Slide 11: Robust loan growth in consumer and mass market sectors
Robust loan growth in consumer and mass market sectors Outstanding Loans Rp. trillion 35.9 35.7 33.4 30.3 16% 14% Growth (YoY) Rp. bn % Total 29.4 16% 18% 13% 13% Corporate (1,323) (20%) 22% 14% 13% Commercial 1,465 22% 21% 11% 20% 21% SME 568 9% 23% 24% Consumer 2,871 44% 42% 42% 42% Mass Market 3,
Slide 12: High yielding automotive financing supports the growth in consumer loans
High yielding automotive financing supports the growth in consumer loans Consumer Loans Rp. trillion 14.2 14.9 14.9 5% 5% 12.9 5% 12.1 Growth (YoY) Rp. bn % Total 5% 19% 19% 20% 5% Credit Card 164 6% 22% 24% Housing (30) (2%) 25% 25% 26% 26% Car 388 14% 28% Motorcycle 2,349 82% 51% 51% Total 2,871 1
Slide 13: Encouraging results from Commercial Banking Business - Danamon Sahabat
Encouraging results from Commercial Banking Business - Danamon Sahabat SME and Commercial Loans Rp. billion 12,241 11,961 11,534 10,649 10,208 4,691 Commercial loans 4,718 4,560 3,226 3,770 SME loans 7,243 7,550 6,982 6,879 6,974 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Slide 13
Slide 14: Exposure to government bonds continues to decline
Exposure to government bonds continues to decline Government Bond Portfolio Rp. trillion % of Assets f Dec. Dec. U 30% 30% Variable Rate Rp. billion 2004 2005 YoY Fixed Rate Held to 25% 11,957 7,880 (34%) 22% 21% maturity Available for 5,078 6,060 19% 18.0 sale 17.3 16.0 14.8 14.1 Trading 290 162 (4
Slide 15: Deposits grew despite competitive market conditions
Deposits grew despite competitive market conditions Deposits grew by 16% and LDR is maintained at 80.8% in 2005 Customer Deposits Deposits by Segment As of December 31, 2005 Rp. trillion Time Deposits LDR Ratio Current Account & Savings 82% SME/Commercial 81% 14% Corporate 77% 17% 76% 73% 47.1 Mass
Slide 16: Loan expansion leads to lower Capital Adequacy Ratio
Loan expansion leads to lower Capital Adequacy Ratio Movement of Capital Adequacy Ratio % Dec. Dec. U Rp. billion 2004 2005 YoY Tier 1 Capital 6,399 7,933 24% 5.9 Tier 2 Capital 3,547 3,976 12% 27.0 (0.8) 23.5 Investments 889 1,144 29% (8.6) Total Capital after Investments 9,057 10,765 17% Risk Weig
Slide 17: Agenda
Agenda • 2005 Performance • Financial Results • Asset Quality • Business Updates • Strategic Priorities • Appendixes Slide 17
Slide 18: Diversified loan portfolio across economic sectors
Diversified loan portfolio across economic sectors Loans by Economic Sector Loans by Interest Rate As of December 31, 2005 As of December 31, 2005 Manufacturing General Trading & Variable Rate 17% Distribution 58% 27% Business Services 7% Transportation 2% Consumer Others 42% Fixed Rate 5% 42% Total
Slide 19: Loan's Collectibility and Breakdown of Non-Performing Loans
Loan’s Collectibility % Total 2.2% 2.6% 2.7% 2.9% 9.1% 10.8% 4.0% 8.6% 6.9% 8.4% Non-Performing Special Mention 89.1% 88.7% 88.7% 88.7% 86.6% Current Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Breakdown of Non-Performing Loans Rp. billion 1,177 20% 905 929 866 786 20% 37% 40% 45% Collectibility 5 27% 50% 22
Slide 20: Increase in special mention loans is due to growing mass market and consumer finance
Increase in special mention loans is due to growing mass market and consumer finance business Special mention loans concentrate on DPD 1 – 30 days Special Mention Loans Aging of Special Mention Loans Rp. billion % Total Corporate 61 - 90 Days 31 - 60 Days SME/Commercial 3,882 1 - 30 Days Consumer 9%
Slide 21: Non-performing loans declined due to strong loan recovery
Non-performing loans declined due to strong loan recovery Danamon managed to recover Rp. 447 billion of bad loans in 2005 Non-Performing Loans (NPL) NPL by Segments Rp. billion Rp. billion 1,177 929 4.0% e NPL Ratio 2.9% 19% 2.7% 2.6% 2.2% 65% Corporate / SAM* 1,177 9% Commercial 905 929 866 30% SME
Slide 22: Adequate provisions to cover non-performing loans
Adequate provisions to cover non-performing loans Decline in cost of credit in other parts of the business offset the increase in cost of credit in automotive financing and mass market business Normalized Cost Of Credit Loan Loss Provision / NPL Rp. billion % Other Businesses Specific Mass Market Ge
Slide 23: Agenda
Agenda • 2005 Performance • Financial Results • Asset Quality • Business Updates • Strategic Priorities • Appendixes Slide 23
Slide 24: Danamon Simpan Pinjam (DSP)
Danamon Simpan Pinjam (DSP) 2005: Good Results – Established Building Blocks – Solid Management Team Achievements in 2005 Number of DSP Units 739 − Grew loans from Rp 650 Consumer Mass Market 733 752 billion to Rp 3,651 billion Self-Employed Mass Market 509 − NPL at 2.1% at the end of 2005, below
Slide 25: DSP Self-Employed Mass Market
DSP Self-Employed Mass Market As loan portfolio matures, NCL of this business are projected to rise to a normal level of 5% SEMM’s NCL and NPL SEMM loans by size % Loans As of December 31, 2005 2.1 2.0 NPL NCL Rp.50 – 200 million > Rp.200 million 1.2 32% 13% 0.8 0.7 0.4 0.2 0.1 0.0- 0.0- 0.0- - - 1Q
Slide 26: Consumer auto financing business with Adira Finance
Consumer auto financing business with Adira Finance FY FY U 1Q 2Q 3Q 4Q Rp. billion 2004 2005 YoY 2005 2005 2005 2005 Financing Units 583,454 728,438 25% 167,739 192,567 196,029 172,103 Financing Volume 6,611 8,774 33% 1,998 2,415 2,409 1,952 O/S Receivables 7,284 10,173 40% 8,133 9,064 9,926 10,173
Slide 27: Motorcycle financing remains the main contributor of top line growth
Motorcycle financing remains the main contributor of top line growth Breakdown of Receivables Market Share of New Motorcycle % Total Receivables % of Units, YTD New MC Used MC New Car Used Car Others 12.5 1% 1% 1% 1% 1% 8% 9% 9% 10% 10% 10.9 10.9 10.6 10.5 13% 14% 16% 18% 18% 6% 6% 7% 7% 7% 65% 64%
Slide 28: Higher losses on repossessed assets resulted in higher net credit losses
Higher losses on repossessed assets resulted in higher net credit losses Repossessed Assets 37% Rp. billion Loss on repo. assets 31% 30% 30% 28% 24% 24% 25% 24% 24% 21% 21% 2.0% 2.0% 2.0% 1.9% 1.9% 1.8% 1.6% 1.6% Repo. assets as % receivables 1.4% 207 1.3% 1.3% 198 195 201 1.2% 184 170 136 142 121 1
Slide 29: Non-performing loans and loan write-off of automotive consumer financing business
Non-performing loans and loan write-off of automotive consumer financing business Non-Performing Loans Write-off as a % receivables 4.1% Rp. billion 2.1% 2.2% 2.7% 2.4% 2.7% 2.1% 1.2% 1.2% 1.1% 1.4% 1.0% Non-performing loans ratio 1.8% 1.7% 1.6% 1.5% 1.5% 1.4% 1.4% 1.2% 1.3% 1.2% 184 1.1% 1.2% 173 1
Slide 30: The implementation of new policies has impacted credit losses in automotive financing
The implementation of new policies has impacted credit losses in automotive financing business A new policy to write off past due receivables over 180 days has been implemented since June 2005 and a provision for loss on repossessed assets since August 2005 Year to Date Net Credit Losses (NCL) % of
Slide 31: Latest Updates
Latest Updates We plan to pay out 50% of our 2005 profits as dividend. We 2005 Dividend will seek approval from our shareholders in the upcoming AGM Danamon is in the process of negotiating with IFC and other Structured Funding foreign institutions to obtain long-term loans. These loans will be used
Slide 32: Agenda
Agenda • 2005 Performance • Financial Results • Asset Quality • Business Updates • Strategic Priorities • Appendixes Slide 32
Slide 33: Strategic Priorities
Strategic Priorities Continue investing in high margin businesses and products: • Adira • Mass market Maximise Net Interest Margin • Credit cards • Insurance • White goods financing Improve our funding platform: • Distribution Improve funding • Products franchise • Build a sales and customer centric
Slide 34: Strategic Priorities (continued)
Strategic Priorities (continued) Be a low cost Reduce substantially our unit transaction cost producer Build a world Reliable / scalable / flexible technology platform class technology Become an Develop a plan to attract and retain best talent Employer of Choice Slide 34
Slide 35: Agenda
Agenda • 2005 Performance • Financial Results • Asset Quality • Business Updates • Strategic Priorities • Appendixes Slide 35
Slide 36: Danamon Share Price performance
Danamon Share Price performance Share price performance vs JCI and JAKFIN Shareholding Structure As of December 31, 2005 1.2 Asia Financial Morgan Stanley 1.1 Indonesia Securities Ltd. 69.6% 6.8% 1.0 eJCI eBCA eDanamon 0.9 eBRI eJAKFIN 0.8 eMandiri Public 0.7 (ownership interest below 5%) 23.6% 0.6
Slide 37: Credit Ratings
Credit Ratings Rating upgrades during 2005 reflect Danamon’s improved business and financial profile Rating Agencies Rating / Outlook Standard & Poor’s Long-term and Short-term Local Currency BB- / Stable / B November 2005 Long-term and Short-term Foreign Currency BB- / Stable / B Subordinated Debt
Slide 38: Awards & Accolades
Awards & Accolades Global Finance Award 2005: The Best Trade Finance Bank and Provider 2005 in Indonesia MRI and InfoBank Award 2005: First rank for service excellence Call Centre Award 2005 for Service Excellence: The Best Call Centre for Banking category Global Finance Best Emerging Market
Slide 39: Thank You
Thank You Investor Relations Bank Danamon Menara Bank Danamon, 6th Floor Jl. Prof. Dr. Satrio Kav. E4 No.6 Mega Kuningan, Jakarta 12950 Phone: +62 21 5799 1001-03 Fax: +62 21 5799 1445 www.danamon.co.id
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