PT Bank Danamon Indonesia Tbk Class A · IDX:BDMN

PT Bank Danamon Indonesia Tbk Class A — Bank Danamon Indonesia — FY2006 Earnings Presentation

30 slides from PT Bank Danamon Indonesia Tbk Class A's earnings presentation, Feb 8, 2007

  1. Slide 1: Analyst Briefing Full Year 2006 Results

    Analyst Briefing Full Year 2006 Results JW Marriot Hotel, Jakarta 8 February 2007 Disclaimer: This report has been prepared by P.T. Bank Danamon Indonesia Tbk independently and is circulated for the purpose of general information only. It is not intended to the specific person who may receive this r

  2. Slide 2: Agenda

    Agenda • Executive Summary • Financial Results • Asset Quality • Business Update • Appendix Slide 2

  3. Slide 3: Executive Summary

    Executive Summary • Operating environment for the most part of 2006 was very challenging marked by weak consumer purchasing power, slower economic growth and high inflation and interest rates • Total loans grew by 17% driven by the strong growth in mass market and SME/Commercial businesses • Total d

  4. Slide 4: Agenda

    Agenda • Executive Summary • Financial Results • Asset Quality • Business Update • Appendix Slide 4

  5. Slide 5: Highlights of Income Statement

    Highlights of Income Statement Rp. billion FY 2005 FY 2006 UYoY 1Q06 2Q06 3Q06 4Q06 UQoQ \ Interest Income 8,129 10,896 34% 2,519 2,676 2,800 2,901 4% Interest Expense (3,526) (5,251) 49% (1,294) (1,283) (1,325) (1,349) 2% Net Interest Income 4,603 5,645 23% 1,225 1,393 1,475 1,552 5% Normalized Fee

  6. Slide 6: Highlights of Balance Sheets

    Highlights of Balance Sheets Rp. billion FY 2005 FY 2006 UYoY 1Q06 2Q06 3Q06 4Q06 UQoQ \ Total Assets 67,803 82,073 21% 70,758 74,531 77,250 82,073 6% Loans (gross) 1 36,757 42,986 17% 36,584 38,625 40,962 42,986 5% Government Bonds 14,102 18,702 33% 16,569 17,153 16,249 18,702 15% Total Deposits 47

  7. Slide 7: Key Ratios

    Key Ratios % FY 2005 FY 2006 UYoY 1Q06 2Q06 3Q06 4Q06 UQoQ \ Net Interest Margin 1 8.9 9.3 0.4 8.4 9.2 9.4 9.9 0.5 Normalized Cost / 51.1 48.9 (2.2) 50.3 46.0 47.7 50.3 2.6 Income Loan / Deposit 80.8 75.5 (5.3) 78.5 75.6 77.8 75.5 (2.3) Capital Adequacy 2 22.7 20.4 (2.3) 26.3 22.9 21.1 20.4 (0.7) No

  8. Slide 8: Rising asset yield improved the net interest margin despite the higher cost of funds

    Rising asset yield improved the net interest margin despite the higher cost of funds Breakdown of Net Interest Income Rp. billion Earning Assets Yield (%) b Mass Market 16.5 16.7 16.6 16.5 Adira Finance 15.5 13.8 13.9 14.1 Other Businesses 5,645 8.3 8.9 8.4 8.1 7.7 16% 5.3 5.6 6.1 4,603 c 12% Cost o

  9. Slide 9: Higher credit related fees and consolidation of Adira Insurance drove the increase in fee income

    Higher credit related fees and consolidation of Adira Insurance drove the increase in fee income Credit card and loans contributed to the increase in credit related fees Normalized Fee Income Rp. billion Rp. billion 2005 2006 UYoY Non Credit Related Credit Related 1,358 Credit related fees 426 599 4

  10. Slide 10: Increase in operating expenses partly due to DSP expansion and the consolidation of Adira Insurance

    Increase in operating expenses partly due to DSP expansion and the consolidation of Adira Insurance Normalized Operating Expenses Rp. billion 3,428 Mass Market 2,909 486 Growth Rp. billion % 109 Adira Insurance & 403 Quantum Mass Market 83 21% 639 Adira Finance 548 Adira Finance 91 17% Adira Insuran

  11. Slide 11: Cost of credit rose due to the maturing mass market portfolio and higher NPL

    Cost of credit rose due to the maturing mass market portfolio and higher NPL in several businesses Normalized Cost Of Credit Rp. billion NPL Ratio T Mass Market 3.6% 3.5% Adira Finance 3.4% 3.3% Other Businesses 1,332 2.9% 2.7% 2.6% 435 22% 2.2% 343 329 814 286 291 263 2% 45% 121 72% 33% 78 26% 2005

  12. Slide 12: Loans growth driven by mass market and SME/Commercial businesses

    Loans growth driven by mass market and SME/Commercial businesses Increased proportion of higher yielding loans from Adira and Mass Market Outstanding Loans Rp. billion 42,986 40,962 38,625 UQoQ UYoY 36,757 36,584 15% 16% Growth 14% Rp.bn % Rp.bn % 14% 13% 13% 13% 13% Corporate (339) (5%) 923 18% 13%

  13. Slide 13: High motorcycle loan growth offset by slower growth in housing loans

    High motorcycle loan growth offset by slower growth in housing loans Breakdown of Consumer Loans Rp. billion 16,763 Motorcycle and car loans grew by 8% and 6%, 16,167 15,685 15,286 15,513 respectively, despite a sharp drop in industry 8% 7% sale units in 2006 9% 7% 7% 7% 5% 7% 5% 5% 7% 7% UQoQ UYoY

  14. Slide 14: Government bonds accounted for 23% of assets

    Government bonds accounted for 23% of assets Breakdown of Government Bonds Portfolio Rp. billion Variable Rate Fixed Rate The average duration of government Bonds as % of Assets bonds holdings is 3.4 years as of T 23% 23% 23% December 31, 2006 as compared to 1.8 21% 21% years a year earlier 18,702 1

  15. Slide 15: Strong funding growth to support loan expansion

    Strong funding growth to support loan expansion Structured funding to fund high yielding assets and improve asset-liability mismatch Breakdown of Interest Bearing Funds Rp. billion Loan / Funding 67% d Structured Funding 64% Time Deposits 63% 63% 62% Savings Current Account 67,918 63,561 61,806 57,8

  16. Slide 16: Adequate capital to support business growth

    Adequate capital to support business growth Capital Adequacy Ratio stood at 20.4% at the end of 2006 Movement of Capital Adequacy Ratio % Rp. billion Dec.05 Dec.06 UYoY Tier 1 Capital 7,933 8,369 5% 22.7 0.3 Tier 2 Capital 3,976 3,702 (7%) (0.1) 20.4 Investments 1,144 1,096 (4%) (2.5) Total Capital

  17. Slide 17: Agenda

    Agenda • Executive Summary • Financial Results • Asset Quality • Business Update • Appendix Slide 17

  18. Slide 18: Diversified loan portfolio across economic sectors

    Diversified loan portfolio across economic sectors Fixed rate loans are mainly comprised of high yielding consumer auto financing and mass market loans Loans by Economic Sector Loans by Interest Rate As of December 31, 2006 As of December 31, 2006 General Trading & Manufacturing Variable Rate Distri

  19. Slide 19: Loan's Collectibility

    Loan’s Collectibility % Total 2.6% 3.4% 3.6% 3.5% 3.3% 10.8% 10.5% 10.3% 9.4% 9.8% Non-Performing 86.6% 87.1% Special Mention 86.1% 86.1% 86.9% Current Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Breakdown of Non-Performing Loans Rp. billion 1,337 1,372 1,365 1,223 929 40% 55% 59% 63% 50% Collectibility 5 28

  20. Slide 20: Higher special mention loans due to growing mass market and consumer auto financing businesses

    Higher special mention loans due to growing mass market and consumer auto financing businesses Special mention loans concentrate on DPD 1 – 30 days Special Mention Loans Aging of Special Mention Loans Rp. billion % Total Corporate 61 - 90 Days SME/Commercial 31 - 60 Days Consumer 1 - 30 Days 0 Days

  21. Slide 21: Adequate loan loss provision to cover non-performing loans

    Adequate loan loss provision to cover non-performing loans Non Performing Loans by Segments Loan Loss Provision / NPL 1 Rp. billion % 1,365 Specific General 31% 146 Corporate 142 929 136 131 7% Commercial 115 19% SME 9% 85 30% 94 Mass Market 90 88 30% 72 Consumer - Adira 8% 13% Consumer 18% 8% 61 43

  22. Slide 22: Agenda

    Agenda • Executive Summary • Financial Results • Asset Quality • Business Update • Appendix Slide 22

  23. Slide 23: Danamon Simpan Pinjam (Mass Market)

    Danamon Simpan Pinjam (Mass Market) DSP Units ƒ An additional 75 units of DSP Consumer Mass Market (CMM) SEMM were opened in 2006, Self-Employed Mass Market (SEMM) bringing total DSP SEMM to 693 733 752 739 729 734 766 765 units 509 ƒ Mass market loans grew by Rp 264 2,578 billion or 71% to Rp 6,228

  24. Slide 24: Consumer auto financing business with Adira Finance

    Consumer auto financing business with Adira Finance Rp. billion 2005 2006 UYoY 1Q06 2Q06 3Q06 4Q06 UQoQ New Financing Units 728,438 726,908 (0%) 134,024 159,039 212,331 221,514 4% New Financing Volume 8,774 8,458 (4%) 1,513 2,018 2,454 2,474 1% O/S Receivables 10,173 11,227 10% 9,919 10,124 10,710 1

  25. Slide 25: Improvement in inventory management resulted in lower losses on repossessed assets

    Improvement in inventory management resulted in lower losses on repossessed assets Repossessed Assets Rp. billion 37% Loss on repossessed assets 36% 35% 33% 34% T 30% 30% 30% 28% 26% 26% 25% 25% 2.3% 2.3% 2.2% 2.1% 2.0% 2.0% 1.9% Repo. assets as % receivables 1.6% T 233 234 219 207 200 207 1.3% 188

  26. Slide 26: Declining non-performing loans and write-off as a result of improvement in risk management

    Declining non-performing loans and write-off as a result of improvement in risk management Non-Performing Loans Rp. billion Net Write-off as a % receivables 3.4% 2.9% T 2.6% 2.7% 2.6% 2.7% 2.4% 2.4% 2.4% 2.2% 2.1% 2.2% 1.8% 1.8% 1.7% 1.7% 1.7% 1.6% 1.5% Non-performing loans ratio 1.4% T 175 175 1.3%

  27. Slide 27: Agenda

    Agenda • Executive Summary • Financial Results • Asset Quality • Business Update • Appendix Slide 27

  28. Slide 28: Danamon's shares

    Danamon’s shares Daily share price and trading volume Shareholding Structure BDMN IJ As of Dec. 31, 2006 Daily trading volume in thousands Share price in Rupiah 30,000 7,000 Asia Financial Public (Indonesia) 30.75% 69.25% 25,000 6,000 20,000 5,000 15,000 4,000 10,000 3,000 5,000 2,000 Asia Financial

  29. Slide 29: Danamon's Credit Ratings

    Danamon’s Credit Ratings Standard & Poor’s Long-term / Short-term Local Currency BB- / Stable / B Long-term / Short-term Foreign Currency BB- / Stable / B Subordinated Debt B / Stable Long-term / Short-term Bank Deposit B2 / Positive / Not Prime Moodys Bank Financial Strength D- / Stable Subordinate

  30. Slide 30: 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

Bank Danamon Indonesia — FY2006 Earnings Presentation on 6ix