Bank Danamon's net profit grows 38% to $259m

Most income statements improved except weak fee-based income.

Bank Danamon reports strong 2017 net profit of $259m (Rp3.7t), growing by +38% YoY, according to UOB Kay Hian. Except for weak fee-based income, most income statement items of the bank has improved.

Here's more from UOB Kay Hian:

In 4Q17, Bank Danamon’s net profit surged YoY on a one-off tax expense adjustment recorded in 4Q16. Qoq profit was lower though due to restructuring cost.

In 2017, the bank finally saw loan growth; +5% yoy excluding micro segment. The SME and consumer mortgage loan portfolios grew 10% yoy and 36% yoy respectively. BDMN was aggressive in mortgage lending to increase penetration in the consumer market and also to tap into cheap deposit collection. Enterprise loans grew 5% yoy. We are finally seeing growth in Adira Finance with a 2% yoy growth. Adira’s 2-wheeler financing grew 5% yoy vs a decline of 2% in 2016. 4-wheeler loans grew 6% yoy.

Absolute amount of NPL declined 9% yoy to Rp3.4t, and overall NPL declined to 2.8%, or 30bp lower than in 2016. This also brought down credit cost by 70bp to 2.8%. However, Bank Danamon managed to raise coverage ratio by 150bp to 119%.