"That means the bank`s loan to deposit ratio (LDR) is 103.5 percent."Jakarta (ANTARA News) - Publicly traded lender PT Bank Danamon Indonesia Tbk (BDMN) reported a 22 percent increase in net profit to Rp2.99 trillion on year in the first nine months of the year.
Henry Ho, the president of the country`s sixth largest lender, attributed the increase in profit to gain from "mass market" of small and medium scale businesses and wholesale.
Henry said the bank`s outstanding credits rose 16 percent to Rp113 trillion by the end of the third quarter of this year from a year earlier.
He said credits went to the mass market grew 14 percent to Rp64 trillion or 57 percent of the bank total outstanding credits.
In the third quarter of this year alone, credits for the small and medium business sector grew 25 percent to Rp17 trillion from a year earlier and credits for the wholesale sector rose 21 percent to Rp14 trillion, he added.
He said despite the surge in credit expansion, the bank succeeded in cutting its non performing loans (NPL) to 2.4 percent by the end of last month from 2.9 percent a year earlier.
Meanwhile, third party funds held by the bank, which is owned by Singapore`s Temasek Group, reached Rp88.3 trillion by the end of September.
Deposits made up the largest part or Rp49.3 trillion of the third party funds with giro funds and savings accounting for Rp13 trillion and Rp26 trillion respectively.
"That means the bank`s loan to deposit ratio (LDR) is 103.5 percent," Henry said.
He said he was not worried by the high level of LDR as the bank has strong capital with capital adequacy ratio of 18.7 percent, up from 17.8 percent earlier.
"We have sufficient level of liquidity to continue to push for growth. We manage liquidity based on the ratio of credits to financing, rather than credit ratio to third party funds," he said.
(Uu.AS/H-ASG/S012)
Editor: Priyambodo RH
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