REPUBLIKA.CO.ID, JAKARTA -- Publicly traded lender PT. Bank Danamon Indonesia Tbk reported a 8 percent fall in net profit to Rp2.3 trillion in 2015 from Rp2.6 trillion in 2014.

A director of the bank, Vera Eve Lim attributed the decline in net profit to poorer performance of its finance subsidiary,Adira Finance, which offers credit to buy motor vehicles.

"Motor vehicle financing accounts for 30 percent of our portfolio, therefore, the slump that hit the market of motor vehicles weighed on our business," Vera sad here on Thursday.

She said financing by Adira Finance shrank 9 percent in 2015 on a 16 percent fall in car sales and 18 percent decline in motorcycle sales.

In addition, the bank also posted a sharp decline of 23 percent in micro credits by its unit of Danamon Simpan Pinjam (DSP) to Rp14.4 trillion from 19 trillion in 2014.

"Negative growth was recorded in the two lines of business having impact on our credit expansion," Vera said.

She said sharia credits and small and medium enterprises (UKM), however, grew 27 percent and 5 percent respectively.

Corporate and commercial credits totaled Rp17.7 trillion and Rp16 trillion respectively.

Altogether the bank's outstanding credit declined 7 percent to Rp129.4 trillion in 2015 from Rp139.1 trillion in 2014.

With the shrinking credits, the bank's net interest margin also fell from 8.4 percent to 8.2 percent , and its non performing loan (NPL) ratio rose to 3 percent from 2.3 percent gross.

Fee base income recorded by the country's sixth largest bank fell 3 percent to Rp3.8 trillion from Rp3.9 trillion and its operating income fell 1 percent to Rp17.4 trillion from Rp17.6 trillion.

Its cost of credit provision rose to Rp4.9 trillion from Rp3.7 trillion.

The bank also recorded a slowdown in funding . Third party funds held by the bank reached Rp139.7 trillion by the end of 2015 down 4 percent from Rp145.7 trillion a year earlier.

One indicator of efficiency in the banking operation is an improvement in cost ratio to income - down to 51.7 percent from 55.7 percent in 2014.

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