Ladies and gentlemen, I would like to welcome and thank our respected investors and analysts for joining PT Bank Danamon Indonesia Tbk's investor and analyst briefing fiscal year 2025 financial results. Today, I will be your host, and please allow me to quickly introduce myself. My name is Marcella Tanamas, Investor Relations of Bank Danamon. I would like to welcome and introduce Danamon's Board of Directors, Chief Financial Officer, and also the President Director of our subsidiary, Adira Finance, who have joined from their respective locations. We'd like to welcome [Non-English content] Daisuke Ejima, President Director.
Thank you.
[Non-English content] Honggo Widjojo Kangmasto, Vice President Director.
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[Non-English content] Herry Hykmanto, Syariah and Sustainability Finance Director.
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Ibu Rita Mirasari, Compliance Director.
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[Non-English content] Dadi Budiana, Risk Management Director.
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[Non-English content] Thomas Sudarma , Enterprise Banking and Financial Institution Director.
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[Non-English content] Jin Yoshida, Global Alliance Strategy Director. Ibu Yenny Siswanto, IT and Digital Director.
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Ibu Theresia Adriana Widjaja, Chief Financial Officer.
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[Non-English content] Made Susila, President Director of PT Adira Dinamika Multi Finance Tbk.
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We also would like to welcome Danamon's board of management who have joined from their respective locations. Ladies and gentlemen, before we present the detail of PT Bank Danamon Indonesia Tbk's financial results for fiscal year 2025, I would like to invite Bapak Daisuke Ejima as our President Director to deliver his remarks, highlighting the progress of our key strategies. Ejima, the screen is yours.
Thank you, Marcella. Good evening. Thank you for all investors and analysts for joining the Danamon reporting with regards to the 2025 financial performance. As we all know, the circumstance wasn't that easy. However, today, I would like to deliver several good news about our last year's performance. I would like to use the slides. So if you go to page three. Firstly, macroeconomic data. Generally, I expect domestic momentum will get strengthened in 2026 from investment recovery, fiscal expansion, and ample domestic liquidity as major catalyst. Consumer sentiment also gradually recovering as job prospects improving and manufacturing expansion continue. But Indonesia lowered the interest rate 125 basis points last year, which is starting to transmit into the real sector through higher lending growth. In this year, in conclusion, we expect room for further growth in economy.
We also expect some further BI rate cut on the back of stable domestic inflation and potential future growth. Next page. The page summarizes the three strategic direction from 2024 until 2026. We have initiative and strategic theme of growth as one financial group. We are strengthening the capabilities surrounding Danamon based on this direction, and we built the foundation to support sustainable growth across all business segments. In parallel, we continue to optimize our operations through ongoing investment in IT and digital infrastructure, people, planning, and branch network, including ATM. If you see the right side top, we are pleased to deliver the result of NPAT was higher than previous year by 21%, excluding Mandala Finance acquisition impact. Including this after restatement, a +14% year-on-year growth. Consolidated loans grew by 9%, and funding also increased by 16% year-on-year basis.
We continue to accelerate our ecosystem-led approach and strengthen group collaboration across all regions. Further details of financial performance will be discussed and delivered by our CFO later in this agenda. Page five, please. There are several strategic themes that we focused on last year. Firstly, left side top, automobile and retail financing synergy. We expanded the auto financing across through the KPN PRIMA product, which is a special program for Adira loan financing through our Danamon branch customer. It delivered 41% year-on-year growth in loan disbursement, reaching IDR 2.1 trillion in last year. Left side bottom, we also accelerated the ecosystem approach across all regions. Each region focused on cultivating unique ecosystem in that area/cities, including F&B, retailers, and local communities and foundations. It generated 4% year-on-year growth in consumer and SME granular funding, reaching to IDR 97 trillion as of last year, December.
Right side top, education ecosystem also got strengthened through the partnership with leading education institutions across the region. We also try to capture the payment opportunities through providing the cash management solution. We achieved strong growth in funding, +26% year-on-year, and number of accounts, the same, +27% year-on-year. Haji and Umrah ecosystem also expanded the customer base through collaboration with BPK association and travel agencies. It recorded a positive funding traction +6% year-on-year and 43% growth in terms of a number of accounts. We expect further growth in 2026. Next page. The page is illustrating the approach that MUFG Indonesia, we are enhancing our collaboration. Financial conglomeration and Adira Finance and Mandala Finance merger was described on the top of this page. In last year, July, Danamon received OJK's approval of the operational financial holding company setup for MUFG Indonesia.
Effective last year, October 1st, Adira Finance merged with Mandala Finance, and now Adira Finance is the surviving entity, expanded the territory and also the coverage. These developments strengthen the governance, integration, and collaborations across the group members, enabling Danamon and groups to deliver more holistic financial solutions to all segments of customers. Left side bottom, we also enhanced the venture fund supporting activities. Danamon supports the Indonesia digital ecosystem through strategic investment via recent participation in Japan Sematic Fund. It reinforce Danamon a strong commitment as a subsidiary of MUFG Group that we will continue to contribute to the sustainable economic growth in Indonesia, and also would like to support the expansion of the digital economy. Page seven. The page is illustrating the continuous effort in core business and foundation building for our long-term and sustainable growth.
Our mobile application, D-Bank PRO, we upgraded capabilities to the next level through agile approach in last year, July, including a new interface, 360-degree portfolio dashboard, and 24 by 7 FX transaction. We also improved the digital experience, which drove the higher customer engagement in terms of transaction volume and value. This year, we are also continuing the enhancement, including the unified onboarding for group partners, new payment feature, and SME mobile application capability. More to come in this year. We also started to adopt Gen AI, accelerating the new technology development. This is now inevitable tool for all of our branch members to support our customer needs. Danamon Cash Connect, which is the cash management solution for corporate, also got enhanced during the last year with new features, including multi-currency cross-border transfers, supply chain invoice collection, and bank guarantee-based transaction limits, et cetera.
This also resulted in a strong attraction across the user base. Lastly, right side bottom, our branch network. We continue to strengthen the local and regional activities. We rolled out the new branch concept since three years ago. Now we finished 120 branches that transformed already so far by the end of last year. We increased the community engagement across regions, supporting sustainable lending and funding growth. This is a high-level snapshot of our key activities and financial performance last year. I would like to hand it over to our CFO, [Non-English content] Theresia Adriana Widjaja, for further details in financial performance.
Thank you, Ejima . Good afternoon, everyone. Today, I will walk you through the Danamon full year 2025 financial performance and key driver behind the result. Before we begin, I would like to highlight that full year 2024 figures have been restated following the implementation of PSAK 38, related to the merger between Mandala Finance and Adira Finance effective October 1st, 2025 as a business combination under common control. Therefore, full year 2024 is presented as if the merger had occurred since Mandala Finance was under MUFG group common control using the pooling of interest method. This restatement is applied solely for the comparative purposes, and there is no economic benefit changes due to this restatement. Next, please.
On this slide, we present our key financial highlights on a like-for-like basis, excluding MFIN, Mandala Finance, to reflect the core performance without the MFIN impact, while the rest of the deck align with the published consolidated financial statement and the full year 2024 restatement. Starting with the balance sheet. Total assets grew 13% year-on-year to IDR 273.6 trillion, supported by 9% loan growth to IDR 206.9 trillion, higher government bond holding by 14% year-on-year to IDR 21.4 trillion, strengthening the liquidity. On the funding side, total funding increased 15% year-on-year to IDR 196.2 trillion, driven by asset growth of 18%, listing funding mix quality. Time deposit and long-term funding also grew in line with the balances expansion. Equity increased 13% year-on-year to IDR 57.8 trillion, maintaining a solid capital position.
If you look to the income statement on the right side, the operating income grew 3% year-on-year, to IDR 19.5 trillion, supported mainly 10% growth in non-interest income, while interest income was broadly stable. Cost discipline maintained intact with the operating expense up 3% year-on-year, while cost of credit declined 18% year-on-year, driving 27% growth in operating profit and NPAT up 21% year-on-year to IDR 3.9 trillion. Next, please. As mentioned before, starting on the next slide, I will explain the rest of the deck align with the public consolidated finance statement and the full year 2024 restatement. Next, please. On the full year 2025 was a year where we elevated returns through strong funding and prudent lending.
If you see on the top left bar chart showing total lending including trade finance grew 9% year-on-year, supported by sustainable lending growth, 12% across wholesale in the FI and SME, 4% across retail portfolio, consumer and Adira Finance. On the bottom left bar chart showing the healthy asset quality with loan at risk improved by 2.3% year-on-year to 8.3%, and has consistently improved since last year with NPL coverage stood at 280.7%, while gross NPL improving from 1.9% to 1.7%. On the funding side, remain ample. As we can see here on the top right bar chart, grew by 16% year-on-year with continued improvement in CASA, CD, mix and granular funding. This translates into higher operating income by 5%, PPOP grew by 4% and stronger profitability, whereby the NPAT increased to 14% year-on-year. Next, please.
On the balance sheet showing our total assets grew 11% year-on-year to IDR 275.7 trillion, from both loan and trade finance, government bonds, which grew by 9% and 14% respectively. To support our loan growth, our funding grew by 13%, supported by strong CASA grew by 18%, CD grew by 14%, while borrowing and long-term funding in Adira declined by 3% in line with the funding mix in Adira Finance. Next page, please. On the profit and loss, Danamon recorded consolidated NPAT IDR 4 trillion grew by 14% year-on-year, supported by improved operating income, 5% growth supported by both interest and non-interest income. Also better asset quality with lower cost of credit by 10% year-on-year. Please note the restatement impact on the MFIN business for full year 2025 is reflected in Q4 2025.
Next page. Our key financial ratio increase in loan risk coverage by 560 basis points despite lower CoC. Risk-adjusted NIM better by 3 basis points to 5.5% compared to last year. Cost to income year-on-year increased by 40 basis points to 55.3%. Compared to Q4 2024, our CASA ratio is better by 90 basis points, from 41.6% to 42.5%. Our RIM lower by 60 basis points from 97.5% to 96.9%. We have ample liquidity. Healthy of our asset quality showing better NPL growth by 20 basis points year-on-year to 1.7%, and loan losses coverage stood at 280.7%.
Return on assets was stable year-on-year at 1.6%, while return on equity improved 60 basis points to 8.3%, while our CAR is strong at 25.4%. Next page. This is to show our funding liquidity and capital. We have strong capital and ample liquidity to support business growth. As explained in the beginning, our general funding increased 4%, mainly from CASA.
In terms of liquidity, as shown on the right upper table, LCR higher 14.1% to 158.9%, while NSFR and LDR are steady. Our capital structure is strong, almost 100% from Tier 1 capital, refer to the left bottom table, with strong capital at 23.8% bank only and 25.4% consolidation. Refer to the right bottom table. Next page. As mentioned earlier, our loans and trade finance grew by 9% year-on-year, supported by double-digit growth in EBFI and consumer by 14% and 10% respectively, while SME and Adira grew 7% and 2% respectively. On the top right table showing lending composition which largely from EBFI, around 47%, followed by Adira Finance 29%, SME and consumer around 13% and 11% respectively. Lending by sector mainly dominated in households, trading, manufacturing, financial intermediaries and agriculture, forestry and fisheries, while lending by purpose, mainly on working capital loans around 47%. Next page.
On Adira Finance, industry trend on two-wheeler in 11 month 2025 increased to 0.4%, while Adira Finance sales performance from 11 month 2024- 11 month 2025 was increased to -3.6%. Industry trend of four wheels in 11 month 2025 declined to -9.9%, while Adira Finance sales performance from 11 month 2024- 11 month 2025 was increased to -9.5%, which is below with the industry trend. New financing of Adira Finance year-on-year was stable at IDR 43.1 trillion, although the auto industry was weakening. In terms of the outstanding loan, the total loan grew 2% year-on-year, mainly in two-wheeler auto loans grew by 4%, NPL grew by 5%, which partially offset with the lower four-wheeler auto loans by 2%. Next page. On asset quality, consistent improvement in NPL and SM ratio by maintaining the healthy asset quality as reflected in the Danamon ratio.
Better NPL and SM ratio refer to the top left table. Better loans at risk refer to the bottom left table below. We also maintain NPL coverage ratio at 280.7% in December 2025, while on the CoC of the average loan relatively higher 50 basis points year-on-year, whereby the composition of CoC was 9% from BDI while 91% from Adira Finance. I think that is concluded my explanation on the financial highlights for year 2025. I will hand over to Marcella for the Q&A. Thank you.
Thank you, Pak Ejima and Ibu Theresia , for your presentation. Ladies and gentlemen, now is the time for us to start the Q&A session. Please write down your name, company, and questions on the chat box menu, and I will read the questions. Now let's start the Q&A session, with the first question is from Bobby Tristanto Chandra from Mandiri Sekuritas. I will read the questions one by one before the BOD can answer their questions. The first question is: Do you anticipate any meaningful impact on cost of fund arising from the export purchase regulations? Additionally, what are the management's key priorities in maintaining a sustainable cost of funds going forward? If possible, could you also share your 2026 outlook for NIM, asset yield, and cost of funds? [inaudible] are welcome to respond.
Let me try to answer question number one. Thomas, go ahead.
Thank you, Pak Honggo. I'll try to answer number one. Yes, on the export proceeds that now have to be pulled into SOE banks, we lost some of our customers. At the same time, we actually managed to acquire more customers that is export-oriented in various industries, such as the apparel and the agri business, agricultures. We will see. At the moment, right now, we do not see our cost of funding increasing. But in the future, there is a potential, but at the moment we managed to get all these new customers that help us. Go ahead, Pak Honggo.
No, I think that's okay, Thomas.
Okay. Thank you, Pak Thomas. The second question, could you provide your loan growth outlook for 2026, including the expected growth mix between corporate, commercial, and consumer? Are there any specific sectors that BDMN has a stronger risk appetite?
Okay. Thank you, Marcella. I will respond on this question. Thank you for the question. Basically, Danamon set the projection for loan growth to be in line with the regulator target. The engine for this growth on the loan growth is from our four engine, which is from the wholesale, EBFI, SME, and also from the retail, consumer, and Adira Finance. While for the question related to the specific sector, we are focusing on the positive economic sector that we will tap in, and also we will seeing for the customer track record that we are focusing on the loan growth. I think that's the answer. Thank you.
Okay, thank you, Ibu Theresia. The third question, could you share the shareholders' strategic stance in relation to the Indonesian government's plan to gradually increase the minimum free float requirement for listed entities?
I think if you look at this, our share being float now is approximately 7.5%, right? Definitely, we are going to comply. We are waiting for the more detailed regulation from OJK. But in principle, I think our shareholders will comply with the regulations. Thank you.
Yes. In addition to [Non-English content] Honggo, what mentioned, we are still waiting the regulation itself. But from the shareholder perspective, of course they will comply with that. Thank you.
Okay. Thank you, [Non-English content] Honggo and Rita Mirasari. The last question from Bobby Chandra, for ADMF. Can we get more color on loss on reposition trend, both in four-wheelers business and two-wheelers business, and also the NPL loans business? Are they getting better?
Yeah, sure. I think overall, on yearly basis, our loss improved from 24.6%- 21.9%. So improvement of 2.7%. When we look at by segment, two-wheeler loss already back to the normal level, around 20%. NPL loss is remain around below 20%, but the one that's still, although improving, is on the commercial segment of the car. It's still around 30%- 35%. In the normal level, it's 25%. But that number already down from 45% in the previous quarter.
Okay. Thank you, Bapak Made Susila, for your response. We are still waiting for another question from the respected investor and analyst. Okay. We have another incoming question from Pak Irfan. Is there any requirement to refloat Adira?
Yeah. I think as mentioned before, we are waiting the full, what do you call it, the detail of the regulation of the free float. We will always comply with regulation.
Okay. Thank you, Pak Made. Once again, we would like to invite our respected investor and analyst if you have another question. Oh, there's another question from Ibu Yulinda Hartanto from BNI Sekuritas. The first question is, how do you see business confidence overall and the business loan demand? For Bapak Ibu BODs, you may share your response.
I think we leave it to Pak Dadi to answer number one and number two altogether.
Pak Dadi, you want to take the question one and two?
Sure. Yeah. Mm-hmm. Okay. Thank you, [Non-English content] Honggo. Thank you, Ibu Yulinda. Yeah, I guess, on the overall confidence of the market, of the industry players, of the real sector, I believe it's among our customers. Generally, although they are cautious, but the confidence is there, basically, in their respective areas. Let's say, even the auto sector, who have seen a slowdown in 2024 and further slowdown in 2025, in general, they see that 2026 will be basically the bottom or even some rebound. Although, of course, there will be some changes in the composition of the sales of the different brands. Most likely Chinese brands will grow, et cetera. But there are some positivism on, let's say, the auto sector where we, Danamon, have a lot of interest in the auto ecosystem. Sorry. But having said that, I think like I mentioned earlier, the caution is there.
The caution on the generally weakening purchasing power of the middle class, then the volatility of rupiah. That's generally the reason why our customers are also caution. All in all, we actually still see some relatively healthy demand on loans. On your second question, about the asset quality trend in retail segment. This is outside the autos. I think generally we do not really see deterioration in, let's say, our unsecured, namely retails. Namely credit cards and mortgage. We generally do not see any significant, let's say, trend. Let's say, be it a significant deterioration or significant weakening in the assets quality. We do not see that, I think. I think if we look generally in the industry, there are weakening sales, but assets quality itself, I think generally we haven't really seen the weakening. That's basically the answer to your question, Ibu Yulinda.
Thank you.
Okay. Thank you, Dadi Budiana. We have another questions from Pak Handy. Thank you, Bu Desya. We have another follow-up question from Pak Bobi. The first one is, any meaningful red cross or feedback from latest IIMS regarding specific demand on EV or specific brand or new cars?
Yeah. I think what we see differently this time is basically a big chunk of our order. Our order, by the way, increased 60% in term of unit compared to last year. We call it SPK. Again, a big part of that is associated with EV. So EV got a lot of interest, particularly for the consumer in around Jabodetabek area. I think that is notable changes that we see as compared to previous two years of the IIMS.
Thank you, Pak Made. The second question from Pak Bobi is, on non-interest income. Can you provide growth guidance for 2026 and the split between recurring and non-recurring? Would like to understand how much recovery outlook in 2026 too, if possible.
Okay. I will answer on the first one, on the non-interest income. In terms of splitting the recurring or non-recurring, I think it will be in line with our company strategy going forward. We need to see how is the economic currently and also seeing for the BI rate, whether it will impact to our strategy, which I think it will be in line with the company strategy during the cross-selling between the group and also, we increase our transaction to the granular funding. I think it will support our fee income going forward. Thank you, sir. In terms of recovery, probably, Dadi Budiana, you want to add?
Yeah, I suppose this is recovery in non-autos, right? Because I believe Pak Made has already provided his view on the loss under possession question earlier, right? That's on the autos. On recovery, as far as recovery in the I suppose the question on recovery here, I will try to answer it on recovery on bad loans, right? That's what I suppose Pak Bobi was referring to, right? If that is the case, then, given the fact, right, that our portfolio has actually improved in the last few years, then recovery itself, recovery from the non-performing portfolios will become less and less actually. In 2026, it will become less than in 2025. But recovery is basically a part of our credit costs.
This is actually already embedded in our credit costs, so even though our credit cost is better, but the recovery is not necessarily better, because as our portfolio is improving, then obviously there are less non-performing loans to be juiced from, basically. Probably, Pak Bobi, if you would like to reconfirm whether that is the definition of recovery that you are talking about. Thank you.
Okay. Thank you, Dadi .
Thank you.
Okay. Pak Bobi has responded to Pak Dadi. Yes, you are correct. Thank you so much, Pak.
Thank you.
Okay. We are still waiting for another questions. Before we end our Q&A sessions, once again, we would like to invite our respected investor and analyst. If you have another questions, you may type it on the chat box. Since there are no more incoming questions, we will close the Q&A session. Ladies and gentlemen, the respected investors and analysts, once again, thank you for taking part in PT Bank Danamon Indonesia Tbk's financial results for fiscal year 2025. For any further interest and questions, please do not hesitate to reach us through our investor relations mailbox at investor.relations@danamon.co.id. See you at the next Danamon's corporate event.