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 full year 2024 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 and also the president-director of our subsidiary, Adira Finance, who have joined from their respective locations. Bapak Daisuke Ejima, President Director. Bapak Honggo Widjojo Kangmasto, Vice President Director. Bapak Hafid Hadeli, Vice President Director. Bapak Herry Hykmanto, Syariah and Sustainability Finance Director. Ibu Rita Mirasari, Compliance Director. Bapak Dadi Budiana, Risk Management Director. Bapak Muljono Tjandra, Finance Director. Bapak Thomas Sudarma, Enterprise Banking and Financial Institution Director. Bapak Jin Yoshida, Global Alliance Strategy Director.
Bapak Dewa Made Susila, President Director of PT Adira Dinamika Multifinance Tbk. We also would like to welcome Danamon's board of management, who have joined from their respective locations. Before we begin the CEO's presentation, let's first take a moment to look at Danamon's company profile video showcasing our synergy and collaboration to grow as a financial group.
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Ladies and gentlemen, before we present the detail of PT Bank Danamon Indonesia Tbk financial results for full year 2024, I would like to invite Bapak Daisuke Ejima, as our President Director, to deliver his remarks, highlighting the progress of our key strategies. Pak Ejima, the screen is yours.
Thank you, Marcella. Good evening and selamat sore for investor analysts, and thank you so much always for your interest and the coverage of Bank Danamon and group companies, including Adira Finance. Before coming into details, let me explain a key highlight of 2024 results of Bank Danamon. Page three, please. The page is showing macroeconomic situation. The first one, GDP. We saw steady growth of 5% last year, supported by continuous trade surplus, which brought the banking industry generally a good growth trend, particularly on lending side, over 11%, funding side, 7.5%. There exists a gap, which is indicating mounting pressure on the banking NIM side. Right side top is US FRB rate. Once hit 5.5%, now coming down to 4.5% with uncertainty and higher inflation expectations.
Market lead was originally four times cut in this year, but now it is gradually shifting up to only two cuts, and we will continue to monitor this U.S. interest rate. Multi-finance areas saw significant minus, particularly on four-wheelers last year, first half. Now it is gradually coming back, particularly on two-wheelers. Next slide, please. Danamon started the three -year midterm business plan since 2024. We set the direction grow as a financial group, indicating not only banking, but including multi-finance partners, Adira Finance, PT Mandala Multifinance Tbk, Home Credit Indonesia, and PT Zurich Asuransi Indonesia Tbk. Together, we will continue to grow. And we set business engines continuously under four segments, Enterprise Banking, SME Banking, Consumer Banking, and Adira Finance, plus other non-bank partners. There are three strategic themes, which I will elaborate more in later slides.
Those are, we want to be dominant in targeted ecosystems, we want to be unique in the FG proposition to be enhanced. Thirdly, we want to enhance data analytics and process improvement to build up the solidified foundations. Right side is some highlights of 2024 financials. Lending, we saw 8% year-on-year growth. Funding, slightly larger, 9% year-on-year growth. NPAT, due to OPEX and credit cost increase, we saw 9% year-on-year decrease. PPOP, pre-provision operating profit, we got IDR 8.3 trillion, which is 1% year-on-year plus. NPL coverage are now 287%, which is significantly jumped from previous year. Next slide, please. From here, I would like to elaborate three slides in our three strategic themes. First one is dominant in targeted ecosystems. We set ecosystem targeting approach in four main areas. Those are automotive, real estate and property, haji and umrah, and education.
You see numbers are showing a good, healthy growth. Automotive ecosystem, which is most important segment for us, collaborating between Danamon and Adira, both retail finance and non-retail finance. We saw growth, particularly on retail financing in automotive financing. We jointly did several key event promotions together and also many KPM Prima customer gatherings and events. Right side, we started to do new ecosystem approach in firstly hajj and umrah. Now we have over 100 travel agencies collaborating with us, which saw a 213% year-on-year growth. Funding, FX income, those we saw triple-digit growth. Education ecosystem as well. We now have a number of institutions, over 20, mainly in universities, et cetera, collaborating together so that we capture the bank account of that school students and parents, et cetera. Funding: we saw double-digit growth. Next page, please.
Second strategic theme is the MUFG value proposition that we want to enhance and leverage. Synergy loan between MUFG and Danamon, including Adira, we saw 13% growth, and particularly on employees benefit program, which we are trying to obtain to increase the CASA. Our payroll account now is seven times larger year-on-year basis. Number of synergy deals: we also saw a good double-digit growth with particularly on automotive segment in anchors and distributors' finance areas. Right-side pictures: photos are showing some of the joint event that we did together, including the Fintech Festival and the investment and business matching. Next page, please. Third strategic theme is the foundation building, data-driven analysis, and process improvement. Firstly, left side top, D-Bank PRO, which is our mobile banking applications. We continued enhancement and introduced 16 new features, including FX online, et cetera.
Number of engaged customers increased 14%, transaction plus 28%, and value also. Left side bottom is the Danamon Cash Connect, which is for wholesale business cash management systems. We enhanced six new features, including the payment, transfer, and tax, et cetera. Again, number of users, we saw a double-digit growth and transaction value as well. Right side top is our branch network. Nationwide, we continued our branch transformation. You see photos and now we finished 93 branches so far, and we will continue to do this new style concept of branches in the countries. This is bringing a good result in terms of funding, loan disbursement, and new-to-bank in-branch activities. Lastly, people side. We started to collaborate among the MUFG group companies and partner banks outside of Indonesia and within Indonesia. This kind of exchange program, mobility program, leadership program we will continue.
This is all a highlight summary from me. Now I would like to hand the microphone over to Pak Muljono Tjandra, Danamon Finance Director. Pak Muljono, please.
Thank you, Pak Ejima, and good afternoon. Let me go through the key highlights on the financial parts. Let us start from this page. We see that on the top left tables, strong growth in all lines of businesses. Our total loan and trade finance grew by 8%. Wholesale grew by 11%, and consumer grew by 5%. On the bottom left table showing the healthy asset quality, where loan at risk improved by IDR 1 trillion, NPL coverage ratio increased by 21.3% to 287.2%, and our NPL gross improved to 1.9% from 2.2% last year. On the top right table showing our third-party deposits grew by 9% to support our loan growth. Further, we see our granular funding increased by 8% year-on-year. Bottom right table showing our operating income grew by 4% year-on-year and NPAT reached IDR 3.2 trillion. Next.
This is the picture of our balance sheets. We see that our total asset grew by 10% year-on-year, which mainly supported by growth in loan and deposits. To support loan growth, our total funding grew by 10% year-on-year, with mainly from TD and borrowing in Adira Finance. CASA declined by 13% during the high-rate environment. Main customer changed their portfolio to higher rates, higher returns, which is like TD and wealth management products. Next. This is the picture of our profit and loss. We see the steady growth in operating income. As discussed earlier, our operating income grew by 4% year-on-year, and OPEX increased by 6%, mainly due to the commitment on the investment, with lastly in IT, digital, and branch networks. Excluding the investment, our OPEX increased much lower, which is around 4%. Our CoC increased by 19% year-on-year.
However, in term of percentage to total loans, our CoC is 2.5%, or increased by 10 basis points compared to same period last year. With that, our operating profit and NPAT lower by 14% and 9%, respectively, compared to the same period last year. Next. Now, this is the key of our key financial ratio. We see that our risk-adjusted loans lower by 100 basis points compared to last year. Our cost-to-income ratio at 55.9% slightly increased compared to last year, despite of the investment commitment, as I mentioned earlier. Our NPL gross improved by 30 basis points to 1.9%, and coverage ratio at 287% on increase by 21% compared to same period last year. Our current console remains strong at 26.2%. Our REM at 97.5%, same with last year, and we have ample liquidity. Next.
As I mentioned earlier, that we continue focusing in granular fundings. Refers to the top left table, our granular funding grew by IDR 6.8 trillion year-on-year. Refers to the top right table, our LCR, NSFR, and LDR remain healthy. Our capital console remains strong at 26.2% and almost 100% in the form of tier one capital. Next, refers to the top right table, we see that other than Adira, all our business line grew by double digits, being EBFI grew by 10% year-on-year, SME grew by 12% year-on-year, and consumer grew by 19% year-on-year. Adira Finance flat compared to last year due to the challenges in the demand due to the current economic conditions. Bottom left table showing composition of our loan and trade finance portfolio, which pretty much consistent compared to previous years.
Bottom right table showing our loan by sector and purpose, which is largely around 58%, represented in working capital loans. Next. As mentioned earlier, that refers to the top right tables, due to weakening automotive sector and challenging economic conditions, Adira new financing grew was lower by 12% compared to same period last year. This resulted in the outstanding loan at 31st December 2024 remained flat compared to last year, refers to the bottom right table. From the composition, the multipurpose loan, or MPL, grew faster than other products. We can show that the multipurpose loan grew by 19%. Next, a table on the left showing the composition of our interest income and non-interest income. Our non-interest income grew by 11%, which contributed from all type of fee. This is refers to the top right table.
Supported by all types of fee, being credit-related, non-credit-related, and treasury fee. Next. As we discussed earlier, that we maintain prudent asset quality management as shown by our NPLs, our special mention ratios, loan at risk, NPL coverage ratio, and CoC. Other than CoC, we see that all improved compared to last year. That's all I have. That's all I want to share on the financial highlights. Probably next, I will pass it to Marcella for further guidance.
Okay. Thank you, Pak Ejima and Pak Mul, 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. While waiting for the incoming questions, let's have a look at a quick video summarizing our journey, which marks the five years since the acquisition by MUFG. I have seen there are 20 investors and analysts who have joined from various institutions. Thank you for taking your time to join Bank Danamon analyst briefing event. Now let's start our Q&A session with the first question is from Irfan. Hi, Irfan. What is the outlook for Adira Finance this year in terms of growth and gross NPL?
Okay. For Adira, last year we are down by 12%, in part because of the sales of auto also dropped around 14%. This year we expect that there is slight recovery in terms of sales, both two-wheeler and four-wheeler, around 5%. As such, we expect to increase our new financing by 8% to 10% this year.
Thank you, Bapak Made, for your answer. Okay, let's move on to the next question. It is from Boby Kristanto Chandra. Bapak Boby is from Mandiri Sekuritas. There are three questions from Bapak Boby, so I will read the questions one by one. The first question is, could you provide us some guidance with regards to loan growth and deposit growth in 2025? Which segment will drive the loan growth in 2025?
Maybe I can respond to that, the loan growth and deposit growth, basically. We expect that the credits and trade finance in 2025 will grow in line with the credit growth target set by our regulator for 2025 of around 9% to 11%. This growth is supported by all the engine of growth Danamon, being EBFI, enterprise banking and financial institutions, SME, and consumer and Adira Finance. This projection is determined by considering the company's strategy but will greatly influence by various internal and external conditions that may have influenced the growth. On the deposit side, we also expected that we are going to grow lower double digits, basically to support our loan growth. Thank you.
Okay. Thank you, Bapak Muljono for your answer. The second question from Bapak Boby: within your corporate banking or enterprise banking, how much of this enterprise banking loan comes from your synergies with MUFG?
Hi, sorry, this is Thomas, but my camera seems does not work. Let me answer that question. Currently, about 20% of the loan outstanding balance is coming from the synergy loan with MUFG.
Okay. Thank you, Bapak Thomas, for your answer. The last question from Bapak Boby, for Adira, new financing dropped by 12% year-on-year. Can you give us color on what numbers of new financing do you expect Adira can achieve in 2025? How much of it will be driven by multipurpose loan?
Yeah. I think I just spoke about it. Last year, we see that a correction in term of the auto sales, but this year we expect with single-digit growth on the auto sales. As a result of that, we have targeted new financing around 8%-10% growth compared to last year. We do expect multipurpose loan will continue to grow double-digit.
Thank you, Bapak Made, for your answer. We are still waiting for another question. We are still waiting for another questions. You may write down your name, company, and questions on the chat box menu, and I will read the questions. We will wait for another three minutes before we close the Q&A session. Okay, there is another question from Naura, from BRI Danareksa Sekuritas. What is driving the rise in OpEx in FY 2024?
Probably I can answer the question. The significant increase is mainly coming from the related to our investment in the various area, which is like our IT-related, digital, and then branch network. Also increase in manpower cost due to the salary increase. This is the investment commitment, basically. The investment commitment for the future growth. Having said that, we also are doing a lot of cost management in order to contain the increase. Also in the area of related to the IT related, manpower in term of the process improvement and all that stuff. IT related to the, what do you call it? The applications that we are no longer required, and also to streamline the process. Thank you.
Thank you, Pak Mul, for your answer. There is another question from Irfan. Any NPL guidance for Adira?
NPL of Adira stood around 2%. I think we will stick with that.
Okay. Thank you, Pak Made. There is one more incoming question from Andrey Wijaya from RHB Sekuritas. Would you kindly update on liquidity situation in first quarter 2025?
Maybe I can answer this first and probably Herry can also help. We see that the pressure on the liquidity is better. Liquidity is better in the first half, up until now, at least. We see pressure on the rupiah, especially on the deposit sides, is much better compared to the fourth quarter. That is why we are able to lower our TD rates. We see that our NIMs and our LDR also remain very healthy, and we have the ample liquidity so far.
Thank you, Pak Mul, for your explanation. We have another questions from Pak Boby, from Mandiri Sekuritas. There are two follow-up questions. The first one is, some banks are considering to increase their dividend payouts and considering buyback program. Can we get some color on your dividend policy and whether BDMN is interested to do these strategies in the future? Also, if possible to share, do you have ROE and CAR target in the medium term that you can share with us?
Let me try to answer that. Danamon plan to continue distributing cash dividend for the 2024 financial year, with, of course, approval from the shareholder. The value of cash dividend to be distributed is maximum around, probably, if you look at the previous year, we distribute around 35% of our NPAT. That is if you look at the Danamon history for the last few years. The dividend distribution plans will be announced further along with the summon to the AGMs, and approval will be sought from the shareholder.
Good. I would like to answer the question on this ecosystem, education, Hajj. It is basically mainly on acquisition of funding from various customers. For example, in school education ecosystem, we want to onboard the school, also the parents to use Danamon for payment of the school fee, et cetera. That is mostly on the funding side.
There was a question on the ROE and CAR. Let me try to answer it. ROE 2025, about 7.6%, and going forward, we are talking about our ROE in the next couple of years, probably around lower 8% today, which is probably 7.7% to 7.8% to around 8.5% in the next couple of years. If you are talking about CAR now in terms of console, about 26%, very strong, and all in the form of tier one capitals. We would like to maintain our CAR in this level going forward.
I would like to add on the Hajj and Umrah ecosystem. Our customer increased to 213% year-on-year. This is the customer that coming from the association, religious travel agencies, and the Hajj financial management agency. We increased by 143%. With this, hopefully going forward, we will do more aggressive increase in this Hajj and Umrah ecosystem. That is additional from Hajj and Umrah ecosystem.
Okay. Thank you, Pak Mul, Pak Hafid, and Pak Herry, for your explanation. We have the next question from Vincelle Budihardjo from Pangolin. Can you tell us the performance of Home Credit Indonesia and Mandala Finance? Are those lumped under consumer loan portfolio?
Pak Mul, should I respond on this, Pak?
Yes, Pak Made, please.
I think the number that we show is excluding Mandala and Home Credit. Mandala is consolidated to MUFG Bank of Japan, while Home Credit is consolidated to the Bank of Thailand. Adira is a minority investor in both companies.
Thank you, Pak Made, for explanation. We have the next questions from Ilham Firdaus from BNI Sekuritas. Do you see any opportunities in optimizing risk-adjusted margin this year, whether it is from repricing the loan, or do you see the room for improving liquidity, hence lower cost this year? Maybe we try to answer the first question first.
Let me try to answer first here, probably others can also help. From the loan growth, as we discussed, actually, we focus on all engines, being the EBFI, SME, consumer, and Adira. As Pak Made mentioned earlier that in Adira, they are largely focused on the multipurpose loan, which give a better loan yield as well as better margins. That we hope that we can improve our loan yield and margin going forward. Second, that we also hope that with the less pressure on the liquidity and potential that BI will cut rates, one more rates cut in 2025 in the first half, as well as follow the Fed cut rates also in the first half. We hope that the pressure on the cost of fund will be better compared to last year.
With that, we also hope that can improve our cost of funds going forward. In addition, of course, as Pak Hafid mentioned earlier, we try to grow our customer base, our capability to serve customer, and with that, we are also able to grow our CASA with a lower cost of funds to support our sustainable growth going forward.
Okay. Thank you, Pak Mul. The second question from Ilham Firdaus. Some follow up on the Adira Finance loan growth. If I am not mistaken, you mentioned you target 5% growth on vehicles loan and 10% disbursement growth. Can you give more color on the assumption on this? What is the driver of this year's growth, and how do you see the outlook for vehicle sales in overall this year?
Yes, thank you. Number one, we are targeting 8%-10% growth in terms of amount of financing, new disbursement loan. The one underlying assumption is basically we expect that the sales of auto is recovered this year, because last year, sales of four-wheelers dropped by 14%. So we expect that recovery in term of sales going to be improved around 5%, while our amount financing expected to grow between 8%-10%. We expect more growth in the multipurpose loan, double-digit growth on that segment. While, since we are quite big in the new car and new motorcycle, our growth will more likely tracking the growth of the industry, which is we expect, around 5%. As a result of that, overall, we are targeting 8%-10% of new financing growth. Industry is still expecting some recovery after declining last year.
Probably we will see single-digit growth for the two-wheeler and then single-digit growth for four-wheeler. Although, we expect in the first half of this year, going to be very sluggish growth given uncertainty in the market, as well as a new government that programs still need to be rolled out that impact the purchasing power into the mass market.
Okay, thank you, Bapak Made, for your explanation. Before we end our Q&A session, once again, we would like to invite our respected investor and analysts if you have another questions. Since there are no more incoming questions, then we will close the Q&A session. Ladies and gentlemen, the respected investors and analysts, once again, thank you for taking part in the PT Bank Danamon Indonesia Tbk's financial results for FY 2024. 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, and thank you.