Citigroup Summary Takeaways from Citi Indonesia Investor Conference – Day 2, Bank Danamon Indonesia (BDMN.JK;Rp5,300;3H)

 Takeaways from Jakarta — Bank Danamon presented at Citi''s Indonesia Investor Conference on 4-5 Aug.Below are key takeaways.

 Loan growth momentum is strong — This was driven by Mass Market (Micro and auto).The 1H loan growth is 10%,on track for 20%growth.Wholesale loans are lagging.Loan growth from outside JAVA is 55%(share of outstanding is 50%).

 NIMs in Q2 were 12%,against 12.46 — Yields on wholesale loans are under pressure.Asset quality is improving and Credit Cost is expected to be 3.2%to 3.5%.The Q2 ROA is 2.9%,same is Q1,translating into ROE of 18%.No asset quality concerns as long as inflation remains below 7%.

 If loan growth remains strong,plan to raise Time Deposits — Also raising Rp3trn in BDMN and Rp2trn in Adira for funding (not for capital).Adira will be 2 and 3 year bonds and indicative rate is 8.5%to 9.5%.Also plans to add 100 Adira outlets and hire 5000 employees.Expect Cost to Income to remain below 50%.