Jakarta. Bank Danamon Indonesia (BDMN) posted a consolidated net profit of Rp 2.83 trillion ($170.19 million) in the first nine months of 2025, marking a 21.44 percent year-on-year increase, driven by improved asset quality and lower loan impairment losses.

According to the bank’s financial statement published on Thursday, impairment losses on financial assets fell 16.53 percent year on year (yoy) to Rp 2.82 trillion, as the bank maintained tighter credit risk management. The non-performing loan (NPL) ratio improved from 2.05 percent to 1.83 percent (gross), while net NPL dropped from 0.37 percent to 0.25 percent.

This improvement in asset quality supported greater efficiency, reflected in a lower operating expense-to-income ratio (BOPO) of 77.18 percent, down from 80.43 percent a year earlier.

Danamon’s total loans and financing grew 5.76 percent yoy to Rp 191.79 trillion, driven by both conventional loans (7.23 percent) and sharia financing (11.71 percent), while financing receivables fell 4.49 percent. Interest income rose 3.49 percent yoy to Rp 17.5 trillion, though a surge in interest expenses up 11.01 percent to Rp 5.58 trillion limited further profit growth.

As a result, net interest income (NII) edged down slightly by 0.10 percent yoy to Rp 11.91 trillion, with the net interest margin (NIM) narrowing to 6.58 percent on a consolidated basis and 4.51 percent on a bank-only basis. The margin pressure came from Danamon’s growing reliance on time deposits, which jumped 20.83 percent yoy to Rp 100.12 trillion as of September 2025.

Meanwhile, low-cost funds (CASA) also rose modestly. Current accounts grew 9.83 percent yoy and savings 3.91 percent yoy, but overall CASA ratio slipped from 43.42 percent to 40.30 percent, following a 14.52 percent yoy increase in total third-party funds to Rp 167.71 trillion ($10.09 billion).

Despite the shift in funding composition, Danamon’s liquidity improved, as reflected in the loan-to-deposit ratio (LDR) dropping from 98.42 percent to 92.97 percent. The bank’s total assets climbed 7.96 percent yoy to Rp 259.50 trillion, with return on assets (ROA) and return on equity (ROE) rising to 1.52 percent and 7.96 percent, respectively.

President Director Daisuke Ejima said Danamon remains committed to sustainable growth and prudent banking practices in collaboration with its parent company, MUFG, and strategic partners.

“Our strong performance reflects Danamon’s commitment to sustainable growth, sound governance, and risk management,” Ejima said on Thursday.

He added that the bank’s NPL coverage ratio rose to 274.9 percent, up 260 basis points yoy, while loan-at-risk (LAR) improved by 250 basis points to 9.0 percent, signaling a continued recovery from pandemic-related risks.

In the automotive ecosystem, collaboration between Danamon and its subsidiary Adira Finance (ADMF) generated Rp 1.5 trillion in synergistic financing, up 57 percent yoy. The bank credited this growth to joint marketing programs and customer engagement initiatives held across Indonesia.

The quarter also saw a major milestone as Adira Finance completed its merger with Mandala Finance on October 1, 2025, following approvals from shareholders and the Financial Services Authority (OJK). The merger strengthens Adira Finance’s market position, especially in eastern Indonesia, and enhances synergy within MUFG’s financial group in Indonesia, which includes Danamon, Adira Finance, and Home Credit Indonesia.