Danamon 1Q 2010 profit up 78% at $78mln

Net profit growth attributed to surge in loans and cost of credit improvement.

Indonesia's sixth-largest lender, PT Bank Danamon on Tuesday said first-quarter net profit rose 78 percent to 701 billion rupiah ($77.76 million) thanks to improved cost of credit and higher operating income.

The bank, controlled by a consortium which comprises Singapore's state investor Temasek Holdings and Deutsche Bank, said first-quarter net interest income rose to 2.394 trillion rupiah ($265.55 million), from 2.074 trillion rupiah ($230.06 million) a year earlier.

"Our loans continued to grow and our cost of credit has improved substantially by 24 percent from the last quarter," said Sebastian Paredes, Danamon's president director, in a press statement.

The bank said its cost of credit was 578 billion rupiah ($64.15 million) compared to 762 billion rupiah ($84.52 million) in the previous quarter.

Danamon said net operating income rose 36 percent to 1.62 trillion rupiah ($179.7 million) in the first three months, from 1.19 trillion rupiah ($132 million).

Vera Eve Lim, Danamon's chief financial officer, said that the bank's mass market segments, consisting of micro-credit loans and consumer auto financing, remained the important drivers for Danamon's loan growth.

View the full story in Reuters.