Main Management Company Management Operational Good Corporate Corporate Corporate 90 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data PT Bank DanamonIndonesia Tbk. Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 9191 PT Bank Danamon Indonesia Tbk. PT Bank Danamon Indonesia Tbk. Management Discussion & Analysis Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching 2019 2019 Annual Report Annual Report Main Management Company Management Operational Good Corporate Corporate Corporate 92 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data PT Bank DanamonIndonesia Tbk. Economy Macro returned toemerging economies likeIndonesia. global financial markets, asyield-seeking activities wave ofuncertainty hassentaseries ofquakes across monetary easingandsofter commodity prices. Arising which hadbeenrespondedbyaconvergence of trend fromboth advance andemerging economies, Global growth in2019waspainted with adeclining 2.5% ofGDPandprovide stabilityforthe Rupiah. with CurrentAccountDeficit estimated toease such, itwillinduce aneven strongerexternal balance other engines ofgrowth remainedmoderated. As primary commodities andimportmanagement, while This is expected tomainlybedriven byexportof to grow at aneven slower pace of 4.9% -5.0%range. Going into 2020, the Indonesia’s economy is projected around IDR54 trillion ofcashintothe bankingsystem. reserve requirement ratio. A move that injected central bankthrough 2times 50bpscutinprimary concentration hadarisen andwasaddressedbythe were adequate to cover the risks. However, liquidity quality, while the sector’s capitaladequacy ratio resilient, with manageablealbeitdeteriorating credit overall macro stability. The banking system remained to balance the pushforgrowth momentum with by 100bps through fourseparate revisions, inaneffort Bank Indonesiadecided toloosenits monetary policy 2018 to2.7%this year. Current AccountDeficit declined from3.0%ofGDPin reduced such needsforimported goods.Hence, these moderations indomestic demandhadalso fixed investment andhouseholdconsumption. Yet had easedto5.0%,primarily onthe backofsoftening and external demand. Indonesia’seconomic growth fundamental wasanarrowinggapbetweendomestic Key reasonbehind the improvement in IDR along 2019,reaching ashigh asUSD129bn byyear end. central bank’sreserve assets hadbeenaccumulated at IDR13,901/USD. Consequently, USD9bnworth of significantly fromyear-ago levels andclosedthe year The volatility ofIndonesianRupiah (IDR) hadnarrowed and helped stabilize the country’s external account. towards Indonesiansecurities amounted toUSD15bn in sovereign credit rating profile.Foreign fundinflow by both public andprivate sectors, amidimprovements opportunity toissue USDdenominated long-term debt Such timely changeofevent wassought asan Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 93 PT Bank Danamon Indonesia Tbk. Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching 2019 Annual Report Main Management Company Management Operational Good Corporate Corporate Corporate 94 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data PT Bank DanamonIndonesia Tbk. Segment Review Business Transaction and Capital Treasury Banking Banking Syariah Market “ financing forautomotive andconsumer goodsthrough Adira Finance. including Syariah bankingservices. Inaddition, Danamonprovides comprehensive rangeofbanking andfinancial products andservices (Commercial andCorporate) Bankingsegments. The Bankprovides a segment, SmallMedium Enterprises, Micro businessesandEnterprise Danamon serves allsegments ofbankingcustomers inthe Consumer Line ofBusiness Financial Institution Banking and Enterprise Banking Banking Micro SME Business Segment Small and Corporation, Financial Business Middle Affluent Segment Segmentation Institution and Entrepreneurs Self Employed Mass Market Micro-Small Commercial Customer Income Middle Individual Segment Line ofBusiness Consumer Privilege Banking Banking Banking Micro Finance Adira Annual Report Treasury Banking Transaction Banking Syariah Market and Capital 2019 “ Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 95 PT Bank Danamon Indonesia Tbk. and added-value programs. assignments. training and project through capture the end-to-end value chains of existing end-to-end value chains of existing the capture clients. value corporation and multinational companies chains. businesses ancillary and any other products treasury Bank’s wallet share from our clients the to improve and value chains. events loyalty through engagement client Enhance capital and upskill our people in human Invest Acquire new clients within the target market and market and target the within new clients Acquire Group to tap into Japanese MUFG with Collaborate banking, of transaction cross-selling Enforce • • 2019 PERFORMANCE strategies, and initiatives By undertaking appropriate in Enterprise performance its raise managed to Danamon in 2019. trillion to Rp43.9 6.0% YoY banking loan grew the support to key the become MUFG with Collaboration Banking in current year. of Enterprise achievement IN 2020 AND INITIATIVES STRATEGIES implement to continue Banking will Enterprise 2020, In following strategies: the • • • Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching 2019 Foreign Exchange Exchange Foreign Working Capital Loans (Trade Finance and Financial and Financial Working Capital Loans (Trade Finance Loans Investment and Collections (Payment, Cash Management Liquidity Management) Liquidity Supply Chain) Banking Enterprise Annual Report based organization. Banking kept improving its end-to-end credit process, process, credit end-to-end its Banking kept improving while to clients, time turnaround a faster providing culture. risk a prudent ensuring capital by in human Banking invested Enterprise best talent, implementing and retaining the attracting performance- a driving and programs, training extensive its portfolio through new client acquisitions and its end- and its acquisitions new client through portfolio its business network the to-end value chains. Leveraging a initiated also Banking Enterprise Group, MUFG of and multinational plan to tap into Japanese companies value chains. corporation Enterprise transformation, continuous As part of its • • Custody IN 2019 AND INITIATIVES STRATEGIES to focus on deepening Banking continued Enterprise as well as developing clients, existing with relationships PRODUCTS AND SERVICES PRODUCTS and following products the Banking provides Enterprise services: • • • lending, cash management, trade finance, and treasury treasury and finance, trade cash management, lending, services. needs, client’s and serving understanding Through aspires to make Danamon the Banking Enterprise bank. preferred transactional Enterprise Banking serves the Corporate, Commercial, Commercial, Corporate, the serves Banking Enterprise of Bank Danamon. segments Institution and Financial as such solutions, financial comprehensive provides It Main Management Company Management Operational Good Corporate Corporate Corporate 96 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data and AssetLiability Management (ALM)System. Contingency Funding Plan, Enhanced Treasury System Available forSale(AFS)portfolio management, sheet management strategies inCapitalManagement, In 2019,TCMcontinually focusedonefficient balance 2019 STRATEGIES &INITIATIVES Repo &Reverse Repo. Market (Interbank &BankIndonesiainstruments), and and Sharia schemes andCorporate Bonds),Money Securities (Government Bondsunderboth Conventional Interest Rate Swapand Cross Currency Swap, Marketable Forward, FX Swap,Domestic Non-Deliverable Forward), Exchange (including FX Today,FX Tomorrow,FX Spot,FX trading activities. Products offeredincludeForeign to meet the needsofcustomers, aswellperforming TCM offersawiderangeofproducts andservices geared PRODUCTS ANDSERVICES risk inherent within the Bank’sbalance sheet. principles. TCMis alsotaskedwith managing interest rate thereby supporting businessexpansionunderprudent by ensuring liquidity requirements arealways fulfilled, TCM is responsibleformanaging the Bank’sliquidity risk improving anddeepeningfinancial markets. investment products. TCMalsosupports regulators in provides solutions forcustomers requiring hedging and product partnerofBankDanamon’sbusinesslines,TCM on efficient andprudent balance sheet management. Asa Treasury andCapitalMarket(TCM)hascontinued tofocus and other newinstruments allowedbyOJKandBI. Marketable Securities, andCorporate Bonds),andRepo instruments, fixed income instruments (such as:NCD, Bank Indonesiainstruments, interbank moneymarket conducted liquidity management through placement in term funding, such as:long-term offshoreborrowing. TCM Furthermore, TCMalsoexploredshort-term andlong- other professionalfunding instruments. collateralized borrowing, repo,syndicated borrowing, and (NCD)/Bonds/Medium Term Note (MTN) issuance, third-party funds,such as:Negotiable Certificate Deposit alternatives incapitalmarketasidefromconventional TCM also continually exploredfundraising through various PT Bank DanamonIndonesia Tbk. Capital Market Treasury and alternatives forcustomers tofulfilltheir foreign exchange, Government Bondin2019. TCMalsoprovided solution joining the auction activities especially newly-issued TCM supported the government’s funding planbyactively 2019 Seri BofIDR852billionsinMay2019. A ofIDR1.148 billions,andContinuing BondIPhaseYear February 2019,Continuing BondIPhaseYear 2019Seri Notes IBankDanamonYear 2019ofIDR500billionsin funding structure through issuance ofMedium Term In 2019,TCMsupported the Banktostrengthen the 2019 PERFORMANCE Deliverable Forward(DNDF). additional hedging instrument, such as:Domestic Non- fee-based income forthe Bank.TCMalsoprovided as: government bondsandcorporate bondstoincrease offered alternative investment forretailcustomers, such providing liquidity andbestprices tocustomers. TCM TCM conducted trading activity tosupportSalesin 5. 4. 3. 2. 1. In 2020,Treasury andCapitalMarketwill continue to 2020 STRATEGIES &INITIATIVES various treasury products. hedging needs,andinvestment instruments byutilizing implement the followingstrategies: and OnlineRetail Bonds. services, such as: Structured Products, FX Online, Develop the Bank’s investment products and Index Swap. customers, such as:CallSpreadOption andOvernight Develop additional hedging instruments for customer’s profile. providing appropriate products that suit each corporate andfinancial institution segments) by Expand the customer base(retail,commercial, value chains. Japanese companies andmultinational corporation with MUFGGrouptotapbusinessopportunity with TCM willalsocontinue toutilize the partnership hedging instruments tomanagetheir exposures. customers whoneedinvestment products and Collaborate with Line ofBusiness(LoB)tosupport management strategies with prudential principles. Continue tostrengthen efficient balance sheet Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 97 PT Bank Danamon Indonesia Tbk. Danamon Cash Connect (DCC) for tax payment payment tax for (DCC) Connect Cash Danamon a is Aplikasi Jaminan Online (AJO) system, (API) Central Programming Interface Application Supply Chain mobile app, D-BisMart Financial services to wide range of customers from the from the to wide range of customers services to retailers segment corporate in line with regulatory policy and some features features some and policy regulatory with line in and transaction valas like auto-debit, payroll, customer to accommodate service remittance as well for MUFG collaboration need especially to upload online underlying capability as the in the time 1st is this for Valas as document market between PLN and Danamon which collaboration Bank enable contractors of PLN in issuing for PLN. Guarantee to be enables fund Up service, for Cash Pick account. to client’s in real time credited cash management the enable Danamon to extend Banking successfully leverage FSC ecosystem ecosystem FSC leverage Banking successfully from new anchors and distributors additional with the In addition and FMCG industry. Automotive as has been established Services Network Domestic partner bank of MUFG. MUFG Bank in Cash with collaboration the improve Finance. and Trade FSC, Management, will provide Financing and Supplier System FSC the to accommodate capabilities sound digital ecosystem. business needs of FSC a. b. c. d. MUFG Collaboration MUFG, Transaction with strong collaboration With to continue Banking will In 2020, Transaction with (DCC) Danamon Cash Connect advanced The Digital Capabilities Capabilities Digital through: capabilities digital Danamon enhanced • INITIATIVES AND 2020 STRATEGIES • • 2019 STRATEGIES AND INITIATIVES 2019 STRATEGIES • Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching 2019 Financial Supply Chain (FSC) Financial to improve aims Supply Chain Danamon’s Financial Trade Finance & Services Trade Finance trade conduct to customers allow services These Cash Management are solutions cash management Comprehensive meet customer’s requirement. customer’s meet the payment cycle between distributors and and between distributors cycle payment the for distributors, loan facilities by providing principals and monitoring. reporting comprehensive including are also available to for suppliers facilities Financing Application Corporate Danamon Cash Connect, Connect, Cash Danamon Corporate Application core business. on their can focus more customers for imports, and trade loans, whether transactions trade. or domestic exports designed to allow customers to maximize profitability profitability to maximize to allow customers designed and daily flow, liquidity, cash managing by efficiently Banking and Mobile Internet By utilizing transactions. (Cash Management, Trade Finance & Financial Supply Chain) Supply & Financial Trade Finance Management, (Cash Transaction Banking Transaction Annual Report • • PRODUCTS AND SERVICES PRODUCTS following products: the Banking provides Transaction • competitive and efficient transaction banking solutions. transaction and efficient competitive allows banking platforms of internet improvement The between Cash services integrated to enjoy customers Supply Financial and the Trade Finance Management, business activities. of their efficiency Chain, optimizing delivering excellent customer service.” customer excellent delivering of products a range Banking offers Transaction Danamon and entrepreneurs, needs of enterprises to the cater that Danamon’s clients. or SME commercial corporate, whether Supply and Financial Trade Finance Cash Management, appropriate, with customers all provide Chain capabilities “Transaction Banking continues to utilize the digital digital the to utilize continues Banking “Transaction supply chain focusing on financial technology, and experience customer enhancing while management, Main Management Company Management Operational Good Corporate Corporate Corporate 98 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data PT Bank DanamonIndonesia Tbk. focus ongrowinglowercostoffunds. result areinalignment toDanamon’sstrategy tocontinue previous year mostlydriven bygranulardeposit. This demand onloan,average depositgrewby8%from Year onYear average loangrewby1%.Despite ofsoft Soft economic resulted inlowerdemandofSME loans. 2019 PERFORMANCE rate inlinewith the Bank’scredit policy. management ofnon-performingloanstomaintainanNPL of acquisition quality, loanportfolio management, and From arisk perspective, the focuswasonimprovement digital platforms. companies toincreasecustomer acquisition through as exploring collaboration with financial technology optimization ofleadsgeneration initiatives, aswell of the smallenterprise salesforce, development and Focus wasalsodirected towardcapacity fulfillment solutions tocustomers. initiatives focusingondelivering comprehensive financial In 2019,DanamonSME Bankingcontinued its strategic 2019 STRATEGIES ANDINITIATIVES • • • • comprehensive financial solutions: Danamon SME Banking offers the following PRODUCTS ANDSERVICES Enterprise (SME) Banking Small Medium assets. provide protection tobusinessownersandtheir as internet bankingandmobilebanking. across Indonesiaandthrough digital channels,such anytime through Danamon’snetworkofbranches Cooperative Loan. financing, the Rural Bank(BPR)Loan,andEmployee Installment Loan),aswellFinancial SupplyChain Demand Loan),Investment Financing (KAB–Term Account, Saving Account,andTerm Deposit. of operational transactions inthe formofCurrent Bancassurance: Offering arangeofproducts to Transactions: Offering easeoftransactions anywhere, Lending: WorkingCapital(Overdraft Facility and Funding: Depositandtransactional accounts forease with better risk management. and prudent credit policy toaccelerate credit processes enhance credit initiation quality supported bytechnology As continuos improvement, DanamonSME Bankingwill customer loyalty. strategies tocreate sustainablegrowth andincrease These products will be marketed through cross-selling e-channels, andadditional features inexisting products. Current andSaving Accounts andvalue-addedservices, through comprehensive lending product bundlingwith its valueproposition asaone-stopbankingsolution Danamon SME Bankingwillalsocontinue topush Loan linkagesandEmployee Cooperatives. well asmorefocusonFinancial SupplyChains,Rural Bank through acquisition ofsmallenterprises andE-retailer, as customer baseusingboth traditional anddigital platform In 2020,SME Bankingwillcontinue focustobroadenit’s 2020 STRATEGIES ANDINITIATIVES serving clients through cash-flowbasedlending. to provide faster andbetter distribution outreach in with peer-to-peerlending platform, underlinkagescheme, lending delivery, DanamonSME Bankingis collaborating and provide information tooptimize workingcapital.On sales provider toprovide real-time financial dashboard engaging with cloud-accounting services andpoint-of- transactional account,DanamonSME Bankingis on transactional accountandlending delivery. On The twomaintopics ofthe collaboration areimprovement ecosystem inproviding enhanced products andservices. need, DanamonSME Bankingis collaborating with digital In ordertomaintainrelevance towardsSME’s clients Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 99 PT Bank Danamon Indonesia Tbk. CASA by 11.3% and TD regular by 45.9%. and TD regular by 11.3% CASA INITIATIVES AND 2020 STRATEGIES from product- of transformation year 2020 will be the on new by embarking to customer-centric centric Affluent segment, Emerging to attract the propositions Affluent segment’s the revamp and strengthening offer for the basic its with continues while proposition middle market segment. to strategy will enhance banking Danamon’s consumer new digital base by developing customer broaden the (online and offline), investing channels and partnerships taking as Adira, such ecosystem, existing in the resources payroll accounts approach in acquiring an institutional Banking collaboration, MUFG and Enterprise through on the focusing by branch productivity improving and and affluent segments. emerging of sales and specialist team and enhancement on WM on WM enhancement and team of sales and specialist fulfill to strategy of the were also part infrastructure needs. diverse customer’s better to provide strategies Bank the with Alligned anchor its became system D-Point rewards services, 360 to provide management for loyalty infrastructure with relationship to value the degree reward points convenience provides D-card application the clients, investment channel new and card customers credit for a provide phone-banking through execution transaction for customers. total solution 2019 PERFORMANCE strategies, and initiatives By undertaking appropriate in Consumer performance its Danamon managed to raise to Rp12.3 YoY 10.5% banking loan grew Consumer Banking. loan mortgages consumer by contributed in 2019 trillion Granular funding trillion. to Rp 9.1 YoY grew by 16.3% that in of growth comprised trillion, grew by 23% to Rp74.6 Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching 2019 Investment and Bancassurance Investment products, and bancassurance For investment Tailored to meet the needs of market segments, needs of market segments, the Tailored to meet of products, offer a variety Banking Loans Consumer Consumer Banking provides many products through through many products Banking provides Consumer institutions third-party reputable with partnerships needs of more affluent the in Indonesia. To meet Banking also provides Consumer customers, services. and exclusive personalized our deposit products are saving accounts, checking checking accounts, are saving our deposit products deposits. and time accounts (credit and unsecured (mortgages) secured both cards, personal loans). conventional channel (sales and distribution channel) channel) and distribution channel (sales conventional A clear strategy channel (D-Bank platform). anad digital in consistent has resulted to grow granular deposits in providing betterment Continues growth. year-on-year new WM through solution (WM) Management Wealth capability in WM advisory improvement intiatives, product STRATEGIES AND INITIATIVES 2019 AND INITIATIVES STRATEGIES from in 2019 covering were undertaken initiatives Several and infrastructure. products, programs, acquisition part was programs acquisition the refining Continuosly through base both customer to grow the efforts of the • • Loans comprehensive financial services for individual customers customers for individual services financial comprehensive and entrepreneurs. AND SERVICES PRODUCTS and products following Banking offers the Consumer services: • Deposits Banking population large and growth economic stable Indonesia’s for Danamon’s market opportunity present a significant Banking provides Consumer Banking unit. Consumer Consumer Annual Report Main Management Company Management Operational Good Corporate Corporate Corporate 100 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 3. 2. 1. MARKETING ACTIVITIES 2019 • • • • • plans andtobuild strongbrandawarenessandequity, thru: brand andmarketing strategy tosupportdelivery ofbusiness brand imageasareputableandtrusted bank,bydeveloping President Director. GroupMarketing aims tobuild acorporate by Chief Marketing Officer (CMO)whois directly toVice functions are integrated inthe GroupMarketing division, led Bank Danamonbank-widemarketing andcommunication GROUP MARKETING PT Bank DanamonIndonesia Tbk. Aspect Marketing

emotional relationship between brand & customers thru was attended byaround350privilege, corporate, and from economy tonational andglobalpolitics. The event in 2020, including the opportunities and risks, ranging the event gave insights onthe outlookofIndonesia economists such as Chatib Basri and Fauzi Ichsan, in 2020, on 20 November 2019. Featuring prominent forum discussion onIndonesiaandglobaleconomy economic event, The Indonesia2020 Summit,anopen succeeded ininviting around6,000 runners. of 5Km,10 Km,15and21KmorHalfMarathon and The event presented fourrunning distances consisting where runners candetermine the finish linewhile running. area, South Tangerang. Danamon Run is a unique race for the third time onNovember 10, 2019,inthe ICEBSD Bandung. cities, which are Jakarta, Surabaya, Medan, Makassar, and The launchofthis application is conducted infive large to-end digital bankingactivities, anywhere andanytime. added convenience forcustomers inconducting end- Your Way”asatagline,this application wouldbring comprehensive digital bankingsolution. Using “Banking Registration application tocomplement D-Bank,a control. marketing organizations androbustmarketing budget them. experience bybringing their lifestyle andaspiration to “everywhere” intargetaudience life andengageinbrand releases. positive imageandtodrive businessbeyondpress to gainbrandexposure,create goodstories, influence leverage media/ journalists asanimportantchannel Communication Corporate relevant andconnect with consumer. product with a solution centric communications that is Danamon andMUFGhosted their firstcollaborative The Indonesia 2020Summit Danamon held the annualrunning race “Danamon Run” Danamon Run 2019 beginning of2019,BankDanamonlaunched D-Bank D-Bank Registration Apps Research & Planning Marketing Activations Brand & Event Marketing Digital Communication Marketing and Brand asleadsgeneratorandrevenue driver. : create the perception of : build strongbrandequity :to : develop insights driven : create astrong 1. summarized infive pillars: their bankingtoday,marketing strategies andinitiatives are the digital force that shapethe waythe consumers doing into business clients, the rise of the new target market and Taking into accountthe MUFG directions togostrongly KEEP INSIGHTTOBEKEPTMIND from corporate toendconsumers. as acredible bankthat expertlyhandleclient acrossthe board the key objective of strengthening Danamon brand awareness For 2020,overall communication effortwillbealigned under STRATEGY ANDACTION PLAN2020 5. 4. 3. 2. us – and influence consumers to bank with us. Now into prosperity. necessary economic outlooktoguide their businesses MUFG BankJakartaBranch, providing customers with the commercial bankingcustomers ofBankDanamonand assets. broadcasted andamplified through Danamondigital employees andcreates the power ofpurposewillbe environment that motivates, inspiresandempowers into working blue print. Internal activities nurtures company its personality. Work place culture translated goal. and bethe preferedmeans fortheir financial needand essential forthe consumers’ insupporting their lifestyle, today’s digital world. Danamonhave tomakeitself alligned tocreate desirablestory ofourbrand. corporate to BODtoBOMshould be communicates and experience. AllDanamon’selements fromLoBsto in targetaudience life, through perception andreal Experience matters. solution andgiving them controlover their financial identify their financial needsandhelping them with products andfeatures aredesigned tohelp consumer and relevantemotional connection forthe brand. Our winning product valueproposition andstrong, insightful wholesale. group, needstobeknownconsumer both retailand Bank Danamonasamember ofMUFG,aglobalfinancial Reputation is abouthowthe consumers willremember Building Reputation -How wethought of. Culture is the DNA ofourcompany. Itis whatgives the Building Corporate Pride Consumer’s digital bankingbehaviour is inevitable in Digital asaTrue Driver ofRevenue Creating the perception ofDanamonis “ everywhere” Building Perceptual Brand Presence Scalethru and Solution centric communication is acombination of Solution Centric Communication

Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 101 PT Bank Danamon Indonesia Tbk. of 8% from IDR 4.2 trillion in 2018 and CASA grew grew CASA in 2018 and of 8% from IDR 4.2 trillion trillion in 2018 to IDR 1.7 trillion by 30% from IDR 1.2 to a leveraging was due increase This in 2019. Danamon Syariah expanded the which strategy, in the growth to greater branch network, leading funds. of third-party accumulation electricity payment service, Zakat, Infaq and sadaqah. service, payment electricity and Financing Leasing of Syariah development financing Sharia Financing. Cooperatives Employee from IDR end of 2019 grew to IDR 4.5 trillion by the in 2018, an increase of 12%. 4.0 trillion Fund Portfolio Syariah an increase trillion, IDR 4.6 reached In 2019, deposits Bancassurance products Bancassurance (PPA). Protection Amanah Prima Bill and Big Channel, Electronic Cash Management, Portfolio Financing Syariah focused on the In 2019, Danamon Syariah Previously, sales and distribution had been more product- sales and distribution Previously, now a more customer-centric is there whereas oriented, focus. products, of innovative development the In line with are all intensively products flagship Danamon Syariah’s new distribution Danamon’s throughout promoted network. • FOCUS / PRODUCT BUSINESS for solutions financial provides Danamon Syariah range of unique a comprehensive through customers and services. products sharia-based from mandate its retained In 2019, Danamon Syariah Board (BPKH) to Hajj Fund Management National the bank, investment manage hajj funds as a collecting partner bank, fund deposit bank and fund management continues Danamon Syariah license, this bank. Through from account opening hajj pilgrims prospective to serve hajj pilgrimage. for the to registering to continued side, Danamon Syariah financing the On called Syariah product financing unique its develop to customers, more benefits gives which Leasing, segments. and corporate commercial in the especially were implemented strategies Sales and distribution market share. Danamon Syariah’s augment to further • • Services GROWTH BUSINESS financing Danamon Syariah market growth, In line with of sharia aspects certain grew 12% in 2019, although more to secure improved can be further products growth. significant • Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching 2019 Financing products Financing Working Sharia Financing, Cooperative Employee Other deposit products include Tabungan BISA include Tabungan BISA deposit products Other Funding Products Funding prospective for account savings a is iB Haji Tabungan Financing. Capital Financing, Sharia Investment Financing, Financing, Investment Sharia Capital Financing, Home Sharia Leasing, Sharia Trade Financing, Sharia For Working Capital Financing Financing, Ownership Joint Sharia Bank, and Motor Vehicle Rural Sharia Umrah iB (umrah saving account), Tabungan account), Tabungan Umrah iB (umrah saving for sacrificial account BISA Qurban iB (savings animals), Giro iB (current account), iB Deposit, and Mudharabah with product savings transactional iB. FlexiMAX iB and are Danamon Lebih that principle Hajj pilgrims, which comprise of 2 products: RTJH RTJH of 2 products: comprise which Hajj pilgrims, Haji) to Tabungan Jemaah (known as Rekening connected directly is deposit that initial perform the Hajj Computerized Integrated government to the and iB Hajj Plan Savings. (SISKOHAT) System Banking Sharia Sharia Annual Report •

• PRODUCT AND SERVICES PRODUCT is products and creative of distinctive development The Banking. Syariah Danamon’s of success the to key the customer- and competitive following the offers UUS and services: products oriented Syariah Banking Unit (UUS). The vision of UUS is to help to help of UUS is vision The Banking Unit (UUS). Syariah principles. millions of people to prosper under sharia from consumers all segments Banking serves Syariah in institutions financial and to corporations and SMEs by all Danamon needs, supported order to fulfill customer channels. and distribution technology infrastructure, population in the world, Indonesia has significant Indonesia has significant world, in the population for further halal ecosystem the to develop potential market growth. sharia BANKING SYARIAH DANAMON based on business division Danamon’s Banking is Syariah managed by Danamon’s law. It is of Islamic principles the country’s approximately 267 million people are Muslims. 267 million people are Muslims. approximately country’s at IDR 335 trillion recorded was asset industry sharia The year-on-year. 2019, growing 10% as of November share had increased to 6% in October market Sharia the for opportunity tremendous the indicating 2019, largest Muslim the With further. to grow industry sharia INDUSTRY rate a higher grew at banking industry Indonesia’s sharia of the 87% as about 2019, in banking conventional than Main Management Company Management Operational Good Corporate Corporate Corporate 102 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data PT Bank DanamonIndonesia Tbk. - - awards areasfollows: recognition of its excellent service to customers. The In 2019,DanamonSyariah received several awardsin AWARDS parent banksystem. minimizing andintegrating several processes within the integrated. This hasimproved customer service levels by technology have beenupgradedandrefinedtobemore management andgoodgovernance. Infrastructure and Danamon Syariah hascontinued toimprove risk and products. capability, especially inthe promotion ofsharia banking resources productivity byenhancing knowledgeand Danamon Syariah hascontinued toimprove its human Brand Awards Awards Unit category, InfobankBankingService Excellence 1st inSharia Business Unitcategory, InfobankDigital 3rd inBestOverall Performance, Sharia Business by competitors. be morecompetitive than services and products offered Products willbeoriented tothe needs ofcustomers and innovative andunique products dedicated tocustomers. Concurrently, Danamonwillcontinue to bring forth services through digital bankingplatforms. banking, DanamonSyariah willimprove its products and line with Bank’sstrategy in2020todevelop sharia digital to further expandits sharia bankingservices in2020.In Danamon has conceived a number of strategic initiatives 2020 BUSINESS PLAN - - - - 2nd inBestOverall MinusE-Bankingcategory, 1st inBestTeller, InfobankBankingService Excellence 3rd inBestTelephone Sharia Bank, Infobank Banking 2nd inBestCustomer Service, InfobankBanking Infobank Service Excellence Awards Awards Service Excellence Awards Service Excellence Awards Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 103 Head of Head of Head of Head of AML Unit AML Unit Internal Audit Internal Audit Compliance & Compliance & Business Business HCGA HCGA Center of Center of CREM CREM CREM Excellence Head of Head of Head of Head of Head of Head of Application Automotive Automotive & Front-end & Front-end University University Corporate Corporate Business non Business non Chief of HC Chief of HC Head of Digital Head of Digital Head of Digital Head of Digital Head of Digital Operation & CREM Officer CREM Officer Management & Management & Support Support Business Business Control & & Control Operation Operation Head of IT Head of IT Head of IT Head of IT Head of IT Head of IT Enterprise Enterprise Chief of IT Chief of IT Head of IT Head of IT & Front-end & Front-end Compliance Compliance Applications Applications Applications Management Management Management Infrastructure Infrastructure Head of Business Head of Business PT Bank Danamon Indonesia Tbk. Officer Officer Head of Head of Support Support Head of Head of Chief of Strategy & Strategy & Management Management Management & Management & Transformation Transformation Transformation Central Change Central Change Risk Legal Legal Head of Head of Head of Head of Head of Head of Chief of Recovery Recovery Collection Collection & Collection & Collection Head of Risk Head of Risk Management Management Loan & Asset Loan & Asset Analytic & MIS Analytic & MIS Head of Credit Head of Credit Head of Credit & Legal Officer & Legal Officer Operation Risk Operation Risk & Tax & Tax Head of Head of Chief of Head of Head of Head of Head of Head of Head of Head of Planing & Planing & Finance Finance Funding Funding Relation Relation Corporate Corporate Secretary Secretary Corporate Corporate & Investor & Investor Procurement Procurement Accounting Accounting Procurement Procurement Management Management Head of Corp Head of Corp Financial Officer Financial Officer Finance & Cash Finance & Cash Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching CREM CREM Officer Officer Head of Head of Head of Head of Chief of Support Support Operation Operation Chief Executive Officer Chief Executive Officer Assurance Assurance Operation & Operation & Head of Quality Head of Quality Officer Officer Head of Head of Head of Head of Chief of Analytic Business Business Customer Customer Marketing Marketing Experience Strategic & Strategic & Communication Head of Brand & Head of Brand & Head of Support Service & Service & Partnership Partnership Distribution Distribution Head of SSD Head of SSD Management Management Management Regional SSD Regional SSD Chief of Sales, Chief of Sales, Head of Sharia Head of Business Head of Business Nmcy Nmcy Nmcy Nmcy Nmcy Head of Head of Head of Head of Head of Head of Head of Solution Solution National National Head of Head of Durable Durable Financing Financing SND System SND System Head of Mcy Head of Mcy & Multibrand & Multibrand Retention & Retention & & Retention & Retention National Used National Used Yamaha Nmcy Nmcy Yamaha National Non National Non Head of Non Head of Non National Honda National Honda National Suzuki National Suzuki Head of Keday Head of Keday Dealer Channel, Dealer Channel, Dealer Channel Dealer Channel Sales Officer Officer 2019 Chief of Portfolio Chief of Portfolio Car 1 Car 1 Car 2 Sales Sales Head of Head of Head of Head of Head of Head of Head of National National Used Car Used Car National New National New National New National Fleet National Fleet Officer Subsidiary Company-ADMF Subsidiary Business Review of of Review Business Annual Report Aliance Aliance Head of Head of Strategy Business Business Aliance Strategy Aliance Strategy Chief of Business Chief of Business Main Management Company Management Operational Good Corporate Corporate Corporate 104 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data (friendliness), cerda Adira Finance showstowardits customers: has avery profoundmeaning. Itreflects the valuesthat (Companion) embodies the Company’s philosophy and friend they can turn to for solutions. The term “Sahabat” hopes that its customers will view Adira Finance as a “Sahabat Adira” (Adira Companion)vision, the Company relationships with lifelong customers. Inlinewith its stages oftheir life, inordertoestablish long-term Adira Finance strives toserve customers atdifferent conviction toshoreupsustainable performance. is amanifestation oflong-term businessstrategy with a partners underthe taglineFaithful Friends Forever. This cooperative relationships with customers andbusiness The Company is committed to building long-term Indonesian Society. the Sustainabilityofthe CompanyandProsperity of Adira Finance hasavision ofCreating SharedValuefor Finance. actions, Danamon presently owns 92.07% of Adira with 75%ownership. Followingsubsequent corporate Offering andDanamonbecame the majority shareholder in 1991. In 2004, Adira Finance conducted anInitial Public ADMF) wasfoundedin1990 andcommenced operations PT Adira DinamikaMulti Finance Tbk(Adira Finance, PROFILE investment financing, andservice financing. sharia businessunitcovers saleandpurchase financing, based financing principles. The scopeofthe Company’s and regulations inthe financial sector, aswellsharia- extent that these donotconflict with applicable laws operating leasesand/orother fee-basedactivities tothe approved bythe Financial Services Authority, aswell multipurpose financing, other financing businessactivity investment financing, workingcapitalfinancing, The businessscopeofAdira Finance covers the following: PRODUCTS ANDSERVICES m PT Bank DanamonIndonesia Tbk. A u peduli S (intelligence), (compassion), and Adir A

mem diperc B eri kemudahan A ya komi (trustworthiness), T men (convenience), (commitment). rama H 1. are: the beginning of the year. Some those conducted in 2019 Adira Finance setoutits Strategy andWorkProgramat STRATEGY ANDWORKPROGRAM2019 furniture, andothers. durables such aselectronics, householdappliances, motorcycles andcars,both usedandnew,aswell Products offeredincludeautomotive vehicles, including 2. Strategies inBusinessDevelopment For the above reason,ajointfinancing scheme is In addition, Adira Finance seekstomaintainits The companywillcontinue todiversify funding to Strategies inmanaging optimal funding - - - - funds. with the intention ofobtainingacompetitive costof bonds andsukuk(sharia ‘compliant’bonds)issuance, loans, aswellfromthe capitalmarketthrough the followingbankloans:both on-shoreandoff-shore sources offunding, ADMF’sborrowingconsisted of consumer financing. Indiversifying alternative a priority for Adira Finance in the disbursement be update per31December 2019. the gearing ratio atamaximum level of10 times. To body underOJKRegulation No.29/2014, which sets gearing ratio within the limits setbythe supervisory bonds. operations, and payment of maturing loans and the availability of funds for financing purposes, maintain adequate levels ofliquidity andensure - increasing crossselling; optimize speedincredit approval; programs toincreasemarketshare; by offering marketing campaigns and sponsor sales prospects; multipurpose loansbyapplying CRMNext for momobil andmomotore-platforms. Increasing synergy inthe parentcompanyand Building a digital order process in order to Maintaining goodrelationships with dealers Increasing sales in used vehicle financing and Optimizing marketplace platforms through Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 105 11.5% 0.0% Y-o-Y 16.2% -5.9% -0.9% -0.4% 1.7 4.8 11.8 31.5 38.2 2018 1,815 PT Bank Danamon Indonesia Tbk. Optimizing market place platforms through the the through platforms market place Optimizing and of asset quality monitoring tight Continuing to obtain sources funding to diversify Continuing Continuing investment in technology for further for further in technology investment Continuing improvement in Enterprise Resources Planning Planning Resources in Enterprise improvement and (DMS), System Marketing Digital (ERP), processing. digital momobil and momotor e-platforms. collections. enhancing cost of funds. optimal - - - - 1.6 4.4 11.8 35.1 37.8 2019 2,109 Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching DETAILS 2019 high growth business segments, mainly in the mainly in the business segments, growth high and used vehicles. loan segment multi-purpose and multipurpose loans by applying CRMNext for for CRMNext loans by applying and multipurpose sales prospects. to programs and sponsor campaigns marketing increase market share. approvals. credit accelerate further in capacity and productivity boosting Further Enhancing relationships with dealers through through dealers with relationships Enhancing in order to order process digital the Improving Further increasing sales in used vehicle financing financing increasing sales in used vehicle Further Strategies in HR Development in HR Strategies and comprehensive a systematic through and loyalty competence employee to improve continues Finance Adira - - - - the Company has Adira Corporate University (AFCU) as a forum to foster and develop human resources so that it it that so resources human and develop to foster as a forum (AFCU) University Corporate Adira Company has the employees. employee quality can produce training program and to improve the process of evaluating employee performance more objectively. In addition, In addition, objectively. more performance employee of evaluating process the to improve training program and Annual Report Market Share - Cars (%) Share Market 2020 AND PLAN STRATEGY out to be carried strategies work plan and Finance’s Adira following: in 2020 include the Total Assets (Rp trillion) Assets Total (Rp billion) Net Profit Financing (Rp trillion) New Financing (%) Non-performing (%) - Motorcycles Share Market PERFORMANCE 2019 following table: are outlined in the business performance 2019 Details of the 3. Main Management Company Management Operational Good Corporate Corporate Corporate 106 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data industry, especially forthe SME segment. of 2019, despite asset quality deterioration in the banking ratio remainedatamanageablelevel of3.0%atthe end compared tolastyear of3.1%and10.6% respectively. NPL respectively, atthe endof2019,both slightly declined 2018. The ROAbeforetaxandROEwereat3.0%10.3% improved by3.9% toreachRp4.07 trillion comparedto in 2019,Danamonmanagedtoperformwell2019. NPAT Despite the challenging situations inthe bankingindustry customers including inthe formofdistributor financing, cashmanagement, mortgage loans, andpayrollaccounts. addition, MUFG collaboration enabled Danamon to tap into the ecosystems of Japanese and multinational corporate In 2019Danamoncontinued its strategy inrecent years ofengine growth diversification, andprudent lending. In PT Bank DanamonIndonesia Tbk. Review Financial presented fairlyinallmaterial respects Accountants with the entity’s financial information established bythe IndonesianInstitute ofCertified Public Public Accounting Firm underthe Audit Standards Wibisana, Rintis, and Partners (a member of PwC Global) Financial Statements have beenaudited byTanudiredja, end Financial Statements asofDecember 31,2019. The The financial review outlinedherein referstothe year- Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 107 - - 70 536 3,571 (154) 4,107 (267) 2,439 4,926 14,241 16,680 (1,424) (3,267) 172,977 132,589 (8,066) Total - 2 529 859 2,121 1,159 (193) (816) (482) 2,650 (300) 76,782 58,020 2018 Wholesale - PT Bank Danamon Indonesia Tbk. 39 1,910 12,120 4,033 2,909 (1,124) 96,194 (7,251) 14,029 74,569 (2,785) Retail¹ 67 372 (10) (781) 4,241 17,517 2,288 2,938 (269) 3,869 5,488 (905) 14,579 (4,719) (9,319) 137,658 177,063 Total - 932 642 Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching 1,300 (368) (399) 4,202 3,560 (1,219) 58,561 (1,283) 90,773 2019 Wholesale² - 389 2,169 1,632 11,019 (537) 2,296 13,315 79,097 86,290 (8,100) (3,436) Retail¹ 2019 In billion Rupiah Consisting of SME, credit card, sharia, insurance business, micro business, consumer finance, pawn broking, and retail banking. and pawn broking, finance, business, consumer business, micro insurance sharia, card, credit of SME, Consisting and treasury. institutions, financial banking, corporate of commercial, Consisting Net Income from Continuing Continuing from Net Income Operations Disposal from Net Income as held for classified group sale taxes after Net Profit Profit Before Tax Before Profit Expenses Tax Income AI Expense for Tax Income Divestment Expense for Tax Income Transformation Business Operational Expenses Operational Expenses Loan / Income Non-Operational (Expenses) Gain on Investment Cost Restructuring Assets Liabilities Income Net Interest Income Non-Interest Operations from Income Annual Report 1) 2) Main Management Company Management Operational Good Corporate Corporate Corporate 108 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data PT Bank DanamonIndonesia Tbk. 6.0% inthe currentyear. requirement fromBankIndonesia6.5%in2018to to Rp6.46 trillion lastyear followinglowerreserved Bank Indonesiadecreased toRp5.40trillion compared At the endof2019,Danamon’scurrentaccounts with was 8.9% in2019. 16.2%, while the reserve requirement inforeign currency Danamon’s GWMratio inRupiah was6.0%andPLM party fundsinforeign currency. GWM inforeign currency is setat8.0%fromtotalthird (PLM) is setat4.0%fromtotalthird partyfundsinRupiah. third-party fundsandMacroprudential Liquidity Buffer 6.0% eachforPrimary GWMdenominated inRupiah from Conventional Banksabove BankIndonesia’sprovisions of Requirements (GWM) in Rupiah and Foreign Currency for Danamon wasabletomaintainPrimary Minimum Reserve Current Accounts BankIndonesia with Cash contributed 1.5% toDanamon’stotalasset. cash position ofRp2.82trillion asofDecember 31,2018. December 31,2019,anincreaseof4.5%comparedtoits Danamon’s cashposition reached Rp2.95 trillion asof Cash in 2019. increase inassets mainlydue toanincreaseinthe netloanwhich grewfromRp130.15trillion in2018toRp136.78 trillion Total Danamonassetasof2019stoodatRp193.53 trillion, 3.6% increasedcomparedtoRp186.76 trillion lastyear. The Assets 2019 FINANCIAL POSITION REPORT Total assets Others Fixed assets-net Government Bonds receivable)-net Loans (includeconsumer financingreceivable andlease Marketable Securities-net Placement withOtherBanks&BankIndonesia-net Current Account at OtherBanks Current accounts wihBankIndonesia Cash Asset Table in securities especially inBankIndonesiatoRp2.62 trillion 2019. The increasewasprimarily due tohigher investment by 2.8%fromRp9.15 trillion lastyear toRp9.41 trillion in Danamon bookedanincrement ininvestment insecurities Marketable Securities billion, higher comparedto2018’sfigure ofRp0.25billion. placements with other banksandBIamounting toRp2.29 Danamon allocated reserves forimpairment of2019 compared toRp1.24 trillion in2018. placement toother banksincreasedtoRp2.23trillion trillion in2019comparedtoRp7.33 trillion lastyear. While foreign currency placements inBankIndonesiaofRp2.94 to Rp8.57trillion in2018.Mainlydue toadecrease in BI reached Rp5.59 trillion; decreased by34.8%compared As ofDecember 2019,placements with other banksand Placements Other with BanksandBankIndonesia 2019. account fromRp0.20trillion in2018toRp1.21 trillion in Rp2.62 trillion mainlydue toanincreaseinRupiah current 2018. In2019,the accounts wereincreasedby88.6% to total assets reached 1.4% in2019comparedto0.7% Danamon’s currentaccountatother banks’portion of Current AccountatOther Banks 2019 193,534 136,780 14,227 14,774 9,406 5,403 2,616 5,591 2,951 1,786 2018 186,762 130,154 10,973 15,338 6,460 2,824 8,576 1,903 9,149 1,387 Annual Report (InbillionRupiah) growth YoY -34.8% -16.3% 88.6% 29.7% -3.7% -6.1% 3.6% 4.5% 2.8% 2019 5.1% Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 109 0.7% 8.9% 5.2% 18.0% -14.2% YoY YoY YoY 8.6% 6.9% 5.2% 5.2% -1.7% -1.6% 17.5% -7.2% 16.5% 51,9% -4.7% -5.6% -11.3% -11.8% -0.8% -18.8% -10.0% growth growth growth (In billion Rupiah) (In billion Rupiah) (In billion Rupiah) 1,594 21,033 52,092 52,092 59,800 134,519 7,113 2018 2018 2018 6,291 2,109 2,639 5,534 5,843 9,959 3,048 16,150 4,400 19,233 10,882 36,228 54,202 55,460 134,519 104,572 PT Bank Danamon Indonesia Tbk. 1,736 18,052 61,450 60,222 141,460 2019 2019 2019 4,911 9,561 2,144 1,898 6,601 3,880 2,906 6,806 9,406 15,889 10,700 57,946 22,607 35,956 60,222 109,971 141,460 in 2019 compared to Rp130.15 trillion in 2018 mainly due in 2018 mainly due Rp130.15 trillion in 2019 compared to by Banking segment Enterprise the in to improvement from Danamon’s portfolio 6.0% as well as a mass-market banking. and consumer Finance, Adira subsidiary, loans grew by 18.0% to Rp 61.45 In 2019, working capital investment hand, other the On trillion. Rp52.09 from trillion 14.2% to Rp18.05 trillion. by loans declined Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching Loan by type Loan by Geography Loan by Economy Sector Loan by Economy 2019 Kalimantan South Sumatra and NTB Bali, NTT, Total North Sumatra Java West Java East and Yogyakarta Java Central and Papua Maluku Sulawesi, Jakarta, Bogor, Tangerang, Karawang, Bekasi dan Lampung Bekasi Karawang, Tangerang, Bogor, Jakarta, Real Estate, Leasing, Services and Servicing Companies Services Leasing, Estate, Real Others Total Household and Consumer Financing Household and Consumer and Retail Grocery Manufacturing Communications Warehousing, Transportation, Expor Total Consumption Capital Working Investment Annual Report sector grew 8.6% to Rp60.22 trillion from Rp55.46 trillion last year. Manufacturing loans also grew double-digit in 2019. in 2019. loans also grew double-digit Manufacturing last year. trillion from Rp55.46 to Rp60.22 trillion grew 8.6% sector Loan by geography-Gross (bank only) Based on economic sectors, household and consumer financing contribute 42.6% to Danamon’s total loan. In 2019, this to Danamon’s total loan. In 2019, this 42.6% contribute financing household and consumer sectors, Based on economic Loan by sector economy-Gross Loan by sector Loan by type-Gross Loan by type-Gross year to Rp5.06 in 2019. to Rp5.06 year Loans consumer and lease receivables loans including Net trillion to Rp136.78 by 5.1% grew receivables financing from Rp1.05 trillion in 2018; while investment in Banks in Banks investment in 2018; while trillion from Rp1.05 last year from Rp2.05 trillion trillion to Rp1.75 declines last trillion from Rp6.09 bonds also decline and Corporate Main Management Company Management Operational Good Corporate Corporate Corporate 110 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data LOAN COLLECTIBILITY PT Bank DanamonIndonesia Tbk. Rp10.05 trillion fromRp7.88trillion lastyear. denominated government bondswhich increaseto Government bonds holdings due to increasing Rupiah compared toRp10.97 trillion lastyear. The increasein reached Rp14.23trillion in 2019increasedby29.7% Bank Danamon’sinvestment in government bonds Government Bonds able tobookapositive growth inthe currentyear. slow downinthe automotive industry, Adira Finance still is trillion in2019,comparedtoRp28.26trillion. Despite the consumer financing receivables grewby4.8%toRp29.62 and finance lease receivables. Adira Finance’s net consolidated inthe formofconsumer financing receivables In addition tobankloans, Danamon’s loanswere Consumer Financing andLease Financing Receivables Rupiah. Danamon’srupiah loanslightly grew4.0%to Based on currency, 93.9% of Danamon’s loan was in Credit-Based onInterest &Currency-Net year with the same reason. special mention also increased to 10.3% from 9.7% last in bankingindustry, especially inthe SME segment. Its 0.3% comparedtolastyear, due tolowercredit quality principle. Danamon’sNPLstoodat3.0%in2019,increase ensure that risk management adheres tothe prudential Danamon continued tomanageits assetquality to disbursed bythe Bank.Thoseareasgrew6.9% YoY toRp57.95 trillion fromRp54.20 trillion lastyear. From the geographical standpoint,Jabodetabek, Karawang, and Lampung contributed the most out of total loans Current Special Mention Gross NPL Total Fixed Floating Total Foreign Currency Rupiah By typeandcurrency Interest Rate 1.2% toRp68.23trillion this year. trillion lastyear; while Danamon’sfixed loandeclined by increased 12.2%toRp68.55trillion comparedtoRp61.07 Based onthe interest rate, Danamon’s floating loan to Rp6.73 trillion in2018. Foreign currency loansgrewtoRp8.39 trillion compared Rp128.39 trillion comparedtolastyear Rp123.42trillion. billion 22.2%decreased comparedtolastyear. investment ofcapitalgoodsin2019 reached Rp211.69 buildings, office equipment, andmotorvehicles. The total Danamon’s investment infixed assets consists ofland, continued toshrink down. deduction fromthe closureof Micro Branches which BNP merged assets. Also, there was animpact of asset no significant addition offixed assets this year, except was mainlydue tonormalregular depreciation with Rp1.79 trillion fromRp1.90 trillion lastyear. The decrease Danamon’s fixed assets in2019decreased by6.1%to Fixed assets 2019 2019 136,780 136,780 128,391 68,228 68,552 8,389 86.7% 10.3% 3.0% 2019 2018 2018 130,154 130,154 123,425 69,083 61,071 6,729 Annual Report (InbillionRupiah) (InbillionRupiah) growth growth 87.6% 9.7% 2.7% 2018 YoY YoY 24.7% 12.2% 4.0% -1.2% 2019 5.1% 5.1% Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 111

1.9% 3.1% 1.9% 2.3% 0.0% 12.7% 81.7% -3.7% -12.1% -0.3% 39.5% 42.2% 42.2% -18.5% -38.4% -22.2% -40.5% 100.0% -100.0% -100.0% YoY YoY YoY growth growth growth (In billion Rupiah) (In billion Rupiah) - 2

(In million Rupiah) 25 248 3,152 3,152 11,828 9,640 31,001 12,233 15,885 57,865 33,945 272,118 36,200 107,696 110,848 204,915 107,696 144,822 2018 2018 2018 PT Bank Danamon Indonesia Tbk. - -

25 9,971 4,914 4,483 4,483 15,837 19,097 121,913 13,446 65,762 55,697 38,258 10,400 148,117 114,275 211,686 109,792 109,792 2019 2019 2019 Liabilities growth, to support credit source Danamon’s funding from other deposits deposits, of customer consists a focus and borrowings. Through securities banks, issued by 2.6% was improved ratio on granular Danamon’s CASA compared to 47.1% last year. in 2019 to 49.7% Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching Liabilities Fixed Assets Fixed Total Deposits from Third Party from Third Total Deposits 2019 Total Land Buildings Equipment Office Vehice Motor in Progress Contruction Time Deposit Time customer Deposits from Total Others Total Total third party fund third Total Securities issued Borrowings loan Subordinated Deposits from other banks Deposits from Savings banks other Deposits from Deposits from customer Deposits from account Current Securities sold under repurchase agreements Securities sold under repurchase Deposits from customer Deposits from Annual Report sources from lower ticket size current accounts/demand deposits and savings. and savings. deposits current accounts/demand size from lower ticket sources Customer Deposits Customer deposits Danamon’s total amount of customer liabilities. to Danamon’s a major contributor deposit is Customers lower-cost funding prioritized Danamon has consistently in 2018. trillion Rp107.70 than higher trillion, Rp109.79 reached Table of Liabilities equipment, and motor vehicles. equipment, Assets Other other of accounts consisting assets, Danamon’s other 3.7% to Rp14.77 by decreased above described those than last year. trillion in FY 2019 from Rp15.33 trillion On top of that, Danamon also has the addition of capital of capital addition Danamon also has the On top of that, Parahyangan Bank Nusantara with merger from the goods assets total net book value of additional a (BNP), with office buildings, of land, consist Rp19.4billion, amounting Main Management Company Management Operational Good Corporate Corporate Corporate 112 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data is rated AAA(IDN) byPTFitch Ratings Indonesia. PT Pemeringkat EfekIndonesia(Pefindo),while the bond to Rp2.49 trillion. BankDanamon’sMTNis rated idAAA by and MTN, minusunderwriting feeandothers, amounted the businessgrowth. The Bank’stotaloutstanding bonds to Rp2.0trillion andRp500.0billionrespectively tosupport In 2019,BankDanamonissued bondsandMTNamounted Securities Issued institutions. borrowing fromvarious domestic andforeign financial Danamon’s funding source diversification alsocame from borrowing fromRp7.83trillion toRp6.95 trillion in2019. borrowing mainlydue toadecrease inforeign currency decrease fromRp11.83 trillion lastyear. The decrease in Total borrowingsin2019,amounted toRp10.40 trillion liquidity gapsandinterest rate risk. year is managedtomaintainthe Bank’sabilitytohandle Long term financing with amaturity ofmorethan one Borrowing billion lastyear toRp1.98 trillion in2019. mainly due toanincreaseincallmoneyfromRp290.0 Rp4.48 trillion from Rp3.15 trillion last year. The increase Deposits fromother banksin2019increasedby42.2%to Deposits fromOther Banks PT Bank DanamonIndonesia Tbk. due tothe gainfromAdira Insurance divestment. strength goingforward. However, the decline wasmorethan offsetbyanincreaseinnon-operating income, primarily income declined, largelydue toadditional provisionings takentoboostNPLcoverage andimprove balance sheet Danamon’s NPATimproved by3.9% toreachRp4.07trillion comparedtoRp3.92 trillion NPATin2018.Net operating PROFIT/LOSS REPORT Total Equity Non-Controlling Interest Retained Earnings Other Equity Components Additional Paid UpCapital Issued andFullyPaid UpCapital Description Danamon’s equity attributable toequity holdersofthe Danamon’s equity continued tostrengthen in2019. EQUITY trillion comparetoRp12.41trillion. mentioned above, slightly declined by20.1%toRp9.97 Other liabilities consisting of accounts, other than those Other Liabilities Efek Indonesia(Pefindo). All ofADMF’sbondsarerated idAAA byPTPemeringkat in 2018. Rp637.0 billionin2019lowercomparedtoRp728.0 Finance hadunmatured SukukMudharabah amounting to higher than Rp8.91 trillion lastyear. Inaddition, Adira underwriting feeandothers, amounted toRp10.32 trillion business. Adira Finance’s totaloutstanding bonds,minus Adira Finance, issued bondstosupportthe financing Moreover, BankDanamon, through its Subsidiary, 2018 toRp30.83trillion in2019. improvement ofretained earnings fromRp28.30 trillion in compared toRp41.31 trillion in2018mainlydue tothe parent entity grew by 8.8% to Rp44.94 trillion in 2019 480 30,834 5,996 7,986 45,417 121 2019 629 (154) 7,256 5,901 28,308 41,940 2018 Annual Report (InbillionRupiah) 95 95 (149) 730 730 3,477 growth 275 275 2,526 YoY 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 113 1.8% 2.5% 3.3% 8.3% 3.9% 2.4% 18.1% 6.0% 11.4% 19.6% -9.6% -17.2% -36.5% -30.5% 1,054.3% YoY growth (In billion Rupiah) 185 188 536 3,571 5,158 1,354 4,107 (232) 3,922 3,939 3,696 4,926 14,241 12,779 409.21 2018 PT Bank Danamon Indonesia Tbk. 167 155 372 1,619 4,175 2,214 4,241 3,274 3,788 4,074 3,869 5,488 14,579 416.78 15,093 2019 Net Income from Continuing Operation from Continuing Income Net by 8.3% increased operation from continuing income Net last compared to Rp3.57 trillion in 2019 to Rp3.87 trillion higher and in loan growth Besides improvement year. capital to the increase was mainly due the income, interest divestment. Insurance of Adira gain from transaction tax Before Income Income in 2019, income Due to an increase in non-operating increase trillion, pre-tax profit of Rp5.49 posted Danamon last year. trillion compared to Rp4.93 by 11.4%, parent holders of the to equity attributable Income Net entity holders equity to the attributable Danamon’s net income, Rp4.07 trillion to by 3.9% grew entity, parent the of tax expense in 2019. taking into account income after per share Rp416.78 Danamon’s earning per share reached per share in 2018. compare to Rp409.21 Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching Description 2019 Income Before Tax Before Income Expense Tax Income operation continuing from Net income as held-for-sale classified disposal group from Net income Expenses Tax Income After Income Net interest income Net interest income Other operating expense Other operating Income Net Operating income/(expense)-net Non-operating Net Income Attributable to Equity Holders of the Parent Entity Parent Holders of the Equity to Attributable Net Income Interest Non-controlling to Attributable Net Income amount Share-full Basic Earnings Per equity holders of the parent to attributable income Comprehensive entity interest Non controlling to attributable income Comprehensive Annual Report 36.5% to Rp3.27 trillion compared to Rp5.16 trillion last last trillion compared to Rp5.16 to Rp3.27 trillion 36.5% income in Danamon’s net operating decrease The year. cost of credit to an increase in the was mainly due and an segments in certain following lower asset quality effort to boost NPL coverage. increase to Rp2.94 trillion compared to Rp2.72 trillion last last compared to Rp2.72 trillion trillion increase to Rp2.94 losses also for impairment Danamon’s allowance year. trillion to Rp3.27 compared trillion to Rp4.71 increased to boost NPL coverage. last year Income Operating Net by decreased income Bank Danamon’s net operating compresion which is impacted from shifting on loan loan on from shifting impacted is compresion which lower on portion more with composition portofolio Banking and portofolio in Enterprise rate interest bearing Banking portofolio in Micro lower high-interest Expenses Operating Other slightly expenses Danamon’s general and administrative Net Interest Income Interest Net rose 2.4% to Rp14.58 income Danamon net interest increase The 2018. in trillion Rp14.24 to compared trillion growth loan with aligned was income interest net in margin off with netted in Danamon’s key segments, Main Management Company Management Operational Good Corporate Corporate Corporate 114 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data PT Bank DanamonIndonesia Tbk. of Adira Insurance divestment. for-sale) netted offwith cashprovided fromtransaction and Government Bonds(held-to-maturity andavailable- proceeds fromsalesofmatured marketablesecurities Rp3.39 trillion lastyear. This wasdue toadecrease in stood atRp2.03 trillion surpluscomparedtoof Danamon’s netcashprovided frominvesting activities Cash FlowsfromInvestments in time depositfromthird partyfund. Rp4.44 trillion in2018,which wasmainlydue toadecrease operations of Rp9.01 trillion in 2019 compared to surplus Bank Danamonposted adeficit netcashflowfrom Cash FlowfromOperations CASH FLOW REPORT the Financial Services Authority, andallapplicable prudence andcomplies with Bank Indonesiaregulations, Bank Danamonconsistently conducts businesswith KEY FINANCIAL RATIOS Commitment payables andContingent payables-net Contingent payables-net Total contingent payables Standby letters ofcredit- Guarantee issued intheform ofBankguarantees- Contigent payables Total contingent receivables non-performing assets Guarantee from otherbanks-Interest receivable on- Contigent receivables Total commitment payables Outstanding irrevocable-letters ofcredit Unused loanfacilities to-debtors Cash andcashequivalents at theendofyear Cash andcashequivalents at beginningofyear Net effect onchangesinexchange raetes oncashandequivalent Net (decrease)/increase incashandequivalent sale Net decrease incashandequivalents from disposalgroup classified asheldfor Net Cashflows provided from/(used by) from financingactivities Net Cashflows provided from investing activities Net Cashflows (usedby)/provided from operating activities Commitments andContingencies Payables Description mainly due tolowerpayment ofprincipals ofbondsand Rp1.09 trillion comparedtoRp4.38 trillion deficit last year, Net cashprovided fromfinancing activities surplusby Cash FlowfromFinancing trillion lastyear. stood atRp5.77trillion 1.0% lowercomparedtoRp5.83 commitment payablesandcontingent payablesin2019 from settlements and bank guarantees received. Total net customers aswellacontingency inthe formofincome Danamon is committed toproviding loanfacilities to Commitments andContingencies borrowings. are explainedfurther asfollows. economic growth. Some of the mainkeyfinancial ratios ratios stipulated by the regulators despite limited legislation. Danamonwasabletomeet the financial 144 95 95 4,089 652 652 557 557 1,682 1,538 4,741 5,771 2019 4,597 144

66 66 45 45 4,446 240 4,206 3,850 597 597 5,827 531 531 1,932 1,977 2019 2018 (9,005) (5,881) 19,029 13,075 1,093 2,031 (73) Annual Report

- (InbillionRupiah) (InbillionRupiah) 99 99 (240) 26 26 29 (394) 55 55 (56) (295) 239 239 295 295 535 growth 2018 YoY (4,382) 19,029 15,834 4,445 (344) 3,387 3,106 2019 89

Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 115 2.5 2.0 0.3 11.8 -0.1 -0.6 YoY growth *(In billion Rupiah) 3.1 2.7 8.9 97.2 22.2 70.9 2018 PT Bank Danamon Indonesia Tbk. 8.3 3.0 3.0 82.7 24.2 99.7 2019 stock, general reserves, profits of past years, current current of past years, profits stock, general reserves, less net income, comprehensive other earnings, year losses for impairment of PPA and allowance excess on non-earning assets PPA and earning assets, on be calculated. must that of of 1.25% (maximum assets productive required the loan which and subordinated risk) RWA for credit the 2. in tier as capital instrument qualified is and additional reserves of capital minus deferred of capital minus deferred reserves and additional in inclusion and assets, intangible calculations, tax subsidiaries. of of premiums consist capital reserves Additional of PPA on of general reserves 2 capital consists Tier The core capital (tier 1) consists of paid-up capital of paid-up capital 1) consists core capital (tier The Pillar I (Credit, Market, and Operational Risk) but also take but also take Risk) Market, and Operational Pillar I (Credit, (Credit risks of other capital adequacy into consideration Liquidity Risk, Banking Book Interest Risk, Concentration in Pillar 2 Basel Impact) as specified and Stress Test Risk II & OJK’s regulation. ii. Capital Management monitoring done through is Capital management based on industry capital base and capital ratios the BI’s and capital adequacy. standards in order to measure based primarily is measurement approach to such OJK’s capital minimum the and monitoring measurement on the available capital resources. to the requirement BI’s and OJK’s regulations Bank has fulfilled the The Requirement Capital Adequacy Minimum the regarding (RWA). Assets of Risk-Weighted and calculation (CAR) Capital Internal Bank has also implemented The mechanism, (ICAAP) Process Assessment Adequacy it does by Bank where process self-assessment is which under risks from basic capital adequacy not only cover CAPITAL STRUCTURE CAPITAL of: consists structure Bank’s current capital The i. Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching in % 2019 RIM CAR-Consolidated NPL NIM BOPO - Bank Only tax) (before ROA Annual Report from its granular funding through Danamon branches Danamon branches through granular funding from its network. to counterparty and commitment to providing financing to to financing to providing and commitment to counterparty in liquidity risk liquidity debtors. Bank Danamon measures Ratio Intermediation Macroprudential using management end of 2019 stood at 99.7%, at the position RIM “RIM”. or year- higher Despite last year. to 97.2% compared higher funding its to improve Danamon continued end RIM, funding cheaper its to prioritize by continuing franchise Danamon’s ROA before tax also slightly declined to 3.0% to 3.0% declined Danamon’s ROA before tax also slightly declined slightly as well as ROE which from 3.1% last year last year. compared to 10.6% to 10.3% Bank Liquidity it is because crucial is management Bank liquidity liabilities asset liquidity, structure, by funding influenced The profitability performance of Bank Danamon is of Bank Danamon is profitability performance The (ROA), on Assets of Return ratio using the measured (NIM), Margin Income (ROE), Net on Equity Return (BOPO). Revenue Operating to Cost Operating and compared to decline stood at an 8.3% Danamon’s NIM cost of funds and to an increase in the due last year 8.9% loan segment. lower margin of the composition a higher sufficient capital in order to meet the risks of fund of fund risks the capital in order to meet sufficient Minimum the in reflected as risk market and disbursement Danamon’s (KPMM). Requirement Capital Adequacy it 2019 stood at 24.2% an improvement CAR consolidated compares to 22.2% last year. Bank Profitability several ratios, including solvency ratios, profitability profitability ratios, solvency including ratios, several the indicates following The ratios. and liquidity ratios, profitability solvency, measure to of banks ratios financial and liquidity. Bank Solvency by having Bank’s solvency Bank Danamon ensures the ABILITY TO SETTLE ACCOUNTS PAYABLE AND AND PAYABLE ACCOUNTS SETTLE TO ABILITY COLLECTIBLES long- both obligations, all its Danamon’s ability to meet through measured is liabilities, and short-term term Main Management Company Management Operational Good Corporate Corporate Corporate 116 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data through transactions inforeign currencies. The Bank sheet positions both onthe assetandliabilitysides Foreign exchange risks arise fromonandoff-balance Impact ofExchange Rate Fluctuations changes ininterest rate. sensitivity analyzes on scenarios to see the impact of management is supplemented byregularly conducting vis the Bankposition ortransaction. The interest rate risk from anadverse movement inmarketinterest rates vis-à- Interest rate risk is the probabilitylossthat mayoccur Impact ofInterest Rate Changes ON DANAMON’S PERFORMANCE FLUCTUATIONS, ANDCHANGESINREGULATION IMPACT OFINTEREST RATE CHANGES,CURRENCY None noted. AFTER DATE OFACCOUNTANTAUDITREPORTS MATERIAL INFORMATION ANDFACTS OCCURING above lastyear’s target. profit, Danamon’sNPATprofitstoodatRp4.07trillion Rp153.0 trillion targetthat wesetlastyear. Interms of consolidated loanstoodatRp141.5 trillion lowerthan the despite missing the loantarget. in2019. Danamon’s In 2019, Danamon successfully achieved its profit target TARGET VERSUS ACHIEVEMENT COMPARISON revenue andcapital. impact ofthe exchange rate movement onthe Bank’s measures the foreign exchange risk tounderstandthe PT Bank DanamonIndonesia Tbk. Total CARratio Market Risk,Operational Risk) Risk Weighted Asset basedonCredit Risk, Total Core andSupplementalCapital Supplemental Capital(Tier-2) Common Equity (Tier-1) 2019 135,997 33,445 24.6% 32,181 1,264 Bank Only 130,387 2018 28,496 with Zurich Insurance CompanyLtd(“Zurich”). related Conditional SaleandSubscription Agreement (“CSSA”) On 27September 2018,the Bankhassigned the SIGNIFICANT AMOUNT OTHER IMPORTANTTRANSACTIONS OFA 2018. Rp1.37 trillion or35%ofits netprofitforthe fiscal year (AGM). In2019,BankDanamonpaidacashdividend of approval of the Annual General Meeting of Shareholders The dividend policy is determined annuallythrough the DIVIDEND POLICY gross written premium forAI. performance metric ofthe BankandADMFincontributing sold bythe BanktoZurich which calculated basedonthe provided that there is anincreaseinthe valueofshares of shares,the Bankwillreceive additional consideration an investment inanassociate entity. Aspartof the sale Bank. The AIownership willberecorded bythe Bankas statements ofAIarenolongerconsolidated intothe ownership ofthe AIsharesto19.81%, sothat the financial Association No.181dated 27November 2019,the Bank’s amounted toRp3.74 trillion. BasedonAI’sArticle of 22 November 2019,respectively with the sellingprice Bank andFSACapitalMarketon27September 2019and approvals fromFinancial Service Authority (FSA)Non- of 70%shareownership inAItoZurich basedonthe On 27November 2019,the Bankhascompleted the sale Dinamika (“AI”)of70%the sharesissued byAI. to the plantosellthe Bank’ssharesinPTAsuransiAdira 29,719 22.8% 1,223 YoY 3,685 3,726 5,610 1.8% 41 2019 170,789 39,893 41,298 24.2% 1,405 Consolidated 164,394 2018 36,561 35,193 22.2% Annual Report 1,368 (InbillionRupiah) YoY 4,700 6,395 4,737 2.0% 2019 37 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 117 26.7 39.2 36.8 General & General & Reserves* Mandatory Mandatory *(In billion Rupiah) date Payment Payment 12 May 17 12 May 18-Apr-18 26-Apr-19 PT Bank Danamon Indonesia Tbk. 934.3 1,372.8 1,288.5 Payment Payment Dividend Dividend Amount* Such transactions are carried out according to normal to normal out according are carried transactions Such with conducted as transactions such terms commercial to transactions More details related parties. non-related 2019 of the notes can be seen in the parties related with of PT Bank Danamon Tbk statements financial audited No. 47). (note will add value to our customers and franchise, and help and help and franchise, will add value to our customers bank in Indonesia. We a leading to grow as us continue and expertise strengths, MUFG’s tap on to be able will and delivery Danamon’s growth Bank network to facilitate value to all stakeholders. of long term Debt and Capital Restructuring any debt or capital not undertake Bank did In 2019, the restructuring. PROCEEDS OF PUBLIC OFFERING REALIZATION MTN of Rp500 billion and Bonds In 2019, Danamon issued registration. shelf up to Rp 5 trillion with of Rp 2.0 trillion lending were used to fund Danamon’s proceeds The business activities. not conduct In 2019, Danamon as a parent company did offering. public any stock issuance INFORMATION TRANSACTION MATERIAL OF INTEREST CONFLICTS CONTAINING None noted. WITH RELATED OF TRANSACTIONS DISCLOSURE PARTIES related with transactions various Danamon conducts which business activities of its conduct in the parties transactions. of interest do not cause any conflict With the completion of the legal merger, MUFG Bank, Bank, MUFG merger, legal the of completion the With core banking unit of MUFG, will (“MUFG Bank”), the Ltd. shareholder of Bank Danamon, controlling the become that and synergy collaboration allow greater will which Indonesian of the growth to the contribute will positively as a whole. economy and the banking sector groups. financial world’s leading one of the MUFG is in Bank Danamon MUFG’s investment that We believe Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching 97.48 143.22 134.44 full amount) Dividend per Share for per Share for Dividend Series A and Series B (Rp B (Rp A and Series Series 35% 35% 35% % Net profit % Net 12-Apr-17 26-Mar-19 20-Mar-18 Date of AGM Date 2019 2017 2018 2016 the Year the Profit for Profit for Annual Report converted into the Danamon network through operational operational Danamon network through into the converted assets as well as obligations, and rights All integration. of Bank BNP shall by law be transferred to and liabilities Bank Danamon. PT Bank Nusantara Parahyangan Tbk (“Bank BNP” or PT Bank Nusantara Parahyangan Tbk (“Bank BNP” or UFJ Financial Mitsubishi of Bank”), a member “Merged legal merger their completed Group, Inc. (“MUFG”) have merged on 1 May 2019, Bank BNP is Effective process. Bank. Surviving Bank Danamon as the with of Bank BNP 33 branches legal merger, Following the Divestment Bank has 2019, the 27 November on above, As indicated in AI to Zurich sale of 70% share ownership the completed Insurance. Merger PT Bank Danamon Indonesia Tbk (“Bank Danamon”) and proceedings. Expansion not undertake any expansion Bank did In 2019, the Bank BNP with merger the than other proceedings, below. section Acquisitions in the described MATERIAL INFORMATION ON INVESTMENT, INVESTMENT, ON INFORMATION MATERIAL OR ACQUISITION, DIVESTMENT, EXPANSION, AND CAPITAL OF PAYMENT RESTRUCTURING Investment investment any undertake not did Bank the 2019, In SIGNIFICANT CHANGES OCCURING IN THE BANK IN THE BANK CHANGES OCCURING SIGNIFICANT GROUP IN 2019 AND BANK’S BUSINESS of the sale completion to the due above, As indicated are statements in AI, AI’s financial 70% share ownership been Bank, but have into the no longer consolidated method. by equity recorded SHARE OWNERSHIP PROGRAM FOR PROGRAM FOR OWNERSHIP SHARE AND EMPLOYEES MANAGEMENT yet, program no stock option In 2019, Danamon have or of Commissioners Board Board of Directors, for the employees. Main Management Company Management Operational Good Corporate Corporate Corporate 118 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data PT Bank DanamonIndonesia Tbk. impact onBankDanamonareoutlinedinthe followingtable: Some of the new bankingregulations issued by the Financial Services Authority and Bank Indonesia in 2017 and their CHANGES INREGULATION THATHAVE SIGNIFICANT AEFFECTONTHEBANK Financing (PKB) and Motor Vehicles Vehicles Loans (KKB) Advances of Motor Financing (PP), (FTV) for Property Financing to Value Property Loans (KP), to Value Ratio (LTV) for PBI/2018 about Loan of PBI No. 20/8/ 2019 regarding changes dated November 25, PBI No. 21/13/PBI/2019 Business Units(UUS) (BUS), and Sharia Commercial Banks (BUK), Sharia Commercial Banks for Conventional and Foreign Currency Requirement inRupiah Minimum Reserve PADG/2018 about PADG No.20/10/ second changesof 26, 2019 regarding PADG/2019 dated June PADG No.21/14/ No 4 3 5 2 1 Regulations Directors andKey Employees Board ofCommissioners, Board of PT Asuransi Adira Dinamika Tbk MUFG Bank,Ltd. PT Mitra Pinasthika Mustika Finance MUFG Bank,Ltd. Parties special with relation the with Bank 4. 3. 2. 1. LTV ratio for KPandFTVratio for PP: This regulation iseffective starting from July1,2019 2. 1. This regulation iseffective starting from December 2, 2019 3. 2. 1. Financing (PKB): Down Payment ofMotor Vehicles Loans (KKB)andMotor Vehicles 5. b. Must befulfilledonbiweekly average remain on3% a. Must befulfilledondailybasisdecrease from 2%to 1.5% from 5%to 4.5%: Decrease ofMinimumReserve Requirement inRupiahfor BUS/UUS b. Must befulfilledonbiweekly average remain on3% a. Must befulfilledondailybasisdecrease from 3.5%to 3% 6.5% to 6%: Decrease ofMinimumReserve Requirement inRupiahfor BUKfrom the prudentialprinciple. Bank Indonesiabutwillbeleftto thebank'spolicy by considering relaxed. additional LTV/FTV relaxation by 5%from LTV/FTV that hasbeen from gross to net that hasbeenreduced. additional down payment reduction by 5%from theDown Payment gross. collateral valuation from Rp5billionto Rp10billion. Changes inKP/PP threshold limitsby independent appraisers for For LTV/FTV whichhave reached 100%,itwillnotbedetermined by In addition,for environmentally friendly(green) property, there is Relaxation ofLTV/FTV requirement by 5%. Changes ofNPLvehicle loanmax5%for down payment requirement, In addition,for environmentally friendly(electric) vehicle, there is Reduction ofvehicle down payment obligation : Changes ofNPLratio max5%for LTV/FTV requirement, from netto - - 10% for three/more wheelsvehicle. 5% for two wheelsvehicle employees Key Executive and Associate entity Shareholders shareholders Owned by thesame Shareholders Relationship the with Bank Descriptions Type ofTransaction Loan disbursed Loan disbursed Loan disbursed Loan disbursed Placement Total property loansgrowth Bank to increase the and provide chance for relaxation given by BI The LTV policy isa liquidity management. impact to Bank’s daily policy hasapositive Implementation ofnew Value ofTransaction* Annual Report *(In millionRupiah) Impacts onBDI 275,605 205,831 45,976 23,164 2019 436 198 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 119 Impacts on BDI Impacts Bank is required to to required is Bank reporting the adjust in line with new be to a and prepare policy support that system process the reporting the LLL updates Bank guidelines according policy new to PT Bank Danamon Indonesia Tbk. 10% from 10% from ≥ held interest in the joint operation. in the interest held Combination. The amendments clarify that obtaining obtaining that clarify amendments The Combination. a is a joint operation, is control of a business that in stages. achieved business combination borrowing specific a if that clarify amendments The qualifying related the after remains outstanding use or sale, it becomes intended for its ready asset is part of general borrowings. tax income that clarifies amendment The Taxes. should be recognised of dividends consequences or events past transactions the to where according were recognised. profits distributable generated that the that clarifies amendment The Arrangements. a is party obtaining joint control of a business that previously its re-measure not should operation joint Annual improvement 2018 PSAK 22: Business 2018 PSAK 22: Business Annual improvement 2018 PSAK 26: Borrowing Costs. Annual improvement Income 2018 PSAK 46: Annual improvement 2018 PSAK 66: Joint Annual improvement The implementation of the above standard did not result not result standard did above of the implementation The and had no significant policies in changes to accounting for statements financial consolidated impact to the years. financial or prior current year d. e. f. g. Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching Descriptions from data position end of June 2020 until end of August 2020) 2020) August of end until 2020 June of end position data from position end of data the sanctions (starting pay obliged to and/or 2020) September In order to reduce the burden of Bank’s reports submission and to and to submission reports of Bank’s burden the reduce to In order an BI develop effectiveness, quality and reporting data increase upholding the by and metadata-based system reporting integrated principle. and consistency efficiency, collaborative, which determined metadata to refers requirement reporting The Deposit Insurance Indonesia and BI, OJK, i.e. Regulators, by (LPS) Corporation and Quarterly Monthly, Weekly, Daily, of consist period Reporting in / correction and submit the report prepare to obligation Bank’s timely manner. LBBU Sharia, LKPBU and LSMK LBBU, of LHBU, submission The in data from 9 months, starting for valid is still BUS/UUS reporting 2020 until August 2019 December to will be subjected not submit reports or Bank which is late (starting warnings of written sanctions in the form administrative Submission of LLL report to OJK and deadline of LLL report of LLL report and deadline OJK to of LLL report Submission submission Provision of funds given to related parties maximum is 10% of Bank’s parties maximum is 10% of Bank’s related to of funds given Provision than other of borrower or group borrower to of funds given Provision or one borrower of funds to is provision exposure of large Provision parties definition Changes in related calculation of funds Changes in provision capital capital core parties maximum is 25% of Bank’s related parties which is than related other of borrower one group capital core Bank’s This regulation is effective starting from August 30, 2019 30, August from starting is effective regulation This 1. 2. 3. 4. 5. 6. 1, 2019 June from starting is effective regulation This 1. 2. 3. 4. 5. 6. 2019 Regulations Amendments to PSAK 24: Employee Benefits. This This Benefits. to PSAK 24: Employee Amendments ISAK 34: Uncertainty over Income Tax Treatments. Tax Treatments. Income over ISAK 34: Uncertainty ISAK 33: Foreign Currency Transactions and and Transactions Currency ISAK 33: Foreign Income Tax Treatments. It clarifies how to recognise how to recognise It clarifies Tax Treatments. Income tax assets deferred and current income and measure a tax over uncertainty is there where and liabilities treatment. assumptions use of updated the requires amendment or settlement. curtailment a plan amendment, after Consideration. It clarifies the use of the date of the of the date use of the the It clarifies Consideration. to rate exchange the in determining transaction or expense asset, of recognition initial for used be advance or pays receives entity the when income currency. in foreign consideration over 23 Uncertainty of IFRIC an adoption ISAK 34 is Advance Consideration. ISAK 33 is an adoption of of an adoption ISAK 33 is Consideration. Advance and Advance Transactions Currency 22 Foreign IFRIC POJK No. 32/ No. POJK dated POJK.03/2018 2018 26, December Legal regarding lending Limits (LLL) of Large and Provision Commercial for Funds Bank dated August 30, 2019 2019 30, August dated Integrated regarding Bank Commercial Reporting PBI No. 21/9/PBI/2019 21/9/PBI/2019 PBI No. Annual Report c. b. CHANGES IN ACCOUNTING POLICIES POLICIES CHANGES IN ACCOUNTING and interpretations amendments following standards, The 2019 and are relevant to 1 January since effective became Bank and Subsidiaries: the a.