20 PT Bank Danamon Indonesia Tbk. Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 21 PT Bank Danamon Indonesia Tbk. Management Report 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 22 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data “ PT Bank DanamonIndonesia Tbk. Bank BNPwascompleted onschedule with minimaldisruption tocustomer. a Bandung based bankpreviously controlledbyMUFG.The process ofoperational integration betweenDanamonand acquisition starting in Dec 2017. At the same time, Danamon merged with Bank Nusantara Parahyangan(Bank BNP), In 2019,MUFGincreasedits shareholding ofDanamon(the “Bank”) to94.1%. This wasthe final stageofathree-step DANAMON ANDBOARDOFDIRECTORS’ PERFORMANCE set tobeeffective in2020. and loweredthe bank’sreserve requirement by50bpsin2019. Another 50bpsreduction ofreserve requirement was growth andincreaseliquidity inthe financial industry, Bank Indonesiareduced the7-day reverse reporate by100bps loans grewbyonly6.0%YoY and7.1%YoY, respectively. Industry NPLremainedhealthy at2.8%.Tofacilitate economic However, the Indonesianbankingsector recorded aslowdown.BasedonNovember 2019data,earningassets and end ofthe year. Inflation rate waskeptat2.7%this year. both tosharesandbondsmarkethelped the currency toappreciate towardsthe strengthening by4.0%fromthe endof2018with lessvolatility. Largecapitalinflow The Indonesian Rupiah alsodelivered better performance comparedtolastyear, sustained at5%,the second highest growth amongstG20countries after China. Despite the pressure fromglobalsituation, Indonesian economic growth was conflicts, prolongedprocess over Brexit, andmassprotest inHongkong. trade andgeopolitical tensions aroundthe world, particularly USChina trade 2.9% in2019. Keyfactorsaffecting the economy includeuncertainty surrounding The Globaleconomy displayed slowing-downtrendswith forecasted growth ofonly ECONOMIC ANDINDUSTRY OVERVIEW Dear ValuedShareholders, the BoardofCommissioners Report from term prospect ofDanamon.“ Commissioners is excited aboutthe long- FY19. Butmoreimportantly,The Boardof managed toachieve Rp4.07tnNPATin economic andindustry slowdown,Danamon faced some headwinds inthe formof and diverse capabilities. While the business capabilities MUFG’sglobalnetwork with by supplementing the Bank’sexisting Danamon toexecute its corestrategies new controllingshareholderwillsupport financial services groupsinthe world. The subsidiary ofMUFG,onethe largest “In 2019,Danamonbecame aconsolidated “ Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 23 PT Bank Danamon Indonesia Tbk. set up in prior years’ transformation, and now tapping on tapping on and now transformation, years’ set up in prior Bank base , the of MUFG global customer ecosystem the coming years. in the growth its to continue well poised is Danamon continued to focus on prudent lending in its in its lending to focus on prudent Danamon continued Consumer SME, Banking, Enterprise engines: key growth Loan auto financing. ADMF subsidiary, its through and to slower due YoY was 6.6% micro excluding growth foundation the With anticipated. than growth economic Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching 2019 Annual Report further strengthen and deepen our business offerings and deepen our business offerings strengthen further as our clients’ our position and cement and capabilities preferred banking partner in Indonesia. new President Director of Danamon following the following the of Danamon new President Director A seasoned banker with of Sng Seow Wah. retirement and in corporate of experience decades three more than will be an invaluable catalyst he banking, investment between Danamon and collaboration for synergistic areas platform business and management both MUFG in to We look to Yasushi sustainable growth. for future Takayoshi Futae Futae Takayoshi President Commissioner as the Itagaki was appointed Yasushi year, the During Main Management Company Management Operational Good Corporate Corporate Corporate 24 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data PT Bank DanamonIndonesia Tbk. Rintis &Rekan (amember firmofPwCglobalnetwork). of Public Accounting Firm KAPTanudiredja, Wibisana, year, the committee hasrecommended the reappointment act asDanamon’sexternal auditor forthe 2020financial the Bank.After thorough evaluation onpotential firms to ascertained the effectiveness ofinternal controlswithin integrity offinancial reports andaudit findings. Ithasalso The Audit Committee (AC) is responsibletoensurethe Audit Committee the BOC. satisfactorily and provided soundrecommendations to role. The Board Committees have performed their duties Committees to assist inits stewardship and supervisory The BoardofCommissioners hasestablished sixBoard Committee Performance In2019 many changeswithin the Bank,andexternal challenges. of Directors(BoD) fortheir steady leadership amidstthe The BoardofCommissioners (BoC)applaudedthe Board of Dec. 31,2019. the same time, capitaladequacy ratio (CAR) was24.2%as reached above the BUKU 4requirement ofRp30tn.At In the fourth quarter of2019,Danamon’scoreequity The Bank’shigh level ofcapitalremainsakeystrength. 4.0% YoY growth comparedtothe previous year. Net Profit After Tax (NPAT) for FY19 reached Rp 4.07 tn, a this transaction willbemutually beneficial toallparties. competency ofdistributing financial products. Weexpect This transaction willhelp Danamonfocusonits core be distributed through Danamon’sandADMF’snetwork. a minority shareholder, andAI’sproducts willcontinue to Insurance (AI).Postthe divestment, the Bankremainsas Danamon’s divestment ofits 70%ownership inAdira Another keyachievement wasthe completion of level. will further increaseprudence inDanamon’sprovisioning IFRS9 will be implemented for Indonesian banks, and this bring NPLcoverage ratio to112.6% atyear end. In2020, was wellmanaged. Additional provisioning wastakento certain segments,. At3.0%asofDec. 31,2019,NPLratio the impactofindustry-wide assetquality deterioration in Danamon’s prudent risk management managedtocontain YoY. of 8.6% YoY, with savings accountportion growingby13% grow granularfunding continued asseenbyCASA growth deposits growth ofonly2%YoY. However ourfocusto Liquidity waswellmanageddespite totalthird party and its subsidiary. The committee’s recommendations to good corporate governance is practiced acrossthe Bank The Integrated Governance Committee (IGC) ensuresthat Integrated Governance Committee of corporate governance. its stakeholderbyconsistently applying ahigh standard management. Danamon was able to maintain the trusts of practices andprocesses foraccountableandeffective consistencies ofadoption the necessary principles, The Corporate Governance Committee supervised the Corporate Governance Committee maintained its overall risk profilefor2019. Despite some assetquality issue inthe industry, the Bank and liquidity position andgeneralcontrolenvironment. recommendations toimprove assetquality, market risk management within the Bank.Ithasprovided sound The Risk Monitoring Committee oversees allaspects of Risk Monitoring Committee trainings ande-learningmodules wererolledout. awareness onsustainablefinance, including in-class efforts. Inaddition, programs toincreaseemployee were implemented in2019ascontinuation ofprior year’s of Danamon’sCodeConduct and cyber security risk Programs to improve employee’s risk culture, awareness in linewith bestinternational bankingpractices. and risk management acrossthe Bankandits subsidiaries Danamon maintained integrated corporate governance Integrated Corporate Governance and Risk Management plan andvision. executives that canhelp the Banktorealize its long-term enables Danamontorecruit andretainthe right senior recommendations onremuneration arrangements, which management personnel.The RC hadprovided packages forcommissioners, directors andsenior provide recommendations tothe BOConremuneration The Remuneration Committee (RC) is responsibleto Remuneration Committee admirably throughout 2019. senior management personnel.Ithasperformed its role of newBOCandBOD,aswellthe appointment of The Nomination Committee supervises the appointment Nomination Committee Annual Awards. the 2019IndonesianInstitute forCorporate Directorships’ recognized ashaving the Best Disclosure Transparency at Big CapFinancial Sector category, while Adira Finance was of the companywith the best corporate governance inthe governance practices. Danamon was recognized asone the BOChashelped the Banktoimprove goodcorporate Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 25 PT Bank Danamon Indonesia Tbk. Aside from implementing its business strategies, in in business strategies, its Aside from implementing key corporate executed 2019 Danamon successfully benefits long-term positive will have which transactions tireless the BoC would like to recognize Bank. The to the Danamon’s employees. entire BoD and the effort of the of our and loyalty trust of the we are appreciative Further, support of our shareholders. as well as the customers interest best their put always to committed is Danamon our sincere BoC expressed Last but not least, The in mind. Financial the particularly to our regulators, gratitude support and guidance (OJK). Their Authority Services our business strategies executing were invaluable in both in transactions milestone corporate the and completing 2019. Danamon will be able to support from MUFG, With and network with strong local expertise its complement that We are certain and capabilities. global relationships new will enable Danamon to reach strengths our unique years. in future heights workforce and increasing adoption of digital. The BOC BOC The of digital. and increasing adoption workforce Indonesia to help Danamon can continue that certain is value right the by providing potentials these realize all stakeholders. to propositions areas in key will invest Danamon coming years, In the increase to and analytics marketing digital, including well. More customer its and serve competitiveness its in investment will increase its importantly Danamon high-performing a create order to capital in human talent pool. strong and committed with organization will be complemented Danamon’s strategy In addition, partner its and MUFG with collaboration continuous by full support from Danamon’s parent banks. With with customers Bank will be able to provide company, the Danamon’s blended with which value propositions unique MUFG’s global with and network strong local capabilities expertise. and international relationships CONCLUDING REMARKS Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching Takayoshi Futae Takayoshi Jakarta, February 2020 Jakarta, February President Commissioner 2019 Annual Report Despite temporary economic cycles, Indonesia’s long- cycles, economic temporary Despite steady by its as indicated remain attractive potential term of productive percentage high rate, 5% GDP growth The BOC would like to thank all the former commissioners commissioners former all the BOC would like to thank The Bank during to the and contributions dedication for their new BoC the And we welcome in office. term their and guidance. fresh insights for their members LOOKING FORWARD Gan Chee Yen also no longer hold the position as a as a position also no longer hold the Yen Gan Chee commissioner. General Meeting October 2019 Extraordinary In the the shareholders approved of Shareholders (EGMS) Kawasaki to Goto and Nobuya of Noriaki appointment as new BoC members. serve There were several changes to the composition of the of the composition changes to the were several There in 2019. Board of Commissioners controlling sole a as MUFG of effectiveness the Following as position Kee Choe no longer hold the Ng shareholder, Takayoshi by replaced was and Commissioner President Further, member. a commissioner Futae, previously response and financial education to the community. to the education response and financial by YDP from received recognition proud of the BoC is The Padmamitra Awards the via DKI Jakarta Government the 2019. CHANGES IN BOC COMPOSITION create a sustainable development in Indonesia. The Bank’s Bank’s in Indonesia. The a sustainable development create Yayasan through were conducted in 2019 CSR activities were programs YDP’s programs. (YDP) Peduli Danamon community. in the of life quality the to improve designed : Economic, main principles are focused on three They include revitalization These and Social. Environment, emergency and disaster markets, traditional of program Implementation of Corporate Social Responsibility Social of Corporate Implementation social Danamon’s corporate BOC supported The and local communities to strengthen responsibility (CSR) Main Management Company Management Operational Good Corporate Corporate Corporate 26 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data PT Bank DanamonIndonesia Tbk. Commissioners Board of Manggi T.Habir Commissioner (Independent)

Vice PresidentCommissioner JB. Kristiadi (Independent) Takayoshi Futae Commissioner President Peter BenyaminStok Commissioner (Independent) Annual Report 2019

Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 27 Commissioner Nobuya Kawasaki* Kawasaki* Nobuya PT Bank Danamon Indonesia Tbk. Commissioner Noriaki Goto* Noriaki Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching Commissioner Masamichi Yasuda Yasuda Masamichi

2019 (Independent) Commissioner Made Sukada Made Sukada Effective upon the approval of fit and proper test from the Financial Services Authority (FSA) Authority Services Financial from the of fit and proper test approval upon the Effective Annual Report * Main Management Company Management Operational Good Corporate Corporate Corporate 28 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data Dear ValuedShareholders, PT Bank DanamonIndonesia Tbk. Danamon unique competitive advantage inIndonesia. of the Bank’slocalknow-how andnetwork,with MUFG’sstrong international relationships and bestpractices, gives subsidiary ofMUFGGroup,thus strengthening strategic partnership with MUFGandits partnerbanks.The combination In 2019Danamoncompleted several important corporate transactions. The biggest changeis becoming aconsolidated STRATEGIC PRIORITIES ANDINITIATIVES IN2019 at 2.8%.However there aresigns ofpressureinthe Mortgage andSME industry while depositgrowth waseven lowerat6.7%.Indonesianbanks’non-performing loan(NPL)ratio remainedmanageable Furthermore, Indonesia’sbankingsector also recorded aslow-down.AsofNovember 2019, loan onlygrewby7.1%YoY, USD. Inflation waskeptlowat2.7%. volatility ofIndonesianRupiah (IDR) hadnarrowedsignificantly fromyear-ago levels andclosedthe year atIDR13,901/ reduced Bank’sreserve requirement by50bpsin2019,with another 50bpsreduction tobeeffective in2020.The growth. BankIndonesiahadloweredthe 7-dayreverse reporate by100bps and remained steady, supported by several government efforts to stimulate economic growth at5.0%.The Indonesianeconomy experienced mildslow-downbut Against this backdrop,Indonesianeconomy hasmaintainedrelatively stable role indrawingnegative impacttothe economy worldwide. Growing tradetension betweenUSandChina since Januay2018played amajor weakness affected mostcountries, both developed andemerging economies. for 2019is the lowestlevel since globalfinancial crisis in2008.This economic In 2019,the globaleconomy declined sharply. The 2.9% globalgrowth forecast ECONOMIC ANDINDUSTRY OVERVIEW “ the BoardofDirectors Report from milestones forDanamon.During the wasmarkedbyimportant“2019 ever inthe Bank’shistory.” for FY19 reached Rp4.07tn,the highest Danamon’s NPATpleased toreportthat local networkandcapabilities. Iamalso global network,tocomplement the Bank’s international bestpractice fromMUFG to newopportunities, relationships and shareholding, Danamonhasgainedaccess shareholder. With the change in Danamon andbecame the solecontrolling year, MUFGincreasedits ownership of “ Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 29 PT Bank Danamon Indonesia Tbk. continue to have long-term partnership with AI to AI to with partnership long-term to have continue business general insurance The products. its distribute this in Indonesia. We believe under penetrated still is growing as a leading AI to continue will help transaction Danamon time same At the company. general insurance insurance more general even will enjoy Group customers needs. their to cater solutions On November 2019, Danamon also completed the the 2019, Danamon also completed On November Dinamika of a 70% stake in PT. Asuransi Adira divestment International a leading Insurance, Tbk (AI) to Zurich the divested Danamon While company. Insurance (ADMF) Finance controlling stake, Danamon and Adira Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching 2019 Annual Report these milestones in the midst of challenging economic economic midst of challenging milestones in the these environment. shareholder, In May 2019 we also completed legal merger legal merger In May 2019 we also completed shareholder, Bank Nusantara Parahyangan (Bank BNP), a national with then is area. This in Bandung strong presence bank with 2019, September in merger operational the by followed both to services and integrated harmonized creating effort made by the I am proud of the banks’ customers. in accomplishing employees and the team management Yasushi Itagaki Yasushi President Director controlling the MUFG becoming with In conjunction Main Management Company Management Operational Good Corporate Corporate Corporate 30 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data PT Bank DanamonIndonesia Tbk. growth. relationship driven approachtoachieve sustainable and other stakeholders. Danamonwilltakealong-term, maintain andincreasethese trusts fromcustomers asset forabankis trust. Danamonwillworkhardto capabilities arejustthe beginning. The mostimportant Having accomplished allofthe above andgainingnew and services. provide seamless, straight through delivery ofproducts digitize manyofourendtoprocesses inorder to customer convenience. Inaddition, wecontinued to channel concept willcontinue tobeenhanced toimprove (Application ProgrammingInterface) Centralandomni- Deposit onlinegrew153%YoY. Goingforward, API bank came from D-Bankregistration. Inaddition Time mobile platform. Asaresult,14%ofDanamon’snewto bank customers toopenaccountfullyvia ourD-Bank the firstdigital onboarding capability,allowingnewto serving ourcustomers. In2019,Danamonintroduced Digital channelplays anincreasinglyimportantrolein Momobil, Momotorandcollaboration with e-commerce. key priority isin digitalexpansion marketplaces through Finance keypriorities toincreaserecurring sales.Another relationships with existing customers is oneofAdira Finance grew and performed well in 2019. Deepening While consumer demandforautoremainedweak,Adira banking) anddigital channels(D-Bankplatform). conducted through conventional channels(branch term deposits (TD).Attractive marketing programs were comprising currentandsaving accounts (CASA) and were undertakenin2019togrowsgranulardeposits, granular deposit. In Consumer Banking Several initiatives focused on Improving our funding franchise and growing Continuing the effortstarted several years ago,Danamon application via mobile. of mortgage loans underwriting, including mortgage Danamon continued toimprove the speedandprocess partnerships with Japanese developers. Inaddition, helped partially byMUFGcollaboration inthe formof life ofourcustomers. The growth inthis segment was Mortgage continues tobeakeyfinancial needinthe partner banks’customers. between Danamon’scustomers andMUFG’saswell with greatsuccess ourfirstBusinessMatching event segment andeven consumer segment. Danamonhosted those inthe Enterprise Banking(EB) segment, SME announced. Customers inthese ecosystems encompass related toautomotive dealerandFMCGecosystems were for Danamon.KeydealsinFinancial SupplyChain(FSC) corporates have openedupnewgrowth opportunities to rampup.MUFG’sstrongrelationships with large On the businessfront,collaboration with MUFGcontinues loan portfolio. purposely maintainedprudent growth toensurehealthy YoY toreachRp43.9 tn.Atthe same time, Danamon grew 16.3% toRp9.1 trillion, while EBloansgrewby6% 6.6% growth year-on-year (YoY). Consumer mortgages Loans excluding micro finance reached 141.6 trillion, with Loan Performance respectively atthe endof2019. tax andthe return onequity (ROE)wasat3.0%and10.3% also wellmanaged. The return onassets (ROA)before to growhigher than industry. Operating expenseswas sectors such asmortgage andAdira Finance managed the sluggishness of industry loan demand, certain key history. Despite singledigit overall loangrowth, mirroring 2019 wasRp4.07trillion, the highest ever inthe Bank’s Danamon’s netprofitafter tax(NPAT)forthe Fiscal Year FINANCIAL PERFORMANCEIN2019 companies inIndonesia. maintaining position asoneofthe biggest multi-finance loans wereabletogrowby6.7% YoY toreachRp54.8 tn, sales andnegative growth inindustry carsales,ADMF yielded fruits. Despite flatindustry demand in motorcycle and tobuild relationships with existing customers have initiatives togrowloansthrough alternative channel In the midstoflowconsumer demand, Adira Finance SUBSIDIARY PERFORMANCE Bank’s history. slightly higher than initial planandthe highest ever inthe NPAT inFY19 stoodatRp4.07tn.This profitabilitylevel is gain fromdivestment ofAdira Insurance, Danamon’s slowdown inthe economy. Helped partially bycapital believe this is the prudent approachgiven the overall Overall loangrowth wasbelowinitial plan.However we Target versus Actual Results equity surpassedthe BUKU4level threshold ofRp30tn. By the fourth quarter 2019,Danamon’sbankonlycore (CAR) of 24.2% was well above regulatory requirements. management expectation. Ourcapitaladequacy ratio range of94-98% formostthe year, which wasin-linewith while increasedto99.7% atyear-end wasmaintainedina Danamon’s Macroprudential Intermediation Ratio (RIM), Danamon hadadequate liquidity tosupportassetgrowth. Balance sheet remainsstrong implementation inJanuary 2020. strengthened after takingintoaccountIFRS9 day-one ratio of112.6% atyear end. This ratio willbefurther increase provisions to reach an adequate NPL coverage end of2019. Inthe second halfofthe year, we continued to Danamon’s NPLratio waswellmanagedat3.0%the Prudent assetquality management Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 31 PT Bank Danamon Indonesia Tbk. The Integrated Risk Management Committee was was Committee Management Risk Integrated The by Danamon in order to enable proper and established implementation management risk integrated aligned Danamon of members are that entities the across In order to enhance further alignment with overall Bank’s Bank’s overall with alignment further In order to enhance as well as to increase the and strategy, vision mission, going forward YDP’s organization impact of CSR activities, Danamon’s organization into will be merged and activities structure. UNDER THE BOARD OF OF COMMITTEES EVALUATION DIRECTORS Board under the committees executive Danamon has five in management assist committees These of Directors. to decision-making and strategic risk-taking prudent goals. business and strategic achieve provided sucessfully Committee Management Risk The to bank-wide respect with and oversight governance The priorities. and key risk issues management risk of periodic submission was aided by the committee Market & Portfolio, Credit of the quality on the reports & Fraud Risk Operational parameters, Risk Liquidity Models, to Risk related and developments events In addition, IFRS-9. Stress Testing, Capital Adequacy, as well was enhanced, management risk information by security, (IT) technology and information as cyber of data breaches. risk the to reduce procedures adopting to policies mitigation risk also reviewed committee The plan. and a recovery support sustainable finance CORPORATE SOCIAL RESPONSIBILITY CORPORATE responsibility social corporate that Danamon realizes to responsibility moral a is implementation CSR or is CSR implementation community. stakeholders and our a role in creating to play an active Bank’s commitment the goals. and global development sustainable national conducted were activities CSR Danamon’s 2019, In (Danamon Peduli Yayasan Danamon Peduli through for access or YDP). In an effort to provide Foundation and quality economic, social, to fulfill better community pilars: Economic standards, YDP focused on three of life Environment and UKM Sejahtera), (Pasar Sejahtera respond (disaster and Social and Social) (Environment reduction). risk and disaster and implementation In 2019 YDP’s CSR program initiative Economic from 2019 Awards Padmamitra awards received DKI Jakarta Government. Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching 2019 Annual Report will continue to be strengthened through knowledge from from knowledge through be strengthened to continue will MUFG’s global practice. CORPORATE GOVERNANCE CORPORATE embedded in (GCG) is governance Good corporate GCG goes We believe Danamon’s business activities. Our commitment regulations. with beyond compliance in line with GCG quality improve to continuously is business external the and regulations in developments practice Bank’s GCG 2019, the in Starting environment. Danamon’s Banker Trainee is our marquee program to for program to for our marquee Danamon’s Banker Trainee is to graduates and Masters Bachelors most talented the leaders of Danamon. We future to become prepare them future program in the this to expand and improve expect a sustainable pipeline of strong talent pool. to create In 2019, Danamon continued to promote its performance- its to promote In 2019, Danamon continued and transparency greater developing culture, oriented on its Bank also built group. The across the meritocracy to employees encourages which innovation, of culture and to respond swiftly adaptable – enabling them become to new challenges. appropriately Danamon continued to strengthen the Bank’s core Bank’s core the to strengthen Danamon continued core values reflected These our employee. values within “Berkolaborasi”, for “BISA” (stands tagline of in the means which “Adaptif”) dan Melayani” “Sigap “Integritas”, and Adaptive, Centric, Customer Integrity, Collaboration, amongst transformation of spirit Bank’s the echoing employees. nurture our people to be the future innovative leaders. leaders. innovative future to be the our people nurture ongoing training comprehensive Danamon provides including employees for its programs and development ensuring re-skilling and upskilling trainning program, and competitive holistic with equipped of employee all capabilities. HUMAN CAPITAL CAPITAL HUMAN in foundation core the of one is resources Human we Hence, aspirations. Danamon’s to achieve order to development in employee invest continuously of our people in and quality productivity increase the as well to to our customers, best service order to gives expanding digital platform through Momobil, Momotor, Momotor, Momobil, through platform digital expanding 2019 In e-commerce. with collaboration digital as well as “Adiraku” called application mobile new launched ADMF to opening up opportunity older version, the replacing Digitalization approach. centric more customer with serve optimising in daily operational, was also implemented approval. speed in credit Adira Finance has continued to invest in information in information to invest has continued Finance Adira approach by a digital and has adopted technology Main Management Company Management Operational Good Corporate Corporate Corporate 32 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data PT Bank DanamonIndonesia Tbk. grateful fortheir pastcontributions. steppedfrom his down position asDirector.The Bankis as PresidentDirector andSatinder PalSingh Ahluwalia In 2019,SngSeowWahstepped downfromhis position Mizoguchi asDirectors. as Vice PresidentDirector, Muljono TjandraandNaoki several newBoDmembers; Honggo Widjojo Kangmasto his previous position asDirector. The EGMalsoappointed Yasushi ItagakiasPresidentDirector, anelevation from (EGM) inOctober2019approved the appointment of The Extraordinary GeneralMeeting ofShareholders composition ofthe BoardofDirectors. shareholder in2019,there wereseveral changesinthe Following the acquisition byMUFGasthe newmajority CHANGES INBOARDOFDIRECTORS COMPOSITION and businessstrategies. investments inITarealigned with Danamon’sobjectives and architecture. The committee hasensuredthat technology issues, madedecisions onITstrategy, projects and businessstrategies. The committee oversaw banking investments inITarealigned with Danamon’sobjectives The Information Technology Committee ensured that development programs andother employee issues. continued toreview compensation andbenefits, people mission, corevalues,andCodeofConduct. The committee HR policies toensurealignment with the Bank’svision, strategies andpolicies. The committee regularly reviews in formulating newvaluesforhuman resources (HR) The Human Resources Committee assisted management and compliance with allrelevantregulations. and capitallevels, astableanddiversified funding profile, guidelines tohelp Danamonmaintainadequate liquidity risk, liquidity and capital. It also determines policies and planning andmanagement ofthe Bank’sinterest rate The Asset&Liability Committee guides balance sheet Danamon’s roleand function asa financial conglomerate. practices. This was undertaken in accordance with policies andimprovements tointegrated risk management regarding the development ofintegrated risk management Group. The committee provided goodrecommendations In 2020,Danamonwillcontinue tofocusoncustomer and economic outlookis expected toberelatively stable. year butstill atamanageablelevel. Indonesia’soverall is projected tobe3.4%in2020,higher than the previous in 2020,slightly lowerthan GDPgrowth in2019. Inflation The economy is projected togrowat4.9% -5.0%range CHALLENGES ANDOPPORTUNITIES IN2020 Singapore Human Resources Online. Infobank, andExcellence inEmployer Branding from Awards 2019fromMarketing Research Indonesia& Tempo Media Group,Satisfaction Loyalty Engagement from The AsianBanker, BestDigital Bankingservice from Initiative andBankingService Excellence Awards2019 These include:BestDigital KYC andAccountOpening acknowledgement of its innovation andperformance. In 2019, Danamon received several awards in AWARDS various partnerships with fintech andstart-upcompanies. with MUFG’scorporate venture capitalarmwillexplore addition, DanamonandAdira Finance, inconjunction new segments andcapture totalrelationship value.In to leverage outside partnersasacquisition channelsfor transaction capabilities. D-Bankwillserve asaplatform to beenhanced with bonds,mutual fundsandinsurance D-Bank, Danamon’smobilebankingplatform, willcontinue general, andits targetsegment inparticular. to increasevisibility andbrandawarenesstothe public in marketing campaign andcorporate events, Danamonaim their financial journey. In addition, through continuous of ourproduct offerings tocustomers needsacross proposition in 2020 will help to increase relevance Implementation ofcustomer segment-based value various economic cycles. lending andfunding allowDanamontogrowthroughout Enhanced byMUFGcollaboration, ecosystem based optimisation offeeincome with unique valueproposition. funding growth through institutional approach, and on prudent lending expansionacrossecosystem, granular digital, marketing andhuman capital.Danamonwillfocus business expansionwhile investing inkeyareasincluding Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 33 PT Bank Danamon Indonesia Tbk. beyond their duties in executing both. We continue to be to be We continue both. executing in duties beyond their those including customers, to Danamon Group grateful confidence. their from Bank BNP, for originating initially to and offerings our services to improve We will continue continued for their our shareholders We also thank them. are we Finally, Bank. the in trust and confidence from and assistance guidance for the grateful especially year. the OJK, throughout particularly our regulators, Going new capabilities. with emerged Danamon In 2019, through heights new reach to aspire Bank the forward, of local and global capabilities. combination unique its Danamon’s full to work hard to realize We will continue of all stakeholders. trust and mantain the potentials Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching Yasushi Itagaki Yasushi President Director Jakarta, February 2020 Jakarta, February 2019 Annual Report navigate the economic conditions in running its business business its in running conditions economic the navigate transactions. corporate various pursuing while operations and gone above have our employees time, same At the we were able to balance growth in key areas and prudence, in key areas and prudence, growth we were able to balance corporate several executing time same at the while the without would not be possible These transactions. of Commissioners, Board regulators, support from the and customers. investors employees, Danamon helped guidance Board of Commissioners’ The CONCLUDING REMARKS year the During for Danamon. year 2019 was a milestone Main Management Company Management Operational Good Corporate Corporate Corporate 34 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data PT Bank DanamonIndonesia Tbk. Directors Board of Dadi Budiana Director Heriyanto Agung Putra Director Rita Mirasari Director Naoki Mizoguchi Director President Director Yasushi Itagaki Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 35 Director Muljono Tjandra Tjandra Muljono PT Bank Danamon Indonesia Tbk. Director Herry Hykmanto Hykmanto Herry Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching Kangmasto Honggo Widjojo Widjojo Honggo Vice President Director Vice Director Adnan Qayum Khan Adnan Qayum Triwardhany 2019 Michellina Laksmi Michellina Vice President Director Vice Annual Report Main Management Company Management Operational Good Corporate Corporate Corporate 36 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data a wholeinUUSDanamon. matters related tothe fulfillment ofSyariah principles as product proposals,policies andprocedures, andother and duties to supervise, andprovide opinionsonnew Supervisory Board Charter, hascarried outits functions with the regulatory mandate andthe applicable Syariah out inaccordance with Syariah principles, inaccordance and ensureproduct andbusinessconformityarecarried Business Unit(UUS) asthe body mandated tosupervise The Syariah Supervisory BoardofDanamonSyariah Wa sallam. greetings tothe Prophet Muhammad sallallaahu ‘Alaihi duties andmandates entrusted tous.Ourshalawatand to all of us, so that Allah Ta’ala enable us to carry out the Subhanahu Wata’alaforallhis comfort, easinessandgrace Alhamdulillaahirabbil’aalamiin, allpraise betoAllah Bismillaahirrahmaanirrahiim Assalamu’alaikum Warahmatullahi Wabarakaatuh PT Bank DanamonIndonesia Tbk. Syariah Supervisory Board Report from On behalfofthe Syariah Supervisory Board Prof. Dr. H. M.DinSyamsuddin Chairman Wassalaamu’alaikum Warahmatullahi Wabarakaatuh in the future. Danamon willbecome moresuccessful andalways ahead application inbankingactivities. Wehopethat UUS to maintainthe consistency ofthe Syariah principles for performance achievements in2019,andtheir efforts of Directors andallofBankDanamon’sManagement staff appreciation forthe cooperation andsupportofthe Board On this occasionweare grateful andwanttoexpressour Board. fatwas andopinionsissued byusasSyariah Supervisory Syariah NasionalMajelis UlamaIndonesia(DSN-MUI) the UUSDanamonin2019areaccordance with Dewan believe that the Syariah bankingactivities carried outby We asSyariah Supervisory Board(DPS)UUSDanamon Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 37 PT Bank Danamon Indonesia Tbk. Hasanudin Hasanudin Supervisory Board Supervisory Member for Syariah Member Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching Supervisory Board Supervisory Din Syamsuddin Din Syamsuddin Chairman for Syariah Supervisory Board Supervisory Member for Syariah Member Asep Supyadillah Asep Supyadillah 2019 Board Syariah Supervisory Syariah Annual Report Main Management Company Management Operational Good Corporate Corporate Corporate 38 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data PT Bank DanamonIndonesia Tbk. Executive Officers Senior Transaction BankingHead Andrew Suhadinata Treasury &CapitalMarket Herman Savio Head Chief Information Officer Taro Hashimoto Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 39 PT Bank Danamon Indonesia Tbk. Enterprise Banking & Banking & Enterprise Thomas Sudarma Thomas Sudarma Financial Institution Head Institution Financial Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching Evi Damayanti Damayanti Evi Chief Operation Officer Operation Chief 2019 Yenny Linardi Linardi Yenny Chief Internal Audit Internal Chief Annual Report Main Management Company Management Operational Good Corporate Corporate Corporate 40 Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data PT Bank DanamonIndonesia Tbk. with prudent risk management. diversification, customer centricity anddigital combined to implement the corestrategies ofgrowth engine transformation atthe endof2018,the Bankcontinue After successful achievement of Danamon’s 3-Year Plan creating moreopportunity forfeebasedincome. through Danamon’sandADMF’s distribution network, will continue to distribute Adira Insurance products with totalproceeds ofIDR3.9tn. GoingforwardDanamon ownership inAdira Insurance (AI)toZurich Insurance, In 2019,Danamonhassuccessfully divested 70%ofits and integrated services tothe customers. converted intoDanamonnetwork,offering harmonized integration inSeptember 33branches ofBNPwas Parahyangan (BNP). Upon successfull operational Danamon alsocompleted the merger with BankNusantara In conjuction with the increaseinMUFGshareholding, risk andcompliance. areas including: technology, digital, trainingprograms, international bestpractice andknowledgeinvarious In addition, Danamoncannowleverage MUFG’s collaboration with MUFGhave beenannounced in2019. the anchors’ecosystem. Several successfull dealsfrom Danamon toserve the distributors andsub-distributors in network asanchorsinthe financial supplychain,allowing multi-national and large local corporates within the MUFG product offerings. Onekeystrategy is totapthe Japanese, network, tocomplement the Bank’slocalknow-howand to newopportunities and relationships fromMUFGglobal the changeinshareholding, Danamonhasgainedaccess 94.1% andbecame the solecontrollingshareholder. With the year, MUFGincreasedits ownership ofDanamonto 2019 wasmarkedbyseveral importantmilestones.During STRATEGIC FOCUSIN2019 liquidity ofbanksandsupportloangrowth. 2020. Lowerreserve requriement wasintended toimprove 2019, with another 50bpsreduction tobeeffective in Indonesia alsoreduced reserve requirement by50bpsin 100bps, to help stimulate the economy. Furthermore, Bank Indonesia hadreduced the7-day reverse reporate by Inflation rate wasmaintainedat2.7%.In2019,Bank inrease inexports. 2019, supported bystabledomestics consumptions and slow down.Nonetheless, GDPcontinue togrow5.0%in compared tolastyear, mainlydriven byglobaleconomic Indonesia’s 2019economic growth easedslightly Policies andStrategies Overview ofPlans, policy. to maintainanNPLrate inlinewith the Bank’s credit management, andmanagement ofnon-performingloans improvement ofacquisition quality, loanportfolio From arisk perspective, the focusin2019wason increase customer acquisition through digital platforms. collaboration with financial technology companies to sales force. Inaddition, SME Bankingalsoexplored is through the BranchNetwork andthe smallenterprise term .The mainchanneltoserve this customer segment customers remainsDanamon’scorefocusforthe long- Delivering comprehensive financial solutions toSME companies andmultinational corporation valuechains. MUFG Group,italsowasfocusingtotapintoJapanese to-end valuechains.Leveraging the businessnetworkof its portfolio through newclient acquisitions andits end- relationships with existing clients, aswelldeveloping Enterprise Bankingcontinued tofocusondeepening of feeincome with unique valueproposition. growth through institutional approach, andoptimisation lending expansion acrossecosystem, granularfunding Business andcustomer expansionwillfocusonprudent unique valueproposition forits customers. international bestpractices willhelp Danamontocreate how andnetworkwith MUFG’sglobalrelationships and Indonesia. The combination ofDanamon’slocalknow- Danamon’s aspiration asoneofthe topbanksin initiatives willbeimplemented inordertoachieve investing inseveral keyareas. Anumberofstrategic focusing oncustomer andbusinessexpansionwhile In 2020,Danamonwillcontinue its growth strategies, INITIATIVES IN2020 distribution channelstonon-autodealers. for both autoandnon-autoloans expanding newly obtainedcustomers through product penetration distribution, generating more sales from existing and Adira Finance also has maintained growth in financing Momotor anddigital collaboration with eccommerce. 2019 including expansionofdigital marketplaces Momobil, Adira Finance had remarkable digital growth journey in of partnerships with Japanesedevelopers. side, helped partially byMUFGcollaboration inthe form remains akeyfocusofgrowth onthe consumer asset channels (D-Bankplatform). Inaddition, mortgage conventional channels(branchbanking) anddigital Attractive marketing programs wereconducted through and saving accounts (CASA) and term deposits (TD). in 2019 to grow granular deposits, comprising current In Consumer Bankingseveral initiatives wereundertaken Annual Report 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data 41 PT Bank Danamon Indonesia Tbk. Marketing and branding is another key investment area area key investment another is branding and Marketing and campaign marketing continuous in 2020. Through increase Danamon and ADMF aim to events, corporate in general, public to the and brand awareness our visibility in particular. and our target segment important pillar to an is capital enhancement Human area in this Investment success. Danamon’s long-term re-skilling through up-skilling and will include employee’s and trainning to increase productivity comprehensive will Danamon leaders. as innovative employee develop in various MUFG’s global training programs leverage also Danamon’s Banker In addition, areas and functions. and to identify as a key program Trainee will continue leaders. future develop Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching 2019 Annual Report area will continue with IT infrastucture advancement and and advancement IT infrastucture with area will continue for seamless processes digitalisation business process experiences. customer and better Digital will increasingly become a key channel for for key channel a become will increasingly Digital D-Bank, Danamon’s mobile interactions. customer bonds, including to be enhanced will continue banking, capabilities. transaction funds and insurance mutual to leverage as a platform D-Bank will serve In addition, segments channels for new partners as acquisition outside in this value. Investment relationship total and capture approach. Danamon will leverage customer ecosystems ecosystems customer Danamon will leverage approach. and transaction management payroll, cash to provide value based segment Through banking services. on their based served be will customers proposition, increasing the stage in life, current needs at their holistic offerings. and of our service relevance anchors in the financial supply chain (FSC) ecosystem. ecosystem. (FSC) supply chain financial anchors in the provide will ADMF and Danamon FSC, the Through and ecosystems across those services and other lending segments. customer through will continue franchise of funding Improvement channels as well as institutional branch channels, digital Continuing the early success from the previous year, year, previous from the early success the Continuing to serve MUFG with collaboration Danamon will leverage as Japanese and large local corporates multi-national, Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data Jakarta, February 2020 This statement is hereby madeinalltruthfulness. Annual Report. Tbk has been presented in its entirety, and assume fullresponsibility for the accuracy of the contents of the Company’s We, the undersigned, testify that allinformation containedinthe 2019AnnualReport ofPTBankDanamonIndonesia Report ofPTBankDanamonIndonesiaTbk Board ofCommissioners’ andBoardofDirectors’ Statement onThe Responsibility ForThe 2019Annual PT Bank DanamonIndonesia Tbk. Annual Reporting Responsibility for * Commissioner (Independent) Effective uponthe approval offitandproper test fromthe Financial Services Authority (FSA) Masamichi Yasuda Manggi T.Habir Commissioner President Commissioner Takayoshi Futae

Board ofCommissioners Commissioner (Independent) Noriaki Goto Made Sukada Commissioner * Vice PresidentCommissioner (Independent) JB. Kristiadi Pudjosukanto Commissioner (Independent) Peter BenyaminStok Nobuya Kawasaki Commissioner Annual Report * 2019 Main Management Company Management Operational Good Corporate Corporate Corporate Highlights Report Profile Discussion and Analysis Review Governance Social Responsibility Data Director Director Director Rita Mirasari Mirasari Rita Naoki Mizoguchi Naoki Mizoguchi Herry Hykmanto Hykmanto Herry PT Bank Danamon Indonesia Tbk. Director Director Reaching New Heights with Local and Global Capabilities and Global Local with Heights New Reaching Muljono Tjandra Tjandra Muljono President Director Vice President Director Vice Yasushi Itagaki Itagaki Yasushi Board of Directors Heriyanto Agung Putra Putra Agung Heriyanto Honggo Widjojo Kangmasto Widjojo Honggo 2019 Director Director Dadi Budiana Budiana Dadi Vice President Director Vice Adnan Qayum Khan Adnan Qayum Michellina Laksmi Triwardhany Michellina Annual Report