Aiming for at least 50 percent growth in its housing loans by the end of this year, Bank Danamon, the country's fourth largest bank, signed an agreement with 15 of Indonesia's leading property developers Tuesday.
With the commitment from the developers, deputy president director Jerry Ng said the bank was hopeful it could raise its mortgage portfolio by a minimum of 50 percent from the Rp 2 trillion (US$222 million) it had already lent in the first half of the year.
Among the property developers signing up to the deal were Sinar Mas, Ciputra, Summarecon, Lippo, Agung Podomoro and Metropolitan Land. The agreement covers residential property financing for a total of 53 property developments located in Jakarta, East Java, Sulawesi and Kalimantan.
Tuesday's signing follows a similar event in Surabaya last May, when Danamon signed memorandums of understanding with 10 top property developers in Surabaya and the East Java region. "Last year, we only booked a total of Rp 2 trillion in mortgage loans, with most of them coming from the secondary market or brokers. This year, we are set to enter the primary market with the partnerships we have entered into with a number of big developers," said Steffano Ridwan, Danamon retail banking lending head.
Consumer loans account for 35 percent of the bank's total outstanding loans, while loans to micro, small and medium enterprises account for about 45 percent, with the remainder coming from other sectors, including 5 percent from mortgages.
Danamon booked a 20 percent year-on-year increase in lending to Rp 46.394 trillion in the first semester of this year.