TEMPO.CO, Medan - Credits for small and medium enterprises (SMEs) by Bank Danamon grew significantly in the first nine months of this year amid the general slump.

The country`s sixth largest bank in assets recorded Rp23.8 trillion in credits for SMEs by the end of September or an increase of 6 percent from Rp22.6 trillion a year earlier.

Altogether, Danamons outstanding credits declined to Rp121.6 trillion by the end of the third quarter of 2016 from Rp133.6 trillion a year earlier.

Chief Financial Officer and Director of the bank Vera Eve Lim said in a statement received here on Wednesday said the increase in credit for SMEs amid shrinking credit expansion in general showed the banks strong interest in that sector.

The bank sees big business potentials and good business prospects in SMEs.

Despite the decline in total credit, overall the banks performance was healthy with net profit after tax at Rp2.5 trillion or an increase of 33 percent from Rp1.8 trillion on-year.

The increase in net profit, indicated success of the bank in improving productivity amid the economic slowdown, Vera said.

The 6 percent decline in the banks operating cost to Rp6.5 trillion on-year was determinant in shoring up its general performance.

Vera also attributed the increase in net profit to improvement in the management of operating cost and cost of credit this year, and a 9 percent rise in its fee based income.

She said the cut in credit expansion was to keep gross non-performing loans under control at around 3.5 percent well below the maximum level of 5 percent considere3d safe.

"Despite the increase in the NPL ratio by 50 basis points from last year, the 3.5 percent ratio is still below the maxiumum limit set by the regulator," she said.

Bank Danamon is controlled by Fullerton Financial, a subsidiary of Singapore state investment company Temasek Holdings Pte.

ANTARA