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ublicly listed lender Bank Rakyat Indonesia (BRI) booked higher-than-expected growth in its lending portfolio during the first three months of 2014, which eventually led to an 18 percent surge in its net profits.

On Wednesday, the state bank announced that it had reaped Rp 5.9 trillion (US$507.30 million) in net profits from January until March.

According to BRI finance director Achmad Baiquni, the double-digit growth in its bottom line was mainly supported by higher loan growth.

The bank'€™s latest report said that its outstanding loans rose 19.7 percent year-on-year to Rp 432.44 trillion in the first quarter of the year.

At first, Baiquni said, it hoped to see its loans grow at the level Bank Indonesia had suggested '€” between 15 and 17 percent.

'€œHowever, it was not easy to slow down because last year we approved quite a lot of loan applications, whose withdrawal was carried out in the first quarter,'€ Baiquni told reporters in a press briefing.

The bank'€™s micro loans '€” its specialty business '€” grew even higher than the growth of its overall loans.

Micro loans, which accounted for 31.4 percent of its total loans, rose 21 percent from a year ago.

'€œWe saw increasing requests for micro loans with sizes between Rp 20 million and Rp 50 million,'€ said Baiquni.

'€œAs we all know, the smaller the loan size is, the higher the interest is,'€ he added.

The bank also recorded a rise in its net interest margin (NIM) to 9.1 percent in the first quarter this year, from 8.2 percent in the first quarter in 2013.

Besides micro loans, all of its other loan segments reported positive growth in the first quarter as well.

The retail segment climbed 20 percent to Rp 162.31 trillion and the medium segment increased 15.3 percent to Rp 19.06 trillion.

At the same time, its corporate segment was up 16.7 percent to Rp 45.89 trillion, while its state-owned enterprise segment surged 19.8 percent to Rp 69.35 trillion.

The higher-than-expected loan growth resulted in BRI posting a 25.2 percent jump to Rp 12.08 trillion in its net interest income (NII) in the first quarter, while during the same period in 2013, its NII only surged 17.8 percent year-on-year.

BRI'€™s report also reveals a year-on-year increase in its funding side by 16.6 percent to Rp 470.02 trillion.

Savings and time deposits remained the two biggest components in funding with 42 percent contribution each.

Baiquni said that BRI '€” the second-largest lender by assets in Indonesia '€” planned on boosting its third-party deposits to keep its loan-to-deposit ratio (LDR) at the healthy level of 90 percent.

By the end of March, its LDR stood at 92 percent, a rise from the 89.6 percent recorded in the first quarter of 2013.

Meanwhile, BRI president director Sofyan Basir acknowledged that the bank had submitted a letter of intent to the Deposit Insurance Corporation (LPS) expressing its interest in participating in the auction of Bank Mutiara '€” formerly known as Bank Century '€” despite it being entangled in political brouhaha and legal cases.

Sofyan claimed that BRI had already possessed the necessary funds to acquire Mutiara.

'€œWe are aware of the ongoing cases surrounding the bank, but we will be given time to conduct a due diligence process,'€ he said.

'€œBy then, we will be able to decide the next step.'€

At the moment, BRI has two subsidiaries '€” sharia bank BRISyariah and BRI Agro '€” which disburses loans to the agribusiness sector.

BRI'€™s shares price '€” offered under the code BBRI on the Indonesia Stock Exchange (IDX) '€” closed at Rp 10,025 on Wednesday, down 1.7 percent from the previous day.