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tate-owned lender PT Bank Rakyat Indonesia (BRI) posted Rp 24.2 trillion (US$1.93 billion) in net profits last year, making it the country'€™s most profitable bank at present.

BRI, the first bank to announce its 2014 full-year financial report, saw 14.35 percent growth in its net profits from Rp 21.16 trillion in 2013.

Its outstanding loans reached Rp 490.91 trillion as of 2014, increased by 13.88 percent from Rp 430.62 trillion in 2013, according to BRI'€™s micro, small and medium enterprises (MSME) director Djarot Kusumayakti.

Djarot said micro lending, which contributed to 31.25 percent or a majority portion of its total loans, grew 16 percent. The micro segment also saw 7.3 million customers as of last year, up from 6.5 million in 2013.

'€œThe bank only posted 1.12 percent of gross non-performing loans [NPLs] in micro lending next year, contributing to total NPLs of 1.69 percent. This means we have managed to maintain a healthy condition of loans,'€ Djarot said at a press conference at the bank'€™s headquarters on Monday.

BRI finance director Achmad Baiquni said the bank also posted Rp 600.40 trillion in third-party funds last year, an increase of 23.45 percent from Rp 486.37 trillion in the same period of 2013.

The bank has managed to grow its funding higher than its loan growth due to a surging demand in time deposits, which posted the highest growth with 40.6 percent year-on-year, while current accounts and savings increased by 14.2 percent and 10.7 percent respectively.

Baiquni said the high growth of time deposits had prompted a rise of around 50-60 basis points (bps) in its cost of funds to 4.38 percent last year, from 3.71 percent in 2013.

'€œThe increase in cost of funds has slightly pressed down our net interest margin [NIM] to 8.51 percent last year from 8.55 percent in 2013. Besides, we also put more of our funds in non-loan assets that offer lower yields than loans due to low demand for credit last year,'€ he said.

This year, Baiquni said BRI expected to grow its lending by around 15 percent to 17 percent, and third-party funding between 14 percent to 16 percent, based on its calculation of a prediction of 5.2 percent to 5.4 percent growth in the country'€™s economy as well as the remaining tight liquidity in the banking industry.

According to Baiquni, BRI will be in '€œwait-and-see'€ mode concerning the government'€™s plan to launch infrastructure projects this year, saying '€œthe lender will review again its loan target in the second half if infrastructure prompts increase in loan demand'€.

However, Djarot said the bank managed to post a 24.9 percent increase in fee-based income to Rp 6.1 trillion last year from Rp 4.9 trillion in 2013 due to a surging 71.5 percent growth in e-banking transactions.

Djarot said the electronic-transaction growth was partly the result of an additional 2,500 new ATMs, to a total of 20,792 last year, and also the establishment of 594 new offices, including regional offices and micro outlets.

As part of digital innovations and a financial-inclusion program, BRI acting president director Asmawi Syam said BRI posted last year a total of 35,000 agents of BRI-Link, all of whom acted as the bank'€™s appointed individuals who provide banking services through mobile phones.

The agents, Asmawi said, had helped the bank to conduct its branchless banking program '€” a mechanism campaigned by Bank Indonesia and the Financial Services Authority (OJK) to open access to banking and financial services to the unbankable segment of the country'€™s population.

'€œThe 35,000 agents have brought 1.2 million new customers, with an average of 65 customers per agent. This year, we hope that the number of our agents will reach 50,000, so that the number of new customers will be four times higher,'€ he said.

Djarot said BRI booked total assets of Rp 778.02 trillion last year, a rise of 28.34 percent from Rp 606.37 trillion, making it the largest bank in terms of asset size, with more than 50 million total customers.