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tate-owned lending giant Bank Rakyat Indonesia (BRI) is expecting its loan and profits to increase slightly by the end of the year as a result of the central bank'€™s recent monetary policy easing.

BRI finance director Haru Koesmahargyo said that with the central bank lowering banks'€™ reserve requirements (GWM), the lender would have additional liquidity of Rp 3 trillion to be channeled as loans before the end of this year.

Haru said BRI'€™s total third-party funds (DPK) had reached Rp 611.3 trillion (US$44.4 million) as of September, with 8 percent of the total paid as primary GWM to Bank Indonesia (BI).

'€œAs the primary GWM will be cut by 0.5 percent to 7.5 percent, it means 0.5 percent of our total DPK, or roughly Rp 3 trillion, which was previously paid as primary GWM, can be channeled as loans,'€ Haru said on Thursday.

BRI would have more wiggle room to compete with other banks in terms of lending rates, Haru said, as the monetary relaxation would help the lender to lower its cost of funds.

In addition, BRI would have potential additional interest income, which would help raise profits slightly by the end of the year, he added.

'€œWe can use 0.5 percent of the total DPK as loans, which have a higher yield than if they were used as the central bank'€™s reserve requirement. That will of course have an effect on our profits,'€ Haru said, adding that BRI'€™s average lending rate stood at 12 percent.

BRI, which remains the country'€™s most profitable bank, saw only a 1.41 percent year-on-year (yoy) increase to Rp 18.29 trillion in its net profits as of September. Net profit growth by the end of third quarter was slightly higher than its 1.16 percent yoy growth in the first half.

The lender'€™s loans grew by 11.8 percent yoy to Rp 518.9 trillion as of September, slightly higher than national industry growth of 11.1 percent in the same period.

Despite higher capacity in loans, however, Haru said BRI'€™s lending growth might not reach 12 percent yoy by the end of this year as it was still waiting for faster government spending and stronger demand in the fourth quarter.

'€œWe are still focusing on certain segments, such as micro, infrastructure and corporate, especially state owned enterprise projects,'€ he added.

BRI corporate secretary Hari Siaga Amijarso said the bank was still arranging its business plan for next year, including its loan growth target, which he said would be submitted to the Financial Services Authority (OJK) by the end of November.

Hari said the bank assumed that the macroeconomic conditions in 2016 would be better, though still not reaching previous years'€™ rapid economic growth.

'€œCurrently, growth in the trading sector still aligns with our expectations, but we also hope that larger amounts of investment, such as in infrastructure projects, can be a reliable engine of development for the country,'€ Hari said.

Along with the credit growth plan, Hari said the bank was also arranging its capital expenditure (capex) in IT for next year, which would include installments of 95 new solar-powered ATMs, bringing the total to 100 machines next year.

'€œSolar-powered ATMs are part of our services for customers who live in the remotest areas in the country, where electricity is still in short supply and expensive,'€ Hari said.