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rivate lender Bank DBS Indonesia, part of Singapore'€™s DBS Group Holdings, expects higher loan growth this year compared to 2015 as it predicts an improvement in the country'€™s economy.

DBS Indonesia president director Paulus Sutisna said the bank projected that its loans would grow by 12 percent in 2016, higher than the 10 percent booked as of last year.

According to its financial report, the bank booked loans of Rp 43.4 trillion (US$3.11 billion) as of September, an increase of 9.87 percent year-on-year (yoy) from Rp 39.5 trillion in the same period of 2015.

'€œWe are more optimistic about this year because the government is holding early auctions and procurements for its spending on infrastructure projects. Such acceleration will help the country'€™s economic growth,'€ Paulus said after an event on Wednesday.

Paulus said acceleration in government spending would boost the real sector, which in turn would increase demand for bank loans, adding that '€œour growth will depend on the performance of our clients'€.

Given Indonesia'€™s large population the bank will focus on sectors related to the mass segment such as retail and consumer goods and some types of manufacturing and infrastructure-supporting industries.

'€œWe'€™ll still focus on some commodities, such as palm oil, as well as automotive, chemical and pharmaceutical industries,'€ he said.

Paulus said the bank was also planning to enlarge its consumer and retail banking as well as small and medium enterprise (SME) portfolios as it still depended mainly on the corporate segment.

'€œCorporate banking is dominant now as our retail business is still under 20 percent of our total lending. We hope to divide evenly our consumer and retail banking, SME and corporate portfolios by one-third each, perhaps in the next five to seven years,'€ he said.

The government has forecast that Indonesia'€™s economic growth will reach 5.3 percent in 2016. The country'€™s GDP growth stood at 4.73 percent for July to September, a slight increase from the 4.67 percent growth posted in the second quarter and 4.72 percent in the first three months of the year.

Despite the optimism, Paulus said the bank would remain cautious about various challenges in the global economy that still lingered, such as falls in commodity prices and currency volatility, as they would have an impact on Indonesia.

Challenges in the global and domestic economy also affected DBS Indonesia'€™s income as it saw losses of Rp 178.9 billion as of September 2015, compared to net profits of Rp 366 billion in the same period last year. However, the bank'€™s unaudited financial report in November shows that it already started to post net profits of Rp 23.79 billion.

Paulus said the bank would also invest in internet banking, which was essential to support a bigger consumer portfolio in the future, especially in fee-based income.

As part of its efforts to grow fee-based income, the bank has enhanced its existing partnership with life insurer Asuransi Jiwa Manulife Indonesia, part of Canada'€™s Manulife Financial, through the launch of a new single-premium, unit-linked product MiWealth Protection.

The new product is designed for DBS customers who wish to grow their wealth in order to be financially secure and enjoy their life in retirement. DBS Indonesia consumer banking group director Wawan Salum said the bank expected 20 percent growth in the number of wealth-management customers this year.