"The growth rate was higher than the target of 15 to 17 percent set previously," Maryono, the president of the state owned bank said here on Wednesday.
Its net profit rose to Rp341 billion in the January-March period of 2014 from Rp334 billion a year earlier, with assets reaching Rp136.96 trillion or an increase of 13.97 percent from Rp120.18 trillion.
Maryono said the profit sector accounted for 87.25 percent or Rp89.71 trillion of the outstanding credits.
He said in the first quarter of 2014, BTN finance the purchases of 28,032 units of houses and apartment.
Credits for non property sectors accounted for Rp13.11 trillion or 12.75 percent of the total credits.
Maryono said the credit expansion was above the average growth recorded by banks in the country indicating the presence of BTN is still needed by the public especially those of middle to lower classes.
Minister for State Enterprises Dahlan Iskan planned merger between BTN and Bank Mandiri, the largest state lender in assets, triggering a controversy.
Dahlan Iskan said the plan to create a giant bank to be competitive in this region when the ASEAN Economic Community (AEC) scheme is implemented in 2015.
Earlier this month the bank employers rallied in front of the bank protesting the plan.
A number of observers also were against the plan saying BTN and Bank Mandiri had different core businesses.
Rizal Ramli, an economist and former chief economic minister, accused the government and the management of Bank Mandiri of having a hidden agenda in planning the merger when the country is holding general elections.
The country held legislative election on April 9 to be followed with presidential election on July 98.
Leading banker Deni Daruri described as highly risky the plan for PT Bank Tabungan Negara (BTN) to be taken over by PT Bank Mandiri.
It is risky to force the the plan on the two state lenders as they have different core businesses, Deni said.
It would be best for the government to plan merger between Bank Mandiri and Bank Negara Indonesia (BNI) and let BTN to be taken over by Bank Rakyat Indonesia (BRI), he suggested.
BNI and BRI are also state banks.
Deni said merger should be made between banks having similar characteristics.
He regretted the reasons given for the merger plan by Minister for State Enterprises Dahlan Iskan.
"If the idea is to create a big bank, the government should plan merger between Bank Mandiri and BNI that Indonesia would have a powerful anchor bank," Deni said.
It would not give significant additional strength to Bank Mandiri if it acquires BTN, he said, adding, on the contrary, BTN may no long carry out its function as the financier of low cost houses.