Southeast Asia's biggest economy has seen double-digit growth in digital banking transactions in the past few years with transactions in 2022 set to grow 30% to 53,144 trillion rupiah ($3.38 trillion), according to central bank data.

Backed by tech firm PT Akulaku Silvrr Indonesia, which is part of China's Alibaba group, BNC expects to close 2023 with a 30 billion rupiah to 50 billion rupiah profit, President Director Tjandra Gunawan said in an interview on Thursday, following its first three-month net profit in the third quarter.

The lender said it has more than 20 million customers, though in 2023 it aims to increase the proportion of monthly active users of its application to more than 50% versus 30% to 40% at present by offering new products such as loans to small- and medium-enterprises (SMEs).

"Number of users is important, but it's more important to ensure stickiness of customers," Tjandra said.

In comparison, rival Gojek's Bank Jago had nearly 4 million customers as of August.

Tjandra also pledged that its high deposit rate of up to 8% per year would not be a one-off.

"The (high interest rate) is not a promotion, it is our product," he said.

BNC's net interest margin (NIM), an indicator of profitability and as of September at 12.7%, was sufficient even with high deposit rates, he said.

Sea Group's digital bank SeaBank Indonesia offers a deposit rate of 7%, while Bank Jago offered a 7% rate for its saving products during a promotional period in August.

Suria Dharma, a director of securities firm Samuel Sekuritas Indonesia, said a high deposit rate strategy may pose a challenge in the long-run with the cost of funds currently high, which could hit banks' NIM, as global interest rates rise to tame inflation.

BNC is targeting 10-11 trillion rupiah loan disbursement this year and up to 40% growth in 2023, Tjandra said.

But the lender is still expected to book a full-year loss of around 500-600 billion rupiah in December, Tjandra said.

($1 = 15,725.0000 rupiah)

(Reporting by Stefanno Sulaiman; Editing by Ed Davies)