The World Bank yesterday announced a decline of $1.1 billion in loans and credits by the bank and its International Development Association subsidiary in the year ended June 30 to $14.4 billion, the first such decline in the bank's 39-year history.

But the bank racked up a record profit of $1.14 billion for the year, thanks to its investments. "The strong financial performance of the bank over the last year has increased the institution's ability to better serve its member countries," World Bank President A. W. Clausen said.

New loan commitments by the International Bank for Reconstruction and Development dropped to $11.4 billion from $11.9 billion the year before. Senior Vice President for Finance Moeen Quereshi attributed the drop in new IBRD loan commitments to the continuing financial problems of the poor borrowing countries. Among countries borrowing less were Nigeria, the Philippines and Argentina, he said.

A total of $3 billion in long-term credits was advanced by the International Development Association, down from $3.6 billion in fiscal 1984. In the case of IDA, as distinguished from IBRD, the decline was caused by a lack of funds, not a dip in demand. IDA depends on contributions from major donors. All reduced their participation after the United States sharply reduced its contribution.

Bank officials said at a press conference that the bulge in earnings came from lower borrowing costs and profitable investment of its large liquid funds.

The bank's cost for funds averaged 7.44 percent, while it was able to obtain a return of 12.63 percent on its liquid-asset portfolio. Quereshi said that financial markets had again "demonstrated their confidence in the World Bank as the premier international credit."

The bank also reported that it had been able to reduce charges to the poor countries that borrow. As of July 1, it cut its basic interest rate to 8.82 percent a year from 9.29 percent.