Mumbai: Federal Bank Ltd on Tuesday reported a subdued 0.88% rise in its September-quarter net profit as it provided higher provisions to cover its bad loans. Net profit for the quarter stood at 266.04 crore compared to 263.70 crore a year ago. That’s higher than the 253.50 crore estimated by analysts tracked by Bloomberg.

Provisions and contingencies increased 63.39% to 288.82 crore in the quarter from 176.77 crore a year ago. On a quarter-on-quarter basis, they surged 45.03% from 199.15 crore.

Asset quality worsened in the quarter with gross non-performing assets (NPAs) surging 63.4% to 3184.53 crore at the end of the September quarter from 1948.97 crore in the same quarter last year.

As a percentage of total loans, gross NPAs stood at 3.11% as compared with 2.39% in the year-ago quarter. Net NPAs were at 1.78% against 1.32% a year ago.

Net interest income (NII), or the core income a bank earns by giving loans, was up 13.75% to 1,022.47 crore versus 898.91 crore last year. Other income was at 322.89 crore, up 12.4% from 287.22 crore a year ago.

Advances for the quarter grew 25.17% to 1.01 trillion, while deposits rose 21.6% to 1.18 trillion.

At 1.43pm, shares of Federal Bank rose 7% to 81.10 on BSE while India’s benchmark Sensex Index rose 0.66% to 35096.51 points.