Mumbai: Medium-scale private sector lender RBL Bank on Tuesday reported a 28% growth in net income for the three months period to December at Rs165.33 crore, despite an increase in bad loans and provisions which was offset by higher margins.

Higher advances which grew 38% pushed up its net interest margins by 51 basis points to 3.89% during the reporting quarter which helped it offset the impact of higher provisions and bad loans. The core net interest income rose 45% to Rs467.29 crore during the quarter under review, which boosted its overall other income by 42% to Rs258.22, while the rising bond yields crimped trading income growth at 11%, he said.

The city-based bank said its bottomline would have been stronger than Rs165.33 crore had it not been for a charge on investment in Utkarsh Micro Finance. Excluding this net profit would have been Rs169.18 crore, a growth of 31%, Vishwavir Ahuja, managing director and chief executive at RBL Bank told PTI.

Gross non-performing assets (NPAs) rose to 1.56% from 1.06% at Rs580 crore due to one chunky account which became an NPA, he said, adding however this account will be regularized in the March quarter. Accordingly, its net NPAs too rose to 0.97% from 0.52% at Rs350 crore while the restructured standard assets portfolio has decreased to 0.18% from 0.29%.

He said the cost-to-income ratio rose marginally to 54.04%, adding the move is to bring it down to 51-52% over a few years. “We continue to see strong growth momentum across all our diversified business segments while maintaining strong asset quality. We hope to close the year with a 30 per cent uptick in advance," he said.

Advances rose 38% to Rs36,889.58 crore, while deposits grew at a healthier 29% to Rs38,622.54 crore. Net interest income rose to Rs467.29 crore in the quarter from Rs321.58 crore, registering an increase of 45%. Other income rose to Rs258.22 crore from Rs182.26 crore, an increase of 42%.

Current accounts and savings accounts (Casa) ratio improved to 24.03% from 23.15%. Capital adequacy ratio as per Basel III stood at 15.03% up from 13.80%. The RBL counter rose 1.43% to Rs535.50 on the BSE, whose benchmark Sensex rallied 0.96% to close at a record of 36,139.98 on Monday.