Kotak Mahindra Bank, India’s second largest lender by market capitalization, saw its net profit for the first quarter of financial year 2018-19 rise 12%, coming in at Rs 1,025 crore as against Rs 913 crore in the first quarter of the previous year.

Net interest income (NII) rose 15% to Rs 2,583 crore from Rs 2,246 crore a year ago. Net interest margin was 4.3% compared to 4.5% a year ago.

A Reuters poll had expected the bank’s profit to rise 28% and NII to grow by 19%.

Despite missing the estimates on the profit and NII fronts, the bank posted a steady loan growth and stable asset quality.

Advances rose 24% for the first quarter of FY19 to Rs 1.76 lakh crore from Rs 1.42 lakh crore a year ago. Gross NPA ratio stood at 2.17%, down from 2.58% a year ago and 2.22% in the previous quarter. Net NPA ratio too contracted to 0.86% from 1.25% in the previous year and 0.98% in the fourth quarter of FY18.

Slippages came in at Rs 321 crore, down nearly 46% from Rs 594 crore a year ago. Provisioning and contingencies stood at Rs 470 crore, higher than Rs 204 crore a year ago and Rs 307 crore in the previous quarter.

CASA ratio (ratio of current and savings account deposits to total deposits) improved to 50.3% from 43.9% a year ago.

Profit before tax (PBT) from corporate banking declined nearly 12% YoY, coming in at Rs 645 crore as against Rs 732 crore last year. Meanwhile, PBT from retail banking grew a whopping 94% YoY, going from Rs 279 crore a year ago to Rs 543 crore in the quarter ended June 2018. This seems to be a result of the company’s push towards retail banking, especially with the launch of its zero balance 811 account.

The bank’s digital push continues, with mobile banking transactions crossing 10 million in volume and Rs 10,000 crore in value in June 2018. The bank said total payment gateway transactions grew 70% in value YoY in the same month.

On a consolidated basis, Kotak Mahindra’s profit came in at Rs 1,574 crore, up around 17% from Rs 1,347 crore a year ago.

The asset management business has put up an impressive performance, with average assets under management (AUM) rising nearly 27% to Rs 1.28 lakh crore from Rs 1 lakh crore last year. Profit from the AMC arm rose a whopping 250%, going from 15 crore last year to Rs 51 crore in Q1 of FY19.

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