While provisions in Q3FY18 totalled `212.77 crore, in the December 2018 quarter there was a write-back of `32.3 crore. The bank’s pre-provisioning profit grew at just 6.5% year-on-year to `1,938.5 crore even though the net interest income grew 22.7% y-o-y to `2,939 crore. This was due to a sharp rise in expenses.

Expenses during the quarter rose 25% year-on-year to `5,275.8 crore. The management attributed the higher expenditure to spends on advertising and promotions. Jaimin Bhat, CFO, KMB, said the lender had spent on more advertising and promotion campaigns.

The net interest margin (NIM) rose 20 basis points (bps) to 4.3% with the management confirming that the lender was able to disburse loans at a higher rate of interest. Bhat said the NIM had improved on account of a higher rate of interest charged to borrowers.

Dipak Gupta, joint managing director, KMB, said strong advances in the December quarter were partly due to a bigger exposure to the MSME sector. He added that the lender’s exposure to the NBFC sector and the oil and gas sector had fallen. Advances grew 23% to `1.96 lakh crore.

The asset quality saw an improvement, with gross non-performing assets (NPAs) falling 8 bps sequentially to 2.07% of the loan book. Net NPAs were down 10 bps sequentially at 0.71%.

Total deposits grew 34% year-on-year in the December 2018 quarter to `73,958 crore. The share of CASA stood at 50.7% at the end of December 2018 compared with 46.7% in December 2017.

The bank had a provision write back of `271 crore on account of a mark-to-market depreciation on investments in the ‘available for sale’ (AFS) and ‘held for trading’ (HFT) categories.