HDFC Bank has reported a 20% year-on-year jump in its net profit for the fiscal second quarter ended September to Rs 10,605.8 crore.

The bank’s provisions fell 17% YoY to Rs 3,240 crore, of which Rs 3,000 crore was on account of non-payment on loans by borrowers.

Net interest income grew 19% YoY to Rs. 21,021 crore amid strong growth in advances.

The bank’s core net interest margin (NIM) for the quarter was flat sequentially at 4.1% of the total assets. NIM on earning assets was at 4.3%.

Asset quality improved with gross non-performing asset ratio (NPA) at 1.23% as on 30 September versus 1.28% a quarter ago and 1.35% in the year-ago period. The net NPA ratio was at 0.33%, lower than 0.35% a quarter ago and 0.40% a year ago.

Operating expenses in the September quarter rose 21% YoY to Rs 11,224.6 crore, with the cost-to-income ratio standing at 39.2%.

Provision and contingencies fell to Rs. 3,240 crore, from Rs. 3,925 crore a year ago. Provision coverage ratio stood at 73% as against 71% in the earlier-year quarter.

Total deposits stood  at Rs 16.73 trillion, up 19% YoY. CASA (current account savings account), which are low-cost deposits, grew 15.4%, with savings account deposits at Rs 529,745 crore and current account deposits at Rs 229,951 crore.

The CASA deposits accounted for 45.4% of total deposits as on 30 September 30 compared to 46.8% a year ago.  Time deposits were at Rs 9.1 trillion, up 22% YoY.

Total loans were at Rs 14.79 trillion, up 23.4% from the year-ago period. Domestic retail loans rose 27% while rural and banking loans grew 31.3%. Other wholesale loans grew 27%. Overseas loans comprised 3.1% of total advances, the bank said.

The bank’s capital adequacy ratio fell to 18% from 20% a year ago, but was well above the regulatory requirement of 11.7%.