Mumbai, July 11: The earnings season for the current fiscal got off to a good start with private sector lender IndusInd Bank reporting a 26 per cent growth in net profits during the April-June quarter that is in line with Street expectations.

However, the asset quality of the bank during the period deteriorated with gross non-performing assets (NPAs) rising over the same period last year.

IndusInd Bank posted a net profit of Rs 836.55 crore compared with Rs 661.38 crore in the year-ago period. This came on the back of a strong growth in its net interest income (interest earned minus interest paid) which increased to Rs 1,774.06 crore from Rs 1,356.42 crore in the year-ago period.

The bank's non-interest income stood at Rs 1,167.26 crore during the quarter against Rs 972.97 crore in the same quarter of the previous year, marking a growth of 20 per cent. Core fee income came in at Rs 974.04 crore over Rs 781.91 crore last year, showing a growth of 25 per cent.

"The quarter saw the momentum of the economy gradually picking up as the process of remonetisation moved towards completion. With consumption activity slowly picking up, there is a sustained rise in credit uptake. Against the challenging environment, the bank has shown consistent performance, riding on the positive sentiment in the economy," Romesh Sobti, managing director & CEO of IndusInd Bank, said while commenting on the results.

At a time the banking sector continues to see growth in advances at multi-year lows, the private sector bank has registered a growth of 24 per cent.

Total advances as on June 30, stood at Rs 1,16,407 crore compared with Rs 93,678 crore on June 30, 2016.

Of this, while the consumer finance division accounted for 48 per cent, the rest came from corporate & commercial banking.

On the liabilities side, total deposits, as on June 30, stood at Rs 1,33,673 crore against Rs 1,01,768 crore last year, up 31 per cent. Of this, the low cost current and saving account (CASA) deposits stood at Rs 50,501 crore, a growth of 44 per cent.

CASA deposits now account for around 37.8 per cent of the total deposits of the bank, up from 36.9 per cent in the preceding quarter.

However, the asset quality of the bank took a hit with gross NPAs rising to Rs 1,272 crore compared with Rs 860.64 crore in the same period of last year. Gross NPAs of the bank were at Rs 1,054.87 crore in the preceding quarter.