"Lower profit is largely due to treasury income differential on account of interest rate scenarios," bank's Chairperson and Managing Director V R Iyer told reporters here.
Total provisions in the quarter rose 3.21 per cent to Rs 1,255 crore against Rs 1,216 crore year ago.
However, the bank reported higher net interest income that improved to 2,686 crore from Rs 2,537 crore, while non- interest income came down to Rs 1,024 crore from Rs 1,181 crore.
The asset quality deteriorated as gross non-performing assets increased to 3.28 per cent from 3.04 per cent last year, while net NPA stood at 2.14 per cent from 2.10 per cent.
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In the current fiscal, the bank sees its GNPA level improving to below 3 per cent and net NPAs to sub 2 per cent. The provision coverage ratio came down to 58.10 per cent from 60.97 per cent last year in the same period.
The bank saw major slippages in the infrastructure, iron and steel sectors, and to some extent in the pharma sector during the period.
Total recovery stood at Rs 1,203 crore while upgrades were to the tune of Rs 1,034 crore. The bank wrote off Rs 815 crore of loans in the period.
The bank's capital adequacy ratio under Basel III stood at 9.98 per cent as of June 30.
Its domestic business stood at Rs 6,43,328 crore, up 22.54 per cent from Rs 5,24,995 crore. Advances rose 25.37 per cent to Rs 2,61,874 crore from Rs 2,08,883 crore.
On the proposed consolidation in the state-run banking space, Iyer said the bank is open for acquisition but it would be too early to comment on it.
The bank's share ended at Rs 280.95, down 0.86 per cent on the BSE today.