Private sector lender City Union Bank has reported a 10.7% rise in net profit at Rs 123.53 crore for the first quarter ended June 30.
The bank had reported net profit at Rs 111.56 crore in the corresponding quarter of previous financial year.
Total income has also rose to Rs 883.31 crore during quarter from Rs 810.93 crore in the same period a year ago, the bank said in a regulatory filing.
Healthy growth in corporate and retail banking helped the bank post decent profits, it said.
However, the bank's provisioning for bad loans were raised substantially despite only a marginal uptick in non-performing assets (NPAs).
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The gross NPAs were 2.62% of the gross advances as on June 2016, up from 2.01% share in the same period a year earlier. In absolute terms, these were Rs 555.03 crore against Rs 359.43 crore.
Net NPAs also increased to 1.59% (Rs 333.98 crore) of net advances from 1.32% (Rs 234.33 crore) a year earlier.
The bank parked aside Rs 70.75 crore towards bad loan provision for April-June quarter compared to Rs 45.10 crore a year ago.
According to RBI's asset quality review guidelines, banks are required to put aside a higher amount for bad loans and even have to make provisions for advances showing signs of slipping into non-performing asset.
Shares of City Union Bank were trading 0.62% up at Rs 130.70 on BSE.