Kotak Mahindra Bank reported a 67% year-on-year increase in quarterly net profit, reaching 34.52 billion rupees ($421.1 million) in the three months ending June 30, surpassing analysts’ average forecast.

The bank’s net interest income rose 33%, and its net interest margin (NIM) rose to 5.57% from 4.92% a year earlier.

The bank’s NIM will moderate as fund costs rise.

Deposits rose 22% and loans 19%, driven by strong loan demand.

Kotak Mahindra Bank maintained constant asset quality, with a net NPA ratio of 0.40% at the end of June.