Private sector lender Kotak Mahindra Bank Monday reported a 13.54 percent growth in consolidated net profit  for the three months to December at Rs 1,844 crore, driven by core income growth on higher advances and wider margins.

On a standalone basis, net profit came in at Rs 1,291 crore, a 23 percent higher over the year-ago period.

The core net interest income grew 22.76 percent to Rs 2,939 crore, driven by a 23 percent surge in advances and also a widening of margins to 4.33 percent.

The virtual withdrawal by non-bank lenders (NBFCs) from many of  the segments helped the bank in loan pricing and led to the widening of the net interest margins, joint managing director Dipak Gupta told reporters.

However, other income declined to Rs 963.88 crore, but chief financial  officer Jaimin Bhat explained that this was due to an accounting practice with regard to treatment of provisions for mark-to-market depreciation or write-back on its investments in government securities.

The same practice was a positive from a provisions perspective, as there was a write-back of Rs 32.30 crore as against Rs 212 crore being set aside last year.

On the asset quality front, the amount of gross non- performing  assets improved to 2.07 percent from 2.31 percent in the same period a year ago.

Advances not having received payments for over 60 days but less  than 90 days when it is called as an NPA, stand at Rs 344 crore, he said.

Gupta said the bank is going slow on SME advances as it still feels that many of them, especially in the unorganised sector, are still reeling under the pains of demonetisation and GST implementation.

It will take a few quarters more for the affected MSMEs to come back, Gupta said, adding the bank will continue to be cautious with regard to it.

Bhat said the overall quantum of NPAs decreased by Rs 125 crorecourtesy the RBI special dispensation on asset recognition for MSMEs  announced earlier this month.

The bank has consistently brought down the share of advances to  NBFCs, housing finance companies and commercial realty sector, Gupta said.

He said policies like the farm loan waivers have an immediate impact  as borrowers tend to hesitate and said this is "nothing surprising" but the bank is not overtly worried.

The unsecured part in agricultural loans is experiencing some uptick  in bad assets but it is not worrying trend either, he added.

There has been no communication from the Reserve Bank on the shareholding norms, on which the lender has dragged the regulator to the Bombay

High Court, where the case is pending now, Gupta said.

The discontinuation of account opening using biometric details continued  during the reporting period and the bank is looking at an alternative on the same, Gupta said, adding it is opening about 5,000 savings accounts daily.

The share of the low-cost current and savings accounts stood at 50.3 percent.

Among the subsidiaries, profit from its non-banking arm Prime came  in at Rs 139 crore, while the same for securities dipped to Rs 99 crore on sluggish market activity; while the same from life insurance increased to Rs 125 crore and mutual fund almost doubled to Rs 76 crore.

The bank counter closed 2.42 percent up  at Rs 1,267.30 on the BSE  as against gains of 0.53 percent on the benchmark.