ICICI Bank beat first-quarter expectations on Saturday as higher interest income and loan growth prompted a record net profit for India’s second-biggest private lender.

Net profit rose 39.7% to 96.48 billion Indian rupees ($1.18 billion) for the April-June quarter, beating analyst estimates of 91.8 billion rupees, according to Refinitiv IBES data.

Net interest income – the difference between interest earned and interest paid – increased by 38% to Rs 182.27 billion as ICICI’s net interest margin increased to 4.78% from 4.01% the previous year.

The Mumbai-based lender’s total advances rose 20.6%, largely driven by retail loans, while deposits grew by 17.9%.

Loan growth in India has remained in double digits for the past few months, despite a 250 basis point increase in interest rates since May last year.

Banks are trying to shore up their deposit base amid increasingly tight liquidity conditions, while cleaning up their balance sheets.

HDFC Bank, India’s largest private lender, this week reported a 15.8% increase in loans for the April-June quarter and a 19.2% increase in deposits.

ICICI Bank’s asset quality remained stable, with a gross non-performing assets (GNA) ratio of 2.76% at the end of June, compared to 2.81% at the end of March.

Its net NPA ratio was unchanged quarter-over-quarter at 0.48%.

The Bank recorded provisions and contingencies of IDR 12.92 billion, an increase from IDR 11.44 billion a year earlier.

($1 = 81.9800 Indian rupees) (Reporting by Siddhi Nayak; Writing by William Mallard and Jason Neely)