Kotak Mahindra Bank said on Saturday its net profit for the April-June quarter jumped 81 per cent from a year earlier, helped by a one-time gain from the divestment of a stake in its general insurance arm.

The private lender's standalone net profit, excluding subsidiaries, rose to ₹62.5 billion ($747 million) in the fiscal first quarter, from ₹34.52 billion in the same period last year.

That was sharply higher than analyst estimates of ₹37.57 billion , according to LSEG data.

Kotak said it recorded "exceptional" income of ₹35.2 billion during the quarter after completing the divestment of a 70 per cent stake in its subsidiary, Kotak Mahindra General Insurance Company, to Zurich Insurance Company in June.

Kotak's net interest income, the difference between interest earned and paid out, increased 10 per cent on-year to ₹68.42 billion.

Its net interest margin (NIM), a key gauge of profitability for banks, shrank to 5.02% in the quarter from 5.57% in the same period last year, and was also lower than the 5.28% of the January-March quarter.

Indian banks have consistently seen healthy demand for loans as economic growth has been strong and urban consumption demand is high. Banks are trying to raise deposits to fund the credit growth, which has weighed on their margins.

The private lender's loans rose 20 per cent in the quarter, while deposits were up 21 per cent.

Its gross non-performing assets (NPA) ratio, a key gauge of lenders' asset quality, was at 1.39 per cent at the end of June, flat to the prior three months.

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