(Bloomberg) -- HDFC Bank Ltd.’s profit rose in the third quarter, beating estimates, helped by loan growth and improved asset quality as consumer demand picked up.

Net income stood at INR 103.4 billion rupees ($1.4 billion) rupees for the quarter ending December compared with 87.6 billion rupees a year ago. That beat the average estimate of 101.4 billion rupees by 12 analysts in a Bloomberg survey. 

India’s largest private lender is the first bank to report third quarter numbers. HDFC Bank’s loans grew 5.1% during the quarter, outpacing the banking sector’s 4%. The lender stepped up retail lending after the removal of a regulatory ban on issuing new credit cards. 

Still, a rise in coronavirus cases is raising questions about India’s ability to sustain its world-beating growth momentum as the spread of infections forces people to stay indoors. Loan slippages from micro and small firms may rise through March as some repayment moratoriums expire though ample provisioning by HDFC Bank will hold it in good stead, according to Bloomberg Intelligence analysts Rena Kwok and Sheenu Gupta.

Read: Citi, ICICI Lower India Growth Projections on Virus Surge

HDFC Bank’s gross bad loan ratio narrowed to 1.26% as of December end from 1.35% three months ago. It set aside 29.9 billion rupees in provisions during the third quarter, less than the 39.2 billion rupees in the three months prior and 34.1 billion rupees a year ago. 

©2022 Bloomberg L.P.