Ujjivan Financial Services on Wednesday reported a net profit of Rs 45.2 crore for the December quarter, a 54.2% increase year-on-year. The profits were aided by a 30.2% growth in the net interest income (NII) and a sharp fall in provisions of 75.6% y-o-y to Rs 7 crore. Total income came in at Rs 512.6 crore, up 33.45% year-on-year, pushed up by a higher net interest income, which rose by 30.2% to Rs 255 crore. The lender\u2019s net interest margin (NIM) stood at 11.8%, unchanged over Q2FY19. Ittira Davis, MD and chief executive of Ujjivan Financial Services, said in a post-results statement that the stable cost of funds and interest rate hike for group loans, which the lender had taken in September 2018, helped maintain the NIM at 11.8%. The lender\u2019s asset quality remains reasonably good with gross non-performing assets (NPA) of 1.4%, down 50 basis points over Q2FY19. The net non-performing assets at 0.3% was unchanged over the previous quarter. During the quarter, Ujjivan disbursed loans worth `2,885 crore, marking an increase of 35.2% y-o-y. Samit Ghosh, MD & CEO, Ujjivan Small Finance Bank, said growth in the micro-banking vertical had picked-up. \u201cWe expect overall growth momentum to continue, leading to 30-35% assets under management (AUM) growth in FY19.\u201d The lender\u2019s expenses were up sharply during the quarter with other expenses growing at 62% y-o-y and employee costs rising by 47%. This led to an increase in the cost to income ratio to 77.7% from 69% in Q3FY18. READ ALSO |\u00a0Modi\u2019s direct tax overhaul at work: Relief for taxpayer, small businesses on cards as election looms The management attributed the high growth in expenses to spends on opening new branches. Davis said other expenses had risen on account of opening new branches and converting some old ones to allow them to handle deposits. The lender opened 97 new branches in Q3FY19. The capital adequacy ratio at present stands at 22.2% of which Tier-I capital is 21.6%. Ujjivan Small Finance Bank is a wholly-owned subsidiary of Ujjivan Financial Services. Retail deposits as a share of total deposits were at 36.2% against 10.4% in Q3FY18 and the CASA ratio improved to 10.4% from 3.7% in Q3FY18. \u201cWe continue to improve our retail deposits business, driven by expansion of our branch network and our continuous marketing efforts,\u201d said Ghosh.