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India's Yes Bank said net profit more than quadrupled in the October-December period, helped by a drop in loan-loss provisions and healthy growth in lending, but the result fell short of market expectations.

Standalone net profit rose to 2.31 billion rupees ($27.8 million) in the financial third quarter, the Mumbai-based private lender said on Saturday, up from 515.20 million rupees in the same period a year earlier.

Analysts on average had expected a net profit of 3.43 billion rupees, according to LSEG data.

Yes Bank took a sharp hit on profits in the year-earlier quarter as it set aside more provisions on its balance sheet after transferring bad loans to private equity firm J.C. Flowers.

In the recent quarter, provisions and contingencies fell to 5.55 billion rupees from 8.45 billion rupees a year earlier.

Net interest income, the difference between the interest earned on loans and that paid to depositors, rose 2.33% to 20.17 billion rupees.

The net interest margin, a key indicator of a bank's profitability, fell to 2.4% from 2.50% a year earlier, but was higher than the 2.30% reported in the previous three months.

Most Indian private lenders have tighter lending margins for the third quarter as deposits got repriced higher amid tightened banking system liquidity.

Yes Bank's net advances grew 11.8% on year to 2.18 trillion rupees, led by retail loans, while deposits rose 13.2%.

"We will see how we can grow our deposit base further to support a loan growth of 15% going forward," Chief Executive Prashant Kumar told a conference call.

The bank had a 40-basis-points impact on capital ratios due to the Reserve Bank of India raising risk weights on unsecured loans, Kumar said.

Its gross non-performing asset ratio was at 2% at the end of December, unchanged from the end of the previous quarter.

Yes Bank expects bad loan recoveries worth 15 billion rupees this quarter, Kumar said. The bank's exposure to alternate investment funds stood at 1.25 billion rupees, which was fully provisioned for, in line with the central bank's mandate, he said.

Shares of Yes Bank ended 0.8% higher on Thursday ahead of the results. Friday was a public holiday in India.

($1 = 83.1150 Indian rupees)