By Gabriele Parussini

MUMBAI--Axis Bank Ltd., India's third-largest private lender, said on Friday that its net profit in the fiscal first-quarter rose 18.7% thanks to a strong rise in deposits.

Net profit increased to 19.78 billion rupees ($309 million) in the three months ended June 30, from 16.67 billion rupees a year earlier, it said in a stock exchange filing. Deposits rose 13% to 3.08 trillion rupees.

The bank's gross bad loans edged higher to 1.38% of total loans, from 1.34% a year earlier, but remained much below the industry average of about 4%.

Write to Gabriele Parussini at gabriele.parussini@wsj.com

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