The lender had reported a net profit of Rs 369 crore on a standalone basis in the quarter ended June 2020.
The bank had amalgamated Allahabad Bank with itself with effect from April 1, 2020.
''The factors which led to profit during the quarter were control over interest expenses, maintaining interest income and also due growth in non-interest income.
''The synergies of the amalgamation also helped us in reducing the cost of funds,'' the bank's Managing Director and CEO Padmaja Chunduru told reporters on Monday.
Net interest income (NII) grew three per cent year-on-year to Rs 3,994 crore in Q1FY22, from Rs 3,874 crore in the year-ago quarter.
Non-interest income was up 41 per cent to Rs 1,877 crore, against Rs 1,327 crore. The rise was on account of higher recovery in bad debts and an increase in foreign exchange (forex) income, the bank said in a statement.
Domestic net interest margin (NIM) improved by 51 basis points (bps) to 2.85 per cent in the first quarter of the current fiscal, against 2.83 per cent for Q1 FY21.
Gross non-performing assets (GNPAs) improved to 9.69 per cent from 10.90 per cent. Net NPAs stood at 3.47 per cent as compared with 3.76 per cent.
Fresh slippages in the reporting quarter stood at Rs 4,204 crore.
Cash recovery stood at Rs 657 crore and upgradation at Rs 1,647 crore, according to the bank's investor presentation.
Chunduru said the lender has kept a recovery target of Rs 5,000 crore during FY22.
Provisions and contingencies for Q1 FY22 stood at Rs 2,290 crore as against Rs 2,384 crore for the corresponding quarter of previous year.
Total capital adequacy ratio (CRAR) was increased by 247 bps to 15.92 per cent.
Advances grew six per cent to Rs 3,89,625 crore in Q1 FY22 over Rs 3,66,787 crore a year ago. Total deposits grew 10 per cent to Rs 5,40,082 crore as on June 2021 as against Rs 4,89,109 crore in June 2020.
Chunduru expects demand in corporate loans to improve going ahead. The lender has a corporate loan pipeline of Rs 20,000 crore which will be disbursed in third and the fourth quarter of the current fiscal.
She said the bank has identified eight accounts worth Rs 1,900 crore to be transferred to National Asset Reconstruction Company Ltd (NARCL), in the first phase.
The lender has taken board approval to buy a stake of 9.9 per cent in NARCL, she added.
In the past one year, the lender has rationalised 230 branches and is looking to rationalise 70 more branches during this fiscal, Chunduru said.
The bank's scrip closed at Rs 139.25 apiece, up 0.80 per cent on the BSE.