CHENNAI, July 18 (Reuters) - The net profit of India's largest private lender, HDFC Bank Ltd HDBK.NS, grew by nearly a fifth, it said on Saturday, driven by higher interest income and lower costs.

HDFC Bank's net profit for the quarter ending June rose to 66.58 billion rupees ($889.11 million), up from 55.68 billion rupees a year earlier, the company said in a regulatory filing.

Net interest income grew about 18%, while operating costs fell by nearly 3%, the bank said. Higher revenue from the bank's retail banking and treasury segments made up for a tepid quarter for wholesale banking.

Gross non-performing assets were slightly higher at 1.36% of all loans as of June 30, compared with 1.26% at the end of March quarter.

Provisions and contingencies - money set aside by the bank to account for potential defaults - for the quarter that ended June 30 rose 2.8% from the end of the March quarter to 38.92 billion rupees.

However, the bank warned of higher defaults and a potential rise in provisions.

"The continued slowdown may lead to a rise in the number of customer defaults and consequently an increase in provisions thereagainst," HDFC said, adding that it has already seen a fall in loan originations, the sale of some products and the use of credit and debit cards.

($1 = 74.8840 Indian rupees)

(Reporting by Sudarshan Varadhan. Editing by Gerry Doyle)

((Sudarshan.Varadhan@thomsonreuters.com; +919810393152; Twitter: https://twitter.com/sudvaradhan @sudvaradhan;))

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