(Reuters) - Shares of India's Axis Bank fell 3.7% on Friday, a day after the lender posted a smaller-than-expected quarterly profit increase, weighed down by slower loan growth and higher provisions set aside for potential bad loans.

Axis Bank, India's fourth-largest private lender by market value, said on Thursday its standalone net profit rose 4% to 63.04 billion rupees ($728.1 million) for the third quarter, missing analysts expectations for a profit of 65.16 billion rupees.

The lender's earnings are likely to be under near-term pressure as the credit-to-deposit ratio will remain elevated and the number of loans not being repaid, specially from retail borrowers, might increase before improving, said analysts at Systematix Institutional Equities.

($1 = 86.5850 Indian rupees)

(Reporting by Ashna Teresa Britto; Editing by Sherry Jacob-Phillips)