Canara Bank subsidiary Can Fin Homes registered a rise of 11 per cent in net profit at Rs 77.39 crore for the quarter ended June 30.
The company had reported a net profit of Rs 69.71 crore in the same period of 2017-18.
Total income increased to Rs 407.27 crore from Rs 366.79 crore in the June quarter 2017-18, the company said in a regulatory filing.
Loans outstanding by June-end 2018 rose 17.54 per cent to Rs 16,199.43 crore from Rs 13,782.62 crore earlier.
Among other metrics, the net interest margin- a key gauge of profitability- dropped to 3.26 per cent for the quarter from 3.69 per cent in the same period a year ago.
Also, gross non-performing assets or bad loans rose to 0.66 per cent of gross advances as on June 30, 2018 from 0.38 per cent by June 2017.
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Net NPA ratio also moved up to 0.44 per cent from 0.17 per cent.
The cost to income ratio improved to 14.54 per cent from 15.38 per cent.
The return on assets however witnessed a decline at 1.94 per cent from 2.06 per cent.
Company's main business is to provide loans for the purchase and construction of residential houses. It is also involved in the corporate insurance agency business activity.
Canara Bank held 29.99 per cent in Can Fin Homes as on June 30, 2018.
"The Board of Directors, at the meeting (held today), has given necessary approvals and authorisations for issue of non-convertible debentures, on private placement basis up to an extent of Rs 6,000 crore," the company said.
Stock of Can Fin Homes closed 1.45 per cent down at Rs 363.95 on BSE.
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