CHENNAI: Tamilnad Mercantile Bank (TMB) reported its highest-ever quarterly net profit of Rs 451 crore for the September quarter, up 42% year-on-year, driven by strong core business income and robust credit growth.
The bank expects advances to grow by over 22% this fiscal, while deposit growth is projected to remain above 20%.
“Profit has been driven by the core business,” said Salee Sukumaran Nair, MD-CEO, TMB, attributing the performance to a 35.17% rise in net interest income to Rs 807 crore for the quarter Q2FY27 as against Rs 597 crore for Q2FY26 and effective cost management.
Operating profit rose 41.8% to Rs 642 crore.
The bank's total business grew to Rs 1.30 lakh crore, with deposits increasing 25.49% to Rs 69,546 crore and advances rising 29.32% to Rs 60,691 crore. The credit-deposit ratio improved to 87.27% from the previous quarter, giving the bank room to expand lending further, Nair said.
Ahead of the expected credit loss (ECL) framework coming into effect on April 1, 2027, TMB has already provided for its special mention accounts (SMA-1 and SMA-2) in line with the new norms and fully provided for its stressed non-fund-based portfolio.
The estimated ECL requirement stood at Rs 385 crore as of September 30, against provisions of Rs 304.24 crore already available, covering nearly 80% of the requirement. Nair cautioned that this figure could increase as the balance sheet expands.
The bank will also open 60 branches this fiscal, including at least 20 outside Tamil Nadu, of which nine have already been opened.
The bank is also stepping up cybersecurity investments, with around 20% of its planned IT investment of Rs 280 crore earmarked for the area this year.
Total business grew by 27.25%, highest YoY growth since TMB's listing
Deposits up by 25.49 % on YoY basis, to Rs 69,546 crore (PY Rs 55,421 crore)
CASA surged to Rs 17,629 crore (PY Rs 15,163 crore)
Advance level has increased to Rs 60,691 crore with 29.32% growth on YOY basis
Lowest GNPA in the last 10 years at 0.61%
RAM segment has increased to 28.96% in Q2FY27 as against Q2FY26
Plans to focus further on MSME lending
Expects advances growth to exceed 22% for the full year, against its earlier guidance of 21%
Asset quality strong, with gross non-performing assets (NPAs) at 0.61% and net NPAs at 0.14%
Fresh slippages declined to Rs 35 crore from Rs 43 crore in the June quarter
Capital adequacy ratio stood at 32.39%