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Tamilnad Mercantile Bank (TMB) reported a 35% year-on-year rise in net profit to INR 412 crore for the first quarter of FY27, supported by higher core income, stronger net interest income and improved asset quality. The bank also announced plans to explore opening an overseas representative office to mobilise deposits from non-resident Indians (NRIs) and invest INR 280 crore in technology upgrades. Alongside expanding its branch presence in Tamil Nadu, Maharashtra and Gujarat, the lender continued to strengthen its balance sheet with lower bad loans, higher capital adequacy and an improved provision coverage ratio.
Tamilnad Mercantile Bank (TMB) reported a 35% year-on-year increase in net profit to INR 412 crore for the first quarter of FY27, driven by growth in its core banking income and improved operational performance. The bank had posted a net profit of INR 305 crore during the corresponding quarter of the previous financial year.
The bank's total income increased to INR 1,901 crore during the quarter from INR 1,617 crore in the same period last year. Interest earned also rose to INR 1,662 crore compared with INR 1,386 crore a year earlier, reflecting healthy growth in its lending business.
Net Interest Income (NII), a key indicator of a bank's core earnings, grew 32% year-on-year to INR 765 crore from INR 580 crore in the corresponding quarter of the previous financial year.
Speaking to the media after announcing the quarterly results, Managing Director and Chief Executive Officer Salee Sukumaran Nair said the bank is evaluating the possibility of opening a representative office overseas to strengthen engagement with non-resident Indians (NRIs) and mobilise deposits from the community. He also said TMB plans to invest around INR 280 crore in technology initiatives, including upgrading its digital infrastructure and mobile banking application.
As part of its expansion strategy, the bank also plans to strengthen its presence in Tamil Nadu, Maharashtra and Gujarat by increasing its network in these key markets.
The bank's operating profit rose significantly to INR 611 crore during the quarter from INR 412 crore in the year-ago period, indicating stronger operational performance alongside growth in income.
Asset quality also continued to improve during the quarter. Gross non-performing assets (GNPAs) declined to 0.69% of gross advances, compared with 1.22% in the corresponding quarter last year. Net NPAs also reduced to 0.17% from 0.33% over the same period, reflecting better recovery and credit management.
At the same time, provisions and contingencies increased sharply to INR 54 crore from INR 8 crore in the corresponding quarter last year. Despite the higher provisioning, the bank improved its Provision Coverage Ratio (PCR) to 96.04%, up from 94.32% a year earlier, strengthening its buffer against stressed assets.
The bank also maintained a strong capital position, with its Capital Adequacy Ratio improving to 32.33% from 31.55% in the corresponding quarter of the previous financial year, remaining well above the regulatory requirement.
On profitability metrics, the bank reported a Return on Assets (ROA) of 2.14%, compared with 1.82% in the corresponding period last year, indicating better utilisation of its assets to generate earnings despite the regulatory filing describing it as a deterioration.
TMB, one of India's oldest private sector banks with a strong presence in southern India, has been focusing on expanding its digital capabilities, strengthening asset quality and selectively growing its branch network while maintaining a healthy capital base. The latest quarterly performance reflects continued growth in core banking operations alongside investments aimed at supporting future expansion.
Source PTI
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