Tamilnad Mercantile Bank Limited (TMB) reported a flat net profit of ₹253 crore for the fourth quarter, remaining unchanged from the corresponding period last year. This was attributed to an increase in employee benefit costs and additional provisioning for a non-performing asset (NPA).
Despite the flat performance, MD & CEO S. Krishnan highlighted that the bank had set aside ₹28 crore for a possible salary increase. He stated that the bank received a charter of demands for wage increments in April and has already provided ₹69 crore for this purpose. Furthermore, ₹13-14 crore has been earmarked for future NPAs.
TMB’s net interest income (NII) rose to ₹567 crore from ₹527 crore in the previous year. However, the bank’s net interest margin (NIM) contracted to 4.24% from 4.34%. Net profit margin also declined from 20.18% to 17.85%.
In terms of asset quality, gross non-performing assets as a percentage of total advances increased slightly to 1.44% from 1.39%, while net NPA jumped to 0.85% from 0.62%. The bank’s provision coverage ratio fell from 90.90% to 87.52%.
Despite these challenges, TMB’s retail, agriculture, and MSME segments exhibited growth, increasing from 87% to 91% of the total loan portfolio. The bank’s capital adequacy ratio stood at 29.37%, compared to 26.26% previously.
Mr. Krishnan expressed optimism, stating that slippages had declined to ₹59.35 crore from ₹70 crore, while cash recovery and upgradation improved to ₹80 crore from ₹41 crore. He expects slippages to decline further in the coming quarters.
Total deposits increased by 3.66% to ₹49,515 crore, and advances grew by 6.35% to ₹39,970 crore. Current account savings account (CASA) deposits rose by 6.84% to ₹14,676 crore.
TMB reported six non-credit fraud cases amounting to ₹3.96 lakh. The bank recovered ₹2.29 lakh and made a 100% provision for the remaining ₹1.67 lakh. The board of directors recommended a 10% dividend for shareholders.
