Tamilnad Mercantile Bank Ltd (TMB) posted a 34.97% year-on-year (YoY) increase in net profit at ₹411.51 crore for the first quarter of FY27, driven by strong growth in net interest income(NII), healthy expansion in advances and deposits, and continued improvement in asset quality.
The private sector lender had reported a net profit of ₹304.89 crore in the corresponding quarter of the previous financial year.
Net Interest Income (NII) rose 32.01% YoY to ₹765.08 crore from ₹579.55 crore, while Net Interest Margin (NIM) improved by 45 basis points to 4.29% from 3.84%.
Advances, deposits register healthy growth
TMB’s total advances increased 27.01% YoY to ₹57,306 crore from ₹45,120 crore, reflecting sustained credit demand across key segments.
Total deposits grew 19.71% YoY to ₹64,409 crore compared with ₹53,803 crore a year ago. The bank’s Current Account Savings Account (CASA) deposits rose 16.94% to ₹16,852 crore from ₹14,411 crore.
The Retail, Agriculture and MSME (RAM) portfolio continued to dominate the loan book, with its share increasing to 94.38% from 93.31% a year earlier.
Asset quality strengthens
The lender reported a further improvement in asset quality during the quarter. Gross Non-Performing Assets (GNPA) declined to 0.69% from 1.22%, an improvement of 53 basis points, while Net NPA improved to 0.17% from 0.33%, down 16 basis points.
The Provision Coverage Ratio (PCR), excluding technical write-offs, improved to 75.36% from 73.04%.
The Special Mention Accounts (SMA) ratio to gross advances reduced to 2.21% from 3.05%, indicating improved portfolio quality.
Capital position remains strong
The bank’s Capital to Risk-weighted Assets Ratio (CRAR) strengthened to 32.33% from 31.55%, while net worth increased 13.23% to ₹10,562 crore, up from ₹9,328 crore last year.
Book value per share rose to ₹667 from ₹589.09.
Profitability ratios also improved, with Return on Average Assets (RoAA) increasing to 2.14% from 1.82%, while Return on Equity (RoE) rose to 15.93% from 13.30%.
Management outlook
Tamilnad Mercantile Bank Managing Director & CEO Salee S. Nair said the bank had made a strong start to FY27, supported by broad-based business growth and disciplined execution of its strategic priorities.
“The first quarter of FY27 marks a positive start to the financial year, reflecting the continued strength of our business franchise and the disciplined execution of our strategic priorities. The growth delivered during the quarter is broad-based, supported by healthy business momentum, improved operating performance and our continued focus on maintaining a strong and resilient balance sheet,” he said.
Nair said the stable asset quality alongside strong business growth underscored the bank’s commitment to responsible lending and prudent risk management. He added that an improving monsoon outlook is expected to support rural economic activity and credit demand.
Looking ahead, the bank plans to deepen customer relationships, strengthen its retail, MSME and agriculture businesses, expand its deposit franchise and accelerate investments in technology and digital capabilities to enhance customer experience and operational efficiency.