Earnings Review
Lower provisions lift Tamilnad Mercantile Bank's PAT 15.4%
This story was originally published at 18:30 IST on 23 April 2025
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--Tamilnad Mercantile Bank Jan-Mar PAT INR 2.92 bln vs INR 2.53 bln yr ago
--Tamilnad Mercantile Bk Jan-Mar total income INR 15.42 bln vs INR 14.18 bln
--Tamilnad Mercantile Bk Jan-Mar provisions INR 172.2 mln vs INR 235.4 mln
--Tamilnad Mercantile Bank to pay INR 11 per share final dividend
--Tamilnad Mercantile Bank FY25 PAT INR 11.83 bln vs INR 10.72 bln year ago
--Tamilnad Mercantile Bk FY25 total income INR 61.42 bln vs INR 54.93 bln
--Tamilnad Mercantile Bank gross NPA ratio 1.25% Mar 31 vs 1.32% qtr ago
--Tamilnad Mercantile Bank net NPA ratio 0.36% Mar 31 vs 0.41% qtr ago
--Tamilnad Mercantile Bk Basel III capital adequacy ratio 32.71% as on Mar 31
--Tamilnad Mercantile Bank provision coverage ratio 71.02% as on Mar 31
By Sachi Pandey
MUMBAI – Tamilnad Mercantile Bank reported a strong set of numbers for the March quarter of 2024-25 (Apr-Mar), supported by drop in provisions and improvement in asset quality. Stable income growth and a healthy capital position also supported the bank's performance.
The bank's net profit rose 15.4% on year to INR 2.92 billion in Jan-Mar. Sequentially, however, the net profit fell by 2.8%, from INR 3.00 billion in Oct-Dec. The on-year improvement in bottom line was largely due to a sharp fall in provisions and contingencies to INR 172.2 million from INR 235.4 million a year ago. Sequentially, however, the provisions surged five-fold from INR 32.60 million in Oct-Dec.
In its notes to accounts, the bank said it recorded nine non-credit fraud cases during the year, totalling INR 5.74 million. "After considering the recovery of 27.47 lakhs (INR 2.75 million), the bank has made 100% provision for the remaining amount," the bank said. It also continued holding a COVID-19 related buffer of INR 2.50 billion as on Mar. 31 to meet any future contingencies.
The provision coverage ratio of the bank at the end of the March quarter stood at 71.02%.
In terms of asset quality, bank showed a steady improvement, with gross non-performing asset ratio falling to 1.25% as of Mar. 31 from 1.32% in the previous quarter and 1.44% a year ago. Net NPA ratio improved to 0.36% from 0.41% a quarter earlier and 0.85% in the year-ago period. The bank's capital adequacy ratio under Basel III was at a strong 32.71% as on Mar. 31.
The bank's total income for the Jan-Mar quarter rose 8.8% on year to INR 15.42 billion. On a sequential basis, total income rose 1.5%. For the financial year 2024-25, total income grew to INR 61.42 billion from INR 54.93 billion in the previous year. Net profit for 2024-25 was INR 11.83 billion, up 10.32% from FY24.
The bank saw healthy growth in both advances and deposits. Total advances rose 10.7% on year to INR 439.84 billion as of Mar 31. Deposits grew to INR 536.89 billion from INR 495.15 billion a year earlier, showing steady traction in core operations.
Tamilnad Mercantile Bank's board also proposed a final dividend of INR 11 per equity share for FY25. The results were released after market hours. On Wednesday, shares of the bank closed 1.7% lower at INR 440.90 on the National Stock Exchange. End
Edited by Ashish Shirke
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