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Informist, Friday, Jul. 25, 2025

By Rati Chaphekar

MUMBAI - Tamilnad Mercantile Bank reported an on-year as well as sequential increase in its net profit for the June quarter despite expenses growing faster than income, primarily due to a sharp rise in its treasury income and a sharp fall in its provisions. The 6% sequential growth in expenses eclipsed the 5% sequential growth in income but a sequential 52% fall in provisions helped the bank post a higher profit.

The bank reported a net profit of INR 3.05 billion for the June quarter, up 4.5% on quarter and 6.1% higher on year. The bank reported a total income of INR 16.17 billion, up 6.8% on year and 4.9% higher on quarter.

The bank's interest income was INR 13.86 billion for the latest quarter, up only 3.3% sequentially and up 8% on year. Interest on balances with the Reserve Bank of India rose to INR 173.8 million, up 154% on year from 68.3 million. The bank's treasury income for the latest quarter was INR 3.55 billion, up 22% sequentially.

On the expenses side, interest expense grew to INR 8.07 billion, up 4% on quarter and 13% on year. The rise in expenses was driven primarily by a 25% increase in employee cost, which rose to INR 2.23 billion. This was only partially offset by a 6% fall in other operating expenses, which fell to INR 1.76 billion. The bank's provisions and contingencies, for bad loans and investment provisions, fell to INR 83.4 million, down 52% sequentially and down 90% on year. This limited the rise in total expenses to 6% at INR 12.05 billion.

The bank's gross non-performing assets were INR 5.5 billion, down 6.6% on year, whereas the net non-performing assets were INR 1.5 billion, down 43.7% on year. The bank's gross non-performing assets were 1.22% of total assets, down from 1.44% a year ago while the net non-performing assets were 0.33% of total advances, down from 0.65% a year ago. The bank's net worth was INR 93.3 billion on Jun. 30, up 13% on year.  

The bank's provisional coverage ratio was 73.04%, up from 55.22% a year ago without technical write-offs and 94.32% with technical write-offs. The capital adequacy ratio under the Basel III norms was 31.55%, up 234 bps on year. 

The bank said its special mention accounts had fallen to 3.05% of total advances at the end of June from 4.98% a year ago, down 193 bps.

The bank's total deposits rose to INR 538 billion as at the end of June, up 9.38% on year. The total advances rose to INR 451 billion, up 10.4% on year. The bank's loans to the retail, agri and micro, small and medium enterprises segment rose to INR 421 billion, up 11.9% on year. This segment constituted just over 93% of total loan advances, up 124 bps on year. The bank opened seven new branches during the reporting quarter. 

The bank released its earnings for the quarter post market hours. Friday, shares of the lender closed 1.12% lower at INR 455.20 on the National Stock Exchange.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Deepshikha Bhardwaj

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