Tamilnad Bk sees no big hit to loan book from W Asia crisis on low exposure
This story was originally published at 19:53 IST on 27 April 2026
Register to read our real-time news.Informist, Monday, Apr. 27, 2026
Please click here to read all liners published on this story
--Tamilnad Mercantile Bank: Arrested CASA ratio decline, recovered in FY26
--CONTEXT: Remarks from Tamilnad Mercantile Bank mgmt in press conference
--Tamilnad Mercantile Bk: Q4 loan, deposit growth highest in nearly 10 years
--Tamilnad Mercantile Bank: Annualised RoE crossed 15% in Q4 for first time
--Tamilnad Mercantile Bk: INR 509.5 mln export credit focussed on West Asia
--Tamilnad Mercantile Bk: Don't see big impact of W Asia crisis on loan book
--Tamilnad Mercantile Bk: Aiming for FY27 deposit growth of 16%
--Tamilnad Mercantile Bk: Aiming for FY27 loan growth of around 20%
--Tamilnad Mercantile Bk: Gold loans, revival in MSME credit aided growth Q4
--Tamilnad Mercantile Bk:To complete some major digital projects in 2-3 qtrs
--Tamilnad Mercantile Bk: Confident govt will come out for package for MSMEs
--Tamilnad Mercantile Bk:COVID provisions to help sail through W Asia crisis
--Tamilnad Mercantile Bank: Investing a lot in cybersecurity space
--Tamilnad Mercantile Bk: See momentum in corp loans starting FY28
--Tamilnad Mercantile Bk:Corp book 5.33% of overall loans, aim to grow share
--Tamilnad Mercantile Bk: See corp loans at 10% of overall book eventually
--Tamilnad Mercantile Bank: Don't see fall in deposit rates FY27, may rise
--Tamilnad Mercantile Bank: Don't see further repo rate cuts by MPC
--Tamilnad Mercantile Bank: See cost of deposits moving up by 5-7 bps FY27
--Tamilnad Mercantile Bank: Aim for NIM at more than 3.90% FY27
--Tamilnad Mercantile Bank: Offset some treasury losses Q4 against capital
--Tamilnad Mercantile Bank: Aim to profitably deploy capital as buffers high
--Tamilnad Mercantile Bank: Net loan-to-value of gold loan portfolio 53.25%
--Tamilnad Mercantile Bank: Portfolio can withstand 25% fall in gold prices
--Tamilnad Mercantile Bank:99.9% of loan book secured; see similar ratio FY27
MUMBAI – Tamilnad Mercantile Bank Ltd. is unlikely to see any big impact on the bank's loan book from the ongoing crisis in West Asia, Managing Director and Chief Executive Officer Salee S. Nair said Monday. "Our West Asia focus in terms of export credit that is exposed to the West Asian market is about 51 crores (INR 510 million). And that is an insignificant amount," Nair said in a post-earnings press conference on Monday.
The bank's total export credit was around INR 6.69 billion in the March quarter, while its export credit focused on West Asia is just 7% of the total, or INR 509.5 million, the managing director said. "The West Asia crisis, I personally believe, is a management crisis. It is unlike the COVID (COVID-19), which did extensive damage to the economy," Nair said.
At the moment, the bank's focus is on risk to the micro, small and medium enterprises segment from the West Asia crisis. The bank is waiting for the government to take steps to support the MSME sector, Nair said. The bank's advances to the sector was INR 135.20 billion, up 15% on year, in the March quarter.
The managing director said he was confident the government will come out with a relief package for MSMEs amid the ongoing crisis in West Asia. "We kept aside 250 crores (INR 2.5 billion) in the COVID period to tackle the stress in the restructured account at that point of time. Outstanding under the COVID book has come down substantially to 218 crores (INR 2.18 billion), we have not reversed it," Nair said. In case of contingencies due to the crisis in West Asia, the bank will use these provisions, he added.
With growing concerns about cyberfraud, Nair said the bank has been investing "a lot" in cybersecurity. He said the bank aims to complete some major digital projects in the next two to three quarters. The bank has launched phase one of the digital banking platform and is now getting onto the collecting platform. "Hopefully, in FY27, maybe by third quarter (Oct-Dec), we should be able to complete much of this. I think this is something that is engaging our attention and will continue for the next two-three quarters," Nair said.
Commenting on the bank's corporate advances, Nair said corporate loans are picking up this financial year. "We have been looking at higher and higher ticket size in terms of MSMEs. Once we are confident, we will start moving into the corporate space also," Nair said. "We will have to look at how FY27 pans out. But certainly from FY28 onwards, you will see momentum picking up in the corporate loan book."
The bank's corporate book as of Mar. 31 was 5.33% of overall loans of INR 533.79 billion and the bank aims to grow the corporate loans' share to 10% of its overall loan book eventually. With 99.9% of the loan book secured, Nair expects the bank's loan book to remain secured in 2026-27 (Apr-Mar).
Nair said the bank doesn't see deposit rates falling in the current financial year, nor does he expect the Reserve Bank of India's Monetary Policy Committee to cut key interest rates this year. He expects the cost of deposits to rise 5–7 basis points in FY27. Further, the bank aims for its net interest margin to be more than 3.90% in FY27.
The bank arrested the decline in the current account savings account ratio, which recovered in FY26. The current account saving account deposits were up 22.35% on year at INR 141.93 billion in the March quarter. Loan and deposit growth in the March quarter was the highest in 10 years. It now aims for 16% and 20% on-year deposit and loan growth, respectively, in FY27. Its annualised return on equities crossed 15% on year in the March quarter for the first time. Some treasury losses in the March quarter will be offset against capital, Nair said, adding that the bank aims to profitably deploy capital supported by high buffers.
In the March quarter, gold loans and a revival in credit offtake by MSMEs supported the bank's growth. The net loan-to-value ratio of the gold loan portfolio was 53.25% in the March quarter. Amid high volatility in gold prices, Nair said the portfolio can withstand a 25% fall in gold prices.
Monday, shares of the bank ended nearly 9% higher at INR 697.30 on the National Stock Exchange. End
Reported by J. Navya Sruthi and Aaryan Khanna
Edited by Tanima Banerjee
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2026. All rights reserved.
To read more please subscribe
Share this Story:
