Tamilnad Mercantile Bank’s Q1 net rises 12%, asset quality improves

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Tamilnad Commercial Bank (TMB) It reported a 12 per cent increase in its net profit at ₹261 crore for the June quarter 2023 compared to ₹234 crore in the year-ago quarter, driven by higher interest income, other income and lower provisions.

The operating profit of the old private sector bank in Thoothukudi (Tamil Nadu) was marginally higher at ₹380 crore in the first quarter of FY24 as compared to ₹374 crore in the year-ago quarter.

Interest income grew to Rs.1,156 crore (Rs.1,002 crores), while non-interest income rose to Rs.167 crore (Rs.140 crores). Total spend was higher at ₹943 crore (₹767 crore). Provisions and contingencies were lower at ₹39 crore as against ₹55 crore.

Slips totaled at ₹101 crore while recalls and promotions were at ₹42 crore, S Krishnan, Managing Director and CEO, TMB.

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As of June 30, 2023, total NPA as a percentage of total advances was 1.56 percent, down from 1.69 percent in the year-ago quarter, but up from 1.39 percent in the March 2023 quarter. Net NPA was 0.66 percent, down from 0.93 percent in the year-ago period and 0.62 percent in the prior quarter. The Bank’s provisions coverage ratio increased to 90.49 percent (88.08 percent).

“Our goal is to keep total and net NPAs below 2 percent and 1 percent, respectively,” he said.

Advances totaled ₹37,292 crores compared to ₹33,823 crores, while total deposits grew to ₹47,008 crores from ₹43,233 crores. At Rs. 33,574 crore, RAM (Retail, Agriculture, MSME) segment accounted for 90 per cent of total advances in the first quarter of this financial year.

The return on assets reached 1.85 percent in the first quarter of fiscal year 24, compared to 1.83 percent a year earlier, while the return on equity decreased to 14.80 percent from 17.41 percent. TMB’s net worth increased to ₹7,190 crore from ₹5,427 crore.