Tamilnad Mercantile Bank has released its investor presentation for FY26, reporting strong business growth, record profitability, and a decade-best improvement in asset quality. Total advances stood at ₹53,379 Cr, marking a 20.32% increase year-on-year — the highest advances growth in the past 40 quarters — while deposits grew 14.94% to ₹61,712 Cr, the highest deposit growth in the past 39 quarters. The bank's total business crossed ₹1,15,091 Cr, reflecting 17.37% YoY growth. Notably, advances grew 22.57% inclusive of ₹1,000 Cr IBPC sold, with deposit growth above the industry average. The bank attributed this performance to strategic transformation under new leadership, led by MD & CEO Mr. Salee S. Nair (ex-SBI DMD) who joined in August 2024, alongside Executive Director Mr. Vincent M D and CFO Mr. Sanjoy Kumar Goel.

Financial Performance

The bank delivered a Net Interest Income (NII) of ₹2,527 Cr for FY26, reflecting 9.84% YoY growth, while Profit After Tax (PAT) reached ₹1,338 Cr, up 13.10% YoY. The highest-ever quarterly PAT of ₹373.65 Cr was recorded in Q4 FY26, representing 28.01% YoY growth. The board has recommended a dividend of 125% for FY26, subject to shareholder approval. Market capitalisation crossed ₹11,600 Cr, and the book value stood at ₹638. The NII and PAT progression over recent fiscal years is captured below:

Asset Quality and Return Metrics

The bank achieved a significant improvement in asset quality, with the GNPA ratio declining to 0.73% — a 10-year low and a reduction of 52 basis points from FY25. The NNPA ratio stood at 0.18%, down 18 basis points year-on-year. The Provision Coverage Ratio (PCR) improved to 96.14%, up 228 basis points from FY25, with on-book PCR at 74.89% (up 3.87% YoY). Credit cost fell sharply to 0.03%, down 38 basis points, while slippages declined to 0.19% (down 26 bps) and the SMA ratio dropped to 1.29% (down 126 bps). The Return on Assets (ROA) improved to 1.93% for FY26, with Q4 FY26 ROA reaching 2.05%, while Return on Equity (ROE) stood at 13.99%. Average collateral available for NPA stood at 127.52%.

Quarterly Performance Trend

The bank demonstrated consistent sequential improvement across key metrics from Q1 FY25 to Q4 FY26. NIM recovered from 3.91% in Q4 FY25 to 4.18% in Q4 FY26, up 27 basis points year-on-year. The quarterly evolution, including CD ratio and branch count, is summarised below:

Portfolio Composition and Operational Highlights

The bank's loan book is predominantly secured, with 99.90% of the book backed by collateral and greater than 100% collateral coverage on NPAs. The RAM (Retail, Agriculture, MSME) portfolio constitutes approximately 95% of advances. The Gold Loan portfolio stood at ₹24,790 Cr as of March 31, 2026, representing 46.44% of total advances, with an average LTV of approximately 53%, GNPA of less than 0.01%, and SMA on the jewel book below 0.05%. The gold portfolio carries a gross weight of 37.38 tonnes and net weight of 34.19 tonnes, with a CAGR of 26.04% from FY17 to FY26. The MSME segment accounted for ₹15,532 Cr (29.10% of advances), Agriculture at ₹20,084 Cr (37.63%), and Retail at ₹14,912 Cr (27.94%). The Cost-to-Income Ratio was 45.50% for FY26, with a normalised ratio of 44.04% after absorbing the full Performance-Based Incentive (PBI) of ₹49.80 Cr. Staff costs stood at ₹795 Cr for FY26 versus ₹726 Cr in FY25, up 9.38% YoY. Digital transactions constituted approximately 97% of total transactions, up 116 basis points YoY, with over 170 digital services offered. The bank expanded its network to 622 branches, having opened 44 new branches in FY26, with 15 located outside Tamil Nadu, and has proposed 60 new branches for FY27. New branches since listing contributed 15% to incremental business.

The bank operates 12 regional Credit Management Centers (CMCs) on a hub-and-spoke model, fully operational from Q1 FY26, with each CMC covering approximately 50 branches. Post-CMC rollout, stressed assets declined from 2.01% in FY25 to 1.14% in FY26. The bank's IT infrastructure is built on Oracle Fusion Cloud (ERP, HCM, CX) with dual-city architecture across Chennai and Thoothukudi, and is ISO/IEC 27001:2013, SOC, and SWIFT CSCF compliant.

Talent and Strategic Transformation

As part of its strategic transformation, the bank onboarded 20 high-performing Branch Heads to accelerate regional growth. It deployed 85 trained Senior Customer Service Executives (SCSEs) outside Tamil Nadu, with 115 more in the hiring pipeline. Campus recruitment yielded 172 Assistant Managers and 403 CSEs from premier institutions. Additionally, 48 specialised technology professionals were hired from global tech majors, including Silicon Valley firms, and 200 experienced Business Development Executives were engaged to accelerate CASA and Term Deposit mobilisation. The strategic transformation has shifted the bank from fragmented to calibrated strategy, with business growth improving from 7.97% YoY to 17.37% YoY, and GNPA declining from 1.37% to 0.73%.

Guidance vs. Actuals and Peer Comparison

The bank exceeded its guidance across all key performance indicators for Q4 FY26, as shown below:

The bank's Q4 FY26 metrics compare favourably against regional and large private sector peers, as detailed below:

TMB advances growth excludes IBPC sale of ₹1,000 Cr; P/E ratio as of May 4, 2026

Regulatory Matters, Valuation, and Key Risks

The bank's current Price-to-Book ratio stands at approximately 1.15x (as of May 4, 2026) versus a peer average of 1.5x, with identified rerating triggers including CASA recovery, MSME acceleration, credit cost control, and digital transformation. The bank's capital adequacy remains strong with CRAR at 33.73% and LCR at approximately 139%. On the regulatory front, a government agency (ED) has served two show cause notices relating to share transfers in 2007 and bonus shares issued subsequently, with the proposed fine on the second notice exceeding ₹1,037 Cr. The bank's legal counsel has confirmed that, since no money changed hands in the bonus share issuance, the maximum fine permissible under law is only ₹2 lakh. The first notice has been adjudicated and is at the appeal stage before the Appellate Tribunal for Foreign Exchange, while the second notice is being challenged in the Madras High Court, where the government has agreed not to take further steps until the court rules. The bank has stated that these matters affect only the ownership structure and have no impact on day-to-day banking operations. On the ECL/LCR front, ECL implementation requires ₹279 Cr of additional provisions, largely covered by the existing Covid provision of ₹250 Cr, while revised LCR guidelines are expected to maintain LCR at 143% at current levels. Approximately 38% of the bank's shares remain in a dispute since the mid-1990s and cannot be traded, with dividends on hold. The bank has been listed on the stock exchange since 2022 and continues to operate normally, with loans, deposits, branches, and profits completely unaffected.

As MD & CEO Salee S. Nair stated: "At Tamilnad Mercantile Bank, we do not manage quarters. We steward a 104-year institution."

Tamilnad Mercantile Bank Limited has issued an official intimation regarding its analysts and investors meeting scheduled for May 07, 2026. The bank has provided comprehensive details for the interaction with specific institutional participants, maintaining full compliance with regulatory requirements under SEBI regulations.

Meeting Specifications

The bank has announced a structured investor meeting with designated institutional participants. The interaction will be conducted in an in-person format, facilitating direct engagement between bank representatives and the investment community.

Regulatory Compliance Framework

The intimation has been submitted pursuant to Regulation 30(6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The bank has formally notified both the National Stock Exchange of India Ltd and BSE Limited about the meeting arrangements through reference number TMB.SE.18/2026-27 dated May 04, 2026.

The bank has explicitly stated that no Unpublished Price Sensitive Information (UPSI) or material information will be shared during the meeting, ensuring strict compliance with insider trading regulations and maintaining transparency standards required under current securities law.

Administrative Framework

The communication maintains operational flexibility regarding scheduling, noting that the date and time remain subject to change due to unforeseen exigency on the part of the bank or host. The official notification was digitally signed by Swapnil Yelgaonkar, Company Secretary & Compliance Officer, on May 04, 2026, at 17:13:33 +05'30'.

The bank's secretarial section has coordinated the regulatory filing with appropriate contact details including phone number 0461-2325136 and email secretarial@tmbank.in for further correspondence regarding the scheduled interaction.