Tamilnad Mercantile Bank Limited has announced its audited financial results for the quarter and financial year ended March 31, 2026, demonstrating strong performance across key metrics. The bank's net profit for Q4FY26 stood at INR373.65 crores, representing a year-on-year growth of 28.01%. The Board has recommended a dividend of 125% for FY26.

Financial Performance Highlights

The bank delivered robust growth in core business parameters, exceeding its earlier guidance. Total business grew 17.37% to INR1,15,091 crores as of March 31, 2026. Net interest income increased 24.04% to INR704.45 crores, while operating profit for the quarter grew 29.29% year-on-year.

Business Growth and Portfolio Quality

CASA reached INR17,365 crores with the CASA share improving to 28.14% from 26.44% in March 2025. The bank recorded its highest deposit growth in the past 39 quarters and highest advance growth in the past 40 quarters. Advances grew 20.32%, which would have been 22.57% if INR1,000 crores sold through Inter-Bank Participation Certificates were included.

The gold loan portfolio, comprising 46.44% of total advances, showed strong performance with a portfolio LTV of 53.25% and yield of 10.11%. The retail advances portfolio delivered an ROA of 2.21% with NPA at 0.13%. MSME advances turned around to achieve 14.88% year-on-year growth with an ROA of 2.58%.

Asset Quality Metrics

The bank maintained exceptional asset quality with GNPA at 0.73% and net NPA at 0.18%. The stressed assets ratio stood at just 1.14%. Provision coverage ratio on book reached 74.89%, while PCR with technical write-off stood at 96.14%. SMA-0, SMA-1, and SMA-2 combined stood at 1.29%, down 1.26% from the previous year.

Capital and Operational Metrics

Net worth crossed INR10,000 crores for the first time, with book value per share at INR638 and earnings per share at INR23.60. Capital adequacy stood strong at 33.73%. The cost-to-income ratio was contained at 44.80% for the year, though it would have been 39.54% for Q4 excluding the performance-based incentive of INR49.80 crores accounted for in Q4FY26.

Net interest margin for Q4 stood at 4.18%, up sequentially from 4.04%, while the full-year NIM was 3.98%. The bank opened 44 branches during FY26, with 15 outside Tamil Nadu, and plans to open 60 branches in FY27.

Management Guidance and Outlook

During the earnings conference call held on April 27, 2026, Managing Director Salee S. Nair outlined the bank's transformation journey and future targets. For FY27, management has guided for deposit growth of at least 16% and aims to defend the 20% advances growth achieved in FY26. The bank expects ROA to be in the 1.9-2% range and ROE at 14-15% for FY27.

Regulatory Compliance

The bank published its audited financial results in newspapers on April 28, 2026, in compliance with Regulation 47 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The earnings conference call transcript was made available on April 30, 2026, pursuant to Regulation 30 of SEBI regulations, providing detailed insights into the bank's performance and strategic initiatives.

Tamilnad Mercantile Bank has announced its growth guidance for FY27, setting ambitious targets for both its lending portfolio and deposit mobilization. The regional banking institution has outlined clear expansion objectives as it looks to strengthen its market position.

FY27 Growth Targets

The bank has established specific growth parameters for the upcoming fiscal year, focusing on key business metrics that will drive its expansion strategy.

Strategic Focus Areas

The announced targets indicate the bank's commitment to balanced growth across its core banking operations. The 20% loan growth target suggests an aggressive lending strategy, while the 16% deposit growth target reflects the institution's focus on strengthening its funding base.

These growth projections position Tamilnad Mercantile Bank for significant business expansion during FY27. The targets demonstrate the bank's confidence in market opportunities and its ability to capitalize on growth prospects in its operational regions.

Business Expansion Outlook

The guidance provided by the bank establishes clear benchmarks for measuring performance during FY27. The targeted growth rates in both loans and deposits indicate a comprehensive approach to business development, balancing asset growth with liability management.

The announced targets reflect the bank's strategic planning for sustainable growth while maintaining operational efficiency across its banking services.