Tamilnad Mercantile Bank (TMB) has reported a strong performance in the second quarter, with total business growth of 11.40% and deposit growth of 12.32%, signaling a revival in the bank's growth trajectory. The bank's Managing Director and CEO, Salee S Nair, highlighted these achievements during the Q2 earnings conference call.

Key Highlights

• Total business growth: 11.40%
• Deposit growth: 12.32%
• CASA growth: 9.30% year-on-year
• Net profit: INR 318.00 crores (4.73% YoY growth)
• Gross NPA: 1.01%
• Net NPA: 0.26%
• Return on Assets (ROA): 1.85%
• Return on Equity (ROE): 13.77%

Expansion and Digital Initiatives

TMB opened its 600th branch during the quarter, adding 22 branches in the first six months of the fiscal year. The bank plans to open another 30-36 branches in the current year, focusing on expanding its footprint to accelerate growth.

The bank is investing heavily in IT modernization, with a budget of INR 250.00 crores for the current year. This includes implementing a new loan management system, revamping Internet and mobile banking platforms, and exploring artificial intelligence applications to enhance productivity.

Financial Performance

TMB's net profit stood at INR 318.00 crores, showing a quarter-on-quarter growth of 4.14% and a year-on-year growth of 4.73%. The bank maintained its asset quality with a gross NPA of 1.01% and a net NPA of 0.26%. The provision coverage ratio improved to 74.36%, up by 132 basis points.

Deposit and Advances

The bank reported a significant improvement in its CASA (Current Account Savings Account) share, which increased by 92 basis points. The CASA growth stood at 9.30% year-on-year.

On the advances front, TMB is seeing growth in the MSME sector, with a quarter-on-quarter growth of 3.84%. The RAM (Retail, Agriculture, MSME) portfolio now constitutes 94.59% of the total advances.

Future Outlook

TMB has provided guidance for 14-15% credit growth and 12-13% deposit growth. The bank expects significant growth momentum, projecting a profit growth of around 20%.

Mr. Nair expressed confidence in maintaining the current ROA levels of around 1.85% going forward. He also mentioned that the bank aims to keep the cost-to-income ratio under 45% in the coming quarters.

Conclusion

Tamilnad Mercantile Bank's Q2 results demonstrate a clear revival in growth, with improvements across key financial metrics. The bank's focus on expanding its branch network, investing in digital infrastructure, and growing its MSME portfolio positions it well for sustained growth in the coming years.

As the bank continues to modernize its operations and expand its presence beyond Tamil Nadu, it aims to outperform market growth rates and solidify its position in the Indian banking sector.

Tamilnad Mercantile Bank (TMB) has announced a significant development in its leadership structure, with shareholders overwhelmingly approving the appointment of K. Ramachandran as Independent Director and Non-Executive Part-Time Chairman through a postal ballot voting process.

Voting Results

The resolution for Ramachandran's appointment passed with an impressive 99.84% of votes in favor. Here's a breakdown of the voting results:

Appointment Details

• Position: Independent Director and Non-Executive Part-Time Chairman
• Remuneration: Rs. 18.00 lakh per annum, payable monthly at Rs. 1.50 lakh
• Voting Period: October 1-30 (Remote e-voting)
• Results Declaration: October 30

Voting Rights Restriction

It's noteworthy that some shareholders' voting rights were restricted to 4.99% based on Reserve Bank of India (RBI) orders related to acting in concert provisions under banking regulations. This restriction affected four entities:

1. CUNA Group Mauritius Ltd
2. FII Investments Mauritius Limited
3. Kamehameha Mauritius Ltd
4. Swiss Re Investors Mauritius Limited

Management Changes

In addition to Ramachandran's appointment, TMB also announced changes in its senior management:

1. New Appointment: Sathishkumar N. joins as Vice President of Information Technology, effective October 31. He brings 22 years of banking experience in IT and core banking systems.

2. Retirement: Natarajan J., Vice President of the Business Intelligent Unit, will retire from the bank's service at the close of business hours on October 31.

These developments signify TMB's focus on strengthening its leadership and technological capabilities as it moves forward in the competitive banking landscape.

Conclusion

The strong shareholder support for K. Ramachandran's appointment as Part-Time Chairman reflects confidence in TMB's governance choices. As the bank navigates the evolving financial sector, these leadership changes may play a crucial role in shaping its future strategies and operations.