Tamilnad Mercantile Bank Reports Strong Q2 Performance with 4.7% Profit Growth

Tamilnad Mercantile Bank (TMB) has reported a robust financial performance for the second quarter, with net profit rising 4.7% year-on-year to ₹318 crore. The bank's CEO, Salee S Nair, announced the results, highlighting significant improvements across key financial metrics.

Financial Highlights

TMB's financial results for Q2 showcase strong growth and improved asset quality:

Metric	Q2	Previous Q2	YoY Change
Net Profit	₹318.00 crore	₹303.00 crore	+4.7%
Total Business	₹102,351.00 crore	₹91,875.00 crore	+11.4%
Deposits	₹55,421.00 crore	₹49,342.00 crore	+12.32%
Gross Advances	₹46,930.00 crore	₹42,533.00 crore	+10.34%
Gross NPA	1.01%	1.37%	-36 bps
Net NPA	0.26%	0.46%	-20 bps

Asset Quality Improvement

The bank has achieved its lowest Gross Non-Performing Assets (GNPA) ratio in the last decade at 1.01%, down from 1.37% in the same quarter last year. The Net NPA ratio also improved to 0.26% from 0.46%, indicating strengthened asset quality.

Business Growth

TMB's total business grew by 11.40%, marking the highest year-on-year growth since its listing. The bank's deposits increased by 12.32% to ₹55,421.00 crore, while advances rose by 10.34% to ₹46,930.00 crore.

Strategic Initiatives

CEO Salee S Nair emphasized the bank's commitment to expanding its reach and enhancing customer experience. Key initiatives include:

Opening 9 new branches in the quarter, including the 600th branch in Vizhinjam, Kerala.
Implementing new technologies such as Oracle Fusion CX Platform for Customer Relationship Management.
Introducing UPI facility on RuPay Credit Cards.
Establishing a new state-of-the-art call center with AI calling capabilities.

Outlook on Foreign Investment

Regarding potential foreign investment, CEO Nair stated that while there is currently no foreign investor interest in TMB, future possibilities cannot be ruled out. This comment follows Emirates NBD's recent acquisition of a controlling stake in RBL Bank, indicating a dynamic landscape in the Indian banking sector.

Future Plans

TMB aims to maintain its GNPA near 1% while expanding to 700 branches. The bank's focus on responsible lending and cautious risk management practices is expected to drive sustainable and profitable growth.

The bank's strong performance, coupled with its strategic initiatives and expansion plans, positions Tamilnad Mercantile Bank for continued growth in the competitive banking sector.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+1.96%	+2.36%	+10.22%	+4.74%	+8.02%	-8.52%

Tamilnad Mercantile Bank (TMB), a prominent player in the Indian banking sector, has unveiled ambitious growth projections for fiscal year 2027 while reporting robust financial results for the second quarter of fiscal year 2026.

Growth Projections for FY27

TMB has set its sights on achieving a total business of ₹1.40 lakh crore by FY27, coupled with a 2.00% return on assets (ROA). The bank plans to expand its branch network to over 700 branches, signaling a strong focus on physical presence and customer accessibility.

In terms of asset quality, TMB aims to maintain its gross non-performing assets (GNPA) near 1%, reflecting the bank's commitment to prudent risk management. Additionally, the bank expects to boost its current account savings account (CASA) ratio above 30%, which could potentially lead to lower cost of funds and improved profitability.

Q2 FY26 Financial Performance

TMB's recently released financial results for Q2 FY26 demonstrate the bank's solid performance and progress towards its long-term goals:

Key Metrics	Q2 FY26	Q2 FY25	YoY Change
Net Profit	₹317.51 crore	₹303.18 crore	4.73%
Total Income	₹1,621.46 crore	₹1,564.88 crore	3.62%
Net Interest Income	₹597.13 crore	₹596.06 crore	0.18%
GNPA Ratio	1.01%	1.37%	-36 bps
NNPA Ratio	0.26%	0.46%	-20 bps
Capital Adequacy Ratio	30.96%	29.59%	137 bps

The bank reported a net profit of ₹317.51 crore for Q2 FY26, marking a 4.73% increase from the same quarter last year. Total income rose by 3.62% year-on-year to ₹1,621.46 crore, while net interest income remained relatively stable at ₹597.13 crore.

TMB's asset quality showed significant improvement, with the GNPA ratio decreasing from 1.37% in Q2 FY25 to 1.01% in Q2 FY26. The net NPA ratio also improved, dropping from 0.46% to 0.26% over the same period.

The bank's capital position remains strong, with the Capital Adequacy Ratio under Basel III norms standing at 30.96%, well above regulatory requirements and up from 29.59% in the previous year.

Operational Highlights

TMB's operational metrics also showed positive trends:

Total business grew by 11.40% year-on-year to ₹1,02,351 crore.
Deposits increased by 12.32% to ₹55,421 crore.
Gross advances rose by 10.34% to ₹46,930 crore.
The CASA ratio improved to 27.36%, up from 27.12% in the previous quarter.

Digital Initiatives

The bank continues to focus on digital transformation, with several key initiatives underway:

Implementation of a new Internet Banking Application and Digital Engagement Hub.
Enhancements to Mobile Banking and UPI services.
Introduction of a new state-of-the-art AI-powered call center facility.
Collaboration with fintech partners to expand digital offerings.

These initiatives align with TMB's strategy to balance its traditional branch-based services with modern digital banking solutions.

As Tamilnad Mercantile Bank progresses towards its FY27 targets, the bank's focus on expanding its branch network, improving asset quality, and enhancing digital capabilities positions it well for future growth in the competitive Indian banking landscape.