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Tamilnad Mercantile Bank, an old private sector bank, has announced a decent performance for the September 2022 quarter, the first quarter post its IPO.
The Thoothukudi (Tamil Nadu)-headquartered bank has reported a 37.5 per cent increase in its net profit at ₹262.30 crore for Q2 as compared to ₹190.76 crore in the year-ago quarter.
Operating profit grew 21 per cent at ₹389.23 crore as against ₹320.89 crore on the back of a 16 per cent rise in net interest income (NII), which was higher at ₹508.55 crore for Q2 FY23 as against ₹439.34 crore in Q2 FY22.
While interest income grew to ₹996.69 crore from ₹950.30 crore in the year-ago quarter, other income fell to ₹144.80 crore from ₹150.90 crore.
Return on average assets grew to 1.93 per cent in Q2 FY23 from 1.63 per cent as of September 2021, while return on equity increased to 16.84 per cent from 16.53 per cent. Total slippages were lower at ₹85.39 crore as compared to ₹130.75 crore in Q1 FY23 and ₹97 crore in the year-ago quarter.
Advances stood at ₹34,876.53 crore in Q2 FY23 as compared to ₹31,597.66 crore in Q2 of the previous fiscal, while total deposits grew to ₹43,136.65 crore from ₹41022.21 crore.
“We have a strong business in the RAM (retail, agriculture, and MSME) sector and will continue to record strong growth. RAM accounts for 87 per cent of our loan book. While we have a host of schemes for MSMEs, we will also introduce geography-specific products to support MSMEs (MSMEs make up 36 per cent of gross advances),” said S Krishnan, Managing Director and CEO of Tamilnad Mercantile Bank.
For the half year ended September 30, 2022, the bank’s net profit grew 27 per cent to ₹496.51 crore as compared to ₹.392.08 crore in the H1 of the previous fiscal. Operating profit grew 11 per cent at ₹763.63 crore as compared to ₹688.94 crore.
The net interest income rose by 18.04 per cent at ₹1032.57 crore as compared to ₹874.75 crore.
The total business of the bank stood at ₹78,013.18 crore with a growth rate of 7.43%. The Bank’s deposit and advance portfolio stood at ₹43,136.65 crore and ₹34,876.53 crore, respectively as of September 2022 quarter.
The Gross NPA as a percentage of total advances stood at 1.70 per cent and the net NPA stood at 0.86 per cent (3.31 per cent and 1.79 per cent, respectively in H1 FY22) .
Provision Coverage Ratio of the Bank increased to 88.58 per cent (80.50 per cent).
The Bank mobilised capital of ₹831.68 crore through IPO, which contributed to the increase in the capital. The restriction on branch opening was lifted by RBI effective October 21, 2022, based on the listing of shares of the Bank in BSE and NSE.
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