Tamilnadu Mercantile Bank achieves strong financial growth in FY2024, plans expansion

Tamilnadu Mercantile Bank Ltd (TMB), a stalwart in India‘s banking sector with a history spanning over a century, has reported a significant financial performance for the fiscal year ended March 31, 2024. The bank, headquartered in Thoothukudi, Tamil Nadu, celebrated notable year-on-year growth, with its total business reaching ₹89,485 crore, up from ₹85,348 crore.

Financial Highlights and Strategic Growth

– Total Business Growth: TMB’s total business saw an increase of nearly 5% year-over-year.

– Net Profit: The bank’s net profit rose to ₹1,072 crore, marking a 4.18% increase from the previous year’s ₹1,029 crore.

– Interest Income and Total Income: Interest income surged to ₹4,848 crore from ₹4,081 crore, and total income grew to ₹5,493 crore from ₹4,710 crore.

– Stable Asset Quality: TMB’s gross non-performing asset (NPA) ratio improved to 1.44%, while net NPA stood at 0.85%.

Operational Efficiency and Capital Adequacy

– CASA Growth: The current and savings account (CASA) holdings increased to ₹14,676 crore, a rise of ₹940 crore year-over-year.

– Capital Adequacy: The bank’s Capital to Risk (Weighted) Assets Ratio (CRAR) stood robust at 29.37%, significantly above regulatory requirements, showcasing strong financial health and stability.

– Reduction in Stressed Assets: Tamilnadu Mercantile Bank effectively reduced its stressed assets ratio, further solidifying its balance sheet.

Quarterly Performance Insights

For Q4 FY2024:

– Quarterly CASA Growth: CASA grew by 5.85% compared to the previous quarter.

– Deposits and Advances: Total deposits and advances saw a quarterly increase of 5.80% and 4.13%, respectively.

– Net Interest Income (NII): NII for Q4 increased by 5.59% over the previous quarter.

Dividends and Shareholder Value

The Board of Directors has recommended a final dividend of ₹10 per share for FY2024, subject to shareholder approval at the upcoming Annual General Meeting (AGM). This decision underscores TMB’s commitment to delivering shareholder value.

Future Outlook and Expansion Plans of Tamilnadu Mercantile Bank

Looking ahead, Tamilnadu Mercantile Bank is poised for further growth with plans to open 50 new branches in FY2025. Additionally, the bank has launched several new initiatives aimed at capturing the burgeoning MSME market. These include the establishment of MSME Loan Processing Hubs in major cities and the enhancement of Business Correspondent Services to deepen financial inclusion.

Management’s Vision

S.Krishnan, Managing Director and CEO of Tamilnadu Mercantile Bank, expressed optimism about the bank’s trajectory, stating, “Our robust performance this fiscal year is a testament to our strategic initiatives and operational excellence. We remain committed to expanding our footprint and enhancing our services to meet the evolving needs of our customers.”

TMB’s impressive financial results for FY2024 reflect its strong operational capabilities and strategic foresight in navigating a dynamic banking environment. With continuous improvement and innovation at its core, Tamilnadu Mercantile Bank is well-positioned to maintain its growth momentum and expand its influence in India’s banking sector.