TMB will grow by 10% in 2016-17, says new Chairman

The Bank will not look at high ticket advances in order to be careful and reduce NPA, says TMB Chairman S Annamalai

94-year Tamilnad Mercantile Bank (TMB) is one of the oldest private sector banks. It is also one of the most profitable banks in the country despite it having issues relates to Board occupancy. The Bank reported 6% growth at Rs 402.16 crore in 2015-16 from Rs 379.40 crore, a year ago.

In his first interview after taking over as Chairman of TMB in March, S Annamalai, managing director, Pioneer Jellice India, spoke to TE Narasimhan at the bank's headquarter in Thoothukudi, around 600 kms from Chennai, on the Board's vision and what is the way forward for the bank, including IPO.

What are the immediate priorities of the new Board?

We have a good team of directors and professionals who are looking at the interest of shareholders. We have started taking more careful decisions on advances to reduce NPA and we are aiming at much better profit for the current year. At the same time, we are following RBI regulations for sector-wise advances and others. The Bank will not look at high ticket advances in order to be careful and to reduce NPA. There have been issues in sectors such as infrastructure, aviation and others. We are taking little more care on the quality of advances.

What sort of growth you are looking at for the Bank?

We are looking at faster growth. For 2016-17, we are looking at around 10% growth in business.

Does the Bank need capital for the growth?

Capital adequacy as of now is not a big issue. Right now we don't require it.

Bank's IPO plan did not get nod from majority of the shareholders. Will it affect growth and why are the shareholders not allowing the Bank to go for an IPO?

As the Bank's MD and CEO (HS Upendra Kamath) said this will not affect the bank, as it is adequately capitalised for the present and can take care of future growth for the next two-three years.

We plan to educate the shareholders for the need for additional funds, for faster growth, plus also the benefit of shareholders. For example, if the value of the share goes up, exit routes will be freely available if IPO happens. Currently, it is not easy to sell shares. We are confident that in the next one or two years, shareholders will approve the IPO plan. Today, shareholders have misunderstood the IPO. We have to educate them. People think they will loose everything, but it adds value to shares. We have dematerialised shares that will help to transfer shares. Bonus shares also help.

What will be the focus areas for the Bank?

We would like to be more digital, retailer and customer friendly. We will also focus more on MSMEs.

Do you think having a community tag is a challenge for the Bank?

No. Especially, when it comes to performance there is no community in this. Today, the Bank's customers are everywhere. It is no more a community, only a Bank. Community got affinity to the Bank. We have and expect more diversified customers.