TMB eyes home advantage in Thoothukudi's investment wave; to tap MSMEs

Tamilnad Mercantile Bank (TMB) aims to capitalise on the investment surge in Thoothukudi, focusing on salary accounts and MSME lending to boost business growth amid a ₹1 trillion investment boom

Tamilnad Mercantile Bank (TMB) has said that as a local bank, it is betting big on tapping more salary accounts and the micro, small, and medium enterprise (MSME) segment lending opportunities, as Thoothukudi is witnessing a boom in investments, driven by global majors like Vietnam's electric vehicle (EV) major VinFast and Singapore's Sembcorp.

 

TMB, based in Tamil Nadu’s Thoothukudi, has maintained its business growth outlook of 14 per cent for the current financial year (FY26) due to its growth initiatives, including technology upgrades, in the last one year. The bank said that its focus area will be the Retail, Agriculture, and MSME (RAM) segment, as it accounts for 93 per cent of its total advances.

 

Including VinFast and Sembcorp’s, Thoothukudi is expected to witness investments to the tune of ₹1 trillion in the next few years. The bank's idea is to get salary business, in addition to developing a strong footprint in the supplier ecosystem of large players, which include mainly MSMEs.

 

"Action in Thoothukudi is something that we will certainly try and leverage to our benefit as the hometown bank in Thoothukudi. Not just salary accounts. We are also looking to get our footprint back into the MSME area. That is where I see a lot of potential for CASA (Current Account Savings Account)," said Salee S Nair, managing director and chief executive officer (MD&CEO) of TMB. He added that the bank has increased its engagement with Thoothukudi port, and also got enrolled in the National Logistics Portal recently.

 

Nair said that during the second half of the financial year (H2FY26), the bank will start reaping benefits from initiatives like establishing MSME hubs, expanding its branch network, and improving technology, among others. After Nair took charge in August 2024, the bank has engaged global consultancy firm McKinsey to develop its MSME strategy, mainly to bring in innovative solutions and improved lending capabilities. Its transformation initiatives also include revamping of Customer Relationship Management (CRM) systems, upgrading internet banking, and putting more focus on the gold loan portfolio. 

 

“We expect H2FY26 to show the impact of all our initiatives. We may see over 10 per cent growth in deposits and 15 per cent growth in advances,” he said. The bank posted its highest-ever quarterly net profit of ₹304.9 crore during the first quarter of 2025-26 (Q1FY26), up 6 per cent from ₹287.3 crore in Q1FY25.

 

"We will look at corporates seriously after we put in place a system, both in case of skillset and technology improvement," he added. At present, the corporate segment contributes to be around 7 per cent of its advances.

 

The bank's gross non-performing assets (GNPA) improved by 22 basis points (bps) to 1.22 per cent from 1.44 per cent. Its net NPA also decreased to 0.33 per cent from 0.65 per cent, improving by 32 bps, during Q1FY26.

 

TMB's deposits have increased to ₹53,803 crore during the period, from ₹49,188 crore last year. The advance level also increased to ₹45,120 crore, with a growth rate of 10.44 per cent year-on-year (Y-o-Y).

 

The bank said that an increase of 4.5 per cent in CASA during the quarter is a positive sign. Nair said that the bank is making a lot of effort to improve its CASA. These included appointing relationship managers to attract more current accounts, and setting up an elite services group in Q1FY26 to ensure personalised end-to-end service in select branches for high-value customers, Nair added.