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Tamilnad Mercantile Bank Q1 results: Net profit up 12% to Rs 261 crore

The bank's total income during the period was up by 16 per cent, from Rs 1,142 crore in June 2022-23 to Rs 1,323 crore in the fourth quarter of FY24

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BS Reporter Chennai

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Tamilnad Mercantile Bank (TMB) on Monday posted a 12 per cent increase in net profit at Rs 261 crore for the first quarter of FY24, compared to Rs 234 crore in the same period in FY23, owing to improved business both on the liability and asset side.

The bank’s total income during the period was up by 16 per cent, from Rs 1,142 crore in June 2022-23 to Rs 1,323 crore in the fourth quarter of FY24. The lender's asset quality profile improved with gross non-performing assets (GNPAs) at 1.56 per cent in June 2023, compared with 1.69 per cent in the year-ago period. Net NPAs dipped to 0.66 per cent from 0.93 per cent. The provision coverage ratio improved to 90.49 per cent for the quarter under review from 88.08 per cent a year ago.

“One of the key drivers or the USP of the bank is in terms of maintaining asset quality. It has come down substantially. The reason for a rise in net profit is because of improved business both on the liability side and asset side,” said S Krishnan, managing director and chief executive officer of the bank. Krishnan said that the bank is targeting an overall business growth between ‘12-15 per cent during the current financial year --  both in terms of deposits and advances.’

The bank’s total deposits increased by 9 per cent during the period from Rs 43,233 crore during the April to June quarter of the previous financial year to Rs 47,008 crore in Q1 of FY24. The total business of the bank at the first quarter ended June 2023 stood Rs 84,300 crore with a growth rate of 9 per cent. Total advance was also seen up by 10 per cent to Rs 37,292 crore during the period.

During the period, the bank’s return on asset was at 1.85 per cent and return on equity was at 14.8 per cent, compared to 1.83 per cent and 17.41 per cent respectively during the same time last fiscal. Non-Interest Income has moved to Rs 167 crore from Rs 140 crore Y-o-Y. The RAM segment has increased to 90 per cent from 88 per cent Y-o-Y.

The advances to the priority sector have increased to Rs 27,805 crore from Rs 24,839 crore last year, posting a growth rate of 12 per cent. Its advances to the agriculture sector stood at Rs 12,231 crore. The advances to the agriculture sector constitute 32.8 per cent of total advances, above the regulatory requirement of 18 per cent. Credit to the MSME sector has increased to Rs 13,311 crore, as against Rs 12,588 crore last year.

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First Published: Jul 24 2023 | 7:15 PM IST

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