Tamilnad Mercantile Bank
NII growth improves as NIM and loan growth jumps: Interest income increased 29% to Rs 1820.16 crore, while interest expenses moved up 24% to Rs 1012.99 crore in Q2FY2027. NII improved 35% to Rs 807.17 crore in Q2FY2027.
Margins improve qoq: The bank has shown 5 bps YoY decline in cost of deposits to 5.85%, while yield on advances increased 35 bps YoY to 10.32% in Q2FY2027. Thus, the NIM has improved 36 bps YoY, while it fell 10 bps qoq to 4.19% in Q2FY2027.
Double digit growth in the non-interest income: The non-interest income of the bank increased 12% to Rs 232.24 crore in Q2FY2027.
Expense ratio improves: The operating expenses of the bank increased 13% to Rs 397.86 crore, as other expenses moved up 16% to Rs 204.77 crore, while employee expenses rose 10% to Rs 193.09 crore in Q2FY2027. Cost to income ratio improved to 38.3% in Q2FY2027 compared with 43.8% in Q2FY2026. Operating Profit moved up 42% to Rs 641.55 crore.
Provisions and contingencies increase: The bank has shown 67% increase in provisions to Rs 33 crore.
PBT increased 41% to Rs 608.13 crore in Q2FY2027. Effective tax rate declined to 25.8% in Q2FY2027 from 26.6% in Q2FY2026. Net Profit increased 42% YoY to Rs 451.14 crore in Q2FY2027.
Asset quality improves: The bank has improved asset quality in Q2FY2027.
The fresh slippage of loans stood at Rs 34.83 crore in Q2FY2027 compared with Rs 42.56 crore in previous quarter and Rs 22.66 crore in the corresponding quarter last year. The recoveries of NPAs stood at Rs 31.12 crore and upgrades were at Rs 3.59 crore, while the write-off of loans was at Rs 26.53 crore in Q2FY2027. The standard restructured loan book of the bank declined to Rs 193 crore end September 2026 compared to Rs 208 crore a quarter ago. Provision coverage ratio improved to 96.61% at end September 2026 compared to 96.04% a quarter ago and 95.30% a year ago. The capital adequacy ratio of the bank stood at 32.4% with Tier I ratio at 31.4% at end September 2026.| Asset Quality Indicators: Tamilnad Mercantile Bank | ||||||||
| ? | Sep-26 | Jun-26 | Mar-26 | Dec-25 | Sep-25 | Variation | ||
| QoQ | YTD | YoY | ||||||
| Gross NPA (Rs Crore) | 371.67 | 398.08 | 388.21 | 462.83 | 474.45 | -7 | -4 | -22 |
| Net NPA (Rs Crore) | 83.59 | 98.00 | 97.41 | 100.08 | 121.52 | -15 | -14 | -31 |
| % Gross NPA | 0.61 | 0.69 | 0.73 | 0.91 | 1.01 | -8 | -12 | -40 |
| % Net NPA | 0.14 | 0.17 | 0.18 | 0.20 | 0.26 | -3 | -4 | -12 |
| % PCR | 96.61 | 96.04 | 96.14 | 96.08 | 95.30 | 57 | 47 | 131 |
| % CRAR - Basel III | 32.39 | 32.33 | 33.73 | 30.08 | 30.96 | 6 | -134 | 143 |
| % CRAR - Tier I - Basel III | 31.36 | 31.30 | 32.27 | 28.53 | 29.40 | 6 | -91 | 196 |
| Variation in basis points for figures given in percentages and in % for figures in Rs crore | ||||||||
Business Highlights:
Business growth improves: The business of the bank has increased at an accelerated pace of 27% YoY to Rs 130237 crore end September 2026, as advances growth improved to 29% to Rs 60691 crore and deposits growth improved to 25% to Rs 69546 crore at end September 2026. With the faster growth in advances, the credit to deposit ratio rose to 87.3% at end September 2026 from 84.7% at end September 2025.
CASA deposits ratio declines: The CASA deposits of the bank increased 16% YoY to Rs 17629 crore at end September 2026. The current account deposits moved up 16% to Rs 5042 crore, while saving account deposits increased 16% to Rs 12587 crore end September 2026. The CASA ratio eased to 25.3% at end September 2026 compared to 27.4% at end September 2025, while declined from 26.2% a quarter ago. The term deposits have increased 29% to Rs 51917 crore end September 2026.
Strong loan growth: Within the loan book, the retail loans increased 25% YoY to Rs 14886 crore at end September 2026, while credit to agriculture increased 35% to Rs 25094 crore and MSME credit increased 24% to Rs 17267 crore. The corporate credit has also increased 36% to Rs 3444 crore end September 2026. The share of retail, agriculture and MSME (RAM) eased to 94.3% at end September 2026 compared to 94.6% at end September 2025.
The gold loan book of the bank increased 39% to Rs 29280 crore at end September 2026. The share of gold loan book increased to 48.2% at end September 2026 from 47.8% a quarter ago and 44.8% a year ago. The net gold tonnage was 34.73 tonnes with LTV of 62.35%. The yield on gold loan book was at 10.69% with ROA of 2.89%.Investment book of the bank increased 14% YoY to Rs 18800 crore at end September 2026.
Branch expansion: The bank has added 3 branches in Q2FY2027, taking overall tally to 631 branches at end September 2026.
Book value of the bank stood at Rs 680.1 per share at end September 2026, while the adjusted book value (net of NNPA and 10% of restructured advances) was Rs 673.6 per share at end September 2026.
Financial Performance H1FY2027:
Bank has posted 39% increase in net profit to Rs 862.65 crore in the half year ended September 2026 (H1FY2027). The net interest income increased 34% to Rs 1572.25 crore, while non-interest income moved up 7% to Rs 470.60 crore, leading net total income to increase 26% to Rs 2042.85 crore in H1FY2027. The operating expenses increased 5% to Rs 790.23 crore, while provision and contingencies jumped 208% to Rs 87.35 crore. PBT increased 39% to Rs 1165.27 crore in H1FY2027. The cost-to-income ratio improved to 38.7% in H1FY2027 compared to 46.5% in H1FY2026. An effective tax rate rose to 26.0% in H1FY2027 compared to 25.6% in H1FY2026. The net profit has increased 39% to Rs 862.65 crore in H1FY2027.| Tamilnad Mercantile Bank: Results | |||||||||
| Particulars | 2609 (3) | 2509 (3) | Var % | 2609 (6) | 2509 (6) | Var % | 2603 (12) | 2503 (12) | Var % |
| Interest Earned | 1820.16 | 1413.39 | 29 | 3482.59 | 2799.63 | 24 | 5819.42 | 5291.26 | 10 |
| Interest Expended | 1012.99 | 816.26 | 24 | 1910.34 | 1622.95 | 18 | 3292.15 | 2990.34 | 10 |
| Net Interest Income | 807.17 | 597.13 | 35 | 1572.25 | 1176.68 | 34 | 2527.27 | 2300.92 | 10 |
| Other Income | 232.24 | 208.07 | 12 | 470.60 | 439.30 | 7 | 877.07 | 850.49 | 3 |
| Net Total Income | 1039.41 | 805.20 | 29 | 2042.85 | 1615.98 | 26 | 3404.34 | 3151.41 | 8 |
| Operating Expenses | 397.86 | 352.77 | 13 | 790.23 | 751.29 | 5 | 1549.11 | 1405.67 | 10 |
| Operating Profits | 641.55 | 452.43 | 42 | 1252.62 | 864.69 | 45 | 1855.23 | 1745.74 | 6 |
| Provisions & Contingencies | 33.42 | 20.01 | 67 | 87.35 | 28.35 | 208 | 48.63 | 170.85 | -72 |
| Profit Before Tax | 608.13 | 432.42 | 41 | 1165.27 | 836.34 | 39 | 1806.60 | 1574.89 | 15 |
| Provision for tax | 156.99 | 114.91 | 37 | 302.62 | 213.94 | 41 | 469.05 | 392.28 | 20 |
| PAT | 451.14 | 317.51 | 42 | 862.65 | 622.40 | 39 | 1337.55 | 1182.61 | 13 |
| EPS*(Rs) | 114.0 | 80.2 | ? | 109.0 | 78.6 | ? | 84.5 | 74.7 | ? |
| Equity | 158.4 | 158.4 | ? | 158.4 | 158.4 | ? | 158.4 | 158.4 | ? |
| Adj BV (Rs) | 673.6 | 587.0 | 673.6 | 587.0 | ? | 630.9 | 556.7 | ||
| * EPS and Adj BV are calculated on diluted equity as given for each year. Face Value: Rs 10, Figures in Rs crore | |||||||||
| Source: Capitaline Corporate Database | |||||||||
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