PAN India Presence Is Available At Tamilnad Mercantile Bank 

Tamilnad Mercantile Bank Limited (TMB) is a bank headquartered in Thoothukudi, Tamil Nadu, India. TMB was established in 1921 as the Nadar Bank, but in November 1962 it changed its name to Tamilnad Mercantile Bank to reach out to those outside of the Nadar community.   

The Tamilnad Mercantile Bank submitted an elaborate red herring prospectus to the Securities and Exchange Board of India on September 6, 2021, in order to raise money through an IPO. The Securities and Exchange Board of India granted the business clearance for its first public offering on June 7, 2022. 

The first bank in the private sector in India to implement computerization for branch-level operations was Tamilnad Mercantile Bank. Modernization had been welcomed by the bank as early as 1983. Using Infosys’ “FINACLE” software, the bank’s 509 branches are currently networked and have 100% connection. 

The MD of Tamilnad Mercantile Bank wants to be present across India. 

The bank’s GNPA ratio as of March 31 was 1.39%, down from 1.69% a year earlier, while its net NPA ratio was 0.62% as opposed to 0.95% in the prior fiscal year. 

According to its MD & CEO S. Krishnan in a conversation with FE, Tamilnad Mercantile Bank (TMB) is aiming to maintain below 2% gross non-performing asset ratio (GNPA) and sub-1% net NPA ratio during the current financial year. The bank’s GNPA ratio as of March 31 was 1.39%, down from 1.69% a year earlier, while its net NPA ratio was 0.62% as opposed to 0.95% in the prior fiscal year. 

With a gross NPA of 1.39% and a net NPA of just 0.62%, a slippage ratio of 0.82%, and a credit cost of 0.4%, asset quality is among the best.Net NPAs will remain below 1% and gross NPAs will remain below 2%. When it comes to the credit cost and slippage ratio, they should be in the 0.5%–0.75% range. 

Krishnan, who took over as the bank’s new MD in September of last year, wants to increase TMB’s visibility as a pan-Indian bank with a digital focus. In different sections of the nation where the potential for banking operations is larger, the bank will open another 50 branches this fiscal, totalling the 21 branches it opened in FY23. The bank now has over 530 branches, of which roughly 370 are located in Tamil Nadu. 

As of March 31, TMB’s loan book has grown 11% year over year to Rs 37,582 crore. 87% of the bank’s total advances were from retail, agricultural, micro, small, and medium-sized company (MSME) loans. According to the MD, the bank would increase its advances by 10% to 12% in the current fiscal year and keep working to expand its Rs 13,319 crore MSME loan book. To that aim, the lender has already started a business process re-engineering project in which it is looking for ways to improve the current MSME lending products. 

As of March 31, the private bank’s total deposits increased 6% year over year and 10% sequentially to Rs 47,766 crore, while the CD ratio was 79%. The bank’s CASA ratio decreased from 30% in Q3FY23 and 31% in Q4FY22 to 29% in January–March. According to the MD, the bank plans to increase deposits by 8% to 10% in FY24. 

The uptrend in net interest margin: 

With margins of 3.61% in the most recent year, the company has been able to steadily increase its net interest margin during the previous three years. (Standalone Financials, source) 

According to Regulation 23(9) of the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, the bank disclosed on April 25, 2023, half-yearly disclosure of related party transactions for the period ending March 31, 2023. According to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the investor and analyst meeting recording for the quarter and financial year ending March 31, 2023, held on April 24, 2023, will also be available on the TMB website. 

Publication of the quarter’s and fiscal year’s audited financial results for the period ending March 31, 2023, The bank issued a press release titled “Audited Financial Results for the quarter and financial year ended March 31, 2023” in accordance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. 

The fact that Tamilnad Mercantile Bank has a pan-India presence will increase its value and, at the same time, spur economic expansion throughout India and new jobs in Tamil Nadu.