Tamilnad Mercantile Bank Ltd

Tamilnad Mercantile Bank Limited (TMB) reported strong financial performance for the quarter and half-year ended September 30, 2026. Total business grew by 27.25% year-over-year (YoY), driven by a 29.32% increase in gross advances and a 25.49% rise in deposits. Net interest income rose 35.17% YoY to ₹807 crore, while operating profit increased 41.80% to ₹642 crore. Net profit reached a record ₹451 crore, up 42.09% YoY, with return on equity (ROE) at 16.92% and return on assets (ROA) at 2.18%. Asset quality remained strong, with gross non-performing assets (NPA) at 0.61% and net NPA at 0.14%, both declining YoY. The cost-to-income ratio improved to 38.28%, and capital adequacy stood at 32.39%. Deposits grew significantly, with term deposits contributing 28.96% YoY growth. Retail, agriculture, and MSME advances saw robust growth, with MSME advances rising 23.62% YoY. The bank’s balance sheet expanded to ₹85,951 crore, with shareholders' funds at 12.53% of total assets. The bank also reported a 78%+ increase in market capitalization YoY and maintained a stable AA- credit rating from India Ratings. The presentation noted that the bank has fully provided for stressed non-fund-based (NFB) facilities and SMA 1 & 2 under ECL norms. Additionally, the bank has 631 branches, with nine new branches opened in H1FY27, and digital channels accounted for 97.48% of transactions. However, the document mentioned two show-cause notices from the Directorate of Enforcement (ED) related to share transfer and bonus share issuance, with penalties of ₹3.40 crore and ₹1,037 crore respectively, though the latter is under adjudication. The bank has appealed and is seeking regularization of the share transfers from the Reserve Bank of India (RBI).

The document highlights strong financial performance and asset quality improvements but also mentions ongoing legal and regulatory issues.