Companies

Provision for wage hike curbs growth in TMB net

L. N. Revathy Coimbatore | Updated on July 16, 2011




Tamilnad Mercantile Bank's net profit rose 11 per cent and crossed the Rs 50- crore mark to touch Rs 50.47 crore during the first quarter of 2011-12, against Rs 45.66 crore during the corresponding quarter of the earlier fiscal.

Though this rise in net profit appears good at this juncture, TMB's Chief Executive and Managing Director, Mr A. K. Jagannathan, concedes that it would have been more, had it not been for the provision towards increase in staff salary and second option of pension.

“We have made a provision of Rs 21 crore, which is much more as compared with the last quarter. Provision towards second pension option alone amounted to Rs 4.5 crore,” he said adding, “this is part of the game. As we expand our reach, staff costs will rise and business volumes will grow.”

Total business

The bank's total business increased by 20.72 per cent to Rs 24,433.74 crore (year-on-year), compared with Rs 20,239.73 crore achieved last year. While deposits grew by 18 per cent to Rs 13,819.65 crore (Rs 11,733.92 crore), advances growth was higher at 25 per cent

“We decided to accelerate and grow our deposits during the first quarter, since the rate of growth of advances was higher. To attract retail deposits, we introduced TMB 20-20 (20 months, 20 days) scheme. The response to this has been quite good. We have shed some bulk deposits,” he said.

The CASA grew 14.7 per cent to Rs 3,146.31 crore (Rs 2,742.92 crore)

The total income of the bank stood at Rs 451 crore during the first quarter (Rs 353.88 crore), registering a 27 per cent growth.

The Net Interest Margin increased from 3.87 per cent to 3.97 per cent.

Published on July 16, 2011

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