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Notwithstanding the marginal dip of 1.5 per cent in its net profit for the quarter ended September 2011 to Rs 64.74 cr against Rs 65.73 crore during the corresponding year-ago period, Tuticorin-headquartered Tamilnad Mercantile Bank's board on Friday resolved to pay an interim dividend of Rs 900 per share of Rs 10 each (9,000 per cent).
The outgo on this account is estimated at Rs 25 crore.
TMB's Managing Director and Chief Executive, Mr A. K. Jagannathan, told Business Line that this was the first time in the history of the bank that the board had ever resolved to pay an interim dividend.
“The board had approved dividend at the rate of Rs 750 per share for the fiscal ended March 2009 and Rs 1,000/share the following year, but the same could not be released due to a stay obtained on the conduct of the AGM. It will be released and paid as soon as the issue is resolved,” he added.
The bank has been swayed by ownership tussles for close to two decades.
Higher provisioning
Commenting on the performance, Mr Jagannathan conceded that the net profit improved only by 3.43 per cent during the first half of 2011-12 to Rs 115.21 crore against Rs 111.39 crore during the corresponding period of the earlier fiscal due to higher provisioning — towards second option for pension amounting to around Rs 7 crore, depreciation on investments Rs 8 crore, a 2 per cent provision on restructured standard accounts amounting to Rs 3 crore, and higher NPA provisioning.
While preferring to remain silent on the number of accounts restructured during the first half, Mr Jagannathan expressed confidence about recouping around Rs 10 crore by end-December by recovery and up-gradation of 3-4 accounts.
Asserting that the bank was safe in so far as its exposure to the textile industry was concerned, the TMB chief said: “We have exposure, but there is no cause for concern. We have strict recovery policies and our focus is particularly on system-generated accounts.”
Deposits, advances
As at end-September 2011, deposits grew 24 per cent from Rs 11,708 crore to Rs 14,494 crore and advances by 30 per cent to Rs 11,266 crore from Rs 8,638 crore.
While its gross NPAs declined to 1.58 per cent (1.67 per cent), net NPAs rose from 0.54 per cent to 0.66 per cent.
Net interest margin increased from 4.01 per cent to 4.05 per cent.
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