Tamilnad Mercantile Bank (TMB) has reported a strong rise in net profit, reduction in NPA, and growth in credit offtake for the December 2022 quarter.

The Thoothukudi (Tamil Nadu)-headquartered ‘old private sector bank’, which went public last year, has reported a 38 per cent increase in its net profit at ₹280 crore for the December 2022 quarter compared with ₹203 crore in the year-ago quarter, driven by an 18 per cent increase in net interest income (NII). The NII rose to ₹534 crore from ₹453 crore.

The bank’s operating profit grew marginally to ₹405 crore from ₹401 crore in the year-ago quarter.

Return on average assets grew to 2 per cent in Q3FY23 from 1.62 per cent as of December 2021, while return on equity increased to 17.14 per cent from 16.38 per cent. Total slippages were lower at ₹66 crore compared with ₹76 crore a year ago.

“We have been containing slippages and the slippage ratio stood at 0.19 per cent in Q3 of this fiscal as against 0.23 per cent in the preceding quarter and 0.24 per cent a year ago,” said S Krishnan, Managing Director and CEO of Tamilnad Mercantile Bank.

Gross advances stood at ₹34,806 crore when compared with ₹31,995 crore, while total deposits grew to ₹43,440 crore from ₹42.035 crore. RAM (retail, agriculture, and MSME) sector accounted for 89 per cent of gross advances in Q3 of this fiscal. The bank’s CASA position grew 10.15 per cent at ₹12,851 crore.

As of December 31, 2022, the gross NPA as a percentage of total advances stood at 1.70 per cent and the net NPA stood at 0.75 per cent (3.08 per cent and 1.44 per cent, respectively in Q3FY23)

Provision coverage ratio

Provision Coverage Ratio of the Bank increased to 89.83 per cent (83.71 per cent).

Krishnan said since RBI has lifted restriction on branch expansion, TMB has planned to open about 25 new branches across India with its entry into north eastern region for the first time.

On Monday, the bank’s scrip closed at ₹479.5 on BSE.