Thoothukudi-headquartered Tamilnad Mercantile Bank Limited (TMB) posted ₹1,029 crore of net profit in FY23. Net profit for March FY23 quarter stood at ₹253.05 crore, up 11.45 per cent year-on-year(y-o-y). It recorded 15. 37 per cent y-o-y growth in net interest income (NII) to ₹2,094 in FY23. Consequently, its operating profit stood at ₹1,573 crores in FY23.

The bank’s net interest margin, a measure of profitability, stood at 4.46 per cent for FY23 and at 4.49 per cent for Q4. The bank closed the fiscal with total deposits at ₹47,766 crores, registering six per cent growth, while its advances grew by 11.36 per cent YoY to ₹37,582 crores in FY23.

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Share of low-cost deposits namely, CASA or current account – savings account deposits, dipped to 29 per cent as on March 31, 2023, versus 31 per cent in FY22. The bank’s annualised cost of deposits rose 33 bps YoY to 5.17 per cent, while its yield on advances also increased from 9.67 per cent in FY22 to 9.9 per cent in FY23.

According to S Krishnan, MD & CEO, TMB, the bank plans to grow its deposits by 8 – 10 per cent and its advances by 12 – 13 per cent in FY24. The bank also plans to add 50 branches in the ongoing fiscal.

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As regards asset quality, it witnessed an improvement in Q4. Gross non-performing assets in Q4 eased to ₹521.46 crore as against ₹570.92 crore for the same period last year. Consequently, the gross NPA ratio improved to 1.39 per cent in Q4 as against 1.69 per cent in the year-earlier period.

The bank’s net NPA ratio stood at 0.62 per cent in Q4 FY23 versus 0.95 per cent in Q4 FY22. Total restructured advances stood at ₹673.81 crore and the bank has a provisioning buffer of ₹300 crore. The overall provision coverage ratio stood at 90.9 per cent and at 55.93 per cent, excluding technical write-offs. TMB’s capital adequacy stood at 26. 26 per cent, including 24.61 per cent of tier-1 capital in FY23.