Tamilnad Mercantile Bank (TMB) has reported a flat net profit for the March 2024 quarter, while the profit has increased 4 per cent for FY24.

The board declared a final dividend of ₹10 per equity share of the face value ₹10 each (100 per cent) for FY24.

The Thoothukudi-headquartered old private sector bank has recorded a lower operating profit at ₹367 crore in the March 2024 quarter, compared with ₹404 crore in the year-ago quarter. Net profit for the fourth quarter of FY24 was flat Rs.253 crore.

S Krishnan, Managing Director & CEO of the bank, said there were two reasons for the lower operating profit and flat net profit. The bank has an amount of about ₹83 crore up to March 31, 2024, towards wage arrears on an ad-hoc basis, pending negotiations with its staff. It provided ₹28 crore in Q4FY24 and about ₹69 crore in FY24. The bank also provided about ₹13-14 crore for an NPA account as a matter of prudence.

Net interest income stood at ₹567 crore in Q4FY24 (₹527 crore). Slippages were at ₹59 crore (₹70 crore). Cash and upgradations were higher at ₹80 crore (₹41 crore).

Annual results

For the full year ended March 31, 2024, the company’s net profit grew to ₹1,072 crore (₹1,029 crore).

Interest income grew to ₹4,848 crore in FY24 (₹4,081 crore), while non-interest income increased to ₹645 crore (₹629 crore). Total expenditure was higher at ₹4,011 crore (₹3,137 crore).

Net interest income grew marginally to ₹2,151 crore in FY24 (₹2,094 crore).

“We guided that the bank would maintain a NIM (net interest margin) of above 4 per cent and we achieved 4.24 per cent as of March 31, 2024,” said Krishnan.

The slippage ratio has come down from 2.15 per cent in FY2020 to 1.36 per cent in FY24. In Q4 of FY24, it was at 0.16 per cent from 0.21 per cent in Q4 of FY23.

Total SMA (Special Mention Accounts) to gross advances has reduced to 3.97 per cent (6.51 per cent). “This indicates a substantial reduction in stressed assets,” he said.

As of March 31, 2024, the Gross NPA stood at 1.44 per cent, up from 1.39 per cent in Q4 of the previous fiscal and down from 1.69 per cent in Q3FY24. Net NPA decreased to 0.85 per cent, from 0.62 per cent in the year-ago period and 0.98 per cent in the preceding quarter.

Gross advances increased to ₹39,970 crore (₹37,582 crore), while total deposits grew to ₹49,515 crore (₹47,766 crore). CASA ratio increased to 30 per cent (29 per cent). The savings bank account alone crossed the ₹10,000-crore mark in FY24.

Replying on the search for his successor after RBI rejected names proposed by a committee of the bank, Krishnan said a panel was already in search of fresh candidates and the bank was looking for direct applications and also through headhunting firms. The regulator has asked TMB to start the process again.