South-based private sector lender Tamilnad Mercantile Bank (TMB) on Thursday reported a 37% increase in its net profit to Rs 262 crore for the second quarter, compared with Rs 191 crore in the year-ago period. The bank, which recently made its market debut, earned a total income of Rs 1,141 crore, against Rs 1,101 crore, marking an increase of around 4%.
S Krishnan, MD & CEO, said aggressive provisioning, good recovery and technical write-offs have led to lesser NPAs, thereby improving the asset quality. Gross NPA as a percentage to total advances stood at 1.70%, against 3.31%, and net NPA stood at 0.86%, compared to 1.79%. The provision coverage ratio increased to 88.58% from 80.50%. The net interest income grew 18% to Rs 1,032 crore while the net interest margin stood at 4.47%.
“The bank will continue focus on retail, agri and MSME (RAM) sector, which accounts for around 87% of the total loan book. But, we are not completely shutting the doors on corporate sector loans. We will be selectively giving loans to corporates after scrutinising their credentials,” he said.
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The corporate pie of the bank currently stands at 13% of total advances and going forward, the share could be scaled up to 15% or to a maximum of up to 20%, Krishnan said.
The bank will be revising upwards its interest rates on advances and deposits and also pitching for government business.
“We are coming out with a network expansion plan soon after board-level deliberations. We will be expanding with caution and calculation,” Krishnan said.
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The bank will take steps to introduce government agency business since the RBI has lifted the embargo on opening of new branches. It is also planning to introduce new variants of credit cards designed exclusively for current and savings account customers which will offer revolving credit facility to customers.
