South-based private sector lender Tamilnad Mercantile Bank (TMB) on Monday reported a 11.5% rise in its net profit at Rs 261 crore for the first quarter of FY24, compared with Rs 234 crore in the year-ago period, owing to an increase in interest income and drop in bad assets.
Total income stood at Rs 1,323 crore, compared with Rs 1,142 crore, registering a growth of around 16%.
S Krishnan, MD & CEO, said the performance has improved on a year-on-year basis on all the parameters. “Going forward, we expect the bank to post 12-15% growth in deposits and advances. We also expect to keep gross and net non-performing assets below 2% and 1%, respectively.”
The interest income improved to Rs 1,156 crore from Rs 1,002 crore while non-interest income grew to Rs 167 crore from Rs 140 crore.
Showing an improvement in the asset quality, gross non-performing asset (GNPA) declined to 1.56% from 1.69% while net NPA dropped to 0.66% from 0.93%. The provision coverage ratio increased to 90.49% from 88.08%.
The net interest margin (NIM) declined to 4% from 4.54%. “There was pressure on cost of deposits, hence the NIM contracted,” Krishnan said.
The return on asset was at 1.85% (1.83% previously) and the same on equity stood at 14.80% (17.41%). The bank’s net worth increased to Rs 7,190 crore (Rs 5,427 crore), logging a growth of 32.49%.
Krishnan said fresh slippage was of Rs 101 crore during the quarter under review and the cash recovery stood at Rs 42 crore.
The total business of the bank was at Rs 84,300 crore, compared with Rs 77,056 crore, an increase of 9.40%. Deposits clocked a growth of 8.73% at Rs 47,008 crore, against Rs 43,233 crore. Advances rose 10.26% to Rs 37,292 crore.