Tamilnad Mercantile Bank (TMB) plans to expand its unsecured loan portfolio cautiously, primarily through government-sponsored schemes such as Mudra loans, to safeguard its net interest margins (NIM), managing director and CEO Salee S Nair said.
“We have been a little slow and that is one of the reasons why we got some of the best ratios,” he said. “We will be getting back into the government sponsor scheme, etc. And we are putting in place our business rule engine to give us a complete understanding. We will be lending only to the creditworthy lot.”
He expects the net interest margins at 3.90% by the end of 2026-27 (Apr-Mar). For the quarter ended December, the bank reported a net interest margin of 4.04%, higher than 3.83% in Jul-Sept.
By the end of the current financial year, Nair has pegged the loan growth at 16-17% and the deposits to grow at over 13%. As on December 31, the bank grew its advances by 16.30% on year and the deposits by 12.53%.
Nair on MSMEs
Nair said that he bets big on the micro, small and medium enterprise (MSME) segment. “We are betting big on MSME. In Q3, on a sequential basis, we have grown by 6.74%. We are still getting our act together. Next year we will be looking at growing the housing and the vehicle loan segment.” On a year-on-year basis, the MSME book grew 8.43% on year to Rs 14,910 crore.
On gold loans, he said that the segment provides a steady income for the bank but they are mindful of growing the book aggressively. “We are mindful of the competitive risk involved, watching the LTVs (loan-to-value) on a daily basis, we have put in place systems to monitor. So, this (gold) is a portfolio that will continue growing,” he said.
250 cr bet on IT infrastructure
The bank has allotted Rs 250 crore for FY26 for modernising the IT infrastructure. As part of that, the bank moved its HR, sales and service to the Oracle Fusion Cloud Application to drive productivity, reduce costs and improve employee and customer experience. Nair added that the first phase of technology revamp would be completed by September. Despite developing the bank growing on the technology front, Nair said that they have hired 1,043 new recruits across all verticals.