Tamilnad Mercantile Bank (TMB) on Monday reported a 38% jump in its net profit to Rs 280 crore for the third quarter of FY23 owing to a rise in net interest income (NII) and an improved asset quality. The lender had posted a net profit of Rs 203 crore in the year-ago period. Total income stood at Rs 1,173 crore, against Rs 1, 213 crore, down 3.34%.
S Krishnan, MD & CEO, told reporters that the bank has continuously been making growth in the bottom line and the third quarter profit was due to increase in the NII and improvement in the asset quality. The NII increased to Rs 534 crore from Rs 453 crore while the net interest margin rose to 4.50% from 4.03%.
Gross NPA as a percentage to total advances contracted to 1.70% from 3.08% and net NPA declined to 0.75% from 1.44%. The provision coverage ratio increased to 89.83% from 83.71%. “We have recorded good set of NPA numbers and could contain fresh slippages in the third quarter,” he said.
Slippages during the latest quarter were at Rs 66.52 crore and they were offset by recovery of Rs 68.78 crore. Krishnan said the bank has set up a monitoring mechanism under the supervision of headquarters for effective recovery process. “Our focus will be on RAM (retail, agri and MSMEs) and we will be very selective on corporate lending.”
The total business rose 5.69% to Rs 78,242 crore, of which deposit accounted for Rs 43,440 crore. Advances to the RAM sector accounted for 89% (Rs 31,102 crore). The capital adequacy ratio rose to 24.44%.
Deposits increased to Rs 43,440 crore from Rs 42,035 crore and the CASA position was at Rs 12,851 crore with a growth rate of 10.15%. Advances increased to Rs 34,802 crore with a growth rate of 8.77%.