Tamilnad Mercantile Bank conducted a conference call on 22 April 2024 to discuss the financial results for the quarter ended March 2024. S. Krishnan, MD&CEO of the bank addressed the call:

Highlights:

The bank has recorded the highest ever interest income as well as net interest income in the quarter ended March 2024.

The bank has achieved the milestone of Rs 10000 crore in saving bank deposits end March 2024.

The bank has witnessed reduction in the gross NPA ratio to 1.44% end March 2024 from 1.69% end December 2024. The net NPA ratio also slipped to 0.85% from 0.98% during the same period.

The bank has exhibited sharp reduction in the SMA loan book to 3.97% from 6.51% a year ago. The stressed asset ratio has declined to 2.7% end March 2024 from 3.18% end March 2023.

On the advances side, the share of retail, agriculture and MSME (RAM) segment in loan Book has increased to 91% from 87% a year ago. The RAM sector growth is driven by the agriculture which is mainly gold loan.

The bank has consistently improved net interest margin from 4% in Q1 to 4.1% in Q2, 4.08% in Q3 and 4.24% in Q4FY24. For full year FY2024, the bank has witnessed decline in the margin to 4.11% from 4.46% in last year.

The capital adequacy ratio of the bank is at a very comfortable level.

The slippage ratio stood at 0.16% in Q4 and 1.26% in FY 2024.

The bank is not part of the IBA wage settlement, while it has its own wage settlement with the employees. The bank has created healthy provisions of Rs 28 crore for the employee wage benefit in Q4FY2024 and Rs 85 crore in FY 2024 against Rs 15 crore in FY2023. The bank has fully provided for the 17% wage hike.

After transformation process in FY2024, the bank is stabilized and targets loan growth of around 15% for FY2025.

The bank added 32 branches in FY2024 and it aims to add 50 branches in FY2025 while it has already added 4 branches in April 2024.

The bank had shared three names for the post of new MD with the Reserve Bank of India. The RBI has communicated about being not comfortable with names.

The bank has witnessed decline in the cost of funds from 5.9% in Q3 to 5.79% in Q4FY24. The bank expects the cost of funds to remain stable going forward.

The bank has exhibited an increase in the share of retail deposits to 83% from 82% last year.