Shares of Tamilnad Mercantile Bank Ltd. surged 13.24% to hit their all-time high of ₹911.00 on Monday, July 27, reacting to their first quarter earnings. According to The Hindu BusinessLine, the stock is still trading 10% higher at ₹884.05 as of the latest trading session. The stock has demonstrated exceptional performance this year, rising 70% so far and is now 75% above its issue price of ₹510 per share.
The bank reported robust financial results for the June quarter, with standalone net profit increasing 35% to ₹412 crore compared to ₹305 crore in the previous year. As reported by The Hindu BusinessLine, net interest income (NII) grew 32% YoY to ₹765 crore from ₹580 crore in the year-ago period. Net interest margin (NIM) improved to 4.3% from 3.8% in the year-ago period, though it was down 46 basis points from June 2025 to 4.29% in the year-ago period. Total business stood at ₹1,21,715 crore, a rise of 23% year-on-year. Total operating income rose 19.92% to ₹1,662.43 crore from ₹1,386.24 crore in the same period last year.
The bank's growth was primarily driven by strong performance in retail and agriculture segments. According to The Hindu BusinessLine, advances grew 27% YoY to ₹57,306 crore, with retail loans surging 36% YoY and agri loans growing 30% YoY. At ₹23,399 crore, agri loans now make up almost 40% of total advances of the bank. Total deposits stood at ₹64,409 crore, up 19.7% compared with ₹53,803 crore in Q1 FY26. CASA increased 17% YoY to ₹16,852 crore in Q1 FY27, while the bank opened six branches during the quarter and now has a footprint of 628 branches across the country.
The bank demonstrated improved asset quality on a sequential basis during the quarter. According to The Hindu BusinessLine, gross NPAs as of June 30, 2026, at 0.73%, were down 53 basis points from the previous quarter. Net NPAs stood at 0.17%. MD and CEO Salee Sukumaran Nair noted that the bank has not seen any stress due to macroeconomic factors, stating "The indirect impact is there, but we have been watching this closely. We have not seen any impact of that so far in the stress levels." Provision Coverage Ratio (PCR) improved to 96.04% from 94.32% at the end of Q1 FY26, though provisions and contingencies rose to ₹54 crore during the first quarter compared to ₹8 crore in the same period last year.
The bank is actively exploring international expansion opportunities to address foreign currency deposit challenges. As reported by The Hindu BusinessLine, the bank has raised $10 million so far under the RBI's special forex swap facility and aims to touch $50 million by the window's end. Nair indicated the bank is evaluating liaison offices across territories to address foreign presence issues. The bank plans to spend ₹280 crore on IT infrastructure in FY27, focusing on cyber security, mobile banking, Internet banking, credit process automation and a trade finance platform. The bank's export credit stands at 3.53% of total MSME and corporate credit, with West Asian countries' exposure at ₹32.14 crore, representing 0.06% of total advances.
