Tamilnad Mercantile Bank delivered robust financial results for Q4FY26, with net profit growing 28% year-on-year to ₹374 crore for the quarter ended March 2026. The bank's annual net profit for FY26 stood at ₹1,338 crore, up 13% YoY, according to reports from The Hindu BusinessLine. This growth was driven by the bank achieving its highest advances and deposits growth in the past 39 quarters. The quarterly profit performance was notable as it rose despite the front-loading impact of ₹49.8 crore provision for Performance-based Incentive for FY26. Total Operating Income for Q4 rose 15.56% to ₹1,550.38 crore compared to ₹1,341.68 crore in the year-ago period.
The bank demonstrated strong business expansion with total deposits growing 15% YoY to ₹61,712 crore in FY26, while advances saw robust 20% YoY growth to ₹53,379 crore. As reported by The Hindu BusinessLine, total business grew 17.4% YoY to ₹1,15,091 crore for the full fiscal year. Net Interest Income for FY26 grew 9.8% and stood at ₹2,527 crore. The bank's CASA increased to ₹17,365 crore with 22.4% YoY growth, while Net Interest Margin was slightly down to 3.98% from 4.07% in the year-ago period. Deposits, which stood at 14.94% in the previous year, will see an addition of about one percentage point to reach 16% year-on-year.
The bank's asset quality showed significant improvement with Gross NPA at 0.73% as of March 31, 2026, the lowest in the past 40 quarters. Net NPA stood at 0.18%, as reported by The Hindu BusinessLine. MD & CEO Salee S Nair noted that the bank managed to arrest the decline in CASA and achieved business growth of 9.35% over the last 10 years CAGR. The bank expects total business to grow about 18% in FY27 with estimated 20% growth in advances and 16% deposits growth. Gross NPA at 0.73% is the lowest in the past 40 quarters, demonstrating the bank's continued focus on asset quality management.
According to Moneycontrol, CEO Salee Sukumaran Nair said the growth is expected to come from momentum in core operations driven by MSME revival and gold loan expansion. This quarter as well, gold loans have supported growth, but we are also seeing a revival in MSME, which is growing at about 15 percent. The combination of gold loan growth and revival in MSME lending has led to advances growth of over 20 percent. Advances growth continues to be supported by a strong gold loan portfolio alongside a revival in MSME lending. The bank noted significant measures taken to ensure it is not impacted by gold price volatility. Export credit is around 3.6% of total MSME and Corporate credit, while West Asian countries exposure is ₹57 crore, which is 0.10% of total advances.
TMB shares ended the trading day at ₹702.35, up over 9.7% on the BSE, as reported by The Hindu BusinessLine. The strong market response reflects investor confidence in the bank's robust financial performance and growth prospects. The bank has not utilised the provisions created during COVID-19 and will draw on those buffers to manage any potential impact from external headwinds. On external challenges, earlier tariff-related pressures have largely subsided and the larger concern currently is the ongoing West Asia crisis, though management expects pressures from all sides should eventually subside with no significant impact on the bank given its focus on MSMEs and relatively small exposure.
