The lender reported a strong set of earnings in the June quarter, with its asset quality improving on a sequential basis.
Its net profit came in at ₹411.5 crore, up 35% from last year’s ₹305 crore.
Net interest income (NII) or core income earned by the lender increased by 32% to ₹765.4 crore from ₹579 crore in the previous fiscal.
The bank’s gross non-performing assets (NPA) improved to 0.69% from 0.73% sequentially, while its net NPA declined to 0.17% from 0.18%.
The increase in Tamilnad Mercantile Bank’s profitability is despite a significant increase in provisions, which, at the end of the June quarter, stood at ₹54 crore, compared to ₹19 crore in March and ₹8 crore in the previous quarter.
Earlier this month, the lender in its provisional business update reported strong growth in both deposits and advances. Its total business increased 23% to 1.22 lakh crore as of June 30 from ₹98,923 crore last year. It was up 5.8% sequentially.
The lender’s gross advances were up 27% from the year-ago period at ₹57,306 crore, while its deposits increased 19.7% to ₹64,409 crore.
From the previous quarter, its advances increased 7.4% and deposits were up 4.4%.
The lender’s current account savings account (CASA) deposits stood at 16,852 crore, increasing 16.9% from the previous year but declining 3% sequentially.
Shares of Tamilnad Mercantile Bank gained 11.2% to hit their all-time high of ₹898.7 apiece on Monday, reacting to their first quarter results. The stock is still trading 10% higher at ₹884.05. The stock has risen 70% so far this year and is now up 75% from its issue price of ₹510 per share.
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