Tamilnad Mercantile Bank Ltd. (TMB) reported fourth-quarter standalone net profit remained flat at ₹253 crore from the year-earlier period due to employee benefit cost and advance provisioning for a non-performing asset (NPA).
“When compared with the year-earlier quarter, the net profit might look flat, but we have made a provision of ₹28 crore towards possible salary increase,” MD & CEO S. Krishnan told journalists.
Stating that the lender was not party to IBA wage settlement, Mr. Krishnan said that TMB was given a charter of demands for wage increase during the first week of April and the bank had provided ₹69 crore so far. Besides, ₹13-14 crore had been set aside for a future NPA.
Net Interest Income (NII) grew to ₹567 crore from ₹527 crore. Net interest margin contracted to 4.24% from 4.34%. Net profit margin declined to 17.85% from 20.18%.
Gross non-performing asset as a percentage of the total advances rose to 1.44% from 1.39%, while net NPA jumped to 0.85% from 0.62%. Retail, Agriculture and MSME segment increased to 91% from 87%.
Provision Coverage Ratio slumped to 87.52% from 90.90%. Capital adequacy ratio stood at 29.37% (26.26%).
The CEO said that the slippages declined to ₹59.35 crore from ₹70 crore, while cash recovery and upgradation was ₹80 crore against ₹41 crore. Going forward, slippages are set to decline further.
Total deposits increased by 3.66% to ₹49,515 crore, while advances rose by 6.35% to ₹39,970 crore. Current account savings account deposits rose 6.84% to ₹14,676 crore.
TMB said it had reported six non-credit fraud cases amounting to ₹3.96 lakh. The bank recovered ₹2.29 lakh and for the remaining ₹1.67 lakh it had made 100% provision.
The board also recommended a dividend of 100%.
