Tamilnad Mercantile Bank (TMB) has delivered the strongest quarter in its history. The Thoothukudi-headquartered private sector lender reported a net profit of ₹451.14 crore for the quarter ended September 30, 2026 (Q2 FY27), a 42% increase over the ₹317.51 crore it earned in the same quarter last year.
The record result was powered by robust core earnings. Net interest income (NII) climbed 35.17% year-on-year to ₹807.2 crore from ₹597 crore, while earnings per share for the quarter stood at ₹28.49 and return on equity at 16.92%.
Fastest business growth in 18 years
TMB’s total business expanded 27.25% year-on-year, which the bank described as its highest annual growth in 18 years and the best since its listing. That pace is roughly three times the bank’s 10-year compound annual growth rate of 9.41%, and more than eight percentage points ahead of the wider industry, according to the bank’s performance update.
Advances rose 29.32% to ₹60,691 crore, and total deposits grew 25.49% to ₹69,546 crore. The balance sheet expanded 24.49% over the year. Non-callable deposits rose by ₹3,075 crore in the first half of FY27, accounting for 40.62% of incremental term-deposit growth, and FCNR(B) deposits increased 47.14% to ₹1,055 crore. The bank also raised $51.94 million under the Reserve Bank of India’s special forex swap window.
Speaking to reporters, Salee S Nair, Managing Director and CEO, credited the performance to measures that boosted business growth and net interest income while keeping costs in check. Without offering formal guidance, he indicated that on current trends advances could grow upwards of 22% for FY27 and deposits by more than 20%.
Asset quality at a decade-best
Asset quality continued to strengthen. Gross NPA declined to 0.61% from 0.69% in the June quarter and 40 basis points lower year-on-year, the lowest level for the bank in a decade. Net NPA eased to 0.14%. TMB said its SMA-I and SMA-II accounts are fully provided for under expected credit loss (ECL) norms. Against an estimated ECL impact of about ₹385 crore, the bank had already set aside roughly ₹304 crore as of September 30.
Capital remains a clear strength, with a capital adequacy ratio of 32.39% and shareholders’ funds forming 12.53% of the balance sheet.
Cybersecurity, DPDP readiness and overseas ambitions
On the technology front, Nair said cybersecurity is a key priority, with around 20% of the bank’s IT infrastructure investment earmarked for it, and that the bank is well ahead in preparing for compliance with the Digital Personal Data Protection (DPDP) framework. He added that TMB is in the early stages of exploring overseas linkages in markets such as Singapore, Malaysia and Dubai.
For an old private sector bank long known for steady but measured growth, the September quarter marks a decisive shift in gear, combining faster balance-sheet expansion with best-in-class asset quality and ample capital headroom.
