South-based private sector lender Tamilnad Mercantile Bank (TMB) on Thursday reported a 37% rise in net profit to Rs 262 crore for the second quarter from Rs 191 crore a year ago . The bank, which recently debuted in the market, made a total income of Rs 1,141 crore, up from Rs 1,101 crore, marking an increase of about 4%.
S Krishnan, MD and CEO, said aggressive provisioning, good recovery and technical write-offs led to fewer NPAs, thus improving asset quality. Gross NPA as a percentage of total advances was 1.70%, down from 3.31%, and net NPA was 0.86%, down from 1.79%. The provision coverage rate increased from 80.50% to 88.58%. Net interest income increased by 18% to Rs 1,032 crore while net interest margin stood at 4.47%.
“The bank will continue to focus on the retail, agriculture and MSME (RAM) sector, which accounts for around 87% of the total loan portfolio. But we are not completely closing the door on business loans. We will lend to businesses selectively after reviewing their credentials,” he said.
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The bank’s corporate pie currently stands at 13% of total advances and in the future the share could be increased to 15% or a maximum of 20%, Krishnan said.
The bank will revise upwards its interest rates on advances and deposits and will also offer to government enterprises.
“We are releasing a network expansion plan shortly after board-level deliberations. We will grow with caution and calculation,” Krishnan said.
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The bank will take steps to introduce the business of government agencies since the RBI lifted the embargo on opening new branches. It also plans to introduce new credit card variants designed exclusively for checking and savings account customers that will offer a revolving credit facility to customers.