Tamilnad Mercantile Bank confident of maintaining NIM at 4%, plans to open 40 branches in FY25, says CEO

The lender, for FY25 plans to open 40 new branches across various regions beyond Tamil Nadu, with a special focus on the micro, small and medium enterprises (MSME) sector, retail growth and digital banking services.

Tamilnad Mercantile Bank is confident of maintaining its net interest margin (NIM) at 4 percent for this fiscal year, managing director and chief executive officer Salee S Nair said during the bank’s 102nd annual general meeting (AGM).

“The bank will continue to protect its NIM at 4 percent, with initiatives in place to optimise capital allocation and enhanced operational efficiency,” Nair said. In Q1FY25, the bank’s NIM increased to 4.12 percent from 4 percent last year.

The lender plans to open 40 branches in FY24 across various regions beyond Tamil Nadu, with a focus on the micro, small and medium enterprises (MSME) sector, retail growth and digital banking services.

“In the coming year, TMB will focus on expanding retail and MSME portfolios. Alongside, the bank’s digital transformation strategy is a key growth driver, with a strong emphasis on enhancing cybersecurity and improving customer experience through online banking platforms,” Nair said at the AGM.

The bank has also hired a global consultant to strengthen its MSME portfolio, Nair said. “The bank has hired a global consultant, reinforcing its commitment to boosting the sector with innovative solutions and improved lending capabilities,” he said.

Deposit growth

The bank is targeting doubling its current deposit growth rate. “The bank is targeting a significant increase in deposit growth, aiming to double its current growth levels,” Nair said. The bank's deposits increased to Rs 49,188 crore in Q1FY25 against Rs 47,008 crore in Q1FY24, a 4.6 percent jump.

In Q1FY25, the bank posted a 10 percent rise in net profit to Rs 287.3 crore, compared to Rs 261.23 crore. During the quarter, the bank posted its highest-ever net profit, operating profit, total income, and interest income.

The bank has appointed Vincent Menachery Devassy as executive director. Devassy began his career at the State Bank of India and has over 39 years of experience in commercial banking.