Tamilnad Mercantile Bank Ltd

Meeting Details

• Date: 27 July 2026; exact time not disclosed.
• Type/Mode: Investor & Analyst Meet; format not specified.
• Subject: Unaudited Q1 FY2026 results (quarter ended June 30, 2026).

Participants

• Key company participant: Company Secretary & Compliance Officer.

Purpose

• Purpose: discuss Unaudited Financial Results for the quarter ended June 30, 2026.

Additional Notes

• Audio recording available on bank's website.

Subject and period

• Unaudited financial results for the quarter ended 30 June 2026 approved by the Board.

Key financial highlights

• Total business grew 23.04% YoY to ₹1,21,715 crore.
• Total deposits rose 19.71% YoY to ₹64,409 crore.
• Advances rose 27.01% YoY to ₹57,306 crore.
• Net profit up 34.97% YoY to ₹411.51 crore.
• Operating profit up 48.22% YoY to ₹611.07 crore.
• Net interest income rose 32.01% YoY to ₹765.08 crore.
• NIM improved to 4.29% from 3.84%.
• ROA rose to 2.14% from 1.82%.
• ROE rose to 15.93% from 13.30%.
• CRAR improved to 32.33% from 31.55%.
• PCR (without technical written off) rose to 75.36% from 73.04%.
• Net NPA improved to 0.17% from 0.33%.
• Gross NPA improved to 0.69% from 1.22%.
• Book value per share rose to ₹667.00.
• RAM segment share rose to 94.38% from 93.31%.
• New branches opened: 6 new branches and 1 regional office.

Operational developments and outlook

• Six new branches and one regional office opened in Q1 FY2027.
• MD & CEO cited stable asset quality and disciplined execution.
• Focus remains on retail, MSME and agriculture franchises.
• Deposits expansion and technology investments to enhance customer experience.
• Monsoon outlook expected to support rural credit demand.
• Capital position remains strong, underpinning sustainable growth.

Business overview

• Private sector bank focusing on RAM—Retail, Agriculture, MSME lending.
• Strategic emphasis on phygital expansion and technology upgrades.

Key operational highlights

• Deposits ₹64,408 Cr; Advances ₹57,041 Cr; RAM 94.38% of gross.
• Six branches opened in Q1FY27.
• Digital phygital upgrades include UPI on Credit Card and UPI Lite.
• RBI forex swap facility utilised; Co-Lending platform planned.

Financial performance

• 12M FY2026 total income ₹6,696 Cr; net interest income ₹2,527 Cr.
• Operating profit ₹1,855 Cr; net profit ₹1,338 Cr.
• ROA 2.14%, ROE 15.93%.
• NIM 4.29%; GNPA 0.69%, NNPA 0.17%.
• Quarterly EPS ₹25.99.

Capital structure & liquidity

• Borrowings ₹1,540 Cr; paid-up capital ₹158 Cr; reserves ₹10,404 Cr.
• Total assets/liabilities ₹79,786 Cr.
• LCR 150.74% (above minimum); NSFR 88.97% (below minimum).

Strategic priorities & outlook

• Phygital expansion continues; focus on digital onboarding and payments.
• Co-lending platform development; CBDC-related initiatives.
• RBI forex swap facility used; cross-border funding contemplated.

Risks & mitigation

• Stressed NFB fully provided; GNPA 0.69%, NNPA 0.17%.
• Provisioning supports asset quality; potential for write-backs.
• ED SCNs: penalties reduced on appeal; one pending; governance risk.

Governance & leadership

• ED SCN actions ongoing; penalty reduced to ₹3.40 Cr on appeal.
• No disclosed board or management changes.

Financial results & audit status

• Unaudited standalone results for quarter ended 30 June 2026 approved by Board.
• Limited Review by Joint Statutory Central Auditors with unmodified opinion.
• Net profit for the quarter after tax: ₹41,151 Lakhs.
• CAR 32.33%, CET1 31.30% under Basel III.
• PCR at 75.36% as of 30 June 2026.
• Provision for unhedged forex exposure ₹173 Lakhs; ₹206 Lakhs prior year.
• PSLC sale proceeds ₹21,299 Lakhs; ₹2,724 Lakhs recognized as other income this quarter.
• IFR discontinued; ₹12,960 Lakhs transferred to General Reserve.
• ESOP expense ₹5.05 Lakhs recognized.

Regulatory & compliance updates

• FEMA penalties reduced to ₹340 Lakhs per SAFEMA order; impact to be assessed.
• DBU not commenced; no DBU segment reporting.
• Investor complaints: 2 received, 2 resolved; 0 outstanding.
• Pillar 3 Basel III disclosures available on bank website; not reviewed.
• No stressed loans transferred or acquired; RBI resolution framework updates.

Auditor remarks

• Pillar 3 Basel III disclosures excluded from review.
• Independent auditor's review concluded no material misstatement observed.
• Unmodified opinion issued by Joint Statutory Central Auditors.

Penalty adjustment

• Appellate Tribunal under SAFEMA reduces bank's penalty from Rs 17 crore to Rs 3.40 crore.
• Excess Rs 13.60 crore deposited; refundable to the Bank.
• Penalty relates to FEMA violations in recording transfer of shares.
• Penalties on former Directors/Company Secretaries reduced substantially.
• Order received on 16 July 2026; bank reviewing order and will take necessary steps.

AGM Details

• Held on 14 July 2026 via VC/OAVM from 11:00 to 01:20 IST.

Resolutions & Voting

• All AGM business passed with requisite majority.
• Scrutinizer’s Report and voting results submitted; hosted on bank and CDSL websites.

Regulatory ruling

• Appellate Tribunal under SAFEMA dismisses the Deputy Legal Advisor's appeal against the FEMA share-transfer penalty.
• Show Cause dated 17.12.2014; Special Director imposed penalty on 14.08.2020.
• Appeal filed 27.01.2021 seeking confiscation of 46,862 shares.
• Tribunal dismissed the appeal on 09.07.2026; copy received 14.07.2026.
• Impact: not material to financial statements; relates to FEMA share-transfer contravention.

AGM Details

• Held on 14 July 2026 at 11:00 IST via VC/OAVM.

Key Resolutions

• Re-appoint K.V. Rama Moorthy as Non-Executive Director.
• Approve final dividend of ₹12.50 per share.
• Re-appoint Joint Statutory Central Auditors for 2026-27; remuneration ₹26,40,000 each.
• Authorize Board to appoint branch auditors for 2026-27 and fix remuneration with JSCAs.
• Re-appoint Shri C. Chiranjeeviraj as Non-Executive Independent Director.

Dividend

• Final dividend of ₹12.50 per equity share approved.

Auditor Appointments

• Joint Statutory Central Auditors appointed for 2026-27; remuneration ₹26,40,000 each.

Director Changes

• K.V. Rama Moorthy re-appointed as Non-Executive Director.
• C. Chiranjeeviraj re-appointed as Non-Executive Independent Director.

Branch/Other Approvals

• Board authorized to appoint branch auditors for 2026-27; remuneration to be fixed.

Voting Status

• Voting results to be announced and posted on exchanges and bank website.