Tamilnad Mercantile Bank Q2 Net Profit Grows 5%, Deposits Up 12.32% YoY

Tamilnad Mercantile Bank reported steady progress in its financial performance for the second quarter of FY26. The bank’s net profit rose by 5% year-on-year to ₹318 crore, compared to ₹303 crore in the same period last year. Alongside this, deposits grew 12.32% to ₹55,421 crore, reflecting the bank’s stable expansion across key business segments.

Stable Financial Performance in Q2 FY26

The lender’s total business grew by 11.40% during the quarter, marking its strongest year-on-year growth since listing. Advances rose 10.34% to ₹46,930 crore, supported by consistent lending activity. The current and savings account (CASA) base also strengthened, rising to ₹15,163 crore from ₹13,873 crore a year ago.

Net interest income (NII) remained steady at ₹597 crore, a marginal increase of 0.17% compared to the previous year. This consistent performance reflects a stable interest income stream amid a competitive banking environment.

Improved Asset Quality and Capital Strength

The bank continued to improve its asset quality metrics. Gross Non-Performing Assets (NPA) fell to 1.01% from 1.22% in the previous quarter, the lowest level in the past decade. Net NPA declined to 0.26% from 0.33% sequentially, indicating strong credit control and recovery efforts.

Additionally, the Provision Coverage Ratio (PCR) improved to 74.36%, compared to 66.40% earlier. The Capital to Risk (Weighted) Assets Ratio (CRAR) rose to 30.96% from 29.59%, strengthening the bank’s capital adequacy and supporting future growth.

Healthy Growth in Net Worth and Retail Portfolio

The bank’s net worth increased to ₹9,444 crore from ₹8,430 crore, showing a growth rate of 12.03%. The book value per share improved to ₹596.38, reflecting consistent earnings retention. The Retail, Agriculture, and Microfinance (RAM) segment’s contribution also rose to 94.59% in Q2 FY26, compared to 92.34% a year ago, highlighting the bank’s focus on diversified customer segments.

Tamilnad Mercantile Bank Share Price and Market Performance

As of 11:08 AM on October 28, 2025, Tamilnad Mercantile Bank share price was ₹466, up 2.05% from the previous session. The stock has been moving within a 52-week range of ₹401 to ₹514, supported by steady financial performance. With a market capitalisation of ₹7,385 crore, the bank maintains a stable presence among private sector lenders.

Tamilnad Mercantile Bank trades at a price-to-earnings (P/E) ratio of 6.07, with a dividend yield of 2.36%. The bank’s Return on Capital Employed (ROCE) of 7.49% and Return on Equity (ROE) of 14%.

Read More:Tamilnad Mercantile Bank Receives Tax Demand Notice From Income Tax Department

Long-standing Presence in the Banking Sector

Established in 1921, the bank continues to expand its footprint across India, serving both retail customers and MSMEs. It operates through 754 branches, including 169 correspondents, with nearly half located in semi-urban regions. Its network of 1,150 ATMs enhances accessibility, reinforcing customer convenience and trust built over more than a century of operations.

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