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Q4FY21 Result Update-Tamilnad Mercantile Bank Limited



Tamilnad Mercantile Bank (formerly known as The Nadar Bank) initially  set up for Nadar Community now has reach across all communities in  India. It has one of the strongest financial position and it boasts of a  remarkably high CAR as per Basel II norms. With initial capital base of Rs  5 lacs today TMB has crossed a net worth of Rs 44 Bn as on March 2021.  It has emerged as a fastest growing schedule bank in India serving 4.5  million customers across 16 states and 4 union territories.  

K.V. Rama Moorthy is the MD and CEO of the company.




TMB has shown consistent improvement in its performance over the last 5 years. In this quarterly result, we have seen a drastic  jump in the CASA ratio to 28.5%, signifying a growth of 267 bps and 109 bps on a y-o-y basis, which indicates the management’s  continuous efforts to reduce its cost of funds and will lead an improvement in NIMs going ahead. Also, the advances and deposits  in the quarter have shown 12.1% and 11.3% growth y-o-y, which is commendable in this pandemic situation given the company’s  limited geographical presence. TMB has ended the year with a total business of Rs 720 Bn, a growth of 11.6% from the last year.  Return ratios have also shown improvement with ROE of 14.0% and ROA of 1.3% for the year. Asset quality has also been  steadily improving since last few years, with retail book growing and we believe this trend will continue. 

TMB is one of the strongest bank in South India, with a proven track record. The CAR of 18.9% is well above the regulatory  requirement and points towards the management’s prudent policy against the unforeseen bad loans, simultaneously focusing on  growth. The company is planning to go for IPO worth Rs 10 Bn, which will be a combination of fresh capital along with OFS and  we believe the IPO range can be in the range of Rs 600-650. 


This article is prepared by CA Shraddha Jain, Senior Research Analyst – Unlisted & Private Equity, on April 30, 2021. The views  expressed herein are based on the facts and assumptions indicated in the document. 

All investment / financial opinions and/or views expressed herein are the personal views of the author. All the information  contained herein is to be construed as indicative data which has to be corelated with actual market and economic conditions. 

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