Salee S Nair, MD & CEO, Tamilnad Mercantile Bank | Photo credit:
Tamilnad Mercantile Bank says after a lull, robust growth is returning for the private sector lender this fiscal.
The growth of 11.4 percent in total revenue is the highest in a decade, with 9.3 percent YoY growth, CASA is also showing robust growth and the momentum of progress has also increased, said Salee S Nair, MD & CEO, Tamilnad Mercantile Bank. “We expect to end FY26 with 14-15 per cent growth in advances and 12-13 per cent growth in deposits. This is significantly higher than the 9-10 per cent business growth we recorded last fiscal,” he added.
“Our expectation was to be in line with the market growth in FY26, but in H1FY26 we can say that we will be above the industry growth,” Nair said.
On the CASA front, the bank credits the Transaction Business Group (TBG), implemented in Q4FY25, and Elite Service Group (ESG), established in Q1FY26, for taking root. These two initiatives have helped increase the size of current accounts, government accounts and other deposits, Nair said. In the case of checking accounts, new customer base increased 60 percent year-on-year in the second quarter of 2026, the executive said.
The net interest margin (NIM) of 3.83 percent is down 42 basis points year-on-year, and was largely impacted by the REPO rate cut in June. “50 per cent of our advances are REPO linked. 66 per cent of our deposits are in the one-two year period, so it takes time to reprice. We expect NIM to improve in the subsequent quarters,” Nair said.
MSME Loan Book
Despite the RAM segment making up 94 percent of its total loan portfolio, the lender says there has not been much pressure on its MSME loan portfolio due to the impact of US tariffs. Export credits constitute only about 1 percent of our total loan portfolio, Nair said. The textile industry is certainly concerned, and the industry is looking forward to and looking forward to the U.S. tariffs being resolved quickly, he added.
On the impact of the GST cut on consumption, Nair said there has been a slight increase in auto loans, but it is unclear whether this is the impact of the GST or just a recovery in pent-up demand. In the field of home loans, the bank uses cooperation with builders to increase the processing time of home loans.
TMB now has 600 branches nationally and will open nine new branches in the second quarter of 2026.
Published on October 28, 2025
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