Salee S Nair, MD and CEO, Tamilnad Mercantile Bank Ltd
The quarter-on-quarter earnings growth was driven by a 16 percent year-on-year increase in advances, driven by MSME loans and fixed rate gold loans, which also helped improve returns on advances. Total advances stood at ₹50,763 crore as of December 2025.
Deposits grew 12.5 percent year-on-year to ₹56,707 crore. Total revenue grew 14.3 percent YoY to ₹1,07,470 crore by December 2025. The bank also saw a healthy CASA increase to ₹15,847 crore at a growth rate of 14.9 percent YoY.
FY26 guidance up
“We are on a transformation journey and have seen growth momentum further accelerate this quarter with growth in total revenue, profitability and achieving the highest ever quarterly profit,” Salee S Nair, MD & CEO, Tamilnad Mercantile Bank Ltd, told the media. For the full financial year 26, the bank expects total turnover to grow by more than 15 percent, slightly more than their original expectations.
The growth of the MSME lending segment in particular has been a “turnaround story”, the MD and CEO said. We expect the recent US-EU trade deals to provide a clear boost to this segment, he added. Robust growth of over 60 percent in the portfolio of personal gold loans (guaranteed), which helps cushion banks from the impact of ‘repo rate cuts’, has also helped, he noted.
In terms of asset quality, gross NPA has fallen from 1.32 per cent in Q3FY25 to 0.91 per cent in Q3FY26. Net NPA has declined to 0.20 percent, an improvement of 21 basis points year-on-year.
Among other digital initiatives, which will help the bank improve CASA and collections, TMB said it has set up a “state-of-the-art call center with AI calling facility” to improve customer service and support capabilities. We expect to set aside around ₹250 crore for technology modernization and digital transformation in FY27, on the same lines as FY26, Nair said.
Based on the bank’s preliminary assessment, it believes that the incremental impact of the new labor laws will not be material on its finances, and therefore no provision is being considered for this quarter.
Published on February 4, 2026
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