Tamilnad Mercantile Bank’s Q3FY26 net profit rises 14%
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Salee S Nair, MD & CEO, Tamilnad Mercantile Bank Ltd
Tamilnad Mercantile Bank announced a 14% increase in net profit to ₹342 crore for the December 2025 quarter (Q3FY26). Total income rose to ₹1,655 crore during the period, up from ₹1,520 crore in the corresponding quarter of the previous fiscal year.
Growth was propelled by a 16% year-on-year expansion in advances, driven primarily by MSME lending and fixed-rate gold loans. This contributed to improved advance yields, with total loans reaching ₹50,763 crore as of December 2025.
The bank’s deposit base expanded by 12.5% annually to ₹56,707 crore, while total business climbed 14.3% to ₹1,07,470 crore. Current and Savings Account (CASA) deposits saw robust growth at 14.9% year-on-year, rising to ₹15,847 crore.
Revised Fiscal Projections
MD & CEO Salee S Nair stated that the bank’s transformation initiatives accelerated business growth and profitability during the quarter, achieving record quarterly net profits. The institution has raised its full-year FY26 business growth forecast to over 15%, slightly above initial projections.
Nair highlighted the MSME segment’s performance as a turnaround story, anticipating further momentum from recent US and EU trade agreements. The bank’s personal gold loan portfolio—which provides insulation against potential repo rate cuts—recorded over 60% growth.
Asset quality showed improvement, with Gross NPAs declining to 0.91% in Q3FY26 from 1.32% in the year-ago period. Net NPAs tightened to 0.20%, reflecting a 21 basis point year-on-year enhancement.
Digital transformation efforts, including an AI-enabled call center, contributed to CASA growth and collections efficacy. The bank plans continued technology investments, budgeting approximately ₹250 crore for modernization initiatives in FY27—consistent with current fiscal year expenditures.
Preliminary assessments indicate minimal financial impact from new Labour Code provisions, with no quarter-specific allocations required.
Published on February 4, 2026
