Thoothukudi, Feb 4: Tamilnad Mercantile Bank Ltd (TMB), one of India’s oldest private sector banks with a history spanning 104 years, announced its unaudited financial results for the quarter ended December 31, 2025. The bank continues to demonstrate robust growth, disciplined execution, and resilience across key financial parameters.
Shri Salee S Nair, Managing Director & CEO, TMB, stated, “Our Q3 FY26 performance reinforces the progress we are making in a year focused on building long-term capabilities and scalable growth. The bank delivered healthy growth in advances and deposits, with sustained profitability and strong asset quality. MSME lending remains a core growth driver, supported by trade-linked and manufacturing clusters. Our ongoing technology transformation is beginning to translate into operational benefits, improving turnaround times, risk assessment, productivity, and overall customer experience. Looking ahead, our focus remains on sustainable credit growth, deepening MSME relationships, and deploying capital efficiently as we move into a stronger growth cycle in FY27.”
Performance Highlights
During Q3 FY26, TMB recorded strong growth across key parameters. CASA deposits grew by 14.93% year-on-year, reflecting an increase in low-cost deposits. Total deposits increased by 12.53%, while total advances grew by 16.30%, driven by robust lending in Retail, Agri, and MSME segments. The bank’s overall business rose by 14.28% year-on-year.
Asset quality improved significantly, with gross NPA reducing to 0.91% from 1.32% and net NPA declining to 0.20% from 0.41% in the corresponding period last year. The bank’s Capital to Risk-weighted Assets Ratio (CRAR) strengthened to 30.08%, demonstrating robust capitalization. Net worth rose by 12.15%, while the RAM (Retail, Agri & MSME) segment contributed 93.98% of total advances, up from 92.39% in Q3 FY25. Return on assets stood at 1.97%, and return on equity was 14.22%.
TMB’s profitability improved, with net profit rising by 14% and operating profit by 15% year-on-year. The bank maintained a strong provisioning coverage ratio, and the total SMA (Special Mention Accounts) to gross advances reduced significantly, reflecting improved portfolio quality.
Branch Expansion and New Initiatives
During Q3 FY26, TMB opened 12 new branches, further expanding its pan-India footprint across 17 states and 4 Union Territories, serving over 5.3 million customers through 614 branches and 12 regional offices.
The bank undertook several strategic and technology-driven initiatives to enhance operational efficiency and customer experience. Workflow automation through an internal Online Approval System improved governance and operational processes. A state-of-the-art AI-enabled call center was established to enhance customer support. New Loan Origination and Loan Management Systems were implemented, and dormant accounts can now be activated through Video-based Customer Identification Process (V-CIP) without visiting branches. Enhancements to internet banking, including revised cooling periods and transaction limits, and online collection of EPF payments through net banking, were also implemented to improve convenience and security for customers.
These developments highlight TMB’s continued commitment to digital transformation, customer-centric growth, and sustainable banking practices, positioning the bank for strong performance in the coming fiscal year.