Are T N Merc. Bank latest results good or bad?

Tamilnad Mercantile Bank has reported its financial results for the quarter ending March 2025, showcasing several operational trends. The bank achieved its highest interest earned in the last five quarters, amounting to Rs 1,341.68 crore, indicating a positive trend in sales. Additionally, the gross non-performing assets (NPA) have reached a low of 1.25%, while the net NPA stands at 0.36%, both representing the lowest levels in the past five quarters. This suggests a decline in the proportion of stressed loans, which is a favorable development for the bank's asset quality.
However, the bank's net profit saw a decline of 2.78% compared to the previous quarter, which raises some concerns regarding its profitability. Furthermore, a significant portion of the bank's profit before tax, approximately 51.81%, is derived from non-operating income, which may pose challenges to the sustainability of its business model.

The capital adequacy ratio (CAR) has improved to 32.71%, reflecting a stronger capital base relative to its risk assets. Overall, while Tamilnad Mercantile Bank has demonstrated positive trends in interest earnings and asset quality, it faces challenges in profitability and reliance on non-operating income. Additionally, the company saw an adjustment in its evaluation during this period.