Are T N Merc. Bank latest results good or bad?
Tamilnad Mercantile Bank's latest results show mixed performance: while it achieved record interest earnings and reduced NPAs, its net profit declined by 2.78%, raising concerns about profitability. The improved capital adequacy ratio indicates a stronger financial position, but reliance on non-operating income may affect sustainability.
Tamilnad Mercantile Bank has reported its financial results for the quarter ending March 2025, highlighting several operational trends. The bank achieved its highest interest earned in the last five quarters at Rs 1,341.68 crore, reflecting a positive sales trend with a quarter-on-quarter growth of 0.8%. Additionally, the bank's gross non-performing assets (NPA) have reached a low of 1.25%, and the net NPA stands at 0.36%, both marking the lowest levels in the past five quarters, indicating a reduction in stressed loans.However, the bank's net profit saw a decline of 2.78% compared to the previous quarter, which may raise concerns regarding its profitability. Furthermore, a significant portion of the bank's profit before tax, 51.81%, is derived from non-operating income, which could pose challenges for the sustainability of its business model.
The capital adequacy ratio (CAR) has improved to 32.71%, suggesting a stronger capital base relative to its risk assets. Overall, the company saw an adjustment in its evaluation based on these results.
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