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

Jul 26 2025 07:13 PM IST
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Tamilnad Mercantile Bank's latest results are generally positive, with the lowest Gross NPA at 1.25% and record quarterly interest earnings of Rs 1,341.68 crore. However, concerns about the sustainability of income sources due to high Non-Operating Income (51.81% of PBT) remain.
Tamilnad Mercantile Bank has reported its financial results for the quarter ending March 2025, highlighting several operational trends. The bank achieved its lowest Gross Non-Performing Assets (NPA) at 1.25% over the last five quarters, along with a Net NPA of 0.36%, which has shown a consistent decline each quarter. This trend indicates a reduction in the proportion of stressed loans, which is a positive sign for the bank's asset quality.

Additionally, the bank recorded its highest quarterly interest earnings at Rs 1,341.68 crore, reflecting a positive trend in interest income. The Capital Adequacy Ratio (CAR) also reached a peak of 32.71%, suggesting an enhancement in the bank's capital base relative to its risk assets.

However, it is noteworthy that Non-Operating Income accounted for 51.81% of the Profit Before Tax (PBT), which raises questions about the sustainability of the bank's income sources.

In terms of evaluation, the company saw an adjustment in its evaluation over the last three months. The latest quarterly results indicate a growth in interest earned by 3.32% and a net profit increase of 4.45% compared to the previous quarter. Operating profit also showed a slight growth of 2.04%. Overall, while there are positive developments in asset quality and earnings, concerns regarding income sustainability remain.
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