TMB Q4 net remains flat on employee wage cost

Tamilnad Mercantile Bank Ltd. (TMB) reports flat net profit due to employee costs and NPA provisions, with NII growth.

Tamilnad Mercantile Bank Ltd. (TMB) reported fourth-quarter standalone net profit remained flat at ₹253 crore from the year-earlier period due to employee benefit cost and advance provisioning for a non-performing asset (NPA).

“When compared with the year-earlier quarter, the net profit might look flat, but we have made a provision of ₹28 crore towards possible salary increase,” MD & CEO S. Krishnan told journalists.

Stating that the lender was not party to IBA wage settlement, Mr. Krishnan said that TMB was given a charter of demands for wage increase during the first week of April and the bank had provided ₹69 crore so far. Besides, ₹13-14 crore had been set aside for a future NPA.

Net Interest Income (NII) grew to ₹567 crore from ₹527 crore. Net interest margin contracted to 4.24% from 4.34%. Net profit margin declined to 17.85% from 20.18%.

Gross non-performing asset as a percentage of the total advances rose to 1.44% from 1.39%, while net NPA jumped to 0.85% from 0.62%. Retail, Agriculture and MSME segment increased to 91% from 87%.

Provision Coverage Ratio slumped to 87.52% from 90.90%. Capital adequacy ratio stood at 29.37% (26.26%).

The CEO said that the slippages declined to ₹59.35 crore from ₹70 crore, while cash recovery and upgradation was ₹80 crore against ₹41 crore. Going forward, slippages are set to decline further.