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RATING

RECOMMENDATION

Neutral

Business Type

Traditional Business

  • Tamilnad Mercantile Bank Growth

Discover and get info on Tamilnad Mercantile Bank stock price before buying, selling and investing - Read our Research report on Tamilnad Mercantile Bank IPO For Information like - Management, Business Model, Financials, Growth, Valuations, Funding Rounds, News.

Tamilnad Mercantile Bank Revenue Growth

Growth in %

  • 25.01%

    1 Year

  • 18.18%

    3 Year

  • 8.61%

    5 Year

In FY21 company has seen increase in its interest income even commission, exchange and brokerage increased on account of increase in commission on guarantee, visa debit card annual fee, and a net increase in commission on master credit cards. While profit on sale of investments also increased on account of sale of HTM and government securities, partially offset by loss on sale of investments due to market fluctuation during the normal course of business.

Interest on accounts with the RBI and other inter-bank funds, on the other hand, fell due to lower bank balances and withdrawals of money for investment/credit deployment. Nonetheless, the company's overall performance has improved.

Tamilnad Mercantile Bank Net Profit Growth(PAT)

Growth in %

  • 47.99%

    1 Year

  • 39.57%

    3 Year

  • 8.45%

    5 Year

The gradual increase in Profit after tax is primarily backed by the strong operational efficiency and conservative cost management. 

Inter-bank borrowings of the company increased due to increase in Long term Repo Operation(LTRO) which was repaid in September'20. Following a rise in borrowing, notably collateralized borrowing and lending obligation (CBLO) borrowings, other interest expenditures increased by 335.22 percent.

Rent, taxes and lighting increased by 1.63% in FY21 primarily for the rent and lighting in respect of 24 new E-Lobbies, on the other hand advertisement and publicity decreased as company undertook fewer advertising activities on account of COVID-19.

Still company has seen overall improvement in its profit as increase in incomes efficiently compensated the increase in expenses.

Tamilnad Mercantile Bank EPS Growth

Growth in %

  • 47.99%

    1 Year

  • 39.58%

    3 Year

  • 8.45%

    5 Year

  • Tamilnad Mercantile Bank Book Value Growth

Growth in %

  • 12.66%

    1 Year

  • 10.40%

    2 Year

  • 8.89%

    3 Year

Book value of the company is continuously increasing owing to rise in reserves and surplus. IN FY21, due to pendemic and market volatility RBI increased CRR and SLR rates for banks where CRR saw an increase from around 3% to 4%.

Tamilnad Mercantile Bank EBITDA Growth

Growth in %

  • 42.46%

    1 Year

  • 34.57%

    3 Year

  • 7.91%

    5 Year

EBITDA has seen a huge jump due to recent increase in interest and investment income. While insurance expense increased by 29.65% primarily due to an increase in DICGC insurance premium. 

Other expenditure also increased by 2.93% in Fiscal 2021 primarily on account of a provision of ₹ 169.90 million created for the penalty levied by the Enforcement Directorate, which was partially offset by a reduction in travelling expenses and outsourcing of ATM transactions. Despite increase in these expenses company has shown strong operating efficiency, which resulted in improvement in performance in 2nd half of FY21.

Tamilnad Mercantile Bank Operating Profit Growth

Growth in %

  • 47.99%

    1 Year

  • 39.57%

    3 Year

  • 8.45%

    5 Year

Due to covid there were certain restrictions on the company which brought some hurdles in managing the operations. Provisions and contingencies increased by 1.97% due to increase in provision for taxation and the additional provision made for standard assets on account of the COVID-19 pandemic. In accordance with RBI guidelines, bank was also required to make provisions at the rate of 10.00% of the outstanding advances over two quarters in respect of such borrower accounts where asset classification benefit has been availed, for which ₹ 70.10 million was provided as on June 30, 2020. In spite of these provisions company's performance was optimum.

Tamilnad Mercantile Bank Asset Growth

Growth in %

  • 11.15%

    1 Year

  • 7.82%

    3 Year

  • 6.15%

    5 Year

Total assets increased by 11.15% from ₹ 427,587.97 million as of March 31, 2020 to ₹ 475,271.69 million as of March 31, 2021. This increase was primarily due to an increase in advances by the medium of overdraft, loan repayable and investments in government securities. Company has efficiently managed its increase in investments, as we can see a mojor growth in income of company due to interest on investments.

Tamilnad Mercantile Bank Cash Flow from Financing

Growth in %

  • NA

    1 Year

  • NA

    3 Year

  • NA

    5 Year


  • Tamilnad Mercantile Bank Sector Specific Ratios

Tamilnad Mercantile Bank CASA

TMB's CASA ratio has increase by around 16% in last 2 years. Its CASA portfolio is diversified and has low concentration with 5.07% of deposits from top 20 deposit holders and 6.49% deposits from top 50 depositors as of March 31,2021. They have followed a segmental approach to grow CASA ratio by revamping existing CASA products and introducing of new products like TASC (Trust, Association, Society, Club) accounts, CASA accounts of central and state government schemes with Public Financial Management System facility enabled. This has significantly affected CASA of the company positively.


Tamilnad Mercantile Bank Capital Adquency Ratio

TMB is subject to the CRAR requirements prescribed by the RBI. As of March 31, 2021 they were required to maintain a minimum CRAR of 10.875%, based on the total capital to risk-weighted assets, which includes the minimum requirement of 2.5% CCB as prescribed by the RBI. If they fail to meet capital adequacy requirements, RBI may take certain actions, whereas company is effectively managing it and increasing it every year.

In fact as company has filed its DRHP comprising both fresh issue and offer for sale, the main objective of the fresh issue is to meet the capital adequacy requirements of our Bank.

Tamilnad Mercantile Bank Gross NPA

The decrease in GNPA is due to the strict framework introduced by RBI with ring-fencing and saving banking sector from a further rise in NPAs.

TMB reported a low GNPA of 3.44% compared to 4.63% for its peers (median). Overall private banks witnessed GNPA decline of ~125 bps in Fiscal 2021 while In Fiscal 2022, the GNPA of these banks is expected to increase ~100 bps mainly in their retail portfolio.

Tamilnad Mercantile Bank Net NPA

TMB's risk management processes are aimed at maximizing bank’s risk adjusted rate of return by maintaining credit exposure within acceptable parameters. In Fiscal 2021, bank reported a low NNPA of 1.98% while its peers clocked a median of 2.63%. This is a positive sign but rate is still high then previous years, it is expected that with the improvement in economy this rate will further decrease. 

  • Tamilnad Mercantile Bank Solvency Ratios

Tamilnad Mercantile Bank D/E Ratio

Tamilnad Mercantile Bank Current Ratio

For a bank, optimum amount of cash in hand is necessary, to settle all the claims in hard times. In FY21, TMB has decreased its money with other banks which is a major part of liquid cash, due to pertaining risk in the market.

This decrease was primarily driven by a decrease in balances in India with banks in current accounts and other deposits and money at call and short notice with banks which was partially offset by an increase in balances with banks outside India.

Tamilnad Mercantile Bank Quick Ratio

Tamilnad Mercantile Bank Interest Coverage Ratio

  • Tamilnad Mercantile Bank Operating Efficiency

TMB's diversified portfolio, increasing market penetration across rural and semi-urban regions and focus on asset quality has enabled them to ensure consistent financial performance over the years. They also focused on increasing digital footprint which in turn has improved their operational processes that has reduced costs and resulted in improving the profitability of the bank. Due to their efficiency and strategies their margin ratios are constantly growing.

Tamilnad Mercantile Bank Operating Profit EBIT Margin(OPM)

Tamilnad Mercantile Bank Profit Before Tax Margin (PBT Margin)

Tamilnad Mercantile Bank Profit After Tax Margin (PAT Margin)

  • Tamilnad Mercantile Bank Profitablity Ratio

Tamilnad Mercantile Bank Return on Equity(RoE)

Increase in interest income resulting from a 12% increase in loans and reduced cost to income ratio lead to increase in returns. While equity of the company has also increased as due to RBI guidelines related to increase in CRR, company had to increase their reserves. Despite that company is performing better every year, and giving more returns to its shareholders.

Tamilnad Mercantile Bank Return to Assets (RoA)

TMB is continuously investing in technology as a means of improving customers’ experience, offering them a range of products tailored to their financial needs, which is making their asset base stronger.

Also company looking to improve asset quality by focusing on secured advances and high loan to value ratio. Apart from continuously monitoring loans, they conduct various audit processes such as stock audits on working capital facilities, with exposure of ₹ 30.00 million or above in both fund and non-fund based accounts. All of this is making their ROA base more stronger and less riskier. 

  • Tamilnad Mercantile Bank Valuation Ratios

Tamilnad Mercantile Bank Dividend Yield

Tamilnad Mercantile Bank Earning Yield

  • Tamilnad Mercantile Bank Regulatory Ratios

Tamilnad Mercantile Bank CAR

Tamilnad Mercantile Bank Tier 1

Tamilnad Mercantile Bank Tier 2

  • Tamilnad Mercantile Bank NBFC's Ratios

Tamilnad Mercantile Bank Tier 1 Capital Ratio

Company is maintaining Tier 1 ratio well above the RBI standard from last 4 years. Even its Tier 1 ratio ids above than RBI guilelines for CAR, which makes it safe and reduces the risk of insolvency.

Tamilnad Mercantile Bank Tier 2 Capital Ratio

As per RBI, Tier 2 capital should be less than Tier 1, which is beautifully maintained by the company. Even their CAR which is the overall shows capital adequacy is well above the mandatory requirement.

Tamilnad Mercantile Bank Tangibe Book Value

Tangible book value of the company is constantly increasing due to increase in statutory and capital reserves of the company. Company increased its reserves due to market volatilty during pandemic to secure its depositors money.