RATING

RECOMMENDATION

Neutral

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  • Available in Depository:

  • NSDL

  • CDSL

  • Available for Investment:

  • Primary

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RATING

RECOMMENDATION

Neutral

Business Type

Traditional Business

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 %

  • 8.55%

    1 Year

  • 17.59%

    3 Year

  • 9.93%

    5 Year

Interest income grew in FY22, even as commission, exchange, and brokerage climbed due to a rise in guarantee commission, visa debit card annual fee, and a net increase in revenue on master credit cards. While profit on investment sales grew owing to the sale of HTM and government securities.

During the year, the Bank generated a turnover of Rs. 246468.88 crore in trading activities, resulting in a net profit of  Rs.72.36 crores, compared to Rs.156.90 crores the previous year. During the year, the Bank sold Rs.2999.58 crore worth of securities from the 'Held to Maturity' category.


Tamilnad Mercantile Bank Net Profit Growth(PAT)

Growth in %

  • 36.23%

    1 Year

  • 47.03%

    3 Year

  • 21.02%

    5 Year

The excellent operational efficiency and prudent cost management are principally responsible for the progressive improvement in Profit after Tax.  The company's interbank borrowings grew due to an increase in the Long Term Repo Operation (LTRO), which was repaid subsequently. Other interest expenses grew as borrowing expanded, particularly collateralized borrowing and lending obligation (CBLO) borrowings. Despite this, the company's profit has improved overall as an increase in income has effectively compensated for an increase in costs. 

The investment portfolio's average realized yield was 6.74% for the year, compared to 6.88% the previous year. The fall in portfolio yield was due to investments at current yield levels after steep decline in Yields during the year and comparatively lower returns from investments like CDs and MF due to continuous rate cut by RBI.


Tamilnad Mercantile Bank EPS Growth

Growth in %

  • 36.21%

    1 Year

  • 47.04%

    3 Year

  • 21.02%

    5 Year

In FY22, the company's EPS climbed by 36.2%, and the bank is attempting to develop plans. The bank is working on the PSLCGs(Priority Sector Lending) area, and as a result of the board meeting's permission, the bank has sold PSLCs worth Rs.6.412,50 crore, generating an income of Rs.7141 crores. PSLC-Small & Marginal Farmers was sold for Rs. 1970 crores, PSLC-Agriculture was sold for Rs.941 crores, PSLC-Micro Enterprises was sold for Rs.2971.50 crores, and PSLC-General was sold for Rs.530 crores as of 31/03/2022.

  • Tamilnad Mercantile Bank Book Value Growth

Growth in %

  • 15.84%

    1 Year

  • 14.24%

    2 Year

  • 10.59%

    4 Year

Book value of the company is continuously increasing owing to rise in reserves and surplus on the account of profit transferred from P&L account.

Tamilnad Mercantile Bank EBITDA Growth

Growth in %

  • 34.13%

    1 Year

  • 37.57%

    3 Year

  • 19.09%

    5 Year

EBITDA has seen a huge jump due to a recent increase in interest and investment income. While insurance expenses increased by 9.47% primarily due to an increase in DICGC insurance premium. Other expenditures also increased by 13.4% in Fiscal 2022 primarily on account of a loan loss provision of ₹704.86. Despite an increase in these expenses, the company has shown strong operating efficiency, which resulted in improvement in FY22.

Tamilnad Mercantile Bank Operating Profit Growth

Growth in %

  • 36.23%

    1 Year

  • 47.03%

    3 Year

  • 21.02%

    5 Year


Tamilnad Mercantile Bank Asset Growth

Growth in %

  • 11.22%

    1 Year

  • 9.25%

    3 Year

  • 7.40%

    5 Year

The rise was mostly due to an increase in advances by way of overdraft, repayable loan, and government securities investments. The corporation has effectively managed its expansion in assets, as seen by the significant increase in income owing to interest on investments. As of March 22, the Bank's net investments were Rs.13,035.47 crore, up from Rs.11,703.21 crore at the end of the previous year. The bank's investment-to-deposit ratio was 29.01% at the end of the previous year, compared to 28.57% at the end of the previous year.

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 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 1.69% compared to 3.44% last year. Overall private banks witnessed GNPA decline of ~125 bps in Fiscal 2021 while for 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 2022, bank reported a low NNPA of 0.94% which was 1.98% in FY21. This is a positive sign it is expected to reduce further with the improvement in economy this rate will further decrease. 

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, 2022 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 the Bank.

  • 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 FY22, TMB further increased its money with other banks which is a major part of liquid cash, due to improvement in economic condition. Due to the war-like situation that exists among countries, the corporation lowered the amount invested outside India from Rs.388 crore to Rs.291 crore in current financial year.

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 8% 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 to secure its depositors money.