Tamilnad Mercantile Bank Q2 profit hits record ₹451 crore, business growth highest in 18 years

Tamilnad Mercantile Bank reported its highest-ever quarterly net profit in the September quarter, supported by strong growth in net interest income and continued improvement in asset quality. The lender also recorded its fastest year-on-year total business growth in 18 years

, according to its Q2 FY27 performance update.

Net profit rose 42% year on year to ₹451.1 crore, compared with ₹317.5 crore in the corresponding quarter last year. Net interest income (NII), the difference between interest earned and interest paid, increased 35.2% to ₹807.2 crore from ₹597 crore a year earlier.

Asset quality improved further during the quarter. Gross non-performing assets (NPAs) declined to 0.61% from 0.69% in the June quarter, while net NPAs fell to 0.14% from 0.17%. The bank also said credit costs remained contained and that its special mention account (SMA) I and II exposures were fully provided for under expected credit loss (ECL) norms.

The bank reported a return on equity (ROE) of 16.92% and quarterly earnings per share of ₹28.49. Capital adequacy stood at 32.39%, while shareholders’ funds accounted for 12.53% of the balance sheet.

Total business grows 27%, fastest pace in 18 years

Tamilnad Mercantile Bank’s total business grew 27.25% year on year, around three times its 10-year compound annual growth rate of 9.41%. The bank described this as its highest year-on-year growth in 18 years and said it was growing more than eight percentage points faster than the industry.

Its balance sheet expanded 24.49% year on year, reflecting growth in the bank’s overall operations.

Deposit mobilisation also remained a focus. Non-callable deposits increased by ₹3,075 crore in the first half of FY27, rising 56.34% from March 31, 2026. These deposits accounted for 40.62% of the incremental growth in term deposits during the period.

Foreign currency deposits also increased. As of September 30, 2026, FCNR(B) deposits stood at ₹1,055 crore, up 47.14% year on year. The bank added that it had raised $51.94 million under the Reserve Bank of India’s special forex swap facility.

Following the results announcement, shares of Tamilnad Mercantile Bank were trading at ₹789.50 on the BSE at 2.47 pm IST on October 26, down 1.42%, or ₹11.35, for the day.