NIM pressure leads to flat Q3 profit at TMB

Kolkata: Tamilnad Mercantile Bank (TMB) reported a 1.4% year-on-year growth in December quarter net profit, thanks to sharply lower provisions though operating profit fell due to pressure on the net interest margin.

Net profit at the old private sector lender rose to ₹284 crore in the three months ended December 31 from ₹280 crore a year earlier. Operating profit declined 8.6% to ₹370 crore from ₹405 crore. Managing director S Krishnan attributed the drop in operating profit to the higher cost of deposits and an additional provision of ₹14 crore in the quarter towards a revision of wages in the future.

Net interest margin fell to 4.08% in the December quarter from 4.56% a year earlier.


"There will be pressure on margin (in the coming quarter) as deposit rates are heading northwards," said Krishnan, who resigned last September but will continue to head the bank till a successor is found.

Total provisions in the December quarter fell to ₹2.4 crore from ₹33 crore a year earlier. The gross non-performing assets ratio remained stable at 1.69% compared with 1.7% earlier.