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Tamilnad Mercantile Bank says that after a period of lull, robust growth is coming back this fiscal year for the private sector lender. The 11.4 per cent growth in overall business is our highest in a decade, at 9.3 per cent y-o-y growth, CASA is also showing robust growth and momentum of advances, too, has picked up, said Salee S Nair, MD & CEO, Tamilnad Mercantile Bank. “We expect to close FY26 with a 14-15 per cent growth in advances and a 12-13 per cent growth in deposits. This is significantly higher than the business growth of 9-10 per cent we posted last fiscal year,” he added. “Our guidance was to be aligned with the market growth in FY26, but in H1FY26, we can say we will be above the industry growth,” said Nair. On the CASA front, the bank credits the Transaction Business Group (TBG), implemented in Q4FY25, and Elite Service Group (ESG), set up in Q1FY26, which are taking root. These two initiatives have helped increase the size of current account, government account and other deposits, said Nair. In the case of current accounts, new customer base is up by 60 per cent y-o-y in Q2FY26, said the MD. Net Interest Margin (NIM) at 3.83 per cent is down 42 bps y-o-y, and was impacted largely by the June REPO rate cut. “50 per cent of our advances are REPO-linked. 66 per cent of our deposits is in the 1-2 year bucket, and so it takes time to get repriced. We anticipate NIM to improve in the subsequent quarters,” said Nair. MSME loan book Despite RAM segment making up 94 per cent of its total advances portfolio, the lender says it has not seen much stress on its MSME loan book due to the impact of US tariffs. Export credit is just about 1 per cent of our overall credit portfolio, said Nair. The textile industry is definitely worried, and the sector is watching for and looking forward to the US tariffs to get resolved quickly, he added. On the impact of GST cut on consumption, Nair said there has been a slight uptick in auto loans, but it is unclear if it’s the impact of GST or just rebound of pent-up demand. On the home loans front, the bank is tapping the builder tie-ups to increase turnaround time on housing loans. TMB now has 600 branches nationally and it opened nine new branches in Q2FY26. Published on October 28, 2025
