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TMB eyes home advantage in Thoothukudi's investment wave; to tap MSMEs

Tamilnad Mercantile Bank (TMB) has said that, as a local bank, it is betting big on tapping more salary accounts and the micro, small, and medium enterprises (MSME) segment lending opportunities, as Thoothukudi is witnessing a boom in investments to the tune of over Rs 1 trillion, driven by global majors like Vietnam's electric vehicle maker VinFast and Singapore's Sembcorp. The Thoothukudi-based bank has maintained its business growth outlook of 14 per cent for the current financial year, owing to its growth initiatives in the last year, including technology upgrades. The bank said that its focus area will be the Retail, Agriculture, and MSME (RAM) segment, as it accounts for 93 per cent of its total advances. Including VinFast and Sembcorp, Thoothukudi is expected to witness investments to the tune of Rs 1 trillion in the next few years. The bank's strategy is to attract salary business, in addition to developing a strong footprint in the supplier ecosystem of large players, which mainly includes MSMEs. "Action in Thoothukudi is something that we will certainly try and leverage to our benefit as the hometown bank in Thoothukudi. Not just salary accounts. We are also looking to re-establish our footprint in the MSME area. That is where I see a lot of potential for CASA," said Salee S Nair, managing director and chief executive officer of TMB. He added that the bank has increased its engagement with Thoothukudi port too and has also been enrolled in the National Logistics Portal recently. Nair said that during the second half of the financial year, the bank will start reaping benefits from initiatives like establishing MSME hubs, expanding its branch network, and improving technology, among others. After Nair took charge in August 2024, the bank roped in global consultancy firm McKinsey to develop its MSME strategy, mainly to bring in innovative solutions and improved lending capabilities. Its transformation initiatives also include the revamping of CRM systems, upgrading internet banking, and giving more focus to the gold loans portfolio. 'We expect the second half of the current fiscal to show the impact of all our initiatives. We may see over 10 per cent growth in deposits and 15 per cent growth in advances,' he said. The bank posted its highest-ever quarterly net profit of Rs 304.9 crore during the first quarter of the financial year 2025-26, up 6 per cent from Rs 287.3 crore during the April to June quarter of the last financial year. "We will look at corporates seriously after we put in place a system, both in terms of skill set and technology improvement," he added. At present, the corporate segment contributes to around 7 per cent of its advances. The bank's gross non-performing assets (NPA) improved by 22 basis points to 1.22 per cent from 1.44 per cent. Its net NPA also decreased to 0.33 per cent from 0.65 per cent, improving by 32 basis points during the first quarter of FY26. TMB's deposits increased to Rs 53,803 crore during the period, from Rs 49,188 crore last year. The advance level also increased to Rs 45,120 crore with a growth rate of 10.44 per cent on a year-on-year basis. The bank said that an increase of 4.5 per cent in CASA during the quarter is a positive sign. Nair mentioned that the bank is putting a lot of effort into improving its CASA. This includes appointing relationship managers to attract more current accounts and setting up an elite services group in Q1 to ensure personalised end-to-end service in select branches for high-value customers.