TMB will continue its focus on retail, agriculture and MSME RAM segments, retaining them for 80 -- 85 per cent of its total loan portfolio.
The RBI of India lifted its three-year ban in October of last year, and the Thoothukudi-based bank will open 25 new branches by March this year.
TMB is one of India's oldest private sector banks, founded over 100 years ago in 1921 as Nadar Bank and catering to micro, small and medium enterprises, as well as retail and agricultural customers. The share of RAM in its portfolio was 89 per cent in the third quarter of the current financial year, up from 87 per cent in the July to September period.
The RAM segment has a number of advantages, as my risk is diversified. For 100 years, this bank is well tuned with MSMEs and its trading. "We understand the nuances of MSMEs very well and the MSME units understand the bank," said S Krishnan, managing director and chief executive officer of the bank.
It may be the same as in the range of 80 -- 85 per cent going forward. We will also take up the corporate segment. He said the focus will continue to be on RAM.
The bank has 511 branches, of which two started after an initial public offering and the lifting of its ban. The ban was introduced in 2016 when TMB shareholders decided to raise its authorized share capital to 500 crore. In June 2019, the TMB did not raise its subscribed capital to at least half of the authorized capital as required, citing a number of restrictions. The restriction on branch expansion was lifted in March 2021, but the restriction on branch expansion continued until October 2022.
We got the approval by the end of the last quarter. We started two more branches immediately after that, and now the plan is to add 25 more branches across the country by the end of March. We will have our first footprint in North East India very soon, Krishnan said.
TMB is working on expansion plans for the next financial year and will approach its board with a roadmap. Krishnan said that the bank is focused on phygital mode - services combining physical and digital features - and it will soon launch a tablet banking facility for customers. The second phase of mobile banking is expected to be in place by the first week of February. The bank will have branches wherever there is potential business.
In the third quarter of the financial year, TMB posted a 38 per cent increase in net profit to Rs 280 crore, compared to Rs 203 crore in October to December quarter last year. There were multiple parameters that led to it, if you look at growth. One of the drivers of this growth is NIM, which is one of the best in the industry. Krishnan said that they have been able to contain the slippages, and also make recovery, which has resulted in a very low credit cost.