TMB posts record ₹451-crore profit; braces for higher ECL provisioning

TMB has strengthened its chief information security officer’s team, appointed a data protection officer and partnered with IBM to bolster its security operations centre. | Photo Credit: The Hindu Tamilnad Mercantile Bank (TMB) reported its highest-ever quarterly net profit of ₹451.14 crore in the second quarter of FY27, registering a 42.09% year-on-year (YoY) increase on the back of strong core banking income and improved cost efficiency. However, the bank expects its provisioning requirements under the upcoming expected credit loss (ECL) framework to rise further as its balance sheet expands.Total business grew 27.25% YoY to ₹1.30 lakh crore in the quarter ended September 2026, marking its highest annual growth in 18 years, managing director and chief executive officer Salee Sukumaran Nair said.Net interest income rose 35.17% to ₹807.17 crore, while operating profit increased 41.80% to ₹641.55 crore. “The net profit is the highest ever,” Mr. Nair said, attributing the performance to robust net interest income, business growth and cost control. The cost-to-income ratio improved to 38.28% from 44.80% a year earlier.ECL provisioningTMB estimated its additional provisioning requirement under the ECL framework at ₹385 crore as of September 30, against provisions of ₹304.24 crore already available. The requirement is expected to increase by March 2027 as lending and the overall balance sheet expand.The framework is scheduled to take effect on April 1, 2027. The bank began preparing for the transition by providing for its Special Mention Account (SMA)-1 and SMA-2 exposures in line with ECL norms during the September quarter. SMAs represent loans showing early repayment stress before turning into non-performing assets.The available provisions comprise ₹54.24 crore in upfront ECL provisions and ₹250 crore in existing contingency provisions. TMB had also fully provided for its stressed non-fund-based portfolio in the previous quarter.Growth and cybersecurityThe bank expects advances to grow over 22% and deposits more than 20% in FY27. Advances rose 29.32% YoY to ₹60,691 crore at September-end, while deposits increased 25.49% to ₹69,546 crore.TMB’s IT spending is estimated at ₹280 crore this financial year, with around 20% earmarked for cybersecurity. The bank has strengthened its chief information security officer’s team, appointed a data protection officer and partnered with IBM to bolster its security operations centre. It is also testing and retesting application programming interfaces (APIs).The cybersecurity measures were outlined in response to a question on the recent data exposure incident involving State Bank of India. Published - October 26, 2026 05:23 pm IST