Tamilnad Mercantile Bank to open branch in Colombo

Sunday, 10 October 2010 23:23 - - {{hitsCtrl.values.hits}}

Business Standard, India: Tuticorin-based Tamilnad Mercantile Bank (TMB) is planning its foray abroad by opening branches in Sri Lanka, Malaysia and Singapore.

A.K. Jagannathan, who recently took over as Managing Director and Chief Executive Officer of the bank, said his immediate focus would be on expanding the bank’s operations in India and entering the neighbouring countries where the Nadar community presence is significant. These include Singapore, Colombo in Sri Lanka, and an unspecified location in Malaysia.

The bank is looking to open a branch in Colombo first and then enter Singapore and Malaysia. “We would look to complete the process in the next one year, after seeking approval from Reserve Bank of India,” Jagannathan said.

“Given our strong balance sheet and strong community affiliation, we want to expand into the overseas markets, where there is strong ethnic population,” said Jagannathan.

TMB, which was founded in 1921, currently gets over 60 percent of its business and 90 percent of its work force coming from its community, called the Nadars. The bank has set a business target of Rs 50,000 crore by 2013 and is mulling a record dividend of Rs. 1,000 per share for 2009-10. In India, the bank is planning to add 20 branches before March 2011 and would also apply for licences for 100 more branches and to recruit 100 clerks. At present, the bank has 217 branches across the country.

“We are also planning for a record dividend of Rs 1,000 per share for fiscal 2010,” said Jagannathan. This follows a record dividend of Rs 500 per share for fiscal 2008 and Rs 600 per share in fiscal 2009.

“We are not mulling initial public offering now and would be focusing on internal generation and bonds for funds,” he added.

The current cash reserves with the bank is Rs 1,148 crore and additional profits generated would be sufficient to meet its business target. After three years, the bank might require capital which would be raised through Tier-I and Tier-II means.