Profits Up Over 40% at IOB, Bank of Maharashtra and TMB: What the Q2 Bank Results Tell Us

The festive season has brought good news from the banking sector. Three banks, two of them headquartered in Tamil Nadu, reported their results for the quarter ended 30 September 2026 on Monday, and each one grew its net profit by more than 40% from a year ago. Chennai-based Indian Overseas Bank (IOB), Pune-based Bank of Maharashtra and Thoothukudi-based Tamilnad Mercantile Bank (TMB) all reported strong growth along with some of their cleanest loan books in years.

Indian Overseas Bank: the biggest profit jump

IOB led the pack on profit growth. Its net profit rose 55.95% to ₹1,912 crore for the July–September quarter, compared with ₹1,226 crore a year ago. Operating profit grew 25.67% to ₹3,016 crore, and net interest income, the difference between what the bank earns on loans and pays on deposits, rose 26.41% to ₹3,867 crore.

The Chennai lender also became more efficient. Its cost-to-income ratio improved by nearly five percentage points to 40.78%. Total business grew 22.05% to ₹7,53,078 crore, with advances up 24.35%. Loans to the retail, agriculture and MSME segments grew 34.51%, with retail lending alone up 33.77%. On asset quality, gross NPA fell to 1.19% and net NPA to 0.16%. IOB also recovered ₹647 crore from bad loans during the quarter, nearly three times the amount of fresh slippages. For the full first half of the year, its net profit rose 52.85% to ₹3,572 crore.

Bank of Maharashtra: the most profitable of the three

Bank of Maharashtra posted the largest profit in absolute terms. Net profit rose 41.42% to ₹2,310 crore from ₹1,633 crore, while operating profit grew 30.86% to ₹3,369 crore and net interest income rose 21.76% to ₹3,954 crore.

What stands out is how efficiently the bank is earning. Its return on assets reached 2.02% and return on equity 26.98%, while its cost-to-income ratio stood at 33.73%, the lowest of the three. Total business grew 25.16% to ₹7,05,766 crore, with gross advances up 29.61% and deposits up 21.50%. Its bad-loan figures are among the cleanest in the sector, with gross NPA at 1.25%, net NPA at just 0.12% and a provision coverage ratio of 98.53%, meaning the bank has set aside money for almost all of its bad loans.

Tamilnad Mercantile Bank: record growth for a 105-year-old bank

Thoothukudi's TMB, one of India's oldest private sector banks, may be the smallest of the three, but it had a landmark quarter. Total business grew 27.25% to ₹1,30,237 crore, the highest year-on-year growth since the bank's stock market listing. Net profit rose 42.09% to ₹451 crore from ₹318 crore, and net interest income jumped 35.17% to ₹807 crore, the fastest growth among the three banks.

Deposits rose 25.49% to ₹69,546 crore and advances grew 29.32% to ₹60,691 crore. TMB's gross NPA fell to 0.61%, its lowest in ten years, and net NPA to 0.14%. With a capital adequacy ratio of 32.39%, the bank has a large cushion to support future lending. It opened three new branches during the quarter and now has 631 branches across 17 states and 4 union territories.

MD and CEO Salee S Nair said the bank sees opportunities this festive season, particularly among traders and MSMEs who need loans to stock up on inventory and fund working capital, and that the bank's focus will be on growing while maintaining sound lending standards.

The common thread

Three patterns run through all three results. First, lending is growing fast, especially to retail customers, farmers and small businesses. Second, bad loans have fallen sharply, with all three banks reporting net NPAs below 0.2%. A few years ago, many public sector banks were struggling under heavy bad loans; today, their books look far healthier. Third, all three are well capitalised, which means they have room to keep lending.

For ordinary customers, healthier banks mean safer deposits and better access to credit. For small businesses heading into the festive and wedding season, strong lending appetite could make loans easier to get. And for Tamil Nadu, the strong showing of two home-grown banks, one in Chennai and one in Thoothukudi, is a welcome sign for the state's economy.

Sources: Quarterly results press releases filed by Indian Overseas Bank, Bank of Maharashtra and Tamilnad Mercantile Bank with BSE, 26 October 2026.

This article is for information only and is not investment advice.

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