The board of Tuticorin-headquartered Tamilnad Mercantile Bank (TMB) has approved an interim dividend of Rs 900 per share of Rs 10 each, which is the highest in terms of percentage.
Bank’s managing director and chief executive officer AK Jagannathan said this would translate to around Rs 25 crore. He was speaking after launching its mobile banking solution.
“This is the first time in the history of the bank that such a big interim dividend is being paid and it will be one of the highest in the banking industry in the country,” said Jagannathan.
The board had approved to pay the dividend at the rate of Rs 750 per share for 2008-2009 and Rs 1,000 a share the following year.
“We could not give this to shareholders, since two annual general meetings, for 2009-10 and 2010-11, were not held, due to legal issues. As soon the AGMs are over the money will be given to the shareholders,” said Jagannathan.
It may be noted that the AGMs were not held due to issues around shareholding and ownership of the bank between the two brothers – Sivanthi Adityan and Ramachandran Adityan, who opposed the entry of foreign investors consortium led by former PepsiCo head Ramesh Vangal.
Also Read
The investors in this group include former McKinsey MD Rajat Gupta, Ravi S Trehan, Vector Program and Swiss Re Investors, among others. While there were reports that Vangal exited from the bank, Jagannathan refused to speak about the ownership and investors. The matter is in the court now.
“We are hoping that all the issues will be resolved soon and I don’t want speak about any individual or group investors,” he said.
The bank had to hold back major decisions including its plan to go for an initial public offering (IPO). “With the next three years growth, we can manage with our cash generation internally,” he said.
The other decision, which is awaiting shareholders' approval, is to expand footprint in countries like Sri Lanka, Malaysia and Australia. “Our NRI cell has seen a growth of around 32 per cent to Rs 183 crore. We will approach the Reserve Bank of India for licence to open branches in these countries once the ownership issue is resolved.”
Jagannathan said year-on-year the bank grew 26 per cent and between April and December during the current fiscal, deposits grew 15 per cent, while advances 19 per cent. By the end of the current fiscal, the bank will touch a total business of Rs 31,000 crore and Rs 50,000 crore by 2014, including deposits of Rs 28,000 crore and advances of Rs 22,000 crore.