State Bank of India (SBI), India’s largest public sector lender, reported a robust 12% year-on-year increase in standalone net profit for the first quarter of FY26, reaching ₹19,160 crore. The figure surpassed market expectations of ₹17,095 crore, driven by operational efficiency, improved asset quality, and strong growth in retail and SME lending.
Key Financial Highlights
| Metric | Q1 FY26 | Q1 FY25 | YoY Change |
|---|---|---|---|
| Net Profit | ₹19,160 crore | ₹17,035 crore | +12% |
| Total Income | ₹1.35 lakh crore | ₹1.22 lakh crore | +10.31% |
| Net Interest Income (NII) | ₹41,072 crore | ₹41,125 crore | -0.13% |
| Operating Profit | ₹30,544 crore | ₹26,449 crore | +15.49% |
| Non-Interest Income | ₹17,346 crore | — | +55.40% |
| Net Interest Margin (NIM) | 2.90% | 3.22% | -32 bps |
Asset Quality & Lending Performance
- Gross NPA Ratio: Improved to 1.83% from 2.21% YoY
- Net NPA Ratio: Fell to 0.47% from 0.57%
- Provision Coverage Ratio (PCR): 74.49% (excluding additional provisions of ₹30,345 crore)
- Slippage Ratio: Moderated to 0.75%
- Credit Cost: Stable at 0.47%
Advances Growth
| Segment | YoY Growth (%) | Value (₹ lakh crore) |
|---|---|---|
| Retail Personal | +13% | ₹15.39 |
| Agriculture | +13% | ₹3.50 |
| SME | +19% | — |
| Corporate | +5.7% | — |
| Total Advances | +12% | ₹42.54 |
Deposits
- Total Deposits: ₹54.73 lakh crore (+12% YoY)
- CASA Ratio: 39.36%
- Digital Traction: 66% of new savings accounts opened via YONO; alternate channels accounted for 98.6% of total transactions
Profit Drivers & Challenges
Positive Drivers
- Strong growth in non-interest income
- Controlled operating expenses
- Stable asset quality and provisioning discipline
- Continued traction in retail and SME lending
Headwinds
- Marginal decline in NII due to rising interest expenses
- NIM compression amid rising deposit costs and rate cycle reversal
- Flat performance in corporate lending
Market Reaction
SBI shares traded 0.75% lower at ₹799.25 as of 1:30 PM, reflecting cautious investor sentiment despite strong earnings. Analysts expect margin pressure to persist but remain optimistic about SBI’s retail and digital growth trajectory.
Conclusion
SBI’s Q1 FY26 performance underscores its resilience and operational strength in a challenging macro environment. While margin pressures remain a concern, the bank’s diversified lending portfolio, improving asset quality, and digital momentum position it well for sustained growth.
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