State Bank of India (SBI), the country's largest lender, reported a street-beating June quarter performance, posting its highest-ever quarterly net profit while improving asset quality to its best level in over two decades. The bank also crossed the Rs 110-lakh-crore business milestone during the quarter.
Net profit rose 10.23% year-on-year to a record Rs21,121 crore, driven by stronger margins and an 18.63% growth in advances, which boosted interest income. Operating profit increased 9.77% to Rs 33,529 crore, while net interest income (NII) rose 14.88% to Rs 46,992 crore.
The performance was supported by a domestic net interest margin (NIM) of 3%, up 7 basis points, while the overall bank NIM improved 5 bps to 2.86%.
The record earnings came despite a sharp 70% decline in treasury income to around Rs 2,500 crore after the bank unwound its large net open foreign exchange position following the Reserve Bank's regulatory tightening.
Buoyed by the strong quarter, SBI Chairman CS Setty retained guidance for a 3% full-year NIM, expecting FCNR(B) deposit inflows under the RBI's special swap window to exceed $10 billion from about $6 billion currently. The inflows, he said, would help the bank replace high-cost bulk deposits and lower funding costs.
Speaking to reporters after announcing the results on Friday, Setty projected loan growth of 14-15% and deposit growth of 10-11% for FY27.
The bank's total business crossed Rs 110 lakh crore, with deposits exceeding Rs 60 lakh crore and advances surpassing Rs 50 lakh crore.
Domestic advances grew 18.15%, led by robust growth in the retail, agriculture and SME (RAM) segments, which together expanded 18.2%. Retail, agriculture, SME and corporate lending all recorded double-digit growth.
Setty attributed the strong credit growth partly to a favourable base and broad-based demand, particularly in retail lending, where gold loans accounted for nearly three-fourths of incremental retail advances.
Foreign advances increased 21.38% in rupee terms and 9.97% in dollar terms.
Corporate advances rose 18.05%, driven by demand from infrastructure sectors such as renewable energy and data centres, said Ashwini Kumar Tiwari, Managing Director in charge of corporate banking. He added that the bank has a wholesale loan pipeline of over Rs3.7 lakh crore.
On gold loans, Managing Director Rama Mohan Rao Amara said the bank's non-agriculture gold loan portfolio stood at Rs 1.25 lakh crore, while agriculture gold loans were Rs 1.85 lakh crore.
Deposits grew 9.73% year-on-year to Rs 60.05 lakh crore. Retail term deposits increased 14.39%, while low-cost CASA deposits rose 9.3%, the highest among large banks. The CASA ratio stood at 39.24%.
On asset quality, gross NPAs declined to 1.47% from 1.83% a year ago, while net NPAs fell to 0.38% from 0.47%—both the lowest levels in more than two decades, Setty said.
Total slippages during the quarter were about Rs 7,000 crore, largely from the retail portfolio. The slippage ratio improved 18 basis points to 0.57%. Amara said nearly 40% of the fresh slippages had already been upgraded back to standard assets.
