Despite a decline in operating profit and other income, State Bank of India’s (SBI) net profit for the quarter ended March was up 5.6% on year to Rs 19,684 crore. Analysts had pegged the net profit for the country’s largest lender at Rs 18,898 for the reporting quarter, according to estimates by Bloomberg. The operating profit for the lender declined by 11.4% on year to Rs 27,704 crore in Jan-Mar.
The net interest income was up 4.1% on year to Rs 44,380 crore in Jan-Mar, however it missed the analyst estimate of Rs 46,707 crore. Other income declined nearly 29% on year to Rs 17,314 crore. The management said that the rising bond yields impacted the treasury income during the quarter. The net interest margins declined to 2.81% in the reporting quarter from 2.98% a quarter ago. SBI Chairman CS Setty said that net interest margins would be around 3% for FY27.
Credit Momentum
The gross advances grew 16.87% on year to Rs 42.20 lakh crore as on March 31, and the deposits grew at a slower pace of 11.03% on year to Rs 53.82 lakh crore. “Definitely, we would like to grow more on the deposit side, but we are very conscious of the cost of resources. So, we will be not aggressively pricing our deposits. We will be focusing more on the retail mobilisation,” Setty said on the gap between the credit growth and the deposit growth. “Currently, if you ask me, I don’t think we are really concerned about the current estimated debt growth. And if we grow around 11%, 12%, on the deposit side, I think we should be good,” he added.
Within gross advances, the bank saw robust growth of 14.83% in corporate advances and 17.11% on year growth in the RAM (retail, agriculture and MSME) book as on March 31. He said the bank is seeing demand from segments such as- infrastructure, renewables, power, fertilisers, among others. The bank’s corporate credit book pipeline stands at Rs 5.5 lakh crore. For the current financial year 2026-27 (April-March), the bank has maintained its guidance of 13-15%. Setty said that he does expect any dip in credit growth in Q1FY27.
Within deposits, the current account and savings account (CASA) deposits grew 9.53% on year to Rs 22.65 lakh crore and the retail term deposits were up 14.11% on year.
Asset Quality Resilience
The provisions and contingencies of the bank declined by 55.4% on year and 36.3% on quarter to Rs 2,872 crore in the reporting quarter. Provision Coverage Ratio (PCR) stood at 74.36%. The asset quality too improved for the lender. The bank also said that the expected credit loss (ECL) guidelines will have minimal impact on credit growth.
Gross non-performing asset (NPA) ratio improved to 1.49% as on March 31, as compared to 1.57% a quarter ago and the net NPA ratio was unchanged on quarter at 0.39% as on March 31.
Fresh slippages for the reporting quarter inched up slightly to Rs 5,521 crore from Rs 4,458 crore a quarter ago. Setty said that the slippages were largely from the agriculture and the MSME segments. For the year ended March, the credit cost stood at 0.37% down 1 basis point from FY25. The bank said that the recovery pipeline going ahead would be around Rs 1,500-1,700 crore per quarter. On the evolving geopolitical situation, Setty said that if the conflict continues for the next five to six months, then there could be some impact on the broader economy.
Basel-III capital adequacy ratio stood at 15.40% as on March 31, with the common equity tier-I ratio at 12.29% and the additional tier-I ratio at 1.04%.
On Friday, shares of the bank closed 6.6% lower at Rs 1,019.30 on NSE.