State Bank of India Profit Rises 14.28% to 23,038 Crore Rupees in Second Quarter
Key Facts
State Bank of India (SBI) reported net profit of 23,038 crore rupees in the second quarter of fiscal 2027, up 14.28% year over year, according to the bank’s statement. Profit growth came with an increase in net interest income, the difference between what the bank earns on lending and pays on deposits. The income reached 49,143 crore rupees, up 14.69% from the year-earlier period. Operating profit also rose 7.28% to 34,226 crore rupees. The results showed improvement in domestic net interest margin and asset quality, while the bank kept its credit growth guidance for the fiscal year at 14% to 15%.
Domestic net interest margin rose to 3.11%, up 11 basis points from the previous quarter and 3 basis points year over year, according to bank data. Chairman C.S. Setty attributed the margin improvement to lower deposit costs alongside loan yields, saying this "helped us maintain and improve the overall interest margin." The performance reflects the bank’s ability to increase returns from its core business during the quarter. Setty said the portfolio of advances linked to the external benchmark lending rate could be repriced quickly if repo rates rise again. That could add 4 to 5 basis points to the margin, even as deposit rates may be adjusted.
Advances, meaning loans and credit facilities provided by the bank, stood at 52.08 trillion rupees in the second quarter, growing nearly 18% year over year and 3.19% from the previous quarter. Deposits, meanwhile, rose 12.27% year over year and 4.53% quarter over quarter to 62.77 trillion rupees. Credit growth was spread across several segments: personal loans increased 14.54%, agricultural advances 22.64%, and loans to small and medium-sized businesses 22%. These figures support the bank’s guidance for credit growth of 14% to 15% during the fiscal year. Setty also maintained the bank’s deposit growth outlook of 10% to 11% for the year.
Revenue from non-interest sources, which include income outside lending, fell about 5% year over year to 19,066 crore rupees, mainly due to lower treasury income. The bank, meanwhile, received 7,288 crore rupees from selling a stake in SBI Funds Management during the quarter. The higher net profit came amid these two opposing factors, alongside growth in net interest income and operating profit. The sale proceeds highlight the contribution of the divestment to quarterly results, while lending income remains a separate indicator of the performance of core banking activity. The bank did not change its announced credit and deposit growth guidance.
Bad-loan metrics improved: the gross non-performing asset ratio fell 12 basis points from the previous quarter to 1.39%, its lowest level in more than two decades, while the net ratio declined to 0.36%. Provisions for bad loans dropped 33% year over year to 2,759 crore rupees. But fresh slippages rose to 5,227 crore rupees, compared with 4,754 crore rupees a year earlier. Taken together, the figures show a decline in the stock of bad loans and in provisions, alongside an increase in loans that newly turned bad during the quarter. The bank’s stock closed down 1.77% at 969.55 rupees on the BSE on Tuesday, November 3, following the results.
Looking ahead, Setty said the bank expects to meet its full-year fiscal credit growth target of 14% to 15%, with deposit growth of 10% to 11%. These targets come as advances and deposits grew in the second quarter. The improvement in domestic net interest margin provides further support for lending performance, according to the bank chief’s explanation of lower deposit costs and higher returns on advances. The possibility of repricing loans linked to the external benchmark lending rate remains contingent on further increases in the repo rate. India’s October inflation data are due on November 12, 2026, with consensus expectations at 5.93% and the previous reading for September at 5.54%.