State Bank of India (SBI), India’s largest lender, on Friday reported a 5.58 per cent year-on-year (YoY) rise in net profit to ₹19,684 crore for the January-March quarter (Q4FY26), mainly due to a sharp drop in non-interest income. Sequentially, net profit was down 6.39 per cent over Q3FY26.
For the full year FY26, SBI recorded its highest-ever net profit of ₹80,032 crore, up 12.9 per cent compared to the previous year.
The subdued performance in Q4 was driven by a 29 per cent YoY decline in non-interest income to ₹17,314 crore. This was because of a ₹1,471 crore loss on sale of investments as compared to a ₹6,879 crore profit during the same period of the previous year. The bank also reported a ₹100 crore mark-to-market (MTM) loss after the Reserve Bank of India capped net open position for onshore rupee derivatives at $100 million during end-March, with compliance by April 10, 2026. However, the actual loss was ₹57 crore due to the NOP norms, which will be accounted for in the first quarter of FY27. SBI’s net open book was over $5 billion.
Net interest income for the quarter grew 4.1 per cent to ₹44,380 crore despite 16.9 per cent growth in gross advances.
SBI’s net interest margin (NIM) also dipped below 3 per cent in Q4FY26 to stand at 2.93 per cent, down 18 basis points sequentially. For the year FY26, its NIM stood at 3.03 per cent. The bank’s shares tumbled 6.62 per cent following its Q4FY26 earnings to close at ₹1,019.55 on the BSE.
According to CS Setty, chairman, SBI, the dip in NIM is largely because the December rate cut was not fully priced into the External Linked Loan Rate book earlier, and was reflected in the January-March quarter. “The EBLR book has also grown substantially,” he said.
For the current financial year, SBI has guided for NIM of over 3 per cent. The domestic NIM for FY26 was 3.03 per cent. The guidance is based on the assumption that there will be no repo rate hike by the central bank in FY27, which means deposit rates are unlikely to go up, he said, adding that yields on loans will improve as the asset mix changes.
“On the corporate side particularly, we had some floating-rate exposures which will probably run off, and we will then have the ability to pass on some of the additional costs that we are bearing on the deposit side. On the deposit interest rate side as well, I do not think there is much room for further rate cuts because if credit growth continues at 13-15 per cent, I do not think any of us in the banking system would be in a position to cut deposit rates further,” Setty said.
The bank’s loan loss provisions dropped 21 per cent YoY and 2.34 per cent sequentially to ₹3,140 crore in Q4FY26. Its fresh slippages went up in Q4FY26 to ₹5,521 crore, compared to ₹4,458 crore in Q3FY26 and ₹4,222 crore in Q4FY25.
Asset quality improved, with the gross non-performing assets (NPA) ratio declining 8 basis points sequentially to 1.49 per cent. Net NPA was flat at 0.39 per cent. Credit cost declined 2 basis points sequentially to 0.27 per cent.
The bank posted robust growth in advances in Q4FY26, with the loan book growing nearly 17 per cent YoY and 5.32 per cent sequentially to ₹49.32 trillion. The retail segment grew 15.22 per cent YoY and 4.33 per cent sequentially, while corporate loans grew 14.83 per cent YoY and 6.83 per cent sequentially. The retail, agriculture and MSME, popularly known as RAM portfolio, crossed ₹27 trillion, up 17 per cent YoY.
Although the bank’s advances grew 17 per cent YoY in Q4FY26, the bank has guided for 13-15 per cent credit growth in FY27.
“We have a corporate credit pipeline of around ₹5.5 trillion. Apart from the corporate credit pipeline, there is also good growth across segments,” he further said, adding that banking system credit growth will be in the range of 13-14 per cent and deposit growth at 11-12 per cent.
SBI’s deposits growth was 11 per cent to ₹59.75 trillion at the end of Q4FY26, with domestic term deposits growing 12 per cent YoY, and domestic CASA growing 9.53 per cent YoY.
Setty clarified that the bank has enough capital and almost ₹3 trillion of excess securities eligible for statutory liquidity ratio.
Commenting on the impact of the West Asia conflict, Setty said if supply chains continue to be disrupted for five-six months, then it will have an impact on the broader economy. “There are so many other factors which go into how highly it will impact, how moderately it will impact, but I think if it lingers on for another five to six months, we would see some impact on the macros,” he said.
Source link
#SBIs #net #profit #rises #due #drop #noninterest #income
