SBI Q2FY27 Net Profit Rises 14.28% to ₹23,038 Crore

State Bank of India (SBI) reported a 14.28 per cent year-on-year (Y-o-Y) increase in net profit for the July-September quarter (Q2FY27), reaching ₹23,038 crore. This figure surpassed market estimates of ₹22,619 crore. The rise was primarily aided by lower provisions and robust growth in net interest income (NII). SBI’s NII grew nearly 15 per cent Y-o-Y to ₹49,413 crore, driven by healthy loan expansion. Conversely, non-interest income saw a nearly 5 per cent Y-o-Y decline to ₹19,066 crore, mainly due to lower treasury income, despite the bank gaining ₹7,288 crore from the sale of its stake in SBI Funds Management. Additionally, about ₹2,400 crore from a National Stock Exchange share sale was added to reserves. Following the results, SBI’s shares closed 1.77 per cent down at ₹969.55 on the BSE.

SBI's net interest margin (NIM) improved during the quarter, with domestic NIM rising 11 basis points (bps) sequentially to 3.11 per cent, and global NIM increasing 8 bps to 2.94 per cent. SBI Chairman C S Setty attributed this improvement to enhanced liability management, particularly on the cost front. He noted that a fall in the cost of deposits, coupled with the yield on advances, helped maintain and improve the overall NIM. Setty also highlighted that SBI raised $10.9 billion in Foreign Currency Non-Resident (Bank), or FCNR(B), deposits through a concessional swap window in June, using these funds to retire some high-cost borrowings, which further boosted margins. He expressed optimism for a positive NIM trajectory, expecting benefits from a 25 bps increase in the external benchmark-linked rate (EBLR) and potential 4-5 bps additions from any further repo rate hikes, with a goal to maintain NIM above 3 per cent.

The bank’s advances grew nearly 18 per cent Y-o-Y and 3.19 per cent sequentially to ₹52.08 trillion. This growth was broad-based, with retail loans increasing 14.54 per cent to ₹18.25 trillion, agricultural advances growing 22.64 per cent to ₹4.51 trillion, SME loans rising 22 per cent to ₹6.61 trillion, and corporate advances expanding 16.12 per cent to ₹14.39 trillion. Total deposits grew 12.27 per cent Y-o-Y and 4.53 per cent sequentially to ₹62.77 trillion. Domestic current account and savings account (CASA) deposits rose 8.13 per cent to ₹22.96 trillion, while domestic term deposits increased 14.26 per cent to ₹36.97 trillion. However, the CASA ratio declined to 38.32 per cent in Q2FY27 from 39.63 per cent a year earlier.

Chairman Setty maintained the bank’s earlier guidance of 14-15 per cent credit growth and 10-11 per cent deposit growth. He clarified that Q2 deposit growth was supported by FCNR(B) mobilisation, and excluding these, growth was around 10.5-10.6 per cent, aligning with guidance. The focus for credit growth remains above nominal GDP growth, typically 3-4 percentage points higher than the estimated 12-12.5 per cent nominal GDP growth. Provisions for bad loans declined 33 per cent Y-o-Y to ₹2,759 crore, though slippages rose to ₹5,227 crore. Asset quality improved, with gross and net non-performing asset (NPA) ratios at their lowest levels in more than two decades; gross NPAs declined 12 bps sequentially to 1.39 per cent, and net NPAs fell 2 bps to 0.36 per cent. Setty attributed the record-low gross NPA ratio to disciplined underwriting, strong recoveries, and focused risk management. Regarding a data breach, Setty stated that root cause analysis is underway, with immediate focus on containment, vulnerability identification, and remediation efforts, including a comprehensive cybersecurity drill.

What to watch: SBI maintains its 14-15% credit growth and 10-11% deposit growth guidance.

Editor's note: The draft accurately synthesizes the financial results, market performance, and chairman's commentary from the provided text.