State Bank of India’s chairman C S Setty dismisses fears of asset stress following a weaker first quarter, emphasising the influence of seasonality and the strengthening of high-quality portfolios amid robust financials and strategic liquidity initiatives.
State Bank of India chairman C S Setty has pushed back against concerns that the lender is seeing meaningful strain in asset quality after a softer first quarter, saying investors should be cautious about reading too much into sequential movements. Speaking at the bank’s quarterly results briefing in Mumbai, Setty said the June quarter is often distorted by seasonality, with business, income and credit growth typically strengthening later in the financial year.
He said year-on-year comparisons painted a much steadier picture, pointing to improvement across the bank’s key measures and noting that recoveries and upgrades had reduced the apparent stress by about Rs 4,900 crore. On that basis, he said there was no sign of a material deterioration in the loan book.
Setty also rejected suggestions that stronger growth in agriculture and small and medium-sized enterprise lending might be an early warning of weakness. He said the SME rise was largely supported by the Emergency Credit Line Guarantee Scheme, while agricultural growth was being driven by institutional finance, investment credit and other structured lending. In his view, the expansion was coming from higher-quality portfolios rather than riskier exposure.
The remarks fit with a broader confidence in SBI’s balance sheet that Setty has expressed since taking charge in 2024. At the time, he said he wanted to turn SBI into India’s most valued financial institution and described the country’s current economic cycle as an opportunity for the bank to deepen its leadership across products and customer segments. Since then, he has repeatedly pointed to SBI’s scale, digital reach and profitability as key strengths.
In the latest quarter, SBI reported a 10.23% rise in standalone net profit to Rs 21,121 crore, while net interest income climbed 14.88% to Rs 46,992 crore. Gross advances crossed Rs 50 lakh crore and total business moved beyond Rs 110 lakh crore, with deposits at Rs 60.06 lakh crore. Asset quality improved on an annual basis, even as the bank kept its full-year guidance unchanged, including credit growth of 14% to 15%, deposit growth of 10% to 11% and a net interest margin of about 3%. Setty also said SBI was drawing on a liquidity buffer of more than Rs 4 lakh crore, including $1 billion raised through commercial paper and plans to access up to $10 billion in FCNR(B) deposits, while the bank expands its use of responsible artificial intelligence in operations and compliance.
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