SBI’s latest quarterly results showcase a robust loan book, improved asset quality, and continued profitability, highlighting a significant acceleration from its earlier slower growth phase.
State Bank of India’s latest quarter underlines how much momentum has built since the lender’s earlier phase of slower growth. In a note published on 22 August, The Hindu BusinessLine said the bank’s share price had already risen about 30% since its prior buy recommendation, issued when the stock traded at ₹805 last August. The paper argued that the rerating has largely played out and that there is limited hidden value left in the current valuation, but it still sees scope for further gains if book value keeps rising through steady earnings growth.
The bank’s loan book has strengthened markedly over the past year. BusinessLine said SBI’s credit growth was a moderate 11.6% in Q1 FY26, but then accelerated after demand improved in the second half of FY26, helped in part by GST rate rationalisation. For FY26, advances grew 16.9%, and in Q1 FY27 they rose 18.6% from a year earlier, while deposits increased 9.7%. The bank has now crossed ₹50 lakh crore in loans and ₹60 lakh crore in deposits, and its roughly ₹4 lakh crore of surplus statutory liquidity ratio holdings give it room to keep expanding lending even though deposit growth has lagged. LiveMint reported that the credit-deposit ratio has climbed to about 83%, reflecting heavier use of wholesale funding, although management expects to raise around $10 billion in FCNR(B) deposits to diversify funding.
Corporate lending, which had been a weak spot, has recovered. BusinessLine said corporate advances expanded 14.8% in FY26 and 18% in Q1 FY27 after the bank shifted to some loans priced off Treasury bill yields, a move that drew interest from borrowers but later proved less attractive, prompting SBI to revert many deals to marginal cost of funds-based pricing. The bank says most of that repricing has been completed, with the remainder under way, and it is targeting growth in data centres, energy storage and merger and acquisition financing. Its pipeline of sanctions stands at ₹9 lakh crore. Retail personal loans, another segment that had stalled earlier, are also moving again, rising 7.4% in FY26 and 8.3% in the latest quarter, according to BusinessLine.
Profitability and asset quality remain strong. BusinessLine said standalone net profit rose 12.9% in FY26 to a record ₹80,032 crore, while return on assets stayed above 1% and domestic net interest margin held near 3% in Q1 FY27. LiveMint reported first-quarter net profit of ₹21,121 crore, up 10.2% year on year, with net interest income rising 14% to ₹46,992 crore and domestic margin improving by 7 basis points to 3%. Asset quality is at its best in two decades, with gross non-performing assets at 1.47% and net NPAs at 0.38%, BusinessLine said. Capital adequacy is comfortable at 15.6%, helped by a ₹25,000 crore qualified institutional placement, the sale of its Yes Bank stake and the SBI Funds Management listing. Management is guiding for 14% to 15% credit growth in FY27, along with a 3% margin and a 1% return on assets, while investors will be watching closely for any update on the expected credit loss framework due from FY28.
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