State Bank of India reported a 14% rise in net profit for the quarter ended September 2026, to Rs 23,038 crore. The figure came in above the Rs 22,619 crore that analysts had expected in a Bloomberg poll.
The main driver was lending. Total advances climbed 18% to Rs 52.08 lakh crore, and every segment grew in double digits. Agriculture loans rose 23%, small and medium enterprise loans grew 22%, and corporate advances expanded 16%.
That lending pushed net interest income up 15% from a year earlier, to Rs 49,143 crore. The bank’s net interest income is the gap between what it earns on loans and what it pays on deposits.
Margins held steady
Many banks came under margin pressure this quarter, but SBI kept its net interest margin at 2.90%, compared with 2.92% a year earlier. On a domestic basis, the margin stood at 3.06%, up from 3% in June 2026 and slightly above 3.04% a year ago.
Chairman CS Setty said the bank had managed its deposit costs tightly. Domestic cost of deposits fell sharply to 4.84% in September 2026, from 5.13% a year earlier. Setty said better management of liabilities, together with the yield on advances, had helped protect margins.
He also looked ahead. If the central bank took further repo rate action, the bank’s external benchmark linked loans would reprice quickly, adding perhaps 4 to 5 basis points, he said. Some tweaks to deposit rates could follow.
Lower provisions gave a boost
Falling provisions also helped the bottom line. Loan loss provisions dropped 33% to Rs 2,759 crore, while provisions for standard assets fell 69%. Setty pointed to a benign asset quality position.
Bernstein analysts said the headline earnings growth masked a softer underlying quarter. In their view, lower credit costs and gains from a stake sale did most of the work in supporting profitability.
Other income under pressure
Non-interest income fell 5% to Rs 19,066 crore. That was despite a Rs 7,288 crore gain from selling a stake in SBI Funds Management, the bank’s mutual fund arm.
Income from treasury operations fell 20%, and forex and derivatives income dropped 46%. Those declines were the main reason non-interest income slipped.
Underlying picture
Bernstein said healthy loan growth and an 8 basis point quarter-on-quarter recovery in margins did not lift the bank’s underlying pre-provision operating profit, which fell 1% year on year. Weaker other income and rising expenses were behind that drop.
Excluding one-off items, earnings per share grew a more modest 5% year on year. Return on assets fell 21 basis points from the previous quarter, to about 0.90%.
Economic outlook
Setty said the Indian economy remained on a consistent growth path, supported by consumption, investment and activity in manufacturing and services. He said the underlying momentum was still healthy.
He warned, however, that geopolitical tensions, elevated oil prices and trade policy uncertainty posed risks to inflation and global supply chains. The bank would keep watch on food and energy prices, currency markets and the wider global environment. The ongoing rabi sowing season also needed close attention, given concerns about El Nino and its effect on the rural economy, he said.
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