Whalesbook
State Bank of India is projecting stronger lending momentum for the fiscal year 2026, now expecting credit growth to land between 13% and 15%. This upward revision follows an exceptional third quarter performance where the state-owned lender reported a net profit of ₹21,028 crore, a significant 24.5% leap year-on-year and well above market forecasts.
Momentum Across All Segments
SBI Chairman C S Setty attributed the bank's stellar results to a holistic surge in business growth, marking an "exceptional quarter." Net interest income (NII) climbed 9% to ₹45,190 crore, bolstered by double-digit expansion in retail, agriculture, and MSME portfolios. Crucially, corporate credit growth rebounded strongly to around 13%, exceeding previous projections and signaling a healthier demand for business loans.
Asset Quality Improvement
The bank's asset quality continues to strengthen, with gross non-performing assets (NPAs) falling to 1.57% from 1.73% in the preceding quarter. Net NPAs also eased to 0.39%. Slippages remained contained at a low 0.40%, with provisions reducing to ₹4,506 crore. Setty expressed confidence that asset quality will remain stable, guiding for a credit cost of approximately 50 basis points for FY26.
Strategic Deposit Focus
Looking ahead, SBI is prioritizing deposit mobilization, targeting 9-10% growth for FY26. The strategy involves shifting focus from high-cost wholesale deposits to more stable retail term deposits and low-cost CASA funds. The bank reported a solid 10% growth in current account balances, underscoring the effectiveness of its customer engagement initiatives.
MSME and Corporate Outlook
Growth in the MSME segment is robust, with SBI witnessing approximately 18% expansion, supported by enhanced data analytics and underwriting models. Setty noted that recent trade developments and a more positive investment climate are expected to further stimulate demand from both large corporates and downstream MSMEs, sustaining the current growth trajectory.
Shares of State Bank of India, which had gained 32.40% in the preceding six months, closed 0.70% lower at ₹1,066 on Friday, ahead of the earnings announcement. The bank's performance suggests it is well-positioned to maintain its growth momentum through policy support and internal strengths.