State Bank of India (SBI), the country’s largest lender, delivered a strong performance for the first quarter of fiscal year 2025–26, reporting a 12% year‑on‑year rise in standalone net profit to ₹19,160 crore. This marks a notable jump from ₹17,035 crore in Q1 of the previous fiscal year. Importantly, the figure also exceeded street expectations of approximately ₹17,095 crore
Factors Driving Profit Growth
1. Treasury Windfall
While prevailing macroeconomic conditions squeezed net interest income (NII)—which dropped marginally by 0.1% year‑on‑year to ₹41,072 crore—the bank’s treasury income more than tripled, providing a decisive boost to overall earnings .
2. Robust Operating Performance
SBI’s operating profit climbed 15.5% to ₹30,544 crore, underpinned by strong interest income from lending activities, which rose 5.8% to ₹1,17,996 crore .
3. Margin Pressures
Net interest margin (NIM) softened across the board—with the domestic NIM dipping to 3.02% from 3.35% year‑on‑year, a reflection of competitive pressure and interest rate dynamics
Strengthening Asset Quality and Capital
Better Asset Ratios
Asset quality metrics showed signs of improvement. The gross non-performing asset (NPA) ratio eased to 1.83%, down from 2.21% a year ago. The net NPA ratio also improved, falling to 0.47% compared to 0.57% previously
Stronger Capital Buffer
SBI’s capital adequacy ratio (CAR) strengthened to 14.63%, up from 13.86% in Q1 FY25—a sign of a healthier capital foundation
Lending and Deposits Momentum
Loan Growth Steady
Gross advances rose approximately 11.6% year‑on‑year, supported by growth across both retail (12.6%) and corporate (5.7%) portfolios
Deposits Inflated
While not all sources detailed deposit figures, aggregate data from the consolidated bank indicated total deposits grew by 11.7%, helping maintain strong liquidity
Analyst Response & Market Reaction
Beating Forecasts
SBI’s results outperformed market expectations, bolstered by non‑lending income. Analysts had forecast a profit of ₹175.5 billion (~₹17,550 crore), making the ₹19,160 crore outcome particularly upbeat
Stock Market Movement
According to reports in regional media, the robust Q1 showing spurred investor confidence, triggering positive movement in SBI’s share price
Summary Outlook
In Q1 FY26, SBI demonstrated financial resilience, achieving double‑digit profit growth despite pressure on lending margins. The treasury windfall, combined with operational efficiency, cleaner asset book, and strong capital metrics, helped deliver one of the strongest quarterly performances in recent times.
As the bank advances into the fiscal year, it will be closely watched how it navigates interest rate volatility, sustains credit momentum, and capitalizes on its improving asset health.