SBI Q1 profit beats estimates on strong loan growth, asset quality

State Bank of India’s (SBI) net profit increased 10% year on year due to strong loan growth which led to higher net interest income (NII) even as revenue from treasury operations dipped. Net profit increased to Rs 21,121 crore in the quarter ended June 2026 from Rs 19,160 crore a year ago. The profit beat market expectations, and was higher than the 1% decline forecast by analysts polled by Bloomberg at Rs 19,052 crore.

Net interest income or the difference between interest earned on loans and that paid for deposits increased 15% year on year to Rs 46,992 crore. Total advances increased 19% to Rs 50.47 lakh crore in June 2026 due to an identical 18% growth in both the corporate as well as retail, agriculture and SME (RAM) segments. Deposits growth lagged at 10% year on year to Rs 60.05 lakh crore. The bank has a corporate loan pipeline of Rs 3.58 lakh crore.

Chairman CS Setty said that the bank remains confident of the growth prospects of the Indian economy despite the continuing geopolitical uncertainties and its impact on global crude oil prices and exchange rates. “Given the GDP estimates and our own projections we expect credit growth to be between 14% to 15% this year. On the deposit side we expect some uptick due to the FCNR(B) deposits in the second quarter which means we will have excess liquidity and expect a deposit growth of 10% to 11%,” Setty said.


Setty said the bank expects to raise $10 billion through the concessional special FCNR (B) deposit scheme by RBI while till now it has garnered $6 billion. He said that majority of the deposits are coming from UAE via the Gift City branch.

The fund inflows from this special scheme and the excess liquidity that the bank possesses currently will be enough for SBI to fund its targeted loan growth Setty said. “We have an excess liquidity of Rs 4 lakh crore in statutory liquidity ratio (SLR) securities. We will use this liquidity power based on market rates and decide whether to access the bulk deposit market or not. We do not think the impact of these FCNR (B) flows will be either positive or negative,” Setty said.

The bank’s net interest margin (NIM) or the difference between the yield earned on loans and interest paid on deposits dropped slightly to 2.86% in June 2026 from 2.89% a year ago. Domestic NIM at 3% was little changed from the 3.01% reported a year ago. Setty said the bank expects to maintain NIM at 3% during this year with return on assets at least 1%.

Profit increased despite a drop in non-interest income by 9% year on year mainly because income from both foreign exchange and trading dropped sharply by 70% and 32% year on year. Fee income however increased 21% led by loan processing charges and commission from government business.

Provisions on non performing assets (NPAs) also fell 32% reflecting the improvement in the bank’s assets quality. Gross NPA ratio at 1.47% was down from 1.83% a year ago and was the lowest in two decades, Setty said.