SBI Posts Historic Quarterly Profit, Revises Loan Growth Target Upward
State Bank of India, the nation's largest public sector lender, delivered its highest-ever standalone quarterly profit for the October-December period of fiscal year 2026. The banking behemoth reported a robust 24.5% year-on-year increase in standalone net profit, reaching ₹21,028 crore, compared to ₹16,891.44 crore in the corresponding quarter of the previous fiscal year. This stellar performance was underpinned by consistent growth in core income, a significant enhancement in asset quality metrics, and a substantial one-time boost from its asset management subsidiary, which is gearing up for an initial public offering.
Key Drivers: Mutual Fund Dividend and Operating Strength
A special dividend of ₹2,200 crore from SBI Mutual Fund proved instrumental in elevating the bank's profitability. Chairman C S Setty highlighted this contribution as a pivotal factor behind the sharp profit escalation. On the operational front, SBI demonstrated remarkable resilience. Total income climbed 9.7% year-on-year to ₹1,40,914.65 crore. Net interest income, a critical measure of core banking profitability, grew by 9% to ₹45,190 crore. Operating profit witnessed an impressive surge of 39.54%, settling at ₹32,862 crore, indicative of improved operational efficiency and leverage.
Asset Quality Reaches Two-Decade High
The bank's asset quality showed meaningful and sustained improvement. Gross non-performing assets declined by 12.71% year-on-year to ₹73,637 crore, while net NPAs fell by 15.74% to ₹18,012 crore. The gross NPA ratio improved to 1.57% as of December 31, 2025, down from 1.73% in September and marking the best level witnessed in two decades. Provisions for the quarter stood at ₹4,507 crore, compared to ₹911 crore in the year-ago period, reflecting prudent risk management. Fresh slippages were reported at ₹4,458 crore, slightly higher than the ₹3,823 crore recorded in the same quarter last year.
Management Optimism: Loan Growth Guidance Revised Upwards
In a significant development, Chairman C S Setty announced an upward revision in SBI's loan growth guidance for FY26. The bank now projects growth between 13% and 15%, up from the earlier forecast of 12% to 14%. This optimistic revision is attributed to a rebound in corporate lending and sustained momentum in the retail segment. "I see many areas where SBI is well positioned to take advantage of the emerging scenario," Setty stated in a post-results briefing.
He elaborated that recent trade deals are expected to benefit not only large corporations but also a broad base of small businesses. As of December 31, SBI's total loan book stood at ₹46.8 trillion. Deposits grew by 9.02% year-on-year during the quarter, and the bank maintains a comfortable credit-deposit ratio of 72%, providing ample headroom for future expansion.
Consolidated Performance and Future Outlook
On a consolidated basis, SBI reported a 14.08% year-on-year increase in net profit to ₹21,876.04 crore for Q3 FY26. Management, while optimistic, acknowledged certain challenges. Setty pointed to a structural shift in household savings, with increasing financialisation diverting flows away from traditional bank deposits. Managing Director Ashwini Kumar Tewari noted a robust corporate loan pipeline, including sanctioned but unutilised facilities worth ₹7.9 trillion as of December 31.
"Economic activity has really picked up after GST rationalization, resulting in working capital utilization. We are seeing various sectors where long loans are being drawn and a good pipeline visibility is there," Setty explained. Looking ahead, the management emphasized the need for banks to devise strategies to raise resources at competitive costs to meet escalating credit demand. They also identified geopolitical tensions, global trade uncertainties, and commodity price fluctuations as key external risks, while affirming that SBI is not adopting an overly cautious stance towards any specific sector.
The PSU stock closed 0.65% lower at ₹1,066.40 on Friday, February 6. However, it has delivered strong returns over longer periods, gaining 44% in the last year, 12% over the past three months, and 7% in the last month.
