SBI Q1 results: Net profit rises 12.5% to ₹19,160 crore on treasury gains

SBI Q1 net rises to ₹19,160 crore aided by treasury gains; net interest margins may improve by March 2026 even as NII and CASA ratio face near-term pressure

State Bank of India (SBI), the country’s largest lender, on Friday reported a 12.5 per cent year-on-year (Y-o-Y) rise in net profit to ₹19,160 crore for the April-June quarter of 2025-26 (Q1FY26), driven mainly by robust treasury gains. Sequentially, its profit was up 2.78 per cent from ₹18,643 crore in Q4FY25. 

Net interest income (NII) — the difference between interest earned and interest expended — declined 0.13 per cent Y-o-Y to ₹41,072 crore. The net interest margin (NIM) from domestic operations fell to 3.02 per cent from 3.35 per cent a year ago, and from 3.15 per cent in the previous quarter. NII surged 55.4 per cent to ₹17,346 crore, aided by strong revaluation gains from the investment portfolio — up 144.3 per cent to ₹6,326 crore — and a jump in forex income, which rose 352 per cent Y-o-Y to ₹1,632 crore. 

 

SBI Chairman C S Setty said: “Once deposits are re-priced and we benefit from the cash reserve ratio cut from September, NIM in Q4 should come back to what it was in Q4FY25 (3.22 per cent).”

 

SBI Chairman C S Setty  said current and savings account (Casa) deposits would continue to be the focus, while fixed deposits would be re-priced. “To that extent, the cost of deposits has peaked and should start moderating,” he told the media after the post earnings.

 

SBI’s cost of deposits for domestic operations rose to 5.21 per cent in Q1FY26 from 5 per cent a year earlier and 5.11 per cent in Q4FY25. The yield on advances eased to 8.78 per cent from 8.89 per cent Y-o-Y and 8.98 per cent in Q4FY25. Setty attributed the increase in deposit costs to customers locking in fixed deposit rates hoping rates will come down. 

 

Gross advances grew 11.61 per cent Y-o-Y to ₹42.54 trillion. Retail loans were up 12.56 per cent to ₹15.39 trillion, while home loans rose 15.05 per cent to ₹8.5 trillion. Corporate loans grew just 5.7 per cent Y-o-Y.

 

According to Setty, corporates are tapping the commercial paper market, where borrowing costs are lower, to repay working capital loans. “We have robust visibility on the proposals that are under discussion, and sanctions that are yet to be disbursed. Together, it is almost ₹7 trillion. Disbursements are taking time while repayments are there,” Setty said.

 

SBI has maintained its credit growth target for FY26 at 12 per cent and plans to ramp up personal loan disbursements during the festival season.

 

Deposits grew 11.66 per cent to ₹54.73 trillion, of which domestic Casa increased 8.05 per cent. The Casa ratio fell to 39.36 per cent as on June 30, 2025, from 40.70 per cent a year ago and 39.97 per cent sequentially. Deposits would grow by 10 per cent in FY26, the SBI chairman said.

 

The bank’s asset quality remained robust. Its gross non-performing assets (NPA) ratio declined 38 basis points (bps) to 1.83 per cent over Q1, though it inched from 1.82 per cent in March 2025.

 

The net NPA ratio at 0.47 per cent was down by 10 bps. Sequentially, net NPAs were flat. The provision coverage ratio (PCR), including written-off accounts, stood at 91.71 per cent against 91.76 per cent a year ago.

 

The bank’s capital adequacy ratio (CAR) stood at 14.63 per cent as of June 30, 2025, up 85 bps Y-o-Y, while the Common Equity Tier 1 (CET 1) ratio was 11.10 per cent. With the recent ₹25,000 crore equity capital raise from institutional investors, the CAR will increase to 15.33 per cent.