SBI Q2 net profit rises 10% to ₹20,160 crore on Yes Bank stake sale

The country’s largest lender, State Bank of India (SBI), on Tuesday reported a 9.97 per cent year-on-year (Y-o-Y) increase in its net profit to ₹20,160 crore for the July-September quarter of 2025-26, helped by its stake sale in Yes Bank for ₹3,869 crore of post-tax gains. 

Sequentially, profit grew 5.22 per cent from ₹19,160 crore in Q1FY26. 

SBI also crossed the milestone of ₹100 trillion in total business during the quarter, with deposits of ₹55.9 trillion and a loan book of ₹44.2 trillion. Ranked 43, SBI is the only Indian bank among the top 50 banks globally in the S&P ranking.

 

 

Net interest income (NII) — the difference between interest earned and interest expended — rose 3.28 per cent Y-o-Y to ₹42,984 crore. Sequentially, NII was up 4.65 per cent from ₹41,072 crore in the June 2025 quarter (Q1FY26).

 

The net interest margin (NIM) from domestic operations fell by 18 basis points (bps) to 3.09 per cent from 3.27 per cent a year ago. However, NIMs improved by 7 bps from 3.02 per cent in Q1FY26.

 

During the post-earnings press conference, SBI Chairman C S Setty said NIMs had outperformed expectations as the bank had been able to contain the cost of deposits. Margins in Q4FY26 should return to the level seen in Q4FY25 (3.22 per cent). SBI aims to close the financial year with a NIM above 3 per cent.

 

Other income, comprising fees, commissions, treasury earnings, and recoveries, surged 30.44 per cent Y-o-Y to ₹19,919 crore. This includes a one-time pre-tax profit of ₹4,593 crore from the sale of a 13.18 per cent stake in Yes Bank. The bank still holds a 10.8 per cent stake. Setty said the internal rate of return (IRR) from the Yes Bank investment was 14 per cent. The IRR indicates the annualised rate of return from any investment or project.

 

Gross advances grew 12.73 per cent Y-o-Y to ₹44.19 trillion. Retail loans were up 14.09 per cent to ₹15.93 trillion, while home loans rose 15.22 per cent to ₹8.8 trillion. Corporate loan growth remained in single digits at 7.10 per cent Y-o-Y. The RAM (Retail, Agriculture, MSME) portfolio crossed the milestone of ₹25 trillion.

 

With GST reforms spurring demand in the economy, SBI has revised its credit growth target for FY26 to 12-14 per cent, up from the earlier projection of 11 per cent.

 

“The MPC announcements, which I call banking reforms, are definitely credit-accretive. At the industry level, we must see 1 percentage point additional credit growth. We are also revising our guidance of 11 per cent credit growth for FY26 to 12-14 per cent,” Setty said.

 

He added that measures on the fiscal side, such as goods and services tax rate rationalisation, would result in sustained consumption demand. Demand for credit in the RAM segments will remain robust, he said. The corporate loan book is also expected to grow in double digits in the third and fourth quarters, and with the domestic credit-deposit ratio at 69.82 per cent at the end of Q2, there is sufficient room to address future growth requirements, Setty added.

 

Ashwini Tewari, managing director (corporate banking and associates), said the corporate loan pipeline for the bank is about ₹7 trillion. “Half of it is sanctioned credit, and the other half comprises proposals under discussion. Most of the credit consists of term loans for capital expenditure,” Tewari said, adding that working capital limit utilisation is also increasing.

 

Deposits grew 9.27 per cent to ₹55.92 trillion, of which domestic Current Account and Savings Account (CASA) deposits increased 8.6 per cent Y-o-Y. The CASA ratio fell to 39.63 per cent as on September 30, from 40.03 per cent a year ago, but rose from 39.36 per cent sequentially. “Current account deposits witnessed robust growth of 17.9 per cent,” Setty said.

 

The bank projected deposit growth of 10 per cent for FY26. It has an excess SLR portfolio of ₹3.5 trillion and a credit-deposit ratio of 69 per cent, indicating adequate resources to fund credit demand, Setty said.

 

The bank’s asset quality remained robust. Its gross non-performing assets (NPA) ratio declined 40 basis points to 1.73 per cent from Q2FY25 and fell from 1.83 per cent in June 2025.

 

The net NPA ratio at 0.42 per cent was down by 11 bps Y-o-Y. Sequentially, net NPAs declined from 0.47 per cent. The provision coverage ratio (PCR), including written-off accounts, stood at 92.29 per cent against 92.21 per cent a year ago.

 

The bank’s capital adequacy ratio stood at 14.62 per cent as of September 30, up 86 bps Y-o-Y, while the Common Equity Tier 1 (CET1) ratio was 11.47 per cent. The present capital adequacy can support credit worth ₹12 trillion, Setty said.