SBI Q3FY26 results: Net profit up 24.5% to ₹21,028 crore on strong NII

SBI's Q3FY26 net profit rose 24.5 per cent to ₹21,028 crore on higher NII and non-interest income. The bank raised FY26 credit growth guidance to 13-15 per cent

State Bank of India (SBI), the country’s largest lender, reported a 24.5 per cent year-on-year (Y-o-Y) increase in net profit to ₹21,028 crore for the quarter ended December (Q3FY26), driven by robust growth in non-interest income, healthy net interest income (NII) supported by solid credit growth, recoveries from written-off accounts, and dividend income of over ₹2,200 crore from its subsidiary, SBI Mutual Fund. 

NII grew 9 per cent annually to ₹45,190 crore as the bank’s advances book grew over 15 per cent Y-o-Y in the quarter to ₹46.83 trillion. Non-interest income was up 66 per cent Y-o-Y to ₹18,359 crore, aided by fee income.

 

 

The bank's domestic net interest margin (NIM) improved 3 basis points (bps) to 3.12 per cent at the end of Q3FY26, compared to 3.09 per cent in Q2FY26 and 3.15 per cent in Q3FY25. The bank said its NIM will continue to be above 3 per cent going forward.

 

“Credit growth has remained strong and there has been a robust demand for credit across all the segments,” said SBI Chairman C S Setty, adding that all the components — retail, SME, and corporate — have witnessed double-digit growth.

 

“We are going to revise our credit growth advisory from 12-14 per cent to 13-15 per cent. So this gives us confidence that the credit growth is going to be robust,” he added.

 

Slippages for the quarter stood at ₹4,458 crore, compared to ₹4,754 crore in Q2FY26 and ₹3,823 crore in Q3FY25. Provisions increased marginally sequentially to ₹11,834 crore in Q3FY26, compared to ₹11,744 crore in Q2FY26. On an annual basis, provisions increased 77.7 per cent.

 

Asset quality improved significantly in the quarter, with gross non-performing assets (NPAs) at the end of the December quarter at 1.57 per cent, down 16 bps from the previous quarter. Net NPAs stood at 0.39 per cent, down 3 bps from the last quarter.

 

The bank’s advances grew 15.14 per cent Y-o-Y in the quarter, beating industry growth by a fair margin. Credit growth was also broad-based, with the retail personal book growing 15 per cent Y-o-Y, the agri book 16.5 per cent, the SME book 21 per cent, and the wholesale book growing 13.37 per cent Y-o-Y.

 

Following the robust credit momentum in the quarter, the bank has revised its credit growth estimates for FY26 to 13-15 per cent Y-o-Y from 12-14 per cent earlier.

 

"RAM (retail-agriculture-MSME) will be a big lever (going forward). Even in the current quarter, we are witnessing good growth on the RAM side. Corporate, we hope to continue at least double-digit growth,” Setty said, adding that SBI will be lending to REITs.

 

“We would definitely be there. We have been participating in a small way in terms of equity support to the REITs. So we would definitely be looking at opportunities to lend,” he said.

 

The bank has a corporate lending pipeline of upwards of ₹7 trillion, of which ₹4.5 trillion is sanctioned but undisbursed loans.

 

While credit growth has been fairly solid, the bank’s deposit growth lagged credit growth, with deposits growing 9 per cent Y-o-Y to ₹57 trillion. Current account savings account (CASA) deposits grew 8.88 per cent Y-o-Y, while term deposits grew 9.17 per cent Y-o-Y.

 

The bank’s credit-deposit ratio stood at 73 per cent at the end of Q3FY26.

 

“We remain mindful of structural shifts in the financial system, particularly the increasing financialisation of household savings towards market-linked instruments. This trend, while positive for capital market debt, presents a structural challenge for deposit mobilisation and will gradually reshape bank balance sheets,” Setty said, adding that SBI is proactively adapting by strengthening current account growth, maintaining leadership in savings deposits, and leveraging UNO to drive customer acquisition and retention.

 

“Managing liquidity and profitability in this environment will require diversification of funding resources, greater product innovation and deeper digital integration,” he further added.

 

The bank did not give guidance on its deposit growth going forward.

 

“Our focus would be using our franchise of the branch network to mobilise the retail term deposits. And, I think retail term deposits will continue to have double-digit growth,” Setty said, adding that the bank has adequate headroom to support credit, despite deposits growing slower than credit.

 

Commenting on deposit rates, Setty said: “I do not think any one of us in the near term would be tweaking the deposit rates significantly unless the liquidity position improves, and credit growth slows down. There are so many other factors, but otherwise, I do not think there will be any significant movement in the deposit rates.”

 

Additionally, he said that the trade deals are extremely positive for the economy and there are several ways in which the overall economy gets impacted positively. “I see many areas where SBI is well positioned to take advantage of the emerging scenario,” he said, adding that the trade deals with the EU, Oman, New Zealand, and the US indicate that diversification of markets is available now for Indian companies.

 

Apart from corporates, a large number of MSMEs also will benefit from this, he said.