Improving credit growth trajectory, steady margins positive for SBI

SBI's strong credit growth, stable NIMs, and improved asset quality drive optimism as analysts raise earnings and price targets for H2 FY26

State  Bank of India (SBI) reported good credit growth of 13 per cent year-on-year (Y-o-Y) and beat consensus estimates on net interest income (NII), current account savings account (Casa) deposits and fees. On a sequential basis, core net interest margins (NIMs) rose 5 basis points (bps), loans grew 4 per cent and fees 12 per cent. 

Core return on assets (RoA) stood at 1.05 per cent while the reported RoA was 1.17 per cent. The core pre-provision operating profit (PPOP) grew 2 per cent Q-o-Q and 9 per cent Y-o-Y. While asset quality improved, slippages and non-performing loans (NPL) declined.