India’s banking giant, State Bank of India (SBI), has delivered a noteworthy performance in Q2 of FY26, demonstrating both growth and areas to watch.
Profit & Big Gains
For the quarter ended September 30, 2025, SBI reported a consolidated net profit of approximately ₹21,504 crore — up about 6.4 % year-on-year. On a standalone basis, the bank’s profit rose by about 10 % to ~₹20,160 crore. A meaningful contributing factor: the bank realised one-time gains from its divestment in Yes Bank, boosting other income.
Lending Growth & Deposits Momentum
Credit growth was robust. Advances grew around 12.7 % year-on-year, driven by retail lending, SME and agricultural advances. mint+1 Deposits also increased by ~9.3 %, with the CASA (current account + savings account) ratio hovering at ~39.6 %.
Margins & Asset Quality: Mixed Signals
While NII (net interest income) rose by about 3.3 % to ~₹42,984 crore, the domestic Net Interest Margin (NIM) eased to 3.09 %, showing pressure in yield versus cost of funds. On the asset‐quality front, things look fairly strong: gross NPA ratio improved to ~1.73 % and net NPA to ~0.42 %.
What This Means for Investors & Market Watchers
SBI’s result is a blend of strength and caution. The growth in loan book and profits is encouraging, especially in the retail and SME segments. But margin compression (declining NIM) remains a concern, and reliance on one-time gains isn’t a sustainable engine for long-term profitability.
Key take-aways for you:
- Lending momentum is back: Credit growth is strong, especially in retail – a positive sign.
- Deposit growth lags slightly but is healthy; keep an eye on CASA ratio as it affects margins.
- Margin pressure persists: A declining NIM means profitability could be squeezed if funding costs rise further.
- Asset quality remains among the better in the banking sector: Low NPAs are a plus.
- One-time gains overplayed: While the Yes Bank stake sale boosted profits, future quarters need core income to carry the load.
Bottom line: If you’re tracking India’s banking space, SBI remains a key indicator. Its Q2 shows that operational momentum is intact, but structural challenges (margins, cost of funds) remain. For your blog readers, this means: “good numbers, but don’t lose sight of what’s under the surface.”