SBI Q2 Net Profit Climbs 14% to Rs 23,038 Crore on Strong 15% NII Surge and Improving Asset Quality
State Bank of India (SBI), the nation's largest commercial lender, reported a 14.3% year-on-year rise in standalone net profit to Rs 23,038 crore for the quarter ended September 30, 2026 (Q2 FY27), compared with Rs 20,160 crore in the corresponding period of the previous fiscal year.
The public sector banking behemoth's bottom-line performance was steered by double-digit growth in its core lending income alongside a sharp reduction in provisions for bad loans. On a consolidated basis, the SBI Group recorded a 20% year-on-year surge in net profit to Rs 25,361 crore, up from Rs 21,137 crore in Q2 FY26.
Core Income and Margin Metrics
Net Interest Income (NII)—the difference between interest earned on loans and interest expended on deposits—grew 14.7% year-on-year to Rs 49,143 crore in the July–September quarter, up from Rs 42,847 crore a year earlier. Sequentially, NII expanded by 4.6% from Rs 46,992 crore recorded in the April–June quarter (Q1 FY27).
Total standalone income rose to Rs 1,43,796 crore from Rs 1,34,979 crore in the year-ago quarter, supported by interest earned increasing to Rs 1,32,019 crore from Rs 1,19,654 crore. The lender's domestic Net Interest Margin (NIM) stood at 3.11% for the quarter.
Significant Asset Quality Improvement
The bank continued its multi-year asset quality cleanup, reporting lower non-performing asset (NPA) ratios across categories:
- Gross NPAs: Dropped to 1.39% of gross advances as of September 30, 2026, improving from 1.73% a year earlier and 1.47% in the preceding quarter.
- Net NPAs: Declined to 0.36% of advances, compared to 0.42% in Q2 FY26 and 0.38% in Q1 FY27.
- Provisions for Bad Loans: Fell to Rs 2,759 crore during the quarter against Rs 4,132 crore in the corresponding quarter of the previous year. Total provisions and contingencies dropped to Rs 4,217 crore from Rs 5,400 crore a year ago.
- Slippage Ratio: Settled at 0.50% for the quarter.
Robust Credit Offtake Across Segments
Gross advances across the whole bank expanded by 17.84% year-on-year, driven by broad-based credit demand in the Indian economy. Domestic loan books expanded by 16.94% YoY.
Breakdown of Loan Growth:
- Agriculture Advances: Jumped 22.64% year-on-year.
- SME Lending: Rose 21.97% compared to the year-ago quarter.
- Corporate Credit: Grew 16.12% year-on-year.
- Retail Personal Loans: Advanced 14.54% over the same period.
Total deposits grew 12.27% year-on-year, with the current account and savings account (CASA) ratio standing at 38.32% as of September 2026. The bank's total business size reached approximately Rs 115 trillion, comprising Rs 63 trillion in deposits and Rs 52 trillion in advances.
Capital Adequacy and Market Reaction
SBI strengthened its capital buffers, with its Capital Adequacy Ratio (CAR) improving to 16.09% at the end of September 2026, compared to 14.62% a year earlier. Return on Assets (RoA) and Return on Equity (RoE) for the half year stood at 1.14% and 18.68%, respectively.
On Dalal Street, SBI shares traded in a narrow range following the earnings announcement, hovering around Rs 978–980 per share on the National Stock Exchange as market participants digested a drop in other non-interest income and moderating operating profits despite the solid core NII expansion.
