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    State Bank of India Q1 FY27 earnings call

    SBIN
    Financial Services·7 Aug 2026
    Management Summary

    State Bank of India reported a record net profit of ₹21,121 crore for Q1 FY27, driven by strong operating performance and resilient domestic NIM of 3%. The bank demonstrated robust balance sheet growth, with total business exceeding ₹110 trillion and significant improvements in asset quality, reaching the lowest NPA levels in over two decades. While deposit and advances growth were modest compared to some peers, management highlighted strategic initiatives in digital transformation, risk management, and a focus on sustainable, broad-based credit growth across segments.

    Highlights

    5

    • Record net profit of ₹21,121 crore, supported by healthy operating performance and disciplined cost management.

    • Operating Profit grew by 9.77% YoY, indicating strong underlying business performance.

    • Domestic Net Interest Margin (NIM) maintained at 3%, reinforcing confidence in full-year guidance.

    • Robust balance sheet expansion with total business crossing ₹110 trillion, deposits >₹60 trillion, and advances >₹50 trillion.

    • Gross and net NPA ratios at their lowest in over two decades, reflecting improved asset quality and risk management.

    Concerns

    4

    • Deposit growth of 0.5% and advances growth of 0.32% were lower than some other banks, though overall business grew 1.33%.

    • Uptick in gross and net NPA absolute numbers and SMA 2, with fresh slippages rising to ₹7,000 crore from ₹5,500 crore.

    • Miscellaneous expenses decreased by approximately ₹3,600 crore, and miscellaneous income by ₹4,000 crore, raising questions about sustainability.

    • Forex revenues/fee income dropped to ₹500 crore due to market volatility and new RBI guidelines, impacting non-interest income.

    Key financials

    Metrics

    10

    Periods

    2

    Headline

    9
    • Net Profit
      ₹21,121 Cr
    • Operating Profit Growth
      9.8%
      YoY+9.8%
    • Domestic NIM
      3%
    • Total Business
      ₹110.00L Cr
    • Deposits
      ₹60.00L Cr

    Q1 FY27

    1
    • Fresh Slippages
      ₹7,046 Cr

    Segment breakdown

    Gold Loans (Personal)
    ₹1.3L Cr Outstanding8.5% Yield
    Gold Loans (Agri)
    ₹1.9L Cr Outstanding8.9% Yield
    Total Gold Loans
    ₹3.1L Cr Outstanding
    Fresh Slippages (Agri)
    ₹2,600 Cr Amount
    Fresh Slippages (SME)
    ₹2,300 Cr Amount
    Fresh Slippages (Personal Segment)
    ₹2,100 Cr Amount
    List

    Capital allocation

    2
    high confidence
    CategoryHeadline
    M&A

    SBI Funds Management Limited

    divestment · closed

    Liquidity

    Liquidity disclosed

    Excess SLR of ₹3.06 lakh crore as on June 30, 2026, and ₹4 lakh crore as of call date, contributing to NIM stability.

    Guidance & targets

    7
    CategoryTargetPriority
    Profitability
    Domestic Net Interest Margin (NIM)
    3%
    		High
    Credit Growth
    Overall Credit Growth
    14-15%
    		High
    Credit Growth
    Corporate Credit Growth
    14-15%
    		High
    Fee Income
    Fee Income as % of Overall Income
    20%
    		Medium
    Funding
    FCNR(B) Deposit Mobilization
    $10 billion
    		Medium
    Funding
    Total Deposit Mobilization (from FCNR(B))
    ₹1 trillion
    		Medium
    Expenses
    Pension Provision Reduction
    Significant reduction
    		Medium

    What to watch in Q2 FY27

    5

    ECL framework impact numbers

    Q2 FY27
    CurrentAssessment ongoing, no numbers disclosed
    TargetSpecific numbers on run rate credit cost and net-worth hit

    Why it matters

    To understand the financial implications and capital impact of the new regulatory framework.

    I did promise that in Q1 results, we would be able to give some number. It took longer than what we expected in terms of pushing the whole data into our IT systems. My team tells me that 18th August, probably they would be pushing all the models and data into the IT system. The correct way of doing it is that probably when we meet again in Q2, we will give you the numbers.

    Risks & concerns

    6
    RiskSeverity

    Global geopolitical uncertainty and market volatility

    The first quarter unfolded against a global backdrop marked by geopolitical uncertainty, evolving trade dynamics and continued volatility across commodity and financial markets. — Management acknowledged

    medium

    Competitive pressure in deposit market

    Deposits have become an extremely competitive landscape, with a lot of wholesale deposit rates going up. — Management acknowledged

    medium

    Uptick in NPA/SMA numbers and fresh slippages

    Analyst noted an uptick in gross/net NPA and SMA numbers, and fresh slippages of ₹7,000 crore, which management attributed to Q1 seasonality and successful pullbacks. — Analyst downplayed

    low

    Funding requirements for new emerging businesses

    Analyst questioned how SBI would fund the significant capital expenditure required for new emerging sectors like Data Centers, GPU, hydrogen, and solar. — Analyst acknowledged

    medium

    Impact of Expected Credit Loss (ECL) framework

    Analyst inquired about the potential run rate credit cost and net-worth hit from ECL, with management stating it's hypothetical and not expected to have major immediate impact. — Analyst acknowledged

    medium

    Decrease in forex fee income

    Forex revenues dropped to ₹500 crore due to war-related volatility and new RBI guidelines limiting net open position to $100 million. — Analyst acknowledged

    medium

    Q&A highlights

    8

    “Deposit growth has to be seen from the lens of the liquidity which is available to us and deposits have become an extremely competitive landscape and a lot of wholesale deposit rates have gone up which is not the rate which we are willing to pay. Our retail franchise has done extremely well. If you see our retail deposit, term deposit growth is 14%, continues to be 14%.”

    Analyst questioned the lower growth rates compared to peers and the significant changes in miscellaneous expenses and income, prompting management to explain their strategy on deposits and clarify accounting for expenses.

    asked by Mr. Ashok Ajmera – Ajcon Global

    3 min read7 chapters

    Detailed Narrative

    01

    Q1 FY27 Financial Performance Highlights

    State Bank of India delivered a record net profit of ₹21,121 crore for Q1 FY27, supported by a 9.77% year-on-year growth in operating profit. The domestic Net Interest Margin (NIM) remained resilient at 3%, aligning with the bank's full-year guidance. The balance sheet expanded significantly, with total business crossing ₹110 trillion, deposits exceeding ₹60 trillion, and advances surpassing ₹50 trillion, reflecting broad-based growth across retail, agriculture, MSME, and corporate segments.

    02

    Asset Quality Improvement and Slippage Trends

    The bank achieved its lowest gross and net NPA ratios in over two decades, indicating sustained improvement in asset quality. Despite this, fresh slippages in Q1 FY27 increased sequentially to ₹7,046 crore, with ₹1,400 crore already pulled back. Segment-wise, Agri contributed ₹2,600 crore, SME ₹2,300 crore, and the personal segment ₹2,100 crore to fresh slippages. Management clarified that Q1 typically sees higher slippages and expressed no concern regarding the overall asset quality trend.

    03

    Digital Transformation and Operational Efficiency

    SBI continues to enhance its digital capabilities, launching a digital re-KYC journey and strengthening the YONO ecosystem with new digital customer journeys, including a 3-in-1 onboarding process for savings, Demat, and trading accounts. The bank introduced YONO Ji, an AI-powered virtual assistant, and expanded WhatsApp banking. Technology initiatives like PRISM are strengthening risk management by identifying early signs of stress in borrower accounts and preparing for the Expected Credit Loss (ECL) framework.

    04

    Deposit Franchise and Liquidity Management

    Despite a highly competitive environment, the bank maintained robust deposit growth, with retail term deposits growing 14%. The CASA franchise remains strong, and the bank reported an excess SLR of ₹3.06 lakh crore as of June 30, 2026, increasing to ₹4 lakh crore by the call date, partly due to FCNR(B) flows. Management noted that bulk deposits are treated as a treasury activity and they are selective in accepting high-cost wholesale deposits to maintain NIM stability.

    05

    Credit Growth Strategy and Gold Loan Portfolio

    The bank revised its overall credit growth guidance for FY27 to 14-15% (from 12-14%), with corporate credit growth also targeted at 14-15%. While corporate loan growth was flat sequentially due to MCLR transition and competitive pricing, management expects an uptick. The gold loan portfolio reached ₹3.1 trillion as of June 30, 2026, comprising ₹1.25 trillion in personal gold loans and ₹1.85 trillion in Agri gold loans, with yields in the 8.5-8.9% range. This segment is viewed as opportunistic and ROE-accretive due to low risk weights.

    06

    Fee Income and Miscellaneous Expenses Dynamics

    Fee income has shown positive development, with a potential to increase from 15% to 20% of overall income, driven by loan processing charges, government business, and retail activities. However, forex revenues/fee income dropped to ₹500 crore in Q1 FY27, down from ₹1,002 crore in Q4 FY26, due to geopolitical volatility🌐 and new RBI guidelines. Miscellaneous expenses also saw a significant reduction, partly due to a decision to amortize certain bulk expenses over three quarters to avoid Q4 spikes.

    07

    Capital Allocation and Value Unlocking

    The successful listing of SBI Funds Management Limited was highlighted as a significant milestone in unlocking value. SBI General Insurance is identified as the next potential candidate for listing, though no specific timeline was provided. Management emphasized building a stronger institution for future growth, supported by a strong capital position and prudent risk standards, and is exploring securitization structures for illiquid assets like home loans (₹34 lakh crore) to enhance funding capabilities in the system.

    This is an AI-generated summary of a publicly available earnings call transcript.