State Bank of India delivered a strong Q3 FY26 performance, reporting its highest-ever quarterly net profit of ₹21,028 crore, a 24.49% year-on-year increase. This was supported by robust operating profit growth of 39.54% and healthy credit expansion of 15.14%. The bank maintained strong asset quality with declining NPAs and a solid capital adequacy ratio, reflecting its focus on sustainable value creation amidst a competitive market.
vs Q4 FY26
| Category | Target | Priority |
|---|---|---|
| Credit Growth | Overall Credit Growth→13% to 15% | High |
| Credit Growth | Full Year Credit Growth Guidance→To be given in Q1 | Low |
| Credit Growth | Corporate Credit Growth→Double-digit growth | Medium |
| Margin | Domestic Net Interest Margin (NIM)→3% | High |
| Cost of Funds | Cost of Funds→Remain at current level | High |
| Asset Quality | Recovery Rate from Written-off Accounts→6% to 8% | Medium |
| Digital Adoption | YONO Registered Users→20 crores | High |
| Other Income | Customer Value Enhancement (CVE) Income→$1 billion | Medium |
| Efficiency | Cost to Income Ratio→Below 50 bps | High |
| Profitability | Return on Assets (ROA)→1% | High |
| Interest Rates | MCLR Movement→No movement | High |
| Provisions | Run Rate for Provisions (Staff Expenses, Pension)→Similar to Q3 | High |
| Corporate Banking | Total Undisbursed + Pure Pipeline→₹7.86 lakh crores | High |
State Bank of India reported a robust performance for Q3 FY26, achieving its highest-ever quarterly net profit of ₹21,028 crore, marking a significant 24.49% year-on-year increase. This strong profitability was underpinned by a 39.54% year-on-year growth in operating profit to ₹32,862 crores and a 9% rise in net interest income to ₹45,190 crores, with the domestic Net Interest Margin (NIM) standing at a healthy 3.12%. The bank's total business volume also crossed the ₹103 trillion mark, demonstrating sustained customer trust and operational scale.
Credit growth was a key driver, expanding by 15.14% year-on-year as of December 2025, with all segments contributing. Corporate credit saw a rebound, growing by 13.37%, while retail, agriculture, and SME segments also showed robust growth. The bank revised its credit growth guidance for the current quarter upwards from 12-14% to 13-15%. Deposit growth remained healthy at 9.02% year-on-year, supported by a double-digit growth of 10.32% in current accounts, maintaining a CASA ratio of 39.13%. Retail term deposits grew by a robust 14.54%, and foreign office deposits increased by 8.32% year-on-year.
Asset quality continued to be industry-leading, with Gross NPAs improving by 50 basis points to 1.57% and Net NPAs by 14 basis points to 0.39%. The Provision Coverage Ratio (PCR) also strengthened, rising by 88 basis points year-on-year to 75.54%. The bank remains well-capitalized, with the Capital Adequacy Ratio improving by 101 basis points year-on-year to 14.04%, comfortably above regulatory minimums. The Return on Assets (ROA) remained consistently above 1%, and Return on Equity (ROE) stood at 20.68% for the quarter.
Management highlighted strategic initiatives such as the redesign of its digital operating model through 'YONOisation,' aiming to scale YONO users from 10 crore to 20 crore over the next 2-3 years. The bank also emphasized its focus on strengthening structural drivers for sustainable profitability, productivity, and capital efficiency. The corporate banking pipeline stands at ₹7.86 lakh crores, indicating future growth potential. The bank reiterated its long-term guidance of maintaining a 3% NIM and 1% ROA through economic cycles, and an objective to keep the cost-to-income ratio below 50 bps.
During the Q&A, management addressed queries on the stability of cost of funds, expecting it to remain at current levels for Q4 FY26, with a decision for Q1 FY27. They clarified that the December rate cut did not lead to deposit repricing but noted 75-80% repricing on the asset side. The impact of the new labor codes was minimal, requiring only a ₹16 crore provision. The bank also provided detailed breakdowns of its AUCA pool and gold loan portfolio, demonstrating transparency and confidence in its risk management practices.