India’s largest public sector lender, State Bank of India (SBI), announced a 10% year-on-year rise in standalone net profit for the July–September quarter (Q2 FY26) on November 4, 2025, reaching ₹20,160 crore, compared to ₹18,331 crore in the same period last year. This strong performance exceeded Street estimates, which had anticipated up to a 17% decline. The results were buoyed by robust interest income and gains from the lender’s stake sale in Yes Bank Ltd.
Strong Income Growth and Operational Performance
SBI’s interest income for the quarter stood at ₹1,19,654 crore, up 5% year-on-year, while interest expenditure rose 6% to ₹76,670 crore. This helped the bank deliver a Net Interest Income (NII) of ₹42,984 crore, marking a 3.3% year-on-year increase from ₹41,620 crore in Q2 FY25.
The bank’s operating profit also saw healthy growth, rising 8.9% year-on-year to ₹31,904 crore, compared to ₹29,294 crore in the same period last year. Sequentially, NII improved by 4.7%, indicating sustained momentum in SBI’s core lending operations despite margin pressures.
Exceptional Gains Boost Profitability
A major highlight of the quarter was SBI’s partial divestment of its equity stake in Yes Bank. The bank sold 13.18% of its holding on 17 September 2025 at ₹21.50 per share, generating a profit of ₹4,593.22 crore. The gain was recognised under exceptional items and is set to be transferred to the capital reserve in due course. Following this sale, SBI’s stake in Yes Bank now stands at 10.78% as of 30 September 2025.
Additionally, the bank recorded an extraordinary gain of ₹25.46 crore from the sale of its stake in Jio Payments Bank during the quarter. These one-off items contributed significantly to the overall profitability growth.
Margins and Asset Quality Show Stability
SBI’s Net Interest Margin (NIM) for Q2 FY26 stood at 2.97%, with the domestic NIM recorded at 3.09%. Although marginally lower than last year’s 3.27%, the bank continues to maintain healthy spreads across its lending portfolio.
The lender also demonstrated continued improvement in asset quality. The Gross Non-Performing Asset (NPA) ratio improved by 40 basis points year-on-year to 1.73%, while the Net NPA ratio declined to 0.42% from 0.47%. The Gross NPAs fell to ₹76,243 crore from ₹78,039.7 crore in the previous quarter, while Net NPAs decreased to ₹18,460 crore from ₹19,908 crore.
The Provision Coverage Ratio (PCR) rose to 75.79%, with PCR including AUCA improving to 92.29%, reflecting the bank’s prudent risk management. The slippage ratio improved to 0.45% for Q2, down 6 bps year-on-year, and the credit cost stood at a controlled 0.39%.
Robust Balance Sheet Expansion
SBI’s balance sheet remained strong, with total advances rising 12.7% year-on-year, supported by steady growth across all key lending segments.
- Domestic advances grew 12.3% YoY,
- Retail advances expanded 15.1%, led by
- SME loans up 18.8%,
- Agriculture lending up 14.2%, and
- Retail personal loans up 14.1%.
- Corporate advances rose 7.1%, while foreign office advances grew 15% YoY.
On the deposit side, the bank reported a 9.3% year-on-year increase, with CASA (Current Account Savings Account) deposits rising 8.1%. The CASA ratio stood at 39.63% as of 30 September 2025, highlighting the bank’s stable low-cost deposit base.
Digital Momentum and Capital Strength
SBI continued to strengthen its digital footprint. Over 64% of savings bank accounts were opened digitally through the YONO platform during Q2 FY26. The share of alternate channels in total transactions grew from 98.2% in H1 FY25 to 98.6% in H1 FY26, underlining the bank’s successful digital transformation journey.
The bank also maintained a healthy Capital Adequacy Ratio (CAR) of 14.62%, well above regulatory requirements, ensuring a solid foundation for future growth.
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Conclusion
State Bank of India’s Q2 FY26 performance highlights its resilience and strong operational execution. Despite margin pressures, the bank delivered double-digit profit growth, supported by higher interest income, efficient cost management, and one-off capital gains. The continued improvement in asset quality and strong balance sheet growth underscore SBI’s stability and leadership within India’s banking sector.
As the nation’s largest lender, SBI’s consistent digital initiatives and prudent lending strategies continue to strengthen its position as a key driver of India’s financial system.
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