India’s largest bank just delivered a quarter that beat the Street, and it did so on the back of two very different engines: a one-time gain from selling stakes in its own group companies, and a loan book that keeps growing at a pace most rivals would envy. State Bank of India on Tuesday reported a standalone net profit of Rs 23,038 crore for the July-September quarter of FY27, up 14.28 percent from Rs 20,160 crore in the same quarter last year.
The number also edged past analyst expectations. A CNBC-TV18 poll had pegged profit at Rs 22,859 crore, and the bank cleared that bar even as treasury losses dragged other income lower. The result sets the tone for the rest of the banking season, because when SBI’s loan book grows, it usually says something about credit demand across the whole economy.
What drove the profit jump
The single biggest contributor was an exceptional gain of Rs 7,289 crore, up from Rs 4,593 crore a year ago. The bank booked gains from selling shares in SBI Funds Management, the National Stock Exchange and ARCIL during the quarter. Chairman C S Setty told reporters after the results that the stake sale in SBI Funds Management alone generated a pre-tax gain of Rs 7,288.5 crore in the first half of the financial year, with the gain recognised in the second quarter.
Strip that out, and the core story still holds up. Net interest income, the difference between what the bank earns on loans and pays on deposits, rose 14.7 percent year on year to Rs 49,143 crore, from Rs 42,847 crore a year earlier. That too beat the CNBC-TV18 poll estimate of Rs 47,901 crore. Interest earned climbed to Rs 1.32 lakh crore, while total income for the quarter rose to Rs 1,43,796 crore from Rs 1,34,979 crore last year.
Not everything moved in the right direction. Other income fell 24 percent to Rs 11,777 crore from Rs 15,463 crore, weighed down by treasury losses. Provisions for bad loans, however, fell to Rs 2,759 crore, reflecting the cleaner loan book the bank now carries.
Loans grew nearly 18 percent, deposits crossed Rs 62 lakh crore
SBI’s gross advances jumped 17.84 percent year on year to Rs 52.08 lakh crore as of September 30, 2026. The growth was broad-based rather than concentrated in one segment:
- Agriculture advances rose 22.64 percent, the fastest among major segments.
- SME advances grew 21.97 percent, showing small businesses are still borrowing to expand.
- Retail personal loans increased 14.54 percent to Rs 18.15 lakh crore, helped by gold loans.
- Corporate advances rose 16.12 percent, a sign that large companies are also drawing credit again.
On the funding side, total deposits grew 12.27 percent to Rs 62.78 lakh crore. Current account and savings account deposits rose 8.13 percent, though the CASA ratio slipped to 38.32 percent from 39.63 percent a year ago, as customers continued to shift money into higher-yielding term deposits. The bank said its deposit growth included 10.9 billion dollars mobilised through its FCNR (B) scheme for non-resident Indians; excluding that, deposit growth stood at around 10.5 percent.
Put together, SBI’s total business crossed Rs 115 lakh crore during the quarter, a scale no other Indian bank comes close to matching.
Bad loans at their lowest in over two decades
For a bank of SBI’s size, the asset quality numbers may matter even more than the profit figure. The gross non-performing asset ratio fell to 1.39 percent of gross advances, down from 1.73 percent a year ago and 1.47 percent in the June quarter. Net NPAs eased to 0.36 percent from 0.42 percent last year. The bank’s investor presentation described these as the lowest NPA levels in more than two decades.
The slippage ratio, which tracks fresh loans turning bad, improved to 0.41 percent, while credit cost fell to 0.22 percent from 0.39 percent a year ago. The capital adequacy ratio stood at a comfortable 16.09 percent, up from 14.62 percent a year earlier, giving the bank plenty of headroom to keep lending.
What the bank is guiding for the rest of FY27
Chairman Setty reiterated the bank’s guidance of 14 to 15 percent credit growth for the full financial year, and said SBI hopes to maintain its net interest margin above 3 percent. Domestic net interest margin improved 11 basis points sequentially to 3.11 percent in the September quarter, helped by lower deposit costs.
On a consolidated basis, which includes the bank’s subsidiaries, profit rose 20 percent to Rs 25,361 crore from Rs 21,137 crore a year ago.
The market, though, had a cooler reaction. SBI shares gave up their intraday gains on Tuesday and closed 1.7 percent lower at Rs 970, a reminder that a good quarter does not always mean a good day for the stock. For long-term watchers, the more durable takeaway is the combination on display: near-18 percent loan growth, two-decade-low bad loans, and a capital buffer strong enough to fund another year of expansion.
FAQs
What was SBI’s net profit in Q2 FY27?
SBI reported a standalone net profit of Rs 23,038 crore for the July-September 2026 quarter, up 14.28 percent from Rs 20,160 crore a year earlier.
Why did SBI’s profit rise so sharply?
The main driver was an exceptional gain of Rs 7,289 crore from selling stakes in SBI Funds Management, NSE and ARCIL, along with 14.7 percent growth in net interest income to Rs 49,143 crore.
How much did SBI’s loans and deposits grow?
Gross advances grew 17.84 percent to Rs 52.08 lakh crore, while total deposits rose 12.27 percent to Rs 62.78 lakh crore as of September 30, 2026.
What is SBI’s current NPA level?
Gross NPAs fell to 1.39 percent and net NPAs to 0.36 percent, the bank’s lowest levels in more than two decades.
What is SBI’s credit growth guidance for FY27?
Chairman C S Setty retained the guidance of 14 to 15 percent credit growth for the full year, with net interest margin targeted above 3 percent.
SBI’s September quarter shows a bank growing fast without letting its loan book slip. Whether the December quarter can repeat that balance, especially without another large stake-sale gain, is the question investors will watch next.
