State Bank of India Reports Strong Q2FY26 Results with Improved Asset Quality and Profit Growth

State Bank of India (SBI) has announced its Q2FY26 results, showcasing a robust performance in key financial metrics. Interest expenses rose by 6.12% to Rs 76,670 crore, while interest income increased by 5.08% to Rs 1,19,654 crore. Consequently, net interest income saw a rise of 3.28% year-on-year and 4.65% sequentially, reaching Rs 42,984 crore. The Net Interest Margin (Domestic) stood at 3.09%, marking a 7 basis points increase quarter-on-quarter but an 18 basis points decline year-on-year.

Asset quality improvements were notable in Q2FY26, with Gross NPA reducing to Rs 76,243 crore, reflecting an 8.55% year-on-year and a 2.30% quarter-on-quarter decrease. Net NPA also fell to Rs 18,460 crore, down by 9.04% year-on-year and 7.28% quarter-on-quarter. This indicates effective risk management and strong recovery efforts by the bank.

SBI's balance sheet showed strong growth momentum in Q2FY26, supported by solid deposit accretion and healthy credit expansion. Gross advances reached Rs 44,19,674 crore, marking a 12.73% year-on-year and a 3.88% sequential increase. This growth was driven by domestic corporate advances rising by 7.10% and domestic retail personal loans increasing by 14.09%. Home loans within the retail market saw a significant rise of 15.22% year-on-year.

Deposits grew by 9.27% year-on-year to Rs 55,91,700 crore, with domestic CASA deposits increasing by 8.06% and term deposits growing by 9.91%. The CASA ratio was recorded at 39.63%, which is a decrease of 40 basis points year-on-year but an increase of 27 basis points sequentially.

SBI's operating profit climbed by 8.91% year-on-year to Rs 31,904 crore due to strong income growth and controlled expenses. Loan loss provisions decreased to Rs 4,132 crore, showing a sequential decline of 16.25%. As a result, profit after tax increased by 5.22% quarter-on-quarter and 9.97% year-on-year to Rs 20,160 crore.

For the first half of FY26, the bank recorded an impressive net profit growth of 11.18% year-on-year to Rs 39,320 crore, highlighting continued progress in core earnings and enhanced operational effectiveness.

Capital Adequacy and Asset Quality

The bank maintained strong capital adequacy ratios with CET-1 at 11.47%, Tier-1 at 12.67%, and overall Capital Adequacy Ratio (CAR) at 14.62%. These figures represent significant year-on-year improvements of 152 basis points for CET-1, 135 basis points for Tier-1, and an overall CAR improvement of 86 basis points.

In Q2FY26, SBI's asset quality continued to improve due to better recoveries and controlled slippages. The Net NPA ratio dropped to 0.42%, while the Gross NPA ratio decreased by 40 basis points year-on-year and by 10 basis points sequentially to reach 1.73%. The slippage ratio also improved significantly from the previous quarter's figure of 0.75% to just 0.45%, indicating stronger credit discipline.

The credit cost remained stable at 0.39%. These results demonstrate SBI's strong capitalization and resilience in supporting future growth initiatives.