SBI FY26: record profit, cleaner book, digital flywheel

State Bank of India closed FY26 with its highest ever annual net profit of ₹80,032 crore, up 12.88% year on year. Operating profit rose 11.25% to ₹1,23,015 crore. For a bank operating at very large scale, the key message is not only growth, but the consistency of asset quality and capital outcomes alongside that growth.

Total business crossed ₹109 trillion. Deposits stood at ₹59.8 lakh crore and advances at ₹49.3 lakh crore. Whole bank advances grew 16.87% year on year, and deposits grew 11.03%. Return on assets for FY26 was 1.12% and return on equity was 18.57%.

The annual margin picture was stable, with domestic NIM for FY26 at 3.03% and whole bank NIM at 2.91%. However, the quarter-end print was softer: Q4FY26 domestic NIM was 2.93% and whole bank NIM was 2.81%. Management linked the quarterly dip to the impact of a repo rate cut on the EBLR book and a change in corporate loan mix toward more floating rate structures.

Growth stayed broad-based across segments

SBI’s credit growth was not driven by a single pocket. Domestic advances grew 16.33% year on year, while foreign offices advances grew 20.01%.

Retail Personal advances rose 15.22% to ₹17,35,778 crore. Within retail, home loans remained the largest book at ₹9,44,210 crore, growing 13.66% with a GNPA ratio of 0.60%. Auto loans were ₹1,37,909 crore with 8.50% growth and GNPA of 0.43%. Xpress Credit stood at ₹3,76,003 crore with 7.39% growth and GNPA of 1.08%. Personal gold loans grew sharply to ₹1,05,781 crore.

Agri advances grew 19.68% to ₹4,17,097 crore. SME advances grew 20.99% to ₹6,12,222 crore. Corporate advances grew 14.83% to ₹14,24,589 crore.

The corporate rating mix also improved in reported quality. AAA exposures increased to 45% in March 2026 from 42% in March 2025, while BB and below declined to 6% from 8%.

Financial summary

Asset quality remained the key differentiator

SBI reported industry-leading asset quality outcomes in FY26. Gross NPA ratio improved to 1.49% from 1.82% and net NPA ratio improved to 0.39% from 0.47%. The bank also highlighted that NPA ratios are at more than two-decade lows.

Credit cost for FY26 was contained at 0.37%. Slippage ratio for FY26 was 0.54%.

Provisioning remains a central comfort point. Provision coverage ratio was 74.36% and PCR including AUCA was 91.97%. SBI also disclosed additional non-NPA provisions not included in PCR of ₹29,713 crore, which it described as around 158% of net NPAs.

In the NPA movement table, fresh slippages for FY26 were ₹22,678 crore compared with ₹20,818 crore in FY25, but the closing GNPA stock still declined to ₹73,452 crore.

Treasury and quarterly volatility: what changed in Q4

The full-year performance was strong, but Q4 had visible volatility in non-interest income due to investment revaluation. In the quarterly table, profit or loss on sale or revaluation of investments was negative in Q4FY26 at -₹1,471 crore.

In the analyst meet, management stated that the MTM loss in Q4 was around ₹4,520 crore versus about ₹143 crore in Q3, and clarified that this MTM is routed through non-interest income.

Despite this, fee income trends were supportive. FY26 fee income rose 14.17% to ₹36,013 crore. Loan processing charges rose 28.17% to ₹7,725 crore. Management said the increase came from rebalancing pricing by reducing concessions and charging appropriately across retail and corporate, rather than only pushing volume.

Cost ratios improved at the annual level. Cost to income ratio was 50.11% in FY26 compared with 51.64% in FY25, and cost to average assets reduced to 1.73% from 1.84%.

Deposits and the liability franchise

Deposits grew 11.03% year on year to ₹59,75,642 crore. Domestic deposits rose 10.96% to ₹57,32,960 crore and foreign office deposits rose 12.70%.

CASA deposits grew 9.53% to ₹22,62,011 crore, while term deposits grew 11.90% to ₹34,70,949 crore. Savings deposits grew 10.60%.

CASA ratio stood at 39.46% as of March 2026 versus 39.97% in March 2025. However, SBI pointed to sequential improvement from December 2025.

Management also discussed an approach to reduce higher-cost wholesale deposits while pushing CASA mobilisation through campaigns and deeper engagement.

Digital journey and operating model shift

SBI’s operating model is increasingly anchored around digital channels. The bank disclosed that 98.7% of transactions occurred through alternate channels.

YONO is central to this shift. SBI reported 10.02 crore registered YONO users as of FY26 and stated that 66% of savings accounts were opened through YONO in FY26.

The bank also highlighted AI and analytics-led execution. Advances sourced through analytical leads were ₹1,80,518 crore in FY26, up 45% year on year. SBI also stated it has operationalised several in-house Generative AI solutions for staff and contact centre knowledge management, as well as back-office automation.

Capital, liquidity, and forward look

Capital adequacy strengthened. At March 2026, CRAR was 15.40% and CET-1 was 12.29%. RWA to total assets declined to 51.98%.

On liquidity, management disclosed average LCR for the quarter at around 124 and indicated a comfort operating band around 115 to 120.

Management provided forward guidance on key operating metrics. For FY27, it guided domestic NIM above 3% for the full year, credit growth in the range of 13% to 15%, and a credit cost guidance of 50 bps. It also highlighted that the industry is moving toward expected credit loss provisioning from April 2027 and said SBI is preparing models for a smooth transition.

On capital and value unlocking, management said SBI is working toward listing SBI AMC and expects to complete it within the current financial year.

Takeaways for investors

SBI’s FY26 print is defined by three pillars: sustained profitability at scale, improved asset quality at multi-decade lows, and stronger capital ratios. The bank also continues to build operating leverage through digital adoption and analytics-led execution.

The near-term variables to watch are margin behaviour in a competitive deposit environment and treasury-related volatility in quarterly non-interest income. However, SBI’s provisioning buffers, capital position, and broad-based loan growth provide a solid base as it enters FY27.