SBI Q3 Results: Profit Soars 24% to Record ₹21,028 Crore

Introduction: SBI Sets New Profit Benchmark

State Bank of India (SBI), the country's largest public sector lender, announced a landmark performance for the third quarter of the fiscal year 2026. The bank reported its highest-ever quarterly standalone net profit of ₹21,028 crore, marking a significant 24.5% year-on-year (YoY) increase. This robust growth, which comfortably surpassed market expectations, was primarily driven by healthy loan expansion, stable core income, and a consistent improvement in asset quality. The strong results prompted a positive market reaction, with the bank's stock gaining nearly 7% following the announcement.

Stellar Financial Performance in Detail

The bank's financial statements for the quarter ending December 31, 2025, revealed strength across key metrics. Net Interest Income (NII), the core measure of a bank's profitability, grew by 9.04% YoY to reach ₹45,190 crore. Total income for the quarter saw a 9.69% increase, standing at ₹1,40,915 crore. The operating profit also demonstrated impressive growth, surging by 39.54% YoY to ₹32,862 crore. This performance was supported by a one-time dividend income of approximately ₹2,200 crore from SBI Mutual Fund and treasury gains of around ₹3,280 crore, which helped bolster the non-interest income stream.

Asset Quality Continues to Improve

A standout feature of SBI's Q3 results was the sustained improvement in its asset quality. The Gross Non-Performing Assets (GNPA) ratio saw a significant decline, falling to 1.57% as of December 2025 from 2.07% in the same period last year. Similarly, the Net Non-Performing Assets (NNPA) ratio improved, dropping to 0.39% from 0.53% YoY. In absolute terms, gross NPAs fell to ₹73,636.8 crore, while net NPAs stood at ₹18,012 crore. The bank's Provision Coverage Ratio (PCR), including Advances Under Collection Account (AUCA), remained strong at 92.37%, indicating a well-cushioned balance sheet against potential loan defaults. Fresh slippages for the quarter were contained at 0.40%.

Robust Balance Sheet Growth

SBI's balance sheet expanded, crossing the ₹103 lakh crore milestone in total business. Gross advances grew by a healthy 15.14% YoY to ₹46,83,508 crore. This credit growth was broad-based, with domestic advances leading the way. The retail personal loans segment grew by 15%, SME advances expanded by a sharp 21%, and agricultural loans increased by 16%. Corporate credit also saw a rebound, growing by 13.37%. On the liabilities side, total deposits increased by 9.02% YoY to ₹57,01,309 crore. The CASA (Current Account Savings Account) ratio stood at 39.13% as of December 2025.

Key Financial Metrics Summary

Margins, Capital, and Provisions

The bank's domestic Net Interest Margin (NIM) for the quarter was 3.12%, showing a slight compression from 3.15% in the corresponding quarter of the previous year. For the nine months ended December 2025, the domestic NIM was 3.08%. SBI's capital position remains comfortable, with the Capital Adequacy Ratio (CAR) standing at 14.04% as of December 31, 2025, well above the regulatory requirement. However, total provisions for the quarter expanded significantly by 77.71% to ₹11,834 crore from ₹6,659 crore in Q3 FY25, reflecting a prudent approach to provisioning.

Management Outlook and Guidance

Following the strong quarterly performance, the bank's management has expressed confidence in its growth trajectory. SBI raised its credit growth guidance for the full fiscal year 2026 to a range of 13% to 15%, up from the earlier projection of 12% to 14%. The management also indicated its intention to maintain domestic NIMs above the 3% mark and keep the cost-to-income ratio around 50%. This positive outlook signals continued momentum in both lending and operational efficiency.

Market Reaction and Brokerage Views

The record-breaking results were well-received by the market. SBI's stock jumped 6.89% to ₹1139.90 immediately following the announcement. The strong performance also led several domestic brokerages to upgrade their ratings and price targets for the stock. One research house maintained its 'buy' rating and raised its target price to ₹1,200, while another lifted its target to ₹1,300, citing the bank's enhanced credit growth guidance and strong fundamentals.

Conclusion

State Bank of India's Q3 FY26 results underscore its dominant position in the Indian banking sector. The combination of record profitability, robust loan growth across all segments, and steadily improving asset quality paints a picture of financial strength and operational excellence. With a fortified balance sheet and a positive outlook from management, SBI appears well-positioned to capitalize on India's economic growth and continue delivering value to its stakeholders.