SBI Q2 Results: Net Profit Soars Nearly 10% On Lower NPAs, Bad Loans Shrink; Capital Strength Surges

Today, State Bank of India (SBI) reported a steady Q2FY26 performance with a strong rise in key profitability measures. Interest expenses climbed 6.12% to Rs 76,670 crore, while interest income jumped 5.08% to Rs 1,19,654 crore. As a result, net interest income increased to Rs 42,984 crore by 3.28% YoY and 4.65% sequentially. The Net Interest Margin (Domestic) remained at 3.09%, rising 7 bps QoQ but down 18 bps YoY.

Strong income growth and controlled expenses helped SBI's operating profit to climb 8.91% YoY to Rs 31,904 crore. Loan loss provisions fell to Rs 4,132 crore, a sequential decline of 16.25%. Consequently, profit after tax increased to Rs 20,160 crore by 5.22% QoQ and 9.97% YoY. For H1FY26, the bank recorded an 11.18% YoY growth in net profit to Rs 39,320 crore, demonstrating continued progress in core earnings and enhanced operational effectiveness.

Strong growth momentum in Q2FY26 was evident in the bank's balance sheet, which was bolstered by solid deposit accretion and healthy credit expansion. At Rs 44,19,674 crore, gross advances increased 12.73% YoY and 3.88% sequentially, driven by rises in domestic corporate advances of 7.10% and domestic retail personal loans of 14.09%. Home loans had a strong 15.22% YoY rise within the retail market. Deposits climbed 9.27% YoY to Rs 55,91,700 crore, with domestic CASA deposits gaining 8.06% and term deposits growing 9.91%.

The CASA ratio was 39.63%, down 40 bps YoY but up 27 bps sequentially. The bank reported improvements in asset quality, with Gross NPA falling to Rs 76,243 crore (down 8.55% YoY and 2.30% QoQ) and Net NPA falling to Rs 18,460 crore (down 9.04% YoY and 7.28% QoQ), indicating sound risk management and robust recoveries.

In Q2FY26, the bank's asset quality continued to improve thanks to improved recoveries and controlled slippages. While the Net NPA ratio dropped to 0.42%, the Gross NPA ratio decreased 40 bps YoY and 10 bps sequentially to 1.73%. Stronger credit discipline is seen in the slippage ratio, which dropped to 0.45% from 0.75% in the prior quarter.

At 0.39%, the credit cost was flat. With the CET-1 ratio at 11.47%, the Tier-1 ratio at 12.67%, and the overall Capital Adequacy Ratio (CAR) at 14.62%, the bank maintained a strong position on the capital front, demonstrating strong YoY improvements of 152 bps, 135 bps, and 86 bps, respectively, guaranteeing strong capitalization and resilience to support future growth.