Summary:
SBI reported a 10% YoY rise in Q1 FY27 net profit to ₹21,121 crore, supported by higher NII, strong loan growth and lower provisions. Gross advances grew 18.63%, while asset quality improved sharply, with gross and net NPAs falling to 1.47% and 0.38%, their lowest levels in over two decades. Despite strong earnings, SBI shares fell 1.09% after an initial rally, as investors booked profits and remained cautious about weaker treasury and forex income.
State Bank of India (SBI) posted a 10% year-over-year (YoY) rise in net profit at ₹21,121 crore in Q1 FY27 against ₹19,160 crore in the previous fiscal year’s corresponding quarter. The profit was buoyed by higher net interest income (NII), better loan growth, and reduced loan-loss provisions.
Net interest income rose 15% YoY to ₹46,992 crore from ₹40,907 crore. Non-interest income, on the other hand, decreased 9% to ₹15,923 crore owing primarily to a fall of 32% in treasury income to ₹4,319 crore and 70% in foreign exchange and derivatives income to ₹497 crore. Loan loss provisions witnessed a 32% decrease YoY to ₹3,359 crore, which boosted profitability.
NIM and Business Growth
SBI’s domestic net interest margin (NIM) is estimated to be at 3% in Q1 FY27, up from 2.93% in the sequential quarters, whereas its whole bank NIM is estimated to be 2.86%, up 5 basis points from QoQ. SBI plans to sustain 3% domestic NIM for FY27.
The gross advances of the lender increased 18.63% YoY to ₹50.47 lakh crore, due to growth of 25.43% in agriculture, 22.33% in SMEs, 15.15% in retail personal loans, and 18.05% in corporates. While total deposits have risen 9.73% YoY to ₹60.06 lakh crore, CASA ratio decreased slightly to 39.24% from 39.36%.
SBI’s overall business crossed ₹110 lakh crore during the quarter. The bank expects credit growth of 14-15% and deposit growth of 10-11% in FY27.
Asset Quality Hits Lowest Level in Over Two Decades
There were significant improvements in asset quality with gross non-performing assets dropping by 36 basis points YoY to 1.47%, down from 1.83% last year. The net NPA was 0.38% against 0.47% earlier, with both ratios being at their lowest level for more than two decades.
The slippage ratio decreased by 18 basis points YoY to 0.57%, whereas the credit cost was 0.27%. Provision coverage ratio (PCR) was 74.20%, up to 91.82% on inclusion of AUCA. Gross advances under international banking business increased by 21.38% YoY or 9.97% in dollars due to external commercial borrowings and trade finance.
International Banking and FCNR Deposits
According to SBI, international client credits have been growing on a sequential basis with support from their US operations, London, GIFT city, Middle East and East Asia branches. According to the chairman of the bank CS Setty, SBI has managed to mobilize USD 6 billion in FCNR(B) deposits and will mobilize another USD 10 billion by end of September 2026 under the concessional swap scheme from the RBI.
The bank has sanctioned ₹32,570 crore and disbursed ₹25,400 crore under ECLGS 5.0 for collateral-free and government-guaranteed loans for businesses impacted by West Asia conflict.
Also Read About: RBI Keeps FCNR window open
Why Did SBI Shares Fall After the Results?
Despite strong Q1 FY27 earnings, shares of SBI fell by 1.09% to ₹1,085.20 during early trading hours on August 10. After the company’s earnings were announced, shares of SBI had gained favorably, rising up to 3.6% to ₹1,124.50.
The subsequent decline seems to have been triggered due to profit booking after the gains following the earnings report and worries over lower non-interest income, especially treasury and forex income. However, loan growth, margin improvement, and record-low NPAs continue to be strong positives for SBI.
