State Bank of India (SBI), India’s largest lender by assets, reported a 14.3% year-on-year rise in net profit in the second quarter, helped by strong loan demand and a one-time gain from selling a stake in its fund management subsidiary.
The lender posted a net profit of Rs. 23,038 crore (USD 2.43 billion) for the quarter ended September 30, compared with Rs. 20,160 crore in the year-ago period.
Credit growth across Indian banks remained strong during the September quarter, driven by lending to businesses and households. Business credit remained robust, including loans to small and medium enterprises, while retail demand stayed resilient, supported by housing and vehicle loans.
Indian banks also raised nearly USD 133 billion through foreign currency deposits from non-resident Indians under a special Reserve Bank of India (RBI) scheme. The deposits boosted lenders' funding and supported loan growth.
SBI’s net interest income (NII), the difference between interest earned on loans and interest paid on deposits, rose 14.7% year on year to Rs. 49,143 crore during the quarter.
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The bank’s earnings also benefited from the sale of nearly 6% of its stake in SBI Funds Management, including through a pre-initial public offering (IPO) placement. SBI recorded a one-time gain of Rs. 7,288 crore from the stake sale during the September quarter.
Separately, SBI divested a 0.65% stake in the National Stock Exchange (NSE) during its IPO. The bank said it credited the profit from this sale to its capital reserve and did not route it through the profit and loss account.
The September-quarter performance reflected stronger credit demand across business and retail segments, alongside the one-time benefit from the SBI Funds Management stake sale.
Gross loans increased nearly 18%, while deposits rose 12.3%. SBI’s domestic net interest margin expanded 11 basis points to 3.11% from the previous quarter.
Its gross non-performing asset ratio improved to 1.39% from 1.47%, while higher-cost deposits raised under the RBI scheme supported funding but pressured margins. Analysts expected SBI's impact to remain limited.