A big and shocking news has come out from the banking sector of the country. India’s largest public sector bank State Bank of India (SBI) has delivered a performance in the December quarter (Q3FY26) that has caught the attention of the entire financial market. The bank has recorded its biggest ever quarterly profit. Strong loan growth, rising interest income and better asset quality took SBI to new heights, but amidst this rosy picture, the decline in margins has also increased the concern of investors.
The biggest quarterly profit in history
SBI’s standalone net profit in Q3FY26 jumped by nearly 24.5% year-on-year to ₹21,028 crore. The bank’s profit in the same quarter last year was ₹16,891 crore. This figure is considered to be the highest quarterly profit in the history of SBI, which shows the strong earning capacity of the bank.
Strong growth in income and operating profit
The bank’s total income increased by 9.7% to ₹1,40,914 crore in the quarter. Net Interest Income (NII) also registered a growth of about 9% and reached ₹45,190 crore. The special thing was that there was a huge jump in operating profit, which increased by 39.54% to ₹ 32,862 crore. It is clear from this that the core business of the bank is continuously strengthening.
Decline in NIM increases concern
However, amidst the excellent results, the biggest concern was about the Net Interest Margin (NIM). Whole bank NIM stood at 2.99%, while domestic NIM declined by 3 basis points to 3.12%. The share of cheap deposits i.e. CASA ratio also decreased to 39.13%, due to which there may be pressure on margins going forward.
Loan-deposit growth and improvement in asset quality
SBI’s total deposits have crossed ₹57 trillion and advances have crossed ₹46 trillion. Advances registered an increase of more than 15% on annual basis. It is a matter of relief that the asset quality of the bank has further improved. There was a decline of 12.7% in gross NPA and about 15.7% decline in net NPA.
What is the market eyeing next?
The bank’s profit on consolidated basis also stood at ₹21,876 crore. Now investors will keep an eye on SBI’s management outlook and NIM trend in the coming quarters. Despite record profits, pressure on margins could become the next big challenge for the bank.
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