- SBI expects RBI to raise repo rate by 50 basis points in December
- SBI forecasts 16% corporate credit growth and 14-15% overall credit growth
- Domestic net interest margin improved by 11 basis points sequentially in Q2
State Bank of India (SBI) not only expects the Reserve Bank of India (RBI) to raise the repo rate by 50 basis points in December but also recommends such a move, according to Chairman CS Setty. Speaking at the bank's post-results analyst call Setty said SBI remains watchful of developments in food and fuel prices, which could influence the inflation outlook and the RBI's policy decision.
The bank expects corporate credit growth of around 16% year-on-year for the remainder of FY27 and has a corporate loan pipeline of Rs 7.8 lakh crore. SBI is maintaining its overall credit growth guidance of 14-15% for the financial year. Setty said credit growth remains broad-based, with the retail, agriculture and MSME segments also recording double-digit growth. The bank's priority is to improve productivity across its branches.
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SBI Sees Scope For Further NIM Improvement
SBI's domestic net interest margin (NIM) improved by 11 basis points sequentially in the July-September quarter, supported by a reduction in the cost of deposits. Setty said the bank does not see significant pressure to increase deposit rates at present. The reduction in deposit costs, along with better yields on advances, is expected to support further improvement in margins.
The bank expects a further NIM improvement of around 4-5 basis points. Setty said the benefit from external benchmark-linked rate (EBLR) loans should also support margins.
SBI has maintained its deposit growth guidance at 10-11%. Deposit growth excluding foreign currency non-resident (FCNR) deposits stood at around 10.5%. The bank has mobilised about $10 billion through FCNR deposits and used FCNR(B) deposits to reduce its reliance on bulk deposits.
READ | SBI Q2 Results: Profit Rises 14% On One-Time Gain; Asset Quality Improves
Setty said SBI has no plans to sell its stake in YES Bank at present. He also said the bank is being selective in its exposure to data centre companies, adding that the portfolio remains relatively small.
On the government's Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, an SBI managing director said the bank had witnessed overwhelming participation.
Setty said SBI would continue to monitor rural demand patterns and assess any potential impact on its loan portfolio, particularly amid developments in food and fuel prices.
Setty said SBI plans to put in place state-of-the-art systems for cybersecurity as it strengthens its technology infrastructure.
He also described the successful listing of SBI Funds as an important milestone for the group.
SBI Q2 Results
State Bank of India (SBI) reported a 14.3% year-on-year (YoY) increase in net profit at Rs 23,038 crore in the September quarter of FY27, aided by a one-time gain from the sale of a stake in its subsidiary.
The lender had reported a net profit of Rs 20,160 crore in the corresponding quarter last year (Q2FY26).
SBI's bottom line was boosted by a one-time gain of Rs 7,288 crore following the divestment of a 6.30% stake in its subsidiary, SBI Funds Management Limited, through an offer for sale (OFS). Following the transaction, the bank's stake in the asset management company stood at 55.56% as of September 30, 2026.
Excluding the one-time gain, SBI's profit stood at Rs 15,750 crore, considerably below the Street's estimate of Rs 22,619 crore.
Meanwhile, Net interest income (NII), the difference between interest earned and interest expended, rose 15% YoY to Rs 49,143 crore in Q2FY27, compared with Rs 42,847 crore in the year-ago period. NII also topped the Street's estimate of Rs 48,570 crore.
SBI's operating profit declined 1.4% YoY to Rs 26,937 crore, compared with Rs 27,311 crore in the corresponding quarter last year.
Meanwhile, provisions declined to Rs 4,217 crore in Q2FY27, compared with Rs 5,400 crore in the year-ago period and Rs 5,047 crore in the preceding quarter.
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