AI-assisted research analysis by FutureKnowledge. Sources checked 3 November 2026. This is not investment advice.
Reviewed by FutureKnowledge: figures, dates and attributions were checked against the linked sources before publication.
State Bank of India (SBI) reported a 14.3% rise in Q2 FY27 standalone net profit to ₹23,038 crore on 3 November, helped by lower provisions, steady interest income and a one-off gain from selling part of its mutual fund arm. The headline beat the Street’s forecast. Underneath it, though, the quarter was mixed: core operating profit slipped, and loans kept growing much faster than deposits.
SBI Q2 results: the key numbers
According to Business Standard, standalone net profit for the July–September quarter was ₹23,038 crore, up from ₹20,160 crore a year earlier. Net interest income (NII), the gap between what the bank earns on loans and pays on deposits, rose 14.7% to ₹49,143 crore. That is 4.6% more than the ₹46,992 crore SBI reported for the June quarter in its Q1 FY27 press release, when net profit was ₹21,121 crore. So profit rose about 9% quarter on quarter.
The Upstox results blog reported that domestic net interest margin rose to 3.11%, from 3.08% a year ago. TaxGuru’s summary of the bank’s announcement put the improvement at 11 basis points quarter on quarter, which matches the 3.00% domestic margin in the Q1 release. Whole-bank margin was 2.94%, according to Investywise’s summary of the investor presentation, up from 2.86% in Q1.
| Metric (standalone) | Q2 FY27 | Comparison |
|---|---|---|
| Net profit | ₹23,038 crore | +14.3% YoY; ₹21,121 crore in Q1 |
| Net interest income | ₹49,143 crore | +14.7% YoY; +4.6% QoQ |
| Other income | ₹11,777 crore | −23.8% YoY |
| Provisions | ₹4,217 crore | −21.9% YoY |
| Gross / net NPA | 1.39% / 0.36% | 1.47% / 0.38% in Q1 |
| Advances / deposits | ₹51.54 / ₹62.78 lakh crore | +18.2% / +12.3% YoY |
| Return on assets | 1.19% | 1.17% a year ago |
Why profit rose: provisions and a one-off gain
Two things did most of the work. First, provisions fell to ₹4,217 crore from ₹5,400 crore a year earlier, and credit cost dropped to 0.22% from 0.27% in Q1. The slippage ratio, which measures new bad loans, improved to 0.41% from 0.57% in the June quarter, according to Investywise.
Second, DSIJ’s reading of the results statement shows a pre-tax exceptional gain of ₹7,288 crore from selling 6.30% of SBI Funds Management through its pre-IPO placement and offer for sale. That cut SBI’s stake in the asset manager to 55.56%. DSIJ also says gains from selling NSE and ARCIL shares went to capital reserve instead of the profit and loss account.
Without that gain, the picture is softer. DSIJ reports operating profit before provisions of ₹26,917 crore, down from ₹27,310 crore a year earlier. Other income fell 23.8%, and operating expenses rose 9.6%. The bank’s headline operating profit of ₹34,226 crore, up 7.28% according to TaxGuru, appears to include the exceptional item: the gap between the two figures roughly matches the ₹7,288 crore gain. Readers comparing reports will see both numbers.
Against expectations, the quarter still came in ahead. A Bloomberg consensus of 26 analysts, quoted by Business Today, expected net profit of ₹22,621 crore, NII of ₹48,570 crore and provisions of ₹5,559 crore. Several brokerages had forecast a slight fall in margins, so the margin increase was also better than expected.
Asset quality at a two-decade best
Gross NPAs fell to 1.39% of loans from 1.73% a year earlier, and net NPAs to 0.36%, according to Business Standard. In absolute terms, gross bad loans fell 4.9% to ₹72,529 crore. Investywise says SBI described its NPA ratios as the lowest in more than two decades. The provision coverage ratio was 74.43%, or 91.83% including written-off accounts. Capital adequacy stood at 16.09%, with a CET1 ratio of 13.34%.
How it affects India: loans are outrunning deposits
SBI is India’s largest lender, so its balance sheet tracks the wider credit cycle. Advances grew 18.2% while deposits grew 12.3%. On Business Standard’s figures, that takes the loan-to-deposit ratio to about 82% from about 78% a year earlier (FutureKnowledge calculation). SME loans grew about 22% and agriculture loans about 23%, according to the presentation summary, while retail personal loans grew 14.5%.
That fits with other data on demand. The October manufacturing PMI showed factories still expanding, and the October GST collections rose 22.9%. The pressure is on funding. The CASA ratio, the share of cheaper current and savings deposits, slipped to 38.32% from 39.24% in June. If banks have to chase term deposits to fund loans, the cost of borrowing for companies and households could stay high even where margins hold up.
Who is more or less exposed
- Borrowers in MSME and farm segments are getting the fastest credit growth from the largest lender, which supports working capital in smaller firms.
- Depositors may keep seeing competitive term-deposit rates, because the deposit gap gives banks a reason to bid for funds.
- Lenders that rely more on fee and treasury income are more exposed to the kind of fall in other income SBI saw. Lenders with low bad-loan ratios are less exposed to a rise in provisions.
Scenarios to watch
These are conditional scenarios, not predictions.
| If… | Then the likely pressure point is… |
|---|---|
| Deposit growth stays near 12% while loans grow near 18% | Funding costs and the CASA ratio, with less room for margins to keep rising |
| Oil prices stay high and slow the economy | Slippages in SME and unsecured retail loans, which would push credit cost above 0.22% |
| RBI policy rates change | Repricing of SBI’s large floating-rate loan book, which tends to move margins faster than deposits |
| No further stake-sale gains in coming quarters | Profit growth relying more on NII and keeping provisions low |
What to watch next
- Management commentary on margin guidance and deposit pricing from the analyst call.
- Results from other large lenders, to see whether the gap between loan and deposit growth is common across the system.
- The RBI’s fortnightly data on bank credit and deposits.
- How SBI shares trade after the results. The stock was up about 0.5% at ₹992 at 1:51 pm, per DSIJ, as the Sensex extended a four-session rally that included the day Reliance lifted the Sensex on Monday.
Bottom line
SBI’s Q2 FY27 profit growth of 14.3% beat forecasts, and asset quality improved again. But a ₹7,288 crore one-off gain flattered the headline, core operating profit fell slightly, and loan growth is running well ahead of deposits. The next few quarters will show whether margins can hold up without help from stake sales.
Method note: Figures were compared across Business Standard, DSIJ, Upstox, TaxGuru, Investywise and Business Today, and checked against SBI’s own Q1 FY27 press release for quarter-on-quarter comparisons. The Q2 results filing is on BSE. Operating profit is reported two ways in coverage (₹26,917 crore before the exceptional gain, ₹34,226 crore including it), and both are shown above with that distinction. Ratios not attributed to a source are FutureKnowledge calculations from reported figures.