SBI’s robust Q3 numbers mask non-core profit boost

Subscribe to enjoy similar stories. State Bank of India’s (SBI) December quarter (Q3FY26) results landed strongly on Saturday against a slightly jittery backdrop. Bond yields had crept up after the Union Budget, reviving the familiar fear trade around banks—higher yields, tighter liquidity, and pressure on margins.

SBI stock had declined almost 5% in response, but has since recouped the losses, hitting a fresh 52-week high of ₹1,143 on Monday. For a stock that has undergone a share re-rating over the past two years, the bar wasn’t low. Profit after tax rose 24.5% year-on-year to ₹21,030 crore in Q3, driven by a sharp jump in other income.

Loan growth at 15.6% surprised to the upside, prompting management to upgrade FY26 credit growth guidance to 13-15% from 12-14%. Margins, the market’s primary obsession of late, held steady. Reported net interest margin (NIM) increased 2 basis points (bps) sequentially to 2.99%.

The much-feared impact of the new labour codes was minimal, with lower pension provisions keeping operating expenses contained. Management reiterated its intention to keep the cost-to-income ratio below 50% over the medium term. Credit growth was broad-based, led by the small and medium enterprises (SME), corporate and agriculture segments.

Retail growth remained healthy, with gold loans standing out—up over 90% year-on-year—partly at the expense of unsecured personal loans. This shift has dampened yields, but is a positive from a risk perspective. Asset quality continued to improve.