SBI expects deposit growth uptake in Q2 driven by FCNR(B), says Chairman CS Setty
New Delhi, August 7
State Bank of India Chairman, Challa Sreenivasulu Setty, said that the bank expects its deposit growth to record an uptake in the second quarter of the current financial year on the back of FCNR deposits, while maintaining a full-year deposit growth target of 10-11 per cent.
Speaking at the post-quarterly result press conference on Friday, Setty stated that the country's largest lender possesses sufficient balance sheet liquidity to support its planned credit expansion without funding bottlenecks.
"Deposit growth, I think there would be some uptake because of the FCNR(B) in Q2, but overall we should be in the double-digit 10 to 11 per cent deposit growth," Setty said.
Outlining the credit trajectory for the current fiscal year, Setty projected advances growth in the range of 14 to 15 per cent, linking the bank's targets directly to the nation's GDP estimates.
"We always align the credit growth, at least in our guidance, to nominal GDP. If we go by the GDP estimates and our own internal house view is that nominal GDP would be around 12 per cent, which means that 2 to 3 per cent over that nominal GDP has always been our guidance," Setty said.
"So our guidance for the current year is 14 to 15 per cent credit growth," he added.
Regarding margins, Setty confirmed that the bank maintained its earlier margin targets for the entire fiscal year. "And the profitability, as I mentioned in my speech also, I think broadly we are sticking to our guidance of 3 per cent NIM for the full year," Setty said.
The targets came on the back of SBI reporting a 10.23 per cent year-on-year rise in net profit to Rs 21,121 crore for the first quarter of FY2026-27, supported by strong growth in net interest income and advances, along with improvement in asset quality.
The public sector lender had reported a net profit of Rs 19,160 crore in the corresponding quarter of the previous financial year. Sequentially, profit rose 7.30 per cent from Rs 19,684 crore in the March quarter.
Net Interest Income (NII), the difference between interest earned and interest paid by a bank, increased 14.88 per cent year-on-year to Rs 46,992 crore during the quarter from Rs 40,907 crore a year earlier. Operating profit grew 9.77 per cent to Rs 33,529 crore.
SBI's domestic net interest margin (NIM) stood at 3 per cent in Q1 FY27, improving by 7 basis points from 2.93 per cent in the preceding quarter. However, it was marginally lower than 3.01 per cent recorded in the year-ago period.
The bank continued to record strong credit growth, with gross advances rising 18.63 per cent year-on-year to Rs 50.47 lakh crore as of June 2026. Domestic advances grew 18.15 per cent, while corporate advances increased 18.05 per cent.
Retail, agriculture and MSME (RAM) advances grew 18.20 per cent, with all segments recording double-digit growth. Agriculture advances rose 25.43 per cent, SME advances increased 22.33 per cent and retail personal advances grew 15.15 per cent.
Deposits increased 9.73 per cent year-on-year to Rs 60.06 lakh crore. CASA deposits grew 9.30 per cent, while the CASA ratio stood at 39.24 per cent as of June-end. SBI said its overall business crossed Rs 110 lakh crore during the quarter, with deposits and advances crossing Rs 60 lakh crore and Rs 50 lakh crore, respectively.
Asset quality also improved during the quarter. The gross non-performing asset (NPA) ratio declined by 36 basis points year-on-year to 1.47 per cent from 1.83 per cent, while the net NPA ratio improved by 9 basis points to 0.38 per cent from 0.47 per cent.
The bank also said more than 64 per cent of savings bank accounts were opened digitally through YONO during Q1 FY27, while alternate channels accounted for around 98.8 per cent of its total transactions.
— ANI
Reader Comments
The 25% growth in agriculture advances is really encouraging! This is exactly what our rural economy needs. Also, 98.8% transactions through digital channels shows how far we've come in financial inclusion. Proud of our banking sector's progress. 🙏
While the numbers look good on paper, I worry about the sustainability of this growth. Deposit growth at 9.73% is still below credit growth of 18.63%. This gap needs to be watched carefully. But kudos to SBI for maintaining margins at 3% despite the pressure.
Solid performance from SBI. The FCNR(B) deposits are indeed a smart move to attract NRI investments, especially with the current global interest rate scenario. This could help bridge the deposit-credit gap the chairman mentioned. Good strategic thinking.
The improvement in asset quality is the most encouraging part - gross NPA down to 1.47% is remarkable for a bank of this size. Also, seeing 64% of savings accounts opened digitally through YONO is a testament to our digital India push. This is growth with responsibility.
I appreciate SBI's alignment of credit growth with nominal GDP - that's prudent banking. But I'd like to see more focus on small businesses rather than large corporate lending. Our MSME sector needs better support, though the 22% growth in SME advances is promising.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.