SBI Q4 Profit Up 5.6% as War Worries Pressure Demand
SBI Q4 Profit Up 5.6% as War Worries Pressure Demand
SBI posts Q4 profit rise of 5.6% amid steady lending but faces treasury losses and higher yields, triggering cautious market sentiment.
SBI reported a 5.6% year-on-year rise in Q4 net profit, coming in at Rs 19,684 crore, as domestic lending helped earnings despite a tougher treasury environment. Total income for the quarter slipped to Rs 1.40 lakh crore from Rs 1.43 lakh crore a year ago, while net interest income grew over 4% to Rs 44,380 crore. The bank’s stock reacted to the results with a slide, with SBI shares slipping about 6.6% to Rs 1,019.55 on Friday on the BSE as investors weighed the mix of strength and challenges in the quarter.
Treasury income took a sharp turn south, with income from treasury operations falling to Rs 1,259 crore from Rs 8,891 crore a year earlier, contributing to a 29% YoY drop in non-interest income to Rs 17,314 crore. The declines came against a backdrop of elevated government bond yields since the West Asia war began, intensifying concerns that inflation could rise and pressuring spreads.
Management indicated that the margin pressure in Q4 largely reflected the impact of a 25-basis-point RBI repo rate cut that had been priced in earlier. In FY26, SBI delivered a domestic net interest margin of 3.03%, in line with its guidance to stay above 3% for the year, and it signaled expectations that NIM would remain above 3% in FY27 as well. On the asset quality front, gross non-performing assets eased, with the GNPA ratio improving to about 1.49%, underscoring continued improvement in problem loans even as the earnings mix evolved.
The management also cautioned about the potential macro impact: if inflation remains around 4% and the war lingers longer, consumption demand could weaken, affecting overall growth. Against this backdrop, investors and analysts noted that while loan growth remains healthy, market sentiment is sensitive toTreasury-related losses and the trajectory of yields, leaving room for further volatility in SBI’s stock and bonds until clearer inflation and rate outlook emerge.
Analysts pointed out that despite the mixed quarter, SBI’s guidance to keep NIM above 3% in the next year is a positive signal for credit profitability if asset quality continues to improve and macro conditions stabilize. The market will be watching how the bank balances growth, margins, and treasury exposures as it navigates a potentially choppy macro environment.
