SBI Q4 Profit Up 5.6% But War-Escalated Yields Hit Demand and Treasury Income
SBI Q4 Profit Up 5.6% But War-Escalated Yields Hit Demand and Treasury Income
SBI posts solid Q4 profit gains, but warns prolonged conflict could dampen demand as margins tighten and treasury losses rise.
State Bank of India posted a 5.6% rise in Q4 profit, chalking up net profit of ₹19,684 crore as net interest income grew over 4% to ₹44,380 crore. However, total income slipped to ₹1.40 lakh crore from ₹1.43 lakh crore a year ago, and non-interest income fell 29% year-on-year to ₹17,314 crore, largely due to weaker treasury gains as government bond yields climbed amid the West Asia conflict. SBI shares slid about 6.6% to ₹1,019.55 on Friday after the results came in below market expectations.
Chairman CS Setty said that if inflation stays around 4%, domestic consumption may not be badly hit, but if inflation rises and the war lingers, consumption demand could moderate and impact the economy. The bank reported a FY26 domestic NIM of 3.03% and signaled it expects NIMs to stay above 3% in FY27, even as Q4 NIM slipped 17 basis points to 2.81% due to the impact of a 25-basis-point RBI repo rate cut priced in December 2025.
On the asset quality front, SBI’s gross non-performing asset (GNPA) ratio improved, easing to about 1.49% as the lender continued to report healthy credit growth. The treasury losses reflected the sharper movement in government-bond yields since the war began, contributing to a drop in non-interest income and weighing on overall profitability.
For the full year, SBI delivered what industry watchers described as one of its strongest annual profits, with The Economic Times noting ₹83,299 crore in annual corporate profit. Market watchers cautioned that bond-yield volatility could keep sentiment fragile, even as core lending momentum remains a bright spot.
Analysts expect SBI to maintain its domestic loan growth trajectory while managing margins. The stock’s reaction underscores the trade-off between a robust bottom line and pressure from treasury income and yields.
