State Bank of India posts Rs 70,901cr FY25 profit as operating income tops Rs 1 lakh crore amid strong credit growth

Why Did SBI’s Net Profit Surge to ₹70,901 Crore in FY25?

State Bank of India (NSE: SBIN, BSE: 500112) reported a record ₹70,901 crore in net profit for the financial year ending March 31, 2025, marking a 16.08% year-on-year increase. India’s largest public sector lender saw its operating profit rise 17.89% YoY to ₹1,10,579 crore, breaching the ₹1 lakh crore milestone for the first time.

For Q4 FY25, SBI posted a net profit of ₹18,643 crore, reflecting a quarter-on-quarter rise of 10.37% and highlighting strong operational execution despite a tighter interest rate environment. While net interest income (NII) for FY25 rose moderately by 4.43% to ₹1,66,965 crore, margin compression remained a concern, with domestic net interest margin (NIM) narrowing 21 basis points year-on-year to 3.22%.

The bank’s earnings momentum comes in the backdrop of a broader sectoral upswing, as Indian banks continue to ride strong credit demand across MSME, housing, and retail sectors amid economic expansion and public infrastructure spending.

How Did SBI’s Loan and Deposit Book Expand in FY25?

SBI’s whole bank advances rose 12.03% YoY to ₹42.2 lakh crore. Domestic advances, which account for the bulk of the portfolio, increased 11.56% YoY. Notably, foreign office advances grew at a faster 14.84%, indicating strength in SBI’s overseas franchise.

Segment-wise, SME loans crossed the ₹5 lakh crore mark with a 16.86% increase, agricultural loans grew 14.29%, and retail personal loans rose by 11.40%. Among retail segments, home loans stood out with a 14.46% increase to ₹8.30 lakh crore.

Deposits climbed 9.48% YoY to ₹53.82 lakh crore. Domestic CASA deposits grew by 6.34%, though the CASA ratio moderated to 39.97% from 41.11% YoY. Rising term deposit rates contributed to a higher share of fixed deposits, aligning with sector-wide shifts seen amid RBI’s hawkish rate cycle.

What Does SBI’s Asset Quality Reveal About Risk Management?

The bank demonstrated strong asset quality improvement during FY25. Gross non-performing asset (GNPA) ratio dropped to 1.82% from 2.24% YoY, and net NPA (NNPA) declined to 0.47% from 0.57%. The bank’s Provision Coverage Ratio (PCR), including AUCA, improved to 92.08%, up 19 basis points YoY.

The slippage ratio for FY25 stood at 0.55%, a 7 bps improvement from FY24, indicating better credit monitoring and lower slippages. Credit cost was contained at 0.38%, marginally higher than the 0.29% recorded in FY24, yet below most peers in the public banking space.

These asset quality metrics reflect prudent provisioning and a balanced credit risk profile, particularly as economic conditions remain volatile globally.

How Critical Was Digital Banking to SBI’s FY25 Performance?

The YONO platform played a central role in driving SBI’s customer acquisition and transactional efficiency. Nearly 64% of all new savings bank accounts in FY25 were sourced digitally. Additionally, digital and alternate channels accounted for 98.2% of all transactions, up from 97.8% in FY24.

This digital dominance helped reduce operational costs, improve scalability, and support SBI’s strategy to serve underbanked and younger segments through low-cost channels. Analysts see YONO evolving into a full-stack financial super app, contributing materially to future fee income and loan sourcing.

How Strong Is SBI’s Capital Base in FY25?

SBI reported a Capital Adequacy Ratio (CAR) of 14.25% as of March 2025. The Common Equity Tier-1 (CET-1) ratio improved to 10.81%, while Tier-1 capital rose to 12.11%. These ratios reflect prudent capital management despite robust loan growth, and provide ample buffer to support future credit expansion or respond to unforeseen market shocks.

The healthy capital position also enhances investor confidence, particularly among institutional investors seeking stable returns in an uncertain global macro environment.

What Is the Stock Market Sentiment Toward SBI Post Results?

SBI’s stock rose nearly 2% intraday on May 3, 2025, following the release of its Q4 FY25 results. The stock has appreciated by around 22% over the last 12 months, outperforming the Nifty Bank index and most public sector peers.

At current levels around ₹740–₹750 per share, the stock trades at approximately 1.2x FY26 estimated book value, offering value relative to private banks with similar asset profiles.

Brokerages including Emkay Global, Axis Securities, and ICICI Direct maintain “Buy” and “Accumulate” ratings. Revised target prices now range between ₹800–₹860, indicating potential upside of 10–15%. Analysts cite consistent profit growth, margin discipline, and improving asset quality as key drivers.

What Do FII and DII Data Reveal About Institutional Flows in SBI?

Foreign Institutional Investors (FIIs) resumed net buying in SBI during Q4 FY25 and early FY26 after a subdued 2024. Increased exposure to SBI comes on the back of improved returns on equity (ROE at 19.87%) and stronger earnings certainty.

Domestic Institutional Investors (DIIs), particularly LIC, SBI Mutual Fund, and HDFC Mutual Fund, remained long-term buyers. Mutual fund holdings remained stable, with many institutions adding marginally to their positions. Combined DII holding continues to hover above 25%, underlining domestic confidence in SBI’s long-term trajectory.

Retail investor participation has also increased, aided by the growing familiarity and engagement with SBI’s digital offerings, including YONO, and its stable dividend payout.

Is SBI a Buy, Hold, or Sell After Q4 FY25?

Consensus across major brokerages points to a “Buy” or “Accumulate” recommendation. SBI’s operating performance, improved asset quality, and digital scale support the long-term investment case.

While net interest margins may remain under pressure due to deposit repricing, most analysts expect stabilisation in H2 FY26. Operating profit momentum and tight cost control are expected to provide margin offsets.

Valuation remains compelling for long-term investors, particularly in the context of India’s banking sector growth, economic recovery, and SBI’s strategic positioning.

What’s Ahead for SBI in FY26 and Beyond?

Looking forward, SBI is expected to focus on growing its retail and SME loan book, expanding digital services, and improving fee-based income. The bank’s exposure to infrastructure lending and public sector projects aligns with India’s budgetary thrust on capital expenditure and rural credit penetration.

Analysts expect steady double-digit credit growth, gradual improvement in margins as term deposits reprice, and higher non-interest income from digital cross-selling.

With macroeconomic stability, a cleaner loan book, and accelerating digital adoption, SBI remains a bellwether for India’s financial system and an attractive proposition for investors seeking scale, stability, and growth.