SBI Raises Credit Growth Guidance to 12–14% for 2025-26

State Bank of India expects corporate credit growth to hit double digits in the second half of 2025-26, supported by healthy demand and improving liquidity, Chairman C.S. Setty said on Tuesday. “Given the current quarter, we have seen sustained credit demand in the pipeline, which gives us confidence that double-digit credit growth, both for us and for the system, is quite possible,” Setty said at the post-earnings press conference.

In the September quarter, SBI’s corporate loan book grew 7.1% on year, while loans to small and medium enterprises, agriculture, and retail rose 18.8%, 14.2%, and 14.1%, respectively. The bank has ₹7.06 trillion of corporate loans in the pipeline; half sanctioned and half disbursed.

Gross advances rose 12.7% on year to ₹44.20 trillion, outpacing the industry’s 11.4% loan growth as of October 3, according to RBI data. The lender’s total business surpassed ₹100 trillion during the September quarter, roughly 20% of India’s GDP. SBI aims to increase this to 25% of GDP in the coming years and enter the list of the world’s top 10 banks by assets. It currently ranks 43rd globally.

The bank revised its full-year credit growth guidance to 12–14%, raising the upper end by one percentage point, citing the benefits of the recent goods and services tax rate cut. “Based on many enablers the RBI has given and the fiscal measures under GST 2.0, we believe there will be sustained consumption demand, which gives us this opportunity,” Setty said.

Post the GST cut, SBI saw strong demand for auto loans across all car segments, gaining market share within a week of the rate reduction.

On funding plans, Setty said the bank is well capitalised and will tap the bond market as needed. It also holds excess government securities worth ₹3.5 trillion that can be liquidated to fund credit growth. “Liquidity has never been a problem for us. Our current capital ratios and profits for the next half give us the ability to fund around ₹12 trillion of credit growth,” he said.

Setty added that the bank’s credit growth estimates assume the RBI will hold rates steady until March. “Our optimism stems from our house view that there won’t be a rate cut in the coming months. If there is one in December, we may need to review our expectations,” he said.

The chairman expects the bank to maintain a net interest margin above 3% for the rest of the year. In the September quarter, domestic NIM stood at 3.09%, up from 3.02% in the June quarter but lower than 3.27% a year earlier.

SBI reported a net profit of ₹201.60 billion for the September quarter, up 10% on year and 5.2% on quarter, aided by an exceptional gain of ₹45.93 billion from the sale of its 13.18% stake in YES Bank to Sumitomo Mitsui Banking Corp. for ₹88.89 billion. The stake sale generated a pre-tax return of 14%.

Setty said the bank was “extremely satisfied” with the outcome of the YES Bank transaction, describing it as “more about ensuring systemic stability than profit.”

He also said SBI will launch the revamped version of its YONO app in the December quarter and aims to double its digital user base to 200 million over the next few years.