State Bank of India (SBI) on Friday reported a 9.71 per cent increase in its consolidated net profit at ₹21,201 crore in the quarter ended June 30, 2025 (Q1FY26) compared with ₹19,324.96 crore in Q1FY25.

On a standalone basis, the net profit of the country’s largest lender stood at ₹19,160 crore, up 12.48 per cent from ₹17,035 crore in Q1FY25.

This profit surge was primarily driven by a rise in the treasury and forex income, even as the net interest income saw a decline. Despite an 11.6 per cent jump in overall advances, net interest income at ₹41,072 crore was down 0.13 per cent from ₹41,125 crore in Q1FY25.

Domestic net interest margin (NIM) contracted to 3.02 per cent in Q1FY26 from 3.22 per cent in Q4FY25 and 3.35 per cent in Q1FY25.

SBI chairman C.S. Setty expects NIM to follow a U-shaped trajectory, with the bank aiming for a 3 per cent annual target.

SBI is maintaining its loan growth target of 12 per cent for FY26.

Domestic retail loans increased by 12.56 per cent and the overseas book by 14 per cent, while corporate advances grew by 5.7 per cent. The bank has a ₹7 lakh crore loan pipeline, but geopolitical uncertainties are delaying disbursements.

SBI hopes corporate loan disbursements will accelerate, targeting 10 per cent growth in that segment for FY26.

On asset quality, the gross non-performing assets ratio remained unchanged at 1.83 per cent during Q1FY26 from 1.82 per cent in Q4FY25 and lower than 2.21 per cent in Q1FY24. The bank is aiming to keep it under 2 per cent across cycles.

SBI expects current uncertainties to settle by the third quarter and anticipates no impact from IT sector layoffs due to its diversified book.