By Amriteshwar Mathur
The results of State Bank of India, the largest bank in the country, were keenly awaited in a bid to see its ability to manage the impact of higher deposit rates and sluggish growth trends in the economy. And while SBI has shown strong growth in loans and net profit in the December 2025 quarter, it has lagged its private sector rivals in terms of returns on assets (annualized).
Performance in the December 2024 quarter
For a key performance metric, net interest margin (NIM), for SBI in its domestic operations was 3.15 % in the third quarter of FY 25 vis-à-vis 3.34 % a year earlier.
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For smaller rival ICICI Bank it was 4.25 % in the third quarter of FY25 vis-à-vis 4.43 % a year. Banks have faced pressure on NIMs at a time when deposits rates have been high and the central bank has also curbed higher margin unsecured loans. However, in the case of larger rival, HDFC Bank, it was 3.62% on interest earning assets in the third quarter of FY 25 vis-à-vis 3.6 % a year earlier.
Meanwhile, SBI reported a 13.5 % y-o-y growth in its total advances to Rs 40.67 lakh crore in the third quarter of FY25 and that was led by strong credit demand from corporates, SME and agriculture sector.
Similarly, ICICI Bank’s total advances also increased by 13.9 % on a y-o-y basis to Rs 13.14 lakh crore in the December 2024 quarter. In the case of HDFC Bank, advances grew a lackluster 3% y-o-y to Rs 25.42 lakh crore in the December 2024 quarter.
SBI, like its peers in the private sector, benefited from fairly strong asset quality – its percentage of net NPAs was 0.53 % in the December 2024 quarter vis-à-vis 0.64 % a year earlier.
For ICICI Bank its % of net non-performing customer assets to net customer was 0.42 % in the third quarter of FY25 vis-à-vis 0.44 % a year earlier. And HDFC Bank’s percentage of net NPAs to net advances was 0.46 % vis-à-vis 0.31 % a year earlier.
Apart from strong demand from credit, SBI benefited from lower operating costs – staff costs declined nearly 17% y-o-y to Rs 16,073.7 crore in the third quarter of FY25.
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