SBI Profit Rises 14% as Provisions Fall
Updated: 10 minutes ago
Katrela Ventures Daily Update · Investment, M&A and Business Innovation Digest · 3 November 2026
Key takeaways
SBI's Q2 FY27 standalone net profit rose 14.3% to ₹23,038 crore; net interest income grew 14.7% and provisions fell 21.9%.
Advances grew 18.2% against deposit growth of 12.3%; gross NPA improved to 1.39%.
SEBI issued frameworks for depository receipts on REIT and InvIT units; EAAA India Alternatives listed 0.63% above its issue price.
Funding: PowerUp Money raised $10 million and Dispatch Network ₹5 crore.
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📩 #Read the full update below.
01. TOP STORIES
SEBI Widens Capital Routes for REITs and InvITs:SEBI on 2 November issued frameworks for the issuance of depository receipts on units of REITs and InvITs. In a third circular, it cut the cooling-off period for offer for sale by illiquid private listed InvITs to eight weeks from 12 weeks, with immediate effect, to ease doing business for issuers and unitholders.
EAAA India Alternatives Lists at a Slim Premium: Edelweiss Group's alternatives arm EAAA India Alternatives debuted on 2 November at ₹1,675.50 on the NSE, 0.63% above its ₹1,665 issue price, and at ₹1,673 on the BSE. The ₹1,200 crore IPO was entirely an offer for sale, so the company receives no proceeds.
02. QUICK TAKES
SBI Profit Rises 14% as Provisions Fall
Ecosystem Scale: ₹23,038 Cr net profit Q2 FY27 | 14.3% profit growth YoY | ₹49,143 Cr NII Q2 FY27 | 18.2% advances growth YoY | 3.11% domestic NIM Q2 FY27 | 1.39% gross NPA Sep 2026
State Bank of India reported a standalone net profit of ₹23,038 crore for Q2 FY27 on 3 November, up 14.3% from ₹20,160 crore a year earlier. Net interest income rose 14.7% to ₹49,143 crore from ₹42,847 crore, while provisions and contingencies fell 21.9% to ₹4,217 crore. The gain came even as other income dropped 23.8% to ₹11,777 crore and operating profit slipped 1.4% to ₹26,937 crore. Profit before tax also included a one-time exceptional gain of ₹7,288 crore, and reports attribute the quarter mainly to higher interest income and lower provisioning.
The balance sheet kept expanding at a fast clip. Advances rose 18.2% to ₹51.54 lakh crore, ahead of deposits, which grew 12.3% to ₹62.78 lakh crore, so loans are outrunning the deposit base. Domestic net interest margin stood at 3.11%. Asset quality improved further: gross NPA fell to 1.39% from 1.73% a year earlier and 1.47% in June, net NPA eased to 0.36%, the slippage ratio was 0.50% and return on assets rose to 1.19% from 1.17%, with capital adequacy at 16.09%.
Globally, banking remains highly profitable but margins are thinning. McKinsey's Global Banking Annual Review 2026 preview (May 2026) puts 2025 industry net income at $1.3 trillion, up 7%, while the global net interest margin slipped to 1.63% from 1.65% and balances grew 6.5%. India's cycle is running hotter: RBI data for the fortnight ended 30 September 2026 show bank credit up 19.38% to about ₹230 lakh crore, with deposits at ₹283.95 lakh crore. In the outlook, CareEdge expects the RBI's 25 basis point repo hike to 5.50% on 7 October to pass through first to external-benchmark loans and later to MCLR-linked loans.
The tailwinds are broad loan demand and clean books: banks added ₹16.35 lakh crore of credit in April–September 2026, against ₹10.17 lakh crore a year earlier, and SBI's lower slippage kept credit costs down. The headwinds are funding and non-interest income. Deposit additions of ₹21.67 lakh crore must keep pace with lending, while 91-day T-bill yields rose to 5.39% and certificate of deposit rates to 5.77% ahead of the repo hike. SBI's other income also fell sharply, and McKinsey flags neobanks, AI agents and stablecoins as threats to deposit stickiness.
Against large peers in the same quarter, SBI sits near the top on growth. ICICI Bank grew profit faster (20.1% vs 14.3%) and net interest income faster (17.7% vs 14.7%), while HDFC Bank trailed on both (4.7% and 9.7%) and Punjab National Bank landed in between (12.8% and 10.8%). SBI's advances growth of 18.2% beat HDFC Bank's 16.3% and PNB's 14.7%, but its deposit growth of 12.3% lagged HDFC Bank's 18.8% while beating PNB's 9.9%. On gross NPA, SBI's 1.39% is higher than HDFC Bank's 1.11% and ICICI Bank's 1.20% but well below PNB's 2.55%. Margins are reported on different bases (domestic, total assets and global), so they are not compared directly.
Katrela's Take
➢SBI's quarter shows a state-run lender growing profit through core interest income and lower credit costs while other income weakened. For MSMEs and founders, system credit growth near 19% suggests banks remain willing lenders, which is an opportunity to lock in working-capital lines and term debt. The constraint is funding: deposits are growing slower than loans and the October repo hike is lifting market rates, so loan pricing may tighten. Metrics to track are SBI's deposit versus advances growth, domestic NIM after the rate hike, the slippage ratio and other income.
With bank credit growing faster than deposits, will borrowing costs for MSMEs rise in the second half of FY27?
03. FUNDING BRIEF
PowerUp Money-a wealthtech platform-has raised $10 million (₹94.9 crore approx.) in an extension round led by Flourish Ventures, with participation from Peak XV Partners, Accel, Blume Ventures, Kae Capital, 8i Ventures and DeVC.
Dispatch Network-a Pune-based last-mile delivery startup-has raised ₹5 crore ($0.5 million approx.) in a pre-seed round led by Antler India, with participation from angel investors Krishi Fagwani, Yashin Mahadevia and Parth Modwadhia.
Planning a raise or a debt line as credit conditions shift? Katrela Ventures can help you structure the capital plan.
Follow Aaditya Jain, Pradeep Jain and Katrela Ventures for expert insights on investment trends, M&A activities, and business strategy! 💡
Frequently asked questions
How did SBI perform in Q2 FY27?
Standalone net profit rose 14.3% to ₹23,038 crore, net interest income grew 14.7% to ₹49,143 crore and provisions fell 21.9% to ₹4,217 crore, while other income dropped 23.8%.
What does SBI's quarter mean for MSME borrowers?
System credit growth near 19% suggests banks remain willing lenders, so MSMEs can look to lock in working-capital lines and term debt. Deposits growing slower than loans and the October repo hike may tighten loan pricing.
How does SBI compare with its peers?
ICICI Bank grew profit and net interest income faster, HDFC Bank trailed on both, and PNB landed in between. SBI's gross NPA of 1.39% is above HDFC Bank and ICICI Bank but well below PNB's 2.55%.
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