State Bank of India reported a 5.6% year-on-year rise in standalone net profit for the March quarter at ₹19,683.75 crore, compared with ₹18,642.59 crore in the same period last year. The bank’s board also declared a dividend of ₹17.35 per equity share for the financial year ended March 31, 2026, with May 16 fixed as the record date and June 4 as the payment date. Even so, SBI’s shares slid more than 7% after the results, as investors appeared to focus more on weak operating trends than on the headline profit growth.

Core quarterly performance looked softer

SBI’s standalone total income for the March quarter came in at ₹1,40,411.77 crore, lower than ₹1,43,876.06 crore a year earlier. Operating profit also fell to ₹27,704.18 crore from ₹31,286.04 crore in the year-ago period, indicating pressure on the bank’s core earnings momentum. The March-quarter performance also came after SBI had posted a record standalone net profit of ₹21,028.15 crore in the December quarter, raising investor expectations ahead of the Q4 results.

A key pressure point was other income, which dropped sharply to ₹17,314.10 crore in Q4 from ₹24,366.67 crore a year ago. Other income, which includes fees, forex and derivative earnings, dividend from subsidiaries, recoveries from written-off accounts, and profit or loss on sale and revaluation of investments, appears to have weakened materially during the quarter. Still, lower provisions helped support quarterly profitability. Provisions and contingencies declined to ₹2,872.16 crore in Q4 from ₹6,441.69 crore a year earlier, cushioning the impact of weaker operating profit and softer other income.

Management flags macro risks

At the post-results briefing, SBI chairman Challa Sreenivasulu Setty also struck a note of caution on the macro environment. He said that if the West Asia war continued for another five to six months, “we could see an impact on inflation, consumption and macro-economics.” Setty added that the bank remained mindful of emerging risks and that recent geopolitical developments and weather-related disruptions could introduce some downside risk to growth.

That caution is broadly in line with a March 2026 research note from the SBI’s Economic Research Department which warned that a prolonged West Asia conflict and higher oil prices could slow economic growth, widen India’s current account deficit and push up inflation. The report also flagged the Strait of Hormuz as critical for India because a significant share of oil imports passes through that waterway.

Full-year profit got a one-off lift

For the full year, SBI posted standalone net profit of ₹80,032.01 crore, up from ₹70,900.63 crore in FY25. However, the annual number was boosted by an exceptional gain of ₹4,593.22 crore arising from the divestment of 13.18% of the bank’s stake in Yes Bank in September 2025. That suggests the full-year earnings print looked stronger than the underlying March-quarter operating trend.

From a banking perspective, Setty said credit growth remained strong and indicated that in FY27, credit growth could be in the 13-15% range, while deposit growth could come in at 11-12%. He also said SBI does not expect the RBI to change the repo rate in the near term. Setty further said the bank would dilute some of its stake in the National Stock Exchange during the bourse’s IPO, with public-sector shareholders expected to be among the sellers in the proposed offer-for-sale structure.

Asset quality improves, capital stays strong

On the asset quality front, SBI reported gross NPAs of 1.49% as of March 31, 2026, improving from 1.82% a year earlier. Net NPAs stood at 0.39%, unchanged from the December quarter and lower than 0.47% a year ago, while provision coverage ratio was 74.36% and PCR including AUCA stood at 91.97%. The bank’s Basel III capital adequacy ratio rose to 15.40% at the end of March, with CET1 at 12.29%, and the lender had also raised ₹25,000 crore through a QIB issue in July 2025.

SBI shares ended 6.74% lower at ₹1,018.40 apiece on the NSE on Friday. Over the past year, however, the stock has gained more than 32%, outperforming the benchmark Nifty 50, which was down about 0.40% over the same period.