SBI in Focus: Chairman sees 15% loan growth, says Middle East crisis no threat yet; Rs 3 lakh crore buffer strong

SBI Share Price: State Bank of India Chairman Challa Sreenivasulu Setty, speaking to Zee Business after the lender’s Q4FY26 results, said the ongoing Middle East crisis has not impacted the bank’s credit growth or margin outlook for FY27, though he cautioned that a prolonged conflict could weigh on economic activity and loan demand.

Setty said SBI continues to witness strong credit demand and has retained its 13-15 per cent loan growth guidance for the current financial year, along with its net interest margin forecast of around 3 per cent.

He said an extended geopolitical conflict lasting five to six months could impact consumption and broader economic activity in India, particularly if elevated crude prices push inflation above the Reserve Bank of India’s 4 per cent comfort target.

India remains heavily dependent on the Middle East for energy imports, making sustained tensions in the region a key macroeconomic risk.

No funding challenges despite robust credit demand

Responding to concerns about funding higher loan growth without pressuring margins, Setty told Zee Business that SBI has ample liquidity support.

He said the bank currently holds nearly Rs 3 lakh crore in excess Statutory Liquidity Ratio (SLR) on its balance sheet.

According to Setty, deposit growth of 11-12 per cent should comfortably support nearly 17 per cent credit growth, given SBI’s large balance sheet base and liquidity strength. “There is no problem in terms of funding,” Setty said.

No crisis in POS terminal supplies

Setty also dismissed concerns around possible disruption in Point of Sale (POS) terminal supplies due to the West Asia conflict.

He said SBI and its payments subsidiary currently face no inventory shortage or operational stress.

“This is a temporary situation, and we are not facing any concerns as of now,” he said.

Treasury income slump impacts Q4 earnings

SBI’s March quarter earnings were weighed down by a sharp fall in treasury income as rising bond yields hurt debt valuations.

The lender also reported losses of around Rs 570 million on its USD 5 billion arbitrage book, following temporary forex restrictions imposed by the Reserve Bank of India in late March to stabilise the rupee.

Treasury income declined sharply to Rs 12.59 billion, compared with Rs 89.91 billion a year ago.

Q4 profit rises 6 per cent, misses estimates

SBI posted a standalone net profit of Rs 19,684 crore for Q4FY26, up 6 per cent year-on-year, but below market estimates.

For the full financial year FY26, the lender reported its highest-ever annual profit of Rs 80,032 crore.

Net Interest Income rose 4.1 per cent to Rs 44,380 crore, while net interest margin narrowed to 2.8 per cent from 2.98 per cent in the previous quarter.

Asset quality improved further, with Gross NPA declining to 1.49 per cent from 1.57 per cent in the December quarter, while Net NPA remained stable at 0.39 per cent.

The bank also declared a dividend of Rs 17.35 per equity share for FY26.

SBI shares tumble after earnings

Following the earnings announcement, SBI shares fell 6.7 per cent, marking their steepest single-session decline in nearly two years, even as the broader market remained under pressure amid rising geopolitical uncertainty.