Public Sector Banks Achieve Historic Profit Milestone in Q3 FY26
India's public sector banking landscape has witnessed a remarkable financial upswing, with all 12 state-owned lenders collectively posting a record cumulative profit of Rs 52,603 crore during the third quarter of the current financial year (FY26). This represents a substantial 18 per cent year-on-year increase, underscoring a period of robust performance and financial resilience.
State Bank of India Leads the Charge
The stellar results were significantly propelled by the country's largest lender, State Bank of India (SBI). SBI alone contributed approximately 40 per cent of the total PSB earnings, reporting its highest-ever quarterly net profit of Rs 21,028 crore in Q3 FY26. This marks an impressive 24 per cent growth compared to the same period in the previous financial year.
In the December quarter of FY25, the combined profit of all public sector banks stood at Rs 44,473 crore. The latest figures translate to an absolute increase of Rs 8,130 crore in the most recent quarter, based on numbers published on stock exchanges and reported by PTI.
Performance Highlights Across Key Lenders
Among other notable performers, Chennai-based Indian Overseas Bank recorded the highest percentage growth in net profit at 56 per cent, reaching Rs 1,365 crore. This was closely followed by the Central Bank of India, which posted a 32 per cent rise to Rs 1,263 crore.
Banks reporting more than 20 per cent profit growth, apart from SBI, included:
- Bank of Maharashtra with a 27 per cent increase
- Canara Bank recording a 26 per cent rise
Other institutions posting double-digit profit growth were:
- Punjab & Sind Bank (19 per cent)
- UCO Bank (16 per cent)
- Punjab National Bank (13 per cent)
During the quarter, all PSBs except Bank of Baroda, Union Bank of India, Indian Bank, and Bank of India reported profit growth in single digits.
Quarterly and Nine-Month Performance Trends
On a quarterly sequential basis, PSBs had posted a 9 per cent annual increase in profit to Rs 49,456 crore in Q2 FY26, compared to Rs 45,547 crore in the September quarter of FY25. In the first quarter, PSBs reported an 11 per cent annual increase in profit to Rs 44,218 crore, up from Rs 39,974 crore in the June quarter of FY25.
For the nine months ended December 2025, the aggregate PSB profit crossed Rs 1.45 lakh crore for the first time, reaching Rs 1,46,277 crore. This compares to Rs 1,29,994 crore in the April-December period of FY25, reflecting a healthy nearly 13 per cent growth.
Confidence from Financial Services Secretary
In an interview with PTI, Financial Services Secretary M Nagaraju expressed strong optimism about the sector's trajectory. He voiced confidence that the combined PSB profit would cross Rs 2 lakh crore in the current financial year.
Stressing the underlying strength of the Indian banking sector, Secretary Nagaraju highlighted that credit growth of PSBs is at 12 per cent this year, which he described as tremendously "good." Deposit growth at 10 per cent was also noted as reasonably very good.
"As I said, banks are at the bellwether for the strength of the economy. Therefore, they are resilient. We have very prudent management systems in place under the regulator, the RBI. So we are not much worried about the external factors negatively impacting our banking sector," he stated, reinforcing the sector's stability and preparedness.
