State Bank of India Revises Annual Credit Growth Target Upward After Strong Quarterly Performance
In a significant development for India's banking sector, the State Bank of India (SBI) has announced an upward revision of its credit growth target for the fiscal year. This decision follows a period of robust broad-based momentum that substantially lifted the bank's profitability during the December quarter. Chairman C.S. Setty made the announcement during a detailed briefing, highlighting the institution's strong financial health and optimistic outlook.
Enhanced Credit Growth Guidance Reflects Positive Trends
Chairman Setty explicitly stated, "On the credit growth advice we had given 12 to 14% credit guidance earlier. We are revising that upwards to 13 to 15% based on the trend which we have seen in the current quarter so far." He emphasized that the growth has been secular across all segments, with double-digit corporate credit growth expected to persist into the fourth quarter. This upward revision signals confidence in sustained economic activity and lending demand.
Record Quarterly Profit Driven by Multiple Levers
SBI reported a standalone net profit of Rs 21,028 crore for the third quarter of FY26, marking an impressive 24.5% year-on-year increase and representing its highest-ever quarterly profit. Setty attributed this substantial jump to a combination of strategic factors. "Profitability in Q3 has come from many levers," he noted, pointing to enhanced fee income from cross-selling and upselling initiatives, government business operations, letters of credit, processing charges, and recoveries from written-off accounts. Additionally, broad-based credit growth played a crucial role in boosting overall earnings.
Net interest income saw a healthy 9% year-on-year rise, propelled by accelerated loan growth and reduced funding costs. A one-time special dividend of approximately Rs 2,200 crore from SBI Mutual Fund also contributed to the profit surge. However, Setty clarified that even after excluding this exceptional item, the bank's performance remained robust, supported by modest credit costs and stringent overhead control measures.
Broad-Based Growth Across All Segments
The bank's growth narrative remained comprehensive and inclusive. "All the components of RAM - retail, agriculture, and SME - have witnessed robust growth. Corporate credit has seen a rebound and has grown by 13.4%," Setty explained. He affirmed that the revised higher guidance is "coming from all the segments," indicating a balanced and diversified expansion strategy.
Focus on New-Economy and Green Financing
Beyond traditional sectors, SBI is actively engaging with emerging economic pockets. Setty highlighted the bank's involvement in data centre financing, stating, "We are active in data centre financing... wherever data centre capacities are being created, we are part of that journey." Furthermore, renewable energy remains a core focus area, with the bank's green portfolio achieving a milestone of one lakh crore rupees, underscoring its commitment to sustainable financing initiatives.
This strategic move by SBI not only reflects its strong operational performance but also sets a positive tone for the broader banking industry, suggesting resilience and growth potential in the evolving economic landscape.
