SBI Accrues a Total Profit of Rs 19,160 Crores, as Asset Quality Enhances, Net Interest Margin (NIM) Decreases by 0.13%

SBI Accrues a Total Profit of Rs 19,160 Crores, as Asset Quality Enhances, Net Interest Margin (NIM) Decreases by 0.13%

State Bank of India (SBI), the country's largest lender, has reported a significant improvement in its financial performance for the quarter ending June 2025 (Q2 FY2025). Compared to the same period last year (Q2 FY2024), SBI's key financial indicators have shown a positive trend.

SBI's net profit surged 28% year-on-year (YoY) to ₹19,160 crore in Q2 FY25, according to the bank's official statement. This growth is impressive, surpassing analyst estimates despite margin pressures from rising deposit costs and delayed RBI rate cuts.

The bank's total income for the quarter grew by 10.31 percent, reaching ₹1.35 lakh crore. This growth was driven by an increase in operating profit, which rose by 15.49 percent to ₹30,544 crore.

SBI's net interest income stayed almost the same at Rs 41,072 crore, with a slight decrease of 0.13%. However, the bank's interest earned grew 6.33% YoY, indicating overall income growth.

The bank's total loans (gross advances) increased by 11.61%, with growth across sectors: retail personal loans, SME loans, agricultural loans, and corporate loans all saw increases. Total deposits rose by 11.66 percent, reflecting the growing trust and confidence in SBI.

SBI's return on assets improved slightly to 1.14%, and the return on equity slipped to 19.70%. Despite this, the bank's cost-to-income ratio improved to 47.71%, indicating improved efficiency.

The bank's CASA ratio slightly dropped to 39.36%, but current account deposits increased by 30.69 percent. The net interest margin dropped to 2.90 percent from the previous year, reflecting sector-wide challenges.

SBI's non-interest income increased by 55.40 percent, reaching ₹17,346 crore. This growth was driven by various factors, including digital transformation and treasury gains.

The bank's credit cost remained stable at 0.47 percent, and the gross NPA (bad loans before recovery) decreased to 1.83 percent. The net NPA (after recovery) improved to 0.47 percent from 0.57 percent.

The bank's capital adequacy ratio (CRAR) is 14.63 percent as of June 30, 2025. If the profit from this quarter is included, the CRAR rises to 15.16 percent. The Common Equity Tier-1 (CET-1) ratio is 11.10 percent, and if the quarter's profit is considered, it increases to 11.63 percent. The provision coverage ratio stood at 74.49 percent, or 91.71 percent if accounts under collection are included.

In summary, SBI’s key financial indicators including net profit, income, and profitability have shown robust improvement in Q2 2025 compared to Q2 2024. Despite some margin compression, digital transformation, cost efficiency, and treasury gains helped SBI sustain profitability and improve return on equity. The bank continues to maintain strong loan growth, capital adequacy improvement, and stable asset quality, which support profitability.

Investing in SBI's stocks for Q2 FY25 might prove advantageous due to the significant 28% year-on-year (YoY) increase in its net profit. The growth in SBI's total income, driven by a rise in operating profit and net interest income, makes personal finance decisions about investing in this business entity noteworthy.

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