Decoding SBI’s Q4 Surge: Strategic Gains and Headwinds
STATE BANK OF INDIA
CMP* (₹) 792
Company Sector Banking
Company Symbol State Bank of India
About the Company: –
State Bank of India (SBI) stands as the largest public sector bank in India and a pillar of the country’s financial ecosystem. With a legacy that dates back over two centuries, SBI has built an unmatched scale and reach across the Indian subcontinent. The bank caters to more than 51 crore customers, encompassing individuals, businesses, government bodies, and institutions, reflecting its deep penetration and trust across all economic segments.
SBI operates through a vast physical infrastructure of 22,542 branches and 65,004 ATMs/CDMs, making banking services accessible across urban, semi-urban, and rural areas. This widespread network not only enhances customer convenience but also supports the government’s financial inclusion initiatives. Internationally, SBI has established a presence in 29 countries, operating through 229 global offices that include branches, subsidiaries, and representative offices, thus catering to the banking needs of Indian diaspora and global corporates. In recent years, SBI has aggressively digitized its services to stay ahead in the evolving financial landscape. Its flagship digital platform, YONO (You Only Need One), has become one of India’s most widely used integrated banking and lifestyleapps.
With over 7.1 crore downloads and 2.7 crore monthly active users, YONO enables customers to perform a wide range of activities from opening bank accounts, applying for loans, investing in mutual funds and insurance, to shopping and travel bookings all through a single interface. The success of YONO underscores SBI’s commitment to innovation and customer- centric digital transformation, helping the bank expand its reach and efficiency while significantly lowering the cost-of-service delivery.
Key Financial
| Particular |
Amount |
| MARKET CAPITALIZATION (₹ CRORE) |
₹7,13,970 |
| DEBT (₹ CRORE) |
₹5,06,027 |
| EV (₹ CRORE) |
₹12,20,000+ |
| 52 WEEK H/L |
₹826 / ₹542 |
| EQUITY CAPITAL (₹ CRORE) |
₹892 |
| FACE VALUE (₹) |
1.00 |
| DIVIDEND YEILD |
1.99% |
| NO OF SHARES (CRORES) |
89.2 |
Quarterly Performance
SBI’s Q4 FY25 results reflect strong operational momentum with improvements in both core and non-core income. Net Interest Income (NII) increased by 3.2% quarter-on-quarter (QoQ) to ₹42,775 crore, driven by a steady interest income growth of 1.91%. However, Net Interest Margin (NIM) slightly declined to 3.00% at the bank level, indicating pressure on yields.
The standout metric this quarter was Non-Interest Income, which surged 119% QoQ to ₹24,210 crore, supported by strong treasury gains and higher fee income. Consequently, Operating Income grew 27.6% QoQ to ₹66,985 crore, and Operating Profit rose 32.8% to ₹31,286 crore despite a 23.4% increase in operating expenses. On the bottom line, Net Profit came in at ₹18,643 crore, up 10.4% from the previous quarter but down 9.9% YoY, due to higher provisions of ₹12,643 crore (up 89.9% QoQ). Despite this, SBI maintained healthy profitability metrics, with Return on Assets (ROA) at 1.12% and Earnings Per Share (EPS) at ₹84.72. The cost-to-income ratio moderated slightly to 53.29%, indicating improved efficiency over the previous quarter.
Overall, the bank demonstrated operational resilience with strong income growth, though rising provisions and narrowing margins slightly offset the earnings upside.
| Particulars |
Q4FY24 |
Q3FY25 |
Q4FY25 |
QoQ (%) |
YoY (%) |
| Interest Income |
1,11,043 |
1,17,427 |
1,19,666 |
1.91% |
7.77% |
| Interest Expenses |
69,387 |
75,981 |
76,892 |
1.20% |
10.81% |
| Net Interest Income (NII) |
41,655 |
41,446 |
42,775 |
3.21% |
2.69% |
| Non-Interest Income |
17,369 |
11,041 |
24,210 |
119.28% |
39.38% |
| Operating Income |
59,024 |
52,486 |
66,985 |
27.62% |
13.49% |
| Operating Expenses |
30,277 |
28,935 |
35,698 |
23.37% |
17.91% |
| Operating Profit |
28,748 |
23,551 |
31,286 |
32.84% |
8.83% |
| Total Provisions |
8,049 |
6,659 |
12,643 |
89.86% |
57.08% |
| Net Profit |
20,698 |
16,891 |
18,643 |
10.37% |
-9.93% |
| NIM (Whole Bank) |
3.30% |
3.01% |
3.00% |
-1 bps |
-30 bps |
| NIM (Domestic) |
3.47% |
3.15% |
3.15% |
0 bps |
-32 bps |
| Cost to Income Ratio |
51.30% |
55.13% |
53.29% |
-184 bps |
+199 bps |
| Cost to Assets (%) |
1.99% |
1.79% |
2.15% |
+36 bps |
+16 bps |
| EPS (₹) |
93.28 |
75.09 |
84.72 |
— |
— |
| ROA
(Annualized) |
1.36% |
1.04% |
1.12% |
— |
— |
Revenue Disclosure
In Q4FY25, State Bank of India (SBI) reported a total income of ₹1,29,173 crore, marking a YoY growth of 13.8% over ₹1,13,469 crore in Q4FY24. The growth was primarily driven by a strong increase in interest income, which rose 20.3% YoY to ₹1,14,782 crore.
- The largest contributor was Interest on Advances, which increased to ₹84,017 crore (up 18.3% YoY), reflecting strong credit growth and improved yields.
- Interest on Investments saw a substantial growth of 28.2%, reaching ₹24,580 crore, likely supported by increased SLR securities and favorable interest rates.
- Other Interest Components also grew steadily, indicating better treasury and liquidity management.
However, Other Income declined by 20.5% YoY to ₹14,391 crore. This drop was largely attributed to lower treasury income and fee-based earnings, which affected the non-interest revenue profile for the quarter.
Key Revenue Financials (Rs.in crore)
| Particulars |
Q4FY25 |
Q4FY24 |
YoY Change (%) |
| Interest Earned |
₹1,14,782 |
₹95,374 |
20.3% |
| – Interest on Advances |
₹84,017 |
₹71,008 |
18.3% |
| – Interest on Investments |
₹24,580 |
₹19,181 |
28.2% |
| – Interest on Balances with RBI & Banks |
₹1,258 |
₹975 |
29.0% |
| – Others |
₹4,927 |
₹4,210 |
17.0% |
| Other Income |
₹14,391 |
₹18,095 |
–20.5% |
| Total Income |
₹1,29,173 |
₹1,13,469 |
13.8% |
Liabilities Table – SBI Q4FY25 (₹ in Crore)
| Component |
Q4FY25 |
Q4FY24 |
| Deposits |
₹47,20,887.67 |
₹44,23,778.45 |
| Borrowings |
₹3,18,374.62 |
₹3,26,214.70 |
| Other Liabilities & Provisions |
₹2,20,244.82 |
₹2,03,651.46 |
| Capital |
₹892.46 |
₹892.46 |
| Reserves & Surplus |
₹2,98,072.11 |
₹2,79,830.44 |
| Minority Interest |
₹1,169.03 |
₹1,187.13 |
| Total Liabilities |
₹62,58,942.71 |
₹59,53,475.55 |
Description of the above table
State Bank of India (SBI) recorded total liabilities of ₹62.59 lakh crore as of Q4FY25, indicating a year-on-year (YoY) growth of 5.13% from ₹59.53 lakh crore in Q4FY24. The major component remains customer deposits, which rose by over ₹2.97 lakh crore YoY, reinforcing SBI’s strong retail franchise and deposit mobilization strength .Borrowings, which include funds raised from RBI, banks, and other institutions, showed a slight decrease, suggesting greater reliance on deposits for funding. Other liabilities and provisions, primarily consisting of provisioning for bad loans and other obligations, increased by around ₹16,500 crore—pointing to prudence in financial risk management. SBI’s capital base remained stable at ₹892 crore, while reserves and surplus grew significantly, reflecting retained earnings and enhanced internal accruals. The minority interest represents the stake of minority shareholders in SBI’s subsidiaries and showed little change.
Overall, SBI’s liability’s structure continues to be robust, with healthy growth in core funding and a conservative approach to provisioning and capital management.
FINANCIAL STATEMENT
P&L Statement (In Cr.)
| Particulars |
Q4FY25 |
Q4FY24 |
YoY Growth |
FY25 |
FY24 |
YoY Growth |
| Interest Earned |
1,07,678 |
92,951 |
15.8% |
4,03,057 |
3,48,302 |
15.7% |
| Interest Expended |
62,796 |
51,099 |
22.9% |
2,26,304 |
1,88,491 |
20.1% |
| Net Interest Income (NII) |
44,882 |
41,852 |
7.2% |
1,76,753 |
1,59,811 |
10.6% |
| Other Income |
20,958 |
18,094 |
15.8% |
47,375 |
47,761 |
-0.8% |
| Total Income |
65,840 |
59,946 |
9.8% |
2,24,128 |
2,07,572 |
8.0% |
| Operating Expenses |
28,873 |
24,496 |
17.9% |
95,589 |
83,796 |
14.1% |
| Operating Profit |
36,967 |
35,450 |
4.3% |
1,28,539 |
1,23,776 |
3.9% |
| Provisions and
Contingencies |
1,609 |
3,276 |
-50.9% |
14,578 |
20,489 |
-28.9% |
| Profit before Tax (PBT) |
35,358 |
32,174 |
9.9% |
1,13,961 |
1,03,287 |
10.3% |
| Tax Expense |
8,906 |
7,950 |
12.0% |
29,746 |
26,640 |
11.6% |
| Net Profit |
26,452 |
24,224 |
9.2% |
84,215 |
76,647 |
9.9% |
Description of the above table
State Bank of India (SBI) reported a net profit of ₹26,452 crore in Q4FY25, marking a 9.2% year-on- year (YoY) growth from ₹24,224 crore in Q4FY24. For the full year FY25, net profit stood at ₹84,215 crore, an increase of 9.9% over FY24. Interest income rose significantly by 15.8% YoY in Q4FY25 to ₹1,07,678 crore, supported by growth in the loan book and improved yield on advances. However, interest expenses also grew by 22.9%, reflecting the impact of rising deposit costs and cost of funds.Despite higher interest costs, Net Interest Income (NII) – the core income from lending – grew by 7.2% YoY in Q4FY25 to ₹44,882 crore, while for the full year it increased 10.6%, reaching ₹1,76,753 crore. Other income, comprising fees, commissions, treasury operations, and recoveries, rose by 15.8% YoY in Q4 but remained nearly flat for the full year. Operating expenses increased by 17.9% YoY due to higher employee and administrative costs, slightly compressing the operating profit margin. Still, operating profit grew by 4.3% YoY in Q4FY25 and 3.9% for FY25, touching ₹1,28,539 crore for the year. A major contributor to net profit growth was the sharp decline in provisions and contingencies, which fell by 50.9% YoY in Q4FY25 and by 28.9% YoY annually, indicating better asset quality and lower credit costs.
The Profit Before Tax (PBT) grew by 9.9% YoY to ₹35,358 crore in Q4FY25. After a tax provision of ₹8,906 crore, the bank posted its record quarterly and annual net profits.
Summary of Balance Sheet
| Particulars |
FY24 |
FY25 |
YoY Growth |
| Total Assets |
59,84,781 |
65,98,819 |
10.2% |
| Deposits |
45,03,700 |
51,30,072 |
13.9% |
| Gross Advances |
33,03,731 |
36,48,564 |
10.4% |
| Capital & Reserves |
3,62,996 |
4,23,019 |
16.5% |
Description of above table
SBI’s balance sheet for FY25 reflects a robust and healthy financial trajectory, marked by substantial growth across key parameters. The total deposits surged to ₹51.3 lakh crore, representing an impressive 13.9% year-on-year (YoY) growth compared to ₹45.03 lakh crore in FY24. This strong deposit mobilization highlights the bank’s continued dominance and customer trust in India’s banking landscape, underpinned by its extensive branch network and strong retail franchise. On the asset side, gross advances rose to ₹36.48 lakh crore, reflecting a 10.4% growth YoY from ₹33.03 lakh crore. This expansion in lending activity signals robust credit demand across sectors, including retail, agriculture, MSME, and corporate segments. The bank’s ability to grow advances while maintaining asset quality showcases sound credit risk management and a growing economy. Additionally, the capital and reserves component, a key indicator of financial strength and stability, saw a noteworthy rise of 16.5%, increasing from ₹3.63 lakh crore in FY24 to ₹4.23 lakh crore in FY25. This growth may be attributed to higher retained earnings from record profits, prudent capital management, and possibly fresh equity infusion or revaluation reserves. A stronger capital base not only ensures regulatory compliance under Basel III norms but also enhances the bank’s capacity to support future business growth and absorb potential shocks.
In summary, SBI’s balance sheet for FY25 paints a picture of sustained growth, increasing financial resilience, and strategic positioning for future expansion in a dynamic economic environment.
Summary of Cash Flow Statement
| Particulars |
FY25 |
| Net Profit |
₹61,077 Cr |
| Operating Profit |
₹96,275 Cr |
| Provisions and Contingencies |
₹19,384 Cr |
| Dividend Declared |
₹13.70/share |
Description of above table
In FY25, the State Bank of India (SBI) achieved a record-breaking net profit of ₹61,077 crore, showcasing exceptional earnings performance and a strong operational foundation. This remarkable profitability was supported by a healthy growth in core income streams, including interest income from advances and investments, as well as fee-based income. The record profit reflects efficient cost management, stable asset quality, and a favorable interest rate environment that supported net interest margins (NIMs). A key factor contributing to improved cash flows was the reduction in provisions and contingencies, which stood at ₹19,384 crore—lower than previous years. This decline indicates better credit discipline and improved asset quality, as fewer resources had to be set aside for non-performing assets (NPAs) and potential loan losses. As provisioning requirements ease, more of the bank’s operating profit translates directly into net cash flows, enhancing its liquidity and financial flexibility. SBI’s ability to declare a final dividend of ₹13.70 per share further underscores its strong free cash flow position and commitment to shareholder value. Dividend payouts of this magnitude are generally indicative of surplus cash after meeting capital expenditure and regulatory requirements, reflecting a confident outlook on future profitability and capital adequacy. While the detailed cash flow statement was not disclosed in the presentation, the combination of a high operating profit of ₹96,275 crore and lower provisioning strongly suggests healthy internal accruals and sustainable financial operations. These internal cash flows are crucial for funding future growth, managing liabilities, investing in digital infrastructure, and maintaining a robust capital buffer.
Ratio Analysis
| Ratio |
FY25 |
FY24 |
Change / Remarks |
| Earnings Per Share (EPS) |
63.1 |
57.7 |
▲ Improved due to higher net profit |
| Book Value Per Share |
209.6 |
183.3 |
▲ Indicates stronger capital base |
| Dividend Per Share |
33.0 |
34.0 |
▼ Slight decline despite record profit |
| Revenue Growth (%) |
1.9 |
4.7 |
▼ Slower topline growth rate |
| Operating Profit Margin (%) |
20.7 |
21.6 |
▼ Marginal drop in operating efficiency |
| Net Profit Margin (%) |
16.7 |
16.3 |
▲ Improved profitability |
| Return on Net Worth (%) |
30.1 |
31.5 |
▼ Slight decline in efficiency of equity usage |
| Asset Turnover Ratio |
1.2 |
1.3 |
▼ Slight reduction in asset utilization |
| Fixed Asset Turnover Ratio |
3.6 |
3.9 |
▼ Indicates higher investment in fixed assets |
| Current Ratio |
2.6 |
2.4 |
▲ Improved short-term liquidity |
| Quick Ratio |
2.6 |
2.4 |
▲ Strengthened liquidity without inventories |
| Interest Coverage Ratio |
134.1 |
149.1 |
▼ Slight decline, but remains very strong |
Description of Ratio Analysis
State Bank of India (SBI) reported a net profit of ₹26,452 crore in Q4FY25, marking a 9.2% year-on-year (YoY) growth from ₹24,224 crore in Q4FY24. For the full year FY25, net profit stood at ₹84,215 crore, an increase of 9.9% over FY24. Interest income rose significantly by 15.8% YoY in Q4FY25 to ₹1,07,678 crore, supported by growth in the loan book and improved yield on advances. However, interest expenses also grew by 22.9%, reflecting the impact of rising deposit costs and cost of funds. Despite higher interest costs, Net Interest Income (NII) – the core income from lending – grew by 7.2% YoY in Q4FY25 to ₹44,882 crore, while for the full year it increased 10.6%, reaching ₹1,76,753 crore. Other income, comprising fees, commissions, treasury operations, and recoveries, rose by 15.8% YoY in Q4 but remained nearly flat for the full year. Operating expenses increased by 17.9% YoY due to higher employee and administrative costs, slightly compressing the operating profit margin. Still, operating profit grew by 4.3% YoY in Q4FY25 and 3.9% for FY25, touching ₹1,28,539 crore for the year. A major contributor to net profit growth was the sharp decline in provisions and contingencies, which fell by 50.9% YoY in Q4FY25 and by 28.9% YoY annually, indicating better asset quality and lower credit costs. The Profit Before Tax (PBT) grew by 9.9% YoY to ₹35,358 crore in Q4FY25. After a tax provision of ₹8,906 crore, the bank posted its record quarterly and annual net profits.
Conference Highlight
1. Robust Credit Growth Outlook
- SBI projects credit growth of 14–15% year-on-year in
- Retail loans (especially housing and personal loans) and SME lending are the major growth
- The bank has witnessed strong demand in home loans, Xpress Credit (personal loans), and small ticket MSME loans.
- Corporate loan growth is expected to be moderate but steady, driven by working capital demand and select capex
2. Net Interest Margin (NIM) Stability
- SBI guided for domestic NIMs at 4%–3.5% in FY25, despite a high cost of deposits.
- There is a re-pricing benefit on the loan book as older low-yield loans get replaced with higher-rate
- Deposit rates have been inching up, but asset yields have also improved, helping protect
- NIM pressure from overseas operations is expected to normalize by
3. Strong Asset Quality and Credit Discipline
- SBI reported best-in-class asset quality metrics among PSU
- Gross NPA (GNPA) ratio is expected to fall further below 4%, and Net NPA below 0.6%, reflecting healthy recoveries and upgrades.
- Credit cost is guided below 1%, supported by a strong PCR (Provision Coverage Ratio) of 76%+.
- Slippage ratios remain under control, with no large stress emerging across retail or corporate
4. Healthy Return Metrics (Profitability)
- SBI aims to maintain a Return on Assets (RoA) near 1% and Return on Equity (RoE) around 16–17%.
- Operating performance is being driven by growth in core earnings, better asset quality, and efficiency in opex (operating expenses)
- Continued focus on cost rationalization and productivity enhancement supports profit sustainability.
5. Digital Banking and CASA Strategy
- SBI is ramping up its digital initiatives through platforms like YONO to drive customer engagement and reduce operational cost.
- Over 95% of transactions now happen through digital channels, underscoring SBI’s shift toward a digital-first
- CASA (Current Account Savings Account) ratio is expected to remain stable despite intense deposit competition from peers and NBFCs.
6. Strong Performance of Subsidiaries
- SBI’s subsidiaries — SBI Life Insurance, SBI Cards, SBI General Insurance, and SBI Mutual Fund — continue to perform well.
- SBI Life and SBI MF saw strong growth in AUM and premiums, boosting consolidated
- The bank mentioned the potential to unlock further value through IPOs or stake monetization in non-banking
7. Comfortable Capital Position
- SBI is well-capitalized with CET-1 ratio around 9% and total capital adequacy >14%.
- There are no near-term equity dilution plans, as internal accruals and retained earnings are sufficient to support
- Management is confident in supporting credit expansion without external capital infusion.
The image added is for representation purposes only
