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Informist, Friday, May 8, 2026

 

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--SBI Setty: No concern around mis-selling of our own products 
--SBI Setty: No plan to list SBI General Insurance anytime soon 
--SBI Setty: Very carefully choosing credit on corporate side 
--SBI Setty: Expect to keep cost-to-income ratio around 50% in FY27 
--SBI Setty: No problem in funding credit growth with current capital 
--SBI Setty: To set up cybersecurity centre of excellence 
--SBI Setty: Not looking to price deposits aggressively 
--SBI Setty: Have INR 3 tln excess SLR 
--SBI Setty: Cost of ops, higher inflation a concern if W Asia war persists 
--SBI Setty: No bank in position to cut deposit rate with robust loan demand 
--SBI Setty: Expect repo rate to remain unchanged in FY27 
--SBI Setty: Q4 treasury income hit by bond yield movements, equity losses 
--SBI Setty: Q4 treasury income hit by bond yield mevements, equity losses 
--SBI Setty: Had $5 bln of NDF portfolio before RBI net open positions norm 
--SBI Setty: Expect to keep NIM above 3% in FY27 
--SBI Setty: Continue to see robust demand for credit in April 
--SBI Setty: Have corporate credit pipeline of INR 5.5 tln 
--SBI Setty: Stick to 13-14% credit growth estimate in FY27 
--SBI Setty: Robust demand for credit continues, not seeing any dip 
--SBI Setty: Well prepared for transition to expected credit loss norms 
--SBI Setty: Expect banking system credit growth at 13-14% 
--CONTEXT: Comments from SBI Chairman CS Setty at post earnings press meet 
--SBI Setty: Expect banking system deposit growth at 11-12% 
--SBI Setty: Have enough headroom for future credit growth requirements

 

By Kabir Sharma and J. Navya Sruthi

 

MUMBAI – The country's largest lender is sticking to its earlier guidance on loan growth, deposit growth and net interest margins for 2026-27 (Apr-Mar) as well, citing continued robust credit demand and sufficient capital and liquidity buffers, even as geopolitical tensions and inflation risks remain a concern, State Bank of India Chairman C.S. Setty said. 

 

"We are sticking to our earlier credit growth estimate of 13-15% for the current year also," Setty said at the bank's post-earnings press conference Friday, adding that the bank continues to see "robust demand" for loans in April without the usual seasonal slowdown seen in the first quarter. Setty said SBI expects to maintain net interest margins above 3% in FY27 and continue delivering an exit return-on-assets of around 1%. "This year, we still continue to provide the guidance of NIM of about 3%," he said. The chairman also estimated the banking system credit growth at 13-14% and deposit growth at 11-12%, in FY27.

 

SBI currently has a corporate credit pipeline of around INR 5.5 trillion, with demand coming from sectors such as infrastructure, renewable energy, conventional power, auto manufacturing, refineries and fertilisers. "We are continuously seeing credit growth in the current quarter also," Setty said.

 

Despite faster loan growth than deposit accretion, Setty said the bank is adequately placed to fund future expansion. SBI has liquidity in "INR 3 trillion excess SLR" and enough capital headroom to support growth, he said. "There is absolutely no constraint. We don't have the consent to have any new equity capital raised any time," he said, adding that the bank's current capital position can support nearly INR 12 trillion of additional growth.

 

On deposits, Setty said SBI is not looking to aggressively price liabilities despite intense competition. "We will not be  aggressively pricing our deposits," he said, adding that no bank would be in a position to cut deposit rates if system-wide credit demand remains strong. "If the continuous credit growth rate is there at 13% to 15%, I think not much in the system would be in a position to cut the deposit rates," he said. SBI expects deposit growth of 11-12% to be sufficient to support lending expansion.

 

Setty said the bank remains cautious in underwriting large corporate loans even as it expands the segment. "We are very careful in choosing our credit on the corporate side," he said, noting that corporate loans typically yield lower spreads than retail assets but contribute through fee income and capital efficiency.

 

The SBI chairman said treasury income in the March quarter was hurt by bond yield movements and equity market losses. Treasury losses included around INR 80 billion from bond yield movements and nearly INR 20 billion on the equity side, he said. SBI had non-deliverable  forward portfolio of approximately $5 billion before the Reserve Bank of India revised its net open position norms. Setty said the bank managed to unwind the portfolio with minimal losses. "The actual loss which you will see in the Q1 (Apr-Jun of FY27) is 57 crores (INR 570 million)," he said.

 

On the interest-rate outlook, Setty said SBI's base assumption is that the RBI will keep its repo rate unchanged through FY27. Further, he warned that a prolonged West Asia conflict could increase operating costs and raise inflationary pressures. "If the conflict continues, there are two kinds of downside risk — supply chain itself getting tougher, and the cost of operation going up for everyone," he said.

 

Still, SBI has not yet seen any meaningful slowdown in corporate capital expenditure or retail demand. "Robust demand for credit continues, (we are) not seeing any dip," he said.

 

On asset quality and provisioning, Setty said the bank is "well prepared" for the transition to expected credit loss-based provisioning norms from April 2027 and expects the impact to be minimal.

 

The bank also plans to strengthen its technology and cyber infrastructure. Setty said SBI is setting up a cybersecurity centre of excellence and continues to invest heavily in artificial intelligence and Generative AI capabilities across business and technology operations.

 

Addressing concerns around financial product sales, Setty said there was "no concern" around mis-selling of SBI's own products, and claimed that the bank had among the lowest complaint ratios in the industry across insurance, mutual funds and cards segments. Setty also ruled out any near-term listing of its subsidiary, SBI General Insurance. "We are not going to list anytime soon," he said.

 

SBI expects to keep its cost-to-income ratio around 50% in FY27, while continuing to focus on productivity gains through digital initiatives such as the YONO platform.

 

The country's largest lender reported a net profit of INR 196.84 billion for the March quarter, up 5.6% on year but down 6.4% on quarter. Analysts had estimated the bank's net profit at INR 193.98 billion. Shares of the bank fell sharply after it released its financial results during market hours. Friday, the stock closed nearly 7% down at INR 1,019.30 on the National Stock Exchange.  End

 

Edited by Tanima Banerjee

 

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