SBI June 2025 quarter: flat close, steady profit; NIMs compress across peers
Performance in the June 2025 quarter
- Net interest margin (domestic): SBI at 3.02% vs 3.35% a year ago.
- Peer NIMs: HDFC Bank 3.5% (vs 3.7% YoY); Axis Bank 3.8% (vs 4.05% YoY), with Axis tightening bad-loan recognition.
- Rates backdrop: The repo rate cut in early June 2025 has pulled lending rates lower faster than deposit rates, squeezing margins near-term.
Growth: advances and segments
SBI’s total advances grew 11.6% YoY to Rs. 42.5 lakh crore, led by SME and retail demand. HDFC Bank’s advances rose 6.7% YoY to Rs. 26.28 lakh crore.
- Kotak Mahindra Bank: advances up 14% YoY to Rs. 4.4 lakh crore.
- Axis Bank: advances up 8% YoY to Rs. 10.59 lakh crore.
Asset quality steady
- SBI net NPA ratio at 0.47% (vs 0.57% a year earlier).
- Kotak Mahindra Bank net NPA at 0.34% (vs 0.35%).
- HDFC Bank net NPA at 0.47% (vs 0.39%).
Profitability snapshot
| Bank | Standalone net profit (Q1 FY26) | YoY change | ROA (annualized) | NIM (Q1 FY26) |
|---|---|---|---|---|
| SBI | Rs. 19,160.4 crore | +12.5% | 1.14% | 3.02% (domestic) |
| HDFC Bank | Rs. 18,155 crore | +12.2% | ~1.92%* (avg, not annualized 0.48%) | 3.5% |
| Axis Bank | Rs. 5,806 crore | -4.0% | 1.47% | 3.8% |
| Kotak Mahindra Bank | — | — | ~1.92%* (avg, not annualized 0.48%) | — |
*ROA conversion: average (quarter) 0.48% implies ~1.92% on an annualized basis.
Outlook: deposits, NIM defense, and network leverage
SBI recently raised about Rs. 25,000 crore via QIP, bolstering capital to support growth. With the RBI’s steps to boost system liquidity and lending, the focus shifts to defending NIMs, balancing deposit costs, and underwriting discipline. SBI’s 22,000+ branches remain key to mobilizing low-cost CASA and driving advances.
Valuations
- SBI: trades near 9x estimated standalone FY26 EPS.
- HDFC Bank: trades at 20x+ estimated standalone FY26 EPS.
- Kotak Mahindra Bank: trades at 28x+ estimated standalone FY26 EPS.
Disclosure: This article is for information only and not investment advice. Please do your own research before investing.
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