Digital News Guru Business Desk:
State Bank of India Reports Q4 FY25 Earnings: Navigating Profit Decline, Capital Infusion, and Sustainable Financing
On May 3, 2025, the State Bank of India (SBI), the nation’s largest lender, announced its financial results for the fourth quarter of fiscal year 2024–25, revealing a 10% year-on-year decline in net profit. Despite this setback, the bank outlined strategic initiatives, including a significant capital raise and a commitment to sustainable financing through green bonds.
Q4 FY25 Financial Performance
SBI reported a standalone net profit of 18,642.59 crore for the January–March quarter, down from 20,698.35 crore in the same period the previous year. This decline is attributed to increased provisions for bad loans and a contraction in net interest margins. However, the net profit surpassed analysts’ expectations of 17,739 crore.
The bank’s net interest income (NII) grew by 2.7% year-on-year to 42,774.55 crore. Despite this growth, the domestic net interest margin (NIM) decreased to 3.15% from 3.47% a year earlier, reflecting the impact of falling interest rates and the lag in repricing deposits.
Total expenses for the quarter rose by nearly 13% year-on-year to 1,12,590 crore, compared to 99,664 crore in the same quarter of the previous fiscal. Additionally, provisions for bad loans surged by 300% to 6,442 crore, up from 1,610 crore in the corresponding quarter of the previous year.
SBI Plans 25,000 Crore Equity Raise
In a move to strengthen its capital base, SBI’s board approved plans to raise up to 25,000 crore through equity capital in the fiscal year 2025–26. The funds will be raised via qualified institutional placement (QIP), follow-on public offer (FPO), or other permissible modes, with the timing dependent on market conditions.
This capital infusion aims to bolster the bank’s capital adequacy ratios and support future growth, particularly in light of uncertainties related to global tariffs and economic conditions.
Strategic Outlook for FY26
Looking ahead, SBI targets a loan growth of 12–13% for fiscal year 2025–26, maintaining levels similar to the prior year due to uncertainties related to global tariffs. The bank reported a loan growth of 12.03% and deposit growth of 9.48% for 2024–25. Chairman C.S. Setty highlighted that the bank’s corporate loan pipeline stood at 3.4 trillion at the end of March, and expects deposit growth to be around 9–10% this year.
Setty also cautioned about continued pressure on net interest margins, assuming another 50-basis point rate cut by the Reserve Bank of India in the current year.
Dividend Declaration
Despite the decline in net profit, SBI declared a dividend of 15.90 per equity share for fiscal year 2024–25, reflecting the bank’s commitment to rewarding its shareholders.
Conclusion
SBI’s Q4 FY25 results underscore the challenges faced by the banking sector amid economic uncertainties and changing interest rate dynamics. However, the bank’s proactive measures, including capital raising and investment in sustainable financing, position it to navigate these challenges and support India’s economic growth.
As SBI continues to adapt to the evolving financial landscape, its strategic initiatives and commitment to sustainability will be critical in maintaining its leadership position in the banking sector.
State Bank of India (SBI), the nation’s largest lender, has announced significant financial developments for the fiscal year 2024–25 and outlined strategic plans for the upcoming year.
- Net Profit Decline: SBI reported a 10% year-on-year decrease in standalone net profit for the January–March quarter, amounting to 18,642.59 crore, down from 20,698.35 crore in the same period the previous year.
- Net Interest Income (NII): The bank’s NII grew by 2.7% year-on-year to 42,774.55 crore.
- Net Interest Margin (NIM): The domestic NIM declined to 3.15% from 3.47% a year earlier, attributed to the lag in repricing deposits following policy rate cuts.
- Asset Quality: SBI’s gross non-performing asset (NPA) ratio improved to 1.82%, and the net NPA ratio stood at 0.47%, reflecting enhanced asset quality.
- Provisions: Provisions for bad loans increased significantly to 6,441 crore in Q4 FY25, compared to 1,610 crore in the same quarter of the previous year.
You May Also Read: WAVES 2025: Nagpur to Host World’s Largest Cinema Screen, A Landmark Initiative in Indian Entertainment
