NIFTY PSU Bank index in focus as SBI to report Q2 earnings today; here is what you need to know

The NIFTY PSU Bank index on Monday advanced nearly 2%. In the past one week, the index has rallied around 4.4%, while in the past 30 days, the gauge has jumped an impressive 10%.

The Nifty PSU Bank index is designed to reflect the performance of the public sector banks.

All eyes on SBI after other PSBs numbers

Market participants are eagerly awaiting the quarterly results of India's largest lender, SBI, following a good set of numbers from smaller PSU lenders such as Bank of Baroda (BoB), Punjab National Bank, Bank of Maharashtra, City Union Bank, and others.

Punjab National Bank, the country's leading state-run lender, on Saturday, October 18, reported a net profit of ₹4,904 crore in the second quarter of the current financial year, marking an increase of 14% from ₹4,303 crore in the same period last year.

Its net interest income (NII), or difference between interest earned on loans and expended on deposits, declined marginally to ₹10,469 crore in the July-September period from ₹10,517 crore in the year-ago period.

During the quarter, Punjab National Bank wrote back provisions worth ₹639 crore for bad loans against provisioning of ₹199 crore in the same period last year.

BoB, on the other hand, reported an 8% decline in its net profit for the September quarter to ₹4,809 crore, due to softer core income growth and a high base impact.

The public sector bank's core net interest income grew 2.7% to ₹11,954 crore on the back of a nearly 12% growth in advances and a compression in the net interest margin to 2.96% as against 3.11% in the year-ago period.

Total income also declined to ₹35,026 crore in the second quarter from ₹35,445 crore in the same period of the previous fiscal.

Its managing director and chief executive, Debadatta Chand, told reporters that it was able to increase the NIMs from a sequential perspective from the 2.91% in the June quarter and added that the number will remain "range-bound" in Q3 and widen in Q4. The FY26 NIM will be between 2.85 and 3%, Chand added.

SBI Q2 Preview

According to news reports, SBI is likely to report a decline in both net interest income (NII) and profit for the September quarter of FY26 (Q2 FY26), weighed down by lower treasury gains and a slight fall in margins.

Besides, analysts, per the reports, expect SBI’s gross non-performing assets (GNPA) to improve to 1.8% in Q2 FY26 from 2.1% a year earlier, while the net NPA ratio is likely to remain steady at 0.5%.

Loan growth, deposit accretion, and net interest margins remain key monitorables, offering insight into the strength of SBI’s earnings resilience and its growth trajectory in the coming quarters.