State Bank of India posts best day in over 5 years: Here are key things you need to know

Shares of State Bank of India, the country's largest lender, clocked their best single-day gain in over five years on Monday, February 9 after it reported strong December quarter earnings on Saturday. State Bank of India shares surged as much as 6.62%, its biggest jump since February 2, 2021, to hit a fresh all-time high of ₹1,137 on the National Stock Exchange.

SBI shares came under strong buying interest after the bank reported strong December quarter earnings on Saturday. The bank reported its highest-ever net profit of ₹21,028 crore in the third quarter of current financial year, marking an increase of 24.5% from ₹16,891 crore in the same period last year.

The bank's net interest income or the difference between interest earned on loans and expended on deposits advanced 9% to ₹45,200 crore from ₹41,445 crore in the year-ago period.

SBI's asset quality showed an improvement in October-December period as its gross non-performing assets (NPA), as a percentage of total advances improved to 1.57% from 2.07% in the corresponding period last year. In absolute terms gross NPAs came in at ₹73,637 crore.

The bank reported robust credit growth across segments, with whole bank advances rising 15.14% year-on-year (YoY), driven by strong domestic demand and healthy traction in retail and SME portfolios.

Domestic advances grew faster at 15.44% YoY, while advances from foreign offices increased 13.41% YoY, reflecting steady overseas business growth.

The retail advances portfolio expanded 16.51% YoY, posting double-digit growth across all segments. Within retail, personal advances rose 14.95% YoY, indicating sustained demand for consumer credit.

Global investment bank - Bank of America Securities in a report said that SBI reported stronger than expected earnings driven by stable net interest margins, controlled opex and modest credit cost.

"Loan growth picked up strongly to 6% QoQ and 15.6% YoY and management revised up FY26 growth guidance to 13-15% YoY. Deposit growth was softer at 2% QoQ and 9% YoY with LDR inching up to 81% but management does not see deposits as a constraint for loan growth. Expect corporate growth momentum to continue given ₹7 lakh crore pipeline and see strong demand in MSME," Bank of America Securities said in a note.

On NIMs, the bank guided to further improvement and expects NIM to exit at 3% in F26. The loan growth guidance for F26 is revised up to 13-15% versus 12-14% earlier. The asset quality remains strong despite macro slowdown over the past years, Morgan Stanley noted.

"We raise our EPS estimate for F26 by 8% given strong F3Q26. Our EPS estimates for F27/F28 remain unchanged. We stay EW given near-full valuations. Key upside catalyst would be better-than-expected revenue growth. Downside risk would be negative surprise on asset quality," the global investment bank added.

"SBI reported a strong 3Q with broad-based beats across key parameters. What stood out for us was SBI’s ability to deliver industry-leading growth while maintaining margins and an improving asset quality trajectory, which we believe can continue to support the re-rating," JPMorgan said.

“For December quarter, SBI's profit of ₹21,000 crore, +24% YoY, was ahead of estimate with higher other income and lower credit costs. Improvement in loan (gross) growth to 15%, peer-group leading NII growth of 9%, healthy fee growth of 16% and low credit costs were positives. Deposit growth stays low at 9% and while domestic LDR at 73% has headroom, the need to lift deposit growth will limit NIM upsides,” Jefferies said.

As of 10:22 am, SBI was top gainer in the NIFTY50 index, the stock traded 5.71% higher at ₹1,127, outperforming the NIFTY50 index which was up 0.5%.