State Bank of India (OTC:SBKFF) Q3 2026 Earnings Call Transcript

State Bank of India (OTC:SBKFF) Q3 2026 Earnings Call Transcript February 7, 2026

Pawan Kedia: Good evening, ladies and gentlemen. I’m Pawan Kumar, General Manager, Performance Planning and Review Department of the bank. On behalf of the State Bank of India, I’m delighted to welcome the analysts, investors, colleagues and everyone present here today on the occasion of the declaration of the quarter 3 financial year ’26 results of the bank. I also extend a very warm welcome to all the people who are accessing the event through our live webcast. We have with us on the stage our Chairman, sir, Shri C.S. Setty; our Managing Director, Corporate Banking and Subsidiaries, Shri Ashwini Tewari; our Managing Director, International Banking, Global Markets and Technology, Shri Rana Ashutosh Kumar Singh; our Managing Director, Retail Business and Operations, Shri Rama Mohan Rao Amara; our Managing Director, Risk, Compliance and SARG, Shri Raviranjan; our Deputy Managing Director, Finance Shri Anindya Sundar Paul.

Our Deputy Managing Directors heading various verticals and Managing Directors of our subsidiaries are seated in the front rows of this hall. We are also joined by Chief General Managers of different verticals business groups, Chief General Managers and other senior officials of the circles and various offices are connected through our live webcast. To carry forward the proceedings, I request our Chairman, sir, to give a summary of the bank’s quarter 3 financial year ’26 performance and the strategic initiatives undertaken. We shall thereafter straight away go to question-and-answer session. However, before I request Chairman, sir, I would like to read out the safe harbor statement. Certain statements in today’s presentation may be forward-looking statements.

These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual outcomes may differ materially from those included in these statements due to a variety of factors. Thank you. Now I would request, Chairman, sir, for his opening remarks. Chairman, sir, please.

Challa Setty: Thank you. And good evening, ladies and gentlemen. Thank you for joining us for today’s analyst meet following the announcement of the bank’s Q3 FY ’26 results. At SBI, we have remained consistently focused on strengthening the fundamentals that create sustainable value for all stakeholders. Our performance in the third quarter of FY ’26 reflects continuity, consistency and the enduring strength of our franchise. I will begin with a brief overview of the global and domestic economic environment, followed by an update on the bank’s performance. Despite heightened geopolitical tensions and elevated global uncertainty, the Indian economy remains well positioned, supported by strong macroeconomic fundamentals and a benign inflation environment.

Global growth is projected at around 3.3% in 2025, ’26, while India continues to outperform with the real GDP growth expected at about 7.4% in FY ’26. India’s potential growth remains close to 7% with the FY ’27 growth projected in the range of 6.8% to 7.2%. Growth is expected to remain resilient in FY ’27. The union budget reinforces the government’s commitment to inclusive and accelerated growth under the vision of Viksit Bharat 2047, with a proposed capital expenditure of INR 12.2 trillion, providing strong support to infrastructure and investment. On the external front, the services exports are expected to remain resilient, while the merchandise exports should benefit from the recently concluded and prospective trade agreements, although geopolitical risk and global market volatility remain key downside risk.

Q&A Session

The Indian financial system continues to remain strong and resilient with robust capital, liquidity, asset quality and profitability across banks and NBFCs. Alongside the numbers, we are strengthening the structural drivers of sustainable profitability, productivity, capital efficiency and risk adjusted growth commensurate with SBI scale. Our long-term ambition is aligned with the Viksit Bharat 2047. And our strategy is anchored around the long-term horizon with the continuous investment in people, processes, products and technology. The new YONO represents a fundamental redesign of our digital operating model through YONOization of the bank. Beyond the acquisition, the focus is on lowering cost to serve enhancing customer value and improving lifetime value.

Scaling YONO from INR 10 crore registered users to INR 20 crores over the next 2 to 3 years is expected to support operating leverage and ROE sustainability. Chakra, our center of excellence for Sunrise sectors institutionalizes our ability to support prudent capital allocation in emerging segments. We have initiated, as I mentioned last time, process simplification and a phased deployment of nearly 10,000 [indiscernible] are floor coordinators at high footfall branches for migrating routine transactions to digital channels. Collectively, these initiatives support consistent performance across cycles with growth that is profitable, well capitalized and prudently risk managed. On the performance front, I’m happy to share that the bank has declared highest ever quarterly net profit of INR 21,028 crores and total business has crossed INR 103 trillion reflecting customers’ continued trust in us.

The net profit is up by 24.49% year-on-year, driven by higher operating profitability and lower credit costs at 0.9%. The operating profit is INR 32,862 crore rupees, up 39.54% year-on-year. The net interest income is INR 45,190 crores, up 9% year-on-year. while the domestic NIM stands at 3.12% for the quarter. Bank’s total deposit growth has remained healthy with 9.02% year-on-year, along with current account registering growth in double digits at 10% — 10.32% with CASA ratio at 39.3%, despite a very competitive market environment. Retail thump deposits have grown by a robust 14.54%. Deposits. Our foreign office have also grown well at 8.32% on a year-on-year basis. The credit growth was up 15.14% year-on-year as on December ’25, which was driven by all the segments registering growth.

The domestic credit deposit ratio was at 72.98% at the end of Q3, an improvement of 404 basis points year-on-year. All the components of RAM, retail, agriculture and MSME have witnessed robust growth. The corporate credit has seen a rebound and has grown by 13.37%. The asset quality continues to be industry-leading with gross NPAs at 1.57%, improving by 50 basis points and net NPA at 0.39%, improving by 14 basis points. Notably, the PCR was up 88 basis points year-on-year to 75.54%. The NPA continues to be at its lowest level in our — over 2 decades, which demonstrates the quality of our loan portfolio, disciplined credit practices, underwriting capability and sustained recoveries. The bank remains well capitalized and the capital adequacy ratio has improved by 101 basis points year-on-year and stands at 14.04%, which is well above the regulatory minimum requirements.

Further, our subsidiaries continue to demonstrate consistent performance and strengthen value for all our stakeholders with the expansion of digital channel, innovative products and enhanced customer experience. At Digital front, we have continued to make steady and meaningful progress. We see digital transformation as a continuous journey of evolution and YONO remains central to this journey with over INR 9.65 crore registered customers and registrations for our new YONO, crossing the INR 3 crore mark within a short period of 1 month since its launch, reflecting strong and sustained adoption. Digital channels are now firmly embedded in our customers’ behavior. While we are encouraged by our performance in Q3, we remain mindful of structural shifts in the financial system, particularly the increasing financialization of household savings.

Over time, this trend will gradually reshape bank balance sheets towards more diversified and market-based funding, supported by greater innovation and deeper integration of digital platforms. At SBI, we are proactively adapting by strengthening our liability franchise, increasing our share of current accounts and leveraging YONO to enhance customer acquisition and retention. Our strategy is forward-looking, focused on technology and analytics to remain competitive and future-ready. We remain sharply focused on efficiency and return metrics with our ROA consistently greater than 1% and ROE at 20.68% at the end of Q3. SBI is among the very few global financial institutions capable of sustaining our ROA of over 1% at this scale with an advances book of approximately INR 47 trillion.

Investments about INR 17 trillion deposits of around 57 trillion and a balance sheet size of nearly INR 72 trillion. Our strong asset quality reflects disciplined risk-adjusted lending and portfolio resilience, while robust internal capital generation supports future CET1 accretion and long-term growth. Our people remain central to this journey supported through focused training continuous upskilling and inclusive work culture, ensuring a skilled and motivated workforce in a rapidly evolving banking landscape. To conclude, I would like to thank all of you once again for your continued support and engagement with the bank. Our priorities remain firmly aligned with supporting India’s economic growth while creating long-term sustainable value for all stakeholders.

My team, and I’ll now be happy to take your questions. Thank you.

Pawan Kedia: Thank you, Chairman, sir. We now invite questions from the audience. For the benefit of all, we request you to kindly mention your name and company before asking the questions to accommodate all the questions, we request you to restrict your questions to maximum 2 at a time. Also kindly restrict your questions through the financial results only and no questions be asked about specific accounts, please. In case you have additional questions, the same can be asked at the end. We now proceed with the question and answer session.

Unknown Analyst: Compliments to you, sir, for the yet another good quarter, rather the one of the best quarter profitability point of view even asset quality point of view and even business growth point of view, which was in the earlier first and second quarter was, I mean, not subdued, but better than that if this quarter complements for the same. Having said this, sir, on the profitability like in the last quarter, we had that exceptional profit of the sale of Yes Bank shares. But in spite of that, I mean, this quarter’s profit is matching the last quarter’s profit. And the main component which I see here is that on the investment profit and the revaluation, I mean — and basis income has gone up by INR 5,154 crores as against INR 2,197 crores and also the ForEx and derivatives.

So about INR 2,000 to INR 3,000 is that component. So what has contributed to this profit? Because — but for that INR 4,500 crores of Yes Bank, I mean, the profit should have been lower in this quarter as compared to last quarter of about INR 3,000 crores. This is first question.

Challa Setty: First question. I was just waiting for the next question. Please go ahead. You want me to answer this first, and then we’ll move on.

Unknown Analyst: If you permit, I don’t know whether — shall I?

Challa Setty: Yes, one more question please.

Unknown Analyst: Okay. The another one, I saw that in the last quarter, the business growth is very good, especially the credit growth. And now having achieved that, would you revise your targets for the credit especially, so as to have the proper estimate of the profitability for the whole of the FY ’26 going forward when the bank is doing well. One or 2 more things that our loan book has grown phenomenally at a very high speed. And as well as the — I think the personal loans have also grown. So can you give some color going forward on the overall credit growth segment-wise coming forward? And the one observation is that this non-NPA provision of about INR 30,642 crores. So this is basically beyond the requirement of the — I mean, as far as the IRAC, so is it to take care of the ECL or to take care of any chunky account, which you are looking or is a floating provision you want to continue and rather increase it in future?

Challa Setty: Thank you, [indiscernible] for the good words which you mentioned. The profitability in Q3 has come from many levers. I did mention in Q1, Q2 that both on the growth side as well as on the profitability side, SBI has many levers, and we will continue to use them. If you see our fee-based income, I think most of the segments have shown good growth that is cross-sell, upsell by government business. LC business also is remaining and fee-based income in terms of processing charges and recovery in written-off accounts, and more importantly, the credit growth across the segments. Apart from that, we also have focused on moderating the cost of resources, which has given the uptick in the net interest income. Net interest income growth of 9% is a combination of both containing the cost of resources as well as the credit growth which has happened.

If I have to talk about it one-off I think the one item which is the dividend — special dividend we have received around INR 2,200 crores from SBI Mutual Fund. Even you — net of this one-off I think we have done fairly well in terms of every area and also the modest credit costs also contributed to the uptick in the profitability. We also focused on the moderating the operating expenses, while our SAP costs are broadly [recede] . We try to reduce the cost of overheads, and that also has been one of the reasons why you see the good profitability. And the credit growth advise, we had given 12% to 14% credit guidance earlier. We are revising that upwards to 13% to 15% for the current quarter. We will give a full year guidance when we meet again in the Q1.

But for the current year, I think this current quarter, we are revising our credit growth estimate to 13% to 15% based on the trend which we have seen in the current quarter so far. Segment-wise credit growth, I think the growth has been secular. If you see this slide, particularly that we had given the guidance that we would be having a double-digit corporate credit growth in Q3, and we hope to continue that double-digit rate growth in the corporate side in Q4 also, which means that RAM would significantly be contributing to the growth, continue to contribute. We also see that corporate book growing in double digits which means that our guidance of 13% to 15% is coming from all the segments. Non-NPA provisions, I think the COVID provisions, INR 3,500 is continuing.

And there are some proactive provisions which we have done account-specific but this broadly is also a standard asset provision. So the idea of presenting this is that we have the ability to take care of any untoward incidents and the way we want to manage the balance sheet. It’s not that this is being built for the ECL. That’s not the idea.

Unknown Analyst: Just one more, sir, just one point. Sir, we have given the breakup of the AUCA account of INR 12,464 crores, beyond 10 years is INR 23,000-odd crores, 5 years, INR 87,000 crores and below 5 years, INR 51,000 crores. So in order to get the proper color for the recovery from the return of account accounts, what kind of strategy and efforts which we are having, like beyond 10 years, what is the possibility? What kind of those accounts are between the 5 and 10, and below 5, why not we have a higher percentage of recovery? Because if you see the underwriting quality in during last 5 years, I think your entire current 5 years loan book to NPA, adjusted guess work, maybe even less than 0.75% or 1%. I mean the way I look at the current this thing.

So from a recovery point of view, 5 years means from the date of NPA till now, I mean from the — to transfer to that to that, beyond 5 years, even older. So — but still more recovery or better chances. So how we look at it?

Challa Setty: So in the recent slippages, you would definitely have better recoveries. In fact, much of the run rate, what we are witnessing around INR 2,000 crores per quarter is also coming from the recent slippages that is recent write-offs, which means around 2 to 3 years old. You’re right, I think less than 5-year written off accounts will have a better recovery rate. But I think the most appropriate way is to look at the portfolio level. And what we have given earlier guidance also, we are still seeking 6% to 8% is the recovery, which is possible in this portfolio, not beyond that. While the age wise, there could be some higher recovery and low recovery and there could not may recover at all in some of the accounts. It is better to assume that we are looking at 6% to 8% recovery overall. So I think we still stick to that guidance as [indiscernible].

Unknown Analyst: Congratulations. So I had a couple of questions. Firstly, in terms of your NIM outlook longer term and even for the fourth quarter, you had earlier, I think there was a guidance that NIM would be about 3% in the fourth quarter. So does that still hold? And is there scope for cost of funds to come down further? That’s part of the same question. So NIM outlook for fourth quarter and longer term with focus on cost of funds. And secondly, in fees, the CVE income has grown very sharp. In fees, the CVE income has grown very sharply. So any comments you wanted to make on that? Because it’s a sharp growth Q-o-Q and Y-o-Y. And just one more question. What would have been the interest on income tax refunds for this quarter and for last quarter?

Challa Setty: Okay. On the NIM front, I think we are still sticking — without calling it a short-term, long-term NIM, I think we have said that the exit NIM for the current year would be about 3%. And our long-term guidance is 3% through the cycles. I think we’ll stick to that. There could be some upside here and there, but I think it’s fair to assume that 3% guidance, about 3% guidance holds good, both for the Q4. That means ’26 exit NIM and ’27, ’28 year NIM also, I think we are sticking to the 3% guidance. And on the CVE income, there has been good growth in terms of life insurance. The GST benefit, we have seen, I think, the number of policies sold has also increased that has contributed. And also the trail income from the mutual fund has also gone up.

So there is a secular movement in terms of the CVE. CVE is basically the cross-sell income, right? So I think that’s been a good growth story. We also enhanced the number of products which are made available through our counters and also on YONO channel, that also has contributed to the growth in the CVE income. Interest on the IT fund, you have the numbers ready, please?

Unknown Executive: Quarter 3 interest on income tax refund was INR 769 crores, and the similar amount last quarter was INR 372 crores.

Unknown Analyst: Okay, sir. Sir, and cost of funds scope for deposit cost of funds?

Challa Setty: Cost of funds, I think what we have done strategically is that — we focus more on the retail deposits. We have not moved to the wholesale deposits. Even in the wholesale deposits, we moved more into bulk card rate deposits. That means they are almost equivalent to the retail term deposit rates. We’ve seen a good growth on the card rate. We have not gone aggressive on the differential interest rates, our high-cost deposits. That has also helped us in terms of containing the cost. But we should also remember that 39% CASA at this level is also contributing to bringing down the costs. And we got the full benefit of savings bank reduction in interest rate to 2.5%. And current account, 10% growth rate is also — is helping us to contain the cost of funds.

I think broadly, the cost of funds will remain at this level for the Q4 also. We don’t want to go beyond Q4. I think we will take a call in the Q1. We may have to see how the credit growth is going to play out because all these trade deals are extremely positive, right? So there would be definitely an improved credit climate while Q1 of any financial year is generally is a slow quarter. We will take a call in terms of how our deposit strategy will play out while we have adequate liquidity and as well as capital buffers to support the credit growth.

Jai Prakash Mundhra: Sir, Jai Mundra from ICICI Securities. Sir, just continuing on the previous question, you said that COF, cost of funds may not — may remain stable, right? Is it because that the bulk deposit rates in the system they have actually shot up in the last 2, 3 months? Is that one of the reasons? Because otherwise, your retail deposit should keep repricing, right? Because what we had done in the June, July months, that should continue to flow through, right? So why would the cost of fund be stable until unless there is some moving parts, some portion of the deposit where the rates are a bit higher?

Challa Setty: No, the cost of the retail term deposit is also high even after repricing. See, broadly, the book has got repriced. Only last reduction in interest rate will be available for another 6 to 8 months, probably the repricing will happen. What I’m saying is that the stabilization of the interest rates on the retail term deposits also. There’s nothing much we will be able to reduce. And that shows that, again, what kind of deposit mobilization we need to do going forward if the credit growth comes. So Q4, I think broadly the numbers remain. There could be some repricing going forward because what we have done in the last quarter, the interest rate reduction will play out for some time. But I broadly believe that the reduction in the cost of funds is unlikely. We will be maintaining at this level. Maybe if we are able to mobilize a little more current accounts generally which happens in the Q4, it may help us to moderate the cost of funds.

Jai Prakash Mundhra: And sir, on Xpress credit, right? So now the portfolio is — has grown at 3%, 4% Q-o-Q. We have been maintaining that there is a decent good pickup in the disbursement. Sir, actually, what would help if you can give the absolute rupees crore number in disbursement because that will give the more trend line because the portfolio behavior may be slowly to see the growth, but if you can share the disbursement number in Xpress credit, that will give more clarity.

Challa Setty: No, we don’t disclose what kind of disbursements we do on each product. I think that’s not appropriate. What we are seeking to that is that we were hoping to have a double-digit growth in Xpress credit. There seems to be some movement towards gold loan, may not be significant. Some of these corporate salary package. This product is available only for the salary account holders. We are seeing that part of that salary holder segment has availed gold loan which they would have otherwise taken the Xpress credit. It’s for 2 reasons. One is the value of gold has gone up to the amount of gold loan which they can get has increased. And the rate differential is significant. So that is probably has not resulted in the expected growth rate. But the very fact that we are able to manage this portfolio at this level which means that our sanctions disbursements are robust.

Jai Prakash Mundhra: And lastly, on gold loans, sir. So I think there is a 95% Y-o-Y increase in the portfolio. Is this entire organic or there is some reclassification from agri gold to retail gold? And what are the risk mitigant here in the sense that what is the origination LTV, and maybe the book LTV because prices have been rising one way only.

Challa Setty: So we do a deep dive on this portfolio every day. We monitor the LTVs. What we see that one is, your first question in terms of shifts, there was some shift from Agri gold on to personal gold loan but the shifted back after RBI is clarified on the agri gold loan. I think that shift is not happening to much, by the customer. So I think that is not a major worry. On the personal gold on LTVs, it’s not only about portfolio LTV. Sometimes portfolio LTV can be misleading because some of the — 2 years ago, somebody has taken the gold loan and when the price was lower, then the outstanding versus the value would be significantly lower. But we bucket them and bucket them and both on the vintage as well as in terms of the amount.

We see that the LTVs are extremely modest. And we have sufficient room in terms of the LTVs. For instance, I think in agri gold loan, the average LTV is 54.89% and in case of personal gold loan, it is 51%. Even if you take the latest vintage also, we don’t go overboard under LTVs. There’s an adequate margin available on them. And the other data point which I would like to give to you is that the number of gold loans auction is just about 20-30 in a huge portfolio of gold loans what we have. That means even if the price fluctuation is there, the margin — if you have to ask someone that the margin call — we don’t call it margin call, but we found that nobody allows this account to become NPA. They just ensure that they pay off the loan. So this portfolio is holding up very well.

There’s no concern on this.

Jai Prakash Mundhra: What is the agri gold loan book, sir, if you may have that retail we have given.

Challa Setty: No, agri gold on as on December is 1 lakh INR 44,000.

Sushil Choksey: Sushil Choksey, Indus Equity. Sir, you are rightly called — first, congratulations to SBI for a great performance. Sir, you had rightly called that the RBI rate reduction cycle is bottomed out. I mean it may not look anything negative. And the interest rate scenario can be flat or upwards now. Current volatility led by global factors mainly. GST has been a benefit, budget has been benefit, the EU and the U.S. trade would benefit. How are you seeing the scenario balancing on the rate cycle and the credit outlook based on all these parameters in the current year?

Challa Setty: On the credit side, I think it’s extremely positive. And 2 things. One is the system itself will get benefited with the positivity, which is created on the trade deals on the GST, on the income tax, on the monetary measures what have been announced. And more importantly, SBI is well positioned in capitalizing on all these positive developments. That is also one of the reasons why I’ve given the revised guidance on the credit growth. So if you see the — and even budgetary announcements, both on the infrastructure side, and we are also looking at what kind of infrastructure guarantee, which will come. And MSME, for instance, the Chakra what I mentioned in terms of the sunrise sectors. Many sectors have been mentioned in the budget itself.

That means our thought process is completely aligned with what the government initiatives are doing. So to that extent, I think SBI is well positioned. And we also are a very large player in MSME with 15% to 16% market share and growing. I believe that SBI will get benefited in supporting MSME growth, both on the Champion MSMEs. Even before the government has announced Champions MSMEs, internally, we have started categorizing which are these MSMEs, which have huge growth potential. We try to categorize them into platinum, gold and support them proactively in terms of their growth, the technology and market linkages. So many things what we are trying to do with MSME aligns well with the developments which have happened, positive developments which have happened.

So I believe that we are on the right path in terms of the credit growth. And we are in the right path in terms of both in India as well as cross-border opportunities which will emerge on account of these trade deals.

Sushil Choksey: Second question, sir, led by all the factors, are you sensing — government has given positive policy on data center, which means renewables will be required on a larger number. Nuclear is being talked about. Shipbuilding is being spoken about. Are we getting any green shoots early, whether it’s SBI Capital Markets assessing or internally on credit that ticket size, which used to be INR 2,500 crores project would be INR 30,00, INR 50,000 crores kind of projects?

Challa Setty: We are active in data center financing. The mega data centers, which are announced they still have to come with the business plan. But I think wherever data center capacities are being created, we are part of that journey. In terms of the other sectors, you are right, I think there will be a good amount of demand for the green energy for these data centers. Renewable energy is one of the important segments which we are focusing on. Incidentally, our green portfolio has reached INR 1 lakh crores, which constitutes renewable energy predominantly, which means that these growth opportunities are definitely being considered by us.

Sushil Choksey: Sir, your subsidiaries’ contribution to the balance sheet is an uptick, specifically led by dividend use at SBI Mutual Fund. Is this number on a higher growth trajectory or will remain flat from here?

Challa Setty: Higher growth trajectories?

Sushil Choksey: It will show a higher contribution or…

Challa Setty: I think we definitely hope that the subsidies are doing very well. And I think they are also investing heavily into digitalization, customer-oriented initiatives. I don’t know how much SBI Life talks to the investors. I would like to point out one major activity SBI Life does beyond the profits is Prime Minister Jeevan Jyoti Bima Yojana. The PMJJBY, which is the micro insurance, which is provided to financial inclusion customers through the banking channel, SBI, we have 47% market share in the PMJJBY and fully anchored by the SBI Life. And there is absolutely no complaints on in terms of the settlement. They are the top of the category in terms of providing the customer service. And service at scale is something what SBI Life is able to achieve and [ Banca ] is going to play an important role in this.

And we are also seeing the same trend continuing in the non-life mutual funds, credit card business. I think the combination of their digitalization and their underwriting processes, their customer orientation is helping us to increase our CVE income also.

Sushil Choksey: So can this number double in 3 years?

Challa Setty: So our idea is that we set our target of $1 billion for CVE income. If the rupee stays where it is, I think we should be able to reach that $1 billion CVE income soon.

Unknown Analyst: Chintan Joshi from Autonomous. Sir, can we remain on that topic of growth? With the trade deal, there’s a scope for corporate-led expansion, and you have the capacity on your balance sheet to grow. Is there — like where could you take your LDR ratio, if there is that demand, credit demand coming, be it trade deals or improving economy. And within that, if you do grow corporate loans, do they act as a drag on your NIMs? Or are you able to link it with CASA growth and get it back some other way? Because traditionally, corporate loans would be a drag on your NIMs. That would be helpful color on that topic.

Challa Setty: If you see in the Q3 performance, we have had almost more than 13% corporate credit growth. We have not compromised on the margins. We have ensured that the NIM guidance what we have given is maintained despite 13% accretive growth coming from the corporate side, which means that philosophy of pricing the risk properly will continue. I think we never deviate from that. We also have ensured that the ecosystem banking in the corporate side is strengthened further. Today, I just want to tell you an inside story that any corporate underwriting today, we have a checklist of 22 items which we monitor — whether we have clear engagement on this 22 nonfunding areas, whether it is cash management, whether it is salary accounts, whether it is letters of credit or foreign exchange.

So the awareness on the operating level has moved from corporate lending to corporate banking in a very significant manner. And the sensitivity towards this engagement is intense now. So which gives us confidence that even if we have to compromise on some pricing on a corporate, it will be purely based on what is the value which we are generating from the corporate. So I don’t think we should have any concern in terms of margin compression with the corporate growth book coming back in a very significant manner as we approved in Q3 also. We are very sensitive to that. The value creation from our corporate relationships. And I’m very glad to say that corporates are also responding in a similar fashion. And some of the products which they were never using from SBI.

We have improved the product profile, product delivery, and then they’re too happy to take the products from us. It’s a long journey, but I think we are there in the right direction. On the LDRs, I mean the credit deposit ratio, I think we do not want to give guidance. Obviously, it’s an evolving situation. We have — in the short term, we are very confident that the credit growth, whatever we are envisaging 13%, 15%, will be comfortably be met by our liquidity as well as capital ratios.

Unknown Analyst: Sir, the reason I asked the question was because there was a 3.2% increase in LDR ratio this quarter and NIMs are broadly flat. Now I understand your international NIMs are down, but a 3.2% increase in LDR, should be associated with better NIMs. That’s why I asked that question.

Challa Setty: 3.2% LDR is also coming from the working capital draws. Typically, working capital loans don’t give the yield pickup as much as you expect. It’s not coming only from the term loans alone. So the working capital loans are reasonably priced. And these are high-quality exposures. So which is also one of the reasons why you don’t see the — and one more important thing which I keep talking about is you look at our RWAs. Despite this growth, we have not significantly enhanced our RWAs and that is also 1 of the reasons why you don’t see the commensurate pickup in our margins. We play very cautiously on the risk side also.

Unknown Analyst: Yes. Sir, second question was on the question from Jai on cost of funds. Wouldn’t it be a failure of transmission if the Q4 deposits from last year didn’t reprice this year and gave a benefit on cost of funds. Because we’ve seen a December rate cut that is struggling through pass-through on the liability side, not just from what you’re indicating, but also for the system, which leads to margin contraction because the EBLR book reprices. So how do you see that puzzle? There should be transmission from that fourth quarter last year to the fourth quarter this year?

Challa Setty: December rate cut has not resulted in any repricing of deposits. I don’t think anybody — I don’t think we have done…

Unknown Analyst: No, it hasn’t. It has inched up actually.

Challa Setty: Technically, that transmission did not happen on the deposit side. Well, it happened on the asset side. So the overall transmission, if you see, I think the governor has also mentioned on the stock, it is only 45 basis points. And on the incremental deposits, I think the passing on of the interest rate on the deposits would be around 80, 85 basis points, 90, 95 basis points is something what happened. The full transmission is unlikely to happen on the deposit side. So the repricing, which benefited, I think, 75% to 80% repricing has already happened.

Unknown Analyst: Yes. So exactly the point, right, 45% going to 80% should reflect in your balance sheet next quarter as well?

Challa Setty: It will reflect in the this quarter definitely — but it may not be very significant. That is what I was trying to say.

Unknown Analyst: So excellent Q3 numbers.

Challa Setty: Who is that?

Unknown Analyst: Manoj [indiscernible] Excellent Q3 numbers, just magic hats off to the management team and all the employees really wonderful. Now a couple of questions. One is, I would like to know your thoughts, particularly for the branch expansion globally in the United States and EU, with the kind of sentiment totally turning around. It seems we should have a greater share of the global pie in business. Apparently, banking, we have a top and you also are #1 consumer banker globally, right? We talked about that. So your thoughts, we would expect it should be — may not be too early. Just your thoughts ultimately are to execute it. There could be a good scope for substantial increase in number of branches, regions globally.

It can, I think, maybe more than the scope for more than doubling in the next 3 years. One is that. Next thing is our leadership. We started with that has been contributing to banking sector in a great way, particularly recent couple of last month’s announcements, our MDs, are heading Arijit Basu, Chairman of Induslnd Bank #5 Bank in India; and Vijay also the CEO of Yes Bank. So 2 great contributions, #5 and #6 contributed by SBI. But surprisingly, we were all wondering what happened? We need a CFO from outside. Advertisement for a contract arrangement came. It came out of the blue when we have the top 1 leaders. We need to contribute CFO to the top 10 banks globally. So if you can just share your thoughts on that. And next is our SEBI Chairman talked about the good thing intent on corporate bond market.

It has been a struggle we have seen for last 25 years. But he, in fact, said there is huge scope for multiplying the bond market. Now here, what could be the thing we can gain significantly by way of investment and corporate bonds. Because we get about 50 to 150 basis point, better rates in investment and corporate bonds than in lending. Of course, it would also have an impact on the fund raise but in deposit rates, we are, again, much ahead of the curve. So if you can share your thoughts on this and of course, there are another latest news which came in mutual fund. Yesterday, the global Head of [ BlackRock ] was here, we are talking about multi-planned mutual fund industry by 2 in 5 years. So that could be opportunity for us also because we had running the largest mutual fund.

In fact, if we delay the IPO and come after 5 years, we can get 3x the market cap based on this kind of things. Your thought process on this.

Challa Setty: Thank you very much. I think on the expansion, overseas expansion, most of these geographies where barring New Zealand, where the FTAs or trade deals are signed, we have good presence and very large presence at it. For example, U.S. New York brands is the largest operations for us. And in this jurisdiction, we are broadly the wholesale bankers. And I believe that the trade deals are going to help us mostly in the corporate and MSME funding, which is an opportunity which is available locally here, and we would like to definitely take that opportunity and any of these corporates accessing the overseas market. We have presence across geographies here and our ability to fund those transactions, either by way of trade finance or by way of ECB.

ECB is very, very large. I don’t think we need to look at branch expansion. In the EU area, we have 2 fairly large brands, both only in Frankfurt and in Antwerp and these branches are taking care of the overall requirements. In the U.S., if you see, we have wholesale banks, both in New York and Chicago and Los Angeles, and we have retail presence in the whole of California. And that is where I feel that there is some expansion in the retail side is potentially possible. We are expanding, for instance, we will soon be opening a branch of SBI California in Dallas. Because they can open multistate branches. So I think we will be selective in terms of physical expansion. We also want — would like to use our YONO Global, which is a digital app across the geographies.

almost I think 11 to 12 geographies we already launched YONO Global. We would like to build retail presence through YONO global, not by opening the physical branches. So I think on the overseas expansion, I don’t think we’ll be aggressive. I want to be clear on that. If opportunities arise in the new geographies, we’ll definitely look at it. On the corporate bond market, I fully agree with you that I think we’ve been talking about corporate bond market deepening for so many years. There are many reasons. But it is time now the corporate bond market has to become vibrant. Our participation in corporate bond market is based on what is our credit growth. If there is a loan growth requirements, our priority is to fund that loan growth. But we also have a mix.

If you see all our large corporates have loan limits as well as investment limits, which facilitate us to put the corporate NCD subscriptions. But I think one more development, what probably would help in terms of further strengthening is the partial credit enhancement which is now allowed by the RBI. The partial credit announcement will enable slightly lower-rated corporates to access the bond market. Today, it is typically dominated by AAA companies. So how do we bring A-rated or AA-rated companies into bond market through parcel gate enhancement is something what we’re working on. On the CFO, I’m sure that you made that comment on the lighter note, the CFO, there are a typical qualifications, which RBI fixed. We would definitely be creating the pipeline in the interim, we needed a market resource, but it is also open to our internal candidates.

If somebody is available, we’ll definitely consider that. Mutual fund. We are not fully exiting. So we still have potential to monetize further when market improves I see a great opportunity for mutual fund growth and SBI Mutual Fund will be playing a very, very large role in this. Thank you.

Unknown Analyst: Sir, one more recognition I would like to highlight for benefit of all, particularly congrats to you and our DMD Finance for getting the corporate excellence in financial reporting by the regulator award. Again, last year, we got it. I was enrolled in the process, and this year, SBI has gotten and also Yes Bank has also got it. So that also applause to you and the team. Congrats once again.

Ankit Bihani: Ankit Bihani from Nomura. So I wanted to ask about the outlook on the treasury income now. So given that the yields have hardened and we assume it remains status quo. So how do you see should we see our treasury income moderating sharply from here on? Or we do have we can sell AFS security to participate in OMO through STM to manage treasury income. My first question is on that. The second question is on LCR. So what is our average LCR for the quarter? And what would be the impact of the new norms when they get implemented in first April? And the third question is on your fee income breakup, you give miscellaneous fee income as a part as well. So we have seen decent pickup there in the last 2 quarters. What is driving that? And what is that fee basically?

Unknown Executive: So treasury income side, we are — at least we are not envisaging any significant decline in what you are saying. So this number should be — should continue like this, not more. There will not be any reduction overall. So we are talking about treasury — market is ForEx income, treasury income, equity investment…

Ankit Bihani: I exclude the ForEx income. I’m just talking about your FPTPL book. So if the yield is hard and so you have to mark-to-market on that book, right?

Unknown Executive: That’s right.

Ankit Bihani: Then how do you manage the treasury income? Either we sell it or…

Unknown Executive: Maturities also then. So there are opportunity also when something like this happened, yield goes up and we have the MTM hits. So this quarter also, we have seen this happening because of the MTM, but we have maybe covered somewhere else. So largely, this will —

Ankit Bihani: So do you this is something structural that can continue for a longer time or…

Unknown Executive: No, we have opportunities for making some other income somewhere else.

Challa Setty: I think just to clarify what he is trying to say is that if your question is in terms of how do we manage the yield movement? So our internal view is that the yields probably will range from 6.55% to 6.75%. In this range, there is no concern on the MTM hit. And in any case, the Q3 numbers have not been built on the MTM gains if you have seen. We believe that there may not be a great contribution coming from the positive MTM on the book. The negative MTM could be impacted would be less because FVTPL HFT book is small, even if there is a movement of the yields, I don’t think there is going to be any significant impact on the MTM. And we also have, as Ashis mentioning, an opportunity to as you mentioned, participate in the OEM roles, participate in the buybacks.

And we even participate — I mean do the trading. If you see, I think the trading profits have been robust for the last 2 quarters. So that will continue. That process will continue. Anything unanswered remains?

Ankit Bihani: It’s understood.

Unknown Executive: 0.2 to 1.3, that is the numbers — 125.

Ankit Bihani: And the third question was on the miscellaneous fee income line item.

Challa Setty: Miscellaneous fee income, I think the — you have miscellaneous fee income is a very diversified income streams. But if you really have to put, I think some of the major ones is cash management services that we provide and also the mobile banking charges, which we collect, account maintenance charges for nonsavings bank customers, annual inspection charges and a host of other charges. It’s all diversified income stream. We also adjusted for the GST payment, which happened. So that is a net figure, which is shown here.

Kunal Shah: Kunal from Citi Group. So firstly, when you look at it overall in terms of the growth traction, how are we seeing the catch-up on the PSL side, particularly on SMF as well as [indiscernible] section? Because at this pace of growth, do we see some shortfall coming through towards the end of the year and that might have a drag in terms of investments on our IDF and what are the initiatives being taken if we grow at like 14%, 15%, is that pace catching up? Secondly, on CA and you look at it, particularly, there has been a decline during the quarter on a sequential basis. No doubt, we are at double digit. We were growing at 18-odd percent as well. So is it more of a quarter-end phenomena? And maybe how do we see because I think for most of the players, we have seen CA picking up on the private side. So is there some loss in market share which is happening on the CA front?

Challa Setty: Yes. I’ll take these 2 questions and come back because there are very 2 important questions, which you asked. I want to answer them. The current account, we are predominantly seeing on the private side. despite actually the significant decline on the government business is virtually drying up on the government’s current account. So in the last 1 to 2 years, we focused completely on the private side, business accounts. and that has given us a current account uptick. And current account also is not a quarter end or month-end phenomenon. We monitor in terms of the daily average balance to a quarter end number, and it is very robust. It’s more than 80%, 85%, which means that your daily average balances are holding up.

So this is not — obviously, there will be a month-end and quarter end movement, which is unavoidable. But we are very comfortable in terms of this ratio, that daily average balance to quarter balance. The other one is in terms of PSL. PSL, as you grow the book PSL pressure will come. We have been addressing that in various forms. One is the organic growth PSL targets are given to every business segment, including the corporates. We know that we do a lot of on lending to a lot of NBFCs, where they qualify for PSL, and the clear monitoring. In fact, what we suggested that if an NBFC MFI is there, our NBFC is there, which has got a PSL only funding, which is from us we are willing to give some discount on our rate, which means that we would like to prevent the bleeding on the PSLC side, and we are broadly are able to do that.

The subsegments, which you mentioned definitely are the concern for everyone, the small and marginal farmers, because the portfolio is very small. And our requirement is 7.5% of the overall portfolio. I think it is creating an imbalance. And we also don’t want to aggressively push up the PSLC purchases so that year-end PSLCs will push up the premium. What we have done is that we have front-loaded our PSLC purchases in the Q2 itself. We virtually have not moved to PSLC market in Q3 at all. So we do a lot of things in terms of reducing the PSL burden. Hopefully, I think the new guidelines, there are some positives in the guidelines. We are just evaluating how the PSL movement will happen in our book.

Kunal Shah: The reason was, as you mentioned, like when Chentan was also checking on overall LDR expansion but not improvement in margins, which you mentioned is because of working capital drawdown as well as corporate, which is low yielding, then is it like maybe, do we factor in the cost of PSL, which is there at the time of doing that business because both these segments have grown quite robustly, like [ SME ] is up 10% quarter-on-quarter. Corporate is up like 8% quarter-on-quarter?

Challa Setty: So much of the SME growth is in the qualifying PSL category. So that’s not a big worry. MSME growth is not a worry. But I think on the corporate credit growth, we definitely consider various cost factors while we do primarily look at the risk involved and how do we price the risk, we also look at our cost of funds and what is the alternate mechanism of investing those funds. We have a very simple mechanism called risk adjusted return on capital. I think we did mention earlier also. So the capital optimization is also core to our pricing strategy. And the PSL cost many a time is worked out on a portfolio basis, not on an individual account basis. Those costs are definitely accounted for.

Kunal Shah: And one last question, no plans to tweak MCLR from the current level now. So we are — we’ll hold on to our MCLR rates?

Challa Setty: MCLR is an arithmetical calculation. As long as the cost of deposits remain at that level. I don’t think MCLR…

Kunal Shah: Yes. So given that incrementally, we are not tweaking cost of deposits in any bucket. So then…

Challa Setty: We are not.

Kunal Shah: So then we should consider like MCLR will remain at the same level?

Challa Setty: Yes. So at this juncture, neither we are considering any tweaking on the deposits. Alco will take the call. But I don’t think any NCLR movement is likely to happen in the near term.

Unknown Analyst: [indiscernible] from AMBIT Capital. So a couple of questions. On the employees’ provision, it’s 25% and 32% lower Q-o-Q and Y-o-Y. So what’s the reason on that? And any calculations on new labor code that will be affecting us.

Challa Setty: We did the assessment of the new labor code. There’s no noticeable impact because our waste structure is broadly aligned with the labor costs. That means no impact except that there is a requirement of providing for gratuity of contractual employees who have completed 1 year earlier, it was 5 years. It has been reduced to 1 year. The net impact is only INR 16 crores provision, which we had to make. So I think we are broadly in alignment with labor codes, but we are also looking for the rules, regulations to come. And if any assessment is required to be done, we’ll do. But I don’t think there is going to be any impact on the labor costs. The first thing you asked in terms of provisions, essentially, the provisions have come down on the staff expenses, provision for pension. These provisions are based purely on the actuarial assessment and the discount rates have moved up, which means that the requirement of provision has come down.

Unknown Analyst: So run rate will be in the similar lines of Q3? So it’s around?

Challa Setty: Q4, you mean. Q4, I think run rate should be similar.

Unknown Analyst: And going forward also, this should be the run rate?

Challa Setty: Next year, we’ll assess because this actual assessment happens every quarter.

Unknown Analyst: But it’s not a one-off, actually

Challa Setty: There is nothing unusual movement in that provisioning.

Unknown Analyst: Okay. And on the second, so how much of the 100 basis point rate cut that previously have happened has been translated in the yields? How much is the left on debt side? And what’s the current MCLR book? And how do you see the repricing of latest 25 basis points that will happen in our yields?

Challa Setty: You asked so many things together. Please. So MCLR book — see, we have — if you divide the whole book, we have 50% MCLR and fixed rate and 50% EBLR and other benchmark rates. That means around 45% to 48% booked is floating. The rest is not really floating MCLR fixed rate.

Unknown Analyst: So full repricing of the 100 basis point is done. We can assume that? 100 basis points? Last 100 basis points and the latest?

Challa Setty: MCLR book, anyway, the complete 125 basis point has been passed on.

Unknown Analyst: On MCLR…

Challa Setty: MCLR could be — I don’t know, I don’t have the number. We’ll give you that number.

Unknown Analyst: And latest, the 25 basis point rate cut? How do you see yields affecting going forward, Q4 and FY ’27?

Challa Setty: The previous rate cut?

Unknown Analyst: Yes, ’25 December.

Challa Setty: December rate cut, I think it will take some time to transmit in the deposits. But we have not cut the deposit rates.

Unknown Analyst: On the yield side only, sorry.

Challa Setty: Yield side, I think it is about INR 800 crores or something and the overall full year basis. Margins, I think, 1 basis point or something what we have booked out.

Unknown Analyst: Okay. So trajectory, anything of 25 basis, sorry, trajectory of the passing on the yields of the 25 basis points, if you can share thoughts?

Challa Setty: Sorry, I didn’t get your question.

Unknown Analyst: Okay. I’ll get back in line.

Nitin Aggarwal: Nittin Aggarwal from Motilal. Congrats on a strong quarter. And so my question is again around the cost. If you look at like last 2 quarters, we have been reporting very controlled cost growth. The OpEx this quarter is like a slight decline, and we are now talking to further raise the loan growth guidance. So how do you see the cost income ratio to play out over the next 2, 3 years?

Challa Setty: So the growth — credit growth is not substantially going to enhance the cost, the operating costs at least. Maybe the interest cost, we would like to manage the interest cuts, as I mentioned, in terms of moderating the cost of deposits, focusing on the CASA. So our objective is to keep the cost-to-income ratio below 50%. I think that guidance we had earlier given, we are sticking to that guidance.

Nitin Aggarwal: All right, sir. And second is on the ROA, wherein we have talked about to maintain 1% ROA guidance. Now that if I look at 9 months, we are tracking higher than that. So will you want to review that? And any further levers if you want to highlight, which can take ROA higher in the coming years?

Challa Setty: I think we still stick to that 1% guidance. I don’t want to jump the gun at this juncture. It’s playing out well. And we also are mindful of our RWA density. I think this is something which we very conscious about that, which means that you can’t have a jump in the ROA. We want to be consistent on the ROA front. I think the guidance will remain at 1%. What are the other one you asked?

Nitin Aggarwal: So just any levers, I think.

Challa Setty: There are quite a few levers. But I think the levers point out that we will maintain this 1% guidance through the cycles. I think that’s very important to — we’re not giving the guidance only for 1 quarter or 1 year. We said our guidance is 1% ROA through the cycles.

Pritesh Bumb: Pritesh from Dam Capital. Sir, one question on private CapEx. Last time you had made a comment that it is improving. And with some of the corporate growth revival, do you think it will further pick up? And what is our pipeline in terms of corporate book ahead?

Challa Setty: I’ll ask Ashwini to respond.

Ashwini Tewari: So the pipeline is [INR 7 lakh INR 86,000 crores ] with a sanction, but not disbursed about INR 4.4 lakh crores and the without sanctioned pipeline, INR 3.45 lakh. That’s a total undisbursed plus pipeline. So pipeline pure pipeline is INR 3.45 lakh crores. In terms of growth in the corporate side, yes, you are right. We are seeing pickups. And the 2 new things, which will help us next year. One is the announcement by RB on REITs. So that’s a market so far, we were not allowed to. That’s about — it’s a large market and growing fast. So we hope to develop something there. And also, M&A, the guidelines finally when they come, we’ll hope to start doing that as well. Those 2 will help us to give us more basis to increase the corporate book and in a better margin because both these segments are better paying than some of the other segments.

And we’re also seeing other pickup happening in the corporate side, especially on in power, including renewables, metals and also infrastructure.

Pawan Kedia: Due to paucity of time, we will now take up a few questions coming in through the online webcast, which will be addressed by the Chairman, sir.

Challa Setty: This first question is Banti Chawla. Loan growth guidance for FY ’27. FY ’27, we said that we’ll give the guidance somewhere in Q1. But for the current quarter, I think we have revised our credit growth guidance from 12% to 14% to 13% to 15%. Kanika, do you see credit growth sustaining with such wide credit deposit growth gap? I think we have had a long discussion on the credit growth, and we do not see, as I mentioned, any challenge. We have adequate liquidity buffers as well as capital buffers in our book. Credit growth outlook, Akhilesh Gupta, the credit growth for the bank for Q3, 15.14%. And as I mentioned, we have revised the earlier guidance from 12% to 14% to 13% to 15%. Outlook on NIM, I think, is broadly addressed.

We are still seeking to our exit NIM of 3% for the year and 3% through the cycles. Kartik, what would be the guidance for ROA. I think that, again, we have answered 1% through the cycles. In which area of business do we have earned more? I believe we have earned everywhere, I suppose. But I think the — some of the lines of business are more profitable, like Xpress credit, the portfolio of INR 3.5 lakhs crores definitely gives us a yield pickup. But I also mentioned in terms of the ecosystem improvement in the corporate banking side, which is also contributing to the income levels. And one of which we did mention is in terms of the dividend payout from the SBI Mutual fund. Sangita, could you give color on the other income, which element showed growth and is sustainable?

I think other income, fee income, treasury, ForEx, all have showed growth. CVE income, that is customer value enhancement income also has shown significant growth, and we believe that it is sustainable. Lavish, what are the components in miscellaneous income? I think we have answered this miscellaneous income segment. But you are talking about INR 5,000 crores. I think in this, there’s a INR 2,200 crores from the mutual fund and recovery from written-off accounts about INR 2,600 crores. These are the 2 major elements in the miscellaneous income. What was the interest on IT refund during the quarter? I think that was answered by DMD Finance, it is INR 769 crores Q3 and INR 40 crores in the previous quarter. Kiran Shah, what is the yield on gold loan portfolio?

Is ticket size average, LTV at origination and at end December ’25? Yield and personal gold loan portfolio in 31st December is 8.61%, with average ticket size of INR 2.64 lakhs. LTV, I did mention that it is 56.57% in December ’24, which has come down to 51.18% in December ’25. Vishal Gupta, GNPA and NNPA ratios have improved further this quarter, which segments are driving this improvement? I think overall improvement in the — all the segments is driven. Of course, corporate has no asset quality issues. Corporate NPA has gone down by INR 1,888 crores. So foreign offices also have shown a decline in the NPAs. Param, can you give a breakup of [indiscernible] between retail, agriculture and MSME? SME is INR 34,000; Agriculture is INR 7; Retail is INR 7,000 and Corporate is INR 1.10 lakh crores.

Rohit, what has been the impact of the new labor code?. I think we did make a mention on the labor code impact. It is not significant at all. It’s just about INR 16 crores provision we had to make to comply with the norms. M.B Mahesh, could you walk us through what is the total gold loans in retail, SME and agriculture? SME, we have not much of portfolio. Agri gold loan is INR 1.44 lakh crores, and personal gold loan is INR 86,000 crores. Thank you.

Pawan Kedia: I trust all the questions have been addressed. We’ll be happy to respond to other questions in offline mode. Let me end the evening with thanking Chairman, sir, MD Sirs, DMD sir, top management team, senior officials of the circles and various offices connected through webcast, analyst, investors, ladies and gentlemen. We thank you all for taking time out of your schedule and joining us for the event. To round off this evening, we request you all present here to join us for high tea, which is arranged just outside this hall. Thank you so much.