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State Bank of India
- Sector: Financial Services
- Sub Sector: Banks
- Country: India
- Bond: SBIIN 4.875 28
- Indicative Yield-to-Maturity (YTM): 5.23%
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Fundamental View
AS OF 19 Nov 2025State Bank of India (SBI) is the largest state-owned bank in India and is in some respects the country’s flagship bank. Given the bank’s ~55% government ownership and systemic importance, government support for SBI is very strong.
The bank’s capital buffers are relatively low, but we take comfort in the strong government support.
Business Description
AS OF 19 Nov 2025- State Bank of India is the largest commercial bank in India. Its predecessor banks date back to the 19th century. In the early 20th century, they merged to form the Imperial Bank of India, which became the State Bank of India after India gained independence in 1947.
- The Government of India remains the largest shareholder with a 55.03% stake. Per the SBI Act, the government's shareholding cannot fall below 55%.
- SBI's merged with its 5 associate banks and Bharatiya Mahila Bank in 2018. The merger catapulted SBI into one of the world's 50 largest banks.
- The bank has 85% of its loans in the domestic market, and has steadily increased its international business too over the past few years with offices across all international business centres. The domestic book is split 43% retail, 33% corporates, ~14% SMEs and ~10% to the agri segment as of September 2025.
- It has diversified its operations with well regarded subsidiaries in the areas of fund management, credit cards, insurance, and capital markets.
Risk & Catalysts
AS OF 19 Nov 2025SBI does not have a strong buffer vs. the regulatory minimum of 8%, but its size, systemic importance and majority government shareholding confer particularly strong government support. But consequentially, any deterioration in the sovereign ratings will also affect the bank’s credit.
RBI repo rate cuts will impact the NIM in FY26-27, with another 25 bp reduction on the table in December. System loan growth has been slow despite improved system liquidity, but picked up in F2Q26. Momentum should sustain into F2H26 given GST rate cuts and the 3Q festive season. A sustained pickup in private sector capex though hinges on consumption strength enduring beyond the festive period.
We are cautious about pockets of stress in Indian retail, particularly unsecured retail and microfinance. Asset quality however is trending well as SBI’s personal unsecured loans book is ~95% to salaried employees of top tier corporates and the government.
Key Metric
AS OF 19 Nov 2025| INR mn | FY22 | FY23 | FY24 | FY25 | 1H26 |
|---|---|---|---|---|---|
| NIM | 3.12% | 3.37% | 3.28% | 3.09% | 2.93% |
| ROAA | 0.67% | 0.96% | 1.04% | 1.10% | 1.15% |
| ROAE | 11.9% | 16.5% | 17.3% | 17.3% | 16.4% |
| Equity to Assets | 5.6% | 5.9% | 6.1% | 6.6% | 7.4% |
| CET1 Ratio | 10.3% | 10.6% | 10.6% | 11.1% | 11.7% |
| Gross NPA Ratio | 3.97% | 2.78% | 2.24% | 1.82% | 1.73% |
| Provisions/Loans | 0.91% | 0.54% | 0.14% | 0.38% | 0.47% |
| PPP ROA | 1.58% | 1.59% | 1.60% | 1.72% | 1.69% |
CreditSight View Comment
AS OF 05 Nov 2025SBI is India’s largest bank and a well-run franchise. Government support (55% shareholding, can’t drop below 51%) underpins SBI’s relative positioning, while fundamentally, it has good operating metrics and business plans, a comfortable LDR, sufficient CET1 ratio (recently boosted by an equity raise in Jul-25), and the best management among the public sector banks. India’s macro backdrop remains relatively robust and SBI’s lower risk personal unsecured loans clientele is supporting asset quality well. Lower rates should keep asset quality well-supported. Rate cuts will feed through to the NIM in FY26, but treasury gains have provided some offset. Loan growth has been off to a slow start for the sector but is picking up. We like the name, but have it on M/P as it trades fair.
Recommendation Reviewed: November 05, 2025
Recommendation Changed: April 25, 2025
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