SBI aims to maintain over 1% RoA in FY26 despite margin pressures from rate cuts: Chairman

The State Bank of India (SBI) will maintain a return on assets (RoA) of over 1 per cent in FY26 despite expected margin pressure due to the softening interest rate cycle, Chairman C S Setty said on Saturday.
RoA is a key profitability ratio that reflects how efficiently a company generates profit from its assets. Speaking to analysts after announcing the bank’s quarterly results, Setty noted, “We still will be able to maintain 1 per cent RoA guidance for the current financial year... our goal is to consistently achieve an RoE of over 15 per cent through the business cycles.”
He added that the easing repo rate cycle could impact the net interest margin (NIM), but SBI plans to realign its deposit rates accordingly. “We will ensure that the readjustment of interest rates on the deposits are aligned broadly with repo rate cuts so that margins are protected,” he told news agency PTI.
Although he did not specify a target for NIMs, Setty said the full transmission of policy rate changes into deposit costs could take 12–18 months.
For FY25, SBI recorded an RoA improvement from 1.04% to 1.10%, while return on equity (RoE) remained steady at around 20%. The bank’s balance sheet expanded to ₹66 lakh crore, with operating profit crossing ₹1.1 lakh crore. Net profit touched a record ₹70,901 crore, up 16% from ₹61,077 crore in FY24.
Setty reaffirmed SBI’s focus on consolidating its leadership in current and savings accounts. “We continue to focus on increasing our share, our leadership in current account while maintaining the leadership position in savings deposit by further strengthening our customer service and branch network,” he stated.
SBI also made significant strides in asset quality. Gross NPAs declined to 1.82%, and net NPAs fell to 0.47% as of March 2025. “For the first time you see two important ratios, the gross NPA ratio coming down below 2 per cent and net NPA ratio below 0.5 per cent and with a loan book of ₹42 lakh crore plus, we believe that we have done a good job on the asset quality front,” Setty noted.
The bank reported fresh slippages of ₹4,222 crore for the quarter, mainly from the SME, agriculture, and personal loan segments. However, ₹572 crore of these loans were recovered in April and reclassified as performing.
SBI’s board also approved a provision to raise up to ₹25,000 crore in equity capital. Setty clarified that the bank currently does not require additional capital for loan growth, which could be supported up to ₹8 lakh crore with existing buffers. “Based on the current profitability and growth profile of the bank, we believe we have sufficient headroom to take care of business growth requirements,” he said.
The overall capital adequacy ratio stood at 14.25% as of March 31, with a core Tier-1 buffer of 10.81%, which Setty acknowledged is slightly lower compared to peers. He added that the bank remains open to a capital raise if market conditions and business needs warrant it.