Mumbai, Nov 4 (PTI) The State Bank of India (SBI) on Tuesday reported a 6.84 per cent jump in consolidated net profit for the September quarter at Rs 21,137 crore, helped by a gain of Rs 4,593 crore from its stake sale in Yes Bank.

The country's largest lender reported a 10 per cent increase in the July-September quarter profit to Rs 20,160 crore, up from Rs 18,331 crore in the year-ago period.

Its chairman, C S Setty, said the bank's overall business has touched Rs 100 lakh crore, and it is the 43rd-largest lender globally by assets.

Despite a 12.73 per cent growth in advances, its core net interest income grew by a muted 3.28 per cent to Rs 42,984 crore, limited by a 0.17 per cent compression in the net interest margin at 2.97 per cent.

Setty said the recent moves by policymakers, including the consumption-driven GST rationalisation, government changes to income tax slabs, and relaxations by the Reserve Bank, have prompted it to upwardly revise its FY26 credit growth target to 12-14 per cent from 11 per cent earlier.

The bank has seen a "phenomenal" pick up in credit post the GST cut implementation, especially in the auto loans segment, Setty said.

He exuded confidence in exiting FY26 with a Net Interest Margin (NIM) of 3 per cent, as per earlier guidance, with moves to reduce liability costs, pointing out that it was able to increase the share of low-cost current and savings account deposits to over 39 per cent.

This means that the overall business, which includes both the assets and liabilities can grow by another Rs 5 lakh crore by the end of the fiscal, he said.

The non-interest income jumped 30 per cent to Rs 19,919 crore on the back of the Yes Bank stake sale.

Setty said the bank has not taken any call yet on the residual stake of over 10 per cent in Yes Bank, and added that it has made a pre-tax internal rate of return of 14 per cent since picking up the majority stake in Yes Bank as part of the government and RBI-run efforts to rescue the troubled private sector lender in 2020.

The retail, agriculture, and micro, small, and medium enterprises (MSME) or the RAM segment led credit growth for the lender in Q2, and the segment now accounts for over RS 25 lakh crore in assets.

Corporate loan growth was subdued at 7 per cent, restricted by factors such as prepayments by some state-run enterprises, deleveraging by cash-rich corporates, and capital-market funds raised through IPOs being used to retire debt, he said.

Setty said the bank may have to relook at current loan growth and NIM targets if the Reserve Bank delivers another rate cut in December or February. In its base case, the house view in SBI is of a status quo in December, he added.

The bank has a pipeline of Rs 7 lakh crore in sanctioned loans or proposals under discussion, which will ensure corporate loan growth of over 10 per cent in H2FY26, Setty said.

Its managing director, Ashwini Kumar Tewari, added that the pipeline is evenly split between term loans and working capital loans.

Conceding that the term loans also include proposals from non-bank lenders, Tewari said the bank is seeing loan interest from power, hydrocarbon, renewable energy, and iron and steel companies.

Setty added that consumption demand holds a big influence on the critical question of when corporates start an investment cycle, and said that investments will come in if demand sustains.

The bank is carrying excess investments of Rs 3.5 lakh crore in government securities and, coupled with the recent Rs 25,000 crore capital raising, has the ability to fund Rs 12 lakh crore of loans, Setty said.

From an asset quality perspective, the fresh slippages decreased to Rs 4,754 crore. The gross non-performing assets ratio improved by 0.10 per cent in the last three months to 1.73 per cent, which Setty said is the best in the previous two decades.

The bank's overall provisions stood at Rs 5,400 crore, up from Rs 4,505 crore in the year-ago period.

The impact of the systemic transition to the expected credit loss-based provisioning system will be limited for the bank, Setty said, adding that it will provide feedback on the draft norms to the RBI.

When asked about the US tariffs, Setty explained that the Q2 will not be a good barometer of the impact as the tariffs were set only in late-August, and added that there has been higher ordering in the run-up.

However, he added that so far, the bank's loan growth and asset quality have not been hit by the tariff moves, even though a fourth of the over Rs 6.76 lakh crore in international advances comes from the US.

The international advances growth came at 15 per cent on the back of currency depreciation, he said, adding that in dollar terms, excluding rupee depreciation, it was 8 per cent.

The bank has a network of 23,050 branches and plans to add up to 500 more in FY26, Setty said.

The SBI scrip closed 0.72 per cent up at Rs 957.05 a piece on the BSE, as against a 0.62 per cent correction on the benchmark on Tuesday. PTI AA DRR

SBI raises FY26 credit-growth guidance to 12-14% after a Q2 profit boost from the Yes Bank stake sale. SBI's September-quarter consolidated profit rose primarily from a Rs 4,593 crore gain on the Yes Bank stake sale, while core net interest income grew modestly and NIM compressed slightly. Management raised the FY26 credit growth target to 12-14 percent citing stronger retail, agriculture and MSME demand post-GST changes, expects a 3 percent NIM guided by liability-cost reduction and central bank action, reported improved asset quality with lower fresh slippages, and noted limited impact from transition to an expected credit loss provisioning framework.