Mumbai, Feb 7 (PTI) State Bank of India (SBI) reported a 13 per cent jump in its December quarter net profit to Rs 21,317 crore on Saturday.

On a standalone basis, a special dividend by the IPO-bound asset management arm helped the country's largest bank report a 24 per cent jump in the net profit to Rs 21,028 crore, its highest ever.

SBI Mutual Fund, which is preparing for an initial public offering, paid a Rs 2,200 crore special dividend which was stated as among the reasons for the high profit growth by chairman C S Setty.

The bank's core net interest income grew 9.04 per cent to Rs 45,190 crore from Rs 41,446 crore in the year-ago period on the back of 15.14 per cent loan growth and a 0.03 per cent compression in the domestic net interest margin at 3.12 per cent.

Setty announced an upward revision in the loan growth target for the ongoing FY26 at 13-15 per cent as against the earlier 12-14 per cent, encouraged by the "rebound" in the corporate loan growth and retail segment holding up well.

On a day when India and the US declared broader contours of their trade agreements in the works, Setty said the bank is enthused by such developments and the same will definitely help in the credit growth.

The bank reported a 9.02 per cent deposit growth during the October-December period.

Setty said the bank's credit-deposit ratio stands at a comfortable 72 per cent allowing a lot of headroom to grow, but flagged challenges from a "structural change" to banks given the "financialisation" in the economy which is leading household savings getting channeled to avenues beyond deposits.

Going forward, banks will have to formulate strategies to ensure that they are able to raise sufficient resources at a favourable price for addressing the credit demand, he said, adding that deepening of the corporate debt markets will go a long way in helping banks.

Making it clear that SBI has sufficient resources at its disposal, including over Rs 3.4 lakh crore in excess government securities investments and a low CD ratio, Setty said the bank has embarked on countrywide deposit mobilization exercise from branches.

With a view that branches will be the source of deposits rather than transactions for customers, Setty said SBI has begun the ABCD project or All Branches should Contribute to Deposits, he said.

The non-interest income, which includes the dividend from the MF arm, grew 15.65 per cent to Rs 8,404 crore during the reporting quarter.

The overall expenses were up at Rs 1,08,052 crore as against the Rs 1,04,917 crore in the Q3 of 2024-25 and Setty said the bank will persevere to keep the cost to income ratio at the current levels.

Setty said corporate loans grew 13.37 per cent, and will continue to be in double digits. Measures like allowing banks to lend to Real Estate Investments Trusts announced by the RBI on Friday will help banks, he added.

The bank has a pipeline of nearly Rs 8 lakh crore, which includes Rs 4.41 lakh crore of loans which are sanctioned but yet to be disbursed and the remaining at different levels of discussions.

Its managing director Ashwini Tewari said the Rs 4.41 lakh crore of sanctioned loans includes Rs 1.50 lakh crore of project loans.

The fresh slippages came at Rs 4,458 crore against Rs 3,823 crore in the year-ago period.

The gross non-performing assets ratio improved to 1.57 per cent as of December 31, 2025, the best in two decades, from 1.73 per cent in September, while the overall provisions came at Rs 4,507 crore as against Rs 911 crore in the year-ago period.

Setty identified geopolitical tensions, global trade uncertainties, financial market volatility, and commodity price fluctuations as the key risks going forward, but denied that the bank was staying out of any sector or being cautious.

The bank chairman denied aggressively pricing or underpricing loans to gain market share, pointing out that the returns are very important for the bank.

The country's largest lender is progressing to become a "digital-first" institution, Setty said, welcoming the RBI's moves to compensate defrauded customers up to Rs 25,000.

Overall capital adequacy stood at 14.04 per cent as of December 31, 2025, with the core buffer at 10.99 per cent.

The SBI scrip had closed 0.65 per cent down at Rs 1,066.40 a piece on the BSE on Friday, as against gains of 0.32 per cent on the benchmark. PTI AA MR MR