State Bank of India (SBI) India, the largest bank in the country, reported its results on Friday. Investors were keen to analyse the performance of this key bank on various operational parameters.
Let’s dig in to find out how SBI performed on various parameters and compare its performance to its nearest rival, HDFC Bank, the largest private sector bank.
March 2026 quarter – SBI’s core operations give strong competition to HDFC Bank
Now, let’s analyse the March 2026 results of SBI and how do they compare with HDFC Bank.
Core operational performance of SBI v/s HDFC Bank
| Bank name | Growth in lending (% change y-o-y) | Growth in deposits (% change y-o-y) | Net Interest Margin (%) |
| SBI | 17.2% | 11% | 2.93% |
| HDFC Bank | 12.1% | 14.4% | 3.53% (on interest earning assets) |
SBI has the largest branch network of23,265branches at the end of Q4FY26 pan India, and it helped the bank to give a strong challenge to the ‘nimbler and growth oriented’ HDFC Bank.
SBI grew its advances by 17.2% y-o-y to Rs 48.77 lakh crore in the March 2026 quarter. To the largest bank’s credit, it had grown its SME loans by 21% y-o-y in Q4FY26 while agri loans grew 19.7%.
The March quarter is typically a ‘busy’ season for credit, with individuals, small and large companies borrowing funds heavily before the close of the financial year.
Credit growth is an operational parameter of a bank that is keenly tracked.
Smaller rival, HDFC Bank, recorded credit growth of 12.1% y-o-y to Rs 29.37 lakh crore in the March 2026 quarter. The largest private sector bank saw strong demand from small and mid-market loans that grew by 17.2% y-o-y and business banking that grew by 20% y-o-y in the fourth quarter of FY26.
Of equal importance, SBI’s deposits grew 11% y-o-y to Rs 59.75 lakh crore in Q4FY26, with the bank reporting strong growth in time deposits, largely fixed deposits.
Deposits form the basis of extending credit for a bank, short and long-term to clients.
Meanwhile, HDFC Bank’s deposits grew 14.4% y-o-y to Rs 31.05 lakh crore in Q4FY26, and that was also owing to strong growth in time deposits.
Managing NIM pressure – strong growth in high-margin loans to SME
Net Interest Margin (NIM) is another key operational metric tracked by investors.For SBI, in its key domestic operations, it was 2.93% in the March 2026 quarter as against 3.14% a year earlier.
Earlier, HDFC Bank, highlighted it’s NIM was 3.53% on interest earning assets in the March 2026 quarter as against 3.7% a year earlier.
Loans for retail and SMEs enable banks to earn a higher rate of interest on loans / credit as against loans to top-rated corporates, and help them manage the pressure on NIMs.
The RBI has taken several steps to boost lending in the broader banking system and this includes the cut in repo rates in early December 2025. This in turn has put a temporary pressure on NIMs of banks, like SBI and HDFC Bank.
29% decline in other income for SBI
SBI’s other income dropped to Rs 17,314.1 crore in the March 2026 quarter from Rs 24,366.7 crore a year earlier.
The largest bank in its results presentation highlighted its forex / derivative income was Rs 1,258 crore in the March 2026 quarter as against Rs 2,859 crore.
Also, it incurred a loss on sale / revaluation of investments of Rs 1,471 crore in Q4FY26 as compared to a profit of Rs 6,879 crore a year earlier.
The above loss could be partly attributed to rising 10-year government bond yields, given the Gulf War and rising interest rates globally. Rising government bond yields result in losses for banks, like SBI.
Asset quality remains strong for both banks
SBI’s asset quality has continued to remain strong in Q4FY26, and virtually matching HDFC Bank, which has one of the lowest NPA ratios in the domestic banking industry and is often viewed as the benchmark.
SBI’s % of net NPAs was 0.39% in the March 2026 quarter as compared to 0.47% a year earlier.
SBI’s provisions for non-performing assets were Rs 3,140.5 crore in the March 2026 quarter as against Rs 3,964.2 crore a year earlier. The largest bank in the country has highlighted that its provision coverage ratio was 74.4 % at the end of the Q4FY26, broadly in tune with a year earlier.
SBI’s provisioning is well above regulatory requirements.
A sharp decline in other income of SBI resulted in its standalone net profit rising by just 5.6% y-o-y to Rs 19,683.8 crore in Q4FY26.
For HDFC Bank too, its asset quality has also been quite stable — its % of net NPAs to net advances was 0.38% in the March 2026 quarter as against 0.43% a year earlier.
Its provisions have also come down by nearly 18% y-o-y to Rs 2,609.6 crore in the March 2026 quarter, and it helped HDFC Bank’s standalone net profit to rise 9% y-o-y to Rs 19,221 crore in the quarter under review.
SBI and HDFC Bank’s core banking operations are reflected in their respective standalone results.
Return on Assets (RoA) – HDFC Bank races ahead
SBI has highlighted its return on assets (net asset basis – annualised) was 1.07% in Q4FY26, and it was 1.12% for FY26.
Smaller rival, HDFC Bank’s return on assets (average) – not annualized was 0.48% in the March 2026 quarter, and for FY26 it was 1.94%.
HDFC Bank along with smaller rival, Kotak Mahindra Bank, have one of the highest Return on Assets (ROA) in the banking industry, over the past several quarters.
Growth opportunities and investor concerns
SBI plans to raise $2 billion (nearly Rs 18,000 crore) from international markets, and this comes at a time when the central government has been urging industries across sectors including cement, steel, auto and engineering, amongst others, to expand their capacities. The SBI board will meet on May 12 to finalise the details of the above fund raising plan.
Investors on Dalal Street will continue to monitor SBI, HDFC Bank and other leading banks on key operational parameters, going forward – deposit and loan growth, NIM and level of NPAs. The RBI over the past several quarters has taken steps to boost lending in the broader banking system.
Investors are also awaiting a long-term truce in the Middle East war, and the current crisis has led to shortage of various petroleum products in the country.
Various domestic and international bodies have lowered the growth forecast for the Indian economy to 6% to 6.5% for FY27, given the Middle East war.
Also, the impact of the Middle East war on the local economy will be closely tracked by investors, and whether there is a rise in NPAs in the broader banking system.
SBI v/s HDFC Bank – which bank offers reasonable valuations
Now, let’s take a look at the valuations of SBI and compare it to that of HDFC Bank.
SBI v/s HDFC Bank valuations
| Bank | Price to (standalone) book value |
| SBI | 1.7 times |
| HDFC Bank | 2.2 times |
The sluggish profit growth in Q4FY26 resulted in SBI stock dropping 6.8% to Rs 1,017.9 on Friday. The stock had reached a 52-week high of Rs 1,234.8 on 24 February, 2026.
On the preferred valuation matrix, price to (standalone) book value, SBI trades at 1.7 times, according to Screener.in.
Over the past five years, it has traded on the above valuation matrix between 1.3 and 2.3 times.
Meanwhile, HDFC Bank trades on the above valuation matrix of nearly 2.2 times. Over the past 5 years, the HDFC Bank stock has traded at a price to (standalone) book value between 2.1 times and 4.8 times.
SBI trades at valuations lower than its nearest rival, HDFC Bank. SBI is attempting to continue the growth momentum in loans during FY27. However, investors will need to track rising bond yields and its impact on SBI. Readers could add SBI to their watch list of stocks for 2026, and see if its performance matches expectations.
Disclaimer:
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
The writer and his family have no shareholding in any of the stocks mentioned in the article.
Disclaimer: The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.
