By Siddhi Nayak
MUMBAI (Reuters) -State Bank of India, the country’s biggest lender by assets, aims for loan growth of 12%-13% in 2025-26, almost flat from the previous year to take account of the impact of global tariffs, its Chairman said on Saturday.
U.S. President Donald Trump’s tariffs have sent shockwaves through financial markets, shaken investor confidence and complicated the task of forward-planning.
“The uncertainty on tariffs is going to impact the overall economic scenario and investment scenario,” C.S. Setty said at a conference in Mumbai.
SBI’s loan growth was around 12.03% for 2024-25 and deposits grew by 9.48%.
SBI’s corporate loan book pipeline was 3.4 trillion rupees ($40.24 billion) as of the end of March, Setty said, adding deposit growth of 9-10% was expected for this year.
Earlier in the day, SBI reported a nearly 10% drop in net profit for the January-March quarter, pressured by a narrower net interest margin, although it beat analysts’ estimates.
Net profit was 186.43 billion rupees for the bank’s fourth quarter, compared with a record profit of 206.98 billion rupees a year earlier, but higher than 177.39 billion rupees, according to data compiled by LSEG.
The bank’s net interest income, or the difference between interest earned on loans and paid on deposits, increased 2.7% to 427.75 billion rupees.
But its domestic net interest margin, the difference between the interest rate earned and the rate paid out, fell to 3.15%, below the 3.47% result a year earlier.
When interest rates fall, lenders usually cut lending rates faster than deposit rates, which can squeeze their profit margins until deposit rates adjust.
Setty said the pressure on net interest margins will continue assuming another 50-bps rate cut by the Reserve Bank of India in this year.
Separately, the bank’s board approved raising 250 billion rupees through equity capital in this year, which Setty said was largely to augment SBI’s capital ratios. The timing of the fund raise will be “market determined,” he added.
($1 = 84.4990 Indian rupees)
(Reporting by Siddhi Nayak; Editing by Edmund Klamann and Barbara Lewis)
