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SBI's Loan Surge: FCNR Deposits Fuel Growth
4 Nov
Summary
- SBI achieved 18.2% credit growth, boosted by FCNR deposits.
- HDFC Bank also saw strong loan growth, aided by FCNR deposits.
- Both banks maintained strong asset quality despite global issues.
State Bank of India (SBI) announced an impressive 18.2% year-on-year credit growth, reaching Rs 51.54 lakh crore in the September 2026 quarter. This surge was partly fueled by extending $8.8 billion in loans against its FCNR(B) deposits. SBI's SME and agri loans grew by 22% and 22.6% respectively, while retail loans saw a 14.5% increase.
HDFC Bank also reported healthy growth, with its loan book expanding by 16.4% to Rs 31.95 lakh crore. The bank raised $11.5 billion from overseas FCNR(B) deposits and lent $5.7 billion against them, supporting its own robust loan expansion, particularly in high-margin SME segments.
Both banks maintained strong asset quality, with SBI reporting its lowest Net Non-Performing Asset (NPA) ratio in over two decades at 0.36%. Despite global uncertainties and a deficient monsoon, neither bank saw a significant impact on NPA levels. SBI's standalone net profit rose 14.3% to Rs 23,038 crore, aided by an exceptional item from a stake sale.
However, SBI's guidance for FY27 credit growth of 14%-15% disappointed investors, leading to a stock decline. HDFC Bank's net profit grew 4.7% to Rs 19,510 crore. SBI currently trades at a price-to-book value of 1.6 times, lower than HDFC Bank's 1.9 times.
