Net profit rose to ₹19,160 crore, from ₹17,035 crore in the same quarter a year ago.
It exceeded the ₹16,964 crore projected in a Bloomberg poll of analysts.
A sharp rise in gains from the sale of government securities through the quarter, which saw policy rate cuts of 75 basis points (bps), and higher foreign exchange trading income buttressed the lender’s bottom-line.
Net interest margin (NIM), or the difference between the yield on advances and that paid on deposits, fell to 3.02%, from 3.35% a year ago, reflecting falling returns on domestic advances even as the cost of deposits remained elevated.
“We expect a U-shaped recovery in margins,” Chairman CS Setty said. “It may be soft in the first two quarters of the fiscal but thereafter recover to end near the levels we saw at the end of the last fiscal.”
The NIM at the end of FY25 was 3.22% at the country’s biggest mass lender, which owns nearly a fifth of all outstanding bank credit in India.
Setty expects deposits to reprice and banking sector liquidity to get a further boost from the already announced 100 bps cash reserve ratio (CRR) cut, lifting NIMs. The CRR reduction, beginning September, is expected to both boost liquidity and aid in the faster transmission of the frontloaded rate action.
Gains from the sale and revaluation of treasury investments increased one and a half times to ₹6,326 crore, from ₹2,589 crore a year ago. Marked-to-market gains from foreign exchange trading income increased four and a half times to ₹1,632 crore. These gains helped non-interest income surge 55% on-year to ₹17,346 crore.

‘STEADY GROWTH IN LOANS, DEPOSITS’
India’s largest lender by assets expects a 12% loan growth and a 10% deposit growth this fiscal. Overall, the bank’s advances climbed 12%, slightly quicker than the 10% growth in advances currently recorded by the banking system.
Loans to SMEs increased 19%, agriculture advances grew 13% while retail loans grew 13% YoY led by a 15% growth in home loans.
Corporate advances growth was comparatively slower at 6%. Setty, however, said he was still confident of a double-digit growth in corporate advances on the back of demand from sectors such as renewable energy, roads, refineries and data centres.
“We have a strong pipeline of more than ₹7 lakh crore, including ₹3.89 lakh crore of pending sanctions and ₹3.41 lakh crore of loans sanctioned pending disbursements,” Setty said.
“Yes, disbursements are taking time but with interest rates becoming more competitive due to the repricing of marginal cost-based lending rate ,it will help demand for companies.”