State Bank of India Raises ₹7,500 Crore via Tier 2 Bonds; Reports Strong Q1 FY26 Profit

State Bank of India (SBI), the country’s biggest lender, announced on October 20 that it has raised ₹7,500 crore through the issuance of Basel III-compliant Tier 2 bonds. The move strengthens the bank’s capital base as it navigates growth opportunities and regulatory requirements. Alongside this, SBI reported robust financial performance for Q1 FY26, with net profit exceeding market estimates despite flat core income.

Details of Tier 2 Bond Issue

The issue size totals ₹7,500 crore for non-convertible, taxable, redeemable, subordinated, unsecured, fully paid-up Basel III-compliant Tier 2 bonds. Each bond carries a face value of ₹1 crore, with a coupon rate of 6.93%. The issue opened and closed on October 17, 2025, with allotment on October 20, 2025.

Redemption is scheduled for October 20, 2035, including a call option after five years and on each anniversary thereafter. Listing is proposed on BSE and NSE, with annual interest payments on October 20 until redemption.

State Bank of India Q1 FY26 Financial Performance

State Bank of India reported a net profit of ₹19,160 crore for Q1 FY26, marking a 15% year-on-year increase. This figure surpassed CNBC-TV18’s estimate of ₹16,664 crore. Profitability received support from higher other income, which climbed to ₹17,345 crore from ₹11,162 crore a year earlier.

Asset Quality and Advances in Q1 FY26

Asset quality for State Bank of India remained stable in Q1 FY26. Gross NPA stood at 1.83%, versus 1.82% in the previous quarter. Net NPA stayed unchanged at 0.47%. Fresh slippages totalled ₹7,945 crore, up from ₹4,222 crore in the prior quarter. Recoveries and upgrades reached ₹3,253 crore, exceeding ₹1,739 crore from the last quarter.

Wholesale bank advances expanded 11.6% year-on-year, while domestic advances grew 11%. Wholesale deposits rose 11.7%, and CASA deposits increased 8% compared to last year.

State Bank of India Share Price Performance

Shares of State Bank of India closed at ₹907.00 on the BSE, gaining ₹17.85 or 2.01% on the announcement day. The uptick reflects positive market reception to the bond raise and Q1 FY26 results.

Conclusion

State Bank of India’s ₹7,500 crore Tier 2 bond issuance bolsters its capital framework amid Q1 FY26’s strong profit growth of 15%. Higher other income offset flat NII, while stable asset quality supports ongoing advances expansion. Deposits and lending trends indicate solid liquidity positioning for future quarters.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.