Hear SBI Chairman Shri Challa Sreenivasulu Setty, reflect on the Bank's robust Q1 FY27 results during an insightful interaction ...
What Challa Setty said
Written from the verified transcript and checked against it. Every figure links to the moment it was said.
Challa Setty, Chairman of State Bank of India, discussed the bank's Q1 FY27 performance, emphasizing that the results reflect a conscious effort toward sustainability and consistency rather than outliers. He highlighted a seven basis point reduction in cost of resources, aided by proactive cuts in bulk deposits, which protected margins in difficult market conditions. Setty addressed the credit-deposit growth gap by citing excess SLR of 4 lakh crore and a 10-11% deposit growth rate, asserting funding capacity is sufficient. He confirmed the full-year NIM guidance of 3% stands, with the FCNR raise already factored in, and raised credit growth guidance to 14-15%, backed by a corporate pipeline exceeding three lakh crore and demand across sectors. Setty dismissed concerns on slippages and SMA increases as seasonal, maintaining a credit cost guidance of 50 basis points. He stated no further capital raise is needed, given divestments from NSE IPO and mutual funds.
Key takeaways
Full-year NIM guidance stands at 3%, with FCNR raise already baked in
Credit growth guidance raised to 14-15%, linked to nominal GDP growth
2:00Are you comfortable at those levels or would you look to bring that down?
3:24I mean this 10 billion dollar FCNR raise target that you have, will that then continue to lower your reliance on bulk deposits and could the number look even better if the FCNR flows are better?
4:27But this large FCNR raise that you're factoring in, could that impact your margins from here or is that already baked into your guidance?
5:00Will a lot of this come from the corporate book which is seeing some strong growth or where exactly are you seeing more credit demand?
6:21And therefore what your guidance for the full year could be on asset quality?
8:03You don't see any slippages from there into your NPA?
8:15But apart from that, any kind of capital raise planned for the year?
[music] State Bank of India has reported a strong set of numbers in the first quarter beating the estimates on all fronts. Net profit rose by 10% while net interest income has grown by over 15%. The bank's credit growth has also climbed to a 15 quarter high. Ritu Singh spoke to SBI Chairman Challa Setty and began by asking whether the stellar performance by the bank can be sustained throughout the year.
The sustainability and consistency of performance is something what we always look for and the numbers what you see now are a conscious effort in that direction. And whatever numbers you mentioned in terms of outliers, I think they're not outliers at all. The overheads uptick sequentially will always be there and on the Q, year on year, I think the overheads are contained. And what are the standing out numbers are in terms of our proactive adjustment in our cost of resources. I think we focused on containing the costs. It's almost seven basis point reduction that really helped us in terms of ensuring that in a very difficult market conditions margins are protected. And we also have a fair idea in terms of what is going to be our FCNRB trajectory in the Q2. So we have proactively reduced our bulk deposit which also contributed to the cost of resources coming down. So with the availability of liquidity and the capital what we have, we are very confident that these numbers will be maintained.
All right. So let's talk about the advances. They've grown very healthily but almost double the pace of deposits. Is that something that concerns you? The CD ratio inching up to about 74%. Are you comfortable at those levels or would you look to bring that down?
Ritu, I think we also mentioned that our ability to fund this credit growth apart from the deposits also comes from the excess liquidity we have in the form of excess SLR. As we speak, we have almost 4 lakh crore excess SLR which gives an ability to look at beyond the high cost deposits. We believe that any bulk deposits, the system wholesale deposits what banks resort to, is a treasury activity which means that the treasury has an option either to access the bulk or go to the market and borrow because we have adequate securities to offer. So combining the liquidity which is available, excess liquidity which is available in the system within our system as well as around 10-11% growth rate in deposits what we are seeing with FCNRB flow, is what we have, I'm sure I think comfortably we can provide the funding capacity.
Let me pick up on that 10 to 11% deposit growth, sir. I mean this 10 billion dollar FCNR raise target that you have, will that then continue to lower your reliance on bulk deposits and could the number look even better if the FCNR flows are better?
FCNR, I think there's only so much you can reduce on the bulk because some of the bulk deposits are also relationship deposits, right? So long-term relationship also we give a better rate for them in the form of bulk deposits. But broadly speaking, yes, I agree with you that a dominant portion of this FCNR deposit, not only for us but for the major banks which are raising FCNR, would be reducing the competition for the bulk deposits. So obviously that would be, overall cost will be reduced. But if the credit growth continues to be robust, some of the banks probably would still have to access the bank deposit market.
A related question then, sir. Because your margin guidance for the year, one, you've surprised us in the quarter with an improvement expansion in margins, now you're targeting a 3% NIM for the full year. But this large FCNR raise that you're factoring in, could that impact your margins from here or is that already baked into your guidance?
Setty, C. (2026, August 7). Hear SBI Chairman Shri Challa Sreenivasulu Setty, reflect on the Bank’s robust Q1 FY27. [Interview transcript]. State Bank of India. CEOInterviews.AI. https://ceointerviews.ai/interview/1164955/
MLA
Challa Setty. "Hear SBI Chairman Shri Challa Sreenivasulu Setty, reflect on the Bank’s robust Q1 FY27.." State Bank of India, 7 Aug. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/1164955/.
BibTeX
@misc{setty2026_1164955,
author = {Challa Setty},
title = {Hear SBI Chairman Shri Challa Sreenivasulu Setty, reflect on the Bank’s robust Q1 FY27.},
howpublished = {Interview transcript, State Bank of India. CEOInterviews.AI},
year = {2026},
month = {aug},
url = {https://ceointerviews.ai/interview/1164955/},
note = {Speaker-attributed transcript with timestamps}
}
