“The 3 per cent NIM guidance is based on several assumptions. One that there is not going to be any change in the repo rate": Reports
MUMBAI: The Equated Monthly Instalments (EMIs) on your home, car, and education loans are likely to go up as top lenders such as State Bank of India and Bank of Baroda have signalled a hike in lending rates to protect their profit margins. Other banks are likely to follow suit.
SBI’s domestic NIM (net interest margin) or the difference between the interest earned on loans and interest paid on deposits decreased by 21 basis points YoY and 18 basis points QoQ to 2.93 per cent. Speaking to reporters at the SBI Q4FY26 earnings press conference, its chairman CS Setty said that the Bank is maintaining a Net Interest Margin (NIM) guidance, a key gauge of profitability at 3 per cent.
“The 3 per cent NIM guidance is based on several assumptions. One that there is not going to be any change in the repo rate. Our house view is that the repo rate will continue at the same level throughout FY27. So, that is the first assumption we are making which means that neither deposit rates are likely to go up nor yields are likely to go up.”
“(However) I think yields will probably improve because we are looking at asset mix changes. The corporate side particularly because we had some floating rates which probably would now run off and we will have an ability to pass on some of the additional cost which we have on the deposit side. And on the deposit interest rate side also, I do not think there is any much room in terms of further cutting down (rates) because if the continuous credit growth rate is there at 13-15 per cent, I think none of us in the system would be in a position to cut the deposit rates. So, there will be some repricing of the asset side. This is what we are building into our model and how much and how
far as we grow into the year, we will do that,” added Setty.
A view echoed by Bank of Baroda’s managing director and chief executive officer, Debadatta Chand at the Bank’s Q4FY26 earnings call. “See the market conditions at this level appear sticky with regards to deposit pricing. So, in such a scenario the only thing I am expecting in this quarter is resetting on the advances side subject to market conditions.”
Meanwhile SBI chairman said that the Bank will dilute some of its stake in NSE in its IPO. Reports indicated that SBI and its subsidiary, SBI Caps, held a collective stake valued at approximately
Rs 43,500 crore in NSE. Singapore's state-owned investor Temasek and the Canada Pension Plan Investment Board are among 20 investors looking to sell down stakes when National Stock Exchange goes public this year according to Reuters report last month.
For the year ended March 31, 2026, SBI’s net profit rose 13 per cent to Rs 80032 crore while Q4FY26 profit stood at Rs 19684 crore, up 5.6 per cent. Bank of Baroda’s net profit for Q4FY26 stood at Rs 5,616 crore (+11.2 per cent YoY) and it was Rs 20,021 crore (+2.2 per cent YoY) for FY26.
