Mumbai, Nov 4 : India's largest lender, State Bank of India (SBI), on Tuesday, reported a 6.4 per cent year-on-year (YoY) increase in its consolidated net profit to Rs 21,504.49 crore for the second quarter (Q2) of FY26.

The bank had reported a profit of Rs 20,219.62 crore in the same period last financial year (Q2 FY25), according to its stock exchange filing.

On a standalone basis, SBI's net profit rose 10 per cent YoY to Rs 20,159.67 crore, compared to Rs 18,331.44 crore in Q2 FY25, driven by steady loan growth and improved asset quality.

The bank's net interest income (NII) -- the difference between interest earned and interest paid -- grew 3.28 per cent YoY to Rs 42,984 crore from Rs 41,620 crore in the same quarter last year.

However, its domestic net interest margin (NIM) declined to 3.09 per cent, down 18 basis points from 3.27 per cent a year ago, as per its regulatory filing.

SBI's operating profit for the quarter stood at Rs 31,904 crore, up 8.91 per cent YoY from Rs 29,294 crore in Q2 FY25.

The bank continued to see healthy loan growth, with total advances rising 12.73 per cent YoY, while domestic advances increased 12.32 per cent.

Within this, retail advances grew 15.09 per cent, supported by strong growth in SME loans (up 18.78 per cent), agriculture loans (up 14.23 per cent), and personal loans (up 14.09 per cent).

Total deposits increased 9.27 per cent YoY, and CASA deposits (current account and savings account) grew 8.06 per cent. The CASA ratio stood at 39.63 per cent as of September.

On the asset quality front, SBI showed further improvement. The gross non-performing assets (NPA) ratio declined 40 basis points YoY to 1.73 per cent, while the net NPA ratio improved to 0.42 per cent, down 11 basis points from the year-ago period.

The bank's provision coverage ratio (PCR) also improved by 13 basis points to 75.79 per cent.

/IANS