Shares of State Bank of India came under heavy selling pressure on May 8, with the stock falling sharply over 7% after the country’s largest lender reported weaker-than-expected net interest income (NII) and margins for the March quarter. As of 2:34 PM, the shares were trading 5.57% lower to Rs 1,031.20.

The sharp decline in SBI shares came as investors reacted negatively to pressure on net interest margins (NIMs), higher slippages, and softer core banking performance despite stable asset quality trends.

SBI Q4 FY26 Key Highlights

• Whole bank NIM for Q4 stood at 2.81%


• Domestic NIM came at 2.93% vs 3.11% QoQ and 3.14% YoY


• FY26 slippage ratio stood at 0.54%


• Q4 slippage ratio came at 0.47%


• Credit cost stood at 0.27% vs 0.29% QoQ


• FY26 credit cost came at 0.37%


• Slippages rose to ₹5,521 crore vs ₹4,458 crore QoQ

Margin Pressure Becomes Key Concern

The biggest concern for investors was the sharp compression in SBI’s margins during the quarter.

Domestic NIM declined to 2.93%, down 18 basis points sequentially from 3.11% and lower than 3.14% reported in the same quarter last year. Whole bank NIM also slipped to 2.81%, indicating pressure on profitability amid changing interest rate dynamics and higher funding costs.

Lower margins directly impacted SBI’s net interest income, which came below analyst expectations and triggered a negative reaction on Dalal Street.

Slippages Increase Sequentially

SBI also reported a rise in quarterly slippages, which increased to ₹5,521 crore compared to ₹4,458 crore in the previous quarter. The increase in fresh slippages added to concerns around asset quality moderation going forward.

However, the bank’s overall credit cost remained largely stable at 0.27% against 0.29% QoQ, indicating controlled stress levels despite higher slippages.

Asset Quality Remains Stable

Despite the rise in slippages, SBI managed to maintain stable asset quality ratios during the quarter. The FY26 slippage ratio stood at 0.54%, while Q4 slippage ratio was reported at 0.47%, reflecting relatively controlled stress in the loan book.

Analysts believe the near-term focus will remain on margin recovery, loan growth, and treasury performance amid evolving interest rate conditions.