Moody's Affirms State Bank of India’s Long-Term Deposit Ratings at Baa3; Notes Stable Outlook

<h1>Moody's Affirms State Bank of India’s Long-Term Deposit Ratings at Baa3; Notes Stable Outlook</h1>

Moody's Ratings has affirmed State Bank of India's (SBI) long-term deposit ratings and related assessments, maintaining a stable outlook. The bank received an affirmation at Baa3 for its long-term deposits, along with baa3 in the Baseline Credit Assessment (BCA) and Adjusted BCA.

The rating affirmation reflects SBI’s dominant domestic franchise and its large, diversified lending portfolio that maintains stable asset quality. Furthermore, the ratings incorporate the bank's holdings of liquid government securities, supporting strong funding and liquidity.

SBI's profitability is supported by a stable net interest margin and diversified non-interest income, while credit costs remain low. As of March 2026, SBI reported a net income to tangible assets ratio of 1.1%. The bank’s capital position has notably improved; its tangible common equity to risk-weighted assets ratio rose to 12.7% as of March 2026, up from 11.2% a year earlier, following a capital raise of INR 250 billion in fiscal 2026.

Funding and liquidity remain key strengths for the institution. As India's largest bank, with a deposit market share estimated at around 23%, SBI benefits from a strong retail deposit franchise. The bank’s reported loan-to-deposit ratio stood at 82.4%. Core banking liquidity is also robust, with high-quality liquid assets (HQLA) accounting for approximately 17.9% of tangible banking assets as of March 2026. SBI's liquidity coverage ratio was assessed at 124.3% in the quarter ended March 2026.

Moody's noted a very high probability of government support, given SBI’s status as the largest bank and the government holding a 55.0% stake in the bank as of the end of March 2026.

However, Moody's expects profitability to moderate slightly over the next 12 to 18 months, primarily reflecting lower non-interest income, particularly from treasury operations, alongside modest increases in credit costs. Asset quality is expected to remain broadly stable, though moderation is anticipated in segments such as agriculture and micro, small and medium enterprise (MSME) lending following rapid credit expansion. The corporate sector remains healthy, characterized by strong profitability and low leverage.

Key financial metrics for State Bank of India as of March 2026:


Moody's stated that an upgrade to SBI’s deposit ratings is unlikely as the current ratings are at the same level as India's sovereign rating. Downgrades could occur if India's sovereign rating declines, or if the BCA sees a multi-notch downgrade. The BCA could also be downgraded if the bank's TCE/RWA ratio drops below 10% or its net income/tangible assets ratio falls below 0.5% on a sustained basis.

SBIN Stock Price Movement​

State Bank of India shares today slipped by 2.34%, closing at ₹1015.40 after shedding ₹24.30 in post-market trading. The stock traded within a session range, peaking at ₹1033.70, while the company processed a volume of 11.56 million shares today.