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PSBs Log Record Profits in Q1 FY26; SBI and Smaller Lenders Drive Growth
Public Sector Banks (PSBs) have posted a record combined net profit in Q1 FY26, The results mark the significance of PSBs, where SBI continues to lead and PNB a slight decline. This report sum-ups the data.
Author: Kanal English Desk
Published: August 21, 2025
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The Public Sector Banks (PSBs) have posted a record combined net profit of ₹44,218 crore for the first quarter of Financial Year 2026, marking an 11% increase year-on-year. The results, reviewed by the finance ministry in a meeting with bank chiefs on August 20, 2025 in New Delhi, underscore the sector’s financial resilience and growth momentum.
SBI Leads the Sector
State Bank of India (SBI) emerged as the largest contributor, accounting for 43% of total PSB profits. The bank reported a net profit of ₹19,160 crore, registering a 12% growth compared to Q1 FY25. With its scale and profitability, SBI continues to anchor the PSB ecosystem.
Strong Gains Among Smaller Lenders
Several mid-sized banks reported robust profit growth:
- Indian Overseas Bank (IOB): Net profit surged 76% to ₹1,111 crore.
- Punjab & Sind Bank: Recorded a 48% jump to ₹269 crore.
- Central Bank of India: Posted 32.8% growth in net profit.
- Indian Bank: Profit rose 23.7%.
Bank of Maharashtra: Maintained momentum with a 23.2% increase to ₹1,593 crore.
Mixed Performance – PNB Lags
While most PSBs recorded strong gains, Punjab National Bank (PNB) reported a decline. Its net profit fell 48% to ₹1,675 crore, compared to ₹3,252 crore in Q1 FY25.
Sector-Wide Momentum
The combined profit of PSBs stood at ₹39,974 crore in Q1 FY25. This year’s performance reflects:
- improved balance sheets,
- reduced provisioning pressures and
- sustained credit demand.
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Policy Guidance
The finance ministry urged PSBs to leverage their profitability to expand lending in productive sectors, including MSMEs, infrastructure, and agriculture. This, the ministry emphasised, will ensure that financial gains are translated into broader economic impact and support India’s investment-led growth agenda.
Conclusion
The Q1 FY26 results affirm that PSBs have strengthened their profitability after years of stress. While SBI remains the sector’s cornerstone, the impressive performance of smaller banks signals a broad-based revival across public sector lenders.
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