State Bank of India’s home loan book has crossed the Rs 10 lakh crore milestone amid a market slowdown, pushing its target date back by a month.

The country’s largest lender had expected to cross this historic milestone in the September quarter but the race finally ended on 3 November as markets like Bengaluru signaled a slowdown. 

The slowdown stems not only from supply-side constraints but also from weak consumer demand in certain markets.

“There are several factors which have led to a slowdown in home loans in the market. These include inventory build-up, delayed projects and softer demand in certain markets such as Bengaluru,” said SBI Chairman CS Setty.

The state-run lender’s home loans reached Rs 9.86 lakh crore at the end of the September quarter, falling just short of the landmark figure as decelerations hit certain markets. The loan book rose by 2.7% from the previous quarter and by 11.9% from the year-ago period. 

“It’s a good portfolio for us and we continue to maintain our leadership position,” Setty noted.

The asset quality of SBI’s home loans remains highly resilient, with non-performing assets (NPAs) in this segment being hardly 0.6%.

Setty is keen to develop a mortgage-backed securities market to free up fresh capital for lending. This would open up the bank’s home loan pools, which are currently tied up for long tenures, to other new areas of lending. India has home loans of over Rs 30 lakh crore, remaining largely illiquid on banks’ balance sheets. 

In a rising interest rate environment, SBI’s EBLR-linked mortgage portfolio stands to benefit. Setty expects the Reserve Bank of India (RBI) to hike the key repo rate by 50 basis points in its December monetary policy review. “The rate hike could moderate consumption credit but our loan growth guidance of 14% to 15% for FY27 will remain unaffected,” he told analysts.

Strong loan pipeline to support growth 

Backed by a robust loan pipeline of Rs 7.8 lakh crore, SBI expects to sustain its 16% growth momentum in corporate credit through the second half of the current financial year.

Setty said the corporate loan book, which rose 16.2% year-on-year to stand at Rs 14.39 lakh crore as on 30 September 2026, could have grown more but the bank chose to pass up low-yielding advances and refinancing opportunities to protect its net interest margins (NIMs).

While large corporate groups continue to drive major capital expenditure programs, credit growth in the mid-corporate and SME (small and medium enterprises) segments is primarily being driven by working capital requirements and brownfield expansions. 

Auto, Xpress Credit see slow growth

The auto and Xpress Credit (personal loans) loan segments have seen a multi-quarter growth deceleration even as gold loans rise exponentially.

The bank’s auto loan book grew 5.88% YoY to Rs 1.36 lakh crore at the end of the September quarter. The October month has seen an uptick and the bank has taken some steps, Setty said.

SBI has pivoted from its previous cautious pricing stance and has now revised rates to push up the auto loan book. It views auto loans as a customer-acquisition product that helps build new-to-bank relationships and drives cross-selling opportunities. 

Xpress Credit, once the bank’s fastest-growing unsecured retail segment, has slowed down to below double-digit growth due to an internal shift where borrowers are migrating from unsecured personal loans to secured gold loans. While Xpress Credit interest rates range between 11.45% and 14.60%, gold loans are much lower, hovering around 8.5% to 8.9%. The churn in Xpress Credit is reasonable and Setty is not worried as it is an internal cannibalisation towards gold loans.  

For the quarter ended September, the bank reported a 7.5% YoY growth in Xpress Credit, reaching Rs 3.79 lakh crore. As long as it stays within SBI in the form of gold loans, the management is not unduly concerned about the thinning of Xpress Credit’s loan book. The bank’s personal gold loans rose 89.31% YoY to Rs 1.37 lakh crore as of 30 September 2026.

For the quarter ended September, SBI’s gross advances rose 17.84% YoY to Rs 52.08 lakh crore while deposits grew 12.27% to Rs 62.78 lakh crore. Total business stood at Rs 114.86 lakh crore as of 30 September.

The bank’s full-fiscal guidance targets credit growth of 14% to 15% while deposit growth is expected to pace between 10% and 11%.  

NIM guidance maintained

SBI has maintained its net interest margin (NIM) guidance above 3% for FY27, while indicating potential upside from the full pass-through of a 25-basis-point external benchmark-linked lending rate (EBLR) cut and 15 bps MCLR (marginal cost of funds-based lending rate hike, and any future policy rate increases during the fiscal year.