The Golden Era Continues: Public Sector Banks Smash Records in FY 2025-26
Dated 12.05.2026 : The earnings season for the financial year 2025-26 has officially wrapped up. With Canara Bank delivering its final disclosures on May 11, the report card for all 12 Public Sector Banks (PSBs) is now complete.
For those who have been tracking the Indian banking sector’s recovery journey over the past few years, the FY26 results are nothing short of spectacular. The transformation from the heavily stressed, loss-making years of the late 2010s into highly profitable growth engines is now fully cemented.
Let’s dive into the full-year performance, compare the numbers, and see exactly how our public lenders achieved these historic milestones.
The Big Picture: A Historic ₹1.98 Lakh Crore Profit
The defining narrative for FY 2025-26 is the sheer scale of aggregate profitability. PSBs recorded an all-time high combined net profit of ₹1.98 lakh crore, marking the fourth consecutive year of solid profitability.
To put this growth into perspective, the sector’s net profit stood at ₹1.05 lakh crore in FY23, jumped to ₹1.78 lakh crore in FY25, and has now surged again. This massive profit pool is supported by a robust expansion in business, with the aggregate business of PSBs crossing ₹283.3 lakh crore (a 12.8% year-on-year growth). Deposits rose by a healthy 10.6%, while gross advances registered an impressive 15.7% growth.
The Great Balance Sheet Clean-Up
Perhaps the most critical metric for long-term stability is asset quality. The historical burden of bad loans has been aggressively neutralized.
- Gross Non-Performing Assets (GNPA): From a peak of over 11% back in 2018, the sector aggregate has dropped to a historic low of 1.93% as of March 31, 2026.
- Net NPA: The Net NPA ratio has dropped to an incredible 0.39%, indicating that banks have made adequate provisions for almost all their bad loans
FY 2025-26: The 12-Bank Report Card
| Rank | Public Sector Bank | FY26 Net Profit (₹ Crore) | Gross NPA (%) | Net NPA (%) | Total Business (₹ Crore) |
| 1 | State Bank of India (SBI) | 80,032 | 1.49% | ~0.40% | > 85,00,000 |
| 2 | Bank of Baroda (BoB) | 20,021 | 1.89% | 0.45% | 30,78,366 |
| 3 | Canara Bank | 19,187 | 1.84% | ~0.45% | > 22,00,000 |
| 4 | Union Bank of India | 18,697 | 2.82% | 0.48% | 23,85,502 |
| 5 | Punjab National Bank (PNB) | ~18,500* | 3.95% | 0.40% | 26,83,260 |
| 6 | Indian Bank | 12,156 | 1.98% | ~0.35% | > 11,80,000 |
| 7 | Bank of India (BoI) | 10,527 | 1.98% | 0.56% | 16,98,662 |
| 8 | Bank of Maharashtra | ~6,784* | 1.60% | 0.15% | 5,95,163 |
| 9 | Indian Overseas Bank (IOB) | 5,208 | 1.42% | 0.28% | > 6,17,000 |
| 10 | Central Bank of India | ~4,800* | 2.70% | 0.45% | > 7,00,000 |
| 11 | UCO Bank | ~3,500* | ~2.50% | ~0.50% | > 4,50,000 |
| 12 | Punjab & Sind Bank | ~1,250* | 3.38% | 0.96% | 2,29,379 |
*(Data derived from Q4/FY26 exchange filings. Values marked with an asterisk indicate annualized projections based on 9M/FY25 data for banks whose final audited full-year FY26 detailed breakdowns were pending consolidation at the time of writing. Total Business denotes Gross Advances + Deposits).
Comparative Performance: The Standout Banks
While the sector as a whole flourished, individual banks delivered fascinating results. Here is how some of the key players stacked up:
1. State Bank of India (SBI) – The Unshakeable Anchor SBI continues to carry the weight of the sector, accounting for over 40% of the total PSB earnings.
- FY26 Net Profit: ₹80,032 crore (up 12.88% YoY)
- Asset Quality: Gross NPA pushed down to just 1.49%.
- Key Highlight: SBI’s whole bank advances crossed the massive ₹49 trillion mark, proving it can maintain double-digit growth on a colossal base.
2. Canara Bank & Bank of Baroda – The Steady Giants The final pieces of the puzzle, these banks delivered strong, reliable growth.
- Canara Bank: Reported a net profit of ₹19,187 crore (up 12.7% YoY) and improved its Gross NPA to 1.84%. It also announced a handsome dividend of ₹4.20 per share (210%).
- Bank of Baroda: Crossed a major milestone, with its FY26 net profit reaching ₹20,021 crore (up 11.2% for Q4).
3. Indian Overseas Bank (IOB) – The Turnaround Star Mid-sized banks posted some of the most aggressive percentage gains, with IOB leading the charge as a prime turnaround case study.
- FY26 Net Profit: ₹5,208 crore (a massive 56.16% YoY increase).
- Asset Quality: Fiercely reduced its GNPA to 1.42%.
- Key Highlight: IOB maintained zero slippages in its corporate loan book for the entire financial year, highlighting a highly disciplined credit strategy.
What This Means for the Future
The FY 2025-26 results prove that the “4R Strategy” (Recognizing NPAs, Resolution, Recapitalization, and Reforms) has permanently altered the DNA of public sector banking in India. With Gross NPAs at multi-year lows and capital adequacy ratios remaining exceptionally strong, these banks are heavily fortified against future macroeconomic shocks.
For investors, the strong dividend payouts—like Canara Bank’s 210% and Bank of Baroda’s recommended ₹8.50 per share—make PSBs attractive value propositions. For depositors and the broader economy, heavily capitalized and profitable banks mean continued, uninterrupted credit flow to crucial sectors like MSME, agriculture, and retail
This article was drafted with the assistance of AI and curated for accuracy and relevance
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