SBI Hikes Home Loan Rates by 25 Basis Points, Impacting New Borrowers

1 min read     Updated on 18 Aug 2025, 11:07 PM
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Suketu GalaBy ScanX News Team
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Overview

State Bank of India (SBI) has announced a 25 basis point increase in its home loan interest rates, effective August 1, 2025. The new rates for standard home loans will range from 7.50% to 8.70%, primarily affecting new borrowers with lower credit scores. SBI has also adjusted rates for other loan products, including Home Loan Maxgain, Top Up Loans, and Loan Against Property. This move could impact SBI's competitiveness in the home loan market, especially for customers with lower credit scores. Private banks like HDFC Bank, ICICI Bank, and Axis Bank offer varying starting rates for home loans, ranging from 7.70% to 8.35%.

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*this image is generated using AI for illustrative purposes only.

State Bank of India (SBI), India's largest public sector bank, has announced a significant increase in its home loan interest rates, primarily affecting new borrowers with lower credit scores. The move, set to take effect from August 1, 2025, marks a 25 basis point rise in the upper band of loan rates.

New Rate Structure

The revised interest rates for standard home loans will now range from 7.50% to 8.70%, up from the previous range of 7.50% to 8.45%. This adjustment primarily impacts borrowers with lower credit scores, who may find themselves subject to higher interest rates.

Impact on SBI's Loan Portfolio

Home loans constitute the largest component of SBI's retail loan portfolio, making this rate hike a significant development for both the bank and potential borrowers. The increase could potentially affect the bank's competitiveness in the home loan market, especially for customers with lower credit scores.

Other Loan Products Affected

SBI has also adjusted rates for other loan products:

Loan Type New Interest Rate Range
Home Loan Maxgain 7.75% - 8.95%
Top Up Loans 8.00% - 10.75%
Loan Against Property 9.20% - 10.75%

Comparison with Private Banks

Private banks maintain different pricing structures for home loans:

Bank Starting Interest Rate
HDFC Bank 7.90%
ICICI Bank 7.70%
Axis Bank 8.35%

These private sector competitors offer varying rates based on credit scores, with some providing fixed-rate options and customized pricing for different borrower profiles.

Implications for Borrowers

The rate hike by SBI underscores the importance of maintaining a good credit score for prospective home loan applicants. Borrowers with higher credit scores are likely to secure more favorable interest rates, while those with lower scores may face higher borrowing costs.

As the lending landscape evolves, potential homebuyers are advised to compare offers from various banks and financial institutions to secure the most competitive rates. The diverse pricing structures and customized options available in the market highlight the need for thorough research and consideration before committing to a home loan.

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State Bank of India Reports Strong Q1 Results, Receives Credit Rating Upgrade

1 min read     Updated on 16 Aug 2025, 04:41 PM
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Riya DeyBy ScanX News Team
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Overview

State Bank of India (SBI) announced robust Q1 financial results with a 12.48% YoY increase in net profit to ₹19,160.00 crores. The bank achieved an ROE of 19.70% and ROA of 1.14%. Domestic credit grew by 11.06% YoY, while deposits increased by 11.66% YoY. The Net NPA ratio improved to 0.47%. S&P Global Ratings upgraded SBI's issuer credit rating to 'BBB/Stable/A-2' and its stand-alone credit profile to 'bbb+'. SBI successfully raised ₹25,000.00 crores through India's largest Qualified Institutional Placement. The bank expects credit expansion to outpace nominal GDP and industry growth, focusing on retail loans, government capital expenditure, and green energy projects.

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State Bank of India (SBI), India's largest lender, has reported robust financial results for the first quarter, alongside a significant credit rating upgrade from S&P Global Ratings.

Q1 Financial Highlights

SBI posted a net profit of ₹19,160.00 crores for Q1, marking a 12.48% year-over-year increase. The bank achieved an impressive Return on Equity (ROE) of 19.70% and Return on Assets (ROA) of 1.14%, reinforcing its market leadership position.

Key performance indicators for the quarter include:

  • Domestic credit growth: 11.06% YoY
  • Deposit growth: 11.66% YoY
  • Net NPA ratio: Improved by 10 basis points to 0.47%
  • Slippage ratio: Decreased by 9 basis points to 0.75%

SBI maintained its dominant market share with 22.17% of domestic deposits and 19.24% of system-wide advances. The bank's home loan segment showed particularly strong growth at 15% YoY.

Credit Rating Upgrade

In a significant development, S&P Global Ratings has upgraded SBI's credit ratings:

Rating Type New Rating Previous Rating
Issuer credit rating 'BBB/Stable/A-2' 'BBB-/Positive/A-3'
Stand-alone credit profile (SACP) 'bbb+' 'bbb'
Capital and Earnings assessment 'Adequate (0)' 'Moderate (-1)'

The upgrade reflects SBI's improving capitalization and the bank's ability to maintain a risk-adjusted capital (RAC) ratio of 7.0%-7.5% over the next 24 months.

Strategic Initiatives and Outlook

SBI Chairman C S Setty highlighted the bank's focus on operational excellence through Project SARAL, a transformative initiative aimed at reshaping retail operational processes. The project is expected to enhance customer service, employee satisfaction, and overall productivity.

Looking ahead, SBI anticipates credit expansion to outpace both nominal GDP and industry growth. This growth is expected to be driven by calibrated exposure to consumption-linked retail loans, government capital expenditure pipeline, and green energy projects.

Capital Raising and Future Plans

The bank successfully completed India's largest Qualified Institutional Placement (QIP), raising ₹25,000.00 crores with over 60% participation from foreign investors. This capital infusion is expected to further strengthen SBI's balance sheet and support future growth initiatives.

SBI remains committed to maintaining its net interest margin (NIM) guidance of 3.00% and expects to see improvements in NIM from Q3 onwards, benefiting from deposit repricing and the recent CRR cut.

In conclusion, State Bank of India's strong Q1 performance, coupled with the credit rating upgrade, positions the bank favorably for continued growth and market leadership in the Indian banking sector.

Historical Stock Returns for State Bank of India

1 Day5 Days1 Month6 Months1 Year5 Years
-0.39%-0.10%+0.18%+14.36%+1.24%+316.18%
State Bank of India
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