State Bank of India reported record profits of approximately USD 9.2 billion in the fiscal year ending March 2025, making it only the third Indian company, after Reliance Industries and ONGC, to appear in the Global Top 100 companies ranked by net profit.

Key Highlights:

SBI reported a historic $9.2 billion net profit for FY25, its highest-ever annual earnings.

SBI became the third Indian company, after Reliance Industries and ONGC, to enter the Global Top 100 companies by net profit.

However, in a Medium post, Rajendra Srivastava, India's Philip Kotler, stated that the majority of SBI's profits are driven by a relatively small digital cohort.

The impressive increase in profitability of India's largest lender is due to a bold digital pivot that began several years ago. "The story of SBI's profitability is, in many ways, the story of YONO," he wrote in his memoir.

The You Only Need One (YONO) app was released in November 2017. What started as a response to growing fintech disruption has evolved into a key component of SBI's growth strategy. YONO now has over 74 million registered users, a digital user base to rival any private player or fintech startup in the country.

Since its inception, the platform has enabled over Rs 3.2 lakh crore in loan disbursements, making a significant contribution to the bank's retail loan book. The platform receives more than 10 million daily logins, and YONO now processes 65% of SBI's savings account transactions.

YONO is more than just a banking app; it's a complete ecosystem and digital marketplace. Users can open accounts, invest in mutual funds, purchase insurance, shop online, plan trips, apply for loans, and even use government services. This all-in-one strategy generates tangible returns by increasing customer lock-in, protecting cash flows, and enhancing long-term viability.

"With more than 500 million accounts, SBI is the world's largest bank in terms of customer base. However, only approximately 74 million (or 14%) of these accounts are YONO users. This creates a paradox: the majority of SBI's profits come from a relatively small digital cohort, while the remaining 370 million accounts represent a low-margin, high-cost liabilities service segment," he wrote.

Dormant and low-balance accounts, many of which were opened for financial inclusion purposes, continue to drive up operating costs.He stated that financial inclusion is important, but questioned whether a sprawling network of 20,000 branches and 220,000 employees is the most efficient way to deliver financial inclusion in 2025.

India's Digital Public Infrastructure (DPI), which includes Aadhaar, UPI, internet connectivity, and smartphone access, has transformed access to financial services. The very rationale for SBI's physical branches needs to be reconsidered, especially since even rural citizens can now transact seamlessly via mobile phones.

Globally, the BFSI sector is undergoing transformation, fueled by digital-first banking strategies.Operating efficiency, capital-light growth, and personalized digital experiences are no longer optional—they are required.

"Digital banks consistently outperform traditional banks in metrics such as cost-to-income ratio, customer acquisition cost, and return on assets. In India, this trend is evident in the meteoric rise of fintech companies such as Paytm, PhonePe, and Zerodha.But, unlike them, SBI has scale, trust, and regulatory comfort that it can use not only for a competitive advantage, but also to achieve its larger goal of financial inclusion," he said.

SBI, he said, has already demonstrated that it can deliver profits comparable to the best in the world."Now it must prove that it can earn the valuation premium that comes with being future-ready."

SBI could potentially double its market capitalization without increasing its branch network or employee headcount if it doubled YONO user penetration to serve most rural and urban accounts via a mobile app, he said.

"In the future, SBI can serve as a beacon for all public-sector companies, demonstrating that profitability, efficiency, and inclusion are not mutually exclusive." Higher levels of equity capital increase the resources available to compete globally. India requires more financial resources to fuel its growth ambitions. "Doing well will also allow SBI to do good for the country," he said.