New Delhi, Nov. 8 -- State Bank of India (SBI) has narrowed the gap with rival HDFC Bank in a key profitability metric over time, even as the latter limps back from the impact of a mega-merger three years ago.

The difference between the net interest margins (NIMs) of India's largest lender and its largest private lender has shrunk consistently over the years, data analysed by Mint showed. Between fiscal year 2021 (FY21) and the second quarter (Q2) of FY27, the gap shrank from 106 basis points (bps) to 26 bps.

Barring a couple of years, the gap narrowed between FY21 and FY26, a trend which continued into the first two quarters of the current financial year. While HDFC Bank's NIM was 3.16% in Q2 of FY27, SBI reported a margin of 2.9% in t...