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Profit Growth: SBI Cards and Payment Services witnessed an 11% year-on-year (y-o-y) increase in net profit, amounting to Rs 662 crore in the January-March quarter. This exceeded the Bloomberg consensus estimate by approximately 15%.
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Receivables and Spends: The company experienced a significant surge in receivables, rising by 25% y-o-y to Rs 50,846 crore in the March quarter. Credit card spends also saw a notable increase, rising by 11% y-o-y to Rs 79,653 crore. Notably, retail spends grew by 25% y-o-y to Rs 69,189 crore, while corporate spends declined by 35% to Rs 10,464 crore.
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Interest Earnings and Revenue: Interest earnings from receivables, including transactors and revolvers, remained consistent y-o-y at 61%. Total revenue witnessed a 14% y-o-y increase, reaching Rs 4,475 crore in the quarter under review.
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Card Metrics: The number of outstanding cards increased by 13% y-o-y to 18.9 million as of March 31. However, new accounts decreased by 25% y-o-y to one million during the same period. The net interest margin of the company experienced a decline of 60 basis points (bps) y-o-y to 10.9% in January-March.
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Asset Quality and Credit Costs: Asset quality concerns persisted, with both gross and net non-performing asset (NPA) ratios rising compared to the previous year. Gross credit costs surged by 124 bps y-o-y to 7.6% as of March 31. Impairment losses and bad debt expenses increased by 50% y-o-y to Rs 944 crore in the quarter under review.
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Market Share: SBI Card’s market share in terms of cards-in-force and spends experienced a decline compared to the previous year, standing at 18.6% and 17.8%, respectively, as of March 31.
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Capital Adequacy: The company’s capital to risk (weighted) assets ratio stood at 20.5% as of March 31.
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Listed Credit Card Issuer: SBI Card is the only listed credit card issuer in India, distinguishing it within the market.
Overall, while SBI Cards and Payment Services demonstrated profit growth and notable increases in receivables and spends, challenges in asset quality and market share decline warrant continued attention from stakeholders.
