SBI CARDS SEES 22% YOY DROP IN NET PROFIT

But sequentially, profit jumps 74%

Pure-play card issuer SBI Cards and Payment Services reported a 22.5 per cent year-on-year (YOY) drop in net profit in the June quarter as provisions rose and interest income fell.

Net profit was ~305 crore compared to ~393 crore in the year-ago period. However, sequentially, it was up 73.6 per cent.

While interest income was down 18.4 per cent YOY to ~1,153 crore, total income rose 11.6 per cent to ~2,451 crore. Also, revenue from operations was up 9.7 per cent to ~2,362 crore over the year-ago period.

Impairment losses and bad debts rose 33 per cent YOY to ~645 crore. However, sequentially, it was down 8.4 per cent.

Asset quality improved over the previous quarter, with gross non-performing assets (NPAS) at 3.91 per cent compared to 4.99 per cent in the March quarter. Similarly, net NPAS also came down to 0.88 per cent against 1.15 per cent in the March quarter.

The company, as of June 30, is holding a total expected credit loss on loan balances of ~1,396.8 crore, which includes a management overlay of ~257.8 crore.

SBI Cards has the second-highest market share, both in terms of credit cards in force, with 11.2 million cards, and spend. HDFC Bank has the highest market share, despite the RBI ban on issuing new credit cards.

In Q1, it acquired 609,000 new accounts, up 26 per cent sequentially and 111 per cent YOY. While corporate spends in the quarter improved to ~6,162 crore, from ~6,080 crore in the March quarter, retail spends were down to ~27,098 crore from 28,863 crore in March. However, on a YOY basis, spends were up 74 per cent.

Under the Reserve Bank of India’s (RBI’S) August 6 circular for one-time

Covid-related restructuring, the company has implemented resolutions for 290,884 accounts amounting to ~2,668.03 crore.

The company said there will be no significant impact on it from the RBI’S action on banning Mastercard from onboarding new customers.