SBI Cards net profit plunges 52% in Q3

SBI Cards and Payment Services Ltd on Thursday reported nearly 52 per cent dip in its net profit to Rs 210 crore in the third quarter ended December 2020, on higher provisioning.

The pure-play credit card company, promoted by SBI, had posted a net profit of Rs 435 crore during the corresponding period of the previous financial year.

Its total income grew marginally to Rs 2,540 crore during October-December 2020, against Rs 2,563 crore in the year-ago period, the company said in a statement.

SBI Cards said its total management overlay provision stood at Rs 1,113 crore at the end of December 2020, against Rs 758 crore at the end of the preceding quarter ended September.

The impact of COVID-19 has led to a significant volatility in global and Indian financial markets, which may persist after restrictions related to the pandemic outbreak are lifted, it said in a regulatory filing.

"While there have been some improvements in economic activities in the current quarter, the continued slowdown has impacted new credit card originations, use of credit cards by customers and the efficiency in collection efforts," it added.

The company said it is offering a one-time resolution to eligible customers by offering an option to convert credit card dues into equated-monthly instalments of up to 24 months, following an RBI directive in August with regard to the resolution framework.