SBI Cards and Payment Services’ net profit rose 10% year-on-year to Rs 445 crore for the September quarter. However, it came in below the Bloomberg consensus estimate of Rs 572 crore. On a sequential basis, the net profit fell by 20%.
The growth in retail and corporate spending aided the increase in bottomline for the quarter. Retail spending increased by 17% y-o-y to Rs 89,611 crore, while corporate spending surged 218% to Rs 17,452 crore.
Overall spending increased by 31% y-o-y and 15% sequentially to Rs 1.07 lakh crore, while receivables increased by 8% y-o-y to Rs 59,845 crore. Revenue from operations rose by 12% y-o-y to Rs 4,961 crore for the quarter.
Within receivables, the share of interest earning receivable book, which include revolver and EMI, reduced to 56% as on September 30 from 60% a quarter ago. The share of transactors inched up to 44% from 40% a quarter ago.
The management said it has been working with customers to increase the EMI portfolio, but on the revolver book, the company has a downward bias.
“In the past eight quarters or so, we have been focussing on very selective customer acquisitions which has put the revolver on a lower bias as the credit cost starts to come down, we will be able to accelerate some of those things,” it said.
Online spends saw strong growth in non-discretionary and discretionary categories such as departmental stores, healthcare, education, consumer durables, apparel, and jewellery, among others. Online spends formed 62.5% of total retail spends in the first half of the current financial year. In FY25, it stood at 58.9%.
In terms of business, the company added 936,000 new accounts during the quarter. The cost of funds stood at 6.4% and are expected to remain stable until the policy rate action, the management said. With portfolio yield at 16.5% and lower cost of funds, the net interest margin for the quarter was at 11.2%.
The company continued to be the second-largest credit card issued with the cards-in-force market share at 19%.
Asset quality also improved in the quarter. Gross non-performing asset ratio fell 13 basis points on quarter to 2.85% and the net NPA ratio stood at 1.29%, down 13 bps.
Further as on September 30, the company holds provision for total expected credit loss (ECL) of Rs 1,989.09 crore against Rs 1,905.68 crores on March 31 on loan balances, the company said.
“During the quarter and half-year ended September 30, based on the historical portfolio trends pertaining to customer spending pattern during festive period, the management has made an additional provision on standard portfolio amounting to Rs 28.05 crore over and above provision computed as per ECL model,” the company said.
Shares of the company closed 0.9% up at Rs 936.45 on the NSE on Friday.