SBI Cards and Payments Services posted a 106% year-on-year (y-o-y) increase in its profit for the quarter ended June 30 to Rs 627 crore, led by interest income and fees, and commission income. Interest income improved 20% y-o-y to Rs 1,387 crore while income from fees and services increased 40% y-o-y to Rs1,538 crore in Q1FY23.
The company’s total revenue from operations grew 31% y-o-y to Rs 2,362 crore in Q1FY23.
Net interest margin (NIM) contracted by 158 basis points (bps) to 13.2% as on June 30 on account of fall in interest income yield, which fell 145 bps to 17.1%. Interest income yield is based on interest income from card holders, excluding interest income on investments, and deposits.
The company’s cost of funds declined marginally to 5.1% in Q1FY23 as against 5.2% a year ago, but increased from 4.9% on a sequential basis.
The company’s new accounts volume stood at 9,00,000 accounts for Q1FY23, up 48% y-o-y while the number of cards issued and outstanding grew 19% y-o-y to 14.3 million as of June 30. Total card spends grew 79% to Rs 59,671 crore, with spend average per card rising 53% y-o-y to Rs 170,000. Receivables grew 36% to Rs 33,215 crore as of Q1FY23.
Gross non-performing asset (NPA) ratio stood at 2.24% as of June 30 as against 3.91% in the previous year while net NPA ratio was 0.79% as of June 30 against 0.88% last year. As of June 30, the company’s capital adequacy ratio declined to 24.7% compared to 26.1% last year, with tier-I capital at 21.5% and tier-II capital at 3.2%.