SBI Cards net profit down 52% to Rs 210 crore in Q3, total income dips

SBI Cards and Payments Services, the credit card arm of the lender, reported a 52 per cent decline in net profit at Rs 210 in Q3FY21, compared to Rs 434.7 crore in the corresponding period of FY20 due to lower interest income and higher provisions.

The company’s interest income declined 9 per cent year on year (YoY) to Rs 1,168 crore in Q3FY21, compared to Rs 1,282 crore in Q3FY20. Revenue from operations was also in the red, declining 3 per cent yoy in the reporting quarter to Rs 2,403 crore. However, total income of the company was down marginally by 1 per cent to Rs 2,540 crore due to robust increase in other income.

Impairment losses and bad debts jumped 72 per cent YoY in Q3FY21 to Rs 648 crore. Sequentially, impairment losses and bad debts of the company was Rs 862 crore. Furthermore, total management overlay provision the company is holding is to the tune of Rs 1,113 crore as of December quarter versus Rs 758 crore in the September quarter.

 

The reported gross non-performing assets (NPAs) of the company stand at 1.61 per cent in Q3FY21, compared to 2.47 per cent in Q3FY20 and net NPAs stood at 0.56 per cent versus 0.83 per cent. However, the proforma NPAs of the lender would have been as high as 4.51 per cent, if not for the Supreme Court’s interim order on standstill in asset classification of lenders. But, if compared to the September quarter, proforma gross NPAs has come down. In September quarter, proforma gross NPA was 7.46 per cent of advances.

On the positive side, new account sourcing has surpassed Q4FY20 levels. In Q3FY21, the company sourced 918,000 new accounts, compared to 688,000 in Q2FY21, and 851,000 in Q4FY20. Similarly retail spends has crossed pre-covid levels and so has corporate spends.

Spends witnessed an almost 8 per cent rise to Rs 37,797 crore in Q3FY21, compared to Rs 35,135 core in Q3FY20. However, average spend per card declined YoY in Q3FY21. Receivables for the company has gone up 4 per cent YoY in Q3FY21 but receivable per card has declined, although it has improved from the preceding quarter. Card in force for the company grew 15 per cent in Q3FY21 to 1.15 crore, compared to one crore cards in Q3FY20.

It has a healthy capital adequacy ratio of 23.7 per cent at the end of December quarter, with tier I capital at 19.8 per cent.