SBI Cards net up 67% to Rs 345 cr on lower provisions, higher other income

Asset quality improved as gross NPAs went down by 55 bps sequentially and 410 bps on YoY basis to stand at 3.36%

SBI Cards & Payments Services reported a 67 per cent year-on-year (YoY) increase in net profit in the July–September quarter (Q2FY22) aided by lower provisions and higher other income. Its net profit in the quarter stood at Rs 345 crore as against Rs 206 crore in the year-ago period.

While interest income was down 8 per cent YoY to Rs 1,173 crore, total revenue shot up by 7 per cent to Rs 2,695 crore, primarily due to higher income from fees and services.

Provisions for impairment losses and bad debts were 31 per cent lower YoY at Rs 594 crore. And, the total management overlay provision stood at Rs 231 crore at the end of September quarter. Asset quality improved as gross non-performing assets (NPAs) went down by 55 basis points (bps) sequentially and 410 bps on a YoY basis to stand at 3.36 per cent. Similarly, net NPAs also saw a sharp correction of 179 bps on a YoY basis to 0.91 per cent but sequentially it was higher by 5 bps.

The company added 953,000 new accounts in the reporting quarter, up 39 per cent YoY compared to 688,000 accounts in the year-ago period. At the end of the September quarter (Q2FY22), cards in force of the company stood at 1.26 crore, up 14 per cent YoY. While retail spends went up by 41 per cent to Rs 35,070 crore, corporate spends increased by 80 per cent to Rs 8,491 crore. Also, receivables for the company grew by 12 per cent YoY to Rs 26,741 crore.

As of August 2021, SBI Cards has a market share of 19.4 per cent in cards in force, 19 per cent in spends, and 20 per cent in transactions.

Under RBI’s first Covid restructuring scheme, the company recast loans worth Rs 2,668 crore. And the under the second scheme, it restructured loans worth Rs 359.69 crore. The new RBI restructuring scheme added Rs 105 crore in Q2FY22 as compared to Rs 257 Cr in Q1FY22.

The firm's balance sheet size grew to Rs 29,167 crore, September-end, from Rs 27,013 crore as of March 31, 2021.