SBI Card misses quarterly profit estimates as write-offs surge 32%

India's SBI Cards and Payment Services reported first-quarter profit below expectations on Friday, weighed by a surge in the credit card service provider's write-offs.

The country's lenders are grappling with rising bad loans, particularly in sectors such as microfinance, credit cards and personal loans. Analysts have attributed this to over-leveraging and an increase in loans outstanding per borrower.

SBI Card, majority owned by the country's largest lender, State Bank of India - reported a 6.5per cent fall in profit after tax to 5.56 billion rupees ($64.3 million) for the three months ended June. The profit was also lower than analysts' average expectations of 5.86 billion rupees, according to data compiled by LSEG.

This also marked the fourth quarter of a profit drop for SBI Card, which has faced elevated delinquencies over the last few quarters.

The company said gross write-offs jumped 32 per cent from a year earlier to 12.80 billion rupees.

Overall spending by cardholders rose 21 per cent to 932.44 billion rupees, while cards-in-force, or the sum of all credit cards issued, rose 10per cent from last year.

The company's revenue from operations rose 12 per cent on-year to 48.77 billion rupees.

Its gross non-performing assets ratio improved slightly to 3.07 per cent from 3.08 per cent in the previous quarter, but was marginally higher than 3.06per cent a year earlier.