SBI Cards April-June Profit Falls Despite Income Growth On Higher Costs

SBI Cards and Payment Services Ltd. reported a 6.5% on-year fall in its net profit to ₹5.56 billion for April–June, marking its fourth straight quarterly decline. Profit rose 4.1% sequentially on the back of a slight expansion in the net interest margin to 11.2%.

Total income grew 12.3% on year and 4.2% on quarter to ₹50.35 billion, supported by a rise in both fees and commission income, and interest income. Fees and commission income jumped 13.7% on year to ₹21.91 billion, while interest income rose 11.1% on year to ₹24.93 billion.

However, total expenses surged 16.4% on year to ₹42.87 billion, with the sharpest increase seen in fees and commission expenses, which climbed 27.8% to ₹1.88 billion. Impairment on financial instruments rose 22.8% to ₹13.52 billion. Sequentially, overall expenses were up 4.2%.

Credit costs stood at 9.6%, up more than 1 percentage point from a year ago and 58 basis points higher than the previous quarter. SBI Cards attributed the rise to higher provisioning during the quarter.

The company’s gross non-performing asset ratio was 3.07% as of June 30, largely unchanged from a year ago. The net NPA ratio rose to 1.42% from 1.11% a year earlier.

Receivables for the quarter stood at ₹566.07 billion, up 7% on year.

Total card spends grew 21% on year to ₹932.44 billion. Retail spends, which formed the majority, rose 15% on year to ₹824.04 billion, while corporate spends more than doubled to ₹108.40 billion.