SBI Cards reports 33% decline in net profit, net interest margin contracts by 68 bps

In Q2FY25, the company’s earnings before credit cost was higher by 13% YoY to ₹1,757 crore.

SBI Cards revenue mix during Q2FY25 saw interest income contributing 52% while spend-based revenue added 22%. Instance-based & other revenue accounted for 19% and the remaining 9% was chipped in by subscription-based revenue.

The interest income for the quarter was up 20% YoY to ₹2,290 crore. Meanwhile, fees & other revenue declined 2% YoY to ₹2,131 crore.

For the quarter ended September 30, 2024, SBI Cards reported a 30 basis points (bps) YoY decline in its yield to 16.4%. The cost of funds rose 31 bps YoY to 7.4%. The company saw a contraction in the net interest margin as it shrunk by 68 bps YoY to 10.6%. The cost to income saw a significant reduction as it came in lower by 375 bps YoY at 53.4%. The company’s credit cost for the quarter was up 231 bps YoY to 9% while the return on assets (ROA) diminished by 219 bps YoY to 2.7%.

SBI Cards saw a deterioration in its asset quality as gross non-performing assets (GNPA) stood at 3.27% compared to 2.43% in the corresponding period last year. The net non-performing assets expanded to 1.19% from 0.89% in the same period last year.

The company reported a 10% YoY rise in the cards-in-force to 1.96 crore. During the quarter new accounts declined to 9.04 lakh while spends saw an uptick of 3% YoY to ₹81,893 crore. Receivables came in higher by 23% YoY to ₹55,601 crore.

At the end of Q2FY25, SBI Cards’ market share for cards-in-force declined to 18.5% from 19.2% in the corresponding period last year. Meanwhile, the market share for spends was down to 15.7% from 18% in the same period last year.

Shares of the company have declined by nearly 11% since the beginning of the year. The stock has lost over 9% in the past year.