1. SBI Cards falls as asset quality deteriorates in Q3

SBI Cards falls as asset quality deteriorates in Q3

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Upstox

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1 min read • Updated: January 29, 2024, 2:11 PM

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Summary

The gross non-performing assets (NPAs) or bad loans increased by 43 basis points to 2.64% of the total loan book.

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The profitability was impacted by rising provisions and interest costs.

Shares of SBI Cards & Payment Services are down around 6% today.

This comes after the pure-play credit card player’s asset quality worsened in the December quarter. The gross non-performing assets (NPAs) or bad loans increased by 43 basis points to 2.64% of the total loan book. The gross credit costs increased by 66% year-on-year to ₹882 crore.

Meanwhile, the new accounts were down by 33% to 10.9 lakh in Q3FY24. The net profit was up 8% to ₹549 crore. The profitability was impacted by rising provisions and interest costs. The cost of funds were up 127 basis points and the cost to income ratio increased by 191 basis points to 59.9%. “Cost to income is higher due to increased cashback costs during the festive quarter,” said the management.

Against the backdrop of rising cost of borrowing, the net interest margin declined by 25 basis points to 11.3%.

Also, revenue from operations increased 32% year-on-year to ₹4,622 crore. The management said that the revenue growth was driven by impressive spends and receivables growth.

Meanwhile, shares of the company have been under pressure and have declined more than 15% since July 2023.